consists in leaving individuals and States as much as possible to themselves; in making itself felt, not in its power, but in its beneficence; not in its control, but in its protection; not in binding the States more closely to the center, but leaving each to move unobstructed in its proper constitutional orbit.”  These are the teachings of men whose deeds and services have made them illustrious, and who, long since withdrawn from the scenes of life, have left to their country the rich legacy of their example, their wisdom, and their patriotism.  Drawing fresh inspiration from their lessons, let us emulate them in love of country and respect for the Constitution and the laws.

The report of the Secretary of the Treasury affords much information respecting the revenue and commerce of the country.  His views upon the currency and with reference to a proper adjustment of our revenue system, internal as well as impost, are commended to the careful consideration of Congress.  In my last annual message I expressed my general views upon these subjects.  I need now only call attention to the necessity of carrying into every department of the Government a system of rigid accountability, thorough retrenchment, and wise economy.  With no exceptional nor unusual expenditures, the oppressive burdens of taxation can be lessened by such a modification of our revenue laws as will be consistent with the public faith and the legitimate and necessary wants of the Government.

The report presents a much more satisfactory condition of our finances than one year ago the most sanguine could have anticipated.  During the fiscal year ending the 30th June, 1865 (the last year of the war), the public debt was increased $941,902,537, and on the 31st of October, 1865, it amounted to $2,740,854,750.  On the 31st day of October, 1866, it had been reduced to $2,551,310,006, the diminution during a period of fourteen months, commencing September 1, 1865, and ending October 31, 1866, having been $206,379,565.  In the last annual report on the state of the finances it was estimated that during the three quarters of the fiscal year ending the 30th of June last the debt would be increased $112,194,947.  During that period, however, it was reduced $31,196,387, the receipts of the year having been $89,905,905 more and the expenditures $200,529,235 less than the estimates.  Nothing could more clearly indicate than these statements the extent and availability of the national resources and the rapidity and safety with which, under our form of government, great military and naval establishments can be disbanded and expenses reduced from a war to a peace footing.