Evening star. [volume] (Washington, D.C.) 1854-1972, 1901-11-01
Why Secretary Gage Will Buy More
Bonds.
LESSEN The INTEREST BEARING DEBT
Avoids a Sudden Stringency of the
Market.
CAN DICT ATE P r l G E s

Secretary Cages determination to resume
the purchase of bonds was taken suddenly
yesterday afternoon. after he had gone into
full study of the conditions of The treas
ury and outside business conditions. Dur
ing the early part of the month there was
slow accumulation of a surplus, and for
some time it thought that the surplus
last month would be considerably smaller
than other months of the present fiscal
year. Instead. the surplus increased very
fast during the last of the month of Oc
tober owing to the fact that the warrants
for expenditures had been put in during the
first and middle of the month. Looking
over the figures yesterday afternoon, Sec
rotary Gage saw that there would be a
surplus of over 50 900 900 for the month of
October which, If continued throughout
the year, would run to over 500. 000, 900 fer
the fiscal year. In fact, for the four
months of the fiscal year the surplus is
$2T, 4S1 ,O16, an average of over $4,000 900
for each month. Last month the surplus
went to s12.OOO000.
Outlook Was for n Big Surplus.
The first two months of fiscal year al
ways show a small surplus, owing to dis
bursting officers drawing heavily for ex-
penditures for the new fiscal year. So the
outlook. as viewed by Secretary Gage, was
for surplus of more than S100, 600 900 for
the year. There had been many sugges-
lions of leaving to Congress the question
of what to do with this surplus. but this
was impracticable for many reasons The
chief reason was that Congress could not
do anything within three four n onthS,
and that while that time was passing the
treasury would be taking out of the cir
culatiOn of the country an avera ge of prob
ably S9.00O.000 each month, rendering
sudden stringeney of money possible al
most without notice. and causing renewal
of bond purchases at some other time. In
anticipation that the increasing surplus
would eventually cause this, bond brokers
in New York have been accommodating
large amounts of bonds, but hoped that
the Secretary would wait until crisis came
to ask for offers of bonds. They knew
that they could then dictate prices of bonds
to him. ii would be absolutely neces-
sary that bonds should be bought to re-
lieve dangerous situation.
The Secretary has given the matter much
thought, and his conclusion yesterday is
generally approved in financial and admin
istration circles. Since last spring the
treasury has bought about $4,000, 600 of
bonds to apply to the sinking fund. The
bought in any one fiscal year, but part of
the large sum already bought in the
last fiscal year and part in this. So the
Secretary has a large margin to purchase
for the sinking fund. and if this is eX-
hausted he can buy and cancel bonds.
Reduces Notwithstanding Debt.
In addition to the money prospects. Sec
rotary Gage thinks that bond purchases in
case of a surplus is the proper way of dis
posing of an accumulation of money. 1t
reduces the Understanding debt of the
government. which was so largely increas-
ed because of the Spanish war, and lessons
the interest payments each year. Three
years ago, before the war loan was made,
the fnterest-bearing debt of the govern
ment had decreased to a figure that caused
some secretaries of the treasury to hope
that the day might come when ii could De
wiped out But $500 900 00O was added to
this sum. running the total to a good deal
over billion dollars. The total has now
been run below a billion dollars by reason
of the bond purchases made by Secretary
Gage during the last seven or eight
months.
Secretary Gage declines to disclose the
amount of bonds he will purchase this
time, but he can easily spare S25, 900 900
from the cash fund and run no danger. In
fact, he could spare $4,000. 900 if he felt
like going so far. The Secretary reserves
the right to withdraw his announcement
at any time, thereby giving notice to bond
brokers and owners that he Is not buying
bonds for their benefit. and any attempt to
raise prices on him will result in a with
drawal.
One effect of generous bond purchases
Will be to remove the menace of heavy APP
preparations by Congress because of a
treasury full of money.
Monthly Statement.
The monthly statement of the govern
ment receipts and expenditures issued to-
day shows that for the month of October,
1901, the total receipts were $40. S31. So and
the expenditures s4O,645.S35, which leaves
surplus for the month of 81, 1876, III The
receipts were nearly 100000 less than
for October. 1900, and the expenditures
nearly $1,000 900 less. The. receipts from
the several sources of revenue are given
as follows:
Customs. 81. 415.5T0. an increase over Oc-
tober, 1900, of nearly 100000; internal
revenue, S23.511 ,649 decrease 41O0OG0;
miscellaneous. s2,904. 49,. decrease s4I7,OOO.
The expenditures ON account of the War
Department were 81, 543, 40, decrease So
IOO,Oo; on account of the navy So, 124, 2I9,
increase 81 800. 900. For the four months
OF the present fiscal year the total receipts
Were s191 ,9SO.Si1. a decrease of $500, 900
from those of the corresponding period
last year.
The expenditures aggregated S164 GIL
decrease of 81. 5000 as compared with
the corresponding period in 1900.