It may be objected that the item of $93,440,000, interest at 4 per cent on the average amount of the free gold in the Treasury from January 1, 1879, to January 1, 1895, should be eliminated from the items of cost as not proper to be included therein. But even when this is deducted, there is yet an enormous direct money cost to the Government grow ing out of these issues which could have been lessened by the sum of $214,044,222 if the notes had been funded on January 1, 1879, into 30-year 4 per cent bonds of 1907. It may be still further objected that a part of the notes redeemed with the gold thus procured has been used to defray the expense of the Government, but this objection does not reach to the merit of the question, because none of this interest-bearing indebtedness would or could have been lawfully created if the United States notes and Treas ury notes had not been in circulation. The seat of difficulty has been the necessity of the maintenance of the gold reserve for current redemption, a difficulty which can not be obviated as long as the causes of it are in existence. EFFECT OF MAINTAINING TREASURY AND NATIONAL-BANK NOTES COMPARED. The argument as stated in favor of the continuance of Treasury notes is their assumed lack of cost to the public. That advanced against issues of national banks is that they burden the people and take from the people for private benefit. If the first argument is opposed by the facts, not less so is the second. The comparison could' not be more striking or the results upon the income of the Treasury more diametrically opposite. The course of the former has increased the rate of taxation necessary to meet the expenses of the General Government, while that of the latter has lessened it. This rate has been further lessened by other items of revenue gained to the Government directly from the national banks. REVENUE RECEIVED BY THE GOVERNMENT FROM NATIONAL BANKS FROM 1863 To OCTOBER 31, 1896. Tax on capital stock prior to March 3, 1883 Tax on deposits prior to March 3, 1883. Tax on circulation to June 30, 1896. Tax on circulation, July 1 to October 31, 1896, estimated. Total... From unredeemed circulation, two-fifths of 1 per cent of actual circulation outstanding on October 31, 1896 ($706,616,861) From taxation.... From unredeemed circulation Deduct expenses of Comptroller's Office, appropriated for by Congress to October 31, 1896... Total profit to Government.. $7,855, 887.74 60,940, 067. 16 79, 390, 680. 89 617, 225. 34 148, 803, 861. 13 2,826, 466.00 148, 803, 861. 13 2,826, 466.00 21,956, 621.85 173, 586, 948. 98 16, 147, 700.00 157, 439, 248.98 It thus appears that instead of loss resulting to the Government from the creation of the national banks, the direct money benefit to it therefrom has been $157,439,248.98, which could be further augmented by adding the saving made to the Treasury by having had annually the use of the five per cent redemption and lawful money fund kept by the banks for the current and ultimate redemption of their notes with it, amounting, on October 31 of the present year, to $26,951,641. The efforts in other countries have been directed toward divorcing the treasury department of governments from the bank-note function. That function has been given to corporations created for the purpose. It has followed that the duties of their treasury departments have been limited to the collection and expenditure of revenues and their regu lation, while the banks have issued promissory bank notes and both currently and ultimately redeemed them. The problem of maintaining a gold reserve to a certain amount has not vexed and harassed them, nor interfered with the conduct of the citizens' private business. The volume of the currency so issued has depended upon the needs of business as seen in many portions of such countries by institutions invested with the right to meet the local demand. It is not affected by change of political parties nor discussed as a matter to be decided by political affiliations. There is no state of affairs peculiar to the United States which makes it wise to employ different methods or to invoke different rules in the same line of conduct. It is equally certain that there is no exemption vouchsafed to this country from loss in violating the proven rules requisite to sound and prudent monetary and fiscal operations. The current credit instruments entering into the movements of finance, trade, and commerce ought all to be issued by the banks as needed, under government supervision, in order to insure uniformity and guard against loss. The responsibility for their redemption in gold coin should be wholly borne by the banks, and upon the banks should rest the duty of furnishing whatever gold is needed for domestic or foreign business purposes. In order to attain this end the credit currency of the government now outstanding should be redeemed in gold and retired, through funding or otherwise, as speedily as safety will permit, and the banks made to assume the rights and burdens which properly belong to them. The sound State and private banks prior to 1863 redeemed their own notes in gold and furnished all gold needed for domestic trade and to settle international balances. The national and other banks from the resumption of specie payments until 1890, when the government's credit currency was again enlarged and legislated upon, followed the same practice. The question is not one of ability on their part to meet such demand, but one of opportunity, freed from government competition and unrestricted by unrequired government control. It is respectfully submitted that legislation by Congress, based upon safe and prudent lines, having in view the gradual payment and cancellation of the credit currency now maintained by the Government and the issuance hereafter of all of such currency through the banks, with full responsibility therefor placed upon them, should be had at the very earliest practicable moment. The results which would follow such enactments would be beneficial, and neither would monopoly be created nor favor shown thereby. FOREIGN AND STATE BANKING SYSTEMS. In the report for 1895 appeared papers concerning the banking systems of the following countries: Belgium, Canada, Chile, China, Denmark, Ecuador, France, Germany, Greece, Guatemala, Haiti, Hawaii, Italy, Korea, Liberia, the Netherlands, Paraguay, Peru, Portugal, Russia, Salvador, Siam, Switzerland, Turkey, Uruguay, and Venezuela. They were prepared by representatives of this Government to countries to which accredited. It has been thought best to reprint these papers in the Appendix,' and to add others received since from the following countries, viz: Argentina, Austria, Bolivia, Brazil, British Columbia, Bulgaria, Colombia, Costa Rica, Dutch Guiana, Egypt, Great Britain, Japan, Jaya, Mexico, Newfoundland, Nicaragua, Persia, Roumania, Servia, and Sweden. In addition, through permission of the author, Mr. Charles A. Conant, extracts have been taken from his Modern Banks of Issue upon the banking systems maintained in the French colonies in America, British colonies in Latin America, Dutch Guiana, Java, Bulgaria, Servia, and Cuba. In view also of the fact that the edition of the report of 1895 has been exhausted, there is also reprinted the reports then published of the bank systems maintained in the various States and Territories and the local regulations pertaining thereto. NATIONAL-BANK ACT AND DIGEST OF BANK CASES. The report herewith submitted has also been enlarged by the em bodying in it of a revised edition of the National Bank Act and a carefully prepared digest of the decisions of the courts, both Federal and State, upon questions affecting the administration of the bank law. To this has been added a table of cases, arranged in alphabetical order. APPENDIX AND SECOND VOLUME. In the Appendix1 is also to be found the usual tables, together with added ones bearing upon the subjects of special investigation. In the second volume of the report will be found a detailed statement of the condition of all the national banks as shown by the report of condition on October 6, 1896, alphabetically arranged by States and properly indexed. CONCLUSION. The added work entailed by the investigations made and tabulated, together with an increase in correspondence, has largely fallen upon the force of employees in the Comptroller's office. It has been done without increasing the number thereof, and in a manner which warrants the renewing of the testimony heretofore given to each one's character and efficiency. The work done by the national-bank examiners and the receivers of failed national banks has been equally satisfactory, conscientious, and intelligent. James HEckels Comptroller of the Currency. The SPEAKER OF THE HOUSE OF REPRESENTATIVES. The Appendix and tables here referred to, which are omitted for want of space, will be found in the separate volume of the Comptroller's full report. (No. 4.) REPORT OF THE COMMISSIONER OF INTERNAL REVENUE. TREASURY DEPARTMENT, OFFICE COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., November 1, 1896. SIR: In conformity with the instructions contained in your letter of October 2, 1896, I have the honor to submit the following report of the operations of the Bureau of Internal Revenue for the fiscal year ended June 30, 1896, and also certain additional information relating to the work performed and receipts from the various sources of internal revenue during the months of July, August, and September of the current fiscal year: 1 The titles of the tables found at the close of the bound volume of this report are as follows: Table A, showing the receipts from each specific source of internal revenue and the amounts refunded in each collection district, State, and Territory of the United States for the fiscal year ended June 30, 1896. Table B, showing the number and value of stamps for special taxes, manufactured tobacco, snuff, cigars, cigarettes, distilled spirits, fortified sweet wine, fortified wine for export, fermented liquors, oleomargarine, export stamps for distilled spirits, playing cards, and opium manufac tured for smoking purposes; also the number of the different kinds of certificates of registry, with the number and value of documentary stamps used for validating unstamped instruments, issued to collectors of internal revenue during the fiscal year ended June 30, 1896. Table C, showing the percentages of receipts from the several general sources of internal revenue now taxable in each State and Territory of the United States to the aggregate receipts from the same sources, by fiscal years, from July 1, 1863, to June 30, 1896. Table D, showing the aggregate receipts of internal revenue in each collection district, State, and Territory of the United States, by fiscal years, from September 1, 1862, to June 30, 1896. Table E, showing the receipts from specific and general sources of internal revenue, by fiscal years, from September 1, 1862, to June 30, 1896. Table F, showing the ratio of receipts from specific sources of internal revenue to the aggregate receipts of the same, by fiscal years, from July 1, 1863, to June 30, 1896. Table G, showing the returns of distilled spirits, fermented liquors, manufactured tobacco, snuff, cigars, and cigarettes, under the several acts of legislation and by fiscal years, from September 1, 1862, to June 30, 1896; also statement of the production of distilled spirits and fermented liquors in the several States and Territories, by fiscal years, from July 1, 1877, to June 30, 1896. 508 The tables here referred to are omitted from this volume. Table H, showing the receipts from special taxes in the several States and Territories for the twelve months ended June 30, 1896. Table I. Abstract of reports of district attorneys concerning suits and prosecutions under the internal revenue laws during the fiscal year ended June 30, 1896. Table K. Abstract of seizures of property for violation of internalrevenue laws during the fiscal year ended June 30, 1896. Table L, showing the collections, expenses, and percentage cost of collection in the several collection districts during the fiscal years ended June 30, 1895 and 1896. COLLECTIONS FOR THE FISCAL YEAR ENDED JUNE 30, 1896. In my last annual report I estimated that the receipts from all sources of internal revenue for the fiscal year ended June 30, 1896, would aggregate $165,000,000. The actual receipts were $146,830,615.66, or $19,169,384.34 less than my estimate. From calculations based upon the receipts reported for the months of July, August, and September, 1896, and after giving due weight to the very general anticipation of material changes for the better in the business conditions of those industries which contribute to internalrevenue taxes, I estimate that the receipts from all sources of internal revenue for the current fiscal year will aggregate $150,000,000. Schedule of articles and occupations subject to tax under the internal-revenue laws of the United States in force November 1, 1896. |