Daily new dominion. [volume] (Morgantown, W. Va.) 1897-1906, 1900-01-11
AN ANSWER BY GAGE.
JuStihed His Relations with Certain
Banks--saie OF New York Prop
erty Explained.

WASHINGTON, Jan. li.-Secretary
Gage sent to congress his replies TO res.
olutions recently introduced in the sen.
ate by Mr.. Allen and in the house by
Mr. Suizer.
In the course of his report he goes
over the period of depression before the
Spanish war and describes the war rev.
enue act and its effect on our monetary
condition. Then the increasing pros.
perity following the war is dwelt upon
and its resultant accumulation of fund.
in the treasury is described
THE absorption of money from an
active use, he says. into the treasury
where il could serve no useful purpose.
was a source Of apprehension TO the pub.
lie and anxiety TO the department.
His action in offering to buy bonds to
get this money into circulation again Is
then detailed. Taking up the history
of the government s connection with
the Hanover National and the National
City banks specifically inquired INTO by
the resolution, Secretary Gage min.
utely tells how they became govern
ment repositories under the law. When
the 5000, 100000 loan was made, ma
tional banks were invited to qualify az
repositories. The National City bank
deposited $14,000,000 in bonds, and the
balance paid on this account never ex-
ceeded Sl4 100000, the Hanover Ma.
tional deposited $I1 100000 and its bal.
ance never exceeded that sum. In con.
clusion Secretary Gage sums up his re.
ply to the several inquiries of the reso
buttons as follows:
First. the reason for utilizing national banks
as repositories for public moneys, as author
lied by law, when the receipts Of the treasury
We're exceeding its expenditures. has been to
avoid the disturbance to business which the
withdrawal of large sums of money from act
i've circulation to the treasury vaults must in
evitably cause. The policy thus pursued by
me has been the established policy Of the gov
eminent for many years and departure from
1t under similar conditions wonld certainly
cause disastrous results.
Second the reason for directing the in
ternal revenue receipt into depository banks
at this time is that the revenues are not
largely exceeding disbursements from month
to month and seem likely to do so for an in
definite time. This condition would be q
menace to the business world if assurance
We're not given that this surplus would be di
verified from the treasury vaults to public de
positories, where while secure to the govern
ment it could remain available to business
use.
Third, the reason for directing all of thu in.
ternal revenue receipts to one depository was
that if it is more convenient to first collectthe
receipts of numerous offices into one place
and make the desired distribution from it.
than to give new instructions daily to lib col
lectors. The most convenient agency to eff
feet such distribution is a bank which is q
member of the New ork clearing house
RI. TO- tE1Dn Nh.
tional City bank as such distributing agent
was that at the time the order was issued il
was one of but two banks which had offered
bonds sufficient to cover the amount of this
daily deposit. Its bond deposit was "a 0U0, u.
anu that of the Hanover National bank $500
5OO The National City bank was therefore
the one most naturally chosen. or the q
banks applying for share of the deposits this
National City bank. the Hanover National
bank and three other applicants for over 500
600 each are the only ones out of the Us constr
tuting group one which have not been sup
plied the full amount for which they had Of
fered security.
Fifth the customhouse property was sold
to the National City bank as the hihhest bid
der on July 8, 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
il might elect above 100000 which sum II
was absolutely obliged to pay. 1t exercised
this option by choosing to pay S3,2l5,O00, leav
ing 700 yet due. No deed will be executed
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 the
treasury officials, under the counsel OF thelr
legal advisers. supported by decisions of the
supreme court to con slider moneys ON de
posit to the credit of the treasurer Of the
United States i'll designated dep ositories a.
moneys in the treasury. This deposit was
made in depository bank for the same reason
that other deposits have been made in them
viz.
Because, to withdraw the currency into tht
vaults Of the treasury, where 1T was moi
needed and could not be utilized, would havt
required withdrawal of credit that was be
ing extended in commercial circles, and tt
that extent disturbance to the natural order
of business would nave followed. To have re
CURED its payment by the National City banh
to another designated depository would have
been an ungracious discrimination without
substantially changing the fact.
EULOGIBS ON HOBART.