The Cape Girardeau Democrat. (Cape Girardeau, Mo.) 1876-1909, 1897-04-17
WHAT'GAGE SAID.
In 1891 Foretold the Treasury Pre-
dicament Of 1893.
his Often Quoted Address of d.
Importance of Credits-summary
of Defects of Our Cur
rency System.

The new secretary of the treasury,
Lyman j. Gage, is not a novice either
m the theory or practice of financial
affairs. Long before most bankers n
business mem were greatly concerned
about our national finances he saw dam
ger ahead and prophesied what would
and what did-happen, unless certain
changes were made in our unscientihc
and unsound financial system.
On February 10. 1891, Mr.. Gage reada
paper before the Sunsetclub m Chicago.
After explaining how silver and gold
none had been evolved "by the free
play of human choice. ending in n
sensus of action, and never by conven-
tional agreements made in advance, ne
discussed our own monetary conditions.
He pointed put how the United States,
by accepting both metals and by allow
ing its creditors to choose b kept
together the two metals, whose values
were divergiDg rapidly. To the ques-
ton: Cannot the government continue
this policy indefinitely IN thus lot
ever preserve a higher value to the sill
YER coin than its equivalent In silver
buIlion?" he replied that it could not.
The proportion of silver payments to
| the government" he said, will steadl-
ly increase until the treasury depart
ment will be obliged to either pay In
silver or buy gold in exchange for II.
With free coinage of silver" he added,
this result will be the sooner reached.
Nothing could be clearer or n
than this. 1t is precisely what hap
pened.
In the autumn of 1894 he took parth
an elaborate discussion of the money
question Mt the Commercial club OF CHI
caro-. 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-
card to currency reform. We quote be-
low the greater part of this address:
in speaking upon the subject of u
money system one must be aware that
in whatever he may say lie will excite
he 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
tine public mind has seemingly lost the
hover TO discriminate between real
things and the shadows or signs ot
things. 1t is necessary that disguises
be pulled aside and hat real facts APP
pear.
There is. in truth, only n real
mopay-viz.. metallic coin. IL 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 cor-
venientiy than money itself. Because OF
this confusion comes, and we are led
astray. Seeing that tire greenback is
uttered by the government; that it has,
by the legal tender quality impaired to
it. the power to pay debts. anG that
il c!rcula:cs with all the power ct
money. discrimination ceases-we call
II roEcy-and the idea that govern
rHelii can create money by its sanction
or fim becomes rooted in the mind. The
distinctions just pointed out are. how
ever. fundamental distinctions. They
should lie taught in the schools. They
are simple. easy to be understood even
by Il child.
I'VE admit that on many occasions
paper money. whether ~greerbacks,
treasury notes or 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
i credit 5&ll=Ce III 4 solvent sank.
For, to secure this better form of good,
;,eoplc voluntarily give to the banker
these promises to pay-yea, even gold
!1Self-for Il credit to an equal sum
upon his boots. With an entry upon
their Dassbook as evidence of the trans
action they claim to 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. It belongs to the banker:
it is 10 longer theirs.
The consideration they have re-
ceived is an agreement from the banker
70 meet their acquisitions upon him
from time to time. If the banker is
faithful to his obligations they have
made no bad bargains, for all these
th:ngs-gree@backs. treasury notes, nd
tionaI bank Eotes and. 10 S the pop
uiar language, money in bGnk-are in
their nature ard essence oHc-yiZ.. they
are forms of credit. Their value, each
ard I'll alike. !iPs ii the ability of the
owner tn voHYar: ti,cm at last into tine
u:iy real form or E-Gac: ROW existent
- metallic &C II. &ni to push tbs cues
tier Il little farther. the Only value of
III" T,et;liiic ccl2 lies. nni IA lie coin rs
Il rnla. bur in ;aae rodcr q! the metal
-, cIin contains 20 exchange for other
things.
Iii shuuId here Ike noted that while
or silver dollar is real money It's rowcr
to cxcbLr"e for other things - more
,haH doubled by another ard artificial!
,alua impaired TO It through tie H..
whIc!! gives L Fewer equal 10 the dol
lar IL geld u Jay customs Gues. Iiav-