In my message of the 6th of July last, transmitting to Congress the ratified treaty of peace with Mexico, I recommended the adoption of measures for the speedy payment of the public debt.  In reiterating that recommendation I refer you to the considerations presented in that message in its support.  The public debt, including that authorized to be negotiated in pursuance of existing laws, and including Treasury notes, amounted at that time to $65,778,450.41.

Funded stock of the United States amounting to about half a million of dollars has been purchased, as authorized by law, since that period, and the public debt has thus been reduced, the details of which will be presented in the annual report of the Secretary of the Treasury.

The estimates of expenditures for the next fiscal year, submitted by the Secretary of the Treasury, it is believed will be ample for all necessary purposes.  If the appropriations made by Congress shall not exceed the amount estimated, the means in the Treasury will be sufficient to defray all the expenses of the Government, to pay off the next installment of $3,000,000 to Mexico, which will fall due on the 30th of May next, and still a considerable surplus will remain, which should be applied to the further purchase of the public stock and reduction of the debt.  Should enlarged appropriations be made, the necessary consequence will be to postpone the payment of the debt.  Though our debt, as compared with that of most other nations, is small, it is our true policy, and in harmony with the genius of our institutions, that we should present to the world the rare spectacle of a great Republic, possessing vast resources and wealth, wholly exempt from public indebtedness.  This would add still more to our strength, and give to us a still more commanding position among the nations of the earth.

The public expenditures should be economical, and be confined to such necessary objects as are clearly within the powers of Congress.  All such as are not absolutely demanded should be postponed, and the payment of the public debt at the earliest practicable period should be a cardinal principle of our public policy.

For the reason assigned in my last annual message, I repeat the recommendation that a branch of the Mint of the United States be established at the city of New York.  The importance of this measure is greatly increased by the acquisition of the rich mines of the precious metals in New Mexico and California, and especially in the latter.

I repeat the recommendation heretofore made in favor of the graduation and reduction of the price of such of the public lands as have been long offered in the market and have remained unsold, and in favor of extending the rights of preemption to actual settlers on the unsurveyed as well as the surveyed lands.

The condition and operations of the Army and the state of other branches of the public service under the supervision of the War Department are satisfactorily presented in the accompanying report of the Secretary of War.