The times. [volume] (Washington [D.C.]) 1897-1901, 1900-01-11
Treasury Department,
nn7ra Of rho Secretary
Washington, D. c, Jan. 10, 1900.

iiouse Of Representatives The following infor
nation:
First-Copics Of all letters, agreements, pa
Pers, or documents between the Treasury DC
rartment ui the United States, or any pciscr
connected Herewith, and the National Cit'
Bank and the Hanover National Bank. Of tbs
city OF New York, on any person acting icr them
or either of them, since the fourth day Of March
eighteen hundred and ninety seven, relating e
the deposting Of public funds, bonds, or revc
MUGS in said bank or banks, or any other reia
tious business transactions existing %
heretofore had between the Government and thl
said banks, or either OF them.
Sccund-1he amount Of public money. bonds
or revenue deposited with said hanks, or either
~ them or with any national bank by the
Government. upon what security, for what
length Of time. and the reasons therefor, and
whether said banks, any OF them, have
paid the Government any interest on said de-
posits and II 50. how much, and all other infor-
mation concerning the same or in any way re-
lating thereto
custon-house property Of the United States in
New York city 10 said National City Bank, the
date OF the execution of the deed thereto, the
date and manner Of payment Of the purchase
money therefor, the disposition Of the proceeds
Ct said sale and whether or not the Govern
ment has paid any rents for said property or
any portion thereof for any purpose since the
day Of sale and il so. to whom, and all facts
relating TO said transaction.
Such transactions as the Treasury De-
rartmclt mas 1al WIN the DaHhs sIe-
cifcally named in the resolution. or with
any other banks not so specifically named
have been governed by the provisions of
sections 5152 Of the Revised Statutes, which
is as follows:
All national banking associations. designated
for that purpose by the Secretary OF the Treas
ury, shall be depositaries Of public money. cx-
cept receipts from customs under such regt-
lafions a. may he prescribed by the Secretary;
and they may also be employed as financial
agents VI the Government; and they shall per
form all such reasonable duties. as deposltaTles
Of public noreys and financial agents OF the
Government. as may be required 0f them The
Secretary at the Treasury shall require the asso-
Citations thus designated 20 give satisfactory Sc
curity, by the deposit Of United States bonds
and otherwise for the saic-keeping and prompt
payment of the public money deposited with
them and for the faithful performance OF their
duties financial agents 81 the GoTernmei't
And every association designated as receiver
OF depositary OF the public money shall take
and receive at par all OF the national currency
bills, by whatever association issued. which
have been plid into the Government Tor inter
nal revenue, or for loans or stocks
History of Deposits
The statute quoted became law June 3,
1864, and from that day TO the present time
it has been the practice of the Treasury
Department TO deposit with such institu-
tons as convenience might suggest or re-
quire, internal revenue and other receipts,
except those from customs.
The first marked recognition Of such
agencies occurred during the period when
the refunding operations we're being carried
on in the seventies, but particularly In
1873 incident to the resumption of specie
payments, when Secretary Sherman found
II necessary TO place with national bank
depositaries large sums of money, reaching
Z Msgr-
of that year.
The second notable use of national banks
as Government depostsries was in 1857 and
1855 Then, owing to an abnormal surplus
Of revenues, Secretary Fairchild increased
the number Of depositary banks, and en-
Outraged those then existing TO enlarge
their qualification TO hold pubic mone.s
by increasing the amount OF their United
States bonds on deposit with the Treasurer
CT the United States as security. Under
this operation. public moneys were accurnu
lated in the depositary banks until, at The
end of February. 1888, the aggregate was
SOL $40, goo. Later when the revenues de-
creased. funds were transferred from the
deposiiary banks 10 the subtreasuries,
whence they were disbursed on account of
public expenditure. BY midsummer Of
1892, the balances in depositary banks we're
reduced 10 their normal average OF about
81, 600 600, and they were maintained prac-
tically at this figure until the early months
of 1896, when portion OF the moneys
derived from the sale OF bonds Of that year
was deposited with such banks. At the END
Of March, 1896, public deposits in national
banks aggregated t27 .010.ggi.
On March 4, 1897, there were 159 national
hank depositaries, holding total Of sie,-
lss, 4l0 With few exceptions. these insti-
buttons were made the recipients of deposits
from internal revenue collectors at the
various points in the country where the
chief Offices of the collectors of the several
districts are located. All these depositary
banks were permitted TO hold, as fixed bal |
ances. an amount approXimating the par 1
value Of the bonds deposited as security |
Any surplus over the amount which each |
was authorized to hold was required to ne |
transferred TO some one Of the several sub |
treasures as soon as received.
THE general course of affairs and prac-
tice continued until November 1881. At
the end OF October OF that year public de-
posts in national banks aggregated ST.
les, GIG. During November. however, were
begun those large payments which resulted
from the highly successful settlement OF
the Pacific Railroad Indebtedness. The
receipts on account OF the Union Pacific
Railroad aggregated SOS. i4s, 223.75, all OF
which was paid between November &c, 1884
and January 6. 1898, period OF little over
q month.
IL was thought cxpedient, as a part OF !,
this enormous transaction. 10 utilize for |
few days the services Of depositary banks. |
with the result that, al the end of Novem-
Der. 1897 public deposits with such insii- |
tutions had increased to s37.744 2l7, and at 1
the end of December. 1897. to SIS, lS2. III
The reason for this action was TO avoid 1
the injurious effect upon trade and indus- |
try OF a too sudden Withdrawal from public I
uses into the vaults Of the Treasury OF so l
large sum as hfty-eight millions Of dol |
lars. For the same reason, on December T. |
1897, gave notice that on Friday. Deem
Der "A, 1887, the department would be pre-
pared TO begin the redemption, without re-
hate ell Interest, of the bonds. aggregating |
SO. sO4 ,952 issued in aid of The Pacific |
railroads, commonly known as currency
sixes," and maturing January ], 1888.
BY the end OF May, 1895. public deposits I
in depository banks had been reduced to !
SIS. 239. 1853.
Enec, of thc war.
Al this time occurred an event which has !
ever since had a marked influence upon
the course OF national finances, namely, the /
breaking out of war between the United I
States and Spain. June /. 1895. there were
l12 depositary banks. holding a total but I
little in excess OF SIS ,000, 600 thus showing \
only slight modification Of the condition
existing on March l. 1897. Notwithstanding /
the receipts on account OF the Union Pa
cinc settlement
Now. however. the Government was con
fnonted with the necessity of raising i'm
lnediately large fund for war purposes
The act of June 10. 1898. known RS The
war revenue act, conferred upon the Sec