I commend to your attention the Secretary’s views in respect to the likelihood of a serious contraction of this circulation, and to the modes by which that result may, in his judgment, be averted.

In respect to the coinage of silver dollars and the retirement of silver certificates, I have seen nothing to alter but much to confirm the sentiments to which I gave expression last year.

A comparison between the respective amounts of silver-dollar circulation on November 1, 1881, and on November 1, 1882, shows a slight increase of a million and a half of dollars; but during the interval there had been in the whole number coined an increase of twenty-six millions.  Of the one hundred and twenty-eight millions thus far minted, little more than thirty-five millions are in circulation.  The mass of accumulated coin has grown so great that the vault room at present available for storage is scarcely sufficient to contain it.  It is not apparent why it is desirable to continue this coinage, now so enormously in excess of the public demand.

As to the silver certificates, in addition to the grounds which seemed last year to justify their retirement may be mentioned the effect which is likely to ensue from the supply of gold certificates for whose issuance Congress recently made provision, and which are now in active circulation.

You can not fail to note with interest the discussion by the Secretary as to the necessity of providing by legislation some mode of freeing the Treasury of an excess of assets in the event that Congress fails to reach an early agreement for the reduction of taxation.

I heartily approve the Secretary’s recommendation of immediate and extensive reductions in the annual revenues of the Government.

It will be remembered that I urged upon the attention of Congress at its last session the importance of relieving the industry and enterprise of the country from the pressure of unnecessary taxation.  It is one of the tritest maxims of political economy that all taxes are burdensome, however wisely and prudently imposed; and though there have always been among our people wide differences of sentiment as to the best methods of raising the national revenues, and, indeed, as to the principles upon which taxation should be based, there has been substantial accord in the doctrine that only such taxes ought to be levied as are necessary for a wise and economical administration of the Government.  Of late the public revenues have far exceeded that limit, and unless checked by appropriate legislation such excess will continue to increase from year to year.  For the fiscal year ended June 30, 1881, the surplus revenue amounted to $100,000,000; for the fiscal year ended on the 30th of June last the surplus was more than one hundred and forty-five millions.

The report of the Secretary shows what disposition has been made of these moneys.  They have not only answered the requirements of the sinking fund, but have afforded a large balance applicable to other reductions of the public debt.