Evening star. [volume] (Washington, D.C.) 1854-1972, 1900-11-16
A POOR AG NCY
SECRETARY GAGE AGAINST TREAS
URY ISSUING PAPER MONEY.
Lecture Before the Columbian Uni
versfty-Intcresting Talk on Banks
and Banking Last Night.

Mr.. Lyman J. Gage, Secretary of the
| Treasury, delivered an extremely interest.
| ing lecture last night before the school OF
comparative Jurisprudence and diplomacy
| of the Columbian University, his theme be-
| ing Some Further Thoughts on Banking
and Finance" In the course of the lecture
he took strong ground against the issue by
the government alone of paper money. He
said:
But it is alleged that the whole principle
| It. wrong. that no banker ought to be al
| lowed to issue any circulating notes under
any conditions or circumstances, that the
| government, and the government alone,
should issue the paper money and to an
amount adequate for the needs Of the peo-
pie Ihat allegation cannot be taken up
and discussed at length here. To those who
mold the theory that paper money may be
Hldue Dy printing upon certain sized pieces
OF paper declaration in the nature of q
nat which shall have all the power and
efnclency of coined money. 1t is idle to ad-
uress any argument upon the subject. They
are lrretrfeVably in the Clouds But to those
who comprehend that promise to pay
| means a promise to pay, and to pay money,
| IL may be pointed out-indeed, 1t has been
clearly pointed out time and time again
that the public treasury is poor agency
FOR issuing paper money!
his preceding remarks were repIete with
instruction regarding the present methods
Oh nnance and prophetic of the necessities
Whlc.l The future will create for their
Modification.
The Function of the Bank.
Beginning his lecture Secretary Gage
went lnto the principles of modern bank
ing methods and gave much interesting In
formation as to the manner In which finan.
cial matters are handled. He spoke of the
important place which the bank has in the
fed of production and commercial ex.
change. The great function Of the bank,
oeciared he, Is to make private credit as
emcient as money itself for the common
needs of society.
Mr.. Gage spoke of the prominent par;
Played by banh checks and drafts in bust
ness transactions Of the day, saying they
form large share of the paper money OF
the country. The bank note he said, is
the economiZer of capital. In many COM
munltles the check and bank credit is Of
no use, he declared, for instance, in min
ing communities, among the workers in the
cotton districts Of the south, the gram
handlers Of the west and the fishers of
the eastern coast. These people need
ready currency.
A Look Into the Future.
Continuing, he asked: rs any change in
our currency system at all probable, OF even
possible. no matter how much to be de-
sIred7 No immediate change is at all prob
able. but looking forward to the period of
your own business future, some change in
our system seems to be inevitable. In the
first place, in the absence of extraordinary
expenditures for war. the present outstand-
!! Ing public debt ought to be largely reduced
or wholly paid. AS this is eventuated the
now required form OF security for bank
note issues will be lacking and modifica-
ton in our present law will be necessary.
Again, If l may express a direct opinion, it
will come to be perceived as time passes
, la t-
well prepared to deal with large mass of
floating debt, payable on demand. The OBJ
legation to maintain parity between our
nearly six hundred millions of silver money
and gold adds to the complication, and the
lawmakers representing the people will be
glad-to diminish the present great respon-
sibility.
at will be further SEEN" he continued,
''as times goes on, that true paper money
unites in itself two qualities. 1t Is a me-
dium of exchange, and 1t Is a convenient
and useful instrument by which credit may
be extended. AT the present time the ma
tional bonded debt is $1,000, 100000. OF this
amount $3.50, 100000 are taken up by the ma
tional banks. Outside banks own $1,000, 900
of the same. The fact that the United
States bonds yield a lower rate Of interest
to the purchaser than any other country Is
due to the act.
why has the national bank system de-
veloped when there is apparently so little
profit? 1t is because the rigid government
supervision DrOVlOed 1Or IN the act gives
these banks peculiar standing and pres
tige. The privilege Of note issue Is not the
incentive. At the present day, since the
act of last March, banks may issue notes
to the full par value Of their government
bond deposits
Provisions of Banking Law.
The Secretary concluded by speaking of
the late provision of the national bank law
which provides that banks may be organ
lied with capital as low as $25 O00 He
characterized this as a wise piece of legis-
lation, as it affords opportunity for banks
in communities of limited population where
such institutions are needed. Since March
IA last he stated that $50 banks have been
organized with a capital of less than $50
900 each. and most of them with the min
imum capital.
He closed with the important declarations
primarily stated herein.
Glass Organizations.
Upon the conclusion of Secretary Cages
address the school Of jurisprudence and
diplomacy held its annual election of Of
ticers, after which a supper was given to
the class by Mr.. John W. Langley, the
president-elect. The following were chosen
officers: President, John w. Langley of
Kentucky: vice president, Harry A Vieth
of Wisconsin; secretary, Kenkfchi Kodera
OF Japan; treasurer, ]. g. Tyssowskf of the
District of Columbia: executive committee
Alvah w. Patterson of Oregon chairman.
w. L. w. Schoeverling Of Illinois and C. C.
Clark of Pennsylvania.
FRENCH FIELD GUN SECRET.