THE OMAHA DAILY BEE : WEDNESDAY , DECEMBER 7 , 18J)8. )
CONDITION OF THE TREASURY
Secretary Gage BubmlU Hli Annual Be per
of the Department.
RESULT OF YEAR'S FISCAL OPERATIONS
Showing the Condition of
the Nation' * FlnniiccN , vrlth Heo-
ommenilotlonn for the
Future.
WASHINGTON , Doc. 6. Following Is the
annual report of Lyman J. Gage , secretary
df the treasury :
The aggregate receipts for the fiscal year ,
under warrant , a shown by the report ol
t&o treasurer of the UnltoJ States , were
$738,549,255.20 , and the disbursements , $827-
688,124.80. There wan consequently a de
crease of $89,038,869.60 In the general treas
ury balance , which stood at $864,790,237.71
t the opening of the year and at $775,751-
868.11 at too close. Besides the ordlnarj
revenues , there were receipts on account o !
the public debt which swelled the total In
come available ) In the fiscal operations ol
the government to $481,612,255.20 , while cor
responding additions to the ordinary ex
penditures brought the total on this side ol
the account up to $543,561,104.80 , and created
a deficiency of $61,948,849.60 aa the net re-
eult. These figures , however , do not Includi
any part of the loan of $200,000,000 , th <
proceeds of which had begun to come It
before the dote of the year , though none
* ere formally covered Into the treasury un
til afterward. On the side of the recclpti
Is Included the sum of $64,751,223.75 , realized
from the sale ot the Union Pacific am
KansM Pacific railroads , while , on the othei
band , the expenditures are Increased by $29 ,
860,952. disbursed In the redemption o
Pacific railroad subsidy bonds.
A better view of the results of the year'i
fiscal operation * U afforded by the changei
in the assets of the treasury. The tola
holdings available In this branch ot thi
business show only the Insignificant falllnf
t from $283,295,424.23 to $275,747,803.17
o unusual a variance as this between thi
accounts of the department and the actua
condition of the treasury la due chiefly ti
the receipts from the now loan , on the oni
band , and to unexpended advances to dls
tuning officers on the other.
In the character of the assets there wa
eucii an Improvement as to constitute i
cubstantlal gain In strength. The change
were an Increase In gold and In deposits wltl
national banks , while the losses were di
silver and treasury notes. With Insignia
cant interruptions , tha free gold , whlcl
Blood at $139,867,158.67 at the beginning o
the year , continued to Increase until 1
reached $181,240,388.81 on May 4 , 1898
After this , the extraordinary expenditure !
caused by the war , together with the deple
tton of the other forms of cash , compelled
the use of gold In current disbursements
and drew down the treasury reserve , b ;
June 18 , to $163,474,057.32. .After . that dati
the proceeds of the loan began to afford re
lief and the reserve grew rapidly , until i
reached $245,063,795.51 on October 7 , 1898
the highest point this fund has ever at
talnod. Since then the necessities of thi
situation have required an enlarged us
ot the coin in disbursements , which ha
had the inevitable result ot diminishing th
holdings , though only to an iaslgnlflcan
extent.
By forethought and care an ample stocl
Ot notes of suitable denominations WM
provided to meet the demand for the annua
movement of the crops , and the dlfflcultle
presented by the task In former years hav
fcee'n In large part avoided. Within fort ;
days , alter , the 1st of September , Chlcagi
iUofie ta'VpP'leJ ' * ith | 5t60,000 In sraal
tbtes ln'exchange for 'larger denominations
In. the 'twelve months ended September 3
last the amount of outstanding notes of th1
denomination ot $20 and under Increase' '
from $861,433,82 * to $903,090,863 , while th
increase of the gold coin in circulation I
the same period , all of course ot the Ilk
denominations , amounted to $94,651,05 !
making a total addition to such currency o
1136,208,096.
Net Gold In Treasury.
Although the net gold in the treasury dui
Ing the last year has exceeded the needs c
( he government , having been greater , hot
absolutely and In proportion to other mon
eys , than ever before , it was found posslbli
up to the .middle of October , to accept gel
coin to the extent of over $15,000.000 In ex
change tor notes of small denomination !
which were needed to facilitate the buslnei
ot the country.
\ The first procMds of the popular loan <
$200,000,000 wert received on June 14 , an
from that date forward the Inflow of raone
from this source has been rapid and cor
tant. The total amount received up to Nc
Vembcr 1 was $195,444.187.62.
With the object of averting the posslbllll
of financial stringency , which might ha >
been apprehended as the result ot the dral
upon the currency In circulation , the pa ;
ment of the Interest due October 1 oh the
per cent loan of 1907 was anticipated , tt
maturing coupons being mad * payable o
September 10 , while the checks for the Ir
terest on the registered bonds were sent 01
September 20. Like , anticipation was all
made In the case of the interest falling di
November 1. The total amount of the pa ;
ment * thus advanced was $9,815,116.85. Wll
like.purpose , under the circular of Septen
t > er 3 , 1898 , the Pacific railroad bonds , whlc
will fall due on January 1 , 1899 , amountlc
to $14,004,660 , were made payable , prlnclp
nnd Interest , In full , wltti a rebate ot om
half of 1 per cent.It was also directed thi
a large share ot the proceeds ot the populi
loan be deposited in national banks , so th
these funds , while at all times available fi
use , might , until needed , remain In tl
channels ot trade. The deposits In nation
hanks were thus Increased by $66,775,610. :
between May 31 and October 31.
The effect of these measures has provi
In all respects satisfactory.
The director of the mint In his report fi
the fiscal year ended June 30. 1898 , thov
In detail the operations ot the instltutloi
Under bis charge , and also statistics of cell
Ayefs
derm Pectwal
Cheaper thin any
experiment , no mat
ter what the price.
age , production , and monetary conditions of
foreign countries.
The receipts and deposits of bullion at
mints and assay offlcce , Including redcposlts ,
aggregated $215,566,261,54 , of which $198 , *
740,492.23 was gold and $16,825,769.31 silver ,
classified as follows :
Oold :
DomeMlc bullion $69,881,120.57
Mutilated nnd uncurrent do
mestic coin l,187f J2.90
Foreign bullion and coin 73.6S7.447.W
Old plate and Jtwelry 236,943 37
Total original deposits 147,631,194 S3
lledeposlts 61,017,297.40
Total deposits $198,740.492.23
Silver ( coinage value ) :
Domestic bullion 6,484,364.07
Mutilated nnd uncurrent do
mestic coin 6,441,436.13
Foreign bullion and coin 717.227.1H
Old plate and Jewelry 616,572.72
Total original deposits 13.261.600.11
ncdeposlts 3,561.169.20
Total deposits J16,82o,769.31
The deposits of gold were greater than In
any previous year of our history. In but
one year have the original deposits exceeded
$100,000,000 , the exception being the fiscal
year ended Juno 30 , 1881 , when they were
$130,833,102.45.
Silver bullion purchased under the pro
visions of section 3526 , Revised Statutes ot
the United States , for coinage of subsidiary
silver aggregated 193,522.30 fine ounces , costIng - .
Ing $107,741.28.
Coinage.
Tbo coinage executed during the fiscal
year was :
Gold $64e.14f > 5.0 (
Silver dollars 10Oi > 2,7SO.OC
Subsidiary tllver 0.482.S04.0C
Minor 1,489,484.11
Total . $82,609,933.11
The silver dollars coined were from bul-
lon purchased under the act of July 14 , 1890.
The total coinage of silver dollars from
ulllon purchased under act of July 14 , 1890 ,
rom August 13 , 1890 , to July 1. 1898 , was
78,751,257 , containing 60,909,175.32 fine
uncee , costing $58.460,975.54 , giving a selgn-
orage of $20,290,281.46.
Uncurrent gold coin of the face value ol
1,198,860 , and mutilated silver coin ot the
'ace ' value of $6,109,722.32 were received. .
L'hls represents In new gold coin $1,187,683.99 ,
and new silver dollars $5,443,436.13 , or IE
new subsidiary silver coin $5.820,159.16.
Ot the subsidiary silver coinage , $5,962,141
were coined from worn and uncurrent sllvei
coin transferred from the treasury for re-
olnago and $520,663 from silver purchased
under provisions of section 3,526 , revised
tatutea , for the subsidiary silver coinage ,
in which later the seigniorage was $286-
11.22.
Silver Balance * .
The balance of silver bullion on hand
at the mints for the coinage of silver dol-
ars , subsidiary silver coins , and for pay
ment of deposits of stiver bullion in fine
bars , July 1 , 1898 , was :
Items. Fine ounces. Cost.
urchascd under act
of July 14 , 1890 . . . .107,701,936.56 $97,407,490.8i
"or subsidiary silver
coinage at mints. . 1,041,122.64 1,356,316. ;
'or ' subsidiary sllvsr
coinage at assay
offices 201,494.06 122,815.1 ;
At United States as
say olllcc , New
York , for payment
of deposits In fine.
bars 419,951.13 466,612.3 ;
Total .109,364,504.89 $99S53,2S53 ;
Including the balances on hand In the
mints July 1 , 1878 , the net seigniorage on
.he coinage of silver from that date tc
June 30 , 1898 , was $88,182,815.37.
Of the minor coins manufactured during
he year , $1,148,238.81 were from new ma-
erlal and $341,245.30 from old and un
current minor coins transferred from the
rcasury for rccolnage.
The amount of minor coins transferred foi
reissue waa $198,900. ,
The total amount ot minor coins'out-
landing on July 1 , 1898 , was $27,311,402.01.
During the fiscal year there were manu
factured gold bars ot the value of $92,187-
391.67 , and sliver bars , $7,667,887.90.
The highest quotation for silver 0.925 fim
during the year In the London market w
27 % pence , equal to $0.60831 per ounce flni
n United States money ; the lowest quota
tlon was 23 5-8 pence , equivalent tc
$0.51789. The average price for the yeai
was 26 6-16 pence , equivalent to $0.57675
The buirion value of the United State :
standard silver dollar , at the highest prlci
for the year , was $0.47040 , and at the low-
eat , $0.40055 , and at the average price
$0.44607.
The commercial ratio of gold to silver a1
the average price was 1 to 35.84.
The number of grains of pure silver a
the average price that could be purchase !
with a United States silver dollar wa
832.20 , equivalent to 1.73 fine ounces.
The expenditures necessary to malntali
the various institutions connected with thi
mint service during the fiscal year wen
$1,263,133.02.
The earnings from all sources during thi
same period were $4,695,797.96 , showing i
surplus of earnings over expenditures of $3 ,
432,664.94.
The net Imports ot gold during the flsca
year were $104,868,476 , as against $44,609,84
tor the fiscal year 1897.
The net stiver exports were $24,822,146
as against $32,636,835 for the previous flsca
year.
Tbo value ot gold and silver consumed li
the Industrial arts by the United State
during the calendar year 1897 waa : Oold
$11.870,231 ; slrver. coining value , $11,201 ,
ISO ; a total ot $23,071,381.
There were consumed In new material , li
the manufacture of these bars , gold , $7,184 ,
822 ; silver , $9,200,497.
The total metallic stock in the Unite-
States on July 1 , 1698 , was : Gold , $861,614 ,
780 ; silver , $637,672,743 ; a total ot $1,499,187 ,
523.
Silver Coinage.
The only provision of law now exlstlni
by which any Increase In the stock of frac
tlonal coin in the country can be made I
that ( section 3545 , Revised Statutes ) author
Izlng the purchase of the small amount o
silver contained In and separated from gel
deposits.
The amount of silver thus obtained las
year from gold deposits was 184,595.39 fin
ounces , which would be sufficient to col :
about $256,000 of our fractional coin. Thi
Is wholly Inadequate to meet the actual de
mand , There has been In the past a larg
stock of fractional coin In the treasury , ac
cumulated after the resumption of sped
payments. During the period of pape
money our stock of stiver coin was exporte
principally to Central and South America :
countries , where It passed at its face value
but upon resumption of specie payments an
the passage of the act of June 9 , 1879 , pro
vidlng for the redemption of fractional sllve
at Its face value , thMe coins returned I
such quantities that , with the new colnag
executed , the fractional sliver became reflun
dant and accumulated In the treasury. Fa
the last ten years the country has been at
scrblng that stock at the rate of from $1,500 ,
000 to $2,000,000 per year , and this year tn
demand has been exceptionally strong. Th
amount of fractional silver coin held by th
treasury July 1 , 1897 , was $16,201,960 ; o
July 1 , 1898 , $12,070,690. This stock has , a
present , November 18 , been reduced t
$7,122,506 , much of which Is so worn as t
be unfit for circulation ,
l > o n and Currency *
The Interest-bearing debt July 1. 1897 , Ir
eluded unmatured United States bonds oul
standing in the amount of $847,820,000. N
material change appeared In the debt stat
ments In the fiscal year ended June 30 , 1S9
but on June 13 a circular was published IE
vltlng public subscriptions for $200,000,01
S per cent bonda authorized by the act c
June .13 , 1S98.
The public response to tkls Invitation wi
not ceaOfltd to any itctloi , et thi counti
and during the thirty days prescribed tn the
circular as the period for subscriptions then
were received 232,224 of $500 and Usi , ac
companied by full payment for the bonds ,
and over 88,000 In sums greater than $500 ,
accompanied In each Instance by a deposit
of 2 per cent of the amount subscribed. The
tntnl nutacrlptlons of $500 and less was
$100,444,560 and the total In greater amounts
than $500 , Including certain proposals guar
antying the loan , amounted tn the aggre
gate to more than $1,400,000,000.
As provided by the circular , the allotment
of bonds to subscribers ot amounts greater
than $500 began Immediately upon the close
of the books July 14 , the smallest subscrip
tions being first allotted until those of $4,40C
and less had been reached , There was a
residue , ascertained to be about $2,500,000 ,
which was allotted pro rata among the sub
scribers ot $4.600 , each subscriber for thai
amount being awarded the sum of $1,300
On page SO will be found a statement show
ing the numbtr of subscribers , by groups
for amounts over $500 and $500 and less.
The bonds were dated August 1 , 1898 , ant
tbclr preparation was carried on as rapldlj
as possible. Soon after that date the department -
ment began their delivery , subscribers foi
$500 and less being the first to receive theli
bonds substantially In the order ot the re
ceipt and acceptance of their subscriptions
The delivery of the bonds to subscribers o :
this class was practically completed abou
the 1st ot September , though there are stll
some undelivered , owing to Incomplete ad
dress or pome other Irregularity not yet ad- -
justed.
Before the delivery ot the bonds to sub
Bcribers of $500 and less had been com
plcted the department began the delivery or
account of greater subscriptions. This hai
continued to the present time and Is still li
progress , as subscriptions amounting ti
about $200,000,000 are > sttll In part unpali
under that provision of the circular ot Jum
13 which provided for payments In Install
mcnts of 20 per cent at intervals ot fort ;
days.
Operation1 of the Tariff.
Domestic industrial enterprises are un
questionably benefited by the tariff act o
1E97 , designed n well to encourage homi
Industries as to Increase the revenues ot thi
government. By reason of the fact that Im
porter ? , anticipating the passage of the ac
referred to , provided themselves with largi
stocks ot merchandise of every description
the tariff of 1897 cannot be regarded ai
fairly tested by the receipts Immediate ! ]
following Its pamage. As an lllustrattoi
ot the correctness of this view , it may hi
stated that during the first four months o
the fiscal year 1899 the receipts from cus
toms ( exclusive of the duty on tea pro
vided by the war revenue law ) amounted ti
$62,776,080 , which la $4,633,026 In excess o
the receipts for a similar period in an :
year since 1892.
A reciprocal commercial agreement hai
been entered Into between the United State
and France , under the provisions ot sec
tlon i ot the tariff act ot 1S97 , and ncgotta
lions with a similar object In view are li
progress with other countries.
Chinese Exclusion.
The total number of Chinese persons ad
mltted to the United States in the las
fiscal year was 7,195. Ot this number 6,27 :
were of the exempt class , principally mer
chants , students , etc. ; 425 were so-callei
artiste , actors , artisans and laborers , ad
mltted for the Transmlsslsslppl and Interns
tlonaf exposition at Omaha , and 1,497 wen
returning registered laborers. There wer
also 865 who passed through the Unltei
States under bond In transit to other coun
tries. Two hundred and eighty Chines
were refused admission.
The number of Chinese persons arrestei
for deportation because unlawfully In thi
United States was 766. Of this number 22
were deported , .by due process of law , at i
total "expense1 of $24,132.94. 'ThS-Kgsregat '
expense Incurred in the enforcement o'f th
Chinese-exclusion laws was $84,453.74.
The Joint resolution approved June 30
1897 , authorized and directed the admlscloi
to the United States ' of such number o
mechanics , artisans , agents , or other em
ployes , natives of China , as the secretir
of the treasury night deem necessary to
the purpose of preparing and cono/uctln ,
any privileges or concessions which mlgh
bo granted by the Transmlsslsslppl and In
lei-national Exposition company of Omaha
Neb. , In connection with such exposition
The department waa duly advised of th
granting ot two concessions for Chinese ex
hlblta at the exposition and the concession
ilrea , with the approval ot the proslden
of the exposition company , made appllca
tion for the admission of 835 Chinese. Re
Harding the number excessive , the landtn
of 650 Chinese persons under the conces
slons r f rred to was authorized and c
this number 426 were admitted during th
last fiscal year.
The department la now advised that man
of the Chinese admitted are no longer a
the Omaha Exposition and that a consider
able number of women so admitted hav
since been the subject of barter for immora
purposes.
With the close of the fiscal year 189 !
the United States Marine Hospital servlc
completed the 100th year of Ua exlstenci
the original act for the relief of sick an
disabled seamen having been passed b
congress on July 16 , 1798. The expenditure
from the marine hospital fund during th
fiscal year 1898 were $600,131.45. The balance
anco on hand at the close of the fiscal yea
was $514,997.83.
Port * nice.
An Important question , which will n
doubt demand consideration in congress c
an early day. la the money situation 1
Porto Rico. The existing currency of th
Island consists of silver coins known a
pesoa and centavos. The peso Is of th
weight and fineness of the Spanish piece c
5 pesetas and corresponds in both reaped
to the 6-franc pieces of the Latin unloi
Its bullion value , compared with the bul
lion value of the American dollar , is as 93 ,
Is to 100. The centavo Is ono-hundredth <
a peso , and the smaller coins consist (
pieces ot 20 centavos and 40 centavos , the :
being the exact counterpart In weight an
fineness ot the Spanish pieces of 1 and
peseta * and the French coins of 1 and
francs.
The Porto Rlcan coin bears no fixed re
latlon to gold , not being anywhere redeem
able in the yellow coin. They were Intrt
duced Into the Island by Spain In 1895 , an
by a forced exchange were substituted fc
Mexican coins , which had previously con
stltuted the principal money medium , Th
best estimates obtainable place the volura
ot this silver money now circulating I
Porto Rico at 6,500,000 pesos. The fact thi
the Spanish government put the sate
quantity of fine silver into the peso as
did Into the 5-peMta Spanish coin Indicate
a purpose to have maintained the two on
parity. If so , the purpose was not accorc
pitched ; the Porto Rlcan coins quickly fe
below the value ot the coins ot the herr
government and have since had no estat
llihed relation In value to them. The osctl
latlon In value a related to gold coin he
been constant , rising and falling , as affecte
by the state ot exchanges between Port
Rica and Its foreign markets.
It U unnecessary here to point out at an
length the general evil results upon Indus
try and commerce of a currency medium i
out ot harmony with the world's money i
to Induce a widely fluctuating rate of ej
change. It may be instructive to cnnsidc
them as Illustrated In Porto Rico. Situate
as that island now is , with a clrculatln
medium void of any established relation I
the world's money of commerce gold It
exposed to the fullest extent to such ev
results.
It la highly Important that American ci ;
Jtal ihguld flat so obstacle * la 1U Uuwf <
to and from Porto Rico , If the United States
and the Island alike are to reap the benefits
which ought to flow from their proximity ,
their new relations , and from the enterpris
ing commercial spirit of our people. A wide
difference In the rat * ot exchange , occa
sioned by the use of a differing and unre
lated currency , Is a serious obstacle to the
transfer of capital , aa It Is to legitimate
Industry. The obstacle can and ought to bo
removed.
TT llond Imiue ,
Under the caption ot loans and currency on
page 24 of this report will bo found par
ticulars ( In the way of Information ) as tc
the Issue of $200,000,000 3 per cent bonds ,
authorized by the act of June 13 , 1898. When
the bill was reported , which after amend
ment became the law , eoruo doubt was ex
pressed .by those best acquainted with such
matters whether bouda bearing so low a rate
as 3 per cent would be sold except at a dis
count. There were substantial facts cited
In support of such opinion. The then recent
declaration of war with Spain had disturbed
the always sensitive conditions of trade and
finance. The morbidly timid along our east
ern and northern coast were In a stale ol
moro or less alarm. The slmpler-ralndei
depositors In savings banks made withdrawals -
drawals of their funds ; the commercial
banks In the larger cities sympathetlcall ]
suffered through loss of cash reserves te
savings Institutions. The rate ot Interest
rose ; the price of securities declined. Ever
old issues of United States bonds fell to :
point where they would yield to the Invcstoi
from 3.1 to 3.25 per cent per annum upoi
an Investment then made. Such was thi
condition of the financial market In the lat
ter part of April and the earlier part o :
May Ust.
That the popular loan method so success
fully used on this occasion gave genera
satisfaction to the people Is beyond dispute
Led to believe whether Justly or unjustly-
that on former occasions advantage had beei
taken of public necessities by Intermediaries
who had made unfair profit between tin
government and the people , they hailed wltl
satlifactlon this attempt to deal directly wltl
the citizen. There was a great moral valui
In this , difficult to estimate tn terms o
money , yet worthy of consideration in thi
mind ot the statesman. Was the operatloi
advantageous , also , from on economic stand
point ? As already Indicated , a bonus o
perhaps five millions could have been se
cured by offering the loan to competitive
bidding. That was the sacrifice made li
order to place the loan directly with thi
people at the uniform price of par.
It Is evident that an attempt by congrcs
to fix the proper rate of Interest lo justtf ;
an offer of the government's obligations a
par will always be subject to ono of twi
dangers :
First , If the rate Qf Interest be fixed toi
low time and circumstances being consld
ered the loan may fall , with the consequence
quence of serious derangements to the trcas
ury ; or ,
Second , if the rate of Interest bo flxei
too high and the Issue offered at par , whlli
It will be eagerly taken , the result may b
a great economic waste to the treasury.
In submitting my report I feel It my dut ;
to impress upon congress , as best I may
the Important subject of currency and bank
Ing reform.
It Is the misfortune of evil conditions t <
produce derangement and hinder progress
which , It long continued , so accustom th
subject of them to their existence as t
create In him apathetic Indifference to need
ful and healthful reforms. Indeed , It Is ;
familiar fact that individuals , families am
nations Ignorantly suffer under the lllustloi
that the very source ot their affliction I
Itself an agency for good. Something Ilk
this has marked our flnanclal history to
thirty years. Making prcgresa _ In eplte o
all obstacles and embarrassments to com
merce and industry , we--ascribe the advance
ment to the causes 'which have really ham
pered and disconcerted the forward and up
ward movement. With a financial systcr
condemned by the judgment of the mos
experienced and wise , both at home au
abroad , Us evils Illustrated In dally bust
ness and emphasized In' recurring panics , w
fall , with an obtuse timidity , to face th
questlcns which must be met and rlghtl ,
solved before Industry and commerce ca
be established upon enduring conditions o
aacurlty.
The argument * against government Issue
of paper money as a medium for commor
clal exchanges have been fully made an
need not be repeated In detail. Its rlgldltj
Its failure to meet demands where demon
Is most urgent , the dependency of the who ]
Industrial structure upon the state ot th
revenue and public expenditure these ar
Important links In that chain of argument
Even In a state of foreign war the civilize
demand of both contestants Is for due re
spect to private property and Individual con
tract relationships. How much moro In
state of peace , in a free etate , should prlvat
rights and contract relationships be give
Immunity from the Incidental , though serl
ous , effects now suffered through perturbs
tlons in government finances. The menac
to our domestic affairs , several times recut
ring from a threatened change in the stand
ard under which they are carried on , an
our foreign trade settled , has been a com
panlon evil perhaps the greater ot the twi
The cure for these evils la not difficult t
find , it lies within the easy range of con
gressional action. Nor Is the remedy one t
Inflict even temporary pains or penalties o
the body politic. The healthful , stluulatln
effect of right action in these direction
would be experienced with the first sense c
assurance that the desired end was to b
accomplished.
Faper Currency.
The proposal to substitute bank Issue
for government notes Is opposed with man
honest prejudices and assailed by bitter de
nunclatlons. The Bret arlso from a fallur
to comprehend the true philosophy of
paper currency , and must be patlentry con
aldered. The latter obscure the queetlo
by reckless statements , charging that a !
propositions for currency reform are ban
conspiracies to exploit the people.
I shall not be outside of my duy If
venture to point out. In at least ono In :
portant respect , the advantages to the poore
districts of the country of a properly con
stltuted bank currency. It may bo done b
fairly describing the course of the flnan
clal movement a it now goes on and b
presenting in contrast the movement as I
would go on under the conditions advocatei
It Is a familiar fact that , In the period c
harvesting and crop moving , the currcnc
is strongly drawn from the centers to th
country districts. When tbls movement 1
over the currency again tends toward th
centers. The currency flows to the cente
to pay Jeans occasioned by its use an
other general indebtedness and also to ae
euro the benefit of interest to the countr
banker for a portion of his funds , which t
a dull period would otharwlso lie unemploye
In his hands. At present the currency e
sent consists almost entirely of legal tendc
note * and treasury note-e that Is to ea ;
In the money which the law recognizes s
lawful reserve. Thus received by the bank
In the roonsy centers , It becomes a recerv
for deposits In the relation of one to fou
Now , deposits may be Increased by Tear
as well as by the deposit of rash. A loafer
for ten thousand or a hundred thousand go <
to the borrower's credit upon the bank' '
books and swells the deposit account b
so much. True , the borrower may chec
against this fund , but bis check may all
be deposited In the same bank , In whlc
case tt Is a mere transfer to another ai
count ; or , If It be deposited In anoth <
bank and paid In money by the lending ban
it is still a transfer. The ( total deposits <
all the banks are awrlled by this orlglm
roan.
la conflraatlon that thU exptailvo mor <
ment Is fairly described , I quote from tho' '
New York Herald ot November 13 an fol
lows : "Comparing yesterday's ( clearing' '
house ) statement with that of five- weeks
ago , It appears that the bunks hold $1,1-
000,000 moro money and have expanded
their loans by the surprising amount ot
$51,500,000 , the Increase In 'deposits' resultIng -
Ing from these two Items being no less than
$66,000,000. " It can be easily perceived that
this possibility ot Increasing loans ngalost
an Inflow of reserve funds In the proportion
tion of four to ono Is n temptation to which
the city bank ts likely to yield. U must
be remembered that this Inward movement
of currency from the country occurs at the
time of year when commercial activities
arc the least and the general requirements
for the use of loans In the Interior arc the
smallest. The effort ot the banks nt the
centers to * Increase their loans causes In
terest to fall. The fall in the rate of In
terest causes Interest and dividend paying
securities to rise. The rise In securities
Induces speculative buying. The * specula
tive buyer becomes the bank's borrowing
customer. The banker ts thus enabled to
"put out his funds , " as ho Is apt to term
It , though he really does no such thing.
He keeps his funds , but , In the way de
scribed , ho swells his deposit liability until
hU funds on hand arc undo answerable to
the rule of one of cash to four of lUbllltlea ,
or 25 per cent against his "deposits. "
It Is In the condition above described , with
varying degrees of regularity and Intensity ,
that the financial status Is found when the
crops In the west and south approach bar-
i vest that Is to aay , a maximum of loans
and deposits ; a minimum In cash reserves.
Country HnnkerV UMicrlenee.
During the season until then , the country
banker has found that his drafts nnd
checks on his eastern correspondents , dis
tributed to his customers , supplied their
needs for Instruments of exchange and pay
ment ; but ho finds that for the payment of
farm wages , the purchase and transfer of
farm products , such Instruments are not
adequate ; cash Is required for these pur
poses , either In metallic money or paper
currency. This forces him to make requisi
tion In the form of money by express on
his eastern balances. Nay , more ; If crops
be largo and prices good ho Is forced to sup
plement his own resources by borrowing
for a period nt the centers. His correspond
ent at 'the center , In meeting his rcqulsl-
I tlons for the money due his country cus
tomer , Is obliged to take It from what had
before constituted his legal reserve. Tills
disturbs the equilibrium of relationships. To
recover his position ho turns upon the
street nnd calls In a portion of his loans.
If the Interior banker , after thus calling
for the balances due him , asks In addition
for a loan , the city banker Is often obliged
to Inform him that "money Is very close"
and ho cannot accommodate him. It must
be noted also that the effort of the city
banker to restore his Impaired reserve ny
calling money from the street does not ac
complish that direct result. There Is
no money "In the street ; " It Is nil .In bank
vaults and the total stock cannot bo aug
mented except by Inducing It to come In
from without. What does result Is a forced
liquidation , a fall In prices of securities , n
rise In Interest sufficient to Induce outside
money to como In. In this process the mer
chant and the manufacturer find tt difficult
to negotiate their credits. They also are
told "money ts tight" and lhat they must
withhold applications for discount favors.
I forbear to follow Into furtncr detail
the unprofitable and vexatious movement.
Gradually , after more or less strain and
anxiety , sometimes bordering on panic ,
sometimes resulting In panic , a readjust
ment Is secured. Crops from the Interior
not seldom forced from the producer's hands ,
with little regard to price , , because of his
Inr/llty" to borrow from 'his ' local banker
move to the seaboard. The strain on the
country Is relaxed. Again currency In the
form of ' 'reserve funds" jnoves to the cen
ter. Again one dollar thus received be
comes effective as reserve for four dollars
of liability. Money Is quoted easy , as the
prospect for summer dullness becomes as
sured. "Tho street" breathes easier , stocks
and securities become "firm" and the move
ment toward tin expansion in loans with
Its attendant phenomenon of an Increase In
deposits Is again observed , to be again fol
lowed by restriction .and probable distress as
the active season In productive Industry
and trade again appears.
Whoever has followed this delineation of
our financial movement , and those who are
familiar with the facts which are thus
portrayed , ought not to have trouble In
perceiving that the bottom cause of the
Irregular and deranging effects described is
to bo found In a fixed volume of paper
money clothed with full powers of a legal
tender. Upon thle money Itscrf a credit
obligation other credit obligations , In the
form of bank deposits through bank loans ,
may be built up in the proportion ot four
to ono. With the volume of paper money
thus fixed with no natural movement to
ward Its retirement when not needed In
legitimate trade the tendency to build the
four-story structure upon it as a perma
nent base Is Irresistible. The withdrawal
of the base by those who really own tt
causes the structure to vibrate and threatens
It with a fall.
If It be conceded that the legal tender
money Issued by the government does not
possess the qualifications to make It a
proper factor In the country's exchanges of
products and manufactures ; if the fact also
be admitted that It is a deranging and dis
turbing factor In Its relation to Industry and
commerce , then the time has como to sub
stitute for It a currency which will ade
quately , economically and safely meet the
ever-growing needs of the country , rapidly
developing , as It Is , In the power of pro
duction , In the number ofIts , people and the
importance ot its domestic and foreign
trade.
War Taxes.
The report of the commissioner of Internal
revenue possesses peculiar Interest , Indi
cating , as it does , the operation of the war
revenue act of June 13 , 1898. It shows1 quite
clearly that the aggregate revenue to be de
rived therefrom win form a smaller total
than was estimated by the more sanguine
ot Its supporters.
The commissioner's estimate of $100,000-
000 from this source seems to be fairly Jus-
tilled by the results to the treasury during
the period from July 1 to the present time.
His report goes also to show the friction
and embarrassments which have arisen
from the need of Interpreting obscurities In
the act Itself and the application of such
Interpretation to specific cases coming under
the same general head , yet differentiated
from each other by more or less Important
particulars. Many complaints have arisen
from those unreconciled to such interpreta
tions or applications , and , granted a well
balanced relation between revenues and ex
penditures , It might be well to consider the
propriety of repealing eorao of the more
vexatious features ot the act. Until moro
rattled conditions , however , as to extraor
dinary expenditures for army and navy are
reached , even such repeal cannot be recom
mended by this department. Some verbal
amendments , making more clear the Inten
tions ot congress , are to be desired , and
representations In this direction may be
made the subject ot a separate communica
tion to congress at an early day.
| A Ilnce AKiiliml Flrf.
I After ten days' fight to avoid death , the
crow of a steamer from Spain recently ar
rived In Daltlmore. In mldocean It was dis
covered that tlamea were raging In the ves
sel's hold. For ten long days the crew
bravely fought the flames. If men would
fleht as persistently against disorders of the
stomach and digestive organs , there would
be fewer premature deaths. The best weapoq
for such a fight Is Hosteller's Stomach bit
ters. U Is the greatest of tonics and the besi
ot remedies for kidney , liver , bladder ano
klood disorder * .
A. T. Mahan
Contributes to McCt.t'ltK'8 MAO A *
KINK , beginning with the December
numbera poi'lcs ot nrtlelp" on The War
on Sea anil Its Lessons. Caplnln
Mnhnn win a inumlwr of the Nnvaj
Strntesry Hoard. Dav by day ho HtmlleJ
Tlic War In Its Making uiul liulped to
make it. Ho Im * . thuroforo , I'irst-lmnii
Command of IMuns and F.vents , po8-
piblo to no other writer. Cnitnin | Mnhnn
Is recognized nbrond us well ns nt homo
to bo the
.Foremost
Naval Authority
in thG world.
nnd his articles tire onporly nwnlteil In
' Europe- and Atnurlun as important con
tribution ! ) to the lilntory of naval war
fare , and also fur their supjestions and
indications a ? to ships , armament * , opo-
ratlons and strategy of the future. Those- articles will emphatically con
stitute
THE GREATEST CONTRIBUTION TO
THE HISTORY OE THE WAR.
The first article- explains what determined the direction and nature of
The First N.tvul Movements , Knowing how , if the motive of the war
had been dilToiont , the movements would have been different also.
This series begins in the DUCEMllEIt iNUMUERof
McCLURE'S
Now on Sale Everywhere.
10 Cents a Copy. $1.00 a Year
THE S. S. McCLURE CO. , New York City.
TWENTIETH OUT FOR A TRIP
Another Begiment of Infantry to Be Bent
to the Philippines.
GENERAL PATTERSON ITS COMMANDER
Former Lieutenant Colonel of ( he
Twenty-Second Iln > a Ulinnce to
Take ilic IOIIK Journey \en >
of the Deportment.
Dispatches from Leavcnworth announcing
the preparations of the Twentieth Infantry
to move to the Philippines have some Inter
est to Omaha , although that regiment has
never been stationed here , Brigadier Gen
eral Patterson , formerly lieutenant colonel
of the Twenty-second Infantry , will become
colonel of the Twentieth when he concludes
his work as chief mustering officer for the
state of New Jersey , In which position ho
takes the rank of brigadier general of volun
teers. It he will go with his new command
on its contemplated Journey he takes the
title of colonel in the regular array , and be
may again have an opportunity to show the
meUl of which he is constituted. He was
with the Twenty-second when It went to
Cuba , and took part in the fight at El Cancy ,
where this regiment suffered such heavy
loss , and where Colonel Charles A. WlkofI
tret his life. General Patters'n was ccrloualy
woundtd In that engagement , being shot
through the thigh , and a number of his
brother officers were also wounded. Some
of General Patterson's friends believe , however -
ever , that he will relinquish the command
of the regiment to a younger man , If It
shall be ordered on so long a journey as that
mentioned in the Leavenworth dispatch.
The accounts of Major Katz , U. S. V. ,
chief commissary of the Department of the
Missouri , ore being examined by Captain
Beck , inipector general , previous to the
office being turned over to Major Duval , U.
S. A. , who Is hero to relieve the former
officer , The two oHlccrs visited the govern
ment storehouses yesterday to check np
stores there. At the last Inspection of the
office the commissary's accounts were found
In excellent shape , and with this record no
delay Is anticipated In making the transfer
promptly. Major Katz left yesterday after
noon for Washington.
lie Has Earned n Re t.
Lieutenant Moore , U. S. A. , who has been
one of the mustering officers taking care of
the Second Nebraska , has applied for a
teavo of absence that he might more thor
oughly recuperate from the effects ot Cuban
fev r , but was unable to obtain It as so
many officers arc now on leave. The lieu
tenant wont to Cuba with the Twenty-sec
end Infantry , and became Infected with
malaria while there , which produced two
or three successive attacks of fever , and
while he has been able to attend to bin
duties as mustering officer. It has been con
siderable of a task , as ho has not at any
time been thoroughly recovered from his
Illness.
One of the greatest duties Captain Beck
has had to perform as Inspector general ol
this department has teen to establish some
records for his office. Under army regula
tions Issued in 1S95 the position of depart
ment Inspectors was aboltehed , and the
work was done by district Inspectors. Aftei
a trial of ttie now orders for a few yean
they wore found to bo unsatisfactory and
a return was made to the department In
spector. In the meantime the records o !
the office had been removed and the roomt
occupied by the Inspector pre-empted by thf
judge advocate of the department. Previous
to the appointment of Captain Beck the in
spections were made by , an officer from th <
Department ot Colorado , which Is tempo'
rartly allied with this department , and thi
records were kept at Denver , and when thi
captain began his work he had nothing li
his office with which to begin. He has ba (
to dig for everything , and it was not untl
within the last few days that ho secured i
full quota ot the blanks ho is required t <
uso.
uso.Major A S. Towar , U. S. A. , chief pay
master ot the Department of the Missouri
who is away on a leave of absence , Is nov
visiting In Detroit.
Lieutenant Colonel Charles Porter
Twcnty-eecond Infantry , who is expected t
arrive at Fort Crook within a few days , I
now at Washington on a leave of absence
' Ho was appointed to the Twenty-second t
nil the vacancy caused by the promotion o
i General J. II. Patterson , but has not ye
! joined the regiment. Colonel Porter at on
time was stationed at Fort Nlobrara.
Lieutenant W. S. Wood , late adjutant o
the Ninth cavalry , who has just been ap
pointed captain and quartermaster in recog
nltlon of his gallant services In the Santlag
campaign , Is a personal friend of Captali
Hutchraon , adjutant general ot this depart
ment , and succeeded the captain as adju
tant of the Ninth cavalry.
iauiluatton and EnlUtmeuti.
There are now being examined by th- -
various promotion boards In different sec
tlons of the country about thirty captain
and fifty first lieutenants of Infantry wbi
are up for promotion.
The aggregate enlistments In tbo army a
city stations during tbo 9DtU ot Qctgbe
was 1,982 , with 7,270 rejected ; enlistments
at posts and In the field amounted to CCS ,
with 250 rejections ; and enlistments under
the special recruiting service were 980 , with
1,757 rejections.
Lieutenant Colonel Daniel D. Wheeler ,
deputy quartermaster general , U. S. A. ,
formerly chief quartermaster of the Depart
ment of the Missouri , and well known In
this city , has been assisted to duty as
special Inspector of the quartermaster's de
partment , and while on this duty will have
the rank of colonel.
Major B. A. Kocrper , chief Burgeon of the
Dfpartment of the Missouri , left yesterday
afternoon for Fort Leavennorth , where ho
will sit as president of an examining board
to examine Second Lieutenant William
Yates , First cavalry , for promotion. The
major will return to Omaha Thursday.
.V general court-martial has been ap
pointed to mc < ! t at Fort Ulloy , Kan. , on
Thursday , or as soon thereafter as practi
cable , to try such cases as may be brought
before it. The detail of the court is as
follows : Captain William W. Wetherspoon ,
Captain Robert K. Evans , Captain Daniel F.
Anglum , Fim Lieutenant Dona T. Merrill ,
Second Lieutenant Hugh A. Drum , Second
Lieutenant Van Leer Wills and Second Lieu
tenant Glenn H. Davis , judge advocate , all
of the Twelfth infantry , nnd First Lieuten
ant Edmund S. Wright , First cavalry.
General order No. 20 , from the Department
of'the ' Missouri , announces the arrival of Ma
jor J. II. Duval to assume the duties ot
chief commissary of the department.
Captain Frederick T. Van Llew , Second
Infantry , well known In Omaha In connec
tion with his work with the Thurston
Rifles , has had his leave of absence ex
tended thirty days on account of sickness.
COMMERCIALCLUB MEETING
_
KieenUve Committee AdontM n Ileoo-
Intlon In Favor of n Lower Rate
for 1'arcel" 1'iiitiiKu.
At a meeting of the executive committee of
the Commercial club yesterday afternoon a
resolution was adopted calling upon congress
to provide for a lower rate for parcel pont
age on packages going to foreign countries ,
and also for lower rates for use in this coun
try. The great need of this reduction Is set
, forth In the preamble , and the action of ex
press companies in refusing to pay the war
revenue stamps Is given as a special reason
why the government should take steps to
increase and popularize this particular
branch of the postal service.
A letter was read from Thomas R. Cutler ,
i manager of the Utah Sugar company at
Lehl , in which he says that cattle and sheep
can be fattened rapidly on the pulp from the
' sugar beet. Ho eays cattle will take on 400
pounds in four months on this pulp.
| A circular from the Texas Board ot Trans-
portatlon to express companies doing busi
ness In that state was read , In which tha
board notifies the companies they must pay
the war revenue tax on packages consigned
to them for transportation , and that refusal
to do so will result in a fine ot $500 for
each offense.
Matters pertaining to the exposition next
year vrero discussed Informally , but no ac
tion either for or against the enterprise was
taken.
It was announced In the meeting that thi
jobbers of the city would meet at the Com
mercial club this afternoon at 1 o'clock
to discuss the exposition project.
Bx-I'renldent Cleveland In a Colllnloa
NEW YORK. Dec. 6. The steam yacht
Onclda. having on board Its owner , E. C.
I Benedict , and ex-President Orover Cleve
land , was in collision with a transfer float
off the Battery wall In tbo upper bay to
day. The yacht , which sailed on yesterday
from Norfolk , had Us bowsprit carried
I away. Messrs. Cleveland and Benedict
| landed at the Battcrv and the yacht con
tinued on its way up the East river.
Wo have a fresh stock of Hilton's No. t.
Order of us. fWlillMAN & M'CONNELli
DRUG CO ,
