New-York tribune., 1910-12-09
CURRENCY REFORM
URGED BY MACvEAGH
Present Monetary System a
Panic Breeder, the Secre-
tary Says.
TAX ON PANAMA BENDS
Would Keep Their Use for Bank
Circulation-Economies Eff
fected, but Saving $780,
100000 Year Impossible.

uUU, UuU year Impossible.
washington, Dec. S.-CurreDcy reform. !
extension Of the scope of the national
ate general change of the monetary sys- !
tenn civil service requirements, a GUS
tens service free from practical poli-
tics businessIike methods in the daily
transactions Of the government. and a
general abolition Of red tape wherever ii
clogs the wheels Of the governments bust
ness are among the recommendations con-
tained in the annual report of Franklin
Macveagh. Secretary of the Treasury,
presented to the House to-day
! The expenses of the government in the
fiscal year 1912 for which this session or
Congress is asked to make appropriations
are estimated at $3.50. .494. .Gl3 T. The esti-
mated expenditures on the Panama Canal !
are given as 500 92O. SAT 50. making a total
of s6s7. IA, $50 81. The estimates represent
net saving of about SIS. 100000 in the ex-
ecutive departments. as compared with the
appropriations for the current fiscal year.
! While the Secretary's report estimates
the total expenses of government at sS8',-,
1880, the estimates which have been trans
mitted TO Congress ask for S74S.414, ,861. q
difference of SCI. .0o0. .0G0 Congress is asked
to appropriate this extra SOL 900. 900 TO make
the S1nklnS fund law eHeCiiVe. II WOuiQ
be an appropriation TO permit the Treasury
to begin applying 1 per cent a year TO the
discharge of the national debt The law
authorizing such a procedure has been a
dead letter for some time. as Congress has
never appropriated any money.
Receipts for 1912. Secretary MacEeagh
estimates, will be $3.50. 600 600 which would
leave an ordinary surplus of about $50
100000. If the Treasury should continue TO
pay for the Panama Canal out of its re-
ceipts as at present, such a surplus would
be turned into a deficit Of 81, $50 81
I Secretary MacVeagh expressed the hope
that the monetary question will come into
Congress free from sectional or political
consideration. He says:
Our system can fairly be called a panic
breeding system. whereas every other
great national banking and currency sy's-
rem is panic preventing. As long as we
continue under our present system We are
liable TO panicS, ana the deVastatonS OF
panics reach Republicans and Democrats
and all parts Of the country alike Panics
are no longer necessary and no longer re-
spectacle 1t ts for the government TO
say whether we shall have panics in the
future or not. 1t is a mere matter OF
choice
We nave system Of reserves; our
banking system destroys them 1t con-
centrates in New York what pre-
tended 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 fast as it in
Clines to accumulate.
To Equaiize Circulation Tax.
In connection with his criticism Of the
monetary system. one of Mr.. MacVeagh's
most important recommendations concerns
future issues of Panama bonds. of which
s290, ,000,C10 were authorized by the tariff
act The Secretary renews the recon-
rnendation he made last year for legisla-
ton to tax the new bonds at 112 per
cent if used by national banks for circu-
iation, and intimates that 1t might be
preferable 70 issue the securities for in
vestment purposes only at 8 per cent.
As q check against the use of the bonds
as the basis for q further imitation of the
national bank currency, he suggests that
circulation tax of even per cent would
have the effect of making them unprofita-
bic for banks TO use for such a purpose,
and at the same time would make them
attractive to investors without injuring the
. per cent bonds Of which more than
500 O00OG0 are outstanding. Another means
of accomplishing the same end. the Secre-
tary suggests, would he for Congress to
authorize an issue of S50.ooO,000 or $100 000OC0
Of the bonds at per cent without the cir
cuiation privilege
If there is no prospect Of immediate
change in the monetary system, the Secre-
tary thinks the American national banking
! system should be developed 10 perform
internat tfonaI function There is clear
need of banking facilities in foreign coun-
tries where there is American commerce.
He says:
We shall never De a full fedged com
1 rrercial nation unless have merchant
ships of own and foreign banks Of our
own We should have banks at all ports
~. INN, "a
The Treasuryss relations with the bust
ness community are unbusinessike, arti-
fetal and burdensome. the Secretary de-
cIares and he recommends legislation TO
hermit the payment Of revenue TO the gov
eru1nent by certified checks. guarding the
government against loss
The recommendation that the Treasury
be authorized to issue gold certificates
against gold bullion and foreign gold coin
is renewed
Reforms in Customs Service.
tsayiev-fng the discovery Of frauds and
! tho ranrgar1tzation of the customs service.
Secretary MacVeagh urges appropria tons
for rewards 10 those who aid the govern
menr The rehabilitation Of the customs
service at New York has been marked. he
saws. nv a decided elimination Of spoils in
, duences and practical politics.
American travellers are more ana more
realizing the indefensibleness of smuggling.
It's rank dishonesty and its bad example
and influence" says the report.
| Recommending a study of the CLASSIFIED
| system of employees. the Secretary declares
that a civil service retirement Is absolutely
the requisite Of satisfactory system The
i, contributory system of retiring allowances
he recommends as the only one which mas
9 = chance of adoption, and as best for the
. men and women OF the service. He urges
their friends to concentrate on that move
ment. A complete state of efficiency in the
government departments, he says is I'M
possible without some way OF retiring
clerks in a just and humane manner
Secretary MacVeagh strongly recon-
meuds that all non-potical offices be IN
. Guided in the classified service. Assistant
appraisers Of customs should De detached
from politics for the efficiency OF the ser
, vice. he says He pays high tribute TO
the men of the ufesaving service and urges
some form OF retirement for them.
Exaggerated Statements Harmful.
As the economies of administration which