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 over importations 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.

On the 3d of March last an act was passed providing for the appointment of three commissioners to settle private land claims in California.  Three persons were immediately appointed, all of whom, however, declined accepting the office in consequence of the inadequacy of the compensation.  Others were promptly selected, who for the same reason also declined, and it was not until late in the season that the services of suitable persons could be secured.  A majority of the commissioners convened in this city on the 10th of September last, when detailed instructions were given to them in regard to their duties.  Their first meeting for the transaction of business will be held in San Francisco on the 8th day of the present month.

I have thought it proper to refer to these facts, not only to explain the causes of the delay in filling the commission, but to call your attention to the propriety of increasing the compensation of the commissioners.  The office is one of great labor and responsibility, and the compensation should be such as to command men of a high order of talents and the most unquestionable integrity.