The estimated receipts for the fiscal year ending June 30, 1894, are $490,121,365.38, and the estimated appropriations $457,261,335.33, leaving an estimated surplus of receipts over expenditures of $32,860,030.05.  This does not include any payment to the sinking fund.  In the recommendation of the Secretary that the sinking-fund law be repealed I concur.  The redemption of bonds since the passage of the law to June 30, 1892, has already exceeded the requirements by the sum of $990,510,681.49.  The retirement of bonds in the future before maturity should be a matter of convenience, not of compulsion.  We should not collect revenue for that purpose, but only use any casual surplus.  To the balance of $32,860,030.05 of receipts over expenditures for the year 1894 should be added the estimated surplus at the beginning of the year, $20,992,377.03, and from this aggregate there must be deducted, as stated by the Secretary, about $44,000,000 of estimated unexpended appropriations.

The public confidence in the purpose and ability of the Government to maintain the parity of all of our money issues, whether coin or paper, must remain unshaken.  The demand for gold in Europe and the consequent calls upon us are in a considerable degree the result of the efforts of some of the European Governments to increase their gold reserves, and these efforts should be met by appropriate legislation on our part.  The conditions that have created this drain of the Treasury gold are in an important degree political, and not commercial.  In view of the fact that a general revision of our revenue laws in the near future seems to be probable, it would be better that any changes should be a part of that revision rather than of a temporary nature.

During the last fiscal year the Secretary purchased under the act of July 14, 1890, 54,355,748 ounces of silver and issued in payment therefor $51,106,608 in notes.  The total purchases since the passage of the act have been 120,479,981 ounces and the aggregate of notes issued $116,783,590.  The average price paid for silver during the year was 94 cents per ounce, the highest price being $1.02 3/4 July 1, 1891, and the lowest 83 cents March 21, 1892.  In view of the fact that the monetary conference is now sitting and that no conclusion has yet been reached, I withhold any recommendation as to legislation upon this subject.

The report of the Secretary of War brings again to the attention of Congress some important suggestions as to the reorganization of the infantry and artillery arms of the service, which his predecessors have before urgently presented.  Our Army is small, but its organization should all the more be put upon the most approved modern basis.  The conditions upon what we have called the “frontier” have heretofore required the maintenance of many small posts, but now the policy of concentration is obviously the right one.  The new posts should have the proper strategic relations to the only “frontiers” we now