Treasury of the United Kingdom

“ The loss of Great Britain by discounts in raising money or by the use of depreciated paper was greater than that incurred by the United States. A leading English authority says that of the vast burden up to 1816, the "artificial enhancements due to discounts in raising money were so great that for every £100 received into the treasury a national debt of £173 was created."
No other wars than those of England and France can be compared with ours in point of expenditure. ”

“ The present holders of these bonds have never despaired of being able some day to collect the amounts from the United States Treasury, and it will only need a closer alliance between the United States and Great Britain, as proposed by the advocates of an Anglo-Saxon amalgamation, to bring these claims to the front. ”

“ I would issue a bank-note for every dollar of Treasury obligation cancelled; but I would issue no bank-note that did not absorb an equal obligation of the Treasury. By this distribution of a portion of the demand obligations you restore to the Government the full ability to meet the remainder; and at the same time the people know, that, so far as the currency goes,—and it is of this only we are treating,—every promise of any bank has its ultimate recourse in the Treasury of the United States. ”

“ At all times prior to March 25, 1940, the Federal Reserve Bank of New York pursuant to its authority under § 522 (c) certified daily to the Secretary of the Treasury one buying rate for the pound sterling. When the present war between Great Britain and Germany was declared, the British Government inaugurated a detailed system for controlling foreign exchange. ”

“ And while the functions of our National Treasury should be few and simple, and while its best condition would be reached, I believe, by its entire disconnection with private business interests, yet when, by a perversion of its purposes, it idly holds money uselessly subtracted from the channels of trade, there seems to be reason for the claim that some legitimate means should be devised by the Government to restore in an emergency, without waste or extravagance, such money to its place among the people. ”

“ If, now, we may fairly suppose, that for each one foreign article paying a tax into the Treasury there were four domestic articles raised each in price as much as the foreign article paid in customs-tax, then it follows, that the People paid in each of those 20 years under customs chiefly protectionist, $632,000,000, or $12,640,000,000 in all, no penny of which went into the Treasury of the United States. ”

“ At first sight this would seem to be a profitable and sensible transaction on the part of the Government, but, as suggested by the Secretary of the Treasury, the surplus thus expended for the purchase of bonds was money drawn from the people in excess of any actual need of the Government and was so expended rather than allow it to remain idle in the Treasury. If this surplus, under the operation of just and equitable laws, had been left in the hands of the people, it would have been worth in their business at least 6 per cent per annum. ”

“ VII. Provided always, That if upon the account of any sheriff there shall not be sufficient in the hands of such sheriff to reimburse him such monies paid by him by virtue of this act, that then the sheriff having so paid the said monies, shall have the same repaid by the comissioners of his Majesty’s treasury or the lord high treasurer for the time being, out of the revenue of the crown, or by record of surplusage upon any other sheriff indebted to his Majesty, upon certificate from the clerk of the pipe to that effect. ”

“ I make this suggestion upon the ground that a comity which ought to be reciprocated exempts our consuls in all other countries from taxation to the extent thus indicated. The United States, I think, ought not to be exceptionally illiberal to international trade and commerce.
The operations of the Treasury during the last year have been successfully conducted. The enactment by Congress of a national banking law has proved a valuable support of the public credit, and the general legislation in relation to loans has fully answered the expectations of its favorers. ”

“ The prosperity of twenty years is annihilated at one stroke! The sources of revenue are dried up. The Treasury, indeed, may be now full—but it must continually diminish—and, without its usual supply, it must soon be empty. We have still some credit. But how long, sir, can that be maintained, when it is known that we have no longer the means, allowing us to possess the disposition, to fulfil our pecuniary engagements? When you cannot collect a cent upon imposts, and dare not lay a direct tax, how far you will be able to obtain money on loan, is, to say the least of it, very questionable. ”

“ While the colonies, under the national production, borrow money cheaply on the public credit, the United Kingdom borrows more cheaply still. Low as is the rate of interest paid on the National Debt, for many purposes of investment it is deemed the most satisfactory, because the most secure, of all. ”

“ The severe shock so extensively sustained by the commercial and manufacturing interests in Great Britain has not been without a perceptible recoil upon ourselves. A reduced importation from abroad is necessarily succeeded by a reduced return to the Treasury at home. The net revenue of the present year will not equal that of the last, and the receipts of that which is to come will fall short of those in the current year. ”

“ With rigid economy, vigorous salvage operations, and adequate revenues from taxation, a surplus of current receipts over current expenditures can be realized and should be applied to the floating debt. All branches of the Government should cooperate to see that this program is realized. I cannot overemphasize the necessity of economy in Government appropriations and expenditures and the avoidance by the Congress of practices which take money from the Treasury by indefinite or revolving fund appropriations. ”

“ The proposition to deposit the money held by the Government in banks throughout the country for use by the people is, it seems to me, exceedingly objectionable in principle, as establishing too close a relationship between the operations of the Government Treasury and the business of the country and too extensive a commingling of their money, thus fostering an unnatural reliance in private business upon public funds. ”

“ Such a condition has heretofore in times of surplus revenue led the Government to restore currency to the people by the purchase of its unmatured bonds at a large premium and by a large increase of its deposits in national banks, and we easily remember that the abuse of Treasury accumulation has furnished a most persuasive argument in favor of legislation radically reducing our tariff taxation. ”

“ Many sound heads consider it indispensable that the system of credit, should be, in many respects, amalgamated with the financial system of the State. This is no rash speculation, or untried novelty. In the Southern and Western States, which, like France, are chiefly agricultural, the principal banks are dependent on the State governments, they are employed in collecting the taxes, and transferring funds on account of the State treasury. ”

“ The proposed line of credit of 3,750 million dollars to the United Kingdom will be available up to the end of 1951 and will be used to assist the United Kingdom in financing the deficit in its balance of payments during the transition period. The rate at which the United Kingdom will draw on the credit will depend on the rapidity with which it can reconvert its economy and adapt its trade to the postwar world. The anticipated rate of expenditure is likely to be heaviest during the next 2 years. ”

“ The influence of an accumulating surplus upon the credit system of the country, producing dangerous extensions and ruinous contractions, fluctuations in the price of property, rash speculation, idleness, extravagance, and a deterioration of morals, have taught us the important lesson that any transient mischief which may attend the reduction of our revenue to the wants of our Government is to be borne in preference to an over-flowing treasury. ”

“ Now, if the government can afford to let the banker have credit at 1 per cent. on actual circulation, why can’t the treasury supply all the people with legal-tender money at the same rate? Why not issue the money direct to the people and then pay interest into the United States treasury, instead of into the coffers of corporate institutions? National banks are expensive luxuries which we don’t need. ”

“ We are now without any medium; and necessity, as well as patriotism and confidence, will make us all eager to receive Treasury notes if founded on specific taxes. Congress may now borrow of the public, and without interest, all the money they may want, to the amount of a competent circulation, by merely issuing their own promissory notes of proper denominations for the larger purposes of circulation, but not for the small. Leave that door open for the entrance of metallic money.... The State legislatures should be immediately urged to relinquish the right of establishing banks of discount. ”

“ The national system will create a reliable and permanent influence in support of the national credit and protect the people against losses in the use of paper money. Whether or not any further legislation is advisable for the suppression of State-bank issues it will be for Congress to determine. It seems quite clear that the Treasury can not be satisfactorily conducted unless the Government can exercise a restraining power over the bank-note circulation of the country. ”

“ By the operation of our present system of finance, however, the metallic currency, when collected, is reserved only for one class of Government creditors, who, holding its bonds, semiannually receive their interest in coin from the National Treasury. They are thus made to occupy an invidious position, which may be used to strengthen the arguments of those who would bring into disrepute the obligations of the nation. In the payment of all its debts the plighted faith of the Government should be inviolably maintained. ”

“ The public Treasury, which should only exist as a conduit conveying the people's tribute to its legitimate objects of expenditure, becomes a hoarding place for money needlessly withdrawn from trade and the people's use, thus crippling our national energies, suspending our country's development, preventing investment in productive enterprise, threatening financial disturbance, and inviting schemes of public plunder. ”

“ Let us begin with the word treasury. In the fourteenth century treasury meant simply a storehouse, or at its narrowest a storehouse of valuables. To us the “treasury” is the government department of finance, but under Edward I the state office of finance was the Exchequer, which, as we saw, was located normally at Westminster, but since 1298 at York. When at Westminster the Exchequer had a “treasury” or storehouse there also, yet in its absence it is not likely that it kept either valuables or money at Westminster. ”

“ The Treasury is supposed to have the function of control, but a change appears to have taken place, and it has now to a great extent lost its control, and has even itself become a spending body. Professor A.L. Lowell, in the work above referred to, after speaking of the Treasury as the department which exhibits in the highest degree the merits of the British Government, points out that even ten years ago, "with the waning desire for economy and the growth of other interests, the Treasury has to some extent lost its predominant position ”

“ It is possible that the suggestion of increased revenue as a remedy for the difficulties we are considering may have originated in an intimation or distinct allegation that the bonds which have been issued ostensibly to replenish our gold reserve were really issued to supply insufficient revenue. Nothing can be further from the truth. Bonds were issued to obtain gold for the maintenance of our national credit. As has been shown, the gold thus obtained has been drawn again from the Treasury upon United States notes and Treasury notes. ”

“ Owing to the continued success of our commercial enterprise, which has enabled the merchants to fulfill their engagements with the Government, the receipts from customs during the year will exceed the estimate presented at the last session, and with the other means of the Treasury will prove fully adequate not only to meet the increased expenditures resulting from the large appropriations made by Congress, but to provide for the payment of all the public debt which is at present redeemable. ”

“ There was a deficiency, too, in the ways and means of the government: money was never plentiful enough in the imperial coffers. At last, to get out of the difficulty, it was determined to try the effect of a paper-currency, and an issue was made of assignats or treasury-warrants, which, being based on the credit of the highest authorities, were regarded as secure; which fact, with their facility of transfer, soon brought them into circulation. ”

“ Crawford.—The honorable gentleman from Massachusetts (Mr. Lloyd) thinks that nothing has been done by the Government for commerce, whilst commerce has done every thing for the nation; that commerce has paid into the public Treasury $200,000,000. If it is contended that this sum has been paid exclusively by commerce, nothing can be more incorrect. The money collected from imposts and duties is paid by the consumer of merchandise upon which the duties are imposed. It is collected immediately from the merchant, and ultimately from the nation. ”