The Stark County Democrat. [volume] (Canton, Ohio) 1833-1912, 1901-04-05

SURPLUS
Will Now be Allowed to
Pile Up
SECRETARY
There Will be no Bonds
Bought or Increase Made
In Bank De-
poSitS.

washington, April 2.-Secretary Gage
was questioned today as to his proba-
BILE action with respect to the cash ac-
cumulations in the treasury, and parti
cularly as to whether he contemplated
| buying bonds for the sinking fund.
The country would like to know" it
was stated to the secretary, whether
the accumulation of money in the treas
ury 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 receipts over
expenditures for the fiscal year ending
June 80 next Of about $S0O0O,0O0. Your
statement published yesterday shows
that some $40, 100000 of that sum
already has been realized. This would
indicate that within the next three
months $40 ,000, 900 more of cash will be
gathered into the treasury from tho
general money market"
ESTIMATES MODIFIED.
The secretary--The estimates you
speak of were made before the last ses.
sion of congress, and have been modi.
fed by events and by congressional ac-
ton. 1t Is not now contemplated that
the years surplus will be over $50 ,000.-
000 A falling off in receipts. or larger
disbursements than have been esti-
mated for, may also further modify the
effect to which you point.
Question-Well, Mr.. Secretary, even
then it seems that the cash holdings OF
the treasury will be increased by some
S20,000,0 900 between now and June 30.
Are you willing to state whether you
would or could do anything to reliev,
general affairs should they be adversely
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 treasury deposits in national
bank depositaries; the other is to buy
United States bonds. The latter is more
consistent with. government interests
than the former, since in buying bonds
interest on the public debt is by so
much stopped. The department, how
ever, would not feel justified in buying
bonds other than those which will ma
ture and become subject to payment
within the next seven years.
RATES TOO HIGH.
At proper price 1t would no doubt
pc WiiiluB W uuy tutSt ana Jnu3 felfeVc
the treasury from surplus which as you
assume, might, under some coalitions,
be prejudicial tc general business af-
fairs. At the present quoted rates for
the short bonds do not think the sec
retary would be justified in buying
bonds. The 5s at the price yield an in
yestment return of only 1903 per cent,
the short As 1.81 per cent, the 3 per
cents of 1908 1.34 per cent, while the
new 2 per cents at their present price
yield a higher investment return, viz:
1.73 per cent. Now, 1t is a we'll known
and acknowledged fact that a long time
government bond, everything else be-
Ing 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--As an alternative would
you not increase the deposit of public |
moneys With tho banks?
DEPENDS ON TAX REDUCTION.
The Decretary--No, that would A.