The New York Herald Newspaper, December 5, 1871, Page 4

4 governoment are fully shared py tho United States. The ratifications of the Consa’ar and Nata- ralization Conventions wiih the Austro-Hungarian ‘empire have been exchanzet, KINGDOM OF ITALY. T have been officially in'ormed or the annexation of the Siates of the Church te the kingdom of Maly and the removal of the capital of tnat king- dom to Rome. In conformity with the established policy of the United States I have recognized this change. ‘Tne ratification of the new treaty of commerce between tne United States aud Italy have been ex- changea, The two Powers have agreed in this treaty that private property at sea shall be exempt from capiure in case of war between the two Pow- ers, The United States have spared no opportunity of incorporating Ubis rule iato the obligation of sta- uons. TOR UNITED STATES, SPAIN AND CUBA. NEW. YORK HERALD, TUESDAY,, DECEMBER, 5, 1871.-TRIPLE SH able ends, of the rapid development of the resources of the country, tts Increastag abiltiy to meet targe de- Mauds and the amount already patil, tt is not desir. ale that the present resources of the couniry should continue to be taxed In order to coatinity tals rapid op ayn 1 terel ore recoaimond » moditication Of uth the tart? and internal tax laws. | recommen (bat ult taxes trom internal soucces be abolished, except those collected froin spiritous, vinous and Malt liquors, tobacco in tts various torms and from. Blan In readjust.ng the tari? 1 suggest that a careful estimate be made of tbe amount of surpius revenue collected under the present laws, ater pro- Vidtug (he current expenses of the government, the interest account and a smking fund, and that this surplus be reduced in such manner us to afford the greatest reliet to the greatest number. ‘There are Tuaoy articles not produced at bume, but which eater largely inio general consumpiioa through articles which are manufactured at home, such as medi- cides compounded, &c., &C, irom whieh very title Yevenue 13 derived, but which enter into general use, All suca articies 1 recommen tu be on he free list, Sh uld a turther reduction prove ad- visable | woul then reconmend that it be maue upon those articles which caa best bear it, without disturbing home production oF reducing the wages The Forty-first Congress ai its third session made an appropriation Jor tue organization of a mixed commission for adjudicating upon the claims of citizens ol the United Siates against Spain, growing out of the ‘Insurréctioa of Cuba. That Commis- sion has since beea organized, I trans- mit herewith the ccrrespondence relut- | ing to its formation and its jurisdicuon. tis to be hoped that this Commission will afford the claimants a complete remedy tor their injuries, It has been made she agreeaole duty 0! the Uaited Slaves to preside over a conference at Washington between the Pienipoten:iaries oi Spain ani the allied South American repubiics, which has resulted in an armistice, with the reasonable assurance of a per- manent peace, RUSSIA AND REN AMBASSADOR, The intimate trienuly relations which baye 60 long existed between tne United States and Russia con- tunue undisturbed, The visit of the third son of tae Emperor is a proof that there 18 no desire on the Part of his goverument to diniutsh the cordiality of those relations, ‘he hospitable reception which has been given to the Grand Duke is a proof that | on our side We share the wishes of that government, ‘The inexcusable cours of Wwe Russian Minister at Washington rendered it necessary to ask his recall, and to decline to longer receive that functionary as | @ diplomatic represen'ative. It was impossible with | self-respect or with a just regard to Ure dig- | cata. | i nity oi the country to permit Mr. eazy to continue to old intercourse wit this government aiter ns personal abuse of government officiais, und during his persistent inter- ference, through various uieans, with ine relauons , between the United States and other Powers, Ln accordance with my Wishes tis government has been relieved of furiner tutercourse with Mr. Cata- cazy, and the Management of the affarrs of the im- pertal Legation has passe | Inio the hanus of a gee | tleman entirely unobjec:unavie, JAPAN, CHINA AND THE CORRA, With Japan we continue to maintaio intimate re- lations, The Cabinet of the Mixado has slice the close of the last session of Congress selected citizens of the United States to serve in oMces of mportance in severat departments of government. 1 havo reasou to think that tats sclection 1s due to an ap- prectation of the disinterestedness of the policy which the United S'ates have pursued towards Japan. it is Our desire to continue to maintain this | disinterested and just policy with China, as well as Japan. The cerrespoudence transmitted herewith shows that there is no disposition on the part of tna government to swerve iroui its estabished course, Prompled by a desire to pit an end to the barbarous treaiment of our shipwrecked sailors on the Corean coast, l instructed our Minister at Pekin to enacavor to couciude a convention with Corea for securing the saety and humane treatment of such mariners. Admiral Rodgers was instructed to ac- company him with a suilicat force to protect him | in case of need. A small surveying party was ; sent out and on reaching the coast was treache- rousty atiackead at a disadvantage. Awpie opportunity was given for explanation and apology. Neithercame. A force was then landed. Afler an arwuons maren over a rugged and dificult | country the forts trom which the outrages bad been committed were reduced vy @ gallant assauitand | were destroyed, Miaving thus punished the crim. | nals, and having vindicated the honor of the dag, Vhe expedinon returned, Onding tt impracticabie under the circumstauces to conclude the desired courveniion, 1 respectfully refer to the correspondence rejatiug thereto, here vith submitted, and leave the subject for such action as Congress may see {it to take, THE MEXICAN AND SOUIM AMERICAN REPUBLICS. | The repuvlic of Mexico iias Not yet repealed the very objectionable laws estublishiug what is Known as the free zone on the frontier of the United States, It is hoped that this muy yet be donc, and also that more stringent measures may be taken by that republic for restraining lawiess persons on its fron- ters, I hope Mexico, by its own action, will soon relieve this guverument of the dimMculties expertenced from these causes. | Our reiations with the varicus republics of Centrat | and South America con\inue, wita one exception, to be cordial and fricnuly, 1 recommend some action ey Congress regarding tne overdue instalments under tue award of the Venvzuela Claims Corazission of | i866. ‘The Internal dissensivns of this government | present no justification for the absence of effert to meet their seicuia treaty obligations. Tae raufi- | ation of the Lxtraaiion Preasy with Mearagua | has been exchange 1. | It is & sub,ecs for congratulation that the great empire Of Brasil bas taken the initiatorz step to- Wards the aboition of slavery. Our reiations with that empire. always cor fat, Will naturatiy be mace more so by this act. Lis uot too much to hope that | the goverument of Brazil will lereafter nd ft tor its interest, as well rinscaly right, to advance | towards cnure e| 1ou more ra,ldly than the | present act cont SLAV d The true prosperity and greatness of a nation are THE WEST INDIES. to be found in the eley.tion and education of its laborers, Jt is a subject tor regret Uhat the reforms ia this dire which Were voluntarily promised by the state of Spain have not ye ricd Out in its We-t Ineia colonies, 1 regulations for (he api arent abolition tu Cuba and Porto Rico jeave most with ho bope oi their rel lives become a buraen their 1 desire to direct your att the citizens o1 the Cuited States, or persons claim mg to be citizens of the United States, are larg holders 1u fore lands of ties species of propert forbidden by the fandameutal law of their alleged country. 1 recommend to Cougress to | pro vide by stringent — lez a sultavie remedy against) the bi owning or dealing im slaves or vemg — tnteresied in slave property 1 foreign lands, etiner as owners, birers or morigagors, by cit:zeus 0: the United States. AFVALOS IN CUBA. It iste be regretted that the disturded condition of the Island Ol Cuba coutinues to be & source of ale | moyance and of ausiciy. The existence of @ pro- | tracted strugg.¢ im sncu close proximity to our | | | | | own territory, without —appareut — prospect of an early terminatic cannot be orher ivan an object of concern to a p Who, while abstaining on i Irom interierence in the affairs of other Powers, | naturally desire to see every couutry m the upd turbed enjoyment of peace. liberty aad the bless. ings of free institutions. Our naval commanders in Cnban waters have been instructed, in case it | should become necessary, '0 spare no effort to pra | tect the lives and property of bona Jide American | citizens and to maintamn the dignity ot the fag. it is hoped that Ali pending questions with Spatii, growing out of the aifairs in Cuba, may be adjusted jo the spirit of peace and eoncilation which has | ultherto guided the two Powers in their treatmeat | of such questions, DIPLOMATIC AND COMMERCIAL RECOMMENDATIONS, To give importance and to add to the eiliciency of our diplomatic reiations wilh Japan and China, and to further att im retaniwg the gt opinion of those peopies, and to secure to tie United States its sbare of the commerce desttne t to flow between those nations and the balance of the commercial world, 1 earnestly recommend that an appro) riation be made to support at least | four American youths in each of those countries, to | serve as part of the oficial tamiiiy of our Ministers | Where. Our representatives would not even inen be | placed upon an equality with the representstives of Great Britam and of some other Powers, As now situated our representatives in Japan aod China bave to depend for imterpre- ters and translators upon natives of {hose countrics, Who Know our language imperiectl,, or procure fot the oceasion the services of employés in joreign Lusivess houses or (ue interpreters to other foreign mialsiers. 1 would aiso recom- | mend liberal measures for the purpose of paying the American \ines of steamers now plying between San Francisco und Japan, and China and the Australian lines, ®!inost our oniy remaiming lines of ocean steamers, and of increasing tucir services. REDUCTION OF THE NATIONAL DENT, The national dept has been reduced to the extent of $60,067,126 80 during the year; and, by the negotiation o1 national bonds at & lower rate Of inter- est, the interest on the puluic debt Las been so Jar dym'‘nisbed that pow tue sum bo be raised for tie intere-t account is nearly seventeen milion dollars Jess than on the Tet of Alarch, 1869, as highiy desiravie that this raytt cimunition should ta place, both to strengt.eu tie credit Of the country ana to convince the citizens of their entire abtity to meet every duliar of havility without vankrupt thg them. REDUCT/ON OF TAXATION, But tn view of the accomplishment of these Mesir | trom of American iabor, I nave not entered into figures, because to do so would be to rey what witi be laid beiore you in the report of the Secretary of the Treasury. COLLECTING THR REVENUE. Tho present laws for corecting the revenues pay Collectors of Customs smull but provide for moities, saares in all seizures, which, at priuci- pal ports uf entry particularly, raise the compensa- tion of those onicials to a large sum, It has always seemel Co we as if this system mast at times work ernicwusly, I¢ folds ouvan inducement to dis- honest men, should such met possession of those oitices, 1o be lax in their scrutiny of goods entered to enabie them finally to make large scizures. Your alten4on ts partivularly Lovited to this sunject. GAMLLING IN GOLD. Continued fluctuations in the vaiue of gold, as Compared with the national carreacy, has 9 moat damaging effect upon the increase and develop- ment of the country, in kee} pe Ries oe all articles necessary in every dayiife. fosters @ spirit of gambiing prejaicial alike to uational Worals, aod the national Hnauces. If the que:tion can be met as to how to get afixe! value to our currency, that Value constanay end unttormly ap- Drowchiig par with specte, a Very desiravie ol ‘Will be gained. ARMY PROMOTIONS, For the operations of the army to the last year, the expense of mamtaining it, tne estimates for the | ensuing year, and lor contwutng seacoast and ocher improvements con \ucted under the supervision of the War Depurtment, 1 refer you to the accompany- ing report 0. the Secretary of War. J cali your attention to the provisions of the act of Congress approved Maren 3, 1869, which discon- linues promotions tn the staff corps of the army until provided tor by law. I recommond that tne pumver of oilicers in each grade of the stat corps ve fixed, and that whenever the number in any one grade fails below the number so fixed thas. the Vacancy may be filed by promouon trom the grade below. 1 also recommena that whea the OMice oi Chief of a corps becomes vacant the place may be filed by sciection trom the corps in waich the vacancy exists, NAVAL AFFAIRS. The report of the Secretary o! the Navy shows an imrrove:nent iu the number and efictecy of the naval force, without material increase in the ex- pense of supporiing it, This is due to the policy which has been adopted, and is being extended as fast as our material will admit, 0; using smailer ves- sels aS Cruisers On (he several stations. By this means We have veen enabled vo occupy at once & large exient of cruising ground, to Visit more frequent the posts where the presence of our nag is desirable, and generaliy to discharge more efii- cient y the appropriate duties of the navy in time of peace without exceeain, the number of inen or the exveuditure authorized by law. During tae past | Year the navy has, in addition to tts regular service, | Suppited the men and ofticera ior the vessels of tue coast surveys, and has completed the surveys author. ized vy Congress of the Isthmuses of Damen and Teguantepec, and under like authority has 3.55 out an expedition, completely furnished and equipped, to explore the unknown ocean of the North. The mpgeetions the report to the necessity for incréssing and improviig thé material ol the navy ard the piaa recommen:ed reducing the personnet of the service to @ peace standard, by the ar: dual abuvititon of certain grades ot officers, the reducuon ol others and the cm;dJoy ment of some in the service of the commercial marine are weil const ‘ered, ana deserve the (hought/ui attention of Congress, I aisu recommend that ull promotions in the navy above the rank o! captain be oy selec: Uon instead of by seniority; this course will secure in the higoer graves preater euictency and hold ous an inducement to young oMicers to improve them- slves jo the Knowledge of their profession, the present costo. maintaining the Davy, ity Cost Com: pared with that of the preceding scar, and the e timates for the ensuing year, are contained in tne accompanying report Of tne Secretary of the Navy, THE POST OFFICE AND TELEGKAIH SYSTEM, The enlarged receipts of the Voat Ofice Depart- ment, a4 siown by the accompanying report of the Postinaster General, exhibits a gratilying merease 1n that branch of the pudilc service, it ts the mdex of the growth of education and of the prosperity of the people, two elements hignly conducive to the vigor and stability of republics, With @ Vast territory = like of it sparsely poputated, but requiring the services of the Mall, tt 1s not at present to be ex- | pected that the department can te made self-sus- | taluing; but a gradual approach to thus end from ' year to year ts contidentty relied on, ant the day 1s | nottar disiant when tue Post Office Department of ; the government will rove a mucl greater | biessing to tne whole people than tt 13 no fhe suggestion of the Pustmaster ral fcr improvements in the department pre- sided over by him are earaestly recommended to your special attention, Espectally do | recommend tavorable coustderation of the plan for unttiag the teie:raph system of the Uni ies with the postal system. It is believed tnat by such @ course the cost 6. telegraphiog could be much reduced and the service as weil, if not better, rendered. It would secure the further @ivantage of exiend- ing the telegraph through poruons oi the country where private enterprise will not construct it vommerce, trade, and, above ail, the efforts to bring @ people widely separated into community of inter- est, are always benefited by a rapid intercommuni- cation, Education, the groundwork of republican institutions, 1s encouraged by tnereasiug tue Lactl- thes to gather speedy news from all parts of the coun- try. The desire to reap the benefit of such 1wprove- ments Wil stmutate education, I reier you to the report of the Postmaster General for Luli detalis of the operations of last year, and lor compaiative statements of results wita former years, SOUTH CAROLINA KU KLUX, There has been tmposed upon the executive brancn of the government the exccotion of the act of Congress approved April 20, 1871, and commonty known as the Ku Kiux law, in @ portion of ihe State of Sontn Carolina, The necessity of tne course pursued will be demonstrated by the report of the Comuittee to Investigate Southern Vntrages. Under (he provisions of tae above act | issued prociamation caliing the attention of the peopte ihe Uuned States to the same and declaring my rewc- ace Lo use any Of the extraordinary powers thereoy conferred upon me, except in case of imperative hecessity, bul making Known my purpose to exer- cise such power whenever it should become neces- sary to do so for the purpose of scouring to ail citi- zeus of th: United States tne — peacetul eujoyment of the rights guaranteed to tem by the constitution and tie jaws, Aiter the passage of this law — infor- mation was recetved from time to time that combinations of the character reierred to in this law existed, and were powerful i many paris of the Southern States, particularily in certain coun. fies in the State of South Carolina. Careiut lavestigation was made, and it was as. certainet that in nine counties of that Stare sucn com inations were active and poweriul, emuraciog @ suLcent portion of the citizens to centro! the local authority, and having among viher things the object of — de- priving the emancipated class of the sun- stantial ben fits oi freedom, and of preventing the iree poliucal action of those citizens who did not sympathize with their own views, Among their operatious were irequeat scourgings and occasional assassinations, generally perpetraied at night by disguised persons, the victiuus in almost all cases being ct'l1zens vf diferent political sentinents their own, or treed persons who had shown @ disposition to claim equal rights with ower citizens. Thousands of in- otfenstve and well-disposed citizens were the eufierers by ths lawless violence. Thereupon, on the Ith of October, & procitmauion Was issued In terms of :he law calling upon the members of those combinauious Wo disperse within five days, ana to deuver to the Marshal or military oficers of the United States all arms, ammunition, uniform disguises and other means and implements w by them for carrying out their uniswtul purposes, ‘Th's warding pot having been heeded, on the 17th of Octover another proclamation was’ issued sus- pe the privilege of the writ of habeas corpus in nine counties of that State, Direction was given. that within ve counties so sons supposed, upon credible members — of au nations should be arrested by the mititary forces of the United States and delivered to the Marstal to be dealt witt according to law. In two of sad counties—York and Spartanburg—many arrests heve been made, At the last account the number of persons thus arrested was one hundred and sixty-eight, Several handred whose criminality was ascertained tobe of an inferior degree were rel.ased for the present. These have generally male couessions of their guilt. Great caution has been exercised in making these arresis, and, notwith- standing the large number, tt t# believed that no innocent person is now in custody. The prisoners will be held for regular trial tn the judicial tribunals of the United States, As soon as it appeared that the authorities of the United States were about to take vigorous measures to enforce the law many persons absconded, and there is good ground for supposing chatall of such persons bave violaied the law. Aull report of what has been done under this law will be submitted to Congress by the Ator- ney General. POLYGAMY IN UTAH TERRITORY, In Utah there suil remains a remoant of barba- rst repugnant to civilization, to decency and to the laws of the United States, Tertitorial ollicers, howevet ve been found who are willing to per- | Jorm their duty iu a spirit of equity and with a due | Bense Ot sustaining tne majesty of the law. Polygamy nor any Other violation of existing statutes Wul be permitted within the territory of the United | States, It ia mot with the religion of tne self-styled saints that wo are now dealing, but with tnete pend: | tices. They will pe protected in the worship of God | according to the dictates of their conscience, but they will not be permitted to violate the laws unser the cloak of religion, it y be advisable for Congress to consider what in the | execution of the laW ayatist polygamy fs to be tue ing. The pro- ‘act autor oF Utah to legitima- @ time Axed im the tuze all chiidren born prior to act mizht be justified by ht mn to these innocent caildren. | 4 be ree Aya a suggestion only, gud not & re- PRACE POLIOY TOWARDS THE INDIANS, The policy pursued towards the Indians has re- sulted Pear ie NY, 80 far as can be jud irom the riatfans, to whom has been entrasted the execu- civ! extermination, I propriations to carry out the not because it is humane, but becanse it 1s 2 iS Innes neace poll Trenew recommendation tnat the public lands be as a heritage to var children, to ve di Beare of only a8 required lor occupation and to ac- \ Branted have been, in great part, 4 Of in Buch @ way as to secure access to by the hardy seti‘er woo may wish to avail Diuself of them; but caution should atonal tare uy Mal eserves gas Be Tara of proceeds of Sale of public lands to settlers, do not wisn to be understood as recommending in the least degree a curtailment of what is being dono pee Chia government for the encouragement FSR, PUBLIC DRFARIMENTS. ‘The report of the Secretary of the Interior, sub- mitted with this, will give you all toe iniorimation collected snd prepared jor Arar in regard to the census taken Mata oy Year 1870, the Opera- ous of the Bureau of Education for tie year, the Patent Odeo, the Pousion Umice, the Iaind Gace, and the I ‘he report of the Commissioner of Agriculture gives the operations of his department for the year. As agriculture is the groundwork of our prosperity too much. im) jot be atcached to the ‘ace cann tment. It isin the hands of an labois of this abie heada, wWi able assistants, all zealously devoted to introducing into the agricultural Productions Of the nation all useiul products adapted to any of the various climates and soils of our territory, and to giving all use‘ul informat‘on as to the etnod of cultivation of the plants, cereals and oiber prodacts sds pred to particular locaitiies. Quietly, Dui surely, the Agricuitural Bureau 13 Worklhg a great national good, and if tloerally sup- orted the more widely its influence will be ex- ended and tie leas dependent we shal! be upon the pro.lucts of foreign countries. COMVENSATION 10 PUBLIC OFFICERS. ‘The sub ect of compensation to the heads of bureaus and officials holding positions of responsibility aud Tequiripg avility and cuaracier to fill them properiy is one to which your attention ts mvited. uc few of the officials receive @ compensation equal to the Tespectable support o! @ famity, while their duties are such as to iuvolve millions of interest. In pri vate lie services demand compensation equal to the services rendered, A wise ecunomy would dictate the same rule in the government service. 1 have not givea the estimates for tho support of the government for the hohe year, nor the com- arative statement between the expenditures tor he year just passed and the one just preceding, be- cause ali these figures are contained in the accom. panying reports, Or in those presented dlrectly to Congress, Tnaese estimates Lave my approval, TRE DISABILITIRG ACT, More than six years having elapsed since the last hostile gun was fired between the armies then arrayed against each othar—one for tne perpetua- Moa, the other for the destraction of the Uniona—it may well be considered whether it is not now time that =the —_ disabilities by the h amendment be movea. That amendment does not exclude the ballot, Lut only tmposes the disability tu hold ofice upon certain Classes. Waen the purity of the ballot is secure majorities are sure to _clect officers reflecting the views of the majority. I do not see the advantage or propriety o: excluding men from office merely because they were, bofore the rebellion, of standing and icler sufficient to be elected to tions §= requiring §=them to take oaths 10 support the —con- stitution and admitting to cligibility those entertain- ing precisely the same views, but of less standing in their communities 1¢ may be said that the foriner Viojated an oath while the latter didnot. Tne latter did not have it in their power to do so. If (hey had taken this oathit cannot be doubted they wo2la nave broken it, as did whe former class, If there are any great criminals dist.nguisped aoove all others ior the part they took in opposition to the side ‘The condit.on of the Southern States 1s unhappily not such as all true, patriotic citi- zens woud like to see Social ostracism for opinion’s sake, personal violence or threats toward persons entertaining .itical views op- posed to those entertained by tne majority of the oid citizens prevents immigration and the flood of much-needed capital into the States iately in revel- hon. At will be a happy condition of tue country When the old citizens of these States will take an interes} in public affairs, promulgate facas honestly entertained, vote for men repre- senting their views, and tolerate the same frecdom of expression and ballot in those entertain- ing dierent political convictions, DISTRICT OF COLUMBIA, Under the provisions of the aci of Congress ap provea Feoruary 21, 1871, @ Territorial government was organized in the District of Colcmbia. its re- sults have thus far fally realized the expectations of its advocates, Under the direction of the Territorial omicers a system of improvement bas been inaugu- rated by means of which Wasnington 1s rapidly coming a city worthy of the nution’s capital. The citizens of tne D.strict having voluntarily taxed themseives to @ large anount for the purpose of contributing to the adornment of tne seat of government, I recommend liberal appropri- atlups on the part of Congress in order that the government may bear its just sMare of the expense of carrying outa judicious system of im- provements, THE BURNED GOVERNMENT BUILDINGS IN CHICAGO, By the great fire in Chicago the most im- portant of the government puildings in that city were consumed. Those burned had already become inadequate to the wants of the government 1m that growing city, and, looking to the great tuture, were totally inadequate. | recommend, therefore, that an appropriation be made iinmediately to pur- chase the remainder of the square on which the burned bulidings stood, provided it cau be Purchased at @ fair valuation, or provided that the Legisiature of iilinois will pass a law authorizing 1:8 condempstion for government purposes; and also an appropriation of as much Money. as can properly be expended towards the erection of new buildings during tnis fiscal year. PROTECTION TO EMIGRANTS. The number of immigrants ignorant of our laws and habits, aud coming into our country annually, has become So great, aud the imposition’ practised upon them so num-rous and flagrant, that | suggest Congressional action for their protection. Iv seems to me a fair sabject of legislation by Congress. I cannot now state as fully as | desire the nature of the complaints made PY emigiants of the treatment they receive. but will endeavor to do 0 during the session of Cons barticularly if the subject should receive your attention. DISHONEST PUBLIC OFFICLAIS. It has been the aim of the administration to enforce honesty and efficiency in all pubic ofices, Every public servant wio has vio- Jated the truat placed in him bi nn proceede inst with all the vigor of the jaw. Ii bad men e secured ing it Das been the fault of the sys- tem _ established by Ww and custom ior Making sppointments or the fault of those who recommend for goverament poai- tions persons not seuMcieniy weil known tothem personally, or who give lettors endorain; the characters of oMco-acekers without & sense of the grave responsinility which such @ course devoives upon them. A civil service reform which Syeraee te ence oe tee pet can e bus: vi a letter of recommendation to a ifiend = aed ld i be yy credit pe oD ranger ia rega moratly responsi! ini of nis friend and his ability to meet his obligations, A reformatory law which. would en- force this prin: against ali endorsers of per- sons for pul insure great caution im making mn A salutary lesson has been taught the and the dishonest public servant in the é number of Ppp and convictions of the last two years, It is gratifying to notice the favorable change which 23 tak throughout the country im bring! but those who possess confidence of the honest and virtuous, who, It will always be found, comprise the majority of the community in which they live, CLVIL, SERVICE REFORM. In my message to Congress one year ago [ ur- gently recommended @ reiorm in the civil ser- vice of the country. In conformity with the recommendation Conarest, in the ninth section of an act making appropriation tor sundry civil ex- penses Ol the government and for other purposes, approved March 8, 1871, gave the necessary Au- thority vo the Executive to inaugurate eonaouney” ee Placed ee him ing 80. of said act 1 convened a boaid of men, eminently for the work, 0 rules and regulations vo effecy the needed reform. ‘Their lavors are not yet compicte; but 1018 believed. departments and ment- and whico will redound to interest of the uvHG —-KeRVICe, At all events she experiment shall have a fair trial. T have thas hastily summed up the operations of the overnment during the last year, and made such Fs tons as occur to me to be consideration. J submit them wi that your combined action will be wise, statesman- like, and in the vest interesis of the whole country, U. & GRANT. EXROUTIVE Mansion, Doe. & 1671, THE NATIONAL FINANCES. Annual Report of Secretary Boutwell. Another Immense Amount Of the National Debt. A Reduction of $36,000,000 of Taxation Recommended. A Synopsis of the New Loan and the Workings of the Syndica‘e—The Smaliness of the Com- mission Allowed to Bankers tho Cause Attributed for the Delay in Its Promulgation. How to Regain the Maritime Yrestige of the United States. The Bailding of fron Steams‘ips in Amcrican Ports aud the Granting of Subsidies, TREASURY. Perens Wasmincron, Dec. 4, 1871. Sra—The country has been prosperons during the year now closing, and tne puolic and public finances have shared tn the’ general prosperity during the fiscal year ending June 30, 1871. The reduction of the publit debt was $94,327,7¢4; the total decrease in the public debt from Marcn 1, 1869, to December 1, 1871, ‘was $277,211,892, and during the sane period the annual interest charge has been reduced $16,741,438, The revenues for the year 1871 and tho receipts since the Ist of July last show that the time has arrived when @ considerable further re- duction in taxes can be made and yet leave the government in a position to pay $50,000,000 annually Of the principal debt, including the amount pledged through the sinking fund. THE NATIONAL DEBT. In my annual report to Congress ia 1870 Lex. pressed the opinion that the settled poltcy of tne country should contemplate # revenuesnficient to meet the orainary expenses of the government, pay the interest on the public debt and from twenty-tive to filty milltons of the prinotpal annually, To tnat opinion I adnere, with evea @ stronger conviction that the payment annaally upow the principal. of the pubic debt snould not ve less tian fifty millions of dollars, Large as the resources of the country have been during the last three years our system of taxation has not been oppressive to individuals, Ror has it in any sensibie degree embarrassed the ‘business of tne country, And wiule relief from taxation ts desirable, it is yet more desicabie to matatain the public credit in its present elevated position, not only as an example to other nations, tut for its historical value in enabling the govern- ment to make loans for large amounts upon favor able teras, if uabappily in the future an exigency sLould require such loans to be made. THE POWER TO NEGOTIATE A LARGE LOAN at five per cent and toenter upon negotiations for the sale-of bonds bearing five, four aud a half and four per cent interest is derived entirely from the exhibition of an honest parpose cn tne part of the peopic to maintain the public faith, and the conse- quent ‘ablittyon the part of the government te ane sWer that expectation by large frequent payments upon the pubite debt. REVENUE FROM CUSTOMS, The revenue from customs for the year 1871 was greatly in excess of the estimates, amounting to $206,270,408, agalnst $194,538,374 for the preceding year. The cost of collecting this revenue was ‘$6,560,672 for 1871, being 8 11-100 per cent, while the cost for the year 1870 was $6,237,137, or 320-100. per Fectiet t ap PTO} riatious ior the ‘collection ot tie customs, with the additions derived " penaities and foriet:ures, excecded the expends ‘wres by the sum of more than eight hundred tuou- sand doilats, and there 1s no douut that the perma- nent appropriation will be ample for tbe present Year-and for the next iiscal year. Tne reduction of the rates of duty on the 1st of January, 1571, under the act of suly 14, 1870, ¢imin- ished the importation vf many articles during tie Jast six montas of the year 1870, but tnere was con- sequently @ large addition to the revenues for tho first six months of the year 1871. ‘A comparison of the first six months of the year 1871 with tae first six moutus of the carendur year 1870 shows an increase of fifty-five per cent in the quantity of tea imported, twenty per cent 1a the quantity of coffee, fity-thrce per cent in the quantity of brown sugar, 120 por cent in the quantity of pig iron, 186 per cent in the quaatity of Inelado, 189 per cent in the quantity of spyces, and a large increase in many other acticies. ‘The provability is that tne customs revenue for the current ycar wiil exceed that for tne years 1570 ani 1871. The receipts for internal revenue Were $143,093, 153, veing $4,048,984 less than the es- timates presented in Deceinver last for the fiscal year ending June 3), 1871. The estimates tor the ‘current liscal yeat were $126,418,000, aud it 18 prob- able tuat the receip:s will be equal to Lue estimates, THE NET RECFIVES for the fiscal year ending June 30, 1871, were as fol- prea $206,270,408 enue. . + 143,998, 163 From miernat rev! 0 nD 388 O48 31,556,753 gales of public lands, From miscellaneous sources. teers ee seen ee $883,823 944 SHE EXPENDITURES Total receipts... the same period were:— foe civil aud intoeeone purposes. For War DepartmeDt....+++.+ee+e++e Fs ee net amuunt afier deducting $250,093 repaid mto the Treasury as proceeds of safes of ord- nance, &c. ‘The true eXpendicures were $4408 3,604. For Navy Department $10,451027 For Indians. Rs For peusions a 4,445,504 For Perest on the pablic debi 125,976,585 MGIEUITOS . 0.204 c eee reeeeeeeee $202,177, 183 Tota nocelanens revenues for the fiscal year end- ing June 30, 1871, Were derived irom (le jollowing sources :— on sales of COIN....++ $8,802,839 Fees from United States Consuls. 605.553 Siorage, rent, tabor,&c.. at Custom Houses — 414,310 F.nes, penaivies and forieivures tor viola- tions of Customs law: 592,579 Fees on letters patent. . 620,319 ‘Tax on circulauion, deposits, &c, of na ttonal banks. nepscasessaeeisscscss 6,008,604 Repayinent of interest by Pacific Raw JOMPAMICS....-. +00 seveees 813,284 Homestead and other land fees . 615,923 Steamboat fees and Marine Hospital tax, 380,535 Proceeds of sate of coin, interest on sink- 1 ud eae penalties aud forisares.. "788 nines. i a 4 330 Judiciary ios. ane 557,235 5 rred payments on ladian trustlands, 837,921 Raaibursoments to the United States tor moneys advanced to meet matured inte rest on ponyariae stocks held in trast for various ian tribe: 35,635 One, two, three and five 15v,000 Unenameratod.. 145,441 1, 506,738 prosent $62,239,379 85,653,176 602,630 8,753,159 Totals veseser ses 107,198,378 The res exolud he oxpom account of the sinkmne 1004, were: ‘or civil and miscellaneous purposes. $16,579,732 War Department, 12,590, Navy De} ibe 6,513,049 Indians. os 133 For slereat of the public da 86,725,124 ‘Total. ....-++6 bbeetWerweles 183,008,882 The estimated receipts for the Temaiuing’ three. at year are as follows:— arene of te presout y liga apo nesses esaens esegesee yess + $253,000,000 mated expenditures for the same period, exce} payments on account of the king are:— i neous purposes... $69,000,000 For clvit and miscet p +, 31,000,000 6,000,000 Total... ‘The esti For Indi a pe nary asses for Lerest on the public debt veeee: $200, | hese ostiinaies BOW & DalwBoe Adnlioable to 009 he “curs witn What seems to Payment of the of the pabito debt for the fisca. voar enuine Juss 30 1872, Of $71,794,991. aetna hapten bl vo ending Jane 3), 12"-° age eatumated a3 follows: — es fre $212, 000,000 From water few “ra; 900100 From sales o1 . Public — , samen + Total rece'pts for the fisoal year, 1972..$359, 000,000 Expenditures—cegisiative establishment $3,421,512 Executive establishment... 17,443,531 Judicial-estavlisnment, +) 8,838,850 ‘Malitary estabi 31,427,599 8, 946,088 0,445,617 40,1 101,509 <8, under War wae jer Public works, under Navy 1: 1,483,100 Public Wock: aS 4, under Agric Ibe evens 600 Postal service... s.arecoot Aliscel e. 11,258,325 Permanent appro 281,974 Sinking Fand. 22,395,930 eons 6,783,333 ine ries ace re for’ facal year 1872, . $301, 705,036 mates snow a balance of $57,294,963 a] Leable to the ment of the principal of the ‘det addition to tha aum of $28,679,233 due on account of the “Sinkiug Fund,’ or the sum of $85,974,226 In alt, " in the estimates'tor the next fiscal year 1 have not inciudet ‘ti the receipis the Premiam on guid Walon my be sold nor kn the expeuditures tie pre- es pied mae may be Paid on bonus to be purchased in recerence ee eereous T have the homer to THE REDUCTION OF TAXES Ikeep in view two important faciy; Orat, that the avuity of thy lou to pay at Jeast ita ations an- Duatly of tne principal of the public debt shall not be inpatced; and, secondiy, in) tue change of the revenue. system no. ‘vi shall bo done to the business interests of the coun- try. While 1 do not undertake to state She Causes watch have contributed to tne public prosperity, there is no substanuat reason Lor Questioning the trath of the statement thas the last five years lave been the most Prosperous in the fis- tory of. the couniry—years witaout example in our own affairs and without peraliel 10 the aufairs of any other government, It 14 practicab’e to dispense ‘wittr all: revenue fromluternal sources except shat derived irom, stamps, spirits, woacco and await ‘These sources shoutd furnish for the ycar 2-3 &@ reveaus of avout oae huatred and ten mil- Hons of dollars, making a redacitou of taxes uf 5ix- teen. miulious of , dollars, Tue reveuue jeom customs under existing laws, and from lands aud “miscellaneous —suurces, would amount to about two fuadrel and thirty-threo millions more, making a toval revenue for thut year of $43,000,000, Tue expenses of Lie goveruticnt, not including the amouat payable On accounts of We snking fund, are estimated ab $273,025.77 If to chis suum be added $50,000,020 for payweuts oa account ofthe public devt, imcluding the amouat due ou the sinking tund, there remains a baiance Ol about $23,090,000, within which reductions way be made in tne revenue from custoins, ‘nis amount’ added to the reduction propos-d under the Internal. Revenue laws wives a total reduction of $35,009,000, Jn this view i respectiuuy yecoumend to tue coustd- eration of Consress tie ‘reduction of the duties Ou Baltto the extent of titty per cent; the duty on bituunin us\coal to tity cents per tun; the reduc- tion. oj the duty Oa raw nides and skins and the re- moval of aif duties [rom a iurge class of arucies pro- duced im other countries Waicn enter mite the arts And maautactures 0} tus couuuy and which are not produced ta.the United States, aud tue re“eaue irom which 1s ineonsid-1able. ‘Such a list, with rire revenue derived from eaci article, t3 in course of, preparation and wili be submitted to Coagress, Tae Femoyvai of duties Jrom a large Ciass Of articies used 1a Deoufactares, and the eduction of ine duties upon Coal turnise an opportunity for a moderate decrease Of taerates Of duties upon Luvse products whose Cost will be diumiuished by these changes, GOLD AND UNITED STATES CURRENCY. Wale: nothing as the consequence of legisiation could bedore disastrous tothe public prosperity thab @ policy whica should destroy or seriously dis- farb tue mandfacturing interests of the country, it 1s stil, possible, by wise and moderate chances adopted to tha condition of business and labor, to reduce the rates ol dunes with penefit toevery class of peopie, ‘The average premium oa goid for tre Yeur 18.8 Was 39.54 per ceut; for the year 156) it was 32,56 per cent preuuum; for the year 1570 it was 14.33 per ceut premtam, and for the first elevea months of the year 1871 it was 12.1 per cent. ‘The value Of the paper car of the country daring the years 156) wad 1870 was apparently ap- preciated by the inci use of paper mouey in the South, out chiedy by the establisninent Of ‘the credit of tac United states upon a firm .vasis. un the Ist of Jaouary, 1371, the last named fact was fuliy accomplisned, and since that time the appre- Ciattou OL tue paper eurrency|has ocen due wuvily to the tucreasea demaud for it an the ousiness affairs of the country. Tue didercuce between the Vaiue of paper money at the present moment and ity Vaiue on the 1st of December, 1570, may be uttributed ta the ater cause, aud furnishes the best means wiich the countey has yet had for ascertaimimg the quanticg of paper carteucy whicu cau be used and lis value Kept ut par with gold. ‘tus resu:t Of Linus test con- Me to ve the best opinion ‘Upon the suvject, that the amonat of paper money 42 exxculavion 18 Bull 80. great thal i capuot ve maintained in value at pur with coin, There are” two muies of reuef, Une is to reduce the votums- of currency, as recommended by me in wiy anuual Feport suvmitted to Coagress 1a Decewper, 1809. ‘rhe other mode 1s to await the growth of the country aud the mnercasiug demands of business, Whicd, 1m tune, will produce the desired résuit. Tae Cluel means of securing the. end sought, without a reduction in whe volume of the Currency, Would be the use of paper money Qpou Wwe Pacilic coast. With tila object in view, sleps nave veen taken @ready by this department for the purpose of ascer- taining Whether iC is practicable to suusiituve paper Tor coin, aad 1 naverea,oa tounticipate that a Chauge may be made in the laws relating to national banks tending to that result, waich Will not aifect uata- Vorably the geueral character of tue system. FRAUDS BY GOVERNMENT OFFICERS. It is my duty to call the avteution of Congress to the importance of abolishing the system of shares in motefies a8 far as the benedts iaure to revenue officers and other persons officially counected witi the government, Tis measure Was reconiuendea in my last annual report, and @ Statement was sub- mitted to Congress showing the amount received oy oalcers of customs, together Wath a bill increasing thew salaries without any increase of appropria- tons from the ‘Treasury, the sum now pa.d from moieties being quite si 6 to place the entire Joree Upon a satisfac ory Loong 1D regard to pay, uring the last tiscal year the offices of Col.ector aud surveyor oithe Port of New York eaca re- ceived irom moieties the sum Of $49,215 and the Naval Ollce the sum of $43,195. Im most of tie Cases the onicers do not periorm special services en- Uding them to the amounts grahved, and importers @nd Olners, Whose acts Were made the savject of Mvestigation, complaio, and, 1 think wath just rea- son, tual the agents of the government have a pecu- nlary lacerest 11 pursuing those charged with vio.a- tious of the Law. = ‘The governinent ought wo pay fair salaries, and rely upon the good fata of ts onicers for the pertormance of their duty. One of the alMcuities which the department has to meet frequentiy, is that customs onlcers pave an interest in the proceedings for the discovery of fraud, tue settlement of cases or the prosecut on of them, which ts different irom tne real interest ot the goverment, and asa necessary result the con- Guct Ol sugh villcers 15 Open to suspicion, Doth on the part of those who are pursued by them and the government they ostensibly represent. It may be deemcu expedient to icave the law as it now stands ja regard to informers Who are not O.licers, Making 1 # penal offence for any oullcer to enter into an arraugement with an inform. erior any share of the proceeds or: the tuformation and giving to the doformer perpetual rigat of acuon for the recovery Oi avy ioney cr Other valuaole thing paid or given to an officer engaged 10 the dis- covery or prosecution of @ iraud or legal wrong against the goverament, NATIONAL BANKS. The report of the Comptrolier of the Currency shows that 145 bauks have veen orgamzed under toe act upproved July 1/, 1571, providing for te issne Of | $54,000,00) of additional bank cir. culation; and (hat the sum of $22,333,900 has been issuel, By virme of the same act the Treasury has redeemed $22,230,000, of the three per cent certificates then 1n circulation, leaving tue sum of $23,4v0,000 bow outstanding. take the liverty of suggesting that it appears ww me to be wise to leave the disirioution of the circulation authorized by said act as it now stands, Should the Statue that nave aiready received their propur- ton of circulation be autvorized to take what may remain only @ brief period will elapse before a demand will ve made from States with @ limited circulation for an increase. it seems prudent, tnere- fore, to retain balance of the $54,000,000 for distribution those States now haviug a claim to 1, on the bass of equality of appor- tionment. i details of the subspription to the loan show thas the natioul banks have, upon the whole, acted itveraily, than @ hundred millions of dollars having bee! Not anreasonaoie to tender to opportunity to subscribe for bonds under the act of July 14, 1870, to an amount equal to the deposits ro- quired ot them as security tur circulation, and to cuurle that offer with a Rronision that after ninety days, to the extent that the offer may ve dectined, other banking associations may be forme: im the sevoral States where the existing banks sual have faued to make tho required subscription, and the circulation transierred from such banks to the new asaociations, ‘ ‘The vanks now organized cannot justly comp'ain if, having an opportunity to pursue tie ousiness ‘upon the new bonds, aud declining it, other associa~ tova shalt sueceed to their iranchises and rigats, ‘Toe business of ine BAU OF ENGRAVING AND PRINTING has been carried on with diligence during the year, and with saustactory results. Although some eiforis have becn made at countersoiting the spuctal papers ‘used by the department, they have not been success- ful, And specimens captured are 80 crudt as not to exoie serious eg rae in! son” Brora Coes, a tet ul att bana fo oe bsks be accounted tor een sheets ape! of which have nd that an ty 1 appropriation be made for # hew wette Of national bank notes, Those now in use are ‘tMuch worn, and very, suecexsiul ounteriotta of several denomina tons Rave appeared. PRACRUCTION OF PUBLI he ‘Tho public building used as @ Custom House, Cont BUILDINGS BY THR CHICAGO House and Post OMoe at Chicazo was destroyed oy (he great fire un the sth of Uctover iast, davpainatnt ty Dory of Onioage on the mas f E 4 Nitude of ot buste: wants of @ pu _ suited to the ciass ie ‘cnt that & much Larzer piece ol Should be obtaine!, either by addition to predene lot or by the purctase ol another site, On LE vg of Octover last I wrote a letter to Governor pa oY him to recommend tv the Lesista- Courts of tn se of anact granting anthority wo the as miger tT State.of Lilinois to condewin such land de auable wuired in Case tie government snowld to et by puronase . & reasonable payment to be should be lar; a to penary ne rete eee aught for the ee envt structures, Ses itiraihag’samtorcat usineds, and adequas ty also sean be i and the ‘epredations a mites perooms. 18 ly necessary to say that in the extsiing condition of adairs at Chicago it 13 important that os Sppronniation, ®@ Vatiaole during the present Eg fF year, should be made without unnecessary raat aye STATE BUILDINGS, ann ‘port tne Si Architect has completed the Custom House, Court Ouice at Portiand, Maine: tne | House and Post Omice at Des Moines, Jowa; the Court House and: vost Oilce at Madiwon’ Mano. ie ts ‘no Haepscted gating Gustens uorze OW ©: atthe Cnsto: aud Post Oittce at St. Paul, Minuewtas e Marine Hospital at Chicago, Ulimei; the Court Post Unice at Ascorta, Oregon; Machias, Maine; tne Branca Mit at San Fraucico, CHO EOI AOE Sie an bagel Caro, L mL shed and rei for use by the Jot de: “July next, thet cme Y wit! fenienn Im “an unfinished condition ‘tae Court House and Post Uitice at Columbia, South Cato- Tans ate By ok ed at New Orleara, Lac ; Justom 14039 at Charleste Evuth Uatolina, the Gusto H Knoxville, Tena,, the Custom House and Post Vilice at Poriland, Urexon;, the: Court House and Post Otice at New York, the Post Oitice and Independent Treasury at Bostou, aad the Custom House and. Post Ollce at Omaua, Nev. Tae prosecittion of those Works, some of which are of great importance, in Connection with puvlié baidin2s, to beerected at Onteago, and. theerecitou of marine hospitals at colon tates aes York, Vero hd i @ Supervising archt- tect of the Treasury gud tie force at his command. I cannot, there/ore, advise appropriations for otuer Public Luidtigs unt some of those La process uf construction shall have been completed, The points at wicu the erectiva or repair of public buildings is Most needled dre’ Hartford, indiunapolis, Crncinnat and dt. wouls, VING APPARATUS. COAST SURVEYS AND LIFE: Under an act passed at tie last session of Con- fres8, appropriating $209,000 for the purpose of more eflectualiy securing lie aud property on tae Coasts of New Jersey and aud, & carefus CXaMmidattod O! the Coast aud OF the itt tious bas been made by experieaced ofl revenue servic. In accordance with the'r repurt peapones Were Invited and accepied for the erec- 1on of fourteen new houses ou tue coast of New Jersey and six upon the coast of Long Isiand. — Ke- 418,0xe wi8o Making uvon the oid bouses on the wong island coast, ‘The operations of the Coast Survey, whteh are urider the adratnistrative direc- tton of this depart:nent, have vceu prosecuted with the usual eneray, v8 Will LO seca irom the brief re- port of progress made by tne Superintendeat in advance of the usual detailed reports, with maps, aundally submitted to Conzress, Tae sutvey of the Atiactic coast t3 now rapidly approaching Coaipietion; that of the Gulf coast is more than hal: finished abd the work on the Pacific Goaat 13 velig pressed torward vigorously. ‘The extimates submited substantially conform to the appropriations for the present year, An in- crease 18 asked for the item of extending the tn- angulation across the couutry Lo ihe Pacific Ocean, great 1aterest having besa manifested by the @uthoricies of the ptates traversed in the prosecu- ton of the work. ‘The business entrusted to tue Lighthouse Buard ta oue of the most important branches of the pubic service in the conirol of tus department, and I am ubie to stave tat it ts con- ducted with flueitty aud witn reference solely to the maritime interests Gl the country, The estimates made by the Lignthouse Board exceed the appro- Priations for the present year, but they appear to ve necessary, and 1 respeciiully recommend them to the consideration of Congress. PUSLIC HOSPITALS, Under an act of Congress approved July 30, 1870, Dr. Jouu M. Woodworth has been appointed Super- vising Surgeon of the Marine Hospital service, Lis Administration is satisfactory to the departineut. ‘The average nuver of hospital — patents for the cal year endinz June 380, 1570, was $1,016, and for tue year euding June 30, 1871, $1,138." The total cost Of the service for the first famed year was $405,624, being an average jor each patient of $1 09 per day, and for the lauer year $453,032 42, or an uvecage Of $1 v4 per day. Jo the first named year the hospital tax was $153 70, And in tne latter year it amounted to $293,502 14. The supervising sargeon.18 01 opinion that paviltop hospitals are better adapted to the successful treat- meut of the sick than the ordinary burtaings of brick and stoue, Winie the expense; are valy one- fourto as great, In accordance with lua suggesuon 4 recommend an appropriation of $50,000 lor the purenase of land‘and the construction of a pavilion apiinl ab Pitsburg, Pa. The present hospital ix situated 10 the vicinity of frou milis aud railways, aud asit can be sold for about seveuty thousand doliars the government will ve fully reanoursed tor ihe cost of a new hospital, whe the comfort of the patients will be promoted. An estate bas been made that the sum of $50,000 will be suificient for the constraction of a pavilion hospital on Angei Island, the Bay oi San Francisco, suitictent to accommodate 160 patieats; and 1 also recommend ap appropriation of that amoaut for tiat purpose. I also respectiully renew the recommeadation made or ® pavilion hospitat near the cicy of sumicient for the accommodation of 200 patients. THE REVENUE MARINE SERVICE employs tweaty-fve steam vessels and eight saillag vessels, In addition to these inere are two large steamers upon the lakes, not in commissiwn, and two schoouers upon the Coast conaemued as not fit for duty, uf the SX large steamers upon tae lakes four only are in commission, aud as the others are not needed I have the honor to recommend that authority be given for their sale. During the last year four tron steamers have been bullt—three of 250 and one of 360 tons burden. Under the existing appropriation Of $200,00u the Department ts about to issue propo- sals foriour small irou propellers, two tor tue va- cic ana two for the Atlantic coast, A further appropriation of $200,000 14 needed to enable the department to carry into effect the recommenda- Uon of the commission, whose report was ap- proved by the department and submitted to Von- [sh May 26, 1870, The plan recommended y the Commission, when fully guopted, wil effect a reauction in the expenses of tais branch of the service of about five hundred thousand dollars, or about thirty-four per cent of the whote cost. Te changes proposed contemplate the use of vessels of Jess ionnage, and @ consequent reduction of the number of mea enployed. ‘rhe expenses of the revente marine service for the year ending June sv, 1571, Were $1,251,904, quarter of the preseal iscal year shows @ retuction Azainst $1,155,303 for the preceding year. The urst 1b expenses of $33,201 a8 Compared With the corre- sponding period o1 the preceding year. At tne date of my Jast report @ board of oificers Was In sessivk cuarged with the duty of examining tie oftcers then in active service. The report sowed vitat flys captains, ten first heutenants, une second leuien- a@uts and ten thud heatenants were not quaiifed tor duty, Tne persoas found to be tncompetent have been dischurgeu, Tncir places nave been fied or promotion und by tue appotntmeat of additional oficers, aiter a compeutive mination, ‘here are several ofMlcers im che service who, on accounts of age, are undt for uctive duty. For the supply of oficers m their places and for tao increase of the Number of engineers, readered necessary by te substitution of steam for pore vessels, additional appropriations are required for the next nycal year, The braaci of the pabilc ser- vice 13, upol Mm 8 satisiactory nthe while, condition. suring the third session of the Forty- first Congress a bil Was Bulmitied for the organiza- tion Of a Mint bureau, Tue vill Daased tne seuate, but failed in the House of Represeatatives, thoust not, a8 I am informed, from auy objection to the principles on which 1% was iramed. | urgepuy Feconimend the passage of @ similar bill wt the Present session of Congress, ALL TAZ MINTS AND ASSAY OFFIOR3 are nominally in charge of the Treasury Depart- meat, but there is not by autoority ot law any per- sun in the department who, by virtue of iis oifice, 1g supposed to be informed upon the subject, and Lo one ou whom the Secretary of the Treasury can ott, cially rely for information oF advice in the Manage- meat Of this important branch of public business, OUR INTERNAL COMMERCE. It $s estimated that tne internal commerce of the Country is fifteen times a9 great O83 our external commerce; but the suatisiics are not trustwortny or compiete, and { respectiully recommend that pro- vision be made tor ovtaining such returns as will show faliy the trade of tue counity upou tne rivers, can: lakes and ratiways. ‘The report of Mr. agent who has bed shows tbat the bustuess nus the Alaska Commercial Com- pany tn sabstautial couforimty to tne corms of the contract. Mr. Breans suguests an rae of ia the constraction of a house ppen each tsiand 6 accommodation of the avents of the government, tno com; ‘who at present are wepemanut a nL awa Dot ake been conducted iy for board and shelter, aad t any evs has resuited from tue arrapgement is inatantest that it ought mot to be continned. It is at an appropriation Of $5,0u will be anoent ior ‘@ saitabie Duikiing on each wland, e ayents charged With the Management of the seal fisnery have been detatied froin the eustome business, 3 vespecticlly recommend that auinority be given for the apputatment of wo agents ani two assisiact pare, and that & suitable appropriation be made for their salaries and expenses, The necessity of two agents at each island apparent. The agents Wili desire to return to the Staies a# oiten ua once in two years; aud, moreover, Ib 14 ‘wise for the roverument to have not teas than four persoas in its Cmployment conuected wata the care Of the people dud the business Oo! the ne Mr. Peo B90 MaAKes Bugyestions as to furtuer pro- ‘viston for the care of tue natives which appear to me to deserve cousideration. INOBEASK OF SALARIES TO HEADS OF DEPART MENTS. Tagatn call the attention of Congress to the tn- portance Of increasing the salaries of the Buxeat Oiicers aud heads of division in the Treasuyy be- rimeni. At present there t4 great inequaaty and NJURtiCe EXIstt The Firat Comptroiies rec ‘A MAlALY Of $6.0008 your, While the Hecand Comnce 91 advise ihe erection of ak Housd and sost Onice at. 2 \ %