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is herewith laid before you, for useful and varied information in relation to the public hinds, Indian affairs, patents, pensions, and other matters of public concern pertaining to his deportment.

The quantity of land disposed of during the last and the first quarter of the present fiscal year was 8,841,549 acres, of which 161,911 acres were sold for cash, 1,45G,$14 acres were taken up under the homestead law, and the residue disposed of under laws granting lands for military bounties, for railroad, and other purposes. It also appears that the sale of the public lands is largely on the increase.

It has long been a cherished opinion of some of our wisest statesmen that the people of The United States had a higher and more enduring interest in the early settlement and substantial cultivation of the public lands than in the amount of direct revenue to be derived from the sale of them. This opinion has had a controlling influence in shaping legislation upon the subject of our national domain. I may cite, as evidence of this, the liberal measures adopted in reference to actual settlers; the grant to the Stat Cm of the overflowed lands within their limits in order to their being reclaimed and rendered fit for cultivation; the grants to railway companies of alternate Bections of land upon the contemplated lines of their roads which, when completed, will so largely multiply the facilities for reaching our distant possessions. This poli cy ha received its most signal and beneficent illustration in the recent enactment granting homesteads to actual settlers. Since the 1st day of January last the before-mentioned quantity of 1,456,514 acres of land have been taken up under its provisions. This fact and the amount of sales furnish gratifying evidence of increasing settlement upon the public lands, notwithstanding the great struggle in which the energies of the nation have been engaged, and which haB required so large a withdrawal of our citiaenB from their accustomed pursuits. I cordially concur in the recommendation of the Secretary of the Interior, suggesting a modification of the Act in favour of those engaged in the military and naval service Of The United States. I doubt not that Congress will cheerfully adopt such measures as will, without essentially changing the general features of the system, secure, to the greatest practicable eiteut, its benefits to those who have left their homes in the defence of the country in this arduous crisis.

I invite your attention to the views of the Secretary as to the propriety of raising, by appropriate legislation, a revenue from the mineral lands of The United States.

The measures provided at your last session for the removal of certain Indian tribes have been carried into effect. Sundry Treaties havo been negotiated which will, in due time, be submitted for the constitutional action of tie Senate. They contain stipulations for extinguishing the possessory rights of the Indians to large and valuable tracts of land. It is hoped that the effect of these Treaties will result in the establishment of permanent friendly relations with such of these tribes as have been brought into frequent and bloody collision with our outlying settlements and emigrants. Sound policy and our imperative duty to these wards of the government demand our anxious and constant attention to their material wellbeing, to their progress in the arts of civilization, and, above all, to that moral training which, under the blessing of Divine Providence, will confer upon them the elevated and sanctifying influences, the hopes and consolations of the Christian faith.

I suggested in my last annual message the propriety of remodelling our Indian system. Subsequent events have satisfied me of its necessity. The details set forth in the report of the Secretary evince the urgent need for immediate legislative action.

I commend the benevolent institutions, established or patronized by the Government in this district, to your generous and fostering care.

The attention of Congress, during the last session, was engaged to some extent with a proposition for enlarging the water communication between the Mississippi river and the north-eastern seaboard, which proposition, however, failed for the time. Since then, upon a call of the greatest respectability, a Convention has been held at Chicago upon the same subject, a summary of whose views is contained in a memorial addressed to the President and Congress, and which I now have the honour to lay before you. That this interest is one which, ere long, will force its own way, I do not entertain a doubt, while it is submitted entirely to your wisdom as to what can be done now. Augmented interest is given to this subject by the actual commencement of work upon the Pacific railroad, under auspices so favourable to rapid progress and completion. The enlarged navigation becomes a palpable need to the great road.

I transmit the second annual report of the Commissioner of the Department of Agriculture, asking your attention to the developments in that vital interest of the nation.

r4. When Congress assembled a year ago the war had already lasted nearly 20 months, and there had been many conflicts on both land and sea, with varying results. The rebellion had been pressed back into reduced limits; yet the tone of public feeling and opinion, at home and abroad, was not satisfactory. With other signs, the popular elections, then just past, indicated uneasiness among ourselves, while amid much that was cold and menacing the kindest words coming from Europe were uttered in accents of pity, that we were too blind to surrender a hopeless cause. Our commerce was suffering greatly by a few armed vessels built upon and furnished from foreign shores, and we were threatened with such additions from the same quarter as would sweep our trade from the sea and raise our blockade. "We had failed to elicit from European Governments anything hopeful upon this subject. The preliminary emancipation proclamation, issued in September, was running its assigned period to the beginning of the new year. A month later the final proclamation came, including the announcement that coloured men of suitable condition would be received into the war service. The policy of emancipation, and of employing black soldiers, gave to the future a new aspect, about which hope, and fear, and doubt contended in uncertain conflict. According to our political system, as a matter of civil administration, the General Government had no lawful power to effect emancipation in any State, and for a long time it had been hoped that the rebellion could be suppressed without resorting to it as a military measure. It was all the while deemed possible that the necessity for it might come, and that if it should, the crisis of the contest would then be presented. It came, and, as was anticipated, it was followed by dark and doubtful days. 11 months having now passed, we are permitted to take another review. The rebel borders are pressed still further back, and by the complete opening of the Mississippi the country dominated by the rebellion is divided into distinct parts, with no practical communication between them. Tennessee and Arkansas have been substantially cleared of insurgent control, and influential citizens in each, owners of slaves and advocates of slavery at the beginning of the rebellion, now declare openly for emancipation in their respective States. Of those States not included in the emancipation proclamation, Maryland and Missouri, neither of which 3 years ago would tolerate any restraint upon the extension of slavery into new territories, only dispute now as to the best mode of removing it within their own limits.

Of those who were slaves at the beginning of the rebellion, full 100,000 are now in The United States military service, about onehalf of which number actually bear arms in the ranks; thus giving the double advantage of taking so much labour from the insurgent cause, and supplying the places which otherwise must be filled with so many white men. So far as tested, it is difficult to say they are not at) good soldiers as any. No servile insurrection, or tendency to violence or cruelty, has marked the measures of emancipation and arming the blacks. These measures have been much discussed in foreign countries, and contemporary with such discussion the tone of public sentiment there is much improved. At home the same measures have been fully discussed, supported, criticised, and denounced, and the annual elections following are highly encouraging to those whose official duty it is to bear the country through this great trial. Thus we have the new reckoning. The crisis which threatened to divide the friends of the Union is past.

Looking now to the present and future, and with reference to a resumption of the national authority within the States wherein that authority has been suspended, I have thought fit to issue a proclamation, a copy of which is herewith transmitted. On examination of this proclamation it will appear, as is believed, that nothing is attempted beyond what is amply justified by the Constitution. True, the form of an oath is given, but no man is coerced to take it. The man is only promised a pardon in case he voluntarily takes the oath. The Constitution authorizes the Executive to grant or withhold the pardon at his own absolute discretion; and this includes the power to grant on terms, as js fully established by judicial and other authorities.

It is also proffered that if, in any of the States named, a State Government shall be, in the mode prescribed, set up, such Government shall be recognized and guaranteed by The United States, and that under it the State shall, on the constitutional conditions, be protected against invasion and domestic violence. The constitutional obligation of The United States to guarantee to every State in the Union a Republican form of Government, and to protect the State, in the cases stated, is explicit and full. But why tender the benefits of this provision only to a State Government set up in this particular way? This section of the Constitution contemplates a case wherein the element within a State, favourable to Eepublican Government, in the Union, may be too feeble for an opposite and hostile element external to, or even within the State j and such are precisely the cases with which we are now dealing.

An attempt to guarantee and protect a revived State Government, constructed in whole, or in preponderating part, from the very element against whose hostility and violence it is to be protected, is simply absurd. There must be a test by which to separate the opposing elements, so as to build only from the sound; and that test is a sufficiently liberal one, which accepts as sound whoever will make a sworn recantation of his former unsoundness.

But if it be proper to require, as a test of admission to the political body, an oath of allegiance to the Constitution of The United States, and to the Union under it, why also to the laws and proclamations in regard to slavery? Those laws and proclamations were enacted and put forth for the purpose of aiding in the suppression of the rebellion. To give them their fullest effect, there had to be a pledge for their maintenance. In my judgment they have aided, and will further aid, the cause for which they were intended. To now abandon them would be not only to relinquish a lever of power, but would also be a cruel aud an astounding breach of faith. I may add at this point, that while I remain in my present position I shall not attempt to retract or modify the Emancipation Proclamation; nor shall I return to slavery any person who is free by the terms of that proclamation, or by any of the Acts of Congress. Eor these and other reasons it is thought best that support of these measures, shall be included in the oath; and it is believed the Executive may lawfully claim it in return for pardon and restoration of forfeited rights, which he has clear constitutional power to withhold altogether, or grant upon the terms which he shall deem wisest for the public interest. It should be observed, also, that this part of the oath is subject to the modifying and abrogating power of legislation and supreme judicial decision.

The proposed acquiescence of the national Executive in any reasonable temporary State arrangement for the freed people is made with the view of possibly modifying the confusion and destitution which must, at best, attend all classes by a total revolution of labour throughout whole States. It is hoped that the already deeply afflicted people in those States may be somewhat more ready to give up the cause of their affliction, if, to this extent, this vital matter be left to themselves; while no power of the national Executive to prevent an abuse is abridged by the proposition.

The suggestion in the proclamation as to maintaining the political framework of the State on what is called reconstruction, is mnde in the hope that it may do good without danger of harm. It will save labour, and avoid great confusion.

But why any proclamation now upon this subject P This question is beset with the conflicting views that the step might be delayed too long, or be taken too soon. In some States the elements for resumption seem ready for action, but remain inactive, apparently for want of a rallying point—a plan of action. Why shall A adopt the plan of B, rather than B that of A? And if A and B should agree, how can they know but that the General Government here will reject their plan? By the proclamation a plan is presented which may be accepted by them as a rallying point, and which they are assured in advance will not be rejected here. This may bring them to act sooner than they otherwise would

The objections to a premature presentation of a plan by the national Executive consists in the danger of committals on points which could be more safely left to further development, Care has been taken to so shape the document as to avoid embarrassments from this source. Saying that, on certain terms, certain classes will be pardoned, with rights restored, it is not said that other classes, or other terms, will never be included. Saying that reconstruction

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