The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1897-12-18

operate to that extent now answered
Mr.. Gage. 1T is in that direction, and
with further legislation developing, it
might ultimately lead to such a result.
But I would not say that silver viii be
restricted to subsidiary silver. I would
say system of silver which would be
subordinate. II is subordinate now
After this diversion to the silver ques-
ton, the consideration of the bill by
sections was resumed at section I,
where the discussion closed yesterday.
This section provided for an increase
OF the national bank circulation, to be
secured. not by the deposit Of bonds or
notes, but by the assets OF the bank
and the government guarantee. MIR.
Gage referred to the advantage Of this
additional unsecured circulation, il Civ
Ing elasticity to the currency at points
where it was most needed. He showed
from the returns of the comptroller
that small percentage Of losses came
from national banks and further than
this, unsecured circulation would fail
in any considerable obligation to the
G government by reason OF its guarantee,
and this would be overcome by the
small tax on the bank, constituting a
safety fund.
REFUNDING BONDS.
In answer to questions by Mr.. New
lands of Nevada, the secretary said
that the amount of the refundinS bonds
under the bin would reach 81, 136. GOO, 900,
il all of them were issued. This being
the basis for circulation, bank notes
could be issued for that amount. Be
sides these, the additional 25 per cent
OF unsecured circulation would give &
further issue Of bank notes OF about
$290 00o, GOA. But that vast issue was
merely the creation Of a spectre and
vas rot a reality. The banks could
not get all the bonds and use them for
issuing bank notes. On The contrary,
government bands 2Te always taken
largely by private investors, trust COM
panies. insurance companies and par
ties across the water. Any effort of the
banks TO absorb all the bonds would so
AFFECT the price as 10 defeat the objects
in view. This would also serve as q
cheek to the expansion OF bank circu-
lction
Mr.. Newlands referred to gold con-
tracts, and asked the secretary about
them. Mr.. Gage did not deem it de-
sirable 10 interfere with private con-
tracts OF this character any more than
was necessary. To Mr.. Prince of Illi-
nois he explained that his expression,
gold ana other legal money" used in
the bill, meant no reflection on silver
or other classes Of money. The other
legal money Included silver. and the
expression merely served TO cover a
Vel understood term.
The extent to which drains on the
government stock OF gold would result
un5er the plans OF the bin excited much
discussion. Mr.. Cage stated that all
redemptions would be made in gold or
its equivalent. MIR. Fowler of New
Jersey said this opened a serious dues-
ton. and inquired Il silver certificates
would not be deposited and impounded,
and their place taken by national bank
notes, Shus increasing the decline in our
gold supply.
Mr.. Gage answered that it was easy
to conjecture up hypothetical objec-
tons, but he did not look at this case
IS serious. Any secretary of the treas
ury, on receiving these silver certifi-
Gates, would swap" them for green
back treasury notes ard other forms of
government notes. which served to
drain notes and thus build up the re-
compton fund
Regarding section 8. which pledges
the faith of the United States to the