On examining the expenditures of the last five years it will be seen that the average, deducting payments on account of the public debt and $10,000,000 paid by treaty to Mexico, has been but about $48,000,000.  It is believed that under an economical administration of the Government the average expenditure for the ensuing five years will not exceed that sum, unless extraordinary occasion for its increase should occur.  The acts granting bounty lands will soon have been executed, while the extension of our frontier settlements will cause a continued demand for lands and augmented receipts, probably, from that source.  These considerations will justify a reduction of the revenue from customs so as not to exceed forty-eight or fifty million dollars.  I think the exigency for such reduction is imperative, and again urge it upon the consideration of Congress.

The amount of reduction, as well as the manner of effecting it, are questions of great and general interest, it being essential to industrial enterprise and the public prosperity, as well as the dictate of obvious justice, that the burden of taxation be made to rest as equally as possible upon all classes and all sections and interests of the country.

I have heretofore recommended to your consideration the revision of the revenue laws, prepared under the direction of the Secretary of the Treasury, and also legislation upon some special questions affecting the business of that Department, more especially the enactment of a law to punish the abstraction of official books or papers from the files of the Government and requiring all such books and papers and all other public property to be turned over by the outgoing officer to his successor; of a law requiring disbursing officers to deposit all public money in the vaults of the Treasury or in other legal depositories, where the same are conveniently accessible, and a law to extend existing penal provisions to all persons who may become possessed of public money by deposit or otherwise and who shall refuse or neglect on due demand to pay the same into the Treasury.  I invite your attention anew to each of these objects.

The Army during the past year has been so constantly employed against hostile Indians in various quarters that it can scarcely be said, with propriety of language, to have been a peace establishment.  Its duties have been satisfactorily performed, and we have reason to expect as a result of the year’s operations greater security to the frontier inhabitants than has been hitherto enjoyed.  Extensive combinations among the hostile Indians of the Territories of Washington and Oregon at one time threatened the devastation of the newly formed settlements of that remote portion of the country.  From recent information we are permitted to hope that the energetic and successful operations conducted there will prevent such combinations in future and secure to those Territories an opportunity to make steady progress in the development of their agricultural and mineral resources.