It is impossible to look back on the occurrences of the late wars in Europe, and to behold the disregard which was paid to our rights as a neutral power, and the waste which was made of our commerce by the parties to those wars by various acts of their respective Governments, and under the pretext by each that the other had set the example, without great mortification and a fixed purpose never to submit to the like in future.  An attempt to remove those causes of possible variance by friendly negotiation and on just principles which should be applicable to all parties could, it was presumed, be viewed by none other than as a proof of an earnest desire to preserve those relations with every power.

In the late war between France and Spain a crisis occurred in which it seemed probable that all controvertible principles involved in such wars might be brought into discussion and settled to the satisfaction of all parties.  Propositions having this object in view have been made to the Governments of Great Britain, France, Russia, and of other powers, which have been received in a friendly manner by all, but as yet no treaty has been formed with either for its accomplishment.  The policy will, it is presumed, be persevered in, and in the hope that it may be successful.

It will always be recollected that with one of the parties to those wars and from whom we received those injuries, we sought redress by war.  From the other, by whose then reigning Government our vessels were seized in port as well as at sea and their cargoes confiscated, indemnity has been expected, but has not yet been rendered.  It was under the influence of the latter that our vessels were likewise seized by the Governments of Spain, Holland, Denmark, Sweden, and Naples, and from whom indemnity has been claimed and is still expected, with the exception of Spain, by whom it has been rendered.

With both parties we had abundant cause of war, but we had no alternative but to resist that which was most powerful at sea and pressed us nearest at home.  With this all differences were settled by a treaty, founded on conditions fair and honorable to both, and which has been so far executed with perfect good faith.  It has been earnestly hoped that the other would of its own accord, and from a sentiment of justice and conciliation, make to our citizens the indemnity to which they are entitled, and thereby remove from our relations any just cause of discontent on our side.

It is estimated that the receipts into the Treasury during the current year, exclusive of loans, will exceed $18.5 millions, which, with the sum remaining in the Treasury at the end of the last year, amounting to $9,463,922.81 will, after discharging the current disbursements of the year, the interest on the public debt, and upward of $11,633,011.52 of the principal, leave a balance of more than $3 millions in the Treasury on the first day of January next.

A larger amount of the debt contracted during the late war, bearing an interest of 6%, becoming redeemable in the course of the ensuing year than could be discharged by the ordinary revenue, the act of the 26th of May authorized a loan of $5 millions at 4.5% to meet the same.  By this arrangement an annual saving will accrue to the public of $75,000.