The Madisonian., 1840-01-04
CoNcLusos OF SEcRETAaY WooDBrRY's hEroar.
The manner cf keeping hs patiie money, '''m "s
Yroa,y guards aqalusf losses.

The manner ~ keeping The Patie money, '''@ "s
proper guards against losses.
During the present year the public money has been
kept IN the following manner Where su''ap'1 ps' na
could he Obtained. conformity 10 the acts % June 90
1885, il has been placed in them, ~ general depos'e
When such could not be obtained aud the amounts
were likely 10 be permanently large or were not COZ,
lecied by any public officer The money mas neen paceu
in banks 10 special depose either ~ the modified iorm
as explained last yesi under particular supuatons
in writing In other cases, where small IN
amount or likely TO be wanted Immediately for public
use, il has remained With those collecting tl drawn
for.
Only two banks employed general depos-
tories. under the act OF June, 1896
In respect TO the system al present IN use, Is not
proposed to add much to the comments, which have
been submitted It's defects, ia former reports The
failures among the banks within the last few months
have again strongly illustrated those defects.
Without further legislation this system cannot be
made, and II certainly is not the most sale and
convenient one, whether Congress intend to continue
system Of banks adopt independent Of banks,
or employ mixed one composed OF both. Bot u Is
system orced ON The Department, by the peculiares
OF the existing laws and the present condition of our
banking institutions IL is believed to be the best
possible, consistent with them. Under The present
rangemenls evenlfu losses supposed have
been sustained. which properly attributable this
mode Of keeping the public money. Any small ones,
which are likely TO happen, appear TO be the result OF
The usual risks incident the collection and dis
outseWehi ol the money, Without reference 10 the
manner o keeping It, and these kinds OF risks are IN
separsble from any system heretoor force this
subject, whether consisting Of ali United States Bank
or State banks, either )i those mixed with individual
officers
An exclusive use Of bank corporations for collecting
and dsbursng as well keeping all the public money
could alone dispense with the employ of individual
officers for The two former purposes, which has prevail
ed IRON the foundation Of the Government Such
innovation has been proposed by some, and espe-
m thp larI H.,
cal change IN the whole theory Of our collection laws
II would subject the Government in OF lis fiscal
concerns to an entire and humIliating dependence
moneyed corporations. And should tho latter though
increased so much IN power, aspire misuse
IT, yet wider door would thus be opened sinister
influences as well to great fiscal ders ngements aud
ultimate losses Recent events have evnced the dan
ger Of ihese so srkIngy justify all in being
misirusnl and 10 render the further consideration Of
such plan unnecessary.
The chief difficulty under the old system need only
be understood clearly be duly appreciated. 1t has
not been IN making large payments large transfers.
when using for deposile either the State banks the
United States Bank Receivers and collectors have
also 10 many places effected payments with prompt
tude and to great amounts and almost every trouble in
transfers by them would be obviaed by the authority
heretofore asked for the Treasurer receive money
for lands in advance points mutually convenient
the purchaser and the Treasurer But the greatest de-
feet IN any former system, connected with this disturb
ing subject, has always been OF different Character
1t consists IN the want of absolute prohibition to
employ the public mohey for any private purposes what
and IN the want Of penalties 10 enforce
such prohibition. and Of other adequate checks and
guards. possessing preventive operation both the
minds aud acts OF officers, sufficiently powerful d.
mlnsh deidlcatl0ns
This defect has exposed the Treasury to constant
losses from the foundation of the Government, and
under all systems hitherto II be effectualy
remedled by official regulations, these have neither
the extent, respect, force Of laws, but only = such
regulation, both penal and prohbitory has been
repeatedly recommended by this Department, and
experience ID other countries has shown be IN
dlspensabe to check pecuallons in the most effective
The correctness of the statement as TO the existence
o those losses under all systems and all adnihs
Of them, which have prevailed since the present form
OF Government went into operation, has been shown
generally from official records reports made Con-
gress within the last two years. and they will appear
III detail IN reply, 10 he presented, 10
solution Of the House OF Representatives, calling for
particulars concerning defaults in a. each admnistra-
tion," from 1889 to 1887,
II is proposed to enter here INTO minute particulars
concerning the results contained and ex hibied in
that reply. But few general statements from them
will throw light on the topic under consideration
Losses appear TO We occurred from defaults
among officers in every administration" or Presi-
dental term, from The formation of The present Co
verninent. Thus, among discussing officers they
found in every term since 1883; among collect
ing officers in each since l792; and among depose
officers, or banks, in all since 1917
The largest amount OF loss from each class with.
in the period described, has been BY depoSie officers
consisting OF banks, and including, The resolution
requires, the depreciation on such Of their notes as
were taken for public dues. The loss by this class
at the lowest estimate, has exceeded six millions and
half of lars and adoptiu a computation made
by com .nitiee Of the House Of Repre- .entaves in
1882 would equal 80 millions. The next largest
amount Of loss as ascerlained and Computed by the
proper eaus, has been by dsbursing officers and
has been little under five millions And The least
loss has been by collecting officers, no, much ex-
ceeding two millions The aggregate of all these
losses, taking the lowest estimate Tor blnks is about
thirteen millions and half. IL, in connection with
this subject considered the losses in collecting
the revenue by The non payment oi bonds for duties
on which credit was given 10 merchants, somelhing
over seven and a half millions of dollars must be
added, increasing The aggregate 10 than twenty
one millions The ptoporlionate losses BY these
classes have been thus Those by the banks and by
the duty bonds amount 10 more than twothirds of
the whole The losses, either by the banks alone,
or the merchants bonds alone, have been nearly as
greet as by both di ,butSng and collecting officers
united and either Is more Than three-iud as great
As by collectors and receivers, aud several millions
more than by them, not only iron, l7S9 to 1887 but
from l7S9 down 10 the present moment
The particular losses in each Presidential term
being also desired by the resolution they have been
a>certained; and, as they furnish striking solution
oil some OF The general causes OF those losses The
periods IN which the largest aud some of The small.
may be uSetully designated here Among the banks
the largest losses were from 1913 TO 1877 then CON
Sisng entirely of depreciation on notes aiken and
next from 1921 to 1924, consisting then chiefly Of de-
poSles; while from lo29 to 1888 and from 1893 To-
1887 they were smaller than in any period since
1913 Among dsbur>ing officers, looking to the
amount di>bursed the largest losses were from 1921
10 1925, next from 1877 ID 1921 and next from 1909
10 1913; and they sma Ter from 1929 10 1888
and 1883 10 1887, than in any other term whatever
exceptiron 1859 10 1893. The loss on each 300
from 1929 TO 1888 was only 10 cents, and lrom 1888
To 1887 only II cents; while in some previous terms
il WAS as hlgh as dnllhr, and ipen cenls In