Daily Kennebec journal., 1897-12-18
SECRETARY GAGE
Resumes His Exposition Of
His New Currency Bill
Before the House Committee on
Banking and Currency.
Makes Strong Presentation Of the Merits
Of the Measure.

Washington, Dec. 17-Secretary Gage
hensive currency bill before the House.
committee on banking and currency.
today.
Before the bill proper was taken up.
some semi-political questions Were
asked. Mr.. Hill Rep, Connecticut,
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 recognized as a Republican"
said Mr.. Hill, addressing the secre-
tary. DO you consider that this pur-
pose Of more firmly fixing the gold
standard on the country conflicts with
principle of the st. Louis plat
form?"
No sir" responded Mr.. Gage. mot
as | lock at the principle of bimetal-
lism. Bimetallsm must mean one of
two things; either it is two kinds of
money OF unequal value, circulating
side by side by reason of the exchange
of the less valuable for that of the
greater value, or else two kinds of
money of such intrinsic quality Of val
uNS tbdl thcy VIII tlICuldtt
side by side. 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 past Is
years.
Cox. Dem, Tennessee. asked if the
result of the Gage bill eventually would
not lead to one kind of paper money
bank notes-and no silver except sub
sidary silver.
There is nothing in the plan to operate
to that extent now" answered the secre-
tary.
After this diversion to the silver aues-
ton. tie nsideration of the bill by see
tionS was resumed at section !. where the
discussion closed. yesterday. He showed
from the returns of the comptroller's
office how small percentage of loss
came from national banks. aud urged that
this unsecured circulation would entail
an inconSderable obligation on the gov
ernment by reason of its guaranty, and
this would be overcome by the small tax
on the bank. constituting q safety fund.
In answer TO q question by Mr. New
lands of Nevada. the secretary said that
the amount of refundng bonds under the
bill would reach ST. 1873. COO. 900 if all of them
Were issued These being the basis for
that amount Besides these. the addi-
tional per cent. of unsecured circulation
would give Il further issue of bank notes
of about $500. 900, 600 But that vast issue
was but the creation of a spectre and not
a reality. The banks could not get all the
bonds and use them for issuing bank
notes. On the contrary. government bonds
are always taken largely by private in
Vestors, trust companies. insurance COM
panies and parties across the water. Any
off nrt nv hn han hG,1 rl all hA
bonds would so affect the price as to de-
feat the object in view. And this also
would serve as a check to the expansion
of bank circulation.
Mr. Newlands referred to gold con-
tracts and asked the secretary's view of
them.
Mr.. Gage said he did not consider it de-
sirable to interfere with private contracts
of this character any more than was
necessary.
To Mr.. Prince of Illinois, he explained
that his expression gold and other legal
money used in the bill meant no reflec-
ton on silver or other classes of money.
The legal money included silver and the
expression merely served to cover well
understood term
The extent TO which drains on the gov
ernment stock of gold would result under
the operations of the bill. excited much
discussion. Mr.. Gage stated that redemp-
tons would be made in gold or it's eQuiva-
lent.
Mr.. Fowler of New Jersey. said this
opened a serious question. The secretary
provided for the issue of bank notes on
the deposit of United States notes green
backs). treasury notes or silver certii-
Gates. The result, he declared. would be
that the most undesirable form-silver
certifica tes-would be deposited and i'm
pounded. and their place taken by ma
tional bank notes. The latter drew gold.
the former did not. Hence, Mr.. Fowler
asserted the secretary proposed increas
ing the drain on our gold supply.
Mr.. Gage answered that it was easy to
conjure by hypothetical objections. but
he did not look at this one as serious.
It~was not the substitution of an end |
less chain of greenbacks for another |
"endless chain of bank notes. The banks
would have to redeem their own notes |
and it would be their object to do so. or
dollar of demand obligations was out |
strndng. SO long this "endless chain"
would go on.
He said: "rhs bill is simply a step in
the right direction. and most important I
step. 1t would give the government s325,-
900. 900 of the very liabilities which are
most likely to be brought against it. OF
this. $l25000.00o is in gold Then. with the
further measure. recommended by the
President giving authority for a loan up
to $10O 600, 900 when required, the govern
ment would be so strong in time of emer-
gency as to resist any stress. Faith would
be established and people would not come
to the treasury for lack of faith. but only
from necessity.
This brought out an interesting and
amusing discussion of politics. as relating
to finance.
Mr.. Brosius asked if the secretary felt
that the bill would obviate any proba-
bility of the country being forced to a
silver basis. The secretary thought it
would, beyond question. Il
Suppose the next election should
bring in a House of Representatives fa-
yorable to free silver: asked Mr.. Fowler
Rep, land a free silver bir. was passed
oy the House and by the Senate, now"
II object" interposed Hill Rep 'as
hat is even hypothetical possibility"
at is a certainty" declared. Mr.. Cox.
Dem. amid laughter. in which Secretary
Gage joined.
Mr. Fowler pressed his question: BE
ween 1885, when this free silver measure
night be passed by Congress- and 1900.
yben the advocates of sound money re-
.urned to power. could the country go to
1 silver basis?
Mr. Cages answer brought another