country will be prejudiced for a time by the condition of its treasury, the inevitable consequence of long-continued and exhausting internal wars. The last instalment of the interest of the debt due under the convention with the queen of Spain has not been paid; and similar failures may be expected to happen until a portion of the resources of her kingdom can be devoted to the extinguishment of its foreign debt.

Having received satisfactory evidence that discriminating tonnage duties were charged upon vessels of the United States in the ports of Portugal, a proclamation was issued on the 11th day of October last, in compliance with the act of May 25th, 1832, declaring that fact, and the duties on foreign tonnage, which were levied upon Portuguese vessels in the United States, previously to the passage of that act, are accordingly revived.

The act of July 4th, 1836, suspending the discriminating duties upon the produce of Portugal imported into this country in Portuguese vessels, was passed, upon the application of that government, through its representative here, under the belief that no similar discrimination existed in Portugal to the prejudice of the United States. I regret to state that such duties are now exacted, in that country, upon the cargoes of American vessels; and as the act referred to vests no discretion in the executive, it is for Congress to determine upon the expediency of further legislation upon the subject. Against these discriminations, affecting the vessels of this country and their cargoes, seasonable remonstrance was made, and notice was given to the Portuguese government, that, unless they should be discontinued, the adoption of countervailing measures on the part of the United States would become necessary; but the reply of that government, received at the department of state through our charge d'affaires at Lisbon, in the month of September last, afforded no ground to hope for the abandonment of a system so little in harmony with the treatment shown to the vessels of Portugal and their cargoes, in the ports of this country, and so contrary to the expectations we had a right to entertain.

With Holland, Sweden, Denmark, Naples, and Bel

gium, a friendly intercourse has been uninterruptedly maintained.

With the government of the Ottoman Porte, and its dependencies on the coast of the Mediterranean, peace and good-will are carefully cultivated, and have been fostered by such good offices as the relative distance and the condition of those countries would permit.

Our commerce with Greece is carried on under the laws of the two governments, reciprocally beneficial to the navigating interests of both; and I have reason to look forward to the adoption of other measures which will be more extensively and permanently advantageous.

Copies of the treaties concluded with the governments of Siam and Muscat are transmitted for the information of Congress, the ratifications having been received, and the treaties made public, since the close of the last annual session. Already have we reason to congratulate ourselves on the prospect of considerable commercial benefit; and we have, besides, received from the Sultan of Muscat, prompt evidence of his desire to cultivate the most friendly feelings, by liberal acts towards one of our vessels, bestowed in a manner so striking as to require on our part a grateful acknowledgment.

Our commerce with the Island of Cuba and Porto Rico still labors under heavy restrictions, the continuance of which is a subject of regret. The only effect of an adherence to them will be to benefit the navigation of other countries, at the expense both of the United States and Spain.

The independent nations of this continent have, ever since they emerged from the colonial state, experienced severe trials in their progress to the permanent establishment of liberal political institutions. Their unsettled condition not only interrupts their own advances to prosperity, but has often seriously injured the other powers of the world. The claims of our citizens upon Peru, Chili, Brazil, the Argentine Republic, the governments formed out of the republics of Colombia and Mexico, are still pending, although many of them have been presented for examination more than twenty years. New Grenada,

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Venezuela, and Ecuador, have recently formed a convention for the purpose of ascertaining and adjusting the claims upon the republic of Colombia, from which it is earnestly hoped our citizens will, ere long, receive full compensation for the injuries originally inflicted upon them, and for the delay in affording it.

An advantageous treaty of commerce has been concluded by the United States with the Peru-Bolivian Confederation, which wants only the ratification of that government. The progress of a subsequent negotiation for the settlement of claims upon Peru, has been unfavorably affected by the war between that power and Chili, and the Argentine Republic; and the same event is likely to produce delays in the settlement of our demands on those powers.

The aggravating circumstances connected with our claims upon Mexico, and a variety of events touching the honor and integrity of our government, led my predecessor to make, at the second session of the last Congress, a special recommendation of the course to be pursued to obtain a speedy and final satisfaction of the injuries complained of by this government and by our citizens. He recommended a final demand of redress, with a contingent authority to the executive to make reprisals, if that demand should be made in vain. From the proceedings of Congress on that recommendation, it appeared that the opinion of both branches of the legislature coincided with that of the executive, that any mode of redress known to the law of nations might justifiably be used. It was obvious, too, that Congress believed, with the President, that another demand should be made, in order to give undeniable and satisfactory proof of our desire to avoid extremities with a neighboring power; but that there was an indisposition to vest a discretionary authority in the executive to take redress, should it unfortunately be either denied or unreasonably delayed by the Mexican government.

So soon as the necessary documents were prepared, after entering upon the duties of my office, a special messenger was sent to Mexico, to make a final demand of redress, with the documents required by the provisions of

our treaty. The demand was made on the 20th of July last. The reply, which bears date the 29th of the same month, contains assurances of a desire, on the part of that government, to give a prompt and explicit answer respecting each of the complaints, but that the examination of them would necessarily be deliberate; that in this examination it would be guided by the principles of public law and the obligation of treaties; that nothing should be left undone that might lead to the most equitable adjustment of our demands; and that its determination, in respect to each case, should be communicated through the Mexican minister here.

Since that time, an envoy extraordinary and minister plenipotentiary has been accredited to this government by that of the Mexican republic. He brought with him assurances of a sincere desire that the pending differences between the two governments should be terminated in a manner satisfactory to both. He was received with reciprocal assurances, and a hope was entertained that his mission would lead to a speedy, satisfactory, and final adjustment of all existing subjects of complaint. A sincere believer in the wisdom of the pacific policy by which the United States have always been governed in their intercourse with foreign nations, it was my particular desire, from the proximity of the Mexican republic, and wellknown occurrences on our frontier, to be instrumental in obviating all existing difficulties with that government, and in restoring to the intercourse between the two republics, that liberal and friendly character by which they should always be distinguished. I regret, therefore, the more deeply, to have found in the recent communications of that government, so little reason to hope that any efforts of mine for the accomplishment of those desirable objects would be successful.

Although the larger number, and many of them aggravated cases, of personal wrongs have been now for years before the Mexican government, and some of the causes of national complaint, and those of the most offensive character, admitted of immediate, simple, and satisfactory replies, it is only within a few days past that any specific communication in answer to our last demand, made five

months ago, has been received from the Mexican minister. By the report of the secretary of state, herewith presented, and the accompanying documents, it will be seen that for not one of our public complaints has satisfaction been given or offered; that but one of the causes of personal wrong has been favorably considered; and that but four cases of both descriptions, out of all those formally presented, and earnestly pressed, have as yet been decided upon by the Mexican government.

Not perceiving in what manner any of the powers given to the executive alone, could be further usefully employed in bringing this unfortunate controversy to a satisfactory termination, the subject was, by my predecessor, referred to Congress, as one calling for its interposition. In accordance with the clearly understood wishes of the legislature, another and formal demand for satisfaction has been made upon the Mexican government, with what success the documents now communicated will show. On a careful and deliberate examination of their contents, and considering the spirit manifested by the Mexican government, it has become my painful duty to return the subject, as it now stands, to Congress, to whom it belongs to decide upon the time, the mode, and the measures of redress. Whatever may be your decision, it shall be faithfully executed, confident that it will be characterized by that moderation and justice which will, I trust, under all circumstances, govern the councils of our country.

The balance in the treasury on the first day of January, 1837, was forty-five millions nine hundred and sixty-eight thousand five hundred and twenty-three dollars. The receipts, during the present year, from all sources, including the amount of treasury notes issued, are estimated at twenty-three millions four hundred and ninety-nine thousand nine hundred and eighty-one dollars, constituting an aggregate of sixty-nine millions four hundred and sixtyeight thousand five hundred and four dollars. Of this amount, about thirty-five millions two hundred and eightyone thousand three hundred and sixty-one dollars will have been expended, at the end of the year, on appropriations made by Congress; and the residue, amounting to thirty-four millions one hundred and eighty-seven thou