Ottumwa semi-weekly courier. [volume] (Ottumwa, Iowa) 1899-1903, 1901-04-04
Secretary Gage is Interrogated as
to Possible Results.
He EXPECTS NO SERIOUS TROUBLE
Estimates Just Published Were Made
Before the Last Session of Congress,
and Have Been Modified by Events
NO Offer for Bonds.

washington, April 81 secretary
Gage was questioned as to his prob
able action with respect to the cash
accumulations in the treasury, ana
particularly as to when he contemplate
ed buying bonds for the sinking fund.
"The country would like to know, .
it was stated to the secretary, 'wheth-
err the accumulation of money in the
treasury which seems to be going on
Will not operate to the prejudice of
general business affairs. Your esti.
mate Is that there will be surplus of
receipts over expenditures for the ifs
cal year ending June 80 next of about
$SO,O00,000 Your statement publish
ed, shows that some $40,000,000 of that
sum already has been realized. This
would indicate that within the next
three months s40,OO0,O00 more OF cash
will be gathered into the treasury
| from the general money market"
The Secretary-The estimates you
speak of were made before the last
session of congress, and have been
modified by events and by congress.
sional action. 1t is now contemplated
that the years surplus will be over
S6O,O0O,000. A falling off in receipts
or larger disbursements than have
been estimated 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 S20,000,000 between now and
June 80. Are you willing to state
whether you would or could do any
thing to relieve general affairs, should
they be adversely affected by the tie
up of money in the treasury?
But Two Legitimate Methods.
The Secretary-There are only two
methods open to get surplus funds ou
of the treasury vaults. One is to in
crease treasury deposits in nationa
bank repositories the other is to buy
United States bonds. The latter i.
more consistent with government in
terests than the former, since in buy
ing bonds interest on the public dep
is by such much stopped. The depart
ment, however, would not feel JUST
fed in buying bonds other than thost
which mature and become subject tt
payment within the next seven years
At proper price it would no doubt b.
willing to buy these and thus reliev,
the treasury from surplus, which, a
you assume, might under some condl
tions be prejudicial to general busi
ness affairs. At the present quote'
rates for the short bonds do not thin
the secretary would be justified in buy
ing bonds. The IS at the price yiel
an investment return of only 1.03 pc
cent. the short As 1.61 per cent. the
per cents of 1908. 1.34 per cent Will
the new 2 per cents at their presen
price yield higher investment re
turn, viz: 1.73 per cent. Now it i
a well known and acknowledged fac
that long time government bono
everything else being equal, is wort
relatively more than short time bono
The present disparity to the contrary
is, therefore, illogical if not artificial
and at their present price the secre
tary will not buy them.
Question-As an alternative, woul
you not increase the deposit of publ
moneys with the banks?
Accumulation Not Objectionable.
The secretary-No, that would al
gravate in some particulars the situi
ton to which l have Just referred. I
qualify as repositories the bank
"Oulu nave W uuy dllG uSpOolL poiho
The effect would be to set up con
petition, by the aid of government
against the government in the pu
chase of the securities already abno
!, mally high. We are now advancin
+, toward the period of the year whe
. there is apt to be money plethor
; instead of a money scarcity, so |
not see that it will do any particuls
, harm if money accumulates in tn
, treasury The reduction in taxatio
,, will, when it becomes operative, pa
,, tally or wholly cure the present tel
dency toward congestion in til
: treasury To put the matter in nu
shell: If it be choice between bu
: ing bonds at an artificial price and lie
$ ting the funds accumulate in tt
!. treasury, the latter will occur, nor wi
the department advertise for Offering
3 of bonds. To do so. l am informe
: woulu be fruitless in success.
however, the department can fro
time to time buy the short bonds
!. an investment rate realizable to tt
: investor who buys the new 2 per cen
;, it will not hesitate to do so, should IL
! present market price for the rs r
!. main about on the present basis.