, 1897-12-07

o. e" r arI n
gold but the government. The b. nis are
not required to redeem In gold. The gov
eminent is Obliged to keep equal with
gold all It's outstanding currency and coin
obligations, while its receipts are not re-
CURED to be paid in gold. They are paid
IN every kind of money but gold, and the
only means by which the government
can, with certainty, get gold i, bv Dor.
rowing. 1t can get it in no other way
when 1t most needs 1t. The government.
without any liked gold revenue, is pledged
to maintain gold redemption. which it
has steadily and faithfully done, and
which, under the authority now given. il
will continue to do.
The law, which requires the govern
ment, after having redeemed its notes, to
pay them out again as current funds, de
mands u constant replenishmcnt of the
gold reserve. This Is especially so in
times of business panic, II when the
revenues are insufficient to meet the cx-
pen>es of the government. At such times
the government has no other way to sun.
ply its deficit and maintain redcl,Dtion
but through the increase of its bonded
debt, as vas done during the adminisyra
ton OF my predecessor, when Si2,-
a!1,+OO OF 1 IL per cent bonds
were issued and sold and the pro
ceedS used to pay the expenses of the
government in exc's of the revenues and
sustain the gold reserve. While it is true
thai the greater part of the proceeds of
these bonds were used to supply deficient
revenues, IA considerable portion was re
qulrcd to maintain the gold reserve.
W lth our revenues equal to our eXpendi-
ture-, there would be no deficit requiring
the Issuance of bonds. But if the gold re-
serve falls below $lO0,OD,Ooo how will it
be replenishcd except by selling more
bonds: Is there any other way practicable
under existing law? III serious question,
then, Is, shall we continue the policy that
has been pursued in the past; that is when
the gold reserve reichc, the point of
danger, Issue more bonds and supply the
needed gold, or shall we provide other
means TO prevent these recurring drains
upon the gold rcScrvcg If no further
legislation is had. and the policy of selling
bonds Is TO be continued. then congress
should give tic secretary of the treasury
2utnority 10 sell bonds at long or short
periods, bearing u less rate of interest than
Is now authorized by law | earnestly
recommend as soon rs the receipts %. the
government are quite sufficient to pay all
the expenses of the government, that when
any of the United states notes are pre-
sented for redemption in gold, and are re
deemed il gold. such notes shall be kept
and set apart, and only paid out in ex-
change for gold. This is an obvious duty.
If the holder of the United State more
prefers the gold and gets it from the gov.
he should not receive back from
the government u United States note
without paying gold in return for it. The
reason for this is made all the more ap.
parent whcn the government issues an
interest bearing debt to provide gold for
the redemption of United States notcs-a
non-intcrcst- bearing debt. surely it should
not pay them out again except on demand
and for gold. If hey are put out in any
other way they may return again to be
followed by another bond issue 10 redeem
~them-anothcr interest bearing debt to re-
deem u non interest. bearing debt.
In my view, ii is of the limos import
Ancc that the government should BIZ re.
lieved from the business of providing all
the gold required for exchange and cX-
port. This responsibility Is alone borne
by the government, without any of tho
usual and necessary banking powers to
help itself. The banks do not feel the
strain of the gold redemption. The whole
strain rests upon the government and the
size of the gold reserve in the treasury has
come to be, with or without reason. the
signal of danger Or of security. This
ought to be stopped.
Ii we are to have an era of prosperity in
this country, with sufficient receipts for
the expenses of the government, we may
feel no great embarrassment from our
present currency; but the danger still cX.
lists, and will be ever present mcnacing us
30 long as the existing system continues.
And, besides, it is in times of adequate
revenue and business tranquility that the
government should prepare for the worst.
We cannot avoid, without serious Con>c.
quences, the wise consideration and
prompt solution of this question
The secretary Of the treasury has out
lined u plan in great detail for the pUr
pose of removing the threatening re
]currence of u depleted gold reserve and
save us from future embarrassment IN
that count To this plan l invite your
careful consideration
l concur with the secretary of the treas
ury In his recommendation that national
banks be Flowed to issue notes to the face
value of the bonds which they have de
posted for circulation, and that the tax
on circulating notes secured by deposit of
such bonds be reduced to n half of per
cent per annum. l also join him in rec.
~ommending that authority be given for
the establishment of national banks with
. minimum capital of 81, go. This will
enable the smaller villages and agiicult.
ural regions of tho country to be supplied
with currency to meet their needs.
l recommend that the issue of natio nal
bank notes he restricted to the dcnpmina.
ton of $40 and upwards. If the suggeS.
ions l have herein made shall have the
approval of congress, then l would recon-
mend that national banks be required to
redeem their notes in gold.
The Cuban Problem.
The most important problem with which
this government Is now called upon to
deal, pertaining to its foreign relations.
COHCerHS lts uuby toWaTlS spun dIlu tnt
Cuban instruction. Problems and con
ditions more or less in common with
those nov existing have confronted this
mt various times in the past.
The story OF Cuba for many years has
been one Of unrest; growing discomfort;
an effort toward larger enjoyment Of
liberty and ~self-control; OF organized re
sistence to the mother country; of de.
preston after distress and warfare, and
Of Intellectual settlement to be followed
by renewed revolt. For no enduring per-
Tod since the enfranchiscment of continen.
tai possessions of Spain in the western
continent has the condition of Cuba. or
the policy of Spain toward Cuba not
caused concern to the United States.
Tn prospect from time to time that the
weakness of SPANS hold upon the island
and the political vicisSitudeS and embar-
easements of the home government might
lead to the ~ransf of Cuba to u contin.
tai power, called forth. between 1923 and
1850, various emphatic declarations of the
policy of the United States to permit no
disturbance Of Cuba's connection with
Spain, unless in the direction Of indie.
pendence or acquisition by the United
States through purchase; nor has there
been any modification OF this declared pol
Icy since upon the part of the government
The present Instruction broke out in
February, 1895. 1t Is not my purpose At
this time to recall its remarkable increase
or to characterize its tenacious resistance
against the enormous forces Inassed
against 1t by Spain. The revolt and the
efforts to subduc 1t carried destruction TO
every quarter of the island. developing
wide proportions and defying the efforts
code Of war has been ~disregarded, no les,
~ by the Spaniards than by the Cubans.
The existing conditions cannot hut fill
this government and the American people