Part 6

The World's Industrial Exposition, held at New Orleans last winter, with the assistance of the Federal Government, attracted a large number of foreign exhibits, and proved of great value in spreading among the concourse of visitors from Mexico and Central and South America a wider knowledge of the varied manufactures and productions of this country and their availability in exchange for the productions of those regions.

Past Congresses have had under consideration the advisability of abolishing the discrimination made by the tariff laws in favor of the works of American artists. The odium of the policy which subjects to a high rate of duty the paintings of foreign artists and exempts the productions of American artists residing abroad, and who receive gratuitously advantages and instruction, is visited upon our citizens engaged in art culture in Europe, and has caused them with practical unanimity to favor the abolition of such an ungracious distinction; and in their interest, and for other obvious reasons, I strongly recommend it.

The report of the Secretary of the Treasury fully exhibits the condition of the public finances and of the several branches of the Government connected with his Department. The suggestions of the Secretary relating to the practical operations of this important Department, and his recommendations in the direction of simplification and economy, particularly in the work of collecting customs duties, are especially urged upon the attention of Congress.

The ordinary receipts from all sources for the fiscal year ended June 30, 1885, were $322,690,706.38. Of this sum $181,471,939.34 was received from customs and $112,498,725.54 from internal revenue. The total receipts, as given above, were $24,829,163.54 less than those for the year ended June 30, 1884. This diminution embraces a falling off of $13,595,550.42 in the receipts from customs and $9,687,346.97 in the receipts from internal revenue.

The total ordinary expenditures of the Government for the fiscal year were $260,226,935.50, leaving a surplus in the Treasury at the close of the year of $63,463,771.27. This is $40,929,854.32 less than the surplus reported at the close of the previous year.

The expenditures are classified as follows:

For civil expenses $23,826,942.11 For foreign intercourse 5,439,609.11 For Indians 6,552,494.63 For pensions 56,102,267.49 For the military, including river and harbor 42,670,578.47 improvements and arsenals For the Navy, including vessels, machinery, and 16,021,079.69 improvements of navy-yards For interest on the public debt 51,386,256.47 For the District of Columbia 3,499,650.95 For miscellaneous expenditures, including public 54,728,056.21 buildings, light-houses, and collecting the revenue

The amount paid on the public debt during the fiscal year ended June 30, 1885, was $45,993,235.43, and there has been paid since that date and up to November 1, 1885, the sum of $369,828, leaving the amount of the debt at the last-named date $1,514,475,860.47. There was, however, at that time in the Treasury, applicable to the general purposes of the Government, the sum of $66,818,292.38.

The total receipts for the current fiscal year ending June 30, 1886, ascertained to October 1, 1885, and estimated for the remainder of the year, are $315,000,000. The expenditures ascertained and estimated for the same time are $245,000,000, leaving a surplus at the close of the year estimated at $70,000,000.

The value of the exports from the United States to foreign countries during the last fiscal year was as follows:

Domestic merchandise $726,682,946.00 Foreign merchandise 15,506,809.00 742,189,755.00

Gold 8,477,892.00 Silver 33,753,633.00 784,421,280.00

Some of the principal exports, with their values and the percentage they respectively bear to the total exportation, are given as follows:

Articles. Value. Percentage.

Cotton and cotton manufactures $213,799,049 29.42 Breadstuffs 160,370,821 22.07 Provisions 107,332,456 14.77 Oils--mineral, vegetable, and animal 54,326,202 7.48 Tobacco and its manufactures 24,767,305 3.41 Wood and its manufactures 21,464,322 2.95

Our imports during the year were as follows:

Merchandise $579,580,053.80 Gold 26,691,696.00 Silver 16,550,627.00 622,822,376.80

The following are given as prominent articles of import during the year, with their values and the percentage they bear to the total importation:

Articles. Value. Percentage.

Sugar and molasses $76,738,713 13.29 Coffee 46,723,318 8.09 Wool and its manufactures 44,656,482 7.73 Silk and its manufactures 40,393,002 6.99 Chemicals, dyes, drugs, and medicines 35,070,816 6.07 Iron and steel and their manufactures 34,563,689 5.98 Flax, hemp, jute, and their manufactures 32,854,874 5.69 Cotton and its manufactures 28,152,001 4.88 Hides and skins other than fur skins 20,586,443 3.56

Of the entire amount of duties collected 70 per cent was collected from the following articles of import:

Percentage. Sugar and molasses 29 Wool and its manufactures 15 Silk and its manufactures 8 Iron and steel and their manufactures 7 Cotton manufactures 6 Flax, hemp, and jute, and their manufactures 5

The fact that our revenues are in excess of the actual needs of an economical administration of the Government justifies a reduction in the amount exacted from the people for its support. Our Government is but the means established by the will of a free people by which certain principles are applied which they have adopted for their benefit and protection; and it is never better administered and its true spirit is never better observed than when the people's taxation for its support is scrupulously limited to the actual necessity of expenditure and distributed according to a just and equitable plan.

The proposition with which we have to deal is the reduction of the revenue received by the Government, and indirectly paid by the people, from customs duties. The question of free trade is not involved, nor is there now any occasion for the general discussion of the wisdom or expediency of a protective system.

Justice and fairness dictate that in any modification of our present laws relating to revenue the industries and interests which have been encouraged by such laws, and in which our citizens have large investments, should not be ruthlessly injured or destroyed. We should also deal with the subject in such manner as to protect the interests of American labor, which is the capital of our workingmen. Its stability and proper remuneration furnish the most justifiable pretext for a protective policy.

Within these limitations a certain reduction should be made in our customs revenue. The amount of such reduction having been determined, the inquiry follows, Where can it best be remitted and what articles can best be released from duty in the interest of our citizens?

I think the reduction should be made in the revenue derived from a tax upon the imported necessaries of life. We thus directly lessen the cost of living in every family of the land and release to the people in every humble home a larger measure of the rewards of frugal industry.

During the year ended November 1, 1885, 145 national banks were organized, with an aggregate capital of $16,938,000, and circulating notes have been issued to them amounting to $4,274,910. The whole number of these banks in existence on the day above mentioned was 2,727.

The very limited amount of circulating notes issued by our national banks, compared with the amount the law permits them to issue upon a deposit of bonds for their redemption, indicates that the volume of our circulating medium may be largely increased through this instrumentality.

Nothing more important than the present condition of our currency and coinage can claim your attention.

Since February, 1878, the Government has, under the compulsory provisions of law, purchased silver bullion and coined the same at the rate of more than $2,000,000 every month. By this process up to the present date 215,759,431 silver dollars have been coined.

A reasonable appreciation of a delegation of power to the General Government would limit its exercise, without express restrictive words, to the people's needs and the requirements of the public welfare.

Upon this theory the authority to "coin money" given to Congress by the Constitution, if it permits the purchase by the Government of bullion for coinage in any event, does not justify such purchase and coinage to an extent beyond the amount needed for a sufficient circulating medium.

The desire to utilize the silver product of the country should not lead to a misuse or the perversion of this power.

The necessity for such an addition to the silver currency of the nation as is compelled by the silver-coinage act is negatived by the fact that up to the present time only about 50,000,000 of the silver dollars so coined have actually found their way into circulation, leaving more than 165,000,000 in the possession of the Government, the custody of which has entailed a considerable expense for the construction of vaults for its deposit. Against this latter amount there are outstanding silver certificates amounting to about $93,000,000.

Every month two millions of gold in the public Treasury are paid out for two millions or more of silver dollars, to be added to the idle mass already accumulated.

If continued long enough, this operation will result in the substitution of silver for all the gold the Government owns applicable to its general purposes. It will not do to rely upon the customs receipts of the Government to make good this drain of gold, because the silver thus coined having been made legal tender for all debts and dues, public and private, at times during the last six months 58 per cent of the receipts for duties has been in silver or silver certificates, while the average within that period has been 20 per cent. The proportion of silver and its certificates received by the Government will probably increase as time goes on, for the reason that the nearer the period approaches when it will be obliged to offer silver in payment of its obligations the greater inducement there will be to hoard gold against depreciation in the value of silver or for the purpose of speculating.

This hoarding of gold has already begun.

When the time comes that gold has been withdrawn from circulation, then will be apparent the difference between the real value of the silver dollar and a dollar in gold, and the two coins will part company. Gold, still the standard of value and necessary in our dealings with other countries, will be at a premium over silver; banks which have substituted gold for the deposits of their customers may pay them with silver bought with such gold, thus making a handsome profit; rich speculators will sell their hoarded gold to their neighbors who need it to liquidate their foreign debts, at a ruinous premium over silver, and the laboring men and women of the land, most defenseless of all, will find that the dollar received for the wage of their toil has sadly shrunk in its purchasing power. It may be said that the latter result will be but temporary, and that ultimately the price of labor will be adjusted to the change; but even if this takes place the wage-worker can not possibly gain, but must inevitably lose, since the price he is compelled to pay for his living will not only be measured in a coin heavily depreciated and fluctuating and uncertain in its value, but this uncertainty in the value of the purchasing medium will be made the pretext for an advance in prices beyond that justified by actual depreciation.

The words uttered in 1834 by Daniel Webster in the Senate of the United States are true to-day:

The very man of all others who has the deepest interest in a sound currency, and who suffers most by mischievous legislation in money matters, is the man who earns his daily bread by his daily toil.

The most distinguished advocate of bimetallism, discussing our silver coinage, has lately written:

No American citizen's hand has yet felt the sensation of cheapness, either in receiving or expending the silver-act dollars.

And those who live by labor or legitimate trade never will feel that sensation of cheapness. However plenty silver dollars may become, they will not be distributed as gifts among the people; and if the laboring man should receive four depreciated dollars where he now receives but two, he will pay in the depreciated coin more than double the price he now pays for all the necessaries and comforts of life.

Those who do not fear any disastrous consequences arising from the continued compulsory coinage of silver as now directed by law, and who suppose that the addition to the currency of the country intended as its result will be a public benefit, are reminded that history demonstrates that the point is easily reached in the attempt to float at the same time two sorts of money of different excellence when the better will cease to be in general circulation. The hoarding of gold which has already taken place indicates that we shall not escape the usual experience in such cases. So if this silver coinage be continued we may reasonably expect that gold and its equivalent will abandon the field of circulation to silver alone. This of course must produce a severe contraction of our circulating medium, instead of adding to it.

It will not be disputed that any attempt on the part of the Government to cause the circulation of silver dollars worth 80 cents side by side with gold dollars worth 100 cents, even within the limit that legislation does not run counter to the laws of trade, to be successful must be seconded by the confidence of the people that both coins will retain the same purchasing power and be interchangeable at will. A special effort has been made by the Secretary of the Treasury to increase the amount of our silver coin in circulation; but the fact that a large share of the limited amount thus put out has soon returned to the public Treasury in payment of duties leads to the belief that the people do not now desire to keep it in hand, and this, with the evident disposition to hoard gold, gives rise to the suspicion that there already exists a lack of confidence among the people touching our financial processes. There is certainly not enough silver now in circulation to cause uneasiness, and the whole amount coined and now on hand might after a time be absorbed by the people without apprehension; but it is the ceaseless stream that threatens to overflow the land which causes fear and uncertainty.

What has been thus far submitted upon this subject relates almost entirely to considerations of a home nature, unconnected with the bearing which the policies of other nations have upon the question. But it is perfectly apparent that a line of action in regard to our currency can not wisely be settled upon or persisted in without considering the attitude on the subject of other countries with whom we maintain intercourse through commerce, trade, and travel. An acknowledgment of this fact is found in the act by virtue of which our silver is compulsorily coined. It provides that--

The President shall invite the governments of the countries composing the Latin Union, so called, and of such other European nations as he may deem advisable, to join the United States in a conference to adopt a common ratio between gold and silver for the purpose of establishing internationally the use of bimetallic money and securing fixity of relative value between those metals.

This conference absolutely failed, and a similar fate has awaited all subsequent efforts in the same direction. And still we continue our coinage of silver at a ratio different from that of any other nation. The most vital part of the silver-coinage act remains inoperative and unexecuted, and without an ally or friend we battle upon the silver field in an illogical and losing contest.

To give full effect to the design of Congress on this subject I have made careful and earnest endeavor since the adjournment of the last Congress.

To this end I delegated a gentleman well instructed in fiscal science to proceed to the financial centers of Europe and, in conjunction with our ministers to England, France, and Germany, to obtain a full knowledge of the attitude and intent of those governments in respect of the establishment of such an international ratio as would procure free coinage of both metals at the mints of those countries and our own. By my direction our consul-general at Paris has given close attention to the proceedings of the congress of the Latin Union, in order to indicate our interest in its objects and report its action.

It may be said in brief, as the result of these efforts, that the attitude of the leading powers remains substantially unchanged since the monetary conference of 1881, nor is it to be questioned that the views of these governments are in each instance supported by the weight of public opinion.

The steps thus taken have therefore only more fully demonstrated the uselessness of further attempts at present to arrive at any agreement on the subject with other nations.

In the meantime we are accumulating silver coin, based upon our own peculiar ratio, to such an extent, and assuming so heavy a burden to be provided for in any international negotiations, as will render us an undesirable party to any future monetary conference of nations.

It is a significant fact that four of the five countries composing the Latin Union mentioned in our coinage act, embarrassed with their silver currency, have just completed an agreement among themselves that no more silver shall be coined by their respective Governments and that such as has been already coined and in circulation shall be redeemed in gold by the country of its coinage. The resort to this expedient by these countries may well arrest the attention of those who suppose that we can succeed without shock or injury in the attempt to circulate upon its merits all the silver we may coin under the provisions of our silver-coinage act.

The condition in which our Treasury may be placed by a persistence in our present course is a matter of concern to every patriotic citizen who does not desire his Government to pay in silver such of its obligations as should be paid in gold. Nor should our condition be such as to oblige us, in a prudent management of our affairs, to discontinue the calling in and payment of interest-bearing obligations which we have the right now to discharge, and thus avoid the payment of further interest thereon.

The so-called debtor class, for whose benefit the continued compulsory coinage of silver is insisted upon, are not dishonest because they are in debt, and they should not be suspected of a desire to jeopardize the financial safety of the country in order that they may cancel their present debts by paying the same in depreciated dollars. Nor should it be forgotten that it is not the rich nor the money lender alone that must submit to such a readjustment, enforced by the Government and their debtors. The pittance of the widow and the orphan and the incomes of helpless beneficiaries of all kinds would be disastrously reduced. The depositors in savings banks and in other institutions which hold in trust the savings of the poor, when their little accumulations are scaled down to meet the new order of things, would in their distress painfully realize the delusion of the promise made to them that plentiful money would improve their condition.

We have now on hand all the silver dollars necessary to supply the present needs of the people and to satisfy those who from sentiment wish to see them in circulation, and if their coinage is suspended they can be readily obtained by all who desire them. If the need of more is at any time apparent, their coinage may be renewed.

That disaster has not already overtaken us furnishes no proof that danger does not wait upon a continuation of the present silver coinage. We have been saved by the most careful management and unusual expedients, by a combination of fortunate conditions, and by a confident expectation that the course of the Government in regard to silver coinage would be speedily changed by the action of Congress.

Prosperity hesitates upon our threshold because of the dangers and uncertainties surrounding this question. Capital timidly shrinks from trade, and investors are unwilling to take the chance of the questionable shape in which their money will be returned to them, while enterprise halts at a risk against which care and sagacious management do not protect.

As a necessary consequence, labor lacks employment and suffering and distress are visited upon a portion of our fellow-citizens especially entitled to the careful consideration of those charged with the duties of legislation. No interest appeals to us so strongly for a safe and stable currency as the vast army of the unemployed.

I recommend the suspension of the compulsory coinage of silver dollars, directed by the law passed in February, 1878.

The Steamboat-Inspection Service on the 30th day of June, 1885, was composed of 140 persons, including officers, clerks, and messengers. The expenses of the service over the receipts were $138,822.22 during the fiscal year. The special inspection of foreign steam vessels, organized under a law passed in 1882, was maintained during the year at an expense of $36,641.63. Since the close of the fiscal year reductions have been made in the force employed which will result in a saving during the current year of $17,000 without affecting the efficiency of the service.

The Supervising Surgeon-General reports that during the fiscal year 41,714 patients have received relief through the Marine-Hospital Service, of whom 12,803 were treated in hospitals and 28,911 at the dispensaries.

Active and effective efforts have been made through the medium of this service to protect the country against an invasion of cholera, which has prevailed in Spain and France, and the smallpox, which recently broke out in Canada.