al taxation
may be repealed, except that on whisky, spirits, tobacco, and beer.
Attention is also called to the necessity of enacting more vigorous
laws for the protection of the revenue and for the punishment of
frauds and smuggling. This can best be done by judicious provisions
that will induce the disclosure of attempted fraud by undervaluation
and smuggling. All revenue laws should be simple in their provisions
and easily understood. So far as practicable, the rates of taxation
should be in the form of specific duties, and not _ad valorem_,
requiring the judgment of experienced men to ascertain values and
exposing the revenue to the temptation of fraud.

My attention has been called during the recess of Congress to abuses
existing in the collection of the customs, and strenuous efforts
have been made for their correction by Executive orders. The
recommendations submitted to the Secretary of the Treasury by a
commission appointed to examine into the collection of customs duties
at the port of New York contain many suggestions for the modification
of the customs laws, to which the attention of Congress is invited.

It is matter of congratulation that notwithstanding the severe
burdens caused by the war the public faith with all creditors has been
preserved, and that as the result of this policy the public credit has
continuously advanced and our public securities are regarded with the
highest favor in the markets of the world. I trust that no act of the
Government will cast a shadow upon its credit.

The progress of refunding the public debt has been rapid and
satisfactory. Under the contract existing when I entered upon the
discharge of the duties of my office, bonds bearing interest at the
rate of 4-1/2 per cent were being rapidly sold, and within three
months the aggregate sales of these bonds had reached the sum of
$200,000,000. With my sanction the Secretary of the Treasury entered
into a new contract for the sale of 4 per cent bonds, and within
thirty days after the popular subscription for such bonds was opened
subscriptions were had amounting to $75,496,550, which were paid for
within ninety days after the date of subscription. By this process,
within but little more than one year, the annual interest on the
public debt was reduced in the sum of $3,775,000.

I recommended that suitable provision be made to enable the people to
easily convert their savings into Government securities, as the best
mode in wh