Santa Fe new Mexican. [volume] (Santa Fe, N.M.) 1898-1951, 1900-01-10
GAGE MAKES REPLY
Followed Custom in Preventing An
Accumulation Of Money In
the Treasury.
SELECTED STRONGEST BANK
Sent Revenue Collections to the Bank That
Had the Most Security Up and Dis
tributed From It to Various
Depositories.

Washington, January 10.-Secretary
Gage to-day sent to congress his replies
to the resolutions recently introduced in
the senate by Senator Allen and in the
house by Mr.. Sulzer of New York, The
te,a of his reply, which is sxtla AZ tive,
il, an exposition Of the management Of
that branch Of the treasury finances un-
national bank repositories, and con-
tains about 5000 words, which is supple
mented by special reports from depart
ment officials relative to the special in
quiries in the resolutions, including
copies Of over 1000 letters ON the sub
ject under consideration.
In summing up his reply to the in
quiries the secretary says:
THE reason for utilizing the national
banks as repositories for public mon
eys, as authorized by law, when the re-
ceipts of the treasury were exceeding
its expenditures, has been to avoid a
disturbance to business which the with
drawal of large sums of money from
must inevitably cause. The policy thus
pursued by me has been the established
policy of the government for many
years, and a departure from it under
similar conditions would certainly cause
disastrous results.
'The reason for directing the internal
revenue receipts into the depository
banks at this time is the revenues are
now largely exceeding the disburse-
ments from month to month, and seem
likely to do so for an indefinite time.
This condition would be a menace to
the business world if assurances were
not given that this surplus be diverted
from the treasury vaults to public de-
government, would remain available to
the business world. The reason for di-
recting all the internal revenue receipts
to one depository was that it was more
convenient to collect receipts from one
office in one place, and make the de-
sired distribution from it than to give
instructions daily to 113 collectors.
THE reason for selecting the Ma
tional City Bank as such distributing
agent was that at the time the order
was issued 1t was one of but two banks
which had offered bonds sufficient to
cover the amount Of the dagl SITS.
Its bond deposit was $4 ,0OO, 900, and that
Of the Hanover National Bank $780,
500. The National City Bank was there
fore the one most naturally chosen.
Under my administration of the
treasury department no discrimination
In favor Of one bank against another
has been made"
With regard to recent deposits of in
ternal revenue collections with the Ma
tional City Bank, the secretary said:
December 18 a financial panic occur
red. The prices of investment securities
fell ruinously, interest rates rose to fab
ulOus rates, and a general construction
OF the money market was apparent.
The situation was believed to be so
grave as to justify the utmost inter-
ference. The receipts of the treasury
for December, 1t was perceived, would
exceed the expenditures by 100000 or
lS,000,000. Under these conditions Pc
culiar responsibility was thrown upon
the treasury. The statutes conferred
authority to place public money, except
customs, In designated repositories, and
gave power to relieve the situation
without possible prejudice to the treas
ury's needs. 1t was, therefore, an
nounced December 18 that the secretary
would deposit internal revenue collec-
tions with depository banks to the
amount OF $SO,000,000 or $4O,0O0,00o,
should 80 much be applied for"
From this point on the secretary
makes direct answer to the congress
sional inquiry. His principle of action
has been to 80 manage. the receipts and
expenditures as to produce the least
disturbance in that part of the money
supply which must be at the service Of
commercial and Industrial uses. Since
Juna l, 1898. the receipts Of the treas
ury have amounted to $1,10o.oo0000. BY
the aid of repositories the amount in
the treasury at the close Of any quarter
" period during the time never rose
more than $2s, 500. 900 above the average
for the whole period. During the his