outbreaks may occur, such as are incident to the proximity of border settlers and the Indians, but these, as in all other cases, may be left to the care of the local authorities, aided, when occasion may require, by the forces of the United States. A sufficient number of troops will be maintained in Florida, so long as the remotest apprehensions of danger shall exist; yet their duties will be limited to the garrisoning of the necessary posts, rather than to the maintenance of active hostilities. It is to be hoped, that a territory so long retarded in its growth will now speedily recover from the evils incident to a protracted war, exhibiting, in the increased amount of its rich productions, true evidences of returning wealth and prosperity.

"The balance in the Treasury on the 1st of January, 1842, (exclusive of the amount deposited with the state, trust funds, and indemnities,) was dlrs. 230,483 68. The receipts into the Treasury during the three first quarters of the present year from all sources, amount to dlrs. 26,616,594 18, of which 14,000,000 dollars were received from customs, and about 1,000,000 dollars from the public lands. The receipts for the fourth quarter are estimated at nearly 8,000,000 dollars, of which 4,000,000 dollars are expected from customs, and 3,500,000 dollars from loans and treasury notes. The expenditures of the first three quarters of the present year exceed 26,000,000 dollars, and those estimated for the fourth quarter amount to about 8,000,000 dollars, and it is anticipated there will be a deficiency of 5,000,000 dollars on the 1st of January next, but that the amount of outstanding warrants (estimated at 800,000

dollars) will leave an actual balance of about 224,000 dollars in the Treasury. Among the expenditures of the year, are more than 8,000,000 dollars for the public debt, and 600,000 dollars on account of the distribution to the States of the proceeds of sales of the public lands.

"The present tariff of duties was somewhat hastily and hurriedly passed near the close of the late Session of Congress. That it should have defects can, therefore, be surprising to no one. To remedy such defects as may be found to exist in many of its numerous provisions will not fail to claim your serious attention. It may well merit inquiry, whether the exaction of all duties in cash does not call for the introduction of a system which has proved highly beneficial in countries where it has been adopted. I refer to the warehousing system. The first and most prominent effect which it would produce would be to protect the market alike against redundant or deficient supplies of foreign fabrics, both of which, in the long run, are injurious as well to the manufacturer as the importer.

"The quantity of goods in store being at all times readily known, it would enable the importer, with an approach to accuracy, to ascertain the actual wants of the market, and to regulate himself accordingly. If, however, he should fall into error by importing an excess above the public wants, he could readily correct its evils by availing himself of the benefit and advantages of the system thus established. established. In the storehouse the goods imported would await the demands of the market, and their issues would be governed by the fixed principles of demand and

supply. Thus an approximation would be made to a steadiness and uniformity of price, which if attainable, would conduce to the decided advantage of mercantile and mechanical operations.

"The apprehension may be well entertained, that without something to ameliorate the rigour of cash payments, the entire import trade may fall into the hands of a few wealthy capitalists in this country and in Europe. The small importer, who requires all the money he can raise for investments abroad, and who can but ill-afford to pay the lowest duty, would have to subduct in advance a portion of his funds in order to pay the duties, and would lose the interest upon the amount thus paid for all the time the goods might remain unsold, which might absorb his profits. The rich capitalist abroad, as well as at home, would thus possess, after a short time, an almost exclusive monopoly of the import trade, and laws designed for the benefit of all, would thus operate for the benefit of a few a result wholly uncongenial with the spirit of our institutions, and anti-republican in all its tenden

cies.

"The warehousing system would enable the importer to watch the market and to select his own time for offering his goods for sale. A profitable portion of the carrying trade in articles entered for drawback must also be most seriously affected, without the adoption of some expedient to relieve the cash system. The warehousing system would afford that relief, since the carrier would have a safe recourse to the public storehouses, and might, without advancing the duty, reship within some reasonable period to foreign ports. A further

effect of the measure would be to supersede the system of drawbacks, thereby effectually protecting the Government against fraud, as the right of debenture would not attach to goods after their withdrawal from the public stores.

"The report of the Secretary of the Navy will bring you acquainted with that important

branch of the public defences. Considering the already vast and daily increasing commerce of the country, apart from the exposure to hostile inroad of an extended seaboard, all that relates to the navy is calculated to excite particular attention. Whatever tends to add to its efficiency, without entailing unnecessary charges upon the treasury, is well worthy of your serious consideration. It will be seen, that while an appropriation excceding by less than a million the appropriations of the present year is asked by the secretary, yet that in this sum is proposed to be included 400,000 dollars for the purchase of clothing, which, when once expended, will be annually reimbursed by the sale of the clothes, and will thus constitute à perpetual fund, without any new appropriation to the same object.

"To this may also be added 50,000 dollars asked to cover the arrearages of past years; and 250,000 dollars in order to maintain a competent squadron on the coast of Africa; all of which when deducted will reduce the expenditures nearly within the limits of those of the current year. While, however, the expenditure will thus remain very nearly the same as in the antecedent year, it is proposed to add greatly to the operations of the marine, and in lieu of only twenty-five ships in commission,

and but little in the way of building, to keep, with the same expenditure, forty-one vessels afloat and to build eleven ships of a small class,

"At peace with all the world -the personal liberty of the citi zen maintained, and his rights secured under political institutions deriving all their authority from the direct sanction of the people with a soil fertile almost beyond example, and a country blessed with every diversity of climate and production, what remains to be done in order to advance the happiness and prosperity of such a people? Under ordinary circumstances this inquiry could be readily answered.

"The best that could probably be done for a people inhabiting such a country would be to fortify their peace and security in the prosecution of their various pursuits, by guarding them against invasion from without and violence from within. The rest, for the greater part, might be left to their own energy and enterprise. The chief embarrassments which at the moment exhibit themselves have arisen from overaction; and the most difficult task that remains to be accomplished is that of correcting and overcoming its effects. Between the years 1833 and 1838 additions were made to bank capital and bank issues, in the form of notes designed for circulation, to an extent enormously great. The question seemed to be not how the best currency could be provided, but in what manner the greatest amount of bank paper could be put in circulation.

"Thus a vast amount of what was called money-since, for the time being, it answered the purpose of money-was thrown upon

the country; an overissue which was attended, as a necessary conse. quence, by an extravagant increase of the prices of all the articles of property, the spread of a speculative mania all over the country, and has finally ended in a general indebtedness on the part of the states and individuals, the prostration of public and private credit, a depreciation in the market value of real and personal estate, and has left large districts of country almost entirely without any circulating medium.

"In view of the fact that, in 1830, the whole of the bank-note circulation within the United States amounted to but 61,323,893 dollars according to the Treasury statements, and that an addition had been made thereto of the enormous sum of 88,000,000 dollars, in seven years (the circulation on the 1st of January, 1837, being stated at 149,185,890), aided by the great facilities in obtaining loans from European capitalists, who were seized with the same speculative mania which prevailed in the United States, and the large importations of funds from abroad, the result of stock sales and loans, no one can be surprised at the apparent, but unsubstantial state of prosperity which everywhere prevailed over the land; and while little cause of surprise should be felt at the present prostration of every thing, and the ruin which has befallen so many of our fellow-citizens in the sudden withdrawal from circulation of so large an amount of bank issues since 1837, exceeding, as believed, the amount added to the paper currency for a similar period antecedent to 1837, it ceases to be a matter of astonishment that such extensive shipwreck should have

been made of private fortunes, or that difficulties should exist in meeting their engagements on the part of the debtor states.

"Apart from which, if there be taken into account the immense losses sustained in the dishonour of numerous banks, it is less a matter of surprise that insolvency should have visited many of our fellow-citizens than that so many should have escaped the blighting influence of the times.

"In the solemn conviction of hese truths, and with an ardent desire to meet the pressing necessities of the country, I felt it to be my duty to cause to be submitted to you, at the commencement of your late session, the plan of an Exchequer, the whole power and duty of maintaining which in purity and vigour, was to be exercised by the representatives of the people themselves. It was proposed to place it under the control and direction of a treasury board, to consist of three commissioners, whose duty it should be to see that the law of its creation was faithfully executed, and that the great end of supplying a paper medium of exchange at all times convertible into gold and silver should be attained.

"The board thus constituted was given as much permanency as could be imparted to it, without endangering the proper share of responsibility which should attach to all public agents. In order to secure all the advantages of a well-matured experience, the commissioners were to hold their offices for the respective periods of two, four, and six years, thereby securing at all times, in the management of the Exchequer, the services of two men of experience; and to place them in a condition to exercise

perfect independence of mind and action, it was provided that their removal should only take place for actual incapacity or infidelity to the trust, and to be followed by the President with an exposition of the cause of such removal, should it occur.

"It was proposed to establish subordinate boards in each of the states, under the same restrictions and limitations of the power of removal, which, with the central board, should receive, safely keep, and disburse the public monies; and in order to furnish a sound paper medium of exchange, the Exchequer should retain of the revenue of the government a sum not to exceed 5,000,000 dollars in specie, to be set apart as required by its operations, and to pay the public creditor at his own option, either in specie or Treasury notes, of denomination not less than 5 dollars, nor exceeding 100 dollars, which notes should be redeemed at the several places of issue, and to be receivable at all times and everywhere in payment of government dues, with a restraint upon such issue of bills that the same should not exceed the maximum of 15,000,000 dollars.

"In order to guard against all the hazards incident to fluctuations in trade, the Secretary of the Treasury was invested with authority to issue 5,000,000 dollars of government stock, should the same at any time be regarded as necessary, in order to place beyond hazard the prompt redemption of the bills which might be thrown into circulation. Thus, in fact, making the issue of 15,000,000 dollars of Exchequer-bills rest substantially on 10,000,000 dollars; and keeping in circulation never more than 1 dollars for every dollar in spe

cie. When to this it is added that the bills are not only everywhere receivable in government dues, but that the government itself would be bound for their ultimate redemption, no rational doubt can exist that the paper which the Exchequer would furnish would readily enter into general circulation, and be maintained at all times at or above par with gold or silver; thereby realizing the great want of the age, and fulfilling the wishes of the people.

"In order to reimburse the government the expences of the plan, it was proposed to invest the Exchequer with the limited authority to deal in bills of exchange, unless prohibited by the state in which an agency might be situated, having only thirty days to run, and resting on a fair and bona fide basis. The legislative will on this point might be so plainly announced as to avoid all pretext for partiality or favouritism. It was furthermore proposed to invest this Treasury agent with authority to receive on deposit, to a limited amount, the specie funds of individuals, and to grant certificates therefore to be redeemed on presentation, under the idea, which he believed to be well founded, that such certificates would come in aid of the Exchequer-bills in supplying a safe and ample paper circulation. Or, if in place of the contemplated dealings in exchange, the Exchequer should be authorized not only to exchange its bills for actual deposits of specie, but for specie or its equivalent to sell draughts, charging therefore a small but reasonable premium, I cannot doubt, but that the benefits of the law would be speedily manifest in the revival of the credit, the trade, and business of the whole

country. Entertaining this opinion, it becomes my duty to urge its adoption upon Congress, by reference to the strongest considerations of the public interests, with such alterations in its details as Congress may in its wisdom see fit to make.

"I am well aware that this proposed alteration and amendment of the laws establishing the Treasury department has encountered various objections, and that among others it has been proclaimed a government bank of fearful and dangerous import. It is proposed to confer upon it no extraordinary powers. It purports to do no more than the debts of the governpay ment with the redeemable paper of the government, in which respect it accomplishes precisely what the Treasury does daily at the time, in issuing to the public creditors the Treasury notes which it is authorized to issue. It has no resemblance to an ordinary bank, as it furnishes no profits to private stockholders, and lends no capital to individuals. If it be objected to as a government bank, and the objection be available, then should all the laws in relation to the Treasury be repealed, and the capacity of the government to collect what is due to it, or pay what it owes, be abrogated.

"This is the chief purpose of the proposed Exchequer; and surely, if, in the accomplishment of a purpose so essential, it affords a sound circulating medium to the country and facilitates to trade, it should be regarded as no slight recommendation of it to public consideration. Properly guarded by the provisions of law, it can run into no dangerous evils; nor can any abuse arise under it but such as the Legislature itself will be an