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se? that must have been fatal io the peace o" fc^^tho two countries. I look forward anxiously to a period when nil the transactions which have grown out O titis condition'of our affairs, nod which have been made tho subjects of complaint and remonstrance by the two Governments respectively, shall be fuWy examiner)^and the proper satisfaction given whom it is don from either shto. -Nothing hatroccurred o disturb tho bar- \ tnon v of our intercourse wi'h Austria^ Belpi urtfc-Denmarff, Franco, Nnph's lS)rtu?ul, IVrrssn, Russia, or Sfrcedun. Tire iutcmul state?>/(Spain has sensibly improved, and n velt grounded hope exists that the return of k >11 iL' ii! tA I hp l>POnl/> ra ... rmn. ! n I' IVJ4WIW ' "* %*??H * VU1J- | ^ irv theirfonner^rospiTi'V, "and enable the j liovprnmont fo fu'fil ail i'j obligations' at ! home and abroad. Tfco Oovernment ofi HA Portugal, I have rho sataction to state, I ^^ Vltns paid?n fuftVurttfrye^fh and lust lostal- j |?-Vnt du?f to cmr mirzett^ for the claims em- | \.ict d in the sel?Wj&nt *made ith it on ! HHk t third of March% 13437. HB^Afrv hoforo you .treaties of commerce | H^HBHg^atod with the Kings of Sardinia and PpgH^tiv*ft3therla w(st the ratifications of which have been 'iXohanged since the adjournment of Congress. The liberal principles of these tn?at?rs w?ll recommend th?*nr\ to your approbation. That wi'h S.trlinia is thu* tir-t treaty of commerce forme I by that kingdom, and it will, I trust, answer the expectations of the preset.t sovereign, by aidiug the development ofihe resoureos of his country, and stimulating the enterprise of Ins peopl'*, That with the Netherlands happily terminates a long existing subject of dispute, and removes from our future cornrneminl intercourse all apprehension of em tnrrasmcnt. The K'ngof the Netherlands h 13 a'so, in further illustration of Ins char? tor justice, and of his desiroto remove rvf>ry cans'? of dissatisfaction, made compension for an American vessel enpured in l8dt) by a French privateer, and carried j into Cur :con, where the proceeds vve.e ap- j propriuted to the use of the colony, then and ) for a short lime after, under the dominion ol I Upland. The 4<'adi of the late Sultan has produced no alteration with our relations with Turkey. Our newlv appointed Minister Resident has reached Constantinople, and I h'iv.? received assurances from the present UuN-r ilnt the obligations of our treaty, and [ those of friendship, will be fulfilled by h rn- ! s'.lf in tho same spirit that actuated ins il- ' tu*triou* firhcr. I regret to bo obliged to inform you thai no convention for the settlement of the cla'ms of our citizens upon Mexico has yet been rat.tied by the Government of tint country. The first convention formed for that purpose was not presented by the ' President of M< x1co for the approbation ol its Congress, from a belief that the King of rrussin, the arbitrator in cast) or disagreement in tlie joint commission to be appoint. * cl by the United States anil Mexico, would not consent to lake upon himself ilmi friendly office. Although not entirely satisfied with the Course pursued by Mexico, I f it no hesitation in receiving the most concilia (ory spirii tiie explanation offered, and also cheerfully consented to a new convention, in ofd*r lo-nrraitfli; the payments proposed to be made to oar e'tr/.< ns, in n mano'-r r which, wailo equally just to them, was deemed less ovierous and inconvenient to. v V,e mm n^povernmen\ Relying con-| ^ Vnll)' hpttf) the intentions of that Govern- j ^ was directed to repair to J Mexico, and diplomatic intercourse has I . been resumed between the two countries. The new convention has, he informs us, j ^ been recently submitted by tho President j of that Rep Alio to its Congress, under dr. ! eumsiances which promise a speedy ratifi- [ ca'io#; iyresult which I cannot aliow my. doubt. I ostr ictions have been given to the com Commissioner of iho Unite ! States under our Convention with Tex?s, for the demarcation of the hne which separates us from thai R-'puhHc. Tne commissioners of bo l> Government mot in New Orleans in An. jiust last. *The joint commission was or-1 gao led. and adjourned 10 convene at t'esame placeoi>tJ^e twelfth of October. Ii ?s pr? s'tmed to be now in the perfurtmn'o of its duties. The new Government of Texas, has ?h?.vt) jrs desire to cultivate fr en<l!y relations wi h u*, by n prompt reparation for injuries com plained of in lite cases of two vessels of the United Suites. With Central America, a convent'on has been concluded for the renewal of its h>r mer treaty with toe United S.ates. This was not ratified before the departure of our Charge d'AffUirs from that counry, and the copy of it brought by Him was not received before the adjournment of the Senate at the | last session. In the mean while, the pprod j Jimfred for the exchange of rat ficatious having expired, I deemed it expedient, in consequence of the death of iIkj Charge d'AtFairs, tp s?*nd a special agent to Central * Anacrica, to close the affairs of our ncssion there, and to arrange with the Government, an extension of the time for lite exchange of ratifications. Th?.< commission crented by the States, jvhich formerly composed the Republic of Colombia, for adjusting the claims against that Governmen', has, by a very unexpected construction of the treaty under wh.cli it 1 acts, decided that no provision wus nnJc lot those claims of Citizens of the United ' S ates, which arose from captures by Co. 1 lombian privateers, and w.ro adjudged 1 against the claimants in the judicial tribu. nals. This decision will compel the United States to apply to the several Governments ! formerly united, for redress. With all these J ?New Gmnada, Venezuela, and Ecuador, I n perfectly good understanding exists. Our treaty with Venezuela, is faithfully carried 1 into execution, and.that country, in the enjoy. I ment of tranquility, is gradually advancing in 1 prosperity, under the guidance of its present <li.stingui-.iied President, General Pacz.? ^tfttkj^^cuator, a liberal commercial coven. been concluded, which will Senate aft early p?EB??pesM?g?ftaHM?kmw i 4L. With the great American Empire of Brftz i our relations continue unchanged, ns does our friendly intercourse with t; e other Governments of South America?-the Argentine Republic, and hie R publics of Uruguay, Chili, Peru rtfod Bolivia. "Tne dlssoJu'ion of tb^Peru-Bolivian Confederation may occussfoh som t&mponry iuron vrnience to our c tizens in that quarter, but the-obligations on*the new Goveinrnents wtiich have arisen out of that Conlederut.ou to observe its treaty sipulations, will no doubt be soon understood, and it is pre. suin- d that no indisposition will exist to fulfil those which it contracted with ihe United Suites. Tj?e financial operations of the Government during the present year have, I am happy to say, been very successful. " T- e difficulties under which the Treasury Departnient has labored from knotvn defects in the existing laws relative to the safe k?*epfng of the public moneys,, aggravated by the suspension of specie payments by several ol the hanks ho ding public deposits, or indebted to public officers for notes received in payment of public dues, have | been surmounted :o a very gratifying ex. tent. Tae f rge curr?*nt expenditures have been punctually met, and the .faith of the Government in all its pecuniary co ccrus has been S Tupuously maintained. , The nineteen ?n:ll oris of Treasury notes authorized by, the act ol Congress of 1837, and Hie modifications thereof, with a view to the indulgence of men hants on their du ~~ "" O "" ty bonds, and of the deposite banks in the payment of public mowys held by them, havii been so punctually redeemed us to leave loss li in the original ten millions outstanding a: any one time, and the wnole amount unredeemed now falls short of throe millions. Of these the chief portion is not due till next year, and the whole would have been already extinguished could the Treasury have realized the payments due to it from the banks. If those due from them next year shall be punctually made, and if Congress shall keep the appropriations within the estimates, there is every reason to believe that all the outstanding Treasury notes can be redeemed, and the ordinary expenses defrayed, without impossing on the people any additional burden, eitherol lonis, or increased taxes. To avoi' this, and to keep the cxpendi-, tures within roosonahie bounds, is a duty, socon J only in importance to the preservation of our nation*! character, and the protection ufour citizens in their civil and pol tic.al rights. The creation, ui time of p- aee, of " debt likely 10 become permanent, is an evl f ?r which there is no equivalent. The rapidity will which many of th : States are apparently approaching to this conditi o, ad monishes us of our own du ie.s, in ? manner 100 impress ve to be d sr -garb d, One, not the least important, is 10 keep the Federal Governm'-nt always in a coudi ion to dis charge, w til case and vigor, its highest functions, should their exercise be required f?y any sudden conjuncture of public affurs ?a condition to which wc are always exposed, and which may occur when it is iiuJisnensablo that i s fi.i inees shoul 1 b i untrammelled, mid its resources, as far a* practicable, unincumbered. No circum. stance could present greater obstacles to the accomplishment of these vitally important objects, than the creation of an onerous national debt. Our own exp-ripnee, ami also tint of other nations, have demonstri ted ibe unavoidable au<J fearful rapidity wit > which a public debt is increased, when the Government has surrendered isolf'o the ruinous practice of supplying its supposed necessities by n 4w loans. The struggle, therefore, on our part, to b" successful, must be made at tie* t r tsb.hol J. To m ike our odor s effective, severe economy is necessary. This is the surest provi-uon for the naionai wolfare ; and it is, at the same litne, the best preservative of lite principles it which our insti'utions rest. Smpieity and economy in the affairs State have i.ever failed to chasten and invigorate Rc publican principles, while these have been as surely subverto J by national prrdigal ty, under whatever specious pretext it may have been in reduced or foster* d. '? > : i? ?i^?. i IIC5H V'Wll^iU^raitim^ > I#?i HJ.-M uji'fii i p- opl'J who lutve never been inn tentive to the effect oc fieii* policy upon the institutions liiey have created tor themselves; but at the present moment file'r force is augmented by lite necessity whic h a d 'cr asi ig revenue must impose. The check lately g ven to importations of articles subject to duties, I he derangements in the opera ions of internal trade, and especially tho re luc tion gndua ly taking place m our tuiiffol duti s. all tend materially to lessen our receipts; indtcd i is probable the diminution resulting from the last cause alone, will not fall short of five? millions of dollars in the year 1842, as the final reduction of'nll duties to t wenty per cent, then takes effect. Tue whole revenue then accruing from the cuv .oms, and from the sales of public lands, it not more, will undoubedly be wanted to defray the necessary expenses of the Government under the most prudent administration of i s atFuirs. These are circumstances (!%.?? imnruo hf? nf rM'irl rpnnomv ni l. w r. -- ? and require its prompt and constant ex- rcise. With the Legislature rest ;lie power and duty of so adjusting the public exnendi ure as to promo e this end. B> tho pro. visions of the Constitution, it is only in consequence ofappropia ions made by |aw, li.it money can be drawn from tho T eas., ury; no instancu Ins occurred since tlio establishment of the Government in which the Executive, though n component part of the Legisla ive power, has in'erpos.'d an oh. jection to an appropriation biil on the sole ground of its extravagance. His duty in this respect has been considered fulfilled bv < requesting such appropriations only as the public service may be reason .bly expect'-d i ;o require. In the prcasant earnest direc. < ion of he public mtnd towards his subject, i ioth the Execu ive and the Legislature have | widence ofthe strict responsibility to which i .hey will bo held ; and while I am conscous t 5f my own anxious efforts to perform with i fidelity this portion of my public functions, ( it is a satisfaction to me to be able to count on a cordial Co-operation from you. At the time I entered upon my present duties, our ordinary disburden) Mits-?without uiclu lino 11ioso on accoon. of t ie public debt, the pos: office, atnl the trus funds in charge of thu Governtneni?hid hon largely ncreaged by appropr a ions tor the removal of iii> Indians, for repelling ludi m hostilities^ and for other less organ* expenses which grew ou' of an overflow i.ig Treasury . In lependent of the redemption of the public debt and trusts, the gro.saexpnditures of seventeen and eighteen millions in 1834 and 1835 had, by ti?ese cius-s, swell* od to twenty nine millions in 1836 ; and the appropria ions for 1837. ma le previously io the4thof March, cuusedlhe expenditure to rise to the very large amount of thirty-three [ millions. We were enablijd during the year 1838, notwithstanding the c-?i):mu *il< e of our Indian embarrassments, somewhat o reduce this amount { nnd that for th present year, 1839. will not in all probability exceed twenty-si millions?or s:x millions less ilun it *as last year. W.tUa determ nation so far as dep nds on inn to cont nue this reduction. I have d< rented the estimates of 1840 to be subjected to the severest scrumy, and to be limited to the ah solute requirements of the ptihli service. 'I Imu will tip follini !? ?< Si.ill the f'XDCII'Ji* tur?'S of 1839 by over five millions of do. lurs. The precautionary measures wliicli will be recommended by the Secretary of the Treasury, to protect faithfully ill" public credit under the fluctua'ions ??nd eoutingeuc p.h to which our reccpts and expenditures are exposed, and espccidly m a eommer. cial crisis like die present, uro commended to your early detention. On a foimer ocasion your attention was invited to various considerations >n sup port of a pre-ernp'ioii law in behalf of the settlers on the publ e I rids ; and also of a I iw graduating :h prices for su? h lauds as had long been in the market unsold, in con-^ S' q'inie? of jh.'ir inferior qual'ty. The execution of die aci which was passed on the first subject Iris been at ended well the liappi st consequences, in quieting till s. and & fining improvements to the industrious ; und it bag also, to a very graii'ying ex'en', been exempt from the frauds which were practised under previous pre-emption laws. It has, at the s one time, as was an'icipa-| ted, contribute I liberally during the present year to lie receipts of the Tp'asuiy. The passage of a Gradu idon Law, with the Guards before recommended, would als ). I am o -rsuaded. add considerably to tlif revenue for several years, anil prove in other resjiec.s jus' nod beneficial. Your early consideration of the subject, is therefore, once more earnestly request, ed. Tae present condition of the defences of our principal seaports and navy yards, as r* pf 'S Mit d by the accompanying report of the Secretary of War, calls for the early and serious a tention of Congress; and, as connecting itself intimately writ tuis subject, Icmnot recointn n J too s rongly to your| consideration, die pi in submitted bv tnat | offi *er, f.?r the organization of the iniiiiia of the United States In conformity widithe expressed wishes o Co; gr ss, an attempt was ni i le til Mr 8, ring 10 terminate the Florida W r by ne* gotia ion. It is to he regretted that tucs'* tiu rn.?ie mtontions slioul I h ive been frustrated, and lint the eiFort to bring these un happy difficulties to a salisfac ory conclusion should have fa led* But, aferenering into solemn engagements with the Com in in ling General, d? Indians, w.ihou: any provo-'u ion, recommenced their acts of treachery and muider. Tue renewal ol tiostilities in that Territory, renders it necessary that I sh ?u!d reccommend to your fiVorahle consider.il on. t ie tdan vvnich will '-e submit cd to vhi bv tin Seroary c?f War, in order to rumblet nit department io | con'luet f!|t?rn to a successful iss e. II iving haJ in) opportunity of personally inspecting a portion of tne troops during the l ist summer, it gives me pleasure 'o bear tesioiony to I'm su-'coss of tin; < flbrt to improve their discipline, by keeping tlx rn tog ih' r in as I r.'e bodies as the nature of our service will permit. I recommend, tln-r fori;, tint commodious and permanent barracks be constructed at tlie Severn1 poets designahd by die Secretary of ?Var.? Notwithstanding the high s'ato of their di5? cipline and excellent police, the "vils resulting to the service,' from the defi.ueriey of company offieers, were v? rv apparent, and I recommend tlmf the start*ollicers he permanently separated fro n lit'* li c. The navy has been usefully and honorably employed in protecting the lights and property of our citiz ns, wh?T< vcr the condition of affairs seemed to require its presence. Wall the eveeri'inn r?f /inn iik num. where ! an ou rig , accompanied l?v murder, was committed on a vessel of the United States while engaged in a lawful commerce, nothing is known to liuve occurred to impede or molest the enterprise of our citizens ?n hat element where i? is so signally display. ' d. On learning this daring act of piracy. Commodore lined proceeded immediaely 'o ihe spot, and receiving no satisfaction, cither in ttie surrender of the murdt rors or he restoration of t ie plundered property, inflicted severe and merited chastisement on the barhanans. It will he seen hy the report of the Secretary of'hit N ivy respecting the disposition of our snips of war, that it has bf?en deemed necessary to sia'ion a competent force on i the coast of Africa, to prevent a fmudu'ent use of our fl ig b\ foreigners. Recent cxo- rience has shown that the provisions in our existing laws \vhi?*li relate o the sale and transfer of American ves. sols wutlo abroad, are extremely d fective. Advantage has been taken of these defects to give to v<-sse:s wholly belonging to foreigners, and navigating the oi ?-ati. an appa. rent American ownership, i liis character ins been so well stimulated ?,s lo aflbrd liem compara ive security in prosecuting hu slave trade, a traffic ermdiatieally delounc'ed in our statutes, regarded with a b effectual suppression is no where more sincereiy desired than in the Uui'ed States. Tnese cir dmstances make it prop- r to vecomniend to your early au? n ion a careful r vision of these laws, so dial, wituout im petting the freedom and facilities of our navigation, or impairing an important branch of our industry connected aitb ii, the in egrity anil honor of our fl?g inny b careluily prcs rved. lufoimotion derived from our Consul at Havana, showing ill necessity of this, was communicated to a committee of lac Sen ue near the close of the last session, bu. too late, as it appeared, to be acted upon. It will be brought to your notice bv the proper department, wi h additional communications from other sour* j ces. The latest accounts from the Exploring Expedition reprs'-ni it as proceeding successfully in i ii objects, and promising resul s no less useful to trade and navigation ih in to science. The extent of post roads covered by mail s- rvice on the firs; July last, was about j 133 991 mil s, and tlie rale of annual .runs* portation upon them 34.496.878 miles.? Th?- numh'T of post offices on that d:iy was 12 760, and on the thirtieth ultimo, 13,028. J The revenue of the Pos* Office D*partI moul for the year en ting wiili the 30lh ol June last, was ?4 476,639, exnibi ing an ncrense over the proceeding year o! $241,560. Tee engagmnents and I?mI?i1 itie.s of tin? Department, lor tiie same period, are ?4.024,110. Tt??* excess of liabilities over the revenue for the last two years, has been met oir ol the surplus which had previously accumulated, The cash oti hand on the 30th ultimo, was abou $206 701 05, and the current income ol the Department varies vry little from the rite of current expend',ures.? Most of the service suspended last year has been restored, and most of the new rou es esiab.ishi-d by the act of 7ih July, 183"*, have be. n set in operation at an annual cost of $136 063. Notwiths anding l?;e pecuniary difficulties of the country, the reve. nue of the Department appears to be inereasing--and unless it shall he seriously checked by the recent suspension of payment by so mmy of die bunks, it will be able no' o.ily to maintain the present mad service, but in a short time to extend it. It is gratifying to witness the promp'itudeand ft lohty with which tin; agents of this Department in general perforin their duties. Some diffi uil n s hav" arisen in relation to contracts f >r the transportation of the mails hy r?il road and steumlioat companies. It appears th>t the max mum t)l compensation provided hy Congress for the transpor at ion of the mails upon railroads is not sufficient to induce some of the eompani's to convey them at such hours as are require t for the accommodation of the publie. It i one orthe most important duties ' of tiie General Government to provide and maintain for the use of the people of the States the best practicable mail establ'shwilt. To :u rive ut that ?*nd, it is uidispcnsablc.lhnt the Post Offi e Department stioll tu? ?.nuM,'d I/, mtiirnl the hours at which ti e mads shall b<' carried over railroads, as it now /Jot's over all other roads. Santild serious inconveniences arise from the in .*id"t|ii:ifiy oi tlx1 compensaion now provide 1 by law, or IVom unr"ns<>uable demands by any oi the railroad computies, the subject is of sorb general importance ns to re/jUTo the prompt attention ot' Congress. In relai on to steamboat lines, th most efficient remedy is ohvioos, and lias been sugg"s ed bv the Postmaster Genera'.? Tim War and Navy Departments already employ sen in boa is in their service* and al.imugh it is by nb in eins desirable tnat the Gov. merit should undertake the trans porntion ot p isseng-rs or tr?'ighi as a business, there can be no reasonable objection to pinning bouts, temporardy, whenever it may be necessary *o put down attempts ;it jcxtoil'on, to be iliscon mueJ as soon us reason ihie contracts can be obtained. Tim suggestions of (lie Postmash-r General relative to the inadequacy of lb" legal allowance ;o wnni ss< s in cases of pros?cuti us for mail deprednt ons, merit your s" rious consideration. The safety of tr.e mails requires that such prosecu ions shall ho efficient, and justice to the cit2 m vvhosi time is required to be given to the public, demands not only that bis expenses, shall he paid, but that he shall receive a reasonable compensation. Tim Rcpors Irom the War. N ?vy nnd Post Office Departments will accompany tins communication, and one fiom the Treasury Department will be presented tCongress in a few days. For various details in respect to the mat? rs in charge of these Departinen s, I woul 1 refer you to those important documeuts, satisfied that you will fiuJ in mem malty-valuable suggestions, which w.ll lafound well deserving the attention of tlm L 'g slature. 1 From a report made in December of laM wear tiv tiw So rotary ot Slate, to the " "J ? - - -J Senate, showing tlie trial docket of each ol tii*? Circuit Cour s, and tlie number of mile> each judge has to travel in the performatfee of his duties, a great in> quality appears in the amount oflahor assigned to each judge. The number of terms to he held in each or he courts composing the ninth cireu t, the distances between the places at which they sit, and from thence to the seat of Govern merit, are represented to be such as to render it--impossible for tlie Judge of that circuit to perform, in a m inner correspond tig with the public exigencies, his term and circuit dudes. A revis on, 'lierefore, of the ptegeni arrangement of tiic circuits swing to be culled for, and is recommended to your notice. I think it proper to call your at'ention 'o the power assumed by Terri'orial L''gisla. lures o authorize the issue of bonds by corporate companies on tiie guarantee of the Territory. Congress pass d a law in 183G, providing that no act of a Territorial Legislature incorporating bank*should have the forre of law until approved by Congress, but acts of a very exceptionable character Florida, wore suffered to remain in force, s by virtue of whic;> bonds may e issued to s a very large nmount by those ins itu'ions, I uj on the faith of he lerri'ory. A resolution i nteuding to be a joint one passed the i S?*nti e at the same session, expressing the ? sense of Congress that the laws in ques ion s ought not to be permitted ;o remain in lorce > unl'-ss amended in many materi d respects, but it failed in the House of R 'jirt'senta .ves \ f r want of lime, and the desired amend f ments have no: been made. The interests ? involved are of great importance, and tbe i subject des"rvcs your eaily and careful i i u't' n'ion. | Tne continu-d agiution of tlie question i rela've to the best mode of keeping and i disbursing the public money, still injurious- I ly uffic s the business ol the country.? Fne suspension of specie pay men's in 1837, 1 rendered the use of deposte banks, as prescribed by the act of 1836, a soune rather of embarrassment than aid, and of necessity placed the custody of most of the public money afterwards co lected in charge of the public officers* The new securities for its safety, rhich this required, were u principal cause of my convening an extra , session of Congress ; but in consequence , jof u disagreement between the two Houses, neither then, nor ut any subsequent pe iocf, Ims there heen any legislation on the sub.. " i ject. The effort made at the last session 1 mohlain lbr? niilh/?rilu r>rr!iinirrps>5 to nnnisll J ~?*r- r?-- ? ? th * use of public money for priv;it<? purpo, ses as a crime a measure attended under other Governments with signal advantage, wag also unsuccessful, from diversities of opinion in that body, notwithstanding the anxiety doubtless felt by it to afford every . practicable security. The result of this is still to leave the custody of the public, money without those sufe.gu irds which h ive been ( for several years earnestly d-sired by the ? Ex cutivo ; and as the remedy is only to 1 tie found in the action of the Legislature, it . iinpog g on me the duty of again submitting 10 )outiu.? propriety of passing a law, providing for the safe keeping of the- public moneys, and especially to ask that i's use for private purposes toy any officers entrust, ed with it, maybe declared to be n felony, punishable with penalties proportioned to o the magnitude of 'he offence. ? These circumstances, added to known defects in the existing laws, and unusual derangement in the general operations of 1 trade, have, during the las' three years, much increased the difficulties attcn nnt ?>n lie collection, keeping, and disbursem nt of th" revenue, and calied forth corresponding exertions from those having hem in charg-, Happily these havp been successful beyoud exp- c at on. Vast sums,, tiave been collected and" disbursed by th" several Depar ments with unexpected cheapness nnd ease; transfers have been readily made to every part of the Union, nowever distant; and defulca'ions liave h en far l"ss than rnig11 have b en antici pa ted, from the absence of adequate legal restrains. Since the officers of the 'IVasu y and Pos Office Dopirtmen s were charged with the cus'ody of mos of ilio ptibli monoyes received bv them, there It >ve been collected sixty-six mill ons of dollars, and, excluding the case of the Ire collector at N"W York, the aggregate nmount of losses sustained in tho collection cannot, it is believed, exceed six'y thousand dollars.? The defalcation of the late collector at h<t 1 city, of the extent and circumstincs of which Congress Iitis bo'-n 'u!ly informed, ran through all the modes of keeping the public money thai have been hitherto in use, <fc was distinguished by an aggnva ed dis-egard of duty, hat broke through the resraints of v *ry system, and cannot, therefore, he use filly referred to as a test ol" t ie. rompnra.. five safety of either. Additional information wdl also be furnished by the repor, of the Secretary of the Treasury, in reply to u call made upon that officer by the Hons" of Representatives a. the last session, requiring detailed information on the subject of defaults by public "officers or agon's under each Administration, from 17*9 to 1837. This document will be submitted to you in n feiv days. Tl?e general results, (independent of the Post Office, w iirh is kept ??p i1 lately. and will be s'ated by its-If,) so far as Ihcy bear upon this subject, ore, that the ' losses which have been, and are likely to i he, sustained, by nny class of agents, have I been ?the greatest by banks?irHud ng, as required in the resolui:o:t, their depreciated paper received for public du s ; that the ' next largest have been by disbursing officers, and the least by coll ctors and receivers. ?< .. i - - - - .1 u II 1110 loss S Oil uu y U HI'IS mi; iiiv nivir.il, they alono will bo 'hr< efold those by both collcciors and recmvi rs. Our wholo experience, therefore furnishes -beslroajfesi evidence that th? desirhd legion'ion of Congress is alone wanting ?o insure in (hose operations tho highest degree of sncurty and facility. Such also appears to bavo b en die experience of other nations. From die results of inquiries made by the Secretary of the Treasury in regard to the practice among them, I am enabled to state that in weiry-two out of twenty-seven foreign Governments from which undoubted information has been obtained, the public moneys re kept in charge of public officers. This concurrence of opinion in favor o( thatsys.. 1 tern is perhaps as great as exisis on any question of internal adminislrut'on. In the modes of business and official re- 1 sirain s on disbursing officers no le. ol ' change was produced by the suspension of I specie pa\ ments The report last referred < fo will he found to contain also much useful i information in relation to this subj -ct. 1 I have heretofore assigned to Congress i rny reasons for believing that die es ablishi i 1 VT .. I T* , mcnt oi an in?'?*pcnu< ni i^iui ojiui i rcusun, i as contemplated by the Constitution, is tie- 1 cessary in the safe act on of ili<? Federal 1 Government. The suspension of specie I payments in 1837, by the banks haying the custody of the. public money, allowed in so 1 alarming a degree cur dependence on those I .r.stitutions for the performance of duties < required by law, that I then recommended i lie entire dissolution of that connection i <? ' Th:s recommendation has been subjected, as I desired it should be, to severe scrutmy 1 ind animated discussion ; and 1 allow myit lfto believe th.it, notwithstanding the naural diversities of opinion which may.fe mticipated on all subjects involving such mpoitant considerations, it has secured in ts favor us general concurrence of public lentiment as could be expected on one of iucli magni udc. Recent events have also continued to dc/elopenow objections to such a connection. Seldom is any bank, under the existing *ystem and practice,abfi^to meet, on demand, all i's liabilities for depositee end antes in circulation. It maintains specie payments, and transacts a profitable business, only by the confidence of the public in its solvency ; and whenever this is destroyed, the demands ofits depositors and no'eholders?pressed more rapidly than it can make collectors from its deStors?force it to slop payment. This loss of confidence with its consequences occured in 183*7, and afforded the apology of the banks for their suspension. The public then acqiesccflm the validity of the excuse; and, while the State Legislatures did not exact from them their forfeited charters, Congress, in accordance wi h the recommendation of the Executive, allowed them lime to pay over the. public money they hel.J, althhough compelled to issue,Treasury notes to supply the deficieney thus created. > it now appears that thero arc other motives than a want of public confidence under which the? banks seek to justify themselves in a refusal to meet their obligations. Scarcely were the country nnd Government relieved, in a degree, from the difficulties occasioned by the general suspension of 1837, when a partial one, ocruring within thirty ittonths of the former, produced new and serious emharrussments, though it had no palliation sue!) circumsiances as were alleged in justification of tint which had previously taken place. Tnere was nothing in the condition of the country to endanger a well managed banking ins'.itut on ; commerce was deranged by no foreign war ; every branch of manufacturing industry was crowned wiili rich rewards ; and the more than usual ab. undairo of our harvests, after supplying our Jonvstic wnnts. had left our granaries and sore.bouses fiijed with asurplusfor cxpormtion. It is in the midst of this, that an irredeemable und depreciated paper currency is en ailed upon the people by a large portion of die banks* They ure not driven toil by the exhibition of a loss of public confidence, or of a sudden pressure from their depositors-or note holders, but they excuse themselves by alleging thai the current of business and exchange with foreign countries, which draws the precions metals from their vaults, would require, in order to nv ot i>, n larger curtailment of their loans to a comparatively finall portion of the community, than it will bo convenient for them to hear, or perhaps safe for the banks to exact. The plea lias ceased to be one of necessity. Convenience and policy are now deemed sufficient to warrant these ms'itutio. s in disregarding their solemn oblig uions. Such conduct is not merely an injury to individual creditors, but it is a wrong to the whole community, from whose lib rainy they hold most valuable ptiyilcgcs ?whose rigliis h< y violaio, whose business lb*3)' d- range, and the value of whose propnet tr (.*> , ...M I ^ r.tkin nnrl I ? 7i ij tiicjjr n ii'i?;r uiioin^iv HUM 'u^.uir, %%, (T)ust l>e evident that this new ground fcf b ulk suspensions, in reference to which their action is not only disconnected with, but wholly independent of, that of the public, gives a character to their suspensions more a'nrming than any which they exhibited beforivnd greatly increases the impropriety of r lying on the banks in the transactions of tue Government. A largo und highly respectable portion of our banking institHtions lire, it affords mo unf? igned pleasure to state, exempted from all blame on account of this second delin--^ ^ quency. They have, to th? ir groat credit, not only continued to meet their engagements, but have even repudiated the grounds of suspension now reported to. It is only by sit dt a course thai the confidence and good * will of he community can be preserved, and. in the sequel, die best interests of tho ins'itutions themselves promoted. New dangers to the banks are also daily disclosed from the extension of that system of extravagant credit of which they are the m lrt ro |/ 11??i o* X villi' I j UUI waipii ^VUllllCl V.U was principally founded on an exchange of commodities, including the precious metals, and leaving in its transactions,hut little lor. <ign d? hf. Syli is not now the case. At. ded by the facilities afforded by die banks, mere credit has become too commonly the basis of radc. Many of the banks litemselves, not content with largely simulating tins system among others, have unsurped the business, while they impair the stability o: the mercantile community ; they hnve become borrowers instead of lenders, they establish their .agencies abroad ; they deal largely in stocks and merchandise ; they encourage the issue of State securities until the foreign market is glutted with them ; I '.L *1 I .! 1. l> mm, iinsaiisucu wun me inguinale use Of their own capital and the exercise of their lawful privileges, they raise, by large loans, a Iditional means for every variety of spec, ulution. The disasters attendant on this deviation from the former course of business in tins country, ore now shared alike by banks and individuals, to an extent of which th^re is prhaps no previous example in the annals of our country. So long as a willingness of the foreign lender, and a suffic;ent export of our productions to meet any nec ssaiy partial payments, leave the flow of credit undisturbed, all appears to be pros. ,,erous ; hut as soon as it is checked by any hesitation abroad, or by an inability to make payment there in our productions, the evils j of the system are disclosed. The paper currency which mi?ht serve for domestic purposes, is useless to pay the debt due in Europe. Gold and silver are therefore drawn in, for their notes, from tho bunks. To keep up their supply of coin, these nsiitutions are obliged to coll upon their own debtors, who pay them principally in their own notes, whieh sre ns unavailable to them es they ore to the mer. j charus to meet the] foreign demand. The I