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VOLUME I. TIIE INDEPENDENT. SATURDAY, DECENKER 13,1873. J. C. GALLAHER. Editor and Proprietor. PultlUhcil M’n'hly Ml s‘4 (HI per Annum in AdTsiicr. Klnglr ( opic 3 renU. tm OLD (OAT OF LUA\. BY BLONIHXE. It lira there alore; it in runty an<l faded. With u patch on the elbow, a hoi© in the Hide; But w© think of Mi© brave boy who wore it and over Look on it with pleasure and touch it with pride. A history eiing* to it: over and over. We wh- a proud youth harried off to the fray, With liis form like an oak, aad bin eye like the How gallant li rode intlo ranks of “the Gray!*’ It i* rough, it is worn, it is tattered in places, lint 1 love it the more tor the story it bears: A story of courage iu struggle with sorrows. And a heart that bore bravely its burdens of cares. It is ragged and rusty, but ah! it was shining In the silkiest sheen when he wore it away, A:l his smile was as bright as the glad summer morning, When he sprang to his place iu the ranks of “the Gray. ThereV a rip iu the sleeve, and the collar is tar nished, The buttons all gone with their glitter ami , gold; Tin a thing of the past, and we reverently lay it Away with the treasures and relies of old: As the gifts of a love, solemn, sweet and unspo ken. Are chcrud e l as leaves from a long vanish ed day, We will keep the old jacket for sake of the loved one Who rude in the van in the ranks of ‘•fcbeGray.’* Shot through with a bullet—right here in rhe shoulder, And down there the pocket is splintered and soiled, Ah! more -see, the lining is stained and discol ored! Yes—blood-drops the texture have stiffened and spoiled. It came when he ride at the head of the column, (.'barging down in the battle one deadliest day, When squadrons of foemea were broken asunder. And Victory rod© with the ranks of “the Gray.' Its mom’rvis sweetness and sorrow r >mmingled. To n.e ft is pr clous m o preci.ms thailg 1 ; Iu the rent ami the sm>t-luics a volume is, wm tec, In the stains on the lining is agonv told. That was ten years ago, when, in life's sunny morning, He rode with his comrades down into the fray, And the old coat lie wore, and the good sword he wielded, Were ail that came back from the ranks of “the ! <3ray.” Audit lies there alone; I will reverence it ever, The patch in the elbow, the hoi© >* the side, For a LAiliinfer heart never breathed than the j loved one. Who wore it in honor and soldi©:y pride. Let me brush off the dust from its tatters and tarnish, Let me fold it up clnsolv and lay it away It is all that is left of the Wed and the I<M one Who fought for the Bight iu the ranks of “the , Gray.” VIKSS AC e < >1" PRESIDENT GRANT. o To Ho' St'not'' <m<l House of Represent/dives: The year that has passed since the sub mission of my last message to Congress has, especially during the latter part of it, been an eventful one to the country. In the midst of great national prosperity, a financial crisis has occurred that has brought low fortunes of gigantic propor tions, political partisanship has almost ceased to exist, especially in the agricul tural regions, and finally the capture upon the high seas of a vessel bearing our Hug has, for a time, threatened the most serious consequences, and has agitated tlie public mind from one end of the country to the i>ther. But this happily now is in the course of sii isfus'ory adjustment, lionoi able to both nations concerned. roUEIUN relations. The relations of the United States, how - ever. with most of the other powers, con tinue friendly and cordial. With France, Germany, Russia, Italy, and the minor i European powers, with Brazil anil most! of the South American Republics, and, with Japan, nothing has occurred during the year to demand special notice. The correspondence between the Department of State and the various diplomatic repre sentatives in or from those countries is ■ transmitted herewith. In executing the will of Congress, as expressed in its joint resolution of the 14th of February Dost, and in accordance with the provisions of the resolutions a number of “practical artizans,” of “scientific men,” and of; “honorary Commissioners” were author ized to attend the Exposition at Vienna as Commissioners on the part of the United States. It is believed we have obtained ’ the object which Congress had in view when it passed the joint resolution “in order to enable the people of the United States to participate in the advantages of the International Exposition of the pro ducts of agriculture, manufactures, and the tine arts, to be held at Vienna. ” I take pleasure in adding that the American exhibitors have received a gratifying num ber of diplomas and of medals. During the Exposition a conference was held at Vienna for the purpose of consultation on the systems prevailing in different coun tries for the protection of inventions. I authorized a representative from the Patent Office to be present at Vienna at the time when this conference was to take place, in j order to aid as far as he might in securing any possible additional protection to American inventors in Europe. The re port of this agent will be laid before Con gress. It is my pleasant duty to announce to Congress that the Emperor of China on attaining his majority received the dip eniatic representatives of the Western i powers in person. An account of these; ceremonies, and of the interesting discus sions which preceded them, will be found ! in tin' documents transmitted herewith. The accompanying papers show that some advance, although slight, has been made I during the past year towards the sup pression of the infamous Chinese Coolie trade. I recommend Congress to inquire whether additional legislation be not needed on the subject. THU GENEVA AWAIUL The money Bwardod to the United States by tho tribunal of arbitration at Geneva, was paid by Her Majesty’s Gov ernment a few days iu advance of the time when it would have become payable ac cording to the terms of the treaty. In compliance with the provisions of the act of March 3, 1803, it was at once paid into the Treasury and used to redeem, so far as it might, the public debt of the United States. The amount redeemed was in vested in five per cent, registered bonds of the United States for $15,500,000, which is now held by the Secretary of State, subject to the future disposition of Con gress. I renew my recommendation made at the opening of the last session of Con gress, that a Commission bo created for the purpose of auditing and determining the amount of the several “direct losses growing out of the destruction of the ves sels and their cargoes” by the Alabama, the Florida and the Shenandoah, after leaving Melbourne, for which the sufferers have received no equivalent or compen sation, and of ascertaining the names of the persons thus entitled to receive com pensation for the same, making the com putations upon the basis indicated by the tribunal of arbitration at Geneva, and that payment of such losses be authorised to an extent not to exceed the awards of the tribunal at Geneva. BOUNDARY TUNE!'. By an act approved on the 14th day of February last, Congress made provision for completing jointly with an officer or commissioner to be named by her Brit tnnic Majesty, the determination of so much of the boundary line between the territory of the United States and the possessions of Great Britain as was left uncompleted by the Commissioners ap pointed under the net of Congress of August 11, 1.850. Under the provisions of this act, the northwest water boundary of the United States has been determined a.id marked iu accordance with the award of the Emperor of Germany. A protocol and a copy of the map upon which the line was thus marked are contained in the papers submitted herewith. I also trims mit a copy of the report of the Commis sioner for marking the northern boundary between the United States and the British possessions west of the Lake of the Woods, of the operations of the Commission dur ing the present season. Surveys have been made to a point four hundred and ninety-seven miles west of the Lake of the Woods, leaving about three hundred and fl v miles to be surveyed, the field work of which can be completed during the next season. MIXED COMMISSION. The Mixed Conimis! ion organized un der the provisions of the treaty of Wash ington for settling and determining the claims of citizens of either power against the other arising out of acts committed against their persons or property during the period between April 13, 1861, and April i>, 1865. made its final award on tin 2’t'i day of Reptemlx r last. It was award ed that the Government ,f (lie United States should pay to tl e Government of Her Brittanie Majesty within twelve months from the date of the award, the sum of 81,929,879 in gold. The Commission dis allowed, or dismissed, all other claims of British subject!against the United States. Tlie amount of tho claims presented by the British Government, but disallowed or .dismissed, is understood to be about 89.”,- (kXI,OOO. It also disallowed all the claims of citizens of the United States against Great Britain, which were referred to it. I recommend the early passage of an act appropriating the amount necessary to pay this award against the United States. I have caused to bo communicated to the Government of th King of Italy tlie thanks of this Government for the eminent servi ces rendered by Count Corte ns the third commissioner on this commission, with dignity, learning and impartiality. He dis charge! duties requiring great labor anil 1 constant patience to the satisfaction, I be lieve, of both governments. I recommend j legislation to create a special Court to con sist of three Judges who shall be mpow ered to hear and determine all claims of : aliens i pon the United States arising out of acts committed against their persons nr property during the insurrection. The re cent reference under the treaty of Washing ton was confined to claims of British sub jects arising during the period named in the treaty, but it is understood that there : are other British claims of similar nature arising after the 9th of April, 1865, and it is known that other claims of a like nature are ad van cod by citizens or subjects of other owers. It is desirable to have these; claims examined and disposed of. Official information being received from ■ the Dutch Government of a state of war be tween the Kings of the Netherlands arid the Sultan of Acheen, the officers of the United States who were near the seat of war were instructed to observe an impar- j tial neutrality. It is beleived that they ; have done so. The Joint Commission under the con- , vention with Mexico in 18C8 having again ] been legally prolonged lias resumed its bus uoss. which, it is hoped, may be brought 1 QUITMAN, GA., SATURDAY, DECEMBER 13, 187-T I to an early conclusion. The distinguished representative of Her Brittanie Majesty at Washington has kindly consented, with the i approval of his government, to assume the ; arduous ninl responsible duties of umpire in thiseiunmission, and to lend the weight of his character anil name to such deois j ions as may not receive the acquiescence of l both the arbitrators appointed by tlie res pective governments The t lommissioners i appointed, pursuant to the authority of Congress, to examine into the nature and extent of the forays by trespassers from j that country upon the lands of Texas, have made a report, whir’, ill he submit ted for your consideration. | The Yeuezeula Government has been apprised of tlie sense of Congress in regard ; to the awards of the Joint Commission un der tlie Convention of the 25th of April, j 1866, us expressed in the Act of the 25tli of February last. It- is apprehended that that government does not realize the char acter of its obligations under that Conven tion. As there is reason to believe, how ever, that its hesitancy in recognizing them springs, in part at least, from tlie real difficulty in discharging them, in con nection with its obligation to other gov ernments, the expediency of further for bearance on our part is believed to be worthy of your consideration. The Ottoman Government, and that of Egypt, have lately shown a disposition to relieve foreign consuls of the judicial pow ers which heretofore they have exercised in tho Turkish dominions, by organizing other tribunals. As Congress, however, lias by law provided for the discharge of the judical functions by consuls of the United States in that quarter, under the ' treaty of K'-'f), I have not felt at liberty formally to accept tho proposed change without the assent of Congress, whose de cisions upon the subject at as early a pe riod as may be convenient, is earnestly re quested. I transmit herewith for the con sideration and determination of Congress an application of the Republic of Santo Domingo to t his government to exercise a protectorate over the Republic. Since the adjournment of Congress, the following treaties with foreign powers have proclaimed: A naturalization convention with Deli mark; a convention with Mexico for renewing the Claims Commission; a convention of friendship, commerce and ! extradition with the Orange Free State, nr.il a naturalization convention with J Equndor, I renew the recommendation made by' my message of December, 1870 that Con gress authorize the Postmaster General to ■ issue all commissions to officials appointed through liis department. CITIZENSHIP. I invite the earnest attention of Con gress to the existing laws of the United States, respecting expatriation and tile j election of nationality by individuals. ! Many citizens of the United States reside permanently abroad with families under the provisions of the not approved Feb ruary lfitft, 1855. The children of such j persons are to be deemed arid taken to be citizens of the United States, but the rights i of citizenship are not to di i end to persons whose fathers never resided in the. United States. It thus happens that persons who have never resided within the United Statics have be< n enabled to put forward n pretention to the protection of the United ! States against the claim to military service of the government, under whose protection they were horn and have been reared. In , some eases, even naturalized citizens ot the United States have i anted to the land of their birth with intent in remain there, and their children, the issue of a ! marriage contracted there after their re turn, and who have never been in the Uni- j ed States, have laid claim to our protec- j tion when the lapse of many year-, had imposed upon them the duty of military service to the only government which had ever known them personally. Until the j year 1868 it was left embarrassed by con- j dieting opinions of courts and of jurists to ; determine how far the doctrine of perpet ual allegiance, derived from our former col onial relations with Great Britain was applicable to American citizens. Congress then wisely swept these doubts away by enacting that “any declarations, instruc tion, opinion, order< r decision of any offi cer of this government which denies, restricts, impairs or questions the right of expatriation is inconsistent with the fun damental principles of this government,” but Congress did not indicate in that statute, nor has it since done so, what acts are to be deemed to work expatriation. For my own guidance in determining such questions, T ; quir '. under the provisions of the Constitution, the opinion in writing of the principal officer in each of (he Execu tive Departments upon certain questions re lating to this subject. I’ho result satisfies me that further legislation has become necessary. I therefore commend the sub ject to the careful considera. a of Con gress, and I transmit herewith copies of the several opinions of the principal offi cers of the Executive Departments togeth er with other eorrespondev e nrnl perti nent inform. ..ion on the same subject. The United States, who led the way in the overthrow of the feudal doctrine of perpetual allegiance, are among the last to indicate how then' own citizens may elect another nationality. The papers sub mitted herewith indicate what is necessary to place us on a par with other leading nations in liberality of legislation on this international question. We have already in our treaties assented to the principles 1 which would need to bo embodied in laws , intended to accomplish such results. Wo have agreed that citizens of the United | States may cease to be citizens, and limy i voluntarily render allegiance to other , powers. We have agreed that residence j in a foreign land without intent to return, . shall of itself work expatriation. We have | agreed in some instance! upon the length of time necessary for such continued resi dence to work a presumption of such in tent. 1 invito Congress now to mark out and define when and how expatriation can lio accomplished, to regulate by law the condition of American women marrying foreigners, to fix the status of children born in a foreign country of American parents residing more or less permanently : abroad, and to make rules for determining sileb other kindred points as may seem best to Congress. RELATIONS WITH SPAIN. In compliance with the request of Con gress, I transmitted to the American Min ister at Madrid, with instructions to pre sent it to the. Spanish Government, the joint resolution approved the 2d of March last, tendering the people of Spain in tho name and on tho behalf of the American people, the congratulations of Congress upon the efforts to consolidate in Spain the principles of universal liberty' in a Republican form of government. The ex istence of this new republic was inaugu rated by striking the fetters from the slaves in Porto Rico. This beneficent measure was followed by the release of several thousand persons illegally held as slaves in Cuba. Next, the Captain-Gen eral of that colony was deprived of the power to set, aside tho orders of his su periors at Madrid, which had pertained to the office since 1825. The sequestrated estates of American citizens, which had been the cause of long and fruitless cor respondence, were ordered to he restored to their owners. All these liberal steps were taken in the face of a violent oppo sition, derided by the reactionary slave holders of Havana, who are vainly striving to stay the march of ideas which has ter minated slavery in Christendom, Cuba only excepted. Unhappily, however, this baneful influence lias thus far succeeded in defeating the efforts of all liberal minded men in Spain to abolish slavery in Cuba, and in preventing the 'romised refo n in that island. The . ■ ; 6 le for political supremacy continues there. Tho pm aln very and aristocratic party in Cuba is gradually arraigning itself in more and mu:’ hostility and defiance of tho home government, while it still maintains a po litical connection with the Republic in the Peninsular, and although usurping mid defying the authority of the home govern ment whenever such usurpation or defiance tends iu the direction of oppression or of tlie maintenance of abuses it is still a power in Madrid, and is recognized by the government. Thus an element more thin genius to continued colonial relations between Cuba and Spain than that which inspired the insurrection at Earn- an ele ment opposed to granting any relief from misrule and abuse, with no aspirations after freedom—-commanding no sympathies in generous breasts, aiming to rivet still stronger the shackles of slavery and op pression, has seized many of the emblems of power in Cuba, and under professions of loyalty to the mother country, is ex hausting the resources of the island, and is doing acts which are at variance with those principles of justice, of liberality and of right, which give nobility of char acter to a Republic in the interests of hu manity, of civilization, and of progress. It is to he hoped that this evil influence may be soon averted. the vrnoiNruK affair. The steamer Virginias was, on the 26th day of September, 187(1, duly registered at the port of New York as a part of the com mercial marine of the United States. On the 4th of October, 1870, having received tlie certificate of her register in the usual legal form, she sailed from the port of New York, and has not since been within the territorial jurisdiction of the United States. The 31sfe day of October last, while sailing under the flag of the United States, on the high seas, she was forcibly seized by the Spanish gunboat Tornado, and was carried into the port of Santiago ile Cuba, where many of her passengi rs and crew were inhumanly, and, so far at least as relates to those who were citizens of the United States were, without due process of law, put to death. It is a well established principle asserted by the United States from the beginning of tho National Independence, recognized b) Great Britain and other maritime powers, and stated by the Senate in a resolution passed unanimously on tlie 16th of June, 1858, that “American vessels on the high seas in time of peace, bearing the Ameri can flag remain under tho jurisdiction of tlie country to which they belong, and therefore any visitation, molestation or detention of such vessel by force or by the exhibition of force on the part of a for eign power is in derogation of the sover eignty of tho United States. In accord ance with this principle, the restoration of the Virginias and the surrender of the survivors of her passengers and crew, and a due reparation to the flag and the ; un ishment of the authorities who had been guilty of tho illegal acts of violence, 1 re demanded. The Spanish Government has recognized the justice of the demand, and ha- arranged for the immediate delivery of tlie v ,sel, and for the surrender of the survivors of the passengers and crew and 1 for a salute to tho flag and for proceedings looking to the punishment of those who may be proved to have been guilty of ille gal nets of violence towards citizens of the United States, and also towards indemni fying those who may be shown to be en titled to indemnity. A copy of a protocol of a conference between tho Secretary of State and the Spanish Minister, in which the terms of this arrangement were agreed to, is transmitted herewith. The corres pondence on this subject with tho Lega tion of the United States in Madrid, was conducted in cypher and liy cable, and needs the verification of tho actual text of the correspondence. It. has seemed to mo to be due to the importance of tho ease not to submit this correspondence until the accurate text can be received by mail. It is expected shortly, uml will bo sub mitted when reeeiycd. Iu taking leave of this subject for the present, I wish to renew tho expression of my conviction that the existence of African slavery in Cuba is the principal cause of the lament able condition of the Island. I do not doubt that Congress shares with me the hope that it will soon he made to disap pear, and that peace and prosperity may follow its abolition. The embargoing of American estates in Cuba, cruelty to American citizens detected in no act of hostility to the Spanish Government, the murdering of prisoners taken with arms in their hands, and finally the capture upon the high seas of a vessel sailing un der the United States flag and bearing the United States registry, hits culminated in an outburst of indignation that has seemed for a time to threaten war. Pending ne gotiations between the United States and the Government of Spain on the subject of this capture, I have authorized the Sec retary of tho Navy to put our Navy ou a war footing to the extent at least of the entire annual appropriation for that branch of the service, trusting to Congress and the public opinion of the American people to justify my action. AMENDMENTS TO THE CONSTITUTION. Assuming from the action of the last Congress iu appointing a Committee on “Privileges and Elections” to prepare and report to this Congress a Constitutional amendment to provide a better method of electing the President and Yice Presi dent of the United States, and also from the necessity of such an amendment that those will lie submitted to tho State Legis latures for the ratification of such an im provement in our Constitution, I suggest two others for your consideration: Ist. To authorize the Executive to approve of so much of any measure passing the two Houses of Congress as his judgment may dictate without approving tin; whole. Tho disapproved portion or portions to be sub jected to tlie same rules as now, to-wit: To be referred back to the House in which the measure or moasmes originated, and if passed by a two-thirds vole of the two Houses, tilen to become a law without the approval of the President. I would add to this suggestion that there .should be no legislation by Congress during the last twenty-four hours of its sitting, except upon vetoes, in order to give tlie Execu tive ail opportunity to examine and ap prove or disapprove bills under,standingly. Second, To provide by amendment that when an extra session of Congress is con ven'd by Executive proclamation, legisla tion during the continuance of such session shall be. confined to such subjects as the Executive may bring forth from time to time in writing. The advantages to be gained by these two amendments is obvi ous. One session in each year are provid ed for by the Constitution, in which there are no restrictions as to the subjects of leg islation by Congress. If more are required it is always the power of Congress during their term of office to provide for sessions at any time. The first of these, amend ments would protect the public against the many abuses and waste of public mon cj%, which creep into appropriation hills and other important measures passed dur ing the expiring hours of Congress, to which otherwise duo consideration cannot bo given. TREASURY DEPARTMENT. The receipts of the government from all sources for the last fiscal year were $333,- 738,204, and expenditures on all accounts $200,845,245, thus showing an excess, of receipts over expenditures of 843,302,059. Hut it is not probable that this favorable exhibit will be shown for the present fiscal year. Indeed, it is very doubtful whether, except with great economy on the part of Congress in making appropriations, and the same economy in administering the various Departments of the Government, the revenues will not fall short of meeting actual expenses, including interest on the public debt. 1 commend to Congress such economy, and point out two sources where, it seems to me it might commence, to wit: In the appropriations for public buildings in the many cities where work has not yet been commenced; in the appropriations fm river and harbor improvements in those localities where the improvements arc of but little benefit to general commerce, anil for fortifications. There is a still more fruitful source of expenditure which I will point out later in this message. I re fer to the easy method of manufacturing claims for losses incurred in suppressing the lute rebellion. I would not he understood here ns op posing the erection of good substantial and even ornamental buildings by the govern ment. wherein such buildings are needed. • In fact I approve of the government own | ing its own buildings in all sections of the j country, and hope the day’s not far distant when it will not only possess them but will | erect ill the Capital suitable residences for all persons who now receive commutations for quarters or l ent at govt t ament expense, nml for the Cabinet, thus sotting an ex ample to the States which may induce them to erect buildings for their Senators. But. 1 would have this work conducted at a time when the revenues of tho country j would abundantly justify it. THIS FINANCIAL HITUATION. The revenues have materially fallen off for the first five months of the present fiscal year from what they wore expected to produce, owing to the general panic now prevailing, which commenced about the middle of September. The full effect of this disaster, if it should not prove a blessing in disguise, is yet to bo demon strated. Iu either event it is your duty to heed the lesson and to provide bx wise and well considered legislation, us for as it lies in your power, against its reeurrenoe, and to tuke advantage of all benefits that may have accrued. My own judgment is that however much individuals may have suffered, one long step lias been taken towards specie payments. That we can never have permanent prosperity until a specie basis is reached, and that a specie basis cannot be reached and maintained until our exports, exclusive of gold, pay for our import interest due abroad and other specie obligations, or so nearly so as tn leave an appreciable accumulation of the precious metals in the country from the products of our mines. The develop ment of the mines of precious metals dur ing tlie past year and the prospective de velopment of them for years to come are gratifying in their results. Could hut one-lmlf of the gold extracted from the mines be retained at home, our advance towards specie payments would be rapid. To increase our exports sufficient currency is required to keep all the industries of tho country employed. Without this, national as well as individual bankruptcy must ensue. Undue inflation on tho other hand, while it might give temporary re lief, would only lead to inflation of prices; the impossibility of competing in our own market for the products of home skill and labor, and repeated renewals of present experiences. Elasticity to our circulating medium therefore, and just enough of it to transact the legitimate business of the country and to keep all industries em ployed, i; what is most to be desired. The exact medium is specie, the recognised medium of exchange the world over. That obtained, we shall have a currency of an exact degroe of elasticity. If there be too much of it for the legitimate purposes of trade and commerce it will flow out of the country. If too little the reverse will result. To hold what we have, and to appreciate our currency to that standard is tin! problem deserving of the most serious consideration of Congress. The experience of the present panic has proven that the currency of the country, based ns it is upon the credit of the coun try, is the best that has ever been devised. Usually, in times of such trials, currency has become worthless, or so much de preciated in value as to inflate tlie values of all tho necessaries of life as com pared with the currency. Every ono holding it has been anxious to dispose of it on any terms. Now we witness the reverse. Holders of currency hoard it as they do gold in former experiences of alike nature. It is patent to the most casual observer that much more currency or money is re quired to transact tho legitimate trade of the country during the fall and winter i months, when the vast crops are being ro ; moved, than during tho balance of the j year. With our present system the amount in the country remains the same j throughout the entire year, resulting in ! an accumulation of all the surplus capital |of the country iu a few centres when not employed in the moving of tho criqis, tempted there by the. offer of interest on i call loans. Interest being paid, this sur l plus capital must earn this interest paid with a profit. Being subject to “call” it I cannot be loaned only in part at best to tho merchant or manufacturer for a fixed time. Hence, lio matter how much cur rency there might be in tlie country, it would be absorbed, prices keeping pace j with tho volume aud panics, stringency and disaster would ever be recurring with tho autumn. Elasticity in our monetary system, therefore, is tho object to be at tained first; and next to tlmt, as far as possible, a prevention of the use of other people’s money iu stock and other species of speculation. To prevent the latter it seems to me that uuo great step would be taken by prohibiting the national banks from paying interest oil deposits, by re quiring them to hold their reserves in their owu vaults, and by forcing them into resumption, though it, would bo only in legal tender Votes. For these purposes I would suggest tho establish incut of clearing houses for your consideration. To secure tho former, many plans have been suggested, most, if not all, of which look to mo more like inflation on the ono hand, or compelling the government on the other to pay the interest, without cor- j responding benefits, upon the surplus j funds of the country during the seasons when otherwise unemployed. I submit for your consideration whether this dill! eulty might not be overcome by authoriz ing the Secretary of tl e Treasury to issue nt any one time to National Banks of issue, any amount q[ their own notes NUMBER 32. below a fixed per oeutugo of their issue, say forty per cent, upon the banks de positing with the Treasurer of the United 1 States an amount of government bonds | equal to tlio amount of notes demanded. Nay four per cent, of the interest accruing on the bonds so pledged during the time j they remain with the Treasurer as security for tho increased circulation—the bonds so pledged to be redeemable by the banks at their pleasure, either in whole or in part by returning their own hills for cancella tion to an amount equal to the face of tho bonds withdrawn. I would further sug gest for your consideration the propriety of authorizing National Banks to diminish, their standing issue at pleasure, by re turning for cancellation their own bills and withdrawing so many “U. S.”bondsas ale pledged for the hills returned. In view of the great actual contraction that has taken place in the currency, and the compara tive contraction continuously goiug on due to tho increase of population, increase of manufactories mill nil the industries, I do not believe that there is too much of it now for the dullest period of the year. Indeed, if clearing houses should Vie es tablished, thus forcing redemption, it is a question for your consideration whether banking should not be made free, retaining all the safeguards now required to secure hill holders. In any modification of tho present laws regulating National Banks os a further step towards preparing for the resumption of specie payments, I invito your attention to a consideration of tlio propriety of exacting from them the reten tion as a part of their reserve, either tho whole or a part of the gold interest ac cruing upon tlio bonds pledged ns security for their issue. I have not reflected enough on tlie bearing this might have iu producing a scarcity of coin with which to pay duties on imports to give it my posi tive recommendation, hut your attention ia invited to the subject. During the last four years tlio currency lias been con tracted directly by the withdrawal of tlio present certificates, compound interest notes anil 7-30 bonds, outstanding on tho 4th of March, 1869, all of which took tho ulnce of legal tenders in the hank reserves to the extent of sixty-three millions of dollars. During the same peri oil there has been a much larger comparative eon traction of the currency. The population of the country lias largely increased. Move than 25,000 miles of railroad liavo been built, requiring the active use of capital to operate them. Millions of acres !of land have been opened to cultivation I requiring capital to move the products. : Manufactories have multiplied beyond all precedent in the same period of time, re quiring capital weekly for tho payment of wages and for the purchase of material, and probably the largest of all compara tive contraction arises from the organiza tion of free labor in tho South. Now every laborer thero receives liis wages, and for want of savings banks, the greater part of Bueli wages is carried in the pocket ;or hoarded until required for use. These suggestions aro thrown out for your con sideration without any recommendation that they shall bo adopted literally, but | hoping the best method may be arrived at to secure such an elasticity of the currency as will keep employed all the industries of the country, and prevent snch an inflation as will put off indefinitely the resumption of specie payments, an object so devoutly to be wished for by all, and by none rnoro earnestly than tlio class of people most directly interested—those who earn their bread by the sweat of their brow. Tho decisions of Congress on this subject will j have the hearty support of the Executive. AMERICAN SHIP-BUILDING. 11l previous messages I have called al- I tentiou to tho decline iu American ship building, and reccommend such legislation ;as would securo to us our proportion of the carrying trade. Stimulated by high rates and abundance of freight, tlio progress for the last year in ship-building has been very satisfactory. There has been 'an increase of about three per cent, in the* amount transported in American vessels Over tho amount of last year. With tlio reduced cost of material which has taken place, it may reasonably la; hoped that this progress w ill be maintained and evi n increased. However, as w e pay about 880,- 000,000 per annum to foreign vessels for tho transportation of our surplus products to a market, thus increasing tho balance of trade against us to this amount, the sub ; ject is one worthy of your serious consid | elation. CHEAP TRANSPORTATION ; is a subject that has attracted tho at tention of both producers and consumers for the past five years, and has contribu ted to, if it lias not been tho direct cause of tlio recent panic and stringency. As Congress at its last session appointed a special committee to investigate this whole subject during the vacation and report at this session, I have nothing to recommend until their report is read. Thero is ono work, however, of a national character in which the greater portion of tlie East and the West, tho North and tho South are equally interested, to which I will invito your attention. Tlie State of New York has a canal connecting Lake Erie with tide water on the Hudson river. Tlio State of Illinois lias a similar work connecting Lake Michigan with navigation water in tlio Illinois river, thus muking \ ater communication inland, between tlio East and the West and South. These : great artificial water courses are the pTo [Ginfinui'/t on the i/li / ojt'-\