BY MEYERS & MENGEL. PRESIDENT'S MESSAGE. FEI.LOW-CITIZENB OP THE SEN\TK AND HOUSE OF REPRESENTATIVES; Upon the re-assembling of Congress, it again becomes my duty to call your at tention to the state of the Union, and to its continued disorganized condi tion under the various laws which have been passed upon the subject ol reconstruction. It may be safely as sumed, as an axiom in the govern ment of States, that thegreatest wrongs inflicted upon a people are caused by unjust and arbitrary legislation, or by the unrelenting decrees of despotic rul er-, and that the timely revocation of injurious and oppressive measures is the greatest good that can lie conferred upon a nation. The legislator or ruler who has the wisdom and magnanimi ty to retrace his steps, when convinced of error, will sooner or later he reward ed with the respect and gratitude of an intelligent and patriotic people. Our own history—although embra cing a period less than a century—af fords abundant proof that most, if not all of our domestic troubles are direct ly traceable to violations of the organ ic law and excessive legislation. The most striking illustrations of this fact are furnished by the enactments of the past three years up >n the question of reconstruction. After a fair trial, they have substantially failed and proved pernicious in their results, and there seems to be uo good reason why they should longer remain upon the statute hook. States to which the Constitu tion guarantees a republican form of government have lieen reduced to mili tary dependencies, in each of which the people have been made subject to the arbitrary will of the commanding general. Although tiie Constitution requires that each State shall be repre sent d in Congress, Virginia, Missis sippi, and Texas are yet excluded from tiie two Houses, and contrary to the ex press provisions of that instrument, were denied part icipation in the recent election for a President and Vice-Presi dent of the United State-. The attempt to place the white population under the dominion of persons of color in the South has impaired, if not destroyed, the kindly relations that had previ ously existed between them • and mu tual distrust has engendered a feeling of animosity which, leading ir. some instances to collision and bloodshed, lias prevented that co operation be tween the two races, so essential to the success of industrial enterprizes in the Southern States. Nor have the inhabi tants of those States alone suffered from the disturbed condition of affairs growing out of these Congressional en actments. The entire Union has been agitated by grave apprehensions of troubles which might again involve the pence of the nation; its interests have been injuriously affected by the derangement of business and labor, and the consequent want of prosperity throughout that portion of the coun try. The Federal Constitution—the mar,na chart'! of American rights, un der whose wise and salutary pros is ions we have successfully conducted all our domestic and foreign affairs, sus tained ourselves in peace and in war, and lieeome a great nation among the Powers of the earth—must assuredly lie now adequate to the settlement of questions growing out of the civil war waged alone for its vindication. This great fact is made most manifest by the condition of the country when Congress assembled in the month of December, 1865. Civil strife had ceas ed; the spirit of rebellion had spent its entire force; in the Southern States the people had warmed into national life, and throughout the whole coun try a healthy reaction in public senti ment had taken place. By the appli cation of the simple yet effective pro visions of the Constitution, the Execu tive Department, with the voluntary aid of the Slates, had br ughi the work of restoration as near completion as was within the scope of its authority, and til • nation was encouraged by the prospect of an early and satisfactory adjustment of all its difficulties. Con gn-s, however, intervened, and, re fusing to perfect the work so nearly e nisumnialed, declined toadiui; m m bers from the unrepresented States, adopted a series of measures which ar rested the pr tgress of restoration, frus trated al! mat had been so successfully aceoujpii.-fited, and, afier three years of agitation and strife, has left the coun try farther from the attainment of u nion and fraternal feeling than at the inception of the Congressional plan of r construction. It needs no argument to show that legislation which has pro duced such baneful consequence.should be abrogated, or else made to conform to the genuine principles of republican government. Under the influence of party passion and sectional prejudice, other acts have U-en passed not warranted by the Co nstitution. Congress has already been mad* familiar with my views respect ing the "tenure of office bill." Expe rience has proved that its repeal is de manded by the best interests of the country, and that while it remains in force the J'resident cannot enjoin that rigid accountability of public officers so essential to an honest and efficient execution of the laws. Its revocation would enable the Executive Depart in- at to exercise the power of appoint ment and removal in accordance with the original design of the Federal Con stitution. J'heaet of .March 2, 1867, making ap propriations for the support of the ar my for the year ending June 30, 1868, and for other purposes, contains pro v.sions which interfere with the Presi dent's constitutional functions as com mander-in-chief of the army, and de ny to .States of the Union the right to protect themselves by means of their own militia. These provisions should I>' at once annulled ; for while the first might, in times of great emergency, seriously embarrass the Executive in efforts to employ and direct the com mon strength of the nation for its pro tection and preservation, the other is contrary to the express declaration of the Constitution, that "a well-regula ted militia being necessary to the se curity of a free State, the right of the people to keep and bear arms shall not be infringed." It is believed that the repeal of all such laws would be accept ed ly the American people as. at least a partial return to the fundamental principles of the government; and an indication tinit hereafter the Constitu tion is to be made the nation's safe and unerring guide. They can be produc tive of no permanent benefit to the country, anil should not be permitted to stand as so many monuments of the deficient wisdom which has character ized our recent legislation. The condition of our finances de mands the early and earnest considera tion of Congress. Compared with the growth of our population, the public expenditures have reached ah amount unprecedented in our history. The population of the United States in 1790 was nearly four millions of people. In crca-ing each decade about thirty-three percent., it reached in 1860 thirty-one millions, an increase of seven hundred P'-r cent, on the population of 1790. In C-u it is estimated that it will roach thirty-eight millions, or an increase of eight hundred and sixty-eight per cent, j ! in seventy-nine years. The annual ex penditures of the Federal Government in 1791 were four million two hundred thousand dollars, in 1820, eighteen million two hundred thousand dollars; in 1850, forty-one millions; in 1860, | sixty-three millions ; in 1865, nearly thirteen hundred millions; and in 1866 it is estimated by the Secretary of the Treasury, in his last annual report, that they will he three hundred and seventy-two millions. By comparing 1 the public disbursements of 1>69, as estimated, with those 1791, it will he seen that the increase of expenditure since the beginning of the government has been eight thousand six hundred and eighteen per centum, while the in { crease of the population for the same period was only eight hundred and sixty-eight per centum. Again : The exjienses of the government in 1860, the year of peace immediately pre ceding the war, were only sixty-three millions; while in 1860, the year of | peace three years after the war, it is estimated they will he three hundred and seven-two millions—an increase of four hundred and eighty-nine per centum, while theinereaseof population was only twenty-one per centum for the same pei iod. These statistics fur ther show that in 1791 the annual na tional expenses, compared with the i population, were little more than one dollar per capita, and in 1860 but two dollars per capita ; while in 1869 they will reach the extravagant sum of nine dollars and seventy-eight cents per capita, it will be observed that all of these statements refer to and exhibit the disbursements of jeace periods. It may, therefore, be of interest to com pare the expenditures of the three war periods—the war with Great Britain, the Mexican war, and the war of the ; rebellion, in 1814 the annual expen ses incident to the war of JBl2 reached their highest amount —about thirty-one millions; while our population slight ly exceeded eight millions, showing an expenditure of only three dollars and eighty cents per capita. In 1847 the expenditures growing out of the war with Mexico reached fifty-five millions, and the population about : twenty-one millions, giving only two dollars and sixty cents per capita for tiie war expenses of that year. In 1865 : the expenditures called for by the re bellion reached the vast amount of twelve hundred and ninety millions, which, compared with a population of thirty-four millions, gives thirty-eight dollars and twenty coats per capita. From the fourth day of March, 1789, to the thirtieth of June, 1861, the en tire expenditures of the government were seventeen hundred millions of dollars. During that period we were engaged in wars with Great Britain and Mexico, and were involved in hos tilities with powerful Indian tribes; Louisiana was purchased from France at a co-t of fifteen millions of dollars ; Florida was ceded to us by Spain for five millions; California was acquired from Mexico for fifteen millions; and the Territory of New Mexico was ob tained from Texas for the sum of ten millions. Early in 1861 the war of the rebellion commenced; and from the first of July of that year to the 30th of June, 1865, the* public expenditures reached the enormous aggregate of thirty-three hundred millions. Three years of peace have intervened, and during that time the disbursements of the government have successively been five hundred and twenty millions, three hundred and forty-six millions, ami three hundred and ninety-three millions. Adding to these amounts three hundred and saventy-two mil lions, estimated as necessary for the fiscal year ending the 30th of June, 1869, we obtain a total expenditure of sixteen hundred iniilionsofdollars du ring the four years immediately suc ceeding the war, or nearly as much as was expended during the seventy-two years that preceded the rebellion, and embraced the extraordinary ex penditures already named. These startling facts clearly illustrate the ne ee.-sity of retrenchment in all branches of the public services. Abuses which were tolerated during the war for the PRE- rvation of the nation will not IK* endured by the people now that pro found peace prevails. The receipts from internal revenues and customs have, during the three past years, gradually diminished, and tiie coutin- ; uanee of useless and extravagant ex- j penditures will involve us in natiouai bankruptcy, or else make inevitable an increase of taxes, already too onerous, and in many respects obnoxious on ae- ; count of tin ir inquisitorial character. One hundred millions annually are ex pended for the military force, a large portion of which is employed in the execution of laws both unnecessary and unconstitutional; onehundredand fifty millions are required each year to pay the interest on the public debt; an army of tax-gatherers impoverishes j the nation ; and public agents, placed by Congress beyond the control of the Executive, divert from their legiti- 1 mate purposes large sums of money i which they collect from the people in the name of the government. Judi cious legislation and prudent economy ' can alone remedy defects and avert ; evils which, if suffered to exist, cannot fail to diminish confidence in the pub- j lie councils, and weaken the attach ment and respect of the people towards their political institutions. Without proper care the small balance which it ■ is estimated will remain in the Treas- ; ury at the close of the present fiscal year will not be realized, and addition- ! al millions be added to a debt which is now enumerated by billions. It is shown, by the able and comprehensive j report of the Secretary of the Treasury, that tiie receipts for the fiscal year end ing June 39, 1868, were $403,633,033, and that the expenditures for the same j period were $-377,340,284, leaving in the Treasury a surplus of $28,297,798. It • is estimated that the receipts during the present, fiscal year ending June 30, j ISO. will be $311,392,863, and the ex-; penditures $336,152,470, showinga small balance of £5,210,398 in favor of the government. For the fi soul year end* Fog June 30,1870, U is estimated that the receipts will amount to $ 527,099,009, j and the expenditures to $303,000,000, leaving an estimated surplus of $21,- 000,000. It becomes proper, in this connection to make a brief reference to our public indebtedness, which has ac cumulated with such alarming rapidi ty and assumed such colossal propor tions. lu 1783, when the government commenced operations under the Fed eral Constitution, it was burdened with an in ebtedm-ss of seventy-five mil lions of dollars, created during the war of the revolution. This amount had been reduced to forty-five millions of dollars when in 1812 war was declared against Great Britain. The three years' struggle that followed largely increased the national obligations, and in 1816 they had attained the sum of one hundred and twenty-seven mil lions. Wise and economical legisla tion, however, enabled thegovernment ' to pay the entire amount within a pe riod of twenty years, and the extin- j guishment of the national debt tilled the land with rejoicing, and wasoneof the great events of President Jackson's J administration. Afier its redemption a large fund remained in the Treasury, which was deposited for safe-keeping I with the several States, on condition that it should be returned when re quired by the public wants. In 1849 —the year after the termination of an expensive war with Mexico —we found ' ourselves involved, in a debt of sixty four millions; and this was the amount owed by thegovernment in 1860, just ; prior to the outbreak of the rebellion. In the spring of 1861 our civil war , commenced. Each year of its eon tin u -1 ance made an enormous addition to the debt; and when, in the spring of 1865, the nation successfully emerged from the conflict, the obligations of the gov ; eminent had reached the immense sum ;of $2,873,992,909. The Secretary of the j Treasury shows that on the Ist day of November, 1 -67, this amount had been j reduced to $2,191,504,450; but at the same time his report exhibits an in : erease during the past year of $35,625,- lo2; for the debt on the first day of November last is stated to have been $2,527,129,552. It is estimated by the j Secretary that the returns for the past month will add to our liabilities the ! further sum of eleven millions—mak ing a total increase during thirteen i months of forty-six and a half millions. ; In my message to Congress of Decent- I ber 4, 1865, it was suggested that a : policy should be devised which with i out being oppressive to the people, | would at once begin to eff<-et a redue i tion of the debt, and, if persisted in, i discharge it fully within a definite ; number of years! The Secretary of the ! Treasury forcibly recommends legisla tion of this character, and justly urges that the longer it is deferred the mbre difficult must become its accomplish ment. We should follow the wise precedents established in 1789 and 1816, and without further delay make pro vision for the payment of our obliga tions at as early a period as may lie practicable. The fruits of their labors should be enjoyed by our citizens, rather than used to build up and sus tain moneyed monopolies in our own and other lands. Our foreign debt is already computed by the Secretary of the Treasury at eight hundred and fifty millions; citizens of foreign coun tries receive interest upon a large por tion of our securities, and American tax-payers are made to contribute large sums for their support. The idea Unit such a debt is to become per manent should beat all times discarded as involving taxation too heavy to he borne, and payment once in every sixteen years, at the present rate of in terest, of an amount equal to the orig inal sum. This vast debt, if permitted to become permanent and increasing, must eventually be gathered into the hands of a few, and enable them to ex ert a dangerous and controlling pow er in the affairs of the government. The borrowers woull become ser vants to the lenders—the lenders the masters of the people. We now pride ourselves upon having given freedom to four millions of the colored race; it wib then be our shame that forty mil hns of people, by their own toleration of usurpation and profligacy, have suf fered themselves to become enslaved, and merely exchanged slave-owners for new task-masters in the shape of bondholders and tax-gatherers. Be sides, permanent debts pertain to mon archical governments, and, tending to monopolies, porpetuties, and class legis lation, are totally irreconcilable witii free insi itutions. Introduced into our re publican system-, they would gradually but surely sap its foundations, eventu ally subvert our governmental fabric, and erect upon its ruins a moneyed ar istocracy. It is our saerid duty to transmit unimpaired to our posterity the blessings of liberty which were bequeathed to us by the founders of the Republic, and by our example teach those who are to follow us carefully to avoid the dangers which threaten a free and independent people. Various plans have been proposed for the payment of the public debt. How ever thev may have varied as to the time anil mode in which it should he redeemed, there seems to be a general concurence as to the propriety and just ness of a re; 1 action in the present rate of interest. The Secretary of the Treasury in his report recommends live per cent.; Congress, in a bill passed prior to adjournment on the 27th of July last, agreed upon four and a half per cent.; while by ma ny three per cent, has been held to bo j an amply sufficient return for the in vestment. The genera! impression as to the exorbitancy of the existing rate j of interest has led to an in juiry in the public mind respecting the consider.!- j tion which the government has actual- j ly received for its bonds, and the con- I elusion is becoming prevalent that the amount which it obtained was in real money three or four hundred per cent, less Hum the obligations which it is sued in return. It cannot he denied that we are paying ai extravagant per centage for the use of the money bor rowed, which was paper currency, greatly depreciated below the value of coin. This fact is made apparent when we consider that bondholders receive i from the Treasury upon each dollar they own in government securities, six per cent, in gold, which is nearly or quite equal to nine per cent, in curren rency; that the bon is are then conver ted into capital for the national banks upon which those institutions issue their circulation, bearing six per cent, interest; and that they are exempt from taxation by the government and and the States and thereby enhanced two [Kir cent, in the hands of the hol der-). We thus have an aggregate of seventeen per cent, which may he re ceived upon each dollar by the owners of government securities. A system that produces such results is justly re garded as favoring a few at the ex pease of the many and has led to the further inquiry whether our bondholders in view of the large profits which they have enjoyed, would themselves be a verse to a settlement of our indebted ness upon a plan which would yield them fair remuneration, and at the same time be just to the tax-payers of the nation. Our national credit should be sacredly observed; but in making provision for our creditors we should not forget what is due to the m isses of the people. It may be assumed that the holders of our securities have al ready received upon their bonds a larger amount than their original investment, measured by a gold standard. Up m this statement of facts it would seem but just and equitable that the six per cent, interest now paid by the government should be applied to the reduction of the principal semi annual installments, which in sixteen year and eight m >aths would liqui date the entire national debt. Six j> r cent, in gold would at present rates be equal to nine per cent, in currency, and equivalent to the payment of the debt one and a half time in a fraction less than seventeen years. This, in connec tion with all the other advantages der ived from their investment, would af ford to the public creditors a fair an 1 liberal compensation for the use of their capital, and with this they should be satisfied. The lessons of the past admonish the lender that it is not well to be overanxious in exacting from the borrower rigid compliance with the letter af the bond. If provision be made for the payment of the indebted ness of the government in the manner BEDFORD. PA., FRIDAY MORNING, DECEMBER 25, 1868. suggested, our nation will rapidly re cover its wonted prosperity, Jts inter ests require that some measure should be taken to relca<e the large amount of capita! invested in the securities of thegovernment. It is not now mere ly unproductive, but in taxation annu ally consumes one hundred and fifty millions of dollars, which would oth erwise he used by our enterprising peo ple in adding to the wealth of the nation. Our commerce, which at one time suc cessfully rivalled that of the great mar itime powers, has rapidly diminished, and our industrial interests are in a de pressed and languishing condition, 'i'lie development of our inexhaustible resources is checked, and the fertile fields of the South are becoming waste for want of means to till them. With the release of capital, new life would be infused into the paralyzed energies of our people, and activity and vigor imparted to every branch of industry. Our people need encouragement in their efforts to recover from tlie effects of the rebellion and of injudicious leg islation ; and it should be the aim of the government to stimulate thein by the prospect of an cariy release from burdens which impede their prosperi ty. 1f it cannot take the burdens from their shoulders, we should at least man ifest a willingness to help to bear them. In referring to the condition of the circulating medium, I shall merely re iterate, substantially, that portion of my last annual message which relates to that subject. The proportion which the currency of any country should hear to the whole value of the annual produce circulated by its means is a question upon which political econo mists have not agreed. Nor can it lie controlled by legislation, hut must he left to the irrevocable laws which ev erywhere regulate commerce and trade. The circulating medium will ever ir resistibly flow to those points where it is in its greatest demand. The law of demand and supply is as unerring as that which regulates the tides of the o cean ; and indeed currency like the tides, has flows throughout the commercial world. At the begin ning of the rebellion the bank noteeir culation of the country amounted to not much more than twohundsed mil lions of dollars; now the circulation of national bank notes and those known as "legal tenders" is nearly seven hun dred millions. While it is urged by some that this amount should be in creased, otherscontendthatadecided re duction is absolutely essential to the best interests of the country. In view of these diverse opinions, itmay be well to ascertain the real value of our paper issue.s when compared with a metalie or convertible currency. For this pur pose, let us inquire how much gold and silver could be purchased by the seven hundred millions of paper money now in circulation? Probably not more than half the amount of the latter —showing that when our paper cur rency is compared with gold and sil ver, its commercial value is compress ed into three hundred and fifty mil lions. This striking fact makes it the obvious duty of the government, as early as may be consistent with the principles of sound political economy, to take such measures as will enable the holder of its notes and those of the national hanks to convert them, with out loss, into specie or its equivalent. A reduction of our paper circulating medium need not necessarily follow. This however, would depend upon the law of demand and supply, though it should be borne in mind that by ma king legal-tender and notes convertible into coin or its equivalent, their pre sent specie value in the hands of their holders would be enhanced one hun dred per cent. Legislation for the ae- I complishinent of a result so desirable is demanded by the highest public con siderations. The Constitution contem plates that the circulating medium of the country shall he uniform in quali ty and value. At the time of the for mation of that instrument, the country had just emerged from the war of Rev olution, and w is suffering from the ef fects of a redundant and worthless pa per currency. The sages of that peri od were anxious to protect their pos terity from the they them selves had experienced. Hence, in providing a circulating medium, they conferred upon Congress the power to coin money and regulate the value there of,at the same time prohibiting thestates from making anything but gold and silver a tender in payment of debts. The anomalous condition of our currency is in striking contrast with that which was oirginaliy designed. Our circulation now embraces, first, notes of the national banks, which are made receivable forali dues to thegov ernment, excluding imposts, and by all its creditors, excepting in payment of interest upon its bonds and the se curities themselves; second, legal-ten der notes, issued by the Unite ! States, i and which the law requires shall be received as well in payment of all debts j between citizens as of all government dues, excepting imposts; and third, gold and silver coin. By the operation of our present system of finance, how ever the metalie currency, when col lected, is reserved only for one class of government creditors, who holding its bonds, semi-annually receive their in terest in coin from the national treasu ry. There is no reason which will be accepted as satisfactory by the people, why those who defend us on (he land and protect us on the sea; the pension er upon the gratitude of the nation, bearing the scars and wounds received while in its service; the pubiie ser vants in the various departments of the government-, the farmer who supplies j the soldiers of the army and the sail ors of the navy ; the artisan who toils in the nation's workshops, or the me chanics and laborers who build its edi fices and construct its forts and vessels of war—should, in payment of their just and hard-earned dues, receive de preciated paper, while another class of their countrymen, no more deserving, are paid in coin of gold and silver. E qual and exact justice requires that all the creditors of the government should he paid in a currency to the stan dard established by tiie Constitution ; and by this means we would remove a discrimination which may, if it has not already done so, create a prejudice that may become deep-rooted and widespread, and imperil the national credit.' The feasibility of making our currency correspond with the constitu tional standard may tie seen by refer ence to a few facts derived from our commercial statistics. The aggregate product of precious metals in the Uni ted States from 1849 to 1867 amounted to $1,174,000,000, while, for the same period, the net exports of specie were $741,009,003. This shows an excess of product over netexports of $ 133,000,000. There are in the Treasury $103,407,985 in coin ; in circulation in the States and on the Pacific coast auout $10,009,000, and a few millions in the national and other banks—in all less than $160,090,- 000. Taking into consideration the specie in the country prior to 1819, and that produced since 1867, we have more than $300,000,000 not accounted for by exportation or by the returns of the Treasury, and therefore most prob ably remaining in the country. These are important facts, and show how i completely the inferior currency will supersede the better, forcing it from circulation among the masses, and cau sing it to be exported as a mere article | of trade, to add to the money capital of foreign lands. They show the necessi ty of retiring our paper money, that the return of gold and silver to the ave nues of trade may be invited, and a de i tnand created which will cause the re i ten tion at home of at least so much of the productions of our rich and inex haustible gold-bearing fields as may be sufficient for purposes of circulation. It is unreasonable to expect a return to a sound currency so long as the gov ernment and hanks, by continuing to issue irredeemable notes, fill the chan nels of circulation with depreciated pa per. Notwithstanding a coinage by our mints since 1849, of eight hundred and seventy-four millions of dollars, the people are now strangers to the currency which was designed for their use and benefit, and specimens of the precious metals bearing the national device are seldom seen except when produced to gratify the interest excited b.v their novelty. If depreciated paper is to he continued as the permanent currency of the country, and all our coin is to become a mere article of traffic and speculation, to the enhancement in price of all that is indispensable to the comfort of the people, it would lie wise economy to abolish our mints, thus saving the nation the care and ex pense incident to such establishments, and let all our precious metals he ex ported inbullion. The time has come, however, when the government and national hanks should he required to take the most efficient steps to make all necessary arrangmeuts for a resump tion of specie payments. Let specie pay meats once he.earnestly inaugurated by the government and banks, and the value of the paper circulation would directly approxi mate a specie standard. Specie payments having been resumed by the government and banks, all notes or bills of paper issued by either of a less denomination than twenty dol lars should by law be excluded from circulation, so that the people may have the benefit and convenience of a gold and silver currency which in all their business transactions will be uni form in value at home and abroad. "Every man of property and indus try, every man who desires to preserve what he honestly possesses, or to obtain what lie can honestly earn, i.as a direct interest in maintaining a safe cireula- j ting medium —such a medium as shall be real and substantial, not liable to vibrate with opinions, not subject to be blown up or blown down by tiie breath of speculation, but to be made ' stable and secure. A disordered cur rency is one of the greatest political evils. It undermines the virtues ne- j eessary fur the support of the social sys- ! tern, and encourages propensities de- j struetive of its happiness; it wars ' against industry, frugality, and econo- ; my, and it fosters the evil spirits of extravagance and speculation." It has been asserted by one of our profound and most gifted statesmen, that "of all the contrivances for cheating the labor- ; ing classes of mankind, none lias been 1 more effectual than that which deludes j them with paper money. This is the i most effectual of inventions to fertalize ! the rich mail's fields by the sweat of i the poor man's brow. Ordinary tyr anny, oppression, excessive taxation —these hear lightly on the happiness of tho mass of tiieeotnm unity compared with the fraudulent currency, and the ; robberies committed by depreciated pa per. Our own history has recorded for our instruction enough of the demoral izing tendency, the injustice, and the j intolerable oppression 011 the virtuous and well disposed of a degraded paper currency authorized by law or in any | way countenanced by government."— It is one of the most successful devices, ' in timesof peace or war, of expansions j or revulsions, to accomplish the trans- ! fcr of all the precious metals from the great mass of the people in o the hands j of the few, where they are hoarded in secret places or deposited under bolts and bars, while the people are left to endure all the inconvenience, sacrifice ; and demoralization resulting from tiie | use of depreciated and worthless paper, j The Secretary of the Interior, in Ids | report, gives valuable information in reference to the interests confided to ! the supervision of his Department, and reviews the operations of the Lund Office, Pension Office, Patent Office, and the Indian Bureau. During the ti- -aI year ending June 30, lsos, six million six hundred and fifty-five thousand seven hundred acres of pub- ; lie land were disposed of. The entire I cash receipts of the General Land Of- j lice for the same period where $1,632,- 745, being greater by $281,883 than jtlie amount realized from the same sour- j ees during the previous year. The en tries under the homestead law cover ! two million three hundred and twenty- j light thousand nine hundred and twenty-three acres, nearly one fourth of which wa taken under the act of June 21, 1803, which applies only j to the State of Alabama, Mississippi, ! Louisiana, Arkansas, and Florida. On the 30th of June, 1868, one hundred • and six4y-nine thou-and six hundred and forty-three names were b rne on the pension rolls, and during the year ! ending on that day the total amount I paid for pensions, including tiie expen ses of disbursement, was $24,019,982, being $3,391,025 greater than that ex pended for like purposes during the 1 preceding year. During the year end- j theSoth of September iast, theexpens- j es of the Patent Office exceeded the receipts by one hundred and seventy one dollars; and including reissues and j "designs, fourteen thousand one hun dred and fifty-three patents were is sued. Treaties with various Indian tribes have been concluded, and will be submitted to the .Seiinate ist con stitutional action, I cordially sanction the stipulations which provide for re serving lands for the various tribes, where they may bo encouraged to a bandon their nomadic habits and en gage in agricultural and industrial pursuits. This policy, inaugurated many years since, has met with sig nal success whenever it has been pur sued in good faith and with becoming liberality by the United States. The necessity for extending it as far as practicable in our relations with the ] aboriginal population is greater now than at any preceding period. Whilst we furnish subsistence and instruction to the Indians, ami guarantee the undis- j turbed enjoyment of their treaty rights, we should habitually insist up on the faithful observance of their a greement to remain within their re spective reservations. This is the only mode by which collisions with other tribes and with the whites can be avoided, and the safety of our frontier settlements secured. The companies constructing the rail way from Omaha to Sacramento have been most energetically engaged in prosecuting the work, and it is believ ed that the line will be completed be fore the expiration of the next fiscal year. The six per cent, bonds i.-.su-d to these companies amounted, oil tiie sth instant, to $14,337,090, and r.dition al work had !>ecn performed to the ex tent of $3,200,000. The Secretary of the Interior, in August last, invited my attention to the report of agovoni- ment director of the Union Pacific Railroad Company, who had been j specially instructed to examine the lo ; cation, construction, and equipment •of their road. I submitted for the o pinionof the Attorney-General certain questions in regard to the authority of the Executive which arose upon this report, and these which had from time I to time been presented by the com ! missioners appointed to inspect each ] successive section of the work. After carefully considering the law of the case, he affirmed the right of the Exee- I utive to order, if necessary, a thorough ; revision of the entire road. Commis ! sioners were thereupon appointed to j examine this and other lines,and have recently submitted a statementof their investigations, of which the report of the Secretary of the Interior furnishes specific information. The report of the Secretary of War contains information of interest and importance respecting the several bureaus of the War Department and the operations of the army. The strength of our military force, on the 3oth of September last, was forty-eight thousand men, and it was computed that by the first of January next, this number will lie decreased to forty three thousand. It is the opinion of the Secretary of War that within the next year a considerable diminution of the infantry force may be made without detriment to the interests of the country ; and in view of the great expense attending the military peace es tablishment, and theabsoiute necessity of retrenchment wherever it can be ap plied, it is to be hoped that Congress I will sanction the reduction which his ! report recommends. While in ISGO sixteen thousand three hundred men cost the nation .10,172,090. the sum of 805,682,000 is estimated as necessary for the support of the army during the fiscal year end: re June 30, 1870. The! estimates of the War Department for the last two fiscal years were, for iS67, $33, 814,461, and for 1863, $25,205,669. j The actual expenditures during the same periods were, respectively, $96,- 224,415 and 5123,246.648. The estimate submmitted in December last for the fiscal year ending June 20, 1869, was $77,124,707 ; the expenditures for the j first quarter, ending the 30th of Sep tember last, were $27,219,117, and the Secretary of the Treasury gives $06,- 000,000 as the amount which will prob ably be required during the remaining ; three quarters, if there should be no j reduction pf the army—making its ag- j gregate cost for the year considerably in excess of ninety-three millions.— The difference between the estimates and expenditures for the three fiscal years which have been named is thus shown to he $175,513,313 for this single branch of the public service. The report of the-Secretary of the j Navy exhibits the operations of that 1 Department and of the navy during the year. A considerable reduction of the force has been effected. There are forty-two vessels carrying four hun dred and eleven guns, in the six squad rons which are established in different ■ [•arts of the world. Three of these ves sels are returning to the United States and four are used as storeships, leaving the actual cruising force thirty five j vessels, carrying three hundred and fifty-six guns. The total number of j vessels in the avv is two hundred and ; six, mounting seventeen hundred and forty-three guns. Eighty-one vessels <if every description are in use, armed with six hundred and ninety-six guns. 1 The number of enlisted men in the . service, including apprentices, has been reduced to eight thousand five hundred. An increase of navy yard j facilities is recommended as a measure which will, in the event of war, he promotive of economy and security.— A more thorough and systematic sur vey of the North Pacific Ocean is ad vised in view of our recent acquisitions, our expanding commerce, and the in creasiug intercourse between the Pa- j ei fie States and Asia. The naval [ten sion fund, which consists of a moiety of the avails of prizes captured during i the war, amounts to $11,000,000. Ex- ; eeption is taken to the act of 23d July last, which reduces the interest on the fund loaned to the government by the Secretary, as trustee, to three per cent. : instead of six per cent., which was originally stipulated when the invest- j incut was made. An amendment of the pension laws is suggested to remedy ( omissions and defects in existingenaet- j meats. The expenditures of the de partment during tiie la-t fiscal year were $20,120,391, and the estimates for the coming year am omit to $20,993,414. Tiie Postmaster-General's report fur nishes a full and clear exhibit of th • operations an I condition of the postal service. The ordinary postal revenue for the fiscal year ending June 30,1868, was $16,292,000, and the total expendi tures, embracing all the service for which special appropriations have 1 been made by Congress, amounted to $22,730,592, showing an excess of ex penditures of $0,437,991. Deduction from the expenditures the sum of sl,- j 896,525, tin; amount of appropriations for ocean steamship and other special service, the excess of expenditures was $4,511,466. By using an unexpected j balance in the Treasury of $3,800,000, the actual sum for which a special ap propriation is required to meet the de nceiicy is $741,466. Tne causes which produced this large excess of expeudi- ; tare over revenue were the restoration of service in the late instilment .States. ! and the putting into operation of new service established by acts of Congress, which amounted, within the last two ; years and a half, to about 48,700 miles i —equal to more than one-third of the j whole amount of the service at the close of the war. New postal con veil- j tions with Great Britain, North Ger- i many, Belgium, the Netherlands, ! Switzerland, and Italy, respectively, have been carried into effect. Under their provisions important improve ments have resulted in reduced rates of international postage, and enlarged j mail faeilties with European countries, j Tiie cost of the United States trans- j Atlantic ocean mail service since Jan uary 1, 1866 has been largely lessened undertheoperation of these new eonveu- : tions, a reduction of over one-half hav- ; ing beenjeffeeted under the new arrange ments for ocean mail steamship ser vice which went into effect on that date. The attention of Congress is in vited to the practical suggestions and recommendations made in his report by the Postmaster-General. No important question has occurred during tho last year in our accustomed j cordial and friendly intercourse with Costa Rica, Guatemala, Honduras, San Salvador, France, Austria, Belgium, Switzerland, Portugal, the Nether laud-, Denmark, Sweden and Norway, Rome, Greece, Turkey, Persia, Egypt, Liberia, Morocco, Tripoli? Tunis, Mus cat, Siam, Borneo, and Ma lagascar.— Cordial relations have also been main tained with the Argentine and the Or iental Republic. The expressed wish of Congress that our national good offices might be tendered to these Re publics, and also to Brazil and Para guay, for bringing to an end the calam itous war which has so long been rag ing in the valley of the La Plata, has been assiduously complied with, and kindly acknowledged by the belliger ents. That important negotiation, VOL. 64.—WHOLE No. 5/174. however, hits thus far been without I result. j Charles A. Washburn, late United States Minister to Paraguay, having j resigned, and being desirous to return i to the United States, the Hear Admir al commanding the South Atlantic Squadron was early directed to send a I ship-of-war to Asuncion, the capital of Paraguay, to receive Mr. Washburn and his family, and remove them fiom a situation which was represented to be endangered by faction and foreign war. The Brazilian commander of the allied invading forces refused permis sion to the "Wasp" to pass through the blockading forces, and that vessel returned to its accustomed anchorage. Remonstrance having been made a gaitist this refusal, it was promptly overruled, and the ."Wasp" therefore resumed her errand, received Mr. Warshburu and Ids family, and con veyer! them to a safe and convenient seaport. In the meantime an excited controversy had arisen between the President of Paraguay and the late United .States Minister, which it is un derstood grew out of his proceedings in giving asylum in the United States legation to alleged enemies of that Re public. The question of the right to give a-ylum is one always difficult, and often productive of great embar rassment. In States well organized and established, foreign powers refuse either to concede or exercise that right, except as to persons actually belong ing to the diplomatic service." On the other hand, all such powers insist upon exercising the right of asylum in States where the law of nations is not fully acknowledged, respected and o beyed. The President of Paraguay is understood to have been opposed to Mr. Washburn's proceedings ou the injuri ous and improbable charge of {lersnnal complicity in insurrection and treason. The correspondence, however, has not yet reached the United States. Mr. Washburn, in connection with this controversy, represents that two Unit ed States citizens attached to the lega tion were arbitrarily seized at his side, when leaving the capital of Parrguay, committed to prison, and there sub jected to torture for the purpose of pro curing confessions of their own crimi nality, and testimony to support the President's allegations against the U nited States Minister. Mr. McMahon, the newly appointed Minister to Para guay, having reached the La Plata, has been instructed to proceed without delay to Asuncion, there to investi gate the whole subject. The Rear Ad miral commanding the United States South Atlantic squadron has been di rected to attend the new minister with a proper naval force to sustain such just demands as the occasion may re quire, and to vindicate the rights of the United States citizens referred to, and of any others who may be exposed to danger in the theatre of war. With these exceptions, friendly relations have been maintained between the Un ruled States and Brazil and Paraguay. Our relations during the past year with Bolivia, Ecuador, Peru, and Chili, have became especially friendly and cordial. Spain and the Republics of Peru, Bolivia, and Ecuador have ex pressed their willingness to accept the mediation of the United States for terminating the war upon the South Pacific coast. Chili has not finally declared upon the subject. In the meantime the conflict has practically exhausted its 'if, since no belligerent or hostile movement has been made by either party during the last two years, and there are no indication of a present purpose to renew hostilities ou either side. Great Britain and France have cordially seconded our proposition of mediation, and 1 do not forego the hope that it may soon be accepted by all tiie belligerents, and lead to a se cure establishment of peace and friend ly relations between the Spanish A merican Republics of the Pacific and Spain—a result which would be atten ded with benefits to the belligerents and much, advantage to all commer cial nations. 1 communicate, for the consideration of Congress, a correspon dence which shows that the Bolivian Republic has established the extremely liberal principle of receiving into its citizenship any citizen of the United States, or of any other of the American Republics, upon the simple condition of voluntary registry. Tile co.teqion dence herewith submitted will be found painfully replete with accounts of the ruin and wretchedness produced by re cent earthquakes, of unparalleled se verity, in tne republics of Peru, Ivjia dor, and Bolivia. The diplomatic a gents and naval officers of the United .■states who were present in those coun tries at the time of those disasters furn ished all the relief in their power to the sufferers, and were promptly cr warded with grateful and touching ac knowledgments by the Congress of Peru. An appeal to the charity of our fellow-citizens has been answered by much liberality. In this connection 1 submit an appeal which has been made by tlie Swiss Republic-, whoso govern ment and institutionsare kindred to our own, in behalf ol its inhabitants, who are suffering extreme destitution pro duced by recent devastating inunda tions. Our relations with Mexico during the year have been marked by an increas ing growth of mutual confidence. The Mexican Government has not yet act ed upon the three treaties celebrated here last summer for establishing the rights of naturalized eitizens upon a liberal and just basis, for regulating consular powers, and for tiie adjust ment of mutual claims. All commercial nations, as well as all friends of republican institutions, have occasion to regret the frequent local disturbances which occur in some of the constituent States of Columbia. Nothing has occurred, however,to af fect the harmony and cordial friend ship which have for several years ex isted between that youthful and vigor ous republic and our own. Negotia tions are pending with a view to the survey and construction of a sfiip canal across the Isthmus of Darien, un der the auspices of the United States. I hope to be able to submit the results of that negotiation to the Senate dur its present session. The very liberal treaty which was entered into last year by the United States and Nicaragua has been ratified by the latter repub lic. Costa Rica, with an earnestness of a sincerely friendly neighbor, solicits a reciprocity of trade, which I commend to the consideration of Congress The convention created by treaty be tween the United States and Venezu ela in July, 1805, for the mutual ad justment of claims, has bee:? held, and its decisions have been received at the Department of State. The heretofore recognized Government of the United States of Venezuela has been subvert ed. A provisional government having been instituted under circumstances which promise durability, it has been formally recognized. 1 have been reluctantly obliged to ask explanation and satisfaction for na tional injuries committed by the Presi dent of liayti. The political and so cial condition of the Republics of liay ti and St. Domingo is very unsatisfac tory and painful. The abolition ot slavery, which lias been carried into effect "throughout the Island of St.
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