The diamond drill. (Crystal Falls, Iron County, Mich.) 1887-1996, 1899-02-18
CURRENCY REFORM.
Chicago's Comptroller of the Cur
rency on Gold Standard.
President Mci<iniey's Position On the
Question Clearly Reflected
Wisdom of the Pres
ent system

comptroller OF the currency, Charles
Gates Dawes, one OF the principal
speakers of the occasion, took for his
topic Currency Reform" speaking as
follows:
"The question OF the changes In our pres
ent law which should be made In order TO
carry out the VIII OF the people as ex-
pressed In 1896. In favor OF sound govern
mental money and the gold standard, Is one
which confronts the country, and which.
now that the clouds OF war have lifted Is
again receiving careful and general con-
sideraton. The year 1898 had demon
stratod that our present monetary system.
when subjected TO the severe test OF COM
mercial panic. and deficiency in govern
mental revenues, had an inherent weak
ness which. before that time, had not been
generally recognized.
This weakness resulted chiefly from two
causes. The first cause was the dispropor-
tion existing between demand govern
mental currency Liabilities and the gold In
the treasury with which to redeem them.
The second cause was the fact that when
these demand Liabilities were once redeemed
in gold they could be paid out again Tor
governmental expenses This enabled the
public, coming again into their possession,
TO again present them for redemption, ana
thus was created what was known as the
endless chain
Recognizing the duty OF action incum-
the United States, in his first annual mes
sage to congress, made the following rec
ommendation: That when any or the
United States notes are presented Tor re-
demption in gold and are redeemed IN gold,
such notes shall be kept apart and only
paid out in exchange for gold. This Is an
obvious duty
.In his last annual message 10 congress
i he repeated the recommendation In the Toll
lowing words: In my Judgment the pres
] o t., % no fFa4 IA
/ fies the Immediate enactment OF the legis-
! lation recommended one year ago under
\ which a portion OF the gold holdings
Il should be placed in trust FUND, from
I which greenbacks should be redeemed upon
4 presentation, but when once redeemed
4 should not therefore be paid out except Tor
\ gold "
The speaker then reviewed the course
1 Of monetary discussion subsequent TO
the presidents first recommendation.
lie maintained the proposed preference
\ OF the noteholder over the deposition, as
indicated in the later plans, would be
most injurious TO the general business
community, saying: As fundamen-
/ tai principle OF inherent justice the
rights of a note-holder and depositor
against the common assets of the bank
TO which their money has alike con-
tributed should be equally sacred lie
continued
what will be the effect OF enactment
/ into law OF his principal recommendation
x It's simplicity should not obscure its great
4 value and Importance. IL Will accomplish
4 the following results, all OF which relate
directly 10 the safety OF the gold standard
''With this trust fund In existence, de-
4 flcicnt governmental revenues cannot eat
away the foundation OF governmental cur
| rency. The practical effect OF the inability
+ OF the secretary OF the treasury TO use the
trust gold fund for currency expenditures
! will be to require the adjustment OF rev.
/ cnue laws by congress TO meet the emer-
! gency. In the second place, with this
I trust fund In existence, " II Is necessary
for the government 10 borrow money be-
| fore congress can change the revenue laws
so as 10 provide for deficiency. II VIII
borrow under more favorable conditions
Preserving Gold Standard.
I'm the third place with this trust fund
In existence the preservation OF the gold
| standard by the direct act OF the presi-
i dent and the secretary OF the treasury.
/ which occurred OF necessity several times
IN the years 1894. 1895 and 1896. would not
Y be absolutely necessary until the trust
funds were exhausted by the redemption
from Il Of an equal amount Of currency IL
abilities.
I'm the face OF the unqucstioncd ability
4 OF the United States to furnish AZ all times.
through currency legislation. revenues suf-
hcent to pay current expenses, the ab-
I sorpton OF portion OF the present surplus
gold holdings into fund for the better pro-
lection OF the demand currency liabilities OF
the treasury can incite no reasonable op-
position
THE early segregation OF this fund.
. which cannot be drawn upon for the cur
rent governmental expenses. increasing, as
~ VIII, the immediate Importance OF ade-
quate revenues, cannot but have bene-
Y fetal effect In making more prominent that
relation. which, more than any other ~
vital to the success OF both governments
/ and individunls-the relation OF existing
income TO existing expenses.
In his second annual message the pres
idGnt omitted the specific recommended
tion that National banks should be allowed
TO issue currency 20 the par OF the United
States bonds deposited as security, but
| renewed IN strongest language his recon-
mendation for securing the safety of our
governmental currency system by setting
| aside a trust fund In gold from which,
when once redeemed in gold, greenbacks
shall not thereafter be paid out except Ton
gold.
1T is impossible, under all the crchm-
stances. TO construe this otherwise than
as an evidence OF the great Importance at
tached by him TO this special step In gov
ernmcntal currency reform. and an init
| nation that no projected measures In
yolying national bank currency or branch
banking extensions should be allowed 10
interfere with the passage OF a law en-
! bodying this great safeguard 10 govern
mental currency credit
Each OF these latter propositions can
be considered Independently and should be
40 considered, N either. attached ak a rider
to the provision providing for governmental
currency reform. tends TO lessen is pros
pcct for enactment into law
| Let US remember that under the pres
ent system, IN which government bonds
stand as security for bank notes, every
| bank note Is as good as a government note.
whether one bank or all the banks issue
| notes. In no class OF laws are cxperi-
ments more dangerous than IN currency
| laws with existing prosperity, increas-
ing confidence. and growing credits. II is
| better TO be conservative than radical, and
| TO provide treasury reserves for the day
| OF panic rather than bank asset notes for
the day OF speculation"
GTThe stock Of gold in the treasury
is going slowly downward. There are
several reasons. however, why nobody
is alarmed az this condition. The gold
fund is higher than IL ever was before
until few months ago. II Is likely to
/ 49, rI In.