In place of the above bonds there have been issued bonds bearing interest as follows: making an annual saving hereafter in the interest charge on account. of refunding operations of $19,900,846 50. The following-described bonds will mature in 1880 and 1881: Of these bonds, the loan of February 8, 1861, maturing December 31, 1880, is payable upon the demand of the holders, and can probably be provided for from the surplus revenues. Under the refunding acts of July 14, 1870, and January 20, 1871, bonds for refunding purposes were authorized in the amount of $1,500,000,000. Of this amount there have been issued, as above stated, $1,395,345,950, leaving available for future refunding operations $104,654,050. It is respectfully suggested that authority be given at the present session of Congress to issue, sell, and dispose of, at not less than par in coin, four per cent. bonds of the description set forth in the said act of July 14, 1870, and refunding certificates of the description set forth in the act of February 26, 1879, with like qualities, privileges, and exemptions, except as hereinafter stated, to the extent necessary to redeem the bonds falling due on or before July 1, 1881, above described, and to use the proceeds for that purpose. It is hoped that the advancing credit of the country will enable the Secretary to sell such bonds and certificates at a premium, but it seems better to maintain the general conditions of the four per cent. bond rather than to undertake to sell a bond at lower interest. The four per cent. consol is now universally known. The rate of interest is as low as will generally maintain the bond at par, and the premium will measure its advance above par at favorable periods. The certificates should bear the same rate and be sold on the same terms as the bonds. It is important that the authority granted should include the power to refund, from the passage of the act at the present session, and to prepay the excess of interest on the bond to be refunded prior to its maturity. The present is believed to be an exceptionally favorable time for such refunding. THE NATIONAL BANKS. The report of the Comptroller of the Currency gives complete statistics relative to the operations of the national-banking system from its organization until the present time. The number of banks in operation on October 2 of the present year, the date of their last reports, was 2,048, and the aggregate capital, $454,067,365; surplus, $114,786,528; individual deposits, $719,737,568; specie, including United States coin certificates, $42,173,731 23; legal-tender notes, including United States certificates, $95,973,446; loans, $875,013,107. The total circulation outstanding on November 1 was $337,181,418. Among the subjects discussed in the report are the relations which have existed between the national banks and the Government in the resumption of specie payments, and in the funding of the public debt. In both of these important financial operations the co-operation of the national banks has been of essential service to the Government. The banks, in the aggregate, have constantly kept on hand, as reserves, nearly one-fourth of the entire amount of legal-tender notes outstanding, which, together with the coin, is much in excess of the amount of the reserves required by law. They have constantly held as security for their circulating-notes, and for Government deposits and other purposes, more than one-fifth of the interest-bearing debt of the United States. They have maintained their legal reserves in the Treasury for the redemption of their circulating-notes, and such redemption has been made without failure or delay at their expense. In this mode exchanges have been made between all parts of the country at the lowest possible rates. The effect of the business depression prevalent from 1873, until the resumption of specie payments, upon the national banks, is shown in the losses which they have sustained and the dividends which many have been compelled to pass; also by the noticeable diminution, from year to year, in the aggregate surplus. The aggregate capital and deposits of banks, other than national, is also given; and such other information, in reference to these banks, as could be obtained from the officers who have charge of the execution of the banking laws in the different States. The very large taxes paid by national banks to the National, State, and municipal authorities, have been a great aid in relieving other property from the burden of taxation, and, in the aggregate, are more than the interest at four per cent. on their entire circulation. Thus the large amount of non-taxable United States bonds held by them became taxable, and these taxes are in effect paid for the franchise they enjoy of issuing circulating-notes. . The cost of liquidating the affairs of national banks which have been placed in the hands of receivers since the establishment of the system is, for the first time, given in the report, and will serve to correct the impression, which has to some extent prevailed, that too great a portion of the assets of such banks have been expended in the settlement of their affairs. Tables are also given showing the loss to depositors and also other creditors through the insolvency of national banks; and these losses are compared with similar losses incurred by the creditors of insolvent banks other than national, and the comparison is exceedingly favorable to the national system. The circulation of the banks which, since the passage of the act of January 14, 1875, has largely decreased, is now increasing in its aggregate amount, showing that the system responds promptly to the varying requirements of business. The advantages of this system over any system of banks hitherto devised are that their circulating-notes are secured beyond peradventure of loss; they are of universal credit in the country wherever issued; they are more perfectly protected from counterfeiting; they equalize exchanges between distant parts of the country; they are promptly redeemed on demand at one common place; the banks are subject to a strict and vigilant surveillance by independent officers of the Government; their condition is frequently made known to the public; and they contribute a very large percentage of their profits in the way of taxes. A system of banking that, after an existence of sixteen years, through war and periods of great inflation and great depression, has produced such results, may fairly appeal for the confidence and support of Congress. PUBLIC MONEYS. The monetary transactions of the Government have been conducted through the offices of the United States Treasurer, nine assistant treasurers, five hundred and ten depositaries, and two hundred and twenty-two national-bank depositaries. The receipts of the Government from all sources have amounted during the last year, as shown by warrants, to $1,066,634,827 46, of which $792,807,643 have been received from loans; $137,250,047 70 from customs; $113,561,610 58 from internal revenue; and $23,015,526 18 from sales of land and from miscellaneous sources. These receipts were deposited as follows: In independent-treasury offices...... $413, 363, 508 43 653, 271, 319 03 These transactions have been conducted without loss, and it may be stated that all officers engaged in the collection or safe-keeping of the revenues of the Government have collected and held the moneys without loss until properly transferred or paid out, and that as far as accounts have been adjusted there appear to be no losses by defaults in disbursements, the trifling balances not adjusted being suspended mainly for information or investigation. In this connection attention is invited to the suggestions of the First Comptroller of the Treasury, as set forth in his report, in regard to the importance of prescribing by law the frequency and manner in which the current accounts of the disbursing officers of the Departments should be subjected to investigation, the danger to the Treasury of issuing duplicate bonds in lieu of coupon bonds alleged to have been destroyed, and the importance of defining the word "claim" as used in section 3477, Revised Statutes of the United States, and to other suggestions of that officer. REVENUE FROM CUSTOMS. The disbursements for collecting the revenue from customs for expenses incurred within the following fiscal years, have been as follows: In 1877 ... $6,304, 279 57 In 1878.... In 1879.... 5,525, 787 32 5, 485, 779 03 This shows a reduction for 1878 over 1877 of $778,492 25, and a reduction for 1879 over 1878 of $40,008 29, making a total saving for the two years of $818,500 54. A marked improvement has also occurred during the past year in the collection of the revenue from customs. The revenue under the ad valorem system has fallen short of the amount which should have been collected upon a proper assessment of the real foreign-market value. This was due to a system of undervaluations in the entries at the custom-houses, especially upon goods consigned by foreign manufacturers to agents in the United States. Evidence of such undervaluations has been obtained in many cases, and upon this evidence the invoice prices have been advanced by the local appraisers, and from these advances appeals for reappraisement have been taken in a large number of cases. The number of such reappraisements had at the port of New York for the years ending June 30, from 1875 to 1878, is as follows: The general appraiser at New York states that, according to the reappraisements demanded since the 30th of June last, the total number for the current fiscal year, at that port, will be likely to reach one thousand. The action of the local appraisers has, however, been generally sus tained on the reappraisements, but the embarrassments resulting therefrom show that some method should be adopted by which such questions may be better disposed of than is permitted by the laws now in force. One method suggested is the adoption of specific duties in place of ad valorem. This change could, it is believed, be safely adopted with proper limitations in regard to kid gloves, piece-silk goods, piece velvets, and some other classes of goods which now pay an ad valorem duty, and which constitute the chief ground of dispute as to value between the Government and the importers. Another plan would be to permit the Government, in case of an undervaluation, to take the goods at the invoice price, with a reasonable sum added for freight and other expenses and profit, and then cause sale of the goods to be made on Government account. By a treaty between France and Italy, made some years since, it was provided that goods ascertained by inspection to be undervalued to the extent of five per cent. might be seized and sold by the Government, the importer receiving his own valuation for the goods, together with a profit of five |