To the Congress of the United States:

As you assemble for the discharge of the duties you have assumed as the
representatives of a free and generous people, your meeting is marked by an
interesting and impressive incident. With the expiration of the present
session of the Congress the first century of our constitutional existence
as a nation will be completed.

Our survival for one hundred years is not sufficient to assure us that we
no longer have dangers to fear in the maintenance, with all its promised
blessings, of a government rounded upon the freedom of the people. The time
rather admonishes us to soberly inquire whether in the past we have always
closely kept in the course of safety, and whether we have before us a way
plain and clear which leads to happiness and perpetuity.

When the experiment of our Government was undertaken, the chart adopted for
our guidance was the Constitution. Departure from the lines there laid down
is failure. It is only by a strict adherence to the direction they indicate
and by restraint within the limitations they fix that we can furnish proof
to the world of the fitness of the American people for self-government.

The equal and exact justice of which we boast as the underlying principle
of our institutions should not be confined to the relations of our citizens
to each other. The Government itself is under bond to the American people
that in the exercise of its functions and powers it will deal with the body
of our citizens in a manner scrupulously honest and fair and absolutely
just. It has agreed that American citizenship shall be the only credential
necessary to justify the claim of equality before the law, and that no
condition in life shall give rise to discrimination in the treatment of the
people by their Government.

The citizen of our Republic in its early days rigidly insisted upon full
compliance with the letter of this bond, and saw stretching out before him
a clear field for individual endeavor. His tribute to the support of his
Government was measured by the cost of its economical maintenance, and he
was secure in the enjoyment of the remaining recompense of his steady and
contented toil. In those days the frugality of the people was stamped upon
their Government, and was enforced by the free, thoughtful, and intelligent
suffrage of the citizen. Combinations, monopolies, and aggregations of
capital were either avoided or sternly regulated and restrained. The pomp
and glitter of governments less free offered no temptation and presented no
delusion to the plain people who, side by side, in friendly competition,
wrought for the ennoblement and dignity of man, for the solution of the
problem of free government, and for the achievement of the grand destiny
awaiting the land which God had given them.

A century has passed. Our cities are the abiding places of wealth and
luxury; our manufactories yield fortunes never dreamed of by the fathers of
the Republic; our business men are madly striving in the race for riches,
and immense aggregations of capital outrun the imagination in the magnitude
of their undertakings.

We view with pride and satisfaction this bright picture of our country's
growth and prosperity, while only a closer scrutiny develops a somber
shading. Upon more careful inspection we find the wealth and luxury of our
cities mingled with poverty and wretchedness and unremunerative toil. A
crowded and constantly increasing urban population suggests the
impoverishment of rural sections and discontent with agricultural pursuits.
The farmer's son, not satisfied with his father's simple and laborious
life, joins the eager chase for easily acquired wealth.

We discover that the fortunes realized by our manufacturers are no longer
solely the reward of sturdy industry and enlightened foresight, but that
they result from the discriminating favor of the Government and are largely
built upon undue exactions from the masses of our people. The gulf between
employers and the employed is constantly widening, and classes are rapidly
forming, one comprising the very rich and powerful, while in another are
found the toiling poor.

As we view the achievements of aggregated capital, we discover the
existence of trusts, combinations, and monopolies, while the citizen is
struggling far in the rear or is trampled to death beneath an iron heel.
Corporations, which should be the carefully restrained creatures of the law
and the servants of the people, are fast becoming the people's masters.

Still congratulating ourselves upon the wealth and prosperity of our
country and complacently contemplating every incident of change inseparable
from these conditions, it is our duty as patriotic citizens to inquire at
the present stage of our progress how the bond of the Government made with
the people has been kept and performed.

Instead of limiting the tribute drawn from our citizens to the necessities
of its economical administration, the Government persists in exacting from
the substance of the people millions which, unapplied and useless, lie
dormant in its Treasury. This flagrant injustice and this breach of faith
and obligation add to extortion the danger attending the diversion of the
currency of the country from the legitimate channels of business.

Under the same laws by which these results are produced the Government
permits many millions more to be added to the cost of the living of our
people and to be taken from our consumers, which unreasonably swell the
profits of a small but powerful minority.

The people must still be taxed for the support of the Government under the
operation of tariff laws. But to the extent that the mass of our citizens
are inordinately burdened beyond any useful public purpose and for the
benefit of a favored few, the Government, under pretext of an exercise of
its taxing power, enters gratuitously into partnership with these
favorites, to their advantage and to the injury of a vast majority of our
people.

This is not equality before the law.

The existing situation is injurious to the health of our entire body
politic. It stifles in those for whose benefit it is permitted all
patriotic love of country, and substitutes in its place selfish greed and
grasping avarice. Devotion to American citizenship for its own sake and for
what it should accomplish as a motive to our nation's advancement and the
happiness of all our people is displaced by the assumption that the
Government, instead of being the embodiment of equality, is but an
instrumentality through which especial and individual advantages are to be
gained.

The arrogance of this assumption is unconcealed. It appears in the sordid
disregard of all but personal interests, in the refusal to abate for the
benefit of others one iota of selfish advantage, and in combinations to
perpetuate such advantages through efforts to control legislation and
improperly influence the suffrages of the people.

The grievances of those not included within the circle of these
beneficiaries, when fully realized, will surely arouse irritation and
discontent. Our farmers, long suffering and patient, struggling in the race
of life with the hardest and most unremitting toil, will not fail to see,
in spite of misrepresentations and misleading fallacies, that they are
obliged to accept such prices for their products as are fixed in foreign
markets where they compete with the farmers of the world; that their lands
are declining in value while their debts increase, and that without
compensating favor they are forced by the action of the Government to pay
for the benefit of others such enhanced prices for the things they need
that the scanty returns of their labor fail to furnish their support or
leave no margin for accumulation.

Our workingmen, enfranchised from all delusions and no longer frightened by
the cry that their wages are endangered by a just revision of our tariff
laws, will reasonably demand through such revision steadier employment,
cheaper means of living in their homes, freedom for themselves and their
children from the doom of perpetual servitude, and an open door to their
advancement beyond the limits of a laboring class. Others of our citizens,
whose comforts and expenditures are measured by moderate salaries and fixed
incomes, will insist upon the fairness and justice of cheapening the cost
of necessaries for themselves and their families.

When to the selfishness of the beneficiaries of unjust discrimination under
our laws there shall be added the discontent of those who suffer from such
discrimination, we will realize the fact that the beneficent purposes of
our Government, dependent upon the patriotism and contentment of our
people, are endangered.

Communism is a hateful thing and a menace to peace and organized
government; but the communism of combined wealth and capital, the outgrowth
of overweening cupidity and selfishness, which insidiously undermines the
justice and integrity of free institutions, is not less dangerous than the
communism of oppressed poverty and toil, which, exasperated by injustice
and discontent, attacks with wild disorder the citadel of rule.

He mocks the people who proposes that the Government shall protect the rich
and that they in turn will care for the laboring poor. Any intermediary
between the people and their Government or the least delegation of the care
and protection the Government owes to the humblest citizen in the land
makes the boast of free institutions a glittering delusion and the
pretended boon of American citizenship a shameless imposition.

A just and sensible revision of our tariff laws should be made for the
relief of those of our countrymen who suffer under present conditions. Such
a revision should receive the support of all who love that justice and
equality due to American citizenship; of all who realize that in this
justice and equality our Government finds its strength and its power to
protect the citizen and his property; of all who believe that the contented
competence and comfort of many accord better with the spirit of our
institutions than colossal fortunes unfairly gathered in the hands of a
few; of all who appreciate that the forbearance and fraternity among our
people, which recognize the value of every American interest, are the
surest guaranty of our national progress, and of all who desire to see the
products of American skill and ingenuity in every market of the world, with
a resulting restoration of American commerce.

The necessity of the reduction of our revenues is so apparent as to be
generally conceded, but the means by which this end shall be accomplished
and the sum of direct benefit which shall result to our citizens present a
controversy of the utmost importance. There should be no scheme accepted as
satisfactory by which the burdens of the people are only apparently
removed. Extravagant appropriations of public money, with all their
demoralizing consequences, should not be tolerated, either as a means of
relieving the Treasury of its present surplus or as furnishing pretext for
resisting a proper reduction in tariff rates. Existing evils and injustice
should be honestly recognized, boldly met, and effectively remedied. There
should be no cessation of the struggle until a plan is perfected, fair and
conservative toward existing industries, but which will reduce the cost to
consumers of the necessaries of life, while it provides for our
manufacturers the advantage of freer raw materials and permits no injury to
the interests of American labor.

The cause for which the battle is waged is comprised within lines clearly
and distinctly defined. It should never be compromised. It is the people's
cause.

It can not be denied that the selfish and private interests which are so
persistently heard when efforts are made to deal in a just and
comprehensive manner with our tariff laws are related to, if they are not
responsible for, the sentiment largely prevailing among the people that the
General Government is the fountain of individual and private aid; that it
may be expected to relieve with paternal care the distress of citizens and
communities, and that from the fullness of its Treasury it should, upon the
slightest possible pretext of promoting the general good, apply public
funds to the benefit of localities and individuals. Nor can it be denied
that there is a growing assumption that, as against the Government and in
favor of private claims and interests, the usual rules and limitations of
business principles and just dealing should be waived.

These ideas have been unhappily much encouraged by legislative
acquiescence. Relief from contracts made with the Government is too easily
accorded in favor of the citizen; the failure to support claims against the
Government by proof is often supplied by no better consideration than the
wealth of the Government and the poverty of the claimant; gratuities in the
form of pensions are granted upon no other real ground than the needy
condition of the applicant, or for reasons less valid; and large sums are
expended for public buildings and other improvements upon representations
scarcely claimed to be related to public needs and necessities.

The extent to which the consideration of such matters subordinate and
postpone action upon subjects of great public importance, but involving no
special private or partisan interest, should arrest attention and lead to
reformation.

A few of the numerous illustrations of this condition may be stated.

The crowded condition of the calendar of the Supreme Court, and the delay
to suitors and denial of justice resulting therefrom, has been strongly
urged upon the attention of the Congress, with a plan for the relief of the
situation approved by those well able to judge of its merits. While this
subject remains without effective consideration, many laws have been passed
providing for the holding of terms of inferior courts at places to suit the
convenience of localities, or to lay the foundation of an application for
the erection of a new public building.

Repeated recommendations have been submitted for the amendment and change
of the laws relating to our public lands so that their spoliation and
diversion to other uses than as homes for honest settlers might be
prevented. While a measure to meet this conceded necessity of reform
remains awaiting the action of the Congress, many claims to the public
lands and applications for their donation, in favor of States and
individuals, have been allowed.

A plan in aid of Indian management, recommended by those well informed as
containing valuable features in furtherance of the solution of the Indian
problem, has thus far failed of legislative sanction, while grants of
doubtful expediency to railroad corporations, permitting them to pass
through Indian reservations, have greatly multiplied.

The propriety and necessity of the erection of one or more prisons for the
confinement of United States convicts, and a post-office building in the
national capital, are not disputed. But these needs yet remain answered,
while scores of public buildings have been erected where their necessity
for public purposes is not apparent.

A revision of our pension laws could easily be made which would rest upon
just principles and provide for every worthy applicant. But while our
general pension laws remain confused and imperfect, hundreds of private
pension laws are annually passed, which are the sources of unjust
discrimination and popular demoralization.

Appropriation bills for the support of the Government are defaced by items
and provisions to meet private ends, and it is freely asserted by
responsible and experienced parties that a bill appropriating money for
public internal improvement would fail to meet with favor unless it
contained items more for local and private advantage than for public
benefit.

These statements can be much emphasized by an ascertainment of the
proportion of Federal legislation which either bears upon its face its
private character or which upon examination develops such a motive power.

And yet the people wait and expect from their chosen representatives such
patriotic action as will advance the welfare of the entire country; and
this expectation can only be answered by the performance of public duty
with unselfish purpose. Our mission among the nations of the earth and our
success in accomplishing the work God has given the American people to do
require of those intrusted with the making and execution of our laws
perfect devotion, above all other things, to the public good.

This devotion will lead us to strongly resist all impatience of
constitutional limitations of Federal power and to persistently check the
increasing tendency to extend the scope of Federal legislation into the
domain of State and local jurisdiction upon the plea of subserving the
public welfare. The preservation of the partitions between proper subjects
of Federal and local care and regulation is of such importance under the
Constitution, which is the law of our very existence, that no consideration
of expediency or sentiment should tempt us to enter upon doubtful ground.
We have undertaken to discover and proclaim the richest blessings of a free
government, with the Constitution as our guide. Let us follow the way it
points out; it will not mislead us. And surely no one who has taken upon
himself the solemn obligation to support and preserve the Constitution can
find justification or solace for disloyalty in the excuse that he wandered
and disobeyed in search of a better way to reach the public welfare than
the Constitution offers.

What has been said is deemed not inappropriate at a time when, from a
century's height, we view the way already trod by the American people and
attempt to discover their future path.

The seventh President of the United States--the soldier and statesman and
at all times the firm and brave friend of the people--in vindication of his
course as the protector of popular rights and the champion of true American
citizenship, declared: The ambition which leads me on is an anxious desire
and a fixed determination to restore to the people unimpaired the sacred
trust they have confided to my charge; to, heal the wounds of the
Constitution and to preserve it from further violation; to persuade my
countrymen, so far as I may, that it is not in a splendid government
supported by powerful monopolies and aristocratical establishments that
they will find happiness or their liberties protection, but in a plain
system, void of pomp, protecting all and granting favors to none,
dispensing its blessings like the dews of heaven, unseen and unfelt save in
the freshness and beauty they contribute to produce. It is such a
government that the genius of our people requires--such an one only under
which our States may remain for ages to come united, prosperous, and free.
In pursuance of a constitutional provision requiring the President from
time to time to give to the Congress information of the state of the Union,
I have the satisfaction to announce that the close of the year finds the
United States in the enjoyment of domestic tranquillity and at peace with
all the nations.

Since my last annual message our foreign relations have been strengthened
and improved by performance of international good offices and by new and
renewed treaties of amity, commerce, and reciprocal extradition of
criminals.

Those international questions which still await settlement are all
reasonably within the domain of amicable negotiation, and there is no
existing subject of dispute between the United States and any foreign power
that is not susceptible of satisfactory adjustment by frank diplomatic
treatment.

The questions between Great Britain and the United States relating to the
rights of American fishermen, under treaty and international comity, in the
territorial waters of Canada and Newfoundland, I regret to say, are not yet
satisfactorily adjusted.

These matters were fully treated in my message to the Senate of February 20
1888, together with which a convention, concluded under my authority with
Her Majesty's Government on the 15th of February last, for the removal of
all causes of misunderstanding, was submitted by me for the approval of the
Senate.

This treaty having been rejected by the Senate, I transmitted a message to
the Congress on the 23d of August last reviewing the transactions and
submitting for consideration certain recommendations for legislation
concerning the important questions involved.

Afterwards, on the 12th of September, in response to a resolution of the
Senate, I again communicated fully all the information in my possession as
to the action of the government of Canada affecting the commercial
relations between the Dominion and the United States, including the
treatment of American fishing vessels in the ports and waters of British
North America.

These communications have all been published, and therefore opened to the
knowledge of both Houses of Congress, although two were addressed to the
Senate alone.

Comment upon or repetition of their contents would be superfluous, and I am
not aware that anything has since occurred which should be added to the
facts therein stated. Therefore I merely repeat, as applicable to the
present time, the statement which will be found in my message to the Senate
of September 12 last, that--Since March 3, 1887, no case has been reported
to the Department of State wherein complaint was made of unfriendly or
unlawful treatment of American fishing vessels on the part of the Canadian
authorities in which reparation was not promptly and satisfactorily
obtained by the United States consul-general at Halifax. Having essayed in
the discharge of my duty to procure by negotiation the settlement of a
long-standing cause of dispute and to remove a constant menace to the good
relations of the two countries, and continuing to be of opinion that the
treaty of February last, which failed to receive the approval of the
Senate, did supply "a satisfactory, practical, and final adjustment, upon a
basis honorable and just to both parties, of the difficult and vexed
question to which it related," and having subsequently and unavailingly
recommended other legislation to Congress which I hoped would suffice to
meet the exigency created by the rejection of the treaty, I now again
invoke the earnest and immediate attention of the Congress to the condition
of this important question as it now stands before them and the country,
and for the settlement of which I am deeply solicitous.

Near the close of the month of October last occurrences of a deeply
regrettable nature were brought to my knowledge, which made it my painful
but imperative duty to obtain with as little delay as possible a new
personal channel of diplomatic intercourse in this country with the
Government of Great Britain.

The correspondence in relation to this incident will in due course be laid
before you, and will disclose the unpardonable conduct of the official
referred to in his interference by advice and counsel with the suffrages of
American citizens in the very crisis of the Presidential election then near
at hand, and also in his subsequent public declarations to justify his
action, superadding impugnment of the Executive and Senate of the United
States in connection with important questions now pending in controversy
between the two Governments.

The offense thus committed was most grave, involving disastrous
possibilities to the good relations of the United States and Great Britain,
constituting a gross breach of diplomatic privilege and an invasion of the
purely domestic affairs and essential sovereignty of the Government to
which the envoy was accredited.

Having first fulfilled the just demands of international comity by
affording full opportunity for Her Majesty's Government to act in relief of
the situation, I considered prolongation of discussion to be unwarranted,
and thereupon declined to further recognize the diplomatic character of the
person whose continuance in such function would destroy that mutual
confidence which is essential to the good understanding of the two
Governments and was inconsistent with the welfare and self-respect of the
Government of the United States.

The usual interchange of communication has since continued through Her
Majesty's legation in this city.

My endeavors to establish by international cooperation measures for the
prevention of the extermination of fur seals in Bering Sea have not been
relaxed, and I have hopes of being enabled shortly to submit an effective
and satisfactory conventional projet with the maritime powers for the
approval of the Senate.

The coastal boundary between our Alaskan possessions and British Columbia,
I regret to say, has not received the attention demanded by its importance,
and which on several occasions heretofore I have had the honor to recommend
to the Congress.

The admitted impracticability, if not impossibility, of making an accurate
and precise survey and demarcation of the boundary line as it is recited in
the treaty with Russia under which Alaska was ceded to the United States
renders it absolutely requisite for the prevention of international
jurisdictional complications that adequate appropriation for a
reconnoissance and survey to obtain proper knowledge of the locality and
the geographical features of the boundary should be authorized by Congress
with as little delay as possible.

Knowledge to be only thus obtained is an essential prerequisite for
negotiation for ascertaining a common boundary, or as preliminary to any
other mode of settlement.

It is much to be desired that some agreement should be reached with Her
Majesty's Government by which the damages to life and property on the Great
Lakes may be alleviated by removing or humanely regulating the obstacles to
reciprocal assistance to wrecked or stranded vessels.

The act of June 19, 1878, which offers to Canadian vessels free access to
our inland waters in aid of wrecked or disabled vessels, has not yet become
effective through concurrent action by Canada.

The due protection of our citizens of French origin or descent from claim
of military service in the event of their returning to or visiting France
has called forth correspondence which was laid before you at the last
session.

In the absence of conventional agreement as to naturalization, which is
greatly to be desired, this Government sees no occasion to recede from the
sound position it has maintained not only with regard to France, but as to
all countries with which the United States have not concluded special
treaties.

Twice within the last year has the imperial household of Germany been
visited by death; and I have hastened to express the sorrow of this people,
and their appreciation of the lofty character of the late aged Emperor
William, and their sympathy with the heroism under suffering of his son the
late Emperor Frederick.

I renew my recommendation of two years ago for the passage of a bill for
the refunding to certain German steamship lines of the interest upon
tonnage dues illegally exacted.

On the 12th [2d] of April last I laid before the House of Representatives
full information respecting our interests in Samoa; and in the subsequent
correspondence on the same subject, which will be laid before you in due
course, the history of events in those islands will be found.

In a message accompanying my approval, on the 1st day of October last, of a
bill for the exclusion of Chinese laborers, I laid before Congress full
information and all correspondence touching the negotiation of the treaty
with China concluded at this capital on the 12th day of March, 1888, and
which, having been confirmed by the Senate with certain amendments, was
rejected by the Chinese Government. This message contained a recommendation
that a sum of money be appropriated as compensation to Chinese subjects who
had suffered injuries at the hands of lawless men within our jurisdiction.
Such appropriation having been duly made, the fund awaits reception by the
Chinese Government.

It is sincerely hoped that by the cessation of the influx of this class of
Chinese subjects, in accordance with the expressed wish of both
Governments, a cause of unkind feeling has been permanently removed.

On the 9th of August, 1887, notification was given by the Japanese minister
at this capital of the adjournment of the conference for the revision of
the treaties of Japan with foreign powers, owing to the objection of his
Government to the provision in the draft jurisdictional convention which
required the submission of the criminal code of the Empire to the powers in
advance of its becoming operative. This notification was, however,
accompanied with an assurance of Japan's intention to continue the work of
revision.

Notwithstanding this temporary interruption of negotiations, it is hoped
that improvements may soon be secured in the jurisdictional system as
respects foreigners in Japan, and relief afforded to that country from the
present undue and oppressive foreign control in matters of commerce.

I earnestly recommend that relief be provided for the injuries accidentally
caused to Japanese subjects in the island Ikisima by the target practice of
one of our vessels.

A diplomatic mission from Korea has been received, and the formal
intercourse between the two countries contemplated by the treaty of 1882 is
now established.

Legislative provision is hereby recommended to organize and equip consular
courts in Korea.

Persia has established diplomatic representation at this capital, and has
evinced very great interest in the enterprise and achievements of our
citizens. I am therefore hopeful that beneficial commercial relations
between the two countries may be brought about.

I announce with sincere regret that Hayti has again become the theater of
insurrection, disorder, and bloodshed. The titular government of president
Saloman has been forcibly overthrown and he driven out of the country to
France, where he has since died.

The tenure of power has been so unstable amid the war of factions that has
ensued since the expulsion of President Saloman that no government
constituted by the will of the Haytian people has been recognized as
administering responsibly the affairs of that country. Our representative
has been instructed to abstain from interference between the warring
factions, and a vessel of our Navy has been sent to Haytian waters to
sustain our minister and for the protection of the persons and property of
American citizens.

Due precautions have been taken to enforce our neutrality laws and prevent
our territory from becoming the base of military supplies for either of the
warring factions.

Under color of a blockade, of which no reasonable notice had been given,
and which does not appear to have been efficiently maintained, a seizure of
vessels under the American flag has been reported, and in consequence
measures to prevent and redress any molestation of our innocent merchantmen
have been adopted.

Proclamation was duly made on the 9th day of November, 1887, of the
conventional extensions of the treaty of June 3, 1875, with Hawaii, under
which relations of such special and beneficent intercourse have been
created.

In the vast field of Oriental commerce now unfolded from our Pacific
borders no feature presents stronger recommendations for Congressional
action than the establishment of communication by submarine telegraph with
Honolulu.

The geographical position of the Hawaiian group in relation to our Pacific
States creates a natural interdependency and mutuality of interest which
our present treaties were intended to foster, and which make close
communication a logical and commercial necessity.

The wisdom of concluding a treaty of commercial reciprocity with Mexico has
been heretofore stated in my messages to Congress, and the lapse of time
and growth of commerce with that close neighbor and sister Republic confirm
the judgment so expressed.

The precise relocation of our boundary line is needful, and adequate
appropriation is now recommended.

It is with sincere satisfaction that I am enabled to advert to the spirit
of good neighborhood and friendly cooperation and conciliation that has
marked the correspondence and action of the Mexican authorities in their
share of the task of maintaining law and order about the line of our common
boundary.

The long-pending boundary dispute between Costa Rica and Nicaragua was
referred to my arbitration, and by an award made on the 22d of March last
the question has been finally settled to the expressed satisfaction of both
of the parties in interest.

The Empire of Brazil, in abolishing the last vestige of slavery among
Christian nations, called forth the earnest congratulations of this
Government in expression of the cordial sympathies of our people.

The claims of nearly all other countries against Chile growing out of her
late war with Bolivia and Peru have been disposed of, either by arbitration
or by a lump settlement. Similar claims of our citizens will continue to be
urged upon the Chilean Government, and it is hoped will not be subject to
further delays.

A comprehensive treaty of amity and commerce with Peru was proclaimed on
November 7 last, and it is expected that under its operation mutual
prosperity and good understanding will be promoted.

In pursuance of the policy of arbitration, a treaty to settle the claim of
Santos, an American citizen, against Ecuador has been concluded under my
authority, and will be duly submitted for the approval of the Senate.

Like disposition of the claim of Carlos Butterfield against Denmark and of
Van Bokkelen against Hayti will probably be made, and I trust the principle
of such settlements may be extended in practice under the approval of the
Senate.

Through unforeseen causes, foreign to the will of both Governments, the
ratification of the convention of December 5, 1885, with Venezuela, for the
rehearing of claims of citizens of the United States under the treaty of
1866, failed of exchange within the term provided, and a supplementary
convention, further extending the time for exchange of ratifications and
explanatory of an ambiguous provision of the prior convention, now awaits
the advice and consent of the Senate.

Although this matter, in the stage referred to, concerns only the
concurrent treaty-making power of one branch of Congress, I advert to it in
view of the interest repeatedly and conspicuously shown by you in your
legislative capacity in favor of a speedy and equitable adjustment of the
questions growing out of the discredited judgments of the previous mixed
commission of Caracas. With every desire to do justice to the
representations of Venezuela in this regard, the time seems to have come to
end this matter, and I trust the prompt confirmation by both parties of the
supplementary action referred to will avert the need of legislative or
other action to prevent the longer withholding of such rights of actual
claimants as may be shown to exist.

As authorized by the Congress, preliminary steps have been taken for the
assemblage at this capital during the coming year of the representatives of
South and Central American States, together with those of Mexico, Hayti,
and San Domingo, to discuss sundry important monetary and commercial
topics.

Excepting in those cases where, from reasons of contiguity of territory and
the existence of a common border line incapable of being guarded,
reciprocal commercial treaties may be found expedient, it is believed that
commercial policies inducing freer mutual exchange of products can be most
advantageously arranged by independent but cooperative legislation.

In the mode last mentioned the control of our taxation for revenue will be
always retained in our own hands unrestricted by conventional agreements
with other governments.

In conformity also with Congressional authority, the maritime powers have
been invited to confer in Washington in April next upon the practicability
of devising uniform rules and measures for the greater security of life and
property at sea. A disposition to accept on the part of a number of the
powers has already been manifested, and if the cooperation of the nations
chiefly interested shall be secured important results may be confidently
anticipated.

The act of June 26, 1884, and the acts amendatory thereof, in relation to
tonnage duties, have given rise to extended correspondence with foreign
nations with whom we have existing treaties of navigation and commerce, and
have caused wide and regrettable divergence of opinion in relation to the
imposition of the duties referred to. These questions are important, and I
shall make them the subject of a special and more detailed communication at
the present session.

With the rapid increase of immigration to our shores and the facilities of
modern travel, abuses of the generous privileges afforded by our
naturalization laws call for their careful revision.

The easy and unguarded manner in which certificates of American citizenship
can now be obtained has induced a class, unfortunately large, to avail
themselves of the opportunity to become absolved from allegiance to their
native land, and yet by a foreign residence to escape any just duty and
contribution of service to the country of their proposed adoption. Thus,
while evading the duties of citizenship to the United States, they may make
prompt claim for its national protection and demand its intervention in
their behalf. International complications of a serious nature arise, and
the correspondence of the State Department discloses the great number and
complexity of the questions which have been raised.

Our laws regulating the issue of passports should be carefully revised, and
the institution of a central bureau of registration at the capital is again
strongly recommended. By this means full particulars of each case of
naturalization in the United States would be secured and properly indexed
and recorded, and thus many cases of spurious citizenship would be detected
and unjust responsibilities would be avoided.

The reorganization of the consular service is a matter of serious
importance to our national interests. The number of existing principal
consular offices is believed to be greater than is at all necessary for the
conduct of the public business. It need not be our policy to maintain more
than a moderate number of principal offices, each supported by a salary
sufficient to enable the incumbent to live in comfort, and so distributed
as to secure the convenient supervision, through subordinate agencies, of
affairs over a considerable district.

I repeat the recommendations heretofore made by me that the appropriations
for the maintenance of our diplomatic and consular service should be
recast; that the so-called notarial or unofficial fees, which our
representatives abroad are now permitted to treat as personal perquisites,
should be forbidden; that a system of consular inspection should be
instituted, and that a limited number of secretaries of legation at large
should be authorized.

Preparations for the centennial celebration, on April 30, 1889, of the
inauguration of George Washington as President of the United States, at the
city of New York, have been made by a voluntary organization of the
citizens of that locality, and believing that an opportunity should be
afforded for the expression of the interest felt throughout the country in
this event, I respectfully recommend fitting and cooperative action by
Congress on behalf of the people of the United States.

The report of the Secretary of the Treasury exhibits in detail the
condition of our national finances and the operations of the several
branches of the Government related to his Department.

The total ordinary revenues of the Government for the fiscal year ended
June 30, 1888, amounted to $379,266,074.76, of which $219,091,173.63 was
received from customs duties and $124,296,871.98 from internal revenue
taxes.

The total receipts from all sources exceeded those for the fiscal year
ended June 30, 1887, by $7,862,797.10.

The ordinary expenditures of the Government for the fiscal year ending June
30, 1888, were $259,653,958.67, leaving a surplus of $119,612,116.09.

The decrease in these expenditures as compared with the fiscal year ended
June 30, 1887, was $8,278,221.30, notwithstanding the payment of more than
$5,000,000 for pensions in excess of what was paid for that purpose in the
latter-mentioned year.

The revenues of the Government for the year ending June 30, 1889,
ascertained for the quarter ended September 30, 1888, and estimated for the
remainder of the time, amount to $377,000,000, and the actual and estimated
ordinary expenditures for the same year are $273,000,000, leaving an
estimated surplus of $104,000,000.

The estimated receipts for the year ending June 30, 1890, are $377,000,000,
and the estimated ordinary expenditures for the same time are
$275,767,488.34, showing a surplus of $101,232,511.66.

The foregoing statements of surplus do not take into account the sum
necessary to be expended to meet the requirements of the sinking-fund act,
amounting to more than $47,000,000 annually.

The cost of collecting the customs revenues for the last fiscal year was
2.44 per cent; for the year 1885 it was 3.77 per cent.

The excess of internal-revenue taxes collected during the last fiscal year
over those collected for the year ended June 30, 1887, was $5,489,174.26,
and the cost of collecting this revenue decreased from 3.4 per cent in 1887
to less than 3.2 per cent for the last year. The tax collected on
oleomargarine was $723,948.04 for the year ending June 30, 1887, and
$864,139.88 for the following year.

The requirements of the sinking-fund act have been met for the year ended
June 30, 1888, and for the current year also, by the purchase of bonds.
After complying with this law as positively required, and bonds sufficient
for that purpose had been bought at a premium, it was not deemed prudent to
further expend the surplus in such purchases until the authority to do so
should be more explicit. A resolution, however, having been passed by both
Houses of Congress removing all doubt as to Executive authority, daily
purchases of bonds were commenced on the 23d day of April, 1888, and have
continued until the present time. By this plan bonds of the Government not
yet due have been purchased up to and including the 30th day of November,
1888, amounting to $94,700,400, the premium paid thereon amounting to
$17,508,613.08.

The premium added to the principal of these bonds represents an investment
yielding about 2 per cent interest for the time they still had to run, and
the saving to the Government represented by the difference between the
amount of interest at 2 per cent upon the sum paid for principal and
premium and what it would have paid for interest at the rate specified in
the bonds if they had run to their maturity is about $27,165,000.

At first sight this would seem to be a profitable and sensible transaction
on the part of the Government, but, as suggested by the Secretary of the
Treasury, the surplus thus expended for the purchase of bonds was money
drawn from the people in excess of any actual need of the Government and
was so expended rather than allow it to remain idle in the Treasury. If
this surplus, under the operation of just and equitable laws, had been left
in the hands of the people, it would have been worth in their business at
least 6 per cent per annum. Deducting from the amount of interest upon the
principal and premium of these bonds for the time they had to run at the
rate of 6 per cent the saving of 2 per cent made for the people by the
purchase of such bonds, the loss will appear to be $55,760,000.

This calculation would seem to demonstrate that if excessive and
unnecessary taxation is continued and the Government is forced to pursue
this policy of purchasing its own bonds at the premiums which it will be
necessary to pay, the loss to the people will be hundreds of millions of
dollars.

Since the purchase of bonds was undertaken as mentioned nearly all that
have been offered were at last accepted. It has been made quite apparent
that the Government was in danger of being subjected to combinations to
raise their price, as appears by the instance cited by the Secretary of the
offering of bonds of the par value of only $326,000 so often that the
aggregate of the sums demanded for their purchase amounted to more than $
19,700,000.

Notwithstanding the large sums paid out in the purchase of bonds, the
surplus in the Treasury on the 30th day of November, 1888, was
$52,234,610.01, after deducting about $20,000,000 just drawn out for the
payment of pensions.

At the close of the fiscal year ended June 30, 1887, there had been coined
under the compulsory silver-coinage act $266,988,280 in silver dollars,
$55,504,310 of which were in the hands of the people.

On the 30th day of June, 1888, there had been coined $299,708,790; and of
this $55,829,303 was in circulation in coin, and $200,387,376 in silver
certificates, for the redemption of which silver dollars to that amount
were held by the Government.

On the 30th day of November, 1888, $312,570,990 had been coined,
$60,970,990 of the silver dollars were actually in circulation, and
$237,418,346 in certificates.

The Secretary recommends the suspension of the further coinage of silver,
and in such recommendation I earnestly concur.

For further valuable information and timely recommendations I ask the
careful attention of the Congress to the Secretary's report.

The Secretary of War reports that the Army at the date of the last
consolidated returns consisted of 2,189 officers and 24,549 enlisted men.

The actual expenditures of the War Department for the fiscal year ended
June 30, 1888, amounted to $41,165,107.07, of which sum $9,158,516.63 was
expended for public works, including river and harbor improvements.

"The Board of Ordnance and Fortifications" provided for under the act
approved September 22 last was convened October 30, 1888, and plans and
specifications for procuring forgings for 8, 10, and 12 inch guns, under
provisions of section 4, and also for procuring 12-inch breech-loading
mortars, cast iron, hooped with steel, under the provisions of section 5 of
the said act, were submitted to the Secretary of War for reference to the
board, by the Ordnance Department, on the same date.

These plans and specifications having been promptly approved by the board
and the Secretary of War, the necessary authority to publish advertisements
inviting proposals in the newspapers throughout the country was granted by
the Secretary on November 12, and on November 13 the advertisements were
sent out to the different newspapers designated. The bids for the steel
forgings are to be opened on December 20, 1888, and for the mortars on
December 15, 1888.

A board of ordnance officers was convened at the Watervliet Arsenal on
October 4, 1888, to prepare the necessary plans and specifications for the
establishment of an army gun factory at that point. The preliminary report
of this board, with estimates for shop buildings and officers' quarters,
was approved by the Board of Ordnance and Fortifications November 6 and 8.
The specifications and form of advertisement and instructions to bidders
have been prepared, and advertisements inviting proposals for the
excavations for the shop building and for erecting the two sets of
officers' quarters have been published. The detailed drawings and
specifications for the gun-factory building are well in hand, and will be
finished within three or four months, when bids will be invited for the
erection of the building. The list of machines, etc., is made out, and it
is expected that the plans for the large lathes, etc., will be completed
within about four months, and after approval by the Board of Ordnance and
Fortifications bids for furnishing the same will be invited. The machines
and other fixtures will be completed as soon as the shop is in readiness to
receive them, probably about July, 1890.

Under the provisions of the Army bill for the procurement of pneumatic
dynamite guns, the necessary specifications are now being prepared, and
advertisements for proposals will issue early in December. The guns will
probably be of 15 inches caliber and fire a projectile that will carry a
charge each of about 500 pounds of explosive gelatine with full-caliber
projectiles. The guns will probably be delivered in from six to ten months
from the date of the contract, so that all the guns of this class that can
be procured under the provisions of the law will be purchased during the
year 1889.

I earnestly request that the recommendations contained in the Secretary's
report, all of which are, in my opinion, calculated to increase the
usefulness and discipline of the Army, may receive the consideration of the
Congress. Among these the proposal that there should be provided a plan for
the examination of officers to test their fitness for promotion is of the
utmost importance. This reform has been before recommended in the reports
of the Secretary, and its expediency is so fully demonstrated by the
argument he presents in its favor that its adoption should no longer be
neglected.

The death of General Sheridan in August last was a national affliction. The
Army then lost the grandest of its chiefs. The country lost a brave and
experienced soldier, a wise and discreet counselor, and a modest and
sensible man. Those who in any manner came within the range of his personal
association will never fail to pay deserved and willing homage to his
greatness and the glory of his career, but they will cherish with more
tender sensibility the loving memory of his simple, generous, and
considerate nature.

The Apache Indians, whose removal from their reservation in Arizona
followed the capture of those of their number who engaged in a bloody
and murderous raid during a part of the years 1885 and 1886, are now held
as prisoners of war at Mount Vernon Barracks, in the State of Alabama. They
numbered on the 31st day of October, the date of the last report, 83 men,
170 women, 70 boys, and 59 girls; in all, 382 persons. The commanding
officer states that they are in good health and contented, and that they
are kept employed as fully as is possible in the circumstances. The
children, as they arrive at a suitable age, are sent to the Indian schools
at Carlisle and Hampton.

Last summer some charitable and kind people asked permission to send two
teachers to these Indians for the purpose of instructing the adults as well
as such children as should be found there. Such permission was readily
granted, accommodations were provided for the teachers, and some portions
of the buildings at the barracks were made available for school purposes.
The good work contemplated has been commenced, and the teachers engaged are
paid by the ladies with whom the plan originated.

I am not at all in sympathy with those benevolent but injudicious people
who are constantly insisting that these Indians should be returned to their
reservation. Their removal was an absolute necessity if the lives and
property of citizens upon the frontier are to be at all regarded by the
Government. Their continued restraint at a distance from the scene of their
repeated and cruel murders and outrages is still necessary. It is a
mistaken philanthropy, every way injurious, which prompts the desire to see
these savages returned to their old haunts. They are in their present
location as the result of the best judgment of those having official
responsibility in the matter, and who are by no means lacking in kind
consideration for the Indians. A number of these prisoners have forfeited
their lives to outraged law and humanity. Experience has proved that they
are dangerous and can not be trusted. This is true not only of those who on
the warpath have heretofore actually been guilty of atrocious murder, but
of their kindred and friends, who, while they remained upon their
reservation, furnished aid and comfort to those absent with bloody intent.

These prisoners should be treated kindly and kept in restraint far from the
locality of their former reservation; they should be subjected to efforts
calculated to lead to their improvement and the softening of their savage
and cruel instincts, but their return to their old home should be
persistently resisted.

The Secretary in his report gives a graphic history of these Indians, and
recites with painful vividness their bloody deeds and the unhappy failure
of the Government to manage them by peaceful means. It will be amazing if a
perusal of this history will allow the survival of a desire for the return
of these prisoners to their reservation upon sentimental or any other
grounds.

The report of the Secretary of the Navy demonstrates very intelligent
management in that important Department, and discloses the most
satisfactory progress in the work of reconstructing the Navy made during
the past year. Of the ships in course of construction five, viz, the
Charleston, Baltimore, Yorktown, Vesuvius, and the Petrel, have in that
time been launched and are rapidly approaching completion; and in addition
to the above, the Philadelphia, the San Francisco, the Newark, the
Bennington, the Concord, and the Herreshoff torpedo boat are all under
contract for delivery to the Department during the next year. The progress
already made and being made gives good ground for the expectation that
these eleven vessels will be incorporated as part of the American Navy
within the next twelve months.

The report shows that notwithstanding the large expenditures for new
construction and the additional labor they involve the total ordinary or
current expenditures of the Department for the three years ending June 30,
1888, are less by more than 20 per cent than such expenditures for the
three years ending June 30, 1884.

The various steps which have been taken to improve the business methods of
the Department are reviewed by the Secretary. The purchasing of supplies
has been consolidated and placed under a responsible bureau head. This has
resulted in the curtailment of open purchases, which in the years 1884 and
1885 amounted to over 50 per cent of all the purchases of the Department,
to less than 11 per cent; so that at the present time about 90 per cent of
the total departmental purchases are made by contract and after
competition. As the expenditures on this account exceed an average of
$2,000,000 annually, it is evident that an important improvement in the
system has been inaugurated and substantial economies introduced.

The report of the Postmaster-General shows a marked increase of business in
every branch of the postal service.

The number of post-offices on July 1, 1888, was 57,376, an increase of
6,124 in three years and of 2,219 for the last fiscal year. The
latter-mentioned increase is classified as follows:

New England States -

Middle States - 181

Southern States and Indian Territory (41) - 1,406

The States and Territories of the Pacific Coast - 190

The ten States and Territories of the West and Northwest - 435

District of Columbia - 2 -