Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1895-12-17
FAILS TO EXPLAIN.
Secretary Carlisle at Last
Makes Annual Report,
He ADMITS Small Deficit of Sl7 ,0OO-
600, Over Estimates.
But Has Nothing New or Sa isiac.ory In Line
Of Explanation.

Washington, Dee. l6.-The annual re.
port OF Hon. John G. Carlisle, cretary
OF the treasury, was sent to Congress. to.
DAY. IL was, of course, long and i'm
portant document, but that portion of il
which referred to national finances was as
follows:
AL the beginning of the last fiscal
year, July 1894, the cash balance in the
treasury excluding all current liabilities,
but Including a gold reserve of s64, s73,
o24. O6, was Sll7, 5s4, 436 IL, and at the
close of the year, June 30 1895. the cash
balance, excluding all current liabilities.
but Including gold reserve of 500, 900,
600, was sl95, 2i0, 1887, showing an in
crease of 81, 657, 717.74 The excess of ex-
penditures over receipts during the wear
was SAG, sos, 22S IS, as against deficiency
of 500, s03, 260.5s during the fiscal wear
1894
The total receipts during the fiscal year
1895 were SIS, Cos, 055 Sc greater than the
receipts during the fiscal year 1894. and
the expenditures were Sll, 329, 9S1. % less
than during the year, 1924 The revenue
derived from customs during the fiscal
year 1895 exceeded the revenue derived
from the same source in 1894, by the sum
of $50, $40, 0S6. SO, but the receipts under
the internal revenue laws, and from some
other sources, were less than during the
previous year. so that the net increase of
revenue was Sl5, COS, 055 SO, as above
stated.
If the income tax provision contained
in the act of August %, 1894, had been sus
tanned by the courts, it is believed that the
deficiency for the year would not have ex-
ceeded the amount estimated in my last
annual report. In that report the opinion
was expressed that the laws then in force
would not only yield an ample revenue
during the fiscal year 1896, but that there
would be a surplus Of nearly 500 900, 600
This opinion was based upon the suppose
ton, which then seemed to be well
founded, that all the sources of revenue
provided in the act of Aug. 2S, 1894.
would be available, and that, owing to the
higher rate of taxation imposed upon dis
titled spirits and some other articles, the
receipts under the internal revenue laws
would be very considerably increased; but
the decision of the supreme court, holding
the income tax provisions of the act to be
unconstitutional, and the fact that the
receipts from internal revenue did not in
crease as anticipated but actually fell off
s3, $50, 560.79 during the fiscal year 1895,
as compared with the previous year, not
withstandiDg the higher rate imposed on
spirits and other articles, have greatly al
tered the situation and | am now of the
opinion that there will be a deficiency of
about SIT, 000 600 during the current fiscal
year.
Discussing the endless chain theory
of the deficiency, the secretary says: The
total excess of expenditures over receipts
from July /, 1898, to Dec. !, 1895, was
$3.50, % 023; and of this sum S22, 462,-
2g0 So was paid out of the balance on
hand at this date in excess of 500, 600,
900, and the remainder has been supplied
by the use of United States notes and
treasury notes presented for redemption
and thus received into the treasury in ex-
change for gold coin. The act Of May 81
1878, provided that when any United
States note may he redeemed or be re.
ceived into the treasury under any law,
from any source whatever, and shall be
long to the United States, they shall not
be retired, cancelled or destroyed, but they
shall be reissued and paid out again and
kept in circulation
st is clear that when any of these notes
have been redcemd they do not constitute
a part of the reserve fund, but become Il
part of the general cash assets of the treas
ury. to be used in the same manner as
other money belonging to the government.
Whenever they could, by exchanges, be
used to procure gold for the replenish-
ment Of the reserve, they have been So ap-
piled, but when this could not he done,
they have been trusted as available funds
in the treasury and feissued In payment of
public expenses. None of my predecessors
In off ce have ever made any distinction
between the notes received in payment of
the ordinary revenue, and notes presented
by the holders and redeemed in coin, but
such notes have been used indiscrimi- |
nately as the exigencies Of the public ser
vice required.
Secretary Carlisle quotes in support Of
this proposition the report of Secretary
Sherman for 1877. which led TO the law of |
Congress enacted May 81. 1878. making |
TO mandatory upon the secretary Of the |
treasury to reissue the notes. Since the |
of that act, be says the tight |
and duty of the secretary of the treasury
TO reissue the ola legai tender notes, no /
matter how received into the treasury. |
provided they belong to the United States, !
has never been questioned in any quarter, |
and as to the treasury notes issued under |
the silver purchasing act they must be re
Issued when redeemed in gold, or, if can
celled. standard silver dollars must be is |
sued in their place; for il this were not |
done, there would be smaller amount of |
such notes outstanding than the cost of
the silver bullion and the standard silver
dollars coined therefrom and held in the
treasury, and this condition is expressly
prohibited by the statute under which the /
notes were issued. Whether these notes
are reissued, or destroyed and standard |
silver dollars substituted for them. the
practical result is the same, for in both
cases the secretary would be using notes