to 1907, and we get back to the very point where Hamilton started, that is, to use these banks just as anybody uses them.

In the
It

Now, that has only to do with the public deposits in banks. There were other peculiarities in regard, for instance, to the receipt of checks by collectors of customs and collectors of internal revenue. first period there was no restriction whatever, absolutely none. is true, in 1840 the first subtreasury act was passed, in the last year of the Van Buren Administration, and repealed during an extra session in the first year of the following Administration, in August, 1841. I have not included that operation of the subtreasury act in this period because they still used banks, and here is an instructive account of how they tried to carry out that system at that time. This comes from a New York paper, the New York Exchange of September, 1840:

The operation of the subtreasury as at present carried out is a mere bank affair. The manner in which the business is done is this: The receiver holds his office in the Bank of America, and a person having a bond to pay deposits his money in the bank, draws a check, has it certified as good by the officer of the bank, and this is received for the bond.

That was in 1840. The subtreasurer also paid drafts on him in checks on the Bank of America, unless specie were demanded by the creditor. So you see they were still using banks in that period.

In the second period, when it was a felony to deposit money in banks, checks were not received by the collectors of internal revenue or customs; but in the third period they commenced to receive checks again. In 1863 the internal-revenue collectors commenced to receive checks, and they have received checks, with slight interruptions, from 1863 to date; but the receipt of checks for customs duties has not been permitted, except here and there in a desultory manner, until we get to the Aldrich Act of last year, and here we have a singular limitation again. While the checks are received by customs collectors-that is, in their discretion-all over the country outside of subtreasury cities, they are not received in subtreasury cities. For instance, in Baltimore no checks are received by the collector of customs, except in very few instances, which need not be considered. He requires the money to be paid. He puts that money in the subtreasury, and there it rests. In that manner of doing business the importer can not use his checks in payment, and it is necessary for him to obtain the money at his bank or elsewhere.

The CHAIRMAN. The checks are received outside of subtreasury cities?

Mr. HALLOCK. Yes, sir; in the discretion of the Secretary of the Treasury and at the risk of the collectors.

The CHAIRMAN. I do not see how they can do that in view of the letter of the Treasurer of the United States which I have here. This resolution was submitted to him on the 19th of December, and on the 5th of March he wrote this letter to the Secretary of the Treasury:

TREASURY DEPARTMENT,

OFFICE OF TREASURER OF THE UNITED STATES,
Washington, March 5, 1908.

Hon. GEORGE B. CORTELYOU,

Secretary of the Treasury.

SIR: I have the honor to submit my views on the concurrent resolution of December 19, 1907, providing for the receipt of certified checks of banks in payment of all public dues and the drawing of checks against the depositary accounts by disbursing officers in subtreasury cities, as elsewhere, which was referred to me for an opinion.

The concurrent resolution is not law, and its provisions can not be complied with without absolute violation of the law, which provides that only gold and silver coin, coin certificates, Treasury notes, United States notes, or national-bank notes shall be accepted in payment of dues to the Government. See sections 3009 and 3473, Revised Statutes of the United States, copies of which are inclosed.

Section 3620, Revised Statutes, directs that every disbursing officer having any public money intrusted to him for disbursement shall deposit the same with the Treasurer of the United States or some one of the assistant treasurers of the United States. In places, however, where there is no treasurer or assistant treasurer the Secretary of the Treasury may specially authorize the deposit of such public money in any other public depositary. Copy of section 3620, Revised Statutes, inclosed.

I also inclose the written opinion of the Solicitor of the Treasury to the effect that the concurrent resolution in question is not law and would operate no change in the present laws.

That would seem to be inconsistent with the statement that outside of subtreasury cities they have been receiving checks.

Mr. HILL. That would be no more effective in the case of customs than in the case of internal revenue. They have been receiving certified checks for internal revenue for years.

The CHAIRMAN. There seems to be this distinction: When the Government accepts a check in payment for customs duties they release the property and the property goes to the importer and enters into consumption. It is not so with all internal-revenue receipts. It may be with some of them. There may be or may not be a distinction, but I am only quoting the letter. I am not stating my views.

I also draw your attention to the fact that to accept checks from any bank would carry with it a great responsibility as to the reliability of payment, for a certified check when received by an official releases all other parties to the paper and the sole reliability of payment rests in the ability of the bank.

In times of financial unrest this would impose a serious responsibility upon the officials and perhaps might result in a grave loss. A check is only a promise to pay money, and the policy of the Treasury Department has always been to accept checks subject to collection, no credit being given until payment of the same has been received in money.

Furthermore, if officials were authorized to accept certified checks from any bank in payment of customs dues or internal revenue it would involve the requirement of a knowledge of the financial stability of hundreds of banks, which would be a most onerous burden unless a bureau of information were established.

It should also be considered that the Government has vigorously adhered to the practice and the law thereon that all deposits with banks should have satisfactory collateral. If only a certified check be received, then the bank whose certification is accepted for the check has Government funds in its possession and control, without any collateral being given to the Government. As in the cases of miscellaneous banks, no prior lien protects the Government. It would also be necessary that some arrangement be devised for the collection of certified checks, either through depository banks or through messenger service from the subtreasury. Our experience during the recent financial trouble in the difficulties encountered in collecting certified or other checks from the banks, not only by the Treasury, but by disbursing officers who kept their accounts in depository banks in cities where a subtreasury was not located, is still fresh in our memory, and this experience deeply impresses the fact that the Government should not be placed in a position where it would have difficulty in promptly collecting money due it it in order to meet its expenditures.

Respectfully,

CHAS. H. TREAT, Treasurer of the United States.

MEMORANDUM.

A concurrent resolution introduced in the House of Representatives December 19, 1907, declares:

"That it is the sense of Congress that the Secretary of the Treasury should, in his discretion and under such regulations as he may prescribe, permit the receipt of certified checks of banks in payment of all public dues, the deposit of the same in depositary

banks, and the drawing of checks against such depositary accounts by the disbursing officers in subtreasury cities as elsewhere."

Under the Revised Statutes of the United States, section 3473, the Secretary of the Treasury can not receive in payment of duties on imports anything other than gold and silver coin, coin certificates, or demand Treasury notes. Under the same section no officer of the Government has a right to receive in payment of any other debt, demand, or taxes due to the United States anything other than "gold and silver coin, Treasury notes, United States notes, or notes of national banks." (See also Miltenberger v. Cooke, 19 Wall., 421; American Brewing Co. v. United States, 33 Ct. Cls. Rep., 348.)

Should this concurrent resolution be passed, it would not operate as an amendment or repeal of section 3473, because it would not be a law. An act of Congress can not be repealed except by another act of Congress which expressly or impliedly operates as a repealing act. A "concurrent resolution" is not an act of Congress because it is not submitted to the President for his approval, under Article I, section 7, of the Constitution, which provides that—

"Every order, resolution, or vote to which the concurrence of the Senate and House of Representatives may be necessary (except on a question of adjournment) shall be presented to the President of the United States."

66

In the Fifty-fourth Congress a doubt was expressed in the Senate as to the propriety and legality of the practice of passing concurrent resolutions" without presenting them to the President for his approval, and the question was referred to the Committee on the Judiciary, who rendered a report in which they thoroughly discussed the history and constitutionality of the practice, and reached the conclusion that it was lawful and proper, unless the resolution contained matter "properly to be regarded as legislative in its character," and further that the words of the Constitution, "to which the concurrence of the Senate and House of Representatives may be necessary," referred to the "necessity occasioned by the requirement of the other provisions of the Constitution, whereby every exercise of 'legislative powers' involves the concurrence of the two Houses," and hence did not prohibit concurrent resolutions without presentation to the President in cases where no exercise of the "legislative powers," conferred by the Constitution, was required. And, hence, that a resolution calling for a supplemental or additional report or estimate as to river and harbor improvements, being, in substance, little, if anything, more than a request or direction for information from a Department, did not require the approval of the President. (Senate Reports, 54th Cong., vol. 2, No. 1335.)

In this connection it may be noted that concurrent resolutions do not begin with the formula prescribed by Revised Statutes, sections 7 and 8: "Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled," and "Resolved by the Senate and House of Representatives of the United States of America in Congress assembled.' They begin with the formula: "Resolved by the House of Representatives (the Senate concurring)," or "Resolved by the Senate (the House of Representatives concurring)," thereby indicating that the two Houses do not regard the contents. of the resolution as "legislative" in their character.

The particular concurrent resolution under consideration, therefore, if passed, would operate no change in the present law: First, because an act of Congress approved by the President can only be repealed or modified, expressly or impliedly, by another act of Congress so approved; second, the resolution is merely advisory and contains no matter of a "legislative" character. If the matter which it contains should be construed to be of that character, the resolution would be void and inoperative because not presented to the President for his approval.

MAURICE D. O'CONNELL,
Solicitor of the Treasury.

[From the Revised Statutes of the United States.]

SEC. 3009. All duties upon imports shall be collected in ready money and shall be paid in coin (or coin certificates) or in United States notes, payable on demand, authorized to be issued prior to the twenty-fifth day of February, one thousand eight hundred and sixty-two, and by law receivable in payment of public dues. (See secs. 254, 3473.)

SEC. 3473. All duties on imports shall be paid in gold and silver coin only (coin certificates) or in demand Treasury notes, issued under the authority of the acts of July seventeenth, eighteen hundred and sixty-one, chapter five; and February twelfth, eighteen hundred and sixty-two, chapter twenty; and all taxes and all other debts and demands than duties on imports, accruing or becoming due to the United States, shall be paid in gold and silver coin, Treasury notes, United States notes, or notes

of national banks (and upon every such payment credit shall be given for the amount of principal and interest due on any Treasury note not received in payment on the day when the same are received). (See secs. 254 and 3009.) (46, s. 5, v. 12, p. 313; 12 Feb., 1862, c. 20, v. 12,p. 338; 25 Feb., 1862, c. 33, ss. 1, 5, v. 12, pp. 345, 346; 11 July, 1862, c. 142, s. 1, v. 12, p. 532; 3 Mar., 1863, c. 73, ss. 3, 5, v. 12, pp. 710, 711; 3 June, 1864, c. 106, s. 23, v. 13, p. 106; 30 June, 1864, c. 172, s. 2, v. 13, p. 218; 27 Feb., 1877, c. 69, v. 19, p. 249. Savage, executrix, v. U. S., 92 U. S., 482.)

SEC. 3620. It shall be the duty of every disbursing officer having any public money intrusted to him for disbursement to deposit the same with the Treasurer or some one of the assistant treasurers of the United States, and to draw for the same only as it may be required for payments to be made by him in pursuance of law (and draw for the same only in favor of the persons to whom payment is made); and all transfers from the Treasurer of the United States to a disbursing officer shall be by draft or warrant on the Treasury or an assistant treasurer of the United States. In places, however, where there is no treasurer or assistant treasurer the Secretary of the Treasury may, when he deems it essential to the public interest, specially authorize in writing the deposit of such public money in any other public depository, or, in writing, authorize the same to be kept in any other manner, and under such rules and regulations as he may deem most safe and effectual to facilitate the payments to public creditors. (See Sec. 5488.)

Mr. HILL. Will you kindly state what the regulations of the Treasury Department have been with reference to the acceptance of certified checks by internal-revenue collectors?

The CHAIRMAN. Those regulations are all in print.

Mr. HALLOCK. I know the man who wrote that letter and I can answer everything in it, but not in half an hour, and please do not ask me to. Though not a lawyer, but a physician, I can answer everything in that letter.

Mr. Kaufmann, the treasurer of George Borgfeldt & Co., of New York, which pays the largest amount of customs dues of any firm in the United States, is here. He has a check in his pocket which he will show you, a certified check, bearing the indorsement of Mr. Hamilton Fish, which was accepted in one case, as it ought to have been in every case in New York City. You will have no trouble to get all the information. In addition to that, we have present a delegation from Baltimore.

The CHAIRMAN. The committee would be glad to have you file a brief.

Mr. HALLOCK. I thank you.

STATEMENT OF MR. E. KAUFMANN, TREASURER OF GEORGE BORGFELDT & CO., NEW YORK, N. Y.

Mr. KAUFMANN. Mr. Chairman and gentlemen of the committee, I have been requested to appear here and tell you of the hardships and risks which importers have to undergo in order to pay duties into the Treasury.

In the first place, we import largely at all the principal ports of the United States. As the Treasury will not receive checks I am obliged to leave my office, go to the bank and draw the money in cash-which is sometimes a large amount, and it would be quite dangerous to trust messengers with it-take it down to the subtreasury, and there a certificate of deposit will be issued, which takes anywhere from one to three hours I can either wait there that time or send down again for it-and then the certificate of deposit is forwarded to the port of entry where the ship enters. Newport News is a small port and there are small banking facilities there. We have large shipments arriving

there, sometimes 2,000 cases at a time, and it has been very troublesome. Through one of our banks in New York, the Citizens' Central National Bank, an arrangement was made whereby that bank opened an account in a Newport News bank where the collector of the port has his account. That has facilitated matters very much. We simply authorize our bank to transfer to the bank at Newport News so much of our money and pay it over to the collector of customs. That has worked out very well, so far as Newport News is concerned, but no such arrangement has been made in the other ports, and I do not know what difficulties there may be.

During the panic we had large shipments arriving. Our business is what is called holiday goods business. The goods arrive in the fall, and very often are late, and deliveries have to be made without delay so that there will be no cancellations. When currency became very scarce our banks said that they could not provide the large amounts, as they did not have them. So I called on the subtreasurer at the port this was on October 29-to see whether they would accept certified checks, and they said they would. Here are two checks [exhibiting checks] of the same date aggregating $21,000.

The CHAIRMAN. What date?

Mr. KAUFMANN.. October 29.

The CHAIRMAN. Last year?

Mr. KAUFMANN. Yes, sir. You will see the indorsement on the checks.

Mr. CLARK. They simply suspended the law for that time?

Mr. KAUFMANN. We thought we were getting along very smoothly. Mr. CLARK. That does not answer the question. They simply suspended the law for that time?

Mr. KAUFMANN. Of course.

The CHAIRMAN. I would like to ask whether this was a general custom or whether it was simply done during the panic?

Mr. KAUFMANN. This was the only exception. Three days later I presented three more certified checks, aggregating $15,000, and the subtreasurer refused to accept them. Then I went back to our banks to get the cash. They said that while they would give me the cash for that once, they would not pay me any more cash during the panic. When the next shipment arrived I was obliged to look around for cash, where I could buy money. The bankers and the dealers in exchange had in mind the previous panic of 1893, when they were severely censured by the Government for having charged a premium on cash, which tended to aggravate matters and make them worse. I had a great time to get the money, willing to pay almost anything in order to release the goods, because the Government allows the merchant forty-eight hours in which to pay the duties, and if he does not, the goods are then stored and charges are made for insurance and storage, which, in our case, would amount to a very large sum, there being thousands of cases on one ship. Finally I succeeded in getting money, for which I paid on that date 4 per cent premium. From that date up to December we had to pay a premium on currency with which to pay duties, which premiums amounted in all to over $4,000.

Mr. CLARK. That was the fault of the banks?

Mr. KAUFMANN. The banks had to buy money themselves.

Mr. CLARK. That was because they did not have the money where it ought to have been.