From all sources, exclusive of the postal service, the receipts of the Government for the last fiscal year aggregated $560,396,674.  The expenditures for the same period were $506,099,007, the surplus for the fiscal year being $54,297,667.  The indications are that the surplus for the present fiscal year will be very small, if indeed there be any surplus.  From July to November the receipts from customs were, approximately, nine million dollars less than the receipts from the same source for a corresponding portion of last year.  Should this decrease continue at the same ratio throughout the fiscal year, the surplus would be reduced by, approximately, thirty million dollars.  Should the revenue from customs suffer much further decrease during the fiscal year, the surplus would vanish.  A large surplus is certainly undesirable.  Two years ago the war taxes were taken off with the express intention of equalizing the governmental receipts and expenditures, and though the first year thereafter still showed a surplus, it now seems likely that a substantial equality of revenue and expenditure will be attained.  Such being the case it is of great moment both to exercise care and economy in appropriations, and to scan sharply any change in our fiscal revenue system which may reduce our income.  The need of strict economy in our expenditures is emphasized by the fact that we can not afford to be parsimonious in providing for what is essential to our national well-being.  Careful economy wherever possible will alone prevent our income from falling below the point required in order to meet our genuine needs.

The integrity of our currency is beyond question, and under present conditions it would be unwise and unnecessary to attempt a reconstruction of our entire monetary system.  The same liberty should be granted the Secretary of the Treasury to deposit customs receipts as is granted him in the deposit of receipts from other sources.  In my Message of December 2, 1902, I called attention to certain needs of the financial situation, and I again ask the consideration of the Congress for these questions.

During the last session of the Congress at the suggestion of a joint note from the Republic of Mexico and the Imperial Government of China, and in harmony with an act of the Congress appropriating $25,000 to pay the expenses thereof, a commission was appointed to confer with the principal European countries in the hope that some plan might be devised whereby a fixed rate of exchange could be assured between the gold-standard countries and the silver-standard countries.  This commission has filed its preliminary report, which has been made public.  I deem it important that the commission be continued, and that a sum of money be appropriated sufficient to pay the expenses of its further labors.