The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1900-01-11


this action was to avoid the injurious ef-
fects on trade and Industry OF 100 sud
den withdrawal from public uses mo the
vaults OF the treasury OF 80 large sum
as $4,000. 900 BY the end OF May. 1895.
these public deposits had been reduced TO
SIS. 2Sg. 259.
Soon after this the government WAS con-
fronted with the necessity Of raising i'm
mediateiy a large fund for war purposes.
aud acting under the authority of the war
revenue act the people were called upon
10 subscribe TO an issue Of 500 600 OF
bonds, On the day the books were opened
the National City Bank OF New York aud
its associates offered TO take at par all OF
any portion of the bonds that might not
be subscribed tor by the public, and ON
the same day ], p Morgan a. Co, aud
their associates. numbering fifteen OF the
greatest financial houses IN the country,
also subscribed TO the entire issue OF $780,
GOO. 600 OF any part that might not be
subscribed for by the general public, 1t
will be readily recognized that an ahsorp-
tion OF 0.Gu0, 200 within the space OF
few weeks could not fail 10 disturb most
seriously the general business OF the conn
try. The secretary OF the treasury feels
some measure OF just pride that the tinanc-
ing OF the war loan OF 1898 was accom-
plshed without the slightest interruption
TO the revival OF commerce and the in
dustiies OF the country which has mazda
the present a period OF uneAampled pros
pority.
Al the beginning Of the present fiscal
year the treasury was feeling the influence
OF the revival OF commerce For the six
months ending with December 81, 1899.
the excess OF receipts over expenditures
aggregated $2l .026. 900. This absorption OF
money from inactive use into the treasury
where II could serve no present useful
mn, s.F ,sts
the public and Of anxiety to the depait-
ment The situation was intensified by
the feet that the fall movement OF cur
rency to the interior for the movement of
crops operated to reduce the cash reserves
at all commercial centcrs The secretary
was indisposed TO increase deposits in pub
lie repositories, and in order to avoid that
he offered TO anticipate on the public debt
and later offered to buy s2S.0O0.oc) q
bonds. The movement toward Stringenoy
in the money market had assumed too
great a momentum to be avcrted by sucn
means.
December Is financial panic occurred
Prices of investment securities fell ruin
DUSTY. While this state OF affairs found
It's most violent expression in the security
market il caused anxiety and alarm
throughout our Industrial and commercial
communities The situation was believed
to he so grave as to Justify the utm-st in
| reference. Tho receipts of the treasury
FOR December. 1t vas perceived. would
exceed the expenditure by 81, 200 coo or
I $4,000, 600 Under the conditions peculiar
responsibility was thrown upon the treas
ury, The statutes conferred authority TO
/ place public money, except customs. In
designated repositories and gave power to
/ relieve the situation without possible
/ prejudice to the treasury's needs II was
Z thprpfpra buf hp
secretary would deposit internal revenue
collections with depository bsulSs TO the
amount OF $50 0D0.oo0 o. 100000 .0eo should
So much be required.
| From this point on the secretary makes
direct answer TO the congressional inquiry.
! His principle ~ action has been to 50
manage the receipts and expenditures as
to produce the least disturbance in that
| part OF the money supply which must BE
81 the service of commercial and industrial
uses. Since January /. 1898, the receipts
OF the treasury have amounted TO SLIGO
100000 by the aid OF repositories the
amount in the treasury at the close al
any quarterly period during the time
never rose more than S29.500.0 900 above tn,
average for the whole period
Taking up the history OF the govern
! ment's connection with the Hanover Ma
tional and the National City banks. thC
.
bank was appointed depository July 81
1894. II was used as depository for in
terna revenue collections until the bond
sale in 1895. when the secretary Of The
treasury deemed it advisable to use that
bank, together with four others. as deposit
| tories. and about S2S 400 400 was deposited
with those banks. When another issue o.
bonds was made in February 1896 th'
then secretary of the treasury again used
the National City bank and the Hanover
National bank as repositories each fot
NEARLY sl0,0 600 Late in 1897 mpre
than S55, 900 was to be paid into the
treasury. To avoid the transfer OF SC
large a sum from public uses TO The treas
ury vaults the New York banks were in
vted to qualify as temporary repositories.
Eight banks so qualified, the National
city for $4,000, 600 and others for smaller
amounts These deposits were gradually
Withdrawn by the transfer 10 the sub
treasury until the several banks were
finally discharged When the $500, 10000
war loan was made Il was seen that The
paying into the treasury OF such a sum
could not be otherwise than a dsngerous
thing for public interests and useless
thing to the government finances. Tho
treasury announced 10 the National banks
Its desire TO place temporarily on deposit
a portion Of this amount and all banks
without regard TO size or location were
tories. All claims were accepted. None
were refused.
The connection Of the National Ciiy
bank with the sale Of the old custom
house property In New York Is described
in a memorandum prepared By the super.
vising architects office. In that connec-
don however. the secretary calls atten'
tion TO the allegation that be has violated
the law by deposlting the proceeds Ia Z
bank not depository when the act de
creed that the proceeds should be deposit
ed Tin the United states treasury" Every
United states depository bank Is withil
The meaning OF section 5l55 OF the Revised
Statutes. part OF the United States
treasury.
The correspondence between the treas
, ury and National City bank Is quoted
, showing the refusal OF the department Il
give the National bank its full balance 0
81. 600 900 except eoncurrently with all
other hanks 10 the first group, the bal
anees Of the National City bank and th
: Hanover bank being built up pro rat
with all other banks
TO DESTROY TRUSTS.
/, senator butler Says the Cause
Must BE Removed.
No.