Evening star. [volume] (Washington, D.C.) 1854-1972, 1899-02-24
NO BOND ISSUE
A Talk With the Secretary Of the
Treasury.
GOVERNMENTS FINANCIAL CONDITION
In Case of a Deficit Certificates
Will Be Issued.
THE CASH B ALAN E

Secretary Gage today said that there is
absolutely no truth in the published state
ment that the administration has under
consideration another bond issue such
was subscribed foc by the public during the
war with Spain. The Secretary also said
that 1t could not yet be determined whether
the treasury would need more money than
now comes in under the regular laws and
the war revenue act, which continues in
existence. The fact was he said that the
situation would not be known accurately
until Congress had adjourned and the treas
Try statisticians have figured the appro-
priations made by Congress, together with
estimates of he receipts. Even if 1t was
decided then that the government would
need more money than it will have On hand
a bond issue will not be resorted to, and
certificates will be issued instead. There
is nothing in the situation now, however,
to indicate an issue of either bonds or GER
tiflcates.
Secretary Gage has fully explained the
situation to the President and the con-
clusion is positive that no more bonds will
be issued under the war-loan act authoriz-
ing the Secretary Of the Treasury to sell
$500 100000 of per cent bonds. That act
provided for the issue of bonds to meet
the expenses growing out of the existing
war with Spain" 1t is believed that the
act confers abundant authority, if neces
sary, to issue enough of these bonds to
defray the actual expenses of the with
Spain. The fact is that the war has al
bonds issued by the treasury. The pay
ments on account of the war to this time
have been about $21O, 100000, with obliga-
lions the amount of which Is not known
at the treasury, but which will aggregate
many millions more. These obligations do
not include the s20,0O0,0O0 to be paid to
Spain. The difference between the amount
received from the sale of the bonds and
the amount paid out has been met out Of
the increased proceeds of the revenue act
passed by Congress.
Condition of the Treasury.
The available cash balance in the treas
ury is now s271 100000. The payment of
S20, 100000 of this TO Spain would leave
$3.50, 100000 to work upon. The Secretary
of the Treasury would not reduce this to
less than $200,0OO,0O0 and when the cash
balance reaches that amount something
will have to be done to supply the neces-
sary money. The expenses of the army in
Cuba, Porto Rico and the Philippines con-
tinue to be heavy, and nobody can now
estimate when the cash balance may go
down to the point which the Secretary con-
siders safe to stop before providing means
for increasing the cash. AS stated, moth
ing official may be known for some time
until all the appropriations have been
Jumped and compared with the expendi-
lures
The probability now is that If the ex-
penses are found to be too heavy for the
receipts, thereby creating a heavy deficit,
Secretary Gage will issue S100,OO0,O 600 or
lesser amount, of certificates which run
for year and bear per cent interest.
There is sufficient law for this loan, and 1t
will probably save the treasury much
trouble in a close place. The authority for
the certificates was conferred by Congress
laws and the law
nowhere states that the expenditures must
be on account of the war with Spain.
Authority for Certificates.
The law, which is Of Importance in view
of the prospect that money may have to be
raised Is as follows:
Sec 81 That the Secretary of the Treas
ury is authorized to borrow from time to
time, at a rate of interest not exceeding
per cent per annum. such sum or sums as,
10 his judgment, may be necessary to meet
public expenditures, and to issue therefor
certificates of Indebtedness in such form as
he may prescribe. and in denominations of
$50 some multiple of that sum; and each
certificate go issued shall be payable, with
the interest accrued thereon, at such time,
not exceeding one year from the date of
its issue as the Secretary of the Treasury
may prescribe: Provided, That the amount
of such certificates outstanding shall at no
time exceed s1C0,0Oo.0 900; and the provisions
ard other fraudulent practices are hereby
extended to the bonds and certificates of
Indebtedness authorized by this act"
More Advantageous Than Bonds.
Secretary Gage considers that the issue
of certificates will be much more advan-
tageous to the government than bonds.
These certificates would be redeemed with
in the year, and If there was not cash in
the treasury to pay them another issue
could be made under the same section to
furnish the money to take up the issue Of
the year before.
Secretary Cages view that the cash bal
ance of the treasury ought not to be re-
duced below $500, 100000 is of interest COM
pared to the condition of the cash balance
in former years. Beginning in 1890 the
cash balance of the treasury was found to
be below $500 ,000. go. 1t was gradually re-
duced year by year until the precarious
total of $S4 900 900 was reached in January
1894. the bond issue soon raised the cash
balance and restored it to point of safety
OF the small amount then In the treasury
$50 ,oo0 600 was in gold. OF the cash bal
ance now in the treasury 1927 1887 900 Is in
gold, showing the great difference between
present and past conditions.