The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1900-01-11

loo
was accomplished without the slightest
interruption to that revival of commerce
and the industries of the country. which
has made the present period of unex-
ampled prosperity.
by the end OF 1898, the number of ma
tional bank repositories had been increased
TO BIG. located in forty-three States and Ter
ritorfes, and holding S94. sec, co., The New
York banks were able to control more
bonds and to qualify themselves in larger
proportions than the banks in the interior
cities With view to securing a more
equitable distribution of the funds, the
secretary. carly I'm 1899. designated forty
or fifty additional repositories. and, while
thus increasing the deposits outside of New
York city, he. at the same time, drew down
the balances in the New York city banks.
A SOURCE OF APPREHENSION
with the beginning of the present fiscal
year. the treasury was feeling the in
f1uence of the revival of commerce. For
the six months ending with Dec. 81, 1892
the excess of receipts over expenditures
aggregated s21,216000. This absorption of
money from active use into the treasury,
where 1t could serve no present useful pur-
pose. was a source of apprehension to the
public and Of anxiety to the department.
The situation was intensified by the fact
that the fall movement of currency to the
interior, for the movement of crops, oper-
ated to reduce the cash reserves at all
commercial centers. The secretary was in
disposed to increase deposits in public de-
positories and in order to avoid that, he
offered to anticipate interest on the public
debt, and later offered to buy s25. OOO 900 of
the ponds- The movement toward string
ency in the money market had assumed too
great momentum to be averted by such
means.
Dec. IS financial panic occurred
Of
ously. Interest rates rose to fabu-
lous rates and a general constric-
ton of the money market was
apparent. While this state of affairs
found its most violent expression in the
security market, it excited a state of anX-
iety and alarm throughout our industrial
ana commercial communities. The situation
was believed to be SO grave as to justify
the utmost interference. The receipts of
the treasury for December it was per-
celved, would exceed the expenditures by
seven or eight millions. Under these con-
dltions peculiar responsibility was thrown
on the treasury. The statutes conferred
authority to place public money, except
customs, in designated repositories and
gave power to relieve the situation with
out possible prejudice to the treasurys
needs. 1t was therefore announced, Dec
Is, that the secretary would deposit internal
revenue collections with depository banks
10 the amount of thirty or forty millions
should so much be applied for" From this
point on, the secretary makes direct
answer to the congressional inquiry. His
principle of action has been to so manage
the receipts and expenditures as to pro-
duce the least disturbance in that part of
the money supply which must be at the
service of commercial and Industrial use
ollce June l, 1888. the receipts of the treas
ury nave amounted to eleven hundred
millions. BY the aid of repositories the
amount In the treasury at the close Of any
quarterly period during the time never
rose more than $40, SOC, 900 above the ayera ge
for the whole period. Tables presented
show that substantial equilibrium was
maintained at all times between the re-
lation to the supply of money in the treas
ury and the supply In commercial uses.
THE NATIONAL CITY BANK
Taking up the history of the govern
ment's connection with the Hanover Ma
tional and the National City banks spe-
officially inquired into by the resolution, the
secretary shows that the National City
Bank was appointed depository July q.
1894. 1t was used as a depository for in
ternal revenue collections until the bond
sale in 1895, when the secretary of the
treasury deemed it advisable to use that
bank, together with four others, as de-
positories. and about SO, 0000 900 was depos-
tied with those banks. When another is
sue of bonds was made, in February, 1896,
the then secretary of, the treasury again
used the National City Bank and the
Hanover National Bank as repositories,
each for nearly S10000O00
Late in 1897 more than SIS 600 900 was To
be paid into the treasury as the result of
the Union Pacific settlement. To avoid the
transfer OF so large sum from public uses
to the treasury vaults the New York banks
were invited to qualify as temporary de-
positories Eight banks so qualified, the
National City for $24, 900 and others for
smaller amounts. These deposits were grad
r1Qll xxyffn III l@xr%
treasury until the several balances were
finally discharged.
When the s2OO,OOOO00 war loan was made
1T was seen that the paying into the treas
ury or such sum could not be otherwise
than dangerous thing for the public in
terests and useless thing to the govern
ment finances. The treasury announced
to the national banks it's desire to place
temporarily on deposit a portion of this
amount. and all banks, without regard to
size or location, were invited to qualify as
temporary repositories. All applications
were accepted. None was refused. The Ma
tional City Bank deposited sl4,0OOOOO of
bonds and the balances paid on this ac-
count never exceeded s14,000.00. The Han
over National deposited 81, 000, 900 of bonds
and received balance never larger than
81. 000 900.
The connection of the National City Bank
with the sale of the old cuStom-house
property in New York is described in a
memorandum prepared by the supervising
architects Office. In that connection, how
ever, the secretary calls attention to the
allegation that he has violated the law by
depositing the proceeds in bank depos-
itory, when the act decreed that the pro-
ceeds shuld be deposited "in the United
States treasury" Every United States de-
pository bank is. within the meaning of
Section 5155 of the Revised Statutes, a part
of the United States treasury. The moneys
which may be deposited in such bank in
clude all classes of receipts except customs,
and when such moneys are deposited in
such a bank to the credit of the treasurer
of the United States they are 'in the treas
ury'' just as much as If they were physic-
ally deposit in the treasury vaults at
Washington. The secretary cites decisions
of the Supreme Court which establish be-
yond question the legality of his action
The controller of the treasury, whose
decision is binding on the executive branch
of the government, holds that Money is
paid into the treasury of the United
States by being deposited with the treas
urer of the United States here in Wash
ington or to his credit with an assistant
treasurer or in a designated depository.
That has been the Uninterrupted and univer-
sal rule governing the accounting officers
of the government for many years. Let
tiers from officials of thirty or forty years
service in the treasury are quoted, show
ing that money deposited in a depository
bank is as much deposited in the Treasury
of the United States as when deposited in
any subtreasury
The customs property was sold on July
8, 1899, to the National City Bank for 3d.
265, 900. which amount was $4,000 larger
der. Aug. rs. certificates of deposit were
rdpd n the deDartmpDt covering 81