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The Mexicans having thus shown themselvesM to be A\holl\ incapable ot appreciating our forbearance and liberality, it was deemed proper to change the manner of conducting the war, b} making them leel its pressure according to the usages obsen ed under similar circumstan ces by all other civilized nations. Accordingly, as early as the twenty-second nf September, 184:5, instructions wore given by the Secretary of War to Maj. Gen. Taylor to “draw supplies” for our army “from 'the enemy, without paying for them, and to re quire contributions for its support,” if in that way he was satisfied ho could “get abundant supplies for his forces.” In directing the ex ecution of these instructions, much was ne cessarily left to the discretion of the com manding officer, who was best acquainted with the circumstances with which he was surround ed, the wants of the army, and the practicability of enforcing the measure. Gen. Taylor, on the twenty-sixth of Octo ber, 1846, replied, from Monterey, that “it would have been impossible hitherto, and is bo now. to sustain the army to any extent by forced contributions of money or supplies.”— For the reasons assigned by him, he did not adopt the policy of his instructions, but de clared his readiness to do so, “should the ar my, in its future operations, reach a portion of the country which may be made to supply the troops with advantage.” He continued to pay for the articles of supply which were ! drawn from the enemy’s country. Similar instructions were issued to Major General Scott on the third of April, 1847, who replied from Jalapa, on the twentieth of May, 1847, that, if it be expected that “the army is to support itself by forced contributions le vied upon the country, we may ruin and ex asperate the inhabitants, and starve ourselves.” The same discretion was .given to him that had been to Gen. Taylor in this respect. General | Scott for the reasons assigned by him, also con tinued to pay for the articles of supply for the army which were drawn from the enemv. After the army had reached the heart'of the most wealthy portion of Mexico, it was sup posed that the obstacles which had before that time prevented it would not be such as to ren der impracticable the levy of forced contribu tions for its support; and on the first of Sep tember, and again on the sixth of October, 1847, the order was repeated in despatches ad dressed by the Secretary of War to General Scott, and his attention was again called to the importance of making the enemy bear the burdens of the war by requiring them to fur nish. the means of supporting our army; and he was directed to adopt this policy, unless, by doing so, there was danger of depriving the army of the necessary supplies. Copies of these despatches were forwarded to General Taylor for his government. On the thirty-first of March last, I caused an order to be issued to our military and na val commanders to levy and collect a military contribution upon all vessels and merchandise which might enter any of the ports of Mexi co in our military occupation, and to apply such contributions towards defraying the ex’- j enses of the war. By virtue of the right of conquest and the laws of Avar, the conqueror, consulting his otvn safety or convenience, may either exclude foreign commerce altogether from all such ports, or permit it upon such terms and con lition* as he may prescribe.— Before the principal ports of Mexico were blockaded by our navy, the revenue derived from impost duties, under the laAvs of Mex ico, Avas paid into the Mexican treasury- After those ports had fallen, into our military pos session, the blockade was raised, and com merce Avith them permitted upon prescribed terms and conditions. They were open to the trade of all nations upon the payment of du ties more moderate in their amount than those Avhich had been previously levied by Mexico; -and the revenue, Avhich was formerly paid into the Mexican treasury, was directed to be col lected by our military and naval officers, and applied to the use of our army and navy. — Care Avas taken that the officers, soldiers, and sailors of our army and navy should be ex empted from the operations of the order; and ns the merchandise imported upon Avhich the order operated must be consumed by Mexican citizens, the contributions exacted Avere, in effect, the seizure of the public revenues of Mexico, and the application of them to our j own use. In directing this measure, the ob ject Avas to compel the enemy to contribute, as far as practicable, tOAvards the expenses of the Avar. For the amount of contributions which have been levied in this form, I refer you to the ac companying reports of the Secretary of War and of the Secretary of the NaA r y, by Avhich it appears that a sum exceeding half a mil lion of dollars has been collected. This amount Avould undoubtedly have been much larger but for the difficulty of keeping open communications betAvcen the coast and j the interior, so as to enable the OAvners of the merchandize imported, to transport and vend it to the Inhabitants of the country. It is con fidently expected that this difficulty w ill, to a | great extent, be soon remoA r ed by our increas- i ed farces Avhich have been sent to the field. Measures have recently been adopted by which the internal as well as the external rev enues of Mexico, in all places in our military occupation, Avill be seized and appropriated to the use of our army and navy. The policy of levying upon the enemy con tributions in every form, consistently Avith the laAA r s of nations, which it may be practicable for our military commanders to adopt, should, in my judgment, be rigidly enforced, and orders to this effect have accordingly been given. By such a policy, at the same time that our own treasury Avill be relieved from a heavy drain, the Mexican people Avill be made to feel the burdens of the war, and consulting their own interests, may he induced the more readily to require their rulers to accede to a just peace. After the adjournment of the last session of Congress, events transpired in the prosecution of the Avar, which, in my judgment, required a greater number of troops in the field than had l»een anticipated. The strength of the army was accordingly increased by “accepting” the sexwiccs of all tlxe volunteer forces authorized by the act of the 13th of May, 1846, without putting a eonstruction on that act, the cor i cctness of which Avas seriously questioned. The volunteer forces now in the field, Avith those which had been “accepted,” to “serA'e for twelve months,” and Avere discharged at the end of their term of service, exhausts the fifty thousand men authorized by that act. Had it been clear that a proper construction of the act Avarranted it, the services of an addi tional number Avould have been called for and accepted ; but doubts existing upon this point, the poAver Avas not exercised. It is deemed important that Congress should, at an early period of their session, confer the authority to raise an additional regular force to serve during tho war w ith Mexico, and to be discharged upon the conclusion and ratifica tion of a treaty of peace. I invite the atten tion of Congress to the view's presented by the Secretary of War in his report upon this sub ject. I recommend, also, that authority be given by laAv to call for and accept the services of an additional number of volunteers, to be ex ercised at such time and to such extent as the emergencies of the service may require. In prosecuting the war with Mexico, whilst the utmost care has been taken to avoid every just cause of complaint on the part of neutral nations, and none has been giv'en, liberal pri vileges have been granted to their commerce in the ports of the enemy in our military oc cupation. I Ihe difficulty with the British government, which at one rime threatened to inturrupt the friendly relations between the two countries, will, I trust, be speedily adjusted. I have re ceived information that an envoy extraordina ry and minister plenipotentiary to the United States will shortly be appointed bv her Im perial Majesty; and it is hoped that he will 1 come instructed and prepared to adjust all remaining difference between tho two govern | meats in a manner acceptable and honorable jto botb. In the meantime, I have every rea son to believ’e that nothing will occur to inter rupt our amicable relations with Brazil. It has been my const ant effort to maintain and ! cultivate the most intimate relations offreind i ship with all the independent Powers of South America; and this policy has been attended with the happiest result. It is true, that the ] settlement and payment of many just claims of ; American citizens against these nations have ; been long delayed. The peculiar position in which they haA r e been placed, and the desire ©n the part of my predecessors, as well as my i self, to grant them the utmost indn I gence, have hirherto prevented these claims from be ing urged in a manner demanded by strict justice. The time has arrived when they ought to be finally adjusted and and efforts are now making for that purpose. It is proper to inform you that the govern ment of Peru has in good faith paid the first j two instalments of the indemnity of thirty thousand dollars each, and the greater portion of the interests due thereon, in execution of the convention between that government and the United States, the ratifications of which were exchanged at lima on the thirty-first of October, 1846. The Attorney General of the United States, early in August last, completed the adjudication of the claims under this con vention, and made his report thereon, in pur suance of the act of the eighth of August, 1843. The sums to wdiich the claimants are respectively entitled will be paid at the ti#-*sury. I invdte the early attention of Congress to the present condition of our citizens in China. Under our treaty with that power, American citizens arc withdrawn from the jurisdiction, whether civil or ciminal,of the Chinese gov rern meut and placed under that of our public func tionaries in that country. By these alone can our citizens be tried and punished for the commission of any crime ; by these alone caxx questions be decided between them, involving the rights of person and property; and by these alone can contracts be enforced, into which they may ha\ r e entered with the citizens or subjects of foreign powers. The merchant vessels of the Uxxitcd States lying in the waters of the five ports of China open to foreign com merce are under the exclusive jurisdiction of officers of their own government. Until Con gress shall establish e unpetenttribunals to try and punish crimes, and to exercise jurisdic tion in civil cases in China, American citizens there are subject to no law Avhatever. Crimes may be committed Avith impunity, and debts may be contracted without any means to en force their payment. Inconveniences have al ready resulted from the omission of Congress to legislate upon the subject, and still greater are apprehended. The British authorities in China have already complained that this gov ernment has not provided for the punish ment of crimes, or the enforcement of contracts against American citizens in that country, Avhilst their government has established tri bunals by Avhich an American citizen can re coAor debts due from British subjects. Accustomed as the Chinese are to sumraxrv justice, they could jxot comprehend why criminals who are citizens of the United States should escape Avith impunity, in violation of treaty oblig xtious, Avhilst the punishments of a Chinese, aa'lxo had committed any crime against an American citizen, would be rigor ously exacted. Indeed, the conscquanccs might ba fatal to American citizens in China, should a flagrant crime he committed by any one of them upoxr a Chinese, and should trial and punishment not follow according to the requisitions of the treaty. This might disturb, if not distroy, our friendly relations with that empire, and cause an interruption of our vauluable commerce. Our treaties Avith the Sublime Porte, Tri poli, Tunis, Morocco, and Muscat, also require the legislation of Corgress to carry them into 4 execution, though the necessity for immediate action may not be so urgent as in regard to China. The Secretary of State has submitted an es timate to defray the expense of opening dip lomatic relations Avith the Papal States." The interesting political events now in progress in these States, as Avell as a just regard to our commercial interests, in my opinion, rendered such a measure highly expedient. Estimates haA r e also been submitted for the outfits and salaries of charg xs d’affaires to the republic of Bolivia, Guatemala, and E n. idor. . The manifest importance of cultivating the most friendly relations Avith all the indepen dent States upon this continent ha« induced me to recommend appropriations necessary for the maintenance of these missions. I recommend to Congress that an appropria i tion be made to be paid to the Spanish gov ’ ernment for the purpose of distribution among the claimants in “the Amistad case.” I en tertain the conA'iction that this is due to Spain under the treaty of the of October, I 1795; and, moreover, that, from the ernest j manner in Avhich the claim continues to be urged, so long as it shall remain unsettled, it • will be a source of irritation and discord be i tween the two countries, which may prove highly prejudicial to the interest of tlxe Uni ted States. Good policy, no less than a faith ful compliance Avith our treaty obligations, requires that the inconsiderable appropriation demanded should be made. A detailed statement of the condition of the finances Avill bo presented in the annual re port of the Secretary of the Treasury. The i imports for tho last fiscal year, ending on the 30th of June, 1847, were of the value of one hundred and forty-six million five hundred . and forty-five thousand six hundred and thir ty-eight dollars ; of Avhich the amount ex ported A\'as eight million eleven thousand one liandrod and fifty-eight dollars, leaving one hundred and thirty-eight million five hundred and thirty four thousand four hundred and eighty dollars in the country for domestic use. The value of the exports for the same period was one hundred and fifty-eight million six hundred and forty-eight thousand six hun dred and twenty-two dollars ; of which one bundled and fifty million six hundred and thirty-seven thousand four hundred and sixty | four dollars consisted of domestic productions, and eight million eleven thousand one hun dred and fifty-eight dollars of foreign articles. The receipts into the treasury for the same period amounted to twenty-six million three hundred and forty-six thousand seven hun dred and ninety dollars and thirty seven cents, of Avhich there Avas derived from customs tAventy-three million seven hundred and forty seven thousand eight hundred and sixty-four dollars and sixty-six cents ; from sales of pub lic lands, tAvo million four hundred and nine ty-eight thousand three hundred and thirty five dollars and twenty cents; and from inci -1 dental and miscellaneous sources, one hundred I thousand ffve hundred and seventy dollars and fifty one-ceuts. The last fiscal year during which this amount Avas received embraced five j months under the operation of the tariff act of 1842, and seA r en months during which the ta riff act of 1846 was in force. During the five months under the act of 1842, the amount je ceiA’ed from customs was seven million eight hundred and forty-two thousand three hun dred and six dollars and ninety cents, and .during the seven months under the act of 1843 the amount received was fifteen million nine hundred and live thousand live hundred and fifty-seven dollars and seventy-six cents. The nett revenue from customs during- the rear e%ding on the first of December, 13 16. 1e n? the last year under the operation ol the tariff act of 1842 was twenty-two million nine hundred and seventy one thousand four hundred and three dollars and ten cents; and the nett revenue from customs du ring the year ending on first of December, 1847, being the first year under the operation of the tariff act of IS4G, was about thirty-one million five hundred thousand dollars; being an increase of revenue for the first year under the tariff act of 184 3, ol more than eight millions five hundred thousand dollars over that of the last year under the taritf of 1842. The expenditures during the fiscal year ending on the thirtieth of June last, were fifty-nine mih lions four hundred and fifty-one thousand one hun dred and seventy-seven do] irs and sixty-live cents: of which three million five hundred and twenty two thousand and eighty-two dollar* and thirtv seven cents was on account of payment of princi pal and interest of the public debt, including trea sury notes redeemed and not funded. The expen diture*, exclusive of payment of public debt, were fifty-five millions nine hundred and twenty-nine thousand and ninety-five dollars and twenty-eight cents. It is estimated that the receipts into the treasu ry for the fiscal year ending on the thirtieth of June, 1818. including the balance in the treasury oa the first of July last, will amount to about for ty-two million ei_ht hundred and eighty six thou sand five hundred and forty-five dollars and cightv eent*,o wi.i ;h thirty-one million,it is estimate d.wfill be derived from customs; three million five hundred thousand from thp sale of public lauds; four hun dred thousand from incidental sources, including sales made by the Solicitor of the Treasury; and six million two hundred and eighty-five thousand t .vo hi nlred and ninety-so ir dollars and fifty-five cents from loans already authorize*; by law, which, together w ith ihe balance in the treasury on the first of July last, make the sum estimated.* The expenditures for the same period, if peace with Mexico shall not be concluded, and the army shall be increased as is proposed, will amount, including the necessary payments on account ot principal and interest of the public debt and treasury notes, to fifty-eight million six hundred and sixty dollars and seven cents. On the first of the present month, the amount of the public debt actually incurred, including treasu ry notes, was forty-five million six hundred and fifty-nine thousand six hundred and fifty-nine dol lars and forty cents. The public debt due on the fourth ol March, 1845. including treasury notes, w T as seventeen million seven hundred and eighty eight thousand seven hundred and ninety-nine dol lars and sixty-two cents; and consequently the ad dition made to the public debt since that time is twenty-seven thousand eight hundred and fifty nine dollars and seventy-eight cents. Os the loon oj twenty-three millions, authorized by the act of the twenty-eighth of January, 1847, the sum of live millions was paid out to the’ public Creditors, or exchanged at par for specie ; the re maining eighteen millions was offered for specie to the highest bidder not below par, by an advertise ment issued by the Secretary of the Treasury .and published from the ninth of February until tenth of April, 1347, when it was awarded to the several highest bidders, at premiums varying- one eighth of one per cent, to two per cent, above par. The premium has since been paid into the trea sury, and the sums awarded deposited in specie in the treasury as fast as it was required by the wants of the government. To meet the expenditures for the remainder of the present and for the next fiscal vear, ending on the thirtieth of June, 1849, a further loan, in aid ol the ordinary revenues of the government, will be necessary. Retaining a sufficient surplus in the treasury, the loan required tor the remainder of the present fiscal year will he about eighteen mil lion five hundred thousand dollars. If the duty op tea and coflee be imposed, and the graduation of the price of the public lands shall be made at an early period of your session, as recommended, the loan for the present fiscal year may be reduced to seventeen millions of dollars. The loan may he further reduced by whatever amount of expendi tures can be saved by military contributions col lected in Mexico. The most vigorous measures for the augmentation of these contributions have been directed, and a very considerable sum is ex pected trom that source. Its amount cannot, how ever, be calculated with any certainty. It is re commended that the loan to’be made be authoriz ed upon the same terms, and for the same time, as that which was authorized under the provisions of the act of the twenty-eighth of January, 1847. Should the war with Mexico be continued until the thirtieth of June, 1849, it is estimated that a further loan of twenty million live hundred thou sand dollars will be required for the fiscal year ending on th t day, in case no duty be imposed on tea and coffee, and the public lands be not reduced and graduated in price, and no military contribu tions shall be collected in Mexico. If the duty on tea and coffee be imposed* a id the lands be redu ced and graduated in price, as proposed, the loan may be reduced to seventeen millions of dollars, and will be subject to be still further reduced by the amount of the military contributions which may be collected in Mexico. It is not proposed, however, at present, to a-k Congress for authori ty to negotiate this loan for the next fiscal year, as it is hoped that the loan asked for the remainder f the present fiscal ye ir, aided by military contri butions which may be collected in Mexico, may be sufficient. If, contrary to my expectation, there should be a nece sity for it, the fact will be communicated to Congress in time for their action durin' r the present session. In no event will a sum exceeding six mi ions of dollars of this amount be nc»d#d before the meeting of the session of Congress in December, 1848. The act of the thirtieth of July, 18'’5,“reducing the diitif-s on imports, 77 has been in force since the first ot December last; and I am gratified to state, that all the beneficial effects which were antici pated from its operation have been fully realized, i he public revenue derived from customs during the year ending on the first December. 1847, ex"- ceeds by more tban eight millions of dollars the amount received in the preceding year under the operation of the act of 1842, which was superseded and repealed by it. Its effects are visible iu the great and almost unexampled prosperity which prevails in every branch of business. Whiie the repeal of the prohibitory and restrictive duties of the act of 1842, and the substitution in their place of reasonable revenue rates levied on articles imported according to their actual value, has increased the revenue and augmented our for eign trade, all the great interests of the country have been advanced and promoted. The great and important interests of agricul ture, which had been not only too much neglected, but actually taxed under the protective policy for the benefit of other interests, have been re lieved of the burdens which that policy imposed oa them; and our farmers and planters, under a more just and liberal comraercia. policy, are find ing new and profitable markets abroad for their augmented products. v-ur commerce is rapidly increasing, and is ex tending more widely the circle of international ex changes. Great as has been the increase of our imports during the past year, our exports of domes tic products sold in foreign markets have been still greater. Our navigating interest is eminently prosperous. The number of vessels built in the United States has been greater than durin any preceding period of equal length. Large pro As have been derived by those who have constructed as well as by (hose who have navigated them. Should the ratio of in crease in the number of our merchant vessels be progressive, and be as great for the future as dur ing the past year, the time is not distant when our tonnage and commercial marine will ho larger than that ol any other nation in the world. W hilstthe interests of agriculture, of commerce, and of navigation have been enlarged and invigora ted, it is highly gratifying to observe that our roan ulacturse* are also in a prosperous condition. None of fibe rm.ious effects upon this interest, which were apprehended by some, as the result of the operation of the revenue system established by the act of 18-4 G, have been experienced. On the con trary, the number of manulaciories. and the amount ot capital invested by them, is steadily and ra pidly increasing, affording gratifying proofs that America.' enterprise and skill employed iu this branch of domestic industry, with no other advan tages than those fairly anil incidentally accruing from a just system of revenue duties, are abundant ly able to meet successfully all competition from abroad, and still derive fair and remunerating profits. While capital invested in manufactures is yield ing adequate and fair profits under the new sys tem, the wages of labor, whether employed in manufactures, agriculture, commerce, or naviga tion, have been augmented. The toihng millions, whose daily labor furnishes the supply ol food and raiment, and all the accessaries and comforts of i • life, are receiving higher wages, and .more steady [ and permanent employment than in any other i country, or at any previous period of our own his ‘ tory. So successful have been all branches of our in dustry, that a foreign war, which generally dimin ; ' ishes the resources of a nation, has in no essential I ; degree retarded our onward progress, or checked our general prosperity. With sucli gratifying evidences of prosperity, and of the successful operation of the revenue act of 1846, every consideration of public policy re commends that it shall remain unchanged. It is - hoped that the system of impost duties which it established may be regarded as the permanent policy of the country, and that the great interests affected by it may not again be subject to be inju riously disturbed, as they have heretofore been, bv frequent and sometimes sudden changes. For the purpose of increasing the revenue, and 1 without chinging or modifying the rates imposed j by the act of 184 G on the dutiable articles cm- | braced by its provisions, I again recommend to your favorable consideration the expediency of levying a revenue duty on tea and coffee. The policy which exempted these articles from duty daring peace, and when the revenue to be derived from them was not needed, ceases to exist when the country is engaged in Avar, and requires the use of all its available resources. It is a lax which would be so generally diffused among the people, that it Avouid be felt oppressively by none, and be complained of by none. It is believed lhat there are not, in the list of imported art clcs, any which are more properly the subject of Avar duties than tea and coffee. It is estimated that three millions of dollars would be derived annually by a moderate duty im posed on these articles. Should Congress avail itself of this additional source ot revenue, not only would the amount of the public loan rendered necessary by the war with Mexico be diminished to that extent, but the public credit, and the public confidence in the ability and determination of the Government to meet all its engagements promptly, would be more firmly established, and the reduced amount of the loan which it may be necessary to negotiate, could probably be obtained at cheaper rates. Congress is, therefore, called upon to determine whether it is Aviser to impose the war duties re commended. or, I y omitting to do so, increase the public debt annually three millions of dollars so long as loans shall be required to prosecute the Avar, and afterwards provide, in some other form, to pay the semi-annual interest upon it, and i Iti mately to extinguish the principal. If, in addition to these duties, Congress should graduate and re duce the price of such of the public lands as ex perience has proi'ed will not command the price placed upon them by the government, an additional annual income to the treasury of betAveen half a million and a million of dollars, it is estimated, Avouid be derived from this source. Should both measures receive the sanction of Congress, the annaui amount of public debt necessary to be con tracted during the continuance of the Avar, would be reduced near four millions of dollars. The du ties recommended to be levied on tea and coffee, it is proposed, shall be limited in their duration to the end of the-war, and until the public debt ren dered necessary to be contracted by it shall be discharged The amount of the public debt to he contracted, should be limited to the lowest practi cable sum. and should be extinguished as earlv after the conclusion of ihe war as the means oj the treasury will permit. With this view, it is recommended that, as soon as the war shall be over, all the surplus in the treasury, not needed for other indispensable objects, shall constitute a sinking fund, and be applied to the purchase of the funded debt, and that authori ty be conferred by law for that purpose. The act of the sixth of August, 18 5, “to estab lish a warehousing system, 77 has been in operation more than a year, and has proved to be an impor tant auxiliary to the tariff act of 1846, in augment ing the revenue, and extending the commerce of the country. Whilst it has tended to enlarge com merce, it has been beneficial to our manulactures, by diminishing forced sales at auction of foreign goods at loav prices, to raise the duties to be ad vanced on them, and by checking fluctuations in the market. The system, although sanctioned by the experience of other countries, v/as entirely new in the United States, and is susceptible ot im provement in some of its provisions. The St-cre i tary of the 'Treasury, upon Avhora was devolved large discretionary powers in carrying this mea sure into effect, has collected, and is now colla ting, the practical results of the system in other countries, where it has long been established, and Avill report at an early period of your session, such further regulations suggested by the investigation as may render it still more effective and benefi cial. By the act to “provide for the better organiza tion of the Treasury, and for the collection, safe keeping, and disbursement of the Public Revenue, 77 all banks were discontinued as fiscal agents of the Government, and the paper currency issued by them Avas no longer permitted to be received in payment of public dues. The Constitutional Treasury created by this act went into operation on the first of January last. — Under the system established by it, the public moneys have been collected, safely kept, and dis bursed by Ihe-dtrect agency of officers of the gov ernment in gold and silver, and transfers of large amounts have been made from points of collection to points of disbursement, without loss to the Treasury, or injury or inconvenience to the trade of the country. While the fiscal operations of the Government have been conducted with regularity and ease, un der this system, it has hau a salutary effect in checking and preventing an undue inflation of the paper currency issued 6a* the Banks which exist under State charters. Requiring, as jt does, all dues to the Government to be paid in gold and sil- A r er, its efl’ect is to restrain excessive issues of Bank paper by the Banks disproportioned to the specie in thier v'aults, for the reason that they are at all times liable to be called on by the holders of their notes for their redemption, in order to obtain specie for the payment of duties and other- public dues. The banks, therefore, must keep their bu siness within prudent limits, and be always in a condition to meet Such calls, or run the hazard of being compelled to suspend specie payments, and be thereby discredited. The amount of specie imported into the United States during the fast fis cal year was twenty-four million one Hundred and twenty-one thousand two hundred and eighty-nine dollars; of which there Avas retained in the country twenty-two million two hundred and seventy-six thousand one hundred and seventy dollars. Had the former financial system prevailed, and ihe pub lic moneys been placed in deposite in banks., nearly the whole of this amount would bare go ne into their vaults, not to be thrown into circulation by them, but to be w ithheld from the hands of the people as a currency, and made the basis of new and enormous issues of bank paper. A large pro portion of the specie imported has been paid into the Treasury for public dues; and after having been, to a great extent, recoined at the Mint, has been paid out to the public creditors, and gone in to circulation as a currency among the people.— The amount of gold and silver coin now in circu lation in the country is larger than at any former period. The financial system esfablished by the consti tutional treasury has been, thus far, eminently suc cessful in its operations; and I recommend an ad herence to all its essential provisions; and especi ally to that vital provision Avhich wholly separates the government from all connexion Avith banks, and excludes bank paper from ah revenue receipts. In some of its details, not involving its general principles, the system is defective, and will re quire modification. These defects, and such a mendments as are deemed important, were sot forth in the last annual report of the Secretary of the Treasury. These amendments are again re commended to the early ?md favorable co side ra tion .of Congress, During the past year, the coinage at the rsint and its branches has exceeded twenty millions of dollars. This has consisted chiefly in concerting the coins of loreign countries into American coin. The largest amount of foreign oofn imported has been received at New York; and if a branch, mint Avere established at that city, all the foreign coin received at that port could at once be converted into our OAvn coin, without the expense, risk, and delay of transporting it to the mint for that pur | pose, and the amount recoined would be pinch . larger. ♦ Experience has proved that foreign coin, and especially foreign gold coin, will not circulate ex i tensively as a currency among the people. The im.- ; portant measure .of extending our specie circu lation, both of gold and silver, and of .diffu sing it among the people, can only be effected by con verting such foreign coin into American coin. I i repeat the comm end at ion contained in my last an • nual message for the establishment of a branch of , the mint ot the United States at the city of New I York. f All the public lands which hare been surveyed ■nin-tui. .am es iur.i-ii-I'. mi iu** and w'ere ready for the market, have been pro claimed for sale during the past year. The quan tity offered and to be offered for sale, under pioc lamations issued since the first of January last, a mounts to nine million one hundred and thirty one acres. The prosperity of the western States and territories in w hich these jands lie will be ad vanced by their speedy sale. By withholding them from a market, their growth and increase ol population would be retarded, while thousands of our enterprising and meritorious frontier popula tion would he deprived of the opportunity of se curing freeholds for themselves ar.d their families. But in addition to the general considerations which rendered the early sale of these lands proper, it was a loading object at this time to derive as large a sum as possible from this source, and thus dimin ish, by that amount, the public loan rendered ne cessurj by the existence of a foreign Avar. It is estimated that not less than ten millions of , acres of the public lands will be surveyed and be ! in a condition to be proclaimed for sale during the year 18-48. In ray last annual message. I presented the rea sons which, in my judgment, rendered it proper to graduate and reduce the price of such of the pub lic lands as have remained unsold for long periods after they had been offered for sale at public auc tion. Many millions of acres of public lands lying within the limits of several Wes ern State s, have been offered in the market, and been subject to sale at private entry for more than twenty tears, and large quantities for more than thirty years, as t le lowest price prescribed by ihe existing lua t and it has been found that they will not command that price. They must remain unsold and unculti vated for an indefinite period, unless the price de manded for them by the government shall be re duced. No satisfactory reason is perceived why they should be longer held at rates above their real value. At the present period, an additional reason exists for adopting the measure recommend ed. When the country is engaged in a foreign war, and we must necessarily resort to loans, it Avouid seem to be the dictate of wisdom that we should avail ourselves of all our resources, and thus limit the amount of the public indebtedness to the lowest possible sum. 1 recommend that the existing laws on Ihe sub ject of pre-emption rights be amended and modified so as to operate prospectively, and to embrace all who may settle upon the public lands and make improvements upon them before they are surveyed, as Avell as afterwards, in ail cases where such set tlements may be made after the Indian title shall have been extinguished. If the right of pre-emption be thus extended, it will embrace a large and meritorious class of our citizens. It will increase the number of small freeholders upon our borders, w ho w ill be enabled thereby .to educate their children, and otherw a * improve their condition, while they will be found at all times, as they have ever proved themselves to be in the hour of danger to their country, among our hardiest and best volunteer soldiers, ever ready to tender their services in cases of emergency, and among the last to leave the field as long as an ene my remains to be encountered. Such a policy will also impress these patriotic pioneer emigrants with deeper feelings of gratitude tor the parental care of their government, when they find their dearest interest secured to them by the permanent Jaws of the land, and that they are no longer in danger of losing their hofnes and hard-earned iniproremen.s, by being brought into competition with a more wealthy class of purchasers at the land sales. The attention pf Congress Avas invited, at their last and the preceding session, to the importance of establishing a Territorial government over our possessions in Oregon ; and it is to be regretted, that there was no legislation oa the subject. Our citizens who inhabit lhat distant region of country, are still left Avithout the protection of onr laws, or any regularly organized government. Before the question of limits and boundaries of the territory of Oregon Avas definitely settled, from the necessi ty of their condition, the inhabitants had establish ed a temporary government of their own. Besides the want of legal authority for continuing such a government, it is wholly inadequate to protect them in their rights of person and property, or to secure to them the,enjoyment of the privileges of other citizens, to which they are entitled under the Constitution of the United States. They should have the right of suffrage, be represented in a Territorial Legislature, and by a delegate in Con gress ; and pose s all the rights and eriviicges Avhich citizens oj other portions of the i errilories of the Unit cl. States have heretofore enjoyed, or may noAv enjoy. Oarjudici I system, revenue Laws, l uavs regu lating trade and intercourse with the Indian tribes, and the protection of our law s generally, should Le extended over them,. In addition to the inhabitants in that territory Avho had previously emigrated to it.largt numbers of gut citizens have followed .' hem during the pres ent year ; and it is not doubted that during the next and subsequent years, their numbers will be great ly increased. Congress, at its last session, established post routes leading to Oregon, and betAveen different points within that territory, and authorized the es tablishment of post offices at “Astoria and such other places on the coasts of the i'acilic, within the territory of the United States, as the public in terests may require. 77 Post offices have accord ingly been established, dejmiy postmasters appoint ed, and provision made for the transportation of the mabs. The preservation of peace w T itb the Indian tribes residing Attest of the Rocky Mountains, will render it proper that authority should be given by law for the appointment of an adequate number of Indian agents to reside among them. 1 recommend that a surveyor general’s office he established in that territory, and that the public lands be surveyed and brought into market at an early period. I recommend also, that grants, upon liberal tei ms, of limited quantities of the public lands, be made to citizens of the United States w r ho have emi grated, or may re after within a prescribed pe riod emigrate, to Oregon, and settle upon them.— These hardy and adventurous citizens, who have encountered the dangers and privations of a 1 >ng and toilsome journey, and have at length found a;i abiding-place for themselves and their families upon the utmost verge of om western limits, should be secured in the homes which they have improved by their labor. I refer you to the accompanying report of the Secretary of War for a detailed account of the operations of the va rious branches of the public service connected with the department under his charge. The duties devolving on this department have been unusual y oncrons and re sponsible dur ng the past year, and have been discharg ed with ability and success. Pacific relations continue to exist with the various In dian tribes, and most of them manifest a strong friendship for the U. States. Home depredations w’ere committed during the past year upon our trains transporting sup plies for the army, on the road between the western bor ders of Missouri and canta Fe. These depredations, which are supposed to have been committed by b inds from the region of New Mexico, have been arrested bv the presence of a military force, ordered oi.t for that purpose. Some outrages have been perpetrated by a por tion of the northwestern bands upon the weaker and comparatively defenceless neighboring tribe-*. Prompt measures were taken to prevent such ooc.ux;cnces in fu ture. lletAA'ecn one and two thousand Indians, belonging to several tribes, have been removed during the year from the east of the Mississippi to the country allotted to them west of lhat river, as their permanent borne, and arrangements have been made for others to follow. Since the treaty of 1845 with the Cherokee*, the feud* among them appear to have subsided, and they have be come more united and contented than they have been for many years past, ’l'ffe commissioners, appointed in pursuance of the act of J«j*e 27th, 1846, to settle claims arising under the tieaty of ’3O with that tribe, have executed their duties; and after a patient investi gation, and a full and /air examination of all the cases brought before them, closed their labors fn the jopon/h of July last. This is the fourth board of fououlssiiaiers which has been organized under this treaty. Ample op portunity has been afforded to all those interested to bring forward their claims. No doubt is entertained that impartial justice lias been done by the late board, and that ail .valid claims embraced by the treaty have been considered and allow ed- This result, and the final settlement to be made with this tribe, under the treaty of 1846, which will l»e completed and laid before you du ring your session, will adjust questions of controversy between them and the Cubed States, and produce a state of relations with .hem simple, well defined, *nd satisfactory. Under the discretionary authority conferred by the act of the third of March last, the annuities due to the va rious tribes have been paid during the present year to Tire heads of families instead of to the cheifs, or such persons as they might designate, as required by the laws previously existing. This mode of payment has given general satisfaction to the great body of the Indians,— Justice has been dope to them, and they are grateful to the government for it. A few chiefs and interested per sons may object to this mode of payment, but it is be lieved te be the only mode of preventing fraud and im posff iou from , lacing practised upon the great body of common Indians, constituting a majority of all' the tribes. It is gratifying to perceive that a number of the tribes have recently manifested an increased interest in the es tablishment of schools among thorn, and are making ra pid advances in agriculture—some of them producing a sufficient quantity of food for their support, and in some case* a surplus to dispose of to their neighbors. The - ■ jm—»>«3MPW!yw v > ■ j comforts by which those wife have received even a very . * limited education, and have engaged in agriculture are i surrounded, r< a I gradually to draw off their less civilized brethren from Die precarious means « f subsistence by the chase, to habits of’ labor and civilizeticn. The accompanying report of the Secretary of the Na ! vy presents a satisfactory and gratifying account of the condition ami operations of the naval service* during the - past year. Our commerce has been pursued with in i’ | creased activity, and with safety and success, in every ,- j quarter of the globe under the protection of our dag, which the navy has caused to he respected in the most distant seas. In the gulf of Mexico, and in the Pacific, the officers and men of our squadrons have displayed di.-Mo.uishcd gallantry and performed valuable services. In the early stages of the war with Mexico, her ports on both coasts were blockaded, and more recently many of them have boon raptured and held by the navy when acting in co operation with the land forces, the naval officers and men have performed gallant and distinguished services on land as well as on water, and deserve Hie high com mendation of the country. V' hde other maritime powers arc adding to their na vies 1 irge numbers of war steamers, it was a wise poli cy on our part to make sim lar additions to our navy,— The four war steamers authorized by the act of the t>d March, 1847, are in course of construction. * In a idition to the four war steam ei 8 authorised bvthia act, the Secretary of the Navy has, in pursuance of its > provisions, entered into contracts for the construction of five steamers,to be employed in the transportation of the United States Mail “from New Fork to Now Orleans, touching at Charleston, Savannah, and Havana, and from Havana to Chagres; for three steamers to be em ployed in like manner from Panama to Oregon, “so as > to connect with the mail from Havana to Chagres across • the isthmus;” and ti,r five steamers to be ip ; likejraanner from New Vork to Liverpool, These steam ers will be the property of the constructors, but are to I o I built “under the superintendence am] direction of ans val constructor in the employ of the Navy Department, and to be so constructed us to render them convertible a: the least possible expense into war steamers of the first class.” A prescribed number of naval officers, as well as a • ffice agen s are to lie on board of them; and an nuity is reserved to tie Nav y Department at all times to ‘'exercise control over said steam-hips,”nnd “to have the right” “to take them for the oxc! isive tise and sor vue of the United “upon making proper com pensation to the cojiji u f rs tlierefor,” Whilst these steam-ships will he employed in trans i porting the mails of the I nited States coastwise, and to foreign countries, upon a annual compensation to bo (laid to the owners, they will be always ready, upon an emergency requiring it, to be converted into war steam ers ; and tire right rose!’ • d to take them for public use, will add greatly to the tfficiency and strength of this description of our naval force. To the steamers thus : author zed under contracts made by the Secretary of the , Navy, she uid be added five other strainer authorized under contract-made in pursuance of law by the post master General, making an addition, in the wjmje, of eighteen war steamers, subject to be taken for pu’ulic use. As further contracts for the transportation of the mail to foreign countries may be authorized by Congress, this number may l.c enlarged indefinitely. The enlightened policy by which a rapid rommiufcn tion with the various distant parts of the globe is estab lished, by means *. f American built sea steamers, would I find amample reward in the increase of our commerce, and in making nar country and its resources more favor ably known abroad ; but the national advantage is still greater, of having our naval officers made familiar with steam navigation ; and of having the privilege of taking the ships already equipped for immediate service at a moment’s notice, and will ba cheaply purchased by the compensation to be paid for the transportation of tho mail in them, over and bove the postages received. A just national pride, n i less than our commercial in terests, would seem to -favor the policy of augmenting the number of this description of vessels. They can be hu It in our country cheaper and in greater numbers than in any ot her in the world. I rtferyou to the accompanying report of the Postmas ter General f..r a detailed and satisfactory account of the - condition and operations of that department during the past year. It is grat fy ng to find that, wit hin so sin i t a period alter the reduction in the rates of postage, ami m.tw tbstanding the great increase of mail service, if« revenue r< ce.ved for the ye ir will be sufficient to defre * idl the expenses, and that no further aid will bo required from the treasury for that purpose. The fii>t ofthe American mail steamers authorized by the act ofthe third of March, le4. r >, was completed and e itertd upon the service on tiie first of June last, and is now on her third voyage to Diemen and other interme diate ports. The other vessels authorized under the provisions of that act are in course of construction, and ; will be put upon the Due as soon ns completed. Con tracts have also beeen made for the transportation of tho mail in a steamer from Ch tries ton to H .van a. A reciprocal and satisfactory postal arrangement has been made by the Postmaster General with the author - ties ofilremen, and no difficulty is apprehended in mak ing similar arrangements with all other Powers with which we may have communications by mail steamers, except with Great Britain, On the arrival of the first of the American steamers, b ;und to Bremen, at Sot than pt m, in the month of I June last, the British post officemrecled the collection of I discriminate g po tages on all letters and ether mailable matter, whicu .-ue took out to Great Britain, or which went into the British Post office on their way to France and other part, of Europe. The effect of the order ofthe British post office is to subject all let ters and other mat ter transported by American steamers to double postage, one posture hav ng been previously paid on them to tho United States, while letters transported in British steam ers are subject to.pay but a single postage. This mca? sure was adopted with the avowed object of protecting the British lino of mad steamers now running between Bo ton and Liverpool, and, if permitted to continue, must speeddy put an end to the transportation of all let ters and other matter by American steamers, and give to British steamers a monopoly <-fthe business, A just and fair reciprocity is all that we desire, and on this wp must insist. By oiu laws, no such discrimination is made against British steamers bringing letters into our ports, but all letters arriving in the United Sta'es are subject to the.same rate of postage, whether brought in British or American vessels. I refer you to the report ofthe Postmaster General for a full statement of tho f .ets of the rase, and of the steps taken by him to cof fset this inequality. lie has exerted all the power con ferred upon him by the existing laws. The Minister ot the United States at London lias brought the subject to the at tention of the British govern ment, and is now engaged in negotiations for the pur pose id*adjusting reciprocal postail arrangements, which shall be equally just to both countries. Should he fail in concluding such arrangements, and should Great Britain insist on enforcing the unequal and unjust measure sfio has adopted, it will become necessary to confer addition al powers on the Postmaster General, in order to enable him to meet the emergency, and to put our own steam ers on an equal foot ng with British steamers engaged in transporting tiie mail between the two countries; and I recommend that such powers be conferred. In view of the existing state of our country, I trust it may not be inappropriate, in closing this communica tion, to call to mind the words of wisdom and admoni tion of rtie first and most illustrious of my predecessors, in his farewell address to his countrymen. That greatest and best of men, who served his coun try’so long, and loved it so much, foresaw, with “seri ous concern,” the danger to our Union “of characteriz ing parties by geographical discriminations-— Northern and Southci'ii , Atlantic and Western —whence designing men may endeavor to excite a belief that there is a real d.fference of local interests and views,” and warned hip country men against it. So deep and solemn was his conviction of tiw import tance of the Union and of preserving harmony between its different parts, that he declared tohis coufitrvmen in that address, “it is of infinite moment that you should properly estimate the immense value of your national Union to your colle live and individual happiness ; th*u youj-houldcfu r.sh a cordial, habitual and immoveable attachment to it; accustoming yourselves to think and to speak of it as a palladium of your political safety and prosperity; watching for its preservation with jealous anxiety ; discountenancing whatever may suggest even a suspicion that it can In any event be abandoned ; and indignantly frowning upon the first dawning of every attempt to alienate any portion of our country’ from the rest, or to .enfeeble the sacred ties w hich now link to - gether the various parts.” i Aft r the lapse of half a century, these admonitions of Washington fall upon us with ail the force of truth. It j if difficult to est m ite the “immense value” of our gib : rious Union of confederated States, to. which we are so | much indebted for our growth in population a id wed h, j and f>r all that constitutes us a great and a happy nation. ; How unimportant arc all oar differences of opinion upon minor questions of public policy, compared with its preservation ; and how scrupulously should we avoid ail agitating topics which may tend to distract and divide us into contending parties, separated hy r geographical lines, whereby it may be weakened or endangered. Invoking the blessing of the Almighty Euler of the Universe upon your deiiberations, it will be my highest duty, no less than my sincere pleasure, to co-operato with you in all measures which may tend to promote tho honor and enduring welfare of cur common country. JANIES K. POLK. IVashi.xotox, December. 1847. DTF Advertisements edad'ed, will be attended to in Our next. AUGUSTA THEATRE,. XV. C. FORBES, Lessee and Manager. LAST MGHTOF TTIE SEASON. j FA TURD AY E VENL\G. DEC. 11.1547. W ill be performed the Comedy of A ROL4ND FOR AN OLIVER. Allred Highflyer, ... Mr. Crisp. Maria Darlington, ... Mrs. Forbes. FAS SEEL, by Miss AMILIE. To conclude with the Drama of the texan Ranger. Donna Maria, .... Miss Clara Ellis. fTT’Hnx Tickets 75 cents—Fit 50 cents. dOecll UNDER-SHIRTS AND DRAWERS OF MERINO, COTTON, SILK, >nd ail other kind?, cheap, at ' Oet.-1 7 IV.M O. PRICE &CO S.