Evening star. [volume] (Washington, D.C.) 1854-1972, 1900-01-10

tinnal and the National city bsrkS specifi-
cally inquired into by ta, resolution. the
Secretary shows that JE- National City
Bank was appointed 'sro~!ta~y July u.
1894. 1t was used oepDsitary for in
tvruau revenue ColIec;i-rs until the bond
sale IN 1856 when the then Secretary Of TIE
Treasury deemed il advisable to use that
bank together With fols "-}.srs. a deposit
1aries. and about S23,Wf'th"' was deposited
with those banks. WI. q -trGthsr issue OF
bonds was made. in February. 1S!h. the
then Secretary of the Treasury again used
rht. National City BANK and the Hanover
National bank as dep'Sltailrs. edGil l"l
nearly S1o.OUU.WD.
Late in 1871 more thar. S'>.'EH'n" was TO
b. paid into the trsastr- - III result 81
The Union Pacific settlement. To avoid the
transfer of so large d sum from public
uses to the treasury vaults the New York
banks w-re invited t. 'rts'iity as tempo
rarv depnsitarie$ E:Er- banks 80 quail
fled-the National City i"v >2t.tH",'s" and
hers for smaller am uH;-. ThrS" d"p'--
its were gradually Withdraw by transfers
To the subtreasury. until H. several bal
ances were finally discharged
DepeSiting the War Loan.
When the $2oOnjOOo0 .ca~ loan WAS made
it was seen that the paging into The treas
ury of such a sum ceuli rnt he otherwise
than a dangerous thing for thu public in
terests. and n useless thing to the gov err
ment finances. The treasury announced T."
the national banks its desire I" place tenn
porariIy on deposit portion OF inns
amount. and all banks without regard TO
size or location, were invited To quality as
temporary depositaries -hll applications
We're accepted. none wa refused Tine Ma :
tional City Bank deposited Sl4f""."n of
bonds and the balance paid IN this ac-
count never exceeded S1i.nDI.t#Tl The Han
over National deposited s1l,WT.sn' of bonds
and received a balance never larger thah
Sill .Na.an.
Sale of Custom House Property.
~, L
with the sale of the old custom house prop
erty in New York is describe, in a memor-
andum prepared by the supervising archi-
tect-S office In that connection. however
the Secretary calls attention 10 the allega-
ton that he has violated the law by de-
posting the proceeds in bank depositary
when the act decreed that the proceeds
should be deposited in the United States
treasury.
Every United States depositary bank is.
within the meaning of section 5l':; of the
Revised Statutes, n part of the United
States treasury. The moneys which may
be deposited in such a bank include all
classes of receipts except customs, and
when such moneys are deposited in such a
bank tn the credit OF the treasurer of the
United States they are ''in the treasury
just much as if they were physically on
deposit in the treasury vaults at WASH
ington. The Secretary cites decisions of
the Supreme Court which establish beyond
question the legality of his action.
Depository and the Government.
The controller of the treasury. whose
decision is binding upon the executive
branch of the government, holds that
money is paid into the treasury of the
United States by being deposited with the
treasurer of the United States here in
Washington. or to his credit with assist
ant treasurer. or in designated deposit
tary- That has been the uninterrupted
and universal rule governing the account
officers ~ q
years
Letters from officials of thirty or forty
years service in the treasury are quoted.
showing that money deposited in depoSi-
tary bank Is as much deposited in the
treasury of the United States as when de-
posted in any subtreasury.
sale of Customs Property.
The customs property was sold July 3
1879. t" the National City Bank for si2t5-
Wm.which amount was s19oGO0 larger than
that rendered by the next highest bidder
August ~ certificates of deposit We're for
warded 10 the department covering Si.21o-
"@ credit as proceeds of the custom house
properly in the general account of the
treasurer with the National City Bank
depositary bank. The treasurer duly ac-
"epted the fund deposit in the treas
my II was subject to his jurisdiction and
orders.
Subsequently the National City Bank
was ordered by the treasurer to transfer to
the subtreasury and other national bank
rent has been paid to the National City
Bank for the governments occupancy for
the reason that such payment awaits ap-
preparation by Congress
The correspondence between IN. depart-
rnent and the National City Bank is quoted
showing the refusal of the department TO
give the National City Bank its full balance
81 spEreN. except concuTrently with all
"ther banks in the first group. the balances
Of the National City Bank and the Ham
over National Bank being built up pro rata
h.-r
Summing Up the Reply.
First That the reason for utilizing ma
tional banks as dcpcsitaries for public
moneys. as authorized by law when the re-
ceipts Of the treasury were exceeding its
expenditures. has been to avoid the dis
turbance to business which the with
Hrawai of large sums of money from ac-
live circulation to the treasury vaults must
inevitably cause. The policy thus pur-
sued by me has been the established policy
OF the government for many years and a
departure from it under similar conditions
would certainly cause disastrous results
Second The reason for directing the in
itrnaI revenue receipts into deposirary
ranks at this time is that the revenues are
Few largely exceeding disbursements from
month To month. and seem likely 10 do So
Tor an indefinite time. This condition
would b" d menace to the business world
IL assurance were not given that this sur
plus would De diverted from the treasury
vaults to public depOsitaries. where while
secure TO the government. it would re-
main available to business use
Third The reason for directing all of
Inc internal revenue receipts TO one de-
tosltar\ was that it is more convenient
TO first collect the receipts Of numerous
%fnctS into one place. and make the desired
distribution from it. than To give new in
strucJioP@ daily TO 1i3 collectors The rnost
convenient agency To effect such distribu-
lion is bank which is a member of the
NV York clearing house
Fourth The reason for selecting the Ma
t"na! City Bank such distributing agent
was th'tt dt the time the order was issued
IL was one of but two banks which had Of
Tered bonds sufficient to cover the amount
o. the daily deposit. Its bond deposit was
S4"H"o, and that of the Hanover Ma
,l0nal Bank S,9lO.JDD. The National civ
Bank was therefore the one most naturally
chosen or the siXty-eight banks applyinf
for share of the deposit the National Citv
1.ank. the Hanover National Bank and
ihree others, applicants for over $4,000
each, are the only ones out of the sixty-
tisht constituting group one which have
not been supplied the full amount for
IPE NOD