The Lambertville record. [volume] (Lambertville, N.J.) 1872-1968, 1897-03-31
WHAT GAGE SAID.
PROGRESSED IN 1891 THE PReDlCA-
MENT OF OUR TREASURY De
PARTMENT IN 1898

y ,
Lyman J. Gage, Is net II novice either
III the theory or practice of financial
affairs Long before most bankers and
business men Were greatly concerned
ger ahead and prophesicd what would
and what did--happen, unless certain
| changes were made i'll cur unscicntiilc
and unsound financial system.
en- Feb 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 consensus Of
action, and never by conventional agree.
ments made in advance, he discussed
our own monetary conditions. He point
ed out how the United States, by &C
cepting both metals and 10y allowing its
creditors to choose either, kept together
the two metals, whose values were di-
Verging rapidly. To the question, Can
net the government continue this policy
indefinitely and thus forever preserve IA
higher value to the silver coin than its
equivalent i'll silver hullionY' he replied
that it could not. 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, this result will be the
sooner reached E." Nothing could be
clearer or sounder than this. 1t is pre-
eisely what happened.
In the autumn of 1894 he took part i'll
an elaborate discussion of the money
question at the Commercial club of Chi
cage His address Mt this meeting is
often referred TO and is now of much in
terest, since it contains what he says
are still substantially his ideas III regard
to currency reform. We quote below the
greater part of this address:
In speaking upon tho subject of our
money system one must be aware that i'll
whatever he may say no will excite the
hostile criticism and draw forth bitter
| inyective from some one or more of tho
various factions who are seeking to es
tabliSh on now and experimental foun-
| dations our much disturbed financial
! 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 appear.
There is, i'll truth, only one renl
money-viz, metallic coin. 1t may he
composed of gold or silver 1t might he
of something else, but it is not Green
| backs, treasury notes and national bank
notes arc hut promises to pay. In tho
nature of things they can be nothing
moro They pass rs money, perform the
functions of money, often moro conveu-
iently than money itself Because of this
confusion comes, and WE are led astray.
Seeing that the grecnhack is uttered by
the government; that ii has by the legal
tender quality impaired to it, the power
to pay debts. and that it cireulates with
all the power of money, discrimination
coascs-we call it money-and the idea
that government can create money by
its sanction or fiat becomes rooted i'll
the mind. The distinctions just pointed
out are, however, fundamental distinc-
tions. They should be Taught in the
schools. They are simple, easy to be M
dorstood even by child.
1--WE admit that ON many occasions
paper money, whether greonbacks, treas
ury notes or national bank notes, is
moro to he desired than gold Yet more
To he desired than either. as proved by
the daily conduct Of men, is Il credit
balance i'll solvent bank. For, to secure
this better form of good, people voluu-
tarily give TO the banker these promises
TO pay-yea, even gold itself--for n
credit TO an equal sum upon his books
With an entry upon their passbook rs
| evidence of the transaction they claim
to have money i'll the bank. " In popu-
lar language, the claim is well enough,
hut. correctly speaking, it is positively
untrue They have parted with their
money, il money they had Ii belongs
to the banker; it is no longer theirs.
The consideration they have received
is an agreement from the banker &c
meet their acquisitions upon him from
time To time. If the banker is faithful
TO his obligations they have made nc
bad bargain. for all these things-green.
backs, treasury notes. national bank
notes and, to use the popular language,
money i'll hank--are in their nature and
essence one-Viz, they are forms OF
credit Their value, each and all alike,
lies i'll the ability of the owner to con-
vert them at last into the only real form
! of money now cXistent-metallic coin.
And to push the question little far
thor. the only value of the metallic coin
lies, not in the coin as Il coin, but i'll
the power Of the metal the coin contains
TO exchange for other things.
at 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
in gold to pay customs dues. Having
an equal value in this direction, the
! quantity being limited. it has equal
value in all directions, but the difference
between the metallic value of the silver
dollar and this arbitrary value lies in
the realm of credit What have SO fan
said lies at the foundation of the subject
and must be first understood.
I'VE have now current in the United
States available in the purchase and salc
of commodities and for the payment Of
labor services the following agencies;