Mutual payments have been made of the claims awarded by the late joint commission for the settlement of claims between the United States and Peru.  An earnest and cordial friendship continues to exist between the two countries, and such efforts as were in my power have been used to remove misunderstanding and avert a threatened war between Peru and Spain.

Our relations are of the most friendly nature with Chile, the Argentine Republic, Bolivia, Costa Rica, Paraguay, San Salvador, and Hayti.  During the past year no differences of any kind have arisen with any of those Republics, and, on the other hand, their sympathies with the United States are constantly expressed with cordiality and earnestness.

The claim arising from the seizure of the cargo of the brig Macedonian in 1821 has been paid in full by the Government of Chile.  Civil war continues in the Spanish part of San Domingo, apparently without prospect of an early close.

Official correspondence has been freely opened with Liberia, and it gives us a pleasing view of social and political progress in that Republic.  It may be expected to derive new vigor from American influence, improved by the rapid disappearance of slavery in the United States.

I solicit your authority to furnish to the Republic a gunboat at moderate cost, to be reimbursed to the United States by installments.  Such a vessel is needed for the safety of that State against the native African races, and in Liberian hands it would be more effective in arresting the African slave trade than a squadron in our own hands.  The possession of the least organized naval force would stimulate a generous ambition in the Republic, and the confidence which we should manifest by furnishing it would win forbearance and favor toward the colony from all civilized nations.

The proposed overland telegraph between America and Europe, by the way of Behrings Straits and Asiatic Russia, which was sanctioned by Congress at the last session, has been undertaken, under very favorable circumstances, by an association of American citizens, with the cordial good will and support as well of this Government as of those of Great Britain and Russia.  Assurances have been received from most of the South American States of their high appreciation of the enterprise and their readiness to cooperate in constructing lines tributary to that world-encircling communication.  I learn with much satisfaction that the noble design of a telegraphic communication between the eastern coast of America and Great Britain has been renewed, with full expectation of its early accomplishment.

Thus it is hoped that with the return of domestic peace the country will be able to resume with energy and advantage its former high career of commerce and civilization.

Our very popular and estimable representative in Egypt died in April last.  An unpleasant altercation which arose between the temporary incumbent of the office and the Government of the Pasha resulted in a suspension of intercourse.  The evil was promptly corrected on the arrival of the successor in the consulate, and our relations with Egypt, as well as our relations with the Barbary Powers, are entirely satisfactory.