The operations of the Treasury during the last year have been successfully conducted.  The enactment by Congress of a national banking law has proved a valuable support of the public credit, and the general legislation in relation to loans has fully answered the expectations of its favorers.  Some amendments may be required to perfect existing laws, but no change in their principles or general scope is believed to be needed.

Since these measures have been in operation all demands on the Treasury, including the pay of the Army and Navy, have been promptly met and fully satisfied.  No considerable body of troops, it is believed, were ever more amply provided and more liberally and punctually paid, and it may be added that by no people were the burdens incident to a great war ever more cheerfully borne.

The receipts during the year from all sources, including loans and balance in the Treasury at its commencement, were $901,125,674.86, and the aggregate disbursements $895,796,630.65, leaving a balance on the 1st of July, 1863, of $5,329,044.21.  Of the receipts there were derived from customs $69,059,642.40, from internal revenue $37,640,787.95, from direct tax $1,485,103.61, from lands $167,617.17, from miscellaneous sources $3,046,615.35, and from loans $776,682,361.57, making the aggregate $901,125,674.86.  Of the disbursements there were for the civil service $23,253,922.08, for pensions and Indians $4,216,520.79, for interest on public debt $24,729,846.51, for the War Department $599,298,600.83, for the Navy Department $63,211,105.27, for payment of funded and temporary debt $181,086,635.07, making the aggregate $895,796,630.65 and leaving the balance of $5,329,044.21.  But the payment of funded and temporary debt, having been made from moneys borrowed during the year, must be regarded as merely nominal payments and the moneys borrowed to make them as merely nominal receipts, and their amount, $181,086,635.07, should therefore be deducted both from receipts and disbursements.  This being done there remains as actual receipts $720,039,039.79 and the actual disbursements $714,709,995.58, leaving the balance as already stated.

The actual receipts and disbursements for the first quarter and the estimated receipts and disbursements for the remaining three quarters of the current fiscal year (1864) will be shown in detail by the report of the Secretary of the Treasury, to which I invite your attention.  It is sufficient to say here that it is not believed that actual results will exhibit a state of the finances less favorable to the country than the estimates of that officer heretofore submitted, while it is confidently expected that at the close of the year both disbursements and debt will be found very considerably less than has been anticipated.

The report of the Secretary of War is a document of great interest.  It consists of—­

1.  The military operations of the year, detailed in the report of the General in Chief.