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After reviewing the relations of the United States with other nations, he announced the opening of the ports of Norfolk, Fernandina, and Pensacola. Then alluding to the Arguelles case, in which a slave trader seeking asylum in the United States had been surrendered to Spain, he said: "For myself I have no doubt of the power and duty of the Executive under the laws of nations to exclude enemies of the human race from an asylum in the United States. If Congress should think that proceedings in such case lack the authority of law, or ought to be further regulated by it, I recommend that provision be made for effectually preventing foreign slave traders from acquiring domicil and facilities for their criminal occupation in this country.

He then called attention to the circumstances which had induced him to give notice to the Government of Great Britain of the termination of the treaty stipulation of 1817, which had limited the number of armed vessels on the Great Lakes.

"In view of the insecurity of life in the region adjacent to the Canada border by recent assaults and depredations committed by inimical and desperate persons who are harbored there, it has been thought proper to give notice that after the expiration of six months, the period conditionally stipulated in the existing arrangements with Great Britain the United States must hold themselves at liberty to increase their naval armament upon the Lakes, if they shall find that proceeding necessary. The condition of the border will necessarily come into consideration in connection with the question of continuing or modifying the rights of transit from Canada through the United States, as well as the regulation of imports, which were temporarily established by the Reciprocity Treaty of the 5th of June, 1854."

He then proceeds to speak of the very important subject of finance, and the receipts and expenditures of Government. He says:

"The legislation of the last session of Congress has beneficially ef fected the revenue. Although sufficient time has not yet elapsed to experience the full effect of several of the provisions of the acts of Congross imposing increased taxation, the receipts during the year from all sources, upon the basis of warrants signed by the Secretary of the

Treasury, including loans and the balance in the treasury, on the 1st day of July, 1863, were $1,394,796,007 62, and the aggregate disbursements upon the same basis were $1,298,056,191 89, leaving a balance in the treasury, as shown by warrants, of $96,739,905 73. Deduct from these amounts the amount of the principle of the public debt redeemed, and the amount of issues in substitution therefor, and the actual cash operations of the treasury were receipts, $884,076,646.77, disbursements $865,234,087.86, which leaves a cash balance in the treasury of $18,842,558.71. Of the receipts, there were derived from customs, $102,316.152.99; from lands, $588,333.29; from direct taxes, $575,648,96; from internal revenues, $109,741,134.10; from miscellaneous sources, $47,511,448.10; and from loans applied to actual expenditures, including former balance, $623,443,929.13. There were disbursed, for the civil service, $27,505,579.46; for pensions and Indians, $7,517,930.97; for the War Department, $60,791,842.97; for the Navy Department, $85,733,292.97; for interest of the public debt, $52,685,421.69. Making an aggregate of $865,234,087.86 and leaving a balance in the treasury of $18,842,558.71, as before stated."

Of the public debt he says:

"The public debt from the 1st day of July last, as appears from the books of the Treasury, amounted to one billion, seven hundred and forty million, six hundred and ninety thousand, four hundred and eightynine dollars, and forty-nine cents. Probably, should the war continue for another year, that amount may be increased by not far from five hundred millions. Held as it is, for the most part by our own people, it has become a substantial branch of National, though private property. For obvious reasons the more nearly this property can be distributed among all the people the better. To favor such general distribution, greater inducements to become owners, perhaps might with good offect and without injury, be presented to persons with limited With this view I suggest whether it might not be both expedient and competent for Congress to provide that a limited amount of some future issue of public securities might not be held, by any bonafide purchaser, exempt from taxation, and of seizure from debt, under such restrictions and limitations as might be necessary to guard against abuse of so important a privilege. This would enable prudent persons to set aside a small annuity against a possible day of want. Privileges like these would render the possession of such securities to the amount limited most desirable to any person of small means who might be able to save enough for the purpose. The great advantage of citizens being

means.

creditors as well as debtors with relation to the public debt, is obvious. Men readily perceive that they cannot be much oppressed by a debt which they owe to themselves. The public debt on the 1st day of July last, although somewhat exceeding the estimate of the Secretary of the Treasury made to Congress at the commencement of last session, falls short of the estimate of that officer made in the preceding December, as to its probable amount at the beginning of this year, by the sum of $3,995,079.33. This fact exhibits a satisfactory condition and conduct of the operations of the treasury."

Of the National Banking System, the great financial measure of Mr. Chase, he says:

"The national banking system is proving to be acceptable to capitalists and to the people. On the 25th day of November, five hundred and eighty-four national banks had been organized, a considerable number of which were conversions from State banks. Changes from the State system to the national system are rapidly taking place, and it is hoped that very soon there will be in the United States no banks of issue not authorized by Congress, and no bank-note circulation not secured by the Government. That the Government and the people will derive general benefits from this change in the banking system of the country, can hardly be questioned. The national system will create a reliable and permanent influence in support of the national credit, and protect the people against losses in the use of paper money. Whether or not any further legislation is advisable for the suppression of State bank issues, it will be for Congress to determine. It seems quite clear that the Treasury cannot be satisfactorily conducted, unless the Government can exercise a restraining power over the bank-note circulation of the country.

Referring to the report of the Secretary of War for the details of the operations of the Army and of the Navy, he says:

"The report of the Secretary of the Navy presents a comprehensive and satisfactory exhibit of the affairs of that department and of the naval service. It is a subject of congratulation and laudable pride to our countrymen, that a navy of such proportions has been organized in so brief a period, and conducted with so much efficiency and success. The general exhibit of the navy, including vessels under construction on the 1st of December, 1864, shows a total of 671 vessels,

carrying 4,610 guns, and 510,396 tons, being an actual increase during the year over and above all losses by shipwreck or in battle, of 83 vessels, 167 guns, and 42,427 tons. The total number of men at this time in the naval service, including officers, is about 51,000. There have been captured by the navy during the year 324 vessels, and the whole number of naval captures since hostilities commenced is 1,379, of which 267 are steamers."

After alluding to the rapid sale and settlement of the public lands, notwithstanding the war, and the rapid progress of the great Pacific railway, he comes to the all-absorbing subject of the war. He says:

"The war continues. Since the last annual message, all the important lines and positions then occupied by our forces have been maintained, and our armies have steadily advanced, thus liberating the regions left in the rear; so that Missouri, Kentucky, Tennessee, and parts of other States, have again produced reasonably fair crops.

"The most remarkable feature in the military operations of the year is General Sherman's attempted march of three hundred miles, directly through an insurgent region. It tends to show a great increase of our relative strength, that our General-in-Chief should feel able to confront and hold in check every active force of the enemy, and yet to detach a well-appointed large army to move on such an expedition. The result not yet being known, conjecture in regard to it cannot here be indulged."

Of the progress towards reconstruction, "moulding society for durability in the Union," as he terms it in his own most significant phraseology, he says "although these movements are short of complete success, it is much in the right direction that 12,000 citizens in the States of Arkansas and Louisiana have organized loyal state Governments with free constitutions, and are earnestly struggling to maintain and administer them. The movements in the same direction, more extensive, though less definite in Missouri, Kentucky and Tennessee, should not be overlooked. "But Maryland,' he says, exultingly, "presents an example of complete success. Maryland is secure to liberty and Union for all the future. The genius of rebellion will no more claim Mary. land; like another foul spirit being driven out, it may seek to tear her, but it will woo her no more."

Upon the pending question of the proposed constitutional amendment abolishing slavery, the question of all others of overshadowing importance, he says:

"At the last session of Congress, a proposed amendment of the constitution, abolishing slavery throughout the United States, passed the Senate, but failed for the lack of the requisite two-thirds vote in the House of Representatives. Although the present is the same Congress, and nearly the same members, and without questioning the wisdom or patriotism of those who stood in opposition, I venture to recommend the reconsideration and passage of the measure at the present session. Of course the abstract question is not changed, but an intervening election shows almost certainly that the next Congress will pass the measure, if this does not. Hence there is only a question of time as to when the proposed amendment will go to the States for their action, and as it is to go at all events, may we not agree that the sooner the better? It is not claimed that the election has imposed a duty on members to change their views or their votes, any further than as an additional element to be considered. Their judgment may be affected by it. It is the voice of the people now for the first time heard upon the question. In a great national crisis like ours, unanimity of action among those seeking a common end is very desirable-almost indispensable; and yet no approach to such unanimity is attainable unless some deference shall be paid to the will of the majority. In this case the common end is the maintenance of the Union, and among the means to secure that end, such will, through the election, is most clearly declared in favor of such constitutional amendment. The most reliable indication of public purpose in this country is derived through our popular elections. Judging by the recent canvass and its results, the purpose of the people within the loyal States to maintain the integrity of the Union was never more firm or more nearly unanimous than now. The extraordinary calmness and good order with which the millions of voters met and mingled at the polls, gives strong assurance of this. Not only all those who supported the Union ticket (so called,) but a great majority of the opposing party also, may be fairly claimed to entertain and to be actuated by the same purpose. It is an unanswerable argument to this effect that no candidate for any office whatever, high or low, has ventured to seek votes on the avowal that he was for giving up the Union. There has been much impugning of motives, and much heated controversy as to the proper means and best mode of advancing the Union cause; but in the distinct issue of Union or no Union, the politicians have shown their instinctive knowledge that there is no diver.

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