Pike County press. (Milford, Pa.) 1895-1925, 1897-10-29
THEPLAN OF MR.GAGE
SECRETARY OF TREAsURY's RECON-
MENoATIoNs REeAaolNe FiNANoEa
He Proposes Scheme For 1noreasibg
the Circulation Of the Nationai Banks.
Public Debt TO Ne Refunded In Two
and a Half Per Cent COLD bonds.


the Circulation Of the Nationai Banks.
Public Debt to he Refunded In Two
and Half Per Cent Cold Bonds.
Washington, Oct 27.-secretary OF
the Treasury Gage has submitted to
the president and cabinet the recon-
mendattons as to financial legislation
which he viii make to congress In his
annual report
While the details of the secretary's
plan of financial reform will not be
made public until his report is sent TO
congress, its general outlines can be
given.
The keynote of the secretary's scheme
is the refunding Of the present bonded
debt of the country In gold bonds bear
ing ~ per cent interest. He believes
that bonds which declare on their face
that they are payable. principal and
interest in gold can easily be sold at
that rate. As most Of the present bond
ed debt bears interest at 4 and per
cent, the annual saving in interest by
refunding would be about SIT .000 900.
This would more than pay the inter-
est on the $3.50 0O0, 900 additional "a per
cent gold bonds which would have to
be issued to carry out the second fea-
ture Of the secretary's plan, which is
the retirement of all the outstanding
greenbacks and Serman notes, so as to
leave no notes whatever outstanding
which could be used to drain the tseas-
ury of gold.
With the retirement of the Sherman
notes the government would be left
with silver bullion in the treasury
vaults, purchased under the Sherman
law at a cost of $104, 900, 000 This could
either be sold at the market price or it
could gradually be coined into silver
dollars to the amount of $125.lD0,OOO.
To Increase Bank Circulation.
To take the place of the currency
which would be withdrawn from cir
culation by the retirement Of the green
backs and the treasury notes Secreta-
ry Gage will propose plan for increas-
ing the national bank circulation much
above its present limit He will pro-
pose that the banks be allowed to is
sue notes up to the par value of the
government bonds deposited by them,
and he believes that practically all Of
the additional bonds that would be is
sued to retire the government notes
would be absorbed by the banks as a
basis for circulation.
The secretary will also propose some-
thing on the line Of the so called Bal
timore plan, by which banks will be al
lowed to issue additional circulation,
probably up to 25 per cent Of their cap
ital stock ample provision being made
for its security. He will recommend
that the tax OH national bank circula-
tion be reduced to just enough to cover
the expense of administering the law
and supervising the banks.
In order to give increased circulation
to the southern states and other locali-
ties in which the silver movement gain
ed strength chiefly on the ground that
more currency was needed for transact
ing business, the secretary will recon-
mend that national banks be permitted
to organize with $4,000 capital. 1t is
believed such a provision, coupled with
proper safeguards to protect circulation,
would give to these communities a safe
and somewhat elastic currency, which
could be put out by the local banks as
II would be needed for moving the crops
or meeting any other demand for
money.
Secretary Gage explained his propos-
ais in detail to the cabinet, and there
was a general discussion of the plan.
1t is possible that he will modify some
of the details before his report is made
public, but the general outline of his
recommendations will be as here given.
Mr.. Gage counts on the feature which
proposes to give. local banks and more
currency to the sparsely settled Sec
tions of the country to aid in securing
votes for his scheme from the senators
from those states and hopes 1t will be
possible to secure law embracing most
If not all of his recommendations. There
will be no difficulty in passing 1t through
the house of representatives if 1t is
backed by the administration and
Speaker Reed. The only difficulty is in
the senate.