New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1894-01-06
CONTROLLER ECKEIS'S ErLIN1.
MARKET VALUE or TWO PER CENT BONDS
ALLOTTED A. A nAsIS tlE CIRCULATION.

MARKET VALUE or TWO PER CENT BONDS
ADOPTED ~ a BASIS FOE CIRCULATION.
Washington. Jan. 5.-The attention OF the Con
troller Of the Currency was called to-day 10 q
statement tina, the United States WAS ''lscrcliing
it, bonds" and purJoriing 20 give an account OF a
ruling made by Controller Eckels reversing former
rulings Of that Office. and dscrcdl,ng the per
cent bonds as a basis OF National bank circula-
lion II was said that letter had been received
IN New York from the Department 10 tho effect
that the Controller had decided. I'm View 81 the
present financial situation. that II per ceni bonds
were offered basis Of security for circulation
the difference between their present market price
end their par value must be mad" up IN cash or ad-
ditional bonds
Controller Eckels said. "rhe statements - which
you refer evidently prepared by some one
who was both unacquanted with the facts In the
case and unfamiliar with the law governing the
matter The facts are embodied In the following
letter written January to M"ssrs Harvey
Fisk & Sons, which reads follows.
Il have received your letter containing 5000,
funded ls'ls continued u per cent with instruc-
tons TO substitute $1,000 Of the same for like
amount OF per cents held In trust by the
Treasurer OF the United States for the First Ma
tional Bank Of Cvalde Texas and the balance
transferred to your account. IL answer you are
respectfully advised that owing to the deprecin-
ton OF the aforementioned bonds. the Controller.
in the exercise OF his authority. under the pro-
visions Of section JlG7 Of the Revised Statutes. de-
clines to accept them basis IN substi-
luton for PEI cents deposit. although sub
sutu;ion will be- permitted by allowing the differ
cnce In value upon par basis
"Thc matter IS one that is not discretionary with
the Controller bGt Is mandatory under the various
provisions OF the National Bank Act, sCfn. Of
which were Of the original enactment and some I'M
der sections ap )rove1 in 1852. The section referred
TO In the letter. i57-proyldcs among other things
that whenever the market cash value Of
bonds thus deposited with the Treasurer Gcr the
purposes Of securing circuaiionJ IL reduced below
the amount Of the circulation issued for the same
the Controller may demand and receive III" amount
Of such depreciation In other United States bonds
at cash value IN money from the association. to
be deposited with the Treasurer as long ~ such
depreciation continues.
THE Controller has no rign, to surrender a bond
that f. worth par and receive as substitute there
for n bond the current market value or which Is be
low mar and permit TO be outstanding 30 per cent
Of circu,s ton that IL based upon bond whose
amt market value is 10 per cent In other words
tIonnl banking association. requested the Controller
10 accent as security for circulation of ~ per cent
OF 100 n ,hond the market value Of which was ~
pc- cent and therefore under the law would emit
lie tho hank TO have outstanding but 30 per cent Of
50 per cent .,o, tho ,ar ougb, 70 10 amended
so a. IN nern,lt circulation 10 issue 10 IN" fun value
Of the b,nds deposited. but as long as the present
statute oxa,s being without discretion In the prem
isce hanks desiring to substitute per cents Tor \
rer cont bonds must make up the difference By m
additional deposit Of 2 per cent bonds