Birmingham state herald., 1895-12-17

the 1st day of December, 1895, was $177,-
 406, ,SS6, being $98,072, 420 in excess of the
 actual gold reserve on that day, and $1I,-
 406, ,3S6 in excess of any sum that 1t would
 be necessary to use for replenishing that
 fund in case the secretary should at any time be able to exchange currency for
 gold. There is, therefore, no reason to doubt the ability of the government to discharge all it's current obligations dur
 ing the current fiscal year and have large cash balance at it's close, without imposing additional taxation in any form upon the people, but I adhere to the opin- ion heretofore expressed that the secre- tary of the treasury ought always to have authority to issue and sell, or use in the payment of expenses, short time bonds bearing low rate of interest, to supply casual deficiencies in the revenue. While the situation does not require
 any legislation for raising additional rev enue by taxation at this time, it is such as to require the strictest economy in appropriations and public expenditures. Nearly every appropriation is in terms, or by necessary implication, a direction to the executive authorities to expend the money and therefore the responsi- bility for an increase or reduction of ex- pendtures rests primarily and mainly | upon congress.
 With a complete return to the normal
 
 a proper legislative and executive super | vision over expenditures, the revenue | laws now in force will, in my opinion, | yield ample means for the support of the | public service upon the basis now estab- | lished; and upon the assumption, which
 seems to be justified, that the progress
 now being made toward the restoration | of our usual state of prosperity will con 1 tinue without serious interruption. it is | estimated that there will be surplus of | nearly $7000,000 during the fiscal year 1897. During the fiscal years 1894 and 1895 | the ordinary expenditures of the govern
 ment have been decreased S27, ,2S2. .656 as | compared with the fiscal year 1893, and | it is believed that with the cooperation | of congress further reductions can be made in the future without impairing the | efficiency of the public service.
 The Bond Issues.
 Between the 1st day of February. 1894,
 and the 18th day of March, 1895. three is-
 sues of bonds were made, amounting in
 the aggregate of $162,31540
 l The payments into the treasury on ac- l count of the second bond sale were not | entirely completed until after the 1st day | of December, 1894, and it soon became ev- l ident that the transaction had not been | effectual to stop the drain of gold. On the Sth of February, 1895, the re- | serve had been reduced to $41 ,340,1S1 and | several millions more had been demand | l afterwards returned to the trea sury on l account of the temporary restorat tion of | confidence resulting from the fact that i it became generally known that meas
 ures were about to be taken for the re- | plenishment of the reserve.
 l The large withdrawals in December, | 1894, and in January and the early part | of February, 1895, were due almost en- 1 tirely to a feeling of apprehension in | the public mind, which increased from d 1f.v | proportions of a panic, and 1t was evil | dent to all who were familiar with the | situation that unless effectual steps were | promptly taken to check the growing l distrust the government would be com-
 pelled within few days to suspend gold | payments and drop to Appreciated sil- yer and paper standard. More than $43,- | 100000 of the amount withdrawn during | the brief period last mentioned was not l demanded for export, but was taken out | by people who had become alarmed on | account of the critical condition of the
 treasury in its relations to the currency of the country.
 Congress, although earnestly appealed | to for relief, having failed to make any | other provision for meeting the emer- | gency, a contract, the particulars of which were immediately communicate ted | to that body, was entered into on the Sth | day of February, 1895, for the purchase of l $500, GOO ounces of standard gold coin at | the price of $17.S0,41 per ounce, to be | paid for by the delivery of United States | bonds having thirty years to run and bearing per cent interest and the gold | to be deposited at the United States sub- | treasuries. By the terms of the contract | not less than one-half of the gold was to | be procured abroad, and the parties with | whom it was made stipulated that they would "as far as lies in their power ex- | ert all financial influence and will make | all legitimate efforts to protect the treas ury of the United States against the
 withdrawals of the gold pending the con- | plete performance of the contract" This undertaking was faithfully and | efficiently carried out, and no gold was | taken from the treasury to be used in | paying for the bonds, as had been done 1 in the two former cases, nor was any l withdrawn for shipment until after the | delivery had been completed under the 1 contract.
 | After a large part of the gold had been | furnished from abroad the secretary, in order to prevent disturbance in the rates | of foreign exchange at critical period and avoid condition which would force | gold exports and consequent withdrawals | from the treasury, acquiesced in de- l parture from the literal terms of the con- | tract that one-half of the coin should be | procured abroad and accepted deposits | of gold then held In this coun- try to complete the delivery. Ordinary
 
 | the plan to protect the treasury against | withdrawals should not be endangered | by insisting upon a strict compliance | with all the details of the contract, es- | pecialy as the government could sustain | no loss. and the whole amount of gold | stipulated for was secured
 | The details of the bond issues are then | stated, and the secretary says:
 The beneficial effects of this transac- | tion were felt immediately, not only in | this country. but in every other having l commercial or financial relations with | our people. Confidence in our securities | as a safe and profitable investment was l at once restored to such an extent that l they ceased to be returned to our own | market for sale. and a very considerable | demand for them was created abroad; | but the most gratifying evidences of i'm | provement in our condition were afforded | by the prompt revival of business among | our own people. the increased activity and extension of our domestic, industrial | and commercial operations, the rise in | the prices of our principal agricultural products and the general feeling of re- | lief and security which became apparent