The sun. [volume] (New York [N.Y.]) 1833-1916, 1901-10-17
GAGE ON CURRENCY REFORM.
THE SECRETARY AGAINST LOCk-
ING Up A BIC SURPLUS.

Ea,er GRADUAL Retirement Of Legal Ten
der. Modincation of the bank Note
system and the Reduction Of the
Public Dcbt-Address TO the Banker.
MILWAUKEE. Oct. ie-Secrctary Lyman
J Cages address before tho convention
Of the American Bankers Association was
the feature Of to-dsy's session. Mr.. Gage
was accompanied by az Comptroller Eckels.
who win speak tomorrow. Mr.. Gage spoke
on his ideas as to financial changes. He
aaid:
Taking the last thirty years. what sum.
on thu average. In excees OF an ample work
ing balance has the Treasury kept under
uss In the feids Of industry and er-
erase atty millions Of dollars. IL
thee surplus millions had been deposited
with national banks In the Clearing House
cities IN the proportion tho relative capital
OF each bank bears 70 the whole capital
and n. secondly, the only security 10 ths
Government had been. In case OF bank
failures, a prior len on such banks assets.
not a dollar Of loss would the Treasury
.NeIt, II under these conditions the
hanks hAd paid interest To the Government
at tbs rate Of ? per centum upon the funds
90 deposited. how much would the Treasury
have been beneftedl Answor: Thirty-two
millions OF dollars. With this fund as an
aid to their general operations In the held
OF trads and commerce. TO what extent, on
tbe average, would the banks have been
able TO increase credit accommodations TO
ths peoplei Answer: Two hundred millions
Of dollars. Have we not been guilty OF an
enormous economic waste by reason OF
our peculiar Treasury SYSTEM
s1oould pursue into detail the faults with
which our financial system may be Justly
charged. But the matter has been pre-
sented over and over until the theme
In badly worn. Permit me. however. To
summartze into several brief propositions
An expression OF my own financial con-
victions.
sFirpt: I believe 1, to he most desirable
that the demand liabilities OF the Govern
ment known as legal-tender notes should
be put In the way OF retirement and can
collation..
SECOND; / believe that this can be 40
cornplished without any burden OF in
forest cost 20 the public treasury.
Third: ! believe that our system OF
bank note circulation can be and ought
10 be 10 modified a. 20 make IL more re-
sponsive to commercial and industrial
requirements, without any increase OF
risk TO the bill holder.
Fourth: believe that beyond acting
o. a guardian and a trustee for the people
In relation TO national banks. the Govern
ment's guaranty to bank note ISSUES should
sFfh: believe tha the public moneys
In excess OF a reasonable working balance
for daily use should be deposited In Ma
tional banks. That a simple and safe system
OF distribution Of funds can be devised l
have no doubt.
sixth: | believe that In periods OF ma
tional peace and prosperity the public
revenue should he somewhat In excess
OF public expenditure, and that the sur
plus revenue should he applied TO the re-
duction of the public debt.
Il want to close my talk by presenting
come facts in comparison which will at least
illustrate the strong and satisfactory con
dition Of tho national finances Will"
British oonsols drawing ~ per cent. per
annum are quoted at %, German I'm
perisl , per cent. bonds at Sb. Russian ~
At i0a, and French ~ at i02. United States
2 per cent. bonds are quoted at i07. and
United States 4 per cent. bonds Of 1928.
at 49,.
parison 80 favorable to us II / particularise
q little. ON April I. 1898. the interest hear
ing public debt stood at ts47 $50 $50. De-
Quoting from this the cash then on hand In
the Treasury amounting To s27o, ie8 zee.
leaves Ss2i 100 100. Incidental TO the war
with Spain. bonds were issued to nearly
two hundred millions. 60 that on Nov l.
1880, the interest bearing debt had risen
% 81 .0Ss. 04s 900. or deducting cash in the
I se; smSun,ins a. to s,ss as ;se -, ~" :, the the
crease Of siSS ,tS7, ia. between April l. ises,
and Nov 1, 1888.
ION Aug /. 1901, the interest bearing
debt stood at sasS. 40 .ooo, le-- cash in the
Treasury. ta27 .3es. ST.; making debt. less
cash, sass .i07 .is1. a reduction OF Gas $50. 2p7;
or having now no regard for the increased
cash In the Treasury. we find that the face
amount Of tho interest hearing debt. which
stood on Nov. /, 1890. at 81 .O+6. 0$a. go.
now stands Aug u at sass .t7o. 0oo. a re-
dnction OF . .572,e $40.
but this IL only a partial statement
Concurrently with this reduction Of the
face Of the debt, there has becn q reduc-
ton almost equally great In the amount ~
interest which then burdened the future.
OF tho moneys coming into the Treasury
during the short period under review.
sts $50 .ooS has hern used to settle and dis
charge interest which would otherwise
have been a charge upon the Treasury
during the next four 10 eight years. BY
the use Of something more than forty
three millions. interest 10 tho amount 81
So .4s .&2t vas settled difference OF
nearly eleven millions bcing a nominal
profit 10 the Treasury ,
President A. u Stickney ~ the Chicago
Great Western road rad a paper m The
Medium ~ Exchange and Banking Func-
tions During the morning session resolu-
tons were passed demanding action from
for the suppression Of anarchy
and calling for n change 81 contract with
the express companies, 80 that when I'M
signed Treasury notes are lo~t the com
panies and not the hanks shall lose the
money " the losses occur during the time
that the notes are IN the company's charge.
The 18th annual session Of the 'Trus,
81 the Pankers' Association wac I
tho best attended In the history Of this I
Nearly one hundrsd members ,
were present this morning when the meet ,
Ing was called To order by William O.. :
of Cleveland. james X Branch. |
Secretary Of tho Trust Department. made
his annual report. II" said that there had +,
been a marked increase IN the number
Of Members and that financially the as-o-
vas in good condition. Charles {
Francis Philips 81 New York dwelt upon .
: The Business in Foreign Countries Anhla- .
gous To That 81 Trust Companies In IN. :
United States The election resulted ]
President. J : Williams. Richmond. Iowa: .
vice-Prrsident. J =. Borne. New York; !
Trustee. y A Potter. Chicago; = J. Wade. .
Louis l. L Stanton. New YORK !