fiscal
year over those collected for the year ended June 30, 1887, was
$5,489,174.26, and the cost of collecting this revenue decreased from
3.4 per cent in 1887 to less than 3.2 per cent for the last year. The
tax collected on oleomargarine was $723,948.04 for the year ending June
30, 1887, and $864,139.88 for the following year.

The requirements of the sinking-fund act have been met for the year
ended June 30, 1888, and for the current year also, by the purchase of
bonds. After complying with this law as positively required, and bonds
sufficient for that purpose had been bought at a premium, it was not
deemed prudent to further expend the surplus in such purchases until
the authority to do so should be more explicit. A resolution, however,
having been passed by both Houses of Congress removing all doubt as to
Executive authority, daily purchases of bonds were commenced on the 23d
day of April, 1888, and have continued until the present time. By this
plan bonds of the Government not yet due have been purchased up to and
including the 30th day of November, 1888, amounting to $94,700,400, the
premium paid thereon amounting to $17,508,613.08.

The premium added to the principal of these bonds represents an
investment yielding about 2 per cent interest for the time they still
had to run, and the saving to the Government represented by the
difference between the amount of interest at 2 per cent upon the sum
paid for principal and premium and what it would have paid for interest
at the rate specified in the bonds if they had run to their maturity is
about $27,165,000.

At first sight this would seem to be a profitable and sensible
transaction on the part of the Government, but, as suggested by the
Secretary of the Treasury, the surplus thus expended for the purchase of
bonds was money drawn from the people in excess of any actual need of
the Government and was so expended rather than allow it to remain idle
in the Treasury. If this surplus, under the operation of just and
equitable laws, had been left in the hands of the people, it would have
been worth in their business at least 6 per cent per annum. Deducting
from the amount of interest upon the principal and premium of these
bonds for the time they had to run at the rate of 6 per cent the saving
of 2 per cent made for the people by the purchase of such bonds, the
loss will appear to be $55,760,000.

This calculation would seem to demonstrate that if excessive and
u