The sun. [volume] (New York [N.Y.]) 1833-1916, 1896-11-23
DEFECTS IN oun F1soAp SYSTEM.

scrlbed In this column last Monday. has not
yet been rekind!ed. Speculation on the Stock
Exchange has been confined to u few speoiultles,
concerning which various rumors. some OF them
containing n grain OF truth. but most Of them
being entirely false. have been. from time to time.
set afloat with moro or less effect upon prices.
Additional signs OF II revival in manufacturing
ana commercial business continue TO appear,
and our exports of agricultural produce exhibit
a gratifying increase. Money Is plenty, rs the
bank statement shows, ratios OF interest arc de-
clining, and all the conditions are favorable for
= return of q prosperity. which, however, docs
not hasten its coming merely because II 10 i'm
PATIENTLY awaited.
The probability Of any radical change in ou-
currency system at tho coming session Of Con-
gross Is SO small that II noed not be feared as n
hindrance to the renewal OF business activity.
1t 10 worthy of remark that. at the Chamber of
dinner, last Tuesday evening, the
subject was not referred to by any OF the speak
ers, and although It is confidently asserted that
the Secretary Of the Treasury, In his forthcom-
will the retiring of the
Government legal tender notes. and that the
President will. In his message. approve of the
recommendation there Is no likelihood that any
action by Congress will result from it. The
proposition 10 saddle upon the nation the pay.
ment of endless interest upon bonds to the
amount of s4oo, 600, 900 merely to crafty tho
partisans of the banks, is too monstrous to be
seriously considered. Besides, the contraction
which would follow an attempt to put
such q measure into execution would. as
soon a. Il became apparent, he resisted by the
banks themselves. The experiment. has already
been tried three times. and 1t has been as often
abandoned. In 1866 an act was passed direct
ing the Secretary of the Treasury to cancel
legal tender notes to the amount Of only
"a 600 ooo n month. but In 1868, after no moro
than $4,000. 900 Of them had thus been dealt
with. the public outcry against q continuance
of tho process became SO violent that the act
was repealed without debate. Again, when,
under tho Resumption act Of 1875. but $780,
900 GOO Of the notes had been withdrawn, an
other similar outcry compelled the passage OF
the act OF 1878, ~forbidding further Withdrawals
and directing the reissue ut the notes redeemed
after that date. A third contraction. result
ing indirectly from legislation, was again. In
1881, stopped by the veto of the bill which
produced 1t. For the refundinR of the Govern
ment bonds maturing in that year, Secretary
Carlisle. then a representative from Kentucky,
q bill, the provisions of which, be-
ing Misunderstood by the officers of the national
banks. led them, In advance OF its passage, to
begin depositine in the Treasury legal tenders
for the retirement of the bonds securing their
circulation. The amount thus withdrawn from
their reserves had not reached $40, 900, 600 be-
fore q panic set in, stocks fell, tho rate of inter-
est rose to one per cent. o day, and Mr.. Cariisle's
Funding bill. although 1t was q really meri-
torious measure. was vetoed by Mr.. Hayes to
prevent further mischief. With these lessons
of experience before their eyes the leaders Of
the party In power are not likely to repeat an
attempt which has thus three times received
the emn of the American people.
The real danger of disturbance to business lies
in An agitation for changes In the tariff. Mr..
Bourke Cochran. with the sound practical sense
which marked his speeches throughout the
~political campaign. told only the truth at tho
Chamber of dinner. when he said
that the pressing need of the Government. 1t
this moment 10 more revenue. For the fiscal
year 1904 our national expenditures exceeded
our national income S7o. 600. 900: for the fiscal
year 1sp4-5 the excess was nearly S43. 600. 900;
for the year 1866 It was over 500, 600. 600. and
for the current year 1t amounts thus far to
nearly $40. 600. 900, with the prospect that It
will be anywhere from $50. 600. 900 to $50, OOO.-
900 by June 80. 1897. The aggregate deficiency
since July l, 1898. 10, therefore. already S179,-
900, 900, and will certainly exceed $780,
600. 900 on July l, 1897. Up to this
time It has been met by selling bonds
under tho Resumption act of 1875, nominally
for tho purpose of providing gold for the re-
demption of the legal tender notes; but this de-
vice, now that the Presidential campaign is
ended. and instead of gold being Withdrawn
from the Treasury to redeem the legal tenders
II 10 paid in for them. is no longer available.
The money already procured by 1t will last some
months longer. but other measures will have to
be adopted II either Government bankruptcy or
Q fresh bond issue is TO be avoided.
The simplest and easiest step to take. and that
which would have the least Injurious effect. is,
obviously. the imposition of duties upon tea
and coffee, an increase d the duty upon sugar,
and an additional internal revenue tax upon beer,
leaving all the other existing duties and taxes
unchanged. This measure, however, would
probably not. on the one side, content the manu-
facturers. who demand still moro projection
than they are getting. nor. on the other, the free
traders. who object to any protection whatever.
With these two opposing parties In conflict.
Congress is not likely to come very speedily to q
decision. and. while It is engaged In debate, in
dustry must necessarily languish.
A matter of less. Expressing Importance. lint ona