The San Francisco call., 1896-12-22
Interesting Figures Given
by the Secretary OF
the Treasury.
Expenditures of the Government
Are Much in Excess Of
the Receipts.
An Arguma ant in Favor of Retiring
United States and Treasury
Notes.

AOalNO1O 1ON, IL. W. OcCs &A.- LIZ
annual report of the Secretary of the
Treasury, transmitted to Congress to-day,
deals extensively with the financial sltua-
ton. Mr.. Carlisle summarizes the con-
dition of the treasury and says the issue
and redemption of circulating notes Is
not the proper function of the Treasury
Department or any other department OF
the Government While the Government
has power to borrow money, 1t is not its
duty to issue public obi cations merely
for the purpose OF providing paper copy
for use In transaction of business, nor
has it the constitutional power, in his
opinion, to make its promises legal tender
in payment OF private debts.
The Secretary refers to the power In
which the entire financial system has been
placed by the constant agitation OF the
currency question, and adds: "There is
but one absolutely certain way to remove
this delicate and dangerous question from
our party politics and that is to retire and
cancel the notes. We must not be deluded
into feeling OF security by the fact that
there has been suspension OF gold with
drawals during The past few months"
The Secretary holds that without ref
ormation of our currency we cannot safely
rely upon permanent accessions TO our
trade balances in our favor.
Secretary Carlisle shows the revenues of
the Government from all sources to have
been $409 ATS, ,408, and the expenditures
$434, ,678. .654. which leaves a deficit for the
year ended June, 1895. of SIS, 203. 245. In
addition to the ordinary revenues col
lected during the year, the cash in the
treasury was increased by the following
sums:
From the sale of sloo. oOo, 900 per cent
thirty-year bonds, Sill, 166. 246, and from
the issue of per cent bonds in liQuida-
tion of interest accrued OH refunding GER
tificates. converted during the year. $4130,
making total of Sill, l70, ,376.
As compared with the fiscal year 1895,
the receipts for 1896 increased $40, 102, 205.
of which the following are thu rim ipal
items OF increase: Customs, ST. S63. 134 in
ternal revenue, So, 341, 1872; prohts on coin
age, bullion deposited, etc., 81, ,256, ,512;
postal service, S.. 5.516 080.
There is shown to have been a decrease
in the ordinary expenditures of $4,0l5, ,S52.
The revenues of the Government tor the
current fiscal year are thus estimated
upon the basis of existing laws:
From customs, $148. COO 900; from in
ternal revenue, S l50, 600, 900; miscellaneous
$50, 793. .120; total estimated revenues,
$407, ,793, 100. The expenditures for the
same period are estimated at SAT-, ,293. 120,
leaving an estimated deficiency Tor the
year of $64 sol, 900.
Thes estimates of receipts and expendi-
lures are made upon the assumption that
there will be no substantial change in ex-
isting business conditions and that the
present scale of public expenditures will
not be reduced.
But if our ordinary bdsiness activity
should be resumed and the consumption
of articles subject TO taxation should in
crease to its normal proportions there
may be IN fact no deficiency in our reve-
nues.
In his discussion of the currency ques-
tion the Secretary makes an exhaustive
argument in favor of the retirement from
circulation of United States and treasury
notes.
Mr.. Carlisle renews his recommendation
made in his report that the Secretary
of the Treasury should be authorized
to issue f-om time to time bonds paya-
bic in gold, bearing interest at a
rate not exceeding 3 per cent per
and to exchange such bonos for United
States notes and Treasury notes upon
such terms as might be most advantageous
to the Government, or to sell the bonds
abroad for gold whenever in his judgment
it might be advisable to do so, and to use
the gold thus obtained in making re-
demptions of outstanding notes. He
gives in detail his reasons for carrying
this plan into effect.
for the retirement of United States notes
and treasury notes." says the secretary,
lit will fail to afford complete protection
to the Government against demands tor
sold in the future unless it includes relief
fer the treasury from the obligation to re-
deem national bank notes, except such as
are worn, mutilated or deiaced, and the
notes of failed banks, or requires these in
stitutions to keep their 8 per cent re-
demption fund in gold and to deposit
gold coin for the withdrawal OF bonds
when circulation is to be surrendered or
reduced"
Secretary Carlisle also renews his
recommendation for sucn amendments to
the National banking laws as ould per-
NIT the issue of circulating notes equal in
amount to the face value of the bonds de-
posted, and reduce the tax on notes to
one fourth of 1 per cent per annum,
and that authority pe given to establish
branch banks for the transaction of all
kinds of business now allowed, except the
issue of circu ating notes.
On the subject of protection in this con-
ection the Secretary says in part:
so long as the income of the Govern
exceeded it's expenditures the fact that
protective duties were destructive of rev.
enue, although clearly apparent to all
who observed the practical operation of
the system, did not attract the attention
of the public generally; but the situ-
alton has been materially changed
since 1892, and hereafter it will not be
posi- BILE to sacrifice revenue to protection
without seriously embarrassing the fiscal
affairs of the Government by depriving it
of an income sufficient to defray its ex-
penditures. If the usual proportion of
this income is hereafter to be derived from
taxes on imported goods, the protective
theory must be abandoned as the basis of
our legislation upon tie subject, and a
well considered and consistent revenue
system must be substituted in it's place;
and, i'll my opinion, this can be done with
out material injury to any trade or indus
try now existing in this country.