Akron daily Democrat. [volume] (Akron, Ohio) 1892-1902, 1900-01-11
AN ANSWER BY GAGE. :


WASHINGTON, Jan. ll.--Secretary
Gage sent to congress his replies to res.
olutiops recently introduced in the sen.
ate by MIR. Allen and in tho house by
MIR. Sulser.
In the course Of his report he goes
over the period Of depression before the
Spanish war and describes the war rev.
enue act and its effect on our monetary
condition. Then the increasing pros.
perity following the war IS dwelt upon
and its resultant accumulation OF funds
In the treasury ig described.
THE absorption Of money from an
active use," he says, Unto the treasury,
where it could serve no useful purpose,
WI o source Of apprehension to the pub
lie and anxiety TO the department"
HIS action in offering to buy bonds to
get this money into circulation again Is
then detailed. Taking up the history
Of the government connection with
tho Hanover National and the National
City banks specifically inquired into by
the resolution, Secretary Gage min.
utely tells how they became govern
ment repositories under tho law. When
the $200, 100000 loan was made, ma
tional banks were invited to qualify as
repositories. The National City bank
deposited Sl4 100000 in bonds, and the
balance paid on this account never ex-
cecded sl4,000,O00; the Hanover Ma.
tional deposited $ll 10000 and its bal
ance never exceeded tnat sum. In con-
olusion Secretary Gage sums up his re-
ply to tho several inquiries of the reso.
lutions as follows:
First. the reason for utilizing national banks
as repositories for public moneys, ns author.
ized by law when the receipts Of the treasury
were exceeding Its expenditures, has been to
avoid the disturbance to business which the
withdrawal OF large sums Of money from act
i've circulation 10 the TREASURY vaults must in.
evitabiy cause. The policy thus pursued by
me has been the established policy Of the gov.
ernment for many years and u departure from
II under similar conditions would certainly
cause disastrous results.
Second, ths reason for directing the In
ternnl revenue receipt into depository banks
at this time is that the revenues are not
largely exceeding disbursements from month
to month and seem likely to do so for an In.
dehnite time. This condition would be d
menace to the business world N assurance
were not given that this surplus would ba di-
verted from the treasury vaults to public de
positories. where while secure to the govern.
rent II could remain available to business
use.
Third. the reason for directing all of the In.
ternal revenue receipts to one depository was
thnt II II " more convenient to first collect.thc
receipts OF numerous offices into one place,
and make tho desired distribution from 1t,
than to give new Instructions daily to llB col
lcctors, Tho most convenient agency to Of
feet such distribution Is n bank which In u
mombsr OF the New York clearing house.
bOurth, the reason for selecting the Ma.
tional City bank Us such distributing agent
was that at tho time the order was issued II
wns one OF but two banks which had offered
bonds sufficient to cover the amount of the
daily deposit. Its bond deposit wns 81 OO0, ,v0J
sna that OF tho Hanover National bank 81 ,plO,'
bvO The NationHi City bank was therefore
tho one most naturally chosen. Or tho W
banks applying for share OF the deposits the
National City bank, the Hanover National
bank aud three other applicants for over ssOO
20 each are tho only ones out VI the Bs consti'
tuting group one which have not been sup
piled thu full amount for which they had Of
fered security.
Fifth, the customhouse property was sold
to the NHtiOnal City bank Us the hihhost bid
der on July y, lsvD Under tho terms OF the
saio II had the option Of paying IN cash all OF
the purchase money ut any tms or any part
IL might elect above s75O,0JO. which sam II
was absolutely obliged 10 puy. II exercised
this option by choosing to pay S2l5OO, leav'
tng y6JJUU yut duo. No deed viii be executed
until full payment has been made.
The payment received was turned into the
trensury by deposit in the National City bank,
ID having besi. tho established custom OF the
treasury officials, under the counsel Of their
legal ADVISERS, supported by decisions OF the
supreme court. 10 con slider moneys OH do
posit to tho credit of this treasurer Of the
United states In designated dep ositorics nj
moneys IN tho treasury, This deposit was
made In u depository bnnk fm tho same reason
that other deposits have bcon made In them,
VIZ:
Becnuse. to withdraw the currency into the
vaults OF thu treasury. where IL WAS not
needed and could not be utilized, would have
required u Withdrawal Of crudis that was be-
ing extended in commercial c!rcios, and tc
that extent disturbance to tho natural order
OF businrsa would nave followed 10 havo ro'
quircdtts payment by the National C,ty hank
to anethsr designated depository would have
been m unsracious discrimination without
substantially changing the fact,