Evening star., 1916-12-06
SECRETARY YM'ADOO
PRESENTS REPORT
Estimates Government Fl
nances Will Show $115,0o0,-
600 Balance June 80, 1917.
BIG DEFICIT YEAR LATER

Secretary McAdoo's annual report of
| the governments finances, presented to
Congress today. estimates that the fis-
cal year ending June 80, 1917, will
| show balance of s115.00o.0o0 in the
general fund. but that the figures a
year later-June 80, 1918, will show a
deficit in the general fund Of
$185. 100000.
Preliminary estimates place the cost
Of conducting the government for the
| coming fiscal year, 1918. exclusive Of
the postal service. which is expected to
be self-sustaining. and other deduc-
tions. at s1.27S,o21. 900. The ordinary
receipts for the fiscal year 1918 he esti-
mates at sss5.55o, 900, which is $751;
Estimates of large expenditures for
national defense carry the estimated
outlay beyond the estimated income.
For the fiscal year 1916. the Secretary
est confidence for the future. During
the past year." the Secretary says, the
prosperity which set in so strongly
during the fiscal year 1915 has grown
widely diffused throughout the United
States. Fundamental economic condi-
tions have never been more sound. In
all lines of industry, efficiency of or
the highest point in the country's his
tory. General confidence in the future,
healthful enterprise and development
have been marked characteristics OF
the year
Now a Creditor Nation.
The financial strength of the United
States-the greatest in our history
gives us a commanding position in
formed from debtor into a creditor
nation. November /, 1916, the stock Of
gold coin and bullion in the United
States was estimated at $2.700,136.s76.
an increase of s714.5S7.s04 in the past
sixteen months. This is the largest
stock Of gold ever held in the United
States or in any other country of the
world. Through the operations Of the
federal reserve system and with our
abundant supply Of gold as a 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 for
eign 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 system. 1t
Is not TOO much to say that our great
prosperity could not exist without it,
The usefulness of the system has been
broadened recently by the amendatory
act of September Z, 1915, which renders
1t more attractive to member banks
and increases the scope and services of
the federal reserve banks. Due to the
transference of vault and other re-
serves to federal reserve banks, author
lied by the original act and amenda-
tory act. the resources Of said banks
are now more than s650,00O.oO0, while
the total reserves held are over $780,
100000. and, in addition, more than
$3.50, 100000 Is held by federal reserve
agents as special security against fed
eral 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 eff
cheney of the federal reserve banks
have enabled them to enlarge their
direct service to the business commu-
nifty through the Introduction of a
definite and comprehensive system for
the par clearance of checks throughout
the country.