Arizona republican., 1897-11-05
A FINANCIAL POLICY.
A Scheme Lately Submitted by
 Secretary Gage
BANKERS IN FAVOR OF IT
Opposed to a Compromise with
 the Silver Sentiment.
A General Recommendation Tn
 Short That the Government or the United States Retire From the Banking Business.

Washington, Nov. 4.-Much interest is taken in the outline of financial policy submitted to the president and cabinet by Secretary Gage. The sug- gestions made are just about what has been anticipated, but the official statements takes the matter out of the field of speculation.
 It is accordance with the view of the leading bankers of the country and gratifying to those who are op- posed to any compromise with the "silver sentiment" There is noth- ing euuivocal on that point. The only thing in it that is viewed with some surprise is the statement that the treasury "has declared itself ready whenever necessary to the mainten- ance of this parity to exchange on even terms at the pleasure of the holder, either form of the metallic money for the other."
 It has been said by some that it was the policy of the treasury not to re- gard the coin silver dollars as basic money, but it has never been under stood that the department held itself ready to give gold in exchange for silver coin, which is equivalent to making the silver coin redeemable in gold.
 It was supposed when the endless chain was in operation drawing out the gold reserve from the treasury that the only sorts of currency avail able for the purposes of getting the gold were the greenbacks and the so- called Sherman notes of 1890.
 This statement, however, indicates that the silver coin and silver certi- fcates might be used in the same way, by being presented for redemption in gold
 SECRETARY CAGES PLAN.
 The secretary says that his prede- cessors in office since the war have regularly, in their annual reports, called attention to the menace to the public credit occasioned by the con- tinued use of the large volume of de- mand liabilities represented by the legal tender notes, and have frequent ly appealed for legislation to remove the danger.
 In addition to the S346, ,00O, ,000 of legal tender notes, and s114, ,O00, 900 oi treasury notes, the government must hold itself in readiness to maintain the free interchangeability with gold for SAC, ,000, 900 in silver. The aggre- gate of these liabilities amounts to $900, ,O00,000, although the government may never be called upon to pay this at any one time, or any large portion of it at a time From this the secre- tary proceeds to argue that the tra- ditional s1OO, 0O0 gold reserve is inadequate, no matter how good the conditions of the country or the con- fidence of the people Conditions ot prosperity and happiness are pot al ways assured, he says.
 The secretary then says:
 1.-The condition of the treasury 1T it's relation to demand obligations re quires that one of two steps be talk en. The one may be a large rein forcement to the permanent gold re- serve. The other may be by an i'm portant reduction in the objectionable form of liabilities. The latter is, il my opinion, the more desirable.
 ''My first recommendation Is tha proper legislation be enacted whicl will establish separate and apart iron the ordinary operations of the treas ury as they relate to revenue and ex penditures a department to be desig mated and known as the issue ant redemption division. To this divis ion the sum of $125, ,0OO,0 900 in gol, coin should be set over from the gen eral fund in the treasury, to be use only for redemption purposes; that a the silver dollars now held for re demption of silver certificates, and al the silver bullion and dollars coine therefrom, brought under the act C 1890, be passed to the same account
 Further, that the sum of $200, ,00O GOO, in the legal tender notes of tn
 
 be collected as hereinafter describe and deposited in the said departmen of issue and redemption, to be dis bursed therefrom only upon the re ceipt in exchange thereof of an equiv alent amount of gold coin. Such gold when so secured, to be held in sai department as part of the general ae demption fund.-
 The second recommendation of tt secretary is for the refunding of loa bonds at the rate of 212 per cen principal and interest payable in gol
 On the subject cf national ban notes the secretary recommends:
 THE NATIONAL BANKS.
 First. Permit national banks