« 이전계속 »
Not a single person has appeared before our coinmittee who did not condemn the principle on which the Hill-Fowler bill (H. R. 10289) is drawn, and who did not approve the principle upon which the Walker bill (H. R. 10333) is drawn. This is so patent, when dissevered from commendation or condemnation of any particular bill, and therefore given without prejudice, that I append the following extracts from the testimony given before our committee and published in the "Hearings:”
NO GOLD PAID INTO THE TREASURY.
The OHAIRMAN. What percentage of the present income of the Treasury is paid in gold?
Secretary GAGE. Perhaps one-half of one per cent; something like that. It is so small that I have not looked into the matter.
The CHAIRMAN. It cuts no figure?
CHANGES IN THE LAW SHOULD BE FEW AS POSSIBLE.
Mr. WALKER. Should not the changes proposed, while being thorough, make banking as free and allow currency notes to be issued to the people as freely and at the lowest possible cost that is consistent with its sure current redemption in specie and the sure and immediate payment of these currency notes in case of insolvency?
Mr. FAIRCHILD. That is my idea.
Mr. WALKER. The changes should allow those sections of the country where interest is highest to make the same relative profit on the currency issued in those sections as is made in the lower-interest localities, should it not?
Mr. FAIRCHILD. I should think so, most decidedly.
UNWISE TO ATTEMPT BY MANDATE OF LAW TO UNDERTAKE TO COM.
PEL BANKS TO REDEEM IN GOLD.
Mr. STALLINGS. Does your bill provide that the national banks shall redeem their notes in gold?
Secretary GAGE. It does not.
Secretary GAGE. After consideration I think it is indifferent whether it does or not. The reason I did not put it in was that I do not believe the Government, as an issuer of notes, ought to recognize any money on earth as better than its obligations, or discriminate against
itself or its obligations. If they say that greenbacks or any of the Government's obligations are not good enough for something, but gold is, they thereby cast a reflection upon their own notes. Besides, I think it would be purely immaterial. If you make the banks redeem in gold, then the banks must get the gold to redeem with. If they have the obligations of the Government, you may make it necessary for them to present the notes to the Government with which to get the gold to redeem their notes,
and therefore it does seem to me expedient from all points of view, practically and theoretically, not to put that in the law. The banks, if they find difficulty in maintaining other forms of legal money that will discharge debts, will have to carry gold. They have now in their possession in the country some $240,000,000 of that kind of metal, which is a pretty fair supply to start with.
Mr. HILL. * * Do you believe that it would be a wise course to pursue to make all bank redemption specifically in gold coin, eliminating the other legal tender of the country-silver and the lawful money, silver certificates ?
Mr. FOWLER. Limit it to the notes, of course, and not the deposits.
Mr. FAIRCHILD. My idea in all this was that the Government should not in its laws discriminate against any of the money which it had in circulation, because the tendency of so doing was to drive it into the Treasury.
Mr. HILL. But that redemption should be in lawful money?
GOLD REDEMPTION BY GOVERNMENT OF ALL PAPER MONEY
TREASURY REDEMPTION IN GOLD.
Mr. BROSIUS. Now, how can we redeem the pledge we are under by existing law to maintain the parity of our money unless we afford some means for the people who hold paper to present those obligations for redemption in gold !
Secretary GAGE. We can not. I understand we have such a process now.
Mr. BROSIUS. If we take $200,000,000 of the $346,000,000 out of circulation and hold it in the Treasury, that can not be presented !
Secretary GAGE. No, sir.
Mr. BROSIUS. What kind of demand obligations will the people have to present to the Treasury to get their gold?
Secretary GAGE. They will have $146,000,000 of greenbacks. They will have $100,000,000 or more of Treasury notes, and they will have $450,000,000 of national-bank notes. They could not present them to the Treasury, but they can present them to those who promise to pay.
PARITY TO BE MAINTAINED.
Mr. BROSIUS. I know that; but the Government has undertaken to maintain the parity of all our money. Secretary GAGE. Yes, sir.
The ability of the Government of the United States to inaintain the parity between the different forms of its money outstanding depends upon its ability to control gold. So far as it can reduce the obligations that are outstanding, so far it increases its strength to take care of those that are out..
Mr. BROSIUS. Then the duty that we have undertaken, to maintain
the parity of gold and silver and all our money, requires that the people are afforded some means of getting gold with the other money?
Secretary GAGE. The means are open, as I look at it.
Mr. BROSIUS. Are there any means left after the demand obligations of the Government are taken out of circulation?
Secretary GAGE. Yes, sir; there would be if they were all out.
Secretary GAGE. The way would be for people to present their obligations to the national banks.
UNDER GAGE BILL THE BANKS WOULD REDEEM THEIR NOTES IN
Mr. BROSIUS. The Gage bill does not make it their duty.
Mr. BROSIUS. To redeem in gold. * * They would comply with the law if they redeemed in silver.
Secretary GAGE. They would. Now you have struck the point. You think that when the Government demand obligations are out it will have no function in maintaining a parity. It will have about all the function it wants to perform in keeping $560,000,000 in silver money of the United States, and keeping that on a parity.
Mr. BROSIUS. How?
GOVERNMENT WOULD EXCHANGE GOLD FOR SILVER AND FOR BANK
Secretary GAGE. By exchanging gold for it.
Mr. BROSIUS. A gold reserve would have to be provided for that purpose
Secretary GAGE. I think so.
Mr. BROSIUS. Yes. Then, all the paper obligations being issued by the banks, the redemption of that would be left entirely to the banks ?
Secretary GAGE. I think so.
Mr. BROSIUS. And then, if the banks refused to redeem in gold, or were unable to redeem in gold, the whole system would collapse, and we would go to a silver basis?
Secretary GAGE. I can not quite follow you. I thought you asserted a minute ago
The CHAIRMAN. I think I can put a question right there that will perhaps clear this. The object of retiring this $200,000,000 is to put it out of the power of anyone to use the $200,000,000 to ask for gold redemption.
Secretary GAGE. That is correct.
The CHAIRMAN. It leaves out in circulation all the silver certificates and the Treasury notes. Now, what Mr. Brosius wants to get at is, how the Government gets gold if it proposes to redeem all those Treasury notes and certificates in gold.
Secretary GAGE. Well, that is another question. It makes little difference how they do it. I provide how they can do it a great deal easier than now.
The CHAIRMAN. How?
Mr. PRINCE. How many million dollars will the bank circulation reach at the same time?
Secretary GAGE. I think it will be something like $500,000,000.
Mr. PRINCE. That, added to the $730,000,000, makes $1,230,000,000. So, if the banks have to redeem the gold, there are demand notes and in circulation, either against the Government or the banks, for which gold can be demanded, to the extent of $1,230,000,000?
Secretary GAGE. Yes, sir.
GOVERNMENT TO REDEEM $1,230,000,000 PAPER MONEY.
Mr. PRINCE. Now, you say that if the banks can not meet this and it is thrown back on the Government the Government will take possession of the banks, their assets, and property, and, to do its duty, it would redeem this $1,230,000,000 in gold?
Secretary GAGE. Yes, sir; until they wound up business.
GAGE BILL DRAINS THE TREASURY OF GOLD.
Mr. HILL. How have you released the Government of any liability of redemption in that exchange of the $200,000,000? It seems to me you have made it still more easy to drain the Treasury of gold. Forinstance, if a company of men wish to get $200,000,000 of gold from the Government, instead of getting gold for greenbacks, why wouldn't they take bank notes and redeem them in lawful money, and then call for the gold with their lawful money?
Secretary GAGE. In the first place, they would have to get the lawful money. They have to find that lawful money. As fast as these notes are presented for redemption, the difficulty of finding the lawful money will increase. They must provide the lawful money. If they do find it, there is no way for the Government to escape payment of its lawful obligations.
Mr. HILL. They will get notes or silver, will they not?
Secretary GAGE. Yes, sir; and if the bank can not provide legaltender notes, Treasury notes, or silver, it will have to provide gold. It will provide that which is easiest, of course, as anybody else will do. But I contemplate that under my bill I will diminish the lawful money $200,000,000. I will make it relatively scarcer than it is now.
Mr. Cox. When the bank_note follows its process along until it reaches its redemption in the Treasury of the United States, does your bill prqpose to redeem that bank note in gold or other money at the option of the holder of that note?
Secretary Gage. In the case you suppose, the note is redeemed at the (bank) counter.
Mr. Cox, No; they refused to redeem it.
Secretary GAGE. You supposed he redeemed it in a greenback, and he took the greenback and went to the Government.
Mr. Cox. He takes the note, or a bundle of notes, to the bank, and the bank refuses to redeem them in gold. He still holds those notes. Now, under your bill, is not the process incorporated into this, that a man can have those bank bills redeemed by the Government?
Secretary GAGE. Yes; he could send to the Government and get those notes redeemed.
Mr. Cox. I so understood it all the way through. Now, he could take the bank notes, the bank refusing to redeem them in gold, to the Government-take the same notes to the Government-and the Goy. ernment would be bound to redeem them in gold if he demanded it?
Secretary GAGE. It would be bound to redeem them in greenbacks or gold; yes. He could take the greenbacks and turn around and draw the gold, so it would be practically a redemption in gold.
Mr. Cox. In other words, he could take the notes of the bank and go to the Treasury of the United States and the Government, under this bill, would be obliged to redeem those notes in gold?
Secretary GAGE. Substantially, yes.
But, mind you, the Government is not redeeming those notes on its own account. The Government is redeeming them on account of the bank.
Mr. Cox. I understand that.
Secretary GAGE. Then the bank would have to account to the Gov. ernment and reimburse it.
GOVERNMENT HAS NO CLAIM FOR GOLD ON THE BANKS.
Mr. Cox. Certainly, and I take it that the Government would demand reimbursement in the same kind of money the Government had redeemed the notes in
Secretary GAGE. No, sir. If the bank had satisfied its legal liability to the Government and recouped the Government with any form of money that the Government recognized-greenbacks, Treasury notes, gold, or silver-that, I think, would be sufficient.
Mr. Cox. Then the Government, in the first step of redemption, redeemed the kind of notes I have spoken of in gold, and its obligation is such that you think it necessary, to maintain the parity, to redeem them in gold if the holder desires gold; but when the bank, which has got from the Government the benefit of banking, comes to pay the Government the bank can pay the Government off in any kind of money!
Secretary GAGE. Whose fault is that? That is the situation the Government is in, and going deeper does not get it out.
Mr. JOHNSON. What law is there to require the Government of the United States to redeem national-bank notes in gold?
Secretary GAGE. There is no law; but we have to redeem them in lawful money. We have to redeem them in something, and if it were so that a holder of these notes could go to another window and secure gold, it would be substantially as Mr. Cox says.
GOVERNMENT GETS THE POOREST MONEY.
Mr. FOWLER. Under your plan, as I understand it, the banks of the country could deposit your reserve fund in either greenbacks, Treasury notes, or silver certificates, could they not?
Secretary GAGE. Yes, sir.
Mr. FOWLER. Would there not be, under the pressure now felt in this country, a tendency on their part to get rid of the poorest of those three kinds of money and instinctively deposit silver certificates. Would not that be the tendency?
Secretary GAGE. That would be the tendency unless their faith in those notes is strengthened.
B & C-13