n of moneys not needed for public uses imposes an
unnecessary burden upon our people, and the presence of so large a
surplus in the public vaults is a disturbing element in the conduct
of private business. It has called into use expedients for putting
it into circulation of very questionable propriety. We should not
collect revenue for the purpose of anticipating our bonds beyond the
requirements of the sinking fund, but any unappropriated surplus in the
Treasury should be so used, as there is no other lawful way of returning
the money to circulation, and the profit realized by the Government
offers a substantial advantage.

The loaning of public funds to the banks without interest upon the
security of Government bonds I regard as an unauthorized and dangerous
expedient. It results in a temporary and unnatural increase of the
banking capital of favored localities and compels a cautious and gradual
recall of the deposits to avoid injury to the commercial interests. It
is not to be expected that the banks having these deposits will sell
their bonds to the Treasury so long as the present highly beneficial
arrangement is continued. They now practically get interest both upon
the bonds and their proceeds. No further use should be made of this
method of getting the surplus into circulation, and the deposits now
outstanding should be gradually withdrawn and applied to the purchase of
bonds. It is fortunate that such a use can be made of the existing
surplus, and for some time to come of any casual surplus that may exist
after Congress has taken the necessary steps for a reduction of the
revenue. Such legislation should be promptly but very considerately
enacted.

I recommend a revision of our tariff law both in its administrative
features and in the schedules. The need of the former is generally
conceded, and an agreement upon the evils and inconveniences to be
remedied and the best methods for their correction will probably not be
difficult. Uniformity of valuation at all our ports is essential, and
effective measures should be taken to secure it. It is equally desirable
that questions affecting rates and classifications should be promptly
decided.

The preparation of a new schedule of customs duties is a matter of great
delicacy because of its direct effect upon the business of the country,
and of great difficulty by reason of the wide divergence of opinion as
to the objects that may properly be promoted by such legislati