The sun. [volume] (New York [N.Y.]) 1833-1916, 1897-10-30
REFORM OF THE CURRENCY.
sECRETART GAGE SUBMITS HIS
PLAN TO THE CABINET.
II Proposes to Reduce the Governments De-
rnand obligations, and so to Amend the
National Ranking Act ns TO Prevent Any
Unnecessary Contraction OF tho Currency.

II Proposes to Reduce the soNernHe"'' -
rnnnd OBLIGATIONS, and SO TO Anenu tno
National Banking Act ns To PrcNent any
GunecessnrJ Contraction OF tho Currency.
wAsmYaToN. Oct. 29.-sccrctsry OF the Treas
ury Gage to-day formally submitted TO the Cab
met the plan OF currency reform upon which he
has been hard at work for several weeks. Az
one or two previous meetings OF the Cabinet
MIR. Gage has talked at length with the Presi'
dent and his colleagues in an Informal way
about his pro osGd financial recommendations.
At their suggestion ho presented to-day in
writing his completed scheme for approval, In
anticipation Of making II a part of his annual
report to Congress. Mr.. Gage says:
"In their respective annual reports to Con-
rrcss my predecessors, since the close OF the
late war, have called attention with unfailing
regularity to the menace to the public credit oc-
casioncd by the continued use OF tho large vol
umo of demand liabilities represented by the
legal tender notes, and nave constantly appealed
for such legislative action AS would remove the
dangers pointed out. Although these warnings
and appeals have not as yet met with the
responsive action that their serious nature
~3ustifcs, It Is not the part of wisdom
now to ignore or pass thsm by. In fact. all tho
reasons upon which these warnings and appeals
were based have received additional force as
timo has gone on. The enormous depreciation
in the commercial value OF silver as compared
with gold has greatly increased the financial
responsibilities Of tho Government in its de-
mand liabilities. and all the logical consequences
of the fact should be boldly faced.
Under the act OF 1873, requiring the pur-
chase and coinage of silver. supplemented and
enlarged "a that act was by the so-callcd Sher.
man act of 1890, there were outstanding June
80, 1897, the sum OF $685. 75. &C., in silver dol.
lars. or certificates OF deposit representing them.
Under the act OF 1890 there were also outstand.
ing Slli.S6T. $50 in Government notes. clothed
with tho quality Of legal tender. In the act Of
Nov. /. 1898. repeating the purchasing clause OF
the act OF 1890. it was declared to be the policy
OF the United States to secure by safeguards of
legislation tho parity in value OF tho coins Of
tho two metals, gold and silver. and the equal
power OF every dollar at all times in the mar
kcts and in the payment of debts
Comfortable to the spirit Of this declaration,
the Treasury Department has treated gold and
silver coins and the paper representative of both
as OF equal dignity and value in all its opera
tions. In the collections OF its revenues. whether
in the form of excise taxes or Of customs dues. it
has made discrimination against neither. while
upon the other hand 1t has held itself ready to
pay to the public creditor whichever OF the two
he might choose to receive as tho moro de-
sirable to him. Even further than this. it has
declared itself ready. whenever necessary to the
hlhlLitSbhhIco VI thlo patty, " CANuhnH oh oven
terms, at the pleasure Of the holder, either form
OF the metallic money for the other. These prac-
teal operations and declarations were neces-
sary, and they have operated to keep in concur.
rent circulation. on terms OF equality, the two
kinds Of metallic money. Notwithstanding tho
varying but never ceasing disparity between
the natural or commercial value Of tho one as
compared with the other.
Nevertheless. it must be recognized that this
undertaking involves a large financial RESPONSE.
bility and requires proper and adequate legisla-
tive provisions for its continued exercise. In
its final definition of Government responsibility
1t means that, in addition to its liabilities for
redemption in gold on demand Of $346, oOO, 900
of legal tender notes. the Government must also
hold itself in readiness to redeem in like man.
ner S114, 900 900 Of the Treasury notes Of 1890
and to maintain tho free interchangeability
through it's Treasury with gold for any part or all
OF $40. 0OO. 900 in silver now current with our
people. The aggregate total of these liabilities
amounts to 5000, OOO. 900. 1t is not by this in.
tended to convey the idea that the Government
will ever be called upon to pay at any one time.
or even any one period Of time, however pro-
tracted, the total of liability thus shown. 1t is.
however, indispensable that the Treasury be en-
dowed with the power and resources ample TO
meet all laiman that may come with margin
sufficient to give full assurance to all that do
not come that its power for continuance is
unimpaired. The statement that the ira.
ditional one hundred millions Of gold reserve is
insufficient for these purposes need not be sup.
ported by argument. 1t is manifest that the
recognized inadequacy of that amount has on
more than one occasion brought fear and de.
rangement to all interests-industrial. com.
mercial, and financial. The losses suffered by
the body polite through these arrangements,
hlving their origin in the state Of the public
Treasury, cannot be named. 1t is not beyond
the limit of reasonable estimate to say that the
total of such losses exceeds the total OF the
demand liabilities of the Treasury as above sci
forth.
"If it be urged. in answer to these cons'dera
tions, that the state Of the Treasury is fairly
satisfactory now, that gold is flowing freely to
ward the Treasury and not away from it, thai
there is n good state of confidence in our tlnan
cial status, the answer must be received as q
perfectly correct one. 1t might be further urged
with probable truth that these favorable condi
tions will endure for an indefinite period. Will
public revenues sufficient for public expendi
lures and a reasonable surplus accumulat
ing, with trade relations normal, with ampl,
crops carving fair rewards to agriculture, with
no war or well.dciined rumors of war, We nigh
go on with a growing sense of security. Cnfor
tunatcly, these good conditions cannot be as
surcd to us. Commerce and industry, sensit V,
to all unfavorab!c events, and watchful witt
anxiety hEains dangers as yet unseen, need To-
their full rehabilitation from past reverses ant
depression II renewed confidence that the Gov
erhments finances are to be firmly placed OF
stronger and more enduring foundations thar
now exist.
AS long as the Government shall operate Il
any important extent in supplying the currenc!
otthc country. either by the direct issues OF III
notes or by maintaining, through it's guarantee
or parity, so large II volume OF silver money. 81
long Will there remain II state of deep depend
sncy ~ all our trade and industries upon III
financial wisdom. foresight, and courage on thu
DAFT or lOngrpss- This forced 1ananinnry M
the one part bcgets corresponding responsible
NY on the other. Considered from the stand
point OF national defence the argument is rein
forced. We appropriate millions to Great
= navy, which. through the genius oil
invention, may speedily become obsolete
and worthless. We appropriate othe
millions to provide coast defenCes against AT
lacks which may never be made. Such action
I'm ~ and wise AS it may be, is inconsisten
WIN thc treasury conditions 80 extended in
time OF peace, and bring panic and alarm to on
own people at the first sound OF the enemy
guns. In, modern days a wellsupplied wa
chest, with an ilnprcgnable credit. is as impoI
TAM as are warshiDs.. shore batteries or reg
mCnts of mon Tho al vantnua nf a a. nn. ,rai