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Annual Message.

Operations of the Treasury.

Receipts and Expenditures.

"The operations of the Treasury during the last year have been successfully conducted. The enactment by Congress of a National Banking Law has proved a valuable support of the public credit; and the general legislation in relation to loans has fully answered the expectations of its favorers. Some amendments may be required to perfect existing laws; but no change in their principles or general scope is believed to be needed.

"Since these measures have been in operation, all demands on the Treasury, including the pay of the Army and Navy, have been promptly met and fully satisfied. No considerable body of troops, it is believed, were ever more amply provided and more liberally and punctually paid; and it may be added that by no people were the burdens incident to a great war ever more cheerfully borne.

"The receipts during the year from all sources, including loans and the balance in the Treasury at its commencement, were $901,125,674 86, and the aggregate disbursements, $895,796,630 65, leaving a balance on the 1st of July, 1863, of $5,329,044 21. Of the receipts there were derived rom customs, $69,059,642 40; from internal revenue, $37,640,787 95; from direct tax, $1,485,103 61; from lands, $167,617 17; from miscellaneous sources, $3,046,615 35; and from loans, $776,682,361 57; making the aggregate, $901,125,674 86. Of the disbursements, there were, for the civil service, $23,253,922 08; for pensions and Indians, $4,216,520 79; for interest on public debt, $24,729,846 51; for the War Department, $599,298,600 83; for the Navy Department, $63,211,105 27; for payment of funded and temporary debt, $181,086,635 07; making the aggregate, $895,796,630 65; and leaving the balance of $5,329,044 21. But the payment of funded and temporary debt, having been made from moneys borrowed during the year, must be regarded as merely nominal payments, and the moneys borrowed to make them as merely nominal receipts; and

Annual Message.

Receipts and Expenditures.

Report of the Secretary of War.

their amount, $181,086,635 07, should therefore be deducted both from receipts and disbursements. This being done, there remain as actual receipts, $720,039,039 79; and the actual disbursements, $714,709,995 58, leaving the balance as already stated.

It is sufficient to

"The actual receipts and disbursements for the first quarter, and the estimated receipts and disbursements for the remaining three quarters, of the current fiscal year 1864, will be shown in detail by the report of the Secretary of the Treasury, to which I invite your attention. say here that it is not believed that actual results will exhibit a state of the finances less favorable to the country than the estimates of that officer heretofore submitted; while it is confidently expected that at the close of the year both disbursements and debt will be found very considerably less than has been anticipated.

"The report of the Secretary of War is a document of great interest. It consists of

"1. The military operations of the year, detailed in the report of the General-in-Chief.

"2. The organization of colored persons into the war service.

"3. The exchange of prisoners, fully set forth in the letter of General Hitchcock.

"4. The operations under the act for enrolling and calling out the National forces, detailed in the report of the Provost Marshal General.

"5. The organization of the Invalid Corps; and,

"6. The operation of the several departments of the Quartermaster General, Commissary General, Paymaster General, Chief of Engineers, Chief of Ordnance, and Surgeon General.

"It has appeared impossible to make a valuable summary of this report, except such as would be too extended for this

Annual Message.

Efficiency of the Blockade.

The Naval Force.

place, and hence I content myself by asking your careful attention to the report itself.

"The duties devolving on the Naval branch of the service during the year, and throughout the whole of this unhappy contest, have been discharged with fidelity and eminent success. The extensive blockade has been constantly increasing in efficiency, and the Navy has expanded; yet on so long a line it has so far been impossible to entirely suppress illicit trade. From returns received at the Navy Department, it appears that more than one thousand vessels have been captured since the blockade was instituted, and that the value of prizes already sent in for adjudication, amounts to over thirteen million dollars.

"The naval force of the United States consists, at this time, of five hundred and eighty-eight vessels, completed and in the course of completion, and of these seventy-five are iron-clad or armored steamers. The events of the war give an increased interest and importance to the Navy, which will probably extend beyond the war itself.

"The armored vessels in our Navy, completed and in service, or which are under contract and approaching completion, are believed to exceed in number those of any other Power. But while these may be relied upon for harbor defence and coast service, others, of greater strength and capacity, will be necessary for cruising purposes, and to maintain our rightful position on the ocean.

"The change that has taken place in naval vessels and naval warfare since the introduction of steam as a motive power for ships-of-war, demands either a corresponding change in some of our existing navy-yards, or the establishment of new ones, for the construction and necessary repairs of modern naval vessels. No inconsiderable embarrassment, delay, and public injury have been experienced from the want of such Governmental establishments. The necessity of such a navy-yard, so furnished, at some suitable place upor the

Ani ual Message.

The Navy.


Atlantic seaboard, has, on repeated occasions, been brought to the attention of Congress by the Navy Department, and is again presented in the report of the Secretary which accompanies this communication. I think it my duty to invite your special attention to this subject, and also to that of establishing a yard and depot for naval purposes upon one of the Western rivers. A naval force has been created on those interior waters, and under many disadvantages, within little more than two years, exceeding in numbers the whole naval force of the country at the commencement of the present Administration. Satisfactory and important as have been the performances of the heroic men of the Navy at this interesting period, they are scarcely more wonderful than the success of our mechanics and artisans in the production of war vessels, which has created a new form of naval power.

"Our country has advantages superior to any other nation in our resources of iron and timber, with inexhaustible quantities of fuel in the immediate vicinity of both, and all available and in close proximity to navigable waters. Without the advantage of public works, the resources of the nation have been developed, and its power displayed, in the construction of a navy of such magnitude, which has, at the very period of its creation, rendered signal service to the Union.

"The increase of the number of seamen in the public service, from seven thousand five hundred men in the spring of 1861, to about thirty-four thousand at the present time, has been accomplished without special legislation or extraordinary bounties to promote that increase. It has been found, however, that the operation of the draft, with the high bounties paid for army recruits, is beginning to affect injuriously the naval service, and will, if not corrected, be likely to impair its efficiency, by detaching seamen from their proper vocation and inducing them to enter the army. I therefore respectfully suggest that Congress might aid both the army and

Annual Message.

The Navy.

Post Office Department

naval services by a definite provision on this subject, which would at the same time be equitable to the communities more especially interested.

"I commend to your consideration the suggestions of the Secretary of the Navy in regard to the policy of fostering and training seamen, and also the education of officers and engi. neers for the naval service. The Naval Academy is rendering signal service in preparing midshipmen for the highly responsible duties which in after-life they will be required to perform. In order that the country should not be deprived of the proper quota of educated officers for which legal provision has been made at the Naval School, the vacancies caused by the neglect or omission to make nominations from the States in insurrection have been filled by the Secretary of the Navy. The school is now more full and complete than at any former period, and in every respect entitled to the favorable consideration of Congress.

"During the past fiscal year the financial condition of the Post Office Department has been one of increasing prosperity, and I am gratified in being able to state that the actual postal revenue has nearly equaled the entire expenditures; the latter amounting to $11,314,206 84, and the former to $11,163,789 59, leaving a deficiency of but $150,417 25. In 1860, the year immediately preceding the rebellion, the deficiency amounted to $5,656,705 49, the postal receipts of that year being $2,645,722 19 less than those of 1863. The decrease since 1860 in the annual amount of transportation has been only about twenty-five per cent., but the annual expenditure on account of the same has been reduced thirty-five per cent. It is manifest, therefore, that the Post Office Department may become self-sustaining in a few years, even with the restoration of the whole service.

"The quantity of land disposed of during the last and the first quarter of the present fiscal years was 3,841,549 acres, of which 161,911 acres were sold for cash, 1,456,514 acres

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