Tulsa daily world. [volume] (Tulsa, Indian Territory [Okla.]) 1905-1919, 1910-12-27
How TO RELIEVE
A MONEY Panic
THE INDEPENDENT TREASURY
As A GREAT FACTOR
THE METHODS employed
Surplus Was Al Deposited In Bank In
1908 - Resultant
Harm.

By Associated Press
Washington, Dec. 26. -19lO.--'Thc
Independent Treasury Of the United
States and It's Relation to the Banks
Of tho Country" is the title of a vol
ume just published by the National
Monetary Commission. This mono
graph was written by DR.. David KIN
ley professor of political economy I'm
the University of Illinois, and author
OF various works upon monetary ques-
tions and is a revision and contlnua-
ton OF his earlier work. The Inde-
pendent Treasury Of the United
States" which appeared in 1893. The
author follows the policy of the treas
ury with regard TO the keeping Of the
public funds-its absolute divorce
from the banks from lS47 to 1864,
and its gradual return to their use as
depositaries since the establishment
of the national banking system At
! tention Is given to tho influence OF
the Independent treasury on the mon
ey market and the business OF the
country the measures taken by the
secretary of the Treasury at various
times to relieve tho monetary strin-
gency, the treasury as fiscal agent
in the placing of loans, and its work
as bank OF issue and redemption
In the keeping OF the public money
the author declares the government
has followed a changeable policy In
the first few years after the adoption
Of the constitution there wDe no
specific places for the custody of the
public money and It was largely left
in the hands Of collecting and disburs-
ing agents. During the existence OF
the first and second United States
banks--that Is, from 1896 to 1871 and
from 1916 to 1893, the date when
Jacksons secretary ordered the re-
moval OF the deposits-the public
money was kept mainly In these insu-
tutons and their branches. In the
interim between the closing OF the
first United States Bank and the open
ing of the second, and from the re-
moval Of the deposits in 1898 until the
estah hlshment of the indepent treas
ury in 1916, the state banks were used
as depositaries for part Of the public
moneys During the crisis OF 1891
the government suffered much incon-
venience from the tying up OF
its funds in state banks.
The act Of 1876, which required the
government to keep its own funds
found its justification In the nature
and condition Of the banking system
Of the time. which made the reliance
Of the government on the banks for
financial safety dangerous and there
fore undesirable. Under the old ma
tonal hanks the Issue OF notes was
indeed fairly well under government
control, But that system OF issue was
unsuited to the rapidly growing needs
of the country and threaened a social
differentiation incompatible with the
preservation OF the Democratic equal
ity necessary to the vitality OF the Re-
publican government. The state
banking system had been well denom-
mated wild cat" Utterly irresponsi-
BILE and beyond control in the strength
Of the doctrine of state supremacy In
its evil and untenable form, which
was swept away by the necessities of
the government in the civil war, these
banks were Veritahlc powder maga-
zine, by the explosion of which the
credit and good name OF the nation, II
it trusted them, mi ght at any time be
shattered. II is in this danger that
we mus lool, for the justification OF
the removal OF the government H.
noncos to n sounder and safer basis
Whatever may be the influence Of rs
operation now, the esta liishment OF
the subtreasury was.s under the cir
cumstanccs, justlflable and neces-
. sury."
Tho way in which the government
weathered the financial storm OF
1867 served to wed the people OF the
country more closely TO the lndepend-
ent treasury system. Though the
banks failed, as In 1891 the govern
ment was able to pay Its debts, meet
ing every liability without trouble
The Independent treasury aimed to
secure not only the safety Of the
public funds, but also the furnishing
OF y safe currency to the government.
I Tho act Of 1916 stipulated that public
dues ana disbursements should be
paid In gold or silver coin or treasury
notes. In hi efforts to observe this
law during the Civil War Secretary
Chase Doctor Kiuley believes
brought on the very thing he wished
to uvdd--the suspension Of specie
payments by the government The
author holds the opinion that II the
secretary instead Of issuing treasury
notes, had agreed TO accept bank
notes, suspension could have beer
postponed and perhaps avoided As
1t was the bank notes coming In foi
redemption created new drain OF
the gold reserve Of the banks, al
ready depleted by loans to the gov
cnrmcnt.
This history Of the Independent
treasury since the creation Of the na'
tional banks In record Of gmdun
departure from independence, both