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mit of its being much shorter than the reports themselves. I therefore content myself with layiyg the reports before you, and asking your attention to them.

It gives me pleasure to report a decided improvement in the finan. cial 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 Union 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 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:

"The public lands have ceased to be a source of revenue. From the 1st July, 1861, to the 30th September, 1862, the entire cash receipts from the sale of lands were $137,476 26--a sum much less

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than the expenses of our land system during the same period. The homestead law, which will take effect on the 1st 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 Interior-sufficiently 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 defence 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 de. stroyed. 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 Mis. sissippi river and the Rocky mountains. The State of Minnesota has suffered great injury from this Indian war. A large portion of her

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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 remodelled. 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 anticipation of a more elaborate report, which will in due time be furnished, embracing some valuable tests in chemical science now in progress in the laboratory.

The creatiou of this department was for the more immediate benefit of a large class of our most valuable citizens ; and I trust that the liberal basis upon which it has been organized will not only meet

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your approbation, but that it will realize, at no distant day, all the fondest anticipations of its most sanguine friends, and become the fruitful source of advantage to all our people.

On the twenty-second day of September last a proclamation was issued by the Executive, a copy of which is herewith submitted.

In accordance with the purpose expressed in the second paragraph of that paper, I now respectfully recall your attention to what may be called “compensated emancipation."

A nation may be said to consist of its territory, its people, and its laws. The territory is the only part which is of certain durability. "One generation passeth away, and another generation cometh, but the earth abideth forever.'' It is of the first importance to duly consider, and estimate, this ever-enduring part. That portion of the earth's surface which is owned and inhabited by the people of the United States, is well adapted to be the home of one national family; and it is not well adapted for two, or more. Its vast extent, and its variety of climate and productions, are of advantage, in this age, for one people, whatever they might have been in former ages. Steam, telegraphs, and intelligence, have brought these, to be an advantageous combination, for one united people.

In the inaugural address I briefly pointed out the total inadequacy of disunion, as a remedy for the differences between the people of the two sections. I did so in language which I cannot improve, and which, therefore, I beg to repeat :

"One section of our country believes slavery is right, and ought to be extended, while the other believes it is wrong, and ought not to be extended. This is the only substantial dispute. The fugitive slave clause of the Constitution, and the law for the suppression of the foreign slave trade, are each as well enforced, perhaps, as any law can ever be in a community where the moral sense of the people imperfectly supports the law itself. The great body of the people abide by the dry legal obligation in both cases, and a few break over in each. This, I think, cannot be perfectly cured; and it would be worse in both cases after the separation of the sections, than before. The foreign slave trade, now imperfectly suppressed, would be ultimately revived without restriction in one section; while fugitive slaves, now only partially surrendered, would not be surrendered at all by the other.

“Physically speaking, we cannot separate. We cannot remove our respective sections from each other, nor build an impassable wall

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between them. A husband and wife may be divorced, and go out of the presence, and beyond the reach of each other, but the different parts of our country cannot do this. They cannot but remain face to face; and intercourse, either amicable or hostile, must continue between them. Is it possible, then, to make that intercourse more advantageous, or more satisfactory, after separation than before? Can aliens make treaties, easier than friends can make laws? Can treaties be more faithfully enforced between aliens, than lawz can among friends? Suppose you go to war, you cannot fight always; and when, after much loss on both sides, and no gain on either, you cease fighting, the identical old questions, as to terms of intercourse, are again upon you.''

There is no line, straight or crooked, suitable for a national boundary, upon which to divide. Trace through, from east to west, upon the line between the free and slave country, and we shall find a little more than one-third of its length are rivers, easy to be crossed, and populated, or soon to be populated, thickly upon both sides; while nearly all its remaining length, are merely surveyers' lines, over which people may walk back and forth without any consciousness of their presence. No part of this line can be made any more difficult to pass, by writing it down on paper, or parchment, as a national boundary. The fact of separation, if it comes, gives up, on the part of the seceding section, the fugitive slave clause, along with all other constitutional obligations upon the section seceded from, while I should expect no treaty stipulation would ever be made to take its place.

But there is another difficulty. The great interior region, bounded east by the Alleghanies, north by the British dominions, west by the Rocky mountains, and south by the line along which the culture of corn and cotton meets, and which includes part of Virginia, part. of Tennessee, all of Kentucky, Ohio, Indiana, Michigan, Wisconsin, Illinois, Missouri, Kansas, Iowa, Minnesota, and the Territories of Dakota, Ne. braska, and part of Colorado, already has above ten millions of people, and will have fifty millions within fifty years, if not prevented by any political folly or mistake. It contains more than one-third of the country owned by the United States-certainly more than one million of square miles. Once half as populous as Massachusetts already is, it would have more than seventy-five millions of people. A glance at the map shows that, territorially speaking, it is the great body of the republic. The other parts are but marginal borders to it, the magnificent region sloping west from the rocky mountains to

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