In compliance with these enactments, I have appointed a commissioner, who has proceeded to Paraguay with full powers and instructions to settle these differences in an amicable and peaceful manner if this be practicable.  His experience and discretion justify the hope that he may prove successful in convincing the Paraguayan Government that it is due both to honor and justice that they should voluntarily and promptly make atonement for the wrongs which they have committed against the United States and indemnify our injured citizens whom they have forcibly despoiled of their property.

Should our commissioner prove unsuccessful after a sincere and earnest effort to accomplish the object of his mission, then no alternative will remain but the employment of force to obtain “just satisfaction” from Paraguay.  In view of this contingency, the Secretary of the Navy, under my direction, has fitted out and dispatched a naval force to rendezvous near Buenos Ayres, which, it is believed, will prove sufficient for the occasion.  It is my earnest desire, however, that it may not be found necessary to resort to this last alternative.

When Congress met in December last the business of the country had just been crushed by one of those periodical revulsions which are the inevitable consequence of our unsound and extravagant system of bank credits and inflated currency.  With all the elements of national wealth in abundance, our manufactures were suspended, our useful public and private enterprises were arrested, and thousands of laborers were deprived of employment and reduced to want.  Universal distress prevailed among the commercial, manufacturing, and mechanical classes.  This revulsion was felt the more severely in the United States because similar causes had produced the like deplorable effects throughout the commercial nations of Europe.  All were experiencing sad reverses at the same moment.  Our manufacturers everywhere suffered severely, not because of the recent reduction in the tariff of duties on imports, but because there was no demand at any price for their productions.  The people were obliged to restrict themselves in their purchases to articles of prime necessity.  In the general prostration of business the iron manufacturers in different States probably suffered more than any other class, and much destitution was the inevitable consequence among the great number of workmen who had been employed in this useful branch of industry.  There could be no supply where there was no demand.  To present an example, there could be no demand for railroad iron after our magnificent system of railroads, extending its benefits to every portion of the Union, had been brought to a dead pause.  The same consequences have resulted from similar causes to many other branches of useful manufactures.  It is self-evident that where there is no ability to purchase manufactured articles these can not be sold, and consequently must cease to be produced.