In the month of August last the Sioux Indians in Minnesota attacked the settlements in their vicinity with extreme ferocity, killing indiscriminately men, women, and children.  This attack was wholly unexpected, and therefore no means of defense had been prodded.  It is estimated that not less than 800 persons were killed by the Indians, and a large amount of property was destroyed.  How this outbreak was induced is not definitely known, and suspicions, which may be unjust, need not to be stated.  Information was received by the Indian Bureau from different sources about the time hostilities were commenced that a simultaneous attack was to be made upon the white settlements by all the tribes between the Mississippi River and the Rocky Mountains.  The State of Minnesota has suffered great injury from this Indian war.  A large portion of her territory has been depopulated, and a severe loss has been sustained by the destruction of property.  The people of that State manifest much anxiety for the removal of the tribes beyond the limits of the State as a guaranty against future hostilities.  The Commissioner of Indian Affairs will furnish full details.  I submit for your especial consideration whether our Indian system shall not be remodeled.  Many wise and good men have impressed me with the belief that this can be profitably done.

I submit a statement of the proceedings of commissioners, which shows the progress that has been made in the enterprise of constructing the Pacific Railroad.  And this suggests the earliest completion of this road, and also the favorable action of Congress upon the projects now pending before them for enlarging the capacities of the great canals in New York and Illinois, as being of vital and rapidly increasing importance to the whole nation, and especially to the vast interior region hereinafter to be noticed at some greater length.  I purpose having prepared and laid before you at an early day some interesting and valuable statistical information upon this subject.  The military and commercial importance of enlarging the Illinois and Michigan Canal and improving the Illinois River is presented in the report of Colonel Webster to the Secretary of War, and now transmitted to Congress.  I respectfully ask attention to it.

To carry out the provisions of the act of Congress of the 15th of May last, I have caused the Department of Agriculture of the United States to be organized.

The Commissioner informs me that within the period of a few months this Department has established an extensive system of correspondence and exchanges, both at home and abroad, which promises to effect highly beneficial results in the development of a correct knowledge of recent improvements in agriculture, in the introduction of new products, and in the collection of the agricultural statistics of the different States.

Also, that it will soon be prepared to distribute largely seeds, cereals, plants, and cuttings, and has already published and liberally diffused much valuable information in anticipation of a more elaborate report, which will in due time be furnished, embracing some valuable tests in chemical science now in progress in the laboratory.