FIRST ANNUAL MESSAGE.

WASHINGTON, _December 5, 1837_.

_Fellow-Citizens of the Senate and House of Representatives_:

We have reason to renew the expression of our devout gratitude to the

Giver of All Good for His benign protection. Our country presents on

every side the evidences of that continued favor under whose auspices

it has gradually risen from a few feeble and dependent colonies to a

prosperous and powerful confederacy. We are blessed with domestic

tranquillity and all the elements of national prosperity. The pestilence

which, invading for a time some flourishing portions of the Union,

interrupted the general prevalence of unusual health has happily been

limited in extent and arrested in its fatal career. The industry and

prudence of our citizens are gradually relieving them from the pecuniary

embarrassments under which portions of them have labored; judicious

legislation and the natural and boundless resources of the country have

afforded wise and timely aid to private enterprise, and the activity

always characteristic of our people has already in a great degree

resumed its usual and profitable channels.

The condition of our foreign relations has not materially changed since

the last annual message of my predecessor. We remain at peace with all

nations, and no efforts on my part consistent with the preservation of

our rights and the honor of the country shall be spared to maintain a

position so consonant to our institutions. We have faithfully sustained

the foreign policy with which the United States, under the guidance of

their first President, took their stand in the family of nations--that

of regulating their intercourse with other powers by the approved

principles of private life; asking and according equal rights and equal

privileges; rendering and demanding justice in all cases; advancing

their own and discussing the pretensions of others with candor,

directness, and sincerity; appealing at all times to reason, but never

yielding to force nor seeking to acquire anything for themselves by

its exercise.

A rigid adherence to this policy has left this Government with scarcely

a claim upon its justice for injuries arising from acts committed by

its authority. The most imposing and perplexing of those of the United

States upon foreign governments for aggressions upon our citizens were

disposed of by my predecessor. Independently of the benefits conferred

upon our citizens by restoring to the mercantile community so many

millions of which they had been wrongfully divested, a great service

was also rendered to his country by the satisfactory adjustment of so

many ancient and irritating subjects of contention; and it reflects no

ordinary credit on his successful administration of public affairs that

this great object was accomplished without compromising on any occasion

either the honor or the peace of the nation.

With European powers no new subjects of difficulty have arisen, and

those which were under discussion, although not terminated, do not

present a more unfavorable aspect for the future preservation of that

good understanding which it has ever been our desire to cultivate.

Of pending questions the most important is that which exists with the

Government of Great Britain in respect to our northeastern boundary. It

is with unfeigned regret that the people of the United States must look

back upon the abortive efforts made by the Executive, for a period of

more than half a century, to determine what no nation should suffer long

to remain in dispute--the true line which divides its possessions from

those of other powers. The nature of the settlements on the borders of

the United States and of the neighboring territory was for a season such

that this, perhaps, was not indispensable to a faithful performance of

the duties of the Federal Government. Time has, however, changed this

state of things, and has brought about a condition of affairs in which

the true interests of both countries imperatively require that this

question should be put at rest. It is not to be disguised that, with

full confidence, often expressed, in the desire of the British

Government to terminate it, we are apparently as far from its adjustment

as we were at the time of signing the treaty of peace in 1783. The sole

result of long-pending negotiations and a perplexing arbitration appears

to be a conviction on its part that a conventional line must be adopted,

from the impossibility of ascertaining the true one according to the

description contained in that treaty. Without coinciding in this

opinion, which is not thought to be well founded, my predecessor gave

the strongest proof of the earnest desire of the United States to

terminate satisfactorily this dispute by proposing the substitution

of a conventional line if the consent of the States interested in the

question could be obtained. To this proposition no answer has as yet

been received. The attention of the British Government has, however,

been urgently invited to the subject, and its reply can not, I am

confident, be much longer delayed. The general relations between Great

Britain and the United States are of the most friendly character, and

I am well satisfied of the sincere disposition of that Government to

maintain them upon their present footing. This disposition has also,

I am persuaded, become more general with the people of England than

at any previous period. It is scarcely necessary to say to you how

cordially it is reciprocated by the Government and people of the United

States. The conviction, which must be common to all, of the injurious

consequences that result from keeping open this irritating question, and

the certainty that its final settlement can not be much longer deferred,

will, I trust, lead to an early and satisfactory adjustment. At your

last session I laid before you the recent communications between the two

Governments and between this Government and that of the State of Maine,

in whose solicitude concerning a subject in which she has so deep an

interest every portion of the Union participates.

The feelings produced by a temporary interruption of those harmonious

relations between France and the United States which are due as well

to the recollections of former times as to a correct appreciation of

existing interests have been happily succeeded by a cordial disposition

on both sides to cultivate an active friendship in their future

intercourse. The opinion, undoubtedly correct, and steadily entertained

by us, that the commercial relations at present existing between the

two countries are susceptible of great and reciprocally beneficial

improvements is obviously gaining ground in France, and I am assured

of the disposition of that Government to favor the accomplishment of

such an object. This disposition shall be met in a proper spirit on our

part. The few and comparatively unimportant questions that remain to

be adjusted between us can, I have no doubt, be settled with entire

satisfaction and without difficulty.

Between Russia and the United States sentiments of good will continue to

be mutually cherished. Our minister recently accredited to that Court

has been received with a frankness and cordiality and with evidences of

respect for his country which leave us no room to doubt the preservation

in future of those amicable and liberal relations which have so long

and so uninterruptedly existed between the two countries. On the few

subjects under discussion between us an early and just decision is

confidently anticipated.

A correspondence has been opened with the Government of Austria for the

establishment of diplomatic relations, in conformity with the wishes of

Congress as indicated by an appropriation act of the session of 1837,

and arrangements made for the purpose, which will be duly carried

into effect.

With Austria and Prussia and with the States of the German Empire (now

composing with the latter the Commercial League) our political relations

are of the most friendly character, whilst our commercial intercourse is

gradually extending, with benefit to all who are engaged in it.

Civil war yet rages in Spain, producing intense suffering to its own

people, and to other nations inconvenience and regret. Our citizens

who have claims upon that country will be prejudiced for a time by the

condition of its treasury, the inevitable consequence of long-continued

and exhausting internal wars. The last installment of the interest of

the debt due under the convention with the Queen of Spain has not been

paid and similar failures may be expected to happen until a portion of

the resources of her Kingdom can be devoted to the extinguishment of

its foreign debt.

Having received satisfactory evidence that discriminating tonnage

duties were charged upon the vessels of the United States in the ports

of Portugal, a proclamation was issued on the 11th day of October last,

in compliance with the act of May 25, 1832, declaring that fact, and the

duties on foreign tonnage which were levied upon Portuguese vessels in

the United States previously to the passage of that act are accordingly

revived.

The act of July 4, 1836, suspending the discriminating duties upon

the produce of Portugal imported into this country in Portuguese

vessels, was passed, upon the application of that Government through its

representative here, under the belief that no similar discrimination

existed in Portugal to the prejudice of the United States. I regret to

state that such duties are now exacted in that country upon the cargoes

of American vessels, and as the act referred to vests no discretion in

the Executive, it is for Congress to determine upon the expediency of

further legislation on the subject. Against these discriminations

affecting the vessels of this country and their cargoes seasonable

remonstrance was made, and notice was given to the Portuguese Government

that unless they should be discontinued the adoption of countervailing

measures on the part of the United States would become necessary; but

the reply of that Government, received at the Department of State

through our chargé d'affaires at Lisbon in the month of September last,

afforded no ground to hope for the abandonment of a system so little in

harmony with the treatment shown to the vessels of Portugal and their

cargoes in the ports of this country and so contrary to the expectations

we had a right to entertain.

With Holland, Sweden, Denmark, Naples, and Belgium a friendly

intercourse has been uninterruptedly maintained.

With the Government of the Ottoman Porte and its dependencies on the

coast of the Mediterranean peace and good will are carefully cultivated,

and have been fostered by such good offices as the relative distance and

the condition of those countries would permit.

Our commerce with Greece is carried on under the laws of the two

Governments, reciprocally beneficial to the navigating interests of

both; and I have reason to look forward to the adoption of other

measures which will be more extensively and permanently advantageous.

Copies of the treaties concluded with the Governments of Siam and Muscat

are transmitted for the information of Congress, the ratifications

having been received and the treaties made public since the close of the

last annual session. Already have we reason to congratulate ourselves on

the prospect of considerable commercial benefit; and we have, besides,

received from the Sultan of Muscat prompt evidence of his desire to

cultivate the most friendly feelings, by liberal acts toward one of

our vessels, bestowed in a manner so striking as to require on our part

a grateful acknowledgment.

Our commerce with the islands of Cuba and Porto Rico still labors under

heavy restrictions, the continuance of which is a subject of regret. The

only effect of an adherence to them will be to benefit the navigation of

other countries at the expense of both the United States and Spain.

The independent nations of this continent have ever since they

emerged from the colonial state experienced severe trials in their

progress to the permanent establishment of liberal political

institutions. Their unsettled condition not only interrupts their own

advances to prosperity, but has often seriously injured the other powers

of the world. The claims of our citizens upon Peru, Chili, Brazil, the

Argentine Republic, the Governments formed out of the Republics of

Colombia and Mexico, are still pending, although many of them have

been presented for examination more than twenty years. New Granada,

Venezuela, and Ecuador have recently formed a convention for the purpose

of ascertaining and adjusting claims upon the Republic of Colombia,

from which it is earnestly hoped our citizens will ere long receive

full compensation for the injuries inflicted upon them and for the delay

in affording it.

An advantageous treaty of commerce has been concluded by the

United States with the Peru-Bolivian Confederation, which wants only

the ratification of that Government. The progress of a subsequent

negotiation for the settlement of claims upon Peru has been unfavorably

affected by the war between that power and Chili and the Argentine

Republic, and the same event is also likely to produce delays in the

settlement of our demands on those powers.

The aggravating circumstances connected with our claims upon Mexico and

a variety of events touching the honor and integrity of our Government

led my predecessor to make at the second session of the last Congress a

special recommendation of the course to be pursued to obtain a speedy

and final satisfaction of the injuries complained of by this Government

and by our citizens. He recommended a final demand of redress, with a

contingent authority to the Executive to make reprisals if that demand

should be made in vain. From the proceedings of Congress on that

recommendation it appeared that the opinion of both branches of the

Legislature coincided with that of the Executive, that any mode of

redress known to the law of nations might justifiably be used. It was

obvious, too, that Congress believed with the President that another

demand should be made, in order to give undeniable and satisfactory

proof of our desire to avoid extremities with a neighboring power, but

that there was an indisposition to vest a discretionary authority in

the Executive to take redress should it unfortunately be either denied

or unreasonably delayed by the Mexican Government.

So soon as the necessary documents were prepared, after entering upon

the duties of my office, a special messenger was sent to Mexico to make

a final demand of redress, with the documents required by the provisions

of our treaty. The demand was made on the 20th of July last. The reply,

which bears date the 29th of the same month, contains assurances of a

desire on the part of that Government to give a prompt and explicit

answer respecting each of the complaints, but that the examination of

them would necessarily be deliberate; that in this examination it

would be guided by the principles of public law and the obligation

of treaties; that nothing should be left undone that might lead to

the most speedy and equitable adjustment of our demands, and that its

determination in respect to each case should be communicated through

the Mexican minister here.

Since that time an envoy extraordinary and minister plenipotentiary

has been accredited to this Government by that of the Mexican Republic.

He brought with him assurances of a sincere desire that the pending

differences between the two Governments should be terminated in

a manner satisfactory to both. He was received with reciprocal

assurances, and a hope was entertained that his mission would lead

to a speedy, satisfactory, and final adjustment of all existing subjects

of complaint. A sincere believer in the wisdom of the pacific policy by

which the United States have always been governed in their intercourse

with foreign nations, it was my particular desire, from the proximity

of the Mexican Republic and well-known occurrences on our frontier,

to be instrumental in obviating all existing difficulties with that

Government and in restoring to the intercourse between the two Republics

that liberal and friendly character by which they should always be

distinguished. I regret, therefore, the more deeply to have found in the

recent communications of that Government so little reason to hope that

any future efforts of mine for the accomplishment of those desirable

objects would be successful.

Although the larger number--and many of them aggravated cases of

personal wrongs--have been now for years before the Mexican Government,

and some of the causes of national complaint, and those of the most

offensive character, admitted of immediate, simple, and satisfactory

replies, it is only within a few days past that any specific

communication in answer to our last demand, made five months ago, has

been received from the Mexican minister. By the report of the Secretary

of State herewith presented and the accompanying documents it will be

seen that for not one of our public complaints has satisfaction been

given or offered, that but one of the cases of personal wrong has been

favorably considered, and that but four cases of both descriptions out

of all those formally presented and earnestly pressed have as yet been

decided upon by the Mexican Government.

Not perceiving in what manner any of the powers given to the Executive

alone could be further usefully employed in bringing this unfortunate

controversy to a satisfactory termination, the subject was by my

predecessor referred to Congress as one calling for its interposition.

In accordance with the clearly understood wishes of the Legislature,

another and formal demand for satisfaction has been made upon the

Mexican Government, with what success the documents now communicated

will show. On a careful and deliberate examination of their contents,

and considering the spirit manifested by the Mexican Government, it

has become my painful duty to return the subject as it now stands to

Congress, to whom it belongs to decide upon the time, the mode, and

the measure of redress. Whatever may be your decision, it shall be

faithfully executed, confident that it will be characterized by that

moderation and justice which will, I trust, under all circumstances

govern the councils of our country.

The balance in the Treasury on the 1st January, 1837, was $45,968,523.

The receipts during the present year from all sources, including

the amount of Treasury notes issued, are estimated at $23,499,981,

constituting an aggregate of $69,468,504. Of this amount about

$35,281,361 will have been expended at the end of the year on

appropriations made by Congress, and the residue, amounting to

$34,187,143, will be the nominal balance in the Treasury on the

1st of January next; but of that sum only $1,085,498 is considered as

immediately available for and applicable to public purposes. Those

portions of it which will be for some time unavailable consist chiefly

of sums deposited with the States and due from the former deposit banks.

The details upon this subject will be found in the annual report of the

Secretary of the Treasury. The amount of Treasury notes which it will be

necessary to issue during the year on account of those funds being

unavailable will, it is supposed, not exceed four and a half millions.

It seemed proper, in the condition of the country, to have the estimates

on all subjects made as low as practicable without prejudice to any

great public measures. The Departments were therefore desired to prepare

their estimates accordingly, and I am happy to find that they have been

able to graduate them on so economical a scale. In the great and often

unexpected fluctuations to which the revenue is subjected it is not

possible to compute the receipts beforehand with great certainty,

but should they not differ essentially from present anticipations,

and should the appropriations not much exceed the estimates, no

difficulty seems likely to happen in defraying the current expenses

with promptitude and fidelity.

Notwithstanding the great embarrassments which have recently

occurred in commercial affairs, and the liberal indulgence which in

consequence of these embarrassments has been extended to both the

merchants and the banks, it is gratifying to be able to anticipate that

the Treasury notes which have been issued during the present year will

be redeemed and that the resources of the Treasury, without any resort

to loans or increased taxes, will prove ample for defraying all charges

imposed on it during 1838.

The report of the Secretary of the Treasury will afford you a more

minute exposition of all matters connected with the administration of

the finances during the current year--a period which for the amount of

public moneys disbursed and deposited with the States, as well as the

financial difficulties encountered and overcome, has few parallels in

our history.

Your attention was at the last session invited to the necessity of

additional legislative provisions in respect to the collection,

safe-keeping, and transfer of the public money. No law having been then

matured, and not understanding the proceedings of Congress as intended

to be final, it becomes my duty again to bring the subject to your

notice.

On that occasion three modes of performing this branch of the public

service were presented for consideration. These were, the creation of

a national bank; the revival, with modifications, of the deposit system

established by the act of the 23d of June, 1836, permitting the use

of the public moneys by the banks; and the discontinuance of the use of

such institutions for the purposes referred to, with suitable provisions

for their accomplishment through the agency of public officers.

Considering the opinions of both Houses of Congress on the first two

propositions as expressed in the negative, in which I entirely concur,

it is unnecessary for me again to recur to them. In respect to the last,

you have had an opportunity since your adjournment not only to test

still further the expediency of the measure by the continued practical

operation of such parts of it as are now in force, but also to discover

what should ever be sought for and regarded with the utmost

deference--the opinions and wishes of the people.

The national will is the supreme law of the Republic, and on all

subjects within the limits of his constitutional powers should be

faithfully obeyed by the public servant. Since the measure in question

was submitted to your consideration most of you have enjoyed the

advantage of personal communication with your constituents. For one

State only has an election been held for the Federal Government;

but the early day at which it took place deprived the measure under

consideration of much of the support it might otherwise have derived

from the result. Local elections for State officers have, however,

been held in several of the States, at which the expediency of the plan

proposed by the Executive has been more or less discussed. You will,

I am confident, yield to their results the respect due to every

expression of the public voice. Desiring, however, to arrive at truth

and a just view of the subject in all its bearings, you will at the same

time remember that questions of far deeper and more immediate local

interest than the fiscal plans of the National Treasury were involved in

those elections. Above all, we can not overlook the striking fact that

there were at the time in those States more than one hundred and sixty

millions of bank capital, of which large portions were subject to actual

forfeiture, other large portions upheld only by special and limited

legislative indulgences, and most of it, if not all, to a greater or

less extent dependent for a continuance of its corporate existence upon

the will of the State legislatures to be then chosen. Apprised of this

circumstance, you will judge whether it is not most probable that the

peculiar condition of that vast interest in these respects, the extent

to which it has been spread through all the ramifications of society,

its direct connection with the then pending elections, and the feelings

it was calculated to infuse into the canvass have exercised a far

greater influence over the result than any which could possibly have

been produced by a conflict of opinion in respect to a question in the

administration of the General Government more remote and far less

important in its bearings upon that interest.

I have found no reason to change my own opinion as to the expediency

of adopting the system proposed, being perfectly satisfied that there

will be neither stability nor safety either in the fiscal affairs

of the Government or in the pecuniary transactions of individuals and

corporations so long as a connection exists between them which, like

the past, offers such strong inducements to make them the subjects

of political agitation. Indeed, I am more than ever convinced of

the dangers to which the free and unbiased exercise of political

opinion--the only sure foundation and safeguard of republican

government--would be exposed by any further increase of the already

overgrown influence of corporate authorities. I can not, therefore,

consistently with my views of duty, advise a renewal of a connection

which circumstances have dissolved.

The discontinuance of the use of State banks for fiscal purposes ought

not to be regarded as a measure of hostility toward those institutions.

Banks properly established and conducted are highly useful to the

business of the country, and will doubtless continue to exist in the

States so long as they conform to their laws and are found to be safe

and beneficial. How they should be created, what privileges they should

enjoy, under what responsibilities they should act, and to what

restrictions they should be subject are questions which, as I observed

on a previous occasion, belong to the States to decide. Upon their

rights or the exercise of them the General Government can have no motive

to encroach. Its duty toward them is well performed when it refrains

from legislating for their special benefit, because such legislation

would violate the spirit of the Constitution and be unjust to other

interests; when it takes no steps to impair their usefulness, but so

manages its own affairs as to make it the interest of those institutions

to strengthen and improve their condition for the security and welfare

of the community at large. They have no right to insist on a connection

with the Federal Government, nor on the use of the public money for

their own benefit. The object of the measure under consideration is to

avoid for the future a compulsory connection of this kind. It proposes

to place the General Government, in regard to the essential points of

the collection, safe-keeping, and transfer of the public money, in a

situation which shall relieve it from all dependence on the will of

irresponsible individuals or corporations; to withdraw those moneys from

the uses of private trade and confide them to agents constitutionally

selected and controlled by law; to abstain from improper interference

with the industry of the people and withhold inducements to improvident

dealings on the part of individuals; to give stability to the concerns

of the Treasury; to preserve the measures of the Government from the

unavoidable reproaches that flow from such a connection, and the banks

themselves from the injurious effects of a supposed participation in the

political conflicts of the day, from which they will otherwise find it

difficult to escape.

These are my views upon this important subject, formed after careful

reflection and with no desire but to arrive at what is most likely

to promote the public interest. They are now, as they were before,

submitted with unfeigned deference for the opinions of others. It was

hardly to be hoped that changes so important on a subject so interesting

could be made without producing a serious diversity of opinion; but

so long as those conflicting views are kept above the influence of

individual or local interests, so long as they pursue only the general

good and are discussed with moderation and candor, such diversity is a

benefit, not an injury. If a majority of Congress see the public welfare

in a different light, and more especially if they should be satisfied

that the measure proposed would not be acceptable to the people, I shall

look to their wisdom to substitute such as may be more conducive to

the one and more satisfactory to the other. In any event, they may

confidently rely on my hearty cooperation to the fullest extent to

which my views of the Constitution and my sense of duty will permit.

It is obviously important to this branch of the public service and to

the business and quiet of the country that the whole subject should in

some way be settled and regulated by law, and, if possible, at your

present session. Besides the plans above referred to, I am not aware

that any one has been suggested except that of keeping the public money

in the State banks in special deposit. This plan is to some extent in

accordance with the practice of the Government and with the present

arrangements of the Treasury Department, which, except, perhaps, during

the operation of the late deposit act, has always been allowed, even

during the existence of a national bank, to make a temporary use of the

State banks in particular places for the safe-keeping of portions of the

revenue. This discretionary power might be continued if Congress deem it

desirable, whatever general system be adopted. So long as the connection

is voluntary we need, perhaps, anticipate few of those difficulties and

little of that dependence on the banks which must attend every such

connection when compulsory in its nature and when so arranged as to make

the banks a fixed part of the machinery of government. It is undoubtedly

in the power of Congress so to regulate and guard it as to prevent the

public money from being applied to the use or intermingled with the

affairs of individuals. Thus arranged, although it would not give to

the Government that entire control over its own funds which I desire to

secure to it by the plan I have proposed, it would, it must be admitted,

in a great degree accomplish one of the objects which has recommended

that plan to my judgment--the separation of the fiscal concerns of the

Government from those of individuals or corporations.

With these observations I recommend the whole matter to your

dispassionate reflection, confidently hoping that some conclusion may

be reached by your deliberations which on the one hand shall give

safety and stability to the fiscal operations of the Government, and

be consistent, on the other, with the genius of our institutions and

with the interests and wishes of the great mass of our constituents.

It was my hope that nothing would occur to make necessary on

this occasion any allusion to the late national bank. There are

circumstances, however, connected with the present state of its affairs

that bear so directly on the character of the Government and the welfare

of the citizen that I should not feel myself excused in neglecting to

notice them. The charter which terminated its banking privileges on the

4th of March, 1836, continued its corporate power two years more for

the sole purpose of closing its affairs, with authority "to use the

corporate name, style, and capacity for the purpose of suits for a final

settlement and liquidation of the affairs and acts of the corporation,

and for the sale and disposition of their estate--real, personal, and

mixed--but for no other purpose or in any other manner whatsoever." Just

before the banking privileges ceased, its effects were transferred by

the bank to a new State institution, then recently incorporated, in

trust, for the discharge of its debts and the settlement of its affairs.

With this trustee, by authority of Congress, an adjustment was

subsequently made of the large interest which the Government had in the

stock of the institution. The manner in which a trust unexpectedly

created upon the act granting the charter, and involving such great

public interests, has been executed would under any circumstances be a

fit subject of inquiry; but much more does it deserve your attention

when it embraces the redemption of obligations to which the authority

and credit of the United States have given value. The two years allowed

are now nearly at an end. It is well understood that the trustee has

not redeemed and canceled the outstanding notes of the bank, but has

reissued and is actually reissuing, since the 3d of March, 1836, the

notes which have been received by it to a vast amount. According to its

own official statement, so late as the 1st of October last, nineteen

months after the banking privileges given by the charter had expired, it

had under its control uncanceled notes of the late Bank of the United

States to the amount of $27,561,866, of which $6,175,861 were in actual

circulation, $1,468,627 at State bank agencies, and $3,002,390 _in

transitu_, thus showing that upward of ten millions and a half of the

notes of the old bank were then still kept outstanding.

The impropriety of this procedure is obvious, it being the duty of the

trustee to cancel and not to put forth the notes of an institution whose

concerns it had undertaken to wind up. If the trustee has a right to

reissue these notes now, I can see no reason why it may not continue

to do so after the expiration of the two years. As no one could have

anticipated a course so extraordinary, the prohibitory clause of the

charter above quoted was not accompanied by any penalty or other special

provision for enforcing it, nor have we any general law for the

prevention of similar acts in future.

But it is not in this view of the subject alone that your interposition

is required. The United States in settling with the trustee for their

stock have withdrawn their funds from their former direct liability to

the creditors of the old bank, yet notes of the institution continue

to be sent forth in its name, and apparently upon the authority of the

United States. The transactions connected with the employment of the

bills of the old bank are of vast extent, and should they result

unfortunately the interests of individuals may be deeply compromised.

Without undertaking to decide how far or in what form, if any, the

trustee could be made liable for notes which contain no obligation on

its part, or the old bank for such as are put in circulation after the

expiration of its charter and without its authority, or the Government

for indemnity in case of loss, the question still presses itself upon

your consideration whether it is consistent with duty and good faith on

the part of the Government to witness this proceeding without a single

effort to arrest it.

The report of the Commissioner of the General Land Office, which will

be laid before you by the Secretary of the Treasury, will show how the

affairs of that office have been conducted for the past year. The

disposition of the public lands is one of the most important trusts

confided to Congress. The practicability of retaining the title and

control of such extensive domains in the General Government, and at the

same time admitting the Territories embracing them into the Federal

Union as coequals with the original States, was seriously doubted by

many of our wisest statesmen. All feared that they would become a source

of discord, and many carried their apprehensions so far as to see in

them the seeds of a future dissolution of the Confederacy. But happily

our experience has already been sufficient to quiet in a great degree

all such apprehensions. The position at one time assumed, that the

admission of new States into the Union on the same footing with the

original States was incompatible with a right of soil in the United

States and operated as a surrender thereof, notwithstanding the terms of

the compacts by which their admission was designed to be regulated, has

been wisely abandoned. Whether in the new or the old States, all now

agree that the right of soil to the public lands remains in the Federal

Government, and that these lands constitute a common property, to be

disposed of for the common benefit of all the States, old and new.

Acquiescence in this just principle by the people of the new States has

naturally promoted a disposition to adopt the most liberal policy in the

sale of the public lands. A policy which should be limited to the mere

object of selling the lands for the greatest possible sum of money,

without regard to higher considerations, finds but few advocates. On the

contrary, it is generally conceded that whilst the mode of disposition

adopted by the Government should always be a prudent one, yet its

leading object ought to be the early settlement and cultivation of the

lands sold, and that it should discountenance, if it can not prevent,

the accumulation of large tracts in the same hands, which must

necessarily retard the growth of the new States or entail upon them

a dependent tenantry and its attendant evils.

A question embracing such important interests and so well calculated

to enlist the feelings of the people in every quarter of the Union has

very naturally given rise to numerous plans for the improvement of

the existing system. The distinctive features of the policy that has

hitherto prevailed are to dispose of the public lands at moderate

prices, thus enabling a greater number to enter into competition for

their purchase and accomplishing a double object--of promoting their

rapid settlement by the purchasers and at the same time increasing the

receipts of the Treasury; to sell for cash, thereby preventing the

disturbing influence of a large mass of private citizens indebted to

the Government which they have a voice in controlling; to bring them

into market no faster than good lands are supposed to be wanted for

improvement, thereby preventing the accumulation of large tracts in few

hands; and to apply the proceeds of the sales to the general purposes of

the Government, thus diminishing the amount to be raised from the people

of the States by taxation and giving each State its portion of the

benefits to be derived from this common fund in a manner the most quiet,

and at the same time, perhaps, the most equitable, that can be devised.

These provisions, with occasional enactments in behalf of special

interests deemed entitled to the favor of the Government, have in their

execution produced results as beneficial upon the whole as could

reasonably be expected in a matter so vast, so complicated, and so

exciting. Upward of 70,000,000 acres have been sold, the greater part of

which is believed to have been purchased for actual settlement. The

population of the new States and Territories created out of the public

domain increased between 1800 and 1830 from less than 60,000 to upward

of 2,300,000 souls, constituting at the latter period about one-fifth

of the whole people of the United States. The increase since can not

be accurately known, but the whole may now be safely estimated at

over three and a half millions of souls, composing nine States, the

representatives of which constitute above one-third of the Senate and

over one-sixth of the House of Representatives of the United States.

Thus has been formed a body of free and independent landholders with a

rapidity unequaled in the history of mankind; and this great result has

been produced without leaving anything for future adjustment between

the Government and its citizens. The system under which so much has

been accomplished can not be intrinsically bad, and with occasional

modifications to correct abuses and adapt it to changes of circumstances

may, I think, be safely trusted for the future. There is in the

management of such extensive interests much virtue in stability; and

although great and obvious improvements should not be declined, changes

should never be made without the fullest examination and the clearest

demonstration of their practical utility. In the history of the past we

have an assurance that this safe rule of action will not be departed

from in relation to the public lands; nor is it believed that any

necessity exists for interfering with the fundamental principles of the

system, or that the public mind, even in the new States, is desirous

of any radical alterations. On the contrary, the general disposition

appears to be to make such modifications and additions only as will the

more effectually carry out the original policy of filling our new States

and Territories with an industrious and independent population.

The modification most perseveringly pressed upon Congress, which has

occupied so much of its time for years past, and will probably do so

for a long time to come, if not sooner satisfactorily adjusted, is

a reduction in the cost of such portions of the public lands as are

ascertained to be unsalable at the rate now established by law, and a

graduation according to their relative value of the prices at which they

may hereafter be sold. It is worthy of consideration whether justice may

not be done to every interest in this matter, and a vexed question set

at rest, perhaps forever, by a reasonable compromise of conflicting

opinions. Hitherto, after being offered at public sale, lands have been

disposed of at one uniform price, whatever difference there might be in

their intrinsic value. The leading considerations urged in favor of the

measure referred to are that in almost all the land districts, and

particularly in those in which the lands have been long surveyed and

exposed to sale, there are still remaining numerous and large tracts of

every gradation of value, from the Government price downward; that these

lands will not be purchased at the Government price so long as better

can be conveniently obtained for the same amount; that there are large

tracts which even the improvements of the adjacent lands will never

raise to that price, and that the present uniform price, combined with

their irregular value, operates to prevent a desirable compactness of

settlements in the new States and to retard the full development of that

wise policy on which our land system is founded, to the injury not only

of the several States where the lands lie, but of the United States as

a whole.

The remedy proposed has been a reduction of the prices according to the

length of time the lands have been in market, without reference to any

other circumstances. The certainty that the efflux of time would not

always in such cases, and perhaps not even generally, furnish a true

criterion of value, and the probability that persons residing in the

vicinity, as the period for the reduction of prices approached, would

postpone purchases they would otherwise make, for the purpose of

availing themselves of the lower price, with other considerations of a

similar character, have hitherto been successfully urged to defeat the

graduation upon time.

May not all reasonable desires upon this subject be satisfied without

encountering any of these objections? All will concede the abstract

principle that the price of the public lands should be proportioned to

their relative value, so far as can be accomplished without departing

from the rule heretofore observed requiring fixed prices in cases of

private entries. The difficulty of the subject seems to lie in the

mode of ascertaining what that value is. Would not the safest plan

be that which has been adopted by many of the States as the basis of

taxation--an actual valuation of lands and classification of them into

different rates? Would it not be practicable and expedient to cause the

relative value of the public lands in the old districts which have been

for a certain length of time in market to be appraised and classed into

two or more rates below the present minimum price by the officers now

employed in this branch of the public service or in any other mode

deemed preferable, and to make those prices permanent if upon the coming

in of the report they shall prove satisfactory to Congress? Could not

all the objects of graduation be accomplished in this way, and the

objections which have hitherto been urged against it avoided? It would

seem to me that such a step, with a restriction of the sales to limited

quantities and for actual improvement, would be free from all just

exception.

By the full exposition of the value of the lands thus furnished and

extensively promulgated persons living at a distance would be informed

of their true condition and enabled to enter into competition with those

residing in the vicinity; the means of acquiring an independent home

would be brought within the reach of many who are unable to purchase at

present prices; the population of the new States would be made more

compact, and large tracts would be sold which would otherwise remain on

hand. Not only would the land be brought within the means of a larger

number of purchasers, but many persons possessed of greater means would

be content to settle on a larger quantity of the poorer lands rather

than emigrate farther west in pursuit of a smaller quantity of better

lands. Such a measure would also seem to be more consistent with the

policy of the existing laws--that of converting the public domain into

cultivated farms owned by their occupants. That policy is not best

promoted by sending emigration up the almost interminable streams of

the West to occupy in groups the best spots of land, leaving immense

wastes behind them and enlarging the frontier beyond the means of the

Government to afford it adequate protection, but in encouraging it to

occupy with reasonable denseness the territory over which it advances,

and find its best defense in the compact front which it presents to

the Indian tribes. Many of you will bring to the consideration of the

subject the advantages of local knowledge and greater experience, and

all will be desirous of making an early and final disposition of every

disturbing question in regard to this important interest. If these

suggestions shall in any degree contribute to the accomplishment of

so important a result, it will afford me sincere satisfaction.

In some sections of the country most of the public lands have been sold,

and the registers and receivers have very little to do. It is a subject

worthy of inquiry whether in many cases two or more districts may not

be consolidated and the number of persons employed in this business

considerably reduced. Indeed, the time will come when it will be the

true policy of the General Government, as to some of the States, to

transfer to them for a reasonable equivalent all the refuse and unsold

lands and to withdraw the machinery of the Federal land offices

altogether. All who take a comprehensive view of our federal system and

believe that one of its greatest excellences consists in interfering as

little as possible with the internal concerns of the States look forward

with great interest to this result.

A modification of the existing laws in respect to the prices of the

public lands might also have a favorable influence on the legislation

of Congress in relation to another branch of the subject. Many who have

not the ability to buy at present prices settle on those lands with

the hope of acquiring from their cultivation the means of purchasing

under preemption laws from time to time passed by Congress. For this

encroachment on the rights of the United States they excuse themselves

under the plea of their own necessities; the fact that they dispossess

nobody and only enter upon the waste domain: that they give additional

value to the public lands in their vicinity, and their intention

ultimately to pay the Government price. So much weight has from time to

time been attached to these considerations that Congress have passed

laws giving actual settlers on the public lands a right of preemption to

the tracts occupied by them at the minimum price. These laws have in all

instances been retrospective in their operation, but in a few years

after their passage crowds of new settlers have been found on the public

lands for similar reasons and under like expectations, who have been

indulged with the same privilege. This course of legislation tends to

impair public respect for the laws of the country. Either the laws to

prevent intrusion upon the public lands should be executed, or, if that

should be impracticable or inexpedient, they should be modified or

repealed. If the public lands are to be considered as open to be

occupied by any, they should by law be thrown open to all. That which is

intended in all instances to be legalized should at once be made legal,

that those who are disposed to conform to the laws may enjoy at least

equal privileges with those who are not. But it is not believed to be

the disposition of Congress to open the public lands to occupancy

without regular entry and payment of the Government price, as such a

course must tend to worse evils than the credit system, which it was

found necessary to abolish.

It would seem, therefore, to be the part of wisdom and sound policy

to remove as far as practicable the causes which produce intrusions

upon the public lands, and then take efficient steps to prevent them

in future. Would any single measure be so effective in removing all

plausible grounds for these intrusions as the graduation of price

already suggested? A short period of industry and economy in any part of

our country would enable the poorest citizen to accumulate the means to

buy him a home at the lower prices, and leave him without apology for

settling on lands not his own. If he did not under such circumstances,

he would enlist no sympathy in his favor, and the laws would be readily

executed without doing violence to public opinion.

A large portion of our citizens have seated themselves on the public

lands without authority since the passage of the last preemption law,

and now ask the enactment of another to enable them to retain the lands

occupied upon payment of the minimum Government price. They ask that

which has been repeatedly granted before. If the future may be judged of

by the past, little harm can be done to the interests of the Treasury

by yielding to their request. Upon a critical examination it is found

that the lands sold at the public sales since the introduction of cash

payments, in 1820, have produced on an average the net revenue of only

6 cents an acre more than the minimum Government price. There is no

reason to suppose that future sales will be more productive. The

Government, therefore, has no adequate pecuniary interest to induce it

to drive these people from the lands they occupy for the purpose of

selling them to others.

Entertaining these views, I recommend the passage of a preemption law

for their benefit in connection with the preparatory steps toward the

graduation of the price of the public lands, and further and more

effectual provisions to prevent intrusions hereafter. Indulgence to

those who have settled on these lands with expectations that past

legislation would be made a rule for the future, and at the same time

removing the most plausible ground on which intrusions are excused and

adopting more efficient means to prevent them hereafter, appears to me

the most judicious disposition which can be made of this difficult

subject. The limitations and restrictions to guard against abuses in

the execution of a preemption law will necessarily attract the careful

attention of Congress, but under no circumstances is it considered

expedient to authorize floating claims in any shape. They have been

heretofore, and doubtless would be hereafter, most prolific sources of

fraud and oppression, and instead of operating to confer the favor of

the Government on industrious settlers are often used only to minister

to a spirit of cupidity at the expense of the most meritorious of that

class.

The accompanying report of the Secretary of War will bring to your view

the state of the Army and all the various subjects confided to the

superintendence of that officer.

The principal part of the Army has been concentrated in Florida, with a

view and in the expectation of bringing the war in that Territory to a

speedy close. The necessity of stripping the posts on the maritime and

inland frontiers of their entire garrisons for the purpose of assembling

in the field an army of less than 4,000 men would seem to indicate the

necessity of increasing our regular forces; and the superior efficiency,

as well as greatly diminished expense of that description of troops,

recommend this measure as one of economy as well as of expediency.

I refer to the report for the reasons which have induced the Secretary

of War to urge the reorganization and enlargement of the staff of the

Army, and of the Ordnance Corps, in which I fully concur.

It is not, however, compatible with the interests of the people to

maintain in time of peace a regular force adequate to the defense of

our extensive frontiers. In periods of danger and alarm we must rely

principally upon a well-organized militia, and some general arrangement

that will render this description of force more efficient has long

been a subject of anxious solicitude. It was recommended to the First

Congress by General Washington, and has been since frequently brought to

your notice, and recently its importance strongly urged by my immediate

predecessor. The provision in the Constitution that renders it necessary

to adopt a uniform system of organization for the militia throughout

the United States presents an insurmountable obstacle to an efficient

arrangement by the classification heretofore proposed, and I invite your

attention to the plan which will be submitted by the Secretary of War,

for the organization of volunteer corps and the instruction of militia

officers, as more simple and practicable, if not equally advantageous,

as a general arrangement of the whole militia of the United States.

A moderate increase of the corps both of military and topographical

engineers has been more than once recommended by my predecessor, and my

conviction of the propriety, not to say necessity, of the measure, in

order to enable them to perform the various and important duties imposed

upon them, induces me to repeat the recommendation.

The Military Academy continues to answer all the purposes of its

establishment, and not only furnishes well-educated officers to the

Army, but serves to diffuse throughout the mass of our citizens

individuals possessed of military knowledge and the scientific

attainments of civil and military engineering. At present the cadet is

bound, with consent of his parents or guardians, to remain in service

five years from the period of his enlistment, unless sooner discharged,

thus exacting only one year's service in the Army after his education is

completed. This does not appear to me sufficient. Government ought to

command for a longer period the services of those who are educated at

the public expense, and I recommend that the time of enlistment be

extended to seven years, and the terms of the engagement strictly

enforced.

The creation of a national foundry for cannon, to be common to the

service of the Army and Navy of the United States, has been heretofore

recommended, and appears to be required in order to place our ordnance

on an equal footing with that of other countries and to enable that

branch of the service to control the prices of those articles and

graduate the supplies to the wants of the Government, as well as to

regulate their quality and insure their uniformity. The same reasons

induce me to recommend the erection of a manufactory of gunpowder, to

be under the direction of the Ordnance Office. The establishment of a

manufactory of small arms west of the Alleghany Mountains, upon the

plan proposed by the Secretary of War, will contribute to extend

throughout that country the improvements which exist in establishments

of a similar description in the Atlantic States, and tend to a much more

economical distribution of the armament required in the western portion

of our Union.

The system of removing the Indians west of the Mississippi, commenced

by Mr. Jefferson in 1804, has been steadily persevered in by every

succeeding President, and may be considered the settled policy of the

country. Unconnected at first with any well-defined system for their

improvement, the inducements held out to the Indians were confined

to the greater abundance of game to be found in the West; but when

the beneficial effects of their removal were made apparent a more

philanthropic and enlightened policy was adopted in purchasing their

lands east of the Mississippi. Liberal prices were given and provisions

inserted in all the treaties with them for the application of the funds

they received in exchange to such purposes as were best calculated to

promote their present welfare and advance their future civilization.

These measures have been attended thus far with the happiest results.

It will be seen by referring to the report of the Commissioner of Indian

Affairs that the most sanguine expectations of the friends and promoters

of this system have been realized. The Choctaws, Cherokees, and other

tribes that first emigrated beyond the Mississippi have for the most

part abandoned the hunter state and become cultivators of the soil.

The improvement in their condition has been rapid, and it is believed

that they are now fitted to enjoy the advantages of a simple form of

government, which has been submitted to them and received their

sanction; and I can not too strongly urge this subject upon the

attention of Congress.

Stipulations have been made with all the Indian tribes to remove them

beyond the Mississippi, except with the bands of the Wyandots, the Six

Nations in New York, the Menomonees, Munsees, and Stockbridges in

Wisconsin, and Miamies in Indiana. With all but the Menomonees it is

expected that arrangements for their emigration will be completed the

present year. The resistance which has been opposed to their removal by

some of the tribes even after treaties had been made with them to that

effect has arisen from various causes, operating differently on each

of them. In most instances they have been instigated to resistance

by persons to whom the trade with them and the acquisition of their

annuities were important, and in some by the personal influence of

interested chiefs. These obstacles must be overcome, for the Government

can not relinquish the execution of this policy without sacrificing

important interests and abandoning the tribes remaining east of the

Mississippi to certain destruction.

The decrease in numbers of the tribes within the limits of the States

and Territories has been most rapid. If they be removed, they can be

protected from those associations and evil practices which exert so

pernicious and destructive an influence over their destinies. They

can be induced to labor and to acquire property, and its acquisition

will inspire them with a feeling of independence. Their minds can be

cultivated, and they can be taught the value of salutary and uniform

laws and be made sensible of the blessings of free government and

capable of enjoying its advantages. In the possession of property,

knowledge, and a good government, free to give what direction they

please to their labor, and sharers in the legislation by which their

persons and the profits of their industry are to be protected and

secured, they will have an ever-present conviction of the importance of

union and peace among themselves and of the preservation of amicable

relations with us. The interests of the United States would also be

greatly promoted by freeing the relations between the General and State

Governments from what has proved a most embarrassing incumbrance by a

satisfactory adjustment of conflicting titles to lands caused by the

occupation of the Indians, and by causing the resources of the whole

country to be developed by the power of the State and General

Governments and improved by the enterprise of a white population.

Intimately connected with this subject is the obligation of the

Government to fulfill its treaty stipulations and to protect the Indians

thus assembled "at their new residences from all interruptions and

disturbances from any other tribes or nations of Indians or from any

other person or persons whatsoever," and the equally solemn obligation

to guard from Indian hostility its own border settlements, stretching

along a line of more than 1,000 miles. To enable the Government to

redeem this pledge to the Indians and to afford adequate protection to

its own citizens will require the continual presence of a considerable

regular force on the frontiers and the establishment of a chain of

permanent posts. Examinations of the country are now making, with a view

to decide on the most suitable points for the erection of fortresses and

other works of defense, the results of which will be presented to you by

the Secretary of War at an early day, together with a plan for the

effectual protection of the friendly Indians and the permanent defense

of the frontier States.

By the report of the Secretary of the Navy herewith communicated it

appears that unremitted exertions have been made at the different

navy-yards to carry into effect all authorized measures for the

extension and employment of our naval force. The launching and

preparation of the ship of the line _Pennsylvania_ and the complete

repairs of the ships of the line _Ohio, Delaware_, and _Columbus_ may

be noticed as forming a respectable addition to this important arm

of our national defense. Our commerce and navigation have received

increased aid, and protection during the present year. Our squadrons in

the Pacific and on the Brazilian station have been much increased, and

that in the Mediterranean, although small, is adequate to the present

wants of our commerce in that sea. Additions have been made to our

squadron on the West India station, where the large force under

Commodore Dallas has been most actively and efficiently employed in

protecting our commerce, in preventing the importation of slaves, and

in cooperating with the officers of the Army in carrying on the war

in Florida.

The satisfactory condition of our naval force abroad leaves at our

disposal the means of conveniently providing for a home squadron

for the protection of commerce upon our extensive coast. The amount

of appropriations required for such a squadron will be found in the

general estimates for the naval service for the year 1838.

The naval officers engaged upon our coast survey have rendered important

service to our navigation. The discovery of a new channel into the

harbor of New York, through which our largest ships may pass without

danger, must afford important commercial advantages to that harbor and

add greatly to its value as a naval station. The accurate survey of

Georges Shoals, off the coast of Massachusetts, lately completed, will

render comparatively safe a navigation hitherto considered dangerous.

Considerable additions have been made to the number of captains,

commanders, lieutenants, surgeons, and assistant surgeons in the Navy.

These additions were rendered necessary by the increased number of

vessels put in commission to answer the exigencies of our growing

commerce.

Your attention is respectfully invited to the various suggestions of the

Secretary for the improvement of the naval service.

The report of the Postmaster-General exhibits the progress and condition

of the mail service. The operations of the Post-Office Department

constitute one of the most active elements of our national prosperity,

and it is gratifying to observe with what vigor they are conducted. The

mail routes of the United States cover an extent of about 142,877 miles,

having been increased about 37,103 miles within the last two years. The

annual mail transportation on these routes is about 36,228,962 miles,

having been increased about 10,359,476 miles within the same period. The

number of post-offices has also been increased from 10,770 to 12,099,

very few of which receive the mails less than once a week, and a large

portion of them daily. Contractors and postmasters in general are

represented as attending to their duties with most commendable zeal and

fidelity. The revenue of the Department within the year ending on the

30th of June last was $4,137,056.59, and its liabilities accruing within

the same time were $3,380,847.75. The increase of revenue over that of

the preceding year was $708,166.41.

For many interesting details I refer you to the report of the

Postmaster-General, with the accompanying papers, Your particular

attention is invited to the necessity of providing a more safe and

convenient building for the accommodation of that Department.

I lay before Congress copies of reports submitted in pursuance of

a call made by me upon the heads of Departments for such suggestions

as their experience might enable them to make as to what further

legislative provisions may be advantageously adopted to secure the

faithful application of public moneys to the objects for which they

are appropriated, to prevent their misapplication or embezzlement by

those intrusted with the expenditure of them, and generally to increase

the security of the Government against losses in their disbursement.

It is needless to dilate on the importance of providing such new

safeguards as are within the power of legislation to promote these

ends, and I have little to add to the recommendations submitted in the

accompanying papers.

By law the terms of service of our most important collecting and

disbursing officers in the civil departments are limited to four years,

and when reappointed their bonds are required to be renewed. The safety

of the public is much increased by this feature of the law, and there

can be no doubt that its application to all officers intrusted with the

collection or disbursement of the public money, whatever may be the

tenure of their offices, would be equally beneficial. I therefore

recommend, in addition to such of the suggestions presented by the heads

of Departments as you may think useful, a general provision that all

officers of the Army or Navy, or in the civil departments, intrusted

with the receipt or payment of public money, and whose term of service

is either unlimited or for a longer time than four years, be required to

give new bonds, with good and sufficient sureties, at the expiration of

every such period.

A change in the period of terminating the fiscal year, from the 1st

of October to the 1st of April, has been frequently recommended, and

appears to be desirable.

The distressing casualties in steamboats which have so frequently

happened during the year seem to evince the necessity of attempting

to prevent them by means of severe provisions connected with their

customhouse papers. This subject was submitted to the attention of

Congress by the Secretary of the Treasury in his last annual report,

and will be again noticed at the present session, with additional

details. It will doubtless receive that early and careful consideration

which its pressing importance appears to require.

Your attention has heretofore been frequently called to the affairs of

the District of Columbia, and I should not again ask it did not their

entire dependence on Congress give them a constant claim upon its

notice. Separated by the Constitution from the rest of the Union,

limited in extent, and aided by no legislature of its own, it would seem

to be a spot where a wise and uniform system of local government might

have been easily adopted. This District has, however, unfortunately

been left to linger behind the rest of the Union. Its codes, civil

and criminal, are not only very defective, but full of obsolete or

inconvenient provisions. Being formed of portions of two States,

discrepancies in the laws prevail in different parts of the territory,

small as it is; and although it was selected as the seat of the General

Government, the site of its public edifices, the depository of its

archives, and the residence of officers intrusted with large amounts of

public property and the management of public business, yet it has never

been subjected to or received that special and comprehensive legislation

which these circumstances peculiarly demand. I am well aware of the

various subjects of greater magnitude and immediate interest that press

themselves on the consideration of Congress, but I believe there is not

one that appeals more directly to its justice than a liberal and even

generous attention to the interests of the District of Columbia and

a thorough and careful revision of its local government.

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