The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1901-04-01
HOW TO REDUCE
GORGED TREASURY
Secretary Gage Talks Of United
States Finances.
SURPLUS OF s6O.OOO,OOO
METHODS OF DISTRIBUTING
THE CASH.


+ Washington. March S1-Secretary Gage
was questioned today as TO his probable
action with respect to the cash accumula-
tions in the treasury and particularly as
to wether 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 treasury
which seems 10 be going on will not oper-
ate to the prejudice Of general business
affairs. Your estimate is that there will
be a surplus of receipts over expenditures
Tor the fiscal year ending June 80 next
of about $Sc O00,000. Your statement pub
lished yesterday shows that some $40. 900
0D of that sum already had been realized.
rms would Indicate that WITHIN the next
three months $47,OO0.GO more of cash Will
be gathered into the treasury from the
general money market"
Ihe estimates you speak OF, answered
the secretary. were made before the last
session of congress, al I'D have been mOdi-
lied by events and by congressional
the years surplus VIII be over S60,0O0,OO0.
A falling of in receipts or larger dis
bursements than have been estimated for,
may also further modify the effect to
which YOU point"
Way of Reducing Surplus.
Even then it seems that the cash hold
ings of the treasury will be increased by
would or could do anything TO relieve
general affairs should they be adversely
treasury
There are only two methods open to
get surplus funds out of the treasury
vaults, said Mr. Gage "One is to in
crease the treasury deposits in national
repositories. the other is TO buy United
States bonds. The latter is more con-
sistent with government interests than
the former since in buying bonds interest
on the public debt is by so much stopped.
justified in buying bonds other than those
which will mature and become subject to
payment within the next seven years
At a proper price it would no doubt
be willing to buy these and thus relieve
the treasury from surplus which. Is
you assume, might, under some cOndi-
tions, be prejudicial to general business
AFFAIRS At the present quoted ra-eS for
the snort bonds l do not think the sec
rotary would be justified in buying bonds.
The 5s at the price yield an investment
return of only Leg per cent; the short
o .. i,Ol PEI cent, me . str cents OF 1SOo,
l;54 per cent. while the new , per cents at
their present price yield "a higher invest
ment return of LIB Per cent. Now it is
Well known and acknowledged that the
long time government bond everything
else being equal; is worth relatively more
than a short time bond The present
disparity to the contrary is, therefore. il
logical if not artificial and at their pres
ent price the secretary will not buy
them.
Won't Increase Deposits.
As an alternative would you not iR-
crease the deposit OF public moneys with
the banks2'
No; that would aggraVate in some par
ucularS the situation 10 which 1 have lust
referred. was the reply ITO qualify as
depoSitorS the banks would have to buy
and deposit bonds. The eff5ct would be
TO set up "A competition by the aid of the
government against government in the
purchase of the securities. already alb
normally high We are now advancing
toward a period of the year when there
Is apt to be "A money plethora instead of
scarcity, SO l do not see that it will do
any particular harm If money accumu-
ldIeS IN the treasury.
The reduction OF taxation will when
II becomes operative, partially or wholly
cure the present tendency toward a con-
SestiOn in the treasury.
lie put the matter in nutshell. If il
be a choice between buying bonds at an
artificial price and letting funds accumu-
late in the treasury. the latter VIII oc-
cur nor will the department advertise for
offerings of bonds. To do so 1 am salts
fed would be fruitlesS in results If
however, the department can. from time
to time buy the short bonds at an in
Vestment rate realzable to the investor
VINO buys the new per cents. it will
not hesitate to do So should the pres
ent market price for the new 3 remain
about on the present basis"