Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1898-12-07
pREsTprNr AND CURRENCY.

amply justifies the immediate enactment
OF the legislation ne recommended one
year ago. under which portion OF tie
gold holdings should be placed In a trust
fund from which greenbacks should be
redeemed upon presentation, but when
once redeemed should not thereafter be
paid out except for gold. 1t Is not to lie
inferred, however. he adds, that other
legislation relating to our currency Is not
required. on the contrary, there Is an
obvious demand for II.
This means that the President Is now,
as he was n year ago. In sympathy with
the general financial theories and plan
OF banking and currency reform of Secre-
tary-of-the-Treasury Gage. Just here II
Is not necessary 10 go into the details
of the Gage plan, except In so far as 1t
provides for retiring government notes.
This provision is embraced In the first
section of bill which at the last ses-
sion of Congress was formulated upon
Mr.. Cages recommendations, and sum-
mary Of that section is as follows:
ut establishes in the Treasury Depart
vision of issue and redemption. To this
division is to be transferred fund Of
$l25, 100000 in gold coin and bullion, and
silver dollars and bullion, equal to the
outstanding silver certificates and Urea
sury notes of 1890. The division is to have
charge of all business relating to the
issue, redemption, and exchange of all
forms of United States money, notes,
and coin. The Secretary Is also autho-
rized TO make any exchanges that he
may deem best between the funds In the
redemption division and the general
funds of the Treasury. When Treasury
notes and silver certificates are redeem
ed. they are to be held as part of the
redemption fund.- and arc only TO be dis
bursed upon the receipt of an equivalent
amount of the coin in which the notes
were redeemed.
In view, however, of the Presidents re-
endorsement Of Mr.. Gage, an insight into
the latter's ideas as TO the working OF
his system may not prove embarrassing,
and this we get from his annual report:
1.-THE argument against government ISSUES
of paper money as a medium Tor
commercial exchanges" says Mr.. Gage,
"has been fully made and need not be
repeated in detail. It's rigidity, its fail
ure TO meet demands where demand is
most urgent, the dependency of the whole
Industrial structure upon the state Of the
revenue and public expenditure-these are
important links in that chain of argu-
ment." Mr. Gage then goes on TO say
that he shall not go outside Of his duty
If he ventures to point out the advantages
TO the poorer districts of the country Of
a properly banking cur
rency," and after describing the course
Of the financial movement in the United
States, as it now goes on, its frequent
forcing of crops out of the hands Of the
producer, because of his inability to Dor
row from his local banker, its tendency to
congest the currency in the financial
centres, etc, he says:
whoever has followed this delineation
of our financial movement, and those
who are familiar with the facts which
are thus portrayed ought not to have
trouble In perceiving that the bottom
cause Of the irregular and deranging
effects described is TO be found In a fixed
volume Of paper money clothed with fun
powers Of a legal tender. Upon this
money-itself a credit obligation-other
credit obligations, in the form Of bank
deposits through bank loans, may be built
up in the proportion of four to one. With
the volume of paper money thus fixed
with no natural movement toward its re-
tirement when not needed In legitimate
trade-the tendency to build the four
story structure upon 1T as a permanent
base is irresistible. The withdrawal of
the base by those who really own II
causes the structure to vibrate and
threatens 1T with a fall.
Consider now, as briefly as may be,
the practical working of a bank-note
currency-non-legal tender-if substituted
for the paper money issued by the
government. Notification may be found
by those who will look for it in systems
now current in France, Germany. Scot
land, and Canada; or If our own records
be preferred, the New England system Of
forty years ago, or those then in vogue
in Indiana, Iowa, and Louisiana, will be
equally good examples.
Mr.. Gage then goes on to explain how,
when money was not needed for legiti
mate business purposes, there would be
an Interchange of the notes of the banks
and temporary retirement Of unnecessary
currency, and continues:
when, with the recurring needs of the
interior TO handle its products Of the
farm, the factory, and the mine, the
power TO issue circulating notes may be
summoned into use, then the needs of
industry will coincide with the profit
moving motives of the banker, and the
full value of this latent power will be
experienced. not in the centres. where
hon ,ntn NO LODI nj mill art
circulate, but in the interior, where raw
products are raised, and where the busy
wheels of shop and factory certify that
labor wages are 10 be paid.
1.-THE power of the bank note, tenn
porarily suspended, will always be re-
stored in full upon the call of industry.
The power of our present currency, on
the contrary, is not suspended. 1t is, as
pointed out, inevitably misdirected. 1t
artificially stimulates speculative activity
in securities at the centres. 1t periodi-
cally absorbs the credit powers AT times
when they should be made serviceable
TO the whole country. 1t ministers 10
the Spectator, II prejudices the pro-
Queer the merchant. and the manufac-
turer. though. at last, all suffer from its
deranging influences.
These are the reasons. the more i'm
portant reasons. why our banking sys-
tenn should be reformed and made effec.
tive to commercial and Industrial needs;
and these same reasons, with others not
here set forth, call for the elimination,
in a safe and proper way. of the injurious
interference In our currency system by
the legal-tender paper money OF the gov
eminent"
In concluding his discussion OF this sub
ject. Mr.. Gage, while declaring that ne
would not offer the Canadian system "as
a model from which we should make an