The Savannah morning news. (Savannah, Ga.) 1900-current, 1901-12-20
GAGE TO BANKERS
THE CoUNTRY'S FINANCIAL SYs-
TEN CRITICISED.
A CHANGE is BADLY NEEDED.
OUR BANKING SYSTEM FUNDA-
MENTALLY WEAK.

Weakness of Banking System Lies
in the Isolation and separateness
of the individual Banks-In Case
of Crisis or Panic Each Looks Out
for ItseIf-There Is no Community
of Intercsts--A Central Reserve
Bank with Branches in All the
Larger Cities, MIR. Cages Idea.
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 500 mem
bers of the association and their guests
were present. George F. Baker pres
ident of the First National Bank act
ed as POSTMASTER
Besides Secretary Gage. the speak
ers were; Ex-Speaker Thomas B. Reed
the Rev. DIR. Donald S. Mackay, ex-
Judge Henry e. Howland and Amos
Parker Wilder. The toasts to which
they responded were, respectively:
Business and Legislation" "The
corporate Conscience land the Men
Who Help to Make" Lawyers and
Financiers,'' and "The West and the
Money Power"
1t was 10 o'clock when Mr.. Gage
arose to speak and he was heartily
greeted by the diners.
Secretary Gage said in part:
1T is a strange anomaly that while
in nearly every other department Of
life Improvement is the indispensable
rule, in the great field of banking,
finance and exchange we go on with an
Indifferent regard to the handicap i'm
posed by defective methods and dis
miss with little consideration sugges-
tions which, if adopted, would advance
society and business affairs in the
great economic field of industry and
exchange. The evidences of improve
ment in all other departments of life
are manifest on every hand. Old ma
chinery is thrown away.
I'm my late report to Congress" Mr..
Gage continued II took occasion to
call attention to the subject of bank
ing and currency, and to point out
what I believe to be defects in both.
Defects of Banking system.
Attention was called to what
consider the fundamental weakness of
our banking system in the United
| States. There was explained the func-
ton the bank performs as an inter-
mediary through which credit is made
available to the uses of production and
industry and this given power scarce
ly less great than the power of capi-
tai itself. An effort was made to
show, in the words of very clear
writer upon the subject of banking,
that the bank is an institution to
..E
other members of the community,
which, except for the office of the bank,
would be non-available for the uses
of life. And, in passing this
point. let me repeat a suggestion made
day or two since by a gentleman
who said the nomenclature of the
street ought to be changed. We read
all the time he said. of the rates OF
money. To-day money is quoted at 2
per cent: tomorrow 3, and next day 6,
to be followed perhaps by a rate as
high as 10 or Il, and people become
alarmed about the scarcity of money as
indicated by these high rates, when
substantially there has been no change
in the volume of money, either in the
hands of the people or remaining un-
der the control of the banks. What
ought to be quoted is not money, but
credit. What is the price of credit,
stated IN the terms OF interest IL Is
credit that is getting difficult, not ac-
tual money that is becoming scarce
wherein Weakness Lies.
1.-THE weakness of our banking sys-
tenn is in the isolation and entire sep
arateness of the individual banks over
the country. When a period of dis
trust or doubt comes over the land
there is a seeking of personal safety
through that general instinct of self
preservation which drives men in a
confused mass over each other at the
cry of Fire in a theater. I ventured to
suggest a system of coalition between
individual members of the banking
community through the country into
one central institution with conven-
lent branches in the larger cities In
which all banks should be related or
Interested according to their individual
relative importance, and which in
certain sense should represent to the
banking interests of the country what
the federal government represents In
our political system. Great prejudice
exists, know against the aggregation
of great wealth in the hands of few
men. Happily 1t is the law of nature
that larger gains and better advant-
ages can be secured to aggregated
wealth by serving faithfully the COM
mon interests than by exploiting the
community through a system of bank
ing, exchange, education and the tele-
graph"