The western sentinel. [volume] (Winston-Salem, N.C.) 1887-1926, 1892-07-21
A QUgSTIO, ANSWE ED.
Mr. CIeVGland'S Position on PlfanCial
Administration.

Question Democratic Leader
not Dominated by Wall Street In
fiuences Ct-veIand's Method Of
Dealing With That Large Surplus-
The New York Journal Of Cori-
MERGE. under date of j ly Il. 1872.
makes full and fair reply to Il North
Cafoiinian who wrote to that paper
for review with reference to that
part of Cleyeland's administration
upon which he has been attacked and
abused by the more impetuous and
ardent leaders of the Farmers Ali
ance. The question and the answer
are given herewith
TARBoRo, \. G.. July I, 1892.
Editor of the Journal of Commerce:
Alliancemen have been prejudiced
against Cleveland by the charge of
the reform press that he is under the
domination of Wall street. referring
particularly to the course of his
administration in the purchase of
government bonds and the depositing
of money with certain banks of New
York to avert panicS or severe cOntrac-
tion of the currency. Will you please
review this feature of his adminiStra-
tion and say whether or not the above
charge is just d. G..
REPLY.-Before the end of President
Cleveland's term of office there was IL
large and increasing surplus in the
treasury for which the government
had no need. This money might have
been wasted in extravagant appropria-
tions, used in the purchase of bonds or
deposited in banks for the use of the
people. The first and second of these
plans did not commend themselves to
the President. and he used some of the
money in the payment and purchase
of bonds. and some of it he placed on
deposit in national banks. 1t is in
cumbent upon those who object to
these methods to point out some bet
might have been made of the surplus.
1t is no answer to say that it never
should have been collected. because
Mr.. Cleveland was not responsible for
this, and he himself urged that the
collection of a larger revenue than the
government needed should be stopped.
During the last campaign the Demo-
cratic President and Secretary of the
Treasury were criticized very sharply
by some Republican speaker for keep
ing public money on deposit in nation
al banks, but the Republicans had
made the same disposition of public
funds before and have done it since.
The deposits are made under au-
thority OF section 45 Of the National
Currency act of June 3, 1864, as fol-
lows:
s.All associations under this act,
when designated for that purpose
by the Secretary of the Treasury,
shall be depoSitarieS of public money,
nir.fc fpnr do
such regulations as may be prescribed
by the Secretary, and they may also
be employed as financial agents of the
government and they shall perform
all such reasonable duties, as deposit
aries of public moneys and financial
agents of the government, as may be
required of them"
The Secretary is further authorized
and required to demand of the banks
sufficient security for the safe keeping
of the money, Shy the deposit of the
United States bonds and otherwise. :
From the passage of this act until
1885. all Presidents and Secretaries OF
the Treasury were Republican, and
there were government deposits in the
national banks all the time, the
amount sometimes reaching three OIL
four times that on deposit during Mr.
Cleyeland's administration. In this
connection the following extract from
the first annual report of the Treas
urer of the United State under Pres.
Harrison'S administration is worth
reprinting:
1.-THE amount of public moneys held
by depository banks ran down during
| the year from S5S, 712, 511 to S47 .259, IA
| the result mainly Of the voluntary
acts of the banks in SuFrendering the
deposits and withdrawing theiI
bOndS.''
This extract shows that the Repub
| lican administration, with ample
power to remove the deposits entirely
had failed to do so; that such reduc-
tiOn as was made arose mainly from
the voluntary action of the banks
| themselves, and that the banks are
| not so anxious to keep these deposits
as they are often supposed to be. As
| to the purchase of bonds, it is Sutfi
Gent to say that this was done as be
| ing one of the readieSt means of put
| ting the surplus into circulation again
and that the succeeding administra
| tion pursued the same policy. The
| fact is that there is no perfectly sat
| iSfactory way of dealing with large
surplus. President Cleveland in hi.
| messages frequently deplored the fact
| that he was compelled either to buy
bonds not yet due, to make deposit:
| in national banks. or to keep the sur
plus lying idle in the treasury, and ht
urged Congress to make such change:
| in the taxing laws that no surplu:
should be accumulated in the future.