advantage of the parties, been much augmented.

Peruvian guano has become so desirable an article to the agricultural interest of the United States that it is the duty of the Government to employ all the means properly in its power for the purpose of causing that article to be imported into the country at a reasonable price. Nothing will be omitted on my part toward accomplishing this desirable end. I am persuaded that in removing any restraints on this traffic the Peruvian Government will promote its own best interests, while it will afford a proof of a friendly disposition toward this country, which will be duly appreciated.

The treaty between the United States and His Majesty the King of the Hawaiian Islands, which has recently been made public, will, it is believed, have a beneficial effect upon the relations between the two countries.

The relations between those parts of the island of St. Domingo which were formerly colonies of Spain and France, respectively, are still in an unsettled condition. The proximity of that island to the United States and the delicate questions involved in the existing controversy there render it desirable that it should be permanently and speedily adjusted. The interests of humanity and of general commerce also demand this; and as intimations of the same sentiment have been received from other governments, it is hoped that some plan may soon be devised to effect the object in a manner likely to give general satisfaction. The Government of the United States will not fail, by the exercise of all proper friendly offices, to do all in its power to put an end to the destructive war which has raged between the different parts of the island and to secure to them both the benefits of peace and commerce.

I refer you to the report of the Secretary of the Treasury for a detailed statement of the finances.

The total receipts into the Treasury for the year ending 30th of June last were $47,421,748.90. The total expenditures during the same period were $43,002,168.90. The public debt has been reduced since the last annual report from the Treasury Department $495,276.79.

By the nineteenth section of the act of 28th January, 1847, the proceeds of the sales of the public lands were pledged for the interest and principal of the public debt. The great amount of those lands subsequently granted by Congress for military bounties will, it is believed, very nearly supply the public demand for several years to come, and but little reliance can, therefore, be placed on that hitherto fruitful source of revenue. Aside from the permanent annual expenditures, which have necessarily largely increased, a portion of the public debt, amounting to $8,075,986.59, must be provided for within the next two fiscal years. It is most desirable that these accruing demands should be met without resorting to new loans.

All experience has demonstrated the wisdom and policy of raising a large portion of revenue for the support of Government from duties on goods imported. The power to lay these duties is unquestionable, and its chief object, of course, is to replenish the Treasury. But if in doing this an incidental advantage may be gained by encouraging the industry of our own citizens, it is our duty to avail ourselves of that advantage.

A duty laid upon an article which can not be produced in this country, such as tea or coffee, adds to the cost of the article, and is chiefly or wholly paid by the consumer. But a duty laid upon an article which may be produced here stimulates the skill and industry of our own country to produce the same article, which is brought into the market in competition with the foreign article, and the importer is thus compelled to reduce his price to that at which the domestic article can be sold, thereby throwing a part of the duty upon the producer of the foreign article. The continuance of this process creates the skill and invites the capital which finally enable us to produce the article much cheaper than it could have been procured from abroad, thereby benefiting both the producer and the consumer at home. The consequence of this is that the artisan and the agriculturist are brought together, each affords a ready market for the produce of the other, the whole country becomes prosperous, and the ability to produce every necessary of life renders us independent in war as well as in peace.

A high tariff can never be permanent. It will cause dissatisfaction, and will be changed. It excludes competition, and thereby invites the investment of capital in manufactures to such excess that when changed it brings distress, bankruptcy, and ruin upon all who have been misled by its faithless protection. What the manufacturer wants is uniformity and permanency, that he may feel a confidence that he is not to be ruined by sudden exchanges. But to make a tariff uniform and permanent it is not only necessary that the laws should not be altered, but that the duty should not fluctuate. To effect this all duties should be specific wherever the nature of the article is such as to admit of it. Ad valorem duties fluctuate with the price and offer strong temptations to fraud and perjury. Specific duties, on the contrary, are equal and uniform in all ports and at all times, and offer a strong inducement to the importer to bring the best article, as he pays no more duty upon that than upon one of inferior quality. I therefore strongly recommend a modification of the present tariff, which has prostrated some of our most important and necessary manufactures, and that specific duties be imposed sufficient to raise the requisite revenue, making such discriminations in favor of the industrial pursuits of our own country as to encourage home production without excluding foreign competition. It is also important that an unfortunate provision in the present tariff, which imposes a much higher duty upon the raw material that enters into our manufactures than upon the manufactured article, should be remedied.

The papers accompanying the report of the Secretary of the Treasury will disclose frauds attempted upon the revenue, in variety and amount so great as to justify the conclusion that it is impossible under any system of ad valorem duties levied upon the foreign cost or value of the article to secure an honest observance and an effectual administration of the laws. The fraudulent devices to evade the law which have been detected by the vigilance of the appraisers leave no room to doubt that similar impositions not discovered, to a large amount, have been successfully practiced since the enactment of the law now in force. This state of things has already had a prejudicial influence upon those engaged in foreign commerce. It has a tendency to drive the honest trader from the business of importing and to throw that important branch of employment into the hands of unscrupulous and dishonest men, who are alike regardless of law and the obligations of an oath. By these means the plain intentions of Congress, as expressed in the law, are daily defeated. Every motive of policy and duty, therefore, impels me to ask the earnest attention of Congress to this subject. If Congress should deem it unwise to attempt any important changes in the system of levying duties at this session, it will become indispensable to the protection of the revenue that such remedies as in the judgment of Congress may mitigate the evils complained of should be at once applied.

As before stated, specific duties would, in my opinion, afford the most perfect remedy for this evil; but if you should not concur in this view, then, as a partial remedy, I beg leave respectfully to recommend that instead of taking the invoice of the article abroad as a means of determining its value here, the correctness of which invoice it is in many cases impossible to verify, the law be so changed as to require a home valuation or appraisal, to be regulated in such manner as to give, as far as practicable, uniformity in the several ports.

There being no mint in California, I am informed that the laborers in the mines are