Speech Transcript:

Fellow-Citizens of the Senate and House of Representatives:

In obedience to the command of the Constitution, it has now become my
duty "to give to Congress information of the state of the Union and
recommend to their consideration such measures" as I judge to be
"necessary and expedient."

But first and above all, our thanks are due to Almighty God for the
numerous benefits which He has bestowed upon this people, and our
united prayers ought to ascend to Him that He would continue to bless
our great Republic in time to come as He has blessed it in time past.
Since the adjournment of the last Congress our constituents have
enjoyed an unusual degree of health. The earth has yielded her fruits
abundantly and has bountifully rewarded the toil of the husbandman.
Our great staples have commanded high prices, and up till within a
brief period our manufacturing, mineral, and mechanical occupations
have largely partaken of the general prosperity. We have possessed
all the elements of material wealth in rich abundance, and yet,
notwithstanding all these advantages, our country in its monetary
interests is at the present moment in a deplorable condition. In the
midst of unsurpassed plenty in all the productions of agriculture and
in all the elements of national wealth, we find our manufactures
suspended, our public works retarded, our private enterprises of
different kinds abandoned, and thousands of useful laborers thrown
out of employment and reduced to want. The revenue of the Government,
which is chiefly derived from duties on imports from abroad, has been
greatly reduced, whilst the appropriations made by Congress at its
last session for the current fiscal year are very large in amount.

Under these circumstances a loan may be required before the close of
your present session; but this, although deeply to be regretted,
would prove to be only a slight misfortune when compared with the
suffering and distress prevailing among the people. With this the
Government can not fail deeply to sympathize, though it may be
without the power to extend relief.

It is our duty to inquire what has produced such unfortunate results
and whether their recurrence can be prevented. In all former
revulsions the blame might have been fairly attributed to a variety
of cooperating causes, but not so upon the present occasion. It is
apparent that our existing misfortunes have proceeded solely from our
extravagant and vicious system of paper currency and bank credits,
exciting the people to wild speculations and gambling in stocks.
These revulsions must continue to recur at successive intervals so
long as the amount of the paper currency and bank loans and discounts
of the country shall be left to the discretion of 1,400 irresponsible
banking institutions, which from the very law of their nature will
consult the interest of their stockholders rather than the public
welfare.

The framers of the Constitution, when they gave to Congress the power
"to coin money and to regulate the value thereof" and prohibited the
States from coining money, emitting bills of credit, or making
anything but gold and silver coin a tender in payment of debts,
supposed they had protected the people against the evils of an
excessive and irredeemable paper currency. They are not responsible
for the existing anomaly that a Government endowed with the sovereign
attribute of coining money and regulating the value thereof should
have no power to prevent others from driving this coin out of the
country and filling up the channels of circulation with paper which
does not represent gold and silver.

It is one of the highest and most responsible duties of Government to
insure to the people a sound circulating medium, the amount of which
ought to be adapted with the utmost possible wisdom and skill to the
wants of internal trade and foreign exchanges. If this be either
greatly above or greatly below the proper standard, the marketable
value of every man's property is increased or diminished in the same
proportion, and injustice to individuals as well as incalculable
evils to the community are the consequence.

Unfortunately, under the construction of the Federal Constitution
which has now prevailed too long to be changed this important and
delicate duty has been dissevered from the coining power and
virtually transferred to more than 1,400 State banks acting
independently of each other and regulating their paper issues almost
exclusively by a regard to the present interest of their
stockholders. Exercising the sovereign power of providing a paper
currency instead of coin for the country, the first duty which these
banks owe to the public is to keep in their vaults a sufficient
amount of gold and silver to insure the convertibility of their notes
into coin at all times and under all circumstances. No bank ought ever
to be chartered without such restrictions on its business as to secure
this result. All other restrictions are comparatively vain. This is
the only true touchstone, the only efficient regulator of a paper
currency--the only one which can guard the public against overissues
and bank suspensions. As a collateral and eventual security, it is
doubtless wise, and in all cases ought to be required, that banks
shall hold an amount of United States or State securities equal to
their notes in circulation and pledged for their redemption. This,
however, furnishes no adequate security against overissue. On the
contrary, it may be perverted to inflate the currency. Indeed, it is
possible by this means to convert all the debts of the United States
and State Governments into bank notes, without reference to the
specie required to redeem them. However valuable these securities may
be in themselves, they can not be converted into gold and silver at
the moment of pressure, as our experience teaches, in sufficient time
to prevent bank suspensions and the depreciation of bank notes. In
England, which is to a considerable extent a paper-money country,
though vastly behind our own in this respect, it was deemed
advisable, anterior to the act of Parliament of 1844, which wisely
separated the issue of notes from the banking department, for the
Bank of England always to keep on hand gold and silver equal to
one-third of its combined circulation and deposits. If this
proportion was no more than sufficient to secure the convertibility
of its notes with the whole of Great Britain and to some extent the
continent of Europe as a field for its circulation, rendering it
almost impossible that a sudden and immediate run to a dangerous
amount should be made upon it, the same proportion would certainly be
insufficient under our banking system. Each of our 1,400 banks has but
a limited circumference for its circulation, and in the course of a
very few days the depositors and note holders might demand from such
a bank a sufficient amount in specie to compel it to suspend, even
although it had coin in its vaults equal to one-third of its
immediate liabilities. And yet I am not aware, with the exception of
the banks of Louisiana, that any State bank throughout the Union has
been required by its charter to keep this or any other proportion of
gold and silver compared with the amount of its combined circulation
and deposits. What has been the consequence? In a recent report made
by the Treasury Department on the condition of the banks throughout
the different States, according to returns dated nearest to January,
1857, the aggregate amount of actual specie in their vaults is
$58,349,838, of their circulation $214,778,822, and of their deposits
$230,351,352. Thus it appears that these banks in the aggregate have
considerably less than one dollar in seven of gold and silver
compared with their circulation and deposits. It was palpable,
therefore, that the very first pressure must drive them to suspension
and deprive the people of a convertible currency, with all its
disastrous consequences. It is truly wonderful that they should have
so long continued to preserve their credit when a demand for the
payment of one-seventh of their immediate liabilities would have
driven them into insolvency. And this is the condition of the banks,
notwithstanding that four hundred millions of gold from California
have flowed in upon us within the last eight years, and the tide
still continues to flow. Indeed, such has been the extravagance of
bank credits that the banks now hold a considerably less amount of
specie, either in proportion to their capital or to their circulation
and deposits combined, than they did before the discovery of gold in
California. Whilst in the year 1848 their specie in proportion to
their capital was more than equal to one dollar for four and a half,
in 1857 it does not amount to one dollar for every six dollars and
thirty-three cents of their capital. In the year 1848 the specie was
equal within a very small fraction to one dollar in five of their
circulation and deposits; in 1857 it is not equal to one dollar in
seven and a half of their circulation and deposits.

From this statement it is easy to account for our financial history
for the last forty years. It has been a history of extravagant
expansions in the business of the country, followed by ruinous
contractions. At successive intervals the best and most enterprising
men have been tempted to their ruin by excessive bank loans of mere
paper credit, exciting them to extravagant importations of foreign
goods, wild speculations, and ruinous and demoralizing stock
gambling. When the crisis arrives, as arrive it must, the banks can
extend no relief to the people. In a vain struggle to redeem their
liabilities in specie they are compelled to contract their loans and
their issues, and at last, in the hour of distress, when their
assistance is most needed, they and their debtors together sink into
insolvency.

It is this paper system of extravagant expansion, raising the nominal
price of every article far beyond its real value when compared with
the cost of similar articles in countries whose circulation is wisely
regulated, which has prevented us from competing in our own markets
with foreign manufacturers, has produced extravagant importations,
and has counteracted the effect of the large incidental protection
afforded to our domestic manufactures by the present revenue tariff.
But for this the branches of our manufactures composed of raw
materials, the production of our own country--such as cotton, iron,
and woolen fabrics--would not only have acquired almost exclusive
possession of the home market, but would have created for themselves
a foreign market throughout the world.

Deplorable, however, as may be our present financial condition, we
may yet indulge in bright hopes for the future. No other nation has
ever existed which could have endured such violent expansions and
contractions of paper credits without lasting injury; yet the
buoyancy of youth, the energies of our population, and the spirit
which never quails before difficulties will enable us soon to recover
from our present financial embarrassments, and may even occasion us
speedily to forget the lesson which they have taught. In the meantime
it is the duty of the Government, by all proper means within its
power, to aid in alleviating the sufferings of the people occasioned
by the suspension of the banks and to provide against a recurrence of
the same calamity. Unfortunately, in either aspect of the case it can
do but little. Thanks to the independent treasury, the Government has
not suspended payment, as it was compelled to do by the failure of the
banks in 1837. It will continue to discharge its liabilities to the
people in gold and silver. Its disbursements in coin will pass into
circulation and materially assist in restoring a sound currency. From
its high credit, should we be compelled to make a temporary loan, it
can be effected on advantageous terms. This, however, shall if
possible be avoided, but if not, then the amount shall be limited to
the lowest practicable sum.

I have therefore determined that whilst no useful Government works
already in progress shall be suspended, new works not already
commenced will be postponed if this can be done without injury to the
country. Those necessary for its defense shall proceed as though there
had been no crisis in our monetary affairs.

But the Federal Government can not do much to provide against a
recurrence of existing evils. Even if insurmountable constitutional
objections did not exist against the creation of a national bank,
this would furnish no adequate preventive security. The history of
the last Bank of the United States abundantly proves the truth of
this assertion. Such a bank could not, if it would, regulate the
issues and credits of 1,400 State banks in such a manner as to
prevent the ruinous expansions and contractions in our currency which
afflicted the country throughout the existence of the late bank, or
secure us against future suspensions. In 1825 an effort was made by
the Bank of England to curtail the issues of the country banks under
the most favorable circumstances. The paper currency had been
expanded to a ruinous extent, and the bank put forth all its power to
contract it in order to reduce prices and restore the equilibrium of
the foreign exchanges. It accordingly commenced a system of
curtailment of its loans and issues, in the vain hope that the joint
stock and private banks of the Kingdom would be compelled to follow
its example. It found, however, that as it contracted they expanded,
and at the end of the process, to employ the language of a very high
official authority, "whatever reduction of the paper circulation was
effected by the Bank of England (in 1825) was more than made up by
the issues of the country banks."

But a bank of the United States would not, if it could, restrain the
issues and loans of the State banks, because its duty as a regulator
of the currency must often be in direct conflict with the immediate
interest of its stockholders. If we expect one agent to restrain or
control another, their interests must, at least in some degree, be
antagonistic. But the directors of a bank of the United States would
feel the same interest and the same inclination with the directors of
the State banks to expand the currency, to accommodate their favorites
and friends with loans, and to declare large dividends. Such has been
our experience in regard to the last bank.

After all, we must mainly rely upon the patriotism and wisdom of the
States for the prevention and redress of the evil. If they will
afford us a real specie basis for our paper circulation by increasing
the denomination of bank notes, first to twenty and afterwards to
fifty dollars; if they will require that the banks shall at all times
keep on hand at least one dollar of gold and silver for every three
dollars of their circulation and deposits, and if they will provide
by a self-executing enactment, which nothing can arrest, that the
moment they suspend they shall go into liquidation, I believe that
such provisions, with a weekly publication by each bank of a
statement of its condition, would go far to secure us against future
suspensions of specie payments.

Congress, in my opinion, possess the power to pass a uniform bankrupt
law applicable to all banking institutions throughout the United
States, and I strongly recommend its exercise. This would make it the
irreversible organic law of each bank's existence that a suspension of
specie payments shall produce its civil death. The instinct of
self-preservation would then compel it to perform its duties in such
a manner as to escape the penalty and preserve its life.

The existence of banks and the circulation of bank paper are so
identified with the habits of our people that they can not at this
day be suddenly abolished without much immediate injury to the
country. If we could confine them to their appropriate sphere and
prevent them from administering to the spirit of wild and reckless
speculation by extravagant loans and issues, they might be continued
with advantage to the public.

But this I say, after long and much reflection: If experience shall
prove it to be impossible to enjoy the facilities which
well-regulated banks might afford without at the same time suffering
the calamities which the excesses of the banks have hitherto
inflicted upon the country, it would then be far the lesser evil to
deprive them altogether of the power to issue a paper currency and
confine them to the functions of banks of deposit and discount.

Our relations with foreign governments are upon the whole in a
satisfactory condition.

The diplomatic difficulties which existed between the Government of
the United States and that of Great Britain at the adjournment of the
last Congress have been happily terminated by the appointment of a
British minister to this country, who has been cordially received.
Whilst it is greatly to the interest, as I am convinced it is the
sincere desire, of the Governments and people of the two countries to
be on terms of intimate friendship with each other, it has been our
misfortune almost always to have had some irritating, if not
dangerous, outstanding question with Great Britain.

Since the origin of the Government we have been employed in
negotiating treaties with that power, and afterwards in discussing
their true intent and meaning. In this respect the convention of
April 19, 1850, commonly called the Clayton and Bulwer treaty, has
been the most unfortunate of all, because the two Governments place
directly opposite and contradictory constructions upon its first and
most important article. Whilst in the United States we believed that
this treaty would place both powers upon an exact equality by the
stipulation that neither will ever "occupy, or fortify, or colonize,
or assume, or exercise any dominion" over any part of Central
America, it is contended by the British Government that the true
construction of this language has left them in the rightful
possession of all that portion of Central America which was in their
occupancy at the date of the treaty; in fact, that the treaty is a
virtual recognition on the part of the United States of the right of
Great Britain, either as owner or protector, to the whole extensive
coast of Central America, sweeping round from the Rio Hondo to the
port and harbor of San Juan de Nicaragua, together with the adjacent
Bay Islands, except the comparatively small portion of this between
the Sarstoon and Cape Honduras. According to their construction, the
treaty does no more than simply prohibit them from extending their
possessions in Central America beyond the present limits. It is not
too much to assert that if in the United States the treaty had been
considered susceptible of such a construction it never would have
been negotiated under the authority of the President, nor would it
have received the approbation of the Senate. The universal conviction
in the United States was that when our Government consented to violate
its traditional and time-honored policy and to stipulate with a
foreign government never to occupy or acquire territory in the
Central American portion of our own continent, the consideration for
this sacrifice was that Great Britain should, in this respect at
least, be placed in the same position with ourselves. Whilst we have
no right to doubt the sincerity of the British Government in their
construction of the treaty, it is at the same time my deliberate
conviction that this construction is in opposition both to its letter
and its spirit.

Under the late Administration negotiations were instituted between
the two Governments for the purpose, if possible, of removing these
difficulties, and a treaty having this laudable object in view was
signed at London on the 17th October, 1856, and was submitted by the
President to the Senate on the following 10th of December. Whether
this treaty, either in its original or amended form, would have
accomplished the object intended without giving birth to new and
embarrassing complications between the two Governments, may perhaps
be well questioned. Certain it is, however, it was rendered much less
objectionable by the different amendments made to it by the Senate.
The treaty as amended was ratified by me on the 12th March, 1857, and
was transmitted to London for ratification by the British Government.
That Government expressed its willingness to concur in all the
amendments made by the Senate with the single exception of the clause
relating to Ruatan and the other islands in the Bay of Honduras. The
article in the original treaty as submitted to the Senate, after
reciting that these islands and their inhabitants "having been, by a
convention bearing date the 27th day of August, 1856, between Her
Britannic Majesty and the Republic of Honduras, constituted and
declared a free territory under the sovereignty of the said Republic
of Honduras," stipulated that "the two contracting parties do hereby
mutually engage to recognize and respect in all future time the
independence and rights of the said free territory as a part of the
Republic of Honduras."

Upon an examination of this convention between Great Britain and
Honduras of the 27th August, 1856, it was found that whilst declaring
the Bay Islands to be "a free territory under the sovereignty of the
Republic of Honduras" it deprived that Republic of rights without
which its sovereignty over them could scarcely be said to exist. It
divided them from the remainder of Honduras and gave to their
inhabitants a separate government of their own, with legislative,
executive, and judicial officers elected by themselves. It deprived
the Government of Honduras of the taxing power in every form and
exempted the people of the islands from the performance of military
duty except for their own exclusive defense. It also prohibited that
Republic from erecting fortifications upon them for their protection,
thus leaving them open to invasion from any quarter; and, finally, it
provided "that slavery shall not at any time hereafter be permitted
to exist therein."

Had Honduras ratified this convention, she would have ratified the
establishment of a state substantially independent within her own
limits, and a state at all times subject to British influence and
control. Moreover, had the United States ratified the treaty with
Great Britain in its original form, we should have been bound "to
recognize and respect in all future time" these stipulations to the
prejudice of Honduras. Being in direct opposition to the spirit and
meaning of the Clayton and Bulwer treaty as understood in the United
States, the Senate rejected the entire clause, and substituted in its
stead a simple recognition of the sovereign right of Honduras to these
islands in the following language: The two contracting parties do
hereby mutually engage to recognize and respect the islands of
Ruatan, Bonaco, Utila, Barbaretta, Helena, and Moral, situate in the
Bay of Honduras and off the coast of the Republic of Honduras, as
under the sovereignty and as part of the said Republic of Honduras.

Great Britain rejected this amendment, assigning as the only reason
that the ratifications of the convention of the 27th August, 1856,
between her and Honduras had not been "exchanged, owing to the
hesitation of that Government." Had this been done, it is stated that
"Her Majesty's Government would have had little difficulty in agreeing
to the modification proposed by the Senate, which then would have had
in effect the same signification as the original wording." Whether
this would have been the effect, whether the mere circumstance of the
exchange of the ratifications of the British convention with Honduras
prior in point of time to the ratification of our treaty with Great
Britain would "in effect" have had "the same signification as the
original wording," and thus have nullified the amendment of the
Senate, may well be doubted. It is, perhaps, fortunate that the
question has never arisen.

The British Government, immediately after rejecting the treaty as
amended, proposed to enter into a new treaty with the United States,
similar in all respects to the treaty which they had just refused to
ratify, if the United States would consent to add to the Senate's
clear and unqualified recognition of the sovereignty of Honduras over
the Bay Islands the following conditional stipulation: Whenever and so
soon as the Republic of Honduras shall have concluded and ratified a
treaty with Great Britain by which Great Britain shall have ceded and
the Republic of Honduras shall have accepted the said islands, subject
to the provisions and conditions contained in such treaty.

This proposition was, of course, rejected. After the Senate had
refused to recognize the British convention with Honduras of the 27th
August, 1856, with full knowledge of its contents, it was impossible
for me, necessarily ignorant of "the provisions and conditions" which
might be contained in a future convention between the same parties, to
sanction them in advance.

The fact is that when two nations like Great Britain and the United
States, mutually desirous, as they are, and I trust ever may be, of
maintaining the most friendly relations with each other, have
unfortunately concluded a treaty which they understand in senses
directly opposite, the wisest course is to abrogate such a treaty by
mutual consent and to commence anew. Had this been done promptly, all
difficulties in Central America would most probably ere this have been
adjusted to the satisfaction of both parties. The time spent in
discussing the meaning of the Clayton and Bulwer treaty would have
been devoted to this praiseworthy purpose, and the task would have
been the more easily accomplished because the interest of the two
countries in Central America is identical, being confined to securing
safe transits over all the routes across the Isthmus.

Whilst entertaining these sentiments, I shall, nevertheless, not
refuse to contribute to any reasonable adjustment of the Central
American questions which is not practically inconsistent with the
American interpretation of the treaty. Overtures for this purpose
have been recently made by the British Government in a friendly
spirit, which I cordially reciprocate, but whether this renewed
effort will result in success I am not yet prepared to express an
opinion. A brief period will determine.

With France our ancient relations of friendship still continue to
exist. The French Government have in several recent instances, which
need not be enumerated, evinced a spirit of good will and kindness
toward our country, which I heartily reciprocate. It is,
notwithstanding, much to be regretted that two nations whose
productions are of such a character as to invite the most extensive
exchanges and freest commercial intercourse should continue to
enforce ancient and obsolete restrictions of trade against each
other. Our commercial treaty with France is in this respect an
exception from our treaties with all other commercial nations. It
jealously levies discriminating duties both on tonnage and on
articles the growth, produce, or manufacture of the one country when
arriving in vessels belonging to the other.

More than forty years ago, on the 3d March, 1815, Congress passed an
act offering to all nations to admit their vessels laden with their
national productions into the ports of the United States upon the
same terms with our own vessels provided they would reciprocate to us
similar advantages. This act confined the reciprocity to the
productions of the respective foreign nations who might enter into
the proposed arrangement with the United States. The act of May 24,
1828, removed this restriction and offered a similar reciprocity to
all such vessels without reference to the origin of their cargoes.
Upon these principles our commercial treaties and arrangements have
been rounded, except with France, and let us hope that this exception
may not long exist.

Our relations with Russia remain, as they have ever been, on the most
friendly footing. The present Emperor, as well as his predecessors,
have never failed when the occasion offered to manifest their good
will to our country, and their friendship has always been highly
appreciated by the Government and people of the United States.

With all other European Governments, except that of Spain, our
relations are as peaceful as we could desire. I regret to say that no
progress whatever has been made since the adjournment of Congress
toward the settlement of any of the numerous claims of our citizens
against the Spanish Government. Besides, the outrage committed on our
flag by the Spanish war frigate Ferrolana on the high seas off the
coast of Cuba in March, 1855, by firing into the American mail
steamer El Dorado and detaining and searching her, remains
unacknowledged and unredressed. The general tone and temper of the
Spanish Government toward that of the United States are much to be
regretted. Our present envoy extraordinary and minister
plenipotentiary to Madrid has asked to be recalled, and it is my
purpose to send out a new minister to Spain with special instructions
on all questions pending between the two Governments, and with a
determination to have them speedily and amicably adjusted if this be
possible. In the meantime, whenever our minister urges the just
claims of our citizens on the notice of the Spanish Government he is
met with the objection that Congress has never made the appropriation
recommended by President Polk in his annual message of December, 1847,
"to be paid to the Spanish Government for the purpose of distribution
among the claimants in the Amistad case." A similar recommendation
was made by my immediate predecessor in his message of December,
1853, and entirely concurring with both in the opinion that this
indemnity is justly due under the treaty with Spain of the 27th of
October, 1795, I earnestly recommend such an appropriation to the
favorable consideration of Congress.

A treaty of friendship and commerce was concluded at Constantinople
on the 13th December, 1856, between the United States and Persia, the
ratifications of which were exchanged at Constantinople on the 13th
June, 1857, and the treaty was proclaimed by the President on the
18th August, 1857. This treaty, it is believed, will prove beneficial
to American commerce. The Shah has manifested an earnest disposition
to cultivate friendly relations with our country, and has expressed a
strong wish that we should be represented at Teheran by a minister
plenipotentiary; and I recommend that an appropriation be made for
this purpose.

Recent occurrences in China have been unfavorable to a revision of
the treaty with that Empire of the 3d July, 1844, with a view to the
security and extension of our commerce. The twenty-fourth article of
this treaty stipulated for a revision of it in case experience should
prove this to be requisite, "in which case the two Governments will,
at the expiration of twelve years from the date of said convention,
treat amicably concerning the same by means of suitable persons
appointed to conduct such negotiations." These twelve years expired
on the 3d July, 1856, but long before that period it was ascertained
that important changes in the treaty were necessary, and several
fruitless attempts were made by the commissioner of the United States
to effect these changes. Another effort was about to be made for the
same purpose by our commissioner in conjunction with the ministers of
England and France, but this was suspended by the occurrence of
hostilities in the Canton River between Great Britain and the Chinese
Empire. These hostilities have necessarily interrupted the trade of
all nations with Canton, which is now in a state of blockade, and
have occasioned a serious loss of life and property. Meanwhile the
insurrection within the Empire against the existing imperial dynasty
still continues, and it is difficult to anticipate what will be the
result.

Under these circumstances I have deemed it advisable to appoint a
distinguished citizen of Pennsylvania envoy extraordinary and
minister plenipotentiary to proceed to China and to avail himself of
any opportunities which may offer to effect changes in the existing
treaty favorable to American commerce. He left the United States for
the place of his destination in July last in the war steamer
Minnesota. Special ministers to China have also been appointed by the
Governments of Great Britain and France.

Whilst our minister has been instructed to occupy a neutral position
in reference to the existing hostilities at Canton, he will cordially
cooperate with the British and French ministers in all peaceful
measures to secure by treaty stipulations those just concessions to
commerce which the nations of the world have a right to expect and
which China can not long be permitted to withhold. From assurances
received I entertain no doubt that the three ministers will act in
harmonious concert to obtain similar commercial treaties for each of
the powers they represent.

We can not fail to feel a deep interest in all that concerns the
welfare of the independent Republics on our own continent, as well as
of the Empire of Brazil.

Our difficulties with New Granada, which a short time since bore so
threatening an aspect, are, it is to be hoped, in a fair train of
settlement in a manner just and honorable to both parties.

The isthmus of Central America, including that of Panama, is the
great highway between the Atlantic and Pacific over which a large
portion of the commerce of the world is destined to pass. The United
States are more deeply interested than any other nation in preserving
the freedom and security of all the communications across this
isthmus. It is our duty, therefore, to take care that they shall not
be interrupted either by invasions from our own country or by wars
between the independent States of Central America. Under our treaty
with New Granada of the 12th December, 1846, we are bound to
guarantee the neutrality of the Isthmus of Panama, through which the
Panama Railroad passes, "as well as the rights of sovereignty and
property which New Granada has and possesses over the said
territory." This obligation is rounded upon equivalents granted by
the treaty to the Government and people of the United States.

Under these circumstances I recommend to Congress the passage of an
act authorizing the President, in case of necessity, to employ the
land and naval forces of the United States to carry into effect this
guaranty of neutrality and protection. I also recommend similar
legislation for the security of any other route across the Isthmus in
which we may acquire an interest by treaty.

With the independent Republics on this continent it is both our duty
and our interest to cultivate the most friendly relations. We can
never feel indifferent to their fate, and must always rejoice in
their prosperity. Unfortunately both for them and for us, our example
and advice have lost much of their influence in consequence of the
lawless expeditions which have been fitted out against some of them
within the limits of our country. Nothing is better calculated to
retard our steady material progress or impair our character as a
nation than the toleration of such enterprises in violation of the
law of nations.

It is one of the first and highest duties of any independent state in
its relations with the members of the great family of nations to
restrain its people from acts of hostile aggression against their
citizens or subjects. The most eminent writers on public law do not
hesitate to denounce such hostile acts as robbery and murder.

Weak and feeble states like those of Central America may not feel
themselves able to assert and vindicate their rights. The case would
be far different if expeditions were set on foot within our own
territories to make private war against a powerful nation. If such
expeditions were fitted out from abroad against any portion of our
own country, to burn down our cities, murder and plunder our people,
and usurp our Government, we should call any power on earth to the
strictest account for not preventing such enormities.

Ever since the Administration of General Washington acts of Congress
have been enforced to punish severely the crime of setting on foot a
military expedition within the limits of the United States to proceed
from thence against a nation or state with whom we are at peace. The
present neutrality act of April 20, 1818, is but little more than a
collection of preexisting laws. Under this act the President is
empowered to employ the land and naval forces and the militia "for
the purpose of preventing the carrying on of any such expedition or
enterprise from the territories and jurisdiction of the United
States," and the collectors of customs are authorized and required to
detain any vessel in port when there is reason to believe she is about
to take part in such lawless enterprises.

When it was first rendered probable that an attempt would be made to
get up another unlawful expedition against Nicaragua, the Secretary
of State issued instructions to the marshals and district attorneys,
which were directed by the Secretaries of War and the Navy to the
appropriate army and navy officers, requiring them to be vigilant and
to use their best exertions in carrying into effect the provisions of
the act of 1818. Notwithstanding these precautions, the expedition
has escaped from our shores. Such enterprises can do no possible good
to the country, but have already inflicted much injury both on its
interests and its character. They have prevented peaceful emigration
from the United States to the States of Central America, which could
not fail to prove highly beneficial to all the parties concerned. In
a pecuniary point of view alone our citizens have sustained heavy
losses from the seizure and closing of the transit route by the San
Juan between the two oceans.

The leader of the recent expedition was arrested at New Orleans, but
was discharged on giving bail for his appearance in the insufficient
sum of $2,000.

I commend the whole subject to the serious attention of Congress,
believing that our duty and our interest, as well as our national
character, require that we should adopt such measures as will be
effectual in restraining our citizens from committing such outrages.

I regret to inform you that the President of Paraguay has refused to
ratify the treaty between the United States and that State as amended
by the Senate, the signature of which was mentioned in the message of
my predecessor to Congress at the opening of its session in December,
1853. The reasons assigned for this refusal will appear in the
correspondence herewith submitted.

It being desirable to ascertain the fitness of the river La Plata and
its tributaries for navigation by steam, the United States steamer
Water Witch was sent thither for that purpose in 1853. This
enterprise was successfully carried on until February, 1855, when,
whilst in the peaceful prosecution of her voyage up the Parana River,
the steamer was fired upon by a Paraguayan fort. The fire was
returned, but as the Water Witch was of small force and not designed
for offensive operations, she retired from the conflict. The pretext
upon which the attack was made was a decree of the President of
Paraguay of October, 1854, prohibiting foreign vessels of war from
navigating the rivers of that State. As Paraguay, however, was the
owner of but one bank of the river of that name, the other belonging
to Corientes, a State of the Argentine Confederation, the right of
its Government to expect that such a decree would be obeyed can not
be acknowledged. But the Water Witch was not, properly speaking, a
vessel of war. She was a small steamer engaged in a scientific
enterprise intended for the advantage of commercial states generally.
Under these circumstances I am constrained to consider the attack upon
her as unjustifiable and as calling for satisfaction from the
Paraguayan Government.

Citizens of the United States also who were established in business
in Paraguay have had their property seized and taken from them, and
have otherwise been treated by the authorities in an insulting and
arbitrary manner, which requires redress.

A demand for these purposes will be made in a firm but conciliatory
spirit. This will the more probably be granted if the Executive shall
have authority to use other means in the event of a refusal. This is
accordingly recommended.

It is unnecessary to state in detail the alarming condition of the
Territory of Kansas at the time of my inauguration. The opposing
parties then stood in hostile array against each other, and any
accident might have relighted the flames of civil war. Besides, at
this critical moment Kansas was left without a governor by the
resignation of Governor Geary.

On the 19th of February previous the Territorial legislature had
passed a law providing for the election of delegates on the third
Monday of June to a convention to meet on the first Monday of
September for the purpose of framing a constitution preparatory to
admission into the Union. This law was in the main fair and just, and
it is to be regretted that all the qualified electors had not
registered themselves and voted under its provisions.

At the time of the election for delegates an extensive organization
existed in the Territory whose avowed object it was, if need be, to
put down the lawful government by force and to establish a government
of their own under the so-called Topeka constitution. The persons
attached to this revolutionary organization abstained from taking any
part in the election.

The act of the Territorial legislature had omitted to provide for
submitting to the people the constitution which might be framed by
the convention, and in the excited state of public feeling throughout
Kansas an apprehension extensively prevailed that a design existed to
force upon them a constitution in relation to slavery against their
will. In this emergency it became my duty, as it was my
unquestionable right, having in view the union of all good citizens
in support of the Territorial laws, to express an opinion on the true
construction of the provisions concerning slavery contained in the
organic act of Congress of the 30th May, 1854. Congress declared it
to be "the true intent and meaning of this act not to legislate
slavery into any Territory or State, nor to exclude it therefrom, but
to leave the people thereof perfectly free to form and regulate their
domestic institutions in their own way." Under it Kansas, "when
admitted as a State," was to "be received into the Union with or
without slavery, as their constitution may prescribe at the time of
their admission."

Did Congress mean by this language that the delegates elected to
frame a constitution should have authority finally to decide the
question of slavery, or did they intend by leaving it to the people
that the people of Kansas themselves should decide this question by a
direct vote? On this subject I confess I had never entertained a
serious doubt, and therefore in my instructions to Governor Walker of
the 28th March last I merely said that when "a constitution shall be
submitted to the people of the Territory they must be protected in
the exercise of their right of voting for or against that instrument,
and the fair expression of the popular will must not be interrupted by
fraud or violence."

In expressing this opinion it was far from my intention to interfere
with the decision of the people of Kansas, either for or against
slavery. From this I have always carefully abstained. Intrusted with
the duty of taking "care that the laws be faithfully executed," my
only desire was that the people of Kansas should furnish to Congress
the evidence required by the organic act, whether for or against
slavery, and in this manner smooth their passage into the Union. In
emerging from the condition of Territorial dependence into that of a
sovereign State it was their duty, in my opinion, to make known their
will by the votes of the majority on the direct question whether this
important domestic institution should or should not continue to
exist. Indeed, this was the only possible mode in which their will
could be authentically ascertained.

The election of delegates to a convention must necessarily take place
in separate districts. From this cause it may readily happen, as has
often been the case, that a majority of the people of a State or
Territory are on one side of a question, whilst a majority of the
representatives from the several districts into which it is divided
may be upon the other side. This arises front the fact that in some
districts delegates may be elected by small majorities, whilst in
others those of different sentiments may receive majorities
sufficiently great not only to overcome the votes given for the
former, but to leave a large majority of the whole people in direct
opposition to a majority of the delegates. Besides, our history
proves that influences may be brought to bear on the representative
sufficiently powerful to induce him to disregard the will of his
constituents. The truth is that no other authentic and satisfactory
mode exists of ascertaining the will of a majority of the people of
any State or Territory on an important and exciting question like
that of slavery in Kansas except by leaving it to a direct vote. How
wise, then, was it for Congress to pass over all subordinate and
intermediate agencies and proceed directly to the source of all
legitimate power under our institutions!

How vain would any other principle prove in practice! This may be
illustrated by the case of Kansas. Should she be admitted into the
Union with a constitution either maintaining or abolishing slavery
against the sentiment of the people, this could have no other effect
than to continue and to exasperate the existing agitation during the
brief period required to make the constitution conform to the
irresistible will of the majority.

The friends and supporters of the Nebraska and Kansas act, when
struggling on a recent occasion to sustain its wise provisions before
the great tribunal of the American people, never differed about its
true meaning on this subject. Everywhere throughout the Union they
publicly pledged their faith and their honor that they would
cheerfully submit the question of slavery to the decision of the bona
fide people of Kansas, without any restriction or qualification
whatever. All were cordially united upon the great doctrine of
popular sovereignty, which is the vital principle of our free
institutions. Had it then been insinuated from any quarter that it
would be a sufficient compliance with the requisitions of the organic
law for the members of a convention thereafter to be elected to
withhold the question of slavery from the people and to substitute
their own will for that of a legally ascertained majority of all
their constituents, this would have been instantly rejected.
Everywhere they remained true to the resolution adopted on a
celebrated occasion recognizing "the right of the people of all the
Territories, including Kansas and Nebraska, acting through the
legally and fairly expressed will of a majority of actual residents,
and whenever the number of their inhabitants justifies it, to form a
constitution with or without slavery and be admitted into the Union
upon terms of perfect equality with the other States."

The convention to frame a constitution for Kansas met on the first
Monday of September last. They were called together by virtue of an
act of the Territorial legislature, whose lawful existence had been
recognized by Congress in different forms and by different
enactments. A large proportion of the citizens of Kansas did not
think proper to register their names and to vote at the election for
delegates; but an opportunity to do this having been fairly afforded,
their refusal to avail themselves of their right could in no manner
affect the legality of the convention. This convention proceeded to
frame a constitution for Kansas, and finally adjourned on the 7th day
of November. But little difficulty occurred in the convention except
on the subject of slavery. The truth is that the general provisions
of our recent State constitutions are so similar and, I may add, so
excellent that the difference between them is not essential. Under
the earlier practice of the Government no constitution framed by the
convention of a Territory preparatory to its admission into the Union
as a State had been submitted to the people. I trust, however, the
example set by the last Congress, requiring that the constitution of
Minnesota "should be subject to the approval and ratification of the
people of the proposed State," may be followed on future occasions. I
took it for granted that the convention of Kansas would act in
accordance with this example, rounded, as it is, on correct
principles, and hence my instructions to Governor Walker in favor of
submitting the constitution to the people were expressed in general
and unqualified terms.

In the Kansas-Nebraska act, however, this requirement, as applicable
to the whole constitution, had not been inserted, and the convention
were not bound by its terms to submit any other portion of the
instrument to an election except that which relates to the "domestic
institution" of slavery. This will be rendered clear by a simple
reference to its language. It was "not to legislate slavery into any
Territory or State, nor to exclude it therefrom, but to leave the
people thereof perfectly free to form and regulate their domestic
institutions in their own way." According to the plain construction
of the sentence, the words "domestic institutions" have a direct, as
they have an appropriate, reference to slavery. "Domestic
institutions" are limited to the family. The relation between master
and slave and a few others are "domestic institutions," and are
entirely distinct from institutions of a political character.
Besides, there was no question then before Congress, nor, indeed, has
there since been any serious question before the people of Kansas or
the country, except that which relates to the "domestic institution"
of slavery. The convention, after an angry and excited debate,
finally determined, by a majority of only two, to submit the question
of slavery to the people, though at the last forty-three of the fifty
delegates present affixed their signatures to the constitution.

A large majority of the convention were in favor of establishing
slavery in Kansas. They accordingly inserted an article in the
constitution for this purpose similar in form to those which had been
adopted by other Territorial conventions. In the schedule, however,
providing for the transition from a Territorial to a State government
the question has been fairly and explicitly referred to the people
whether they will have a constitution "with or without slavery." It
declares that before the constitution adopted by the convention
"shall be sent to Congress for admission into the Union as a State"
an election shall be held to decide this question, at which all the
white male inhabitants of the Territory above the age of 21 are
entitled to vote. They are to vote by ballot, and "the ballots cast
at said election shall be indorsed 'constitution with slavery' and
'constitution with no slavery.'" If there be a majority in favor of
the "constitution with slavery," then it is to be transmitted to
Congress by the president of the convention in its original form; if,
on the contrary, there shall be a majority in favor of the
"constitution with no slavery," "then the article providing for
slavery shall be stricken from the constitution by the president of
this convention;" and it is expressly declared that "no slavery shall
exist in the State of Kansas, except that the right of property in
slaves now in the Territory shall in no manner be interfered with;"
and in that event it is made his duty to have the constitution thus
ratified transmitted to the Congress of the United States for the
admission of the State into the Union.

At this election every citizen will have an opportunity of expressing
his opinion by his vote "whether Kansas shall be received into the
Union with or without slavery," and thus this exciting question may
be peacefully settled in the very mode required by the organic law.
The election will be held under legitimate authority, and if any
portion of the inhabitants shall refuse to vote, a fair opportunity
to do so having been presented, this will be their own voluntary act
and they alone will be responsible for the consequences.

Whether Kansas shall be a free or a slave State must eventually,
under some authority, be decided by an election; and the question can
never be more clearly or distinctly presented to the people than it is
at the present moment. Should this opportunity be rejected she may be
involved for years in domestic discord, and possibly in civil war,
before she can again make up the issue now so fortunately tendered
and again reach the point she has already attained.

Kansas has for some years occupied too much of the public attention.
It is high time this should be directed to far more important
objects. When once admitted into the Union, whether with or without
slavery, the excitement beyond her own limits will speedily pass
away, and she will then for the first time be left, as she ought to
have been long since, to manage her own affairs in her own way. If
her constitution on the subject of slavery or on any other subject be
displeasing to a majority of the people, no human power can prevent
them from changing it within a brief period. Under these
circumstances it may well be questioned whether the peace and quiet
of the whole country are not of greater importance than the mere
temporary triumph of either of the political parties in Kansas.

Should the constitution without slavery be adopted by the votes of
the majority, the rights of property in slaves now in the Territory
are reserved. The number of these is very small, but if it were
greater the provision would be equally just and reasonable. The
slaves were brought into the Territory under the Constitution of the
United States and are now the property of their masters. This point
has at length been finally decided by the highest judicial tribunal
of the country, and this upon the plain principle that when a
confederacy of sovereign States acquire a new territory at their
joint expense both equality and justice demand that the citizens of
one and all of them shall have the right to take into it whatsoever
is recognized as property by the common Constitution. To have
summarily confiscated the property in slaves already in the Territory
would have been an act of gross injustice and contrary to the practice
of the older States of the Union which have abolished slavery.

A Territorial government was established for Utah by act of Congress
approved the 9th September, 1850, and the Constitution and laws of
the United States were thereby extended over it "so far as the same
or any provisions thereof may be applicable." This act provided for
the appointment by the President, by and with the advice and consent
of the Senate, of a governor (who was to be ex officio superintendent
of Indian affairs), a secretary, three judges of the supreme court, a
marshal, and a district attorney. Subsequent acts provided for the
appointment of the officers necessary to extend our land and our
Indian system over the Territory. Brigham Young was appointed the
first governor on the 20th September, 1850, and has held the office
ever since. Whilst Governor Young has been both governor and
superintendent of Indian affairs throughout this period, he has been
at the same time the head of the church called the Latter-day Saints,
and professes to govern its members and dispose of their property by
direct inspiration and authority from the Almighty. His power has
been, therefore, absolute over both church and state.

The people of Utah almost exclusively belong to this church, and
believing with a fanatical spirit that he is governor of the
Territory by divine appointment, they obey his commands as if these
were direct revelations from Heaven. If, therefore, he chooses that
his government shall come into collision with the Government of the
United States, the members of the Mormon Church will yield implicit
obedience to his will. Unfortunately, existing facts leave but little
doubt that such is his determination. Without entering upon a minute
history of occurrences, it is sufficient to say that all the officers
of the United States, judicial and executive, with the single
exception of two Indian agents, have found it necessary for their own
personal safety to withdraw from the Territory, and there no longer
remains any government in Utah but the despotism of Brigham Young.
This being the condition of affairs in the Territory, I could not
mistake the path of duty. As Chief Executive Magistrate I was bound
to restore the supremacy of the Constitution and laws within its
limits. In order to effect this purpose, I appointed a new governor
and other Federal officers for Utah and sent with them a military
force for their protection and to aid as a posse comitatus in case of
need in the execution of the laws.

With the religious opinions of the Mormons, as long as they remained
mere opinions, however deplorable in themselves and revolting to the
moral and religious sentiments of all Christendom, I had no right to
interfere. Actions alone, when in violation of the Constitution and
laws of the United States, become the legitimate subjects for the
jurisdiction of the civil magistrate. My instructions to Governor
Cumming have therefore been framed in strict accordance with these
principles. At their date a hope was indulged that no necessity might
exist for employing the military in restoring and maintaining the
authority of the law, but this hope has now vanished. Governor Young
has by proclamation declared his determination to maintain his power
by force, and has already committed acts of hostility against the
United States. Unless he should retrace his steps the Territory of
Utah will be in a state of open rebellion. He has committed these
acts of hostility notwithstanding Major Van Vliet, an officer of the
Army, sent to Utah by the Commanding General to purchase provisions
for the troops, had given him the strongest assurances of the
peaceful intentions of the Government, and that the troops would only
be employed as a posse comitatus when called on by the civil authority
to aid in the execution of the laws.

There is reason to believe that Governor Young has long contemplated
this result. He knows that the continuance of his despotic power
depends upon the exclusion of all settlers from the Territory except
those who will acknowledge his divine mission and implicitly obey his
will, and that an enlightened public opinion there would soon
prostrate institutions at war with the laws both of God and man. "He
has therefore for several years, in order to maintain his
independence, been industriously employed in collecting and
fabricating arms and munitions of war and in disciplining the Mormons
for military service." As superintendent of Indian affairs he has had
an opportunity of tampering with the Indian tribes and exciting their
hostile feelings against the United States. This, according to our
information, he has accomplished in regard to some of these tribes,
while others have remained true to their allegiance and have
communicated his intrigues to our Indian agents. He has laid in a
store of provisions for three years, which in case of necessity, as
he informed Major Van Vliet, he will conceal, "and then take to the
mountains and bid defiance to all the powers of the Government."

A great part of all this may be idle boasting, but yet no wise
government will lightly estimate the efforts which may be inspired by
such frenzied fanaticism as exists among the Mormons in Utah. This is
the first rebellion which has existed in our Territories, and
humanity itself requires that we should put it down in such a manner
that it shall be the last. To trifle with it would be to encourage it
and to render it formidable. We ought to go there with such an
imposing force as to convince these deluded people that resistance
would be vain, and thus spare the effusion of blood. We can in this
manner best convince them that we are their friends, not their
enemies. In order to accomplish this object it will be necessary,
according to the estimate of the War Department, to raise four
additional regiments; and this I earnestly recommend to Congress. At
the present moment of depression in the revenues of the country I am
sorry to be obliged to recommend such a measure; but I feel confident
of the support of Congress, cost what it may, in suppressing the
insurrection and in restoring and maintaining the sovereignty of the
Constitution and laws over the Territory of Utah.

I recommend to Congress the establishment of a Territorial government
over Arizona, incorporating with it such portions of New Mexico as
they may deem expedient. I need scarcely adduce arguments in support
of this recommendation. We are bound to protect the lives and the
property of our citizens inhabiting Arizona, and these are now
without any efficient protection. Their present number is already
considerable, and is rapidly increasing, notwithstanding the
disadvantages under which they labor. Besides, the proposed Territory
is believed to be rich in mineral and agricultural resources,
especially in silver and copper. The mails of the United States to
California are now carried over it throughout its whole extent, and
this route is known to be the nearest and believed to be the best to
the Pacific.

Long experience has deeply convinced me that a strict construction of
the powers granted to Congress is the only true, as well as the only
safe, theory of the Constitution. Whilst this principle shall guide
my public conduct, I consider it clear that under the war-making
power Congress may appropriate money for the Construction of a
military road through the Territories of the United States when this
is absolutely necessary for the defense of any of the States against
foreign invasion. The Constitution has conferred upon Congress power
"to declare war," "to raise and support armies," "to provide and
maintain a navy," and to call forth the militia to "repel invasions."
These high sovereign powers necessarily involve important and
responsible public duties, and among them there is none so sacred and
so imperative as that of preserving our soil from the invasion of a
foreign enemy. The Constitution has therefore left nothing on this
point to construction, but expressly requires that "the United States
shall protect each of them [the States] against invasion." Now if a
military road over our own Territories be indispensably necessary to
enable us to meet and repel the invader, it follows as a necessary
consequence not only that we possess the power, but it is our
imperative duty to construct such a road. It would be an absurdity to
invest a government with the unlimited power to make and conduct war
and at the same time deny to it the only means of reaching and
defeating the enemy at the frontier. Without such a road it is quite
evident we can not "protect" California and our Pacific possessions
"against invasion." We can not by any other means transport men and
munitions of war from the Atlantic States in sufficient time
successfully to defend these remote and distant portions of the
Republic.

Experience has proved that the routes across the isthmus of Central
America are at best but a very uncertain and unreliable mode of
communication. But even if this were not the case, they would at once
be closed against us in the event of war with a naval power so much
stronger than our own as to enable it to blockade the ports at either
end of these routes. After all, therefore, we can only rely upon a
military road through our own Territories; and ever since the origin
of the Government Congress has been in the practice of appropriating
money from the public Treasury for the construction of such roads.

The difficulties and the expense of constructing a military railroad
to connect our Atlantic and Pacific States have been greatly
exaggerated. The distance on the Arizona route, near the
thirty-second parallel of north latitude, between the western
boundary of Texas, on the Rio Grande, and the eastern boundary of
California, on the Colorado, from the best explorations now within
our knowledge, does not exceed 470 miles, and the face of the country
is in the main favorable. For obvious reasons the Government ought not
to undertake the work itself by means of its own agents. This ought to
be committed to other agencies, which Congress might assist, either by
grants of land or money, or by both, upon such terms and conditions as
they may deem most beneficial for the country. Provision might thus be
made not only for the safe, rapid, and economical transportation of t