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expenditures; leaving the actual receipts for the year

487;788;324。97; and the expenditures 474;744;778。16。



Other information on the subject of the finances will be found in the

report of the Secretary of the Treasury; to whose statements and

views I invite your most candid and considerate attention。



The reports of the Secretaries of War and of the Navy are herewith

transmitted。  These reports; though lengthy; are scarcely more than

brief abstracts of the very numerous and extensive transactions and

operations conducted through those departments。  Nor could I give a

summary of them here upon any principle which would admit of its

being much shorter than the reports themselves。  I therefore content

myself with laying the reports before you and asking your attention

to them。



It gives me pleasure to report a decided improvement in the financial

condition of the Post…Office Department as compared with several

preceding years。  The receipts for the fiscal year 1861 amounted to

8;349;296。40; which embraced the revenue from all the States of the

Union for three quarters of that year。  Notwithstanding the cessation

of revenue from the so…called seceded States during the last fiscal

year; the increase of the correspondence of the loyal States has been

sufficient to produce a revenue during the same year of

8;299;820。90; being only 50;000 less than was derived from all the

States of the Union during the previous year。  The expenditures show

a still more favorable result。  The amount expended in 1861 was

13;606;759。11。  For the last year the amount has been reduced to

11;125;364。13; showing a decrease of about 2;481;000 in the

expenditures as compared with the preceding year; and about

3;750;000 as compared with the fiscal year 1860。  The deficiency in

the department for the previous year was 4;551;966。98。  For the last

fiscal year it was reduced to 2;112;814。57。  These favorable results

are in part owing to the cessation of mail service in the

insurrectionary States and in part to a careful review of all

expenditures in that department in the interest of economy。  The

efficiency of the postal service; it is believed; has also been much

improved。  The Postmaster…General has also opened a correspondence

through the Department of State with foreign governments proposing a

convention of postal representatives for the purpose of simplifying

the rates of foreign postage and to expedite the foreign mails。  This

proposition; equally important to our adopted citizens and to the

commercial interests of this country; has been favorably entertained

and agreed to by all the governments from whom replies have been

received。



I ask the attention of Congress to the suggestions of the

Postmaster…General in his report respecting the further legislation

required; in his opinion; for the benefit of the postal service。



The Secretary of the Interior reports as follows in regard to the

public lands:



〃The public lands have ceased to be a source of revenue。  From the

1st July; 1861; to the 3oth September; 1862; the entire cash receipts

from the sale of lands were 137;476。2a sum much less than the

expenses of our land system during the same period。   The homestead

law; which will take effect on the 1st of January next; offers such

inducements to settlers that sales for cash cannot be expected to an

extent sufficient to meet the expenses of the General Land Office and

the cost of surveying and bringing the land into market。〃



The discrepancy between the sum here stated as arising from the sales

of the public lands and the sum derived from the same source as

reported from the Treasury Department arises; as I understand; from

the fact that the periods of time; though apparently were not really

coincident at the beginning point; the Treasury report including a

considerable sum now which had previously been reported from the

Interior; sufficiently large to greatly overreach the sum derived

from the three months now reported upon by the Interior and not by

the Treasury。



The Indian tribes upon our frontiers have during the past year

manifested a spirit of insubordination; and at several points have

engaged in open hostilities against the white settlements in their

vicinity。  The tribes occupying the Indian country south of Kansas

renounced their allegiance to the United States and entered into

treaties with the insurgents。  Those who remained loyal to the United

States were driven from the country。  The chief of the Cherokees has

visited this city for the purpose of restoring the former relations

of the tribe with the United States。  He alleges that they were

constrained by superior force to enter into treaties with the

insurgents; and that the United States neglected to furnish the

protection which their treaty stipulations required。



In the month of August last the Sioux Indians in Minnesota attacked

the settlements in their vicinity with extreme ferocity; killing

indiscriminately men; women; and children。  This attack was wholly

unexpected; and therefore no means of defense had been provided。  It

is estimated that not less than 800 persons were killed by the

Indians; and a large amount of property was destroyed。  How this

outbreak was induced is not definitely known; and suspicions; which

may be unjust; need not to be stated。  Information was received by

the Indian Bureau from different sources about the time hostilities

were commenced that a simultaneous attack was to be made upon white

settlements by all the tribes between the Mississippi River and the

Rocky Mountains。  The State of Minnesota has suffered great injury

from this Indian war。  A large portion of her territory has been

depopulated; and a severe loss has been sustained by the destruction

of property。  The people of that State manifest much anxiety for the

removal of the tribes beyond the limits of the State as a guaranty

against future hostilities。  The Commissioner of Indian Affairs will

furnish full details。  I submit for your especial consideration

whether our Indian system shall not be remodeled。  Many wise and good

men have impressed me with the belief that this can be profitably

done。



I submit a statement of the proceedings of commissioners; which shows

the progress that has been made in the enterprise of constructing the

Pacific Railroad。  And this suggests the earliest completion of this

road; and also the favorable action of Congress upon the projects now

pending before them for enlarging the capacities of the great canals

in New York and Illinois; as being of vital and rapidly increasing

importance to the whole nation; and especially to the vast interior

region hereinafter to be noticed at some greater length。  I purpose

having prepared and laid before you at an early day some interesting

and valuable statistical information upon this subject。  The military

and commercial importance of enlarging the Illinois and Michigan

Canal and improving the Illinois River is presented in the report of

Colonel Webster to the Secretary of War; and now transmitted to

Congress。  I respectfully ask attention to it。



To carry out the provisions of the act of Congress of the 15th of May

last; I have caused the Department of Agriculture of the United

States to be organized。



The Commissioner informs me that within the period of a few months

this department has established an extensive system of correspondence

and exchanges; both at home and abroad; which promises to effect

highly beneficial results in the development of a correct knowledge

of recent improvements in agriculture; in the introduction of new

products; and in the collection of the agricultural statistics of the

different States。



Also; that it will soon be prepared to distribute largely seeds;

cereals; plants; and cuttings; and has already published and

liberally diffused much valuable information in anticipation。  of a

more elaborate report; which will in due time be furnished; embracing

some valuable tests in chemical science now in progress in the

laboratory。



The creation of this department was for the more immediate benefit of

a large class of our most valuable citizens; and I trust that the

liberal basis upon which it has been organized will not only meet

your approbation; but that it will realize at no distant day all the

fondest anticipations of its most sanguine friends and become the

fruitful source of advantage to all our people。



On the 22d day of September last a proclamation was issued by the

Executive; a copy of which is herewith submitted。



In accordance with the purpose expressed in the second paragraph of

that paper; I now respectfully recall your attention to what may be

called 〃compensated emancipation。〃



A nation may be said to consist of its territory; its people; and its

laws。  The territory is the only part which is of certain durability。

〃One generation pa

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