Fellow-Citizens of the Senate and House of Representatives: At the period of our last meeting I had the satisfaction of communicating an adjustment with one of the principal belligerent nations, highly important in itself, and still more so as presaging a more extended accommodation. It is with deep concern I am now to inform you that the favorable prospect has been over-clouded by a refusal of the British Government to abide by the act of its minister plenipotentiary, and by its ensuing policy toward the United States as seen through the communications of the minister sent to replace him. Whatever pleas may be urged for a disavowal of engagements formed by diplomatic functionaries in cases where by the terms of the engagements a mutual ratification is reserved, or where notice at the time may have been given of a departure from instructions, or in extraordinary cases essentially violating the principles of equity, a disavowal could not have been apprehended in a case where no such notice or violation existed, where no such ratification was reserved, and more especially where, as is now in proof, an engagement to be executed without any such ratification was contemplated by the instructions given, and where it had with good faith been carried into immediate execution on the part of the United States. These considerations not having restrained the British Government from disavowing the arrangement by virtue of which its orders in council were to be revoked, and the event authorizing the renewal of commercial intercourse having thus not taken place, it necessarily became a question of equal urgency and importance whether the act prohibiting that intercourse was not to be considered as remaining in legal force. This question being, after due deliberation, determined in the affirmative, a proclamation to that effect was issued. It could not but happen, however, that a return to this state of things from that which had followed an execution of the arrangement by the United States would involve difficulties. With a view to diminish these as much as possible, the instructions from the Secretary of the Treasury now laid before you were transmitted to the collectors of the several ports. If in permitting British vessels to depart without giving bonds not to proceed to their own ports it should appear that the tenor of legal authority has not been strictly pursued, it is to be ascribed to the anxious desire which was felt that no individuals should be injured by so unforeseen an occurrence; and I rely on the regard of Congress for the equitable interests of our own citizens to adopt whatever further provisions may be found requisite for a general remission of penalties involuntarily incurred. The recall of the disavowed minister having been followed by the appointment of a successor, hopes were indulged that the new mission would contribute to alleviate the disappointment which had been produced, and to remove the causes which had so long embarrassed the good understanding of the two nations. It could not be doubted that it would at least be charged with conciliatory explanations of the step which had been taken and with proposals to be substituted for the rejected arrangement. Reasonable and universal as this expectation was, it also has not been fulfilled. From the first official disclosures of the new minister it was found that he had received no authority to enter into explanations relative to either branch of the arrangement disavowed nor any authority to substitute proposals as to that branch which concerned the British orders in council, and, finally, that his proposals with regard to the other branch, the attack on the frigate Chesapeake, were founded on a presumption repeatedly declared to be inadmissible by the United States, that the first step toward adjustment was due from them, the proposals at the same time omitting even a reference to the officer answerable for the murderous aggression, and asserting a claim not less contrary to the British laws and British practice than to the principles and obligations of the United States. The correspondence between the Department of State and this minister will show how unessentially the features presented in its commencement have been varied in its progress. It will show also that, forgetting the respect due to all governments, he did not refrain from imputations on this, which required that no further communications should be received from him. The necessity of this step will be made known to His Britannic Majesty through the minister plenipotentiary of the United States in London; and it would indicate a want of the confidence due to a Government which so well understands and exacts what becomes foreign ministers near it not to infer that the misconduct of its own representative will be viewed in the same light in which it has been regarded here. The British Government will learn at the same time that a ready attention will be given to communications through any channel which may be substituted. It will be happy if the change in this respect should be accompanied by a favorable revision of the unfriendly policy which has been so long pursued toward the United States. With France, the other belligerent, whose trespasses on our commercial rights have long been the subject of our just remonstrances, the posture of our relations does not correspond with the measures taken on the part of the United States to effect a favorable change. The result of the several communications made to her Government, in pursuance of the authorities vested by Congress in the Executive, is contained in the correspondence of our minister at Paris now laid before you. By some of the other belligerents, although professing just and amicable dispositions, injuries materially affecting our commerce have not been duly controlled or repressed. In these cases the interpositions deemed proper on our part have not been omitted. But it well deserves the consideration of the Legislature how far both the safety and the honor of the American flag may be consulted, by adequate provisions against that collusive prostitution of it by individuals unworthy of the American name which has so much flavored the real or pretended suspicions under which the honest commerce of their fellow citizens has suffered. In relation to the powers on the coast of Barbary, nothing has occurred which is not of a nature rather to inspire confidence than distrust as to the continuance of the existing amity. With our Indian neighbors, the just and benevolent system continued toward them has also preserved peace, and is more and more advancing habits favorable to their civilization and happiness. From a statement which will be made by the Secretary of War it will be seen that the fortifications on our maritime frontier are in many of the ports completed, affording the defense which was contemplated, and that a further time will be required to render complete the works in the harbor of New York and in some other places. By the enlargement of the works and the employment of a greater number of hands at the public armories the supply of small arms of an improving quality appears to be annually increasing at a rate that, with those made on private contract, may be expected to go far toward providing for the public exigency. The act of Congress providing for the equipment of our vessels of war having been fully carried into execution, I refer to the statement of the Secretary of the Navy for the information which may be proper on that subject. To that statement is added a view of the transfers of appropriations authorized by the act of the session preceding the last and of the grounds on which the transfers were made. Whatever may be the course of your deliberations on the subject of our military establishments, I should fail in my duty in not recommending to your serious attention the importance of giving to our militia, the great bulwark of our security and resource of our power, an organization best adapted to eventual situations for which the United States ought to be prepared. The sums which had been previously accumulated in the Treasury, together with the receipts during the year ending on the 30th of September last (and amounting to more than $9 millions), have enabled us to fulfill all our engagements and to defray the current expenses of Government without recurring to any loan. But the insecurity of our commerce and the consequent diminution of the public revenue will probably produce a deficiency in the receipts of the ensuing year, for which and for other details I refer to the statements which will be transmitted from the Treasury. In the state which has been presented of our affairs with the great parties to a disastrous and protracted war, carried on in a mode equally injurious and unjust to the United States as a neutral nation, the wisdom of the National Legislature will be again summoned to the important decision on the alternatives before them. That these will be met in a spirit worthy the councils of a nation conscious both of its rectitude and of its rights, and careful as well of its honor as of its peace, I have an entire confidence; and that the result will be stamped by a unanimity becoming the occasion, and be supported by every portion of our citizens with a patriotism enlightened and invigorated by experience, ought as little to be doubted. In the midst of the wrongs and vexations experienced from external causes there is much room for congratulation on the prosperity and happiness flowing from our situation at home. The blessing of health has never been more universal. The fruits of the seasons, though in particular articles and districts short of their usual redundancy, are more than sufficient for our wants and our comforts. The face of our country ever presents evidence of laudable enterprise, of extensive capital, and of durable improvement. In a cultivation of the materials and the extension of useful manufactures, more especially in the general application to household fabrics, we behold a rapid diminution of our dependence on foreign supplies. Nor is it unworthy of reflection that this revolution in our pursuits and habits is in no slight degree a consequence of those impolitic and arbitrary edicts by which the contending nations, in endeavoring each of them to obstruct our trade with the other, have so far abridged our means of procuring the productions and manufactures of which our own are now taking the place. Recollecting always that for every advantage which may contribute to distinguish our lot from that to which others are doomed by the unhappy spirit of the times we are indebted to that Divine Providence whose goodness has been so remarkably extended to this rising nation, it becomes us to cherish a devout gratitude, and to implore from the same omnipotent source a blessing on the consultations and measures about to be undertaken for the welfare of our beloved country. 