The Madison daily leader. [volume] (Madison, S.D.) 1890-current, 1900-01-11
GAGE EXPLAINS
Secretary Of the Treasury Replies
to the Resolutions Of Con.
gress
Asking For Information in Re-
gard to Deposits in National
Banks.
Done to Avoid Business Disturb.
ances by the Piling Up of
Money.

WASHINGTON. Jan. 1l.-Secretarv
Gage has 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 lie
an exhaustive exposition Of the man.
agement Of that branch Of the treasury
finances under his administration. re-
lating to national bank repositories.
contains about 5000 words, which is
supplemented by special reports from
department 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 inquiries the secre-
tary says:
First-That the reason for utilizing
national banks as repositories for pub
lie moneys, as authorized by law, when
the receipts OF the treasury were ex.
ceediny expenditures, has been to avoid
disturbance to business which the with.
drawal 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 it under
similar conditions would certainly
cause disastrous results.
Second-The reason for directing the
internal revenue receipts into deposi.
tory banks at this time Is that the rev.
enues are now largely exceeding dis.
bursements from month to month, and
seem likely TO do SO for an indefinite
time. This condition will be menace
not given that this surplus would be
diverted from the treasury vaults tc
public repositories where, while Sc
cure to the government, it would re-
main availauie 10 business use.
Third-Tne reason for directing al
Of the internal revenue receipts to on.
depository was that it Is more conven
lent to first collect the receipts of tn,
numerous Offices into one place, and I,
make the desired distribution from it
than to give new instructions daily K
ll3 collectors. The most convenient
agency 10 effect such distribution is 4
bank which is mem Der Of New Yorl
clearing house.
Fourih-The reason Tor selecting tn,
National City bank as such distributing
agent was that at the time the orde
was issued. it was one Of but two bank
which had offered bonds sufficient I,
cover the amount OF the daily deposit
Its bond deposit was $4,000, 600 al,
that Of the Hanover National banl
81, 100000. The National City bani
was, therefore. the one most naturally
chosen. OF the 6s banks applying for |
snare of the deposits. the Nationa
City bank, the Hanover National an,
three other applicants for over $500, oo
each, are the only ones out OF the s.
constituting group one. which have no
been supplied the full amount 70
which they had offered security.
Fifth-The custom house property
was sold 10 the National City bank a
the highest bidder on july 3. 1899
Under the terms Of the sale it had tn,
option Of paying in cash all Of the pur
chase money at any time, or any par
it might elect above $750,000. whicl
sum it was absolutely obliged to pay
1t exercised this option by choosing i
pay $3.al5.OOO. leaving $5O. 900 yet due
No deed will be executed until full
payment has been made. Tho paymer
received was turned into the treasur.
by deposit i'll the National City bank. /
having been the established custom
OF the treasury officials. unde
the counsel Of their legal ad
visers. supported by decisions OF tn
supreme court. to consider moneys OF
deposit to the credit Of the treasurer o
the United States, in designated depos
itories, as moneys in the treasury. Thi
deposit was made in depository banl
for the same reason that other deposit
have been made in them: Because t
withdraw the currency into the vault
Of tho treasury. where it was no
needed and could not be utilised, woul
have requi. ed withdrawal Of credi
that was being extended In commercis
circles. and to that extent, y disturb
, ance Of the natural order Of bushes
would have followed. To have require
it's payment by the National City ban
to another designated depository. woul
have been AZ ungracious discriminate
without substantially changing tn
fact.
.Finally, under my administration q
the treasury department.. no discrimir
afion ia favor Of QUE bank again,