On the 31st of March last I caused an order to be issued to our military and naval commanders to levy and collect a military contribution upon all vessels and merchandise which might enter any of the ports of Mexico in our military occupation, and to apply such contributions toward defraying the expenses of the war. By virtue of the right of conquest and the laws of war, the conqueror, consulting his own safety or convenience, may either exclude foreign commerce altogether from all such ports or permit it upon such terms and conditions as he may prescribe. Before the principal ports of Mexico were blockaded by our Navy the revenue derived from import duties under the laws of Mexico was paid into the Mexican treasury. After these ports had fallen into our military possession the blockade was raised and commerce with them permitted upon prescribed terms and conditions. They were opened to the trade of all nations upon the payment of duties more moderate in their amount than those which had been previously levied by Mexico, and the revenue, which was formerly paid into the Mexican treasury, was directed to be collected by our military and naval officers and applied co the use of our Army and Navy. Care was taken that the officers, soldiers, and sailors of our Army and Navy should be exempted from the operations of the order, and, as the merchandise imported upon which the order operated must be consumed by Mexican citizens, the contributions exacted were in effect the seizure of the public revenues of Mexico and the application of them to our own use. In directing this measure the object was to compel the enemy to contribute as far as practicable toward the expenses of the war. For the amount of contributions which have been levied in this form I refer you to the accompanying reports of the Secretary of War and of the Secretary of the Navy, by which it appears that a sum exceeding half a million of dollars has been collected. This amount would undoubtedly have been much larger but for the difficulty of keeping open communications between the coast and the interior, so as to enable the owners of the merchandise imported to transport and vend it to the inhabitants of the country. It is confidently expected that this difficulty will to a great extent be soon removed by our increased forces which have been sent to the field. Measures have recently been adopted by which the internal as well as the external revenues of Mexico in all places in our military occupation will be seized and appropriated to the use of our Army and Navy.