The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-12-17

business conditions of the country and
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 established;
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 continue without
serious interruption it is estimated that
there will be surplus of nearly 100000
during the fiscal year 1897.
During the fiscal years 1894 and 1895
the ordinary expenditures of the Govern
ment have been dt creased $27, 2S2, 656 20,
compared with the fiscal year 1898, and 1T
is believed that with the cooperation OF
Congress further reductions can be made
in the future without impairing the etfl-
cheney of the public service"
In regard to the bond issues Secretary
Carlisle saws:
Between the LIST day of February, 1894,
and the 18th day of March, 1895, three is
sues of bonds were made, amounting i'll
the aggregate to $162, 315, 400. The pay
ments into the treasury on account of the
pleted until after the 1st day of December,
1894, and it soon became evident that the
transaction had not been effectual to stop
the drain of gold. On the 8th day of Feb
ruary, 1885, the reserve had been reduced
to SAL, $40 ISL, and several million more
had been demanded, part of which was
taken out and afterward returned to the
treasury on account of the temporary res
toration OF confidence, resulting from the
fact that it became generally known that
measures were about to be taken for the
replenishment of the reserve"
Detailing the amount of bonds issued
and gold received, the Secretary proceeds
as follows:
1.-THE beneficial effects of this transac-
ton were felt Immediately, not only in
this country, but in every other having
commercial or financial relations with our
people. Confidence in our securities as
safe and profitable investments were at
once restored to such an extent that gold
was returned to our market for sale, and
very considerable demand for securities
was created abroad, but the most crafty
ing eyid ences of improvement in our con-
dition were afforded by the revival of
business among our own people, the in
creased activity and extension of our do
nestle industrial and commercial opera
tons, the rise in the prices of our principal
agricultural products and the general
feeling of relief and security which be-
came apparent in every part of the coun-
try. These encouraging indications Of in
creasing prosperity still continue, and it is
reasonably certain that, il our progress is
not checked by repetition of the de-
mands upon our resources, or by failure
to meet the Just expectations OF the peo-
pie in respect to the reformation of our
fiscal system, we are entering upon an era
of material growth and development not
surpassed in our history.
s'But," adds Secretary Carlisle. "our fur
Their progress toward complete restora-
ton of confidence and prosperity is seri-
ously impaired by the defects in our
currency laws"
The remedy which Secretary Carlisle
proposes for the financial ills is thus set
forth:
i'There is but one safe and effectual way
to protect our treasury against these de-
mands, and that is to retire and cancel the
notes which constitute the only means
through which the Withdrawals can be
made. Many partial and temporary rem
edies may be suggested and urged with
more or less plauslbility, but this is the
only one that will certainly remove the
real cause of our troubles and give assur-
ance of permanent protection against their
recurrence in the future.
"This can be most successfully and eco
nomically accomplished by authorizing the
Secretary of the Treasury to issue from
time TO time bonds payable in gold, bear
ing interest at a rate not exceeding per
cert per annum and having long time to
run, and to exchange the bonds for United
States notes and treasury notes upon such
terms as may be most advantageous to the
Government or sell them abroad for gold
whenever, in his judgment, it is advisable
to do so, and use the gold thus obtained in
redeeming the outstanding notes.
SIN order to further facilitate the sub
stitution OF the other currency for the re-
tirement of legal tender notes, the Ma
tional banks should be authorized to issue
notes equal in amount to the face value of
bonds deposited to secure them, and the
tax on their circulation should be reduced
to one-fourth of L per cent per annum.
When the National banking system was
established the bonds of the United States
were selling below par in the market and
there was consequently sufficient reason
for limiting the amount of notes to be
issued to 80 per cent of the face value of
the securities deposited, but this reason
has long since ceased to exist and the limi-
tofion ShOr1l6 he removed
LAS part of the plan for the redemp-
ton and retirement of the legal-tender
notes, the treasury should be relieved
from the responsibility for tie redemption
of National bank notes, except worn, mutt
lated and defaced notes and the notes of
failed banks, and each association should
be required to redeem its circulation at its
own Office and agencies, to be designated
by the Comptroller of the Currency, as
was the case prior to the passage of the act
of June 20, 1874, or, if this is not consid-
cred expedient and the present system of
current redemption by the treasury is