The financial operations of the Government during the present year have, I am happy to say, been very successful.  The difficulties under which the Treasury Department has labored, from known defects in the existing laws relative to the safe-keeping of the public moneys, aggravated by the suspension of specie payments by several of the banks holding public deposits or indebted to public officers for notes received in payment of public dues, have been surmounted to a very gratifying extent.  The large current expenditures have been punctually met, and the faith of the Government in all its pecuniary concerns has been scrupulously maintained.

The nineteen millions of Treasury notes authorized by the act of Congress of 1837, and the modifications thereof with a view to the indulgence of merchants on their duty bonds and of the deposit banks in the payment of public moneys held by them, have been so punctually redeemed as to leave less than the original ten millions outstanding at any one time, and the whole amount unredeemed now falls short of three millions.  Of these the chief portion is not due till next year, and the whole would have been already extinguished could the Treasury have realized the payments due to it from the banks.  If those due from them during the next year shall be punctually made, and if Congress shall keep the appropriations within the estimates, there is every reason to believe that all the outstanding Treasury notes can be redeemed and the ordinary expenses defrayed without imposing on the people any additional burden, either of loans or increased taxes.

To avoid this and to keep the expenditures within reasonable bounds is a duty second only in importance to the preservation of our national character and the protection of our citizens in their civil and political rights.  The creation in time of peace of a debt likely to become permanent is an evil for which there is no equivalent.  The rapidity with which many of the States are apparently approaching to this condition admonishes us of our own duties in a manner too impressive to be disregarded.  One, not the least important, is to keep the Federal Government always in a condition to discharge with ease and vigor its highest functions should their exercise be required by any sudden conjuncture of public affairs—­a condition to which we are always exposed and which may occur when it is least expected.  To this end it is indispensable that its finances should be untrammeled and its resources as far as practicable unencumbered.  No circumstance could present greater obstacles to the accomplishment of these vitally important objects than the creation of an onerous national debt.  Our own experience and also that of other nations have demonstrated the unavoidable and fearful rapidity with which a public debt is increased when the Government has once surrendered itself to the ruinous practice of supplying its supposed necessities by new loans.  The struggle, therefore,