The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1894-12-12
LYMAN CAGES PLAN.
He Presents a Scheme for Re-
forming the Currency
Agrees That It's Present COndi-
tiOn is a Weak One.
SHOULD BE SIMPLE.
Change Ought Not to be Violent
or Cumbersome.
His Plan Involves the Issue of
$25O,OOO,OOO Bonds.

WASHINGTON, Dec. IA letter was
read from Lyman T. Gage, the prominent
banker and tinancier Of Chicago. at the
opening Of the hearing of the house
committee on banking and currency to-
day. Mr.. Gage had been invited to ap-
pear before the committee, but as he was
unable to come, his vieWs were briefly
summarized by letter
Referring to the recommendation of
the president and secretary of the treas
ury AIr. Gage said- "Agreeing with the
Criticisms made by these officers of the
government as TO the present weakness
Of our situation and the great desirAbility
Of separating the government from the
direct responsibility Of currency issues.
1 am persuaded that the country is NOT
ready to accept their recommendations
as to the methods proposed.
''In making any change the method
should be 50 simple that all can cOmpre-
hend it and it should be seen that the
incidental effects would not be in any
direction disturbing 10 trade, commerce
or industry. l believe the Baltimore
plan carries the true principles of a
credit currency, but we cannot reach it
by one step aud years may intervene be-
fore it can be realized. In the meantime
the way for the government 10 step out
of the currency business and place the
burden Of redemption on the banks is
plain.
Authorize the issue Of $3.50, 600
of 215 per cent bonds, payable at such
timet congress may elect twenty five
years desirable) to be offered to sub
scribers at par
Accept in payment United States
legal tender notes or treasury notes, the
same to be cancelled.
Amend the national banking act so
that banks can obtain notes issued to the
face value of bonds deposited as security
for circulation. Reduce the tax on cir
culating notes TO one half Of one per
cent
This done. national bank notes would
make good the vacuum caused by the
retirement Of government notes. In fact
there would be some expansion under ii,
to be followed later by some contraction
through forced redemp ption of bank is
sues, if il be true. as some claim, that the
volume of circulating medium in the
| nited States is larger than can be main
tanned and that the outflow of gold is
natures method of equalizing things.
IF this be so, if contraction through
the expectation of gold or by a retire
ment Of a portion of the paper money be
a legal sequence of our situation, then
in that case the government being safe
from demands, the banks with circula-
tion outstanding would be obliged to
bring their issues within narrower limits.
But all this would work itself out aud
need not be dwelt upon at length now.
The problem is this-to take the gov
ernment out of the note issuing business;
first, without contracting the currency in
the process; second, without inviting ex-
pansiOn.
secretary Carlisle's plan is in danger
of being involved under the last sugges-
ton
Were the above suggestions to receive
serious consideration there are some feA-
lures Of the national bank act that would
require amendment in order to give note
holders easier and cheaper access to the
points of redemption than now exists.
Redemption agents in cities should be
restored, but these are details which 1
will pass by"