The record-union., 1894-12-13
Special to the REcoRp-UNIoN.

Special TO the RECoRD-UNIoN.
WASHINGTON, Dec. IA letter was
received from Lyman T. Gage, promi-
nient banker of Chicago, at the opening
of the hearing of the House Committee
on Banking and Currency to-day.
Referring to the recommendations OF
the President and Secretary of the Treas
ury, Gage said: Agreeing with the crit
icisms OF these officers OF the Government
as to the present weakness of our situa-
ton, and the great desirability OF sepa-
rating the Government from direct re-
sponsibiliuy for currency issues, L am
persuaded that the country is not ready
to accept their recommendations. Any
change in the method should be so simple
that all can comprehend 1t, and 1t should
be seen that the Incidental effects would
not be in any direction disturbing to
trade, commerce or industry. l believe
the baltimore PLAN carries the true prln-
ciples of credit currency, but we cannot
reach it in one step, and years may inter-
Vene before it can be realized. Meantime
the way for the Government to step out OF
the currency business and place the sud-
den redemption Of the banks is plain:
Authorize the issue of $3.50, 900, ,000i in y per
cent bonds, payable at such time as Con-
gress may elect twenty-five years is de-
sirable) to be offered TO the subscribers at
par; accept in payment United States le-
gal tender notes or treasury notes. the
same to be cancelled: amend the national
bank law so that banks can obtain note
issues to the face value of the bonds de-
posted as security for circulation and re-
duce the taxes on circulating notes to or
l per cent.
This done, national bank notes would
h pa
tirement of Government notes. In tact,
there would be some expansion under 1t,
to be followed later by some contraction
through the forced redemption OF bank
issues, if it be true, as some claim, the
value of the circulating medium in the
United States is larger than can be main
tanned, and the outflow of gold is natures s
method of equalizing things.
"rhe problem is this: To take the Gov
ernment out OF the note-iSsuing business,
first, without contracting the currency in
the process, and, second, without Inviting
exhaustion. Secretary Carlisle's plan is in
the danger involved under the last sug-
gestion.
Besides the above suggestions to re-
ceive serious consideration, there are some
features of the National Bank Act that
would require amendment III order TO
give note-holders fair and cheaper access
10 points of redemption than now exist.
Redemption agents in cities should be
restored. But these are details which L
will pass by"
A letter was also read from Edward n.
Gibbs, Treasurer of the New York Life
Insurance Company, approving the ma
tional bank system, with some modlt1ca-
ton.
George C. Butler of New Haven, Conn.
presented a currency plan differing from
that of the Secretary and the Baltimore
plan. Its features include note issues up
removal OF the Comptroller OF the Cur
rency to New York, where he is TO have
control of a specie reserve made up OF %
per cent. of the notes issued. Butler's S
plan also proposed board of bank oifi-
GERS in New York, presided over by the
Comptroller of the Currency; also. to
erect suitable building in New \ York for
a Currency Bureau.
Mr.. Butler was questioned at great
length by every member of the commit
tee, showing exhaustive familiarity with
practical banking. He said the require
ments of Secretary Carlisle, that all ma
tlDnal banks guarantee the notes of each
bank. would nullify the law. Banks
would not accept such unknown respon-
sibility. There might be no real risk
owing to the safeguards provided by Mr..
Carlisle, but the boards OF directors
would never vote to accept the risk.
Mr.. Butler and Horace White OF New
York we've further questioned, after re-
cess.
Mr.. Cornwall of Buffalo was expected
to address the committee, but as he failed
to put In an appearance, the committee
adjourned until tomorrow.