received by the Government, and indirectly paid by the people, from customs
duties. The question of free trade is not involved, nor is there now any
occasion for the general discussion of the wisdom or expediency of a
protective system.
Justice and fairness dictate that in any modification of our present laws
relating to revenue the industries and interests which have been encouraged
by such laws, and in which our citizens have large investments, should not
be ruthlessly injured or destroyed. We should also deal with the subject in
such manner as to protect the interests of American labor, which is the
capital of our workingmen. Its stability and proper remuneration furnish
the most justifiable pretext for a protective policy.
Within these limitations a certain reduction should be made in our customs
revenue. The amount of such reduction having been determined, the inquiry
follows, Where can it best be remitted and what articles can best be
released from duty in the interest of our citizens?
I think the reduction should be made in the revenue derived from a tax upon
the imported necessaries of life. We thus directly lessen the cost of
living in every family of the land and release to the people in every
humble home a larger measure of the rewards of frugal industry.
During the year ended November 1, 1885, 145 national banks were organized,
with an aggregate capital of $16,938,000, and circulating notes have been
issued to them amounting to $4,274,910. The whole number of these banks in
existence on the day above mentioned was 2,727.
The very limited amount of circulating notes issued by our national banks,
compared with the amount the law permits them to issue upon a deposit of
bonds for their redemption, indicates that the volume of our circulating
medium may be largely increased through this instrumentality.
Nothing more important than the present condition of our currency and
coinage can claim your attention.
Since February, 1878, the Government has, under the compulsory provisions
of law, purchased silver bullion and coined the same at the rate of more
than $2,000,000 every month. By this process up to the present date
215,759,431 silver dollars have been coined.
A reasonable appreciation of a delegation of power to the General
Government would limit its exercise, without express restrictive words, to
the people's needs and the requirements of the public welfare.
Upon this theory the authority to "coin money" given to Congress by the
Constitution, if it permits the purchase by the Government of bullion for
coinage in any event, does not justify such purchase and coinage to an
extent beyond the amount needed for a sufficient circulating medium.
The desire to utilize the silver product of the country should not lead to
a misuse or the perversion of this power.
The necessity for such an addition to the silver currency of the nation as
is compelled by the silver-coinage act is negatived by the fact that up to
the present time only about 50,000,000 of the silver dollars so coined have
actually found their way into circulation, leaving more than 165,000,000 in
the possession of the Government, the custody of which has entailed a
considerable expense for the construction of vaults for it deposit. Against
this latter amount there are outstanding silver certificates amounting to
about $93,000,000.
Every month two millions of gold in the public Treasury are paid our for
two millions or more of silver dollars, to be added to the idle mass
already accumulated.
If continued long enough, this operation will result in the substitution of
silver for all the gold the Government owns applicable to its general
purposes. It will not do to rely upon the customs receipts of the
Government to make good this drain of gold, because the silver thus coined
having been made legal tender for all debts and dues, public and private,
at times during the last six months 58 per cent of the receipts for duties
has been in silver or silver certificates, while the average within that
period has been 20 per cent. The proportion of silver and its certificates
received by the Government will probably increase as time goes on, for the
reason that the nearer the period approaches when it will be obliged to
offer silver in payment of its obligations the greater inducement there
will be to hoard gold against depreciation in the value of silver or for
the purpose of speculating.
This hoarding of gold has already begun.
When the time comes that gold has been withdrawn from circulation, then
will be apparent the difference between the real value of the silver dollar
and a dollar in gold, and the two coins will part company. Gold, still the
standard of value and necessary in our dealings with other countries, will
be at a premium over silver; banks which have substituted gold for the
deposits of their customers may pay them with silver bought with such gold,
thus making a handsome profit; rich speculators will sell their hoarded
gold to their neighbors who need it to liquidate their foreign debts, at a
ruinous premium over silver, and the laboring men and women of the land,
most defenseless of all, will find that the dollar received for the wage of
their toil has sadly shrunk in its purchasing power. It may be said that
the latter result will be but temporary, and that ultimately the price of
labor will be adjusted to the change; but even if this takes place the
wage-worker can not possibly gain, but must inevitably lose, since the
price he is compelled to pay for his living will not only be measured in a
coin heavily depreciated and fluctuating and uncertain in its value, but
this uncertainty in the value of the purchasing medium will be made the
pretext for an advance in prices beyond that justified by actual
depreciation.
The words uttered in 1834 by Daniel Webster in the Senate of the United
States are true to-day: The very man of all others who has the deepest
interest in a sound currency, and who suffers most by mischievous
legislation in money matters, is the man who earns his daily bread by his
daily toil. The most distinguished advocate of bimetallism, discussing our
silver coinage, has lately written: No American citizen's hand has yet felt
the sensation of cheapness, either in receiving or expending the silver-act
dollars. And those who live by labor or legitimate trade never will feel
that sensation of cheapness. However plenty silver dollars may become, they
will not be distributed as gifts among the people; and if the laboring man
should receive four depreciated dollars where he now receives but two, he
will pay in the depreciated coin more than double the price he now pays for
all the necessaries and comforts of life.
Those who do not fear any disastrous consequences arising from the
continued compulsory coinage of silver as now directed by law, and who
suppose that the addition to the currency of the country intended as its
result will be a public benefit, are reminded that history demonstrates
that the point is easily reached in the attempt to float at the same time
two sorts of money of different excellence when the better will cease to be
in general circulation. The hoarding of gold which has already taken place
indicates that we shall not escape the usual experience in such cases. So
if this silver coinage be continued we may reasonably expect that gold and
its equivalent will abandon the field of circulation to silver alone. This
of course must produce a severe contraction of our circulating medium,
instead of adding to it.
It will not be disputed that any attempt on the part of the Government to
cause the circulation of silver dollars worth 80 cents side by side with
gold dollars worth 100 cents, even within the limit that legislation does
not run counter to the laws of trade, to be successful must be seconded by
the confidence of the people that both coins will retain the same
purchasing power and be interchangeable at will. A special effort has been
made by the Secretary of the Treasury to increase the amount of our silver
coin in circulation; but the fact that a large share of the limited amount
thus put out has soon returned to the public Treasury in payment of duties
leads to the belief that the people do not now desire to keep it in hand,
and this, with the evident disposition to hoard gold, gives rise to the
suspicion that there already exists a lack of confidence among the people
touching our financial processes. There is certainly not enough silver now
in circulation to cause uneasiness, and the whole amount coined and now on
hand might after a time be absorbed by the people without apprehension; but
it is the ceaseless stream that threatens to overflow the land which causes
fear and uncertainty.
What has been thus far submitted upon this subject relates almost entirely
to considerations of a home nature, unconnected with the bearing which the
policies of other nations have upon the question. But it is perfectly
apparent that a line of action in regard to our currency can not wisely be
settled upon or persisted in without considering the attitude on the
subject of other countries with whom we maintain intercourse through
commerce, trade, and travel. An acknowledgment of this fact is found in the
act by virtue of which our silver is compulsorily coined. It provides
that--The President shall invite the governments of the countries
composing the Latin Union, so called, and of such other European nations as
he may deem advisable, to join the United States in a conference to adopt a
common ratio between gold and silver for the purpose of establishing
internationally the use of bimetallic money and securing fixity of relative
value between those metals. This conference absolutely failed, and a
similar fate has awaited all subsequent efforts in the same direction. And
still we continue our coinage of silver at a ratio different from that of
any other nation. The most vital part of the silver-coinage act remains
inoperative and unexecuted, and without an ally or friend we battle upon
the silver field in an illogical and losing contest.
To give full effect to the design of Congress on this subject I have made
careful and earnest endeavor since the adjournment of the last Congress.
To this end I delegated a gentleman well instructed in fiscal science to
proceed to the financial centers of Europe and, in conjunction with our
ministers to England, France, and Germany, to obtain a full knowledge of
the attitude and intent of those governments in respect of the
establishment of such an international ratio as would procure free coinage
of both metals at the mints of those countries and our own. By my direction
our consul-general at Paris has given close attention to the proceedings of
the congress of the Latin Union, in order to indicate our interest in its
objects and report its action.
It may be said in brief, as the result of these efforts, that the attitude
of the leading powers remains substantially unchanged since the monetary
conference of 1881, nor is it to be questioned that the views of these
governments are in each instance supported by the weight of public
opinion.
The steps thus taken have therefore only more fully demonstrated the
uselessness of further attempts at present to arrive at any agreement on
the subject with other nations.
In the meantime we are accumulating silver coin, based upon our own
peculiar ratio, to such an extent, and assuming so heavy a burden to be
provided for in any international negotiations, as will render us an
undesirable party to any future monetary conference of nations.
It is a significant fact that four of the five countries composing the
Latin Union mentioned in our coinage act, embarrassed with their silver
currency, have just completed an agreement among themselves that no more
silver shall be coined by their respective Governments and that such as has
been already coined and in circulation shall be redeemed in gold by the
country of its coinage. The resort to this expedient by these countries may
well arrest the attention of those who suppose that we can succeed without
shock or injury in the attempt to circulate upon its merits all the silver
we may coin under the provisions of our silver-coinage act.
The condition in which our Treasury may be placed by a persistence in our
present course is a matter of concern to every patriotic citizen who does
not desire his Government to pay in silver such of its obligations as
should be paid in gold. Nor should our condition be such as to oblige us,
in a prudent management of our affairs, to discontinue the calling in and
payment of interest-bearing obligations which we have the right now to
discharge, and thus avoid the payment of further interest thereon.
The so-called debtor class, for whose benefit the continued compulsory
coinage of silver is insisted upon, are not dishonest because they are in
debt, and they should not be suspected of a desire to jeopardize the
financial safety of the country in order that they may cancel their present
debts by paying the same in depreciated dollars. Nor should it be forgotten
that it is not the rich nor the money lender alone that must submit to such
a readjustment, enforced by the Government and their debtors. The pittance
of the widow and the orphan and the incomes of helpless beneficiaries of
all kinds would be disastrously reduced. The depositors in savings banks
and in other institutions which hold in trust the savings of the poor, when
their little accumulations are scaled down to meet the new order of things,
would in their distress painfully realize the delusion of the promise made
to them that plentiful money would improve their condition.
We have now on hand all the silver dollars necessary 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 anytime
apparent, their coinage may be renewed.
That disaster has not already overtaken 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 question. Capital timidly shrinks from
trade, and investors are unwilling to take the chance of the questionable
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 strongly for a safe and stable
currency as the vast army of the unemployed.
I recommend the suspension of the compulsory coinage of silver dollars,
directed by the law passed in February, 1878.
The Steamboat-Inspection Service on the 30th day of June, 1885, was
composed of 140 persons, including officers, clerks, and messengers. The
expenses of the service over the receipts were $138,822.22 during the
fiscal year. The special inspection of foreign steam vessels, organized
under a law passed in 1882, was maintained during the year at an expense of
$36,641.63. Since the close of the fiscal year reductions have been made in
the force employed which will result in a saving during the current year of
$17,000 without affecting the efficiency of the service.
The Supervising Surgeon-General reports that during the fiscal year 41,714
patients have received relief through the Marine-Hospital Service, of whom
12,803 were treated in hospitals and 28,911 at the dispensaries.
Active and effective efforts have been made through the medium of this
service to protect the country against an invasion of cholera, which has
prevailed in Spain and France, and the smallpox, which recently broke out
in Canada.
The most gratifying results have attended the operations of the Life Saving
Service during the last fiscal year. The observance of the provision of law
requiring the appointment of the force employed in this service to be made
"solely with reference to their fitness, and without reference to their
political or party affiliation," has secured the result which may
confidently be expected in any branch of public employment where such a
rule is applied. As a consequence, this service is composed of men well
qualified for the performance of their dangerous and exceptionally
important duties.
The number of stations in commission at the close of the year was 203. The
number of disasters to vessels and craft of all kinds within their field of
action was 371. The number of persons endangered in such disasters was
2,439, of whom 2,428 were saved and only 11 lost. Other lives which were
imperiled, though not by disasters to shipping, were also rescued, and a
large amount of property was saved through the aid of this service. The
cost of its maintenance during the year was $828,474.43.
The work of the Coast and Geodetic Survey was during the last fiscal year
carried on within the boundaries and off the coasts of thirty-two States,
two Territories, and the District of Columbia. In July last certain
irregularities were found to exist in the management of this Bureau, which
led to a prompt investigation of its methods. The abuses which were brought
to light by this examination and the reckless disregard of duty and the
interests of the Government developed on the part of some of those
connected with the service made a change of superintendency and a few of
its other officers necessary. Since the Bureau has been in new hands an
introduction of economies and the application of business methods have
produced an important saving to the Government and a promise of more useful
results.
This service has never been regulated by anything but the most indefinite
legal enactments and the most unsatisfactory rules. It was many years ago
sanctioned apparently for a purpose regarded as temporary and related to a
survey of our coast. Having gained a place in the appropriations made by
Congress, it has gradually taken to itself powers and objects not
contemplated in its creation and extended its operations until it sadly
needs legislative attention.
So far as a further survey of our coast is concerned, there seems to be a
propriety in transferring that work to the Navy Department. The other
duties now in charge of this establishment, if they can not be profitably
attached to some existing Department or other bureau, should be prosecuted
under a law exactly defining their scope and purpose, and with a careful
discrimination between the scientific inquiries which may properly be
assumed by the Government and those which should be undertaken by State
authority or by individual enterprise.
It is hoped that the report of the Congressional committee heretofore
appointed to investigate this and other like matters will aid in the
accomplishment of proper legislation on this subject.
The report of the Secretary of War is herewith submitted. The attention of
Congress is invited to the detailed account which it contains of the
administration of his Department, and his recommendations and suggestions
for the improvement of the service.
The Army consisted, at the date of the last consolidated returns, of 2,154
officers and 24,705 enlisted men.
The expenses of the Departments for the fiscal year ended June, 30, 1885,
including $13,164,394.60 for public works and river and harbor
improvements, were $45,850,999.54.
Besides the troops which were dispatched in pursuit of the small band of
Indians who left their reservation in Arizona and committed murders and
outrages, two regiments of cavalry and one of infantry were sent last July
to the Indian Territory to prevent an outbreak which seemed imminent. They
remained to aid, if necessary, in the expulsion of intruders upon the
reservation, who seemed to have caused the discontent among the Indians,
but the Executive proclamation warning them to remove was complied with
without their interference.
Troops were also sent to Rock Springs, in Wyoming Territory, after the
massacre of Chinese there, to prevent further disturbance, and afterwards
to Seattle, in Washington Territory, to avert a threatened attack upon
Chinese laborers and domestic violence there. In both cases the mere
presence of the troops had the desired effect.
It appears that the number of desertions has diminished, but that during
the last fiscal year they numbered 2,927; and one instance is given by the
Lieutenant-General of six desertions by the same recruit. I am convinced
that this number of desertions can be much diminished by better discipline
and treatment; but the punishment should be increased for repeated
offenses.
These desertions might also be reduced by lessening the term of first
enlistments, thus allowing a discontented recruit to contemplate a nearer
discharge and the Army a profitable riddance. After one term of service a
reenlistment would be quite apt to secure a contented recruit and a good
soldier.
The Acting Judge-Advocate-General reports that the number of trials by
general courts-martial during the year was 2,328, and that 11,851 trials
took place before garrison and regimental courts-martial. The suggestion
that probably more than half the Army have been tried for offenses, great
and small, in one year may well arrest attention. Of course many of these
trials before garrison and regimental courts-martial were for offenses
almost frivolous, and there should, I think, be a way devised to dispose of
these in a more summary and less inconvenient manner than by
court-martial.
If some of the proceedings of courts-martial which I have had occasion to
examine present the ideas of justice which generally prevail in these
tribunals, I am satisfied that they should be much reformed if the honor
and the honesty of the Army and Navy are by their instrumentality to be
vindicated and protected.
The Board on Fortifications or other defenses, appointed in pursuance of
the provisions of the act of Congress approved March 3, 1885, will in a
short time present their report, and it is hoped that this may greatly aid
the legislation so necessary to remedy the present defenseless condition of
our seacoasts.
The work of the Signal Service has been prosecuted during the last year
with results of increasing benefit to the country. The field of instruction
has been enlarged with a view of adding to its usefulness. The number of
stations in operation June 30, 1885, was 489. Telegraphic reports are
received daily from 160 stations. Reports are also received from 25
Canadian stations, 375 volunteer observers, 52 army surgeons at military
posts, and 333 foreign stations. The expense of the service during the
fiscal year, after deducting receipts from military telegraph lines, was
$792,592.97. In view of the fact referred to by the Secretary of War, that
the work of this service ordinarily is of a scientific nature, and the
further fact that it is assuming larger proportions constantly and becoming
more and more unsuited to the fixed rules which must govern the Army, I am
inclined to agree with him in the opinion that it should be separately
established. If this is done, the scope and extent of its operations
should, as nearly as possible, be definitely prescribed by law and always
capable of exact ascertainment.
The Military Academy at West Point is reported as being in a high state of
efficiency and well equipped for the satisfactory accomplishment of the
purposes of its maintenance.