Year: 1865

NEW YORK. Dec. 23,-The Treasurer OF
the United States has addressed letter
TO Andrew P. Hall and Others in TINS
city, which contains an important deci-
sion in relation to the undivided pronfs
of National Banks. He says under the
provisions of the forty-frst section OF the
National Currency Act have deemed IL
my duty to require to be included among
deposits, subject to the duty the unui-
vided profits of bank. 1t has always
been clear to me that profits should pay
a duty. Under this section the question
might be raised, should they pay duty as
deposits or as capital 1t seems TO me
that they are more Of the nature OF a de-
posit than capital / have directed that
they be so classed, The duty on depo-
sits and Oh. capital is fixed at the same
rate, so that it being decided that pfohss


we're to pay dnty, the duty under eitner
head, would be the same in amount,
with the exception following, a. lew
banks may possibly. own United STATES
bonds in excess of their capital. la case
profits were classed as capital they would
be entitled TO deduct such bonds to a
greater extent than they now do with
profits classed as deposits. 1t IS not pos
sible, however, that there are many
that would be the gamers by the alHer-
ent construction


The Commissioner of Internal Revenue
coneeives the law, under which he acts
to require him TO obtain data from the
banks, National or State, OF the taxes on
dividends or surplus, and also TO exact
the license fees required by the same act,
While it is true that the National Curren.
cy act, in providing for the seml.annual
duty, specifies that his duty shall be IN
lieu Of all existing taxes, 1t so happens
that the provision is not apphcaple 10
the Internal Revenue act, which creates
a law subsequent to the passage OF the
National Currency act desire to state
that / had, heretofore, on several occa-
sions, had opportunity to say both ver-
bally and by written communication
that public policy required that the sur
plus funds of a bank, say to the extent OF
20 per cent of the capital, should, under
certain circumstances, be exempt from
al! duty This, however, L am pleased
to know, has the concurrence OF the Sec
retary of the Treasury, the Commissioner
of Internal Revenue, of the Comptroller
of the Currency, and of gentlemen In
Congress, who have given the subject
attention, it is proposed, therefore by the
Com of Internal Revenue, and by myself
that at some early period in the session
a meeting be held of the of6cers named
in connection with members of the conf
mittee of Ways and Means and of the
committee of Banking and Commerce OF
the House of Representatives, before
which committees any matters relative
to banks will probably come up for con


sideration, and it is most likely that the
result of such a consultation will be the
recommendation to adopt by Congress
provision exempting from duty or tax
the surplus fund to the extent named, at
least to such an extent as will greatly
strengthen the banks by encouraging the
accumulation aud retention by them of
surplus. In regard to the matter OF
dailp settlement, | can only say that the
present requirements were adopted by
the Internal Revenue officers after a
careful consideration of the subject, and
that the matter of making returns OF
deposits, required by those officers, there
is a balance on hand when the books of
the bank are closed for the day, has been
deemed eqitable and Just