Freeland tribune. (Freeland, Pa.) 1888-1921, 1900-03-05
THE LAW VIOLATED.
SECRE TARY OF TREASURY'S
ASTOUNDING DEALINGS.
Secretary Gage and the Standard Oil
Bank-The Facts and the Law Re-
specting an Unprecedented Favor
from the Government

OH July last the government SOlu
to the Standard Oil National City bank
the old custom-house property at Wall
and William streets for SO ,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
$130,000 year. The day after the sale
James Stillman. president of the Ma
tional City bank, went to Washington,
taking with him certified check,
drawn on his own bank, for S3, 3,225 $50
all but $4,000 of the full price
agreed upon. This check Mr.. Still
man personally handed to Secretary
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 interest for
its own profit, but it has at the same
time been receiving rent from the gov
ernment for the custom-house. The
old proverb that one cannot eat cake
and keep it is thus set at defiance,
for the National City bank owns the
customhouse and yet retains the mon
ey it paid for the custom-ho
Secretary Gage has never turned the
proceeds into the treasury. as required
by section of chapter 337, 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 the treasury de-
partment at Washington. The title to
the property has not therefore passed
to the National City bank, and the
city of New York can collect no taxes
upon the land, as it is nominally gov
ernment property, although the Ma
tional City bank owns and receives
rent for it. The $4,000 held back was
therefore merely legal excuse for not
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 is
hereby authorized and directed to sell
at public or private sale. to the high
est bidder, after due advertisement,
but for not less than s3.000000, the
present customhouse property in the
city of I,ew York, bounded by Wall.
William and Hanover streets and Ex-
change place, and to deposit the pro-
ceeds of the sale, after the payment OF
the usual incidental expenses, in the
United States treasury az miscellane-
GUS receipts derived from the sale of
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 of
the United States, except as otherwise
provided for in the next section, shall
ing the same into the treasury at as
early date as possible"
3,61S, Revised Statutes: "All pro-
ceeds of sales of old material, con-
demned stores supplies or other prop
erty of any kind shall be deposited and
covered into the treasury as mscel-
laneous receipts on account of pro-
ceeds of government property and
shall not be withdrawn or applied ex-
cept in consequence of a subsequent
appropriation made by law"
These facts are admitted by Secre
tary Cages subordinates as to the de-
posit of the check in the National
City bank. The only defense is (first
by Supervising Architect Taylor of the
treasury that the money was Gov
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
ernment depository banks"
He did not know why the property
was still being recorded as in the gov
ernment's possession and thus kept of
the city tax books. That" he said,
"was not the governments business.
1t was for the New York tax depart
mcnt."
Favors to One Bank.
Four transactions of the government
with the National City bank, as the
World has shown, have netted the ia
vored institution these
PROFITS:
Profit on Union Paciic-Pay-
ments of s33,0O0,000 In part dis
tributed among the United
States repositories by National
City bank, but the greater part
retained by the National City
bank on deposit. -; ,;.:;..........s S5o.OOO
Profit on financing the pay
ment of the 5000 900 indemnity