notes fit for circulation to the respective banks of issue. This item of expense fluctuates according to the amount of notes presented for redemption, and by reason of diminished redemptions during the year was $10,764.96 less than in the preceding year. In the expenditure for salaries there was a saving of $4,306.64, as compared with the preceding year, and a saving of $9,314.82 of the amount appropriated for that purpose. These expenses will be assessed in the usual manner, in compliance with law, against the national banks whose notes have been redeemed. The amount of notes redeemed during the year which under the law are subject to assessment is $128,518,763.50, making the rate of expense $1.30 per $1,000.

During the year assessments for expenses of retiring the circulation of national banks in liquidation, made under the provisions of section 8 of the act of July 12, 1882, amounted to $3,292.20. A charge was made to that fund on November 16, 1885, of $9,627.21, for its share of the expenses of the fiscal year 1885 incurred in redeeming the notes of liquidating banks subject to the provisions of section 8 of the act of 1882, to the amount of $7,658,877, at $1.25 per $1,000, the rate of expense for that year. The balance to the credit of that fund on June 30, 1885, was $33,681.29, and on June 30, 1886, it was $27,346.28.

Tables in the Appendix, numbered 27 to 37, give in detail the transactions during the year in the redemption of national-bank notes.

RETIREMENT OF NATIONAL BANK CIRCULATION.

As there seems to be on the part of the public an idea that the Treasury is locking up money in its vaults on account of this fund, the whole operation of the retirement of the notes of a national bank will be stated here in order to relieve any apprehension which may be felt on this subject. The 3 per cent. bonds of the Washington National Bank of Westerly, R. I., amounting to $100,000, were called on the 15th day of September, 1886. On the 12th day of October, 1886, the bank sent its duplicate receipt to this office, the original being held by the Comptroller of the Currency, with the request that a deposit of 90 per cent. of the above amount should be made to retire its circulation with the Treasurer of the United States, as agent for the redemption of the notes of the national banks, and requesting a check for the 10 per cent. difference. Accordingly a credit was placed upon the books of the Treasurer, as agent for the national banks, for $90,000, and a check for $10,000, and the amount standing to the credit of the bank in the 5 per cent. redemption fund-in this case $4,500-returned to the bank. The amount of redeemed notes charged to this account since it was opened is $1,892. The annual percentage of such redemptions is 25.22, and it will therefore take at least four years before the greater part of the notes of this bank will be redeemed. The amount credited to the general fund thus created stands on the books of the Treasurer, as agent, as a credit for the redemption of the notes of the banks, and as the notes come in for redemption they are charged to this account, and the national-bank circulation outstanding is decreased by a corresponding amount. At present, owing to the active business season, none but mutilated notes are sent in for redemption. Persons presenting these notes for redemption are paid either by check on New York or in such form of currency as may be desired by them. The indebtedness on the part of the Treasury, created as above described, is, no doubt, due in legal-tenders, but is liquidated in the manner stated, and no attempt is made to reserve any specific sum of legal-tenders, or any other forin of

currency, out of the general Treasury balance in which to pay these constantly accruing liabilities. There was on November 30 of this kind of liability, adding the 5 per cent. fund, which, theoretically, is also composed of legal tenders, the sum of $94,752,389. The total amount of legal-tenders in the Treasury on the same date, exclusive of that held to redeem the legal-tender certificates which are used in the banks as reserve in their stead, was $29,548,188, thus showing that there must be held in the Treasury in some other forms of money the balance of $65,204,201. The entire sum of $94,752,389 may be said to be composed of $29,548,188 legal-tenders, $32,602,100 standard silver dollars, and $32,602,100 gold. If the books of the Treasury stated accurately the balances due by it as a depository, the amount now reported as a credit balance would be materially decreased. That these balances should not be so reported is, in the opinion of the Treasurer, one of the greatest defects of the present Treasury system.

THE WORK OF THE OFFICE.

The Treasurer again commends, with great pleasure, his subordinates in office for attention and accuracy in their responsible duties, and, while doing so, expresses the hope that at no distant day some method may be adopted which will duly reward their long and faithful service. A bill passed by Congress which would provide half pay for officials. who have grown gray in the service of the Treasury, would be a measure alike of justice and good sense, as it would increase the efficiency of the office, and furnish an inducement to clerks skilled in their duties to remain in the service of the Government. The thanks of the Treas urer are due especially to Messrs. J. F. Meline, Thos. E. Rogers, D. W. Harrington, F. Weiler, Chas. L. Jones, F. W. Lantz, and J. O. Manson, of his office; Mr. E. B. Elliott, Government Actuary, and Mr. M. L. Muhleman, of the New York sub-treasury, for valuable services. performed by these gentlemen, in addition to their regular duties. Very respectfully, your obedient servant,

Hon. DANIEL MANNING,

Secretary of the Treasury.

C. N. JORDAN, Treasurer of the United States.

REPORT OF THE DIRECTOR OF THE MINT.

TREASURY DEPARTMENT, BUREAU OF THE MINT,

Hon. DANIEL MANNING,

Secretary of the Treasury:

Washington, D. C., October 20, 1886.

SIR: The duties of Director of the Mint were entered upon by me at the beginning of the fiscal year ended June 30, 1886.

While the volume of the work executed during the same year by the several mints and assay offices of the United States was greater than that of the previous year, the total expenditure was less by $197,089.71. I proceed to exhibit in detail the performance of the mint service and its expenditures; this being my second annual report, the first having been made for a period under the administration of my predecessor.

APPROPRIATIONS, EARNINGS AND EXPENDITURES.

The specific appropriations made by Congress for the support of the mints and assay offices of the United States during the fiscal year ended June 30, 1886, amounted to $1,169,350.

Of this amount there was expended $947,369.04, leaving unexpended in the Treasury of the United States of the specific appropriations the sum of $221,980.96, as shown in the following statement:

UNEXPENDED BALANCES OF APPROPRIATIONS, MINTS AND ASSAY OFFICES FISCAL YEAR 1886.

In addition to the amount expended from the annual appropriations made by Congress for the support of the mints and assay offices the sum of $119,976 was expended by two of the coinage mints from the indefinite general appropriation contained in the act authorizing the coinage of the standard silver dollar, passed February 28, 1878.

This amount was expended solely for defraying expenses incidental to the coinage of the silver dollar, as provided in that act.

For the support of the mints and assay offices, including the cost of the mandatory coinage of the silver dollar, the total expenditures from the two classes of appropriations, specific and general, during the fiscal year ended June 30, 1886, were, as exhibited in the following statement, $1,067,345.04.

APPROPRIATIONS AND EXPENDITURES FOR THE MINTS AND ASSAY OFFICES, 1886. APPROPRIATIONS.

The total amount expended during the previous fiscal year was $1,261,601.29. Thus there was a reduction of expenditures in the mint service during the past fiscal year amounting to $194,256.25. A comparative statement of the coinage executed during the same years will presently be introduced. It was considerably greater during the last than the preceding year.

The reduction is exhibited in the following table:

COMPARISON OF EXPENDITURES ON ACCOUNT OF THE MINT SERVICE, FISCAL YEARS 1885 AND 1886.

In addition to the expenditures of the mints and assay offices, the expenses of the office of the Director of the Mint, including the salaries of officers and employés, expenditures for examinations of mints, for books and incidentals, and on account of Laboratory, were $34,197.85 in 1886, against $37,031.31 in 1885, a reduction of $2,833.46.

This reduction of expenditures is exhibited in the following table:

COMPARISON OF EXPENSES OF THE BUREAU OF THE MINT FOR THE FISCAL YEARS 1885 AND 1836.

In addition to the amount expended at the mints from the standard silver dollar appropriation, there was expended at the Department, for daily quotations from London by telegraph of the price of silver, the sum of 8918, which is the exact amount expended for the same purpose during the preceding fiscal year. Quotations so received are inrispensible in making purchases of silver for the silver dollar coinage. The total reduction of expenses effected in the administration of the mint service during the fiscal year ended June 30, 1886, from the expenditures of the prior year amounted, as already stated, to $197,089.71. The appropriations for the fiscal year 1886-'87 amount to $1,092,100, against $1,169,350 for the fiscal year 1885-'86, being a reduction of $77,250.

The appropriations for the fiscal year 1886-'87, as distributed among the various institutions, are exhibited in the following table:

APPROPRIATIONS FOR THE SUPPORT of the MintS AND ASSAY OFFICES FOR THE FISCAL YEAR 1887.