The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1900-12-05

since the passage Of the refunding act.
abundant opportunity to make the ex-
change authorized.
"Second-To leave the privilege open in
definitely is simply to give q continuing
option TO bondholders without any sufficient
consideration TO the treasury.
"Third-It may be fairly assumed thai
with this privilege discontinued at the close
Of the year. refunding in the meantime will
b. stimulated, and that the total refunding
to that date will approximate 800, 100000.
"Fourth-The sinking-fund law contem-
plates the retirement OF the interest-bear-
ing public debt. either by payment or pur-
chase Of substantially S5O,O00,W0 per an
mum.
"Fifth-The refunding of 500, 1000 900 will
leave outstanding and maturing within the
next eight years, say, $439. 0G0. 900. or an
average of something more than $5O.OVO,vy9
per year.
1.-The secretary believes that the suspen-
sion of the refunding process will put the
maturing debt under better conditions (the
governments interest alone considered)
either for purchase from time to time or for
payment when due. 1t Will, of course, re-
main open for the department to resume
refunding, should the interests of the gov
eminent and the general conditions of
finance make such a course desirable.
REDUCTION OF REVENUE.
From the estimates of receipts and ex-
penditures for the fiscal year 1902 there
/ promises 10 De an excess OF receipts TO tne
amount of SIG, 900, 600. 1t is hardly necessary
to point out that estimates are at best APP
proximate. Exigencies in the public serv-
ice which cannot be anticipated may re-
quire expenditures not contemplated. Con-
gressional appropriations, extraordinary in
character. or failures TO realize fully esti-
mated revenues, are also influences which
may operate seriously to derange all adj
vance calculations. A conservative margin
should, therefore, be reserved in forecasting
definite results based on hypothetical cal
culations.
IAN annual excess of receipts over expen-
ditures is the best Endorsement of the ma
tional credit, while a deficit is a depressing
factor in public finance. 1t has been our
wise policy in the past to reduce the public
debt in time of peace, and to this good pol
icy may be attributed, TO a high degree, the
low rates of interest, hitherto unprecedent-
ed. which now attach TO our government
debt obligations 1t is true that for a
period Of six fears, from 1894 TO 1899, in
elusive, annual deficits appeared; but Ii
may be hoped that this was a temporary
interruption TO a history Of twenty-eight
years, when each year showed annual ex-
penditureS less than annual revenues.
1.-The operation of the act of Feb. %,
1862, providing for a sinking fund, contem-
plates the payment or purchase and can
collation. of substantially $50, coo, 900 annu-
ally of our Understanding debt obliga-
items. Owing to the unfavorable conditions
i'm the treasury during the six years just
referred to, the sinking fund was entirely
neglected.
I'm the absence of any expression to the
contrary. 1t may be safely assumed that it
fully the general requirements of the sink
ing fund act and TO provide revenue suffi-
cient to meet the charges thus imposed
upon tho government. The present and
justifies the belief that the sinking fund
requirement can be met, both for the cur
rent fiscal year and for the next fiscal year,
and still permit a moderate reduction in
taxes imposed by the war revenue act. A
reduction to the amount of $30,00O,W0 is
therefore recommended to the consideration
OF the present Congress.
STANDARD AND CURRENCY.
1.-The operation of the act of March Ii
last with respect to these two important
matters of our finances has well exem-
plifed its wisdom. Confidence in the pur-
pose and power of the government to
maintain the gold standard has been
greatly. strengthened. The result is that
gold flows toward the treasury instead of
away from 1t. AT the date of this report
the free gold in the treasury is larger
in amount than at any former period in
our history. Including the $50, 600, 900 re-
serve, the gold in the treasury belonging
to the government amounts to over s242,-
UVU,UUU, While the treasury HOluS, DCSlueS,
more than $3.50. 900. 900. against which GER
tificates have been issued.
THAT provision of the act which liberal
lied the conditions, of bank note issue was
also wise and timely. Under it, as pre-
viously shown in this report, there has
been an increase of some 81, 0O0.0 600 in bank
note issues. To this may be chiefly at
tributed the freedom from stress for cur
rency to handle the large harvests of cot
ton wheat and corn In this rdSnaQf tho
year has been an exception to the general
rule of stringency which for several years
has so plainly marked the autumn season.
Nevertheless the measures referred to.
prolific as they have been in good results.
will yet need reinforcement in some i'm
portant particulars. Thus, as to the re-
while the powers conferred upon the sec
rotary are probably ample to enable a
jealous and watchful officer to protect
fully the gold reserve, there appears to be
lacking sufficient mandatory requirement
to furnish complete confidence in the con-
tinued parity, under all conditions. be-
silver and gold. Upon this point further
legislation may become desirable.
"As TO the currency, while the liberaliz-
ing of conditions has, as previously noted.
found response in a necessary increase of
bank note issues, there is under our pres
ent system no assurance whatever that
the volume of bank currency will be con-
tinuously responsive to the country's
needs, either by expanding as such needs
require or by contracting when superfiu-
Gus in amount. The truth is that, safe
and desirable as Is our currency system
I'm many respects, it is not properly re-
lated. The supply Of currency is but re-
motely, if at all. influenced by the ever
changing requirements of trade and in
dustry. II is related most largely, if not
entirely, to the price of government bonds
In the market. Between the needs of
trade and commerce for a medium of ex-
change and for instruments of credit,
which a proper bank note furnishes, and
the investment price or value of govern
ment bonds, which is at present the most
influential factor in determining the cur
rency supply, there is no discernible rela-
ton whatever.
81 forbear at this time. i'm view of the
many other important subjects which de-
mand attention during the present short
session of Congress-, TO press these ques-
tons for immediate action. but / cannot
refrain from inviting the attention of sem
ators and representatives to a careful con-
sideration of the matters thus suggested.
In the act of March IA a forward step was
taken, to the great benefit of all our ma
terial interests. Nothing should prevent
timely and well-considered amendments
where necessary to solidify and complete
the work so we'll inaugurated."
TOOK MANY PRIZES.