an of February 8, 1861, and of the Oregon
war debt, amounting together to $14,125,800, having matured during the
year, the Secretary of the Treasury gave notice of his intention to
redeem the same, and such as have been presented have been paid from the
surplus revenues. There have also been redeemed at par $16,179,100 of
the 3-1/2 per cent "continued" bonds, making a total of bonds redeemed
or which have ceased to bear interest during the year of $123,969,650.

The reduction of the annual interest on the public debt through these
transactions is as follows:

By reduction of interest to 3-1/2 per cent. $10,473,952.25
By redemption of bonds 6,352,340.00
_____________
Total 16,826,292.25

The 3-1/2 per cent bonds, being payable at the pleasure of the
Government, are available for the investment of surplus revenues without
the payment of premiums.

Unless these bonds can be funded at a much lower rate of interest than
they now bear, I agree with the Secretary of the Treasury that no
legislation respecting them is desirable.

It is a matter for congratulation that the business of the country
has been so prosperous during the past year as to yield by taxation
a large surplus of income to the Government. If the revenue laws remain
unchanged, this surplus must year by year increase, on account of the
reduction of the public debt and its burden of interest and because
of the rapid increase of our population. In 1860, just prior to the
institution of our internal-revenue system, our population but slightly
exceeded 30,000,000; by the census of 1880 it is now found to exceed
50,000,000. It is estimated that even if the annual receipts and
expenditures should continue as at present the entire debt could be
paid in ten years.

In view, however, of the heavy load of taxation which our people have
already borne, we may well consider whether it is not the part of wisdom
to reduce the revenues, even if we delay a little the payment of the
debt.

It seems to me that the time has arrived when the people may justly
demand some relief from their present onerous burden, and that by due
economy in the various branches of the public service this may readily
be afforded.

I therefore concur with the Secretary in recommending the abolition
of all internal-revenue taxes except those