I have the satisfaction, on our present meeting, of being able to communicate to you, the successful termination of the war, which had been commenced against the United States by the regency of Algiers. The Squadron in advance, on that service, under Commodore Decatur, lost not a moment after its arrival in the mediterranean, in seeking the naval force of the Enemy, then cruising in that sea; and succeeded in capturing two of his ships, one of them the principal ship, commanded by the Algerine Admiral. The high character of the American commander was brilliantly sustained on the occasion, which brought his own ship into close action with that of his adversary; as was the accustomed gallantry of all the officers and men actually engaged. Having prepared the way by this demonstration of American skill and prowess, he hastened to the port of Algiers, where peace was promptly yeilded to his victorious force. In the terms stipulated, the rights and honor of the United States were particularly consulted, by a perpetual relinquishment, on the part of the Dey, of all pretensions to tribute from them. The impressions which have thus been made, strengthened as they will have been, by subsequent transactions with the regencies of Tunis and Tripoli, by the appearance of the larger force which followed under Commodore Bainbridge the cheif in command of the expedition, and by the judicious precautionary arrangements left by him in that quarter, afford a reasonable prospect of future security, for the valuable portion of our commerce, which passes within reach of the Barbary Cruisers.

It is another source of satisfaction, that the Treaty of peace with Great Britain has been succeeded by a convention on the subject of commerce, concluded by the Plenipotentiaries of the two countries. In this result, a disposition is manifested on the part of that nation, corresponding with the disposition of the United States, which, it may be hoped, will be improved into liberal arrangements on other subjects, on which the parties have mutual interests, or which might endanger their future harmony. Congress will decide on the expediency of promoting such a Sequel, by giving effect to the measure of confining the American navigation, to American Seamen; a measure which, at the Same time that it might have that conciliatory tendency, would have the further advantage of increasing the independance of our navigation, and the scources for our maritime defence.1

In conformity with the Articles of the Treaty of Ghent relating to the Indians, as well as with a view to the tranquility of our Western and North Western frontiers, measures were taken to establish an immediate peace with the several Tribes who had been engaged in hostilities against the United States. Such of them as were invited to Detroit, acceded readily to a renewal of the former Treaties of friendship.2 Of the other tribes who were invited to a Station on the Mississippi, the greater number have also accepted the peace offered to them.3 The residue, consisting of the more distant Tribes or parts of Tribes, remain to be brought over by further explanations, or by such other means as may be adapted to the dispositions they may finally disclose.

The Indian tribes within & bordering on the southern frontier, whom a cruel war on their part had compelled us to chastise into peace, have latterly shewn a restlessness, which has called for preparatory measures for repressing it, and for protecting the Commissioners engaged in carrying the terms of the peace into execution.4

The execution of the act, for fixing the military peace establishment, has been attended with difficulties, which, even now, can only be overcome by legislative aid. The Selection of Officers; the payment and discharge of the troops enlisted for the war; the payment of the retained Troops, and their re-union from detached, and distant stations; the collection and security of the public property, in the Quarter Master; Commissary, and Ordonnance Departments; and the constant medical assistance required in Hospitals and Garrisons; rendered a compleat execution of the act impracticable on the first of May, the period more immediately contemplated. As soon, however, as circumstances would permit, and as far as it has been practicable, consistently with the public interests, the reduction of the army has been accomplished: but the appropriations for its pay, and for other branches of the military service, having proved inadequate, the earliest attention to that subject will be necessary; and the expediency, of continuing upon the peace establishment the staff officers who have hitherto been provisionally retained, is also recommended to the consideration of Congress.5

In the performance of the Executive duty upon this occasion, there has not been wanting a just sensibility to the merits of the American army, during the late war: but the obvious policy and design, in fixing an efficient military peace establishment, did not afford an opportunity to distinguish the aged and infirm, on account of their past services; nor the wounded and disabled, on account of their present sufferings. The extent of the reduction, in deed, unavoidably involved the exclusion of many meritorious officers of every rank, from the Service of their country; and so equal as well as so numerous, were the claims to attention, that a decision by the standard of comparative merit, could seldom be attained. Judged, however, in candor, by a general standard of positive merit, the Army Register will, it is beleived, do honor to the establishment; while the case of those Officers, whose names are not included in it, devolves, with the strongest interest, upon the legislative authority, for such provision, as shall be deemed the best calculated to give support and solace to the veteran and the invalid; to display the beneficence, as well as the justice, of the Government; and to inspire a martial zeal for the public service, upon every future emergency.6

Although the embarrassments arising from the want7 of an uniform national currency have not been diminished, Since the adjournment of Congress, great satisfaction has been derived, in contemplating the revival of the public credit, and the efficiency of the public resources. The receipts into the Treasury, from the various branches of the revenue during the nine months ending on the thirtieth of September last, have been estimated at twelve millions and a half of Dollars: the issues of Treasury notes of every denomination, during the same period, amounted to the sum of fourteen millions of Dollars: and there was, also, obtained upon loan, during the same period, a sum of nine millions of Dollars; of which the sum of six millions of Dollars was subscribed in cash, and the sum of three millions of Dollars in Treasury Notes. With these means, added to the sum of one million and a half of Dollars, being the balance of money in the Treasury on the first of January, there has been paid, between the first of January and the first of October, on account of the appropriations of the preceding, and of the present, year (exclusively of the Amount of the Treasury notes subscribed to the loan, and of the amount redeemed in the payment of duties and taxes) the aggregate sum of thirty three millions and a half of Dollars; leaving a balance then in the Treasury, estimated at the Sum of three millions of Dollars. Independent however of the arrearages due for military services and supplies, it is presumed that a further sum of five millions of Dollars, including the interest on the public debt payable on the first of January next, will be demanded at the Treasury to compleat the expenditures of the present year, and for which the existing ways and means will Sufficiently provide.

The national debt, as it was ascertained on the first of October last, amounted, in the whole, to the sum of one hundred and twenty millions of Dollars, consisting of the unredeemed balance of the debt contracted before the late war (thirty nine millions of Dollars) the amount of the funded debt contracted in consequence of the war, (sixty four millions of Dollars) and the amount of the unfunded and floating debt (including the various issues of Treasury notes) Seventeen millions of Dollars, which is in a gradual course of payment. There will, probably, be some addition to the public debt, upon the liquidation of various claims, which are depending; and a conciliatory disposition on the part of Congress, may lead, honorably and advantageously, to an equitable arrangement of the militia Expences, incurred by the Several states, without the previous sanction, or authority, of the Government of the United States:8 But when it is considered, that the new, as well as the old, portion of the debt has been contracted in the assertion of the national rights and independence; and when it is recollected, that the public expenditures, not being exclusively, bestowed upon subjects of a transient nature, will long be visible in the number and equipments of the American navy, in the military works for the defence of our harbours and our frontiers, and in the supplies of our arsenals and magazines; the amount will bear a gratifying comparison with the objects which have been attained, as well as with the resources of the country.

The arrangement of the finances, with a view to the receipts and expenditures of a permanent peace establishment, will necessarily enter into the deliberations of Congress, during the present Session. It is true, that the improved condition of the public revenue will not only afford, the means of maintaining the faith of Government with its Creditors inviolate, and of prosecuting successfully the measures of the most liberal policy, but will, also, justify an immediate alleviation of the burthens imposed by the necessities of the war. It is, however, essential to every modification of the finances, that the benefits of an uniform national currency should be restored to the community. The absence of the precious metals will, it is beleived, be a temporary evil; but until they can again be rendered the general medium of Exchange, it devolves on the Wisdom of Congress, to provide a substitute, which shall equally engage the confidence, and accomodate the wants, of the Citizens throughout the Union. If the operation of the State Banks, cannot produce this result, the probable operation of a National Bank will merit consideration;9 and if neither of these expedients be deemed effectual, it may become necessary to ascertain the terms, upon which the notes of the Government (no longer required as an instrument of Credit) shall be issued, upon motives of general policy, as a common medium of circulation.

Notwithstanding the security for future repose which the United States, ought to find in their love of peace, and their constant respect for the rights of other nations, the Character of the times, particularly inculcates the lesson, that whether to prevent or repel danger, we ought not to be unprepared for it. This consideration will sufficiently recommend to Congress, a liberal provision for the immediate extension and gradual completion of the works of defence both fixed and floating, on our maritime frontier; and an adequate provision for guarding our inland frontier, against dangers to which certain portions of it may continue to be exposed.10

As an improvement in our military establishment; it will deserve the Consideration of Congress whether a Corps of Invalids might not be so organized and employed, as at once to aid in the support of11 meritorious individuals excluded by age or infirmities from the existing establishment, and to procure12 to the public the benefit of their stationary services, and of their exemplary discipline. I recommend also an enlargement of the military Academy already established, and the establishment of others in other sections of the union. And I cannot press too much on the attention of Congress, such a classification and organization of the militia as will most effectually render it the safeguard of a free State.13 If experience has shewn in the recent splendid atcheivements of militia, the value of this resource for the public defence, it has shewn also the importance of that skill in the use of arms, and that familiarity with the essential rules of discipline, which cannot be expected from the regulations now in force. With this subject is intimately connected the necessity of accomodating the laws in every respect to the great object, of enabling the political authority of the Union, to employ promptly and effectually the physical power of the union, in the cases designated by the Constitution.

The Signal Services which have been rendered by our navy, and the capacities it has developed for successful co-operation in the national defence, will give to that portion of the public force, its full value in the eyes of Congress, at an epoch which calls for the constant vigilance of all Governments. To preserve the ships, now in a sound state; to compleat those already contemplated; to provide amply the imperishable materials for prompt augmentations; and to improve the existing arrangements, into more advantageous establishments, for the construction, the repairs, and the security of vessels of War, is dictated by the soundest policy.14

In adjusting the duties on imports, to the object of revenue, the influence of the tariff on manufactures, will necessarily present itself for consideration. However wise the Theory may be, which leaves to the sagacity and interest of individuals, the application of their industry and resources, there are in this, as in other cases, exceptions to the general rule. Besides the condition which the Theory itself implies, of a reciprocal adoption, by other nations, experience teaches, that so many circumstances must concur, in introducing and maturing manufacturing establishments, especially of the more complicated kinds, that a country may remain long without them, although sufficiently advanced, and in some respects even peculiarly fitted, for carrying them on with success. Under Circumstances giving a powerful impulse to manufacturing industry, it has made among us a progress, and exhibited an efficiency, which justify the beleif, that with a protection not more than is due to the enterprizing Citizens whose interests are now at stake, it will become, at an early day, not only safe against occasional competitions from abroad, but a source of domestic wealth, and even of external commerce. In selecting the branches more especially entitled to the public patronage, a preference is obviously claimed by such as will releive the United States from a dependence on foreign supplies, ever subject to casual failures, for articles necessary for the public defence, or connected with the primary wants of individuals. It will be an additional recommendation of particular manufactures, where the materials for them are extensively drawn from our agriculture, and consequently, impart and ensure to that great fund of national prosperity and independence, an encouragement which cannot fail to be rewarded.15

Among the means of advancing the public interest, the occasion is a proper one for recalling the attention of Congress, to the great importance of establishing throughout our country, the roads and Canals which can best be executed, under the national Authority. No objects within the circle of political economy, so richly repay the expence bestowed on them; there are none, the utility of which is more universally ascertained & acknowledged; none that do more honor to the Governments, whose wise and enlarged patriotism duly appreciates them. Nor is there any country which presents a field, where nature invites more the art of man, to compleat her own work, for his accomodation and benefit. These considerations are strengthened, moreover, by the political effect of these facilities for intercommunication, in bringing and binding more closely together, the various parts of our extended confederacy. Whilst the states individually, with a laudable enterprize & emulation, avail themselves of their local advantages, by new roads, by navigable Canals, and by improving the streams susceptible of navigation, the general Government is the more urged to similar undertakings, requiring a national jurisdiction, and national means, by the prospect of thus systematically completing so inestimable a work. And it is a happy reflection, that any defect of constitutional authority, which may be encountered, can be supplied in a mode, which the constitution itself has providently pointed out.16

The present is a favorable season also, for bringing again into view, the establishment of a national seminary of learning within the District of Columbia, and with means drawn from the property therein subject to the authority of the general Government: Such an Institution claims the patronage of Congress, as a monument of their solicitude for the advancement of knowledge, without which the blessings of liberty cannot be fully enjoyed, or long preserved; as a model, instructive in the formation of other Seminaries; as a nursery of enlightened preceptors; & as a central resort of youth and genius from every part of their Country, diffusing, on their return, examples of those national feelings, those liberal sentiments, and those congenial manners, which contribute cement to our union, and strength to the great political Fabric, of which that is the foundation.17

In closing this communication, I ought not to repress a sensibility in which you will unite, to the happy lot of our Country, and to the goodness of a Superintending providence, to which we are indebted for it. Whilst other portions of mankind are labouring under the distresses of war, or struggling with adversity in other forms, the United States are in the tranquil enjoyment of prosperous and honorable peace. In reviewing the scenes through which it has been attained, we can rejoice in the proofs given, that our political institutions, founded in human rights, and framed for their preservation, are equal to the severest trials of war, as well as adapted to the ordinary periods of repose. As fruits of this experience, and of the reputation acquired by the American Arms, on the land and on the water, the nation finds itself possessed of a growing respect abroad, and of a just confidence in itself, which are among the best pledges, for its peaceful career. Under other aspects of our Country, the strongest features of its flourishing condition are seen, in a population rapidly increasing, on a territory as productive as it is extensive; in a general industry, and fertile ingenuity, which find their ample rewards; and in an affluent revenue, which admits a reduction of the public burdens, without withdrawing the means of sustaining the public credit, of gradually discharging the public debt, of providing for the necessary defensive & precautionary establishments, and of patronizing, in every authorised mode, undertakings conducive to the aggregate wealth and individual comfort of our Citizens.

It remains for the guardians of the public welfare, to persevere in that justice & good will towards other nations, which invite a return of these Sentiments towards the United States; to cherish Institutions, which guarantee their safety, and their liberties Civil and religious; and to combine with a liberal system of foreign commerce, an improvement of the natural18 advantages, and a protection and extension of the Independent resources, of our highly favored and happy Country.

In all measures having such objects, my faithful co-operation will be afforded.