During that year, the excess of exports over imports amounted to $167,683,912. The aggregate exports amounted to $835,638,658, an increase over the previous year of $125,199,217.
The usual statement of the operations of the different bureaus of the department was made, and, in closing my last annual report as Secretary of the Treasury, I said:
"The secretary takes pleasure in bearing testimony to the general fidelity and ability of the officers and employees of this department. As a rule they have, by experience and attention to duty, become almost indispensable to the public service. The larger portion of them have been in the department more than ten years, and several have risen by their efficiency from the lowest-grade clerks to high positions. In some cases their duties are technical and difficult, requiring the utmost accuracy; in others, they must be trusted with great sums, where the slightest ground for suspicion would involve their ruin; in others, they must act judicially upon legal questions affecting large private and public interests, as to which their decisions are practically final. It is a just subject of congratulation that, during the last year, there has been among these officers no instance of fraud, defalcation, or gross neglect of duty. The department is a well organized and well conducted business office, depending mainly for its success upon the integrity and fidelity of the heads of bureaus and chiefs of division. The secretary has, therefore, deemed it both wise and just to retain and reward the services of tried and faithful officers and clerks.
"During the last twenty years the business of this department has been greatly increased, and its efficiency and stability greatly improved. This improvement is due to the continuance during that period of the same general policy and the consequent absence of sweeping changes in the public service; to the fostering of merit by the retention and promotion of trained and capable men; and to the growth of the wholesome conviction in all quarters that training, no less than intelligence, is indispensable to good service. Great harm would come to the public interests should the fruits of this experience be lost, by whatever means the loss occurred. To protect not only the public service, but the people, from such a disaster, the secretary renews the recommendation made in a former report, that provision be made for a tenure of office for a fixed period, for removal only for cause, and for some increase of pay for long and faithful service."
The chief measure of importance, aside from the current appropriation bills, acted upon during that session of Congress was a bill to facilitate the refunding of the national debt. It was pending without action during the two preceding sessions, but was taken up in the early part of the third session. As the bill was originally reported, by Mr. Fernando Wood, from the committee of ways and means of the House of Representatives, it provided that in lieu of the bonds authorized by the refunding act of July 14, 1870, bearing five, four and a half, and four per cent. interest, bonds bearing interest at the rate of three and a half per cent. to the amount of $500,000,000, redeemable at the pleasure of the United States, and also notes to the amount of $200,000,000, bearing interest at the rate of three and a half per cent., redeemable at the pleasure of the United States after two years and payable in ten years, be issued.
The Secretary of the Treasury was authorized to issue any of these bonds or notes for any of the bonds of the United States, as they became redeemable, par for par. The bill further provided that the three and a half per cents. should be the only bonds receivable as security for national bank circulation.
Had this bill passed, as introduced, any time before the 4th of March, 1881, it would have saved the United States enormous sums of money and would have greatly strengthened the public credit. It was in harmony with the recommendations made by the President and myself in our annual reports. It was called up in the House of Representatives for definite action on the 14th of December, 1880, when those reports were before them. Instead of this action amendments of the wildest character were offered, and the committee which reported the bill acquiesced in radical changes, which made the execution of the law, if passed, practically impossible. The rate of interest was reduced to three per cent., and a provision made that no bonds should be taken as security for bank circulation except the three per cent. bonds provided for by that bill. Discussion was continued in the House and radical amendments were made until the 19th of January, 1881, when the bill, greatly changed, passed the House of Representatives. It was taken up in the Senate on the 15th of February. Mr. Bayard made a very fair statement of the terms and objects of the bill in an elaborate speech, from which I quote the following paragraphs:
"In little more than sixty days from this date a loan of the United States, bearing five per cent. interest, and amounting to $469,651,050, will, at the option of the government, become payable. On the 30th day of June next, two other loans, each bearing six per cent., the first for $145,786,500, and the other $57,787,250, will also mature at the option of the government. These facts are stated in the last report of the Secretary of the Treasury, and will be found on page ten of his report of last December. He has informed us that the surplus revenue accruing prior to the 1st of July, 1881, will amount to about fifty million dollars, and can and will be applied in part to the extinguishment of that debt. Bonds maturing on the 31st of December last were paid out of the accruing revenues. So that there will remain the sum of $637,350,000, to be provided for and funded at the option of the government, at such rate of interest as may be deemed advisable by Congress and can practicably be obtained.
"The sums that we are dealing with are enormous, affecting the welfare of every branch of our country's industry and of our entire people. The opportunity for reducing the rate of interest upon this enormous sum, and, not only that, but of placing the national debt more under the control of the government in regard to future payments, is now before us. The opportunity for doing this upon favorable terms should not be lost, and the only question before us, as legislators, is how we can best and most practically take advantage of the hour."
The bill as modified by the committee of the Senate would have enabled the treasury department to enter at once on the refunding of the public debt, and, in the then state of the money market, there would have been no doubt of the ready sale of the bonds and notes provided for and the redemption of the five and six per cent. bonds outstanding. The Senate, however, after long debates, disagreed to the amendments of the committee, and in substance passed the bill as it came from the House. The few amendments made were agreed to by the House, and the bill passed and was sent to the President on the 1st of March. On the 3rd of March it was returned by the President with a statement of his objections to its passage. These were based chiefly on the provision which required the banks to deposit in the treasury, as security for their circulating notes, bonds bearing three per cent. interest, which, in his judgment, was an insufficient security. His message was as follows: