The Wichita daily eagle., 1897-12-17

demand obligations on the government
to 81 -23o. .oo0. 900 all payable in gold.
Mr.. Gage responded that the national
bank notes would not constitute an or
dinary demand obligation against the
government, as the government would
be obliged only in the case of the gen.
| elal collapse of the banks and a disap-
| pearance of their securities. which was
not apprehended.
| The discussion brought from Mr..
| Gage another general statement of the
| demand obligations Of the United States.
| He said ne spoke from the experience
| of practical banker in saying that all
| the demands against the government
| would not be presented at once time. 1t
| was tenet Of banking that all de-
mands did not come at once. II they
| did. the banks would not last long. For
that reason, it was necessary only 10
provide against a small percentage of
the demand. Mr.. Jordan. the sub-treas-
urer at New York. had said to MIN that
all the trouble in redemption was caus-
ed by the last s2o0. 200. 900 OF demands.
The secretary corcurred in this view. f.
therefore, 100000. coo was set aside in a
redemption fund. Ii would to large ex-
tent relieve the demand.
Mr.. Newiands Of Nevada argued that
a contraction Of the currency would oc-
cur under the secretary's bill if the
banks surrendered their notes and took
the refunding bo.ds which were pro-
posed as basis for the notes.
Mr. Gage conceded that this might
occur, but ne thought the chances of it
We're exceedingly remote.
Mr.. Cox Of Tennessee made the point
that unde~ the bill banks would get cir
cuiation up to the par value of bonds
deposited at reduced rate of interest,
while at the same. the governmest was
10 pay 21-2 per cent interest on the
bonds which the banks got their circu-
lation with.
Mr.. Gage answered that the proposal
Of his bill was but a first step. 1t had
TO recognize the fact that the national
banking law provided deposits on bonds
as the basis for cireulatio.. That being
the case. he had deemed it wise as a
first step, to reduce the interest on the
bonds When that desirable end was
accomplished further steps could be
taken toward a withdrawal of the gov
ernment's guaranty for bank note is
sues and the interdepence between
phe banks and the government.
The hearing had continued until 1890
O'Clock. and as several members desired
to 60 on the floor of the house. it was
arranged that NJ. Gage would resume
his hearing before the committee at 10
a. m. tomorrow.
In the course of his statement, Mr..
Gage said that mis- bill would be supple
mented at later day by another meas
ure carrying out the recommendation of
the president that the secretary Of the
treasury be empowered to borrow. when
demand. 500. 600 for a
term not exceeding one year. This pos
er would not be exercised except at
rare i.tervals, but it would have a
steadying effect from the knowledge it
gave the market that the power existed
With this power to borrow in case of
need and the measures provided by his
bill, Mr.. Gage said. ne would just as lief
run the government finances as to run
any bank. as there would be no more
or hazard
Washington, Dec 1.-THE currency bin
framed by Secretary of the Treasury Gage
was introduced in the house today by
Chairman Walker of the banking and cur
rency committee, Immediately after the
hearing. The bill as presented to the house
is identical with the bill as submitted to
the committee, save for a few changes of
no especial significance which were sug-
gested by Mr.. Walker.
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