The enterprise. [volume] (Wellington, Ohio) 188?-1899, 1897-04-07
WHAT GAGE SAID.
In 1891 Foretold the Treasury Pre-
dicament Of 1898.
Hts often Quoted Address of 1884,
importance of Credits-Summnry
of Defects of Our Cur
rency system.

The new secretary of the treasury |
Lyman j. Gage, is not a novice either
in the theory or practice of financial
affairs. Long before most bankers and
business men were greatly concerned
about our national finances he saw dan
ger ahead and prophesied what would
and what did-happen, unless certain
changes were made in our unscientitit
and unsound financial system.
On February 10, 1891, Mr.. Gage read Q
paper before the Sunset club in Chicago,
After explaining how silver and gold
money had been evolved "by the free
play of human choice, ending in con
sensus of action. and never by conven'
tonal agreements made in advance" he
discussed our own monetary conditions
He pointed out how the United States
by accepting both metals and by allow
ing it's creditors to choose either, kept
together the two metals, whose values
were diverging rapidly. To the ques'
ton: Cannot the government continue
this policy indefinitely and thus for
ever preserve higher value to the sill
yer coin than it's equivalent in silver
bullion?" he replied that it could not
'"The proportion of silver payments to
the government" he said, "will soeadi'
ly increase until the treasury depart
ment will be obliged to either pay in
silver or buy gold in exchange for it
With free coinage of silver" he added,
"this result will be the sooner reached"
Nothing could be clearer or sounder
than this. 1t is precisely what hap
.pened.
In the autumn of 1894 he took part in
an elaborate discussion of the money
question Mt the Commercial club of Chi
cago. His address at this meeting is
often referred to and is now of much in
terest, since it contains what he says
are still substantially his ideas in re.
gard to currency reform. We quote be-
low the greater part of this address:
"ln speaking upon the subject of our
money system one must be aware that
in whatever he may say he will excite
the hostile criticism and draw forth
bitter invective from some one or more
of the various factions who are seeking
to establish on new and experimental
foundations our much disturbed fnan
cial structure.
Through our 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 ap-
pear.
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 the
nature of things they can be nothing
more. They pass as money, perform
the functions of money, often more con-
veniently than money itself. Because OF
this confusion comes, and we are led
aStray Seeing that the greenback is
uttered by the government; 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
il money-and the idea that govern
ment can create money by its sanction
or fiat becomes rooted in the mind. The
distinctions just pointed out are, how
ever. fundamental distinctions. They
should be taught in the schools. They
are simple, easy to be understood even
by child.
I'VE admit that on many occasions
paper money, whether greenbacks,
treasury notes or national bank notes
is more 10 be desired than gold. Yet
more to be desired than either, as
proved by the daily conduct of men, is
a credit balance in a solvent bank
For, to secure this better form of good
people voluntarily give to the banker
these promises TO pay-yea, even gold
itself-for a credit to an equal sum
upon his books. With AN entry upon
their passbook as evidence of the trans.
action they claim 10 have money in
the bank" In popular language, the
claim is well 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.
1.-THE consideration they have re-
ceived is an agreement from the banker
to meet their requisitions upon him
from time to time. If the banker is
faithful to his obligations they have
made no bad bargains, for all these
tlings-greenbacks, treasury notes, ma
tional bank notes and, to use the pop
ular language. money in bank-are in
their nature and essence one-viz., they
are forms of credit. Their value, each
and all alike, lies in the ability of the
owner TO convert them at last into the
only real form of money now existent
metallic coin. And to push the ques'
ticn little farther, the only value OF
the metallic coin lies, not in the coin as
a coin. but in the power of the metal
the coin contains to exchange for other
things.
ut 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 dol
lar in gold to pay customs dues. Hav
ing an equal value in this direction, thu
quantity being limited, it has equa
value in all directions, but the difference