The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1900-01-10
GAGE EXPLAINS.
Nothing Indicative Of Regret
or Apology.
Tells Why He Selected the
National City Bank
AS the Depository of Internal
Revenue Receipts.
TO WARD OFF PANIC.
Which ROarding in the Treas
ury Would Tend to Produce.
Money Is Counted as In the
Treasury just the Same.
Says He Is Justified by Prece-
dent and by Law.

Washington, Jan 1O.-Seeretary Gage
today sent to congress his replies to
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 exhaustive exposition OF the man
agement of that branch of the treasury
finances under his administration relat-
ing to national bank repositories con-
tains about 5000 words, which is sup
plemented by special reports from de-
partment officials relative to special
inquiries in the resolutions, including
copies of over 1000 letters on the sub
ject under consideration.
In summing up his reply to the in
quiries the secretary says:
TO AVOID DISTURBANCE.
"F'irst-That the reason Tor utilizing
national banks as repositories for pub
lie moneys, as authorized by law, when
the receipts of the treasury were ex-
ceeding its expenditures has been to
avoid the disturbance to business which
the withdrawal of large sums of money
from active circulation to the treasury
vaults must inevitably cause. The pol
icy thus pursued by me has been the
established policy of the government for
many years, and a departure from 1t
under similar conditions would certain
ly cause disastrous results.
''SecOnd-The reason for directing the
internal revenue receipts into deposi-
tory banks at this time is that the reVe-
nues are now largely exceeding dis
bursements from month to month and
seem likely to do so for an indefinite
time. This condition would be a. men
ace to the business world if assurance
were not given that this surplus would
be diverted from the treasury vaults to
public repositories where, While secure
to the government, it would remain
available to business use.
MORE CONVENIENT
'Third-The reason for directing all
of the internal revenue receipts to one
depository was that it is more conven-
lent to first collect the receipts of num-
erOus offices into one place, and to make
the desired distribution from it, than
to give new instruction daily to 113
collectors. The most convenient agency
to effect such distribution is a bank
which is a member Of the New York
clearing house.
"Fourth-The reason for selecting the
National City bank as such distribut-
ing agent, was that at the time the or
der was issued, it was one of but two
banks which had offered bonds suffi-
cient to cover the amount of the daily
deposit. It's bond deposit was $4,000,0 900
and that of the Hanover National bank
81, CSC, 500. The National City bank was
therefore the one most naturally chOs
for a share OF the deposits, the Ma
tional City bank, the Hanover National
bank and three others, applicants for
over $500 600 each are the only ones out
of the siXty-eight constituting group
one, which have not been supplied the
full amount for which they had offered
security.
CUSTOM HOUSE DEAL.
"Fifth-The custom house property
was sold to the National City bank as
n ferHa 0r
der the terms of the sale it had the
option of paying in cash all of the pur-
chase money at any time or any part
it might elect above $3.50 900, which it
was absolutely obliged to pay It ex-
ercised this option by choosing to pay
$3.215, O0O leaving S50,000 yet due. No
deed will be executed until full pay
ment has been made.
The payment received was turned
into the treasury by deposit in the Ma
tional City bank, it having been the
established custom of treasury officials,
under the counsel of their legal advis-
ers, supported by decisions of the su-
Dreme court to consider moneys on de-
posit to the credit of the treasurer of
the United States in designated depOSi-
tories as 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 treasury, where it was not
have required a withdrawal of credit
that was being extended in commercial
circles and to that extent a disturb
ance to the natural order of business
would have followed. To have required
its payment by the National City bank
to another designated depository. would
have been an ungraciOuS discrimination
without substantially changing the
fact.
NO DISCRIMINATION.
Finally under my administration of
the treasury department, no discrim-
ination in favor of one bank against
another has been made. Generally
speaking. when an increase in depOsi-
tory banks was desired, all have been
invited to qualify themselves for receiv-
ing such money and have been equally
and equitably considered in their re-
spective relations to the treasury
Before proceeding to respond to the
resolution specifically, Secretary Gage
gives a general review of his whole
course in the branch of public finances
concerned with the national bank de-
positories, as follows:
He notes the provisions of the stat
utes which make .all national banking
associations designated for that pur-
pose by the secretary of the treasury
repositories of public money except re-
ceipts from customs, under such regu-
lations as may be prescribed by the
secretary" That statute became a
law June g. 1864, and its first marked
recognition was in the refunding opera
tions Of 1879, when Secretary Sherman
thought it necessary to place with ma