Evening bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1895-1912, 1900-01-22
Gage Gives Points
On National Banking

washington, Jan. ~. - secretary
Gage today sent to Congress his re-
plies to resolutions recently introduced
in the Senate by Mr.. Allen, and in the
House by Mr.. Sulzer, of New York
The text of his reply, which is an ex.
haustive exposition of the management
of that branch of the Treasury finances
under his administration relating 10
national bank repositories, contains
about 5000 words, which is supple
mented by special reports from de-
partment officials relative to special
inquiries N the resolutions, including
copies of over 1000 letters on the sub
ject under consideration. In summing
up his reply to the inquiries, the Sec
rotary says:
First-That the reason for utilizing
national banks as repositories for pub
lie moneys as authorized by law, when
the receipts of the Treasury were ex-
ceeding its expenditures, has been to
avoid the disturbance to business
which the withdrawal of large sums of
money gave active circulation to the
Treasury vaults must inevitably cause.
The policy thus pursued by me has
been the established policy of the Gov
eminent for many years, and depar-
ture from IL under similar conditions
would certainly cause disastrous re-
suits.
"Second-The reason for directing
the internal revenue receipts into de-
pository banks at this time Is that the
revenues are now largely exceeding
1 q hii 70 60
and seem likely to 40 so for an indef-
mite time. This condition would be a
menace to the business world IL assur-
ance were not given that this surplus
would be diverted from the Treasury
vaults to public repositories where,
whilc secure to the Government. IL
would remain available to the business
world.
hird-Tho reason for directing all
the internal revenue receipts to one
depository was that IL was more con-
venient to collect the receipts of one
Office in one place and the desired dis
tribution from it than to give instruc-
lions daily to 113 collectors. The most
convenient agency to effect such dis
tribution is bank which is a member
of the New York Clearing House.
"Fourth-The reason for selecting
the National City bank as such dis
tributing agent was that at the time
the order was issued IL was one of the
two banks which had offered bonds
sufficient to cover the amount of the
daily deposit. Its bond deposit was
Si,OOO,OO0 and that of the Hanover Ma
tional bank, $l,9i0,000 The National
City bank was therefore the one most
naturally chosen. OF the sixty-eight
banks applying for a share of the de-
posts, the National City bank, the
Hanover National bank and three
applicants for over $780, 900
each, are the only ones out of the sixty
eight constituting group one, which
nave not been supplied the full amount
for which ,hey offered security.
"tifth-The custom house property
was sold to the National City bank as
the highest bidder on July 3, 1899.
Under the terms of the sale, Il had the
option of paying in cash all of the pur-
'hase money at any time, or any part II
might elect above $4,000, which sum
t was absolutely obliged to pay. 1t
exercised this option by choosing TO
pay $3,2l5,OOO, leaving $4,000 yet due.
NO deed will be executed until full pay
ment has been made.
The payment received was turned
INTO the Treasury by deposit in the
National City bank, it having been
he established custom of Treasury
under the counsel of legal adj
visers, supported by decisions of the
supreme Court to consider moneys on
leposit to the credit of the Treasurer
)f the United States in designated de-
Dosirories as moneys in the Treasury.
This deposit was made in a depository
bank for the same reason that other
deposits have been made in them, viz:
because to withdraw the currency into |
he vaults of the Treasury, where ..
vas not needed and could not be utiliz- |
"a would have required a withdrawal |
II credit that was being expended in |
commercial circles and to that end q |
disturbance TO the natural order of |
usiness would have followed. To have |
equired It's payment by the National |
'ity bank to another designated de- |
ository, would have been an ungra-
lous discrimination without substan-
ally changing the fact.
"Finaly-Under my administration
the Treasury Department, no dis
in favor of one bank
sainst another has been made. Cen
ally speaking, when an increase in
'pository banks was desired, all have
'oh invited to qualify themselves for
'oeinihs such money, and have been
lualy ana equitably considered I'm
~" '''eS-