111 ' MENAGEI Fe11017.-Clthennef the Senate 'a:1(1'11°66:0f Repreeentatives: Another year of 'health and sufficiently ahundlini harveita •hks passed. For these, and'esPediallifiril 7 the improved condition of oar national affairs, our renewed and our pro found gratitude to ,Godris duo. We remain in peace. and frendahip with foreign powers. The efftistSH:Of . 4tidoYal citizens of the United Btatealer Inlays:las in.foreign wars, and to aid in inehinsible insurrection , have been una- TatilnN.OHtfr lidajeskiy . 's Government, as wan! justly expoctmillipsvo exercised their au th or. ity to prevent ttiedepartdre'or rieiv hdsllle oxl•-` peditions from British qirts.' The 'TA:up-T.or of Franck, has by a like proceeding promptly: indioated the neutrality which • Ink proclaimed at the beginning of the contest. ,Questions great intricacy and importande bare arisen oat of the blockades and: other beligercnt op erations between the ciiiiititriment and several of the maritime powttre, bht they have.beeit discussed, and, wine ,as was possible, accom modated in a spirit of frankness, justice and good , will.v. It Asec..espocially, gratifying that our prise - totirbs t by the impartiality of their adjudißgismiiilove commanded the. reappet and confidence of thonuiritinan powers. ' • I , cailitol9l4oN TREAT,IfB. The IfitipleinentsPireaty between the.UtiP tedttatiss and Great Britain, for theeuppree elm of the African slave trade, made on the 17th AKE Mater:olM b &Oa:K4A rat led and carried into execution. It is believed that so far as• ports: anti Adierician citizens', are concerned, that inhuman and bar traffic hai been brought to 'an' and. I shall submit, fur the consideration of the Sed ate, a Convention for theltdjuStment of pee -4 sossory olaims in Washington territory, arisZ ing °M e, the treaty of the .15th of June, 1846, tletween the United States arid Great - Britain, and which hava,T been the swim of some disquiet among the citizens of that.pow rapidly improving - part of the country., •A novel and important question, involving the extent of the. maritime , jurisdiction of Spain, in the waters which surround the 'lsland of Cuba, has been debated, without reaching an agreement, and it it is proposed, in an amica ble spirit, to refer it to the arbitrament of a friendly Power. A convention for that pur pose wilLbe:submitted to the Senate. I have thought ita proper subject to suggest for the ap proval of the Senate tb concur with the inter ested commercial pOwers, in en arrangement for,theliquickation of the Scheldt dues, in the . prinaffies which have' been 'heretofore &dep..' ted in regard to the imposts upon navigation in the waters of Denmark. The long-pcpding controversy between this Government dud' that' of Chili, touching the seizure at Selena in Peru, by Chilian officers, of a large amount of treasure belonging to oitizens of the United States, has been b ought ts7it'close, by the- award of His' hi. - praty , the Wing of the Belgians, to whose ar bitration the question was referred by the parties. The subject wag thoroughly and pa tiently examined by that justly respected magistrate, although the sum awarded, to the claimants may' not have been as large as they expected', there is no reason to distrust the wisdom of Ills Majesty's decision. That de cision was promptly complied with by Chili when intelligence in regard to it reached that country. The joint commission, under the aot of the last session, fur carrying into effect the convention with Peru on the subject of claims, has been organized at Lima, and is engaged in the business entrusted to it. The difficulties concerning inter-oceanic transit through Nicaragua are in course of amicable adjustment. In conformity with tho principles BJt forth iri my last annual message, I have received a representative from the United States Columbia, and have accredited a Minister to that republic. ON NATURAIZATION. Incidents occurring in the progress of our civ it war have forced upon 'my attention the uncertain state of the international question teaching the rights of foreigners in this coun try and citizens of the United Stites abroad. In regard to some Governments, these rights are at least partially defined by treaties. In no lizatance, however, is it expoessly'stipulated that, in the instance of civil war, a foreigner residingin this country, within the lines of insurgents, is to be exempted from the rule *which clasees him as a billigerent, in whose behalf the Government of his country cannot express any privileges or immunities distinct from that character. I regret to say, however, that such claims have been put forward, and in iMme instances in behalf of foreigners who have lived in the United States the greater part of their lives. There is reason to be fore that many persons, born in foreign corm- . tries, who have declared their intention to be= .come citizens, or who have been fully natural ized, have evaded the mlitary duty required of them by denying the' fact, and thereby throwing upon the Government the burden of proof. It has been found difficult or impracticable to obtain this proof from the want of guides to the proper sources of information. Those might be , supplied by requiring the clerks of courts, whore declarations of intentions may bo made or naturalization effected, to send, periodically, lists of the .names of parsons naturalised or of those declaring their inten tion to become citizens, to the. Secretary of the Interior, in whose department these names must be arranged and printed for general in formation.. There is also reason to . believe that foreigners frequently become citizens of the United States for the sole purpose of evading the duties imposed by the laws of their native country, to which, in becoming naturalised here, they at once repair, and, though never returning to the United bitates, they stilt claim the interposition of the Gov ernment as citizens. Many altercations and great prejudices have heretofore arisen out of this abuse. It is, therefore, submitted to your serious consideration. It might be ad visable to fix a limit: beyond which no citizen of the United States, residing abroad, may claim the interposition of 'his Government. The right of suffrage has often been assumed and exercised by aliens under pretences of naturalization, which they have disavowed when drafted into the militahy service. I submit the expediency of such amendment of the laws as will make the fact of voting an estoppel against any plea of exemption from military service, or other civil obligation, on grounds of alienage. The Naval force of the United States, con sists, at this time, of 588 yeasels, completed and in the course of completion`, and of "these, 75 are iron-clad steamers. The events of the war give an increased interest and im portance' to the Navy, which will probably ex tend beyond the war itself. The armored yes sale in our Navy,_completed and in service, or which are under contract and approaching 'completion, are believed to exceed-in number those of any other" Power ; but while they may be relied upon for harbor defense and sea-coast survey,others of greateratrongth and capacity will be necessary for cruising poses and to maintain our rightfulposition on the'riceati. - - - The change that has taken place in Dalai vessels and naval warfare, since the intro duction Of steam as a' motive power for ships of war, demands either corresponding change in some of our existing navy yards, or the establishment of new ones. f , r the construc tion and necessary repair of modern' war vessels. No inconsiderable embarass meet, delay and piblie injury have been experienced from- the • want of, such Government establishments. The necessity of such a navy yard -so fur nished at some suitable place upon the At lantic seaboard has,' on .repeated occasions, been brought to the attention of Congress by the Navy Department, and is again pre sented in the: report of the Secretary which accompanies, this communication.' T think jt my duty to iniite your special attention tb this subject, and also to that of establishing a yard and depot for naval purposes upon one of the western rivers... A naval force has, been created on these interior Waters;and under many disadvantages, within little more than two years, exceeding in numbers the whole naval force of the country at the commence ment of the present Administration. Satis factory and importantas has -been the per formances of the heroic men of the navy at thisveriod, they are scarcely more wonderful, than the services of our meolianics and erg . ; sans in the production eiNiai vessels,, wliieli haa created a new form of naval power. Our counlry has advantages superior toady other natidn, in our resources of iron and timber, with inexhaustible quantities of fuel in the immediate vicinity of both, and all available and in close proximity to navigable waters. The resources of the nation have been dovehni ed and' its power displayed in the oorietruction of a navy of such magnitude, which has, at the very period of its crcation,rcndered signal service to tho -Union • The increase of the number of seamen in the public service from 7,000 men in the spring of 1851, to about24,ooo at the present time, has been tuseriniPlished without speci'al legislation or extraordinary bounties to pro-. mote that increase. it 'hail been found, hoW= ever, that the operations of the draft, with high :bounties paid;, for army recruits is be ginning to effect injuriously the naval- ser vice and will, -if not corrected, be likely to* impair its efficiency by detaching seamen from their proper vocation_and indocing them, to enter the army. I thfsinfore respectfulty suggest that Congress might aid both the army and naval service, by adequate.provision on this subject which would at' the same time • THE TERRITORIES. be equitable to the communities more especi- TM; condition of the several organized ter- ally intended. ritories is generally, satisfactory, although I commend to your consideration the oug the Indian dieturbances in New Mexico have gestions of the Secretary of thr navy, in re not been entirely suppressed. The r minerni Bard to the policy- of fostering and training resources of Colorado, Nevada, Itlakto, New seamen for naval service. The naval aced- Mexico and A.risonS, are- proving far richer'eemy is rendering, signal service in preparing than heretofore uniferitoea t : I lay , before you midshipmen for highly responsible duties, a communication on this subject from the "which in after life they will be required to Governor of New Mexico. ' perform. In order that the country should not IMMIGRATION _ . be deprived of the proper quota of educated. I again BLbmte. to your considerittion the officers, for which legal provision has been espedienoy of .estahliehing ire at the School, the vacancies a system, for the . Naval encouragement of'immigration, although this caused by the neglect or omission to make source of nation al wealth is flowing with : nominations from the States in insurrection, . greater freedom than for several yeaVs before' have been filled by the Secretary of the navy.. the insorroetion occurred. . There is still a The sehool is new more full and complete deficiency of laborers in every field of irides.? that:llA any previous period, and in every, try, eseseirdly in agriculture, and in ou r respect entitled to the favorable oonsideration roiney, l :4 well of iron and Mal as of precious of U"gren* metair. While derealid for labor is thus in-'• 111111 POST MICE. creased here, tens octioprands.nf persons, During the, past fiscal year :the financial destitute of rentunqative occupations,are • condition of the Postoffice Department has thronging our foreikn"einisiriatem and offring been one of increasing prosperity, end lam to emigrate to the United States, if essential gratified in being able to state that the ac- JAPAN In common with other Western Powers our relations with Japan have been brought into serious jeopardy through the perverse oppo sition of the hereditary aristooracy of the empire to the enlightened and liberal policy of the Tycicion, designed-to bring the country into the society of nations. It is to be hopbd, although not with confidence, that these difft oulties may be peaoefully overcome. I ask your attention to the claims of the minister residing there for the dameges,he sustained in the destruction by fire of the residence of the legation at Yeddo. TELE: TELEGRAr : Satisfitotory arrangements hive been made with the emperor of Russia, which it is be lieved will result in effecting a continuous line of telegraph through that empire from our Pa cific eoaat. I recommend to your favorable consideration the subject of an international telegraph across the Atlantic Ocean, and also of a telegraph between this capital and the national forts along the Atlantic seaboard and the Gulf of Mexico. Such connections estab lished, with any reasonable outlay, would be economical as well as effective-aide:te .diplo made, military and naval rerriee. CONSULS Th 6 consular system of the United States under the enactments of the last Congress, begins to be self-sustaining, and there is rea son to hope that It may become entirely so with the increase of trade, which will ensue whenevet peace is restored. Onr ministers abroad have boon faithful in defending Amer ican rights. In ,protecting our commercial intorests our consuls have necesearify had . to encounter increased labors and reeponeibili ties growinitAq•dr.l,lo !pr.. Thm-irvi. have for till - bion . nar - OW/4 and *whizzed with seal and effialiiiay. acknowledg montjas tly includes those consuls who,residing in Iltiornizeo,,Egypt, China and other central oonntice"e, are charged with , extraordinary powers. but very cheap iesistahee gall , be alrovdci thein. It is easy to see that under the •shaip-dis °infirm of 'styli Ital thelnatide Is •begineing,en; . new life, and thig noble" effort 'ileicantli'tlie aid, and ought to Yeeeive' the attention and supPoit 'the Goiertiment. Injuries unfor seen.by the clovernment and unintended, may iu some cases have been inflicted upon :the subjects or citizens of foreign countries bo.th at sea and on land,' by persons in the :Service of the United States, and as this Government expects red ress from other powers when sim ilar injurio'sf aie.infliotald by personi Id! their service ,upon s eitixans of the United States, we mast be prepared to do justice to foreign ersa •If existing .judicial tribunals are Made quatelo this purpose, a special court may be authorized with - power to hear and decide such olaims of tile character referred to, as may have arisen under treaties and public Conven tioflefo - r Fiaiidtingo442tijoy: lour op*, . mission, hare been proforred to BOMB Poiern ments, but no drilnitlye &wittier to,thn 'OO6- sition has yet-been reeeived.from any.' • ' FISCAL CONCERNS. ; • - Tie operations of the Treasury during the last year have boon successfully- concluded. •The -enactment 'l4! liffingroilis o 6 aintional Banking Law-has proved' a valuable support 'of the public credit, and the ' , •eneral degisla 'don in relation to loans has fully answered the*eXpectaffOrtieorita faVorers;'sbinii:aistend4 meats may be required to' perfect existing in e ws, but. uo - phange . inthete principles or -generalacope is believed' id 'be needed. Sinop these measures have been in operation all de mands on the Treasury, including.- pay of the army and nays,,,ll►ye,been.protopyy,met, and fully satisfied: ;conisidereble !ita;d9 of troops, it is, believed, wore ever more amply' provisioned, moro liberally and punetqally paid', and, it may bo added; that by no people were the burdens incident -to a great war ever Moro cheerfully . borne. Tho receipts (Wring the .year from all , sour : . Gee, including loatis and the bdlance in the Treasury et its commetmernent,were $901,125,- 674 86; the aggregate , disburserdents,‘sB9s,- 796,630 65; leaving at ealanoe on the 7th of July, 1863, of $5,329,014:21. 'Of the receipts there were derived' frifin cu5t0m5,569,059,642. 40; from internal revenue, $.1,640,767 95; fromidirect taxe5,514,851,036:001; froth dands, $167,617 17 ; from raisooltaneous sources, $30,466,153005and from 10an5,776,682,361,57; making'the aggregate of $90,112,567;486.' Of the dlsbursments, there 'were $232;539-12; for pensions, etc.. $4,216,520 59; for Interest on public debt, $24,729,846 51; for War Depart; . moot, $599,299,600 83; for the Navy Depart ment, $6,321,105 27; for the payment of fund ed and temporary debt, $181,076,635 07, mak ing an aggregate of $895,766,630.55, and leaving a balance of $53,290,442.001 But the payment of the funded and tempo rary debt having-been — made from moneys bor rowed daring the year' must be regarded as merely nominal payments, and the moneys borrowed to make. them as merely nominal; receipts, and their amount, .$181,086;635 07 should therefore be deducted bOth from the receipts-and disbursements. This being done, Ahorkremains, as actual reteipts, - $1,14,769,995-: 58,4eaving the balanc e „se -readi stated: The actual recakipts,and disbiirsemed ts - for the first quartei, and the estimated receipts and disbursements for the remaining three quarteri of the current fiscal year of :1864,- will bo shown in detail by the report of theSeere tary of the Treasury, to' which I invite your attention. It is sufficient to say hero that it: is not believed that tho actual results will eX hibit a state of the finances, more formidable to the country, than the estimates ofthatofficer heretofore euStaitted ; while it is confidently oxpeete4 that at the close -of the' year, both disbursements and debts will be found very considerably less than hadimen anticipated. Tilt ARMY 'The report of tho Secretary of War is a public document of great interest. It coa ts ns First, The military operations of the year, detailed in the report of the General-in-. Chief. Second, The organization of colored persons in the war seryiee. Third, The ex (-hemp of prisoners is fully get forth in the letter of General Hitchcock. Fourth, Ope rations under tho act for enrolling and call ing out the national forces, detailed in tho report of the Provost Marshal General. Fifth, Tho organization of the invalid corps. Sixth, Tho operation of the several departments of the Quartermaster General.; Comutisary General; Paymaster Gondol; Chief ofEngi nears; Chief of Ordnance and Surgeon Gene ral. It has appeared 'irisPossible to Make a valuable summary of this report, except such as would be too extended for this place, and hence I content myself in referring your at tention to the report itself. TUE NAVY The'ditties4ev . olving on the . 'naval branch of the service during the yeax,lattd through-, out the whole of this unhappy contest, have boon discharged with fidelity and eminent success. Tho' extensive blookake has been constantly increasing inefficiency as the navy has expanded, yet on so long a lino it has so far'been impossible to entirely suppress illicit trade. From the returns received at• the Navy Department it appears that more than one thousand vessels have been captured since the. -blockade was _instituted, and that the valtte of the prizes already Bens in for adjudi cation amount to over thirteen million dol-• lars. : PRESIYTERIAN;_BANNEM 4 4WED VESD AY, DECEMBER 16,..:1863: that ievenuo igur:nearly equalled the entire exTlendituro • the latter amounting to $11,314,200.81, and the former to $11;163,- 180.59, leaving a deficiency of but $160,414.15: In 1860, the year immediately•preceding the rebellion, the deficiency amounted to 4.566,- 670,640, the postal receipts of that year being $264,672,219 loss than those of 1018. Thende crease •since 1860 In the annual amount of transportation h 133 boon only„ about twenty five per cent:, but the annual expendi r tiitos, on account of the saint ilne:•bioni•roduced thirty-live per cent. It is inanifes . t, therefore, that the restoilico Department may become self-eustaining iii 3. few years, oven with.the restoration of the whole service.. !.. leOltraQN, rtlsrauh. Tho in tornatle.nalOon retinue of petite' dele gates trent thb' principal countries of :Europe nod America, which vnin•oullett at the slogged tion of the Postintieter Ueneral, utet at on the l flit of May last, end conoluded its do liberatione on the Bth of Juno. The panel ples,,estaldistien by the rOtlftilrenritl, as best adapted to'faellitate postnlinterpourse between notions, and as the basis of futnre conventions to inaugurate it gene' ol nykain of unittfrin international charges at reduced rites of post age, cannot fall ,to,prodnco !?ortefieled moults. Pt3TaittMittrt Oil Tliel imfißiu9a. . . , I refer you to tho report'Cit' the Seeretary•of the Interior, which is herewith laid before , you, fur the 4140 And,yaried information : relation to public lands, Indian affairs, p e ,t,- close, pensions , "at d'"‘eilier" inattlir Of pitbl to' • concern pertairiklitelthis.Department.! Thn qunntity of hands disposed of during ; the, last three garters of the last fiscal par, and the fine quarter (of -the-praiiiiit decal year, was. ithree Million tight numired and forty-ono thousaid itna' five . huin'died and forty-nine ailresoofolthicte-one bundrod sad: sixty-one thonsand.nine; bundred and.eleyen, acres wore sold for iiaidi; Oneuiftlia," four 'ban dred and fifti,efiff thblisited fiviniundrid t alid fourteen acres ware,talkon up:lender the home- , fitted law ; add the midne.dippesed of under, hoes granting hindi'fOr'military bounties2fer railroads, and otherpttiliosee:•% It aloof &integre • that the sale of the...1)044x lands is largely on the.'increase. It has long,been a cherished opinion of some elf 'ilineviiseallibitesmen; that the people of :thevUnited.Sfiateir laid. a'. higher and more endnring . ..interept,ln. the,early jet r , ttement and substantial miltivattia oC the w-. lie lands, than itiAlie w ititiount f ot diticet, • rdiz.' once to be derixedArOui rthe.fsale .of-thezzi. This opinion haslet( a .oentrnllingin l Feltepz O shaping legislatio4 upon - itif BRN. of', our national domain: riney'elteaffab instifnee'tiV this the litterainfeesures-adosteglinreferepoe, to actual settlers the gent to. the States. of, the overflowed lands , untbiiilliaiiifnlits;' order _to their being and.'rendered fit for cultivation.; . the . grant , to, railroad .ixomn ponies of alternaeinittiorm of land upon , the contemplated iines' Of their i'Ciad, which; iiheii' completed, will Jargelrmitltiply the. facilities gf 'our distant,: possessions.. . This policy tieSi'received its MostOignal and bane: , ficient.illustration in recent enactment, grant 'ingliOmesteads to actual settlers.- Since theist 'day' of January last,. the before mentioned .of-odor one million four hundred and : tfiiiiisardrennviroutired'arnT fourteen -.acres of land; has, been taken •np under its provisions. Thii fact; and the ailment of Bales; furnish gratifying , evidence of the increasing settlement upon the public' hands. Notwith 'standing the great struggle in which the en ergies of the nation have been engaged, and • which has required so largo a withdrawal of our citizens from their accustomed piranha, _I. cordially concur in the recommendation of the Secretary cif the Interior suggesting a modi lioatiou of the act in favor of those engaged in the military and naval. service of the United Stites. I doubt not that as wilt oheerfally'adOpt such measures as will with out essentially changing the general features , of the system; secure to:the ;greatest practica blo extent its benefits to those who bave.left .their homes in defense of the country in this arduous Oriels : s ; !' 11; AIINSSAL LANDS. • I'iniritci your 'attentiOn ' ' in the *laws of tho Secretary of War as to the propriety or raid= - ing, by appropriate legislation, a revenue from the, mineral lands of the United States. THE INDIAN TRIBES.. The measures provided at your last session for the removal of certain Indian tribes have been carried into effect., Sundry treaties have been negotiated, which will, in due time; be sub mitted for the constitutional action of the •i Senate. They contain stipulations for ex tinguishing' the possessors ' rights of the In dians to large and valuable tracts of land. - -It is probable that the effects of these treaties will result in the establiihment of perina - nent friendly relations with swat of those tribes as have been brought into frequent and rjbloody collisions with our outlying settle . monis and emigrants. Sound policy and our . imperative. duty to those wards of govern ment,.deinand our .anxious .and constant at tention to their material well being, to their • • progress in the arts of civilization, and, above , all, to that moral training which,' under the blessing of Divine Providence; will confer upon' ttem the elevated and sanctifying influence . of the hopes and consolations of the Christian faith. I suggested in my last annual message the propriety of remodeling • our Indian system. Subsequent events have satisfied me of its necessity. The details Bet forth in the :re port of the Secretary, well evince the urgent need for immediate legislative action. commend the beneroienee • of the institu tions established or patronized by: the Gov-' eminent in this district, to your generous and fostering care. INTRItgiL IMPROVEMENTS The attention of Congress, during the last. sesaionoras engaged to some extent with a proposition for enlarging the water commu nication between the Alissiasippi river and the Northeastern seaboard, which proposi tion, however, failed for the time. Since then, mon .a call of the greatest respectability, eziiriventio'n has been held at Chicago., upon the same subject, a summary of whose views is contained in a memorial addressed to the President and Congress,'and which I now have the honor to lay before you. That this interest is one which ere long will force its own waytl do not entertain a doubt, while it is • submitted entirely to your wisdom as to whit can bo demo now. Augmented/interest is given to this -subject .by .the actual Mini= moncement of work upon the Pacific Railroad, Under auspices su • favorable -to its rapid progress and completion. ...Enlarged navigation becomes a palpatife -.need to. this great road. • _ AGRICULTURE I transmit the second annual report of :the. Commissioner of the depa:tment of Agricul ture, asking your attention to the develop ments in that vital interest of-the.nation. • A CHANGg. When Congress assembled% year ago, the .war had already lasted nearly twenty months, and there was many conflicts on both land 'and sea with varying resttlts. The rebellion had-been pressed back into reduced limitspyet, thayne of public feeling and opinion at llama , and abroad was not satisfactory.'.-With the" other. signs, the popular elections , then..just past, indicated 'uneasiness amoileortrielves,-sihile amid, much that was cold and menacing, the kindest worth coming from . Europe, Were . 'uteeld in accents of pity that we 'were too Mind to ,surreader a' hopeless; cause. Our commerce was suffering great • .ly. by .a few armed vessels, built • upon and furnished from foreign shores,. and ,we, were threatened with eibii*lditiona , froilf th'et same quarter as 'would sweep our trade from the sea, and raise our blockade. We;lirid AMA: to elicit from European governments anything hopeful upon this subject. A greatand favor able change had occurred. t. . ~14 t rmaskaPaiiiotlC , ' •-• . 4 6 Then the ; Proolamation, *hich had' heen issued in September, was running its assigned period to the beginning of the new year. A month later the. anal proclamation came, in cluding the announcement that colored men of shitable condition would be received into the war service. The policy of emancipation and of the employment of black soldiers gay, to the futtire a. now aspect, about which hops, and fear and doubt contended in uncertain' conflict. According to our political systeni,. as a matter of civil administration, the Gen eral Government'hed nd lawful power to itf;* fact emancipation in any State, and for a long time it had been hoped that the rebellion could be supprruted without,resorting co it as a mil itary measure. It was all the while deemed, possible that the neeessity_for it , ,s ht oome,. and that if it should, -the criiiiti,of the contest! would then be presented. It came, and, as was intended, it was followed , by dark and doubtful days. Eleien months having been passed, we are permitted to take another re view. The rebel herders sirepressed Still fet ther back, and, by the complete opening of the Mississippi river, the country, dominated over by the rebellion brdiiided liito distinct parts, with no practical communication between them Tennessee and Arkanssa,have been so enbstan tinily cleared of insurgents' control and in fluence, and 'the citizens in each, owne of slaves and advocates of slavery at the te ginning of therebellion, now declare openly for esbancipation, in their respective States. Of those States not included in the emancipa tion proclamation, Maryland and Missouri, neither of which years ago would tolerate any restraint upon the extension of slavery into their territories, only dieptde now as to the best mode , of removing it from within their oww 'Of those who were slaves at the beginning . llf tile rebellion, fully one hundred thousand aro now in the United• States Military service, ftbout one-half.° f which number actually bear arms in the radia; thus giving the double ad vantage of taking so much labor 'from the in surgent cause andsupplying the places which otherwise must be filled with so many white men. So far as tested it is difficult to say that they are not as goed - soldiers as any. No ear vile insurrection or tendency to violence or cruely; has marked the measures of eusanoi pation anti arming the blacks. ‘ These meas ures have been much' 'discussed in foreign o,untries; and contemporary with.auch discus sion, the tonkof publiceentiment there is much improved. At horde, the same measures have been ceillyAseusscd, suppoited; Criticised and denounced, rind the annual elections following are highly en'eollitiging to those whoeo special ditty it is to boar the conntry through this gruat trial. Thus we have , the reckoning; the crisis :Which threatened to divide the the Monde of the Union is past. •• • • t!tutodrt;i:uOriorr. • Looking u„ow„tu the 'preishnt 'and future, and with ro (bronco to a 'resumption 3+(stpho.national • authority' AMA the SYleloyherein that au- p thority has bohn-sitipen'ded; have thtught. fit co rit3BUI3. a proebimatilligiblifopY• of " Which is herewith tr'aussmittOd.,-. 9„siniamlnationaf !hiss ; priselainatifin, it appear s ao is ,believed, amply ; justified ..by the - iddhatitutiois:' True the form of an oath :talrived,-but asivatan +is 'coerced to tiike'it. A•mantie only promised & ;pardon in calih he voltintaipy bikes the oath. ~Tbe Constitution aUtliorizes •the Pixeoutive lo grant it on ier fujip'e'stablished iiy ' judicial &sad solliceauthe ri ties • .It •80 70rat- p • p s fe,xod: that. lf,,,ifl.anj of the Stakpii named, gov ernments shoui'd bo esseablish3d in the pre .scritied Mode, Sus% government shall bo moor and,,guarantead , by the `United "States] sad that under it the State shall;on subseriba, • fna - to thos 'CifiiVtltutio nal conditions, be„pror . tooted against, in,vailon,ang domeatiq violence. The ponstitutienar oblightiolf or this 'United Stales to plarititai 'to ihVory%Stath 'lnT:the trAirrnla Vepublieinibrnsiofolverpment,and;tq ..protect,thoStato,fnitjo,, ease as stated, 13. e- , plipit and full, but t wlit!in i tlei the'benetlfs of this provieldia oil:Tito/a State.. - Glovcvnineat act up in this partihular yvay l , litsfishiseutien• of ,the Constitution ,ccuterisplatel a ease Irtivrein the element 'Within a.Stat9 Aliqpiov'eVirnentYn 'theAtnion xassylpe tiro lee , .! blolor. an .opposite' sp hostile .eleinent, ex ; vernal and even are precisely pie (iambi; with •vihi6h , srti. tear w s sitialing.". An atiegsa) ti to ,guaraysty l and,„prq , teat in,a, revised. I, state ~of 69Ternment ,strueteA in , whole, Or in" Witeliondeilitlria 'bare' front the'vgi7l3lbiiiiint egai„hotiw,hosellostility, and '-violechielt'•isi:i„ko,-p,tpteotm is, simply,. absupt., ,Th?Es t ,inust be a feet *Bich to . separate oppgoaln . g.eliiiientirso'nbilmylnittd•on- , ly fOilninelsorind; and that:to:4o3A; snacient , . sand liberal:onas which- isseepto,p,4.3oap,d, who-, aver Avilk,usalte as redan Cation ''Of hi l s • former" nboin`dness. • • . 4 -1-••••! • • • ••• • - Bit if it to ,reqnira a test °La i d- ,' mission to the..politioal ; litify, an oath of alte r an ee, to the gon (Ala Mille& St at'S and'bi the Union-andel' it,:*hpaot alsolethe. laws and Proelaniation in regard,toslayery i .. "ThoseJams.aryieltrochunations ware enacted and put forth forAlio purpose of aiding in the 'stipprmislitnrollt,h§ :rebellion. To give them th the fullest eitect ere - hild-to be a' plbdge for. their ',Eattintenanc'e: - my judgment they hive aided and further , aid' tho'kausis for, which they were, enlisted'. ,To givo• principle would be not only to relinquish a lever,of povv.ar t .hnt would also bee cruel and • astonnding - briiqh of faith. • • • • • ••• I may add, at this pollut e that .while;:i re:. • Main in my present position, shall-pof, at. ; tempt to retract or' moat/itthe Eman cipation Tree/emotion, no r .9:aturn io ehroerii any pereoti tdhci"l plods free by •therterase. of the Proclamation, or by any pfr" Cep .firese;': For _these • find other ... rem:one it' is - thought best that tlie'snppert of •tliesstoit. tions shall bo inolude_d in : the, oath, and.itds: believed thetExpentive may lawftillyclaitn,it in'ietnrn = fez pardon 'and `restoration'-of felted rights,which'he has clear cOnstilattim6:4 alpoder to withhold altogether, or to,greistk upoithe terms which he shall deem ITisest, f?r . the public interest. ' ' • •••• It. shout I be observed., also, that this part of tho'oath is 'subject to tha modifying .and a. 1 17 rogating power' of: legislation and Supre me* Judicial decision.,, vrti proposed acquies cence of the National •Eitsoutive, in•Anyghon-' orablo temporary ,State arrangement for the freedyeople;li made with tho view of possi bly modifying thoaortfusion•and. dittfeesing destitution which . Must, at best, attend all classes by a total revolution of lahor through out the whole' States. 'lt is hoped 'dull' the already deeply' afflicted people in.ttrose States may be , somewhat more ready to.give up the cause of their affliction; and to—this extent this vital matter is left to thenisetves; while' no power of the 'National Executive 'to pre vent an abuse is abridged by this preposition.. TEE FLAN OF RE-CONSTRUCTION. . . . The suggestion, in the proclamation as to maintaining the political frame Work of the States, on what is called re-construction, is* made in the. hope that it,may do good with out harm. ' It will' faVor lifitir and avoid great confusion. Bat why any 'Proclamation now upon this subject? This.question is beset with the eon d tba.t, the step might be de layed too icing or:betaken too soon, In some States elementafo7resuniptionhaire been.re ad y ;or action,' but remain inactive apparently fur want, of's" point, or plan of action:, Why shalt A . adupt, the'plait of B, rather than .3 that of A? and 'if A. and B: should agree, how can they know but that tho general gov ernment hero will respect their plan? the proclamation, a plan is presented which may be accepted by them 'as a rallying point, and which they are assured in advance, will not be rejected here. • This may bring thorn to act sooner than they otherwise.woutd. • Tho objection to a premature „presentation of a plan by the National Executive, consists in the danger of commitments in points which' could be more safely left to further develop ments. Care has been . taken to so shape the document as to avoid' emb'arrasainent from .this source.. In "saying that on certain terms, certain classes will' be pardoned with. their rights, restored, it is, not said that other classes on other terms, will 'never be included. In saying that a reconstrnotion will be accept ed if presented in :a specified way, it is not said that it will never bo accepted in any other way. The, movements by . State .action. for emancipation inlieVeral of the States not in cluded in the emancipation proclamation, are matters of profound gratulation; and while I do not repeat in detail what I haveleretofove so earnestly urged upon this subject; my gen eral views and feelings remain unchanged, and I trust that Congress will oinitino fair op poitunity of aiding these -important steps .to to :great consummation. THE. WAR rowns=ous RHErTAHON 'ln 'the midst of other cares, however im portant, we must not lose sight of , the_ fact that the war power is still our Main reliance. To that power alone can. We look, yet for a' time, to : give confidence to the people in con tested regions that the insurgent power will not again overrun 'them. Until' that contlils deice shall be established little can: bo 'done . any w,hfre, for what is called reconstruction. „Mike oat chiefest care must still be directed to our army and navywhe have, thee far borne their harder part so nobly and well., and it May be esteemed forttiniite'the.Ciif - gfiriiig•the . greatest efficiencv,to these' indispensable - arms "weldd !ash lacinoishly,eneourogozallant men, from commander to sentinel,,,who composts them and to whom more thith to others the 7w3)l . ;ldlntukt♦stand indebted , for the home of &tam 'dfsenthralled, regenerated, enlarged ; and perpetuated. 1 ABRiliAlf Lisicor.x. December 8, 1863. Proclamation Accompanying the Mee. IlTheefolloWilig proclamation is appended to 'toil 'ilfiliiielsTizooLAxiirott.—Whereis, In -and by the Constitution of the United States; It is provided that the President. shall have • power to grant reprieves and pardons for offenses agaitst the , United 'States, except in cases of impeachment; and Whereas, a.rebel lion now exists .whereby the loyal people and goyernments;qf shveral States hairs for along time been subverted, and man'y poisons have committed and ate now ,guilty of treason. against thet United States. eirid.Wheress,, :with reference to said ' rebellion and treason,. laws have been enacted.by. Congress' dealer let ibe • foisteitare and confiscation of property,, end liberation of slaves, all upon terms and conditions therein stated; and also dediering that the . Pieeideiii•visie thereby authorized', at • anitlikie...,therenftir;.: by proclamation, to ex, tend to persons ihnifie.y have participated( in' thereilstjiiiiinlielllciii—in. any 'State- or part thermif—pardon and ainnest.y„with, such ex-. ceptiens, and.at such terms and on such con ditione ' is he • may deem 'expedient for the welfare.,. rA.rid-Whercas;the congressional declaration of ,limited and conditional pardon accords with. welt established expositions 'of' the-Pardoning POwer .and, Whereas with :re ference to said rebel lion-the President of the United States has. issued several proclama tions, with - provisions in regiird to the littera , : tion.of slaves, and Whereas, it is now desired by sense persons heretofore engaged in said • rebellion to resume ' their allegiance a tho United States, and re-inan'eurate loyal State governments within and-for their respective. States; . Therefore I, Abraham' Lincoln, President of tlieViiffill State's, do proclaim. ' deolare and, make'kiihnif to'all_ persons who .have . directly,; by implication, participated in the existing , rebellion, except as hereinafter excepted, that` a full pardon Is granted to them and eaoh of them, with restoration of all fights,, and proporty, except as to slaves, and property in cases where the right Of third' parties shall have intervened, and upon the/ condition that every such person shall take and subscribe an oath, and thenceforward keep and maintain said oath inviolate, and which oath shall be registered forpermanent preiervatiori, and shall be of the tenor 'and effect following, to wit: " J do solemnly swear, in presence of Al mighty God, that I will henceforth faithfully support, protect and defend-.the Constitution of the United States, and the Union of States hereunder, and that 'I will, in like manner, abide by and faithfully support. all acts of Congress passed during the existing rebellion with.referencelto slaves, so long and so far as -not repealed, modified.or held void by Con gress or by a dechiihn of Cetirt, and that I will, in like manner, abide by and faithfully support all s proolamations of. the President, made dewing the existing rebellion, having referenc'e to :attires, so long and so far as not modified or deck:red void by a decision of the Supreme Court. ,So help me God." . The persons excepted from the benefits of the foregoing protisidni; are all who are or 4 shall have been civil or diplomatic officers or Agents of the 80-called Confederate Govern. 7 "meat; all who have leftjadicial stations un der thoUnited-States Congress to aid in the retkeltioa; , all who „resigned their, commis ,sions in the army and, navy of the United attiteennd afterwards sided the rebellion, and Idl'whti have erigaged'in any way in treating MIOSed persons or white person's charge of aneli,„,ctherivise than lawfully as prisoners of . 4ar';and which 'persons may have been found in the United States service as soldiers, sea men, or in any other capacity. And: do. further proclaim, declare and make known, ,that whenever in any of the States of Arkansan,-Texas, Loai,iasa, Missis sippi, Tennessee, Alisbam% Georgia, Florida, Sguth Carolinti'an'd - North Carolina, a ; number Of personsp. not less ,than"oneLtenth. of the ,nutriber.of.the voteneast in such state at the *Pre.sidentiaf election of the year of our Lord '1860; eitchliaririg-'takeir the oath ,aforeenid; •andnot,having'since violated it, and being k gnalifled. voter by, .the , election laws of the State; ' existin g immediately before the. so •.aist Of seciation , and...exclacting,nl others,,,ehall. , re-establish a State Govern ,ment, whichh - 401CD be Ilopubliean, and in,,no, wise , cenitraVen'ing' said oath.—suchhltall (ie . recognised as the ' true government of the 4,te,,and the S tate shall receive , thereunder the benefits of the Cdrustitutional , provision "which' declares that the triiitod guarantee to every State •iq the Union are , publican form of government, and shall pro ' baell'of them against invasion, and on tapplioation of the Legislature, or the Bacon.., tiya when the legialslainre cannot - be' con vened, egainit domestic violence. -. " 'And • I do further proclaire, declare and' *make known,' that any ,provision which. may be adopted by, Such State Government in re latioirto the freed pensple 'of such State; which 'shall' recognize' and declare their permanent .freedom and provide for their .education, and which may yet he consistent, as a temporary arrangemenT,Aih`their present oondition as a laboring, landless and homeless eines, Will net -be objected to by the National Exeontive. • 1 Anditis suggested as not improper that, in reconstructing a loyal State governMentinini ',State, .the , name, -the boundary; the slibdivi- Vision, the ofistitution, and the Federal code of laws„ns before the rebellion, in maintained, subjeet only' to modifications medineeessary , by -the' 'conditions' hereinbefore etated, and, such,others,if.any, not contravening said eon ditiona,,which may be deemed expedient by tinted training the new State government. T6'avoid misunderstanding itmeille pr oper to' slay thatthis proclamation ' ,so:fax,as-itre-• Wee to State governments, has no reference tai `Slate:is' wherein loyal State governments lhave all the while been Maintained. And for the sam e ; . reason Ronny be proper to further 'say tha t Whether members sent td . Congress from any State shall ( be admitted to seats, constitutionally rests exclusively with the re spective' Bowies, and, not to any extent with 'the Executive. And 'still further, that this proClamation is' intended to present .to 'the ,people of the, States ;wherein they national authority has been suspended and loyal State governments have heen i subverted, a mode by. which the national authority over every loyal State govern men t may b e re-es tab lisheetwithin said State.% or any of them: And While the mode presented is the &St the•Exectitive can suggest with his present impressions, it must not beunderstood that another possible mode Would not be acceptable. 'Given under my hand; at the 'city of Wash ington, 'the eighth day; of December, one tb onsandi eight huqdred and sixty-three,, add of the Independence of the United States. of America the eighty-eighth. ARRLITAII LINCOLN. By tbo Prosident: Wu. EL SzwAso,'Secretary of State Report of the Secretary of the Treasury. In submtting to the consideration of Congress the report on the state of the finan cos, required of liiin by law at the, ccm mencement of - each see the Secretary of the Treasury his .ntnch satisfaction in being able to say, in geheral, that the op erations of the department entrusted to his charge have been attendd, during the last Moat year, by a greater measure of success than he ventured to anticipate at its begin ning. REVIEW OF LAST mscar. YEAR. At 'ho beginning of .that year all de mands on the treasury had indeed 'been diScharged, and there remained a balance to the credit or thfrareastirer of . $13,048,- 540 81.: But the large disbursemects, con stantly demanded by rziilitary and naval operations, reduced, ,by comparison, this seemingly considerable balance to almost inconsiderable proportiops, and the prac tioal operations of the restrictive. pro Vi sions of the acts authorizing the negotia tion of the bonds known as five-twenties, the most important loafi acts not already fully availed of, made new negotiations for adequate amounts and on admissable terms quitelmpractible. The reverses which be fel our arms in June ; 3 uly, and August, in creased the diffioulties of the situation, so that, though. the Seeratary was enabled ender existing logislation to providilarge ly for the increasing disbursements,. there remained necessarily unpaid, on the first day' of the last'session of . Congress, requisi tions,oa the treasury, chiefly.from the War and Navy Departments, amounting in the aggregate to the sum of $16,g04;875 80. To proiide for theSe requisitions and for current demands, - Corigresa, bn-the.l7th of January, 1883, authorized :an'- additional issue of United States no'tes to the amount of one hundred millions of dokicars,;_lm..t.didnet. reach any definite conclusions in regard to loans in time toenibody them in an act be fore the day . 032 which the session closed. " " On thy, day, March, 3, 1863, the act . provide ways and Means for the support of the government, received the approval of the President,. and bet:mint law. • In addi tion to various provisions for loans, it Con tained ,clauses repealing the' restrictions affecting the negotiation of the five-twen ties, and thus disengtiged - That in:Torten- Joan from the embarrassments which had previously rendered it almost unavailable. A week earlier, on the 25th' of February, an act, even more important to the Credit, of the government—the act to provide a 'national currency through a national bank ing system--,had• received the ,sanctiou of Congress and,,the President. The salutary effects of these two great acts were. sow • conspicuous. Notwithstanding the aid saintliest* the additional issue of the United States notes, under the joint resolution of lannitiy, the Searetary had !Mnd:it impossible to pre 'vent a gradual increase, during the session of Congress, in the "timeunt of unpaid re quisitions. Those which were unsatisfied at the beginning of, the session were indeed discharged, and large sums were applied to new ' demands for current disbursements. Bat the aggregate of'd isbursements;reinai n •intneoessarily unpaid, increased steadily, notwithstanding all efforts to prevent - it, until it reached, at the'close of the session, the slim of $72,171,189 41.' The loan act. and the national banking act were followed by an immediate revival of public credit. Success quite beyond an ticipation crowned the efforts pf the Secre tary to distribute the five-twenty lolin iii all parts of the country; as well as every; other measure adopted by him for replen ishing the treasury. The result was that within two months after the adjeurnroent of Congress the whole mass of snspended requitiitions had been satisfied; all current demands promptly met, and full provision made, for the pay of the army and navy. During the remainder of the fiscal year no embarrasenients attended the administration of the finances except those which are in- separable from vast expenditures. Not withstanding these expenditures it is grat- ifying to be able to state • that during - the last year the total of disbursements did not greatly exceed, while the increase of the public debt did not equal,the estimates sub mitted to Congress by the Secretary at the last session. Thus, while it was then estima ted that the public debt on the 80th of June, 1863, would reach the sum of $1,122,297,- 403 24, its actual amount on that day was $1,098,798,181 87; and while the disburse.. merits for the year were estimated at $693,- 346;821 48, the real total' was $714,709,- 995 58. The Whole•of the receipts and disburse ments for the last fiscal year may be more easily understood from a somewhat more formal statement. . . • The receipts, estimated and actual, then; for the last fiscal year, ending on the 80th ;of June, 1863, were, including balancefrom the prer:eding year, as follows: Estimated.. Actual. 80,011,736 59 869,069,642 40 88,724 16 167,617 17 From Custom' From lauds From miecelltimiouß.... 2,244,316 32 3,0314615 35 From direct tax 11,920,717 90 *1,485;103 61 From Mternalrevenuo. 86,456,303 73 37,640,787 96 Bale.ucelromlaist year.. 13,013;546 81 43003,616,81 • Total receipts from all • , -• • • ordinary sources ' 180,405,345 GO 124,443,313 29 The disbursement.i L estimated and netnal, were.as followe: • . . . . . • - Estlinated. Actual. Ttia.Ctrit Bervke $32,814643 23 t)23,253,022 08 Penalona and•lndiana. 5,982,006 43: 4,216,620 72 War Departtuont ..... 747 1 359,828 08. 509,208,130 k (03, Navy Dapar . tmint.... - 1.: 82377,510 77 63,211;100 27 Interest on dObt .... 25,014,532 07 24,720,840.61 . T,otalgrot4.l estimate. 890413,321 48 714,709,988 68 'Fro the . actual expenditures, .$714,709,- 996 68,-there must, be.deducted the actual'. receipts, $124,443,813.29, in order to.phow the amount defived' from loans, $590,266,- 682 29, which stn; added to the amount of the debt on the Ist ',Tilly, 1862, . $508,626,- 499 08,, r (heretofore erioneously. . stated at $514,211,371 92,) gives as the ;true amount of debt on the Ist Ju1y,.1863, :$1,008,793,- 181 87. • . RErracArss iro's 1864 r :"-The'estimates fortbiPturreutt toMl'jrcitir 1864 next claim a ttention . Thesis- are foilisdeil &stual:receipts and disburse ments for 'the hist Ifdarter, which ended September 80, 1863, and on opinions for Med upon probable evets and conditions' as to titiartkrs. • ; -; . , . The following statement exhibits what.is aotually,known and what,•aftar careful re flection,: the Secretary thinks: himself war ranted in regarding as probable: - • - For the first quarter, ending September 30,1863, the actual, receipts were: , From '022,552,0 12 42 From internal revenue. 17,59D,713 From lauds 126,182 00 From mlattere eonrceg.: 041,542 04 Total actual reccipta for •. Drat quarter .. 4939,40 14 To which' add balance • Ju1y1,1863 • • • 5529,044 21 1 • • • Making total receipts of first quartet, except loans • • $46,268,500 31 ' For thinovemainingquartere,:end- . ing on the month of ,June, 1864, it is estimated there will ho received : • • From customs 550,000,000 05 Frau internal revenue D 0,000,009 OD .-., - From lands . ' - '.. , '3OO OW 00' . . From miscollineene sources -'' , ' 5,000,000 05. .: • ; 115 ) 305,000 0? Making a total of receipts from ordi:. . ; , nary sources, actual and estlinated, and including nalance, of ' $ 161568,600:35: To which add the actual and estima- . . . Led receipts front loans. ' 594.;000,000'00 . . Making a total of attant and estlmaz ted receipti'frow alt BOILTVIS ..j-v • • 1864 •• • ei•e:«;•*ii. $ 765,688,500'35 The expenditures may be stated as follows: . For the:flest quarter, ending September. 30, IL.' the actual disbursements have been : ' .• . For the Civil Pervice.:.s 7,216,939 31 For Pensions and In- • ' • diens 1,711,271 95 .. For War Department.. 144,387,473 97. For Navy Department 18,911,613 139! For • interest on Pnblic • Debt 4,283,628;87 Actual expenditure for first quarter-6176,110,032 46 For tho reniaining throe qoarteri ' • the estimates, foundedon appropria•-• tions ivad estimated • ficiencies, aro' '. • as follows: For the Civil Service... 6 27,050,872 21 .. . . . . For Pensions and In- , - - . • For 6,129,042 SO - ..• • • War Department:74l,oo2,o37 It • For Navy Departtoont 94,407,567 74 For interest: oh public .. • debt ' • • 64,881,508 01 -....:1•.:.• et 4.4' . 1 .' Making a total aggregate of actual • • - and estimated expenditures - of $1,099,731,960 42 But as these estimates include all un expended balances of appropria tiona.from former years, they aro: necessarily much tot) large, and there may be safely deducted from , their aggregate, as likely to remain unexpended at the close of UNA'. • cal year, the sum of 11150,000;b00 Of Leaving the total actual expenditure for 1804 • 1749,731,980 42 The tot's of expenditures being deduct" ed from the totalof receipts, Were : • . will be an estimated balance on the 30th of Juuo 1804, of $5,836,539 93 MINIM Lem this statement it .appeaza that • ' the total receipts required for the. 'probable diebtireamortta of the year and Including estimated balance at • its close, will amount to • $755,568,500 35 Of which there have been provided and applied during 'the first quar ter 176,110,93? 48 Leaving to bo provided $579,457,567 al Or which it is estimated thare will be received from ordinary sources dur ing the three other quarter 5.......... 115,300,000 00 Leaving yet tb be proVided by loans 5464,167,567 SO The amount of debt created during the quarter is ascertained by deducting from the total expenditures $176,110,982.46,, the aggregate of ordinary : receipts And balance from last year, amounting . together to $16,- 268,500 35, which gives as the increase of debt $129,842,432 To this sum, if there be added the suin 'Yet to be provided by loans,' $464,157,667 89; the 'result will be $594,000,000, froth which if , there be de ducted the estimated balance on the first of July, 1864, $5,836,589 93, the remainder will be $588;163,460 07, and will represent the total increase, on the basis of these es timates, of public debt during the year. The debt on the lstotJuly, isoa, was $l,- 098,793,181 37 ; to which if this estimated : increase be added the total debt on the first of July, 1864, will be $1,686,956,641 44, in stead of $1,744,685,586 80, as estimated in the report of last Dew:abet. • In addition to the estimates for the cur rent, year just stated, the, Secretary is re quired* submit estimates of the receipts and 'expenditures of the neit fiscal year. 'Thet - 14!'""t unEertain, must, in the present condition of the country, be even 'lciss, reliable then usual. `estimates the probable receipts, as follows: .• , • Estimated balance, July 1, 1864. $5,835,535.93 From customs - ....• TO 000,000.00 •••r•••••• , From, internal revenue ... m 4.,... ,000,000.00 ' From lauds ' ' ' • • •.'.:.% ' •.»..1.254,000;000M From miscellaneous e0urce,,,, T . : ".......... 5,000,000.00 Making estingtted aggregate r0c0ipt5..1)20f1,8:16,539.93 And he estimates the expenditures 'AB followi: • . . Estimated balance of former appropri ations unexpended, July 1, 1864 8650,000,000.00 For thieivil service • 27,973,194:81 For Pensioni and.lndians 9,631,30413 For the \Var Department'. 636,204,127.77 For the Navy Departmeut 142,618,785.40 For interest on public 4pbt ..... 85,387,677:15 Making the aggregate of estimated.ex penditurce " "81,182,815,088.88 But he 'eittiiiiittee tug likely to roman indrawn on the 30th June,lBos, and therefore to be deducted from thie . . aggregate 400.000,000.000 Making the real estimate of exptiiidi'- turm for the year ' • $761,815,088.86 From which deduct estimated receipts - from ordinary aounces,as before stated 200,830,539.03 Leaving to he piovided by lOane .$544,978,548.93 " The sun4to: be provided by loans repro- Bente the increase of debt during ; the, year. Assuming,lherefore, the correctness of the estimate which puts the debt. on' the Ist of July, - 1864, at $1,686,950,041.44; it' will re sult from these estimates that the 'whole debt will have reached on the. Both of June, 1866, the sum of $2,281,935,180.37. The Commissioner - Of• Internal Revenue recommends an increase of the tax on bank note circulation to two and two-fifths per, Cent.; an imams, of the duty on distilled spirits' to sixty cents per gallon; an increase of the duty on tobacco to twenty cents per .pound on leaf, and from five to twelve cents, according to quality, on manufactured; a duty,of ten cents per gallon on erode pe trOleum; a duty of two cents per, pound on cotton; the repeal of :the tobacco and petro leum drawbacks; and 'various other changes of the internal revenue laws, designed to augthent the rectipts from this•sonree..*ln' the particular' recommendations just men.: tioned the Secretary fully concurs, and commends all his suggestions to careful at MIMfeM 2 .flaa e tfnent of such la - W" will secure- an . increase of the in v teMl reteritte to the amountoriiinally estimated, of one hundred and fifty millions a year, is required by the strongest considerations of public policy LOANS. lll,therto the expenses of the war have been defrayed by toxins to 'an extent which nothing 'but the' expectation of 'its speedy termination could fully warrant. TEE . N . ATIOAL DEBT—OBJECTS KEPT IN viaw IN CREATING - In the creation of debt, by negotiation of loans or otherwise, the Secretary has' kept four objects steadily in view; (1) moderate. interest; general distribution; (3) futtire controllability; and (4):incidentaltitility. • I.—Towards the accomplishment of the, first object, the nearest approach that i3eims, possible luis been mede.:„ The earliest ne gotiation* were at,,,the highest t:ates of in terest: for it is a distinguishing character istic of our financial history in this' rebel lion that the_public credit, which was at the .lowest ebb in the months- which preeeded' its breaking out; his steadilyimproved in the midst of theAerribletrialsit has brought upon the country.,, The first loans were ne gotiated at seven and thirty hundredthsper °mita; the next at sevem . .the , " next at six; more recently large sums have been ob tained at five and fowl andthe whole of the debt which is reirefientkifY,United,States notes, and .kraotional currency bears, of course, no interest. The interest - on - the debt Which "eXists in . .the:foam of treasury notes .and.. Certificates 'Of indoilitedneas or of depoilik and is called temporary debt, is paid in 'United States not* whilethe interestim debt which ex ists in the fork of 'fbonds, and is fu.nded 'debt, is paid in, coin,--a, disarlmina tion•which is intended-to bring the payments. oficoin' interest thin vintderate compasS, and at the sonic time -to offer ''special: f in-. ducentents.pf investments in, bonds, in order, to avoid a too rapid increase Of. eireulating neteeindOOtieequenidenreeiatiati. 2. general:distribution! of Abe debt, , into tbe hands of, the:greatest possiblenum her, of holders has been the second object of the Secretary in its creation. This has been accomplished by the nriiVersal sion - of United States; notes and. , fractional ' currency, by tip distribution of certificates suiting great numbers of contract creditors and temporary depositors, and by arrange ments to fopulariie the loans by givineto the people everywhere opportunities to sub scribe for bonds... These; subseription ar _rangements have been especiallyuseful and successful: They haVe been adopted as yet with reference`to only two deseriPtions of bonds the twtr commonly - known as Seven -thirties and .five twenties, so_: named, the first, from their rates of interest, and the second from their, eriods of payment. 'The plan of diatributing the seVen-thirties was that of employing alarge num'ber of,agents in many places,.-and directing „their"action from the Department. It workek,Well fo'r s; time, but was soon found inadequate to financial necessities" of the `government.. "For the distributibn of the five4wenties, therefore; a different plan was ,• adop,ted. . After ascertaining, by inquiry, that they could , not be dfsposed . of to capitalists in. *mounts suifiCient for 'prompt payment of the army and navy, andfor the satisfaction of the just claims of .public:; creditors , gen= erally, without serious h loas, "the ;Secretary determined to employ a, general illicit, der adequate bonds; and Coriftife.the Whole work of distribution, eiteept,' do , far could be effected by the Treasurer, ;Assist ant Treasurers, and , Designated'Deposito-. ries, to him and to sub-agents designated by him and responsible immediately to him. Under this plan, and chiefly thrOugh the indefatigable efforts 'of the general agent ,and his - sub-agents, five-twenty, bonds ' to the amount of nearly Attu , hundred millions of dollars, in denominations of fifty, one hrindred,' five hundred; "and -One thousand dollars, were. distributed throughout the. whole country, not controlled by the rebel lion, and among, all classes of our country=` men. The''Watery of the world maybe Searchediii vain ler a parallel case of pop ; ular 'financial support, 4, a 'national; govern ment. The Secretary is linable 'to * perceive in what better or more effectual mode, the, important objector distribution Could be ac= complished, and he proposes no , "departtiro from it, except,anch .as consideration§ of economy, harmonized with efficiency, may suggest. B.—The object of future controllability," has alio'had &prominent place in; the re girds of the Secretary - Under the condi.•:, tions,WV,ell - eXisted at the outbreak of the, rebellion., hece - acquiesd, in the neeessity . . . ivhuih seemed to dictate the negotiation of" bonds payable after twenty •years;' but, i he acquiesced with reluctance, and, as* soon as permitted by circumstances, recommendid• the enactment of laws authorizing the issue of bonds payable after shOrter periods, 'as well as the creation of temporary . debt in other forms. In harmony with, these views Congress provided for the issue of the bonds known as the five-twenties;,and,also for the issue of treasury notes payable three years from date; for certificates of indebtedness payable in one year; and for temporary loans by deposits, reimbursable after ten days' notice. At the last mission Congress repealed some embarassing reiiir j ictions of former acts, and authorized the issue . of bonds payable after ten years, and of treas ury notes payable at pleadure or three years from date. These treasury notes were made legal tenders for face vain or convertible for amount and interest into U. S. notes.. The Secretary availed himself of this legislation by plaiting with the people as large an amount as possible of five-twenty bonds and by using the other powers so as to put whole debt, except the long loans first negotiated, in such a shape that pidthpe •advantage•can ixt taken of favorable cir cumstances to diminish the burdens it im poses on industry. Whenever the constitu tional supremacy of the nation shall be re established over all its parts, it will be completely within •the power of -Congress and the Secretary to fund the whole or any part of the temporary debt ,in bonds bearing . a very moderate interest and redeemable at the 'Pleasure of government, after very brief periods, or, perhaps, at any time after their issue_ Nothing further seems desira ble on the mote off no'ntrellability. The final object of the Secretary was to extract, from the unavoidable evkl *of debt as much incidental benefit as possible:". : - To .this end, he desired 'authority to re T • ceiie temporary loins in the faith of de posits reimbursable after a few, dajtit!,no-, tics. This measure was regarded by many With something less than favor at'firs4' but Congreis,nfter full consideration; 'author ized thereceipt of such deposits at'an inter est not exceeding five per cent: to the aiztount of twenty-five 'millions' of dollars; then raised the limit to . fifty, millions, and .11titais an hundred Millions; and_prcivided reserve of fifty Millions of United -States notes to meet demands for reimbursements heyfolitritlier•aonvenient means of satisfac tion: • It was not long before these deposits reached the .;highest limit., and, before the flow could, be - well checked, somenilutt ex ceeded' it. The utility of the measure was 'very conspicuous.on ihe recent occasion of great stringency in New York, when the Seerlary was able to reimburse over fifty :millions of these, dettotii(s. during the last Weeks of the year; =by iihich action the pressure was sensibly alleviated, with a the of only a fifth of the , reserva."-I• -• In former reports the Secretary has sta ted his convictions and the grounds of them, respecting the necessity and the utility of putting a large part of the debt in the form of United States notes, withoutinterest, and .adapierl 'to circulation as money. These ~ donViEtioih'remain' unchanged, 'vend seem - no* to be thared-tby the people: For the first time in eu.r history has a.reaLapproaeli to a uniform currency been made; and the . benefits of it, though still far from the beiit attainable condition, are felt by all: The circulation has -been ;distributed-through out the country, and is 'everywhere accept able. It is a gratification to know that a tribunal so distinguished by the learning and virtues of its members as the Supreme.. Court -of. New York has given the 'sanction of ibijiidgment to the consti tutional validity of the law. 50, , t00; real and great advantages are de rived from the wide diffusion of the debt tuning the - people through business tsans • actions, and.thrOugh , the exertions of the dlofficers of .the department and the agents for loans already. noticed. It is impossible to estimate the advantages , national unity and national stre ngth s ecl,by this distribution. Every ho b. : of a note or bond, from a five cent fracti,,,,: note to a five thousand dollar bowl- It;;; direct interest in the security of n a g, l; ; institutions and in the stability of nati o4. : administration. And it is another abd tb small advantage of the distribution Oy the burdens of debt, always heaviest ni,, 4 loans are held by few, and especially, foreigners, diminish in proportion al receivers of interests become identified the payer of taxes. Another incidental good growing from 1 1 0 , bitter root of debt, has been fully expl a i n , , , in observations heretofore submitted " national:banking system. Except ti n .„ l. such a system no sure way is seen to 4 0 . , complete and permanent establishment or uniform currency; and a system of nation, t banking, fair to'sll and secnrefor all ; t „ only be safely and firmly establish e d 1,7. making use of a portion of the national del; as security for the national currency. • In . these several _ways may even su , i great evils as are brought upon us hr to bellion. be-,transmuted, by a wise nich es ,. into various forms of utility. The Seere t :.: 'has endeavored to use this a l chemy, n . !;:. ' ; what success the country will judge tvi, t , time and trial shall . have applied t o Work their unfailing tests. - Blowitime additional loans are requirc. and, as ; legislation now stands, mode are open. • MODE OF RAISING ADDITIONAL LOANs . The-limits of .deppsits . for temporary 10. 1 t• are fixed at one hundred millions of dells; As these adventagns ef these deposits 1, come better. and;moresenerally underst o „; the loan in this form will doubtless, i n absence of restriatinkt,'be largely ine rea ,, and the possibility of demands for to i r :.: bureements, beyond means to meet I'm eatiale.fully Piciteideol for by an inerea 4 the . existing..propertion between dep c ,.,::: and reserve., Such an arrangement, Secretary inclines to think, would ,beneficially by . increasing the amoun t ‘: currency when unusual stringency shall n. 'quire increase, and reducing its sm,, ei . when returning ease shall allow redact:,.. Another portion of the additional loan ; ,, quired may' be obtained through the salt the remainder of,the bonds knowns as ft., twenties.; The amdurit of these band s subscribed . for -on -the first of bem, k , her, we5P01,058,600. It will not be dithee: t to dispose'tiflkesie 'at par„and it is pos s ib . that a small,premium may be obtained a part. In a former report the Secretary pine,: 'the!' limit, to which the loan in the form: , . certificates of indebtedness could be eat'..: at one hundred millions of dollars. 1 1 ,,, rience has shown that it can be carrie4,, one hundred and fifty millions, and that natural limit is about that sum. On the f.- F of December theduriount of these certifica:,st w as $ . 3.417•,7 . 29,000, It would be unFa:‘, ilierefc,pre, to rely on any substantial inetras: ofidair iathat form: - - The limit prescribed by law to the isms,.! Unitedttites notes has been reached, and tt, Secretary thinks it clearly inexpedient tort. orease the amount. When circulation excee it the legitimate requirethents for real paytne rj , and exchanges, no addition to its volume increase its value. On the contrary, such sa• dition tends inevitably .to depreciation; kal depreciation, if addition be continued, xi:; find its only practical limit in the utter rons - of the augmented mesa. When Congress authorized the creation V :debt, to acertain extent, in the form of UMW States notes, and impressed on these tot,.; the 'qualities of a circulating medium, its as Lion was. justified by the disappearance c! coin in consequence of the suspension specie payments; by the necessity of proti.:- lug a media:min which taxes could be feared ; loins received, and payments 11134 t; 'and by - the - obvious :expediency of proridie: that medium in the form of national legs; instead of- resorting to the paper of bask:. Under the circumstances its action was wife and necosssary; lint it was equally wise “r-I necessary to lintit,the extent of the issue , 1.7 the necessity which denianded them. They were war:W.o vacnumleansed by the .disappearance, of coin and to supply the 2.1. ditional deminds"arented by the inerea!ol number and . variety .of money pupae:l;E. Congress believed flint four hundred milhoe: would suffice for these purposes, and there. fore, limited issues to that sum. The Secretary proposes no change of this .limitation, and places. ,no reliance, therefore. on any increase of resources from increase of circulation. Additional loans in this end! would, indeed, almost certainly prove for diminished value could hardly fail to nec tralise increased amount. Sufficient circulation having been alreply provided, the GoVernn3ent must now banns like any other employer of capital temporari!! requiring 'more .than income . will supply, avl Tidy for the - credit Which will 'secure adran lageous.loane. Upon good faith, industrial ae tivity,; accuMulated though not immediately :available capital, and satisfactory provisit.: for...punctual payment of accruing interta: 'and tatimite'reimbuisemeni of principal. - THE NATIONAL NANICING SYSTEM. For a warrant of this confidenee,_howeve7. he must not 'omit to say that he relies numb ~ rk the support to be - given to the public credit 1y the national banking system and by the na tionalizatidn of thi l cui : re6y. There is, as be thinks, no possibility of a permanently Ell'• cessfuladministration of the finances, under oirounistanees in:olring the-creation of large debts, unless loans can be effected in a medie:a of general and equal credit throughout the country, and not liable to variation in quay, titY or in rail's eicept tinder the operation of national legislation and the general laws of trade. It is an error to suppose that the increase of pricesis attributable wholly or in .Very large measuro:to this circulation. Had It been poasi ble to borrow coin enough, and fait enough, for the disbursements of the war, almost if not altogether the same effects on prices would have been wrought. Such disbursements made in coin would have enriched fortunate contractors, stimulated lavish expenditures, and so inflated prices in the same way and nearly to the same extent as when made in notes. Prices, too, would have risen from other causes. The withdrawal from mechan ical and agricultural occupations of thousands of our best, strongest, and most active work ers, iri'obedience to their country's summon; to the held, would, under any system of cur rency, have increased the price of labor, and, by consequence, the price of the products nt labor, while the prices of many things would have risen, in part from other causes, as for example, the price of railroad bonds frota vast increase of 'incense, through payments kr • military transportation; and the price of cot ton from deficient supply. • The Comptroller of the Currency reports the organization under the 'national banking act. prior to tho 29th of November, of one hundred •and thirty-four associations ; all which, upon the suggestion of the have adopted the name of Nationilßanks, distinguished In• ;order 'of organization and by locality. There Banking Associations have been formed in seventeen States, and the District of Cslutc bia, and have an aggregate capital of 081,200. The great - care and labor require , : for the preparation of suitable notes for t'r.e new national currency has delayed its ii-ne beyond expectation; but the printing is not begun; and the' several associations wilt supplied with the amounts to which they s ea respectively entitled within a few weeks. I3?- sides the Aismiations reported as actual.s organized, there are many others in of organization. There is hardly a State D' controlled by the rebellion, and hardly a e aiderable city, in which a national banktr; association has not been organized, or is r. 21 being organized.' Even New Orleans is t an.exception' to this• statement. ,Thtte.the great work of introducing a peen:- anent national currency has been entered urn in a apiriteand with an energy which proowe perfect success. The Secretary thinks he tie's' nothing in saying that within the preset: year the benefits of the system will have 5 " approved themselves to the sense and patri,a ism. of the people; that it will be beyond tbe reach of summated assault. OPERATIONS OP TB MINT. The - operations of the mint bare bee" less importance than usual during the la. year. The amount of coinage was increased ova that of last year at San Francisco alone. The value of tliC buillion received was $202 1 .* 101 31; in g01d523,149,495 41 ; and in facer $1,674,605 90,; • from the total of which waft be deducted the bare made at one branch and deposited - feecoinage at another, making th. actual amount deposited $23 701 837 31 . The coinage of the year was $24,888,477 1.2: which $20,695,852 was gold coin ; 877'90 - old bars; 81,174,092 80 silver rem: $390,204 42 silver bars ; and $478,450 cent!: Of this coinage $4,1&1,497 37 in 49.1Kt . r . pieces was effected at Philadelphia ; $/S•? .L. : 598 68 in 2.872, Frantic"' 173 pieces at San Fratiev • and $2,137,642 82 in 3,404 gold and Eilcer ban at New York. The Secretary renews tho recommendati on of preceding reports in relation to the univer sal measure of commercial values by as 16° ternational decimal coinage.
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