The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1904-12-07
SH.A W SHOWS NEED
OF MORE REVENUE
Secretary Of the Treasury Deals
with Deficit in His Annual
Report.

| II I. = .
Washington, Dec. 7.-Leslie M. Shaw,
secretary OF the treasury, mas added his
warning to that of Speaker Cannon,
That decrease In revenue in proportion
to expenditures must be borne in mind
IN n futqre appropriations, and legisla-
, lion. lis annual reporttsiss issued to-
| day, ana touchlng ontreYenues, he says:
We're $2S, 100000 less than in the sprevious
year. lille there was a further sreduc
tlon during the early months of the pres
/ ent hscal year, these receipts are now in
4 creasing, and there is no reason to believe
the revenues for the year from this source
Will be less than in 1904 The falling off
IN 1904 over that of the previous year was
due more largely to abnormal conditions
in 1903 than to depressions in 1904 There
was collected, for instance, in duties on
iron and steel and manufactures there
of s170Oo.OO0 during 1903, and only SO, OOO,-
900 during the last fiscal year. This
difference is. accounted for by. demand
Tor IRON and steel products in excess of
the capacity OF American factories during
the former year, which is not likely to be
repeated. ~
Other Causes of Decrease.
Three other causes contributed, to the
failing Off OF customs revenues in 1904.
First, the abolition of the war tax on tea
which caused a loss of over 2,OOO. 900:
second, the abolition of the gcountervailing
duty on sugar, which resulted In an esti-
mated reduction of over $500, O0O;s third,
the reciprocity Etreaty with &<Cuba which
caused loss to the customs revenues of
the United States estimated at s5. 375 o0O
on sugar and $2,215, 600 on tobacco.
1t is also worthy Of note that there ha q
been constant Increase in the relative
proportion of free over dutiable goods.
The total imports Of merchandise during
October, 1904, was little over s92, 900 O0O
as against a little less than $S2 900, 900 in
the same month of the preceding year,
but practically this entire increase was In
free imports. During the first ten months
of the present calendar year, free imports
Increased; in round numbers $29, 900, 900.
while dutiable imports decreased s26,-
600, 900.
Internal revenue receipts show a slight,
tho 1mmater1al increase in 1904 over 1909
Miscellaneous receipts collected during
the current fiscal year show an increase
to date of over $3,000,O00. This is more
than accounted for, however, by the pay
ments made by the Louisiana Purchase
Exposition company, * ..-... ~"
| The profit heretofore derived from sill
yer coinage has become unimportant.
! The >seigniorage yielded over SO, OOO, 900 in
| 1902, s6,000,000 in 1903 less than S., OOO.-
900 in 1904 and during the current year it
| is not likely to exceed 100000.
Economy Is Necessary.
From the foregoing review it is evident
that the policy of public improvements
can not be enlarged upon without pro-
! V1dlng some, measure for a corresponding
| increase in revenues. There is no oppor-
! tunity5 apparent to this department where
! greater economy in administrative de-
| partments can be practiced without in
| jury to the public service, and economy
which Injuries the public service is par
| simOny and not economy. 80 go
The report says the total receipts for
1904 decreased $40, 4Q6,743.90, while the
COMPARED viii the fssafyear 1908. The
governme n at aefcitesa &S1, 77Q,57L91.
535sa IS s. Non-Elastic Currency. 4
Taking up the subject of theSScur-
renc,Y, Secretary Shaw deals with its
! son es$ recognized Weakness as fol
lows: .s:..%.:r =
( Our currency system, tho somewhat
Ecomp1icated, has beeh proved safe and
Ereliable under every practical test. The
. exchange Of gold for all forms of money
j issued. or%coined by the government on
. demand, authorized by. act of congress
approved March ID, 1900, removes every
suggestion Of public E5distrust or doubt
4 The system has one. recognized weak
ness, - however; it is non elastic. This
criticism Is sometimes answered by the
statement that national banks possess
the power to increase circulation at will.
Actual experience demonstrates the in
sufficiency Of this prerogative to cor
rect the recognized evil. Banks are not
likely to use their last $780, 900 reserve
| in the purchase of government bonds
as a basis for an equal amount of cur
rency not available for reserve, but which
| increases to that extent their liabilities.
On the contrary, banks sometimes retire
| their circulation and sell their bonds for
the purpose Of replenishing reserve and
reducing their liabilities. During the sum-
mer. months Of the current year, bank
reserves increased and interest rates were
CORRESPONDENCE low, but this very pie
thora of money resulted in an increase OF
national bank circulation. When reserve
money is plenty, interest rates low, and
the price Of bonds normal, it is profitable
for national banks to maintain circula-
ton.
Evils in Trust Companies.
- Secretary Shaw sees an element of
danger IN the trust companies Of the
large cities. He shows, as examples
, that the New York trust company de:
posits have increased 24O per cent in
ten years, while bank deposits were in
creasing 100 per cent ;and Chicago s
similar comparison shows 1,400 per cent
trust company deposit increase against
ll5 per cent bank deposit increase. He
continues:
1t is manifest from the foregoing data
that these institutions in our great cities,
helpful as they have been to American
| development and commerce. unless con-
servatively managed, may become an ele-
ment of danger to our financial system
They are already national in character
and several Of them are Of international
influence. I suggest the propriety, there
fore, of law giving trust companies
of large capitalization in large cities the
privilege of Incorporating under federal
law, with corresponding supervision. II
such right We're extended. the more con-
SENTATIVE would probably avail themselves
thereof, and this would compel others
to cultivate conservatism. 1t would not
be necessary to extend to them the dis
t1nct1ve prerogatives Of national banks