If provision be made for the payment of the indebtedness of the Government in the manner suggested, our nation will rapidly recover its wonted prosperity.  Its interests require that some measure should be taken to release the large amount of capital invested in the securities of the Government.  It is not now merely unproductive, but in taxation annually consumes $150,000,000, which would otherwise be used by our enterprising people in adding to the wealth of the nation.  Our commerce, which at one time successfully rivaled that of the great maritime powers, has, rapidly diminished, and our industrial interests are in a depressed and languishing condition.  The development of our inexhaustible resources is checked, and the fertile fields of the South are becoming waste for want of means to till them.  With the release of capital, new life would be infused into the paralyzed energies of our people and activity and vigor imparted to every branch of industry.  Our people need encouragement in their efforts to recover from the effects of the rebellion and of injudicious legislation, and it should be the aim of the Government to stimulate them by the prospect of an early release from the burdens which impede their prosperity.  If we can not take the burdens from their shoulders, we should at least manifest a willingness to help to bear them.

In referring to the condition of the circulating medium, I shall merely reiterate substantially that portion of my last annual message which relates to that subject.

The proportion which the currency of any country should bear to the whole value of the annual produce circulated by its means is a question upon which political economists have not agreed.  Nor can it be controlled by legislation, but must be left to the irrevocable laws which everywhere regulate commerce and trade.  The circulating medium will ever irresistibly flow to those points where it is in greatest demand.  The law of demand and supply is as unerring as that which regulates the tides of the ocean; and, indeed, currency, like the tides, has its ebbs and flows throughout the commercial world.

At the beginning of the rebellion the bank-note circulation of the country amounted to not much more than $200,000,000; now the circulation of national-bank notes and those known as “legal-tenders” is nearly seven hundred millions.  While it is urged by some that this amount should be increased, others contend that a decided reduction is absolutely essential to the best interests of the country.  In view of these diverse opinions, it may be well to ascertain the real value of our paper issues when compared with a metallic or convertible currency.  For this purpose let us inquire how much gold and silver could be purchased by the seven hundred millions of paper money now in circulation.  Probably not more than half the amount of the latter; showing that when our paper currency is compared with gold and silver its commercial value