The enterprise. [volume] (Wellington, Ohio) 188?-1899, 1899-02-22
CURRENCY REFORM.
Chicago's Comptroller of the Cur
rency on Gold Standard.
President McEinley's Position on the
Question Clearly Reflected
Wisdom of the Press
ent System.

At the Lincoln day celebration of the
Marquette club of Chicago, the city's
comptroller of the currency, Charles
Gates Dawes, one of the principal
speakers of the occasion, took for his
topic Currency Reform" speaking az
follows:
THE question of the changes in our pres
ent law which should be made in order to
carry out the will of the people, as ex-
pressed in 1885, 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-
sideration. The year 1893 had demon
strated that our present monetary system.
when subjected to the severe test of COM
mercial panic, and a 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 for
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.'l "a
''Recognizing the duty of action incum-
bent on him and his party, the president OF
the United States, in his first annual mes
sage to congress, made the following rec
ommendation: That when any of the
United States notes are presented for 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
I'm his last annual message to congress
he repeated the recommendation in the fol-
lowing words: In my judgment the pres
ent condition of the treasury amply 1usti-
fies the immediate enactment of the legis-
lation recommended one year ago, under
which a portion of the gold holdings
should be placed in a trust fund, from
which greenbacks should be redeemed upon
presentation, but when once redeemed
should not therefore be paid out except for
gold.'"
The speaker then reviewed the course
of monetary discussion subsequent to
the presidents first recommendation.
He maintained the proposed preference
of the noteholder over the depositor, as
indicated in the later plans, would be
most injurious to the general business
community, saying: "As fundamenr
tai principle of inherent justice the
rights of note-holder and depositor
against the common assets of the bank
to which their money has alike con-
tributed should be equally sacred" He
continued:
What will be the effect of enactment
into law of his principal recommendation?
It's simplicity should not obscure its great
value and Importance. 1t will accomplish
the following results, all of which relate
directly to the safety Of the gold standard:
with this trust fund in existence, de-
ficient 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.
enue laws by congress to meet the emer-
gency. In the second place, with this
trust fund In existence, II 1t is necessary
for the government to borrow money be-
fore congress can change the revenue laws
so as to provide for deficiency, 1t will
borrow under more favorable conditions.
Preserving Gold Standard.
''In the third place, with this trust fund
In existence the preservation of the gold
standard by the direct act Of the presi-
dent and the secretary of the treasury
which occurred of necessity several times
in the years 1894, 1895 and 1896, would not
be absolutely necessary until the trust
funds were exhausted by the redemption
from it of an equal amount Of currency IL
abilities
I'm the face of the unquestioned ability
of the United States to furnish at all times,
through currency legislation, revenues suf-
fceint to pay current expenses, the abb
sorption 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. Y.
THE early segregation Of this fund,
which cannot be drawn upon for the cur
rent governmental expenses, increasing as
it WILL the immediate Importance of sde-
quate revenues, cannot but have bene-
ficial effect in making more prominent that
relation, which, more than any other is
vital TO the success of both governments
and indivduals-the relation of existing
income to existing expenses
I'm his second annual message the pres
ident omitted the specific recommenda-
tionthat National'ba should be allowed
to issue currency to the par of the United
States bonds deposited as security, hut
renewed in strongest language his recon-
mendation for securing the safety of our
governmental currency system by setting
aside trust fund in gold from which,
when once redeemed in gold greenbacks
shall not thereafter be paid out except for
gold
1T Is impossible, under all the crcum-
stances, to construe this otherwise than
as an evidence vi the great Importance at
tached by him to this special step in gov
ernmental currency reform. and an inti-
nation that no projected measures in-
volving national bank currency or branch
banking extensions should be allowed to,
interfere with the passage of law em-
bodying this great safeguard to govern
mental currency credit.
Each of these latter propositions can
be considered Independently and should be
so considered, If either, attached as rider
to the provision providing forgovernmental,
currency reform, tends to lessen its pros
pect 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