The Conservative *
bo au excess or scarcity. Not one of
these tilings is true of the use of money ;
it is used when it passes from one per
son to another ; in that process it under
goes no change whatever ; after it has
been used there is as much money as
there was before. A given quantity of
money may do a very little business , or
it may do a great deal ; there is no spe
cific quantity that is essential to an in
dividual , or a transaction , or a commun
ity. Therefore the effect of the demand
upon money is not in , the least like the
effect of demand upon food , for when
the demand for food is satisfied there
is less food in the world than there was
before , and when the demand for money
is satisfied there is exactly as much
money in the world as there was before. "
I think I can prove beyond the sha
dow of a doubt that whether there is
gold enough to do the world's business
or not , there is enough to do our busi
ness.
PLENTY OF GOLD TO DO OUU BUSINESS.
Not very long ago a banker in New
York said to me that the institution
with which he was connected had cash
on hand to the amount of $45,000,000 ,
and that all of it was gold except $900-
000 of legal-tender notes. "Why do
you keep so much gold ? " I asked. "Be
cause we can't help ourselves , " was the
reply. "Our customers call upon us for
paper currency , We give it to them as
long as we have it , and gold flows in to
fill the vacuum. " The name of this
banker is A. B. Hepburn , vice president
of the National City Bank.
It seemed surprising to me that the
cash in our largest bank should be com
posed of 98 per cent gold and only 2 per
cent paper , and I began to make some
investigations. I found that the so-
called clearing-house banks of New
York had , on the 9th of July , $180,498-
000 gold and $02,868,000 of paper cur
rency , / . e. , about three dollars of gold
to one dollar of paper. The Boston
banks at the same time had $14,080,000
gold and $5,250,000 paper. These figures
speak for themselves. They show that
in that part of the country there is gold
enough to do all needful business. You
may say that that is true only of New
York and Boston , or of the Eastern
states generally , but that it is not true
of the West. Well , I can tell you \\o\\ \
you can make it true of the West. Just
send your greenbacks and other cur
rency to Now York , and ask the bankers
there to give you gold for it , and see
how quickly they will respond. Their
faces will bo wreathed with smiles as
they pass it over to you. The fact is
you have drawn the paper away frou
them and compelled them to fill u ]
with gold instead. As Mr. Hopbun
said to me : They "can't help them
selves. " The reason of this plethora o :
gold is easy to understand. The largo
crops of the past two years , coinciding
with the partial failures abroad , turnec
the balance of trade in our favor.
shall prove to you that there is gold
uough in the country at large to do the
business of the country at large.
On the 1st of July , 1897 , the stock of
gold coin and bullion in the United
States , according to the report of the
lirector of the mint , was $090,270,542.
During the succeeding fiscal
year to July 1 , 1898 , there
was imported into the
United States from foreign
countries , other than Can
ada the sum of $111,082,4(50 (
Chore was produced in the
United States during the
same period not less than. 58,000,000
There was imported from
the Klondike about 2,500,000
$171,582,4GG
Add stock on hand July 1 ,
1897 (590,270,542 (
$867,808,008
Deduct amount used in arts
( mint estimate ) 12,000,000
Stock on hand July 1,1898. . $855,808,008
There have been some importations
since July 1 , and the receipts from the
Klondike since that date have been be
tween $5,000,000 and $0,000,000 , and our
own production is at the rate of $5,000-
000 per month. So it is reasonable to
assume that the stock of gold coin and
bullion in the United States now is not
far from $870,000,000. One year ago ,
according to the mint report , the largest
amount of gold held by any nation was
$772,000,000 held by Franco. The
United States now stands first in the list
of nations as a holder of gold. The
treasury now holds $280,000,000 gold ,
the largest sum ever hold by it , and it is
increasing rapidly.
With these facts before us I think no
body will deny that there is gold enough
for all of our purposes , however it may
be with other countries. It is com
monly reckoned that $1 of gold is suffi
cient to servo as a guarantee and basis
for $8 of fiduciary circulation. Accord
ing to that reckoning the amount of gold
now in the United States would servo as
a guarantee for $2,500,000,000 of fiduci
ary circulation or more than doxible
what we actually have. Our gold is more
than 80 per cent of our fiduciary circu
lation. The Bank of England's gold reserve -
servo is seldom more than 45 per cent
of her total liabilities.
ALSO PLENTY TO DO THE WOULD'S
BUSINESS.
Now it does not greatly concern mo
whether there is gold enough in the
world to do the business of the world or
not , provided we have enough to do our
business. Yet I think the facts justify
the belief that there is enough for other
nations also. According to the last mini
report , the amount of gold in the world
used for monetary purposes was equal to
$4,859,000,000. The estimate of the
world's gold productions for the caleu
dar year 1897 , made by the director o
the mint , is $240,000,000 additional.
Pew persons realize the enormous in
crease of gold production that has taken
place within the present decade. The
figures are as follows :
1890 . $118,848,700
1891 180,050,000
892 . . . 146,051,500
898 . . . . . . 157,494,800
894 181,175,600
895 . . . . . . 199,804,100
89(5 ( . 202,956,000
897 . . 240,000,000
Production eight years. $1,877,080,700
It will be observed that the world's
n-oduction of gold has more than dou-
jled since 1891 , and that the largest in
crease in any one year took place last
year. It is a noteworthy fact too , that
he increase of gold production in the
Jnited States has very nearly kept pace
witli the general increase , having been
$58,000,000 in the calendar year 1897 ,
against $82,845,000 in 1890. The largest
gold-producing country now is South
Africa , whose output for the present
year (1898) ( ) will approximate $75,000,000.
PRESENT PHASE OF THE CURRENCY
QUESTION.
If there is such a shortage of paper
currency that the banks are gorged and
oaded down with gold the question will
naturally be asked : Why not have
more greenbacks ? What is the harm of
that ? This brings us to the present
phase of the currency question , to which
I shall ask your attention for the re
mainder of the time allotted to mo. The
arguments in favor of government paper
are plausible and specious. They are
rather captivating to the common mind.
If we are to have paper money at all
why should not the government issue it
and receive the interest on it instead of
turning that function and that profit
over to private persons and corporations ?
The question is a proper one and it de
serves au answer. Before considering
it , I will remark that , in the discussion
of this question , until the Indianapolis
convention took it up , the opposition to
government paper money was repre
sented mainly if not wholly by a limited
number of men termed economists
college professors , and book and mngi-
ziue writers. The bankers took little erne
no interest in the subject. When the
American Bankers' association four
years ago adopted what is known as the
Baltimore plan of currency reform they
did not touch the subject of government
paper money. Their plan contemplated
no disturbance of any part of it. The
fight against government paper , until
the Indianapolis convention assembled ,
was limited to a few men who have no
interest in banks , and no purpose to
servo except the general welfare. The
economists differ from each other more
or less respecting the laud of bank paper
that should bo allowed to circulate
but they ore unanimous in the belief
that government paper circulating as
