Evening star. [volume] (Washington, D.C.) 1854-1972, 1894-01-11
NATIONAL FINANCES
Being Discussed by Secretary Car
Isle and tho Senate Committee.
TIE DEFICIT Is STEADILY GROWING.
A Desire to Settle the Whole
Problem Of Integrity.
P ROB ABLE BON DISS UF.

The finance committee of the Senate Is
going over the state of the treasury very
fully with Secretary Carlisle and will prob
ably take some action without waiting for
the House. The Constitution declares that
ali piils Tor raising revenue shall originate
In the House Of Representatives" but there
Is nothing to prevent the Senate expressing
an opinion on revenue legislation by resolu-
ton. and this course may be adopted. The
Senate has been regarded as the weak point
In the sound money campaign, and 1t Is
thought that an expression Of opinion by
resolution In favor Of Strengthening the gold
reserve and meeting the deficit in the treas
ury by an Issue of short-term bonds will
nave beneficial effect In stimulating early
action by the House and strengthening the
public credit. Such an expression in the
upper branch would leave no excuse for
longer delay by the ways and means COM
mittee and by the House. Secretary Car
Isle Is going over every aspect Of the sit
uation with the finance committee, now
that they have leisure and the House COM
mittee Is SO busy, with a view to winning
as many as possible Of the members of the
committee to the support of his program
py showing the necessity for It,
Reticent About His Policy.
The Secretary has been reticent about
stating publicly the exact policy which he
Iavors. because he desires the cooperation
OF the finance committee and is willing to
yield his own views to a certain extent
In order to secure harmony Of action He
Is now disposed to favor an issue of bonds
redeemable after five years at the pleasure
OF the government and bearing interest at
LIZ or per cent The deficit has been
50 steadily growing Of late that the plan
Tor a-temporary loan, redeemable after a
year or SO. has been partially abandoned
and 1t is thought best to put through a
comprehensive measure which will
strengthen the gold reserve at the same
time that 1t supplies the temporary de-
ncfency. The Secretary already has au-
thority to issue large amount of bonds
running FOR long periods at 4, 1-2 and 8
per cent, and in his animal report he did
not suggest any limit to the amount, but
or denominations for a shorter term to
meet such exigencies might arise. The
alternative proposition of a short term
loan, referred to in the Secretary's report
and In the recent bills Of Mr.. ONeil Of
Boston and Mr.. Harter of Ohio, may be
adopted II opposition to the issue of new
bonds appears too great to be quickly sur
mounted in the Senate. Secretary Carlisle
refused to commit himself absolutely to
Mr.: O'Neirs bill when 1t was shown to him.
and his caution IL explained 'byS his deter
mination and that Of the Standardization
to settle the whole problem Of the 'integ-
rity Of the treasury by one measure au-
thort1ing the issue of bonds The bond pro-
vision may be made 30 elastic that some OF
them can be issued for less than five years
II the secretary Is convinced that there Is
any. probability of surplus funds for their
redempt3on within that time.
How to Obtain Gold.
One Of the questions which caused trouble
last spring was the ability Of the treasury
to obtain gold or to pledge payment in gold
on United States bonds The statute simply
provides for their payment 'in coin." and
the silver men would resist strongly any at
tempt to change this to gold. They insisted,
while the United States was coming silver
dollars. that the bonds were redeemable in
silver as well as gold, and the legal argu.
ments were strong in favor Of this conten-
ton. No effort Is likely to be made to
change the wording Of the law but the fact
that the United States have planted them.
selves upon a gold basis by the suspension
Of silver purchases is thought to be suffi
cient guarantee that payment will be made
In gold. 1t Is believed at the Treasury De-
partment that no difficulty will be expert
the treasury when the purpose to maintain
the public credit IL clearly declared by Con-
gress The effort to draw gold from abroad
directly by the issue of bonds. 1t is thought,
securities are likely to be returned to this
country for redemption in gold in order to
hberate the coin for the purchase of the
bonds. The experience of European nations
In negotiating war loans has shown that the
gold reserve does not increase in anything
like the proportion of obligations issued
where the loan simply results in a transfer
of loanable capital. There is SO much gold
in the New York banks. however, and in
other parts Of the country, that 1t Is not
believed that any difficulty will be expert
enced in drawing 1t into the treasury when
once the purpose of Congress to protect the
public credit has been plainly shown and
the general cash balance has been increased
by transfer of credits to point which
win enable the treasury to retain the gold
which pours into its Golfers instead of pay
ing 1t out on current obligations.
An Eject ON the Public Mind.
That the state Of the treasury is be-
ginning to have its effect on the public
mind is indicated. in the opinion Of the
treasury officials, by the marked falling off
during the last few days in the payment Of
gold at the New York custom house and
the great increase in the payment of silver
certificates. These customs payments af-
ford sensitive barometer of the state of
feeling regarding the currency. and the re-
ceipts on Tuesday showed less than 20 per
cent Of gold coin and over 80 per cent Of
silver certificates. The proportions on De-
and less than 46 per cent Of silver certin-
Gates. This tendency to hoard the gold is
the more remarkable in view of the fact
that the New York subtreasury is paying
out gold freely on current obligations, be-
cause 1t has no other form of money, and
is keeping 1t in general circulation. The
treasury balance today showed a slight
gain in gold, which stood at $73, $685. S36, in
spite of the small payments at New York,
and included also $1S0j4, ,S24 in currency
The interest payments thus far this month
and some small redemptions Of matured
bonds have called for So i24, ,S27, which has
not yet been deducted from the currency
balance The specific demand for gold has
come to an end with the practical compile
tion of the interest payments, but 1t will
continue to be paid out as long as 1t Is the
only money available for current expenses.
and the redemption of the reserve in this
manner Is evidently causing alarm in New
York and throughout the business commu-
nifty.
Clerks Down With Grin.
The clerks and employees of the State,
to- ax.l