.43
in August, 1865, and has since that time been reduced to
$1,886,019,504.65. Of the principal of the debt, $108,758,100 has been
paid since March 1, 1877, effecting an annual saving of interest of
$6,107,593. The burden of interest has also been diminished by the
sale of bonds bearing a low rate of interest and the application of
the proceeds to the redemption of bonds bearing a higher rate. The
annual saving thus secured since March 1, 1877, is $14,290,453.50.
Within a short period over six hundred millions of 5 and 6 per
cent bonds will become redeemable. This presents a very favorable
opportunity not only to further reduce the principal of the debt, but
also to reduce the rate of interest on that which will remain unpaid.
I call the attention of Congress to the views expressed on this
subject by the Secretary of the Treasury in his annual report, and
recommend prompt legislation to enable the Treasury Department to
complete the refunding of the debt which is about to mature.

The continuance of specie payments has not been interrupted or
endangered since the date of resumption. It has contributed greatly
to the revival of business and to our remarkable prosperity. The fears
that preceded and accompanied resumption have proved groundless. No
considerable amount of United States notes have been presented for
redemption, while very large sums of gold bullion, both domestic and
imported, are taken to the mints and exchanged for coin or notes. The
increase of coin and bullion in the United States since January 1,
1879, is estimated at $227,399,428.

There are still in existence, uncanceled, $346,681,016 of United
States legal-tender notes. These notes were authorized as a war
measure, made necessary by the exigencies of the conflict in which
the United States was then engaged. The preservation of the nation's
existence required, in the judgment of Congress, an issue of
legal-tender paper money. That it served well the purpose for which
it was created is not questioned, but the employment of the notes as
paper money indefinitely, after the accomplishment of the object for
which they were provided, was not contemplated by the framers of the
law under which they were issued. These notes long since became, like
any other pecuniary obligation of the Government, a debt to be paid,
and when paid to be canceled as mere evidence of an indebtedness
no longer existing. I therefore repeat what was said in the annual
message of