Omaha Daily Bee Newspaper, December 5, 1894, Page 2

AMra Y Aq PR gt Eno WEDNESDAY, DECEMBER 5, 1804, THE OMAHA DAILY BE] o At Y M FNIAY during the last two years to Impair the credit of the government and the people of the United States at home and abroad and to check our industrial and c:mmercial progress, more than all other things com bined, and our first and plainest duty Is to rovide, if possible, some effective method or the prempt and permanent reliof of the country from the consequences of the pres ent unwise policy. A brief statement of the practical and unavoldable results of the existing legislaticn will demonstrate its in Jurious effects upon our financial affairs m<re clearly than any argument that could ba sub. mitted.” ABOUT THE BOND ISSUES, secrotary then reviews the leading up to the first clrcum- 50,000,000 The stances issue of bonds as a means of replenishing the gold rcserve, yiolding $68,660,917 and in creasing the free gold in the treasury to $107,446,802. The lowest point reached by the rescrve since the resumption cf specle payments was on the 7th day of August 1894, when by reason of withdrawals in_ the redemption of notes it was reduced to $52,- 189,600, “Aftor that it was slowly re- plenished by voluntary exchanges of gold ein for United States notes by the banks and by small receipts of goid in the payment of duties to the government until the 14th of November, 1894, when it reached the sum of $01,878,374. In the meantime, however, the frequent presentation of notes for re- dempti'n in gold by individuals and institu- tions not desiring it for export clearly indi- cated the existence of a feeling of uneasiness in the public mind, while forelgn exchange was almost constantly at or near a rate which made it mora profitable to export gold than to purchase bills, and conseqently with- drawals for shipments were dally threatened In addition to these causes of anxlety the vast accumulation of money at our financial centers and the general depressin in busi- ness which prevailed in this country had so reduced the rates of discount that the fin- ducement to keep funds abroad, where ‘bet- ter investments could be made, were much greater than in ordinary times, and this, together witis the other facts stated, mado it highly imprudent to neglect any precaution which appeared necessary to insure the safety of our financial position. Therefore the second [ssue of $50,000,000 was decided upon. For this issue, propoeals for which were fs sued Tast month, 486 bids were received, amounting to $178,836,050, nearly all of -which wero at rates which would yield to the in- vestcr 3 per cent or less. One bid was for the whole sum of $50,000,000 upon the basis of 2.878 per cent, and being the most ad- vantageous offer for the gavernment that was made, either singly or by aggregating the separate bids, was accepted, and the pro- ceeds of the sals, $58,538,500, have nearly all been paid into ‘the treasury acccrdmg to the terms of the sale. The transaction justified the oplalon that a 21 per cent bond having reasonable time to run could probably have been sold at par, and certainly that a 8 per cent bond could have been dispcsed of at or above that rate. “As the authorily to issue and sell bonds already exists and the present state of our financial legisiation comp:Is its cecasional ex- ercise, I repeat the rec mmendation made in my last annual report that in the interest of the government and people power be con- ferred upon the secretary of the treasury to negotiate loans at a lower rate of interest and f°r a shorter time than are now allowed The existence of such authority instead of inereasing the probability of a frequent resort to that means of ralsing money w-uld have the contrary effect, because when the secretary of the treasury is clothed with ample power and facilities to procure means for the maintenance of the reserve, public confidence in the ability of the government to meet promptly all demands upon it will be much stronger than under present cir- cumstances. Besides the policy of limiting the government to the sale of an antiquated bond beariug a rate of interest wholly incon- sistent with the existing state of the pub- lic credit and having a longer time to run than fs apparently necessary at the date of its issue cannot he justified. ASKS FOR MORE POWERS. ““The law should be so amended as to con- rm to the conditions and requirements of Ahe pubiic credit and rervice at the present time, and I carnestly hope that congress will sake early and favorable action upon this sub- ject. So long as there are in circulation imnder the authority of the government two eoins unequal in value, but equal in legal fdender qualities, every consideration of gond faith and sound policy requires the prompt (redemption of the notes on presentation in Ahe kind of coin demanded by the holder, and Aho constant observanes of such administra- dive methods as may be recessary to pre- serve the purchasing power of the less valu- -able metal. This is essential to the con- dinued circulation of our standard silver dol- dars and their paper reprosentatives at par, and to abandon this policy without sub- Atituting a better one in its place would not only fail to cure many of the oviis now ex- dsting, but would entail upon the people of Ahe country additional and greater ones. This situation Is the necessary result of theso deatures of our currency legisation, and it eanoot be permanently avoided, or even tem- porarily improved without material changes in our laws relating to that subject. Thess deatures are: “L._The eirculation of United States notes s currency, and their current:redemption in ©oin on demand. “2. The compulsory reissuo of such note after redemption “3. The excessive accumulation and coinage ®f silver avd the issue of notes and cortifl- ates against it upon a ratio which greatly overvalues that metal as compared with tho standard unit of value in this and the other prineipal countries “Frequent fssues of bonds for the purpose af procuring gold, which cannot be kept after 4t has been obtained, will certainly cause in- reased distrust among our own people as Mwell,as among the people of other countries, and not only swell the volume of our se. ‘urities returning from abrdad, for sale or redemption, but increase the withdrawal of foreign eapital heretofore invested in our domestic enterprises. “Ordinarily when there is no distrust of ‘our currency or other discouraging influence, @ constderable part of the interest and divi dends earned by forelgn capital in this coun- try is annually or semi-annua’ly reinvested, and this, together with the fact that under normal conditions the balanc: of trade is in our favor, enables our people to meet their ebligatiors abroad without reducing their stock of mouey at home. But when distrust arises elther as to our ability to pay or as to tho value of the money with which we intend to pay, the foreign capitalist not only ceases to reinvest, but proceeds to withdraw all his money by disposing of his American securi- ties in order to protect both eapital and in- come against threatened depreciation. There are but two ways iu which this withdrawal ean be affected; one is for our people to ex- port and sell their commodities in foreign markets to a sufficlent amount to create a balunce of credit in thelr favor equal to the amount to be withdrawn, and the other is to ship gold, that being the only money recog- nized in- the settlement of the International balances. MAINTENANCE OF GOLD STANDARD. “But independently of these considerations our own people have a clear right to demand a sound and stable currency for uss in the transaction of thelr business at home, while thelr purely commerclal relations with the people of other countri»s upon whom the producers of exportable commodities are com pelled to rely for the consumption of their surplus, cannot be profitably maintained unless they are always in a condition to pay for what they buy in as good money as they receive for what they sell. We cannot therefore preserve our trade relations with the best customers for our surplus products unless we maintaia a monetary system sub stantlally {n accord with theirs, and until they manifest a disposition to co-operate with us In effecting a change upon terms Just and fair to all our Interests, we ought 1o continue our adhesion to the gold stand- ard of value with as large a nse of silver as 18 consisteat with the strict maintenance of that policy. Since the resumption of specis payments United States legal tender and treasury motes so redeemed have been re- fssued and are now outstanding. They are a constant menace to the'gold reserve and no schome of financial reform can be complete or effectual which does not provide at least for their gradual elimination from our cur- rency system. I am convinced that the in- terests of the country require such changes in our legislation as will discharge the gov. ernment entirely from the business of Issuing or reissuing eirculating notes, and thus wellove ita fiscal department of the periodical demands on its resources which under the existing system must continue to disturb the Minancial and general business affairs of the “ArD trai gulation of the volume of cir- “ulation to kept cutstanding is wholly in- consistent with the maintenance of a healthy financial condition and Is the exercise of a | function which dces not properly belong to the government or any other publie author- | tty. ~ Its effect s to force paper currency upon the people when it is not needed and deprive them of it when it is needed, thus establishing and maintaining an improper | and unwarranted ecnnection between the gov- ernment and the private business affairs of | its citizens and their successful prosecution largely dependent upon the judgment or | caprice of a superior authority having no in- terest in the transaction, except, perhaps, a partisan interest mot in harmony with scund financial arrangements. PRESENT METHOD HAS FAILED. “Under our present currency system, so far as it consists of notes Issued by the United States government, the volume of clrculation was intended to be and is in fact unchange- able. It is unalterably fixed at a certain amcunt, and no matter how great the emergency may be it can be neither enlarged nor diminished. The only part of the cur- rency possessiug In any degree the quality of elasticity s that issued by the national banking associations, and it s now generally conceded, T belleve, that in this particular at least it has falled to meet the require- ments of the situaticn at Some of the most critical periods in the business affairs of the country. Its fallure is creditable, in my opinicn, to these principal causes 1. To the large volume of United States currency of various kinds kept constantly outstanding, making the contraction or ex- pansion of the comparatively small natichal bank cireulation less effective than it would ctherwise have been. The dificulty and delay in producing and, to some extent, in retiring cirulation. “3 (and mainly). The provisions of the law which requira the- deposit of United States bonds to secure circulation and restricting the issue cf notes to 90 per cent of the par value of the bonds. “‘With $900,000,000 in United States notes; treasury notes of 1890, silver certificates and gold certificates, besides about $625,000,000 fn gold and gilver coins constantly outstanding, none of which can be lawfully retired by the government without the substituting of cther currency in its place, the national bank notes, which amount to only $207,500,000, or about 12 per cent of the whole, cannot exert a very effective influence upon’ the volume of out- standing currency at any time, especlally at times when large contractions or expansions are most needed, but the greatest difficulties are encountered, and the national banking system as now organized is least offective when the business of the. country demands quick expansi-ns of the currency to mest sudden emergencies “In addition to existing obstructions to the prompt increase and decrease of circulation the ninth section of the act of July 12, 1882, which provides for the extension cf the cor- porate existence of national banks, expressly prohibits them from retiring thelr notes to a greater amount than $3,000,000 in the ag- gregate per month and advocates that no bank which has made a depcsit of lawful money in order to withdraw its circulation shall be permitted to make any Increase in its circulation for a period of six months thereaftor. These provisions are so mani- festly in conflict with the dictates cf sound policy that they require no comment. OUTLINES OF THE NEW PLAN. “In view of the foregoing considerations and many others that might be urged in favor of a reorganization and formation of our paper curreney system I have prepared the outl'nes of a plan which, in my opinion, will relieve tho government to a great extent from the burdens now imposed upon it, se- cure within a reasonable time a safe and elastic natlcnal and state bank currency and result ultimately in the permanent re- tirement of United States legal tender notes of various classes. It s, in brief, as follows: *‘1. Repeal all laws requiring or authorizing the deposit of United States bonds as se- curity for circulation, *“2. Permit national banks to issue notes to an amount not exceeding 75 per centum of thelr paid up-and untmpaired capital, but require each bank before recefving notes to deposit a guacanty fund, consisting of United States legal tender notes, including treasury notes of 1890, to the amcunt of 30 per centum upon the ecirculating notes outstanding to be maintained at all times, and whenever a bank retires its circulation its guaranty fund to ‘be returned to it in proportion to the amcunt of notes retired. Retain the provis'on of the law making stockholders individually liable and provide that the circulation notes shal! const'tute a first lien upon all the assets of the bank. ‘4 Impose a tax of one-half of 1 per centum per annum, payable semi-annually, upon the averags amount of notes in circulation to defray the expénses of printing notes, of the supervision, cancellation, ete. No national bank note to be of less denomination than $10, and all notes of the same denomination to be uniform in design, but banks desiring to redcem their notes in #0ld may have them mave payable in that coln. The secretary of the treasury to have authority to prepare and keep on-iand, ready for issuc upon application, a reserve of blank national bank notes for each banking assoclation having eirculation. . Require each national banking insti- tution to redeem its notes at its own office or at Its own official agencles, to be designated by it. “7. To provide a safety fund for the im- medlate redemption of the circulating notes of failled banks, impose a tax of — per centum per annum upon the average circu- lation of each bank until the fund amounts to 6 per cent of the total circulation out- standing. Require each new bank and each bank taking out additional circulation to deposit its proper proportion of this fund before receiving notes. When a bank fails Its guaranty fund held on deposit to be paid Into the safety fund and used in the re- demption of its notes, and if this fund shall be impaired by the redemption of the notes of a failed bank or banks to reimburse the ately available cash assets of such banks are insuflicient to establish the fund, it shall at once be made good by pro rata assessments upon - the other banks, according to the amount of thelr outstanding circulation, but there shall be a first len upon all the assets of a falled bank or banks to reimburse the contributing banks. The safety fund may be invested in outstanding United States bonds having the longest time to run; the bonds and the interest upon them to be held as part of the fund and sold when necessary to redeem notes of falled banks, “'8. Repeal the provisions of the reorganiza tion and extension act of July 12, 1892, im- posing limitations upon the reduction and increase of national bank circulation. ‘9. Repeal all provisions of the law re- quiring banks to keep a reserve on account of deposits. *“10. The secretary of the treasury may, in his discretion, use any surplus revenue of the United States in the redemption and retire- ment of United States legal tender note: but such redemptions shall not in the ag- gregate exceed an amount equal to 70 per ceng of the original circulation taken out by Hational and state banks under the system herein proposed. “11. Circulating notes issued by a banking corporation duly “organized under the laws of each state, and which transacts no other than a banking business shall be exempt from taxation under the laws of the United States when It is shown to the satisfaction of the sccretary of the treasury and the comptroller, (1) that such bank at no time had outstanding circulating notes in excess of 75 per cent of its paidup and unimpaired capital, (2) that its stockholders are indl- vidually liable for the redemption of its circulation notes to the full extent of their ownership of stock, (3) that the circulating notes constitute by law a first lien upon all the assets of the bank, (4) that the bank at all times have the guaranty fund in United States legal tender notes, including treasury notes of 1890, equal to 30 per centum of its outstanding clrculating notes, and (5) that it has promptly redeemed its notes on de- mand at its principal office, or at one or more of its branch offices, If it has branches. “12. The secretary of the treasury may, under proper rules and regulations, to be es- tablished by him, permit state banks to pro- cure and use In the preparation of their notes the distinctive paper used in printing securities, but no state bank shall print or engrave Its notes in similitude of a United States note or certificate or national bank note. RETIRING UNITED STATES MONEY. “‘Whatever may be the objections to the issue and circulation’ of United States logal tender paper upon elther constitutional or financial grounds, it has. become so incor- porated into our eurrency system and con- stitutes so large a part of our active circu- lation that it could not be suddenly with- drawn without producing, in the present state of our laws, considerable disturbance in the financial operations of the govern- ment as well as the business of the people, and, therefore, the plan now suggested pro- vidos for its gradusl retirement by the use of surplus revenues hereafter received, a process which will probably require soveral years for its completion. As these notes cannot be retired until ather fofms of cur- rency to an equal amount have taken their place, there will be neither a forced con- traction nor expansion of the circulation on account of the change. s the plan suggested proposes to exempt the government of the United States from all lability for the redemption of national bank notes and place the sole responsibility upon the banks themselves, a guaranty fund of not less than 30 per centum upon the out- standing circulation s regarded as a very proper and necessary feature of the system In my opinion the fmposition of a tax by the federal government upon the issue of circulat- ing notes, lawfully fsued by state banks, is an_unjustifiable if not an unconstitutional in terference with the authority of the several states; but its validity has been judiclally sustained and as it does not appear to be practicable to repeal it absolutely at this time it is proposed to avoid its prohibitory effect by exempting from taxation the notes of such banking institutions as may be organ- ized and conducted under conditions which will amply protect the holders of their paper. While direct governmental supervision is not and ought not to be provided for, the require- ments that a bank in order to secure exemp- tion from taxation must satisfy the secretary of the treasury and the comptroller of the currency that It has complied with all the conditions imposed will enable those officials to adopt such measures as may be necessary in each case to secure every material fact involved in the Inquiry. It will be observed that the plan submitted proposes the repeal of all pravisions of existing laws which re- quire national banks to hold a fixed reserve agalnst deposits, and, as this {s a departure from the practice which has prevalled con- tinuously for more than thirty years, It is proper to state briefly the reasons which have prompted me to make this suggestion. When the national banking system was originaly authorized It was regarded by many as a doubtful experiment at first, and various precautionary restrictions were im- posed for the security of the note holders and depositors which practical experience has since shown to be unnecessary and sometimes harmful. Among these are the requirements that bonds shall be deposited to secure 90 per cent of their par value In circulating notes and that a fixed reserve which cannot be law- fully diminished shall be held on account of deposits. The consequence of this last re- quirement 1§ that when a bank stands in need of all its resources it cannot use them with- out violating the law. The necessity for hold- ing a sufficient reserve against deposits is not questicned, and in fact the business of re- celving deposits and discounting paper ought never to be conducted without it, but it should be held for actual use when the occa- sion requires and not made legally inacces- sible at the very time It was theoretically supposed to be beneficial in sustaining the credit of the bank and affording relief to its customers. BANKS CRIPPLED BY THE LAW. nder the present law when a bank finds its reserve in danger of reduction below the legal requirement on account of the demands of its depositors It is compelled at once to call in its loans, thereby increasing the dis- trust and aggravating the situation which a Judicious use of the reserve would have re- lleved; and besides at such times, in crder to protect the reserve which Is then practically useless for all practical ‘purposes, clearing house certificates, varloits forms of time checks and bills and other devices of doubtful legality are habitually resorted to for the purpose of supplying circulation to take the place of lawful money lying fdle in the vauits of the banks. To provide for a reserve which cannot be utilized, even at a time of the greatest stringency and distrust, without incurring the penalties of forfeiture, affords a most striking fllustration of the impolicy of legislative interference with the naturel laws of trade and finance. It is not the duty cr province of the government to control or reg- ulate the private affairs of the people, except for certain well defined purposes. As the custody and use of funds belonging to depog: itors are matters which affect only the inter- ests of the immediate parties they should be left to their own judgment and discretion. The duty of the government, so far as it hag any duty in the premises, is simply to pros vide that all the currency isued under if§ authority is sufficiently secured to prevent s loss or depreciation in the hands of the peq- ple who are compelled to recelve and pay ft out in the transaction of business. But ‘a bank Is not dependent upon the government for authority to receive deposits and its use for that purpose by the punlic is as purely voluntary as the credit extended to a cor- poration or to an individual. Every prudently managed bank, - it left free to conduct It own deposit and discount business in the manner most advantageous to its own Interests and the interests of its deposits ors, will keep on hand a reasonable reserve to meet not only the ordinary demands upon it but to provide for such emergeneies as are liable to occur in the community where it Is located, but It ought not to be pro- hibited by law from using sueh reserve for the only purpose it was designed to accomplish. The requirements that the banks shall pay their own obligations imposes upon them no greater hardship than is ime posed by law upon every other business and financial institution in the country and the culy argument that could ba plausibly urged against it In the case of the banks is that as the government has undertaken through thelr agency to secure a sound circulating medium it should pledge its cradit to keep it good under all circumstances. The conclusive answer (o this is that the government has discharged its whole duty in the matter when it has by its legislation provided such safe- guards as will, with honest and competent management, guarantee the safety of the notes Jsued by ists authority, and this is one of the results which the proposed plan is n- tended to accomplish. “In order to provide a wider fleld for the active circulation of our silver coins and cortificates, which now constitute one-fifth Cf the cntire volume of our currency, and to protect the treasury as far as possible against the accumulation of certificates re- turned in payment of customs and other duties to tho government it s proposed that no national bank note cf a less denomina- tion than $10 shall be issued. The bank notes under that dznomination now outstand- ing amount to $03,258,949, and there are also in eirculation $64,419,831 in old United States legal tender nctes. in denominations less than $10, $60,193,658 in treasury nots of 1890 and $131,047,547 in silver certificates, mak- ing in the aggregate $318,618,955 in small notes, or only about $19,000,000 less than the entire issue of siver certificates. The fact that our eirculating medium is composed of s0 many different kinds of currency would seem to require the enactment of such legis- lation as will provide a place in which each can bo safely and conveniently used, and as this can be done without aiscrimination against any of them it ought not to be omitted from any plan which propcses per- manent changes in the system. The policy of various other countries in this respect appears to have enabled them to avold the difficuities encountered here in the attempt to keen the less valuable ccins and thelr representatives in clrculation without de- rangement of the currency. or disturbance of the public finances. WHAT OTHER COUNTRIES DO. “Great Britain, with $555,000,000 in gold and only $112,000,000 in silver, none of which is full legal tender, authorizes the issue of no notes cf a less denomination than £5, equal to $24.83; France, Belgium and Italy, with 6,000,000 in gold and $518,300,000 in legal tender silver, issue no notes of a less denomi- nation than 20 franes, or $3.86; Holland, with $27,600,000 In gold and $53,400,000 in’ legal tender silver, lssues no paper below 26 ficrins, equal to $10.65; Spain, with $40,000,000 in gold and $126,000,000 in legal tender silver, issues nothing below 26 pesetas, or $4.72; Den- mark, Sweden and Norway, with $28,000,000 in gold and $1,200,000 in limited legal tender silver, have no paper under 10 kroenen, or $2.68," and Austria-Hungary, with $130,000,- 000 in g 1d and $81,000,000 in legal tender silver, Is gradually retiring all notes under 10 crowns, or $4.04. None of these countries have any paper based exclusively upon sliver &s we have, and consequently all payments made in sums less than the denominations of nctes mentioned must be made in actual coln, which would not be the case here i the recommendation now made should be complied with. Qur stock of “full legal tender silver ciins is larger i proportion ta the stock of gold than in any of the coln- tries named except Holland, Belgium and Spain, and yet we continue to obstruct their circulation ‘by the issue of small. United States nctes and bank notes which serve the purposes of the people in their defly trai actions no better than the coins or certifi- cates based upon them. The experience of this country under the act of February 8§, 1874, which I'mited siiver certificates to denominations of §10, and under the act of aylinl August 4. 1836 which removed that restric- thon, justifit tire Dellef that the change now propostel yswpuld result in a greatly M- creased use,,qf gliver colns and certificates and that they would be much less likely to roturn and r{MMn in the treasury than at the present.)?1At the time of the passing of the act lasturefgrred to permitting the use of silver ceimm not represented by cectifi- cates In dgpopWnations of §1, $2 and $5 standard silypr; dollars had accumulated in the treasury, tq the amcunt of $83,059,880, although Ihiul? al colnage up to that date was only $23p,845,988. Within four months after that ¢até, alfhough in the meantime the colnage ,wak progressing at the usual rate, the amqyni of free silver held in the treasury was feduced to $71,269,668, and it continued to AétFease on account of the de- mand for smelb cbrtificates until it became so reduced that further issues of certificates had to be limited practically to the current coinage of the dollars,” TO MAKR TRADBE FREER. On the subject of revenue reform, the secretary continues: “If this country is to utilize to the fullest extent the opportunities offered by its geographical positicn, natural resources and the mechanical skill and com- merelal enterprise of its people it must ad- hero steadfastly and aggresstvely to the rev- enue policy inaugurated by the present con- gress at its last session. The reducticn of taxation to the fowest point compatible with the collection of a revenue sufficlent to main- tain an efficient public service is a duty which, upon the plainest principles of jus- tice, every government owes to its citizens under all circumstances, but when the taxa- tion is imposed in such form and at such rates as to increase the ccst of living and obstruct the processes of industry and trade this duty becomes still more imperative, and a fallure to discharge it when the power exists Is a gross violation of public trust and confi- dence. For many years our tariff laws have been framed upon the theory that the wealth of the country could be increased by impos- Ing burdens upon the people and that the prosperity of our industries could be promoted by increasing the cost of production, and the result has beea that net profits of labor and capital ~ constantly diminished until they reached a point which made further develop- ment of our resources almost impossible. But little opportunity was afforded for the extension of our manufacturing and mechan- lcal industries or fon the growth of our trade at home or abroall, and thus the farmers and other producers of the country were confront- ed by a situation which compelled them to recelve diminished rewards for increased pro- duction. A change was demanded by every consideration of public duty and private in- terest, and although the recent legislation did not accomplish all that was expected or de- sired 1t inaugurated a policy which 1t is hoped and believed will ultimately result ina great improvement in our industrial condition and a corresponding enlargement of our inter- national and internal commerce. In the pros- ecution of this policy no temporary character or apparent diversion of the public mind to other subjects should be permitted to dimin- ish our confidence in our financial success or weaken our determination to maintain a con- sistent advocacy of its claims to the fayorable consideration of the people. On the contrary reverses should stimulate increased efforts and every movément hereafter made should be o step forward In the direction of freer trade and a_more equitable distribution of the rewards of industry. - The raw materials uséd in the production of ecommodities for the use of the people in their homes and in their va- rious industrial pursuits should be free.from taxation in ordgr that the burdens of labor may be ligh the opportunities for em- ployment in and the necessaries of life made mors$ whandant and less expensive. If our industries ase to be profitably con- ducted, reducgd cost_of product must_precede or accompany reduced price of the finished product, and d#§'\cpeap commodities increase consumption the jigterests of all classes, will be promoted ‘emoving the ohstructions which deny our skilled laborers and artisans access to the world's store of raw materials. The late act, while it places upon the. free list a_considerabl of most important raw materlals used in our manufactures, left iron and lead ores and bituminous coal and sey- eral other articles of less consequence still du- tiable, thus not only failing to put in force a cg:mext:' 6t ‘Tevenue reform, . but Idwing; 5 tmost. valuabld-ndustries Py £, iWAntage as compared with rivals ‘dfifetently, located, 2 “There are other ‘efects, consisting of am- bigusus: “phraseolo in same of the .para- graphs, andSinconsisteny and excessive rates of aty. in some of“the schédules, a cortec- tion of which would bs in harmony with a policy of progressive reform upon a basis. of equal justice to producers -and consumers and would not affect the revenus to any con- siderable extent. | Advantage ‘should ‘be promptly takenof évery opportunity to're- move all these objectionable features' from’the act in order that our legislatfon may be made to conform, as speedily as possible, to the pledges given to the people and to the de- mands of public sentiment on this stbject.” CHARGED WITH FAVORITISM. Defense in A. R. U. Cases Ask to Have United States Attornoys Rem: . SAN FRANCISCO, Dec. 4—A sensation was created yesterday in the United States court before which Main and Cas- sidy, American Railway union men, are on trial for conspiracy. Attarney Montieth, their counsel, formally moved to have United States District Attorney Garter and Assistant District Attorney Samuel Knight removed from their positions as prosecutors in the case on the ground of bias and undue friendliness for the Southern Pacific Rail- road company. Two of the defendants were introduced. It was charged that through all the recent strike trouble the district at- torney and his assistants conspired with the Southern Paelfie officers and that they taok such unwarranted action on behalf of the railroads in this matter and became so biased that the conviction of the men now on trial is essential to the vindication of the district attorney. It was further charged that the district attorney and his assist- ants have a personal interest in suppressing evidence on behalf of the accused men, and that when the matter wes under investiga- tion before the United States grand jury the district attorney’s influence was wrong- fully used to prevent the grand jury from hearing material evidence on behalf of the strikers. It was also charged that District Attorney Garter owes his appointment to the late Senator Stanford and raliroad In- fluence, and that through all of the recent trouble he was active in thelr behalf. The motion to remove District Attorney Garter nd his assistant, Knight, and to substitute special counsel for the prosecution was denfed by Judge Morrow and the trial was ordered to proceed. ———— General Swalm's Frobable Successor. WASHINGTON, Dec. 4—The announce- ment of the president's determination to retire Judge Advocate General Swalm this month has caused much speculation in_mil- itary circles as to the succession. Under ordinary circumstances General Swaim would not retire before 1885, The president has adopted a course which, while nerfectly legal, has very few precedents in the his- tory of the army. Up to this time but two names have been prominently mentioned for the succession. , One. 15 Joseph Doe of Wis- onsin, assistant secretary of war, and the other is Coloneli C.91. Liber of South Car lina. Mr. Doe has, however, publicly denied any aspiration to' the place, and it seems very probably that the office will fall to Colonel Liber,” who has, since General Swaim's suspension, discharged the duties of judge advocate general. —— Reflneries Runhing on Half Force. NEW YORK; Ded d.—An afternaon paper prints the followlpg as emanating from President Havemeyer of the American Sugar company: “Work has been resumed in the refineries on a very reduced scale. I do not anticipate the passage of a free sugar bill. The* PHnklin refinery of Phil- adelphia is wquking with a reduced foree. The Spreckels Folinary 1s not working at all, The Boston refinery is working with about half the usuat force. The Madison and Weichers refinery 18 working with about half force. The Brooklyn refinery is idle. The Havemeyer-and Blder refinery 15 work- ing with nearly full force." Mr. Havemeyer denled the reports of dif- ference with other directors. He also denied having a conference with senators at the Fifth Avenue hotel. e Qregon Kidney Tea cures all kidney ‘rog bles, Trial size, 26 conts. All druggists. o —— Think They Have Deeu dwindled, WASHINGTON, Dec. 4.~An equity bill for the appointment of a recelver and an injunction against the Fidelity Building and Loan and Investment assoclation. the Co- limbia Bullding, Losn and Invesiment a: soolation, Harrison - D. Ingman, Andrew Wall and others was flled in the distriat court toddy by stockholders. The bill charges fraud and mismanagement, that the corporations are insolvent, that shares are now worth but half the amounts paid on them, so that further payments would be useless, and asks for a receiver. In- cidentally 'it crages that stockholders are kept In ' ignorance of the affairs of the corporation, ASTARTLING EXHIBIT| (Continued from Page.) thelr particular sesslon of 1391 paid for enough jacknives to entitle each member to six of the implements swear upon their honor that they never saw . one. It Is known that persons who did obtain knives drew them by means of requisitions made out by Eric Johnson, chief clerk of the house and the secretary of the senate. It is not known what the result would be if this were followed up all along the line. There was a large army of employes, who are credited with assisting in consuming such stuff, While unprecedented frugality has pre- vailed in all of the state's institutions in the past two years the large and expensive pay rolls would seem to justify the belief that material reductions might be brought about in the salaries without impairing the public service,. The wages pald the state's ser- vants are better than any other class of employes receive during these times, and cspecially is that true of those employed in the institutions which board the employes at the expense of the state. A conservative reduction of the pay where it can be done without injury to the service will result in an aggregate saving of many thousands an- nually. FIRE INSURANCE. During my incumbency I have sought to learn more of the affairs of the Insurance companies transacting business in this state than is disclosed by their annual statements filed in this department, and I have caused practical and thorough examinations to be made of nineteen foreign and domestic com- panies, with very satistactory results. In 1803 four fire insurance companies were ad- mitted to the state, and the same number retired, and in this year two companies were admitted and fourteen either voluny tarily withdrew or failed. In 1803 Six Farmers’ Mutuals were admitted and ten in 1894, Four miscellaneous companies were admitted in 1893, one withdrawing, and one was admitted in 1894. I am very thoroughly of the opinion that our present insurance laws should be re- pealed and a * more comprehensive law enacted affecting all forms of underwriting. Our present Iaw Is too vague and uncertain, It is difficult to safely conduct this depart- ment with laws that are subject to di- verse constructions and make it as effective as it should be. The penalties for viola- tlons of our insurance laws should be definite and severe, and the authority ought to be fully and certainly lodged in this office or somewhere else, to prosecute Infractions of the law to a conviction. 1 have made strenuous efforts to prevent the Lloyds and other unauthorized alleged insurance asso- clations, companies or corporations from soliciting or procuring business in our state, and have directed the attention of all con- cerned to the unreliability of that class of presumed - insurance and the hazard they assume fn dealing with any of these wildeat schemes that refuse to comply with our laws, and have also done all I could to ap- prehend some of these unlawful under- writers and bring them to justice. In view of the alarming increase of the loss rate as compared with the premiums received singe the enactment of sections 43 to 45, both Inclusive, of chapter 43 of the An- notated Statutes of 1893, I am forced to the conclusion that equity and fair dealing as between the two parties to an insurance contract make it almost imperative that the sections referred to be repealed, and, if deemed necessary, substituted by a more ratioual and less partial act. I can't resist the conclusion that the effect of this act fu to create an incentive for incendiarism, and thereby greatly increase the moral hazard of the risk. written, as well as to jeopardize the property of the nelghbor, which neces- sarlly must result in advanced insurance rates for the honest insurer to pay or a withdrawal of the companies from the fleld. Were all men above the suspicion of avail- ing themselves of the advantages they might gain financially by the valued policy law, its effects would be beneficent and there would be no reason to suppose that this or any jother law«would place a premium on arson LIFE INSURANCE. Our life and accident insurance laws are quite as imperfect as those pertaining to fire Insurance and should be replaced with new, crisp laws, free from all ambiguity and doubt as to their meaning. Our present laws are relles of our territorlal days and wholly inadequate. They fail to enlighten either. the companies or this office of the dutjes devolving upon each, as they should. In 1893 three life and accident insurance companies were admitted and one with- drew, and in 1894 five new companies were admitted and one withdrew. Nineteen fraternal orders have been admitted and six bave withdrawn during the present bien- nium. I recommend the enactment of & rigid law for the guidance of sollciting and ather agents of all manner of insurance com- panies, and making any misrepresentations on their part amenable to severs penalties, and until some such wholesome legislation is had the mad rush for business will be con- tinued upder a disadvantage by the really conscientious and truthful agent. BONDS. Bonds of all classes and forns, gating $1,935,067, have heen registered in this office in the past two years. About $200,000 in bonds bave been refused registra- tion, owing to legal defects. I desire to call your especial attention to our existing laws governing the issuing if Internal im- provement bonds. Under section 9, chapter 93, page 647, Annotated Statutes of 1893, canals constructed for irrigatiog or water power purposes are declared to be works of internal improvement, and they are created under the provisions of chapter 45 of the same statute. Recently, for obvious rea- sons, large quantities of county, preeinct and village bonds have been issued for irri- gation purposes in the hope of getting reliet for the agricultural districts of the state. I respectfully urge that section 9 of chapter 93, above cited, be repealed, and a special law enacted under which irrigation bonds shall be Issued, prescribing the amount, rate and manner of voting, and requiring that the bonds so voted shall not be de- livered to any company or corporation wuntil it shall have entered into a contract and bond with the county, township or village so vot- ing such aid to complete the canal and de- liver the water therein within a stipulated time, according to the specifications to be filed In the office of the county clerk before the election Is called. BANKING DEPARTMENT. T wish to especlally emphasize the neces- sity of a vigorous law regarding hond invest- ment companies. Nebraska has been flooded with circulars and representatives of so- called bond investment companies, offering alluring Inducements to ‘investors. The banking board has exerted all possible effort to rid the state of those swindlers, by resolu- tion and otherwise, and a pungent law on this subject will be of great good to all The banks of the state maintain excellent solvency tn these depressing times and at- test to the efficiency of the censorship given them by those who are charged with thetr control. Our laws governing bullding and loan associations should be made more specific and less cumbersome, the better to enable their correct Interpretation and there- by enhance their usefulness. Very re- spectfully submitted. EUGENE MOORE, Auditor Public Accounts. aggre- LEGISLATIVE SUPPLIES PUROHASED. Secretary of State Allen Has Let the Con: tracts for the Season Already, LINCOLN, Dee. 4.—(Special)—To a repre- sentative of The Bee today, Secretary of State Kllen sald that he had already con- tracted for supplies for the coming state legislature, Including the work of renovating the chambers of the senate and house of representatives, stationery, etc. On being asked to see these contracts he replied that he would mot submit them for fnspection until they were laid before the legislature &t Its opening next January. In regard to these contracts State Auditor Eugene Moore sald that they would not come under his officlal observation until the bills were pre- sented for his action on the same. As the matter now sta the various contracts for next wession's leg Ive suppliss, amounts of same and prices, will not be given to the publio save through the regular channels of the record of the leglalative journals. In sectin 4, chapter lxxxill of the Com- piled Statutes of Nebraska, the only authority for the purchase of these supplies given to the secretary of state is as follows: Tt uhlll ba the duty of the sccretary of stite to furnish the leglslature and the offi- cors thereof all negessary fuel and sta- tionery when 86 diréoted by resolution of the legislature, or either branch thereof. So far as has developed there has been no rosolution of the legislature to this effect, as the old legislature ls, practically, dead, and the new one cannot resolve until it has con- vened and ascertajned what supplies are required for its service. But under article 12, chapter lxxxiil, section 2, board of supply proposals, it 1s provided that At least one month previous to the 1st of January, April, July and October, respect- in each 'vear, a board, consisting of governor, commissioner of public lands and bulldings, ~secretary of state, treas- urer and attorney zeneral, shall meet with the warden ‘of the state prison and the superintendents of each of the asylums or other institutions fur- nished by the state and determine the sup plies that may be necessary for thi months, except articles which may be ishable and cannot be kept. Sald board shall designate clearly the quantity and quality of the articles, and shall then ad- vertise for ten days 'In some newspaper published at the capital having general cir- culation in the state. It Secretary of State Allen Is acting under this provision, which In nowise affects legis- lative supplies, it would seem that an ad- vertisement covering such ground should have been printed within the ten-day limit and incorporating in its provisions the com- ing session of the legislature. - MRS, RAMACCIOTTI'S WILL, Effort Being Mado to Knock District Court. The disposition of the property of the late Mrs. Mary E. Ramacclotti is the subject of a law suit that is being tried before a jury in Judge Ambrose’s court, the action belng in the form of a contest of the will of the de- ceased, Mrs. Ramacciotti was the wife of H. L. Ramacclotti, and was possessed of property valued at about $25,000, the result of careful investments made of money left her at the death of ber first husband. Before her death Mrs. Ramacclotti and her husband had had much domestic trouble, and she had made at ‘least one attempt upon his life, it is alleged, and they had practically separated. Mrs. Ramacclotti died suddenly, about a year ago, and left a will, by tho terms of Which her property was bequeathed to an adopted son, Harry E. Ogle, a foundling, who had been cared for by Mrs. Ramacciotti, but had never been formally adopted, according to law. Some of the property was also left to Mrs. Gibson, a sister of the deceased. When the will was filed for probate the brother and sisters of Mrs. Ramacciotti com- menced contest proceedings to have the will set aside, alleging that the deceased was not competent at the time of the making of the will, and alleging that her mind had been unbalanced by her domestic troubles. The case was taken to the district court on the question of admitting the will to probate. The trial of the case will last for several days, Harry E. Ogle has been legally adopted by Dr. Ramacclotti since the death of Mrs. Ramacclotti. The Note Meant Nothing. In Judge Duffie’s court the case of the Omaha Loan and Trust company against George B. Green Is on trial. Green was a stock broker in South Omaha, and did busi- ness with Joseph J, Hunter of Chicago. After several years' transactions an account- ing was had, which showed that Green was in Hunter's debt to the tune of $7,701. This was secured by a mortgage, which was sold to the Omaha Loan and Trust company by Hunter. Green offers a defense that thoe in- debtedness to Hunter was in the shape of accommodation notes, and Is reslsting the col- lection of the claim. it Out in Minor Legal Matters. Henry Henderson was called for trial fn the criminal section of the district court yester- day, but falled to put in an appearance, and his bond was declared forfeited. Henderson is @ _colored man who went te his home a few weeks ago and found another man, named Green, there talking to Mrs. Henderson. A fight ensued, and Green had an eye destroyed by a blow from Henderson, who had a big ring on his striking hand. He gave bonds for his appearance for trial, but weakened yesterday and skipped the town. Little Mary Grifith is in Iawa, and the habeas corpus case commenced by her father for her possession is temporarily hung up in Judge Scott’s court. Mrs. St. John, who has had possession of the child since its mother’s death, sent the little one to Correctionville with a friend to spend Thanksgiving before the papers in the case were served upon her. She has been cited to appear in court this morning and account for the whereabouts of the child. —————— A Diphtheria Cure. WASHINGTON, D. C., Dec. 3.—The noti- fication to the Marine Hospital service that Parke Davis & Co,, the Detroit chemists, were preparing to manufacture anti-toxine the new remedy for diphtheria, has been fully confirmed, and has awakened great in- terest here. Dr. Roux’s discovery has cgeated such a sensation in Europe that American physicians are anxlous to put it to a thorough test. Lt Payment on Account Ordered. MILWAUKEE, Dec. 4.—Judge Jenkins is- sued an order today requiring the Wisconsin Central receivers to pay the charge of the Northen Paciflc recelvers $110,000 on account, The Chicago & Northern Pacific receivers were also ordered to intervene in the main sult and to answer the Northern Pacific pe- tition concerning the matter of supplies. ———— Oregon Kidney Tea cures mervous head- aches. Trial size, 25 cents. All druggiets. i ek Navigation Employes in Court, PORTLAND, Dec. 4.—In the United States court today a hearing began in the Oregon Rallway and Navigation company wage schedule case, in which the engineers, fire- men, conductors, brakemen and telegraph operators petition the court for an order re- straining Receiver McNelll from reducing their wages. Ivy Poisoning Eight Years of Suffering Perfect Cure by Hood’s Sarsaparilia “C. 1. Hood & Co., Lowell, Mass. “ Dear Sirs: — We have tried Hood's Sarsapa- rilla and find 1t to be all you claim for it. My wife was poisoned by ivy when & young woman, and for elght years was troubled every season Ve Sarsds Hood's*=Cures with the breaking out and terrible itohing and burning. I thought hers was as bad a caso as anyone ever had. She was In this distressing condition every year until she began to take IHood's Sarsaparilla, which has effected a per- fect oure, withous leaving any scars, and she has had No 8ign of the Polson 8ince, 8he is wall and hearty. I Rave taken Hood's Sarsaparilla after the grip with good results, and have also glyen Itto our four children. We are all plotures of perfeot health and owe It to BAD COMPLEXIONS Dark, yellow, ofly, mothy skin, pime X ples, blackheads, roughness, rednoss, dry, thin,and falling hair, and simple baby blemishes prevented and cured by the celebrated ‘The most effective skin purifying and beautifying soap in the world, as well as purestand sweetest for toflet, bath, and nursery. It {8 60 becguss it strikes at tho CAUSE of most com- plexional disfigurations, viz.: the OLOGGED, INFLAMED, IRRITATED, OVERWORKED, OF SLUGGISH PORE. Sold throughout the world. PoTTen DRua AND Onm. Conr, wole proprietors, Boston. g #All abouttho Blood,=kin, Bealp, and Lalr,” mailed free. ’.-..‘-‘.‘Q.’-- 9 CONYENIENT AND ECONOMICAL V.“«--«‘-«««««-- The best way to im- prove and strengh- en Soups, Dishes of all kinds is to add a little of tho famous Leibig COMPANY'S Extract of Beef For Improved and Economic Cookery. For delicious, Refreshing Beef Tea. DD DD D VOISO DOCTOR SEARLES & SEARLES Treatmenthy Mail, Consultation Free Catarrh, all discases of the nose, Throat. Chest,Stomach, Liver, Blood Skin and Kidney diseases, Lost —Manhood and all Private Dis* eases of Men, Call on or address, Dr. Searles & Searles, Ll Farnam Streel Oumuha. Neb. VE SEED! This Famous Bemedy cures quickly and perma- nontly all nervous such oak Momory, in- Power, Tioadache, Wakofuiness ality, nightlyen ona, avil dream. Potanoy and wsting disea Lh and puny, pookot. ' $1 per bo: With o written gua Writo us for lain’ wrap I Hy ropal toe tocure or monay ref unded. Rt e e e r, which_oon Beware af imitations. Bold by our advers tised agents, or address NERVE SEED CO., Masonic Temple, Chleago, KLl BOLD IN OMAHA, NEB., BY SHERMAN & Mc. CONNELL, 1513 DODGE. KUHN & €0., 183 "OUGLAS, VICKERS & MERCHANT, 16th cnd OWARD STREETS. AMUSEMBNTS, BOYD'S 7% AT 2:30. POPULAR PRICES. Everybody Come and Bring the Children to See DONNELLY & GIRARD THE RAINMAKERS ORCHESTRA: BALCONY: SOc. =Cc. mance Tonight. BOYD'S JWithbat5ar coumENCING TYRC, 6 THURSDAY, EUGENE TOMPKINS’ Grand Production ot THE BLAGK CROOK The Magnificent Ballet, Spect A Dazaling " “Homanco In 4 Acts and 16 Tabloaux. 100 People and Oarloads of Scevery. Under the direction of LAWRENCE CARTY. Identically the same production that was bero last February, Sale opens Wednesday at the following priges: First fioor, $1.00 &nd $1.60; balcony, o and 1e. EMPIRE THEATRE "°"¥iiles. (Formerly People’s Theater). W. J. BURGESS MavsoEn DEC, 6-7-8.—SATURDAY MATINEH, EZRA KENDALL fu il Now Play, “THE SUBSTITUTE.” Hood" saparilla.” J, C. FREEMAN, Vab. dalia, Iitipols. st nE }o 5 fi.m# ol RaY oiher ete “Hood's Pills aro hand mado, and perfest 8 proportion and sppearance. g per box. [t " i, P e B et