The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-01-04
BAD SIXESS.

Every time that there comes a finan-
cial furry or a bit of unusual business
depression We are reminded forcibly of
the bad business policy of using de-
posts of state and city funds to build
up and pull down private financial in
slitutions. The impolitic and improper
plan prevails at present of CARRYING
big cash balances belonging to the
local or the state government over
from time to time, and the net result
is the same as a very large standing
deposit Of public money in various in
situations. This becomes a thing 10
be coveted and fought for, and its dis
posal interferes with private business,
as we'll as with good political manage
ment Not infrequently banks have
been started without any business war
rant, and for no other purpose than
because their promoters believed them
selves able, by their political influence.
to secure a big slice of these public
fund.-. Obtaining this at a low rate
ing il to borrowers on the usual hank
terms. they could see a comfortable
income assured. Other institutions
t&at have already established a bust.
ness Of their own are equally anxious
to add to their profits the revenue
from all public funds they can get into
their Golfers.
This use of funds being great bust
ness advantage, the demand is made
that all parties must be treated fairly.
and that the peoples money must be
scattered among dozens of banks
Tn 2ughout the state so that favor
itism to individuals and to sections
cannot be charged. The working poll
tcians make good use of this, and the
disposition of treasury moneys ALWAYS
plays prominent part in political
campaigns. The promise of a good
share of deposits or the threat to with
draw them may make difference be-
tween profit and loss So the whole
scheme is built up, legitimate business
Is interfered with, more or less money
is placed frequently in injudicious
hands and, although state and city
governments take care of their own in
terests, usually, by making their claims
preferred, more or less of the funds
are tied up in insolvent institutions,
and unwise and indiscriminate loanine
is rod
people so large an amount Of money
for which there is no present use.
1t seems to us that one Of the re-
forms Of the future VIII lie in closer
adjustment to one another of income
collecting and debt paying on the part
OF cities and states. 1t is a bad thing
to have these big balances on hand.
They withdraw, Temporarily, money
from active circulation which can be
got back again only by forcing loans,
whether wise or not; and when such de-
posts have to be called for by a state
or city treasury their removal compeIs
such contraction of loans that
their transfer may disturb the
business relations of the whole
community. It ought to be pos
sible. it seems to us, for instance.
to have a city divided into, say, twelve
tax collection districts, in each of which
taxes should fall due in a different
month of the year. If the income from
real estate and personal property taxes
In city were divided into twelve equal
portions, and the city was so districted
that one of each of the twelve tax-pay-
ing districts hould turn over. its levy
to the treasury each month, then the
funds would flow in and flow out with
regularity, income and outgo would
balance each other naturally, and
there would never be any great surplus
at one season of the year and poverty
at another.
Governments Of whatever sort have
no business with a surplus They have
no right to collect from the people one
dollar more by taxation than the actual
expenses Of the government economi-
cally administered. This amount, how
ever, becomes very great in old and
populous communities. The annual col
lection and distribution of it are apt to
make financial fluctuations serious and