t the anticipated deficiency have not been entirely
adequate. Although on the 1st of October last there was a balance in the
Treasury, in consequence of the provisions thus made, of $3,914,082.77,
yet the appropriations already made by Congress will absorb that balance
and leave a probable deficiency of $2,000,000 at the close of the
present fiscal year. There are outstanding Treasury notes to about the
amount of $4,600,000, and should they be returned upon the Treasury
during the fiscal year they will require provision for their redemption.
I do not, however, regard this as probable, since they have obviously
entered into the currency of the country and will continue to form a
portion of it if the system now adopted be continued. The loan of 1841,
amounting to $5,672,976.88, falls due on the 1st day of January, 1845,
and must be provided for or postponed by a new loan; and unless the
resources of revenue should be materially increased by you there will be
a probable deficiency for the service of the fiscal year ending June 30,
1845, of upward of $4,000,000.

The delusion incident to an enormously excessive paper circulation,
which gave a fictitious value to everything and stimulated adventure and
speculation to an extravagant extent, has been happily succeeded by the
substitution of the precious metals and paper promptly redeemable in
specie; and thus false values have disappeared and a sounder condition
of things has been introduced. This transition, although intimately
connected with the prosperity of the country, has nevertheless been
attended with much embarrassment to the Government in its financial
concerns. So long as the foreign importers could receive payment for
their cargoes in a currency of greatly less value than that in Europe,
but fully available here in the purchase of our agricultural productions
(their profits being immeasurably augmented by the operation), the
shipments were large and the revenues of the Government became
superabundant. But the change in the character of the circulation from a
nominal and apparently real value in the first stage of its existence
to an obviously depreciated value in its second, so that it no longer
answered the purposes of exchange or barter, and its ultimate
substitution by a sound metallic and paper circulation combined, has
been attended by diminished importations and a consequent falling off
in the revenue. This has induced Congress, from 1837, to resort to the
ex