It is a matter for congratulation that the business of the country has been so prosperous during the past year as to yield by taxation a large surplus of income to the Government.  If the revenue laws remain unchanged, this surplus must year by year increase, on account of the reduction of the public debt and its burden of interest and because of the rapid increase of our population.  In 1860, just prior to the institution of our internal-revenue system, our population but slightly exceeded 30,000,000; by the census of 1880 it is now found to exceed 50,000,000.  It is estimated that even if the annual receipts and expenditures should continue as at present the entire debt could be paid in ten years.

In view, however, of the heavy load of taxation which our people have already borne, we may well consider whether it is not the part of wisdom to reduce the revenues, even if we delay a little the payment of the debt.

It seems to me that the time has arrived when the people may justly demand some relief from their present onerous burden, and that by due economy in the various branches of the public service this may readily be afforded.

I therefore concur with the Secretary in recommending the abolition of all internal-revenue taxes except those upon tobacco in its various forms and upon distilled spirits and fermented liquors, and except also the special tax upon the manufacturers of and dealers in such articles.  The retention of the latter tax is desirable as affording the officers of the Government a proper supervision of these articles for the prevention of fraud.  I agree with the Secretary of the Treasury that the law imposing a stamp tax upon matches, proprietary articles, playing cards, checks, and drafts may with propriety be repealed, and the law also by which banks and bankers are assessed upon their capital and deposits.  There seems to be a general sentiment in favor of this course.

In the present condition of our revenues the tax upon deposits is especially unjust.  It was never imposed in this country until it was demanded by the necessities of war, and was never exacted, I believe, in any other country even in its greatest exigencies.  Banks are required to secure their circulation by pledging with the Treasurer of the United States bonds of the General Government.  The interest upon these bonds, which at the time when the tax was imposed was 6 per cent, is now in most instances 3-1/2 per cent.  Besides, the entire circulation was originally limited by law and no increase was allowable.  When the existing banks had practically a monopoly of the business, there was force in the suggestion that for the franchise to the favored grantees the Government might very properly exact a tax on circulation; but for years the system has been free and the amount of circulation regulated by the public demand.

The retention of this tax has been suggested as a means of reimbursing the Government for the expense of printing and furnishing the circulating notes.  If the tax should be repealed, it would certainly seem proper to require the national banks to pay the amount of such expense to the Comptroller of the Currency.