The Penn's Grove record., 1904-12-16
TREASURY REPORT IssUEG
Secretary Shaw Informs Congress o.
the Nations Financial Standing.
Suggests d Federal Law For Ali Trust
Ccmpanies-The Deficit in 1904 and Its
CaHse-Report on Customs.

Washington, D. C.-Secretary of the
Treasury Shaw, in his report on the
finances of the Government, which
was sent to the House, suggests a law
giving trust companies Of large cap.
i~talization in large cities the privilege
of Incorporating under Federal law,
with corresponding supervision. On
this point he says:
Within the last few years trust com
panies have made a relatively much
larger growth N all the large cities
than national banks. There were
twenty-seven trust companies and for
ty-nine national banks in New York
City ten years ago. The same city now
has forty-seven trust companies and
only forty-one national banks. Ten
years ago the aggregate capitalization
of the New York city trust companies
was $26,400,000 ahd Of national banks
OF the New York City trust companies
are capitalized at S54, 900, 900 and the
national banks ct $1IO, 300, 600, show.
ing about the same relative increase.
But the difference in the growth of de-
posts is marked. Trust companies in
New York City held less than
$260,000,000 ten years ago and they
now hold more than 1915, 900, 900. while
deposits In national banks have in
creased from more than $3.50 600 600
to a fraction less than 81, 100. 600. 900.
Thus, trust company deposits show an
aggregate growth of SEA, 5000 more
than national bank deposits, and a
growth OF 240 per cent. as against 100
per cent. in national banks.
Other large cities exhibit similar con-
ditions. Many trust companies hold
commercial accounts and are regularly
engaged in ~discounting paper, and they
hold in the aggregate more than
$2,O00,C00,O0 0 in deposits. Few, if anv.
OF the States have any statutory re-
quirement respecting reserve, and few
of the companies are members of the
clearing houses.
l suggest the prOprie :, therefore. of
a law giving trust companies of large
capitalization in large cities the privi-
lege of Incorporating under Federal
law, with corresponding supervision.
Ii such right were extended. the more
conservative would probably avail
themselves thereof, and this would
compel others to cultivate conserva-
tiSm.
Here is what Secretay Shaw has to
say on the currency:
Our currency system, though some
what complicated, has been proved
safe and reliable under every practical
test. The exchange of gold for all
forms of money issued or coined bv
mo tNnNrnIsnT IA ont on, 49, IL
lzed by act of Congress approved
March IA, 1900, removes every sug-
gestion of public distrust or doubt. The
system has one recognized weakness,
however, it is non-elastic. This criti-
clsm is sometimes answered by the
statement that national banks possess
the power TO increase circulation at
VIII. Actual experience demonstrates
the insuficiency of this ~prerogative TO
correct recognized evil.
10 meet a demand or paper money
OF small denominations, l recommend
that national banks be permitted TO
issue a larger proportion of their auth
orlZed circulation in denominations of
five dollars, and that authority be Civ
en- to issue one-eighth of the aggregate
volume of gold certificates in denom-
nations of ten dollars.
The report shows that the receipts
from all sources ~ the fiscal yessr
1904 were S6Sf.2f4,373.7 "A. of which
$143, $50, 624.34 were postal revenues.
Customs contributed $261. 274. 564.S1
and internal revenues 1922, 904. 119.45.
i The expenditures for the same period
were $725, 1884, 945.6 6 the postal item
being the same as in the receipts.
This shows a deficit of S41. 77O.571.91.
The sum of 5 100000 was paid for
the right of way of the Panama Canal.
The navy cost $102, $50, 1O1.5 and the
military establishment $115. OBS, 41O.5S.
The pension item is $142, $50, zee. SO.
There is no opportunity apparent to
the Department where greater econo-
my in administrative departments can
be practiced without injury to the pub
lie service, and economy which Injuries
the public service is parsimony and
not economy. 1t is the opinion of the
Department that Il large sum could be
proftably invested in public buildings
within the District of COlumhia