vindicate their public rights, and protect efficiently their commerce and citizens. No further reduction of the tariff, until that already provided for at the close of the ensuing year, would, therefore seem to be prudent The reduction or increase of the tariff is now referred to with a view to revenue alone, and not with a view to questions so much agitated heretofore, of protection, countervailing regulations, and the proper national policy to be pursued as to the imported luxuries and necessaries of life. On those points, it is considered far better for the real manufacturers themselves, not engaged in mere speculative investments, as well as for commerce, agriculture, and the revenue, that a policy should be selected, not unjust to either great interest or either great section of the Union, and, when once established, that frequent changes should be avoided, and the occasional increase or reduction of revenue, which may sometimes become proper for financial purposes, should be connected with articles wholly detached from the question of protection to manufactures. The tariff as to these troublesome points, is regarded as now adjusted by the act of March, 1833, till the year 1842, except in respect to such new regulations as may be required from time to time for the due enforcement of the spirit of that act, or such other changes as new occurrences may satisfy the great mass of the community are rendered proper for earlier modifications, without a departure from the spirit of the compromise then intended among the friends of free trade and of high protection.

In

A separate report on certain subjects relating to the due enforcement of the present tariff being in preparation, only one of them will now be adverted to. It is the evasion of the present duty on silks from beyond the Cape of Good Hope, by their being first landed, and occasionally recolored or restamped in Europe before imported into this country. this way, and by the present discrimination in favor of European silks, the revenue loses a very large amount. As some illustration of the loss by such discriminations, the recent one in favor of French silks alone amounted to over $300,000 a year, and that now in favor of French wines amounts to nearly $200,000 more, making a loss of over half a million a year on these two articles with only one nation. But while on the other points, independent of the spirit of the compromise of 1833, legislation may be regarded as still fairly open; it certainly ought not to be attempted on so delicate and difficult a subject, unless imperative cases for it shall occur, whether combined or not with any increase or reduction of the tariff that may become necessary, as a mere question of revenue, by the actual condition of our receipts and expenditures. So far from any increase being necessary at present, or prospectively, the balance now on hand in the Treasury, and the accruing revenue under existing laws, will, in the opinion of the department, prove amply sufficient to answer all ordinary demands, and, united with our other resources, to answer any unexpected demands of no very extraordinary amount.

As appears by the documents annexed, the Government has about $6,343,400 subject to general use, invested in the United States Bank stock, and the sum of $1,882,500 invested in different canal stocks; and, the proceeds of the sales of which, if authorized in any unexpected deficiency, would, in most cases, prove amply sufficient without any resort to an increased tariff.

On the contrary, neither of the available balances estimated to be on hand in 1835 or 1836, after deducting what will be wanted for outstanding appropriations, can probably exceed a million. Should the surplus, without that deduction, prove to be about six millions, as estimated, the undersigned respectfully submits that it will require no legislation, as that amount has been about the usual average balance retained on hand for many years—a balance that has furnished great facilities in meeting all claims, even at the remotest points, with punctuality and good faith; afforded much stability and elevation to our public credit, by providing seasonably the means for a punctilious fulfilment of contracts; and yielded so great security against sudden evils of every kind in financial affairs as to render one of near that amount provident and economical; and especially so at this moment, when any surplus which may exist, will accrue under a permanent compromise of the tariff, that contains within itself a provision to reduce still further the duties, and undoubtedly the whole amount of our revenue, alter the close of the coming year. It is a source of sincere congratulation, that, from the general prosperity of our commerce, and from the peace, industry, and abundance which so widely prevail over our fortunate country under its admirable institutions, researches are obliged to be directed rather to the due reduction or disposition of any occasional surplus that may bappen to exist in the Treasury, than to obtain sufficient for public purposes by taxation and other burdens. But, under our altered system as to duties and the public debt, it will be prudent to calculate that deficiencies as well as surpluses may happen oftener than formerly. In the opinion of the undersigned, however, neither can be soon anticipated so as to require immediate legislation. But should Congress think differently, no harm could arise from vesting a power in the Treasury Department, in case of an unexpected deficiency occurring in the revenue from any cause whatever, to sell such portions of our public stocks as may be necessary to supply the public wants growing out of actual appropriations. In a contingency of that kind, against which, in the present system of our revenue, and without a large ordinary surplus, to be applied as it can be spared or not for the payment of a public debt, in the manner heretofore practised, it is difficult to guard effectually against not only the occurrence of a deficiency, but its usual evils, a delay, if not great embarrassment and injury to public creditors, and a violation of our plighted faith. At the same time, it might be expedient to provide, that, whenever the collections of the revenue permanently authorized, should prove to be in an excess not immediately needed or useful as a proper surplus in the Treasury, the department should either obtain interest for it of the banks where the largest amounts are long deposited, or invest it temporarily in some safe stocks till needed, or till the tariff is again changed. This would probably secure a due interest on it, while retained, instead of the present and past modes of obtaining interest on any occasional surplus, by applying it, in discharge of the public debt, and which mode, since the payment of the latter, can no longer be pursued.

Should facts occur which appear to require legislation, such an arrangement, like a regulator in some large or complicated machinery, remedying any occasional irregularities, might operate more beneficially, as to any considerable excess or deficiency, than yearly changes of the

tariff, made to meet yearly vibrations in our revenue, or to meet yearly reductions or augmentations in our expenditures.

This subject of interest from the deposite banks, at some rate, and under some circumstances, was adverted to in a report by a committee in one House of Congress the last session, and would at this time be more fully examined, in connexion with that report, and the subsequent intimation of the United States Bank of its claim for damages on account of the late removal of the deposites, connected, it is apprehended, with the idea of a profit or interest derived from them, were it supposed that either pont could, in the present condition of things, be considered of any practical importance. But the balance of money at present on hand, as before remarked, is merely the usual and couvenient amount for current fiscal operations, and most of it is liable, at any moment, to be withdrawn to meet existing appropriations.

While the intimation of the bank, resting, as it probably must, on an impression that the bonus was paid instead of interest on the public deposites, is not believed to be supported by the language or spitit of the charter, which required the bonus "for the exclusive privileges and benefits conferred by this act on the bank," and which exclusive favors, whether termed privileges or benefits, consisted principally in the sole right of banking for twenty years, and for which alone Mr. Madison, in his veto of 1815, and Mr. Dallas, in his letter of December 24, 1815, thought that a bonus should be paid to the Government; the latter further observed, that, "independent of the bonus here proposed to be exacted, there are undoubtedly many public advantages to be drawn from the establishment of a national bank, but they are generally of an incidental kind, and, as in the case of deposites and distribution of the revenue, may be regarded in the light of equivalents, not for the monopoly of the charter, but for the reciprocal advantage of a fiscal connexion with the Government."

If the reasons should ever be presented to this department, in support of the late intimation of a demand for damages for the removal of the deposites, iu a case where the bonus was claimed and paid on the above grounds, and where the right to remove the deposites was expressly reserved in the charter to the officer removing them, it will then, probably, be in season to enter more fully into this collateral question. Or should the balance in the possession of the State banks at any time become much larger than the current demands existing against the Treasury, it will, if Congress do not earlier think proper to act on it prospectively, not to authorize any temporary investment of it, be then considered necessary and proper for this department to examine in what cases, and under what circumstances, on what surpluses, and at what rate, interest could equitably be demanded, in addition to the useful duties performed by the selected banks in behalf of the Treasury.

On these points, however, it is hoped that this department will not be understood as recommending that taxes should ever be imposed with a view to permit a large surplus, any more than a deficiency, to occur; but that, when the former unexpectedly and unintentionally happens, an income should be realized from it, by interest or an investment, until, at the end of every few years, a thorough revision of the tariff would, in the pursuit of this policy, be made, and so graduated, as during the next

succeeding term to be likely to correct any great irregularities, whether excesses or deficiencies, that had happened during the preceding term, and to lead to the sale and use of any interest or investments which, in the mean time, had accumulated.

Those other questions naturally connected with the present deposite banks, and, indeed, with our whole existing system of finance, so far as regards the keeping and disbursing the public money, might here bet appropriately considered. Yet, without any desire to avoid, but rather from a wish to submit, that full and frank discussion of them with their acknowledged importance, and the exciting interest in them, demand from the fiscal department of the Government, they will be postponed to a separate supplemental report, which will be confined exclusively to their consideration, and will soon be presented to Congress.

It appears to the undersigned that a change in the commencement of the fiscal year, and of the time at which the annual appropriations begin, would be a great improvement in the financial operations of the Government If the year was to commence after the last day of March instead of September, and the annual appropriations begin from the same date, many delays and embarrassments could be avoided, and the infor mation on the condition of the receipts and expenditures of the previous year, to be laid before Congress each session, could be much more full and accurate.

A

Upon the subject of the new coinage of gold, and the operation of the acts of the last session relating to it, and the value and tender of foreign coins, this department does not, until further experience is had, contemplate offering many recommendations for new legislation particular suggestion, deemed proper, is that the one dollar gold coin, originally embraced in the late act, should be authorized, If found on trial to be convenient, as small gold coins have been found, some of less and some of little larger amount, in Portugal, Russia, Spain, Turkey, and Switzerland, it does not seem to comport with the interest and welfare of the community to prevent here its coinage and circulation; and if not found on trial to be useful, the sagacity of self interest will soon lead to the abandonment of its coinage, by making no demand for lit. Thus the community can in no event sustin much, if any injury, from it, while the facilities of the public, by having a coin of either metal, gold or silver, as small as one dollar, may be greatly increased. This kind of legislation, with a view to provide a full supply and variety of coin instead of bills below five and ten dollars, is particularly conducive to the security of the poor and middling classes, who, as they own but little in, and profit but little by, banks, should be subjected to as small risk as practicable by their bills. The wealthy and commercial, for whose benefit, chiefly, banks are instituted, will then chiefly use their bills, and suffer by them if forged or depreciated; while the laboring classes, and men of small means will, by the justice and paternal care of the Government, generally be provided with a currency of hard money, not exposed to any risk of failures, and to be used for all dealings of such an amount as their daily or weekly wants may in most cases require.

The new coinage has as yet been confined principally to the half and quarter eagles, aud has equalled, in all, about $3,114,090, or, in four months, more than four times the annual average coinage of gold for many years past.

The demand for other coins has also been promptly met throughout the year. To aid in carrying the new law into efficient operation, this department, last August, placed in the hand of the Director of the mint, under the act of April 2, 1792, twenty thousand dollars, and ten thousand more in September, as it was needed, and could be, without inconvenience, spared from the Treasury By this course many have been enabled at once to realize funds from their deposite of bullion or coin. and the mint to continue its operations uninterruptedly, and to supply promptly, when desired, coins already prepared for circulation.

The strong disposition of the public to use the new coinage has been observed with pleasure; and the liberal aid of many of the deposite banks in assisting to increase its circulation, has proved very useful, and deserves commendation. As the new coinage commenced nearly in the middle of the year, and the date, till next January, could not, by law, be altered, so as to distinguish the new from the old coin, such other alterations was adopted by the director of the mint as the law permitted, and as were calculated to aid the community in readily discriminating between them. After the next year begins, the new date alone will enable the public to distinguish the new coins; and such modifications only will be made in the former emblems as taste and convenience may, in the opinion of the director, and without au omission of any thing required by Congress, appear to demand His report, which it is expected will soon be received and presented, will probably furnish every further particular connected with the concerns of the mint that may be interesting. But it is considered proper to invite the attention of Congress to a change in the law respecting the organization of the mint establishment, so as hereafter to prevent its operations in refining and coining for others from being a tax on the Treasury, and any longer swelling the large amount of our annual expenditures. This could easily be effected by imposing a duty or seignorage of about one per cent. on the prompt coinage of silver, and one fourth per cent. on that of gold; the present coinage of copper now defraying its own expense This would be no more burdensome to the persons holding bullion than the delay now allowed for the recoinage; and which delay of forty days, [or one half per cent. discount if delivered in five day,] and consequent loss of interest, could, with such a seignorage, and the advances now authorized from the Treasury, be, without inconvenience, reduced to eight or ten days, and the whole establishment be thus sustained by its own earnings, without much, if any, increased cost to either individuals or the public. But, in such case, if the cost should ever be increased to individuals, some additional inducement will be held out to prevent either the exportation or melting of our coin, which have been so great, before the late change in the law, as to have left in deposite and circulation, in this country, au amount of it not exceeding that struck in two or three out of the forty years during which the mint has been in operation. The expenses and labors of the mint, equalling, on an average, about $20,000 a year, or $800,000 in all, excluding buildings, have thus, except for two years, been entirely lost to the country.

It has been deemed desirable to attempt some improvements in the revenue cutter service. With such a view, all its regulations have been revised and republished. By those, it has been endeavored to promote the cause of temperance, and thereby to increase the health and efficiency