Rensselaer Republican, Volume 27, Number 23, Rensselaer, Jasper County, 31 January 1895 — PRESIDENT'S MESSAGE [ARTICLE]

PRESIDENT'S MESSAGE

Cleveland's Urgent Appeal for Imine- •. . - dtate Financial - President Cleveland, Monday, sent to Congress the follow ing special message on he financial situation: b the Senate and House of Represntatives: o In my last annual message I recomnended the consideration of the Congress >f,the condition of our National finances Vid in connection with .the subject indorsed the plan of currency legislation, _atthat time seemed to furghh pro•ection against impend ing danger. This jlan has not been approved by the Contress- In the meantime,the situation has ■•o changed and the emergency now appears so threatening that I deem it my duty toUsk, at the hands of tin; legislative branch of the Government, such "prompt ind effective action as will restore confiience in our financial soundness and avert business disaster ,and universal distress -among our people. r—- — —— 11 is bardly disputed, that tkis.predifilament confronts us today. Therefore, no me in any degree responsible for the makng and execution of our laws, should fail to see a patriotic duty in honestly and lincerely attempting to relieve the Situation. The- real trouble which confronts us n a lack of gpntidehee, widespread and ■onstantly increasing, in the continuing ability or disposition of the government to iay its obligations in gold. This lack of confidence grows to some extent out of the palpable and apparent embarrassment attending the government under existing ftws to procure goidv and to a greater extent, out of the impossibility of either reeping it in the. treasury or cancelling »bligations by its expenditures, after it is tbtained. The only way left open to the government for procuring gold is by the issue and lale of. bonds. The only bonds that can Je so issued were authorized nearly twen-iy-five years ago, and are not well calculated to meet our present needs. Among ither'disadvantages they are made payable in coin, instead of specifically in gold, which, in existing conditions, detracts ■arg’uly in ’an increasing ratio from their iesirabilijy as investments. It is by no means ceria In th a t bonds o f this descrip;ion can much longer be disposeed of at a price creditable to the financial character of our government. The most dangerous and irritating featare of theljsJ tnation, however, remains to be mentioned. It is found in the means ay which the Treasury is despoiled of the told, thus obtained without cancelling a tingle government obligation, and solely ’ortho benefit of those who find profit in shipping it abroad, or whose fears induce them to hoard it at homo. Wo have outstanding about J500.(X)0,000 of currency notes of the covernmeni for which gold nay be demanded, and, curiously enough, the law requires that when presented, and m fact redeemed and paid in gold, they dial I be reissued. These same notes may 16 duty many times in drawing gold from the Treasury—nor can the process be arrested as long as private parties, who, for profit or otherwise, see an advantage in repeating the operation. More than $300,100,000 in these notes have already been redeemed in gold, and notwit list anding meh redemption, they are still outstanding. Since the 17th day of Jan., 1894, our bonded interest-bearing debt has increased 110 O it), for t.he pu rposo of. obtain ing told to replenish our coin reserve. Two fSsues were made, amounting to $50,000,10) each—one jn January and the other in November. As the result of the first issue there was realized something more than s>B 000,000 in gold. Between that issue and the succeeding one in November, Tom prising a period of about ten months, nearly $103,0iX),000 in gold were irawn from .tins. ,.Tiii3.„jinade Aho second issue necessary, and upon that more than $58,000,C0D in gold was again . realized. Between the date of this second ssiio and the, present time, covering a period of only about two months, more '-han $69,000,000 in gold have been drawn coin the Treasury. The financial events of the pas t year suggests facts and conditions which hoiil I cortaiiily arrest a'.tehtibn. Mdse Shan $172,0’0.000 in gold has been drawn ant of the Treasury during tho year for ',he purpose of shipment abroad or hoarding at homo; while nearly $103,000,000 of shis amount was drawn out during the first ton months of the year, a sum aggregating more than two thirds of that tinount, being about, $69,000.0)0, was irawn out during tho following two months, thus indicating a marked accel traf en of the depleting process with tho lap-e of time. The obligations upon which this gold has been drawn from the Treasury are still outstanding, and are available for use in repeating tho exhaustion operation, with shorter intervals, a 8 our per pl ox I ties ace um: 11 a to, Co n - 111 ions are certainly supervening, tending so make the bonds which , may bo issued so replenish our gold, loss useful for that purpose. . It will hardly do to say that a simple inrrease of revenue Will cure our troubles with the apprehensions now existing, and constantly increasing, as our financial Ability doos not rest upon a calculation of rur revenue. ’Die time has passed when the eyes of investors abroad and our people at home are fixed noon tho revenues of the Government. Changed conditions have at tracted their attention to the gold if the Government. There need be no fear that we cannot pay our current expenses with such money Its vie’have. There is now in the Treasury a comfortable surplus of more than $73,00X000, but it is not in go! .1, and therefore, ,does not meet our dlllicnlty. ‘Besides the Treasury notes which certainly should be paid in gold amounting to nearly $5(X).OOO.OOf). there will fall duo In 1904. $100,007,000 of bonds issued during tho last vear. for which we have received gold and in 1907 nearly $630,000,000 of 4 per cent, bonds issued in 1877. Shall tho payment of these obligations in gold be repudiated? If they arc to be paid in such a manner as the, preservation of our national honor and national solvency demands wo should not destroy or even imperil our aldiity to supply ourselves with gold for this purpose. While I am not unfriendly.to silver. and while I desire to see it recognized to such an extent as is consistent with thb financial safety and tho preservation of national honor and credit; I am not willing to see gold entirely abolished from our currency and finances. In inv opinion the Secretary of tho Treasury should be authorized to issue bonds of tho Government for the purpose of procuring and malntaming a sufficient fold reserve, and tho redemption and cancellation of the United States legal tender notes, and the Treasury notes, issued for tho purchase of silver under tho law of June 14. 18.0. Tho principal and Interests of those bonds should be payable on their face In rold, or Its representative. and because there would now bn difficulty in favorably disposing of bonds not containing this itipnlation. I suggest that the bonds be Issued In denominations of K 0 and SSO and their multiples, and that they bear interest at a rate not exceeding 3 per cent, per Annum. I doenot soo. why they should jot bo payable fifty years from their late. Those bonds tinder existing laws could jo deposited by National banks as soe.nrlty for circulation, and should bn allowed lo fssun circulation np to the face value of thesb or any other bonds so deposited, Jxcqpt bonds outstanding, bearing only Ipor ennt. Ini'rost, and which sell In tho market at less than par. National banks Ihould not ho allowed to tako out circulation notes of a less denomination than $lO,

and when sncli as are now outstanding reach the Treasury, except for redemption and retirement, they should be cancelled and notes of the denomination of $lO end upward should be replaced by certificates jpf denominations under *lO. I belicveail the provisions I have suggested should be embodied in our laws, if we are to enjoy a complete reinstatement of a-sound financial condition. They need not interfere with any currency scheme provided for the increase of the Circulating medium, through the agency of national or State banks, since they can easily be adjusted to such a scheme. Objection has been made to the issuance of interest-bearing obligations Tor the purpose of retiring the non-interest-bearing legal tender notes. In point of fact, how--ever, these notes- have burdened us with a~ large load of interest, and it is still achumuJatingT The aggregate interest off the original issue of bonds, tho proceeds of which, in gold, constituted the reserve for the payment of these notes amounted to $70,326,250 on Jan. 1.1895, and the annual charge for interest on these bonds, and those issued for the same purpose during tho last year, will te $9,715,000, dating from Jan. 1,1805. . j _ In conclusion, I desire to 'rankly confess my retiictarKcr to issurng m<--e bonds in present circumstances and with no bettei results than have lately followed that course. I cannot! however, refrain from adding to an assurance of my anxiety to co-operate with the present Congress in any reasonable measure of relief, an expression of my determination to leave nothing undone which furnishes a hope for improving the situation or checking a suspicion of onr disinclination or disability to meet, with the strictest honor,overy National obligation. Grover Cr v.vELAND.