The expenditures during the first quarter of the present fiscal year were twenty million seven thousand one hundred and seventy-four dollars and seventy-six cents, ($20,007,174 76.) Four million six hundred and sixty-four thousand three hundred and sixty-six dollars and seventy-six cents ($4,664,366 76) of this sum were applied to the payment of interest on the public debt and the redemption of the issues of treasury notes, and the remainder, being fifteen million three hundred and forty-two thousand eight hundred and eight dollars, ($15,342,808,) were applied to ordinary expenditures during the quarter. The estimated expenditures during the remaining three quarters, to June 30, 1860, are forty million nine hundred and ninety-five thousand five hundred and fifty-eight dollars and twenty-three cents, ($40,995,558 23.) Of which sum two million eight hundred and eightysix thousand six hundred and twenty-one dollars and thirty-four cents ($2,886,621 34) are estimated for the interest on the public debt. The ascertained and estimated expenditures for the fiscal year ending June 30, 1860, on account of the public debt, are accordingly seven million five hundred and fifty thousand nine hundred and eightyeight dollars and ten cents, ($7,550,988 10;) and for the ordinary expenditures of the government fifty-three million four hundred and fifty-one thousand seven hundred and forty-four dollars and eightynine cents, ($53,451,744 89,) making an aggregate of sixty-one million two thousand seven hundred and thirty-two dollars and ninetynine cents, ($61,002,732 99;) leaving an estimated balance in the treasury on June 30, 1860, of fourteen million three hundred and eighty-one thousand eight hundred and eight dollars and forty cents, ($14,381,808 40.)

The estimated receipts during the next fiscal year ending June 30, 1861, are sixty-six million two hundred and twenty-five thousand dollars, ($66,225,000,) which, with the balance estimated, as before stated, as remaining in the treasury on the 30th June, 1860, will make an aggregate for the service of the next fiscal year of eighty million six hundred and six thousand eight hundred and eight dollars and forty cents, ($80,606,808 40.)

The estimated expenditures during the next fiscal year ending 30th June, 1861, are sixty-six million seven hundred and fourteen thousand nine hundred and twenty-eight dollars and seventy-nine cents, ($66,714,928 79.) Of this amount three million three hundred and eighty-six thousand six hundred and twenty-one dollars and thirtyfour cents ($3,386,621 34) will be required to pay the interest on the public debt, leaving the sum of sixty-three million three hundred and twenty-eight thousand three hundred and seven dollars and forty-five cents ($63,328,307 45) for the estimated ordinary expenditures during the fiscal year ending 30th June, 1861. Upon these estimates a balance will be left in the treasury on the 30th June, 1861, of thirteen million eight hundred and ninety-one thousand eight hundred and seventy-nine dollars and sixty-one cents, ($13,891,879 61.)

But this balance, as well as that estimated to remain in the treasury on the 1st July, 1860, will be reduced by such appropriations as shall be made by law to carry into effect certain Indian treaties during the

present fiscal year, asked for by the Secretary of the Interior, to the amount of five hundred and thirty-nine thousand three hundred and fifty dollars, ($539,350;) and upon the estimates of the Postmaster General for the service of his department the last fiscal year ending 30th June, 1859, amounting to four million two hundred and ninetysix thousand and nine dollars, ($4,296,009,) together with the further estimate of that officer for the service of the present fiscal year ending 30th June, 1860, being five million five hundred and twenty-six thousand three hundred and twenty-four dollars, ($5,526,324)-making an aggregate of ten million three hundred and sixty-one thousand six hundred and eighty-three dollars, ($10,361,683.)

Should these appropriations be made as requested by the proper departments, the balance in the treasury on the 30th June, 1861, will not, it is estimated, exceed three million five hundred and thirty thousand one hundred and ninety-six dollars and sixty-one cents, ($3,530,196 61.)

I transmit herewith the reports of the Secretaries of War, of the Navy, of the Interior, and of the Postmaster General. They each contain valuable information and important recommendations well worthy of the serious consideration of Congress.

It will appear from the report of the Secretary of War that the army expenditures have been materially reduced by a system of rigid economy, which, in his opinion, offers every guarantee that the reduction will be permanent. The estimates of the department for the next have been reduced nearly two millions of dollars below the estimates for the present fiscal year, and half a million of dollars below the amount granted for this year at the last session of Congress.

The expenditures of the Post Office Department during the past fiscal year, ending on the 30th June, 1859, exclusive of payments for mail service, specially provided for by Congress out of the general treasury, amounted to $14,964,493 33, and its receipts to $7,968,484 07, showing a deficiency to be supplied from the treasury of $6,996,009 26, against $5,235,677 15 for the year ending 30th June, 1858. The increased cost of transportation, growing out of the expansion of the service required by Congress, explains this rapid augmentation of the expenditures. It is gratifying, however, to observe an increase of receipts for the year ending on the 30th of June, 1859, equal to $181,691 21, compared with those in the year ending on the 30th June, 1858.

It is estimated that the deficiency for the current fiscal year will be $5,988,424 04, but that for the year ending 30th June, 1861, it will not exceed $1,342,473 90, should Congress adopt the measures of reform proposed and urged by the Postmaster General. Since the month of March retrenchments have been made in the expenditures amounting to $1,826,471 annually, which, however, did not take effect until after the commencement of the present fiscal year. The period seems to have arrived for determining the question whether this department shall become a permanent and ever increasing charge upon the treasury or shall be permitted to resume the self-sustaining policy which had so long controlled its administration. The course of

than to encounter the calamities, which would be sure at this day to attend the attempt to revive claim to obstruct the trade of the world. This government is satisfied that no such design is meditated, and under the circumstances the United States feel justified in considering the freedom of neutral vessels from interruption, when carrying belligerent property, an established principle of intercommunication which ought to be respected as such by all commercial nations.

But there is another aspect under which this subject presents itself, and which confirms this government in the resolution it has formed and in the expectation that other powers will cordially concur in its views. By the declaration of the Paris conference, in its sitting of April 16, 1856, it was announced on behalf of all the states who might become parties to that act that "the neutral flag covers enemy's goods, with the exception of contraband of war.'

This mutual agreement protects the property of each of those states, when engaged in hostilities, from capture on board a neutral vessel, by an enemy a party to the same act. It is not necessary that a neutral should have announced its adherence to this declaration in order to entitle its vessels to the immunity promised; because the privilege of being protected is guaranteed to belligerents, coparties to that memorable act, and protects their property from capture whenever it is found on board a vessel belonging to a nation not engaged in hostilities. Were it otherwise, a very grave question would arise for the consideration of the government of the United States. The carrying trade is a branch of employment to all neutral commercial powers. It is peculiarly so to this country from the enterprise of its citizens, and from the facility with which they devote themselves to the pursuits of navigation. While conceding the authority of belligerent nations to relax the rigid principles of war, so far as regards their own rights, and to exempt other powers from penalties which might be enforced, but for such concession, whether this is done for a consideration or without it, those neutral nations which are prevented from being parties to such an arrangement have a right to insist that it shall not necessarily work to their injury. This dictate of justice would be palpably violated in the case of the United States, should this protecting clause of the Paris conference not enable their vessels, when neutral, to shield from capture the property of belligerents carried as freight. Such an immunity withheld from this country would, in fact, operate as a premium granted to other nations, and would be almost destructive of that important branch of our national industry, the carrying trade. It ought not to be expected that this country would quietly acquiesce in such an invidious distinction, and the expectation, if indulged, would be sure to be disappointed. The United States, indeed, declined to become a party to the Paris conference, though that circumstance does not affect the position they occupy. They did so for the most satisfactory reasons, because the propositions were not divisible, and because they were required to surrender a mode of maritime warfare peculiarly adapted to their condition and pursuits, and essential to their defense upon the ocean. It was not that the propositions went too far, but because they did not go far enough, that this country felt it to be its duty to withhold its concurrence from the

acts of the conference. It concedes, however, that while claiming to participate as a neutral power in this exemption, it is bound when a belligerent power to respect the same principle, recognizing its general obligation. As far as reasonably practicable the evils of war should be confined to the parties engaged in it, and neutral nations have a right to demand that their interests should not be affected unless when brought into contact with hostile operations fairly adapted to promote the submission of an enemy. This just barrier against the passions of nations has found little practical favor in the progress of their dissentions, and the result has been the introduction of other causes of trouble, which it were wise to examine calmly, with a view to avert the serious consequences which may be anticipated if no such effort is made. The system of blockades and the doctrine and practice touching contraband of war have been fertile sources of these difficulties, not only in consequence of the vague and contradictory manner in which the subjects are considered, as well in judicial decisions as in received treaties, by elementary writers upon public law, but also in consequence of their peculiarly offensive character, and of the irritation they are sure to produce.

Almost infinite have been the questions to which these subjects, more especially those relating to contraband of war, have given rise, and human ingenuity has been exhausted in efforts to reconcile the unlimited seizure of neutral property and its appropriation to the purposes of the captors with established principles, loose as they too often are, which, while they recognize certain rights of belligerents, impose reasonable restrictions upon their exercise, in the expectation, vain it is too often found, of preventing their abuse. But the contest has been an unequal and a losing one between the power of confiscation and appropriation and the prohibition of the international code, appealing for its sanctions only to the consciences of nations.

The blockade of an enemy's coast, in order to prevent all intercourse with neutral powers, even for the most peaceful purpose, is a claim. which gains no additional strength by an investigation into the foundation on which it rests, and the evils which have accompanied its exercise call for an efficient remedy. The investment of a place by sea and land, with a view to its reduction, preventing it from receiving supplies of men and material necessary for its defense, is a legitimate mode of prosecuting hostilities which cannot be objected to so long as war is recognized as an arbiter of national disputes. But the blockade of a coast, or of commercial positions along it, without any regard to ulterior military operations, and with the real design of carrying on a war against trade, and, from its very nature, against the trade of peaceable and friendly powers, instead of a war against armed men, is a proceeding which it is difficult to reconcile with reason or with the opinions of modern times. To watch every creek and river and harbor upon an ocean frontier, in order to seize and confiscate every vessel, with its cargo, attempting to enter or go out without any direct effect upon the true objects of war, is a mode of conducting hostilities which would find few advocates, if not now first presented for consideration. Unfortunately, however, the right to do this has been long recognized by the law of nations, accompanied, indeed, with precautionary condi

tions, intended to prevent abuse, but which experience has shown to be lamentably inoperative. It is very desirable, therefore, that this constant source of irritation in time of war should be guarded against, and the power to interrupt all intercourse with extensive regions be limited and precisely defined, before, by a necessary reaction, its exercise is met by an armed resistance.

There can be no reasonable doubt but the original theory of blockades was in conformity with the views herein suggested; that is, they were considered as military means to reduce invested places, and upon this narrow foundation the immense superstructure which now overshadows the commercial intercourse of the world has been erected from time to time by belligerent powers for their own purposes. of the most eminent jurisconsults of this country, both in character and position, Judge Marshall, when Secretary of State, in his instructions dated September 30, 1800, to Mr. King, then our minister at London, lends his high authority to this view of the subject. "On principle," he said, "it might well be questioned whether this rule can be applied to a place not completely invested by land as well as by sea. If we examine the reasoning on which is founded the right to intercept and confiscate supplies designed for a blockaded town, it will be difficult to resist the conviction that its extension to towns invested by sea only is an unjustifiable encroachment on the rights of neutrals.”

The elementary writers abound with expressions indicating a close connection between blockades and sieges. Vattel defines the right of a party blockading or besieging a place to treat as an enemy any one who attempts to enter such place or to carry anything to the besieged. And Lord Stowell, when speaking of a blockading force as a besieging force, borrowed language which had been thus previously used, and which left no doubt of its origin.

But Lord Stowell has borne yet more direct testimony to the correctness of these suggestions. In a case decided by him, he said a blockade is a sort of circumvallation by which all correspondence and communication is, as far as human force can effect it, effectually cut off," &c.

It would be difficult for language to express with more precision the true character of blockades and the object to which they are properly applicable, the reduction of invested places.

The restriction of blockades to the proper purposes of war would remove at once from the field of controversy the vast variety of questions with which it is now encumbered, and which are sure to present themselves, peaceably or forcibly, as soon as a maritime war breaks

out.

I have no disposition to undertake even their bare enumeration, for it would be a work of labor, beginning at the inquiry, when does a blockade rightfully commence, and ending with an equally important and sometimes difficult one, when does it terminate? And it would embrace all the intermediate questions which have been discussed with wonderful subtlety, and by whose aid and immense amount of property belonging to friendly merchants has been transferred from the peaceable owners to the armed captors. Such an enumeration, however,