The Portland daily press., 1895-12-17
1.-THE ENDLESS CHAIN.
secretary Carlisle's Report Out al
Last.
IT WAS SENT TO CONGRESS
YESTERDAY.

He Advocates: Retiring of Treasury Notes
| Issuing No Bank Notes Under Ten
| Doilars-A Reduction of Public Service
Expenses- Extension of Bank System,
| etc., etc.
| washington, December 16 THE report
OF Hon. John G. Carlisle, Secretary Of
the Treasury, was sent to Congress today.
IL was, OF course. a long and important
document, but that portion of 1t which
referred to national finances was as fol-
| lows:
At the beginning Of the last fiscal year.
July !, 1894. the cash balance in the
treasury, excluding all current liabilities,
but including gold reserve of Sc, 47S,
06; was S117, 5S4. 1876. 13, and at the
close OF the year, June 80, 1895, the cash
balance, excluding all urrent liabilities,
but including gold reserve of $10O, O,0OO,-
600, was s195, $40, 1853. ST. showing an in
crease of $77, ,657, 717.74. The excess of ex-
pendltures over the receipts during the
year was $42, ,SO5, 1913. IS, as against
deficiency Of $50, SOB, $50. So during the
fiscal year 1894. The total receipts during
the fiscal year 1895 were SIS, SOS, 055 81
| greater than the receipts during the fiscal
year 1894, and the expenditures were $11,
| 329. 9Sl. 81 less than during the year 1894
| The revenue derived from customs during
the fiscal year 1895 exoeeded the revenue
derived from the same source in 1894, by
the sum of $40, $40, ,0S6 SO, but the receipts
under the internal revenue laws and
from some other sources, were less than
during the previous year, 30 that the net
increase of revenue was S15, ,658, 055. 86, as
above stated.
If the income tax provision contained
In the act Of August 2S, 1894. had been
sustained by the courts, it is believed
that the deficiency for the year would not
have exceeded 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 1895,
hut that there would be surplus of near
ly s29, 900, 900.
Discussing the "endless ohain'' theory
OF the deficiency, the Secretary says:
| The total excess of expenditures over
receipts July 1, 1898, to December /, 1895,
was $3.50. 2a1, b028; and of this sum $22, :
1852, 900. 3S was paid out of the balance on
hand at this date in excess CT $10O, 900. 600,
and the remainder has been supplied by
ths use of United States notes and treas
lary notes presented for redemption, and
THIS received into the treasury in ex-
ch age for gold coin. The act of May 81,
1Rs provided that when any United
States note may be 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 he re-issued and paid out again
and kept in circulation.
1t is clear that when any of these notes
have been redeemed they do not consti-
tute part of the reserve fund, but be-
come part of the general cash assets of
the treasury, to be used in the same
manner as other money belonging to the
government. Whenev they could by ex-
| changes, be used to procuresgold for the
replenishing of the reserve, they have
been SO applied, but, when this could not
be done, they have been treated as avail
able funds in the treasury and issued
in payment Of public expenses None of
my predecessors in office have ever made
any distinction between the notes re-
ceived in payment of the ordinary
revenue and notes presented by the
holders and redeemed in coin, but such
notes have been used indiscriminately as
the exigenoies of the public services re-
quired.
Secretary Carlisle quotes in support of
this proposition the report of Secretary
Congress enacted May 81, 1878, making it
amanda tory upon the secretary of the
treasury to reissue the notes.
Discussing the prospects of the revenue
and expenditures coming together in the
future the Secretary says:
The cash balance In the treasury on the
first day of December, 1895, was SLIT, 406,-
8o6, being sos, 072 420 in excess of the
actual gold reserve on that day, and
$77. 406, 1856 in excess of any sum that it
would be necessary to use for replelish-
ing 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 its currency obligation
during the present fiscal year and have a
large cash balance at its close, without
imposing additio nal taxation in any
form upon the people; but adhere to the
opinion, heretofore expressed, that the
Secretary of the Treasury ought always
to have authority to issue and sell or use
in the payment of expenses, short time
bonds, bearing p low rate of interest, to
supply casual deficiencies in the revenue.
While the situation does not require
any legislation for raising additional
revenue by taxation at this time, it is
| such as to require the striotest economy
in appropriations and public expendi-
lures. Nearly every appropriation is in
| terms or by necessary implication, q
| direction to the executive authorities to
expend the money, and therefore, the re-
| sponsibility for an increase or reduction
| OF expenditures rests primarily and main
ly upon Congress.
With complete return to the normal
| business conditions of the country. and
| a proper legislative and executive super
vision over expenditures, the revenue
| laws now in force will, Ill 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 oon-
| tinue without serious interruption, it is
| estimated that there will be surplus of
nearly 81, ,00O 900 during the fiscal year
| 1897. During the fiscal years 1904 and
| 1925 the ordinary expenditures of the
government have been decreased S27, 2S2,
656 20 as compared with the fiscal year
1S93 and it is believed that, with the CO.
operation of Cong ess further reduction
can DO made in the future without
lmpairing the efficiency of the public
service
The Secretary goes on to give the history
OF the recent bond issues. He then says
There is but one safe and effeotual way
1 10 nrnfpnt arainGt fbASA 6R-