Close investigation and study needed to make definite recommendations in this regard will consume at least two years.  I note with much satisfaction the organization in the Senate of a Committee on Public Expenditures, charged with the duty of conducting such an investigation, and I tender to that committee all the assistance which the executive branch of the Government can possibly render.

Frauds in the collection of customs.

I regret to refer to the fact of the discovery of extensive frauds in the collections of the customs revenue at New York City, in which a number of the subordinate employees in the weighing and other departments were directly concerned, and in which the beneficiaries were the American Sugar Refining Company and others.  The frauds consisted in the payment of duty on underweights of sugar.  The Government has recovered from the American Sugar Refining Company all that it is shown to have been defrauded of.  The sum was received in full of the amount due, which might have been recovered by civil suit against the beneficiary of the fraud, but there was an express reservation in the contract of settlement by which the settlement should not interfere with, or prevent the criminal prosecution of everyone who was found to be subject to the same.

Criminal prosecutions are now proceeding against a number of the Government officers.  The Treasury Department and the Department of Justice are exerting every effort to discover all the wrongdoers, including the officers and employees of the companies who may have been privy to the fraud.  It would seem to me that an investigation of the frauds by Congress at present, pending the probing by the Treasury Department and the Department of Justice, as proposed, might by giving immunity and otherwise prove an embarrassment in securing conviction of the guilty parties.

Maximum and minimum clause in tariff act.

Two features of the new tariff act call for special reference.  By virtue of the clause known as the “Maximum and Minimum” clause, it is the duty of the Executive to consider the laws and practices of other countries with reference to the importation into those countries of the products and merchandise of the United States, and if the Executive finds such laws and practices not to be unduly discriminatory against the United States, the minimum duties provided in the bill are to go into force.

Unless the President makes such a finding, then the maximum duties provided in the bill, that is, an increase of twenty-five per cent. ad valorem over the minimum duties, are to be in force.  Fear has been expressed that this power conferred and duty imposed on the Executive is likely to lead to a tariff war.  I beg to express the hope and belief that no such result need be anticipated.