The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1897-12-17

VVoigatlons were Withdrawn from clroula-
sion and accumulated in the treasury. q
mr.; Gage said there would be ample de-
a naand notes outstanding beyond the sou, :
0G0, 900.
Mr. Brosius insisted that it would I'M
pose on the banks not on the government,
| onT obligation to maintain parity.
Inc Secretary dissented from this, say
l7ing Che demand obligations left outstanu-
| ing would be sufficient to maintain parl
ty.
Mr.. Brosius asserted that the banks
would be called upon to maintain the
par1ty ami that if they were unable to do
It, the country would at once be forced to
silver basis.
Mr.. Gage remarked that he did not see
the situation in that light. He appre.
| hended no such emergency.
Mr.. Gage intimated in response to in
quiries from Mr.. Prince that there were
1890, 900, 900 of demand obligations out
standing.
Mr.. Prince asked if the Secretary 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 $3.50,
| 0OO,0 900 was subject to demand at any time
and must be met with gold If this was
| required. But it was practically i'm
| possibly, he urged, that all these obliga-
| lions should be presented at any one time
or even small percentage of them.
| Mr.. Prince pointed out that $73O, 600, 600
OF demand obligations would continue
| outstanding after the withdrawal OF $780,
| 10000 under the Gage bill. Besides this
| amount outst anding there will be a new
issue of national bank notes under the
Secretary's bill, raising the total damand
obligations of the government to 81, $780,
O00 600 all payable in gold.
Mr.. Gage responded that the national
bank notes would not constitute an ordi-
nary demand obligation against the
government, as the government would be
obligated only in case of a general collapse
of the banks and 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 ell the
demands against the government would
not be presented at one time. 1t was
tenet of banking that all 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 g small
per centage 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
5000, 600, 900 of demands. The Secretary
/ COACQIIco Ill Lulb Wow Ii ehOi CIOl Q
| $500, 600, 000 was set aside in redemption
| fund 1t would to largo extent relieve
| the demand.
Mr.. Newlands of Nevada argued that
| contraction of the currency would &C.
cur under the Secretary's bill, if the
| banks surrendered their notes and took
| the refunding bonds which were proposed
as basis for the notes.
| Mr.. Gage conceded that this might oc-
cur, but he thought the chances of it
were excessively remote
Mr.. Cox of Tennessee made the point
that under the bill banks would get oircu-
lation up to the par value of bonds de-
posted at reduced rate of interest while
1 at the same time the government WAS to
pay 2 per cent interest on the bonds
| of which the BANKS got their circulation.
| MIR. Gage answered that the proposal of
his bill was but first step. tt had to
recognize the fact that the national
banking law provided deposits of bonds
as the basis for circulation. That being
4 the case, he had deemed it wise as first
step to reduce the interest on the bonds.
1 When that desirable end was accom-
/ plished further steps could be taken TO-
| ward withdrawal of the government
| guaranty of the bank note Issue and the
| interdepepdence between the banks and
| the governments.
The hearing had continued until 1.3C
and as several members desired to go OF
i the floor of the House it was arranged
that Mr.. Gage would resume his hearing
before the committee at 10 a. IN. tomor.
row.
In the course of his statement Mr.. Gage
said that his bill would be supplemented
at later date by another measure carry.
ing out the recommendation Of the Presi
dent. that the secretary Of the treasury BIZ
empowered to borrow when circumstance
demanded 800, 600, 00C for term not ex.
ceeding one year. This power would moi
be exercised except at rare intervals, but
it would have q steadying effect from the
knowledge 1t gave the market that the
power existed. With this power to borrow
in case of need and the measures provided
by this bill, Mfr. Gage said he would just
as leave run the government finances al
to run any bank, as there would be NJ
more responsibility or hazard.