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officer to more accurately audit the receipts of the collector and check the collector's liquidations of entries.

Second. Reformed procedure in the receipt, delivery, and handling of packages in the appraiser's stores, whereby the system in operation at New York was extended to Philadelphia and Chicago and arrangements made for the adoption of such system in the near future at the port of Boston. Necessary steps are also being taken to install this procedure at New Orleans, and the matter is under consideration at Baltimore and San Francisco. This has already resulted in the saving of several thousand dollars per annum in operating expenses, and when the system has been fully instituted at all of the appraisers' stores a reduction in operating expenses of approximately $100,000 per annum is estimated. Thus the same volume of business will be handled at a cost of approximately $100,000 less than formerly, and the time in which packages pass through the appraisers' stores will be reduced from three days to one day.

Third. Extensive experiments were made with a new method compiling statistics of imports and exports with a view to lessening the time required to compile and publish such statistics, increasing their accuracy and reducing the cost of operations, and the system was put into effect on July 1, 1915. While the actual cost of operations under the new system can not be stated, because not yet determined, it is estimated that it will be less than $100,000 per annum, whereas the cost of compiling statistics for the fiscal year 1915 in the Customs Service was $197,390.

The conferences of collectors of customs held in 1913 and 1914 made the following recommendations for changes in the Revised Statutes relating to customs procedure:

1. The amendment of sections 2899 and 2901 to provide for the examination of a less percentage of packages than 1'in 10; to make the giving of a bond for redelivery obligatory, and to provide for the giving of one bond on entry for the redelivery of unexamined packages, the production of consular invoices, etc., instead of the many bonds now required.

2. The repeal of sections 1790 and 2693, which require every person in the Customs Service to take an oath every time he receives his pay that neither he nor any member of his family has received, directly or indirectly, any money or compensation of any description whatever, nor any promises for the same, for services rendered or to be rendered in connection with the customs, and that he has not purchased, for like services or acts, any merchandise at less than the retail market price thereof, and that he has not paid, deposited, or assigned any reward or compensation for his office or employment, or contracted therefor.

3. That section 2777, requiring a vessel with cargo in part for this country and in part for foreign countries to give a bond for unlading its American cargo before proceeding foreign, and likewise section 2782, requiring a similar bond to be given by a vessel proceeding from one district to another, be repealed.

4. The repeal of section 2775, which requires a special report of distilled spirits and wines imported in a vessel.

5. That the naval officer be authorized to settle the accounts of collectors at naval-office ports.

All of the above recommendations have merit. The weakness of section 2899, Revised Statutes, is, that any importer may refuse to give bond and thus compel the customs authorities to store all of his inerchandise, pending examination and appraisement of the same, free of cost, whi

the customs officials have not the facilities to do. The provision that the packages delivered shall not be opened except in the presence of an inspector of customs and with the consent of the collector or surveyor is absurd. It was practicable in 1830, but could not possibly be applied to the present volume of imports. The bond provided by this statute is known as the 10-day redelivery bond. In addition thereto there is a form of bond required for the production of consular invoice, a bond for the production of owner's declaration, a bond for the production of certificates of origin on some classes of goods, a bond for the production of certificate of exportation (on American goods returned), a bond under the pure-food law (for food products), a bond under the meat-inspection law (for meats), and various other bonds, in all about 20, required to be given upon entry to meet particular conditions. It frequently happens that as many as four or five bonds are given on the same entry. Among them all there is not a single bond that adequately protects the Government for the payment of the increased or additional duties found due upon liquidation. Boston has such a bond known as the “collection bond.” It is not provided for by law or regulation, and I do not believe that it could be enforced. If we had a provision for one bond on entry, the condition of which would be obligatory, it would save us considerable operating expense, relieve importers of a tremendous lot of red tape, and would insure the collection of the duties due; and coupled with this requirement the statute should be amended so as to leave the percentage of the packages to be opened and examined by the appraiser to be fixed by regulations of the Secretary of the Treasury, as it is advisable in some cases to examine 100 per cent, and in other cases 1 out of 100 would suffice.

The statute requiring a clerk to swear before receiving his salary that he has not shared or agreed to share the same with any one else was passed in 1823. It may have been necessary in those times, but it is not now. The statute requiring persons in the Customs Service to make an affidavit that they have not indulged in illegitimate or dishonest practices was passed in 1866. It has never had any practicable effect, so far as I can see, and the procedure required by these statutes is such as to instill in the minds of the officers and employees in the Customs Service a lessening in their respect for the Government and its functions. A form of certificate to be signed by each customs employee who receives his pay, such as now used in the Treasury Department, would be sufficient.

Sections 2777 and 2782, Revised Statutes, requiring what is known as residue cargo bonds, were passed in 1799. Under present conditions they are almost absurd and impose an unnecessary restriction upon commerce and an absolutely useless expense upon the Government. In 1799 commerce was carried on in small boats of from 100 to 500 tons, and smuggling was a regular occupation. These boats after unloading a part of their cargo, and ostensibly clearing for another country, or for another district in this country, might drop in almost anywhere and unload some cargo before proceeding. The


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telegraph, telephone, wireless, railroads, and thickly settled country have changed all this. A vessel may come in the Chesapeake and go all the way to Baltimore without giving any bond, but if it stops and unloads two or three cases at Newport News before going on it must give a bond. A vessel from Liverpool to Habana may stop at Norfolk two or three days to take on bunker coal without giving any bond, but if it has one single package for Norfolk it must give a bond with a penalty twice the duties upon her Habana cargo for all that cargo. The law results in such absurdities as to make our customs procedure a mere mass of useless red tape in the eyes of shipmasters.

Section 2775, Revised Statutes, was also passed in 1799. Its purpose is problematical. The report made is a mere duplicate of that part of the vessel's manifest covering wines and distilled spirits. Whatever the purpose of the law, it has absolutely no effect at this time.

Under section 2626, Revised Statutes, the naval officers are re-
quired, among other things, to examine the collectors' abstracts of
duties and other accounts of receipts, bonds, and expenditures, and
certify the same, if found correct, while under the act of July 31,
1894, commonly known as the “Dockery Act," the Auditor for the
Treasury Department is required to audit the accounts of collectors
of customs. Consequently there results considerable duplications of
work and a great deal of controversy as to the scope of the respective
duties of the naval officer and Auditor for the Treasury. The cost
of the naval offices at the present time is approximately $375,000 per
annum, which is considerably greater than the entire cost of the office
of the Auditor for the Treasury Department. The work performed
in the naval offices is duplicated at the present time in the auditor's
office in part only, and the subject most discussed is whether such
duplication should be extended to all accounts or whether it should be
eliminated entirely. I recommend that legislation be enacted to
eliminate the duplication by providing for the settlement of accounts
of collectors at naval offices upon certification of the naval officer of
customs at those ports.

Chief Division of Customs.


The following is a summary of the reports of bureaus and divisions of the Treasury Department for the fiscal year ended June 30, 1915, with the exception that the figures in relation to public moneys are brought down to November 1, 1915.


The financial transactions of the Government have been seriously and adversely affected by the European war. This condition was anticipated at the beginning of the fiscal year, and to offset its effect upon the income of the Government an emergency revenue act was

passed by Congress, but even this measure has not made good the reduction in receipts due mainly to the falling off in importations. The ordinary revenues for the fiscal year 1915 were $697,910,827.58, notwithstanding a decrease of $82,533,342.30 in receipts from customs as compared with those of 1914; the increased receipts from internal revenue (ordinary), corporation and income tax, and miscellaneous sources was $45,771,003.17, so that the net decrease from all ordinary sources for the year was $36,762,339.13.

The total ordinary disbursements were $731,399,759.11, which by classified comparison with 1914 shows a net increase in the total of civil and miscellaneous accounts, the Naval Establishment, the Indian Service, and interest on the public debt, while decreased disbursements are recorded in the Military Establishment and on account of pensions. The net result on ordinary expenditures was an increase of $31,145,269.40. The deficit on ordinary transactions for the year was $33,488,931.53.

The expenses incurred in the construction of the Panama Cana during the year, amounting to $29,187,042.22, were paid out of the general fund of the Treasury, and the total net balance so expended to June 30, 1915, was $219,471,636.48.

Deposits for postal savings bonds, authorized by the act of June 25, 1910, were received during the fiscal year 1915 to the amount of $933,540. Under the provisions of the act of July 14, 1890, deposits of lawful money of the United States to retire national-bank notes were received amounting to $21,553,415, which, with the deposits for postal savings bonds, aggregate $22,486,955 in actual cash received on account of the public debt, while the cash disbursements on account of the principal of matured loans and fractional currency were $47,533, and for national-bank notes canceled and retired $17,205,958, a total disbursement for the debt of $17,253,491. The net result was an excess of receipts of $5,233,464.

On June 30, 1915, the balance in the general fund was $104,170,105.78, a decrease of $57,442,509.75 as compared with that of the preceding year.

The trust funds, gold and silver coins held to redeem outstanding notes and certificates, increased $95,158,120, and amounted to $1,669,421,989 at the close of the fiscal year. The increase in gold was $92,734,120, and in silver $2,424,000.

The redemptions from the reserve fund during the fiscal year were, in United States notes, $49,599,925, and in Treasury notes, $1,740, making a total of $49,601,665. The redeemed notes were exchanged for gold coin each day in accordance with the provisions of the act of March 14, 1900, and thereby the reserve was maintained at the fixed amount. The reserve fund was increased by $2,977,036.63, being the amount of tax collected during the year on additional circulation issued under the act of May 30, 1908.

The gold in the Treasury at the close of the fiscal year 1915 amounted to $1,382,959,989.18, of which $1,003,825,849.38 was in coin. Set apart for the respective uses, it was held on the following accounts: Reserve fund, $152,977,036.63; trust funds (for redemption of gold certificates in actual circulation), $1,135,213,619; and in general fund belonging to Treasury), $94,769,333.55.

The imports of gold during the year were $171,568,755, the exports $146,224,148, and the net excess of imports $25,344,607.

The United States bonds pledged to secure bank circulation amounted to $736,024,190 on June 30, 1915, a decrease of $4,772,720 as compared with those of 12 months earlier. United States bonds and other securities, amounting to $54,854,619, were held to secure public deposits in national banks. Under the provisions of the act of June 25, 1910, establishing the Postal Savings System, the Treasurer of the United States held in trust, as security for deposits in postal savings depositaries, bonds and securities amounting to $91,321,801.43 on June 30, 1915.

The general stock of money in the United States at the close of the fiscal year 1915 amounted to $3,989,456,186, an increase of $251,167,315 as compared with that of the preceding year. There was a noticeable increase in the element of gold, which took on a growth of $94,882,381; the silver coins advanced in volume by $5,861,740. United States notes remained, under the law, unchanged. Treasury notes decreased $2,439,000, being replaced by silver dollars. Nationalbank notes received an increment of $68,601,694, and Federal reserve notes (a new kind of money issued during the year), $84,260,500. The money in circulation increased in volume by $167,204,147 and amounted to $3,569,219,574 on June 30, 1915. The circulation per capita was $35.44 and the share of gold to whole circulation 46.59 per cent.

During the earlier months of the fiscal year an anomalous condition prevailed throughout the country owing to the outbreak of the European war, and for a time all business and financial operations were seriously in danger. Through the prompt and effective action of the Treasury Department, and with the cordial and intelligent cooperation of the banking and business interests of the country, the danger was averted. The Secretary of the Treasury, under the provisions of existing law, authorized the issue of emergency currency to national banks upon their application. The banks were very prompt in making application for the currency, and during the period from August to November, inclusive, more than $382,500,000 of such currency was issued, thus affording a medium that entered at once into circulation, and it contributed largely to the restoration of confidence and the general revival of business throughout the country. This currency was gradually retired after it had served the purpose for which it was issued. The national-bank notes (including the emergency currency) in circulation on November 2, 1914, amounted to $1,083,519,080, and by the close of the fiscal year the amount was reduced to $785,393,047.

During the fiscal year 1915 national-bank notes amounting to $782,633,567 were presented for redemption. This sum was 83 per cent of the average circulation outstanding, and was $75,876,965 more than was received during the previous year, and was also the largest amount presented in a single year since the organization of the National-Bank Redemption Agency in 1874. The largest amount presented during a month was $132,509,108, in January; the smallest, $26,713,805, in September. The expenses incurred for redemption of national-bank notes during the year amounted to $498,328.60, and have been assessed upon the banks in proportion to their notes redeemed at the rate of $0.65147 per $1,000.

The notes and certificates of United States paper currency issued during the fiscal year numbered 280,174,317 pieces, of the total value

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