to exceed, in ordinary times, one or two hundred thousand dollars. As they are required to have their balances always ready in gold and silver, the Department will always have the means of meeting its engagements; and if a default in an individual case should occasionally happen, nothing like a general refusal to pay, as in the case of the late deposite banks, is ever to apprehended.

It will ever be the true policy of the Department not to have a large surplus; and, consequently, there will be little to intrust to the custody of postmasters or others. More over, the number of post offices now instructed to retain their funds, will be largely reduced upon an adjustment of the collection system to the mail service, as arranged within

the last twelve months.

Though in some places convenier.t, banks are not necessary to the collection and disbursement of the funds of this Department. In reference to more than ten thousand post offices, the collections and disbursements are effected more expeditiously and more conveniently without the interposition of banks, than they could be with it. The contractors who are creditors of the Department, are its collectors from postmasters, and the collection and disbursement are but one operation. It is generally effected in a few days after the close of each quarter. The operation is the same where the postmasters pay to contractors upon the drafts of the Department, though it is more tardy. The few offices in reference to which banks are a convenience, are those whose receipts are large, and are not likely to be absorbed from quarter to quarter by the drafts of the Department. They have generally iron chests or safes where the specie is kept; and, with a strict supervision and careful attention to their bonds, they will seldom, if ever, be found in default.

The necessary transfers of funds are effected by the Department without inconvenience or loss. On the interior mail routes, the expenditure is generally greater than the income; so that after the contractors have received the entire revenue of the offices supplied by them, balances are still due. These balances are as readily paid off by drafts on the postmasters in the cities where the surplus arises, as they could be by checks on banks in the same places. The process is rendered the more easy from the fact that the heaviest surplus accrues at those points where funds are the most valuable, particularly at New York; so that the drafts of the Department to pay balances in the most distant parts of the Union are generally better than cash, being available for mercantile remittances. Thus, the necessary transfers of the Department are readily effected; and as this state of things is not likely to change, it would seldom, if ever, become necessary for the Department to transport specie from one point to another, if there was not a bank in existence.

Upon the suspension of the banks, efforts were made in some quarters to compel the Department to receive irre. deemable and depreciated paper for postages. Law, justice, and public policy, required an inflexible resistance of these efforts. Gold and silver are the only constitutional and legal currency of the United States, and nothing but that currency, or its equivalent, can be legally offered to the public creditors in payment. All taxes and postages are imposed in this currency, and all contracts are made upon its basis. The public faith could be kept, and the public business successfully carried on, only by a strict adherence to the plain letter, as well as obvious spirit, of the

law.

The undersigned is happy to state that all attempts to force the Department to receive depreciated paper were soon abandoned; that little difficulty has been experienced in collecting postages in specie, and none where the circulation of change tickets has been successfully resisted; and that the credit of the Department has been preserved unimpaired. Nor is any difficulty apprehended, so long as

postages are collected in the constitutional currency of the United States. But, should the Department be compelled to receive, and offer to its creditors, the depreciated notes issued by hundreds of embarrassed, faithless, or bankrupt corporations or individuals, no sure calculation can be made as to the future; and there is reason to apprehend general discontent, extensive failures, and deplorable disorganization throughout the mail service. With what face could the Department insist on, and compel, a strict performance of contract obligations by contractors, when stripped of the power to perform the most vital part of the contracts (so far as the interest of the contractor is concerned) on its own part? Justice and sound policy alike demand a firm adherence, in the mail service, to the standard of value, and the basis of contracts prescribed by the constitution, and hitherto strictly maintained, (except for a short period,) amidst the calamities of war.

On the whole, no legislation is necessary to maintain the credit of this Department, or enable it to manage its fiscal concerns, the existing laws being deemed ample for those purposes.

I have the honor to be your obedient servant,
AMOS KENDALL.

A. POST OFFICE DEPARTMENT, -, 1837.

SIR: You will, until further orders, retain the proceeds of your office in your hands, in specie, to meet the drafts of this Department.

I am, respectfully, your obedient servant,

Postmaster at

B.

POST OFFICE DEPARTMENT,

Appointment Office, Washington, May 16, 1837. SIR: I am instructed by the Postmaster General to call your particular attention to the fact, that the rates of postage, as established by law, are based upon the legal currency of the United States. The following extracts from the printed regulations and the law, will clearly show what are your duties and responsibilities in relation to the kind of currency to be received for postage, viz:

"You will receive nothing but specie, or its equivalent, for postage." Instructions to Postmasters, chapter 5,

section 62.

"All payments to the Department, whether upon its drafts or by deposite in bank, must be in specie, or its equivalent. No allowance can be made to postmasters for the depreciation of money received for postage, nor for losses by fire, robbery, or theft."-Chap. 28, section 245. Extract from an act of Congress, approved on the 14th of April, 1836.

"Sec. 2. And be it further enacted, That, hereafter, no bank notes of less denomination than ten dollars, and that from and after the 3d day of March, anno Domini 1837, no bank note of less denomination than twenty dollars shall be offered in payment, in any case whatsoever in which money is to be paid by the United States, or by the Post Office Department; nor shall any bank note, of any denomination, be so offered, unless the same shall be payable, and paid on demand, in gold or silver coin at the place where issued, and which shall not be equivalent to specie at the place where offered, and convertible into gold or silver upon the spot, at the will of the holder, and without delay or loss to him: Provided, That nothing herein contained shall be construed to make any thing but gold or silver a legal tender by any individual, or by the United

States."

Hence you will perceive that, whatever you may receive for postage, you are responsible for gold or silver; and that it is unlawful for you to offer in payment to contractors, or others, any note of any bank which does not pay its notes in specie. As the Postmaster General has no power to release you from your responsibilities under the laws, and as, on the contrary, it is his duty to see them faithfully executed, he has deemed it expedient to give you this notice, that you may guard yourself against loss in the collection of your postages.

Very respectfully, your obedient servant,
ROBERT JOHNSTON,

Second Assistant Postmaster General.

C.

Postmasters, who may be under instructions to retain the proceeds of their offices antil drawn for by the Department, will observe the following regulations, viz:

Those whose nett proceeds are five hundred dollars or more per week, will report the amount weekly to the Department. Fractions of weeks at the beginning and end of quarters need not be reported separately.

Those whose nett proceeds are not five hundred dollars per week, but amount to that sum or more per month, will report them monthly. The last month of each quarter need not be reported separately.

At the end of each quarter, all postmasters at draft of fices will immediately ascertain the amount of nett revenue accruing at their respective offices during the quarter, and report it forthwith to the Department, setting down the sums, if any, which may have been reported weekly or monthly, and deducting them, thus exhibiting the balance not reported.

All these reports must be by letter addressed to the PostImaster General, which must be sent separately, and not enclosed with the quarterly accounts, or tied to them, or to any other letter or packet on other business. Nor must it be delayed until the accounts are forwarded, if it can be

sent sooner.

Postmasters will not be permitted to use or loan out any of the moneys belonging to the Department, but will keep them always on hand to meet its drafts. A violation of this regulation will be considered good cause for instant removal and prosecution. Every draft must be paid on presentation.

The travelling agents of the Department will be instructed to call occasionally on the draft offices, without notice, for the purpose of counting and reporting the cash on hand, and reporting also the manner in which it is kept.

REPORT ON THE FINANCES.

Letter from the Secretary of the Treasury, transmitting his annual report on the state of the finances. House of Representatives September 5, 1837; read and laid upon the table.

TREASURY DEPARTMENT,
September 5, 1837.

In pursuance of the duty of this Department to submit to Congress, at each session, the state of the finances, and in conformity with the request of the President that such other fiscal matters should, on this occasion, be presented, as appear to require early legislation, the undersigned has the honor to offer the following report:

1. CONDITION OF THE TREASURY.

It is not proposed to give all the particulars relating to the receipts and expenditure which usually accompany an annual statement; but an exposition of them, under the customary general heads, so far as they have been ascertained, for the first half of the year, is subjoined.

[25th CONG. 1st Suss.

Brief estimates for the other half are made, and such explanations added, as seem necessary to show with clearness not only the condition of the Treasury at this time, but its probable state for the residue of the year.

According to the Treasurer's running account, the whole amount of available money in the Treasury on the 1st of January, 1837, applicable to public purposes, was $42,468,859 97. From that sum, there were on that day reserved $5,000,000; and the balance, being $37,468,859 97, was, under the provisions of the act of June 23, 1836, to be placed in deposite with the States. It is ascertained that $27,063,430 80 of it have since been actually received by them.

The amount of that portion of the first three instalments, the payment of which has not yet been acknowledged, though transfers were seasonably issued for it, is 1,165,575 dollars, 18 cents. The remainder is $9,367,214 98, and is the sum which was designed for the fourth instalment of deposites with the States on the 1st of October next. The amount reserved in the Treasury on the 1st of January, has since been increased, by returns subsequently received from banks, to the sum of $6,670,137 52; and which of course could not then be ascertained or taken into computation.

To these may be added about $600,000 which remained in the hands of receivers, and $50,000 in those of collectors, subject to draft. All these make the aggregate for that half of the year $13,187,182. If no further postponement be granted on duty bonds, it is estimated that the whole receipts for the last half of the year, from all sources, will be about $9,500,000; which would make them, as ascertained and estimated for the whole year, $22,687,182. But if the brief extension of the present postponement,

brought into view hereafter, and favorably regarded, be directed by Congress, the receipts will probably be about $7,000,000; while, by a postponement of the whole to another year, they will not be likely to exceed $4,500,000.

Looking at our whole revenue, therefore, from all quarters, it appears that the balance of money reserved at the commencement of the years, as finally ascertained to be $6,670,137, with the actual receipts for the first half at $13,187,182, and those now anticipated for the last half of it at $7,000,000, will constitute an aggregate of $26,854,319.

In order, therefore, to discharge that excess, and retain, of the money reserved on the 1st of January, one million, which is the smallest sum deemed proper, under the acts of Congress, for the efficient operations of the mint, and at least three or four millions more to answer sudden and contingent calls, there will probably be a necessity to resort to the deposites now with the States, and to the instalments destined for them in October, or to some other resource, for a sum equal to $10,000,000. By a report of the Treasurer of the 30th ultimo, it appears that the bal ance in the Treasury, including what was in the custody of banks, the mint, and collecting officers, was then $14,596,311; that the amount of this subject to immediate draft was only $8,928,072; but the whole balance in the Treasury, including all which had been deposited with the States, and ordered to be, though only a small part of the amount is subject to immediate draft, was $41,532,381. Deduct all which has been, and was designed to be, deposited with the States, and there would be no balance left on hand subject to draft, though including every thing in the mint, and in the possession of receivers and collecttors, which is applicable to general purposes.

Hence it is probable that, besides the deficiency for the expenditures of the year, no sufficient means of any kind will exist on the first of October next, after defraying the intervening expenses, to complete the instalment of deposites then payable, unless a large part of the bonds for duties postponed to that day, and amounting to near $4,000,000, and the million and a half then due on the first bond from the United States Bank, shall be punctually paid, or, in the mean time, some provision on this subject made by Congress.

The money standing to the special credit of the Post Office Department and the Patent Office, as well as various trusts, is not included in the above exhibit, for reasons explained in the last annual report. Outstanding and unexpended appropriations at the end of the year will, in this view of our financial condition, be still left charged on the Treasury, amounting to about $16,000,000.

This does not differ much from their amount at the close of the last year. Whether the appropriations unexpended on the first of January, 1838, prove, therefore, to be one or two millions larger or smaller than is now anticipated, it must be manifest, from all the above data, that some new legislation is indispensable to complete satisfactorily the service of the year, and leave a suitable amount in the mint and the Treasury.

Indeed, before submitting the last annual report, the in dications of a decrease in the receipts, and of an approaching revulsion in our commercial prosperity, appeared so strong to the undersigned, that he felt compelled, with reluctance and regret, because differing so much from the views of many others, to estimate the accruing receipts for the year at only $24,000,000.

As the appropriations asked for were about $27,000,000, it was then suggested that the occurrence of a deficiency was probable. When those appropriations became in fact enlarged by Congress to more than $32,000,000, it rendered a deficiency inevitable, to the extent now anticipated, unless the receipts should happen greatly to exceed the

estimates.

II. ON THE POSTPONEMENT OF THE PAYMENT OF BONDS FOR DUTIES.

The first suggestions which will be submitted concerning such special legislation as appears proper in consequence of the recent embarrassments of the country, relate to the postponement of the payment of bonds for duties.

Early in May last, the collection of the revenue from customs became much obstructed through the severe pecuniary difficulties of the mercantile interest. The Treasury Department felt an anxiety not only to take steps which

might increase the security of the Government for eventual payment, but, in an emergency so great, and to many so unexpected, to furnish all the relief from sacrifices which could judiciously be extended under its limited powers, and in anticipation of what would probably be its straitened condition in a few months.

A postponement of the payment of the bonds falling due was, therefore, and in accordance with the views of the Executive, authorized for periods from thirty to ninety days, on interest and additional security, and in a manner more liberal than usual, by permitting it before as well as after suit, in all cases of embarrassment, great hardship, or insolvency.

The peculiar terms, and the reasons for such postponement, are more fully set forth in the documents annexed. [A. Letter from the Secretary of the Treasury to the collector of New York. B. Instructions of the Solicitor of the Treasury.]

When the difficulties in discharging bonds in a legal currency became increased by the suspension of specie payments in some of the principal cities, and the President decided to call a special session of Congress, the postponement was allowed to be extended till after the commencement of the session, in order that an opportunity might be afforded to obtain further relief by new legislation. Urgent requests were made for an indiscriminate delay of payment on all bonds to the 1st of January next, and for the receipt, in discharge of them, of notes issued by banks not paying specie. [See memorials from New York, Boston, and New Orleans, and copies of a reply to one of them, and letter to collector of New York, C, D, E, and F1 and 2.]

It was not deemed proper to comply with these requests. But as long a delay as our fiscal situation justified, and every relief as to the currency which seemed legal, by the receipt of debenture certificates and Treasury drafts, for duties were permitted, in mitigation of the existing em barrassments.

Having, in this, done all that a sound and liberal exercise of the discretion of the Department appeared either to justify or require, no intention exists, nor would it be proper in the present state of the Treasury, to grant any indulgences beyond those already authorized, without the express direction of Congress.

Some further facts which may be useful to aid its mem. bers in coming to a correct conclusion on this subject, are, that the amount of bonds which have already been postponed to the 1st of October, is about $3,500,000, and by that date will, it is presumed, be increased to $4,000,000.

If Congress permit no longer postponement, the receipts for the year will probably be increased by the indulgences already granted, as they have been allowed, generally, on additional security, and always on interest.

But as suits and delays in collection will still occur, though to a less extent than in the first stages of the pres sure, it is expected that not over two thirds of the amount postponed before the close of this month can be collected during the current year.

The bonds already put in suit since the middle of May, amount to nearly $1,000,000. But if Congress extend gress the postponement till next January, as was originally requested by some of the parties, or for one year, as recently requested by the Chamber of Commerce of New York, (F 3,) the receipts for the present year will probably be thereby lessened from four to five millions.

Should Congress, however, adopt an intermediate course, as an act not of mere benevolence, but of additional relief, which appears reasonable, under the extraordinary mercantile distresses of the times, and more safe to the Government, in respect to eventual collections, it might sanction a delay not to exceed, altogether, six months beyond the original period of payment, in any particular case. computed that this would diminish the receipts, during the

It is

T

present year, about two and a half millions of dollars; but, if granted on the usual terms, would increase the receipts, next year, in a greater proportion, by the interest accruing, as well as by the fuller collections which would probably be made in a greater number of cases.

The opinion of the Department on these various propositions is, that, considering merely our present financial necessities, no further postponement can be regarded as expedient, though in some other respects, as fully detailed in the recent letter from the Chamber of Commerce, (F3,) the last delay mentioned might be found justifiable and more beneficial. But if a law be passed extending credit on the bonds, it is supposed that, in any correct view of the subject, its provisions need not be continued in force ter beyond the period when the worst effects of the pressure - will be likely to have ceased, and when all imports could, by a further extension of the warehouse system, be advantageously made payable in cash, at the time the goods are wanted for immediate consumption.

The extension of that system is, therefore, respectfully recommended to the consideration of Congress, in connexion with the present subject, as it might introduce as great an improvement in the collection of imposts, as the substitution of cash for credit did in the collection of revenue from the sales of public lands. It would certainly increase the security, ease, and promptitude of the operation; would dispense entirely with the trouble and risk in the payment of debentures; work favorably to the manufacturing interests; and, at the same time, facilitate our trade in foreign articles, as well as exonerate the merchant from many embarrassIments in regard to sureties and guarantees.

III. OBSTACLES IN THE WAY OF TRANSFERRING THE LAST

INSTALMENT OF DEPOSITES TO THE STATES.

Early legislation has likewise become necessary, either to withhold or postpone, for a reasonable period, the fourth instalment of deposites with the States, or to furnish such aid as may be necessary to complete them in a satisfactory

manner.

By the general suspension of specie payments, and the consequent necessity, under the deposite act, to discontinue most of the public depositories, the transfers from the banks in the West and Southwest to the seaboard, which were necessary to place much of the money in a position to be conveniently lodged with the States in October, have, in several instances, been defeated. They had, as in case of the former instalments, been ordered seasonably, though, as a general rule, only where rendered proper, in consequence of a great accumulation of public funds in an unfavorable situation, on account of the course of trade and exchanges, to be paid directly to the respective States. But, in the troubled condition of the money market, they had not been injuriously hastened as to the time of payment, and, consequently, falling due in the course of the summer and early in autumn, near two-thirds of the whole amount of these funds still on hand have been detained in the West and Southwest, where they had so unusually augmented from the large sales of public lands. Hence, if the last deposite with the States was, in this position of the money, to be attempted, the orders directing it must, in many cases, be made on places remote, and very inconvenient to some of the receiving States, on account of the unfavorable balance of trade, or the rates of exchange; and must be met, if at all, in a currency unacceptable and greatly depreciated. Transfers of portions of the July instalment could not, from the same cause, be effected in the precise mode intended, nor from the banks most desirable, though much of it had reached the appropriate points, to render the operation easy, before the suspension of specie payments. In all cases in which they were not offered to be paid in a currency satisfactory to the States, their agents were requested to return the orders of transfer till Congress could make

[25th CONG. Ist SESS.

new and suitable provisions on the subject. [See form of letter and postscript to States, G.]

But this request has not always been complied with. About $1,165,575 of that instalment has not yet been receipted for by the States to the Treasury, nor the orders returned. On the contrary, the United States Bank, chartered by the State of Pennsylvania, has lately become the purchaser of several of these orders, though not given by any debt, but merely directing a transfer from one public depository to another. This institution has demanded of the banks on which they are drawn that payment should be made to her in specie; and, on their failing to do so, has caused the orders to be protested. Under these circumstances, and, as the deposites with the States were to be made of what was in the Treasury, and consequently in the banks, on the 1st of January last, it is for Congress to decide whether payment shall be made of any of those orders in a mode and currency different from the rest of the third instalment of deposites with the States.

Another reason for withholding or postponing the October deposites, or for some legal provision to aid in completing them, is, that a sum equal to the revenue probably accruing, and a large portion of these deposites, had, before they were payable, been expressly appropriated by Congress to other objects. When looking to the rapid decrease in our receipts, to the expected deficiency in the course of the year, and the great amount of outstanding appropriations which, at the close of it, will be left unpaid, much of that whole instalment seems likely to be needed at an early day. By either of the first two measures, the money could, according to its original destination, be applied to the necessary wants of the General Government, as soon as it can be drawn from the banks in legal funds. In that way, so desirable an object would also be accomplished, without the expense and delay of the money being first paid over to the States, and then subjected to an early recall. On the other hand, several of the States might, in the present posture of their affairs, experience considerable inconvenience, either by not receiving it, or by soon refunding a large portion of its amount; and many of the banks which hold it might be able more satisfactorily to pay it to the States than to the Treasury. But, though the subject is one of much delicacy and difficulty, and peculiarly proper for the final action of Congress, it may be expected that this Department should express some opinion as to which course appears most eligible in the present condition of the finances. It is, therefore, with deference, suggested that, when regarding their condition and the importance of meeting with efficiency and good faith all the obligations of the Government to the public creditors, it would be most judicious to apply the whole instalment, as fast as it is wanted and can be collected, to the prompt discharge of these obligations; and that the last deposite with the States, not being a debt, but a mere temporary disposal of a surplus, should be postponed until Congress, in some different state of the finances, when such an available surplus may exist, shall see a manifest propriety and ability in completing the deposite, and shall give directions to that effect. Consequently no further steps will be taken as to the deposite of any part of that instalment till Congress has had an opportunity to act upon the subject in such manner as, in the present posture of affairs, its superior wisdom may consider preferable. IV. DIFFICULTY IN PAYING THE APPROPRIATIONS, AND

ON THE ISSUE OF TREASURY NOTES.

Some further obstacles exist in the way of discharging satisfactorily all the appropriations which have been made by Congress.

The effects which may be produced upon the accruing revenue, by granting or withholding further delays on bonds for duties, have already been explained.

In addition to these, there is a likelihood, in the present

pressure, that the payment of cash duties, to the extent of one million of dollars more than usual, will be unavoidably deferred to another year, as the importers, under the existing laws, are entitled to certain delays, by keeping in store the woollen goods which pay such duties.

This circumstance, in connexion with the difficulty of collecting the bonds, whether longer postponed or not, will sensibly increase the embarrassments which have been specially pointed out, and otherwise exist, in paying with promptitude and in a legal manner the large appropriations chargeable upon the residue of the current year.

Hence, after a considerable deficiency in the available means became highly probable, it was deemed expedient to adopt any judicious and lawful measure to remedy it, which was within the power of the Department. Accordingly, though large quantities of public lands were still in market unsold, and though the receipts from this source during the year would be higher than anticipated, in consequence, among other things, of a construction put upon the pre-emption laws, admitting a large class of settlers to entries, it was supposed that some further tracts, in places much desired by the new States, might prudently be offered. A few such have been advertised; but sufficient time, after due notice, has not yet elapsed to realize any thing from them.

If the fourth instalment of the deposites with the States be deferred, and the difficulty in seasonably transferring it be thus removed, yet, being chiefly in the custody of banks not paying specie, it is manifest that it cannot be immediately realized in funds suitable to meet existing appropriations. If it be not deferred, some further provision will be still more indispensable to enable the Treasury not only to place it with the States, but to pay all the public creditors and officers in a satisfactory manner, until the duties now due from the merchants, and the funds now in the discontinued deposite banks, can be collected. It is true, that a resort to the States for refunding portions of the large sums already deposited with them would also remain by law; but under the limitations of the act of June, 1836, it would be very slow in its operation, and, if complied with, would prove entirely insufficient to answer such an urgent occasion as the present. During the ensuing quarter, the whole amount that could be legally recalled would not exceed six hundred and fifty thousand dollars. Hence it seems expedient, either in aid or exclusion of a requisition on the States, (as may be deemed most suitable by Congress,) to provide some temporary resource until enough of the fourth instalment, or other means in the Treasury, can be rendered available to discharge all the public engagements. It need not be a loan, or an increase of taxes of any kind, as the General Government, in respect to its finances, (whatever temporary embarrassment the recent convulsions in commerce and banking may have created,) is far from having any just cause for despondency. It is neither overwhelmed with a national debt, nor destitute of large pecuniary resources on hand; but, entirely free from the former, it is so amply supplied with the latter as to have in the Treasury over forty millions of dollars, and eight or ten millions more in bonds, which will soon become payable. But a large portion being in deposite with the States, and the residue chiefly in banks and in the hands of merchants, under the difficulties before named, in procuring promptly, and in a legal currency, the amounts of money which are needed, some collateral aid, for a short period, till a sufficiency can be collected, appears to be judicious, if not indispensable.

It is fortunate that the energies of the country generally are not paralyzed, nor its prospects clouded by any great physical calamities; and hence its immediate wants can, without doubt, be provided for in various ways.

One mode would be to authorize the issue of Treasury notes, receivable for all public due's, but without interest.

These would differ from the drafts or checks now in use only as the latter are given for immediate payment, and drawn on persons and banks having public money sufficient to meet them; and, consequently, the holders must be exposed to the trouble and expense of presenting them at the places where payable. Still they are nearly on a par with specie. In the present deranged state of bauk paper and exchange, and in the favorable condition of the General Government, by its ample resources and exemption from pecuniary liabilities, to impart the greatest confidence in respect to the redemption of such notes, it is probable that they would readily be taken at par by most of the public creditors. Especially would this be likely to happen, provided they were issued in denominations as low as twenty, fifty, and one hundred dollars; and not in too large quantities, but used only in anticipation of the accruing revenue on occasional emergencies, and to a limited amount.

Contrary to expectation, should the Department, during the present delinquency of many of the public debtors, be exposed to such very large calls, and collect so little revcnue, as not to be able, by both the above notes and drafts, to meet all its engagements in a satisfactory manner, it would be desirable that the President should possess a contingent authority to cause Treasury notes to be issued, bearing an interest not to exceed six per cent.

Specie could always be raised on these for the public creditor, when he preferred it. But as notes bearing inuch interest would soon cease to be used in circulation, (and if they should not, would, as a currency, be troublesome in the computation of interest, and too strongly tend to exclude specie from the country,) it might be advisable not to make them receivable, at first, for any public dues, but only to resort to that measure afterwards, when it should be found convenient for redeeming them.

In connexion with the issue of any Treasury notes, it is believed to be wise to make ample provision for their early and final redemption. This could be accomplished by enacting, that when the money on hand in the Treasury and the mint, available for public purposes, may exceed a given amount of four or five millions, it shall be the duty of the Secretary of the Treasury to cause these notes (securing priority to any on interest) to be redeemed to such an extent as the surplus may exceed that sum, and what will probably be needed to defray current expense It being believed that a reduction of the tariff, and suitable regulations concerning the sales of public land, ought at a proper time to be put in force, so as to prevent any large and regular accumulation in the Treasury, the Department would respectfully propose that, in case of any unexpected excess beyond the sums above specified, it should merely be invested, in a temporary manner, in safe State stocks, at their market rate, subject to be sold again whenever the proceeds shall be wanted to discharge existing appropria

tions.

An additional consideration in favor of those measures is, that since the payment of the public debt, which absorbed any occasional surplus of receipts, it is impossible, according to the views expressed in some previous reports from the undersigned, that, with sources of revenue so fluctuating as ours, and so dependent on commercial pros perity, any fiscal operations should be long continued with ease, vigor, and uniformity, without some such regulator as a power to issue and redeem Treasury notes, or to in vest and sell the investment of surpluses. By any other course we should constantly be exposed to great deficiencies, or excesses, with all their attendant embarrassments. If depositing the excesses with the States, subject to be recalled to supply deficiencies, the pecuniary profit to the whole Union will be no greater, while such a course may involve us in a series of vexatious demands on them, accompanied by various dangers, both to them and the Gcre