The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1900-03-10
Opposing Both the Porto Rican Bill
and the Hay-Pauncefote Treaty
as Negotiated.
MR.. GAGE OUTLINES HIS PLAN
TELLS CABINET HOW HE WILL CAR.
RY OUT THE FINANCIAL LAW.
Will Refund Bonds with as Little Dis
turbance to Business as Possible
Dawes C0rrects Misstatement.

Special to the Indianapolis Journal.
WASHINGTON, March 9.-The Indiana
senator's and Republican representatives
continue to be deluged with letters and
kilograms in opposition to the Porto Rican
tariff bill besides many indicative Of deep
seated prejudice against the ratification of
the Hay-Pauncefote treaty in form which
admits the right of any foreign power to
a voice in the policy of this country In the
western hemisphere. They find nothing in
their mail or telegraphic correspondence
confirmatory Of the theory that the popular
excitement on account Of the contemplated
act of bad faith toward Porto Rico is dying
out or subsiding. This theory may be true
with regard to other parts of the country.
but it certainly does not fit the case In
Indiana so far as information reaching
here shows, a circumstance which is dis
turbing the administration members. The
refusal of several senators and representa-
tives who are "close to the White House"
TO accept the Davis amendment does not
tend to clear the situation.
At the Cabinet meeting to-day Sccre-
tary Of the Treasury Gage outlined his
finance bill which, it is expected, will
pass the House next Tuesday and be ap-
proved by the President soon thereafter.
The secretary explained that in all prob
ability from S5 to As per cent. of the out
standing bonds. which may be refunded
under the new law. will be presented for
exchange within a comparatively short
time. This would involve cash payments as
premiums to the holders of the old bonds
amounting to from $30,0e0,O00 to s35, 600, ,OOO
A question which has occupied the atten-
tion Of the secretary of late is whether this
amount should be taken from the funds
now in the treasury from the govern
ment deposits with depository banks, or
whether part should be taken from the
treasury and a part from the banks.
Attention was called to the fact that,
even If considerable sums were drawn from
the depository banks in these settlements.
it would only amount to a transfer from
one bank to another. or from the credit of
the government to the credit of the party
surrendering the bonds in the same bank
Therefore the total amount of money held
by the banks would not be materially
changed. In the determination of this ques-
tion much will depend on the rapidity with
| which the old bonds are presented for ex-
change, and also upon whether the ordi-
rary treasury receipts keep up to their
present mark.
The secretary's purpose, as stated to the
| Cabinet, is to create as little financial dis
| turbance as possible In the settlement of
| premium accounts. If the treasury re-
ceipts continue large and the applications
| for exchange of old bonds for new is not
| excessively heavy at the outset 1t is alto
| gether probable that a considerable share
| of the premiums will be taken from the
| treasury, but should there be a rush for
| the exchange of bonds 1t is quite likely
| the banks will be called upon to share in
| the payments. On the other hand, the
| secretary does not propose that the present
available cash balance in the treasury,
which now amounts to about $500, 900 900, in
cluding the s100.000,O00 gold reserve, shall
be largely encroached upon. The question,
therefore. whether the cash to be paid as
premiums shall come from the treasury,
the depository banks. or both, depends for
| its solution largely on conditions which
cannot now be foretold. The new bonds
will be dated April /, and the amount of
premium to be paid on the old bonds will
| be calculated from that date the rate in all
cases being the same, which, according to
the terms Of the new act, is such as shall
yield return Of 2A per cent. per annum.
These details were fully explained to the
Cabinet. and the plans and purposes of the
secretary met with general approval.
| Controller Dawes is overwhelmed with
assertions and inquiries touching the
| operation OF the currency bill about to be-
! come law. All sorts of notions are enter
tained by those who have undertaken to in
| terpret 1t, and recently the controllers at
tention was directed to a press report pub
| lished in several papers to this effect: IT is
estimated that any one with 5000 capital
can start a national bank under the new
system. All that is required is SIS, in z
per cent. government bonds. which could
be secured at ruling rates for about s26, $50
These representing the capital OF the bank
| could be sent TO Washington and circula-
tion for the full amount of the capital i'm
| mediately taken out. The organizer of the
bank then has only s2.750 tied up In the en-
terprise, but could take deposits in the reg
ular way.
THAT report has gained so much pub
licity," said Controller Dawes. that IL
seems TO me IL ought to be corrected as
soon as possible. The report is fallacious
The new law regarding circulation would
not make It easier to deceive the authori-
ties into allowing the bank to do business
with no capital. While IL is true that the
organizers of national bank can secure
in circulation the par OF the bonds de-
posted by them as security therefor. less
the per cent. redemption fund. IL this
currency was used to pay of the cost OF
the bonds 1t could not, OF course. be USED