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Show TREHSURY WILL SHOW DEFICIT II JUHE, 1818 Secretary McAdoo's Annual Report Presented to Congress; Con-gress; Confidence for Future Expressed. WASHINGTON. )pr. fi. --Secretary Mc-Adoo Mc-Adoo H a n n i i;i I repo: I of the ko .'eminent' rinan-f. p; rSMit -d in out; i ess today, P.Hl Utlii tcfj I ! i ;i t (lie fisr,- vc;t r P ! I d i llf,' .Iniift "0. 1 r 1 7 . nil! show a balance of $H.:,.mm,iji.f) j,i Kf!K-ial fund, but that the- riKures ti yea r !at .-r June 'in, 1 ; L Js . will Hhfiw a (Iff i' 'it in Hie general fund uf SlXa.inVJ.OM. Preliminary estimates place Hie cost of condu.-l Ini; ( !in -ovennm-nt for the com-in-,' f i-s.-M t year mis, exclusive of the postal servi-ft, which is expected to be Mill'-susl ,-Li ii lug, and o( her ded net ions, at 1 1 . 27 s.uJ 1,00. The ordinary receipts for the fiHcal year Mils he estimates at ooO.OOO, which is SL', 471,01)0 leys than the est imi.'i I fil ex pense. Kstiinatirs of laie c.vpendil nres for national na-tional defense cany Hie estimated outlay by md Hie r-m I ina I f-d Ii n'niiic, For the fli-i'iil i-ar put!, now draw I up lo a r 1 i e . the f-.-rretary reports Kieat prosper it y and e presses grea t est confidence confi-dence fur I lie future. "On ring t iie past year." the secret ;i r- says, "the prosperity which set In so strniiK'.v durhiK tlie fiscal year i t ' I ," lias kimwu in si remit h and volume vol-ume and is now widely diffused throughout through-out the 1'iiiU'd States. Kundanient.il economic conditions have never been more sound. In nil lines nf Industry efficiency of ort-'H niza t Ion and prod net Ion have reached the highest point in the country's history. General confidence in the future, healthful enterprise and development have been marked characteristics of the year. Strong Financially. "The, finnncial slrength of the Vnited Stiles - the greatest in our history---gives us h commanding position in world finance. fi-nance. We have been transformed from a debtor into n creditor nation. On November No-vember 1. 101 ri. the stock of gold coin and hul lion in the I'm ted States was estimated at J ",7fni,niiirt7ti. an increase of $7H,i)!t7,M)4 in the, past sixteen months.' This is the largest stock of gold ever held in the I'nlted States or in any other; country in the world. Through the op- ; era (tons of the federal reserve system and without abundant supply of gold as a basis, the credit resources of the United i Utales have become more than sufficient for home demand, and we have been able to finance our great domestic and foreign t rade wit lion t st ra i n a nd to ex l end vast nmounts of credit to oilier nations throughout the world. "The- experience of the past two years has brought into slrong relief the value of the federal reserve system. It is not too much to y: y that our great prosperity could not exist without it. The usefulness useful-ness of the s si em has been broadened recently by the amendatory act of September Sep-tember 7, 1!K. which renders it more attractive at-tractive to member banks and increases the scope find services of the federal reserve re-serve banks. One to Him transference nf vault and other reserves to federal re-servo re-servo banks, authorized by the original art and ;i niendat'ry a-t, the resouivs of sitd banks are now more than $ti"n'i.nfW),-0tM $ti"n'i.nfW),-0tM while t he total reserves h"Ul are over S-hiVffi.On, a nd. In addition, more than $J:;i.i.an(ifOtHl 's held by federal reserve re-serve agents as si'C'ua i seeuri l-" nun i nst f.'deral reserve notes. A bom one-fourth of the country'-- slock, of gold Is thus mobili.t'd In the hands of the. ledeval reserve re-serve batiks and agents. Federal Reserve Banks. "The increasing strength and efficiency of Hip federal reserve banks have enabled them to enlarge their dire.-t service to the business community through the introduction intro-duction of a definite and comprehensive system for the par clearance of checks Hi roue ho ut the country. "Rates of discount at federal reserve banks have cont i lined low throughout the ear. and most of their open-market paper, consist 1 ng largely of accept a nres growing out of foreign trade, lias been taken below a ' per cent basis. Fates of interest throuerhont the country have been red need and stabilized with grea t advantage to the business of the country. "It would have heen impossible to finance fi-nance our vast domestic and forcien trade without the facilities provided by Him federal fed-eral teserve system. Not only has it met the normal and extraordinary needs or hustness, but it has established confidence confi-dence securely. Business lias been able to go f.-rward without apvroheusion and Hie several crises which the country hate faced in its International relations during the past two years have been accompanied hv no di -i in baneep and iia 'e cas-jd not cen a trcnior in the financial world. Trie er'jps of :, and i:t' wnre financed without dhTir-uity and to tiie great advantage ad-vantage of Hie farmers, and the Industrial Indus-trial f roi ibles which at one I line seemed imminent, bei-ause of the threatened lail-w;i lail-w;i v si rike last sum me r. were not ac-onmpHnhd ac-onmpHnhd I iv the slightest financial tiii-easlness. tiii-easlness. Ilapr.ily. Hie country has been at peare and business and enterprise hne had the largest op; ort im 1 1 y for favoi able rle el'ipment under the nin.-;t auspicious conditions. "If we make intelligent use of our great power and exceptional financial resources, we can cope successfully with any conditions condi-tions the future may develop." Feature of Report. One of the features of the report' is a discussion of present methods of constructing con-structing public buildings. "I am convinced." says the secretary, "that the methods pursued hy the con- gr.ss for the past fifteen years of pro- 1 viding federal buiidirms through so-called omnibus-public-building bills have resulted re-sulted in the const ruction of many public pub-lic buildings in small towns and localities locali-ties where they are not needed and at a cost which is clearly unjustified by any actual reMuIr ements of the communities In which they are erected. The conclusion conclu-sion is irresistible that authorizations for public buildings in these small communities communi-ties are too frequently dictated hy local reasons and wi tpout regard to the best interests of the government. The most serious aspect is this: The annual onera-t onera-t ion and maintenance of these build lues Impose on the treasury a permanent and constantly increasing burden. "( 'ommon sense and business judgment judg-ment would seem to demand that structures struc-tures for the transaction of government business should be authorized only in localities lo-calities where they are imperatively needed, and that buildings should not be erected where no public necessity can be shown. This result can be accomplished in- divorcing the public-building question from all local or political considerations and authorizing no public buildings until a t horouch and intelligent in vest i gat Ion of each proposed building or project has been made by this department and a full report thereon has been submitted to congress. If such reports were followed fol-lowed hy the introduction and passage I of separate measures to cover each propped pro-pped building pro.iect the abuses and evils nf the omnlbus-bill method would be eradicated." War Risk Insurance. The federal war risk insurance bureau. Mr. McAdoo says, should he extended a year to September 2. KHS. since congress might not lie in session next i-epiem'oer and it would he impossible then to continue con-tinue the work if the Knropean war is still in progress, and serious injury to; American business might result. The re- port says that up to November 17 'nearly1 Win) podejes were written by the bureau, with a total risk of more than 14,610,-aim 14,610,-aim and losses amounting to $So3,024. Premiums Pre-miums amounted to 3. 1 4 li .52. In speaking of customs, revenues, which increase.! about ?:;,400.iVhi over the pre-i pre-i vim is year, the secretary says the Kn-I Kn-I ropean conflict is still interfering with such receipts. "He fore the breaking out of the Knropean Kn-ropean war." savs Hie report, "the amount of the collections Indicated clearly clear-ly that under norma! conditions the present pres-ent tariff will produce all the revenue It was esUmatecl it would produce at the time ir was drawn, and since the war the receipts under the tariff bill have heen all that could be expected under the present pres-ent conditions." Mr. McAdoo points out that for th year the value of imports was about I $4 s 4.000.000 greater than the. - previous ' year and those of exports 2,708,589,310 ! greater. 1 ('oneress is asked to amend the nnti-! nnti-! narcotic aw, in view of the supreme ' court's interpretation of the clause relating relat-ing to drugs in possession, and to pro-j pro-j vide funds to care for drug addicts through government treatment. : "To cur off suddenly the supply of . drugs without curing the addict of his cravings or making any provision for the , amelioration of his sufferings," says the I report, "is not only inhumane, but en-I en-I courages evasions of the law." t Appropriations are asked to enable the ! public health sen ice to prosecute In-j In-j vestiuation of infantile paralysis and for ; the. aviation section of the coast guard, j authorized, but given no funds, by con- J The report concludes with a resume of l operations of the various bureaus in the treasury department. |