Among our Indian neighbors in the northwestern quarter some fermentation was observed soon after the late occurrences, threatening the continuance of our peace. Messages were said to be interchanged and tokens to be passing, which usually denote a state of restless among them, and the character of the agitators pointed to the sources of excitement. Measures were immediately taken for providing against that danger; instructions were given to require explanations, and, with assurances of our continued friendship, to admonish the tribes to remain quiet at home, taking no part in quarrels not belonging to them. As far as we are yet informed, the tribes in our vicinity, who are most advanced in the pursuits of industry, are sincerely disposed to adhere to their friendship with us and to their peace with all others, while those more remote do not present appearances sufficiently quiet to justify the intermission of military precaution on our part.

The great tribes on our southwestern quarter, much advanced beyond the others in agriculture and household arts, appear tranquil and identifying their views with ours in proportion to their advancement. With the whole of these people, in every quarter, I shall continue to inculcate peace and friendship with all their neighbors and perseverance in those occupations and pursuits which will best promote their own well-being.

The appropriations of the last session for the defense of our sea port towns and harbors were made under expectation that a continuance of our peace would permit us to proceed in that work according to our convenience. It has been thought better to apply the sums then given toward the defense of New York, Charleston, and New Orleans chiefly, as most open and most likely first to need protection, and to leave places less immediately in danger to the provisions of the present session.

The gun boats, too, already provided have on a like principle been chiefly assigned to New York, New Orleans, and the Chesapeake. Whether our movable force on the water, so material in aid of the defensive works on the land, should be augmented in this or any other form is left to the wisdom of the Legislature. For the purpose of manning these vessels in sudden attacks on our harbors it is a matter for consideration whether the sea men of the United States may not justly be formed into a special militia, to be called on for tours of duty in defense of the harbors where they shall happen to be, the ordinary militia of the place furnishing that portion which may consist of landsmen.

The moment our peace was threatened I deemed it indispensable to secure a greater provision of those articles of military stores with which our magazines were not sufficiently furnished. To have awaited a previous and special sanction by law would have lost occasions which might not be retrieved. I did not hesitate, therefore, to authorize engagements for such supplements to our existing stock as would render it adequate to the emergencies threatening us, and I trust that the Legislature, feeling the same anxiety for the safety of our country, so materially advanced by this precaution, will approve, when done, what they would have seen so important to be done if then assembled. Expenses, also unprovided for, arose out of the necessity of calling all our gun boats into actual service for the defense of our harbors; all of which accounts will be laid before you.

Whether a regular army is to be raised, and to what extent, must depend on the information so shortly expected. In the mean time I have called on the States for quotas of militia, to be in readiness for present defense, and have, moreover, encouraged the acceptance of volunteers; and I am happy to inform you that these have offered themselves with great alacrity in every part of the Union. They are ordered to be organized and ready at a moment's warning to proceed on any service to which they may be called, and every preparation within the Executive powers has been made to insure us the benefit of early exertions.

I informed Congress at their last session of the enterprises against the public peace which were believed to be in preparation by Aaron Burr and his associates, of the measures taken to defeat them and to bring the offenders to justice. Their enterprises were happily defeated by the patriotic exertions of the militia whenever called into action, by the fidelity of the Army, and energy of the commander in chief in promptly arranging the difficulties presenting themselves on the Sabine, repairing to meet those arising on the Mississippi, and dissipating before their explosion plots engendering there. I shall think it my duty to lay before you the proceedings and the evidence publicly exhibited on the arraignment of the principal offenders before the circuit court of Virginia.

You will be enabled to judge whether the defect was in the testimony, in the law, or in the administration of the law; and wherever it shall be found, the Legislature alone can apply or originate the remedy. The framers of our Constitution certainly supposed they had guarded as well their Government against destruction by treason as their citizens against oppression under pretense of it, and if these ends are not attained it is of importance to inquire by what means more effectual they may be secured.

The accounts of the receipts of revenue during the year ending on the 30th day of September last being not yet made up, a correct statement will be hereafter transmitted from the Treasury. In the mean time, it is ascertained that the receipts have amounted to near $16 millions, which, with the $5.5 millions in the Treasury at the beginning of the year, have enabled us, after meeting the current demands and interest incurred, to pay more than $4 millions of the principal of our funded debt. These payments, with those of the preceding five and a half years, have extinguished of the funded debt $25.5 millions, being the whole which could be paid or purchased within the limits of the law and of our contracts, and have left us in the Treasury $8.5 millions.

A portion of this sum may be considered as a commencement of accumulation of the surpluses of revenue which, after paying the installments of debt as they shall become payable, will remain without any specific object. It may partly, indeed, be applied toward completing the defense of the exposed points of our country, on such a scale as shall be adapted to our principles and circumstances. This object is doubtless among the first entitled to attention in such a state of our finances, and it is one which, whether we have peace or war, will provide security where it is due. Whether what shall remain of this, with the future surpluses, may be usefully applied to purposes already authorized or more usefully to others requiring new authorities, or how otherwise they shall be disposed of, are questions calling for the notice of Congress, unless, indeed, they shall be superseded by a change in our public relations now awaiting the determination of others. Whatever be that determination, it is a great consolation that it will become known at a moment when the supreme council of the nation is assembled at its post, and ready to give the aids of its wisdom and authority to whatever course the good of our country shall then call us to pursue.