Watertown weekly leader. [volume] (Watertown, Jefferson County, Wis.) 1906-1908, 1907-05-31
R|DCELY URGES
CHANGE IN LAW
WOULD PUT TREASURY CLEAR
OF THE MONEY MARKET.
USE OF BANK CREDITS
In Address to Detroit Bankers the
Comptroller of the Currency Out
lines System He Thinks
Would Remedy Abuses.

hluSSly, VI lhO Sui ShSs,
spoke of THE Relation of the Treas
ury with the National Banks" Ee
said in part:
THE best way to handle the collec-
tions and distribution of government
funds is through the banks in which
the business of the people is transact
ed. The passage of the act of March
4, 1907, or the so-called 'Aldrich bill,
makes it possible to- take a long step
in this direction, by leaving the reve-
nues of the government in circulation,
instead of collecting cash and storing
it in treasury vaults.
The most constant and serious
complaint which is made of the work
ing of the treasury department, in it's
relation to the business of the country,
is that the treasury is always in the
money market as a disturbing factor;
that it is continually taking money out
of the regular channels of trade and
locking it up in it's vaults when it is
needed in circulation. To correct the
conditions resulting from these opera
tiOns, the secretaries of the treasury
have for years found it necessary %
adopt varying expedients to put the
money back into the hands of the
people. These different measures are
generally put in force only when the
bad effects of the treasury operations
have accumulated until the money
market has reached an acute condi-
ton, and frequently when the stock
market, which is the most apparent
indication of financial disturbance, Is
in panic, and there is danger that
the resulting liquidation may spread
to the banks and general trade, and
assumes such proportions as to be a
dangerous menace to all kinds of busi-
ness. When action of this kind has
to be taken, there is always more or
less criticism; the secretary is ac-
cused Of acting only for the relief Of
Wall street and stock market gam
blers. The fact that stock market con-
ditions and declining stock quotations
seem to be the occasion for the action
necessary, and that the relief given, if
adequate, must at once restore stabili-
ty to stocks and possibly is made the
basis of their advance, gives confirma-
ton to the charge that no one is
helped but the stock speculator. 1t is
hard for the average business man to
appreciate the effect on his business
of stock market conditions and to diff
ferentiate between the gambling of
the few men trading in margins and
the vast volume of transactions which
determine the real value which are
the basis for SO large a proportion of
loans and credits, the disturbance of
which may at any time produce results
which will bring panic and disaster to
many or all lines of business.
Law Has Done Good.
Under the laws which have been in
force for many years, the receipts
from internal revenue have been de-
posted in National bank repositories,
daily, as received, but have soon been
taken out from the banks into the
treasury, only to be redeposited in
emergencies. The act of March 4, 1907,
now makes possible the deposit of all
the government receipts in the banks,
and in this way both internal revenue
and the custom receipts can be left in
circulation.
"It is possible under the law, and I
think highly desirable, to go one step
farther than this, and collect the reve-
nue. mainly in bank credits, without
the use of great deal of the actual
cash at all, and thus avoid the neces-
sity of ever withdrawing single dol
lar from actual circulation until need
ed, or it can ge promptly paid out for
expenses of the government. This can
be done by allowing the collectors Of
both classes to receive, in payment Of
customs and internal revenue, certif1-
Gates of deposit on banks, which are
designated repositories of the United
States.
Little Financial Disturbance.
while in any depositary bank, or
being transferred from one to another,
the funds would be protected by de-
posits of bonds, and be as absolutely
safe as if in the treasury vaults What
ever Encouragement there might have
to be between bank and bank and
city and city, there would be no change
whatever in the total amount of money
in circulation, and, therefore, there
would be the least possible financial
disturbance as the result of the pro-
cess of collection of its revenues by
the government.
Let the treasury get clear of the
money market and leave it alone.
Business men would then know what
they could expect, and make their cal
culations accordingly. This would have
a most salutary effect, for when peo-
pie realized that the treasury depart
ment would not rush to their aid as
soon as money became tight there
would be less dependence on such re-
lief, and far steadier and more salts
factory condition in the money mar
ket. 1t may not be wise to do this at
once, but this is the correct principle,
and one which should be ultimately
applied. This may be considered radi-
cal, but it is right, and it is better to
be radically right than conservatively
wrong"