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Fellow-Citizens of the Senate and of the House of Representatives:

Under the benignant providence of Almighty God the representatives of the States and of the people are again brought together to deliberate for the public good. The gratitude of the nation to the Sovereign Arbiter of All Human Events should be commensurate with the boundless blessings which we enjoy.

Peace, plenty, and contentment reign throughout our borders, and our beloved country presents a sublime moral spectacle to the world.

The troubled and unsettled condition of some of the principal European powers has had a necessary tendency to check and embarrass trade and to depress prices throughout all commercial nations, but notwithstanding these causes, the United States, with their abundant products, have felt their effects less severely than any other country, and all our great interests are still prosperous and successful.

In reviewing the great events of the past year and contrasting the agitated and disturbed state of other countries with our own tranquil and happy condition, we may congratulate ourselves that we are the most favored people on the face of the earth. While the people of other countries are struggling to establish free institutions, under which man may govern himself, we are in the actual enjoyment of them—a rich inheritance from our fathers. While enlightened nations of Europe are convulsed and distracted by civil war or intestine strife, we settle all our political controversies by the peaceful exercise of the rights of freemen at the ballot box.

The great republican maxim, so deeply engraven on the hearts of our people, that the will of the majority, constitutionally expressed, shall prevail, is our sure safeguard against force and violence. It is a subject of just pride that our fame and character as a nation continue rapidly to advance in the estimation of the civilized world.

To our wise and free institutions it is to be attributed that while other nations have achieved glory at the price of the suffering, distress, and impoverishment of their people, we have won our honorable position in the midst of an uninterrupted prosperity and of an increasing individual comfort and happiness.

I am happy to inform you that our relations with all nations are friendly and pacific. Advantageous treaties of commerce have been concluded within the last four years with New Granada, Peru, the Two Sicilies, Belgium, Hanover, Oldenburg, and Mecklenburg-Schwerin. Pursuing our example, the restrictive system of Great Britain, our principal foreign customer, has been relaxed, a more liberal commercial policy has been adopted by other enlightened nations, and our trade has been greatly enlarged and extended. Our country stands higher in the respect of the world than at any former period. To continue to occupy this proud position, it is only necessary to preserve peace and faithfully adhere to the great and fundamental principle of our foreign policy of noninterference in the domestic concerns of other nations. We recognize in all nations the right which we enjoy ourselves, to change and reform their political institutions according to their own will and pleasure. Hence we do not look behind existing governments capable of maintaining their own authority. We recognize all such actual governments, not only from the dictates of true policy, but from a sacred regard for the independence of nations. While this is our settled policy, it does not follow that we can ever be indifferent spectators of the progress of liberal principles. The Government and people of the United States hailed with enthusiasm and delight the establishment of the French Republic, as we now hail the efforts in progress to unite the States of Germany in a confederation similar in many respects to our own Federal Union. If the great and enlightened German States, occupying, as they do, a central and commanding position in Europe, shall succeed in establishing such a confederated government, securing at the same time to the citizens of each State local governments adapted to the peculiar condition of each, with unrestricted trade and intercourse with each other, it will be an important era in the history of human events. Whilst it will consolidate and strengthen the power of Germany, it must essentially promote the cause of peace, commerce, civilization, and constitutional liberty throughout the world.

With all the Governments on this continent our relations, it is believed, are now on a more friendly and satisfactory footing than they have ever been at any former period.

Since the exchange of ratifications of the treaty of peace with Mexico our intercourse with the Government of that Republic has been of the most friendly character. The envoy extraordinary and minister plenipotentiary of the United States to Mexico has been received and accredited, and a diplomatic representative from Mexico of similar rank has been received and accredited by this Government. The amicable relations between the two countries, which had been suspended, have been happily restored, and are destined, I trust, to be long preserved. The two Republics, both situated on this continent, and with coterminous territories, have every motive of sympathy and of interest to bind them together in perpetual amity.

This gratifying condition of our foreign relations renders it unnecessary for me to call your attention more specifically to them.

It has been my constant aim and desire to cultivate peace and commerce with all nations. Tranquility at home and peaceful relations abroad constitute the true permanent policy of our country. War, the scourge of nations, sometimes becomes inevitable, but is always to be avoided when it can be done consistently with the rights and honor of a nation.

One of the most important results of the war into which we were recently forced with a neighboring nation is the demonstration it has afforded of the military strength of our country. Before the late war with Mexico European and other foreign powers entertained imperfect and erroneous views of our physical strength as a nation and of our ability to prosecute war, and especially a war waged out of out own country. They saw that our standing Army on the peace establishment did not exceed 10,000 men. Accustomed themselves to maintain in peace large standing armies for the protection of thrones against their own subjects, as well as against foreign enemies, they had not conceived that it was possible for a nation without such an army, well disciplined and of long service, to wage war successfully. They held in low repute our militia, and were far from regarding them as an effective force, unless it might be for temporary defensive operations when invaded on our own soil. The events of the late war with Mexico have not only undeceived them, but have removed erroneous impressions which prevailed to some extent even among a portion of our own countrymen. That war has demonstrated that upon the breaking out of hostilities not anticipated, and for which no previous preparation had been made, a volunteer army of citizen soldiers equal to veteran troops, and in numbers equal to any emergency, can in a short period be brought into the field. Unlike what would have occurred in any other country, we were under no necessity of resorting to drafts or conscriptions. On the contrary, such was the number of volunteers who patriotically tendered their services that the chief difficulty was in making selections and determining who should be disappointed and compelled to remain at home. Our citizen soldiers are unlike those drawn from the population of any other country. They are composed indiscriminately of all professions and pursuits—of farmers, lawyers, physicians, merchants, manufacturers, mechanics, and laborers—and this not only among the officers, but the private soldiers in the ranks. Our citizen soldiers are unlike those of any other country in other respects. They are armed, and have been accustomed from their youth up to handle and use firearms, and a large proportion of them, especially in the Western and more newly settled States, are expert marksmen. They are men who have a reputation to maintain at home by their good conduct in the field. They are intelligent, and there is an individuality of character which is found in the ranks of no other army. In battle each private man, as well as every officer, rights not only for his country, but for glory and distinction among his fellow-citizens when he shall return to civil life.

The war with Mexico has demonstrated not only the ability of the Government to organize a numerous army upon a sudden call, but also to provide it with all the munitions and necessary supplies with dispatch, convenience, and ease, and to direct its operations with efficiency. The strength of our institutions has not only been displayed in the valor and skill of our troops engaged in active service in the field, but in the organization of those executive branches which were charged with the general direction and conduct of the war. While too great praise can not be bestowed upon the officers and men who fought our battles, it would be unjust to withhold from those officers necessarily stationed at home, who were charged with the duty of furnishing the Army in proper time and at proper places with all the munitions of war and other supplies so necessary to make it efficient, the commendation to which they are entitled. The credit due to this class of our officers is the greater when it is considered that no army in ancient or modern times was even better appointed or provided than our Army in Mexico. Operating in an enemy’s country, removed 2,000 miles from the seat of the Federal Government, its different corps spread over a vast extent of territory, hundreds and even thousands of miles apart from each other, nothing short of the untiring vigilance and extraordinary energy of these officers could have enabled them to provide the Army at all points and in proper season with all that was required for the most efficient service.

It is but an act of justice to declare that the officers in charge of the several executive bureaus, all under the immediate eye and supervision of the Secretary of War, performed their respective duties with ability, energy, and efficiency. They have reaped less of the glory of the war, not having been personally exposed to its perils in battle, than their companions in arms; but without their forecast, efficient aid, and cooperation those in the field would not have been provided with the ample means they possessed of achieving for themselves and their country the unfading honors which they have won for both.

When all these facts are considered, it may cease to be a matter of so much amazement abroad how it happened that our noble Army in Mexico, regulars and volunteers, were victorious upon every battlefield, however fearful the odds against them.

The war with Mexico has thus fully developed the capacity of republican governments to prosecute successfully a just and necessary foreign war with all the vigor usually attributed to more arbitrary forms of government. It has been usual for writers on public law to impute to republics a want of that unity, concentration of purpose, and vigor of execution which are generally admitted to belong to the monarchical and aristocratic forms; and this feature of popular government has been supposed to display itself more particularly in the conduct of a war carried on in an enemy’s territory. The war with Great Britain in 1812 was to a great extent confined within our own limits, and shed but little light on this subject; but the war which we have just closed by an honorable peace evinces beyond all doubt that a popular representative government is equal to any emergency which is likely to arise in the affairs of a nation.

The war with Mexico has developed most strikingly and conspicuously another feature in our institutions. It is that without cost to the Government or danger to our liberties we have in the bosom of our society of freemen, available in a just and necessary war, virtually a standing army of 2,000,000 armed citizen soldiers, such as fought the battles of Mexico. But our military strength does not consist alone in our capacity for extended and successful operations on land. The Navy is an important arm of the national defense. If the services of the Navy were not so brilliant as those of the Army in the late war with Mexico, it was because they had no enemy to meet on their own element. While the Army had opportunity of performing more conspicuous service, the Navy largely participated in the conduct of the war. Both branches of the service performed their whole duty to the country. For the able and gallant services of the officers and men of the Navy, acting independently as well as in cooperation with our troops, in the conquest of the Californias, the capture of Vera Cruz, and the seizure and occupation of other important positions on the Gulf and Pacific coasts, the highest praise is due. Their vigilance, energy, and skill rendered the most effective service in excluding munitions of war and other supplies from the enemy, while they secured a safe entrance for abundant supplies for our own Army. Our extended commerce was nowhere interrupted, and for this immunity from the evils of war the country is indebted to the Navy.

High praise is due to the officers of the several executive bureaus, navy-yards, and stations connected with the service, all under the immediate direction of the Secretary of the Navy, for the industry, foresight, and energy with which everything was directed and furnished to give efficiency to that branch of the service. The same vigilance existed in directing the operations of the Navy as of the Army. There was concert of action and of purpose between the heads of the two arms of the service. By the orders which were from time to time issued, our vessels of war on the Pacific and the Gulf of Mexico were stationed in proper time and in proper positions to cooperate efficiently with the Army. By this means their combined power was brought to bear successfully on the enemy.

The great results which have been developed and brought to light by this war will be of immeasurable importance in the future progress of our country. They will tend powerfully to preserve us from foreign collisions, and to enable us to pursue uninterruptedly our cherished policy of “peace with all nations, entangling alliances with none.”

Occupying, as we do, a more commanding position among nations than at any former period, our duties and our responsibilities to ourselves and to posterity are correspondingly increased. This will be the more obvious when we consider the vast additions which have been recently made to our territorial possessions and their great importance and value.

Within less than four years the annexation of Texas to the Union has been consummated; all conflicting title to the Oregon Territory south of the forty-ninth degree of north latitude, being all that was insisted on by any of my predecessors, has been adjusted, and New Mexico and Upper California have been acquired by treaty. The area of these several Territories, according to a report carefully prepared by the Commissioner of the General Land Office from the most authentic information in his possession, and which is herewith transmitted, contains 1,193,061 square miles, or 763,559,040 acres; while the area of the remaining twenty-nine States and the territory not yet organized into States east of the Rocky Mountains contains 2,059,513 square miles, or 1,318,126,058 acres. These estimates show that the territories recently acquired, and over which our exclusive jurisdiction and dominion have been extended, constitute a country more than half as large as all that which was held by the United States before their acquisition. If Oregon be excluded from the estimate, there will still remain within the limits of Texas, New Mexico, and California 851,598 square miles, or 545,012,720 acres, being an addition equal to more than one-third of all the territory owned by the United States before their acquisition, and, including Oregon, nearly as great an extent of territory as the whole of Europe, Russia only excepted. The Mississippi, so lately the frontier of our country, is now only its center. With the addition of the late acquisitions, the United States are now estimated to be nearly as large as the whole of Europe. It is estimated by the Superintendent of the Coast Survey in the accompanying report that the extent of the seacoast of Texas on the Gulf of Mexico is upward of 400 miles; of the coast of Upper California on the Pacific, of 970 miles, and of Oregon, including the Straits of Fuca, of 650 miles, making the whole extent of seacoast on the Pacific 1,620 miles and the whole extent on both the Pacific and the Gulf of Mexico 2,020 miles. The length of the coast on the Atlantic from the northern limits of the United States around the capes of Florida to the Sabine, on the eastern boundary of Texas, is estimated to be 3,100 miles; so that the addition of seacoast, including Oregon, is very nearly two-thirds as great as all we possessed before, and, excluding Oregon, is an addition of 1,370 miles, being nearly equal to one-half of the extent of coast which we possessed before these acquisitions. We have now three great maritime fronts—on the Atlantic, the Gulf of Mexico, and the Pacific—making in the whole an extent of seacoast exceeding 5,000 miles. This is the extent of the seacoast of the United States, not including bays, sounds, and small irregularities of the main shore and of the sea islands. If these be included, the length of the shore line of coast, as estimated by the Superintendent of the Coast Survey in his report, would be 33,063 miles.

It would be difficult to calculate the value of these immense additions to our territorial possessions. Texas, lying contiguous to the western boundary of Louisiana, embracing within its limits a part of the navigable tributary waters of the Mississippi and an extensive seacoast, could not long have remained in the hands of a foreign power without endangering the peace of our southwestern frontier. Her products in the vicinity of the tributaries of the Mississippi must have sought a market through these streams, running into and through our territory, and the danger of irritation and collision of interests between Texas as a foreign state and ourselves would have been imminent, while the embarrassments in the commercial intercourse between them must have been constant and unavoidable. Had Texas fallen into the hands or under the influence and control of a strong maritime or military foreign power, as she might have done, these dangers would have been still greater. They have been avoided by her voluntary and peaceful annexation to the United States. Texas, from her position, was a natural and almost indispensable part of our territories. Fortunately, she has been restored to our country, and now constitutes one of the States of our Confederacy, “upon an equal footing with the original States.” The salubrity of climate, the fertility of soil, peculiarly adapted to the production of some of our most valuable staple commodities, and her commercial advantages must soon make her one of our most populous States.

New Mexico, though situated in the interior and without a seacoast, is known to contain much fertile land, to abound in rich mines of the precious metals, and to be capable of sustaining a large population. From its position it is the intermediate and connecting territory between our settlements and our possessions in Texas and those on the Pacific Coast.

Upper California, irrespective of the vast mineral wealth recently developed there, holds at this day, in point of value and importance, to the rest of the Union the same relation that Louisiana did when that fine territory was acquired from France forty-five years ago. Extending nearly ten degrees of  latitude along the Pacific, and embracing the only safe and commodious harbors on that coast for many hundred miles, with a temperate climate and an extensive interior of fertile lands, it is scarcely possible to estimate its wealth until it shall be brought under the government of our laws and its resources fully developed. From its position it must command the rich commerce of China, of Asia, of the islands of the Pacific, of western Mexico, of Central America, the South American States, and of the Russian possessions bordering on that ocean. A great emporium will doubtless speedily arise on the Californian coast which may be destined to rival in importance New Orleans itself. The depot of the vast commerce which must exist on the Pacific will probably be at some point on the Bay of San Francisco, and will occupy the same relation to the whole western coast of that ocean as New Orleans does to the valley of the Mississippi and the Gulf of Mexico. To this depot our numerous whale ships will resort with their cargoes to trade, refit, and obtain supplies. This of itself will largely contribute to build up a city, which would soon become the center of a great and rapidly increasing commerce. Situated on a safe harbor, sufficiently capacious for all the navies as well as the marine of the world, and convenient to excellent timber for shipbuilding, owned by the United States, it must become our great Western naval depot.

It was known that mines of the precious metals existed to a considerable extent in California at the time of its acquisition. Recent discoveries render it probable that these mines are more extensive and valuable than was anticipated. The accounts of the abundance of gold in that territory are of such an extraordinary character as would scarcely command belief were they not corroborated by the authentic reports of officers in the public service who have visited the mineral district and derived the facts which they detail from personal observation. Reluctant to credit the reports in general circulation as to the quantity of gold, the officer commanding our forces in California visited the mineral district in July last for the purpose of obtaining accurate information on the subject. His report to the War Department of the result of his examination and the facts obtained on the spot is herewith laid before Congress. When he visited the country there were about 4,000 persons engaged in collecting gold. There is every reason to believe that the number of persons so employed has since been augmented. The explorations already made warrant the belief that the supply is very large and that gold is found at various places in an extensive district of country.

Information received from officers of the Navy and other sources, though not so full and minute, confirms the accounts of the commander of our military force in California. It appears also from these reports that mines of quicksilver are found in the vicinity of the gold region. One of them is now being worked, and is believed to be among the most productive in the world.

The effects produced by the discovery of these rich mineral deposits and the success which has attended the labors of those who have resorted to them have produced a surprising change in the state of affairs in California. Labor commands a most exorbitant price, and all other pursuits but that of searching for the precious metals are abandoned. Nearly the whole of the male population of the country have gone to the gold districts. Ships arriving on the coast are deserted by their crews and their voyages suspended for want of sailors. Our commanding officer there entertains apprehensions that soldiers can not be kept in the public service without a large increase of pay. Desertions in his command have become frequent, and he recommends that those who shall withstand the strong temptation and remain faithful should be rewarded.

This abundance of gold and the all-engrossing pursuit of it have already caused in California an unprecedented rise in the price of all the necessaries of life.

That we may the more speedily and fully avail ourselves of the undeveloped wealth of these mines, it is deemed of vast importance that a branch of the Mint of the United States be authorized to be established at your present session in California. Among other signal advantages which would result from such an establishment would be that of raising the gold to its par value in that territory. A branch mint of the United States at the great commercial depot on the west coast would convert into our own coin not only the gold derived from our own rich mines, but also the bullion and specie which our commerce may bring from the whole west coast of Central and South America. The west coast of America and the adjacent interior embrace the richest and best mines of Mexico, New Granada, Central America, Chili, and Peru. The bullion and specie drawn from these countries, and especially from those of western Mexico and Peru, to an amount in value of many millions of dollars, are now annually diverted and carried by the ships of Great Britain to her own ports, to be recoined or used to sustain her national bank, and thus contribute to increase her ability to command so much of the commerce of the world. If a branch mint be established at the great commercial point upon that coast, a vast amount of bullion and specie would flow thither to be recoined, and pass thence to New Orleans, New York, and other Atlantic cities. The amount of our constitutional currency at home would be greatly increased, while its circulation abroad would be promoted. It is well known to our merchants trading to China and the west coast of America that great inconvenience and loss are experienced from the fact that our coins are not current at their par value in those countries.

The powers of Europe, far removed from the west coast of America by the Atlantic Ocean, which intervenes, and by a tedious and dangerous navigation around the southern cape of the continent of America, can never successfully compete with the United States in the rich and extensive commerce which is opened to us at so much less cost by the acquisition of California.

The vast importance and commercial advantages of California have heretofore remained undeveloped by the Government of the country of which it constituted a part. Now that this fine province is a part of our country, all the States of the Union, some more immediately and directly than others, are deeply interested in the speedy development of its wealth and resources. No section of our country is more interested or will be more benefited than the commercial, navigating, and manufacturing interests of the Eastern States. Our planting and farming interests in every part of the Union will Be greatly benefited by it. As our commerce and navigation are enlarged and extended, our exports of agricultural products and of manufactures will be increased, and in the new markets thus opened they can not fail to command remunerating and profitable prices.

The acquisition of California and New Mexico, the settlement of the Oregon boundary, and the annexation of Texas, extending to the Rio Grande, are results which, combined, are of greater consequence and will add more to the strength and wealth of the nation than any which have preceded them since the adoption of the Constitution.

But to effect these great results not only California, but New Mexico, must be brought under the control of regularly organized governments. The existing condition of California and of that part of New Mexico lying west of the Rio Grande and without the limits of Texas imperiously demands that Congress should at its present session organize Territorial governments over them.

Upon the exchange of ratifications of the treaty of peace with Mexico, on the 30th of May last, the temporary governments which had been established over New Mexico and California by our military and naval commanders by virtue of the rights of war ceased to derive any obligatory force from that source of authority, and having been ceded to the United States, all government and control over them under the authority of Mexico had ceased to exist. Impressed with the necessity of establishing Territorial governments over them, I recommended the subject to the favorable consideration of Congress in my message communicating the ratified treaty of peace, on the 6th of July last, and invoked their action at that session. Congress adjourned without making any provision for their government. The inhabitants by the transfer of their country had become entitled to the benefit of our laws and Constitution, and yet were left without any regularly organized government. Since that time the very limited power possessed by the Executive has been exercised to preserve and protect them from the inevitable consequences of a state of anarchy. The only government which remained was that established by the military authority during the war. Regarding this to be a de facto government, and that by the presumed consent of the inhabitants it might be continued temporarily, they were advised to conform and submit to it for the short intervening period before Congress would again assemble and could legislate on the subject. The views entertained by the Executive on this point are contained in a communication of the Secretary of State dated the 7th of October last, which was forwarded for publication to California and New Mexico, a copy of which is herewith transmitted. The small military force of the Regular Army which was serving within the limits of the acquired territories at the close of the war was retained in them, and additional forces have been ordered there for the protection of the inhabitants and to preserve and secure the rights and interests of the United States.

No revenue has been or could be collected at the ports in California, because Congress failed to authorize the establishment of custom-houses or the appointment of officers for that purpose.

The Secretary of the Treasury, by a circular letter addressed to collectors of the customs on the 7th day of October last, a copy of which is herewith transmitted, exercised all the power with which he was invested by law.

In pursuance of the act of the 14th of August last, extending the benefit of our post-office laws to the people of California, the Postmaster-General has appointed two agents, who have proceeded, the one to California and the other to Oregon, with authority to make the necessary arrangements for carrying its provisions into effect.

The monthly line of mail steamers from Panama to Astoria has been required to “stop and deliver and take mails at San Diego, Monterey, and San Francisco.” These mail steamers, connected by the Isthmus of Panama with the line of mail steamers on the Atlantic between New York and Chagres, will establish a regular mail communication with California.

It is our solemn duty to provide with the least practicable delay for New Mexico and California regularly organized Territorial governments. The causes of the failure to do this at the last session of Congress are well known and deeply to be regretted. With the opening prospects of increased prosperity and national greatness which the acquisition of these rich and extensive territorial possessions affords, how irrational it would be to forego or to reject these advantages by the agitation of a domestic question which is coeval with the existence of our Government itself, and to endanger by internal strifes, geographical divisions, and heated contests for political power, or for any other cause, the harmony of the glorious Union of our confederated States—that Union which binds us together as one people, and which for sixty years has been our shield and protection against every danger. In the eyes of the world and of posterity how trivial and insignificant will be all our internal divisions and struggles compared with the preservation of this Union of the States in all its vigor and with all its countless blessings! No patriot would foment and excite geographical and sectional divisions. No lover of his country would deliberately calculate the value of the Union. Future generations would look in amazement upon the folly of such a course. Other nations at the present day would look upon it with astonishment, and such of them as desire to maintain and perpetuate thrones and monarchical or aristocratical principles will view it with exultation and delight, because in it they will see the elements of faction, which they hope must ultimately overturn our system. Ours is the great example of a prosperous and free self-governed republic, commanding the admiration and the imitation of all the lovers of freedom throughout the world. How solemn, therefore, is the duty, how impressive the call upon us and upon all parts of our country, to cultivate a patriotic spirit of harmony, of good-fellowship, of compromise and mutual concession, in the administration of the incomparable system of government formed by our fathers in the midst of almost insuperable difficulties, and transmitted to us with the injunction that we should enjoy its blessings and hand it down unimpaired to those who may come after us.

In view of the high and responsible duties which we owe to ourselves and to mankind, I trust you may be able at your present session to approach the adjustment of the only domestic question which seriously threatens, or probably ever can threaten, to disturb the harmony and successful operations of our system.

The immensely valuable possessions of New Mexico and California are already inhabited by a considerable population. Attracted by their great fertility, their mineral wealth, their commercial advantages, and the salubrity of the climate, emigrants from the older States in great numbers are already preparing to seek new homes in these inviting regions. Shall the dissimilarity of the domestic institutions in the different States prevent us from providing for them suitable governments? These institutions existed at the adoption of the Constitution, but the obstacles which they interposed were overcome by that spirit of compromise which is now invoked. In a conflict of opinions or of interests, real or imaginary, between different sections of our country, neither can justly demand all which it might desire to obtain. Each, in the true spirit of our institutions, should concede something to the other.

Our gallant forces in the Mexican war, by whose patriotism and unparalleled deeds of arms we obtained these possessions as an indemnity for our just demands against Mexico, were composed of citizens who belonged to no one State or section of our Union. They were men from slaveholding and nonslaveholding States, from the North and the South, from the East and the West. They were all companions in arms and fellow-citizens of the same common country, engaged in the same common cause. When prosecuting that war they were brethren and friends, and shared alike with each other common toils, dangers, and sufferings. Now, when their work is ended, when peace is restored, and they return again to their homes, put off the habiliments of war, take their places in society, and resume their pursuits in civil life, surely a spirit of harmony and concession and of equal regard for the rights of all and of all sections of the Union ought to prevail in providing governments for the acquired territories—the fruits of their common service. The whole people of the United States, and of every State, contributed to defray the expenses of that war, and it would not be just for any one section to exclude another from all participation in the acquired territory. This would not be in consonance with the just system of government which the framers of the Constitution adopted.

The question is believed to be rather abstract than practical whether slavery ever can or would exist in any portion of the acquired territory even if it were left to the option of the slaveholding States themselves. From the nature of the climate and productions in much the larger portion of it it is certain it could never exist, and in the remainder the probabilities are it would not. But however this may be, the question, involving, as it does, a principle of equality of rights of the separate and several States as equal copartners in the Confederacy, should not be disregarded.

In organizing governments over these territories no duty imposed on Congress by the Constitution requires that they should legislate on the subject of slavery, while their power to do so is not only seriously questioned, but denied by many of the soundest expounders of that instrument. Whether Congress shall legislate or not, the people of the acquired territories, when assembled in convention to form State constitutions, will possess the sole and exclusive power to determine for themselves whether slavery shall or shall not exist within their limits. If Congress shall abstain from interfering with the question, the people of these territories will be left free to adjust it as they may think proper when they apply for admission as States into the Union. No enactment of Congress could restrain the people of any of the sovereign States of the Union, old or new, North or South, slaveholding or nonslaveholding, from determining the character of their own domestic institutions as they may deem wise and proper. Any and all the States possess this right, and Congress can not deprive them of it. The people of Georgia might if they chose so alter their constitution as to abolish slavery within its limits, and the people of Vermont might so alter their constitution as to admit slavery within its limits. Both States would possess the right, though, as all know, it is not probable that either would exert it.

It is fortunate for the peace and harmony of the Union that this question is in its nature temporary and can only continue for the brief period which will intervene before California and New Mexico may be admitted as States into the Union. From the tide of population now flowing into them it is highly probable that this will soon occur.

Considering the several States and the citizens of the several States as equals and entitled to equal rights under the Constitution, if this were an original question it might well be insisted on that the principle of noninterference is the true doctrine and that Congress could not, in the absence of any express grant of power, interfere with their relative rights. Upon a great emergency, however, and under menacing dangers to the Union, the Missouri compromise line in respect to slavery was adopted. The same line was extended farther west in the acquisition of Texas. After an acquiescence of nearly thirty years in the principle of compromise recognized and established by these acts, and to avoid the danger to the Union which might follow if it were now disregarded, I have heretofore expressed the opinion that that line of compromise should be extended on the parallel of 36? 30’ from the western boundary of Texas, where it now terminates, to the Pacific Ocean. This is the middle ground of compromise, upon which the different sections of the Union may meet, as they have heretofore met. If this be done, it is confidently believed a large majority of the people of every section of the country, however widely their abstract opinions on the subject of slavery may differ, would cheerfully and patriotically acquiesce in it, and peace and harmony would again fill our borders.

The restriction north of the line was only yielded to in the case of Missouri and Texas upon a principle of compromise, made necessary for the sake of preserving the harmony and possibly the existence of the Union.

It was upon these considerations that at the close of your last session I gave my sanction to the principle of the Missouri compromise line by approving and signing the bill to establish “the Territorial government of Oregon.” From a sincere desire to preserve the harmony of the Union, and in deference for the acts of my predecessors, I felt constrained to yield my acquiescence to the extent to which they had gone in compromising this delicate and dangerous question. But if Congress shall now reverse the decision by which the Missouri compromise was effected, and shall propose to extend the restriction over the whole territory, south as well as north of the parallel of 36? 30’, it will cease to be a compromise, and must be regarded as an original question.

If Congress, instead of observing the course of noninterference, leaving the adoption of their own domestic institutions to the people who may inhabit these territories, or if, instead of extending the Missouri compromise line to the Pacific, shall prefer to submit the legal and constitutional questions which may arise to the decision of the judicial tribunals, as was proposed in a bill which passed the Senate at your last session, an adjustment may be effected in this mode. If the whole subject be referred to the judiciary, all parts of the Union should cheerfully acquiesce in the final decision of the tribunal created by the Constitution for the settlement of all questions which may arise under the Constitution, treaties, and laws of the United States.

Congress is earnestly invoked, for the sake of the Union, its harmony, and our continued prosperity as a nation, to adjust at its present session this, the only dangerous question which lies in our path, if not in some one of the modes suggested, in some other which may be satisfactory.

In anticipation of the establishment of regular governments over the acquired territories, a joint commission of officers of the Army and Navy has been ordered to proceed to the coast of California and Oregon for the purpose of making reconnoissances and a report as to the proper sites for the erection of fortifications or other defensive works on land and of suitable situations for naval stations. The information which may be expected from a scientific and skillful examination of the whole face of the coast will be eminently useful to Congress when they come to consider the propriety of making appropriations for these great national objects. Proper defenses on land will be necessary for the security and protection of our possessions, and the establishment of navy-yards and a dock for the repair and construction of vessels will be important alike to our Navy and commercial marine. Without such establishments every vessel, whether of the Navy or of the merchant service, requiring repair must at great expense come round Cape Horn to one of our Atlantic yards for that purpose. With such establishments vessels, it is believed may be built or repaired as cheaply in California as upon the Atlantic coast. They would give employment to many of our enterprising shipbuilders and mechanics and greatly facilitate and enlarge our commerce in the Pacific.

As it is ascertained that mines of gold, silver, copper, and quicksilver exist in New Mexico and California, and that nearly all the lands where they are found belong to the United States, it is deemed important to the public interest that provision be made for a geological and mineralogical examination of these regions. Measures should be adopted to preserve the mineral lands, especially such as contain the precious metals, for the use of the United States, or, if brought into market, to separate them from the farming lands and dispose of them in such manner as to secure a large return of money to the Treasury and at the same time to lead to the development of their wealth by individual proprietors and purchasers. To do this it will be necessary to provide for an immediate survey and location of the lots. If Congress should deem it proper to dispose of the mineral lands, they should be sold in small quantities and at a fixed minimum price.

I recommend that surveyors-general’s offices be authorized to be established in New Mexico and California and provision made for surveying and bringing the public lands into market at the earliest practicable period. In disposing of these lands, I recommend that the right of preemption be secured and liberal grants made to the early emigrants who have settled or may settle upon them.

It will be important to extend our revenue laws over these territories, and especially over California, at an early period. There is already a considerable commerce with California, and until ports of entry shall be established and collectors appointed no revenue can be received.

If these and other necessary and proper measures be adopted for the development of the wealth and resources of New Mexico and California and regular Territorial governments be established over them, such will probably be the rapid enlargement of our commerce and navigation and such the addition to the national wealth that the present generation may live to witness the controlling commercial and monetary power of the world transferred from London and other European emporiums to the city of New York.

The apprehensions which were entertained by some of our statesmen in the earlier periods of the Government that our system was incapable of operating with sufficient energy and success over largely extended territorial limits, and that if this were attempted it would fall to pieces by its own weakness, have been dissipated by our experience. By the division of power between the States and Federal Government the latter is found to operate with as much energy in the extremes as in the center. It is as efficient in the remotest of the thirty States which now compose the Union as it was in the thirteen States which formed our Constitution. Indeed, it may well be doubted whether if our present population had been confined within the limits of the original thirteen States the tendencies to centralization and consolidation would not have been such as to have encroached upon  the essential reserved rights of the States, and thus to have made the Federal Government a widely different one, practically, from what it is in theory and was intended to be by its framers. So far from entertaining apprehensions of the safety of our system by the extension of our territory, the belief is confidently entertained that each new State gives strength and an additional guaranty for the preservation of the Union itself.

In pursuance of the provisions of the thirteenth article of the treaty of peace, friendship, limits, and settlement with the Republic of Mexico, and of the act of July 29, 1848, claims of our citizens, which had been “already liquidated and decided, against the Mexican Republic” amounting, with the interest thereon, to $2,023,832.51 have been liquidated and paid. There remain to be paid of these claims $74,192.26.

Congress at its last session having made no provision for executing the fifteenth article of the treaty, by which the United States assume to make satisfaction for the “unliquidated claims” of our citizens against Mexico to “an amount not exceeding three and a quarter millions of dollars,” the subject is again recommended to your favorable consideration.

The exchange of ratifications of the treaty with Mexico took place on the 30th of May, 1848. Within one year after that time the commissioner and surveyor which each Government stipulates to appoint are required to meet “at the port of San Diego and proceed to run and mark the said boundary in its whole course to the mouth of the Rio Bravo del Norte.” It will be seen from this provision that the period within which a commissioner and surveyor of the respective Governments are to meet at San Diego will expire on the 30th of May, 1849. Congress at the close of its last session made an appropriation for “the expenses of running and marking the boundary line” between the two countries, but did not fix the amount of salary which should be paid to the commissioner and surveyor to be appointed on the part of the United States. It is desirable that the amount of compensation which they shall receive should be prescribed by law, and not left, as at present, to Executive discretion.

Measures were adopted at the earliest practicable period to organize the “Territorial government of Oregon,” as authorized by the act of the 14th of August last. The governor and marshal of the Territory, accompanied by a small military escort, left the frontier of Missouri in September last, and took the southern route, by the way of Santa Fe and the river Gila, to California, with the intention of proceeding thence in one of our vessels of war to their destination. The governor was fully advised of the great importance of his early arrival in the country, and it is confidently believed he may reach Oregon in the latter part of the present month or early in the next. The other officers for the Territory have proceeded by sea.

In the month of May last I communicated information to Congress that an Indian war had broken out in Oregon, and recommended that authority be given to raise an adequate number of volunteers to proceed without delay to the assistance of our fellow-citizens in that Territory. The authority to raise such a force not having been granted by Congress, as soon as their services could be dispensed with in Mexico orders were issued to the regiment of mounted riflemen to proceed to Jefferson Barracks, in Missouri, and to prepare to march to Oregon as soon as the necessary provision could be made. Shortly before it was ready to march it was arrested by the provision of the act passed by Congress on the last day of the last session, which directed that all the noncommissioned officers, musicians, and privates of that regiment who had been in service in Mexico should, upon their application, be entitled to be discharged. The effect of this provision was to disband the rank and file of the regiment, and before their places could be filled by recruits the season had so far advanced that it was impracticable for it to proceed until the opening of the next spring.

In the month of October last the accompanying communication was received from the governor of the temporary government of Oregon, giving information of the continuance of the Indian disturbances and of the destitution and defenseless condition of the inhabitants. Orders were immediately transmitted to the commander of our squadron in the Pacific to dispatch to their assistance a part of the naval forces on that station, to furnish them with arms and ammunition, and to continue to give them such aid and protection as the Navy could afford until the Army could reach the country.

It is the policy of humanity, and one which has always been pursued by the United States, to cultivate the good will of the aboriginal tribes of this continent and to restrain them from making war and indulging in excesses by mild means rather than by force. That this could have been done with the tribes in Oregon had that Territory been brought under the government of our laws at an earlier period, and had other suitable measures been adopted by Congress, such as now exist in our intercourse with the other Indian tribes within our limits, can not be doubted. Indeed, the immediate and only cause of the existing hostility of the Indians of Oregon is represented to have been the long delay of the United States in making to them some trifling compensation, in such articles as they wanted, for the country now occupied by our emigrants, which the Indians claimed and over which they formerly roamed. This compensation had been promised to them by the temporary government established in Oregon, but its fulfillment had been postponed from time to time for nearly two years, whilst those who made it had been anxiously waiting for Congress to establish a Territorial government over the country. The Indians became at length distrustful of their good faith and sought redress by plunder and massacre, which finally led to the present difficulties. A few thousand dollars in suitable presents, as a compensation for the country which had been taken possession of by our citizens, would have satisfied the Indians and have prevented the war. A small amount properly distributed, it is confidently believed, would soon restore quiet. In this Indian war our fellow-citizens of Oregon have been compelled to take the field in their own defense, have performed valuable military services, and been subjected to expenses which have fallen heavily upon them. Justice demands that provision should be made by Congress to compensate them for their services and to refund to them the necessary expenses which they have incurred.

I repeat the recommendation heretofore made to Congress, that provision be made for the appointment of a suitable number of Indian agents to reside among the tribes of Oregon, and that a small sum be appropriated to enable these agents to cultivate friendly relations with them. If this be done, the presence of a small military force will be all that is necessary to keep them in check and preserve peace. I recommend that similar provisions be made as regards the tribes inhabiting northern Texas, New Mexico, California, and the extensive region lying between our settlements in Missouri and these possessions, as the most effective means of preserving peace upon our borders and within the recently acquired territories.

The Secretary of the Treasury will present in his annual report a highly satisfactory statement of the condition of the finances.

The imports for the fiscal year ending on the 30th of June last were of the value of $154,977,876, of which the amount exported was $21,128,010, leaving $133,849,866 in the country for domestic use. The value of the exports for the same period was $154,032,131, consisting of domestic productions amounting to $132,904,121 and $21,128,010 of foreign articles. The receipts into the Treasury for the same period, exclusive of loans, amounted to $35,436,750.59, of which there was derived from customs $31,757,070.96, from sales of public lands $3,328,642.56, and from miscellaneous and incidental sources $351,037.07.

It will be perceived that the revenue from customs for the last fiscal year exceeded by $757,070.96 the estimate of the Secretary of the Treasury in his last annual report, and that the aggregate receipts during the same period from customs, lands, and miscellaneous sources also exceeded the estimate by the sum of $536,750.59, indicating, however, a very near approach in the estimate to the actual result.

The expenditures during the fiscal year ending on the 30th of June last, including those for the war and exclusive of payments of principal and interest for the public debt, were $42,811,970.03.

It is estimated that the receipts into the Treasury for the fiscal year ending on the 30th of June, 1849, including the balance in the Treasury on the 1st of July last, will amount to the sum of $57,048,969.90, of which $32,000,000, it is estimated, will be derived from customs, $3,000,000 from the sales of the public lands, and $1,200,000 from miscellaneous and incidental sources, including the premium upon the loan, and the amount paid and to be paid into the Treasury on account of military contributions in Mexico, and the sales of arms and vessels and other public property rendered unnecessary for the use of the Government by the termination of the war, and $20,695,435.30 from loans already negotiated, including Treasury notes funded, which, together with the balance in the Treasury on the 1st of July last, make the sum estimated.

The expenditures for the same period, including the necessary payment on account of the principal and interest of the public debt, and the principal and interest of the first installment due to Mexico on the 30th of May next, and other expenditures growing out of the war to be paid during the present year, will amount, including the reimbursement of Treasury notes, to the sum of $54,195,275.06, leaving an estimated balance in the Treasury on the 1st of July, 1849, of $2,853,694.84.

The Secretary of the Treasury will present, as required by law, the estimate of the receipts and expenditures for the next fiscal year. The expenditures as estimated for that year are $33,213,152.73, including $3,799,102.18 for the interest on the public debt and $3,540,000 for the principal and interest due to Mexico on the 30th of May, 1850, leaving the sum of $25,874,050.35, which, it is believed, will be ample for the ordinary peace expenditures.

The operations of the tariff act of 1846 have been such during the past year as fully to meet the public expectation and to confirm the opinion heretofore expressed of the wisdom of the change in our revenue system which was effected by it. The receipts under it into the Treasury for the first fiscal year after its enactment exceeded by the sum of $5,044,403.09 the amount collected during the last fiscal year under the tariff act of 1842, ending the 30th of June, 1846. The total revenue realized from the commencement of its operation, on the 1st of December, 1846, until the close of the last quarter, on the 30th of September last, being twenty-two months, was $56,654,563.79, being a much larger sum than was ever before received from duties during any equal period under the tariff acts of 1824, 1828, 1832, and 1842. Whilst by the repeal of highly protective and prohibitory duties the revenue has been increased, the taxes on the people have been diminished. They have been relieved from the heavy amounts with which they were burthened under former laws in the form of increased prices or bounties paid to favored classes and pursuits.

The predictions which were made that the tariff act of 1846 would reduce the amount of revenue below that collected under the act of 1842, and would prostrate the business and destroy the prosperity of the country, have not been verified. With an increased and increasing revenue, the finances are in a highly flourishing condition. Agriculture, commerce, and navigation are prosperous; the prices of manufactured fabrics and of other products are much less injuriously affected than was to have been anticipated from the unprecedented revulsions which during the last and the present year have overwhelmed the industry and paralyzed the credit and commerce of so many great and enlightened nations of Europe.

Severe commercial revulsions abroad have always heretofore operated to depress and often to affect disastrously almost every branch of American industry. The temporary depression of a portion of our manufacturing interests is the effect of foreign causes, and is far less severe than has prevailed on all former similar occasions.

It is believed that, looking to the great aggregate of all our interests, the whole country was never more prosperous than at the present period, and never more rapidly advancing in wealth and population. Neither the foreign war in which we have been involved, nor the loans which have absorbed so large a portion of our capital, nor the commercial revulsion in Great Britain in 1847, nor the paralysis of credit and commerce throughout Europe in 1848, have affected injuriously to any considerable extent any of the great interests of the country or arrested our onward march to greatness, wealth, and power.

Had the disturbances in Europe not occurred, our commerce would undoubtedly have been still more extended, and would have added still more to the national wealth and public prosperity. But notwithstanding these disturbances, the operations of the revenue system established by the tariff act of 1846 have been so generally beneficial to the Government and the business of the country that no change in its provisions is demanded by a wise public policy, and none is recommended.

The operations of the constitutional treasury established by the act of the 6th of August, 1846, in the receipt, custody, and disbursement of the public money have continued to be successful. Under this system the public finances have been carried through a foreign war, involving the necessity of loans and extraordinary expenditures and requiring distant transfers and disbursements, without embarrassment, and no loss has occurred of any of the public money deposited under its provisions. Whilst it has proved to be safe and useful to the Government, its effects have been most beneficial upon the business of the country. It has tended powerfully to secure an exemption from that inflation and fluctuation of the paper currency so injurious to domestic industry and rendering so uncertain the rewards of labor, and, it is believed, has largely contributed to preserve the whole country from a serious commercial revulsion, such as often occurred under the bank deposit system. In the year 1847 there was a revulsion in the business of Great Britain of great extent and intensity, which was followed by failures in that Kingdom unprecedented in number and amount of losses. This is believed to be the first instance when such disastrous bankruptcies, occurring in a country with which we have such extensive commerce, produced little or no injurious effect upon our trade or currency. We remained but little affected in our money market, and our business and industry were still prosperous and progressive.

During the present year nearly the whole continent of Europe has been convulsed by civil war and revolutions, attended by numerous bankruptcies, by an unprecedented fall in their public securities, and an almost universal paralysis of commerce and industry; and yet, although our trade and the prices of our products must have been somewhat unfavorably affected by these causes, we have escaped a revulsion, our money market is comparatively easy, and public and private credit have advanced and improved.

It is confidently believed that we have been saved from their effect by the salutary operation of the constitutional treasury. It is certain that if the twenty-four millions of specie imported into the country during the fiscal year ending on the 30th of June, 1847, had gone into the banks, as to a great extent it must have done, it would in the absence of this system have been made the basis of augmented bank paper issues, probably to an amount not less than $60,000,000 or $70,000,000, producing, as an inevitable consequence of an inflated currency, extravagant prices for a time and wild speculation, which must have been followed, on the reflux to Europe the succeeding year of so much of that specie, by the prostration of the business of the country, the suspension of the banks, and most extensive bankruptcies. Occurring, as this would have done, at a period when the country was engaged in a foreign war, when considerable loans of specie were required for distant disbursements, and when the banks, the fiscal agents of the Government and the depositories of its money, were suspended, the public credit must have sunk, and many millions of dollars, as was the case during the War of 1812, must have been sacrificed in discounts upon loans and upon the depreciated paper currency which the Government would have been compelled to use.

Continue to Part II

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