(Correspondence AMERICAN ECONOMIST.) WASHINGTON, D. C., March 2, 1899.It is the general expectation among public men that during the recess of Congress. while the executive departments of the Government are engaged in bringing order out of chaos in the islands wrested from Spain, the commercial interests of the United States will be alert to the advantages which may be obtained in promoting the export trade of this country. Notwithstanding the fact that the present Congress closes its labors without reaching an agreement with respect to necessary legislation for promoting the merchant marine interests, which is so essential for the betterment of the nation's export trade, it should not be forgotten that as our trade has increased with marvelous rapidity during the past thirty years, while hampered by conditions so advantageous to the exporters of other countries, the producers of this country will not abandon hope of increasing their trade abroad, and they will push for supremacy in the face of existing obstacles.

The fact that the foreign trade of the United States has increased in greater relative proportions during the past ten years than has that of any great commercial nation of the world is evidence that American pluck and perseverance will win in the face of obstacles, and even pending that time when the American Congress shall awaken to a realizing sense of the duty it owes to our

merchant marine and to our producers who are seeking foreign markets for surplus commodities.

One of the most interesting points respecting the increase in our export trade upon lines of goods produced by high grade machinery methods comes from the Orient, where American exporters are finding new and valuable markets for surplus products of the farm and the mill. In this connection it is well to bear in mind the suggestion by President McKinley that whatever changes may be necessary in connection with our laws affecting our export trade, they shall be made with an eye single to strengthening those laws and preserving the interests of this country which have been built up under Protection; it is important always to keep well to the front the fact that the triumphs which our producers are scoring in the new markets are on lines of goods produced by our superior machinery. This is a fact which American statesmen and all interested in our export trade should not for a moment lose sight of. The point brought out in the information from the Orient covers certain lines of exports of cotton goods into China during the past ten years. The item worthy of special notice is the fact that in our exports to China of plain cotton goods, the cheaper grades, largely the product of machinery, we have made decided gains. During the same period the British manufacturers have lost ground in the Chinese markets. While it is true that of the receipts of these low grade cottons England still holds the larger part of the Chinese trade, it is worthy of note that the gains by our exporters are in much the greater ratio. In the period covered by the ten years from 1887 to 1897 there was an increase of more than 121 per cent. in our exports of plain cotton fabrics to the Chinese markets, while during the same time there was a diminution of British exports of this grade of goods aggregating 13 per cent. In commenting upon these changed conditions the United States Consul-General at Shanghai says:

The increase of 121 per cent. in quantity, as against an increase of only 59 per cent. in value, shows plainly that American manufacturers are now competing with Manchester on lower grade goods, which formerly they did not touch; in fact, that, whereas ten years ago America contented herself with simply exporting the surplus of her domestic manufacturers, she is now laying herself out for direct competition with the Lancashire export trade.

The significance of these figures may be shown by an examination of them in more detail. In 1887 the British exports of plain cotton goods to China aggregated about $18,000,000 worth, while our exports of this class of goods to China aggregated but $5,330,000 worth. In 1897 the British exports to China of these plain goods had fallen to about

$16,000,000 worth, while those from this country had increased to more than $8,000,000 worth. Not only is the ratio of trade between these competing countries in the Chinese Empire changed in a marked degree, the manufacturers of this country now sending to China half the valuation of this class of goods that is sent by the British, as against onethird ten years ago, but this is accomplished on these low-grade goods, whereas the British held their own on fancy cottons, in fact increasing their exports of the latter lines by 36 per cent., while the American manufacturers have been unable to make any headway worth mentioning in those lines.

These points on our increase of trade in this special line agree with the general totals respecting our export trade and its gains compared with that of Great Britain during the past ten years. In that period our export trade increased more than 50 per cent., while that of Great Britain really decreased more than 12 per cent. That is the answer which the Protective policy makes, with the cold, hard facts of trade statistics, in demonstrating the advantage of that policy in assisting the manufacturers of this country so to improve their methods and their general conditions as to make them capable of competing in the markets of the world with the British manufacturers on certain lines. During that same period the United States gave up their home markets to an increase of but 5 per cent. in the matter of imports, whereas the boasted Free-Trade policy of Great Britain necessitated the giving up of an increased market for 16 per cent. more imports to that country. In respect to the ratio of exports to imports the manufacturers and producers of this country made the best showing during the past ten years of any people in the commercial nations of the earth. Japan made a larger increase in the percentage of her exports, but the percentage of her imports was correspondingly increased.

Should Build Our Own Ships. Whether our registry laws stand or not, now, if the economic principle of cheapness is to govern our people in the purchase of new ships, they will come to our own shipbuilders, instead of going abroad. It will be all the more gratifying to our people as a whole to see American shipyards constructing the ships needed for the world's foreign commerce, and if something can now be done to induce our own people to invest in such ships, the development and expansion of American shipbuilding during the next generation will be on a par with our railroad construction during the last.-Trenton (N. J.) "Gazette."

OUR NEW DUTIES.

Address of President McKinley at the Annual Dinner of the Home Market Club.

Responsibilities Thrust Upon Us by the Unexpected Eventualities of a Successful War.

Grave Problems to Be Solved on the Basis of Conscience, Honor, Wisdom and Justice.

[Revised, Corrected and Authorized Version of the Address of President McKinley at the Annual Dinner of the Home Market Club, Boston, February 16, 1899.]

Mr. President, members of the Home Market Club, ladies and gentlemen: I have been deeply and profoundly moved at this manifestation of your good-will and the cordial welcome extended by the Governor of your great Commonwealth, as well as from the chief executive officer of this the principal city of your state. No one could sit in this magnificent presence, listening to the patriotic strains from choir and orchestra, without knowing what this great audience was thinking most about. It is thinking of country, because of love for it and faith in themselves and its future. I thank the Governor of the Commonwealth of Massachusetts, I thank the Mayor of the city of Boston, for their warm and generous words of greeting.

My fellow-citizens, the years go by quickly. It seems not so long, but it is, in fact, six years since it was my honor to be a guest of the Home Market Club. Much has happened in the intervening time. Issues which were then engaging us have been settled or put aside for larger and more absorbing ones. Domestic conditions have improved and are generally satisfactory. We have made progress in industry and have realized the prosperity for which we have been striving. We have had four long years of adversity which taught us some lessons which will never be unlearned, and which will be valuable in guiding our future action.

We have not only been successful in our financial and business affairs, but have been successful in a war with a foreign power which has added great glory to American arms and a new chapter to American history.

Mighty Problems to Face. I do not know why in the year 1899 this republic has unexpectedly had placed before it mighty problems which it must face and meet. They have come and are here and they could not be kept away. Many who were impatient for the conflict a year ago, apparently heedless of its larger results, are the first to cry out against the far

reaching consequences of their own act. Those of us who dreaded war most and whose every effort was directed to prevent it, had fears of new and grave problems which might follow its inauguration. The evolution of events which no man could control has brought these problems upon us. Certain it is that they have not come through any fault on our own part, but as a high obligation, and we meet them with a clear conscience and unselfish purpose, and with good heart resolve to undertake their solution.

War was declared in April, 1898, with practical unanimity by the Congress, and, once upon us, was sustained by like unanimity among the people. There had been many who had tried to avert it, as, on the other hand, there were many who would have precipitated it at an early date. In its prosecution and conclusion the great majority of our countrymen of every section believed they were fighting in a just cause, and at home or at sea or in the field they had part in its glorious triumphs. It was the war of an undivided nation. Every great act in its progress from Manila to Santiago, from Guam to Porto Rico, met universal and hearty commendation. The protocol commanded the practically unanimous approval of the American people. It was welcomed by every lover of peace beneath the flag.

Our Position in the Philippines. The Philippines, like Cuba and Puerto Rico, were intrusted to our hands by the war, and to that great trust, under the Providence of God and in the name of human progress and civilization, we are committed. It is a trust we have not sought; it is a trust from which we will not flinch. The American people will hold up the hands of their servants at home to whom they commit its execution, while Dewey and Otis and the brave men whom they command will have the support of the country in upholding our flag where it now floats, the symbol and assurance of liberty and justice.

What nation was ever able to write an accurate programme of the war upon which it was entering, much less decree in advance the scope of its results? Congress can declare war, but a higher power decrees its bounds and fixes its relations and responsibilities, The president can direct the movements of soldiers on the field and fleets upon the sea, but he cannot foresee the close of such movements or prescribe their limits. He cannot anticipate or avoid the consequences, but he must meet them. No accurate map of nations engaged in war can be traced until the war is over, nor can the measure of responsibility be fixed till the last

gun is fired and the verdict embodied in the stipulations of peace.

Even

We hear no complaint of the relations created by the war between this Government and the islands of Cuba and Puerto Rico. There are some, however, who regard the Philippines as in a different relation; but whatever variety of views there may be on this phase of the question there is universal agreement that the Philippines shall not be turned back to Spain. No true American consents to that. if unwilling to accept them ourselves, it would have been a weak evasion of manly duty to require Spain to transfer them to some other power or powers, and thus shirk our own responsibility. Even if we had had, as we did not have, the power to compel such a transfer, it could not have been made without the most serious international complications.

But One Alternative.

Such a course could not be thought of. And yet, had we refused to accept the cession of them we should have had no power over them even for their own good. We could not discharge the responsibilities upon us until these islands became ours, either by conquest or treaty. There was but one alternative, and that was either Spain or the United States in the Philippines. The other suggestions-first, that they should be tossed into the arena of contention for the strife of nations; or, second, be left to the anarchy and chaos of no protectorate at shameful to be considered.

Fre too

The treaty gave them to the United States. Could we have required less and done our duty? Could we after freeing the Filipinos from the domination of Spain have left them without government and without power to protect life and property or to perform the international obligations essential to an Could independent state? we have left them in a state of anarchy and justified ourselves in our own consciences or before the tribunal of mankind? Could we have done that in the sight of God and man?

The Sole Consideration.

Our own concern was not for territory or trade or empire, but for the people whose interests and destiny, without our willing it, had been put in our hands. It was with this feeling that from the first day to the last not one word or line went from the executive in Washington to our military and naval commanders in Manila or to our Peace Commissioners at Paris at did not put as the sole purpose to be kept in mind first, after the success of our arms and the maintenance of our own honor, the welfare and happiness and the rights of the inhabitants of the (Continued on page 105.)

lations and instructions promulgated

PUBLISHED WEEKLY BY
THE AMERICAN

PROTECTIVE TARIFF LEAGUE

Plain Facts Plainly Stated.

The intemperate and oftentimes untruthful manner in which the Personal Baggage law and the method of its enforcement have been assailed by FreeTrade editors and writers of communications in the Free-Trade newspapers is, when considered in the light of plain fact and plain law, an exceedingly discreditable phase of modern journalism. The course pursued in relation to this matter is all the more discreditable because of the dense ignorance displayed concerning the law, the ethics and the m in the case. With one accord the advocates of unrestricted foreign competition, or, in lieu of that, unrestricted smuggling, have turned their batteries upon the Dingley Tariff law of July 24, 1897, and upon what they falsely conceive to be the special regu

tion with the personal baggage provision of that law.

Essential to a correct estimate of the merits of the questions involved in this foolish Free-Trade hullabaloo is an understanding of two simple facts, viz.: First. That the present regulations are based upon laws which have been of long standing and the latest revision of which was made in 1878.

Second. The only point touching the Dingley Tariff arising in connection with these regulations is the limitation of the amount of baggage to be admitted upon free entry.

Section 2199 of the Revised Statutes -not of the Dingley law, it will be observed-based upon laws passed in 1789 and 1823, is as follows:

In order to ascertain what articles ought to be exempted as the wearing apparel, and other personal baggage, and the tools or im plements of a mechanical trade only, of persons who arrive in the United States, due entry thereof, as of other merchandise, but separate and distinct from that of any other merchandise, imported from a foreign port, shall be made with the collector of the district in which the articles are intended to bc landed by the owner thereof, or his agent, expressing the persons by whom or for whom such entry is made, and particularizing the several packages, and their contents, with their marks and numbers; and the person who shall make the entry shall take and subscribe an oath before the collector, declaring that the entry subscribed by him and to which the oath is annexed contains, to the best of his knowledge and belief, a just and true account of the contents of the several packages mentioned in the entry, specifying the name of the vessel, of her master and of the port from which she has arrived; and that such packages contain no merchandise whatever other than wearing apparel, personal baggage or, as the case may be, tools of trade, specifying it; that they are all the property of a person named who has arrived or is shortly expected to arrive in the United States, and are not directly or Indirectly imported for any other, or intended for sale.

Section 2802 of the Revised Statutes -not of the Dingley law-based upon a law passed in 1799, is as follows:

Whenever any article subject to duty is found in the baggage of any person arriving within the United States, which was not, at the time of making entry for such baggage, mentioned to the collector before whom such entry was made, by the person making entry, such article shall be forfeited, and the person in whose baggage it is found shall be liable to a penalty of treble the value of such article.

Section 2064 of the Revised Statutes -not of the Dingley law-based upon a law passed in 1866, confers upon the Secretary of the Treasury the following authority:

The Secretary of the Treasury may from time to time prescribe regulations for the search of persons and baggage, and for the employment of female inspectors for the examination and search of persons of their own sex and all persons coming into the United States from foreign countries shall be liable to detention and search by author

ized officers or agents of the Government, under such regulations.

Under the provisions of law as above quoted, it is made the duty, not the option, of the Treasury Department to require of incoming passengers a declaration and entry setting forth a list of dutiable articles contained in their baggage. It is no new law or regulation; on the contrary, it is a very old law and a very old regulation. Every facility for observing the requirements of the law with the least possible delay or annoyance is provided by the customs officials, and the honest incoming passenger, who has no desire to evade the plain and peremptory provisions of the law, has little ground for complaint. He will, on the contrary, find that one valuable effect of the present mode of enforcing the law is that of protecting him against the unwarranted demands of unscrupulous officials.

It is the dishonest passenger-he or she who attempts to evade the payment of proper duties on goods purchased abroad-who will suffer trouble and annoyance. It is the dishonest passenger who ought to suffer. High-toned smuggling has had its day, and it is full time to call a halt. By a thorough and impartial enforcement of the law, and in no other way, can equal justice and fair treatment be assured to all sorts and conditions of people who bring dutiable goods into this country.

Those Who Worry.

Reviewing the course of British trade for 1898 the London "Economist" says:

Our exports to foreign countries fell off by £3,551,000, and on this side of the account, also, it is the trade with the United States that is almost solely accountable. That country paid us only £14,400,000 for our products, as compared with £21,000,000 in the previous year. The biggest falling off was in worsted and woolen goods, the value of these being about £2,200,000 less than in 1897. There were heavy decreases in other textiles, in tin plates, alkali and more or less in most of the articles separately classified.

They are taking these heavy decreases in trade quite philosophically over there. Believing them to be inevitable, our British brethren look with resignation upon the loss of $35,000,000 of sales to and the gain of a still larger amount in purchases from the United States. The only people who seem to be worrying about the matter are the American Free-Traders, who cannot endure the thought of their own country constantly growing richer as the result of selling more than it buys.

English friendship comes high. If we are to have it, and our Anglomaniacs proclaim we must have it at any and every cost, we must pay the price even if in the act of paying we sacrifice the most vital interests of the Republic"Irish World."

Distribution of Our Money Supply.

Among the many striking evidences of the existing prosperous financial conditions of the country, perhaps one of the most important is conspicuously brought out by a study of the returns made to the Comptroller of the Currency of the condtion of the national banks of New York on February 4. In the single item representing country deposits in this city we find the enormous sum of $390,577,300, a gain, compared with December, 1898, of $95,335,200.

During

This item needs some explanation to clearly show its importance. certain seasons of the year unemployed balances of banks in the interior accumulate by reason of relaxation in the local demand for money from various causes; the periodical suspension in the movement of the crops, for example. At these seasons the interior banks, with a view to the employment of their surplus balances, send them to their respective centers, either in the form of actual cash or checks, and interest is paid on such balances. The banks at these centers, in turn, send their unemployed surplus, which is augmented by the inflow from their sections, to New York, where also interest is paid on such balances, and moreover these balances are counted by the remitting banks as part of their reserve required by law to be held by them. These country balances are retained in New York until the crop movement is again resumed, when they are returned to the interior banks.

This ebb and flow of money or credits is, in normal years, almost as regular as the tide. Last year, however, the outward movement was comparatively small, owing to the fact that during the greater part of the year the Western banks were full of money, the result of the marketing of the abundant crops of the past two seasons at high prices, and, therefore, balances of interior banks on deposit in New York at the beginning of the year were not disturbed

until the outbreak of the war with Spain, and then the balances withdrawn, through fear of financial derangement, were promptly returned to New York. Though the crop movement was abnormally great, requiring large amounts of money, the supply of funds at the West was sufficient to meet the demand without drawing heavily on New York balances. Moreover, money at all the chief centers in the interior, and even in comparatively remote sections, was offered so abundantly that rates of interest were almost unprecedentedly low, and they so continue.

Comparing the amount of balances belonging to interior banks held in New York October 6, 1896, when the country was in a state of extreme financial

unrest by reason of the then pending Presidential election, with such balances held February 4 of this year, we find the unprecedented gain of $220,000,000, of which increase there was over $95,000,000, as above noted, since December, 1898, a period of three months. Yet, notwithstanding this enormous transfer of balances from the interior to this center, which ordinarily would indicate stagnation in business, and in industrial enterprises at the West, we find, on every hand, evidence of prosperous conditions in almost every branch of trade and industry throughout every part of the country. Money is plentiful everywhere; confidence abounds; capital is seeking employment in new fields to an extent

Will the Cat Come Back?

scarcely ever before known, more than $1,500,000,000 being invested in industries alone last year; prices of important staples are advancing in response to urgent demands, and the country has reached an unprecedented state of prosperity.

The question naturally arises, not what is the basis of this prosperity, but whence comes this marvelous coincidence of prosperous conditions and cheap and abundant money. The underlying basis of our prosperity is confidence. The people everywhere have confidence in the administration of President McKinley; in the beneficence of the policy of Protection inaugurated and promoted by the Republican party; in the ability of the party, which has conducted to a brilliantly successful issue the war with Spain, to reap the full benefits of our victory; in the maintenance of such financial conditions as have not been enjoyed since before the war of the rebellion, and in the fact that for the remainder of the century at least no political change can occur to disturb this confidence.

The reason for the coincidence of prosperous conditions and cheap money will be readily seen when we consider

our manufacturing industries of all kinds have grown to enormous proportions, and that our exports of agricultural products and of manufactures have never been surpassed, while our favorable international trade balances have constantly increased month by month. All these are unmistakable contributions to our material wealth.

So far as concerns actual money we have imported of gold over $158,000,000, and in addition have retained the product of our mines, amounting to more than $60,000,000, making a total of about $220,000,000, entirely new money. There is also an invisible supply from hoards, of which account should be taken, which hoards have been unlocked by the confidence which has prevailed in the stability of our currency. With this addition of gold to the circulation in the banks, or as a basis for credits, and, considering the fact that only about 5 per cent. of the vast volume of bank exchanges, amounting last year to nearly $70,000,000,000, requires to be settled with actual cash, we can form some idea of the sources and the marvelous expansibility of our money supply.

But if from any cause confidence should be disturbed, this basis for financial stability would shrink into hoards and an entire overthrow of confidence would bring about panic, critical business conditions, a withdrawal of funds from central and all other depositories, and consequently a money famine with disastrous results to all interests. How vitally important, therefore, not only is the maintenance but the promotion of the growth of confidence. This can best be maintained and promoted by the upholding of the administration in the policies which it has inaugurated and steadily developed, and above all by the firm establishment of the policy of Protection which has been so abundantly fruitful of beneficent results.

A Ray of Intelligence.

The cry for new manufacturing industries comes from all over the State. Exempt from taxation for ten years all who engage in manufacturing and the result will be most gratifying. Little Rock (Ark.) "Republican."

In other words, adopt and put in practice the principle of Protection to home labor and industry which the South has been so foolishly fighting, for, lo, these many years. There is in this resolve a ray of intelligence that gives promise of a bigger and broader light in the near future.