mass of legislation relating to our internal affairs was intended to be left where the Federal Convention found it—­in the State governments.  Nothing is clearer, in my view, than that we are chiefly indebted for the success of the Constitution under which we are now acting to the watchful and auxiliary operation of the State authorities.  This is not the reflection of a day, but belongs to the most deeply rooted convictions of my mind.  I can not, therefore, too strongly or too earnestly, for my own sense of its importance, warn you against all encroachments upon the legitimate sphere of State sovereignty.  Sustained by its healthful and invigorating influence the federal system can never fall.

In the collection of the revenue the long credits authorized on goods imported from beyond the Cape of Good Hope are the chief cause of the losses at present sustained.  If these were shortened to six, nine, and twelve months, and warehouses provided by Government sufficient to receive the goods offered in deposit for security and for debenture, and if the right of the United States to a priority of payment out of the estates of its insolvent debtors were more effectually secured, this evil would in a great measure be obviated.  An authority to construct such houses is therefore, with the proposed alteration of the credits, recommended to your attention.

It is worthy of notice that the laws for the collection and security of the revenue arising from imposts were chiefly framed when the rates of duties on imported goods presented much less temptation for illicit trade than at present exists.  There is reason to believe that these laws are in some respects quite insufficient for the proper security of the revenue and the protection of the interests of those who are disposed to observe them.  The injurious and demoralizing tendency of a successful system of smuggling is so obvious as not to require comment, and can not be too carefully guarded against.  I therefore suggest to Congress the propriety of adopting efficient measures to prevent this evil, avoiding, however, as much as possible, every unnecessary infringement of individual liberty and embarrassment of fair and lawful business.

On an examination of the records of the Treasury I have been forcibly struck with the large amount of public money which appears to be outstanding.  Of the sum thus due from individuals to the Government a considerable portion is undoubtedly desperate, and in many instances has probably been rendered so by remissness in the agents charged with its collection.  By proper exertions a great part, however, may yet be recovered; and whatever may be the portions respectively belonging to these two classes, it behooves the Government to ascertain the real state of the fact.  This can be done only by the prompt adoption of judicious measures for the collection of such as may be made available.  It is believed that a very large amount has been lost through the inadequacy of the means