Fellow-Citizens of the Senate and of the House of Representatives:

The past has been an eventful year, and will be hereafter referred to as a
marked epoch in the history of the world. While we have been happily
preserved from the calamities of war, our domestic prosperity has not been
entirely uninterrupted. The crops in portions of the country have been
nearly cut off. Disease has prevailed to a greater extent than usual, and
the sacrifice of human life through casualties by sea and land is without
parallel. But the pestilence has swept by, and restored salubrity invites
the absent to their homes and the return of business to its ordinary
channels. If the earth has rewarded the labor of the husbandman less
bountifully than in preceding seasons, it has left him with abundance for
domestic wants and a large surplus for exportation. In the present,
therefore, as in the past, we find ample grounds for reverent thankfulness
to the God of grace and providence for His protecting care and merciful
dealings with us as a people.

Although our attention has been arrested by painful interest in passing
events, yet our country feels no more than the slight vibrations of the
convulsions which have shaken Europe. As individuals we can not repress
sympathy with human suffering nor regret for the causes which produce it;
as a nation we are reminded that whatever interrupts the peace or checks
the prosperity of any part of Christendom tends more or less to involve our
own. The condition of States is not unlike that of individuals; they are
mutually dependent upon each other. Amicable relations between them and
reciprocal good will are essential for the promotion of whatever is
desirable in their moral, social, and political condition. Hence it has
been my earnest endeavor to maintain peace and friendly intercourse with
all nations.

The wise theory of this Government, so early adopted and steadily pursued,
of avoiding all entangling alliances has hitherto exempted it from many
complications in which it would otherwise have become involved.
Notwithstanding this our clearly defined and well-sustained course of
action and our geographical position, so remote from Europe, increasing
disposition has been manifested by some of its Governments to supervise and
in certain respects to direct our foreign policy. In plans for adjusting
the balance of power among themselves they have assumed to take us into
account, and would constrain us to conform our conduct to their views. One
or another of the powers of Europe has from time to time undertaken to
enforce arbitrary regulations contrary in many respects to established
principles of international law. That law the United States have in their
foreign intercourse uniformly respected and observed, and they can not
recognize any such interpolations therein as the temporary interests of
others may suggest. They do not admit that the sovereigns of one continent
or of a particular community of states can legislate for all others.

Leaving the transatlantic nations to adjust their political system in the
way they may think best for their common welfare, the independent powers of
this continent may well assert the right to be exempt from all annoying
interference on their part. Systematic abstinence from intimate political
connection with distant foreign nations does not conflict with giving the
widest range to our foreign commerce. This distinction, so clearly marked
in history, seems to have been overlooked or disregarded by some leading
foreign states. Our refusal to be brought within and subjected to their
peculiar system has, I fear, created a jealous distrust of our conduct and
induced on their part occasional acts of disturbing effect upon our foreign
relations. Our present attitude and past course give assurances, which
should not be questioned, that our purposes are not aggressive nor
threatening to the safety and welfare of other nations. Our military
establishment in time of peace is adapted to maintain exterior defenses and
to preserve order among the aboriginal tribes within the limits of the
Union. Our naval force is intended only for the protection of our citizens
abroad and of our commerce, diffused, as it is, over all the seas of the
globe. The Government of the United States, being essentially pacific in
policy, stands prepared to repel invasion by the voluntary service of a
patriotic people, and provides no permanent means of foreign aggression.
These considerations should allay all apprehension that we are disposed to
encroach on the rights or endanger the security of other states.

Some European powers have regarded with disquieting concern the territorial
expansion of the United States. This rapid growth has resulted from the
legitimate exercise of sovereign rights belonging alike to all nations, and
by many liberally exercised. Under such circumstances it could hardly have
been expected that those among them which have within a comparatively
recent period subdued and absorbed ancient kingdoms, planted their
standards on every continent, and now possess or claim the control of the
islands of every ocean as their appropriate domain would look with
unfriendly sentiments upon the acquisitions of this country, in every
instance honorably obtained, or would feel themselves justified in imputing
our advancement to a spirit of aggression or to a passion for political
predominance. Our foreign commerce has reached a magnitude and extent
nearly equal to that of the first maritime power of the earth, and
exceeding that of any other. Over this great interest, in which not only
our merchants, but all classes of citizens, at least indirectly, are
concerned, it is the duty of the executive and legislative branches of the
Government to exercise a careful supervision and adopt proper measures for
its protection. The policy which I had in view in regard to this interest
embraces its future as well as its present security. Long experience has
shown that, in general, when the principal powers of Europe are engaged in
war the rights of neutral nations are endangered. This consideration led,
in the progress of the War of our Independence, to the formation of the
celebrated confederacy of armed neutrality, a primary object of which was
to assert the doctrine that free ships make free goods, except in the case
of articles contraband of war--a doctrine which from the very commencement
of our national being has been a cherished idea of the statesmen of this
country. At one period or another every maritime power has by some solemn
treaty stipulation recognized that principle, and it might have been hoped
that it would come to be universally received and respected as a rule of
international law. But the refusal of one power prevented this, and in the
next great war which ensued--that of the French Revolution--it failed to be
respected among the belligerent States of Europe. Notwithstanding this, the
principle is generally admitted to be a sound and salutary one, so much so
that at the commencement of the existing war in Europe Great Britain and
France announced their purpose to observe it for the present; not, however,
as a recognized international fight, but as a mere concession for the time
being. The cooperation, however, of these two powerful maritime nations in
the interest of neutral rights appeared to me to afford an occasion
inviting and justifying on the part of the United States a renewed effort
to make the doctrine in question a principle of international law, by means
of special conventions between the several powers of Europe and America.
Accordingly, a proposition embracing not only the rule that free ships make
free goods, except contraband articles, but also the less contested one
that neutral property other than contraband, though on board enemy's ships,
shall be exempt from confiscation, has been submitted by this Government to
those of Europe and America.

Russia acted promptly in this matter, and a convention was concluded
between that country and the United States providing for the observance of
the principles announced, not only as between themselves, but also as
between them and all other nations which shall enter into like
stipulations. None of the other powers have as yet taken final action on
the subject. I am not aware, however, that any objection to the proposed
stipulations has been made, but, on the contrary, they are acknowledged to
be essential to the security of neutral commerce, and the only apparent
obstacle to their general adoption is in the possibility that it may be
encumbered by inadmissible conditions. The King of the Two Sicilies has
expressed to our minister at Naples his readiness to concur in our
proposition relative to neutral rights and to enter into a convention on
that subject.

The King of Prussia entirely approves of the project of a treaty to the
same effect submitted to him, but proposes an additional article providing
for the renunciation of privateering. Such an article, for most obvious
reasons, is much desired by nations having naval establishments large in
proportion to their foreign commerce. If it were adopted as an
international rule, the commerce of a nation having comparatively a small
naval force would be very much at the mercy of its enemy in case of war
with a power of decided naval superiority. The bare statement of the
condition in which the United States would be placed, after having
surrendered the right to resort to privateers, in the event of war with a
belligerent of naval supremacy will show that this Government could never
listen to such a proposition. The navy of the first maritime power in
Europe is at least ten times as large as that of the United States. The
foreign commerce of the two countries is nearly equal, and about equally
exposed to hostile depredations. In war between that power and the United
States, without resort on our part to our mercantile marine the means of
our enemy to inflict injury upon our commerce would be tenfold greater than
ours to retaliate. We could not extricate our country from this unequal
condition, with such an enemy, unless we at once departed from our present
peaceful policy and became a great naval power. Nor would this country be
better situated in war with one of the secondary naval powers. Though the
naval disparity would be less, the greater extent and more exposed
condition of our widespread commerce would give any of them a like
advantage over us.

The proposition to enter into engagements to forego a resort to privateers
in case this country should be forced into war with a great naval power is
not entitled to more favorable consideration than would be a proposition to
agree not to accept the services of volunteers for operations on land. When
the honor or the rights of our country require it to assume a hostile
attitude, it confidently relies upon the patriotism of its citizens, not
ordinarily devoted to the military profession, to augment the Army and the
Navy so as to make them fully adequate to the emergency which calls them
into action. The proposal to surrender the right to employ privateers is
professedly founded upon the principle that private property of unoffending
noncombatants, though enemies, should be exempt from the ravages of war;
but the proposed surrender goes but little way in carrying out that
principle, which equally requires that such private property should not be
seized or molested by national ships of war. Should the leading powers of
Europe concur in proposing as a rule of international law to exempt private
property upon the ocean from seizure by public armed cruisers as well as by
privateers, the United States will readily meet them upon that broad
ground.

Since the adjournment of Congress the ratifications of the treaty between
the United States and Great Britain relative to coast fisheries and to
reciprocal trade with the British North American Provinces have been
exchanged, and some of its anticipated advantages are already enjoyed by
us, although its full execution was to abide certain acts of legislation
not yet fully performed. So soon as it was ratified Great Britain opened to
our commerce the free navigation of the river St. Lawrence and to our
fishermen unmolested access to the shores and bays, from which they had
been previously excluded, on the coasts of her North American Provinces; in
return for which she asked for the introduction free of duty into the ports
of the United States of the fish caught on the same coast by British
fishermen. This being the compensation stipulated in the treaty for
privileges of the highest importance and value to the United States, which
were thus voluntarily yielded before it became effective, the request
seemed to me to be a reasonable one; but it could not be acceded to from
want of authority to suspend our laws imposing duties upon all foreign
fish. In the meantime the Treasury Department issued a regulation for
ascertaining the duties paid or secured by bonds on fish caught on the
coasts of the British Provinces and brought to our markets by British
subjects after the fishing grounds had been made fully accessible to the
citizens of the United States. I recommend to your favorable consideration
a proposition, which will be submitted to you, for authority to refund the
duties and cancel the bonds thus received. The Provinces of Canada and New
Brunswick have also anticipated the full operation of the treaty by
legislative arrangements, respectively, to admit free of duty the products
of the United States mentioned in the free list of the treaty; and an
arrangement similar to that regarding British fish has been made for duties
now chargeable on the products of those Provinces enumerated in the same
free list and introduced therefrom into the United States, a proposition
for refunding which will, in my judgment, be in like manner entitled to
your favorable consideration.

There is difference of opinion between the United States and Great Britain
as to the boundary line of the Territory of Washington adjoining the
British possessions on the Pacific, which has already led to difficulties
on the part of the citizens and local authorities of the two Governments I
recommend that provision he made for a commission, to be joined by one on
the part of Her Britannic Majesty, for the purpose of running and
establishing the line in controversy. Certain stipulations of the third and
fourth articles of the treaty concluded by the United States and Great
Britain in 1846, regarding possessory rights of the Hudsons Bay Company and
property of the Pugets Sound Agricultural Company, have given rise to
serious disputes, and it is important to all concerned that summary means
of settling them amicably should be devised. I have reason to believe that
an arrangement can be made on just terms for the extinguishment of the
rights in question, embracing also the right of the Hudsons Bay Company to
the navigation of the river Columbia; and I therefore suggest to your
consideration the expediency of making a contingent appropriation for that
purpose.

France was the early and efficient ally of the United States in their
struggle for independence. From that time to the present, with occasional
slight interruptions, cordial relations of friendship have existed between
the Governments and people of the two countries. The kindly sentiments
cherished alike by both nations have led to extensive social and commercial
intercourse, which I trust will not be interrupted or checked by any casual
event of an apparently unsatisfactory character. The French consul at San
Francisco was not long since brought into the United States district court
at that place by compulsory process as a witness in favor of another
foreign consul, in violation, as the French Government conceives, of his
privileges under our consular convention with France. There being nothing
in the transaction which could imply any disrespect to France or its
consul, such explanation has been made as, I hope, will be satisfactory.
Subsequently misunderstanding arose on the subject of the French Government
having, as it appeared, abruptly excluded the American minister to Spain
from passing through France on his way from London to Madrid. But that
Government has unequivocally disavowed any design to deny the right of
transit to the minister of the United States, and after explanations to
this effect he has resumed his journey and actually returned through France
to Spain. I herewith lay before Congress the correspondence on this subject
between our envoy at Paris and the minister of foreign relations of the
French Government.

The position of our affairs with Spain remains as at the close of the last
session. Internal agitation, assuming very nearly the character of
political revolution, has recently convulsed that country. The late
ministers were violently expelled from power, and men of very different
views in relation to its internal affairs have succeeded. Since this change
there has been no propitious opportunity to resume and press on
negotiations for the adjustment of serious questions of difficulty between
the Spanish Government and the United States. There is reason to believe
that our minister will find the present Government more favorably inclined
than the preceding to comply with our just demands and to make suitable
arrangements for restoring harmony and preserving peace between the two
countries.

Negotiations are pending with Denmark to discontinue the practice of
levying tolls on our vessels and their cargoes passing through the Sound. I
do not doubt that we can claim exemption therefrom as a matter of right. It
is admitted on all hands that this exaction is sanctioned, not by the
general principles of the law of nations, but only by special conventions
which most of the commercial nations have entered into with Denmark. The
fifth article of our treaty of 1826 with Denmark provides that there shall
not be paid on the vessels of the United States and their cargoes when
passing through the Sound higher duties than those of the most favored
nations. This may be regarded as an implied agreement to submit to the
tolls during the continuance of the treaty, and consequently may embarrass
the assertion of our right to be released therefrom. There are also other
provisions in the treaty which ought to be modified. It was to remain in
force for ten years and until one year after either party should give
notice to the other of intention to terminate it. I deem it expedient that
the contemplated notice should be given to the Government of Denmark.

The naval expedition dispatched about two years since for the purpose of
establishing relations with the Empire of Japan has been ably and
skillfully conducted to a successful termination by the officer to whom it
was intrusted. A treaty opening certain of the ports of that populous
country has been negotiated, and in order to give full effect thereto it
only remains to exchange ratifications and adopt requisite commercial
regulations.

The treaty lately concluded between the United States and Mexico settled
some of our most embarrassing difficulties with that country, but numerous
claims upon it for wrongs and injuries to our citizens remained unadjusted,
and many new cases have been recently added to the former list of
grievances. Our legation has been earnest in its endeavors to obtain from
the Mexican Government a favorable consideration of these claims, but
hitherto without success. This failure is probably in some measure to be
ascribed to the disturbed condition of that country. It has been my anxious
desire to maintain friendly relations with the Mexican Republic and to
cause its rights and territories to be respected, not only by our citizens,
but by foreigners who have resorted to the United States for the purpose of
organizing hostile expeditions against some of the States of that Republic.
The defenseless condition in which its frontiers have been left has
stimulated lawless adventurers to embark in these enterprises and greatly
increased the difficulty of enforcing our obligations of neutrality.
Regarding it as my solemn duty to fulfill efficiently these obligations not
only toward Mexico, but other foreign nations, I have exerted all the
powers with which I am invested to defeat such proceedings and bring to
punishment those who by taking a part therein violated our laws. The energy
and activity of our civil and military authorities have frustrated the
designs of those who meditated expeditions of this character except in two
instances. One of these, composed of foreigners, was at first countenanced
and aided by the Mexican Government itself, it having been deceived as to
their real object. The other, small in number, eluded the vigilance of the
magistrates at San Francisco and succeeded in reaching the Mexican
territories; but the effective measures taken by this Government compelled
the abandonment of the undertaking.

The commission to establish the new line between the United States and
Mexico, according to the provisions of the treaty of the 30th of December
last, has been organized, and the work is already commenced.

Our treaties with the Argentine Confederation and with the Republics of
Uruguay and Paraguay secure to us the free navigation of the river La Plata
and some of its larger tributaries, but the same success has not attended
our endeavors to open the Amazon. The reasons in favor of the free use of
that river I had occasion to present fully in a former message, and,
considering the cordial relations which have long existed between this
Government and Brazil, it may be expected that pending negotiations will
eventually reach a favorable result.

Convenient means of transit between the several parts of a country are not
only desirable for the objects of commercial and personal communication,
but essential to its existence under one government. Separated, as are the
Atlantic and Pacific coasts of the United States, by the whole breadth of
the continent, still the inhabitants of each are closely bound together by
community of origin and institutions and by strong attachment to the Union.
Hence the constant and increasing intercourse and vast interchange of
commercial productions between these remote divisions of the Republic. At
the present time the most practicable and only, commodious routes for
communication between them are by the way of the isthmus of Central
America. It is the duty of the Government to secure these avenues against
all danger of interruption.

In relation to Central America, perplexing questions existed between the
United States and Great Britain at the time of the cession of California.
These, as well as questions which subsequently arose concerning
interoceanic communication across the Isthmus, were, as it was supposed,
adjusted by the treaty of April 19, 1850, but, unfortunately, they have
been reopened by serious misunderstanding as to the import of some or its
provisions, a readjustment of which is now under consideration. Our
minister at London has made strenuous efforts to accomplish this desirable
object, but has not yet found it possible to bring the negotiations to a
termination.

As incidental to these questions, I deem it proper to notice an occurrence
which happened in Central America near the close of the last session of
Congress. So soon as the necessity was perceived of establishing
interoceanic communications across the Isthmus a company was organized,
under the authority of the State of Nicaragua, but composed for the most
part of citizens of the United States, for the purpose of opening such a
transit way by the river San Juan and Lake Nicaragua, which soon became an
eligible and much used route in the transportation of our citizens and
their property between the Atlantic and Pacific. Meanwhile, and in
anticipation of the completion and importance of this transit way, a number
of adventurers had taken possession of the old Spanish port at the mouth of
the river San Juan in open defiance of the State or States of Central
America, which upon their becoming independent had rightfully succeeded to
the local sovereignty and jurisdiction of Spain. These adventurers
undertook to change the name of the place from San Juan del Norte to
Greytown, and though at first pretending to act as the subjects of the
fictitious sovereign of the Mosquito Indians, they subsequently repudiated
the control of any power whatever, assumed to adopt a distinct political
organization, and declared themselves an independent sovereign state. If at
some time a faint hope was entertained that they might become a stable and
respectable community, that hope soon vanished. They proceeded to assert
unfounded claims to civil jurisdiction over Punta Arenas, a position on the
opposite side of the river San Juan, which was in possession, under a title
wholly independent of them, of citizens of the United States interested in
the Nicaragua Transit Company, and which was indispensably necessary to the
prosperous operation of that route across the Isthmus. The company resisted
their groundless claims, whereupon they proceeded to destroy some of its
buildings and attempted violently to dispossess it.

At a later period they organized a strong force for the purpose of
demolishing the establishment at Punta Arenas, but this mischievous design
was defeated by the interposition of one of our ships of war at that time
in the harbor of San Juan. Subsequently to this, in May last, a body of men
from Greytown crossed over to Punta Arenas, arrogating authority to arrest
on the charge of murder a captain of one of the steamboats of the Transit
Company. Being well aware that the claim to exercise jurisdiction there
would be resisted then, as it had been on previous occasions, they went
prepared to assert it by force of arms. Our minister to Central America
happened to be present on that occasion. Believing that the captain of the
steamboat was innocent (for he witnessed the transaction on which the
charge was founder), and believing also that the intruding party, having no
jurisdiction over the place where they proposed to make the arrest, would
encounter desperate resistance if they persisted in their purpose, he
interposed, effectually, to prevent violence and bloodshed. The American
minister afterwards visited Greytown, and whilst he was there a mob,
including certain of the so-called public functionaries of the place,
surrounded the house in which he was, avowing that they had come to arrest
him by order of some person exercising the chief authority. While parleying
with them he was wounded by a missile from the crowd. A boat dispatched
from the American steamer Northern Light to release him from the perilous
situation in which he was understood to be was fired into by the town guard
and compelled to return. These incidents, together with the known character
of the population of Greytown and their excited state, induced just
apprehensions that the lives and property of our citizens at Punta Arenas
would be in imminent danger after the departure of the steamer, with her
passengers, for New York, unless a guard was left for their protection. For
this purpose, and in order to insure the safety of passengers and property
passing over the route, a temporary force was organized, at considerable
expense to the United States, for which provision was made at the last
session of Congress.

This pretended community, a heterogeneous assemblage gathered from various
countries, and composed for the most part of blacks and persons of mixed
blood, had previously given other indications of mischievous and dangerous
propensities. Early in the same month property was clandestinely abstracted
from the depot of the Transit Company and taken to Greytown. The plunderers
obtained shelter there and their pursuers were driven back by its people,
who not only protected the wrongdoers and shared the plunder, but treated
with rudeness and violence those who sought to recover their property.

Such, in substance, are the facts submitted to my consideration, and proved
by trustworthy evidence. I could not doubt that the case demanded the
interposition of this Government. Justice required that reparation should
be made for so many and such gross wrongs, and that a course of insolence
and plunder, tending directly to the insecurity of the lives of numerous
travelers and of the rich treasure belonging to our citizens passing over
this transit way, should be peremptorily arrested. Whatever it might be in
other respects, the community in question, in power to do mischief, was not
despicable. It was well provided with ordnance, small arms, and ammunition,
and might easily seize on the unarmed boats, freighted with millions of
property, which passed almost daily within its reach. It did not profess to
belong to any regular government, and had, in fact, no recognized
dependence on or connection with anyone to which the United States or their
injured citizens might apply for redress or which could be held responsible
in any way for the outrages committed. Not standing before the world in the
attitude of an organized political society, being neither competent to
exercise the rights nor to discharge the obligations of a government, it
was, in fact, a marauding establishment too dangerous to be disregarded and
too guilty to pass unpunished, and yet incapable of being treated in any
other way than as a piratical resort of outlaws or a camp of savages
depredating on emigrant trains or caravans and the frontier settlements of
civilized states.

Seasonable notice was given to the people of Greytown that this Government
required them to repair the injuries they had done to our citizens and to
make suitable apology for their insult of our minister, and that a ship of
war would be dispatched thither to enforce compliance with these demands.
But the notice passed unheeded. Thereupon a commander of the Navy, in
charge of the sloop of war Cyane, was ordered to repeat the demands and to
insist upon a compliance therewith. Finding that neither the populace nor
those assuming to have authority over them manifested any disposition to
make the required reparation, or even to offer excuse for their conduct, he
warned them by a public proclamation that if they did not give satisfaction
within a time specified he would bombard the town. By this procedure he
afforded them opportunity to provide for their personal safety. To those
also who desired to avoid loss of property in the punishment about to be
inflicted on the offending town he furnished the means of removing their
effects by the boats of his own ship and of a steamer which he procured and
tendered to them for that purpose. At length, perceiving no disposition on
the part of the town to comply with his requisitions, he appealed to the
commander of Her Britannic Majesty's schooner Bermuda, who was seen to have
intercourse and apparently much influence with the leaders among them, to
interpose and persuade them to take some course calculated to save the
necessity of resorting to the extreme measure indicated in his
proclamation; but that officer, instead of acceding to the request, did
nothing more than to protest against the contemplated bombardment. No steps
of any sort were taken by the people to give the satisfaction required. No
individuals, if any there were, who regarded themselves as not responsible
for the misconduct of the community adopted any means to separate
themselves from the fate of the guilty. The several charges on which the
demands for redress were founded had been publicly known to all for some
time, and were again announced to them. They did not deny any of these
charges; they offered no explanation, nothing in extenuation of their
conduct, but contumaciously refused to hold any intercourse with the
commander of the Cyane. By their obstinate silence they seemed rather
desirous to provoke chastisement than to escape it. There is ample reason
to believe that this conduct of wanton defiance on their part is imputable
chiefly to the delusive idea that the American Government would be deterred
from punishing them through fear of displeasing a formidable foreign power,
which they presumed to think looked with complacency upon their aggressive
and insulting deportment toward the United States. The Cyane at length
fired upon the town. Before much injury had been done the fire was twice
suspended in order to afford opportunity for an arrangement, but this was
declined. Most of the buildings of the place, of little value generally,
were in the sequel destroyed, but, owing to the considerate precautions
taken by our naval commander, there was no destruction of life.

When the Cyane was ordered to Central America, it was confidently hoped and
expected that no occasion would arise for "a resort to violence and
destruction of property and loss of life." Instructions to that effect were
given to her commander; and no extreme act would have been requisite had
not the people themselves, by their extraordinary conduct in the affair,
frustrated all the possible mild measures for obtaining satisfaction. A
withdrawal from the place, the object of his visit entirely defeated, would
under the circumstances in which the commander of the Cyane found himself
have been absolute abandonment of all claim of our citizens for
indemnification and submissive acquiescence in national indignity. It would
have encouraged in these lawless men a spirit of insolence and rapine most
dangerous to the lives and property of our citizens at Punta Arenas, and
probably emboldened them to grasp at the treasures and valuable merchandise
continually passing over the Nicaragua route. It certainly would have been
most satisfactory to me if the objects of the Cyane's mission could have
been consummated without any act of public force, but the arrogant
contumacy of the offenders rendered it impossible to avoid the alternative
either to break up their establishment or to leave them impressed with the
idea that they might persevere with impunity in a career of insolence and
plunder.

This transaction has been the subject of complaint on the part of some
foreign powers, and has been characterized with more of harshness than of
justice. If comparisons were to be instituted, it would not be difficult to
present repeated instances in the history of states standing in the very
front of modern civilization where communities far less offending and more
defenseless than Greytown have been chastised with much greater severity,
and where not cities only have been laid in ruins, but human life has been
recklessly sacrificed and the blood of the innocent made profusely to
mingle with that of the guilty.

Passing from foreign to domestic affairs, your attention is naturally
directed to the financial condition of the country, always a subject of
general interest. For complete and exact information regarding the finances
and the various branches of the public service connected therewith I refer
you to the report of the Secretary of the Treasury, from which it will
appear that the amount of revenue during the last fiscal year from all
sources was $73,549,705, and that the public expenditures for the same
period, exclusive of payments on account of the public debt, amounted to
$51, 018,249. During the same period the payments made in redemption of the
public debt, including interest and premium, amounted to $24,336,380. To
the sum total of the receipts of that year is to be added a balance
remaining in the Treasury at the commencement thereof, amounting to
$21,942,892; and at the close of the same year a corresponding balance,
amounting to $20,137,967, of receipts above expenditures also remained in
the Treasury. Although, in the opinion of the Secretary of the Treasury,
the receipts of the current fiscal year are not likely to equal in amount
those of the last, yet they will undoubtedly exceed the amount of
expenditures by at least $15,000,000. I shall therefore continue to direct
that the surplus revenue be applied, so far as it can be judiciously and
economically done, to the reduction of the public debt, the amount of which
at the commencement of the last fiscal year was $67,340,628; of which there
had been paid on the 20th day of November, 1854, the sum of $22,365,172,
leaving a balance of outstanding public debt of only $44,975,456,
redeemable at different periods within fourteen years. There are also
remnants of other Government stocks, most of which are already due, and on
which the interest has ceased, but which have not yet been presented for
payment, amounting to $233,179. This statement exhibits the fact that the
annual income of the Government greatly exceeds the amount of its public
debt, which latter remains unpaid only because the time of payment has not
yet matured, and it can not be discharged at once except at the option of
public creditors, who prefer to retain the securities of the United States;
and the other fact, not less striking, that the annual revenue from all
sources exceeds by many millions of dollars the amount needed for a prudent
and economical administration of the Government.

The estimates presented to Congress from the different Executive
Departments at the last session amounted to $38,406,581 and the
appropriations made to the sum of $58,116,958. Of this excess of
appropriations over estimates, however, more than twenty millions was
applicable to extraordinary objects, having no reference to the usual
annual expenditures. Among these objects was embraced ten millions to meet
the third article of the treaty between the United States and Mexico; so
that, in fact, for objects of ordinary expenditure the appropriations were
limited to considerably less than $40,000,000. I therefore renew my
recommendation for a reduction of the duties on imports. The report of the
Secretary of the Treasury presents a series of tables showing the operation
of the revenue system for several successive years; and as the general
principle of reduction of duties with a view to revenue, and not
protection, may now be regarded as the settled policy of the country, I
trust that little difficulty will be encountered in settling the details of
a measure to that effect.

In connection with this subject I recommend a change in the laws, which
recent experience has shown to be essential to the protection of the
Government. There is no express provision of law requiring the records and
papers of a public character of the several officers of the Government to
be left in their offices for the use of their successors, nor any provision
declaring it felony on their part to make false entries in the books or
return false accounts. In the absence of such express provision by law, the
outgoing officers in many instances have claimed and exercised the right to
take into their own possession important books and papers, on the ground
that these were their private property, and have placed them beyond the
reach of the Government. Conduct of this character, brought in several
instances to the notice of the present Secretary of the Treasury, naturally
awakened his suspicion, and resulted in the disclosure that at four
ports--namely, Oswego, Toledo, Sandusky, and Milwaukee--the Treasury had,
by false entries, been defrauded within the four years next preceding
March, 1853, of the sum of $198,000. The great difficulty with which the
detection of these frauds has been attended, in consequence of the
abstraction of books and papers by the retiring officers, and the facility
with which similar frauds in the public service may be perpetrated render
the necessity of new legal enactments in the respects above referred to
quite obvious. For other material modifications of the revenue laws which
seem to me desirable, I refer you to the report of the Secretary of the
Treasury. That report and the tables which accompany it furnish ample
proofs of the solid foundation on which the financial security of the
country rests and of the salutary influence of the independent-treasury
system upon commerce and all monetary operations.

The experience of the last year furnishes additional reasons, I regret to
say, of a painful character, for the recommendation heretofore made to
provide for increasing the military force employed in the Territory
inhabited by the Indians. The settlers-on the frontier have suffered much
from the incursions of predatory bands, and large parties of emigrants to
our Pacific possessions have been massacred with impunity. The recurrence
of such scenes can only be prevented by teaching these wild tribes the
power of and their responsibility to the United States. From the garrisons
of our frontier posts it is only possible to detach troops in small bodies;
and though these have on all occasions displayed a gallantry and a stern
devotion to duty which on a larger field would have commanded universal
admiration, they have usually suffered severely in these conflicts with
superior numbers, and have sometimes been entirely sacrificed. All the
disposable force of the Army is already employed on this service, and is
known to be wholly inadequate to the protection which should be afforded.
The public mind of the country has been recently shocked by savage
atrocities committed upon defenseless emigrants and border settlements, and
hardly less by the unnecessary destruction of valuable lives where
inadequate detachments of troops have undertaken to furnish the needed aid.
Without increase of the military force these scenes will be repeated, it is
to be feared, on a larger scale and with more disastrous consequences.
Congress, I am sure, will perceive that the plainest duties and
responsibilities of Government are involved in this question, and I doubt
not that prompt action may be confidently anticipated when delay must be
attended by such fearful hazards.

The bill of the last session providing for an increase of the pay of the
rank and file of the Army has had beneficial results, not only in
facilitating enlistments, but in obvious improvement in the class of men
who enter the service. I regret that corresponding consideration was not
bestowed on the officers, who, in view of their character and services and
the expenses to which they are necessarily subject, receive at present what
is, in my judgment, inadequate compensation.

The valuable services constantly rendered by the Army and its inestimable
importance as the nucleus around which the volunteer forces of the nation
can promptly gather in the hour of danger, sufficiently attest the wisdom
of maintaining a military peace establishment; but the theory of our system
and the wise practice under it require that any proposed augmentation in
time of peace be only commensurate with our extended limits and frontier
relations. While scrupulously adhering to this principle, I find in
existing circumstances a necessity for increase of our military force, and
it is believed that four new regiments, two of infantry and two of mounted
men, will be sufficient to meet the present exigency. If it were necessary
carefully to weigh the cost in a case of such urgency, it would be shown
that the additional expense would be comparatively light.

With the increase of the numerical force of the Army should, I think, be
combined certain measures of reform in its organic arrangement and
administration. The present organization is the result of partial
legislation often directed to special objects and interests; and the laws
regulating rank and command, having been adopted many years ago from the
British code, are not always applicable to our service. It is not
surprising, therefore, that the system should be deficient in the symmetry
and simplicity essential to the harmonious working of its several parts,
and require a careful revision.

The present organization, by maintaining large staff corps or departments,
separates many officers from that close connection with troops and those
active duties in the field which are deemed requisite to qualify them for
the varied responsibilities of high command. Were the duties of the Army
staff mainly discharged by officers detached from their regiments, it is
believed that the special service would be equally well performed and the
discipline and instruction of the Army be improved. While due regard to the
security of the rights of officers and to the nice sense of honor which
should be cultivated among them would seem to exact compliance with the
established rule of promotion in ordinary cases, still it can hardly be
doubted that the range of promotion by selection, which is now practically
confined to the grade of general officers, might be somewhat extended with
benefit to the public service. Observance of the rule of seniority
sometimes leads, especially in time of peace, to the promotion of officers
who, after meritorious and even distinguished service, may have been
rendered by age or infirmity incapable of performing active duty, and whose
advancement, therefore, would tend to impair the efficiency of the Army.
Suitable provision for this class of officers, by the creation of a retired
list, would remedy the evil without wounding the just pride of men who by
past services have established a claim to high consideration. In again
commending this measure to the favorable consideration of Congress I would
suggest that the power of placing officers on the retired list be limited
to one year. The practical operation of the measure would thus be tested,
and if after the lapse of years there should be occasion to renew the
provision it can be reproduced with any improvements which experience may
indicate. The present organization of the artillery into regiments is
liable to obvious objections. The service of artillery is that of
batteries, and an organization of batteries into a corps of artillery would
be more consistent with the nature of their duties. A large part of the
troops now called artillery are, and have been, on duty as infantry, the
distinction between the two arms being merely nominal. This nominal
artillery in our service is disproportionate to the whole force and greater
than the wants of the country demand. I therefore commend the
discontinuance of a distinction which has no foundation in either the arms
used or the character of the service expected to be performed.

In connection with the proposition for the increase of the Army, I have
presented these suggestions with regard to certain measures of reform as
the complement of a system which would produce the happiest results from a
given expenditure, and which, I hope, may attract the early attention and
be deemed worthy of the approval of Congress.

The recommendation of the Secretary of the Navy having reference to more
ample provisions for the discipline and general improvement in the
character of seamen and for the reorganization and gradual increase of the
Navy I deem eminently worthy of your favorable consideration. The
principles which have controlled our policy in relation to the permanent
military force by sea and land are sound, consistent with the theory of our
system, and should by no means be disregarded. But, limiting the force to
the objects particularly set forth in the preceding part of this message,
we should not overlook the present magnitude and prospective extension of
our commercial marine, nor fail to give due weight to the fact that besides
the 2,000 miles of Atlantic seaboard we have now a Pacific coast stretching
from Mexico to the British possessions in the north, teeming with wealth
and enterprise and demanding the constant presence of ships of war. The
augmentation of the Navy has not kept pace with the duties properly and
profitably assigned to it in time of peace, and it is inadequate for the
large field of its operations, not merely in the present, but still more in
the progressively increasing exigencies of the commerce of the United
States. I cordially approve of the proposed apprentice system for our
national vessels recommended by the Secretary of the Navy. The occurrence
during the last few months of marine disasters of the most tragic nature,
involving great loss of human life, has produced intense emotions of
sympathy and sorrow throughout the country. It may well be doubted whether
all these calamitous events are wholly attributable to the necessary and
inevitable dangers of the sea. The merchants, mariners, and shipbuilders of
the United States are, it is true, unsurpassed in far-reaching enterprise,
skill, intelligence, and courage by any others in the world. But with the
increasing amount of our commercial tonnage in the aggregate and the larger
size and improved equipment of the ships now constructed a deficiency in
the supply of reliable seamen begins to be very seriously felt. The
inconvenience may perhaps be met in part by due regulation for the
introduction into our merchant ships of indented apprentices, which, while
it would afford useful and eligible occupation to numerous young men, would
have a tendency to raise the character of seamen as a class. And it is
deserving of serious reflection whether it may not be desirable to revise
the existing laws for the maintenance of discipline at sea, upon which the
security of life and property on the ocean must to so great an extent
depend. Although much attention has already been given by Congress to the
proper construction and arrangement of steam vessels and all passenger
ships, still it is believed that the resources of science and mechanical
skill in this direction have not been exhausted. No good reason exists for
the marked distinction which appears upon our statutes between the laws for
protecting life and property at sea and those for protecting them on land.
In most of the States severe penalties are provided to punish conductors of
trains, engineers, and others employed in the transportation of persons by
railway or by steamboats on rivers. Why should not the same principle be
applied to acts of insubordination, cowardice, or other misconduct on the
part of masters and mariners producing injury or death to passengers on the
high seas, beyond the jurisdiction of any of the States, and where such
delinquencies can be reached only by the power of Congress? The whole
subject is earnestly commended to your consideration.

The report of the Postmaster-General, to which you are referred for many
interesting details in relation to this important and rapidly extending
branch of the public service, shows that the expenditure of the year ending
June 30, 1854, including $133,483 of balance due to foreign offices,
amounted to $8,710,907. The gross receipts during the same period amounted
to $6,955,586, exhibiting an expenditure over income of $1,755,321 and a
diminution of deficiency as compared with the last year of $361,756. The
increase of the revenue of the Department for the year ending June 30,
1854, over the preceding year was $970,399. No proportionate increase,
however, can be anticipated for the current year, in consequence of the act
of Congress of June 23, 1854, providing for increased compensation to all
postmasters. From these statements it is apparent that the Post-Office
Department, instead of defraying its expenses according to the design at
the time of its creation, is now, and under existing laws must continue to
be, to no small extent a charge upon the general Treasury. The cost of mail
transportation during the year ending June 30, 1854, exceeds the cost of
the preceding year by $495,074. I again call your attention to the subject
of mail transportation by ocean steamers, and commend the suggestions of
the Postmaster General to your early attention.

During the last fiscal year 11,070,935 acres of the public lands have been
surveyed and 8,190,017 acres brought into market. The number of acres sold
is 7,035,735 and the amount received therefor $9,285,533. The aggregate
amount of lands sold, located under military scrip and land warrants,
selected as swamp lands by States, and by locating under grants for roads
is upward of 23,000,000 acres. The increase of lands sold over the previous
year is about 6,000,000 acres, and the sales during the first two quarters
of the current year present the extraordinary result of five and a half
millions sold, exceeding by nearly 4,000,000 acres the sales of the
corresponding quarters of the last year.

The commendable policy of the Government in relation to setting apart
public domain for those who have served their country in time of war is
illustrated by the fact that since 1790 no less than 30,000,000 acres have
been applied to this object.

The suggestions which I submitted in my annual message of last year in
reference to grants of land in aid of the construction of railways were
less full and explicit than the magnitude of the subject and subsequent
developments would seem to render proper and desirable. Of the soundness of
the principle then asserted with regard to the limitation of the power of
Congress I entertain no doubt, but in its application it is not enough that
the value of lands in a particular locality may be enhanced; that, in fact,
a larger amount of money may probably be received in a given time for
alternate sections than could have been realized for all the sections
without the impulse and influence of the proposed improvements. A prudent
proprietor looks beyond limited sections of his domain, beyond present
results to the ultimate effect which a particular line of policy is likely
to produce upon all his possessions and interests. The Government, which is
trustee in this matter for the people of the States, is bound to take the
same wise and comprehensive view. Prior to and during the last session of
Congress upward of 30,000,000 acres of land were withdrawn from public sale
with a view to applications for grants of this character pending before
Congress. A careful review of the whole subject led me to direct that all
such orders be abrogated and the lands restored to market, and instructions
were immediately given to that effect. The applications at the last session
contemplated the construction of more than 5,000 miles of road and grants
to the amount of nearly 20,000,000 acres of the public domain. Even
admitting the right on the part of Congress to be unquestionable, is it
quite clear that the proposed grants would be productive of good, and not
evil? The different projects are confined for the present to eleven States
of this Union and one Territory. The reasons assigned for the grants show
that it is proposed to put the works speedily in process of construction.
When we reflect that since the commencement of the construction of railways
in the United States, stimulated, as they have been, by the large dividends
realized from the earlier works over the great thoroughfares and between
the most important points of commerce and population, encouraged by State
legislation, and pressed forward by the amazing energy of private
enterprise, only 17,000 miles have been completed in all the States in a
quarter of a century; when we see the crippled condition of many works
commenced and prosecuted upon what were deemed to be sound principles and
safe calculations; when we contemplate the enormous absorption of capital
withdrawn from the ordinary channels of business, the extravagant rates of
interest at this moment paid to continue operations, the bankruptcies, not
merely in money but in character, and the inevitable effect upon finances
generally, can it be doubted that the tendency is to run to excess in this
matter? Is it wise to augment this excess by encouraging hopes of sudden
wealth expected to flow from magnificent schemes dependent upon the action
of Congress? Does the spirit which has produced such results need to be
stimulated or checked? Is it not the better rule to leave all these works
to private enterprise, regulated and, when expedient, aided by the
cooperation of States? If constructed by private capital the stimulant and
the check go together and furnish a salutary restraint against speculative
schemes and extravagance. But it is manifest that with the most effective
guards there is danger of going too fast and too far. We may well pause
before a proposition contemplating a simultaneous movement for the
construction of railroads which in extent will equal, exclusive of the
great Pacific road and all its branches, nearly one-third of the entire
length of such works now completed in the United States, and which can not
cost with equipments less than $150,000,000. The dangers likely to result
from combinations of interests of this character can hardly be
overestimated. But independently of these considerations, where is the
accurate knowledge, the comprehensive intelligence, which shall
discriminate between the relative claims of these twenty eight proposed
roads in eleven States and one Territory? Where will you begin and where
end? If to enable these companies to execute their proposed works it is
necessary that the aid of the General Government be primarily given, the
policy will present a problem so comprehensive in its bearings and so
important to our political and social well-being as to claim in
anticipation the severest analysis. Entertaining these views, I recur with
satisfaction to the experience and action of the last session of Congress
as furnishing assurance that the subject will not fail to elicit a careful
reexamination and rigid scrutiny. It was my intention to present on this
occasion some suggestions regarding internal improvements by the General
Government, which want of time at the close of the last session prevented
my submitting on the return to the House of Representatives with objections
of the bill entitled "An act making appropriations for the repair,
preservation, and completion of certain public works heretofore commenced
under the authority of law;" but the space in this communication already
occupied with other matter of immediate public exigency constrains me to
reserve that subject for a special message, which will be transmitted to
the two Houses of Congress at an early day. The judicial establishment of
the United States requires modification, and certain reforms in the manner
of conducting the legal business of the Government are also much needed;
but as I have addressed you upon both of these subjects at length before, I
have only to call your attention to the suggestions then made.

My former recommendations in relation to suitable provision for various
objects of deep interest to the inhabitants of the District of Columbia are
renewed. Many of these objects partake largely of a national character, and
are important independently of their relation to the prosperity of the only
considerable organized community in the Union entirely unrepresented in
Congress.

I have thus presented suggestions on such subjects as appear to me to be of
particular interest or importance, and therefore most worthy of
consideration during the short remaining period allotted to the labors of
the present Congress.

Our forefathers of the thirteen united colonies, in acquiring their
independence and in rounding this Republic of the United States of America,
have devolved upon us, their descendants, the greatest and the most noble
trust ever committed to the hands of man, imposing upon all, and especially
such as the public will may have invested for the time being with political
functions, the most sacred obligations. We have to maintain inviolate the
great doctrine of the inherent right of popular self-government; to
reconcile the largest liberty of the individual citizen with complete
security of the public order; to render cheerful obedience to the laws of
the land, to unite in enforcing their execution, and to frown indignantly
on all combinations to resist them; to harmonize a sincere and ardent
devotion to the institutions of religions faith with the most universal
religious toleration; to preserve the rights of all by causing each to
respect those of the other; to carry forward every social improvement to
the uttermost limit of human perfectibility, by the free action of mind
upon mind, not by the obtrusive intervention of misapplied force; to uphold
the integrity and guard the limitations of our organic law; to preserve
sacred from all touch of usurpation, as the very palladium of our political
salvation, the reserved rights and powers of the several States and of the
people; to cherish with loyal fealty and devoted affection this Union, as
the only sure foundation on which the hopes of civil liberty rest; to
administer government with vigilant integrity and rigid economy; to
cultivate peace and friendship with foreign nations, and to demand and
exact equal justice from all, but to do wrong to none; to eschew
intermeddling with the national policy and the domestic repose of other
governments, and to repel it from our own; never to shrink from war when
the rights and the honor of the country call us to arms, but to cultivate
in preference the arts of peace, seek enlargement of the rights of
neutrality, and elevate and liberalize the intercourse of nations; and by
such just and honorable means, and such only, whilst exalting the condition
of the Republic, to assure to it the legitimate influence and the benign
authority of a great example amongst all the powers of Christendom.

Under the solemnity of these convictions the blessing of Almighty God is
earnestly invoked to attend upon your deliberations and upon all the
counsels and acts of the Government, to the end that, with common zeal and
common efforts, we may, in humble submission to the divine will, cooperate
for the promotion of the supreme good of these United States.