As the war revenue bill passed the House its probable yield was variously estimated at from $90,000,000 to $105,000,000 per annum, the former being the better estimate. As amended in the Senate and finally adopted, it promised to yield at least $150,000,000 per annum. The actual yield in addition to the regular revenue during the first month was about $13,000,000.1 But the expenses of war during the first few months, if not for a long time after that, would be, it was estimated, at least double that sum and possibly more. Therefore, unless the Treasury had a considerable balance on hand, there would have been no possibility of conducting the war at all without immediate loans. The balance in the Treasury at the outbreak of the war was $225,000,000. Upon this were a number of claims, some of which, however, were not immediate. $100,000,000, known as the gold reserve, had to be held for the preservation of the parity of all parts of the circulation and the avoidance of general financial ruin.

1 It is not possible and probably never will be possible to state exactly how much the new taxes have increased the revenues. In the first place, the reports do not segregate the income obtained from the new taxes, from that obtained from the old ; and in the second place, the changes in the rates, and the existence of new taxes have changed the yield of the older parts of the system by an amount which cannot even be estimated. The total increase in the revenues for the fiscal year 1899 over 1898 was about $115,000,000.

Then there were $13,000,000 of fractional silver and minor coins, a large part of which was worn and unavailable, while the rest was needed for currency purposes throughout the country. $14,000,000 had been received from the sale of the Pacific Railroads; but although this sum was temporarily available it would, if it were spent, be necessary to raise an equivalent amount before January first to meet the Pacific Railroad bonds which came due at that time. $33,000,000 were held in trust for the redemption of the notes of national banks which had failed or which were redeeming their circulation. A part of this was temporarily available, but it would be necessary to replenish that fund at an early date if much were drawn from it. There were then, out of the $225,000,000, $160,000,000, of which a small part only was available, and that but for a short time. Anything drawn upon that would have to be replaced by January first at latest. Of the $65,000,000 remaining, $40,000,000 were necessary as the cash on hand for the ordinary operations of the government. That amount corresponds to the cash on hand which a merchant keeps in the till to make change or to meet small bills. This left but $25,000,000 for the initial expenses of the war, which in the state of unpreparedness would naturally be above the average. This $25,000,000 was all the unincumbered money in the Treasury to meet the appropriation of $50,000,000 made by Congress before war was declared. It was clear that the Secretary of the Treasury could not provide the sinews of war without the power to borrow, both for a short time, to anticipate the revenues expected from the new taxes, and for a long time to enable him to support any naval and military operations which might become necessary, however extensive.