An account of the receipts and expenditures of the last year, as prepared by the Secretary of the Treasury, will, as usual, be laid before you. The success which has attended the late sales of the public lands shews that with attention they may be made an important source of receipt. Among the payments those made in discharge of the principal and interest of the national debt will shew that the public faith has been exactly maintained. To these will be added an estimate of appropriations necessary for the ensuing year. This last will, of course, be affected by such modifications of the system of expense as you shall think proper to adopt. A statement has been formed by the Secretary of War, on mature consideration, of all the posts and stations where garrisons will be expedient and of the number of men requisite for each garrison. The whole amount is considerably short of the present military establishment. For the surplus no particular use can be pointed out. For defense against invasion their number is as nothing, nor is it conceived needful or safe that a standing army should be kept up in time of peace for that purpose. Uncertain as we must ever be of the particular point in our circumference where an enemy may choose to invade us, the only force which can be ready at every point and competent to oppose them is the body of neighboring citizens as formed into a militia. On these, collected from the parts most convenient in numbers proportioned to the invading force, it is best to rely not only to meet the first attack, but if it threatens to be permanent to maintain the defense until regulars may be engaged to relieve them. These considerations render it important that we should at every session continue to amend the defects which from time to time shew themselves in the laws for regulating the militia until they are sufficiently perfect. Nor should we now or at any time separate until we can say we have done everything for the militia which we could do were an enemy at our door. The provision of military stores on hand will be laid before you, that you may judge of the additions still requisite. With respect to the extent to which our naval preparations should be carried some difference of opinion may be expected to appear, but just attention to the circumstances of every part of the Union will doubtless reconcile all. A small force will probably continue to be wanted for actual service in the Mediterranean. Whatever annual sum beyond that you may think proper to appropriate to naval preparations would perhaps be better employed in providing those articles which may be kept without waste or consumption, and be in readiness when any exigence calls them into use. Progress has been made, as will appear by papers now communicated, in providing materials for 74-gun ships as directed by law.