of 1900, the last four years has shown a total balance in our favor of $1,980,000,000, which is more than five times the balance in our favor during 108 years, from 1790 to 1896.

"The revenues of the Post Office Department make a better showing this year than in any other of the present decade. The receipts aggre gate $102,287,458, and the expenditures $107,776,704, leaving a deficit to be supplied from the ordinary funds in the Treasury of $5,489,245. Last year the deficit was $6,610,000. It was $9,020,000 in 1898, and $11,411,000 in 1897.

"The excess of receipts over expenditures in the Treasury for the fiscal year 1900 amounts to $81,275,156, but this is the first surplus we have had in several years.

"The receipts from customs during the last year aggregate $233,857,958, which is an increase over the preceding year of $27,729,477. This substantial increase represents the normal operation of the Dingley tariff.

"The internal revenue receipts for the year stand at $296,299,388, which is an increase of $22,862,227 over the fiscal year of 1899.

"Miscellaneous receipts stand at $38,831,601, which is an increase of about $2,500,000 over the preceding year. Now, while all the revenues have been increasing substantially, expenditures have been decreasing.

"The present position of the Treasury is one of great strength. Of course, the $150,000,000 fund in gold coin and bullion reserved in the Division of Redemption, according to the terms of the new currency law, is intact. What we now call the general fund-that is, the money over and above the reserve requirements-makes an available cash balance of $151,717,167.

"The outlook of the Treasury financiering for the coming year is a prosperous one. Should the receipts continue at the present rate it is altogether likely that the new session of Congress will speadily undertake to repeal the war revenue act, or so much of the taxes levied under it as can be spared."

These figures giving results from two different tariff systems speak with more force than do many other arguments. They demonstrate the truth of President McKinley's assertion in 1892 that "Protection builds up; a revenue tariff tears down. Protection brings hope and

courage to the heart and home; free trade drives them from both. Free trade levels down, protection levels up."

The Democratic tariff bill leveled down the industrial conditions of this country to those of the old world where pauper labor is common. The Dingley tariff law leveled up these conditions to the American standard of independent labor. It justified the tariff plank in the Republican platform for this year which is as follows:

"We renew our faith in the policy of the protection to American labor. In that policy our industries have been established, diversified and maintained. By protecting the home market competition has been stimulated and production cheapened. Opportunity to the inventive genius of our people has been secured and wages in every department of labor maintained at high rates, higher now than ever before, and always distinguishing our working people in their better condition of life from those of any competing country."

The Democratic party has abandoned its free trade policy for this campaign, but it is an old heresy with which Mr. Bryan and his party are tainted, for they saw visions and dreamed dreams of prosperity through free trade before they began to dream of national wealth through the free coinage of silver, and were Mr. Bryan elected President with a Democratic Congress, he would be induced to try both experiments without regard to past experiences. It should be remembered that Mr. Bryan won his first notice as a free trade orator, and in the 52nd Congress he was as ardent and extravagant in his advocacy of free trade as he was four years ago in his advocacy of free coinage or as he is now in denouncing imperialism. Free trade was his paramount issue only six years ago, and as a member of the Ways and Means Committee he assisted in framing the Wilson-Gorman Tariff bill which brought upon this country its greatest commercial calamity.

CHAPTER VIII.

THE NICARAGUA CANAL-A GREAT INTERNATIONAL WATERWAY.

The wonderful voyage of the Oregon from San Francisco to Santiago and the anxiety of the American people over the magnificent battleship during that perilous run around the South American coast, was in large measure responsible for the new position taken by the United States Government in reference to an isthmian canal. The nation, as it waited for the news from each point at which the battleship touched, and grew anxious over the perils to which it was subjected, not only from the dangers of the seas through which it had to pass, but also from the Spanish torpedo flotilla which sought its destruction, determined that there must be a shorter route for our navy between the Atlantic and Pacific coast lines which it must defend. The isthmian canal must be under American control. This is now the American policy. The government will construct the canal and control it, but the policy of neutralization will be adopted as has always been contemplated, because this is the policy governing every great international waterway in the world where it passes through territory not actually a part of the nation in control. The President and Congress favor the policy of having the government construct and own the Nicaraguan canal. The President has done his part to enable the government to do this. He has negotiated a new treaty with Great Britain by which the latter power agrees to withdraw from the partnership entered into by the two governments in the Clayton-Bulwer treaty. This partnership has been in existence for fifty years. By the Clayton-Bulwer treaty the governments of the United. States and Great Britain declared that neither the one nor the other would ever obtain or maintain for itself the exclusive control over a ship canal across the isthmus, agreeing that neither would ever erect or maintain any fortifications commanding the same, or in the vicinity thereof, or occupy, or fortify, or colonize, or assume, or exercise any domain over Nicaragua, Costa Rica, Mosquito coast, or any part of Central America; nor would either make use of any protection which either afforded, or of any alliance which either had or might have to or with any State or people to secure such control. The Clayton-Bulwer

treaty was, in short, a contract that any canal connecting the Atlantic and Pacific oceans and across Central America should be under the joint control of the two nations. It was a partnership, and it has been the greatest barrier to the construction of an isthmian canal for the past half century.

The present administration has taken the first important step to dissolve that partnership and enable the United States to construct and control an isthmian canal connecting the two oceans, and forming a waterway which will not only shorten the route of water transportation between the Atlantic and Pacific coasts of this country, but will establish a highway for our navy in its work of protecting the coast, and make unnecessary such another marvelous feat as the voyage of the battleship Oregon from San Francisco around Cape Horn to join her sister ships in repelling a foreign enemy.

The new treaty negotiated by Secretary Hay agrees that the canal may be constructed under the auspices of the Government of the United States, either directly at its own cost or by gift or loan of money to individuals or corporation, or through subscription to or purchase of stock or shares, and that subject to the convention this government shall have and enjoy all the rights incident to such construction, as well as the exclusive right of providing for the regulation and management of the canal.

This Hay-Pauncefote treaty does just what this government has been trying to find a way to do for many years. It disposes of the ClaytonBulwer treaty so far as that instrument obligated the United States to go into partnership with Great Britain in the control of the isthmian canal. This new treaty has not been ratified by the Senate. It requires two-thirds to ratify a treaty. The Republicans have not the necessary votes. The treaty would have been in danger of defeat if submitted to a vote at any time during the last session by reason of Democratic opposition.

A ship canal connecting the Atlantic and Pacific oceans has been the dream of navigators for many years, and that dream has become a practical necessity from a commercial and strategic point of view. It is about to be realized. The House of Representatives has passed a bill to provide for the acquisition of the territory necessary to the control of such a canal, and for its construction at the expense of the United States Government. The United States Senate has made this bill a

special order for consideration on December 10, 1900, and the sentiment in that body is as favorable to the Nicaragua canal as it was in the House. The President also favors the proposed legislation, but for various reasons the House bill will have to be amended, and it will have to wait until something is done with the new treaty. The ClaytonBulwer treaty is still the law of the land, and will remain so until modified by the ratification of the Hay-Pauncefote treaty. The old treaty cannot be ignored. It must be modified, as provided for by the HayPauncefote treaty, or it must be formally abrogated by Congress. The Senate is a part of the treaty-making power and must proceed in order, acting on the new treaty before it passes the House bill. There is no reason to believe that either will be long delayed or that the Nicaragua canal will not be begun during the next administration and the dream of a shorter waterway route to the Pacific realized within the next decade.

The Federal government began to consider the feasibility of an interoceanic canal seventy-five years ago, when the Panama Congress was called and this government sent delegates. In 1835 Henry Clay introduced a resolution in the Senate requesting the President to open negotiations with other nations regarding an isthmian canal. President Andrew Jackson discussed the proposition for a ship canal across the Isthmus of Panama in his message in 1837. In that message he called attention to the importance of making it clear that the canal should be neutral. In 1850 was negotiated the Clayton-Bulwer treaty with Great Britain by which the two governments declared that neither the one nor the other would obtain or maintain for itself any exclusive control over a ship canal by the Nicaragua route. In that treaty it was agreed that neither government would ever erect or maintain any fortifications commanding the canal or in the vicinity thereof. This Clayton-Bulwer treaty was a partnership in inaugurating and protecting an inter-ocean canal across Nicaragua. They agreed to the neutrality of the canal when it should be constructed. The Clayton-Bulwer treaty was at our solicitation; it was done in pursuance of a long established policy. In it we provided for the free use of the canal by all nations, and also for the extension to Central America of our historical policy, called the Monroe Doctrine. The treaty pledged Great Britain to the observance of the Monroe Doctrine in Central America, and never to occupy, colonize or exercise dominion over any part of Central America. That was