Deposite Banks. tains in regard to the balance that will be due from this bank to the Treasurer of the United States, after the transfer draft upon it for the sum of $10,000, payable to the State of Rhode Island on the 1st of July next, shall have been paid. And I now understand that a war warrant will be drawn on the Rhode Island Union Bank, in favor of the Newport Exchange Bank, for one-half of that balance, payable in August next; and that another such warrant will be drawn for the other half of said balance, payable in September next; and this bank will then be prepared to pay said warrants. I am, very respectfully, your humble servant, Hon. LEVI WOODBURY. P. S. June 13th.-The cashier of the Rhode Island Union Bank has this day received notice (from the Treasury Department) of a draft on this bank, payable to the Newport Exchange Bank, for $7,500. G 1. MECHANICS' BANK, New York, March 20, 1837. SIR: I have the honor to enclose, herewith, our semimonthly statement of the situation of the bank, together with a duplicate of the Treasurer's account current. Our cashier has shown me your letter, advising of two further transfer drafts on us for $100,000 each, payable the 1st of the ensuing month. You will perceive we have paid during the past week nearly half a million of dollars on Government drafts, an amount that we could not pos sibly curtail from our discounts, during the existing unparalled pressure, without producing ruinous consequences to this community. We are, therefore, in debt, and subject to any specie drafts that may be made upon our city. Under these peculiar circumstances, if the period of pay ment of these drafts could be deferred, it would, I confidently believe, be of essential benefit, not only to the bank, but to the public. I have the honor to be, very respectfully, sir, your obedient servant, JOHN FLEMING, President Hon. LEVI WOODBURY. G 2. TREASURY DEPARTMENT, March 23, 1837. SIR: I have to acknowledge the receipt of your letter of the 20th instant, with its enclosures. With regard to the letter from this Department to which you refer, without specifying its date, advising of two transfer drafts of $100,000, payable on the 1st of April, and requesting an extension of the period of payment, I have to state that the copy of that letter has not been found, and, before acting on your request, I must ask you to transmit a copy of the letter to which you refer. I am, very respectfully, your obedient servant, LEVI WOODBURY, Secretary of the Treasury. J. FLEMING, Esq., President Mechanics' Bank, New York. MECHANICS' BANK, New York, March 24, 1837. SIR: It must be apparent to every discreet and judicious observer that the pecuniary difficulties which for some time past have pressed heavily upon the community, are fast approaching a crisis. The present indications are of a character justly to excite the apprehensions of reflecting and prudent men. Feeling persuaded that you take a deep interest in whatever affects the financial concerns of this city, I take the liberty of addressing you at the present time. The revulsions in commercial credit throughout Europe, as well as in this country, are well calculated to arrest the attention of all who are in any wise connected with the [25th CoNG. 1st Sess. At home, moneyed operations of the commercial cities. the recent failures of eminent houses, largely engaged in exchange and money transactions, have necessarily created a deep and widely-pervading excitement in the public mind; and from abroad, the advices are of a character to increase rather than to allay the existing apprehensions. The rates of foreign exchange are such as to justify fears of a considerable export of coin, which, I may say, has already commenced. This fact, connected with the actual scarcity of means to accommodate the merchants in meeting their current business engagements, now falling due, render it an imperative duty on the part of the city banks to adopt every reasonable precaution to avert the threatened disasters. It is certainly the interest, and it would seem also to be the duty of the Government, so to administer its financial concerns as to sustain and foster the business interests of a community which is so closely connected with the national treasury. The practice of past years of allowing the import in-. come to accumulate, for the accommodation of those whose transactions had contributed so largely to the public revenue, was not found to be injurious in its operation, nor did it afford any just cause of dissatisfaction in other sections of the Union. So large an amount of domestic and foreign money transactions centre in this city, that most of the commercial and mercantile interests connected with the general business concerns of the country are intimately associated with our financial situation and prospects. Our credits supply not only the imported products for consumption, but furnish also largely the facilities for realizing the vast amounts of our annual exports. When the source of a business thus extensive and complicated becomes disordered, it cannot be difficult to predict the consequent effect upon the many streams which diverge from such a fountain. It is under circumstances of deep responsibility, as one of the Government agents, intrusted, in a measure, with the management of the financial concerns of the Treasury, that I have presumed to trouble you at this important inoment, and to solicit your intervention, so far as you may think the exigency requiries, in alleviating the present difficulties, and in averting, if possible, those menaced us in prospect. I had the honor of addressing you on the 20th instant, requesting an extension of time with regard to the two drafts upon this bank, payable on the 1st proximo. In that communication a brief reference was made to the pecuniary embarrassments existing in this city; the difficulties then alluded to are daily increasing, and conscquences serious and alarming, as well to individuals as to public institutions, force themselves in a strong point of view on the attention of all who are interested in the result. With respect to the business and situation of this bank, it is proper to observe, that our transactions are with a larger number of dealers than those of any other city institution. In the management of our concerns we have studiously endeavored to accommodate the bond-payers to the utmost extent of our means, compatible with other claims. In doing so, we have necessarily been obliged to reduce, beyond our wishes, the amount of specie in our vaults. The drain of coin for ordinary business is constant, and to a very considerable extent. It is to be feared that some of the city banks are disposed to hoard their specie; the effect of which measure is, to throw the burden of the pressure unfairly upon others. We have paid of the Government funds, within the last fortnight, about eight hundred thousand dollars in Treasury drafts and warrants; the last of which, for one hundred thousand dollars, payment was demanded in specie, and we are now required to pay, in addition, two hundred thousand dollars on the first of the ensuing month. I think myself justified, under existing circumstances, in making this appeal to you, sir, on behalf not only of our own institution, but of the community generally; and submit with entire and respectful confidence, whether a bank, thus situated, should be compelled at such a time of imminent emergency, still further to curtail its discounts in the proportion necessary to meet the impending demands. It cannot be done without materially increasing the present distress; and it is feared that the attempt will result in extensive bankruptcies. In such an event, it is not for ine to suggest what may be the responsibilities resting upon the Government. I am satisfied that the proper disposition is not wanting to extend all the relief required. I am particularly induced to represent these facts strongly, in consequence of a demand made upon us yesterday by the Union Bank of this city, for $50,000 in specie, upon the allegation that you had required them to increase their stock of coin. The suggestion to them was doubtless a judicious one, but it will hardly be contended that the mere transfer of coin from the vaults of one city bank to that of another, can add to the stability of the associated institutions, while the effect is to increase still further the pecuniary embarrassments. The specie basis, in the mean time, remains the same; and the practice of drawing at a time like the present is calculated to unsettle the good understanding between the banks; which, if becoming no torious, is very likely to excite unnecessary apprehensions in other quarters. This bank has, to the extent of its ability, contributed promptly to the assistance of other institutions, and will continue to act in the same spirit, asking in return only a just forbearance and reciprocal action on the part of its associates in the public service. In conclusion, I take the liberty to suggest that, in addition to any aid which may be otherwise afforded, the action of the Government may greatly relieve and allay the existing excitement, and materially foster and encourage the commercial interests, by abstaining for as long a period as possible, from drawing upon the funds collected from the public revenue in this city. Should these drafts continue to any considerable amount, I am fearful that, in the necessity of protecting themselves, the banks will be compelled to contract their loans to an extent that must result in a ruinous bankruptcy, and heavy losses to the Government. I beg you to excuse the liberty I have taken in writing thus plainly upon the subject in question. Its importance is my apology, and I shall feel greatly relieved from pres ent apprehensions if it shall receive, at your hands, such action as seems to me to be imperatively called for. May I ask to be favored with a reply as early as may comport with your convenience. I am, very respectfully, &c. JOHN FLEMING, President. The Hon. LEVI WOODBURY, Secretary of the Treasury the period for the payment of the two transfer drafts referred to in your letter of the 20th instant, it may be useful to place distinctly before you the situation of the public money in the deposite banks somewhat more in detail than is usual in the current correspondence of this Department. By the 13th section of the act of the 23d June last, the whole amount of public money remaining in the Treasury on the first of January, 1837, excepting five millions of dollars, was required to be withdrawn from the banks and placed in deposite with the several States in quarterly payments, the first of which was to be made immediately after the latter date. These quarterly payments amount to upwards of $9,367,000 upon each of the first days of January, April, July, and October, in order that the whole sum of $37,468,859 97 may be deposited with the States during the year, agreeably to the provisions of the law. These great and frequent payments will fully explain the indispensable necessity for the past and present, as well as future curtailment in many cases of the discounts heretofore made to the community by some of the deposite banks, and which curtailment, while regretted by many, and while regarded by you as productive of such unfavorable consequences, must generally be the inevitable result of the above act of Congress. But no authority exists in any branch of the General Government, except Congress, to modify or delay the payments in question, onerous as they often must prove to the banks, or inconvenient as they must be to their customers. Congress, at its late session, though held since the law was passed, and its burdensome operation was in some degree experienced, not having thought proper to amend it, those deposite banks in which great sums of public money have been heretofore placed and loaned to accommodate the public, must now make, if they have not already made, the requisite preparation for meeting those large payments with punctuality. This course is due to their contracts with the Government and to the wishes of Congress; hence, it is hoped and believed that your bank, in common with the other public depositories, having, for more than nine months past, been apprized of the necessity for the repayment of the public funds in your custody, have not been unmindful of those preparations. But, at the same time, allow me to add that you may rest assured it will continue to be the policy of this Department to mitigate, whenever lawful, the existing embarrassment. In consequence of this policy, the large excess of five millions of dollars over the equal proportion of the State of New York, has been allowed to remain so long in your city-a place, however, where, at the same time, it is proper to add that, from its great commerce, enterprise, and central position, both the collections and disbursements of the revenue are usually heavier than elsewhere, and a considerable portion of the surplus of the public funds is most available for public purposes. Nor will the Treasury Department hereafter depart from its previous course to direct no more or earlier transfers thence than are required to meet seasonably the heavy expenditures ordered at different points by the acts of Congress, and to prepare and discharge those quarterly payments in deposite to the States in a manner conformable to the laws now in force, and which are rendered inadmissible by their provisions. It would fain do or suggest something more which might tend to lighten the existing pressure upon portions of the cominercial community. But some palliations have been spoken of, which, if adopted, it is feared could not be very useful, except as ministering to an imaginary expectation of benefit, while they would expose the community to a real increase of the very evils under which it now labors, by affording a pretext or temptation to a dangerous addition to the discounts and issues of banks at a time when the returns here prove the important fact that those discounts Deposite Banks. by the public depositories are now greater in the country, as a whole, and especially in the South and West, than they were in June last. On the contrary, I am, with much regret, compelled to say that this Department cannot, with justice to your institution and the community, encourage a hope that any exemption very permanent or essential from some pecuniary difficulties can, through its agency, with its limited powers, be effected; while these vast collections and disbursements are in progress, and while several portions of the country are at the same time suffering under the consequences of having, during the preceding eighteen months, invested in public lands alone, besides numerous speculations in private lands, and which are yet chiefly dead capital, the enormous sum of over thirty millions of dollars beyond the usual purchases in that way; and, while our importations during only the last year have reached near one hundred and ninety millions, or the unexampled excess (independent of specie) of fifty millions more than our whole exports. This extraordinary balance, after deducting every thing reasonable for freights, profits, difference of valuation, and other causes, must still leave an amount of debt difficult to be discharged, either at home or abroad, and equally difficult to be postponed, while failures and embarrassments, caused by excesses in over-banking, overtrading, and speculation, shall continue to be, unfortunately, quite as great abroad as at home. Among the various projects which have been suggested for mitigation or relief, no remedies which are feasible, secure, and legal, appear to me so natural or so likely to be so effected in the existing condition of things, as those indulgences which the States, to whom the deposite payments are to be made, will be able afterwards to extend, and the resolute commencement and prosecution by all concerned, of the ordinary cure of such evils, in pecuniary affairs, by increasing economy in expenditures, and by banking less, trading less, and speculating less, till prices and business revert to their former standards and channels, and both proceed more on the safe basis of actual capital and the real wants of the community. By a firm course of this kind, on the part of the discreet portion of the commercial world, with all that comity and forbearance to each other which the banks in the present exigency ought liberally to extend, so far as their own safety will permit, little doubt exists that many individuals will soon experience sensible relief, the urgent calls on the banks will speedily begin to lessen, and mutual confidence and a sound state of prosperity will be restored and long preserved. The country still possesses every great element to ensure future wealth and happiness; and with the exercise of fortitude and moderation now, and of more foresight and prudence hereafter, on the subjects before mentioned, it will soon become extricated from those mercantile embarrassments, which, it is trusted, are only temporary, and will be able to increase its securities against their frequent occur rences. I am, very respectfully, your obedient servant, JOHN FLEMING, Esq., G 6. TREASURY DEPARTMENT, March 26, 1837. SIR: I hasten to acknowledge the receipt of your letter of the 24th instant. Without waiting for a reply to my letter of the 23d instant, requesting a specification of the transfers referred to in yours of the 20th, I shall, to-morrow, direct the Treasurer to extend the time of payment of the transfer draft in favor of the Merchants' Bank for $50,000, payable on the 1st April, and that for $100,000, [25th CoNG. 1st SESS. in favor of the National Bank, payable on the 15th of April. These appear to be all the transfer drafts in favor of banks in your city, which are outstanding upon your bank; and, in justice to the institutions in favor of which they were drawn, which may have shaped their business somewhat in view of these drafts, an extension of thirty days upon each is as much as seems to be proper. You do this Department, in your letter, no more than justice, in attributing to it a deep interest in whatever affects the financial concerns of New York. Every thing in its power, consistent with law, will be most cheerfully done to sustain mercantile credit in your city. But with regard to your suggestions as to the curtailment of your loans, I find myself compelled to remark that your bank has been less called on to repay the public money in its custody, in proportion to the amount of its capital and its amount of public deposite, than any bank in your city. On the 14th instant, it appears to have had to the credit of the Treasurer of the United States more than two millions three hundred thousand dollars, being upwards of a million more than the Manhattan Company, an institution of similar capital, and upwards of half a million more than the Bank of America, which has an authorized actual capital of a million more than your bank, though in July last the amount of the public deposites was nearly the same in each. It appears from the returns of those banks that they have greatly and providently lessened their discount line in due season. It is, therefore, a matter of regret, after the experience of November last, that the requisite preparatory measures for meeting the payments required by law had not been efficiently adopted by all the deposite banks, if any of them be now suffering on that account. But, under the circumstances stated in your letter, I shall cheerfully extend to you all the relief which my duty will enable me to do. Besides postponing the payment of the transfer drafts mentioned in the former part of this letter, I will direct the warrant for $150,000, of which notice was given on the 13th instant for payment on account of the Chickasaw Indians, to be paid chiefly or entirely by some other bank. The other transfer drafts payable by your bank during the month of April, being for small sums, and in favor of banks in other places, are not particularized by you, and cannot be interfered with conveniently to those banks or consistently with other arrangements. It is to be hoped that no time will be lost in placing the condition of your bank in such a posture as will enable it to meet promptly, and without inconvenience, the large payments, amounting to nearly the whole sum now on deposite on public account, which will probably be required between the present time and the 1st day of October next. For the general views of this Department on the present subject, I beg to refer you to my letter of the 24th instant, repeating the assurance of my willingness to do every thing in its power to support mercantile credit in your city. I am, very respectfully, your obedient servant, LEVI WOODBURY, Secretary of the Treasury. President Mechanics' Bank, N. Y. JOHN FLEMING, Esq., G 7. TREASURY DEPARTMENT, March 27, 1837. SIR: I have to acknowledge the receipt this morning of yours of the 25th instant, referring to my letter of the 15th, (which notified you of the issue of a transfer draft for $200,000, in favor of the State of New York,) as describing the draft, the period of the payment of which you desired might be postponed by your letter of the 20th instant. In reply to that request, I have to state that the transfers to the several States at the commencement of each quarter of the present year are required by express law, and this Department has no power to postpone the period of their taking effect. It would not be possible to withdraw the draft in question, and require its amount to be paid by other banks which have a less amount of public money on deposite, without drawing upon them too severely at the present time. Besides, it is understood that the State of New York does not immediately require the money transferred to it under the deposite act to be paid, but will grant indulgence if desired. By But you will have perceived, by my letter of yesterday, that this Department has directed the extension for thirty days of the transfer drafts on your bank, in favor of banks in your city, payable during the next month, to an amount nearly equal to that of the State transfer drafts referred to. This is going, I believe, quite as far as justice to the other deposite banks will allow, if you will permit me to advert to another fact as a strong evidence of the indulgent course adopted by the Department towards your institution. the provisions of the act of June 23, 1836, no deposite bank is permitted to hold more than three-fourths of the amount of its capital stock on deposite. It became, of course, the imperious duty of this Department to place under transfer to banks which could legally hold it, the overplus beyond that proportion on deposite in the existing de-posite banks, which proportion, in the case of your bank, is only $1,500,000. After the lapse of nearly nine months from the passage of this law, your bank still holds more than $800,000 beyond what it is entitled to. So far from its being possible, under this state of things, to afford you much further relief, it must be apparent, in view of the facts stated in my recent letters to you, that the sum now on deposite with you must, in due execution of the law, be ere long greatly diminished. The transfers required to reduce the amount on deposite with your bank to the extent authorized by law to be held by it, were originally made prospective, so far as was believed requisite to enable you to curtail your operations, without serious inconvenience either to the commercial community or to yourselves. After the actual payment of the overplus held by your bank and required to be transferred by the deposite law, in order that the amount on deposite shall not exceed three-fourths of your capital, the payment of the residue will be deferred to the full extent of what seems to be justified by its provisions, and the exigencies of the public service, but will probably be gradually required to the amount of one-half or more between the present time and October next. I am, sir, very respectfully, your obedient servant, G 8. TREASURY DEPARTMENT, June 5, 1837. SIR: As the State transfer drafts for the July instalment are now issuing, I will thank you to inform me whether you have any particular wish as to the amount to be deposited with the State of New York by your bank. Very respectfully, your obedient servant, LEVI WOODBURY, Secretary of the Treasury. GEORGE NEWBOLD, Esq., BANK OF AMERICA, June 7, 1837. SIR: I have the pleasure to acknowledge the receipt of your favor of the 5th instant, and beg to inform you in reply, that we shall be pleased if the transfer draft on this bank bank in favor of the State of New York for the July instalment, shall be equal to at least $300,000; and if your own wishes shall prescribe a larger sum, say Brooklyn, June 7, 1837. RESPECTED SIR: We shall be glad, if perfectly agreeable, to receive a draft for the amount it will take for us to pay over to the State of New York. If agreeable to you, we shall be glad if you would instruct your agent, Mr. Robert Swartwout, to do his business with the Brooklyn Bank of Brooklyn, it being a speciepaying bank, and a depository of Government. Any business that you may think proper to intrust us with shall be faithfully and carefully attended to. I am, very respectfully, your obedient servant, R. F. HICKS, President. Hon. LEVI WOODBURY. G11. TREASURY DEPARTMENT, June 9, 1837. SIR: I have to acknowledge the receipt of your letter of the 7th instant. The transfer drafts for the payment of the July instalment to the States are preparing, and will soon be forwarded. All the public officers in and near New York having public funds in hand, and finding it convenient to do so, are required to deposite them in your bank by law, there being no other public depository at this time. I have addressed a letter to the collector of New York on the subject to-day as regards him. I am, very respectfully, your obedient servant, R. F. HICKS, Esq., G 12. MERCHANT'S BANK, New York, May 15, 1837. SIR: I enclose with this the account of this bank with the Treasurer at the end of the week just closed, showing no change in our balance of $392,100 03, due him. I duly received your notice relative to the comparative amount of specie in our vaults and our circulation. The apparent issues of this bank were increased by the unfair conduct of some of the others, the Phoenix in particular, in retaining on hand our larger notes, and paying them out in lieu of their own when calls were made for specie. The actual circulation of the Merchants' Bank, after exchanges with the others, fluctuates between two hundred and two hundred and fifty thousand dollars. Measures were taken, on getting your notice, to increase our specie, as you might observe by our return of the 5th May: but that was of no avail when our depositors drew out their balances in specie. On the morning of the 10th this bank was left with only between fifty and sixty thousand dollars, while the other city bank stood indebted to the Merchants' Bank, after the exchanges, 322,000 dollars. Our indebtedness to the Treasurer was increased 50,000 on the 1st of May, by adding that amount to a large sum already due to us by the Mechanics' Bank. Is there no mode whereby we can cancel a part of our indebtedness by making payment to the Treasuser in funds deposited at the South? To facilitate the business of the exchanges, this bank has opened accounts with various es Deposite Banks. tablishments in other States, at much inconvenience, but under the impression that it would meet the wishes of your Department. We have in Charleston, South Carolina, over 100,000 dollars, in Natchez, Mississippi, double that amount. Or will the Secretary allow us, on the 1st July, to pay over to the States their third instalment of surplus revenue? As to a payment in specie it appears quite impracticable now. I am, sir, with much respect, your obedient servant, JOHN J. PALMER, President. To the Hon. LEVI WOODBURY, Secretary of the Treasury. G 13. MERCHANTS' BANK, New York, August 18, 1837. SIR: I enclose herewith a statement of the condition of this bank on the 14th, and another on the 28th July, with the balances due to and from other banks at these periods being the documents omitted during my absence from the city. G 15. MERCHANTS' BANK, [25th CoNG. Ist SESS. I New York, August 23, 1837. SIR: I have received your letter of the 21st instant, on the subject of the transfer draft of forty thousand dollars to the State of South Carolina. You state your surprise that it was not provided for, as it was issued in accordance with my request contained in a letter of the 15th May. refer you again to that letter. I there state that this bank had a balance due to it in Charleston of one hundred thousand dollars. This was the fund provided to meet the payment of your draft. That balance in the Bank of the State of South Carolina has not since been lessened, and was, on the 1st July, one hundred and thirty eight thousand dollars. I addressed two letters to the Comptroller General of that State, telling him that the funds to meet your draft were in the bank where South Carolina made her deposites. I requested the president of the bank to pay your draft, debit it to the Merchants' Bank, and transmit it to me. It appears that your draft was duly presented at the Bank of the State of South Carolina, and there honor I also enclose statements of the account with the Treased; the amount being, I dare say, accounted for to the urer, presenting a balance due since, on the 12th August, of $63,698 52. The condition of this bank on the previous day will be forwarded to-morrow. In a letter from the Treasurer, dated 7th August, we have a list of drafts directed to this bank, and unpaid, viz: $10,000 00 10,000 00 30,000 00 1,198 52 12,500 00 $63,698 52 He has omitted in this the State transfer draft, No. 276, to the State of South Carolina, for 40,000 dollars, for which we provided funds at Charleston, and directed them to be applied to its payment. But this draft, instead of being honored as directed, has to-day been presented for payment by the agent of the Bank of the United States, and remains in his hands under protest for non-payment in specie. This is a dishonorable transaction on the part of the Bank of the State of South Carolina, or its officers; as you may observe by the document herewith, that this bank was then indebted to the Merchants' Bank 140,000 dollars. I am, sir, with great respect, your obedient servant, JOHN J. PALMER, President. Hon LEVI WOODBURY, Secretary of the Treasury of the United States. G 14. TREASURY DEPARTMENT, August 21, 1837. Sra: I have to acknowledge the receipt this morning of your letter of the 18th instant, with its enclosures. With regard to the State transfer draft in favor of South Carolina, to which you refer as being unpaid, it was placed upon you, in accordance with the express request contained in your letter of the 15th May, in which you desired, for your own accommodation, to disburse funds in that State. Under these circumstances it is a matter of great surprise that it has not been provided for. This Department has not yet been notified of its non-payment from any quarter except your letter. Is it your wish that it be recalled, in case the notice be received, or do you propose to provide for its payment? It will be desirable to have as early an answer to this question as convenient. I am, very respectfully, &c. JOHN J. PALMER, LEVI WOODBURY, President of Merchants' Bink, New York. VOL. XIV.A 11 State. But the officers of the bank, instead of debiting its amount to the Merchants' Bank, as directed, and paying it out of their balance, thought proper to sell or transmit it to the Bank of the United States; and, in lieu of your transfer draft, to send us a draft for the same amount on the Bank of the United States. This was the transanction which I called dishonorable on the part of the bank at Charleston. Your draft, as I stated in my letter dated the 18th instant, was presented for payment here, and is held still, I suppose, by the Bank of the United States. I do not see, therefore, how you could withdraw it, as the State of South Carolina has received its amount, and the Bank of the United States has paid it. I may also remark, that the Treasurer has drawn for his balance in the Merchants' Bank without reference to the draft alluded to. In my letter of the 15th May I express some anxiety to decrease our indebtedness to the Treasurer. That anxiety has never diminished; but, as I there remarked, a payment in specie seemed impracticable then, and equally so now. I am, sir, with great respect, your obedient servant, JOHN J. PALMER, President. Hon. LEVI WOODBURY, Secretary of the Treasury. G 16. TREASURY DEPARTMENT, August 25, 1837. Sin: I have to acknowledge the receipt of your letter of the 23d instant. With regard to your suggestion, that the amount of the State transfer draft issued upon your bank in favor of South Carolina, for the purpose of placing a portion of the public money on deposite with you on deposite with that State, has been already paid to that State, no evidence of that fact has been communicated to this Department. Upon these drafts no indebtedness arises against the United States. This Department is required to deposite a certain proportion of the public money with the States; no money is drawn from the Treasury by the process. If, in the execution of the law, it becomes necessary to withdraw a draft placed upon a bank which declines or refuses to execute it, and issue a new one upon another bank, this Department possesses full power to do so; otherwise the execution of the law might be defeated by the default of a particular bank. With any private arrangement which may have been entered into between a bank employed by the State and the deposite bank upon which a draft may be placed, this Department has no concern; they must of course settle their own liabilities to each other between themselves. It is the imperative duty of this Department to endeavor to place the sum in question on deposite with |