I suggested in my last annual message the propriety of remodeling our Indian system.  Subsequent events have satisfied me of its necessity.  The details set forth in the report of the Secretary evince the urgent need for immediate legislative action.

I commend the benevolent institutions established or patronized by the Government in this District to your generous and fostering care.

The attention of Congress during the last session was engaged to some extent with a proposition for enlarging the water communication between the Mississippi River and the northeastern seaboard, which proposition, however, failed for the time.  Since then, upon a call of the greatest respectability, a convention has been held at Chicago upon the same subject, a summary of whose views is contained in a memorial addressed to the President and Congress, and which I now have the honor to lay before you.  That this interest is one which ere long will force its own way I do not entertain a doubt, while it is submitted entirely to your wisdom as to what can be done now.  Augmented interest is given to this subject by the actual commencement of work upon the Pacific Railroad, under auspices so favorable to rapid progress and completion.  The enlarged navigation becomes a palpable need to the great road.

I transmit the second annual report of the Commissioner of the Department of Agriculture, asking your attention to the developments in that vital interest of the nation.

When Congress assembled a year ago, the war had already lasted nearly twenty months, and there had been many conflicts on both land and sea, with varying results; the rebellion had been pressed back into reduced limits; yet the tone of public feeling and opinion, at home and abroad, was not satisfactory.  With other signs, the popular elections then just past indicated uneasiness among ourselves, while, amid much that was cold and menacing, the kindest words coming from Europe were uttered in accents of pity that we are too blind to surrender a hopeless cause.  Our commerce was suffering greatly by a few armed vessels built upon and furnished from foreign shores, and we were threatened with such additions from the same quarter as would sweep our trade from the sea and raise our blockade.  We had failed to elicit from European governments anything hopeful upon this subject.  The preliminary emancipation proclamation, issued in September, was running its assigned period to the beginning of the new year.  A month later the final proclamation came, including the announcement that colored men of suitable condition would be received into the war service.  The policy of emancipation and of employing black soldiers gave to the future a new aspect, about which hope and fear and doubt contended in uncertain conflict.  According to our political system, as a matter of civil administration, the General Government had no lawful power to effect emancipation in any State, and for a long time it