160 



CONGRESS, UNITED STATES. (PBESIDENT'S MESSAGE.) 



A comparison between the respective amounts of 

 silver-dollar circulation on Nov. 1, 1881, and on Nov. 

 1, 1882, shows a slight increase of a million and a half 

 of dollars. But during the interval there had been in 

 the whole number coined an increase of twenty-six 

 millions. Of the one hundred and twenty-eight mill- 

 ions thus far minted, little more than thirty-five mill- 

 ions are in circulation. The mass of accumulated 

 coin has grown so great that the vault-room at pres- 

 ent available for storage is scarcely sufficient to con- 

 tain it. It is not apparent why it is desirable to con- 

 tinue this coinage, now so enormously in excess of the 

 public demand. 



As to the silver certificates, in addition to the 

 grounds which seemed last year to justify their re- 

 tirement may be mentioned the effect which is likely 

 to ensue from the supply of gold certificates for whose 

 issuance Congress recently made provision, and which 

 are now in active circulation. 



You can not fail to note with interest the discussion 

 by the Secretary as to the necessity of providing by 

 legislation some mode of freeing the Treasury of an 

 excess of assets in the event that Congress fails to 

 reach an early agreement for the reduction of taxa- 

 tion. 



'I heartily approve the Secretary's recommendation 

 of immediate and extensive reductions in the annual 

 revenues of the Government. 



It will be remembered that I urged upon the atten- 

 tion of Congress at its last session the importance of 

 relieving the industry and enterprise of the country 

 from the pressure of unnecessary taxation. It is one 

 of the tritest maxims of political economy that all 

 taxes are burdensome, however wisely and prudently 

 imposed. And though there have always been among 

 our people wide differences of sentiment as to the 

 best methods of raising the national revenues, and 

 indeed as to the principles upon which taxation 

 should be based, there has been substantial accord in 

 the doctrine that only such taxes ought to be levied as 

 are necessary for a wise and economical administra- 

 tion of the Government. Of late the public revenues 

 have far exceeded that limit, and unless checked by 

 appropriate legislation such excess will continue to 

 increase from year to year. For the fiscal year ended 

 June 30, 1881, the surplus revenue amounted to $100,- 

 000,000 ; for the fiscal year ended on the 30th of June 

 last the surplus was more than one hundred and 

 forty-five millions. 



The report of the Secretary shows what disposition 

 has been made of thes"e moneys. They have not only 

 answered the requirements of the sinking fund, but 

 have afforded a large balance applicable to other re- 

 ductions of the public debt. 



But I renew the expression of my conviction that 

 such rapid extinguishment of the national indebted- 

 ness as is now taking place is by no means a cause 

 for congratulation; it is a cause rather for serious 

 apprehension. 



If it continues, it must speedily be followed by one 

 of the evil results so clearly set forth in the report of 

 the Secretary. 



Either the 'surplus must lie idle in the Treasury or 

 the Government will be forced to buy at market rates 

 its bonds not then redeemable, and which, under 

 such circumstances, can not fail to command an enor- 

 mous premium, or the swollen revenues will be de- 

 voted to extravagant expenditure, which, as experi- 

 ence has taught, is ever the bane of an overflowing 

 treasury. 



It was made apparent in the course of the animated 

 discussions which this question aroused at the last 

 session of Congress that the policy of diminishing 

 the revenue by reducing taxation commanded the 

 general approval of the members of both Houses. 



I regret that because of conflicting views as to the 

 best methods by which that policy should be made 

 operative none of its benefits have as yet been 

 reaped. 



In fulfillment of what I deem my constitutional 



duty, but with little hope that I can make valuable 

 contribution to this vexed question, I shall proceed to 

 intimate briefly my own views in relation to it. 



Upon the showing of our financial condition at the 

 close of the last fiscal year I felt justified in recom- 

 mending to Congress the abolition of all internal-rev- 

 enue taxes except those upon tobacco in its various 

 forms and upon distilled spirits and fermented liq- 

 uors, and except also the special tax upon the manu- 

 facturers of and dealers in such articles. 



I venture now to suggest that unless it shall be as- 

 certained that the probable expenditures of the Gov- 

 ernment for the coming year have been underesti- 

 mated, all internal taxes, save those which relate to 

 distilled spirits, can be prudently abrogated. 



Such a course, if accompanied by a simplification 

 of the machinery of collection, which would then be 

 easy of accomplishment, might reasonably be expected 

 to result in diminishing the cost of such collection by 

 at least two millions and a half of dollars, and in the 

 retirement from office of from 1,500 to 2,000 per- 

 sons. 



The system of excise duties has never commended 

 itself to the favor of the American people, and has 

 never been resorted to except for supplying deficien- 

 cies in the Treasury when, by reason of special exi- 

 gencies, the duties on imports have proved inadequate 

 for the needs of the Government. The sentiment of 

 the country doubtless demands that the present excise 

 tax shall be abolished as soon as such a course can be 

 safely pursued. 



It seems to me, however, that, for various reasons, 

 so sweeping a measure as the total abolition of inter- 

 nal taxes would for the present be an unwise step. 



Two of these reasons are deserving of special men- 

 tion : 



First, it is by no means clear that even if the exist- 

 ing system of duties on imports is continued without 

 modification, those duties alone will yield sufficient 

 revenue for all the needs of the Government. It is 

 estimated that one hundred millions of dollars will be 

 required for pensions during the coming year, and it 

 may well be doubted whether the maximum annual 

 demand for that object has yet been reached. Un- 

 certainty upon this question would alone justify, in 

 my judgment, the retention for the present of that 

 portion of the system of internal revenue which is 

 least objectionable to the people. 



Second, a total abolition of excise taxes would al- 

 most inevitably prove a serious if not an insurmount- 

 able obstacle to a thorough revision of the tariff and 

 to any considerable reduction in import duties. 



The present tariff system is in many respects un- 

 just. It makes unequal distributions both of its bur- 

 dens and its benefits. This fact was practically rec- 

 ognized by a majority of each House of Congress in 

 the passage of the act creating the Tariff Commis- 

 sion. The report of that commission will be placed 

 before you at the beginning of this session, and will, 

 I trust," afford you such information as to the condi- 

 tion and prospects of the various commercial, agricul- 

 tural, manufacturing, mining, and other interests of 

 the country, and contain such suggestions for statu- 

 tory revision, as will practically aid your action upon 

 this important subject. 



The revenue from customs for the fiscal year ended 

 June 30, 1879, amounted to $137,000,000. 



It has in the three succeeding years reached, first, 

 $186,000,000, then $198,000,000, and finally, as has 

 been already stated, $220,000,000. 



The income from this source for the fiscal year 

 which will end on June 30, 1883, will doubtless be 

 considerably in excess of the sum last mentioned. 



If the tax on domestic spirits is to be retained, it is 

 plain, therefore, that large reductions from the customs 

 revenues are entirely feasible. While recommending 

 this reduction, I am far from advising the abandon- 

 ment of the policy of so discriminating in the adjust- 

 ment of details as to afford aid and protection to do- 

 mestic labor. But the present system should be so 



