it is believed, has largely contributed to preserve the whole country from a serious commercial revulsion, such as often occurred under the bank deposit system.  In the year 1847 there was a revulsion in the business of Great Britain of great extent and intensity, which was followed by failures in that Kingdom unprecedented in number and amount of losses.  This is believed to be the first instance when such disastrous bankruptcies, occurring in a country with which we have such extensive commerce, produced little or no injurious effect upon our trade or currency.  We remained but little affected in our money market, and our business and industry were still prosperous and progressive.

During the present year nearly the whole continent of Europe has been convulsed by civil war and revolutions, attended by numerous bankruptcies, by an unprecedented fall in their public securities, and an almost universal paralysis of commerce and industry; and yet, although our trade and the prices of our products must have been somewhat unfavorably affected by these causes, we have escaped a revulsion, our money market is comparatively easy, and public and private credit have advanced and improved.

It is confidently believed that we have been saved from their effect by the salutary operation of the constitutional treasury.  It is certain that if the twenty-four millions of specie imported into the country during the fiscal year ending on the 30th of June, 1847, had gone into the banks, as to a great extent it must have done, it would in the absence of this system have been made the basis of augmented bank paper issues, probably to an amount not less than $60,000,000 or $70,000,000, producing, as an inevitable consequence of an inflated currency, extravagant prices for a time and wild speculation, which must have been followed, on the reflux to Europe the succeeding year of so much of that specie, by the prostration of the business of the country, the suspension of the banks, and most extensive bankruptcies.  Occurring, as this would have done, at a period when the country was engaged in a foreign war, when considerable loans of specie were required for distant disbursements, and when the banks, the fiscal agents of the Government and the depositories of its money, were suspended, the public credit must have sunk, and many millions of dollars, as was the case during the War of 1812, must have been sacrificed in discounts upon loans and upon the depreciated paper currency which the Government would have been compelled to use.

Under the operations of the constitutional treasury not a dollar has been lost by the depreciation of the currency.  The loans required to prosecute the war with Mexico were negotiated by the Secretary of the Treasury above par, realizing a large premium to the Government.  The restraining effect of the system upon the tendencies to excessive paper issues by banks has saved the Government from heavy losses and thousands of our business men from bankruptcy and ruin.  The wisdom of the system has been tested by the experience of the last two years, and it is the dictate of sound policy that it should remain undisturbed.  The modifications in some of the details of this measure, involving none of its essential principles, heretofore recommended, are again presented for your favorable consideration.