Evening star., 1901-10-09
T0USE THE SURPLUS
Plans Likely to Be Presented to
Congress
THE RETIREMENT OF GREENBhCKS
Increase in the Treasury Cash
Balance.
REDUCTION IN TAXATION
The RETIREMENT OF GREENBACKS
REDUCTION IN TAXATION

II Secretary Gage does not resume the
purchase OF bonds upon his return here
from the west or by the time Congress
meets in December the outlook is strong
that a number OF plans will be launched in
the national legislative body to use up the
surplus that is accumulating in the treas
ury Secretary Cages object in purchas-
ing bonds has been twofold-to reduce the
surplus and put more money in circulation
and to reduce the interest-bearing debt OF
the country but nobody knows whether the
Secretary will continue that course this
near to the meeting of Congress. He may
fit If the money market continues easy
to take no further steps in the direction OF
lessening the surplus and may leave the
subject to Congress In this event It is
now pretty certain that Representative
Fowler, who will be chairman of the bank
House, will make an effort to use the sur
plus to retire a large block OF the green
backs. Mr.. Fowler. who will be assisted by
other men Of the same opinion as himself.
would adopt one of two plans. He would
either cancel $50 0o0. 600 or S100, 600, 600 out
right without replacing the notes with any
other class of money or he would take from
the available cash about 500, 600 900 in gold,
which he believes could be spared, place
that amount In the reserve fund of the
treasury, and then, as a like amount OF
United States notes came In, cancel them
and issue gold certificates against the addi-
tional gold placed in the reserve fund. The
reserve fund is now S150000.o00 and the
addition of S1o0,0Oo.0o0 to the fund would
put the figure at 250O900 900. Mr.. Fowler
and other advocates of the retirement OF
greenbacks would follow this policy until
the treasury contained nothing but gold or
its representative in the treasury, remov-
ing the danger OF the burden of demand
obligations that confronts the country In
case Of panics.
The Available Cash in Treasury.
The available cash balance in the treas
ury now is over s172, 100000 independent
of the reserve fund, which is always in
cluded as available. The sum OF SIP. 00o-
600 In the cash account is anywhere from
5000. 600 to S1O0, 200. 600 more than is nee
essary in the treasury to the transaction
of government business. OF this sum more
than 500, 100000 is in gold coin, bullion and
gold certificates. In the division of re-
demption, as an offset to gold certificates,
is over $500, 100000 of gold coin. The gold
fund of the treasury grows every day. Very
naturally the available cash balance will
increase each day with the daily surplus.
How much this surplus is going to be this
year is a matter of conjecture even among
treasury officials, but IL will certainly be
more than sufficient, even deducting possi-
BILE extraordinary expenditures. to run the
cash balance far above S2O0.0o0O00 There
are going to be some extraordinary expeudi-
lures before the end of the fiscal year.
possibly $50, 900, 900 for the payment OF
claims adjusted by the Spanish claims COM
mission and 81 100000 for tobacco rebates
The amounts may go beyond this, but the
surplus will care for all this without
trouble.
Suggested Cut I'm Taxation.
A suggestion has been made that Con-
gress may see fit to reduce taxation to cut
down the surplus, but this idea has so far
not become popular. In the event of the
adoption of reciprocity treaties and the
making and adoption of still others the
customs receipts will be considerably re-
ducsd, and The republican party had rather
do business with full pocket book than
go along with a deficit. A reduction of tax
alton would be an experiment that might
seriously affect revenues when considerable
money was desired. By not reducing taxes,
however, and using the surplus in retiring
greenbacks or buying bonds the surplus
would be kept down and the income would
be unchanged.
Other Methods.
Beyond retirement Of greenbacks or re-
duction OF taxation there are only two
methods Of disposing of the surplus. These
are the purchase of bonds or the Increase Of
the deposits with national banks. The de-
posi,s already aggregate s10s SOC, SOP, and
this is considered in many circles as suffi-
cient for the BANKS to hold. 1t is the largest
sum of government money ever held by the
banks, except from late in 1898 to early In
1900, when the payments to the govern
ment from the sale of per cent bonds were
placed with banks to prevent q curtailment
of money in the business world. Not for
many year before that since have the
holdings of government money by banks
been nearly so large as now. Applications
for deposits are being made right along by
banks, but they are being informed that
the treasury has no intention of increasing
the deposits at this time.
Representative Fowler and other advo-
Gates of the retirement of the greenbacks
would like TO see the treasury surplus ac-
cumulate to a still larger extent than Il Is
now doing, as they would like opportuniay
to present their ideas to Congress The
amount of United States notes outstanding
October 1 was S346, ,6S1, ole, and it is from
this sum that Mr.. Fowler would begin the
process of greenback retirement.