Evening journal., 1901-04-01
GAGE DISCUSSES
THE Big SURPLUS
Secretary Of The Treasury
Predicts Money Plethora
OPPOSES SUORT TINE BONDS
Will Allow Funds 10 Accumulate
Rather Than Buy Bonds at Ar
tifcial Prices

Washington, April L. Secretary
Gage was questioned yesterday as 10
his probable action with respect TO tho
cash accumulotions IN the treasury and
particularly as to whether he c0ntem-
plated buying bonds for the sinking
fund.
THE country would like to know"
II was 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 gem
oral business affairs. Your estimate Is
that there will be a surplus OF receipts
over expenditures for the fiscal year
ending June 80 next of about SSO.O00,-
600. Your statement shows that some
$i0,000,000 Of that sum already has
been realized. This would Indicate thar
within the next three months 10000
600 more of cash will be gathered into
the treasury from the general money
market"
The secretary replied; "1he esti-
mates you speak of were made before
the last session of congress. and have
been modified by events and by con-
gresslonal action. 10 is not now con-
templatod that the years surplus will
be over $50 600, 600. A falling OF in re-
ceipts or larger disbursements than
have been estimated foI may also fur
ther modify the effect to which you
point"
well. Mr.. Secretary, even then 1t
seems that the cash holdings of the
treasury will be increased by some $20.-
100000 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 af-
foctod by the tie up of money ia the
treasuryg"
The secretary: There are only two
methods open 10 get surplus funds out
of the treasury vaults. One Is TO in
crease treasury deposits In national
bank dcpuailariea the other Is 20 buy
United States bonds The latter is
more cunsiatont with government in
tercsia than the former. since In buying
bonds interest on the public debt Is by
80 much stopped. The department..
however would not feel Justified in
buying bonds other than those which
Will mature and become subject TO ply-
meut within the next seven years. At
a proper price it would no doubt ba
willing TO buy these and thus relieve
the treasury from surplus which, as
you assume might, under some condi-
uOna, be prejudicial to general business
affairs. At the present quoted rates for
the short bonds I do not think the sec
retary would bo justified in buying
bonds. Il Is well known and ac-
knowledged fact that long time gov
ernment bond, everything else being
equal. is worth relatively more than
a short time bond. The present dis
parity to the contrary Is, therefore, IL
logical, II not artificial. and at their
present price the secretary will not buy
them"
Question: CAS- an alternative, would
you not increase the deposit Of public
moneys with the banks?"
The Secretary: NO, that would ag-
gravate In some particulars the sit
uation TO which / have just referred.
To qualify as depositaries the banks
would have to buy and deposit bonds.
The effect would be to set up a c0mpe-
tition, by the aid Of the government.
against the government In the purchase
of the securities, already ahnOrmally
high. We are now advancing toward
the period Of the year when there is apt
to be money plethora instead of a
money scarcity, so / do not see that II
will do any particular harm If money
aceumulates in the treasury.
THE reduction in taxation will,
when it becomes operative, partially
or wholly cure the present tendency
towarS q congestion I'm the treasury.
If ii be a choice between buying bonds
at an artificial price and letting funds
accumulate In the treasury the latter
will occur, nor VIII The department adj
vortise for offerings of bonds"
q. 40 1-..-r. ..rc..,.cc ..o. nu,ur.rr