Treasury, and the data for the year 1880-1881 from the accounts published by the Liquidating Bureau established by the Mexican Government to close the old accounts and open the new ones under the new system. The accounts of the year 1888-1889, which appear in statement No. 3, are all taken from the Federal Treasury of Mexico, and are complete and correct.

I also append a statement of the appropriations approved by the Federal Congress during the fiscal years from 1868 to 1895. The actual expenses never exceeded the appropriations and the revenue was generally below them.

NO. I. REVENUE AND EXPENSES OF THE FEDERAL GOVERNMENT OF MEXICO IN 1808 AND FROM 1822 TO JUNE 30, 1867.

DEPARTMENTS.

POWERS.

Sources of Revenue.—The Federal revenue of Mexico consists mainly of three sources: import duties, internal revenue, and direct taxes in the Federal District. Under the head of import duties we collect duties on imports, extra import duties which we call additional duties, and duties on exports.

The sources of revenue of the Mexican Federal Treasury during the fiscal year 1895-1896, were :

Import Duties.-Our tariff is a highly protective one, as we have always maintained a very high rate of import duties, almost prohibitory for a large portion of our population, which under such a system are practically excluded from the use of foreign commodities, to the material detriment of the fiscal revenue, the public wealth at large, and the advancement of the masses of our people. The causes which have induced such a high tariff are twofold: first, that, in a great measure, protective ideas have prevailed; secondly, and especially, the need of revenue, and the idea that the higher the rate of duties the larger would be the revenue collected. A new source of protection has been created by the depreciation of our currency, which acts as a powerful protection to our home commodities, in favor of our manufacturers to the disadvantage of the great body of consumers.

The protective policy in Mexico has been so deeply rooted that notwithstanding that I lean to freer trade, and that I have been three times at the head of the Treasury Department, and once for five years, I never was able to modify substantially that policy, because the condition of the Treasury was so precarious, that it would have been very rash to attempt any radical change on the face of a great reduction of an insufficient revenue which would have brought about disastrous results. For the same reason I was unable to do away with the obnoxious alcabala tax.

Our present tariff is divided into the following sections: 1st, animal industry; 2d, agricultural products; 3d, metals and its manufactures; 4th, fabrics; 5th, chemicals, oils, and paints; 6th, wines, liquors, and fermented drinks; 7th, paper; 8th, machinery; 9th, carriages; 10th, arms and explosives, and 11th, sundries.