Evening star. [volume] (Washington, D.C.) 1854-1972, 1894-01-05
CON TROLLER ECkELS.
He Explains His Position on the PEI
Cent Bonds.
The Law Under which He Acted A
The Letter, i'm Question.

rency has been called to the article
which appeared in q New York paper as
sorting that the United States was dis
crediting it's bonds" ana purporting to
give an account Of a ruling made by Con-
troller Eckels reversing former rulings of
that off1ce, and discrediting the pef cent
bonds as a basis of national bank circula-
ton. The article stated that a letter had
been received in New York from the de-
partment to the effect that the controller
had decided. In view of the present general
situation, that II 2 per cent bonds were
offered as a basis Of security for circulation
the difference between their present market
price and their par value must be made up
in cash or additional bonds. and that in
said letter attention was further called to
an ancient section Of the Revised Statutes
dealing with bonds to secure circulation
applicable in war times, when the vartous
issues of bonds were selling 1t less than
90 per cent Of par. having no bearing upon
the case in point.
Controller Eckels said:
The Letter Referred to.
1.-THE statements to which you refer were
evidently prepared by some one who was
both unacQuainted with the facts in the
case and unfamiliar with the law govern
ing the matter. The facts are embodied
Of January to Messrs. Harvey Fisk q
Sons Of Nassau street, New York, which
reads as follows:
WASHINGTON, Jan. 8, 1894.
Messrs Harvey Fisk & Sons,
No. "A Nassau street,
New York. N. z.
I have received your letter Of the ID in
slant, containing $4,000 funded 1S9ls con-
tinued at 2 per cent. with instructions to
substitute sl2.50O of the same for a like
amount Of per cents, held in trust by the
treasurer Of the United States for the First
National Bank of Uvalde. Tex. and the
balance transferred TO your account. In
owing to the depreciation Of the first men,
TONED bonds. the controller, In the exer-
else Of his authority. under the provisions
Of section 5167 of the Revised Statutes, de-
clines to accept them on an even basis in
substitution for per cents now on deposit,
although substitution will be permitted by
allowing the difference in value upon q par
basis.
This case will be held awaiting your an
swer.
Very respectfully,
JAMES H. ECKELS. Controller.
Not Discretionary, but Mandatory.
1.-THE matter is one that IL not discre-
tionary with the controller, but IL man.
datory under the various provisions of the
national bank act. some Of which were of
the original enactment and some under
sections approved in 1882. The section re-
ferred to in the Acknowledgements
among other things that whenever the
market or cash value Of any bonds thus
deposited with the treasurer (for the pur-
poses of securing circula 1on) IL reduced
below the amount OF the circulation issued
for the same. the controller may demand
and receive the amount Of such deprecia-
ton In other United States bonds at cash
value or In money from the association, to
be deposited with the treasurer as long as
such depreciation continues It further
provides that the controller, upon the
terms prescribed by the Secretary Of the
Treasury, may permit an exchange to be
made Of any of the bonds deposited with
the treasurer by any association for other
be received as security for circulating
notes, II he Is Of the opinion that such an
exchange can be made without prejudice
return Of any bonds to the association
which transferred the same.
Provided that the remaining bonds which
shall have been transferred oy the asso-
notes are equal to the amount required for
the circulating notes not surrendered by
such association, and that the amount of
bonds in the hands OF the treasurer is not
be kept on deposit with him, and
that the market or cash value Of the re-
naming bonds Is not below the amount re-
quired for the circulation issued for the
same"
The Circulation Act.
Section 10 OF an act entitled IAN act to
enable national banking associations to
extend their corporate existence. and for
other purposes, approved july Il. 1882. pro-
vides as follows:
That upon a deposit Of bonds, as de-
scribed by sections 5lO9 and SLIGO, except
as modified by section Of the act en-
titled An act fixing the amount Of United
States notes. providing for q redistribu-
ton Of the national bank currency. and for
other purposes national banking associa-
lions shall be entitled to receive from the
controller OF the currency circulating notes
Of different denominations. in blank. reg
fstered Snd countersigned as provided by
law, equal in amount to 80 per cent OF the
current market value. not exceeding par
of the United States bonds 30 transferred
and delivered
The language Of this last section is also
the language Of section 5171 Of the original
act.
Phil. Evans Crime.
RARn2TOwN Tan