The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-12-18
FORMAN'S SUCCESSOR NAMED
n. ID. SCOTT APPOINTED COMMISSION
Err OF INTERNAL REVENUE.
w. w. Thomas Nominated for Minister
to Sweden and Norway and Ham
iItOn King Sent to Siam.

mittee on banking and currency to-day
Chairman Walker had left the city and Mr..
Brosius of Pennsylvania presided. Before
the bill proper was taken up some semi
political questions were asked. Mr.. Hill
(Rep, Comm called Mr.. Cages attention
TO the statement made yesterday that the
first purpose of the bill was to commit the
country to the gold standard. you are rec
ognzed as a Republican" said Mr.. Hill,
addressing the secretary, "and you are
familiar with the financial platform of the
Republican national convention at st.
Louis. Do you consider that this purpose
of more firmly fixing the gold standard on
the country conflicts with the principles
of the st. Louis PLATFORM
mo- SIR" responded Mr.. Gage. mot as
1 look at the principle of bimetallism. BIZ
metallism must mean one of two things;
either it is two kinds of money of equal
value, circulating side by side by reason
of the exchange of the less valuable for
that of greater value, else two kinds of
money of such intrinsic equality of value
that they will circulate naturally side by
side. We have a bimetallic currency in the
United States now. A firm establishment
of the gold standard, with such inter-
changeability with silver as will make it
acceptable on an equality with gold will
maintain this bimetallism, the same as it
has existed for the last eighteen years"
The secretary went on to state that this
in no way prejudiced any steps that might
be taken to bring silver up to higher stand
ard of value, The bill, however, was de-
signed to give such confidence in the tinan-
cial ability of the government that the dis
ordinations against silver would largely
decrease.
Mr. Cox (Dem., Tenn.) asked if the re-
suit of the Gage bill eventually would not
lead to one kind of paper money-bank
notes-and no silver, except subsidiary sill
Ver.
There is nothing in the plan to operate
10 that extent now" answered the secre-
tary. 1T is in that direction, and with fur
ther legislation developing it, 1t might ul-
timatey lead to such result But l would
not say that silver would be restricted to
subsidiary silver. L would say a system of
silver which would be subordinate. 1t is
subordinate now
SECTION Z EXPLAINED.
After this diversion to the silver question,
consideration of the bill by sections was
resumed at Section Z, where the discussion
closed yesterday. This section provides for
an increase of national bank note crcula-
ton, to be secured, not by the deposit of
bonds or notes, but by the assets of the
bank and the government guaranty. Mr..
Gage referred to the advantage of this ad-
ditional unsecured circulation in giving an
elasticity to the country at points where it
was most needed He showed from the re-
turns of the controllers Office how small a
percentage of loss came from national
banks and urged that this unsecured cir
culation would entail an inconsiderable OBJ
ngatlOn on the government by reason of its
guaranty, and this would be overcome by
the small tax on the bank, constituting a
safety fund.
In answer to questions of Mr.. Newlands,
of Nevada, the secretary said the amount OF
refunding bonds under the bill would reach
81, 1873 100000 if all of them were issued. These
being the basis for circulation. bank notes
could be issued to that amount. Beside
these, the additional 25 per cent. of unse-
cured circulation would give further issue
of bank notes of about $500, 900, 000 But that
vast issue was merely the creation of a
Specter and was not reality. The banks
for issuing bank notes. On the contrary,
government bonds are always taken largely
by private investors, trust companies and
insurance companies and parties across the
water. Any effort by the banks to absorb
all the bonds would so affect the price as to
defeat the object in view. And this also
would serve q check to the expansion of
bank circulation
Mr. Newlands referred to "gold contracts
and asked the secretary's view of them.
Mr.. Gage said he did not consider 1t de-
sirable to interfere with private contracts
of this character any more than was neces-
sary. To Mr.. Prince, of Illinois, he ex
planned that his expression gold or other
legal money" used in the BILL meant no re-
Election on silver other classes of money.
The other legal money included silver, and
the expression merely served to cover a we'll
understood term. The extent to which
drains on the government stock of gold
would result under the operations of the
bill excited much discussion. Mr.. Gage
stated that all redemptiOnS would be made
in gold or its equivalent.
Mr.. Fowler, of New Jersey, said this
opened a serious question, and inquired if
silver certificates would not be deposited
and impounded and their place taken by
national bank notes, thus increasing the
drain on our gold supply. Mr.. Gage an
swered that 1t was easy TO cOnjure w hypo-
thetical objections, but he did not look at
treasury, on receiving these silver certifi-
Gates would swap" them for greenbacks,
treasury notes and other forms of demand
notes which served to drain gold, and thus
build up the redemption fund.
REDEMPTION OF BANK NOTES.
Regarding Section s, which pledges the
faith of the United States to the redemption
of bank notes, Mr.. Gage said this was
merely to make clear the same pledge as
the government now gave to the integrity
of bank notes. He did not agree with OBJ
1ections suggested that the 10 per cent. de-
post required of the banks by this section
and the per cent tax on them for safety
fund would make it Improbable for them
to issue circulation There were other ad-
vantages secured to them which offset this
objection. The purpose of Section g. pro-
vidng that issues of national banks shall
be in denomination above $40, was to give
the government the monopoly on small bills
in most common use.
When Section TO- providing for the redemp-
ton of bank notes at the New York sub
treasury and other designated points was
reached, Mr.. Cox asked Mr. Gage why he
did not specify that the redemption should
be in gold or other legal money. The sec
retary answered that the less discretionary
power imposed on an executive officer in the
execution OF q principle the better for some
times executive officers might have indis-
cretion and do foolish things. Moreover
this discretion existed now
When the remainder of the bill had been
read general discussion began. In answer
to a cToss-fire of questions Mr.. Gage said
the bill could not result in a raid on the
treasury by bank notes. 1t was not the
substitution of an endless chain" of greer
backs for another endless chain of bank
notes. The banks would have to redeem
their own notes. and it would be to their
object to do so or they would be closed But
so long as dollar of demand obligations
was Outstanding so long this endless chain
would 30 on, He said This bill is simply
a step in the right direction, and most
inl,lOrtant gteD Ii WOalI give the arovarn-