Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1897-10-22
GAGE. Currency ELAN.

1
plans the country properly regards
with interest and respect the opinions
Of the head of the treasury respecting
matters pertaining to that department
1t has all along been doubted if Secre-
tary Cages plans would meet with ap-
prevail under the conditions now exist
ing in the Senate. Moreover it has
been quite commonly understood that
he has modified them somewhat since
coming to Office. There have in conse-
ouence of this belief been many reports
as to what his views might be. 1t
appears that some Of these rumors
have been the merest suggestions.
Areliable Washington correspondent
has this to say:
.'Whatever changes may have come
over the secretary's mind in the in
terval, neither he nor anyone in his
behalf will deny the substantial cor
rections of this summary of the pro-
posal he submitted to his friends last
summer:
"Q) The issue of gold bonds, re-
| deemable at the option of the govern
ment after 20 and within so years, bear
ing interest at the rate Of 2h per cent ::
| those bonds to be used for refthding
the whole present bonded debt of the
United States as far as practicable by
exchanging them for outstanding
bonds of any issue on an equitable
basis as to interest. also 5000, OOO, 900 Of
them to be sold for cash.
"(2.) The establishment of separate
bureau in the treasury, to be devoted
to and entitled issue and redemption,
a fund of 1925, 100000 of gold to be de-
posted in this bureau, made up of the
gold already on hand in the treasury,
supplemented by the proceeds Of the
bond sales just provided for; the
bureau to redeem outstanding paper
money when offered for that purpose
but to disburse none of this paper
money in turn except in exchange for
gold.
"(3) The extension of the national
banking system SO as to permit the
organization of banks with only $25, 900
capital in towns of 1000 inhabitants or
less; the repeal of all the tax on bank
circulation, except such amount as
may be necessary to pay the cost of
supervising the system and creating a
| safety fund of $5,000,000, which need
take only two or three years; authority
to the banks to deposit the 21a per cent.
refunding bonds and issue notes up to
their par value first to the extent Of
each banks capital, and then to Is per
| cent. above that, the government Sc
| curing itself by it's first lien on all the
| assets of bank, by a redemption fund
of 10 per cent, kept constantly on de-
post as the five per cent. fund is KEEP,
now, and, finally, by the safety fund
already mentioned; provision for the
redemption of all notes in New York
| and in other reserve cities if desired;
and the restriction of banknotes to
denominations Of $40 and upwards,
with discretion vested in the secretary
of the treasury to issue silver certifi-
Gates and all government notes in ones,
twOs, fives and higher denOmina tons,
as his best judgment may dictate.
This is the basis of Mr.. Cages plan.
In defence of it, he stands ready to
show Chat the present annual interest
charge of 100000 on the bonded debt
of the United States would be reduced
to $50, 100000 in spite of the increase in
the volume of bonds as proposed in the
first paragraph.
1.-The outstanding demand liabilities
of the government, including all forms
of notes and certificates, now amount
ing to $S42, 100000 would. the secretary
thinks, through the redemptions con-
Quoted by the issue and redemption
bureau, with the 5000, 1000, 600 of gold re-
ceived from the sale of bonds, be re-
duced to $642, COO, 600, and the $125, 900, OO0
of gold held against this would amour:
to about 20 per cent. Finally the in
| crease in bank note circulation would
| fill in the gap caused by the redemp-
| ton of 5000, 000, 600 of the various forms
of government paper money. Assum-
| ing that the banks would take adj
vantage of the extended opportunity
| for issue, and adding $22, 100000 for the
10 per cent. margin now idle, and $112,-
100000 for the 25 per cent. of excess,
| there, would be total increase Of
1874, 100000 in the paper currency afloat,
which is expected to gladden. the hearts
| of believers in the quantitative theory
of money as well as to satisfy the
| legitimate demands of the business
community in the South and West. In
the crop-moving seasons, for instance,
| the excess issue allowed to the banks
would save those in the sections named
from borrowing large sums in the East.
The South alone could thus save the
interest on loans of $17,0O0,0OO or $751;
600, 900 every year.
THE restriction of the bank issues to
notes for $40 and over is intended to
give the government monopoly of the
issue Of the small money used by the
mass of the people in their daily hand
to-hand transactions. The secretary
could be gradually changing the treas
ury notes of 1890 into silver coin or sill
yer certificates, gradually put large
part of the minor trade of the country
upon basis where that at least need
never menace the integrity of the
treasury gold reserve The idea of the
entire withdrawal of the greenbacks
from circulation he confesses, he has
abandoned, not because he does not be-
iieve in it. but because he considers it
politically impracticable"
II Is Well To Remember Them.
l l. LII