Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1900-01-10
Gage 70 CONGRESS
Replies to the Resolution Asking
Information About Deposit Of
Revenues in Banks.
Complete and Convincing Argument
In Favor of the Policy He
Has Pursued.
Explains in Detail All Recent Trans.
actions and Shows There Was
No Favoritism.

Washington, Jan. 10. Secretary Gage
today sent to congress reply to the
resolutions recently introduced in both
houses. The reply, which is exhaust
i've, is an exposition of the manage
ment Of that branch of treasury
finances relating to national bank de-
positories. supplemented by special re-
ports from department officials relative
Ito special inquiries in the resolutions,
including copies OF over 1000 letters.
Summing up his reply the secretary
says:
"First-A reason for utilizing ma
tional banks as repositories for public
monies. as authorized by law, when the
receipts OF the treasury are exceeding
its expenditure has been to avoid dis
tusbanoes to business which the with
drawal of large sums of money from
active circulation to the treasury
vaults must inevitably cause. The pol
icy thus pursued by me has been the
established policy Of the government
for many years. and a departure from
it under similar conditions would GER
tainly cause disastrous results.
,Second---A reason for directing the
internal revenue receipts into deposi-
l.tory banks at this time is that the rev.
enues are now largely exceeding the
| disbursements from month to month,
| and seem likely to do SO for an indefi-
! mite time. This condition would be
menace 10 the business world if an as
surance was not given that this surplus
would he diverted from the treasury
valuts TO the public Repositories where.
/ while secure TO the government, it
| would remain available to business use.
"Third-The reason for directing all
international revenue receipts to one de-
pository was that it is more convenient
TO first collect the receipts of numerous
offices into one place and make the de-
sired distribution from 1T, than to give
.lsnew instructions daily to il3 collectors.
4 The most convenient agency to effect
i such distribution is a bank which is
9 member of the New York clearing
q house.
.fTourtll-A reason for selecting the
i. National city Bank as such distributing
Z lagerlt vas that at the time the order
4 was issued it was one of but two banks
* lich had offered bonds sufficient 90
y cover the amount of daily deposit. Its
+ bond was for deposit of s4000,000, and
II that Of the Hanover National Bank ST.
$50 900; the National City Bank, there
& E.fpre was the one more naturally chosen.
lOf sixty-eight banks applying for a
4 share of the deposit, the National CITY
Eank. Hanover National Bank and
4 three others, applicants for over SSOO.ooo
leach We're the only ones of the sixty
j leight constituting group one which had
j not been supplied the fun amount for
which they offered security
..As to the sale of the New York GUS
tom house property to the National City
Bank he says it was because that insti-
Tuition was the highest bidder. The bank
paid ss.2l5.Geo of the purchase money.
leaving only $4,000 yet due The sum
Ipaii remained in the vaults Of the Ma
tional City Bank. as public depository'
but was placed TO the credit of the Unit
ed states treasury The government
did not want to withdraw this sum from
: luse and to have taken it from the Ma
: ,iopal city Bank and deposited 1T with
another would have been ungracious.
The secretary adds:
"Finally, under my administration OF
the treasury department., no dlscrimi-
I nation in favor of one bank against an
other has been made. All have been in
vited 10 qualify themselves for receiv-
e ing such money and have been equally
! and equitably considered in their re-
speetive relations TO the treasury
The secretary then gives out the line
4 of his policy in dealing with public de-
: positories. which he shows was IN line
: with that of former secretaries OF the
J; treasurv for twenty years. He points
out that the settlement of the Union
t Pacific railroad debt in 1897 would have
$ taken $4,000 from circulation in
! lunlp. causing great disturbance to
Q business, but for the utilization OF de-
c pository banks Again. at the out
. break of the war with Spain. the same
means vas used TO break the strain
: when the government was borrowing
o 5000. 600. 600 The secretary congratu-
: lated the country on the snoothness
Il With which the plan worked. The sec
$ irstary then takes up the late furry in
Il Wall street. owing to tight money.
a ana tells how the treasury intervened
d 10 avert it. first by anticipation of in
: terest and next by purchase of bonds,
: and finally, when the situation became
5 critical and threatened to spread, by
y increasing the amounts in the deposit
! tory banks by turning over TO them the
pasy