Chapter XL: Front Matter (40)

With the views I entertain I can not favor the policy which has been suggested, either to withdraw our Army altogether or to retire to a designated line and simply hold and defend it. To withdraw our Army altogether from the conquests they have made by deeds of unparalleled bravery, and at the expense of so much blood and treasure, in a just war on our part, and one which, by the act of the enemy, we could not honorably have avoided, would be to degrade the nation in its own estimation and in that of the world. To retire to a line and simply hold and defend it would not terminate the war. On the contrary, it would encourage Mexico to persevere and tend to protract it indefinitely. It is not to be expected that Mexico, after refusing to establish such a line as a permanent boundary when our victorious Army are in possession of her capital and in the heart of her country, would permit us to hold it without resistance. That she would continue the war, and in the most harassing and annoying forms, there can be no doubt. A border warfare of the most savage character, extending over a long line, would be unceasingly waged. It would require a large army to be kept constantly in the field, stationed at posts and garrisons along such a line, to protect and defend it. The enemy, relieved from the pressure of our arms on his coasts and in the populous parts of the interior, would direct his attention to this line, and, selecting an isolated post for attack, would concentrate his forces upon it. This would be a condition of affairs which the Mexicans, pursuing their favorite system of guerrilla warfare, would probably prefer to any other. Were we to assume a defensive attitude on such a line, all the advantages of such a state of war would be on the side of the enemy. We could levy no contributions upon him, or in any other way make him feel the pressure of the war, but must remain inactive and await his approach, being in constant uncertainty at what point on the line or at what time he might make an assault. He may assemble and organize an overwhelming force in the interior on his own side of the line, and, concealing his purpose, make a sudden assault upon some one of our posts so distant from any other as to prevent the possibility of timely succor or reenforcements, and in this way our gallant Army would be exposed to the danger of being cut off in detail; or if by their unequaled bravery and prowess everywhere exhibited during this war they should repulse the enemy, their numbers stationed at any one post may be too small to pursue him. If the enemy be repulsed in one attack, he would have nothing to do but to retreat to his own side of the line, and, being in no fear of a pursuing army, may reenforce himself at leisure for another attack on the same or some other post. He may, too, cross the line between our posts, make rapid incursions into the country which we hold, murder the inhabitants, commit depredations on them, and then retreat to the interior before a sufficient force can be concentrated to pursue him. Such would probably be the harassing character of a mere defensive war on our part. If our forces when attacked, or threatened with attack, be permitted to cross the line, drive back the enemy, and conquer him, this would be again to invade the enemy’s country after having lost all the advantages of the conquests we have already made by having voluntarily abandoned them. To hold such a line successfully and in security it is far from being certain that it would not require as large an army as would be necessary to hold all the conquests we have already made and to continue the prosecution of the war in the heart of the enemy’s country. It is also far from being certain that the expenses of the war would be diminished by such a policy. I am persuaded that the best means of vindicating the national honor and interest and of bringing the war to an honorable close will be to prosecute it with increased energy and power in the vital parts of the enemy’s country.

In my annual message to Congress of December last I declared that--

The war has not been waged with a view to conquest, but, having been commenced by Mexico, it has been carried into the enemy’s country and will be vigorously prosecuted there with a view to obtain an honorable peace, and thereby secure ample indemnity for the expenses of the war, as well as to our much-injured citizens, who hold large pecuniary demands against Mexico.

Such, in my judgment, continues to be our true policy; indeed, the only policy which will probably secure a permanent peace.

It has never been contemplated by me, as an object of the war, to make a permanent conquest of the Republic of Mexico or to annihilate her separate existence as an independent nation. On the contrary, it has ever been my desire that she should maintain her nationality, and under a good government adapted to her condition be a free, independent, and prosperous Republic. The United States were the first among the nations to recognize her independence, and have always desired to be on terms of amity and good neighborhood with her. This she would not suffer. By her own conduct we have been compelled to engage in the present war. In its prosecution we seek not her overthrow as a nation, but in vindicating our national honor we seek to obtain redress for the wrongs she has done us and indemnity for our just demands against her. We demand an honorable peace, and that peace must bring with it indemnity for the past and security for the future. Hitherto Mexico has refused all accommodation by which such a peace could be obtained.

Whilst our armies have advanced from victory to victory from the commencement of the war, it has always been with the olive branch of peace in their hands, and it has been in the power of Mexico at every step to arrest hostilities by accepting it.

One great obstacle to the attainment of peace has undoubtedly arisen from the fact that Mexico has been so long held in subjection by one faction or military usurper after another, and such has been the condition of insecurity in which their successive governments have been placed that each has been deterred from making peace lest for this very cause a rival faction might expel it from power. Such was the fate of President Herrera’s administration in 1845 for being disposed even to listen to the overtures of the United States to prevent the war, as is fully confirmed by an official correspondence which took place in the month of August last between him and his Government, a copy of which is herewith communicated. “For this cause alone the revolution which displaced him from power was set on foot” by General Paredes. Such may be the condition of insecurity of the present Government.

There can be no doubt that the peaceable and well-disposed inhabitants of Mexico are convinced that it is the true interest of their country to conclude an honorable peace with the United States, but the apprehension of becoming the victims of some military faction or usurper may have prevented them from manifesting their feelings by any public act. The removal of any such apprehension would probably cause them to speak their sentiments freely and to adopt the measures necessary for the restoration of peace. With a people distracted and divided by contending factions and a Government subject to constant changes by successive revolutions, the continued successes of our arms may fail to secure a satisfactory peace. In such event it may become proper for our commanding generals in the field to give encouragement and assurances of protection to the friends of peace in Mexico in the establishment and maintenance of a free republican government of their own choice, able and willing to conclude a peace which would be just to them and secure to us the indemnity we demand. This may become the only mode of obtaining such a peace. Should such be the result, the war which Mexico has forced upon us would thus be converted into an enduring blessing to herself. After finding her torn and distracted by factions, and ruled by military usurpers, we should then leave her with a republican government in the enjoyment of real independence and domestic peace and prosperity, performing all her relative duties in the great family of nations and promoting her own happiness by wise laws and their faithful execution.

If, after affording this encouragement and protection, and after all the persevering and sincere efforts we have made from the moment Mexico commenced the war, and prior to that time, to adjust our differences with her, we shall ultimately fail, then we shall have exhausted all honorable means in pursuit of peace, and must continue to occupy her country with our troops, taking the full measure of indemnity into our own hands, and must enforce the terms which our honor demands.

To act otherwise in the existing state of things in Mexico, and to withdraw our Army without a peace, would not only leave all the wrongs of which we complain unredressed, but would be the signal for new and fierce civil dissensions and new revolutions--all alike hostile to peaceful relations with the United States. Besides, there is danger, if our troops were withdrawn before a peace was conducted, that the Mexican people, wearied with successive revolutions and deprived of protection for their persons and property, might at length be inclined to yield to foreign influences and to cast themselves into the arms of some European monarch for protection from the anarchy and suffering which would ensue. This, for our own safety and in pursuance of our established policy, we should be compelled to resist. We could never consent that Mexico should be thus converted into a monarchy governed by a foreign prince.

Mexico is our near neighbor, and her boundaries are coterminous with our own through the whole extent across the North American continent, from ocean to ocean. Both politically and commercially we have the deepest interest in her regeneration and prosperity. Indeed, it is impossible that, with any just regard to our own safety, we can ever become indifferent to her fate.

It may be that the Mexican Government and people have misconstrued or misunderstood our forbearance and our objects in desiring to conclude an amicable adjustment of the existing differences between the two countries. They may have supposed that we would submit to terms degrading to the nation, or they may have drawn false inferences from the supposed division of opinion in the United States on the subject of the war, and may have calculated to gain much by protracting it, and, indeed, that we might ultimately abandon it altogether without insisting on any indemnity, territorial or otherwise. Whatever may be the false impressions under which they have acted, the adoption and prosecution of the energetic policy proposed must soon undeceive them.

In the future prosecution of the war the enemy must be made to feel its pressure more than they have heretofore done. At its commencement it was deemed proper to conduct it in a spirit of forbearance and liberality. With this end in view, early measures were adopted to conciliate, as far as a state of war would permit, the mass of the Mexican population; to convince them that the war was waged, not against the peaceful inhabitants of Mexico, but against their faithless Government, which had commenced hostilities; to remove from their minds the false impressions which their designing and interested rulers had artfully attempted to make, that the war on our part was one of conquest, that it was a war against their religion and their churches, which were to be desecrated and overthrown, and that their rights of person and private property would be violated. To remove these false impressions, our commanders in the field were directed scrupulously to respect their religion, their churches, and their church property, which were in no manner to be violated; they were directed also to respect the rights of persons and property of all who should not take up arms against us.

Assurances to this effect were given to the Mexican people by Major General Taylor in a proclamation issued in pursuance of instructions from the Secretary of War in the month of June, 1846, and again by Major-General Scott, who acted upon his own convictions of the propriety of issuing it, in a proclamation of the 11th of May, 1847. In this spirit of liberality and conciliation, and with a view to prevent the body of the Mexican population from taking up arms against us, was the war conducted on our part. Provisions and other supplies furnished to our Army by Mexican citizens were paid for at fair and liberal prices, agreed upon by the parties. After the lapse of a few months it became apparent that these assurances and this mild treatment had failed to produce the desired effect upon the Mexican population. While the war had been conducted on our part according to the most humane and liberal principles observed by civilized nations, it was waged in a far different spirit on the part of Mexico. Not appreciating our forbearance, the Mexican people generally became hostile to the United States, and availed themselves of every opportunity to commit the most savage excesses upon our troops. Large numbers of the population took up arms, and, engaging in guerrilla warfare, robbed and murdered in the most cruel manner individual soldiers or small parties whom accident or other causes had separated from the main body of our Army; bands of guerrilleros and robbers infested the roads, harassed our trains, and whenever it was in their power cut off our supplies.

The Mexicans having thus shown themselves to be wholly incapable of appreciating our forbearance and liberality, it was deemed proper to change the manner of conducting the war, by making them feel its pressure according to the usages observed under similar circumstances by all other civilized nations.

Accordingly, as early as the 22d of September, 1846, instructions were given by the Secretary of War to Major-General Taylor to “draw supplies” for our Army “from the enemy without paying for them, and to require contributions for its support, if in that way he was satisfied he could get abundant supplies for his forces.” In directing the execution of these instructions much was necessarily left to the discretion of the commanding officer, who was best acquainted with the circumstances by which he was surrounded, the wants of the Army, and the practicability of enforcing the measure. General Taylor, on the 26th of October, 1846, replied from Monterey that “it would have been impossible hitherto, and is so 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 declared his readiness to do so “should the Army 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 3d of April, 1847, who replied from Jalapa on the 20th of May, 1847, that if it be expected “that the Army is to support itself by forced contributions levied upon the country we may ruin and exasperate the inhabitants and starve ourselves.” The same discretion was given to him that had been to General Taylor in this respect. General Scott, for the reasons assigned by him, also continued to pay for the articles of supply for the Army which were drawn from the enemy.

After the Army had reached the heart of the most wealthy portion of Mexico it was supposed that the obstacles which had before that time prevented it would not be such as to render impracticable the levy of forced contributions for its support, and on the 1st of September and again on the 6th of October, 1847, the order was repeated in dispatches addressed 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 furnish 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 dispatches were forwarded to General Taylor for his government.

On the 31st of March last I caused an order to be issued to our military and naval commanders to levy and collect a military contribution upon all vessels and merchandise which might enter any of the ports of Mexico in our military occupation, and to apply such contributions toward defraying the expenses of the war. By virtue of the right of conquest and the laws of war, the conqueror, consulting his own safety or convenience, may either exclude foreign commerce altogether from all such ports or permit it upon such terms and conditions as he may prescribe. Before the principal ports of Mexico were blockaded by our Navy the revenue derived from import duties under the laws of Mexico was paid into the Mexican treasury. After these ports had fallen into our military possession the blockade was raised and commerce with them permitted upon prescribed terms and conditions. They were opened to the trade of all nations upon the payment of duties more moderate in their amount than those which had been previously levied by Mexico, and the revenue, which was formerly paid into the Mexican treasury, was directed to be collected by our military and naval officers and applied to the use of our Army and Navy. Care was taken that the officers, soldiers, and sailors of our Army and Navy should be exempted from the operations of the order, and, as the merchandise imported upon which the order operated must be consumed by Mexican citizens, the contributions exacted were in effect the seizure of the public revenues of Mexico and the application of them to our own use. In directing this measure the object was to compel the enemy to contribute as far as practicable toward the expenses of the war.

For the amount of contributions which have been levied in this form I refer you to the accompanying reports of the Secretary of War and of the Secretary of the Navy, by which it appears that a sum exceeding half a million of dollars has been collected. This amount would undoubtedly have been much larger but for the difficulty of keeping open communications between the coast and the interior, so as to enable the owners of the merchandise imported to transport and vend it to the inhabitants of the country. It is confidently expected that this difficulty will to a great extent be soon removed by our increased forces which have been sent to the field.

Measures have recently been adopted by which the internal as well as the external revenues of Mexico in all places in our military occupation will be seized and appropriated to the use of our Army and Navy.

The policy of levying upon the enemy contributions in every form consistently with the laws 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 will be relieved from a heavy drain, the Mexican people will be made to feel the burdens of the war, and, consulting their own interests, may be 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 war which in my judgment required a greater number of troops in the field than had been anticipated. The strength of the Army was accordingly increased by “accepting” the services of all the volunteer forces authorized by the act of the 13th of May, 1846, without putting a construction on that act the correctness of which was seriously questioned. The volunteer forces now in the field, with those which had been “accepted” to “serve for twelve months” and were discharged at the end of their term of service, exhaust the 50,000 men authorized by that act. Had it been clear that a proper construction of the act warranted it, the services of an additional number would have been called for and accepted; but doubts existing upon this point, the power was 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 the war with Mexico and to be discharged upon the conclusion and ratification of a treaty of peace. I invite the attention of Congress to the views presented by the Secretary of War in his report upon this subject.

I recommend also that authority be given by law to call for and accept the services of an additional number of volunteers, to be exercised 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 given, liberal privileges have been granted to their commerce in the ports of the enemy in our military occupation. The difficulty with the Brazilian Government, which at one time threatened to interrupt the friendly relations between the two countries, will, I trust, be speedily adjusted. I have received information that an envoy extraordinary and minister plenipotentiary to the United States will shortly be appointed by His Imperial Majesty, and it is hoped that he will come instructed and prepared to adjust all remaining differences between the two Governments in a manner acceptable and honorable to both. In the meantime, I have every reason to believe that nothing will occur to interrupt our amicable relations with Brazil.

It has been my constant effort to maintain and cultivate the most intimate relations of friendship with all the independent powers of South America, and this policy has been attended with the happiest results. 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 have been placed and the desire on the part of my predecessors as well as myself to grant them the utmost indulgence have hitherto prevented these claims from being urged in a manner demanded by strict justice. The time has arrived when they ought to be finally adjusted and liquidated, and efforts are now making for that purpose.

It is proper to inform you that the Government of Peru has in good faith paid the first two installments of the indemnity of $30,000 each, and the greater portion of the interest due thereon, in execution of the convention between that Government and the United States the ratifications of which were exchanged at Lima on the 31st of October, 1846. The Attorney-General of the United States early in August last completed the adjudication of the claims under this convention, and made his report thereon in pursuance of the act of the 8th of August, 1846. The sums to which the claimants are respectively entitled will be paid on demand at the Treasury.

I invite the early attention of Congress to the present condition of our citizens in China. Under our treaty with that power American citizens are withdrawn from the jurisdiction, whether civil or criminal, of the Chinese Government and placed under that of our public functionaries in that country. By these alone can our citizens be tried and punished for the commission of any crime; by these alone can questions be decided between them involving the rights of persons and property, and by these alone can contracts be enforced into which they may have entered with the citizens or subjects of foreign powers. The merchant vessels of the United States lying in the waters of the five ports of China open to foreign commerce are under the exclusive jurisdiction of officers of their own Government. Until Congress shall establish competent tribunals to try and punish crimes and to exercise jurisdiction in civil cases in China, American citizens there are subject to no law whatever. Crimes may be committed with impunity and debts may be contracted without any means to enforce their payment. Inconveniences have already 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 Government has not provided for the punishment of crimes or the enforcement of contracts against American citizens in that country, whilst their Government has established tribunals by which an American citizen can recover debts due from British subjects. Accustomed, as the Chinese are, to summary justice, they could not be made to comprehend why criminals who are citizens of the United States should escape with impunity, in violation of treaty obligations, whilst the punishment of a Chinese who had committed any crime against an American citizen would be rigorously exacted. Indeed, the consequences might be fatal to American citizens in China should a flagrant crime be committed by any one of them upon a Chinese, and should trial and punishment not follow according to the requisitions of the treaty. This might disturb, if not destroy, our friendly relations with that Empire, and cause an interruption of our valuable commerce. Our treaties with the Sublime Porte, Tripoli, Tunis, Morocco, and Muscat also require the legislation of Congress to carry them into execution, though the necessity for immediate action may not be so urgent as in regard to China.

The Secretary of State has submitted an estimate to defray the expense of opening diplomatic relations with the Papal States. The interesting political events now in progress in these States, as well as a just regard to our commercial interests, have, in my opinion, rendered such a measure highly expedient.

Estimates have also been submitted for the outfits and salaries of charges’ d’affaires to the Republics of Bolivia, Guatemala, and Ecuador. The manifest importance of cultivating the most friendly relations with all the independent States upon this continent has induced me to recommend appropriations necessary for the maintenance of these missions.

I recommend to Congress that an appropriation be made to be paid to the Spanish Government for the purpose of distribution among the claimants in the Amistad case. I entertain the conviction that this is due to Spain under the treaty of the 20th of October, 1795, and, moreover, that from the earnest manner in which the claim continues to be urged so long as it shall remain unsettled it will be a source of irritation and discord between the two countries, which may prove highly prejudicial to the interests of the United States. Good policy, no less than a faithful compliance with our treaty obligations, requires that the inconsiderable appropriation demanded should be made.

A detailed statement of the condition of the finances will be presented in the annual report of the Secretary of the Treasury. The imports for the last fiscal year, ending on the 30th of June, 1847, were of the value of $146,545,638, of which the amount exported was $8,011,158, leaving $138,534,480 in the country for domestic use. The value of the exports for the same period was $158,648,622, of which $150,637,464 consisted of domestic productions and $8,011,158 of foreign articles.

The receipts into the Treasury for the same period amounted to $26,346,790.37, of which there was derived from customs $23,747,864.66, from sales of public lands $2,498,335.20, and from incidental and miscellaneous sources $100,570.51. The last fiscal year, during which this amount was received, embraced five months under the operation of the tariff act of 1842 and seven months during which the tariff act of 1846 was in force. During the five months under the act of 1842 the amount received from customs was $7,842,306.90, and during the seven months under the act of 1846 the amount received was $15,905,557.76.

The net revenue from customs during the year ending on the 1st of December, 1846, being the last year under the operation of the tariff act of 1842, was $22,971,403.10, and the net revenue from customs during the year ending on the 1st of December, 1847, being the first year under the operations of the tariff act of 1846, was about $31,500,000, being an increase of revenue for the first year under the tariff of 1846 of more than $8,500,000 over that of the last year under the tariff of 1842.

The expenditures during the fiscal year ending on the 30th of June last were $59,451,177.65, of which $3,522,082.37 was on account payment of principal and interest of the public debt, including Treasury notes redeemed and not funded. The expenditures exclusive of payment of public debt were $55,929,095.28.

It is estimated that the receipts into the Treasury for the fiscal year ending on the 30th of June, 1848, including the balance in the Treasury on the 1st of July last, will amount to $42,886,545.80, of which $31,000,000, it is estimated, will be derived from customs, $3,500,000 from the sale of the public lands, $400,000 from incidental sources, eluding sales made by the Solicitor of the Treasury, and $6,285,294.55 from loans already authorized by law, which, together with the balance in the Treasury on the 1st 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 of principal and interest of the public debt and Treasury notes, to $58,615,660.07. On the 1st of the present month the amount of the public debt actually incurred, including Treasury notes, was $45,659,659.40. The public debt due on the 4th of March, 1845, including Treasury notes, was $17,788,799.62, and consequently the addition made to the public debt since that time is $27,870,859.78.

Of the loan of twenty-three millions authorized by the act of the 28th of January, 1847, the sum of five millions was paid out to the public creditors or exchanged at par for specie; the remaining eighteen millions was offered for specie to the highest bidder not below par, by an advertisement issued by the Secretary of the Treasury and published from the 9th of February until the 10th of April, 1847, when it was awarded to the several highest bidders at premiums varying from one-eighth of per cent to 2 per cent above par. The premium has been paid into the Treasury 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 year, ending on the 30th of June, 1849, a further loan in aid of the ordinary revenues of the Government will be necessary. Retaining a sufficient surplus in the Treasury, the loan required for the remainder of the present fiscal year will be about $18,500,000. If the duty on tea and coffee 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 $17,000,000. The loan may be further reduced by whatever amount of expenditures can be saved by military contributions collected in Mexico. The most vigorous measures for the augmentation of these contributions have been directed and a very considerable sum is expected from that source. Its amount can not, however, be calculated with any certainty. It is recommended that the loan to be made be authorized upon the same terms and for the same time as that which was authorized under the provisions of the act of the 28th of January, 1847.

Should the war with Mexico be continued until the 30th of June, 1849, it is estimated that a further loan of $20,500,000 will be required for the fiscal year ending on that 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 contributions shall be collected in Mexico. If the duty on tea and coffee be imposed and the lands be reduced and graduated in price as proposed, the loan may be reduced to $17,000,000, 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 ask Congress for authority to negotiate this loan for the next fiscal year, as it is hoped that the loan asked for the remainder of the present fiscal year, aided by military contributions which may be collected in Mexico, may be sufficient. If, contrary to my expectation, there should be a necessity for it, the fact will be communicated to Congress in time for their action during the present session. In no event will a sum exceeding $6,000,000 of this amount be needed before the meeting of the session of Congress in December, 1848.

The act of the 30th of July, 1846, “reducing the duties on imports,” has been in force since the 1st of December last, and I am gratified to state that all the beneficial effects which were anticipated from its operation have been fully realized. The public revenue derived from customs during the year ending on the 1st of December, 1847, exceeds by more than $8,000,000 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 in the great and almost unexampled prosperity which prevails in every branch of business.

While 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 foreign trade, all the great interests of the country have been advanced and promoted.

The great and important interests of agriculture, which had been not only too much neglected, but actually taxed under the protective policy for the benefit of other interests, have been relieved of the burdens which that policy imposed on them; and our farmers and planters, under a more just and liberal commercial policy, are finding new and profitable markets abroad for their augmented products. Our commerce is rapidly increasing, and is extending more widely the circle of international exchanges. Great as has been the increase of our imports during the past year, our exports of domestic 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 during any preceding period of equal length. Large profits have been derived by those who have constructed as well as by those who have navigated them. Should the ratio of increase in the number of our merchant vessels be progressive, and be as great for the future as during the past year, the time is not distant when our tonnage and commercial marine will be larger than that of any other nation in the world.

Whilst the interests of agriculture, of commerce, and of navigation have been enlarged and invigorated, it is highly gratifying to observe that our manufactures are also in a prosperous condition. None of the ruinous effects upon this interest which were apprehended by some as the result of the operation of the revenue system established by the act of 1846 have been experienced. On the contrary, the number of manufactories and the amount of capital invested in them is steadily and rapidly increasing, affording gratifying proofs that American enterprise and skill employed in this branch of domestic industry, with no other advantages than those fairly and incidentally accruing from a just System of revenue duties, are abundantly able to meet successfully all competition from abroad and still derive fair and remunerating profits. While capital invested in manufactures is yielding adequate and fair profits under the new system, the wages of labor, whether employed in manufactures, agriculture, commerce, or navigation, have been augmented. The toiling millions whose daily labor furnishes the supply of food and raiment and all the necessaries and comforts of life are receiving higher wages and more steady and permanent employment than in any other country or at any previous period of our own history.

So successful have been all branches of our industry that a foreign war, which generally diminishes the resources of a nation, has in no essential degree retarded our onward progress or checked our general prosperity.

With such gratifying evidences of prosperity and of the successful operation of the revenue act of 1846, every consideration of public policy recommends 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 injuriously disturbed, as they have heretofore been by frequent and sometimes sudden changes.

For the purpose of increasing the revenue, and without changing or modifying the rates imposed by the act of 1846 on the dutiable articles embraced 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 during peace, and when the revenue to be derived from them was not needed, ceases to exist when the country is engaged in war and requires the use of all of its available resources. It is a tax which would be so generally diffused among the people that it would be felt oppressively by none and be complained of by none. It is believed that there are not in the list of imported articles any which are more properly the subject of war duties than tea and coffee.

It is estimated that $3,000,000 would be derived annually by a moderate duty imposed on these articles.

Should Congress avail itself of this additional source of 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 wiser to impose the war duties recommended or by omitting to do so increase the public debt annually $3,000,000 so long as loans shall be required to prosecute the war, and afterwards provide in some other form to pay the semiannual interest upon it, and ultimately to extinguish the principal. If in addition to these duties Congress should graduate and reduce the price of such of the public lands as experience has proved will not command the price placed upon them by the Government, an additional annual income to the Treasury of between half a million and a million of dollars, it is estimated, would be derived from this source. Should both measures receive the sanction of Congress, the annual amount of public debt necessary to be contracted during the continuance of the war would be reduced near $4,000,000. The duties 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 rendered necessary to be contracted by it shall be discharged. The amount of the public debt to be contracted should be limited to the lowest practicable sum, and should be extinguished as early after the conclusion of the war as the means of 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 authority be conferred by laws for that purpose. The act of the 6th of August, 1846, “to establish a warehousing system,” has been in operation more than a year, and has proved to be an important auxiliary to the tariff act of 1846 in augmenting the revenue and extending the commerce of the country. Whilst it has tended to enlarge commerce, it has been beneficial to our manufactures by diminishing forced sales at auction of foreign goods at low prices to raise the duties to be advanced on them, and by checking fluctuations in the market. The system, although sanctioned by the experience of other countries, was entirely new in the United States, and is susceptible of improvement in some of its provisions. The Secretary of the Treasury, upon whom was devolved large discretionary powers in carrying this measure into effect, has collected and is now collating the practical results of the system in other countries where it has long been established, and will report at an early period of your session such further regulations suggested by the investigation as may render it still more effective and beneficial.

By the act to “provide for the better organization of the Treasury and for the collection, safe-keeping, and disbursement of the public revenue” all banks were discontinued as fiscal agents of the Government, and the paper currency issued by them was no longer permitted to be received in payment of public dues. The constitutional treasury created by this act went into operation on the 1st of January last. Under the system established by it the public moneys have been collected, safely kept, and disbursed by the direct agency of officers of the Government 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 under this system, it has had a salutary effect in checking and preventing an undue inflation of the paper currency issued by the banks which exist under State charters. Requiring, as it does, all dues to the Government to be paid in gold and silver, its effect is to restrain excessive issues of bank paper by the banks disproportioned to the specie in their vaults, 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 business 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 last fiscal year was $24,121,289, of which there was retained in the country $22,276,170. Had the former financial system prevailed and the public moneys been placed on deposit in the banks, nearly the whole of this amount would have gone into their vaults, not to be thrown into circulation by them, but to be withheld from the hands of the people as a currency and made the basis of new and enormous issues of bank paper. A large proportion 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 into circulation as a currency among the people. The amount of gold and silver coin now in circulation in the country is larger than at any former period.

The financial system established by the constitutional treasury has been thus far eminently successful in its operations, and I recommend an adherence to all its essential provisions, and especially to that vital provision which wholly separates the Government from all connection with banks and excludes bank paper from all revenue receipts.

In some of its details, not involving its general principles, the system is defective and will require modification. These defects and such amendments as are deemed important were set forth in the last annual report of the Secretary of the Treasury. These amendments are again recommended to the early and favorable consideration of Congress.

During the past year the coinage at the Mint and its branches has exceeded $20,000,000. This has consisted chiefly in converting the coins of foreign countries into American coin.

The largest amount of foreign coin imported has been received at New York, and if a branch mint were established at that city all the foreign coin received at that port could at once be converted into our own coin without the expense, risk, and delay of transporting it to the Mint for that purpose, and the amount recoined would be much larger.

Experience has proved that foreign coin, and especially foreign gold coin, will not circulate extensively as a currency among the people. The important measure of extending our specie circulation, both of gold and silver, and of diffusing it among the people can only be effected by converting such foreign coin into American coin. I repeat the recommendation contained in my last annual message for the establishment of a branch of the Mint of the United States at the city of New York.

All the public lands which had been surveyed and were ready for market have been proclaimed for sale during the past year. The quantity offered and to be offered for sale under proclamations issued since the 1st of January last amounts to 9,138,531 acres. The prosperity of the Western States and Territories in which these lands lie will be advanced by their speedy sale. By withholding them from market their growth and increase of population would be retarded, while thousands of our enterprising and meritorious frontier population would be deprived of the opportunity of securing freeholds for themselves and their families. But in addition to the general considerations which rendered the early sale of these lands proper, it was a leading object at this time to derive as large a sum as possible from this source, and thus diminish by that amount the public loan rendered necessary by the existence of a foreign war.

It is estimated that not less than 10,000,000 acres of the public lands will be surveyed and be in a condition to be proclaimed for sale during the year 1848.

In my last annual message I presented the reasons which in my judgment rendered it proper to graduate and reduce the price of such of the public lands as have remained unsold for long periods after they had been offered for sale at public auction.

Many millions of acres of public lands lying within the limits of several of the Western States have been offered in the market and been subject to sale at private entry for more than twenty years and large quantities for more than thirty years at the lowest price prescribed by the existing laws, and it has been found that they will not command that price. They must remain unsold and uncultivated for an indefinite period unless the price demanded for them by the Government shall be reduced. 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 recommended. When the country is engaged in a foreign war, and we must necessarily resort to loans, it would 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.

I recommend that the existing laws on the subject of preemption 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 well as afterwards, in all cases where such settlements may be made after the Indian title shall have been extinguished.

If the right of preemption 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, who will be enabled thereby to educate their children and otherwise 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 attend to their services in cases of emergencies and among the last to leave the field as long as an enemy remains to be encountered. Such a policy will also impress these patriotic pioneer emigrants with deeper feelings of gratitude for the parental care of their Government, when they find their dearest interests secured to them by the permanent laws of the land and that they are no longer in danger of losing their homes and hard-earned improvements by being brought into competition with a more wealthy class of purchasers at the land sales. The attention of Congress was 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 on the subject. Our citizens who inhabit that distant region of country are still left without the protection of our laws, or any regularly organized government. Before the question of limits and boundaries of the Territory of Oregon was definitely settled, from the necessity of their condition the inhabitants had established 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 Congress, and possess all the rights and privileges which citizens of other portions of the territories of the United States have heretofore enjoyed or may now enjoy.

Our judicial system, revenue laws, laws regulating trade and intercourse with the Indian tribes, and the protection of our laws generally should be extended over them.

In addition to the inhabitants in that Territory who had previously emigrated to it, large numbers of our citizens have followed them during the present year, and it is not doubted that during the next and subsequent years their numbers will be greatly increased.

Congress at its last session established post routes leading to Oregon, and between different points within that Territory, and authorized the establishment of post-offices at “Astoria and such other places on the coasts of the Pacific within the territory of the United States as the public interests may require.” Post-offices have accordingly been established, deputy postmasters appointed, and provision made for the transportation of the mails.

The preservation of peace with the Indian tribes residing west 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.

I recommend that a surveyor-general’s office be 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 terms, of limited quantities of the public lands be made to all citizens of the United States who have emigrated, or may hereafter within a prescribed period emigrate, to Oregon and settle upon them. These hardy and adventurous citizens, who have encountered the dangers and privations of a long and toilsome journey, and have at length found an abiding place for themselves and their families upon the utmost verge of our 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 various branches of the public service connected with the Department under his charge. The duties devolving on this Department have been unusually onerous and responsible during the past year, and have been discharged with ability and success.