Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1910-12-08
URGES BUSINESS
METHODS IN WORK
OF TREASURY DEPT.
Secretary MacVeagh Would
Eliminate Practical Politics
from Customs Service.
HIS ANNUAL REPORT IS
TRANSMITTED TO CONGRESS-
Declares for Currency Reform
and Extension of Scope OF
National Laws.

WASHINGTON, Dec. s.-Currency re-
form: extension of the scope OF the
national banking laws, in the event OF
no immediate general change Of the
monetary system; civil service retire
ments a customs service free from
practical" politics, business-like meth
DDS in the daily transactions OF the
government and a general abolition OF
red-tape wherever it clogs the wheels
of the governments business, are
among he recommendations contained
in the annual report of Franklin Mac
Veagh secretary of the treasury, pre-
scented to Congress today.
The expenses of government in the
fiscal year 1872, for which this session
of Congress Is asked to provide, are
estimated at $3.50, 494, 01S.12. The estl-
mated expenditures on the n
canal are given as 500, 900, s47.6 3 making
q total Of 1857, Ala, $50. 81. The estimates,
II carried out. represent net savings OF
about $751; 900, 900 in the executive de-
m as compared with the APP
preparations for the current fiscal year
while the secretary's report esti-
mntes the total expenses of govern
ment at $6S7, Ala, 500, the estimates
which have been transmitted to Con-
gress ask for $74S, Ala, 1851, a difference OF
s61, 900, 900. Congress is asked to appro-
pirate this extra s61. 900, 900 to make the
sinking fund law effective. 1t would
be an appropriation to permit the
treasury to begin applying l per cent.
a year to the discharge of the national
debt. The law authorizing such a pro-
cedure has been a dead letter for some
time. as Congress has never sppropri-
ated any money"
Receipts for 1872, Secretary MacVeagh
estimates, will be $3.50. 000, 900, which
would leave an ordinary surplus of
around $50, 900, 600. If the treasury
should continue to pay for the Panama
canal out Of the cash-drawer, as at pres1
ent, such a surplus would be turned to
a deficit of s7,414. s60.s
Secretary MacYeagh expresses the
hope that the monetary question will
come into Congress detached from Sec
tional or political considerations.
Panic-BrcedIng system.
Our system can fairly be called a
panic-breeding SYSTEM he says,
whereas every other great national
banking and currency system is panic
preventing. AS long as we continue
under our present system we are
liable to psnics and the devastatipns
-f p~hnicSFeaeh Republicans and Demo
Gratis, and all parts of the country
alike. Panics are no longer necessary
and no longer respectable. 1t is for the
government to say whether we shall
have panics in the future or not. 1t is
a mere matter of choice.
I'VE have no system of reserves; our
banking system destroys them. II
concentrates in New York what
are pretended to be reserves, and then
forces the New York banks to lend and
abolish them. Our system. instead of
building up a reserve, destroys it as
fast as it inclines to accumulate"
In connection with his criticism of
the money system one of Secretary
MacVeagh's most important recon-
mendations concerns future issues of
Panama bonds, of which $3.50, 00e, 900
were authorized by the tariff act. The
secretary renews the recommendations
he made last e for legislation to
tax the new bonds at 1h per cent. if
used by national banks for circula-
ton, and intimates. as was announced
IN news dispatches, u few days ago,
that it might be preferable to issue
the new securities for investment
purposes only at a rate of 8 per cent.
AS a check against the use of the
bonds as the basis for a further in
ffation of the national bank currency,
he suggests that a circulation tax Of
even 9 per cent. would have the effect
of making them unavoidable for
banks to use for such a purpose. and
at the same time would make them at
tractive to investors without ~injuring
the 2 per cent. bonds, of which more
than $500, 000,0 900 are outstanding. An
other means of accomplishing the same
end, the secretary suggests, would be
for Congress to authorize an issue of
$50, 600, 900 or 800, 600, 900 of the bonds al
3 per cent. without the circulation
privilege.
For Better Foreign system.
If there is no prospect of Immediate
change in the monetary system the
secretary thinks the American national
banking system should be developed to
perform an international function.
There is a clear need of banking facili-
ties in foreign countries where there is
American commerce, he says.
I'VE shall never be a full-fedged
commercial nation" he says, unless
we have merchant ships of our own
and foreign banks of our OWL. We
should have banks at all ports that
are important to our commerce"
The t~reasury's relations with the