Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1912-12-04
Secretary of the Treasury
Wants Immediate Bank
ing Legislation.
WILL PREVENT PANICS
Central Agency Through Which
Financial Institutions May
Work Together.

Washington, Dec. 4.-Strongly urg-
ing radical reform Of the "unreasoned
and unscientifc" banking and curren-
cy system of the United States. Frank
lin McVeagh. secretary OF the treasury,
freely warns congress in his annual re-
port submitted today that the federal
government, as long as the present
scheme exists, will be exclusively re-
sponsible for the commercial, indus
trial and social disasters which flow
from panics and attack, directly or in
directly. in every home in the nation.
The present system promotes and de-
velops panics and legislation is urgent,
declares Mr.. MacVeagh, in outlining his
idea of the necessary general provis-
ions of an adequate relief measure.
Aside from affording flexible and elias
tic currency and reserves, such revis-
ion, he says, should bring the banks
into organized cooperation and provide
for a central agency through which
they could work together, free of po-
litical or trust control
According to the estimates Of the
treasury department, the secretary
foresees a deficit of S22, 2,556,023, exclu-
sive of Panama canal expenditures. for
the fiscal year ending June 80, 1914,
the first fiscal year of President Will
sons administration. Including the
canal expenses, the deficit is estimated
at $52,730,4 ass. The canal expendi-
/ lures, he adds, however, may be paid
under the law from bond sales. The
estimated receipts for that year are
/ $40 900, 900, while the ordinary ap-
preparations are estimated at $732,556,-
I 023, and the canal expenditures at $780,
/ 174,432. Undoubtedly having probable
tariff revision in mind, the secretary
announces that these estimates are
/ based upon present conditions and
| laws.
YEAR SURPLUS S4O.2OO.OOO.
For the current fiscal year, ending
June go, 1913, Mr.. MacVeagh's esti-
mates that there will be a surplus of
S4O,20O,O00, exclusive of Panama canal
expenditures, and a deficit of $780,
600 including the canal transactions.
He estimates receipts for this year at
ments al $670,SOOOOO.
In connection with the financial re-
form, Mr.. MacVeagh says the people
are helpless under existing evils. The
present system never permits free ac-
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 period, Mr.. Mac
Veagh points out, there is a 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 Un-
This relief which is so urgently
needed by the legitimate business and
enterprise of our people" he adds, lis
not relief from a financial situation
built up by financial world itself. but
is from a system and conditions super
4 induced by the government, and fore
:, ed upon the business community and
5 upon American society. The banking
j and currency system is the product OF
t federal law And there can be no relief
e from it until congress acts. And this
I is why congressional action is urgent.
NEVER-FAILING RESERVES.
Pointing out that the banks fortun
ately had been able to finance the croI
movement Of the past autumn unaideC
by the government, the secretary says
that the anomalous relation between
the treasury department and the gen
eral financial world is a part of tn,
system to be reformed. He added
Taking large sums of actual none,
: out of the ordinary financial use ant
!, locking II up as a dead mass in tn,
vaults OF the treasury is a proceeding
:, as unscientiflc and unreasoned as an
, lother part of our unreasoned and III
scientific banking and currency sys
. tenn"
A relief measure reforming the banl
ing and currency system, the secretar
declares, must include, among its nee
1t essary features. provisions for nevel
Is failing reserves and never-failing cul
20 .1- S.-sr
le and hexibiiity of both; for the perm;
nent organization and organized CT