The British Government, in its last communication, although well knowing the views of the United States, still declares that it sees no reason why a conciliatory spirit may not enable the two Governments to overcome all obstacles to a satisfactory adjustment of the subject.

Assured of the correctness of the construction of the treaty constantly adhered to by this Government and resolved to insist on the rights of the United States, yet actuated also by the same desire which is avowed by the British Government, to remove all causes of serious misunderstanding between two nations associated by so many ties of interest and kindred, it has appeared to me proper not to consider an amicable solution of the controversy hopeless.

There is, however, reason to apprehend that with Great Britain in the actual occupation of the disputed territories, and the treaty therefore practically null so far as regards our rights, this international difficulty can not long remain undetermined without involving in serious danger the friendly relations which it is the interest as well as the duty of both countries to cherish and preserve.  It will afford me sincere gratification if future efforts shall result in the success anticipated heretofore with more confidence than the aspect of the case permits me now to entertain.

One other subject of discussion between the United States and Great Britain has grown out of the attempt, which the exigencies of the war in which she is engaged with Russia induced her to make, to draw recruits from the United States.

It is the traditional and settled policy of the United States to maintain impartial neutrality during the wars which from time to time occur among the great powers of the world.  Performing all the duties of neutrality toward the respective belligerent states, we may reasonably expect them not to interfere with our lawful enjoyment of its benefits.  Notwithstanding the existence of such hostilities, our citizens retained the individual right to continue all their accustomed pursuits, by land or by sea, at home or abroad, subject only to such restrictions in this relation as the laws of war, the usage of nations, or special treaties may impose; and it is our sovereign right that our territory and jurisdiction shall not be invaded by either of the belligerent parties for the transit of their armies, the operations of their fleets, the levy of troops for their service, the fitting out of cruisers by or against either, or any other act or incident of war.  And these undeniable rights of neutrality, individual and national, the United States will under no circumstances surrender.