To the Senate and House of Representatives of the United States:

We have continued cause for expressing our gratitude to the Supreme Ruler
of the Universe for the benefits and blessings which our country, under His
kind providence, has enjoyed during the past year. Notwithstanding the
exciting scenes through which we have passed, nothing has occurred to
disturb the general peace or to derange the harmony of our political
system. The great moral spectacle has been exhibited of a nation
approximating in number to 20,000,000 people having performed the high and
important function of electing their Chief Magistrate for the term of four
years without the commission of any acts of violence or the manifestation
of a spirit of insubordination to the laws. The great and inestimable right
of suffrage has been exercised by all who were invested with it under the
laws of the different States in a spirit dictated alone by a desire, in the
selection of the agent, to advance the interests of the country and to
place beyond jeopardy the institutions under which it is our happiness to
live. That the deepest interest has been manifested by all our countrymen
in the result of the election is not less true than highly creditable to
them. Vast multitudes have assembled from time to time at various places
for the purpose of canvassing the merits and pretensions of those who were
presented for their suffrages, but no armed soldiery has been necessary to
restrain within proper limits the popular zeal or to prevent violent
outbreaks. A principle much more controlling was found in the love of order
and obedience to the laws, which, with mere individual exceptions,
everywhere possesses the American mind, and controls with an influence far
more powerful than hosts of armed men. We can not dwell upon this picture
without recognizing in it that deep and devoted attachment on the part of
the people to the institutions under which we live which proclaims their
perpetuity. The great objection which has always prevailed against the
election by the people of their chief executive officer has been the
apprehension of tumults and disorders which might involve in ruin the
entire Government. A security against this is found not only in the fact
before alluded to, trot in the additional fact that we live under a
Confederacy embracing already twenty-six States, no one of which has power
to control the election. The popular vote in each State is taken at the
time appointed by the laws, and such vote is announced by the electoral
college without reference to the decision of other States. The right of
suffrage and the mode of conducting the election are regulated by the laws
of each State, and the election is distinctly federative in all its
prominent features. Thus it is that, unlike what might be the results under
a consolidated system, riotous proceedings, should they prevail, could only
affect the elections in single States without disturbing to any dangerous
extent the tranquillity of others. The great experiment of a political
confederation each member of which is supreme as to all matters
appertaining to its local interests and its internal peace and happiness,
while by a voluntary compact with others it confides to the united power of
all the protection of its citizens in matters not domestic has been so far
crowned with complete success. The world has witnessed its rapid growth in
wealth and population, and under the guide and direction of a
superintending Providence the developments of the past may be regarded but
as the shadowing forth of the mighty future. In the bright prospects of
that future we shall find, as patriots and philanthropists, the highest
inducements to cultivate and cherish a love of union and to frown down
every measure or effort which may be made to alienate the States or the
people of the States in sentiment and feeling from each other. A rigid and
close adherence to the terms of our political compact and, above all, a
sacred observance of the guaranties of the Constitution will preserve union
on a foundation which can not be shaken, while personal liberty is placed
beyond hazard or jeopardy. The guaranty of religious freedom, of the
freedom of the press, of the liberty of speech, of the trial by jury, of
the habeas corpus, and of the domestic institutions of each of the States,
leaving the private citizen in the full exercise of the high and ennobling
attributes of his nature and to each State the privilege (which can only be
judiciously exerted by itself) of consulting the means best calculated to
advance its own happiness--these are the great and important guaranties of
the Constitution which the lovers of liberty must cherish and the advocates
of union must ever cultivate. Preserving these and avoiding all
interpolations by forced construction under the guise of an imagined
expediency upon the Constitution, the influence of our political system is
destined to be as actively and as beneficially felt on the distant shores
of the Pacific as it is now on those of the Atlantic Ocean. The only
formidable impediments in the way of its successful expansion (time and
space) are so far in the progress of modification by the improvements of
the age as to render no longer speculative the ability of representatives
from that remote region to come up to the Capitol, so that their
constituents shall participate in all the benefits of Federal legislation.
Thus it is that in the progress of time the inestimable principles of civil
liberty will be enjoyed by millions yet unborn and the great benefits of
our system of government be extended to now distant and uninhabited
regions. In view of the vast wilderness yet to be reclaimed, we may well
invite the lover of freedom of every land to take up his abode among us and
assist us in the great work of advancing the standard of civilization and
giving a wider spread to the arts and refinements of cultivated life. Our
prayers should evermore be offered up to the Father of the Universe for His
wisdom to direct us in the path of our duty so as to enable us to
consummate these high purposes.

One of the strongest objections which has been urged against confederacies
by writers on government is the liability of the members to be tampered
with by foreign governments or the people of foreign states, either in
their local affairs or in such as affected the peace of others or
endangered the safety of the whole confederacy. We can not hope to be
entirely exempt from such attempts on our peace and safety. The United
States are becoming too important in population and resources not to
attract the observation of other nations. It therefore may in the progress
of time occur that opinions entirely abstract in the States which they may
prevail and in no degree affecting their domestic institutions may be
artfully but secretly encouraged with a view to undermine the Union. Such
opinions may become the foundation of political parties, until at last the
conflict of opinion, producing an alienation of friendly feeling among the
people of the different States, may involve in general destruction the
happy institutions under which we live. It should ever be borne in mind
that what is true in regard to individuals is equally so in regard to
states. An interference of one in the affairs of another is the fruitful
cause of family dissensions and neighborhood disputes, and the same cause
affects the peace, happiness, and prosperity of states. It may be most
devoutly hoped that the good sense of the American people will ever be
ready to repel all such attempts should they ever be made.

There has been no material change in our foreign relations since my last
annual message to Congress. With all the powers of Europe we continue on
the most friendly terms. Indeed, it affords me much satisfaction to state
that at no former period has the peace of that enlightened and important
quarter of the globe ever been, apparently, more firmly established. The
conviction that peace is the true policy of nations would seem to be
growing and becoming deeper amongst the enlightened everywhere, and there
is no people who have a stronger interest in cherishing the sentiments and
adopting the means of preserving and giving it permanence than those of the
United States. Amongst these, the first and most effective are, no doubt,
the strict observance of justice and the honest and punctual fulfillment of
all engagements. But it is not to be forgotten that in the present state of
the world it is no less necessary to be ready to enforce their observance
and fulfillment in reference to ourselves than to observe and fulfill them
on our part in regard to others.

Since the close of your last session a negotiation has been formally
entered upon between the Secretary of State and Her Britannic Majesty's
minister plenipotentiary and envoy extraordinary residing at Washington
relative to the rights of their respective nations in and over the Oregon
Territory. That negotiation is still pending. Should it during your session
be brought to a definitive conclusion, the result will be promptly
communicated to Congress. I would, however, again call your attention to
the recommendations contained in previous messages designed to protect and
facilitate emigration to that Territory. The establishment of military
posts at suitable points upon the extended line of land travel would enable
our citizens to emigrate in comparative safety to the fertile regions below
the Falls of the Columbia, and make the provision of the existing
convention for the joint occupation of the territory by subjects of Great
Britain and the citizens of the United States more available than
heretofore to the latter. These posts would constitute places of rest for
the weary emigrant, where he would be sheltered securely against the danger
of attack from the Indians and be enabled to recover from the exhaustion of
a long line of travel. Legislative enactments should also be made which
should spread over him the aegis of our laws, so as to afford protection to
his person and property when he shall have reached his distant home. In
this latter respect the British Government has been much more careful of
the interests of such of her people as are to be found in that country than
the United States. She has made necessary provision for their security and
protection against the acts of the viciously disposed and lawless, and her
emigrant reposes in safety under the panoply of her laws. Whatever may be
the result of the pending negotiation, such measures are necessary. It will
afford me the greatest pleasure to witness a happy and favorable
termination to the existing negotiation upon terms compatible with the
public honor, and the best efforts of the Government will continue to be
directed to this end.

It would have given me the highest gratification in this my last annual
communication to Congress to have been able to announce to you the complete
and entire settlement and adjustment of other matters in difference between
the United States and the Government of Her Britannic Majesty, which were
adverted to in a previous message. It is so obviously the interest of both
countries, in respect to the large and valuable commerce which exists
between them, that all causes of complaint, however inconsiderable, should
be with the greatest promptitude removed that it must be regarded as cause
of regret that any unnecessary delays should be permitted to intervene. It
is true that in a pecuniary point of view the matters alluded to are
altogether insignificant in amount when compared with the ample resources
of that great nation, but they nevertheless, more particularly that limited
class which arise under seizures and detentions of American ships on the
coast of Africa upon the mistaken supposition indulged in at the time the
wrong was committed of their being engaged in the slave trade, deeply
affect the sensibilities of this Government and people. Great Britain,
having recognized her responsibility to repair all such wrongs by her
action in other cases, leaves nothing to be regretted upon the subject as
to all cases arising prior to the treaty of Washington than the delay in
making suitable reparation in such of them as fall plainly within the
principle of others which she has long since adjusted. The injury inflicted
by delays in the settlement of these claims falls with severity upon the
individual claimants and makes a strong appeal to her magnanimity and sense
of justice for a speedy settlement. Other matters arising out of the
construction of existing treaties also remain unadjusted, and will continue
to be urged upon her attention.

The labors of the joint commission appointed by the two Governments to run
the dividing line established by the treaty of Washington were,
unfortunately, much delayed in the commencement of the season by the
failure of Congress at its last session to make a timely appropriation of
funds to meet the expenses of the American party, and by other causes. The
United States commissioner, however, expresses his expectation that by
increased diligence and energy the party will be able to make up for lost
time.

We continue to receive assurances of the most friendly feelings on the part
of all the other European powers, with each and all of whom it is so
obviously our interest to cultivate the most amicable relations; nor can I
anticipate the occurrence of any event which would be likely in any degree
to disturb those relations. Russia, the great northern power, under the
judicious sway of her Emperor, is constantly advancing in the road of
science and improvement, while France, guided by the counsels of her wise
Sovereign, pursues a course calculated to consolidate the general peace.
Spain has obtained a breathing spell of some duration from the internal
convulsions which have through so many years marred her prosperity, while
Austria, the Netherlands, Prussia, Belgium, and the other powers of Europe
reap a rich harvest of blessings from the prevailing peace.

I informed the two Houses of Congress in my message of December last that
instructions had been given to Mr. Wheaton, our minister at Berlin, to
negotiate a treaty with the Germanic States composing the Zollverein if it
could be done, stipulating, as far as it was practicable to accomplish it,
for a reduction of the heavy and onerous duties levied on our tobacco and
other leading articles of agricultural production, and yielding in return
on our part a reduction of duties on such articles the product of their
industry as should not come into competition, or but a limited one, with
articles the product of our manufacturing industry. The Executive in giving
such instructions considered itself as acting in strict conformity with the
wishes of Congress as made known through several measures which it had
adopted, all directed to the accomplishment of this important result. The
treaty was therefore negotiated, by which essential reductions were secured
in the duties levied by the Zollverein on tobacco, rice, and lard,
accompanied by a stipulation for the admission of raw cotton free of duty;
in exchange for which highly important concessions a reduction of duties
imposed by the laws of the United States on a variety of articles, most of
which were admitted free of all duty under the act of Congress commonly
known as the compromise law, and but few of which were produced in the
United States, was stipulated for on our part. This treaty was communicated
to the Senate at an early day of its last session, but not acted upon until
near its close, when, for the want (as I am bound to presume) of full time
to consider it, it was laid upon the table. This procedure had the effect
of virtually rejecting it, in consequence of a stipulation contained in the
treaty that its ratifications should be exchanged on or before a day which
has already passed. The Executive, acting upon the fair inference that the
Senate did not intend its absolute rejection, gave instructions to our
minister at Berlin to reopen the negotiation so far as to obtain an
extension of time for the exchange of ratifications. I regret, however, to
say that his efforts in this respect have been unsuccessful. I am
nevertheless not without hope that the great advantages which were intended
to be secured by the treaty may yet be realized.

I am happy to inform you that Belgium has, by an "arrete royale" issued in
July last, assimilated the flag of the United States to her own, so far as
the direct trade between the two countries is concerned. This measure will
prove of great service to our shipping interest, the trade having
heretofore been carried on chiefly in foreign bottoms. I flatter myself
that she will speedily resort to a modification of her system relating to
the tobacco trade, which would decidedly benefit the agriculture of the
United States and operate to the mutual advantage of both countries.

No definitive intelligence has yet been received from our minister of the
conclusion of a treaty with the Chinese Empire, but enough is known to
induce the strongest hopes that the mission will be crowned with success.

With Brazil our relations continue on the most friendly footing. The
commercial intercourse between that growing Empire and the United States is
becoming daily of greater importance to both, and it is to the interest of
both that the firmest relations of amity and good will should continue to
be cultivated between them.

The Republic of New Granada still withholds, notwithstanding the most
persevering efforts have been employed by our charge d'affaires, Mr.
Blackford, to produce a different result, indemnity in the case of the brig
Morris; and the Congress of Venezuela, although an arrangement has been
effected between our minister and the minister of foreign affairs of that
Government for the payment of $18,000 in discharge of its liabilities in
the same case, has altogether neglected to make provision for its payment.
It is to be hoped that a sense of justice will soon induce a settlement of
these claims.

Our late minister to Chili, Mr. Pendleton, has returned to the United
States without having effected an adjustment in the second claim of the
Macedonian, which is delayed on grounds altogether frivolous and untenable.
Mr. Pendleton's successor has been directed to urge the claim in the
strongest terms, and, in the event of a failure to obtain a prompt
adjustment, to report the fact to the Executive at as early a day as
possible, so that the whole matter may be communicated to Congress.

At your last session I submitted to the attention of Congress the
convention with the Republic of Peru of the 17th March, 1841, providing for
the adjustment of the claims of citizens of the United States against that
Republic, but no definitive action was taken upon the subject. I again
invite to it your attention and prompt action.

In my last annual message I felt it to be my duty to make known to
Congress, in terms both plain and emphatic, my opinion in regard to the war
which has so long existed between Mexico and Texas which since the battle
of San Jacinto has consisted altogether of predatory incursions, attended
by circumstances revolting to humanity. I repeat now what I then said, that
after eight years of feeble and ineffectual efforts to reconquer Texas it
was time that the war should have ceased. The United States have a direct
interest in the question. The contiguity of the two nations to our
territory was but too well calculated to involve our peace. Unjust
suspicions were engendered in the mind of one or the other of the
belligerents against us, and as a necessary consequence American interests
were made to suffer and our peace became daily endangered; in addition to
which it must have been obvious to all that the exhaustion produced by the
war subjected both Mexico and Texas to the interference of other powers,
which, without the interposition of this Government, might eventuate in the
most serious injury to the United States. This Government from time to time
exerted its friendly offices to bring about a termination of hostilities
upon terms honorable alike to both the belligerents. Its efforts in this
behalf proved unavailing. Mexico seemed almost without an object to
persevere in the war, and no other alternative was left the Executive but
to take advantage of the well-known dispositions of Texas and to invite her
to enter into a treaty for annexing her territory to that of the United
States.

Since your last session Mexico has threatened to renew the war, and has
either made or proposes to make formidable preparations for invading Texas.
She has issued decrees and proclamations, preparatory to the commencement
of hostilities, full of threats revolting to humanity, and which if carried
into effect would arouse the attention of all Christendom. This new
demonstration of feeling, there is too much reason to believe, has been
produced in consequence of the negotiation of the late treaty of annexation
with Texas. The Executive, therefore, could not be indifferent to such
proceedings, and it felt it to be due as well to itself as to the honor of
the country that a strong representation should be made to the Mexican
Government upon the subject. This was accordingly done, as will be seen by
the copy of the accompanying dispatch from the Secretary of State to the
United States envoy at Mexico. Mexico has no right to jeopard the peace of
the world by urging any longer a useless and fruitless contest. Such a
condition of things would not be tolerated on the European continent. Why
should it be on this? A war of desolation, such as is now threatened by
Mexico, can not be waged without involving our peace and tranquillity. It
is idle to believe that such a war could be looked upon with indifference
by our own citizens inhabiting adjoining States; and our neutrality would
be violated in despite of all efforts on the part of the Government to
prevent it. The country is settled by emigrants from the United States
under invitations held out to them by Spain and Mexico. Those emigrants
have left behind them friends and relatives, who would not fail to
sympathize with them in their difficulties, and who would be led by those
sympathies to participate in their struggles, however energetic the action
of the Government to prevent it. Nor would the numerous and formidable
bands of Indians--the most warlike to be found in any land--which
occupy the extensive regions contiguous to the States of Arkansas and
Missouri, and who are in possession of large tracts of country within the
limits of Texas, be likely to remain passive. The inclinations of those
numerous tribes lead them invariably to war whenever pretexts exist.

Mexico had no just ground of displeasure against this Government or people
for negotiating the treaty. What interest of hers was affected by the
treaty? She was despoiled of nothing, since Texas was forever lost to her.
The independence of Texas was recognized by several of the leading powers
of the earth. She was free to treat, free to adopt her own line of policy,
free to take the course which she believed was best calculated to secure
her happiness.

Her Government and people decided on annexation to the United States, and
the Executive saw in the acquisition of such a territory the means of
advancing their permanent happiness and glory. What principle of good
faith, then, was violated? What rule of political morals trampled under
foot? So far as Mexico herself was concerned, the measure should have been
regarded by her as highly beneficial. Her inability to reconquer Texas had
been exhibited, I repeat, by eight (now nine) years of fruitless and
ruinous contest. In the meantime Texas has been growing in population and
resources. Emigration has flowed into her territory from all parts of the
world in a current which continues to increase in strength. Mexico requires
a permanent boundary between that young Republic and herself. Texas at no
distant day, if she continues separate and detached from the United States,
will inevitably seek to consolidate her strength by adding to her domain
the contiguous Provinces of Mexico. The spirit of revolt from the control
of the central Government has heretofore manifested itself in some of those
Provinces, and it is fair to infer that they would be inclined to take the
first favorable opportunity to proclaim their independence and to form
close alliances with Texas. The war would thus be endless, or if cessations
of hostilities should occur they would only endure for a season. The
interests of Mexico, therefore, could in nothing be better consulted than
in a peace with her neighbors which would result in the establishment of a
permanent boundary. Upon the ratification of the treaty the Executive was
prepared to treat with her on the most liberal basis. Hence the boundaries
of Texas were left undefined by the treaty. The Executive proposed to
settle these upon terms that all the world should have pronounced just and
reasonable. No negotiation upon that point could have been undertaken
between the United States and Mexico in advance of the ratification of the
treaty. We should have had no right, no power, no authority, to have
conducted such a negotiation, and to have undertaken it would have been an
assumption equally revolting to the pride of Mexico and Texas and
subjecting us to the charge of arrogance, while to have proposed in advance
of annexation to satisfy Mexico for any contingent interest she might have
in Texas would have been to have treated Texas not as an independent power,
but as a mere dependency of Mexico. This assumption could not have been
acted on by the Executive without setting at defiance your own solemn
declaration that that Republic was an independent State. Mexico had, it is
true, threatened war against the United States in the event the treaty of
annexation was ratified. The Executive could not permit itself to be
influenced by this threat. It represented in this the spirit of our people,
who are ready to sacrifice much for peace, but nothing to intimidation. A
war under any circumstances is greatly to be deplored, and the United
States is the last nation to desire it; but if, as the condition of peace,
it be required of us to forego the unquestionable right of treating with an
independent power of our own continent upon matters highly interesting to
both, and that upon a naked and unsustained pretension of claim by a third
power to control the free will of the power with whom we treat, devoted as
we may be to peace and anxious to cultivate friendly relations with the
whole world, the Executive does not hesitate to say that the people of the
United States would be ready to brave all consequences sooner than submit
to such condition. But no apprehension of war was entertained by the
Executive, and I must express frankly the opinion that had the treaty been
ratified by the Senate it would have been followed by a prompt settlement,
to the entire satisfaction of Mexico, of every matter in difference between
the two countries. Seeing, then, that new preparations for hostile invasion
of Texas were about to be adopted by Mexico, and that these were brought
about because Texas had adopted the suggestions of the Executive upon the
subject of annexation, it could not passively have folded its arms and
permitted a war, threatened to be accompanied by every act that could mark
a barbarous age, to be waged against her because she had done so.

Other considerations of a controlling character influenced the course of
the Executive. The treaty which had thus been negotiated had failed to
receive the ratification of the Senate. One of the chief objections which
was urged against it was found to consist in the fact that the question of
annexation had not been submitted to the ordeal of public opinion in the
United States. However untenable such an objection was esteemed to be, in
view of the unquestionable power of the Executive to negotiate the treaty
and the great and lasting interests involved in the question, I felt it to
be my duty to submit the whole subject to Congress as the best expounders
of popular sentiment. No definitive action having been taken on the subject
by Congress, the question referred itself directly to the decision of the
States and people. The great popular election which has just terminated
afforded the best opportunity of ascertaining the will of the States and
the people upon it. Pending that issue it became the imperative duty of the
Executive to inform Mexico that the question of annexation was still before
the American people, and that until their decision was pronounced any
serious invasion of Texas would be regarded as an attempt to forestall
their judgment and could not be looked upon with indifference. I am most
happy to inform you that no such invasion has taken place; and I trust that
whatever your action may be upon it Mexico will see the importance of
deciding the matter by a resort to peaceful expedients in preference to
those of arms. The decision of the people and the States on this great and
interesting subject has been decisively manifested. The question of
annexation has been presented nakedly to their consideration. By the treaty
itself all collateral and incidental issues which were calculated to divide
and distract the public councils were carefully avoided. These were left to
the wisdom of the future to determine. It presented, I repeat, the isolated
question of annexation, and in that form it has been submitted to the
ordeal of public sentiment. A controlling majority of the people and a
large majority of the States have declared in favor of immediate
annexation. Instructions have thus come up to both branches of Congress
from their respective constituents in terms the most emphatic. It is the
will of both the people and the States that Texas shall be annexed to the
Union promptly and immediately. It may be hoped that in carrying into
execution the public will thus declared all collateral issues may be
avoided. Future Legislatures can best decide as to the number of States
which should be formed out of the territory when the time has arrived for
deciding that question. So with all others. By the treaty the United States
assumed the payment of the debts of Texas to an amount not exceeding
$10,000,000, to be paid, with the exception of a sum falling short of
$400,000, exclusively out of the proceeds of the sales of her public lands.
We could not with honor take the lands without assuming the full payment of
all incumbencies upon them.

Nothing has occurred since your last session to induce a doubt that the
dispositions of Texas remain unaltered. No intimation of an altered
determination on the part of her Government and people has been furnished
to the Executive. She still desires to throw herself under the protection
of our laws and to partake of the blessings of our federative system, while
every American interest would seem to require it. The extension of our
coastwise and foreign trade to an amount almost incalculable, the
enlargement of the market for our manufactures, a constantly growing market
for our agricultural productions, safety to our frontiers, and additional
strength and stability to the Union--these are the results which would
rapidly develop themselves upon the consummation of the measure of
annexation. In such event I will not doubt but that Mexico would find her
true interest to consist in meeting the advances of this Government in a
spirit of amity. Nor do I apprehend any serious complaint from any other
quarter; no sufficient ground exists for such complaint. We should
interfere in no respect with the rights of any other nation. There can not
be gathered from the act any design on our part to do so with their
possessions on this continent. We have interposed no impediments in the way
of such acquisitions of territory, large and extensive as many of them are,
as the leading powers of Europe have made from time to time in every part
of the world. We seek no conquest made by war. No intrigue will have been
resorted to or acts of diplomacy essayed to accomplish the annexation of
Texas. Free and independent herself, she asks to be received into our
Union. It is a question for our own decision whether she shall be received
or not.

The two Governments having already agreed through their respective organs
on the terms of annexation, I would recommend their adoption by Congress in
the form of a joint resolution or act to be perfected and made binding on
the two countries when adopted in like manner by the Government of Texas.

In order that the subject may be fully presented in all its bearings, the
correspondence which has taken place in reference to it since the
adjournment of Congress between the United States, Texas, and Mexico is
herewith transmitted.

The amendments proposed by the Senate to the convention concluded between
the United States and Mexico on the 20th of November, 1843, have been
transmitted through our minister for the concurrence of the Mexican
Government, but, although urged thereto, no action has yet been had on the
subject, nor has any answer been given which would authorize a favorable
conclusion in the future.

The decree of September, 1843, in relation to the retail trade, the order
for the expulsion of foreigners, and that of a more recent date in regard
to passports--all which are considered as in violation of the treaty of
amity and commerce between the two countries--have led to a correspondence
of considerable length between the minister for foreign relations and our
representatives at Mexico, but without any satisfactory result. They remain
still unadjusted, and many and serious inconveniences have already resulted
to our citizens in consequence of them.

Questions growing out of the act of disarming a body of Texan troops under
the command of Major Snively by an officer in the service of the United
States, acting under the orders of our Government, and the forcible entry
into the custom-house at Bryarlys Landing, on Red River, by certain
citizens of the United States, and taking away therefrom the goods seized
by the collector of the customs as forfeited under the laws of Texas, have
been adjusted so far as the powers of the Executive extend. The
correspondence between the two Governments in reference to both subjects
will be found amongst the accompanying documents. It contains a full
statement of all the facts and circumstances, with the views taken on both
sides and the principles on which the questions have been adjusted. It
remains for Congress to make the necessary appropriation to carry the
arrangement into effect, which I respectfully recommend.

The greatly improved condition of the Treasury affords a subject for
general congratulation. The paralysis which had fallen on trade and
commerce, and which subjected the Government to the necessity of resorting
to loans and the issue of Treasury notes to a large amount, has passed
away, and after the payment of upward of $7,000,000 on account of the
interest, and in redemption of more than $5,000,000 of the public debt
which falls due on the 1st of January next, and setting apart upward of
$2,000,000 for the payment of outstanding Treasury notes and meeting an
installment of the debts of the corporate cities of the District of
Columbia, an estimated surplus of upward of $7,000,000 over and above the
existing appropriations will remain in the Treasury at the close of the
fiscal year. Should the Treasury notes continue outstanding as heretofore,
that surplus will be considerably augmented. Although all interest has
ceased upon them and the Government has invited their return to the
Treasury, yet they remain outstanding, affording great facilities to
commerce, and establishing the fact that under a well-regulated system of
finance the Government has resources within itself which render it
independent in time of need, not only of private loans, but also of bank
facilities.

The only remaining subject of regret is that the remaining stocks of the
Government do not fall due at an earlier day, since their redemption would
be entirely within its control. As it is, it may be well worthy the
consideration of Congress whether the law establishing the sinking fund
(under the operation of which the debts of the Revolution and last war with
Great Britain were to a great extent extinguished) should not, with proper
modifications, so as to prevent an accumulation of surpluses, and limited
in amount to a specific sum, be reenacted. Such provision, which would
authorize the Government to go into the market for a purchase of its own
stock on fair terms, would serve to maintain its credit at the highest
point and prevent to a great extent those fluctuations in the price of its
securities which might under other circumstances affect its credit. No
apprehension of this sort is at this moment entertained, since the stocks
of the Government, which but two years ago were offered for sale to
capitalists at home and abroad at a depreciation, and could find no
purchasers, are now greatly above par in the hands of the holders; but a
wise and prudent forecast admonishes us to place beyond the reach of
contingency the public credit.

It must also be a matter of unmingled gratification that under the existing
financial system (resting upon the act of 1789 and the resolution of 1816)
the currency of the country has attained a state of perfect soundness; and
the rates of exchange between different parts of the Union, which in 1841
denoted by their enormous amount the great depreciation and, in fact,
worthlessness of the currency in most of the States, are now reduced to
little more than the mere expense of transporting specie from place to
place and the risk incident to the operation. In a new country like that of
the United States, where so many inducements are held out for speculation,
the depositories of the surplus revenue, consisting of banks of any
description, when it reaches any considerable amount, require the closest
vigilance on the part of the Government. All banking institutions, under
whatever denomination they may pass, are governed by an almost exclusive
regard to the interest of the stockholders. That interest consists in the
augmentation of profits in the form of dividends, and a large surplus
revenue intrusted to their custody is but too apt to lead to excessive
loans and to extravagantly large issues of paper. As a necessary
consequence prices are nominally increased and the speculative mania very
soon seizes upon the public mind. A fictitious state of prosperity for a
season exists, and, in the language of the day, money becomes plenty.
Contracts are entered into by individuals resting on this unsubstantial
state of things, but the delusion speedily passes away and the country is
overrun with an indebtedness so weighty as to overwhelm many and to visit
every department of industry with great and ruinous embarrassment. The
greatest vigilance becomes necessary on the part of Government to guard
against this state of things. The depositories must be given distinctly to
understand that the favors of the Government will be altogether withdrawn,
or substantially diminished, if its revenues shall be regarded as additions
to their banking capital or as the foundation of an enlarged circulation.

The Government, through its revenue, has at all times an important part to
perform in connection with the currency, and it greatly depends upon its
vigilance and care whether the country be involved in embarrassments
similar to those which it has had recently to encounter, or, aided by the
action of the Treasury, shall be preserved in a sound and healthy
condition.

The dangers to be guarded against are greatly augmented by too large a
surplus of revenue. When that surplus greatly exceeds in amount what shall
be required by a wise and prudent forecast to meet unforeseen
contingencies, the Legislature itself may come to be seized with a
disposition to indulge in extravagant appropriations to objects many of
which may, and most probably would, be found to conflict with the
Constitution. A fancied expediency is elevated above constitutional
authority, and a reckless and wasteful extravagance but too certainly
follows.

The important power of taxation, which when exercised in its most
restricted form is a burthen on labor and production, is resorted to under
various pretexts for purposes having no affinity to the motives which
dictated its grant, and the extravagance of Government stimulates
individual extravagance until the spirit of a wild and ill-regulated
speculation involves one and all in its unfortunate results. In view of
such fatal consequences, it may be laid down as an axiom rounded in moral
and political truth that no greater taxes should be imposed than are
necessary for an economical administration of the Government, and that
whatever exists beyond should be reduced or modified. This doctrine does in
no way conflict with the exercise of a sound discrimination in the
selection of the articles to be taxed, which a due regard to the public
weal would at all times suggest to the legislative mind. It leaves the
range of selection undefined; and such selection should always be made with
an eye to the great interests of the country. Composed as is the Union of
separate and independent States, a patriotic Legislature will not fail in
consulting the interests of the parts to adopt such course as will be best
calculated to advance the harmony of the whole, and thus insure that
permanency in the policy of the Government without which all efforts to
advance the public prosperity are vain and fruitless.

This great and vitally important task rests with Congress, and the
Executive can do no more than recommend the general principles which should
govern in its execution.

I refer you to the report of the Secretary of War for an exhibition of the
condition of the Army, and recommend to you as well worthy your best
consideration many of the suggestions it contains. The Secretary in no
degree exaggerates the great importance of pressing forward without delay
in the work of erecting and finishing the fortifications to which he
particularly alludes. Much has been done toward placing our cities and
roadsteads in a state of security against the hazards of hostile attack
within the last four years; but considering the new elements which have
been of late years employed in the propelling of ships and the formidable
implements of destruction which have been brought into service, we can not
be too active or vigilant in preparing and perfecting the means of defense.
I refer you also to his report for a full statement of the condition of the
Indian tribes within our jurisdiction. The Executive has abated no effort
in carrying into effect the well-established policy of the Government which
contemplates a removal of all the tribes residing within the limits of the
several States beyond those limits, and it is now enabled to congratulate
the country at the prospect of an early consummation of this object. Many
of the tribes have already made great progress in the arts of civilized
life, and through the operation of the schools established among them,
aided by the efforts of the pious men of various religious denominations
who devote themselves to the task of their improvement, we may fondly hope
that the remains of the formidable tribes which were once masters of this
country will in their transition from the savage state to a condition of
refinement and cultivation add another bright trophy to adorn the labors of
a well-directed philanthropy.

The accompanying report of the Secretary of the Navy will explain to you
the situation of that branch of the service. The present organization of
the Department imparts to its operations great efficiency, but I concur
fully in the propriety of a division of the Bureau of Construction,
Equipment, Increase, and Repairs into two bureaus. The subjects as now
arranged are incongruous, and require to a certain extent information and
qualifications altogether dissimilar.

The operations of the squadron on the coast of Africa have been conducted
with all due attention to the object which led to its origination, and I am
happy to say that the officers and crews have enjoyed the best possible
health under the system adopted by the officer in command. It is believed
that the United States is the only nation which has by its laws subjected
to the punishment of death as pirates those who may be engaged in the slave
trade. A similar enactment on the part of other nations would not fail to
be attended by beneficial results.

In consequence of the difficulties which have existed in the way of
securing titles for the necessary grounds, operations have not yet been
commenced toward the establishment of the navy-yard at Memphis. So soon as
the title is perfected no further delay will be permitted to intervene. It
is well worthy of your consideration whether Congress should not direct the
establishment of a ropewalk in connection with the contemplated navy-yard,
as a measure not only of economy, but as highly useful and necessary. The
only establishment of the sort now connected with the service is located at
Boston, and the advantages of a similar establishment convenient to the
hemp-growing region must be apparent to all.

The report of the Secretary presents other matters to your consideration of
an important character in connection with the service.

In referring you to the accompanying report of the Postmaster-General it
affords me continued cause of gratification to be able to advert to the
fact that the affairs of the Department for the last four years have been
so conducted as from its unaided resources to meet its large expenditures.
On my coming into office a debt of nearly $500,000 existed against the
Department, which Congress discharged by an appropriation from the
Treasury. The Department on the 4th of March next will be found, under the
management of its present efficient head, free of debt or embarrassment,
which could only have been done by the observance and practice of the
greatest vigilance and economy. The laws have contemplated throughout that
the Department should be self-sustained, but it may become necessary, with
the wisest regard to the public interests, to introduce amendments and
alterations in the system.

There is a strong desire manifested in many quarters so to alter the tariff
of letter postage as to reduce the amount of tax at present imposed. Should
such a measure be carried into effect to the full extent desired, it can
not well be doubted but that for the first years of its operation a
diminished revenue would be collected, the supply of which would
necessarily constitute a charge upon the Treasury. Whether such a result
would be desirable it will be for Congress in its wisdom to determine. It
may in general be asserted as true that radical alterations in any system
should rather be brought about gradually than by sudden changes and by
pursuing this prudent policy in the reduction of letter postage the
Department might still sustain itself through the revenue which would
accrue by the increase of letters. The state and condition of the public
Treasury has heretofore been such as to have precluded the recommendation
of any material change. The difficulties upon this head have, however,
ceased, and a larger discretion is now left to the Government.

I can not too strongly urge the policy of authorizing the establishment of
a line of steamships regularly to ply between this country and foreign
ports and upon our own waters for the transportation of the mail. The
example of the British Government is well worthy of imitation in this
respect. The belief is strongly entertained that the emoluments arising
from the transportation of mail matter to foreign countries would operate
of itself as an inducement to cause individual enterprise to undertake that
branch of the task, and the remuneration of the Government would consist in
the addition readily made to our steam navy in case of emergency by the
ships so employed. Should this suggestion meet your approval, the propriety
of placing such ships under the command of experienced officers of the Navy
will not escape your observation. The application of steam to the purposes
of naval warfare cogently recommends an extensive steam marine as important
in estimating the defenses of the country. Fortunately this may be obtained
by us to a great extent without incurring any large amount of expenditure.
Steam vessels to be engaged in the transportation of the mails on our
principal water courses, lakes, and ports of our coast could also be so
constructed as to be efficient as war vessels when needed, and would of
themselves constitute a formidable force in order to repel attacks from
abroad.. We can not be blind to the fact that other nations have already
added large numbers of steamships to their naval armaments and that this
new and powerful agent is destined to revolutionize the condition of the
world. It becomes the United States, therefore, looking to their security,
to adopt a similar policy, and the plan suggested will enable them to do so
at a small comparative cost.

I take the greatest pleasure in bearing testimony to the zeal and untiring
industry which has characterized the conduct of the members of the
Executive Cabinet. Each in his appropriate sphere has rendered me the most
efficient aid in carrying on the Government, and it will not, I trust,
appear out of place for me to bear this public testimony. The cardinal
objects which should ever be held in view by those intrusted with the
administration of public affairs are rigidly, and without favor or
affection, so to interpret the national will expressed in the laws as that
injustice should be done to none, justice to all. This has been the rule
upon which they have acted, and thus it is believed that few cases, if any,
exist wherein our fellow-citizens, who from time to time have been drawn to
the seat of Government for the settlement of their transactions with the
Government, have gone away dissatisfied. Where the testimony has been
perfected and was esteemed satisfactory their claims have been promptly
audited, and this in the absence of all favoritism or partiality. The
Government which is not just to its own people can neither claim their
affection nor the respect of the world. At the same time, the Closest
attention has been paid to those matters which relate more immediately to
the great concerns of the country. Order and efficiency in each branch of
the public service have prevailed, accompanied by a system of the most
rigid responsibility on the part of the receiving and disbursing agents.
The fact, in illustration of the truth of this remark, deserves to be
noticed that the revenues of the Government, amounting in the last four
years to upward of $120,000,000, have been collected and disbursed through
the numerous governmental agents without the loss by default of any amount
worthy of serious commentary.

The appropriations made by Congress for the improvement of the rivers of
the West and of the harbors on the Lakes are in a course of judicious
expenditure under suitable agents, and are destined, it is to be hoped, to
realize all the benefits designed to be accomplished by Congress. I can
not, however, sufficiently impress upon Congress the great importance of
withholding appropriations from improvements which are not ascertained by
previous examination and survey to be necessary for the shelter and
protection of trade from the dangers of stores and tempests. Without this
precaution the expenditures are but too apt to inure to the benefit of
individuals, without reference to the only consideration which can render
them constitutional--the public interests and the general good.

I can not too earnestly urge upon you the interests of this District, over
which by the Constitution Congress has exclusive jurisdiction. It would be
deeply to be regretted should there be at any time ground to complain of
neglect on the part of a community which, detached as it is from the
parental care of the States of Virginia and Maryland, can only expect aid
from Congress as its local legislature. Amongst the subjects which claim
your attention is the prompt organization of an asylum for the insane who
may be found from time to time sojourning within the District. Such course
is also demanded by considerations which apply to branches of the public
service. For the necessities in this behalf I invite your particular
attention to the report of the Secretary of the Navy.

I have thus, gentlemen of the two Houses of Congress, presented you a true
and faithful picture of the condition of public affairs, both foreign and
domestic. The wants of the public service are made known to you, and
matters of no ordinary importance are urged upon your consideration. Shall
I not be permitted to congratulate you on the happy auspices under which
you have assembled and at the important change in the condition of things
which has occurred in the last three years? During that period questions
with foreign powers of vital importance to the peace of our country have
been settled and adjusted. A desolating and wasting war with savage tribes
has been brought to a close. The internal tranquillity of the country,
threatened by agitating questions, has been preserved. The credit of the
Government, which had experienced a temporary embarrassment, has been
thoroughly restored. Its coffers, which for a season were empty, have been
replenished. A currency nearly uniform in its value has taken the place of
one depreciated and almost worthless. Commerce and manufactures, which had
suffered in common with every other interest, have once more revived, and
the whole country exhibits an aspect of prosperity and happiness. Trade and
barter, no longer governed by a wild and speculative mania, rest upon a
solid and substantial footing, and the rapid growth of our cities in every
direction bespeaks most strongly the favorable circumstances by which we
are surrounded. My happiness in the retirement which shortly awaits me is
the ardent hope which I experience that this state of prosperity is neither
deceptive nor destined to be short lived, and that measures which have not
yet received its sanction, but which I can not but regard as closely
connected with the honor, the glory, and still more enlarged prosperity of
the country, are destined at an early day to receive the approval of
Congress. Under these circumstances and with these anticipations I shall
most gladly leave to others more able than myself the noble and pleasing
task of sustaining the public prosperity. I shall carry with me into
retirement the gratifying reflection that as my sole object throughout has
been to advance the public good I may not entirely have failed in
accomplishing it; and this gratification is heightened in no small degree
by the fact that when under a deep and abiding sense of duty I have found
myself constrained to resort to the qualified veto it has neither been
followed by disapproval on the part of the people nor weakened in any
degree their attachment to that great conservative feature of our
Government.