The commonwealth. (Greenwood, Miss.) 1896-1923, 1916-12-06
ANNUAL REPORT OF SECRETARY
MADOO AN ECHO OF PROSPERITY
Condition of Governments Finances Presented
to Congress Today Great Confidence in the
Future is Expressed
(By Associated Press)

Washington, Dec. 6-Secrelary Nc,
Adoo'S annual report of the govern.
ments finances, presented 70 Congress-
today, estimates that the fiscal year
ending June S0tn, 1917, WI show a
balance of S115,000,0OO in the general
fund but that the figures a year later
June Goth, 1918, will show a deficit
in the general fund of $185,00O,O00.
Preliminary estimates place the
cost of conducting the government
for the coming fiscal year 1918, ex-
elusive of the postal service which is
expected to be self sustaining and
other deductions at $1,27S,021, 900.
The ordinary receipts for the fiscal
year 1918 he estimates at S995, $780,
900, which is $282, 2,471, 900 less than
the estimated expenses.
Estimates of large expenditures for
national defense carry the estimated
outlay beyond income.
For the fiscal year 1916 now draw
ing to a close, the Secretary reports
great prosperity and expresses great
est confidence for the future. Our
ing the past year." the Secretary says,
"the prosperity which set in so strong
ly during the fiscal year 1915 has
grown in strength and volume and is
now widely diffused throughout the
United States. Fundamental condi-
tions have never been more sound,
In all lines of industry efficiency of
organization and production have
reached the highest point in the coun-
trys history, General confidence in
the future, healthful enterprise and
development have been marked char
acteristics of the year.
'The financial strength Of the Unit
ed States--the greatest in the history
gives US commanding position in
world finance. We have been trans
formed from a debtor into a creditor
nation. On November l, 1916, the
stock Of gold coin and bullion in the
United States was estimated at ST.
f00,l36,976, an increase of S714,597,-
S04 in the past l6 months. This is
the largest stock of gold ever held in
theUnited States or in any country of
the world. Though the operations of
the Federal Reserve System and with
our abundant supply Of gold as
basis, the credit resources of the Unit
ed States have become more than
sufficient for home demand, and we
have been able to finance our great
domestic and foreign trade without
strain and to extend vast amounts
Of credit to other nations throughout
the world.
THE experience Of the past two
years has brought into strong relief
the value of the Federal Reserve Sys-
tem.lt is not too much to say that
our great prosperity could not exist
without it. The usefulness Of the sys-
TEN has been broadened recently by
the amendatory act of September 7,
l9l6, which renders it more attractive
70 members and increases the scope
and services Of theFederal reserve
banks, Due to the transference Of
value and other reserves to Federal
reserve banks, authorized by the ori-
4 glnal act and amendment act, the re-
sources of said banks are now more
Than SG50,000,000, while the total re-
serves held are over $400,000,000, and,
IN addition, more than $230,O00,000 is
held by Federal Reserve Agents as
SPECIAL security against Federal re-
serve notes. About one-fourth of the
country's stock OF gold is thus mobil-
lzed in the hands of the Federal re-
serve banks and agents.
Theincreasing strength and eff
cheney of the Federal reserve banks
nave enabled them to enlarge their
uirect service to the business COM
munity through the introduction Of a
uehnlte and comprehensive system for
she par clearance Of checks through
cut the country.
Rates Of discount of Federal reser-
We banks have continued low through
out the year, and most of their open
marlet paper, consisting largely OF
aeceptances growing out Of foreign
Tade, has been below a IL per cent.
pass Rates of interest throughout
tae country have been reduced and
s'aolized with great advantage to the
business Of the country.
IL would have been impossible to
nliance our vast domestic and foreign
uade without the facilities provided
" the Federal Reserve System. Not
oniy las it met the normal and ex-
Taordlnary needs of business, but it
aas established confidence securely.
BUSINESS has been able TO go forward
Without apprehensio, and the several
sfises which the country has faced
Z It's International relations during
we past two years have been accom-
panied BY no disturbances and have
saused not even tremor in the finan-
tial world Tba .rops 10 1415 and