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Our scheme of taxation, by means of which this needless surplus is taken from the people and put into the public Treasury, consists of a tariff or duty levied upon importations from abroad and internal-revenue taxes levied upon the consumption of tobacco and spirituous and malt liquors.

I recommend that the Congress at its present session reduce the internal-revenue taxes imposed to meet the expenses of the war with Spain. in the sum of thirty millions of dollars. This reduction should be secured by the remission of those taxes which experience has shown to be the most burdensome to the industries of the people.

The blockade had been removed, custom-houses reestablished, and the internal-revenue laws put in force, in order that the people might contribute to the national income. Postal operations had been renewed, and efforts were being made to restore them to their former condition of efficiency.

The expense at the different custom-houses of collecting this increased customs revenue was less than the expense attending the collection of such revenue for the preceding year by $490,608, and the increased receipts of internal revenue were collected at a cost to the Internal-Revenue Bureau $155,944.99 less than the expense of such collection for the previous year.

The internal-revenue system, devised for the support of the war, was all-pervasive in its character, and required for its administration a great number of officers and agents, all removable and appointable at the pleasure of the Executive. The customs' service was correspondingly large, having grown immensely during the war.

Our dutiable imports amounted to $324,635,479, a decrease of $58,156,690 over the preceding year, and importations free of duty amounted to $291,414,175, a decrease from the preceding year of $90,524,068. Internal-revenue receipts exceeded those of the preceding year by $24,212,067.

Our internal-revenue laws and impost system should be so adjusted as to bear most heavily on articles of luxury, leaving the necessaries of life as free from taxation as may be consistent with the real wants of the Government, economically administered.

A tax of 10 cents a pound on tea and 2 cents a pound on coffee would produce a revenue exceeding $12,000,000, and thus enable Congress to repeal a multitude of annoying taxes yielding a revenue not exceeding that sum. The internal-revenue system grew out of the necessities of the war, and most of the legislation imposing taxes upon domestic products under this system has been repealed.

A loose, collarless shirt of transparent material worn by men outside the trousers. 2. A thin, transparent waist with flowing sleeves, worn by women. capitan: "Captain," a title used in addressing or referring to a gobernadorcillo, or a former occupant of that office. carambas: A Spanish exclamation denoting surprise or displeasure. carbineer: Internal-revenue guard.

A modification of the internal-revenue system, by a large reduction in the number of articles now subject to tax, would be followed by results equally advantageous to the citizen and the Government.