By reference to table it will be seen that our average consumption of imports per head, for thirty years has been $5 94. Any material excess over that average, as in the years 1835, '6, and 1839, has been surely followed by the most disastrous results. The imports of the past year have been exceeded in amount only by the year 1836; and, if the official figures could be made to represent the true cost of the imports of the former year, even 1836 would, it is believed, not be an exception. The imports of the first quarter of the present year show an increase of more than $18,000,000 over the corresponding quarter of last year, indicating an importation for the current year, greater, by many millions, than the imports of any previous one, and a consumption per head proportionably larger, whilst the markets abroad indicate no prospect of an increased demand for our exports. These exports, as already stated, consist principally of articles of necessity, and nearly all of them raw materials in their crudest state; and if we therefore wish to occupy the place among commercial nations that our advantages of position and our vast resources warrant, we must greatly increase the amount of those exports. This can only be done by an increase of manufactures. During the past year our exports of cotton have amounted to $71,984,616 While of domestic cotton manufactures we have exported only to the extent of And during the same period the importations of cotton manufactures entered for consumption, have amounted at the foreign valuation to 4,734,424 19,685,936 The exports of cotton from the United States exceed in importance those of any raw material exported from any other country, and at the present time it is our only export that is essential to any other nation; but it is believed to be a mistaken policy for any nation to send its raw materials to distant countries, to be manufactured into fabrics for its own use. Possessing this most useful staple in abundance, and of the best quality, we ought greatly to increase its manufacture, and secure to ourselves a portion of the profits which other countries enjoy therefrom. In order to impress our people with the value of this production of the United States, and the means that it affords of extending our internal and foreign commerce, I subjoin several tables exhibiting in some degree its importance. Table No. shows the value of the exports of raw cotton, and cotton manufactures from the United States for the last five years, and the countries to which the same were sent. From which it will be seen that we exported in The countries which take the largest quantity of our raw cotton are Great Britain and France, and by reference to table No. -, it will be seen that our exports of cotton and cotton manufactures during those years to these countries were as follows: $201,803,592 $19,041 $56,471,495 $3,129 Table No.-, shows the value of the exports of cotton manufactures from the United States and Great Britain in the year 1848, and the countries to which the same were sent. From this table it will be seen that the value of cotton manufactures exported from the United States during that year was And that from Great Britain, the value was $5,718,205 109,777,008 8,291,036 14,477,978 Our records for the fiscal year ending 30th June, 1848, show an importation of cotton manufactures from Great Britain amounting to Which shows how largely Great Britain is dependent upon this manufacture for her commercial prosperity. The United States should share in the profits of manufacturing her. own great staple; and in proportion as we increase the manufacture of this and other materials of which we have an abundant supply, we shall be enabled to command the produce, manufactures, and coin of other nations. Table No. exhibits the exports of cotton from the United States and Great Britain for five years, from 1844 to 1848, inclusive. By a reference to this table, it will be seen that the exports of raw cotton to several countries from Great Britain, exceed those from the United States to the same countries, and that the value of such exports of American raw cotton from Great Britain to the continent of Europe, exceeds the entire exports of American cotton manufactures to the whole world. Our entire export of breadstuffs and provisions to all parts of the world during the past year will scarcely amount to the value of the cotton goods imported and the duties thereon. These tabular statements are intended to show how important an article in the commerce of the world is the cotton of the United States, and if manufactured by our own citizens, how widely our commerce might be extended. Instead of an importation of nearly $20,000,000 in value of cotton manufactures in a single year, our annual exports of those manufactures should be $100,000,000. The warehouses of the United States will not be filled with the products and manufactures of other nations so long as we are content to export our cotton and other raw materials in their crude state, and import the most common articles of clothing. Our policy should be, by every constitutional means, to encourage the manufacture of our own materials, and, so far as their product may be necessary for other nations, to exchange them in their most valuable form, for under the present system the gold obtained from our mines will soon be exhausted in paying for excessive importations. With a profound conviction of their truth, I repeat the opinion and words of my predecessor on this vital subject in his annual communication to Congress at the last session: "All history shows that where are the workshops of the world, there must be the marts of the world, and the heart of wealth, commerce and power." It has been shown by the experience of several years, that the average rate of duties imposed by the present revenue laws is about twentythree per cent. upon the foreign value of our imports, including free as well as dutiable goods. During the last fiscal year, we imported of foreign merchandise, including specie, $178,136,318; and we exported, of domestic products, foreign goods, and specie, $151,898,720, leaving a balance against us of $26,247,598. A large proportion of this balance has doubtless been paid by our domestic stocks, which find a ready sale at this time in European markets. These last, however, as they only postpone a present payment in coin, cannot be expected to liquidate similar balances for coming years, even if it were the wish of the Government to create a large foreign debt of this kind. The impolicy of such a measure will not be questioned, and it is doubtless the true interest of the country to avoid it. In regulating our commerce with foreign nations, we are therefore compelled to take as the true basis of safe importation from all countries, the amount of our own products, which we may reasonably calculate may find a market abroad. It is certain that the increased ability of this country to consume foreign goods, will at this time safely admit a larger importation than in former years; yet the experience of the last year has shown that our imports have been greatly beyond our exports, which last must be regarded as the true measure of our ability to consume, for any given number of years. If upon the large importations of the past year the increase should continue at the same ratio as that of the past quarter, which, as already stated, is $18,000,000, the aggregate amount for the current fiscal year ending 30th June, 1851, will not fall much short of $250,000,000. A survey of the markets of the world, it is believed, furnishes no reason to expect that our exportations will exceed those of the last year, which we have seen were a fraction less than 152 millions. This would leave on the trade of the current fiscal year with foreign countries, an alarming balance which could not fail to be felt in results fatal to all branches of business at home, and highly injurious to the revenue of succeeding years. These considerations, forced by the existing state of things upon the earnest consideration of this Department, are submitted to the wisdom of Congress, in the belief that they present reasons of the most imperative character for a modification of the present revenue laws. The large prospective importations should be checked by a higher rate of duties, so as to bring their aggregate amount within the limit of our capability to pay. If the exports of the last year define that limit, then our imports for the ensuing year, should not greatly exceed $152,000,000. It is believed, however, that we may calculate safely upon an export of gold, for several years to come, of at least from ten to fifteen millions annually, exclusive of what goes abroad, direct from California, without any detrimental effect upon the currency, or business of our people. The supply of this metal from our own mines may at present be estimated at $50,000,000 annually, including that sent directly from California to other countries, and this supply, it is believed, will not be likely to diminish in amount for the next two or three years. If, then, we can afford to spare the above amount of the precious metals, in payment of foreign merchandise, it may be fairly assumed that our exports, including all articles, will be equal to about one hundred and sixty-five millions, supposing always the trade of the world to remain unaffected by any disturbing causes. In the opinion of this Department. it would be unsafe to assume an amount of imports as a basis upon which to levy duties for revenue beyond this latter sum. If the present rates of duties be applied to that amount, we should receive from customs only $37,950,000, and the amount of revenue required for the present and succeeding years, would fall short of the estimates for the current year by a fraction over seven millions. It cannot be doubted that a rate of duty higher on many articles than that paid by the present law might be established without affecting injuriously the revenue. The extraordinary influx of foreign merchandise for the last year and the first quarter of the present one must be regarded as conclusive proof that an increase of duties, so as to advance the amount of revenue seven millions on the same amount of imports, is entirely practicable. That such increase will be found necessary to the demands of the treasury is believed to be beyond doubt, unless Congress shall discontinue many of the objects of expenditures which originated in our recent territorial acquisitions, and this, in the opinion of the Department, would be equally impolitic and unjust. From the foregoing considerations, the Department would submit the following modifications of our present revenue laws : I. A change in the present ad valorem system, which should impose specific duties on all articles to which such duties may be safely applied, with home valuation upon such as are necessarily subject to ad valorem rates. II. If the principle of specific duties shall not be adopted, that the home valuation instead of the foreign, should then be applied to all imports subject to ad valorem duties. III. If neither of the foregoing changes shall be thought proper, then it is deemed highly necessary that the present rates of duties should be increased on a great variety of articles which it will be found could bear such increase with the most salutary effects upon both trade and revenue. Either of the first two modifications suggested above would undoubtedly correct many of the inequalities of the present system, place all importers, whether purchasers or manufacturers, on equal grounds in respect to valuations for duty, guard the revenue against the flagrant frauds which are so easily perpetrated against existing laws, and insure stability and permanent increase of the revenue. They are therefore earnestly commended to the favorable consideration of Congress. In any system it is believed that experience has settled the true policy to be pursued in several particulars which enter into our system of revenue laws. Among these are that all raw material should be admitted at a moderate rate of duty, when assessed at all, that all non-enumerated articles should be assessed at higher rates of duty than the average of manufactured articles, and that all articles composed of the same material should pay in general the same rates of duty. In order to insure uniformity in the business of the custom-houses, and equality in the valuations under any system, I earnestly recommend the creation of a corps of appraisers at large, whose duty it shall be to visit the principal ports of entry in the United States from time to time, with power to correct improper valuations and prescribe rules for the local appraisers. PUBLIC WAREHOUSES. By the joint resolution of the 14th February last the Secretary of the Treasury was authorized to dispose of the bonded warehouses now leased by Government, on or before the first of January next, on the best practicable terms for the Government." The leases here referred to are of warehouses in New York and Boston, the annual rents of which amount to $105,415 in New York ; $48,199 88 in Boston. Although the power conferred is not limited, it has been deemed best to report to Congress that these warehouses have been offered at the rents which the United States are bound to pay, without being able to dispose of them at those rates. So far as offers have been made, they do not amount to one-half of the rent stipulated in the leases. This would leave so large a loss, that it is submitted to Congress to direct what course shall be pursued, and, in the event of a peremptory disposition of these warehouses being ordered, that an appropriation be made for any loss that may result. On the 17th of February, 1849, Mr. Secretary Walker issued new and very full instructions concerning the warehousing of merchandise under the act of the 6th August, 1846. The 7th section of these instructions directed that "at those ports where stores are owned, or have been leased by the United States, and the leases of which have not |