Wheeling Sunday register. [volume] (Wheeling, W. Va.) 1882-1934, 1897-11-21
GAGE ON CURRENCY REFORM.
A Letter From the Secretary Explain
ing the Plan He Advocates.
Interest Bearing Bonds to be Sub
stituted for Circulating Notes as
Rapid as POsslble-Government
Guarantee for Immediate Pay
ment-Redemption Fund Not to
Be Counted a Part Of the Legal
Reserve.

Boston, november ZU.-Ine JOURNAL
says: The plan proposed for reform
ing the currency is of vast Importance
to the whole country In commercial
and financial centers like Boston the
interest on the part of all business men
has been so great that every detail of
the proposed plan has been scrutinized
with the greatest care and fully dis
cussed. AS a result of a study OF the
various part of Secretary Cages plan,
and after consultation with the lead
ing financiers, the editor Of the Boston
Journal addressed to Secretary Gage,
under date of November 10, letter
embodying the following questions,
which cover the points of detail upon
which doubt as to the secretary's exact
contention has been expressed:
First, you put no limit of time
within which the secretary of the treas
ury shall substitute interest bearing
bonds for deposit of currency. Would
it not be fair to make some limit and
not allow the banks to feel that you got
the money in and they got no interest
except the saving of Cne-half of one per
cent tax?
Second, when you say the govern
ment shall guarantee the payment Of
a.! circulating :, tes of the banks, do
you mean immediate payment, or only
ultimate payment? 1t would make
quite a difference in the treatment Of
the notes of any bank whose credit be-
came shaky, which course the govern
ment was going to take.
Third, we have also heard it ques-
toned whether it was wise to invest
the per cent guarantee fund held by
the government in bonds, as they might
fiuctuate in value, and it is suggested
that it might be safer to hold it in
money.
Fourth, is the redemption fund of 5
per cent to becounted by the banks as
a part of their legal reserve?"
Secretary Gage replied as follows:
Washington, November IS, 1897. =
l avail myself of the first leisure mo-
ment to reply to yours of the 18th inst,
in which you wish me to state more
clearly some of the points in my rec
concentrations. 1 will, therefore, say:
First-That it is the purpose in mind
to substitute interest bearing bonds as
security for circulating notes, in sub
stitution of currency previously depos-
tied, as rapidly as the printing bureau
can get them issued and in proper form.
In fact the delay would be very brief.
Second-The idea of requiring a de-
post of currency to begin with is to
make sure that there will be no con-
traction at all in this operation Mon
ey will go out as fast as it comes in.
The guarantee of the governments" I
understand to mean a guarantee for i'm
mediate payment, not ultimate pay
ment
Third-As to the investment of the 2
per cent guarantee funds if invested in
government bonds, I will say that if
212 per cent gold bonds are issued, the
fiuctuation will not be violent, unless
the debt hereafter should be greatly
increased, and as the investment would
probably be growing sum the risk of
fall could be easily sustained by that
guarantee fund
Fourth-The redemption fund of 5
per cent q may conclude to recommend
10 per cent instead of 81 is not to be
counted as part of the legal reserve
against deposits.
| feel much gratified at the friendly
interest you take in the suggestions
made by me. | do not know that they
are the best that could be made, but l
feel quite certain that if they could all
be adopted, the government would find
itself as bank of issue land that is
what it is, and what it will be for some
years to Gomez in an enormously bet
ter position than it now is
Very truly yours.
LYMAN ]. GAGE.