Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1897-12-17

| COG, 00O Mr.. Brosus insisted that II would
| impose on the banks not on the govern
ment from obligation to maintain parity.
| The secretary dissented from this. say
| ing the demand obligations left outstand-
| ing would be sufficient to maintain parity.
! Brosius asserted that the banks would
| be called upon to maintain the parity
| and that If they were unable to do it. 1t
| the country would at once be forced to a
| silver basis. MIR. Gage remarked that he
| did not see the situation in that light. He
apprehended no such emergencies.
Mr. Gage intimated. in response to In,
quiries from Mr.. Prince. that there were
$685.. 900. 900 of demand obligations out
standing. Mr.. Prince asked If the secre-
tary held that this entire amount was
payable In gold on demand of the holders
of those obligations.
The question was theoretical Mr.. Gage
answered. Technically the entire $780,
600 was subject to demand at any time
and must he met with gold If this was re-
uuired. But it was practical impossible
ity he urged that all these obligations
a small percentage of them.
Mr. Prince pointed out that $3.50 600 600
of demand obligations would continue
outstanding after the withdrawal of 5000, :
900 600 under the Gage bill. Besides this
amount outstanding there would be II new
issue of national bank notes under the
secretary'S bill raising the total demand
obligations of the government to $l2So.-
000.00O, all payable IN SOld.
Mr.. Gage responded that the national
bank notes would not constitute an ordi-
nary demand obligation against the gov
eminent, as the government would be OBJ
ligated only in case of a general collapse
| of the banks and a disappearance of their
securities, which was not apprehended
The discussion brought from Mr.. Gage
another general statement of all the de-
mand obligations of the United states
He said he spoke from the experience of
"A practical banker In saying that all the
demands against the government would
not be presented at one time. 1t was d
tenet OF banking that ali demands did not
come at once. If they did, the banks
would not last long For that reason it
was necessary only to provide for small
percentage of the demand obligations.
Mr.. Jordan. the sub-treasurer at New
York. had said TO him that all the trouble
in redemption was caused by the last
s21O. 900. 60 of demands The secretary
conCurred In this view. If, therefore.
500 ,00G.0o0 was set aside in II redemptIon
fund Ii would to a large extent relieve
the demand.
Mr.. Newlands OF Nevada. argued that Il
. contraction OF the currency would occur
under the scCrctaryS bill Ii the banks
surrendered their notes and took the re-
| funding bonds when were proposed as a
basis for the notes. Mr. Gage conceded
that this might occur but nc thought the
chances of II were excessively remote.
that under the bill hanks would get cir
cula ton up to the par value or bonds de-
posted at II reduced rate of interest.
while at the same time the government
was To pay 2la per cent. interest on the
bonds Of which the banks got their circu
lation.
Mr.. Gage answered that the proposal of
his bill was but first step. II had 10
recognize the fact that the national bank
ing law provided deposits of bonds as the
basis for circulation. That being the case.
he had deemed IL wise as a first step to
reduce the interest on the bonds. When
that desirable end was accomplished FUR
Their steps could be taken toward n with
drawal of the governments guaranty OF
the bank note issues and the interdepend
| ence between the banks and the govern
ment.
The hearing had continued until 12.30
and as several members desired to 20 on
the floor of the House. IL was arranged
that MIR. Gage would resume his hearing
before the committee ut 10 !. NJ. tomor.
row.