The Red Cloud chief., 1897-12-10
HIS FINANCIAL PLAN.
GAGE FAVORS A STRONG
TREASURY.
Tho rrobicm Of siivcr's depreciation Dis
cussed "A Separate Note Issuing De
partmcnt Clearly Advised -suaacstions
ne TO Ranks.

WASHINGTON, Dec, - inc hnnuai
rcportof the secretary OF the treasury,
submitted TO Congress to-day, dis
cusscs the problem OF currency reform
M follows:
"In their respective annual reports
20 Congress, my predecessors since the
close of the civil war have called at
tention with unfailing regularity TO
The menace TO the public credit oc'
casioncd by the continued use Of the
large volume of demand liabilities,
represented by legal tender notes.
md have constantly appealed
for such legislative action as would
remove the dangers pointed out.
Although these warnings and appeals
have not ns vet met with the rcspon-
rive action that their serious nature
jrstiGcs, IL is not now the part of wis
dom 10 ignore them. In fact, as time
has gone on, all the reasons upon
which these warnings and appeals
were based have received additional
force. The cnormou depreciation in
the commercial value or silver, MS com
pared with gold, has greatly increased
tnc unaHCihi TtSpohHiolliti'S Va wv
government in It's demand liabilities,
and oil the logical consequences Of the
fact should be boldly faced.
'Thc advantages OF n strong posi-
ton in the national treasury, with It's
accompanying benefits TO all CONNER
cial interests and great reinforcement
OF the public credit, can, | believe, be
aA.a.nl ,,tVlart ,V, ,,,IAftlfnr tnxrtS.
~lation, in "a manner easy to be compre-
hended by all, and with small cost to
che people.
'"The recommendations l make
must be construed rs tentative steps
in q direction which, il consistently
pursued, will ultimately lead to con
ditions theoretically desirable rather
than as being In themselves final
measures TO that end. The condition
Of tho treasury in its relation to de-
mand obligations requires th at one of
two steps be taken. Tho one may be
o large reinforcement Of the pcrma.
nent gold reserves; tho other may be
by an important reduction in the OBJ.
1ectionablc form Of liabilities. Tho
lsttcr Is, In my opinion. the more de.
sirable.
NOTE ISSUING DEPARTMENT.
'Eirst--I recommend that proper
legislation be enacted which will cs-
tablish, separate and apart from the
ordinary operations of the treasury as
they relate to revcnue and cxpendi.
lures, "a department to be designated
and known as the issue and rcdcmp-
ton division. To this division the
sum of Sla5,O0o, 600 in gold should be
set over from the general fund in the
treasury. to be used only for redemption
purposes, and all the silver dollars now
held for redemption of silver ccrtif.
Gates, and ull tho silver bullion and
dollars coined therefrom, bought un-
der the act Of 1890, should be passed
to the same account. Further, that
the sum of $500, 000, 900 in the legal
tender notes OF tho United States
known as grccnb backs be collected rs
hereinafter described, and deposited
In tho said issue and redemption Iii
vision, TO be disburscd ~thercfrom only
upon the receipt In exchange therefor
Of an equivalent amount of gold coin
Such gold, when so secured, to be held
in said division rs pnrt OF the genera
redemption fund.
Second, ! recommend that pro
vision DO made for tho issue Of re
funding loan bonds, payable after ter
years at tho pleasure OF the govern
incnt, such bonds to bear interest n
the rate OF ~ per cent per annum
payable, principal and interest, in gol,
com; and that the secretary OF tn,
treasury be authorized to issue sucl
bonds and receive in payment therefor
with IN equitable allowance for tn,
difference in interest, n part or nj
Of the outstanding loans Of the Unite,
States which mature by their terms o
payment In the years 1904, 1907 an,
1925.
BONDS PAYABLE IN GOLD.
"The advantage involved in tn
proposed action lies ir this: IL re
moves an ambiguity from our contrac
obligations-an ambiguity which al
fects ~unfavorably the government
credit The word coin now used I
express the obligation in the publ
debt, Is an ambiguous word. 1t is n
doubt understood by the more dis
eliminating public creditor to mcar
gold coin, and the solemn act q
Congress pledging the maintenanc
Of silver coin upon a parity wit
gold coin makes 1t impossible to con
strue the word coin AS therein used
to mean anything other than gold O
it's full equivalent. Yet as this /
conclusion OF logic rather than u clca
statement OF fact, the simpler an
more humble investors OF wou!d.bc II
vcstors in the public debt nre cor
fused and doubtful, and the publ
credit is the weaker therefore
ITO refund our outstanding bond
10 payable in coin into bonds pa,
able IN gold would strengthen an
confirm the public credit and put ,
In a position to command the market
of the world for our securities on TIL
most advantageous terms.