UCHANAN.

WASHINGTON CITY, _February 12, 1861_.

_To the Senate of the United States_:

I herewith submit to the Senate, for their advice, the proceedings and
award of the commissioners under the convention between the United
States of America and the Republic of Paraguay, proclaimed by the
President on the 12th of March, 1860. It is decided by the award of
these commissioners that "the United States and Paraguay Navigation
Company have not proved or established any right to damages upon their
said claim against the Government of the Republic of Paraguay, and that
upon the proofs aforesaid the said Government is not responsible to the
said company in any damages or pecuniary compensation whatever in all
the premises."

The question arises, Had the commissioners authority under the
convention to make such an award, or were they not confined to the
assessment of damages which the company had sustained from the
Government of Paraguay?

Our relations with that Republic had for years been of a most
unsatisfactory character. They had been investigated by the preceding
and by the present Administration. The latter came to the conclusion
that both the interest and honor of the country required that our rights
against that Government for their attack on the _Water Witch_ and for
the injuries they had inflicted on this company should, if necessary, be
enforced. Accordingly, the President in his annual message of December,
1857, called the attention of Congress to the subject in the following
language:

A demand for these purposes will be made in a firm but conciliatory
spirit. This will the more probably be granted if the Executive shall
have authority to use other means in the event of a refusal. This is
accordingly recommended.

After due deliberation, Congress, on the 2d of June, 1858, authorized
the President "to adopt such measures and use such force as in his
judgment may be necessary and advisable" in the premises. A commissioner
was accordingly appointed and a force fitted out and dispatched to
Paraguay for the purpose, if necessary, of enforcing atonement for these
wrongs.

The expedition appeared in the waters of the La Plata and our
commissioner succeeded in concluding a treaty and convention embracing
both branches of our demand. The convention of indemnity was signed on
the 4th of February, 1859. The preamble of this convention refers to the
interruption for a time of the good understanding and harmony