Abilene weekly reflector. [volume] (Abilene, Kan.) 1888-1935, 1897-04-15
WHAT GAGE SAID.
In 1891 Foretold the Treasury Pre-.
dicament OF 1893.
His often Quoted Address Of 1SO4-
importance Of Credits-Sum mary
Of Defects Of Our Cur
rency system.

The new secretary Of the treasury
Lyman }. Gage, is not NOVICE eithel
in the theory or practice OF financa
affairs. Long before most bankers ant
business men were greatly concerned
about our national finances he saw dan
ger ahead and prophesied what would
and what dld-happen, unless certain
changes were made in our unscentlfc
and unsound financial system.
On February 10. 1891, Mr.. Gage read a
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.
tionaI 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 its creditors to choose either, kept
together the two metals. whose values
were dverging 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 its equivalent in silver
bullion?" he replied that it could not.
THE proportion of silver payments to
the government" he said, will steadi-
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 ut the Commercial club of Chi
cago. His address at this meeting is
often referred to and is now of much in
terest, since IL contains what he says
ire still substantially. his ideas in re-
gard to currency reform. We quote be-
low the greater part of this address:
I'm 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 finan-
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 DISCUSSES
be pulled aside and that real facts ap-
pear.
There is, in truth, only ont real
mouey-viz., metallic coin. 1t may be
composed Of gold or silver. It 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
astay. Seeing that the greenback is
uttered by the government; that ithas,
by the legal tender quality impaired to
It, the power to pay debts, and that
II circulates with all the power Of
money, discrimination ceases-we call
It 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
Ire simple, easy to be understood even
)y a child.
I'VE admit that on many occasions
paper money, whether greenbacks
reasury notes or national bank notes,
S more TO he desired than gold. Yet
more to be desired than either, as
proved by the daily conduct of men, is
| credit balance in solvent bank.
For, to secure this better form of good,
'eople voluntarily give to the banker
hese promises to pay-yea, even gold
tself--for credit to an equal sum
lpon his books With am entry upon
heir passbook as evidence of the trans
Iction they claim to have money in
ne bank In popular language, the .
lain is well enough, but correctly =,
peaking, it is positively untrue. They
ave parted with their money, money
hey had. 1t belongs to the banker;
is no longer theirs.
"rhe consideration they have re- !,
eived is an agreement from the banker ;,
@ meet their acquisitions upon him ! =
rom time to time. If the banker is :,
aithful to his obligations they have =
lade no bad bargains, for all these a
Undergraduates, treasury notes, ma =
ional bank notes and, to use the pop ;,
lar language, money in bank-are in q
heir nature and essence one-viz., they +,
ne forms of credit. Their value each
nd all alike lies in the ability of the :,
wner to convert them at last into the r.
My real form Of money now existent Il
metallic coin. And to push the ques- ri
ion little farther, the only value OF Ii
he metallic coin lies, not in the coin as 4
coin, but in the power of the metal b
no coin contains to exchange for other a,