The Sun.
London, England, 1858-12-20 00:00:00

THE SUN, LONDON, MONDAY EVENING, DECEIVIBER 20, 185 g.

- _
lawless violence, and in protecting the lives and property
of Americari. citizens travelling thereupon, requiring at
the sante time that these forces shall be withdrawn the
moment the danger shall have passed away. Without
such a provision our citizens will be constantly exposed to
interruption in their progress and to lawless violence.
" A similar necessity exists for the passage of such an
act for the protection of the Panama and Tehuantepec
routes.

" In reference to the Panama route, the United States,
by their existing treaty with New Grenada, expressly gua-
rantee the neutrality of the Isthmus, with the view that
the free transit from the one to the ther sea may not be
interrupted or embarrassed in any future time while the
treaty exists.'
" In regard to the Tehuantepec route, which has been
recently opened under the most favourable auspices, our
treaty with Mexico of thepOth December, 1853, secures to
the citizens of the United States a right of transit over
it for their persons and merchandise, and stipulates that
neither Government shall interpose any obstacle thereto.
It also concedes to the United States the 'right to trans-
port across the Isthmus, iu closed bags, the mails of the
United States not intended for distribution along the line
of the communication ; also the effects of the United States
Government and its citizens which may be intended for
transit, and not for distribution on the Isthmus, free of
Custom-house or other charges by the Mexican Govern-
ment.'

" These treaty stipulations with New Grenada and
Mexico, in addition to the considerations applicable to the
Nicaragua route, seem to require legislation for the purpose
of carrying them into effect.
COSTA RICA AND NEW GRENADA.

- - ---
" The injuries which have been inflicted upon our citizens
in Costa Rica and Nicaragua during the last two or three
years have received tfie prompt attention of this, government.
Some of these injuries were of the most aggravated charac-
ter- The transaction at Virgin Bay in April, 1856, when a
company of unarmed Americans, who were in no way con-
nected with any belligerent conduct or party, were fired on
by the troops of Costa Rica, and numbers of them killed
and wounded, was brought to the knowledge of Congress by
my predecessor soon after its occurrence, and avas also pre-
sented to the government of Costa Rica for that immediate
investigation andiredress which the nature of the case de-
manded. A similar course was pursued with reference to
other outrages in these countries, some of which were hardly
less aggravated in their character than the transaction at
Virgin Bay. At the time, however, when our present
minister to Nicaragua was appointed, in December, 1857,
no redress had been obtained' for any of these wrongs, and
no reply even had been received to the demands which had
been made by this government upon that of Costa Rica
more than a year before. Our minister was instructed,
therefore, to lose no time in expressing to those governments
the deep regret with which the President had witnessed
this inattention to the just claims of the United States, and
in demanding their prompt and satisfactory adjustment.
Unless this demand shall be complied with at an early day
it will only remain for this government to adopt such other
measures as may be necessary, in order to obtain for itself
that justice which it has in vain attempted to secure by
peaceful means from the governments of Nicaragua and
Costa Rica. While it has shown, and will continue to show
the most sincere regard for the rights and honour of these
republics it cannot permit this regard to be met by an utter
neglect on their part of what is due to the government and
citizens of the United States.
" Against New Grenada :we have long-standing causes
of complaint, arising out of the unsatisfied claims of our
citizens upon that republic; and to these have been more
recently added the outrages committed upon our citizens at
Panama in April, 1856. A treaty for the adjustment of
these difficulties Was concluded by the Secretary of State
and the minister of New Grenada, in Sept., 1857, which
contained just and acceptable provisions for that purpose.
The treaty was transmitted to BOgota, and was ratified by
the government of New. Granada, but with certain amend-
ments. It was alot, returned' to this city until
after the close of the last session of the Senate. It will be
immediately transmitted to that body for their advice and
consent ; and should this be obtained it will remove all our
existing causes of co plaint against New Grenada on the
subject of claims. 1.
",Questions have arisen hetween the two governments as'
to the right of New arenada to levy a tounage duty upon
the vessels of the United States in its ports of the Isthmus,
and to levy a passenger. tax 'upon our citizens arriving iti
that country, whether with a design to remain there, or to
pass from ocean to .ocean by the transit route, and also a'
tax upon the mails of the United States transported over
the Panama Railroad. The government of New Grenada
has been informed that the United States would consider
the collection of either of these taxes as an act of violation
of the treaty between the two countries, and as such would
be resisted by the United States. .At the same time, we are
prepared to discuss these questions in a spirit of amity and
justice, and with a sincere desire to adjust them in a satis-
factory manner. A negotiation for that purpose has already
been commenced. No effort has recently been made to
collect these taxes, nor is any anticipated under present
circumstances.

BRAZIL.
"With the empire of Brazil our relations are of the most
friendly character. The productions of the two countries,
and especially those of an agricultural nature, are such as
to invite extensive mutual changes. A large quantity of
American flour is consumed in Brazil, while more than
treble the amount in value of Brazilian coffee is consumed
in the United States. While this is the case a heavy duty
has been levied until very recently upon the importations of
American flour into Brazil. lam gratified, however, to be
able to inform you that in September last this has been
reduced from 1 dol. 32 to about 49 cent per barrels, and the
duties on other articles of our production have been
diminished in nearly the same proportion.
"I regret to state that the government of Brazil still con-
tinues to levy an export duty of about 11 per, cent. on coffee,
notwithstanding this article is admitted free from duty in United States. This is a heavy charge upon-the con-
sumers of coffee in our country, as we purchase half of the
entire surplus crop . of that article raised in Brazil.
Our minister, under instructions, will reiterate his efforts to
have this export duty removed; (and it is hoped that the
enlightened Government of the Emperor will adopt this
wise, just, and equal policy.` In that event there is good
reason to believe that the commerce between the two coun-
tries will greatly increase, much to the advantage of both.
" The claims of our citizens against the Government of
Brazil are not, in the aggregate, of very large amount ; but
some of these rest upon plain principles of justice, and their
settlement ought not to be longer delayed. A renewed and
earnest, and I trust a successful effort, will be made by our
minister to procure their final adjustment.
PARAGUAY.
"On the 2d of June last Congress passed a joint resolu-
tion authorising the President 'to adopt such measures and
use such force as, in his judgment, may be necessary and
advisable" for the purpose of adjusting the differences be-
tween the United States and the Republic of Paraguay, in
connection with the attack on the American steamer Water
Witch, and with other -measures referred to' in his annual
message.' And on the 12th of July following they made an
appropriation to defray the expenses and compensation of a
commissioner to that republic, should the President deem it
proper to make such an appointment.
" In compliance with these enactments I have appointed
a commissioner, who has proceeded to Paraguay with full
powers and instructions to settle these differences in an
amicable and peaceful manner, if this be. practicable. His
experience and discretion justify the hope that he may prove
successful in convincing the Paraguayan Government that
it is due both to honour and justice that they should volun-
tarily and promptly make atonement for the wrongs which
they have committed against the United States, and indem-
nify our injured citizens whom they have forcibly despoiled
of their-property.
" Should our commissioner prove unsuccecsful, after a
sincere-and- earn* effort to accomplish the object of his
mission, then no alternative will remain but the employment
of force to obtain just satisfaction' from Paraguay. In
view fi this contingeney theitecretary of the navy, under
my direction, has fitted out and despatched a naval force, to
rendezvous near , Buenos Ayres, which, it is believed, will
prove suffieiidfor the Occasion. It is my earnest desire,
however, that it may.not be foitnd necessary to resort to this
last alternative.
DOMESTIC 'AFFAIRS.—BUSINESS OF THE .
COUNTRY.
" When ,Congress' met in December last the business of
the country_ had just been crushed by one of those periodical
revulsions which are the inevitable consequence of our un-
sound and extravagant system of bank credits and inflated
currericy; . With all, the elements of national wealth in
abundance: our manufactures were suspended, our useful
public and private enterprises were arrested, and thousands
of labourers were deprived of employment and reduced to
want. Universal distriss prevailed among the commercial,
manufacturing, and mechanical classes. This revulsion was
felt the more severely in, the United States, because similar
causes had produced the like deplorable effects throughout
the commercial nations'of Europe. All were. experiencing
sad reverses at the same moment. Our manufacturers every.
where suffered severely, not because of the recent reduction
in the tariff of duties on imports but because there was no
demand at any price for their productions. The people were
obliged to restrict.themselves in their purchases to articles -
of prime necessity. ' In the general prostration of business -
the iron manufacturers in different states probably suffered
more than any other class, and much destitution was the-
inevitable consequence among the great number of work-
men who had been employed in this useful branch of our
industry. There could be no supply where there was no
demand. Topresent an example, there could be no demand
for railroad iron, after ear magnificent system of railroads,
extending its benefits to every portion of the Union, had
been brought to a dead pause. The same consequences have
resulted from similar causes to many other branehes of use-
ful manufactures. It is self-evident that where there is no
ability to puichase manufactured- articles these cannot be•
produced, and consequently must cease to -be produced,
"No government, and especially a government of such
limited power as that of the United States, could have pre-
vented the late revulsion. The whole commercial world
seemed for yean to have been rushing to this catastrophe.
The same ruinous consequences would have followed in
the United States whether the duties upon foreign imports
had remained as they were under the tariff of 1846 or had
been raised to a much higher standard. The tariff of 18.57
had no agency in the result. The general causes existing
throughout the world could not have been controlled by the
legislation of any particular country.
" The periodical revulsions which have existed in our
past history must continue to return at intervals so long as
our present unbounded system of bank credits shall prevail.
They will, however, probably be the less severe in future ;
because it is not to be expected, at least for many years to
come, that the commercial nations of Europe, with whose
interests our own are so materially involved, will expose
themselves to similar calamities. But this subject was
treated so much at large in my last annual message that I
shall not now pursue it further. Still, I.respectfully renew
the recommendation in favour of the -passage of a uniform
bankrupt law applicable to banking institutions. This is all
the direct power over the subject which I believe the federal
government possesseS. Such a law would mitigate, though
it might not prevent, the evil. The instinct of self-preser-
vation might produce a wholesome restraint upon their
banking business, if they knew in advance that a suspen-
sion of specie payments would inevitably produce their
civil death.

" But the effects of the revulsion are now slowly but
surely passing away. The energy and enterprise of our
citizens, with our unbounded resources, will, within the
period of another year, restore a state of wholesome indus-
try and trade. Capital has again accumulated in our large
cities. The rates of interest are there very low. Confi-
dence is gradually-reviving, and so soon as it is discovered
that this capital can be profitably employed in commercial
and manufacturing enterprises, and in the construction
of railroads and other works of public and private im-
provement, prosperity will again smile throughout the
land. It is vain, however to disguise the fact from our-
selves, thut a speculative inflation in our currencx, without
a corresponding inflation in other countries whose manu-
factures come into competition with our own, must ever
produce disastrous results to our domestic manufactures.
No tariff short of absolute prohibition, can prevent these
evil consequences.

duced pecuniary distress throughout the country' hare so
reduced the amount of imports from foreign.countries that
the revenue has proved madecpiate to meet the necessary
expenses of the government. To supply the deficiency,
Congress by the act of Dec. 23, 1857, authorised the issue
of 20,000,000 dols. of treasury notes, and, this proving in-
adequate, they authorised, by the act of June 14, 1858, a
loan of 20,000,000 dols., to be applied to the payment of
appropriations made by law.'
" No statesman would advise that we should go on in-
creasing the national debt to meet the ordinary expenses of
the government. This would be a most ruinous policy. In
case of war, our credit must be our chief resource, at least
for the first year, and this would be greatly impaired by
having contracted a large debt in time of peace. It is our
true policy to increase our revenue so as to equal our ex-
penditure It would be ruinous to continue to borrow. Be-
sides it may be proper to observe that the incidental pro-
tection thus afforded by a revenue tariff would at the pre-
sent moment to some extent increase the confidence of the
manufacturing interests, and give a fresh impulse to our
reviving business. To this, surely, no one will object.
" In regaid to the mode of assessing and collecting duties
under a strict revenue tariff I have long entertained, and
often expressed the opinion that sound policy requires this
should be done by specific duties in cases to which these can
be properlyapplied. They are well adapted to commodities
which are usually sold-by weight or measure, and which from
their nature, are of equal or nearly equal value. Such, for
example, are the articles of iron of different classes, raw
sugar, and foreign wines and spirits.
" In my deliberate judgment specific duties are the best
if not the only means of securing the revenue against false
and fraudulent invoices, and such has been the practice
adopted by this purpose by other commercial nations. Be-
sides, specific duties would afford to the American manufac-
turer the incidental advantages to which he is fairly entitled
under a revenue tariff. The present system is a sliding
scale to his advantage. Under it, when prices are high and
business prosperous, the duties rise in amount when he least
requires their aid. On the contrary, when prices fall, and
he is struggling against adversity, the duties are diminished
in the same proportion, greatly to his injury. •
" Neither would there be danger that a higher rate of
duty than that intended by Congress could be levied in the
form of specific duties. It would be easy to ascertain the
average value of any imported article for a series of years ;
and, instead of subjecting it to an ad valorem duty at a cer-
tain rate per centum, to substitute in its place an equivalent
specific duty.
By such an arrangement the consumer will not be in-
jured. It is true, he might have to pay a little more duty
on a given article in one year; but if so he would pay a lit-
tle less in another, and in a series of years these would
counterbalance each other, and amount to the same thing
as far as ,his interest is concerned. This inconvenience
would be trifling when contrasted with the additional secu-
rity thus afforded against frauds upon-the revenue, in which
every consumer is directly interested.
" I have thrown out these suggestions as the fruits of
my own observation, to which Congress, in their better
judgment, will give such weight as they may justly deserve.
FINANCES.. .
" The report of the Secretary of the Treasury will explain
in detail the operations of that department of the govern-
ment. The receipts into the Treasury from all sources,
during the fiscal year ending June 30, 1858, including the
Treasury notes, authorised by the Act of Dec. 23, 1857, were
dols 70,273,869 59, which amount, with the balance of
dols. 17,710,114 27 remaining in the Treasury at the com-
mencement of the year, made an aggregate for the service
of the year of dols. 87,983,983 86.
"The public expenditure, during the fiscal year ending
June 30, 1858, amounted to dols. 81,585,667 76, of which
dols. 9,684,537 99 were applied to the payment of the pub-
lic,debt, and the redemption of Treasury notes with the
interest thereon, leaving in the Treasury on July 1, 1858,
being the commencement of the present fiscal year, dols.
6,398,316 10.
" The receipts into the Treasury during the first quarter
of the present fiscal year, commencing the let of -July,
1868, including one-half. of the loan of dole. 20;000;000,
with the premium upon it, authorised by the act of 14th of
June, 1858, were dole. 25,230,879 46, and the estimated re-
ceipts for the remaining three quarters to the 30th of June;-
1859, from ordinary sources, are d6ls. 38,500,000, making,
with the balance before stated, an aggregate of dols.
70,129,104 56.
"The expenditure during the first quarter of the present
fiscal year, were dols. 21,708,198 51; of which dols.
1,010,142 37 were applied to the payment of the public debt
and the redemption of Treasury notes and the interest
thereon. The estimated expenditures, during the remain-
ing three quarters to 30th June, 1859, are dols. 52,357,698 48,
making an aggregate of dole. 74,065,896 99, being an excess
of expenditure; beyond the estimated receipts into the Trea-
sury from ordinary sources, during the fiscal year to the
30th Juue, 1859, of dole. 3,936,701 43. Extraordinary
means are placed by law within the command of the Secre-
tary cf the Treasury, by the re-issue of Treasury notes re-
deemed, and by negociatmg the balance of the loan autho-
rised by the act of 14th June, 1868, to the extent of dols.
11,000,000, which if realised during the present fiscal year,
will leave a balance in the Treasury, on the Ist day of July,
1859, of dols. 7,063,298 57.
" The estimated receipts during the next fiscal-year end-
ing 20th June, 1840, are dole. 62,000,000 which, with the
above estimated balance of dols. 7,063,29 57, make an ag-
gregate for the service of the next fiscal year, of dols.
69,063.298 57. The estimated expenditures during the next
fiscal year, ending 30th June, 1860, are dols. 73,139,147 46,
which leave a deficit of estimated means, compared with the
estimated expenditures for that year, commencing on the Ist
of July, 1859, of dols 4,075,848 89.
" In addition to 'this sum, the Postmaster-General will
require from the Treasury, for the service of the Post-office
Department, 3,038,728 dols., as explained in thereport of the
Secretary .of the Treasury, which will increase the esti-
mated deficit on the 30th June, 1860, to 7,014,676 dole.
89e. To provide for the payment •of this estimated defi-
ciency, which will be increased by such appropriations as
may be made by Congress, not estimated in the report of
the Treasury Department, as well as to *vide for the gra-
dual redemption, from year to year, of the outstanding
Treasury notes, the Secretary of the Treasury recommends
such a revision of the present tariff as will raise the required
amount. After what I have already said, I need scarcely
add that I concur in the opinion expressed in his report,
that the public debt should not be increased by an additional
loan ; and would therefore strongly urge upon Congress
the duty of making, in their present session, the necessary
provision for meeting these liabilities.-
THE PUBLIC DEBT.
" The public debt on the Ist July, 1858, the commence-
ment of the present fiscal year, was 25,155,977 dols. 67c.
"During the first quarter of the present year the sum
of 10,000,000 dols. has been negotiated of the loan authorised
by the act of 14th June, 1858-making the present out-
standing public debt, exclusive of Treasury notes,
35,155,177 dols. 66c. There was on the Ist July, 1858, of
Treasury notes issued by authority of the act of Dec. 23,
1857, unredeemed, the sum of 19,754,800 dole., making the
amount of actual indebtedness, at that date, 54,910,777 dole.
66c. To this will be added 10,000,000 dols. during the pre-
sent fiscrl year, this being the remaining half of the loan of
29,000,000 dole. not yet negotiated.
" The rapid increase of the public debt, and the necessity
which exists for a modification of the tariff, to meet even
the ordinary expenses .of the Government, ought to admo-
nish us all in our respective spheres of duty, to the practice
of rigid economy. The objects •of expenditure should be
limited in number, as far as this may be practicable, and
the appropriations necessary to carry them into effect ought
to be disbursed under the strictest accountability. Enlight-
ened economy does not consist in the refusal to appropriate
money for constitutional purposes, essential to the defence,
progress, and prosperity of the Republic, but in taking care
that none of this money shill be wasted, by mismanage-
ment, in its application to the objects designed by law.
" Comparisons between the annual expenditure at the
present time, and what it was 10 or 20 years ago, are alto-
gether fallacious. The rapid increase of our country in ex-
tent and popillation renders a corresponding increase of ex-
penditure to some extent unavoidable. This is constantly
creating new objects of expenditure, and augmenting the
amount required for the old. The true questions, then, are
-have these objects been unnecessarily multiplied ? or has
the amount expended upon any or all of them been larger
than comports with due economy ? In accordance withthese principles, the heads of the different executive depart-
ments of the Government have been instructed to reduce
their estimates for the next fiscal year to the lowest stan-
dard consistent with the efficiency of the service, and this
duty they have performed in a spirit of just economy. The
estimates of the Treasury, War, Navy, and Interior De-
partments, have each been in some degree reduced; and
unless a sudden and unforeseen emergency should arise, it
is not anticipated that a deficiency will exist in either
within the present or the next fiscal year. The Post-office
Department is placed in a peculiar position, different from
the other departments, and to this I shall hereafter refer.
"I invite Congress to institute a rigid scrutiny to ascer-
tain whether the expenses in all departments cannot be still
further reduced; and I _promise them all the aid in my
power in pursuing the investigation.
THE DEPARTMENTS.
"I transmit herewith the reports made to me by the Se-
cretaries of War, of the Navy, of the Interior, and of the
Postmaster-General. They each contain valuable infor-
mation and important recommendations, to which I invite
the attention of Congress.-
"In my last annual message I took occasion to recom-
mend the immediate construction of 10 small steamers,
light draught, for the purpose of increasing the efficiency of
the navy. Congress responded to the recommendation, by
authorising the construction of Bof them. The progress
which has Wen made in executing this authority is stated in
the report of the Secretary of the Navy. I concur with him
in opinion, that a greater number of. 'this • class of vessels
is necessary_ for the purpose of protecting in a more efficient
manner the persons and property of American citizens on
the high seas, and in foreign countries as well as in guard-
ing more effectually our own coast. I abcordingly recom-
mend the passage of an act for this purpose. ' •
"The suggestions contained in the report of the Secre-
tary of the Interior, especially these in regard to the dispo-
sition of the public domain, the pension and bounty land
system, the policy towards the Indians, and the amendment
of our patent laws are 'worthy of the serious consideration
of Congress.
"The post-office department occupies a position very
different from that of the other departments. For many
years it was the policy of the Government to render this a
self-sustaining department; and if this cannot now be ac-
complished in the present condition of the country we ought
to make as near an approach to it as may be practicable.
" The Postmaster-General is placed in a most embarrass-
ing position by the existing laws. Ho is obliged to carry
these into effect. • He has no other alternative. He finds,
however, that this cannot be done without heavy demands
upon the Treasury over and above what is received for
postage; and these have been progressively increasing from
year to year, until they amounted, for the last fiscal year
ending June 30, 1858, to more than 4,500,000 dole.; whilst
it is estimated that for the present fiscal year they will
amount/to- 6,290,000 dols. These sums are exclusive of the
annual appropriation of 700,000 dols. for compensation for
the mail services performed for the two houses of Congress,
and the other departments and officers of the Government
in the transportation of free matter.'
" The cause of these large deficits is mainly attributable
to the increased expense of transporting the mails. In 1852
the sum paid for this service was but a fraction over four
millions and a quarter. Since that year it has annually in-
creased, until- in 1858 it has reached more than eight mil-
lions and a quarter ; and for the service of 1859 it is esti-
mated that it will amount to more than ten millions of
;dollars

The receipts of the post-office department can be made
to approach or to equal its expenditure only by means of
the legislation of Congress. Inapplying any remedy care
should be taken that the people snail not be deprived of the
advantages which they are fairly entitled to enjoy from the
post-office department. The principal remedies realm-
mended to the consideration of 'Congress by the postmaster
general, are to restore the former rate of postage upcn single
setters to five cents.; to substitute for the franking privilege
the delivery to those now entitled .to enjoy, it of post office
stamps for their correspondence, and to-direct the depart-
ment in making contracts for the transportation of the mail
to confine itself to the payment of- the sums necessary for
'tilt single purposp without requiring it to be transported in
Post coaclies on carriages of any particular description