The Hope pioneer. [volume] (Hope, N.D.) 1882-1964, 1898-08-11
WHAT GAGE SAID.
In 1891 Forctold tho Treasury Pre-
dicament of 1893.
His Often Quoted Address of 1904
Importance of Crcdits-Sumnary
of Defects Of Our Cur
rcncy System.

The new secretary Of the treasury.
Lyman j. Gage, is rot novice either
in the theory or practice of financial
affairs. Long before most bankers and
business mem We're greatly concerned
about our national finances he SAW dnn-
ger ahead and prophcsied what would
and what did--haprcn, unless certain
changes were made in our unscicntihc
and unsourd financial system.
On February 10, 1891, Mr.. Gage read
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, anth never by conven-
tional agreements made in advance he
discussed our own monetary conditions.
lie 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 divcrging rapidly. 10 the qucs-
ton: Cannbt the government continue
this policy indefinitely and thus for
ever preserve Il higher value to tho sill
yer coin than its equivalent in silver
bullion?" he replied that it could not.
'"rhe proportion of silver payments to
the government" he said, will steadi-
ly increase until the treasury depart
lnent 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 he the sooner reached V
~ L., H. 4 or
than this. 1t is precisely what hap
rcncd.
In the autumn Of 1894 lie 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
tcrest, 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:
"In speaking upon the subject of our
money system ono must be aware that
in whatever he may say he will excite
tho hostile criticism and draw forth
bitter invcctivc from some one or more
of the var;ous factions WHO are seeking
to establish on new and experimental
foundations our much disturbed tinIn-
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 disguscs
| be pulled aside and that real facts ap.
pear.
"There is, in truth, only one real
| moncy-viz.. metallic coin. 1t may be
| composed of gold OF 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, pcrfor1r
the functions Of money, often more corr
venicntIy than money itself. Because o
this confusion comes, and we are Ice
nstray Seeing that tire grcenbacS j:
uttered by the government; that ithas
by the legal tender quality impaired t.
it, the power to pay debts, and thai
it circulatcs with all the power O
money, discrimination ceascs--wc cal
it moncy-and the idea that govern
ment cam create money by its sanction
or fiat becomes rooted in the mind. The
distinctions just pointed out are, how
ever, fundamental distinctions. The
should be taught in the schools. The.
are simple, easy to be understood cveI
by a child.
I'VE admit that on many occasions
paper money, whether grcenbacks
treasury notes or national bank notes
is more to be desired than gold. Ic
more to be desired than either, a
proved by the daily conduct of men, j
credit balance il Il solvent bank
For, to secure this better form Of good
people voluntarily give to the bankc
these promises to pay-yca, even gol
ilself--for credit to an equal sun
upon his books. With an entry upo
their passbook us evidence of the trans
action they claim to have money j
the bank In popular language, tn
claim is well enough, but, corrcctI
speaking, it is positively untrue. The
have parted with their money, il none
they had. 1T belongs to the banker
it is no longer theirs.
"rhc consideration they have II
ceivcd is an agreement from the hsnkc
to meet their acquisitions upon hl'
from time to time. IL the bunker
4 l....