The Washington herald., 1910-12-09
Secretary MacVeagh Calls At
tentien to Big Cut.
BANKING SYSTEM IS FAULTY
Treasury Head Declares PRnics Un-
avOidabIe with Present Lack of
Reserve Fuads-HoIds American
Ranks Abroad Necessary to Foster
United States Commerce.

/ In the beginning or MS report MI
MacVeagh calls attention to the fact
that more than 0O,0OO has been saved
in the executive departments proper as
compared with the appropriations for the
current year. The ordinary estimates for
| 1sfz he SAYS, are almost ST. 100000 less
than the estimates ultimately reported TO
Congress for the year 1911 The reduc-
ton in the estimates for 1913 is TO De
added in the consideration OF reduced
government expenditures to the reduc-
ton made last year. since II Is now al
most two years since the present ao-
ministration began the curtailment OF the
estimates.
Speaking of the Panama Canal Mr..
MacVeagh declared that it might %
wise If Congress would authorize the Is
suance OF $50 100000 or 0O,e00.oOO OF 3 per
cent panama Canal bonds, Congress au-
thorized the issuance of $290,56S,0oo worth
OF Panama bonds, at any rate OF interest
up to per cent
| Mr.. MacVeagh believes that Il is POS
sible to make a trial issue OF these oonds
without the circulation privilege, winch
would nut them into the hands OF invest
ors and would not affect the value or the
| q. Therefore, they might not reach the
omen market. and the value of the y
! as a basis for circulation would never be
/ in danger.
/ Mr. MacVeagh, however, insists that
! the difference in the circulation tax TOT
the Is and for the proposed Panama
bonds should be equaiized- The circulA-
/ ton tax on p Is one-half OF per cent
The tax on Panama IS, therefore, Mr.
| MacVeagh believes, should be l IL per
cent
Panfcs Due to Present System.
| Panies, Mr. MacVeagh asserts, are like
| " 10 continue in this country so long as
we keep our present banking system.
.-Panics." says he. ARE no longer nee
essary and no longer respectable They
are avoidable, but not under our system
our system can fairly be called panic
breeding system. It is for the govern
ment to say whether IT viii have panics
| In the future II viii not cost penny
70 prevent them. We have no system OF
reserves. Our banking system destroys
reserves. II concentrates in New York
what are pretended TO be reserves. and
then forces the New York banks to lend
and abolish them. We have no way 10
increase our currency when it is needed.
except under the AIdrich- Vreeland law,
which will soon expire and which is only
| intended for emergencies.
| There is a clear need the Secretary
saws. OF American banks in foreign coun-
| tries. where American commerce needs
banking facilities We shall never be
| internationally a full-hedged commercial
nation, he believes. until We have mer-
/ ehf ~ nd ion
/ banks OF our own.
Mr.. MaeVeagh believes, also. that na-
tional banks should be permitted to do
the business of trust companies.
| The regulation that payments OF rev.
| enue to the government must be made in
actual currency, the Secretary holds, is
| archaic. He sees no serious practical
| danger in taking a certified check; all OF
/ the similar business Of the country. he
asserts, is done by checks. and they are
not even certified. He does not concede
/ that the government would be likely 70
! lose a penny ''in a thousand years" by
making this change.
/ Under the present law gold certificates
may be issued only against United States
/ coin. Mr. MacVeagh proposes that Con-
! gress authorize the issuance OF such GER
| tifcates against foreign coin and bullion.
The sinking-fund law, Mr.. MacVeash
| says, has fallen into neglect 1t should
be revived, he thinks, to point where 1t
/ can be obeyed-
When he speaks of the attempts made
! nv the government 10 collect the duties
coming TO it from returning European
| travellers. Mr. MacVeagh does not conceal
/ his anger.
$50 entirely oblivious were a large
number of our tourists 10 the moral con-
siderations involved in these crimes" he
saws, "that the attempt Of the govern
ment to reform the service and make II
honorable and useful met with criticism
and resentment exactly as If the gov
| eminent and not the smugsiers were
committing the crime.
Morale of Service Improved.
THE improvements made in the Gus
toms service have increased the revenue
at most of the Eastern ports to a re-
markable degree. The morale through
out the service has been improved, and
the personnel. standards. and methods
are better"
Mr.. MaeVeagh does not agree with the
widespread belief that the government
can save S3OO.OOO.OOO
'Srhe popular impression as 10 the ex-
tent OF possible economy in the admins
tration, of the executive departments, ="
says he. lis singularly exaggerated. and
this misconception is very harmful"
Mr. MaeVeagh hopes for an organized
coordination over appropriation bills
among themselves and of revenue esti-
mates and other estimates with appro-
priation bills. and of an organized CO
operation between the executive and the
legislative departments. with view OF
| securing as far as possible the advan-
tages that other governments enjoy by
reason of the budget system" He says
that the question OF expenditures of a
great government like the United States
is altogethe.' too large and complex to
be handled scientifically by anything but
thoroughly organized responsibility,
which shall represent both the legisla-
tive and executive departments"
His last paragraph is devoted to the
tariff board I'VE have" says he at
last arrived at the possibility of a scien-
tific treatment OF tariff legislation. We
have arrived where the interests of all
concerned-those of the manufacturer,
those of the merchant. those of the con-
sumer. and those of the government
can receive fair, scientific. competent, and
nonpartisan consideration on the basis
of reliable facts and knowledge The
! trustworthy assistance of this board will
soon enable Congress. whenever it is
ready to legisIate on the tariff, to pro-
coed properly"
Mason Before Naval Committee.
Rear Admiral Newton E, Mason, Chief
of the Bureau Of Ordnance OF the Navy
Department, appeared before the House