December 4, 1865: First Annual Message

Transcript

Fellow-Citizens of the Senate and House of Representatives: 

To express gratitude to God in the name of the people for the preservationof the United States is my first duty in addressing you. Our thoughts nextrevert to the death of the late President by an act of parricidal treason.The grief of the nation is still fresh. It finds some solace in the considerationthat he lived to enjoy the highest proof of its confidence by enteringon the renewed term of the Chief Magistracy to which he had been elected;that he brought the civil war substantially to a close; that his loss wasdeplored in all parts of the Union, and that foreign nations have renderedjustice to his memory. His removal cast upon me a heavier weight of caresthan ever devolved upon any one of his predecessors. To fulfill my trustI need the support and confidence of all who are associated with me inthe various departments of Government and the support and confidence ofthe people. There is but one way in which I can hope to gain their necessaryaid. It is to state with frankness the principles which guide my conduct,and their application to the present state of affairs, well aware thatthe efficiency of my labors will in a great measure depend on your andtheir undivided approbation. 

The Union of the United States of America was intended by its authorsto last as long as the States themselves shall last. "The Union shall beperpetual" are the words of the Confederation. "To form a more perfectUnion," by an ordinance of the people of the United States, is the declaredpurpose of the Constitution. The hand of Divine Providence was never moreplainly visible in the affairs of men than in the framing and the adoptingof that instrument. It is beyond comparison the greatest event in Americanhistory, and, indeed, is it not of all events in modern times the mostpregnant with consequences for every people of the earth? The members ofthe Convention which prepared it brought to their work the experience ofthe Confederation, of their several States, and of other republican governments,old and new; but they needed and they obtained a wisdom superior to experience.And when for its validity it required the approval of a people that occupieda large part of a continent and acted separately in many distinct conventions,what is more wonderful than that, after earnest contention and long discussion,all feelings and all opinions were ultimately drawn in one way to its support?The Constitution to which life was thus imparted contains within itselfample resources for its own preservation. It has power to enforce the laws,punish treason, and insure domestic tranquillity. In case of the usurpationof the government of a State by one man or an oligarchy, it becomes a dutyof the United States to make good the guaranty to that State of a republicanform of government, and so to maintain the homogeneousness of all. Doesthe lapse of time reveal defects? A simple mode of amendment is providedin the Constitution itself, so that its conditions can always be made toconform to the requirements of advancing civilization. No room is allowedeven for the thought of a possibility of its coming to an end. And thesepowers of self-preservation have always been asserted in their completeintegrity by every patriotic Chief Magistrate by Jefferson and Jacksonnot less than by Washington and Madison. The parting advice of the Fatherof his Country, while yet President, to the people of the United Stateswas that the free Constitution, which was the work of their hands, mightbe sacredly maintained; and the inaugural words of President Jeffersonheld up "the preservation of the General Government in its whole constitutionalvigor as the sheet anchor of our peace at home and safety abroad." TheConstitution is the work of "the people of the United States," and it shouldbe as indestructible as the people. 

It is not strange that the framers of the Constitution, which had nomodel in the past, should not have fully comprehended the excellence oftheir own work. Fresh from a struggle against arbitrary power, many patriotssuffered from harassing fears of an absorption of the State governmentsby the General Government, and many from a dread that the States wouldbreak away from their orbits. But the very greatness of our country shouldallay the apprehension of encroachments by the General Government. Thesubjects that come unquestionably within its jurisdiction are so numerousthat it must ever naturally refuse to be embarrassed by questions thatlie beyond it. Were it otherwise the Executive would sink beneath the burden,the channels of justice would be choked, legislation would be obstructedby excess, so that there is a greater temptation to exercise some of thefunctions of the General Government through the States than to trespasson their rightful sphere. The "absolute acquiescence in the decisions ofthe majority" was at the beginning of the century enforced by Jeffersonas "the vital principle of republics;" and the events of the last fouryears have established, we will hope forever, that there lies no appealto force. 

The maintenance of the Union brings with it "the support of the Stategovernments in all their rights," but it is not one of the rights of anyState government to renounce its own place in the Union or to nullify thelaws of the Union. The largest liberty is to be maintained in the discussionof the acts of the Federal Government, but there is no appeal from itslaws except to the various branches of that Government itself, or to thepeople, who grant to the members of the legislative and of the executivedepartments no tenure but a limited one, and in that manner always retainthe powers of redress. 

"The sovereignty of the States" is the language of the Confederacy,and not the language of the Constitution. The latter contains the emphaticwords-- 

This Constitution and the laws of the United States which shall be madein pursuance thereof, and all treaties made or which shall be made underthe authority of the United States, shall be the supreme law of the land,and the judges in every State shall be bound thereby, anything in the constitutionor laws of any State to the contrary notwithstanding.

Certainly the Government of the United States is a limited government,and so is every State government a limited government. With us this ideaof limitation spreads through every form of administration--general, State,and municipal--and rests on the great distinguishing principle of the recognitionof the rights of man. The ancient republics absorbed the individual inthe state--prescribed his religion and controlled his activity. The Americansystem rests on the assertion of the equal right of every man to life,liberty, and the pursuit of happiness, to freedom of conscience, to theculture and exercise of all his faculties. As a consequence the State governmentis limited--as to the General Government in the interest of union, as tothe individual citizen in the interest of freedom. 

States, with proper limitations of power, are essential to the existenceof the Constitution of the United States. At the very commencement, whenwe assumed a place among the powers of the earth, the Declaration of Independencewas adopted by States; so also were the Articles of Confederation: andwhen "the people of the United States" ordained and established the Constitutionit was the assent of the States, one by one, which gave it vitality. Inthe event, too, of any amendment to the Constitution, the proposition ofCongress needs the confirmation of States. Without States one great branchof the legislative government would be wanting. And if we look beyond theletter of the Constitution to the character of our country, its capacityfor comprehending within its jurisdiction a vast continental empire isdue to the system of States. The best security for the perpetual existenceof the States is the "supreme authority" of the Constitution of the UnitedStates. The perpetuity of the Constitution brings with it the perpetuityof the States; their mutual relation makes us what we are, and in our politicalsystem their connection is indissoluble. The whole can not exist withoutthe parts, nor the parts without the whole. So long as the Constitutionof the United States endures, the States will endure. The destruction ofthe one is the destruction of the other; the preservation of the one isthe preservation of the other. 

I have thus explained my views of the mutual relations of the Constitutionand the States, because they unfold the principles on which I have soughtto solve the momentous questions and overcome the appalling difficultiesthat met me at the very commencement of my Administration. It has beenmy steadfast object to escape from the sway of momentary passions and toderive a healing policy from the fundamental and unchanging principlesof the Constitution. 

I found the States suffering from the effects of a civil war. Resistanceto the General Government appeared to have exhausted itself. The UnitedStates had recovered possession of their forts and arsenals, and theirarmies were in the occupation of every State which had attempted to secede.Whether the territory within the limits of those States should be heldas conquered territory, under military authority emanating from the Presidentas the head of the Army, was the first question that presented itself fordecision. 

Now military governments, established for an indefinite period, wouldhave offered no security for the early suppression of discontent, wouldhave divided the people into the vanquishers and the vanquished, and wouldhave envenomed hatred rather than have restored affection. Once established,no precise limit to their continuance was conceivable. They would haveoccasioned an incalculable and exhausting expense. Peaceful emigrationto and from that portion of the country is one of the best means that canbe thought of for the restoration of harmony, and that emigration wouldhave been prevented; for what emigrant from abroad, what industrious citizenat home, would place himself willingly under military rule? The chief personswho would have followed in the train of the Army would have been dependentson the General Government or men who expected profit from the miseriesof their erring fellow-citizens. The powers of patronage and rule whichwould have been exercised under the President, over a vast and populousand naturally wealthy region are greater than, unless under extreme necessity,I should be willing to intrust to any one man. They are such as, for myself,I could never, unless on occasions of great emergency, consent to exercise.The willful use of such powers, if continued through a period of years,would have endangered the purity of the general administration and theliberties of the States which remained loyal. 

Besides, the policy of military rule over a conquered territory wouldhave implied that the States whose inhabitants may have taken part in therebellion had by the act of those inhabitants ceased to exist. But thetrue theory is that all pretended acts of secession were from the beginningnull and void. The States can not commit treason nor screen the individualcitizens who may have committed treason any more than they can make validtreaties or engage in lawful commerce with any foreign power. The Statesattempting to secede placed themselves in a condition where their vitalitywas impaired, but not extinguished; their functions suspended, but notdestroyed. 

But if any State neglects or refuses to perform its offices there isthe more need that the General Government should maintain all its authorityand as soon as practicable resume the exercise of all its functions. Onthis principle I have acted, and have gradually and quietly, and by almostimperceptible steps, sought to restore the rightful energy of the GeneralGovernment and of the States. To that end provisional governors have beenappointed for the States, conventions called, governors elected, legislaturesassembled, and Senators and Representatives chosen to the Congress of theUnited States. At the same time the courts of the United States, as faras could be done, have been reopened, so that the laws of the United Statesmay be enforced through their agency. The blockade has been removed andthe custom-houses reestablished in ports of entry, so that the revenueof the United States may be collected. The Post-Office Department renewsits ceaseless activity, and the General Government is thereby enabled tocommunicate promptly with its officers and agents. The courts bring securityto persons and property; the opening of the ports invites the restorationof industry and commerce; the post-office renews the facilities of socialintercourse and of business. And is it not happy for us all that the restorationof each one of these functions of the General Government brings with ita blessing to the States over which they are extended? Is it not a surepromise of harmony and renewed attachment to the Union that after all thathas happened the return of the General Government is known only as a beneficence? 

I know very well that this policy is attended with some risk; that forits success it requires at least the acquiescence of the States which itconcerns; that it implies an invitation to those States, by renewing theirallegiance to the United States, to resume their functions as States ofthe Union. But it is a risk that must be taken. In the choice of difficultiesit is the smallest risk; and to diminish and if possible to remove alldanger, I have felt it incumbent on me to assert one other power of theGeneral Government--the power of pardon. As no State can throw a defenseover the crime of treason, the power of pardon is exclusively vested inthe executive government of the United States. In exercising that powerI have taken every precaution to connect it with the clearest recognitionof the binding force of the laws of the United States and an unqualifiedacknowledgment of the great social change of condition in regard to slaverywhich has grown out of the war. 

The next step which I have taken to restore the constitutional relationsof the States has been an invitation to them to participate in the highoffice of amending the Constitution. Every patriot must wish for a generalamnesty at the earliest epoch consistent with public safety. For this greatend there is need of a concurrence of all opinions and the spirit of mutualconciliation. All parties in the late terrible conflict must work togetherin harmony. It is not too much to ask, in the name of the whole people,that on the one side the plan of restoration shall proceed in conformitywith a willingness to cast the disorders of the past into oblivion, andthat on the other the evidence of sincerity in the future maintenance ofthe Union shall be put beyond any doubt by the ratification of the proposedamendment to the Constitution, which provides for the abolition of slaveryforever within the limits of our country. So long as the adoption of thisamendment is delayed, so long will doubt and jealousy and uncertainty prevail.This is the measure which will efface the sad memory of the past; thisis the measure which will most certainly call population and capital andsecurity to those parts of the Union that need them most. Indeed, it isnot too much to ask of the States which are now resuming their places inthe family of the Union to give this pledge of perpetual loyalty and peace.Until it is done the past, however much we may desire it, will not be forgotten,The adoption of the amendment reunites us beyond all power of disruption;it heals the wound that is still imperfectly closed: it removes slavery,the element which has so long perplexed and divided the country; it makesof us once more a united people, renewed and strengthened, bound more thanever to mutual affection and support. 

The amendment to the Constitution being adopted, it would remain forthe States whose powers have been so long in abeyance to resume their placesin the two branches of the National Legislature, and thereby complete thework of restoration. Here it is for you, fellow-citizens of the Senate,and for you, fellow-citizens of the House of Representatives, to judge,each of you for yourselves, of the elections, returns, and qualificationsof your own members. 

The full assertion of the powers of the General Government requiresthe holding of circuit courts of the United States within the districtswhere their authority has been interrupted. In the present posture of ourpublic affairs strong objections have been urged to holding those courtsin any of the States where the rebellion has existed; and it was ascertainedby inquiry, that the circuit court of the United States would not be heldwithin the district of Virginia during the autumn or early winter, noruntil Congress should have "an opportunity to consider and act on the wholesubject." To your deliberations the restoration of this branch of the civilauthority of the United States is therefore necessarily referred, withthe hope that early provision will be made for the resumption of all itsfunctions. It is manifest that treason, most flagrant in character, hasbeen committed. Persons who are charged with its commission should havefair and impartial trials in the highest civil tribunals of the country,in order that the Constitution and the laws may be fully vindicated, thetruth dearly established and affirmed that treason is a crime, that traitorsshould be punished and the offense made infamous, and, at the same time,that the question may be judicially settled, finally and forever, thatno State of its own will has the right to renounce its place in the Union. 

The relations of the General Government toward the 4,000,000 inhabitantswhom the war has called into freedom have engaged my most serious consideration.On the propriety of attempting to make the freedmen electors by the proclamationof the Executive I took for my counsel the Constitution itself, the interpretationsof that instrument by its authors and their contemporaries, and recentlegislation by Congress. When, at the first movement toward independence,the Congress of the United States instructed the several States to institutegovernments of their own, they left each State to decide for itself theconditions for the enjoyment of the elective franchise. During the periodof the Confederacy there continued to exist a very great diversity in thequalifications of electors in the several States, and even within a Statea distinction of qualifications prevailed with regard to the officers whowere to be chosen. The Constitution of the United States recognizes thesediversities when it enjoins that in the choice of members of the Houseof Representatives of the United States "the electors in each State shallhave the qualifications requisite for electors of the most numerous branchof the State legislature." After the formation of the Constitution it remained,as before, the uniform usage for each State to enlarge the body of itselectors according to its own judgment, and under this system one Stateafter another has proceeded to increase the number of its electors, untilnow universal suffrage, or something very near it, is the general rule.So fixed was this reservation of power in the habits of the people andso unquestioned has been the interpretation of the Constitution that duringthe civil war the late President never harbored the purpose--certainlynever evowed the purpose--of disregarding it; and in the acts of Congressduring that period nothing can be found which, during the continuance ofhostilities much less after their close, would have sanctioned any departureby the Executive from a policy which has so uniformly obtained. Moreover,a concession of the elective franchise to the freedmen by act of the Presidentof the United States must have been extended to all colored men, whereverfound, and so must have established a change of suffrage in the Northern,Middle, and Western States, not less than in the Southern and Southwestern.Such an act would have created a new class of voters, and would have beenan assumption of power by the President which nothing in the Constitutionor laws of the United States would have warranted. 

On the other hand, every danger of conflict is avoided when the settlementof the question is referred to the several States. They can, each for itself,decide on the measure, and whether it is to be adopted at once and absolutelyor introduced gradually and with conditions. In my judgment the freedmen,if they show patience and manly virtues, will sooner obtain a participationin the elective franchise through the States than through the General Government,even if it had power to intervene. When the tumult of emotions that havebeen raised by the suddenness of the social change shall have subsided,it may prove that they will receive the kindest usage from some of thoseon whom they have heretofore most closely depended. 

But while I have no doubt that now, after the close of the war, it isnot competent for the General Government to extend the elective franchisein the several States, it is equally clear that good faith requires thesecurity of the freedmen in their liberty and their property, their rightto labor, and their right to claim the just return of their labor. I cannot too strongly urge a dispassionate treatment of this subject, whichshould be carefully kept aloof from all party strife. We must equally avoidhasty assumptions of any natural impossibility for the two races to liveside by side in a state of mutual benefit and good will. The experimentinvolves us in no inconsistency; let us, then, go on and make that experimentin good faith, and not be too easily disheartened. The country is in needof labor, and the freedmen are in need of employment, culture, and protection.While their right of voluntary migration and expatriation is not to bequestioned, I would not advise their forced removal and colonization. Letus rather encourage them to honorable and useful industry, where it maybe beneficial to themselves and to the country; and, instead of hasty anticipationsof the certainty of failure, let there be nothing wanting to the fair trialof the experiment. The change in their condition is the substitution oflabor by contract for the status of slavery. The freedman can not fairlybe accused of unwillingness to work so long as a doubt remains about hisfreedom of choice in his pursuits and the certainty of his recovering hisstipulated wages. In this the interests of the employer and the employedcoincide. The employer desires in his workmen spirit and alacrity, andthese can be permanently secured in no other way. And if the one oughtto be able to enforce the contract, so ought the other. The public interestwill be best promoted if the several States will provide adequate protectionand remedies for the freedmen. Until this is in some way accomplished thereis no chance for the advantageous use of their labor, and the blame ofill success will not rest on them. 

I know that sincere philanthropy is earnest for the immediate realizationof its remotest aims; but time is always an element in reform. It is oneof the greatest acts on record to have brought 4,000,000 people into freedom.The career of free industry must be fairly opened to them, and then theirfuture prosperity and condition must, after all, rest mainly on themselves.If they fail, and so perish away, let us be careful that the failure shallnot be attributable to any denial of justice. In all that relates to thedestiny of the freedmen we need not be too anxious to read the future;many incidents which, from a speculative point of view, might raise alarmwill quietly settle themselves. Now that slavery is at an end, or nearits end, the greatness of its evil in the point of view of public economybecomes more and more apparent. Slavery was essentially a monopoly of labor,and as such locked the States where it prevailed against the incoming offree industry. Where labor was the property of the capitalist, the whiteman was excluded from employment, or had but the second best chance offinding it; and the foreign emigrant turned away from the region wherehis condition would be so precarious. With the destruction of the monopolyfree labor will hasten from all pans of the civilized world to assist indeveloping various and immeasurable resources which have hitherto laindormant. The eight or nine States nearest the Gulf of Mexico have a soilof exuberant fertility, a climate friendly to long life, and can sustaina denser population than is found as yet in any part of our country. Andthe future influx of population to them will be mainly from the North orfrom the most cultivated nations in Europe. From the sufferings that haveattended them during our late struggle let us look away to the future,which is sure to be laden for them with greater prosperity than has everbefore been known. The removal of the monopoly of slave labor is a pledgethat those regions will be peopled by a numerous and enterprising population,which will vie with any in the Union in compactness, inventive genius,wealth, and industry. 

Our Government springs from and was made for the people--not the peoplefor the Government. To them it owes allegiance; from them it must deriveits courage, strength, and wisdom. But while the Government is thus boundto defer to the people, from whom it derives its existence, it should,from the very consideration of its origin, be strong in its power of resistanceto the establishment of inequalities. Monopolies, perpetuities, and classlegislation are contrary to the genius of free government, and ought notto be allowed. Here there is no room for favored classes or monopolies;the principle of our Government is that of equal laws and freedom of industry.Wherever monopoly attains a foothold, it is sure to be a source of danger,discord, and trouble. We shall but fulfill our duties as legislators byaccording "equal and exact justice to all men," special privileges to none.The Government is subordinate to the people; but, as the agent and representativeof the people, it must be held superior to monopolies, which in themselvesought never to be granted, and which, where they exist, must be subordinateand yield to the Government. 

The Constitution confers on Congress the right to regulate commerceamong the several States. It is of the first necessity, for the maintenanceof the Union, that that commerce should be free and unobstructed. No Statecan be justified in any device to tax the transit of travel and commercebetween States. The position of many States is such that if they were allowedto take advantage of it for purposes of local revenue the commerce betweenStates might be injuriously burdened, or even virtually prohibited. Itis best, while the country is still young and while the tendency to dangerousmonopolies of this kind is still feeble, to use the power of Congress soas to prevent any selfish impediment to the free circulation of men andmerchandise. A tax on travel and merchandise in their transit constitutesone of the worst forms of monopoly, and the evil is increased if coupledwith a denial of the choice of route. When the vast extent of our countryis considered, it is plain that every obstacle to the free circulationof commerce between the States ought to be sternly guarded against by appropriatelegislation within the limits of the Constitution. 

The report of the Secretary of the Interior explains the condition ofthe public lands, the transactions of the Patent Office and the PensionBureau, the management of our Indian affairs, the progress made in theconstruction of the Pacific Railroad, and furnishes information in referenceto matters of local interest in the District of Columbia. It also presentsevidence of the successful operation of the homestead act, under the provisionsof which 1,160,533 acres of the public lands were entered during the lastfiscal year--more than one-fourth of the whole number of acres sold orotherwise disposed of during that period. It is estimated that the receiptsderived from this source are sufficient to cover the expenses incidentto the survey and disposal of the lands entered under this act, and thatpayments in cash to the extent of from 40 to 50 per cent will be made bysettlers who may thus at any time acquire title before the expiration ofthe period at which it would otherwise vest. The homestead policy was establishedonly after long and earnest resistance; experience proves its wisdom. Thelands in the hands of industrious settlers, whose labor creates wealthand contributes to the public resources, are worth more to the United Statesthan if they had been reserved as a solitude for future purchasers. 

The lamentable events of the last four years and the sacrifices madeby the gallant men of our Army and Navy have swelled the records of thePension Bureau to an unprecedented extent. On the 30th day of June lastthe total number of pensioners was 85,986, requiring for their annual pay,exclusive of expenses, the sum of $8,023,445. The number of applicationsthat have been allowed since that date will require a large increase ofthis amount for the next fiscal year. The means for the payment of thestipends due under existing laws to our disabled soldiers and sailors andto the families of such as have perished in the service of the countrywill no doubt be cheerfully and promptly granted. A grateful people willnot hesitate to sanction any measures having for their object the reliefof soldiers mutilated and families made fatherless in the efforts to preserveour national existence. 

The report of the Postmaster-General presents an encouraging exhibitof the operations of the Post-Office Department during the year. The revenuesof the past year, from the loyal States alone, exceeded the maximum annualreceipts from all the States previous to the rebellion in the sum of $6,038,091;and the annual average increase of revenue during the last four years,compared with the revenues of the four years immediately preceding therebellion, was $3,533,845. The revenues of the last fiscal year amountedto $14,556,158 and the expenditures to $13,694,728, leaving a surplus ofreceipts over expenditures of $861,430. Progress has been made in restoringthe postal service in the Southern States. The views presented by the Postmaster-Generalagainst the policy of granting subsidies to the ocean mail steamship linesupon established routes and in favor of continuing the present system,which limits the compensation for ocean service to the postage earnings,are recommended to the careful consideration of Congress. 

It appears from the report of the Secretary of the Navy that while atthe commencement of the present year there were in commission 530 vesselsof all classes and descriptions, armed with 3,000 guns and manned by 51,000men, the number of vessels at present in commission is 117, with 830 gunsand 12,128 men. By this prompt reduction of the naval forces the expensesof the Government have been largely diminished, and a number of vesselspurchased for naval purposes from the merchant marine have been returnedto the peaceful pursuits of commerce. Since the suppression of active hostilitiesour foreign squadrons have been reestablished, and consist of vessels muchmore efficient than those employed on similar service previous to the rebellion.The suggestion for the enlargement of the navy-yards, and especially forthe establishment of one in fresh water for ironclad vessels, is deservingof consideration, as is also the recommendation for a different locationand more ample grounds for the Naval Academy. 

In the report of the Secretary of War a general summary is given ofthe military campaigns of 1864 and 1865, ending in the suppression of armedresistance to the national authority in the insurgent States. The operationsof the general administrative bureaus of the War Department during thepast year are detailed and an estimate made of the appropriations thatwill be required for military purposes in the fiscal year commencing the1st day of July, 1866. The national military force on the 1st of May, 1865,numbered 1,000,516 men. It is proposed to reduce the military establishmentto a peace footing, comprehending 50,000 troops of all arms, organizedso as to admit of an enlargement by filling up the ranks to 82,600 if thecircumstances of the country should require an augmentation of the Army.The volunteer force has already been reduced by the discharge from serviceof over 800,000 troops, and the Department is proceeding rapidly in thework of further reduction. The war estimates are reduced from $516,240,131to $33,814,461, which amount, in the opinion of the Department, is adequatefor a peace establishment. The measures of retrenchment in each bureauand branch of the service exhibit a diligent economy worthy of commendation.Reference is also made in the report to the necessity of providing fora uniform militia system and to the propriety of making suitable provisionfor wounded and disabled officers and soldiers. 

The revenue system of the country is a subject of vital interest toits honor and prosperity, and should command the earnest considerationof Congress. The Secretary of the Treasury will lay before you a full anddetailed report of the receipts and disbursements of the last fiscal year,of the first quarter of the present fiscal year, of the probable receiptsand expenditures for the other three quarters, and the estimates for theyear following the 30th of June, 1866. I might content myself with a referenceto that report, in which you will find all the information required foryour deliberations and decision, but the paramount importance of the subjectso presses itself on my own mind that I can not but lay before you my viewsof the measures which are required for the good character, and I mightalmost say for the existence, of this people. The life of a republic liescertainly in the energy, virtue, and intelligence of its citizens; butit is equally true that a good revenue system is the life of an organizedgovernment. I meet you at a time when the nation has voluntarily burdeneditself with a debt unprecedented in our annals. Vast as is its amount,it fades away into nothing when compared with the countless blessings thatwill be conferred upon our country and upon man by the preservation ofthe nation's life. Now, on the first occasion of the meeting of Congresssince the return of peace, it is of the utmost importance to inauguratea just policy, which shall at once be put in motion, and which shall commenditself to those who come after us for its continuance. We must aim at nothingless than the complete effacement of the financial evils that necessarilyfollowed a state of civil war. We must endeavor to apply the earliest remedyto the deranged state of the currency, and not shrink from devising a policywhich, with-out being oppressive to the people, shall immediately beginto effect a reduction of the debt, and, if persisted in, discharge it fullywithin a definitely fixed number of years. 

It is our first duty to prepare in earnest for our recovery from theever-increasing evils of an irredeemable currency without a sudden revulsion,and yet without untimely procrastination. For that end we must each, inour respective positions, prepare the way. I hold it the duty of the Executiveto insist upon frugality in the expenditures, and a sparing economy isitself a great national resource. Of the banks to which authority has beengiven to issue notes secured by bonds of the United States we may requirethe greatest moderation and prudence, and the law must be rigidly enforcedwhen its limits are exceeded. We may each one of us counsel our activeand enterprising countrymen to be constantly on their guard, to liquidatedebts contracted in a paper currency, and by conducting business as nearlyas possible on a system of cash payments or short credits to hold themselvesprepared to return to the standard of gold and silver. To aid our fellow-citizensin the prudent management of their monetary affairs, the duty devolveson us to diminish by law the amount of paper money now in circulation.Five years ago the bank-note circulation of the country amounted to notmuch more than two hundred millions; now the circulation, bank and national,exceeds seven hundred millions. The simple statement of the fact recommendsmore strongly than any words of mine could do the necessity of our restrainingthis expansion. The gradual reduction of the currency is the only measurethat can save the business of the country from disastrous calamities, andthis can be almost imperceptibly accomplished by gradually funding thenational circulation in securities that may be made redeemable at the pleasureof the Government. 

Our debt is doubly secure--first in the actual wealth and still greaterundeveloped resources of the country, and next in the character of ourinstitutions. The most intelligent observers among political economistshave not failed to remark that the public debt of a country is safe inproportion as its people are free; that the debt of a republic is the safestof all. Our history confirms and establishes the theory, and is, I firmlybelieve, destined to give it a still more signal illustration. The secretof this superiority springs not merely from the fact that in a republicthe national obligations are distributed more widely through countlessnumbers in all classes of society; it has its root in the character ofour laws. Here all men contribute to the public welfare and bear theirfair share of the public burdens. During the war, under the impulses ofpatriotism, the men of the great body of the people, without regard totheir own comparative want of wealth, thronged to our armies and filledour fleets of war, and held themselves ready to offer their lives for thepublic good. Now, in their turn, the property and income of the countryshould bear their just proportion of the burden of taxation, while in ourimpost system, through means of which increased vitality is incidentallyimparted to all the industrial interests of the nation, the duties shouldbe so adjusted as to fall most heavily on articles of luxury leaving thenecessaries of life as free from taxation as the absolute wants of theGovernment economically administered will justify. No favored class shoulddemand freedom from assessment, and the taxes should be so distributedas not to fall unduly on the poor, but rather on the accumulated wealthof the country. We should look at the national debt just as it is--notas a national blessing, but as a heavy burden on the industry of the country,to be discharged without unnecessary delay. 

It is estimated by the Secretary of the Treasury that the expendituresfor the fiscal year ending the 30th of June, 1866, will exceed the receipts$112,194,947. It is gratifying, however, to state that it is also estimatedthat the revenue for the year ending the 30th of June, 1867, will exceedthe expenditures in the sum of $111,682,818. This amount, or so much asmay be deemed sufficient for the purpose, may be applied to the reductionof the public debt, which on the 31st day of October, 1865, was $2,740,854,750.Every reduction will diminish the total amount of interest to be paid,and so enlarge the means of still further reductions, until the whole shallbe liquidated; and this, as will be seen from the estimates of the Secretaryof the Treasury, may be accomplished by annual payments even within a periodnot exceeding thirty years. I have faith that we shall do all this withina reasonable time; that as we have amazed the world by the suppressionof a civil war which was thought to be beyond the control of any government,so we shall equally show the superiority of our institutions by the promptand faithful discharge of our national obligations. 

The Department of Agriculture under its present direction is accomplishingmuch in developing and utilizing the vast agricultural capabilities ofthe country, and for information respecting the details of its managementreference is made to the annual report of the Commissioner. 

I have dwelt thus fully on our domestic affairs because of their transcendentimportance. Under any circumstances our great extent of territory and varietyof climate, producing almost everything that is necessary for the wantsand even the comforts of man, make us singularly independent of the varyingpolicy of foreign powers and protect us against every temptation to "entanglingalliances," while at the present moment the reestablishment of harmonyand the strength that comes from harmony will be our best security against"nations who feel power and forget right." For myself, it has been andit will be my constant aim to promote peace and amity with all foreignnations and powers, and I have every reason to believe that they all, withoutexception, are animated by the same disposition. Our relations with theEmperor of China, so recent in their origin, are most friendly. Our commercewith his dominions is receiving new developments, and it is very pleasingto find that the Government of that great Empire manifests satisfactionwith our policy and reposes just confidence in the fairness which marksour intercourse. The unbroken harmony between the United States and theEmperor of Russia is receiving a new support from an enterprise designedto carry telegraphic lines across the continent of Asia, through his dominions,and so to connect us with all Europe by a new channel of intercourse. Ourcommerce with South America is about to receive encouragement by a directline of mail steamships to the rising Empire of Brazil. The distinguishedparty of men of science who have recently left our country to make a scientificexploration of the natural history and rivers and mountain ranges of thatregion have received from the Emperor that generous welcome which was tohave been expected from his constant friendship for the United States andhis well-known zeal in promoting the advancement of knowledge. A hope isentertained that our commerce with the rich and populous countries thatborder the Mediterranean Sea may be largely increased. Nothing will bewanting on the part of this Government to extend the protection of ourflag over the enterprise of our fellow-citizens. We receive from the powersin that region assurances of good will; and it is worthy of note that aspecial envoy has brought us messages of condolence on the death of ourlate Chief Magistrate from the Bey of Tunis, whose rule includes the olddominions of Carthage, on the African coast. 

Our domestic contest, now happily ended, has left some traces in ourrelations with one at least of the great maritime powers. The formal accordanceof belligerent rights to the insurgent States was unprecedented, and hasnot been justified by the issue. But in the systems of neutrality pursuedby the powers which made that concession there was a marked difference.The materials of war for the insurgent States were furnished, in a greatmeasure, from the workshops of Great Britain, and British ships, mannedby British subjects and prepared for receiving British armaments, salliedfrom the ports of Great Britain to make war on American commerce underthe shelter of a commission from the insurgent States. These ships, havingonce escaped from British ports, ever afterwards entered them in everypart of the world to refit, and so to renew their depredations. The consequencesof this conduct were most disastrous to the States then in rebellion, increasingtheir desolation and misery by the prolongation of our civil contest. Ithad, moreover, the effect, to a great extent, to drive the American flagfrom the sea, and to transfer much of our shipping and our commerce tothe very power whose subjects had created the necessity for such a change.These events took place before I was called to the administration of theGovernment. The sincere desire for peace by which I am animated led meto approve the proposal, already made, to submit the question which hadthus arisen between the countries to arbitration. These questions are ofsuch moment that they must have commanded the attention of the great powers,and are so interwoven with the peace and interests of every one of themas to have insured an impartial decision. I regret to inform you that GreatBritain declined the arbitrament, but, on the other hand, invited us tothe formation of a joint commission to settle mutual claims between thetwo countries, from which those for the depredations before mentioned shouldbe excluded. The proposition, in that very unsatisfactory form, has beendeclined. 

The United States did not present the subject as an impeachment of thegood faith of a power which was professing the most friendly dispositions,but as involving questions of public law of which the settlement is essentialto the peace of nations; and though pecuniary reparation to their injuredcitizens would have followed incidentally on a decision against Great Britain,such compensation was not their primary object. They had a higher motive,and it was in the interests of peace and justice to establish importantprinciples of international law. The correspondence will be placed beforeyou. The ground on which the British minister rests his justification is,substantially, that the municipal law of a nation and the domestic interpretationsof that law are the measure of its duty as a neutral, and I feel boundto declare my opinion before you and before the world that that justificationcan not be sustained before the tribunal of nations. At the same time;I do not advise to any present attempt at redress by acts of legislation.For the future, friendship between the two countries must rest on the basisof mutual justice. 

From the moment of the establishment of our free Constitution the civilizedworld has been convulsed by revolutions in the interests of democracy orof monarchy, but through all those revolutions the United States have wiselyand firmly refused to become propagandists of republicanism. It is theonly government suited to our condition; but we have never sought to imposeit on others, and we have consistently followed the advice of Washingtonto recommend it only by the careful preservation and prudent use of theblessing. During all the intervening period the policy of European powersand of the United States has, on the whole, been harmonious. Twice, indeed,rumors of the invasion of some parts of America in the interest of monarchyhave prevailed; twice my predecessors have had occasion to announce theviews of this nation in respect to such interference. On both occasionsthe remonstrance of the United States was respected from a deep convictionon the part of European Governments that the system of noninterferenceand mutual abstinence from propagandism was the true rule for the two hemispheres.Since those times we have advanced in wealth and power, but we retain thesame purpose to leave the nations of Europe to choose their own dynastiesand form their own systems of government. This consistent moderation mayjustly demand a corresponding moderation. We should regard it as a greatcalamity to ourselves, to the cause of good government, and to the peaceof the world should any European power challenge the American people, asit were, to the defense of republicanism against foreign interference.We can not foresee and are unwilling to consider what opportunities mightpresent themselves, what combinations might offer to protect ourselvesagainst designs inimical to our form of government. The United States desireto act in the future as they have ever acted heretofore; they never willbe driven from that course but by the aggression of European powers, andwe rely on the wisdom and justice of those powers to respect the systemof noninterference which has so long been sanctioned by time, and whichby its good results has approved itself to both continents. 

The correspondence between the United States and France in referenceto questions which have become subjects of discussion between the two Governmentswill at a proper time be laid before Congress. 

When, on the organization of our Government under the Constitution,the President of the United States delivered his inaugural address to thetwo Houses of Congress, he said to them, and through them to the countryand to mankind, that-- 

The preservation of the sacred fire of liberty and the destiny of therepublican model of government are justly considered, perhaps, as deeply,as finally, staked on the experiment intrusted to the hands of the Americanpeople.

And the House of Representatives answered Washington by the voice ofMadison: 
We adore the Invisible Hand which has led the American people, throughso many difficulties, to cherish a conscious responsibility for the destinyof republican liberty.

More than seventy-six years have glided away since these words werespoken; the United States have passed through severer trials than wereforeseen; and now, at this new epoch in our existence as one nation, withour Union purified by sorrows and strengthened by conflict and establishedby the virtue of the people, the greatness of the occasion invites us oncemore to repeat with solemnity the pledges of our fathers to hold ourselvesanswerable before our fellow-men for the success of the republican formof government. Experience has proved its sufficiency in peace and in war;it has vindicated its authority through dangers and afflictions, and suddenand terrible emergencies, which would have crushed any system that hadbeen less firmly fixed in the hearts of the people. At the inaugurationof Washington the foreign relations of the country were few and its tradewas repressed by hostile regulations; now all the civilized nations ofthe globe welcome our commerce, and their governments profess toward usamity. Then our country felt its way hesitatingly along an untried path,with States so little bound together by rapid means of communication asto be hardly known to one another, and with historic traditions extendingover very few years; now intercourse between the States is swift and intimate;the experience of centuries has been crowded into a few generations, andhas created an intense, indestructible nationality. Then our jurisdictiondid not reach beyond the inconvenient boundaries of the territory whichhad achieved independence; now, through cessions of lands, first colonizedby Spain and France, the country has acquired a more complex character,and has for its natural limits the chain of lakes, the Gulf of Mexico,and on the east and the west the two great oceans. Other nations were wastedby civil wars for ages before they could establish for themselves the necessarydegree of unity; the latent conviction that our form of government is thebest ever known to the world has enabled us to emerge from civil war withinfour years with a complete vindication of the constitutional authorityof the General Government and with our local liberties and State institutionsunimpaired. 
The throngs of emigrants that crowd to our shores are witnesses ofthe confidence of all peoples in our permanence. Here is the great landof free labor, where industry is blessed with unexampled rewards and thebread of the workingman is sweetened by the consciousness that the causeof the country "is his own cause, his own safety, his own dignity." Hereeveryone enjoys the free use of his faculties and the choice of activityas a natural right. Here, under the combined influence of a fruitful soil,genial climes, and happy institutions, population has increased fifteen-foldwithin a century. Here, through the easy development of boundless resources,wealth has increased with twofold greater rapidity than numbers, so thatwe have become secure against the financial vicissitudes of other countriesand, alike in business and in opinion, are self-centered and truly independent.Here more and more care is given to provide education for everyone bornon our soil. Here religion, released from political connection with thecivil government, refuses to subserve the craft of statesmen, and becomesin its independence the spiritual life of the people. Here toleration isextended to every opinion, in the quiet certainty that truth needs onlya fair field to secure the victory. Here the human mind goes forth unshackledin the pursuit of science, to collect stores of knowledge and acquire anever-increasing mastery over the forces of nature. Here the national domainis offered and held in millions of separate freeholds, so that our fellow-citizens,beyond the occupants of any other part of the earth, constitute in realitya people. Here exists the democratic form of government; and that formof government, by the confession of European statesmen," gives a powerof which no other form is capable, because it incorporates every man withthe state and arouses everything that belongs to the soul." 

Where in past history. does a parallel exist to the public happinesswhich is within the reach of the people of the United States? Where inany part of the globe can institutions be found so suited to their habitsor so entitled to their love as their own free Constitution? Every oneof them, then, in whatever part of the land he has his home, must wishits perpetuity. Who of them will not now acknowledge, in the words of Washington,that "every step by which the people of the United States have advancedto the character of an independent nation seems to have been distinguishedby some token of providential agency"? Who will not join with me in theprayer that the Invisible Hand which has led us through the clouds thatgloomed around our path will so guide us onward to a perfect restorationof fraternal affection that we of this day may be able to transmit ourgreat inheritance of State governments in all their rights, of the GeneralGovernment in its whole constitutional vigor, to our posterity, and theyto theirs through countless generations?