Willmar tribune. [volume] (Willmar, Minn.) 1895-1931, 1908-01-15
WEDNESDAY, JANUARY Is. 1908



figures out the nice juicy plum that
Secretary Cortelyou reared for the
banks, under the guise of relieving
the money stringency:
"Cortelyou sells to the banks
500, 100000 Of United States debt
certificates, bearing percent. For
these the banks pay into the treas
ury SIS, 900, 600 cash, retaining the
other $4,000, 900, paying no interest
for it. Depositing the certificates
in the treasury, the banks issue
against Them 500, 900 in new
bank note currency. This transac-
ton shows: cash invested by the
banks. SIS, OO0,O incomes per
cent interest on 500, 100000 certi-
fcates, $4,000, 900; 6 per cent inter-
est on 500, 900, 900 Of new currency
that can be loaned, 5000, 900; total
income, $9,OO0.OOO. Upon an in
vestment Of SIS, 900, 900 an income
Of SO, 900, 900 in one year is THIRTY
SIX PER CENT.
But even this was not enough
to satisfy the banks, so Secretary
Cortelyou made another offer. He
will give the banks $50, 100000 in
Panama bonds, bearing 2 per cent,
for 10000 cash, the banks re-
tanning the other $45, ZOO, 900 with
out interest), giving the proper Sc
curity. The banks will then de-
post the bonds and issue $50, 900, :
600 Of new bank notes. This trans
action shows: cash invested by the
banks, $5,OO0,0OO; income-2 per
cent interest on $50, 900, 900, ST.
100000; 6 per cent interest on
$50,000,0 900 of new currency that
can be loaned, So, 1000, 900; total in
come, $4,000 900. Upon an invest
ment of 100000 an income of
100000 is in one year is EIGHTY
PER CENT.
But the banks say there is tax
for taking out circulation. There is.
1t is one-half of l per cent. They
say they cannot issue circulation to
the full amount of the certificates
and bonds. This is untrue; they
can. They say they must give
high-class security for the deposits
left with them by the government
True; hut they continue to hole
title in these securities and draw
dividends on them, just as if they
were in their bank vaults. But
even if all these excuses were valid
the fact that business men are now
paying 8 per cent, and more, fol
money, while we have figured only
per cent, offsets the banks
claims.
1T should be understood tha
when we speak of the banks W.
speak of the banks as a whole. Tn.
facts apply generally, if not to eacl
specific case. This, too, should b.
remembered: the banks now holt
$3.50, 100000 of government funds
upon which they pay no interest
and it would be fair to state tina
the $50. 100000 they will pay TO-
the certificates and bonds will b,
really government money. An,
even Of the o,OOO,OO thus paid
Secretary Cortelyou will doubles
turn back to the banks every dolla
that can be spared.
THE fact that from John Ha
down to his latest Cabinet ap
pointee Roosevelt generally has sur
rounded himself with men of rar
ability does not relieve the presi
dent from responsibility for thi
exhibit of incapacity. He mus
share all censure. Secretary Cor
telyou should not be made a scape
goat. If, as President Roosevelt
admits, he knows but little of tn
technical phases of the currenc
question, he was wrong to selec
for his secretary Of the treasury
man who knew less than himself
And he was doubly wrong, know
ing, as he must have known, tina
he was leaning on broken reed i
this crisis, to assume no reponsi
bility, but intrust the entire charg
to the handling Of Secretary Cor
atelyou.
Commenting on the same matter
the Medical World says:
A better, simpler, and perhap
more profitable plan would be fo
the government to 60 into the mar
ket and buy standard securities, a
state and municipal bonds.
! could sell them as times get easie
again, perhaps at a profit; or the
would be profitable holdings. NJ
body ever seems to think that tn
government should make a good an
safe business deal. Our officer
should work for the interests Of tn
great corporation called the Natior
just as the officers OF any other col
poration work for the interests {
the corporation. With above pla