The Forrest City times., 1900-01-12
GC'Y CAGES Responses
The Secretary Of the Treasury Re
spends to Congressional Reso-
lutions of Inquiry.
me REPLIES ARE VERY VolUMIxOJs.
clsres that whatever Has Been
DSse Har Warrant of Law md
Hss been Done tn Conserve the
goansry's Best Interests-

gouasry's Best Interests.
Jan. 11.-Secretary Gage
las sent &c congress his replies 10
resolutions recently introduced in the
senate by Mr.. Allen, of Nebraska. anil
M the house by Mr.. Sulzer, of New
York. The text of his reply. which i
IN exhaustive exposition OF the man
agement of that branch of the treas
urs finances under his administra-
fion, relating TO national hank depos-
t;ories, contains abous 5000 words.
which is supplemented by special re-
ports from department officials rela-
tive TO special inquiries in the resolu-
lions including copies of over 1000
letters on the subject under eonsidera-
tion. In summing up his reply TO the
inquiries the secretary says:
secretary Cages summing Up.
First--That the reason for utilizing na-
floral banks as repositories for public
moneys. authorized BY law, when fne
receipts Of the treasury were exceeding
IT'S expenditures, has been TO avoid the
disturbance 10 business which the with
drawai 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 departure from il under similar
conditions would certainly cause disas-
uous results
second-Tne reason for directing the in
ternaI revenue receipts into depository
banks at this time is that the revenues
are now largely exceeding disbursements
from month to month, and seem likely
10 do SO for an indefinite time. This con-
1ition would be menace TO the business
world IL assurance were not given that
this surplus would be diverted from the
treasury vaults TO pubic repositories
where, for while secure to the govern
ment, 1t would be available for business
gse-
internal revenue receipts to one depos
ftory was that IL Is more convenient TO
frs collect the receipts OF numerous Of
hces into one place, and 10 make the de-
sired distribution from IL, than 10 give
new instructions daily to ll3 collectors
The most convenient agency TO affect
such distribution Is a 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 order
was issued, IL was one of TWO banks which
had offered bonds sufficient to cover the
amount Of the daily deposit. Its bond de-
posit was 81, 90 90. and that OF the Han
over national bank 81. 20. SO. The National
City bank was. therefore. the one most
plying for a share of the deposits the
National City bank. the Hanover national
bank. and three others, applicants for
over $4,000 each, are the only ones out
pr the s. constituting group one, which
have not been supplied the full amount
Dor which they had offered security
FIfth-The customhouse property was
sold TO the highest bidder, on July 3,
ISIS. Under the terms of the sale II hac
the option OF paying in cash all of the
purchase money at any time, or any part
II might elect above $4,000, which sum
b was absolutely obliged TO pay. IL ex-
:, q. this option 6y choosing 70 pay
viii be executed until full payment has
been made
the treasury by deposit In the National
City bank. IL having been the estab-
kshed custom OF treasury officials. under
the counsel of their legal advisers. sup
TO consider moneys on deposit to the
credit of the treasurer OF the United
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
the currency into the vaults of the treas
ury, where 1t was not needed and could
not be utilized. would have required a
withdrawal OF credit that was being ex-
tended in commercial circles and to that
extent disturbance of the natural order
Of business would have followed. To have
required its payment by the National Sity
bank to another designated depository.
would have been an ungracious discrim-
ination without substantially changing
The fact.
finally. under my administration of the
treasury, discrimination in favor of
Generally speaking. when an increase in
depository banks was desired. all have
been invited to qualify themselves for re-
sewing such money. and have been equal
Iy and equitably considered in their re-
Npective relations to the treasury.
Before proceeding to respond to the
resolution specifically Secretary Gage
gives general review of his whole
course in the branch of public finances
concerned with national bank deposit
tories as follows:
A General Review.
He notes the provisions of the statutes
which make all national banking associa-
tions designated for that purpose by the
secretary OF the treasury repositories of
public money, except receipts from GUS
toms, under such regulations as may be
prescribed by the secretary.
That statute became law June 3. 1854
and its first marked recognition was in
the refunding operations of lssswhen Sec
rotary Sherman thought II necessary to
place with national bank repositories
sums of money which reached as high as
1913 ,6i5. Secretary Fairchild, in 1857
s. during a period of abnormal receipts
of revenue, increased the number of de-
pository banks. and allowed such banks
70 accumulate balances reaching s6l, 5i6-
on March /, 1897. there were I5e ma
sional bank repositories, holding a total
of SIG, 1875, 40. With few exceptions these
snstitutions received deposits from inter-
nal revenue collectors, and RENTED to
the subtTeasuries any surplus over the
amount of the fixed balance which they
we're permitted to hold. The amount of
public deposits remained about the same
during the first six months of this ad-
u1inistration. In November began those
large payments which resulted from the
highly successful settlement of the Union
Pacific indebtedness payments, aggregat-
k.xar hon tf f..ar4V
as a part of this enormous transaction, &c
utilize for a few days the services OF de-
posifory banks, with the result that a the
end of December. 1887, such deposits had
increased To Si9. lS2, III. The reason fol
this action was TO avoid the injurious eff.
feet on trade and industry of "A too sud
den withdrawal from public uses into the
vaults of the treasury of so large a sum
as S5S. 100000. BY the end OF May, 1855
shese public deposits had been reduced
60 SIS. 239. 35s
Soon after this. the government was
81