The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1901-04-01
HE TREASURY FILLING UP
AVS ESTIMATES OF SURPLUS WAS
TOO LARGE, OWING TO SEW
ERAL EVENTS
low TO GET RID OF THE CASH
'WO Way of Getting the Funds In
- o. 4atiOn-MOst Consistent,
He Says, LIS to Buy
bonds.

WASHING TON, March S1-Secretary
age was questioned today as to his
robable action with respect to the cash
icoumulationS in the treasury and par,
ularly as to whether he contemplated
wing bonds for the sinking fund
The country would like to know" it
as stated to the secretary, whether the
ccumulation of money in the treasury
hich seems to be going on VIII not
Derate to the prejudice of general busi-
foSS affairs. Your estimate is that there
will be Il surplus of receipts over ex-
enditu"es for the fiscal year ending
une % next of about $S0,O00,0G0. Your
tatement published yesterday shows
hat some forty millions of that sum
llready has been realized. This would
Indicate that within the next three
1onths forty millions more of cash will
je gathered into the treasury from the
General money market
The Secretary--The estimates you
peak of We're made before the last ses-
sion Of congress, and have been modified
by events and by congressional actions.
t is not now contemplated that the
ears surplus will be over $50, ,O0O OO0 A
alling OFF in receipts or larger disburse,
mentS than have been estimated for
MAY also further modify the effects to
which YOU point
Question-Well Mr. Secretary, even
then, 1t seems that the cash holdings OF
-he treasury VIII be increased by some
S20N0O,00O between now and June 80 Are
you willing to state whether you would
or could do anything to relieve general
affairs, should they be adversely affect
ed by the tie up of money in the treas
ury?
GETTING AT THE FUNDS.
The Secretary--There are only two
Iethods open to get surplus funds out
+ the treasury vaults. One is to in,
rease treasury deposits In National
@nk repositories; the other is to buy
nited States bonds. The latter is more
onsistent with government interests
than the former, since in buying bonds
interest on the public debt is by so much
stopped The department however would
not feel justified in buying bonds other
than. those which will mature and be.
come subject to payment within the next
seven years. At a proper price it would
no doubt, be willing to buy these and
mus relieve the treasury from a surplus
which, as You assume, might, un1er
ONE conditiods, be prejudical to general
usineSs affairs. At the present quoted
rates for the short bonds, I do not think
the secretary would be justified in buy
Ing bonds. The fives ait the price Weld
an investment return of only 1908 per
cent; the short as, 1.61 per cent; the
per cents of 1903, 1.34 per cent. while the
new per cents at their present price
yield higher investment return. viz:
1.I3 per cent. Now it is well known and
acknowledged fact that a long time gov
eminent bond, everything else beins
equal, is worth relatively more than a
short time bond. The present disparity
TO the contrary is, therefore illogical, If
not artificial, and at their present price
the secretary will not buy them.
Question-As an alternative, would
you not increase the deposit of public
moneys with the banks?
CURE FOR MONEY CONGESTION.
The Secretary-No; that would ag-
Eravate in some particulars the situation
to which 1 have just referred. TO
qualify as depositaries, the banks would
have to buy and deposit bonds. The ef-
1ect would be to set up a competition by
the aid fthe government against the
government in the purchase of the Sc
curities already abnormally high. We
are now advancing toward the period cf
the year when there is apt to be a money
plethora instead of a money scarcity so
Go not see that it will do any particular
harm If money accumulateS in the treas
ury. The reduction in taxation will when
it becomes operative, partially or wholly
cure the present tendency toward a con
geStion in the treasury. To put them
there in nutshell: If 1t be a choice
between buying bonds at an artificial
price and letting funds accumulate in the
treasury, the latter will occur, nor will
the department advertise for offerings of
honds. To do so, 1 am satisfied would be
fruitless in results. If, however the de-
partment can from time to time buy the
shcrt bonds at an investment rate re-
alizable to the investor who buys the
new per cents, it will not hesitate to
do so, should the present market price
for the new rs remain about on the pres,
ent basis.