The daily morning journal and courier., 1901-12-20
GAGE SPEAKS TO BANKERS
ADDRESSES GROUP EIGHT THE
 NEW YORK ASSOCIATION.
Weakness of the American Banking system m-Secretnry of tho Treasury De- clares 1t to be in the Isolation and En- tire Separateness of tho Individual Banks Over the Country.

New York, Dec. 19.-Secretary of the Treasury Lyman J. Gage was the guest of honor and the principal speaker at
 the annual banquet of Group Eight of
 the New York State Bankers associa-
 ton, held tonight at the Waldorf As ] toria, Nearly 800 members of the as 1 sociation and their guests were present.
 George F. Barker president of the First | National bank, acted as toastmaster. The list of speakers included besides ! Secretary Gage, eX-Speaker Thomas B. Reed, the Rev. Dr. Donald Sage Mac
 kay, ex-Judge Henry E. Rowland, and Amos Parker Wilder. The toasts to which they responded were respective ly: Business and Legislation" The Corporate Conscience and the Men Who
 Help to Make It. Lawyers and Fi- nanciers,' and "The West and the Money Power"
 Secretary Gage was received with
 great applause when he arose to speak:
 Secretary Gage said in part: Tt is
 strange anomaly that while in nearly
 every other department of life improve
 ment Is the indispensable rule, in the
 great field of banking, finance and ex-
 tlidilSC We SO Oll WILL dll lHIliltItIlt it-
 gard to the handicap imposed by defec-
 tive methods and dismiss with little
 consideration suggestions which if
 adopted would advance society and
 business affairs in the great economic
 field of industry and exchange. The
 evidence of improvement in all other
 departments of life are manifest on every hand Old machinery is thrown away"
 The secretary then said he knew a railroad president who told him once that he could put his line on dividend paying basis if the directors of the road
 would only permit him to throw eighty engines into the scrap heap and re- place them with new and modern ones. He also related an incident of tool manufacturer who permitted foreign agents to photograph his finished prod uct because he was sure he would have new and improved devices before the foreign manufacturers could produce the old articles from the pictures.
 Tn my late report to congress he continued, T took occasion to call at tention to the subject of banking and currency to point out what l believe to Ot dCItSlS III Dotiit ttili to Sh6Scs pbiiiV in each which believe are absolutely necessary in order to put us into safe and strong competitive re- lations with those better equipped than we are in that system of machinery by which credit is made as useful as capi- | tai, and by which the products of hu- man industry are exchanged for each other. I want ot excite in your minds an interest in the great subject.
 Tn the report referred to attention | was called to what I consider the fun damental weakness of our banking sys- tenn in the United States There was explained the function the bank per forms as an intermediary through | which credit is made available to the | uses of production and industry and thus given power scarcely less great than the power of capital itself. An effort was made to show, in the words If a very clear writer upon the subject of banking that the bank is an insti- .ution to swap it's credit for the credit of other members of the community, which, except for the office of the )ank would be non available for the lses of life; and, in passing this point, ct me repeat suggestion made day IT two since by a gentleman who said he nomenclature of the street ought O be changed. We read all the time,' le said, of the rates for money. To- lay money is quoted at per cent; to- morrow, 3; and next day, 6; to be fol- owed perhaps by a rate as high as 10 r 12; and people become alarmed bout the scarcity of money as indi- ated by these high rates, when sub tantially there has been no change in he volume of money, either in the ands of the people or remaining under l he control of the banks What ought Z 0 be quoted is not money but credit. What is the price of credit, stated in ( he terms of interest? It is credit that | , getting difficult, not actual money z hat is becoming scarce. | "The weakness of our banking sys- J
 Continued on Sixth Page.) V