deposits made to redeem the circulating notes of such banks, and all deposits thereafter received for like purpose, shall be covered into the Treasury as a miscellaneous receipt, and the Treasurer of the United States shall redeem from the general cash in the Treasury the circulating notes of said banks which may come into his possession subject to redemption; and upon the certificate of the Comptroller of the Currency that such notes have been received by him, and that they have been destroyed, and that no new notes will be issued in their place, reimbursement of their amount shall be made to the Treasurer, under such regulations as the Secretary of the Treasury may prescribe, from an appropriation hereby created, to be known as 'National bank notes: Redemption account,' but the provisions of this act shall not apply to the deposits received under section 3 of the act of June 20, 1874, requiring every national bank to keep in lawful money with the Treasurer of the United States a sum equal to 5 per cent. of its circulation, to be held and used for the redemption of its circulating notes; and the balance remaining of the deposits so covered shall, at the close of each month, be reported on the monthly public debt statement as debt of the United States bearing no interest.

"SEC. 7. That this act shall take effect thirty days from and after its passage."

EXTRACTS FROM MR. MILLS'S SPEECH, 1889, INTRODUCING HIS PROPOSED TARIFF-REFORM MEASURE.

"MR. CHAIRMAN, during our late civil war the expenditures required by an enormous military establishment made it necessary that the burdens of taxation should be laid heavily in all directions authorized by the Constitution. The internal-revenue and direct taxes were called into requisition to supplement the revenues arising from customs, to aid the Treasury to respond to the heavy demands which were being daily made upon it. The duties on imports were raised from an average on dutiable goods of 18.84 per cent. in 1861 to an average of 40.29 per cent. on dutiable goods during the five years from 1862 to 1866, inclusive. This was recognized at the time as an exceptionally heavy burden. It was stated by the distinguished gentlemen who then presented to the House the bill so largely increasing the duties, and which to-day bears his honored name, that it was demanded by the exigencies of war, and must cease on the return of peace. In his own words he said: "This is intended as a war measure, a temporary measure, and we must as such give it our support.' More than twenty years have elapsed since the war ended. A generation has passed away and a new generation has appeared on the stage since peace has returned to bless our common country; but these war taxes still remain; and they are heavier to-day than they were on an average during the five years of the existence of hostilities. The average rate of duty during the last five years-from 1883 to 1887 inclusive-on dutiable goods, amounts to 44.51 per cent., and during the last year the average is 47.10 per cent. Instead of the rate of taxation being reduced to meet the wants of an efficient administration of government in time of peace, it continues to grow and fill the coffers of the government with money not required for public purposes, and which rightfully should remain in the pockets of the people.

"The greatest evil that is inflicted by it is in the destruction of the values of our exports. Remember that the great body of our exports are agricultural products. It has been so through our whole history. From 75 to over 80 per cent. of the exports of this country, year by year, are agricultural products. Cotton is first, then bread-stuffs, pork, beef, butter, cheese, lard. These are the things that keep up our foreign trade, and when you put on or keep on such duties as we have now-war duties, which were regarded as so enormous even in the very midst of hostilities that they were declared to be temporary-when you put on or retain those duties, they limit and prohibit importation, and that limits or prohibits exportation. It takes two to make a trade. All the commerce of all the countries of the world is carried on by an exchange of commodities-commodities going from the country where they are produced at the least cost to seek a market in those countries where they can either not be produced at all or where they can be produced only at the highest cost of production. We are the great agricultural country of the world, and we have been feeding the people of Europe, and the people of Europe have got to give us in exchange the products of their labor in their shops; and when we put on excessive duties for the purpose of prohibiting the importations of their goods, as a necessary result we put an excessive duty upon the exportation of our own agricultural products. And what does that do? It throws our surplus products upon our own markets at home, which becomes glutted and oversupplied, and prices go down. So it is with

the people of Europe who are manufacturing and producing things that we can not produce, but which we want. Their products are thrown upon their home markets, which are glutted and oversupplied, and their prices likewise go down. And whenever, from any cause, prices start up in Europe, our tariff being levied mainly by specific duties upon quantity, not upon value, the tariff goes down, and then we see large importation, and, as a result, large exportation. Then we see a rise in agricultural products; then we see the circulation of money all through the whole of our industrial system; we see our people going to work, our manufactories starting up, and prosperity in every part of the land.

"We are the greatest agricultural people in the world. We exceed all others in the products of manufacture, but we export next to nothing of our product. Why should we not export the three hundred and seventy-five millions of cotton goods which England is now exporting? She buys her cotton from us, pays the cost of transportation to her factories, makes the goods, and sends them all over the world. That trade, at least the most of it, is ours whenever we get ready to take it. Why should we not make and send out the hundred millions of woolen goods which she is annually exporting? We have the advantage of her in almost everything except cost of materials. Why should we not make and export the hundred millions of iron and steel which she is making and sending away annually? There is no reason except that high tariff and trusts and combinations are in our way, and they muster all their forces to prevent us from taking the place which our advantages entitle us to take. We are the greatest people in the world. We have the highest standard of civilization; we have the highest and best diffusion of knowledge among our people. We utilize the power of machinery more than any people in the world. We produce by our labor more than any people in the world. We have everything to command success in any contest over any rival. We are the first cotton-producing country. We have wool, flax, hemp; our country is full of coal and ores and lumber, and yet with all these advantages over all others we have pursued a suicidal policy of protection, which has closed the markets of the world against us; and not content to stop here, we have plundered the great body of our agricultural people out of a large part of their wealth. We must make a departure. Instead of laying the burdens of taxation upon the necessaries of life, instead of destroying our foreign commerce, we should encourage it as we would encourage our home commerce. We should remove every unnecessary burden. We should lay taxes to obtain revenue, but not restrict importation. We should place every material of manufacture on the free list, start up our fires, put our wheels in motion, and put all our people to work at good wages.'

After arguing that it is increased production that makes cheap goods and high wages, Mr. Mills said, in regard to the effect of the existing tariff on labor: "I have taken from the first annual report of the Commissioner of Labor and the report of the census on wages some figures given by manufacturers themselves of the total cost of the product and the labor cost of the articles they are making. I have put the tariff duty by the side of them to show whether in the little reductions we are asking in this bill we have gone beyond that pledge we as a party have made that we would not reduce taxation so low as to injure our laborers, or as not to cover the difference in cost of labor between American and foreign products. This will show, and I ask your attention to it, that the tariff is not intended to, and does not, benefit labor. It will show that the benefit of the tariff never passes beyond the pocket of the manufacturer, and to the pockets of his workmen.

"I find in this report one pair of five-pound blankets. The whole cost, as stated by the manufacturer, is $2.51. The labor cost he paid for making them is 35 cents. The present tariff is $1.90. Now here is $1.55 in this tariff over and above the entire labor cost of these blankets. Why did not that

manufacturer go and give that money to the laborer? He is able to do it. Here is a tariff that gives him $1.90 on that pair of blankets for the benefit of his laborer; but notwithstanding that the tariff was imposed for the benefit of American labor and to preserve high wages, every dollar of that tariff went into the manufacturer's pocket. The poor fellow who made the blankets got 35 cents and the manufacturer kept the $1.90.

"Here is one yard of flannel, weighing four ounces; it cost 18 cents, of which the laborer got 3 cents; the tariff on it is 8 cents. How is it that the whole 8 cents did not get into the pockets of the laborer? Is it not strange that those who made the tariff and fastened upon the people these war rates in a time of profound peace, and who are now constantly assailing the Democratic party because it is untrue to the workingman, did not make some provision by which the generous bounty they gave should reach the pocket of him for whom they said it was intended? They charge that we are trying to strike down the labor of the country. Why do they not see that the money they are taking out of the hard earnings of the people is delivered in good faith to the workman? One yard of cassimere, weighing 16 ounces, cost $1.38; the labor cost is 29 cents; the tariff duty is 80 cents. One pound of sewing-silk costs $5.66; the cost for labor is 85 cents; the tariff is $1.69. One gallon of linseed-oil costs 46 cents; the labor cost is 2 cents; the tariff cost is 25 cents. One ton of bar-iron costs $31; the labor cost is $10; the tariff fixes several rates for bar-iron. I give the lowest rate, $17.92. One ton of foundry pig-iron costs $11; the labor costs $1.64; the tariff is $6.72.

Now, Mr. Chairman, I have gone through with a number of articles taken from these official reports made by the manufacturers themselves, and I have shown that the tariff was not framed for the benefit of the laborer, or that if it was so intended by those who framed it, the benefit never reaches the laborer, not a dollar of it. The working people are hired in the market at the lowest rates at which their services can be had, and all the 'boodle' that has been granted by these tariff bills goes into the pockets of the manufacturers. It builds up palaces; it concentrates wealth; it makes great and powerful magnates; but it distributes none of its beneficence in the homes of our laboring poor."

As to the spirit of the protective system which is sometimes called the American policy, Mr. Mills said: "I repel it, sir; it is not American. It is the reverse of American. That policy is American which clings most closely to the fundamental idea that underlies our institutions and upon which the whole superstructure of our government is erected, and that idea is freedomfreedom secured by the guarantees of government; freedom to think, to speak, to write; freedom to go where we please, select our own occupations; freedom to labor when we please and where we please; freedom to receive and enjoy all the results of our labor; freedom to sell our products, and freedom to buy the products of others, and freedom to markets for the products of our labor, without which the freedom of labor is restricted and denied; freedom from restraints in working and marketing the products of our toil, except such as may be necessary in the interest of the government; freedom from all unnecessary burdens; freedom from all exactions upon the citizen except such as may be necessary to support an honest, efficient and economical administration of the government that guarantees him protection to 'life, liberty, and the pursuit of happiness;' freedom from all taxation except that which is levied for the support of the government; freedom from taxation levied for the purpose of enriching favored classes by the spoliation and plunder of the people; freedom from all systems of taxation that do not fall with 'equal and exact justice upon all'—that do not raise the revenues of government in the way that is least burdensome to the people and with the least possible disturbance to their business. That, sir, is the American policy."

SENT TO CONGRESS DECEMBER 6, 1887.

To the Congress of the United States:

You are confronted at the threshold of your legislative duties with a condition of the national finances which imperatively demands immediate and careful consideration. The amount of money annually exacted through the operation of present laws from the industries and necessities of the people largely exceeds the sum necessary to meet the expenses of the government.

When we consider that the theory of our institutions guarantees to every citizen the full enjoyment of all the fruits of his industry and enterprise, with only such deduction as may be his share toward the careful and economical maintenance of the government which protects him, it is plain that the exaction of more than this is indefensible extortion and a culpable betrayal of American fairness and justice. This wrong, inflicted upon those who bear the burden of national taxation, like other wrongs, multiplies a brood of evil consequences. The public Treasury, which should only exist as a conduit conveying the people's tribute to its legitimate objects of expenditure, becomes a hoarding-place for money needlessly withdrawn from trade and the people's use, thus crippling our national energies, suspending our country's development, preventing investment in productive enterprise, threatening financial disturbance, and inviting schemes of public plunder.

This condition of our Treasury is not altogether new; and it has more than once of late been submitted to the people's representatives in the Congress, who alone can apply a remedy. And yet the situation still continues, with aggravated incidents, more than ever presaging financial convulsion and widespread disaster. It will not do to neglect this situation because its dangers are not now palpably imminent and apparent. They exist none the less certainly, and await the unforeseen and unexpected occasion when suddenly they will be precipitated upon us.

On the 30th day of June, 1885, the excess of revenues over public expenditures after complying with the annual requirement of the sinking-fund act was $17,859,735.84. During the year ended June 30, 1886, such excess amounted to $49,405,545.20, and during the year ended June 30, 1887, it reached the sum of $55,567,849.54. The annual contributions to the sinking fund during the three years above specified, amounting in the aggregate to $138,058,320.94 and deducted from the surplus as stated, were made by calling in for that purpose outstanding three-per-cent. bonds of the government. During the six months prior to June 30, 1887, the surplus revenue had grown so large by repeated accumulation and it was feared the withdrawal of this great sum of money needed by the people would so affect the business of the country, that the sum of $79,864,100 of such surplus was applied to the payment of the principal and interest of the three-per-cent. bonds still outstanding, and which were then payable at the option of the government.

The precarious condition of financial affairs among the people still needing relief, immediately after the 30th day of June, 1887, the remainder of the three-per-cent. bonds then outstanding, amounting with principal and interest to the sum of $18,877,500, were called in and applied to the sinking-fund contribution for the current fiscal year. Notwithstanding these operations of the Treasury Department, representations of distress in business circles not