The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-12-08
MIR. GAGE RECOMMENDS.

1.-THE recommendations L make must
be construed not as being in them
selves final measures, but rather as
tentative steps in a direction which,
consistently pursued, will lead to con-
ditions ultimately desirable" In these
words Secretary Gage himself passes
sentence upon his own work. He can
not expect that the critics of his meas
alre will be more enthusiastic than it's
author. And, in truth, the plan that
he outlines in his report to congress
seems to US to be one Of those unhappy
compromises whose worst effect is not
that they fail to please, but that, by
dividing public opinion and neglecting
20 crystalline issues, they lead directly
80 stagnation and inaction.
The only portion of the report which
we shall need to consider is that deal
ing with the note issues of the gov
eminent, and the banks. AS to the
greenbacks, the secretary suggests an
issue and redemption division of the
treasury department. to which matters
relating to the note circulation shall be
referred. There are to be collected
$2OO,OOOOOO of the legal tenders, to be
paid out only in exchange for gold. The
treasury is to be authorized to issue re-
funding bonds, bearing 212 per cent in
terest and payable in gold, which shall
be substituted for other bonds out
standing. He advises, as the presidents
message suggests, that national banks
be authorized to issue notes to the face
value of bonds deposited, that the
tax on circulation be reduced to p per
cent and that new banks be authorized
to begin business with a capital of
$4,000 in places having 1000 population
or less He would then allow national
banks to deposit paper money, green
backs, treasury notes and silver GER
tificates to the amount Of 5000, 900, 900
with the treasury; this money to be
exchanged later for the refunding
bonds mentioned above. Against this
amount national bank notes would be
issued. When any bank had deposited
In this way cash to the amount of so
per cent of it's capital, it would be all
lowed to issue notes not only against
that, but also unsecured notes against
% per cent of it's capital additional. The
government would guarantee all notes.
and tax of per cent on this extra
circulation would be held as a guar
Rntee fund to redeem the notes of sus-
pended banks. This, in brief, is the
plan, for the "details and discussion of
which theIreader is referred to the re-
port itself.
The errors which Mr.. Gage makes
Seem to us to be grave. They are Sc
both from the practical and the theo.
retical side. The first is the suggestion
of new bonds payable specifically in
gold. Practically, congress will never
consent to this. Theoretically, it should
not. We have had enough trouble
maintaining the parity" of our money
without introducing a new parity Of
securities. To create a distinction b1
legislation, as this would do, between
gold bonds and coin bonds would IN
crease distrust and throw suspicion
upon the vast mass of obligations now
outstanding. We can scarcely think o.
q more unwise measure than this; an6
congress will not and ought not tt
listen to it.
A c~ai tho {T11xy oiy1I.
accepted by Mr.. Gage, that silver dol
lars and silver certificates must be re
deemed by the treasury in gold on de
mand, is an evil admission; and on,
which, If accepted, would make tn,
maintenance Of the gold standard actu
ally impossible, We are no longer coin
ing silver dollars Therefore thu
amount does not increase. A fxeC
amount can be kept in circulation a
par. If we once propose to redeem
silver certificates or dollars in gold, tn,
endless chain lengthens out immeas
llrably. The mere suggestion that t.
the body Of the greenbacks must b.
added the whole volume of silver II
existence as q possible drain upon tn,
gold reserve IS unfortunate. Mr.. Gag,
doeg not advocate the retirement o
the greenback. He does advocate tina
the silver certificate stand beside j
as & merare TO tie 2otioral credit. Sue
presentation alorc makes his effor