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THE MESSAGE. President Sends in His Com munication to Gonerresa The THE GOYERXMESrS F0REIG5 POLICY The Points la Ulspoto with Great Britain The Financial Situation Dwelt on at t Length The Bond Imuo Free Sliver Coinage Thought . to Ben Menace to Prosperity. Wabiiisotox, Dec. X The president sent in the following message to con Cress: Foreign Belatlona. The present assemblage of the legislative branch of our government occurs at a time when the Interests of our people and the needs of the country give special prominence to the condition of our foreign relations and the exi gencies of our national finances. The reports of the beads of the several administrative de partments of the Kovernment fully and plainly exhibit what has been accomplished within the scope of their respective duties and pre sent such recommendations for the better ment of our country's condition as patriotic and Intelligent labor and observations suggest. I therefore deem my executive duty ade quately performed at this time by presenting to congress the Important phases of our situa tion as related to our intercourse with foreign nations, and a statement of the financial prob lems which confront ns, omitting, except as they are related to these topics, any reference to departmental operations I earnestly in vite, however, not only the careful considera tion, but the severely critical scrutiny of the congress and my fellow countrymen to the re ports concerning these departmental operations. If justly and fairly exam ined they furnish proof of assiduous and painstaking effort for the public welfare. I press the recommendations they contain up on the respectful attention of those charged with the duty of legislation, because I believe their adoption would promote the people's good. By amendatory legislation in January last, the Argentine Kcpublic. recognising the value of the large market opened to the free impor tations of Its wool under the last tariff act has admitted certain products of the United States to entry at reduced duties. It is pleasing to note that the efforts we have made to enlarge the exchanges of trade on a sound basis of mutual benefit are in this instance appreciated by the country from which our woolen facto ries draw their needful supply of raw material. The missions' boundary dispute between the Argentine Republic and Brazil, referred to the president of the United States as arbitrator during the term of my predecessor and which was submitted to me for determination re sulted In an award In favor of Brazil upon the historical and documentary evidence presented, thus ending a long protracted controversy and again demonstrating the wisdom and desira bility of settling international boundary dis putes by recourse to friendly arbitration. Negotiations are progressing for a revival of the United States and Chilian claims commis sion, whose work was" abruptly terminated last year by the expiration of the stipulated time within which awards could be made. The resumption of specie payments by Chill is a step of Interest and Importance, both in its direct consequences upon her own welfare as evincing the tendency of sound financial prln clples in one of the most Influential of the South American republics. The close of the momentous struggle be' tween China and Japan, while relieving the diplomatic agents of this government from the delicate duty they undertook at request of both countries of rendering such servloe to subjects of either belligerent within the territorial limits of the other as our neutral position permitted developed a domestic condition in the Chinese empire which has caused much anxiety and called for prompt and careful attention. Klther as a result of a weak control by the central government over the provincial ad ministrations, following a diminution of tra ditional government authority under the stress of an overwhelming national disaster. or a manifestation upon good opportunity of the aversion of the Chinese population to all foreign ways and undertakings, there have occurred in widely separated provinces of China serious outbreaks of the old fanatical spirit against foreigners, which, unchecked by the local authorities, if not actually connived at by them, have cul minated In mob attacks on foreign missionary stations, causing much destruction of property and attended with personal injuries as well as loss of life. Although but one American citi zen was reported to have been actually wound' d, and although the destruction of property may have fallen more heavily upon the mis slonarles of other nationalities than our own. it plainly behooved this government to take the most prompt and decided aetlon to guard against similar or perhaps more dreadful ca lamities befalling the hundreds of American mission stations wnicn have grown up throughout the Interior of China under the temperate rule of toleration, custom and im perlal edict The demands of the United States and other powers for the degradation and punishment of the responsible officials of the respective cities and provinces who by neg lect or otherwise had permitted uprising and for the adoption of stern measures by the em peror's government for the protection of the life and property of foreigners, were followed by the disgrace and dismissal of certain pro vincial officials found derelict in duty, and the punishment by death of a number of those ad- Judged guilty of actual participation In the out' rages. This government also insisted that a special American commission should visit the province where the first disturbances occurred for the purpose of investigation. This latter commls sion. formed after much opposition, has gone overland from Tien Tsln, accompanied by a suitable Chinese escort, and by its demonstra tion of the readiness and ability of our govern' ment to protect Its citizens, will act. It is be lleved, as a most influential deterrent of any similar outbreaks. The energetic steps that have thus far been taken are all the more like ly to result in future safety to our citizens in China, because the imperial government is. am persuaded.entirciy convinced that we desire only the liberty and protection of our own citizens and redress for any wrongs they may have suffered, and that we have no ulterior de- signs or objects, political or otherwise. China will not forget either our kindly service to her citizens during her late war, nor the further fact that while furnishing all the facilities at our command to further the negotiation of peace between her and Japan we sought no advantages and interposed no counsel. The governments of both China and Japan have in special dispatches transmitted through their respective diplomatic representatives ex pressed In a most pleasing man ner their grateful appreciation of our assistance to their citizens during the unhappy struggle and ot.the value of our aid in paving the way to their resnmption of peace' lui relations. The customary cordial relations between this country and France have been undis turbed, with the exception that a full explana tlon of the treatment of John I Waller by the expeditionary military authorities of France still remains to be given. Mr. Waller, formerly United States consul at Tamatave, remained In Madagascar artar his term ct office expired, and was apparently successful! in procuring business concessions from the Hovas of greater or less value. Alter tne occupation of Tamative and the declaration of martial law by the French he was arrested upon various charges, tmou them that of communicating military Informa tion to tne enemy or France, was tried and convicted by a military tribunal and sen tencea to twenty years' imprisonment. Fol lowing tne course justified by abundant oree- edent, this government requested from that of France the record of the proceedings of the rtrncn tribunal which resulted In Mr. Wal era condemnation. This request has been comtMtea with to th tint ...!. l copy or the official record. from which appear the constitution ana organization of the court, the charges as for mulated and the general course and result of the trial and by which It Is shown that the ac cused was tried in open court and was defend ed by counsel. But the evidence adduced in support of the charges, which was not received by the French minister of foreign affairs till the first week in October, has thus far been withheld, the French government taking the ground that its production in response to our demand would establish a bad precedent. The efforts of our ambassador to procure it, however, though Impeded by recent changes In the French ministry, have not been relaxed and it is confidently expected that some satisfactory solution o! the matter will be reached. Meanwhile it ap pears that Mr. Wallers' confinement has every alleviation which the state of his health and 11 the other circumstances of the case de mand or permit. In agreeable contrast to the difference above noted respecting a matter of common concern, where nothing la sought ex cept such a mutually satisfactory outcome as the true merits of the case require, is the re cent resolution of the French chambers favor ing the conclusion of a permanent treaty of ar bitration between the two countries. An invitation has been extended by France to the government and people of the United States to participate in the great national ex- position at Paris in 1899-1800 as the suitable commemoration of the close of this, the world's marvelous century of progress. I heartily rec ommend the acceptance, together with such legislation as will adequately provide for a due representation of this government and its peo ple on the occasion. Our relation with the state s of the German empire are In some aspects typical of a con dition of things elsewhere found in a country whose productions and trade are similar to our own The close rivalries of competing in dustries; the influence of the delusive doctrine that the internal development of a nation is promoted and its wealth Increased by a policy which, in under taking to reserve its home markets for the ex- elusive use of its own producers, necessarily obstructs their sales in foreign markets and prevents free access to the products of the world; the desire to retain trade in time-worn ruts, regardless of the Inexorable laws of new needs and changed conditions ef demand and supply, and our own halting tardiness in invlt ing a free exchange cf commodities and by this means imperiling our footing in the external markets naturally open to us, have created a situation somewhat injurious to Ameri can export Interests, not only in Ger many, where they are perhaps most noticeable, but In adjacent countries. The exports affected are largely American cattle and other food products, the reason assigned for unfavorable discrimination being that their consumption Is deleterious to the public health. This is all the more irritating in view of the tact that no European state is as jealous of the excellence and wholesome- ness of Its exported food supplies as the United States, nor so easily able on account of Inherent soundness, to guarantee these qua! ities. Nor are these difficulties confined to our food products designed for exportation. Our great Insurance companies, for example having built up a vast business abroad and invested a large share of their gains in foreign countries in compll ance with the local laws and regulations then existing, now find themselves within narrowing circle of onerous and unforeseen conditions, and are confronted by the necessity of retirement from a field thus made unprofit able, if, indeed, they are not summarily ex pelled, as some of them have lately been from Prussia. It is not to be forgotten that inter national trade cannot be one sided. Its cur rents are alternating and its movements should be honestly reciprocal Our relations with Great Britain, always intimate and Important, have demanded, dur ing the past year, even a greater share of con sideration than is usual. Several vexatious questions were left undetermined by the de cision of the Behrlng sea arbitration tribunal, The application of the principles laid down by that august body has not been followed by the results they were Intended to accomplish. either because the principles themselves lacked in breadth and definiteness or because their execution has been more or less imper fect. Much correspondence has been exchanged between the two governments on the subject of preventing the exterminating slaughter of seals. The insufficiency of the British patrol of the Bearing sea under the regulations agreed on by the two governments has been pointed out, and only two British ship have done police duty during this season in these waters. The need of a more effective enforcement of exist ing regulations, as well as the adoption of such additional regulations as experience has shown to be absolutely necessary to carry out the in tent of the award, have been earnestly urged upon the British government, but thus far ithout effective results. In the mean time the depletion of the seal herds by means of pelagic hunting has so alarmingly progressed that unless their slaughter is at once effectively checked their extinction within a few years seems to be a matter of absolute certainty. The understanding by which the United States was to pay and Great Britain to receive a lump sum of 1425,000 in full settlement of all British claims for damages arising from our seizure of British sealing vessels unauthorized under the award of the Paris tribunal of arbitration was not confirmed by the last congress, which de clined to make the necessary appropriation. am still of the opinion that this arrangement was a judicious and advantageous one for the government, and I earnestly recommend that it be again considered and sanctioned. If, however, this does not meet with the favor of congress, it certainly will hardly dissent from the proposition that the government is bound by every consideration of honor and good faith to provide for the speedy adjustment of these claims by arbitration as the only other alter native. A treaty of arbitration has, therefore, been agreed upon and will be immediately laid before the senate. The completion of the preliminary survey of that Alaskan boundary which follows the con tour of the coast from the southernmost point of Prince of Wales island until it strikes the Mist meridian at or near the summit of Mount St. Ellas awaits further necessary appropria- tion, which is urgently recommended. This survey was undertaken under provisions of the convention entered into by this country and Great Britain July 2J, 1892. and the supple mentary convention of February 3, 1894- As to the remaining section of the Alaskan boundary, which follows the Hist meridian northwardly from Mount St Elias to the frozen ocean the settlement of which involves the physical location of the meridian mentioned, no conventional agreement has yet been made. I call attention to the unsatisfactory deline ation of the respective jurisdictions of the United Stat es and the Dominion of Canada In the great lakes at the approaches to the narrow waters that connect them. The waters in question are frequented by fishermen of both nationalities and their nets are there used. Owing to the uncertainty and ignorance as to the true boundary .vexatious disputes and injurious seizures of boats and nets by Cana dian cruisers often occur, while any positive settlement thereof by an accepted standard is not easy to be reached. It being apparent that the boundary dispute between tireat Britain and the republic of Venezuela, concerning the limits of British Guiana was approaching an acute stage definite statement of the interest and policy of the United Sta tes as regards the controversy seemea to De required, both on its own ac count and in view of its relations with the friendly powers directly concerned. In July last, therefore. a dispatch was ad dressed to our ambassador at London for communication to the British government In which the attitude of the United States was fully and distinctly set forth. The general conclusions there reached and formulated are In substance, that the traditional and estab lished policy of this government is firmly op posed to a forcible increase by any European power of its territorial possessions on this continent: that this policy is as well founded ia principle as it is strongly supported by nu merous precedents: that as a consequence the , L nileutates is bound to rrotet asrainst the en largement of thj area of British Guiana in dero , gation of the rights and ag.tinst the will ol Venezuela, that, eoas&eriag the dWpsrity in fctrengtn of lrcn iirrniH aad Venezuela tn tcrr tortal di-pit: -w!.u tiim cash reaNoiiabU- settle I o ,1,- bt friendly aad Impar ts aio.irjiion aau nut the resort to su?h ar bitration should Include the whole controversy and Is not satisfied If one of the powers con cerned Is permitted to draw an arbitrary line through the territory In debate and to declare that it will submit to arbitration only the por tion lying on one side of it. In view of these con clusions the dispatch in question called upon the British government for a definite answer to the question whether it would or would not submit the territorial controversy between itself and Venezuela in its entirety to impar tial arbitration. The answer of the British government has not yet been received, but is expected shortly. when further communication on the subject will probably be made to the congress. Early in January last an uprising against the government of Hawaii was promptly sup pressed. Martial law was forthwith pro claimed and numerous arrests were made of persons suspected of being in sympathy with the royalist party. Among these were several citizens of the United States, who were either convicted by a military court and sentenced to death or Imprisonment or fine, or were de ported without trial. The United States, while denying protection to such as had taken the Hawaiian oath of allegiance, insisted that martial law. though altering the forms of justice could not supercede justice it self and demanded a stay of execution until the proceedings had been submitted to this government and knowledge obtained there from that our citizens had received fair trial. The death sentences were subsequently com moted or were remitted on condition of leaving the islands. Japan has furnished abundant evidence of her vast gain in every trait and characteristic that constitutes a nation's greatness. We have reason for congratulation in the fact that the government of the United States, by the ex change of treaty stipulations with the new Japan, was the first to recognize her wonderful advancement and to extend to her the consid eration and confidence due to her national en lightenment and progressive character. Cuba is again gravely disturbed, an insurrec tion in some respects more active than the last preceding revolt, which continued from 1868 to 1878, now exists in a large part of the eastern interior of the island, menacing even some pop ulations on the coast Beside deranging the exchanges of the island, of which our country takes the predominant share, this flagrant con dition of hostilities by arousing sentimental sympathy and inciting adventurous support among our people, has entailed earnest effort on the part of this government to enforce obe dience to our neutrality laws and to prevent the territory of the United States from being abused as a vantage ground from which to aid those in arms against Spanish sovereignity. Whatever may be the traditional sympathy of our countrymen as individuals with people who seem to be struggling for larger autonomy and greater freedom, deepened as such sympa thy naturally must be in behalf of our neigh bor, yet the plain duty of their government is to observe in good faith the recognized obli- ' gations of international relationship. The performance of this duty should not be made more difficult by a disregard on the part of our citizens of the obligations growing out of their allegiance to their country, which should re strain them from violating, as individuals, the neutrality which the nation of which they are members is bound to observe in its relations to friendly sovereign states. Though neither the warmth of our people's sympathy with the Cuban insurgents, nor our loss and material damage consequent upon the futile endeavors thus far made to restore peace and order. nor any shock our humane sensibilies may have received from the cruelties which appear to especially characterize this sanguinary and fiercely conducted war, have in the least shak en the determination of the government to honestly fulfill every international obligation, yet, it is earnestly hoped, on all grounds, that the devastation of armed conflict may speedily be stayed and order and quiet restored to the distracted Island, bringing in their train the activity and thrift of peaceful pursuits. v igorous protests against excessive fines im posed on our ships and merchants by the ships. officers of these islands for trivial errors have resulted In the remission of such fines in in stances the equity of the complaint was appar ent, though the vexatious practice has not been wholly discontinued. Occurrences in Turkey have continued to excite concern. The reported massa cres of Christians in Armenia and the de velopment there, and in other districts, of the spirit of fanatic hostility to Christian in fluences naturally excited apprehension for the safety of the devoted men and women, who as dependents of the foreign missionary soci eties in the United States ail reside in Turkey under the guarantee of law and usage and In the legitimate performance of their educa tional and religious mission. No efforts have been spared in their behalf and their protection in person and property has been earnestly and vigorously enforced by every means within our power. The presence of our naval vessels which are now in the vicinity of the disturbed localities affords opportunities to acquire a measure of familiarity with the condition of affairs and will enable us to take suitable steps for the protection of any interests of our countrymen within reach of our ships that might be found imperiled. The Financial Situation. As we turn from a review of our foreign re lations to the contemplation of our national financial situation we are immediately aware that we approach a subject of domestic con cern more important than any other that can engage our attention and one at present in such a perplexing and delicate predicament as to require prompt and wise treatment We may well be encouraged to earnest effort in this direction when we recall the steps already taken toward improving our economic and finan cial situation, and when we appreciate how well the way has been prepared for further progress by an aroused and intelligent popular interest in these subjects. By command of the people, a customs revenue system, designed for the protection and benefit of favored classes at the expense of the great majority of our country men and which, while inefficient for the pur pose of revenue, curtailed our trade relations and impeded our entrance to the markets of the world, has been superceded by a tar iff policy which. in principle is based upon a denial of the right of the government to obstruct the avenues to our people's cheap living or lessen their com fort and contentment, for the sake of accord ing especial advantages to favorites, and which, while encouraging our intercourse and trade with other nations, recognize the fact that American self-reliance, thrift and inge nuity can build up our country's industries and develop lt3 resources more surely than ener vating paternalism. The compulsory purchase and coinage of silver by the government, un checked and unregulated by business condi tions and heedless of our currency needs, wnicn lor more than fifteen years diluted our circulating medium, under mined confidence abroad in our financial ability and at last culminated in distress and panic at home has been recently stopped by the repeal of the laws which forced this reck less scheme upon the country. The things thus accomplished, notwithstanding their extreme importance and beneficent effects. fell far short of curing the monetary evils from which we suffer as a result of long indulgence In ill advised financial expedients. The cur rency denominated United States notes and commonly known as greenbacks was issued in large volume during the late civil war and in tended originally to meet the emergencies of that period. It willbeseea by a reference to the debates In congress at the time laws were passed au thorizing the issue of these notes that their advocates declared they were intended for only temporary use and to meet the emergency of war. In almost, if not all. the laws relating to them some provision was made contemplating their voluntary or compulsory retirement A large quantity of them, however, were kept on foot and mingled with the currency of the country, so that at the close of the year 137-i they amounted to $331,999,073. Immediately after that date and in January. 1373, a law was passed providing for the resumption of specie payment, by which the secretary of the treas ury was required, whenever additional circulation was issued ta national banks to retire United States notes equal in amount to 80 per cent of such additional national bank circulation until such notes were re duced to 139X0 .0. This law further pro vided that on and after ths first diy of Janu ary. 1S79, the Unitei Stites notes then out standing should be redeemed in coin, and la orier to provide and prepare for such re demption the secretary of the treasary was authorized not only to use any surplus reve nues of the goverument. but to issue bonds of the United States and dispose of them for coin and to use the proceeds for the purposes contemp'.ated by the statute. In May. 178, and before the date thus appoint ed for the redemption and retirement of these notes, another statue was passed forbidding their further cancellation and retirement Some of them had, however, been previously redeemed and canceled upon the issue of addi tional national bank circulation, as permitted by the law of 175, so that the amount out standing at the time of the passage of the act forbidding their further retirement ws $36. (1,016. The law of 1873 did not stop at dis tinct prohibition, but contained, in addition, the following provision: "And when any of said notes may be redeemed or be received into the treasury, under any law, from any source whatever, and shall belong to the United States. they shall not be retired, canceled, or destroyed, but they shall be reissued and made out again and kept in circulation. This was the condition of af fairs on the 1st day of January, 179, which had been fixed upon four years before as the date for entering upon the redemption and retire ment of all these notes, and for which such abundant means had been provided. The gov ernment was put in the anomalous situation of owing to the holders of these notes debts pay able in gold on demand, which could neither be retired by receiving such notes in discharge of obligations due the government, nor canceled by actual payment in gold. It was forced to redeem without redumption and to pay without acquittance. There has been issued and sold $9S.5O).O0O of the bonds authorized by the resumption act of 1875, the proceeds of which, together with the gold in the treasury, created a gold fund deemed sufficient to meet the demands which might be made upon it for the redemp tion of the outstanding United States notes. This fund, together with such other gold as might be from time to time in the treasury available for the same purpose, has been since called our gold reserve and I100.OOJ.000 has been regarded as an adequate amount to ac complish its object This fund amounted on the 1st day of January. 1879, to $114,190,138 and though thereafter constantly fluctuating, it did not fall below that sum in July, 1892. In April. 18y3, for the first time since its estab lishment, this reserve amounted to less than 1100.000,000, containing at that date only $97, 011,330. In the meantime and in July, 1890, an act had been passed directing large govern mental monthly purchases of silver than had been required under previous laws and provid ing that in payment for silver treasury notes of the United States should be issued payable on demand in gold or silver coin at the discre tion of the secretary of the treasury, it was, however, declared in the act to be the estab lished policy of the United States to maintain the two metals on a parity with each other upon the present legal ratio, or such ratio as may be provided by law. In view of this declaration it was not deemed permissible for the secretary of the treasury to exercise the discretion in terms conferred on him by refusing to pay gold on these notes when demanded, because by such discrimina tion in favor of the gold dollar, the so-called parity of the two metals would be destroyed and grave and dangerous consequences would be precipitated by affirming or accentuating the constantly widening disparity between their actual value under the existing ratio. These obligations are the instruments which ever since we have had a gold reserve, have been used to deplete it. This reserve, as has been stated, had fallen in April. 1H93, to $97,011,331 It has from that time to the present, with very few and im portant movements, steadily decreased, except as it has been temporarily replenished by the sale of bonds. Among the causes for this con stant and uniform shrinkage in this fund may be mentioned the falling off of exports under the operation of the tariff law until recently in force, which crippled our exchange of com modities with foreign nations and necessitated to some extent the payment of our balances in gold the unnatural infusion of silver into our currency and the increase in agitation for its free and unlimited coinage which have created apprehension as to our dis position or ability to continue gold payments, the consequent hoarding of gold at home and the stoppage of investments of foreign capital as well as the return of our securities already sold abroad and the high rate of foreign ex change, which induce the shipment of our gold to be drawn against us as a matter of specula tion. In consequence of these conditions the gold reserve on the 1st day of February, 1894, was reduced to $65,438,377, having lost more than f31.0OJ.OJO during the preceding nine months, or since April, 1891 Its replenishment being necessary and no other manner of ac complishing it being possible, resort was had to the issue and sale of bonds pro vided for by the resumption act of 1875. Fifty millions of these bonds were sold, yield ing 153,633,295.71, which was added to the re serve fund of gold then on hand. As a result of this operation this reserve, which had suf' fered constant and large withdrawals in the meantime, stood on the 6th day of March, 1894, at the sum of tl07.446.89J. Its depletion was, however. Immediately thereafter so accelerated that on the 3Jth day of June, 1891, it had fallen to S64.873.025. thus losing by withdrawals more than $42.iOO,0OO in five months and dropping slightly below this situation when the sale of $.10,000,000 in bonds was effected for its redemp tion. This depressed condition grew worse, and on the 20th day of November, 1894, our gold reserve was drained to . $7,069.0l. It became necessary to again strengthen it. This was done by another sale of bonds amounting to $50,000,000, from which there wa9 realized $58,538,500 with which the fund was in creased to $111,012,021 on the 4th day of De cember. 1891. Again disappointment awaited the anxious hope for relief. There was not even a lull in the exasperating withdrawals of gold. On the contrary, they grew larger and more persistent than ever. Between the 4th day of December, 1894. and early in February, 1895, a period of scarcely more than two months after the second reinforcement of our gold reserve by the sale of bonds it had lost bv such withdrawals more than $69,000,000, and had fallen to $41.03),181. Nearly $43,000,00 had been witdrawn within the month immediately preceding this situation. In this emergency, and in view of its sur rounding perplexity, it became entirely appar ent to those upon whom the struggle for safety was devolved not only that our gold reserve must, for the third time in less than thirteen months, be restored by another issue and sale of bonds, bearing a rate of interest and badly suited to their purpose, but that a plan must be adopted for their disposition promising bet ter results than realized on the previous sales. An agreement, tnerefore. was made with a number of financiers and bankers whereby it was stipulated that bonds de scribed in the resumption act of 1875 payable in coin thirty years after their date. bearing interest at the rate of 4 per cent per annum and amounting to about $62,000,000, should be exchanged for gold, receivable by weight, amounting to a little more than $65, ooo.oou. its good result could not be perma nent Recent withdrawals have reduced the reserve from 1107,571. -230 on the 6th day of July 1895, to $79,338,966 On the 2Sth of January. I83", it was reported by the secretary of the treasury that more than 4172.000.000 of the gold had been with drawn for hoarding or shipment during th year preceding. He now reports that from January 1. 179, to July 11. 18SO. a period of more than eleven years, only a little over $28, 000,0i)0 was withdrawn, and that between July 14. 1893, the date of the passage of the law for an Increased purchase of silver, and the 1st day of December, !&", or within less than fiva and a half years, there was withdrawn nearly $375.tfX'.e-. making a total of more than 1413, 000,000 drawn from the treasury gold since January 1. 1879, the nate fixed in 1875 for the retirement of the United State notes. Nearly $327.0OJ.000 of the gold thus withdrawn has been paid out on these United States notes, and yet every one of the $46,000,000 is still un canceled aad ready to do service in future goia aepietions. in other words, the govern ment has paid in gold more than nine-tenths of Its United States notes and stiil owes them ail It has paid in gold about one-half of its notes given for silver purchases without ex tinguishing by such payment II of these notes. And added to all this we are reminded that to carry out this astounding financial system th government has incurred a bonded tndebl?I- ness of i95.5OJ.0iU in establishing a gold reser.e and of $162,315.40) in efforts to maintain it I am convinced the ouly thorough aad prac ticable remedy for our troubles is found in the retirement and cancellation of our United States notes, commonly called greenbacks and the outstanding treasury notes issued by the government in payn-ent of sliver purchased under the act of lsW- The currency withdrawn by the retirement of the United States notes and treasury notes. amounting to probably less than $6.AO.0.v, might be supplied by such gold as would be used ou their retirement or by an increase in the circulation of our national banks. Though the aggregate capital of these now in existence amounts to more than r,w.iw, their out standing circulation based on bond security amounts to only about fisM.OOO.OOO. I think they ought to be allowed to issue cir culation equal to the par value of the bond. they deposit to secure it. and that the tax on their circulation should be reduced to l of 1 per cent, which would undoubtedly meet all the expenses the government incurs on their ac count I do not overlook the fact that the can cellation of the treasury notes issued undrt the siiver purchasing act of is) would leave the treasury in the actual ownership of suffi cient silver, including seigniorage to coir nearly $178,000,000 in standard dollars. It is orthy of consideration whether this might not from time to time, be converted into dol lars or fractional coin and slowly put into cir culation. In the present stie of our difn-ultv it is not easy to understand how the amount of our revenue receipts directly affects it The im portant question is not the quantity of money received in revenue payments, but the kind of money we maintain and our ability to contir.ue in sound financial conditions. We are consid ering the government holding of gold as re lated to the sounduess of our money and as af fecting our national credit and monetary strength. If our gold reserve bad never been Impaired; if no bonds had been issued to re plenish: if there had been no fear and timidity concerning our ability to continue gold payment; if any part of our revenues were now paid in gold; and if we could look to our gold receipts as a means of maintaining a safe reserve, the amount of our revenues would be an influen tial factor in the problem. Hut unfortunately all the circumstances that might lend weight to this consideration are entirely lacking. In our present predicament no gold is received by the government in payment of revenue charges, nor would there be if the revenues were in creased. The receipts of the treasury when not in silver certiticaUs consist of United States notes and treasury notes, issued for sil ver purchases. These forms of money are only useful to the government in paying its cur rent ordinary expenses and its quantity in government possession does not in the least contribute toward giving us the kind of safe financial standing or condition which is built on gold alone. If it is said that these notes if held by the government can be used to obtain gold for our reserve, the answer is easy. The people draw gold from the treas ury on demand upon United States notes, but the proposition that the treasury can on de mand draw gold from the people upon them would be regarded in these days with wonder and amusement. And even if this could be done, there is nothing to prevent those thus rarting with their gold from regaining it by the next day or the next hour by the presenta tion of the notes theyreeeived.iu exchange for it The secretary of the treasury might, usj such notes taken from a surplus revenue to buy gold in the market Of course he could not do this without paving a premium. Private hold ers of gold, unlike the government, having no parity to maintain, would not be restrained from making the best bargain possible when they furnished cold to the treasury: but the moment the secretary of the treasury bought gold on any terms above par he would estab lish a general and universal premium upon it. thus breaking down the parity between gold and silver which the government is pledged to maintain, and opening the way to new and serious complications. In the meantime the premium would not re main stationary and the absurd spectacle might be presented of an alien selling gold to the government, and with United States notes In hU hands Immediately clamoring for its re turn and a resale at iv higher premium. It may be claimed that a large revenue and re duced receipts might favorably uffuct the situ ation under discussion by affording un oppor tunity affecting these notes in the troatftrtfy when received, and thus preventing their pre sentation for gold. Such retention of the metal ought to bo at least measurably permanent, and this Is pre cisely what is prohibited so far ns United States notes are concerned. By the law of 1878, forbidding their future retirement, that statute in so many words provides thit these notes when received into the treasury and belonging to the United States shall be "paid out again and kept in circulation." It will moreover be readily seen that the government could not refuse to pay out United States notes and treasury notes in current transactions when demanded and in sist on paying out stiver alone and still maintain the parity between that metal and the currency representing gold. Hesldes the accumul .tion in the treasury of currenoy of any kind exacted from the people through tax ation Is justly regarded as an evil and It can not proceed far without vigorous protest against an unjustifiable retention of money from the business of the country and a de nunciation of a scheme of taxation which proves itself to be unjust when it takes from the earnings and income of the citizen money so much in excess of the needs of government support that large sums can be gathered and kept In the treasury. Such a condition was a peril in time of surplus revenue and led the gov ernment to restore currency to the people by the purchase of its unmatured bonds at a large premium and by a large increase of its depos its in national banks, and we easily remember that the abuse of treasury accumulation has furnished a most persuasive argument in favor of legislation radically reducing our tariff tax ation. pernaps it is supposed that sufficient rev enue receipts would in a sentimental way im prove the situation by inspiring confidence in our solvency and allaying the fear of pecuniary exhaustion. And yet all through our struggles to maintain our gold reserve there never has been any apprehension as to our ready ability to pay our way with such money as we had and the question whether or not our current re ceipts met our current expenses has not en tered into the estimate of our solvency. Of course the general state of our funds exclusive of gold was entirely immaterial to the foreign creditor and investor. His debt could only te paid in gold and his only concern was our abil ity to keep on hand that kind of money. Inasmuch as the withdrawal of our gold has resulted largely from fright, there i nothing apparent that wiil prevent its continuance or recurrence, with its natural consequences, ex cept such a change in our financial methods as will reassure the frightenei and make the de sire for gold less intense. It is not clear how an increase in revenue, unless it be In gold, can be satisfactory to those whose only anxiety is to gain gold from the government's store. It can not, therefore, be safe to rely upon increased revenues as a cure for our present troubles. Although the law compelling an increased purchase cf silver by the government was passed on the I4th day of July, Kit), withdraw als of gold from the treasury upon the notes given in payment on such purchase jJd not be gin until October. l?9l. Immediately following that date the withdrawals upon both these notes aad United States cote increased very largely, and have continue! to such an extent that since the passage of that law there has been more than thirteen times as much gold taken out of the treasurr upon Unitei States notes and treasury notes issued for silver pur chases as was withdrawn during the eleven and half years immediately prior thereto, and after the first day of January, s,&. when spe cie payment were resume! I have constantly had in mind the fact that many of my countrymen, whose sincerity I do not dubt. insist that the cure for the ills now threatening us may be found in the single and simple remedy of the free coin-? of sil ver. They contend that our mints shall be at once thrown op?n to th? free and unlimited and independent coinage of bith go;d and sil ver dollar of full legal teniex quality, regard ess of the action of any other government and in fail view of th; fact that the ratio between the metals which they suggest calls for m cents' worth of gold in the gold dollar at the present standard and only 50 cents in in triad worth of silver iu the silver dolls-. Were there infinitely stronger reasons that can be adduced for hoping that such actio, would secure for us a bimetallic currency mo, ing on lines of parity, an experiment so nova and hazardous as that proposed might weH stagger those who believe that stability Is as imperative condition of sound money. K government, no human contrivance or act of legislation has ever been able to hold Iht two metals together in free coinage at a ratio nppieciably different from that which is established in the markets of the worn Those who believe that our independent free ' coinage of silver at an artificial ratio with go!4 of 16 to 1 would restore the paritv between, ths ? metals and consequently between the coin op. lHse an unsupported aud improbable theory ' to the belief and practice of other nations sad the teachings of the wisest statesmen and economists of the world, both in the past and ' present, aad what is far more conclusive the) run counter to our own actual experiences, T ice iu our earlier history our law makers la attempting to establish a bimetallic currency undertook free coinage upon a ratio which ac cidentally varies from the actual rela. tive value of the two metals not more that 3 per cent, in both cases, notwithstanding 1 great difficult U-s nnd cost of transportatloa ; than now exist the coins whose intrinsic worth ' were undervalued in the ratio gradually and surely disappeared from our circulation sod -! went to other countries where their real value : was better recognized. Acts of congress were Impotent to create equality where natural causes decreed even a slight inequality. Twice in our recent history we have signally failed to ; raise by legislation the value of silver. Under an act of congress in ISTS the government was required for more than eleven years to extend -annually at least J.'e.lW.OOO in the purchase It silver bullion for coinage. .. The act of July 14. 189J, in a still bolder ef fort increased the amount of silver the gor- f eminent was compelled to purchase and forced it to become the buyer annually of 54 ,000,009 : ounces, or practically the entire product of our ! mines. Under both laws silver rapidly and ' steadily declined in value. The prophecy and the expressed hope and expectation of those : in the congress, w ho led in the passage of ths last mentioned act that it would re-establish and maintain the former parity between ths -two metals are still fresh in our memory. In the light of these experiences, which ac cord with the experience of other nations, there is certainly no secure ground for the be lief that an act of congress could now bridge ' an inequality of 50 per cent between gold and siiver at our present ratio, nor is there the least possibility that our country, which has less than one-seventh of the silver money in the world, could by its action alone raise not only our own but all sliver, to its lost ratio -with gold. Our attempt to accomplish this by : the free coinage of silver at a ratio differing from the actual relative value would be the signal for a complete departure of gold from our circulating, the immediate and large con- traction of our circulation medium and shrink age in the real value and monetary efficiency of all other forms of currency as they settled , to the level of silver monometallism. In u self-invited struggle through darkness and uncertainty our humiliation would be In creased by the consciousness that we had parted company with all the enlightened and progressive nations of the world, and wers desperately and hopelessly striving to meet the stress of modern commerce and competi tion with a debased and unsuitable currency,' and In association with the few weak and lag gard nations which have silver alone as their ' standard of value. All history warns us against rash experiments which threaten violent changes In our monetary standard and degradation of our currency. The past is full of lessons, teaching not only tli j economic dangers, but the national immor-, ality that follows In the train of such experi ment. I will not believe that tho .America people can be persuaded, after sober delibera tion, to jeopardize their nation's presttae and proud standing by encouraging financial bom trums, nor that they will yield to the false tl luretnents of cheap money, when they reslU that it must result in the weakening of thst financial integrity and rectitude which thus far in our history has been so devotedly cher ished as one of the traits of true Americanism. Our couulry's indebtedness, whether owing by tho government or existing between Indi viduals, has been contracted with reference to l our present standard. To dtcree by act of eon tress that these debts shall lie nuvuhln In Imc valuable dollars than those within the eon- temptation and intention of the parties when -' contracted, would operate to transfer, bv the fiat of law and without compensation, an amount of property and a volume of rights and interests almost incalculable. Those who ad vocate a blind and headlong plunge to Im ' coinage in the name of bimetallism and pro- , fessing the belief, contrary to nil st ' perience, that we could thus estab lish u double standard and ftf concurrent circulation of both metals In oat coinage are certainly reckoning from a cloudy standpoint. Our present standard of value It V: the standard of the civilized world and per f mits the only bimetallism now possible or e$ S least that within the independent reach of any single nation, however powerful that nation may be. While the value of gold as a standard Is steadied by almost universal commercial and business usage, it docs not despise silver nor seek its banishment Wherever this standard -is maintained there Is at its side in free and unquestioned circulation a volume of silver ' currency sometimes equaling and sometimes even exceeding it in amount, both maintained at a parity notwithstanding a depreciation or fluctuation in the intrinsic value of silver. There is a vast difference between a stand' ard of value and a currency for monetary use, The standard must necessarily be fixed ant certain. The currency may be in diverse forms and if various kinds. No sliver standard country has a gold currency in circulation, but an enlightened and wise system of finance se cures the benefits of both gold and silver at currency and circulating medium by keeping the standard stable and all other currency par with it Such a system and such a stands ard also gives free scope for the use antsex pauKion of a safe and conservative credH o indispensable to broad and growiajv commercial transactions and so wel substituted for the actual use of money. If a fixed and staple standard is maintain, such as the magnitude of safety of our cos mercial transactions and business require the use of money itself ts conveniently miulmUed. Every dollar of fixed and stable value has : brought the agency of confident credit In as tonishing capacity of multiplying itself hi financial work. Every unstable and Suctoat ing dollar falls as a basis of credit and its est begets gambling speculation and undermine! the foundations of honest enterprise. I hsve ventured to express myself on these subjects with earnestness and plainness of speech bs- i cause I cannot rid myself of the belief that there lurks in the proposition for the free coin age of silver so strongly approved and so en thusiastically advocated by a multitass of my countrymen a serious menace to OST . prosperity and an insidious temptation of ml ; people to wander from the allegiance they to public and private Integrity. It is becansf I do not distrust the good faith and sincerity , of those who press this scheme that I have t ,-. perfectly but with zeal submitted my though upon this momentous subject I cannot W: " fraln fr-am begging them to re-examine then: views and beliefs in the light of patriots reason and familiar experience, and to weis again and again the consequences of such UV: -islation as their efforts have invited. Ee the continued agitation of the subject ao greatiy to the difficulties of a danger ous financial situation already forced upon -la conclasion I especially entreat the peoB" represectatives in the congress who charged with the responsibility of inaugurat ing measures for the safety and prosperity, our common country to promptly and efle ively consider the ills of our critical flnsadet plight I have suggested a remedy which judgment approves. I desire, however, to sure the congress that I am prepared toe"; operate with them in perfecting any gttef- measure promising thorough aad practical . lief and that I wiil gladly labor with the every patriotic endeavor to further the intereew, and guard the welfare of our country i, whom in our rsrftivi n iA dm have undertaken to serve. GBOTBTt CtXXA Executive Mansion, Washington, Dec, t,