Secretary Gage And Currency Reform

If Secretary (age has his vvay about it the currency systera of the United States will be "refonned." Kut Secretary (iage will not have his way about it f or even a gold bug tfepublican Congress will not dare make the changes that the secretary ot' the treasury is pleased to desígnate by the euphonious title of "reform." The Seoretary's idea is to the retire the greenbacks and silver certilicates, paying for the gold with which to reJeem them with bonds, sell the silver, both coin and bullion. leave gold the sole money issued by the government and turn over to the banks the business of supplying the paper currency of the country. Now all this would undoubtedly be a good thing for the banks. The business of supplying the currency with which to carry on the business of this country is of suf licient importance to justify the attent'.on of so distinguished a financier as the secretary of the treasury. To put it moderately there would be millions in it. It would at ouce iinmeasurably increase the business capital and the proflts of the banking institutions of the country without increasing in any manner their resources. It would place within the control of the banks of issue every movement of industry and commerce. The banks would at all times be masters of the situation. And this is called a scientific system. J5ut what do the people get in return for all this ? The privilege of paying interest on the bonds necessary to retire the present currency and the chance to borrow and use a paper money inferior to that we have now at the rate of interest the banking trust sees rit to impose. There is a theory in the books that a currency issued by a banking firm is superior to a currency by the state, but that theory was lirst con ceived in the frrtile braih of some "financier" who was not looking for the short end of a bargain, and it: has been proprogated by the aewspapers and schools that are conducted in the interest of the chiss who would enjoy the pvüliis of making the people's money, but argument in support of it there is none. The theory that a private institution, standing singly. is stronger than the nation of which i's, resources are but a component part is bolstered by more sophistry than any of the hallucinations of the so-called " sound money " cause. The failure of many governments that have attempted to iloat a national paper currency to maintain the value and control the issue of the same are cited as proof that the system is dangerous and unscientiñc. Yet no instance has yet been recorded of a successful bank currency that was not secured in some way by government credit and controlled by government supervisión. Our own experience in that line is suflieient to refute the arguments of the advocates of a " scientiflc" bank currency. The only system of banking that has ever provided us a curreocy which would pass at par wlth the metallic coin in which it purported to be redeemable, outside of the localities conversant with the ñnancial soundness of the banker issuing it, is the national banking system now in force, and which is built upon the rredit of the government and held in check by government supervisión. Just whythe government whose credit is necessary to sustain, and whose laws are necessary to control, a successful issue of bank currency c nnot perform for its people those functions which it is necessary for it to guarantee when performed by private institutions, does not appear. Every dollar of the national bank currency of this country is maintained at par by the credit of the government. Were the 200 millions of bank currency now outstanding replaced by government notes, the security of those notes could not be inferior to that of the bank notes, and the people would save the interest on 200 million of bonds. But it is urged the people cannot be trusted to issue their own money. What banking system, let us ask, has ever been successfully trusted with the issue of money without government restriction? lf it is government resources and governmental control thnt gives virtue to bank issues, what valid reason can be urged why the people cannot perform those functions l'or themselves 'i Any nation can safely maintain an irredeemable paper currency equal in volume to the sum total of its state and muniejpal taxes. Such an issue is redeemed fully and completely each year in services which, in fact. is the only real redemption that can be promised for any money. Even the mach vaunted yellow gold over whose stable value its admirers are inclined to grow enthusiastic, has no other basis of value than the presumption that some one else will redeem the coin, which you consent to receive at a nominal value, in an equal amouut of merchandise or services. The greenbacks have performed a meritorious service in the business his tory of this country, lf the people part with them it will be beeause the change is effected by subterfuge as was the de rnonetizationof silver. They will never c nsent to see the greenbacks or our silver circulation replaced by an interest bearing debt. There is no inore reason why the peop'e should turn over to the banks the business of issuing currency than there is for giving to those insHtutions the collection of taxes or the administration of the pólice powr. liïhe govermnent should go out of the banking business" is a favorite catch phrase of the friends of a bank currency, but it would be quite as vvell for the people did the banks consent to go out of the governing business.