The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-06-04

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viii a. though; and obvi tislv u will not
fe1uir' many trans otioni " this sort.
tab N n nnnantion with u heavy ~.
potla. 10 IL = our foteisn ofciiis IN ~ich
SHAPE thit ~, ste lin toh nee market
later In The seia,h will 10 In good shape
" ON otir point NJ view w bankers,
therefore. ~ y rule are more optimistic
regarding he pr, habl money situation
In the fall n the yea han they lave been
for a long time.
Tho issuance of an order by the Treasury
Department during the week dlHcon,in,ing
tho policy adopted by tho Department sir
weeks ago or making advances ~ public
money 10 any national bank importing gold
pending tho arrival here Of the gold involved
In the transaction calls for final ommen
Upon this remarkable action. Tho move
was at first fayorably received In banking
circles because II was held that the Treasury
Department was doing no more than the
great national banks Of foreign countries in
making In substance an allowance ri inter-
est on gold taken In other countries for i'm
port. But II soon came TO be the feeling
that II the step In question was to represent
a mere temporary expedient OF the Treas
ury, TO he modified, discontinued and again
put In practice at various intervals and with
out notice, only harm could result from it.
The transfers Of money from nation to ma
ton, or from city to city In our own country,
may DO compared to the circulation Of the
blood in the human system Anything that
deranges this circulation or interferes with
it In an external or artificial W is bad.
although II can be understood that If the
so-called arrangement is Of permanent and
stable character the situation may in a way
adapt itself to the circumstance Under
the Seoretary's ruling banks we're allowed
to receive cash from the Government as
against imports Of gold engaged in places
as far distant as Australia; and certain
banks have had the use of Government
money without interest for n month pend
ing the arrival Of gold engaged in some
remote quarter Of the world or during
curious delays in shipping gold here from
London or Paris. The Secretary's order
was, after a time, suspended. relaxed again
IN favor of a prominent local national bank
ing institution, and then once more sus-
pended. As it now stands the order is not
in force, but no one can tell how soon it may
be, and in such a way that some particular
bank will be a gamer byit to the disadvan-
tage of its competitors; and as a result
those dealing in foreign exchange are COM
PEELED to transact their business with much
uncertainty. The matter brings up for re-
view the whole question OF the ACCESSIBILITY
of continuing in its present shape the inn
mense power Of discretion vested in the
Secretary Of the Treasury. or assumed by
him, OF meddhng in an irregular way with
the delicatcly poised banking and financial
affairs Of the country. He can, as things
stand now, draw millions Of money out of
the banks at one minute, place millions of
money there the next minute, and favor
such banks as he chooses In these opera
tons. He can elevate or depress for
eign exchange rates according to his whim,
and can likewise make domestic money
rates strong or weak at his pleasure.
All this il a dangerous state of affairs.
and if such authority as this Is actually
legally granted to the Secretary of tho
Treasury, as many people doubt, it should
be restricted or at least closely defined by a
plainly worded statute. The most natura
way to restrict it would be for Congress to
pass a law requiring that all public revenues
as they are received, over and above a
small amount left in the physical pos
session of the Government, should be
continually deposited with the national
banks, not to be withdrawn except for
Government uses. There would he no
temptation then to any Secretary of the
Treasury to try to be forever attempting
to adjust the country's money market in
accordance with his own ideas OF fitness.