while protection of revenue and other public interests require. Telegraph date of sailing. JOHN B. HAWLEY, Acting Secretary. On the 13th of April, I was directed by telegraph to take passage in the Wolcott, and on the 15th was again telegraphed to proceed, and my instructions were enlarged, and full power given me to use my best judgment in acting upon everything which came before me. At 4 a. m. April 16 we weighed anchor and sailed from Puget Sound. The first part of this report will be devoted to a description of and examination proper of THE CUSTOMS DISTRICT OF ALASKA. The examination of the district begins with the 1st day of May of the last fiscal year, and goes back prior to the Congressional organization thereof; so that its trade and commerce, past, present, and future, can be seen at a glance. The collection district of Alaska was established July 27, 1868, and embraces the whole of the Russian purchase, with its ports, harbors, bays, rivers, and waters. The port of entry was designated at or near the town of Sitka, or New Archangel; a collector authorized to be appointed at an annual salary of $2,500, in addition to the usual fees and emoluments of the office; maximum compensation fixed at $4,000. The following discloses the receipts and disbursements of the district, since customs collections were first made at Sitka, as far as can be ascertained from the records of the office, which are incomplete prior to July 1, 1869. Previous to this time the office was not supplied with the proper forms and books. The amount of duties collected prior to July 1, 1869, can only be approximately ascertained. Nothing can be gleaned from the records of the several sums collected as hospital moneys, tonnage tax, and fines, penalties, and forfeitures before July 1, 1869, embracing the administrations of Collectors Dodge, Ketchum, and Falconer. Neither are there any data or memoranda of expenses incurred during this time for collecting the revenue. Previous to Congress making permanent provision for a customs-district in the Territory, the department, acting under the power to make regulations to carry out the revenue laws, and actuated by a desire to accommodate the inhabitants and promote the public welfare, determined temporarily to permit the importation of foreign merchandise, and accordingly, in August, 1867, William S. Dodge was appointed by the Hon. Hugh McCulloch, then Secretary of the Treasury, a special agent and acting collector for the district of country ceded by the Russian Government to the United States, and charged in conclusion of his letter of instructions by the Secretary in the following language: You will, by a careful perusal of your instructions, which have been approved by the Solicitor, and an attentive examination of the accompanying papers, scarcely fail to comprehend the requirements of your position, and by your urbane and upright deportment in so doing materially serve to draw in closer bonds of sympathy the people thus newly incorporated into our Union. It will be observed that no mention is made of the amount of official fees collected. This would entail much and unnecessary labor, and would be of no practical benefit, for the reason that all such fees go to swell the salary of the collector, and the United States derives no benefit from them whatever, save when they exceed the maximun compensation allowed by law to the collector. In no instance has this happened in any year, and they are therefore omitted. It may be remarked, however, that the fees of the office for the fiscal year ending June 30, 1878, will not amount to over $500. Before presenting the figures, the following remarks of Hon. W. S. Dodge, the first collector, delivered at Sitka, July 4, 1868, showing the condition of the port at that time, are here reproduced: Upon the assumption of Federal authority in this Territory came the establishment of customs regulations, and this place was declared a port of entry. Immediately upon the raising of the stars and stripes was unfurled the revenue-flag, declaring commerce open to all the world, subject to national laws. The first thing was to change the nationality of all the vessels belonging to the country, thereby adding to the American merchant service. This is being done as fast as opportunity offers, and to-day the port of Sitka alone presents a creditable amount of shipping. There are belonging to us four steamers, one ship, two barks, three brigs, and four schooners, making 2,220 tons, aggregate measurement. And notwithstanding all the disadvantages under which we labor, the commerce of this port has been considerable. From the collector's office I have gathered the following official statement. It covers six months, from January 1 to July 1, 1868. During that period the amount of imports admitted and paying duty were valued at $26,661.52; the export trade reached the sum of $277,954.67. Nor has the coastwise trade been at all insignificant. During the same time there were entered at this port stores and trading goods valued at $91,413.97. There was also cleared for domestic ports, below and along the coast of Alaska, merchandise to the amount of $59,781.81. Nor do these statements include any stores entered for the use of the Army and Navy, either here or at other points along the coast. The local trade is also of importance. From estimates furnished by the merchants, the trade with the whites, American and Russians, will average $70,000 the present year. The trade with the Indians-the Sitkas, encamped near us-will fully equal if it does not exceed $50,000. The following are the figures: Duties collected prior to July 1, 1869 Duties collected from July 1, 1869, to May 1, 1878, embraced as follows: July 1, 1869, to December 31, 1869 Total collections for duties to May 1, 1878. Tonnage tax. $21,490 69 $984 88 449 28 783 08 288 95 155 25 699 38 874 94 724 43 991 05 23 79 27,465 72 $158 88 871 16 July 1, 1869, to December 31, 1869 Total to May 1, 1878...... Marine hospital collections. July 1, 1869, to December 31, 1869. The following expenses for collecting the revenue are derived from inspecting the record of Treasury drafts received for this purpose: July 1, 1869, to December 31, 1869....... July 1, 1870, to December 31, 1870... July 1, 1874, to December 31, 1874... July 1, 1875, to December 31, 1875.. 11, 195 00 July 1, 1876, to December 31, 1876...... 1877, drafts received during the year, only part payment.. 5,931 00 The amount estimated for salaries and for expenses for collecting the revenue for the remainder of the year 1877, to May 1, 1878, is as follows: Salaries of deputies... Office expenses at different ports..... $4,504 35 479 50 This would make the total amount of disbursements from July 1, 1869, to May 1, 1878, a period of nine years nearly, reach the sum of $116,074.87. The following recapitulation will be more easily understood, embracing all collections, save fees, from July 1, 1869, to May 1, 1878: Received from duties.. Recapitulation. Received from tonnage tax Received from marine hospital collections. Received from fines, penalties, and forfeiture... Total Add duties collected at Wrangel for January, February, March, 1878, not reported to Sitka office $27,465 72 3, 118 25 2,335 32 24,545 66 57,464 95 89 20 57,554 15 Showing an excess of disbursements over receipts from July 1, 1869, to May 1, 1878, in the sum of $58,520.72, or about 100 per cent. increase. In the expenses incurred in the district of Alaska no mention is made for the maintenance of vessels of the revenue marine. That cannot strictly there be chargeable to the expenses of collecting the revenue. The revenue cutters in Alaskan waters perform multifarious duties; in fact, they have been the safeguard and life of the Territory, and if there was not a single custom-house in the whole of Alaska, just as many cutters would have to be employed as have been and as are necessary at the present day for the protection of the lives, liberty, and property of its inhabitants, irrespective of customs law, revenue, and exactions to the contrary notwithstanding, unless naval vessels should be employed for a like purpose; and it would be just as sensible to charge a portion of the naval appropriation expended by naval ships cruising in Alaskan waters to expenses collecting the revenue, as to charge any part of the appropriation for the revenue marine to the expenses of the port of Sitka and other ports in the district because the cutters perform duty in those waters. THE COMMERCE OF THE PORT of Sitka has dwindled to almost nothing within the past few years. No stately ships now ride in that beautiful harbor, and, save the monthly trips of the steamship California, carrying the mail, and the occasional visit of an armed vessel or some small coaster, the quiet of the place is undisturbed by any vessel of any nation. The following is the list of vessels documented at the port: The decline of trade has been gradual but sure since the purchase by the United States. Here the Russian American Fur Company had their headquarters, with numerous employés and retainers; a large number of troops were quartered in the barracks, and it was the grand centre of trade and commerce of the whole territory. Sitka at this time had, probably, a population of 2,500 or thereabouts. The Alaska Commercial Company, the successors of the Russian Fur Company, have withdrawn all their property and possessions from this point, and established their headquarters at the Privilov (Seal) Islands, 1,200 miles distant, where they gather the skins of the fur seal. None of their large fleet of steamers and other vessels are documented here, and very seldom visit the port. They have virtually abandoned Southeastern Alaska, and have no direct or pecuniary interest in that portion of the Territory. The presence of the military, to some extent, kept up the business of the port; but since the withdrawal of that arm of the public service the harbor of Sitka presents the appearance of Goldsmith's deserted village. The following figures will give a more accurate idea of the state of the case. The time selected for an average exhibition of the collections is the beginning of the term of Collector De Ahna, October 22, 1877, and ending on the morning of the first day of my inspection, May 1, 1878: Of which the port of Kodiak must be credited with $103.77, and Wrangel with $43.53. It may be stated, however, that during the sum-, mer months these receipts are somewhat larger, owing to the direct trade between Wrangel and Victoria, British Columbia, and the in transit trade with the Cassiar mines in British Columbia. Total amount of imports into Alaska Territory for the twelve months ending March 31, 1878 $3,295 00 Total amount of domestic exports for the same period 27,175 00 Foreign exports for the same period 15.00 This does not include the fur-seal trade nor the trade in peltries on the main-land, statistics of which are not attainable at Sitka. FOREIGN TRADE BY INDIANS. One of the most vexatious questions the customs authorities have to deal with is the Indian trade with British Columbia. The currency of the country, as far as Indians are concerned, is "blankets." Almost invariably those of Hudson's Bay are worth at Sitka $3 apiece. It is not an infrequent thing for Indian traders to have a large number on hand, carefully cleaned and piled in their houses, and not in bales or original packages. When a chief desires to distinguish himself, he will give a feast or "potlatch," and invite the principal men of the neighboring tribes for hundreds of miles around. These are the scenes of great festivities, drinking, dancing, riot, and debauchery. Gifts are distributed and much money spent in feasting, speech-making, &c. Oftentimes slaves are killed and others set free. In the fall of 1877, a potlatch was given at Sitka by Jack, chief of the Sitkas, and it is estimated correctly he gave away on that occasion 500 blankets, of course old and new. This question has been before the Treasury Department several times, and in Treasury letter June 28, 1875, Secretary Bristow writes to the collector of customs at Helena, Montana Territory, relative to furs brought by Indians from British North America and sold to traders in the United States, and after reviewing section 105 of the act of March 2, 1799, as reproduced in the Revised Statutes-see section 2515, and article 471 of the customs regulations issued in pursuance thereof-after giving certain general instructions, uses the following language: Beyond this, the department can give no definite instructions, but must leave you to the exercise of a sound discretion under law and regulations, including the general views of the department as above set forth. The language of the statute is as follows: SEC. 2515. That no duty shall be levied or collected on the importation of peltries brought into the territories of the United States, nor on the proper goods and effects, of whatever nature, of Indians passing or repassing the boundary line aforesaid, unless the same be goods in bales or other large packages unusual among Indians, which shall not be considered as goods belonging to Indians, nor be entitled to the exemption from duty aforesaid. There can be no question but a very large trade is carried on by the Indians in this merchandise. It is almost next to an impossibility to watch or keep track of their innumerable canoes, and that bales of new blankets, in "original packages," are constantly smuggled is well known to the customs officers, who are powerless to prevent it with the present force at their command. My examination discloses, as a rule, that the various customs officials have exercised a suitable discretion, but instances have arisen when authority has been stretched to too fine a tension. It is a grave question, for a large amount of duties are purposely evaded by the Indians, and blankets of American manufacture are literally driven out of this market; but if the line is too closely drawn it will be productive of trouble, and as the collector is powerless to enforce "his authority, the red man will in the end get the best of it. It is purely one of "sound discretion," and there we will have to let it remain until the collector is invested with some authority to enforce his decrees. There is probably no portion of the United States where more essential requisites for a collector are required than in Alaska. He must be well versed in the whole organic law of the land, as well as those for the collection of the revenue, of sound and discreet judgment, willing, whenever the necessities of the case demand, to assume responsibility; in fine, he must be a man equal to the occasion, and, above all things, neither |