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The various columns of the army have performed their duty under great disadvantages, with the most distinguished skill and courage. The victories of Pala Alto and Resaca de la Palma, and of Monterey, won against greatly superior numbers, and against most decided advantages in other respects on the part of the enemy, were brilliant in their execution, and entitle our brave officers and soldiers to the grateful thanks of their country. The nation deplores the loss of the brave officers and men who have gallantly fallen while vindicating and defending their country's rights and honour.

"It is a subject of pride and satisfaction that our volunteer citizen soldiers, who so promptly responded to their country's call, with an experience of the discipline of a camp of only a few weeks, have borne their part in the hard-fought battle of Monterey with a constancy and courage equal to that of veteran troops, and worthy of the highest admiration. The privations of long marches through the enemy's country, and through a wilderness, have been borne without a murmur. By rapid movements the province of New Mexico, with Santa Fé, its capital, has been captured without bloodshed. The navy has co-operated with the army, and rendered important services; if not so brilliant, it is because the enemy had no force to meet them on their own element, and because of the defences which nature has interposed in the difficulties of the navigation on the Mexican coast. Our squadron in the Pacific with the co-operation of a gallant officer of the army, and a small force hastily collected in that distant country, have acquired bloodless possession of the

Californias, and the American flag has been raised at every important point in that province.

"I congratulate you on the success which has thus attended our military and naval operations. In less than seven months after Mexico commenced hostilities, at a time selected by herself, we have taken possession of many of her principal ports, driven back and pursued her invading army, and acquired military possession of the Mexican provinces of New Mexico, New Leon, Coahuila, Tamaulipas, and the Californias, a territory larger in extent than that embraced in the original thirteen States of the Union, inhabited by a considerable population, and much of it more than a thousand miles from the points at which we had to collect our forces and commence our movements. By the blockade, the import and export trade of the enemy has been cut off. Well may the American people be proud of the energy and gallantry of our regular and volunteer officers and soldiers. The events of these few months afford a gratifying proof that our country can, under any emergency, confidently rely for the maintenance of her honour, and the defence of her rights, on an effective force, ready at all times voluntarily to relinquish the comforts of home for the perils and privations of the camp. And though such a force may be for the time expensive, it is in the end economical, as the ability to command it removes the necessity of employing a large standing army in time of peace, and proves that our people love their institutions, and are ever ready to defend and protect them.

"Whilst the war was in course of vigorous and successful prose

cution, being still anxious to arrest its evils, and considering that after the brilliant victories of our arms on the 8th and 9th of May last, the national honour could not be compromised by it, another overture was made to Mexico, by my direction, on the 27th of July last, to terminate hostilities by a peace just and honourable to both countries. On the 31st of August following the Mexican Government declined to accept this friendly overture, but referred it to the decision of a Mexican Congress, to be assembled in the early part of the present month.

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The war will continue to be prosecuted with vigour, as the best means of securing peace. It is hoped that the decision of the Mexican Congress, to which our last overture has been referred, may result in a speedy and honourable peace. With our perience, however, of the unreasonable course of the Mexican authorities, it is the part of wisdom not to relax in the energy of our military operations until the result is made known. In this view it is deemed important to hold military possession of all the provinces which have been taken until a definitive treaty of peace shall have been concluded and ratified by the two countries.

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had recognised the existence of the war with Mexico, my attention was directed to the danger that privateers might be fitted out in the ports of Cuba and Port Rico to prey upon the commerce of the United States; and I invited the special attention of the Spanish Government to the 14th article of our treaty with that Power of the 20th of October, 1795, under which the citizens and subjects of either nation who shall take commissions or letters of marque to act as privateers against the other shall be punished as pirates."

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

"Information has been recently received at the Department of State that the Mexican Government has sent to Havannah blank commissions to privateers, and blank certificates of naturalization, signed by general Salas, the present head of the Mexican Government. There is also reason to apprehend that similar documents have been transmitted to other parts of the world. Copies of these papers, in translation, are herewith transmitted.

"As the preliminaries required by the practice of civilized nations for commissioning privateers and regulating their conduct appear not to have been observed, and as these commissions are in blank, to be filled up with the names of citizens and subjects of all nations who may be willing to purchase them, the whole proceeding can only be construed as an invitation to all the freebooters upon earth, who are willing to pay for the privilege, to cruise against American commerce. It will be for our courts of justice to decide whether, under such circumstances, these Mexican letters of marque and reprisal shall protect those who accept them, and commit robberies upon the high seas under their authority, from the pains and penalties of piracy.

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

"I recommend that Congress should immediately provide by law for the trial and punishment as pirates of Spanish subjects who, escaping the vigilance of their Government, shall be found guilty of privateering against the United States. I do not apprehend serious danger from these privateers. Our navy

apprehended that any nation will violate its neutrality by suffering such prizes to be condemned and sold within its jurisdiction.

"I recommend that Congress should immediately provide by law for granting letters of marque and reprisal against vessels under the Mexican flag. It is true that there are but few, if any, commercial vessels of Mexico upon the high seas; and it is, therefore, not probable that many American privateers would be fitted out, in case a law should pass authorizing this mode of warfare. It is, notwithstanding, certain that such privateers may render good service to the commercial interests of the country by recapturing our merchant ships, should any be taken by armed vessels under the Mexican flag, as well as by capturing these vessels themselves. Every means within our power should be rendered available for the protec tion of our commerce.

"The annual report of the Secretary of the Treasury will exhibit a detailed statement of the condition of the finances. The imports for the fiscal year ending on the 13th of June last were of the value of 121,691,797 dollars, of which the amount exported was 11,346,623 dollars; leaving the amount retained in the country for domestic consumption 110,345,174 dollars. The value of the exports for the same period was 113,488,516 dollars; of which 102,141,893 dollars consisted domestic productions, and 11,346,623 dollars of foreign articles.

of will be constantly on the alert to protect our commerce. Besides, in case prizes should be made of American vessels, the utmost vigilance will be exerted by our blockading squadron to prevent the captors from taking them into Mexican ports, and it is not

"The receipts into the Treasury for the same year were 29,499,247 dollars and 6 cents, of which there was derived from customs, 26,712,667 dollars and 87 cents;

from sales of public lands, 2,695,452 dollars and 48 cents: and from incidental and miscellaneous sources, 92,126 dollars and 71 cents. The expenditure for the same period was 28,031,114 dollars and 20 cents; and the balance in the Treasury on the 1st day of July last was 9,126,439 dollars and 8 cents.

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The amount of the public debt, including Treasury notes, on the 1st of the present month, was 24,256,494 dollars and 60 cents; of which the sum of 17,788,799 dollars and 62 cents was outstanding on the 4th of March, 1845, leaving the amount incurred since that time, 6,467,694 dollars and 98 cents.

"In order to prosecute the war with Mexico with vigour and energy, as the best means of bringing it to a speedy and honourable termination, a further loan will be necessary to meet the expenditure for the present and the next fiscal years. If the war should be continued until the 30th of June, 1848-being the end of the next fiscal year-it is estimated that an additional loan of 23,000,000 of dollars will be required. This estimate is made upon the assumption that it will be necessary to retain constantly in the Treasury 4,000,000 of dollars to guard against contingencies. If such surplus were not required to be retained, then a loan of 19,000,000 of dollars would be sufficient. If, however, Congress should, at the present Session, impose a revenue duty on the principal articles now embraced in the free list, it is estimated that an additional annual revenue of about 2,500,000 dollars, amounting, it is estimated, on the 30th of June, 1848, to 4,000,000 of dol

lars, would be derived from that source; and the loan required would be reduced by that amount. It is estimated also, that should Congress graduate and reduce the price of such of the public lands as have been long in the market, the additional revenue derived from that source would be annually, for several years to come, between 500,000 and 1,000,000 dollars; and the loan required may be reduced by that amount also. Should these measures be adopted, the loan required would not probably exceed 18,000,000 or 19,000,000 dollars-leaving in the Treasury a constant surplus of 4,000,000 dollars. The loan proposed, it is estimated, will be sufficient to cover the necessary expenditures, both for the war and for all other purposes, up to the 30th of June, 1848; and an amount of this loan, not exceeding one-half, may be required during the present fiscal year, and the greater part of the remainder during the first half of the fiscal year succeeding.

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"The Act passed at your last Session, Reducing the Duties on Imports,' not having gone into operation until the 1st of the present month, there has not been time for its practical effect upon the revenue, and the business of the country to be developed. It is not doubted, however, that the just policy which it adopts will add largely to our foreign trade, and promote the general prosperity. Although it cannot be certainly foreseen what amount of revenue it will yield, it is estimated that it will exceed that produced by the Act of 1842, which it superseded. The leading principles established by it are, to levy the taxes with a view to raise revenue, and to impose them upon the articles im

ported according to their actual value.

"The Act of 1842, by the excessive rates of duty which it imposed on many articles, either totally excluded them from importation, or greatly reduced the amount imported, and thus diminished instead of producing revenue. By it the taxes were imposed not for the legitimate purpose of raising revenue, but to afford advantages to favoured classes, at the expense of a large majority of their fellow-citizens. Those employed in agriculture, mechanical pursuits, commerce and navigation, were compelled to contribute from their substance to swell the profits and overgrown wealth of the comparatively few who had invested their capital in manufactures. The taxes were not levied in proportion to the value of the articles upon which they were imposed; but, widely departing from this just rule, the lighter taxes were, in many cases, levied upon articles of luxury and high price, and the heavier taxes on those of necessity and low price, consumed by the great mass of the people. It was a system the inevitable effect of which was to relieve favoured classes and the wealthy few from contributing their just proportion for the support of Government, and to lay the burden on the labour of the many engaged in other pursuits than manufactures.

"A system so unequal and unjust has been superseded by the existing law, which imposes duties not for the benefit or injury of classes or pursuits, but distributes, and, as far as practicable, equalizes the public burdens among all classes and occupations. The favoured classes, who, under the

unequal and unjust system which has been repealed, have heretofore realized large profits, and many of them amassed large fortunes, at the expense of the many who have been made tributary to them, will have no reason to complain if they shall be required to bear their just proportion of the taxes necessary for the support of Government. So far from it, it will be perceived, by an examination of the existing law, that discriminations in the rates of duty imposed, within the revenue principle, have been retained in their favour. The incidental aid against foreign competition which they still enjoy gives them an advantage which no other pursuits possess: but of this none others will complain, because the duties levied are necessary for revenue. These revenue duties, including freights and charges, which the importer must pay before he can come in competition with the home manufacturer in our markets, amount, on nearly all our leading branches of manufacture, to more than one-third of the value of the imported article, and in some cases to almost one-half its value. With such advantages, it is not doubted that our domestic manufactures will continue to prosper, realizing in well-conducted establishments even greater profits than can be derived from any other regular business. Indeed, so far from requiring the protection or even incidental revenue duties, our manufacturers in several leading branches are extending their business, giving evidence of great ingenuity and skill, and of their ability to compete, with increased prospect of success, for the open market of the world. Domestic manufactures, to the value of several millions of dollars, which

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