In order that timely notice may be given and proper measures taken to effect the loan, or such portion of it as may be required, it is important that the authority of Congress to make it be given at an early period of your present session.  It is suggested that the loan should be contracted for a period of twenty years, with authority to purchase the stock and pay it off at an earlier period at its market value out of any surplus which may at any time be in the Treasury applicable to that purpose.  After the establishment of peace with Mexico, it is supposed that a considerable surplus will exist, and that the debt may be extinguished in a much shorter period than that for which it may be contracted.  The period of twenty years, as that for which the proposed loan may be contracted, in preference to a shorter period, is suggested, because all experience, both at home and abroad, has shown that loans are effected upon much better terms upon long time than when they are reimbursable at short dates.

Necessary as this measure is to sustain the honor and the interests of the country engaged in a foreign war, it is not doubted but that Congress will promptly authorize it.

The balance in the Treasury on the 1st July last exceeded $9,000,000, notwithstanding considerable expenditures had been made for the war during the months of May and June preceding.  But for the war the whole public debt could and would have been extinguished within a short period; and it was a part of my settled policy to do so, and thus relieve the people from its burden and place the Government in a position which would enable it to reduce the public expenditures to that economical standard which is most consistent with the general welfare and the pure and wholesome progress of our institutions.

Among our just causes of complaint against Mexico arising out of her refusal to treat for peace, as well before as since the war so unjustly commenced on her part, are the extraordinary expenditures in which we have been involved.  Justice to our own people will make it proper that Mexico should be held responsible for these expenditures.

Economy in the public expenditures is at all times a high duty which all public functionaries of the Government owe to the people.  This duty becomes the more imperative in a period of war, when large and extraordinary expenditures become unavoidable.  During the existence of the war with Mexico all our resources should be husbanded, and no appropriations made except such as are absolutely necessary for its vigorous prosecution and the due administration of the Government.  Objects of appropriation which in peace may be deemed useful or proper, but which are not indispensable for the public service, may when the country is engaged in a foreign war be well postponed to a future period.  By the observance of this policy at your present session large amounts may be saved to the Treasury and be applied to objects of pressing and urgent necessity, and thus the creation of a corresponding amount of public debt may be avoided.