effect of new enterprizes. This will also act in restraint of importations and consumption. In the estimated receipts from customs for the three remaining quarters of the current fiscal year, the effects of the reciprocity treaty and reduced importations have been considered; whilst, also, the same causes will operate in the sale of the public lands; but the effect of the act graduating the price has been considered sufficient to keep up the receipts from the latter source to what they were for the fiscal year 1854.

The estimate of receipts for the fiscal year 1856 has been made from an expectation that the same causes which will operate to reduce the importations and consumption of foreign goods for the remaining three quarters of the fiscal year 1855, will be continued through a part of the succeeding year, and sensibly affect the importation and consumption of foreign goods.

The accompanying table, 3, exhibits the particulars of the public debt on the 1st of July, 1853, and the accompanying table, 4, exhibits the particulars of the public debt on the 1st of July, 1854, to which is appended a table exhibiting the interest paid on the public debt during the fiscal year 1854, and the principal, interest, and premium, on the part redeemed within that year. Table 5 exhibits the principal, interest, and premium on the public debt redeemed from the 1st July, 1854, to the 20th November, 1854. From these tables it appears that the sum of $20,098,422 73 of the public debt was redeemed between the 1st of July, 1853, and the 1st of July, 1854, and that the interest and premium paid on the amount redeemed was $3,345,545 23; and the principal, interest, and premium on that part of the public debt redeemed between the 1st of July, 1854, and the 20th of November, 1854, was $2,604,203 51.

The table 6, which accompanies this report, exhibits the tonnage engaged in our foreign and coasting trade from the year 1789 to the 30th of June, 1854. It will be seen the increase for the last year has been 395,8923 tons.

The table, 7, which accompanies this report, exhibits our exports and imports for the same time; and the table, 8, which also accompanies this report, exhibits the sums received into the treasury from customs, public lands, miscellaneous sources, including loans and treasury notes, and the tariff, and particular price of the public lands under which the same was received; also the annual expenditures during the same period. From the table of exports and imports it appears the imports are $26,321,317 in excess of the exports, no account being taken of the precious metals brought in by

emigrants. The profits on our exports, and the freights earned by our ships in foreign trade, ought to more than cover this excess. The exports include over $38,000,000 of specie and bullion exported; but, whilst specie and bullion are products of labor in our mines, they rank with any other product, and must enter into our foreign trade as articles of commerce, and can have no prejudicial effect upon the great interests of the country. These tables combined, exhibit the growth of our commercial marine, of our exports and imports, and the receipts and expenditures of our government, and prove that the receipts into the treasury are sufficient to meet all reasonable expenditures, discharge the public debt, and allow a reduction of the rate of taxation, with almost a certainty that our increasing commerce will give an increase of revenue equal to the reasonable demands of the future.

Therefore, I feel it necessary, again, to call the attention of Congress to the propriety of reducing the revenue from customs, so that no more money shall be received into the treasury than is required for an economical administration of the government. The reduction proposed in my former report, as carried out by the bill prepared in this department, and the reduction proposed in the bill, prepared and reported by the Committee of Ways and Means of the House of Representatives, would each have effected the object of bringing the receipts from customs to the proposed revenue standard.

The present tariff has eight schedules, or different rates of duties, as follows: The first of 100 per cent., the second of 40 per cent., the third of 30 per cent., the fourth of 25 per cent., the fifth of 20 per cent., the sixth of 15 per cent., the seventh of 10 per cent., and the eighth of 5 per cent. The bill prepared by the Committee of the House of Representatives has five schedules, as follows: The first of 100 per cent., the second of 20 per cent., the third of 15 per cent., the fourth of 10 per cent., and the fifth of 5 per cent. And the bill prepared at this department, and which is substantially the one reported by the minority of the Committee of the House of Representatives, has but two rates of duty: The first of 100 per cent., and the second of 25 per cent. There are difficulties in the execution of the present tariff growing out of the required classification under the eight schedules: and these difficulties continue to increase by the acts of the manufacturers in assimilating one class of goods to another, and in ascertaining the material of chief value in the fabrics. The difficulties would be reduced under the bill of the committee, and would entirely disappear under that proposed by the department.

The bill of the committee, with the tables herewith annexed, exhibits the revenue from customs for the fiscal year ending the 30th of June, 1853, and what has been the revenue under the present tariff for the average of six years, including 1853, and what would have been the receipts for the same periods under the bill of the committee, and under the one recommended by this department. These tables only include the enumerated articles in the bill of the committee, leaving the sum of about $2,000,000 of revenue from unenumerated articles; but they are sufficient to explain the character of the present tariff, the one proposed by the committee, and the one by the department.

Herewith is also presented exhibit 10, containing the free list proposed by this department, to which is added the English tariff on the same articles; from which it will be seen that the English tariff makes most of these articles free; and as far as these articles are used in the arts and manufactures, most of them are free of duty under the laws of other manufacturing nations. Under the English tariff, the raw material used in the arts and manufactures have been made free of duty, whilst our tariff of 1846 imposes on those articles heavy duties; and thus, to the extent of the duty on the raw material, the English manufacturer has a decided advantage over manufacturers of the United States in the markets of other nations, whilst the effect of the tariff of 1846 is reduced in our own markets. In the revision of the tariff, for the purpose of reducing the revenue, it was deemed expedient and proper to take away the advantages accruing to the manufacturers of other countries, under their free list, by making the same articles free under our laws, except as to the article of wool, and as to that article, on the coarser wools. Under the reciprocity treaty, wool from the British provinces will be admitted free of duty. In 1853, the importations of wool and woolen goods amounted to over $30,000,000, and the wool and the value of the wool in the manufactured article amounted to at least $10,000,000. This was over and above the amount produced in the country, and affords satisfactory evidence that sufficient wool is not produced in the country for its consumption. The consumption of wool in the United States for the year 1853, is estimated at 200,000,000 pounds, of which 60,000,000 is the production. of the country, and 21,000,000 imported as wool, and the balance of 119,000,000 imported in manufactures of wool.

The proposed addition of articles of general consumption to the free list, such as salt, &c., was deemed more questionable, but was made because it seemed to have had the sanc

tion of Congress and the people, as to tea and coffee, and it was thought would leave the operation of the tariff laws more equitable in their bearing upon all sections of the country than a general reduction on all articles. The addition of unadulterated wines was made to promote our commercial intercourse with wine-producing countries.

The present tariff, the bill of the Committee of the House of Representatives, and that of this department, impose the like duty of 100 per cent. on spirits imported. The bill of the committee reduces the schedules of the present tariff from 40, 30, and 25 per cent. to 20 per cent., retaining the 15, 10, and 5 per cent. schedules, with some transposition of articles from one schedule to another; whilst that of the department imposes a duty of 25 per cent. on all articles not made free; most of the articles in the 15, 10, and 5 per cent. schedules of the present tariff having been added to the free list, there being no just reason why the articles not added to the free list should not pay the higher rate of 25 per cent. The table 11, which accompanies this report, exhibits the amount that would have been collected for the year 1853 under the present tariff, the bill of the committee, and that of the department and what would have been collected under each schedule of the bill of the committee, and affords evidence that the 5th schedule will not pay the expenses of collection. Indeed, it is believed the advantages of these schedules will be counterbalanced by the increased difficulties and expense of collection. Whether the general rate should be 20 or 25 per cent., is a question of some doubt. It was thought that a reduction to 20 per cent. might have the effect of increasing the revenue by increasing the importations; whilst the duty of 25 per cent. would not probably have that effect. A question of greater difficulty was, whether the rate of 40 per cent. should not be retained on manufactured and adulterated wines, and whether silks and some other sumptuary articles should not be added to that schedule. Upon mature reflection, I am fully satisfied that the schedule of 40 per cent. should have been retained, keeping in it wines not made free, and adding to it silks of all kinds, laces of all kinds, millinery of all kinds, and other sumptuary articles; and I now recommend that, in revising the tariff, such a schedule, specifying the articles, be added.

The table, 12, which accompanies this report, exhibits the articles manufactured in the United States, which have formed a part of our exports for the years 1846, 1847, 1848, 1849, 1850, 1851, 1852, 1853 and 1854. It will be seen from this table that there has been a great increase in the annual

export of articles manufactured in this country. It may be fairly calculated that the $26,000,000, and upwards, of manufactured articles exported during the fiscal year 1854 will continue gradually to increase, until the manufactures of the United States shall constitute a fair proportion of our foreign exports.

In recognizing, as I do, the principle that duties should be levied for revenue, and not for protection, I have considered it no departure from the principle to counteract the legislation of other countries, and make the same articles free under our laws that are free under theirs; knowing, also, that there never has been a tariff law enacted, under the constitution, in which some articles were not allowed to be imported free of duty.

The table, 13, which accompanies this report, exhibits duties to the amount of $1,524,457 40 on the articles made free by the reciprocity treaty with Great Britain during the fiscal year 1854; to which extent the annual revenue from customs will thereby be reduced.

In my former report a repeal of the fishing bounties was recommended, for the reasons there referred to.

commendation is renewed, and the subject of drawback duties on refined sugar is recommended to the consideration of Congress. The same principle would require like drawbacks on all exported articles on which there is a duty on the raw material used in their manufacture.

The reports of the First, Second, Third, Fourth, Fifth, and Sixth Auditors, and of the First and Second Comptrollers, and the Commissioner of Customs, which accompany this report, numbered from 14 to 22, inclusive, exhibit a fair statement of the operations and conditions of their respective offices. They are all in good order, and the current business is promptly, and, it is believed, correctly done; and, besides, considerable progress has been made in closing the large unsettled balances that stood open on the books of the treasury, as stated in my former report.

That report stated the outstanding balance on the 1st of April, 1853, at...... ..$132,521,704 09

And there had been settled, up to the date

of that report.....

Leaving...

Since the date of that report, this sum has been reduced by settlements, collections, &c., as follows:

30,500,154 50

$102,021,549 59