Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-02-24
THE ALDRICH BILL
ONE FEATURE WOULD WORK IN
JURY TO THE PEOPLE.
The Provision to Tax National Banks
on Deposits of Government
Money.

Mr.. Jas c. Hal1ock who was the author
Of the plan to bring out-of-town checks in
New England through the clearing house
In Boston, Is opposed to one feature of the
Aldrich bill introduced in the Senate on the
9th instant. In speaking on the subject
today he particularly protested against
the following provision for raising reve-
nue.: National banking associa atoms having
on deposit public money shall pay to the
United States for the use thereof interest
al the rate of not less than IL per centum
per annum, such rate to be fixed from time
to time by the Secretary of the Treasury
who pays the interest? Nominally the
hank, really its customers. Reduction Of
taxes Is supposed by some to be the proper
order OF the day. In 1901 and 1902 Congress
passed laws to reduce the internal revenue
$1OO. 600 600, but owing to the increase of
revenue from taxes not affected the net
reduction last year was only $S5,OoO.OoO
Here comes a bill to increase internal reve-
nue. taxes at least $2,250,O00; that is. at
least IL per cent of $3.50 600, 600 on deposit
In national banks. The banks would get
Somewhat more out Of their customers.
Taxes Multiplied by Taxes.
1.-The whole amount of S15O,00O,0O0 on de-
post has been raised by taxation; and now
it is proposed to make these taxes for which
no present use is found produce more taxes
of which there Is still less need. 1t would
be overtaxation superimposed upon over
taxation, taxes multiplied by taxes.
Suppose a bank has United States de-
posts secured by per cent bonds and pays
IA per cent interest. Practically the bank
would return the interest on the bonds to
the government. At present national banks
are sorely pressed by the competition Of
trust companies. Holding public deposits
without interest Is a slight advantage to
pXaptipn interest
government would be a disadvantage which
only the enemies of national banks would
wish to see them placed under.
The Aldrtch bill not only requires inter-
est on the deposits In addition to security,
but also gives the United States a lien on
all assets Of banks in which public moneys
are deposited. The government Is to have
collateral interest and preferred claim.
There should be some thought Of the people
who would pay the interest or more, and
whose claims bank should be as good
as the governments. People receive no
collateral to secure their deposits. Only by
the neglect of public officials would the gov
eminent ever be without ample security. If
through contributory negligence the col
lateral falls short, the bill would permit the
government to make up its own deficiencies
out Of assets which would properly belong
to other depostors Not only the interest,
but also the amount Of any deficiency is to
come out of the people who deal with the
banks
Not All the Wrong Threatened.
THAT Is not all the wrong with which
people are threatened Unless these deposits
are to be perpetual $3.50 900 900 will at some
time have to be withdrawn. The loans
based on them and made to the people will
have to be called in. With prudence and
'sagacity all this can be safely DONE On
the other hand, indiscriminate withdraw walls
Of these deposits might precipitate wide
spread commercial disaster.
The Aldrich bill would be exceedingly
useful If curtailed and confined to the scope
OF Its title-the safekeeping Of public money
Unquestionably the Secretary of the Treas
ury should be authorized to accept as Sc
curity, besides United States bonds. such
state, municipal and railroad bonds as the
bill prescribes. Interest on deposits could
not make their keeping safer; and if a lien
on all assets could, 1t would be only because
the Secretary had not been sufficiently eau
tious and vigilant In the retirement of Sc
curity. As the interest and lien would be
detrimental to others, both should be strick-
en- from the bill ~