period of about ten months, nearly $103,000,000 in gold were drawn from the Treasury. This made the second issue necessary, and upon that more than fifty-eight millions in gold was again realized. Between the date of this second issue and the present time, covering a period of only about two months, more than $69,000,000 in gold have been drawn from the Treasury. These large sums of gold were expended without any cancellation of Government obligations or in any permanent way benefiting our people or improving our pecuniary situation.

The financial events of the past year suggest facts and conditions which should certainly arrest attention.

More than $172,000,000 in gold have been drawn out of the Treasury during the year for the purpose of shipment abroad or hoarding at home.

While nearly $103,000,000 of this amount was drawn out during the first ten months of the year, a sum aggregating more than two-thirds of that amount, being about $69,000,000, was drawn out during the following two months, thus indicating a marked acceleration of the depleting process with the lapse of time.

The obligations upon which this gold has been drawn from the Treasury are still outstanding and are available for use in repeating the exhausting operation with shorter intervals as our perplexities accumulate.

Conditions are certainly supervening tending to make the bonds which may be issued to replenish our gold less useful for that purpose.

An adequate gold reserve is in all circumstances absolutely essential to the upholding of our public credit and to the maintenance of our high national character.

Our gold reserve has again reached such a stage of diminution as to require its speedy reenforcement.

The aggravations that must inevitably follow present conditions and methods will certainly lead to misfortune and loss, not only to our national credit and prosperity and to financial enterprise, but to those of our people who seek employment as a means of livelihood and to those whose only capital is their daily labor.

It will hardly do to say that a simple increase of revenue will cure our troubles. The apprehension now existing and constantly increasing as to our financial ability does not rest upon a calculation of our revenue. The time has passed when the eyes of investors abroad and our people at home were fixed upon the revenues of the Government. Changed conditions have attracted their attention to the gold of the Government. There need be no fear that we can not pay our current expenses with such money as we have. There is now in the Treasury a comfortable surplus of more than $63,000,000, but it is not in gold, and therefore does not meet our difficulty.

I can not see that differences of opinion concerning the extent to which silver ought to be coined or used in our currency should interfere with the counsels of those whose duty it is to rectify evils now apparent in our

financial situation. They have to consider the question of national credit and the consequences that will follow from its collapse. Whatever ideas may be insisted upon as to silver or bimetallism, a proper solution of the question now pressing upon us only requires a recognition of gold as well as silver and a concession of its importance, rightfully or wrongfully acquired, as a basis of national credit, a necessity in the honorable discharge of our obligations payable in gold, and a badge of solvency. I do not understand that the real friends of silver desire a condition that might follow inaction or neglect to appreciate the meaning of the present exigency if it should result in the entire banishment of gold from our financial and currency arrangements.

Besides the Treasury notes, which certainly should be paid in gold, amounting to nearly $500,000,000, there will fall due in 1904 one hundred millions of bonds issued during the last year, for which we have received gold, and in 1907 nearly six hundred millions of 4 per cent bonds issued in 1877. Shall the payment of these obligations in gold be repudiated? If they are to be paid in such a manner as the preservation of our national honor and national solvency demands, we should not destroy or even imperil our ability to supply ourselves with gold for that purpose.

While I am not unfriendly to silver and while I desire to see it recognized to such an extent as is consistent with financial safety and the preservation of national honor and credit, I am not willing to see gold entirely banished from our currency and finances. To avert such a consequence I believe thorough and radical remedial legislation should be promptly passed. I therefore beg the Congress to give the subject immediate attention.

In my opinion the Secretary of the Treasury should be authorized to issue bonds of the Government for the purpose of procuring and maintaining a sufficient gold reserve and the redemption and cancellation of the United States legal-tender notes and the Treasury notes issued for the purchase of silver under the law of July 14, 1890. We should be relieved from the humiliating process of issuing bonds to procure gold to be immediately and repeatedly drawn out on these obligations for purposes not related to the benefit of our Government or our people. The principal and interest of these bonds should be payable on their face in gold, because they should be sold only for gold or its representative, and because there would now probably be difficulty in favorably disposing of bonds not containing this stipulation. I suggest that the bonds be issued in denominations of twenty and fifty dollars and their multiples and that they bear interest at a rate not exceeding 3 per cent per annum. I do not see why they should not be payable fifty years from their date. We of the present generation have large amounts to pay if we meet our obligations, and long bonds are most salable. The Secretary of the Treasury might well be permitted at his discretion to receive on the sale of bonds

the legal-tender and Treasury notes to be retired, and of course when they are thus retired or redeemed in gold they should be canceled.

These bonds under existing laws could be deposited by national banks as security for circulation, and such banks should be allowed to issue circulation up to the face value of these or any other bonds so deposited, except bonds outstanding bearing only 2 per cent interest and which sell in the market at less than par. National banks should not be allowed to take out circulating notes of a less denomination than $10, and when such as are now outstanding reach the Treasury, except for redemption and retirement, they should be canceled and notes of the denomination of $10 and upward issued in their stead. Silver certificates of the denomination of $10 and upward should be replaced by certificates of the denominations under $10.

As a constant means for the maintenance of a reasonable supply of gold in the Treasury, our duties on imports should be paid in gold, allowing all other dues to the Government to be paid in any other form of money.

I believe all the provisions I have suggested should be embodied in our laws if we are to enjoy a complete reinstatement of a sound financial condition. They need not interfere with any currency scheme providing for the increase of the circulating medium through the agency of national or State banks that may commend itself to the Congress, since they can easily be adjusted to such a scheme. Objection has been made to the issuance of interest-bearing obligations for the purpose of retiring the noninterest-bearing legal-tender notes. In point of fact, however, these notes have burdened us with a large load of interest, and it is still accumulating. The aggregate interest on the original issue of bonds, the proceeds of which in gold constituted the reserve for the payment of these notes, amounted to $70,326,250 on January 1, 1895, and the annual charge for interest on these bonds and those issued for the same purpose during the last year will be $9, 145,000, dating from January 1, 1895.

While the cancellation of these notes would not relieve us from the obligations already incurred on their account, these figures are given by way of suggesting that their existence has not been free from interest charges and that the longer they are outstanding, judging from the experience of the last year, the more expensive they will become..

In conclusion I desire to frankly confess my reluctance to issuing more bonds in present circumstances and with no better results than have lately followed that course. I can not, however, refrain from adding to an assurance of my anxiety to cooperate with the present Congress in any reasonable measure of relief an expression of my determination to leave nothing undone which furnishes a hope for improving the situation or checking a suspicion of our disinclination or disability to meet with the strictest honor every national obligation.

GROVER CLEVELAND.

EXECUTIVE MANSION, January 30, 1895.

To the House of Representatives:

In compliance with a resolution of the House of Representatives of the 28th instant, the Senate concurring, I herewith return the bill (H. R. 6186) entitled "An act to pension Maria Davis."

GROVER CLEVELAND.

To the Senate of the United States:

EXECUTIVE MANSION, Washington, February 4, 1895.

In response to the resolution of the Senate dated December 6, 1894, requesting that copies of correspondence in regard to the claim of Antonio Maximo Mora against the Government of Spain exchanged since my last message to the Senate on the same subject, dated June 20, 1894,* be communicated to it if not incompatible with the public interests, I transmit herewith a report of the Secretary of State, inclosing copies of further correspondence exchanged between the Governments of the United States and Spain since the date of my last message to the Senate, December 11, 1894.† GROVER CLEVELAND.

To the House of Representatives:

EXECUTIVE MANSION, Washington, February 4, 1895.

In response to the resolution of the House of Representatives of the Ist instant, calling for certain information touching the recent insurrection in the Hawaiian Islands, I transmit herewith a report of the Secretary of State, with accompanying papers. GROVER CLEVELAND.

EXECUTIVE MANSION, February 5, 1895.

To the House of Representatives:

In compliance with a resolution of the House of Representatives of the 2d instant, the Senate concurring, I return herewith the bill (H.R.5377) entitled "An act granting a pension to Richard R. Knight."

To the Senate:

GROVER CLEVELAND.

EXECUTIVE MANSION, Washington, February 7, 1895.

I transmit herewith, in response to a resolution of the Senate of the 16th ultimo, a report from the Secretary of State, accompanied by copies of certain correspondence touching the enforcement of the provisions of the tariff act of 1894. GROVER CLEVELAND.

EXECUTIVE MANSION, February 8, 1895

To the Congress of the United States:

Since my recent communication to the Congress calling attention to our financial condition and suggesting legislation which I deemed essential to our national welfare and credit* the anxiety and apprehension then existing in business circles have continued.

As a precaution, therefore, against the failure of timely legislative aid through Congressional action, cautious preparations have been pending to employ to the best possible advantage, in default of better means, such Executive authority as may without additional legislation be exercised for the purpose of reenforcing and maintaining in our Treasury an adequate and safe gold reserve.

In the judgment of those especially charged with this responsibility the business situation is so critical and the legislative situation is so unpromising, with the omission thus far on the part of Congress to beneficially enlarge the powers of the Secretary of the Treasury in the premises, as to enjoin immediate Executive action with the facilities now at hand.

Therefore, in pursuance of section 3700 of the Revised Statutes, the details of an arrangement have this day been concluded with parties abundantly able to fulfill their undertaking whereby bonds of the United States authorized under the act of July 14, 1875, payable in coin thirty years after their date, with interest at the rate of 4 per cent per annum, to the amount of a little less than $62,400,000, are to be issued for the purchase of gold coin, amounting to a sum slightly in excess of $65,000,000, to be delivered to the Treasury of the United States, which sum added to the gold now held in our reserve will so restore such reserve as to make it amount to something more than $100,000,000. Such a premium is to be allowed to the Government upon the bonds as to fix the rate of interest upon the amount of gold realized at 334 per cent per annum. At least one-half of the gold to be obtained is to be supplied from abroad, which is a very important and favorable feature of the transaction.

The privilege is especially reserved to the Government to substitute at par within ten days from this date, in lieu of the 4 per cent coin bonds, other bonds in terms payable in gold and bearing only 3 per cent interest if the issue of the same should in the meantime be authorized by the Congress.

The arrangement thus completed, which after careful inquiry appears in present circumstances and considering all the objects desired to be the best attainable, develops such a difference in the estimation of investors between bonds made payable in coin and those specifically made payable in gold in favor of the latter as is represented by three-fourths of a cent in annual interest. In the agreement just concluded the annual saving

*See pp. 5993-5997.