OCR Interpretation


St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, December 05, 1894, Image 5

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CARLISLE EXPLAINS.
The Secretary Gives Details
of the Plan for Mone
tary Reform.
a:j elastic currency
Modeled After the Ideas Set
Forth in the Baltimore
Plan Favored.
rLANS FOR STATE BANKS.
A Word for Free Coal and
Iron—Secretary's An
nual Report.
Washington-, Dec. 4.—The annual
report of the secretary id the treasury
mi the state of the finances was sent to
congress today, It shows that the rev
enues of the government from all
-sources lor the fiscal year ended June
30. 1894, were $372,802,498, and the ex
penditures $445,005,758, which shows a
delicti of $69,803 ,26 >. As compared with
the fiscal year 1893, the receipts
foi iS94fe!lofi fSS.yi4.ofs.*>. During the
year there was a decrease of £15,952,674
in the ordinary expenditures of the gov
ernment i he revenues for the current
fiscal year are thus estimated upon the
basis of existing iaws cents omitted):
From customs. $160,000,000; from in
ternal revenue. $165,000,000; from mis
cellaneous sources, $15,000,000; from
postal service, $81,427,748. Total esti
mated revenues $424,42..748.
The expenditures tor the same period
are estimated as follows: For the civil
establishment, $91,250,000; for the mili
tary establishment, $53,250,000: for the
naval establishment. $32,500,000; for the
Indian sen ice, $11,500,000; for pensions,
*?llo.ihiO,o'i(i; for interest on the public
debt, f:u,(XX»,{XK): for postal service, >54.
--427,748; total estimated expenditures,
1444.427,748, or a deficit of $20,000,000.
li is estimated that upon the basis of
existing laws Cue revenues ot the irov -
eminent for the fiscal year lS'.-G will he:
From customs 1185,000,006
From internal ierenue 10 i.i 00,000
From n.isceilaneous sources !.\i-'i".Uo.i
From postal service . ■•'.',!* -7,407
T<-tfil estimated revenues ... $476,907,40'!
On the snbjectof customs administra
tion the secretary says there is. in his
opinion, L*re.,t necessity for a reorgan
ization of the customs districts through
out the country by reason of the .'act
thai there are off many ports of entry at
which little or no business is tram-acted.
These should be abolished and the dis
tricts consolidated, and, in his opinion.
this could be accomplished without im
pahing the, means necessary to protect
the revenue agaiust smugglers and
without withdrawing proper facilities
for documenting vessels.
The appropriations heretofore made
annually for the enforcement of the
< hia**MN»e lixclii'sioM Law*
are declared to ue inadequate for the
purpose. 'lhe expense involved in in
vestigating cases where Chinese un
lawfully enter the Lulled Slates, in the
trial of those arrested and the deporta
tion of tho-ie convicted, including their
tiausportaliou to the Pacific coast, is
very large] and the appropriation re
ferred to should, in Hie judgment of the
secretary, be not less than $100,000 per
annum: The pending treaty between
China and the United States, under
whicii laborers residing here may, un
der conditions, leave this country and
return thereto, will necessitate the ex
ercise of greater vigilance and a conse
quent mere**.' in expense.
The department Is in possession of
reports indicating a marked decrease in
the number of seals on the PribyloS
island?, and in consequence the number
permitted to be taken this year was
limited to IG.COO, and for the ensuing
year the number, will -have to be still
further reduced. Concurrently with
this frilling if on the islands there has
been for some years a great increase in
the number of seals killed at sea. While
the official returns cannot yet. be stated,
it is known that the total catch in the
North Pacific and Dehrlng sea for the
season just expired is by far tho largest
ever known in the history of pelagic
sealing. The decrease in the seals on
the Pribyloff islands, coupled with
the large number of tiie dead
pups found on the islands durin-r
the last season where mothers Die
sumably were killed at sea "and
the further phenomenal increase in pe
lagic catch justifies the belief that be
fore tne expiration of live years when
the regulations enacted by "the tribunal
of ai bit ration are to be submitted to our
government and that of Great Britain
for a new examination to consider pos
sible modifications in the light of past
experience—the fur sea! will have been
practically exterminated. The most
important feature of Mr. Carlisle's re
port is his discussion of the subiectof
Cnrreney Reform,
in the course of which the administra
tion's plans %of a new system of cur
rency are set forth in detail. Mr. Car
lisle says: "On the first day of July last
the total cash in the treasury, exclud
ing current liabilities, but including a
gold reserve of $64,873,024, was
$110.026,221; and on the ' first day
ot November the total cash ex
cluding current liabilities, but includ
ing $01.301, in gold was $106,992,734,
showing a decrease of $9,633,487. The
excess of expenditures over receipts
during the last fiscal year wass69.803,-
--260, and during lhe first live months of
the present fiscal year, $*21,737,367.92. It
is not believed, however, that this dif
ference between the receipts and ex
penditures will continue in the same
proportion until the close of the year,
aud accordingly I have estimated a de
ficiency of $20,0*10,000 at that time. Ow
ing to the large importation of raw
smear in anticipation of the passage of
the tariff act of Aug. 20, 1894. the duties
collected upon that article up to Dec.
1 amounted to only $3,022,000, and
<>; course nothing has yet been realized
from the tax ou incomes', as its payment
cannot lie legally enforced until after
.July 1. 1895. But there is reason to be
lieve that the importations of sugar
must be resumed at an early date ami
continued upon a scale which will yield
a large revenue from that source dur
ing tne remainder of the year; and it is
Awarded
Highest Honors—World's Fair.
'©UP
-1 MOST PERFECT MADE.
A pure Grape Cream of Tartar Powder. Free
from Ammonia, Alum or any other adulterant.
alO YEARS THE STANDARD.
probable, also, that on account of the
penalties which may bo incurred for
non-payment within ten days after July
1. a considerable part of the income tax
will be realized in time to be available.
lily opinion is that the laws now in
force will yield an ample revenue for
the fiscal year 1896, as all their pro
visions will then be operative, and the
prospective Improvement in the busi
ness* of the country, if realized, will
greatly increase the resources from
whicii taxes aie collected, and. accord
ingly, a surplus of $28,814,9-20 is esti
mated for that year.
in mi last annual report 1 called at
tention to the unsatisfactory condition
of our
Financial Legislation,
especially to the issue ami redemption
of circulating notes by the government
and the inability of the secretary of the
treasury under existing laws to make
prompt and adequate provision for the
support of the public credit. The ex
perience of the past year has confirmed
and strengthened the opinions then ex
pressed, and 1 therefore respectfully
but most earnestly urge upon congress
the necessity for remedial legislation
during its present session. The well
known defects in our financial system
and the serious nature ot the' evils
threatened by them have done more
inning the last two years to impair the
credit of the government and the people
of the United States at home and
abroad, and to check our Industrial and
commercial progress, than all other
things ceoiuiued, and our first and
plainest duty Is to provide, if possible,
seme effective method for the perma
nent relief of the country from the con
sequences of the present unwise policy.
A brief statement of the practical and
unavoidable results ot the existing leg
islation will demonstrate its injurious
effects on our financial affairs more
clearly than any argument that could
be submitted."
The secretary then reviews the cir
cumstances leading up to the first $50,
--000,000
line ol' Bonds*
as a means of replenishing the gold re
serve yielding 158,660,917, and Increas
ing the free goid in the treasury to $107.
--440,802. Tho lowest point reached by
the reserve since the resumption of
specie payments was on the 7th day of
August. 1894, when by reason of with
drawals, in the redemption of noes ii
was reduced to $52,189,500. After mat
date it was slowly replenished by vol
untary exchanges of gold coin for
United States notes by the banks and
by small receipts of gold in the payment
of dues to the government until the 14t!i
of November. 1894, when it reached the
sum of 161,878,354.
In the meantime, however, the fre
quent presentation of notes for redemp
tion in gold by individuals and institu
tions not desiring it for export clearly
indicated the existence of a feeling of
uneasiness in the public mind, while
foreign exchange was almost constantly
at, or near, a rate which made it more
profitable to export gold than to pur
chase Dills, and consequently withdraw
als tor shipment were daily threatened.
lv addition to these causes of anxiety,
the vast accumulation of money at our
liuaucial centers and the genera! de
pression in business which prevailed in
this country had so reduced the rates of
discount that the inducement to keep
tun is abroad, where better investments
couid be made, were much greater than
in ordinary times; and this, togeth r
with the other facts stated, mam- it
highly imprudent to neglect auy pre
caution which appeared necessary to
insure the safety of our financial posi
tion.
Therefore the second issue of fifty
millions was decided upon. For this
issue, proposals for which were issued
last month, 480 bids were received,
amounting to 850,050, nearly all of
which were at rates whicii would yield
to the investor 3 per cent or less. "One
bid for the whole sum of £50,000.000
upon the basis of 2.372 per cent, and
being the most advantageous offer to
the government that was made, either
singly or by aggregating the bids, was
accepted, and the proceeds of the sale,
$58,533,500, have nearly all been paid
into the treasury according to the let ins
of the sale.
The transaction justifies the opinion
that a-.".j percent bond, having a rea
sonable time to run, could probably
have been sold at par, and certainly
that a 3 per cent bond could have been
disposed at or above that rate. As the
Authority to E«mm
and sell bonds already exists, and the
present state of our financial legislation
compels its occasional exercise. I repeat
the recommendation made in my last
annual report that, In the interest of
the government and people, power bo
conferred upon the secretary of the
treasury to negotiate loans at a lower
rate of interest aud for a shorter time
than are now allowed. The existence
of such authority instead of increasing
the probabilities of a frequent re
couise to that means of raising money,
would have the contrary effect, because
when it is known that the secretary of
the treasury is clothed with ample
power and facilities to procure means
for the maintenance of the reserve,
public confidence in the ability of the
government to meet promptly all de
mands upon it will be much stronger
than.under present circumstances. Be
sides the policy of limiting the govern
ment to the sale of an antiquated . bond,
bearing a rate of interest inconsistent
with the existing state of the public
credit, aud having a longer time to run
than is apparently necessary at the dale
of its issue cannot be justified upon
any grounds of expediency or principle.
The law should be so amended as to
conform to the conditions and require
ments of the nubile credit and service
at the present time, and I eamestlv
hope that congress will take early and
favorable action upon this subject.
As* to Silver Coinage.
So long as there are in circulation
under the authority of the government
two coins unequal in value, but equal
in legal tender qualities, every consid
eration of good faith and sound policy
requires the prompt redemption or the
notes on presentation In the kind of
coin demanded by the bolder, and the
constant observance of such adminis
trative methods as may be necessary to
preserve the purchasing power of the
less valuable metal. This is essential
to the continued circulation of our
standard silver dollars and their paper
representatives at par, and to abandon
the policy without substituting a better
one in its place would not only tail Vj
cure many of the evils now existing, but
would entail upon the peoplo of the
country additional and greater ones.
This situation is the necessary result of
three features of our currency legisla
tion, and it cannot be permanently
avoided, or even temporarily improved",
without material changes in our laws
relating to that subject. These features
are:
1. The circulation of United States
notes as currency and current redemp
tion in coin on demand.
2. The compulsory reissue of such
notes alter redemption.
'6. The excessive accumulation and
coinage of silver and the issue of notes
and certificates against it upon a ratio
winch greatly overvalues that metal as
compared with the standard unit of
value in this and the other principal
commercial countries.
Frequent l.sncs of Bond .-<
for the purpose of procuring gold,
which cannot be kept alter it has been
obtained, will certainly cause increased
distrust among our own people, as well
as among the people of other countries,
and not only swell the volume of our
own securities returning from abroad
for sale or redemption, but increase the
withdrawal of foreign capital hereto
fore invested iv our domestic enter
irises.
Ordinarily, when there is no distrust
of our currency, or other discouraging
influence, a considerable part of the me
rest and dividends earned by foreign
capital in this country is annually or
semi-annually reinvested, and this, to
gether with the fact that under normal
conditions the balance of trade is in our
favor, enables our people to meet their
obligations abroad without reducing
their stock of money at home. But
when distrust arises, either as to our
ability to pay. or as to the value of the j
money with which we intend to pay, the
THE SAINT PAUL DAILY GLOBE WEDNESDAY-'kORNISTG., DECEMBER 5, mi.
foreign capitalist not only ceases to re
invest, but proceeds to withdraw all his
money by disposing of his American se
curities in order to protect capital
against threatened depreciation. There
\ are but two ways in which this with
drawal can bo effected; one is for our
| people to export and sell their com
modities in foreign markets to a suffi-
I cient amount to create a balance of
credit in their favor equal to the amount
. to be withdrawn, and the other is to
l ship gold, that being the only money
j recognized iv the settlement of interna
tional balances.
But, independently of these consider
ations, our own people have a clear
right to demand a sound and stable
curie, cy for use in the transaction of
their business at home, while their
purely commercial relations with the
people of other countries, upon whom
the producers of exportable commodi
ties are compelled to rely for the con
sumption of their surplus, cannot be
profitably maintained unless they are
always in a condition to pay for what
they buy in as good money as they re
ceive for what they sell. We cannot,
therefore, preserve our trade relations
with best customers for our surplus
I products unless we maintain a mone
j tary system substantially in accordance
I with theirs, and until they manifest a
i disposition to co-operate with us in of
j feeling a change upon terms just ami
fair to all our interests, we ought to
continue our
Adhesion to the ..old .Standard
of value, with as large a use of silver as
is consistent with the strict maintenance
of that policy.
Since the resumption of specie pay
ments on the first day of January, 1879,
United States legal lender notes and
treasury notes issued under the act of
July 14. lS'.k), have been redeemed in
gold to the amount of •?-.60,000,000, and
all the notes so redeemed Have been re
issued and are now outstanding. They
are a constant menace to the gold re-
I serve.and no scheme of financial reform
can bo complete or effectual which does
not provide at least for their gradual
elimination from our currency system.
To continue their redemption and re
issue under the present conditions en
dangers the entire volume of our cur
rency, discredits the obligation of gov
! eminent and people, increases the pub
lic debt and seriously embar
rasses the administration of our
j financial affairs. While no prop-
I osition should be entertained that will
j have a tendency to degrade the cur
! rency, or in any degree impair public
j confidence in lit safety, I am convinced
I that the interests of the country require
j such changes in our legislation as will
I discharge the government entirely from
the business of issuing or reissuing cir
culating notes, and thus relieve its fis
cal department of the periodical de
mands upon its resources, which, under
the existing system, must continue to
disturb the financial and general busi
ness affairs of the people.
lt is not the capitalist alone whose
interests are affected by the use or
threatened use of a depreciated aud
iluetuating currency and the cms-.- I
quent derangement and diminution I
of business. A paralysis of busi
ness, whatever may be its cause.
i strikes first the wage earner, then
I tee man of moderate means, and
j lastly the capitalist who has accumula
! ted a surplus store of goods or money.
1 Arbitrary regulation of tile volume of
i circulation to be kept outstanding is
j wholly inconsistent with the mainte
nance of a healthy financial condition,
i and is the exercise of a function which
| does not properly belong to the govern
j meat of lhe United States or any other j
' public authority. Its effect is to force j
paper currency upon the people when j
j it is not needed, and deprive them of it j
i when it is needed, thus establishing and I
I maintaining an improper and unwar- i
! ranted connection between the govern-*
i incut and the private business affairs of
; its citizens, ami making their success
i ful prosecution largely dependent upon
j the judgment or caprice of a superior
1 authority having no interest in the
I transactions, except, perhaps, a parti
-1 san interest not in harmony with sound
fiscal arrangements.
Under our present currency system,
Iso far as it consists of notes issued by
the Uuited States government, the I
volume of circulation was intended to
j be, and is in fact unchangeable, it is
I unalterably fixed at a certain amount,
and no matter how great the emergency |
may be, it can be neither enlarged nor |
diminished. The ouly part of the cur
rency possessing in any degree the
Quality oi' Elasticity
is that issued by the national banking |
associations, and it is now generally j
conceded, i believe, that in this particu- j
lar at least ii has failed to meet the re- :
! quirements of the situation at some of
j tiie most critical periods in business
1 affairs of the country. Its failure is
! creditable in my opinion to these i
principal causes: First, to the
large volume of United States
currency of various kinds kept con-I
stantly outstanding, making the con- !
traction or expansion of the compara- ■
tively small national bank circulation i
less effective than it would otherwise j
be; secondly, the difficulty and
delay in procuring and to some extent I
in retiring circulation; thirdly, and
mainly, the provisions of the law which j
requires the deposit or" United States J
bonds to secure circulation and restrict
the issue of notes to 90 per cent of the
par value of the bonds. With $900,000,000
j in United States bonds, treasury notes
of 1890, silver certificates and gold cer
tificates, besides about $625,000,000 in
i gold and silver coins constantly out
i standing, none of which can be lawfully
j retired by the government with
j out substituting of other cur-
I rency in its place, the national
bank notes, which amount to only
'7,500,000. or about 12 per cent of the
whole, cannot exert a very effective in
fluence on the volume of outstanding
currency at any time, and especially
at times when large contractions or ex
pansions are most needed. But the
greatest difficulties are encountered,and
the national banking system as now or.
ganized is least effective, when the busi
ness of the country demands quick ex
pansions of the currency lo meet sudden
emergencies.
In addition to existing obstructions to
the prompt increase and decrease of cir
culation, the ninth section of the act of
July 12, 1882, which provides for Hie ex
tension of the corporate existence, of .
national banks, expressly prohibits
j them from retiring their notes
Ito a greater amount than $3,
--000,000 iv the aggregate per
month and advocates that no bank
which made a deposit of lawful money
in order to withdraw its circulation shall
be permitted to make any increase in
its circulation for a period of six months
thereafter. These provisions are so
manifestly in con fiict with the dictates
of sound policy that they require no
comment. In view of the foregoing
considerations, and many others that
might he urged in favor of a reorgani
zation and reformation of our paper cur
rency system, I have prepared the
Outlines ol' a Plan
which, in my opinion, will relieve the
government to a great extent from the
burdens now imposed on it; secure
within a reasonable time a safe aud
elastic national aud stale bank curren
cy, aud result ultimately iv the perma-
I nent retirement of United States legal
tender notes of both classes, lt is, in
brief, as follows:
1. Repeal ail laws requiring or au
thorizing the deposit of United States
bonds as security for circulation.
2. Permit national banks co issue
notes to an amount notexceeding 75 per
centum of their paid-up and unimpaired
capital, but require each bank before j
receiving notes to deposit a guarantee
fund consisting of United States legal
tender notes, including treasury notes
of 1890, to the amount of 30 per cent
noon the circulating notes outstanding,
tiAbe maintained at all limes,and when
ever a bank retires its circulation, in
whole or iv pari, its guarantee fund to
be returned to it in proportion to the
amount of notes retired.
3. Retain the provision of the law
making stockholders individually liable
and provided that the circulation notes
shall constitute a first lien upon all the
assets of the bank.
4. Impose a tax of one-half ot 1 per
centum per annum, payable semi an
nually, upon the average amount of
notes in circulation to defray tho "ex
penses of pi luting notes, official super
vision, cancellation, etc.
5. No national bank note t>be of less
denomination than $10, and all notes of
the same denomination to be uniform m
design; but banks desiring to redeem
their notes in gold may lave them made
payable In that coin. The secretary of
tiie treasury to have authority to pre
pare and keep on hand, ready for issue
upon application, a reserve of blank
national bank notes for each banking
association having circulation. . ' *••
•'•. Require each national banking
association to redeem us notes at its
own office or at its own official agencies
to be designated by it. ?■ '"«" ■
7. To provide for iij
•safety Fund
for the immediate redemption of the
circulating notes of failed banks, im
pose a tax of per cent per annum
on the average circulation of each bank
until the fund amounts to 5 per cent qf,
the total circulation outstanding. Re
quire each new bank and each bank
taking out additional circulation to de
posit its proper proportion of this fund
before receiving notes. When a bank
fails, its guarantee fund held on deposit.
to be paid into tiie safety fund and used
in the redemption of its notes, and if
this fund sliall bo impaired by the
redemption of the notes of failed
national banks, and the immedi
ately available cash assets of such
banks are Insufficient to establish
the fund, it shall at once be made good
by pro rata assessments upon the other
banks, according to the amount of their
outstanding circulation; but there shall
be a lirst lieu upon all the assets of the
failed bank or banks to reimburse the
contributing banks. The safety fund
may be invested iv outstanding United
States bonds having the longest time to
run. the bonds and the interest upon
them to be held as part of the fund and
sold when necessary to redeem notes of
failed banks.
& Repeal the provisions of the re
organization and extension act of duly
12, 1889, imposing limitations on the re
duction and increase of national bank
circulation.
9. Repeal all provisions of the law
requiring banks to keep a iescrve on ac
count «d deposits.
10. The secretary of the treasury may
in his discretion use any surplus rev
enue of the United States In the re
demption of United States legal tender
notes, but such redemptions shall not
in the aggregate exceed an amount
equal to 70 per cent of the additional
circulation taken out by national and
stale banks under the system herein
proposed.
State Bank's.
11. Circulating notes issued by a
banking corporation duly organized un
der the laws of any state, and which
transacts no other than banking busi
ness, shall be exempt from taxation
under the laws of the United States,
when it is shown to the satisfaction of
the secretary of tne treasury and the
comptroller of the currency—l) That
such a bank has at no time' had out
standing its circulating notes in
excess of 75 per cent of its
paid-up and unimpaired capital. (2)
That its stockholders are individually
liable for the redemption ot its circulat
ing notes to the full extent of their
stock. (?) That the circulating notes
constitute by law a first lien upon ail
the assets of the bank. (4) That -the
bank at all times keep the guarantee
funn iv United States legal tender, in
cluding treasury notes of 1890,' equal to
30 per cent of its outstanding circulat
ing notes; and (5). That it has promptly
redeemed its notes on demand at its
principal office or at one or more of its
branch offices, if it has branches. -
12. The secretary of tho treasury
may. under certain rules and regula
tions to be established by him, permit
state banks to procure and use in the
preparation of their notes the distinct
ive paper used in printing United States
securities; but no state bank shall print
or engrave its notes in similitude -of a
United States note or certificate or na
tional bank note.
Whatever may be the objections to
the issue and circulation of United
Stales legal tender paper on either con
stitutional or financial grounds it has
become so incorporated into our cur
rency system and constitutes so large a
part of our active circulation that it
could not be suddenly withdrawn with
out producing in the present state of
our laws considerable disturbance in the
fiscal operations of the government as
well as the business of tiie people, and,
therefore, the plan now suggested pro
vides for its gradual retirement by the
use of surplus revenues hereafter re
ceived, a process which will probably
require several years for its completion.
As these notes cannot be retired until
other forms of currency to an equal
amount have taken their place, there
will be neither a forced contraction nor
expansion of the circulation on account
of tne change.
As tne plan suggested proposes to
F.xempt the Government
of the United States from ail liability
for the redemption of national baiiK
notes, and places the sole responsibility
OU the banks themselves, a guarantee
fund of not less than 30 per cent on tiie
outstanding circulation is regarded as a
very proper and necessary feature of
the system.
In my opinion, the imposition of a
tax by tne federal government upon the
use of circulating notes lawfully issued
by state banks is an unjustifiable, if not
an unconstitutional, interference with
the authority of the several states, but
its validity has beeu judicially sus
tained, and, as it does not appear to
be practicable to lepeal it absolutely
at this time, it is proposed to
avoid its prohibitory effect by exempt
ing from taxation the notes of such
banking institutions as may be organ
ized and conducted under* conditions
which will amply protect the holders of
their paper. While governmental su
pervision is and ought to be pro
vided for, the requirement that a bank
in order to secure exemption from taxa
tion must satisfy the secretary of the
treasury and the comptroller of the cur
rency that it has complied with all the
conditions imposed will enable those
officials to adopt such measures as may
be necessary in each case to secure
every material fact involved in the iu
quiry.
" It epeals Reserve Clause.
It will be observed that the plan sub
mitted proposes the rep of all pro
visions of existing laws which require
national banks to hold a fixed reserve
against deposits, and as this is a de
parture from the practice which has
prevailed continuously for more than
thirty years, it is proper to state briefly
the reasons which have prompted me to
make tins suggestion. When the na
tional banking system was originally
authorized it was regarded by many as
a doubtful experiment at first, j audi
various precautionary restrictions were
imposed for the security of the note
holders and depositors which practical
experience has since shown to be un
necessary. Unnecessary and some
times harmful. Among these | are
the requirements that bonds
shall bo deposited to secure
90 per cent of their par value in circu
lating notes and that a fixed reserve,
which cannot be lawfully diminished!
shall be held on account" of deposits.
The consequence of this last require
ment is that when a bank stands in need
of all its resources it cannot use them
without violating the law. The neces
sity for holding a sufficient reserve
against deposits is not questioned, and,
iv fact, the business of receiving de
posits and discount****** paper outfit
never to be.couducted without it, but it
should be held for actual use when the
occasion arises and not made legally
inaccessible at the very time it is
theoretically supposed to be beneficial
in sustaining the credit of the bank
and affording relief to its customers,
under the present law when a
bank finds its reserve in dan
ger of reduction below the
legal requirements on account of til*
demands of its depositors, it is com
pelled at once to call in its loans, there
by increasing the distrust and aggravat
ing the situation, wnich a judicious use
of the reserve would have relieved;
and. besides, at such limes, in order to
protect the reserve, which is then prac
tically useless for ail practical purposes.
Clearing House « erlilit-iUcH,
•" *'-•* niiaoks aud bills.
and other devices of doubtful legality,
are habitually resorted to for the pur
pose of supplying circulation to take the
place of lawful money King idle iv the
vaults of the banks, To provide for a
reserve which cannot be utilized even
at a time of the greatest stringency and
distrust without incurring the penalties
of forfeiture.affords a most striking illus
tration of the Impolicy of legisla
tive interference with the natural iaws
of trad** and finance. It is not the duty
or province or the government to con
trol or regulate the private affairs of the
people, except for certain well defined
purposes, and, as the cuslodv and use
or funds belonging to depositors are
matters which attest only the interests
of the immediate parties, they should be
left to their own judgment and discre
tion. The duty of the government, so
far as it has any duty in the premises,
Is simply to provide that all the cur
rency issued under its authority is -"ef
ficiently secured to prevent its loss or
depreciation in the hands or the people
who are compelled to receive and pay it
out iv the transaction of biiblness; but a
bank is not dependent upon the govern
ment for authority to receive de
posits, and its use for that pur
pose by the public is as purely volun
tary as the credit extended to any other
corporation or to a private individual.
Every prudently managed bank, if left
free to conduct its own deposit and dis
count business in the Banner most ad
vantageous to its own interests and tho
interests of its depositors, will keep on
hand a reasonable reserve to meet not
only all the ordinary demands upon it,
but to provide for such emergencies as
are liable to occur in the community
where it is located; but it ought not to
be prohibited by law from using such
reserve for the only purpose it was
designed to accomplish.* The re
quirement that the banks shall pay
their own obligations imposes upon
them no greater hardship than is im
posed by law upon every other business
and financial institution in the country,
and the only argument that can be
plausibly urged against it, in the case
of banks, is that, as the government has
undertaken through their agency to
assure a sound circulating medium, it
should pledge its credit to keep it good
under 'all circumstances. The conclu
sive answer to this is that the govern
ment has discharged its whole duty in
the matter when it has by its legislation
provided such safeguards as will, with
honest and competent management,
guarantee the
Safe!j- of the Note*
issued by its authority; and this is one
of the results which the proposed plan
is intended to accomplish.
In order to provide a wider field for
the active circulation of our silver coins
and certificates, whicii now constitute
about one-fifth of the entire volume ot
our currency, and to protect the treas
ury as far as possible against the ac
cumulation of certificates returned in
payment of customs and other dues to
the government, it is proposed that no
national bank note of a less denomina
tion than 810 shall be issued. The bank
notes under that denomination now
outstanding amount to $63,253,940, and
there are also in circulation $64,418,831
in old United States legal lender notes
in denominations less than $10, $60,193,
--658 in treasury notes of 1890 and $131,
--047,547 in silver certificates, making in
the aggregate $318,616,985 in small
notes, or only about $19,000,000 less than
the entiie issue of silver certificates.
The fact that our circulating medium
is composed of so many different kinds
of currency would seem to require the
enactment of such legislation as will
provide a place in which each can be
safely and conveniently .used, and as
this can be done without discrimination
against any of them, it ought not to be
omitted rrotn any plan which proposes
permanent changes in the system. The
policy of various other countries iv this
respect appears to have enabled them
to avoid the difficulties encountered
here in the attempt to keep the less
valuable coins and their representatives
In circulation without derangement or
the currency or disturbance of the pub
lic finances.
Foreign Issues.
Great Britain, with $555,000,000 in
gold and only $112,000,000 in silver,
none of which is full legal tender, au
thorizes the issue of no note of a less
denomination than £5. equal to SiM.:':->;
France, Belgium and Italy, with $970,
--000,000 in gold and $518,910,000 in legal
tender silver, issue no paper below 25
florins, equal to $10.05; Spain, with
$40,000,000 in gold and $126,000,000 in
legal tender silver, issues nothing be
low 25 pesetas, or $4.72; Denmark,
Sweden and Norway, with 128,000.000
in gold and $12,100,000 in limited
legal tender silver, have no paper
under ten crowns.or $2.05; and Austria-
Hungary, with $130,000,000iu legal ten
der silver is gradually retiring all notes
under ten crowns or $4.04. None of
these countries have any paper based
exclusively upon siiver as we have, and
consequently all payments made in
sums less than the denominations of
notes mentioned must be made in actual
coin, which would not be the case here
if the recommendation now made
should be complied with; Our stock of
full legal tender coins is larger in pro
portion to the stock of gold than in any
of the countries named except liollann,
Belgium and Sapin.aud yet we continue
to obstruct their circulation by the
issue of small United States notes and
bank notes, which serve the purposes of
the people in their daily transactions no
bitter than the coins or certificates
based upon them.
The experience of this country under
the act of Feb. 8, 1884, which limited
silver certificates to denominations of
$10 and over, and under the act of Aug.
4, 1886, which removed that restriction,
justifies the belief that the change now
proposed would result in a greatly . .
Increased lie of Silver Coins
and certificates, and that they would be
much less likely to return to and re
main in the treasury than at present.
At the time of the passage of the act
last referred to, permitting the Issue of
silver dollars not represented by cer
tificates iv denominations of one, two
and five dollars, standard silver
dollars had accumulated in the treas
ury to the amount of $83,939,880, al
though the total coinage up to that date
was only $235,043,286. Within four
months alter that date, although in the
meantime the coinage was Drogreasing
at the usual rate, the amount of free
silver held in the treasury was reduced
t0571.1*68,568. and it continued to de
crease on account of the demand for
small certificates until it became so re
duced that further issues of certificates
bad to be limited practically to the cur
rent coinage of the dollars.
Ot* Revenue ISeform.
The secretary continues: If this coun
try is to utilize to the fullest extent the
opportunities offered by us geograph
ical position, natural resources and the
mechanical skill and commercial enter
prise of its people, it must adhere stead
fastly and aggressively to the revenue
policy inaugurated by the present con
gress at its last session. The"reduction of
taxation to the lowest point compatible
with the collection of a revenue suf
ficient to maintain an efficient public
service is a duty which, upon the plain
est principles of justice, every govern
ment owes to its citizens under all cir
cumstance-; but when the taxation is
imposed in such form or at such rates
as to increase the cost of living and ob
struct the processes of industry and
trade, this duty becomes still more im
perative, aud a failure to discharge it
when the power exists isa gross violation
of the public trust and confidence.
For BUM*, years our tariff iaws have
been framed upon the theory that the
wealth of the country could be increased
by imposing burdens on the people, and
that the prosperity of our industries
-could be promoted by increasing the
cost of production, and the result has
been that net profits of labor and capi
tal constantly diminished until they
reached a point which made further
development of our resources almost
impossible. But little opportunity was
afforded for the extension oi our manu
facturing and tnecnanical industries, or
for .he growth of our trade St home and
abroad, and liui- Hie farmers and other
producers w| lee country were liiMU
ea by a -situation which nulled ttieiu
to receive diminished rewards for in
creased production.
A. Change Was Demanded
by every consideration of public duly
and private Interest, and. although the
recent legislation did not accomplish all
that was expected or desired, it in
augurated a policy which it is honed
and believed will ultimately result la a
general improvement in our industrial
condition, arid a corresponding enlarge
ment iv our international and internal
commerce. In the prosecution of this
policy no temporary check or apparent
diversion of the public mind other
subjects should be permitted to di
minish our confidence in our financial
success, or weaken our determination
to maintain a consistent advocacy of
its claims to the favorable consideration
oi the people. On the contrary, reverses
should stimulate Increased effort, and
every movement Hereafter made should
be a step forward in the direction of
freer trade and a more equal distribu
tion of the rewards of industry.
The raw materials used in the pro
duction of commodities for the use of
the people in their homes and in tbeir
various industrial pursuits should be
free from taxation, in order that the
burdens of labor may be lightened, tie
opportunities for employment in
creased, and the uece&sai'its of lite
nude more abundant aud iess ex
pensive. If our industries are to be
profitably conducted, reduced cost of
production must precede or accompany
reduced prices of the finished product;
and as cheap commodities increase
consumption, the interests ot all classes
will be promoted by removing the ob
structions which deny our skilled labor
ers and artisans access to the world's
store of raw materials.
The lata act, while it placed upon the
free list a considerable part of most im
portant raw materials used in inami
lectures, lett iron and lead ores and bi
tuminous coal, together with several
other articles of less consequence, still
dutiable, thus not only failing to put in
force a consistent system of revenue re
form, but leaving some of our most val
uable industries at a great disadvantage
as compared with their rivals differently
located.
lhere are other defects, consisting of
ambiguous phraseology in .sumefof
the paragraphs, and inconsistent and
excessive rates of duty in some of the
schedules, a correction of which would
he in harmony with a policy of progress,
ive reform upon a basis of equal
justice to producer ana consumer, and
would not affect the revenue to any
considerable extent. Advantage should
be promptly taken of every opportunity
to remove all these objectionable feat
ures from the act, in order that our
legislation may be made to conform as
speedily as possible to the pledges
given to the people, and to the demands
of public sentiment upon this subject.
Breakers Ahead.
Prudence, foresight, tbat might have
saved many a good ship that has gone
to pieces among the breakers, is a qual
ity •'conspicuous by its absence" among
many classes of invalids, and among
none more' notably than persons
troubled with inactivity of the kidneys
and bladder. When these organs fall
off in duty grievous trouble is to be ap
prehended. Bright's disease, diabetes,
catarrh and stone lv the bladder are
among the diseases which a disregard
of early symptoms confirm and render
fatal. That signally effectual diuretic,
Mostetter's Stomach Bitters, will—and
let no cue so troubled forget this—rem
edy the symptoms of approaching renal
disease and check its further progress.
Equally efficacious is the Bitters for
constipatiou, liver complaint, malarial
and rheumatic trouble and debility.
TWO ST A IKS MOURN.
Ex-Govs. Bowie, of Maryland, and
\bbett, of New Jersey, Dead.
Baltimore. Dec. 4.—Ex-Gov. Oden
Bowie died at his home in "Fairview,"'
Bowie, Md., at S:fM this morning. The
end came peacefully while thu ex-gov
ernor was surrounded by members of
his family.
Jersey City, N. J., Dec. 4.—Ex-Gov.
Leon Abbetl died at his residence this
afternoon. The governor had been suf
fering from diabetes a long time, and
this was the cause of his death. Ar
rangements for tne funeral are not yet
completed.
To California Without Change Via
"ihe Milwaukee.'*
On Saturday, Nov. 10th, 1504, and on
every Saturday thereafter, an elegant
Pullman Tourist Sleeper will leave Min
neapolis (8:25 a. in.), St. Paul (8-85 a.
in.), and arrive Los Angeles. California,
at 6:30 p. m. following Wednesday.
Via "The Milwaukee's" famous **Hed
rick Route" to Kansas City, thence via
the A.. T. & S. F. K'y through South
ern California.
A most delightful winter route to the
Coast.
This car is ''personally conducted" —
in immediate charge of an official and
an attendant through to destination.
Kate per berth, £0.00 through from St
Paul-Minneapolis.
Leave St. Paul-Minneapolis every.
Saturday morning, arriving at Los a\u
ge'.es every Wednesday afternoon.
For berths, complete information and
lowest rates aoply to "The Milwaukee"
agents, St. Paul-Minneapolis, or ad
dress J. T. Conley, Assistant General
Passenger Agent, St. Paul, Minn.
Rebates on Lead Ores.
Washington. Dec. 4.— Senator Vest
today introduced' a bill providing for
the payment of a draw-back by the
government to the importers of lead
ores who alter refining the ores have
exported the product, the amount of
the draw-back being equal in amount to
the duties paid on the ores, less 1 per
cent.
i •»
BAD COMPLEXIONS
Dark, yellow, oily, mothy skin, pim
ples, blackheads, roughness, redness,
dry, thin, and falling hair, and simple
baby blemishes prevented and cured
by the celebrated
fi Aig^ m
Tbe rao*t effect i *-s skin purifying and
beautifying eo.p in the world, as
- well as rest and sweetest for toilet,
bath, and nursery. It la So because
it strikes at the OAUSSI of most com
plexioual disfigurations, viz.: the
CLOGGED, IVJa-AMUD, IRRITATED,
OVERWORKED, Or SLUGGISH PORE.
Bold throughout the world. Potter Dr*ts and
'.''ISM. Com* , sole proprietors, Boston. js***r "AU
tour, i the iilood.elain, Scalp, and Hair,"mailed t re**.
jg-M T i IF^* B''****, CUDi \f
■ m^ n"t^K^^^^^^^^^^ E3nCna%tlnw I
HAIN uti!
tSJ 11 lm ri F*. § fIKJ i
RANGE'
P^iS TI r-i ""-••■ P'' Call and See It, or Send
•JHlMnl *^r^ r-L THE ST. PAUL
STOVE WORKS,
__^ 71-73 W. Sevaath St. •
What is
Castoria is Dr. Samuel Pitcher's prescription for Infants
and Children. It contains neither Opium, Morphine nor
••other Narcotic substance. It is a harmless substitute
for Paregoric, Drops, Soothing- Syrups, and Castor Oil.
It is Pleasant. Its guarantee is thirty years' use by
Millions of Mothers. Castoria is the Children's Panacea
—the Mother's Friend. •»
Castoria. Castoria. %
•.•Castoria is so well adapted to children that Castoria cures Colic, Constipation,
I recommend it a* superior to any prescription Sour Stomach, Diarrhoea, Eructation,
imowu to me." H. A. Archer, 31. D., Kills Worms, gives sleep, aad promotes :'4
111 So. Oxford St., Brooklyn, N. Y. gestion,
- Without injurious medication.
"The use of 'Castoria" is so universal and
its merits so well known that it seems a work •**-•„» „„„.i „„ , . *." . a
, „. , .^ „ , *or several years I have recommend**
of supererogation to endorse it. Few are the your m. rf , / nd sholl always contiaw £
. ii- a* „- L „ , ~ -mr tastorm,'and shall always continue U
intelligent families who do not keep Castoria .* it .._- mvariably produced beneflcial
.... ... *■ «•■» so as iv liass invariabrs' produc-ed beneucial
trithin easy reach." results."
Caslos Martyn, I). D., Edwin F. Pardee, 31. D.,
New York City. 125Lh Street and 7th. Aye., New York City*
The Centaur Company, 77 Murray Street, New York Cttt
ST? "ED .*€k TTT
&SS3BSB& csJikß Q saSam edzsa msSaaa *****a»***************fl
Our banks, jobbing* houses, and all classes of business men
are upon a sound footing. Our sails having beer- trimmed and
the financial storm weathered, St. Paul invites the Northwest
to its doors with the new era of brightening* skies, points with
pride to its record as the Commercial Metropolis of the new
Northwest, and assures all friends, competitors and patrons o{
a continuance of that spirit of fair dealing which has made thtf
ity great.
HOREJS BROS.
MAKE THE BEST
Home -Made Bread.
761-403-1165-1167
West Seventh Street.
.
BAR
IMF? AGE" MFAM MFRIT2 The Bar-Lock is not as old ai
UULO AbL ML /J/V fflLfi/I f some other macMaes Neithe j
.are the. other machines as old as a steel pen, nor the steel pen as old a*
he quill. New things represent pro-jres**. It is thß new antomstU
ctions and the new visible writing feature which make the Bar-LocM
he model writing* machine of the world.
Full details of its automatic movements mailed free.
98 East Fourth Street St. Paul, Minn.
L Anti-ColdTsbiets. 25c
Prevent and Hi
Colds, Catarrh,
Bronchitis,
Pneumonia,
Iv the Early Stages.
VI!. CoupTahlels.2sc
CURE OBSTINATE COUGHS.
CURE TIGHT COUGHS.
CURE WHEEZY ASTHMATIC COUGH"'
CURE NICHT COUGHS.
CURE BRONCHIAL COUGHS.
CURE LOOSE, RATTLING COUGHS.
CURE ALL CURABLE COUGHS.
Prepared only by
St. Paul Homeopathic Pharmacy,
100 E. .ll» M., St. Paul, Tliim.
To induce you to vis it our New Studio,
Opposite Metropolitan Optra House.
Waul 101 sixth Street.
Christmas Photography!
jfi CABINETS an I ONE 0.1 Bxlo
1/ $3.00. ™ X
Oat-Door and Commercial Work a Special:/
Tn.HPiioME—l47l.
*flwCs = s.WU. ZIMMERMAN'S PERSONAL
b**2g^ ATTENTION to APPOINTMENT
jg^L The J. D. HESS
Shorthand School.
In session the yeai
Jl^SSSft^jT round— Day, Even
•^4*^£/tX In*; and by Mail.
BOGCS -ft HOIT,
Wholesale Grain, Hay anil Soeds,
Grast* Seeds a s-pecialir.
'•• PAUL. ----- MIN.-aT
BRI-.Waa.KS. *
Hamm Brewing Comoaay.
tschlitz Brewing C 0.." foot of Sibler street.
TYPIIWRITKJIiS.
The Bar-Lock, 9*l £es: "Toari
JOS. SCHLIiZ BREWING COS.
Celebrated IQilivaukea
EXPORT BEERS
AND MALT EXTRACT.
DEPOT, FOOT OF SIBLEY
TELEPHONE 507-2.
180 East Sevenths'., St Paul Minn
Speedily cures all private, nervous, chroafl
and blood and ofetn diseases of both .-.exes'
without the use of mercury or hiudrauot
from business. NO Cl'-.K, '*«,<» n».\V. Fri<
vale diseases, and all old. lineena ■ easel
where the blood has becoaa poisoned, etuis
ing ulcers, blotches, sora throat tad tnouth,
rains in the heid and bone*, and all diser.sej
of the kidneys and bir.dalsr aie cured fo|
life. Men of all nes who are suffering frors
tho result of youthful indiscretion or c*(«
cesses of mature years, produrti****" n-»rvsu»
uess, iudigestiou. constipation. lon ot mom<
ory, etc, are thoroughly and permaaeuilj
cured.
Dr. Feller, who has had many vesrs of e*o
pcrieuce In this specialty, is a graduate fro***
one of the leading medical colleges of th,
country. He has never failed in curinjanl
eases that he has undertaken. Cases ana
correspondence sacredly confidential. C»l
lor wr.te for list of questions. Medicine seal
by mail and express everywhere free frera
isk and exposure.
- '**a
Dr. E. C. WESTS NERVE AND BRAIU
TRi. ATM EM', a specific for Hysteria, Uiz»
i os», Fit*. Neuralgia, Headache, Nerro.
prostration Caused by alcohol or tobaccd
Wsikefuluess, Mental Depression, Soften lug
of Brain, can-dag Insanity, misery, decaf
death: mature Old Age. Barrenness, Loss
01 fower in either sex. la-potency, Latacor*
rha>a and all Female Wea'»!lesse^ Involun
tary Losses. Spermatorrhoea caused by over
exertion of brnln, Be}f-AI.*MF, Over-ludul
.yeuije. A mouth's treatment, **.:, ii tor $-, by
mail. We guarantee six boxes to cure.
Each order for.) boxes, with $5, will send,
written guarantee to Ireland if not Cured,
Guarantees issued only by W. K. Collier
Druggist, Seventh and Sibley streatuSt. Paul
Mian.
HOTEL IMPERIAL!?™
One of 'he largest and best In the city.
Rooms, $1.00 per day up. Send for circular.
Half a block: from lath st. exit of the new
Illinois Central -station. All bag-rage del.v
ered FREE from Ills. Central depot. No cab
fares necessary. Look out for our porter aj
the station. If you want comfort, eour«a»
ieuce and economy, stop at the new
6.

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