The Birmingham age-herald., 1912-12-05
SECRETARY URGES \.
 BANKING REFORMS.
Treasurer MacVeagh Sub
 mits His Annual Report
FORESEES BIG DEFICIT
Including Canal Expenses, He Es- inmates Wrong Balance Will Be Over Fifty-Two Million
 Dollars

 urging radical reform of the "unreasoned and unscientihe' banking and currency system of the United States. Franklin Macveagh, Secretary of the Treasury, freely warns Congress in his annual re- spert submitted today that the federal government, as long as the present scheme exists, will be exclusively respon- sible for the commercial, industrial and social disasters which flow from panics and attacks directly or indirectly, every home in the nation.
 The present system promotes and de. velops panics and legislation Is urgent. declared MT MacVeagh, in outlining his idea of the necessary general provisions of an adequate relief measure. Aside from affording flexible and elastic currency and reserves. such revision, he says, should bring the banks into organized cooper atior and provide for central agency through which they could work together. free of political or trust control.
 FOresees Big Deficit
 According to the estimates of the treas ury department. the Secretary foresees a deficit of s22,556,o23 exclusive of Panama canal expenditures, for the fiscal year ending June 30. 1914, the first fiscal year of President Wilson's administration. In- cluding the canal expenses the deficit Is estimated at s52, 73O 455. The canal ex- penditures, he adds, however. may be paid under the law from bond sales. The esti- mated receipts for that year are s7lO,OOO- GOO, while the ordinary appropriations are estimated at s732, ,023, and the canal ex- penditures at s3o. 174, 432. Undoubtedly hav- ing probable tariff revision in mind, the secretary announces that these estimates are based upon present conditions and laws.
 For the current fiscal year, ending June 30, 1913, MT. MacVeagh estimates that there will be a surplus of $40, 200,00o. ex- elusive of Panama canal expenditures, and a deficit of slSOo,0Oo, including the canal transactions. He estimates receipts for this year at $7ll,00o,0oo and ordinary disbursements at $670S00,000.
 In connection with financial reform, MT. MacVeagh says the people are helpless, under existing evils. The present sys- tenn never permits free action at any time, because its liability to sudden con straint and restriction is always 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 panic when there is a long look of disaster ahead. There is never a long look of ease and con venience and prosperity ahead.
 This Year an Object Lesson
 Tn the crop moving season MT. Mac Veagh points out, there Is special stress and restraint and the secretary 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. necessitating the employment of near ly all of their available resources under tour constructing system"
 This belief which is so urgently needed by the legitimate business and enterprise of our people, he adds, is not relief from a financial situation built up by a financial work itself, but is from system and conditions su- perinduced by the government; and forced upon the business community and upon American society. The bank ing and currency system Is the product of federal law. And there can be no relief from 1t until Congress acts. And this Is why congressional action is ur- gent"
 Pointing out that the banks fortu- natelv had been able to finance the crop movement of the past autumn un- aided by the government, the score tary says that the anomalous relation between the treasury department and the general financial world is a part of the system to be reformed He added: "Taking large sums of actual money out of the ordinary financial use and locking 1t up as dead mass in the vaults of the treasury is pro ceeding as unscientific and unreasoned as any other part of the our unrea- soned and unscientifc banking and currency system
 Necessary Features
 relief measure reforming the banking and currency system, the sec retary declares, must include, among it's necessary features, provisions for never failing reserves and never fall ing currency, and for the perfect elas- ticity and fiexibility of both; for the permanent organization and organized co cooperation of the banks which are now suffering and causing the nation to suffer by reason Of their morgan ized states; for a central agency to represent and act for the organized and cooperative banks--this agency to be securely free from political or trust control, but with tho government having adequate and intimate super vision of it; for Independent banking units-so independent that no one bank