, as does our friendly intercourse with the other Governments
of South America--the Argentine Republic and the Republics of Uruguay,
Chili, Peru, and Bolivia. The dissolution of the Peru-Bolivian
Confederation may occasion some temporary inconvenience to our citizens
in that quarter, but the obligations on the new Governments which have
arisen out of that Confederation to observe its treaty stipulations will
no doubt be soon understood, and it is presumed that no indisposition
will exist to fulfill those which it contracted with the United States.

The financial operations of the Government during the present year have,
I am happy to say, been very successful. The difficulties under which
the Treasury Department has labored, from known defects in the existing
laws relative to the safe-keeping of the public moneys, aggravated by
the suspension of specie payments by several of the banks holding public
deposits or indebted to public officers for notes received in payment of
public dues, have been surmounted to a very gratifying extent. The large
current expenditures have been punctually met, and the faith of the
Government in all its pecuniary concerns has been scrupulously
maintained.

The nineteen millions of Treasury notes authorized by the act of
Congress of 1837, and the modifications thereof with a view to the
indulgence of merchants on their duty bonds and of the deposit banks
in the payment of public moneys held by them, have been so punctually
redeemed as to leave less than the original ten millions outstanding at
any one time, and the whole amount unredeemed now falls short of three
millions. Of these the chief portion is not due till next year, and
the whole would have been already extinguished could the Treasury have
realized the payments due to it from the banks. If those due from them
during the next year shall be punctually made, and if Congress shall
keep the appropriations within the estimates, there is every reason to
believe that all the outstanding Treasury notes can be redeemed and the
ordinary expenses defrayed without imposing on the people any additional
burden, either of loans or increased taxes.

To avoid this and to keep the expenditures within reasonable bounds is
a duty second only in importance to the preservation of our national
character and the protection of our citizens in their civil and
political rights. The creation in time of peace of a debt likely to
become permanent is an evil for