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

It is conceived that it will be natural and very proper for the President in the beginning of his Address, to advert to the deplorable situation to which several of our principal cities have been reduced by contagious or epidemic sickness during the last season;—And when it is considered that similar disorders, have successively appeared in different places; that the loss of thousands of lives; the sacrefice of property & time and the stagnation of public and private business are evils of immense magnitude which deeply affect the national Interests; it may be proper to invite the Legislature to examine the expediency of establishing suitable regulations in aid of those provided by the respective States, for investigating the causes, arresting the progress or mitigating the effects, of like calamities in future.

It will probably be asserted by some, that Congress have no constitutional power to legislate on a subject of this kind, but it is presumed that all objections of this nature may be refuted;—and while the health Laws of the respective states, proceed upon the supposition that contagious sickness may be communicated through the channells of commercial intercourse, there seems to be a necessity that Congress who alone can regulate Trade, should frame a system, which while it may tend to preserve the general health, may be compatible with the Interests of Commerce and the safety of the Revenue.

The state of our foreign relations particularly with France being a subject of the first importance will of course constitute a principal topic of the Address.

It is believed that France has no sincere disposition and it is questioned whether she possesses the ability to maintain any engagements upon which the United States can rely with confidence and tranquillity;—though there appears to be an unwillingness to open rupture yet there exist no symptoms of a desire for real peace: the system of self aggrandizement at the expence of every nation within her power, still continues to be enforced: it may therefore be presumed that her treatment of us, will be governed not by present professions, but by the views which she may from time to time take of her own Interest;—we can only perceive in her last Acts either a vindictive recollection of antient controversies or shameless pretexts for the gratification of unbounded ambition—Common prudence therefore requires of us, to see in the pacific overtures of such a Nation nothing more than an insidious design to fester divisions in our Country and unnerve the vigour of our Councils and measures of defence.

The condition views and policy of the United States are in every respect opposite<of > to those of France; we have no national ambition to gratify, which cannot be but indulged, by being left to develope the resources which we possess;—the great object of the United States is therefore to attain peace with all the world;—having been injured by France, having sought reparation without success, and having no confidence in the equity of her Government, a system has been adopted of which the following are the principles.

1st. To arm internally and otherwise provide against invasion.

2nd. To desist from all commercial or political intercourse.

3d. To defend our Commerce by force & to destroy the means of annoyance employed by France.

The situation of the United States in respect to France may be considered as anomalous; we cannot be said strictly to be either at peace or in a state of War;—we are as much at peace as is safe or indeed possible, considering the diversity of the views and characters of the American and French people;—we have not formally declared War, because we do not wish to conquer any of the dominions of France and because she possesses no Commerce or property upon which we can make reprisals.

This situation is attended with advantages & disadvantages which require consideration.

The advantages of our situation are, that by abstaining from any and every degree of hostility not required by some present and immediate Interest; public opinion is consulted and its favours secured;—responsibility for misfortunes is diminished odium is accumulated upon France not only in America, but through the world, and the energy of her power and influence diminished.

The disadvantages of our situation are that untill War is declared, there will constantly be some danger, that the intreagues of France, will be successful in producing a revulsion of public opinion, which may compel a premature & dangerous accomodation, upon which no reliance can be placed;—that her measures will continue to be justified or at least palliated, while those of this Government will be misrepresented and censured—that our system of defence, will be exposed to be weekened by delusive proposals for negociations; and generally, that by continuing in a state, which cannot be defined as being either peace or War, the Government will be deprived of those rights and powers, both with respect to the domestic partizans of France and Neutral Nations, which would result from an open and avowed state of hostility.

There is moreover another circumstance, which must be deemed an advantage or disadvantage incident to our situation, according to the opinion which may be formed, respecting the expediency or inexpediency, of an Alliance with Great Britain.

Of the practicability of forming such an Alliance there can be little doubt, and to obtain this object a declared state of War is necessary, or at least would be a resulting consequence. The expediency of such an Alliance is however diminished by the recent reduction of the French Marine and by the prospect of other disasters which threaten the power and influence of that nation in Europe, and which of course lessen her ability to invade the United States.

The result of the foregoing reflections is, that a declaration of War, considering the present state of public opinion and other circumstances, is inexpedient and ought not to be recommended;—that it is the true policy of the Government to retain its present position; to invigorate the system of defence; to baffle skill by skill; and to preoccupy the ground which France has attempted to take and which being siezed by her, would serve as the rallying point of opposition to the Government;—As France continues to annoy us, and at the same to profess friendly sentiments and intentions, we ought to continue our resistance, offering at the same time in a dignified manner, to put the sincerity of her intentions to the test.—By avoiding all inconsistency and preserving the confidence which has been gained, by choosing the situation in which to receive an Attack or from which to repel intreagues; by compelling France either to desist from her present plan or in the pursuit, to make reparation for the wounded honour of the United States, and moreover, by a firm confidence in the moral sense of the American people it is believed that all difficulties may be surmounted.

If the principles beforementioned shall be approved, the following is deemed a proper stile for this part of the Address.

The course of the transactions between the United States and France which have come to my knowledge during your recess, will be seen in a communication which by my direction, will be laid before you, from the Department of State. This will confirm to you the ultimate failure of the measures, which have been taken by this Government, towards an amicable adjustment of differences. You will at the same time perceive that the French Government now appears solicitous to impress the opinion, that it averse from rupture with this Country & that it has in a qualified manner, declared itself willing to receive a Minister from us, for restoring a good understanding.

It is unfortunate for professions of this kind that they are accompanied with any intimation, that may countenance the assertion of a right to pronounce on the qualifications of a Minister from the United States, and that while France asserts the existence of a persevering intention on her part, to conciliate with sincerity the differences which have arisen, the sincerity of a like disposition on the part of this Government, should be even indirectly questioned.—It is also worthy of observation that as yet we have experienced no advantages from the decree, which was alledged to be intended to restrain French Cruizers from depredations on our Commerce, and that the decree of which among other injurious regulations, subjects to seizure and confiscation, commodities of British fabric & consumption, in neutral Vessells, though the property of Neutrals, has not only not been rescinded, but has even received a recent confirmation, by the failure of a proposition for its repeal. While this decree which is an unequivocal act of War, on the commerce of the Nations it attacks continues in force, those Nations can only see in the French Government a power regardless of their essential rights, of their independence & their sovereignty, and if they possess the means, they can reconcile nothing with their Interest & honour, but a firm resistance. Hitherto therefore I discover nothing in the conduct of the French Government which ought to change or relax our measures of defence. On the contrary to invigorate them is in my judgement and true policy. We have no reason to regret, that this system has thus far been pursued and in proportion as we enlarge our view of the incalculable situation of Europe we shall discover new and cogent motives for the full developement of our resources & energies. In demonstrating by our conduct, that we do not fear War, in the necessary protection of our rights and honour, we shall give no room to infer, that we abandon the desire of peace;—this has been wisely and perseveringly cultivated, and as between us and France harmony may be reestablished at her option.

But the sending another Minister to make a new attempt at negociation, would in my opinion be an Act of humiliation to which the United States ought not to submit without extreme necessity;—no such necessity exists; it must therefore be left with France if she be indeed desirous of accomodation to take the requisite steps.—The United States adhere to the maxims by which they have been governed; they will sacredly respect the rights of Embassy, their magnanimity discards the policy of retaliating insult in bar of the avenues <of> to peace, and if France shall send a Minister to negociate, he will be recd. with honour & treated with candour, and with a sincere disposition on her part to desist from hostility, to make reparation for the injuries heretofore inflicted on our Commerce, and to do justice in future, there will be no obstacle to the restoration of friendly intercource on a substantial basis—In making this declaration to you, I give a pledge to the French Government & to the world, that the Executive power of this Country, still adheres to the humane and pacific policy, which has uniformly governed its proceedings, & reecchoed the wishes, of the other branches of the government, and people of the United States.

The Secy will submit further observations on other subjects of the address as soon as possible. for the present he subscribes himself with all possible deference—