a close. The United States have an immediate interest in seeing an end put to the state of hostilities existing between Mexico and Texas. They are our neighbors, of the same continent, with whom we are not only desirous of cultivating the relations of amity, but of the most extended commercial intercourse, and to practise all the rights of a neighborhood hospitality. Our own interests are deeply involved in the matter, since, however neutral may be our course of policy, we cannot hope to escape the effects of a spirit of jealousy on the part of both of the Powers. Nor can this Government be indifferent to the fact that a warfare, such as is waged between those two nations, is calculated to weaken both Powers, and finally to render them, and especially the weaker of the two, the subjects of interference on the part of stronger and more powerful nations, which, intent only on advancing their own peculiar views, may sooner or later attempt to bring about a compliance with terms, as the condition of their interposition, alike derogatory to the nation granting them, and detrimental to the interests of the United States. We could not be expected quietly to permit any such interference to our disadvantage. Considering that Texas is separated from the United States by a mere geographical line, that her territory, in the opinion of many, down to a late period, formed a portion of the territory of the United States, that it is homogeneous in its population and pursuits with the adjoining States, makes contributions to the commerce of the world in the same articles with them, and that most of her inhabitants have been citizens of the United States, speak the same language, and live under similar political institutions with ourselves, this Government is bound, by every consideration of interest as well as of sympathy, to see that she shall be left free to act, especially in regard to her domestic affairs, unawed by force, and unrestrained by the policy or views of other countries. In full view of all these considerations, the Executive has not hesitated to express to the Government of Mexico how deeply it deprecated a continuance of the war, and how anxiously it desired to witness its termination. I cannot but think that it becomes the United States, as the oldest of the American republics, to hold a language to Mexico upon this subject of an unambiguous character. It is time that this war had ceased. There must be a limit to all wars; and if the parent State, after an eight years' struggle, has failed to reduce to submission a portion of its subjects standing out in revolt against it, and who have not only proclaimed themselves to be independent, but have been recognised as such by other Powers, she ought not to expect that other nations will quietly look on, to their obvious injury, upon a protraction of hostilities. These United States threw off their colonial dependence, and established independent Governments; and Great Britain, after having wasted her energies in the attempt to subdue them for a less period than Mexico has attempted to subjugate Texas, had the wisdom and justice to acknowledge their independence, thereby recognising the obligation which rested on her as one of the family of nations. An example thus set by one of the proudest as well as most powerful nations of the earth, it could in no way disparage Mexico to imitate. While, therefore, the Executive would deplore any collision with Mexico, or any disturbance of the friendly relations which exist between the two countries, it cannot permit that Government to control its policy, whatever it may be, towards Texas; but will treat her as by the recog nition of her independence the United States have long since declared they would do, as entirely independent of Mexico. The high obligations of

public duty may enforce from the constituted authorities of the United States a policy which the course persevered in by Mexico will have mainly contributed to produce; and the Executive, in such a contingency, will with confidence throw itself upon the patriotism of the people to sustain the Government in its course of action.

Measures of an unusual character have recently been adopted by the Mexican Government, calculated in no small degree to affect the trade of other nations with Mexico, and to operate injuriously to the United States. All foreigners, by a decree of the 23d day of September, and after six months from the day of its promulgation, are forbidden to carry on the business of selling by retail any goods within the confines of Mexico. Against this decree our minister has not failed to remonstrate.

The trade heretofore carried on by our citizens with Santa Fe, in which much capital was already invested, and which was becoming of daily increasing importance, has suddenly been arrested by a decree of virtual prohibition on the part of the Mexican Government. Whatever may be the right of Mexico to prohibit any particular course of trade to the citizens or subjects of foreign Powers, this late procedure, to say the least of it, wears a harsh and unfriendly aspect.

The instalments on the claims recently settled by the convention with Mexico have been punctually paid as they have fallen due, and our minister is engaged in urging the establishment of a new commission, in pursuance of the convention for the settlement of unadjusted claims.

With the other American States our relations of amity and good will have remained uninterrupted. Our minister near the Republic of New Grenada has succeeded in effecting an adjustment of the claim upon that Government for the schooner "By Chance," which had been pending for many years. The claim for the brig "Morris," which had its origin during the existence of the Republic of Colombia, and indemnification for which, since the dissolution of that Republic, has devolved on its several members, will be urged with renewed zeal.

I have much pleasure in saying that the Government of Brazil has adjusted the claim upon that Government in the case of the schooner "John S. Bryan," and that sanguine hopes are entertained that the same spirit of justice will influence its councils in arriving at an early decision upon the remaining claims; thereby removing all cause of dissension between two Powers whose interests are to some extent interwoven with each other.

Our minister at Chili has succeeded in inducing a recognition by that Government of the adjustment effected by his predecessor of the first claims in the case of the "Macedonian." The first instalment has been received

by the claimants in the United States.

Notice of the exchange of ratifications of the treaty with Peru, which will take place at Lima, has not yet reached this country, but is shortly expected to be received, when the claims upon that Republic will doubtless be liquidated and paid.

In consequence of a misunderstanding between this Government and that of Buenos Ayres, occurring several years ago, this Government has remained unrepresented at that Court, while a minister from it has been constantly resident here. The causes of irritation have, in a great measure, passed away; and it is in contemplation, in view of important interests which have grown up in that country, at some early period during the

present session of Congress, with the concurrence of the Senate, to restore diplomatic relations between the two countries.

Under the provisions of an act of Congress of the last session, a minister was despatched from the United States to China, in August of the present year, who, from the latest accounts we have from him, was at Suez, in Egypt, on the 25th of September last, on his route to China.

In regard to the Indian tribes residing within our jurisdictional limits, the greatest vigilance of the Government has been exerted to preserve them at peace among themselves, and to inspire them with feelings of confidence in the justice of this Government, and to cultivate friendship with the border inhabitants. This has happily succeeded, to a great extent; but it is a subject of regret that they suffer themselves, in some instances, to be imposed upon by artful and designing men-and this, notwithstanding all the efforts of the Government to prevent it.

The receipts into the Treasury for the calendar year 1843, exclusive of loans, were little more than eighteen millions of dollars; and the expenditures, exclusive of payments on the public debt, will have been about twenty-three millions of dollars. By the act of 1842, a new arrangement of the fiscal year was made, so that it should commence on the 1st day of July in each year. The accounts and estimates for the current fiscal year will show that the loans and Treasury notes made and issued before the close of the last Congress, to meet the anticipated deficiency, have not been entirely adequate. Although, on the 1st of October last, there was a balance in the Treasury, in consequence of the provision thus made, of three millions nine hundred and fourteen thousand and eighty-two dollars and seventy-seven cents, yet the appropriations already made by Congress will absorb that balance, and leave a probable deficiency of two millions of dollars at the close of the present fiscal year. There are outstanding Treas ury notes to about the amount of four millions six hundred thousand dollars; and, should they be returned upon the Treasury during the fiscal year, they will require provision for their redemption. I do not, however, regard this as probable, since they have obviously entered into the currency of the country, and will continue to form a portion of it, if the system now adopted be continued. The loan of 1841, amounting to five millions six hundred and seventy-two thousand nine hundred and seventy-six dollars and eighty-eight cents, falls due on the 1st of January, 1845, and must be provided for or postponed by a new loan. And, unless the resources of revenue should be materially increased by you, there will be a probable deficiency for the service of the fiscal year ending June 30, 1845, of upwards of four millions of dollars.

The delusion incident to an enormously excessive paper circulation, which gave a fictitious value to every thing, and stimulated adventure and speculation to an extravagant extent, has been happily succeeded by the substitution of the precious metals and paper promptly redeemable in specie, and thus false values have disappeared, and a sounder condition of things has been introduced. This transition, although intimately connected with the prosperity of the country, has nevertheless been attended with much embarrassinent to the Government, in its financial concerns. So long as the foreign importers could receive payment for their cargoes in a currency of greatly less value than that in Europe, but fully available here in the purchase of our agricultural productions, their profits being im measurably augmented by the operation, the shipments were large and

the revenues of the Government became superabundant. But the change in the character of the circulation from a nominal and apparently real value, in the first stages of its existence, to an obviously depreciated value in its second, so that it no longer answered the purposes of exchange or barter, and its ultimate substitution by a sound metallic and paper circulation combined, has been attended by diminished importations, and a consequeut falling off in the revenue. This has induced Congress, from 1837, to resort to the expedient of issuing Treasury notes, and finally of funding them, in order to supply deficiencies. I cannot, however, withhold the remark that it is in no way compatible with the dignity of the Government that a public debt should be created in time of peace to meet the current expenses of the Government, or that temporary expedients should be resorted to an hour longer than it is possible to avoid them. The Executive can do no more than apply the means which Congress places in its hands for the support of Government; and, happily for the good of the country and for the preservation of its liberties, it possesses no power to levy exactions on the people, or to force from them contributions to the public revenue in any form. It can only recommend such measures as may, in its opinion, be called for by the wants of the public service, to Congress, with whom alone rests the power to " lay and collect taxes, duties, imposts, and excises." This duty has upon several occasions heretofore been performed. The present condition of things gives a flattering promise that trade and commerce are rapidly reviving, and, fortunately for the country, the sources of revenue have only to be opened, in order to prove abundant.

While we can anticipate no considerable increase in the proceeds of the sales of the public lands, for reasons perfectly obvious to all, for several years to come, yet the public lands cannot otherwise than be regarded as the foundation of the public credit. With so large a body of the most fertile lands in the world under the control and at the disposal of the Government, no one can reasonably doubt the entire ability of the Government to meet its engagements under every emergency. In seasons of trial and difficulty, similar to those through which we are passing, the capitalist makes his investments in the Government stocks with the most assured confidence of ultimate reimbursement; and whatever may be said in a period of great financial prosperity, such as existed for some years after 1833, I should regard it as suicidal in a season of financial embarrassment, either to alienate the lands themselves, or the proceeds arising from their sales. The first and paramount duty of those to whom may be intrusted the administration of public affairs, is to guard the public credit. In re-establishing the credit of this central Government, the readiest and most obvious mode is taken to restore the credit of the States. The extremities can only be made sound by producing a healthy action in the central Government, and the history of the present day fully establishes the fact, that an increase in the value of the stocks of this Government will, in a great majority of instances, be attended by an increase in the value of the stocks of the States. It should therefore be a matter of geueral congratulation, that, amidst all the embarrassments arising from surrounding circumstances, the credit of the Government should have been so fully restored, that it has been enabled to affect a loan of seven millions of dollars, to redeem that amount of Treasury notes, on terms more favorable thau any that have been offered for many years. And the six per cent. stock which was created in 1842,

has advanced in the hands of the holders to nearly twenty per cent. above its par value. The confidence of the people in the integrity of their Government has thus been signally manifested. These opinions relative to the public lands do not in any manner conflict with the observance of the most liberal policy towards those of our fellow-citizens who press forward into the wilderness, and are the pioneers in the work of its reclamation. In securing to all such their rights of pre-emption, the Government performs but an act of retributive justice for sufferings encountered and hardships endured, and finds ample remuneration in the comforts which its policy ensures and the happiness which it imparts.

Should a revision of the tariff, with a view to revenue, become necessary in the estimation of Congress, I doubt not you will approach the subject with a just and enlightened regard to the interests of the whole Union. The principles and views which I have heretofore had occasion to submit remain unchanged. It can, however, never be too often repeated, that the prominent interest of every important pursuit of life requires for success permanency and stability in legislation. These can only be attained by adopting as the basis of action moderation in all things, which is as indispensably necessary to secure the harmonious action of the political as of the animal system. In our political organization, no one section of the country should desire to have its supposed interests advanced at the sacrifice of all others; but union, being the great interest, equally precious to all, should be fostered and sustained by mutual concessions and the cultivation of that spirit of compromise from which the Constitution itself proceeded. You will be informed, by the report from the Treasury Department, of the measures taken under the act of the last session, authorizing the reissue of Treasury notes in lieu of those then outstanding. The system adopted in pursuance of existing laws seems well calculated to save the country a large amount of interest, while it affords conveniences and obviates dangers and expense in the transmission of funds to disbursing agents. I refer you also to that report for the means proposed by the Secretary to increase the revenue, and particularly to that portion of it which relates to the subject of the warehousing system, which I earnestly urged upon Congress at its last session, and as to the importance of which my opinion has undergone no change.

In view of the disordered condition of the currency at the time, and the high rates of exchange between different parts of the country, I felt it to be incumbent on me to present to the consideration of your predecessors a proposition conflicting in no degree with the Constitution or with the rights of the States, and having the sanction, not in detail, but in principle, of Some of the eminent men who had preceded me in the Executive office. That proposition contemplated the issuing of Treasury notes of denominations not less than five nor more than one hundred dollars, to be employed in payment of the obligations of the Government in lieu of gold and silver, at the option of the public creditor, and to an amount not exceeding $15,000,000. It was proposed to make them receivable every where, and to establish at various points depositories of gold and silver, to be held in trust for the redemption of such notes, so as to ensure their convertibility into specie. No doubt was entertained that such notes would have maintained a par value with gold and silver, thus furnishing a paper currency of equal value over the Union, thereby meeting the just expectations of the people, and fulfilling the duties of a parental Government. Whether the