believe that the commanders of these posts had violated their instructions, there was no disposition to impute to their Government a conduct so unprovoked and hostile. An order was in consequence issued to the general in command there to deliver the posts--Pensacola unconditionally to any person duly authorized to receive it, and St. Marks, which is in the heart of the Indian country, on the arrival of a competent force to defend it against those savages and their associates.

In entering Florida to suppress this combination no idea was entertained of hostility to Spain, and however justifiable the commanding general was, in consequence of the misconduct of the Spanish officers, in entering St. Marks and Pensacola to terminate it by proving to the savages and their associates that they should not be protected even there, yet the amicable relations existing between the United States and Spain could not be altered by that act alone. By ordering the restitution of the posts those relations were preserved. To a change of them the power of the Executive is deemed incompetent; it is vested in Congress only.

By this measure, so promptly taken, due respect was shown to the Government of Spain. The misconduct of her officers has not been imputed to her. She was enabled to review with candor her relations with the United States and her own situation, particularly in respect to the territory in question, with the dangers inseparable from it, and regarding the losses we have sustained for which indemnity has been so long withheld, and the injuries we have suffered through that territory, and her means of redress, she was likewise enabled to take with honor the course best calculated to do justice to the United States and to promote her own welfare.

Copies of the instructions to the commanding general, of his correspondence with the Secretary of War, explaining his motives and justifying his conduct, with a copy of the proceedings of the courts-martial in the trial of Arbuthnot and Ambristie, and of the correspondence between the Secretary of State and the minister plenipotentiary of Spain near this Government, and of the minister plenipotentiary of the United States at Madrid with the Government of Spain, will be laid before Congress.

The civil war which has so long prevailed between Spain and the Provinces in South America still continues, without any prospect of its speedy termination. The information respecting the condition of those countries which has been collected by the commissioners recently returned from thence will be laid before Congress in copies of their reports, with such other information as has been received from other agents of the United States.

It appears from these communications that the Government at Buenos Ayres declared itself independent in July, 1816, having previously exercised the power of an independent Government, though in the name of the King of Spain, from the year 1810; that the Banda Oriental, Entre Rios, and Paraguay, with the city of Santa Fee, all of which are also independent, are unconnected with the present Government of Buenos Ayres; that Chili has declared itself independent and is closely connected with Buenos Ayres; that Venezuela has also declared itself independent, and now maintains the conflict with various success; and that the remaining parts of South America, except Monte Video and such other portions of the eastern bank of the La Plata as are held by Portugal, are still in the possession of Spain or in a certain degree under her influence.

By a circular note addressed by the ministers of Spain to the allied powers, with whom they are respectively accredited, it appears that the allies have undertaken to mediate between Spain and the South American Provinces, and that the manner and extent of their interposition would be settled by a congress which was to have met at Aix-la-Chapelle in September last. From the general policy and course of proceeding observed by the allied powers in regard to this contest it is inferred that they will confine their interposition to the expression of their sentiments, abstaining from the application of force. I state this impression that force will not be applied with the greater satisfaction because it is a course more consistent with justice and likewise authorizes a hope that the calamities of the war will be confined to the parties only, and will be of shorter duration.

From the view taken of this subject, founded on all the information that we have been able to obtain, there is good cause to be satisfied with the course heretofore pursued by the United States in regard to this contest, and to conclude that it is proper to adhere to it, especially in the present state of affairs.

I have great satisfaction in stating that our relations with France, Russia, and other powers continue on the most friendly basis.

In our domestic concerns we have ample cause of satisfaction. The receipts into the Treasury during the three first quarters of the year have exceeded $17 millions.

After satisfying all the demands which have been made under existing appropriations, including the final extinction of the old 6% stock and the redemption of a moiety of the Louisiana debt, it is estimated that there will remain in the Treasury on the 1st day of January next more than $2 millions.

It is ascertained that the gross revenue which has accrued from the customs during the same period amounts to $21 millions, and that the revenue of the whole year may be estimated at not less than $26 millions. The sale of the public lands during the year has also greatly exceeded, both in quantity and price, that of any former year, and there is just reason to expect a progressive improvement in that source of revenue.

It is gratifying to know that although the annual expenditure has been increased by the act of the last session of Congress providing for Revolutionary pensions to an amount about equal to the proceeds of the internal duties which were then repealed, the revenue for the ensuing year will be proportionally augmented, and that whilst the public expenditure will probably remain stationary, each successive year will add to the national resources by the ordinary increase of our population and by the gradual development of our latent sources of national prosperity.

The strict execution of the revenue laws, resulting principally from the salutary provisions of the act of the 20th of April last amending the several collection laws, has, it is presumed, secured to domestic manufactures all the relief that can be derived from the duties which have been imposed upon foreign merchandise for their protection. Under the influence of this relief several branches of this important national interest have assumed greater activity, and although it is hoped that others will gradually revive and ultimately triumph over every obstacle, yet the expediency of granting further protection is submitted to your consideration.

The measures of defense authorized by existing laws have been pursued with the zeal and activity due to so important an object, and with all the dispatch practicable in so extensive and great an undertaking. The survey of our maritime and inland frontiers has been continued, and at the points where it was decided to erect fortifications the work has been commenced, and in some instances considerable progress has been made. In compliance with resolutions of the last session, the Board of Commissioners were directed to examine in a particular manner the parts of the coast therein designated and to report their opinion of the most suitable sites for two naval depots. This work is in a train of execution. The opinion of the Board on this subject, with a plan of all the works necessary to a general system of defense so far as it has been formed, will be laid before Congress in a report from the proper department as soon as it can be prepared.

In conformity with the appropriations of the last session, treaties have been formed with the Quapaw tribe of Indians, inhabiting the country on the