The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-05-16
Continued from First Page.

III w offt ittt Nv tSN
accountability that would otherwise be
involved"
Here is the part Of the Secretary's an
davlt devoted to the National City Bank {:
shortly after I became Secretary Of
the Treasury I was advised Of the close
relations between the plaintiff bank and
the National City Bank OF New York
and heard many rumors of the favorit-
ism that had been shown to the Ma
tional City Bank OF New York and
the plaintiff bank by the Treasury De-
partment. II was explained to me that
the National City Bank. through the
City Securities Company, which Ia or
aanized az an auxiliary n the entire
stock OF which Is owned by the stock
holders Of the National City Bank in the
proportions in which they own stock Of
the latter, was "A large shareholder Of
the plaintiff bank.
II subsequently learned that Milton
f.. Allies. the vice-president OF the plain
tin bank. receives about two-thirds Of
his annual salary of $4,000 from the
National City Bank OF New York and
that the latter was then maintaining
the following employees in this city
who were also identified with the plain
tin bank and who were In receipt Of
the following annual salaries from the
National City Bank Of New York:
Milton Il. Allies. annual salary. ..... 81, 900
George c. Nass. annual salary...... $500
Jerome j Wilbur tsi, 200 TO June 1,
lsit ts.Ioo thereafter). ......... 300
Mlss Marks. 1000
Lotta III. Taylor. ............. SEQ
Total. .sis.7to
Mr.. Allies, besides being a vice-presi-
dent OF the plaintiff bank. is the special
representative in this city Of the Ma
tional City Bank OF New York.
Miss Taylor was n clerk In the en-
ploy of the National City Bank. who for
merly had an office In the Treasury
Building and whose duty 1t was to COM
pile statistics Of national banks after
each report of condition.
shortly after assuming office and
on ascertaining that tho National City
Bank and the plaintiff bank had a
regular employee in the person Of Miss
Taylor. with desk room In the Comp
troller's office, and that she was being
given facilities for making advance re-
ports from that place upon the condi-
ton Of national banks to the National
City Bank and the Riggs National Bank
on April %. 1913. I directed that this
privilege be discontinued.
"Enttre1y lmpersonal."
IL adopted his action In an entirely
impersonal spirit and solely for the
purpose Of putting a N end to what I
regarded rs an unjust discrimination
and an improper use OF the Government
offices n facilities. l assumed that
the manifest propriety Of this action OF
my part would be appreciated by the
banks affected. but II seems, on the con-
trary. to have aroused their hostility.
although not so intended"
Secretary McAdoo already has pub
licly attacked the National City Bank
on this score, but the officers OF that
bank showed that their employees re-
ceived only such information as was
a matter Of public record and which any
national bank might have obtained II II
had desired to hire an employee for
the purpose. Furthermore. it was shown
that the young woman who compiled
the statistics was merely allowed IA
keep her working materials In q desk
In the ComptroIler's Office.
The McAdoo reply continues:
O assuming Office I ascertained that
the deposits ries of Government funds
were not being required to pay interest
on their deposits. Inasmuch as the
banks in the respective cities were. and
had for many years past been In
the habit Of rsying 2 per cent. in
terest on the balances OF their cor.
respondent banks. I regarded this ar
! Targetnent AZ " WHSte OF pubic money
Accordingly on April 80. 1919. I d.
ment funds should be required to pay
interest at the rate cf 2 per cent
per annum. beginning on the frst day
Of June. 1919.
Refused TO Pay Interest.
at that time the National City Bank
had $4,000 Of government funds. AND
the plaintiff bank had $780, 900 OF such
funds. Thu National City Bank re-
fused to pay interest and surrendered the
account.
'out Of the 1870 banks that were
government depositaries, there were no,
more than seven in the United States
that declined at the tim to comply with
that requirement.
"As a result Of this arrangement tn
al. ount OF interest received on govern
ment deposits for the year ending Jun'
80. 1914. was 3l.409. 426.O7. as compared
with the sum Sl22.2ls.s9 the amount
received for the fiscal year ending Jun'
30. 1919, of which last mentioned sun
approximately 1000 WAS contained II
the month of June, 1918. after the issu
ance OF my order calling for the paymen
of 2 per cent. on deposits.
II know OF no reason for the persona
hostility displayed toward me by tn
plaintiff bank in any prior to December
1913. other than the two incidents allow
mentioned
or the increase In the Riggs National
deposits shortly before Mr.. Allies re
signed as assistant secretary, Mr.. Nc
Adoo said:
"Mr. Milton e.. Allies was formerly
and from March 6, 1901, to April II
1903, an Assistant Secretary of the Treas
ury In charge OF the fiscal bureau hav
ing to do with the distribution of Gov
eminent deposits. having in that positio,
succeeded Mr.. Frank a. Vanderlip. VIII,
held the place from June /. 1897. t
March 5, 1901, and who went fror
there into the vice-presidency OF tn
National City Bank of New York. 0
April Is, 1903. Mr.. Allies resigned hi
position as Assistant Secretary OF tn
Treasury and on the e day took tn
oath of office as a director OF the plain
tiff bank and then became. al l am In
formed, it's v~ice-president.
Tells Of Deposits.
ION April II. 1903 INV days befor
his resignation and at a time when HI
arrangements with the plaintiff ban
had presumably been efectsd) he d.
posted with the plaintiff ban fund
OF the United States Government to tn
amount of SO. 900. 900. which, togethe
with 800. 900 that was on deposit wit
the plaintiff bank. made a total deposi
of Government. funds OF SO. 900, 900, al
without interest, as then was the Gus
tom.