656 



UNITED STATES OF AMERICA. (FINANCES.) 



advice and consent of the Senate thereof, and by 

 his Britannic Majesty; and the ratifications shall 

 be exchanged at Washington or at London at the 

 earliest possible time within six months from the 

 date hereof." 



The treaty was laid before the Senate on Dec. 

 10, was reported favorably to the Senate by the 

 Committee on Foreign Relations on Dec. 6, and 

 was ratified on Dec. 16 by 72 votes to 0. The 

 report of the Isthmian Canal Commission, sub- 

 mitted to Congress on Dec. 4, 1901, recommend- 

 ed the adoption of the Nicaraguan route, which 

 was estimated to cost $189,864,000, whereas to 

 complete the Panama Canal would cost $144,- 

 233,358, while the directors of the Panama 

 Canal Company demanded $109,141,000 for the 

 franchise and property. The Panama Canal 

 might be built at the sea-level, while locks would 

 be necessary on the Nicaragua route, but Lake 

 Nicaragua would afford an inexhaustible supply 

 of water for the canal. Panama has harbors on 

 both coasts, though considerable work would be 

 necessary to make the harbor on the Atlantic 

 side suitable as an entrance to the canal. The 

 Nicaragua route has no natural harbors, but har- 

 bors can be constructed at both ends. It is possi- 

 ble to complete the canal by the Nicaragua route 

 in six years after two years of preparation, where- 

 as ten years would be necessary for the comple- 

 tion of the Panama Canal. The length of the 

 Nicaragua route is 183.66 miles, while that of 

 the Panama route is 49.09 miles. The cost of 

 operating and maintaining the Nicaragua Canal 

 would be $1,350,000 more per annum than the 

 annual cost of the shorter canal. It would take 

 a vessel thirty-three hours to pass through the 

 Nicaragua Canal, while the passage of the Pan- 

 ama Canal would require only twelve hours. The 

 Nicaragua route is better, however, for sailing 

 vessels on account of favoring winds, and is more 

 advantageous to commerce save that originating 

 on the west coast of South America. The hygienic 

 conditions, moreover, are better in Nicaragua. 

 The commission recommended that the United 

 States Government acquire a strip of territory 

 10 miles wide from ocean to ocean. The consent 

 of Nicaragua and Costa Rica for the construction 

 of the canal by way of Lake Nicaragua was easy 

 to obtain. The concessions of the Colombian 

 Government to the Panama Company have yet 

 many years to run. The directors of the Panama 

 Company offered later to sell its franchises and 

 property to the United States Government for 

 $40,000,000, the figure at which the Isthmian 

 Canal Commission estimated the work done on 

 the excavation and the other property to be ac- 

 tually worth. The commission recommended the 

 Government to accept the offer and complete the 

 Panama Canal rather than build one by the Nic- 

 aragua route, for which a bill was already before 

 Congress. 



Finances. The excess of revenues over expend- 

 itures for the fiscal year ending June 30, 1901, 

 amounted to $77,717,984, against a like excess for 

 the previous year of $79,257,060. There was an 

 increase of about $5,000,000 in the receipts from 

 customs and $12,000,000 in those from internal 

 revenue. There was $2,122,841 received from the 

 sale of the claim of the United States against the 

 Sioux City and Pacific Railway (a new item), 

 and an increase of postal receipts of more than 

 $9,000,000. Except in the decrease of more than 

 $2,000,000 in the deficiency of the postal revenues 

 and about $8,000,000 in the amount of interest 

 paid on the public debt, there was no marked 

 change in the several items of expenditures, there 

 being generally a small increase all along the line. 



Of the surplus revenues for the year, about 

 $31,000,000 was permitted to accumulate in the 

 Treasury ; the remainder was expended in the pur- 

 chase of United States bonds, on which was paid 

 for premiums $14,649,573. The bonds were pur- 

 chased at substantially their market prices, which 

 at the time represented an annual income from 

 the investment of only 1.726 per cent. Even the 

 2-per-cent. bonds of the Government were at a 

 considerable premium in the markets of the world. 

 The continuance of a surplus every year not being 

 deemed necessary or advisable, Congress, by an 

 act approved March 2, 1901, modified the internal- 

 revenue taxes imposed by the act of 1898 on beer, 

 cigars, cigarettes, tobacco, snuff, and a few other 

 items, and repealed a large portion of the stamp 

 taxes imposed by the same act, all to take effect 

 at the opening of the fiscal year 1902. 



The detailed receipts and expenditures of the 

 Government for 1901, compared with those for 

 1900, are set forth in the table at the head of 

 the next page. 



That portion of the public debt against which 

 no reserve is held was decreased in the year end- 

 ing Dec. 31, 1901, by $56,067,091. The changes 

 in the several items of which it is composed are 

 shown in detail by the following table. The 

 changes involved indicate a material reduction in 

 the annual interest charge: 



In addition to the above-mentioned obligations, 

 there were outstanding on Dec. 31, 1901, of United 

 States notes $346,681,016, and of Treasury notes 

 of 1890 $38,596,000; in all, $385,277,016, payable 

 on demand, against which the Treasury held, as 

 required by law, $150,000,000 of gold for their 

 redemption when presented for that purpose. 

 This fund was maintained throughout the year 

 unimpaired, the redemption of notes having been 

 adjusted each day by exchange for gold out of 

 the available cash balance. The gold certificates 

 and silver certificates in circulation, though obli- 

 gations of the Government, are issued only upon 

 a deposit of an equal amount of the metal they 

 represent, from which deposit they are respective- 

 ly redeemable upon presentation, the certificates 

 being in effect used for circulation to their 

 amount in place of the gold or silver deposited. 



The most noticeable change in the character of 

 the assets held by the public Treasury during the 

 calendar year was an increase of $62,000,000 in 

 the 'amount of gold held, the total at the close 

 of the year being $540,797,603, an amount seldom 

 if ever exceeded by this or any other government. 

 Of this amount, $150,000,000 was by law held as 

 a reserve to meet the redemption of certain Gov- 

 ernment notes, as before stated, and $316,785,089 

 to meet the payment of the certificates that had 

 been issued therefor, which circulate as money, 

 leaving $74,797,603 as a part of the cash balance 

 available to meet current disbursements of the 

 Government. 



