partially defined by treaties. In no instance, | of telegraph through that empire from our Pa however, is it expressly stipulated that, in the cific coast. event of civil war, a foreigner residing in this country, within the lines of the insurgents, is to be exempted from the rule which classes him as a belligerent, in whose behalf the Government of his country cannot expect any privileges or immunities distinct from that character. I regret to say, however, that such claims have been put forward, and, in some instances, in behalf of foreigners who have lived in the United States the greater part of their lives.

I recommend to your favorable consideration the subject of an international telegraph across the Atlantic ocean; and also of a telegraph between this capital and the national forts along the Atlantic sea-board and the Gulf of Mexico. Such communications, established with any reasonable outlay, would be economical as well as effective aids to the diplomatic, military, and naval service.

The consular system of the United States, under the enactments of the last Congress, beThere is reason to believe that many persons gins to be self-sustaining; and there is reason born in foreign countries, who have declared to hope that it may become entirely so, with the their intentions to become citizens, or who have increase of trade which will ensue whenever been fully naturalized, have evaded the military peace is restored. Our ministers abroad have been duty required of them by denying the fact, and faithful in defending American rights. In prothereby throwing upon the Government the tecting commercial interests, our consuls have burden of proof. It has been found difficult or necessarily had to encounter increased labors impracticable to obtain this proof, from the and responsibilities, growing out of the war. want of guides to the proper sources of infor- These they have, for the most part, met and mation. These might be supplied by requiring discharged with zeal and efficiency. This acclerks of courts, where declarations of anten-knowledgment justly includes those consuls tions may be made or naturalizations effected, who, residing in Morocco, Egypt, Turkey, Jato send, periodically, lists of the names of the pan, China, and other Oriental countries, are persons naturalized, or declaring their intention charged with complex functions and extraordito become citizens, to the Secretary of the Inte-nary powers. rior, in whose department those names might be arranged and printed for general information.

There is also reason to believe that foreigners frequently become citizens of the United States for the sole purpose of evading duties imposed by the laws of their native countries, to which, on becoming naturalized here, they at once repair, and, though never returning to the United States, they still claim the interposition of this Government as citizens. Many altercations and great prejudices have heretofore arisen out of this abuse. It is, therefore, submitted to your serious consideration. It might be advisable to fix a limit, beyond which no citizen of the United States residing abroad may claim the interposition of his Government.

The right of suffrage has often been assumed and exercised by aliens, under pretences of naturalization, which they have disavowed when drafted into the military service. I submit the expediency of such an amendment of the law as will make the fact of voting an estoppel against any plea of exemption from military service, or other civil obligation, on the ground of alienage.

The condition of the several organized Territories is generally satisfactory, although Indian disturbances in New Mexico have not been entirely suppressed. The mineral resources of Colorado, Nevada, Idaho, New Mexico, and Arizona, are proving far richer than has been heretofore understood. I lay before you a communication on this subject from the Governor of New Mexico. I again submit to your considaration the expediency of establishing a system for the encouragement of immigration. Although this source of national wealth and strength is again flowing with greater freedom than for several years before the insurrection occurred, there is still a great deficiency of laborers in every field of industry, especially in agriculture and in our mines, as well of iron and coal as of the precious metals. While the demand for labor is much increased here, tens of thousands of persons, destitute of remunerative occupation, are thronging our foreign consulates, and offering to emigrate to the United States if essential, but very cheap, assistance can be afforded them. It is easy to see that, under the sharp discipline of civil war, the nation is beginning a new life This noble effort demands the aid, and ought to receive the attention and support of the Government.

In common with other western Powers, our relations with Japan have been brought into serious jeopardy, through the perverse opposi- Injuries, unforeseen by the Government and tion of the hereditary aristocracy of the empire unintended, may, in some cases, have been into the enlightened and liberal policy of the Ty-flicted on the subjects or citizens of foreign coon, designed to bring the country into the society of nations. It is hoped, although not with entire confidence, that these difficulties may be peacefully overcome. I ask your attention to the claim of the minister residing there for the damages he sustained in the destruction by fire of the residence of the legation at Yedo.

Satisfactory arrangements have been made with the Emperor of Russia, which, it is believed, will result in effecting a continuous line

countries, both at sea and on land, by persons in the service of the United States. As this Government expects redress from other Powers when similar injuries are inflicted by persons in their service upon citizens of the United States, we must be prepared to do justice to foreigners. If the existing judicial tribunals are inadequate to this purpose, a special court may be authorized, with power to hear and decide such claims of the character referred to as may have arisen under treaties and the pub

lic law. Conventions for adjusting the claims | 086,635 07; making the aggregate. $895.796,by joint commission have been proposed to some Governments, but no definite answer to the proposition has yet been received from any. In the course of the session I shall probably have occasion to request you to provide indemnification to claimants where decrees of restitution have been rendered, and damages awarded by admiralty courts; and in other cases, where this Government may be acknowledged to be liable in principle, and where the amount of that liability has been ascertained by an informal arbitration.

The receipts during the year from all sources, including loans and balance in the Treasury at its commencement, were $901,125,674 86, and the aggregate disbursements $895,796,630 65, leaving a balance on the 1st of July, 1863, of $5,329,044 21. Of the receipts there were derived from customs $69,059,642 40; from internal revenue, $37,640,787 95; from direct tax, $1,485,103 61; from lands, $167,617 17; from miscellaneous sources, $3,046,615 35; and from loans, $776,682,361 57; making the aggregate, $901,125,674 86. Of the disbursements there were for the civil service, $23,253,922 08; for pensions and Indians, $4,216,520 79; for interest on public debt, $24,729,846 51; for the War Department, $599,298,600 83; for the Navy Department, $63,211,105 27; for payment of funded and temporary debt, $181,-war itself.

The armored vessels in our Navy, completed | to the policy of fostering and training seamen, and in service, or which are under contract and and also the education of officers and engineers approaching completion, are believed to exceed for the naval service. The Naval Academy is in number those of any other Power. But while rendering signal service in preparing midshipthese may be relied upon for harbor defence men for the highly responsible duties which in and coast service, others of greater strength and after life they will be required to perform. In capacity will be necessary for cruising pur- order that the country should not be deprived poses, and to maintain our rightful position on of the proper quota of educated officers, for the ocean. which legal provision has been made at the Naval School, the vacancies caused by the neglect or omission to make nominations from the States in insurrection have been filled by the Secretary of the Navy. The school is now more full and complete than at any former period. and in every respect entitled to the favorable consideration of Congress.

The change that has taken place in naval vessels and naval warfare since the introduction of steam as a motive power for ships of war demands either a corresponding change in some of our existing navy-yards, or the establishment of new ones, for the construction and necessary repair of modern naval vessels. No inconsiderable embarrassment, delay, and public injury have been experienced from the want of such governmental establishments. The necessity of such a navy yard, so furnished, at some suitable place upon the Atlantic seaboard, has on repeated occasions been brought to the attention of Congress by the Navy Department, and is again presented in the report of the Secretary which accompanies this communication. I think it my duty to invite your special attention to this subject, and also to that of establishing a yard and depot for naval purposes upon one of the western rivers. A naval force has been created on those interior waters, and under many disadvantages, within little more than two years, exceeding in numbers the whole naval force of the country at the commencement of the present administration. Satisfactory and important as have been the performances of the heroic men of the Navy at this interesting period, they are scarcely more wonderful than the success of our mechanics and artisans in the production of war vessels which has created a new form of naval power.

During the past fiscal year the financial condition of the Post Office Department has been one of increasing prosperity, and I am gratified in being able to state that the actual postal revenue has nearly equalled the entire expenditures; the latter amounting to $11,314,206 84, and the former to $11,163,789 59, leaving a deficiency of but $160,417 25. In 1860, the year immediately preceding the rebellion, the deficiency amounted to $5,656,705 49, the postal receipts of that year being $2,645,72219 less than those of 1863. The decrease since 1860 in the annual amount of transportation has been only about 25 per cent., but the annual expenditure on account of the same has been reduced 35 per cent. It is manifest, therefore, that the Post Office Department may become self-sustaining in a few years, even with the restoration of the whole service.

The international conference of postal delegates from the principal countries of Europe and America,, which was called at the suggestion of the Postmaster General, met at Paris on the 11th of May last, and concluded its deliberations on the 8th of June. The principles established by the conference as best adapted to facilitate postal intercourse between nations, and as the basis of future postal conventions, inaugurate a general system of uniform international charges, at reduced rates of postage, and cannot fail to produce beneficial results.

I refer you to the report of the Secretary of the Interior, which is herewith laid before you, for useful and varied information in relation to the public lands, Indian affairs, patents, pensions, and other matters of public concern pertaining to this department.

Our country has advantages superior to any other nation in its resources of iron and timber, with inexhaustible quantities of fuel in the immediate vicinity of both, all available and in close proximity to navigable waters. Without the advantage of public works the resources of the nation have been developed and its power displayed in the construction of a navy of such magnitude which has, at the very period of its creation, rendered signal service to the Union. The increase of the number of seamen in the public service, from seven thousand five hundred men, in the spring of 1861, to about thirtyfour thousand at the present time, has been ac- The quantity of land disposed of during the complished without special legislation, or extra-last and the first quarter of the present fiscal ordinary bounties to promote that increase. It has been found, however, that the operation of the draft, with the high bounties paid for army recruits, is beginning to affect injuriously the naval service, and will, if not corrected, be likely to impair its efficiency, by detaching sea. men from their proper vocation and inducing them to enter the army. I therefore respectfully suggest that Congress might aid both the army and naval service by a definite provision on this subject, which would at the same time be equitable to the communities more especially interested.

years was three million eight hundred and forty-one thousand five hundred and forty-uine acres, of which one hundred aud sixty-one thousand nine hundred and eleven acres were sold for cash, one million four hundred and fifty-six thousand five hundred and fourteen acres were taken up under the homestead law, and the residue disposed of under laws granting lands for military bounties, for railroad and other purposes. It also appears that the sale of the public lands is largely on the increase.

It has long been a cherished opinion of some of our wisest statesmen that the people of the I commend to your consideration the sug- United States had a higher and more enduring gestions of the Secretary of the Navy in regard | interest in the early settlement and substantial

I commend the benevolent institutions estab

lished or patronized by the Government in this District to your generous and fostering care.

cultivation of the public lands than in the | the Secretary evince the urgent need for immeamount of direct revenue to be derived from diate legislative action. the sale of them. This opinion has had a controlling influence in shaping legislation upon the subject of our national domain. I may cite, as evidence of this, the liberal measures The attention of Congress, during the last adopted in reference to actual settlers; the session, was engaged to some extent with a grant to the States of the overflowed lands proposition for enlarging the water communiwithin their limits in order to their being re- cation between the Mississippi river and the claimed and rendered fit for cultivation; the northeastern seaboard, which proposition, howgrants to railway companies of alternate sec- ever, failed for the time. Since then, upon a tions of land upon the contemplated lines of call of the greatest respectability, a convention their roads which, when completed, will so has been held at Chicago upon the same subject, largely multiply the facilities for reaching our a summary of whose views is contained in a distant possessions. This policy has received memorial addressed to the President and Conits most signal and beneficent illustration in gress, and which I now have the honor to lay the recent enactment granting homesteads to before you. That this interest is one which, ere actual settlers. Since the first day of January long, will force its own way, I do not entertain last the beforementioned quantity of one mil- a doubt, while it is submitted entirely to your lion four hundred and fifty-six thousand five wisdom as to what can be done now. Aughundred and fourteen acres of land have mented interest is given to this subject by the been taken up under its provisions. This fact actual commencement of the work on the Paand the amount of sales, furnish gratifying cific railroad, under auspices so favorable to evidence of increasing settlement upon the rapid progress and completion. The enlarged public lands, notwithstanding the great strug-navigation becomes a palpable need to the great gle in which the energies of the nation have been engaged, and which has required so large a withdrawal of our citizens from their accustomed pursuits. I cordially concur in the recommendation of the Secretary of the Interior, suggesting a modification of the act in favor of those engaged in the military and naval service of the United States. I doubt not that Congress will cheerfully adopt such measures as will, without essentially changing the general features of the system, secure, to the greatest practicable extent, its benefits to those who have left their homes in the defence of the country in this arduous crisis.

I invite your attention to the views of the Secretary as to the propriety of raising, by appropriate legislation, a revenue from the mineral lands of the United States.

road.

I transmit the second annual report of the Commissioner of the Department of Agriculture, asking your attention to the developments in that vital interest of the nation.

When Congress assembled a year ago the war had already lasted nearly twenty months, and there had been many conflicts on both land and sea with varying results. The rebellion had been pressed back into reduced limits; yet the tone of public feeling and opinion, at home and abroad, was not satisfactory. With other signs, the popular elections, then just past, indicated uncasiness among ourselves, while amid much that was cold and menacing, the kindest words coming from Europe were uttered in accents of pity, that we were too blind to surrender a hopeless cause. Our commerce was suffering greatly by a few armed vessels built upon and The measures provided at your last session furnished from foreign shores, and we were for the removal of certain Indian tribes have threatened with such additions from the same been carried into effect. Sundry treaties have quarter as would sweep our trade from the sea been negotiated, which will, in due time, be and raise our blockade. We had failed to elicit submitted for the constitutional action of the from European Governments anything hopeful Senate. They contain stipulations for extin- upon this subject. The preliminary emancipaguishing the possessory rights of the Indians to tion proclamation, issued in September, was large and valuable tracts of land. It is hoped running its assigned period to the beginning of that the effect of these treaties will result in the new year. A month later the final proclathe establishment of permanent friendly rela-mation came, including the announcement that tions with such of these tribes as have been colored men of suitable condition would be rebrought into frequent and bloody collision with ceived into the war service. The policy of our outlying settlements and emigrants. Sound emancipation, and of employing black soldiers, policy and our imperative duty to these wards gave to the future a new aspect, about which of the Government demand our anxious and hope, and fear, and doubt contended in uncerconstant attention to their material well-being, tain conflict. According to our political system, to their progress in the arts of civilization, and as a matter of civil administration, the General above all, to that moral training which, under Government had no lawful power to effect the blessing of Divine Providence, will confer emancipation in any State, and for a long time upon them the elevated and sanctifying in- it had been hoped that the rebellion could be fluences, the hopes and consolations of the suppressed without resorting to it as a military Christian faith. measure. It was all the while deemed possible that the necessity for it might come, and that if it should, the crisis of the contest would then be presented. It came, and, as was anticipated, it was followed by dark and doubtful days.

I suggested in my last annual message the propriety of remodelling our Indian system. Subsequent events have satisfied me of its necessity. The details set forth in the report of

Eleven months having now passed, we are permitted to take another view. The rebel borders are pressed still further back, and by the complete opening of the Mississippi the country dominated by the rebellion is divided into distinct parts, with no practical communication between them. Tennessee and Arkansas have been substantially cleared of insurgent control, and influential citizens in each, owners of slaves and advocates of slavery at the beginning of the rebellion, now declare openly for emancipation in their respective States. Of those States not included in the emancipation proclamation, Maryland and Missouri, neither of which three years ago would tolerate any restraint upon the extension of slavery into new territories, only dispute now as to the best mode of removing it within their own limits.

full. But why tender the benefits of this provision only to a State government set up in this particular way? This section of the Constitution contemplates a case wherein the el-ment within a State, favorable to republican government, in the Union, may be too feeble for an opposite and hostile element external to or even within the State; a d such are precisely the cases with which we are now dealing. An attempt to guaranty and protect a revived State government, constructed in whole, or in preponderating part, from the very element against whose hostility and violence it is to be protected, is simply absurd. There must be a test by which to separate the opposing elements so as to build only from the sound; and that test is a sufficiently liberal one which accepts as sound whoever will make a swoin recantation of his former unsoundness.

Of those who were slaves at the beginning of the rebellion, full one hundred thousand are But if it be proper to require, as a test of now in the United States military service, about admission to the political body, an oath of alone half of which number actually bear arms legiance to the Constitution of the United States, in the ranks; thus giving the double advantage and to the Union under it, why also to the laws of taking so much labor from the insurgent and proclamations in regard to slavery? Those cause, and supplying the places which other-laws and proclamations were enacted and put wise must be filled with so many white men. forth for the purpose of aiding in the suppresSo far as tested, it is difficult to say they are sion of the rebellion. To give them their fullest not as good soldiers as any. No servile insur- effect, there had to be a pledge for their mainrection, or tendency to violence or cruelty, has tenance. In my judgment they have aided, marked the measures of emancipation and arm and will further aid, the cause for which they ing the blacks. These measures have been were intended. To now abandon them would much discussed in foreign countries, and con- be not only to relinquish a lever of power, but temporary with such discussion the tone of would also be a cruel and an astounding breach public sentiment there is much improved. At of faith. I may add at this point, that while I home the same measures have been fully dis- remain in my present position I shall not atcussed, supported, criticised, and denounced, tempt to retract or modify the emancipation and the annual elections following are highly proclamation; nor shall I return to slavery any encouraging to those whose official duty it is person who is free by the terms of that proclato bear the country through this great trial. mation, or by any of the acts of Congress. Thus we have the new reckoning. The crisis For these and other reasons it is thought best which threatened to divide the friends of the that support of these measures shall be incluUnion is past. ded in the oath; and it is believed the Executive may lawfully claim it in return for pardon and restoration of forfeited rights, which he has clear constitutional power to withhold altogether, or grant upon the terms which he shall deem wisest for the public interest It should be observed, also, that this part of the oath is subject to the modifying and abrogating power of legislation and supreme judicial decision.

Looking now to the present and future, and with reference to a resumption of the national authority within the States wherein that authority has been suspended, I have thought fit to issue a proclamation, a copy of which is herewith transmitted. On examination of this proclamation it will appear, as is believed, that nothing will be attempted beyond what is amply justified by the Constitution. True, the form of an oath is given, but no man is coerced to take it. The man is only promised a pardon in case he voluntarily takes the oath. The Constitution authorizes the Executive to grant or withhold the pardon at his own absolute discretion; and this includes the power to grant on terms, as is fully established by judicial and other authorities.

It is also proffered that if, in any of the States named, a State government shall be, in the mode prescribed, set up, such government shall be recognized and guarantied by the United States, and that under it the State shall, on constitutional conditions, be protected against invasion and domestic violence. The constitutional obligation of the United States to guaranty to every State in the Union a republican form of government, and to protect the State, in the cases stated, is explicit and

The proposed acquiescence of the national Executive in any reasonable temporary State arrangement for the freed people is made with the view of possibly modifying the confusion and destitution which must at best, attend all classes by a total revolution of labor throughout whole States. It is hoped that the already deeply afflicted people in those States may be somewhat more ready to give up the cause of their affliction, if, to this extent, this vital matter be left to themselves; while no power of the national Executive to prevent an abuse is abridged by the proposition.

The suggestion in the proclamation as to maintaining the political frame-work of the States on what is called reconstruction, is made in the hope that it may do good without danger of harm. It will save labor, and avoid great confusion.

But why any proclamation now upon the sub