OF TIII-: i NIT i: I- STATES. 



t!.i-ir agreement. The condition! of the contract 

 were substantially KM follow* : 



The contracting parties to have the option of 

 the balance of the loan. viz.. $122,688,550, until 

 .liimwry 81, 175 ; to be allowed one-quarter of one 

 per cent. oommUuoa upon the amount taken ; they 

 agreoiug to nubacribu for $15,000,000 of the 1 



nnl umunt $45,000,000 on the lt duy 



r August, 1874, and to aubiicribo for tlio n-miiin- 

 ing amount $80,000.000 at their pleasure, in 

 aiiir.iinu of not leas than five millions each, prior 

 i > tlio 81st day of January, 1875. The contract 

 also allows the parties the exclusive right to sub- 



fnr tin- remainder or any portion of the five 

 nt. l.i>nds authorized by the acts of Congress 

 -:iid, by giving notice thereof to the Secretary 

 of the Treasury prior to January 81, 1875. 



The agreement, on the part of the Secretary of the 

 TreuMjrv, with the parties before mentioned, was to 

 issue calls of even dates with their subscriptions for 

 the redemption of an equivalent amount of six per 

 live-twenty bonds, as provided by the act of 

 July 14, 1870. The subscribers agreed to pay for 

 said five per cent, bonds, par and interest accrued 

 to the date of maturity of each call, in gold coin, 

 Tinted States coin coupons, or any of the six per 

 cent, five-twenty bonds called for redemption ; they 

 also agreed to defray all expenses incurred in send- 

 ing bonds to London, upon their request, and in 

 transmitting bonds, coin United States coupons, or 

 gold coin, to the Treasury Department at Washing- 

 ton, D. C. 



On account of the subscriptions of Messrs. Both- 

 pchild and Seligman, and their associates, and those 

 of home subscribers, calls for six per cent, five- 

 twenty bonds of the loan of February 25, 1862, were 

 made as follows : 



August 1, 1874 $25,000,000 



' September 1, 1874 16,000,000 



October 1,1874 10,000,000 



November 2, 1874. 5,000,000 



Total $55,000,000 



The excess of subscriptions over calls viz., 

 $118,550 has been provided for by uncalled bonds 

 which have been received by the Department in 

 payment for that amount. 



The larger portion of the bonds subscribed for 

 has thus far been negotiated in Europe, where ex- 

 changes are still being made. 



Such being the amount and condition of the 

 public debt, the next feature of the finances of 

 the Government to be considered is its reve- 

 nue. The largest amount of this revenue is 

 collected at the custom-houses. But, during 

 the fiscal year ending June 80. 1874, the de- 

 cline in these receipts was nearly $25,000,000. 

 The receipts for the last half of the year 1874, 

 being the first two quarters of the fiscal year 

 1875, were $2,500,000 less than for the cor- 

 responding period of the previous year. 



The act of June 6, 1872, admitted large 

 classes of manufactures to a reduction of ten 

 per cent, of the duties prescribed by previous 

 statutes, without designating specifically the 

 articles to which the reduction should apply, 

 leaving much room for construction in the 

 practical application of the act to articles of 

 new design or of particular combinations of 

 materials. This act was followed by a system 

 of extreme pressure for reduction, claimed 

 through changes of classification of articles, 

 and advantage was sought to be taken of every 

 doubtful construction of all parts of the act. 



During the years 1873 and 1674 there was 

 a good deal elli-rt.-d in the way of reduction 

 of duties through changes in form or com- 

 ponent materials of merchandise, intended to 

 answer the same purpose in consumption that 

 art i. -Irs and 1'ahrics charged with a higher rule 

 of duty had previously answered. Very large 

 substitutions of materials other than wool havo 

 made for fabrics previously paying the 

 duty charged on woolens. Silks, linens, and 

 cottons, have been similarly imitated, while the 

 true rate of duty was avoided in some cases, 

 and sought to bo avoided in others, by claim- 

 ing them as subject to rates of duty prescribed 

 in the acts of 18G1-'G2 as manufactures of 

 mixed materials. 



Some portions of the reductions thus claimed 

 were admitted in the revision of the statutes 

 of 1874, while others were rejected as not prop- 

 erly authorized. It has been ascertained, as 

 the result of careful calculation, that a con- 

 cession of the reduced classifications claimed 

 in the large number of appeals made to the 

 Secretary during the year 1874 would have 

 reduced the revenues so far as to seriously em- 

 barrass the Treasury. This urgency for re- 

 duction diminished, and more general acquies- 

 cence in reasonable and proper construction 

 of the statutes by those who would at any time 

 be content with an equal administration of such 

 laws followed. 



The general depression of business result- 

 ing from the panic of September, 1873, was 

 followed by unusual delay in forwarding the 

 crops. Prices in all the markets, foreign and 

 domestic, were not sufficiently high to induce 

 shippers to make the usual investment in mov- 

 ing the crops, and the result was that the de- 

 mand for consumption of foreign merchandise 

 usual in the West and interior in the fall was 

 held in reserve. As a consequence of this ab- 

 sence of demand for foreign merchandise, pur- 

 chases for the interior and the West were 

 greatly restricted, and with reasonable caution 

 importers avoided assuming the burden of 

 stocks of goods not likely to be readily taken 

 off their hands for consumption. In what 

 manner or at what time this constraint will be 

 entirely relieved, it is not easy to say ; but it 

 would be wholly without precedent to find 

 such abundant production as has marked the 

 year 1874 without remunerative demand for 

 consumption, for any considerable time. It is 

 a reasonable inference that this state of things 

 will yield as the wants of Europe for our sur- 

 plus crops are developed in the year 1875, and 

 that general commerce, with the revenues to 

 be received from it, will revive accordingly. 

 For the present, it is of the highest importance 

 to protect the revenue provided by law in, the 

 most faithful manner. 



It is certain that the aggregate amount now 

 received from this source is necessary for reve- 

 nue to meet demands, which cannot be safely 

 stated at less than $160,000,000 in gold, be- 

 sides the receipts from internal revenue and 



