The Portland daily press., 1890-12-03
THE TREASURY REPORT.
[coNTINUED FROM FIRST PAGE.l

Topeka, Kans., Chicago, H.. Philadelphia,
Pa, Knoxville, Tenn. New York City, N. Y,
and Concord, n. H. to make their payments
quarterly on the fourth of May, August,
November and February of each year.
SURPLUS REVENUE.
The surplus revenue was largely increased
last summer by the pending changes in tariff
legislation. And the available balance in the
treasury was also greatly augmented by the
act of July IA, 1890, which transferred over
$54,000,000 from the bank note redemption
fund to the available cash. This sudden and
abnormal increase was the cause of much con-
Germ and some embarrassment to the depart
ment.
10 prevent an undue accumulation of money
in the treasury, and consequent commercial
stringency, only two methods were open to the
secretary namely, to deposit the public money
in national banks or to continue to purchase
of United States bonds on such terms as they
could be obtained. For reasons heretofore
stated, the former method was deemed unwise
and inexpedient and the policy of bond pur-
chases was continued. On account of the
rapidly diminishing supply of United States
bonds on the market, and of the fact that the
sudden end great increase in the surplus COM
PEELED the immediate purchase of large quanti-
sufficient amounts and at fair prices.
The total amount of 4 and Az per cent
bonds purchased and redeemed since March 4,
1883, is $211, 832 450. and the amount expend-
ed therefor is $246, 620.74l.72. The reduction
in the annual interest charge by reason of these
transactions is 1885,, 609.75, and the total
saving of interest is $5l, 576.706,0l
In my judgment, the gravest defect in our
present financial system is its lack of ella sticty
The national banking system supplied this de-
feet to some extent by the authority which
the banks have to increase their circulation in
times of stringency, and to reduce when money
becomes redundant; but, by reason of the
high price of bonds, this authority has ceased
to be of much practical value.
The demand for money in this country, is
so irregular that an amount of circulation,
which will be ample during ten months of the
year, will frequently prove SO deficient during
the other two months as to cause stringency
and commercial disaster. Such stringency may
occur without any speculative maniulations
OF money, though, unfortunately, it
is often intensified by such mauipulations.
The crops of the country have reached pro-
portions so immense that their movement to
market, in August and September. annually
causes dangerous absorption of money. The
lack of sufficient supply to meet the in
creased demand during those months may en- :
tail heavy losses upon the agricultural as we'll
as upon other business interests. Though
financial stringency may occur at any time,
and from many causes. yet nearly all of the
great commercial crises in our history have
occurred during the months named, and unless
some provision be made to meet such con-
tingencies in the future, like disasters may be
confidently expected.
/ am aware that tho fhnnrv obtaipe in ha
minds of many people, that if there were no
surplus in the treasury, sufficient amount of
money would be in circulation, and hence no
stringeney would occur. The fact is, however
that such stringency has seldom been produced
by treasury absorption, but generally by some
sudden or unusual demand for money entirely
independent of treasury conditions and opera
tons. The financial pressure in September
last, which at one time assumed threatening
character. illustrates the truth of this state
ment. There was at that time no accumula-
ton of money in the treasury from customs or
internal revenue taxes, nor from any other
source that could have affected the money
market. On the contrary, the total disburse-
ments for all purposes, including bond pur-
chases and interest proponents, during the
last preceding fifty three days, had been about
$29,000,000 in excess of the receipts from all
sources.
The more recent financial stringency in No
vember, Immediately after the disbursement of
over $l00,000,000 for tire purchase and re-
demption of bonds within the preceding four
months, furnishes another forcible illustration
that such stringencies are due to other causes
than treasury operations.
TARIFF.
The purpose of the tariff act of October last
was TO effect needed reduction of revenue and
such an adjustment of duties as would ade-
quately foster and encourage home industries
while maintaining the standard of American
wages. This end, it is believed, has been ac-
complished. More articles than ever before
have been placed upon the free list, rates have
reduced on many others, and increased duties
have been imposed when deemed necessary to
the adequate protection of our agricultural and
manufacturing interests.
The law has been too short time in opera
ton to warrant discussion herein of its MANY
details. 1t is believed that the measure is
sound in principle and that it's several classif-
cations. rates, and other provisions have been
adjusted upon comprehensive view of the
vast interests of the whole country. The law
embraces so many and such complex interests
that it is quite possible a practical test may
disclose the necessity for some notifications
and corrections, but stability and certainty, in
the revenue laws, are so essential to our finan-
cial and industrial prosperity, that it is earn
estly hoped this law may have a fair trial be-
fore any radical and sweeping changes shall be
attempted. The new industries which it was
confidently expected would spring up under
its fostering care, and the new home markets
which would thereby be opened for American
labor and products, will certainly fail of reali-
cation, if any well-grounded fear shall be
as to the stability of the law, or of the
principle of protection which it embodies.
SILVER.
In my last annual report. presented. for the
consideration of Congress, plan for the utili-
cation of the silver product of the United
States.
The material points of difference between
the measure recommended and the one adopted
by Congress, are that the new silver law limits
the purchases of silver to 4, 800. 900 ounces per
month, without distinction as to domestic and
foreign production, instead of taking the entire
silver bullion product of the United States as
proposed, and omits the bullion redemption
feature.
Under the operations of this law, the amount
OF silver purchased from August Is, 1890. to
to December l, 1890, aggregated 16,77S,IS5
line ounces, costing Sis, 1871 ,075, an average of
SLIPS per fine ounce.
Notwithstanding the fact that the advance in
the price of silver following the passage of the
law has not been maintained, the secretary
ventures to express the belief that the new sill
yer act is great improvement over the law
repealed. and that its beneficial results will
eventually commend it to general approval.
AS yet the period of time has been too brief to
really test the merits of the law, and the perm
anent effect which it will have on the price of
silver
One thing is certain, that it has been the
means of providing healthy and much needed
addition to the circulating medium of the
United States.
IL must be apparent to any careful observer
of the movement of silver, that the recent
violent fluctuations in price are mainly due to
speculative operations in the large surplus of
from eight to ten million ounces, which has
not been absorbed by treasury purchases This
downward tendency has been materially as
sisted by severe and almost constant strin-
gency of the money market. This surplus was
in the first instance, by the
from the market, by producers
and spectators, for some months prior to the
passage of the new silver act, of the current
product OF American silver, in the hope of
securing a better price. 1t has been main
tanned and augmented both by importations of
lorelgn silver and by falling off in the export
OF domestic silver, the latter occasioned |
doubtless by the fact that in the purchases of |
silver unuer the new silver law the treasury