The Van Buren press., 1900-01-13
SEC'Y GAGE RESPONSES
The Secretary of the Treasury Re
spends to Congressional Reso-
lutions of Inquiry.
The REPLIES ARE VERY VOLUMIN0US
In Summing Up the Secretary De
Done Has Warrant of Law mud
Has Been Done to Conserve ths
COuntry's Best Interests.

has sent to congress his replies to
resolutions recently introduced in the
senate by Mr.. Allen, of Nebraska, anl
IN the house by Mr.. Sulzer, of New
York. The text of his reply, which is
an exhaustive exposition Of the man
ngement of that branch of the treas.
ury finances under his aJministra.
ton, relating to national bank depos'
itories, contains about 5000 words,
which is supplemented by special re-
ports from department officials rela.
tive to special inquiries in the resolu'
tions including copies of over 1000
letters on the subject under considera'
ton. In summing up his reply to the
inquiries the secretary says:
Secretary Cages summing Cp.
First-That the reason for utilizing ma
floral banks as deDOSitOrieS FOR pnbnc
moneys, as authorized by law, when the
receipts of the treasury were exceeding
its expenditures, has been to avoid the
disturbance to business which the WITH
drawal of 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
conditions would certainly cause disas-
trous results.
Second-The reason for directing the In
ternal revenue receipts into depository
banks at this time Is that the revenues
are now largely exceeding disbursements
from month to month, and seem likely
to do so for an indefinite time. This con-
dition would be a menace to the business
world IL assurance were not given that
this surplus would be diverted from tho
treasury vaults to public repositories
xuhn tor NnFhi In n hn
ment, 1t would be available for business
use.
ThIrd-The reason for directing all the
internal revenue receipts to one depos
itory was that It Is more convenient to
first collect the receipts OF numerous Of
fees into one place, and to make the de-
sired distribution from II, than TO give
The most convenient agency to AFFECT
such distribution Is bank which Is
member OF the New York clearinghouse
Fourth-The reason for selecting the
National City bank as such distributing
agent was that at the time the ordcr
was issued, 1t was one OF two banks which
had offered bonds sufficient to cover the
post was 100000, and that OF the Han
over national bank $l95O,5OO' The National
City bank was, therefore, the one most
naturally chosen. or the 6s banks ap-
plying for share of the deposits, the
National City bank the Hanover national
bank. and three others, applicants for
OF the IS constituting group one, which
have not been supplied the full amount
Tor which they had offered security.
!'ifth-The customhouse property was
sold to the highest bidder, on July :,
1899. Under the terms OF the sale 1t had
the option of paying In cash all OF the
purchase money at any time, or any part
il was absolutely obliged to pay. 1t ex-
ercised this option by choosing to pay
p,2l5,oOo, leaving $4,000 yet, due, No deed
will be executed until full payment has
been made.
The payment received was turned into
the treasury by deposit In the National
City bank 1t having been the estab-
iished custom of treasury officials under
the counsel OF their legal advisers sup
ported by decisions OF the supreme court,
to consider moneys ON deposit to the
credit Of the treasurer Of the United
States In designated repositories as
moneys In the treasury, THIS deposit was
made In a depository bank for the same
reason that other deposits have been
made In them, viz Because TO withdraw
lho currency into the vaults Of the treas
ury, where II was not needed and could
not be utilized, would have required
Withdrawal OF credit that was being ex.
tended In commercial circles, and to that
extent u disturbance Of the natural order
Of business would have followed, To have
required It's payment by the National ,Ity
bank to another designated depository,
would have been an ungraclous discrlm-
nation without substantially changing
The fact,
Finally, under my administration Of the
treasury, no discrimination In favor OF
bnc bank against another has been made.
Generally speaking when an Increase IN
depository banks was desired, all have
been invited to qualify themselves for re-
peiving such money and have been equal
ly aud equtably considered In their re-
bpective relations to the treasury
Before proceeding to respond to the
resolution specifically Secretary Gage
gives n general review Of his whole
course In the branch Of public finances
concerned with national bunk deposit
tories as follows
A General Review.
He notes the provisions OF the statutes
which mako all national banking agsocp-
tons dosignNted for that purpose by tho
secretary OF the treasury dopositorles OF
public money, except receipts from GUS
toms, under such regulations ns may be
prescribed by the secretary
That statute became law June g. 1854,
ana It's first marked recognition was In
the refunding operations OF 1879, when Sec
rotary sherman thought i necessary to
place with national bank repositories
tai9 CAS-, Secretary Fairohlld, In 1887.
S. during u period OF abnormal receipts
tf revenue, Increased the number Of de-
pository banks, and allowed such banks
on March I, 1897 thcrc were ibo ma.
lional & bank dspositorlos, holding total
Of tl0 lOS, ii0, with few exceptions, those
Institutions received deposits from inter-
nal revenue collectors, and rcmittcd to
tho subtreasuries any surplus over the
amount OF the nxed balance which they
were permitted to hold, The amount OF
public deposits remained about the same
during the nrst ak months OF this ad-
ministration In NoyombOr began those
large payments which resulted from tho
highly auoceHsful settlement OF the Union
e6cinc indebtedness payments, aggrcgat-
Ink Es 2ssS II was Thought cSpcdicnt,
as u part Of this enormous transaction, TO
utilize FOR a fow days the services OF de-
pository hanks, with the reeul! that at the
eAd OF Doosmher, 1891 such deposits had
Increased to $40 ls2 ~ The reason for
foct on trade Qnd industry OF too sud-
den withdrawal from public uses into the
vaults OF the treasury OF NO largo sum
M $4,000 900, ny the end OF May, lSDs,
snessS J,o g"ello eia deposits had been reduced
Soon after this, the government was
tonfronted with the necessity Of raising,
Immediately, large FUND for war purs
lire war reynue act, the people were called
upon to subscribe to AN Issue OF 900
pi bonds.
on the day tho books were opened the
a National city bank OF New York, and It's
accrued Interest, nny portion OF the bonds
that might not bc subscribed for by ino
public, and On the same day J, =, Morgan
Co., and their nss0ola!ey, numbering
S ,Ss ss.;.ss .Ss,s.S Hs.; ~ hoSsss ."s. Of me
s. IS :SssSSS:a r isr ~ t s.ss.i ~ sS SsuS' s''