American citizen. [volume] (Canton, Miss.) 1864-1890, 1873-12-13
Report Of Secretary Richardson.

The report of the Secretary of the Treasury is a
formidable document Astounding in suggestions
and figures, an abstract of which is here given;
The net revenue for the fiscal year ending june
30. ISIS was $3.50. .3s so4, and the ordinary expen-
res. ESQ saS24o. leaving surplus revenue Of S43,-
3ss- $50. which has been applied to the reduction
Of the public debt. The total reduction OF the
debt, from March l. 1879, to Nov. I, 1873 has been
S5o5 os, ls.5-the annual saving of interest result
ing therefrom being 81, 80 49, OF The receipts
for the first quarter OF the fiscal year ending
June 80 los4,-from July l. 1873. to september 80
1S.3-were- including the balance in the Treasury.
june 80 sss. S25 s96.S39, and the expenditures
for The same period were $I3S.50s .353. leaving a
balance in the Treasury. September 81. 1913, OF
S.3.ueS9S5. The estimated receipts from the re-
manning three quarters of The current fiscal wear are
$is71uO.0 o. and the estimated expenditures -, o.
$3.50 O. leaving an estimated deficiency in the
revenue Of $i3S3 600. The estimated receipts fol
the fiscal year ending June 30. 1879, sIU5, 100
Coz and the estimated expenditures for the same
period $3l9, 900.
REFuNDINe THE PUBLIC DEBT
Inc process OF funding the Public Debt is pro
ceeding satisfactorily. The total amount Of sub
scriptons to the per cent funded loan So50o 600
an equal amount Of 5aos as fas, a. The the shbscrp
lions mature. The sum of S15,50n.0O1 received
from Great Britain, in payment of the Geneva
award has been used to redeem an equal amount
OF per cent bonds. and these have been cX
changed FOR an equal sum in bonds in the pei
cent funded loan. When the subscriptions above
mentioned have matnred, there will have been
effected conversion of 100 00o.000 of the SEQ loan
into the per cent loan since January last, making
an annual saving OF Sloec,ouV IN interest The
whole amount converted since the passage of the
act has been S3looo0,000, and the annual saving
of interest 81, 00.00.
REVENUES AND ESTIMATES.
The alterations aud changes in the tarid laws
and the removal of considerable amount Of in
ternai revenue taxation, have caused the revenues
Tor the fiscal year to fall much below those Of pre-
Sions years During The months of September and
diminuIiou has been caused. mainly in consequence
Of the financial crisis. bur it is gratifying TO find
ras>ment, the receipts in coin from customs have
oeen greater than the proportionate amount re-
the pnbIic debt and all other Expenditure which
are payable in coin.
The revenues have already fallen of sufficiently
10 make II important and necessary TO exercise the
greatest economy In appropriations and expendi-
lures for the future. ana should there be a
vtval OF business at an early day, and increase in
receipts over Ihose of the past Iwo-and a half
months. additional means will be required to meet
expenses should such he the case / recommend
additional taxation. judciously laid and 80 "a TO
De the least burdensome upon the people and the
rowing money and increasing the public debt.
THE BANKS AND THE CRISIS
The prevailing practice of paying interest on
deposits attracts currency from all parts of the
country 10 large cities, especially TO New York
the great financial center. at seasons of the wear
when there Is comparatively little for currency
elsewhere Immense balances accumulate in Neyy
York where, not being required by the demands
Of legitimate and ordinary business. they are
loaned on call at higher rate Of interest than
mat paid to depositors. and are used in specula-
uon Every year at the season when the demand
ssets in from the West and South for currency 10
agricultural products, there occurs stringency in
the money market arising from the calling in of
such loans 10 meet this demand. Until this year
though annually creating some embarrassment,
tins demand has been met without serious diff
Guilty During the past summer: anticipating the
usual autumn s'ringency. the Treasury Depart
ment sold gold while the market price was high
currency abundant. and bonds for sale in the mar
ket were scarce, and while there was a surplus of
gold in the Treasury and thereby accumulated
about S1I.0o0.UOO in currency. with the view of
using the same or such part thereof as might be
IN he ctasss ofh fnr III.
FUND at times during the autumn and winter when
they could be bought Al a price not above par in
gola, or IN meeting demands upon the Treasury as
This year there was a 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 a
rapid calling in of demand loans and a very gen
eral run on the banks for the withdrawal of de-
posls Entire confidence was manifested in Unit
ed States notes. and even in National Bank notes.
and they were drawn wherever they could be OBJ
tanned, ana were largely boarded with as much
financial distress when thar was the circulating
selves unable to meet the demands upon them
currency in circulation became exceedingly scarce
embarrassed. In this condition of things great
pressure was brought to bear upon the Treasury
Department to afford relief by the i=sue of United
States notes Several propositions looking TO the
relief of the money market were made to the
Treasury Department, which il was compelled for
various reasons to decline
The Executive Department of the Government
was anxious to do everything in its power under
the law, and with due regard to the protection of
tne treasury and maintenance of the public credit,
to alay The panic and TO prevent disaster TO the
legitimate commercial and Industrial interests of
relief in any Of the many forms in which thar re-
lief was xsked. 1t was decided therefore to
to be open to 1.-THE purchase Of bonds for The
SINKING fund to such extent as the condition of
the Treasury would allow. and thus release con-
siderable amount Of currency from its vaults
Purchases OF bonds were commenced on the morn
ing Of Sept al. and continued until the 9th when
1t became evident that the amount Offering for
purchase was increasing TO an extent beyond the
power OF the Treasury to accept, and the purchas-
ing was closed afse bonds to the amount OF about
$13.Ur-OOO had been bought. and without the use
OF any part OF the St4,0oO,OoO of United States
notes generally known as the reserve.
The currency paid out Of the Treasury for bonds
aided much to strengthen many savings banks. and
TO prevent panic among their numerous deposit
tcrs' VINO began TO be alarmed, and had there de-
veioped an extended run upon these useful in
sttuions it would have caused widespread disaster
and distress 1t also fortified other banks and
checked the general alarm TO some extent But
the loss OF confidence in the value of great
amount OF corporate properly which Immediately
followed the failure Of banking houses connected
with largely indebted corporations the disrrus of
the solyency OF many other institutions the doubt
business was supposed to be greatly extended and
the legitimate effect thereof in disturbing the bust
ness OF the country, could not be avoided by any
circulation already existing Confidence was TO be
eventually restored only by the slow and cautious
values. and making Investments ACCORDINGLY and
by conducting business a firmer basis and
more regard TO real soundness and intrinsic values
INTEREST on DEPOSITS.
There can be no doubt that the practice nv
banks OF allowing interest on deposits payable on
demand, Il pernicious, and fraught with danger
and embafras sment to borrower and lender ar
well as to general business inieresfs Deposiis
PAYABLE on demand should be limited to that
surplus which individuals require over and above
tneir Investments and no part of that from which
they expect an income. Such deposits are com
parauyely stable in average amounts and consIi-
tute healthy basis for banking purposes within
proper limits. which prudent bankers know how IN
determine. But, il deposit accounts are emploved
as Temporary Investments, the interest attracts a
interest Is paid. and where speculation is most ac
I'VE at seasons when as much profit thereon cannot
be secured elsewhere. With the first return of
activity In legitimate business these temporary in
vestments are called in. and jeopardize, in their
sudden withdrawal. the whole business OF the
banks both affecting legitimate deDositors on The
one hand by excitement and di-trust. and on the
other, creating "A condition of things in which bor-
rowers on call are also unable to respond The
banks have borrowed their money of depositors on
call. They have loaned ii on call to spectators
who by Its USE have contributed to initiate the
prices OF stocks or merchandise which have been
the subject OF their speculations. The Spectator
wants IL 10 carry stocks till he dispose of them
without loss. Thin he Ii unable 10 do in a strin-
gent money market The banks, their deposiiors
and borrowers. all want il at the same time and
Of course. astrinsency is developed which spread.
Distress throughout the country. The system Gre
.tes an immense amount Of debts payable on de-
mand- all Of which thus suddenly and unexpected-
~ mature at The first shock of financial or CONNER
clai embarrassment in the country and at the very
time when most needed by the debtors and when
they are least able TO respond. There i no safety
Tor corporations or individuals whose capital EN-
ployed Is wholly or mostly borrowed on call
SPECIE PAYMENT
There can be ooubt that during the eight
years since the rebellion, there has been growing
IN rt.-fn -