to discern it. Unwilling, however, to inaugurate a novel
policy in regard to them without the approbation of Congress, I submit for
your consideration the expediency of an appropriation for maintaining
a charge d'affaires near each of those new States. It does not admit of
doubt that important commercial advantages might be secured by favorable
treaties with them.

The operations of the treasury during the period which has elapsed since
your adjournment have been conducted with signal success. The patriotism
of the people has placed at the disposal of the government the large means
demanded by the public exigencies. Much of the national loan has been
taken by citizens of the industrial classes, whose confidence in their
country's faith and zeal for their country's deliverance from present
peril have induced them to contribute to the support of the government
the whole of their limited acquisitions. This fact imposes peculiar
obligations to economy in disbursement and energy in action.

The revenue from all sources, including loans, for the financial year
ending on the 30th of June, 1861, was $86,835,900.27, and the expenditures
for the same period, including payments on account of the public debt,
were $84,578,834.47, leaving a balance in the treasury on the 1st of July
of $2,257,065.80. For the first quarter of the financial year ending on
the 30th of September, 1861, the receipts from all sources, including
the balance of the 1st of July, were $102,532,509.27, and the expenses
$98,239733.09, leaving a balance on the 1st of October, 1861, of
$4,292,776.18.

Estimates for the remaining three quarters of the year and for the
financial year 1863, together with his views of ways and means for meeting
the demands contemplated by them, will be submitted to Congress by the
Secretary of the Treasury. It is gratifying to know that the expenditures
made necessary by the rebellion are not beyond the resources of the
loyal people, and to believe that the same patriotism which has thus far
sustained the government will continue to sustain it till peace and union
shall again bless the land.

I respectfully refer to the report of the Secretary of War for information
respecting the numerical strength of the army and for recommendations
having in view an increase of its efficiency and the well-being of the
various branches of the service intrusted to his care. It is gratifying to
know that the patriotism of the people has proved equ