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ISSUE A N D SALE OF

BONDS.

SPEECH
OF

HON. ARTHUR P. GORMAN,
OF

MARYLAND,

HT THE

SENATE OF THE UNITED STATES,

WEDNESDAY, JANUARY 3 1 , 1894.




WASHINGTON.
1894.




Issue and Sale of'Bonfls,
SPEECH
Off

HON. A B T H U R P. GORMAN,
OF

MARYLAND,

I?F THE SENATE OP THE UNITED STATES,
Wednesday, January 31,1894a
The Senate having under consideration the resolution submitted by Mr.
S t e w a r t in reference to the issue and sale of toonds by the Secretary of
the T r e a s u r y -

Mr. GORMAN said:
Mr, P R E S I D E N T ; I do not intend to enter into the general
question involved in the resolution offered by the Senator from
Nevada as to the right of the Secretary of the Treasury to issue
find dispose of the hoods and apply the proceeds, as has beeix
done in the past, to the general expenditures of the Treasury.
Under the peculiar conditions in which we find ourselves I think
it is unwise and impolitic to raise that question at this tijne.
The right of the Secretary of the Treasury under the act of 1875
to issue any number of bonds that, in the exercise of his discretion, he may think necessary for the purposes provided for in
that act, nobody, I think, in either House will question.
That there is a necessity at this time for prompt relief for
the Treasury is undeniable, I had believed that the Secretary
pf the Treasury was not authorized to sell bonds and apply the
proceeds to any other purpose than that provided for in the act
Of 1875. I had supposed until a year and a half ago that that
question was disposed of; that is, that there would be no occasion
and no attempt to reimburse the Treasury by the sale of bonds,
Mr. President, in this discussion the Senator from Ohio [Mr.
SHERMAN], whom we all regard highly, and whose views have
been accepted by the country in the past as being those of an
authority upon financial questions, has stepped beyond the ques^
tion raised oy the resolution of the Senator from Nevada. He
does not, it is true, say that the Secretary of the Treasury can
apply the proceeds of the bonds to any other purpose except
that provided for in the act of 1875f He patriotically stands
upon this floor and announces his readiness to support the pres^
qnt Administration, the President and the Secretary of the
Treasury, in the proposition to sell bonds. He is amazed and
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3




4

astonished that no gentleman on this side of the Chamber has
risen to the defense of the action of the executive branch of the
Government. He says, as I would say, and as every Senator on
this floor would say, that if it was a question of maintaining the
honor and integrity of the Government, although there might
be question as to the power of the Secretary of the Treasury to
issue the bonds, we would all stand by him, and Congress would
ratify the act, if it became necessary, as it has done in cases in
the past, where the life of the nation and the honor and the
credit of the Government were at stake.
But the Senator from Ohio dropped his patriotism and sought
to make the impression upon the Senate and upon the country
that the necessity for this act of the Secretary of the Treasury,
which he indorses in full, is due to the attitude which the Democratic party occupies upon the question of the revenue laws, the
reform of which is now being considered. I will not do the Senator from Ohio any injustice, but will read his exact statement.
[At this point theJtionorable Senator was interrupted by the
expiration of the morning hour, and unanimous consent was
given that he might proceed.]
Mr. HOAR. I desire to put a question to the honorable Senator from Maryland, as he has been interrupted, which he will
answer at such time in his remarks as he sees fit.
Why is there non introduced on his side of the Chamber, what
could be drawn up in three minutes, a joint resolution or a measure giving the proper authority to the "Secretary of the Treasury,
and have our patriotism tested by that? I think he would be
gratified by the result of the vote on this side of the Chamber.
Instead of leaving this unconstitutional and illegal method go
on, as I think it is, and as the Senator from Maryland may agree,
it is—he has certainly expressed an opinion that it is a doubtful
question, at least—why not have Congress at once take its reresponsibility and do its duty? W e will all stand by it.
Mr. GORMAN. As I proceed I hope to touch upon the question propounded by the honorable Senator from Massachusetts.
I was proceeding, Mr. President, without the slightest intention of doing the honorable Senator from Ohio any injustice, to
call attention to the very extraordinary statement in his speech
of yesterday; giving him (I see him in the Chamber now) full
credit for his expressed desire to stand by the Administration
and uphold them in the action they have taken, yet that distinguished Senator, while declaring on page 1627 of the R E C O R D of
yesterday's proceedings, that " it is plainly manifest by the law
that this money was set aside for the purpose aforesaid," that is
by the act of 1875, proceeded to say:
W h a t w a s that purpose? T o enable the Secretary of the Treasury t o retire the notes when they were presented. That is the only purpose declared
in the act, and the act expressly provides that the m o n e y shall be applied t o
these purposes. That itself ought to be sufficient t o create a special fund.
It is n o t necessary t o segregate a particular fund f r o m the great mass in the
Treasury.

The Senator from Ohio, therefore, agrees with all the declarations that were made in the debate upon this floor when the
measure was originally considered—those made by the lat^distSnguished Senator from Delaware, Mr. Bayard, and the Sen^
1063




ator from Iowa [Mr. ALLISON], as well as those made by the
Senator from Ohio himself.
When the proviso to the twelfth section of the act of 1882 was
being considered in this Chamber, which provided that the
minimum amount to be held as a reserve fund should be $100,000,000, the honorable Senator from Iowa said:
Mr. ALLISON. AS t o the s u g g e s t i o n m a d e b y the Senator f r o m D e l a w a r e
that w e o u g h t t o increase the s u m b e y o n d 8100,000,000,1 think the S e n a t o r ,
a f t e r a little reflection, w i l l see that it is w h o l l y unnecessary. I n the first
place, the t o t a l of o u r g r e e n b a c k circulation is $346,000,000, less the a m o u n t s
t h a t h a v e been destroyed inevitably f r o m 1862 t o 1882, c o v e r i n g a period of
t w e n t y years. I venture the p r e d i c t i o n to-day that there is n o t in circulation—and b y circulation I m e a n n o t o n l y w h a t passes f r o m hand t o h a n d
a m o n g the people, b u t include the reserves of national banks—much a b o v e
5300,000,000 of g r e e n b a c k n o t e s ; c e r t a i n l y n o t to e x c e e d $320,000,000. S o t h a t
there is an a m p l e reserve i n this $100,000,000 f o r that p u r p o s e . T h e l a w of
1875 a u t h o r i z e d the S e c r e t a r y of the T r e a s u r y t o dispose of b o n d s in h i s disc r e t i o n t o create this reserve fund, and under that a c t the S e c r e t a r y of t h e
T r e a s u r y did dispose of 195,000,000. A m I c o r r e c t in that ?
Mr. SHERMAN. Y e s , sir.
Mr. ALLISON. That, w i t h t h e surplus i n the T r e a s u r y , under the l a w of
1875, constitutes the reserve fund, w h a t e v e r i t m a y be. S o that b e y o n d the
$95,000,000 there is a variable f u n d . If there is a surplus b e y o n d that of $50,000,000, then that is the reserve f u n d . T h u s f a r there has been n o absolute
definition of w h a t the reserve f u n d shall a m o u n t to.
Mr. BAYARD. B u t it c a n n o t be t o o emphatically stated and repeated that
that g o l d w a s b o u g h t w i t h b o n d s of the "united States f o r o n e p u r p o s e , and
o n e p u r p o s e o n l y . I t w a s to p r o c u r e and t o m a i n t a i n r e s u m p t i o n ; and if i t
b e used f o r a n y t h i n g else, it fs a p e r v e r s i o n of the f u n d and a breach of the
trust.
Mr. ALLISON. T h e Senator f r o m Delaware and m y s e l f d o n o t differ i n that
regard. H e d o e s n o t need t o i m p r e s s it u p o n m e that that is a r e s e r v e f u n d .
I believe it i s as sacred a f u n d as h e believes it is. B u t the a m e n d m e n t of the
S e n a t o r f r o m R h o d e Island a d d s n e a r l y $5,000,000 to that reserve fund. T h e
a m o u n t of b o n d s sold f o r the p u r p o s e o f s e c u r i n g this f u n d w a s o n l y $95,000.000, a n d n o w this a m e n d m e n t p r o p o s e s t o add $5,000,000 t o that, s o that
t h e sacred f u n d of w h i c h the S e n a t o r f r o m Delaware speaks is m a d e m o r e
sacred b y the a m e n d m e n t suggested b y the S e n a t o r f r o m R h o d e Island, because he a d d s $5,000,000.

But, Mr. President, early in 1892 public attention was brought
to the fact that there was no reserve fund set aside, either in
cash or on the books of the Treasury, and that all the proceeds
from the sale of bonds for redemption purposes were merged in
the general cash; therefore, when Secretary Carlisle, on January 1, found his cash balances approaching the danger line, he
proposed the sale of fifty millions of bonds.
'Mr. President, I understand that there is no desire or attempt
to conceal the purpose of the proposed loan. The proceeds of
the sale of the bonds will go into the general fund of the Treasury, to be used, as they have been in the past and are now being
used, to redeem the Government notes and provide for current
expenses.
Mr. SHERMAN. The Senator from Maryland is certainly
mistaken. That fund has never been reduced below $100,000,000,
asfixedby the law of 1882. Ithas never been reduced one dollar,
or if it had been it would have been arrested at any moment. It was
never done until the present Administration came into power.
I do not wish to interrupt the Senator from Maryland, but let
me say that if the Democratic party or the present Administration, which has now the control of all the departments of the
Government, should bring to us a bill providing a proper way
to meet the deficiencies in the revenue under the existing circumstances, we would consider it as a matter of course. In what
1063




6
I said yesterday I expressly stated that 1 did not care to enter
into the question how to raise money to meet the deficiencies In
the current receipts; and what I say now is that the fund which
has been set apart has been invaded for the first time. It Was
incumbent upon the administration of the Government both /in
Congress and in the executive branch to bring some measure
forward to meet that deficiency, and I should be very willing to>
consider it favorably if I could do so.
Mr. GORMAN. Mr. President,! regret exceedingly that the
distinguished Senator from Ohio has practically repeated to-day
his statement of yesterday. What was that statement? What
did the Senator from Ohio mean to convey to the Senate and to
the country? That this issue of bonds which he indorses, and
which he upholds the Administration for issuing, is because of,
and is rendered necessary by, the action of the Democratic party*
which proposes to remodel the revenue laws. That is the plain
English of his statement. I ask the Senator to correct me if I
have misstated his position. I understood him to charge distinctly that the present deficiency and necessity for the sale of
bonds would not have been created but for the assault, as he
terms it, of the Democratic party upon the revenue laws. He
intended, if I mistake him n(ot, to convey the idea that, if the
country had been controlled by his party under the McKinley
law and the rest of the revenue laws that are upon the statute
book, this sale of bonds would not have been necessary.
I quote from the honorable Senator's speech, found on page
1628 of the RECORD of January 30, and that I may do the Senator no injustice, I use his own language. After showing the do*
pleted condition of the Treasury, he said:
Now, sir. it is threatened by what? B y a want of confidence, by a fear that
w e / m a y not be able to maintain it. Sir, the responsibUity for this, what*
ever it is, does not rest with the party to Which I belong. I do not wish to
mention this at all in an invidious way. The Democratic patty, n o w in
power in all branches of the Government, believe that some different forin
of tariff law, Borne readjustment or change in the manner of levying duties
on imported goods, is a wise public policy* They therefore seek to break
down the law that stands, which, whatever else may be said Of it, at least
furnished up until the 1st of July last enough money to carry on the operations of the Government.

Mr. SHERMAN. I do believe, and I say it now upon reflection, that had it not been for the threat of the Democratic party
in its platform,wnot quite two years ago, to disturb the revenue
laws, and had it not oeen for the success of that party, which
threatened to reduce the income of the Government, this day
the McKinley act would have furnished ample means for the
support of the Government, and if the revenue had fallen short one
dollar of the amount necessary to meet the expenditures, the Hepublican party would have affirmed it at once, and performed
its duty by providing means to carry on the operations of the
Government. What I complain of in our friends on the other
aide is that they do not meet the responsibilities that are cast
upon them by the people of the United States.
Mr. GORMAN. Very good. That is the broad statement
made by the Senator from Ohio. It was made, as I said, after he
had gotten through with that portion of his statement which
was entirely patriotic, in which he informed the Senate that he
1063




7
was ready to stand forth as a champion of the present Administration upon the right of the Treasury to issue bonds.
Not only was he ready to do that, but he proclaimed to the
country that he was the one who would march out and fight its
battles, and he wondered that no Senator on this side of the
Chamber had raised his voice in defense of the Secretary of the
Treasury. I listened to that part of the Senator's speech with
prideand pleasure, but when he made the remainder of the statement, which he no sv repeats, I saw the partisan sinking the patriot
and making a statement as to facts which I believe, and which I
shall try^ to show, was not correct; The condition of the Treasury during the last year while the Republican party was in
possession of it would not justify the statement which the Senator from Ohio has made,
Mr. President, is it true or is it not true that the McKinley
law and other laws upon the statute book when this Congress
assembled produced revenue enough to meet the expenditures?
I maintain, sir, and I think I can show it,* that the Democratic
party, when it came into possession of this Government on the
4th of March last, came in to bear the burdens which the Senator from Ohio and his party had put upon the country, By
their revenue laws and by their expenditures they had depleted the Treasury, and the revenues were not sufficient to
meet the appropriations made by Congress!
The Senator from Ohio can not fail to remember that when his
party had the Presidency of the United States, and the Senator
from Ohio and Senators on the other side of the Chamber had
the Finance Committee of this body under their control, it was
notorious that the balances in the Treasury were not sufficient
to meet the demands upon it. The Senator from Ohio knows as
well as I do that but for the election going against his party in
1892 that party would have been compelled to ask a loan or an
increase of taxes. The Senator from Ohio knows as well as I do
that when the election went adverse to his party the then Republican Secretary of the Treasury came frankly—and it is no
secret—and said to members on both sides of theChamber: " T h e
revenue laws of the United States have not produced money
enough to meet the expenditures; you must come to my relief;
you must come to the relief of the Treasury. I have not made
any official recommendation as to the particular way in which
the relief shall come, but come it must."
Under the lead of the distinguished Senator from Ohio, in the
short session at the close of Mr. Harrison s Administration, the
Committee on Finance reported a provision for the sale of $50,^

000,000 of bonds. For what purposef The Senator from O < io says
that the sale of those bonds, which he and I voted for at that time, and
under a Republican Administration, was simply to keep up thereserve fund. To-day he says that that reserve fund was complete and
perfect at that time. If so, the Senator misled the country, misledthe
Senate, and misled us on this side, and the Secretary of the Treasury
deliberately misled us, unless he intended at that time, as the present
Secretary does, that the proceeds of the sales of the bond* should be
merged into the Treasury to relieve it from distress. H e had not

money enough in the Treasury on the* 4th of March, when this
Administration came into power—I mean good money—to meet
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the ordinary demands. A balance, it is true, appeared upon the
books, but it appeared in fractional currency, which could not be
used, and a national-bank-note redemption fund, which was a
charge upon the Treasury.
Mr. President, what are the facts? What are the figures? I
will give them to the Senator from Ohio from the books of the
Treasury. During the fiscal years 1886,1887, 1888, and 1889—
that was during the former Administration of Mr. Cleveland—
the excess of revenue over expenditures during those four years
was $396,530,040.47. The excess of revenues over expenditures
for 1890, 1891,1892, and 1893 was one hundred and twenty-four
million, one hundred and thirty-three thousand and odd dollars,
showing that in the four years before Mr. Harrison came into
power, and before the passage of the McKinley act, there was
$272,000,000 more of revenue than expenditure. It ran down
steadily during the four years of President Harrison's Administration.
«
Excess of revenues over expenditures.

1885
1887
1888
188 9

$93,956,588.56
103,471,0Q7.69
111,341,273.63
87,761,080.59
Total

396,530,040.47

1890
189 1
189 2
189 3

585,040,271.97
26,838,541.86
9,914,453.66
2,340,674.29
Total

124,133,941.88

Excess of revenues of 1886 to 1889, both inclusive, over period
from 1890 to 1893, both inclusive, $272,396,098.59. What made
this shortage? A decrease of revenue under laws passed by the
party of which the distinguished Senator from Ohio is the leader
and the champion upon this floor.
What further embarrassed the Treasury? No threat of the
Democratic party, Mr. President, as to a change of the revenue
laws. The Treasury was further embarrassed, impoverished,
and made almost bankrupt by the appropriations which were
made during the term when the Senator from Ohio and his party
had full possession of the Government in all of its branches—the
Presidency, the House of Representatives, and the Senate.
I say to Senators on the other side, while your laws which are
now upon the statue books reduced revenue, what did you do in
the way of expenditures? During the fiscal years 1886,1887,
18SS, and 1889 there was paid out of the Treasury $1,077,629,097,85. During the four years of Mr. Harrison's Administration, with a diminished revenue, the actual expenditures were
$1,412,315,901.08, making the excess of your payments during
those four years, as compared with the four years from 1886 to
1889, $334,686,803.23.
Year.

Total expenditures, including
premiums.
242,483,138.50
267,932,179.97
237,924,801.13
299,288,978.25

1886
1837
1883
1839

1,077,629,097.85
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Year.
1890
1891
1892
1893

Total expenditures, including
premiums.
$318,040,710.66
365,773,905.35
345,023,330.58
333,477,954.49
1,412,315,901.08

9
Excess of expenditures 1890,1891,1892,1893 over 1886,1887,
1888,1889, $334,686,803.23.
It is thus that the Treasury was brought to the verge of bankruptcy. It was seriously embarrassed before the Republican
party went out of power. It was no threat of a change of revenue laws which produced this condition of affairs in that great
Department of the Government.
Mr. HALE. Will the Senator allow me to interrupt him for
a moment?
Mr. GORMAN. With pleasure.
Mr. HALE. Does the Senator mean to convey the impression
or to make the statement that during the entire Administration of Gen. Harrison as President the Republican party was in
possession of all branches of the Government? Does he not call
to mind that in President Harrison's Administration the House
of Representatives, which is the appropriating ^ower, which
originates every appropriation bill, exceeded in its appropriations by some $15,000,000 the appropriations made during the
previous two years by a Republican House? If that be true,
what becomes of the Senator's statement and arraignment that
the Republican party is responsible for the large expenditures
during President Harrison's Administration?
Mr. GORMAN. I shall answer the Senator from Maine with
great pleasure. During the first two years of President Har*
rison's Administration the Senator's party had full and complete
possession of every branch of the Government. That was the
Fifty-first Congress. During that Congress the Republican
party passed the McKinley act, which resulted in a reduction of
the revenues of the Government.
Mr. ALDRICH. And so intended.
Mr. SHERMAN. A nd so intended. It was intended to largely
reduce the revenues.
Mr. GORMAN. "And so intended," the Senator from Ohio
says; and yet, during that very Congress, when there was no
place for the discussion of public affairs, except upon the floor
of the Senate, where bills could be considered or where there
was freedom of speech, with a tyrannical majority such as had
never been seen in this country (unless during a short time at
the beginning of the rebellion) the Republican party placed
upon the statute books not only revenue laws, but made appro-

priations, continuous in'their character, which could net be repealed
and have not been repealed up to this hour, w h i c h made it impos-

sible during the last Congress for the Democratic House of Representatives to reduce expenditures. The Senator, from Maine
is too manly an opponent not to take the responsibility for the
action of his party ^ particularly as we on this side are charged
to-day by the Senator from Ohio with being responsible for this
condition of affairs which the Republican party produced.
Mr. H A L E . As the Senator has reiterated the statement
which he made before in debate—that the increased expenditu r e s by the Democratic House of Representatives over those
made by its predecessor, which was Republican, was owing to
continuous appropriations which had been made by the Republican House—I want him, before he sits down, to particularize
and tell the Senate and the country, which will listen to him,
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10

what the appropriations were and what was their extent, because
it is a fact that that was the only answer which our Democratic
friends could make when we showed that they beat the billiondollar Congress in their own appropriations. That feature entered very little into, and is of the least account in, the appropriations which were made by the Democratic House of Representatives. It does not figure really as a significant part of the
calculation.
Mr. GORMAN. Mr. President, I am not going into the details of the acts of the Fifty-first Congress to-day. The Senator
and I will not disagree when it comes to figures. I have served
with him too long on the Appropriations Committee, and have
seen too much of him on this .floor not to know that he is a
manly and candid opponent; and I am amazed at his intimation
even of a desire to escape from responsibility during the time
when his party had control of the Government. It belongs to
them; they can not escape it before the country; nor shall we
escape the responsibility how that we have control. *
I grant to the Senator from Maine that there have been increased expenditures of the Government, growing from year to
year, and that will be so in respeot to certain of the usual expenditures of the Government. The increase of the Navy, the
maintenance of the Army, will go on under any Administration.
The pension list looks now as if it had almost reached the maximum of expenditure per annum; but it has grown, and it has
grown under legislation for which we were not responsible.
There can be no repeal of that legislation. No Senator, I take
it, on this side of the Chamber, however intense his feelings on
this subject may be, will disturb the pension list, now that you
have fixed it. We can not change the contracts which have
been made for the improvement of rivers and harbors; we can
not change the contracts made for the immense amount of steel
needed for the construction of our Navy and for the guns with
Which to mount ships. All those contracts were made previously to and continued during the last Congress, and I take it
they will be continued during the present Congress.
Mr. President, this is not a new statement for me to make in
the Senate. In the discussion of the naval appropriation bill
during the last Congress and before the Presidential election,
when I joined the Senator from Maine in voting for a proper
provision for* the construction of the Navy, I then stated that
the great bulk of the appropriation of $">00,000,000 for the year
could not b3 reduced; that it was impossible to reduce it, and I
do not believe now, with the legislation enacted by the Republican party, that we can make much of a reduction at this session of Congress: perhaps we may make some, but not a great
deal. The Republican party has, wisdly or unwisely, fixed the
great expenditures, which can not be touched now. As I said a
moment ago, the first is the pension list of $150,000,000 or $160,000,000.
But I come back to the Senator from Ohio, who charges the
Democratic party with being responsible for this depleted condition of the Treasury, and I show to him that the revenue laws
passed by a Republican Congress did not produce a sufficient
amount to maintain the Government while that party had pos1063




11
session of it. That parly left the Treasury bankrupt for us when
we came into power, and this is no time for them to twit the Democratic party with being responsible for a condition of affairs which
their party has brought abmit.

Mr. SHERMAN. Mr. President, if the Senator will pardon
mOj I will say to him that I will prove by the official figures,
furnished me from the Treasury Department within a few days*
that during the whole existence of the Republican Administration the McKinley law produced not only enough to carry on the
operations of the Government, but more than enough; for the
revenues under the McKinley law were increasing day by day,
and Would have been ample but for the unfortunate condition
produced by the change of the Administration and by the threatened policy of the Democratic party*
Mr* GORMAN. The Senator, of course, sticks to his text. I
am ready to answer that, for I have a statement made by the
Treasury Department from the books of that Department, showing the receipts, including everything which came from the
McKinley law, all the miscellaneous receipts of the Government from every source, and the expenditures and appropriations during the past three years; Let me see how the Senator
Will answer it.
The revenue from all sources for the years ending June 30j
1891, 1892, and 1893, when the Republican party was in powerj
was in 1891, $392,612,447.31; in 1892, $354,937,784.24; and in 1893,
$385,818,628.78, making the total receipts into the Treasury from
all sources for those three years $1,133,368,8^0.33.
The expenditures, the actual payments out of the Treasury,
the money which went out for all purposes during those same
years, were $1,094,275,190.42, which would give you a considerable balance.
Mr. President, what did Congress do? Congress made during those three years appropriations* including the sinking fundr
of $1,49(5,2 >5,741.68, showing that the Republican party appropriated while it had control of the Government, for all the purposes for which Congress has legislated, including the sinking
fund, more money than the revenue by $362,92o,881.35.
Mr. ALDRICH. Will the Senator allow me to ask him why
he includes the Binking fund?
Mr. GORMAN. I include the sinking fund because it is by
law charged against any revenue of the Treasury. It amounts
to about $49,000,000 per annum. Let me say to the Senator from
Rhode Island, that his party was compelled, because of the stress
of the Treasury during President Harrison's term, to let that
fund fall short $53,302,369.08.
Mr. ALDRICH. Will the Senator allow me to ask him another
question?
Mr. GORMAN. With pleasure.
Mr. ALDRICH. I ask if it is the purpose of the party for
whom the Senator speaks to provide revenue for the present and
the future which will not only meet the current expenses of the
Government but the sinking fund besides?
Mr. GORMAN. The Senator from Rhode Island wants to
draw me off to the discussion of another matter. I am now answering the Senator from Ohio, but I will say to the Senator
1063




12
from Rhode Island that I can. not conceive that there would be
insanity enough in any party in this country which had control
of the Government to deliberately enact laws which would not
produce revenue enough for the support of the Government and
resort to the sale of bonds to make up the deficit; but I say to
the Senator from Rhode Island that that is exactly what his
party did. I do not charge it with having done it deliberately,
but I say that Republican legislation produced that very result,
and hence the action of the Secretary of the Treasury to-day in
issuing bonds.

Mr. President, if the Congress, when the Republican party had possesion of the Government, disposed of three hundred and odd million
dollars more than the receipt, xind left upon the statute books provisions of law which required the Secretary of the Treasury to go on and
complete great public works, the erection of buildings, the improvement of rivers and harbors, and the construceion of the Ifavy—which
is the exact fact to-day—it does not lie in the mouth of the Senator
from Ohio to charge the Secretary of the Treasury or his party with
being derelict in duty when they attempt to maintain the credit of the
Governnient!

The Senator from Ohio, as I have before stated, came into the
Senate with a proposition authorizing the issue of $50,000,000 of
bonds before the Republican Administration expired. Why did
he do it? He did it because he knew that there was not sufficient money in the Treasury to meet its liabilities.
Mr. SHERMAN. Will the Senator allow me?
Mr. GORMAN. With pleasure.
Mr. SHERMAN. I must correct the Senator. The proposition
that I introduced had nothing to do with the question of the sufficiency of the revenue; it was only with the question of the funds
to maintain resumption, and here it is ingrafted into the law, ingrafted into the bill reported to the Senate. The money prod d e d by this act could only be used according to its express provisions—
i
T o tfee e x t e n t n e c e s s a r ^ t o carry-said resumptions-act i n t o t a i l effect, a n d
t o u s e the p r o c e e d s t h e r e o f f o r the p u r p o s e s p r o v i d e d i n said a c t a n d n o n e
other.

That is what it was.
Mr. GORMAN. The proposition as it first came from the Senator from Ohio did not have the words "and none other " in it.
As I remember, the distinguished Senator from Tennessee [Mr.
F A K K I S ] suggested that the words "and none other" should b e
added tp that clause.
Mr. SHERMAN. I see in the amendment reported from the
Committee on Finance the words "and none other." I do not
know but what those words were proposed in committee. Perhaps the Senator from Maryland is right about that.
Mr. VOORHEES. My recollection is very distinct that the
words " and none other " were not in the original bill proposed
by the Senator from Ohio.
"Mr, SHERMAN. It is printed in italics as an amendment reported from the Committee on Finance, and not in the bill as
originally introduced by me.
Mr. GORMAN. I shall not quibble about the small matter as
to what was the exact provision of the law. Be that as it may.
1063




13

But why did the Senator from Ohio come here with a proposition to issue $50,000,000 of bonds? Why was itf He knows as well
as I do that it was became the then 'Secretary of the Treasury,
Mr. Foster, proclaimed to everybody—it was not a secret—that Vie
Treasury was in distress, and that it was impossible for him to maintain the reserve fund and x>ay current demands unless he ivan given

that right. He had doubt as to his power of issuing- bonds under
the act of 1875. He further had doubt, as everybody had, of the
propriety of issuing a bond for a long term and bearing a high
rate of interest when Congress could authorize a bond of short
term and at a lower rate of interest.
If anyone will look back to the debate, which will be found in the
C O N G R E S S I O N A L RECORD, at page 2336, of the 1st day of March,
1893, it will be seen that the Senator from Ohio, in answer to a
question propounded by me, distinctly stated that his object in
offering the proposition as an amendment to the appropriation
bill was that there might be no doubt as to the power of the
Secretary of the Treasury to issue these bonds, and that it was
preferable to have a 3 per cent, rather than a 4 or 5 per cent
bond. That was and is a better method than to sell a long bond
at ahigher rate of interest, getting a large xjremium, as is now attempted. THe Senator from Ohio and all of us know, however,
that it was the distress of the Treasury which induced the Sen*
ate to place that proviso on the appropriation bill.

I violate no confidence when 1 say, Mr. President, as I did at the
time when we had this matter under discussion, that the then Secretary of the Treasury, going out ofpovoer with his party and our party
coming in, sought me, believing that 1 had the means of communicating with the'people who were coming into power, and said that the
statements in the speech to which 1 have referred, which I had made
on the floor of the Senate, were too true; that the Treasury was in a
condition where it must have relief, and that it would not do to have
any partisanship about it. The Secretary of the Treasury wanted to
aid the coming Administration; he desired to issue bonds by the authority of Congress if he could get it, and without the authority of
Congress if he could not get it I understand the bonds were prepared, and in fact v:ere ready to be issued, because the Secretary cf
the Treasury knew that the distress icas x>ressing; and it was as great,
then as it is now.

Mr. President, I ought to finish this statement by Baying that
when the Senate of the United States passed that provision, and
it was stated in another place which deals with appropriation
bills and other legislation that Mr. Carlisle, who was to be the
Secretary of the Treasury, did not want the authority to issue 3
per cent bonds, I rose in my place in the Senate, as the R E C O R D
will show, to relieve Mr. Foster of the statement that had been
made in the public prints, that he alone desired this authority,
and I stated, without fear of contradiction, that that provision
had been agreed to, not only by Mr. Foster, but by the incoming
Secretary of the Treasury, Mr. Carlisle, and that its dafeat elsewhere and the attempt to hold Mr. Foster alone responsible for
the desire to issue bonds was hot justified by the facts and was a
gross injustice to Mr. Foster and to the now chairman of the
Committee on Finance [Mr. VooRHEES], as well as to the Sena1063




14
tor from Ohio [Mr. SHERMAN], and all who supported the proposition.
I denounced it at the time, or rather I made the statement I
did to relieve Mr. Foster, because it was due him, He knew
the Treasury was in distress; he wanted it relieved before his
political opponent took charge. He was patriotic enough tq
come to us and tell us of the inside condition, and give us
what aid he could in relieving it. Now, the Senator from Ohio
comes around and twits the Democratic party with being responsible for the condition of affairs which was produced by his
party, and which we are to meet as best we can. But you can
not escape the responsibility of your own acts.
Mr. VOORHEES. I want to add one fact in aid of the statement of the Senator from Maryland, which ought to be stated
at this point. I had arranged to make a few remarks myself
Which would have embraced the statement which I now make.
Secretary Foster, a few days before the change of Administration, prior to the 4th day of last March, went before the Committee of Ways and Means of the House of Representatives,
which was charged with an inquiry upon this subject, and there
stated openly and to the world, though the statement is so soon
forgotten, that there was $50,000,001) more to be added to the
revenues for the proper administration of the Treasury Department. He recognized that during tne four years of Republican
ascendency in that body, from the Treasury having a surplus of
over $100,000,000, it had been reduced to a state of practical
bankruptcy, and he made his statement in black and white before a committee of the Republican party of the other branch of
Congress.
X am weary of this arraignment and I furnish this fact, although I had expected to use it myself at a later period in the
discussion.
Mr. GORMAN. I am indebted to the Senator from Indiana
for his statement.
Mr. President, I shall incorporate in my remarks the tables
which I have prepared, showing the condition of the Treasury
Irom July 1, 1884, to January 15, 1894, which I shall not weary
the Senate by reading, The details are given in the tables
t showing the exact balances for each of the periods named.
The tables referred to are as follows:
Condition of the Treasury from July 1, 1884, to January 15,1894.
Cash balance July 1,1884
Receipts to March 1, 1885,..^
Ordinary expenditures, July 1,1884, to March
1, 1885
^Redemption o| debt, July 1, 1884, to March 1,
1885
,

$161,396,577.18
214,732,476.33

$376,1?9, Q53.61

J73,399,196,29
44,681,704.64
218,080,900.93

Balance March 1 , 1 8 8 5 . . . . .
Cash in Treasury as per Debt Statement
1063




158,048,152.58
159,350,506.41
^

15
it 1884, to January 15,189*—Continued.

Condition of the treasury from My
Cash, balance, March 1,1885
Receipts to July 1, 1885

:

$159,356,500.41
109,340,743.88

Ordinary expenditures, March 1,1885, to July
1,1885.
Redemption ol debt, March 1, 1885, to July 1,
1885.

1,302,780.79

Balance July 1,1885
Cash in Treasury as per Debt Statement

178,602,643.23

.

Ordinary expenditures fiscal year 1886
Redemption of debt fiscal year 1886

178,602,643.23
336,439,727.06
242,483,138.50
44,543,993.36

Balance June 30, 1886

287,027,131.86

227,265,253.34

Cash balance July 1,1886
Receipts fiscal year 1887

227,265,253.34
371,403,277.66

Ordinary expenses fiscal year 1887
Redemption ol debt fiscal year 1887

267,932,179,97
127,918,468.15

.

Balance June 30,1887—

598,668,531.00
395,850,648.Ig
202,817,882.88

Cash in Treasury as per Debt Statement

206,323,950.21

Cash balance July 1,1887...
Receipts fisca; year 1888

206,323,950.21
379,266,074.76

Ordinary expenditures fiscal year 1888
Redemption of debt fiscal year 1888

267,924,801.13
74,813,563.05

_

Cash balance July 1,1888
Receipts to March 1,1889
Ordinary expenditures, July 1, 1888, to March
1,1889
Redemption of debt, July 1, 1888 to March 1,
1889

;

243,674,167.85
255,210,423.38

Balance July 1,1889
Cash in Treasury as per Debt Statement

498,884,591.23

222,434,625.25
92,869,643.85

315,304,269,10
183,580,322713

Cash in Treasury as per Debt Statement

Ordinary expenditures, March 1, 1889, to July
1,1889
Redemption of debt, March 1, 1889, to July 1,
1839
-

342,738,364.18
243,674,167.85

Balance March 1,1889

Cash balance March 1,1889
Receipts to July 1, 1889

'
585,590,024.07

242.851,660.79

Cash in Treasury as per Debt Statement




515,042,370.29

228,015,238.43

Cash in Treasury as per Debt Statement

1063

89,123,827.10

179,573,723. I
D

Cash balance July 1, 1885
Receipts fiscal year 1886,

Balance June 30,1888

$268,697,250,29

87,820,740.31

183,827,190.29
183,827,190.29
129,662,280.40

313,489,470.69

77,265,088.00
28,389,794.50

105,654,882.50
207,834,588.19
209,479,874.01

16
Condition of the Treasury from July 1,138 i, to January 15,1894—Continued.
Cash balance, July 1,1889
$209,479,874.01
Receipts, fiscal year 1890
403,080,982.63
8612,560,856.64
Ordinary expenditures, fiscal year 1890
318,040,710.66
Redemption of debt, fiscal year 1890
104,642,149.50
422,682,860.16
Balance June 30,1890

189,877,996.48

Cash in Treasury, as per Debt Statement
Cash balance, July 1,1890
Receipts, fiscal year 1891
National-bank fund deposited fiscal year 1891 „

189,993,104.20
189,993,101.20
392,612,447.31
63,571,690.75

Ordinary expenditures, fiscal year 1891
365,773,905.35
Redemption of debt, fiscal year 1891
100,989,306.37
National-bank notes redeemed fiscal year 1891. 23,553,298.50
Balance June 30, 1891
Cash in Treasury, as per Debt Statement

490,316,510.22
155,860,732.04
153,893,808.83

Cash balance July 1, 1891..*.
153,893,808.83
Receipts fiscal year 1892
354,937,784.24
National-bank fund deposited fiscal year 1892..
2,977,838.00
Ordinary expenditures, fiscal year 1892
345,023,330.58
Redemption of debt, fiscal year 1892
24,332,836.98
National-bank notes redeemed fiscal year 1892. 16,232,721.00
Balance June 30,1892
Cash In Treasury as per Debt Statement

385,588,888.56
126,220,542.51
126,692,377.03

Cash balance July 1, 1892
126,692,377.03
Receipts fiscal year 1893
385,818,628.78
National-bank fund deposited fiscal year, 1893.. 2, 937,580.00
Ordinary expenditures fiscal year 1893
383,477,954.49
Redemption of debt fiscal year 1893
687,003.00
National-bank notes redeemed fiscal year 1893. 9,037,651,50
Balance June 30,1893
Cash In Treasury as per Debt Statement

393,202,608.99
122,245,976.82
122,462,290.38

Cash balance July 1,1893
122,462,290.38
Receipts to January 15,1894
101,514,091.15
National-bank fund deposits t o January 15,1894. 7,266,592.50
——————— 294 242 974.03
Ordinary expenditures July 1,1893, t o January
'
15,1894
200,361,773.85
Redemption of debt July 1,1893, to January 15,
1894
178,320.00
National-bank notes redeemed July 1,1893, to
January 15,1894
3,777,016.50
—
204,317,110.35
Balance January 15,1894

89,925,863.68

Cash in Treasury as per Debt Statement
... „
91,923,250.68
Note.—Many deposits of cash Included in the cash balance In the Treasury
are not taken into the receipts of the Government until adjustments of accounts are reached, and the amounts finally covered into the Treasury by
warrants. This will explain the difference between the receipts and expen1033




17
ditures, as shown in this statement, and the cash balance as shown by the
Public Debt Statement.

1891
1892
1893

Revenues.

Expenditures.

Appropriations.

$392,612,447.31
354,937,784.24
385,818,628.78

Fiscal year ending June 30—

£365,773,905.35
345,023,330.58
383,477,954.49

$463,398,510.79
525,018,672.55
507,878,558.34

Total f o r three years
(including s i n k i n g
fund)
1,133,368,860.33 1,094,275,190.42 1,496,295.741.68
Excess of revenue over expenditures for three years
Appropriations in excess of revenue for three years

$39,093,669.91
362,926,881.35

The amount of debt annually required t o be Redeemed on the sinking fund
account aggregates about §49,000,000. The amount redeemed for the fund
f o r the fiscal year 1892 fell short of the requirement by 811,307,825.36, and for
the fiscal year 1893, $41,934,543.72, malting a total balance due the fund on June
30, 1893, of $53,302,369.08.
Public debt redeemed.
Fiscal y e a r Fiscal year—
188 1
$85,432,381.05
. . . $74,813,563.05
188 2
166,279,955.55
121,264,438.35
188 3
134,057,906.96
1390
104,642,149.50
188 4
99,861,684.50
189 1
*] 24,542,604.87
188 5
45,084,485.43
189 2
+40,565,557.98
1836
44,543,993.36
1893-...
t9,734,654.50
1887
127,918,468.15
•Includes 123,553,298.50 national-bank notes redeemed under act of July 14
1890.
+Includes 816,232,721 national-bank notes redeemed under act of July 14.
1890.
^itticludes 19,037,651.50 national-bank notes redeemed under act of July 14,

Mr. GORMAN. So much for the statement of the Senator
from Ohio.
The senior Senator from Colorado [Mr. TELLER], more generous than the Senator from Ohio, in his statement yesterday,
said he would not go so far as the Senator from Ohio" in charging that the threat of the change of the revenue laws had produced the present condition of affairs, but that there were other
causes; and the Senator is quite correct. There are other causes
which it is not wise or fair or manly to ignore. The Senator
from Colorado attributes largely the present depression to legislation in regard to silver throughout the world. I agree with
him that there is much in that statement, without going so far
as he does; but there are causes which have been increasing for
the past four years in the commercial conditions all over the
world, depression in trade, reduction in the prices of all commodities. which have made people economize, and which have
affected the revenues not only of the Government, but the incomes of individuals everywhere. There have been also failures in South America, and all over the world, which have
tended to produce this result
The Democratic party came into power at a time when the
Republican legislation which I have described, the extravagance, if you please, of their appropriations, and the conditions
which can not be controlled in this country, had brought about
this state of affairs. This is a time for patriotic men to come
1063

2




18
together and do the best they canto stay the sweep of this financial and business cyclone.
I remember, in the last session of the Fifty-second Congress,
when I said, in the discussion of the condition of the Treasury,
that before midsummer.the Secretary of the Treasury would be
compelled to issue bonds, the Senator from Colorado said that
probably the Senator from Maryland was not a prophet nor the
son of a prophet, but that no man would dare to issue bonds who
had the responsibility of the Treasury Department. The Senator
made that statement at a time when a Secretary of the Treasury
of his own party was about to do so; and now it has come to a
time, a few months later, when the present Secretary has been
compelled to do it.
Mr. TELLER. Will the Senator allow me to interrupt him?
Mr. GORMAN. Certainly.
Mr. TELLER. I recollect the statement, and I recollect very
well that I did declare that no Secretary of the Treasury would
issue bonds. W e were then speaking of bonds for current expenses.
Mr. GORMAN. That is what we are doing now.
Mr, TELLER. I confess that I was probably mistaken, because I think the Senator's statement that the former Secretary
of the Treasury did contemplate the issuance of honds is correct.
Mr.ALDRICH and Mr. HOAR. But not for current expenses.
Mr. TELLER. I think the former Secretary of the Treasury—and I think I shall not make a statement which can not
fortified—went so far as to have bonds prepared and printed for
the express purpose—no, I will not say " the express purpose
but for the purpose of issuing them for current funds, and I understand that the then President of the United States declined
to allow the issue to be made. I will admit that then, just aa
now, they were to be issued under the power given to increase
and maintain the reserve, as it is called; but that the purpose
was practically what it is to-day I have not the slightest doubt.
Mr. GORMAN. No Senator could have regretted more than
I did at the time that I deemed it my duty to make that prediction; but I had gone over the subject carefully and in no captious spirit, as Senators on the other side who have served on
committees with me well know, and with no desire to embarrass
their Administration then in power; but the figures and the
facts warranted the statement, and in my judgment made it
necessary that it should be made. 1 made it before the Presi?
dential election; I made it so that it might stand on the record a&
my opinion, no matter whether my party was successful or unsuccessful in the eleetion; I made it with the deliberate view and
purpose of sustaining Senators on the other side in the relief
of the Treasury if they should come into power, for I recall
no case during my service in the Senate when I have refused
to vote relief to the Treasury. I regretted, Mr. President, that
the -statement had to be made. X will not submit now to the
statement made on the other side, that we. because wo happened
to come into power on the 4th of March last, are responsible for
a condition which was known to all intelligent men long before
the election.
1083




19
M R , President) the Senator from Massachusetts [Mr. H O A R ]
comes a little more ingeniously, I think, than his colleagues on
the other side, and says: u Why have you not relieved the Treasury? You have the power on the oth >r side of the Chamber,
and why have you not by a joint resolution or a bill made a proposition to relieve the Treasury and put it in such shape that there
Can be no question as to the power of the Secretary of the Treasury to use the proceeds of the bonds for the ordinary purposes
of the Government? Why have you not done it? " That is a
fair criticism; it is a proper inquiry; but what were the conditions?
Mr, HOAR. Why do you not do it now?
Mr. GORMAN. We assembled here in extraordinary session,
ahd for one purpose were we called together. That one purpose
was the repeal of the so called Sherman law instantly and without conditions, The two parties Nvere divided upon the question. The public press and business men in the East in their great
distress—unwisely, as I personally believe, and as the result has
shown—attributed all their ills to the one law. Public expectation could not be met unless the repeal was made a nonpartisan
measure, as the President declared in his message; and why was
that? Because it was perfectly understood that no agreement
could be made by which any addition could be put to the law,
and it was run through under whip and spur and pressure from
the other side ahd from my own.
There were some of us who believed at that time and on that
bill was the only Opportunity to relieve the distressed condition of
the Treasury, a condition for which we were not especially re$ponsible; and I have seen sacrifices of opinion and a desire to
gomri together on both sides of the Chamber and give the relief
which that measure has been impotent to give, it having f died to
accomplish the good which was expected to come from it; but,
divided as we were, with the views which were then held, if you
please, at the other end of the Avenue, with a determination to
do nothing else in this Chamber on the part of Senators who
now criticise the Administration, we were compelled to go on
with the simple repeal, without authorizing the sale of bonds, as
I wished to do. I do not feel at liberty to say more at this time
upon that question.
Why, says the Senator from Massachusetts, do we not come
forth with the relief now? I am not the spokesman and do not
speak for any gentleman who occupies high executive position
in this Government; I only know from public statements that
the Secretary of the Treasury has firmly believed that, with the
repeal of the so-called Sherman law and the improvement in
business which everybody looked for and hoped for
Mr. COCKRELL and Mr. GEORGE. Not all of us.
Mr. PUGH, Not everybody, by a long way. A very small
crowd had that expectation. [Laughter.]
Mr. COCKRELL. The distinguished Senator from Ohio [Mr.
SHERMAN] is the leader of those who predicted that glorious
times would come in immediately after the passage of that measure.
Mr, GORMAN. I am very glad of the interruption. [Laughter.] What I meant to say was that the relief which it was be1063




20

lieved would come by all who were insisting upon the unconditional repeal of the Sherman law at that time, and nothing else—
I do not include my friend from Mississippi in that statement.
Mr. GEORGE. That is all right.
Mr. HALE. Speaking of measures of relief for the Treasury,
does the Senator from Maryland think that a bill providing for
raising revenues that reduces the present revenues of the Government something like $60,000,000 or more is a measure of relief?
Mr. GORMAN. Now, Mr. President, I want to finish with
my friend from Massachusetts first. I answered the Senator
from Rhode Island that identical question a moment ago, when
I had not the attention of the Senator from Maine. The Senator from Massachusetts asks, why do you not bring in a bill for
relief now? The disinclination, as I said, on the part of the Secretary of the Treasury to issue bonds or increase the interestbearing obligations of this Government was intense, as it is with
every Democrat, as it is with everybody who is looking to the
interest of the people of this country.
It is the last thing to do. It can not be justified, except to
maintain the honor and credit of the Government. To go at it
lightly would have been criminal on the part of the Secretary
of the Treasury. He does not make that recommendation in his
report which was submitted at the opening of the present session of Congress. He thought then that $28,000,000 would be
the outside deficit at the end of next June, and that it was not
necessary for Congress immediately to take up this question.
The President of the United States, as was well stated by the
Senator from Massachusetts, does not allude to that deficit. No
recommendation was made to Congress asking us to pass such a
bill until within the last fifteen or twenty days.
Mr. TELLER. Oh, no; none at all.
Mr. GORMAN. Not officially, if you please, but it has come,
as it frequently comes, to the members of the committees who
are charged with these subjects. The statementmade that Congress is responsible for delaying action in this matter is groundless. I do not hold the public press responsible for it, but I have
believed that there are certain interests and individuals who
have been most anxious to make it appear that Congress has
been derelict in its duty; that the obstruction in the Senate of
the United States has been one of the causes, and it is the inaction of Congress that has put us in this condition. I think that
suggestion, which is cultivated and encouraged, is untrue and
without a single fact to justify it, come from what quarter it
may.
Mr. HOAR. I should like to put my question to the Senator
again before he leaves this subject, for I do not think ho quite
appreciates it. I should like to put it perhaps in the form of a
duplicate question. First, does the Senator think it is lawful to
use the proceeds of these bonds to pay current expenses? Second, is not it better to get authority of law to do it than to do it
without law? Those are the two questions I should like to have
the Senator answer.
Mr. GORMAN. I said at the very opening that I did not in1063




21
tend to pro into that question, leaving it for the lawyers of the
body to discuss.
Mr. HOAR. Is not that a pretty practical question just now?
Mr. GORMAN. I have my own impression. I stated that my
belief had always been that the fund derived from the sale of
bonds could be used only as provided in the act of 1875.
Mr. HOAR. Very well. Then is it better
Mr. GORMAN. If the Senator will permit me to answer
him, we have inherited a great many things from the other side
of the Chamber, and among thom we have inherited this doctrine: Your Secretary of the Treasury and your Attorney-General, when you found yourselves in distress because of your improvident legislation, gave the opinion, and they acted upon it,
that the fund which had been derived from the sale of bonds
was mei'ged into the general fund of the Treasury, and you had
a right to use it. You proceeded upon that principle. So when
we came to administer the affairs of the Government, we found
this—I think, a vicious—precedent; but with the distressed condition of the Treasury we are not to be held responsible for following you in that matter. There was nothing else for us to do.
Mr. HOAR. Will the Senator pardon me?
Mr. GORMAN. Certainly.
Mr. HOAR. I think I know the opinion of the late Secretary
of the Treasury upon that subject, and that opinion was that he
had the right to issue bonds to maintain the redemption fund,
and, under the implication of the later act, the act of 1890, to
maintain the parity between gold and silver, and that he did not
think he had a right to do it for the general expenses of the
Government. I wish, so far as I know and believe, to deny the
statement that the late Secretary of the Treasury ever thought
he had the power to use, or contemplated using, money so raised
for current expenses. Look at his report.
Mr. GORiMAN. On the 28th of June, 1892, in answer to an inquiry by a coordinate branch of the Government as to the right
of the Secretary of the Treasury to use the proceeds of bonds for
any other purpose except the one specified—that is, for the redemption of these notes—the Democratic majority of that committee held that there was no such right. The minority took a
different view, not upon that particular point, it is true, but in
the course of that investigation. What did the then Secretary
of the Treasury, Mr. Charles Foster, say? His communication
in full will be found in Report No. 1780 of the House of Representatives, first session, Fifty-second Congress. He said in answer to Mr. G E O R G E W . R A Y and the other members of the minority of the committee:
The proceeds of the bonds sold as a b o v e were deposited in the Treasury,
and held in c o m m o n with the other funds of the Government. W h e n United
States notes have been redeemed, such redemptions have been made f r o m
the c o m m o n funds in the Treasury, there being n o special fund and n o separate account o n the books of the Treasurer of the moneysreceivedf r o m sales
of bonds f o r redemption purposes.

So there was not a separate account in the Treasury, and there
never was except during the prior Administration of Mr. Cleveland.
When Secretary Manninq made the entry, he had it Jcept separately;
but when his successor, Mr. Foster, came in and found that under
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your IIcKinley law, which you are responsible for, you did not furnish him money enough to pay the running expenses of the Government—that your appropriations exceeded the revenues—he changed
the system of accounts in the Treasury. He dropped that specific
account. He merged the funds from, the sale of bonds into the general
fund. He drew upon it as he desired, as the necessities required; and
he drew it so low that there was not a sufficient amount for all purposes of it left when the Democratic Administration came in.
Mr. ALDRICH. I think the Senator from Maryland does not
want to do an injustice to the late Secretary of the Treasury.
Mr. GORMAN. The Senator from Rhode Island knows perfectly well I do not. I may be in error, of course; none of us are
infallible.
Mr. ALDRICH. In the last report which Secretary Foster
sent to Congress he not only does not state what the Senator
from Maryland now thinks was his opinion, but he states—I read
from page 24 of his report—
A.s w i l l be seen b y t h e e s t i m a t e s s u b m i t t e d , the r e c e i p t s of the c u r r e n t and
the n e s t fiscal y e a r are n o t likely, if p r e s e n t c o n d i t i o n s continue, t o f a l l bel o w expenditures,

Mr. DOLPH. What is the date?
Mr. ALDRICH. December, 1892, the very last report which
the Secretary presented to Congress; and in this same report he
asked for an increase of the revenues, not for the purpose of paying the current expenses of the Government, but for the purpose of increasing the gold-reserve, which was then being rapidly
diminished,
Mr. VOORHEES. With the permission of tho Senator from
Maryland, as I interjected a point of history awhile ago, embracing the statement of Secretary Foster just before the Republican
party expired on the 4th of last March, I will now read the testimony given by the Secretary of the Treasury, Secretary Foster, before the Committee on Ways and Means.
Mr. COCICRELL. What is the time—February, 1893?
Mr. VOORHEES. This testimony was given in February,
1893.
Mr. COCKRELL. Long after that annual report was made?
Mr. VOORHEES. It was given February 25, 1893, eight or
nine days before the Republican party went out of power* Mr.
TURNER, who was on the Ways and Means Committee^ said to
Mr. Foster:
T a k i n g i n t o c o n s i d e r a t i o n all these c o n d i t i o n s w h i c h ydtt anticipate, w h a t
i n y o u r j u d g m e n t w o u l d be a f a i r c o n j e c t u r e of t h e c o n d i t i o n of the T r e a s u r y
at the end of the n e x t fiscal y e a r ?

The Democratic party had not touched the question.
S e c r e t a r y F o s t e r . I s h o u l d s a y the n e x t fiscal y e a r w o u l d s h o w a deficit.

Did we make that?

Mr. T u r n e r , Can y o u g i v e an a p p r o x i m a t e e s t i m a t e a c c o r d i n g t o all t h e
data accessible t o y o u ?
S e c r e t a r y F o s t e r . I w i l l o n l y say this, t h a t if I w a s t o h a v e t h e m a n a g e m e n t of the T r e a s u r y I s h o u l d insist u p o n a n i n c r e a s e of r e v e n u e t o t h e e x tent of $50,000,000.

Mr. A L D R I C H rose.
Mr. VOORHEES. Wait; I will get through in a moment.
Mr. T u r n e r . I n o r d e r t o m e e t t h o s e c o n d i t i o n s w h i c h y o u a n t i c i p a t e ?
S e c r e t a r y F o s x i a t . N o t o n l y t h o s e c o n d i t i o n s , b u t t h e g o l d c o n d i t i o n s aa
well.
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T h e CHAIRMAN. DO y o u r e m e m b e r w h a t y o u r e s t i m a t e s w e r e f o r 1894 u p o n
t h e i t e m of tin plate, and w h e t h e r that? w a s based u p o n a t a x estimate Qf 2.2
o r 1 c e n t a p o u n d , o r free?
S e c r e t a r y FOSTER. Of c o u r s e w e m a d e n o e s t i m a t e s u p o n items.

Then we find again:
M r . WtLBQtf, Did I understand y o u t o e x p r e s s a g e n e r a l o p i n i o n awbilQ
a g o that i n a d d i t i o n t o the present—

The present—
t h e p r e s e n t s o u r c e s of r e v e n u e that the r e v e n u e s of t h e T r e a s u r y Depart-?
m e n t o u g h t t o be advanced $50,000,000 m o r e a y e a r ?
S e c r e t a r y FOSTER. Y e s , sir.
M r . MgMn>LiN. W o u l d y o u m a k e t h a t f o r o n e y e a r o r a p e r m a n e n t inc r e a s e of r e v e n u e ?
S e c r e t a r y FOSTER. AS t h i n g s are g o i n g n o w a p e r m a n e n t revenue, f o r t w o
reasons, t .would increase the g o l d r e s e r v e at least $25,000,000 if I had the
inoney to d o it with.
Mr. TURNER. B u t y o u r a n s w e r j u s t n o w seemed t o c o n t e m p l a t e an a n n u a l
increase?
" S e c r e t a r y FOSTER. I t h i n k an a n n u a l i n c r e a s e of $50,000,000 w o u l d m a k e
t h e T r e a s u r y easy, and if I w e r e g o i n g t o m a n a g e i t I w o u l d w a n t t o h a v e i t .
Mr, PAYNE. Y o u d o n o t m e a n b y that t h a t there i s a n y d a n g e r of s u c h A
deficiency f o r 1894?
1 S e c r e t a r y FOSTER. NO.
Mr. PAYNE. I t w o u l d s i m p l y strengthen t h e T r e a s u r y ?
S e c r e t a r y FOSTER. A n d p u t it i n p r o p e r shape.
Mr. HOPKINS. I t is m o r e t o h o l d g o l d and silver a t a p a r i t y ?
S e c r e t a r y FOSTER. T h a t i s o n e thing.

That is all.
Mr. TELLER. What is the date of that testimonv?
Mr. VOORHEES. The 26th day of February.
Mr. TELLER. Eighteen hundred and ninety-three?
Mr. VOORHEES. Eighteen hundred and ninety-three; last
February. No other February has intervened since that I know
of.
Mr, TELLER. Before the Sherman act was repealed?
Mr. VOORHEES. Yes; it was before the eminent wisdom of
the Sherman act had manifested itself in a general breakdown
of the business of tho country.
Mr. ALDR1CH. Will my friend from Maryland allow me a
single word?
Mr. GORMAN. Certainly.
Mr, ALPRICH. The extracts which have been read by the
Senator from Indiana from the testimony given by the late Secretary of the Treasury before the Committee on Ways and
Means show that that gentleman was not only a good Secretary
of the Treasury, but also a good prophet. What were the existing conditions to' which the Secretary then alluded? They
were the.fact that the Democratic party had been placed back
in power by the people of this country, and it was known at that
time, and so stated by him, that thoy proposed to make a radical
change in the revenue policy of the Government.
Mr. VOORHEES, The Treasury was empty before that election took place.
Mr. ALDRICH. Oh, no; I beg the Senator's pardon.
Mr. VOORHEES. >res; that is what it was.
Mr; ALDRiCH. X beg the Senator's pardon. The Secretary
states in his report, to which I have alluded, that under existing conditions a reduction of the revenue would probably take
place, and he stated that on account of those conditions a de1063




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ficiency was probable, and he proposed to provide for it by the
action of Congress.
Mr. GORMAN. Now, Mr. President
Mr. HOAR. I should like, before the Senator from Maryland proceeds, to call attention to one point in connection with
the document which he read, to which I think he did not quite
do justice. I wish to read simply one extract from the report
of the minority of the committee to which the Senator alluded.
After discussing this general question they go on to say:
W e find nothing in the act of 1882 or any other act requiring the Secretary
of the Treasury to set apart or reserve and hold as sacred any fund f o r the
redemption of United States n o t e s —

Mr. GORMAN. The Senator is reading from the minority report?
Mr. H O A R . Yes, I know. I want to call attention to it. They
proceed—
except that he is restricted in the use of the proceeds of bonds sold t o the
redemption of such notes, and hence such proceeds are reserved, in a sense,
f o r this particular purpose and constitute the only fund reserved f o r redemption purposes under the resumption act, and this fund m a y he depleted
at-any time by ttie redemption of United States notes and m a y be increased
at any time b y the sale of bonds. W e find n o authority f o r setting apart and
holding as a special o r reserved fund any of the surplus revenues in the
Treasury not otherwise appropriated f o r the purpose of redeeming United
States notes when presented f o r redemption.

They were discussing there, and that is what the committee
was dealing with principally, the question whether the Secretary of the Treasury had authority to maintain the reserve fund
by the use of the general moneys in the Treasury. They say he
had not, but, on the one hand, he can only increase it by the
sale of bonds, and, on the other hand, he can only use the proceeds of the sale of bonds for that single purpose. Now, Mr.
Foster, in reply to a question asking the amount of the United
States bonds sold for resumption, and the proceeds thereof,
makes the following statement:
The proceeds of the bonds sold as above were deposited in the Treasury
and held in c o m m o n with the other funds of the Government. W h e n the
United States notes have been redeemed, such redemptions have been made
f r o m the c o m m o n funds in the Treasury, there being n o special fund and n o
separate account on the hooks of the Treasurer of the m o n e y s received f r o m
the sales of bonds f o r redemption purposes.

In other words, it is a mere question of bookkeeping. There
is nothing in the letter of the Secretary of the Treasury that indicates he differs from what the minority of the committee expressly affirm, that the proceeds of the bonds can only ba applied
for this purpose. It is a mere bookkeeping question, and nothing else.
Mr. GORMAN. It is more than a question of bookkeeping.
The bookkeeping was changed to meet the conditions of the Treasury,
as I have before stated, and as can be shown and will be shown by an
examination of the tables which I will print with my remarks showing the balances in the Treasury. Everybody knows that during
the last year of Mr. Foster's administration of that Department,
and during the whole of the present administration by Mr. Carlisle, they have been compelled to use that fund.
Mr. ALLISON. Will the Senator from Maryland allow me?
I should be glad to have the Senator in his statement (which I
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have no doubt he has fully made from the Treasury reports) show
just when and to what extent the Secretary of the Treasury
under a former Administration used what is known as the reserve
fund of $95,500,000. I should like to have the dates and the data.Mr. GORMAN. I have not that full statement. I can not
give the Senator from Iowa the information, but if the Senator
will examine
Mr. ALLISON. I venture the statement that it was never
done.
Mr. GORMAN. If the Senator will examine the balances of
the Treasury and the payments from day to day, remembering
the fact that this fund was kept in the general fund and that general fund was drawn upon constantly, deducting from the Treasury statements the small coin and the amount due to national
banks, he will find there was nothing left in the Treasury unless
they encroached upon this fund.
Now, take the statement of the present Secretary of the Treasury . What does he say? He says that on the 1st day of December,
1893—that is, last December—the actual net balance in the Treasury, after deducting the bank-note 5 per c*nt redemption fund,
outstanding drafts and checks, the disbursing officers' balances,
the agencies' accounts, and the gold reserve, the cash balance
was only $11,000,000—1 do not give the odd numbers—and of the
total amount held $12,000,000 was in subsidiary coin.
Mr. ALLISON. The gold reserve is deducted from that before we come to the $11,000,000.
Mr. GORMAN. Yes, but the Senator from Iowa must take
note of what is going on in the world. He knows that to meet
the payments that were absolutely necessary for pensions and
salaries and everything else they have been compelled to pay
out gold more than once in the last six months.
Mr. ALLISON. I am not quarreling with the Secretary of
the Treasury as respects what is being done. I understood the
Senator from Maryland to state that the Secretary of the Treasury, Mr. Carlisle, is simply doing now what was done before under a former Administration.
Mr. GORMAN. I do make that statement.
Mr. ALLISON. So far as I can remember, I do not know a
single instance where what is known as the reserve was drawn
upon prior to the 4th day of March, 1893, nor do I remember
that it was done until some time after Mr. Carlisle became Secretary of the Treasury.
Mr. GORMAN. As a matter of bookkeeping the Senator ia
right, but the moment that the Secretary of the Treasury, Mr.
Foster, changed the system of accounts from that put in force
by his predecessor, Mr. Manning, where this reserve fund was
set aside especially, where separate entry was made of the
subsidiary coin, where a separate entry was made of the amount
of national-bank notes that were put in for redemption—the
moment you changed that system of accounts and merged it into
one fund, you can not follow the encroachment; the only way you
can do it is by the balances.
The Senator from Iowa is perfectly well aware of the fact that
during Mr. Foster's administration of the Department you were
compelled to come to the relief of the Treasury Department by
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an act that ordinarily applied would he considered repudiation,
You provided in an appropriation bill that the notes sent in by
national banks for redemption, which became an important
charge on the Treasury, should go in and be used so as to tide
Mr. Foster over.
Mr. GEORGE. At? a trust fund?
Mr. GORMAN. As a trust fund.
Mr. COCKRELL, The amount was $55,000,GOO,
Mr. GORMAN. Fifty-five million dollars.
Mr. ALLISON, But that -vyas done not on an appropriation
billMr. GORMAN. It was done under an act,
Mr. ALLISON. It was done under what was known as the
Sherman law of 1890.
Mr. GORMAN- I am obliged to the Senator from Iowa, tov
correcting me. I stand corrected.
Mr. ALDRICH. Will the Senator from Maryland allow me
one question? Does the Senator mean to say that at any time
Erior to the 4th of March, 1893. the amount of gold color and gold
ullion in the Treasury held for the redemption of United States
notes ever fell below $100,000,000?
Mr. GORMAN. After the passage of the McKinley law and
the remodeling of the revenues, and you did it, ahd with the
appropriations extravagant or immense, as I haye shown, a der
ficit was loft in the Treasury between the 30th of June, 1892, and
the 1st of December, 1893. The election had gone against you.
your Secretary of the Treasury refused to make payments on account of everything that you had appropriated for that could be
postponed or delayed. -If it had been a private individual who
had done it he would have been thrown into bankruptcy, and if
the Democratic party had done it the Senator from Ohio would
have had it gibbeted as high as it was possible for human agency
to put it. You robbed Peter to pay Paul, You repudiated ^our
own appropriations. You left the Treasury without sufficient
balance for us to carry on the Government with.
What I complain about is that you seek to bold the Demo
cratic party responsible for your own acts. You should have manhood enough on the other side of the Chamber to adjnit ypur
own wrong, to admit that this is a question for relief of the
Treasury, and should not be determined by party lines. You
know that it is a condition brought about by circumstances be*
yond our control. I do not hold the Republican party responsible for it all. It would be unfair for me to do it. I do pot believe you Intended to bankrupt the Treasury when you passed
the McKinley law and remoyed the duty from sugar and otber
articles. I do not believe that any party would be guilty of ade?
liberate act of that 3ort. But the result is as I have stated it,
I think there are other conditions that made it impossible to
keep up the revenues. I attribute it in part to the reasons assigned by the Senator from Colorado [Mr. TELLER] and my
good.f riend from Nevada [Mr. STEWART]. I voted against them*
but I think they are in part right. I think it comes from causes
beyond this country; and hence in this time of distress where, in
my view, you have contributed so much to bring it about, ItiSJaO
time for you to taunt us because you made us bankrupt,
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The Sehtttor from Massachusetts asks: " W h y hot bring in
your measures how?" Mr. President, the emergency was too
great. The relief must come to the Treasury before an act
could be passed. For one, I believe that this spot where I stand,
this body of which I am a member, should ever be free from a gag
rule. I believe that debate must go on here, because I think
my country has been well served by having freedom of debate
here. I think there has beeh no time in the history of the
country where we have not been swift enough in doing everything that the honor of the country required. I know of no
act, I know of no omission, I know of no failure, where a clear
majority of this body wanted to pass a law, that it has not become a law in proper time.
I know that with the excitement which we have passed through
in the last few months—brought on, I think, injudiciously—for
which I disclaim the responsibility, the opportunity which I
would have embraced to take in this question that we are now
discussing, which could have been done, which ought to have
been done, would have been done if it had been met with a
proper response without regard to party. It could not be brought
up here now for discussion, with the embers still burning, with
the feelings engendered on both sides of the Chamber, and be
passed through without excitement and delay such as it is not
wise to have. With the Treasury bankrupt, to bring on a partisan discussion, to further cripple it and prevent its being furnished with money from any source, would have been worse than
anything that could have occurred.
Mr. President, it was the height of wisdom under the circumstances for the Secretary of the Treasury and my honored friend,
the chairman of the Committee on Finance on my left [Mr. VOORHEES] to postpone that question until it could be met with coolness, and with a determination to do only that which is right for
the country.
The Senator from Rhode Island says: u Yes, but you are proposing a law that will not give a remedy for the hereafter."
Let me say to that Senator that as he, as the spokesman of the
other side received the McKinley bill from another place,where
it cannot be considered in detail, and placed upon it five hundred amendments, practically making it a new bill (and it ought
to have been called the Aldrich bill in my judgment), and with
the further fact that he knows there never has been a tariff bill
enacted by Congress that was not in fact considered in its details and the bill practically made in this body, when the time
comes ,that we roach such a bill I have no doubt that, as the
Democrats have a slight majority here, a slim but possibly a
safe one, we shall do as our predecessors have done, we shall aid
the coordinate branch in making a revenue bill that will not
give advantages to a few, but broad enough and big enough and
sound enough to put into the Treasury a sufficient amount of
money to run the Government while we have control of it.
After we have passed through that stage, if we should fail by
mistake, by want of knowledge, or from whatever cause, to make
a bill that is not sufficient, I will be one of the first to rise in
my place and say that we made a mistake. If we do not suc1063




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ceed in passing such a bill, we will assume the responsibility of
our failure, and we will not seek to charge you with our error.
No, sir; I would say it was my party's fault, and you ought to be
manly enough to admit that now with reference to your own
tariff legislation. [Applause.]
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