The Somerset herald. [volume] (Somerset, Pa.) 1870-1936, 1883-12-12
WHOLE NO. 1891.

laws lNNACbaAN - VI NAAN
opinion that for that year the re-
ceipts will exceed 60,000,000 the or
dinary expenditures, including the
amount devoted to the sinking fund.
Hitherto the surplus, as rapidly as
| 1t has accumulated, has been devo-
ted to the reduction of the National
Debt. As a result the only bonds
new outstanding which are redeema-
ble at the pleasure Of the Govern
ment are the three per cent. :,
amounting TO about 305, 100000, the
/ four aud one-halfper cent. 5, amount
ing to 250,000,00O, and the 737 ,OOO,-
1 900 four and half aud four per
cents are not payable until 1891 and
1907. respectively. If the surplus
shall hereafter be as large as the
Treasury estimates now indicate
the three per cent. bonds may all be
redeemed at least four years before
any of the four and one half per
cents can be called in. The latter,
at the same rate of accumulation OF
surplus, can he paid at maturity,
and the money requisite for the
redemption of the four per cent. 5
will be in the Treasury many years
before these obligations become pay
able. There are reasons, however,
why the national Indebtedness
should not be thus rapidly extin-
guished. Chief among them Is the
fact that only by excessive taxa
tion is such rapidly attainable.
In a communication to the Con
gress at its last session / recon-
mended that all excesseS of taxation
be abolished, except those relating
tc distilled spirits, and that a sub
stantial reduction also be made in
the revenues from customs. A stat
ute has since been enacted by which
the annual tax and Tariff revenue OF
the Government has been cut down
to the extent of at least SJO,OOO,OUO
or S60,O00000 While | have no
doubt that still further reductions
may be wisely made. l do not adj
wise the adoption at this session OF
any measure for large reductions of
the national revenues. The results
of the legislation of the last session
of the Congress have not rs vet be-
come sufficiently apparent to justify
anv radical revision or sweeping
modification of existing laws IN the
interval which must elapse before tie
effects of the act of March 81, 1888,
can be definitely ascerlained.
/ A portion at least OF the surplus
!, revenues may be wisely applied 10
the long-neg lected duty OF rehabilita-
ting our navy and providing coast
| defenses for the protection OF our
harbors. This is a matter to which
shall again avert.
Immediately associated with the
financial subject just discussed is the
important question, What legisla-
tion is needed regarding the nation
al currency The aggregate amount
of bonds now on deposit IN the
Treasury to support the National
Bank circulation is about S3jO,OUO,
600. Nearly two hundred millions
of this amount consists of 3-per-
cents, which, as already stated, are
payable at the pleasure OF the Gov
ernment, ard are likely to be called
in within less than four years, unless
in the meantime to surplus revenues
shall be diminished
The probable effect Of such an ex-
tensive retirement OF the securities
which are the base of the National
Bank circulation would be such "a
contraction of the volume oil
the currency n To produce grave
embarrassment. How can the dan
ger be obviated The most eiiectual
plan, and one whose adoption at the
earliest practicable opportunity L
shall heartily approve, has already
been indicated. If the revenues of
the next four years shall make 1t
| substantially commensurate with
| the expenses, the volume of circula-
ton will not be likely to suffer any
material disturbance but if. on the
other hand, there shall be great de
lay in reducing taxation, 1t will be
come necessary to substitute some
other form of currency In place OF the
National Bank notes, OF to maze
important changes IN the laws b.
which the circulation Is now con
trolled. In my Judgment, the latter
course Is far preferable.
| commended to your attention
the very interesting and thoughtful
suggestion upon this subject which
appears in the Secretary's : report.
The objection which he urges
against the acceptance of any other
securities than the obligations of the
Government itself as a foundation
for the National-Bank circulation
seems to me insuDerable for ayertius
the threatened contraction. Two
COURSES have been suggested, either {
of which i. probably feasible. One /
is the issuance OF new bonds having /
many years to run, bearing a low 4
rate of interest, and exchangeable |
upon specified terms with those now
outstanding. The other course.
which commends itself to my own
Judgment as the better, is the en-
actment of a law repeating the tax
on circulation and permitting the
banks to issue notes for an amount
equal to 80 per cent. of their market
value, instead of, as now, the face
value of their deposited bonds. /
agree with the Secretary in the belief
that the adoption of this plan would
afford the necessary relief.
The trade dollar was coined for
the purpose of traffic in countries
where silver passed at its value as
coined by its weight and tineness. /
1t never had legal-tender quality.
Large numbers of these coins enter {
ed variously into the volume of our ]
currencev. By common consent !
their circulation in domestic trade
has now ceased, and they are thus
becoming disturbing element.
They should not be longer permit
ted to embarrass our currency sys- :
tenn. | recommended special leg !;
islation for their receipt by the Trea- ,
sury and the mints as bullion at a
small percentage above the current a,
= 81. 81 III