The Anaconda standard. [volume] (Anaconda, Mont.) 1889-1970, 1897-12-08
GAGE HAS A NEW PLAN
He Details the Evils of the Pres
emit System.
OBJECTS TO GREENBACKS
Urges That They Be Kept and Paid Out
Only in Exchange for Gold-He
Recommends Changes in the
Banking Laws.

Washington, Dec. 7.-Secretary Gage
in his annual report to congress to-day.
makes an exhaustive statement of the
finances of the government as follows:
The recommendation / make must
be construed as tentative steps
In a direction which, If consistently
pursued. will ultimately lead to condi-
tons theoretically desirable rather than
as being in themselves final measures
TO that end. The condition of the treas
ury in its relation to demand obliga-
tions requires that one OF two steps be
taken.
a, "First-I recommend that proper leg
islation be enacted which Will estaD-
lish. separate and apart from the ordi-
nary operations of the treasury as they
relate to revenue and expenditures, a
department TO be known as the issue
and redemption division. To this divi-
sion the sum of sl2s. 000. 900 in gold
should be set over from the general
fund in the treasury, to be used only
for redemption purposes and all the sill
Yer bullion and dollars coined there
from, bought under the act of 1890,
should be passed to the same account.
Further, that the sum of 5000 1000, 900 in
the legal tender notes of the United
States known as greenbacks be collect
ed as hereinafter described, and depos-
ited in the said issue and redemption
division to be disbursed therefrom only
on receipt in exchange therefor of an
equivalent amount of gold coin. Such
gold, when 50 secured to be held in said
division as part OF the gold redemption
fund.
.Second-I recommend that provision
be made for the issue of refunding loan
bonds payable after ten years, such
bonds TO bear interest at the rate of
per cent. per annum. payable, principal
and interest in gold coin. and that the
.a~ ha %t-aa ha nnriyAI
TO cash bonds and make payment
therefor with an equitable allowance
for the difference in interest, any part
or all of the outstanding loans OF the
United States which mature by their
terms Of payment in the years 1904, 1897
and 1873"
Continuing. he says. The advantage
involved in the proposed action lies in
this. Il removes an ambiguity from
Cur contract obligations-an ambiguity
which affects unfavorably the govern
Esens credit. The word coin now used
10 express the obligation IN the public
debt : an ambiguous word. Il is no
doubt understood by the more discrim-
mating public creditor 10 mean gold
coin. and the solemn act OF congress
p1s5gl-e the maintenance Of silver coin
ur0n . parity with geld makes II inn
possible 10 construe the word coin as
therein used. 10 mean anything other
than gold or its full equivalent. YET.
as this is a conclusion Of logic rather
than a clear statement OF fact, the sim
pier and more humble investors or
would-be investors in the public debt
are confused and doubtful and the pub
lie credit is the weaker therefor.
The secretary then goes on To show
that the course suggested has prece-
dent in the act of congress in 1868
pledging the government TO the pay
ment of all interest bearing obligations
in coin or its equivalent.
Changes in banking Laws.
He adds: ITO accomplish the objects
herein suggested without contracting
the circulation. some other form of
paper money must be allowed to fill the
vacuum which would otherwise be oc-
casioned. The national bank note now
familiar to our people is the readiest
and most practical agent to accomplish
that object, and under reasonable con-
ditions ii will be found responsive to
the call"
To obviate the difficulties in the way
of this method of supplying the def
cheney. he recommends the following
changes in the national banking law:
"First-Permit national banks TO be
organized with a minimum capital of
$4,000. in any place having population
of 1000 inhabitants or less.
''Second-Reduce the rate of taxation
on circulating notes secured by deposit
of bonds TO one-half of one per cent per
annum.
"Third-Permit banks now organized
or hereafter organized to issue circulat-
ing notes TO the par value of the re-
funding bonds herein before suggested,
when deposited by them. with the
treasurer Of the United States. and
further, all of such banks as shall avail
themselves of the opportunity to de
post as security with the treasury OF
the United States greenbacks, treasury
notes or silver certificates to a tota
amount of 5000, 600. 900. against which
there shall at once be issued TO them bS
the comptroller of the currnecy nationa
bank notes to an equal amount, II be
ing further provided that from time t.
sime, at his convenience. the secretar,
of the treasury shall substitute for tn
greenbacks, treasury notes and silve
certificates, so deposited to secure cir
culation. bonds of the same class an
character. the refunding bonds frs
named to the amount of 5000 000, 00'