Rensselaer Republican, Volume 27, Number 16, Rensselaer, Jasper County, 13 December 1894 — THE TREASURY. [ARTICLE]

THE TREASURY.

Secretary Carlisle’s Annual Report and Recommendations. Sonic Radical Changes Proposed in Our Pinane al and Hanking Systems. The annual report of the. Secretary of the Treasury was transmitted to Congress December 4. As usual, it is a voluminous iocument. It shows that the revenues of the Government from all sources for the Bscal year ended June 30, 1894, were 8372,103,498, and the expenditures 8442,605,658, which shows a deficit of 569,803,260. As tompared with the fiscal year 1993, the reset pts for 1894 fell off 888,914,063. During ihe year there was a decrease of 815,952,£74 in the ordinary expenditures of the jovernment. The revenues for the current fiscal year are thus estimated upon the basis of existing laws: From customs..... ..-.. -. . . 5100,000,000 00 Prom internal revenue 165.10 J.OOO 00 Prom miscellaneous sources l&.COO.OOO 00 From postal service. 84,427.718 00 Total estimated revenues 8424,427.748 00 The expenditures for the same period ire estimated as follows: For the civil establishmentß 91.250,001 00 For the military establishment... 53,250.000 00 For the naval establishment 33,500,000 00 For the Indian service 11,500.000 00 For pensions 140,500,000 00 For interest on the public debt.... 31,000,009 00 For postal service 84,427.748 00 Total estimated expenditures:. 8444.497,748 00 5r a deficit of 8820,000,000 00 It is estimated that upon the basis of existing laws the revenues of the Government for the fiscal year of 1896 will be: From customsßlßs,ooo,ooo 00 From internal revenue 190,000,000 03 From miscellaneous sources 15,000,009 'JO From postal service...:’ 86,907,40 rOO Total estimated revenuor,..... 8476,907.407 00 Mr, Carlisle discusses our financial system at great length and reviews the circumstances leading to the first 850,000,000 issue of bonds as a means of replenishing the gold reserve yielding 858,660.917 and increasing the free gold in the Treasury to 8107,446.802. The lowest point reached by the reserve since the resumption of specie payments was on the 7th day of August, 1894. when, by reason of withdrawals in the redemption of notes it was reduced to 852.189,500. After that it was slowly replenished by voluntary exchanges of gold coin for United States notes by banks and by small receipts of gold in the payment of dues to the Government, until the 14th of November, 1894, when it reached the sum of 861,878,374. At this juncture the second issue of bonds was decided upon, bids were advertised for, received and accepted. The currency system next receives the attention of the Secretary in an argument in which he shows that it fails to meet the requirements of business for three causes: (1) To the large volume of United States currency of various kinds kept constantly outstanding, making the contraction or expansion of the comparatively small national bank circulation less effective than it would otherwise have been. (2) The difficulty and delay in procuring, and, to some extent, in retiring circulation. (3) And, mainly, the provisions of the law which require the deposit of United States bonds to secure circulation and restrict the issue of notes to 90 percent of the par value of the bonds. Other minor objections are urged against existing conditions, and the proposed new system of banking, as briefly outlined in the President’s message, is discussed iu detail as follows: 1. Repeal all laws requiring or authorizing the deposit of United States bonds as security for circulation. 2. Permit National banks to issue notes to an amount not exceeding 75 per centum of their paid up and unimpaired capital, but require each bank before receiving notes to deposit a guarantee fund, consisting of United States legal tender notes, including treasury notes of 1890, to the amount of 30 per cent, upon the circulating notes outstanding, to be maintained at all times, and whenever a bank retires its circulation, in whole or in part, its guarantee fund shall be returned to It In proportion to the amount of notes retired. 3. Retain the provision of the law making stockholders individually liable, and provide that the circulation notes shall constitute a first lien. 4. Impose one-half of one per cent, per an .um, payable semi-annually, upon the average amount of notes in circulation to defray the expenses. 5. No National bank note to be of less denomination than 510, and all notes of the same denomination to be uniform in design. 6. Require each National bank association to redeem its notes at its own office, or at official agencies. 7. To provide a safety fund for the immediate redemption of the circulating notes of failed banks, impose a tax upon the average circulation of each bank until the fund amounts to 5 per cent, of the total circulation outstanding. Require each new bank and each bank taking out additional circulation, to deposit its proper proportion of this fund before receiving notes. When a bank fails, its guarantee fund, held omdeposlt, shall bo paid into the safety funa and used in the redemption of its notes, and if this fund shall be impaired by the redemption of the notes -of failed National banks, and the immediate available cash assets of such banks are insufficient to re-establish the fund, it shall at once be made good by pro rata asssessments upon other banks.

8. Repeal the provisions of the reorgan - Ization and extension act of July 12,1882. imposing limitations upon the reduction and increase of national bank circulation. 9. Repeal all provisions of the law requiring banks to keep a reserve on account of deposits. 10. The Secretary of the Treasury may, in his discretion, use any surplus revenue of the United States in the redemption and retirement of United States legal tender notes, but such redemptions shall not in the aggregate exceed an amount equal to 70 per cent, of the additional circulation taken out. 11. Circulating notes issued by a banking corporation, duly organized under the laws of any State, and which transacts no other than a banking business, shall be exempt from taxation under the laws ot the United States, when it isshown to the satisfaction of the Secretary of the Treasury and the Controller ot the Currency (1) that such bank has at no time had outstanding its circulating notes in excess of 75 per centum of its paid-up and unimpaired capita); (2) that its stockholders are Individually liable for the redemption of >4* circulating notes to the full extent of their ownership of stock: (3) that the circulating notes constitute by law a first lien upon all the assets of the bank; (4> that the bank at all times keeps the guarantee fund in the United States legal tender notes. Including treasury notes of 1890* equal to 30 per centum of its outstanding circulating notes; and (5) that It has f>romptly redeemed its notes on demand at ts principal office, or at one or more of its branch offices, if it has branches. 12. The Secretary of the Treasury may, under proper rules and regulations, permit State banks to brocure and use in the preparation of their notes, the distinctive paper used in printing United States securities The Secretary makes an exhaustive argument in favor of the adoption of the filan a» proposed, which he deems abs<>ntely /ssentlal to a sound financial condition The subjects ot revenue and tariff ra-

form are presented. Upon the subjected free raw materials, Mr. Carlisle says: The raw materials used in the predate tlon of commodities for the use of the poo* pie in their homes and in their various industrial pursuits should be free from taxation, in order that the burdens-of labor may be lightened, the opportunities for employment increased and the necessaries of life made more abundant and lose expensive. If our industries ate to bo profitably conducted, reduced cost of production must precede or accompany reduced prices of the finished product, and as cheap commodities • increase consumption, the Interests of all classes will be promoted by removing the obstructions which deny our skilled laborers and artisans access to the world’s store of raw materials.