The measure adopted of establishing trading houses among them and of
furnishing them necessaries in exchange for their commodities at such
moderate prices as leave no gain, but cover us from loss, has the most
conciliatory and useful effect on them, and is that which will best
secure their peace and good will.

The small vessels authorized by Congress with a view to the
Mediterranean service have been sent into that sea, and will be able
more effectually to confine the Tripoline cruisers within their harbors
and supersede the necessity of convoy to our commerce in that quarter.
They will sensibly lessen the expenses of that service the ensuing year.

A further knowledge of the ground in the northeastern and northwestern
angles of the United States has evinced that the boundaries established
by the treaty of Paris between the British territories and ours in those
parts were too imperfectly described to be susceptible of execution.
It has therefore been thought worthy of attention for preserving and
cherishing the harmony and useful intercourse subsisting between the
two nations to remove by timely arrangements what unfavorable incidents
might otherwise render a ground of future misunderstanding. A convention
has therefore been entered into which provides for a practicable
demarcation of those limits to the satisfaction of both parties.

An account of the receipts and expenditures of the year ending the 30th
of September last, with the estimates for the service of the ensuing
year, will be laid before you by the Secretary of the Treasury so soon
as the receipts of the last quarter shall be returned from the more
distant States. It is already ascertained that the amount paid into the
Treasury for that year has been between $11,000,000 and $12,000,000, and
that the revenue accrued during the same term exceeds the sum counted on