success. It is an occasion of special pleasure to acknowledge that the execution of it, on the part of Her Majesty's Government, has been marked with a jealous respect for the authority of The United States, and the rights of their moral and loyal citizens.

The Convention with Hanover for the abolition of the Stade dues has been carried into full effect, under the Act of Congress for that purpose.

A blockade of 3,000 miles of sea-coast could not be established and vigorously enforced, in a season of great commercial activity like the present, without committing occasional mistakes, and inflicting unintentional injuries upon foreign nations and their subjects.

A civil war occurring in a country where foreigners reside and carry on trade under Treaty stipulations, is necessarily fruitful of complaints of the violation of neutral rights. All such collisions. tend to excite misapprehensions, and possibly to produce mutual reclamations between nations which have a common interest in preserving peace and friendship. In clear cases of these kinds I have, so far as possible, heard and redressed complaints which have been presented by friendly Powers. There is still, however, a large and an augmenting number of doubtful cases upon which the Government is unable to agree with the Governments whose protection is demanded by the claimants. There are, moreover, many cases in which The United States or their citizens suffer wrongs from the naval or military authorities of foreign nations, which the Governments of those States are not at once prepared to redress. I have proposed to some of the foreign States thus interested, mutual Conventions to examine and adjust such complaints. This proposition has been made especially to Great Britain, to France, to Spain, and to Prussia. In each case it has been kindly received, but has not yet been formally adopted.

I deem it my duty to recommend an appropriation in behalf of the owners of the Norwegian bark Admiral P. Tordenskiold, which vessel was, in May, 1861, prevented by the commander of the blockading force off Charleston from leaving that port with cargo, notwithstanding a similar privilege had, shortly before, been granted to an English vessel. I have directed the Secretary of State to cause the papers in the case to be communicated to the proper committees.

Applications have been made to me by many free Americans of African descent to favour their emigration, with a view to such colonization as was contemplated in recent acts of Congress. Other parties, at home and abroad-some from interested motives, others upon patriotic considerations, and still others influenced by philanthropic sentiments-have suggested similar measures; while, on the other hand, several of the Spanish American Republics have protested against the sending of such colonists to their respective terri[1861-62. LII.]

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tories. Under these circumstances, I have declined to move any such colony to any State, without first obtaining the consent of its Government, with an agreement on its part to receive and protect such emigrants in all the rights of freemen; and I have, at the same time, offered to the several States situated within the tropics, or having colonies there, to negotiate with them, subject to the advice and consent of the Senate, to favour the voluntary emigration of persons of that class to their respective territories, upon conditions which shall be equal, just, and humane. Liberia and Hayti are as yet the only countries to which colonists of African descent from here could go with certainty of being received and adopted as citizens; and I regret to say such persons, contemplating colonization, do not seem so willing to migrate to those countries as to some others, nor so willing as I think their interest demands. I believe, however, opinion among them in this respect is improving; and that, ere long, there will be an augmented and considerable migration to both these countries from The United States.

The new commercial Treaty between The United States and the Sultan of Turkey has been carried into execution.

A Commercial and Consular Treaty has been negotiated, subject to the Senate's consent, with Liberia; and a similar negotiation is now pending with the Republic of Hayti. A considerable improvement of the national commerce is expected to result from these measures.

Our relations with Great Britain, France, Spain, Portugal, Russia, Prussia, Denmark, Sweden, Austria, The Netherlands, Italy, Rome, and the other European States, remain undisturbed. Very favourable relations also continue to be maintained with Turkey, Morocco, China, and Japan.

During the last year there has not only been no change of our previous relations with the independent States of our own continent, but more friendly sentiments than have heretofore existed are believed to be entertained by these neighbours, whose safety and progress are so intimately connected with our own. This statement especially applies to Mexico, Nicaragua, Costa Rica, Honduras, Peru, and Chile.

The Commission under the Convention with the Republic of New Granada closed its session, without having audited and passed upon all the claims which were submitted to it. A proposition is pending to revive the Convention, that it may be able to do more complete justice. The joint Commission between The United States and the Republic of Costa Rica has completed its labours and submitted its report.

I have favoured the project for connecting The United States with Europe by an Atlantic telegraph, and a similar project to

extend the telegraph from San Francisco, to connect by a Pacific telegraph with the line which is being extended across the Russian Empire.

The territories of The United States, with unimportant exceptions, have remained undisturbed by the civil war; and they are exhibiting such evidence of prosperity as justifies an expectation that some of them will soon be in a condition to be organized as States, and be constitutionally admitted into the Federal Union.

The immense mineral resources of some of those territories ought to be developed as rapidly as possible. Every step in that direction would have a tendency to improve the revenues of the Government, and diminish the burdens of the people. It is worthy of your serious consideration whether some extraordinary measures to promote that end cannot be adopted. The means which suggests itself as most likely to be effective, is a scientific exploration of the mineral regions in those territories, with a view to the publication of its results at home and in foreign countries-results which cannot fail to be auspicious.

The condition of the finances will claim your most diligent consideration. The vast expenditures incident to the military and naval operations required for the suppression of the rebellion, have hitherto been met with a promptitude and certainty unusual in similar circumstances, and the public credit has been fully maintained. The continuance of the war, however, and the increased disbursements made necessary by the augmented forces now in the field, demand your best reflections as to the best modes of providing the necessary revenue, without injury to business, and with the least possible burdens upon labour.

The suspension of specie payments by the banks, soon after the commencement of your last session, made large issues of United States' notes unavoidable. In no other way could the payment of the troops, and the satisfaction of other just demands, be so economically, or so well provided for. The judicious legislation of Congress, securing the receivability of these notes for loans and internal duties, and making them a legal tender for other debts, has made them an universal currency; and has satisfied, partially, at least, and for the time, the long-felt want of an uniform circulating medium, saving thereby to the people, immense sums in discounts and exchanges.

A return to specie payments, however, at the earliest period compatible with due regard to all interests concerned, should ever be kept in view. Fluctuations in the value of currency are always injurious, and to reduce these fluctuations to the lowest possible point will always be a leading purpose in wise legislation. Convertibility, prompt and certain convertibility into coin, is generally

acknowledged to be the best and surest safeguard against them; and it is extremely doubtful whether a circulation of United States' notes, payable in coin, and sufficiently large for the wants of the people, can be permanently, usefully, and safely maintained.

Is there, then, any other mode in which the necessary provision for the public wants can be made, and the great advantage of a safe and uniform currency secured?

I know of none which promises so certain results, and is, at the same time, so unobjectionable, as the organization of banking associations, under a general Act of Congress, well guarded in its provisions. To such associations the Government might furnish circulating notes, on the security of United States' bonds deposited in the treasury. These notes, prepared under the supervision of proper officers, being uniform in appearance and security, and convertible always into coin, would at once protect labour against the evils of a vicious currency, and facilitate commerce by cheap and safe exchanges.

A moderate reservation from the interest on the bonds would compensate The United States for the preparation and distribution of the notes, and a general supervision of the system, and would lighten the burden of that part of the public debt employed as securities. The public credit, moreover, would be greatly improved, and the negotiation of new loans greatly facilitated by the steady market demand for Government bonds which the adoption of the proposed system would create.

It is an additional recommendation of the measure, of considerable weight, in my judgment, that it would reconcile, as far as possible, all existing interests, by the opportunity offered to existing institutions to reorganize under the Act, substituting only the secured uniform national circulation for the local and various circulation, secured and unsecured, now issued by them.

The receipts into the treasury from all sources, including loans, and balance from the preceding year, for the fiscal year ending on the 30th June, 1862, were 583,885,247 dollars 06 cents, of which sum 49,056,397 dollars 62 cents were derived from customs; 1,795,331 dollars 73 cents from the direct tax; from public lands 152,203 dollars 77 cents; from miscellaneous sources, 931,787 dollars 64 cents; from loans in all forms, 529,692,460 dollars 50 cents. The remainder, 2,257,065 dollars 80 cents, was the balance from last year.

The disbursements during the same period were for congressional, executive, and judicial purposes, 5,939,009 dollars 29 cents; for foreign intercourse, 1,339,710 dollars 35 cents; for miscellaneous expenses, including the mints, loans, post-office deficiencies, collection of revenue, and other like charges, 14,129,771 dollars 50 cents;

for expenses under the Interior Department, 3,102,985 dollars 52 cents; under the War Department, 394,368,407 dollars 36 cents; under the Navy Department, 42,674,569 dollars 69 cents; for interest on public debt, 13,190,324 dollars 45 cents; and for payment of public debt, including reimbursement of temporary loan, and redemptions, 96,096,922 dollars 09 cents; making an aggregate of 570,841,700 dollars 25 cents, and leaving a balance in the treasury on the 1st day of July, 1862, of 13,043,546 dollars 81 cents.

It should be observed that the sum of 96,096,922 dollars 09 cents, 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 dollars 97 cents; and the expenditures, 474,744,778 dollars 16 cents.

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 abtracts 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 dollars 40 cents, 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 dollars 90 cents, being only 50,000 dollars less than was derived from all the States of the Union during the previous year. The expenditures show a still more favourable result. The amount expended in 1861 was 13,606,759 dollars 11 cents. For the last year the amount has been reduced to 11,125,364 dollars 13 cents, showing a decrease of about 2,481,000 dollars in the expenditures as compared with the preceding year, and about 3,750,000 dollars as compared with the fiscal year 1860. The deficiency in the department for the previous year was 4,551,966 dollars 98 cents. For the last fiscal year it was reduced to 2,112,814 dollars 57 cents. These favourable results are in part owing to the cessation of mail service in the insurrectionary States, and in part