The Sun.
London, England, 1854-12-18 00:00:00

Dn.

Capital
Reserve fund l2, 980,750 14
Reser- re immobiliere
Note, ; to bearer, in circulation
Do., of branch banks - 143,773,050
Do . to order (Post bills)
Bills payable at sight 10,011,227
Acc, 'nut-current of Treasury Creditor 67,02'0,718 63
Val', lons accounts-current 100,320`,971 58
'l3 o. branch banks 28,925,3.71
DiN ',clouds to be paid 51.8, 529 25
Di:. count, interest, and expenses
Chr..r ge for safe keeping of securities._ 28,573 80
Re .'discounts of the last half year
Overdue bills 186,902. 58
s undries .. 5,673,999 6

963,189,454 76

•
m. Teuvocation of the prelates and clergy of the pro-
vince (.f Canterbury was on Saturday prorogued at the
Jerus: `iew•chamber, Westminster, by the Vicar-General,
Dr. r.fwisi, under a commission from his Grace the
Arch bishop of Canterbury, Primate and Metropolitan,
to Tuesday, February 6, 1855.

Theo United States Congress commenced its Fit-
tings on the 4th instant, when tlic following mes-
sage from President Pierce was real :•
" Fellow Citizens of the Senate and of the House
of Representatives,
"The past has been an eventful year, and will be
hereafter referred to as a marked epoch in the history of
the world. While we have been happily preserved from
the-calamities (,f War, our domeetie prosperity has not
been entirely uninterrupted. The crops in portions of
the country have been nearly cut off. Disease has pre-
vailed to a greater extent than usual, and the sacrifice
of huMan life, through casualties by sea and land, is
Without a parallel, But the pestilence has swept by, and
restored salubrity invites the absent to tlieir homes, and
the return of business to its ordinary channels. If the
earth has rewarded the labour of the husbandman less
bountifully than, in preceding season's it has left him
with abundance for domestic wants, and a large surplus
for exportation. Ip the present, therefore, in the
paste we find 'ample. grounds for reverent, thankfulness to
the God of Grace and Providence for hisprotecting care
and merciful dealings with us as a people.
"Although our attention has been arxested by painful
interest in passing events, yet our country feels no more
than the slight- vibrations of the convuTsions which have:
shaken Europe. As individuals we cannot repress sym-
pathy for human suffering, nor regret for the causes
.which produce it. As a nation, we are reminded that
whatever interrupts the peace or checks the prosperity
of any part of Caristehdorn, tends, more" arless, to in-.
volve our own. The condition of stag's is not unlike
that,onadividuals. They are mutually xpendent upon
each other. Amicable relations between-shoes and re-
ciprocal good-will • are essential for the promotion of
whatever is desirable in their moral, Social, and pOlitical
condition. ,Hence it has been my earnestendeavour to
maintain peace and friendly intercourse with all nations.
" The wise theery of this government, so early adopted
and steadily pursued, of avoiding all entangling alliances,
has hitherto exempted it from many complications, in
which it would otherwise have become involved. Not-
withstanding this, our clearly7defined and well-sustained
c)urse of action, and our geographical position so remote
from Europe, increasing disposition has been manifested
by some of its governments to supervise. and, in certain
respects, to direct, our foreign policy. In plans for'ads
justing the balance of power among themselves, they
have assumed to take us into account, and would can-
strain us to conform our conduct .to their views. One
or another of the powers or Eumpe has; from time to
time, undertaken•te enfeirce arbitrary regulations, con-
trary in many respects to established principles of.inter- ,
national law. That law the United States have, in their
foreign intercourse, uniformly respected and observed,
and they cannot recognise any such interpolations there-
in as the temporary interests of others may suggest.
They do not admit" that the sovereigns of one continent,'
or of a particular community of state:, can legislate for
all others.

"Leaving the Transatlantic nations to adjust their
political syAe n in the way they may think best for their
'co mnon welfare, the independent powers of this conti-
nent inay',ll assert the right to be etten.pt from all
annoying interference on their p irt.
,Systetnatio absti-
nences fr intimate political connection with distant
foreign nations`doe3 not conflict with giving the widest
range to our foreign commerce. This distinction, so
clearly marked in history, seems to have been overlooked
.or disregarded by some leading foreign states. , Onr re-
fusal to be brought within, and aubjectel to, their pneu,
liar systena.lias,. I fear, created a jealms..distrust of our
conduct, and induced on their part occasional acts of
disturbing.eftect Upon our foreign:: relations. Our pre-
sent attitude and past coorie- give assurances, which
should not be questioned, that our purpose, are not ag-
gressive, nor threatening- to the 'safety and welfare of
other nations. • Dur military establishment, in times of
peace, is adapted to maintain exterior defences, and to
preserve order among the aboriginal tribes within the
limits of the Union. Oar naval force is intended only
for the protection of our citizens abroad, and.; of our
commerce, diffused, as it is, over all the seas of the
•globe; .The Government of the • United- States, being -
essentially pacific in policy, stands 'prepared to repel..
invasion
.by the viiltmtary service of a patriotic people,
and provides no permanent means of foreign aggression.
These considerations should allay all• apprehension that
we are disposed to encroach on • the rights or endanger
the security of other stati2s• • •

"Some European powers hive regarded, with
quieting concern, the territorial expansion of the United
States This 'lipid growth has resulted from the legi-
timate exorcise of sovereign rights belonging aliko to all
nations, and- by- many liberally exercievd: U,,der such-
oircurnstance, it con d hardly hate bect:Leipccted that
those among them, which have within a comparatively
recent period subdued and absorbed aimicrit kingdoms,
planted their standards on every continent, and now
possess :or; claim the control of the islands of every
ncdatt is their appropriate domain, would look with un-
frieully sentiments upon the acquisitions of tkis country,
in every instance 'honourably obtained, or would feel
themselves justified- in imputing our advancement to a-
spirit of aggression or to a passion for political predo-,
minance.

• "Our foreign commerce-has reached a magnitnele and
extent nearly eqnal to that of the first maritime power
of the eartie, and exceeding that of any other. Over.
this great' inter e, in which not only our merchants,
but all classes -of our citizens, .at least isrdirectly,-arc
concerned, it is the duty of the executive and legislative
m
branches of the' Goveruerit to 'exercise a, careful Super-
visioo, and adopt proper measures f,r its protection.
The policy which I have had in view, in regard to this
interest, embraces its future as well as its 'present Secu-
rity. • .
Long experience has shown that, in general, when
the principal powers of Europe are engaged in war, the
rights of neutral nations are endangered. This considera-
tion led, in the progress of our war of, indepeodence,.
to the formation of the celebrated confederacy ,Of
armed neutrality, a primary olject of which was to
assert the doctrine that free ships make free goods, ex-
cept in the case of articles contraband•of war—a doe-
. trine which, from the very commencement of our nay
tional being, has been a cherished idea of the statesmen
of this country. At one period or another every mari-
time power has, by sortie solen n treaty or stipulation, re-
cognised that principle ; and it might have been biped
that it would come to be universally received and re-
spected as a rule of international law. But the refusal
of one power prevented. this, and in the next great war
which ensued—that of the French revolution—it failed
to be respected among the belligerent states of Europe.
Notwithstanding this the principle is generally admitted
to be a sound and salutary one ; so much so, that at the
commencement of the existing war in Europe, Great
Britain and France announced their purpose to observe
it for tke present—not, however, as a recognised inter-
national right, but as a mere concession for the time
being. The co-operation, however, of these two power-
ful maritime nations in the interest of neutral rights ap-
peared to me to afford an occasion ioyiting and justifying,
on the part of the United States, a renewed effort to
make the doctrine in question a principle of international
law, by means of special conventions between the several
powers of Europe and America. Accordinglyproposi-
tion, embracing not only the rule that free ships make
free goods, except contraband articles, but also the less.
contested one, that neutral property other than contra-
band, though on board enemy's ships, shall he exempt
from confiscation, has been submitted by this Goiern
to tho-se of Europe and America.
" Russia acted promptly in this matter, and a conven-
tion was concluded between that country and the United
States, providing for, the observance of the principles
announced, not only as between themselves, but also as
between themselves and all other nations which shall
enter into like stipulations.' None of the other powers
have as yet taken final action on the subject. I am not
aware, however, that any objection to the proposed
stipulations has been made ; but, On the contrary, they
arc acknowledged to be essential to the security of new.
Aral commerce ; and the only -apparent obstacle to their
general adoption is in the possibility that 'it may be en-
cumbered by iesdcsissible_conditious.
"The King of the Two Sicilies -has expressed to our
minister at Naples his readiness to concur in our pro-
position. relative to neutral rights, and to enter into a•
convention on that Subject.
"The King of Prussia entirely approves of the pro-
ject of a treaty to the same effect submitted to him, but
proposes an additional article providing for the renunci-
ation of privateering. Such an article, for most obvious
reasons, is much desired by nations having naval estab-
lishments lanire in proportion to. their foreign commerce.
If it were adopted as an international rule the commerce
of a nation having comparatively a small naval force
would Le very much at the mercy of 'its enemy in case
of_ war with a power of decided naval siipef lority. The
bare statement of the condition in Which the United
States would be placed, after having surrendered the
right to resort to privateerEb in the event of war with a
belligerent of naval saw% limey, will slow that this Go-
vernment could never listen to such a proposition., The
navy of the first maritime power 'in Europe is at least
ten times as large as that of the United States. The
foreign commerce of the two countries is Lead/ equal,
and about equally expOsed.to hostile .depredations. In
war between that power, acd the United States, without
resort on our past to our mercantile mai lee, the means
of our enemy to-inflict injury upon our commerce would
be tenfold greater than ours to retaliate. We could not
extricate our country from this unegissl condition with
such an enemy unless we at once depirted from our pre-
, sent peaceful policy, and became a great . naval power.
Nor would this country, be better situated. in war with
, one of the secondary naval powers. Though the naval
.disparity.would be less, the great extent and more ex

lo'ed condition of our wide-spread commerce would
give any of them a like advantage over its.
"The proposition to enter into engagements to forego
resort to privateers, in case this country should be forced
into war with a great naval power, is not entitled to more
favourable consideration than would be a proposition to
agree not to accept the services of volunteers for *opera-
tions on land. ',When the honour or the tights of our
country require it to assume a liustile attitude; it -confi-
dently relies upon the patriotism of its citizens, not ordi-
narily devoted to the military profession, to augment
the army and the navy, so as to make them fully ade-
quate to the emergency which calls then' 'into action.
The proposal to surrender Vie tight to employ privateers
is professedly founded upon the principle that private
propertys.f unoffending non-combatants, thoueli enemiep,
should he exempt from the ravages of war ;- but the pro-
posed surrender goes but little way in carrying out that
which equally requires that such private pro-
perty should not be peized or in Masted by national ships
of war. Should the leading powers of Europe' concur
in proposing, as a rule of internafional law, to exempt
private property upon the ocean from seizure by public
armed cruisers, as well as by privateers, the United
States will readily meet them upon that broad ground.
"Since the adjimrnment of Congress, the ratifications
of the treaty between the United States and Great
Britain rilative to coast fisheries and to reciprocal trade
with the British North American provinces have been
exchanged, and some of its anticipated advantages are
already enjoyed by us, although its full execution was
to abide certain acts of legislation not yet fully per-
formed. So soon as it was ratified Great Britain opened
to our commerce the free nasigatibn of the River St.
Lawrence, and to our fishermen unmolested access to
the shores and bays, from which they had been pre-
viously excluded ou the coasts of her North American
provinces ; in return for which she asked for the intro-
duction, free of duty, into the ports of•the United States
of the fish caught on the same coast I.iy British fisher-
men. This being the compensation stipulated in the
treaty for privileges of the highest importance and value
to the United States, which were thus voluntarily
yielded before it became effective, the request seemed to
me to be a reasonable ono; but it could not be acceded
to, from Want el' authority to suspend our laws imposing
duties upon all foreign fish. In the meantime the Trea-
sury Department issued,a regulation for ascertaining the ,
duties paid or secured by bonds on fish caught on the
coasts of the British .provinces,, and brought to our mar-
kets by British subjects, after the fishing 'grounds had
been made fully accessible to the -citizens of the United
States. I recommend to your favourable consideration a
proposition which will be submitted to you for authority
to refund the duties and cancel the bonds thus received.
The provinces of Canada and New Brunswick have
also anticipated the full operation of the treaty by
legislative arrangements, respectively, to admit, free of
duty, the productS of the United States mentioned in
the free list of the treaty; and au arrangement similar to
that regarding Er tlsli fish has been made for duties now
chargeable on the products of those provinces enumerat-
ed in the same free list, and introduced therefrom into
the United States, a proposition for refunding which
will, in thy judgment, be in like manner entitled to your
favourable-consideration.

"There is difference of opinion between the United
States and Great Britain as to the boundary line of the
territory of Washington, adjoining the British posses-
sions on the Pacific, which has already led to difficulties
on the part of the citizensand local authorities of the two
Governments. I recommend that provision be made for
a commission, to be joined by one on the part of her
Britannic Majesty, for the purpose of running and esta-
blishing the line in controversy. Certain stipulations of
the third and fourth articles sf the treaty concluded by
the United States and Great Britain in 1846, regarding
possessory rights of the Hudson's Biy Company, and
property of the Puget's Sound Agricultural Company,
• have given rise to serious disputes, and it is important
to all concerned that summary means of settling them
amicably should be devised. I have reason to believe
that an arrangement can be made on just terms for the
extinguishment of the rights in question, embrac'ng also
the right of the Hudson's Bay Company to the nariga•
tion of the River Columbia ; and I tlurefore suggest to
your consideration the expediency of making a contin-
gent Appropriation for that purpose.
" Frande was the early and efficient ally of the United
States in their struggle for independence. From that
time to the present, with occasional slight interruptions,
cordial relations of friendship have existed between the
Government-- and people of the two countries. The
kindly sentiments cherished alike by b ,th nations have
led to an extensive social and commercial intercourse,
which, I trust, will not be interrupted or checked in any
caSualevent of an apparently unsatisfactory character.
The French Consul at San Franc:sco was, not long since,
brought into the United States District Quint at that
place, by comiMisery process, as a witness in favour of
another foreign consul, in violation, as the French Go- '
vernment conceives, of his privileges under our coneulary
convention with Tranati. There being n Allitig in the
tratisactn.n which could imply any disrespect to France
or its consul, such explanation itu been made as I hope
will be satisfactory. Subseleently, rui.iunlersUmding
arose on the subject of the Freida 11-ovesaimont having,
as it appeared, abruptly excluded the Am r:can Minister
to Spain front passing through France, on his way from
London to Madrid. But that Goverrinent has unequi-
vocally disavowed any de=ign to deny the right of transit
to the Minister of-the United Statet ; and after explana-
tions to this effect, he has resumed his journey, and
actually. returned through Franca to Spain.- I herewith
lay before Congress the correspondence- on this subject •
between our envoy -at Paris and the Minister of Foreign
Relations: of the French Government.

" The position of our affairs with Spain remains as at
the close of your last session. Internal agitation, as-
suming very nearly the character of political revolution,
has recently convulsed that country. The late ministers
were violently expelled from power, and .men of very•
different views in relation to its internal affairs have sue-
ceeded. Since the change there has been no propitious
opportunity to resume, and press on, negotiations for the
adjustment of serious questions of difficulty between the
;Spanish Government and the United States: There is
reason to believe that our minister will find the present
-Government more favourably inclined than the preceding
to comply with our just demands, and to make suitable
arrangements for restoring harmony and preserving
peace between the two countries.
" Negotiations are pending with Denmark to discon-
tinue the practice of levying tolls on our vessels and
their cargoes passing through the Sound. I do not
doubt that we can claim exemption therefrom as a matter
of right. It is admitted on all hands that this exaction
is sanctioned, not by the general, principles of the law of
nations, but only by special conventions which most of
the commercial nations have entered into with Denmark.
The fifth article of our treaty of 1826 with Denmark pro-
vides that there shall not be paid on the vessels of the
United States and their cargoes .when passing through
the Sound higher duties than those of the most favoured
nations. This may be regarded as an implied agreement
to submit to the tells during the continuance of the
treaty, and con equeutly may embarrass the assertion
of our right to be released therefrom. There are also
other provisions in the treaty which ought to be modi-
fied. It was.to'remain in force for ten y3ars, and until
one year after either party should give notice to the
ether of intention to terminate it. I deem it expedient
that the contemplated notice should be given to the
Government of Denmark. •

" The naval expedition' despatched about two years
since for the purpose of establishing relations, with the
empire of Japan, has been ably and svrifally conducted'
to a successful termination by the officer to whom it was
entrusted. A treaty, opening certain -of the ports of
that populous:country, 'has been negotiated ; and in
order to give full effect thereto it now only remains to
exchange ratifications, and to adopt requisite commercial
regulations.
"The treaty lately concluded between the United
States and. Mexico nettled some of our most embarrass-
ing difficulties with that country, but numerous claims
upon it for wrongs and injuries to our citizens remained
unadjusted, and many new cases have been recently
added to the former list of grievances. Our legation
has been earnest in its endeavours to obtain from the
Mexican Government a favourable consideration of these
claims, but hitherto without success. This 'failure is,
probably, in some measure to be ascribed to the disturbed
condition of that country. It has been my anxious de-
sire to maintain friendly relations with the Mexican Re-
public, and to cause its rights and territories to be re-
spected, not only by our citizens, but by foreigners who
have resorted_ to the United States for the purpose of
organising hostile expeditions against some of the states
of that republic. The defenceless condition in which its
frontiers have been left has stimulated lawless adven-
turers to embark in these enterprises, and greatly in-
creased the difficulty of enforcing our obligations of neu-
trality. Regarding it as my solemn duty to fulfil effici-
ently these obligations, not only towards Alex:co, but
other foreign nations, I have exerted all the powers with
which-I am invested to defeat such criminal proceedings,
and to lining to punishment those who; by taking a part
therein, violated our laws. Tire -energy and activity of
our civil and military authorities have frustrated the de-
signs of those who‘meditated expeditions of this charac-
ter, except in two instances. One of th.;se, c rinplsed of
foreigners, was at fir-t countenanced and aided by the
Mexican Government itself, it having been deceived a,
to their real object. Thu other, small in number, eluded
the vigilance of the magtstmtes at ban Fianeir.co, mat
succeeded in reaching the Kexican'territories ; but the
effective measures taken by tni Government compelled
the abandonment of the undertaking. • .
"The commission to esta'ulish the new line between
tlioUnite3 State ; and Mexico, accord n; to LiQ provisions
of the treaty of the 30th Decemb..tr last, has been
organised, and the work is already comment. d.
Our treaties with the Argentine Confederation, and
with the Republi, s of Uruguay and Paraguay, secure
to us the free navigation 'of the river La Plata, and some
of its larger tributaries .but the same success has not
attended our en eavoure to open the Amazon. The
reasons in favour of the free use of that river I had occa-
sion to present fully in a' former Message ; and con-
sidering the cordial relations which have long existed
between this Government and Brazil, it may be expected
that pending negociations will eventually reach a
favourable result. •
" Convenient means of transit between the several
parts of a oocntry are not only desirable for the objects

'of commercial and personal communication, but essential
to its existence under one Governr----*---'--. -
are the Atlantic and Pacific coatia
by the:whole breadth of the ,
tants of each are closely bound together by commniot,,
Of origin and institutions, and by strong attachment to
the Union. Hence the constant and increasing inter-
course and vast interchange of commercial productions
between these remote divisions of the Republic.- At the
present time the most practicable and only commodious
routes for eottimunication between them are by the way
of the Lthinus of Central _America. It is the duty of the
Government to secure these avenues against all danger
of interruption.
"In relation to Central America, perplexing questions
existed between the United States and GI eat Britain. at
the time of the cession of California. These, as well as
questions which subsequently arose, concerning inter_
oceanic comnitininttion acros's the Istham., her.', as it
was supposed, adjusted 1.-y the treaty of April 19, 1850;
misunderstandinglisioiis.p
a readjustment as to
of tlte iviinipr is ofnow some
n c
under but unfintunately they have been le-opened by serious
con-
sideration. Our minister at Londonbas made strenuous
efforts to accomplish this desirable object, but has not
yet found it possible to bring the uegociations to a
iei pto - •
tenni nation.

"*A. s incidental to these questions I deem it proper to
notice an occurrence which happened in Central Ame-
rico near the close of the last session of Congress. Si)
soon as the necessity was perceived of establishing inter-
oceanic comthimication acrossihe Isthmus a company
was organised, undcr authority of the state of Nicarsgua,
but composed for the most part of citizens of the United
States, for the purpose of opening such a transit ways
by the river San Juan and Lake Nicaragua, which soon
became an eligibleand much-used route in the transporta-
tion of our citizens and their property between the
Atlantic and Pacific. Meanwhile, and in anticipation
of the completion and importance of the transit -way, a
number of adventurers had taken possession of the old.
Spanish port at the mouth of the River San Juan, in
open defiance of the State or States of Central America,
which, upon their becoming independent, had right-
fully succeeded to the local sovereignty and jurisdic-
tion of Spain. These adventurers undertook to change
the name of the place sfrom San Juan del Norte to
Greytowiz and; though- at-arst-pretending to act as the
subjectirstithe fidtitious sovereign of the Mosquito In-
dians, they subsequently repudiated the control of any
power whatever, assumed to adopt a distinct political
organisation, and declared themselves an independent
sovereign state. If at some time a faint hope was en-
tertained that they might become a stable and respecta-
ble community that hope soon vanished. They pro-
ceeded to assert unfounded claims to civil jurisdiction
over Punta-Arenas, a position on the opposite side of the
River San Juan, which was in possession, under a title
wholly independent of them, Of citizens of the United
States, interested in the Nicaragua Transit Company,
and which was indispensably necessary to the prosperous
operatiOn of that route across the isthmus. The 'com-
pany resisted their groundless claims, whereupon they
proceeded to destroy some of its buildings, and attempted
violently to dispossess it.
." At a later period they organised a strong force for
the purpose oldemolishing the establishment at Punta
Arenas, but this mischievous design was defeated by the
interposition of one of our ships of war, at Fhxt time
in the harbour of San Juan. Subsequently to this,
in May last, a body of men from Greytown crossed
over to Punta Arenas, arrogating authority to arrest,
on a charge of murder, a captain of ore of the steam
boats of the Transit Company. Being well aware
that the claim to exercise jurisdiction there would be
resisted then, as it had been on previous occasions,
they went prepared to assert it by force of arms. Our
minister to Central America happened to be present cn
that occasion. Believing that the captain of the steam-
boat was innocent, for lie witnessed the transaction cif
which the charge was.founded, and believing also that
the intruding party, having no jurisdiction over the
place where they proposed to make the arrest, would
encounter desperate resistance if they persisted in their
purpose, he interposed ellectually to prevent violence
and bloodshed. The American Minister afterwards
visited Greytown, and while he was there a mob, includ-
ing certain of the so called public functionaries of She
place, surrounded the house in which he was, avow-
ing that they had come to arrest him by order of
some person exercising the chief authority. While
parleying with them-he was wounded by a missile from
the crowd. A' boat, despatched from the American
steamer Northern Light to release him from the perilous
situation in which he was understood to be, was fired
into by the town guard and compelled to return. These
incidents, together with the known character of the
population of Greytown and their excited state, induced
just apprehensions that the lives and property of our
citizens at Punta Arenas would be in imminent danger
after the departure of the stea.iner with her passengers
for New York, unless a -guard was left for their pro-
tection. For this purpose, and in order to insure the
safety of passengers and property passing over the route,
a temporary force was organised at considerable expense
to the United States, for which provision was made
at the last session of emigre s..
"This pretended community, a heterogeneous assein-
blags, gathered from various countries, and composed,
fir the most part, of blacks and persons of mixed
blood, had previously given other indications of mis-
chievous and
,dangerous propensities. Early in the
same month property was clandestinely abstracted from
the depot of the Transit Company, and taken to Grey-
to .vo.' The plunderers obtained shelter there, and their
pursuers were driven-lA.6R by its- people, who-not only
protected the wrong-doers and shared the plunder, but
treated with rudeness and violence those who sought
to recover their property.
" Such; in substance, are the facts submitted to my
consideration, and proved,by trustworthy evidence. I
could not doubt that the case demanded the interposition
of this Government. Justice required that reparation
should be made for so many and such gross wrongs, and
that a course of insolence and plunder, tending directly
to the 'insecurity of the lives of numerous travellers, and
of the rich treasure belonging to our citizens, passing
over this transit-way, should be peremptorily arrested. •
Whatever it might be in other respects, the community
in question, in power to do mischief, was not despicable.
It was well provided with ordnance, small arms, and
ammunition, and might easily seize- on the unarmed
boats, freighted with millions of property, which passed
almost daily within its reach. It did not profess to be-
long to any regular government, and had, in fact, no
recognised dependence on, or connection with, any one
to which the United- States or their injured citizens
might apply for redress, or which could be held respon-
sible in any way for Ili° outrages committed. Not
standing before the world in the attitude of an organised
political society, being neither competent to exercise the
rights nor to discharge the obligations of a government,
it was, in fact, a marauding establishment, too danger( us
to be disregarde 1, and too guilty to pass unpunished, and
yet incapable of being treated in any, other way than as a
piratical resort of outlaw 4, or a camp of savages,. depres
dating on emigrant trains or caravans, and the frontier
settlements ot civilised States. _

" Seasonable notice was given to the people of Grey-
town that this Government required' them to repair the
injuries they had done to our citizens, and to make suit-
able a )01egy for t'ieir insult of our Ministe7, and that a
ship of war mould be despatched thither to enforce com-
pliance with these demands. But the notice passed un-
heeded. Thereupon a commander of the navy, in charge
of the sleop of war Cyane, was ordered to repeat the
demands, and to insist upon a compliance • therewith.
Finding that neither the populace, nor those assuming
to have authority over them, manifested any disposition
to make the required reparation, or even to offer excuse
for their conduct, ho warned them, by a public procla-
mation, that if they did not give satisfaction within a
time specified he would bombard the town. By this
procedure he afforded them opportunity to provide for
their personal safety. To those, also, who desired to
avoid toss of property, in the punishment about to be in-
flicted on the offending town, he furnished the moans of
removing their effects by the boats of his own ship and
of a steamer which he procured and tendered to them for
that purpose.. At length, perceiving no disposition on
the part of the town t. comply with his requisitions, he
appealed to the commander of her Britannic Majesty's
schooner Bermuda, who was seen to have intercourse
and apparently much influence with the leaders among
them, to interpose; and persuade them to take some
course calculated to save the necessity of resorting to
the extreme measure indicated in his proclamation;
but that officer, instead of acceding to the request, did
nothing more than to protest against the contemplated
bombardment. No steps of any sort were taken by the
people to give the satisfaction required. No individuals,
if any they were, who regarded themselves as not respon-
sible for the misconduct of the community, adopted any
means to separate themselves from the fate of the guilty.
The several charges on which the demands for redress
were founded had been . publicly known to all for
some time, and were again announced to them. They
did not deny any of these charges ; they offered no
explanation—nothing in extenuation of their conduct ;
but contumaciously refused to hold any intercourse with
the commander of the Cyane. By their obstinate
silence they seemed rather desirous to provoke chastise-
ment than to escape it. There is ample reason to believe
that this conduct of wanton defiance on their part is im-
p.ltable chiefly to the delusivo idea that the American
Government would be dote: red from punishing them
through f_tar et displeasing a formidable foreign power,
which they presumed to ,thrilk looked with compla-
cency upon their ng„,eressive aid ihsulting deportment
to ward the United States. '.1.7110 Cyane at length fired
u, on the town. Before inuch Injury had been done the
lire was twice suspended, iu on der to afford opportunity
for an arranvineet ; but this vas declined. Most of the
buildings of the place—of little value generally—were,
in the sequel, destroyed ; but, owing to the considerate
precautions taken by our naval commander, there was
no destruction of life.
" When the Cyane was orde red to Central America,
it was confidently hoped and expected that no occasion
would arrise for 'a resort 0, violence and destruction
of property and loss of life.; . Instructions to that eff c'i
were given to her comm. ander. And no extreme act
would have been requisif os had not the people them.
selves, by their I extraor iinary conduct in the affair,
frustrated all the possi ole mild measures for obtain-
ing satisfaction. A v iithdravral from the place, the

of his Wide entirely efgated' Weald, intim-lila
Arcurnstanees in which the esmmiluder of the Cyan'
fourd himself, have been absolute abandonment of all
laim of our citizens for indemnification, and sub-
missive acquiescence in national indignity. It would
have encouraged in these lawless men a spirit of inso-
lence and rapine most dangerous to the lives and pro-
perty of our citizens at Punta' Arenas, and probably em-
boldened them to grasp at the treasures and valuable
merchandise continually passing over the Nicaragua
route. It certainly would have been most satisfactory
to me if the object of the Cyane's mission could have
been consummated without any act of public force ; but
the arrogant contumacy of the offenders rendered it im-
possible to avoid the alternative, either to break up their
establishments, or to leave them impressed with the idea
that-they might persevere With impunity in a career of
insolence and plunder.
"This transaction has been the subject of complaint
on the part of some foreign powers, and has been cha-
racterised with more of -harshness than of justice. If
comparisons were to be instituted, it would not be diffi-
cult to present repeated instances in the history of
states standing the very front of modern civilisation
where communities, far less offending and more defence-
less than Greytown, have been chastised with much
greater severity, and where nut cities only have been
faid in ruins, but human life has been recklessly sacri-
ficed, and the bleed of the innocent made profusely to
mingle with that of the guiliy.
" Passing from foreign to domestic affairs, your at-
tention is naturally diteeted to the financial condition
of thecoui,try, always a subject of general interest. Fur
complete and exact information regarding the- finances,
and the various Lranchea of the public service connected
therewith, I refer you to the rsport of the Secretary of
the Treasury,•froth which it *ill appear that the amount
of revenue during the last -fiscal year, from all sources,
Was 73,549,705 do's. ; :led that the public expenditure
for the same period, exciusiie of payments on account of
the public debt, amounted to 51018,249 dole. During
the same period the payments made in redemption of
the public --debt, including interest and premium,
amounted to 24,336,380 dole. To the sum total of the
receipts of that year is to be aided a balance remaining
in the Treasury at the commencement thereof, amount-
ing to 21,942,892 dole. ; and at the close of the same
year, a corresponding balance—amounting to 20,137,967
dole. of receipts above expenditure—also remained in the
Treasury. Although, is the opinion of the Secretary of
The Treasury the receipts of the current fiscal year are
not likely to equal in amount those of the last, yet they
will 'undoubtedly exceed the amount of expenditure by
at least 15,000,000 dole. I shall, therefore, continue
to direct that the surplus revenue be applied—so far as
it can be judiciously and economically done—to the
reduction of the public debt, the amount of which, at
the commencement of the last fiscal year was 67,40,628
dols. ; of which there had been paid on the 20th s7ay of
November, 1854, the•suin of-22,365,172 dole., leal
_Leg a
balance of outstanding pCblic debt
dots., redeemable at different periods of only 44,9 i 5,456
within 14 years.
There are also-remnants of other government stocks, • ,
most ef.which are already due, and on, which the intents&
has ceased, • but which have mot !set been presented for pay
ment, arnOuntir gto 233,179 des. This statement exhi-
bits the fack, that the annual inco me of the government
greatly excess's the amount of it's public debt, which
latter remainssunpaid only because the time of payment
has not yet matured, and it cannot be discharged at
once, e :cept at the option of public creditors, who pre-
fer to retain the•socurities of the Unit. d States ; and the
other fiat, not less( striking, that the annual revenue
from all sources exceeds, by many mil'lion's of dollars,
the rm stint neeied fc r a prudent and economical admi-
nistration of the government.
`• The estimates pres:ented to Congress 17rom the diffe-
rent executive departmeAts, at the last session, amounted
t.).33,406,581 dole. ; and the appropriations made to the
sum of 53,116,958 dole. Of this excess of apieroPriation
o. er estimate+, however, more than 20,000,000 dels. was
applicable to extraordinary' objects, having no reference
to the usra! annual expend:lture. Among thes(s,objects
were embraced 10,000,000 dlls. to meet the thine article
of the treaty between the Ltukted States and Mexico ; so
that, in fact, for objects of extraordinary expenditure the
appropriations were limited to considerable less Oals
40,000,000 dole.. I, therefore, renew my recommenda-
tion for a reduction of the duties on Imports. The ‘o'
port of the Secretary of the Tre, usury presents a seri.‘‘
tf tables showing the operation et.- the revenue system'
.for several suecess.ve years, and as tho general principle
of reduction of duties, veith a view t. 9 revenue and not
protection, may now be regarded as the settled policy
of the country, I trust that iittle difVeulty will be en•
countered in settling the details of a Aleasure to that
'-ffect.

"In connection with this subject, I recommend a
• change in the laws, which recent experieope has shown
to be essential to the protection of the 'Government.
There is no express provision of law requiring the re-
cords and papers of a public character of .the several of-
ficers of the Government to be left in their ofilzes for the
use of their successors, nor any 'provision deo'aring it
felony on their part to make false entries in thi6buoks or
return false accounts. In the absence of such' express
provision by law, the outgoing officers in many le tstancee
have claimed and exercised the right to take into their
own possession important books and papers, oit the
ground that these were their privets property, and ..'lave
placed them beyond the reach of the Government. CYen-
duct of this character, brought in several- instances . to
the notice of' the present' Secretary of the Treasury, s '
turally awakened hii suspicien,. arld resulted in the d:e. •
closure that at four ports--t.anely, Oswego, .Toledo,.
Sandusky, and Mi:waukee, the Treasury had, by false •
entries, been defrauded, within the lour years next pre-
ceding March, 1353, of the sum of $198,000. The
great difficulty with which the detection of these frauds
has been attended, in consequence of the abstraction of
b toks and papers by the retir rignificers, aed the facility
with which similar frauds ie the public service may be
perpetrated, render the rece:*.ity of new legal enactments
in the respects above referred to qeite -obvious. For
other material mod:fications of tl:L: revenue laws which
seem to me do,ifable I refer vou to the report of the Se-
cretary of the Treastiry That report, and the tables
which ficcompa:y it, fut proofs of the solid
foundation tai which the finlircial security of the country
rests, and of the salutary influence of the independent
Treasury system upon commerce and all monetary ope•

rations. _
"The experience of the last year furnishes additioral
reasons, I regret to say of a painful character, for the re •
commendation heretofore made to provide for increasing
the military force employed in the territory inhabited by
the Indians. The settlers en the frontier have suffered
much froin the incursions of predatory bands, and large
parties of emigrants to our Pacific possessions have
been massacred with impunity. The recurrence of such
scenes can only be prevented by teaching these wild
tribes the power of, and the responsibility to, the
United States. From the garrisons of our frontier
posts it is only possible to detach troops in small
bodies ; and although these have on all occasions dis-
played a gallantry and a stern devotion to duty, which
on a larger field would have commanded universal ad-
miration, they have usually suffered severely in these
conflicts with superior numbers, and have sometimes
been entirely sacrificed. All the disposable force of the
army is already employed on this service, and is known
to be wholly inadequate to the protection which should
be affor.led. The public mind of the country has been
recently shocked by savage atrocities committed upon
defenceless emigrants and border settlements, and hardly
less by the unnecessary destruction of valuable lives,
where inadequate detachments of troops have tinder
taken to furnish the needed aid. Without increase of
the military force these scenes will be repeated, it is
to be feared, on a larger scale, and with snore dieas-
trlls consequences. Congr •sse am sure, will per-
ceive that the plainest duties • and responsibilities of
government arc in eolved in this question, and I doubt
not that prompt action may he confidently anticipated,
when delay must be attended by such fearful .hazards.
" The bill of the last sessien, providing for an increase
of tie pay of the rank and file of the army, has
had beneficial results, not only in facilitating enlist-
inente, but in obvious improvement in the class of men
who enter the service. I regret that corresponding con-
sideration was not bestowed on the officers, who, in
view of their character and services, and the expenses
to which they are necessarily subject, receive at
present what is, in my judgment, inadequate corn-
pensatier.
,eThe valuable services constantly rendered by the
army and its inestimable importance, as the nucleus
around which the volunteer forces of the nation can
promptly gather in the hour of danger, sufficiently at-
test the e iedorn of maintaining a military peace esta-
blishment ; but the theory of our system and the wise
practice under it, require that any proposed augmeuta-
tion in time of peace be only commensurate with oar
extended
a adhering
he rlimitsng
taolidthifsroin3rtiineoriprieel,ations. While scrupu-
lously
I dud, in existing cir-
cumstances, a necessity for increase of our military force;
and it is believed that four new regiments—two of infan-
try and two of mounted inen-7will be sufficient to meet
the present exigency. If it were necessary carefully
to weigh the cost in a case of such urgency, it would beshown that the additional expense would be compara-
tively light.
" With the increase of the numerical force of the
army should, I think, be combined certain me!esures off.
e_
reform in its organic arrangement and administration. _
nd interests ; and
tion often directed to special obects a
The present organisation is the result of partial legislae
j
the laws relating to rank and command, having been
from the British code, are not
adopted many years ago
always applicable to our service. It is not surprising,
symmetry and simplicity essential Ito the harmonious
; working of its several parts, Sind require a careful

revision.
'The present organisation, by maint,ainaitnid those
maintaining
large
staff corps or departments, separates many office
reg
from that close connection with troops,
active duties in the field, IA liich are 0.1
eerned re-
quisite to qualify them for the
varied e
sibilities of 'high command. Were the 'du''i-s rotPPn.
the
army staff mainly discharged hy officers detached from
it is believed that the special service
%Nell performed '
wouldtheir regiments,he
ecivaiiy
. onftroved. Whilst due fe.
, and the oiscipline and
gir,asriiii•utocttiohlei
soefettih:i3
tyarmy , 1
eu i
sense of honour which roltimivts a officers, audio thtehner
would seem to exact compliabnocecuwltiitvhate.tdbrt .:,°,:itiiiiiliti_
a ale of promotion
ri•nuig°eldoTlairrYoncitisteiUn,
is now practically ' of general offi-
cers, confitud to the grade
shtyilleicti.;tri,rni,rt,4lico
might be somewhat extended with benefit to the
public service. Observance of the rule of seniority
sometimes leads, especially in time of peace, to the pro-
motion of officers who, after meritorious and even dis-
tinguished service, may have been rendered by age or in-
firmity incapable of performing. active duty, and whose
advancement therefore would tend to impair the efficiency
of the army. Suitable provision for this class of of
cers,
by the creation of a retired list, would remedy the evil
without wounding the just pride of men, who, by East