The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1912-11-24
m'vEAGH Says
TAKE TREASURY
OUT OF BANKING
Government Operations in the
Money Market Constant
Business Menace.
HUGE GOLD SURPLUS IDLE
Cash Hoarded in Uncle Sans
Vaults Enough to Support
Credit OF the World.
NJ HON. FRANKLIN MAC vEAGH.
Secretary Of the Treasury.

NJ HON. FRANKLIN MAC vEAGH.
Secretary Of the Treasury.
No reform Of our banking and cur
rency system can be adequate which
does no, take the United States Urea
sury out Of the banking business We
have become so accustomed to the
banking operations Of the Treasury
that we have not realized how 1t has
developed into q powerful central bank.
The Treasury has greater power and
greater assets than the Bank OF Eng
land, which for years has been the in
st.tution at the foundation OF interna-
tfonal credit The Treasury Is the
stronges, bank in the world as regards
metallic reserves. Its enormous store
a the yellow metal Is not approached
by that Of any OF the great central
banks of Europe At one time the
Treasury was the creates: note-issuinS
bank, and 1: might become so again
The Bank of England, regarded
throughout the world as the strOn gest
Of all banking institutions, supports
the great structure OF English credit
on a gold reserve OF less than $780,
600. oJc. Our Treasury. In addition 10
81, 00O. coo. 0oe of gold held In trust
against gold certificates carries ne;
gold surplus varying from 100000 oo
TO $500. 900. 300. Our Treasury's hoard
of idle gold. in other words. would
support a greater bank than the Bank
Of England.
When the independent Treasury sys-
TEN was established, the idea was that
all the funds OF the government should
| be stored In the Treasury vaults IN
- frrAH he nod! .
val war lords kept their treasures in
strong boxes The independent Trea-
sury system was established In trouble
some financial days, when the State
banks were not the safest places for
the deposit Of money. The people de-
ciied that the public funds must be
kent in government vaults for safety
Rsslrsaas Could wake . Psssr.
But in these days OF well ganiIed
national banks. conducting their BUSH
ness under the watchfu1 eyes OF the
government. every one Keeps MS sur
plus funds in some bank Not ONLY
do private individuals and great cor
porations bank their funds from day
20 day. blu, all the municipalities and
STATE governments use the banks Tor
the safe keeping OF their money. The
national government alone holds TO the
mediaeval custom cf keeping its funds
stored away in vaults. No other great
eoyernment ,toes this. In England.
France. Germany and other leading
countries. government funds are de-
pox:ted in banks IKE the funds OF any
Gher tusianess.
Imagine the storm Of indignation
that would be aroused IL the railroads
a This country should insist on being
aid for transportation in money. and
men hoard this money FOR weeks and
months in strong boxes. To-. gross
receipts Of our railroads are In the
peishbcrhccda Of Ss.eeo. eoo.ooo year.
n the railroads boarded fhsir receipts
n money for only Four months they
vculd vile up q. ees. o,e.o0s. or nearly
= third Of all the money no~ ciTcuIai-
,nr An the country II this money were
s.ken GU, 81 the vaults Of the banks.
n would mean such a panic as no
|roun,ryr Ia. ever seen or ever will see
The banks Of the United ssafes have
about SIS. 900. e,c.oss ~ deposits on q
1oo~y foundation Of Si.see.sco.,o zoe. The
1xpersence Of the Icains banking coun-
sries in that deposit; liabilities can be
NulN Nd ;en-for-onc against cash IN
md. In central banking centres like
rev York and London. larger metallic
FUNDS arr needed. because in these
eeures are accumulated the haac
Saaking reserves. The View York
OUnhs. Tor example. keep about Ssse.-
-. s,a cash reserves against Ss-sss.-
De9.eeA deposits.
lNss - Caso Cves Cve0Ve.
In THE country Win our rigid laws
nxSng the minimum reserveo the eenHs
1vse hold. any loss Of cash by the
Hnuks means On instant contraction OF
mir lssaius power. ~ the hawks %
~ York s1a Chscase lose Siee.9Se.-