longer than is prudent on the part of either government, have led me to believe that the present favorable moment should on no account be suffered to pass without putting the question for ever at rest. I feel confident that the government of her Britannic Majesty will take the same view of this subject, as I am persuaded it is governed by desires equally strong and sincere for the amicable termination of the controversy.

To the intrinsic difficulties of questions of boundary lines, especially those described in regions unoccupied, and but partially known, is to be added in our country the embarrassment necessarily arising out of our constitution, by which the general government is made the organ of negotiating and deciding upon the particular interests of the states on whose frontiers these lines are to be traced. To avoid another controversy in which a state government might rightfully claim to have her wishes consulted, previously to the conclusion of conventional arrangements concerning her rights of jurisdiction or territory, I have thought it necessary to call the attention of the government of Great Britain to another portion of our con terminous dominion, of which the division still remains to be adjusted. I refer to the line from the entrance of Lake Superior to the most northwestern point of the Lake of the Woods, stipulations for the settlement of which are to be found in the seventh article of the treaty of Ghent. The commissioners appointed under that article by the two governments having differed in their opinions, made separate reports, according to its stipulations, upon the points of disagreement, and these differences are now to be submitted to the arbitration of some friendly sovereign or state. The disputed points should be settled, and the line designated, before the territorial government of which it is one of the boundaries, takes its place in the Union as a state, and I rely upon the cordial co-operation of the British government to effect that object.

There is every reason to believe that disturbances like those which lately agitated the neighboring British Provinces will not again prove the sources of border contentions, or interpose obstacles to the continuance of that good understanding which it is the mutual interest of Great Britain and the United States to preserve and maintain.

Within the Provinces themselves tranquillity is restored, and on our frontier that misguided sympathy in favor of what was presumed to be a general effort in behalf of popular rights, and which in some instances misled a few of our more inexperienced citizens, has subsided into a rational conviction strongly opposed to all intermeddling with the internal affairs of our neighbors. The people of the United States feel, as it is hoped they always will, a warm solicitude for the success of all who are sincerely endeavoring to improve the political condition of mankind. This generous feeling they cherish toward the most distant nations; and it was natural, therefore, that it should be awakened with more than common warmth in behalf of their immediate neighbors. But it does not belong to their character, as a community, to seek the gratification of those feelings in acts which violate their duty as citizens, endanger the peace of their country, and tend to bring upon it the stain of a violated faith toward foreign nations. If, zealous to confer benefits on others, they appear for a moment to lose sight of the permanent obligations imposed upon them as citizens, they are seldom long misled. From all the information I receive, confirmed to some extent by personal observation, I am satisfied that no one can now hope to engage in such enterprises without encountering public indignation, in addition to the severest penaltics of the law.

Recent information also leads me to hope that the emigrants from her Majesty's Provinces, who have sought refuge within our boundaries, are disposed to become peaceable residents, and to abstain from all attempts to endanger the peace of that country which has afforded them an asylum. On a review of the occurrences on both sides of the line, it is satisfactory to reflect, that in almost every complaint against our country, the offence may be traced to emigrants from the Provinces who have sought refuge here. In the few instances in which they were aided by citizens of the United States, the acts of these misguided men were not only in direct contravention of the laws and well-known wishes of their own government, but met with the decided disapprobation of the people of the United States.

I regret to state the appearance of a different spirit among her Majesty's subjects in the Canadas. The sentiments of hostility to our people and institutions, which have been so frequently expressed there, and the disregard of our rights which has been manifested on some occasions, have, I am sorry to say, been applauded and encouraged by the people, and even by some of the subordinate local authorities, of the Provinces. The chief officers in Canada fortunately have not entertained the same feeling, and have probably prevented excesses that must have been fatal to the peace of the two countries.

I look forward anxiously to a period when all the transactions which have grown out of this condition of our affairs, and which have been made the subjects of complaint and remonstrance by the two governments respectively, shall be fully examined, and the proper satisfaction given where it is due from either side.

Nothing has occurred to disturb the harmony of our intercourse with Austria, Belgium, Denmark, France, Naples, Portugal, Prussia, Russia, or Sweden. The internal state of Spain has sensibly improved, and a wellgrounded hope exists that the return of peace will restore to the people of that country their former prosperity, and enable the government to fulfil all its obligations at home and abroad. The government of Portugal, I have the satisfaction to state, has paid in full the eleventh and last instalment due to our citizens for the claims embraced in the settlement made with it on the 3d of March, 1837.

I lay before you treaties of commerce negotiated with the Kings of Sardinia and of the Netherlands, the ratifications of which have been exchanged since the adjournment of Congress. The liberal principles of these treaties will recommend them to your approbation. That with Sardinia is the first treaty of commerce formed by that kingdom, and it will, I trust, answer the expectations of the present sovereign, by aiding the development of the resources of his country, and stimulating the enterprise of his people. That with the Netherlands happily terminates a long existing subject of dispute, and removes from our future commercial intercourse all apprehension of embarrassment. The King of the Netherlands has also, in farther illustration of his character for justice, and of his desire to remove every cause of dissatisfaction, made compensation. for an American vessel captured in 1800 by a French privateer, and carried into Curaçoa, where the proceeds were appropriated to the use of the colony, then, and for a short time after, under the dominion of Holland.

The death of the late Sultan has produced no alteration in our relations with Turkey. Our newly appointed minister resident has reached Constantinople, and I have received assurances from the present ruler that the

obligations of our treaty and those of friendship will be fulfilled by himself in the same spirit that actuated his illustrious father.

I regret to be obliged to inform you that no convention for the settlement of the claims of our citizens upon Mexico has yet been ratified by the gov ernment of that country. The first convention formed for that purpose was not presented by the President of Mexico for the approbation of its Congress, from a belief that the King of Prussia, the arbitrator in case of disagreement in the joint commission to be appointed by the United States and Mexico, would not consent to take upon himself that friendly office. Although not entirely satisfied with the course pursued by Mexico, I felt no hesitation in receiving in the most conciliatory spirit the explanation offered, and also cheerfully consented to a new convention, in order to arrange the payments proposed to be made to our citizens in a manner which, while equally just to them, was deemed less onerous and inconvenient to the Mexican government. Relying confidently upon the intentions of that government, Mr. Ellis was directed to repair to Mexico, and diplomatic intercourse has been resumed between the two countries. The new convention has, he informs us, been recently submitted by the President of that republic to its Congress, under circumstances which promise a speedy ratification; a result which I cannot allow myself to doubt.

Instructions have been given to the Commissioner of the United States under our convention with Texas, for the demarcation of the line which separates us from that Republic. The commissioners of both governments met in New Orleans in August last. The joint commission was organized and adjourned to convene at the same place on the twelfth of October. It is presumed to be now in the performance of its duties.

The new government of Texas has shown its desire to cultivate friendly relations with us, by a prompt reparation for injuries complained of in the cases of two vessels of the United States.

With Central America a convention has been concluded for the renewal of its former treaty with the United States. This was not ratified before the departure of our late chargé d'affaires from that country, and the copy of it brought by him was not received before the adjournment of the Senate at the last session. In the meanwhile, the period limited for the exchange of ratifications having expired, I deemed it expedient, in consequence of the death of the chargé d'affaires, to send a special agent to Central America, to close the affairs of our mission there, and to arrange with the government an extension of the time for the exchange of ratifications.

The commission created by the states which formerly composed the Republic of Colombia, for adjusting the claims against that government, has, by a very unexpected construction of the treaty under which it acts, decided that no provision was made for those claims of citizens of the United States which arose from captures by Colombian privateers, and were adjudged against the claimants in the judicial tribunals. This decision will compel the United States to apply to the several governments formerly united for redress. With all these New Grenada, Venezuela, and Ecuador, a perfectly good understanding exists. Our treaty with Venezuela is faithfully carried into execution, and that country, in the enjoyment of tranquillity, is gradually advancing to prosperity under the guidance of its pres ent distinguished President, General Paez. With Ecuador, a liberal commercial convention has lately been concluded, which will be transmitted to the Senate at an early day.

With the great American Empire of Brazil, our relations continue unchanged, as does our friendly intercourse with the other governments of South America-the Argentine Republic, and the republics of Uraguay, Chili, Peru and Bolivia. The dissolution of the Peru-Bolivian Confederation may occasion some temporary inconvenience to our citizens in that quarter, but the obligations on the new governments which have arisen out of that confederation, to observe its treaty stipulations, will no doubt be soon understood, and it is presumed that no indisposition will exist to fulfil those which it contracted with the United States.

The financial operations of the government during the present year have, I am happy to say, been very successful. The difficulties under which the treasury department has labored from known defects in the existing laws relative to the safe-keeping of the public moneys, aggravated by the suspension of specie payments by several of the banks holding public deposites, or indebted to public officers for notes received in payment of public dues, have been surmounted to a very gratifying extent. The large current expenditures have been punctually met, and the faith of the government in all its pecuniary concerns has been scrupulously maintained.

The nineteen millions of treasury notes authorized by the act of Congress of 1837, and the modifications thereof, with a view to the indulgence of merchants on their duty bonds, and of the deposite banks in the payment of public moneys held by them, have been so punctually redeemed as to leave less than the original ten millions outstanding at any one time, and the whole amount unredeemed now falls short of three millions. Of these the chief portion is not due till next year, and the whole would have been already extinguished could the treasury have realized the payments due to it from the banks. If those due from them during the next year, shall be punctually made, and if Congress shall keep the appropriations within the estimates, there is every reason to believe that all the outstanding treasury notes can be redeemed, and the ordinary expenses defrayed, without imposing on the people any additional burden, either of loans or increased taxes. To avoid this, and to keep the expenditures within reasonable bounds, is a duty, second only in importance to the preservation of our national character, and the protection of our citizens in their civil and political rights. The creation, in time of peace, of a debt likely to become permanent, is an evil for which there is no equivalent. The rapidity with which many of the states are apparently approaching to this condition, admonishes us of our own duties, in a manner too impressive to be disregarded. One, not the least important, is to keep the federal government always in a condition to discharge with ease and vigor its highest functions, should their exercise be required by any sudden conjuncture of public affairs, a condition to which we are always exposed, and which may occur when least expected. To this end, it is indispensable that its finances should be untrammelled, and its resources, as far as practicable, unincumbered. No circumstance could present greater obstacles to the accomplishment of these vitally important objects, than the creation of an onerous national debt. Our own experience, and also that of other nations, has demonstrated the unavoidable and fearful rapidity with which a public debt is increased, when the government has once surrendered itself to the ruinous practice of supplying its supposed necessities by new loans. The struggle, therefore, on our part, to be successful, must be made at the threshold. To make our efforts effective, severe economy is necessary. This is the surest provision for the

national welfare; and it is, at the same time, the best preservative of the principles on which our institutions rest. Simplicity and economy in the affairs of state have never failed to chasten and invigorate republican principles, while these have been as surely subverted by national prodigality, under whatever specious pretext it may have been introduced or fostered.

These considerations cannot be lost upon a people who have never been inattentive to the effect of their policy upon the institutions they have created for themselves; but at the present moment their force is augmented by the necessity which a decreasing revenue must impose. The check lately given to importations of articles subject to duties, the derangements in the operations of internal trade, and especially the reduction gradually taking place in our tariff of duties, all tend materially to lessen our receipts; indeed, it is probable that the diminution resulting from the last cause alone, will not fall far short of five millions of dollars in the year 1842, as the final reduction of all duties to twenty per cent. then takes effect. The whole revenue then accruing from the customs, and from the sales of public lands, if not more, will undoubtedly be wanted to defray the necessary expenses of the government under the most prudent administration of its affairs. These are circumstances that impose the necessity of rigid economy, and require its prompt and constant exercise. With the legislature rests the power and duty of so adjusting the public expenditure as to promote this end. By the provisions of the constitution, it is only in consequence of appropriations made by law, that money can be drawn from the treasury; no instance has occurred since the establishment of the government in which the executive, though a component part of the legislative power, has interposed an objection to an appropriation bill on the sole ground of its extravagance. His duty in this respect has been considered fulfilled by requesting such appropriations only as the public service may be reasonably expected to require. In the present earnest direction of the public mind toward this subject, both the executive and the legislative have evidence of the strict responsibility to which they will be held; and while I am conscious of my own anxious efforts to perform with fidelity this portion of my public functions, it is a satisfaction to me to be able to count on a cordial co-operation from you.

At the time I entered upon my present duties, our ordinary disbursements without including those on account of the public debt, the postoffice, and the trust funds in charge of the government had been largely increased by appropriations for the removal of the Indians, for repelling Indian hostilities, and for other less urgent expenses which grew out of an overflowing treasury. Independent of the redemption of the public debt and trusts, the gross expenditures of seventeen and eighteen millions in 1834 and 1835, had, by these causes, swelled to twenty-nine millions in 1836, and the appropriations for 1837, made previously to the 4th of March, caused the expenditures to rise to the very large amount of thirty-three millions. We were enabled during the year 1838, notwithstanding the continuance of our Indian embarrassments, somewhat to reduce this amount; and that for the present year, 1839, will not, in all probability, exceed twenty-six millions-or six millions less than it was last year. With a determination, so far as depends on me, to continue this reduction, I have directed the estimates for 1840 to be subjected to the severest scrutiny, and to be limited to the absolute requirements of the public service. They will be found less than the expenditures of 1839, by over five millions of dollars.

The precautionary measures which will be recommended by the secre