Evening star. [volume] (Washington, D.C.) 1854-1972, 1899-12-23
GAGE ON FINANCES
The Secretary at Forefathers' Day
Dinner at Orange, N. ].
GOVERNMENT And THE BANKER
Function Of Each With Reference
to the Other.
THE NEEDS OF BUSINESS
THE NEEDS OF BUSINESS


Forefathers' Day dinner in Orange ". j.,
last night, taking as his topic. Some As.
poets Of the Public Finances" He said in
part:
Among the many problems which are
thrust upon us. from which, until rightly
solved. We must ignorantly suffer, the prob
lon of governmental and public finance is
not among the least. and = is upon this
particular problem that ] venture to take
your time. The problem is tivefold or
rather, it is one under five principal divis-
lens, and may be thus classified:
First-fhe independent treasury-Its de-
STABILITY measure of safety to the pub
lie funds. and its economic evil as an alb
sorbent of that portion of the capital Cir
Culating in the form of money.
''Second-The effect and influence for good
or evil of government issues of legaI-tender
money.
Third-The money standard.
Notwithstanding and currency.
tIfth-The public debt and taxation.
AS to the independent treasury. we wit
ness strange inconsistency. The Congress
or the United States formulateS a great
banking system. and endoWs it with multi
piled checks and guards calculated to give
safety to its operations. The government
assumes over the institutions organized I'M
der the law-now some :i.:.o0 in uunher-a
close and vigilant supervision. 1t appoints
special agents clothed with large powers of
Jurisdiction. 1t allows the institutions thus
under its patronage and protection to take
under their control some two thousand mil
lions of dollars of the peoples money, while
IL its own fiscal operations the government
Itself Will not trust the hest of them to the
extent of one dollar In direct opposition to
governmental methods abroad. which have
for generations transacted their financial
operations through banking agencies 1t
taxes up into its own strong box the fruits
OF the taxation it imposes.
IF general prosperity appears, the prod
uctS of human industry increase In GUAM
uty. or improve in price. Then the pro-
ceedS OF taxation are. parf passu, larger.
As a consequence. the supply of money in
creas,ngly necessary to more active condr-
tons. through the effect of governmental al
action. is at that important period dim:n-
iShed IN volume by being withdrawn from
public use. On the other hand and quite to
the contrary. when business depression
comes, or activity dimin,shas. prices fam
Then the public revenue declines and be
comes relatively less than the pubic ex-
perdtture. The public hoard which might
have been useful under reverse conditions
is then freely poured out into channels
where IT cannot be probably used. | Offer
these comments to excite reflections | do
not suggest Il present remedy.
Lesal-Tender Paper Money.
Il might speak after "A similar fashion i'll
rCga.d |" Inc legal tender paper money is
sued by the government. Really debt OBJ
legation hey are. through their legaI-ten-
der feature, given i'll certain directions the
p"tent'al.y NJ money itself. In the bank
reserves thCy are recognized by law as
equal in efficiency to gold. Now banking
reserves are III particular serse the foun-
d.,lion upon which 'he large superstruc,ure
81 trFd', renCscs, and upon the verify and
qualitY of these reserves the immediate.
sG,vency u the credit structure depends
One does not have to look long to see a
Ia Tli
ard money itself - gold - and the govern
naen;'s prOI.is. 10 pay money. If the latter
were supported by a d-posit-duiIar for dol
lar OF gold--in the public treasury, this
promise of he thing would be- substan-
TALLY. the thing itself. Such however is
not the condition of ;hings Behind some
StID, 900 200 IF government legal tender pa
i"er there l. held s1@5.'s'3 tJ5 IN gold To
TGtke good this grea. difference the gov
"5'nrncDt has no convertible value in hand
i mus, either by borrowing from others
OF by taxation uD1n those vino have secure
The means 70 maxi good ne difference
But. qUi;~ aside from hest weaknesses,
there has been dcVr!oDe:i in the general
public mind y coHy:cf ION more evil perhaps
in its tinal effects 'har arr those to which {
have just alluded The conviction is that
the law makes money: while the truth is
ce@piy founded in the nature Of things that
the law can do no such thing. 1t can rec
ogIiiZe and give sanctions: IL cannot Great e
But IN not gong to take up your time
i'll any argument for Immediate change or
repeal, either TO the independent Treas
ury, or the law which establishes govern
ment legal tender paper money. In my opin-
ion. it would be waste of time to ATTEMPT
this. Prejudice and precOnceptions are TOO
deep-rooted. Time and IA large knowledge
are essential to their cure. Lei me pass to
the third questionable standard Of money
Here we come to a question of irnne-
date and practical import. II has been the
occasion of much heated debate, as well a.
Of calm and deliberate study Political
parties have formulated propositions con-
corning it. and embodied these propositions
into the body of their political doctrines.
Agitation and doubts, excited by the Iona,
debate, have disturbed business. adversely
affected industry, and brought disaster and
ruin to thousands
Restoration of Condolences,
Three years ago the voice of the people
decreed period of rest. That voice de-
clared for the preservation and perpetual
lion OF that form Of metallic money which
has long been in use by US, as the ultimate
measure of value, and the standard of fu-
ture payments. The welcome assurance
that for al least four years the base of our
commercial exchanges would remain undis-
turbed, operated to restore confidence. to