The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1899-11-03
GAGE DOESN'T STOP.
Secretary Continues to Talk About
Fixing Gold Standard by Law.

Fixing Gold Standard by Law.
New York. Nov. IA special to the
Herald from Washington, D. c., says:
Secretary of the Treasury Gage, in
discussing with the Herald correspon-
dent the financial questions which will
come up for consideration by congress,
indicated very clearly that in his an
nual report he will repeat in a general
way his recommendation for the eStab-
lishment of the gold standard in law
and for such reforms in the banking
laws as will give to the country more
elastic currency.
At time when many politicians
seemed to be afraid of the word gold"
Secretary Gage perceived that the first
step in the direction of monetary reform
was to found the gold standard upon
law, and not leave it based merely upon
the practice of the treasury department,
which might at some time be reversed
by a secretary of the treasury of the
Bryan school of politics. His declara-
ton to this effect before the banking
and currency committee of the house of
representatives caused a lot of uneasi-
ness among timid men in and out of
congress.
Secretary Gage stands today just
where he stood two years ago on this
important question of firmly establish
ing the base of the entire financial sys-
TEN of the country upon positive
legal enactment.
InseparabIe from the establishment
Of the monetary standard is the neces-
sity of providing an adequate method
Of maintaining it. That no such ade-
Quate method now exists the secretary
believes, is apparent to all who can re-
call the experience of 1898. That the
note issuing and redeeming functions
of the treasury must be entirely sep
arated from it's ordinary operations re-
lating to revenues and expenditures,
Secretary Gage believes to be essential
if the gold standard established by law
is to be successfully maintained in
n financial wi
ranging the business of the country.
Secretary Gage is, if possible, more
firmly convinced than ever of the neces-
sity Of radical reform in the banking
system of the country.
He favOrS legislation which will per-
init the establishment of banks with
$25, 900 capital to meet the demands of
small communities, which will permit
banks to issue circulation up to the par
value of the securities deposited which
will reduce the tax On bond secured
circulation, and which will permit the
issue-under such restrictions as shall
secure the note holder without i'm
pairing the security of the depOSitOr-
of limited amount of currency against
the assets of the banks, these notes to
pay a tax which will both secure the
government against loss in guarantee
ing them and will operate to retire the
notes as soon as the occasion for their
issue has passed.
The secretary does not find it neces-
sary to go back to 1898 to find a prac-
teal argument IN support OF the bank
ing reform which he advocates. 1t is
only necessary to refer to the expert
ence of the last few weeks when the
demand for money to move the crops
has been felt at the money centers more
than usual because supplemented by
the need for more money in all the
channels of trade brought about by the
increased prosperity of the country. In
the absence of banking laws which
would enable the banks to respond to
this increased demand by putting out
their notes, which would be retired as
soon as the need for them had passed.
the only recourse of the business com
munity was to appeal to the treasury
department for aid which was given by
the anticipation of interest on the pub
lie debt.
Students of finance agree with Secre-
tary Gage that a system of banking which
cOmpels the treasury to periodically come
to the relief of the banks is radically
wrong, not only in creating a feeling
among the banks that the government
will come to their rescue when they get
into difficulties, which careful manage
ment might avoid, but also because the
government might not always be able to
give the relief when needed, and wide
spread disaster might enSue.
Secretary Gage would not discuss the
bearing of the recent financial situation
upon the question of bank reform, further
than to say that he would probably use it
in his report TO point a moral