Hot Springs weekly star. (Hot Springs, S.D.) 1892-1917, 1897-04-09
WHAT GAGE SAID.
PRoPHEsIEp IN 1879, THE PReplcA-
MENT OF OUR TREASURY DE-
PARTMENT IN 1893.

OF the Secretary of the Treasury--Im.
portance of Credits-Rcal Money Versus
Promises to Pay-Makeshift Legislation
Summary OF Defects of Our Currency
System.
The new secretary of the treasury,
Lyman j. Gage, is not u novice either
i'll the theory or practice of financial
affairs. Long before most bankers and
business men We're greatly concerned
about our national finances he saw dam
ger ahead and prophcsicd what would
and what d%id-happen, unless certain
changes We're made i'll our unscientifc
and unsound financial system.
On Feb. 10, 1891, Mr.. Gage read a
paper before the Sunset club i'll Chicago.
After explaining how silver and gold
money had been evolved "by the free play
of human choice, ending i'll consensus of
action, and never by conventional agree.
ments made i'll advance" he discussed
IL monetary conditions. He point
ed out how the United States, by ac-
ccpting both metals and by allowing its
creditors to choose either, kept together
the two metals. whose values were di-
versing rapidly. To the question, Cam
not the government continue this policy
indefinitely and thus''forever preserve Il
higher value to the silver coin than its
equivalent in silver bullion?'' he replied
that it could rot 1.-The proportion of
silver payments to the government, - he
said, will steadily increase until the
treasury department will be Obliged to
either pay in silver or buy gold in ex-
change for it. With free coinage of sill
YER, he added, .'tlis result will be the
sooner reached" Nothing could be
clearer or soulder than this. 1t is pre-
ciscly what happened.
In the autumn of 1894 he took part in
an elaborate discussion of the money
question ut tho Commercial club of Chi
caeo. His address mt this meeting is
often referred to and is now of much in
%terest, since it contains>wh he says
are still substantially his ideas in regard
to currency reform. We quote below the
greater part of this address:
"ln speaking upon the subject of our
money system ono must be aware that i'll
whatever he may say he will excite the
hostile criticism and draw forth bitter
lnyectivc from some one or more of the
various factions who are seeking to es-
tablish OH new md experimental foun-
dations IL much disturbed financial
structure.
Through orr heterogeneous system
the public mind has seemingly lost the
power to discriminate between real
things and the shadows or signs Of
things. 1t is necessary that disguises be
pulled aside and that real facts appear.
There is, in truth, only one real
money-viz, metallic coin. 1t may be
composed of gold or silver. 1t might be
OF something else, but it is not. Green
backs, treasury notes and national bank
notes are but promises to pay. In tho
nature of things they can be nothing
more. They pass as money, perform the
functions OF money, often more conve
lently than money itself. Because of this
confusion comes, and we are led astruy.
Seeing that the greenback is uttered by
the governments; that it has, by the legal
tender quality impaired to it, the power
to pay debts, and that it circulates With
all the power of money, discrimination
ceases-we call it money-and the idea
thai government can create money by
its sanction Or fiat becomes rooted i'll
the mind. The distinctions just pointed
out are, however, fundamental d%isti1c-
lions. They should be taught i'll the
schools. They are simple, easy to lie un-
dcrstood ven by Il child.
1--WE admit that on many occasions
paper money, whether grecnbacks, treas
ury notes o. national bank notes, is
more to be desired than gold. Yet more
to be desired than either, as proved by
the daily conduct of men, is IL credit
balance in u solvent bank. For, to secure
this better form of good, people volun-
tarily give to the banker these promises
to pay-yea, even gold itself-for Il
credit to an equal sum upon his books.
With an entry upon their passbook as
evidence of the transaction they claim
to have ''money i'll the bank" In popu-
lar language. the claim is we'll enough,
but, correctly speaking, it is positively
untrue. They have parted with their
money, if money they had. 1t belongs
to the banker; it is no longer theirs.
SOl4s4NAS1i tUlOu lIltN llGNC IeCSlNeu
is an agreement from the banker to
meet their acquisitions upon him from
time to time. If the banker is faithful
to his obligations they have made no
bad bargain, for all these things-green-
backs. treasury notes, national bank
notes and, to use the popular language,
money i'll bank-are iii their nature and
essence one-viz, they are ferns of
credit. Their value, each and all alike,
lies i'll the ability OF the owner to con-
vert them ut last into the only real form
of money now existent-metallic coin.
And to push the question a little far
ther, the only value of the metallic coin
lies. not i'll the coin as IL coin, but III
the power of the metalth the coin contains
to exchange for other things.
"It should here be noted that while
our silver dollar is real money its power
to exchange for other things is more
than doubled by another and artificial
value impaired to it through the law,
which gives it power equal to the dollar