The recent invasion of Mexico, and the effect thereby produced upon her domestic policy, must have a controlling influence upon the great question of South American emancipation.  We have seen the fell spirit of civil dissension rebuked, and perhaps for ever stifled, in that Republic by the love of independence.  If it be true, as appearances strongly indicate, the spirit of independence is the master spirit, and if a corresponding sentiment prevails in the other States, this devotion to liberty can not be without a proper effect upon the counsels of the mother country.  The adoption by Spain of a pacific policy toward her former colonies—­an event consoling to humanity, and a blessing to the world, in which she herself can not fail largely to participate—­may be most reasonably expected.

The claims of our citizens upon the South American Governments generally are in a train of settlement, while the principal part of those upon Brazil have been adjusted, and a decree in council ordering bonds to be issued by the minister of the treasury for their amount has received the sanction of His Imperial Majesty.  This event, together with the exchange of the ratifications of the treaty negotiated and concluded in 1828, happily terminates all serious causes of difference with that power.

Measures have been taken to place our commercial relations with Peru upon a better footing than that upon which they have hitherto rested, and if met by a proper disposition on the part of that Government important benefits may be secured to both countries.

Deeply interested as we are in the prosperity of our sister Republics, and more particularly in that of our immediate neighbor, it would be most gratifying to me were I permitted to say that the treatment which we have received at her hands has been as universally friendly as the early and constant solicitude manifested by the United States for her success gave us a right to expect.  But it becomes my duty to inform you that prejudices long indulged by a portion of the inhabitants of Mexico against the envoy extraordinary and minister plenipotentiary of the United States have had an unfortunate influence upon the affairs of the two countries, and have diminished that usefulness to his own which was justly to be expected from his talents and zeal.  To this cause, in a great degree, is to be imputed the failure of several measures equally interesting to both parties, but particularly that of the Mexican Government to ratify a treaty negotiated and concluded in its own capital and under its own eye.  Under these circumstances it appeared expedient to give to Mr. Poinsett the option either to return or not, as in his judgment the interest of his country might require, and instructions to that end were prepared; but before they could be dispatched a communication was received from the Government of Mexico, through its charge d’affaires here, requesting the recall of our minister.  This was promptly complied with, and a representative of a rank corresponding with that of the Mexican diplomatic agent near this Government was appointed.  Our conduct toward that Republic has been uniformly of the most friendly character, and having thus removed the only alleged obstacle to harmonious intercourse, I can not but hope that an advantageous change will occur in our affairs.