I have the satisfaction also to state that the commissioners under the fourth article of the treaty of Ghent, to whom it was referred to decide to which party the several islands in the bay of Passamaquoddy belonged under the treaty of 1783, have agreed in a report, by which all the islands in the possession of each party before the late war have been decreed to it.  The commissioners acting under the other articles of the treaty of Ghent for the settlement of boundaries have also been engaged in the discharge of their respective duties, but have not yet completed them.

The difference which arose between the two Governments under that treaty respecting the right of the us to take and cure fish on the coast of the British provinces north of our limits, which had been secured by the treaty of 1783, is still in negotiation.  The proposition made by this Government to extend to the colonies of Great Britain the principle of the convention of London, by which the commerce between the ports of the United States and British ports in Europe had been placed on a footing of equality, has been declined by the British Government.  This subject having been thus amicably discussed between the two Governments, and it appearing that the British Government is unwilling to depart from its present regulations, it remains for Congress to decide whether they will make any other regulations in consequence thereof for the protection and improvement of our navigation.

The negotiation with Spain for spoliations on our commerce and the settlement of boundaries remains essentially in the state it held by the communications that were made to Congress by my predecessor.  It has been evidently the policy of the Spanish Government to keep the negotiation suspended, and in this the United States have acquiesced, from an amicable disposition toward Spain and in the expectation that her Government would, from a sense of justice, finally accede to such an arrangement as would be equal between the parties.  A disposition has been lately shown by the Spanish Government to move in the negotiation, which has been met by this Government, and should the conciliatory and friendly policy which has invariably guided our councils be reciprocated, a just and satisfactory arrangement may be expected.  It is proper, however, to remark that no proposition has yet been made from which such a result can be presumed.

It was anticipated at an early stage that the contest between Spain and the colonies would become highly interesting to the United States.  It was natural that our citizens should sympathize in events which affected their neighbors.  It seemed probable also that the prosecution of the conflict along our coast and in contiguous countries would occasionally interrupt our commerce and otherwise affect the persons and property of our citizens.  These anticipations have been realized.  Such injuries have been received from persons acting under authority of both the parties, and for which redress has in most instances been withheld.