Las Vegas daily optic. [volume] (Las Vegas, N.M.) 1880-1908, 1900-01-10
He Gives the Reasons for His
Fayors to the National
City Bank.
HOW He STOPPED THE PANIC
Congressional Dolnes = Black
burn EIected-Amerlcan
Flour is Released.

Gage today sent to congress his re-
plies to resolutions recently intro
duced in the senate by Allen, and
in the house by Sulzer, of New York.
The text of his reply, which is an ex--
haustive exposition of the manage
ment of that branch of the treasury
finances under his administration re
lating to National bank depositortes
and contains about 5000 words, which
supplemented by special reports from
department officials relative to spe-
cial inquiries in the resolutions, in
cluding copies of over 1000 letters on
the subject under consideration. In
summing up his reply to inquiries the
secretary says:
"The reason for utilizing national
banks as repositories for public mon
les, and authorized by law when the
receipts of the treasury were exceed
ing it's expenditures, has been to
avoid disturbance to business which
the withdrawal of large sums of
money from active circulation, to the
treasury vaults of the government for
many years, and a departure from it,
and the departure from it under
similar conditions, would certainly
cause disastrous results.
1.-THE reason for directing the inter
nal revenue receipts into depository
banks at this time is THAT the reve-
nues are now largely exceeding the
disbursements from month to month
and seem likely to do so for an indef
mite time. This condition would be q
menace to the business world if as
surance is not given that this surplus
will be diverted from the treasury
vaults to public repositories where
while secure to the government, il
would remain available to the busi-
ness world
"The reason for directing all inter
nal revenue receipts to one depository
was that it was more convenient to
collect receipts from one Office, in one
place, and the desired distribution
from it, than to give instructions daily
to 113 collectors.
"The reason for selecting the Ma
tional City bank as such distributing
agent, was at the time the order wa
issued it was one of but two bank!
which had offered bonds sufficient II
cover the amount of the daily de.
posit. It's bond deposit was $4,000
600 and that of the Hanover Nationa
bank $1.95O,500. The National Cit
bank therefore, was the one most mai
urally chosen.
Under my administration of tn
treasury department, no discrimins
tion in favor of one bank against an
other has been made
With regard to the recent deposi
of the internal revenue collection.
with the National City bank. the SEE
retary says:
"On December 18th, financia
panic occurred. Prices of investmen
securities fell ruinously Interes
rates rose to fabulous rates, and
general construction of the none
market was apparent. The situatio
was believed to be so grave as to ju.
tify the utmost interference. TIL
receipts of the treasury for Deccmbe
it was perceived, would exceel tn
expenditure by seven or eight mi
lions Under these conditions.
peculiar responsibility was throw
upon the treasury. The statute
conferred the authority to place pul
lie money, except customs, in desil
mated repositories, and gave powe
to relieve the situation without DO
sible prejudice to the treasury's need
1t was therefore announced, Decen
Der 18th, that the secretary woul
deposit internal revenue collection
with the depository banks to Ii
amount of thirty or forty million
should so much be applied for"
From this point on the secrctar
makes direct answer to the congre
sional inquiry. His principal actic
has been to so manage the receip
and expenditures as to produce IL
least disturbance TO that part of IL
money supply which must be at IL
service of commercial and industri
use. Since June 1st, 1898, the r,
ceipts of the treasury have amount,
to eleven hundred millions. BY Il
aid of repositories. the amount in Il
treasury at the close of any quarter
period during the time never rose
more than $29, 1000 above the ave
age for the whole period. During Il
history of the governments come
ton with the National City ban
specifically inquired into by the res
luton, the secretary shows that Il
bank was appointed depository Ju
21st. 1894. The connection Of the N
3ienaI City bank with the sale Of Il
old custom house property, M
York. IS described in a memoranda