Evening star. [volume] (Washington, D.C.) 1854-1972, 1873-12-02

gestthe Establishment OF Clearing Houses for
your cor side ation.
To secure the former, many plans have been
suggested, most if not all of which, 10 * to me
more like imitation OF the one hand, or compel
ling the government on the other, to pay interest
without corresponding benefits upon the sur
plus funds of the country during the season
when otherwise unemployed.
j submit for your consideration whether this
diff culty might not be overcome by authori zing
the Secretary of the Treasury 10 issue, at any
time, to national banks of issge, any amount of
their own notes below fxed per centage OF
their issus-say forty per ceRt.-upon the banks
depOsiting with the Treasurer of the United
States an amount of Government bonds equal to
the amount OF notes demanded; the banks to
forfeit to the Government say four per cent. of
the interest accruing on the bonds so pledged,
during the time they remain With the Treasurer
as security for the increased circulation, the
bonds 20 pledged 10 he redeemable by the banks
at their pleasure either in whole or in part,
by returning their own bills for cancellation to
an amount equal to the face of the bonds with
drawn. ! would further suggest, for your con-
sideTaton, the propriety of authorizing national
banks to diminish their standing issue, at
pleasure, by returning tor cancellation their
own bills and withdrawing so many United
States bonds are pledged for the bills returned.
In view of the great actual contraction that
has taken place in the currency, and the com
parative contraction continuously going on due
| to the increase of population, increase OF mau-
ufactories, and all the industries, do not be-
lieve there is too much of it now for the dullest
| period of the year. Indeed, If clearing houses
| should be established, thus forcing redemption,
| IL is q question for your consideration whether
banking should not be made free, retaining all
the safeguards now required to secure billhold-
In any modification of the present laws
II gulating national banks, a further step
towards preparing for resumption of specie
payments, invite Your attention TO a conside-
ration OF the propriety OF exacting from them
the retention, a part OF their reserve, either
the whole, or a part, of the gold interest accru-
ing upon the bonds pledged as security for their
issue. / have not reflected enough on the bear
ing this might have in producing a scarcity of
| coin with which to pay duties on imports to
| give it any positive recommendation. Butyour
attention Is invited to the subject.
| During the last four years the currency has
| been contracted, directly, by the withdrawal
| of three per cent. certificates, compound inter
est notes and $50 bonds, outstanding on the 18th
! of March, 1s69-all of which took the place OF
| legal tenders in the bank reserves-tO the eX-
| tent of slxty-three millions of dollars.
| During the same period there has been
| much larger comparative contraction Of the
| currency. The population of the country has
| largely increased More than p 900 miles of
| railroad have been built requiring the active
| use of capital to operate them. Millions OF
| acres of land have been opened to cultivation,
| requiring capital TO move the products. Man
| ufactories have multiplied beyond all prece-
| dent in the same period of time, requiring cap
| Ital weekly for the Payment of wages and for
| the purchase of material; and probably the
| largest of all comparative contraction arises
| from the organizing of free labor in tue south.
| Now every laborer there receives his wages,
| and for want of savings banks the greater part
| OF such wages IS carried in the pocket, or
| boarded until required for use.
| These suggestions are thrown out for YOUR
| consideration wlthouta any recommendation that
| they shall be adopted literally, but hoping that
| the best method may be ARRIVED at to secure
| such an elasticity OF the currency as will keep
| employed all the industries Of the country, ami
| prevent such an imitation as will put OF indef
| nitely resumption of specie payments, an OBJ
1 ject so deyoutiy 10 be wished for by all, and by
| none more earnestly than the class OF people
| most directly interested-those who learn their
| bread by the sweat OF their brow"
The decisions OF Congress on this sub iect will
l thR hearty Il 20
| In previous messages have called attention
| to the decline in Amcrican ship building, and
| recommended such legislation as would sec ure
| to us our proportion of the carrying trade.
| Stimulated by high rates and abundance of
| freight the progress for the last year ship
| building has been very satisfactory. There has
been an increase of about three per cent. in the
| amount transported in American vessels over
the amount of last year. With the reduced cost
| of material which has taken place il may reas-
! onably be hoped that this progress will be
| maintained, and even increased. However, as
| we pay ABOUT ceOU1,OOO per annum to foreign
vessels for the transportation of our surplus pro-
ducts 10 a market. thus increasing the balance
| Of trade against US to this amount, the subject
| Is one worthy of your serious consideration.
| "CheaP transportation IL A subject that has
| attracted the attention of both producers and
| consumers for the past few years and has con,
| uibuted 20, il IL has not been the direct cause
| of, the recent panic and stringeucy. As Con
| gress, at its last session, appointed a special
| committee to investigate this whole subject
during the vacation, and report at this session,
| | have nothing TO recommend until their report
| is ready.
| There is one work, however of a national
| character, in which the greater portion of the
| east and the west, the north and the south are
| equally interested, to which will invite your
| attention. The state of New York has a canal,
| connecting Lake Erie with tide water on the
| Hudson river. Tue state of Illinois has a SINH
| lar work connecting Lake Michigan with navi-
| gable water on the Illinois river, thus making
| water communication inland, between the east
and the west and south. These great artificial
| water courses are the property Of the states
through which they pass, and pay toll to those
states. Would II not be wise states anship 10
pledge these states that if they will open these
| canals for the passage of large vessels the gem
eral government will look after and keep in
| with which they connect? to wit: The over
| slaugh on the Hudson, the Saint Claire fats
| and the Illinois and Mississippi rivers. This
would be a national work; one of great
value to the producers of the west and
south, in giving them cheap transporta-
| ton for their produce to the sea-board and
a market and to the consumers in the east, in
| giving them cheaper food, particularly of those
| articles of food which do rot find a foreign
market and the prices of which, therefore, are
not regulated by foreign demands
The advantages of such work are too OBJ
! Vious for argument. | submit the subject to
| you therefore without further comment.
In attempting to regain our lost commerce
and carrying trade, have heretofore called at
tentlon to the states south OF us Offering field
where much might be accomplished To
further this object suggest that sm all appro.
for the Secretary of the Navy to fit out naval
vessel TO ascend the Amazon river to the mouth
OF the Madeira, thence to EXPLORE that river and
its tributaries, into Bolivia and to report to Con-
gress at its next session, as soon Ms practical
BILE, the accessibility of the country by water
its resources, and the population so reached.
Such an exploration will cost but little, it can
do no harm, and may result i'll establishing a
trade of value to both nations.
In further connection with the Treasury De-
partment would recommend a revision and
codifcation of the Tariff laws, and the opening
OF more minis for coming money, with authOri-
ty to coin for such nations as may apply.
WAR DEPARTMENT..
The attention of Congress is invited to thn
recommendations contained in the report of the
Secretary OF War herewith accompanying.
The apparent great cost OF supporting the
army is fully explained by this report, and L
hope will receive your attention.
While inviting your general attention 10 all the
recommendations made by the Secretary ofWar,
there are two which 4 would especi ally invite
you to consider. First, the importance of pre-
pairing for war in time OF peace, by providing
proper armament for our sea-coast defences
Proper armament is Of vastly more Importance
than Notifications. The latter can be supplied