The Caucasian. (Clinton, N.C.) 188?-1913, 1900-01-18
SECRETARY REPLIES.
Says the Treasury is S2I,026,OOO
Ahead.
PRECEDENT AN ESTABLISHED ONE.
Mr.. Gag. Shows That The Govern.
m.nt Does Not Suffer Loss By HIS
Deposits in National City Bank.

Washington, D. c., Special.-Secre-
tary Gage has sent to Congress his
replies to the resolutions recently in
troduced in the Senate by Mr.. Allen,
OF Nebraska, and in the House by
Mr.. SulZer, Of New York. The text of
his reply, which is an exhaustive ex-
position Of the management OF that
branch OF the Treasury finances under
his administration relating to national
depositaries, contains about 5000
words, which is supplemented by spe-
cial reports from Department officials
relative to special Inquiries in the
resolutions, including copies OF over
1000 letters on the subject under ccn-
sideration. In summing up his reply
to the inquiries the Secretary says:
First, That the reason for utilizing
national banks as depositaries for pub
lie moneys, as authorized by laws
when the receipts OF the Treasury were
exceeding in expenditures, has been
to avoid the disturbance to business,
money from active circulation to the
Treasury vaults must inevitably cause
The policy thus pursued by me mas
been the established policy OF the gov
ernment for many years, and a de-
parture from it under similar condi-
tions would certainly cause disas-
| trous results.
Second, The reason for directing
the internal revenue receipts into de-
positary banks at this time is that the
! revenues are now largely exceeding
disbursements from month to month,
and seem likely to do so for an in
definite time. This condition would be
a menace to tie business world if as
surance were not given that this sur
/ plus would be diverted from the
| Treasury vaults to public deposi-
! taries, where, while secure to the gov
| ernment, it would remain available to
| business use.
Third, The reason for directing all
| of the internal revenue receipts to one
depository was that it is more conven-
lent to first collect the receipts at nu-
merous Offices into one place, and
make the desired distribution from it.
than to give new institutions daily 80
l. 113 collectors. The most convenient
agency to effect such distribution is q
bayk which is a member of the New
York clearing house.
Fourth The reason for selecting
the National City Bank as such distri-
buting agent was that at the time the
| order was issued it was one of but two
banks which had offered bonds suffic-
lent to cover the amount Of the daily
deposit It's bond deposit was $4,000
COO, and that of the Hanover National
Bank S1,910,50 The National City
Bank was, therefore, the one most nat.
urally chosen. OF the sixty-eight
banks applying for a share of the de-
posits, the National City Bank, the
Hanover National Bank and thre,
other applicants for over $S00C00 each
are the only ones out OF the 6S consti
tuting group one, which have not beer
supplied the full amount for whici
they had offered security.
Fifth, The custom house property
was sold to the National City Bank a!
the highest bidder On July 8, 1899. Tn
Ger the terms of the sale it had thi
option Of paying in cash all of the pur
chase money at any time or any par
OF it might elect above s759.000, wh,cl
sum it was absolutely obliged to pay
1t exercised this option by choosing t;
to pay s3,215,000, leaving $4,000 ye
due No deed will be executed unit
full payment has been made. The pay
ment received was turned into tn
Treasury by deposit into the Nationa
City Bank, it having been the estab
lished custom OF Treasury officials. un
der the counsel of their legal advisers
supported by decisions of the suprem
court, to consider moneys on deposi
to the credit of the Treasurer of tn
United States in DESIGNATED depositar
les as moneys in the Treasury.
"Finally, under my administrator
Of the Treasury department, no dis
elimination in favor CT one ban
against another has been made, gencr
ally speaking. When an increase i
depositary banks was desired, all hav
been invited to qualify themselves fo
receiving such money and have bee
equally and equitabIy considered i
the irrespective relations tc the Treas
ury.