The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1912-12-04
Revenues Will Fall Short of
Expenses Next Year.
DISCUSSES CURRENCY REFORM
He Holds the Government Re-
spOnsibIe for Panics.
Suggests a Plan for COnsidera-
tiOn of Congress.

Washington, Dec. 4.-StrOngIy urg-
ing radical reform of the ''unreasoned
and unscientific'' banking and cur
rency system of the United States,
Franklin MacVeagh, secretary of the
treasury, freely warns congress in his
annual report submitted today that
present scheme exists, will be exclu-
siVely responsible for the commercial,
industrial and social disasters which
flow from panics and attack, directly
or indirectly, every home in the ma
ton.
The present system promotes and
develops panics and legislation is urg-
ent, declared Mr.. MacVeagh, in out
lining his idea of the necessary gem
eral provisions of adequate relief
measure. Aside from affording fexi
bic and elastic currency and reserves,
such revision, he says, should bring
the banks into organized cooperation
and provide for a central agency
through which they could work to-
gether, free of political or trust con-
troll.
According to the estimates of the
treasury department. the secretary
foresees a deficit of $22, 556, ,023, ex-
elusive e OF s; Panama canal expe4diturees' e
Tor the hscal year ending June 80,
1914, the first fiscal year of President
Wilson's administration. Including
the canal expenses, the deficit is esti-
mated at $52,730,455. The canal ex-
penditures, he adds, however, may be
paid under the law from bond sales
The estimated receipts for that year
are $710,00O,00O, while the ordinary
appropriations are estimated at $751;
55 6,023, and the canal expenditures at
$3O,174.432. Undoubtedly having
probable tariff revision in mind, the
secretary announces that these esti-
mates are based upon present condi-
tions and laws.
Surplus This Year
For the current fiscal year, ending
June 80, 1913, Mr.. MacVeagh esti-
hot
$40,200,000, exclusive of Panama
canal expenditures, and a deficit of
81, 5000 600 including the canal trans |
actions. He estimates receipts for this |
bursements at $670, 100000.
In connection with financial re- |
form, Mr.. MacVeagh says the people I
are helpless under existing evils. The
ton at any time, because its liability |
to sudden constraint and restriction is
always a part of the nations financial
consciousness
There never is a time,'' continues
the secretary of the treasury when
there is any long look ahead; except
when we are in the midst of a panic |
when there is a long look of disaster
ahead. There is never a long look of
ease and convenience and prosperity
ahead"
In the crop moving season, Mr.. Mac
Veagh points out, there is a special
found an object lesson in the condi-
tions during the past autumn when the
banks were called upon to finance the
movement of record breaking crops,
necessftating the employment of near
ly all of their available resources un-
der "our constructing system"
This relief which is SO urgently
needed by the legitimate business and
enterprise of our people, he adds,
sis not relief from financial situation
built up by financial world itself,
but is from a system and conditions
superinduced by the government and
forced upon the business community
and upon American society. The
banking and currency system is the
product of federal law. And there can
be no relief from it until Congress acts.
And this is why congressional action
is urgent"
Where Reform Is Needed.
Pointing out that the banks fOrtu-
nately had been able to finance the
crop movement of the past autumn
unaided by the government, the sec
retery saws that the anomalous reIa-
ton between the treasury department
and the general financial world is
mart of the system to be reformed He
added: Taking large sums of actual
money out of the ordinary financial
use and locking it up as dead mass
in the vaults of the treasury is a pro-
ceeding as unscientif1c and unreason-
ed as any other part of our unreasoned
system .
banking and currency system, the sec
retarv declares, must include, among
its necessary features, provisions for
never-faiIing reserves and never-fa1I-
ing currency, and for the perfect
elasticity and f1exibility Of both; for
the perrnanent organization and organ
ized cooperation of the banks Whlcn
are now suffering and causing the ma
tion TO suffer by reason of their un-
organized state; for central agency
10 represent and act for the organ1z-
cd and co-operative banks-this agency
70 he securely free from political or
+rust control but with the govern
ment having adequate and intimate
supervision of it; for independent
ha hiking units-so independent that nc
one hank can be owned, controlled or
shared in in any degree, directly or
Indirectly, by any other bank; for the
equality of all banks, national or
state both as to standards and as TO
functions-so that every requirement
made of national bank must be com
piled with equally by a state bank
and every function or privilege en-
joyed by a state bank shall be enjoy
ed by a national bank; for the utlh-
zation and the f1uidity of bank assets;
for the scientific development of ex-
changes-domestic and foreign; for for
eign banking as an adjunct of our ror-
eign commerce.; and for taking the ;
treasury department out of the bank
ing business" Ii
Customs Reforms.
Discussing customs reforms, Secre-
tary MacVeagh says that widespread