A staunch defender of the gold standard during the election of 1896, Lyman J. Gage (1836-1927) was appointed Secretary of the Treasury by President William McKinley in 1897 and after McKinley's assassination, continued to serve under President Theodore Roosevelt. During the 1870s Gage had been one of the organizers of the "Honest Money League of the North West," which inaugurated a vicious campaign against the irredeemable greenbacks. His writings were widely circulated and he acquired a reputation as a sound conservative businessman.
Later, as vice-president of the First National Bank in Chicago (1891-1896), he made public his views that "the government must be taken out of the note-issuing business." As Secretary of the Treasury, Gage was influential in securing passage of the Gold Standard Act of March 14, 1900, which reestablished a currency backed solely by gold. Since this limited the amount of currency in circulation, it initiated a period, continuing until 1912, in which the Secretary of Treasury was obliged to interact in the money market by introducing into circulation the Treasury surplus. The inability of the Treasury to respond to the needs of the market and the need for an If elastic" currency, which would expand and contract with the needs of the nation, led to the creation of the Federal Reserve in 1913 to regulate the money market. Gage resigned in 1902 to become a banker in New York.
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