The Prince George's enquirer and southern Maryland advertiser. (Upper Marlborough, Md.) 1882-1925, 1898-01-21
REFORM OF THE CT RREN(N.

Secretary Gage and cN-Sccrctary Fair
child were before the House committee on
| banking and currency Monday for fur
thcr discussion of the pending plans for
currency reform. Chairman Walker ma lie
the Undergraduates.
In response to questions 10y Mr.. Walker,
Mr. Gage said he had been in the banking
business for forty Years; for ten years he
was president of the First National Bank
| of Chicago He asscnted to Nj W alker ;
question that he appeared as banker an"
tinancicr oflong experience to aid the COM
mittec
The chairman asked if it was possible to
use paper money and keep it at an cquail-
ty with coin in purchasing power without
the coin on hand.
Mr.. Gage answered that he thought not.
Without the specie on hand there was a
tendency to distrust. if not panic, and to a
demand for specie.
Mr.. Gage said it would be Impossible in
this country to have a general rate of in
terest, as prevailed in England, where the
Bank of En- gland fixed the rate. Here 1t
varied in many States, under statutory
law, and the banks of the country had
never been able to coalesce on ruling
| rate of interest.
Mr.. Fairchild, in turn, explained that
| the rate of the Bank of England was gov
erned by the market rate, which com
| 81, If la nix RATE
| To this extent London and New York
were on the same basis, each interest rate
being responsive to the market and the
law of supply and demand.
Further questions brought from Mr..
tairchild the statement that one OF the
effects of rise in interest was to check
the demand for geld, and this was the ex-
| perience of the Bank of England.
Mr. Fowler asked if 6 per cent. rate OF
! interest would not almost invariably stop
the flow of gold from this country. MI
Fairchild thought it would, if the gold
standard was in operation.
Mr.. Gage responded to another extend
ed question that confidence depended on
the assurance of coin redemption.
Referring to the ''endlcss chain pro-
! cess, Mr. Gage said it was inquire OF
speech applying to all financial operations,
| where obligations came in and went out,
| in a circle So long as the obligations
were met, the operation was not horrible
thing but was right and necessary.
Mr.. Farchild assented to this, saying
this circle by which redemption was ac-
complished was essential in banking, but
that the evil lay in the fact that the gov
ernment had not the banking facilities to
make this redemption absolutely regular
and certain Lacking these facilities, feal
was inspired and the demands for gold in
creased
Mr.. Mitchell. of New York, called at
| tention to the provision of the Gage blll
| for the accumulation of greenbacks in the
treasury for the purpose of preventing the
| ''endlcsS chain.
Mr.. Gage said that as applied to the GOV
ernmcnt the endless chain was pre- judicial
because the demand liabilities of the gov
ernment were so great that the thcoreti
cal provision of gold is inadequate to re
deem promptly ard to give confidence OF
prompt redemption. and that, said Mr.
Gage, is a source of weakness.
Nh Gage made general statement OF
what he hoped to see ultimately accom-
plished as permanent financial system
1T would be Il condition of affairs Will
national bank notes, made safe to the peo
pie without specific security therefor
wisely restricted by law so as to prevent
entire elimination of the United States
government from paying its debts by Civ
ing other :.ebts in payment
why not accomplish this now asked
Mr. Walker
| Theoretically there is no reason why il
should not be done now; practically there
are many reasons. The predisposition oil
the people is in favor of government notes
| believe the economic loss to the people
| from this system, although unknown, out
! weighs the narrow advantages of the mere
saving of interest secured by these gov
eminent notes. You cannot change the
minds of the people. They are timid ant
suspicious Of bank note issues. They dis
believe that any one can uphold system
such as | have sketched without selfish
and sordid motives. They fear it involves
hazard and loss. They recall the perioc
of wild cat banks. 1t is desirable, there
fore, to make the first step so simple as te
show the people that it involves no dan
gers, so that in time the full development
of the plan would be responsive to public
| sentiment
In the course of the discussion, Mr.. Nc
| Clcary, of Minnesota, made the statement
that every republican on the committee
favored the gold standard proposition oil
the monetary commission bill, when Mr.
Hill, of Connecticut, protested that the
| statement was not correct.
|