New-York tribune., 1905-02-26
THE CUSTOM HOUSE LEASE.
II Plain Statement of the Facts IN
the Case.
rrroM THE TRIBUNE puEEAu.1

Washington Feb 25-The~ successful Democratic
guerilla attack in the House late yesterday on the
New-York Custom House lease did no damage that
will not he readily remeded when the Sundry Civil
bill reaches the Senate but the false charges made
by the Democrats, which were, for the time un-
answered, warrants plain statement OF facts on
the subject.
The procedure followed by Secretary Gage in the
sale of the Custom House property was in strict
compliance with law, and nearly every detail was
dictated by the act of Congress which authorized
the sale. The first looking to this sale was
approved on Aarch 3 1891 1t directed the Secretary
Of the Treasury 10 offer the property for sale 'at
public auction private sale, after due adver-
tisement. but for not less than 100000 ana de-
the proceeds to the construction OF new Gus
tom House. This act provided that in case OF
such sale the Secretary Of the Treasury shall lease
said premises from the purchaser or purchasers
thereof at rental not exceeding per centum
per the purchase price, for use as n Gus
tom House until the Custom House shall be
ready for occupancy" and. furthermore, that 'the
Secretary OF the Treasury is hereby authorized 10
sell said Custom House property and receive the
purchase price in several payments from time 10
time. he may deem most advantageous
The property advertised and every ehorl
made to sell it, until 1899, without success. Then
Congress by an act approved March 3 1892 amend
ed the former law by reducing the upset price 10
$S,O000OO. but the provisions to rental by the
government and sale on partial payments were uh-
changed
Under this act Secretary Gage caused the prop
erty to be advertised in the New-York papers The
advertisement recited the main conditions specl-
fed in the lsw to rental until new building was
constructed, privilege of partial payments etc.
and fixed S75000O as the minimum cash payment
Bids opened July 2, 1889. at o'clock p m
The highest bid was that of the National City
Bank, 1926 600. the next highest being SV6'Oo,
The highest bid being S2S5 600 above the amount
fixed by Congress, Secretary Gage accepted II ana
entered into contract.
Pursuant the terms of the law under Whlch ne
was acting this contract provided that the gov
erpment should have possession of the property
until the new Custom House completed. at a
rental of $130000 a year, that being per cent on
the purchase price. Pursuant to the advertisement
inviting bids and to the law, il provided that not
less than $4,000 should be paid within ten days,
and that the remainder might be paid at the will
of the purchaser, pending the completion OF the
Custom House. the amount deferred and
owing to the government to draw interest at per
cent the rate paid by the government as
rental. The bank elected under its contract, to
pay $3215.O0O within days. and. of course, under
the law and the contract. has until the building is
delivered to it to make the final payment. The
government never delivers possession OF or passes
the title to of Its property until it is paid in full
At the time this payment by the National City
Bank made, and throughout that year and up
TO the present year, the revenues of the govern
ment were in excess of It's disbursements and in
order to avoid congestion of money In the Treas
ury. to the injury of business generally. 1t was
necessary deposit the surplus in banks. the regu
lar policy before and since that time At the date
which this payment of s3.21500o was made by
the National City Bank the government deposits
In all banks s7S,166417 &c. and they continued
to increase steadily until in October. 1903, they
reached $l59O569 6S It is apparent therefore that
this payment or its equivalent added naturally
and inevitably to some bank deposit shrewd
politician foreseeng all the trouble that has arisen
would probably have sent this particular check to
other bank than the National City and in
creased the latters deposit with other funds, but
Nh Gage did the natural thing for a man of purely
business experience to do. and he deposited the
National City check in the National City Bank.
In the daily increase of the governments balances
in all IT'S repositories necessary this time this
II Inevitable that the National City Bank
balance should be increased under existing cOndi-
tions, and il the same 10 the government
whether done by this particular check or by diff
ferent distribution.
+ That the bank paid no interest the deposit is
not a factor IN the case. The government receives
no interest on any bank deposits, and never has
received any. That the bank is escaping local tax
tion the property is incidental factor in the
case, probably unavoidable The fact that the prop
erty could be bought partial payments. title re-
naming in the government, known TO every
BIDDER, and must be presumed TO have been taken
into account in the bids in which case the price
higher and the government was the real benefl-
alton is to tax a bank its assets personal
property deductng any real estate included in its
assets and on which it pays taxes separately If
this rule prevails IN New-York, the bank does not
escape taxation. for it certainly show that
il pays taxes this real estate a part OF its
assets.