The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-12-07
SECRETARY CAGES REPORT.

President Mckinley is fortunate in having.
in a period of monetary unrest and large
financial transactions, q secretary of the
treasury who, besides having made study
Of finance, has had practical experience as
ffnancier and banker and can speak regard
ing such matters as one possessing wisdom,
II not authority. At the present time Sec
rotary Gage has to deal not only with i'm
portant questions of domestic finance, but
with many novel and difficult ones, growing
out of our recent acquisition of new possess
sions. He handles them all like one accus-
toned to deal with large financial questions,
0nd his conclusions and recommendations
are made with clearness and force. Whether
one agrees with them or not, all must admit
that they are the arguments and conclusions
of fnancier and not of a politician. Out
side Of the secretary's clear presentation of
the currency system in Porto Rico and the
financial needs of the island the most inter
esting parts of the report are those relat-
ing to the defects Of our present currency
system and the way to reform it. Other sec
retaries and public men have endeavored to-
portray the mischievous operation and dam
gerous results of government legal-tender
notes on the business Of the country, but it
has never been as we'll done as it is by
Secretary Gage With the perfect knowledge
of an experienced banker and in an admir-
ably clear style he describes the movements
of a greenback currency under different con-
ditions and shows how it tends to conges-
ton in the money centers, Cutting the
money market there while other parts of
the country are deprived of reasonable ac-
commodations, and thus periodically de-
ranging business and producing stringency
and panics. From a business point of view
the evils of a greenback currency have never
been as clearly portrayed as they are in this
report. BY contrast, the superiority of a
nonlegal-tender bank note currency is as
clearly presented. The secretary is decidedly
of the opinion that reform in our currency
system is necessary and that it is easily at
tainable. He is not welded to any particular
plan of reform, but would favor any that
would gradually eliminate the greenbacks
and furnish bank note currency at once
adequate, economical and safe. He is still
of opinion that the plan outlined in his first
annual report and formulated in bill laid
before the House committee on banking and
currency last year would be effective. The
two leading features of that plan were, first,
all greenbacks, treasury notes and silver
certificates once redeemed to be re-
tanned and not paid out again ex-
cept for gold or silver. Second, in or
der to provide a flexible currency
capable Of responding to the temporary
and fluctuating demands of commercial
movement, it was proposed that national
banks should issue notes unsecured by any
deposit Of bonds or currency to the extent of
Is per cent. of their secured issues, these un-
secured notes to constitute first lien upon
all assets of the issuing banks. Payment is
also to be guaranteed by the United States,
which is to secure itself against possible
loss by tax of per cent. upon all unse-
cured circulating notes, this tax to consti-
tute safety fund for the redemption of the
notes of defaulting banks. A general bank
note redemption fund in the United States
treasury, in consideration for which the gov
eminent pledges it's faith to secure the re-
demption of all notes regularly issued by the
national banks. is to be constituted by de-
post of 10 per cent. of the aggregate cir
culation of each bank, instead of the per
cent. deposit now required. The bill also
provided for the organization of national
banks with a capital of not less than $4,000
in towns of 1900 population or less, and no
national bank notes to be issued of lower
denomination than ten dollars This is the
Gage plan. Whether it is the best is for
Congress to determine, but the secretary
gives very strong reasons why that or some
plan embodying substantially the same ideas
should be adopted. The report is an inter-
esting contribution to current financial dis
clIssion