The Coeur d'Alene press. (Coeur d'Alene, Idaho) 1892-1907, 1897-12-11
ADVISES REDEMPTION FUND
SECRETARY GAGE ON FINANCE
Believes the Present system Is Fall
Of Eviln and Recommends More
National Hanks, with small Cap
tsaI and Nete Issuing Power.


Washington, Dec. s,--The report Of See
rotary Of the Treasury Gage closes with
an exhaustive review Of the currency
question, with recommendation, After
detailing the evils Of the Fl esent system,
according to his view, the secretary offers
the following recommendations, OF which
he says:
"The recommendations make must be
construed as tentative steps in diree'
tion which, il constantly pursued, win ul'
timately lead TO conditions theoretically
desirable, rather than as being in them
selves final measures to that end. The
condition of the treasury in its relation
to demand obligations requires that one
Of two steps be taken. The one may be
large reinforcement of the permanent
gold reserve; the other may be by an i'm
Portant reduction in the Objectionable
form Of liabilities. The latter is, in my
opinion, the more desirable.
First, recommend that proper leg
islation be enacted which will establish,
separate and apart from the ordinary OPP
erations Of the treasury as they relate To
revenue and expenditures, a department
to be designated and known as the issue
and redemption division. To this divi'
sion the sum Of Sl25,O0O,OOO in gold
should be set over from the general fund
in the treasury, to be used only for re
demptiOn purposes, and all the silver dol
lars now held for redemption OF silver Ger
tifieates and all the silver bullion and
dollars coined therefrom bought under the
act OF 1890, should be passed to the same
account. Further, that the sum Of 300.
100000 in legal tender notes OF the
United States known as greenbaeks be-
collected as hereinafter described and de
posted in the said issue and redemption
division, to be disbursed therefrom only
upon the receipt in exchange therefor OF
an equivalent amount OF gold colh. Such
I gold when 50 secured, to be nell in said
division as part OF the general redemption
fund.
Second, recommend that provision be
made for the issue OF reiunding loan bond,
payable after 10 years at the pleasure Vi
I the government, such bonds 10 bsaT in
terest at the rate Of q per cent per an
mum, payable, principal and interest, in
gold coin, and that the secretary OF the
treasury be authorized 10 issue such bonds
and receive in payment therefor, with an
equitable allowance for the difference In
interest, any part or all OF the outstand
ing loan OF the United States which ma
ture by their terms Of payment in the
years 1904, 1907 and 1925"
The secretary then goes on to show
that the course suggested has a pFecedrn,
in the act Of congress OF 1869, pledging tbs
government to the payment Of all interest
bearing obligations in coin or its equiya
lent. To obviate the difficulties in the
way Of this method Of supplying the de,
deiency, he recommends the following
changes in the national banking law.
First-Permit national banks to be or
ganized with minimum apital 81 SIS
600 in any place having a population Of
2OOO inhabitants or less.
Seeond-Reduce the rate VI taxation on
circulating notes secured by deposit Of
bonds to One-half Of per cent per an,
mum.
Third-vPermit banks now organized OF
hereafter organized to issue circulating
notes to the par value Of the rsfunding
bonds hereinbefore suggested. when de
posted by them with the treasurer Of the
United States, and further allow such
banks "a shall avail themselves Of the op.
Portunity, 10 deposit "A security with the
treasurer Of the United States. green
backs. treasury notes or silver certificates
TO total amount Of 500 200 900 against
which there shall be at once issued 10
them, by the comptroller Of the currency
national bank notes to an equal amount
IL being further provided that from time
TO time, at his convenience, the secretary
Of the treasury shall substitute for the
greenbaeks, treasury notes and silver err
tifcates so deposited 10 secure circulation
bonds Of the same class and character q.
the refunding bonds first named to the
amount Of s2O0.OOO.0O0. such bonds 10 be-
ehargenble to said bank. and by them
accounted for at such price mot less than
parl n the market quotations may indi.
cate to be their fair market value. bur
ing the period Of time intervening b.
tween the deposit Of greenbacka treasury
notes and silver certificates, and the sub.
stitution Of the bonds by the secretary
Of the treasury, the circulating notes
specifically issued therefor shall be- eI.
empt from taxation. Upon the substitu.
ton OF bonds the funds released thereby
shall at once be transferred by the score.
tary Of the treasury TO the issue and re.
demption division.
Fpurth-After said banks have depos.
tied such bonds, greenbacks, treasury
notes or silver certificates 10 the amount
Of so per cent Of their capital, they shall
be permitted to issue bank notes in add.
tion 10 the so per cent thus provided, 10
the extent Of Is per cent Of such deposit.
which said rs per cent may be unsecured
by any direct pledge Of security but /.
sued against the assets Of the bank.
Fifth-Extend the guaranty Of pay.
ment by the government TO all circulat.
ing notes Of the bank, whether issued
against deposited securities or against as
sets
sixth-To secure government against
loss, II any, attaching to its guaranty. a
tax OF per cent per annum on secured
circulation shall be levied 10 create a
safety fund, which shall be invested bv
the secretary Of the treasury and the
comptroller Of the currency in govern.
ment bonds. In addition TO such fund,
the government shall be further protect
ed by having a first lien upon all assets
in case Of failure Of the issuing bank.