present system,
in which a full use is made of gold and a large use of silver, for one
in which silver alone will circulate. Such an event would be at once
fatal to the further progress of the silver movement. Bimetallism is
the desired end, and the true friends of silver will be careful not to
overrun the goal and bring in silver monometallism with its necessary
attendants--the loss of our gold to Europe and the relief of the
pressure there for a larger currency. I have endeavored by the use of
official and unofficial agencies to keep a close observation of the
state of public sentiment in Europe upon this question and have not
found it to be such as to justify me in proposing an international
conference. There is, however, I am sure, a growing sentiment in Europe
in favor of a larger use of silver, and I know of no more effectual way
of promoting this sentiment than by accumulating gold here. A scarcity
of gold in the European reserves will be the most persuasive argument
for the use of silver.

The exports of gold to Europe, which began in February last and
continued until the close of July, aggregated over $70,000,000. The net
loss of gold during the fiscal year was nearly $68,000,000. That no
serious monetary disturbance resulted was most gratifying and gave to
Europe fresh evidence of the strength and stability of our financial
institutions. With the movement of crops the outflow of gold was
speedily stopped and a return set in. Up to December 1 we had recovered
of our gold lost at the port of New York $27,854,000, and it is
confidently believed that during the winter and spring this aggregate
will be steadily and largely increased.

The presence of a large cash surplus in the Treasury has for many years
been the subject of much unfavorable criticism, and has furnished an
argument to those who have desired to place the tariff upon a purely
revenue basis. It was agreed by all that the withdrawal from circulation
of so large an amount of money was an embarrassment to the business of
the country and made necessary the intervention of the Department at
frequent intervals to relieve threatened monetary panics. The surplus on
March 1, 1889, was $183,827,190.29. The policy of applying this surplus
to the redemption of the interest-bearing securities of the United
States was thought to be preferable to that of depositing it without
interest in selected national banks. There have been redeemed since
the date last mention