The payments into the Treasury from the proceeds of the sales of the public lands during the present year were estimated at $1,000,000.  The actual receipts of the first two quarters have fallen very little short of that sum; it is not expected that the second half of the year will be equally productive, but the income of the year from that source may now be safely estimated at $1,500,000.  The act of Congress of May 18th, 1824, to provide for the extinguishment of the debt due to the United States by the purchasers of public lands, was limited in its operation of relief to the purchaser to the 10th of April last.  Its effect at the end of the quarter during which it expired was to reduce that debt from $10,000,000 to $7,000,000 By the operation of similar prior laws of relief, from and since that of March 2d, 1821, the debt had been reduced from upward of $22,000,000 to $10,000,000.

It is exceedingly desirable that it should be extinguished altogether; and to facilitate that consummation I recommend to Congress the revival for one year more of the act of May 18th, 1824, with such provisional modification as may be necessary to guard the public interests against fraudulent practices in the resale of the relinquished land.

The purchasers of public lands are among the most useful of our fellow citizens, and since the system of sales for cash alone has been introduced great indulgence has been justly extended to those who had previously purchased upon credit.  The debt which had been contracted under the credit sales had become unwieldy, and its extinction was alike advantageous to the purchaser and to the public.  Under the system of sales, matured as it has been by experience, and adapted to the exigencies of the times, the lands will continue as they have become, an abundant source of revenue; and when the pledge of them to the public creditor shall have been redeemed by the entire discharge of the national debt, the swelling tide of wealth with which they replenish the common Treasury may be made to reflow in unfailing streams of improvement from the Atlantic to the Pacific Ocean.

The condition of the various branches of the public service resorting from the Department of War, and their administration during the current year, will be exhibited in the report of the Secretary of War and the accompanying documents herewith communicated.  The organization and discipline of the Army are effective and satisfactory.  To counteract the prevalence of desertion among the troops it has been suggested to withhold from the men a small portion of their monthly pay until the period of their discharge; and some expedient appears to be necessary to preserve and maintain among the officers so much of the art of horsemanship as could scarcely fail to be found wanting on the possible sudden eruption of a war, which should take us unprovided with a single corps of cavalry.