I am deeply sensible of the immense responsibility which the present magnitude of the Republic and the diversity and multiplicity of its interests devolves upon me, the alleviation of which so far as relates to the immediate conduct of the public business, is, first, in my reliance on the wisdom and patriotism of the two Houses of Congress, and, secondly, in the directions afforded me by the principles of public polity affirmed by our fathers of the epoch of 1798, sanctioned by long experience, and consecrated anew by the overwhelming voice of the people of the United States.

Recurring to these principles, which constitute the organic basis of union, we perceive that vast as are the functions and the duties of the Federal Government, vested in or intrusted to its three great departments—­the legislative, executive, and judicial—­yet the substantive power, the popular force, and the large capacities for social and material development exist in the respective States, which, all being of themselves well-constituted republics, as they preceded so they alone are capable of maintaining and perpetuating the American Union.  The Federal Government has its appropriate line of action in the specific and limited powers conferred on it by the Constitution, chiefly as to those things in which the States have a common interest in their relations to one another and to foreign governments, while the great mass of interests which belong to cultivated men—­the ordinary business of life, the springs of industry, all the diversified personal and domestic affairs of society—­rest securely upon the general reserved powers of the people of the several States.  There is the effective democracy of the nation, and there the vital essence of its being and its greatness.

Of the practical consequences which flow from the nature of the Federal Government, the primary one is the duty of administering with integrity and fidelity the high trust reposed in it by the Constitution, especially in the application of the public funds as drawn by taxation from the people and appropriated to specific objects by Congress.

Happily, I have no occasion to suggest any radical changes in the financial policy of the Government.  Ours is almost, if not absolutely, the solitary power of Christendom having a surplus revenue drawn immediately from imposts on commerce, and therefore measured by the spontaneous enterprise and national prosperity of the country, with such indirect relation to agriculture, manufactures, and the products of the earth and sea as to violate no constitutional doctrine and yet vigorously promote the general welfare.  Neither as to the sources of the public treasure nor as to the manner of keeping and managing it does any grave controversy now prevail, there being a general acquiescence in the wisdom of the present system.

The report of the Secretary of the Treasury will exhibit in detail the state of the public finances and the condition of the various branches of the public service administered by that Department of the Government.