New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-12-29
THE FAILURES AND MIR. CAGES PLAN
REPRESENTATIVE LACEY's CRITICISMS AN
swEREr, BY TREASURY OFFICIALS.

REPRESENTATIVE i-sNEl Nf-ii.N''"2 ~
swERED BY TREASURY OFFICIALS.
Washington. Dec 2s (speclaD.--The suggestion Of
Representative Lacey. 0, Iowa. in an interview
printed here this morning. That the suspension OF
the Chestnut Street Bank Of Philadelphia consti-
tuted an argument against the plan OF Secretary
Gage for the issue OF certain proportion o. bank
notes upon commercial assets. excited some sup
prise among Treasury officials and others who have
studied Tho plan OF the Secretary. The statement
OF Mr. Lacey seemed to imply that the holders Of
notes issued by the Philadelphia bank might have
lost something II the notes had been issued TO the
extent proposed by Mr.. Gage upon tho commercial
assets Of the bank. without specific security In the
custody o. the Government Mr.. Lacey declared
that those banks had assets which were believed
20 DO good and that ~ their outstanding bank
bills were issued against these assets with no
Government guarantee, people would begin 10 sort
GU; their money to ascertain how much they have
lost by holding these Philadelphia notes" The
facts are declared at the Treasury 10 be directly
contrary 70 The suggestions OF NJ Lacey. No one
but insane man. II was declared in ono quarter,
would have begun to sort out Philadelphia notes
IN order to ascertain his losses for there could not
possibly have been any losses under any conce!va-
bic view OF the case. The plan Of Secretary Gage
proposes that National banks may IN certain cases
issue credit notes. based upon their commercial as
sets. up 10 the OF % per cent OF their capt.
tai The capital OF the Philadelphia bank was
TEN 0! circulation were $4,000
Controller Eckcs discussed to-day tho mathe-
nat!ca phases Of the matter. but did not care 10
make any comment on the personal opinions Oh MI
Lacey on the value Of the assets Of the CHEST
nut Street Bank He said: "If II should turn out
that the loss Of the bank should be all OF It's cap-
tai stock. which IS far from what Is li:ey TO be the
case. there wouli still be assets amounting 10 more
than 10000. upon which the Government wouid
have first lien to recoup itself for any amount OF
money that II might have TO advance TO redeem It's
notes The Government with a maximum note
Issue upon commercial assets under the Secretary 5
Plan OF $4,000, would thus be protected sixteen
times over All this without regard 70 the SAFETY
iund The loans and discounts or the chestnut
Street Bank on October 8. 1897. the date OF their
last regular report $9jG5Gi. and other items
like the premium bonds carried. cash In The
bank and amounts due from other banks, car
Iied their total resources 20 AOSS.s2Z 1nis "ou'u
De thrtytwo times the possible lien OF the Govern
neni for the redemption OF the notes in case lle
notes were paid directly from the Treasury. The
value OF the assets may have declined somewhat
aimee that time and the volume Of discounts been
reduced. but have put OF the WORST possible
assumptions In declaring that II the entire capital
were wiped out there would still be s20O0GDJ OF 8ood
ssse's upon which the Government would nave 1t
nrst lien, paramount TO every other claim. This
ejaculation is based upon the theory that the bank
would issue every dollar OF circulation which Is
permitted by the Secretary's plan. AS matter OF
TACT. as demonstrated by the experience OF Canada
una other countries whore issues commercial as
se'S "a are permitted the circulation would probably
sh moreover. the Government would have collected
ssDout 600 from the Chestnut Street Bank in the
tSam OF tax OF per cent upon the circulation II
the , seeretsrys plan mad been In Operation ron
nave amounted 10 $500 a year aud In ten years
would have amounted to Sl50o9 or 70 per cent Of
was not specially secuted OF course. The whole
ssumenl OF loss to the noteholder fans to TIE