Decatur Democrat, Volume 38, Number 38, Decatur, Adams County, 7 December 1894 — Page 3

' TO CONGRESS. President Cleveland Sends Recommendations on Affairs of State. FEATURES OF THE MESSAGE. New Financial Scheme Unfolded and Heartily Indorsed. WHAT HE SAYS OF THE TARIFF. Comprthtnilre Review of Relations With Foreign Powers and a Resume of the Reports Submitted by the Various Departments—Additional Warships Recommended and a Postoffice Reform Indorsed. Message to the Congress of the United States: The assemblage within the nation’s legislative halls of those charged with the duty of making laws for the lieneflt of a generous and free people impressively suggests the exacting obligation and inexorable responsibility involved in their task. The threshhold of such labor is now to be undertaken by the congress of the United States, and in the discharge of an executive duty.enjoined by the constitution, I submit this communication, containing a brief statement of the condition of our national affairs and recommending such legislation as seems to me necessary and expedient. OUR FOREIGN POLICY. Recent Dealings With Other Power* Given Brief Review. The history of our recent dealings with other nations and our peaceful relations with them at this time additionally demonstrate the advantage of consistently adhering to a firm but just foreign policy, . free from envious or ambitious national schemes and characterized by honesty. Reference is made to the American exhibit at the Antwerp exposition; the president’s endeavor to impress upon Belgium the needlessness and harmfulness of restrictions upoif importations of American food products; the termination of civil war in Brazil, attention being called to the part of watchfulness played by our navy. On Chinese and Japanese affairs the message says: On March 17 last a new treaty with China, in further regulation with emigration. was signed at Washington, and on Ang. 13 it received the sanction of the senate. Ratification on the part of China and formal exchange are awaited to give effect to this mutually beneficial convention. A gratifying recognition of the uniform impartiality of this country toward all foreign states was'manifested by the coincident request of the Chinese and Japanese governments that the agents of the United States should, within proper limits, afford protection to the subjects of ■the other during the suspension of diplomatic relations due to a state of war. This delicate office was accepted, and a misapprehension which gave rise to the belief that in affording this kindly unofficial protection our agents would exercise the same authority which the withdrawn .agents of the belligerents had exercised was promptly corrected. Although the war between China and Japan endangers no policy of the United States, it deserves our gravest consideration, by reason of its disturbance of our growing commercial interests in the two countries and the increased dangers which may result to our citizens domiciled in the interior of China. Acting under a stipulation in our treaty with Corea (the first concluded with a western power) I felt constrained at the beginning of the controversy to tender our good offices to induce an amicable arrangement of the initial difficulty growing out of the Japanese demands for administrative reforms in Corea, but the unhappy precipitation of actual hostilities defeated this kindly purpose. Deploring the destructive war between the two most powerful of the eastern nations, and anxious that our commercial interests in those countries may be preserved and that the safety of our citizens there shall not be jeopardized, I would not hesitate to heed any intimation that our friendly aid for the honorable termination of hostilities would be acceptable to both belligerents. Relations with France are referred to as of a kindly nature and the German prohibition against American live stock and fresh meats is thus referred to: Germany’s Inhibition. It is hoped that Germany will soon become convinced that the inhibition is as needless as it is harmful to mutual interests. The German government has protested against that provision of the customs tariff act which imposes a discriminating duty of MO ofl cent a pound on sugars coming from countries paying an export bounty therefor, claiming that the exaction of such duty is in contravention ■of articles 5 and 9 of the treaty of 1828 with Prussia. In the interests of the commerce of both countries, and to avoid even the accusation of treaty violation,.! recommend the repeal of so much of the statute as imposes that duty, and I invite attention to the report of the secretary of state j containing a discussion of the questions ' raised by the German protests. The Bering Sea arbitration is reviewed and the statement made that an . understanding had been reached for the payment by the United States of $425,000 .in satisfaction of all claims for damages. I am convinced that a settlement upon the terms mentioned would be an equitable and advantageous one, and I recommend that provision be made for the prompt payment of the stated sum. The boundary of British Guinea still remains in dispute between Great Britain and Venezuela. Believing that its early settlement on some just basis alike honorable to both parties is in the line of our established policy to remove from this hemisphere all causes of difference with powers beyond the sea, I shall renew the efforts heretofore made to bring about a restoration of diplomatic relations between she disputants and to induce a reference to arbitration, a resort which Great Britain ho QQUipiAROUAIy tftYOlß In principle Mid

respects in practice, and which is earnestly sought by her weaker adversary. Hawaii. Since communicating the voluminous correspondence in regard to Hawaii and the action taken by tHe senate and house of representatives on certain questions submitted to the judgment and wider discretion of congress, the organization of a government fav place of the provisional arrangement which followed the deposition of the queen has been announced, with evidence of its effective operation. The recognition usual in such cases has been accorded the new government. Under our present treaties of extradition with Italy miscarriages of justice have occurred. owing to the refusal of that government to surrender its own subjects. Thus far ear efforts to negotitiate an amended convention obviating this difficulty have been unavailing. Apart from the war in which the island empire is engaged, Japan attracts increased attention in this country by her evident desire to cultivate more liberal intercourse with us and to seek our kindly aid in furtherance of her laudable desire for complete autonomy in her domestic affairs and full equality in the family of nations. The Japanese empire of today is no longer the Japan of the past, and our relations with this progressive nation should not be less broad and liberal than those with other powers. Good will, fostered by many interests in common, has marked our relations with our nearest southern neighbor. Peaqe being restored along her northern frontier, Mexico has asked the punishment of the late disturbers of her tranquility. There ought to be a new treaty of commerce and navigation with that country to take the place of the one which terminated 13 years ago. Bluefields Disturbances. Prominent among the questions of the year was the Bluefields incident, in what is known as the Mosquito Indian strip, bordering on the Atlantic ocean and within the jurisdiction of Nicaragua. By the treaty of 1860 between Great Britain and Nicaragua ti e former government expressly recognized the sovereignty of the latter qver the strip and a limited form of self government was guaranteed to the Mosquito Indians, to lx- exercised according to their customs, for themselves and other dwellers within its limits. The socalled native government, which grew to be largely made up of aliens for many years, disputed the sovereignty of Nicaragua over the strip and claimed the right to maintain therein a practically independent municipal government. Early in the past year efforts of Nicaragua to maintain sovereignty over the Mosquito territory led to serious disturbances, culminating in the suppression of the native government and the attempted substitution of an impracticable composite administration in which Nicaragua and alien residents were to participate. Failure was followed by an insurrection which for a time subverted Nicaraguan rule, expelling her officers and restoring the old organization. This, in turn, gave place to the existing local government established and upheld by Nicaragua. _ Although the alien interests arrayed against Nicaragua iu these transactions have been largely American, and the commerce of that region for some ..time has been, and still is, chiefly controlled by our citizens, we can not, for that reason, challenge the rightful sovereignty of Nicaragua over this important part of her domain. For some months one, and during part of the time two, of our naval ships have been stationed at Blueftelds for the protection of all legitimate interests of our citizens. w In Sep’tember last the government at Managua expelled from its territory twelve or more foreigners, including two Americans, for alleged participation in the seditious or revolutionary movements against the republic at Bluefields already mentioned, but through the earnest remonstrance of this government the two Americans have been permitted to return to the peaceful management of their business. Our naval commanders at the scene of these disturbances, by their constant exhibition of firmness and good judgment, contributed largely to the prevention of more serious consequences and to the restoration of quiet and order. I regret that in the midst of these occurrences there happened a most, grave and irritating failure of Nicaraguan justice. An American citizen named Wilson, residing at Rama, in the Mosquito territory, was murdered by one Arguello, the acting governor of the town. After some delay the murderer was arrested, but so insecurely confined or guarded that he escaped, and notwithstanding our repeated demands it is claimed that his recapture has been impossible by reason of his flight beyond Nicaraguan justice. The Nicaraguan authorities,having given notice of forfeiture of their concession to the canal company on grounds purely, technical and not embraced in the contract, have receded from that position. Other Relations. Relations with Russia have been of an almost satisfactory nature, except that our great life insurance companies should be treated with equality. The giving of asylum to Salvadorean refugees by the warship Bennington and their subsequent release is reviewed, and Spain is referred to as “unreasonable and unjust” in imposing fines upon United States vessels and commerce for the most trivial clerical errors. Spain has also failed to settle the damages awarded in the Mora case, all efforts to collect it being futile. With relation to Turkey the president says that this government will not consent that Armenians be imprisoned for no other reason than having acquired American citizenship. Affairs in Samoa are referred to as singularly illustrating the impolicy of entangling alliances with foreign powers, and the president invites an expression of the judgment of congress on the propriety of withdrawing front the triple alliance. DEPARTMENT REPORTS. Showings and Recommendations of the Cabinet Officials. The secretary of the treasury reports that the receipts of the government, from all sources of revenue, during the fiscal year ending June 30, 1894, amounted to $372,802,498.29, and its expenditures to 1442,605,758.87, leaving a deficit of $69,803,260.58. There was a decrease of $15,952,674.66 in the ordinary expenses of the government, as compared with the fiscal year 1893. There was collected from customs $131,818,530.62, and from Internal revenue $147,168,449.70. The balance of the income for the year, amounting to $93,815,517.97, was derived from the sale of lands and other sources. The value of our total dutiable imports amounted to $275,199,086, being $146,657,625 less than during the preceding year, and the importations, free of duty, amounted to $379,795,536, being $64,748,675 less than during the preceding year. The receipts from customs were $78,536,486,11 leas, and from the internal revenue

$18,886,589.97 lees than in 1898. The total tax collected from distilled spirits was $85,250,250.25; on manufactured tobacco, $28,617,898.62, and on fermented liquors, $31,414,788.04. Our (exports of merchandise, domestic and foreign, amounted, during the year, to $892,140,572, being an increase over the proceeding year of $44,405,378. The total amount of gold exported during the fiscal year was $76,898,061, as against $108,680,444 during the fiscal year IKOB. The amount imported was $72,44(4,119, as against $21,174,381 during the previous year. The imports of silver wen- $13,286,5b2, and the exports were $50,451,265. The total bounty paid upon the production of sugar in the United States for the fiscal year was $12,100,208.89, being an increase of $2,725,078.01 over the payments made during the preceeding. The amount of Ixmnty paid from July 1, 1894, to-Aug. 28,1894. the time when further payments ceased by operation of law, was $966,185.84. The total expenses incurred in the payment of the bounty upon sugar during the fiscal year wax $139,140)145. It is estimated that ppon the basis of the present revenue laws the receipts of the government during the current fiscal year, ending June 30, 1895, will be $424,427,748.44, and its expenditures $444,427,748.44, resulting in a deficit of $20,000,000. The first day of November, 1894. the total stock of money of all kinds in the country was $2,240,773,888, as against $2,204,651,000 on the first day of November, 1893, and the money of all kinds in circulation, or not included in the treasury holdings, was $1,672,093,422, or $24.27 per capita, upon an estimated population of 68,887,01X1. At the same date there was held in the treasury • gold bullion amounting to $44,615,108.55, and silver bullion which was purchased at a cost of $127,779,998. The purchase of silver bullion under the act of July 14, 1890, ceased on the first day of November, 1893, and up to that PRESIDENT CLEVELAND. lime there had been purchased ’during the fiscal year 11,917,658.78 fine ounces at a cost of $8,715,521.32, an average cost of $0.7313 per ounce. The total amount of silver purchased from the time that law took effect until the repeal of the purchasing clause on the date last mentioned was 168.674,682,53 flue ounces, which cost $155,931,002.25. the average price per ounce lieing $0.9244, The total amount of standard silver dollars coined at the mints of the United States since the passage of the act of February 28»1878, is $421,776,408, of which $378.166,793 were coined under the provisions of that act, $38,531,143 under the provisions of the act of July 14, 1890, and $5,078,472 under the act. providing for the coinage of trade dollar bullion. The total coinage of all metals at our mints during the last fiscal year consisted of 63,485,220 pieces valued at $106,216,730.(46, of which there was $99,474,912.50 in gold coin, $758 in standard silver dollars. $6,024,140.30 in sttlxsidiary silver coin and $716,119.26 in minor coin. During the calendar year 1893 the production of precious metals in the United States was estimated at 1,739,323 fine ounces of gold, of the commercial and coinage value of $35,955,000. and 60.000,000 fine ounces of silver, of the bullion or market value of $46,800,000, and of the coinage value of $77,576,000. It is estimated that on the first day of July, 1894, the stock of metallic money in the bruited States, consisting of coin and bullion, amounted to $1,251,640,958, of which $627.923,201 was gold and $624,347,757 was silver. Department of War. 0 An actual increase by the equivalent of nearly two regiments and an annual reduction of expenses by nearly $250,000 is commended, and the establishment, of unnecessary posts through acts of congress is discouraged. The strength of the army, he suggests, be made at least equal to the legal strength. “Measures taken by the department dur ing the year, as indicated, have already considerably augmented the effective force, and the secretary of war presents a plan which I recommend to the consideration of congress, to attain the desired end Economies effected in the department in other lines of its work will offset, to a great extent, the expenditure involved in the proposition submitted. Among other things this contemplates the adoption of the three battalion formation of regiment, which for several years has been indorsed by the secretary of war and the generals commanding the army. Compact tn itself, it provides a skeleton organization, ready to lie filled out in the event of war: it is peculiarly adapted to our strength and requirements, and the fact that every othei nation, with a singleexception, has adopted this formation to meet the conditions of modern warfare, should alone secure for the recommendation an early consideration.” Total cost of the army for the year was $56,039,009.34. Duties devolving upon the army during the strike are commended as having been discharged promptly, courageously and with marked discretion. Department of Justice. The president commends the attorney general’s suggestion that an additional circuit judge for each circuit would greatly strengthen the circuit court of appeals and that such increase would not create a greater force of judges than required. Abolition of the fee system of compensation to federal officers, enlargement of powers of United States commissioners and the administration of justice in the Indian territory are commended, as is also the suggestion of the reorganization of the Union Pacific Railroad company on an equitable basis. An old recommendation for two United States prisons is renewed. Fostoffice The deficit in the postal revenues of over $9,000,000 has resulted from a steady increase in the growth and needs of the country, and prompt consideration is invited to the postmaster general’s views to the effect that if the law be so amended as to eradicate second class postage abuses not only will the postoftfee department show no deficiency, but he believes that in the near future all legitimate newspapers and periodicals and magazines might be properly transmitted through the mails to their subscribers free of cost. After reviewing the department figures the president adds: The report shows most gratifying results in the way of economics worked out without affecting the efficiency of the postal service. These consist in the abrogation of steamship subsidy contracts, relei ting of mail transportation contracts, and in the cost and amount of supplies used in the service, amounting in all to $16,619,047 42,. The report also contains a valuable con tribution to the history of the universal postal union, an arrangement which amounts practically to the establishment of one postal system for the entire civilized world. Special attention is directed to this subject at this time, in view of the fact, that the next congress of the union will meet in Washington in 1897, and it is hoped that timely action will ba taken in the di-

rection of perfecting preparations for that event. The postmaster general renews the suggestion made in a previous report that the department organization be increased to the extent of creating a direct district supervision of all jwstal affairs, and in this suggestion I fully concur. There are now connected with the postoffice establishment 32,661 employes, who are in the classified service, Tnis includes many who have been' classified upon the suggestion of the postmaster general. He states that another year's experience at the. head of the department serves only to strengthen the conviction as to the excellent working of the civil service law in this branch of the public service. Navy Department. The secretary's earnest plea for three additional battleships and 10 or 12 torpedo boats is thus indorsed by the president: “If we are to have a navy for warlike operations, offensive and defensive, we certainly ought to increase both the number of battleships and torpedo boats. “The manufacture of armor requires expensive plants and the aggregation of many skilled workmen. All the armor necessary to complete the vessels now building will be delivered before the Ist of June next. If no new contracts are given out, contractors must disband their workmen and their plants must lie idle. Battleships authorized at this time would not be well under way until late in the coming fiscal year, and at least three years and a half from the date of the contract would lx- required for their completion. The secretary states that not more than 15 percent of the cost of such ships need be included in the appropriations for the coming year. I recommend that provision be made for the construction of additional battleships and torpedo boats.” Pressing demands tor warships in many quarters the past fiscal year is related and tne transfer of the coast survey to the navy department is urged. A system of pro motion is commended as being vital to the success of the service. Department of the Interior. The report of the secretary of the interior exhibits the situation of the numerous and interesting branches of the public service connected with his department. I commend this report and the valuable recommendations, of the secretary to the careful attention of congress. The report referred to is an exhaustive review of •public land and Indian affairs. The president adds: lam convinced that the proper solution of the Indian problem and the success of every step taken in that direction depend to a very large extent upon tin- intelligence and honesty of the reservation agents and the interest they have in their work. An agent fitted for his place can do much toward preparing the Indians under his charge for citizenship and allotment of their lands, and his advice as to any matter concerning their wellfare will not mislead. An unfit agent will make no effort to advance the Indians on his reservation toward civilization or preparation for allotment of lands in severalty, and his opinion as to their condition is this and other regards is heedless and valueless.

Pensions. At the close of the last fiscal year, on June 30, 1894, there were 969,544 persons on our pension rolls, being a net increase of 3,532 over the number reported at the end of the previous -year. These pensioners may be classified as follows: Soldiers and sailors, survivors of all wars, 753.945; widows aud relatives of deceased soldiers, 215,162; army nurses in the war of the rebellion; 41L Os these pensioners 32,039 are surviving soldiers of Indian and other wars prior to the late civil war, and the widows.or relatives of such soldiers. The reifiaintlep numbering 937,505; are receiving pensions on account, of the war of the rebellion, and of these 469,344 are on the riflls under the authority of the act of June -27, 1890, sometimes called the dependent pension law. The total amount expended for pensions during the year was $139,804,461.05, leaving an unex;>ended balance from the sum appropriated of $25,205,712.65. The sum necessary to meet pension expenditures for the' year ending June 30. 1895, is estimated at $140,000,000. The commissioner of pensions is of the opinion that the year 1895, being the thirtieth after the close of the war of the rebellion. must, according to sensible human calculation, see the highest limit of the pension roll, and after that year it must begin to decline. The claims pending in the bureau have decreased more than 90,000 during the year. A large proportion of the new claims filed are for increase of pension by those now on the rolls. The number of certificates issued was 80,213. The names dropped from the rolls for all causes during the year numbered 37,951. Among our pensioners are nine widows and three daughters of soldiers of the revolution and 45 survivors of the war of 1812. The barefaced and extensive pension frau(ls exposed under the direction of the courageous and generous veteran soldier . now at the head of the bureau leaves no " room for the claim that no purgation of our pension rolls was needed or that continued vigilance aud prompt action are not necessary to the same end. The accusation tfiat an effort to detect pension frauds is evidence of unfriendliness toward our worthy veterans and a denial of their claims' to the generosity of the government suggests an unfortunate indifference to the commission of any offense which has for its motive the securing of a pension, and indicates a willingness to be blind to the existence of mean and treacherous crimes which play upon demagogic fears and make sport of the patriotic impulse of a grateful people. Department of Agriculture. The secretary of agriculture in his report reviews the operations of his department for the last fiscal year,and makes recommendations for the further extension of its usefulness. He reports a saving in expendi-. tu res during the year of $600,000, which is covered back into the treasury. This sum is 23 per cent of the entire appropriation. A special study has been made of the demand for American farm products in all foreign markets, especially Great Britain. There was a falling off in American wheat exports of 13,500,000 bushels, and the secretary is inclined to believe that wheat may not in the future be the staple export cereal ■product of our country, but that corn will continue to advance in importance as an export, on account of the new uses to which it is constantly being appropriated. The exports of agricultural products from the United States for the fiscal year ending June 30,1894, amounted to $628,363,038, being 72.28 per cent of American exports of every description, and the United Kingdom of Great Britain took more than 54 per cent, of all farm products finding foreign markets. All features of the department—live stock inspection,weat her bureau, statistical service and an agricultural census are given extended notice and the work of the secretary commended. The recommendation against promiscuous distribution of free seeds is again urged. IMPORTANT MATTERS. Three Unclassified Siilfieots of General • Interest. The advantages to the public service of an adherence to the principles of civil service reform are constantly more apparent, and nothing is so encouraging to those in 'etlicial lil< who honestly desire good government as the increasing appreciation by our people of these advantages. A vast majority of the voters of the land are ready to insist that the time and attention of those they select to perform for them important; public duties should not be distracted by doling out minor offices, ' and they are growing to be unanimous iu regarding party organization as something

' that should be used in establishing party principles, instead of dictating the distribution of public places as rewards of partisan activity. Numerous additional offices and places have lately lieen brought within civil service rules and regulations, and some others will probably soon be included. The report, of the commissioners will be submitted to the congress, and I invite careful attention to the recommendations it contains. National Board of Health. lam entirely convinced that we ought, not to be longer without a national board of health or a national health officer Charged with no other duties than such as pertain to the protection of our country from the invasion of pestilence and disease. There seems to lie at this time a decided inclination to discuss measures of protection against contagious diseases in international conferendh, with a view of adopting means of mutual assistance. The creation of such a national health establishment would greatlv aid our standing in such conference, and improve our opportunities to avail ourselves of their benefits. I earnestly recommend the inauguration of a national board of health or similar national instrumentality, believing the same to be a needed precaution against contagious disease, and in the interest of the safety and health of our people. Labor Commission’s Report. By virtue of a statute of the United States, passed in 1888, I appointed, in July last, the Hon. John D. Kernan, of the state of New York, and the Hon. Nicholas f!. Worthington, of the State of Illinois, to form, with the Hon. Carroll D. Wright, commissioner of labor, who was designated by said statute a commissioner for the purpose of making careful inquiry into the causes of the controversies between certain railroads and their employes, which had resulted in extensive and destructive strikes, accompanied by much violence and dangerous disturbance, with considerable ioss of life and great destruction of property. « The report of the commissioners has been submitted to m*-, and will be transmitted to the congress with the evidence taken up on their investigation. Their work has been well done, and their standing and intelligence give assurance that the report and suggestions they make are worthy of careful consideration. THE TARIFF ACT. Important Amendments Needed If It Is to lie Executed Effectively. The tariff act passed at the last session of congress needs important amendments if it is to be executed effectively and with certainty. Iff addition to such necessary amendments as will not change rates, of duty. I am still very decidedly in favor of putting coal and iron upon the free list. So far as the sugar schedule is concerned, I would be glad. under existing aggravations, to see every particle of differential duty in favor of refined sugar stricken out of our tariff' now accorded the sugar refining interest in our tariff laws, it still languishes to the extent of closed refineries and thousands of discharged workmen, it would seem to ; present a hopeless case for reasonable legislative aid. Whatever else is done or omitted, I earnestly repeat here the recommendation I have made in another portion of this communication that the additional duty of 1-10 cent per pound laid upon sugar imported from countries paying a bounty on its export be abrogated. It seems to me that exceedingly important considerations point to the propriety of this amendment. With the advent, of a new tariff policy, not only contemplated to relieve the consumers of oub land in the cost of their daily life but to invite a better development of American thrift and create for us closer and more profitable commercial relations with the rest of the'world, it follows as a logical and imperative necessity that we should at once remove the chief, if not the only, obstacle which has so long prevented our participation in the foreign carrying trade of the sea A tariff built up on t4a- theory that it is well to check imports, and that a home market should bound the industry and effort of American producers'. wAs fitly supplemented by a refusal to allow American registry to vessels built abroad, though owned and navigated by our people, thus exhibiting a willingness to'abandon all contest for the advani tages of American transoceanic carriage, ; Our new' tariff policy, built upon the theory 1 that it is well to encourage such importa- ■ tions as our people need, and that our products and manufacturers should find markets in every part of the habitable globe, is consistently supplemented by the greatest possible liberty to our citizens in ; the ownership and navigation of ships iu which our products and manufactures may be transported. The millions now paid to foreigners for carrying American passengers and products across the sea should be turned into American hands. Ship building, which has been protected to strangulation, should be revived by the prospect of profitable employment for ships when built, ar-1 the American sailor should be resurrected and again take his place, a sturdy and industrious citizen in time of peace and a patriotic and safe defender of American interests in the day of conflict. The ancient, provision of our law denying American registry to ships built abroad and owned by Americans appears, in the light of present conditions, not only to be a failure for good at every point, but to be nearer a relic of barbarism than anything that exists under the permission of a statute of the United States. I earnestly recommend its prompt repeal. QUESTIONS OF FINANCE.

Issue of Bonds Defended and New Currency Scheme Discussed. During the last month the gold reserved in the treasury for the purpose of redeeming the notes of the government circulating as money in the bauds of the people became so reduced, and its further depletion in the near future seemed so certain, that in the exercise of proper care for the public welfare it became necessary to replenish this reserve and thus maintain popular faith in the ability and determination of the government to meet, as agreed, its pecuniary obligations. It would have been well if in this emergency authority had existed to issue the bonds of the government bearing a low rate of interest and maturing within a special period, but the congress having failed to confer such authority, resort was necessarily had to the resumption act of 1875. and pursuant to its provisions bonds were issued drawing interest at the rate of 5 per cent per annum and maturing 10 years after their- issuing, that being the shortest time authorized by the act. lam glad to sav, however, that in the sale of these bonds the premium received operated to reduce the bate of interest to be paid by the government to less than 3 per cent. Nothing could be worse or further removed from sensible finaiicglhan the relations existing -lietween. toe currency the government has issued, the gold held for its redemption, and the means which must be resorted to for the purpose of replenishing such redemption tuna when impaired. Even if the claims upon this fund were confined to the obligations originally intended, and if the redemption of these obligations meant their cancellation, the fund would be very small. But these obligations when received and redeemed

in gold are not cancelled, but are reissued and may do duty many times byway of drawing gold from the treasury. Thus we have an endless chain in operation, constantly depleting the treasury’s gold and never near a final rest. As if this was not bad enough we have, by a statutory decoration that, it is the- policy of the government to maintain the parity between gold and silver, aided the force and momentum of this exhausting process, and added largely to the currency obligation** claiming this peculiar gold redemption. Our small gold reserve is thus subject to drain from every side. The demands that increase our danger also increase th<- necessity of protecting this reserve against depletion, and it is most unsatisfactory to know that the protection afforded is only a temporary palliation. It is perfectly and palpably plain that the only way under present conditions by which this reserve when dangerously depleted can l>e replenished is through the issue and sale of the bonds of the govern ment for gold; and yet congress has not only thus far declined to authorize the issue of bonds best suited to such a pur pose, but there seems a disposition in some quarters to deny 'both the necessity and power for the issue of bonds at all. I can - not for a moment believe that any of our citizens are deliberately willing that their government should default in its pecuniary obligations or that its financial operation* should be reduced to a silver basis. At any rate I should not feel that my duty was done if I omitted effort I could make to avert such a calamity. As long, therefore, as no provision is made for tlio final redemption or the putting aside of the currency obligation now used to repeatedly and copstantly draw from the government its gold, and as long as n* etter authority for bond issues is allowed, than at present exists, such authority wiH be utilized whenever and as often as it becomes necessafy to maintain a sufficient gold reserve, and in abundant time to save the credit of our country and make good the financial declarations of our government. Divorce the Government From Banking. Questions relating to our banks and currency are closely connected with the subject just referred to and also present some satisfactory features. Prominent among them are the lack of elasticity in our currency circulation and its frequent concentration in financial centers when it is most needed in other parts of the country. The absolute divorcement of the government from the business of banking is the ideal relationship of the government t* the circulation of the currency of the country. This condition cannot be immediately reached, but as a step in that direction aud as a means of securing a more elastic currency and obviating other objections to the present arrangement of bank circulation, the secretary of the treasury presents in his report a scheme modifying present banking laws and providing for the issue of circulating notes by state banks, free from taxation, under certain limitations. The secretary expiates his plan so plainly and its advantages are developed by him with such rend|t , kaWo clearness that any effort on my part te present argument in its support would bo superfluous. 1 shall, therefore, contest myself vyith an unqualified indorsement es the secretary’s proposed changes in »h« law and a brief and imperfect resume es their prominent features. What Is Proposed. It is proposed to repeal all laws providing for the deposit of United States bonds as security for circulation; to permit national banks to issue circulating notes not exceeding in amount 75 per cent es their paid up and unimpaired capital, provided they deposit with the government as a guarantee fund, in United States legal tender notes, including treasury notes of 1890, a sum equal in amount to 30 per cent *f the notes they desire to issue, this deposit to be maintained at all times, but whenever any bank*rCtiTbs«any part of its circulation a proportionate part of its guarantee fund shall be returned to it; to permit the secretary of the treasury to prepare and ke--p on hand ready for issue, in case an increase in circulation is desired, blank national bank notes for each bank having circulation, anil to repeal the provisions of the present law’imposing limitations and restrictions upon banks desiring to reduce •or increase their circulation, thus permitting such increase or reduction within the limit of 75 per cent of capital to be quickly made as emergencies arise, >

Guarantee and Safety Fund*. # In addition to the guarantee fund quired.it is proposed to provide a safety" ' fund for the immediate redemption of the circulating notes of failed banks by imposing a small income tax, say one-half of 1 per cent, upon the average circulation of each bank until the fund amounts to 5 per cent of the todfi- circtrlation outstanding. When a bank fails its guarantee fund is-to be paid into this safety fund and its notes are to be redeemed in the first instance from such safety fund thus augmented,, any impairment of such fund caused thereby to be made good from the immediate cash assets of said bank, and if they should be insufficient such impairment tv be made good by pro rata assessment among the other banks, their contributions constituting a first lien upon the assets of the failed bank in favor of the contributing banks. As a further security, it is contemplated that the existing provision fixing the individual liability of stockholders is to be retained and the bank's indebtedness on account. of its circulating notes ik to be made a first lien on all its assets For the purpose of meeting the expense of printing notes, official supervision, cancellation and other like charges there shalL.be imposed a tax of say one half of 1 per cent per annum upon the average amount of notes in circulation. It is further provided that there shall be no national bank notes issued of a leas denomination than ?10; that each national bank, except in case of a failed bank, shall ■ redeem or retire its notes in the first instance at its own office or at agencies to be designated by it; that no fixed reserve used be maintained on account of deposits. Important Feature of the Plan. Another very important feature of this plan is /he exemption of state banks from taxation by the United States in eas<s where it is shown, to the satisfaction of the secretary of the treasury and controller of the currency by banks claiming: such exemption, that they have not had outstanding their circulating notes exceeding 75 per cent of their paid up and unimpaired capital; that their stockholders are individually liable for the redemption of their circulating notes to the full extent of the ownership of stock; that the liabilit y . of said banks upon their circulation notes constitutes under their state taw a first lien upon their assets; that siich banks have kept and maintained a guarantee fund in United States legal tender notes, including treasury notes of 1890, equal to 80 per cent of their outstanding circulation notes, and that such banks have promptly redeemed their circulating notes when presented at their principal or branch offices. » It is quite likely that this scheme may be usefully amended in some of its details, but I am satisfied it furnishes a basis for a very great improvement in our present banking and currency system. I conclude this communication fully appreciating that the responsibility for all legislation effecting the people of the United States rests upon their representatives in the congress, aud 'assuring them that whether in accordance with recommendations I have made or not I shall be glad to co-operate in perfecting any legia-,. lation that tends to . the prosperity and welfare of our country.GBOVEB CLSYELAMD. j