The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1916-12-07
NATIONS FINANCES SOUND

Washington, December 6.(Associated
Press. )-Secretary McAdoos annual re-
port of the governments finances, pre-
sented to Congress today. estimates that
the, fiscal year ending June 80. 1917, will
show a balance of s1150O0,O00 in the gen.
eral fund, but that the figures a year
later, June 80, 1918, will show a deficit
in the general fund of $1S5, 10000.
Preliminary estimates place the cost of
conducting the government for the COM
ing fiscal year, 1913, exclusive of the
postal service, which is expected to be
self-sustaining, and other deductions, at
s1.27S, OF. 900. 9he ordinary receipts for
the fiscal year, 1915 he estimates at $685.
$4,000. which is $3.50, Al 900 less than the
estimated expense.
Estimates Of large expenditures for ma
tional defense carry the estimated outlay
beyond the estimated income
For the fiscal year, 1916, now drawing
to close, the Secretary reports great
prosperity and expresses greatest conf
dence for the future. During the past
year." the Secretary says, 1.-The pros
perity which set in SO strongly during
the fiscal year. 1915, has grown in
strength and volume, and is now widely
diffused throughout the United States.
Fundamental economic conditions have
never been more sound. In all lines OF
industry efficiency of organization and
production have reached the highest point
in the country's history. General con-
fidence in the future healthful enter
prise and development have been marked
characteristics of the year.
THE financial strength of the United
States-the greatest in our history-gives
US commanding position in world fl
nance We have been transformed from
debtor into creditor nation. On No
vember l. 1916. the stock of gold coin
and bullion in the United States was
estimated at s2,700, 1856, an increase of
STA. 597. S04 in the past 16 months. This
is the largest stock of gold ever held in
the United States or in any other coun-
try of the world. Through the opera
tions of the federal reserve system ana
without abundant supply of gold as
basis. the credit resources of the United
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
FEDERAL RESERVE SYSTEM
The experience of the past two years
has brought into strong relief the value
of the federal reserve system. 1t is not
TOO much to say that our great prosperity
could not exist without 1t. The useful
ness of the system has been broadened
recently by the amendatory act OF Sep
TENDER Z, 1916 which renders it more at
tractive to member banks and increas es
the scope and services of the federal re-
serve banks. Due to the transfrence of
vault and other reserves to federal reserve
banks, authoized by the original act and
amendatory act, the resources of said
banks are now more than $3.50, coz, 600,
while the total reserves held are over
100000, and, in addition, more than
2SO,oo0,0oo is held by federal reserve
agents as special security against federal
reserve notes. About one-fourth OF the
country's stock of gold is thus mobilized
in the hands of the federal reserve banks
and agents.
THE increasing strength and efficiency
OF the federal reserve banks have en-
abled them to enlarge their direct service
to the business community through the
introduction of definite and comprehen-
sive system for the par clearance OF
checks throughout the country.
Rates of discount at federal reserve
banks have continued low throughout
the year, and most of their open market
paper, consisting largely of acceptances
growing out of foreign trade, has been
taken below 21a per cent basis. Rates
Of interest throughout the country have
been reduced and stabilized with great
advantage to the business of the country.
1T would have been impossible to
finance our vast domestic and foreign
trade without the facilities provided by
the federal reserve system. Not only
has it met the normal and extraordinary
needs of business, but it has esta blished
confidence securely. Business has been
able to go forward without apprehension
and the several crises which the country
has faced in Its international relations
during the past two years have been ac-
companied by no disturbances and have
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