The releases required by law to be deposited in the Treasury not having been filed there, the remaining five millions have not been issued.  This last amount of the stock will be withheld from Texas until the conditions upon which it is to be delivered shall be complied with by the creditors of that State, unless Congress shall otherwise direct by a modification of the law.

In my last annual message, to which I respectfully refer, I stated briefly the reasons which induced me to recommend a modification of the present tariff by converting the ad valorem into a specific duty wherever the article imported was of such a character as to permit it, and that such a discrimination should be made in favor of the industrial pursuits of our own country as to encourage home production without excluding foreign competition.

The numerous frauds which continue to be practiced upon the revenue by false invoices and undervaluations constitute an unanswerable reason for adopting specific instead of ad valorem duties in all cases where the nature of the commodity does not forbid it.  A striking illustration of these frauds will be exhibited in the report of the Secretary of the Treasury, showing the custom-house valuation of articles imported under a former law, subject to specific duties, when there was no inducement to undervaluation, and the custom-house valuations of the same articles under the present system of ad valorem duties, so greatly reduced as to leave no doubt of the existence of the most flagrant abuses under the existing laws.  This practical evasion of the present law, combined with the languishing condition of some of the great interests of the country, caused by overimportations and consequent depressed prices, and with the failure in obtaining a foreign market for our increasing surplus of breadstuffs and provisions, has induced me again to recommend a modification of the existing tariff.

The report of the Secretary of the Interior, which accompanies this communication, will present a condensed statement of the operations of that important Department of the Government.

It will be seen that the cash sales of the public lands exceed those of the preceding year, and that there is reason to anticipate a still further increase, notwithstanding the large donations which have been made to many of the States and the liberal grants to individuals as a reward for military services.  This fact furnishes very gratifying evidence of the growing wealth and prosperity of our country.

Suitable measures have been adopted for commencing the survey of the public lands in California and Oregon.  Surveying parties have been organized and some progress has been made in establishing the principal base and meridian lines.  But further legislation and additional appropriations will be necessary before the proper subdivisions can be made and the general land system extended over those remote parts of our territory.