New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1900-01-11
Mr.. GAGE MAKES REPLY.
THE TREASURYs TRANSACTIONS WITH
BANKS DEFENDED.
INFORMATION SENT TO CONGRESS REGARD
ING DEPOSITS OF PUBLIC, FUNDS
AND THE SALE OF THE
CUSTOM HOUSE.

CUSTOM HOUSE.
Washington Jan. l0-Secretary Gage to-day sent
TO Congress HIS reply 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 the reply which is exhaustive exposition
Of the management Of that branch Of the Treasury
operations relating to National bank repositories
contains about nine thousand words, which is sup
plemented by reports from Department officials
relative special inquiries in the resolutions IN
GLIDING copies of over one thousand letters. In
summing up his reply the Secretary says:
First-That the reason for utilizing National
ized by law, When the receipts Of the Treasury
ne dsfTg Ssess biic has Sb eeen 10 av0d
of large OF money from active circulation
policy thus pursued by me has been the established
poey OF the G9veTnment fOr many years and
certainly cause disastrous results;
receipts i1to depository banks an ths
time Is that the revenues are now largely exceed
likely TO do so for an indefinite time. This
assurance were not given that this surplus would
6e diverted from the Treasury vaults to public
mfPt il you'd remain ayaa6le 70 business use
Is more convenient rst to- eoieet the receipts
desired distribution from It than TO give new in
STIeG3ns daily to liz c9eetGrs The NEST con,
House '''s u !" 0-sA- '"s
Fourth-The reason for selecting the National
City Bank as such distributing agent that at
the time the order was issued 1t was one of but
TWO banks which had offered bonds sufficient TO
cover the amount OF the daily deposit It's bond
fionaI Bank $i9i05Oo The National city Bank was
therefore the one most naturally chosen: OF the
posts. the National City Bank, the Hanover Ma
tional Bank and three others. applicants for over
$4,000 each, are the only ones out of the sixty
eight constituting Group No; ! WHICH have not
offered security -'-i'
tb Custom House sds G to
July 8, 1893. Under the terms Of the sale it had
ah ~ e az IN G pa f elect sboy
which sum il was absolutely obliged j. to o. PAX S
leaving $4,000 yet due. No deed will be executed
The payment Teceived was turned into the Treas
rry by deposit in the National City Bank it hay
eSs under the counsel Of thsT Legal a6sers
optger u o pg on denosft 70 ne rre6t or the
Treasurer of the United States in designated de-
post was made in a depository bank for the same
them, viz, because to withdraw the currency into
abe vaults of the Treasury, where II was not need
a withdrawal Of credit that was being extended in
3ce to- the natural order 70 of Business would have
55oliewed- TO TO have required its payment by the
ifory Would have been an ungracious discrimination
without substantially changing the fact.
NO DISCRIMINATION MADE.
Finally. under my administrator Of the Treasury
against another has been made; Generally speak
sired all have been invited qualify themselves for
receiving such money. and have been equally and
the Treasury.
Before proceeding to reply to the resolution spe-
officially, Secretary Gage gives general review of
his whole course in the branch of public finances
concerned with National bank repositories, fol-
lows:
He notes the provisions of the statutes which
make National banking associations designated
for that purpose by the Secretary of the Treasury
customs; under such regulations as may be pre-
law on June g. 1864 and its first marked recognition
was in the refunding operations of 1879, when Sec
National bank repositories sums of money which
raS a IS high d3 as nsToo secPstaTy Fair
ceipts of revenue Increased the number of
depository banks, and allowed such banks
on March l. 1891 there were 15s National bank de-
exceptions these Institutions received deposits FROM
snteTnal revenue collectors and RENTED to the
fixed balances which they permitted to hold
same during the frst six months Of this Admn 1ie
5rstipn In November began these large payments
element OF the Union Pacific Railroad Indebtedness
payments aggregating. SIS, 1929. 1t thought
expedient, as part of this enormous transaction,
TO utilize for few days the services of depository
banks. with the result that at the end Of De-
cenber 1897 such deposits had increased to s49-
I Ts eS6 for on h ahd Hdasfy a Of
too sudden withdrawal from public uses into the
900 By the end of May 1898 these public deposits
I Soon after this the STeTRmen was confronted
with the necessity of raising Immediately large
fund for war purposes and, acting under the
thority of the War Revenue act, the people were
called upon TO subscribe to issue of 600
National City Bank. of New-York, and its asso-
eiates offered to take at par and accrued interest
any portion Of the bonds that might not be sub
J. P. Morgan & Co. and their associates, number
ing fifteen of the greatest financial houses of the
s200,00O000 any part that might not be subscribed
for by the general public.
Of 500 0O0OO0 within the space Of few weeks could
not feI TO disturb most seriously the general bust
feels measure of just pride that the financing
Of the war loan of 1898 was accomplished without
uerce and the Industries Of the country which has
made the present period Of uneXampled pros
perity.
INCREASE OF REPOSITORIES
BY the end of 1898 the number of National bank
forty-three States and Territories, and holding
81. 600 The New-York banks were able to con-
proportions than the banks in the interior cities
With view to securing more equitable dis
tribution Of the funds the Secretary early in 1899
designated forty. fifty additional repositories
and while thus increasing the deposits outside of
the balances IN the NeT-York City banks ''""
- With the beginning Of the present fiscal year the
Of commerce For the six months ending with De-
cember 81, 1899. the excess of receipts ex-
pendtures aggregated S21 ,O26O0O This absorption
Wnere II could serve present useful purpose,
anxiety to the Department The situ piG Was m
tensihed by the fact that the fan movement of
operated 70 reduce the cash reserves al ali com