The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1897-11-20
Explains Points of Detail Not Gov
cred Before.
BOSTON JOURNAL QUERIES
PERTINENTLY PUT TO SECRE-
TARY OF TREASURY.
He Replies That it Is the Purpose to
Substitute Understanding Bonds
as Security for Circulating Notes
Answers to Other Queries Are
in Same Vein.

Boston, Nov. 19.-The Journal this
morning says:
The Boston Journal addressed to Sec
rotary Gage letter embodying the
following questions, which cover the
points of detail upon which doubt as
to the secretary's plan of currency re-
form has been expressed:
First, you put no limit of time with
in which the secretary of the treasury
shall substitute interest bearing bonds
for deposit of currency. Would it not
be fair to make some limit and not
allow the banks to feel that you get
the money in and they get no interest
except the saving of one-half of l per
cent tax?
Second, when you say the govern
ment shall guarantee the payment of
all circulating notes of the banks, do
you mean immediate payment, or only
ultimate payment? 1t would make
quite a difference in the treatment of
came shaky, which course the govern
ment was going to take.
Third, we have also heard it queS-
toned whether it was wise to invest
the 2 per cent guaranty fund held by
the government in bonds, as they might
fiuctuate in value, and it is suggested
that it might be safer to hold it in
money.
Fourth, is the redemption fund of 5
per cent to be counted by the banks as
part of their legal reserve?"
Secretary Gage replied:
Washington, Nov. is, 1897
Il avail myself OF the first leisure
moment to reply to yours Of the 18th
inst, in which you wish me to state
more clearly some of the points in my
recommendations. l will therefore say:
First, that it is the purpose in mind
TO substitute interest bearing bonds as
security for circulating notes. in sub
stitution OF currency previously de-
posted, as rapidly as the printing bu-
reau can get them issued, and in prop
er form. In fact, the delay would be
very brief
Second, the idea of requiring a de-
post of currency to begin with is to
make sure that there Will be no con-
| traction at all in this operation. Money
will go out as fast as it comes in The
! guaranty of the government I under
stand to mean q guaranty for immedi-
ate payment, not ultimate payment
Third as to the investment of the
per cent guaranty funds if invested
in government bonds. l will say that
as 21a per cent gold bonds are issued
the fiuctuation willno be violent I'M
less the debt hereafter should be great
~ increased, and as the investment
would probably be a growing sum,
the risk of a fall could be easily sus-
tanned by that guaranty fund.
Fourth, the redemption fund of 5
per cent q may conclude to recommend
10 per cent instead of. 81 is not to be
counted as part of the legal reserve
against deposits.
I feel much gratified at the friendly
interest YOU take in the suggestions
made by me- l do not know that they
are the best that could be made, but l
feel quite certain that if they could all
! be adopted, the government would find
itself as a bank of issue (and that is
what it is and what it will be for some
years TO Gomez, in an enormously bet
ter position than it now is. Very truly
yours, LYMAN j. GAGE"