The two laws passed at the last session of Congress on the subject of Indian affairs have been carried into effect, and detailed instructions for their administration have been given.  It will be seen by the estimates for the present session that a great reduction will take place in the expenditures of the Department in consequence of these laws, and there is reason to believe that their operation will be salutary and that the colonization of the Indians on the western frontier, together with a judicious system of administration, will still further reduce the expenses of this branch of the public service and at the same time promote its usefulness and efficiency.

Circumstances have been recently developed showing the existence of extensive frauds under the various laws granting pensions and gratuities for Revolutionary services.  It is impossible to estimate the amount which may have been thus fraudulently obtained from the National Treasury.  I am satisfied, however, it has been such as to justify a re-examination of the system and the adoption of the necessary checks in its administration.  All will agree that the services and sufferings of the remnant of our Revolutionary band should be fully compensated; but while this is done, every proper precaution should be taken to prevent the admission of fabricated and fraudulent claims.

In the present mode of proceeding the attestations and certificates of the judicial officers of the various States from a considerable portion of the checks which are interposed against the commission of frauds.  These, however, have been and may be fabricated, and in such a way as to elude detection at the examining offices.  And independently of this practical difficulty, it is ascertained that these documents are often loosely granted; some times even blank certificates have been issued; some times prepared papers have been signed without inquiry, and in one instance, at least, the seal of the court has been within reach of a person most interested in its improper application.  It is obvious that under such circumstances no severity of administration can check the abuse of the law.  And information has from time to time been communicated to the Pension Office questioning or denying the right of persons placed upon the pension list to the bounty of the country.

Such cautions are always attended to and examined, but a far more general investigation is called for, and I therefore recommend, in conformity with the suggestion of the Secretary of War, that an actual inspection should be made in each State into the circumstances and claims of every person now drawing a pension.  The honest veteran has nothing to fear from such a scrutiny, while the fraudulent claimant will be detected and the public Treasury relieved to an amount, I have reason to believe, far greater than has heretofore been suspected.  The details of such a plan could be so regulated as to interpose the necessary checks