Show mOVEIrS MESSAGE I Briefest Ever Made I to Congress GOOD SOUND SENSE The Topics are the Tariff and the Revenue HE RECOMMENDS REFORM i Stone Good Suggestions that Congress Con-gress Will do Well to Take to Heart To the Congress of the United States You are confronted at the threshold thresh-old of your legislative duties with a j condition of the national finances which imperatively demands immediate and careful consideration The amount of money annually received through the operation of present laws from the iudusries and necessities of the people largely exceeds the sum necessary neces-sary to meet the expenses of the government gov-ernment When we consider that the theory of our institutions guarantees to every citizen the full endowment of the fruits of his industry and enterprise enter-prise with only snch deduction as maybe may-be his share towards the careful and economical maintenance of the government gov-ernment which protects him it is plain that the exaction of more than this is indefensible and a culpable betrayal of fairness and justice This wrong inflicted upon those who bear the burden bur-den of national taxation like other wrongs multiplies a brood of evil consequences The PUBLIC TREASURY which should only exist as a conduit conveying the peoples tribute to its legitimate objects of expenditure becomes be-comes a hoarding place for money needlessly withdrawn from trade and the peoples use thus crippling our national energies usurping our coun trys development preventing investment invest-ment in productive enterprises threatening threat-ening financial disturbance and inviting invit-ing schemes of public plunder This condition of our treasury is not altogether alto-gether new and it has more than once ef late been submitted to the peoples representatives in the Congress who alone can supply a remedy and yet the situation still continues with aggravated aggra-vated incidents more than ever presaging pre-saging financial convulsion and widespread wide-spread disaster It will not do to neglect this situation because its dangers dan-gers are not now palpably imminent and apparent They exist none the less certainly and the unforeseen and UNEXPECTED OCCASION must come when suddenly they will be precipitated upon us On the 30th day of June 1885 the excess ex-cess of revenue over public expenditures expendi-tures after complying with the annual requirement of the sinking fund act was 178397358i during the year ended June 30 1886 such excess amounted to 54940354520 and during the year ended June 30 1881 it reached the sum of 5556784934 The annual contributions to the sinking fund during dur-ing the three years above specified amounting in the aggregate to 138 05832094 and deductions from the surplus as stated were made by calling call-ing in for that purpose the outstanding tree per cent bonds of the government govern-ment During the six months prior to June 301887 the SURPLUS REVENUE had crown so large by repeated accumulations accu-mulations and it was feared the withdrawal with-drawal this great sum of money needed by the people would so affect the business of the country that the sum of 79864100 of such surplus was applied to the payment of the principal and interest of the three per cent bonds still outstanding and which were then payable at the option of the government govern-ment The precarious condition of financial affairs among the people still needing relief immediately after the 39th day of June 1887 the remainder of the three per cent bonds then outstanding out-standing amounting with principal and Interest to the sum of 18877500 18Si7I were called In and applied to the sinking sink-ing fund contribution for the current fiscal year Notwithstanding THESE OPERATIONS of the Treasury Department representations repre-sentations of distress in business circles cir-cles net only continued bat increased and absolute peril seemed at hand In these circumstances the contribution to the sinking fuad for the current fiscal year was at ence completed by the expenditure of 2768423355 in the purchase of government oonds not yet due bearing 4 and 4K per cent interest the premium paid thereon averaging about 24 per cent for the former and 8 percentfor the latter In addition to this the interest account accruing during dur-ing the current year upon the outstanding out-standing bonded indebtedness of the government was to some extent anticipated antici-pated and the banks selested as depositories depo-sitories of the publie money were permitted per-mitted to somewhat increase their deposits de-posits While THE EXPEDIENTS thus employed to release to the people the money lying in the treasury served to avert immediate danger our surplus sur-plus revenues have continued to accumulate ac-cumulate the excess for the present year amounting in the first day of De oember to 5525887119 and estimated to reach the sum of 11300000 on the 30th of June next at which date it is expected that this sum added to prior accumulations will swell the surplus in the treasury to 140000000 There seems to be no assurance as-surance that with such a withdrawal from use of the peoples circulating medium our business community may not ia the near future be subjected to the same distress which WAS quite lately produced from the game canse and while the uactioas of our national nation-al treasury should be few and simple and while its feast condition would be reached I beUcYeby its entire disconnection discon-nection with < c o J lessly subtracted from the channels of trade there seems to be reason for the claim that legitimate means should be devised by the government to restore re-store In emergency without waste or extravagance such money to its place among the people aif such an emergency arises there now exists no clear and undoubted executive power of relief Heretofore the redemption of the 3 per cents only which were payable at the optioH of the government has afforded a means for the disbursement of the excess of our revenues but these bonds have all been retired and there are no bonds outstanding the payments of which we have the right to insist on The contribution con-tribution to the SINKING FUND which furnishes the occasion for expenditures ex-penditures in the purchase of bonds has been already made for the current year so there is no outlet in that direction di-rection In the present state of legislation legis-lation the only pretense of any executive execu-tive power to restore at this time any part of our surplus revenues to the people by its expenditure consists in the supposition that the Secretary of the Treasury may enter them and purchase pur-chase the bonds of the government not yet due at a rate of premium to be agreed upon The only provision of the law from which such a power could be derived is found in an appropriation appro-priation bill passed a number of years ago and it is subject to the supposition that it was intended as a temporary measure and limited in its application instead of conferring a CONTINUING DISCRETION and authority No condition ought to exist which would Justify the grant of power to a single official upon his judgment its necessity to withhold from orrelease to the business ot the people in an unusual way money held in the treasury and thus affect at his will the financial situation of the country and if it is deemed wise I to lodge in the Secretary of the Treasury Treas-ury the authority in the present juncture junc-ture to purchase bonds it should be plainly vested and provided as far as possible with such checks and limitations limita-tions as will define his official right aad discretion and at the same time relieve him from undue responsibility in considering the question of purchasing pur-chasing bonds as a means of restoring to circulation the surplus money accumulating ac-cumulating in the treasury It should be borne in mind that premiums must of course be paid upon SUCH PURCHASE that there may be a large part of these bonds held as investments which cannot can-not be purchased at any price and that combinations among holders that are willing to sell may unreasonably enhance the cost of such bonds to the government It has been suggested that the present bonded debt might be i retunded at a less rate of interest and the difference between the old and new securities paid in cash thus finding find-ing a use for the surplus in the treasury treas-ury The success of this plan it is apparent must be founded upon the volition of the holders of the present bonds and it is not entirely certain that the inducement which must be offered them would result in more financial benefit to the government I than the purchase of bonds while the latter proposition would REDUCE THE PRINCIPAL of the debt by actual payment instead of extending it The proposition to deposit the money held by the goVernment goVern-ment in the banks throughout the country for the use of the people is it seems to me an exceedingly objectionable objec-tionable principle as reaching too close a relationship between the operations oper-ations of the government and the business busi-ness of the ceuntry and too extensive a commingling of their money th us fostering fos-tering an unnatural reliaace in private business upon public funds If this scheme should be adopted it should only be done as a temporary expedient to meet an urgent necessity Legislative I Legisla-tive and executive effort should generally gen-erally be in the opposite direction and should have a tendency to divorce as much and as fast as can safely be done the Treasury Department from PRIVATE ENTERPRISES Of course it is net expected that unnecessary un-necessary and extravagant operations will be made for the purpose of avoiding avoid-ing the accumulation of an excess of revenue Such expenditure beside the demoralization of all j nst conceptions concep-tions of public duty whica it entails emulates a rexskle improvidence not in the least consistent with the mission mis-sion of our people 01 the high or beneficent ben-eficent purposes if our government I have Wmert it my duty thus to bring the knowledge ol my countrymen country-men as well aj ij L attention ot their representaiv i = to the responsibility of lei ilativ r1iAf < i for the gravity of our financial oituunuu The failure of Congress heretofore to provide against THE DANGERS which it was quite evident the very nature of the difficulty must necessarily necessa-rily produce caused a condition of financiai distress and apprehension since their last adjournment which taxed to the utmost all the authority I expedients within executive control con-trol and these appear now to be ex kausted If disaster results from the continued inaction of Congress the responsibility must rest where it belongs be-longs Though the situation thus far considered is fraught with danger which should be fully realised and though it presents features of wrong to the people as well as to the country is but u result growing out of a palpable palp-able and apparent cause constantly reproducing re-producing the same alarming circumstances circum-stances a CONGESTED NATIONAL TREASURY and a depleted monetary condition of the business of the country It need hardly be stated tbat while the present pres-ent situation demands a remedy we can only be saved from a predicament in the future by the removal of the cause One scheme of taxation by means of which this needless surplus is taken from the people and put into the public treasury consists of a tariff or duty levied upon importations from abroad and internal revenue taxes levied upon tie consumption of tobacco and spirituous and malt liquors It must be considered that none of these taxes relate to things subjected to internal revenue but are strictly speaking necessary and it so appears to be ne JUST CAUSE of complaint to the consumers of the articles and there seems to be nothing no well able to bear the burden without hardship to any portion of the people But our present tariff laws the various inimitable and illegal sources of unnecessary un-necessary taxation ought to be at tides imported and subjected to duty by precisely the sum paid for such duties Thus the amount of the duty measures the tax paid by those who purchase for use these imported articles arti-cles Many of these things however are raised or manufactured in our own country and the duties now levied upon foreign goods and products are CALLED PROTECTION to those home manufactures because they render it impossible for those of our people who are manufacturers to make these taxed articles and sell them for a price equal to that demanded de-manded for imported goods that have paid customs duty So it happens that while comparatively a few use the imported im-ported articles millions of our people who never use and never saw any of the foreign products purchase and use the same kind u ade in this country and pay therefor nearly or quite the same enhanced price which the duty adds to the imported articles Those who buy imports pay the duty charged thereon to the public treasury but the great majority of our citizens who buy domestic articles of the same class pai ray a sum at least approximately equal to this duty to the home manufacturers This reference to the operation of our TARIFF LAWS is not made by way of instruction but in order that we may be constantly reminded re-minded of the manner in which they impose a burden upon those who consume con-sume domestic products as well as those who consume imported articles and thus create a tax upon all our people peo-ple It is not proposed to entirely relieve re-lieve the country of this taxation It must be extensively continued as the source of the governments income and in a readjustment of our tariff the interests of American labor engaged in manufacture should be carefully considered con-sidered as well as the preservation of our manufactures It may be called protection or by any other name but relief from the hardships and dangers ot our present tariff laws should be devised with especial precaution against imperiling the existence of ourMANUFACTURING MANUFACTURING INTERESTS But this existence should not mean a condition which without regard to the public welfare or a national exigency must always insure the realization of the immense profits instead of moderately mode-rately profitable returns As the volume vol-ume and diversity of our national activities ac-tivities increase new recruits are added to those who desire a continuation continua-tion of the advantages which they conceive the present system of tariff taxation directly affords them So stubbornly have all efforts to reform the present condition been resisted by those of our fellow citizens thus engaged en-gaged that they can hardly complain of the suspicion entertained to a certain extent that there exists an organized combination all along the line to maintain main-tain their advantage We are in the midst of CENTENNIAL CELEBRATIONS and with becoming pride we rejoice in American skill and ingenuity in American energy and enterprise and the wonderful natural advantages and resquices developed by a centurys national growth yet wUien an attempt at-tempt is made to justify a scheme which permits a tax to be laid on every consumer in the land for the benefit of our manufactures manufac-tures quite beyond a reasonable demand de-mand for governmeatal regard it suits the purposes of manufactures and infant industries still needing the highest and greatest degree of favor and are that can be wrung from legislation It is also said that the increase in price ef domestic manufactures man-ufactures resulting from the PR > SBNT TARIFF is necessary in order that higher wages may be paid to our workingmen employed em-ployed in manufactories Ulan are paid what is called pauper labor In all we acknowledge the force of an argument argu-ment which involves the welfare and liberal compensation of oar laboriMjc people Our labor is honorable in the eyes of every American citizen and lies at the foundation of our development develop-ment It iiiantaled without affectation or flygserisies to the utmost regard The standard ef bur laborers life should not be I warred by that of another an-other cpnatry less favored and tft yare y-are entitled to their full share ef our advantages By the last census it is mode to appear ap-pear that ot the 1738200 of our population popu-lation engaged in all kinds of industries indus-tries 7670408 are employed IN AGRICULTURE iQloJOS in professional and personal service 24S7d of whom are domestic domes-tic servants and laborers while 1810 ti6 i 5 are employed in trade and transportation trans-portation and 38S7112 are classed as I employed ab manufacturing and mining min-ing For the present purposes however how-ever the late number given should be considerably reduced Without attempting at-tempting to enumerate all it will be conceded that there should be deducted de-ducted from those which it includes 375144 carpenters aid joiners 285170 milliners dressmakers and seamstresses seam-stresses 172126 blacksmiths 133756 tailors and tailoresses 107006 masons 76241 butchers 4139 bakers 22182 plasterers and 4801 manufacturing agricultural l imlle 6Il laving 2638 389 persons ainpioywl in manufacturing manufactur-ing industries as are claimed to be benefited in a aH1 mu TARIlK To these be appeal is made to save their employment and maintain their wages by refuciBg a change There shovld be no disposition to aasvrcr such suggestions sugges-tions by tee allegation that they are ia the Minority among those who labor and therefore should forego an advantage in the interest ef low prices for the majority Their compensation com-pensation as it may be affected by the I operations of tariff laws should at all i times be scrupulously kept in view and yet witb sntffit rofleefeieus < i they will not overlook the fact tnat they too have their wants and these of their families t9 simply from their earnings and that tae price ef the NEt t S3ARIE3 63 LIFE I as well as the amount of those wants will regulate the measure of their welfare wel-fare sad comfork but the reduction ol taxation demauded Should be se measured as to necessitate er justify neither the loss of employment by the I vorkugmaa nor the lessening of his wages and fcfce profit still reaaiaras to the Baaawftetarar after a Hceseary eadjHstment should famish no excuse for the saowSce of the interests ef his employers either their opportunity to work or the diminution ef their ompensatii Nor can the working manufacturers uHderstaadthat while So 1 high tariff is claimed to be necessary to allow the payment of remunerative Wages it certainly results in a very LARGE INCREABH forms he needs for the use of himself aud his family He receives at the desk of his employer his wages and perhaps before he reaches his home is obliged in a purchase for family use of anartIeie which embraces his own labor to return in the payment of the increasing price which the tariff permits the hardearned compensation compen-sation of many days of toil The farmer and the agriculturist who manufactures nothing but who pays the increased price which the tariff imposes upon every agricultural Im plem U upon all ne wears and upon all 1 i uses and owns except the increase in-crease of his flocks and herds and such things as his husbandry produces from the soil is invited to aid in maintaining maintain-ing the PRESENT SITUATION Mind he is told that a high duty on imported wool is necessary for the benefit of those who have sheep In order that the price of their wool may he increased They of course are not reminded that the farmer who has no sheep is by this scheme obliged in his purchase of clothing and woolen goods to pay a tribute to his fellow farmer as well as to the manufacturer and merchant nor is any mention made of the fact that the sheep owners themselves them-selves and their households must wear clothing and use other articles that they use at tariff prices and thus as consumers must return their sbare of this increased price to the tradesman I think it may be fairly assumed that a large proportion of the sheep owned by the farmers throughout the country are found in SMALL FLOCKS numbering from twentyfive to fifty The duty on the grade of imported wool which these sheep yield is ten cents tor each pound if of the value of 30 cents or less and 12 cents if of the value of more than 30 cents If the liberal estimate of six pounds be allowed al-lowed for each fleece the duty thereon would be 60 or 72 cents and this may be taken as the utmost enhancement ot its price to the farmer by reason of this duty Eighteen dollars would thus represent the increased price of the wool from twentyfive sheep and 36 from that of filty sheep and at present values this addition would amount to about onethird of its price If on its sale the farmer receives this or lens TARIFF PROFIT the wool leaves his hands charged with precisely that sum which in all its charges will adherE to it until it reaches the consumer When manu feured into cloth and other goods naterial for use its cost is not uu increased to the extent of the far its tariff profit but a further sum has been added for the benefit of the manufacturer under the operation of other tariff laws In the meantime the day arrives when the farmer finds it necessary to purchase woolen roods and material to clothe himself and family for the winter When he faces the tradesmen for that purpose he discovers discov-ers that he is obliged not only to return in the way of increased prices his tariff profit on the wool he sold and which then perhaps lies before him in a manufactured form but that he must add a CONSIDERABLE SUM thereto to meet a further increase caused by a tariff duty on the manufacturer manu-facturer Thus in the end he is aroused to the fact that he has paid upon a moderate purchase as a result ol the tariff scheme which when he sold his wool seemed so profitable an increase in price of more than sufficient to sweep away all the tariff profit he received upon the wool he produced and sold When the number of farmers farm-ers engaged in wool raising is compared com-pared wi h all the farmers in the country coun-try and the small proportion they bear to our population is considered when it L made apparent that in the case of a Uryc pirt of those who own sheep the benefit of the present tttiUff on wool is AN ILLUSION and when it must be conceded that Bite increase of the cost of living caused by such tariff becomes a burden bur-den upon those with moderate means and the poor the employed and unemployed unem-ployed the sirek and well and the young and old and that it constitutes a tax which with relentless grasp is fastened upon the clothing of everyman every-man woman and child in the land reasons are supported why the removal re-moval or reduction of this duty should be included in the revision of our tariff laws In speaking of the increased cost to the consumer of our home manafac tures resulting from a duty laid upon imported articles of the same description descrip-tion the fact is NOT OVERLOOKED that competition among our domestic producers sometimes has the effect of seeping the price of our products below be-low the highest limit allowed by such duty but it is notorious that this competition is too often strangled by combinations quite prevalent at times and frequently called trusts which have for their object the regulation of the supply and price of commodities made and sold by members of the combination The people can hardly hope for cewisiiiuratien in the operation I opera-tion of these selfish schemes If however how-ever in the absence of such combination combina-tion a healtuy and free competition reduces the price of any particular dutiable du-tiable article of home production below be-low which it might otherwise reach Barter oar urs2 laws and if with I such reduced price the manufactnr CONTINUES TO THRIVE I it is entirely evident that one thing has been discovered which should be carefully care-fully scrutinized in an effort to reduce taxation The necessity of combination I combina-tion to maintain the price of any commodity com-modity to the tariff point furnishes proof that some one is willing to accept I i ac-cept lower prices for such commodity and that such prices are remunerate and the latter price produced b aJjSff petition prove the same thing ± > where either of these conditions exists a case would seem to be presented f ran r-an easy reduction of taxation The considerations which have been presented teuching our tariff laws are intended only to enforce an earnest recommendation that the surplus revenues rev-enues of the government be prevented by the reduction of our customs duties and at the same time to emphasize a suggestion that is accomplisking this purpose we may discharge a DOUBLE DUTY to our people by granting to them a measure ol relief rom tariff taxation in quarters where it is most seeded ana from sources where it can be most fairly and justly accorded Nor can the presentatioa made of such consideration consid-eration be with any degree of fairness fair-ness regarded as evidence cK un I I ness toward our mannfacturin These interests constitute a lea ding and most substantial element of om national greatness and furnish the proof of our countrys progress that if lU the emergencythat presses upon us our manufacturers are asked to surrender sur-render something for the public good and to avert disaster their patriotism as well as a GRATEFUL RECOGNITION of the advantages already afforded should lead them to be willing to cooperate co-operate No demand is made that they shall forego all the benefits of governmental govern-mental regard but they cannot wait to be admonished of their duty as well as their enlightened selfinterest and safety when they are reminded of the < fact coat a financial panic and collapse to which the present condition tend afford no greater shelter or protection to our manufacturers than to our other important enterprises The opportunity op-portunity for safe careful and deliberate de-liberate reform is now afforded and none of us should be unmindful of a time when an abused and irritated people heedless of those who have r sisted timely and seasenable relief may insist upon a radical and sweeping rectification of their wrongs The dil ficulty attending a wise and fair revision re-vision of our tariff laws is not underestimated under-estimated It will require on the pan of Congress GREAT LABOR and care and especially a broad and national contemplation of the subject and a patriotic disregard of such local and selfish claims as are unreasonable and reckless of the welfare of the entire en-tire country Under our present laws more than 4000 articles are subject to duty many ot these do not In any way compete with our own manufacturers and many arehardly worth attention as subjects of revenue A considerable reduction can be made in the aggregate adding them to the free list The taxation of luxuries presents no features of hardship hard-ship but the necessaries of life used and consumed by all the people the duty upon which adds to the cost of living in every home should be greatly cheapened The radical reduction of the duties imposed upon raw material used in manufactures or its free importation im-portation is of course an important factor in any effort to reduce the price of these necessaries It would not only relieve them from the INCREASED COST caused by the tariff on such material but the manufactured product being thus cheapened that part of the tariff now laid upon such product as a compensation com-pensation to our manufacturers for the present price of raw material could be accordingly modified Such reduction or free importation would serve besides to largely reduce the revenue It is not apparent how such a change can have any injurious affect upon our manufacturers on the contrary con-trary it would appear to give them a better chance in foreign markets with the manufacturers of other counties who cheapen their wares by free material ma-terial and thus our people might have the opportunity of extending their I sales beyond the limits of home consumption con-sumption saving them from the depression I de-pression interruption in business and i loss caused by a glutted domestic market and affording their employes more certain and STEADY LABOR with its resulting quiet and contentment content-ment The question thus imperatively presented for solution should be approached ap-proached in a spirit higher than partisanship par-tisanship and considered in the light of that regard for patriotic duty which should characterize the action of these intrusted with the weal of a confiding peopl But the obligation to declared I de-clared party policy and principle is not Wanting to urge prompt and effective action Both of the great political parties now represented in the government govern-ment have by repeated and authoritative authori-tative declarations condemned the condition of our laws which permit the collection from the people of unnecessary un-necessary revenue and have in the most solemn manner promised us correction and neither as citizens or I I partisans are our countrymen in a mood to condone the DELIBHRATE VIOLATION I i of these pledges Our progress toward to-ward a wise conclusion will not be improved im-proved by dwelling upon the theories 1 I of protection and free trade This savors too much of bandying epithets I I It is a condition which confronts us a I not a theory Relief from this condition I con-dition may involve a slight reduction of the advantages which we award our home productions but the entire I i withdrawal of such advantages should not be contemplated The question of free trade is absolutely irrelevant and the persistent claim made in certain quarters that all efforts to relieve re-lieve the people from unjust and unnecessary taxation are schemes of socalled free traders is mischievous and far removed from any consideration considera-tion for the public good The simple and plain duty which we owe the people peo-ple is to toREDUCE REDUCE TAXATIOX to the necessary expenses of an economical econ-omical operation of the government and to restore to the business ol the country the money which we hold in the treasury through this perversion of governmental powers These thin scan s-can and should be done with safety to all our Industries without danger to the opportunity for remunerative active ac-tive labor which our workingmen need and with benefit to them and all our people by cheapening their means of subsistence and increasing the measure of heir comforts IN CONCLUSION The Constitution provides that the President shall from time to time give to the Congress information of the state of the Union It has been the custom of the executive in compliance compli-ance with this provision to annually exhibit to the Congress at the opening sf its session the general condition outitry arid to detail with sons partleulars the operations of the different dif-ferent executive departmeats It would be especially agreeable to follow fol-low this course at the present time and to call attention to the valuable accomplishments of these departments luring the last fiscal year but I am so much impressed with the paramount importance of the subject to which his communication has thus far been devoted that I shall forego the addi ioH of any other topic and only urge upon your IMMEDIATE CONSIDERATION the state of the Union as shown in the present condition of our treasury and oar reaenl fiscal situation upon which every element of our safety and I prosperity depend The reports ef the heads of departments which will be submitted contain full and explicit information touching the transactions of the business entrusted to neon and y deem advisable I ask for these reports re-ports and recommendations the deliberate de-liberate examination and action of the legislative branch of the government There are other subjects not embraced in the departmental reports re-ports demanding legislative consideration considera-tion and which I should be glad to submit Some of them however have been earnestly presented in previous messages and as to them I beg leave to repeat f PRIOR RECOMMENDATIONS As the law makes no provisions for any report from the Department of State a brief history of the transac tions ot that important department together with other matters which It may hereafter be deemed essential to commend to the attention of the Congress Con-gress may furnish the occasion for a future communication GROVER CLEVELAND Washington Dec 61887 |