among other things, declared the duty on the port wine of Portugal, in casks, under the existing laws and treaty to be 6 cents per gallon, and directed that the excess of duties which had been collected on such wine should be refunded. By virtue of another clause in the same section of the act it is provided that all imitations of port or any other wines "shall be subject to the duty provided for the genuine article." Imitations of port wine, the production of France, are imported to some extent into the United States, and the Government of that country now claims that under a correct construction of the act these imitations ought not to pay a higher duty than that imposed upon the original port wine of Portugal. It appears to me to be unequal and unjust that French imitations of port wine should be subjected to a duty of 15 cents, while the more valuable article from Portugal should pay a duty of 6 cents only per gallon. I therefore recommend to Congress such legislation as may be necessary to correct the inequality.

The late President, in his annual message of December last, recommended an appropriation to satisfy the claims of the Texan Government against the United States, which had been previously adjusted so far as the powers of the Executive extend. These claims arose out of the act of disarming a body of Texan troops under the command of Major Snively by an officer in the service of the United States, acting under the orders of our Government, and the forcible entry into the custom-house at Bryarlys Landing, on Red River, by certain citizens of the United States and taking away therefrom the goods seized by the collector of the customs as forfeited under the laws of Texas. This was a liquidated debt ascertained to be due to Texas when an independent state. Her acceptance of the terms of annexation proposed by the United States does not discharge or invalidate the claim. I recommend that provision be made for its payment.

The commissioner appointed to China during the special session of the Senate in March last shortly afterwards set out on his mission in the United States ship Columbus. On arriving at Rio de Janeiro on his passage the state of his health had become so critical that by the advice of his medical attendants he returned to the United States early in the month of October last. Commodore Biddle, commanding the East India Squadron, proceeded on his voyage in the Columbus, and was charged by the commissioner with the duty of exchanging with the proper authorities the ratifications of the treaty lately concluded with the Emperor of China. Since the return of the commissioner to the United States his health has been much improved, and he entertains the confident belief that he will soon be able to proceed on his mission.

Unfortunately, differences continue to exist among some of the nations of South America which, following our example, have established their independence, while in others internal dissensions prevail. It is natural that our sympathies should be warmly enlisted for their welfare; that we should desire that all controversies between them should be amicably adjusted and their Governments administered in a manner to protect the rights and promote the prosperity of their people. It is contrary, however, to our settled policy to interfere in their controversies, whether external or internal.

I have thus adverted to all the subjects connected with our foreign relations to which I deem it necessary to call your attention. Our policy is not only peace with all, but good will toward all the powers of the earth. While we are just to all, we require that all shall be just to us. Excepting the differences with Mexico and Great Britain, our relations with all civilized nations are of the most satisfactory character. It is hoped that in this enlightened age these differences may be amicably adjusted.

The Secretary of the Treasury in his annual report to Congress will communicate a full statement of the condition of our finances. The imports for the fiscal year ending on the 30th of June last were of the value of $117,254,564, of which the amount exported was $15,346,830, leaving a balance of $101,907,734 for domestic consumption. The exports for the same year were of the value of $114,646,606, of which the amount of domestic articles was $99,299,776. The receipts into the Treasury during the same year were $29,769,133.56, of which there were derived from customs $27,528,122.70, from sales of public lands $2,077,022.30, and from incidental and miscellaneous sources $163,998.56. The expenditures for the same period were $29,968,206.98, of which $8,588,157.62 were applied to the payment of the public debt. The balance in the Treasury on the 1st of July last was $7,658,306.22. The amount of the public debt remaining unpaid on the 1st of October last was $17,075,445.52. Further payments of the public debt would have been made, in anticipation of the period of its reimbursement under the authority conferred upon the Secretary of the Treasury by the acts of July 21, 1841, and of April 15, 1842, and March 3, 1843, had not the unsettled state of our relations with Mexico menaced hostile collision with that power. In view of such a contingency it was deemed prudent to retain in the Treasury an amount unusually large for ordinary purposes.

A few years ago our whole national debt growing out of the Revolution and the War of 1812 with Great Britain was extinguished, and we presented to the world the rare and noble spectacle of a great and growing people who had fully discharged every obligation. Since that time the existing debt has been contracted, and, small as it is in comparison with the similar burdens of most other nations, it should be extinguished at the earliest practicable period. Should the state of the country permit, and especially if our foreign relations interpose no obstacle, it is contemplated to apply all the moneys in the Treasury as they accrue, beyond what is required for the appropriations by Congress, to its liquidation. I cherish the hope of soon being able to congratulate the country on its recovering once more the lofty position which it so recently occupied. Our country, which exhibits to the world the benefits of self-government, in developing all the sources of national prosperity owes to mankind the permanent example of a nation free from the blighting influence of a public debt.

The attention of Congress is invited to the importance of making suitable modifications and reductions of the rates of duty imposed by our present tariff laws. The object of imposing duties on imports should be to raise revenue to pay the necessary expenses of Government. Congress may undoubtedly, in the exercise of a sound discretion, discriminate in arranging the rates of duty on different articles, but the discriminations should be within the revenue standard and be made with the view to raise money for the support of Government.

It becomes important to understand distinctly what is meant by a revenue standard the maximum of which should not be exceeded in the rates of duty imposed. It is conceded, and experience proves, that duties may be laid so high as to diminish or prohibit altogether the importation of any given article, and thereby lessen or destroy the revenue which at lower rates would be derived from its importation. Such duties exceed the revenue rates and are not imposed to raise money for the support of Government. If Congress levy a duty for revenue of 1 per cent on a given article, it will produce a given amount of money to the Treasury and will incidentally and necessarily afford protection or advantage to the amount of 1 per cent to the home manufacturer of a similar or like article over the importer. If the duty be raised to 10 per cent, it will produce a greater amount of money and afford greater protection. If it be still raised to 20, 25, or 30 per cent, and if as it is raised the revenue derived from it is found to be increased, the protection or advantage will also be increased; but if it be raised to 31 per cent, and it is found that the revenue