The Washington times., 1901-10-13
The Treasury Surplus.


The Treasury Surplus.
Secretary Gage is said to have worked
out plan in his own mind whereby the
United States Treasury may be relieved
of it's unnecessary surplus. The idea is
to loan it to the national banks upon
the security Of their general assets, the
banks to pay interest for the use of the
money. The question of the constitu-
tionality Of such a scheme opens up an
almost bQundless field for discussion,
| for if it is constitutional there, of
course, is no limit to the amount Of
money that can be drawn from the peo-
| pie by unnecessary taxation. and then
| loaned out to the banks. Such course
! certainly contravenes the spirit of our
organic law, if not its positive letter,
| But this question apart, it is to be re-
| GREETED that Mr.. Gage is unable to de-
/ wise any plan of monetary reform that
| does not in the most direct way confer
| special privileges and advantages upon
certain classes. With him no class
stands higher than those engaged in the
! banking business, which is natural
enough in view of the fact that he him
self was a banker for more than forty
years. Bankers, as a rule, are good and
/ deserving people, and banking is a val
liable agency in modern business. But
the fact should not be overlooked that
! it is merely an agency after ali. Bank
| ing, in itself, produces nothing. If the
worlds great productive industries were
suspended, there would be no use for
hDln x-Gra Ia
melt away. On the other hand, people
| could live, labor, and carry on business
without banks. although it must be ad-
! mitted far less conveniently. No one
who has a proper appreciation Of mod
ern business would think of dispensing
with banks.
But it does not follow that the
| finances of the country should be run
! upon the theory that banking is the pri-
mary business and everything else sub
ordinate. This appears to be Mr..
| Cages idea. He assumes that the
| banks are the fountain head of all busi-
ness, and that if they can only be
| favored and strengthened, the benefits
| will overflow and bless the entire ma
ton. That is the argument always
made on behalf of bounties and special
! privileges. Those who are the imme-
date recipients are only TO be the con-
duits through which the benefits are TO
reach the great body of the people. 1t
is almost impossible to imagine a
scheme of public plunder that cannot be
defended" upon the alleged ground
that there will be an ultimate distribu-
ton OF benefits.
Thus it is with Mr.. Gage in dealing
with our national finances. He would
allow the banks to issue circulating
notes upon their general assets, the
value of which is constantly fuctuating.
and he would loan them money from
the Treasury upon the same neeting and
uncertain security. The plan in its en-
| tirety amounts to just this: The Gov
| ernment first collects more money in the
form of taxes than it needs, then it loans
the surplus TO the banks at d certain
rate of interest, and, lastly, the banks
loan it out again at higher rates to such
of the people as can furnish gilt-edged
| security.
There is no reason why the bankers
should not favor such a scheme as that,
and doubtless the most Of them do
From their business standpoint, it
would be foolish in them not to give 1t
| their cordial support. But how about
! the great body Of the taxpayers, who
are neither the owners Of banks nor in
a position to borrow from such institu-
tions? These constitute about ninety
! per cent Of the population in every COM
munity. and it is reasonable to suppose
that they may have some objections.
! With these people more logical and,
| at the same time more equitable meth
cd of disposing Of the surpluo would be
not to collect it, but to leave it in the
pockets of those to whom it rightfully
| belongs.