The semi-weekly messenger., 1907-11-26
HasrY GOVERNMENT FINANCING

in the financial question. People want
10 read what the best editors and the
; leading financiers have TO say on the
money question. Therefore We gi7e
up our editorial space today TO an Ell
itoriaI from the New York Journal O.
Commerce on the financial situation,
dealing chiefly with the action Of the
treasury department in issuing the
fifty million dollars Of Panama canal
bonds and the hundred million dol
lars of government certificates OF iu-
| debtedness for the purpose of relier-
| ing the present money stringency. 1t
Commerce does not attribute present
| conditions so much to the boarding OF
money as to the sluggish movement
| of currency on account of impaired
| confidence. That paper doubts that
| the issue of the 3 per cent certii-
Gates of Indebtedness will draw out
much of the boarded money. We Go
| not presume to differ with or to agree
with the editor of the Journal of Com
merce in his views on the subject. We
simply give to our readers what he has
to say on the .subject and let them
form their own opinions. All we can
say is that we hope the action Of the
| president and secretary of the treasury
| will have the good effect on the linan-
cial situation that it was intended to
| have. The article of the Journal OF
Commerce follows:
Nothing could be more anomalous
| than the present financial situation in
| this country and the measures taken
by the government for its relief,
| chiefly 1ue to false ideas nOurished
| for forty years by bad currency sys-
! ten, adopted in the tremendous emer-
| gency of civil war. Here is the gov
| ernment with a surplus of $240, 600 900
on it's hands, extracted from the sub
| stance of the people by an intolerable
| tariff. proposing to borrow in haste
! $50, 900, 900, not yet needed, for work
| on the Panama canal, for the purpose
| of expanding a bank currency made
| rigid by law. and S10O,00Q,000 more
on shOrt-time notes for no earthly pur
| pose except to draw money from pri-
| vate boards or from abroad to swell
| a volume of currency already too
| great. Both measures are OF more than
| doubtful legality. With the immense
| surplus on hand there should be
| TO need Of borrowing for the work go
| ing on at the Isthmus and borrowing
| is authorized by the Act Of June %,
! 1902, only as the proceeds may be
| required to defray expenditures au-
| thorized by this act" which proceeds
: can only be used for meeting such
Expenditures" Assuming that the pro-
ceeds of bond sales are "reuuired' for
| these expenditures while 1here is such
| an excess Of funds at the command
I of the government already collected
| from the people, they are not requir-
| ed at present, and the issue of bonds
| is authorized only ''as the proceeds
| be required If the legality Of this
| anticipation of future needs IS more
| than questionable, the issue of the
proposed per cent, notes is beyond
! question without legal authority. In
| the Act Of June 13, 1898, ITO provide
ways and means to meet war expendl-
lures and for other purposes" the
1
| to borrow at not more than 3 per cent
| on Certificates of Indebtedness "such
| sum or sums as in his judgment may
| be necessary to meet public expend1-
| tures" The pretense that such bor-
| rowing now is necessary to meet pub
| lie expenditures is too absurd to be
| treated seriously, except for its mis-
| chievCus effect, and II it Is necessary
| for that purpose in the judgment or
| treasury,
| it only shows that his judgment is ca
pable of being sWayed to any arbl-
| trary and illegal action which he
| merely imagines the circumstances TO
| demand.
| The most dep1orab1e phase Of this
| extraordinary proceeding Is the reVe-
| lation of the incapacity Of both the
| secretary of the treasury and the pres
| ident Of the United States to compre-
| hend the situation with which they
are dealing or to appr eciate the cOnse-
| uuences Of What they are doing. incl
| dentally it illustrates the danger OF
| elevating to the position of the head
! Of the treasury department of the
| government a mere amateur. neO-
| phvtc in finance, who has neither the
! natural capacity, the training nor the
| experience to qualify him for its du-
ties The presidents letter of ap-
| proval is melancholy in its exhibition
Of lack Of understanding and of grasp
in matters of momentous conse-
uuence to the people OF this country.
He says the government Will see that
the peorle do not suffer if only the
people themselves win act in a normal
manner" This is carrying paternal-
ism to the extreme, as if the govern
rent were omniscient and omnipo-
tent and the people were its grand
children, dependent upon it for all
their blessings and needing only TO
obey its voice and be good in order
to be prosperous and happy Crops
are good" says the president, and
business conditions are sound and we
should put the money we have into
circulation in order to meet the needs
of abnunding prosperity" This as
sumes that the private boarding of
money is the whole cause of trouble,
and that such boarding is utterly