isthmus
ALKEV
Elliot:
ironic Opilgrass of the United States:
theorems assemblage of the legisla-
tive branch of our government coonrs at
time when the interests of our people
and the needs of the country give especial
”lunch to the condition of our fcrolgp
tendons and the exigencies of our na-
finanoes. The reports oftbe heads
the several administrative ddpsrtmenta
of the government fully and plainly ex-
hibit what has been accomplished within
them of their respective duties and
”out such rccommendatlousdor the bet-
1, torment of our country’s condition as pa-
;. triotlo and intelligent labor and observa-
tion suggest. ~
I therefore doom my executive duty
‘ Monte” performed at this time by pre-
heating to the congress the important "
phases of our situation as minted to our
1 intercourse with foreign. nations, and a
statement of the financial problems which
confront us, omltting, except as they are
. related to these topics, any reference to
ddpsrtmental ope tioas.
‘ The aller Case.
The customary cordial relations between
‘ this country and France have been undis-
turbed, with the exception that a full ex-
planation of the treatment of John L
.;: Waller by the ' expeditionary military our
, thorities of France still remains to be
given. Mr. Waller, formerly United
States consul at Tumatave, remained in.
Madagascai’hfter his term of office expired
and was apparently successful in procur-
, . lug business concessions from the Hovas
" of greater or less value. After the accu-
pation of Tamatave and the declaration of
martial law by the Freuchhe was arrested
upon various charges, amongthem that
of communicating military information
t‘othe enemies of France, was tried and
convicted by a military tribunal and son-
tenwd to 20 years’ imprisonment.
Following the course justified by abun-
dant precedents. this government request-
ed from that of France the record of the
prooeedin of the French tribunal which
resulted 1 Mr. Waller'sa condemnation.
This request has been . complied with to
the extent of supplying a copy of the, em-
cial record, from which appear the consti-
tution and organizational the court, the
charges as formulated, and the general
. course and result of the trial, and by
which it is shown that the accused was
tried in open court and was defended by
counsel. But the evidence adduced in
support of the charges—which was not re-
solved by the French minister for foreign
nflairs till the first wc‘ok in October—has
thus far been withheld, the French gov-
erument taking the ground that its pro-
duction imresponso to our demand would
establish a bad precedent. The efforts of
our ambassador to procure 'it. howcvger,‘
though impeded by recent changes in the
French ministry, have not been relaxed.
and it is confidently expected that some
satisfactory solution of the matter'vvill
shortly be reached Meanwhile it appears
that Mr: Waller's confinement has every
alleviation which the state of his health
and all the other circumstances of the
case demand or permit. »
The Bering Sea. Award.
The understanding by which the United
States was to pay and Great Britain to
receive, a lump sum of $125,000 in full
settlement of all British claims for darn—
ages arising from our seizure of British
sealing vessels unauthorized under the
award of the Paris tribunal of arbitra.
tion was not confirmed by tho last eon-
gress, which declined to make the neces-
sary appropriation. I am still of the opin~
Ion that this'nrrangement was a judicious
‘nnd advantageous one for the government,
and I earnestly recommend that it be
again considered and sanctioned. If, how-
ever, this does not meet with the favor of
congress, it certainly will hardly dissent
from the proposition that the government
is bound by every cbnsideration of honor
: and good faith to provide for the speedy
adjustment of these claims by arbitration
as the only other alternative. A treaty of
arbitration has therefore been agreed upon
and will be ' immediately laid before the
senate, so that in one of the modes sug-
gest‘sd a final settlement may be reached.
The Alaskan Boundary.
The completion of the preliminary sur-
vey of that Alaskan boundary which fol-
lows tho contour of the enlist from the
southernmost point of Prince of Wales is-
land until it strikes the one hundred and
forty-first meridian at or near the summit
of, Mount St. Elias awaits further neces-
sary appropriation, which is urgently recs
ommendcd. This survey was undertaken
under the provisions of the convention on-
tered into by this country and ’Gl'uilt Brit’
ain July 22, 1802, and the supplementary
‘ convention of Feb. 3, 1804.
As to the remaining section of the
Alaskan boundary, which follows the one
hundred and forty-first meridian north.
wardiy from Mount St. Elias to the frozen
ocean, tb . Settlement of which involves
the physi 1 location of the meridian men-
tioned, no conventional agreement has yet
been made. The ascertainment of a given
meridian at- a particular point 'is a work
requiring much time and careful observa-
tions and surveys. Such observations and
surveys were undertaken by the United
States coast" and geodetic survey in 1800 ‘
and 1891, while similar work in the some
quarters under British auspices are be?
lleved to give nearly coincident results,
but these surveysh /, eon independent-
ly conducted, and no in‘ o ationai agree-
ment .to mark these or an other parts of
the one hundred and fort first meridian
byfpermanent monuments has yet been.
made; In the meantime the valley of the
Yukon is becominga highway through”
the hitherto unexplored wilds of Alaska,
and abundant 'mineral wealth has been
disooversdJn that region, especially,“ or
near the junction of the boundary merid-
ian with the Yukon and its tributaries.
. In these circumstances it is expedient
and indeed imperative that the jurisdic-
tional limits of the respective governments
in this new‘region be speedily deter-
mined. Her Britannia ionising? govern-
lncnt has proposed a joint deli itation ef‘
the one hundred and forty-fl meridian
hyan international commission of experts,
vwhieh, if congress will authorize it and
make due provision therefor, can be ac-
complished with,’ M unreasonable delay.
It is impossible to overlook the vital im-
portame of continuing the work already
entered upon and supplementing it by
‘ further edective measures looking to the
exact location of this entire boundary‘line.
The Venezuelan Dispute.
It being apparent ”that the boundary
, dispute between Great Britain and the re-
public of Venezuela concerning the limits
of British Guiana was approaching an
acute stage. a defini meat of the
interest and policy * e United States
‘ regardsthe controversy seemed to be
‘re‘qulrsdbothonile own account andin
view of lti relations with the friendly
1- *v . , mourned. In
‘ isleurs'aralts.
strip of Nicaragua.
July we
mm a , ' “magical
Imus-ador- at ‘ forcculvn
- to the British "government. in which the
attitude of the United States was fully
and distinctly set forth. The general eon-
clarion- thereln reached and formulated.
are in substance list the traditional and
established policy of this government is
firmly opposed to a forcible increase by
any European power of its territorial per
sessions on this continent; that this policy
is as well founded in principle do it is
strongly supported by numerous piece
dents“, that as a consequence the United
States is bound to protest against the en-
largement oft area of British Guiana
in derogation :fx‘tKrlghts and against
thewill of Vanessa a: that. considering
the disparity in strength of Great Britain
and Venezuela, the territorial dispute be-
tween them can hereasonably settled only
by friendly and impartial arbitration, and
that the resort to such arbitration should
include the whole controversy and is not
satisfied if one of the powers concerned is
permitted to draw an arbitrary line
through the territory in debate and to de-
clare that it will submit to arbitration
only the portion lying on one side of it.
In view of these conclusions, the dispatch
in question called upon the British gov-
ernment for a definite answer to the ques-
tion whether it would or ‘would not sub-
mit the territorial controversy between
itself and Venezuela in its entirety to lin-
partiai arbitration. The answer of the
British government has not yet been re-
ceived, but is expected shortly, when fur-
ther communications on the subject will
probably be made to the congress
The Corintu Incident.
In last year's (meeting, I narrated at
some length the jurisdictional questions
then freshly arisen Ah the Mosquito Indian
Since that time, by
the voluntary act of the Mosquito nation,
the territory reserved to them has been
incorporated with Nicaragua, the Indians
formally subjecting themselves to be gov-
erned by the general laws and regulations
of the republic, instead of by their own
customs and regulations. and thus avail-
ing themselves of a privilege secured to
them by’ the treaty between Nicaragua
and Great Britain of Jan. 28,,”00’.’
After this extension of uniform Nicara—
guan administration to the Mosquito strip
the case of the British vice consul. Hatch.
and of several of his corinirymon who had
been summarily expelled from Nicaragua
and treated with considerable indignity
provoked a claim by Great Britain upon
Nicaragua for pecuniary indemnity, which,
upon Nicaragua's refusal to admit liabil-
ity, was enforced by (treat Britain. While
the sovereignty and jurisdiction of Nica-
ragua Was in no way questioned by (irrat-
Britniu, the farmer‘s arbitrary conduct in
regard to British subjects furnished inc
ground for this proceeding. ‘
A British no ' if force occupied without
resistance the . ocific seaport of (Yorinto,
but was soonlafter withdrawn upon the
promise that the sum demanded would be
paid. Throog out this incident the kindly
offices of the ’nitcd States worn invoked
and were employed in favor ofas peaceful
a settlement and as lunch consideration
and indulgence toward Nicaragua as were
consistent with ‘tlie nature of the case.
Our cll'orls have since been made the sub
joct of appreciative and grateful recogni:
tion by Sicaragua.
The Cuban Rebellion.
Cuba is again gravely disturbed. An
insurrection, in‘ some respects more active
than the last preceding revolt, which con
tinucd from 1808 to 1878, now exists in a
large part of the eastern interior of the
island, menacing even some populations
on the coast. Besides dermiging the coni-
mercial exchanges of the island. of which
our country takes the predominant share,
this- flagrant condition of hostilities, by
arousing sentimental sympathy and incit-
ing adventurous suprmrt among our peo-
ple, has entailed earnest effort on the part
‘of this government to enforce obedience
to our neutrality laws and to prevent the
territory of the United States from being
abused as a vantage ground from which
to aid those in arms against Spanish sov—
ereignty. '
Whatever may be the traditional sym‘
pathy of our countrymen as individuals
with a people who seem to be struggling
for larger autonomy and greater freedom,
deepened as such sympathy naturally
must be in behalf of our neighbors, yet
the plain duty of their government is to
observe in good faith the recognized obli-
gations of international relationship. The,
performance of this duty should not be.
made more dillicult by a disregard on the
part of our citizens of the obligations
growing out of their allegiance to their
country. whlcb‘should rcsrrain them from
violating as individuals the neutrality
which the nation of which they are mem-
bers is bound to observe in its relations to
friendly sovereign states. . '
Tire Armenian Massacre»
Occurrences in Turkey have continued
to excite concern. The 'rcpor ed massa~
ores of Christians in Armenia.
vclopment there and in otbe
ospirit of fanatic hostility 0 Christian
influences naturally excite lpprchcuslon
for the safety of the devoted men and
women who, as dependents of the foreign
‘misslonary societies in the‘l'nitcd States,
reside in Turkey under the guarantee of
law and usage and in the legitimate perv
formation of their educational and roll-
gious mission. _
Uur minister has been vigilant and
alert in affording all p a do protection.
We have sent ships a, f r toward the
points of actual disturb face as it is possi-
ble for them to go, wh otheyofl'er refuge
to those obliged to ties and we have, the
promise of other pewe s which have ships ‘
in the nelghborhoodt at our citizens as
weilas theirs will be received and pre-‘
tectod on heard these ships; 0n the de—
mandef our minister orders have been
issued by the sultan that Turkish soldiers
shall guard and escort. to the coast Ameri-
can refugecsvf ,1 x
‘ The Consular Service.
In view of the growth of our interests
in foreign countries and the'encouyaglng
prospects for a general expansion of our
commerce, the question of an improve-
ment in tho'c‘onsular service has increased
in importance and urgency. ~
The importance of thesubjeot has led,
the erecutive to consider what steps
might properly be taken without addi-
tional legislation to answer the need of a
battery system of consular appointments.
The matter having been committed to the
consideration of the secretary of state, in
pursuance of his recommendations an ex-
ecutive order was issued on the 20th of
September, .1805, y the terms of which it
is provided that after that date any va-
cancy in a consulate or commercial agency
with an annual salary or compensation
from official fees of not more than 08.500
or less than $1,000 should be filled either
by transfer or promotion from some other
position under the department of state of
a character tending to qualify the incum-
bent for the position to be filled, or by the
appointment of a person not under the de-
partmentnfwtate, but having previously
served thereunder and shown hia‘capeeliy
saddles-"hr mumanymr bribe
We“ efa perm who having”
by the president and sent tea
board for examination, is found, upon
such nomination, to be qualified for the
being‘nsually, on account of their small
compensation. filled b . selection from
residents of the locality. twee not deemed
practicableto put them under the new
system.
1 I am thoroughly convinced that in ad—
dition to their salaries our embassmlers
and ministers at foreign courts shall be
provided by the government with ofiiclai
residences. The salaries of these officers
are comparatively small and in most cases
insufficient topay, with other necessary
expenses, the cost of maintaining house
hold establishments in keeping with their
important and delicate functions.
Nathan] llnancca.
‘ As we turn from a review of our foreign
relations to the contemplation of our na'
tional financial situation we are imme-
diately aware that we approach a subject
of domestic concern more important than
any other that can engage our attention,
and one at present in such a perplexing
and delicate predicament as to require
prompt and wise treatment. .
. We may Well he encouraged to earnest
effort in this direction when we recall the
steps ulreadytakcn toward improving our
economic and financial situation, and
. when we appreciate how well the way has
been prepared for further progress by an
aroused and intelligent popular interest
I! these subjects. ‘
The compulsory purchase and coinage
of silver by the government, unchecked
and unregulated by business conditions
and headless of our currency needs, which
for more than 15 years diluted our circu-
lating medium. undermined confidence
abroad in our financial ability and at last
culminated in distress and panic at home,
have been recently stopped by the repeal of
the laws which forced this reckless scheme
upon the country.
The things thus accomplished. notwith-
standing their extreme importance and
houoflcent effects, fall far short of curing
the monetary evils from which we suffer
ass result of long indulgence in ill ad-
vised financial cxpcdlents.
' , United States Notes.
The currency denominated United
States notes and ,commonly known as
greenbacks was 1 ed in large volume
during the late of l vv'ar and was intend-
ed originally to meet the exigencies of that
period. It will be seen by a reference to
the debates lucougress at the time the
laws were passed authorizing the issue of
these notes that their advocates declared
they were intended for only temporary use
and to meet the emergency of wnr. In
almost if not all the lows relatingto them
~10an provision was made contemplating
their voluntary or compulsory retirement.
large quantity of them, however, were
kept on foot and mingled with the cur-
relic}: of the country, so that at the close
of the year 1571 they amounted to $351,-
moon.
wImmediately after that date and in Jan
usry, 1875. a law was passed providing for
the resumption of "specie payments, by
which the secretaryol the treasury was
required, whenever additional circulation
was issued to national banks, to retire
United States notes equal in conduit to
«0 per cent of such additional national
bank circulation until such notes were rt.»
duced to $000,000,000. This law further
provided that on and after the lst day of
January, 1870, the United States notes
then outstanding should be redeemed in
coin, and in order to provide and prepare
for such redemption the secretary of the
treasury was authorized not only to use
any surplus revenues of the government,
but to issue bonds of the United States
and dispose of thom‘for coin and to use
the prolrcds for the purposes contemplated
by the statute. _
In May, 1879, and lit-fore tliodaie thus
appointed for the redemption and retire:
merit of those 1101.054; another statute was
passed forbidding their further cancella-
tion and retirement. Some of them had,
however, been previously nub-mood and
canceled upon the issue of additional nu-
tionnl bank circulation, as poi-untied by
the law'of 1875, so that the amount out-
standing at the time of lho‘passugo of the
act ‘ forbidding their further retirement
was $340,081,0l0. ,
The law of ism did not stop at. distinct
prohibition, but contained in addition the
following express provision:
"And when any of said non-s may be
redeemed or be. received into the treasury
under any law; from nuysourr-e whatever,
andushali belong to the United States.
they shall not be retired. canceled or de-
stroyed, but they shall be reissued and
paid out again and kept in circulation. ”
This was the conditiotrof affairs on the
1st day of January, 1870, which had been
fixed upon four years before as the date
\{or entering upon the redemption and re—
irement of all these notes, and for which
such abundant moans had been provided.
The government was put in the anoma-
lous situation of owing to the holders of
its notes debts payable in gold on demand,
which could neither be retired by receiv'
ing such notes in discharge of obligations.
duerthc government nor canceled by nod
tunl payment in gold. Itwas forced to
redeem without redemption and to pay
without aequitlauco.
The Gold Reserve.
There had been issued and sold $05,-
500, 000 of the bonds‘aulhorized by the re-
sumptioh act of "1875, the proceeds of
which, together with other gold in the
treasury, created a gold fund doomed suf-
ficient to meet the demands which might
be made upon it for the redemption of the
outstanding United States notes This
fund,'togetbcr with such other gold as
might be from lilac to time in the trans—
ury available for the same purpose, has
been since called our gold reserve. and
{100,000,000 has been regarded as an ade-
quate amount to accomplish its object.
This fund amounted, on the 1st day of'
January, 1870, to $114,193,3oe, and,
though thereafter constantly fluctuating,
it did not fall below that sum until July,
1892. In April, 1893, for the first time
since its establishment, this reserve
amounted to less than $100,000,000, con-
taining at that, date only 097,011,330.
In the meantime, and'in July, 1890, an
not had been passed directing larger gov-
ernmental monthly purchases of silver
than had been required under previous
laws and providing that in payment for
such silvertrensnry of the United
States should. be issued payable on demand
in gold orlsllver coin ot‘the discretion of
the secretary of the treasury. It Was,
however, declared in the not to bef‘the
utsblishedmolley of the United States to
maintain the two metals on a parity with
each other upon the present legal ratio.
or such ratio as may be provided by law."
In view of this declaration, it was not
deemed permissible for the secretary of
the treasury to exercise the discretion in
tennsconferred on him byrefusing to pay
gold on these notes when demanded, be-
cause by such discrimination in favor of
the gold dollar the so called parity of the
itwe metals would‘be destroyed. and gr‘a
position. Posts which pay less than 81.000 ‘
I 1595.
* ,
- manna 4.
m
an
i‘ 3 ‘ 1 \‘l
“s;
fend om macaque-mes would be
‘ precipitated by affirming or molesting
the mutually widening disparity between
their actual values under the aiding
ratio. " \a
It thus resulted that the treasury not
issued in payment of silver purchases an
der the law of 1090 were necessarily treat.
all as gold obligations. at inception of the
holder. These notes on the lat day of No-
vember. ipfld. when the law compelling
the monthly’iiurchase of silver was re3
pooled. amoun ed to more than $100,000,-
000. The notes of this description new
outstanding added to the United States
notes still undimlnfibod by redemption or
cancellation «institute a volume of gold
obligations amounting to nearly 8500,-
0 0. These obligations are the instru-
me stvhlch, chr since we have had a
gold reserve, have been used to deplete it'.
This reserve, as has been stated. had
fallen in April, 1808, to $07,011,300. It
has from that time to the present, with
very few and unimportant upward move-
ments, steadily decreased. except as it has
been temporarily replenished by the sale
of bonds. '
The Bond Issues.
In consequence of those‘ conditions the
gold reserve on the 1st day of February,
1804, was reduced to $115,438,077, having
lost more than $211,000, 000 during the pre-
ceding nine months, or since April, 1898.
Its replenishment lining necessary, and no
other manner of accomplishing it being
possible. resort was had to the issue and
sale of bonds provided for by the-resump-
tion. act of 1875. li‘lftyluillions of these
bonds were sold, yielding $53,1533,fl05.7l,
which was added to the reserve fund of
gold then on hand. Asa result of this
operation, this reserve, which had suffered“
constant and large withdrawals in the
meantime. stoml on the 0th any of March.
1891, at the sum of $107,440,802. Its do-
plotion was, however, immediately there-
after so nrcolorated that on the 30th day
of June, 1801, it had fallen to $04,873,025,
thus losing by withdrawals more than
$42,000,000 in five months and dropping, -‘
slightly below its situation when the sale
of $50,000,000 in bonds was effected for
its replenishment. '
This depressed condition grow worse,
and on the 2lth day of November, 1804,
our gold reserve being reduced to $57,000,-
701, it became necessary toogain strength-
en ft. This was done by another sale of
bonds amounting to $50,000,000, from
which there was realized $58, 538, 500. with
which the fund was increased to 8111,-
1l2,021 on the 4th day of December. 1804.
Again disappointment awaited the aura
lous hope for relief. There was not even
a lull in the o'xasperating withdrawals of
gold. (in the contrary. they grow larger
and more persistent timuevcr. Between
tlio'lth d y of Iloccmlmr, 180i, and early
in l’el:ri.iry.vli~‘05, a period of scarcely
more tlm' 0 months after the second
re-onforccmont of our gold reserve by the
sole of bonds, it had lost by such with-
drawals more than $00,000.000 and had
fallen to $11.:ll0,131. Nearly $43,000,000
had been withdrawn within the month
imnn-dintvly preceding this situation.
In anticipation of impending trouble, I
had, on ”2“ :lalh day of January. 1305,
addresscda communication to the con-
gress fully setting forth our dlillculties
and dangerous position and ‘earnostly roo-
ommonding tlmtauthority be given the
socrclaryof the treasury to issue bonds
hearing a low rate of interest, payable by
their terms in gold, for the purpose of
maintaining a sufllcienl gold reserve, and
also for the redemption and cancellation
of outstanding l'nilcd States notes and
of silver under the law (if-1500. This
recommrmlotiou did not, however, meet
with legislative approval.
A Low Reserve.
In February, 17505, therefore, the situa-
tion Was om-cedingiy critical. With a re-
scrve perilously low and a refusal (1hr -
grt'ssionol aiducverytbing indicated tho
lho end- of gold payments by the guru -
meat was imminent.
In this emergency and in \‘ll‘W -’iis
surrounding prrplcxitim’ .t became entire-
ly apparent to (limo upon whom the
struggle for safety was devolved. not only
ihatour gold roam-re must. for the third
time in loss than iii months, be restored
byuuothor issue and saleof bonds boar-
ing a high'mto of interest and badly suit—
ed tothe purpose, but that a plan must be
adopted for their disposition promising
better results than those realized on pre-
vious sales. 'An agreement. was therefore
made with a number of financiers and.
bankers whereby it was stipulated that
bonds (iosrribml in the rvsumptlmi art of
1575, payable in coin :10 years after their
date, bearing interest at the rato‘of 4 per
cent per fllllilllll and anmunlihg to about
$02,000, 000, should he exchanged for gold.
receivable by weight, amounting to a lit-
tle more than $05,000,010).
(in the day this contract was made its
terms Were communicated to congress by
a special executive message. in which it
was stated that. more than $10, 000,000
would be SflYl‘ll to ibe government if geld
bonds bearing :1 per cent interest were au-
thorized to be substituted for' those men-
tionod in the contract. ’
The Congress having declined, to grant
the necessary authority to secure this new
ing, 31w contract, ‘unhmdifb-d. was carried
out, resulting iua gold reserve amount-
ing to $107, 071,330 on the 8th day of July,
The performance of this contract
not only rcstorcd‘the reserve, butchecked
for a time the withdrawals of gold and
brought on a period of restored confidence
find such peace 'and quiet in business cir«
clue as were of the greatest possible value
to every interest that affects our people. I ,
have never had the slightest misgiving‘
concerning the wisdom or propriety of this
arrangement and am quite willing to un-
swer for my full share of responsibility.
fer its promotion. I believe it averted a
disaster the imminencp of which was for- .
i and thus preventing their presentation for.
tunately not at tho time generally under-
stood by our people.
Though the contract mentioned staid
for a time the tide of gold withdrawal, its
good results could not be permanent. R‘s-
cent withdrawals have reduced the reserve
from 8107, 71,230 on the 8th day, of July,
“1895, to\079,333,000. '
A Remedy Suggested.
, The government has paid in gold more
than nlno’tenths of its United States
notes and still ewes them all. It has paid
in we about one-half of its notes given
for silver purchases without extinguish-
ing by such payment 01 of these notes.
When added to all this we are reminded
that to carry on this astounding financial
scheme the government has incurred a
bonded indebtedness of 005, 500, 000 in es-
tablishing a gold reserve and of $162,-
315,4001n efforts to maintain it, that the
annual interest charge on such bonded in-
debtedness is more than,flll,000.000, that
a continuance in our present , course may
result in further bend issl es, and that we
hate suffered or are thre tened with all
this for the sake of supplying gold for
foreign shipment or facilitatingits hoard-
ing at home. a situation Ill exhibited
which certainly ought to arrestattention
and provoke immediate legislative relief.
., u l 1‘ ‘1 : ‘” '
n ‘ .lt
, .l
the treasury liol’cs issued for the purchase ‘
nctlcsble remedy for corktroublas is”
need in the retirement and cancellation
of our United States notes, cautiously}
treasury notes issued by the government
in payment of silver purchases. under the
not of 1000. , .
I believe this could be quite readily ac«
compllshed by the exhhnnge of these notes
for United States bonds of small as well
as large denominatioui. bearings low rate
of interest. They should be long term
. bonds. thus increasing their desirability
as ipvestments, and hormone their pay—
ment could be well postponed to a period
far removed from present financial bur-
docs and perploxltlos, when with increased
prosperity and resources they would be
moreeasily met.
To further insure the cancellation of
these notes and also provide a way by
'whieh gold may be added to our currency
in lieu of them. a feature in . the plan
; should be an authority given to the score-
tary of the treasury to dispose of the
bonds abroad for gold if necessary to oom~
plate the contemplated redemption and
cancellation, permitting him to use the
proceeds of such bonds to take up and
cancel any of the notes that may be in
the treasury or that may be received by
the government on any account.
The currency withdrawn by the retire-
ment of the United States notes and treas-
ury notes, amounting to probably less
than $180,000,000, might be supplied by
such gold as would be used on their reliro-_
mentor by an increase in the circulation
of our national banks. Though the ag-
gregate capital of those now in existence
amounts to more than 0004.000000, their
outstanding circulation based on bond no-
curity amounts to only about $100,000,-
000. They are authorized toissue notes
amounting to 00 per cent of the bands do
posited to secure their circulation, but In
no event beyond the amount of their capi- ‘
tal stock, and they are obliged to pay 1.
per cent tax on the circulation they issue
I think they should be allowpd to issue
circulation: equal to the" par value of the
bonds they deposit to secure it, and that
the tax on their circulation should be row
duct-d to one-fourth of l per cent, which
would undoubtedly meet all the expense
the government incurs on their account.
In addition they should he allowed tosub-
stitute or deposit in lieu of the bonds new
called. greenbaoks, and the unwinding"
I are connects the only omega “a "m
. 'c - ....
us receipts would in also
the fear of pecuniary exhaustion.
yet through all our struggles to maintain
our geld reserve there never has basil any"
apprehension as to our ready ability to pay
our way with such money as walled, and
the question whether or not our current
receiptsunet our current expenses has not
entered into the estimate of our solvency.
Of course the general state of our funds,
exclusive of gold. was entirely immaterial
to the foreign creditor and investor. Bil
debt could only be paid in gold, and his
only concern was our ability to keep on
hand that kind of money.
Inasmuch as the withdrawal of our gold
has‘resultod largely from fright, there isw
nothing apparent that will prevent its con-
tinuance or recurrence, with its natural
consequences, except such uchange in our
financial methods as will reassure the
frightened and make the desire for gold
less intense. It is not clear how an in-
crease in revenue, unless it be in gold, can «
satisfy those whose only anxiety is to gain
gold from the government's store.
It cannot therefore be safe to rely upon
increased revenues as a cure for our pres-
ent troubles. ‘
“(by the Bonds \Vere Issued.
It is possible that the suggestion of in.
creased revenge as a remedy for the diffi-
culties we are considering may have orig-
inated in an intimation or distinct allega-
tion that the builds which have been issued
ostensibly to replenish our gold reserve ,
were really issued to supply insufficient
revenue. Nothing can be further from the
truth. Bonds were issued to obtain gold
for the maintenance of our national credit. ,
As has been shown. the gold thus ob-
tained has been drawn again from the
trcrmury upon l'nited Slates notes and
treasury notes. I, This operation would
have been promptly prevented if possible,
but these notes having thus been passed to
the treasury they became the money of the
government, like any other ordinary'gov-
ernment funds, and there, was nothing to
do but to use flit-in in paying government ~—
expenses when needed. , _
.At no timcfivben bonds have been is.
sued has there been any consideration of
the question of paying the expenses of
government with their proceeds. There
was no necessity to consider that question.
At the time of curb bond issue we had a
required “8 security {01' their GerlllnllO" vsafo surplus in the treasury for ordinary
-those which would be issued for the pur-
pose of retiring the l'nlted Slntcsuietos
and treasury notes. .
‘ ‘ The banks already existing, if they de-
sired to avail themselves of the provisions
operations, exclusive of the gold
reserve.
The Silver Purchase Acts.
It is neither unfair hor unjust to charge
a large share of our present financial per-
in our
of law thus mtxllliod, could issue clrculu- {plcxitirs and dangers in the operation of
lien in addition to that already outstand- 1 the laws of ”7,,- and ”my compelling the
“‘11- amounting t9 $1_TH,(M0.000, which purchase of silver by the government,
Would hourly or quite equal the currency ; which not only furnished a new treasury
proposedlo be canceled. At any rate, I
lib-mid confidently expect to see the exist-
l
l
obligation upon which its gold could be
withdrawn-1m: SOIlll‘f‘l‘ilFa‘il the fear of
log national banks orothors to beorgnn- .0" overwhelming “0“,! of 5m”. and a
lzcd avail themselvcs‘nf the proposed on- ' forced
oouragcmcnls to issue circulation and
descent to silver paynwnfs that
even the repeal of those laws did not on-
pmmptly fill any vacuum and supply ov- f than. cure the evils “1.- their existence.
cry currency heed. _
l _ l'so For Accumulated Silver.
collation of the treasury notes issued un- , gore "N'l‘fldnil ”111' prosper
While 1 have t‘llilt‘in‘nl‘ull to make a
plain statement of the disordered condi-
I do not overlook the fact that the coir 1 tion “f ‘5“? “UHUNF and ”1“ present dan-
2i_‘.
/ and to sug-
dor the silvi'r purchasing actof lhllll would post 1| W"? Whif‘h 101“” 7" 3 <afvrfihhucial
leave the treasury in the actual ownership
system, Ilmvo constantly had in mind
of sullicieut silver, including soigulorago, W119 fanttliat mil“? ”f m" countrymen,
to ruin hourly $178,000,000 in standard - whose sxnceriiyl do not doubt. insist that
dollars.
whether this might not, from time to
time, be converted into dollars or frnc- “'8!“me 0‘ tbl‘ “'9‘“ ('Ol‘leOMSH‘v'W- They '
It is worthv‘ of‘ consideration athc cure for the ills new threatening us ‘
may boloiihd in the single and simple
lional coin illlll slowly put into illl‘f“lllll- ‘9 contend ”‘3‘ our mints shall b? “on“
tion. as in the judgment of the so’crefury ;tlirown 09"" t" the ”‘3‘“ unlimited and
try should require.
of the treasury the necessities of the coun« i independent C‘lilmgfi "1 b0“! 00"] and 5"-
ver of full legal tender quality, regardless
In the present stage of our difliculty it “t “10 action 0‘ any'ethor‘government in
,ls not easy to understand how the amount
in full view of the fact that the ratio be-
nf our revenue receipts directly effects it. ‘ “V00“ ”‘0 metals which “WY 513889“ calls
The important question is not the quail- . for 100 cents worth “I gold in the gold'
lily "f lunacy rcovli‘vd in revenue llflY' Fdollar at’tbo present standard, and‘ only
meals. but m" kind of mm"). we main~ , 0 cents in intrinsic worth of silver in the
lain and our ability to m itinue in sound ' 5““‘1‘ dollar.
financial condition. We are considering
the government‘s holdings of gold as re-
lated to the soundness of our money (UNI
Those who bclievu that our independent
{rec coinage of silver at an artificial ratio
with gold of 10 in 1 would restore the
as affecting our national credit and money. PM“? “FWD“! ”10 "10‘0va “lid 00358‘
fury strength. m
! lfour gold reserve had never been im~
pail‘ed; if no bonds had ever been issued
quenlly lwtwwh'tlie coins, oppose an un- ‘
supported and improbable theory to the
general belief and practice of other na-
to nmlpnigh it; if there had been no fpar , lions and to the leaching of the wisest
and liniidity concerning our ability to
continue gold payments; if any part of.
our revenues were now paid ' in gold, and
if we could look to our gold receipts us a
lumps of maintaining a safe reserve. the
pmount oiuur revenues would be an n‘
ilncntiul factor in the problem... But n-
fortunutely all the circumstances that
. might lend weight to this consideration
are entirely lacking.
If it is said that these notes if hold by
the government can be used to obtain gold
for our reserve, the answer is easy. The
people draw gold from the treasury on de-
mand upon l'uited Siatosnoiesaud troas~
ury notes. but the proposition that ’tho
treasury can on demand draw gold froni
the people upon them would be regarded
in these daysoyvith wonder and amuse-
merit. And even if this could be done
there is nothing to prevent those thus
parting with their gold from regaining it
the next day or the , next hour by the
presentation) of the notes they received in
exchange for it. .
,The secretary of the treasury might use"
such notes luken‘froin a surplus revenue
‘to buy gold in the market. ‘ Of course he
could not do this without payinga pre~
mium. The premium would not remain
stationary, and tlieubsurd Spectaclemlght
be presented of‘adenler selling gold to the
government, and with United States notes
or treasury notes in his hand immediately
clamoring for its return and a resale at a
higher premium. ’ ‘
(Ingrid and the Revenue;
5 It may be claimed that a large revenue
and redundant receipts might favorably
affect the situation under discussion by
affording an opportunity of retaining
these notes in the treasury when received,
gold. Such retention to be useful ought
to be at least measurably permanent, and
this is precisely what is prohibited, so far
as United States notes are concerned. by
1- the law of 1878 forbidding their further
retirement. That statute in so many
words provides that thesenotes, when re-
ceived into the treasury and belonging to
: the United ‘ States, shall be “paid out
f again and kept in circulation.” .
It will, moreover, be readily seen that
' the government could not refuse to pay
out United States notes and treasury notes
in current transactions when demanded
and insist on paying out sliver alone and
still maintain the parity between that
' metal and the currency representing gold.
Besides the accumulation in the treasury
of bun-ency of any kind exacted from the
people through taxation is justly regarded
as an evil, and it cannot proceed far with.
out vigorous protest against an unjustlib
able retention of money from the business
of the country and a denunciation of a
scheme of tagntion which proves itself to
be unjust when it takes from the earnings
and income of the citizen money so much
in excess of the needs of government sup-
port the - rge sums can be gathered and
he treasury. ‘ ‘
been this supposed that sufficient
l
l
l
1
g
l
statesmen and economists of the world,
both in the past and present, and, what
is far more conclusive. they run counter
to our own actual"experiences. - .
Twice in our curl or history our'law-
makers, in attempting to establish a bi-
metullic currency, undertook free coinage
upon a ratio ‘whb-b accidentally varied
; from the actual relative values of the two
metals not inure than :1 per cent, In both
cases. notwithstanding greater difficulties
and Cost of transportation than now exist,
the coins whose intrinsic worth was our
dorvnlurd in the ratio gradually and
surely disappeared from our circulation
: and want to other countries where their
real value was better recognized.
Acts of congress wereimpntent to crc 0
equality where natural causes deer ed
even a slight inequality. '
. - The Nation's Indebtedness.
Our country's imlcbtcdnoss, whether
owing by the government or existing be-
tween individuals, has been contracted
with reference to our present standard.
To decree by not of congress that these '
debts shall be payable in‘lcss valuable
dollars than those within the contempla-
tion and intention of the parties when
contracted would operate to transfer, by
the flat of law and without compensation,
an amount of property and u’velume of
rights and interests almost inoaieulahle.
There is a vast difference between an
standard of value and a currency for
otary use. The standard must neco
be fixed and certain. The eurr ‘
be in divers forms and of Va '
No silver standard country he ‘a gold cur-
rency in circulation, but an enlightened '
and wise system of finance secures the
benefits of both gold and silver as our-
rency and circulating medium by keeping
the standard stable and all other currency
at,par with it. Such a system and such a
standard also give "free scope for the use
and expansion of safe and conservative
credit, so indispensable. to broad and
growing commercial transactions and so
well substituted for the actual use of
money. If a fixed and stable standard is
maintained, such as the magnitude and,
safety of our commercial transactions and
business require. the use (in money itself
is conveniently minimized
In conclusion ,I especially entrant the
people’s representatives in the congress, ’
who are charged with the responsibility
of ‘ inaugurating museums for the safety
1and prosperity of our common country, to
promptly and effectively consider the ills
of our critical financial plight. I have sug-
gested a remedy which my judgment ap-
proves.
congress that‘I am prepared to tie-operate
‘with them in perfecting any other meas-
ure promising thorough and practical rs-
llef. and that I willgiadly labor with
them eyerypatrictlo endeavor to -
tber einterests and guard the welfa of
our countrymen whom in our respective
places of duty we have undertaken to
serve. GROVE]! CLEVELAND.
‘ Executive hisnsion,"l)ee. 2. ‘
I‘ll-"1.15;. . .. .a ..,..
I desire, however, to assure the '
we lid rare the situation, i _ I ,
Lmyldeflldo incur solvency-ail! m
f .
Norwalk Chronicler