December last. In the meantime the contractors themselves, under these trying circumstances, have behaved in a manner worthy of all commendation. They had one resource in the midst of their embarrassments. After the amount due to each of them had been ascertained and finally settled according to law, this became a specific debt of record against the United States, which enabled them to borrow money on this unquestionable security. Still, they were obliged to pay interest in consequence of the default of Congress, and on every principle of justice ought to receive interest from the Government. This interest should commence from the date when a warrant would have issued for the payment of the principal had an appropriation been made for this purpose. Calculated up to the Ist December, it will not exceed $96,660—a sum not to be taken into account when contrasted with the great difficulties and embarrassments of a public and private character, both to the people and the States, which would have resulted from convening and holding a special session of Congress.

For these reasons I recommend the passage of a bill at as early a day as may be practicable to provide for the payment of the amount, with interest, due to these last-mentioned contractors, as well as to make the necessary appropriations for the service of the Post-Office Department for the current fiscal year.

The failure to pass the Post-Office bill necessarily gives birth to serious reflections. Congress, by refusing to pass the general appropriation bills necessary to carry on the Government, may not only arrest its action, but might even destroy its existence. The Army, the Navy, the judiciary, in short, every department of the Government, can no longer perform their functions if Congress refuse the money necessary for their support. If this failure should teach the country the necessity of electing a full Congress in sufficient time to enable the President to convene them in any emergency, even immediately after the old Congress has expired, it will have been productive of great good. In a time of sudden and alarming danger, foreign or domestic, which all nations must expect to encounter in their progress, the very salvation of our institutions may be staked upon the assembling of Congress without delay. If under such circumstances the President should find himself in the condition in which he was placed at the close of the last Congress, with nearly half the States of the Union destitute of representatives, the consequences might be disastrous. I therefore recommend to Congress to carry into effect the provisions of the Constitution on this subject, and to pass a law appointing some day previous to the 4th March in each year of odd number for the election of Representatives throughout all the States. They have already appointed a day for the election of electors for President and Vice-President, and this measure has been approved by the country.

I would again express a most decided opinion in favor of the construction of a Pacific railroad, for the reasons stated in my two last annual messages. When I reflect upon what would be the defenseless condition

of our States and Territories west of the Rocky Mountains in case of a

war with a naval power sufficiently strong to interrupt all intercourse with them by the routes across the Isthmus, I am still more convinced than ever of the vast importance of this railroad. I have never doubted the constitutional competency of Congress to provide for its construction, but this exclusively under the war-making power. Besides, the Constitution expressly requires as an imperative duty that "the United States shall protect each of them [the States] against invasion." I am at a loss to conceive how this protection can be afforded to California and Oregon against such a naval power by any other means. I repeat the opinion contained in my last annual message that it would be inexpedient for the Government to undertake this great work by agents of its own appointment and under its direct and exclusive control. This would increase the patronage of the Executive to a dangerous extent and would foster a system of jobbing and corruption which no vigilance on the part of Federal officials could prevent. The construction of this road ought, therefore, to be intrusted to incorporated companies or other agencies who would exercise that active and vigilant supervision over it which can be inspired alone by a sense of corporate and individual interest. I venture to assert that the additional cost of transporting troops, munitions of war, and necessary supplies for the Army across the vast intervening plains to our possessions on the Pacific Coast would be greater in such a war than the whole amount required to construct the road. And yet this resort would after all be inadequate for their defense and protection. We have yet scarcely recovered from the habits of extravagant expenditure produced by our overflowing Treasury during several years prior to the commencement of my Administration. The financial reverses which we have since experienced ought to teach us all to scrutinize our expenditures with the greatest vigilance and to reduce them to the lowest possible point. The Executive Departments of the Government have devoted themselves to the accomplishment of this object with considerable success, as will appear from their different reports and estimates. To these I invite the scrutiny of Congress, for the purpose of reducing them still lower, if this be practicable consistent with the great public interests of the country. In aid of the policy of retrenchment, I pledge myself to examine closely the bills appropriating lands or money, so that if any of these should inadvertently pass both Houses, as must sometimes be the case, I may afford them an opportunity for reconsideration. At the same time, we ought never to forget that true public economy consists not in withholding the means necessary to accomplish important national objects confided to us by the Constitution, but in taking care that the money appropriated for these purposes shall be faithfully and frugally expended.

It will appear from the report of the Secretary of the Treasury that it is extremely doubtful, to say the least, whether we shall be able to pass through the present and the next fiscal year without providing additional revenue. This can only be accomplished by strictly confining

the appropriations within the estimates of the different Departments, without making an allowance for any additional expenditures which Congress may think proper, in their discretion, to authorize, and without providing for the redemption of any portion of the $20,000,000 of Treasury notes which have been already issued. In the event of a deficiency, which I consider probable, this ought never to be supplied by a resort to additional loans. It would be a ruinous practice in the days of peace and prosperity to go on increasing the national debt to meet the ordinary expenses of the Government. This policy would cripple our resources and impair our credit in case the existence of war should render it necessary to borrow money. Should such a deficiency occur as I apprehend, I would recommend that the necessary revenue be raised by an increase of our present duties on imports. I need not repeat the opinions expressed in my last annual message as to the best mode and manner of accomplishing this object, and shall now merely observe that these have since undergone no change.

The report of the Secretary of the Treasury will explain in detail the operations of that Department of the Government.

The receipts into the Treasury from all sources during the fiscal year ending June 30, 1859, including the loan authorized by the act of June 14, 1858, and the issues of Treasury notes authorized by existing laws, were $81,692,471.01, which sum, with the balance of $6,398,3 16. 10 remaining in the Treasury at the commencement of that fiscal year, made an aggregate for the service of the year of $88,090,787.11.

The public expenditures during the fiscal year ending June 30, 1859, amounted to $83,751,511.57. Of this sum $17,405,285.44 were applied to the payment of interest on the public debt and the redemption of the issues of Treasury notes. The expenditures for all other branches of the public service during that fiscal year were therefore $66,346,226.13. The balance remaining in the Treasury on the 1st July, 1859, being the commencement of the present fiscal year, was $4,339,275.54.

The receipts into the Treasury during the first quarter of the present fiscal year, commencing July 1, 1859, were $20,618,865.85. Of this amount $3,821,300 was received on account of the loan and the issue of Treasury notes, the amount of $16,797,565.85 having been received during the quarter from the ordinary sources of public revenue. The estimated receipts for the remaining three quarters of the present fiscal year, to June 30, 1860, are $50,426,400. Of this amount it is estimated that $5,756,400 will be received for Treasury notes which may be reissued under the fifth section of the act of 3d March last, and $1,170,000 on account of the loan authorized by the act of June 14, 1858, making $6,926,400 from these extraordinary sources, and $43,500,000 from the ordinary sources of the public revenue, making an aggregate, with the balance in the Treasury on the 1st July, 1859, of $75,384,541.89 for the estimated means of the present fiscal year, ending June 30, 1860.

The expenditures during the first quarter of the present fiscal year were $20,007,174.76. Four million six hundred and sixty-four thousand three hundred and sixty-six dollars and seventy-six cents of this sum were applied to the payment of interest on the public debt and the redemption of the issues of Treasury notes, and the remainder, being $15,342,808, were applied to ordinary expenditures during the quarter. The estimated expenditures during the remaining three quarters, to June 30, 1860, are $40,995,558.23, of which sum $2,886,621.34 are estimated for the interest on the public debt. The ascertained and estimated expenditures for the fiscal year ending June 30, 1860, on account of the public debt are accordingly $7,550,988. 10, and for the ordinary expenditures of the Government $53,451,744.89, making an aggregate of $61,002,732.99, leaving an estimated balance in the Treasury on June 30, 1860, of $14,381,808.40.

The estimated receipts during the next fiscal year, ending June 30, 1861, are $66,225,000, which, with the balance estimated, as before stated, as remaining in the Treasury on the 30th June, 1860, will make an aggregate for the service of the next fiscal year of $80,606,808.40.

The estimated expenditures during the next fiscal year, ending 30th June, 1861, are $66,714,928.79. Of this amount $3,386,621.34 will be required to pay the interest on the public debt, leaving the sum of $63,328,307.45 for the estimated ordinary expenditures during the fiscal year ending 30th June, 1861. Upon these estimates a balance will be left in the Treasury on the 30th June, 1861, of $13,891,879.61.

But this balance, as well as that estimated to remain in the Treasury on the 1st July, 1860, will be reduced by such appropriations as shall be made by law to carry into effect certain Indian treaties during the present fiscal year, asked for by the Secretary of the Interior, to the amount of $539,350; and upon the estimates of the Postmaster-General for the service of his Department the last fiscal year, ending 30th June, 1859, amounting to $4,296,009, together with the further estimate of that officer for the service of the present fiscal year, ending 30th June, 1860, being $5,526,324, making an aggregate of $10,361,683.

Should these appropriations be made as requested by the proper Departments, the balance in the Treasury on the 30th June, 1861, will not, it is estimated, exceed $3,530, 196.61.

I transmit herewith the reports of the Secretaries of War, of the Navy, of the Interior, and of the Postmaster-General. They each contain valuable information and important recommendations well worthy of the serious consideration of Congress.

It will appear from the report of the Secretary of War that the Army expenditures have been materially reduced by a system of rigid economy, which in his opinion offers every guaranty that the reduction will be permanent. The estimates of the Department for the next have been reduced nearly $2,000,000 below the estimates for the present fiscal year

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and $500,000 below the amount granted for this year at the last session of Congress.

The expenditures of the Post-Office Department during the past fiscal year, ending on the 30th June, 1859, exclusive of payments for mail service specially provided for by Congress out of the general Treasury, amounted to $14,964,493.33 and its receipts to $7,968,484.07, showing a deficiency to be supplied from the Treasury of $6,996,009.26, against $5,235,677.15 for the year ending 30th June, 1858. The increased cost of transportation, growing out of the expansion of the service required by Congress, explains this rapid augmentation of the expenditures. It is gratifying, however, to observe an increase of receipts for the year ending on the 30th of June, 1859, equal to $481,691.21 compared with those in the year ending on the 30th June, 1858.

It is estimated that the deficiency for the current fiscal year will be $5,988,424.04, but that for the year ending 30th June, 1861, it will not exceed $1,342,473.90 should Congress adopt the measures of reform Since the month of proposed and urged by the Postmaster-General. March retrenchments have been made in the expenditures amounting to $1,826,471 annually, which, however, did not take effect until after the commencement of the present fiscal year. The period seems to have arrived for determining the question whether this Department shall become a permanent and ever-increasing charge upon the Treasury, or shall be permitted to resume the self-sustaining policy which had so long controlled its administration. The course of legislation recommended by the Postmaster-General for the relief of the Department from its present embarrassments and for restoring it to its original independence is deserving of your early and earnest consideration.

In conclusion I would again commend to the just liberality of Congress the local interests of the District of Columbia. Surely the city bearing the name of Washington, and destined, I trust, for ages to be the capital of our united, free, and prosperous Confederacy, has strong claims on our favorable regard. JAMES BUCHANAN.

SPECIAL MESSAGES.

To the Senate of the United States:

WASHINGTON, December 7, 1859.

I transmit to the Senate a report from the Secretary of State and the papers referred to therein, in answer to the resolution of the Senate of the 21st of December last, in relation to the suspension of diplomatic relations with Mexico by the United States legation in that country.

JAMES BUCHANAN,