The daily morning Astorian. [volume] (Astoria, Oregon) 1883-1899, 1896-04-24
DEFICIENCY OF REVENUE

Bankers Magazine.
Senator John sherman, OF Ohio. has a
paper In the current number OF The
Forum" on this topic, except hat he
has put II in the form " positive asser-
tons instead OF INTERESTINGLY. Mr.,
sherman Is ~indispuIably the best in
formed on the public finances Of any
living American, and his long and dts
tinguished career gives weight to any
views that he may express on questions
Of governmental policy. He is not only
an able statesman. but an exceedingly
adroit ~pacliuciGn. and il may not be well
to entirely forget this latter fact in con-
sidering some Of the points set forth In
The Forum article.
Senator Sherman starts out with the
proposal made by President Cleveland TO
convert the United States and Treasury
notes into an interest-bearing debt OF
about SGc.O0. eo. which is criticized as a
measure that would result in a sharp
contraction Of the currency. q greatly
TO the burden OF existing debts and ar
rest the progress Of our industries. The
Ohio senator holds that the true line OF
public policy is TO furnish the govern
ment with enough funds TO meet current
expenditures and 10 provide ach year
tor the payment Of a part OF the public
debt. He says that the sold reserve
could then be maintained without costs
but with "a saving Of interest on United
States notes and Treasury notes OF five
times the interest lost by the sold held
in reserve"
Senator Sherman states that The only
difficulty in the way OF an easy main
tenance OF our notes at par with coin
Is the fact that during this administra-
ton the revenues OF the government have
not been sufficient to meet the cxpendi-
lures authorized by congress-"
Contrasting the operation Of the Nc
kinley law and the Wilson law as pro-
ducers OF revenue, IL IL asserted that
During the twenty-five months Of the
Mckinley law October. lSR-9D the aver
age monthly surplus was s1,lS,S2L Dur
ing the existence OF the Wilson law
September, 1894, TO December. 1851 the
average monthly deficiency was A.e9.ea |
II the Mckinley Law Was, in the opinion
OF the president. inefficient 'or revenue, |
he should have said OF the Wilson Law
that ii was bounteous in deficiency"
After going into the details OF the oper-
atoms Of these two laws. the senator
again makes the positive assertion that
The deficiency OF revenue was The pri-
mary cause OF the demand Tor gold for
United States notes" This position is
maintained at great length.
From July !. 1879. TO July !. 1889. the
redemption Of United States notes in
gold averaged less than three million
dollars a year. while during the last
three and one-half years the redemption
Of United States and Treasury notes ex-
ceeded one hundred million dollars for
each year. From 1875 to $50 the go4d
reserve increased from 2p.JO0.O6O to $780,
VO'Oo, and this increase was made With
out cost TO the treasury. the gold being
received in exchange for paper
Mr. Sherman does not agree with those
who think that the Withdrawals OF gold
have been due to the operations Of the
silver Laws. On this point he says:
The Bland-Allison act was in force from /
1873 to 1880, when the accumulation OF
gold occurred. and the great bulk OF
gold was withdrawn after the repeal OF
the act Of July H. 1890" He gEsO says
that while he was secretary Of the
the government received over
50,0o.B9 Of gold In exchange fer silver
and United States notes, and
this was done after the BlamI-AIlison
act vas in force and the silver certi-
Gates was issued under that ART.
As to the ENDLESS chHn,' CT the re-
OF the notes when once redeemed,
I Is stated that the right to reissue is a
ANNF15dig lliEltlN 70 a elEfulEIlIk UCte, /
the United States only doing whnt every
bank does. Instead Of Joining in the
Try against this provision OF the law.
Sherman says 1T furnishes a
note for circulation better thar any
yet devised by mortal man."
There is no lack Of explicitness In these
statements as to the defcienry Of reve-
hue and it's results, for in concluding
his branch Of his topic Senator Sherman
Nor would deficiencies rave oc-
cured had not the president and both
houses Of the ffty-tIrird congress, then
n political sympathy. united in passing
4 law reducing the revenl below eI-
Denditures for the hrst time since the {
Of the war, and compelled the
authorities to apply-a fund Gre
ited for the redemption Of United States
notes to meet the ordinary expenses OF
The government. This demonstrated J
is tn. source Of an our financial a
difficulties" I
II is recommended that the no es should
not be reissued except IN exchange for 4
gold coin. and also that the gold reserve /
should be separated 10y law from the
cash assets Of the treasury.
Senator Sherman estimates that de-
iuctinR the notes destroyed or losr and
hose held as bank reserves. the actual 5
@AAASNAAN ~ ~ OAhAF hONfD III III .
~,ulatiOn does not exceed S22E. CgD.O1. He I
kinks that with a provision in the law z
hat notes redeemed with coin shall not !
De reissued except for coin, the value 7
md stability Of our currency can never !
De endangered. He also favoFs a law {
compelling the banks 10 keep their re- 1
'eryes in United States notes or Treas /
Try notes only. arguing that the ma
-lonal banks are creations Of the govern 4
and that they ought not 10 be al (
owed TO do anything that end to dis s
the notes In which they may re-
leem their circulation.
As to the other remedies to be applied,
Sherman would have congress at
1nce provide sufficient revenues to meet J
public expenditures. The invasion and g
.nisapplication Of the gold reserve he re- y
yards as being Of much greater injury
han the imposition Of ten times the
mount Of taxation. /
What is said In regard to the reissue Of
States notes is somewhat novel 4
md interesting. 1T is asserted that the .
continued reissue Of United States notes
IS mandatory. This is not a fair con-
i%tructiOn Of the law. The plain mean