National Republican., 1883-12-05
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If the revenue for tho fiscal year which
will end on June 80, 1855, be estimated upon
the basis of existing laws, the secretary is OF
the opinion that for that year tho receipts
will exceed by $GO,00OOOO the ordinary OK.
pcnditurcs including the amount devoted tC
tho sinking fund.
Hitherto tho surplus as rapidly as it has
accumulated has been devoted to the reduC.
tion Of the national debt.
AS q result the only bonds now outstand-
ing which arc redoemablc ut the pleasure OF
the government are the 3 per cents, amount
ing to about S3)5,O0O,000
The 81 per cents, amounting to S25OOOO,-
GOO, and the S131, 100000 per cents are not
payable until 1891 and 1907 respectively.
If the surplus shall hereafter be as large
MS the treasury estimates now indicate, the
3 per cent. bonds may all be redeemed at least
four years before any of the il per cents can
be called in. The latter at tho same rate of
accumulation Of surplus can be paid at ma
turity and the moneys requisite for the re.
demptiOn of 4 per cents will be in the
treasury many years before those obligations
como payable.
There arc cogent reasons however, why
the national indebtedness should not be thus
rapidly oxtinguished. Chief among them is
the fact that only by excessive taxation is
such rapidity attainablc.
] In communication to the congress Mt its
at session | recommended that all exci.s
taxes he abolished, except those relating to
distilled spirits, and that substantial reduc-
tions be also made i'll the revenues from Gus
toms. 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 $50,00000O or $60,000,O00.
While have no doubt that still further re-
ductions may be wisely made | do not advise
the adoption, at this session, of any measures
for large dimnution of the national rev.
enuos. The results of the legislation of the
last session of the congress have not as yet
become sufficiently apparent to justify any
radical revision or sweeping notifications of
existing law.
In the interval which must elapse before
the effects of the act of March B. 1888, can be
definitely ascertained portion, at least of
the surplus revenues may be wisely applied
to tho long neglected duty of rohabiitating
our navy and providing coast defenses for the
protection of our harbors. This is o matter
to which shall again advert
Immediately associated with the financial
subject Just discussed is the important ques-
tion what legislation is needed regarding the
national currency.
The aggregate amount of bonds now on
deposit in the treasury to support the ma
tional bank circulation is about $3.50, ,000, 900.
Nearly 5000 100000 of this amount consists
of per cents, which, as already stated, are
payable at the pleasure of the government,
aud are likely to be called in within less than
four years unless meantime the surplus rev.
enucs shall be diminished.
The probable effect of such an extensive
retirement of the securities, which are the
basis of the national bank circulation, would
be such contraction of the volume of the
currency as TO produce grave commercial
GInbarrassments.
L. mi
most etleCtual plan, and. one whose adoption
at the earliest practicable opportunity shall
heartily approve has already been indicated
If the revenues of the next four years shall
be kept substantially commensurate with the
expenses, the volume of circulation will not
be likely to suffer any material disturbance.
But if, on the other hand, there shall be
great delay in reducing taxation it will be.
come necessary either TO substitute some
other form of currency in place of the ma
tiOnal-bank notes or to make important
changes in the laws by which their circula-
tion is now controlled.
In my judgment tho latter course is far pre-.
ferable. l commend to your attention the
very interesting and thoughtful suggestions
upon this subject which appear in tho secre-
tary's report.
Tho objections which he urges against the
acceptance of any other securities than the
obligations of the government itself as q
foundation for natioual bank circulation seem
TO me insuperable.
For averting tho threatened contraction
two courses have been suggested, either of
which is probably feasible. One Is the issu-
ancc of new bonds, having many years to
run, bearing u low rate of interest, and ex-
changeable upon specified terms for those
now outstanding. The other course, which
commcnds itself TO my Judgment as the
better is the enactment of law repeating
the tax on circulation and permitting the
banks to issue notes for an amount equal to
90 per cent Of the market value, instead of,
as now, the face value of their deposited
bonds. j agree with the secretary in the be-
lief that tho adoption of this plan would af-
lord the necessary relief.
The trade dollar was coined for the purpose
of traffic in countries where silver passed at
its value rs ascertained by its weight and
ineness. 1t never had a legal tender quality.
Large numbers of these coins entered, how
ever, into the volume of our currency. BY
common consent their circulation in domestic
trade has now ceased and they have thus be-
come disturbing element. They should not
be longer permitted to ombarrass our currency
system. j recommend that provision be made
for their reception by tho treasury and tho
mints as bullion, Mt u small percentage above
the current market price Of silver of like
lneness.
The secretary of the treasury advises a con-
Solidation Of certain of the customs districts
Of tho country, and suggests that the Presi-
dent be vested with such power in relation
thereto Us is now given him in respect to
collectors Of internal revenue by section
3lil OF the revised statutes. The statistics
upon this subject, which are contained in his
report, furnish of themselves strong argu-
mUnt in defense Of his views.
At the adjournment of congress the nun.
ber Of internal revenue collection districts
was 1876 by executive order dated June 25
l-aj, | directed that certain Of these districts
c consolidated. Tho result has been "a re-
dugtiOn Of one-third their number, which ut
present is but eighty-thr0e.'
from tho report Of tho secretary of war il
vii! be seen that in only a single instance has
there been any disturbance Of the quiet con-
.itiOn Of our Indian tribes. raid from
Ie%icO into Arizona was made in March last
ny "a small party Of Indians, which was pur-
sued by Gen. Crook into the mountain
regions from which il had come. 1t Is conf.
drntly hoped that serious outbreaks will not
again occur, and that the Indian tribes which
hCyc for 50 many years disturbed the west
will hereafter remain in peaceable submission
| again call your attention to the present
condition Of our extended seaCOast, upon
which are 80 many large cities whose wealth
and Importance TO the country would In time
Of war invite attack from modem armored
ships against which our existing defensive
works could give no adequate protection
Those works were built before the introduce
tiOn Of modern heavy rihod guns into mari
time warfare, and II they arc not put in an
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