continued from first paoej 'I invite the early and favorable consideration of Congress to this important subject. . Besides New Mexico ahd'the'CalifoYniiiB, 'there a'fe other Mexican provinces which haVb been reduced to our possession by conquest. These other Mexican province, are now governed by Tur military and naval commanders, -under the general authority which is conferred upoVa 'con queror by the lawsot war. They should contin ue to'be'held as a means of coercing Mexico to accede to just terms of peace. Civil as well as military officers are required to conduct such a "government. Adequate compensation to be drawn from contributions levied on the enemy should be fixed by iaw for such officers as may be thus em ployed. What further provision may become necessary, and what final disposition it may be proper to make of them, must depend on the fu ture progress of the war, and the course Mexico may think proper hereafter to pursue. With the views I entertain, I cannot favor the policy which has been suggested, either .to with draw our army altogether, or to retire to a desig nated line, and simply hold and defend it To withdraw our army altogether from the conquests they have made by deeds of unparalleled bravery, aud at the expense of so much blood and trea sure, in a just war on our part, and one which, by the act of the enemy, we could not honerably havo avoided, would be to degrade the nation in its own estimation and in that of the world. To retire to a line, and simply hold and defend it, would not terminate the war. On the contra ry, it would encourage Mexico to poruevere, and tend to protract it indefinitely. It is not to be expected that Mexico, after re fusing to establish such a line as a permanent boundary when our victorious army are in posses eion of her capital, and in the heart ot ner coun trv. would permit us to hold it without resistance, That she would continue the war, and in the most harrassing and annoying forms, there can lie no doubt. A border wanare ui uie musi uuv age character, extending over a long line, would be unceasingly waged. It would require a large armv to be kept constantly in the field, stationed at posts and garrisons aiongsuch a line, to pro tect and defend it. The enemy, relieved from the pfessnre of our arms on lus coasts and m the populous parts or the interior, would direct his attention to this line. and. selecting an insolated post for attack his fWpsnnnn it-. This WOUld be a condition of affairs which the Mexicans, pursuing their favorite system of guerilla war fare, would probably prefer to any other. Were we to assume a defensive attitude on such a line, all the advantages of such a state of war would be on the side of the enemy. We could levy rid contributions upon him, or in any other way make him feel the pressure of the war, but must remain inactive and await his approach, being in constant uncertainty at what point on the linej or at what time, he m'ght make an assault. He may assemble and organize ail ovef whelm ing force in the interior, on his own side of the line, and, congealing his purpose, make a sudden assault upon some one of our posts so distant from any other as to prevent the possibility of timely succor or reinforcements J and fin this way our trallant army would be exposed to the danger of . - . r. . ! r i .1 11 J oemg cut oil in detail ; or n, oy meir unequanea bravery and prowess, every where exmouea uu ring this war, they should repulse the enemy their numbers stationed at one post may be too small to pursue him. If the enemy be repulsed in one attack, he would have nothing to do but to retreat to his own aide of the line, and, being in no fear of a pursu ing army, may reinforce himself at leisure, for another attack on the same or some other post He may, too, cross the line between our posts, make rapid incursions into" the country which we hold, murder the inhabitants, commit depredations on them, and then retreat to the interior before a sufficient force can be concentrated to pursue him Such would probably be the harrassing character of a mere defensive war on our part If our forces, when attacked, or threatened with attack, be permitted to cross the line, drive back the enemy and conquer him, this would be again to invade the enemy's conntry, after having lost all the advantages of the conquests we have already made, by having voluntarily abandoned them. To hold such a line successfully and in security, it is far from being certain that it would not require as large an army as would be neces sary to hold all the conquests we have already madef and to continue the prosecution of the war in the heart of the enemy s country. It is also for from- being certain that the expenses of the war would be diminished by such a policy. I am persuaded that the best means of vindica ting the national honor and interest, and of bring ing the war to an honorable closerviH be to pros ecute it with increased energy and power in the vital parts of the enemy's country. In my annual message to Congress of Decem ber last, I declared that " the war has- not been waged with- a view to conquest ; but having been commenced By Mexico, it has been carried into the enemy's country, and will be vigorously pros ecuted there-,-with a view to-obtain an honorable peace, and thereby secure ample indemnity for the expenses of the war, as well as to our much injured citizens, who hold pecuniary demands against Mexico:"" Such; hr my judgment, con tinues to be our true policy indeed,. the only policy which' will securer permanent peace: It has never been contemplated by me,-ay an object of the war, to make or permanent conquest ot the republic of Mexico, or to annihilate her separate existence as an' independent nation. On the contrary, it has ever been my desire that she should maintain her nationality, and, under a good government adapted to her condition, be a free; independent and' prosperous republic. The United States "srere the first among the nations to recognize her independence, and have always de sired to be on terms of amity and good neighbor hood with her. This she would not suffer." By her own conduct we hax'e been' compelled to-engage in the present war. IrTics prosecution, we seek not its overthrow as a nation ; but, in vindicating our national honor, we seek to obtain icdress for the wrongs 6he has done us, and'in demnity for our just demands against her. We demand an honorable peace ; and that peace must bring with it indemnity for the past, and security for the future. Hitherto Mexico- has refused all accommodation by which such a peace could be obtained. Whilst our armies have advanced from victory to victory, from the commencement of the war, it has always been with the olive-branch of peace in their hands; amf it has been in" the power ot .Mexico, at every step, to arrest hostilities-by ac cepting it ' One gref, obstacle in. the attainment of peace 'has. 'undoubtedly, arisen from the fact that Mex- lU I1US UCCU OU Ul" - J J tiM'dr "military Usurper after another, and such has bedn !the condftidft "of insecurity in which their successive governments havte been placed, lest for this Vefycause-, a tivai faction ifni'gnt ex pel it from power. . Such was the fate of President Herrera's ad ministration in 1845, for being disposed, eVen to listen to the overtures of the United States o prevent the war, as is fully confirmed by the offi cial correspondence which took place in the month of August last-, between him and his gov ernment, a copy of which Is herewith 'communi catee!. "For this cause alone, the revolution which displaced him from power was set on foot" by General Paredes. Such may be the condition of insecurity of the present government There can be no doubt that the peaceable and well-disposed inhabitants of Mexico are convinc ed that it is the true interest of their country to conclude an honorable peace with the United Rintes: but the apprehension of becoming the victims of some military faction or usurper may have prevented them from manifesting their feel- t " a mi 1 1. ngs by any puuuc act. ne removal oi any sucu apprehension weuid prooauiycause mem to spean their sentiments treeiy, and to aaopt me mea sures nedessary for the restoration of peace. With a people distracted and divided by con tending factions, and a government subject to constant changes bv successive revolutions, the continued successes of our arms may fail to se cnr. a satisfactory ocace. In such event, it may become proper for our commanding generals in the field to give encouragement and assurances of protection to the triends or peace in Mexico in the establishment and'maintenance of a free re- nublican government of their own choice, able and willing to conclude a peace which would be just to them, and secure to us the indemnity we demand. This may become the only mode of obtaining such a peace. Should such be the result, the war which Mexico has forced upon us would thus be converted into an enduring blessing to herself. After finding her torn and distracted by factions, and ruled by military usurpers, we should then leave her with a republican government in the enjoyment of real independence, and domestic peace and prosperity, performing all her relative duties in the greSt family of nations, and promo ting her own happiness by wise laws and their faithful execution. If, after affording this encouagement and pro tection, and after all the persevering and sincere efforts we have made, from the moment Mexico commenced the war, and prior to that time, to ad just our differences with her, we shall ultimately fail; then we shall have exhausted all honorable means in pursuit of peace, and must continue to decupy her country with our trooops, taking the full measure of indemnity into our own hands, arid riiust enforce the terms which our honor de mands; To act other wise in the existing state of things in Mexico, and to withdraw our army, without a peace, would not only leave all the wrongs of which we complain unredressed, but would be the signal for flew and fierce civil dissensions and hew revolutions all alike hostile to peaceful re lations with the United States. Besides, there is danger, if our troops were withdrawn before a peace" tva9 concluded, that the Mexican people, wearied with succesive rev olutions, and deprived of protection for their per sons and property, might at length be inclined to yield to foreign influnces,- and to" cast themselves into the arms' of som'e" European monarch for pro tection from the anarchy and suffering which en sue. This lor our own safety, and in pursuance of our own established policy, we5 should toe'coni- pelled to resist. We could never consent that Mexico should be thus converted into a monarchy governed by a foreign prince. Mexico is our near neighbor, and her" bou'nda:- ries are coterminous with our own, through the whole" extent across the North American conti nent, from ocean to ocean. Both politically and commercially,- we have the deepest interest in her regenerition and prosperity. Indeed, it is impossible that, with any just regard to our own safety, we can ever become indifferent to her fate.- It may be that the Mexican governtment and people have misconstrued or misunderstood our forbearance- and our objects, in desirinsr to" conclude amicable adjustment of the existing differences between the two countries. They may have supposed that we' would submit to terms degrading to- the nation' : or thev mav have drawn false inferences from1 the supposed division of opinion in the United States on the subject of the war, and may have calculated to gam much by protracting it; and, indeed, that we" might; ultimately abandon it altogether, with out insisting on any indemnity, territorial or oth erwise. Whatever may be the false impressions under which they have acted, the adoption and prosecution of the energetic policy proposed must soon undeceive them'. In the future prosecution' of Che' warj the ene my must be made to feel its pressure more than they 'have heretofore done. At its commencement it was deemed proper to conduct it in a spirit of l . 1 t T - I "1 - ioruuarancu ana iiDenv. w im tnis end in view. early measures were adopted to conciliate, as far as a state of war would permit, the mass of the Mexican' population ;', to convince them' that the war was waged not against the peaceful inhabit ants of Mexico, but against their faithless gov ernment, which had commenced hostilities; to remuve irom ineir minus- me raise impressions r- . wmen their designing and interested1 rulers had ; artfully afteinpfed tb'make,- that the vraf oh' ouT part was one of conquest that? it' was- a war -against their religion and their churches, which were to be desecrated and overthrown ; and that their rights ot person and private property would be violated. To remove these false impressions, our commanders in the field weredirected scru pulously tb'respect their religion, tlieir churches, -and their- church propeny.nvhich'were in-no man ner to bevibfated ;' they were directed also to re spect the rights of persons and property of all who should not take up arms against us. Assurances lirthis effect were given to the Mexican people by Major Genera' Taylor, in a proclamation issued in pursuance of instructions from the Secretary of War, in the month of June, 1848, and again by Major General Scott, who ac ted upon his own convictions of the propriety of issuing it in a proclamation of the 11th of May, 1847. v In this spirit of liberality and conciliation, and wiin-a view to prevent the body ot the Mexican population from taking op arms against ub, was the war conducted on our' parti- Provisions and other supplies furnished to our army by Mexican citizens were paid for at fair aud liberal prices .. . . i . - . - . . ' agreed iipon by the parties. After the lapse of a few months, it became apparent that these assur ances, and this mild treatment, had failed to pro duce the desired effect upon the Mexican popula tion. While the war had been conducted oh our part according to the most humane and liberal principles observed by civilized nations, it was waged in a far different spirit on the part of Mex ico. Not appreciating our forbearance; the Mex ican people generally became hostile to the U. States, and avail themselves of every opportuni ty to 'coinmit the most savage excesses upon our troops; Large numbers of the population took Up arms, and, engaging in gUerilla warfare-, rob- bed and muruerea in the most cruel man "her individual soldiers, or small parties whom ac cident or other causes had separated from tht main body of our army; bands of guerrillas and robbers infested the roads, harrassed our trams and, whenever it Va9 in theilr power, cut off ouf supplies. The Mexicans having thus shown thertiselves to be wholly incapabJe df appreciating our for bearance and liberality, it was proper to change the manner of conducting the war, by making them feel its pressure according to the usages observed under similar circumstances by all oth ercivilied nations. A'ccbrdihfflvi as early afs the ivvent'v-second o September, 184C, instruction's were given by the Secretary of War to Major General Taylor to "draw supplies to our army "lrom the enemy without paying for them, and to require contribu tions for its support," if in that way he was satis fied he could "get abundant supplies for his for ces." In directing the executidri of these in structions, much was necessarily left to the dis cretion of the commanding officer, who was best acquainted with the circumstance's by which he was surrounded, the wants of the army, and the practicability of enforcing the measure. uen. ray lor, on tne 20th dtuctober, i4u, re plied from Monterey, that "it would Have been im possible hitherto.and is so now, tb'sttstdifi the army to any extent by forced contributions b'f money or supplies. For the reasons assigned by him; he did not adopt the policy of his instructions, but declared his readiness to do so, "should the army in its future operations, reach a portion of the country which may be made to supply the troop with advantage." He continued to pay for the articles of supply which were drawn from the en emy s country. Similar instructions were issued to Major Geh eral Scott on the 3d of April, 1847, who replied from Jalapa, on the 20th of May, 1847, that, if it be expected that "the army is to support itself by forced contributions levied u'pon the country, we may ruin and exasperate the mhaibitants, and starve ourselves. Itie same discretion was given to him that had been to Gen. Taylor this respect Gen. Scott, for the reasons assign ed by him, also continued to pay for the articles 0 supply tor the army which were drawn: from the enemy. On the thirty-first or March last, I caused an order to be is sued to our military and naval commanders to levy and col lect a military contribution upon all vessels and merchandise wnicli might enter any oltlie ports of Mexico in our military occupation, and to apply such contributions towards aeiray ing the expenses of the war. By virtue of the right of con quest and the laws of war. the conqucrer, consulting his own safety or convenience, may either exclude foreign commerce aitogetner lrom all sucu pons, or permit it upon such terms and conditions as he may prescribe. Before the principal ports of Mexico were blockaded by our navy, the revenue derived from impost duties, under the laws of Mexico, was paid into the Mexican treasury. After these ports had fallen into our military posicssion, the blockade was raised, and commerce with them permitted unon nre scribed terms and conditions. They were opened to the trade of all nations . upon. the payment of duties more moderate in their amount than those which had been previously levied by Mexico; and the revenue, which was formerly paid into the Mexican treasury, was directed to be collected by our milita ry and naval officers, and applied to the use of our army and navy. Care was taken that the officers, soldiers, and sailors of our army and navy should be exempted from' the operations of me order; ana as ine mercnanaise imported upon which tne order operated must be consumed by Mexican citizens, the contributions exacted were, in effect, the seizure of the pub. lie revenues of Mexico, and the application of them to our own use. In directing this measure, the object was to coin- pel the enemy to contribute, as far as practicable, towards- the expenses ot tne war. ..... For the amount of contributions which have been levied in this form, I refer you to the accompanying reports of the secretary ot war ana 01 tiie secretary or the Navy, by winch it appears that a sum exceeding half a1 million of dollars had been collected. This amount would undoubtedly have been much larger, but tor the difficulty 01 Keeping open .communications between the coasts and the' interior, so as to enable the owners of the merchandise importedto transport, and vend it (o the inhabi tants of thfe country, it Is' confidently expected that this difli culty will, to a great extent, be soon removed by our increas ed forces which have been sent to the field. Measures have recently been adopted bv which the internal as well as external revenues of Mexico, in all places in our military occupation, Will be seized and appropriated to the use ot our army ana navy. The policy of levying upon the enemy contributions in ev ery form, consistently with the laws of nations, which it mav be practicable forour military commanders to adopt, should, in my judgment, be rigidly enforced, aud on ers to this effect have accprdingly been given. By such a policy, at the same time IhatouroWH treasury .wHI be relieved ftoin a'heavydrain, the Mexican people will be made to feel the burdens of the war, and, consulting their own interpsts, may be induced the more readily to require their rulers to accede tb a just peace. After the army had reached the heart of the nibsf wealthy portion of Mexico, it was supposed that the obstacles which had before that time prevented it would not be suclr as to render impracticable the levy of forced contributions for its support: and on the first of September, and again on the sixth of October, 1847, the order was repeated in despatches addressed by the Secretary of War to General Scott, and his attention was again called to the importance of makinc the enemy Dear tne burdens oi tne war ay requiring them to fur nish the means of supporting our army : and he was directed to adopt this policy, unless, by doing bo, there was danger of uciJiitiiig me uiiiijt ui mi; iiciooai jr summus. tuples oi IflCsC despatches were forwarded Co General Taylor for his govern mcnt. After the adjournment of the last session of Congress, events" transpired in the prosecution of the war, which, in my judgment" required a greater rid'rnber of troops in the field than had been anticipated. Thd'strength of the army was accordingly increased by 'accepting' the servi ces of all the volunteer forces authorized by the act of the 13th of May, 1846, without putting a construction on that act, the correctness of which was seriously questioned The volunteer forces now in the field, with those which had been 'accepted' to 'serve for twelve months,' and were discharged at the end of tlieir t'e fori of service, exhaust the fifty thousr and men authorized by that act. Had it been clear that a proper construction of that act war ranted it, the servrces-of an-additional number would have been called for and accepted ; but doubts existing on this point, the power was noi exercised. It is deemed important that Congress should, at an early period of their session, confer the authority to raise an additional regular force to serve duiiug the war with Mexico, and to be discharged upon the conclusion and ratification of a-treaty of peace. I invite the attention of Congress to the views presented by the Secre tary of War in his repoit upon this subject. 1 recommendj also, that authority be given by law to call for and accept the services of an ad ditional number of volunteers. at such time and tb such extent as the eraergen- cies of the service may lequire. ln prosecuting the war with Mexico, whilst lh utmost care has been taken to avoiievcry just cause of complaint on the part of neutral . . ---l-10UU nations, and none has been given, liberal privi leges have been granted to their commerce in the ports of the enemy in our military occupa tion. The difficulty with the Brazilian government, which at one time threatened to interrupt the friendly relations between the two countries, will, I trust, be speedily adjusted. I have re ceived information that an envoy extraordinary and minister plenipotentiary to the U. Slates will shortly be appointed by his Imperial Majes ty, and it is hoped that he will come instructed and prepared to adjust all remaining differences between the twb governments in a manner ac ceptable and honorable toboth. In the mean time, I have every reason to believe that noth ing will occur to prevent our amicable relations with Brazil. It has been my constant effort to maintain and cultivate the most intimate relations of friend ship with all the independent Powers of South America; and this policy has been attended with the happiest results. It is true, that the settle ment and payment of many just claim3 of Amer ican citizens against ihesb nations hdve' been long delayed. The peculiar position in which they have been placed, and the dfesire tin the part of friy predecessors as well as myself to grant them the utmost indulgence, have hitherto prevented these claims from being u'fged 1H a manner demanded by strict justice. The time has ar rived when they ought to be finally adjusted rind liquidated, and efforts are now making far that purpose. It is proper to IhTorril ou that the government of Peru has in good faith paid the first two in stalments of the indemnity df thirty thousand dollars each, and the greater portion of the" in terest due thereon, in execution of the conven tion between that government and the United States, the ratifications of which were exchanged at Lima on the 31st of Octber, 1846. The At torney General 6'f ihe United Stales, early in August last, completed the adjudication of "the claims under the convention, and made this re port thereon, in pursuance of the act of the eighth bf August, 1846. The sums to which the cldima'nts are respectfully entitled Will be paid o'ii defrtend at tiie treasury. 1 invite fh'e early attention 6f Congress to the present condition of our citizens in China. Un der our treaty with that power, American citi zens are withdrawn from the jurisdiction, wheth er civil or criminal, of the Chinese government and placed under that of ourptiblic functionaries in that country. By these alone can tfu'r effizens be tried and punished for the commission 6? an'y crime;by these alone can questions be decided be tween them, involving the rights' of person and property ; and by these alone can contracts be enforced, into which thev m'ay have entered' with the citizen's or subjects of foreign powers. The merchant vessels of the United States ly ing in the waters of the five ports of China open to foreign" commerce are under the exclusive jurisaiction of officers of their own government. Until Congress shall establish competent tribu nals to try and punish crimes, and to exercise jurisdiction in civil cases in China, American citizens there are subject to no Jaw whatever. Crimes may be committed with impunity, and debts. may be contracted without any means to' enforce thefr payment. Inconveniences have already restrKed from the omission of Congress to legislafe upon, the subject, and 3till greater are apprehended.- The British authorities in China have already complained that this gov ernment has not proVfded for the punishment of crimes, or the enforcement of contracts against American citizens in that cbuntry, whilst their government has established tribunals by which an American citizen can recover debts due from British subjects. Accustomed as the Chfnse are id summarv justice, they could' not' be made to comprehend why criminals who are citizens of the U. States should escape with impunity, in violatfo'rV of treaty obligations, whilst the punishment of a Chinese, who had committed any crime against an American citizen, would be rigorously ex acted. Indeed, the consequences might be frf tal to American citizens in China, should a fla grant crime be committed by any one" 6f diem1 upon a Chinese, and should trial and punish ment not follow according t'o the requisitions of the treaty. This might dfsturb, if not destroy, our friendly relations with that empire, and cause an interruption of our valuable commerce Our treaties with the Sublime Porte. Tripoli. Tunis, Morocco, and Muscat, also require the legislation or congress to carry them into exe cution, though the necessity for immediate ac tidn may not be s'6 urgent as in regard to China. The Secretary of State has submitted-an es- timate to defray the expense of opening di'plo' matic relations- with the rapal States" The in teresting political events now in progress-in inese oiaiesas wen as a just reearri to our commercial interests, have, in my opinion, reh dered such a measure hicrhlv expedient. Estimates have also' been subrtifltc'd' for tVYff outfits and salaries of charges d'affairs to the republics" of Bolivia. Guatemala, and EimarW The manifest importance of cultivating the most nenaiy relations witn an tne independent States upon this continent has induced rrie to recom mend appropriations necessary for the mainte nance of these missions. I recommend to Congress that an appropria tion be made, to bo paid to the Spanish govern ment for the purpose of distribution" among the claimants in 'the Amistad case.' I entertain the conviction that this is due to Soain undpr the treaty of the 20th of Ocf. 1795; and, more over, thnt, from the earnest manner in which the claim continues to be lirued. so lono- ai it .shall remain unsettled it will be a source of ir ritation and discord between the two countrip which may prove highly prejudicial to the in terests of the United States. Good nolirv nn ess than a faithful compliance with our trpaiv obligations, requires that the inconsiderable ap propriation demanded should be made. A detailed statement of the condition of the finances will be presented in the annual report of the Secretary of the Treasury. The imports or me last nscai year, ending on the 30th Juno. 847, were of the value of Sl46.545.638 on nf wnicn tne amount exported was Sfi.nn iq eaving $138,534,480 in the country for domes tic use. 1 he value for exports for the same pe riod was $158,648,622, of which 150,637,464 consisted of domestic productions, and $8 Oil-. ua ui lureigu uruuiea: The receipts into the treasurv for th uma period amounted to $20,346,790 37, of which- mere was oenvea irom-customs $23,74 7.864" 66 from sales of public lands, 2,498,335 20 ; and from incidental & miscellaneous souro.. fti nn 570 51. The last fiscal amount wa3 received embraced five months un der the operation of the tariff act of 1842, and seven months during which the tariff act of 1840 was in force. During the five months under the act of 1842, the amount received from customs was $7,842,306 90, and during the seven months under the act of 1846 the amount received was $15,905,557 76. The nett revenue from customs during the year ending on the first of December, 1846, be ing the last year under the operation of the ta riff act of 1842, was $22,971,403 10; and the nett revenue from customs during the year end ing on the first of December, 1847, being the first year under the operation of the tariff act of 1846, was about $31,500,000; being an increase of revenue for the first year under the tariff of 184G, of more than $8,500,000 over that of the last year under the tariff of 1842. The expenditures during the fiscal year end ing on the 30th of June last, were $59,451,177 65; of which $3,522,082 37 was on account of payment of principal and interest of the public debt, including treasury notes redeemed and not funded. The expenditures, exclusive of pay ment of public debt, were $55,929,095 28. It is estimated that the receipts into the trea sury for the fiscal year ending on the 30th of June, 1818, including the balance in the treasu ry on the first of July last, will amount to $42, 880,545 80, of which $31,000,000, it is estima ted, will be derived from customs ; $3,500,000 frolnthe sale of the public lands; $400,000 from incidental sources, including sales made by the Solicitor of the Treasury; and $6,285,291 55 from loans already authorised by law, which, together with the balance in the treasury on the first of July last, make the sum estimated. The expenditures for the same period, if peace with Mexico shall not be concluded, and the army shall be increased as is proposed, will amount, including the necessary payments on account of principal and interest of the public debt and treasury notes, to $58,616,060 07. On the first of the present month, the anlount 6'f the public debt actually incurred, includino treasury notes, was $45,659,659 40. The pub lie debt due on the fourth of March, 1815, inclu ding treasury holes, was $17,788,799 62; and consequently the addition made to the public debt since that time is $27,870,559 78. Of the loafi of $23,000,000, authorized by the a'cf 6'f tile 28th of January, 1847, the sum of five millions was paid out to the public credi tors', or exchanged at par for specie; the remain ing $18,000,000 was offered for specie to the highest bidder not below par, by an advertise ment issued by the Secretary of the Treasury, and published from the ninth of February until the tenth' of April, 1817, when it wa3 awarded tq'lhe several highest bidders, at premiums va rying fr6m: one-eighth of one per cent, to two pert cent, above par. The premium has been paid into the tfeasury and the sums awarded deposited in .specie fh the treasury as fast as it was' required by the waYits of the government. T.V mar f IV i . uib&k me cApcuuiiuies jur ine remainder of the present aWd for the next fiscal year, ending oh the thfrtfeth4 of June, 1849, a further loan, in aid' of the ordinary revenues of the gov ernment', will be necessary. Retaining a suffi cient surplus in the treasury, the loan 'required for" the remainder of the present fiscal year will be abouf StoOjO'OO; ( .If t'h'e duty on tea and cbff6e be' imposed, an'd the graduation of the prfcedffha public lands shall be ma'd'e at an early period1 6'f j'bur session,, aar recommended, the loan for the present fiscal year may be re duced to seventeen millions of dollars. The loan may be further reduced by whatever a mount of expenditures can be saved 6y milita ry contributions collected in Mexico. The most vigorous measures for the augmentation of these contributions have been directed; tnd a very considerable sum is expected from that source. Its amount cannot, however, be calculated with any certainty. It is recommended that the loan to be made be authorized upon the same terms, and for the same time, as that which was au thorized under the provisions of the act of the 38th of January, 1847. Should the war with Mexfco be continued un til the thirtieth of June, 1849, it is estimated that a larther loan ol $20,500',0tJfJ will be required for the fiscal year ending on that day, in case no duty be imposed on tea and coffee, and the public lands be' not reduced and graduated in price, and1 no military contributions shall be collected in Mexico. If the dutv on tea anrl coffee be imposed', and the lands be reduced and graduated in price, as proposed, the loan may be reduced to $17,000,000, and will be still further reduced by the amount of military contributions which may be collected in Mexi co. It is not proposed, however, at present, to ask Congress for authority to negotiate this loan for the next fiscal year, as it is hoped that the remainder of the present fiscal year, aided by military contributions which may be collect ed in Mexico, may be sufficient. If, contrary to my expectation, there should be a necessity for it, the fact will be communicated to Con gress in time for their action during the present session. In no event will a sum exceeding $6,000,000 of this amount be needed before the" meeting of the sessio'n of Congress in Decem ber, 1848. The act of the thirtieth of July, 1846, " redu cing the duties on imports," has been in force-, since the first of December last; and I am grat ified to state that all the beneficial effects whivru were anticipated from its operation have been fully realized. The public revenue denved from customs during the year ending on the first of December, 1847, exceeds by more thafteiht millions of dollars the amount received in the preceeding year under the operation of tho act. of 1842, which was superseded and-repealed by it. Its effects are visble in thn most unexampled prosperity which' prevails in every urauuu oi PUSiness. While the repeal of the nrnhihitnrv nruli re strictive duties of the act of 1842f and the- sub stitution in their place of reasonable revenua rates levied on articles imported according to meir actual vaiue nas increased the revenue and augmented our foreipn trade, all the prat in terests of the country have been advanced and piomoiea. Tho great anif important interests of agricul ture, which had been not only too much neg lected but actually taxed under the nmtppii policy for the benefit of other interests, have oeen relieved oi tne ouraens which that policy imposed on them: and our farmers and nlnn. ters, under a more-just and" liberal commercial policy, are nnomg new and profitable markets abioad for their augmented products. Our commerce is raoidlv increasing, nnrl is extending more widely the circle of internatio LTOPTxlnuED ON THIRD PAGg,
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