It is interesting to note that the production of our own mines, including those in Alaska, for the calendar year 1914 totaled $94,531,800, an increase of $5,647,400 over the year 1913, and that the production in South African mines was $199,387,707, which is within a few million of the production of 1912 ($208,854,346) and of 1913 ($204,164,279), the record years for that country.

The following table shows the stock of gold coin and bullion in the United States each month from May 1, 1914, giving the increases and decreases as they occurred:

Stock of gold coin and bullion in the United States.

From September 2, 1914, to November 10, 1915-slightly over 14 months-policies have been written on war risks aggregating $89,245,052. The total number of policies written was 1,283, or an average of nearly 100 a month. The total net premiums received by the bureau amounted to $2,127,976.70.

The losses paid aggregate $744,128, being for the Evelyn, Carib, Greenbrier, William P. Frye, and certain Navajo cargo. Salvage of $48,143.68 has been received on account of the Evelyn, however, making the net losses $695,984.32. Possible further salvage remittances are to come. The net losses paid, deducted from the premiums received $2,127,976.70-leave a surplus of premiums received of $1,431, 992.38.

The administration of the bureau has been most economical, the total expenses of organizing, printing, stationery, etc., together with the salaries of the entire force, amounting to only $20,482.91 up to November 1, 1915. The amount appropriated for the expenses being $100,000, there remains a balance of $79,517.09.

The possible outstanding claims are estimated at $250,000, and the total amount of insurance at risk on November 10 was $6,943,480.

1,283 POLICIES ISSUED FROM SEPT. 2, 1914, To Nov. 10, 1915.

Total amount insured_

Premiums on same__

Total amount at risk (on Nov. 10, 1915).

Known losses to date (paid)_

Possible outstanding claims___

Salvage received to date_

Net losses (paid)‒‒‒‒‒‒

Total expenses of bureau to Nov. 1, including salaries of entire

force

Total premiums received__

Net losses paid----

Surplus premiums on hand____

PAN AMERICAN FINANCIAL CONFERENCE.

$89, 245, 052. 00

2, 127, 976. 70

6, 943, 480. 00 744, 128. 00 250,000.00

48, 143. 68

695, 984. 32

20, 482. 91

2, 127, 976. 70 695, 984. 32

1, 431, 992. 38

The diplomatic and consular appropriation bill approved March 4, 1915, authorized the President to extend an invitation to the Governments of Central and South America to be represented by their ministers of finance and leading bankers at a conference with the Secretary of the Treasury in Washington with a view to establishing closer and more satisfactory financial relations between the countries of Central and South America and the United States. It also gave the Secretary of the Treasury authority to invite, in his discretion, representative bankers of the United States to participate in such conference, and appropriated $50,000 for the expenses of the conference and for the entertainment of the foreign conferees.

In pursuance thereof, a conference was held in the city of Washington on the 24th day of May, 1915, in the building of the Pan American Union, at which 18 of the Central and South American Republics were represented. A large number of representative bankers and business men of the United States were invited and attended the conference, which continued its sessions from the 24th to the 29th of May, 1915. A full report of the proceedings has been published and distributed.

I feel confident that results of a very far-reaching and beneficial character have been secured by the work already done, and that additional and highly beneficial results will flow from the work which has been organized and undertaken in connection with the proceedings of the conference. We have an extraordinary opportunity to enlarge our trade interests and financial influence in all of the Central and South American countries, and the relations established between their representatives and those of this country by the Pan American Financial Conference are sure to increase and strengthen

friendly and commercial relations with all of the countries concerned.

I strongly recommend that the Congress make an appropriation of $50,000 for the purpose of holding a second Pan American Financial Conference in the city of Washington in 1917. In my report to the President (copy of which is attached as Exhibit D to this report) I recommended that such a conference be held in 1916, but in view of the fact that it is proposed to have a meeting of the International High Commission, appointed as a result of the action of the Pan American Financial Conference, in Buenos Aires in April, 1916, for the purpose of considering and taking steps to bring about uniformity of laws relating to bills of exchange, commercial paper, bills of lading, uniform classification of merchandise, customs regulations, consular certificates and invoices, port charges, uniform regulations for commercial travelers, etc., it has seemed best to hold the second Pan American Financial Conference in Washington in the year 1917.

All of the steps taken in connection with future financial conferences and the meeting of the International High Commission on Uniformity of Laws in Buenos Aires, in April, 1916, have been taken with the approval of the President and with the cordial cooperation and assistance of the Secretary of State. In fact, a large part of the success of the conference of 1915 has been due to the cordial and effective assistance rendered by the State Department.

The forthcoming meeting in Buenos Aires of the International High Commission on Uniformity of Laws promises results of very great importance to all of the countries involved, as well as to the United States. Nearly all of the Governments of Central and South America have appointed international high commissions to attend the Buenos Aires conference.

I respectfully recommend that a small appropriation be made for the purpose of enabling the United States section of the International High Commission to carry on the important work intrusted to it by the recent Pan American Financial Conference. The sum of $25,000 will, I believe, be sufficient for this purpose.

INCOME TAX.

For the fiscal year ended June 30, 1915, the total receipts from personal income tax were $41,046,162.09, an increase of $12,792,627.24 over the preceding year. The total receipts from corporation income tax for the fiscal year ended June 30, 1915, were $39,144,531.71, a decrease of $3,983,208.18. The increase in the personal income-tax receipts was due in great measure to the fact that the collections for the fiscal year 1915 were for a period of 12 months, whereas the collections for the fiscal year 1914 were for 10 months, and also to the

further fact that the administration of the law is now working more smoothly.

The decrease in the income tax from corporations is due, in large measure, to the effect of the European war, which has reduced the operations of some our largest corporations in the belligerent countries of Europe, and also to the disturbances in Mexico, which have had a similar effect upon some of our large corporations doing business in that country, and also to the reflex action upon our own domestic situation occasioned by the great conflict in Europe.

There has been a decided improvement, both in the administration of the income-tax law and in the general knowledge and understanding of the law by the public, which has simplified matters to a large extent, but there is still room for improvement. Many inaccurate returns are made, some deliberately and some ignorantly, and there are, without doubt, wholesale evasions of the law throughout the country. The remedy for this is to clarify and strengthen the law where needed and to provide a larger and more effective field force for the investigation and checking up of income-tax returns and for the discovery of those who are liable for the tax and have failed to make

returns.

It is absolutely certain that the Government is losing, through inaccurate returns and evasions of the law, a sum many times greater than the cost of the necessary field force to investigate and check the returns and to bring to account those who are failing to make returns as required by law.

Let us consider the matter of checking the returns: The total number of personal returns for income tax for the fiscal year ended June 30, 1915, was 357,515. The total number of corporation returns for the same year was 338,860. Of these returns the preliminary examination in the office of the Commissioner of Internal Revenue has shown that 5 per cent of the individual returns and 15 per cent of the corporation returns reveal on their face that they require an investigation. Even this small percentage of the returns is largely in excess of the number the available field force now authorized will be able to examine.

For the fiscal year 1915 there was a total of 295,723 personal and corporation income-tax returns to be examined, and with the present force of 274 field officers, making examinations at the same average rate as experience has shown that they are able to go, it will require three and a half years for this force to complete the examination of the transcripts that will be sent to the agents for examination in the present fiscal year. With the accumulations of succeeding years, this force, unless greatly enlarged, will be unable to keep up with the essential work that must be done if we are to effectively administer the income-tax law.

The Commissioner of Internal Revenue has informed me that, taking the total number of agents' reports of examinations of personal returns for the months of June, July, August, and September, 1915, as a basis for calculation, 63 per cent of the returns examined. showed that an additional average tax of $150.07 was due the Government on each return. On this basis the 31,101 returns yet to be examined would produce $4,667,327 additional tax.

Taking the total number of agents' reports of examinations of corporation returns for the months of June, July, August, and September, 1915, as a basis for calculation, 63 per cent of the returns examined showed that an additional average tax of $78.95 was due the Government on each return. On this basis the 264,622 returns yet to be examined should produce $20,891,906.90.

I do not, of course, claim that the deductions here made are conclusive, but they demonstrate that the returns of individuals and corporations are inaccurate to such a degree that very much additional tax will be collectible as soon as the returns are investigated and checked by competent men, and that it is in the interest of the Government that a sufficiently large field force shall be created to do this work thoroughly and promptly.

It is figured that the field service was maintained for the fiscal year ended June 30, 1915, at an approximate cost of 24 per cent of the additional assessments made by reason of its activities. For the period from June 1 to September 30, 1915, however, the cost of investigations in the field has been decreased to approximately 14 per cent. This decrease in cost of practically 10 per cent has been brought about by the elimination from the field personnel of those not adapted to the service and the increased efficiency that a longer experience has given to those retained.

Such investigations and accounting have the double effect of educating taxpayers to the law itself and showing them how their accounts should be kept to enable them to make accurate returns to the Commissioner of Internal Revenue. It also serves the purpose of putting all taxpayers upon notice that the Government has a sufficiently large and competent force in the field to examine the returns.

The Commissioner of Internal Revenue has submitted an estimate of an increase for the income-tax field force, and I earnestly recommend that it be allowed. I am sure that as a result of such an increase the cost thereof will be returned to the Treasury several times over, to say nothing of the increased efficiency that will result in the administration of the income-tax law.

The employees of the department engaged in the enforcement of the income-tax law have been told that they must administer this law courteously, but firmly. As it is a new law, and in many ways a complex law, the department has exercised the largest possible degree