The sun. [volume] (New York [N.Y.]) 1833-1916, 1898-10-03
.ao,r rrnr oorrrSnrSr BoSDs

=, as this break nlu' thdt " thV p'O'
=" imerlcan Sugar. and being mpa oy
.dou, reports unfavorable to other indus.
w.; snt.rprises. prices declined all round. n
u. volume Of dealings. except In Tobacco
s~..r and Manhattan. contracted CONSIDER
S. II IA needless 10 say. that the only SUI
~. y. b, tho shrlnkage in quoted values, are
-, who have bought stocks on credit n
han compelled to sell them for less than
Az gave. Investors who have paid casb tor
~ purchases. and are satisfied with shem.
n not seem TO be alarmed at the OUTLOOK.
Ths payments for the rev S~20O.ooO.oOO Gov
..ment loan have, II Is said. been completed.
"a aimee tho Government cannot muoh longer
S.,,r liauidatIng the debts II has Incurred Tor
~, .,penses. tho Treasury must soon begin
a disrorRe n considerable amount OF the
- II has been absorbing. The prepay
s,nt Of the bond interest due Nov. 1 has Also
~ announced. and this. with the redemption
"a ADVANCE OF the Pacific Railroad bonds du
~ ! viii add somewhat 10 the resources OF
.r hanks. Furthermore. all the news from
~. west is TO the effect that the farmers there
AVA holding hack their crops. so hat less
Dorsy than usual Is needed in that section.
ina imports OF gold continue. and fresh pur-
,h,.es OF the metal in Europe for shipment to
ria country are reported. The prospect Is
,hsraiore. that we shall soon have q plethora
a, money rather than a scarcity OF 1t. and. In
ihs absence Of any now unforeseen demand,
,hs rates OF interest must decline.
Nevertheless. q reform in the financial meth
ods OF the Government is necessary, II tho
Tr..sury is not to continue to be. as 1t Ia now.
4, ~ireauent disturber OF the money market
. .heck upon the operation OF natural financial
tt- .. 81 -annnv ruhfOh ~ nf-
,.ctsd from 1879 to 1893. was mitigated by ex-
,~snsive bond purchases. its deficit in 1890 n
100, was supplied by issues OF bonds under
uretence OF replenishing it's reserve forthe re-
aamption OF the Government notes. and. this
year, It's absorptions on account OF the war loan
have been counteracted by an unprecedented
balance Of foreign trade in our favor. which has
enabled us to supply ourselves from Europe
with the gold needed to meet the T~reasury's
dsmands, That we have thus three times
within a few years been saved by extraordi-
nary expedients, and by extraordinary good
luck, from the evil consequence OF a bad
Treasury system. is no reason for expecting
that we shall always escape in a similar way.
The natural and scientific method Of render
Ing the Governments financial operations as
little disturbing as possible to the business Of
tho county, 10 W CEtdNS q BEOAb puuA bLh
shall act as the Governments fiscal agent. as
the present small banks act as fiscal agents for
States, cities, counties and railroad and manu-
featuring corporations. Such q bank would
take on deposit the Governments receipts.
whether from revenue or from bond sales. and
lend them out to borrowers as other banks take
deposits and lend them out. and. thus. the
Governments funds would never be locked up.
L-ro~l kAA -1~ah@ ~ A..
business community. Since. however, the
establishment OF u national bank 10 opposed TO
the sentiment Of a majority OF u people. who
fear to intrust to n single institution the
power which this one would exercise. IL Is use-
less to strive for II.
We have therefore to consider. how. without
the creation Of a national fiscal agency in the
shape OF a bank. the prevailing Treasury sys-
TEN can be so modified as to prevent the lock-
Ing up Of Government money to which under it
the country is now exposed. Such q method 10
partially provided by the new War Revenue
at authorizing the recent $200.0oo.0 900 loan.
aud. fortunately. only the extent to which It
can be employed is limited in the act, but not
the period during which It will be available.
Section 80 OF the act authorizes the Secretary Of
the Treasury to borrow. from time TO time. at
. ioVo VI iutcIdSI " cActCuihB ShAOO poA
eentum per annum. such sum or sums as. In his
judgment, may be necessary to meet pub
lie expenditures. and to issue therefor
certificates OF Indebtedness In such form
Is he may prescribe. and in denomi-
nations OF fifty dollars or some multiple
Of that sum. and each certificate 30 issued
shall be payable. with the interest accrued
thereon. at such time. not exceeding one year
fnnm fha dafa ~ ita iaa,a ou kha 1onratnr~ -
the Treasury may prescribe. Provided. that the
amount OF certificates outstanding shall ut no
time exceed one hundred millions OF dollars"
In view of the expected long duration Of the
war and 1.-THE consequent great expenditures the
Government would be required to make. the
Secretary Of the Treasury very properly elected
to issue the long term bonds authorized by the
act, instead OF the short term certificates. re-
serving the certificates for a later exigency.
As matters have turned out. he has no occa-
sion. at present. to avail himself OF the certi1-
Gates, but his authority TO use them remains
unlmpaired. and will so remain Until the law
authorizing them Is repealed.
The manner in which this authority to Dor
row money upon short time certificates could
Be used to protect the money market against
the strain to which It Is now exposed by the
'" Nv AIooSuIJs lo$Iulbs WuoION0E
the Government needed more money than its
current revenues supplied. 1t could issue the
certificates. from week to week. to the amount
Of the deficit. The money 30 procured would
% dlSoursed almost Immediately In payment
athe Governments obligations. thus return
ing TO is original lenders, who would for the
most part be banks and other financial ~institu-
IONS, and then the process could be repeated.
beyond this. 1t could issue. in exchange for an
squal amount OF long bonds redeemed. say
SiooOOO.OOO OF these certificates Nj redeem
mem only when it had q surplus OF revenue
over expenditures. Thus. 1t could go on issu-
ing the certificates. when 1t was short OF cash.
sna calling them in when it had a surplus.
siVOOOO.OOO Of them being. on an average.
Always outstanding.
inc scheme here suggested Is not new and
sn'Fled' The city, now borough. OF New York
n.s' tof many years, anticipated the collection
%ms annual taxes by the issue OF short-time
OoiEatons, in the form of revenue bonds.
SUI 'he British Government regularly sells in
me open marketfor revenue purposes what are
Nned Exchequer Bills. which run for one year
Suy, VI course, at thiBm moment. with an over
lowing treasury. and with q mass OF unsettled
Naims against it. our Government could not
%a'enlently put the scheme into operation.
wi When all the expenses growing out OF the
var nave been paid. and the Treasury settles
own into a permanent routine. its execution