Hot Springs weekly star. (Hot Springs, S.D.) 1892-1917, 1898-12-16
MONEY OFTHE NATION
ANNUAL REPORT OF sEcRE.
TARY GAGE.

TARY GAGE.
Chief of the Treasury Department Hiss
cusses the Need of Banking Reform.
and the Necessity of Meeting New
Conditions.
Secretary of the Treasury Gage mas
made public his report on the condition of
the finances Of the country and the work
accomplished by his department during
the year. 1t is all interesting document.
Upon the subject of currency and banking
reform he says:
The arguments against government issues
of paper money as Il medium for CONNER
ciai exchanges have been fully made and
need not be repeated in detail. The pro-
posal to substitute bank issues for govern
ment notes is opposed with many honest
prejudtccs and assailed by bitter denuicia-
tons. The first arise from Il failure to com
prehend the true philosophy of a paper cnr-
rency and must be patiently considered.
The latter obscure the question 10y reckless
statements. charging that all propositions
for currency reform are bank conispiraci's.
money issued by government does not pos
sess the qualifications TO make it a proper
factor In the country's exchanges Of prod
ustS uEu uiiuIlIuCtuFtS, II tue ltHt tisn ms.
admitted that 1t is Il dcranging and disiwrb-
Ing factor in its relation TO industry aud
commerce., then the time has come to siI,-
stitutc for 1t n currency which Will ale
quatcly, economically and safely meet with
the cver-growing needs of the country. rap
Idly developing. as 1t is. in the power uf
production, In the number of its people and
the Importance Of lis domestic and foreign
trade.
In answer to the question whether a
l,r,,I. ,,ato ,,v,,,n - L. ..At -
which will be economical, adequate and
safe and serve the public needs in a bet
ter way han is now served. the Sccre-
tary points to the system in force in
Canada.
The facts set forth by the Comptroller re-
late exclusively to the proposition that the
notes of a failed bank shall be a
lien upon the assets for their full vainc bc-
fore amy rights accrue 10 other creditors.
The Issue of notes upon the general assets
of national banks may be made perfectly Sc
cure wttlcnt the requirement thar the notes
be Il first lien upon their assets. II would
only be necessary to award TO the notcAoll-
err the same rataDie proportion of tie assets
which went to other creditors. and 10 pro-
vide That the amount required 10 pay tho
difference be obtained 10y AN assessment. up
ON ali the national banks. collected ratably
In proportion to their share i'm the ctrcal;,-
tiou of this character. The vital question is,
What percentage of assessment upon this
e..eaiation would be required In order to
of failed banks? The experience Of Tho ma
tional banking system emonstrates ;ha. the
ASSESSMENT would he insigniiicant.
INC total circulation of failed banks out
sanding at the time of failure up to Oct.
~. 1897. was Soo,S93.s2 The loss upon
these notes. If the security for .heia had
been Impaired in The same degree as the
security fer other liabilities. would have
been S3:;Is. lG5. or an annua! average of
about S1G3.oG0. This loss would have been
made good by a lax of about one-twc.rth
~ ! Per cent. PER year upon The circulation
or the solvent banks. A lax of one-iifth OF
i per cent. upon the average circulatiou of
The national banks since the foundation Of
inc sTs,e'h won!'l have paid suci, losses up
to Oct. III. 1897. aud left 81 surplus Of about
N"'"'o.'op III the guaranty fund.
Urges Former Mcnrures.
In rs last report I ventured uson Specific
recommendations. These recommendations,
II adopted and formulated into law, w;IId
iii nay opinion he curative of the evils herein
pointed o,it. In house bills Nos. 1O.oSg and
lV.3': are embedded IL series of measures in
some respects more meritOrious. The meas
C!si harcii! proposed are the result of care
~ study by expert and experienced men.
With soai" mOdiiicatiOns-tle reasonable
fruit cf full disrussicn--thcy would. i be.
lieva. meet the cnun,ry's needs. com.
mend .'ir subject 10 the early and earnest
attention, VI Congress.
IN the point of fractional silver the re-
port contains this paragraph:
The amount of fractional silver coin held
l ,y NE treasury ,s5 July !; 1s95. was s1s.2ol.-
has u; present. Nov. Il. hecn reduced tn ST..
l-2.a-G. much of which is so worn as 10 lie
init ior circulation. The amount available,
i s:r.'tlted among the several sub-treasurles,
gives hut small stock to each. and some dc.
nominations are exhausted. The Secretary
"f the Treasury should he authorized 10 re.
coin i''ls unr,'ircnt stock and any such coin
r.asiiry, the difference between its face
fa.':r ii'.d tie new coin 1t will make to he
paid "';t OF any moneys in the treasury NOT
'herw'.e appropriated. Further provision
;i'Mil coin. and 10 that end 1t Is suggested
that !hs Secretary of the Treasury be au-
fi"r.zed Ia use any silver bullion now jn.the
treasury fer the coinage of suci denomina-
lions as may he required from t;nIn 10 lime
10 meet The demand from the different Sec
liens Of illc country. With an cyer.iDcrens.
ins population. which will be added TO in
INC near in,i.re by the acquisition OF :ddi-
iona territory, the demand for fractional
SILVER coin VIII be such as to maize it asseu-
italy necessary that the stock sho,il ,,e in
creased.
III is suggested that. at the proper time.
action be taken by Congress to assi,n;lote
The currency of Porto Rico to tia. of Tho
United States. so far and so apidl as
this can be done without undu.y aislurb-
ing existing conditions and contract rcIa-
tions in Porto Rico. This. it is believed.
can lie accomplished by making customs
dues in the island payable in American
money, yet receiving the silver pesos and
cc.,tavos at a fixed relation to our dollar.
The revenues of the Government from
all sources for the fiscal year ended June
30. 1888, were Si3l,33 ,953. IA. while the
expenditures for the same period were
2Ol.3o, showing q deficit OF $685.
otI.24I.6O. AS compared with the fiscal
year of 1877. the receipts for 1898 in
creased SG3.9i6. 1886. There was an in
crease Of So, 504, 423.2 in the ordinary
expenditures. The revenues for the cur-
rent fiscal year are estimated at S577.-
S14,G47 81, while the expenditures for tho
same period are $tS9. s74,G47.37, leaving a
deficit of $112,OOO,OOO. For the fiscal
year 10OO tlc ,avennus arn os,;n,,+,a -