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nication, they will be ready to commence the nndertaking whenever that protection shall be extended to them. Should there appear to be reason, on examining the whole evidence, to entertain a serious doubt of the practicability of construct. ing such a canal, that doubt could be speedily solved by an actual exploration of the route.

Should such a work be constructed under the common • protection of all nations for equal benefits to all, it would be neither just nor expedient that any great maritime state should command the communication. The territory through which the canal may be opened ought to be freed from the claims of any foreign power. No such power should occupy a position that would enable it hereafter to exercise so controlling an influence over the commerce of the world, or to obstruct a highway which ought to be dedicated to the common uses of mankind.

The routes across the isthmus at Tehuantepec and Panama are also worthy of our serious consideration. They did not fail to engage the attention of my predecessor. The negotiator of the treaty of Guadalupe Hidalgo was in-· structed to offer a very large sum of money for the right of transit across the isthmus of Tehuantepec. The Mexican government did not accede to the proposition for the purchase of the right of way, probably because it had already contracted with priyate individuals for the construction of a passage from the Guasacualco river to Tehuantepec. I shall not renew any proposition to purchase for money a right which ought to be equally secured to all nations on payment of a reasonable toll to the owners of the improvement, who would, doubtless, be well contented with that compensation and the guarantees of the maritime states of the world, in separate treaties negotiated with Mexico, binding her and them to protect those who should construct the work. Such guarantees would do more to secure the conipletion of the communication through the territory of Mexico than any other reasonable consideration that could be offered; and as Mexico herself would be the greatest guiner by the opening of this communication between the Gulf and the Pacific Ocean, it is presumed that she would not hesitate to yield her aid in the manner proposed to accomplish an improvement so important to her own best interests

We have reason to hope that the proposed railroad across the isthmus of Panama will be successfully constructed under the protection of the late treaty with New Grenada, ratified and exchanged by my predecessor on the 10th day of June, 1848, which guarantees the perfect neutrality of the isthmus, and the rights of sovereignty and property of New Grenada over that territory, “ with a view that the free transit from ocean to ocean may not be interrupted or embarrassed” during the existence of the treaty. It is our policy to encourage every practicable route across the isthmus which connects North and South America, either by railroad or canal, which the energy and enterprise of our citizens may induce them to complete; and I consider it obligatory upon me to adopt that policy, especially in conse. quence of the absolute necessity of facilitating intercourse with our possessions on the Pacific.

The position of the Sandwich Islands, with reference to the territory of the United States on the Pacific, the success of our persevering and benevolent citizens who have repaired to that remote quarter in Christianizing the natives

and inducing them to adopt a system of government and - laws suited to their capacity and wants, and the use made

by our numerous whale-ships of the harbors of the islands as places of resort for obtaining refreshments and repairs, all combine to render their destiny peculiarly interesting to us. It is our duty to encourage the authorities of those islands in their efforts to improve and elevate the moral and political condition of the inhabitants; and we should make reasonable allowances for the difficulties inseparable from this task. We desire that the islands may maintain their independence, and that other nations should concur with us in this sentiment. We could in no event be indifferent to their passing under the dominion of any other power. The principal commercial states have in this a common interest, and it is to be hoped that no one of them will attempt to interpose obstacles to the entire independence of the islands.

The receipts into the treasury for the fiscal year ending on the thirtieth of June last were, in cash, forty-eight million eight hundred and thirty thousand ninety-seven dollars and fifty cents ($48,830,097.50), and in treasury notes funded, ten million eight hundred and thirty-three thousand dollars ($10,833,000), making an aggregate of fift -nine million six hundred and sixty-three thousand ninety-seven dollars and fifty cents ($59,663,897.50); and the expenditures for the same time were, in cash, forty-six million seven hundred and ninety-eight thousand six hundred and sixtyseven dollars and eighty-two cents ($16,798,667.82), and in treasury notes funded, ten million eight hundred and thirtythree thousand dollars ($10,833,000), making an aggregato of fifty-seven million six hundred and thirty-one thousand six hundred and sixty-seven dollars and eighty-two cents $57,631,667.82).

The accounts and estimates which will be submitted to Congress in the report of the Secretary of the Treasury, show that there will probably be a deficit occasioned by the expenses of the Mexican war and treaty, on the first day of July next, of five million eight hundred and twenty-eight thousand one hundred and twenty-one dollars and sixty-six cents ($5,828,121.66), and on the first day of July, 1851, of ten million five hundred and forty-seven thousand and ninety-two dollars and seventy-three cents ($10,547,092.73), making in the whole a probable deficit, to be provided for, of sixteen million three hundred and seventy-five thousand two hundred and fourteen dollars and thirty-nine cents ($16,375,214.39). The extraordinary expenses of the war with Mexico, and the purchase of California and New Mexico, exceed in amount this deficit, together with the loans heretofore made for those objects. I therefore recommend that authority be given to borrow whatever sum may be necessary to cover that deficit. I recommend the observance of strict economy in the appropriation and expenditure of public money. I recommend a revision of the existing tariff

, and its adjustment on a basis which may augment the revenue. I do not doubt the right or duty of Congress to encourage domestic industry, which is the great source of national, as well as individual wealth and prosperity. I look to the wisdom and patriotism of Congress for the adoption of a system which may place home labor at last on a sure and permanent footing, and, by due encouragement of manufactures, give a new and increased stimulus to agriculture, and promote the development of our vast resources and the ex

tension of our commerce. Believing that to the attainment of these ends, as well as the necessary augmentation of the revenue and the prevention of frauds, a system of specific duties is best adapted, I strongly recommend to Congress the adoption of that system, fixing the duties at rates high enough to afford substantial and sufficient encouragement to our own industry, and, at the same time, so adjusted as to insure stability.

The question of the continuance of the sub-treasury system is respectfully submitted to the wisdom of Congress. If continued, important modifications of it appear to be indispensable.

For further details and views on the above, and other matters connected with commerce, the finances, and revenue, I refer to the report of the Secretary of the Treasury.

No direct aid has been given by the general government to the improvement of agriculture, except by the expenditure of small sums for the collection and publication of agricultural statistics, and for some chemical analyses, which have been, thus far, paid for out of the patent fund. This aid is, in my opinion, wholly inadequate. To give to this leading branch of American industry the encouragement which it merits, I respectfully recommend the establishment of an Agricultural Bureau, to be connected with the Department of the Interior. To elevate the social condition of the agriculturist, to increase his prosperity, and to extend his means of usefulness to his country, by multiplying his sources of information, should be the study of every statesman, and a primary object with every legislator.

No civil government having been provided by Congress for California, the people of that territory, impelled by the necessities of their political condition, recently met in convention, for the purpose of forming a constitution and state government, which the latest advices give me reason to suppose has been accomplished ; and it is believed they will shortly apply for the admission of California into the Union as a sovereign state. Should such be the case, and should their constitution be conformable to the requisitions of the constitution of the United States, I recommend their application to the favorable consideration of Congress.

The people of New Mexico will also, it is believed, at no very distan period, present themselves. for admission into the Union. Preparatory to the admission of California and New Mexico, the people of each will have instituted for themselves a republican form of government, “ Jaying its foundations in such principles, and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness.”

By awaiting their action, all causes of uneasiness may be avoided, and confidence and kind feeling preserved. With a view of maintaining the harmony and tranquillity so dear to all, we should abstain from the introduction of those exciting topics of a sectional character which have hitherto produced painful apprehensions in the public mind; and I repeat the solemn warning of the first and most illustrious of my predecessors against furnishing “any ground for characterizing parties by geographical discriminations.”

A collector has been appointed at San Francisco, under an act of Congress extending the revenue laws over California; and measures have been taken to organize the customhouses at that and the other ports mentioned in that act, at the earliest period practicable. The collector proceeded overland, and advices have not yet been received of his arrival at San Francisco. Meanwhile, it is understood that the customs have continued to be collected there by officers acting under the military authority, as they were during the administration of my predecessor. It will

, I think, be expedient to confirm the collections thus made, and direct the avails (after such allowances as Congress may think fit to authorize) to be expended within the territory, or to be paid into the treasury for the purpose of meeting appropriations for the improvement of its rivers and harbors.

A party engaged on the coast survey was dispatched to Oregon in January last. According to the latest advices, they had not left California, and directions have been given to them, as soon as they shall have fixed on the sites of the two light-houses and the buoys authorized to be constructed and placed in Oregon, to proceed without delay to make reconnoissances of the most important points on the coast of California, and especially to examine and determine on sites for light-houses on that coast, the speedy erection of which s urgently demanded by our rapidly increasing commerce.

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