The Sun.
London, England, 1858-12-20 00:00:00

BRAZIL,

"With the empire of Brazil our relations are of the most
friendly character. The productions of the two countries,
and especially those of an agricultural nature, are such as
to invite extensive mutual changes. A large quantity of
American flour is consumed in Brazil, while more than
treble the amount in value of Brazilian coffee is consumed
in the United States. While this is the case a heavylluty
has been levied until very recently upon the importations of
American flour into Brazil. lam gratified, however, to be
able to inform you that in September last this has been
reduced from 1 dol. 32 to about 49 cent per barrels, and the
duties on other articles of our production have been
diminished in nearly the same proportion.
" I regret to state that the government of Brazil still con-
tinues to levy an export duty of about 11 per cent, on coffee,
notwithstanding this article is admitted free from duty in
the United States. This is a heavy charge upon the con-
sumers of coffee in our country, as we purchase half of the
entire surplus crop of that article raised in Brazil.
Our minister, under instructions, will reiterate his efforts to
have this export duty removed ; fand it is hoped that the
enlightened Government of the -Emperor will adopt this
wise, just, and equal policy.' In that event there is good
reason to believe that the commerce between the two coun-
tries will greatly increasg, much to the advantage of both.
" The claims of our citizens against the Government of
Brazil are not, in the aggregate, of very large amount ; but
some of these rest upon plain principles of justice, and their
settlement ought not to be longer delayed. A renewed and
earnest, and I trust a-successful effort, will be made by our
minister to procure their final adjustment.
PARAGUAY.

" On the 2d of June last Congress passed a joint resolu-
tion authorising the President 'to adopt such measures and
use such force as, in his judgment, may be necessary and
advisable' for the purpose of adjusting the differences be-
tween the United States and the Republic of Paraguay, in
connection with the attack:on the American steamer Water
Witch, and with other measures referred to' in his annual
message.' And on the 12th of July following they made an
appropriation to defray the expenses and compensation of a
commissioner to that republic, should the President deem it
proper to make such an appointment.
"In compliance with these enactments I have appointed
a commissioner, who has proceeded to. Paraguay with full
powers and instructions to settle those differences in an
amicable and peaceful manner, if this be practicable. His
experience and discretion justify the hope that he may prove
successful in convincing the Paraguayan Government that
it is due both to honour and justice that they should volun-
tarily and promptly make atonement for the wrongs which
they have committed against the United States, and indem-
nify our injured citizens whom they have forcibly despoiled
of their property.
" Should our commissioner prove unsuccecsful, after a
sincere and earnest effort to accomplish the object of his
mission, then no alternative will remain but the employment
of force to obtain just satisfaction' from Paraguay. In
view of this contingency the secretary of the navy, under
my direction, has fitted out and despatched a naval force, to
rendezvous near Buenos Ayres, which, it is believed, will
prove sufficient for the occasion. It is my earnest desire,
however, that it may not be found necessary to resort to this
last alternative.

DOMESTIC AFFAIRS.-BUSINESS OF THE

COUNTRY.

" When Congress met in December last the business of
the country had just been crushed by one of those periodical
revulsions which are the inevitable consequence of our un-
sound and extravagant system of bank credits and inflated
currency. With all the elements of national wealth in
abundance our manufactures were suspended, our useful
public and private enterprises were arrested, and thousands
of labourers were deprived of employment and reduced to
want. Universal distress prevailed among the commercial,
manufacturing, and mechanical classes. This revulsion was
felt the more severely in the United States, because similar
causes had produced the like deplorable effects throughout
the commercial nations of Europe. All were experiencing
sad reverses at the same moment. Our manufacturers every-
where suffered severely, not because of the recent reduction
in the tariff of duties on imports, but because there was no
demand at any price for their productions. The people were
obliged to restrict themselves in their purchases to articles
of "rime necessity. In the general prostration of business
the iron manufacturers in different states probably suffered
more than any other class, and much destitution was the
inevitable consequence among the great number of work-
men who had been employed in this useful branch of our
industry. There could be no supply where there was no
demand. To present an example, there could be no demand
for railroad iron, after our magnificent system of railroads,
extending its benefits to every portion of the Union, had
been brought to a dead pause. The same consequences have
resulted from similar causes to many other branches of use-
ful manufactures. It is self-evident that where there is no
ability to purchase manufactured articles these cannot be
produced, and consequently must cease to be produced.
"No government, and especially a government of such
limited power as that of the United States, could have pre=
vented the late revulsion. The whole commercial world
seemed for years to have been rushing to this catastrophe.
The same ruinous consequences would have followed in
the United States whether the duties upon foreign imports
had remained as they were under the tariff of 1846 or had
been raised to-a. much higher standard. The tariff of 1857
had no agency in the result. The general causes existing
throughout the world could not have been controlled by the
legislation of any particular country.
" The periodical revulsions which have existed in our
past history must continue to return at intervals so long as
our present unbounded system of bank credits shall prevail.
They will, however, probably be the less severe in future ;
because it is not to be expected, at least for many years to
come, that the commercial nations of Europe, with whose
interests our own are so materially involved, will expose
themselves to similar calamities. But this subject was
treated so much at, large in my last annual message that I
shall not now pursue it further. Still, I respectfully renew
the recommendation in favour of the passage of a uniform
bankrupt law applicable to banking institutions. This is all
the ,direct power over the subject which I believe the federal
government posseFses. Such a law would mitigate, though
it might not prevent, the evil. The instinct of self-preser-
vation might produce a wholesome restraint upon their
banking business, if they knew in advance that a suspen-
sion of specie payments would inevitably produce, their
civil death.

, " But the effects of the revulsion are now slowly but
surely passing away. The energy and enterprise of our
citizens, with our unbounded resources, will, within the
period of another year, restore a state of wholesome indus-
try and trade. Capital has again accumulated in our largo
cities. The rates of interest are there very low. Confi-
dence is gradually reviving, and so soon as it is discovered
that this capital can be profitably einployed in commercial
and manufacturing enterprises, and In the construction
of railroads and other works of public and private im-
provement, prosperity will again smile throughout the
land. It is vain, however to disguise the fact from our-
selves, thut a speculative Inflation in our currency, without
a corresponding inflation in other countries whose mann.
factures come into competition with our own, must ever
produce disastrous results to our domestic manufactures.
No tariff short of absolute prohibition, can prevent these
evil consequences.

THE TARIFF.
" In connection with this subject it is proper to refer to
oar financial condition, • The same mune which have pro-

duced pecuniary distress throughout the country have so
reduced the amount of imports from foreign countries that
the revenue has proved inadequate to meet the necessary
expenses of the government. To supply the deficiency,
Congress; by the act of Dec. 23, 1857, authorised the issue
of 20,000,000 dols. of treasury notes, and, this proving in
adequate, they authorised, by the act of June 14, 1808, a
loan of 20,000,000 dols., 'to be applied to the payment of
appropriations made by law.'
" No statesman would advise that we should go on in-
creasing the national debt to meet the ordinary expenses of
the government. This would be a most ruinous policy. In
case of war, our credit must be our chief resource, at least
for the first year, and this would be greatly impaired by
having contracted a large debt in time of peace. It is our
true policy to increase our revenue so as to equal our ex-
penditure It would be ruinous to continue to borrow. Be-
sides it may be proper to observe that the incidental pro-
tection thus afforded by a revenue tariff would at the pre-
sent moment to some extent increase the confidence of the

manufacturing interests, and give a fresh impulse to our
reviving business. To this, surely, no one will object.
" In regard to the mode of assessing and collecting duties
under a strict revenue tariff I have long entertained, and
often expressed the opinion that sound policy requires this
should be done by specific duties in cases to which these can
be properlyapplied. They are well adapted to commodities
which are usually sold by weight or measure, and which from
their nature, are of equal or nearly equal value. Such, for
example, are the articles of iron of different classes, raw
sugar, and foreign wines and spirits.
" In my deliberate judgment specific duties are the best
if not the only means of securing the revenue against false
and fraudulent invoices, and such has been the practice
adopted by this purpose by other commercial nations. Be:
sides, specific duties would afford to the American manufac-
turer the incidental advantages to which he is fairly entitled
under a revenue tariff. The present system is a sliding
scale to his advantage. Under it, when prices are high and
business prosperous, the duties rise in amount when he least
requires their aid. On the contrary, when prices fall, and
he is struggling against adversity, the duties are diminished
in the same proportion, greatly to his injury.
" Neither would there be danger that a• higher rate of
duty than that intended by Congress could be levied in the
form of specific duties. It would be easy to ascertain the
average value of any imported article for a series of years ;
and, instead of subjecting it to an ad valorem duty at a cer-
tain rate per centum, to substitute in its place an equivalent
specific duty.
" By such an arrangement the consumer will not be in-
jured. It is true, he might have to pay a little more duty
on a given article in one year; but if so he would pay a lit-
tle less in another, and in a series of years these would
counterbalance each other, and amount to the same thing
as far as his interest is concerned. This inconvenience
would be trifling when contrasted with the additional secu-
rity thus afforded against frauds upon the revenue, in which
every consumer is directly interested.
" I have thrown out these suggestions as the fruits of
my own observation, to which Congress, in their better
judgment, will give such weight as they may justly deserve.