The Savannah morning news., 1901-10-17
TIME FOR A CHANGE
,cRrrARY CAGES ABLE ADDRESS
TO BANKERS.
TIE GOVERNMENTS FINANCE.
ms INJURIOUS INTIMACY WITH
COMMERCE..

rha secretary Points Out How Com
rce and Industry Are Hampered
hv This Close ReIation-He Would
petire Legal Tender Notes and
,,odifv svstem of Bank Note Circu-
,..,on--A Very Decided Change I'm
Governments Position to National
1 hanks Favored.
Milwaukee, Oct. 16.-The second
laws session of the American Bankers
Association was devoted to business
,,o,r, the start. Upon the call of
...+ee bankers from various sections
If the country reported in five-minute
,neAohes the general condition of bus
/ ,nass The general trend of their state
4 rnents showed that business was in a
/ thoroughly satisfactory condition.
Following the call of states came
a,scussion on practical banking ques-
4 tons.
B. stickney, president of the
Chicago Great Western Railway Com
nanv was then introduced and read
an interesting paper on "The Medium
A of Exchange and the Banking Func-
a ton"
Secretary of the Treasury Lyman J.
n Gage was introduced by President
n Trowbridge at the conclusion of Mr..
stickney's paper Mr.. Gage was on the
Il programme for tomorrow, but being
IN the city and desiring to leave before
the convention came TO close, a
change was made to enable him to
speak to-day
Finance and Commerce.
Mr.. Gage expressed the opinion that
there is too close an intimacy between
4 the governments finance and our COM
n mercial affairs" but he added that ''it
is a comfort and satisfaction to note
that at the present moment the in
furious effect of such intimacy appears
10 be at a minimum" The speaker
urged that the present is most pro-
pitious time for enacting reasonable re-
forms in the currency and banking
laws.
In every country said Mr.. Gage,
there is a more or less intimate res !
ton between government fnances-deb bt
N and taxation-and the general COM
q mercial or industrial affairs of such
FL country. In our own country that in
timacy has been and is injuriously
close Memory readily recalls those
periods when our whole financial and
3 Industrial progress has been severely
checked while great questions relating
TO the condition of the treasury or the
III standard of money have awaited de-
~ cision While under our system the
people constitute the government, yet
in its organization the government is
IA a legal entity, separate, distinct, i'm
personal Within it's proper sphere of
action it is supreme, but it cannot
trancend these limits without harm to
itself and injury to the people. In
other words, there are laws superior
to the government, laws which
it canont defy and escape penalty.
. They are not written laws, but they are
discoverable, these higher economic
N laws which have a way of self-opera-
n ton, blessing the obedient and ban
ming the violator OF these all men and
all governments should be afraid, and
TO their mandates respect should be
shown"
South American View.
Mr. Gage by way of illustration, re-
\ peated the substance of conversation
he had had with the financial minister
OF South American republic, whose
4 government encouraged banking facil-
tiles by depositing it's surplus funds
subject to call, with eight banks. all of
which have branches. These banks are
/ permitted to issue notes to circulate as
money, limited. however, in amount
oy their relations to capital, and by
the percentage of specie which they
are required to carry against noted is
sues Asked why his government did
not make the banks secure their notes
py pledging government bonds, thus
charging the market for the govern
ment securities, and lowering the rate
OF interest on the public debt, the
south American replied that this ap-
parent advantage might prove falla-
oIous IN the end. We consider the bank
currency entirely straight to the hold
el as 1t now is and to require what
you suggest would involve a tie-up of
% much of the bank capital, all of
whch we think ought to be available
10 the uses of industry and trade. We
MihK general industries and business
audlrs should be involved to the'small-
est degree possible with government
nnances. 1t is doubly important that
eeneral business should be protected
from rather than exposed to the per-
Mroations in government finances
mneh the latter are under stress and
sualn. We deposit our idle funds
among the eight banks. and they serve
a. an important aid to industrial ac-
.e'lty While they are always subject
our call when needed"
,Sommenting on the apparent reason
sDleness s.nes of the South Americans
SeaIement Mr.. Gage said: "On three
boIuculars, legal tender paper money.
LaIA note issues and the keeping of
tn public monies, we pay no regard
We opposing argument. Neverthe-
a. the reasons set forth by the
io,, ir,aHce minister for adhering to a pol
NY, NY 80 radically at variance with our
Hoa are deserving of deep considera-
sn nave we not been guilty OF an
onC nous economic waste by reason of
peculiar treasury system?
His Financial Convictions.
Permit me to summarize into sew
~ ~ brief propositions an expression
oEy oy own financial convictions.
a., lrst- l believe IL to be most desir-
po''. mat the demand liabilities Of the
1oeInment known as legal tender
tiro. tis should be put in the way of re-
aeeht and cancellation.
n a. second. ! believe that this can be
lr,ool pushed without any burden OF
1rs cost TO the public treasury.
Hlrd. I believe that our system of
IN Va note circulation can be and ought
resre9 30 modified as TO make II more
trial alNe TO commercial and indus
cres. iulrements, without any in
Dt FISK 10 the bill holder.
Inc uilh' I believe that beyond act
beorie guardian and trustee for the
tk F' IN relation "a nattonat bantxs