144 



CONGRESS. (PRESIDENT'S MESSAGE.) 



Peace and good will with all the nations of the 

 earth continue unbroken. 



A matter of genuine satisfaction is the growing 

 feeling <>f fraternal regard and unification of all 

 sections of our c. unit rv, t lie incompleteness of which 

 too long delayed realization of the highest 

 blessings of the Union. The spirit of patriotism 

 is universal and is ever increasing in fervor. The 

 public questions which now must engross us are 

 lifted far above either partisanship, prejudice, or 

 former sectional differences. They affect every part 

 of our common country alike and permit of no di- 

 vision on ancient lines." Questions of foreign policy, 

 of revenue, the soundness of the currency, the in- 

 violability of national obligations, the improvement 

 of the public service, appeal to the individual con- 

 science of every earnest citizen to whatever party 

 he belongs or in whatever section of the country he 

 mav reside. 



"flie extra sosion of this Congress which closed 

 during Julv lust enacted important legislation, and 

 while its full effect has not yet been realized, what 

 it has already accomplished assures us of its timeli- 

 ness and wisdom. To test its permanent value, 

 further time will be required, and the people, satis- 

 fied with its operation and results thus far, are in 

 no mind to withhold from it a fair trial. 



Tariff legislation having been settled by the extra 

 session of Congress, the question next pressing for 

 consideration is that of the currency. 



The work of putting our finances upon a sound 

 basis, difficult as it may seem, will appear easier 

 when we recall the financial operations of the Gov- 

 ernment since 1866. On the 30th day of June of 

 that year we had outstanding demand liabilities in 

 the sinn of $728,868,447.41. On the 1st of January, 

 1879, these liabilities had been reduced to $443,889',- 

 495.88. Of our interest-bearing obligations, the fig- 

 ures are even more striking. On July 1, 18G6, the 

 principal of the interest-bearing debt of the Govern- 

 ment was $2,332,331,208. On the 1st day of July, 

 1883, this sum had been reduced to $585,037,100, 

 or an aggregate reduction of $1,747,294,108. The 

 interest-bearing debt of the United States on the 

 1st day of December, 1897, was $847,365,620. The 

 Government money now outstanding (Dec. 1) con- 

 sist* of $346,681,016 of United States notes, $107,- 

 793,280 of Treasury notes issued by authority of the 

 law of 1890, $384,963,504 of silver certificates, and 

 $61,280,761 of standard silver dollars. 



With the great resources of the Government and 

 with the honorable example of the past before us, 

 we ought not to hesitate to enter upon a currency 

 revision which will make our demand obligations 

 leas onerous to the Government and relieve our 

 financial laws from ambiguity and doubt. 



The brief review of what was accomplished from 

 the close of the war to 1893 makes unreasonable 

 aial groundless any distrust either of our financial 

 ability or soundness; while the situation from 1893 

 to 1897 must admonish Congress of the immediate 

 necessity of so legislating as to make the return of 

 the conditions then prevailing impossible. 



Then- an; many plans proposed as a remedy for 

 the evil. Before we can find the true remedy we 

 must appreciate the real evil. It is not that' our 

 currency of every kind is not good, for every dollar 

 .f it is good ; good because the Government's pledge 

 i> --lit to keep it so, and that pledge will not be 

 broken. However, the guarantee of our purpose to 

 keep the pledge will be best shown by advancing 

 towanl iis fulfillment. 



The evil of the present system is found in the 

 great ("t to the Government of maintaining the 

 parity of our different forms of money that is, keep- 

 ing all of them at par with gold. We surely can 

 not be longer heedless of the burden this imposes 



Tipon the people, even under fairly prosperous con- 

 ditions, while the past four years have demonstrated 

 that it is not only an expensive charge upon the 

 Government, but a dangerous menace to the na- 

 tional credit. 



It is manifest that we must devise some plan to 

 protect the Government against bond issues for 

 repeated redemptions. We must either curtail the 

 opportunity for speculation, made easy by the mul- 

 tiplied redemptions of our demand obligations, or 

 increase the gold reserve for their redemption. We 

 have $900,000,000 of currency which the Govern- 

 ment by solemn enactment has undertaken to keep 

 at par with gold. Nobody is obliged to redeem in 

 gold but the Government. The banks are not 

 required to redeem in gold. The Government is 

 obliged to keep equal with gold all its outstanding 

 currency and coin obligations, while its receipts are 

 not required to be paid in gold. They are paid in 

 every kind of money but gold, and the only means 

 by which the Government can with certainty get, 

 gold is by borrowing. It can get it in no other way 

 when it most needs it. The Government, without 

 any fixed gold revenue, is pledged to maintain gold 

 redemption, which it has steadily and faithfully 

 done, and which under the authority now given it 

 will continue to do. 



The law which requires the Government after 

 having redeemed its United States notes to pay 

 them out again as current funds demands a con- 

 stant replenishment of the gold reserve. This is 

 especially so in times of business panic and when 

 the revenues are insufficient to meet the expenses of 

 the Government. At such times the Government 

 has no other way to supply its deficit and maintain 

 redemption but through the increase of its bonded 

 debt, as during the administration of my prede- 

 cessor, when $262,315,400 of 4^-per-cent. bonds were 

 issued and sold and the proceeds used to pay the 

 expenses of the Government in excess of the rev- 

 enues and sustain the gold reserve. While it is true 

 that the greater part of the proceeds of these bonds 

 were used to supply deficient revenues, a consid- 

 erable portion was required to maintain the gold 

 reserve. 



With our revenues equal to our expenses, there 

 would be no deficit requiring the issuance of bonds. 

 But if the gold reserve falls below $100,000,000, how 

 will it be replenished except by selling more bonds! 

 Is there any other way practicable under existing 

 law! The serious question then is, Shall we con- 

 tinue the policy that has been pursued in the past ; 

 that is, when the gold reserve reaches the point of 

 danger, issue more bonds and supply the needed 

 gold, or shall we provide other means to prevent 

 these recurring drains upon the gold reserve? If 

 no further legislation is had and the policy of sell- 

 ing bonds is to be continued, then Congress should 

 give the Secretary of the Treasury authority to sell 

 bonds at long or short periods, bearing a less rate of 

 interest than is now authorized by law. 



I earnestly recommend, as soon as the receipts of 

 the Government are quite sufficient to pay all the 

 expenses of the Government, that when any of the 

 United States notes are presented -for redemption 

 in gold and are redeemed in gold, such notes shall 

 be kept and set apart, and only paid out in ex- 

 change for gold. This is an obvious duty. If the 

 holder of the United States note prefers the gold 

 and gets it from the Government, he should not re- 

 ceive back from the Government a United States 

 note without paying gold in exchange for it. The 

 reason for this is made all the more apparent when 

 the Government issues an interest-bearing debt to 

 provide gold for the redemption of United States 

 notes a non-interest-bearing debt. Surely it should 

 not pay them out again except on demand and for 



