Sunday Washington globe., 1902-06-22
A Robber system.

On the 10Th day of Juhe, 1902 there was
on deposit in the National Bank Deposito-
ries throughout the United States a fraction
over s126, ,ooo,o To secure that sum the
banks have deposited with the Treasury
Department interest bearing bonds. The
Government therefore is amply secured.
So far so good That looks like a success
full safeguard of Government funds. There
is however another phase of the situation.
Who profits by this state OF affairs7 The
Government though secure gets no interest
on its deposits, therefore the repositories
have all of the SI26, 5000, 900 which they
loan to the people and receive interest
thereon. The Government pays them in
terest on the bonds they deposit to secure
the money deposited with them, and with
the interest they receive from this money
which they loan to the people they have a
double source of revenue for them Quite
a profitable system of finance for the banks,
the favored repositories. But how are the
people who pay the taxes to keep up such
a system, benefted2 So much money drawn
from them, more than is needed, even
Win ALE E4AAaNuka4 dHHAUkA AaAA0l4o N4 lAA@
present day to pay the expenses of Govern
nent, aud loaned back to those who are
able to give security. It is pleaded in ex-
tenuation of such a system that it is
better to deposit the money and let it be
loaned out to the people than to keep it
lying idle in the Treasury Department or
subtreasury. So il is, but would it not be
still better to reduce the taxes and let the
$I26, ooo, 900 remain in the channels of trade
and allow the people to spend their money
as they deem best and not compel them to
pay interest 10 pet banks upon money
wrung from them by exorbitant taxation?
Is il any wonder that there are populistic
organizations and granger societies when
men thus see their money taken from them
by high tariffs, and loaned out again and
they receive no benefits.
One Of the banks profiting by the system
IS the National City Bank Of New York. It
has or had fraction over sI4, ,ooo, 900 of gov
eminent funds while Gage was Secretary of
the Treasury. After Vanderlip retired from
his position of assistant secretary Of the
Treasury he was made seventh vice.presi-
dent Of this self same bank. Was the ap-
pOintment made to reimburse for past
favors? Think of the possibilities! Four
teen million dollars loaned out at the small
sum Of 4 per cent would realize $500, 600 per
annum profit to the bank. One-half of one
per cent on the SI4, Ooo, 900 would realize
$4,000. That amount, VIZ, SO, 900 could
be given to the Secretary Of the Treasury
and his assistant and still allow handsome
profit TO the bank. It is not charged that
such thing was done because it is not
known that il was done, it is only the possi-
bility shown. Bnt after the shady transac-
tions between the bank and the Treasury
Department in the custom house scandal,
and the appointment Of Vanderlip to a
seventh vice-Dresidency it is safe to assume
that neither he or Gage lost any money in
the several deals and loans made.
What was done OF might have been done
with other banks is, of course, not known
but with such vast surplus collected from
the people above the needs Of Rovernment
the possibilities for peculation are great.
Some men are not too good to take advant-
age OF such a system. Would another sys-
TEN which reduced taxation and allowed the
money to remain in the pockets Of the peo-
pie to be spent as they saw fit answer just
as well2 For the Rockefellers and the
Cages perhaps it would not. For the toilers
who pay the taxes it would answer every
laudable purpose.