The vast resources of the nation, both developed and undeveloped, ought to make our credit the best on earth.  With a less burden of taxation than the citizen has endured for six years past, the entire public debt could be paid in ten years.  But it is not desirable that the people should be taxed to pay it in that time.  Year by year the ability to pay increases in a rapid ratio.  But the burden of interest ought to be reduced as rapidly as can be done without the violation of contract.  The public debt is represented in great part by bonds having from five to twenty and from ten to forty years to run, bearing interest at the rate of 6 per cent and 5 per cent, respectively.  It is optional with the Government to pay these bonds at any period after the expiration of the least time mentioned upon their face.  The time has already expired when a great part of them may be taken up, and is rapidly approaching when all may be.  It is believed that all which are now due may be replaced by bonds bearing a rate of interest not exceeding 4 1/2 per cent, and as rapidly as the remainder become due that they may be replaced in the same way.  To accomplish this it may be necessary to authorize the interest to be paid at either of three or four of the money centers of Europe, or by any assistant treasurer of the United States, at the option of the holder of the bond.  I suggest this subject for the consideration of Congress, and also, simultaneously with this, the propriety of redeeming our currency, as before suggested, at its market value at the time the law goes into effect, increasing the rate at which currency shall be bought and sold from day to day or week to week, at the same rate of interest as Government pays upon its bonds.

The subjects of tariff and internal taxation will necessarily receive your attention.  The revenues of the country are greater than the requirements, and may with safety be reduced.  But as the funding of the debt in a 4 or a 4 1/2 per cent loan would reduce annual current expenses largely, thus, after funding, justifying a greater reduction of taxation than would be now expedient, I suggest postponement of this question until the next meeting of Congress.

It may be advisable to modify taxation and tariff in instances where unjust or burdensome discriminations are made by the present laws, but a general revision of the laws regulating this subject I recommend the postponement of for the present.  I also suggest the renewal of the tax on incomes, but at a reduced rate, say of 3 per cent, and this tax to expire in three years.

With the funding of the national debt, as here suggested, I feel safe in saying that taxes and the revenue from imports may be reduced safely from sixty to eighty millions per annum at once, and may be still further reduced from year to year, as the resources of the country are developed.

The report of the Secretary of the Treasury shows the receipts of the Government for the fiscal year ending June 30, 1869, to be $370,943,747, and the expenditures, including interest, bounties, etc., to be $321,490,597.  The estimates for the ensuing year are more favorable to the Government, and will no doubt show a much larger decrease of the public debt.