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and of the 26th of April, 1809, so far as may regard American vessels and their cargoes, being American property, from the 1st of August next.

In communicating this document to my government, I shall, with much satisfaction, accompany it with the hopes which you state to be entertained by his royal highness the prince regent, that it may accelerate a good understanding on all points of difference between the two states.

I am the more encouraged to believe that these hopes will not be disappointed, from the assurance which your lordship was pleased to give me, in the conversation of this morning, that, in the opinion of your lordship, the blockade of the 16th of May, 1806, had been merged in the orders in council, now revoked and extinguished with them; and that no condition contained in the order of the 23d instant, is to be interpreted to restrain the government of the United States from the exercise of its right to exclude British armed vessels from the harbours and waters of the United States, whenever there shall be special and sufficient cause for so doing, or whenever such exclusion shall, from a general policy, be extended to the armed vessels of the enemies of Great Britain ; this assurance I am happy to consider as evidence of a conciliatory spirit, which will afford on every other point of difference an explanation equally frank and satisfactory.

I am, my lord, with great consideration, your lordship’s most obedient servant, (Signed)

JONA. RUSSELL. Mr. Russell to the Secretary of State. Sir,

London, 2d July, 1812. I avail myself of the opportunity afforded by the British packet, to transmit to you a copy of a note from lord Castlereagh, of the 29th ultimo, which I trust will put at rest the blockade of 1806.

I acknowledged the receipt of this note, as you will observe by the enclosed copy of my reply, without a comment.

I did not think it useful to enter into a discussion at this moment, concerning the legality of that blockade, which, as no new doctrine appears to be assumed, is made to depend upon the fact, the application of an adequate force.

In like manner I have forborne to notice his lordship’s observations concerning the exclusion from our ports of British vessels of war. As such exclusion is required to accord with the

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obligations of strict neutrality only, the conduct and character of the government of the United States furnish security against any question arising on that subject.

I have the honour to be, &c. (Signed)


Lord Castlereagh to Mr. Russell.

Foreign Office, June 29, 1812. Lord Castlereagh has the honour to acknowledge the receipt of Mr. Russell's communication of the 26th instant.

That no mistake may prevail upon the explanation given in conversation by lord Castlereagh to Mr. Russell, on the two points referred to in Mr. Russell's letter, lord Castlereagh begs leave to re-state to Mr. Russell, with respect to the blockade of May, 1806, that, in point of fact, this particular blockade has been discontinued for a length of time; the general retaliatory blockade of the enemy's ports, established under the orders in council of November, 1807, having rendered the enforcement of it by his majesty's ships of war no longer necessary, and that his majesty's government have no intention of recurring to this, or to any other blockade of the enemy's ports, founded upon the ordinary and accustomed principles of maritime law, which were in force previous to the order in council, without a new notice to neutral powers in the usual forms.

With respect to the provision of the order of the 23d instant, which refers to the admission of British ships of war into the harbours and waters of the United States, lord Castlereagh informs Mr. Russell, that this claim is made in consequence of his majesty's ships being now excluded, whilst those of the enemy are admitted. It is the partial admission of one of the belligerents of which Great Britain feels herself entitled to complain, as a preference in favour of the enemy incompatible with the obligations of strict neutrality. Were the exclusion general, the British government would consider such a measure, part of America, as matter of discussion between the two states, but not as an act of partiality of which they had in the first instance a right to complain.

Lord Castlereagh avails himself of this opportunity to renew to Mr. Russell the assurances of his high consider·ation.

on the

Mr. Russell to Lord Castlereagh.

18 Bentinck Street, 1st Fuly, 1812. Mr. Russell has the honour to acknowledge the receipt of the note of lord Castlereagh, dated the 29th ultimo, containing

explanations relative to the two points referred to in Mr. Russell's note of the 26th of that month, and will take the earliest opportunity of communicating it to his government.

Mr. Russell begs leave to avail himself of this occasion to repeat to lord Castlereagh the assurances of his high consideration.

Letter from the Secretary of the Treasury, transmitting his an

nual Report on the state of tbe Finances ; prepared in obedi

ence to the act to establish the Treasury Department. Sir,

Treasury Department, June 2d, 1813. I have the honour to transmit a report prepared in obedience to the “Act supplementary to the act, entitled “ An act to' establish the treasury department.”

I have the honour to be, very respectfully, sir, your obedient servant,


Acting Secretary of the Treasury. The Honourable the Speaker

of the House of Representatives. In obedience to the act “Supplementary to the act, entitled

“ An act to establish the treasury department,” the acting secretary of the treasury respectfully submits the following


The receipts into the treasury from the first

of October, 1812, to the 31st of March, 1813, have amounted to

$ 15,412,416 25 The balance in the treasury on the 30th of September, 1812, was

2,362,652 69

Making together $ 17,775,068 94 The expenditures from the first of October,

1812, to the 31st of March, 1813, have amounted to

$ 15,919,334 41 Leaving a balance in the treasury on 1st of April, 1813, of

1,855,734 53

$ 17,775,068 94

The enclosed statement (A) shows in detail the several sources from which the receipts were derived, and the branches of expenditure to which the disbursements from the treasury were applied.

Pursuant to the act of the 8th of February last, subscriptions for a loan of sixteen millions of dollars were opened on the 12th and again on the 25th of March last. But although a thirteen years' annuity of one per cent. was offered in addition to a six per cent. stock at par, for the money which might be subscribed, it being apparent from the result of the first subscription, that the whole amount could not be obtained on those terms, proposals in writing were invited. Offers, exceeding by about a million of dollars the amount wanted, were received, some demanding a thirteen year's annuity of one and a half per cent. in addition to six per cent. stock at par, but most of them requiring a six per cent. stock at the rate of 88 per cent. On these terms, leaving to the subscribers the option, the loan was effected. In conformity with the public notification, the same terms were extended to those persons who had subscribed on the first opening of the subscription, and they have the same option ;which, if the stock at the rate of 88 per cent. be taken, is equivalent precisely to a premium of 13 dollars 63 cents and i of a cent for each hundred dollars loaned to government. The enclosed papers under the letter (B) are copies of the several public notices given on the subject, and a statement of the monits respectively obtained by open subscriptions and by written proposals, and showing also the sums obtained and payable in each place where subscriptions were opened. Of that sum of sixteen millions of dollars thus obtained on loan, there was paid into the treasury, prior to the 1st of April, 1813, the sum of $ 1,086,737 50, which makes a part of the monies received previous to that day, as stated in the statement (A).

The resources for the residue of the year 1813, consist of the following items, viz. : 1. The remainder of the loan above mentioned

$ 14,913,262 50 2. The sums payable on account of cus

toms and of the sales of public lands, es-
timated at

9,320,000 00 3. The five millions of dollars in treasury

notes, authorised by the act of February
25, 1813

5,000,000 00

Say $ 29,230,000 00 The expenses for the last nine months of the present year are calculated as followeth, viz. : 1. Civil list, and all expenses of a civil nature, both foreign and domestic

900,000 00 2. Payments on account of the principal and interest of the public debt

10,510,000 00 3. Expenses on account of the war and navy departments

17,820,000 00

$ 29,230,000 00 Of the sum of 8 1,855,734 53, remaining in the treasury on the first of April last, a small part may be considered as applicable to such extraordinary expenses already authorised, as may arise during the remainder of the year; and for the same object, the sum of one million of dollars, authorised by an act of the state of Pennsylvania to be loaned to the United States, but wnich was not offered in time to be accepted as a part of the loan of sixteen millions, may be considered as a resource.

In this estimate the whole sum of five millions of dollars authorised to be issued in treasury notes, is taken as a part of the resources of the present year. But as it is not deemed eligible to increase the amount of treasury notes in circulation, and as three millions only of those authorised by the act of 1812 were issued in that year, and are reimburseable in the course of the present year, it is respectfully suggested, that in lieu of two millions of the five millions authorised by the act of February, 1813, congress should authorise an additional loan for the same amount, it being made a condition of such loan that its terms should not be higher than those of the loan of sixteen millions already effected. The provision already considered is for the service of the present year only. That which will be necessary for the year 1814 requires an early attention.

It is difficult to estimate with accuracy the sum which will be received into the treasury from the revenue as now established. During a state of war, the customs, at the present rate of duties, have been heretofore estimated to produce five millions of dollars. The additional tonnage duty imposed upon foreign vessels by the act of the first of July, 1812, producing about 200,000 dollars a year, is not included in that sum. It is believed that, during the year 1814, a greater sum than five millions two hundred thousand dollars ought to be relied upon as receivable into the treasury from custom-house duties. The sum arising from sales of public lands may be estimated at six hundred thousand dollars, making together 5,800,000 dollars.-The interest alone, on the public funded debt, on temporary

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