The herald., 1897-12-18

Committee on Banking and Currenc,
today.
Chairman Walker had left the city and
Mr. Brossius, of Pennsylvania, presided
Before the bill proper was taken up
some semi-political questions We're
asked. Mr.. Hill, Republican, OF Con-
necticut, called Mr.. Cages attention &c
the statement made yesterday, that the
first purpose of the bill was to commit
the country to the gold standard.
'sYou are recognized as Republican,
said Mr.. Hill, addressing the Secretary,
"and YOU are familiar with the financial
platform of the Republican National
Convention at st. Louis. Do you con-
slider that this purpose OF more nrmiv
fixing the gold standard on the coun-
try conflicts with the plank OF the St.
Louis platform on finance?'
mo, SIR" responded Mr.. Gage; not
as l. look at the question of bimetalllsm.
Bimetallism must mean one Oh TWO
things, Either it is two kinds OF money
IF UNEQUAL value circulating side by side
bv reason of the exchange OF the less
valuable for that of the greater value;
or else two kinds of money of such IN
trinsic value that they Will circulate
naturally side by side. We have pl-
metallic currency in the United states
now. A firm establishment of the gold
standard with such interchangeability
with silver as will make it acceptable
nm an equality with gold will maintain
this bimetallism the same as 1t mas eX-
listed for the last eighteen years"
The Secretary went on to state that
this in no way prejudiced any steps
that might be taken to bring silver up
to a higher standard of value. The Dill
however, was designed to give such con-
fidcnce in the financial ability of the
government that the determinations
against silver would largely decrease.
MIR. Cox, Democrat, of Tennessee,
asked if the result of the Gage bill event
ually would not lead to one kind OF
paper money-bank notes-and no Sill
yer, except subsidiary silver.
"There is nothing in this plan to CO.
operate to that extent now" answered
Mr.. Gage. at is in that direction, and
with further expansion and development.
It might eventually lead to such re-
suit. But I would not say that silver
would say a system of silver which
would be subordinate. 1t is subordinate
now"
The consideration of the bill was then
resumed at Section I. This section pro-
yided for an increase of national bank
note circulation to be secured not by the
deposit of bonds or notes, but by the as
sets of the bank and the government
Mr.. Gage referred to the
advantage of this additional unsecured
in giving elasticity to the
currency at points where it was most
needed. He showed from the returns
bank failures and further, that
this unsecured circulation would fail in
placing any considerable obligation on
The government, by reason of it's guaran-
lee and this would be overcome by the
mall tax on the banks, constituting a
safety fund.
In answer to questions by Mr.. New
ands, of Nevada, the Secretary said
hat the amount of refunding bonds I'M
Ter the bill would reach $1136. 900 900,
e all of them were issued. This being
The basis for circulation, bank notes
could be issued to that amount. Besides
these the additional rs per cent of I'M
secured circulation would give further
Issue of bank notes of about $500, 000,-
200. But that vast issue was merely the
creation of a spectre and was 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 pri-
vate investors, trust companies, insur-
lnce companies and parties across the
water. Any effort of the banks to absorb
LII the bonds would SO. affect the price
rs to defeat the objects in view. This
would also serve as small check to the
bank circulation.
Mr.. Newlands referred to "gold con-
tracts" and asked the Secretary about
Them. Mr.. Gage did not deem it desir-
lble to interfere with private contracts
of this character any more than was
necessary. To Mr.. Prince, of Illinois. he
explained that his expression, gold
Ind other legal money" used in the bill.
meant no reflection on silver or other
elasses of money. The other legal money
silver and the expression mere
" served to cover a well-understood
.erm. The extent of the drains on the
government stock of gold and it's result
,nder the bill, created much discussion.
Mr.. Gage stated that all redemptions
would be made in gold OF its equivalent. |
Mr.. Fowler of New Jersey, said this
opened a serious question and inquired
silver certificates would not be de-
posted and impounded and their place
aiken by national bank notes, thus in
.reasing the decline in our gold supply.
Gage answered that it was easy to
up hypothetical objections.
tut he did not look at this case as Sc
ious. Any Secretary of the Treasury
m receiving these certificates would
swap" them for greenback treasury
notes and other forms of government
notes, which served to drain notes and
hus build up the redemption fund.
Regarding section 8, which pledges the
faith of the United States to the redemp-
ton of bank notes, Mr.. Gage said this
was merely to make clear the same
pledge that the government now gave to
the integrity of the bank notes.
In answer to cross fire of questions.
Mr.. Gage said the bill could not result in
= raid on the treasury by bank notes.
1t was not the substitution of an
endless chain" of greenbacks for an
other endless chain" of bank notes. |
The banks would have to redeem their
own notes, and 1t would be to their in
terest to do so or they would be closed. |
But so long as the dollar of demand OBJ
legations was outstanding. so long this
'endless chain" would go on.