tries,- It Hows to them by a law as regular and as certain as . gravitation. Bence, although the "precious metals are produced In considerable quantities In but a - Tew countries, they affect the prices in all. Not bo with a paper currency, which is local in its use and In its influence, Its advantages, when convertible, are admitted; for; if convertible, , although It swells the volume of ourrency, it rather increases enterprise than-prices. Its convertibility prevents expansion, while its larger volume gives impetus to trade and creates greater demand : for’labor. But when a ■oarer currency is an Inconvertible > currency; and especially when, bolng so, it is made by the sovereign power a legal tender, it becomes hrolifloof mischief. Thenspeoie becomes de monetized, and trade is uncertain In its results, because the basis is fluctuating;’then prices advance as the volume of currency increases; and reqnire as they advance'farther additions to the'circulating medium; then" speculation - becomes' fife, and f’the few are enriched at the expense of the many;” then- industry de clines, and extravagance Is wanton; then, with - a dinibution of prooucts, and Consequently of exports there is an increase of imports, and : higher tariffs are required on acconnt of the general expansion, to which they, in theirturn; - EiVe new stimulus and support, while the pro -tection Intended to be given by/ them to home industry is in a great measure rendered lnopi ’ erative by the expansion. This, notwithstand, ing our large revenues and' the prosperity-of ’’ many branches of Industry, is substantially the condition of the United States, and the impor tant question arises, ’What are the remedies? i - Wlih entire deference to Congress, the Seore- : tary suggests that they are to be found— *> i ’ First, In compelling the National Banks to re deem their notes at the' Atlantle oitles, or, 1 what would be better, at a single city. '" Second. In a curtailment of the currency to the amount required by legitimate: and health ' ful trade. ' : i Third. In a careful revision of the tariff, for the purnose of harmonizing it with oili internal ’ taxes—removing the oppressive hardens now ■ imposed/upon certain branches of industry, and relieving altogether, or greatly relieving, raw materials from taxes, in order that theproduct of labor may he enhanced and production and exportation increased. 1 " - Fourth.' In the issue of bonds, payable in not over twenty years and bearing interest at the rate of not over five per cent., payable inEng ■ land or Germany, to' an amount suflloient : to absorb the six per cent, bpnds now held in Eu rope, and to'meet the' demand thefe for actual and permaiiferitinvestment; and— Filth. In the rehabilitation of the 'Southern ptfltfiß.' 1 First. The utility of compelling National Banketo redeem their notes at commercial centers, as-well as atthelr own coUntersVis ap- Sarent. The object of Congress,-in the eitab shment of the National Banking System, was to furnish the people with a solvent currency of uniform value throughout the United States, The solvency of the notes- of the National Banks is secured by a deposit of bonds with the Treasurer at Washington; but as the Banks are scattered throughout the country, and many of them are in places difficult.of access, a redemption of their notes at their respective counters is nbt all that is required to make them throughout the United Btaies a par circu lation. It is true that the notes of all National Banks are receivable for all public dues, except duties upon imports, and most be paid by the Treasurer In case the Banks which issued are unable to redeem them, but it will not be claimed that the notes of Banks, although per fectly solvent, but situated in interior towns, are practically as valuable as the notes of Banks in theseaboard cities. It may be urged that, to compel remote hanks thOB to redeem, would be a hardship; but as very few well-managed banking Institutions in the United States fell to keep accounts and balances In some of the Atlantic cities, this hardship would be found, noon trial, to be im aginary, rather than real. Bat If it should be a hardship, it would be a necessary one; and the interest of the banks must bend to the inter ests of the people. Besides, without.such re demption, there will be practically none at all, at least until specie pavments are resumed; and when there are no redemptions, tjiere is always a constant, tendency to inflation and illegiti mate banking. The frequent and regular re turn of their notes is needed to keep theonslness of the banks in a healthy condition, and thus invariably proves no less advantageous, to .the stockholders ■ than to the - public.-•• Unless the banks shall be compelled ’ to redeem in United' States notes, many of them will neither lend their influence In lavorof ajjretnrn to specie payments, nor bs prepared tor them when without their agency specie payments shall bebronghtabont. If the determination of the question was left to the Secretary, all the banks would be required to redeem la New York, the acknowledged com mercial metropolis of the Union. Thedeslgna tion'of that oity as the redeeming point for all national banks would not only give absolute uniformity to their circulation, but would so facilitate the assorting and returning of notes that practical and general redemption would be enforced. It is certain tnat this will not be done ■ under the ex isting provisions of the law:-It is not ■certain that it will be, unless all banks shall be compelled to redeem at a single point. This might be objected to by the banks In other At lantic cities on the ground that it , would ag grandize New York at their expense. But New York is already the financial and commercial emporium of the Union. Most of the interior hanks keep their chief balances In thatclty, be cause they are. more available and valuable there than elsewhere, and incompelllhg all the banks to redeem at the metropolis of trade, Congress would be only yielding to an unwrit ten but controlling law to which statutes should conform; The course of trade compels, and will compel, those National Banks whose business Is based upon the products of the country (and these must always constitute a major ity) to keep their chief balances In New York, whether they redeem there or not. If exchanges between that cltv and other cities sbonld be in favor of the latter, the re demption by their banks would be made at their own counters, and no sacrifice but that of local pride would be involved in their being re quired by law to redeem atthe common center. When >ew York shall be a debtor city j,o Bos ton'and Philadelphia, the notes of the Boston and Philadelphia banks will go home, and not to New York, for payment. What is required is an aetive regular and actual redemption of - the notes of all the National hanks. To effect ■ this, local pride should be sacrificed and minor Interests shonldbe disregarded. What Is Bald wpon this subject by the acting Comptroller of the Currency Is fully endorsed. : The second remedy suggested is a curtailment’ of the currency. The views of the Seretary upon the question of a reduction of the currency have been so ■frequently expressed, that it is only necessary - now toconsiderwheiherthecurtallmentshould i; be of the United States notes or of the notes of . the national banks. On this subject his opin ions have undergone no change since he com -1 municated them tn his reports as Comptroller of the Currency. Banks of Issue. organized un derstate laws, havebeeninejdstenceever since ' the formation of the government. Bythede : . •cislqns of the highest tribunals of the country ;' their constitutionality has been, affirmed, and they have become so interwoven with the busi ' ness of the country, and such large investments " /.have been made in them, that their destruction would involve consequences of a very serious • character. Whether or not the country would have, been more prosperous without them— whether the stimulus they have given to enter . prise," and " the facilities. they have ■extended to trade, ‘have or have not / been counterbalanced by the artificial prices 'Which they have created, and the actual losses which the people have sustained by the crises they have occasioned, and by their suspensions . and failures—it Is too late td consider. -When "V. ' .the Notional Currency Act was passed by Con cress. State banks were In full operation; and 1 Zuotless than four hundred millions of dollars J \ / were Invested in them as. capital. In some States, by judicious legislation and careful man agement, they had afforded a .local circulation satisfactory and safe. In other States', waere . no reliable security, or insufficient 'security, Had been required for the protection of the public, and' their management had been con fided to incompetent or dlshonest’hands, there had been numerous failures, and heavy losses 1 / bad . been sustained by the holders of their v. ‘ notes. ~ ' Soon after the, commencement :of the rebel lion it became appafeht that a heavy national debt was to be created, the Interest and prlncl pal of which could only, be paid by a general system of Internal taxes, involving a necessity for. a circulating medium equal In yalne throughout the country, and safe for. the gov ' ■ . eminent to receive In payment of dues. This • ■ subject, of course, demanded and received the . earnest and careful consideration of the dis tinguished gentleman at that time the financial minister of the government, who .caused to be i ' -prepared and submitted to Congress a bill “to , - ' provide a national currency secured by a pledge , or United States" bonds, and to provide for; the . circulation and. redemption thereof,” which, • : after haviDg been; carefully considered and > ’ thoroughly discussed, became a law on the 25th •/ " Of February, 1563, Prior to the passage of this , "■' /aotJ Issues by the" government had been an - thorlzed, and a large amount of government notes tad .. been, put into circulation,. ;Bnt. - ■ - there is nothing inthe acts authorizing' their Issue, or In the communications of the Score-' tars, or in the discussions In Congress, to j ustify the opinion that they were intended to, be a ' permanent circulation. " On, the contrary, the /. provisions in the law for theif conversion Into ■i , bonds, and th« arguments‘of the advocates of, . . their Issue, afford ample evidence that they, 6 were.regardedas merely temporary, and; just 1- ■iks flfthle only by an emergency, which it was sup-- ■#. nosed nothing elseOcould so adequately meet, ■r Bad It beenpropbsed that these notes should ta apormanent circulation and take the place" THE DAILY EVENING- TmLLE’LTN ■ PHILADELPHIA, TUESDAY, DECEMBER 4,IB66.—TRIPLE SHEET or Bank notes, there Is good- -reason to suppose that the proposition would have had few’, If any, advocates. Nor was the -National Banting System prepared by itaanthor, nor adopted by Congress, to destroy the State Banks, nor to divert capital from banking, hut rather to -compel all banking institutions 'lssuing notes asmoney tosecnretheni..beyond any conceiva ble contingency, by deposits with the Treasurer! of the United-States; thus,without-the? agency of aNational Bank, providing a national cur rency :: which would’ save ■ the-govern meht and people from losses, nf ; which lucre was constant danger, from a local «r, d unsecured circulation. The National Bank ing Ss stem- was Intended, 1 while not invading the rights of the Stateß, nor dath'aging private interests, to.furnish the' people with ft perma nent paper circulation. The United States notes were intended to meet a temporary emergency, and to be retired when the emergency had passed. .. ' The present Secretary was not the advocate of theiNalional Banking System, Snd claims only the credit of'having used his'best efforts, as Comptroller, to pnt it Into successful operation. But he has no hesitation in’ pronouncing It a vast Improvement upflin the systernWhlch It superseded, and one admirably adap'ted to'.oar peculiar form of government. , There are 1 Sub stantial objections to all banks of issue, add if none existed Iff the United Statee, it' might be very questionable if any should’be' Introduced; bnt having taken the place of the State'Banks, and furnishing as they: do a circulation' as free from objection as any that is'Ukely to Be pro vided, tne.S’ecretary Is of the opinion that- the National Banks should be sustained, and that : the paper circulation of the country, shpuid.be reduceaynot by compelling them to retire their notes; bnt by the withdrawal of the 'States'notes.;-. ; The Secretary Is not unmindful of .the l saving of interest which results tothe government by the use of its own currency.' nor, of the favor with which this currency is regarded by the people: bht all considerations of thishfitute arp more than by the discredit Which attaches to the government by falling to pay, its notes according to their tenor,' by the bad influence of this voluntary discredit upon the public morals, and the wide departure which a continued' issue of legal-tender notes ' involves, from 'past usages, if 'pot; from the teachings'of the Constitution Itself. • The gov ernment Cannot exercise powers' not conferred hy its organic law. or necessary for itaown preservation, nor dishonor its own Ongage mentswhett able to meet them, withont either ' shocking or demoralizing the sentiment of the people: and the fact that the Indefinite con tinuance of the circulation of an Inconvertible bntatlll legal-tender currency Is so generally advocated,indicates how fer'we have wandered from old landmarks b9th in finance and ethics. The views of the Secretary ton this point were so fully ex pressed in his former report that it is not ne cessary to restate them. It is sufficient to say that his opinions are nnchaneed,and that reflec tion and observation during the past year have assured him of their correctness. Anxious as he is to lighten the public burdens and reduce the public debt, he does not hesitate to advise that these noteß be withdrawn from circula tion, and that the furnishing of what' paper currency may be required be left to corpora tions, under existing laws and such amend ments of these laws as experience may dictate lor the better protection and advancement of the public interest. How rapidly they may be retired must depend upon the effect which contraction may have upon business and In dustry, and can be better determined as the -work progresses. The rednotion could probably be increased from four millions per month, as contemplated by the act of April 12, 1566, to six millions tier month for the present fiscal year, and to ten millions par month thereafter, withont preventing a steady conversion of the interest-bearing notes Into bonds, or injuriously affectlne legitimate busi ness. No determinate scale of reduction wou id, - however, in the present condition ol our affairs, be advisable. The policy of contracting the cir culation of notes should be defi nitely and unchangeably established, and the process should go on just as rapidly as possible -withont producing a financial crisis or. serlons ly embarrassing those branchesof Industry and trade upon which onr revenues are dependent. 'There Is a great adaptability In the business of the United States, and It will easily accommo date Itself to any policy which the government may adopt. That the policy indicated is the true and safe one, the secretary Is thoroughly convinced. If it shall not be speedily, adopted and rigidly but Judiciously enforced, severe financial troublesare in store for us.- The Secretary cordially approves what Is said hy Acting Comptroller of the Currency, in his report, in regard to the importance of furnish ing the people of the South with the bank-note circulation which their business may require, and agrees with him in the opinion which he expresses ofithe beneficial results, political, financial, and social, to be effected by the organ ization of national banks in the Southern Hates, but he cannot recommend fin Increase of the bank-note circulation of the country be vond three hundred millions of dollars, and hopes that the necessities of those States may be supplied rather by a reduction of the amount awarded to other States, than by ah increase of the volumei of currency. The third remedy suggested is fi revision of the tariff for the pnrpose of harmonizing it with internal taxes, a rednotion of taxes upon raw material, &0.,&c. The 66th section of the act entitled "An act to reduce internal taxation, &c.,” approved July 13, 1866, provides: "That the Secretary of the Treasury is hereby authorized to appoint an officer in his Department, who shall be styled ‘Special Commissioner of the Revenue,’ wnose office shall terminate in four years from the thirtieth day of June, eighteen hundred and sixty-six. It shall be the duty of the Special Commissioner of the Revenue to enquire Into all the sources of national revenue, and the best method of collecting the revenue; the re lation of foreign trade to deffiestlc industry; the mutual adjustment of the systems of tax ation by customs and excise, with the view of ensuring the requisite revenue with the least disturbance or Inconvenience to the progress of Industry and the development of the re sources of the country; and to Inquire, from time to time, under the direction ot the Secre tary of the Treasury, Into the manner in which officers charged with the administration and collection of the revenues perform their duties. Andthesaid Special Commissioner of the Rev enue shall, from time to time, report through the Secretary of the Treasury to Congress either In the form of fa bill or otherwise; such modi fications oi the rates of taxation, or off the methods of collecting the revenues, and such other facts pertalnlng to thetrade, Industry, commerce, or taxation of the country, a 3 he may find- by actual observation of the opera tion ofthe law, to be, conducive;to]the public Interest.” On the 16th day of July last, Mr. David A. Welles was appointed Special Commissioner of Revenue under the authority ■ above recited, and he was Instructed to proceed at once to perform the contemplated work, giving his chief attention to the tariff, with the view of as certaining'whai modifications are required to adjust itto the By stems of internal taxes,stlmu late industry, and make labor more produc tive. - /": - ■' ’ * : The ability displayed by Mr. Wells in: the performance of hlsdnties as one of the commis sioners for the revision of the Internal revenue laws, and the heartiness with whicn he is pros ecuting his investigations, give the best assur ance that he will perform the work in a manner creditable to himself, and satisfactory to Con gress and thepeople. i The Secretary addressed to him on the 14th day of September,lB66,aletter, ' from which the following Is extracted: .“In view Ofthe fact that the revision of the tariff la certain to engage the attention of Congress at ite next session, I consider It especially desirable* that the Treasury Department should pared to furnish as much Information pertinent to the subject as can be obtained and collected within the limited timer available for the neces sary investigations. ■ Yon are, therefore, hereby requested to give the subject of the revision of the tariff especial attention, and to reporta bill which, if approved by Congress, will De a. sub stitute for all acts imposing custom duties, and which - will render the administra tion of this branch of the revenue system more simple, economical, and effective;' “In the discharge of this duty, you will con sider the necessity of providing for a large, cer tain and permanent revenue, recolleoting the fact that the existing tariff has proved most ef fectivelnthis direction. Yon will, .therefore, endeavor, first, to secure for the government a revenue commensurate with Us necessities; and secondly, to propose such modifications of the tariff laws now in force as will better ad j uat find. equalize the duties upon foreign imports < with the internal'taxes upon home productions. -If this lastresult can be obtained without detrW ment tothe revenue, byreduolng taxation upon raw materials and l the machinery of home pro-: dnctlons, rather than by Increasing the rates of. imports, it would, In my opinion, hy decreasing tbe cost of production andjncreaslng- the pur chasing power of wages, greatly promote j the interests of the whole country.” ■ ! ; Therels no subject; which has In times past provoked so muoh discussion, and in regard to which opinions have differed so ■ widely , as the. tariff.: It has beena standing matter of section : al and political strife for nearly half a.century, and tbe sentiment of the people In regard to it is still qnite as much divided as when the* dls-. • cussion ofiit commenced. Always; a complex and diffiohlt questien.lt is particularly so,at the > present-time. Prior to the rebellion.ltliad no - relation to Internal taxes, for this form of fede ral taxation was then unknown .to our, people. It had little connection with the .currency; for, until the year 1862, although the Banks hal re peatedly: suspended Bpeoie payments, .speole ' 1 was the only : legally-recognized standard of value in the United States,Now;the.question ofthe tariff is to be considered In, connection with a permanent system of Internal taxes and a depreciated, butltrie hoped a temporary ls-gal tehder currency, i It la obvious that a scale, of • dutieß-uponimports which mlght have been. sufficient, judicious, and benefiqial when there werenolnternal federaltaxes and business was conducted nponaspecie basis, maybelnsufficlent iuj udlclous, Injurious now. A large revenue is at present Indispensable for- the payment of Che ordinary expenses of the government, the In terest upon the public debt, and fcr a gradual and regular reduction of the principal. Freed trade, although m accord with the principles or ' the government and the instincts of the people, cannot be adopted as a policy as long as the pub < 11c debt exlsis'in anything like its present magnitude. The long-hoped-for period -when there shall he no' legaiobstruct ions to a free’ exchange of commodities- between the United States and other countries Is still far in the fu ture Duties npon imports are not only necessary for revenne, but also for; the protection of those home interests upon which,'-heavy intarnal taxes are to be assessed. Thequestlon now be fore the country is one of: adaptation; rather than principle.;" How- shall-: the ne cessary'revenne be raised'under,a system ol internal '(did .external taxes without-sus taining monopolies,.without repressing Indus try, wlthout’- dlseouraging enterprise, -without oppressing labor? In other wOrds, how shall the revenne be raised In a manner the least oppress si veto thepeople, without checking the. prosper? ity and growth dr,the country? TheiSeoretary IS not disposed to discuss tne question in t his re port, This will, it is expected, be > done elabo rately and thoroughly in the report of the Coml missioner. Be desires, - however; -to call altea tion to a few important facts In regard to sPme branches of business in- the United States; the consideration of which - may-tend to give a proper direction to the public, mind,upon h question soahsorblng and important. , , i - . - No single ' Interest In the United- States,- fos tered although It may be by legislation, can long prosper at the expense of other great in terests. Nor can any Important interests be crushed by unwise-or unequal laws,-without other interests being thereby prejudiced.- For illustration: the people of the United States are naturally a commercial andmarltlinepaople— fond of adventure, bold,: enterprising; .persist ent. Now, the disagreeable. fact.must be ad mitted, that, with unequalled facilities for ob taining the materials, and. with acknowledged skill In ship-bnilding—witbthousands of miles of sea-coast, indented iwith. tbe..finest harbors in the world—with surplus . products , that re- r quire in their exportation a large andinoreas lng tonnage—we camneither profitably build ships nor successfully compete with English.: ships In the transportation ef .ourown produo- - tions. Twenty years ago. it was anticipated, that ere this theUultedStates would be the first maritime power lb the world. Contrary to our anticipations, our foreign commerce has de-’ clineanearfy fifty per cent, within the last six years. The tonnage of American vessels en gaged in the foreign carrying trade which en tered United States Dorta waa— In 1860 10,92,280 tonß. In 1865 2,94:1,661 tons In 1866 ...- 3.372,060 tons. The tonnage' of such vessels which were cleared from the United States was—. . In 1860..... 6.165,924 tons. In 1865 3,025,134 tons. In 1566 - :.... 3.383.176 tons. The tonnage of foreign vessels which entered our .fort* was— In iB6O 2,353,911 tons. In 1865 3,216,967 tons. In 1866 : - 4,410,421 tons. The tonnage of foreign vessels which were cleared was— In 1860 - 2.624,005't0n5. In 186> - 3.595,123 tons. In 1866 4,438,834 tons. It is true that a large proportion of this di minution-of shipping and ship-building was the effect of the war. The great destruction of merchant vessels by rebel crullers no. only In duced sales to neutrals, but dlsoonraged build ing. Alter the war, however, the Bqaretty of American vesselspugbt'lto have produced, and, but for a redundant currency and high taxes, would have produced activity .in our ship yards and a rapia increase of tonnage; but this haß not been the case. The prices of labor and materials are so: high that ship-building can not be made profitable in the United states, and many of onr ship-yards are being practi* . cally transferred to the British Provinces. It is only a few years since American ships were sought after, on account of their superiority and cheapness; and ; large numbers of vessels were built In Maine and other Slates on foreign account, or sold to foreigners, while, at tne same time, onr own mercentile marine was being rapidly increased. Now many of our ship-yards are abandoned, and in others very little activity prevails. It is true there has recently been some increase in onr foreign tonnage, but a good part of, this In crease is apparent only, and 1b the result of the new rule of admeasurement. It is an important truth that vessels can be built very much cheaper in the BriilshProvincea than in Maine. Nay.further, that timber can be taken from Virginia to the provinces, and from these prov inces to England, and there mode into ships which can be sold at a profit; while the same kind ofvessels can only be built in. New Eng land at a loss, by toe most skillful and economi cal builders. But the evil does not stop here: if the only, loss was that which the country sus tains by the dißfcohtinuance of ship-building, there would he less cause ol complaint. It is a weU-establtshed general, fact, that the people who build ships navigate them, and that a nation- which ceases to build ships ceases, of consequence, to be a commercial and maritime nation. Unless, therefore, the causes ! which prevent the bidding of ships In the ' United Stateß shall cease, the foreign carrying 1 trade, even of onr own productions, must be yielded to other nations. To this humiliation and loss the people or the United States ought not to be subjected. If other branches of In dustry are to prosper, if agriculture Is to be profitable, add manufactures are to be extend ed, tbe commerce of the cbnntry must be re stored, sustained and increased. Tne United States will not be " a first-class power among the nations, nor will her other Industrial In terests continue long to prosper as they ought , if her commerce shall be permitted to lan guish. Tbe same causes—a redundant currency and hlghtaxea—that prevent ship-building, tend to pi event the building of houses and even of manufactories. So high are prices of every description that men hesitate to build dwell lrgs as last as they are required, and thus rents are so advanced as to be oppressive to lessees, and the healthy growth of towns and cilleß Is retarded.. So it is in regard to manu factories. Mills which were built before the war can be run profitably, but so expensive are j labor and materials that new mills cannot be erected and put into Operation with anynros- I pect of fairretums upon the Investment, unless i npon the expectation that taxes, will remain as t hey are, and prices be sustained, if they are not advanced. The same causes are injuriously af fecting agriculture and other Interests which It ls notnecfeßsary to'particularize.: It Is every where observed that existing high prices are not only oppressing the masses of the people, but are seriously checking thfi development, growth, and prosperity" of the country. It Is not 'denied that the losses which the country has sustained, of able-bodied men by the war is one cause of'existing high §rlces;bnt mainly they are the-result ofa xe undant currency and high taxes.. ‘ . Toralse'the large revenue which Is now re quired, by systems of internal and external du ties, which, working In harmony, shall neither fepress industry nor check enterprise, and which shall be so devised as to make taxation hear most' heavily upon those who are most ‘ benefittedhytaxea and by the debt whioh ren 'dfers taxation necessary, requires great practi cal knowledge - and - wise statesmanship: CThls subject; always an interesting one to the heav -1 lly indebted natlons of Europe, has become, as oneof the 1 results of the war, deeply Interesting to the people of the United States. The Secre i tary does not, as before stated; intend to dis cuss it, bnt he ventures to suggest that the fol lowing geneml principles, some of which have been acted ttpbn by Congress, and the correct ness of all of which have been proved by other nations, may lie safely adopted as a guide tothe .legislation that la now required: i : ! ■ l.'That the fewest-numDer of articles, con sistent with the amount of' revenue, to be ralsed. Bhould be subjected to internal taxes, In order that the system'-may be simple, in Its 'execution,-and as little offensive and annoy ing as possible to the tax-payers, .. 2. That tbe duties upon imported commodi ties should correspond and harmonize With! the taxes upon home, productions; and 'that these duties should not he so high as to be prohibi tory, nor to.build up home monopolies, nor to prevent that, free exchange of commodities Which Is the-llfe of-oommeroe. Nor, on l the cither hand, should they be so low as to seriously -impairthe revenues, nor to subjeot the hbme manufacturerS.burdened with heavy Internal ’ taxes, to a competition with cheaper laboriand larger capital..which ..they, may be unable to '■sustain.: ■, . ... ... F . 3. That therawmaterials used in building and manufacturing,, and which are to be largely en- : hanced.in.valne.by.the. labor which Is to be ex pended upon them, should be exempted from ' taxation, or that tbe. taxes upon them should be low In comparison with the taxes' npon other . .articles... This la the pplioy. qf. other enlightened .nations and p lt:i& believed that the diminution of direct revenue which it would Involve, If adoptedby .the. United IStates, would.: be more than made up ..by the,augmented value which - it would give to labor, and hy the inorease of productions and of exports which would be sure to result from it. It should be constantly borne In' mind, that taxes upon raw materials dlrpqtly Increase tbe cost of production, and thus tend either to reduce the product of labor oi; to pre sent exportationß.to.loreigiimarkets. 4. That the burdens of, taxes shouldSSfaU . chlefly.unon .those whose interests are protected by taxation; and upon those to whom, .the pub -1 lie debt , is a source of. wealth and profit, and lightly upon the laboring classes, to whom taxa tion and the debt are without so many compen satory advantages. She next of the series of proposed remedies Is an issue of bonds, bearing interest at the rate of not exceeding five per cent, and: payable in. Europe, to an amount. sufficient- to absorb the six per cent, bonds in foreign hands; and sup- . ply the European demand lor • United states securities for permanent investment. No one regrets more than the. Secretary, the fact that so large an amount of our bonds is held abroad, or the unfortunate condition Of onr trade that has transferred themthlther. The opinion that the country has been benefited by the exporta tion'of its securities, is founded upon thesup : position that we hav«MW?ceived real capital in exchange for them. This supposition is, to a large extent, unfounded. ' Our bonds have gone abroad topay for goods, which, without them, might not have been purchased, i Not; only have We exported , the surplug products of our nixies and onr fields, with no small amount of our manufactures, but a' large amount 6f secu rities also, to pay for the 1 articles which we have purchased- from other countries. That these purchases :have been stimulated and in creased by the facility of haying for them in bonds, can hardly, be. doubted. Onr importa tions of goods' have been '.increased bynearly the amount of '• the bonds which have hsenex - ported. -Not one dollar in five of: the .amount of the five-twenties now. held in England and upon the Continent, has. been returned to the United Statesin the form of real capital; But If this were not a true statement of the case, the faot exists,' as has been already stated, that some three hundred and fifty millions of government bonds—not to mention State and railroad bonds and other securities—are in. the hands of the citizens of other countries; which may be re turned at any time for sale in the United States, 'and which; being so held; may seriously em bs rrassour efforts to return te specie payments. ■ After giving the subject careful consideration, the Secretary.basconeluded that it is advisable. that be should be authorized to'lssue bonds not : hiring more than twenty-' years to run, ana : bearing a low rate of interest, payable in Eng land?® Germany, to be used in taking up the- Six per cents now held abroad, and in meeting any foreign demand for investment that may exist, 1 The question howto be con- - sidered is not how shall our bonds he prevented from going abroad, for a large, amount has. already gone, and,others will follow as long as onr credit is good and we continue to buy more than we can pay for in any other way, but hbw shall they .be prevented from being thrown 1 upon the home market, to thwart our efforts in restoring the specie standard. The Secretary sees no practicable method of doing this at an early day; but by substituting for them bonds which, being payable-principal and Interest in Europe, will be less likely to be returned when their return is the least desired. The holders of oar securities in Europe are now subject to great inconvenience and not a little exDense in collecting their conpons; and it is supposed that flve per cent. 1 , or perhaps four and a half per cent, bonds, payable in Condon or Frank fort, conld-bnsufcstitnted for ourrsixper cents, withontany other expense to the United States than the trifling commissions to tbe agents through whom the exchanges might be made, fi be saving of interest to be thus effected would be no inconsiderable Item; and the advantages of having onr bonds in Europe placed in tne bands of actual Investors is too Important to be disregarded. <' Fifth. Tbe fifth and last remedy suggested Is. the rehabilitation of the States recently in ln snrreciion. In alluding to thls-snbject, the Secretary feels that he steps npondangerons ground, and that be may be charged with Introducing a political toplo in tbe financial report: bat, in his opinion, there 1b no question now betore the country more important in its bearings upon our finan c»b than the political and consequently indus trial statuß of the Southern States. Embracing,. as they do, one-third part of the richest lands of the country, and producing articles of great vulue tor home use-and for exportation to other -countries, their position with regard to tbe gen eral government cannot remain unsettled, and their industrial pursuits cannot continue to be seriously disturbed, without causing sucha diminution of the production of their great staples as must necessarily affect onr revenues, ana render still more unsatisfactory than they now are, onr trade relations with Europe. As long as the present anomalous condition of t hese States continues—as long as they have no parilcipatlonin the government, to the support of which they are cpmpelled to contribute—it is idle to expect that their industry will be re stored or their productions increased. On the contrary, there is reason n> apprehend that until harmonious relations again exist between the Federal gov ernment and these States, the condition of the'rr Ir.dnstrial Interests will becometlay by day more uncertain and unsatisfactory. There will be no real prosperity in these States, and con t eqnently no real prosperity in one-third part 01 the United States,-until-all possess again equal privileges under the Constitution. Can ibe nation be regarded as in a healthy condi tion when the industry of so large a portion of it is deranged ? And can the labor question at' tbe South be settled as long as tbe political stains of the South is unsettled V Can thena- floral credit be elevated and the public debt be rapidly reduced nnless the Southern States shall largely contribute to the public revenues; and can such contributions be relied upon as long as they remain In their present disfran chised condition? Will the tax-payers-of the horth continue to be patient, unless their bur dens of taxation can be lessened by being equal ly shared by the people of the South ? Regard ed thus as a purely financial question, the rela tion of these States to the Federal Union is an exceeding,y-lnteresUng and important ono.and as such itdemands the calm and careful con sideration of Congress. The Secretary has thus presented In such manneras hls pressing, official duties would penult, his views of the financial condition of ibe country, the causes of trouble, present and prospective, and the remedies for the same. If these remedial measures shall be approved by Congress, and enforced by appropriate leglsla -1 lon, be Is confident that specie payments may be resumed by the time our Interest-bearing notes are retired, which must be done in less than two years, and probably ,wiU be in a much st or ler period ■ These measures look to an Increase of labor, and consequently of production—to a fulfll . incut of obligations by the government and the banks—to a reduction of the public debt at the same tlme that taxes are 'being equalized and lessened—to Jower prlces,ahd apparently harder, but really more prosperous times—to o restora tion of specie payments without the financial troubles which nsuallyprecede a resumption alter a loDg period of suspension and inflation. The Secretary does not mean to assert that the adoption of all these measures [although he re gards each as important] - is aosolutely necessary to a return to specie pay ments, nor that other remedies may not be adopted by Congress to' rescue the country from impending - financial troubles. He pre sents, as be considers-it to be his duty to do, his own views; and asks that they may receive care lul consideration, and be adopted ill they com mend t themselves to the wisdom of Con gress, and rejected if measures - better calcu lated to secure the desired -end can.be devised.. Tbe most sanguine and hopeful must perceive that the husipess of the country cannot lor a much longer time he rnn upon the present high level with safety. The, speculative interest, large and powerful in Itself, is receiving dally new accessions of strength by the Increase of. individual credits; and when speculators and -debtors control- the- financial polioy of the country;-a financial collapse is inevitable. ’ These untoward, and dangerous Influences can now be resisted,,and the true interests of the people require that they should be resisted promptly and decisively- • ! Unsatisfactory as Is, In many respects, bur condition, there' !b cause for .congratulation that we have thus far escaped thosesevere financial troubles which usually befall. nations at the close of expensive and protracted wars. With our vast resources and the buoyant and persist ent energy of a free people, it will be our own fault If we do hot escape them, altogether. ' The Secretary has pointed out the financial dangers around and before ns, In order that 1 they may. be considered and. avoided before tbey can culminate In general disaster. Strong as is his conviction that we have been for some time, and still are, moving in the wrong direc tion, and that much of our prosperity is unreal • • and - unreliable, his confi dence in the ability of the country to right Itself speedily ,is unshaken. We have but touched the surface of our resources—the great mines of our national wealth are, yet to bdde- : - veloped. The expeelences 01. the past four years have only assured us of our strength! It Is only necessary that our true situation beun derstood In order that the proper remedies may be applied. There is no Insurmountable obsta cle in the way of restoration to perfect financial health, without the. painful trials to which It has been apprehended.we must , first be sub jected. To-be a-00-worker with Congress and tbepeoplein effecting this most desirable result has been, and will, continue to be, the highest aim of the Secretary. . After a careful' survey cif the whole field, the Secretary is of the opinion that Bpecie pay-' ments may be resumed, and ought to be re sumed, as early as the first day of Jnly,lB6B. while he indulges the hope that such will be the character of future legislation; and snob the condition of our productive industry, that this most desirable event mav be brought about at a still earlier day. ' - Tbe following is a’ statement of the public debt, June SO, 1866, exclusive of cash in Tseaa* . ury: ' . .. IBonds, 10-40’s, 5 per cent,,.due In 1904 $171,219,100.00 JSonds, .Pacific Rail-,, road, B per cent., , . due in 1895 and 1i96 6,042,000.00 ■ Bonds, 6-20’s.' 8 per , l cent., tide in 1882, 1884, and 1885 . 722,205,500.00 Bonds, 6 per cent., ■ ; ' . due In.lBBl 285,317,700.00 . Bonds,6 per cent.,due In 1880 18,416,000.00 : BondB,spereent.,dne • In 1874?.. 20,000,000.00 Bonds; 6 per cent., due In 1871............ 7,022 000 00 ■ v.;. , --—-81,210,221,300.00 Bonds, 6 per cent., due In 1868.™....... 8,908,341.80 Bonds, 6 per cent., ' ' dnein1867.......:;..;... 9,415,250.00 Compound Interest 1 - ; . notes, due In 1867 and 1568...... J. 59,012,140.00 7.30 Treasury notes, due in 1867 -and' 1868....: 806,251,550.00 -—: 983,587,281.80 Bonds, Texas .nlty, past Sue, not 'presented..;:. $559,000.00 . Bends, Treasury ■ -;- - i notes,ic;, past due, not presented.... : 3,815,675.80 ; ■ , , . . 4,374,675.80 Temporary loan, ten , day5’n0tice............ 120,176,196.65 Certiilcates-. of • in-- ; . :debtednees, pasfc < due, notpresented 26,391,000.00 < . , :• : . ■ —146,557,196.65 United States note's $400,891,368.00 : i'raetional currency 27,070,876.96 Gold certificates of - deposit ....... 10,713180.00 • ... -p $438,675,424.96 T0ta1.............................. —...........82.783.425i879.21 Cash'ln Treasury, 8182.887,549.11. Statement of the publiedebt, Ootober 31,.1886, eaclußivnof cash In Treasury: . .. Bonds, 10-4 Q’s, 5 per ct., aue1nJ904........ 8171,06?,350.00 Bonds; Pacificßall ■ road, 6 per cent- .i ■; ' dnern‘lB9s'and ? 96 9,882,000.00. -Bonds, 1 5-20’s, 6 per. .. . - . cent., due In 1882, •3884, and 1885,,.;...... 823,944 i 00a0Q Bonds, 6 per cent, due in 1881....... 265,324,750.00 Bonds, 6 per cent, • due In 1880 18,415,000.00 Bonds, 5 per cent., due in m4..‘.;..—...! 20,000,000.00 Bonds, 5 per cent., due In 1871. . • Navy pension fund, 6 per cent... 11,750,000.00 r -81,327,407,100.00 Bonds, 6 r per cent.. • due in 1868... 8,290,941.80 ■ Bonds, 6 per cent., due In 1867... 7.742^00.00 Compound interest notes; due In 1867 and 1868...:..... 148,512440.00 7-10 Treasury notes, due in 1867 and ’6B 724,014,300.00 ■ 555,560,181.80 Bonds, Texas in demnity, past due, not presents! 384,000,00 Bonds. Treasury notes, temporary loan, certificates of indebtedness, &c„ past due, not presented... 36,604,909.21 oo oqa qoq 91 United States notes 5390.195.780.00 ' ' Fractional Cur tency 27.588,010.33 Gold ceruacates of deposit - 10,896,980.00 428.650,775.33 Cash In Treasury, $130,326 960.62. . The Secretary estimates that the receipts for ; the three quarters ending June 30,1567, will ba as follows: : Receipts from cus toms 8110,000,000.00 - Receipts from lauds. 500,000.00 . Beceipts from inter nal revenue- 186.000, OOOBD Beceipts from mis- % cel laneons sources. 20,000.000.0i\ r-t5316.500.000.00 The expenditures, according to his estimates, ' will-be— For the civil service. 37,406,947.39 For - pensions and Indians-.... 12,263^17.21 For the War , De partment, Includ ing $15,000,000 for bounties- 58,804,657.05 For the Navy De partment ..... 23,144^10.31 For interest on the o public debt 105,551,512.00 237,169,113.96, Leaving a surplus of estimated re ceipts over estimated expendi tures of. 79,330.856.01, The receipts lor the next fiscal year, ending. June 30,1868, are estimated as follows: From customs. -.5145,000,000.00 From internal reve nue— 265,000,000.00 From lands 1,000,000.00 From miscellaneous sources. 25,000,000.00 5436,000,800.09 • The expenditures are estimated as follows: For the civil service— $50,067,312.0S For pensions and In dians 25,355,459,09 For the War Depart mentinclnding $64,- 600,000 for bounties... 110,861,961.89 For the Navy Depart ment 1 . 30,251,605.28 For interest on the public debt 133.678,213.00 350,247,641.32 Leaving a surplus of estimated re ceipts over estimated expendi tures of—. 555.752,355,65 in in regard to the commercial intercourse be tween the United States and British America, the Secretary adheres to the general opinion expressed In his report of 1865, that until our revenue system Is lully revised and adjnstsd to the financial situation of the country, this sub ject should not be placed beyond the control of Congress, bnt shonid be left to concurrent legis lation and such regulations as the Treasury. De partment may be authorized by law to pre scribe. Another reason for arrangements tuns flexible is presented by the uncertainty of the political situation of British America.. The scheme of confederation, which proposes to transfer questions of revenue and external trade to a single central authority, has, not been adopted, and the opposition to the meas ure may prevail with the new Ministry of Eng ' land, either to modify materially the terms of the Quebec convention, on to subject the whole measure to the hazard of a popular vote In the Provinces.. However the political problem may be solved, it is not unlikely that when the United States shall have simplified existing methods, and re duced existing rates of taxaliouko as to receive the latest amount, of revenue with the least bhrden to industry,. British America will be prepared to undertake a‘ system "of publle Im provements along the ehannelof the St. Law rence and through Northwest British America to the Faclflc coast, which, by.the- financial ne . cessitles attending itsadoptlon and the admin istration of a"federal government; wlllsuggest a Zollvarlen, or a complete assimilation of ex cise and custom dntlesohe ach side oftheNorth ern frontier. At present; Inaction upon this surjeat would appear to be the true policy of the •United States. Under the authority conferred by Congress at its last session, the Marine Hospitals at Bur lington, Vermont,at Charleston, South Caroli na, and at Cincinnati, Ohlo, have beensold,and proceedings have been taken to dispose of others not required for service, when It shall be louud possible toobtaln fair prloes.fdr them. A sale has also been effected of the old marine hospital at Chelsea, Massachusetts, on satisfac tory terms.- The new hospital building at Chel sea, and that at'Cleveland, Ohio, have received such additions and repairs as were necessary to. put them In serviceable condition, and all ma - rine patients within practicable' reaoh of ; i them have been gathered , there for treatment. a similar plan or concentrating the patients at prominent points has been as far as practi cable pursued throughout the Country, by which together with a rigid, adherence; to the fundamental principles on. which ' relief should be afforded; the expenses of the establishment in the Northern States have been materially redneed, although the en larged demand for hospital privileges at■ the South, consequent upon the reopening of that section to commerce, in connection with the very exorbitant prioea prevailing; there, will cause the total expenditures to he somewhat increased. -It is hoped, however, that this in crease will be attended Dy a corresponding ad dition to the collection- of taxes from the Bea rn en. The revenue cutters on the Atlantic and Pa cific coasts.ahd on the lakes,have been diligently and ÜBeftuly employed In preventive service during the last year. It was found Inexpedient to sell, as authorized by Congress at Its last session, the vessels here tofore reported as unsuitable fbr the entter ser vice, (with the exception of the Cuyahoga, the largest of the olass, which has been offered for sale, but has not yet- been disposed- of,) until their placeß should be supplied by others. Con-, seqnently they have been Kept on active duty, - and will not be withdrawn until the small sail ing vessels; eight in number, whloh have been recently contracted for, shall be completed, as they are expeoied tobe, In the course of two or : three months. So soon as these can be assigned to duty the others will be withdrawn aad Bold, . On the second day of August last, in accords ance with the,pro vision contained in the civil appropriation act, approved on the twenty eighth of July. 1866, Mr. J. Boss Brown was ap pointed a special commissioner tooallect relia ble statistical information concerning the gold and silver mmeßof the States and Territories west of the Rocky Mountains; and on the twelfth, day of September last; Mr. James W. Taylor was appointed a commissioner to perform the same work in the States and Territories east of the mountains.. Their, preliminary reports have not jet been received, but it is expected that they will be In reason, to be laid before Con gress-early in the session., The well-known energy of these gentlemen, and their familiari ty with the subject of mines and mining leads the Secretary toexpect that their investigations will be thorough, and their full reports interest ing and valuable; A copy of the. instructions (which contain an outline of the duties devolved upon-them) accompanies this rgnort.' . . On the third , .day of June last, Mr, John Jay Knox, a clerk in this;Department, a gentleman of excellent judgment and business hablts,'was sent to California to examine into' the condi : tjon of the Mint and of the.offioe of the Assist ant Treasurer in San Francisco; and .to look after some other matters In that. quarier, of interest to this Department;- Sis report con tains so many valuable suggestions that it has been thought advisable tor append it to the re port ofthe Dji-estor of the Mint. Particular at tention Is requested to that part of it which refers to assay:offices, and'their inutility in re mote districts. l If, as he concludes, the business ‘of assaying can, not .only without detriment, but with positive advantage to the mining interest, be left entirely to private enterprise where there are no established mints, the gov ' ernm'ent should be disconnected from-it in such districts without delay. • 1 The Statistical Bureau, authorized by the act entitled “An act to protect the revenue, and for other purposes,” approved July 23,1866, was organized on the fifth day of September last, by the appointment of Mr. Alexander Deltnar as Direetor: ' Mr. Detmar deservedly enjoys a high reputation as a statistician, and it is expected that, under his, direction, this Bureau will be of great benefit to this Department and to the country. : ~ After nutting in proper condition the numer ous books relating to commerce and naviga tion, which have been transferred to this Bur eau, the Director will prepare reliable statistics of the resources of the countiy and the extent to which they are being developed. Monthly reports of imports and exports, taxes, imposts, wages, product?, and markets will also be regu larly prepared, and every means employed, to to ascertain the progress of population arid In dustry, The Secretary is happy to he able to state, although little more than two months have elapsed since the Bureau was organized, thafrgood progress has been made in the work devolved upon it. Accompanying this report will be found a, highly Interesting report from the Light-house Board, wbicb presents in a condensed form a history of their operations from 1852, the date of the organization of the board, to the present time. In no branch of the service have more skill and ability been displayed, taatr in this, and In none have the outlays been productive c IT more satisfactory results. The work under the Coast Survey has been prosecuted during the past year with accus tomed energy, and its operations hava been re commenced on tne coast where they have been for some years past interrupted. The impor tance of th ese surveys was 4 ully established dur ine tbe recent; civil'war, and they cannot fail to~be of constantly increasing value to com merce, The work is steadily advancing towards completion, and the Secretary recommends Li lt the proper and necessary appropriations. For the detailed operations 6f the Mint and branches, I respectfully refer to the report of tb e Direetor of the Mint. The total value of the bullion deposited at the Mint and branches during the fiscal year was $38,947,156.83. ol which $37,223,61017 was in gold, and $1,723,516.71 in silver. Deducting the redeposits, the amount of actual deposits in $31,911,719.24. ... $2,681,636,966.31 The coinage for the year was in gold c01it 528,313,944.90; gold bars, $9415.485.46; silver coin. $680,264 58; silver bars, 5916.352.C5: cents coined, one, two, three, and flve-cent pieces; $646,570. Total c0inage,529,610,779.40. Total bars stamped, $10,031,867.50. . The gold deposits, of domestic production, were, at Philadelphia, $2,815,616 34; San Fran cisco. $17,436.49948; New York, $3,557,681; Denver,' $169,982.94. The silver deposits weTe, at Phil adelphia. $56,118.81; San Francisco, $623,682.21;. New York, $213,481. The gold and silver deposits of foreign produc tion were $2,047,674.76. The amount of gold coined at Philadelphia was $10,096:645: .at San. Francisco, $18417,300; of silver, at Philadelphia,. $399,314,50; at San Francisco, $280,950; of bronze and nickel and coppers, at Philadelphia, $680,- 264.50. . The law enacted at the last session of Con gress, providing for the reorganization of the system of appraisements at the port of New York has been carried into effect. Bo little time has elapsed since the new Board that the necessary reforms have not yet been consummated; but they have been undertaken with Eomnch energy and judgment by the Ap praiser, Mr. Themas McElralb, that the best re sults are confidently anticipated from the reor ganization. Recent calamities at sea. especially the dis aster to the steamship “ Evening Star,’' ou the third of October last..whereby two hundred and fifty lives were lost. Indicate a neeessi'y for the enactment of judicious laws forthe government of onrmercantile marine, with especial refer ence to the more complete security of passen gers. It is believed that in tots particular we are far behind some other nations; and while this is the case we shall not attain that mari time strength and prosperity to which wo should aspire. An inquiry into the cause of the disaster Jto the “Evening Star,” made by Captain AY. iL. Mew, under instructions from this Department, elieited several facts, to which earnest atten tion Is invited, showing they do the radical de lects in existing laws, and indicating the legis lation required to prevent loss of life and to en hance the value and security of property in ships. A copy of Captain Mew’s report Is here with transmitted. The attention of Congress is respectfully ealled to the accompanying lnterestlngreports cube heads of the respective Bureaus, all of which contain valuable information - and sug- gestions, and indicate the satisfactory manner in which the general business of the Deuart ment is being conducted under existing law and regulations. The efficiency of all the Bnreans would, however, have been greatly 5 1- creased and the expenses thereof would doubt less have been reduced by the passage of the hill for their reorganization, whloh was under consideration at the last session. The machine ry of the Department, sufficient for the prompt and proper performance of the business before the war, is insufficient now. The Bureaus need reorganization, and justice and economy de mand higher compensation to officers and clerks. The Secretary is under obligations to the offi cers and clerks of- the Department for the very satisfactory manner-In which, with few excep tions, they have, during the past year, performed, their Important and responsible duties. HughTHcGuixosh. Secretary. ; HoD. Schuyler Colfax, Speakerof the House of representatives.' , r THE FIME ABTte iOOEING GLASSKS. JAMES & EARLE & SONS, ■with greatly increased: facilities, said a large oorps ot? first-ejass workmen*, are now manufacturing a LARGE STOCK OF LOOKING GLASSES, puara-teedthfeßEST FRENCH PLATES ONLY OR NO BALE, and would call attention to thea-daily aug menting ASSORTMENT aa UN EQUALED ana at ..... . VISY MODEBATE PBIC3S. 816 CHESTNUT STREET. r —H W A TTVFfI' BROS.’ IkjSShßve dealt in them for 14 years, andlhJafyi ITT zT! guarantee each ifor 5 years. Prices'* ' from {3OO te $5OO, J.E. GOULD, poioititsp ■ Seventh and ooestpnt. omcKßßran upright pianob. 914 CHESTNUT STREET. ItT