cretary of the Treasury sees fit to deposit, and
the banks find it possible to receive them. Even then the depository
banks alone are directly benefited, and no one of these knows long in
advance how much it is going to receive or when funds left on deposit
will be withdrawn.

Since the volume of the business of the government is very large, the
effects produced by the movement of its funds are of such magnitude as
to give them national importance, the ability of banks to loan and to
meet obligations already incurred being profoundly affected by them.
Among these effects must also be noted the inability of the banks to
calculate these movements in advance, as they to a degree can those
produced by the operations of their commercial customers, and the
relation between them and the Secretary of the Treasury, which
results. The relation between the receipts and the disbursements of
the government vary greatly from month to month and year to year, so
that, on the basis of past experience, it is impossible to predict
when the banks will gain from or lose to the treasury. The action of
the Secretary of the Treasury regarding deposits of surplus funds is
equally uncertain and unpredictable. No fixed policy regarding this
matter has yet been established by precedent or determined by law.
Each secretary follows his own judgment and is influenced by current
events and conditions.

The uncertainty which results creates a speculative atmosphere about
the money market and renders the banks dependent upon the secretary
and the secretary influential on the money market in a manner which is
unfortunate for both. Since they cannot be indifferent to the
operations of the treasury, and cannot predict them, banks are obliged
to speculate regarding them, and, if they err, they are likely either
to over-extend their credit operations or unduly to contract them. The
former will result when they expect an increase in their reserves from
treasury sources and do not get it, and the latter when contemplated
withdrawals of funds do not occur.

The Secretary of the Treasury is not in a position properly to
exercise the power conferred upon him. He is outside the channels of
commerce and industry, and must, therefore, secure at second hand the
information necessary for intelligent action. Such sources of
information are frequently unreliable and inaccurate and their use
subjects him to the charge of favoritism and to the danger of acting
in the