MISMANAGEMENT AND OTHER TROUBLES 71 
a headquarters building and $170,000 paid for 
property at branches was illegally taken from 
the principal of the deposits, for only in 1872 
was the annual income really sufficient to pay 
running expenses and interest on deposits. 
The amendment was secured principally 
through the efforts of one of the finance com- 
mittee, W. S. Huntington, who was cashier of 
the First National Bank? and who belonged to the 
District of Columbia ring. The reasons for the 
changes, as given before a committee of Con- 
gress, were: (1) That the United States debt 
would probably soon be refunded at a lower rate 
of interest and that the bank could not then get 
a sufficient income from its investments in 
bonds; (2) that money was worth more than 5 
per cent, and that unless the bank paid at least 
6 per cent interest on deposits the freedmen 
would place their funds elsewhere. Consequently 
the bank must make more money. It was 
claimed, particularly in the South whence came 
most of the deposits, that there was a general 
demand for loans and that a high rate of interest 
could be secured. It was also asserted that the 
new arrangement would enable the bank to con- 
tinue the 6 per cent rate of interest on deposits 
and would satisfy those depositors who thought 
that “the money ought to stay at home,” while 
under present conditions the Negroes regarded 
the branch banks as a “drag net” to bring the 
money into Washington.* 
Representative Cook, of Ohio, introduced the 
2 See Oberholtzer, Jay Cooke, passim. 
2 fo. Misc. Doc. No. 16, 43 Cong., 2 Sess., p. 66.