E. O. GOODRICH, EDITOR. Towanda, Saturday, December 9,1851. ESPECIAL NOTICE. The REPORTER in// he furnished at ONE DOLLAR per annum invariably m advance, and will be sent , no longer than puul for. Subscribers will h ire Jbnr weeks notice previous to the expiration of their subscription ; when, if it is not renewed, the paper will be stopped. Those in arrears can avail themselves of hesc terms by settling, li e shall give them vntil the close of the present Volume. when we shall stop sending the pa per to every subscriber in arrears. Any prrson sending iis five new subscribers, with the Cash, will receive a copy gratis for one year; or Six Copies will be sent to one address a year for So As the success of the Cash system depends upon its strict observance, onr Terms will be impartially and in flexibly adhered to This number of the Reporter will reach some oi our subscribers a day or two later than usual, owing to tho impossibility of procuring paper. CONGRE-S met on Monday last, a quorum ap pearing in both branches. In the Senate, the Pre anient, Mr. ATCHISON having resigned, Mr. BRIGHT was elec'ed Piesident in his place. The President's Message, which was delivered on Monday, will be found be low. Its length ex eludes our usual variety, and the comments we had designed to make. (pfj- REMOVAL. —The Post Master at this place, Mr. WM. II PERKINS has been removed, and Dr. II C PORTER appointed in his s ead. We have neither lime nor space, this wetk, to eomment upon '.his outiaue as it deserves, but we will endeavor, next week, to do full justice to the act and the actors. TCE BRIDGE —The recent coJJ weather has froz en the River at this place, forming a vety con venient Bridge, over which teams pass in perfect safety. PRESIDENTS MESSAGE Fellow Citizens of the Senate and of the House nf Representatives : The past has been an eventful year, and will be hereafter referred to as a marked epoch in the his tory of the world. While we have been happily proserved from the calamities of war, our domestic prosperity has not been entirely uninterrupted. The crop*, in portions of the country, have been nearly cutoff. Disease has prevailed to a greater extent than usual, and the sacrifice of human life/through casualties by sea and land is without a parallel.— But the pestilence has swept by, and restored salu brity invites the absent to their homes, and the re> turn of business to its ordinary channels. If the earth has rewarded the labor of the husbandman less bountifully than in preceding seasons, it has I left him with abundance for domestic wants, and ! a large surplus for exportation. In the present, I therefore, as in the past, we find ample grounds for reverent thankfulness to the God of Grace and Pro. videncc, for His protecting care and merciful ings with us as a people. Although our attention has been arrested by pain ful interest in pa-sing events, yet our country, feels no more than the slight vibrations of the convul- ! sions, which have shaken Europe. As individuals, ] we cannot repress sympathy with human suffering nor regret for the causes which produce it. As a nation, we are reminded that whatever interrupts the peace, or checks the prosperity of any part of Christendom, tends, more or less, to involve our own. The conditions of States is not unlike that of individuals. They are mutually dependent up on each other. Amicable relations between them, and reciprocal good will, are pied and steadily pursued of avoiding all entang ling alliances, has hitherto exempted it from many c m; lications, in which it would otherwise have become involved. Notwithstanding this our clear ly defined and well sustained course (.faction, and our geographical position so remote from Europe, increasing disposi ionjhus been manifested, by some of its Governments, to supervise, and, in certain respects, to direct, our foreign policy. Tn plans for adjusting the balance of power among themselves, they have assumed to take us into account, and would constrain us to conform our conduct to their views. One or another of the Powers of Europe has, from time to time, undertaken to enforce arbi trary regulations, contrary in many respects to es tablished principles of international law. That law, the United States have, in their foreign intercourse, uniformly respected and observed,and they cannot recognize any such interpolations therein, as the temporary interests of o'hers may suggest. They do not admit,that the sovereigns of one continent, or of a particular community of States, can legislate for all others. Leaving the trans-Atlantic nations to adjust their political system, in the way they may think best for their common welfare, the independent powers of this Continent may well assert the right to be ex empt front all annoying interference on their part. Systematic abstinence from intimate political connection with distant foreign nations, does not conflict with giving the widest range to our foreign commerce. This distinction, so clearly marked in history .seems to have been overlooked, or disre garded, by some leading foreign States. Our re fusal to be brought within, and subjected to, their peculiar system, has, I fear, created a jealous dis trust of our condnct, and induced, on their pari, oc casional acts of disturbing effect upon our foreign relations. Our present attitude and past course give assurance, which should not be questioned, that our purposes are not aggrestve,nor threatening to the safely and welfare of other nations. Our mil itary establishment, in time of peace, is adapted to maintain exterior defences, and to preserve order among the aboriginal tribes within the limits of the Union. Our naval force is intended only for the protection of our citizens abroad, and of our com merce, diffused, as it is, over all the seas of the globe. Tho government of the United States, be ing essentially pacific in policy, stands prepared to repel invasion by the voluntary service of a patri otic people, and provides no permanent means of foreign aggression. These considerations should allay all apprehension, that we are disposed to en croach on the rights, or endanger the security of other States. AMERICAN EXPANSION. Some European Powers have regarded, with dis quieting concern, the territorial expansion of the United Stater. This rapid growth has resulted from the legitimate exercise of sovereign rights, belong ing alike to all nations, and by many liberally exer oised. Under such circumstances, it could hardly here o?en eTp fC r f J ;ha: those amor.* thenv which hare, within a comparatively recent period, subdued and absorbed ancient kingdom*, planted their stan> dards on every Continent, and now possesses, the control of, the islands of every ocean as their appro priate domain, would look with unfriendly senti ments upon the acquisitions of this country, in ev ery instance honorably obtained, or would feel themselves justified in imputing our advancement to a spirit of aggression or to a passion for political predominance. Our foreign commerce has reached a magnitude and extent nearly equal to that of the first maritime power of the earth, and exceeding that of any other. Over this great interest, in which not only our mer chants, but all classes of citizens at least indirectly are concerned, it is the duty of the executive and legislative branches of the Government to exercise a careful supervision, and adopt proper measures for its protection. The policy which I have had in view, in regard to this interest, embraces its future as well as its present security. NEUTRAL RIGHTS. Long experience has shown that, in general, when ttio principal powers of Europe are engaged in war, the rights of neutral nations are endangered. This consideration led, in the progress of the War our Independence, to the formation of the celebrati cd confederacy of armed neutrality—a primary ob ject of which was to assert the doctrine that free ships m ike free goods, except in the case of articles contraband of war—adoctrise which, from the very commencement our national being, has been a cher ished idea of the statesmen of this country. At one period or another, every maritime power has, by some solemn treaty stipulation, recognized that principle ; and it might have been hoped that it would come to be universally received and respect, cd as a rule of international law. But the refusal of one power prevents'this, and in the next great war which ensued, that of the French Revolution, it failed to be respected among the belligeren' States of Europe. Notwithstanding this, the principle is generally admitted to be a round and salutary one ; so much so, that, at the commencement of ihe ex isting war in Europe, Great Britain and France an nounced their purpose to observe it for the present ! —not, however, as a recognized international right, ] but as a mete concession for the time being. The 1 co-operation, however, of these two powerful mari time nations in the interest of neutral tights, appear ed to nie to afford an occasion, inviting and justi fying, on the pari of the United Siaie.% a renewed effort, to make the doctrine in question a principle of international law, by means of special conven tions between the several Powers of Europe and America. Accordingly,a proposition, embracing net only the rule, that five ships make free goods, except contraband articles, but also the less contest ed one, that neutral property, othei than contraband though on board enemy's ships, shall be exempt from confiscation, has been submitted by this Gov ernment to those of Europe ar.d America. Ku-sia acted promptly in this matter, and a Con vention was concluded, between that country and the United States, providing for the observance of principles announced, not only as between them selves, but also as between them and all other na tions, which shall enter into like stipulations. None | of the other powers have as yet taken final action on I the subject. lam not aware, however, that any ob jection to the proposed stipulations has been made; j but, on the contrary, they arc acknowledged to be I essential to the security of neutral commerce; and the only apparent obstacle to their general adoption is in the possibility. that it may be encumbered by I inadmissible condi'ions, The King of the Two Sicilies has expressed to | our Minister at Naples his readiness to concur in I our proposition relative to neutral rights,and toen : ter into Convention on the subject. | The King of Prussia entirely approves of the pro j ject of a treaty to the same effect, submitted to him, | but proposes an additional article providing for the renunciation of privateering. Such an article, for most obvious reasons, is much desired by nations having naval establishments, large in proporti -i to their foreign commerce. If itweiead pted as an in ternational rule, the commerce of a nation having I comparatively a small naval force, would be very ' much at the mercy of its enemy, in cise of war with a power of decided naval superiority. The bare sta'ement of the condition in which the United States would be placed, after having surrendered the right to resort to priva'eers, in the event of war with a belligerent of naval supremacy, will show that this Government bould never listen to such a proposition. The navy of the first maritime power in Europe is at least ten timesas large asthatofthe United States. The freign commerce of the two countries is nearly equal, and about equally expos ed to hostile depredations. In war between that power and the United Slates, without resort on our part to our mercantile marine, the means ofour en emy to iDflict injury upon our commerce would be tenfold greater ours to retaliate. We could not ex l trica'.e our countrv,from this unequal condition,with such an enemy, unless we at once depart from our present peaceful policy, and became a great naval power. Nor would this country be better situated in war with one of the secondary naval powers,— Though the naval dispiri'v would be less, the greati er extent and more exposed condition of our wide spread commerce would give any of them a like ad vantage over us. rniVATEEas. The proposition to enter into engagements to forego resort to privateers, in case this country should be forced into war with a great naval power, is not entitled to m ire favorable consideration than would be a proposition to agree not to accept the services of volunteers for operations on land. When the honor of the rights our country require it to as sume a hostile attitude, it confidently relies upon the patriotism ofits ci.izeas, not ordinari'y devoted to the military profession, to augment the army and the navy, so as to make them fully adequate to the emergency which calls them into action. The pro posal to surrender the right to employ privateers is professedly "founded upon the principle, the private property of unoffending noncombatants, though enemies, should be exempt from the ravages of war ; but the proposed surrender goes but little way in carrying out that principle, which equally requires that such private property sh mid not be seized or molested by national ships-of-war. Should the leading powers of Europe concur in proposing, as a rule of international law, to exempt private proper ty, upon the ocean, from seizure by public armed cruisers, as weil by privateers, the United Stales will readily meet them upon that broad ground. TtlE RECIPHOCITr THCiTI. Since the adjournment of Congress, the ratifica tions of the treaty between the I'nited States and Great Britain relative to coast fisheries and to re ciprocal trade with the British North American' Provinces, have been exchanged, and someofits anticipated advantages are already enjoyed by us, although its full execution was to abide certain acts of legislation notyet fu'ly performed. So soon as it was ratified, Great Britain opened to our com merce the free navigation oQlte river St. Lawrence, and to our fishermen unmolested access to the shores and bays, from which they had been previ ously excluded, on the costs of her North American provinces ; in return for which she asked for the im troduction . free i.fdutv, into parts of United States, of fish caught on the same coa.-t by British fisher men. This being the compensation, stipulated in the treaty, for privileges of the highest importance and value to United States, which were thus vol untarily yielded before it became effective, the re quest seemed to me to be a reasonable one; but it could not be acceded to, from want of authority to suspend our laws imposing duties upon all foreign fish. In the meantime, the Treasury Department issued a regulation, for ascertaining the duties paid or secured by bonds on fish caught on the coast of the British provinces, and brought to our markets by British subjects, after the fishing-grounds had been made fully accessable to the citizens of the United States. I recommend io your favorable con sideration a proposition, which will be submitted to you, for authority to refund the duties and can cel the bonds thus received. The provinces o; Canada and New Brunswick have also anticipated the full operation of the treaty,by legislative arrange ments, respectively, to admit, free of duty, the pro ducts of the United States mentioned in the free list of the treaty: and an arrangement, similar to that regarding British fish,has been made forduties now chargable on the products of those provinces enu merated in the same free list, and introduced there from into the United States; a proposition for re funding which will, in my jndgment, be, in like manner entitled to your favorable consideration. BRITISH BOUXI) ABIES. There is difference of opinion between the Uni ted States and Great Britain, as to the boundary line of the territory of Washington adjoining the British possessions on the Pacific, winch has al ready led to difficulties on the part of the citizens and local authorities of the two Governments I re commend thai provisions be made for a commia sion, to be joined by one on (he part ol Her Bri'an ic Majesty, lor the purpose of running and estab lishing the line in controversy. Certain stipulations of the third and fourth articles of the Tieaty con cludod by the United States and Great Bream in 1846, regarding possessory rights ol the Hudson Bay Company, and property of the Rugnt's S nutid Agricultural Company, have given rise to s-.uious disputes, find it important to all concerned, that summary means of settling them amicably should be devised. I have reason to believe, thai an ar rangement can be made on just terms, for the ex tingnishrn!it of the rights in question, embracing, also, llu tights o| he Hudson's Buy Company to navigation of the River Columbia ; and I therefore suggest to your consideration, the expediency ol making a contingent appropriation lot that purpose. ESI CATIONS WITH FRANCE. France was the early and efficient a!L ol the -United States in their struggle for independence.— From that time to the present, with occasional slight interruptions, cordial relations of friendship have exis'ed between the governments and people ot the two counties. The kindly sentiments, clier isfied ahke by both nations, have led to e.vensive social and commercial intercourse, which 1 tm-t, will not be interrupted or checked by any casual event ot an apparently unsatislactory character.— The French Consul at San Francisco was, not long since, brought into the Unfed States District Couii at that place, by compulsory process, as a witness in favor of another loreign Consul, in violation, as the French Government conceives, of his privileges under our consular convention with France. There being nothing in the transaction which could imply any disrespect to France or its consul, such explana'ion has been made, as I hope will be sat islactory. Subsequently, misunderstanding arose on the subject of the French Government having as it appeared, abruptly excluded the American Minister to Spain from passing through France, on his way from London to Mardiid. Bit that Gov j ernme .t has unequivocally disavowed any designs j to deny the right of tra .sit to the Mirns er o| the j United States ; and, after explanations to this ef ' feet, he has resumed hi* journey. and actually re- I turned through France to Spain. 1 herewith lay j before Congress the correspondence on this sub j j-ct between our envoy at Raffs, and the Minister | of Foreign Relations of the French Government. RELATIONS WITH SPAIN I The position oi our affairs with Spain remains as ■at the close of your last session, lu'ema! agitation assuming very nearly the character ol political re j volution, has recently convulsed that country. The I la'e ministers were violeo ly expelled from p uver, I and men, ol very different views in relation to its internal affairs, have succeeded Since this change ; there has his b*eu no propitious opp mnrii'y to re ! some, and press on. nego'nations for the adjustment j of serious questions ot difficulty between the Span | ish Government and the United States There is ( reason to believe that our Minister will ffud the present Government mote favorably inclined than j the preceding to comply with onr jnst demands, i and to make suitable arrangements lor restoring harmony, and preserving peace, between the two countries. THE SOUND DUES. Negotiations are pending with Danmaik to dis- I continue the practice of levying to'D on our vessels | and cargoes passing through the Sound. Ido not ! doubt that ive can claim exemption therefrom, as a matter of right. It is admitted ori all hands that this exaction is sanctioned, not by the general prin ciples of the law of nations, but only by special conventions, which most of the commercial nations have entered into with Denmark. The s'.h article of out treaty of 1826, with Denmatk. pioviJes that there shall not be paid, on the vessels ot the Uui'- ed States, and their cargoes, when parsing through the Sound, higher duties than those ofthe most fj. vored na ions. This may be rpgurded as art im plied agreement (n submit to (he lolls during the continuance of the treaty, and, consequently, may embarrass the assertion of our rights to be releas ed therefrom There are also oilier provisions in the trea'y which ought to be modified. It was to remain in force for ten years, and until one year after ei her party should g've notice to the other ol inten'ion to terminate it. I deem it expedient that the con emplated notice should be given to the Go vt rnmcnt r f Denmatk. JAPAN. The naval expedition, dispatched about two years since for the purpose ol establishing relalions wi h he Empire ot Japan, has been ably and skil fully couduc ed to a successful termination bv the officers to whom it was entrusted. A treaty, open ing cei ain ot the porls of that populous country, lias been nego iated; and in order to give fail ef tect thereto, it only remains to change ra'ifiealion.*, and adopt requisite cominerea! regulations. RELATIONS WITH MEXICO. The trea'y lately concluded between the United Sates and Mexico sealed some otour rnot embar rassing difficulties wi h hat county, but numerous claims upon it for wrongs and injuries to our citi zens remain unadjusted, and mmy new oa c e have been rev en ly aided to 'die former li-it ofgffevnnces Our legation has been earnesi in its endeavors to ob ain lu rn the Mexican Government a favorable corieideraiion ot these claims, but hiiheuo without success This failure is, probably, in some meas tire, to be ascribed (o the dts urbed condition of that country. It ha been my anxious derire to maintain triendly relations wrdi the Mex can Re I public, and to cause its rights and territories to be respcc ed not o.dy by our citizens, but by foreign ers, who have resorted to the United Sates lor the purpose of organizing hostile expeditions against some ol the States ot the Republic. The ilefencs iesscondi ion in which its frontiers have been left, has stimulated lawless adventuers to embark in these enterprise*, and greatly increased the diffi cul y of enforcing onr obligations ot neutrally. Re garding it as my solemn duty-to lulfil efficiently ihe-e obligations, not only towards Mexico, but o tier loreign na'ions, [ have exerted ah the pow ers wiih which I am invested to deleat such ciirn id.-.l proceedings and bring to punishment those who, by taking a part therein, violated our laws The energy and activity ol onr c t vil an I military audi ri'.ies have fiustra ed the designs of ihose who medita ed expeditions ol this chancier, pxcept in two instances. One ol these, composed of foreign er*, was at first countenanced and aided by tiie Mexican Government itself, it having been decerv. Ed as to their real object The other, small in num ber, eluded the vigilance of the magistrates at Sin Francisco, and succeeded in reaching the Mexican territories ; but the effective measures taken by this Government compelled the abandonment ot the undertaking The Commission to establish the new line be tween the United Sta cs and Mexico, accoiding to the provisions ofthe 39 h of December last, ha* been organized, and the work is already commenc ed. SOUTH AMEBIC A. Our treaties with the Argentine Confederation, and with the Republics of Uruguay and Paraguay, secure to us the free navigation of the river La Plata, and some of its largest tributaries: but the same success has not attended our endeavors to open the Amazon. The reasons in favor of the free use of that river, I had occasion to present fully, in a former message; and, considering the cordial relations which have long existed between this Government and Brazil,it may be expected that pending negotiations will, eventually, reach a fa vorable result. CENTRAL AMERICA. . Convenient means of transit, between the sever al parts of a country, are not only desirable for the objects of commercial and personal communica tion, but essential to its existence under one gov ernment. Separated as are the Atlantic and Pac : - fic coast of the United State* by the whole breadth of the continent, still the inhabitants of each are closely bourd together by commirnitv oforigin anJ institutions, and by strong attachment to the Uuion. Hence the constant and increasing intercourse, and vast interchange of commercial productions, be tween these remote divisions of the Republic. At the present time, t ie most practicable and only commodious routes for communication between them are by the way of the Isthmus of Central America. It is the duty of the Government to secure these aveuues against all danger of inter ruption. In relation to Central America, perplexingques linns existed between the United Stiles and Great Britain at the time of the cession of California.— These, as well as questions which suhscquetly arose concerning inter-oceanic communications across the Isthmus, were, as it was supposed adjusted by the Treaty of Apriel 19, 1850; but, unfortunately, they have been reopened by serious misunderstand ing as to the import of some of its provisions, a read justment of which is now under consideration.— Our Minister at London has made strenuous efforts to accomplish this desirable object, but has not yet found it possible to bring the negotiations to a termination. THE BOMB.iniIMF.XT OF GREYTOWN. As incidental to these questions. I deem it proper to notice an occurrence which happened in Central America, near the close of the last session of Con gress. So soon as the necessity was perceived if establishing inter-oceanic communications across the Isthmus, a company was organized, under authority of the .State of Nicaragua, but composed for the most patt, of citizens of the United Sta'es, ior the purpose of opening such a transit way, by the river San Juan and Lake Nicaragua,which soon became an eligible and much used route in the transportation of our citizens and their property betwecn the Atlantic and Pacific. Meanwhile, and in anticipation of the completion and importance of this transit way, a number of adventurers had taken possession of the old Spanish port at mouth of the river San Juan, in open defiance of the State : or States of Central Ametiea, which upon their be coming independent, had rightfully succeeded to the local sovereignty and jurisdiction of Spain. These adventurers undertook to change the name of the p'ace from San Juan del Norte to Greytown, and. though at first pretending to act as the subjects of the fictitious sovereign of the Mosquito Indians, | they subsequently repudiated the control of any 1 power whatever, assumed to adopt a distinct politi cal organization. and declared them-elves an inde pendent sovereign State. If, at sometime, a faint hope was entertained that they might become a stable and respectable community, that hope soon vanished. They proceeded to assert unfounded claims to civil jurisdiction over Punta Arenas, a position on the opposite side of river San Juan ; which was in possession, under a tide wholly inde pendent of them, of citizens of the United States, interested in the Nicaragua Transit Company, and which was indispensably necessary to the pros perous operation of that route across the Isthmus. | The Company resisted their groundless claims; where upon they proceeded to destroy some of its buildings, and attempted violently to dispossess it. At a later period they organized a strong force for the purpose of demolishing the establishment of Punta Arenas, but this mischievous design was de feated by the interposition of one of our ships of war, at that time in the harbor of San Juan. Sub sequently to this, in May last, a body of men from Greytown crossed over to Punta Arenas, arroga'mg authority to arrest, on charge of murder, a captain of one of the steamboats of the Transit Company.— Being well aware that the claim to exercise juris diction there would be resisted them, as it had been on previoas occasions, they went prepared to assert it by force of arm':. Our Minister to Central Ameri ca happened to be present on that occasion. Believ ing that, the captain of the steamboat was innocent, for he witnessed the transaction on which the charge was founded, and believing also, that the in truding party, having no jurisdiction over the place where they proposed to make the arrest, would en counter desperate resistance il they persisted in their purpose, he interposed eflectuaily to prevent vir.lence and bloodshed The American Minister alterwarJs visited Greytown, and while he was there, a mob, including certain of the so called pub lic functionaries of the place, surrounded the house in which he was, avowing that they had come to arrest him, by order of some persons exercising the chief authority. While parleying with them, he was wounded by a missile from the crowd. A boat dispatched from the American s eamer Northern Light, to release him from the perilous situation in which he was understood to be. was fired into by the town guard, and compelled to return. These incidents, together with the known character of the , population r-f Greytown, and their excited state, in duced just apprehensions that the lives and prop erty of our ci'izeris at Punta Arenas would be in imminent danger alter thedepartore ofthe steamer, with her passengers, for New-York, unless a guard was left for their protection. For this purpose, and in otder to insure the safety of passengers and t property passing over the route, a temporary force ivas organized, at considerable expense to the Unit ed States, for which provision was made at the last ses-ion n| Congress. This pretended community, a heterogenous a semblage gathered from various countries, ami composed, for the most part, of blacks and persons of mixed blood, had previously given o her indi cations oi mischievous and dangerous propensities Early in the same month, property was clandesti nely abstrae'ed from the depot of the Transit Com pany. and taken to Greytown. The plunderers ob tained she! er there, and their pursuers were driven bick by its people, who not only protected the wrongdoeis and share I the plunder, bat treatej with rudeness and violence those who sought (ore cover their property. Such, in subs ance, are the facts-Biibmi'.led lomy consideration, and proved by trust worthy evidence. I could not doubt that the case demanded the in terposition of this Government. Justice required that reparation shou'd be made for so many and such gross wrongs, and that a course of insolence and plunder, tending directly to the insecurity of the lives of numerous travelers, and of the rich treasure belonging to our citizens, passing over this tr.in-it way, should be peremptorily arrered V ha'ever it might be in other respects, the com muity in question, in power to do mischief was not despicable. It was well provided with ordnance, small arms, and ammunition, and might easily seize on the unarmed boats, freighted with millions ol properly, which passed almost daily within i s reach li did not profess to belong to any regular Government, and had, in fact, no recognized de pendence on, or connection with, any one to which the United States or their injured citizens might apply tor redress, or which could be held responsi ble, or any way, for the outrages committed. Not standing before the world in the attitude of an or ganized political society, being neither competent to exercise the rights nor to discharge the obliga tions ola Government, it was, in fact, a marauding establishment, too dangerous to be disregatded, and too guilty to pa*s unpunished, and yet, incapable of being treated in any other way than as a piratical resort ol outlaws, or a camp of savages, depredating on emigrant trains or caravans and the frontier set tlements of civilized States. Seasonable notice was given to the people of Greytown that this Government required them to tepair the injuries they had done to our citizens, and to make suitable apology for their insult of our Minister, and that a ship of war would bedispa'ch ed thither to enforce compliance with these de mands. But the notice passed unheeded. There upon, a Commander ol the Navy, in charge ol the sloop.ol w,ir Cyane, was ordered to repeat , the de mands, and to insist upon a compliance therewith. Finding that neither the populace, nor those assu ming to have authority over them,, manifested any disposi ion to make the required reparation, or even to offer excuses fur their conduct, he warned them, by a public proclamation, that il they did not give satisfactions within a time specified, he would bom bard the town. By this procedure he afforded them opportunity 'o provide for their personal safety To these also who desire to avoid loss of pioperty, in the punishment about to be inflicted on the of fending town, he furnished the means of removing their effects, by the boa s of his own ship, and ofa steamer which he procured and tendered to them lor that pupose. At leng'h, perceiving no disposi tion on the patt of the town to comply with his re quisition, he appealed to the commander of Her Biitannic Majesty's schooner Bermuda , who was seen to have intercourse, and apparently much in fiuence with (he leaders among il.em, —to interpose and persuade ihem to take some course calculated to save the necessity ol resorting to the extreme measure indicated in his proclamation ; but that oft cer, instead of acceding to the request, did nothing more than to protest against the contemplat ed bombardment. No steps ol any sort were iaken by the people, to give the satisfaction required No individuals, if any there were, who regarded themselves as not ie-pofi-itle for Ihe mi-conduct of tire community, adopted any mean* to appaiate •hemselres from the fa'e of heguiry. The several charges, on which he demands for redre.-s w ere founded, had been publicly known t > ail lor some rime, and were ag.nn announced to them They did not deny any of these charges; they offered nc | explanation, nothing to ex enualion of ih'ir con duct; bu cotumaciou-ly relu-e.l to hold any inter course with the com mander <4 lie Cyme. By their obstina'e silence they seemed rather desirous 10 provoke ciuisiiserr; r'nl tin in to escape it. llieie is ; ample reason to believe h i their conduct of wanton defiance, n/i (heir part is irrtpu'ab > chiefly to the delusive idea thai the AmertcanGovemment would be deterred Irotn punishing them, thtotigh fear ol : displeasing a formidable foreign pow.-r, which, •hey presumed to think looked wi'h complacency upon tfieii aggressive and insulting deportment towards the Uni'ed S'a'es The Cyme at length fired upon the (own. Bafore much injury had been I done, the fire was twice suspended, in order to ! afford opportunity for an arrangement ; but this ; w.is tleclin'd. Most of ihe buildings of the place, of if le value generally were, in the sequel, ties [ troyed; bui, owing to ihe considerate precautions | aken by our naval Commander, there was nodes j traction of life When the Cyme was ordered to Cen'ral Ameri | ca. h was confidenly hoped an I expected that no ioi ca-iori would arise for "a resort to violence and i destruction of property and loss ol life." Instrue j tions to 'ha' effect were given to her commander, j no ex lerrie act would have been requisite had no; j the people themselves, fcv their extraordinary con | duct in the affair, frustrated all the possible mild measures for obtaining satisfaction Awi inlrawal | from the place, the object of his visit en'irely t!e ---j tea'ed, would, under eiicums'ances in which the i commander oi the Cyane found himself, have been absolute abandonment of all claims of our citizens i for indemnification,and:*ubmissive acquiescence in national indignity. It would have encouraged in i these lawless men a spirit of insolence and rapine ! most dangerous to the lives and property of our ci j at I'unta Arenas, arid probably embolJened j diem to grasp at the treasures and valuable mer chandise continually passing over the Nicaragua | route, [t certainly would have been most sa islac mry to me if the objects of the Cyane s mission j cou'd have been con.-umated i hoot any act of ; public force; but 'ne arrogant contumacy of the | offenders rendered it impossible to avoid me alter na ive, either to break up their establishment, or to leave them impressed wi'h the i lea that they might persevere with impunity in a careet of inso lence ami plunder. This tran-ac ion has been the subject of complain' | on the part of some foreign powers, arid nas been characterized with mo e of harshness than of jis ! tice If comparisons were to be insii'uted, it would not be difficult to present repeated instance? in the j history of S a'es. standing in the very front of j modem civjliza'ion, where communiti. s. far less j offending and more defenceless than Grey town, 1 have been chastised wi'h much grea'er severity, and where not cities only have been laid in ruins. • but human life has been recklessly sacrificed, and j the blood of the innocent made profusely to mm - j gle wrh thai of ihe guilty. TIIE FINANCES Passing from foreign to domestic affairs, your at j tention is naturally directed to the financial condi | lion of die country, always a sut ject cf general in i teiest For complete and exact information te : garding the finances, and din various branches of j tfie pubhc seivice connected therewith, I refer you I to the report of the Secretary ol the Tieaury ; from j which it will appear that the amount of rerenne during die last fi-cal year, fiom all sources, was ■ 873 541),7u5; and that the public expenditures fur j the same period, exclusive of die payments on ihe | public debt, amoumed to Sol 018 241). Duri! to 524.336.380 To the sum total of ihe receipts of that year is to be added a balance re j maining in tfie Treasury at the commencement I thereof,- amounting to S2l 942 892; and at the close j of the same year a corresponding balance amount ing to SQO, 137,967 of receipts above expenditure*, also remained in the Tieasury Although, in the opin on n| i|,p Secretary of the Treasury, the re ceipt of the current fiscal year are not likely to equal in amount those of laat year, yet they will undoubtedly exceed the amount of expenditures by a' leas; fifteen mtili >nof dollars. I shall, there fore. continue to dnect that the surplus revenue bd ' applied, so tar a* it can be judiciously a.id econo. i mically done, to the reduction of the public deb', 1 the amount of which at the commencement o! ihe !a*t fi-cal year, was 276 000 328. c.f which there had been pti.l on the 20:h day ol November. 1351, the sum of €22 365,172; leaving a balance ol out standing public debt o! only Sl4 075 45G. redeem able at different periods within fourteen years ih*re are also remnants of o'her government stocks, most of which are already due. and on which lite in crest has ceased, bu 1 which have no; yet been presented for piymen', amounting to 8233 179 This sta'emcnt exhibits the fact that he annual income of the Government greatly exceeds ; the amount of r public, debt, which latter rem sins ! unpaid only because the time of its payment has i not yet matured, and it canno; be discharged at once, except at the option of public creditor*, who preler to retain the securities of the United Sates; and the o'her fact, not less s'riking. that the annual revenue from all sources exceeds, by many mil lions of dollars, the amount needed for a prudent and economical administration of the government. ESTIMATES. The est'maies presented to Congress from the different Executive Departments, at the lastsesion amoun'ed to 833 40G 581; and the appropriations made, to the sum of 85S 11G 958 Of this excess ot appropriations over estimates, however, more than twenty million- was applicable to extraordi nary objects, hiving no reference to the u.-tial an nual expenditures. Among these objects was em braced ten millions to meet the third article of the treaty between the United States and Mexico; so that, in fact, lor objects of ordinary expenditure, the appropriations were limned to considerably less than forty millions of dollars. ! 'herefore re new my recommendation for a reduction of the do ties on imports. The report of the Secretary of the Trea-ury, presen's a series of tables, showing the operation of the revenue system for several suc cessive years, and as the general principle of reduction of duties with a view to revenue ant' not protection, may now be regarded as the settled po licy of the country, 1 trust that little difficulty will bo encountered in settling tho Jo ails of a meas ure to that effect. PECULATIONS. In connection with this subject, I recommend a change in the laws, which recent experience has shown to be essential to die protection ol the Gov eminent. There is no express provision of law, reqniring'the records and papers ola public charac-' ter, of the several officers for the use of their sue cessors, nor any provisions declaring it lelonv on their part to make false entries in the books, or re turn lal-e accounts. In the absence of Mich express provisions by law, the outgoing officers, in many instances, have claimed and exercised the right to take into their own possession, important books v d papers, on the ground that these were their private property; and have placed them beyond the reach ot the Government. Conduct of this cha racter, brought in several instances to the notice of the present Secretary of Ihe Treasury, naturally awakened his suspicion, and resulted in the dis closure that at four ports, namely Oswego, Toledo. Sandii*ky, and Milwaukee, tha Treasury had, by false entries been defrauded, wiffiin the four years next proceed.ng March, 18fe3, of the sum of one hundred and ninety-eight thousand dollars The great difficulty with which the detection of these frauds has been attended, in consequence of the abstraction of books and papers by the retiring officers, and the facility with which similar frauds iri the public service may be perpetrated, render the necessity of new legal enactments in the re. spec's above referred to, quite obvious For other material modifications ot the Revenue laws winch seer.; to me desirable, 1 refer you to the report of the Secretary ot the Treasury That report, and th e tables which accompany it, furnirh ample proofs of the solid foundation on which the financial securiw ot the country rests, and of the salutary influence of ihe Independent 'Treasury system upon com merce arid all monetary operations. ARM-Y INCREASE. The experience of the lat year fnrni-hes addi. tjonal reasons, I regret to say, of a painful charac ter, lor the recommendation heretofote made, to provide lor increasing the military foice in the ter ritory .inhabited by the Indians The settlers on the fioniiers have suffered much from the incursions of predatory bands, and large parties of emigrants to out Pacific possessions have been massacred wuh impuni'y. The recurrence of such scenes can only be prevented by teaching these wild, tribes the power of. and their responsibility to ihe United S ate* From the garrisons ol our frontier posts j; is only possible to detach troops in Email bodies ar,d ■ hough these have on all occasions displayed a gatlau'ry and a stern devotion to du>y, winch on a larget held would have commanded universal ad miration, they have usually suffered severely in these conflicts with superior numbers and hav# sometimes been entirely sacrificed. All the dipo sable lorce ol Ihe army is employed on this service, and is known to be wholly inadequate to the pro. tec ion wiixh should be afforded. The public rniml of the country has been recently shocked by ?av. age a'rocities committed upon defencele.-a ernt g:an'? and border settlements, and hardly less by the unnecessary destruction of valuable lives, where inadtfi uate detachments of troop* have undertaken to turoi-ii the needed aid. Without increase of tha military force,the scenes will be repeated, it is 'o be feared, on a larger scale, and wuh mors disastrous conteqneiices. Congress, lam sure, will perceive tha! the plainer-! duties and responsibilities ol Gov ern Tien' are involved in tin* ques ien, and 1 doubt not that prompt action may be coofidentally aniici pa'ed when delay must be attended by such fearful hazards. l ite bill of ihe last session, providing for an in inerea-e ol the pay of the rank and fiie of the army has had beneficial results, not only in facilila'ing enlis'ments but obvious improvement in iheclam of mei. who en'et the service. I regret that c>r responding consideration was not bestowed ori the officers, who iri view o! their character and services and the expenses they are necessarily -nbject, receive at present what, is my judgment, inadequate compensation The valuable services constantly rendered by the Army, and its inestimable the nu cleus around which the volunteer force® of the na tion can promptly gather in the hour of danger, sufficiently attest the wi-Join of maintaining a mili tary peace establishment; but the theory of our system and the wise practice under it. rrquire that any proposed augmen'a ion, in lima ol peace, Le only commensurate wuh our extended limits ami f oil ier relations. While scrupulon*!y adhering to. this principle. 1 find, in existing circamt'ances, s necessity for increase of our military force, and it is b-ff eve.l that four new regiments, two ofinlantry and two ol mounted men wilt be sufficent to meet the present exigency If it were necessary care lolly to weigh the cost in a ease of such urgency, i: would be shown that the additional expenses would be comparatively light. ARMY REFORM Wi-Ii the increase of the numerical force of the army should, I think, be combined certain meas ures o! reform in its organic arrangement and ad ministration. The pre-ent organiza'ion is the re sult of par ial legislation often directed to special objects and merest ; and the laws resulatina -auk and command, having been adopted many years ago from the British code, aro not always ap I plicable to our service. It is not surprising, there ! fore, that the ay-tern should be deficient in the j symmetry ar.d simplicity essential to Tie harrnotn ! on- working of its several parts, and requue a care fa! revision. • 1.0 present organiza'ion, by maintaining large staff corps r.r departments, separates many officers | Irom that close connection with troop-, and those ae ive duties in the field, which aie deemed re i quisite to qualify them for the varied respousibi.i ties o! high command Were the duties of the army j s aff mainly discharged by officers detached from j their regimen's, it is believed that the special ser vice would be equally well perlormed, and tiis ! discipline and instiuction of the army be improved, i While due regard to the secntiiy of the rights of of ficers, and to the nice sense of honor which should s be cul tvated among them, would seem toex.c; j compliance wi h the established rule ot promotion i in oi dinar y cases, still it can h.ndij be doubted hat the ramie of promotion by selection, which is now ; practically confined to ihe grade of general officers miuht be somewhat extended with benefit to the pubiiG service. Observance of lite rule of seniorcy sometimes leads, especially in time of peace, 11 the promotion of officers who, afier men i toriou- and even dis'ingui.-hed service, may have been rendered by age or infirmity incapable o! perlormmg active du y, and whose advancement, therefore, would tend io impair the efficiency of die army. Suitable provi-ions for this class ol ol fleer*, by the creation of a re ired list, ivoulj reme dy the evil, without wounding the just pride of men who, by past services, have es'abiished a claim M high consideration. In again commending his measure to the lav uable considers'ion of Congrrw 1 would susrgesl thai the power of placing officers on retired list be limited to one year. The practi cal operation ot the measure would thus be te.-ted, and it, afer the lapse of years, there shoulJ bo oc casion to renew the provision, it can be reproduc ed with any improvement which experience rrt iy indicate. The piesent orgutizafion ol the artillery into regimen's is liable to obvious objections. The service of artillery is that of batteries, and an or gan zation of batteries into a corps of aritlleiy wou!! tie mote consistent with the na'ure of their duhei- A large pat! of the troops now called artillery are, and have been, on dicy as infantry ; the distinction be.ween the two a-ms being neatly nominal Ihi nominal artillery in our service is entirely di-pro por'ionate to the whole lorce, and grea'er than he wants of (he country demand. I therefore com mend (he discontinuance of a distinction which ha* j no foundation in ei her the arms used or the char •ii .1 r of tfie sen ice expected to be performed. In connection will the proposition for tho in crease ol the army, 1 have presented these sugges (ions with regard to certain mpasujes of reform as (lie completing of a sy- em. which would produce the happiest results from a given expenditure, and which I hope may attract the early attention, and be deemed worthy of the approval of Congress. NAVAL AFFAIR*. he recommarulaiio!! of ihe Secie'arvof ihe yy, having reference in the more ample provisions lor he dicipline and general improvement in the character of seamen, and far the reorganiz ion and gradual increase of the navy, I deem eminently worthy ofx our favorable consideration. The prin ciples, which have controlled our policy in rela tion to the permanent military force, by sea and ■ and, are sound, consistent wuh the theory ol our s\ em, and should by no meaas be disregarded Bit- limiting the lorce to the objects pait.culaiiy set "th in tne preceding part of this message, we s u!d not overlook the prespnt magnitude and pro-pec ive extension of our commercial marine, nor Gil to sive due we,ghl to the fact that, besi Irs . te two thousand mdes of Atlantic seaboard, we hare now a Pacific! coast '(fetching fiom Mexico Tie 'iii*h possessions in the north, teeming wuh I weal h and enterprise, and demanding the cons'ant presence of the shipa-of.war. The augmentation of the navy has not kept pace with the duties pro perly and profitably assigned to it in time ot peace, and it is inadequate lor the large field of i s opera tions, not merely in the present but still mote in 'lie progressively increasing exigencies of the wealth and commerce of the United States. I cor t Muy approve of the proposed apprentice system lor nur national vessels, recommended by the Se cretary of the navy. DISASTERS AT SKA—NEW LAW RECOMMENDED Tho occurrence, during the last few inoß'hs, of