Financial topics were uppermost in interest during the years immediately succeeding 1890.
The demand for the free and unlimited coinage of silver increased in the Southern
and Western portions of the country.
Between 1891 and 1892 the expenditures increased and the receipts decreased.
Part of the silver was coined, and the rest accumulated in the treasury vaults.
The silver question, and, with it, the whole financial problem, was suddenly brought prominently to the front in 1893.
On June 26 of that year the British
government closed the Indian
mints to the free coinage of silver.
As this important silver market was thus barred, the effect was to accelerate the fall in the price of that metal.
At this date the value of the silver dollar was about 60 cents, and it fell below that point.
The ratio of gold to silver, which in 1873 was 15+, was in 1886 20, and in 1893 25 1/2.
The amount of gold in the country was greatly decreased during the same period.
The gold reserve in the treasury, which had been above the $100,000,000 limit, fell in August, 1893, to $96,000,000; stood Sept. 30 at $93,000,000, and Jan. 13, 1894, had fallen to $74,000,000. Many business failures occurred during the summer.
The iron trade was depressed, various cotton and woollen mills closed in New England
and the Middle States
, and stocks suffered.
Within the first eight months of the year , 560 State and private banks and 155 national banks (mostly of small dimensions) failed.
The great majority of these bank failures were in the region west of the Mississippi River
This section, especially the States intimately connected with the mining and smelting of silver, felt the “hard times” keenly.
The general closing of silvermines in Colorado
was attended with much suffering, and considerable bitterness was displayed.
At least 15,000 miners became idle, and many men out of work came eastward, in some cases taking forcible possession of freight-trains.
Meanwhile in the East
in midsummer an extraordinary stringency of money was developed.
At one time in New York the premium on $1,000 in small bills reached $25; many business establishments were hard pressed to meet the payments of their employees; checks and clearing-house certificates played for a short time a remarkable part.
The premium on currency disappeared, however, in September, although money continued to be scarce.
One of the features of the commercial trouble of 1893 was the number of large railroad systems forced into the hands of receivers.
In this number were included the Erie
; Reading; Northern Pacific
, and Santa Fe
; and New York and New England
As the forced purchase of silver was generally recognized as one cause of the disturbances, attention was called to the repeal of the silver purchase act of 1890, and President Cleveland
summoned a special session of the Fifty-third Congress to consider the matter.
Congress assembled Aug. 7; on Aug. 28 the House
passed the Wilson
bill, which went to the Senate; in the form of the Voorhees repeal bill the measure passed the Senate by a vote of 43 to 32, Oct. 30; nearly all the “repealers” were from the East and North.
On Nov. 1 it passed the House
by a vote of 193 to 94, and was promptly signed by the President
After passing this act, which repealed the purchasing clause of what was known as the Sherman
bill of 1890, Congress adjourned.
The actual condition of the national treasury on Jan. 12, 1894, was thus set
forth in a letter of Secretary Carlisle
: Assets—Gold, $74,108,149; silver dollars and bullion, $8,092,287; fractional silver coin
, $12,133,903; United States
notes, $5,031,327; treasury notes of 1890, $2,476,000; national bank notes, $14,026,735; minor coin, $988,625; deposits in banks, $15,470,863; total cash assets, $132,327,889. Liabilities—Bank-note 5 per cent. fund, $7,198,219; outstanding checks and drafts, $5,653,917; disbursing officers' balances, $28,176,149; post-office department account, $3,897,741; undistributed assets of failed national banks, $1,927,727; District of Columbia account, $142,613; total agency account, $46,996,366; gold reserve, $74,108,149; net balance, $11,223,374. Total liabilities, $132,327,889. The average monthly deficiency in the last half of 1893 was shown to be about $7,000,000. The estimated falling-off in revenue with other causes swelled the expected deficiency to a formidable amount.
To meet the rapid fall in the gold reserve, Secretary Carlisle
, on Jan. 17, 1894, issued a circular, offering for public subscription an issue of $50,000,000 of bonds, “redeemable in coin at the pleasure of the government after ten years . . . and bearing interest . . . at the rate of 5 per cent.” The minimum premium was fixed at 117.223, thus making the issue equivalent to a 3 per cent. bond.
issued the call by virtue of an act of 1875; but his authority was challenged by the House
judiciary committee Jan. 26, 1894.
In spite of this issue of bonds the treasury reserve soon fell below the mark again, and on Nov. 13 of the same year a second issue of $50,000,000 worth of bonds was made.
They were all given to a syndicate of bankers at a bid of 117.077.
So rapid was the drain on the treasury, however, that on Feb. 8, 1895, the government signed a contract with the Belmont-Morgan
syndicate of New York to provide for the treasury 3,500,000 ounces of standard gold coin
, amounting to $62,315,000. Payment was made to the syndicate in 4 per cent. bonds.
The syndicate was also pledged to help retain all the gold in the treasury.
The business depression still continued, however, and on Jan. 6, 1896, the government advertised a sale of $100,000,000 in bonds.
It was at first planned to sell the entire issue to the Belmont-Morgan
syndicate, but the proposition caused such a popular outcry that the public was allowed to bid for the bonds, and the $100,000,000 was subscribed more than five times over.
The treasury received over $6,000,000 more than if the sale had been made to the syndicate.
This successful sale seemed to restore the confidence of the nation, and the gold reserve in the treasury soon passed the $100,000,000 limit.
In striking contrast with the special report of Secretary Carlisle
in 1894 was the annual report of Secretary Gage
for the fiscal year ending June 30, 1900.
In comparing these reports it should be borne in mind that a period of remarkable prosperity set in soon after the Presidential election in 1896; that the war with Spain
placed on the national treasury an unexpected burden; that the revenues of the government were increased by a special bill (1898) to meet the extraordinary disbursements; and that the foreign trade of the country advanced to an unprecedented volume.
The main features of the treasury report for June 30, 1900, were as follows:
Receipts and expenditures.
The revenues of the government from all sources for the fiscal year ended June 30, 1900, were:
|Profits on coinage, bullion deposits, etc||9,992,374.09|
|District of Columbia||4,008,722.27|
|Fees—consular, letters patent and land||3,291,716.68|
|Sales of public lands||2,836,882.98|
|Tax on national banks||1,998,554.00|
|Navy pension, navy hospital, clothing, and deposit funds||1,621,558.52|
|Sales of Indian lands||1,384,663.49|
|Payment of interest by Pacific railways||1,173,466.43|
|Sales of government property||779,522.78|
|Customs fees, fines, penalties, etc||675,706.95|
|Deposits for surveying public lands||273,247.19|
|Sales of ordnance material||257,265.56|
|Soldiers' Home, permanent fund||247,926.62|
|Tax on seal skins and rent of seal islands||225,676.47|
Receipts and expenditures.—Continued.
|License fees, Territory of Alaska||$157,234.94|
|Trust funds, Department of State||152,794.56|
|Depredations on public lands||76,307.58|
|Sales of lands and buildings||3,842,737.68|
|Part payment Central Pacific Railroad indebtedness||3,338,016.49|
|Dividend received for account of Kansas Pacific Railway||821,897.70|
The expenditures for the same period were:
|Civil establishment, including foreign intercourse, public buildings, collecting the revenues, District of Columbia, and other miscellaneous expenses||$98,542,411.37|
|Military establishment, including rivers and harbors, forts, arsenals, seacoast defences, and expenses of the war with Spain and in the Philippines||134,774,767.78|
|Naval establishment, including construction of new vessels, machinery, armament, equipment, improvement at navy-yards, and expenses of the war with Spain and in the Philippines||55,953,077.72|
|Interest on the public debt||40,160,333.27|
|Deficiency in postal revenues||7,230,778.79|
|Showing a surplus of||$79,527,060.18|
Other receipts of the Treasury, including amounts received from the Pacific
railways from subscription to the 3 per cent. bonds authorized in June, 1898, and other bonds, were $115,410. The total amount of securities redeemed under the operations of the sinking fund were $56,544,556. The most important items in the redemptions were the bonds purchased to the amount of $19,300,650, and the premium in converted bonds amounting in all to $30,773,552. Total receipts for the fiscal year exceeded those of the preceding year by $58,613,426, while expenditures showed a decrease of $117,358,388.
The coinage executed during the fiscal year was:
The revenues of the government for the fiscal year ending June 30, 1901, were thus estimated upon the basis of existing laws:
|Total estimated revenues||$687,773,253.92|
The expenditures for the same period were estimated as follows:
|Interest on the public debt||32,000,000.00|
|Total estimated expenditures||$607,773,253.92|
|Or a surplus of||$80,000,000.00|
further estimated that, upon the basis of existing laws, the revenues of the government for the fiscal year ending June 30, 1902, would be:
|From internal revenue||310,000,000.00|
|From miscellaneous sources||35,000,000.00|
|From postal service||116,633,042.00|
|Total estimated revenues||$716,633,042.00|
The estimates of appropriations required for the same period, as submitted by the several executive departments and offices, were $690,374,804.24, showing an estimated surplus of $26,258,237.76.
For further details of national finances see Banks, National
; debt, National