The Portland daily press., 1900-01-11
sEC'Y CAGES REPLY.
pspo.itlng Money with Banks a Com
mon Practice.


Washington. January 10 Secretary
Gage today sent TO Congress bis replies 70
the resolutions introduced In the Senate
by Mr.. Allen Of Nebraska, end In the
House by Mr.. Sulzsr Of New York.
The text of his reply which 10 an ex-
haustive exposition Of the management
Of that branch of The treasury finances
under his administration relating to Ma
tionsl bank repositories contains about
nine thousand words, which 10 supple
mented by special reports from DEPART
ment officials relative to special Inquiries
In the resolutions, including copies OF
over one thousand letters on the subject
under consideration.
In summing up his reply to the In
quiries the Secretary says:
Birst-1hst the reason for utilizing ma
tIonal banks as depositories for public
moneys as authorized by law, when the
receipts Of the treasury were exceeding
It's expenditures, has been to avoid the
disturbance which the withdrawal oil
large sums Of MONEY from active circula-
tlon to the treasury vaults must insvita :
bly, cause. The policy thus pursued BY
mo has been the established policy Of the
govern ment for many years and depart
ure from IL under similar oon ditions
would certainly cause disasto GUS results
Seoond-The reason for directing the
internal revenue receipts into depository
bank at this tins is that the revenues are
now largely exceeding disbursements
from month 10 month and seem likely to
do SO for an Indefinite time. This con-
dition would be o menace to the busi-
ness world Il assurance vera not given
that this surplus would be diverted from
the treasury vaults to public depositories,
wh,rs, Wills SCORE 10 the government,
it would remain available to busiuets.
Third-Ihe reason for directing all OF
the internal revenue receipts to one de-
positcry was that 1t was more convenient
to frat collect the receipts OF numerous
offices into one place and make the de-
sired distribution from 1t, than to give
Instructions daily to 1i3 collectors. The
most convenient agency TO Affect such
disriS Ltions is tank which Is mem-
be- Of the New York Clearing House.
Fourth-The reason for selecting the
National City bank as such distributing
agent was that q. the same time the
orier Was Issued, it Was one VI but Two
banks which had offered bonds SUFFICIENT
to cover the amount of the daily deposit.
Its Lond deposit was $1,000. 900 and that
of the Hanover National bank 81 800
The National City pank was therefore
the one NEST naturally chosen. Of the
sixty eight banks applying for share Of
tie deposits the National City bank, the
Hanover National bank and three other
applications for 1900. COO each ars the only
ones out Of the group which have not
been supplied the full amount for which
they had offered security.
Fith-The custom house property was
seli to the National City bank as the
highest bidder on July 8, 1902. Under
tte terms OF the sale IL had the option
of raging In cash all Of the purchase
money at any time or any part 1t might
elect above $3.50 coo which sum 1t was
absolutely obliged to pay. 1t exercised
this option by choosing to pay ~, 2l5,ooO,
leaving $4,000 yet due. No deed will ne
executed until full payment has been
n ale.
The payment received was turned Into
the treasury by deposit, In the National
City bank, 1t having been the established
custom of treasury officials. under the
counsel of their legal advisors, supported
BY decision OF the supreme court to con-
slider moneys on deposit to the credit OF
the treasurer of the United States In
designated dspositories as moneys In the
treasury.
This deposit was made In depository
hank for the same reason that other de-
posita have been made in them, because
to withdraw the currency into the vaults
II the treasury where 1t was not needed
and could not be utilized would have
required withdrawal Of credit that was
being extended in commercial circles and
to that extsnt disturbance to the natur-
al order Of business would have followed,
To have required its payment by the
National City bank to another designated
depository, would have been an ungrao-
ious Discrimination without Substantially
changing the fact.
Finally, under my administration OF
the treasury depai tment, no dis,rimina-
ton In favor OF one bank against another
has been made, Generally speaking when
an increase In depository banks was
desired all have been invited to qualify
themselves for receiving such money and
have been equally and equitably consid-
cred In their respective relations TO the
treasury.