The Treasury chart entitled "Gold and Silver" above mentioned portrays clearly an abrupt change from the prosperous condition of the Bland-Allison Act to the impending trouble under the Sherman Act starting in 1891. Throughout the life of the Bland-Allison Act money in circulation and other monetary elements were increasing, but under the Sherman Act the Treasury notes issued in payment for silver were rapidly returned to the Treasury to be redeemed in gold. This process continued until the Treasury was virtually depleted of gold; and the silver which had accumulated in the Treasury became free, because of the reduced number of certificates in circulation representing same.

The second Treasury chart entitled: "Cash balance in the United States Treasury and its Composition at the End of Each Month." This chart is particularly valuable for the purpose of showing the accumulation of United States notes in the Treasury beginning with the third quarter of 1893; also to show the very limited amount of Treasury notes of 1890 which were accumulated in the Treasury at no time exceeding 35 millions whereas 155 million of same had been issued in payment for the silver purchased under the Sherman Act. More than half of these Treasury certificates were redeemed in gold during the operation of the silver purchases under that act. It must be noted on this chart also that the heavy withdrawals of gold from the Treasury did not commence until the Sherman Act went into effect making the Treasury notes of 1890 available for the deliberate purpose of withdrawing gold.

In 1890 the Baring Bank failure took place in London. This failure was of such enormous proportion that the Bank of England was threatened with failure, but was saved by a gold loan from France.

The late Mr. Henry Clews, one of New York's leading financiers, has written a complete description of the Baring Bank failure, showing it to have been the main cause of the panic at that time in Europe, and contributing to the 1893 panic in the United States. He clearly states that the silver mined and purchased in the United States in no way contributed to the panic and, as a matter of fact, had been the means of establishing this country on a firm, prosperous foundation. I have a copy of Mr. Clews' article for the record.

The CHAIRMAN. Those letters and articles should be put in at these points.

Mr. TRENT. The third Treasury chart is submitted for the record, entitled "Diagram Exhibiting the Actual and Relative Variations at Stated Periods, Beginning October 5, 1863, and Ending October 5, 1897," and the number of national banks and in the aggregate the amount of chief items of their resources and liabilities.

(The Treasury chart referred to faces this page.)

DIAGRAM

The diagram accompanying this report exhibits in a very striking manner the main features of the national banking system, and how each has varied during the twenty-one years since the peace of the country has been reestablished.

On the 1st of January 1866, there were 1,582 national banks; on the 7th of October 1886, there were 2,852-a net increase in number alone of 1,270.

The following table groups in a compendious form the most important facts shown in the diagram:

An examination of this table shows that the aggregate capital, surplus, undivided profits, circulation, and deposits have increased from $1.21 billions in January 1866, to $2.173 billions in October 1886 which is less than double, while the loans and discounts have gone up from $500 millions to $1.443 billions, which is nearly treble, showing how much more widely the banks are now identified with the general business of the country than they were 21 years ago.

The investments in bonds have taken an opposite course. Amounting to $440 millions in 1866, increasing to $712 millions in April 1879, they had subsided by 7th October last to $291 millions, but little more than half what they were in 1866, and scarcely over a third of what they momentarily amounted to in 1879. The specie, which at the beginning of the period was but $19 millions, had got down in October 1875 to $8 millions, is now $156 millions, and in July 1885, was $177 millions.

It is interesting to see how these changes appear when reduced to percentages. The capital, surplus, undivided profits, circulation, and deposits constitute together the fund upon which a bank does its business.

Loans and discounts, United States bonds, specie, etc., are different forms in which this fund is invested. Taking the fund at $1.21 billions in 1866 and at $2.173 billions in 1886, these investments represent the following proportions of those amounts, viz:

Another striking fact is that in 1866 the circulation was $213 millions and in 1886 it is only $228 millions. At the former period, therefore, the circulation was nearly 45 percent of the capital, surplus, and undivided profits, while now it is only about 29 percent.

The foregoing chart depicts that bank loans and discounts were $20 millions in 1863, and $2.18 billions in 1893, and $2.06 billions in 1897. Individual deposits increased from $20 millions to $1.73 billions in 1893, and to $1.85 billions in 1897. Aggregate capital, surplus, and profit increased from $20 millions to $1.02 billions in 1893, and $960 millions in 1897. Capital stock increased from practically zero to $680 millions in 1893 and $630 millions in 1897. Lawful money reserves increased from $20 millions to $400 millions in 1897. United States bonds held by banks decreased from 1865, at $440 millions, to $260 millions in 1897. Lawful money reserves increased from $10

millions in 1863, to $400 millions in 1897. The tremendous increase in wealth of the banks of the United States under the Bland-Allison Act was directly a result of this enormous production and monetization of silver with the corresponding gold production which attends the production of silver. It was unfortunate that under both acts. Government purchases and coinage fell far short of silver production, leaving a vast surplus of the white metal to be exported abroad at prices determined in London. The policy in London was to devalue silver as much as possible, their purpose and policy being the exportation of silver to oriental colonies and possessions, under which they made enormous exchange profits. The canals and railroads of India, built throughout this period, were primarily financed with Americanproduced silver sold at declining prices. These Treasury Department charts have been out of print and forgotten about for a generation. They afford the most complete and authentic monetary and financial information available and are deserving of most profound study in connection with all phases of the American economy under and after the Silver Purchase Acts.

The CHAIRMAN. Mr. Trent, will you proceed with the further explanation concerning the operation of the Bland-Allison and Sherman Acts?

Mr. TRENT. I have a statement here.

I would like to put a table in the record at this point, entitled "Surplus Revenue and Taxation." This table is taken from Dewey's Financial History of America. It will be noted that the total obligations of the United States in 1880 were $2,120.4 millions with cash in the Treasury amounting to $201.1 millions, and that the amount was reduced in 1890 to $1,552 millions, with cash in Treasury of $661.3 millions.

The debt, less cash, in 1880, was $1,919.3 millions and in 1890 this amount had been reduced to $890.8 millions-a total reduction in the national debt, in 11 years, of over $1 billion. This remarkable financial performance became possible because of the operation of the Bland-Allison Act.

(The table presented by Mr. Trent is as follows:)