WESTiLKJN. J3EMOCJRA-T, OHRLOTTIE, N & ."I : i t ? - ; i : I I 1 i 1 ! I -4i jli'-l u 4 if r- 1 I. is", i . !.. . : ! , t 4 t ; t I 1 i - l t J ; , ; I i i ". s ti Mi 1 ;i I 1 : 4 4 ; 1 i 'i I PRESIDENT'S MESSAGE. ".Fellow-Citizens of the Senate- and Bouse of Representatives : . To express gratitude to God; in the namo of .the people,: for the preservation of the United States, is mj first duty in addressiog you. Our thoughts next revert to the death of the late President by an act of parricidal treason. Tbe ffrief of tbe nation is still fresh; it finds some flolace in the consideration that he lived to en joy the highest proof of its confidence by enter ing on the renewed term of the Chief Magistra cy, to which he bad been elected; tbat he brought the civil war substantially to a close; that his loss was deplored in all parts of the Union; and that foreign nations have rendered justice to his memory. His removal oast upon me a heavier weight of care& than evr devolved, upon any one of bis predecessors. -To fulfil my trust 1 oeea tbe support ana ccnnaencc o: an ; who aro associated with me in the various de- j partments of Government, and tb! support and 1 .confidence ol the people, lnere is but oneway in which 1 can hope to gain their necessary aid; it is, to state with'frankness tbe principles which guide my conduct, and their application to the present state of affairs well aware that the effi- ciency ol my labors will, in a great measure, de- pend on your and their undivided approbation Tbe Union of the United States of America - was intended by its authors to last as long as tbe States the)selves'shall last. "The Union SHALli be perpetual" are the words of the Confederation. "To form a more perfect Union," by an ordinance of the- people of the United States, is the declared purpose of the Constitution. The hand of Divine Providence was never more plainly visible in the affairs of men than in the framing and the adopting of that instrument. It is, beyond comparison, the greatest event in American history; and indeed ts it not, of all events in modern times, the most pregnant with consequences for every people of the earth? The members of the Convention which prepared it; brought to their work the experience of the Confederation, of their several States, and of other Republican Governments, old and new; but they Deeded and they obtained a wisdom superior to txperience. And when for its validity it required the approval of a people that occupied a largo part of a continent and acted separately in many distinct couveu tioos, what is more wonderful than that, after earnest contention and long discussion, all feel .ings and all opinions were ultimately drawn in one way to its support? The Constitution to which life was thus im parted contains within itself ample resources for its own preservation. It has power to enforce tbe laws, puoish treason, and ensure domestic tranquility. In casa of the usurpation of the ' Government of a State by one man, or an oli garchy, it becomes a duty of the United States to make good the guarantee fo that State of a j ui : v , c ... i ... I vyuv .uaii iuiui ui ;uvt;i iiujciii, uuu ou in luaiu- tain the homogencousness of all. Does the lapse of time reveal defect A simple mode amendment is provided in the Constitution self, so that iis conditions can always be made to conform to the rt"7irt,nient9 i advancing civilization. No room is allowed even for the thought of a possibility of its coming to an end. f And tbeBe powers of sclf-prc,scrvation have al ways been asserted in their complete integrity by every patriotic Chief Magistrate by Jeffer son and Jackson, not less than by Washington and Madison. The parting advice of the Father of his Country, while yet President, to the peo ple of the United States, was, tbat "the free Oonsiitution. which was the work of their hanjds, ' might be sacredly maintained;" and the inau gural words of Piesident Jefferson held up "the preservation of the General Government, in its constitutional vigor, as the sheet anchor of our peace at home and safety abroad." The Con stitution is the work of "the people of the Uaited States," and it should be as indestructible as the people. It is not strange that the framers of the Con stitution, which bad no model in tho past, should not have fully comprehended the excel lence of their own work. Fresh from a strug gle gainst arbitrary power, many patnots suf fered from harrassing fours of an absorption of the State Governments by the General Govern ment, and many from a dread that the States would break away from their orbits. But the very greatness of our country should allay the apprehcusion of encroachments by the General Government. ,t"a. subjects that come unques tionably withU.irts jurisdiction are so numerous, . that it must ever naturally refuse to be embar rassed by questions that lie beyond it. Were it otherwise, the Executive would sink beyond the burden; tbe channels of justice would be choked; legislation would be obstructed by ex cess; so that there is a greater temptation to .exercise some of the functions of the General Government through tbe States than to trespass on their rightful sphere. "The absolute acqui esence in the decisions of the majority" was, at the beginning of the century, enforced by Jef ferson "as tbe vital principle of the Republics," and the events of the last four years have estab lished, we will" hope forever, that thcro lies lo .appeal to force. ' The maintainance of the Union brings with it "the sup"port of the State Governments in all their rights;" but it is not one of th ? rights of any State Government to renounce its own place in the Union, or to nullify the laws of tho Un ion. The largest liberty is to be maintained in the discussion of tbe aots of the Federal Gov ernment; but there is no appeal from its laws, except to the various branches of that Govern ment itself, or to the people, who grant to the .members of tBe Legislative and of the Execu tive Departments no tenure but a limited one, and in that manner always retain the powers of redress. "The sovereignty of the States" is the lan guage of the Confederacy, and not the language of the Constitution.. Tho. latter contains the emphatic words: "The Constitution, aud the - Jaws of the Unitcd States which shall be made in pursuance thereof, and all treaties made or which shall be made under the authority of the .United States, shall be the supreme law of the land; and the judges in every State.shall be bound thereby, anythiug in the constitution or laws of any State to the contrary notwithstand ing." .tog Certaioly the Government of the United .States is a limited government; and so is every State government a limited government. With :U8, this idea of,limitatioti spreads through every form of administration, general, State, and mu nicipal, . and rests on the great distinguishing principle of tbe recognition of the rights of man. The ancient republics absorbed the individual .10 the State, prescribed his religion, and con trolled hia activity. Tho American system ,.rests" on the assertion of the equal right of every .man. to life, liberty, and the pursuit of happi ness to freedom of conscience, to the culture :Hperp:sc of all his faeultie3. As a con?e-j ouence the State Government is limited, as to the General Government in the interest of Un ion as to the individual citizen in the interest of freedom. m ' -'. States, with proper limitations of power, are essential to the existence of the Constitution of the United States. At tbe very commence-, nient, wben we assumed a place among the ; Powers of tbe earth, the Declaration of Inde- nendence was adooted bv Stares; so also were.! r. . .. i k it v i j i tne Articles oi "jonieaerauuii, uuu wueu me Peonle of tbe United States ordained, and es- tablished tbe Constitution, it was the assent of the States, one by one, which gave it vitality, j in tbe name of the whole people, that, on the In the event, too, of any amendment to the i one side, the plan of restoration shall proceed in Constitution, the proposition of Congress needs j conformity with a willingness to cast tbe disor thc confirmation of States. Without States, ders of the past into oblivion; and that, on the I one great branch of the legislative., government I would be wanting. And, if we look beyond the letter of the Constitution to the character ot our country, its capacity for comprehending within its jurisdiction a vast continental empire is due to the system of States. The best sc - curiry for tbe perpetual existence of the States is the "supreme authority" of the Constitution of tbe United States. The perpetuity of the Constitution brings with it tbe perpetuity of ' . . , . . , ..,-.i ' ti, h.u 0.;,f . without the parts, nor the parts without the wmcu are now resuming ineirp. aces im iue iami whole. So long as the Constitution of the ' o( the Union to give this pledge of perpetual United States endures, the States will endure: loyalty and peace. Until it is done, the past, the destruction of the one is the destruction of the other; the preservation of the one is the preservation of the other. I have thus explained my views of the mu tual relations of the Constitution and the States, ( oscausu luey uiiiuiu me prmui jie uu nuiuu j. have sought to solve the momentous questions and overcome the appalling difficulties that met me at the very commencement of my adminis- ! tration. It bas been my steadfast object to es- j cape from the sway of momentary passions, and j to derive a healing policy from the fundaraetal j aud unchanging principles of the Constitution, j I found the States suffering from the effects I aF nirjW it4i Ui.Qicfonio tn tVitt I !dn t r a 1 ( nr. ernment appeared to have exhausted itself. The United States had recovered possession of their forts and arsenals; and their armies were in the occupation of every State which had at-, tempted to secede. Whether tbe territory within the limits of those States shoud be held as conqueied territory, under military authority emanating from the President as the head of i the army, was the first question that presented itself for decision. Now, military governments established for an indefinite period, would have offered no securi ty for the early suppression of discontent; would have divided the people into vanquishers and the vanquished; and would have envenomed hatred, lather than restored affection. Once established, no precise limit to their continu ance was conceivable. They would have occa sioned an incalculable and exhausting expense. Peaceful emigration to and from that nortion of ot the country is one of .the best means that can be It- thought of for the rpstnrniiiin nf harmnnv! anrl that emigration would have been prevented; for what emigrant from abroad, what industrious citizen at home, would place himself willingly under military rule? The chief persons who would have followed in the train of the army would have been dependents on the General Government, or men who expected profit from the miseries of their erring fellow-citizens. The powers of patronage and rule which would have been exercised, under- the President, over a vast, and populous, and naturally wealthy re gion, are greater than, unless under extreme necessity, I should be willing to eutrust to any one man; they are such as, for myself, I could never, unless on occasions o:.rreat emergency consent to exercise. The wilful use of sush ... . , , . , powers, it continued through a period of years, would have endangered the purity of the gene- ral administration and the liberties of the States which remained loyal. ISesiJes tbe policy of military rule over a con quered territory would have implied that the States whose inhabitants may have taken part in the rebellion had, by the act of those inhabi tants, ceased .to exist. But the true theory is, that all pretended acts of secession were, from the beginning, null and void. The States can not commit treason, nor screen the individual citizens who may have committed treason, any more than they can make valid treaties or en gage iu lawful commerce with any forei-m Pow er. The States attempting to secede ,; placed themselves in a condition where their vitalitv was impaired, but not" extinguished their func tions suspended, but not destroyed. But if any State neglects qr refuses to perform its offices, there is the more need that the Gene ral Government should maintain all its authority, and as soon as practicable, resume the exereie of all its funclions. On this principle I have acted, and have gradually and quietly, and by almost imperceptible steps, sought to restore the right ful energy of the General Government and of the States. To that end, Provisional Governors have been appointed for the States, Conventions called, Governors elected, Legislatures assembled, and Senators and Representatives chosen to the Congress of the United States. At the same time, the Courts of tfie United States,, as far as could be done, have been reopened, so that the laws of the United States ma be enforced through their agency. Tho' blockade has been removed and the ciwtom-houses re-established in ports of entry, so that the revenue of the United States may be collected. Tbe Post Office De partment renews its ceaseless activity.' and the General Government is thereby enabled to com municate promptly with its officers and agents. The courts bring security to persons and proper ty; the opening of the ports invites tlio restora tion of industry and commerce; . the post office renews the facilities of social intercourse and of V.iKmnce A fit ic it lmrn .. n . 1 . the restoration of each one of these functions of the General Government brings with it a bless ing to tbe States over which they are extended? Is it not a sure promise of harmony and renewed attachment to the Union that, after all that has happened, the return of the General Government is known only as a beneficence! I know very well that, this po'icy is attended with some risk; that for its success it? requires at least the acquiescence of the States w hich it con cerns; that it implies an invitation to those States by renewing their allegiance to the United States! to resume their functions as States of the Ui.inn But it is a risk that must be taken; iu the choice t of difficulties, it is the smalle-t risk; and to di minish, and, if possible, to remove all danger I ! . ' "rt,1otr Have telt it incumbent on me to- assert one other power of the General Governmenr the power of 1 partlon. As no btate can ttrrow a defence over A - 1 the crime of treason the power of pardon is ex clusively vested in the Executive Government of the United States. In exercising that power I have taken every precaution to connect it with the clearest recognition of the binding force of the laws of the United States, and an unqualified acknowledgement of tho" great social "change of j condition in regard to slavery which lias grown i out of the .war. The next step which I have taken to restore tbe constitutional relations of the States, has been an invitation to them to participate in the high orhce of amending the Constitution. Lvery patriot must wish, for a general amnesty at the earliest epoch consistent with public safety. For this great end there is need of a concurrence of i it j .u- :..u ,..i ; " u'imvua, huu iuc spirit ui tuuiuai L'm-iuauuu. ah parties m the late terrible conflict must work; j together in harmony. It is not too much to ask, ! other, the evidence of sincerity su the future maintenance of the Union shall be put beyond t any doubt by the- ratmcation ot the proposed amendment to the Constitution, which provides j for; tbe abolitiou of slavery foiever within the 1 ,iraits of our country. So long as tbe adoption i of this amendment is delayed, so long will doubt nd jealousy and uncertainty prevail. This is the measure which will efface the sad memory of i the I)a.sl? this is the measure which will most cer- uiiniv can iioiiuiaiion. ana capital, aim securuy ; to Ulose parts ot the Union that need them most i Indeed it is not too much to ask of the States , . , . . .!... ! however much we may deure it, will not be for gotten. I he adoption ot the amendment reunites us beyond all power of disruption. It heals the wound that is still imperfectly dosed; it removes slavery, the element which has so long perplexed "and divided the countiy; it makes of us once more a united people, renewed and strengthened, bound more .than ever to mutual affection aud- support. The amendment to the Constitution being ... ,. . .. , ,-. , -i their Places in the two branches of the National -r . i . , . , , , " , , . restoration,' Here it is for vou, fellow-citizens of the Senate, and for you, fellow-citizens of the llouse of Representatiues, to judge, each of you for yourselves, of the elections, returns, and quali fications of your own members. - The full assertion of powers of the General Government requires the holding of Circuit Courts of the United States within the districts where their authority has been interrupted. In tho present posture of our public affairs, strong objections have been urged to holding those courts, in any of tbe States where the rebellion has existed; and it was ascertained, by inquiry, tbat the Circuit Court-of the United States would not be held within the District of Virginia during the autumn or early winter, nor until Congress should have "an opportunity to cousider an act on tho whole subject." To your deliberation the restoration of this branch of the civil authority of the United States is therefore necessarily referred, with the hope that early provision will be made for the resumption of all its functions. It is manifest, that treason, most flagrant ill character, has been committed. Persons who are charged with its commission should have fair and impar tial trials in the highest civil tribunals of the country, in order that the Constitution and the laws may be fully vindicated; the tiutb clearly established and affirmed that treason is a crime, that traitors should be punished and the offence made infamous; and, at the same time,, that tbe question may be judicially settled, finally and forever, that uo State of its own will has the right to renounce its place in the Union. Tfve relations of the General Government towards the four millions of iihabitants whom the, war has called into freedom, baVe engaged mv most serious considera- tion. On the propriety On the propriety of attempting? to make the nt-uiuru ciui-iui j inr juuciamauuuui lur jir..L-uuuvtr, i . 1 . . ...... i. .v.. i 1 : .1. . i : v uH.iuuonu.M. - pretations ot that instrument by its authors and then- ' eonfemnoraries. rmd recent legislation hv Confess. i Vhn, at the first movement towards" independence, the Congress of the U. States instructed the several States to institute government of their own, they left each State to dt-ckle for itself the conditions for tbe en-joj-nient of the elective franchise. During the period of the Confederacy, there continued to exist a very great diversity in ihe qualifications of electors in the several States; and cvru within a State a distinction of qualifications pr vailed with regard to the officers who were to be chosen. The Constitution of the U. States recognizes these diversities when it enjoins that, in the choice of members of the House of liepreseutatives'of the U. States, ''the electors in each State shall have the qualifications requisite for the most- numerous branch of the State Legislature."' After the formation of the Constitution, it remained, as before, the uniform usage for each State to enlarge the body of its electors accord inn to its Own illd"melit: ami under tliiu tvsti'm rmr o p. ' " i " " ? " State after another has proceeded to increase the num ber ot its electors, until now, universal suffrage, or something ne.-ir it. is the general rule. So .fixed was this reservation of power in the. habits of the people, and so unquestioned has been the interpretation of the Constitution, that during the civil war the latePrPsident never harbored the purpose certainly never avowed the purpose of disregarding it; and in. the acts of Con gress, during that period, nothing can be found which, during the 'continuation of hostilities, much less after their close, wonkMiave sanctioned any departure by the Kxecutive from a policy which has so universally obtained. Moreover, a concession of the elective fran chise to the freedmen. by act of the President of the U. States', must have been e.ttended to all colored men. w herever found, and so must have established a change of suffrage in the Northern. M iddle and-Western States, not less than in the Southern and Southwestern Such an act would have created a new f lass of voters, and would have been an assumption of power by the Presi dent which nothing in the Constitution or laws of the U. States would have warranted. On the other hand every danger of conflict is avoid ed when the settlement of the question is referred to the several States. " They eau, each. for itself, decide on the measure, and whether it is to be adopted at once and absolutely, or introduced gradually and with con ditions. In my judgment, the freedmen, if they show patience and manly virtues, will sooner obtain a par ticipation in' the elective franchise through the States thau through the General Government, even if it had power to intervene. When the tumult of emotions that have been raised by the suddenness of the social change shall have subsided, it may prove that they will receive the kindliest usage from seme of .those 011 whom they have heretofore most closely depended. - Hut while I have no doubt that now, after the close of the war. it is not competent for the General Govern ment to extend the elective franchise in the several States, it is equally clear that good faith rtqnires the security ot the freedmen in their liberty and their pro perty, their right to labor, and their right to claim the just return ot their labor. 1 cannot too strongly urge a dispassionate treatment of this subject, which should be carefully kept aloof from all party strife. We must equally avoid hasty assumptions ofany natural impos sibility for the two races to live sid by side, iu a state of mutual benefit and -good will." The experiment in volves us in no inconsistency; let us then go and make that experiment iu good faith, and not be too easily dis heartened. The country is in need of labor, and the freedmen are in need of employment, culture and pro tection. While their right of voluntary migration and expatriation is not to be questioned, I would not advise their forced removal and colonization.. Let us rather encourage tuem to nonorable and usetul industry, where it may be beneficial to themselves . and to the couutr"'": and jnstea1 of ha.ty anticipations ofthecer- !"in,ty f,f,fa'llure' H re be nothing wanting to me fair trial of the experiment. J he change in their condition is the substitution of labor by contract for the status of slavery. , The freedman cannot fairly be accused of un- willingness to work, so long as a doubt remains about his freedom ot choice in nis pursuits, and the certainty of bis recovering his stipulated wages. In this the in terests of the employer and the employed coincide. The employer desires in his workmen spirit and alacrity, and these etui be permanently secured in no other way. And if tbe one ought to be able to enforce the contract. so ought the ouier. mo public interest will be best H promoted if the several States will provide adequate pro- adopted, it would remain tor the estates, wiiose j the genius of free government, and ought not to be al nowms ha vp lippn so Inner in ahpvanee. tr resume, i lowed. ' Here, there isoio room for favored classes or tection and remedies for the freedmen."- Until this is'in some way accomplished, there is no chance for the ad vantageous use of their labor; and the blame of ill suc cess will not rest on them. , . " 1 know that sincere philanthrophy is earnest tor the immediate realization of its remotest aims; but time is always an element in reform. , It is one of the greatest acts on record to have brought four millions ot people into freedom. The career of free industry must be fairly opened to them; and then their future prosperity and condition must, after all, rest mainly on themselves. If thev fail, and so perish away, let us be careful that f the failure shall not be attributable to any denial of jus- i j:ce In all that relates to the destiny ot.the freeoinen. we need not be too anxious to read the tuture; many incidents which, from a speculative point of view, 1 1 - - -I -11 l .11. a 1 miffin raiMs aniui w, quieiiy whuc mmM.-i. V ... that slavfrr i at an iiul nr mnr it pnil the ..nP r,f its evil, in tbe noint of view of nnblieeeo- ivii-. r - J J " ; niimv. becomes more and more apparent. Slavery was ! essentially a monopoly of labor, and-as siich locked the liad but the second besttbatice of findiug it ; and the foreign emigrant turned away from the region' where his condition would be so precarious. With the de struction of monopoly, free labor will hasten from all parts of the civilized world to assist ia developing vari ous and immeasurable resources wbich have bitherto laiu dormant. The eight or nine States nearest the Gnlf of Mexico have a soil of exuberant fertility, a cli mate friendly to long life, and can sustain a denser po pulatiou tluin is found as yet in any part of our coun try. Aud the future influx oY population 'to them will be mainly from the North, or from the most cultivated regions of Europe. From the sufferings that have at tended them during our late struggle, let us look away to the future. wh"ich is sure to be laden for them with greater prosperity than has ever before been known. The removal of the monopoly of slave labor is a pledge thatlhose regions will be peopled by a numerous and enterprising population, which will vie with any in the Union in compactness, inventive genius, wealth and industry. - Our Government springs from and was made for the people not the people for the Government. To them it owesallegiancc, and from them it must derive its courage, strength and wisdom. But. while the Gov ernment is thus bound to defer to the people, from whom it derives if existence, it should, from the very consideration of its origin, be strong in its power of re sistance to the establishment of inequalities. Monopo lits. nernetniHes and class lfn-islation are contrary to ' i i --n . . I monopolies; the principle of our government is that of equal laws and treedom ot industry, w nererer mono- poly attains a foot-hoM, it is sure to be a source of dan-j eer. discord and trouble. We shall but fulfill our du ties as legislators by according '"equal and exact justice to all men,' special privileges to none. The govern ment is subordinate to the people; but, as tbe agent and representative of the people, it must be held supe rior to monopolies, which, in themselves, ought never to be granted, and which, where they exist, must be subordinate and yield to the government. The Constitutian confers on Congress the light to re- fulate commerce among the several States. It is of tbe rst necessity, for tho maintenance of the Union, that that commerce should be free and unobstructed. No State can be justified in any. device to tax transit of travel and commerce between States. The position of many States is such that, if (hey were allowed to take advantage pf it for purpose of local revenue, the com merce between States might be injuriously burdened, or even virtually prohibited. It is best, while the coun try is still young, and while the tendency to dangerous monopolies of this kind is still feeble, to use the power of Congress so as to prevent any selfish impediment to the free circulationof men and merchandise. A tax on travel and merchandise, in their transit, constitutes one of the worst forms of monopoly! and the evil is increas ed if coupled with a denial of the choice of route. When the vast extent of our countryiscousidered.it is plain that every obstacle to the free circulation of commerce between the States ought to be sternly guarded against by appropriate legislation within the limits of the Con stitutidh. The report of the Secretary of the Interior explains the condition of the public lands, the transactions of the Patent Office and the Pepsion Bureau, the manage ment of our Indian affairs, the progress made in the construction of i he Pacific Railroad, and furnishes in formation in reference to matters of local interest in the District of Columbia. It also presents evidence of the successful operation of the Homestead Act, under the provisions of which 1,160,533 acres of the public lands were entered during the fiscal year- more than one fourth of the whole number of acres sold or otherwise disposed of during that period." It is estimated that the receipts derived from this source are sufficient to cover the expenses incident to the survey and disposal of the lands entered under this Act, and that payments in cash to the extent offrom forty to fifty per cent, will be made by settlers, who may thus at any time acquire title be fore the expiration of tho period it would otherwise vest. The homestead policy was established only after, long and earnest resistance ; .experience proves its wisdom. The lauds, in the hands of industrious settlers, whose labor creates wealth and contributes to the public re sources, are worth more to the LT. States than if they had been reserved as a solitude for future purchasers. Tile lamentable events of the last four years, and the sacrifices made by the gallant men of our Army and Navy, have swelled tbe record Jf the Pension JJureau trt an unprecedented extent. On the 3Uth day of June last, the total number of pensioners was 85,9i?U. requir ing for. their animal pay, exclusive of expenses, the sum of $8,023,44. The number of applications that have been allowed since that date will require a large increase of this amount for the next fiscal year. The means for the payment of the stipends due, under existing laws, to our disabled soldiers and sailors, and to the families of such as have perished in the service of the country, will no doubt be cheerfully and promptly granted. A grateful people will not hesitate to sanction any meas ures having for their object the relief ot soldiers mutilat ed and families made - fatherless in the efforts to pie serve our national existence. The report of the Postmaster General presents an encouraging exhibit of ?the operations of tbe Post X)ffice Oepartment, during tbe year. The revenues of the past year from the loyal States alone exceeded the maximum annuaL receipts from nil tbe States previous to the rebellion, in the sum of $6,038,001; and the annual average increase of revenue during the last tour years, compared with the revenues of tbe four years immediately preceding the rebel lion, was $3,533,845. The. revenues of "he Jaet fiscal year amounted to $14,556,158, and the expen ditures to $13,694,728, leaving a surplus of receipts over expenditures of $861,430. Progress has been mad iu restoring the postal service in the Southern States. The views presented by the Postmaster General against the policy of granting subsidies to ocean mail steamship lines upon established routes, and in favor of continuing tbe present system, which limits the compensation for ocean service to the postage cartings, are recommended to the careful consideration of Congress. It appears from the report of the Secretary of the Navy, that while, at the commencement of the pre sent year, there were-in commission 530 vessels of all classes and descriptions, armed with 3,000 guns and manned by 51,000 men, the number of vessels at prrscnt in commission is 117, with 830 guns and 12,128 men. By this prompt reduction of the naval forces the expenses of the Government have been largely diminished, and a number of vessels,- pur cbasecLfor naval purposes from the merchant ma rine, have been returned to the peaceful pursuits of commence. Since the suppression of active hostili ties our foreign squadrons have been re-established, and consists of vessels much more' efficient than those employed on similar service previous to tbe rebellion. The suggestion for the enlargement of the navy yards, and especially fcr the establishment of one in fresh water for iron-clad vessels, is de serving of consideration, as is also the recommenda tion for a different location and more ample grounds for the Nanl Academy. In tbe report of the Secretary of War, a general summary is given of the military campaigns of 18C4 and 1865, ending in the suppression of armed re sistance to the national authority in the insurgent States. The operations of the general administra tive Bureaus of the War Depart ment during the past year are detailed, and an estimate made of the ap propriations that will be required for military pur poses in tbe fiscal year commencing the 30th day of June. 1866. The national military force on the 1st of Mar, 1865, uumbered 1,0;0.5J6 men. ' It is pro posed to reduce the military establishment to a peace looting, comprenenaing hfty thousand troops of ail arms, organized so as to admit of au enlargement hy filling up the ranhs to eighty-two thousand six hundred, if the circumstances of the country should require an augmentation of the army. Tbe volun teer force ba3 already been reduced by the discbarge from service of over eight hundred thousand troops, and the Department is proceeding rapidly in tbe work oflurtiier reaucuon. lhC war estimates are - edaced from $516,240,131 to $33,8I4,4C1. which amount, ia tbe opinion of. tb Department, is ade- States wbem it prevailed against tbe incoming of free suojeci so presses usen on m.uu, iu i vbuhu industry. Where labor was the property of the capital- but lay before you my views of the measures which ut th white- man was excluded from emolovmeut. or are required for the pood character,- and, I might quate for a peace establishment. The measures of retrenchment In each Bureau and branch of the service exhibit a diligent economy worthy of com- mendation. Reference is ah?o made in the report to tha necessity of providing for a uniform miliUa systeii and to" the propriety of making suitable pro- vision for wounded and disabled officer and soldiers, The revenue svstem of the country is a subject of vital interest to its honor and prosperity. and should command tbe earnest consideration Con- eress. The Secretary of tbe Treasury will kiy be - fore you a full and detaiiea report or me receipts f and disbursements of the last fiscal year, of the first j quarter of tbe present fiscal year, of. the probable receipts and expenditures tor me oiner vnree quar ters, and ' tbe estimates for the year following the f j 18C6- , ra;ght content myself with a I v 1 " v wv. f 1 reference to that report, in which you will find all the information required for your deliberations and decision. But the paramount importance Jf . the almost sav. for the existence of this people. Iue life of a cepublic lies certainly in tbe energy, virtue, and intelligence of its citizens; but it is equally true tbat a good revenue system is the life of an organ ized government. I meet you at a time wben tbe nation bas voluntarily burdened itself with a debt unprecedented in our annals. Vastus i its amount, it fades away into nothing when compared with tbe countless blessings that will be conferred upon our country and upon-man by tbtj preservation of the nation's life. Now, on the first occasion of tbe meet ing of Congress since the return of 'peace it is of the utmost importance to inaugurate a just policy, which shall at once be put in motion, and wbich shall commend itself to those wb6 come after tis for its continuance. We ruust aim at nothing less than the complete effacement of the financial evils that neces-. sarily followed a state. of civil war. We .must en deavor to apply the earliest remedy to the deranged state of the currency, and not shrink from devising a policy wbich, without being oppressive to the people shall immediately begin to effect a reduction of the debt, and, if persisted in, discbarge it fully within a definitely fixed number of years. It is our duty to prepare in earnest for our recov ery from the ever-increasing evil3 of an irredeemable currency, without a sudden revulsion, and yet with out untimely procrastination, for tbat end we must, each in our respective position, prepare the way. I hold ittfce duty of the Executive to insist upon frugality in the expenditures; and a sparing economy is itself a great national resource. Ufthe Knnla (n n-Vi?li nii li!tv ho a Kann rriran f A ICCI1A noteSCcured by bonds of the United States, we may . A. ,... j , ' require the greatest moderation and prudence, and the laws must be rigidlv enforced when its limits are exceeded. We may, each ore of us, counsel our active and enterprising countrymen to be constantly on their guard, to liquidate debts contracted in a paper currency, and, by conducting business as nearly as possible on a system of cash payments or short credits, to bold themselves prepared to return to tbe standard of gold and silver. To aid our fellow-citizens in the prudent' management of their monetary affairs, the duty devolves on uj to dimin ish bylaw ths amount of paper money now in cir culation. Five years ago the bank-note circulation of the country amounted to not much more than two hundred millions; now tbe circulation, bank and national, exceeds seven bundredmillions. The simple statement of the .fact recommends more strongly than any words of mine could do, tbe ne cessity of our restraining this expansion. Tbe gradual reduction of the currency is tbe only meas ure that can save the business of the country from disastrous calamities; and this can be almost im perceptibly accomplished by gradually funding the national circulation in securities that may be made redeemable at the pleasure of tbe Government. Our debt is doubly secure first ia the actual wealth and still greater undeveloped resources of the country; and next in the character of our insti tutions. The most iutelligent observers among political economists have not failed to remark. that the public debt of a country is safe in proportion as its people are free; tbat the debt of a republic is the safest of all. Our history confirms and establishes the theory, and is, I firmly believe, destined to give it a still more sigual illustration. T.be secret of this superiority springs not merely from the fact that in a republic the national obligations are distributed more widely, through countless numbers- in -all classes of society; it has its root in the character of our laws. Here all men contribute to tbe public welfare, and bear tkeir fir share of the public bur dens. During the war, under the impulses of patri otism, the men of the great body of the people, w ith out regarc to their own comparative want of wealth, thronged to our armies and filled our fleets of war, and held themselves ready to offer their lives for the public good. Now, in their turn, tbe property and income of the country should bear their just proportion of the burden of taxation, while in our impost system, through menns of which increased vitality is incidentally imparled to all the industrial interests of the nation, tbe duties should be so ad justed as to fall most heavily on articles of luxury, leaving the necessaries of life as free from taxation as be absolute wants of the Government, economi-c-lly administered, will justify. No favored class should demand freedom from ossessmcnt, and th taxessh'culd be so distributed as not to fall unduly on tbe poor, but rather on tbe accumulated wealth of the country. We should look at the national debt just as it is not as a national "blessing, but as a heavy burden on the industry of the country, to be discharged without unnecessary delay. It is estimated by tbe Secretary of the Treasury that the expenditure for the fiscal year ending the 30tb of June, 1866, will exceed the receipts $112, 194,947. It is gratifying, however, to slate tbat it is also estimated that the revenue for the year end ing the 30th of June, 1 807. will. exceed the expendi tures in the sumtf $1 1 1,C82,818. This amount, or so much as may be deemed sufficient for the purpose, may be applied to the reduction of the public debt, which, on the 3 1st day of October, 1865, was $2,740, 854.750. Every reduction will diminish the total amount of interest to be paid, and so enlarge the means of still furlber reductions, until the whole shall be. liquidated; irnd this, as will be seen from the estimates of the Secretary of the Treasury ,'Tnay be accomplished by an mini payments even within a period not exceeding thirty years. I have fait.h that we shall do all this within a reasonable time; that, as we have amazed the world by the suppression of a civil war which was thought to be beyond the control of any Government, so we shall equally show the superiority of our institutions by the prompt and faithful discharge of our national obligations. Tbe Department of Agriculture, under iis present direction, is accomplishing much in developing and utilizing the vns',' agricultural capabilities of the country, and for information respecting tbefetails of its management reference is made to the annual report of the Cornraissioner. I have dwelt thus fullv on our domestic affair because of their transceudant importance. .Under any circumstances, our great extent of territory and variety of climate, producing almost everything tbat is necessary for the wants, and even the comforts of man, make ns'singularly independent of the varying policy of foreign Powers, and protect us against every temptation lo "en:angling alliances," while at the present moment the re-establishment of har mony, and the strength that comes from barmour, will be our best security against "nations who feel power and foreign light." -For myself, it has been and it will be my coiutanf aim to promote peace and amity with all foreign, nations and Powers; and J I have every reason t.o believe tbat thev all. without exception, are animated by the same disposition. Our relations with the Emperor of China, so recent in their origin, are most friendly. Our commerce with his dominions is receiving new developments: and it is very pleasing to find that tbe Government of that great Empire manifests satisfaction with our policy, and reposes just confidence in the" fairness which marks our intercourse. The unbroken bar--monybctweeo the United Stales and the Emperor of Russia is receiving a new mmnrt frnm an ntrr. 1 a. '.. .is it. . i t prire designed to carry telegraphic lines across the 1 hnd on the east and the west the two c"et ocean, continent of Asia, through bis dominions, and so to ! Other natiotu were wasted by civil wars for ag connect ns with all . Europe by a uew channel of ia- ! before they could establish for tbeinselve Ihe ce tercourse. Our commerce with South America is cessary degree of unity; tbe Intent conviction that about to receive encouragement by a direct line of.; mail steamships to the rising Empire of Brazil. The i distinguished party of men of science who Lave re ctntly left our country to make a scientific explora tion of the natural history ond rivers and mountain ranges of tbat region, Lave received from the Em peror that generous welcome which was to have been expected from bis constant friendsh p for the United States, nnd his well-know n zeal in promo ting the advancement of knowledge. A hope is en tertained that our commerce with the rich and j populous countries that border tbe Mediterranean 4 sea may be largely increased. Nothing will be ; wanting on the part of this Government to eitend the protection ot our flag over tbe enterprise of pur f fellow-citizens. We receivo from tbe Powers in that region assurances of good will; and his worthy of note that a special envoy bas brought nt tnesaagos ' of condolence on the death of our late Chief M;.- j istrate from tbe Bey of Tunis, whose rule includes i the old dominions of Carthage; on tbe African coast, 1 0ur domestic contest, now hannllr n.UA h.. la Our domestic contest, now happily ended, has left gome-trace in our relations with one at least of tha great maritime Powers. The formal accordance of belligerent rights to the insurgent States was un precedented, sod has' not been justified by tbe issue. " But in the systems of neutrality pursued by tbt Powers which made that concesion, there was a marked difference. Tire materials of war for tb insurgent States were furnished, iiva great measure, from tbe workshops of Great Britain; and British ships, manned by British subjects, and prepared for receiving British armaments, sallied from Ibe ports of Great Britain to make wnr on American com merce, under he shelter of a-commission from cbc insurgent States. These ships, having once escaped from British-ports, ever afterwards entered them in very part of tbe world, to refit, and so "to renew their depredations- The consequences of tbls eon duct were most disastrous to the States then in re bellion, increasing their desolation and misery by Ihe prolongation of our civil contest. It hnd, more over, the effect, to n gteat extent, to drive tbe American flag from (.he sea, and to transfer much of our shipping and our commerce to tbe very Tower whose subjects bad created ibe necessity for such a" . change. These events took place before I was called to tbe administration of the Government. Tlie sin cere desire for peace by wbich I am animated led me to apprere the proposal, already made, to submit tbe question wbich had thus arisen between ibe countries to arbitration. These questions are of such moment that they must have commanded the attention of the great Powers, and are so interwoven with the pcae and interests of every one of Ibem as to have ensured an impartial decision. I regret to inform you tbat Great Britain declined the arbi trament, but, on the other band, invited us to tbe formation of a joint commission to settle mutual claims between the two countries, from which those for ihe depredationbeforc mentioned should be ex cluded. The proposition, in that very, unsatisfac tory form, has been declined. " The United Stalestfiid not present tbe subject as an impeachment of the good faith of a Power which was professing the most friendly disposi'ion, but as involving questions of public law, of which the set tlement is essential lo the peace of nations; and, though pecuuiary repartition lo their injured citi zens would bare followed incidentally on a decisiou against Great Britain, such compensation was not their primary object. They had a higher motive, and it was in the interests of peace and justice to establish important principles of international law. The correspondence will be placed before you. The ground on which tbe British Minister restJ his jus tificivtionjs, substantially, ilmt Ibe municipal law of a nation, and' the domestic interpretations of that law, are the measure of its duty as a neutral; and I feel bound to declare my opinion, before you and before the world, that that justification cannot be sustained before tbe tribunal of nations. At the same time I do hot advie to any present. attempt at redress by acts of legislation. For Ihe future, friendship between tho two countries must rest on tbe basis of mutual justice. From tbe moment of the establishment of our free Constitution, the civilized world Imsiccu convulsed by revolutions in tbe interests ot democracy or mon archy; but through nil those revolutions tbe United States have wisely and firmly refused to become propagandists of republicanism. It is the only government suited to our condition; but we have never sought tJ impose it on others; -and we have consistently followed. Ihe advice of Washington to ' recommend it only by the careful pn serration and prudent use of Ihe blessing. During all the inter vening period the policy .of "European i'owcrsandof tbe United States has, on the whole, beeu harmo nious. Twice, indeed, rumors of the invasion of , some parts of-America, iu ihe interest of monarchy have prevailed; twice my predecessors have bad oc casion to announce ibe view of this nationHn re spect to such interference. On both occasions tbe remonstrance of the United States was respected, from a deep conviction, on the part of European Governments, that ihe system of non-ietcrference and mutual abstinence from pnpngandism was tbe true rule for the two hemispheres. Siuce those times we have advanced in wealth and power; but we retain the same purpose to leave Ihe nations of Europe to choose their own dynasties und form ibeir own systems of government. This consisted mod eration may justly demand a corresponding moder ation . We should regard it as a great calajuity to ourselves, to the cau.- e of good government, and to the peace of ihe world, should any European Power challenge the American people, as it we're, lo tbe defence of republicanism agai.-.st foreign interference. We cannot foresee and are unwilling to consider what opportunities might precut theuisekr; what combinations might offer to protect odrselveJ against designs inimical to our form of government. The United States desire to act in the future as they. have ever acted heretofore; they never will be driven from that course but by the aggression of European Tow ers; nnd w-e rely on the wisdom and justice of those Powers to respect the system of. nonhterference wbich has so long been sanctioned by time, and which, by its good results, bas approved itself to both contiaents. The correspondence between the United Slates and France, in reference to questions which have become subjects of discussion between toe two Gov ernments, will, at a proper time, be laid before Con gress. Wben, on the organization of our Government, under the Constitution, the President ot the United States delivered his Inaugural address to tbe two Houses of Congress, he raid- to them, and through them to Ihe country and to mankind, that "the pre servation of the sacred fire of liberty aud the destiny of tbe republican model of govern me nAaxTp,t7' considered as deeplyt jjrha3-firfally staked on lbcexperinwit full uietl to the American people." And the Hou?e of Representatives answered Wash ington by tbe voice of Madison : "We adore Ihe invisible hand wliich 1ms led the American peeple through so many difficulties, to cherish a cousciuus responsibility for the detiny of republican liberty." More than seventy-six years have glided away since these words were spoken; the United Stales hare passed through severer trials than were foreieec; and now, at this new epoch in our existence as one nation, with our Uu4on purified by sorrows, and strengthened by conflict, and established by the vir-, toe of the people, Ihe greatness of the occasion in vites us once more lo repeat, with solemnity, Ihe pledges of our fathers' hold ourselves answerable before our fellow.-mcn for the success of ihe repub lican form of goverunient. Eiperience has proved its sufficiency m peace and in w hi; it bas vindicated its authority through dangers, and affliction, and sudden and terrible emergencies, which would have crushed any system that bad been less firmly fixed in the heart of the people. At the iutiuguraiion of Washington the foreign 'clatiotis of liie country were few, and its Irnde ri repressed by hostil regulations; now all the civilized nations of the globe welcome our commerce, ariH ihrir Govern ments profts towards us amity. Tben our cooniry felt its way hesitatingly along nn untried path, with Stales so little bound together by lapid means of communication as to be hardly known to one another, and with historic tiaditkus extending ovtr very few years; now intercourse between tbe Stales is swift and intimate; Ihe experience of centuries has been crowded into a few generation., nnd bas created an iniensc, indestructible nationality. Then our jurisdiction diii not reach beyond the inconvenient boundaries of the territory which bad aoalered in dependence; now, through cctsions of lattJs, first colooiz?d by Spain and France, the country bas ac quired a more complex character, and bas for Its natural limits ihechnin of Lakes, the Gulf of Mexico, our form of government iaIbe best ever koon lo the vorld, has enabled us to emerge from civil war within four years, with a complete vindication or tbe constitutional authority of Ihe General Govern ment, and titb our local liberies and Ste iaistita tious unimpaired. The throngs of emigrants that crowd to our hores are w itneses of the confidence of all peoples in onr permanence. Here Is the great lane of free labor, where industry is blessed w ith unexampled rewards and the breaa oi mc wormi. man ix ivocf .n n.l hi- lllO CO n IC 1 0 U ?U i; IUBV the