Evening star., 1896-01-03
He Reviews the Financial System
of the Government.
AGAINST RETIREMENT OF GREENBACKS
Deficiency Of Revenue the Cause
Of Present Difficulty.
ADMINISTRATION CRITICISED

'"The President in his annual message to
Congress confined himself to two important
subjects said Mr.. Sherman; zone our for
eign relations, and the other the condition
of our national finances. He followed it by
another message on the application of the
Monroe doctrine to the controversy between
Great Britain and Venezuela.
while Congress has heartily, perhaps
too hastily, but with entire unanimity, sup
ported him in maintaining the interests
and honor of our country in the field of
diplomacy, it has not and will not approve
his recommendations on the more important
subject of our financial policy, and espe-
cially of our currency.
He Has Mistaken the Cause.
He has mistaken the cause of our pres
ent financial condition in attributing it to
the demand for gold for United States notes
instead of the deficiency of revenue caused
by the legislation of the-last Congress. He
places the effect before the cause. He pro-
poses as remedy the conversion of the
Onlted states notes and the treasury notes
into lnterest-bearing bonds. thus increas-
ag ing the lnterest-bearing debt nearly $780,
OOO.oO He proposes a line of public policy
mat VIII produce sharp contraction Of our
currency, add greatly to the burden of ex-
lstLns oeDts, and arrest the progress of al
most every American Industry which now
competes with foreign productions,
Ihe President is supported in these views
Dy Mr. carlisle, his able Secretary of the
treasury, in his report to Congress. 1t is
with difidence I undertake to controyert
tnelr opinions, but my convictions are so
strong that they are in error that I hope
1ne strength OF the facts will submit to the
Senate will convince 1t that the true line
II public policy is to supply the government
with ample means to meet the current ex-
Penoltures and to pay each year portion of
tne puohc debt The gold reserve provided
Tor the redemption of United States notes
can then be easily maintained without cost.
except the loss OF interest on the gold in
the treasury, but with a saving of interest
on United States notes and treasury notes
or nve times the interest lost by the gold
held In reserve. A vastly greater benefit
than saving interest is secured to our neonIe
by a national paper currency at par with
com, supported by the credit Of the United
STATES, and redeemed on demand in coin at
the treasury in the principal city of the
United States.
The Only Difficulty.
''The only difficulty in the way of an easv
maintenance 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 expenditures an
tnorlzed by Congress. If Congress had pro-
vloed the necessary revenue or If the Presi
oent ana MI. Carlisle had refused to exnend
appropriations not mandatory in form. but
permlsslve, so as to confine expenditures
"itnin receipts, they would have no difficulty
with the reserve. This would have heen .
siaiWart act In harmony with the Presidents .
character, and certainly within his nowsr
All appropriations which are not provided to
but not mandatory, and his refusal to axe
peno money In excess of the revenues of
tne government would not only he Justified
i3 Dy pubic policy, but would have been heart
States. He knew as well as anv one 4bet
since the close of the civil war to the date
OF his inauguration the expenditures of the
government had been less than its receipts.
! nave mere table which shows the re-
to 1893. A Aooo
MI Sherman reviewed what had been ar
complished by the sinking fund of the pov.
efnhient since the close of the war. and said :
The Mckinley Law.
The President, in his recent annual mes
sage, complains that the law Of October g
1880, known as the Mckinley act. was in
efficient for the purposes of revenue That
law, though it largely reduced taxation bv
placing many articles on the free list and
granted bounty for the production Of
sugar, yet did not reduce revenues below
expenditures, but provided a surplus of
$S7 239, 1925 June 80. 1891, and s9914 Az. f;
June 80. 1892, and s., 341 ,67420 on the 3(lth
of June, 1888, when Mr.. Cleveland was Pros
ident and 3 democratic majority in both
houses or Congress had been elected all
pledged to repeal the Mckinley act and to
reduce duties. That the Mckinley act did
rot produce more revenue In 1888 and 1871
Is not matter of surprise. Any tariff law
denounced by the party in power with a
promise to repeal it and to reduce duties
would prevent importations under the old
law and thus lower the revenue Earlv in
DECEMBER. 1898, at the first regular session
OF congress during Mr.. Cleveland's term, a.
bill was formulated, aid, as soon as prac-
t1cable, passed the House of Representa-
tives. That bill met the hearty approval Of
the President. If it had become a law as
originally presented, the deficiency in the
revenue would have been much greater than
row, but conservative democratic Senator'S
with the aid of republican Senators, greatly
improved the House bill, added other duties
and changed the scope of the measure With
these amendments 1t became q law The
President refused to sign it, expressing his
opposition to the Senate amendments. and
yet now supports it when deficiencies have
been greatly increased. when the public debt
Is Increasing, and doubts are expressed az tn
the ability of the government to maintain
its notes at par with coin. The President
makes no mention in his message of these
deficiencies, no mention Of the issue of in
terest-beariEg bonds to meet them Tb
Secretary OF the Treasury is more frank N
his statement He reports a deficiency of
69,SlS 50 during the fiscal year ending
June 30, 1884, and for the year ending lime
3O 1895. 81, ,SO5, ,223 Is, and for the six months
all $13O. 90, ,O23. 40
mo complaint was made that the McKin-
ley law was inefficient for the purposes Of
revenue when the Wilson bill was pending
The objection to the Mckinley law was that
1t was protective tariff and the Wilson
bill was revenue tariff -.
Cause for the Demand for Cold
1.-THE deficiency of revenue was the prfm-
ary cause of the demand for gold for the
United States notes. The gold boarded for
resumption purposes was not separated
from the money received for current rev
enue, and this revenue being insufficient to
meet expenses the gold accumulated for
redemption purposes was drawn upon to
make good deficiencies. This created n
doubt OF the ability of the government to
maintain the parity of United States notes
with coin, and led to their presentation for
redemption in coin. The draft on the treas
ury for coin during this administration has
heen greater than the amount of deficiency
OF revenue during the same period. In
every aspect in which the subject present.
SPECIAL NOTICES :