The report of the Secretary of the Treasury exhibits in detail the condition of the public finances and of the several branches of the Government related to his Department. I especially direct the attention of the Congress to the recommendations contained in this and the last preceding report of the Secretary touching the simplification and amendment of the laws relating to the collection of our revenues, and in the interest of economy and justice to the Government I hope they may be adopted by appropriate legislation.

The ordinary receipts of the Government for the fiscal year ended June 30, 1886, were $336,439,727.06. Of this amount $192,905,023.41 was received from customs and $116,805,936.48 from internal revenue. The total receipts, as here stated, were $13,749,020.68 greater than for the previous year, but the increase from customs was $11,434,084.10 and from internal revenue $4,407,210.94, making a gain in these items for the last year of $15,841,295.04, a falling off in other resources reducing the total increase to the smaller amount mentioned.

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 total ordinary expenses of the Government for the fiscal year ended June 30, 1886, were $242,483,138.50, being less by $17,788,797 than such expenditures for the year preceding, and leaving a surplus in the Treasury at the close of the last fiscal year of $93,956,588.56, as against $63,463,771.27 at the close of the previous year, being an increase in such surplus of $30,492,817.29.

The expenditures are compared with those of the preceding fiscal year and classified as follows:

Year ending June 30, 1886. Year ending June 30, 1885.
For civil expenses $21,955,604.04 $23,526,942.11
For foreign intercourse 1,332,320.88 5,439,609.11
For Indians 6,099,158.17 6,552,494.63
For pensions 63,404,864.03 56,102,267.49
For the military, including river and harbor improvements and arsenals 34,324,152.74 42,670,578.47
For the Navy, including vessels, machinery, and improvement of navy-yards 13,907,887.74 16,021,079.69
For interest on public debt 50,580,145.97 51,386,256.47
For the District of Columbia 2,892,321.89 3,499,650.95
Miscellaneous expenditures, including public buildings, light-houses, and collecting the revenue 47,986,683.04 54,728,056.21

For the current year to end June 30, 1887, the ascertained receipts up to October 1, 1886, with such receipts estimated for the remainder of the year, amount to $356,000,000.

The expenditures ascertained and estimated for the same period are $266,000,000, indicating an anticipated surplus at the close of the year of $90,000,000.

The total value of the exports from the United States to foreign countries during the fiscal year is stated and compared with the preceding year as follows:

For the year ending June 30, 1886. For the year ending June 30, 1885.
Domestic merchandise $665,964,529 $726,682,946
Foreign merchandise 13,560,301 15,506,809
Gold 42,952,191 8,477,892
Silver 29,511,219 33,753,633