The San Juan islander. [volume] (Friday Harbor, Wash.) 1898-1914, 1910-12-16
CURRENCY REFORM
IS URGED
PRESENT MONETARY SYSTEM
BREEDER OF TROUBLE,
SAYS MacVEAGH.
Secretary Of Treasury Warmly Urges
Changes in Financial Laws and Gen.
eral Abolition of Red Tape-System
Of Reserves Observation-Disclosures
Tax.


form, extension of the scope of the ma
tiOnal banking laws, in the event OF
no immediate general changes in 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 whenever it clogs the wheels
of the governments business, are
among the recommendations contain
ed in the annual report of Franklin
MacVeagh, secretary of the treasury.
The expenses of the government in
the fiscal year 1913, for which this ses-
sion of congress is asked to appro-
pirate are estimated at $500, 494 ,013.12.
The estimated expenditures of the
Panama canal are given as $56,920.-
847.69, making total of $687, 414, :
860.81. The estimates, if carried out,
represent net savings of about $13,-
100000 in the executive departments,
as compared with the appropriations
for the current fiscal year.
Surplus About $50,o0o,0oo.
Receipts for 1911, Secretary Mac
Veagh estimates, will be $68O,OO0, 900,
which would leave an ordinary surplus
of about $50,0OO,0O0.
If the treasury should continue to
pay for the Panama canal out of the
cash drawer as at present, such a sur
plus would be turned to a deficit of
$7,414,860.81.
Secretary MacVeagh expresses the
hope that the monetary question will
come into congress detached from sec
tional or political considerations.
"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 liza
BILE to panics and the devastations of
panics reach Republicans and Deme-
Gratis and all parts of the country
alike. Panics are no longer neces-
sary and no longer respectable. It is
for the government to say whether we
shall have panics in the future or not.
It is mere matter of choice.
System Of Reserves Needed.
I'VE have no system of reserves.
Our banking system destroys them. 1t
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 the secre-
tary's most important recommends
lions concerns future issues of Pan.
anna bonds of which 100000 were
authorized by the tariff act. The sec
rotary renews the recommendations
made last year for legislation to tax
the new bonds at 1 II per cent if used
by national banks for circulation, and
intimates, as was announced in news
dispatches few days ago, that it
might be more preferable to issue the
new securities for investment pur-
poses only at rate of per cent.
Circulation Tax Suggested.
AS check against the use of the
bonds as the basis for further inf1a-
ton of the national bank currency, he
suggests that circulation tax of even
p per cent would have the effect OF
making them improbable for banks to
use for such purpose and at the same
time would make them attractive to
investors without injuring the 2-per
cent bonds, of which more than $780,.
100000 are outstanding. Another
means of accomplishing the same end,
the secretary suggests, would be for
congress to authorize an issue of $50,
100000 or $10O,O00,O0O of the bonds at
3 per cent, without the circulation pro-
vision. If there is no prospect of i'm
mediate change in the monetary sys-
tenn, the secretary thinks the Ameri-
can national banking system should be
developed to perform an international
function.
x0CA0 10 q ClCdI A00O VI UauhA16
facilities in foreign countries where
there is American commerce." he says.
I'VE shall never be a full-fedged com
mercial nation unless we have mer.
chant ships of our own and foreign
banks of our own. We should have
banks at all ports that are important
to our commerce"
Certified Checks to Pay Revenue.
The treasury's relations with the
business communities are unbusiness-
like, artificial and burdensotne, the
secretary declares, and he recommends
Legislation to permit the payment q
revenue to the government by cert.
fed check. guarding the government
against loss.
The recommendation that the treas
|ury be authorized to- issue gold Ger
tiflcates against gold bullion and TOR
| eign coin is renewed.
Reviewing the discovery Of frauds
and the subsequent reorganization q
the customs service. Secretary NAG
EYeagh urges appropriations for re-
wards to those who aid the govern
Iment.
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