The evening times., 1900-01-10

Office Of the Treasurer. L. :
Washington, ID. C., Dec. 90, lS99
Sir: The Secretary OF the Treasury directs that
the proceeds Of the internal revenue shall for the
present. be concentrated iu voiu bank. Instmc-
tons 90 that end have been cent 20 the various
depusit1ry banks throughout the country. The
purpose Of this concentration is for distribution
Of funds 20 all the banks which accent the offer
Of the Department 20 pledge additional bonds In
order 10 secure such MONEYS
You viii appreciate that al present the De
partmont can leave with your bank only a fair
pro rata share Of the tunds transferred 90 you
and viii ask YOU 20 pay transfers drawn your
bank for the proposed distribution care will be
taken iy this cfhce 90 insu-e the retention BY
you Of your fair and increasing share Of the
fund.- gathered by this process aud the transfers
viii be adjusted with this plan IN view.
The Department relies on your cooperation in
this task. and trusts that the receipts viii with
ont unreasonable delay hll yCur quota oi deposits
Respectfully, ELLIS n ROBERTS,
Mr.. JAMES sTTLLMAN.
PRECEDENT, National CITY Bank New Yorl city
Il, considering these instructions il
must be borne in mind that the incoming
receipts We're about 81 OO0. 900 per day. that
the National City Bank had $4,000, eco OF
bonds on deposit against which Il had no
Government funds in its hands; that the
next largest depOstor OF bonds was the
Hanover National Bank in amount 81 $40. o.
COO aad the next largest 20 that bank. the
First National Bank Of New York. which
had on deposit 81 500. COO This latter de-
posit. il may be added was not made uu III
December %. Evidently, considerations of
relative security pointed 10 the National
City Bank as the best qualified inter-
| mediary for distribution. Il was this con-
sideration. and this alone. that operated on
my mind in the choice OF tnat bank % per-
form the service contemplated.
10 conclusion. Mr. Gage says:
q
enquiries Of the resolution. j would say.
First That the reason for utilizing
national bar3s as depositaries for public
moneys. as authorized by law, when the
receipts Of the Treasury were exceeding
its expenditures. has been 10 avoid the dis
turbance to business which the Withdrawal
of large sums OF money from active circu-
/ latiCn 10 the Treasury vaults must iney-
itab.y cause. The policy thus pursued by
me has been the established policy OF the
Government for many years, and depart
ure from IL under similar conditions would
certainly cause disastrous results.
Second. The reason for directing the
internal revenue receipts into depositary
banks al this time is that the revenues
are now largely exceeding the disburse-
ments from month 20 month. and seem
likely to DO so for an indefinite time This
condition would be a menace 10 the busi-
Gess world II assurance we're not given that
this surplus would be diverted from the
/ Treasury vaults TO public dcpositaries.
where. while secure 10 the Government. it
would remain available to business use,
Third. The reason for directing all OF
I the internal revenue receipts TO one de
positary was that il is more convenient TO
first collect the receipts Of numerous Of
I hces into one place. and make the desired
distribution from H. than 70 give new in
structIons daily 20 ll3 collectors The
most convenient agency 10 effect such dis
trlbutiOn is a bank which IS a member OF
the New York Clearing House
The National city Rank.
Fourth. The reason 70 .eieeting the
National City Bank as euca Distributing
[ agent vas that a. the time the order was
iT@sued it was one Of but two banks whi-h
had offered bonds sufficient 10 cover the
amount OF daily deposit. It's bond de-
[ post was Si.o0o.COQ, and that OF the Han
| over National Bank $l,9Io5 500 The Va
I tional City Bank was therefore the one
most naturally chosen. OF the si,.ty-eight
/ banks applying for a share Of the de
I posits, the National City Rank. the Han-
Z over Bank, and three others app icauts
I Tor over $500. 600 each, are the o1Iy ones
I out C. the .siXty-elght constituting grouu
d
amount for which they had ouered security
Fifth. The custom house property was
sold TO the National City Bank as the high
/ est bidder on July 3. 1889. Under the terms
| Of the sale it had the option OF paying IN
/ cash all OF the purchase money at any
I time. or any part il might elect above
$4,000, which sum 10 was absolutely oblig
/ ed TO pay. II exercised this option by
/ choosing 10 pay S3.2l5.G60. leaving $50. 900
/ fun payment has been made.
The payment received was turned into
/ the Treasury by deposit ~ the National
/ City Bank, it having been the established
| custom Of Treasury officials. under the
/ counsel Of their legal advisers. supported
/ by decisions Of the Supreme Court. 10 con-
/ slider moneys on deposit 90 the credit OF
! the Treasurer Of the United States in des-
| ignated depositries OF moneys in The
| Treasury.
This deposit was made IN a depositary
/ bank for the same reason that other de-
posits have been made in them. namely
because to withdraw the currency into the
vaults Of the Treasury, where il was not
/ needed and could not be utilized, would
| have required a Withdrawal OF credit thai
! was being extended in commercial circles
/ and to that extent a disturbance to the
natural order Of business would have fol-
/ lowed. To have required its payment BY
/ the National City Bank TO another des-
| ignated depOsitary would have been an un-
/ gracious discrimination without substan-
/ italy changing the fact
| Finally, under my administration OF tn,
/ Treasury Department no discrimination 3.
/ favor of one bank against another has beer
made. Generally speaking. when an in.
| crease in depositary banks was desired. al
have been invited TO qualify themselves foi
receiving such money. and have beer
| equally and equitably con Idered in theil
/ rcsDeCtINp relations 10 the .Trnnc,rr,.