The Delaware farmer., 1883-12-14

III LIS AuGood{SG " OOlSLGSHg I6Sluelt
Arthur says AT the threshold of your
deliberations, / congratulate you upon
the favorable aspect of the domestic and
foreign affairs of this Government.
Our relations with either countries con-
tinue to be upon friendly footing.
During the year there have been per
fected and proclaimed consular and
commercial treaties with several nations,
with which such treaties did not hereto
fore exist.
THE SURPLUS RE VENUE.
IF the revenue for the fiscal year which
will end on June 80, 1885, be estimated
upon the basis of existing laws, the
Secretary is of opinion that for that year
the receipts will exceed $50, 900, 900, the
ordinary expenditures including the
amount devoted to the sinking fund.
Hitherto the surplus, as rapidly as it
has accumulated, has been devoted to
the reduction of the national debt. As
a result the only bonds now Outstand-
ing which are redeemable at the pleasure
of the Government are the three per
cents, amounting to about $3O5, 600, ,OOO
The four and one-half per cents,
amounting to $3.50, 1000, COO, and the
S737, 100000 four per cents. are not
payable until 1891 and 1907, respec-
lively.
If the surplus shall hereafter be as
large as the Treasury estimates now in
dictate, the three per cent. bonds may all
be redeemed at least four years before
any of the four and one-half per cent.
can be called in. The latter at the same
rate of accumulation of surplus can be
paid at maturity, and the moneys requi-
site for the redemption of the four per
cents. will be in the Treasury many
years before those obligations become
payable.
There - cogent reasons, however,
why the national Indebtedness should
not be thus rapidly extinguished; chief
among them is the fact that only by ex-
cessive taxation is such rapidity attain
able.
In q communication to the Congress
at its last session, recommended that
all excise taxes be abolished, except
those relating to distilled spirits, and
that substantial reductions also be made
in the revenue from customs. A statute
has since been enacted by which the
annual tax and tariff receipts of the
Government have been cut down to the
extent of at least fifty or sixty millions
of dollars.
While I have no doubt that still
further reductions may be wisely made,
I do not advise the adoption at this ses-
sion of any measures for large diminu-
ton of the national revenues. The re-
suits of the legislation of the last session
of the Congress have not as yet become
sufficiently apparent to justify any radi-
cal revision or sweeping mOdif cation of
existing law. In the interval which
must elapse before the effects of the act
of March 3, 1883, can be definitely as
certained, a portion of the surplus rev.
enues may be wisely applied to the long
neglected duty of rehabilitating our ma
tion and providing coast defences for
the protection of our harbOrs. This is
matter to which shall again advert.
THE NATIONAL CURRENCY.
Immediately associated with the finan-
cial subject discussed is the important
question, What legislation is needed
regarding the national currency?
The aggregate amount of bonds now
on deposit in the Treasury to support the
national bank circulation is about $780,
100000. Nearly $200,0O0,00O of this
amount consists of three per cents,
which, as already stated, are payable at
the pleasure of the Government, and
are likely to be called in within less
than four years, unless, meantime, the
surplus revenues shall be diminished.
The probable effect of such an exten-
sive retirement of the securities which
are the basis of the national bank c;rcu-
latiOn would be such contraction of the
volume of the currency as to produce
grave commercial embarrassments.
How can this danger be Obviated?
The most effectual plan, and one whose
adoption at the earliest practicable op-
portunity 1 shall heartily approve, has
already been indicated. If the revenues
of the next four years shall be kept sub
stantially commensurate with the ex-
penses, the volume of circulation will
not be likely to suffer any material dis
turbance.
But if, on the other hand, there shall
be great delay in reducing taxation, it
will become necessary either to substi-
tute some other form of currency In
place of the national bank notes, or to
make important changes in the laws by
which their circulation is now controlled.
In my Judgment the latter course Is
far preferable. commend to your at
tention the very interesting and thought
ful suggestions upon this subject which
appear in the Secretary's report.
The objections which he urges against
the acceptance of any other securities
than the obligations of the Government
itself as a foundation for national bank
circulation seem to me insuperable.
For averting the threatened contrac- 4
ton two courses have been suggested,
either of which is probably feasible.
One is the issuance of new bonds, haY-
ing many years to run, bearing low
rate Of i1ntornct n1nd nrchannaahla uDOn