The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-12-18
Mr.. GAGE GOES on
SECRETARY OF THE TREASURY
AGAIN BEFORE THE HOUSE
COMMITTEE.
lie DEFENDS HIS MEASURE.
ANSWERS FOR THE CROSS-FIRE OF
QUESTIONS AIMED AT
HIN.
A VOTE OF THANKS HIS REWARD.
JOculnr Political Discussion the
Feature of the Proceedings OF
Afternoon Session.

WASHINGTON, Dec. 17-Secretary
Gage resumed his exposition Of his
currency bill before the house commit
tee on banking and currency today.
Chairman Walker had left the city,
and Mr. Brosius (Pa.) presided. Be-
fore the bill proper was taken up some
semi-political questions were asked.
Mr.. Hill Rep., Comm 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 Repub1i-
cam" said Mr.. Hill, addressing the
secretary, land you are familiar with
the financial platform of the RepubIi-
can national convention at st. Louis.
DO you consider that this purpose of
more firmly fixing the gold standard
on the country conflicts with the prin-
cipIe of the st. Louis PLATFORM"
Yes, SIR" replied Mr.. Gage. "as
1 look at the principle Of bfmetallism.
BimetalIism 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 greater value,
or else two kinds of money of such
intrinsic equality of value that they
will circulate naturally side by side.
We have a bimetallic currency in the
United States. A firm establishment Of
the gold standard, with such inter-
chaHgeability with silver as will make
it acceptable on an equality with gold,
will maintain this bimetallism, the
same as it has existed for the last
eighteen years."
Mr.. Cox Oen., Temp asked If the
result of the Gage bill eventually
would not lead to one kind of paper
money-bank notes-and no silver ex-
cept subsidiary silver.
There is nothing in the plan to op-
crate to that extent now" answered
Mr.. Gage. "It is in that direction,
and, with further legislation develop
ing it, it might ultimately lead to such
a result, but would not say that sill
Yer will not be restricted to subsidiary
silver. 1 would say a system Of silver
which would be subordinate. 1t is
subordinate now"
SECTION SEVEN.
After this diversion to the silver
question, the consideration of the bill
by sections was resumed at section Z.
where the discussion closed yesterday.
This section provided for an increase
of national bank note circulation to
be secured not by the deposit of bonds
or notes, but by the assets of the bank
and the government guaranty. Mr..
Gage referred to the advantage of this
additional unsecured circulation, in
giving an elasticity to the currency at
points where it was most needed. He
showed from the returns of the comp
trolIer's Office how small percentage
Of loss came from national banks, and
urged that this unsecured circulation
would entail an incousiferable oDHga-
ton on the government by reason Of
it's guaranty, and this would be over
come by the small tax on the banks,
constituting a safety fund.
In answer to questions by Mr.. New
lands, of Nevada, the secretary said
that the amount of the refunding bonds
under the bill would reach $1,138, 100000
If all of them were issued. These be-
Ing the basis for circulation, bank
notes could be issued to that amount
Besides these, the additional 25 per
cent of unsecured circulation would
give a further issue of bank notes of
about 100000 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 al
ways taken largely by private invest
ors, trust companies, insurance COM
panies and parties across the water.
Any effort by the banks to absorb all
the bonds would so affect the price
as to defeat 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
desfrabl to interfere with private con-
tracts of this character any more than
was necessary To Mr.. Prince, of IL
lnois, he explained that his expression
gold and other legal money" ussd in
the bill. meant no reflection on silver
Or other classes of money. The other
legal money included silver, and the
expression merely served to cover a
Misunderstood term.
SERIOUS QUESTION.
Mr.. Fowler, of New Jersey, said this
opened a serious question. and inquired
If silver certificates would not be de-
posted and impounded and their place
taken by national bank notes, thus in
creasing the drain on our gold supply.
Mr.. Gage answered that it was easy
to conjecture up hypothetical objee-
tions, but he did not look at this one
as serious Any secretary Of the treas
ury, on receiving these silver certifi-
Gates. would swap" them for green
backs, treasury notes and other forms
of demand notes which served to drain
gold, and thus build up the redemption
fund
Regarding section s, which pledges
the faith of the United States to the
redemption of the bank notes, Mr.. Gage
said this was merely to make clear the
same pledge as the government now
gave to the integrity of bank notes. He
did not agree with objections suggest
ed that the 10 per cent deposit re-
CURED of the banks by this section and
the 9 pei. cent tax on them for a safety
fund would make it improbable for
them to issue circulation. There were
other advantages secured to them
which offset this objection. The pur-
pose of section 9, providing that issues
of national bank notes shall be in de-
nominations above $40 was to give the
government the monopoly on small
bills in most common use.
When section 10, providing for the
redemption of bank notes at the New
York subtreasury and other designated
points, was reached, Mr.. Cox asked Mr..
Gage why he did not specify that the
redemption should be in gold or other
legal money. The secretary answered
that the less discretionary power i'm
posed on an executive officer in the
execution Of principle the better, for