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of veteran troops, and worthy of the highest admiration. The privations of long marches through the enemy's country, and through a wilderness, have been borne without a murmur. By rapid movements the province of New Mexico, with Santa Fe, its capital, has been captured without bloodshed. The navy has co-operated with the army, and rendered important services; if not so brilliant, it is because the enemy had no force to meet them on their own element, and because of the defences which nature has interposed in the difficulties of the navigation on the Mexican coasts. Our squadron in the Pacific, with the co-operation of a gallant officer of the army, and a small force hastily collected in that distant country, have acquired bloodless possession of the Californias, and the American flag has been raised at every important point in that province.

I congratulate you on the success which has thus attended our military and naval operations. In less than seven months after Mexico commenced hostilities, at a time selected by herself, we have taken possession of many of her principal ports, driven back and pursued her invading army, and acquired military possession of the Mexican provinces of New Mexico, New Leon, Coahuila, Tamaulipas, and the Californias, a territory larger in extent than that embraced in the original thirteen states of the Union, inhabited by a considerable population, and much of it more than a thousand miles from the points at which we had to collect our forces and commence our movements. By the blockade, the import and export trade of the enemy has been cut off.

Well may the American people be proud of the energy and gallantry of our regular and volunteer officers and soldiers. The events of these few months afford a gratifying proof that our country can, under any emergency, confidently rely for the maintenance of her honor, and the defence of her rights, on an effective force, ready at all times voluntarily to relinquish the comforts of home for the perils and privations of the camp. And though such a force may be for the time expensive, it is in the end economical, as the ability to command it removes the necessity of employing a large standing army in time of peace, and proves that our people love their institutions, and are ever ready to defend and protect them.

While the war was in a course of vigorous and successful prosecution, being still anxious to arrest its evils, and considering that, after the brilliant victories of our arms on the eighth and ninth of May last, the national honor could not be compromitted by it, another overture was made to Mexico, by my direction, on the twenty-seventh of July last, to terminate hostilities by a peace just and honorable to both countries. On the thirtyfirst of August following, the Mexican government declined to accept this friendly overture, but referred it to the decision of a Mexican Congress, to be assembled in the early part of the present month. I communicate to you, herewith, a copy of the letter of the secretary of state proposing to reopen negotiations, of the answer of the Mexican government, and of the reply thereto of the secretary of state.

The war will continue to be prosecuted with vigor, as the best means of securing peace. It is hoped the decision of the Mexican Congress, to which our last overture has been referred, may result in a speedy and honorable peace. With our experience, however, of the unreasonable course of the Mexican authorities, it is the part of wisdom not to relax in the energy of our military operations until the result is made known. In this view, it is deemed important to hold military possession of all the prov

inces which have been taken, until a definitive treaty of peace shall have been concluded, and ratified by the two countries.

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

By the laws of nations a conquered territory is subject to be governed by the conqueror during his military possession, and until there is either a treaty of peace, or he shall voluntarily withdraw from it.

The old civil government being necessarily superseded, it is the right and duty of the conqueror to secure his conquest, and to provide for the maintenance of civil order and the rights of the inhabitants. This right has been exercised, and this duty performed, by our military and naval commanders, by the establishment of temporary governments in some of the conquered provinces in Mexico, assimilating them as far as practicable to the free institutions of our own country. In the provinces of New Mexico, and of the Californias, little if any further resistance is apprehended from the inhabitants to the temporary governments which have thus, from the necessity of the case, and according to the laws of war, been established. It may be proper to provide for the security of these important conquests by making an adequate appropriation for the purpose of erecting fortifications and defraying the expenses necessarily incident to the maintenance of our possession and authority over them.

Near the close of your last session, for reasons communicated to Congress, I deemed it important, as a measure for securing a speedy peace with Mexico, that a sum of money should be appropriated and placed in the power of the executive, similar to that which had been made upon two former occasions, during the administration of President Jefferson.

On the twenty-sixth of February, 1803, an appropriation of two millions of dollars was made, and placed at the disposal of the president. Its object is well known. It was at that time in contemplation to acquire Louisiana from France, and it was intended to be applied as a part of the consideration which might be paid for that territory. On the thirteenth of February, 1806, the same sum was in like manner appropriated, with a view to the purchase of the Floridas from Spain. These appropriations were made to facilitate negotiations, and as a means to enable the president to accomplish the important objects in view. Though it did not become necessary for the president to use these appropriations, yet a state of things might have arisen in which it would have been highly important for him to do so, and the wisdom of making them can not be denied. It is believed that the measure recommended at your last session met with the approbation of decided majorities in both houses of Congress. Indeed, in different forms, a bill making an appropriation of two millions of dollars passed each house, and it is much to be regretted that it did not become a law. The reasons which induced me to recommend the measure at that time still exist; and I again submit the subject for your consideration, and suggest the importance of early action upon it. Should the appropriation be made, and be not needed, it will remain in the treasury; should it be deemed proper to apply it in whole or in part, it will be accounted for as other public expenditures.

Immediately after Congress had recognised the existence of the war

with Mexico, my attention was directed to the danger that privateers might be fitted out in the ports of Cuba and Porto Rico, to prey upon the commerce of the United States; and I invited the special attention of the Spanish government to the fourteenth article of our treaty with that power of the twentieth of October, 1795, under which the citizens and subjects of either nation who shall take commissions or letters of marque to act as privateers against the other "shall be punished as pirates."

It affords me pleasure to inform you that I have received assurances from the Spanish government that this article of the treaty shall be faithfully observed on its part. Orders for this purpose were immediately transmitted from that government to the authorities of Cuba and Porto Rico to exert their utmost vigilance in preventing any attempts to fit out privateers in those islands against the United States. From the good faith of Spain I am fully satisfied that this treaty will be executed in its spirit as well as its letter; while the United States will, on their part, faithfully perform all the obligations which it imposes on them.

Information has been recently received at the department of state that the Mexican government has sent to Havana blank commissions to privateers, and blank certificates of naturalization, signed by General Salas, the present head of the Mexican government. There is, also, reason to apprehend that similar documents have been transmitted to other parts of the world. Copies of these papers, in translation, are here with transmitted. As the preliminaries required by the practice of civilized nations for commissioning privateers and regulating their conduct appear not to have been observed, and as these commissions are in blank, to be filled up with the names of citizens and subjects of all nations who may be willing to purchase them, the whole proceeding can only be construed as an invitation to all the freebooters upon earth, whe are willing to pay for the privilege, to cruise against American commerce. It will be for our courts of justice to decide whether, under such circumstances, these Mexican letters of marque and reprisal shall protect those who accept them, and commit robberies upon the high seas under their authority, from the pains and penalties of piracy.

If the certificates of naturalization thus granted be intended by Mexico to shield Spanish subjects from the guilt and punishment of pirates, under our treaty with Spain, they will certainly prove unavailing. Such a subterfuge would be but a weak device to defeat the provisions of a solemn treaty.

I recommend that Congress should immediately provide by law for the trial and punishment as pirates of Spanish subjects who, escaping the vigilance of their government, shall be found guilty of privateering against the United States. I do not apprehend serious danger from these privateers. Our navy will be constantly on the alert to protect our commerce. Besides, in case prizes should be made of American vessels, the utmost vigilance will be exerted by our blockading squadron to prevent the captors from taking them into Mexican ports, and it is not apprehended that any nation will violate its neutrality by suffering such prizes to be condemned and sold within its jurisdiction.

I recommend that Congress should immediately provide by law for granting letters of marque and reprisal agaiust vessels under the Mexican flag. It is true that there are but few, if any, commercial vessels of Mexico upon the high seas; and it is, therefore, not probable that many American privateers would be fitted out, in case a law should pass authorizing

this mode of warfare. It is, notwithstanding, certain that such privateers may render good service to the commercial interests of the country, by recapturing our merchant-ships, should any be taken by armed vessels under the Mexican flag, as well as by capturing these vessels themselves. Every means within our power should be rendered available for the protection of our commerce.

The annual report of the secretary of the treasury will exhibit a detailed statement of the condition of the finances. The imports for the fiscal year ending on the thirtieth of June last, were of the value of one hundred and twenty-one millions six hundred and ninety-one thousand seven hundred and ninety-seven dollars; of which the amount exported was eleven millions three hundred and forty-six thousand six hundred and twenty-three dollars; leaving the amount retained in the country for domestic consumption one hundred and ten millions three hundred and forty-five thousand one hundred and seventy-four dollars. The value of the exports for the same period was one hundred and thirteen millions four hundred and eightyeight thousand five hundred and sixteen dollars; of which one hundred and two millions one hundred and forty-one thousand eight hundred and ninety-three dollars consisted of domestic productions, and eleven millions three hundred and forty-six thousand six hundred and twenty-three dollars of foreign articles.

The receipts into the treasury for the same year were twenty-nine millions four hundred and ninety-nine thousand two hundred and forty-seven dollars and six cents; of which there was derived from customs twentysix millions seven hundred and twelve thousand six hundred and sixty-seven dollars and eighty-seven cents, from the sales of public lands two millions six hundred and ninety-four thousand four hundred and fifty-two dollars and forty-eight cents, and from incidental and miscellaneous sources ninetytwo thousand one hundred and twenty-six dollars and seventy-one cents. The expenditures for the same period were twenty-eight millions thirty-one thousand one hundred and fourteen dollars and twenty cents, and the balance in the treasury on the first day of July last, was nine millions one hundred and twenty-six thousand four hundred and thirty-nine dollars and eight cents.

The amount of the public debt, including treasury-notes, on the first of the present month, was twenty-four millions two hundred and fifty-six thousand four hundred and ninety-four dollars and sixty cents; of which the sum of seventeen millions seven hundred and eighty-eight thousand seven hundred and ninety-nine dollars and sixty-two cents was outstanding on the fourth of March, 1845, leaving the amount incurred since that time six millions four hundred and sixty-seven thousand six hundred and ninetyfour dollars and ninety-eight cents.

In order to prosecute the war with Mexico with vigor and energy, as the best means of bringing it to a speedy and honorable termination, a further loan will be necessary, to meet the expenditures for the present and the next fiscal years. If the war should be continued until the thirtieth of June, 1848-being the end of the next fiscal year-it is estimated that an additional loan of twenty-three millions of dollars will be required. This estimate is made upon the assumption that it will be necessary to retain constantly in the treasury four millions of dollars, to guard against contingencies. If such surplus were not required to be retained, then a loan of nineteen millions of dollars would be sufficient. If, however Congress should, at the present session, impose a revenue duty on the princi

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pal articles now embraced in the free list, it is estimated that an additional annual revenue of about two millions and a half, amounting, it is estimated, on the thirtieth of June, 1848, to four millions of dollars, would be derived from that source; and the loan required would be reduced by that amount. It is estimated, also, that should Congress graduate and reduce the price of such of the public lands as have been long in the market, the additional revenue derived from that source would be annually, for several years to come, between half a million and a million of dollars; and the loan required may be reduced by that amount also. Should these measures be adopted, the loan required would not probably exceed eighteen or nineteen millions of dollars-leaving in the treasury a constant surplus of four millions of dollars. The loan proposed, it is estimated, will be sufficient to cover the necessary expenditures, both for the war and for all other purposes, up to the thirtieth of June, 1848; and an amount of this loan, not exceeding one half, may be required during the present fiscal year, and the greater part of the remainder during the first half of the fiscal year succeeding.

In order that timely notice may be given, and proper measures taken to effect the loan, or such portion of it as may be required, it is important that the authority of Congress to make it be given at an early period of your present session. It is suggested that the loan should be contracted for a period of twenty years, with authority to purchase the stock and pay it off at an earlier period, at its market value, out of any surplus which may at any time be in the treasury applicable to that purpose. After the establishment of peace with Mexico, it is supposed that a considerable surplus will exist, and that the debt may be extinguished in a much shorter period than that for which it may be contracted. The period of twenty years, as that for which the proposed loan may be contracted, in preference to a shorter period, is suggested, because all experience, both at home and abroad, has shown that loans are effected upon much better terms upon long time, than when they are reimbursable at short dates.

Necessary as this measure is, to sustain the honor and the interests of the country, engaged in a foreign war, it is not doubted but that Congress will promptly authorize it.

The balance in the treasury on the first of July last exceeded nine millions of dollars, notwithstanding considerable expenditures had been made for the war during the months of May and June preceding. But for the war, the whole public debt could and would have been extinguished within a short period; and it was a part of my settled policy to do so, and thus relieve the people from its burden, and place the government in a position which would enable it to reduce the public expenditures to that economical standard which is most consistent with the general welfare, and the pure and wholesome progress of our institutions.

Among our just causes of complaint against Mexico, arising out of her refusal to treat for peace, as well before as since the war so unjustly commenced on her part, are the extraordinary expenditures in which we have been involved. Justice to our own people will make it proper that Mexico should be held responsible for these expenditures.

Economy in the public expenditures is at all times a high duty which all public functionaries of the government owe to the people. This duty becomes the more imperative in a period of war, when large and extraordinary expenditures become unavoidable. During the existence of the war with Mexico all our resources should be husbanded, and no appropriations

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