The times. [volume] (Richmond, Va.) 1890-1903, 1898-03-22
MIR. GAGE ON CREDITS.

SECRETARY cage lndNc y ctAsAbto Ne''fN
on Saturday evening before the Chamber
Of Commerce Of Pittsburg. Pa, on the
subject Of credit. and in the course OF his
remarks laid down the following PROPOSE
ton, which has been repeatedly stated in
tho columns OF The Times:
Money Is not the main active agent that
operates to accomplish this enormous
volume of production and exchange. IL
Is true that all exchanges are effected
in terms Of money. but the real operating
agent Is credit and the instruments which
embody or represent 1t. Nor except
within narrow limits, do these varied in
struments Of credit meet their final set
Element or liquidation in money. Through
the agency Of the bank these credit IN
struments. to a large extent, meet and
cancel each other without the use OF
money at all.
There Is in sight In our country vol
ume of money-gold and silver alone con-
sidered. all forms OF paper money them
selves being credit observation-disclosures
thing like one thousand million dollars;
but i'm fairly prosperous times, like the
present. the volume Of credits. operating
in productivity and exchange. is equal 10
at least fifteen thousand million dollars.
II we can picture IL as a stream or
river. we can fairly say the rise and fan
of this stream registers Industrial eXpah-
sion or contraction. 1t Is fed. this ener-
pizing stream. not from physical waters
coming down from snOw-clad mountains.
It's sources are i'm the minds OF men. It's
secret spring is the confidence Of man IN
man. united to a faith in the stability OF
future conditions. Born out OF the action
Of the individual mind it cannot be CO.
creed into activity. Affected by both rea-
son and imagination, Il IS subject 70 the
p9ralvzing Influences OF doubt and rear
II is equally stimulated by confidence ana
hope.
II is not a misuse Of language TO say
credit with its multform instruments Is
the real money of commerce. AS trans
actions increase. IL increases; as INDUS
try halts. its volume is reduced. II Is
created as transfers Of goods ana wares
take place. II expires or Is cancelled III
final settlement through the bank or IN
the Clearing House. 1t is always sum-
cieut 10 itself. II asks nothing from gov
eminent except the maintenance OF
neace and order. the enforcement OF JUS
tice. of equity, and the largest conditions
Of liberty.
There can be no doubt in the mind OF
am. thinking man that as the world pro-
Presses and as business methods approach
nerfection. there is less and less use for
actual money in the large transactions
Of life There was a time, TO give an IL
lustration. when each bank in this city
was forced to settle up every day or two
with every other bank, the process being
slow and tedious and requiring many in
divldual transactions. But by the mod
ern method all this is changed. Now
these settlements are made daily through
the clearing house. and one settlement
does for all.
Another point. The total clearings
through the clearing house Of the Rich
mond Association for eleven months end
ing November 90. 1897. amounted to Se4'-
$3.50. Yet it is a well known fact that
these clearings we're made by the actual
passing Of a few thousand dollars from
bank to bank. for the simple reason that
under a perfected system. settlements are
made bv credits without the need of cash.
It sometimes happens, to be sure when
currency is in demand, that one bank
having a. balance to its credit in another
bank will ask for the cash, and this brings
MS TO the point which we would empha-
size. Mr.. Gage says that credit is al
WAYS sufficient to itself; that it asks no.
thing from government except the main
tenance of peace and order, the enforce
ment of justice. Of equity and the largest
conditions Of liberty" Precisely. II asks
Of government 10 break the shackles and
let credit have its way. 1t asks of gov
eminent that the prohibitory tax on
state BANK issues be removed in order
that there be always and at all times an
easy and natural supply Of currency in
response to the demand Of the hour. DO
this and credit will take care Of itself.
and the demand for currency will always
be supplied