The situation of the United States in regard to their resources, the extent of their revenue, and the facility with which it is raised affords a most gratifying spectacle.  The payment of nearly $67,000,000 of the public debt, with the great progress made in measures of defense and in other improvements of various kinds since the late war, are conclusive proofs of this extraordinary prosperity, especially when it is recollected that these expenditures have been defrayed without a burthen on the people, the direct tax and excise having been repealed soon after the conclusion of the late war, and the revenue applied to these great objects having been raised in a manner not to be felt.  Our great resources therefore remain untouched for any purpose which may affect the vital interests of the nation.  For all such purposes they are inexhaustible.  They are more especially to be found in the virtue, patriotism, and intelligence of our fellow-citizens, and in the devotion with which they would yield up by any just measure of taxation all their property in support of the rights and honor of their country.

Under the present depression of prices, affecting all the productions of the country and every branch of industry, proceeding from causes explained on a former occasion, the revenue has considerably diminished, the effect of which has been to compel Congress either to abandon these great measures of defense or to resort to loans or internal taxes to supply the deficiency.  On the presumption that this depression and the deficiency in the revenue arising from it would be temporary, loans were authorized for the demands of the last and present year.  Anxious to relieve my fellow-citizens in 1817 from every burthen which could be dispensed with, and the state of the Treasury permitting it, I recommended the repeal of the internal taxes, knowing that such relief was then peculiarly necessary in consequence of the great exertions made in the late war.  I made that recommendation under a pledge that should the public exigencies require a recurrence to them at any time while I remained in this trust, I would with equal promptitude perform the duty which would then be alike incumbent on me.  By the experiment now making it will be seen by the next session of Congress whether the revenue shall have been so augmented as to be adequate to all these necessary purposes.  Should the deficiency still continue, and especially should it be probable that it would be permanent, the course to be pursued appears to me to be obvious.  I am satisfied that under certain circumstances loans may be resorted to with great advantage.  I am equally well satisfied, as a general rule, that the demands of the current year, especially in time of peace, should be provided for by the revenue of that year.