CONGRESS. (Tut PRESIDENT'S Mi 



153 



inspection of consulates by officers appointed for that 

 purpose or by persons already in the diplomatic or 

 consular service. The expense attending such a 

 plan would lie insignificant compared with its use- 

 fulness, and I hope the legislation necessary to set 

 it on font will be speedily forthcoming. 



1 am thoroughly convinced that in addition to 

 their salaries our ambassadors and ministers at for- 

 eign courts should be provided by the Government 

 with oflicial residences. The salaries of these offi- 

 ire comparatively small, and in most cases in- 

 sufficient to pay. with other necessary expenses, the 

 "f maintaining household establishments in 

 keeping with their important and delicate functions. 

 The usefulness of a nation's diplomatic representa- 

 tive undeniably depends much upon the appropri- 

 ateness of his surroundings, and a country like ours, 

 while avoiding unnecessary glitter and show, should 

 bi- certain that it does not suffer in its relations 

 with foreign nations through parsimony and shab- 

 biness in its diplomatic outfit. These considera- 

 tions and the other advantages of having fixed and 

 somewhat permanent locations for our emb; 

 would abundantly justify the moderate expenditure 

 necessary to carry out this suggestion. 



As we turn from a review of our foreign rela- 

 tions to the contemplation of our national financial 

 situation we are immediately aware that we ap- 

 proach a subject of domestic concern more impor- 

 tant than any other that can engage our attention, 

 and one at present in such a perplexing and deli- 

 cate 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 mass of 

 our countrymen, and which, while inefficient for 

 the purpose of revenue, curtailed our trade rela- 

 tions and impeded our entrance to the markets of 

 the world, has been superseded by a tariff policy 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 comfort 

 and contentment, for the sake of according especial 

 advantages to favorites, and which, while encour- 

 aging our intercourse and trade with other nations, 

 recognizes the fact that American self-reliance, 

 thrift, and ingenuity can build up our country's 

 industries and develop its resources more surely 

 than enervating paternalism. 



The compulsory purchase and coinage of silver 

 by the Government, unchecked and unregulated by 

 business conditions and heedless of our currency 

 needs, which for more than fifteen years diluted 

 our circulating medium, undermined confidence 

 abroad in our financial ability, and at last cul- 

 minated in distress and panic at home, has been 

 recently stopped by the repeal of the laws which 

 forced this reckless scheme upon the country. 



The things thus accomplished, notwithstanding 

 their extreme importance and beneficent effects, 

 fall far short of curing the monetary evils from 

 which we suffer as a result of long indulgence in 

 ill-advised financial expedients. 



The currency denominated United States notes 

 and commonly known as greenbacks was issued in 

 large volume during the late civil war. and was in- 

 tended originally to meet the exigencies of that pe- 

 riod. It will be seen by a reference to the debates in 

 Congress at the time the laws were passed authoriz- 



ing the issue of these notes that their advocates de- 

 clared they were intended for only temporary use 

 and to meet the emergency of war. In alumst if 

 not all the laws relating to them some provision 

 was made contemplating their voluntary or com- 



Eulsory retirement. A large quantity of them, 

 owever, were kept on foot and mingled with the 

 currency of the country, so that at the close of the 

 year 1874 they amounted to $381.999.n7:5. 



Immediately after that date, and in January, 

 l*7-~>. a law was passed providing for the resump- 

 tion of specie payments, by which the Secretary of 

 the Treasury was required, whenever additional 

 circulation was issued to national banks, to retire 

 United States notes equal in amount to 80 per cent. 

 of such additional national bank circulation until 

 such notes were reduced to $300.000,000. This law 

 further provided that on and after the 1st day of 

 January, 1879, the United States notes then out- 

 standing should be redeemed in coin, and in order 

 to provide and prepare for such redemption, the 

 Secretary of the Treasury was authorized not only 

 to use any surplus revenues of the Government, but 

 to issue bonds of the United States and dispose of 

 them for coin, and to use the proceeds for the pur- 

 poses cor.templated by the statute. 



In May. 1878. and before the date thus appointed 

 for the redemption and retirement of these notes, 

 another statute was passed forbidding their further 

 cancellation and retirement. Some of them had. 

 however, been previously redeemed and canceled 

 upon the issue of additional national bank circula- 

 tion, as permitted by the law of 1875. so that the 

 amount outstanding at the time of the passage of 

 the act forbidding their further retirement was 

 $346.681.016. 



The law of 1878 did not stop at distinct prohibi- 

 tion, but contained, in addition, the following ex- 

 press 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 paid 

 out again and kept in circulation." 



This was the condition of affairs on the 1st day 

 of January. 1879. which had been fixed upon four 

 years before as the date for entering upon the re- 

 demption and retirement of all these notes, and for 

 which such abundant means had been provided. 



The Government was put in the anomalous situa- 

 tion of owing to the holders of its notes debts pay- 

 able in gold on demand which could neither lie 

 retired by receiving such notes in discharge of obli- 

 gations due the Government nor canceled by actual 

 payment in gold. It was forced to redeem without 

 redemption and to pay without acquittance. 



There had been issued and sold $95,500,000 of 

 the bonds authorized by the resumption act of 1875, 

 the proceeds of which, together with other gold in 

 the Treasury, created a gold fund deemed sufficient 

 to meet the 'demands which might be made upon it 

 for the redemption of the outstanding United States 

 notes. This fund, together with such other gold as 

 might be from time to time in the Treasury avail- 

 able for the same purpose, has been since called our 

 gold reserve, and |lOO,000.(X>0 has been regarded as 

 an adequate amount to accomplish its object. This 

 fund amounted on the 1st day of January. 1*7'.'. 

 to $114.193,360, and, though thereafter constantly 

 fluctuating, it did not fall below that sum until 

 July. 1892. In April. 1893. for the first time since 

 its establishment, this reserve amounted to less than 

 $100,000,000. containing at that date only $97.011.- 

 330. 



In the meantime, and in July. 1890. an act had 

 been passed directing larger governmental monthly 



