Show CARLISLE AND THE CURRENCY Secretarys Annual Report is Received by the Congressmen Con-gressmen COMPARISONS ARE GIVEN Strongly Favors the Retirement of Greenbacks Revenue Law Jforr in Force Will He Believe Tinder formal Conditions tions Yield Ample Means for the Support of the Pnhlie Service Jfoiv Estahlished Defects in the Laws Pointed Out AVhj Gold Was Wanted The Suggestions of the Secretary W ASIGO Dec 16 Secretary p i Carlisles annual report of tho state of finances was sent to Congress today I shows that the revenues of the government from all sources during he last fiscal year amounted to 390 373203 The expenditures during the xime period aggregated 433178826 leaving a deficit for the year of 42 J 405223 As compared with the fiscal year 1S91 the receipts for 1895 increased S 17570705 although there was e de jrease of 11329981 in the ordinary expenditures ex-penditures which is largely accounted J for by a reduction of 111134053 on s gar bounties The revenue for the current fiscal year are estimated upon the basis of existing laws at 431907 107 and the expenditures at 448007 expediures 3t 4801 107 which will leaven deficit of 17 JOOOOO For the coming fiscal year ending end-ing June 30 1897 the secretary esti mates the receipts at 464793120 and the expenditures at 457884193 or an estimated surplus of 6908926 The secretary retary states briefly the facts concern ng the issues of bonds during the year i he particulars of which have already a oeen reported to Congress 1 Bering Sea Uuincsf The report shows that the Behring sea patrol fleet during the last season boarded and examined Tunetyfour vessels eels fiftyfour of which were engaged in sealing The number of skins ac tuaily counted was 31216 Many of tho wessels in the revenue cutter service the secretary says are very old and nearly unseaworthy and he recommends recom-mends that four new ones be provided to take the pace of the McLane the i Crawford the Sward and one for the port of New York The secretary says that the govern ment of Great Britain has refused to enew the sealing regulations agreed upon for the season of 1894 providing for thfe sealing up of arms which leaves the question of the possession and use of arms to be determined wholly by the Paris awards The total catch of seals at sea m the award area during the last season was 56291 as compared with 61838 fo rthe season of 1S94 The catch on the seal islands was 15000 A careful count of all of the seals on the islands Past year makes the number e little over 200000 a decrease de-crease of over onehalf since 1S91 T secretary devotes a large share of lila discussion of the conditions report to a discusion coniio of the treasury and the currency in the course of which he makes an exhaustive exhaus-tive argument in favor of the retirement retire-ment of the greenbacks Vo Additional Taxation The cash balance in the treasury on the first day of December 1895 he says was 177406386 being 98 72420 in excess of the actual gold reserve serve on that day and 77406386 in excess of any sum that 1 would be necessary to use for replenishing that fund In case the secretary should at any time be able to exchange currency cur-rency for gold There is therefore no elaton to doubt the ability of the government to discharge all of its current cur-rent obligations during the present fiscal year and have a large cash balance at its close without imposing additional taxation in any form upon the people but I adhere to the opinion heretofore expressed that the secretary of the treasury ought always to have authority to issue and sell or use in the payment of expenses short time bonds bearing a low rate of interest to supply casual deficiencies in the revenue With a complete return to the normal nor-mal business condition of the country and a proper legislative and executive execu-tive supervision over expenditures the revenue laws now In force will in my opinion yield ample means for the support of the public service upon the basis now established and upon the assumption which seems to be justi Vied that the progress now being made toward the restoration of our usual state of prosperity will continue without with-out series interuntion it is estimated that there will be a surplus of nearly 7000000 during the fiscal year 1S97 During the fiscal years 1891 and 1895 Durn the ordinary expenditures of the government gov-ernment have been decreased 27282 656 as compared with the fiscal year 1893 and it is believed that with the cooperation of Congress further reductions re-ductions can be made in the future without impairing the efficiency of the public service Why Gold Went Continuing he says The large withdrawals with-drawals of gold in December 1894and January and the earl part of Febru almost entirely to ary 1893 were due t were a feeling of apprehension in the public feelng mind which increased in intensity from day to day until it nearly reached the proportions of a panic and it a evident evi-dent to all who were familiar with the situation that unless effectual stress was promptly taken to check the growing grow-ing distrust the government would be compellEtcl within few days to suspend sus-pend gold payments and drop to a de i i prEdate silver and paper standard I More than 543000000 of the amount withdrawn during the brief period last < mentioned was not demanded for export ex-port but was taken out by people who had become alarmed on account of the J critical condition of the treasury in its relations to the currency of the country j try Tfne purchase of 3500 ounce o gold followed it being in the contract that not less than onehalf of the gold was r to be procured abroad but alter a large part of the gold had been furn ishecl from aibnoosd the secretary In oider to prevent disturbance in the t rates of foreign exchange at a critical t period and avoid a < condition which t < woulcj fore gold exports and consequent 0 conse-quent withdrawals fro the treasury S acquiesced in a due from the literal terms or the contract that on te c half of the coin should be procured abroad and accepted deposits of golden r gold-en held in this country to complete the delivery Ordinary prudence dot do-t snanded that the success of the plan mane tat treasury against withdrawals drawals should not be endangered by 4 Insisting a strict compliance with 1nsitg upon strct compIac all the details of the cart especially especi-ally a the government could sustain no less and the whole amount of gold stipulate for was secured J Benefit of Bonds The amount of bonds issued under this contract was 62315400 and the 6o116 44 amount of gold received w 651624 The beneficial effects of this transaction trans-action the secretary says were felt Immediatelv not only In this country coun-try but in others having commercial relations with us Confidence in our securities he continues was at once restored and the encouraging indications of increasing in-creasing prosperity still continues t and i is reasonably certain that if our progress is not checked by a repetition of large demands upon our L resources or by G failure io meet the just expectations of the people in respect spect to the reformation of our fiscal system we are entering upon an era of material growth and development not surpassed in our history Tile T safety of the existing situation is however constantly menaced and our further progress toward the complete prgess confidence and prosperity f pros-perity is seriously impeded = by the defects de-fects in our currency laws and the 1 doubt and uncertainty still prevail ing in the public mind and especially abroad concerning the future monetary r mone-tary policy of the government Unless r these defects in ou laws are remedied c and these doubts are removed there can be no satisfactory assurance of I immunity from periodical disturbances L growing out of the obligations which c the government has been compelled to I L assume in relation to the currency Treasury Kotos Our past experience with the United r States notes and the treasury notes ia clearly shown that the policy of k attempting to retain these obligation t of the government permanently a apart > a-part of our circulating medium and to redeem them in coin on presentation presenta-tion and reissue them after redemption redemp-tion must be abandoned or that such means must be at once provided a will have a tendency to facilitate the efforts of the secretary to accumulate and maintain 3 coin reserve sufficient f In amount to keep the public constantly con-stantly assured of the stability of our entire volume of currency and of our ability at all times to preserve equality equal-ity in the exchangeable value of its various parts The latter alternative which in my opinion i adopted would not afford the relief demanded by the existing situation necessarily involves L in-volves such large increases of the interest in-terest bearing public debt from time t t time and would Impose permanently permanent-ly upon the government such erroneous errone-ous and Inappropriate duties that it ought not to be favorably entertained except a a last resort in the struggle for the maintenance of public faith and the reservation of the inviolabil ity of private contracts inviolabi The Ultimate Result The issue of iborids he says to procure coin for the reserve which is the only effectual method now available under the law will unless conditions which have already been developed by the present policy are radically changed ultimately result in the creation crea-tion of e pub < debt muchi larger tan would tie required to retire and cancel the notes and the annual interest Charge would be much greater than it would be necessary to Incur oa anew a-new issue of bonds adapted to the present circumstances of the government govern-ment and the well known and te rl preferences cf investors If however investrs I oweer an attempt is to be made t keep the United States notes and treasury notes permanently pr manently In circulation < by reissues after redemption and the government is to be permanently charged with the duty of sustaining the value of all our currency p and coin alike the conclusion con-clusion canot be avoided that the policy of Issuing bonds for the accomplish rent of these purposes must also become be-come peririan < ent and such additional powers must be conferred upon the secretary sec-retary a will enable him to execute the laws relating to these subjects with the least possible disturbance of the business affairs of the people and the least possible charge upon the I treasury Zhfl I It Shonlu Cease I am thoroughly convinced that this policy ought not to < be continued but that the United States notes and treasury treas-ury notes Should be retired from circulation cir-culation at the earliest practicable day and that the government should be wiholly relieved from the irespomsibility people of providing a credit currency for the I would be difficult to devise a more inconvenient expensive or dangerous system than the one now in operation opera-tion under the laws ton te providing for the issue redemption1 and reissue of legal tender notes by the government legl There has never been a time since the close of the war the secretary says when the gradual retirement and cancellation of the United State notes would not have been a benefit to the country nor has there ever been a time when the issue of ad ditional notes of the same character would not have been Injurious to the country countI our legal tender notes were retired re-tired there is abundant reason to believe be-lieve that every large amount of gold which has been excluded from the country by the excessive use of silver and paper in our circulation would promptly return to take its place in our currency and constitute a permanent perma-nent part of our medium of exchange Can Be Xo Deprivation A country having such extensive trade relations with other nations as we now enjoy cannot be deprived of its proper share of the worlds stock of money and if It adopts and adheres to a sound and stable currency system at home it will get the best money the world has because no other kind is ever used in international transaction As long as the government leaves our people reasonably free to trade abroad and does not make any kind of paper legal tender In the payment of debts i cannot materially or injuriously contract the currency by the withdrawal with-drawal of its own notes The retirement retire-ment and cancellation of the legal tender notes would not necessarily produce any contraction of the circulation circu-lation and i such a result should follow fol-low and continue for any considerable period it would be a demonstration of the fact that the volume of currency previously existing was not needed in the business of people for whenever the volume is reduced below the actual requirements of trade the deficiency will be supplied either from abroad in exchange for our roducts and securities se-curities or by the banks at home or both The United States notes and treasury notes Issued in payment for silver bullion together amounting at the beginning to 502612018 have been used and are still being used to withdraw with-draw gold from the government whenever when-ever our own people or the govern mont or peoples of other countries see proper to demand it for any purpose pur-pose and under the laws now existing exist-ing the secretary of the treasury has no means of complying with these demands de-mands except by the issue and sale of interestbearing bonds under the act of January 1 1875 or by the purchase pur-chase of gold coin with bonds or notes of the United States under section 8700 of the revised statutes Xo Cleans of Defense a Against these demands the treasury 4 ury has cue available means of defense except at the sacrifice of the public credit and the immediate depreciation o tlie entire volume of our currency iiorig adherence to a false system has Ito agreat extent undermined our e Tiontel credit so fa a it is relatec t the Taaiiytenance of a sound aiiii f im tad t-ad ifJ econ j 7 r h irterely propped up by frail and temporary i pomry supports No surplus revenue however large could extricate us from our present difficulties or give assurance assur-ance of safety in the future unless it should be required to lie paid in gold under a system which would exempt the government from the obligations to furnish the gold when demanded to be used in making the payments and it is scarcely necessary to suggest that such a system necesar impossible as long as the United States notes and treasury notes are kept ins circulation and are redeemable redeem-able in gold by the government itself on presentation An Erroneous Idea The opinion seems to prevail to some extent that the mere possession of a surplus ini the treasury would prevent withdrawals of gold and thus render the issue of bonds for the protection of the reserve unnecessary but this view reere unneces of the subject is founded in > my judgment judg-ment unon an entire misconception of the causes that have produced the cause tat withdrawals Unless I am wholly mistaken mis-taken they have very little if any relation lation to the amount of money held by the government or to the amount of money the government hbs ability to but they raise toy taxation or otherwise relate primarily and almost exclusively rlte ly to the character of money that it might be able to supply and keep in circulation In other words it was apprehension circultion to the kind of money to prehension te knd be used and not as to the kind of money on hand that brought our securities se-curities hack from abroad for sale caused foreign investors to withdraw causd forig foreign creditors to their capital ad forign crediors compelled our debts and collect their compeled own people to suspend or contract their business operations and thus diminish the incomes of employes and greatly of stop the waxeS reduce labor or entirely w Caused by Distrust withdrawals have been made Large uIge wihdr3wals because during the last three years simply cause gold was wanted and the desire de-sire to secure gold was due to a growing grow-ing distrust of the other kinds of currency in circulation and not at all to any apprehension that the government govern-ment would not be able to discharge all its obligations in some kind of paper pa-per al or coin When the receipts for customs consisted very largely of gold as was the case prior to July 1 1892 1S defective currency before the results of our defectve rency system had been fully developed devel-oped a surplus revenue enabled the I treasury to pay out gold without disturbing dis-turbing the reserve and besides there was at that time no great demand de-mand for gold by the presentation of notes for redemption and there would in therefore have been no difficulty maintaining the reserve even if there had been no surplus in the treasury but the conditions have entirely changd and an entirely different policy pol-icy is demanded to meet the situation situa-tion now existing With or without a surplus revenue the government can now procure gold only by negotiating loans or making purchases under the statute and this state of affairs which is the natural result of causes still operative is almost certain to continue until the causes themselves ere removed But One Safe Way There is but one safe and effectual way the secretary says to protect our treasury against these demands and I that is to retire and cancel the notes which constitute the only means through which the withdrawals can be made Many partial and temporary tempo-rary remedies may be suggested and urged with more or less plausibility hut this is the only one that will certainly cer-tainly remove the real cause of our troubles and give assurance of permanent per-manent protection against their recurrence i recur-rence in Iflie future I This can foe most successfully and I economically accomplished toy authorizing authoriz-ing the secretary of the treasury to issue from time to time bonds payable in gold bearing interest at a rate not exceeding 3 per cent C annum and having a long time to run and to ex cfhamge the bonds for United States notes and treasury notes upon suclh terms as may be most advantageous to the government or to sell them abroa for gold whenever in his judgment judg-ment i i aidvisaible to do so and to use the gold thus obtained in redeem reeem ing the outstanding notes Under the operation of such a plan if judiciously executed there could be no improper contraction of the circulation because if it should at any time be found that other forms of currency were not being supplied to the extent required exchanges ex-changes of bonds for notes would be suspended and gold would be procured by selling the seauiritfies abnaad In old r to further facilitate the substitution substitu-tion of other currency for the retirement retire-ment of legal tender notes the national banks should be authorized to issue notes equal in amount to the face value of bonds deposited to secure them and the tax on their circulation should be reduced to onefourth of 1 e cent per annum j C J J As Part of the Plan bf As ia part of the plan for the retirement re-tirement and cancelaition of the legal tender notes the treasury Should be relieved from the Responsibility for the redemption of national bank notes except ex-cept worn mutilated and defiled notes and the notes of failed banks and each asoitan sthciuld be required to redeem re-deem its circulation at its own office and at agencies to be designated by the comptroller of the currency as was the case prior to the passage of the act of June 3 1S94 or if this is not considered expedient and the present system of current redemption by the treasury is continued the secretary should have the powelr after a future date to be fixed in the law to require the banks to keep their 5 per cent redemption fund in gold coin and to deposit gold coin for the withdrawal of bonds whenever circulation is to be permanently surrendered or reduced The secretary also favors the passage pas-sage of a law allowing national banks to establish branches in small towns with a view to bringing them closer coser to the people in parts of the country remote from large towns and cities by which their usefulness would be greatly enhanced The secretary in closing his report says tfaat it is not probable that any plan for the permanent retirement of United States notes and treasury notes will b adoped that will not require considerable time for It complete execution exe-cution and he therefore urges upon Congress the propriety of prohibiting any further issues of such notes or nt national banks of less denominations than ten dollars thus making room in the circulation for silver coins and silver certificates of small denominations denomina-tions This he says would increase their use among the people and us te prevent pre-vent their frequent return to and accumulation ac-cumulation in the treasury |