Omaha daily bee., 1902-12-04

ment OF revenues, II this be true, there
would be no danger to the government
should the two coins be made interchange
able.
Should Il be deemed wise to provide for
the exchangeability Of gold and silver, then
national bank notes might be made payable
in gold. In this way there would be shifted
to the banks the greater burden of fur
nishing gold for domestic use and for ex-
port and this, in the event Of an unfavorable
balance Of trade, might prove Of great ad-
vantage to the government. 1t would be
manifestly unjust as well as illogical to re-
quire banks to redeem their notes in gold
so long as legal ender silver remain ire
deemable and interchangeable.
Merchant Marine.
On June 80, 1902, the merchant marine
Of the United States, including all kinds
Of docuinented shipping. comprised 24.273
vessels, Of 5~,7s7,sO2 gross tons. On June
80, 1901, 1t comprised 24,057 vessels, Of
1924, 21s gross tons.
American shipping was greater in vol
ume on June 80, 1902, than ever before
in our history. The tonnage losses of the
civil war have been more than made good,
New vessels Of the year have been OF SUI
perior types. including the largest trans
atlantic steamer ever built in the United
States, the fastest steamer for Asiatic trade
yet built in any country, and the largest
steamer ever launched into the waters Of
the Pacific.
The total tonnage completed was a triie
less than In 1901, but the shipbuilding in
progress during the year, In the value Of
materials and amount Of wages, has never
been equaled in this country. II the rate
Of progress during the past few years
could be maintained, the United States
would in time become a competitor with
Germany for the second place as a ship
building nation. The outlook for the cur
rent fiscal year Is not, however, so prom
Using. A large amount Of unfinished tom
mage will be launched and completed. Few
new contracts for ocean steamers have been
reported. ...
The growth OF American shipping has
been entirely within the domestic trade.
The tonnage registered for foreign trade
is smaller than q year ago, but it is moro
! e%ffcient, as the proportion of steamers has
increased. American vessels carried S.S per
cent of our exports and imports, a small
gain over the percentage Of 1901.
For several years American capital in
| increasing amounts has been invested in
| ocean steamers under foreign flags. Re
| Gently this movement has taken form in
the organization of an American steamship
company, which, in the tonnage, average
speed and size of it's steamers, equals any
two combined Of the worlds great steam
ship companies. Yet, only an insignificant
| proportion of this company's tonnage-about
| o~ne-eighth-is under the American flag.
| The tendency noted, and the organization OF
this company show conclusively that abund-
ant American capital is disposed to engage
IN commercial enterprises on the sea, and
that, under existing conditions, the ready
outlet for 1t is afforded by resort to foreign
flags. American capital prefers investment
under foreign flags because 1T costs more
to build ocean steamers in the United
States than abroad, and, once built, 1t
costs more to operate steamers under the
American than under foreign flags.
banking Affairs.
Recent events not only Justify but en-
force the conclusion that our banking sys-
tenn is imperfect. During certain months
of the year interest. rates dropped danger
ously low-dangerous in the sense that
speculation was invited thereby When the
time arrived Tor moving crops rates ad-
tanced alarmingly high. Meantime the
price of government bonds rendered the
maintenance of national bank circulation
| uupTOuldDtes anu tulS CldSS VI CuIlSnSy "do
retired with great r~apidity.
The department exerted every influence
within it's authority to counteract this nat
ural contraction. During the early spring
the surplus revenues were deposited with
national banks Upon satisfactory security,
but preference was given to such institu-
tions as maintained their limit of circula-
ton. Then, during the months when rates
of interest were low, no deposits we're
made. .f.
The frequent purchase and retirement Of
bonds renders the amount available for cir
culation gradually less, while a rapidly
growing population, additional banking IA
c~ilities and expanding trade suggest the
need Of an ever-increasing circulation. /
therefore believe the time has arrived when
1T will be necessary to adopt one Of two
policies: either the government debt must
be perpetuated as a basis for national bank
circulation, and additional bonds issued as
occasion may require, or some other system
must be provided.
see no objection to the issuance OF cir
culation based upon general credits, IL
properly safeguarded. Neither do believe
it necessary to make currency thus issued
a first lien upon assets. A very small tax
upon circulation would be sufficient to cover
any possible loss. The government actuary
has demonstrated that a tax of one-eighth
OF l per cent upon circulation would have
covered all loss from the beginning OF our
national banking system to the present
time, had each bank maintained its limit
of circulation.
Public Deposits.
At present the purchase of outstanding
government bonds for the credit Of the
sinking fund affords the only method Of
returning surplus public revenues to the
channels Of trade after they have been
once covered into the treasury. The de-
partment is authorized to deposit current
internal revenue and other receipts, ex-
cept customs, with national banks upon
satisfactory security, but this method at-
fords very tardy relief in case Of none
tary stringency. On the other hand, the
purchase Of bonds invites a contraction Of
national bank circulation for the purpose
OF disposing Of the bonds pledged for its
security at the advanced price which usu-
ally prevails whenever the government be-
comes a purchaser. Thus the object sought
to be attained is counteracted. II authority
were granted to make deposits without Sc
curity after special examination and at
such rates of interest as the secretary OF
the treasury might determine, quite an
element of elasticity would be provided
whenever a surplus OF revenues existed.
BY advancing or lowering the rate OF In