Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-05-30
RIDGELY ON SOUND FINANCE
SAYS TREASURY AND TAXES NOW
DISTURB FLOW OF FUNDS.
Points Out Plan by Which Govern
ment Need Not Keep Cash Hoarded
and Out of Circulation.

bf.i kplI. May 3o-NIlliam Barrett
RidS"ly. controller Of the currency. adj
dressed the Detroit Bankers Club ut 4
dinner last night. SIR. RhlEcly declared at
| the outset that the wo-kingman IS moro
dependent On good banking and currency
( laws and on 4 stable currency system
than The rich man.
1T is in the highest degree important
to the poorer people" said he. that nnan-
cal systems. banking and currency laws
and all the Organization Of modern bust
ness he SO arranged as II produce the least
possible variation in business coud lions
and that banking should be encouraged
and developed and carried To its highest
possible perfection and efficiency" con-
tinuing he said:
How to Collect Taxes.
"All taxes should be collected in a way to
produce the least disturbance and should
be dishursed TO counteract the dis
turbance produced by their collection. The
best way to handle the collection and dis
tribution of government funds IS through
the banks in which the business OF the
people is transacted.
IN an ideal system Of government
lnances the revenue should exactly equal
the expenditures and the collections should
not be made in advance of expenditures
but the expenditures should be made first
This is accomplished In some countries by
scented by finance bills The government
discounts these bills and deposits the pro-
ceeds in banks in anticipation OF It's reve-
hues. The expenditures OF the government
are made against these balances which re-
distributes the banking credits which have
been deposited among the people who are
to pay the taxes. The money is therefore
In circulation and available for the people
TO pay their taxes with.
Minimum Disturbance.
No money is ever taken from actual cir
culation among the people and the result
is minimum of currency disturbances.
This is the result we should strive for in
the management OF the financial transac-
lions OF the United States treasury
The passage of the act OF March 4.
1907, or the so-called Aldrch bill, makes
il possible to take a long step In this
direction by leaving the revenues OF the
government in circulation instead OF col
lectng cash and storing IL in treasury
vaults.
THE most constant and serious COM
plant against the Treasury Department In
Its relation to the business of the country
Is that the treasury is always in the money
market as a disturbing factor, that II Is
continually taking money out OF the regu-
lar channels of trade and locking Il up IN
its vaults when ii Is needed In circula-
ton"
Treasury Balance.
Mr.. Ridgely said that keeping an avail
able cash balance of ssOOoo,O0o in the
treasury. as at present, was not good
finance either for the people or the gov
eminent
Referring to the operation Of the act OF
March T. 1907, permitting the deposit OF
customs receipts in national banks, the
controller said:
ut Is possible under the law. and L
think highly desirable, to go one step fur
Their than this and collect the revenue,
mainly in bank credits, without the use
of a great deal of the actual cash at all.
and thus avoid the necessity of ever with
drawing a single dollar from actual cir
culation until needed or until 1t can be
promptly paid out for the expenses of the
government. This can be done by allow
| ing the collectors of both classes to re-
| ceive in payment of customs and Internal
| revenue certificates of deposit on banks
which are designated depositaries of the
| United States"
! Controller Ridgely recommended the in
| crease of the number of government de-
| positaries and advised the acceptance OF
| securities other than government bonds as
security for deposits.