The negotiation with Spain for spoliations on our commerce and the settlement of boundaries remains essentially in the state it held by the communications that were made to Congress by my predecessor. It has been evidently the policy of the Spanish Government to keep the negotiation suspended, and in this the United States have acquiesced, from an amicable disposition toward Spain and in the expectation that her Government would, from a sense of justice, finally accede to such an arrangement as would be equal between the parties. A disposition has been lately shown by the Spanish Government to move in the negotiation, which has been met by this Government, and should the conciliatory and friendly policy which has invariably guided our councils be reciprocated, a just and satisfactory arrangement maybe expected. It is proper, however, to remark that no proposition has yet been made from which such a result can be presumed. It was anticipated at an early stage that the contest between Spain and the colonies would become highly interesting to the United States. It was natural that our citizens should sympathize in events which affected their neighbors. It seemed probable also that the prosecution of the conflict along our coast and in contiguous countries would occasionally interrupt our commerce and otherwise affect the persons and property of our citizens. These anticipations have been realized. Such injuries have been received from persons acting under authority of both the parties, and for which redress has in most instances been withheld. Through every stage of the conflict the United States have maintained an impartial neutrality, giving aid to neither of the parties in men, money, ships, or munitions of war. They have regarded the contest not in the light of an ordinary insurrection or rebellion, but as a civil war between parties nearly equal, having as to neutral powers equal rights. Our ports have been open to both, and every article the fruit of our soil or of the industry of our citizens which either was permitted to take has been equally free to the other. Should the colonies establish their independence, it is proper now to state that this Government neither seeks nor would accept from them any advantage in commerce or otherwise which will not be equally open to all other nations. The colonies will in that event become independent states, free from any obligation to or connection with us which it may not then be their interest to form on the basis of a fair reciprocity.