Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1901-04-01

Dipiomdtic 10 some very
Pertinent Questions Propounded
by the Associated Press.
WASHINGTON, March 31.-Secre-
tary Gage was questioned to-day as to
his probable action with respect to the
cash accumulations in the treasury,
and particularly as to whether he con-
templated buying bonds for the sink
ing fund.
THE country would like to know" it
was stated to the Secretary, whether
the accumulation of money in the
treasury which seems to be going on
will operate to the prejudice of general
business affairs. Your estimate is that
there will be a surplus of receipts over
exports for the fiscal year ending june
30th next, of about eighty million dol
lars. Your statement published yes
terday shows that some forty millions
of that sum already has been realized.
This would indicate that within the
next three months forty millions more
of cash will be gathered Into the
treasury from the general money mar
ket."
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 not now contem-
plated that the years surplus will be
over sixty millions. A falling off in
receipts, or larger disbursements than
have been estimated for may also fur
Their modify the effect to which you
point"
Well, Mr.. Secretary, even then it
seems that the cash holdings of the
treasury will be increased by some
twenty millions between now and June
Goth. Are you willing to state whether
you would or could DO anything to re-
lieve general affairs should they be adj
Wei oCly dHCStNu ny lAC tiC-up VI ilOhCy
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 in
terests than the former, since in buy
ing bonds the public debt is by SO
much stopped. The department, how
ever, would not feel justified in buying
bonds other than those which will
within the next seven years. At a
proper price it would, no doubt, be
willing to buy these and thus relieve
the treasury from a surplus which, as
you assume might, under some con-
ditions. be %prejudicial to general bust
ness affairs. At the present quoted
rates for the short bonds l do not think
the Secretary would be justified in buy
ing bonds. The IS at the price yield
an investment return Of only 1.03 per
cent, the short As ISL per cent, the
3 per cents. of 1898, 1.34 per cent, while
the new 2 per cents. at their present
price yield a higher investment return,
namely 1.73 per cent. Now, it is a
well known and acknowledged fact that
a long time government bond, every
thing else being equal, is worth rela-
lively 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
would not buy them"
AS 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 situa-
ton to which | have just referred. To
qualify as depositaries, the hanks
would have to buy and deposit bonds.
The effect would be to set up a COM
petition by the aid of the government
against the government in the pur-
chase Of the securities. already abb
normally high. We are now advancing
toward the period of the veal when
there is apt to be a money plethora
instead of a money scafcrr,, so l don't
see that it will do any particular harm
if money accumulates in the treasury.
THE reduction in taxation will,
when it becomes operative. partially DR.
wholly cure the present tendency to-
ward a congestion in the treasury.
ITO put the matter in a nutshell: II
it be a choice between buying bonds
at an artificial price and letting funds
accumulate in the treasury. the latter
will occur, nor will the department
advertise for offerings of bonds. To
do so, / am satisfied ~5uid be fruit
less in results. II, however. the de-
partment can from time 10 time buy
the short bonds at an investment rate
realizable to the investor who buys the
new 2 per cents. II win not hesitate