Barbour County index. [volume] (Medicine Lodge, Kan.) 1880-current, 1897-02-24
TO DESTROY THE eREEEBAcKs.

House Committee on Banking and Cur
rency was considering the Baltimore
plan" in December 1894, Mr.. Gage, in
response to an invitation to appear be-
fore the committee to consult and advise.
addressed the following letter to Hon.
w. NJ. Springer, then chairman of the
committee:
DEAR SIR: I am honored by re-
ceipt of your request to appear before
your committee on Saturday next or
some day prior thereto in regard to the
recommendations of the President and
Secretary of the Treasury concerning
the currency.
The notice is so short that 1 cannot
arrange to be present in person, but
beg very briefly to state here the con-
clusion at which have arrived.
Agreeing with criticisms made by
these officers of the government as to
the present weakness of our situation
and the great desirability of separating
the government from the direct re-
sponsibility of currency issues, I am
persuaded that the country is not ready
to accept their recommendations as to
the methods proposed.
I'm making any change the method
should be 80 simple that all can COM
prehend it, and it should be seen that
the incidental effects would not be III
any direction disturbing to trade, COM
MERGE or industry. L believe that the
Baltimore plan carries the true prln-
clples of a credit currency, but we can
not reach it by any one step, and years
may intervene before it could he realiz-
ed. In the meantime the way for the
government to step out of the currency
business and place the burden of re-
demption upon the banks is plain.
Authorize the issue of $3.50, ZOO, 900
of IL per cent. bonds payable at such
times as Congress may elect twenty
five years desirable) to be offered to sub
scribers at par. Accept in payment
United States legal-tender notes or
treasury notes, the same to be cancel
| led.
Amend the National banks act so
that banks can issue circulating notes
up to the face value of bonds deposited
as security for circulation. Reduce the
tax on circulating notes to nehalf of
per cent.
This done, National bank notes
would make good the vacuum caused
by the retirement of government notes;
In fact there would be some expansion
under it to be followed later by some
contraction through forced redemption
of bank issues, if it be true, as some
claim, that the volume of circulating
medium in the United States is larger
than can be maintained, and that the
outflow of gold is natures method of
equalizing things.
IF this be so, if contraction through
the expectation of gold, or by the retire
ment of portion of the paper money
be logical sequence of the situation
then in that case the government, be-
ing safe from demands, the banks with
circulation outstanding would lie oblig-
ed to bring their issues within narrower
limits; but all this would work itself
out, and need not be dwelt upon at
length now.
1.-The problem is this: to take the gov.
eminent out of the note-issuiEg bust
ness
Il. Without contracting the cur.
rency in the process.
"2. Without inviting to expansion
Secretary Carlisle's plan is subject
to the danger involved under the last
suggestion. Yours very truly,
LYMAN j. GAGE"
Notice the plan he wishes to employ
for the purpose of placing 1.-The burden
of redemption on the banks" Tissue
$25O,OOO,OOO 81 per cent bonds and &C
cept in payment U. S. notes, same tt
be cancelled" Then, ''amend the ma
tional banks act 80 that:banks can is
sue circulating notes up to the face val
ne of bonds deposited and reduce tn,
tax to onehalf of one per centl' Ii
other words. allow the national bank
to own and control the currency ant
the whole financial policy of the nation
Let them be the supreme power. lie
them dictate to the government, le
them fix interest rates and finally lie
them control the prices of all product
and labor as they certainly will whel
their power is made absolute and contin
uous. The national banking system il
Ubiquitous as 1t is but if the next con
gress follows Cages recommendations
the outrage will be quadrupled In in
tensity.
No one should allow himself to enter
, tain the impression that 1.-THE vacuum
, caused by the retirement of the green
backs" would be made good by a large
issue of bank notes. The result woul,
be that the bank would have more mon
ey and lower tax and higher interes
rates, while the people would have les
money, higher taxes and higher inter
est rates to pay on borrowed money.
: The argument used in favor of retir
3 ing the greenbacks is that they are tn
> direct cause of depicting the gold re
serve. That they can be used for thi
q purpose Is true but the fraud is foun,
3 In maintaining the gold reserve. Their
is no law which authorizes it; it is sim
ply usurpatlon exercised by the Sec
Rotary of the Treasury. There is n
! doubt but that our currency system
D needs improvement but it should no