Perrysburg journal. (Perrysburg, Wood Co., O. [Ohio]) 186?-1965, 1873-12-12
Report Of the Secretary Of the Treasury.

The report OF the Secretary OF the Treasury is q
formidable document, aboundlng in suggestions
and figures, an abstract Of which is here given:
The net revenue for the fiscal year ending june
80, 1873, was $338 78s, ,20i and the ordinary expen
ses $3.50 3f3,24b, leaving surplus revenue Of &43
392goS which has been applied 70 me rednouSn @ o.
from March 1, 1869, to November 1, 1873 has been
$3ss 629 1s3the annual saving Of interest result.
for the first quarter OF the fiscal year ending
June 3O 1S74-from July 1, 1873 to September 30,
Jane sc is1s ssso, ,S5e $3.50, and the expenditures
for the same period were $l3s, ,507, 1853, leaving
balance in the Treasury, september 80, 1873 Of
naming three quarters Of the current fiscal year
are $1S7, 10000, and the estimated expenditures
&2006s0,0O0 leaving an estimated deficiency in the
revenue Of $i3, $4,000. The estimated receipts fol
the fiscal year ending June 3d. 1875, are 1905 700 600
and the estimated expenditures for the same
RETuNDfNe THE PUBLIC DEBT.
The process OF refunding the public debt ia
proceeding satisfactorily. The total amount
OF subscriptions to the per cent. funded loan is
$8i50O0 900, and the proceeds applied to the
demption OF an equal amount OF 5-2Os as fast as
the subscriptions mature. The sum of $4,000, 900,
received from Great Britain, in payment Of the
Geneva award has been used to redeem on equal
amount Of 6 per cent. bonds, and these have been
exchanged for an equal sum In bonds in the per
cent funded loan When the subscriptions above
mentioned have matured there will have been
effected conversion Of 800, 100000 Of the $40
loan into the per cent. loan since January last,
making an annual saving Of $1,000, 900 in interest.
The whole amount converted since the passage Of
the act has been 5000 600 900, and the annual saw
ing Of interest $3,000,00O
REVENUES AND ESTIMATES.
The alterations and changes in the tariff laws,
and the removal Of a considerable amount OF inter
nal revenue taxation, have caused the revenues for
the fiscal year to fall much below those OF previous
years pSgng the months Of S September ana OG
mutton had been caused, mainly In consequence of
the financial crisis but 1t is gratifying to find that,
in this period Of greatest commercial embarrass-
ment, the receipts in coin from customs have been
greater than the proportionate amount required
for the same period to meet the interest on the
public debt, and all other expenditures which are
payable In coin.
The revenues have already fallen off sufficiently
to make 1t important and necessary to exercise the
greatest economy In appropriations and expendi-
lures for the future, and should there not be a
revival Of business at early day and increase in
months, additional means will be required to meet
expenses Should such be the case, recommend
additional taxation, iudciously laid and so as 70
be the least burdensome upon the people and the
business of the country, rather than resort to bor
rowing money and increasing the public debt.
THE BANKS AND THE CRISIS
The prevailing practice OF paying interest on de-
posts attracts currency from all parts of the
try to large cities, especially 70 New e York, the
there is comparatively little for currency else
where. Immense balances accumulate in New
York, where, not being required by the demands
of legitimate and ordinary business, they are
loaned on call at higher rate Of interest than that
paid to depositors, and are used In speculation.
from the West and South for currency to be used
in payment for and transportation Of their agricul
tural products, there occurs a stringency in the
money market arising from the calling in Of such
loans to meet this demand. Until this year
though annually creating some embarrassment
this demnd has been met without serious diff
Guilty Daring the past summer, anticipating the
usual autumn stringency, the Treasury Depart
ment sod gold while the market price was high
currency abundant, and bonds for sale in the mar
ket were scarce, and while there surplus oi
gold in the Treasury, and thereby accumulated
about Sl4, ,000,000 OF currency, with the view oi
using the same or such part thereof as might be
necessary in the purchase of bonds for the sinking
fund at times during the autumn and winter when
they could be bought at price not above par in
gold, or in meeting demands upon the Treasury, as
circumstances should require.
This year there great demand for currency
to pay for the heavy crops for which European
countries offered a ready market. The suspension
Of certain large banking houses, the first of which
occurred ON the 18th of September, alarmed the
people as to the safety of the banks and banking
institutions In general Suddenly there began
rapid calling IN Of demand loans, and very gen
eral run on the banks for the withdrawal of de
posits. Entire confidence was manifested II
United States notes, and even in National Bsnl
be obtained and were largely boarded with al
much avdty as coin ever boarded in times o.
financial distress when that was the circulating
selves unable to meet the demands upon them
currency in circulation became exceedingly scarce
and the business Of the country became greatly
embarrassed. In this condition OF things, grea
pressure was brought to bear upon the Treasury
Department to afford relief by the issue OF United
States notes. Several propositions looking to thu
relief of the money market were made to thu
Treasury Department which it was compelled TO
various reasons to decline.
The Executive Department OF the Government
was anxious to do everything in its power unde
the law, and with due regard to the protection o
the Treasury and maintenance of the public
credit, to allay the panic, and to prevent disaste
to the legitimate commercial and industria
interests OF the country; but it was founc
impossible TO afford relief in any Of the man!
forms in which that relief was asked 1t de
cided, therefore, to adopt the only practicable
course which seemed to be open to 1.-THE pur
chase Of bonds for tbe sinking fund to suchf ex
tent, as the condition of the Treasury would al
low, and thus release considerable amount o
currency from its vaults. Purchases of bond
were commenced on the morning of Septembe
20, and continued until the Gath, when 1t became
evident that the amount Offering for purchase wa
increasing to an extent beyond the power Of thu
Treasury to accept and the purchasing was CLOSED
after bonds to the amount of about $4,000, ,0OC
had been bought. and without the of any par
of the $44 100000 of United States notes general,
known as the reserve.
The currency paid out of the Treasury for bond
aided much to strengthen many savings banks
and to prevent panic among their numerous de
positOrs, who began to be alarmed and had ther
developed an extended run upon those useful in
stitutions it would have caused widespread disas
ter and distress. 1t also fortified other banks anC
checked the general alarm to some extent. Blu
the loss of confidence in the value of a grea
amount of corporate property which immediatel
followed the failure of banking houses connected
with largely indebted corporations, the distrust o
as to the credit Of firms and individuals who's
business was supposed to be greatly extended, AM
the legitimate effect thereof in disturbing the bust
ness of the country, could not be avoided by an
amount of currency which might be added to th
crcula ton already existing. Confidence was Il
be eventually restored only by the slow and eau
tious process of gaining better knowledge of tn
true values, and making Investments accordingly
and, by conducting business on frmer basis
and more regard to real soundness and intrinsi
values.
INTEREST ON DEPOSITS.
There can be doubt that the practice b.
banks OF allowing interest on deposits, payable ol
demand, is pernicious and fraught with DANCE
and embarrassment to borrower and lender, a
well as to general business interests. Deposit
payable on demand should be limited to tina
surplus which individuals require over and aboY
their investments, and no part of that from whicl
they expect an income. Such deposits are com
paratiyely stable, in average amounts and consti
tute healthy basis for banking purposes within
proper limits, which prudent bankers know hoV
to determine. But, if deposit accounts are EN-
ployed as temporary investments, the interest at
tracts large amount Of money to those cite
where such interest is paid, and where speculation
is most active, at seasons when as much prot
thereon cannot be secured elsewhere. With th
first return Of activity in legitimate business thes
temporary investments are called in and leopard
ize in their sudden withdrawal, the whole bust
ness Of the banks, both affecting legitimate depos
itors; on the one hand, by excitement and dis
trust, and on the other, creating a condition o
things in which borrowers on call are also unable
to respond. The banks have borrowed thei
money of depositOrs on call. They have Loaned
1t on call to spectators, who, by its use, have con
tributed to initiate the prices of stocks or mer
chandise which have been the subject Of thei
speculations. The speculator wants it to carr!
stocks till he can dispose Of them without loss
This he is unable to do in stringent money mar
ket The banks, their depositors, and borrower
all want 1t at the same time, and, OF course
stringency is developed which spreads distress
throughout the country. The system creates al
immense amonnt of debts payable on demand, al
Of which thus suddenly and Unexpectedly matart
at the first shock of financial or commercial EN-
barrassment in the country, and at the very tim
when most needed by the debtors, and when the
are least able to respond; There is no safety 10
corporations or individuals whose capital EN-
ployed is wholly or mostly borrowed on call
SPECIE PAYMENT,
There can be no doubt that, during the eigh
years since the Rebellion, there has been growing
desire among the people to restore paper circulation
to specie standard, and that any steps taken t
ACCOMPLISH that object will be received witt