3 per cent bonds now payable

4 per cents and refunding certificates. The only United States bonds which are now payable at the pleasure of the Government are the three per cents, being $305,529.000; those which next become redeemable are the $250,000,000 of four-and-ahalf per cents, on Sept. 1, 1891. The $737,620,700 of four per cents and the $325,850 of refunding certificates are redeemable July 1, 1907.

a

The estimated surplus for 1884 - Such surplus continuing would pay the whole interest-bearing debt in 15 years.

The estimates for the fiscal year ending June 30, 1884, show a surplus revenue of $85,000,000 per annum. This is enough to pay all the three per cents in about three and one half years, and before the close of the fiscal year ending June 30, 1887. This surplus kept up for the four succeeding years, to Sept. 1, 1891, would be more than 350,000,000, or $100,000,000 more than enough to pay all the bonds then falling due. The same annual surplus until July 1, 1907, would amount, with the $100,000,000 left after paying the four-and-a-half per cents, to about $1,460,000,000, while the whole amount of the debt then redeemable is less than $740,000,000. The estimated surplus of $85,000,000 a year would pay the whole amount of the interest. bearing debt in about fifteen years.

The authority of the Treasury to use the surplus-Difficulties in exercising it— The surplus likely to swell.

The only authority possessed by the Treasury whereby it can restore to business the surplus moneys thus accumulated, is that given to the Secretary by the act of March 3, 1881, by which he may at any time apply the surplus money in the Treasury not other wise appropriated, to the purchase or redemption of United States bonds. This can now be done to other than the three per cents only by the payment of a large and increasing premium thereupon. And when it is considered that nearly one half of the interestbearing debt of the United States is held by national banks, State banks, savings banks, and trust com. panies, and much other of it by private trustees and other persons acting in fiduciary capacity, who have no wish to surrender these securities, the difficulty of acting under the provision cited is manifest. Moreover, it cannot be assumed that the estimated surplus for the current and next years under existing laws will remain at the same rate in succeeding years. The increasing population and swelling business of the country will add to, rather than take from, the amount of the surplus as now estimated, while the decrease of interest on the public debt, and probably of the amount disbursed by the pension bureau, as arrears of pensions are paid off, should diminish expendi

tures.

How to avoid a "heaped-up surplus."

As a general principle, the good of the people requires that a public debt should be paid as soon as it may be without greatly onerous taxation, or disturbance of business interests which have been fostered, perhaps stimulated, by provisions of law once expedient. Though of the public debt resting upon us, it is to be considered that the object for which it was in the main incurred, was the good of coming generations, as well as of that which incurred it, and that it is not unjust to them that, reaping a measure of the benefits it purchased, they should bear their share of the burden of payment. But as our interest-bearing public debt is over one billion and a quarter of dollars ($1,312,446,050 in exact figures), and about $250,000,000 and about $740,000,000 of it beyond our reach for payment, for about eight years and twenty-four years, respectively, and may not be brought in by purchase, save at heavy rates of premium, even if it can by paying those rates, there is forced upon our attention the question, how shall a heaped-up surplus of public money be avoided? The discussion of this question in former reports of this department admits of but one consistent answer from it now; the views therein expressed have not been

By the statutes re-enacted in sections 3694 and 3696 of United States Revised Statutes, it is provided that the coin paid for duties on imported goods shall be set apart as a special fund to be applied, first, to payment in coin of the interest on the bonds and notes of the United States; second, to the purchase or pay.. ment of one per cent of the entire debt of the United States, to be made within each fiscal year, and, in addition thereto, an application to the payment of the public debt of an amount equal to the interest on all bonds belonging to the sinking-fund, as the Secretary of the Treasury shall from time to time direct. This obligation to regard the coin received for duties on imported goods as a pledge for the gradual extinction of the national debt has been observed by this Department..

It is assumed that this obligation entered into by the Government with its creditors, at a time when its bonds were regarded as of far less value in the market of the world than at the present time, will be held sacred until the debt is extinguished. It is true that the debt has been paid much more rapidly than it would have been, had only the amount of the sinking. fund been applied to its payment, but the obligation still remains, to set apart annually the amount required by law, to be applied to the extinguishment of the public debt. The payments from time to time of the amount thus required have varied somewhat, as the amount of the debt has unequally varied by a more or less rapid payment of it.

The estimate of the sinking-fund for the current fiscal year is fixed at $45,816,741.47, and the amount required will increase from year to year at the rate of about $1,000,000 until 1891. It is estimated that an average of about $50,000,000 each year until then, will be required for the sinking-fund. This will vary according to the amount actually applied in payment beyond the need of the sinking-fund.

Future reduction of the revenues-The necessary legislation.

future, the revenues should not be so far reduced as I consider, therefore, that in legislating for the 000,000 to the sinking-fund. to prevent the application each year of about $50,$85,000,000 as the surplus for the current year, we find Upon the estimate of a surplus for that period of nearly $40,000,000, not ment, or for the payment of the national debt through wanted for the regular expenditures of the Governthe sinking-fund.

So the question still presses, what legislation is necessary to relieve the people of unnecessary taxes?

In the recommendations of the President and

those of this Department, and the action of Conhas been substantial concord as to how the needed gress, and in the expression of public opinion, there reduction of the revenue should be brought about. It has been generally conceded that the internalrevenue taxes, except those upon spirits, fermented liquors, and upon the circulation of banks, might well be abolished. There has been difference whether the tax upon tobacco should be abolished or modified. There were but few advocates of the immediate total abolition of taxes upon spirits or fermented liquors. My last report said that taxes upon spirits and tobacco, being upon things not needful, should be retained rather than those upon the common necessaries of life; which, as a proposition, is not to be controverted. But it was conceded by all that a substantial reduction should be made upon nearly all imported articles subjected to duties. The Tariff Commission created with a view

to such reduction--Its conclusions. To make a start in the proposed reduction of revenue from imports, the Tariff Commission had been created. In good faith it undertook the work. In its report to Congress it said: "Early in its deliberations the Commission became convinced that a sub. stantial reduction of tariff duties is demanded, not by a mere indiscriminate popular clamor, but by the best conservative opinion of the country, including that

not fully established. In the report of this Department last year, the reduction as applied to the principal classes of dutiable articles was considered somewhat in detail, and, adhering to the views there expressed, a repetition of them is unnecessary.

these views, the commission has sought to present a scheme of tariff duties in which substantial reduction should be the distinguishing feature. The average reduction in rates, including that from the enlarge. ment of the free list and the abolition of the duties on charges and commissions, at which the commission has aimed, is not less on the average than 20 per cent, and it is the opinion of the commission that the reduction will reach 25 per cent." And again: "It has been the effort of the Commission to make the reduc. tion apply to commodities of necessary general consumption, and to diminish or withhold the reduction

commodities of high cost, requiring labor, and which, being consumed principally by the more wealthy classes, could bear higher duties, at the same time supplying revenue and encouraging the higher arts without being oppressive in their opera

tion.'

The estimated revenue reduction of $45,000,000 under the Tariff Act of 1883 not

verified.

The Chairman of the Senate Committee on Finance, in explanation of the bill before the Senate last year, which after various amendments became law, estimated at $45,000,000 the reduction of the revenue which would follow the changes in the tariff proposed thereby.

These intentions and calculations have not been verified.

The estimated receipts for the current year from customs are $195,000,000, a reduction of less than $20,000,000. Considering that there has been some depression of business during the past year and current year, it is probable, should business revive, that the revenues from customs under the present laws will in succeeding years increase rather than diminish. It was estimated by the Senate Committee that the repeal of internal-revenue taxes proposed by their bill would effect a reduction of $34,790,334. The Commissioner of Internal Revenue estimates that the aggregate amount of reduction made by the act will not be less than $43,000,000 per annum, including the six millions of taxes on deposits of national banks; but he further estimates that the increase of receipts from distilled spirits will so augment the revenues from that source as to make the aggregate receipts from internal revenue for this year $120,000,000, or about $24,500,000 less than those for the preceding year. The reduction, therefore, from all sources of internal revenue for the current year appears to be about $10,000,000 less than the reduction expected by the Senate Committee. We have, then, a reduction of $30,000,000 less than was sought for and expected.

The principles that should govern reduction

of revenue.

The question recurs: Shall we now seek again for that reduction which was not attained, and is it now advisable to attempt a reduction of the revenues for future years to arise from duties on imports? There was general agreement that a substantial reduction of the tariff should be made. The estimates of the Tariff Commission and of the Senate committee show what was the contemplated reduction. The actual results so far obtained indicate that the reduction labored for has not been effected by the new tariff act. It is to be considered, too, that the failure is not to be charged to the increase of importations keeping up the amount of customs revenue. The statistics of our foreign commerce show that there has not been an increase chargeable therewith. As to the principles of reduction, if a revision be practicable, there seems to be little disagreement. The reduction should be made on articles entering into general consumption as necessaries as sugar, molasses, and the like- rather than upon luxuries; upon raw materials, rather than

tion.

It may not be deemed expedient so soon to make again a revision of the tariff to effect a reduction. And there are considerations which are apt upon all its parts, on the 1st day of July, 1883. There has this head. The new tariff act went into operation, in gone by since then but little over one third of a fiscal year. It is a short time in which to learn with accuracy how so important and wide-reaching a law as that, touching all the business and industrial interests of the country, will permanently affect the revenues. It is known that in some respects the first effects of it may Wherein the provisions not be relied upon as stable. of it lessened the duties upon foreign articles, it the 1st day of July. The goods were put in bonded stimulated importations thereof, immediately before warehouse, to be withdrawn at once after that day, on payment of duties at the new rates. Wherein it increased the duties (as it did in some instances, by new provisions to meet the adjudication of courts or the rulings of this Department), it stimulated importations prior to the 1st day of July, 1883, with the purpose of taking the benefit of the lower rate prevalent up to that date. These accelerated importations were, as a natural result, followed by decreased importations of the same articles after the law took effect; so that the lasting effects of the application of it to the business of the country may not be known with reliable certainty, either in the general result upon the volume of revenue to be yielded by duties upon imports, or in its particular results upon especial classes of goods and especial branches of domestic industry.

Again, it may be deemed needful to so legislate as to certain industries and businesses as to effect reduction or suspension of the revenue from the taxation upon them. Those making or trading in distilled spirits, or who have made loans or advances of money thereon, will be earnest in endeavor for an extension of the bonded period. It is not unlikely that Congress will listen to their appeal. An extension of the bonded period will effect a reduction of revenue for the length of time thereof. In another part of this report are data on which may be calculated how much that will be. On the whole, then, this Department does not recommend a immediate revision of the tariff act.

A "moderate modification" rather than a "total repeal " of internal revenue taxes, suggested.

In the same report the then Secretary cof the Treasury said:

In my report of last year it was suggested that should it be deemed expedient to reduce the rate of taxes on spirits, tobacco, or fermented liquors to lessen the inducement to frauds, or to make them more equal, the objection is not so strong against moderate modifi cation as against a total repeal of all taxes thereon As has been seen, a reduction of the tax upon tobaccc and its manufactured products has resulted in a de crease of revenue therefrom, fully as large as wa expected by the committee which submitted the bill and there is left but about $21,400,000 of revenue frone that source. The estimated receipts from spirits, how, ever, as has been seen, for the current year exceed the receipts for former years. The reason of the opposi tion to the reduction of the tax on distilled spirits iss that they are not necessaries of life. That principle may still be upheld, and yet the tax, in whole or in part, be taken from alcohol or spirits used in the manu factures and the arts.

Propositions are made to repeal the whole system of internal revenue. As to this, I repeat my remark of last year: "I see no public sentiment or political action indicating a desire on the part of tax-paying.

inafter mentioned, there shall be levied, collected, and | paid the following rates of duty on said articles severally :

Cotton thread, yarn, warps, or warp-yarn, whether single or advanced beyond the condition of single by twisting two or more single yarns together, whether on beams or in bundles, skeins, or cops, or in any other form, valued at not exceeding twenty-five cents per pound, 8 c. per pound; valued at over twenty-five cents per pound, and not exceeding forty cents per pound, 13 c. per pound; valued at over forty cents per pound, and not exceeding fifty cents per pound, 16 c. per pound; valued at over fifty cents per pound, and not exceeding sixty cents per pound, 20 c. per pound; valued at over sixty cents per pound, and not exceed ing seventy cents per pound, 25 c. per pound; valued at over seventy cents per pound, and not exceeding eighty cents per pound, 30 c. per pound; valued at over eighty cents per pound, and not exceeding one dollar per pound, 35 c. per pound; valued at over one dollar per pound, forty per centum ad valorem.

On all cotton cloth, not bleached, dyed, colored, stained, painted, or printed, and not exceeding one hundred threads to the square inch, counting the warp and filling, and exceeding in weight five ounces per square yard, 2c. per square yard; if bleached, 24 c. per square yard; if dyed, colored, stained, painted, or printed, 3 c. per square yard.

On all cotton cloth, not bleached, dyed, colored, stained, painted, or printed, exceeding one hundred and not exceeding two hundred threads to the square inch, counting the warp and filling, 2 c. per square yard; if bleached, 3 c. per square yard; if dyed, colored, stained, painted, or printed, 4 c. per square yard: Provided, That on all cotton cloth not exceed ing two hundred threads to the square inch, counting the warp and filling, not bleached, dyed, colored, stained, painted, or printed, valued at over eight cents per square yard; bleached, valued at over ten cents per square yard; dyed, colored, stained, painted, or printed, valued at over thirteen cents per square yard, there shall be levied, collected, and paid a duty of 35 per cent ad valorem.

On all cotton cloth, exceeding two hundred threads to the square inch, counting the warp and filling, not bleached, dyed, colored, stained, painted, or printed, 3 c. per square yard; if bleached, 4 c. per square yard; if dyed, colored, stained, painted, or printed, 5 c. square yard: Provided, That on all such cotton cloths not bleached, dyed, colored, stained, painted, or printed, valued at over ten cents per square yard; bleached, valued at over twelve cents per square yard; and dyed, colored, stained, painted, or printed, valued at over fifteen cents per square yard, there shall be levied, collected, and paid a duty of 35 per cent ad valorem.

On stockings, hose, half-hose, shirts, and drawers, and all goods made on knitting machines or frames, composed wholly of cotton, and not herein otherwise provided for, 35 per cent ad valorem.

On stockings, hose, half-bose, shirts, and drawers, fashioned, narrowed, or shaped wholly or in part by knitting machines or frames, or knit by hand, and composed wholly of cotton, 40 per cent ad valorem. Cotton cords, braids, gimps, galloons, webbing, goring, suspenders, braces, and all manufactures of cotton, not specially enumerated or provided for in this act, and corsets, of whatever material composed, 35 per cent ad valorem.

Cotton laces, embroideries, insertings, trimmings, lace, window-curtains, cotton damask, hemmed handkerchiefs, and cotton velvet, 40 per cent ad valorem.

Spool-thread of cotton, six cents per dozen spools, containing on each spool not exceeding one hundred yards of thread; exceeding one hundred yards, on each spool, for every additional one hundred yards of thread, or fractional part thereof in excess of one hundred yards, 6 c. per dozen.

Flax, hemp, and jute-yarns, flax or linen thread, twine, and pack-thread; brown and bleached linens, ducks, canvas, paddings, cot-bottoms, diapers, crash, huckabacks, handkerchiefs, lawns; flax or linen laces and insertings, embroideries, or manufactures of linen; burlaps; oil-cloth foundations, or floor-cloth canvas, oil-cloths for floors, stamped, painted, or printed, and on all other oil-cloth (except silk oil-cloth), and on water-proof cloth; gunny-cloth, not bagging; bags and bagging, and like manufactures; bagging for cotton or other manufactures; sail-duck, or canvas for sails;

Russia and other sheetings, of flax or hemp, brown or white; and all other manufactures of hemp, flax, or jute, or of which hemp, flax, jute, jute-butts, manila, ramie, china, sunn, or sisal grass, or other vegetable substance, shall be the component material of chief value, not specially enumerated or provided for in this act, 30 per centum ad valorem. Tarred cables or cordage, 2c. per pound. Untarred manila cordage, 14c. per pound. All other untarred cordage, 24c. per pound. Seines, and seine, salmon-net, and gilling twine, 25 per cent ad valorem.

"

Woolen cloths, woolen shawls; flannels, blankets, hats of wool, knit goods made on knitting-frames, balmorals, woolen and worsted yarns; bunting; women's and children's dress-goods, coat-linings, Italian cloths, and goods of like description; clothing, ready-made, and wearing apparel of every description, and balmoral skirts and skirting; cloaks, dolmans, jackets, talmas, ulsters, or other outside garments for ladies' and chil dren's apparel, and goods of similar description or used for like purposes; webbings, gorings, suspenders, braces, beltings, bindings, braids, galloons, fringes, gimps, cords, cords and tassels, dress-trimmings, headnets, buttons, or barrel buttons, or buttons of other forms of tassels or ornaments, wrought by hand or braided by machinery; Aubusson, Axminster, and chenille carpets, and carpets woven whole for rooms; Saxony, Wilton, and Tournay velvet carpets; Brussels carpets; patent velvet and tapestry velvet carpets; tapestry Brussels carpets; carpets and carpetings of wool, flax, or cotton, or parts of either, or other material not otherwise herein specified; and mats, rugs, screens, covers, hassocks, bedsides, and other portions of carpets or carpetings; and all manufactures of wool of every description made wholly or in part of wool, worsted, the hair of the alpaca, goat, or other animal, or a mixture of them, not specially enumerated or provided for in this Act, 35 per cent ad valorem.

Treble ingrain, three-ply, and worsted chain Vene tian carpets; yarn Venetian, and two-ply ingrain carpets; druggets and bockings, printed, colored, or otherwise; endless belts or felts for paper or printing machines, 30 per cent ad valorem.

Hemp or jute carpeting, 6c. per square yard.

On all sugars, 90 per centum of the several duties and rates of duty now imposed on said sugars: Provided, That imported sugars which have been subjected to an export duty by the country where produced or whence imported shall be subject to duty as now provided by law.

Vote on motion to consider the bill-Only 35 Democrats vote "no," while 135 Democrats vote "aye." The Republicans prevent its consideration.

On the 17th of June, 1886, Mr. Morrison offered a motion that the House resolve itself

into Committee of the Whole, to consider the above bill. The motion was rejected by a vote of 140 yeas to 157 nays, -135 Democrats, 1 Greenback-Democrat, and 4 Republicans voting "yea," while 121 Republicans, 1 Greenback-Republican, and 35 Democrats voted "nay," as follows:

66

YEAS-Messrs. J. J. Adams, J. M. Allen, C. M. Anderson, Ballentine, Barbour, Barksdale, Barnes, Barry, Beach, Belmont, Bennett, Blanchard, Bland, Blount, C. R. Breckinridge, W. C. P. Breckinridge, Burnes, Bynum, Cabell, Caldwell, F. Campbell, Can dler, Carleton, Catchings, Clardy, Clements, Cobb, Cole, Compton, Comstock, Cowles, Crain, Crisp, Croxton, D. B. Culberson, Daniel, Dargan, A. C. Davidson, R. H. M. Davidson, Dawson, Dibble, Dougherty, Dunn, Fisher, Ford, Forney, C. H. Gibson, E. Gib son, Glass, Glover, W. J. Green, Hale, Halsell, Hammond, Harris, J. T. Heard, Hemphill, J. S. Henderson, Herbert, A. S. Hewitt, Hill, Holman, Howard, Hudd, Hutton, James, T. D. Johnston, J. H. Jones, King, Kleiner, Laffoon, Landes, Lanham, Lore, Lovering, Lowry, Mahoney, Matson, Maybury, Me Creary, McMillin, McRae, J. F. Miller, Mills, Mitchell, J. B. Morgan, Morrison, Neal, Neece, Nelson Norwood, Oates, O'Ferrall J. J. O'Neill, Outhwaite,