The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1900-01-14
THE GAGE BANK SCANDAL

with his dealing with the National City
Bank of New York, the Standard Old
Bank, government depository, reveals Il
scandal worse in its contempt of public
decency and public opinion than Ayers
malodorous beef dealings.
In his reply Mr.. Gage denies that he
has shown any favoritism to the National
| City Bank. What are the facts in the
case? On May II, 1897, this bank lad
in government deposits 100000 On
June ), 1897, A. B. Hepburn, vice-presi-
dent of the bank, wrote the following re
markable letter to Secretary Gage:
Mr. Dear Mr. Gage: The National
City Bank, of this city, of which l recent
ly became the yice-president through the
consolidation of the business of the Third
National Bank with it, is enc of the
banks designated as a United States de-
poSitOry, and | write to request that in
any changes which may be made under
the Administration we may not be dis
| turbed in this respect.
we should like to remain a United
States depository, as at present.
"Of course the bank is very strong, and
if you will take the pains to look at our
list of directors you will see that we also
have very great political claims, in view
of what was done during the canvass last
year. Very truly yours.
a. Il. HEPBURN.
Vice-PreSident -
Some of the directors referred to are
II. o. Mavemeyer of the Sugar Trust;
William Rockefeller of the Standard Oil
Trust; Stephen S. Palmer, of the Zinc
Trust: Robert Bacon partner of J. Pier
pcnt Morgan; w. ID. Sloane, Vanderbilt
representative: Cleveland II. Dodge, of
the Copper Trust: II. Walter Webb,
yice-president of the New York Central,
and others of the same ilk.
As n result of this letter of Mr.. Hep
burns there has been deposited in the
National City bank since June ;, 1897,
over $101 100000, the bank having for
six months at time the free use of So
0O0,G0O which it put out in Wall street
in the form of call loans. 1T is estimated
that the profits to the Standard Oil bank
ON these government moneys 50 loaned
out amount to $2.400000. This Mr..
Gage says is not favoritism and declares
to BE backed by precedent-but his re-
port to Congress does not cite the prece-
dent. Non was this all. The property ON
which the Standard Oil bank carries on
its business was bought from the gov
eminent for $3,215,00O, not a cent of
which was turned into the public treas
ury but was left ON deposit with the bank,
to be loaned out TO the banks use and
profit. At.thc same time Secretary Gage
agreed to hold the title of the property
in the government in order that the bank
might escape the payment of city taxes
ON it.
AS showing i'll part how these little
matters were arranged between Gage
and the Standard Oil bank officials the
following letter written by Gage to James
Stillman, president of the bank. will be
OF use:
Il have yours Of the Goth instant. and
note your suggestion as to n conference
with Mr. Hepburn, in relation to Treas
ury deposits i'm the National bank deposi-
tories of New York. You are advised to-
day officially that if you make the neces-
SaTy deposit of bonds. one-half Of the
next payment of the Union Pacific road
will Ire deposited with Slrb-Treasury, will
be got back into the street again as quick
ly as possible.
However. / would like to confer with
you and with Mr.. Morgan and on the
general subject. though | think the pres
euce of the latter gentleman here would
perhaps be more disturbing than an order
ON the banks to transfer all of their mon
ely to the Sub-TreaSury. | now advise
that | shall go to Philadelphia ON Thurs
day morning. arriving there at 1874.
90 as the guest Of the Bank Of North
America, the directors Of which are Civ
ing small dinner at , o'clock on the af
ternc0n of that day
lon an intimation from YOU that YOU
or Mr.. Morgan or amy other gentleman
whom You may name would like to con-
fer with me there. will go to the Walton
and meet him at l rs. Please let me know
by wire aftir1natively on negatively as
to this, as it may otherwise interfere with
the liberty | would enjoy in philadel-
phia.'
1t may well be doubted if ever, in this
or any other country, there has been a
more shameless bending of the ''preg-
nant hinges of the knee" I'VE also have
very great political claims says Mr.. |
Hepburn lin view of what was done dur
ing the canvass last year" How does Mr.. /
Gage quit the trust-elected admmistra-
tion of those claims! BY depositing in the
bank of which trust magnates are dil'ec |
tors over $107000,000 of government
funds, bringing to the bank a revenue of
81, 400,00
Is government money to be drawn from !
the trust bank? Mr. Gage does it with |
many suave apologies and promises of
speedy return, to use Mr.. Cages exact !
and picturesque language it will be got
back into the street as quickly as posi- !
BILE" Mr.. Gage does not dare do public !
business without first consulting with |
''orll list of directors" This could not