Emergency revenue act.

The emergency revenue act of October 22, 1914, which was to have expired December 31, 1914, was extended by a joint resolution. approved December 17, 1915, and continued in full force and effect until and including December 31, 1916.

Repeal of the emergency revenue act of October 22, 1914.

The act to increase the revenue and for other purposes, approved September 8, 1916, effective September 9, 1916, repeals the emergency revenue act of October 22, 1914, and joint resolution of December 17, 1915, except sections 3 and 4 (special taxes), which remain in force until January 1, 1917. It amends the income-tax law by doubling the normal tax and making reclassification of rates for additional tax, and modifying some of the administrative measures, without disturbing the fundamental features of the previous law. It levies an estate tax, or tax on the transfer of net estates of persons dying after September 8, 1916, and a munition manufacturer's tax. Certain of the special taxes provided in the emergency revenue act of October 22, 1914, are reenacted. A special excise tax measured by the fair value of the capital stock is imposed on corporations for doing business.

Work of revenue agents.

During the last three years gigantic frauds against the revenue and evasions or omissions of tax have been uncovered, and evaded taxes approximating $50,000,000 have been discovered. Of this amount $22,509,576.47 was assessed, representing approximately $2,700,000 more than was expended during the three years for the operation of the Internal-Revenue Service. The unpaid taxes reported for assessment and collection were distributed as follows: Corporation taxes

Individual income taxes..

Offers in compromise...

Distilled spirits, tobacco, and miscellaneous taxes...

Collections on account of oleomargarine frauds

Total......

$11, 326, 125. 82 5, 006, 696. 92 984, 791. 41 4, 241, 555. 45 950, 406. 87

22, 509, 576. 47

One extensive whisky conspiracy operating for many years in more than a dozen States was discovered and 11 conspirators have been convicted and are serving prison sentences.

In one oleomargarine conspiracy 34 offenders in a single city were convicted or plead guilty and sentenced to terms of imprisonment and to pay fines aggregating $138,000.

One investigation of tobacco frauds, extending over three States, resulted in the seizure of 236 factories of the offenders.

BUREAU OF ENGRAVING AND PRINTING.

There were engraved, printed, and delivered by the Bureau of Engraving and Printing 300,711,800 sheets of securities, postage stamps, etc., for the use of this and other departments, a decrease of 6,922,534 sheets as compared with the preceding year.

The decrease in the output is principally due to the use by the Comptroller of the Currency in filling orders from banks for nationalbank notes of emergency national-bank notes instead of having printings made by this bureau, and partly due to the unusually large number of national-bank and Federal reserve notes, of new revenue stamps, and of opium stamps and orders furnished in the preceding

year.

The deliveries were 90,000,000 sheets of United States notes and certificates; 11,500 sheets of United States bonds; 6,331,274 sheets of national-bank notes; 796,000 sheets of Federal reserve bank currency; 6,522,000 sheets of Federal reserve notes; 83,767,833 sheets of internal-revenue stamps, 229,500 sheets of customs stamps; 109,653,858 sheets of United States postage stamps; 46,756 sheets of United States parcel-post stamps; 239,668 sheets of Philippine postage stamps; 597,550 sheets of silver certificates, bank notes, national-bank circulating notes, registered bonds, checks, documentary and internal-revenue stamps, and postal cards for the Philippine Islands; and 2,515,861 sheets of checks, drafts, and miscellaneous. In addition to these sheets delivered, miscellaneous work was executed to the value of $82,093.61. The face value of all classes of securities, internal-revenue stamps, postage stamps, etc., furnished by this bureau amounted to $2,997,382,581.04.

Compared by classes with the work executed in the previous fiscal year, there was an increase of 26.54 per cent in United States notes, certificates, and bonds; and 0.66 per cent in United States postage stamps; and a decrease of 62.11 per cent in national-bank and Federal reserve notes; 4.86 per cent in internal-revenue stamps; 11.97 per cent in customs stamps; and 1.62 per cent in checks, drafts, and miscellaneous.

Appropriations made by Congress for the operation of the bureau amounted to $4,058,460, and the bureau was reimbursed for services and materials furnished the several executive departments and bureaus to the amount of $1,073,067.20, the aggregate available for the work during the year having been $5,131,527.20. The expenditures were $236,398.43 for salaries, of which $900 was for one em

ployee detailed to another branch of the department and not reimbursed; $8,400 for custody of dies, rolls, and plates; $1,840,096.56 for compensation of employees, of which $2,500 was for one employee detailed to another branch of the department and not reimbursed; $1,944,668.80 for wages of plate printers and assistants; and $1,036,484.93 for materials and miscellaneous expenses, making a total expenditure of $5,066,048.72, and leaving unexpended $65,478.48.

CUSTOMS.

While there was a decrease in the number of entries of merchandise taken during this fiscal year of approximately 129,000 from the number of entries during the fiscal year 1915, there was an increase in all other customhouse transactions. The decrease in the number of entries was chiefly due to a change in practice under which a number of consignments arriving by rail at ports on the Canadian and Mexican borders may be consolidated in one entry instead of requiring a separate entry for each consignment. This change was made for the mutual benefit of importers and of the customs officers, substituting as it does one document for the many theretofore required.

The aggregate receipts from customs for the fiscal year 1916 amounted to $213,185,845.63, an increase of $3,399,173.42 over the aggregate receipts for the preceding fiscal year. The value of imports for the fiscal year amounted to $2,197,883,510, an increase of approximately $484,000,000 over the preceding fiscal year, while the value of the exports increased from $2,768,589,340 in 1915 to $4,333,658,865 in 1916. The amount of drawback paid upon the exportation of goods in whole or in part from imported dutiable materials amounted to $15,370,945, as against $7,403,686 during the fiscal year 1915, an increase of over 100 per cent. These increases are concurrent with the widespread increase in industrial activities and the accompanying prosperity of the country during the past year, the increase in the amount of drawback paid being proportionate to the increase in our foreign exports and the increase in the value of the imports being largely due to the increased importation of raw materials for manufacture in the export trade.

While the continuation of the European war has decreased the activities of the Customs Service in some lines, as compared with conditions prior to the war, because of the falling off in dutiable imports from the countries engaged in the war, it has increased the activities and responsibilities of that service in a number of other ways. While the amounts collected decreased, the volume of imports and exports increased. Much time and attention has been devoted to the maintenance of the neutrality of the United States. To this end customs

officers have been charged with the duty, under the direction of the Treasury Department, of preventing any belligerent from using our ports as a base for hostile operations; of preventing the equipment or outfitting of vessels in our ports for hostile purposes; of preventing the shipment of goods under false manifests; and the supervision of the vessels interned in our ports.

Since the beginning of the war the following vessels of war have arrived in American ports and have been interned: Prinz Eitel Friedrich, cruiser, and Kronprinz Wilhelm, cruiser, interned at Norfolk, Va.; Geier, gunboat, and Locksun, naval transport, interned at Honolulu; and submarine K-D 3 interned at San Juan.

In addition, the following merchant vessels of German and Austrian nationality have remained in ports of the United States since the beginning of the war:

Many reports and rumors relating to the violation of our neutrality by or through these vessels have been investigated, and while found

in every case to have been without foundation of fact, a great deal of work has thus devolved upon the Customs Service.

The year was marked by the arrival at the port of Norfolk-Newport News of the steamship Appam, captured on the high seas and claimed to have been brought into port as a prize, and the arrival at the port of Baltimore of the Deutschland, the first submarine merchant vessel ever to enter any United States port.

The only violations of the neutrality statutes in any way successful consisted of the shipment of merchandise under false manifests, and these, it is gratifying to report, were detected and successfully prosecuted, with the result that attempts to evade the statutes in such matters have practically ceased.

Considerable embarrassment has been caused, both to importers and to the Customs Service, by delays in the receipt of invoices and bills of lading necessary to make entry of imported merchandise. The situation has been relieved as far as possible by the Customs Service by granting extensions of time within which entries of imported merchandise are required to be made by permitting importers to open and examine cases of merchandise on the piers in order to make up invoices therefor and by accepting entries without the production of bills of lading upon bonds being given for the subsequent production of such documents.

During the fiscal year the customs regulations were revised and issued as the Customs Regulations of 1915. This was the first revision of the regulations since 1908, and the work was performed by employees of the Customs Service and Customs Division detailed for that purpose, without any extra cost to the Government. This is mentioned for the reason that it has been customary in the past to have a special appropriation made by Congress for the purpose of revising these regulations. There was also prepared in the Customs Division an alphabetical index-digest of the decisions of the Treasury Department, the Board of United States General Appraisers, and the United States Court of Customs Appeals, rendered from 1908 to 1916, without any extra cost; and copy has also been prepared by employees of the naval office at New York for a revision, to January 1, 1916, of the index-digest known as "Compilation of Customs Laws and Digest of Decisions Thereunder." This was also done without any extra cost to the Government, through utilizing the services of employees whose work had been reduced to a minimum because of conditions resulting from the European war.

The method of tabulating statistics by mechanical means has been improved and advanced toward perfection. While the new system has not as yet greatly reduced the time required for the compilation