applicable at the close of 1835. In other words, the expenditures will in the ensuing year, for only the objects specified in the estimates, probably exceed the receipts in that year, about four millions of dollars, and thus to that extent, reduce the balance now on hand.

IV. EXPLANATIONS OF THE ESTIMATES FOR 1836, WITH SOME SUGGESTIONS ON THE PROBABLE CHANGES TILL 1842.

The basis on which the above estimates rest, will now be exhibited and explained.

In the peculiar condition of the country at this time, without any debt to absorb our surplus receipts, and amidst the great changes which have recently happened, and will probably continue to happen, in our whole revenue and expenditures, till after the essential alterations made by exist ing laws shall cease in 1842, this Department feels bound to enter more into detail than usual concerning the grounds of its estimates, and to disclose more fully every material consideration which has led it to the results presented. Congress will thus be better enabled to judge of their accuracy and to correct any unintentional errors. For convenience in reference, a tabular statement is annexed, (A) which presents separately for 1833, 1831. and 1835, so far as the last is ascertained, the general estimates in one column, the actual appropriations in another, and the expenditures in a third. To these are added, in other columns, the whole revenue, with the exports and the imports for each of those years. For a similar reason, the register. has been requested to have the detailed estimates for 1836 prepared with a second column, showing against each the actual appropriation in 1835 towards a like object.

Explanation of the estimates of receipts from customs.

In respect to the estimated receipts into the Treasury for 1836, so far as derived from customs, they have been computed on an importation of foreign merchandise, expected to be near the average of the last three years: but much less than the importation of the year ending in September, 1835. Under our present system of revenue, derived usually in the ratio of three-fourths to six-sevenths from customs, the amount of imports have a very important bearing on our whole receipts. The amount of exports is likewise material, as in some degree influencing the imports, and in the present condition of the country, throwing much light on its great agricul tural prosperity, and furnishing, with the others, highly useful indications concerning the extent and increase of our foreign commerce.

The imports during the year ending September 30th, 1835, are ascertained and estimated at $151,030,368.

They show, compared with the preceding year, an increase of $24,509,036. Those during the three past years, have on an average been about $128,556,670.

The exports during the past year are ascertained and estimated at $118,955,239; of these, $98,531,026 were in domestic, and $20,424,213, in foreign products. Compared with the preceding year, they exhibit an increase of $14,618,266.

As some evidence, that our estimates of the whole importations the ensuing year are founded on correct data, it appears from a document annexed (C) giving their amount from 1790, that they have constantly and sometimes largely fluctuated between particular years, though comparing most terms of a few consecutive years with former ones they have generally increased. Thus the whole imports during the five years prior to 1835, exceeded those of any former period of similar length by nearly fifty millions, except on one occasion, almost thirty years since, when they approached near; and another, about twenty years since, when they exceeded their recent amount; in consequence, at the former period of our extraordinary share in the carrying trade, and at the latter one, of the large demands to supply the deprivations which had been caused by war, and to meet the increased calls of numerous new commercial enterprises, fostered by returning peace. But the very fact of our recent importations having been so large, is one of the causes why a considerable diminution in the whole amount in 1836 is anticipated. Some further causes will hereafter be specified, in connection with other considerations, which, it is believed, will tend to produce the same conviction. When we proceed to examine the free or dutiable character, rather than the amount of our imports during only a few years past, with a view to estimate more critically the revenue which will probably be received from them in 1836, and to form some general conjectures upon the subject thence forward to 1842, it is a fact, deserving careful notice, that while the whole amount of imports has for some years been increasing, that portion paying duties has greatly diminished, and at the same time, the portion exported and entitled to drawback, has not diminished in a similar ratio.

A statement is subjoined, which furnishes important details on this point since the late great changes in the tariff. (B.)

The general results from them are, that while the Importations paying duties have fallen off in 1833 about eleven millions, and in 1834, seventeen millions more, and the free goods increased in even larger proportions, the exportation of dutiable articles has fallen off in the corresponding years only about six and two millions, leaving the actual consumption in the United States of such foreign merchandise as pays duties at little more than one-third of our whole imports, and quite twenty millions less than in 1832. This computation as to the consumption, is made on the probable hypothesis, that the stock of such merchandise on hand remained about the same at the close of each year, which, though not correct in some single years, on account of wars and various vibrations in trade, would in any series of a few years be near the truth. The importations, however, in 1835, and especially in the last quarter, as they have been unprecedently large, exceeding, it is computed, in that alone, more than fiftythree millions, and mostly not yet consumed, may be thought to constitute some exception to the above rule; and hence, coupled with the fact that the returns are still incomplete, and depend in part on estimates, their amount and character have not been introduced into this comparison. But they are inserted in the table, as far as ascertainable, and if considered without any unusual limitations or deductions, would show a great fluctuation in the consumption, both of all foreign merchandise and of that which is not free.

The rate of duty has in many articles been so essentially reduced, or entirely removed, as to lessen the whole receipts from customs over twenty

four millions in the last two years, and produce most of the above differences in the character of our imports. With a view to enable Congress to form a just estimate of the probable receipts from customs the ensuing year, there should be made to any changes occasioned by the above causes, such additions and diminutions for the past and the future as are required by the difference, which often happens between the amount of duties accruing and the amount actually received in any particular year.

In some instances this difference happens by large changes in the amount of bounties paid or duties refunded; or, as in 1833, by the substitution of cash duties for credits, and by giving short instead of longer credits; and in others, by the bonds due after the commencement of some years, as in 1834, having been larger in amount than in 1835, some having been given for duties on certain articles, which afterwards became free, and others having been given for more duties on the same kind and amount of articles before the biennial reduction took effect, than they were subject to afterwards. Without new legislation, however, none of these circumstances, except the last one, can operate much hereafter till 1842; and the effect of that will generally not exceed a quarter of a million of dollars, and is a gain to be felt not till 1837. Another difference arises sometimes from larger collections of old debts due for customs, as when in 1835, but not anticipated in 1836, nearly one quarter of a million has been collected on a single claim, originating as long as ten years ago, independent of many smaller collections on still older claims.

The only remaining difference of much importance in our receipts from customs the ensuing year, compared with the last one, will probably result from the biennial reduction in duties of nearly a million of dollars, which the existing laws provide shall take place after the close of the present month. This reduction of duties might, under some circumstances, be chiefly obviated by an increased importation and consumption of foreign merchandise. But it has been already stated, that the whole importations were of iate so unusually large, as with other causes hereafter explained, not only to forbid any reasonable expectation of their increase in 1836, but to render a reduction probable; and, it is further believed, a careful inquiry will show, that the consumption of all kinds of foreign merchandise in the United States has generally enlarged in a smaller ratio than is supposed by many, and especially that the use of such as pays duties, which is the cardinal test of our receipts from customs, will rather lessen than increase in 1836, and be not materially enlarged till after 1842. By the table before referred to, (C) which is the most accurate the records of the Treasury enable me to prepare, it will be seen what our consumption of foreign merchandise of all kinds has been during each of the the last forty-five years. By comparing, not single years with others, but a series of three years, as, for instance, 1792, 93, and '94, with other similar series after intervals of ten years, and paying less regard to the first and third series, as the former rests on estimates made now, and not on valuations at the time, and the latter, being in a period of war, is too irregular for a guide, it appears that the average increase of consumption of all foreign merchandise has been not three per cent. annually in the last thirty years, and has been not equal to the increase of our population during the same period by over one and a half per cent. While the increase of the latter has also been very uniform, varying between every census, and for the whole time very steadily between four and a half and five per cent. that of the former has fluctuated

largely, rising under the great impulse given to credit, industry, and enterprise, by the adoption of our Constitution, to near seven per cent. yearly, during most of the first ten years, and then falling to only about one per cent. the next twenty years. After that, by one of those customary tides in trade which almost periodically occur soon after checks to overtrading, an exhaustion of old stocks of goods, and enlarged means to purchase, from abundant crops, their high prices, or any other cause, the rate of increase in consumption rose again; and by reason of so many free goods, and especially the unprecedented imports of specie in 1833 and 1834, amounted, on an average, during the last ten years, to four per cent. annually. Deduct, however, that excess of specie alone, and the increase would not much exceed three per cent. on the consumption of all kinds of foreign merchandise; while on that of such merchandise as pays duties, there has, as before detailed, been a great decrease; and there is no likelihood of much permanent increase, till the whole importations shall be greatly augmented, or the tariff be again extended to a larger list of articles. By the customary reflux of that tide from opposite causes, and the greater substitution of some kinds of domestic products, it is believed that the above rate of increase as to all foreign articles, will again soon decline, and probably remain much below that of our population, until new legislation, or the essential alterations now going on in the tariff, shall materially enlarge the amount of goods paying a low duty. As the capacity of the country to purchase foreign goods will, all other things remaining equal, be then enlarged in the ratio of what it does not pay for duties, such alterations, when their influence shall be fully felt in 1842, will, as the great alterations in 1832 and 1833 have already done, doubtless tend again to augment somewhat the whole importations and consumption of foreign articles. Another comparative view, perhaps more striking, of this consumption, is, that according to the value of the articles as estimated at the custom-house, its average amount in 1790 and '91 was about seven dollars per head to our population; in 1800 and 1801, over ten dollars per head; in 1810 and 'I1, about seven; but in 1820 and 21, only about six; and in 1830 and 31, only about five, or one-half of what it was thirty years before. This great difference has probably arisen, not only from the increased domestic production of certain manufactures, such as cottons, woollens, salt, and iron, and of some articles more immediately connected with agriculture, such as sugar and molasses, but from a fall in the price of many articles, making the value less of a similar quantity consumed, and from the greater extension of our population into the west, where the independent habits of the people, and the comparatively enhanced cost of foreign articles, would tend to cause a smaller consumption of them than near the sea-board, where their price is lower, and it is customary to depend more on foreign supplies.

It will be noticed that all the above computations have been made of the value, and not the quantities of the articles consumed. The latter would be more difficult to exhibit in so great detail and fullness. But if they could be, the result would, in a view connected with political economy, be more satisfactory, as showing more clearly the comparative habits of our population at different periods; because prices, especially of some manufactures, have fallen during the last forty years, probably, on an average, over fifty per cent. and our whole consumption of foreign articles has, without doubt, diminished more in value than in quantity.

But the difficulties before mentioned have prevented any further exhibit, coupled with the circumstance, that, in respect to the amount of duties, the inquiry now most pertinent and material, the result, in the present state of the tariff, would be much less important than some might at first imagine, as it would be wholly unaltered in all cases of specific rates of duty, whether the values or the quantities be detailed in the statements, and equally unaltered in over half of all the foreign goods now imported, they being at present free, and the rate of increase in their consumption, by additions to our population, or other causes, having no influence whatever on the revenue.

Hence, in looking to the future, it is essential to notice, that, if the increase in consumption of all foreign goods should continue to be on an average till 1842, as large as during the last thirty years, it would only add yearly about one and one-quarter millions to the imports of goods which are now dutiable, and on which the average revenue would not probably exceed two hundred and fifty thousand dollars per annum. But it is presumed that the increasing substitution in our importations for consumption, of free for dutiable goods, when the former will answer the desired purposes of the community, will, on account of their comparative cheapness, make the free rather than the dutiable goods usually increase, and be frequently in a ratio quite large enough to counteract or neutralize the effects of any tendency to augment the revenue, by an increased consumption of all kinds of foreign goods.

The commercial returns for 1835 were not received so as to be used in any of the above computations; but, so far as now ascertained and estimated, they are given in the table, and furnish another illustration of the fluctuating character of our foreign trade, and the uncertainty of any statements founded on it, which do not extend to comparisons of various and distant periods of time.

The exports of domestic produce in the ensuing year, will, as before remarked, exert some influence on the amount of importations, and hence on the revenue from customs. But the effect of those exports on our importations for immediate consumption, including all but specie, and other articles to be again exported, will in reality always be less than is sometimes supposed; provided the domestic supplies of similar articles should, as of late years, continue rapidly to increase, and should prove to be equal in quality, and not higher in price, than similar ones imported from foreign nations. In that event, though the ability of the people to buy foreign goods will fortunately be greater, where the exports are large, yet the permanent returns from abroad will generally be more in money to be expended at home, and less in goods to be consumed. But the diversity of opinion which exists, concerning some of these considerations, has led me to submit the document annexed. (D.)

From this it appears that our whole exports, of every kind, in the last five years, including the estimates for 1835, have not exceeded those during a similar term, from 1803 to 1807 inclusive, but about forty millions, and being an excess no larger than at most intervening periods, while an extraordinary increase has taken place in our exports of domestic products, exceeding in value those during that term more than one hundred and fifty millions, and being quite double the excess at most intervening periods. Indeed, it will be seen that they have been almost a hundred per cent. larger than they were in any similar term of years previous to 1816, and have exceeded