The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1900-01-11

I
senate by Mr.. Allen and in the house
by Mr.. Sulzer of New York. The text
/ Of his reply, which is an exhaustive
! exposition Of tine management OF that
/ branch of the treasury finances under
/ his administration relating to national
I bank depositOries. contains about 5000
words. which is supplemented by spec
I ial reports from department officials
/ relative to special inquiries in the res
olutions. including copies Of over 1000
1 letters on the subject uncer consadefa-
ton In summing up his reply te the
I inquiries, the secretary 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 o. large sums
/ Of money from active circulation to
the treasury vaults must inevitably
/ cause. The policy thus pursued by
me has been the established policy of
/ the government for many years, and
a departure from it under similar con-
1 ditiOns would certainly cause dfsas-
/ trOus results.
"Second-The reason for directing the
! internal revenue receipts into deposit
/ tory banks at this time is that the
/ revenues are now largely. exceeding dis
I burselnents from month 20 month, and
/ seem likely TO do so for an indefinite
/ time. This condition would be a men
ace to the business world if assurance
We're not given that this surplus would
/ be diverted from the treasury vaults to
( public repositories where, while secure
/ to the government, it would remain
available to the business world.
Why One Bank Was Chosen.
"Thrd-The reason for directing all
/ the internal revenue receipts to one de-
/ pOsitOTy was that it was more con-
/ venient to collect the receipts Of one
office in one place and the desired dis
/ tTibutiOn from it than to give instruc-
/ lions daily to 113 collectors. The most
/ convenient agency to effect such dis
tributiOn is a bank which is a member
/ of the New York clearing house.
/ ''FOurth-The reason for selecting the
I National City bank as such distribut-
/ ing agent was that at the time the
banks which had offered bonds suffi-
cient to cover the amount Of the daily
+ deposit. It's bond deposit was $4,000
/ 600 and that Of the Hanover National
/ bank. 81 $50 GEO. The National City
/ bank was therefore the one most ma
tUFallY chosen. Of the six weight
/ banks applying for a snare of the de-
I posts, the National City bank, tie
/ Hanover National bank and three
+ others. applicants for over SS00, 600 each,
are the only ones out Of the saxty-eight
I constituting group 1 which have not
! been supplied the full amount Tor
which they had offered security.
Custem House Property Sale.
"Fifth-The custom house property
I was sold to the National City bank as
the highest bidder on July 8, 1899. In
{ der the terms of the sale it had the
option of paying in cash all Of the pur-
chase money at any time. or any part
! it might elect above S750000, which
sum it was absolutely obliged to pay.
! tt exercised tbis option by choosing to
/ pay S3.215 GEO. leaving $4,000 yet due.
No deed viii be executed until fun pay
ment mas been made.
The payment received was turned
into the treasury by deposit in the Ma
tional City bank. it having been the
( established custom of treasury officials,
under the counsel of their legal ad-
visers supported by decisions of the
/ supreme court. to consider moneys on
deposit 10 the credit of the treasury of
the United States in designated de-
I pOsitOries, as moneys in the treasury.
This deposit was made II a depository
bank for the same reason that other
/ deposits have been made in them, viz,
because to withdraw the currency into
the vaults of the treasury where it was
not needed and could not be utilized
would have required a withdrawal Of
credit thar was being expended in
( commercial circles and to that end a
disturbance 10 the natural order Of
business would have followed.
Would Have Been Discrimination.
ITO have required it's payment by the
National City bank to another desig-
mated depository would have been an
ungraciOUs discTimina ton without sub
stantally changing the fact
Finally, under my administration of
the treasury department, no discrimi-
nation in favor of one bank against
another has . been made. Generally
speaking when an increase in deposit
tory banks was desired, ali have been
invited to qualify themselves for re-
{ ceiving such money and have been
equally and eqUitably considered in
their respective relations to the treas
ury."
Before proceeding to respond to the
/ resolution specifically Secretary Gage
gives a general review of his whole
course in the branch of public finances
rconcerned with national; bank deposi-
tories. as follows:
He notes the provisions of the
statutes which make "aH national
banking associations designated for
that purpose by the secretary Of the
treasury repositories Of public money
except receipts from customs under
such regulations as may be prescribed
by the secretary"
Secretary Shsrman's Actions.
That statute became a law, June 8,
1864, and its first marked recognition
was in the refunding operations of 1873,
when Secretary. Sherman thought it
necessary to place with national bank
/ repositories sums of money which
reached as high as $40 544, SIS. Secre-
tary Fairchiid, in 1SS7-SS, during a
period Of abnormal receipts Of revenue
/ increased the number, Of depository
banks and allowed such banks TO ac-
/ cumulate balances reaching SCI SAG 0o0
On March i, 1897 there were 159 ma
I tiOnal bank repositories holding a total
/ OF SIG, 1913. 40. With few exceptions
these institutions received deposits
/ from internal revenue collectors and
RENTED to the sub-treasuries any sur
/ plus over the amount Of the 8 per
] cent balance which they We're permitted
I TO hold The amount of public de-
posts remained about the same during
I the fifsT six months OF this admins
I tratiOn.
In November began those large pay
ments which resulted from the highly
successful settlement Of thu Union
/ Pacific railroad indebte6neSs payments.
( aggregating SIS, 448223. it was thought
eXpediens as q part Of this enormous