The daily morning journal and courier., 1901-04-01
WILL NOT HURT BUSINESS
GAGE SAYS IRE1SURY ACCUMULA. TIONS ARE NOT PREJUDICIAL.
Years Surplus VIII be About S6o, ,O0O,- 900, Possibly Less, and Not SsO O,OOO,O0 ns First Estimated A Tendency to a scarcity-WilI Not Buy Government Bonds at Present Price.
Bonds nt Present. Price.

Washington, March 31.-Secretary Gage was questioned to-day as to his
 proable action with respect to the cash accumulations in the treasury and par
 ticularly as to whether he contemplates
 buying bonds for the sinking fund.
 "The country would like to know" Il
 wae stated to the secretary, whether
 the accumulation of money in the
 treasury, which seems to be going on,
 will not operate to the prejudice of general business affairs. Your estimate Is that there will be surplus of re- celpts over expenditures for the fiscal year ending June 30 next, of about ESQ., 100000. Your statement published yes terday shows that some S40,00O,OoO Of that sum already has been realized. This would indicate that within the next three months $40000,o00 more of cash will be gathered into the treasury from the general money market"
 Tho secretary: ''The estimates you speak of were made before the last ses- sion of congress and have been modified by events and by congressional action It is not now contemplated that the years surplus will be over $60,000,0O0. A falling off in receipts on larger dis bursements than have been estimated for, may also further modify the effect to which you point"
 Question-"Well, MT. Secretary, even then it seems that the cash holdings of the treasury will be increased by some 10000 900 between now and June <0 r%o@ 70 you would or could do anything to re- lieve general affairs should they be ad- versely affected by the tie-up of money in the treasury?'
 The secretary--"There are only two methods open to get surplus funds out of the treasury vaults One is to in crease deposits in national bank deposi- tories; the other Is to buy United States bonds. The latter is more consistent with government interests than the for mer, 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 become subject to payment within the next sev- erl years At a proper price 1t would no doubt be willing to buy these and thus relieve the treasury from a surplus which, as you assume might, under some conditions, be prejudicial to. gem eral business affairs. At the present quoted rates for the short bonds, do not think the secretary would be justi- fled in buying bonds. The fives at the prices yield an investment return of only 103 per cent; the short fours f61 per cent: the three per cents. of 1908 1,34 per cent, while the new two per cents. at their present price yield higher investment return. viz, 1.73 per cent. Now it Is we'll known and ack- fact that long time gov bond everything else being 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 deposits of public money with the banks?''
 The secretary-"No; that would ag- sravate in some particulars the situa- ion to which I have just referred. To ludltly dS uepUSltOIleS the banks would nave to buy and deposit bonds The .ffect would be to set up a competition. ,y the aid of the government against he government in the purchase of se- 'urities, already abnormally high. We | Ire now advancing toward the period if the year when there is a tendency to ,e money plethora instead of a money carcity, so l do not see that 1t will do | my particular harm If money accunu- | ates in the treasury.
 "The reduction in taxation will, when becomes operative, partially or. who'll l y cure the present tendency towards a | congestion In the treasury.
 ITO put the matter in a nutshell: If be choice between buying bonds at n artificial price and letting funds &C., in the treasury. the latter will ccur, nor will the department adver- ise for offerings of bonds To do so I m satisfied would be fruitless in re- ults. If, however, the department can rom time to time buy the short bonds t an investment rate realizable to the lvestor who buys the new 3 per cents.
 will not hesitate to do so, should tie resent market price for the new twos emain about the present basis'