The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1912-12-04
Our Currency System, Secre-
tary of Treasury Says, Is a
Breeding Place for Ma
tional Panics.
POINTS NECESSITY
OF MAKING CHANGE
So Long as Present System
" Is Retained the Govern
ment Is Responsible for In
dustrial Woes.
National News Association


WASHINGTON, Dec 4.-As long as
our banking and currency system re-
mains as it is the immeasurable dis
aster of a panic will remain a possi-
bility. The system under which we are
living, not only would not prevent a
panic, but after certain point in the
generation of panic conditions is
reached, will make it inevitable 80 that
as long as the financial system Great
ed by our federal laws remain un-
changed and unreformed the govern
ment will be exclusively responsible
for the commercial, industrial and So
cial disasters which flow from panics.
With this strong warning backing up
an urgent plea for immediate banking
and currency reform, Franklin Mac
Veagh, secretary of the Treasury opens
his annual report on the finances of
the nation which was sent to congress
today Continuing Secretary Mac
Veagh says:
People Are Helpless.
This responsibility is a fixed one.
1T Is unavoidable, and ought to be
frankly recognized and acknowledged.
The people are helpless. The character
of their responsibility is better under
stood when it Is realized that the ef
fects of financial panics are not at all
confined to the banks and the larger
business world. A panic such as that
OF 1907 or a lesser panic reaches d.
.rectly or indirectly every town and
hamlet of the country and every fam
lily and individual.
1T nationalizes itself long before it
has gone far; and its interruption of
the business movements large and
small, it's fracture OF the organization
under which commercial and indus
trial life go on and the resulting social
suffering are prolonged into years.
These facts intensity the signif-
canoe of the delays and postpone
ments of the government. A panic is
as unnecessary and svoidable as an
epidemic of smallpox. You can have an
epidemic of smallpox If you disregard
all that science has provided as pre-
ventative. You can not possibly have
an epidemic of smallpox if you will
apply the simple means that science
has provided. So we will continue to
have panics only so long as We refuse
to apply the simple preventatives
which he who runs may read.
Calls System Unfit.
mot only does the system estab-
lished by the present federal laws pro-
mote and develop panics but at all
times the country is carrying the
needless and heavy burden of an unfit
and wholly insufficient banking and
currency system. This system never
permits entirely free commercial
financial or industrial acton at any
time. because its liability to sudden
constraint and restriction Is always a
part of the nations financial conscious
ness. There never was a time when
there is any look ahead; except when
we are in the midst of a panic, when
there is long look of disaster ahead
There is never a long look Of ease and
convenience and prosperity ahead
This is true even in the quietest Pc
u'iods of the year.
fortunately the banks have been
able unatded to carry on this autumn,
the financial operations necessary to
the movement of our vast crope and at
sIhC ouAhS IlluS W HuduCS tIO opera
tions Of the general business expan-
sion-even in the face Of European
disturbance. should have been sorry
to feel 1t necessary for the treasury
department to intervene at such a nor
NAL period as this. But of course, 1t
would have assisted IL it had become
Aecessary.
Continuing Secretary Macveagh
says:
Taking large sums of actual money
out of the ordinary financial use and
docking 1t up as dead mass in the
vaults of the treasury, is a proceeding
Rs unscientif1c and unreasoned as any
other part of our unreasoned and un-
scientific banking and currency sys-
TEN. But until that system Is chang
ed SO as to provide trusty system Of
banking reserces, 1t seems to me the
treasury department performs as Incl
dental to its very bad share in the
banking and currency systems, some
functions as a reserve center which
are Of very great value"
What Is Required.
cit Is not my intention to speak of
the details of this urgent relief meas.
ure--this banking and currency legis-
lation. But the general features of the
new system-if that system shall be
at all adequate to the emergency
must include among its necessary fea-
lures provisions for never-failing re-
tserves and never-failing currency and
for the perfect elasticity and flexibil.
aty of both; for the permanent organi-
l..
lC0ntinued on Page Six)