Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1918-08-21
STATES
HASNEVER BEEN
MILlTARISIlC
In Early Years Preparedness
Was Discouraged to Cut
Down Expenses.

Down Expenses.
Washington, Aug. 21.-The United
States has eyer been a non.militaristic
nation, and no better evidence of that
fact Is to be found than in the condi-
tons existing just prior to the second
war with England.
Although it had been known for a
long time that another war was pos
stble, every effort was made to reduce
the size Of the army and navy, and
preparedness measures were discour-
aged. This course arose largely from
the influence Of Secretary Gallatin.
ilton as head Of the treasury. Gala
tin needed to reduce the running ex-
penses Of the government. We hoped
that by this means the people might
be relieved of a large share Of the tax
alton which had been placed upon
them. .
Gallatin succeeded in curtailing
the budget for 1902. 1903 and 1904
called for an expenditure Of only s4,-
10000 as compared with the $780,
900 spent in 1900.
John Randolph, chairman Of the
committee on ways and means, was
an enemy to internal taxation and
through his influence a repeal act
was passed which overthrow a great
part of the tax &system which had
ilton.
Then came the purchase of the
Louisiana territory which cost $15,-
100000 and to meet this outlay Cal
latin proposed the issue of $780,
900 worth Of new bonds bearing six
per cent interest. Owing to the war in
Europe, American commerce was
flourishing, export trade was brisk
and prices were high. AS a result,
err than had been expected.
The brush with Tripoli, however.
made additional revenu a matter OF
necessity, but instead OF restoring the
excise duties which had formerly pre-
vailed, congress on March rs, 1904,
authorized an addition Of two and
one-half per cent on all imported ar
an additional ten per cent, on all
goods imported in foreign vessels.
The proceeds Of this, act were known
as the Mediterranean fund and was
used for the protection Of the COM
merce, and seamen Of the United
States against the Barbary powers,
and was to be levied until a treaty
was made.
1t was not until 1907, when war
threatened that President Jefferson,
much against his will, agreed to an
increase Of expenditures for national
defense. At the same time he entered
upon the alternate policies of nom
importation Of manufactured, goods
and Of fcrbidding shipping to leave
American ports. This completely up
set the customs receipts which fell
from s1s.3oo,ooo to s7,2oo.ooo and at
the same time expenditures for war
increased from $1,300,0o0 in 1907 to
$500, 900 in 1909. Fertilization of
ports and harbors was fastened, gun
boats were purchased and the regular
army was enlarged.
Since affairs had reduced themselves
to greatly decreased revenues and
greatly increased expenditures Secre-
tary Gallatin confronted a deficit in
SOC, 900. This was provided for. how
ever; by a balance which remained
on hand in the treasury, while in 1909
the embargo act was repealed n
commerce was resumed with great
vigor. In 1910 the customs yielded
IS, 500, 900 and in 1911 this amount
was increased to $780, 600. The
appropriation for the army and navy
was reduced and immediate financial
danger was safely tided over.
During this decade there had been
a remarkable reduction of the public
debt which between 1901 and 1911
was cut down by $4,000, 900. The
foreign debt, which included the
stocks of 1875 and the loans of 1898
and 1900, was wiped out and no fur
Their recourse was made to temporary
loan. "a.
This year was memorable in the fin
ancial history Of the United States,
for it marked the collapse of the Uni
ted States bank. The directors Of the
institution petitioned congress for a
renewal Of their charter. Secretary
Gallatin reported in favor Of it with
certain recommendations for changes
in the banks policy. Among them
was that the bank be required to pay
above $4,000, 900 and also that 1t
should loan to the government at any
time a sum not to exceed sixty per
cent Of it's capital.
Other influences were at work,
however, and vigorous opposition to
the renewal Of the banks charter was
manifested in congress. The consti-
tutionality OF the bank was questioned
and it was denounced as IAN undemo-
cratic political institution" The bill
for renewal of its charter was lost in
the senate February II, 1911, when
George Clinton, vice president OF the
United States. cast the deciding vote
.against it.
It then became necessary for the
government to turn to local banks for
the custody Of it's funds, and twenty
one Of these institutions, located for
the most part in the principal ports
Of entry. were employed for this pur-
pose.
The trouble between England and
the United States had been growing
all Of that time, and despite, lack of
preparation on the part Of the new
country, war was declared In June,
1912, and congress was again called
upon to face extraordinary financial
demands.