770 



UNITED STATES, FINANCES OF THE. 



tinuing the consideration of the subject, the 

 Secretary says : 



This analysis of our coinage laws and explanation 

 of their history yield lig^ht for guidance now. Or- 

 dained "to establish justice," the Constitution itself 

 is buttressed by the hrst century of constancy in the 

 Congress to a continuous and just equivalence in the 

 successive coin embodiments of the monetary unit for 

 a standard and measure of value. The precedent 

 stands, and will stand for centuries to come, the ad- 

 miration, the pride, the rule of law and of duty for 

 many generations of self-governing freemen, 'it is 

 for us to pass on unimpaired this high tradition of 

 financial integrity. But of justice, as of liberty, eter- 

 nal vigilance is the price. Our 215,000,000 silver dol- 

 lais are by law fu Illegal tender. Sharing that func- 

 tion with the monetary unit itself, the honor of the 

 country, not less than its interests, is involved in 

 the preservation of their equivalence with that unit, 

 wherever our citizens dwell and our laws run. Equiva- 

 lence in foreign trade, for the reasons above indicated, 

 is for the present quite impracticable. Equivalence in 

 domestic trade is practicable. But that equivalence is 

 now imperiled by the continuing coinage and increas- 

 ing number of the silver dollars. This is much more 

 than a deliberate judgment of the Secretary of the 

 Treasury. It is attested to him from the centers of 

 trade in all parts of the country, as much from the 

 South as the North, as much from the West as the 

 East. Not alone our able statesmen and instructed 

 economists and financiers advise the stopping of the 

 silver coinage now, but wherever our fellow-citizens 

 are concentrated in commercial cities and towns, the 

 business classes engaged in the trade, the enterprises, 

 and manufactures of those centers, and the still larger 

 masses of working-men employed by them, urge the 

 stopping of the silver coinage now. It is these classes 

 which are always first to perceive such perils to in- 

 dustry and trade, and the consequences they entail. 

 To their judgment in such a matter even the acts of 

 Congress touching commerce and currency are finally 

 appealed. For it is their interests first, and aftorward 

 the interests of the agricultural classes, which are en- 

 dangered. Every business man from day to day must 

 form his separate'judsrment of any medium of exchange 

 which he may be obliged by law to take in hfo next 

 bargain. Twenty years ago the gold dollar was not 

 kept from a premium, to-morrow the silver dollar can 

 not be kept from a discount, in disregard of their ap- 

 praisal. 



The President, in his annual message, said : 

 We have now on hand all the silver dollars neces- 

 sary to supply the present needs of the people and to 

 satisfy those who from sentiment wish to see them in 

 circulation ; and if their coinage is suspended they can 

 be readily obtained by all who desire them. If the 

 need of more is at any time apparent, their coinage 

 may be renewed. That disaster nas not already over- 

 taken us furnishes no proof that danger does not wait 

 upon a continuation of the present silver coinage. 

 We have been saved by the most careful management 

 and unusual expedients, by a combination of fortunate 

 conditions, and by a confident expectation that the 

 course of the Government in regard to silver coinage 

 would be speedily changed by the action of Congress. 

 Prosperity hesitates upon our threshold because of 

 the dangers and uncertainties surrounding this ques- 

 tion. Capital timidly shrinks from trade, and invest- 

 ors are unwilling to take the chance of the question- 

 able shape in which their money will be returned to 

 them, while enterprise halts at a risk against which 

 care and sagacious management do not protect. As a 

 necessary consequence, labor lacks employment, and 

 suffering and distress are visited upon a portion of 

 our fellow-citizens especially entitled to the careful 

 consideration of those charged with the duties of 

 legislation. No interest appeals to us so stronglv for 

 a safe and stable currency as the vast army of the un- 

 employed. 



I recommend the suspension of the compulsory coin- 

 age of silver dollars, directed by the law passed in 

 February, 1878. 



Of the entire amount of duties collected from 

 imports during the year, $178,151,601.11, 70 

 per cent, was collected from the following arti- 

 cles: Sugar and molasses, 29 per cent.; wool 

 and its manufactures, 15 per cent. ; manufact- 

 ures of silk, 8 per cent. ; iron and steel, and 

 their manufactures, 7 per cent. ; manufactures 

 ot cotton, 6 per cent. ; and from flax, hemp, 

 jute, and their manufactures, 5 per cent 



Taxation Reform. The Secretary of the Treas- 

 ury submitted with his annual report to Con- 

 gress a special report, based upon a series of 

 investigations instituted early in the year, bear- 

 ing upon the present system of levying and 

 collecting import duties, in which he advocates 

 a reform in the system, and supports his views 

 with those of the chief and other important 

 officers of the customs service throughout the 

 country, furnished in response to letters of in- 

 quiry addressed to them on the subject. He 

 calls particular attention to the difficulties re- 

 sulting from the disputes constantly occurring 

 between importers and customs officers in re- 

 gard to the commercial designation or classi- 

 fication, and the dutiable value, of imported 

 merchandise, and forcibly contends that as such 

 difficulties are due to and inhere in the existing 

 tariff system, they can not be effectually reme- 

 died by any changes in the methods of admin- 

 istration. In his consideration of the subject 

 the Secretary says: 



Besides the reforms which are desirable for the ef- 

 fective administration of any system of taxation levied 

 through imported merchandise, and are indispensable 

 for the administration of customs laws which, like our 

 own, are a chaos rather than a system, I venture to 

 hope that in due season it will be the pleasure of Con- 

 gress to consider some other reforms upon which, as 

 is requisite, all parties may agree, and that are of a 

 different scope. Like our currency laws, our tariff 

 laws are a legacy of war. If its exigencies excuse 

 their origin, their defects are unnecessary after twenty 

 years of peace. They have been retained without 

 sifting and discrimination, although enacted without 

 legislative debate, criticism, or examination. A hori- 

 zontal reduction of 10 per cent, was made in 1872, but 

 was repealed in 1875, and rejected in 1884. They re- 

 quire at our custom-houses the employment of a force 

 sufficient to examine, appraise, and levy duties upon 

 more than 4,182 different articles. Many rates of duty 

 begun in war have been increased since, although the 

 late Tariff Commission declared them " injurious to 

 the interests supposed to be benefited," ana said that 

 a reduction would be conducive to the general pros- 

 perity. They have been retained, although the long 

 era of falling prices, in the case of specific duties, has 

 operated a Targe increase of rates. They have been 

 retained at an average ad-valorem rate for the last 

 year of over 46 per cent. , which is but 2i per cent, 

 less than the highest rate of the Avar period, and if 

 nearly 4 per cent, more than the rate before the latest 

 revision. The highest endurable rates of duty, which 

 were adopted in 1862-'S4 to offset internal taxes upon 

 almost every taxable article, have in most cases been 

 retained now from fourteen to twenty years after 

 every such internal tax has been removed. They have 

 been retained while purely revenue duties upon arti- 

 cles not competing with * anything produced in the 

 thirty-eight States have been discarded. They have 

 been retained upon articles used as materials for cur 



