The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1900-03-14
The Inauguration of the New
Currency Law at
NATIONAL TREASURY
Secretary Gage Tells How the
Thing VIII Work.
Treasury Balance viii Not Loom
Up to Previous Extent.


cial bill that passed the house yester-
day, in which he says:
The financial bill which now awaits
only the signature of the president to
become a law, has for it's first object
what its title indicates the fixing of
the standard of value and the main
tanning at a parity with that standard
of all forms of money issued or coined
by the United States. 1t reafirms that
the unit of value is the dollar consisting
of twenty-five and eight-tenths grains
of gold, nine-tenths fine, but it goes on
to make the duty of the secretary of
the treasury to maintain all forms of
money issued or coined at a parity with
this standard. It puts into the hands of
the secretary ample power to do that
For that purpose the bill provides in
the treasury bureaus of issue and re-
demption any transfers from the gen.
eral fund of the treasury's cash $780,,
600, 900 in gold coin and bullion to the
redemption fund, that gold to be used
for the redemption of United States
notes and treasury notes. That fund is
hencefOrth absolutely cut out of and
separated from the cash balance in the
treasury and the available cash balance
will hereafter show a reduction of $780,
900, 900 from the figures that have here
tOfOre prevailed. This $3.50, 000, 600 re-
demDtion fund is to be used for no
other purpose than the redemption of
the United States notes and treasury
notes, and those notes so redeemed may
be exchanged for gold in the general
fund or with the public, so that the re-
serve fund is kept full with gold to the
$3.50, 900, 600 limit.
The secretary is given further power.
If redemptions go on so that the gold
in this reserve fund is reduced below
500, coo 900 and he is unable to build it
up to the $3.50, 900, 900 mark by exchange
| Z Il 9TH
wise, he is given power to sell bonds,
and it is made his duty to replenish
the gold to the $3.50, 000, 900 mark by such
means.
The "endless chain" is broken by a
provision which prohibits the use of
notes so redeemed to meet deficiencies
in the current revenues. The act pro-
| vides for the ultimate retirement of all
! the treasury notes issued in payment
for silver bullion under the Sherman
act. AS fast as that bullion is coined
into silver dollars treasury notes are to
be retired and replaced with an equal
amount of silver certificates.
The measure authorizes the issue of
| gold certificates in exchange for de-
/ posits of gold coin, the same as at pres
| ent, but suspends that authority when
| ever and so long as the gold in the re-
| demption fund is below 100000, 600 and
| gives to the secretary the option to sus-
| pend the issue of such certificates
| whenever the silver certificates and
| States uOlGS III lAt BtllSIeAA 1O4A0
| of the treasury exceed $50 000, 900.
The bill provides for a larger issue
| of silver certificates by declaring that
| hereafter silver certificates shall be is
| sued only in denominations of ten dol
| lars and under except as to ten per cent.
Of the total volume Room is made for
| this larger use of silver certificates in
! the way of small bills. By another
| provision which makes it necessary as
fast as the present silver certificates Of
| high denominations are broken up into
| small bills to cancel a similar volume
! of United States notes of similar de-
nominations and replace them with
| notes of denominations of ten dollars
| and upward. Further room is made
| for the circulation of small silver GER
| tificates by a clause which permits ma
tional banks to have only one-third Of
! their capital in denomination under ten
| dollars
one clause of the bill which the public
will greatly appreciate is the right that
it gives to the secretary to coin any of
the 1890 bullion into subsidiary SILVER
| coins up to a. limit of 500, 000 000-
There has for years been a scarcity
of subsidiary silver during periods of
active retail trade, but this provision
win give the treasury ample Opportuni
ty to supply all the subsidiary silver
that is needed. Another provision that
the public will greatly appreciate is the
authority given to the secretary to re-
coin worn and uncurrent subsidiary sill
yer now in the treasury or hereafter
received. The bill makes a continuing
appropriation for paying the difference
between the face value of such coin
and the amount the same will produce
in the new coin.
"a distinct feature of the bill is in
reference to refunding the 8 per cent
Spanish war loan, the ? per cent bonds
| maturing IN 1907, and the per cent
bonds maturing in 1904, a total of $685.
100000 into new 2 per cent bonds. These
new 2 per cent bonds will not be Of
fered for sale, but will only be issued il
| exchange for an equal amount, face
value, of old bonds. The holders of ole
bonds will receive a premium in cash
to compensate them in a measure fol
the sacrifice of interest which theS
make. The cash premium will be com
puted on a basis of the present worth
of the old bonds at "a per cent, anG
will be, on April 1, the date that the
new per cent bonds will bear
$105. 1851 for the threeS: $11.6765 for the
fours and S1100751 for each 800 of tn,
fives. This exchange will save the gov
eminent, after deducting the premium
paid, nearly $23. 600 600, if all the hold
erS of the old bonds exchange them TO
the new ones. New national banks tina
take out circulation based on the new
bonds are to be taxed only one-half o
one per cent on the average amount o
circulation outstanding, while thOS
who have circulation based on a depos
it of old bonds will be taxed, as at pres
ent, 1 per cent.
There are some other changes in tn
national banking act. The law permit
national banks with $4,000 capital t
be organized in places of 5000 inhab
itants or less, whereas heretofore tn
minimum capital has been $4,000 ]
| also permits banks to issue circulatiO
of all classes of bonds deposited up [
the par value of the bonds instead {
ninety per cent of their face, as hereto
fore. This ought to make an immediat
; increase in national bank circulation {
. something like $24 000. 600 as the amour
of bonds now deposited to secure Gil
culation is about $242 900, 900. If tn
price of the new twos is not forced s
. high in the market that there is n
profit left to national banks in takin