The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-01-19
4 pREPOsTER0Us SUGGESTION.

1t is not wholly out of keeping with
the idea that you can make something
out Of nothing by legislation to have
the suggestion actually made and COM
mended in this state that Minnesota
should take care OF its public funds by
constructing at the capitol a great
vault where the states deposits may
repOse in safety. The idea is fathered
by the fact that certain state funds
have been put in the care of banks
which afterward went into liquidation
and could not be got out for some time.
AS preventive Of this in the future,
some of our sagacious statesmen pro-
pose that we dig a hole in the ground
and bury the cash. This is precisely
the same notion which animates the
unlettered peasant, who hides his little
hoard in the thatch Of his hut or hole
in the wall, and would no more trust
it to the strongest bank in the world
than he would hang it from the Dough
OF tree to tempt every passer-by 1t
is, as we have said, fair companion
piece for the Is to l nonsense
In the first place, the circumstances
Go not call for any such precaution as
this. The state does not lose money by
having deposits in banks that meet
with misfortune, and no circumstances
short of the actual criminal lootine of
a banks entire funds could cause it to
happen. The state is a preferred cred
ltor and whatever comes out of the
banks insolvency belongs first of all to
it. This is practically sufficient secu-
rlty against loss. Were it not so. how
ever, the suggestion of guarding
against misfortune by putting the cash
IN steel box and locking it I'D is not
merely preposterous, but the worst
thing possible for the community. It is
what our Populist friends call contract
ing the currency" with a vengeance.
This money, whatever form it NAV
take, is a part Of the cash ordinarily
circulating in this community, and used
as a tool with which business is carried
on. 1t is collected by the state in the
form Of taxes and other revenue
1t is taken, temporarily, from the uses
OF the people only in order that the
STATE may make it serve its uses, and
pay 1t out again forthwith for the neo-
pies service once more. Deposited nv
the state in several banks with good
security, it serves, as money tha ean,o
uses that it did in the hands of it's
original holders. The bank loans if n
private borrowers, establishes a credit
against these deposits, and thus thew
pass back, prior to their distribrtiop in
salaries and to meet appropriations, to
the service of the public 1t is not with
Drawn from our working capital and
all the communities in which deposits
are made have the benefit of the states
money which is also their money, dur
ing the period when it is in transit
= 1reEh the taxpayer through the state
treasury back to the taxpayer again.
rake, now, this currency and lock If
UP in vault at the capitol. wbi1a +ba
effect upon the actual volume of circuIa-
ting medium would hardly be notice
able, the effect upon the banks re-
sources, upon their ability to loan. and
upon the ability of the borrower tn pet
credit even on good collateral would
be very serious. This entire amount
OF money, whatever it may be. would
be subtracted from the working capita1
OF the people Of Minnesota. and in
stead Of being proftably and product
lvely employed, would lie inert and q
charge upon the state 1t is precisely
the same as If the state were to take q
certain portion of the cattle, horses and
machinery of it's farmers and lock
them UP somewhere during a nor
ton of the year when they were in
active demand, paying for their Gus.
tody and forbidding them to produce
anything valuable. It is precisely as il
the state were to take a portion of the
boots and shoes or dry goods or gro
ceries in the community and store them
in vault, forbidding them to be
bought, sold or used as a basis for
loans during six months Of the year.
What we ought to have, as the