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Justice to Foreigners.
Incomes of Consuls.
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 bave arisen under treaties and the public law. Conventions for adjusting the claims by joint commission, have been proposed to some Governments, but no definite answer to the propositions 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 wbere 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 proper officers of the Treasury have deemed themselves required, by the law of the United States upon the subject, to demand a tax upon the incomes of foreign consuls in this country. Wbile such demand may not, in strictness, be in derogation of public law, or perhaps of any existing treaty between the United States and a foreign country, the expediency of so far modifying the act as to exempt from tax the income of such consuls as are not citizens of the United States, derived from the emoluments of their office, or from property not situated in the United States, is submitted to your serious consideration. I make this suggestion upon the ground that a comity which ought to be reciprocated exempts our consuls, in all other countries, from taxation to the extent thus indicated. The United States, I think, ought not to be exceptionably illiberal to international trade and commerce.
Operations of the Treasury.
Receipts and Expenditures.
“The operations of the Treasury during the last year have been successfully conducted. The unactment by Congress of a National Banking Law has proved a valuable support of the public credit; and the general legislation in relation to loans has fully answered the expectations of its favorers. Some amendments may be required to perfect existing laws; but no change in their principles or general scope is believed to be needed.
“ Since these measures have been in operation, all demands on the Treasury, including the pay of the Army and Navy, have been promptly met and fully satisfied. No considerable body of troops, it is believed, were ever more amply provided and more liberally and punctually paid ; and it may be added that by no people were the burdens incident to a great war ever more cheerfully borne.
“ The receipts during the year from all sources, including loans and the 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
rom customs, $69,059,642 40; from internal revenue, 2:37,640,787 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, $181,086,635 07; making the aggregate, $895,796,630 65; and leaving the balance of $5,329,044 21. But the payment of funded and temporary debt, having been made from moneys borrowed during the year, must be regarded as merely nominal payments, and the moneys borrowed to make them as merely nominal receipts; and
Receipts and Expenditures.
Report of the Secretary of War.
their amount, $181,086,635 07, should therefore be deducted both from receipts and disbursements. This being done, there remain as actual receipts, $720,039,039 79; and the actual disbursements, $714,709,995 58, leaving the balance as already stated.
“The actual receipts and disbursements for the first quarter, and the estimated receipts and disbursements for the remaining three quarters, of the current fiscal year 1864, will be shown in detail by the report of the Secretary of the Treasury, to which I invite your attention. It is sufficient to say here that it is not believed that actual results will exbibit a state of the finances less favorable to the country than the estimates of that officer heretofore submitted; wbile it is confidently expected that at the close of the year both disbursements and debt will be found very considerably less than has been anticipated.
"The report of the Secretary of War is a document of great interest. It consists of
"1. The military operations of the year, detailed in the report of the General-in-Chief.
“2. The organization of colored persons into the war service.
“3. The exchange of prisoners, fully set forth in the letter of General Hitchcock.
“4. The operations under the act for enrolling and calling out the National forces, detailed in the report of the Provost Marshal General.
“5. The organization of the Invalid Corps; and,
“6. The operation of the several departments of the Quartermaster General, Commissary General, Paymaster General, Chief of Engineers, Chief of Ordnance, and Surgeon General.
" It has appeared impossible to make a valuable summary of this report, except such as would be too extended for this
Efficiency of the Blockade.
The Naval Forco.
place, and hence I content myself by asking your careful attention to the report itself.
"The duties devolving on the Naval branch of the service during the year, and throughout the whole of this, unhappy contest, have been discharged with fidelity and eminent suc
The extensive blockade has been constantly increasing in efficiency, and the Navy has expanded; yet on so long a line it has so far been impossible to entirely suppress illicit trade. From returns received at the Navy Department, it appears that more than one thousand vessels have been captured since the blockade was instituted, and that the value of prizes already sent in for adjudication, amounts to over thirteen million dollars.
“ The naval force of the United States consists, at this time, of five hundred and eigbty-eight vessels, completed and in the course of completion, and of these seventy-five are iron-clad or armored steamers. The events of the war give an increased interest and importance to the Navy, which will probably extend beyond the war itself.
" The armored vessels in our Navy, completed and in service, or which are under contract and approaching completion, are believed to exceed in number those of any other Power. But while these may be relied upon for harbor defence and coast service, others, of greater strength and capacity, will be necessary for cruising purposes, and to maintain our rightful position on the ocean.
“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 repairs 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 upor the