To the Senate and House of Representatives:

When we assemble together, fellow citizens, to consider the state of our
beloved country, our just attentions are first drawn to those pleasing
circumstances which mark the goodness of that Being from whose favor they
flow and the large measure of thankfulness we owe for His bounty. Another
year has come around, and finds us still blessed with peace and friendship
abroad; law, order, and religion at home; good affection and harmony with
our Indian neighbors; our burthens lightened, yet our income sufficient for
the public wants, and the produce of the year great beyond example. These,
fellow citizens, are the circumstances under which we meet, and we remark
with special satisfaction those which under the smiles of Providence result
from the skill, industry, and order of our citizens, managing their own
affairs in their own way and for their own use, unembarrassed by too much
regulation, unoppressed by fiscal exactions.

On the restoration of peace in Europe that portion of the general carrying
trade which had fallen to our share during the war was abridged by the
returning competition of the belligerent powers. This was to be expected,
and was just. But in addition we find in some parts of Europe monopolizing
discriminations, which in the form of duties tend effectually to prohibit
the carrying thither our own produce in our own vessels. From existing
amities and a spirit of justice it is hoped that friendly discussion will
produce a fair and adequate reciprocity. But should false calculations of
interest defeat our hope, it rests with the Legislature to decide whether
they will meet inequalities abroad with countervailing inequalities at
home, or provide for the evil in any other way.

It is with satisfaction I lay before you an act of the British Parliament
anticipating this subject so far as to authorize a mutual abolition of the
duties and countervailing duties permitted under the treaty of 1794. It
shows on their part a spirit of justice and friendly accommodation which it
is our duty and our interest to cultivate with all nations. Whether this
would produce a due equality in the navigation between the two countries is
a subject for your consideration.

Another circumstance which claims attention as directly affecting the very
source of our navigation is the defect or the evasion of the law providing
for the return of sea men, and particularly of those belonging to vessels
sold abroad. Numbers of them, discharged in foreign ports, have been thrown
on the hands of our consuls, who, to rescue them from the dangers into
which their distresses might plunge them and save them to their country,
have found it necessary in some cases to return them at the public charge.

The cession of the Spanish Province of Louisiana to France, which took
place in the course of the late war, will, if carried into effect, make a
change in the aspect of our foreign relations which will doubtless have
just weight in any deliberations of the Legislature connected with that
subject.

There was reason not long since to apprehend that the warfare in which we
were engaged with Tripoli might be taken up by some other of the Barbary
Powers. A reenforcement, therefore, was immediately ordered to the vessels
already there. Subsequent information, however, has removed these
apprehensions for the present. To secure our commerce in that sea with the
smallest force competent, we have supposed it best to watch strictly the
harbor of Tripoli. Still, however, the shallowness of their coast and the
want of smaller vessels on our part has permitted some cruisers to escape
unobserved, and to one of these an American vessel unfortunately fell prey.
The captain, one American sea man, and two others of color remain prisoners
with them unless exchanged under an agreement formerly made with the
Bashaw, to whom, on the faith of that, some of his captive subjects had
been restored.

The convention with the State of Georgia has been ratified by their
legislature, and a repurchase from the Creeks has been consequently made of
a part of the Talasscee country. In this purchase has been also
comprehended a part of the lands within the fork of Oconee and Oakmulgee
rivers. The particulars of the contract will be laid before Congress so
soon as they shall be in a state for communication.

In order to remove every ground of difference possible with our Indian
neighbors, I have proceeded in the work of settling with them and marking
the boundaries between us. That with the Choctaw Nation is fixed in one
part and will be through the whole within a short time. The country to
which their title had been extinguished before the Revolution is sufficient
to receive a very respectable population, which Congress will probably see
the expediency of encouraging so soon as the limits shall be declared. We
are to view this position as an outpost of the United States, surrounded by
strong neighbors and distant from its support; and how far that monopoly
which prevents population should here be guarded against and actual
habitation made a condition of the continuance of title will be for your
consideration. A prompt settlement, too, of all existing rights and claims
within this territory presents itself as a preliminary operation.

In that part of the Indiana Territory which includes Vincennes the lines
settled with the neighboring tribes fix the extinction of their title at a
breadth of 24 leagues from east to west and about the same length parallel
with and including the Wabash. They have also ceded a tract of 4 miles
square, including the salt springs near the mouth of that river.

In the Department of Finance it is with pleasure I inform you, that the
receipts of external duties for the last 12 months have exceeded those of
any former year, and that the ration of increase has been also greater than
usual. This has enabled us to answer all the regular exigencies of
Government, to pay from the Treasury within one year upward of $8 millions,
principal and interest, of the public debt, exclusive of upward of $1
million paid by the sale of bank stock, and making in the whole a
reduction of nearly $5.5 millions of principal, and to have now in the
Treasury $4.5 millions which are in a course of application to the
further discharge of debt and current demands. Experience, too, so far,
authorizes us to believe, if no extraordinary event supervenes, and the
expenses which will be actually incurred shall not be greater than were
contemplated by Congress at their last session, that we shall not be
disappointed in the expectations then formed. But nevertheless, as the
effect of peace on the amount of duties is not yet fully ascertained, it
is the more necessary to practice every useful economy and to incur no
expense which may be avoided without prejudice.

The collection of the internal taxes having been completed in some of the
States, the officers employed in it are of course out of commission. In
others they will be so shortly. But in a few, where the arrangements for
the direct tax had been retarded, it will be some time before the system is
closed. It has not yet been thought necessary to employ the agent
authorized by an act of the last session for transacting business in Europe
relative to debts and loans. Nor have we used the power confided by the
same act of prolonging the foreign debt by reloans, and of redeeming
instead thereof an equal sum of the domestic debt. Should, however, the
difficulties of remittance on so large a scale render it necessary at any
time, the power shall be executed and the money thus employed abroad shall,
in conformity with that law, be faithfully applied here in an equivalent
extinction of domestic debt.

When effects so salutary result from the plans you have already sanctioned;
when merely by avoiding false objects of expense we are able, without a
direct tax, without internal taxes, and without borrowing to make large and
effectual payments toward the discharge of our public debt and the
emancipation of our posterity from that mortal canker, it is an
encouragement, fellow citizens, of the highest order to proceed as we have
begun in substituting economy for taxation, and in pursuing what is useful
for a nation placed as we are, rather than what is practiced by others
under different circumstances. And when so ever we are destined to meet
events which shall call forth all the energies of our country-men, we have
the firmest reliance on those energies and the comfort of leaving for calls
like these the extraordinary resources of loans and internal taxes. In the
mean time, by payments of the principal of our debt, we are liberating
annually portions of the external taxes and forming from them a growing
fund still further to lessen the necessity of recurring to extraordinary
resources.

The usual account of receipts and expenditures for the last year, with an
estimate of the expenses of the ensuing one, will be laid before you by the
Secretary of the Treasury.

No change being deemed necessary in our military establishment, an estimate
of its expenses for the ensuing year on its present footing, as also of the
sums to be employed in fortifications and other objects within that
department, has been prepared by the Secretary of War, and will make a part
of the general estimates which will be presented you.

Considering that our regular troops are employed for local purposes, and
that the militia is our general reliance for great and sudden emergencies,
you will doubtless think this institution worthy of a review, and give it
those improvements of which you find it susceptible.

Estimates for the Naval Department, prepared by the Secretary of the Navy,
for another year will in like manner be communicated with the general
estimates. A small force in the Mediterranean will still be necessary to
restrain the Tripoline cruisers, and the uncertain tenure of peace with
some other of the Barbary Powers may eventually require that force to be
augmented. The necessity of procuring some smaller vessels for that service
will raise the estimate, but the difference in their maintenance will soon
make it a measure of economy.

Presuming it will be deemed expedient to expend annually a convenient sum
toward providing the naval defense which our situation may require, I can
not but recommend that the first appropriations for that purpose may go to
the saving what we already possess. No cares, no attentions, can preserve
vessels from rapid decay which lie in water and exposed to the sun. These
decays require great and constant repairs, and will consume, if continued,
a great portion of the moneys destined to naval purposes. To avoid this
waste of our resources it is proposed to add to our navy-yard here a dock
within which our present vessels may be laid up dry and under cover from
the sun. Under these circumstances experience proves that works of wood
will remain scarcely at all affected by time. The great abundance of
running water which this situation possesses, at heights far above the
level of the tide, if employed as is practiced for lock navigation,
furnishes the means for raising and laying up our vessels on a dry and
sheltered bed. And should the measure be found useful here, similar
depositories for laying up as well as for building and repairing vessels
may hereafter be undertaken at other navy-yards offering the same means.
The plans and estimates of the work, prepared by a person of skill and
experience, will be presented to you without delay, and from this it will
be seen that scarcely more than has been the cost of one vessel is necessary
to save the whole, and that the annual sum to be employed toward its
completion may be adapted to the views of the Legislature as to naval
expenditure. To cultivate peace and maintain commerce and navigation in all
their lawful enterprises; to foster our fisheries as nurseries of
navigation and for the nurture of man, and protect the manufactures adapted
to our circumstances; to preserve the faith of the nation by an exact
discharge of its debts and contracts, expend the public money with the same
care and economy we would practice with our own, and impose on our citizens
no unnecessary burthens; to keep in all things within the pale of our
constitutional powers, and cherish the federal union as the only rock of
safety--these, fellow citizens, are the land-marks by which we are to
guide ourselves in all proceedings. By continuing to make these the rule of
our action we shall endear to our country-men the true principles of their
Constitution and promote an union of sentiment and of action equally
auspicious to their happiness and safety. On my part, you may count on a
cordial concurrence in every measure for the public good and on all the
information I possess which may enable you to discharge to advantage the
high functions with which you are invested by your country.

TH. JEFFERSON