Jasper County Democrat, Volume 1, Number 35, Rensselaer, Jasper County, 10 December 1898 — MONEY OF THE NATION [ARTICLE]

MONEY OF THE NATION

ANNUAL REPORT OF SECRETARY GAGE. Chief of the Treasury Department Diacusaes the Need of Banking Reform and the Necessity of Meeting New Conditions. Secretary of the Treasury Gage has made public his report on the condition of the finances of the country and the work accomplished by his department during the year. It is an interesting document. Upon the subject of currency and banking reform he says: The arguments against government Issues of paper money as a medium for commercial exchanges have been fully made and need not be repeated in detail. The proposal to substitute bank Issues for government notes is opposed with many honest prejudices and assailed denunciations. The first arise from a failure to comprehend the true philosophy of a paper currency and must be patiently considered. The latter obscure the question by reckless statements, charging that ail propositions for currency reform ar* bank conspiracies. If it be conceded that the legal-tender money issued by government does not possess the qualifications to make It a proper factor In the country's exchanges of products and manufactures, if the fact also be admitted that it l ls a deranging and disturbing factor In its relation to Industry and commerce, then the time has come to substitute for it a currency which will adequately, economically and safely meet with the ever-growing needs of the country, rapidly developing, as it is, in the power of production, in the number of its people and the importance of its domestic and foreign trade.

In answer to the question whether a bank note currency can be established which will be economical, adequate and safe and serve the public needs in a better way than is now served, the Secretary points to the system in force in Canada. The facts set forth by the Comptroller relate exclusively to the proposition that the notes of a failed bank shall be a paramount lien upon the assets for their full value before any rights accrue to other creditors. Tlie issue of notes upon the general assets es national banks may be made perfectly secure without the requirement that the notes be a first lien upon their assets. It would only be necessary to award to the noteholder t lie same ratable proportion of the assets which went to other creditors, atid to provide that the amount required to pay the difference be obtained by an assessment upon all the national banks, collected ratably in proportion to their share in tlie circulation of this character. The vital question is. What percentage of assessment upon this circulation would be required in order to cover tlie losses to noteholders In the case of failed hanks? The experience of the national banking system demonstrates that the assessment would be insignificant. The total circulation of failed banks outstanding at the time of failure up to Oct. 31, 189”, was $20,893.82”.' The loss upon these notes, if tlie security for them had been Impaired in the same degree as the security for other liabilities, would have been $5,379,165, or an annual average of about $163,000. This loss would have been made good by a tax of about one-twelfth of 1 per cent, per year upon the circulation of the solvent banks. A tax of one-fifth of 1 per cent, upon the average circulation of the national banks since the foundation of the system would have paid such losses up to Oct. 31, 189”, stud left a surplus of about $9,000,000 In the guaranty fund. Urges Former Measures. In my last report I ventured upon specific recommendations. These recommendations, if adopted and formulated intd law, would in my opinion bo curative of the evils herein pointed out. In house bills Nos. 10,289 and 10,333 are embodied a series of measures in some respects more meritorious. The measures herein proposed are the result of careful study by expert and experienced men. With some modifications—the reasonable fruit of full discussion—they would, I believe. meet the country's needs. I commend the subject to the early and earnest attention of Congress. On the point of fractional silver the report contains this paragraph: Tlie amount of fractional silver coin held by the treasury July 1. 1897, was $16,201,960; July 1, 1898, $12,070,690. This stock has at present, Nov. 18. been reduced to $7,122.506, much of which is so worn as to be unfit for circulation. Tlie amount available, distributed among the several sub-treasuries, gives but small stock to each, and some denominations are exhausted. The Secretary of the Treasury should tie authorized to recoin this uneurrent stock and any such coin which may hereafter accumulate In the treasury, the difference between its face value and the new coin it will make to be paid out of any moneys in the treasury not otherwise appropriated. Further provision should be made to add to the stock of fractional coin, and to that end it Is suggested that the Secretary of the Treasury be authorized to use any silver bullion now in the treasury for the coinage of such denominations as may be required from time to time to meet the demand from the different sections of the country. With an ever-increas-ing population, which will be added to in the near future by the acquisition of additional territory, the demand for fractional silver coin will be such as to make it essentially necessary that the stock should be increased. It is suggested that, at the proper time, action be taken by Congress to assimilate the currency of Porto Rico to that of the United States, so far and so rapidly as this can be done without unduly disturbing existing conditions and contract relations in Porto Rico. This, it is believed, can be accomplished by making customs dues in the island payable in American money, yet receiving the silver pesos and centavos at a fixed relation to our dollar. The revenues of the Government from all sources for the fiscal year ended June 30, 1898, were $494,333,953.75, while the expenditures for the same period wete $532,381,201.35, showing a deficit of $38,047,247.60. As compared with the fiscal year of 1897. the receipts for 1898 increased $63,946,785.86. There was an increase of $77,594,423.23 in the ordinary expenditures. The revenues for the current fiscal year are estimated at $577,874,647.37, while the expenditures for the same period are $689,874,647.37, leaving a deficit of $112,000,000. For the fiscal year 1900 the revenues are estimated at $610,958,112 and the estimates of appropriations for the same period aggregate, exclusive of sinking fund, $641,006,490.64, or an estimated deficit of $30,048,387.64. “The first proceeds of the popular loan of $200,000,000.” the report reads, “were received June 14, and from that date forward the inflow of money from this source has been rapid and constant. The total amount received up to Nov. 1 was $195,444,187.62.”

Mint Receipts and Deposits. Tbe receipts and deposits of bullion at mints and assay offices, including redeposits, aggregated $215J566,261.54, of which $198,740,492.23 was gold and $16,825,769.31 silver. The deposits of gold Were greater than in any previous year of our history. Foreign coins to the amount bt $47,210,078 were deposited during the year. It was recommended that an appropriation of $50,000,90 made for the erection of a building for the assay office at Seattle. Posterity—Our'Qlstant relations.