PUBLIC DOCUMENTS. 



667 



The revenues of the government during the fis- 

 cal year ending June 30, 1877, were $269,000,536.62. 

 The total expenditures for the same period were 

 $288,660,008.93, leaving a surplus revenue of $30,- 

 340,577.69. This has substantially supplied the re- 

 quirements of the sinking fund for that year. The 

 estimated revenues of the current fiscal year are 

 $265,500,000, and the estimated expenditures for the 

 same period are $232,430,643.72. If these estimates 

 prove to be correct, there will be a surplus revenue 

 of $33,069,356.28, an amount nearly sufficient for the 

 sinking fund for that year. The estimated revenues 

 for the next fiscal year are $269,250,000. It appears 

 from the report that during the last fiscal year the 

 the revenues of the government, compared with the 

 previous year, have largely decreased. This de- 

 crease, amounting to the sum of $18,481,452.54, was 

 mainly in customs duties, caused partly by a large 

 falling off of the amount of imported dutiable goods, 

 and partly by the general fall of prices in the mar- 

 kets of production of such articles as pay ad valorem 

 taxes. 



While this is felt injuriously in the diminution 

 of the revenue, it has been accompanied with a very 

 large increase of exportations. The total exports 

 during the last fiscal year, including coin, have been 

 $658,637j457, and the imports have been $492,097,- 

 510, leaving a balance of trade in favor of the United 

 States amounting to the sum of $166,539,917 ; the 

 beneficial effects of which extend to all branches of 

 business. 



The estimated revenue for the next fiscal year 

 will impose upon Congress the duty of strictly lim- 

 iting appropriations, including the requisite sum for 

 the maintenance of the sinking fund, within the ag- 

 gragate estimated receipts. 



While the aggregate of taxes should not be in- 

 creased, amendments might be made to the revenue 

 laws that would, without diminishing the revenue, 

 relieve the people from unnecessary burdens. A tax 

 on tea and coffee is shown by the experience not 

 only of our own country, but of other countries, to 

 be easily collected, without loss by undervaluation 

 or fraud, and largely borne in the country of pro- 

 duction. A tax of ten cents a pound on tea and- two 

 cants a pound on coffee would produce a revenue 

 exceeding $12,000.000, and thus enable Congress to 

 repeal a multitude of annoying taxes yielding 

 a revenue not exceeding that sum. The inter- 

 nal-revenue system grew out of the necessities 

 of the war, and most of the legislation imposing 

 taxes upon domestic products, under this system, 

 has been repealed. By the substitution of a tax 

 on tea and coffee, all forms of internal taxation may 

 be repealed, except that on whiskey, spirits, tobacco, 

 and beer. Attention is also called to the necessity 

 of enacting more rigorous laws for the protection of 

 the revenue and for the punishment of frauds and 

 smuggling. This can best be done by judicious pro- 

 visions that will induce the disclosure of attempted 

 fraud by undervaluation and smuggling. All reve- 

 nue laws should be simple in their provisions and ea- 

 sily understood. So far as nracticable, the rates of 

 taxation should be in the form of specific duties, 

 and not ad valorem, requiring the judgment of expe- 

 rienced men to ascertain values, and exposing the 

 revenue to the temptation of fraud. 



My attention has been called, during the recess 

 of Congress, to abuses existing in the collection of 

 the customs, and strenuous efforts have been made 

 for their correction by executive orders. The 

 recommendations submitted to the Secretary of _the 

 Treasury, by a commission appointed to examine into 

 the collection of customs duties at the port of New 

 York, contain many suggestions for the modification 

 of the customs laws, to which the attention of Con- 

 gress is invited. 



It ia a matter of congratulation that, notwith- 

 standing the severe burdens caused by the war, the 

 public faith with all creditors has been preserved, 



and that, as the result of this policy, the public cred- 

 it lias continuously advanced, and our public securi- 

 ties are regarded with the highest favor in the mar- 

 kets of the world. I trust that no act of the govern- 

 ment will cast a shadow upon iu credit. 



The progress of refunding the public debt haa 

 been rapid and satisfactory. Under the contract ex- 

 isting when I entered upon the discharge of the du- 

 ties of my office, bonds bearing interest at the rmte 

 of 4t per cent, were being rapidly sold ; and within 

 three months the aggregate sales o!' these bonds had 

 reached the sum ot $200,000,000. With my sanc- 

 tion, the Secretary of the Treasury entered into a 

 new contract for the aale of 4 per oeut. bonds, and 

 within thirty days after the popular subscriptions 

 for such bonds WUB opened, subscriptions were had 

 amounting to $75,496,550, which were paid for with- 

 in ninety days after the date of subscription. By 

 this process, within but little more than one vear. 

 the annual interest on the public debt waa red*ucea 

 in the sum of $3,775,000. 



I recommend that suitable provision be made to 

 enable the people to easily convert their savings in- 

 to government securities, an the best mode in which 

 small savings may be well secured and yield a mod- 

 erate interest. It is an object of public policy to re- 

 tain among our own people the securitiea of the 

 United States. In this way our country ia guarded 

 against their sudden return from foreign countries, 

 caused by war or other disturbances beyond our lim- 

 its. 



The commerce of the United States with foreign 

 nations, and especially the export of domestic pro* 

 ductions, has of late years largely increased ; but 

 the greater portion of this trade ia conducted in for- 

 eign vessels. The importance of enlarging our for- 

 eign trade, and especially by direct and speedy inter- 

 change with countries on this continent, cannot b 

 overestimated ; and it is a matter of great moment 

 that our own snipping interest should receive, to the 

 utmost practical extent, the benefit of our commerce 

 with other lands. These considerations are forcibly 

 urged by all the large commercial cities of the coun- 

 try, and public attention is generally and wisely at- 

 tracted to the solution of the problems they present. 

 It is not doubted that Congress will take them up in 

 the broadest spirit of liberality, and reapond to the- 

 public demand by practical legislation upon thia im- 

 portant subject. 



The report of the Secretary of War nhowa that 

 the Army has been actively employed during thn 

 year, anu has rendered very important Mrvioe in 

 suppressing hostilities in the Indian country, and in 

 preserving peace and protecting life and property in 

 the interior as well aa along the Mexican border. A 

 long and arduous campaign haa been prosecuted, 

 with final complete success, against a portion of the 

 Nez Perec's tribe of Indiana. A full account of thia 

 campaign will bo found in the report of the General 

 of the Arrnv. It will be een that in itt ooura **- 

 eral severe battle* were fought, in which a number 

 of gallant officers and men loat their lives. I join 

 with the Secretary of War and the General oftbo 

 Army in awarding to the officers and men employr.1 

 in the long and toilsome pursuit and in the final cap- 

 ture of these Indiana the honor and prai which 

 are justly their due. 



The very serious riota which occurred In several 

 of the States in July laat rendered nec*s**ry the em- 

 ployment of a considerable portion of the Ami 

 preserve the peace and maintain onlrr. In the fitatra 

 of Weat Virginia, Maryland, Pennsylvania, and 1111- 

 nola thcae disturbance* were so formilbU i 

 fV the looal and State authorities, ami Ine > 

 Executive was called upon, in the m*le pro 

 the Constitution and lawn, to furnish rnlllurjr aid. 

 I am gratified to bo ablo to state that the tr*v>re * 

 in renponse to the** calls for aid in the *npr* 

 of domestic violence were ahlr, by the Influene 

 their presence in the disturbed regions, to prae*i 



