The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1898-01-18
BILL FOR REFORM
MIR. M'CLEARY SAYS THE HOUSE
COMMITTEE WILL REPORT A
MEASURE.
WIDE RANGE OF QUESTIONS.
MIR. GAGE AND MIR. FAIRCHILD IN
DER CROSs-EXAMINATIO
ON FINANCE.
THE MINNESOTA MAN MISTAKEN.
Statement That the Republicans Arc
All In Favor of the Gold
Standard Disputed.
THE MINNESOTA MAN MISTAKEN.

WASHINGTON, Jan. 17.-Congress-
man McCleary said tonight that there
was no doubt that the banking and
currency committee will report a bill
Tor currency reform. There has been
good deal of talk that the committee
could not agree and that the ways
and means committee, headed by Ding
ley, would take hold of the money
question. McCleary said: Our COM
m1ttee is getting on finely and will re-
port bill in about six weeks. 1 do
not know what plan will be taken, but
think the bill will be more comprehen-
sive than the plan outlined In the pres
ident's message"
Secretary Gage and ex-Secretary
Fairchild were before the committee
today for a further discussion of the
pending plan for currency reform AT
ter considerable controversy among
members as to how they were to be
questioned, Chairman Walker nNde
the heterogeneous. In response to
questions by Mr.. Walker Mr. Gage
said he had been In the banking bust
ness for forty years, for ten years
was president of the First National
Bank of Chicago, with a capital of
$3,000,000 and loans and discounts of
SIG 200, 900 to $4,000, 900. He assented to
Mr.. Walkers question that he appeared
as a banker and financier Of long ex-
perience to aid the committee The
chairman asked If 1t was possible to
use paper money and keep 1t at an
equality with coin, In purchasing pow
er, without the coin on hand. Mr.. Gage
answered that he thought not. With
out the specie on hand there was
tendency to distrust. If not q panic,
and to a demand for specie. Mr.. Walk
er's questions took a wide range, go
ing into the technicalities and theories
of monetary science; the effect of a
rise in interest and the diminishing of
loans.
TALKED IN TURN.
Mr.. Gage and Mr.. Fairchild alter
mated in giving their views, which in
the main covered the general opera
lions Of banking and the conditions
most conducive to profitable circula-
ton. Mr.. Gage said it would be impos-
sible in this country to have a general
rate Of interest, as prevailed In Eng
land, where the Bank Of England fixed
the rate. Here 1t varied in the many
states, under statutory law, and the
banks of the country had never been
able to cOalesce on a ruling rate of
interest. Mr.. Fairchild, in turn, ex-
planned that the rate of the Bank of
England was governed by the market
rate which compelled the establishment
of the bank rate. To this extent Lon
don and New York were on the same
basis, each interest rate being respon-
sive to the market and the law Of sup
ply and demand.
Further questions brought from Mr.
Falrchild the statement that one Of the
effects of a rise in interest was to
check the demand for gold, and this
was the experience of the Bank Of
England. Mr.. Fowler asked if per
cent rate of interest would not almost
invariably stop the flow Of gold from
this country. Mr.. Fairchild thought it
would, if the gold standard was In
operation.
Mr. Gage responded to another ex-
tended question that confidence depend
ed upon the assurance Of coin redemp
ton. Referring to the endless chain"
process, Mr.. Gage said it was a figure
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.. Fairchild assented
to this, saying this circle by which
redemption was accomplished, was es-
sential in banking, but that the evil
lay in the fact that the government
had not the banking facilities to make
this redemption absolutely regular and
certain. Lacking these facilities, fear
was inspired and the demands for gold
increased
ULTIMATE SYSTEM.
Mr. Gage made a general statement
of what he hoped to see ultimately &C
complished as a permanent financial
dition of affairs with national bank
notes, made safe to the people without
specific security therefor, wisely re-
stricted by law so as to prevent such
evils as might arise and with the en-
tire elimination of the United States
government from paying its debt by
giving other debts in payment"
why not accomplish this now?" ask
ed Mr.. Walker.
Theoretically there is no reason why
it should not be done; practically there
are many reasons. The predisposition
Of the people is in favor of govern
ment notes. l believe the economic
loss to the people from this system, al
though unknown, outweiehs the narrow
advantage of the mere saving of inter
est secured by these government notes.
You cannot change the minds of the
people, They are timid and suspicious
of bank note issues. They disbelieve
that any one can uphold system such
as have sketched without selfish and