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President[ James Buchanan

         Date[ December 8, 1857

Fellow-Citizens of the Senate and House of Representatives:

In obedience to the command of the Constitution, it has now become my duty

"to give to Congress information of the state of the Union and recommend to

their consideration such measures" as I judge to be "necessary and

expedient."

But first and above all, our thanks are due to Almighty God for the

numerous benefits which He has bestowed upon this people, and our united

prayers ought to ascend to Him that He would continue to bless our great

Republic in time to come as He has blessed it in time past. Since the

adjournment of the last Congress our constituents have enjoyed an unusual

degree of health. The earth has yielded her fruits abundantly and has

bountifully rewarded the toil of the husbandman. Our great staples have

commanded high prices, and up till within a brief period our manufacturing,

mineral, and mechanical occupations have largely partaken of the general

prosperity. We have possessed all the elements of material wealth in rich

abundance, and yet, notwithstanding all these advantages, our country in

its monetary interests is at the present moment in a deplorable condition.

In the midst of unsurpassed plenty in all the productions of agriculture

and in all the elements of national wealth, we find our manufactures

suspended, our public works retarded, our private enterprises of different

kinds abandoned, and thousands of useful laborers thrown out of employment

and reduced to want. The revenue of the Government, which is chiefly

derived from duties on imports from abroad, has been greatly reduced,

whilst the appropriations made by Congress at its last session for the

current fiscal year are very large in amount.

Under these circumstances a loan may be required before the close of your

present session; but this, although deeply to be regretted, would prove to

be only a slight misfortune when compared with the suffering and distress

prevailing among the people. With this the Government can not fail deeply

to sympathize, though it may be without the power to extend relief.

It is our duty to inquire what has produced such unfortunate results and

whether their recurrence can be prevented. In all former revulsions the

blame might have been fairly attributed to a variety of cooperating causes,

but not so upon the present occasion. It is apparent that our existing

misfortunes have proceeded solely from our extravagant and vicious system

of paper currency and bank credits, exciting the people to wild

speculations and gambling in stocks. These revulsions must continue to

recur at successive intervals so long as the amount of the paper currency

and bank loans and discounts of the country shall be left to the discretion

of 1,400 irresponsible banking institutions, which from the very law of

their nature will consult the interest of their stockholders rather than

the public welfare.

The framers of the Constitution, when they gave to Congress the power "to

coin money and to regulate the value thereof" and prohibited the States

from coining money, emitting bills of credit, or making anything but gold

and silver coin a tender in payment of debts, supposed they had protected

the people against the evils of an excessive and irredeemable paper

currency. They are not responsible for the existing anomaly that a

Government endowed with the sovereign attribute of coining money and

regulating the value thereof should have no power to prevent others from

driving this coin out of the country and filling up the channels of

circulation with paper which does not represent gold and silver.

It is one of the highest and most responsible duties of Government to

insure to the people a sound circulating medium, the amount of which ought

to be adapted with the utmost possible wisdom and skill to the wants of

internal trade and foreign exchanges. If this be either greatly above or

greatly below the proper standard, the marketable value of every man's

property is increased or diminished in the same proportion, and injustice

to individuals as well as incalculable evils to the community are the

consequence.

Unfortunately, under the construction of the Federal Constitution which has

now prevailed too long to be changed this important and delicate duty has

been dissevered from the coining power and virtually transferred to more

than 1,400 State banks acting independently of each other and regulating

their paper issues almost exclusively by a regard to the present interest

of their stockholders. Exercising the sovereign power of providing a paper

currency instead of coin for the country, the first duty which these banks

owe to the public is to keep in their vaults a sufficient

amount of gold and silver to insure the convertibility of

their notes into coin at all times and under all circumstances.

No bank ought ever to be chartered without such restrictions

on its business as to secure this result. All other restrictions are

comparatively vain. This is the only true touchstone, the only efficient

regulator of a paper currency--the only one which can guard the public

against overissues and bank suspensions. As a collateral and eventual

security, it is doubtless wise, and in all cases ought to be required, that

banks shall hold an amount of United States or State securities equal to

their notes in circulation and pledged for their redemption. This, however,

furnishes no adequate security against overissue. On the contrary, it may

be perverted to inflate the currency. Indeed, it is possible by this means

to convert all the debts of the United States and State Governments into

bank notes, without reference to the specie required to redeem them.

However valuable these securities may be in themselves, they can not be

converted into gold and silver at the moment of pressure, as our experience

teaches, in sufficient time to prevent bank suspensions and the

depreciation of bank notes. In England, which is to a considerable extent a

paper-money country, though vastly behind our own in this respect, it was

deemed advisable, anterior to the act of Parliament of 1844, which wisely

separated the issue of notes from the banking department, for the Bank of

England always to keep on hand gold and silver equal to one-third of its

combined circulation and deposits. If this proportion was no more than

sufficient to secure the convertibility of its notes with the whole of

Great Britain and to some extent the continent of Europe as a field for its

circulation, rendering it almost impossible that a sudden and immediate run

to a dangerous amount should be made upon it, the same proportion would

certainly be insufficient under our banking system. Each of our 1,400 banks

has but a limited circumference for its circulation, and in the course of a

very few days the depositors and note holders might demand from such a bank

a sufficient amount in specie to compel it to suspend, even although it had

coin in its vaults equal to one-third of its immediate liabilities. And yet

I am not aware, with the exception of the banks of Louisiana, that any

State bank throughout the Union has been required by its charter to keep

this or any other proportion of gold and silver compared with the amount of

its combined circulation and deposits. What has been the consequence? In a

recent report made by the Treasury Department on the condition of the banks

throughout the different States, according to returns dated nearest to

January, 1857, the aggregate amount of actual specie in their vaults is

$58,349,838, of their circulation $214,778,822, and of their deposits

$230,351,352. Thus it appears that these banks in the aggregate have

considerably less than one dollar in seven of gold and silver compared with

their circulation and deposits. It was palpable, therefore, that the very

first pressure must drive them to suspension and deprive the people of a

convertible currency, with all its disastrous consequences. It is truly

wonderful that they should have so long continued to preserve their credit

when a demand for the payment of one-seventh of their immediate liabilities

would have driven them into insolvency. And this is the condition of the

banks, notwithstanding that four hundred millions of gold from California

have flowed in upon us within the last eight years, and the tide still

continues to flow. Indeed, such has been the extravagance of bank credits

that the banks now hold a considerably less amount of specie, either in

proportion to their capital or to their circulation and deposits combined,

than they did before the discovery of gold in California. Whilst in the

year 1848 their specie in proportion to their capital was more than equal

to one dollar for four and a half, in 1857 it does not amount to one dollar

for every six dollars and thirty-three cents of their capital. In the year

1848 the specie was equal within a very small fraction to one dollar in

five of their circulation and deposits; in 1857 it is not equal to one

dollar in seven and a half of their circulation and deposits.

From this statement it is easy to account for our financial history for the

last forty years. It has been a history of extravagant expansions in the

business of the country, followed by ruinous contractions. At successive

intervals the best and most enterprising men have been tempted to their

ruin by excessive bank loans of mere paper credit, exciting them to

extravagant importations of foreign goods, wild speculations, and ruinous

and demoralizing stock gambling. When the crisis arrives, as arrive it

must, the banks can extend no relief to the people. In a vain struggle to

redeem their liabilities in specie they are compelled to contract their

loans and their issues, and at last, in the hour of distress, when their

assistance is most needed, they and their debtors together sink into

insolvency.

It is this paper system of extravagant expansion, raising the nominal price

of every article far beyond its real value when compared with the cost of

similar articles in countries whose circulation is wisely regulated, which

has prevented us from competing in our own markets with foreign

manufacturers, has produced extravagant importations, and has counteracted

the effect of the large incidental protection afforded to our domestic

manufactures by the present revenue tariff. But for this the branches of

our manufactures composed of raw materials, the production of our own

country--such as cotton, iron, and woolen fabrics--would not only have

acquired almost exclusive possession of the home market, but would have

created for themselves a foreign market throughout the world.

Deplorable, however, as may be our present financial condition, we may yet

indulge in bright hopes for the future. No other nation has ever existed

which could have endured such violent expansions and contractions of paper

credits without lasting injury; yet the buoyancy of youth, the energies of

our population, and the spirit which never quails before difficulties will

enable us soon to recover from our present financial embarrassments, and

may even occasion us speedily to forget the lesson which they have taught.

In the meantime it is the duty of the Government, by all proper means

within its power, to aid in alleviating the sufferings of the people

occasioned by the suspension of the banks and to provide against a

recurrence of the same calamity. Unfortunately, in either aspect of the

case it can do but little. Thanks to the independent treasury, the

Government has not suspended payment, as it was compelled to do by the

failure of the banks in 1837. It will continue to discharge its liabilities

to the people in gold and silver. Its disbursements in coin will pass into

circulation and materially assist in restoring a sound currency. From its

high credit, should we be compelled to make a temporary loan, it can be

effected on advantageous terms. This, however, shall if possible be

avoided, but if not, then the amount shall be limited to the lowest

practicable sum.

I have therefore determined that whilst no useful Government works already

in progress shall be suspended, new works not already commenced will be

postponed if this can be done without injury to the country. Those

necessary for its defense shall proceed as though there had been no crisis

in our monetary affairs.

But the Federal Government can not do much to provide against a recurrence

of existing evils. Even if insurmountable constitutional objections did not

exist against the creation of a national bank, this would furnish no

adequate preventive security. The history of the last Bank of the United

States abundantly proves the truth of this assertion. Such a bank could

not, if it would, regulate the issues and credits of 1,400 State banks in

such a manner as to prevent the ruinous expansions and contractions in our

currency which afflicted the country throughout the existence of the late

bank, or secure us against future suspensions. In 1825 an effort was made

by the Bank of England to curtail the issues of the country banks under the

most favorable circumstances. The paper currency had been expanded to a

ruinous extent, and the bank put forth all its power to contract it in

order to reduce prices and restore the equilibrium of the foreign

exchanges. It accordingly commenced a system of curtailment of its loans

and issues, in the vain hope that the joint stock and private banks of the

Kingdom would be compelled to follow its example. It found, however, that

as it contracted they expanded, and at the end of the process, to employ

the language of a very high official authority, "whatever reduction of the

paper circulation was effected by the Bank of England (in 1825) was more

than made up by the issues of the country banks."

But a bank of the United States would not, if it could, restrain the issues

and loans of the State banks, because its duty as a regulator of the

currency must often be in direct conflict with the immediate interest of

its stockholders. If we expect one agent to restrain or control another,

their interests must, at least in some degree, be antagonistic. But the

directors of a bank of the United States would feel the same interest and

the same inclination with the directors of the State banks to expand the

currency, to accommodate their favorites and friends with loans, and to

declare large dividends. Such has been our experience in regard to the last

bank.

After all, we must mainly rely upon the patriotism and wisdom of the States

for the prevention and redress of the evil. If they will afford us a real

specie basis for our paper circulation by increasing the denomination of

bank notes, first to twenty and afterwards to fifty dollars; if they will

require that the banks shall at all times keep on hand at least one dollar

of gold and silver for every three dollars of their circulation and

deposits, and if they will provide by a self-executing enactment, which

nothing can arrest, that the moment they suspend they shall go into

liquidation, I believe that such provisions, with a weekly publication by

each bank of a statement of its condition, would go far to secure us

against future suspensions of specie payments.

Congress, in my opinion, possess the power to pass a uniform bankrupt law

applicable to all banking institutions throughout the United States, and I

strongly recommend its exercise. This would make it the irreversible

organic law of each bank's existence that a suspension of specie payments

shall produce its civil death. The instinct of self-preservation would then

compel it to perform its duties in such a manner as to escape the penalty

and preserve its life.

The existence of banks and the circulation of bank paper are so identified

with the habits of our people that they can not at this day be suddenly

abolished without much immediate injury to the country. If we could confine

them to their appropriate sphere and prevent them from administering to the

spirit of wild and reckless speculation by extravagant loans and issues,

they might be continued with advantage to the public.

But this I say, after long and much reflection: If experience shall prove

it to be impossible to enjoy the facilities which well-regulated banks

might afford without at the same time suffering the calamities which the

excesses of the banks have hitherto inflicted upon the country, it would

then be far the lesser evil to deprive them altogether of the power to

issue a paper currency and confine them to the functions of banks of

deposit and discount.

Our relations with foreign governments are upon the whole in a satisfactory

condition.

The diplomatic difficulties which existed between the Government of the

United States and that of Great Britain at the adjournment of the last

Congress have been happily terminated by the appointment of a British

minister to this country, who has been cordially received. Whilst it is

greatly to the interest, as I am convinced it is the sincere desire, of the

Governments and people of the two countries to be on terms of intimate

friendship with each other, it has been our misfortune almost always to

have had some irritating, if not dangerous, outstanding question with Great

Britain.

Since the origin of the Government we have been employed in negotiating

treaties with that power, and afterwards in discussing their true intent

and meaning. In this respect the convention of April 19, 1850, commonly

called the Clayton and Bulwer treaty, has been the most unfortunate of all,

because the two Governments place directly opposite and contradictory

constructions upon its first and most important article. Whilst in the

United States we believed that this treaty would place both powers upon an

exact equality by the stipulation that neither will ever "occupy, or

fortify, or colonize, or assume, or exercise any dominion" over any part of

Central America, it is contended by the British Government that the true

construction of this language has left them in the rightful possession of

all that portion of Central America which was in their occupancy at the

date of the treaty; in fact, that the treaty is a virtual recognition on

the part of the United States of the right of Great Britain, either as

owner or protector, to the whole extensive coast of Central America,

sweeping round from the Rio Hondo to the port and harbor of San Juan de

Nicaragua, together with the adjacent Bay Islands, except the comparatively

small portion of this between the Sarstoon and Cape Honduras. According to

their construction, the treaty does no more than simply prohibit them from

extending their possessions in Central America beyond the present limits.

It is not too much to assert that if in the United States the treaty had

been considered susceptible of such a construction it never would have been

negotiated under the authority of the President, nor would it have received

the approbation of the Senate. The universal conviction in the United

States was that when our Government consented to violate its traditional

and time-honored policy and to stipulate with a foreign government never to

occupy or acquire territory in the Central American portion of our own

continent, the consideration for this sacrifice was that Great Britain

should, in this respect at least, be placed in the same position with

ourselves. Whilst we have no right to doubt the sincerity of the British

Government in their construction of the treaty, it is at the same time my

deliberate conviction that this construction is in opposition both to its

letter and its spirit.

Under the late Administration negotiations were instituted between the two

Governments for the purpose, if possible, of removing these difficulties,

and a treaty having this laudable object in view was signed at London on

the 17th October, 1856, and was submitted by the President to the Senate on

the following 10th of December. Whether this treaty, either in its original

or amended form, would have accomplished the object intended without giving

birth to new and embarrassing complications between the two Governments,

may perhaps be well questioned. Certain it is, however, it was rendered

much less objectionable by the different amendments made to it by the

Senate. The treaty as amended was ratified by me on the 12th March, 1857,

and was transmitted to London for ratification by the British Government.

That Government expressed its willingness to concur in all the amendments

made by the Senate with the single exception of the clause relating to

Ruatan and the other islands in the Bay of Honduras. The article in the

original treaty as submitted to the Senate, after reciting that these

islands and their inhabitants "having been, by a convention bearing date

the 27th day of August, 1856, between Her Britannic Majesty and the

Republic of Honduras, constituted and declared a free territory under the

sovereignty of the said Republic of Honduras," stipulated that "the two

contracting parties do hereby mutually engage to recognize and respect in

all future time the independence and rights of the said free territory as a

part of the Republic of Honduras."

Upon an examination of this convention between Great Britain and Honduras

of the 27th August, 1856, it was found that whilst declaring the Bay

Islands to be "a free territory under the sovereignty of the Republic of

Honduras" it deprived that Republic of rights without which its sovereignty

over them could scarcely be said to exist. It divided them from the

remainder of Honduras and gave to their inhabitants a separate government

of their own, with legislative, executive, and judicial officers elected by

themselves. It deprived the Government of Honduras of the taxing power in

every form and exempted the people of the islands from the performance of

military duty except for their own exclusive defense. It also prohibited

that Republic from erecting fortifications upon them for their protection,

thus leaving them open to invasion from any quarter; and, finally, it

provided "that slavery shall not at any time hereafter be permitted to

exist therein."

Had Honduras ratified this convention, she would have ratified the

establishment of a state substantially independent within her own limits,

and a state at all times subject to British influence and control.

Moreover, had the United States ratified the treaty with Great Britain in

its original form, we should have been bound "to recognize and respect in

all future time" these stipulations to the prejudice of Honduras. Being in

direct opposition to the spirit and meaning of the Clayton and Bulwer

treaty as understood in the United States, the Senate rejected the entire

clause, and substituted in its stead a simple recognition of the sovereign

right of Honduras to these islands in the following language: The two

contracting parties do hereby mutually engage to recognize and respect the

islands of Ruatan, Bonaco, Utila, Barbaretta, Helena, and Moral, situate in

the Bay of Honduras and off the coast of the Republic of Honduras, as under

the sovereignty and as part of the said Republic of Honduras.

Great Britain rejected this amendment, assigning as the only reason that

the ratifications of the convention of the 27th August, 1856, between her

and Honduras had not been "exchanged, owing to the hesitation of that

Government." Had this been done, it is stated that "Her Majesty's

Government would have had little difficulty in agreeing to the modification

proposed by the Senate, which then would have had in effect the same

signification as the original wording." Whether this would have been the

effect, whether the mere circumstance of the exchange of the ratifications

of the British convention with Honduras prior in point of time to the

ratification of our treaty with Great Britain would "in effect" have had

"the same signification as the original wording," and thus have nullified

the amendment of the Senate, may well be doubted. It is, perhaps, fortunate

that the question has never arisen.

The British Government, immediately after rejecting the treaty as amended,

proposed to enter into a new treaty with the United States, similar in all

respects to the treaty which they had just refused to ratify, if the United

States would consent to add to the Senate's clear and unqualified

recognition of the sovereignty of Honduras over the Bay Islands the

following conditional stipulation: Whenever and so soon as the Republic of

Honduras shall have concluded and ratified a treaty with Great Britain by

which Great Britain shall have ceded and the Republic of Honduras shall

have accepted the said islands, subject to the provisions and conditions

contained in such treaty.

This proposition was, of course, rejected. After the Senate had refused to

recognize the British convention with Honduras of the 27th August, 1856,

with full knowledge of its contents, it was impossible for me, necessarily

ignorant of "the provisions and conditions" which might be contained in a

future convention between the same parties, to sanction them in advance.

The fact is that when two nations like Great Britain and the United States,

mutually desirous, as they are, and I trust ever may be, of maintaining the

most friendly relations with each other, have unfortunately concluded a

treaty which they understand in senses directly opposite, the wisest course

is to abrogate such a treaty by mutual consent and to commence anew. Had

this been done promptly, all difficulties in Central America would most

probably ere this have been adjusted to the satisfaction of both parties.

The time spent in discussing the meaning of the Clayton and Bulwer treaty

would have been devoted to this praiseworthy purpose, and the task would

have been the more easily accomplished because the interest of the two

countries in Central America is identical, being confined to securing safe

transits over all the routes across the Isthmus.

Whilst entertaining these sentiments, I shall, nevertheless, not refuse to

contribute to any reasonable adjustment of the Central American questions

which is not practically inconsistent with the American interpretation of

the treaty. Overtures for this purpose have been recently made by the

British Government in a friendly spirit, which I cordially reciprocate, but

whether this renewed effort will result in success I am not yet prepared to

express an opinion. A brief period will determine.

With France our ancient relations of friendship still continue to exist.

The French Government have in several recent instances, which need not be

enumerated, evinced a spirit of good will and kindness toward our country,

which I heartily reciprocate. It is, notwithstanding, much to be regretted

that two nations whose productions are of such a character as to invite the

most extensive exchanges and freest commercial intercourse should continue

to enforce ancient and obsolete restrictions of trade against each other.

Our commercial treaty with France is in this respect an exception from our

treaties with all other commercial nations. It jealously levies

discriminating duties both on tonnage and on articles the growth, produce,

or manufacture of the one country when arriving in vessels belonging to the

other.

More than forty years ago, on the 3d March, 1815, Congress passed an act

offering to all nations to admit their vessels laden with their national

productions into the ports of the United States upon the same terms with

our own vessels provided they would reciprocate to us similar advantages.

This act confined the reciprocity to the productions of the respective

foreign nations who might enter into the proposed arrangement with the

United States. The act of May 24, 1828, removed this restriction and

offered a similar reciprocity to all such vessels without reference to the

origin of their cargoes. Upon these principles our commercial treaties and

arrangements have been rounded, except with France, and let us hope that

this exception may not long exist.

Our relations with Russia remain, as they have ever been, on the most

friendly footing. The present Emperor, as well as his predecessors, have

never failed when the occasion offered to manifest their good will to our

country, and their friendship has always been highly appreciated by the

Government and people of the United States.

With all other European Governments, except that of Spain, our relations

are as peaceful as we could desire. I regret to say that no progress

whatever has been made since the adjournment of Congress toward the

settlement of any of the numerous claims of our citizens against the

Spanish Government. Besides, the outrage committed on our flag by the

Spanish war frigate Ferrolana on the high seas off the coast of Cuba in

March, 1855, by firing into the American mail steamer El Dorado and

detaining and searching her, remains unacknowledged and unredressed. The

general tone and temper of the Spanish Government toward that of the United

States are much to be regretted. Our present envoy extraordinary and

minister plenipotentiary to Madrid has asked to be recalled, and it is my

purpose to send out a new minister to Spain with special instructions on

all questions pending between the two Governments, and with a determination

to have them speedily and amicably adjusted if this be possible. In the

meantime, whenever our minister urges the just claims of our citizens on

the notice of the Spanish Government he is met with the objection that

Congress has never made the appropriation recommended by President Polk in

his annual message of December, 1847, "to be paid to the Spanish Government

for the purpose of distribution among the claimants in the Amistad case." A

similar recommendation was made by my immediate predecessor in his message

of December, 1853, and entirely concurring with both in the opinion that

this indemnity is justly due under the treaty with Spain of the 27th of

October, 1795, I earnestly recommend such an appropriation to the favorable

consideration of Congress.

A treaty of friendship and commerce was concluded at Constantinople on the

13th December, 1856, between the United States and Persia, the

ratifications of which were exchanged at Constantinople on the 13th June,

1857, and the treaty was proclaimed by the President on the 18th August,

1857. This treaty, it is believed, will prove beneficial to American

commerce. The Shah has manifested an earnest disposition to cultivate

friendly relations with our country, and has expressed a strong wish that

we should be represented at Teheran by a minister plenipotentiary; and I

recommend that an appropriation be made for this purpose.

Recent occurrences in China have been unfavorable to a revision of the

treaty with that Empire of the 3d July, 1844, with a view to the security

and extension of our commerce. The twenty-fourth article of this treaty

stipulated for a revision of it in case experience should prove this to be

requisite, "in which case the two Governments will, at the expiration of

twelve years from the date of said convention, treat amicably concerning

the same by means of suitable persons appointed to conduct such

negotiations." These twelve years expired on the 3d July, 1856, but long

before that period it was ascertained that important changes in the treaty

were necessary, and several fruitless attempts were made by the

commissioner of the United States to effect these changes. Another effort

was about to be made for the same purpose by our commissioner in

conjunction with the ministers of England and France, but this was

suspended by the occurrence of hostilities in the Canton River between

Great Britain and the Chinese Empire. These hostilities have necessarily

interrupted the trade of all nations with Canton, which is now in a state

of blockade, and have occasioned a serious loss of life and property.

Meanwhile the insurrection within the Empire against the existing imperial

dynasty still continues, and it is difficult to anticipate what will be the

result.

Under these circumstances I have deemed it advisable to appoint a

distinguished citizen of Pennsylvania envoy extraordinary and minister

plenipotentiary to proceed to China and to avail himself of any

opportunities which may offer to effect changes in the existing treaty

favorable to American commerce. He left the United States for the place of

his destination in July last in the war steamer Minnesota. Special

ministers to China have also been appointed by the Governments of Great

Britain and France.

Whilst our minister has been instructed to occupy a neutral position in

reference to the existing hostilities at Canton, he will cordially

cooperate with the British and French ministers in all peaceful measures to

secure by treaty stipulations those just concessions to commerce which the

nations of the world have a right to expect and which China can not long be

permitted to withhold. From assurances received I entertain no doubt that

the three ministers will act in harmonious concert to obtain similar

commercial treaties for each of the powers they represent.

We can not fail to feel a deep interest in all that concerns the welfare of

the independent Republics on our own continent, as well as of the Empire of

Brazil.

Our difficulties with New Granada, which a short time since bore so

threatening an aspect, are, it is to be hoped, in a fair train of

settlement in a manner just and honorable to both parties.

The isthmus of Central America, including that of Panama, is the great

highway between the Atlantic and Pacific over which a large portion of the

commerce of the world is destined to pass. The United States are more

deeply interested than any other nation in preserving the freedom and

security of all the communications across this isthmus. It is our duty,

therefore, to take care that they shall not be interrupted either by

invasions from our own country or by wars between the independent States of

Central America. Under our treaty with New Granada of the 12th December,

1846, we are bound to guarantee the neutrality of the Isthmus of Panama,

through which the Panama Railroad passes, "as well as the rights of

sovereignty and property which New Granada has and possesses over the said

territory." This obligation is rounded upon equivalents granted by the

treaty to the Government and people of the United States.

Under these circumstances I recommend to Congress the passage of an act

authorizing the President, in case of necessity, to employ the land and

naval forces of the United States to carry into effect this guaranty of

neutrality and protection. I also recommend similar legislation for the

security of any other route across the Isthmus in which we may acquire an

interest by treaty.

With the independent Republics on this continent it is both our duty and

our interest to cultivate the most friendly relations. We can never feel

indifferent to their fate, and must always rejoice in their prosperity.

Unfortunately both for them and for us, our example and advice have lost

much of their influence in consequence of the lawless expeditions which

have been fitted out against some of them within the limits of our country.

Nothing is better calculated to retard our steady material progress or

impair our character as a nation than the toleration of such enterprises in

violation of the law of nations.

It is one of the first and highest duties of any independent state in its

relations with the members of the great family of nations to restrain its

people from acts of hostile aggression against their citizens or subjects.

The most eminent writers on public law do not hesitate to denounce such

hostile acts as robbery and murder.

Weak and feeble states like those of Central America may not feel

themselves able to assert and vindicate their rights. The case would be far

different if expeditions were set on foot within our own territories to

make private war against a powerful nation. If such expeditions were fitted

out from abroad against any portion of our own country, to burn down our

cities, murder and plunder our people, and usurp our Government, we should

call any power on earth to the strictest account for not preventing such

enormities.

Ever since the Administration of General Washington acts of Congress have

been enforced to punish severely the crime of setting on foot a military

expedition within the limits of the United States to proceed from thence

against a nation or state with whom we are at peace. The present neutrality

act of April 20, 1818, is but little more than a collection of preexisting

laws. Under this act the President is empowered to employ the land and

naval forces and the militia "for the purpose of preventing the carrying on

of any such expedition or enterprise from the territories and jurisdiction

of the United States," and the collectors of customs are authorized and

required to detain any vessel in port when there is reason to believe she

is about to take part in such lawless enterprises.

When it was first rendered probable that an attempt would be made to get up

another unlawful expedition against Nicaragua, the Secretary of State

issued instructions to the marshals and district attorneys, which were

directed by the Secretaries of War and the Navy to the appropriate army and

navy officers, requiring them to be vigilant and to use their best

exertions in carrying into effect the provisions of the act of 1818.

Notwithstanding these precautions, the expedition has escaped from our

shores. Such enterprises can do no possible good to the country, but have

already inflicted much injury both on its interests and its character. They

have prevented peaceful emigration from the United States to the States of

Central America, which could not fail to prove highly beneficial to all the

parties concerned. In a pecuniary point of view alone our citizens have

sustained heavy losses from the seizure and closing of the transit route by

the San Juan between the two oceans.

The leader of the recent expedition was arrested at New Orleans, but was

discharged on giving bail for his appearance in the insufficient sum of

$2,000.

I commend the whole subject to the serious attention of Congress, believing

that our duty and our interest, as well as our national character, require

that we should adopt such measures as will be effectual in restraining our

citizens from committing such outrages.

I regret to inform you that the President of Paraguay has refused to ratify

the treaty between the United States and that State as amended by the

Senate, the signature of which was mentioned in the message of my

predecessor to Congress at the opening of its session in December, 1853.

The reasons assigned for this refusal will appear in the correspondence

herewith submitted.

It being desirable to ascertain the fitness of the river La Plata and its

tributaries for navigation by steam, the United States steamer Water Witch

was sent thither for that purpose in 1853. This enterprise was successfully

carried on until February, 1855, when, whilst in the peaceful prosecution

of her voyage up the Parana River, the steamer was fired upon by a

Paraguayan fort. The fire was returned, but as the Water Witch was of small

force and not designed for offensive operations, she retired from the

conflict. The pretext upon which the attack was made was a decree of the

President of Paraguay of October, 1854, prohibiting foreign vessels of war

from navigating the rivers of that State. As Paraguay, however, was the

owner of but one bank of the river of that name, the other belonging to

Corientes, a State of the Argentine Confederation, the right of its

Government to expect that such a decree would be obeyed can not be

acknowledged. But the Water Witch was not, properly speaking, a vessel of

war. She was a small steamer engaged in a scientific enterprise intended

for the advantage of commercial states generally. Under these circumstances

I am constrained to consider the attack upon her as unjustifiable and as

calling for satisfaction from the Paraguayan Government.

Citizens of the United States also who were established in business in

Paraguay have had their property seized and taken from them, and have

otherwise been treated by the authorities in an insulting and arbitrary

manner, which requires redress.

A demand for these purposes will be made in a firm but conciliatory spirit.

This will the more probably be granted if the Executive shall have

authority to use other means in the event of a refusal. This is accordingly

recommended.

It is unnecessary to state in detail the alarming condition of the

Territory of Kansas at the time of my inauguration. The opposing parties

then stood in hostile array against each other, and any accident might have

relighted the flames of civil war. Besides, at this critical moment Kansas

was left without a governor by the resignation of Governor Geary.

On the 19th of February previous the Territorial legislature had passed a

law providing for the election of delegates on the third Monday of June to

a convention to meet on the first Monday of September for the purpose of

framing a constitution preparatory to admission into the Union. This law

was in the main fair and just, and it is to be regretted that all the

qualified electors had not registered themselves and voted under its

provisions.

At the time of the election for delegates an extensive organization existed

in the Territory whose avowed object it was, if need be, to put down the

lawful government by force and to establish a government of their own under

the so-called Topeka constitution. The persons attached to this

revolutionary organization abstained from taking any part in the election.

The act of the Territorial legislature had omitted to provide for

submitting to the people the constitution which might be framed by the

convention, and in the excited state of public feeling throughout Kansas an

apprehension extensively prevailed that a design existed to force upon them

a constitution in relation to slavery against their will. In this emergency

it became my duty, as it was my unquestionable right, having in view the

union of all good citizens in support of the Territorial laws, to express

an opinion on the true construction of the provisions concerning slavery

contained in the organic act of Congress of the 30th May, 1854. Congress

declared it to be "the true intent and meaning of this act not to legislate

slavery into any Territory or State, nor to exclude it therefrom, but to

leave the people thereof perfectly free to form and regulate their domestic

institutions in their own way." Under it Kansas, "when admitted as a

State," was to "be received into the Union with or without slavery, as

their constitution may prescribe at the time of their admission."

Did Congress mean by this language that the delegates elected to frame a

constitution should have authority finally to decide the question of

slavery, or did they intend by leaving it to the people that the people of

Kansas themselves should decide this question by a direct vote? On this

subject I confess I had never entertained a serious doubt, and therefore in

my instructions to Governor Walker of the 28th March last I merely said

that when "a constitution shall be submitted to the people of the Territory

they must be protected in the exercise of their right of voting for or

against that instrument, and the fair expression of the popular will must

not be interrupted by fraud or violence."

In expressing this opinion it was far from my intention to interfere with

the decision of the people of Kansas, either for or against slavery. From

this I have always carefully abstained. Intrusted with the duty of taking

"care that the laws be faithfully executed," my only desire was that the

people of Kansas should furnish to Congress the evidence required by the

organic act, whether for or against slavery, and in this manner smooth

their passage into the Union. In emerging from the condition of Territorial

dependence into that of a sovereign State it was their duty, in my opinion,

to make known their will by the votes of the majority on the direct

question whether this important domestic institution should or should not

continue to exist. Indeed, this was the only possible mode in which their

will could be authentically ascertained.

The election of delegates to a convention must necessarily take place in

separate districts. From this cause it may readily happen, as has often

been the case, that a majority of the people of a State or Territory are on

one side of a question, whilst a majority of the representatives from the

several districts into which it is divided may be upon the other side. This

arises front the fact that in some districts delegates may be elected by

small majorities, whilst in others those of different sentiments may

receive majorities sufficiently great not only to overcome the votes given

for the former, but to leave a large majority of the whole people in direct

opposition to a majority of the delegates. Besides, our history proves that

influences may be brought to bear on the representative sufficiently

powerful to induce him to disregard the will of his constituents. The truth

is that no other authentic and satisfactory mode exists of ascertaining the

will of a majority of the people of any State or Territory on an important

and exciting question like that of slavery in Kansas except by leaving it

to a direct vote. How wise, then, was it for Congress to pass over all

subordinate and intermediate agencies and proceed directly to the source of

all legitimate power under our institutions!

How vain would any other principle prove in practice! This may be

illustrated by the case of Kansas. Should she be admitted into the Union

with a constitution either maintaining or abolishing slavery against the

sentiment of the people, this could have no other effect than to continue

and to exasperate the existing agitation during the brief period required

to make the constitution conform to the irresistible will of the majority.

The friends and supporters of the Nebraska and Kansas act, when struggling

on a recent occasion to sustain its wise provisions before the great

tribunal of the American people, never differed about its true meaning on

this subject. Everywhere throughout the Union they publicly pledged their

faith and their honor that they would cheerfully submit the question of

slavery to the decision of the bona fide people of Kansas, without any

restriction or qualification whatever. All were cordially united upon the

great doctrine of popular sovereignty, which is the vital principle of our

free institutions. Had it then been insinuated from any quarter that it

would be a sufficient compliance with the requisitions of the organic law

for the members of a convention thereafter to be elected to withhold the

question of slavery from the people and to substitute their own will for

that of a legally ascertained majority of all their constituents, this

would have been instantly rejected. Everywhere they remained true to the

resolution adopted on a celebrated occasion recognizing "the right of the

people of all the Territories, including Kansas and Nebraska, acting

through the legally and fairly expressed will of a majority of actual

residents, and whenever the number of their inhabitants justifies it, to

form a constitution with or without slavery and be admitted into the Union

upon terms of perfect equality with the other States."

The convention to frame a constitution for Kansas met on the first Monday

of September last. They were called together by virtue of an act of the

Territorial legislature, whose lawful existence had been recognized by

Congress in different forms and by different enactments. A large proportion

of the citizens of Kansas did not think proper to register their names and

to vote at the election for delegates; but an opportunity to do this having

been fairly afforded, their refusal to avail themselves of their right

could in no manner affect the legality of the convention. This convention

proceeded to frame a constitution for Kansas, and finally adjourned on the

7th day of November. But little difficulty occurred in the convention

except on the subject of slavery. The truth is that the general provisions

of our recent State constitutions are so similar and, I may add, so

excellent that the difference between them is not essential. Under the

earlier practice of the Government no constitution framed by the convention

of a Territory preparatory to its admission into the Union as a State had

been submitted to the people. I trust, however, the example set by the last

Congress, requiring that the constitution of Minnesota "should be subject

to the approval and ratification of the people of the proposed State," may

be followed on future occasions. I took it for granted that the convention

of Kansas would act in accordance with this example, rounded, as it is, on

correct principles, and hence my instructions to Governor Walker in favor

of submitting the constitution to the people were expressed in general and

unqualified terms.

In the Kansas-Nebraska act, however, this requirement, as applicable to the

whole constitution, had not been inserted, and the convention were not

bound by its terms to submit any other portion of the instrument to an

election except that which relates to the "domestic institution" of

slavery. This will be rendered clear by a simple reference to its language.

It was "not to legislate slavery into any Territory or State, nor to

exclude it therefrom, but to leave the people thereof perfectly free to

form and regulate their domestic institutions in their own way." According

to the plain construction of the sentence, the words "domestic

institutions" have a direct, as they have an appropriate, reference to

slavery. "Domestic institutions" are limited to the family. The relation

between master and slave and a few others are "domestic institutions," and

are entirely distinct from institutions of a political character. Besides,

there was no question then before Congress, nor, indeed, has there since

been any serious question before the people of Kansas or the country,

except that which relates to the "domestic institution" of slavery. The

convention, after an angry and excited debate, finally determined, by a

majority of only two, to submit the question of slavery to the people,

though at the last forty-three of the fifty delegates present affixed their

signatures to the constitution.

A large majority of the convention were in favor of establishing slavery in

Kansas. They accordingly inserted an article in the constitution for this

purpose similar in form to those which had been adopted by other

Territorial conventions. In the schedule, however, providing for the

transition from a Territorial to a State government the question has been

fairly and explicitly referred to the people whether they will have a

constitution "with or without slavery." It declares that before the

constitution adopted by the convention "shall be sent to Congress for

admission into the Union as a State" an election shall be held to decide

this question, at which all the white male inhabitants of the Territory

above the age of 21 are entitled to vote. They are to vote by ballot, and

"the ballots cast at said election shall be indorsed 'constitution with

slavery' and 'constitution with no slavery.'" If there be a majority in

favor of the "constitution with slavery," then it is to be transmitted to

Congress by the president of the convention in its original form; if, on

the contrary, there shall be a majority in favor of the "constitution with

no slavery," "then the article providing for slavery shall be stricken from

the constitution by the president of this convention;" and it is expressly

declared that "no slavery shall exist in the State of Kansas, except that

the right of property in slaves now in the Territory shall in no manner be

interfered with;" and in that event it is made his duty to have the

constitution thus ratified transmitted to the Congress of the United States

for the admission of the State into the Union.

At this election every citizen will have an opportunity of expressing his

opinion by his vote "whether Kansas shall be received into the Union with

or without slavery," and thus this exciting question may be peacefully

settled in the very mode required by the organic law. The election will be

held under legitimate authority, and if any portion of the inhabitants

shall refuse to vote, a fair opportunity to do so having been presented,

this will be their own voluntary act and they alone will be responsible for

the consequences.

Whether Kansas shall be a free or a slave State must eventually, under some

authority, be decided by an election; and the question can never be more

clearly or distinctly presented to the people than it is at the present

moment. Should this opportunity be rejected she may be involved for years

in domestic discord, and possibly in civil war, before she can again make

up the issue now so fortunately tendered and again reach the point she has

already attained.

Kansas has for some years occupied too much of the public attention. It is

high time this should be directed to far more important objects. When once

admitted into the Union, whether with or without slavery, the excitement

beyond her own limits will speedily pass away, and she will then for the

first time be left, as she ought to have been long since, to manage her own

affairs in her own way. If her constitution on the subject of slavery or on

any other subject be displeasing to a majority of the people, no human

power can prevent them from changing it within a brief period. Under these

circumstances it may well be questioned whether the peace and quiet of the

whole country are not of greater importance than the mere temporary triumph

of either of the political parties in Kansas.

Should the constitution without slavery be adopted by the votes of the

majority, the rights of property in slaves now in the Territory are

reserved. The number of these is very small, but if it were greater the

provision would be equally just and reasonable. The slaves were brought

into the Territory under the Constitution of the United States and are now

the property of their masters. This point has at length been finally

decided by the highest judicial tribunal of the country, and this upon the

plain principle that when a confederacy of sovereign States acquire a new

territory at their joint expense both equality and justice demand that the

citizens of one and all of them shall have the right to take into it

whatsoever is recognized as property by the common Constitution. To have

summarily confiscated the property in slaves already in the Territory would

have been an act of gross injustice and contrary to the practice of the

older States of the Union which have abolished slavery.

A Territorial government was established for Utah by act of Congress

approved the 9th September, 1850, and the Constitution and laws of the

United States were thereby extended over it "so far as the same or any

provisions thereof may be applicable." This act provided for the

appointment by the President, by and with the advice and consent of the

Senate, of a governor (who was to be ex officio superintendent of Indian

affairs), a secretary, three judges of the supreme court, a marshal, and a

district attorney. Subsequent acts provided for the appointment of the

officers necessary to extend our land and our Indian system over the

Territory. Brigham Young was appointed the first governor on the 20th

September, 1850, and has held the office ever since. Whilst Governor Young

has been both governor and superintendent of Indian affairs throughout this

period, he has been at the same time the head of the church called the

Latter-day Saints, and professes to govern its members and dispose of their

property by direct inspiration and authority from the Almighty. His power

has been, therefore, absolute over both church and state.

The people of Utah almost exclusively belong to this church, and believing

with a fanatical spirit that he is governor of the Territory by divine

appointment, they obey his commands as if these were direct revelations

from Heaven. If, therefore, he chooses that his government shall come into

collision with the Government of the United States, the members of the

Mormon Church will yield implicit obedience to his will. Unfortunately,

existing facts leave but little doubt that such is his determination.

Without entering upon a minute history of occurrences, it is sufficient to

say that all the officers of the United States, judicial and executive,

with the single exception of two Indian agents, have found it necessary for

their own personal safety to withdraw from the Territory, and there no

longer remains any government in Utah but the despotism of Brigham Young.

This being the condition of affairs in the Territory, I could not mistake

the path of duty. As Chief Executive Magistrate I was bound to restore the

supremacy of the Constitution and laws within its limits. In order to

effect this purpose, I appointed a new governor and other Federal officers

for Utah and sent with them a military force for their protection and to

aid as a posse comitatus in case of need in the execution of the laws.

With the religious opinions of the Mormons, as long as they remained mere

opinions, however deplorable in themselves and revolting to the moral and

religious sentiments of all Christendom, I had no right to interfere.

Actions alone, when in violation of the Constitution and laws of the United

States, become the legitimate subjects for the jurisdiction of the civil

magistrate. My instructions to Governor Cumming have therefore been framed

in strict accordance with these principles. At their date a hope was

indulged that no necessity might exist for employing the military in

restoring and maintaining the authority of the law, but this hope has now

vanished. Governor Young has by proclamation declared his determination to

maintain his power by force, and has already committed acts of hostility

against the United States. Unless he should retrace his steps the Territory

of Utah will be in a state of open rebellion. He has committed these acts

of hostility notwithstanding Major Van Vliet, an officer of the Army, sent

to Utah by the Commanding General to purchase provisions for the troops,

had given him the strongest assurances of the peaceful intentions of the

Government, and that the troops would only be employed as a posse comitatus

when called on by the civil authority to aid in the execution of the laws.

There is reason to believe that Governor Young has long contemplated this

result. He knows that the continuance of his despotic power depends upon

the exclusion of all settlers from the Territory except those who will

acknowledge his divine mission and implicitly obey his will, and that an

enlightened public opinion there would soon prostrate institutions at war

with the laws both of God and man. "He has therefore for several years, in

order to maintain his independence, been industriously employed in

collecting and fabricating arms and munitions of war and in disciplining

the Mormons for military service." As superintendent of Indian affairs he

has had an opportunity of tampering with the Indian tribes and exciting

their hostile feelings against the United States. This, according to our

information, he has accomplished in regard to some of these tribes, while

others have remained true to their allegiance and have communicated his

intrigues to our Indian agents. He has laid in a store of provisions for

three years, which in case of necessity, as he informed Major Van Vliet, he

will conceal, "and then take to the mountains and bid defiance to all the

powers of the Government."

A great part of all this may be idle boasting, but yet no wise government

will lightly estimate the efforts which may be inspired by such frenzied

fanaticism as exists among the Mormons in Utah. This is the first rebellion

which has existed in our Territories, and humanity itself requires that we

should put it down in such a manner that it shall be the last. To trifle

with it would be to encourage it and to render it formidable. We ought to

go there with such an imposing force as to convince these deluded people

that resistance would be vain, and thus spare the effusion of blood. We can

in this manner best convince them that we are their friends, not their

enemies. In order to accomplish this object it will be necessary, according

to the estimate of the War Department, to raise four additional regiments;

and this I earnestly recommend to Congress. At the present moment of

depression in the revenues of the country I am sorry to be obliged to

recommend such a measure; but I feel confident of the support of Congress,

cost what it may, in suppressing the insurrection and in restoring and

maintaining the sovereignty of the Constitution and laws over the Territory

of Utah.

I recommend to Congress the establishment of a Territorial government over

Arizona, incorporating with it such portions of New Mexico as they may deem

expedient. I need scarcely adduce arguments in support of this

recommendation. We are bound to protect the lives and the property of our

citizens inhabiting Arizona, and these are now without any efficient

protection. Their present number is already considerable, and is rapidly

increasing, notwithstanding the disadvantages under which they labor.

Besides, the proposed Territory is believed to be rich in mineral and

agricultural resources, especially in silver and copper. The mails of the

United States to California are now carried over it throughout its whole

extent, and this route is known to be the nearest and believed to be the

best to the Pacific.

Long experience has deeply convinced me that a strict construction of the

powers granted to Congress is the only true, as well as the only safe,

theory of the Constitution. Whilst this principle shall guide my public

conduct, I consider it clear that under the war-making power Congress may

appropriate money for the Construction of a military road through the

Territories of the United States when this is absolutely necessary for the

defense of any of the States against foreign invasion. The Constitution has

conferred upon Congress power "to declare war," "to raise and support

armies," "to provide and maintain a navy," and to call forth the militia to

"repel invasions." These high sovereign powers necessarily involve

important and responsible public duties, and among them there is none so

sacred and so imperative as that of preserving our soil from the invasion

of a foreign enemy. The Constitution has therefore left nothing on this

point to construction, but expressly requires that "the United States shall

protect each of them [the States] against invasion." Now if a military road

over our own Territories be indispensably necessary to enable us to meet

and repel the invader, it follows as a necessary consequence not only that

we possess the power, but it is our imperative duty to construct such a

road. It would be an absurdity to invest a government with the unlimited

power to make and conduct war and at the same time deny to it the only

means of reaching and defeating the enemy at the frontier. Without such a

road it is quite evident we can not "protect" California and our Pacific

possessions "against invasion." We can not by any other means transport men

and munitions of war from the Atlantic States in sufficient time

successfully to defend these remote and distant portions of the Republic.

Experience has proved that the routes across the isthmus of Central America

are at best but a very uncertain and unreliable mode of communication. But

even if this were not the case, they would at once be closed against us in

the event of war with a naval power so much stronger than our own as to

enable it to blockade the ports at either end of these routes. After all,

therefore, we can only rely upon a military road through our own

Territories; and ever since the origin of the Government Congress has been

in the practice of appropriating money from the public Treasury for the

construction of such roads.

The difficulties and the expense of constructing a military railroad to

connect our Atlantic and Pacific States have been greatly exaggerated. The

distance on the Arizona route, near the thirty-second parallel of north

latitude, between the western boundary of Texas, on the Rio Grande, and the

eastern boundary of California, on the Colorado, from the best explorations

now within our knowledge, does not exceed 470 miles, and the face of the

country is in the main favorable. For obvious reasons the Government ought

not to undertake the work itself by means of its own agents. This ought to

be committed to other agencies, which Congress might assist, either by

grants of land or money, or by both, upon such terms and conditions as they

may deem most beneficial for the country. Provision might thus be made not

only for the safe, rapid, and economical transportation of troops and

munitions of war, but also of the public mails. The commercial interests of

the whole country, both East and West, would be greatly promoted by such a

road, and, above all, it would be a powerful additional bond of union. And

although advantages of this kind, whether postal, commercial, or political,

can not confer constitutional power, yet they may furnish auxiliary

arguments in favor of expediting a work which, in my judgment, is clearly

embraced within the war-making power.

For these reasons I commend to the friendly consideration of Congress the

subject of the Pacific Railroad, without finally committing myself to any

particular route.

The report of the Secretary of the Treasury will furnish a detailed

statement of the condition of the public finances and of the respective

branches of the public service devolved upon that Department of the

Government. By this report it appears that the amount of revenue received

from all sources into the Treasury during the fiscal year ending the 30th

June, 1857, was $68,631,513.67, which amount, with the balance of

$19,901,325.45 remaining in the Treasury at the commencement of the year,

made an aggregate for the service of the year of $88,532,839.12.

The public expenditures for the fiscal year ending 30th June, 1857,

amounted to $70,822,724.85, of which $5,943,896.91 were applied to the

redemption of the public debt, including interest and premium, leaving in

the Treasury at the commencement of the present fiscal year, on the 1st

July, 1857, $17,710,114.27.

The receipts into the Treasury for the first quarter of the present fiscal

year, commencing 1st July, 1857, were $20,929,819.81, and the estimated

receipts of the remaining three quarters to the 30th June, 1858, are

$36,750,000, making, with the balance before stated, an aggregate of

$75,389,934.08 for the service of the present fiscal year.

The actual expenditures during the first quarter of the present fiscal year

were $23,714,528.37, of which $3,895,232.39 were applied to the redemption

of the public debt, including interest and premium. The probable

expenditures of the remaining three quarters to 30th June, 1858, are

$51,248,530.04, including interest on the public debt, making an aggregate

of $74,963,058.41, leaving an estimated balance in the Treasury at the

close of the present fiscal year of $426,875.67.

The amount of the public debt at the commencement of the present fiscal

year was $29,060,386.90.

The amount redeemed since the 1st of July was $3,895,232.39, leaving a

balance unredeemed at this time of $25,165,154.51.

The amount of estimated expenditures for the remaining three quarters of

the present fiscal year will in all probability be increased from the

causes set forth in the report of the Secretary. His suggestion, therefore,

that authority should be given to supply any temporary deficiency by the

issue of a limited amount of Treasury notes is approved, and I accordingly

recommend the passage of such a law.

As stated in the report of the Secretary, the tariff of March 3, 1857, has

been in operation for so short a period of time and under circumstances so

unfavorable to a just development of its results as a revenue measure that

I should regard it as inexpedient, at least for the present, to undertake

its revision.

I transmit herewith the reports made to me by the Secretaries of War and of

the Navy, of the Interior, and of the Postmaster-General. They all contain

valuable and important information and suggestions, which I commend to the

favorable consideration of Congress.

I have already recommended the raising of four additional regiments, and

the report of the Secretary of War presents strong reasons proving this

increase of the Army under existing circumstances to be indispensable.

I would call the special attention of Congress to the recommendation of the

Secretary of the Navy in favor of the construction of ten small war

steamers of light draft. For some years the Government has been obliged on

many occasions to hire such steamers from individuals to supply its

pressing wants. At the present moment we have no armed vessel in the Navy

which can penetrate the rivers of China. We have but few which can enter

any of the harbors south of Norfolk, although many millions of foreign and

domestic commerce annually pass in and out of these harbors. Some of our

most valuable interests and most vulnerable points are thus left exposed.

This class of vessels of light draft, great speed, and heavy guns would be

formidable in coast defense. The cost of their construction will not be

great and they will require but a comparatively small expenditure to keep

them in commission. In time of peace they will prove as effective as much

larger vessels and more useful. One of them should be at every station

where we maintain a squadron, and three or four should be constantly

employed on our Atlantic and Pacific coasts. Economy, utility, and

efficiency combine to recommend them as almost indispensable. Ten of these

small vessels would be of incalculable advantage to the naval service, and

the whole cost of their construction would not exceed $2,300,000, or

$230,000 each.

The report of the Secretary of the Interior is worthy of grave

consideration. It treats of the numerous important and diversified branches

of domestic administration intrusted to him by law. Among these the most

prominent are the public lands and our relations with the Indians. Our

system for the disposal of the public lands, originating with the fathers

of the Republic, has been improved as experience pointed the way, and

gradually adapted to the growth and settlement of our Western States and

Territories. It has worked well in practice. Already thirteen States and

seven Territories have been carved out of these lands, and still more than

a thousand millions of acres remain unsold. What a boundless prospect this

presents to our country of future prosperity and power!

We have heretofore disposed of 363,862,464 acres of the public land. Whilst

the public lands, as a source of revenue, are of great importance, their

importance is far greater as furnishing homes for a hardy and independent

race of honest and industrious citizens who desire to subdue and cultivate

the soil. They ought to be administered mainly with a view of promoting

this wise and benevolent policy. In appropriating them for any other

purpose we ought to use even greater economy than if they had been

converted into money and the proceeds were already in the public Treasury.

To squander away this richest and noblest inheritance which any people have

ever enjoyed upon objects of doubtful constitutionality or expediency would

be to violate one of the most important trusts ever committed to any

people. Whilst I do not deny to Congress the power, when acting bona fide

as a proprietor, to give away portions of them for the purpose of

increasing the value of the remainder, yet, considering the great

temptation to abuse this power, we can not be too cautious in its exercise.

Actual settlers under existing laws are protected against other purchasers

at the public sales in their right of preemption to the extent of a quarter

section, or 160 acres, of land. The remainder may then be disposed of at

public or entered at private sale in unlimited quantities. Speculation has

of late years prevailed to a great extent in the public lands. The

consequence has been that large portions of them have become the property

of individuals and companies, and thus the price is greatly enhanced to

those who desire to purchase for actual settlement. In order to limit the

area of speculation as much as possible, the extinction of the Indian title

and the extension of the public surveys ought only to keep pace with the

tide of emigration.

If Congress should hereafter grant alternate sections to States or

companies, as they have done heretofore, I recommend that the intermediate

sections retained by the Government should be subject to preemption by

actual settlers.

It ought ever to be our cardinal policy to reserve the public lands as much

as may be for actual settlers, and this at moderate prices. We shall thus

not only best promote the prosperity of the new States and Territories and

the power of the Union, but shall secure homes for our posterity for many

generations.

The extension of our limits has brought within our jurisdiction many

additional and populous tribes of Indians, a large proportion of which are

wild, untractable, and difficult to control. Predatory and warlike in their

disposition and habits, it is impossible altogether to restrain them from

committing aggressions on each other, as well as upon our frontier citizens

and those emigrating to our distant States and Territories. Hence expensive

military expeditions are frequently necessary to overawe and chastise the

more lawless and hostile. The present system of making them valuable

presents to influence them to remain at peace has proved ineffectual. It is

believed to be the better policy to colonize them in suitable localities

where they can receive the rudiments of education and be gradually induced

to adopt habits of industry. So far as the experiment has been tried it has

worked well in practice, and it will doubtless prove to be less expensive

than the present system.

The whole number of Indians within our territorial limits is believed to

be, from the best data in the Interior Department, about 325,000. The

tribes of Cherokees, Choctaws, Chickasaws, and Creeks settled in the

Territory set apart for them west of Arkansas are rapidly advancing in

education and in all the arts of civilization and self-government and we

may indulge the agreeable anticipation that at no very distant day they

will be incorporated into the Union as one of the sovereign States.

It will be seen from the report of the Postmaster-General that the

Post-Office Department still continues to depend on the Treasury, as it has

been compelled to do for several years past, for an important portion of

the means of sustaining and extending its operations. Their rapid growth

and expansion are shown by a decennial statement of the number of

post-offices and the length of post-roads, commencing with the year 1827.

In that year there were 7,000 post-offices; in 1837, 11,177; in 1847,

15,146, and in 1857 they number 26,586. In this year 1,725 post-offices

have been established and 704 discontinued, leaving a net increase of

1,021. The postmasters of 368 offices are appointed by the President.

The length of post-roads in 1827 was 105,336 miles; in 1837,141,242 miles;

in 1847, 153,818 miles, and in the year 1857 there are 242,601 miles of

post-road, including 22,530 miles of railroad on which the mails are

transported.

The expenditures of the Department for the fiscal year ending on the 30th

June, 1857, as adjusted by the Auditor, amounted to $11,507,670. To defray

these expenditures there was to the credit of the Department on the 1st

July, 1856, the sum of $789,599; the gross revenue of the year, including

the annual allowances for the transportation of free mail matter, produced

$8,053,951, and the remainder was supplied by the appropriation from the

Treasury of $2,250,000 granted by the act of Congress approved August 18,

1856, and by the appropriation of $666,883 made by the act of March 3,

1857, leaving $252,763 to be carried to the credit of the Department in the

accounts of the current year. I commend to your consideration the report of

the Department in relation to the establishment of the overland mail route

from the Mississippi River to San Francisco, Cal. The route was selected

with my full concurrence, as the one, in my judgment, best calculated to

attain the important objects contemplated by Congress.

The late disastrous monetary revulsion may have one good effect should it

cause both the Government and the people to return to the practice of a

wise and judicious economy both in public and private expenditures.

An overflowing Treasury has led to habits of prodigality and extravagance

in our legislation. It has induced Congress to make large appropriations to

objects for which they never would have provided had it been necessary to

raise the amount of revenue required to meet them by increased taxation or

by loans. We are now compelled to pause in our career and to scrutinize our

expenditures with the utmost vigilance; and in performing this duty I

pledge my cooperation to the extent of my constitutional competency.

It ought to be observed at the same time that true public economy does not

consist in withholding the means necessary to accomplish important national

objects intrusted to us by the Constitution, and especially such as may be

necessary for the common defense. In the present crisis of the country it

is our duty to confine our appropriations to objects of this character,

unless in cases where justice to individuals may demand a different course.

In all cases care ought to be taken that the money granted by Congress

shall be faithfully and economically applied.

Under the Federal Constitution "every bill which shall have passed the

House of Representatives and the Senate shall, before it become a law," be

approved and signed by the President; and if not approved, "he shall return

it with his objections to that House in which it shall have originated." In

order to perform this high and responsible duty, sufficient time must be

allowed the President to read and examine every bill presented to him for

approval. Unless this be afforded, the Constitution becomes a dead letter

in this particular, and; even worse, it becomes a means of deception. Our

constituents, seeing the President's approval and signature attached to

each act of Congress, are induced to believe that he has actually performed

his duty, when in truth nothing is in many cases more unfounded.

From the practice of Congress such an examination of each bill as the

Constitution requires has been rendered impossible. The most important

business of each session is generally crowded into its last hours, and the

alternative presented to the President is either to violate the

constitutional duty which he owes to the people and approve bills which for

want of time it is impossible he should have examined, or by his refusal to

do this subject the country and individuals to great loss and

inconvenience.

Besides, a practice has grown up of late years to legislate in

appropriation bills at the last hours of the session on new and important

subjects. This practice constrains the President either to suffer measures

to become laws which he does not approve or to incur the risk of stopping

the wheels of the Government by vetoing an appropriation bill. Formerly

such bills were confined to specific appropriations for carrying into

effect existing laws and the well-established policy of the country, and

little time was then requited by the President for their examination.

For my own part, I have deliberately determined that I shall approve no

bills which I have not examined, and it will be a case of extreme and most

urgent necessity which shall ever induce me to depart from this rule. I

therefore respectfully but earnestly recommend that the two Houses would

allow the President at least two days previous to the adjournment of each

session within which no new bill shall be presented to him for approval.

Under the existing joint rule one day is allowed, but this rule has been

hitherto so constantly suspended in practice that important bills continue

to be presented to him up till the very last moments of the session. In a

large majority of cases no great public inconvenience can arise from the

want of time to examine their provisions, because the Constitution has

declared that if a bill be presented to the President within the last ten

days of the session he is not required to return it, either with an

approval or with a veto, "in which case it shall not be a law." It may then

lie over and be taken up and passed at the next session. Great

inconvenience would only be experienced in regard to appropriation bills,

but, fortunately, under the late excellent law allowing a salary instead of

a per diem to members of Congress the expense and inconvenience of a called

session will be greatly reduced.

I can not conclude without commending to your favorable consideration the

interest of the people of this District. Without a representative on the

floor of Congress, they have for this very reason peculiar claims upon our

just regard. To this I know, from my long acquaintance with them, they are

eminently entitled.

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