Omaha daily bee., 1883-12-05

Leaving n pal
ance of. .... $50, 1873, 25S,9 3
If the revenue for the fiscal year
which will end on Juno 80, 1885, be es-
timated upon the basis of existing laws
the secretary is of the opinion that for
that year the receipts will exceed by
millions the ordinary ex penditures,
including the amount devoted to the
fund.
REDEMPTION OF BONDS.
Hitherto the surplus, as rapidly ms it
has accumulated, has been directed to
the reduction of the national debt and
as a result the only bonds nov outstand-
ing which are redeemable at the pleasure
of the government are the 3 per cents
amounting to about 1906, 000, 900. The
ID per cents, amounting to $3.50, 600, 900
aud the $737, O00,0 900 of 4 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 be paid at maturity, and
the monies requisite for the redemption
of the four per cents will be in the treas
ury many years before those obligations
become payable. There are cogent rea-
sons, however, why the national indebt-
edness should not be thus rapidly cxtin'
guished. Chief among them is the fact
At~aN N,1,, 40 a~nAu,vA Na-an. .,n1gn
such rapidity attainable.
REDUCTIONS ADVISED.
In q communication to the con-
gress at its last session l recon-
mended that all excise taxes be
abolished except those relating to dis
titled spirits, and that substantial reduc-
items also be made on the revenue from
customsA A statute has since been en-
acted byIwhich tho annual tax and tariff
receipts 6f the government have been cut
down to the extent of at least fifty or
sixty millions of dollars. While l have
no doubt that still further reductions
may be wisely made / do not advise the
adoption at this session of any measure
of large diminution of tho national rev.
enue. The results of the legislation OF
the last session of congress have not MS
yet become acknowledgement to justify
any radical revision or sweeping moditica'
ton of existing laws. In the interval
which must elapse before the effects o.
the act of March 3, 1883, can be definite
ly ascertained, q portion at least of the
surplus revenue may be wisely applied t.
the long neglected duty of rehabilitatine
our navy and providing first class defencei
for the protection Of ourhar55ors. This !:
a matter to which | shall again advert.
THE NATIONAL CURRENCY.
Immediately associated with the fnan.
cial subject just discussed is the import
ant question as to what legislation L
needed regarding the national currency
The aggregate amount of bonds now OF
deposit in the treasury to support tn,
national bank circulation is $3.50, 600,
600. Nearly $500, DOC, 900 of this amour
consists of three per cents, which, as al
ready stated, are payable at the pleasur,
of the government, and are likely to b.
called in within less than four years, un
less, meantime, the surplus revenue
shall do diminished. The probable eff
feet of such an extensive retirement o
the securities, which are the basis of tn,
national bank circulation, would be sue
a contraction of the volume of the cur
rency as to produce grave commercial EN-
barrassments. How can the danger b
obvirted2 The most eflectual plan, an
one whose adoption at the earliest praC
ticable opportunity l shall heartily al
prove, has already been indicated.
THU THREATENED CONTRACTION.
If the revenues of the next four year
shall be substantially commensurate wit
the expenses, the volume of circulatio
will not be likely to suffer any materii
disturbance, but if on the other han
there shall be a great delay in reducin
taxation, it will become necessary eiths
to substitute some of the other forms {
currency in place of the national ban
notes, or to make important changes |
the laws by which their circulation
now controlled. In my judgment TIL
latter course is far preferable. / con
mend to your attention the very inte,
esting and thoughtful suggestions on TIL
subject, which appear in the secretary
report. The objections which he urge
against the acceptance of any other secu
tiles than the obligations of the govern
ment itself as a foundation for nation
bank circulation, seem to me insuperab
for averting the threatened contraction
METHODS FOR AVOIDING CONTRACTION
8 Two courses have been suggests
either of which is probably feasible. Or
is the issuanceof new bonds, having mar
. years to run, bearing a low rate of int
est, and exchangeable upon specific
terms for those now outstanding. I'll
other course which commends itself
my own judgment as the better, is h
enactment of a law repeating the tax
circulation, and permitting the banks
issue notes for an amount equal 10 nine
per cent of the market value instead
as now the face value of the deposite
bonds. ! agree with the secretary
the belief that the adoptic
of tins plan will afford Il
necessary relief.