The Leon reporter. (Leon, Iowa) 1887-1930, 1900-01-18
THE LAW VIOLATED.
SEcRETARY OF TREAsURY's
ASTOUNDING DEALINGS.
Secretary Gage and the Standard OIL
Bank-The Facts and the Law Re-
speeding an Unprecedented Favor
from the Government.

On July 2 last the government sold
to the Standard Oil National City bank
the old custom-house property at Wall
and William streets for $3,265 900. The
sale was made under provisions of
special act of congress providing that
the purchaser of the old custom
house should permit the government
to continue to occupy it until the new
custom-house was ready for occu-
pancy, the government to pay as
tenant of the old building per cent
upon the purchase price. or about
$4,000 year. The day after the sale
James Stillman, president eff the Ma
tional City bank, went to Washington.
taking with him a certified check,
drawn on his own bank, for 1925, $50
all but $4,000 of the full price
agreed upon. This check Mr.. Still
Gage, who Immediately handed it back
to President Stillman to be deposited
without interest in the National City
bank, says the New York World.
In other words, none of the three
and quarter millions of dollars which
the National City Standard Oil bank
paid the government for the United
States custom-house six months ago,
has ever for one hour passed out of
the banks control. The bank has had
not only the use of the money every
day since to loan out at intere"t for
Its own profit, but it has at the same
time been receiving rent from tn. gov
eminent for the custom-house. The
old rroverb that one cannot eat a cake
and keep it is thus set at defiance,
for the National City bank owns the
custom-house and yet retains the raon-
ey it paid for the custom-house.
Secretary Gage has never turned the
by section of chapter 1871, under the
terms of which the sale was made.
The $4,000 held back" was for an
other purpose. The deeds OF the GUS
tom-house are still in tka treasury de-
partment at Washington. The titl3 to
the property has not therefore pas I'd
to the National City bank. anr che
city of New York can collect no tcxes
upon the land. as it is nominalI5 rcv-
eminent property. although the Ma
tional City bank owns and receives
rent for it. The $4,000 held back was
therefore merely legal excuse for rot
proving the title and for evading tau
alton.
The Law Which Was Violated.
The law authorizing the sale of this
property was as follows:
Chapter No. 337, section No. 4.
That the secretary of the treasury ii
hereby authorized and directed to sell
at public or private sale, to the high
est bidder, after due advertisement,
but for not less than S3,O0O,00G. the
present custom-house property in The
city of lew York. bounded by Wall,
William and Hanover streets and Ex-,
change place, and to deposit the s-o
ceeds of the sale, after the payment Of
the usual incidental expenses. in the
United States treasury as miscellane-
Gus receipts derived from the sale \
government property
Two General Laws Which Apply.
Section 3,617, Revised Statutes: The
gross amount of all moneys received
from whatever source for the use CT
the United States, except as otnerw.
be paid by the officer or agent receiv-
ing the same into the treasury at as
early a date as possible"
3,61S, Revised Statues: "All pro-
ceeds Of sales of old material. con
demned stores, supplies or other prop
erty of any kind shall be deposited an :
covered into the treasury as misces-
laneous receipts on account of pro-
ceeds of government property AID
shall not be withdrawn or applied ea-
cept In consequence of subsequent
appropriation made by law
These facts are admitted ny Sec7e-
tary Cages subordinates as t, the de-
post of the check in the National
City bank. The only defense is (first
by Supervising Architect Taylor of the
treasury that the money was Cow
cred into the treasury" in the Ian
guage of the law when it was placed
In the government depository, the
Standard Oil bank.
The money" said he, very likely
was never covered into the treasury,
but deposited in some one Of the gov
eminent depository banks"
He did not know why the property
was still being recorded as in the gov
ernment's possession and thus kept off
the city tax books That" he said,
was not the governments business.
1t was for the New York tax depart
ment."
Favors to One Bank.
-Four transactions OF the government
with the National City bark, as the
World has shown, have netted the ia
vored institution these
PROFITS:
Profit on \. wn nGo aoo Pacifc--Pay-
States repositories by National
City bank, but the greater part
h he,ain 90 by the National City.
Profit on Financing; the pay. ''0'o'
ment Of the $4,000 900 indemnity
pt to spainmestimated soo.oos
terest on $3.265. 900 for $50 days,
at per cent. $96337: rent from
United States treasury depart
days, $4,000 ............. 1ss5s1
Annual interest on internal rev.
enue receipts and other govern
ment deposits in the City bank,
now $l7,00000O, an increase Of
$4.00o0o0 since Dec 2, when the