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partment, $42,674,569.69; for interest on public debt, $13,190,324.45; and for payment of public debt, including reimbursement of temporary loan, and redemptions, $96,096,922.09—making an aggregate of $570,841,700.25, and leaving a balance in the treasury on the first day of July, 1862, of $13,043,546.81.

It should be observed that the sum of $96,096,922.09, expended for reimbursements and redemption of public debt, being included also in the loans made, may be properly deducted both from receipts and expenditures, leaving the actual receipts for the year, $487,788,324.97; and the expenditures, $474,744,778.16.

Other information on the subject of the finances will be found in the report of the Secretary of the Treasury, to whose statements and views I invite your most candid and considerate attention.

The reports of the Secretaries of War and of the Navy are herewith transmitted. These reports, though lengthy, are scarcely more than brief abstracts of the very numerous and extensive transactions and operations conducted through those departments. Nor could I give a summary of them here, upon any principle, which would admit of its being much shorter than the reports themselves. I therefore content myself with laying the reports before you, and asking your attention to them.

It gives me pleasure to report a decided improvement in the financial condition of the Post Office Department, as compared with several preceding years. The receipts for the fiscal year 1861 amounted to $8,349,296.40, which embraced the revenue from all the States of the nion for

three quarters of that year. Notwithstanding the cessation of revenue from the so-called seceded States during the last fiscal year, the increase of the correspondence of the loyal States has been sufficient to produce a revenue during the same year of $8,299,820.90, being only $50,000 less than was derived from all the States of the Union during the previous year. The expenditures show a still more favorable result. The amount expended in 1861 was $13,606,759.11. For the last year the amount has been reduced to $11,125,364.13, showing a decrease of about $2,481,000 in the expenditures as compared with the preceding year, and about $3,750,000 as compared with the fiscal year 1860. The deficiency in the department for the previous year was $4,551,966.98. For the last fiscal year it was reduced to $2,112,814.57. These favorable results are in part owing to the cessation of mail service in the insurrectionary States, and in part to a careful review of all expenditures in that department in the interest of economy. The efficiency of the postal service, it is believed, has also been much improved. The Postmaster-General has also opened a correspondence, through the Department of State, with foreign governments, proposing a convention of postal representatives for the purpose of simplifying the rates of foreign postage, and to expedite the foreign mails. This proposition, equally important to our adopted citizens and to the commercial interests of this country, has been favorably entertained, and agreed to, by all the governments from whom replies have been received.

I ask the attention of Congress to the suggestions of the Postmaster-General in his report

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respecting the further legislation required, in his opinion, for the benefit of the postal service.

The Secretary of the Interior reports as follows in regard to the public lands:

revenue.

The public lands have ceased to be a source of

From the ist July, 1861, to the 30th September, 1862, the entire cash receipts from the sale of lands were $137,476.26–a sum much less than the expenses of our land system during the same period. The homestead law, which will take effect on the ist of January next, offers such inducements to settlers that sales for cash cannot be expected to an extent sufficient to meet the expenses of the General Land Office, and the cost of surveying and bringing the land into market.

The discrepancy between the sum here stated as arising from the sales of the public lands, and the sum derived from the same source as reported from the Treasury Department, arises, as I understand, from the fact that the periods of time, though apparently, were not really coincident at the beginning point-the Treasury report including a considerable sum now, which had previously been reported from the Interiorsufficiently large to greatly overreach the sum derived from the three months now reported upon by the Interior, and not by the Treasury.

The Indian tribes upon our frontiers have, during the past year, manifested a spirit of insubordination, and at several points have engaged in open hostilities against the white settlements in their vicinity. The tribes occupying the Indian country south of Kansas renounced their allegiance to the United States, and entered into treaties with the insurgents. Those who remained loyal to the United States were driven from the country. The chief of the Cherokees

has visited this city for the purpose of restoring the former relations of the tribe with the United States. He alleges that they were constrained by superior force to enter into treaties with the insurgents, and that the United States neglected to furnish the protection which their treaty stipulations required.

In the month of August last the Sioux Indians in Minnesota attacked the settlements in their vicinity with extreme ferocity, killing indiscriminately men, women, and children. This attack was wholly unexpected, and therefore no means of defense had been provided. It is estimated that not less than eight hundred persons were killed by the Indians, and a large amount of property was destroyed. How this outbreak was induced is not definitely known, and suspicions, which may be unjust, need not to be stated. Information was received by the Indian bureau, from different sources, about the time hostilities were commenced, that a simultaneous attack was to be made upon the white settlements by all the tribes between the Mississippi River and the Rocky Mountains. The State of Minnesota has suffered great injury from this Indian war. A large portion of her territory has been depopulated, and a severe loss has been sustained by the destruction of property. The people of that State manifest much anxiety for the removal of the tribes beyond the limits of the State as a guarantee against future hostilities. The Commissioner of Indian Affairs will furnish full details. I submit for your especial consideration whether our Indian system shall not be remodeled. Many wise and good men have impressed me with the belief that this can be profitably done.

I submit a statement of the proceedings of commissioners, which shows the progress that has been made in the enterprise of constructing the Pacific Railroad. And this suggests the earliest completion of this road, and also the favorable action of Congress upon the projects now pending before them for enlarging the capacities of the great canals in New York and Illinois, as being of vital and rapidly increasing importance to the whole nation, and especially to the vast interior region hereinafter to be noticed at some greater length. I purpose having prepared and laid before you at an early day some interesting and valuable statistical information upon this subject. The military and commercial importance of enlarging the Illinois and Michigan canal and improving the Illinois River is presented in the report of Colonel Webster to the Secretary of War, and now transmitted to Congress. I respectfully ask attention to it.

To carry out the provisions of the act of Congress of the 15th of May last, I have caused the Department of Agriculture of the United States to be organized. The commissioner informs me that within the period of a few months this department has established an extensive system of correspondence and exchanges, both at home and abroad, which promises to effect highly beneficial results in the development of a correct knowledge of recent improvements in agriculture, in the introduction of new products, and in the collection of the agricultural statistics of the different States. Also that it will soon be prepared to distribute largely seeds, cereals, plants, and cuttings, and has already published and liberally diffused much valuable information in an

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