The morning news. [volume] (Savannah, Ga.) 1887-1900, 1900-01-11
GAGE STATES HIS REASONS.
WHY DEPOSITS WE'RE MADE IN
NATIONAL CITY BANK.

for Convenience, and in National
City Bank Because Ii Had Up the
Largest Amount of Security-Facts
Connected with Sale of New York
Custom House.
Washington, Jan. l0-Secretary Gage
to-day sent TO Congress his replies to the
resolutions recently introduced In the
Senate by Mr.. Allen OF Nebraska. and in
the House by Mr. Sulzer OF New York.
The text of his reply. which is an ex-
haustive exposition OF the management OF
that branch Of the treasury finances under
mis- administration relating to national de
positories, contains about 5000 words
which is supplemented by special reports
from department officials relative to spe-
cial inquiries in the resolutions including
copies Of over Loo letters on the subject
under consideration.
In summing up his reply to the inqui-
ries, the Secretary says:
First That the reason for utilizing ma
tional banks as repositories for public
moneys as authorized by law, when the
receipts of the treasury were exceeding
Expenditures, has been to avoid the dis
turbance to business which the with
drawal Of large sums of money from act
i've circulation to the treasury vaults must
inevitably cause. The policy thus pur-
sued By me has been the established pol
icy of the government for many years,
and a departure from ii 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 if assurances We're not given that
this surplus would be diverted from the
treasury vaults to public repositories.
where, while secure TO the government,
II wJlld remain available 10 business
uses.
Question of Convenience.
Third. The reason for directing all of
the internal revenue receipts 10 one de-
pository was that it is more convenient
TO first collect the receipts at numerous
Offices into one place. and make the de-
sired distributions from it, than to give
new instructions daily to 113 collectors.
The most convenient agency to effect
d a
member Of the New York clearing house.
Fourth. The reason for selecting the
National City Bank as such distributing
agent was that a the time the order was
Issued 1t was one of but two banks which
had offered bonds sufficient 90 cover the
amount of the daily deDosit It's bond de-
post was 100000. and that OF the Han
over National Bank $l,9l05O0 The Ma
tional City Bank was, therefore the one
most naturally chosen. OF the sixty
eight banks applying for share Of tho
deposits. the National City Bank the
Hanover National Bank and three others,
applicants for over $4,000 each, are the
only ones out of the sixly-eight constitute
ing group one, which nave not been sup
piled the full amount for which they had
offered security.
The New York Custom House.
Fifth. The custom house property was
sold 10 the National City Bank as the
highest bidder on July 3, 1899 Under the
terms OF the sale it had the option Of
paying in cash all of the purchase money
at any time. or any part Of IL it might
elect above $3.50 900. which sum It was alb
solutely obliged 20 pay. 1t exercised this
option by choosing to pay S3,2l5,C0 leav-
ing $1,000 yet due. No deed Will be ex-
ecuted until full payment has been made.
The payment received was turned into
the treasury by deposit in the National
City Bank. it having been the established
custom of treasury officials. under the
counsel of their legal advisors. supported
by decisions OF the Supreme Court to con-
slider moneys on deposit to the credit of
the treasurer of the United States In des-
fgnated depositories as moHeys 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 treasury. where IL
was not needed and could not b utilized,
would have required a withdrawal of cred
ii that was being extended in commercial
circles, and to that extent a disturbance
to the natural order of business would
have followed. To have required its pay
ment by the National City Bank to an
other designated depository would have
been an ungracious discrimination without
substantially changing the fact
No Discrimination Mpde.
Finally. under my administration Of the
treasury department no determination
in favor Of one bank against another has
been made. Generally speaking, when an
increase in depository banks was desired
ali have been invited to qualify them
selves for receiving such money and have
been equally ana equitably considered in
their respective relations TO the treasury.
Mr.. Gage gives a general review OF his
policy as to national bank repositories.
details the successful financing OF our
Spanish war loan and says that with the
beginning Of the present fiscal year the
treasury was feeling the influence Of the
revival Of commerce.
For the six months ending with Dec. 81.
1893. the excess Of receipts over expendi-
lures aggregated 81 .09f000. This alb
sorption Of money from an active use into
the treasury, whore 10 could serve no
present useful purpose. caused great pub
lie anxiety. The situation was intensified
by the fact that the fall movement Of
currency 20 the interior for the move
ment OF crops, operated 20 reduce the cash
reserves at all commercial CEN
ters To avoid increasing de-
posts In public repositories
the Secretary offered TO anticipate interest
on the public debt and LATER offered so
buy s25.0O0.000 Of bonds. but the strngency
had become TOO great TO be ayerted by
such means.
Interference Was Justified.
Dec IS financial panic occurred. Prices
of investment securities feil ruinousiy. and
the situation became 50 grave as to justify
50 int inf .