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14. Under the present law, practically every dollar of the $1,000,000,000 currency in circulation is carried by the banks at not a cent profit to them or anybody else, but, on the other hand, a great loss to them.

Under the Walker bill they would be relieved of $400,000,000 of this burden, and competition would soon reduce interest on their loans and discounts to the people by the legitimate profit they would get upon their currency.

15. Under the present law national-bank currency notes, which are the people's money, are


They are forced out of circulation when the credit of the Government is best, business most active, and the people need the most money; they are forced into circulation by the banks when the people do not need them and can not use them.

Under the proposed bill it would be for the interest of the banks to issue most money when the people needed it, and to just as large an amount as the people can use. The competition between banks in forcing it out will make it just as cheap as money can possibly be issued under any system, and kept “good” and honestly used by the people, and when they most need it. That part and only that part of the cur rency will be forced back to the banks that the people can not profitably use. (See Appendix H, p. 43.)

10. Under the present law the United States has the most expensive currency system of any first-class nation.

Under the proposed law the currency will cost them as little as it can possibly be issued for and maintain the circulation of the legal tender notes, etc.

17. Under the present law there is no way for the Secretary of the Treasury to avail himself of the expert assistance that is absolutely necessary to him to properly discharge his duties, and that every banker in the country has in his clearing-house committee and banking associates, etc. To-day, if the Secretary seeks any advice he thereby inaugurates a panic—the very panic he may be seeking to avert.

Under the proposed bill the reverse is true. It is made to the interest of the banks to furnish to the Secretary of the Treasury, as advisers, seven of the most experienced, public spirited, and patriotic bankers in the country.

18. Under the present law the enormous expense of our financial and banking methods of itself alone, if there was no other disadvantage, puts us out of competition for the world's commerce. They are so expensive, as compared with the currency of Great Britain, that were we on precisely the same economic plane of Great Britain as to wages, machinery, skill, enterprise, ability, steamships, railroads, navy, diplomatic and consular agents, and established business at every point, duplicating that of Great Britain, the difference between the cost of money in this country as compared with that of Great Britain, France, or Germany would enable Great Britain to beat out and destroy our foreign trade in favor of her own, and wholly on account of our banking and treasury redemption system.

During the whole period from 1879 to 1891 the United States Treasury took all the risk and was at all the expense of the clearing-house sys. tem of its current gold redemption of legal-tender and Treasury notes. Then, and it will be the same again, confidence could not be maintained in such empirical practices without a surplus in the Treasury as large as was then held, or very nearly $300,000,000, about half of it in gold,

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equal to half the national banking capital in the country. Every advantage accrued to the banks and every disadvantage, expense, risk, and loss to the people through the United States Treasury.

Under the Walker bill the United States Treasury would only touch the national clearing house as a fiscal agent and depository of public moneys, having as a guaranty of the safety of such deposits the whole $1,000,000,000 of banking capital of the country as a guaranty fund for its deposit in the national clearing house. The Treasury could in no event incur any loss or be put to any expense, as it would be the only depositor of money in that association. Except in the Walker bill, or its equivalent, there is no possible way of avoiding the continuance of this enormous loss to the people. There is no conceivable way of resuming a safe Treasury coin redemption of paper money but in returning to the practice described by Mr. W. Dodsworth (see page 75) or enacting into law the Walker bill or its equivalent.

It provides a more effective and far safer connection of the Treas. ury of the United States with the principal banking clearing house in the country, and relieves the United States Treasury from taking all the risks and of being subject to all the losses that are involved in the clearing-house business of the country, which risk it carried from the resumption of specie payments in 1879 to about the middle of 1891, at an expense to the people, supplied by taxation, of over $12,000,000 a year.

20. The New York clearing-house certificates are sure to prove at some time a most dangerous and unsatisfactory emergency currency, as compared with legal-tender currency, to all excepting the banks which compose it. Banks in other parts of the country have already been brought into very great peril by their use, as is shown by the letter of

Appendix R, page 68. Under the Walker bill the emergency currency would all be legaltender currency, the advantages of which in safety are incalculable.



of this country never has been maintained by the United States Treas. ury for a single day since it began in 1879. It has been done by the patriotic bankers of the country in furnishing all the gold for export and to importers the gold to pay duties. Thus they protected and supplied the gold in the United States Treasury, but at an enormous cost to the people that the bankers were powerless to save. Appendix B, page 37; also U, page 75. I doubt if there has been an instance in the whole history of the world of the bankers of any country performing so patriotic a service, covering so long a period and up to 1893, until the system was broken down in spite of the efforts of American bankers. They are deserving of all praise for their wisdom and patriotism.

But being broken down and destroyed, it can not be restored by the agreement and efforts of any less than the whole number of bankers in the country, which it is impossible to have. Maintaining the parity of gold and silver, legal-tender notes, Treasury notes, and national-bank notes has gone, never to return except by the passage of some bill drawn on the lines of the Walker banking bill.

The demand of the business of the nation is for a currency equitable and stable, free from oscillations so dangerous to business interests and 8C unjust to the farmers and wage workers of the nation, the opposite of that we now have, and such as is provided in the bill I commend.


A discussion of the gold problem is not necessarily a part of this question, but as persons insist upon bringing it into view I can not omit it.

A misapprehension as to the use made of gold arises from the fact that the movement of gold is not studied upon the facts of its actual use and the ascertained facts brought to the test of inductive reasoning; but rather upon the assumption of error to be fact, and then deducing certain alleged facts from the errors and proclaiming them for truth.

There are two realms of wealth, the borders of which are constantly changing and apparently intermingling, viz: Productive wealth, mostly real estate and its developments, and consumable wealth, mostly products and their making and handling.

Gold coin (as coin) can not be consumed and can earn no income. It is neither productive wealth nor consumable wealth. It simply measures the value expressed in all paper obligations.

Banks of discount, currency and coin, about $4,000,000,000, are inextricably mixed together, each being a part of the other. They handle only consumable wealth, valued at $25,000,000,000. They are very slightly affected by the handling of or the movement of productive wealth.

Savings banks, loan and trust companies, investment companies, building and loan companies, insurance companies, coöperate banks, benefit associations, etc., as well as individuals, unlike banks of discount and deposit, handle productive wealth, exclusively valued at $40,000,000,000. Each class of moneyed institutions fails in the sphere of the other. While wealth is always in process of being transferred from one realm to the other, the percentage of transfers as compared with the whole volume, in normal conditions, is infinitesimal and of no appreciable influence. The balance in such movements only shows that the accumulations in one realm can be more profitably employed in the other. Monetary crises or panics always begin in the realm of consumable wealth. Demands are then immediately made on the productive realm to supply any vacuum made by a panic in the consumable realm for stocks, bonds, etc., for export, that otherwise would have to be answered by gold. Of course it is individuals embarrassed by the panic that have to furnish these so-called solid securities. The popular forms of expression are, as to particular persons," He's gone too deeply into real estate or railroading” and “He tried to own his plant when he ought to have hired it;" etc.

For the reason given, gold never actually “moves" in large volumes. It is inevitable that millions of bonds and stocks take the place of gold, as all experience proves they do. The tables of “Appendix Gold“ establish and enforce these facts, as they show gold scarcely ever moves to any great amount.

When currency and coinage laws leave gold free to move in compliance with the laws of trade it is in accordance with all business experience that gold never moves from or into any country to any amount greater or smaller than is necessary to restrain or induce to normal conditions the business activity of the country, any more than the balls of the regulator of the engine describe a circle of more or less diameter than is necessary to keep the engine at its normal speed.

The importing or exporting of gold is regulated by the imperative demands of the foreign trade of a country, and is not actual to any extent, but potential. The things really imported or exported for gold, their price being forced up or down to cause the doing of it, are stocks and bonds, titles to productive wealth brought out of the realm of productive wealth into the realm of consumable wealth to be imported or exported, as the case inay be, in place of gold,

Of course, every money obligation known to finance in banking, as paper money, note, or draft, is a title to the whole or some part of consumable wealth. Whether it be near or at the antipodes, is wholly immaterial to the bank. The financier or banker takes no cognizance of the location or movement of products to which he has a title. He cares only for their value and safety. Therefore, whether the merchant in Chicago or Cincinnati buys products in San Francisco, New York, Liverpool, Paris, China, Japan, or Mexico, obligations of ownership of which come into possession of a bauker, their payment has no influence on the movement of the world's measure of value metal between coun. tries, whether it be silver or gold, as payment is not made in gold but in titles to products. There is no trade between countries. The ocean or national boundaries are not known to trade. All trade is between individuals. The movement of gold across the ocean has no more sig. nificance than its movement across any parallel of latitude or longitude. As the world's measure is now a grain of gold, I use the word gold for brevity. The ownership of products being in any country, or the move. ment of products themselves from one country to another gives no hint of what the movement of gold will be.

The law of the movement of gold is as inexorable but different from the law governing the movement of other products. That the popular opinion as to how and why gold is required for shipment from one city to another, or from one country to another, has no foundation in fact is abundantly proven by Appendix Gold, page 35. When, why, or how economic law, left free to act, as it is not in this country, will compel the actual shipment of gold is not easy of statement in a paper like this. A struggle for gold between individuals or nations is apparent rather than real. It is really the struggle of men for products and of titles to products to adjust the balances in exchange of themselves, that is seen. When the point is reached for gold shipments increased interest rates for business paper always depreciate stocks and bonds, and these titles to fixed property are shipped instead of gold. It is the same as the repression of and the struggle of steam for release from confine. ment that gives power to the engine-gold acting in the movement of products as the regulator does to the engine. It is as objectionable, and no more so, than is the struggle of water to find its level, that causes it to turn the water wheel that moves thousands of spindles. It is the duplicate in ethics of the struggle of conflicting truths to adjust themselves in practical and beneficent results in advancing civilization. Commercial gold is the "regulator" to commerce as surely as the engine regulator is to the engine.

These tables show that an actual shipment or movement of gold does not depend upon and is not influenced by the fact that the balance of trade is for or against a city or country, or whether a city or country is a debtor or creditor city or country, but wholly upon the condition of the credit of the bolder of gold, whether it is good or bad, and whether his credit is becoming better or getting worse. They also show that individuals and nations use less and less gold as they advance in intelligence, are more peaceful, and are richer,


We now use only $6,000,000 or $8,000,000 of coin a day for domestic trade and to export. Let my bill become a law, with its clearing-house system, and not $2,000,000 a day would be used when all banks in the country are operating under it. With the establishment of an international clearing house, which is soon to come, scarcely more than that sum would be used each day in the whole world. In fact, as extremes always meet, and as there is nothing new under the sun, and all things come again, the time is soon coming when all the clearings of the world's commerce will be made each day, by telephone and telegraph, at a single point. It will be simply the changing of gold at a central point, from one account to another in a clearing house, as in the days when the balances of the commerce of the world were settled in the Bank of Venice, but little gold going in or coming out of that bank, and by the simple transfer from one account to another of the final balance of each merchant in all countries in the world's commerce.

The difficulty economists and financiers now find in the use of silver is as sure to confront us as to gold, only with tenfold more difficulty, before fifty years are passed, as anything not yet proved by actual occurrence. Inventions and new methods are fast relegating nearly all the coin currency of commerce to innocuous desuetude.

It is foreign commerce only that tests the measure of value metal” as to quantity in any financial system, according to the theory of those who fear gold depletion. Experience rightly settles all economic ques. tions. England has maintained gold payments for eighty years by having from 4 to 5 per cent of visible gold to her total commerce. (See Table “Gold,” p. 35, for all these statements.)

The United States has bad for years from 16 to 18 per cent of visible gold to her foreign commerce. Again, the United States accumulated over $300,000,000 of gold during the suspension of specie payments; and India exports and imports her gold freely and in large quantities, as does Mexico, China, Japan, and all other silver countries—as to that matter as do all gold measure value countries. These two facts alone confound the popular theory as to the demands for and movement of gold.

The United States, again, exports from 23 to 60 per cent of gold to the balance in her favor of exports over imports of merchandise, while England does exactly the contrary. A very large percentage of her export gold the United States produces from her mines, all but 7 per cent.

England, contra to the United States, imports from 4 to 8 per cent of gold to the excess of her imports over her exports. This again proves the popular theory of the movement of gold a delusion.

The figures of production and accumulation of gold are exceedingly interesting, and confusing as well, excepting to those who know it all."

The world's production of 1891 to 1894, inclusive, was $600,000,000. In that time the visible gold in England increased..

$53,000,000 In that time the visible gold in France increased..

141, 000, 000 Total.

194,000,000 Loss of visible gold by the United States.

$25, 000, 000 Loss of visible gold by Germany

24, 000, 000 Loss of visible gold by India.


71,000,000 Increase of visible gold in the five countries...

123, 000, 000 Where the other $475,000,000 is, is known only to the wise ones who know all there is to know about the movement of gold. The world's

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