Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1902-01-01
PROBLEMS FOR SHAN.
A Series Of Hard Situations De.
velopins For the New
Cabinet Officer.
Increasing Surplus Has Ex-
hausted Resources For Re.
ducing the Public Debt.
New Means Of Preventing Money
Strineency Must Be Provid-
ed..Other Problems.

Strineency Must Be Provid-
ed..Other Problems.
Washington. Jan. IA series Of inn
portant problems is likely to confront
the new SECRETARY of the treasury inn
mediately upon his entrance into office.
Secretary Gage has handled the condi-
lions of the last five years with great
skill. but in dealing with the steadily
increasing surplus he has exhausted
most of the resources for reducing the
debt without imposing undue charges
on the treasury or causing confusion in
the money market. The purchase of
bonds at a premium has gone steadily
on since the close of the Spanish war,
until the margin of bonds which can be
purchased at q fair rate has been pretty
well absorbed. Secretary Gage pointed
out in his annual report that within
about two years, from Nov. l, 1899, to
Nov. Is, 1901, the bonded debt had fallen
from S1,O46. 049, 020 to 1854. 027, $50, showing
a reduction of S92, OF, $50. Even this
large reduction does not represent the
amount which has been applied to re-
ducing the debt and the annual interest
charges upon it. The annual interest
charge has fallen from $40,347,SS4 to $685.
All, 22S, and Is still in process of reduc-
ton. Interest has been saved or antici-
pated amounting to $54, 54S, 424 within the
next seven years alone. This remarka-
BILE record Of debt reduction has been
accompanied by measures which have
prevented the congestion of money in
the treasury and saved the money mar
ket from strongency. The deposit OF
public funds in the national banks stood
on Saturday at s113, 9s6, 937, representing
the liberation of that amount of money
for the uses of commerce. NotWith-
standing all there measures, the cash
balance has continued to mount up
ward, until 1t stood on Saturday last at
sits, s46, 5s1. The surplus of receipts over
ordinary expenditures thus far this
yeac has reached $42, $50, 659, where for
the same period last yea 1t was only
SlS,444, 493. The record Of the last three
years has been one Of financieriEg to
keep down a surplus rather than the
difficult task Of Secretary Carlisle from
1893 to 1897 to keep down a deficit but
the surplus problem has presented diff
ficuities as great in their way as the
problem Of the earlier deficit.
Among the important problems which
Secretary Shaw is likely to be called
upon to face in the near future are
these:
Can the treasury surplus be kept
within reasonable limits without the
payment of extravaganza prices forum
matured bonds?
What legislation shall be recommend
ed to congress for preventing the accu-
mutation of an excessive surplus?
Can the public deposits in h nation
al banks be withdrawn without causing
financial disaster?
Can the present expanded condition Of
trade and credit be maintained until
after the rext presidential election
WITHOUT a panic in the money market
and a period Of bushes depression?
Under the first head, the problem is
becoming. constantly more difficult as
the cream Of purchasable bonds is being
taken from the market. The bond pur-
chases by the treasury under the offers
OF Secretary Gage have reached SIT, 1885,
Gao since Nov. 1. This includes about 81
500, 900 received on Saturday last. Tit
purchases during November were $11,-
613,370, so that only about $6,0O0,0 600 has
come to the treasury during December.
The amount presented hereafter is like
ly to dwindle to a trif,ing sum unless the
government raises the prices offered for
the bonds. This will naturally invite
political as well as financial criticism. It
will be absolutely necessary, however, to
keep down the surplus by the purchase
OF bonds or by some similar process un-
less the money market is to be wrecked
by the withdrawal of currency from cir
culation by its piling up in the treasury.
Closely connected with this problem
OF the surplus and the bond purchases
Is that of the bank-note circulation. The
circulation in the aggregate has not yet
begun a downward course, but the live
circulation secured by bonds has been
falling during the last two months, and
applications are already on file for the.
withdrawal Of circulation to the entire
legal limit Of 100000 for January as
wen us IOT DSCSillUcT. Liz Udilh- lUlc
circulation on Saturday last was $685.
9o5, 500, of which 1924, S0o,Ss0 was secured
by bonds and s35, 104, 40 was represented
by lawful money deposited for retiring
the notes. In case of a pressure for cur
rency the power OF the banks to increase
the amount outstanding by the ssue OF
notes is being greatly impaired by the
reduction of the bonded debt. There is
grave fear In many quarters that IL on
gress fails to provide some means OF
giving elasticity to the bank-note cur
rency, there will be a pressure in case Of
a financial panic which will be as severe
as that of 1893.
The question what legislation shall be
recommended for keeping down the sur
plus opens up the whole problem of the
tariff and the revenue. Secretary Gage
has recommended that miscellaneous in
ternal taxes be abolished to the amount
of about 1927. 1000, 900. 1t is beginning to
be apparent, however, that a reduction
of this amount will be entirely made
quate to keep the surplus under control.
Hence the whole question of reciprocity
treaties, concessions to Cuba. and gem
eral tariff revision may be projected in
to the political arena and referred to the
secretary Of the treasury by the PRESS
dent for a wise solution.
The most serious storm cloud on the
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