with zeal and efficiency. This acknowledgment justly includes those Consuls who, residing in Morocco, Egypt, Turkey, Japan, China, and other Oriental countries, are charged with complex functions and extraordinary powers.

The condition of the several organized territories is generally satisfactory, although Indian disturbances in New Mexico have not been entirely suppressed. The mineral resources of Colorado, Nevada, Idaho, New Mexico, and Arizona are proving far richer than has been heretofore understood. I lay before you a communication on this subject from the Governor of New Mexico. I again submit to your consideration the expediency of establishing a system for the encouragement of immigration. Although this source of national wealth and strength is again flowing with greater freedom than for several years before the insurrection occurred, there is still a great deficiency of labourers in every field of industry, especially in agriculture and in our mines, as well of iron and coal as of the precious metals. While the demand for labour is thus increased here, tens of thousands of persons, destitute of remunerative occupation, are thronging our foreign Consulates, and offering to emigrate to The United States, if essential but very cheap assistance can be afforded them. It is easy to see that, under the sharp discipline of civil war, the nation is beginning a new life. This noble effort demands the aid, and ought to receive the attention and support, of the Government.

Injuries, unforeseen by the Government, and unintended, may in some cases have been inflicted on the subjects or citizens of foreign countries, both at sea and on land, by persons in the service of The United States. As this Government expects redress from other Powers, when similar injuries are inflicted by persons in their ser vice upon citizens of The United States, we must be prepared to do justice to foreigners. If the existing judicial tribunals are inadequate to this purpose, a special court may be authorized, with power to hear and decide such claims of the character referred to as may have arisen under Treaties and the public law. Conventions for adjusting the claims by joint commission have been proposed to some Governments, but no definitive answer to the proposition has yet been received from any.

In the course of the session, I shall probably have occasion to request you to provide indemnification to claimants where decrees of restitution have been rendered, and damages awarded by Admiralty Courts; and in other cases, where this Government may be acknowledged to be liable in principle, and where the amount of that liability has been ascertained by an informal arbitration.

The proper officers of the Treasury have deemed themselves required, by the law of The United States upon the subject, to

demand a tax upon the incomes of foreign Consuls in this country. While such a demand may not, in strictness, be in derogation of public law, or perhaps of any existing Treaty between The United States and a foreign country, the expediency of so far modifying the Act as to exempt from tax the income of such Consuls as are not citizens of The United States, derived from the emoluments of their office, or from property not situated in The United States, is submitted to your serious consideration. I make this suggestion upon the ground that a comity which ought to be reciprocated exempts our Consuls, in all other countries, from taxation to the extent thus indicated. The United States, I think, ought not to be exceptionably illiberal to international trade and commerce.

The operations of the Treasury during the last year have been successfully conducted. The enactment by Congress of a national banking law has proved a valuable support of the public credit; and the general legislation in relation to loans has fully answered the expectations of its favourers. Some amendments may be required to perfect existing laws; but no change in their principles or general scope is believed to be needed.

Since these measures have been in operation, all demands on the treasury, including the pay of the army and navy, have been promptly met and fully satisfied. No considerable body of troops, it is believed, were ever more amply provided, and more liberally and punctually paid; and it may be added that by no people were the burdens incident to a great war ever more cheerfully borne.

The receipts during the year from all sources, including loans and the balance in the treasury at its commencement, were 901,125,674 dollars 86 cents, and the aggregate disbursements 895,796,630 dollars 65 cents, leaving a balance on the 1st July, 1863, of 5,329,044 dollars 21 cents. Of the receipts, there were derived from Customs 69,059,642 dollars 40 cents; from internal revenue, 37,640,787 dollars 95 cents; from direct tax, 1,485,103 dollars 61 cents; from lands, 167,617 dollars 17 cents; from miscellaneous sources, 3,046,615 dollars 35 cents; and from loans, 776,682,361 dollars 57 cents; making the aggregate, 901,125,674 dollars 86 cents. Of the disbursements, there were for the civil service, 23,253,922 dollars 08 cents; for pensions and Indians, 4,216,520 dollars 79 cents; for interest on public debt, 24,729,846 dollars 51 cents; for the War Department, 599,298,600 dollars 83 cents; for the Navy Department, 63,211,105 dollars 27 cents: for payment of funded and temporary debt, 181,086,635 dollars 07 cents; making the aggregate, 895,796,630 dollars 65 cents, and leaving the balance of 5,329,044 dollars 21 cents. But the payment of funded and temporary debt, having been made from moneys borrowed during the year, must be regarded as merely nominal

payments, and the moneys borrowed to make them as merely nomiual receipts; and their amount, 181,086,635 dollars 07 cents, should therefore be deducted both from receipts and disbursements. This being done, there remains as actual receipts 720,039,039 dollars 79 cents; and the actual disbursements, 714,709,995 dollars 58 cents, leaving the balance as already stated.

The actual receipts and disbursements for the first quarter, andthe estimated receipts and disbursements for the remaining three quarters, of the current fiscal year, 1864, will be shown in detail by the report of the Secretary of the Treasury, to which I invite your attention. It is sufficient to say here that it is not believed that actual results will exhibit a state of the finances less favourable to the country than the estimates of that officer heretofore submitted; while it is confidently expected that at the close of the year both disbursements and debt will be found very considerably less than has been anticipated.

The report of the Secretary of War is a document of great interest. It consists of:

1. The military operations of the year, detailed in the report of the General-in-chief.

2. The organization of coloured persons into the war service. 3. The exchange of prisoners, fully set forth in the letter of General Hitchcock.

4. The operations under the Act for enrolling and calling out the national forces, detailed in the report of the Provost MarshalGeneral.

5. The organization of the invalid corps; and

6. The operation of the several departments of the Quartermaster-General, Commissary-General, Paymaster-General, Chief of Engineers, Chief of Ordnance, and Surgeon-General.

It has appeared impossible to make a valuable summary of this report except such as would be too extended for this place, and hence I content myself by asking your careful attention to the report itself.

The duties devolving on the naval branch of the service during the year, and throughout the whole of this unhappy contest, have been discharged with fidelity and eminent success. The extensive blockade has been constantly increasing in efficiency, as the navy has expanded; yet, on so long a line, it has so far been impossible to entirely suppress illicit trade. From returns received at the Navy Department, it appears that more than 1,000 vessels have been captured since the blockade was instituted, and that the value of prizes already sent in for adjudication amounts to over 18,000,000

of dollars.

The naval force of The United States consists at this time of

payments, and the moneys borrowed to make t receipts; and their amount, 181,086,635 do therefore be deducted both from receipts and being done, there remains as actual receip 79 cents; and the actual disbursements, cents, leaving the balance as already stated.

The actual receipts and disbursements fo the estimated receipts and disbursements fo quarters, of the current fiscal year, 1864, v by the report of the Secretary of the Treas your attention. It is sufficient to say here that actual results will exhibit a state of the to the country than the estimates of that mitted; while it is confidently expected t year both disbursements and debt will be f less than has been anticipated.

The report of the Secretary of War i interest. It consists of:

1. The military operations of the year, d the General-in-chief.

2. The organization of coloured persons 3. The exchange of prisoners, fully set General Hitchcock.

4. The operations under the Act for e the national forces, detailed in the report of General.

5. The organization of the invalid corps;

6. The operation of the several depar master-General, Commissary-General, Payn Engineers, Chief of Ordnance, and Surgeon

It has appeared impossible to make a va report except such as would be too exten hence I content myself by asking your o report itself.

The duties devolving on the naval branc the year, and throughout the whole of this been discharged with fidelity and eminent blockade has been constantly increasing in has expanded; yet, on so long a line, it has to entirely suppress illicit trade. From Navy Department, it appears that more been captured since the blockade was instit of prizes already sent in for adjudication an of dollars.

The naval force of The United States