The Secretary of the Treasury in obedience to the command of the President of the United States respectfully submits the following observations.—

A great proportion of the difficulties which have attended the administration of Government in the United States, are, by the consent of reflecting men of all parties, referred to a diversity of opinion respecting the objects, nature and tendency of the French Revolution. Though Europe is the principal theatre of contention, yet the effects of the War are visible in the four quarters of the Globe.—It has divided the civilized world into two great political parties; on one side are found all men, who from habit, principle, or interest, are attached to ancient establishments; on the other, the enthusiastic partizans of a new and seductive system.—

Some years since, a majority of the people of the United States manifested a strong sympathy in favour of the revolutionary principles of France; events have contributed to dispel the delusion; but successive vibrations of public sentiment have greatly weakened respect for authority and released a large proportion of the people from the influence of the mild restraints arising out of ancient civil and religious institutions; at present the government is suffering under the reaction of a spirit which was excited against Frances–bold and licentious calumnies are propagated and believed a want of concert is visible among the friends of government and many of the subordinate officers are deprived of that respect, influence and popularity without which their public functions cannot be successfully discharged—

It is necessary that those who conduct the public affairs, should know their real situation; but they are not permitted to despond, nor to relax their efforts, in support of a cause, which they have conscientiously espoused—

To give energy to the Government, it appears indispensible that the Judicial system of the United States should be revised.—It cannot but happen that numerous questions respecting the interpretation of the Laws, and the rights and duties of Officers and Citizens must arise in this extensive country.—On the one hand it is necessary that the Laws should be executed; on the other that individuals should be guarded against oppression—neither of these objects can be assured under the present organization of the Judicial Department.

The Revenue from Duties on Imports and Tonnage has declined from Dolls. 7,405,000, which was the product of the year ending Septr. 30th. 1798, to Dolls. 6,437,000, being the product of the year ending Septr. 30th. 1799—The internal Revenues have increased during the same period, from Dolls. 585,000, to Dolls. 773,000—The Act directing the valuation of Houses and Lands, has been executed in the States of Vermont, New Hampshire, Connecticut, New Jersey, Delaware, Kentucky and Tennessee— The execution will soon be compleated in Massachusetts, Rhode Island, New York, Pennsylvania, Maryland and Virginia—Some greater delay is expected in the States of North Carolina & Georgia. In South Carolina, the execution of the Law has been impeded, by the resignation of Commissioners, and by a diversity of opinion between the Board and an influential member, the effects of which are not yet fully surmounted.—

The establishments of the United States demand an expenditure, exceeding the ordinary Revenue by several millions; it will be impossible at once, to increase the Revenue sufficiently to meet this expence, and it will be difficult to command money on Loan.—The details of information will be communicated by the Treasury Department, in the usual manner as prescribed by Law.—

In addressing the House of Representatives, it appears proper and necessary to state, that the estimates of the appropriations which are necessary for the service of the ensuing year, together with an account of the Revenue and expenditures to a recent period, will be laid before them by the President’s direction—that it was not to have been expected during a period in which a great portion of the civilized world has been involved in a war unusually calamitous and destructive, that the United States could be exempted from extraordinary burthens—that though the period has not arrived when the measures which were adopted to secure the country against foreign attacks can be renounced, yet it is alike necessary to the honour of the Government and the satisfaction of the community, that an exact economy should be maintained—With a view to these objects the House may be invited to investigate the different branches of the public expenditure;—such an examination cannot fail either to produce beneficial retrenchments, or convince the people of the wisdom and necessity of the measures heretofore adopted.—

That the President may be enabled to judge what representation ought to be made in relation to the renewal of commercial intercourse with a part of the island of St. Domingo, it appears necessary to review the transactions relative to that subject.—

During several years after the commencement of the present war, the commerce of St. Domingo was immensely profitable to the United States; and even after the system of privateering became general, it continued to be advantageous to Individuals.—The naval armaments of the United States greatly restrained the Privateers and rendered the people of the island desirous of renewing commerce.—The Act of June 13th. 1798, gave no authority to the President to permit trade with any particular Port or Island of the French dominions, although he was empowered at his discretion to remit or discontinue the restrictions generally imposed by the Act.—It was soon discovered by the American merchants that the Act of Congress was the only obstacle to the renewal of a beneficial commerce—The policy of the restriction was arraigned—the Law was continually violated, and the records of the Treasury afford ample evidence that the most persevering exertions on the part of the Government were insufficient to restrain the illegal enterprizes of individuals.—

Soon after the commencement of the last session of Congress, Mr Bunel appeared as the Agent of Genl. Toussaint, and on his behalf made the most explicit assurances that the American commerce should be protected in all the Ports under his jurisdiction; and nearly at the same time information was obtained that an Armistice had been settled with the British Government, which was then said to have secured to itself certain exclusive privileges.—It then appeared to be a favourable opportunity to promote such a modification of the Law, as without deviating from the principles of the general system which had been adopted with respect to France, might extend the commerce and political influence of the United States in the West Indies—the idea was fully approved by the President, and in pursuance of suggestions which were authorized, a Bill passed the House of Representatives empowering the President to regulate by proclamation the Trade between the United States and the whole or any part of the dominions of France, or the dominions of any other nation where the equipment of French Privateers, or the sale of their Prizes, being Vessels of the United States, should be tolerated.—The Senate did not agree to the Bill, except in respect to the dominions of France—

During the time that the Bill was depending in Congress, there was much conversation respecting the ultimate views of Genl. Toussaint, and it was supposed by many, that on the renewal of commercial intercourse, the island of St. Domingo would be declared independant—to these observations, it was uniformly replied by the undersigned Secretary that no certain opinion could be formed respecting the future political condition of the island—that this subject must, and ought to be left to take its natural course—that the views of the United States were purely commercial, and pacific; and that no assurances would under any circumstances be made, that the United States would support a declaration of independence, with men, money, or supplies.—

After the passing of the Act of Feby. 9th. 1799, it was deemed necessary, that explicit assurances in favor of American commerce should be renewed on the part of General Toussaint, and that an Agent should be admitted into the Island, to watch the interests of the United States, and give information to the Government of the course of events.—Edward Stevens, Esqr. was accordingly appointed Consul–General to reside in the Island; and about the same time Envoys were appointed, who were, upon certain conditions to renew negociations with the French Republic.—

During the whole time that Mr. Bunel remained in the United States, he continued to represent the urgent wants of Genl. Toussaint, that his men were unpaid, destitute of cloathing, and frequently without provisions—it was even suggested that the distress was so great as to endanger his authority.—Prior to the passing of the Act of Feby. 9th. the objections against furnishing any supplies, were insuperable—after that time, the Heads of Departments and Attorney General, were directed to confer together on the subject & lay their opinions before the President.—

The Secretaries of the four Departments concurred in the following opinion.—

“It having been proposed to send a supply of provisions to St. Domingo in the Vessel in which the Consul General is to proceed, our opinions have been requested on the expediency of the measure.—

“The Law of the 9th. instant, expressly excepts from the restrictions imposed on Vessells in general such Vessells “as shall be solely employed in any purposes of political or national intercourse”, the object of the proposed shipment is, by supplying some of his most urgent wants, favourably to impress the mind of Genl. Toussaint to suppress privateering and to adopt such measures as may justify a proclamation for opening the trade which is an object of national importance, perfectly consistent with the spirit of the Act & not contrary to justice or policy, in respect to France.—

“The principal objection against the measure, arises from the possibility of a suspicion that it was the intention of the Government to favour the individual merchant entrusted with furnishing the supplies.—To obviate this objection, it appears proper to stipulate by a previous contract that every excess above a moderate profit, shall be for the benefit of the United States, or that the supplies shipped shall be sold under the direction of the Consul–General, at a moderate price, to be previously stipulated.—It also appears proper to stipulate, that no return cargo shall be received or admitted in the Ports of the United States, until the President shall have previously published a proclamation opening the trade.”

Feby. 20th. 1799.—

On the same day, the Attorney General delivered the following opinion in a Letter addressed to the Secretary of State.

“I have the honour to express my opinion that it is neither lawful nor expedient to permit a Vessell to sail from hence to St. Domingo, with supplies of cloathes and provisions for General Toussaint, though a private merchant should undertake it, either alone or in partnership with the United States.—

Unlawful, because permission may be granted to Vessels which shall be solely employed in any purpose of political intercourse, and to none other.

Inexpedient, because a negociation is contemplated to be commenced with France; because it will set a precedent of govermental participation in matters of commerce, or of govermental preferences to certain individuals, and thereby excite general discontent among the mercantile people, and further, because it will expose the Officers in the executive departments to public opprobrium, or suspicions of being privately interested in adventures of this kind; and lastly, because I have no more confidence in the black Frenchmen than in the white, and am willing that they should suffer in St. Domingo, till they actually refrain from depredations on our Commerce, and give satisfactory evidence of their future good behaivour, and of their future ability to restrain the inhabitants of that island from molesting our citizens in their occupations on the seas.”

The President on consideration of the subject, concurred with the opinion of the Attorney General and directed that the supplies should be refused; but afterwards on reviewing the question, he was pleased to permit certain articles which were most urgently demanded to be shipped, not exceeding in value, what might be deemed necessary, to defray the expences of the Vessel, the quantity to be ascertained under direction of the Secretary of State—

The beginning of March, Mr. Stevens failed with instructions to acquaint Genl Toussaint that the commerce would be renewed on the following conditions.—

“1st. All privateering from the island must be absolutely restrained.—

“2d. All French armed vessells commissioned elsewhere, must be refused an asylum in the ports of St. Domingo.—

“3d. The armed vessels of the United States, public and private, being necessary for the protection of our commerce with St. Domingo, and generally with the West Indies—must as well as mere merchant vessels be permitted to freely enter the ports of the island, to victual, water, and refit, and in all respects be received and treated as friends.—

“4th. The property of the Citizens of the United States must not be liable to be siezed by the Government”.—

It is self evident that nothing less than a compliance with these conditions, could render it safe and proper on the part of the United States to renew commercial intercourse.—It was for General Toussaint to consider whether they interfered with his duty and engagements to the French Republic.—

In the month of April, General Maitland arrived at Philadelphia from Great Britain, for the purpose of concerting measures with the American Government relative to the trade of the two nations with St. Domingo.—The conduct of the British government was open and friendly, the nature of the armistice was explained, and in a short time, the views and wishes of the two Governments were found to be reconcileable.

The conditions upon which trade has been opened are before the public—the British are suspected and unpopular in the island—the Americans have been hitherto protected—the civil war with Rigaud has interrupted industry, and prevented much of the produce of the island from being brought to the Ports for exportation—many vessels have made losing voyages—it has been suggested by some that the Consul General has engrossed a large proportion of the produce at market:—suspicions are entertained by some, of the sincerity of Toussaint;—indeed, the whole subject of the arrangement with St. Domingo, has, from the first, excited considerable curiosity, suspicion and discontent—At present, many who have been friends of the Government, consider the project of a renewal of commerce with the Island considered as a dependency of France, in concert with the British Government, as irreconcileable with the mission which has been instituted.—

The foregoing facts are conceived to be all that are material to the right understanding of the subject, upon which the following observations are respectfully submitted.—

A perfect respect is entertained for the opinion of the Attorney General; nevertheless, it is confidently believed that the permission to send supplies in the manner consented to by the President was not illegal; the expediency of this particular measure has been evinced, by the comfort and relief which was afforded to General Toussaint, which was greater than was anticipated from such a moderate supply.—

Admitting every argument against the policy of the measure as adopted in pursuance of the Act of Congress, or as modified in concert with the British Government, to be valid, yet it is not easy to perceive that a course different from that which was adopted could have been pursued.—It has been observed that experience proved the impracticability of maintaining the restrictions upon our trade—the expectations of the American Merchants had been excited—The agent of General Toussaint had received certain conditional assurances—It was moreover, supposed at the time of Mr. Stevens’ departure, that an Armistice had been formed with Great Britain and that the Government of that nation was aiming to secure its own commerce, and exclude that of the United States.—It appeared to be important not to miss the opportunity of extending the commerce and influence of the United States, and thereby impairing the European system in respect to Colonies.—

The concert with the British Government was a subsequent measure, and being solicited, it became a natural and unavoidable consequence of the first.—It was certain that no trade could be pursued with St. Domingo, if that island was considered as at war with Great Britain; and it must have appeared to the British Government, selfish and unreasonable if the United States had refused to concur in measures calculated to prevent the revolution from extending to their islands, or had appeared disposed to take advantage of accidental circumstances to secure exclusive advantages—Indeed, as the interests were mutual, justice required that they should be regulated by a mutual agreement.—

With respect to the future prospects of the United States in relation to St Domingo, nothing certain or even probable can be pronounced.—The war between Toussaint and Rigaud, will it is said, end in the over throw of the latter, and in the destruction of the cast of Mullattoes—The condition of the Whites must be precarious, and it is very problematical, whether the Blacks will ever maintain regular habits of industry under the government of their own chiefs.—The death of Toussaint, at this time would probably produce a total change in the political system of the island.—Though he has hitherto fulfilled his promises to the United States, yet from the nature of things, such a government as he maintains, must be arbitrary and fluctuating. The British will never encourage a declaration of independance, and such a measure cannot now be promoted by the United States.—If it shall be known that the United States have concurred with the British in measures calculated to put an end to all maritime operations from St. Domingo, the jealousy of the Chiefs will be excited, and the French Government may seize the opportunity to regain their influence, and decide the wavering politicks of the island—it is therefore important that measures be instantly taken to induce General Toussaint to dismantle the armed Vessels which have been equipped in consequence of the war with Rigaud—

There are other reflections suggested by the consideration that the mission to France may terminate in a Treaty without any real change in the character or views of that nation in respect to the United States—It is certain that a Treaty must necessarily repeal the Act suspending commercial intercourse.

The result of the foregoing reflections is, that the subject is attended with difficulties arising from the uncertain state of things in the French Colonies, and from the divided opinions of the people of the United States; moreover, that the existing embarrassments may possibly be encreased by the course of future events.—The propriety of the measures which have been taken might be vindicated by considering them in relation to the circumstances under which they were adopted—A full disclosure of all these circumstances would be favourable to the reputation of Individuals, but it cannot now be made without some hazard to the interests of the country;—all that is necessary to mention in the Speech to Congress is, that, having received satisfactory assurances that the rights and interests of the people of the United States should be respected and protected in the ports of the island of St. Domingo, under the jurisdiction and command of General Toussaint Louverture, & that no captures of American Vessells should be permitted by Vessels sailing from said Ports, the President had thought proper in pursuance of the powers vested in him by Law to issue his proclamation, authorizing the renewal of commercial intercourse—it may be added, that the President has perceived with satisfaction, that the conditions which were the basis upon which the proclamation was issued, have been hitherto faithfully observed—

On the subject of the mission to the French Republic, it is respectfully observed, that no considerations of public policy or expediency are perceived which require that any opinion be expressed respecting that measure.—It is believed that it will be sufficient to say that having received explicit assurances from the French Government that the ministers of the United States shall be received with the respect due to their public character, and that a disposition exists, favorable to the termination of the differences subsisting between the two nations, the Envoys have, in pursuance of instructions from the President, proceeded to execute the objects of their mission.—

In respect to the interruption of the two Boards appointed in pursuance of the 6th. and 7th. articles of the Treaty with Great Britain; and the proceedings proper to be adopted on the part of the United States, the Secretary will as soon as possible deliver an opinion—In respect to the communication of information to Congress it appears sufficient to declare, that in consequence of an essential diversity of opinion between the two Commissioners appointed on the part of the United States, in pursuance of the 6th. article of the Treaty between the United States and his Britannick majesty and the other three Commissioners, respecting the proper construction of the said Article, the Commissioners named on the part of the United States, have considered it to be their duty to decline further attendance at the meetings of the Board—That this interruption of proceedings under the 6th. article has induced his Britannick majesty to direct the two Commissioners named on his part in pursuance of the 7th. article of the said Treaty to decline attending the meetings of the Board sitting in London, until the obstacles to the execution of the 6th. article shall be removed.—That the President is determined to fulfill, with punctuality and good faith, the stipulations which have been made on the part of the United States, and is well pleased to find that a corresponding disposition has been declared to exist on the part of his Brittanick majesty, in respect to the execution of the 7th. article—That the President will cause such explanations of the meaning of the parties,—in forming the 6th. article, to be proposed, as, he is convinced will prove satisfactory to his Brittannick Majesty, and give full effect to the engagements formed on behalf of the United States.—

The late insurrection in Pennsylvania, is to be attributed to misrepresentations of the measures of the Government, in seditious pamphlets and newspapers, and in Letters from popular characters—All the acts for increasing the Revenue, the Army and Navy, and for restraining seditious foreigners, were by various artifices rendered exceedingly odious.—The Act of Congress, directing the valuation of Houses and Lands, having a more universal operation upon the people than any other, was easily rendered the object of popular indignation. Combinations to prevent the execution of the Law were formed, in consequence of which process was issued by the District Judge against the principal offenders—a number of individuals who had been arrested by the marshal were rescued by ... —— an armed force—After issuing a proclamation requiring the insurgents to disperse, the President directed a military force to be called out, by whose cooperation with the judiciary authority, a number of persons were arrested, some of whom have been convicted of misdemeanors, and others are held in custody subject to future trial.—

Though the insurrection has been suppressed, the spirit which occasioned it, still exists, and the friends of government and its officers, have lost much of the influence they once possessed—

The several matters herein mentioned, are not arranged in proper order: the Secretary requests that this defect may be excused, it having originated from the want of certain documents, when this report was commenced.—

All which is most respectfully / submitted by