The Washington times., 1901-10-18
secretary Gage nt Milwaukee.

| If ANYTHING were needed to make IL
clear that Secretary Gage views our
| national finances exclusively from the
| standpoint of a banker, his address at
! Milwaukee fully supplies the deficiency.
! His statement that there is too close
an intimacy between the Government $
finances and the country's commercial
affairs" standing by itself, is decidedly
obscure. The truth is that it is utterly
impossible to seSregate the Govern
ment's finances from commercial affairs
otherwise than by the abolition of tar
ifs and national taxation. And Mr..
Gage would make the intimacy even
closer by continuing at all times to col
lect more revenue than is needed and
deposit the surplus with the banks.
But he would not stop here.
What the Secretary said at Milwau-
kee. in connection with his utterances
upon sundry other occasions. shows
plainly that his basic financial idea is
to get rid of all Government issues of
paper money, and turn the control of
the currency over entirely to the banks.
If the legal tender notes are withdrawn
from circulation, it will, of course,
make more room for bank notes: and,
in fact, they must be issued in order to
prevent a disastrous contraction of the
money supply. No man having the
slightest comprehension of monetary
principles can doubt that the present
issues Of legal tender notes can always
be maintained at par, and this without
redemption upon any extended scale.
The amount Of these notes is so small
compared with the tremendous demand
for money, that it is utterly impossible
for them to be worth less than their
face value. If gold should go abroad in
large amounts it would intensity the
demand for currency, and thus sustain
its value. The old cry of flooding the
country with cheap money has no ap-
plication here, for the amount of these
notes is not being increased, while the
rapid growth of the countrys business
constantly increases the demand.
The sole purpose of retiring the
greenbacks is to make a wider field for
the use of bank notes. This re-
quires one Of two things: More bond
issues to furnish the banks with secur-
ity for note circulation. or a change in
the law so as to allow the banks to is
sue notes upon their general assets
The first means an increase of our in
terest-bearing debt, the second a great
initiation of the currency at the option
of the banks, and upon the basis of un-
certain security. When a measure of
either kind is proposed, those who make /
the proposal should accompany it with |
a clear statement of how a bank /
note, which is not legal tender, is better /
and safer money than a greenback, !
which is, and now the people are to be |
benefited by the scheme. 1t is easy to /
see where the advantage to the banks |
would come in. but it is impossible to |
discern in what way the people would |
gain anything.
1t is to be regretted that Mr.. Gage |
can see nothing in the way of none |
tary reform that does not carry with |
it largess to the national banks. 1t
is also incomprehensible how he can be }
blind to the fact that the larger the /
bank note circulation becomes with the |
Government standing behind the banks 1
for the ultimate redemption of the |
notes, the more intimate must be the |
connection between the Governments !
finances and the country's commercial !
affairs"