The Secretary of State having understood from communications with the commissioners of His Catholic Majesty, subsequent to that which he reported to the President on the 22d of December last, that though they considered the navigation of the Mississippi as the principal object of negotiation between the two countries, yet it was expected by their Court that the conferences would extend to all the matters which were under negotiation on the former occasion with Mr. Gardoqui, and particularly to some arrangements of commerce, is of opinion that to renew the conferences on this subject also, since they desire it, will be but friendly and respectful, and can lead to nothing without our own consent, and that to refuse it might obstruct the settlement of the questions of navigation and boundary; and therefore reports to the President of the United States the following observations and instructions to the commissioners of the United States appointed to negotiate with the Court of Spain a treaty or convention relative to the navigation of the Mississippi, which observations and instructions he is of opinion should be laid before the Senate of the United States, and their decision be desired whether they will advise and consent that a treaty be entered into by the commissioners of the United States with Spain conformably thereto. After stating to our commissioners the foundation of our rights to navigate the Mississippi and to hold our southern boundary at the thirty-first degree of latitude, and that each of these is to be a sine qua non, it is proposed to add as follows: On the former conferences on the navigation of the Mississippi, Spain chose to blend with it the subject of commerce, and accordingly specific propositions thereon passed between the negotiators. Her object then was to obtain our renunciation of the navigation and to hold out commercial arrangements perhaps as a lure to us. Perhaps, however, she might then, and may now, really set a value on commercial arrangements with us, and may receive them as a consideration for accommodating us in the navigation, or may wish for them to have the appearance of receiving a consideration. Commercial arrangements, if acceptable in themselves, will not be the less so if coupled with those relating to navigation and boundary. We have only to take care that they be acceptable in themselves. There are two principles which may be proposed as the basis of a commercial treaty: First, that of exchanging the privileges of native citizens, or, second, those of the most favored nation.