The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1898-12-08
SET FORTH IN THE REPORT OF
SECRETARY GAGE
CURRENCY REFORM ADVISED
A Bounty System Recommended to
Secure Revival of the Mer-
chant Marine
Associated Press Special Wire,

government revenue lIUiU al soultSs ioi
the last fiscal year was S49i, 1888 951.75 Dis
bursements, $685., 1891 ,20l.3 deficit, $685.
o., 24760 The receipts from internal rev
enue were $4,000, 64l.09; form the Gus
toms, 49575, 062.35.
The balance of silver bullion on hand at
the minis for the coinage of silver dollars,
subsidiary silver coins, and for payment oil
deposits of silver bullion in fine bars, July
l, 1898, was: Purchased under act of July
II, $780, l07, 70l, sc fine ounces, cost s97,-
407. 490S2; for subsidiary silver CONS at
mints, l,04l 1924 "a fine ounces, cost Sl,356,-
1867; for subsidiary silver coinage at assay
offices, pol 494.0 Of fine ounces, cost S122,-
Sl5l7; at United States assay office, New
York, for payment of deposits IN fine bars,
4l995l ID fine ounces, cost S466, 6l2.31, Total,
100 1864 ,504 80 fine ounces, cost 1895, 20 So
Including the balances on hand at the
mnts, July l. 1898, the net seignlorage on
the coinage of silver from that date to June
3d. 1898, was $SS, 49,, Sl5.37. The net i'm
ports OF gold during the tscal year We're
Sl04, 1868, 476, as against S44,6O9,S4l Tor the
fiscal year 1897. The net silver exports We're
S24 49,, l46, as against $50, ,S25 tor the
previous fiscal year. The value OF gold and
silver consumed in the industrial arts by the
United States during the calendar year 1897
was: Gold, Sll.S7023l; silver. coming
value, sll POI, $50; total Of s2S,G7l.3sl.
The foreign commerce OF Che fiscal year
1893 in many respects has been phenomenal.
The grand total of exports was the largest
ever recorded. For the first time III the his
tory of our foreign commerce, the year en-
variations averaged more than lOO,M0,GC0
her month. the total being 81 23l, 1872 $50,
against 81 $50 1913, 500 in 1897, and slO3O, 21s.,
AS in 1892 no other years having reached
the blllion-dollar line.
OF our domestic exports, the value OF ag-
ricultural products was SS53 6S3,5I0, sur.
passing by S54 1855, 1913 the highest record
ever beose made, that OF 1892 Our manu-.
facturers also made their highest record OF
COZ 1854. against 1927 ,2S5, 39l i'll the preceding
wear. For the first time also in the hlstroy
of our foreign commerce, the exports OF DO
nestle manufactures were greater than the
imports OF foreign manufactures, Whle
the total exports of the year were twice us
great as the total mports-a CONDITION mere
tofore unknown ann .o,o-.
The total imports OF gold were SlZo'ool'o,t'
and the exports Sl5, 4O639l; net imports
SlO4, 9S5, 2S3 the largest on record
The Secretary urges revival OF the AN
erican merchant marine. tie suggests
broadening of the act relating to the carry
inp of ocean mails; the establishment OF a
system of graded bounties upon the mileage
navigated by registered American vessels
while engaged in the torelgn-carrylhg trade
as compensation for the training OF seameh
available for the national defense, the sys-
tenn to have regard also to the construction
Of vessels which may be promptly and eco
nomically converted into cruisers, troop
Sims. golfers. and supply ships for the Use
of the government; also moderate increase
in tonnage taxes. Lastly, the RESTRICTION OF
The trade between the United States, Porto
Rico and Hawaii, and the coastlng trade OF
those islands to vessels OF American iesis'
If is suggested that Congress take steps
70 assimlate the currency OF Porto Rico TO
that of the United States;
The bond question is discussed at length,
and the success of the popular loan plan
favorably commented upon
Close calculation is gwen to the bahk-
ing and currency question, ana the cecre-
taly says:
government notes is opposed with many non
est prejudices and assailed by bitter dehun-
Citations. The first arise from failure to
comprehend the true philosophy OF paper
currency, and must be patiently considered.
The latter obscure the question by reckless
statements, charging that all propositions
for currency reform are bank consplracles
to exploit the people. Referring to snch
proposals, an eminent speaker recently
warned his uninstructed hearers: these
banks will become cormorants to eat up your
substance, control your politics and warp
the political views in all the communities.
Send a man to Congress to help defeat this
great evil" Such TRADES against reason,
and such appeals to prejudice and ignorance,
the statesman must oppose by the simple
truth.
is system of bank credit currency, in its
ability to meet the varying wants OF an IN
dustrous commercial people, superior to the
issues of government paper money! II that
question be answered atfllmatively, 1t may
be safely left to time to show that the ma
tme of the banker differs not at all from
the general nature of men in other callings.
As every other man who gets an honest llv-
ing must live by service rendered in the
sphere of his activities, so the banker must
perform faithfully and well his function or
fail of his fair reward"
Mr.. Gage goes on to explain some of the
shortcomings of the present system, par
ticularly the lack OF elasticity in the cur
rency and its nadeQuacy to meet sudden de-
mands like those of the big annual crop
movement. He contrasts these with the
practical workings of a bank note currency
as eXempfed in the system of France, Ger
many, Scotland and Canada
Under such a system the financial move
ment may thus be described:
Commencing as before with an inward
movement OF funds from the exterior to the
centers, the money forwarded would then
consist largely of bank notes These re.
ceived at the centers would not, like the
legal tenders OF the present, form base fol
expansion. The desire to obtain legal
money in their place would cause the banks
receiving them to push them home for re-
demption in legal money, but the general
effort in this direction would neutralize, tc
large degree, the effect desired. Bank
A, sending home the notes OF bank b, would
be met, not by d payment in legal money
but as an offset by the presentation of The
notes of bank b. There would be mutua
retirement of their respective bank-nott
liabilities. OF course, this precision in off
sets would not be the rule, but the ilustra
ton shows the general effect to be the TEN
porary retirement of currency when il
cannot be circulated in the service of tn,
country's trade and exchange. Observe this
The power to lend it not thus lost: it is TEN
porarily suspended. When, with the re
curing needs Of the interior to handle it.
products OF the farm, the factory and tn,
NINE the power to issue circulating note,
may be summoned into use then the need.
OF industry will coincide with the profitin.
motives of the banker, and the full valu,
of this latent power will be experienced, not
IN the centers. where bank notes are moi
needed and will not circulate, but in tn,
interior, where raw products are raised
and where the busy wheels of shop and fac
tory certify that labor wages are to be paid
The power of the bank note, so temper
arily suspended, will always be restored il
full upon the call OF industry. The power