The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1901-12-21
WEAKNESS OF OUR
BANKING SYSTEM
Gage Addresses New York
Financiers.
FAv0RS A CENTRAL BANK
Banking System Analogous to Our
Political System.
SCARCE CREDIT is NOT SCARCE MONEY
The Secretary Says the Nomenclature Of the
"StreefAShould be Changed, Credit,
Not Money, Being Quoted at
y 50 Much Per Cent.
(By the Associated Press. J

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 Association. held
tonight at the Waldorf Astoria. Nearly
five hundred members of the association
and their guests were present George
r. Baker, president Of the First Ma
tioDal Bank, acted as toast master.
Secretary Gage said in part:
In my late report to Congress. took
occasion to call attention to the subject
OF banking and. currency to point out
what believe to be defects in both and
10 suggest some improvements in each
which l believe are absolutely necessary
in order to put us into safe and strong
competitive relations with those better
equipped than we are in that system of
machinery by which credit is made as
useful as capital and by which the pro :
cucts} OF human industry are exchanged
for each other.
II 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
a power scarcely less great than the
power of capital itself. An effort was
made to show that the bank is an insti-
tuition to swap it's credit for the credit
o. other members of the community
which, except for the office of the balk
would be non available for the uses of
life; and, in passing this point, let me
repeat suggestion made day OF two
since by a gentleman who said the nomen-
clature of the street ought to be changed.
We read all the time, he said 'of The
rates for money Today money is quoted
at per cent; tomorrow three; and next
day 6; to be followed perhaps by rate
as high as ten or twelve; and people be-
come alarmed about the scarcity Of money
as indicated by these high. rates. when
substantially there has been no changa
in the volume of money What ought TO
be/quoted is not money but credit
1.-The weakness of our banking syS-
TEN is in the isolation and entire sepa-
rateness of the individual banks over the
country l venture to suggest a system
of coalition between individual members
of the banking community through the
country into one central institution, with
in which all banks should be related or
interested according to their individual
relative Importance, and which in Ger
tain sense should represent to the bank
ing interests of the country what the
Federal Government represents in our
Political systm."
rhe Secretary urged that there be
reform of the currency system Of the
nation along the lines outlined in his re-
port to Congress and declared that no
time was more favorable than the pres
ent for the judicious revision OF the Laws.
He told of the reduction OF the interest
charged on the national debt and COM
mep.ing upon it. said
THE cash under the control of tie
government is larger than at any previous
time in its history. The financial strength
of the Government is now unsurpassed.
But times changes. event succeeds event.
and the brightness of the sun today IS
often obscured by the clouds that arise
tomorrow. In periods of strength and
prosperity it is the part of wisdom TO
make provision against possible future
periods of stress and strain