The Secretary of the Treasury, respectfully submits to the President the following Facts and Observations on the subject of the Laws, providing for the Collection of internal Revenues.—

By the existing Regulations, the United States are, for the purpose of collecting internal Revenues, divided into sixteen Districts, each State forming one District, with the Exception of the District of Ohio, which includes the State of Kentucky, the North-West Territory, and the Territory of Indiana.—  The Territory of Mississipi is not included in any District; and the Laws, relative to the internal Revenues, have never been carried there into effect.—The Eastern and western Divisions of the District of Columbia, remain respectively attached to the Districts of Maryland and Virginia.—The President is authoris’d “to subdivide the Districts, into Surveys of Inspection, and the same, to alter, at his Discretion.”1 and also, “to form and erect such new Districts and Surveys, and to make such Alterations and Additions to, the several Districts, and in, and to the several Surveys thereof, as from time to time, shall appear, in his Judgement expedient and necessary”2—2dly. “to appoint, with the Advice of Senate a Supervisor to each District, and as many Inspectors to each Survey therein, as he shall judge necessary, placing the latter under the Direction of the former.”3—and “to appoint, with the advice of Senate such and so many Supervisors, Inspectors of Surveys, and Inspectors of Ports, therein and therefor, as may be found necessary.”4—And, where, in the Judgement of the President, a Supervisor can discharge the Duties of that Office, and also, that of Inspector, he may direct the same.—Inferior Officers of Inspection, call’d “Collectors of Revenue,” are appointed by the Supervisors, and have, under their immediate Superintendance, part of a Survey, call’d a “Division,” consisting of one or more Towns, Townships, or Counties.—Under these Powers, the following Arrangements have been made:—The Districts of New-Hampshire, Rhode-Island, Connecticut, Vermont, New York, New Jersey, Delaware, Georgia and Tennessee, do severally form each, one Survey, in each of which, the Duties of Inspector, are perform’d by the Supervisor of the District, comprehending the same, which amounts to this, that in those nine Districts, there is no Inspector.—Massachusetts, forms three Surveys: Pennsylvania four, Maryland three, Virginia six, North Carolina five, South Carolina three, and Ohio two, making, for these seven Districts, twenty six Surveys, and twenty two Inspectors, the Supervisors of the Districts of Maryland, North Carolina, South Carolina, and Ohio, being also Inspectors of one of the Surveys of their respective Districts.—

By the Law of July 11th. 1798, each of the Supervisors of the District then existing, has a certain Salary, and Allowance for Clerk-Hire; and a Commission, varying from one half, to two pr Cent, (according to the Districts and Species of Duties) on the product of internal Duties, collected in their respective Districts: the Inspectors of Surveys, then existing, and not also, Supervisors, have each, a Salary and Allowance for Clerk-Hire, amounting together to 700 Dollars: and, as well as Inspectors of Surveys, to be established after the Law, are entitled to a Commission, on the Duties collected, within their respective Surveys, varying from ¼ to two pr Cent: the Collectors are entitled to Salaries, varying, within certain limits at the Will of the Supervisor, and to a Commission of six pr Cent on Duties, collected within their respective Divisions.—

From thence, it follows, that the Power, vested in the President, of erecting new Districts and Surveys, has become nugatory; since, (excepting the Commissions of Inspectors) the Supervisors and Inspectors of new Districts and Surveys, shou’d not be entitled to receive any Pay.—but his Power of altering Surveys, and therefore, of reducing, two, or more Surveys into One, remains entire.—

By directing that the seven Districts, which are now divided into Surveys, shall each, severally, form only one Survey, as is the case in the nine other Districts; and that the Supervisor of each, shall perform the Duties of Inspector, all the Inspectors, will at once be abolished.—This is the Reform, which, with the Exceptions hereafter stated,5 the Secretary of the Treasury begs leave to submit to the President.—The Considerations, which have induc’d that Proposition, are not, of new Impression, and have receiv’d the Approbation of many respectable Officers, now, or heretofore, attached to this Department; and of several Supervisors.—

In point of Economy, 24,000 Dollars, or about three pr Cent, on the net Product of the whole internal Revenue would be saved by abolishing all the offices.6—but this, tho’ not to be contemned, is not the principal reason, which recommends a Change.—The Collectors, now, pay to, and account with, the Inspectors: these pay, to the Supervisors; and, whenever they have settled, for any one Quarter, the Accounts of all the Collectors, in their Survey, render their own Account also, to the Supervisor, and this last, pays to the Treasury; and, whenever he has settled, the Account of all the Inspectors, in his District, renders his Account to the Commissioner of the Revenue, from whence, the accounts are transmitted, for Settlement, to the Auditor’s, and Comptroller’s Office.—No Correspondence exists between the Collectors and the Supervisors: none, between, either the Collectors, or Inspectors, and the Treasury.—The Secretary has not yet, been able to procure, even the Dates, to which, the last Accounts of the Inspectors and Collectors, have been render’d to the Supervisors, for Settlement.—Whenever the Accounts of a Supervisor, are not renderd in time, he may always charge the Delay to one of the Inspectors.—The Delinquency of a single Collector, stops the Settlement of Accounts, of a whole State, without it’s being possible, for this Department to trace the evil, to it’s Source.—And altho’, the Supervisors, having the exclusive power, of appointing and removing Collectors, may be suppos’d to be responsible for their Conduct, this Responsibility, is almost, altogether annihilated, by the intermediate Class of Inspectors who stand between them and the Collectors, and have the immediate Superintendance, of that inferior Class of Officers.—

This Evil has long been felt, and it is believ’d, that a Remedy, wou’d before this time, have been applied, had there not been, some Hesitation between the plan, of simply abolishing the Inspectors, of the existing Surveys, and that, of altering, at the same time, the existing Districts, so as to increase, to a certain degree, their number and that of Supervisors.—

It has already been suggested that this last plan cannot be fully executed without legislative Aid; and no solid Objection, seems to exist, to the first being carried fully into effect, except, so far, as relates to the Districts of Virginia, and Ohio.

From the Communications receiv’d from the Supervisor of Virginia, it seems, that the great extent, and scatter’d Population of the Western part, of that District, render it doubtful, whether a Supervisor at Richmond, may well superintend the whole; and although the Secretary of the Treasury, is not convinc’d of the necessity of retaining, either of the two Inspectors, of the Surveys, lying, beyond the blue Ridge, yet, not wishing to recommend, any Alteration, which may not be found perfectly practicable, he will submit to the President, the Propriety of retaining both.—

The District of Ohio, is far too large, and the Dependence of the North-West, and Indiana Territory, which form the second Survey thereof, on the Supervisor, residing at Kentuckey, is attended with insuperable Difficulties.—The Accounts of Collectors, at Illinois, Cincinnati and Detroit, must be render’d at Marietta the place of Residence of the Inspector. From thence they travel back, to Lexington, where the Supervisor resides, and from Lexington, are, at the end of Years, transmitted to this Department.—It is propos’d, that the 2d. Survey of Ohio, be erected into a separate District, forming one Survey; that the Inspector of that Survey, be immediately appointed, but that the Commission of Supervisor,—(which is also design’d for him,) shall be withheld, untill Congress, shall have provided by Law, for the Compensation, of that Officer. Until then, he will receive, only the pay of an Inspector, but, by the Survey, being erected, into a new District, shall be accountable, immediately, to the Treasury Department. From these Considerations, the following Propositions, are respectfully submitted, to the President, Viz: 1st. that from and after, the 30th. of September next, being the End of the present Quarter, the Districts of Massachusets, Pensylvania, Maryland, North Carolina, and South Carolina, shall severally form, each, one Survey; and that the Duties of Inspector, of each of the said Surveys, shall be performd by the Supervisor of the District comprehending the same.—

2dly. that the several Counties, of the District of Virginia, forming the first, second, third, and fourth Surveys, (which include all the Counties, east of the blue Ridge) shall from the same date7 form one Survey, to be call’d the first Survey, and that the Duties of Inspector, in and for the same, shall be performd by the Supervisor—

3dly: that the second Survey, of the District of Ohio, shall be erected into a new District, To be denominated the North-West District.—

4thly. That the Powers of the Inspectors of the Surveys, thus suppressed, including the present Inspector of the second Survey of the District of Ohio, shall, from the passing of the Act of the President, extend only to settling the Accounts of the Collectors, ending the 30th. of June last, and to the Distribution of Stamps.

5thly. that the Collectors, in the Surveys thus suppressed, shall, for all Duties accruing after the 30th. of June last, account directly, with the Supervisor of the District.

Respectfully Submitted by,