Evening star., 1913-02-26

| ner as to do no injustice to those who
| have purchased the bonds as collateral
| for bank note issues.
"And in making provisions for this re-
| funding the first obligations to be re-
| tired are the demand notes that We're is
sued during the war and given currency
| through being made legal tender. Every
! objection to the retirement or the green
! back that in the past has obtained is now
! without force. These outstanding OBJ
| legations of the government the legal
| tender notes. are constant menace 10
both government and private credlt-a
menace which has operated adversely 10
| the successful financing of Treasury
deficits in periods of business depression
by draining the Treasury OF Its gold-one
which would be found even more serious
in case the nation should need again TO
fall back on it's credit as a mattef ol
military necessity.
Total Bonded Debt.
AT the present time the total bonded
debt outstanding is approximately S9o4'
600 600. To this should be added $780,
600. 600, the amount of the demand Treas
ury notes This makes a total Indebted
ness to be sunk of $1.31O,O0O.oOO. Taking
into the sinking fund the 15OOOO,OCO gold
reserve against greenbacks outstahdlns,
and the $137, 100000 advanced from the
general fund for the building or the ne
Panama canal, gold certificates could De
issued in place of greenbacks to the eA-
tent of $2S7 100000
1T would be necessary TO issue oiliS
$50 600 900 more bonds to retire the pal-
ance of the outstanding Treasury notes,
leaving an interest-bearing debt OF the
government amounting to y, ,l6O,OVC'oVo
of all maturities, against which SINKING
fund requirements would be calculated
Assuming that it is determlned 10 re-
6oht in
after July /. 1914, and further that au-
thority is given to invest the SINKING
fund cumulations in new issues OF gov
ernment bonds for future capltaI outiaSs
which will bear an average sa.e on o1 con ~ p. =,
cent. it would require about $4o,Voooo TO
be set aside each year to retlre the oio
debt or about $1j.OOoOO less than the
present legal requirement.. TINS sum LOT
sinking fund requirements Woulo nave "
be increased to make provision OF each
new bond issue as fast as necessary
Present Sinking Fund Resources.
"At the present time the only sinking
fund resource is a claim on the general
fund amounting to $SO9, 100000. This is
now become a mere bookkeeping entry
without real obligation or meaning.
recommend that the present law De
amended so as to adapt the annual charge
against the revenues to the actual re-
puuirements and that the BOOK palance pe
Cancelled To provide gold with which 10
retire the greenbacks. rsco!i,llenu IN, $40 nnId'
authority be given to transfer the sloo'ooo
600 general fund gold reserve TO tfre sinh-
ing fund as we'll as the $l3' ,Oooooo ad-
yanced for the Isthmian canal from the
general fund, the latter amount 10 ne on.
tanned by issue of twenty-year oonos vi
the national government.
And TO insure the independence of the
administration of the sinking FUND law
in the future it is also recommended that
the chairman of the finance committee OF
tho senate. the chairman Of the ways and
means committee OF the House or KEEP
resentatives, the Attorney General ana
the Secretary Of the Treasury be mace
ex officio a sinking fund COMMISSION ana
that the controller shall be required each
wear to audit and state the sinking 1und
account to the President and the Con-
gress
Effects Reduction in Estimates.
From the foregoing it is evident that
the estimates for expenses and fixed
charges may be reduced S25,OOOo00 with
out injury to the service. In fact, the
results, in my opinion, would be bene-
hcial provided changes in law also be
made as indicated. This could be accom-
plshed By a reduction OF not less than
| $40 100000 in estimates for overhead ana
operating expenses and by reduction of
| $4,000 600 by changing the sinking fund
law go that it would release the present
| circulated reserve and providing for an
amount adequate for the retirement of
| the present national debt within twenty
years from July ] next and for the re-
| tirement Of future bonded debt within
| twenty years from the date OF issue. This
would reduce the total OF estimated ex-
penditures which should be met by reve-
| nue. from $995 600, 600 to approximately
s01G. .OGO.OOo for the fiscal year 1914, as
against which there is an estimated reVe-
nue. of s97c.OUJ.0oO exclusive Of trust
| funds. refunds etc).
Not only should public improvement
| bear "A definite relation to a plan or pro-
gram which has reference to the needs OF
| the nation, but provision should be made
| for completing the improvement a such
| time as II will be most useful or serV-
iceable in the carrying out of such plan.
In my opinion ii is desirable that the
government at Washington should be
housed in public buildings which should
be built in such manner as to conform to
/ a general plan of public buildings for
the government within the city. In order
to carry out such program 1t might be
good business Judgment to provide for
spending fifteen or twenty million dollars
| within the next two years. AS matter
of fact it would be advantageous for
the government to invest nearly 500, ,0U0.
900. II need be. 10 save the rent which it
| is at present paying within the District
| of Columbia. BY first developing plan
ami then working to 1t. whatever part
might be approved, this might be financed
through loans which would enable the
government to apportion the investment
burden over period of, say, twenty
years.
Contracts on Most Favorable Basis.
such a method of financing, applied to
all its permanent improvements, would
enable the government to make contracts
on the most favorable basis, to avail itself
of having it's buildings provided at an
early date. and at the same time to pro-
| portion the burden revenue eauitably
] over a period of years. through annual
appropriations to the sinking fund.
| Applying the same theory to internal
improvements a definite plan for the
dammng of streams, which periodically
| food the Ohio and Mississippi River val
leys. thereby enabling the government
to operate these dams for the retention
| OF water at times when flood may be
Indicated; during these periods TO operate
| the dams for the production of power or
lother industrial or commercial uses. Such
| a plan, however, would require a large