Chapter 16

In the month of May last I communicated information to Congress that an Indian war had broken out in Oregon, and recommended that authority be given to raise an adequate number of volunteers to proceed without delay to the assistance of our fellow-citizens in that Territory. The authority to raise such a force not having been granted by Congress, as soon as their services could be dispensed with in Mexico orders were issued to the regiment of mounted riflemen to proceed to Jefferson Barracks, in Missouri, and to prepare to march to Oregon as soon as the necessary provision could be made. Shortly before it was ready to march it was arrested by the provision of the act passed by Congress on the last day of the last session, which directed that all the noncommissioned officers, musicians, and privates of that regiment who had been in service in Mexico should, upon their application, be entitled to be discharged. The effect of this provision was to disband the rank and file of the regiment, and before their places could be filled by recruits the season had so far advanced that it was impracticable for it to proceed until the opening of the next spring.

In the month of October last the accompanying communication was received from the governor of the temporary government of Oregon, giving information of the continuance of the Indian disturbances and of the destitution and defenseless condition of the inhabitants. Orders were immediately transmitted to the commander of our squadron in the Pacific to dispatch to their assistance a part of the naval forces on that station, to furnish them with arms and ammunition, and to continue to give them such aid and protection as the Navy could afford until the Army could reach the country.

It is the policy of humanity, and one which has always been pursued by the United States, to cultivate the good will of the aboriginal tribes of this continent and to restrain them from making war and indulging in excesses by mild means rather than by force. That this could have been done with the tribes in Oregon had that Territory been brought under the government of our laws at an earlier period, and had other suitable measures been adopted by Congress, such as now exist in our intercourse with the other Indian tribes within our limits, can not be doubted. Indeed, the immediate and only cause of the existing hostility of the Indians of Oregon is represented to have been the long delay of the United States in making to them some trifling compensation, in such articles as they wanted, for the country now occupied by our emigrants, which the Indians claimed and over which they formerly roamed. This compensation had been promised to them by the temporary government established in Oregon, but its fulfillment had been postponed from time to time for nearly two years, whilst those who made it had been anxiously waiting for Congress to establish a Territorial government over the country. The Indians became at length distrustful of their good faith and sought redress by plunder and massacre, which finally led to the present difficulties. A few thousand dollars in suitable presents, as a compensation for the country which had been taken possession of by our citizens, would have satisfied the Indians and have prevented the war. A small amount properly distributed, it is confidently believed, would soon restore quiet. In this Indian war our fellow-citizens of Oregon have been compelled to take the field in their own defense, have performed valuable military services, and been subjected to expenses which have fallen heavily upon them. Justice demands that provision should be made by Congress to compensate them for their services and to refund to them the necessary expenses which they have incurred.

I repeat the recommendation heretofore made to Congress, that provision be made for the appointment of a suitable number of Indian agents to reside among the tribes of Oregon, and that a small sum be appropriated to enable these agents to cultivate friendly relations with them. If this be done, the presence of a small military force will be all that is necessary to keep them in check and preserve peace. I recommend that similar provisions be made as regards the tribes inhabiting northern Texas, New Mexico, California, and the extensive region lying between our settlements in Missouri and these possessions, as the most effective means of preserving peace upon our borders and within the recently acquired territories.

The Secretary of the Treasury will present in his annual report a highly satisfactory statement of the condition of the finances.

The imports for the fiscal year ending on the 30th of June last were of the value of $154,977,876, of which the amount exported was $21,128,010, leaving $133,849,866 in the country for domestic use. The value of the exports for the same period was $154,032,131, consisting of domestic productions amounting to $132,904,121 and $21,128,010 of foreign articles. The receipts into the Treasury for the same period, exclusive of loans, amounted to $35,436,750.59, of which there was derived from customs $31,757,070.96, from sales of public lands $3,328,642.56, and from miscellaneous and incidental sources $351,037.07.

It will be perceived that the revenue from customs for the last fiscal year exceeded by $757,070.96 the estimate of the Secretary of the Treasury in his last annual report, and that the aggregate receipts during the same period from customs, lands, and miscellaneous sources also exceeded the estimate by the sum of $536,750.59, indicating, however, a very near approach in the estimate to the actual result.

The expenditures during the fiscal year ending on the 30th of June last, including those for the war and exclusive of payments of principal and interest for the public debt, were $42,811,970.03.

It is estimated that the receipts into the Treasury for the fiscal year ending on the 30th of June, 1849, including the balance in the Treasury on the 1st of July last, will amount to the sum of $57,048,969.90, of which $32,000,000, it is estimated, will be derived from customs, $3,000,000 from the sales of the public lands, and $1,200,000 from miscellaneous and incidental sources, including the premium upon the loan, and the amount paid and to be paid into the Treasury on account of military contributions in Mexico, and the sales of arms and vessels and other public property rendered unnecessary for the use of the Government by the termination of the war, and $20,695,435.30 from loans already negotiated, including Treasury notes funded, which, together with the balance in the Treasury on the 1st of July last, make the sum estimated.

The expenditures for the same period, including the necessary payment on account of the principal and interest of the public debt, and the principal and interest of the first installment due to Mexico on the 30th of May next, and other expenditures growing out of the war to be paid during the present year, will amount, including the reimbursement of Treasury notes, to the sum of $54,195,275.06, leaving an estimated balance in the Treasury on the 1st of July, 1849, of $2,853,694.84.

The Secretary of the Treasury will present, as required by law, the estimate of the receipts and expenditures for the next fiscal year. The expenditures as estimated for that year are $33,213,152.73, including $3,799,102.18 for the interest on the public debt and $3,540,000 for the principal and interest due to Mexico on the 30th of May, 1850, leaving the sum of $25,874,050.35, which, it is believed, will be ample for the ordinary peace expenditures.

The operations of the tariff act of 1846 have been such during the past year as fully to meet the public expectation and to confirm the opinion heretofore expressed of the wisdom of the change in our revenue system which was effected by it. The receipts under it into the Treasury for the first fiscal year after its enactment exceeded by the sum of $5,044,403.09 the amount collected during the last fiscal year under the tariff act of 1842, ending the 30th of June, 1846. The total revenue realized from the commencement of its operation, on the 1st of December, 1846, until the close of the last quarter, on the 30th of September last, being twenty-two months, was $56,654,563.79, being a much larger sum than was ever before received from duties during any equal period under the tariff acts of 1824, 1828, 1832, and 1842. Whilst by the repeal of highly protective and prohibitory duties the revenue has been increased, the taxes on the people have been diminished. They have been relieved from the heavy amounts with which they were burthened under former laws in the form of increased prices or bounties paid to favored classes and pursuits.

The predictions which were made that the tariff act of 1846 would reduce the amount of revenue below that collected under the act of 1842, and would prostrate the business and destroy the prosperity of the country, have not been verified. With an increased and increasing revenue, the finances are in a highly flourishing condition. Agriculture, commerce, and navigation are prosperous; the prices of manufactured fabrics and of other products are much less injuriously affected than was to have been anticipated from the unprecedented revulsions which during the last and the present year have overwhelmed the industry and paralyzed the credit and commerce of so many great and enlightened nations of Europe.

Severe commercial revulsions abroad have always heretofore operated to depress and often to affect disastrously almost every branch of American industry. The temporary depression of a portion of our manufacturing interests is the effect of foreign causes, and is far less severe than has prevailed on all former similar occasions.

It is believed that, looking to the great aggregate of all our interests, the whole country was never more prosperous than at the present period, and never more rapidly advancing in wealth and population. Neither the foreign war in which we have been involved, nor the loans which have absorbed so large a portion of our capital, nor the commercial revulsion in Great Britain in 1847, nor the paralysis of credit and commerce throughout Europe in 1848, have affected injuriously to any considerable extent any of the great interests of the country or arrested our onward march to greatness, wealth, and power.

Had the disturbances in Europe not occurred, our commerce would undoubtedly have been still more extended, and would have added still more to the national wealth and public prosperity. But notwithstanding these disturbances, the operations of the revenue system established by the tariff act of 1846 have been so generally beneficial to the Government and the business of the country that no change in its provisions is demanded by a wise public policy, and none is recommended.

The operations of the constitutional treasury established by the act of the 6th of August, 1846, in the receipt, custody, and disbursement of the public money have continued to be successful. Under this system the public finances have been carried through a foreign war, involving the necessity of loans and extraordinary expenditures and requiring distant transfers and disbursements, without embarrassment, and no loss has occurred of any of the public money deposited under its provisions. Whilst it has proved to be safe and useful to the Government, its effects have been most beneficial upon the business of the country. It has tended powerfully to secure an exemption from that inflation and fluctuation of the paper currency so injurious to domestic industry and rendering so uncertain the rewards of labor, and, it is believed, has largely contributed to preserve the whole country from a serious commercial revulsion, such as often occurred under the bank deposit system. In the year 1847 there was a revulsion in the business of Great Britain of great extent and intensity, which was followed by failures in that Kingdom unprecedented in number and amount of losses. This is believed to be the first instance when such disastrous bankruptcies, occurring in a country with which we have such extensive commerce, produced little or no injurious effect upon our trade or currency. We remained but little affected in our money market, and our business and industry were still prosperous and progressive.

During the present year nearly the whole continent of Europe has been convulsed by civil war and revolutions, attended by numerous bankruptcies, by an unprecedented fall in their public securities, and an almost universal paralysis of commerce and industry; and yet, although our trade and the prices of our products must have been somewhat unfavorably affected by these causes, we have escaped a revulsion, our money market is comparatively easy, and public and private credit have advanced and improved.

It is confidently believed that we have been saved from their effect by the salutary operation of the constitutional treasury. It is certain that if the twenty-four millions of specie imported into the country during the fiscal year ending on the 30th of June, 1847, had gone into the banks, as to a great extent it must have done, it would in the absence of this system have been made the basis of augmented bank paper issues, probably to an amount not less than $60,000,000 or $70,000,000, producing, as an inevitable consequence of an inflated currency, extravagant prices for a time and wild speculation, which must have been followed, on the reflux to Europe the succeeding year of so much of that specie, by the prostration of the business of the country, the suspension of the banks, and most extensive bankruptcies. Occurring, as this would have done, at a period when the country was engaged in a foreign war, when considerable loans of specie were required for distant disbursements, and when the banks, the fiscal agents of the Government and the depositories of its money, were suspended, the public credit must have sunk, and many millions of dollars, as was the case during the War of 1812, must have been sacrificed in discounts upon loans and upon the depreciated paper currency which the Government would have been compelled to use.

Under the operations of the constitutional treasury not a dollar has been lost by the depreciation of the currency. The loans required to prosecute the war with Mexico were negotiated by the Secretary of the Treasury above par, realizing a large premium to the Government. The restraining effect of the system upon the tendencies to excessive paper issues by banks has saved the Government from heavy losses and thousands of our business men from bankruptcy and ruin. The wisdom of the system has been tested by the experience of the last two years, and it is the dictate of sound policy that it should remain undisturbed. The modifications in some of the details of this measure, involving none of its essential principles, heretofore recommended, are again presented for your favorable consideration.

In my message of the 6th of July last, transmitting to Congress the ratified treaty of peace with Mexico, I recommended the adoption of measures for the speedy payment of the public debt. In reiterating that recommendation I refer you to the considerations presented in that message in its support. The public debt, including that authorized to be negotiated in pursuance of existing laws, and including Treasury notes, amounted at that time to $65,778,450.41.

Funded stock of the United States amounting to about half a million of dollars has been purchased, as authorized by law, since that period, and the public debt has thus been reduced, the details of which will be presented in the annual report of the Secretary of the Treasury.

The estimates of expenditures for the next fiscal year, submitted by the Secretary of the Treasury, it is believed will be ample for all necessary purposes. If the appropriations made by Congress shall not exceed the amount estimated, the means in the Treasury will be sufficient to defray all the expenses of the Government, to pay off the next installment of $3,000,000 to Mexico, which will fall due on the 30th of May next, and still a considerable surplus will remain, which should be applied to the further purchase of the public stock and reduction of the debt. Should enlarged appropriations be made, the necessary consequence will be to postpone the payment of the debt. Though our debt, as compared with that of most other nations, is small, it is our true policy, and in harmony with the genius of our institutions, that we should present to the world the rare spectacle of a great Republic, possessing vast resources and wealth, wholly exempt from public indebtedness. This would add still more to our strength, and give to us a still more commanding position among the nations of the earth.

The public expenditures should be economical, and be confined to such necessary objects as are clearly within the powers of Congress. All such as are not absolutely demanded should be postponed, and the payment of the public debt at the earliest practicable period should be a cardinal principle of our public policy.

For the reason assigned in my last annual message, I repeat the recommendation that a branch of the Mint of the United States be established at the city of New York. The importance of this measure is greatly increased by the acquisition of the rich mines of the precious metals in New Mexico and California, and especially in the latter.

I repeat the recommendation heretofore made in favor of the graduation and reduction of the price of such of the public lands as have been long offered in the market and have remained unsold, and in favor of extending the rights of preemption to actual settlers on the unsurveyed as well as the surveyed lands.

The condition and operations of the Army and the state of other branches of the public service under the supervision of the War Department are satisfactorily presented in the accompanying report of the Secretary of War.

On the return of peace our forces were withdrawn from Mexico, and the volunteers and that portion of the Regular Army engaged for the war were disbanded. Orders have been issued for stationing the forces of our permanent establishment at various positions in our extended country where troops may be required. Owing to the remoteness of some of these positions, the detachments have not yet reached their destination. Notwithstanding the extension of the limits of our country and the forces required in the new territories, it is confidently believed that our present military establishment is sufficient for all exigencies so long as our peaceful relations remain undisturbed.

Of the amount of military contributions collected in Mexico, the sum of $769,650 was applied toward the payment of the first installment due under the treaty with Mexico. The further sum of $346,369.30 has been paid into the Treasury, and unexpended balances still remain in the hands of disbursing officers and those who were engaged in the collection of these moneys. After the proclamation of peace no further disbursements were made of any unexpended moneys arising from this source. The balances on hand were directed to be paid into the Treasury, and individual claims on the fund will remain unadjusted until Congress shall authorize their settlement and payment. These claims are not considerable in number or amount.

I recommend to your favorable consideration the suggestions of the Secretary of War and the Secretary of the Navy in regard to legislation on this subject.

Our Indian relations are presented in a most favorable view in the report from the War Department. The wisdom of our policy in regard to the tribes within our limits is clearly manifested by their improved and rapidly improving condition.

A most important treaty with the Menomonies has been recently negotiated by the Commissioner of Indian Affairs in person, by which all their land in the State of Wisconsin--being about 4,000,000 acres--has been ceded to the United States. This treaty will be submitted to the Senate for ratification at an early period of your present session.

Within the last four years eight important treaties have been negotiated with different Indian tribes, and at a cost of $1,842,000; Indian lands to the amount of more than 18,500,000 acres have been ceded to the United States, and provision has been made for settling in the country west of the Mississippi the tribes which occupied this large extent of the public domain. The title to all the Indian lands within the several States of our Union, with the exception of a few small reservations, is now extinguished, and a vast region opened for settlement and cultivation.

The accompanying report of the Secretary of the Navy gives a satisfactory exhibit of the operations and condition of that branch of the public service.

A number of small vessels, suitable for entering the mouths of rivers, were judiciously purchased during the war, and gave great efficiency to the squadron in the Gulf of Mexico. On the return of peace, when no longer valuable for naval purposes, and liable to constant deterioration, they were sold and the money placed in the Treasury.

The number of men in the naval service authorized by law during the war has been reduced by discharges below the maximum fixed for the peace establishment. Adequate squadrons are maintained in the several quarters of the globe where experience has shown their services may be most usefully employed, and the naval service was never in a condition of higher discipline or greater efficiency.

I invite attention to the recommendation of the Secretary of the Navy on the subject of the Marine Corps. The reduction of the Corps at the end of the war required that four officers of each of the three lower grades should be dropped from the rolls. A board of officers made the selection, and those designated were necessarily dismissed, but without any alleged fault. I concur in opinion with the Secretary that the service would be improved by reducing the number of landsmen and increasing the marines. Such a measure would justify an increase of the number of officers to the extent of the reduction by dismissal, and still the Corps would have fewer officers than a corresponding number of men in the Army.

The contracts for the transportation of the mail in steamships, convertible into war steamers, promise to realize all the benefits to our commerce and to the Navy which were anticipated. The first steamer thus secured to the Government was launched in January, 1847. There are now seven, and in another year there will probably be not less than seventeen afloat. While this great national advantage is secured, our social and commercial intercourse is increased and promoted with Germany, Great Britain, and other parts of Europe, with all the countries on the west coast of our continent, especially with Oregon and California, and between the northern and southern sections of the United States. Considerable revenue may be expected from postages, but the connected line from New York to Chagres, and thence across the Isthmus to Oregon, can not fail to exert a beneficial influence, not now to be estimated, on the interests of the manufactures, commerce, navigation, and currency of the United States. As an important part of the system, I recommend to your favorable consideration the establishment of the proposed line of steamers between New Orleans and Vera Cruz. It promises the most happy results in cementing friendship between the two Republics and extending reciprocal benefits to the trade and manufactures of both.

The report of the Postmaster-General will make known to you the operations of that Department for the past year.