Evening star., 1928-02-26

Bankers Trust Co. New York,

BY HARVEY r. FISK.
Bankers Trust Co. New York.
This - the .s., Of a .erie. of four articles
"our National Deht. was ruhtisned on No
Revenues" Was published December Is. ant
the third article. Our NstlonsI ESrendi
How many of us know that the United
States Treasury Department is the
greatest bank in the world and that
the Secretary Of the Treasury prob.
ably has greater power and greater re-
sponsibilities than any bank Official ir
the world? This is true both as tI
the amount Of money received and dis
bursed and in connection with the
handling Of the Nations finances by
the Secretary OF the Treasury. his in
f!uential position as member cx officio
Of the Federal reserve banking system
of the Federal Farm Loan Board and
his supervision of the National banks
and the various currency issues directly
made or indirectly controlled by the
department of the Treasury,
As the chief financial officer of the
United States Government he has
supervision of the receipt and disburs-
ment annually OF around $4,000, ,0o0.09o'
which gives him power to exert great
influence for good or evil over business
condition throughout the country. If
taxes are collected properly and the
fow Of money wisely regulated. the
return TO the people in the form OF
PAYMENTS for services rendered and
goods supplied of this vast amount OF
money will proceed smoothly and quiet
II without disturbing the trend OF af-
fairs. On the other hand. an ineM-
ciert Secretary or one indifferent TO
the welfare of the public may handle
these collections and disbursements IN
q WAY detrimental to the good OF the
people Unless such operations are
sxiiltully handled. the funds available
for the use of commerce ARD trade
may be made to fiuctuate in volume
n such an extent as TO cause not
only annoying changes In interest rates
but may result in a serious dis!oca'lon
OF The financial structure OF the coun-
try.
The Federal Reserve Board controls
the operations OF the Fedcfal reserve
Banks and is charged with the duty OF
Ierninr the volume O. credit in these
reservoirs at such levels as to accono-
date the various sections Of the country
which they serve Every community
In the country. no matter how smail,
NAV Rave its affairs injured or he!pec.
daoeroing on the management OF the
Fa6era' Reserve Board at Washington
and of its local Federal Reserve Bank.
Ccuntry's Business Huge.
Last year the business of the country.
es measured by the volume OF transac-
tions of the banks connected with tls
Federal Reserve System IN about 10Y
leading cities of the country. totaleo
s708 $40. 900 900. The total resources
of the Federal Reserve Banks on Decem-
ber %. 1927. amounted to so.333, 49,.
900: while the resources OF the s,oss
member banks, that is. National oanks,
State banks and trust companies which
compose the system and together own
tbs sIa1,7l 600 stock OF the Federal
Reserye Banks. aggregated at the end OF
the nscsl wear June 80, 1927. $42,8lo,-
$4,000.
The total amount of money in circu-
latjor, in the United States on Decem-
her /. 1927. amounted TO s4.845.3l2.0oo.
az this vas. sum s4l24.2ll 900 was IN
the form Of notes of some kind. ms
compares strangely with the FIRST issue
Of about SIS. 1000 in paper money mace
IN what is now the United states. In
1900 the remnants of little army OF
fhe eosnnists of Massachusetts, Bay. VINO
rad been sent TO fight against the
F-encn Canadians returning to Boston
ishesrtened and defeated. clamoreo 70
h. raid OF and allowed TO return 10
their homes TO renew their former ac-
tiv.ties. The treasury was empty ana IN
this emergency some one suggested tnal
IS means of payment fund OF credN
right be developed by printing bills re-
deenable at future date MADE payaoie
10 bearer. which thus would circulate
from hand TO hand. At this time. apart
from the aborigines. the whole popuia.
ton of what are now the New Engi2no
States was only 10000. The people OF
the other settlements stretching south
. thousand or more miles numbered not
70 exceed l25.00o.
This experiment OF Massachusetts
seems TO have worked 50 well that IT
was not long before the idea spread
through the colonies that the means TO
meet emergency situations could De
found by creating bank Of money; the
word "bark'' wss used in the sense ol
q heap or bundle II was some years
after the close OF the Revolutionary
War before the first bank IN the moo
rrn sense of the term was esta blish"d IN
America. The idea Of the use OF nat
money grew apace. The cnlonists nav
.ny found that the colonial notes were
rsafu! as a medium! OF exchange and
having tasted the sweets Of pubic
credit, became more ana more en-
sn1ored with the idea and commenced
using i as a means Of securing pri-
~ate loans. especially 70 acquire prop
er'Y and building homes. Consequently.
When the 10 colonies found themselves
R&y
first thought as 10 means 70 keen their
armies In the field and provide for The
other needs 0! war was b. currency
Issues.
Against Paying TaSes.
This appealed TO them because they
were constitutionally opposed 10 paving
taxes no; alone 70 the mother country
bit even al home. They had never yet
ynaEe The experiment Of combining their
resources. The separate colonies we're
10 Jealous Of each other that they would
not give the Constitutional Congress
any right of taxation nor would they
Ysay 70 il amounts OF any co!lAcgdence
toward the expense Of the var. II
waa natural. therefore. that Congress
sfouic anc did resort 10 the iS:1!ng
o. paper money 70 such an extent ihat
&8tf4EF IFS bf~6FE a ifrS aIFSS%s% 0R,~Cs ="
tng 70 calculations made al a later tir1e
kp Thomas jefferson, o. around $500.
600 900 pzr Ysla: ~ currency had been
.sy3fr III i713 the continental cur
rency no longer had any prchaA,n2
yy3ysr znc faded out of sight. being
lsed " paper the walls Of barber shops
snd being made into suits of clothes
sn1 treated IN various other ways u,
sfaow The utter contempt in which IT
vas s-ld by the people After that for
several years the people got along as
best they might with Spanish s'iFer.
Etl,ish and other foreign coins.
The fYst bank W pe organlz~d IN
knleTica was the Bank o. Hdfth
/uer.ca. trysu!zec ky f1Okert Morris
s..d ,7!s fyienck III Philadelphia IN lJsl
J. begzn operations with specie from
France unIGs6nd from the Ffe1cf waf-
ats3a yfs0;rlzr aEG tFxuSyoytEd ffDtfi