To the Senate and House of Representatives:

At the outgoing of the old and the incoming of the new century you begin
the last session of the Fifty-sixth Congress with evidences on every hand
of individual and national prosperity and with proof of the growing
strength and increasing power for good of Republican institutions. Your
countrymen will join with you in felicitation that American liberty is more
firmly established than ever before, and that love for it and the
determination to preserve it are more universal than at any former period
of our history.

The Republic was never so strong, because never so strongly entrenched in
the hearts of the people as now. The Constitution, with few amendments,
exists as it left the hands of its authors. The additions which have been
made to it proclaim larger freedom and more extended citizenship. Popular
government has demonstrated in its one hundred and twenty-four years of
trial here its stability and security, and its efficiency as the best
instrument of national development and the best safeguard to human rights.

When the Sixth Congress assembled in November, 1800, the population of the
United States was 5,308,483. It is now 76,304,799. Then we had sixteen
States. Now we have forty-five. Then our territory consisted Of 909,050
square miles. It is now 3,846,595 square miles. Education, religion, and
morality have kept pace with our advancement in other directions, and while
extending its power the Government has adhered to its foundation principles
and abated none of them in dealing with our new peoples and possessions. A
nation so preserved and blessed gives reverent thanks to God and invokes
His guidance and the continuance of His care and favor.

In our foreign intercourse the dominant question has been the treatment of
the Chinese problem. Apart from this our relations with the powers have
been happy.

The recent troubles in China spring from the antiforeign agitation which
for the past three years has gained strength in the northern provinces.
Their origin lies deep in the character of the Chinese races and in the
traditions of their Government. The Taiping rebellion and the opening of
Chinese ports to foreign trade and settlement disturbed alike the
homogeneity and the seclusion of China.

Meanwhile foreign activity made itself felt in all quarters, not alone on
the coast, but along the great river arteries and in the remoter districts,
carrying new ideas and introducing new associations among a primitive
people which had pursued for centuries a national policy of isolation.

The telegraph and the railway spreading over their land, the steamers
plying on their waterways, the merchant and the missionary penetrating year
by year farther to the interior, became to the Chinese mind types of an
alien invasion, changing the course of their national life and fraught with
vague forebodings of disaster to their beliefs and their self-control.

For several years before the present troubles all the resources of foreign
diplomacy, backed by moral demonstrations of the physical force of fleets
and arms, have been needed to secure due respect for the treaty rights of
foreigners and to obtain satisfaction from the responsible authorities for
the sporadic outrages upon the persons and property of unoffending
sojourners, which from time to time occurred at widely separated points in
the northern provinces, as in the case of the outbreaks in Sze-chuen and
Shan-tung.

Posting of antiforeign placards became a daily occurrence, which the
repeated reprobation of the Imperial power failed to check or punish. These
inflammatory appeals to the ignorance and superstition of the masses,
mendacious and absurd in their accusations and deeply hostile in their
spirit, could not but work cumulative harm. They aimed at no particular
class of foreigners; they were impartial in attacking everything foreign.

An outbreak in Shan-tung, in which German missionaries were slain, was the
too natural result of these malevolent teachings.

The posting of seditious placards, exhorting to the utter destruction of
foreigners and of every foreign thing, continued unrebuked. Hostile
demonstrations toward the stranger gained strength by organization.

The sect, commonly styled the Boxers, developed greatly in the provinces
north of the Yang-Tse, and with the collusion of many notable officials,
including some in the immediate councils of the Throne itself, became
alarmingly aggressive. No foreigner's life, outside of the protected treaty
ports, was safe. No foreign interest was secure from spoliation.

The diplomatic representatives of the powers in Peking strove in vain to
check this movement. Protest was followed by demand and demand by renewed
protest, to be met with perfunctory edicts from the Palace and evasive and
futile assurances from the Tsung-li Yamen. The circle of the Boxer
influence narrowed about Peking, and while nominally stigmatized as
seditious, it was felt that its spirit pervaded the capital itself, that
the Imperial forces were imbued with its doctrines, and that the immediate
counselors of the Empress Dowager were in full sympathy with the
antiforeign movement.

The increasing gravity of the conditions in China and the imminence of
peril to our own diversified interests in the Empire, as well as to those
of all the other treaty governments, were soon appreciated by this
Government, causing it profound solicitude. The United States from the
earliest days of foreign intercourse with China had followed a policy of
peace, omitting no occasions to testify good will, to further the extension
of lawful trade, to respect the sovereignty of its Government, and to
insure by all legitimate and kindly but earnest means the fullest measure
of protection for the lives and property of our law-abiding citizens and
for the exercise of their beneficent callings among the Chinese people.

Mindful of this, it was felt to be appropriate that our purposes should be
pronounced in favor of such course as would hasten united action of the
powers at Peking to promote the administrative reforms so greatly needed
for strengthening the Imperial Government and maintaining the integrity of
China, in which we believed the whole western world to be alike concerned.
To these ends I caused to be addressed to the several powers occupying
territory and maintaining spheres of influence in China the circular
proposals of 1899, inviting from them declarations of their intentions and
views as to the desirability of the adoption of measures insuring the
benefits of equality of treatment of all foreign trade throughout China.

With gratifying unanimity the responses coincided in this common policy,
enabling me to see in the successful termination of these negotiations
proof of the friendly spirit which animates the various powers interested
in the untrammeled development of commerce and industry in the Chinese
Empire as a source of vast benefit to the whole commercial world.

In this conclusion, which I had the gratification to announce as a
completed engagement to the interested powers on March 20, 1900, I
hopefully discerned a potential factor for the abatement of the distrust of
foreign purposes which for a year past had appeared to inspire the policy
of the Imperial Government, and for the effective exertion by it of power
and authority to quell the critical antiforeign movement in the northern
provinces most immediately influenced by the Manchu sentiment.

Seeking to testify confidence in the willingness and ability of the
Imperial administration to redress the wrongs and prevent the evils we
suffered and feared, the marine guard, which had been sent to Peking in the
autumn of 1899 for the protection of the legation, was withdrawn at the
earliest practicable moment, and all pending questions were remitted, as
far as we were concerned, to the ordinary resorts of diplomatic
intercourse.

The Chinese Government proved, however, unable to check the rising strength
of the Boxers and appeared to be a prey to internal dissensions. In the
unequal contest the antiforeign influences soon gained the ascendancy under
the leadership of Prince Tuan. Organized armies of Boxers, with which the
Imperial forces affiliated, held the country between Peking and the coast,
penetrated into Manchuria up to the Russian borders, and through their
emissaries threatened a like rising throughout northern China.

Attacks upon foreigners, destruction of their property, and slaughter of
native converts were reported from all sides. The Tsung-li Yamen, already
permeated with hostile sympathies, could make no effective response to the
appeals of the legations. At this critical juncture, in the early spring of
this year, a proposal was made by the other powers that a combined fleet
should be assembled in Chinese waters as a moral demonstration, under cover
of which to exact of the Chinese Government respect for foreign treaty
rights and the suppression of the Boxers.

The United States, while not participating in the joint demonstration,
promptly sent from the Philippines all ships that could be spared for
service on the Chinese coast. A small force of marines was landed at Taku
and sent to Peking for the protection of the American legation. Other
powers took similar action, until some four hundred men were assembled in
the capital as legation guards.

Still the peril increased. The legations reported the development of the
seditious movement in Peking and the need of increased provision for
defense against it. While preparations were in progress for a larger
expedition, to strengthen the legation guards and keep the railway open, an
attempt of the foreign ships to make a landing at Taku was met by a fire
from the Chinese forts. The forts were thereupon shelled by the foreign
vessels, the American admiral taking no part in the attack, on the ground
that we were not at war with China and that a hostile demonstration might
consolidate the antiforeign elements and strengthen the Boxers to oppose
the relieving column.

Two days later the Taku forts were captured after a sanguinary conflict.
Severance of communication with Peking followed, and a combined force of
additional guards, which was advancing to Peking by the Pei-Ho, was checked
at Langfang. The isolation of the legations was complete.

The siege and the relief of the legations has passed into undying history.
In all the stirring chapter which records the heroism of the devoted band,
clinging to hope in the face of despair, and the undaunted spirit that led
their relievers through battle and suffering to the goal, it is a memory of
which my countrymen may be justly proud that the honor of our flag was
maintained alike in the siege and the rescue, and that stout American
hearts have again set high, in fervent emulation with true men of other
race and language, the indomitable courage that ever strives for the cause
of right and justice.

By June 19 the legations were cut off. An identical note from the, Yamen
ordered each minister to leave Peking, under a promised escort, within
twenty-four hours. To gain time they replied, asking prolongation of the
time, which was afterwards granted, and requesting an interview with the
Tsung-li Yamen on the following day. No reply being received, on the
morning of the 20th the German minister, Baron von Ketteler, set out for
the Yamen to obtain a response, and oil the way was murdered.

An attempt by the legation guard to recover his body was foiled by the
Chinese. Armed forces turned out against the legations. Their quarters were
surrounded and attacked. The mission compounds were abandoned, their
inmates taking refuge in the British legation, where all the other
legations and guards gathered for more effective defense. Four hundred
persons were crowded in its narrow compass. Two thousand native converts
were assembled in a nearby palace under protection of the foreigners. Lines
of defense were strengthened, trenches dug, barricades raised, and
preparations made to stand a siege, which at once began.

From June 20 until July 17, writes Minister Conger, "there was scarcely
an hour during which there was not firing upon some part of our lines and
into some of the legations, varying from a single shot to a general and
continuous attack along the whole line." Artillery was placed around the
legations and on the over-looking palace walls, and thousands Of 3-inch
shot and shell were fired, destroying some buildings and damaging all. So
thickly did the balls rain, that, when the ammunition of the besieged ran
low, five quarts of Chinese bullets were gathered in an hour in one
compound and recast.

Attempts were made to burn the legations by setting neighboring houses on
fire, but the flames were successfully fought off, although the Austrian,
Belgian, Italian. and Dutch legations were then and subsequently burned.
With the aid of the native converts, directed by the missionaries, to whose
helpful co-operation Mr. Conger awards unstinted praise, the British
legation was made a veritable fortress. The British minister, Sir Claude
MacDonald, was chosen general commander of the defense, with the secretary
of the American legation, Mr. E. G. Squiers, as chief of staff.

To save life and ammunition the besieged sparingly returned the incessant
fire of the Chinese soldiery, fighting only to repel attack or make an
occasional successful sortie for strategic advantage, such as that of
fifty-five American, British, and Russian marines led by Captain Myers, of
the United States Marine Corps, which resulted in the capture of a
formidable barricade on the wall that gravely menaced the American
position. It was held to the last, and proved an invaluable acquisition,
because commanding the water gate through which the relief column entered.

During the siege the defenders lost 65 killed, 135 wounded, and 7 by
disease, the last all children.

On July 14 the besieged had their first communication with the Tsung-li
Yamen, from whom a message came inviting to a conference, which was
declined. Correspondence, however, ensued and a sort of armistice was
agreed upon, which stopped the bombardment and lessened the rifle fire for
a time. Even then no protection whatever was afforded, nor any aid given,
save to send to the legations a small supply of fruit and three sacks of
flour.

Indeed, the only communication had with the Chinese Government related to
the occasional delivery or dispatch of a telegram or to the demands of the
Tsung-li Yamen for the withdrawal of the legations to the coast under
escort. Not only are the protestations of the Chinese Government that it
protected and succored the legations positively contradicted, but
irresistible proof accumulates that the attacks upon them were made by
Imperial troops, regularly uniformed, armed, and officered, belonging to
the command of Jung Lu, the Imperial commander in chief. Decrees
encouraging the Boxers, organizing them tinder prominent Imperial officers,
provisioning them, and even granting them large sums in the name of the
Empress Dowager, are known to exist. Members of the Tsung-li Yamen who
counseled protection of the foreigners were beheaded. Even in the distant
provinces men suspected of foreign sympathy were put to death, prominent
among these being Chang Yen-hoon, formerly Chinese minister in Washington.

With the negotiation of the partial armistice of July 14, a proceeding
which was doubtless promoted by the representations of the Chinese envoy in
Washington, the way was opened for the conveyance to Mr. Conger of a test
message sent by the Secretary of State through the kind offices of Minister
Wu Ting-fang. Mr. Conger's reply, dispatched from Peking on July 18 through
the same channel, afforded to the outside world the first tidings that the
inmates of the legations were still alive and hoping for succor.

This news stimulated the preparations for a joint relief expedition in
numbers sufficient to overcome the resistance which for a month had been
organizing between Taku and the capital. Reinforcements sent by all the
co-operating Governments were constantly arriving. The United States
contingent, hastily assembled from the Philippines or dispatched from this
country, amounted to some 5,000 men, under the able command first of the
lamented Colonel Liscurn and afterwards of General Chaffee.

Toward the end of July the movement began. A severe conflict followed at
Tientsin, in which Colonel Liscurn was killed. The city was stormed and
partly destroyed. Its capture afforded the base of operations from which to
make the final advance, which began in the first days of August, the
expedition being made up of Japanese, Russian, British, and American troops
at the outset.

Another battle was fought and won at Yangtsun. Thereafter the disheartened
Chinese troops offered little show of resistance. A few days later the
important position of Ho-si-woo was taken. A rapid march brought the united
forces to the populous city of Tung Chow, which capitulated without a
contest.

On August 14 the capital was reached. After a brief conflict beneath the
walls the relief column entered and the legations were saved. The United
States soldiers, sailors, and marines, officers and men alike, in those
distant climes and unusual surroundings, showed the same valor, discipline,
and good conduct and gave proof of the same high degree of intelligence and
efficiency which have distinguished them in every emergency.

The Imperial family and the Government had fled a few days before. The city
was without visible control. The remaining Imperial soldiery had made on
the night of the 13th a last attempt to exterminate the besieged, which was
gallantly repelled. It fell to the occupying forces to restore order and
organize a provisional administration.

Happily the acute disturbances were confined to the northern provinces. It
is a relief to recall and a pleasure to record the loyal conduct of the
viceroys and local authorities of the southern and eastern provinces. Their
efforts were continuously directed to the pacific control of the vast
populations under their rule and to the scrupulous observance of foreign
treaty rights. At critical moments they did not hesitate to memorialize the
Throne, urging the protection of the legations, the restoration of
communication, and the assertion of the Imperial authority against the
subversive elements. They maintained excellent relations with the official
representatives of foreign powers. To their kindly disposition is largely
due the success of the consuls in removing many of the missionaries from
the interior to places of safety. In this relation the action of the
consuls should be highly commended. In Shan-tung and eastern Chi-li the
task was difficult, but, thanks to their energy and the cooperation of
American and foreign naval commanders, hundreds of foreigners, including
those of other nationalities than ours, were rescued from imminent peril.

The policy of the United States through all this trying period was clearly
announced and scrupulously carried out. A circular note to the powers dated
July 3 proclaimed our attitude. Treating the condition in the north as one
of virtual anarchy, in which the great provinces of the south and southeast
had no share, we regarded the local authorities in the latter quarters as
representing the Chinese people with whom we sought to remain in peace and
friendship. Our declared aims involved no war against the Chinese nation.
We adhered to the legitimate office of rescuing the imperiled legation,
obtaining redress for wrongs already suffered, securing wherever possible
the safety of American life and property in China, and preventing a spread
of the disorders or their recurrence.

As was then said, "The policy of the Government of the United States is to
seek a solution which may bring about permanent safety and peace to China,
preserve Chinese territorial and administrative entity, protect all rights
guaranteed to friendly powers by treaty and international law, and
safeguard for the world the principle of equal and impartial trade with all
parts of the Chinese Empire."

Faithful to those professions which, as it proved, reflected the views and
purposes of the other co-operating Governments, all our efforts have been
directed toward ending the anomalous situation in China by negotiations for
a settlement at the earliest possible moment. As soon as the sacred duty of
relieving our legation and its dependents was accomplished we withdrew from
active hostilities, leaving our legation under an adequate guard in Peking
as a channel of negotiation and settlement--a course adopted by others of
the interested powers. Overtures of the empowered representatives of the
Chinese Emperor have been considerately entertained.

The Russian proposition looking to the restoration of the Imperial power in
Peking has been accepted as in full consonance with our own desires, for we
have held and hold that effective reparation for wrongs suffered and an
enduring settlement that will make their recurrence impossible can best be
brought about under an authority which the Chinese nation reverences and
obeys. While so doing we forego no jot of our undoubted right to exact
exemplary and deterrent punishment of the responsible authors and abettors
of the criminal acts whereby we and other nations have suffered grievous
injury.

For the real culprits, the evil counselors who have misled the Imperial
judgment and diverted the sovereign authority to their own guilty ends,
full expiation becomes imperative within the rational limits of retributive
Justice. Regarding this as the initial condition of an acceptable
settlement between China and the powers, I said in my message of October 18
to the Chinese Emperor: I trust that negotiations may begin so soon as we
and the other offended Governments shall be effectively satisfied of Your
Majesty's ability and power to treat with just sternness the principal
offenders, who are doubly culpable, not alone toward the foreigners, but
toward Your Majesty, under whose rule the purpose of China to dwell in
concord with the world had hitherto found expression in the welcome and
protection assured to strangers. Taking, as a point of departure, the
Imperial edict appointing Earl Li Hung Chang and Prince Ching
plenipotentiaries to arrange a settlement, and the edict of September 25,
whereby certain high officials were designated for punishment, this
Government has moved, in concert with the other powers, toward the opening
of negotiations, which Mr. Conger, assisted by Mr. Rockhill, has been
authorized to conduct on behalf of the United States.

General bases of negotiation formulated by the Government of the French
Republic have been accepted with certain reservations as to details, made
necessary by our own circumstances, but, like similar reservations by other
powers, open to discussion in the progress of the negotiations. The
disposition of the Emperor's Government to admit liability for wrongs done
to foreign Governments and their nationals, and to act upon such additional
designation of the guilty persons as the foreign ministers at Peking may be
in a position to make, gives hope of a complete settlement of all questions
involved, assuring foreign rights of residence and intercourse on terms of
equality for all the world.

I regard as one of the essential factors of a durable adjustment the
securement of adequate guarantees for liberty of faith, since insecurity of
those natives who may embrace alien creeds is a scarcely less effectual
assault upon the rights of foreign worship and teaching than would be the
direct invasion thereof.

The matter of indemnity for our wronged citizens is a question of grave
concern. Measured in money alone, a sufficient reparation may prove to be
beyond the ability of China to meet. All the powers concur in emphatic
disclaimers of any purpose of aggrandizement through the dismemberment of
the Empire. I am disposed to think that due compensation may be made in
part by increased guarantees of security for foreign rights and immunities,
and, most important of all, by the opening of China to the equal commerce
of all the world. These views have been and will be earnestly advocated by
our representatives.

The Government of Russia has put forward a suggestion, that in the event of
protracted divergence of views in regard to indemnities the matter may be
relegated to the Court of Arbitration at The Hague. I favorably incline to
this, believing that high tribunal could not fail to reach a solution no
less conducive to the stability and enlarged prosperity of China itself
than immediately beneficial to the powers.

Ratifications of a treaty of extradition with the Argentine Republic were
exchanged on June 2 last.

While the Austro-Hungarian Government has in the many cases that have been
reported of the arrest of our naturalized citizens for alleged evasion of
military service faithfully observed the provisions of the treaty and
released such persons from military obligations, it has in some instances
expelled those whose presence in the community of their origin was asserted
to have a pernicious influence. Representations have been made against this
course whenever its adoption has appeared unduly onerous.

We have been urgently solicited by Belgium to ratify the International
Convention of June, 1899, amendatory of the previous Convention of 1890 in
respect to the regulation of the liquor trade in Africa. Compliance was
necessarily withheld, in the absence of the advice and consent of the
Senate thereto. The principle involved has the cordial sympathy of this
Government, which in the reversionary negotiations advocated more drastic
measures, and I would gladly see its extension, by international agreement,
to the restriction of the liquor traffic with all uncivilized peoples,
especially in the Western Pacific.

A conference will be held at Brussels December 11, 1900, under the
Convention for the protection of industrial property, concluded at Paris
March 20, 1883, to which delegates from this country have been appointed.
Any lessening of the difficulties that our inventors encounter in obtaining
patents abroad for their inventions and that our farmers, manufacturers,
and merchants may have in the protection of their trade-marks is worthy of
careful consideration, and your attention will be called to the results of
the conference at the proper time.

In the interest of expanding trade between this country and South America,
efforts have been made during the past year to conclude conventions with
the southern republics for the enlargement of postal facilities. Two such
agreements, signed with Bolivia on April 24, of which that establishing the
money-order system is undergoing certain changes suggested by the
Post-Office Department, have not yet been ratified by this Government. A
treaty of extradition with that country, signed on the same day, is before
the Senate.

A boundary dispute between Brazil and Bolivia over the territory of Acre is
in a fair way of friendly adjustment, a protocol signed in December, 1899,
having agreed on a definite frontier and provided for its demarcation by a
joint commission.

Conditions in Brazil have weighed heavily on our export trade to that
country in marked contrast to the favorable conditions upon which Brazilian
products are admitted into our markets. Urgent representations have been
made to that Government on the subject and some amelioration has been
effected. We rely upon the reciprocal justice and good will of that
Government to assure to us a further improvement in our commercial
relations.

The Convention signed May 24, 1897, for the final settlement of claims left
in abeyance upon the dissolution of the Commission of 1893, was at length
ratified by the Chilean Congress and the supplemental Commission has been
organized.

It remains for the Congress to appropriate for the necessary expenses of
the Commission.

The insurrectionary movement which disturbed Colombia in the latter part of
1899 has been practically suppressed, although guerrillas still operate in
some departments. The executive power of that Republic changed hands in
August last by the act of Vice-President Marroquin in assuming the reins of
government during the absence of President San Clemente from the capital.
The change met with no serious opposition, and, following the precedents in
such cases, the United States minister entered into relations with the new
defacto Government on September 17.

It is gratifying to announce that the residual questions between Costa Rica
and Nicaragua growing out of the Award of President Cleveland in 1888 have
been adjusted through the choice of an American engineer, General E. P.
Alexander, as umpire to run the disputed line. His task has been
accomplished to the satisfaction of both contestants.

A revolution in the Dominican Republic toward the close of last year
resulted in the installation of President Jimenez, whose Government was
formally recognized in January. Since then final payment has been made of
the American claim in regard to the Ozama bridge.

The year of the exposition has been fruitful in occasions for displaying
the good will that exists between this country and France. This great
competition brought together from every nation the best in natural
productions, industry, science, and the arts, submitted in generous rivalry
to a judgment made all the more searching because of that rivalry. The
extraordinary increase of exportations from this country during the past
three years and the activity with which our inventions and wares had
invaded new markets caused much interest to center upon the American
exhibit, and every encouragement was offered in the way of space and
facilities to permit of its being comprehensive as a whole and complete in
every part.

It was, however, not an easy task to assemble exhibits that could fitly
illustrate our diversified resources and manufactures. Singularly enough,
our national prosperity lessened the incentive to exhibit. The dealer in
raw materials knew that the user must come to him; the great factories were
contented with the phenomenal demand for their output, not alone at home,
but also abroad, where merit had already won a profitable trade.

Appeals had to be made to the patriotism of exhibitors to induce them to
incur outlays promising no immediate return. This was especially the case
where it became needful to complete an industrial sequence or illustrate a
class of processes. One manufacturer after another had to be visited and
importuned, and at times, after a promise to exhibit in a particular
section had been obtained, it would be withdrawn, owing to pressure of
trade orders, and a new quest would have to be made.

The installation of exhibits, too, encountered many obstacles and involved
unexpected cost. The exposition was far from ready at the date fixed for
its opening. The French transportation lines were congested with offered
freight. Belated goods had to be hastily installed in unfinished quarters
with whatever labor could be obtained in the prevailing confusion. Nor was
the task of the Commission lightened by the fact that, owing to the scheme
of classification adopted, it was impossible to have the entire exhibit of
any one country in the same building or more than one group of exhibits in
the same part of any building. Our installations were scattered on both
sides of the Seine and in widely remote suburbs of Paris, so that
additional assistants were needed for the work of supervision and
arrangement.

Despite all these drawbacks the contribution of the United States was not
only the largest foreign display, but was among the earliest in place and
the most orderly in arrangement. Our exhibits were shown in one hundred and
one out of one hundred and twenty-one classes, and more completely covered
the entire classification than those of any other nation. In total number
they ranked next after those of France, and the attractive form in which
they were presented secured general attention.

A criterion of the extent and success of our participation and of the
thoroughness with which our exhibits were organized is seen in the awards
granted to American exhibitors by the international jury, namely, grand
prizes, 240; gold medals, 597; silver medals, 776; bronze medals, 541, and
honorable mentions, 322--2,476 in all, being the greatest total number
given to the exhibit of any exhibiting nation, as well as the largest
number in each grade. This significant recognition of merit in competition
with the chosen exhibits of all other nations and at the hands of juries
almost wholly made up of representatives of France and other competing
countries is not only most gratifying, but is especially valuable, since it
sets us to the front in international questions of supply and demand, while
the large proportion of awards in the classes of art and artistic
manufactures afforded unexpected proof of the stimulation of national
culture by the prosperity that flows from natural productiveness joined to
industrial excellence.

Apart from the exposition several occasions for showing international good
will occurred. The inauguration in Paris of the Lafayette Monument,
presented by the school children of the United States, and the designing of
a commemorative coin by our Mint and the presentation of the first piece
struck to the President of the Republic, were marked by appropriate
ceremonies, and the Fourth of July was especially observed in the French
capital.

Good will prevails in our relations with the German Empire. An amicable
adjustment of the long-pending question of the admission of our
life-insurance companies to do business in Prussia has been reached. One of
the principal companies has already been readmitted and the way is opened
for the others to share the privilege.

The settlement of the Samoan problem, to which I adverted in my last
message, has accomplished good results. Peace and contentment prevail in
the islands, especially in Tutuila, where a convenient administration that
has won the confidence and esteem of the kindly disposed natives has been
organized under the direction of the commander of the United States naval
station at Pago-Pago.

An Imperial meat inspection law has been enacted for Germany. While it may
simplify the inspections, it prohibits certain products heretofore
admitted. There is still great uncertainty as to whether our well-nigh
extinguished German trade in meat products can revive tinder its new
burdens. Much will depend upon regulations not yet promulgated, which we
confidently hope will be free from the discriminations which attended the
enforcement of the old statutes.

The remaining link in the new lines of direct telegraphic communication
between the United States and the German Empire has recently been
completed, affording a gratifying occasion for exchange of friendly
congratulations with the German Emperor.

Our friendly relations with Great Britain continue. The war in Southern
Africa introduced important questions. A condition unusual in international
wars was presented in that while one belligerent had control of the seas,
the other had no ports, shipping, or direct trade, but was only accessible
through the territory of a neutral. Vexatious questions arose through Great
Britain's action in respect to neutral cargoes, not contraband in their own
nature, shipped to Portuguese South Africa, on the score of probable or
suspected ultimate destination to the Boer States.

Such consignments in British ships, by which alone direct trade is kept up
between our ports and Southern Africa, were seized in application of a
municipal law prohibiting British vessels from trading with the enemy
without regard to any contraband character of the goods, while cargoes
shipped to Delagoa Bay in neutral bottoms were arrested on the ground of
alleged destination to enemy's country. Appropriate representations on our
part resulted in the British Government agreeing to purchase outright all
such goods shown to be the actual property of American citizens, thus
closing the incident to the satisfaction of the immediately interested
parties, although, unfortunately, without a broad settlement of the
question of a neutral's right to send goods not contraband per se to a
neutral port adjacent to a belligerent area.

The work of marking certain provisional boundary points, for convenience of
administration, around the head of Lynn Canal, in accordance with the
temporary arrangement of October, 1899, Was completed by a joint survey in
July last. The modus vivendi has so far worked without friction, and the
Dominion Government has provided rules and regulations for securing to our
citizens the benefit of the reciprocal stipulation that the citizens or
subjects of either power found by that arrangement within the temporary
jurisdiction of the other shall suffer no diminution of the rights and
privileges they have hitherto enjoyed. But however necessary such an
expedient may have been to tide over the grave emergencies of the
situation, it is at best but an unsatisfactory makeshift, which should not
be suffered to delay the speedy and complete establishment of the frontier
line to which we are entitled under the Russo-American treaty for the
cession of Alaska.

In this relation I may refer again to the need of definitely marking the
Alaskan boundary where it follows the one hundred and forty-first meridian.
A convention to that end has been before the Senate for some two years, but
as no action has been taken I contemplate negotiating a new convention for
a joint determination of the meridian by telegraphic observations. These,
it is believed, will give more accurate and unquestionable results than the
sidereal methods heretofore independently followed, which, as is known,
proved discrepant at several points on the line, although not varying at
any place more than 700 feet.

The pending claim of R. H. May against the Guatemalan Government has been
settled by arbitration, Mr. George F. B. Jenner, British minister at
Guatemala, who was chosen as sole arbitrator, having awarded $143,750.73 in
gold to the claimant.

Various American claims against Haiti have been or are being advanced to
the resort of arbitration.

As the result of negotiations with the Government of Honduras in regard to
the indemnity demanded for the murder of Frank H. Pears in Honduras, that
Government has paid $10,000 in settlement of the claim of the heirs.

The assassination of King Humbert called forth sincere expressions of
sorrow from this Government and people, and occasion was fitly taken to
testify to the Italian nation the high regard here felt for the memory of
the lamented ruler.

In my last message I referred at considerable length to the lynching of
five Italians at Tallulah. Notwithstanding the efforts of the Federal
Government, the production of evidence tending to inculpate the authors of
this grievous offense against our civilization, and the repeated inquests
set on foot by the authorities of the State of Louisiana, no punishments
have followed. Successive grand juries have failed to indict. The
representations of the Italian Government in the face of this miscarriage
have been most temperate and just.

Setting the principle at issue high above all consideration of merely
pecuniary indemnification, such as this Government made in the three
previous cases, Italy has solemnly invoked the pledges of existing treaty
and asked that the justice to which she is entitled shall be meted in
regard to her unfortunate countrymen in our territory with the same full
measure she herself would give to any American were his reciprocal treaty
rights contemned.

I renew the urgent recommendations I made last year that the Congress
appropriately confer upon the Federal courts jurisdiction in this class of
international cases where the ultimate responsibility of the Federal
Government may be involved, and I invite action upon the bills to
accomplish this which were introduced in the Sen. ate and House. It is
incumbent upon us to remedy the statutory omission which has led, and may
again lead, to such untoward results. I have pointed out the necessity and
the precedent for legislation of this character. Its enactment is a simple
measure of previsory justice toward the nations with which we as a
sovereign equal make treaties requiring reciprocal observance.

While the Italian Government naturally regards such action as the primary
and, indeed, the most essential element in the disposal of the Tallulah
incident, I advise that, in accordance with precedent, and in view of the
improbability of that particular case being reached by the bill now
pending, Congress make gracious provision for indemnity to the Italian
sufferers in the same form and proportion as heretofore.

In my inaugural address I referred to the general subject of lynching in
these words: Lynching must not be tolerated in a great and civilized
country like the United States; courts, not mobs, must execute the
penalties of the law. The preservation of public order, the right of
discussion, the integrity of courts, and the orderly administration of
justice must continue forever the rock of safety upon which our Government
securely rests. This I most urgently reiterate and again invite the
attention of my countrymen to this reproach upon our civilization.

The closing year has witnessed a decided strengthening of Japan's relations
to other states. The development of her independent judicial and
administrative functions under the treaties which took effect July 17,
1899, has proceeded without international friction, showing the competence
of the Japanese to hold a foremost place among modern peoples.

In the treatment of the difficult Chinese problems Japan has acted in
harmonious concert with the other powers, and her generous cooperation
materially aided in the joint relief of the beleaguered legations in Peking
and in bringing about an understanding preliminary to a settlement of the
issues between the powers and China. Japan's declarations in favor of the
integrity of the Chinese Empire and the conservation of open world trade
therewith have been frank and positive. As a factor for promoting the
general interests of peace, order, and fair commerce in the Far East the
influence of Japan can hardly be overestimated.

The valuable aid and kindly courtesies extended by the Japanese Government
and naval officers to the battle ship Oregon are gratefully appreciated.

Complaint was made last summer of the discriminatory enforcement of a
bubonic quarantine against Japanese on the Pacific coast and of
interference with their travel in California and Colorado under the health
laws of those States. The latter restrictions have been adjudged by a
Federal court to be unconstitutional. No recurrence of either cause of
complaint is apprehended.

No noteworthy incident has occurred in our relations with our important
southern neighbor. Commercial intercourse with Mexico continues to thrive,
and the two Governments neglect no opportunity to foster their mutual
interests in all practicable ways.

Pursuant to the declaration of the Supreme Court that the awards of the
late joint Commission in the La Abra and Weil claims were obtained through
fraud, the sum awarded in the first case, $403,030.08, has been returned to
Mexico, and the amount of the Weil award will be returned in like manner.

A Convention indefinitely extending the time for the labors of the United
States and Mexican International (Water) Boundary Commission has been
signed.

It is with satisfaction that I am able to announce the formal notification
at The Hague, on September 4, of the deposit of ratifications of the
Convention for the Pacific Settlement of International Disputes by sixteen
powers, namely, the United States, Austria, Belgium, Denmark, England,
France, Germany, Italy, Persia, Portugal, Roumania, Russia, Siam, Spain,
Sweden and Norway, and the Netherlands. Japan also has since ratified the
Convention.

The Administrative Council of the Permanent Court of Arbitration has been
organized and has adopted rules of order and a constitution for the
International Arbitration Bureau. In accordance with Article XXIII of the
Convention providing for the appointment by each signatory power of persons
of known competency in questions of international law as arbitrators, I
have appointed as members of this Court, Hon. Benjamin Harrison, of
Indiana, ex-President of the United States; Hon. Melville W. Fuller, of
Illinois, Chief justice of the United States; Hon. John W. Griggs, of New
Jersey, Attorney General of the United States; and Hon. George Gray, of
Delaware, a judge of the circuit court of the United States.

As an incident of the brief revolution in the Mosquito district of
Nicaragua early in 1899 the insurgents forcibly collected from American
merchants duties upon imports. On the restoration of order the Nicaraguan
authorities demanded a second payment of such duties on the ground that
they were due to the titular Government and that their diversion had aided
the revolt.

This position was not accepted by us. After prolonged discussion a
compromise was effected under which the amount of the second payments was
deposited with the British consul at San Juan del Norte in trust until the
two Governments should determine whether the first payments had been made
under compulsion to a de facto authority. Agreement as to this was not
reached, and the point was waived by the act of the Nicaraguan Government
in requesting the British consul to return the deposits to the merchants.

Menacing differences between several of the Central American States have
been accommodated, our ministers rendering good offices toward an
understanding.

The all-important matter of an interoceanic canal has assumed a new phase.
Adhering to its refusal to reopen the question of the forfeiture of the
contract of the Maritime Canal Company, which was terminated for alleged
nonexecution in October, 1899, the Government of Nicaragua has since
supplemented that action by declaring the so styled Eyre-Cragin option void
for nonpayment of the stipulated advance. Protests in relation to these
acts have been filed in the State Department and are under consideration.
Deeming itself relieved from existing engagements, the Nicaraguan
Government shows a disposition to deal freely with the canal question
either in the way of negotiations with the United States or by taking
measures to promote the waterway.

Overtures for a convention to effect the building of a canal under the
auspices of the United States are under consideration. In the meantime, the
views of the Congress upon the general subject, in the light of the report
of the Commission appointed to examine the comparative merits of the
various trans-Isthmian ship-canal projects, may be awaited.

I commend to the early attention of the Senate the Convention with Great
Britain to facilitate the construction of such a canal and to remove any
objection which might arise out of the Convention commonly called the
Clayton-Bulwer Treaty.

The long-standing contention with Portugal, growing out of the seizure of
the Delagoa Bay Railway, has been at last determined by a favorable award
of the tribunal of arbitration at Berne, to which it was submitted. The
amount of the award, which was deposited in London awaiting arrangements by
the Governments of the United States and Great Britain for its disposal,
has recently been paid over to the two Governments.

A lately signed Convention of Extradition with Peru as amended by the
Senate has been ratified by the Peruvian Congress.

Another illustration of the policy of this Government to refer
international disputes to impartial arbitration is seen in the agreement
reached with Russia to submit the claims on behalf of American sealing
vessels seized in Bering Sea to determination by Mr. T. M. C. Asser, a
distinguished statesman and jurist of the Netherlands.

Thanks are due to the Imperial Russian Government for the kindly aid
rendered by its authorities in eastern Siberia to American missionaries
fleeing from Manchuria.

Satisfactory progress has been made toward the conclusion of a general
treaty of friendship and intercourse with Spain, in replacement of the old
treaty, which passed into abeyance by reason of the late war. A new
convention of extradition is approaching completion, and I should be much
pleased were a commercial arrangement to follow. I feel that we should not
suffer to pass any opportunity to reaffirm the cordial ties that existed
between us and Spain from the time of our earliest independence, and to
enhance the mutual benefits of that commercial intercourse which is natural
between the two countries.

By the terms of the Treaty of Peace the line bounding the ceded Philippine
group in the southwest failed to include several small islands lying
westward of the Sulus, which have always been recognized as under Spanish
control. The occupation of Sibutd and Cagayan Sulu by our naval forces
elicited a claim on the part of Spain, the essential equity of which could
not be gainsaid. In order to cure the defect of the treaty by removing all
possible ground of future misunderstanding respecting the interpretation of
its third article, I directed the negotiation of a supplementary treaty,
which will be forthwith laid before the Senate, whereby Spain quits all
title and claim of title to the islands named as well as to any and all
islands belonging to the Philippine Archipelago lying outside the lines
described in said third article, and agrees that all such islands shall be
comprehended in the cession of the archipelago as fully as if they had been
expressly included within those lines. In consideration of this cession the
United States is to pay to Spain the sum of $100,000.

A bill is now pending to effect the recommendation made in my last annual
message that appropriate legislation be had to carry into execution Article
VII of the Treaty of Peace with Spain, by which the United States assumed
the payment of certain claims for indemnity of its citizens against Spain.
I ask that action be taken to fulfill this obligation.

The King of Sweden and Norway has accepted the joint invitation of the
United States, Germany, and Great Britain to arbitrate claims growing out
of losses sustained in the Samoan Islands in the course of military
operations made necessary by the disturbances in 1899.

Our claims upon the Government of the Sultan for reparation for injuries
suffered by American citizens in Armenia and elsewhere give promise of
early and satisfactory settlement. His Majesty's good disposition in this
regard has been evinced by the issuance of an irade for rebuilding the
American college at Harpoot.

The failure of action by the Senate at its last session upon the commercial
conventions then submitted for its consideration and approval, although
caused by the great pressure of other legislative business, has caused much
disappointment to the agricultural and industrial interests of the country,
which hoped to profit by their provisions. The conventional periods for
their ratification having expired, it became necessary to sign additional
articles extending the time for that purpose. This was requested on our
part, and the other Governments interested have concurred with the
exception of one convention, in respect to which no formal reply has been
received.

Since my last communication to the Congress on this subject special
commercial agreements under the third section of the tariff act have been
proclaimed with Portugal, with Italy, and with Germany. Commercial
conventions tinder the general limitations of the fourth section of the
same act have been concluded with Nicaragua, with Ecuador, with the
Dominican Republic, with Great Britain on behalf of the island of Trinidad,
and with Denmark on behalf of the island of St. Croix. These will be early
communicated to the Senate. Negotiations with other Governments are in
progress for the improvement and security of our commercial relations.

The policy of reciprocity so manifestly rests upon the principles of
international equity and has been so repeatedly approved by the people of
the United States that there ought to be no hesitation in either branch of
the Congress in giving to it full effect.

This Government desires to preserve the most just and amicable commercial
relations with all foreign countries, unmoved by the industrial rivalries
necessarily developed in the expansion of international trade. It is
believed that the foreign Governments generally entertain the same purpose,
although in some instances there are clamorous demands upon them for
legislation specifically hostile to American interests. Should these
demands prevail I shall communicate with the Congress with the view of
advising such legislation as may be necessary to meet the emergency.

The exposition of the resources and products of the Western Hemisphere to
be held at Buffalo next year promises important results not only for the
United States but for the other participating countries. It is gratifying
that the Latin-American States have evinced the liveliest interest, and the
fact that an International American Congress will be held in the City of
Mexico while the exposition is in progress encourages the hope of a larger
display at Buffalo than might otherwise be practicable. The work of
preparing an exhibit of our national resources is making satisfactory
progress under the direction of different officials of the Federal
Government, and the various States of the Union have shown a disposition
toward the most liberal participation in the enterprise.

The Bureau of the American Republics continues to discharge, with the
happiest results, the important work of promoting cordial relations between
the United States and the Latin-American countries, all of which are now
active members of the International Union. The Bureau has been instrumental
in bringing about the agreement for another International American
Congress, which is to meet in the City of Mexico in October, 1901. The
Bureau's future for another term of ten years is assured by the
international compact, but the congress will doubtless have much to do with
shaping new lines of work and a general policy. Its usefulness to the
interests of Latin-American trade is widely appreciated and shows a
gratifying development.

The practical utility of the consular service in obtaining a wide range of
information as to the industries and commerce of other countries and the
opportunities thereby afforded for introducing the sale of our goods have
kept steadily in advance of the notable expansion of our foreign trade, and
abundant evidence has been furnished, both at home and abroad, of the fact
that the Consular Reports, including many from our diplomatic
representatives, have to a considerable extent pointed out ways and means
of disposing of a great variety of manufactured goods which otherwise might
not have found sale abroad.

Testimony of foreign observers to the commercial efficiency of the consular
corps seems to be conclusive, and our own manufacturers and exporters
highly appreciate the value of the services rendered not only in the
printed reports but also in the individual efforts of consular officers to
promote American trade. An increasing part of the work of the Bureau of
Foreign Commerce, whose primary duty it is to compile and print the
reports, is to answer inquiries from trade organizations, business houses,
etc., as to conditions in various parts of the world, and, notwithstanding
the smallness of the force employed, the work has been so systematized that
responses are made with such promptitude and accuracy as to elicit
flattering encomiums. The experiment of printing the Consular Reports daily
for immediate use by trade bodies, exporters, and the press, which was
begun in January, 1898, continues to give general satisfaction.

It is gratifying to be able to state that the surplus revenues for the
fiscal year ended June 30, 1900, were $79,527,060.18. For the six preceding
years we had only deficits, the aggregate of which from 1894 to 1899,
inclusive, amounted to $283,022,991.14. The receipts for the year from all
sources, exclusive of postal revenues, aggregated $567,240,851.89, and
expenditures for all purposes, except for the administration of the postal
department, aggregated $487,713,791.71. The receipts from customs were
$233,164,871.16, an increase over the preceding year Of $27,036,389.41. The
receipts from internal revenue were $295,327,926.76, an increase Of
$21,890,765.25 over 1899. The receipts from miscellaneous sources were
$38,748,053.97, as against $36,394,976.92 for the previous year.

It is gratifying also to note that during the year a considerable reduction
is shown in the expenditures of the Government. The War Department
expenditures for the fiscal year 1900 were $134,774,767.78, a reduction of
$95,066,486.69 over those of 1899. In the Navy Department the expenditures
were $55,953,077.72 for the year 1900, as against $63,942,104.25 for the
preceding year, a decrease of $7,989,026.53. In the expenditures on account
of Indians there was a decrease in 1900 over 1899 Of $2,630,604.38; and in
the civil and miscellaneous expenses for 1900 there was a reduction Of
$13,418,065.74.

Because of the excess of revenues over expenditures the Secretary of the
Treasury was enabled to apply bonds and other securities to the sinking
fund to the amount Of $56,544,556.06. The details of the sinking fund are
set forth in the report of the Secretary of the Treasury, to which I invite
attention. The Secretary of the Treasury estimates that the receipts for
the current fiscal year will aggregate $580,000,000 and the expenditures
$500,000,000, leaving an excess of revenues over expenditures of
$80,000,000. The present condition of the Treasury is one of undoubted
strength. The available cash balance November 30 was $139,303,794.50. Under
the form of statement prior to the financial law of March 14 last there
would have been included in the statement of available cash gold coin and
bullion held for the redemption of United States notes.

If this form were pursued, the cash balance including the present gold
reserve of $150,000,000, would be $289,303,794.50. Such balance November
30, 1899, was $296,495,301.55. In the general fund, which is wholly
separate from the reserve and trust funds, there was on November 30,
$70,090,073.15 in gold coin and bullion, to which should be added
$22,957,300 in gold certificates subject to issue, against which there is
held in the Division of Redemption gold coin and bullion, making a total
holding of free gold amounting to $93,047,373.15.

It will be the duty as I am sure it will be the disposition of the Congress
to provide whatever further legislation is needed to insure the continued
parity under all conditions between our two forms of metallic money, silver
and gold.

Our surplus revenues have permitted the Secretary of the Treasury since the
close of the fiscal year to call in the funded loan of 1891 continued at 2
per cent, in the sum of $25,364,500. To and including November 30,
$23,458,100 Of these bonds have been paid. This sum, together with the
amount which may accrue from further redemptions under the call, will be
applied to the sinking fund.

The law of March 14, 1900, provided for refunding into 2 per cent
thirty-year bonds, payable, principal and interest, in gold coin of the
present standard value, that portion of the public debt represented by the
3 per cent bonds of 1908, the 4 percents Of 1907, and the 5 percents of
1904, Of which there was outstanding at the date of said law $839,149,930,
The holders of the old bonds presented them for exchange between March 14
and November 30 to the amount of $364,943,750. The net saving to the
Government on these transactions aggregates $9,106,166.

Another effect of the operation, as stated by the Secretary, is to reduce
the charge upon the Treasury for the payment of interest from the dates of
refunding to February 1, 1904, by the sum of more than seven million
dollars annually. From February 1, 1904, to July 1, 11907, the annual
interest charge will be reduced by the sum of more than five millions, and
for the thirteen months ending August 1, 1908, by about one million. The
full details of the refunding are given in the annual report of the
Secretary of the Treasury.

The beneficial effect of the financial act of 1900, so far as it relates to
a modification of the national banking act, is already apparent. The
provision for the incorporation of national banks with a capital of not
less than $25,000 in places not exceeding three thousand inhabitants has
resulted in the extension of banking facilities to many small communities
hitherto unable to provide themselves with banking institutions under the
national system. There were organized from the enactment of the law up to
and including November 30, 369 national banks, of which 266 were with
capital less than $50,000, and 103 with capital of $50,000 or more.

It is worthy of mention that the greater number of banks being organized
under the new law are in sections where the need of banking facilities has
been most pronounced. Iowa stands first, with 30 banks of the smaller
class, while Texas, Oklahoma, Indian Territory, and the middle and western
sections of the country have also availed themselves largely of the
privileges under the new law.

A large increase in national bank-note circulation has resulted from the
provision of the act which permits national banks to issue circulating
notes to the par value of the United States bonds deposited as security
instead of only go per cent thereof, as heretofore. The increase in
circulating notes from March 14 to November 30 is $77,889,570.

The party in power is committed to such legislation as will better make the
currency responsive to the varying needs of business at all seasons and in
all sections.

Our foreign trade shows a remarkable record of commercial and industrial
progress. The total of imports and exports for the first time in the
history of the country exceeded two billions of dollars. The exports are
greater than they have ever been before, the total for the fiscal year 1900
being $1,394,483,082, an increase over 1899 of $167,459,780, an increase
over 1898 of $163,000,752, over 1897 Of $343,489,526, and greater than 1896
by $511,876,144.

The growth of manufactures in the United States is evidenced by the fact
that exports of manufactured products largely exceed those of any previous
year, their value for 1900 being $433,851,756, against $339,592,146 in
1899, an increase of 28 per cent.

Agricultural products were also exported during 1900 in greater volume than
in 1899, the total for the year being $835,858,123, against $784,776,142 in
1899.

The imports for the year amounted to $849,941,184, an increase over 1899 of
$152,792,695. This increase is largely in materials for manufacture, and is
in response to the rapid development of manufacturing in the United States.
While there was imported for use in manufactures in 1900 material to the
value of $79,768,972 in excess of 1899, it is reassuring to observe that
there is a tendency toward decrease in the importation of articles
manufactured ready for consumption, which in 1900 formed 15.17 per cent of
the total imports, against 15.54 per cent in 1899 and 21.09 per cent in
1896.

I recommend that the Congress at its present session reduce the
internal-revenue taxes imposed to meet the expenses of the war with Spain.
in the sum of thirty millions of dollars. This reduction should be secured
by the remission of those taxes which experience has shown to be the most
burdensome to the industries of the people.

I specially urge that there be included in whatever reduction is made the
legacy tax on bequests for public uses of a literary, educational, or
charitable character.

American vessels during the past three years have carried about 9 per cent
of our exports and imports. Foreign ships should carry the least, not the
greatest, part of American trade. The remarkable growth of our steel
industries, the progress of shipbuilding for the domestic trade, and our
steadily maintained expenditures for the Navy have created an opportunity
to place the United States in the first rank of commercial maritime powers.

Besides realizing a proper national aspiration this will mean the
establishment and healthy growth along all our coasts of a distinctive
national industry, expanding the field for the profitable employment of
labor and capital. It will increase the transportation facilities and
reduce freight charges on the vast volume of products brought from the
interior to the seaboard for export, and will strengthen an arm of the
national defense upon which the founders of the Government and their
successors have relied. In again urging immediate action by the Congress on
measures to promote American shipping and foreign trade, I direct attention
to the recommendations on the subject in previous messages, and
particularly to the opinion expressed in the message of 1899: I am
satisfied the judgment of the country favors the policy of aid to our
merchant marine, which will broaden our commerce and markets and upbuild
our sea-carrying capacity for the products of agriculture and manufacture,
which, with the increase of our Navy, mean more work and wages to our
countrymen, as well as a safeguard to American interests in every part of
the world. The attention of the Congress is invited to the recommendation
of the Secretary of the Treasury in his annual report for legislation in
behalf of the Revenue-Cutter Service, and favorable action is urged.

In my last annual message to the Congress I called attention to the
necessity for early action to remedy such evils as might be found to exist
in connection with combinations of capital organized into trusts, and again
invite attention to my discussion of the subject at that time, which
concluded with these words: It is apparent that uniformity of legislation
upon this subject in the several States is much to be desired. It is to be
hoped that such uniformity, founded in a wise and just discrimination
between what is injurious and what is useful and necessary in business
operations, may be obtained, and that means may be found for the Congress,
within the limitations of its constitutional power, so to supplement an
effective code of State legislation as to make a complete system of laws
throughout the United States adequate to compel a general observance of the
salutary rules to which I have referred.

The whole question is so important and far-reaching that I am sure no part
of it will be lightly considered, but every phase of it will have the
studied deliberation of the Congress, resulting in wise and judicious
action. Restraint upon such combinations as are injurious, and which are
within Federal jurisdiction, should be promptly applied by the Congress.

In my last annual message I dwelt at some length upon the condition of
affairs in the Philippines. While seeking to impress upon you that the
grave responsibility of the future government of those islands rests with
the Congress of the United States, I abstained from recommending at that
time a specific and final form of government for the territory actually
held by the United States forces and in which as long as insurrection
continues the military arm must necessarily be supreme. I stated my
purpose, until the Congress shall have made the formal expression of its
will, to use the authority vested in me by the Constitution and the
statutes to uphold the sovereignty of the United States in those distant
islands as in all other places where our flag rightfully floats, placing,
to that end, at the disposal of the army and navy all the means which the
liberality of the Congress and the people have provided. No contrary
expression of the will of the Congress having been made, I have steadfastly
pursued the purpose so declared, employing the civil arm as well toward the
accomplishment of pacification and the institution of local governments
within the lines of authority and law.

Progress in the hoped-for direction has been favorable. Our forces have
successfully controlled the greater part of the islands, overcoming the
organized forces of the insurgents and carrying order and administrative
regularity to all quarters. What opposition remains is for the most part
scattered, obeying no concerted plan of strategic action, operating only by
the methods common to the traditions of guerrilla warfare, which, while
ineffective to alter the general control now established, are still
sufficient to beget insecurity among the populations that have felt the
good results of our control and thus delay the conferment upon them of the
fuller measures of local self-government, of education, and of industrial
and agricultural development which we stand ready to give to them.

By the spring of this year the effective opposition of the dissatisfied
Tagals to the authority of the United States was virtually ended, thus
opening the door for the extension of a stable administration over much of
the territory of the Archipelago. Desiring to bring this about, I appointed
in March last a civil Commission composed of the Hon. William H. Taft, of
Ohio; Prof. Dean C. Worcester, of Michigan; the Hon. Luke I. Wright, of
Tennessee; the Hon. Henry C. Ide, of Vermont, and Prof. Bernard Moses, of
California. The aims of their mission and the scope of their authority are
clearly set forth in my instructions of April 7, 1900, addressed to the
Secretary of War to be transmitted to them:

In the message transmitted to the Congress on the 5th of December, 1899, I
said, speaking of the Philippine Islands: "As long as the insurrection
continues the military arm must necessarily be supreme. But there is no
reason why steps should not be taken from time to time to inaugurate
governments essentially popular in their form as fast as territory is held
and controlled by our troops. To this end I am considering the advisability
of the return of the Commission, or such of the members thereof as can be
secured, to aid the existing authorities and facilitate this work
throughout the islands."

To give effect to the intention thus expressed, I have appointed Hon.
William H. Taft, of Ohio; Prof. Dean C. Worcester, of Michigan; Non. Luke
I. Wright, of Tennessee; Hon. Henry C. Ide, of Vermont, and Prof. Bernard
Moses, of California, Commissioners to the Philippine Islands to continue
and perfect the work of organizing and establishing civil government
already commenced by the military authorities, subject in all respects to
any laws which Congress may hereafter enact.

The Commissioners named will meet and act as a board, and the Hon. William
H. Taft t is designated as president of the board. It is probable that the
transfer of authority from military commanders to civil officers will be
gradual and will occupy a considerable period. Its successful
accomplishment and the maintenance of peace and order in the meantime will
require the most perfect co-operation between the civil and military
authorities in the islands, and both should be directed during the
transition period by the same Executive Department. The Commission will
therefore report to the Secretary of War, and all their action will be
subject to your approval and control.

You will instruct the Commission to proceed to the city of Manila, where
they will make their principal office, and to communicate with the Military
Governor of the Philippine Islands, whom you will at the same time direct
to render to them every assistance within his power in the performance of
their duties. Without hampering them by too specific instructions, they
should in general be enjoined, after making themselves familiar with the
conditions and needs of the country, to devote their attention in the first
instance to the establishment of municipal governments, in which the
natives of the islands, both in the cities and in the rural communities,
shall be afforded the opportunity to manage their own local affairs to the
fullest extent of which they are capable and subject to the least degree of
supervision and control which a careful study of their capacities and
observation of the workings of native control show to be consistent with
the maintenance of law, order, and loyalty.

The next subject in order of importance should be the organization of
government in the larger administrative divisions corresponding to
counties, departments, or provinces, in which the common interests of many
or several municipalities falling within the same tribal lines, or the same
natural geographical limits, may best be subserved by a common
administration. Whenever the Commission is of the opinion that the
condition of affairs in the islands is such that the central administration
may safely be transferred from military to civil control they will report
that conclusion to you, with their recommendations as to the form of
central government to be established for the purpose of taking over the
control.

Beginning with the 1st day of September, 1900, the authority to exercise,
subject to my approval, through the Secretary of War, that part of the
power of government in the Philippine Islands which is of a legislative
nature is to be transferred from the Military Governor of the islands to
this Commission, to be thereafter exercised by them in the place and stead
of the Military Governor, under such rules and regulations as you shall
prescribe, until the establishment of the civil central government for the
islands contemplated in the last foregoing paragraph, or until Congress
shall otherwise provide. Exercise of this legislative authority will
include the making of rules and orders, having the effect of law, for the
raising of revenue by taxes, customs duties, and imposts; the appropriation
and expenditure of public funds of the islands; the establishment of an
educational system throughout the islands; the establishment of a system
to secure an efficient civil service; the organization and establishment of
courts; the organization and establishment of municipal and departmental
governments, and all other matters of a civil nature for which the Military
Governor is now competent to provide by rules or orders of a legislative
character.

The Commission will also have power during the same period to appoint to
office such officers under the judicial, educational, and civil-service
systems and in the municipal and departmental governments as shall be
provided for. Until the complete transfer of control the Military Governor
will remain the chief executive head of the government of the islands, and
will exercise the executive authority now possessed by him and not herein
expressly assigned to the Commission, subject, however, to the rules and
orders enacted by the Commission in the exercise of the legislative powers
conferred upon them. In the meantime the municipal and departmental
governments will continue to report to the Military Governor and be subject
to his administrative supervision and control, under your direction, but
that supervision and control will be confined within the narrowest limits
consistent with the requirement that the powers of government in the
municipalities and departments shall be honestly and effectively exercised
and that law and order and individual freedom shall be maintained.

All legislative rules and orders, establishments of government, and
appointments to office by the Commission will take effect immediately, or
at such times as they shall designate, subject to your approval and action
upon the coming in of the Commission's reports, which are to be made from
time to time as their action is taken. Wherever civil governments are
constituted under the direction of the Commission such military posts,
garrisons, and forces will be continued for the suppression of insurrection
and brigandage and the maintenance of law and order as the Military
Commander shall deem requisite, and the military forces shall be at all
times subject, under his orders, to the call of the civil authorities for
the maintenance of law and order and the enforcement of their authority.

In the establishment of municipal governments the Commission will take as
the basis of their work the governments established by the Military
Governor under his order of August 8, 1899. and under the report of the
board constituted by the Military Governor by his order of January 29,
1900, to formulate and report a plan of municipal government, of which His
Honor Cayetano Arellano, President of the Audiencia, was chairman, and they
will give to the conclusions of that board the weight and consideration
which the high character and distinguished abilities of its members
justify.

In the constitution of departmental or provincial governments they will
give especial attention to the existing government of the island of Negros,
constituted, with the approval of the people of that island, under the
order of the Military Governor of July 22, 1899, and after verifying, so
far as may be practicable, the reports of the successful working of that
government they will be guided by the experience thus acquired so far as it
may be applicable to the condition existing in other portions of the
Philippines. They will avail themselves, to the fullest degree practicable,
of the conclusions reached by the previous Commission to the Philippines.

In the distribution of powers among the governments organized by the
Commission, the presumption is always to be in favor of the smaller
subdivision, so that all the powers which can properly be exercised by the
municipal government shall be vested in that government, and all the powers
of a more general character which can be exercised by the departmental
government shall be vested in that government, and so that in the
governmental system, which is the result of the process, the central
government of the islands, following the example of the distribution of the
powers between the States and the National Government of the United States,
shall have no direct administration except of matters of purely general
concern, and shall have only such supervision and control over local
governments as may be necessary to secure and enforce faithful and
efficient administration by local officers.

The many Different degrees of civilization and varieties of custom and
capacity among the people of the different islands preclude very definite
instruction as to the part which the people shall take in the selection of
their own officers; but these general rules are to be observed: That in all
cases the municipal officers, who administer the local affairs of the
people, are to be selected by the people, and that wherever officers of
more extended jurisdiction are to be selected in any way, natives of the
islands are to be preferred, and if they can be found competent and willing
to perform the duties, they are to receive the offices in preference to any
others.

It will be necessary to fill some offices for the present with Americans
which after a time may well be filled by natives of the islands. As soon as
practicable a system for ascertaining the merit and fitness of candidates
for civil office should be put in force. An indispensable qualification for
all offices and positions of trust and authority in the islands must be
absolute and unconditional loyalty to the United States, and absolute and
unhampered authority and power to remove and punish any officer deviating
from that standard must at all times be retained in the hands of the
central authority of the islands.

In all the forms of government and administrative provisions which they are
authorized to prescribe the Commission should bear in mind that the
government which they are establishing is designed not for our
satisfaction, or for the expression of our theoretical views, but for the
happiness, peace, and prosperity of the people of the Philippine Islands,
and the measures adopted should be made to conform to their customs, their
habits, and even heir prejudices, to the fullest extent consistent with the
accomplishment of the Indispensable requisites of just and effective
government.

At the same time the Commission should bear in mind, and the people of the
islands should be made plainly to understand, that there are certain great
principles of government which have been made the basis of our governmental
system which we deem essential to the rule of law and the maintenance of
individual freedom, and of which they have, unfortunately, been denied the
experience possessed by us; that there are also certain practical rules of
government which we have found to be essential to the preservation of these
great principles of liberty and law, and that these principles and these
rules of government must be established and maintained in their islands for
the sake of their liberty and happiness, however much they may conflict
with the customs or laws of procedure with which they are familiar.

It is evident that the most enlightened thought of the Philippine Islands
fully appreciates the importance of these principles and rules, and they
will inevitably within a short time command universal assent. Upon every
division and branch of the government of the Philippines, therefore, must
be imposed these inviolable rules:

That no person shall be deprived of life, liberty, or property without due
process of law; that private property shall not be taken for public use
without just compensation; that in all criminal prosecutions the accused
shall enjoy the right to a speedy and public trial, to be informed of the
nature and cause of the accusation, to be confronted with the witnesses
against him, to have compulsory process for obtaining witnesses in his
favor, and to have the assistance of counsel for his defense; that
excessive bail shall not be required, nor excessive fines imposed, nor
cruel and unusual punishment inflicted; that no person shall be put twice
in jeopardy for the same offense, or be compelled in any criminal case to
be a witness against himself; that the right to be secure against
unreasonable searches and seizures shall not be violated; that neither
slavery nor involuntary servitude shall exist except as a punishment for
crime; that no bill of attainder or ex-post facto law shall be passed; that
no law shall be passed abridging the freedom of speech or of the press, or
the rights of the people to peaceably assemble and petition the Government
for a redress of grievances; that no law shall be made respecting an
establishment of religion, or prohibiting the free exercise thereof, and
that the free exercise and enjoyment of religious profession and worship
without discrimination or preference shall forever be allowed.

It will be the duty of the Commission to make a thorough investigation into
the titles to the large tracts of land held or claimed by individuals or by
religious orders; into the justice of the claims and complaints made
against such landholders by the people of the island or any part of the
people, and to seek by wise and peaceable measures a just settlement of the
controversies and redress of wrongs which have caused strife and bloodshed
in the past. In the performance of this duty the Commission is enjoined to
see that no injustice is done; to have regard for substantial rights and
equity, disregarding technicalities so far as substantial right permits,
and to observe the following rules:

That the provision of the Treaty of Paris pledging the United States to the
protection of all rights of property in the islands, and as well the
principle of our own Government which prohibits the taking of private
property without due process of law, shall not be violated; that the
welfare of the people of the islands, which should be a paramount
consideration, shall be attained consistently with this rule of property
right; that if it becomes necessary for the public interest of the people
of the islands to dispose of claims to property which the Commission finds
to be not lawfully acquired and held disposition shall be made thereof by
due legal procedure, in which there shall be full opportunity for fair and
impartial hearing and judgment; that if the same public interests require
the extinguishment of property rights lawfully acquired and held due
compensation shall be made out of the public treasury therefore; that no
form of religion and no minister of religion shall be forced upon any
community or upon any citizen of the islands; that, upon the other hand, no
minister of religion shall be interfered with or molested in following his
calling, and that the separation between State and Church shall be real,
entire, and absolute.

It will be the duty of the Commission to promote and extend, and, as they
find occasion, to improve the system of education already inaugurated by
the military authorities. In doing this they should regard as of first
importance the extension of a system of primary education which shall be
free to all, and which shall tend to fit the people for the duties of
citizenship and for the ordinary avocations of a civilized community. This
instruction should be given in the first instance in every part of the
islands in the language of the people. In view of the great number of
languages spoken by the different tribes, it is especially important to the
prosperity of the islands that a common medium of communication may be
established, and it is obviously desirable that this medium should be the
English language. Especial attention should be at once given to affording
full opportunity to all the people of the islands to acquire the use of the
English language.

It may be well that the main changes which should be made in the system of
taxation and in the body of the laws under which the people are governed,
except such changes as have already been made by the military government,
should be relegated to the civil government which is to be established
under the auspices of the Commission. It will, however, be the duty of the
Commission to inquire diligently as to whether there are any further
changes which ought not to be delayed, and if so, they are authorized to
make such changes subject to your approval. In doing so they are to bear in
mind that taxes which tend 6 penalize or repress industry and enterprise
are to be avoided; that provisions for taxation should be simple, so that
they may be understood by the people; that they should affect the fewest
practicable subjects of taxation which will serve for the general
distribution of the burden.

The main body of the laws which regulate the rights and obligations of the
people should be maintained with as little interference as possible.
Changes made should be mainly in procedure, and in the criminal laws to
secure speedy and impartial trials, and at the same time effective
administration and respect for individual rights.

In dealing with the uncivilized tribes of the islands the Commission should
adopt the same course followed by Congress in permitting the tribes of our
North American Indians to maintain their tribal organization and
government, and under which many of those tribes are now living in peace
and contentment, surrounded by a civilization to which they are unable or
unwilling to conform. Such tribal governments should, however, be subjected
to wise and firm regulation, and, without undue or petty interference,
constant and active effort should be exercised to prevent barbarous
practices and introduce civilized customs.

Upon all officers and employees of the United States, both civil and
military, should be impressed a sense of the duty to observe not merely the
material but the personal and social rights of the people of the islands,
and to treat them with the same courtesy and respect for their personal
dignity which the people of the United States are accustomed W require from
each other.

The articles of capitulation of the city of Manila on the 13th of August,
1898, concluded with these words:

"This city, its inhabitants, its churches and religious worship, its
educational establishments, and its private property of all descriptions,
are placed under the special safeguard of the faith and honor of the
American Army."

I believe that this pledge has been faithfully kept. As high and sacred an
obligation rests upon the Government of the United States to give
protection for property and life, civil and religious freedom, and wise,
firm, and unselfish guidance in the paths of peace and prosperity to all
the people of the Philippine Islands. I charge this Commission to labor for
the full performance of this obligation, which concerns the honor and
conscience of their country, in the firm hope that through their labors all
the inhabitants of the Philippine Islands may come to look back with
gratitude to the day when God gave victory to American arms at Manila and
set their land under the sovereignty and the protection of the people of
the United States.

Coincidently with the entrance of the Commission upon its labors I caused
to be issued by General MacArthur, the Military Governor of the
Philippines, on June 21, 1900, a proclamation of amnesty in generous terms,
of which many of the insurgents took advantage, among them a number of
important leaders.

This Commission, composed of eminent citizens representing the diverse
geographical and political interests of the country, and bringing to their
task the ripe fruits of long and intelligent service in educational,
administrative, and judicial careers, made great progress from the outset.
As early as August 21, 1900, it submitted a preliminary report, which will
be laid before the Congress, and from which it appears that already the
good effects of returning order are felt; that business, interrupted by
hostilities, is improving as peace extends; that a larger area is under
sugar cultivation than ever before; that the customs revenues are greater
than at any time during the Spanish rule; that economy and efficiency in
the military administration have created a surplus fund of $6,000,000,
available for needed public improvements; that a stringent civil-service
law is in preparation; that railroad communications are expanding, opening
up rich districts, and that a comprehensive scheme of education is being
organized.

Later reports from the Commission show yet more encouraging advance toward
insuring the benefits of liberty and good government to the Filipinos, in
the interest of humanity and with the aim of building up an enduring,
self-supporting, and self-administering community in those far eastern
seas. I would impress upon the Congress that whatever legislation may be
enacted in respect to the Philippine Islands should be along these generous
lines. The fortune of war has thrown upon this nation an unsought trust
which should be unselfishly discharged, and devolved upon this Government a
moral as well as material responsibility toward these millions whom we have
freed from an oppressive yoke.

I have on another occasion called the Filipinos the wards of the nation.
Our obligation as guardian was not lightly assumed; it must not be
otherwise than honestly fulfilled, aiming first of all to benefit those who
have come under our fostering care. It is our duty so to treat them that
our flag may be no less beloved in the mountains of Luzon and the fertile
zones of Mindanao and Negros than it is at home, that there as here it
shall be the revered symbol of liberty, enlightenment, and progress in
every avenue of development.

The Filipinos are a race quick to learn and to profit by knowledge He would
be rash who, with the teachings of contemporaneous history in view, would
fix a limit to the degree of culture and advancement yet within the reach
of these people if our duty toward them be faithfully performed.

The civil government of Puerto Rico provided for by the act of the Congress
approved April 12, 1900 is in successful operation The courts have been
established. The Governor and his associates, working intelligently and
harmoniously, are meeting with Commendable success.

On the 6th of November a general election was held in the island for
members of the Legislature, and the body elected has been called to convene
on the first Monday of December.

I recommend that legislation be enacted by the Congress conferring upon the
Secretary of the Interior supervision over the public lands in Puerto Rico,
and that he be directed to ascertain the location and quantity of lands the
title to which remained in the Crown of Spain at the date of cession of
Puerto Rico to the United States, and that appropriations necessary for
surveys be made, and that the methods of the disposition of such lands be
prescribed by law.

On the 25th of July, 1900, I directed that a call be issued for an election
in Cuba for members of a constitutional convention to frame a constitution
as a basis for a stable and independent government in the island. In
pursuance thereof the Military Governor issued the following instructions:
Whereas the Congress of the United States, by its joint resolution of April
20, 1898, declared:

"That the people of the island of Cuba are, and of right ought to be, free
and independent.

"That the United States hereby disclaims any disposition or intention to
exercise sovereignty, jurisdiction, or control over said island except for
the pacification thereof, and asserts its determination, when that is
accomplished, to leave the government and control of the island to its
people;"

And whereas, the people of Cuba have established municipal governments,
deriving their authority from the suffrages of the people given under just
and equal laws, and are now ready, in like manner, to proceed to the
establishment of a general government which shall assume and exercise
sovereignty, jurisdiction, and control over the island:

Therefore, it is ordered that a general election be held in the island of
Cuba on the third Saturday of September, in the year nineteen hundred, to
elect delegates to a convention to meet in the city of Havana at twelve
o'clock noon on the first Monday of November, in the year nineteen hundred,
to frame and adopt a constitution for the people of Cuba, and as a part
thereof to provide for and agree with the Government of the United States
upon the relations to exist between that Government and the Government of
Cuba, and to provide for the election by the people of officers under such
constitution and the transfer of government to the officers so elected.

The election will be held in the several voting precincts of the island
under, and pursuant to, the provisions of the electoral law of April 18,
1900, and the amendments thereof. The election was held on the 15th of
September, and the convention assembled on the 5th of November, 1900, and
is now in session.

In calling the convention to order, the Military Governor of Cuba made the
following statement: As Military Governor of the island, representing the
President of the United States, I call this convention to order.

It will be your duty, first, to frame and adopt a constitution for Cuba,
and when that has been done to formulate what in your opinion ought to be
the relations between Cuba and the United States.

The constitution must be adequate to secure a stable, orderly, and free
government.

When you have formulated the relations which in your opinion ought to exist
between Cuba and the United States the Government of the United States will
doubtless take such action on its part as shall lead to a final and
authoritative agreement between the people of the two countries to the
promotion of their common interests.

All friends of Cuba will follow your deliberations with the deepest
interest, earnestly desiring that you shall reach just conclusions, and
that by the dignity, individual self-restraint, and wise conservatism which
shall characterize your proceedings the capacity of the Cuban people for
representative government may be signally illustrated.

The fundamental distinction between true representative government and
dictatorship is that in the former every representative of the people, in
whatever office, confines himself strictly within the limits of his defined
powers. Without such restraint there can be no free constitutional
government.

Under the order pursuant to which you have been elected and convened you
have no duty and no authority to take part in the present government of the
island. Your powers are strictly limited by the terms of that order. When
the convention concludes its labors I will transmit to the Congress the
constitution as framed by the convention for its consideration and for such
action as it may deem advisable.

I renew the recommendation made in my special message of February 10, 1899,
as to the necessity for cable communication between the United States and
Hawaii, with extension to Manila. Since then circumstances have strikingly
emphasized this need. Surveys have shown the entire feasibility of a chain
of cables which at each stopping place shall touch on American territory,
so that the system shall be under our own complete control. Manila once
within telegraphic reach, connection with the systems of the Asiatic coast
would open increased and profitable opportunities for a more direct cable
route from our shores to the Orient than is now afforded by the
trans-Atlantic, continental, and trans-Asian lines. I urge attention to
this important matter.

The present strength of the Army is 100,000 men--65,000 regulars and
35,000 volunteers. Under the act of March 2, 1899, on the 30th of June next
the present volunteer force will be discharged and the Regular Army will be
reduced to 2,447 officers and 29,025 enlisted men.

In 1888 a Board of Officers convened by President Cleveland adopted a
comprehensive scheme of coast-defense fortifications which involved the
outlay of something over one hundred million dollars. This plan received
the approval of the Congress, and since then regular appropriations have
been made and the work of fortification has steadily progressed.

More than sixty millions of dollars have been invested in a great number of
forts and guns, with all the complicated and scientific machinery and
electrical appliances necessary for their use. The proper care of this
defensive machinery requires men trained in its use. The number of men
necessary to perform this duty alone is ascertained by the War Department,
at a minimum allowance, to be 18,420.

There are fifty-eight or more military posts in the United States other
than the coast-defense fortifications.

The number of these posts is being constantly increased by the Congress.
More than $22,000,000 have been expended in building and equipment, and
they can only be cared for by the Regular Army. The posts now in existence
and others to be built provide for accommodations for, and if fully
garrisoned require, 26,000 troops. Many of these posts are along our
frontier or at important strategic points, the occupation of which is
necessary.

We have in Cuba between 5,000 and 6,000 troops. For the present our troops
in that island cannot be withdrawn or materially diminished, and certainly
not until the conclusion of the labors of the constitutional convention now
in session and a government provided by the new constitution shall have
been established and its stability assured.

In Puerto Rico we have reduced the garrisons to 1,636, which includes 879
native troops. There is no room for further reduction here.

We will be required to keep a considerable force in the Philippine Islands
for some time to come. From the best information obtainable we will need
there for the immediate future from 45,000 to 60,000 men. I am sure the
number may be reduced as the insurgents shall come to acknowledge the
authority of the United States, of which there are assuring indications.

It must be apparent that we will require an army of about 60,000, and that
during present conditions in Cuba and the Philippines the President should
have authority to increase the force to the present number of 100,000.
Included in this number authority should be given to raise native troops in
the Philippines up to 15,000, which the Taft Commission believe will be
more effective in detecting and suppressing guerrillas, assassins, and
ladrones than our own soldiers.

The full discussion of this subject by the Secretary of War in his annual
report is called to your earnest attention.

I renew the recommendation made in my last annual message that the Congress
provide a special medal of honor for the volunteers, regulars, sailors, and
marines on duty in the Philippines who voluntarily remained in the service
after their terms of enlistment had expired.

I favor the recommendation of the Secretary of War for the detail oil
officers from the line of the Army when vacancies occur in the
Adjutant-General's Department, Inspector-General's Department,
Quartermaster's Department, Subsistence Department, Pay Department,
Ordnance Department, and Signal Corps.

The Army cannot be too highly commended for its faithful and effective
service in active military operations in the field and the difficult work
of civil administration.

The continued and rapid growth of the postal service is a sure index of the
great and increasing business activity of the country. Its most striking
new development is the extension of rural free delivery. This has come
almost wholly within the last year. At the beginning of the fiscal year
1899, 1900 the number of routes in operation was only 391, and most of
these had been running less than twelve months. On the 15th of November,
1900, the number had increased to 2,614, reaching into forty-four States
and Territories, and serving a population of 1,801,524. The number of
applications now pending and awaiting action nearly equals all those
granted up to the present time, and by the close of the current fiscal year
about 4,000 routes will have been established, providing for the daily
delivery of mails at the scattered homes of about three and a half millions
of rural population.

This service ameliorates the isolation of farm life, conduces to good
roads, and quickens and extends the dissemination of general information.
Experience thus far has tended to allay the apprehension that it would be
so expensive as to forbid its general adoption or make it a serious burden.
Its actual application has shown that it increases postal receipts, and can
be accompanied by reductions in other branches of the service, so that the
augmented revenues and the accomplished savings together materially reduce
the net cost. The evidences which point to these conclusions are presented
in detail in the annual report of the Postmaster-General, which with its
recommendations is commended to the consideration of the Congress. The full
development of this special service, however, requires such a large outlay
of money that it should be undertaken only after a careful study and
thorough understanding of all that it involves.

Very efficient service has been rendered by the Navy in connection with the
insurrection in the Philippines and the recent disturbance in China.

A very satisfactory settlement has been made of the long-pending question
of the manufacture of armor plate. A reasonable price has been secured and
the necessity for a Government armor plant avoided.

I approve of the recommendations of the Secretary for new vessels and for
additional officers and men which the required increase of the Navy makes
necessary. I commend to the favorable action of the Congress the measure
now pending for the erection of a statue to the memory of the late Admiral
David D. Porter. I commend also the establishment of a national naval
reserve and of the grade of vice-admiral. Provision should be made, as
recommended by the Secretary, for suitable rewards for special merit. Many
officers who rendered the most distinguished service during the recent war
with Spain have received in return no recognition from the Congress.

The total area of public lands as given by the Secretary of the Interior is
approximately 1,071,881,662 acres, of which 917,135,880 acres are
undisposed of and 154,745,782 acres have been reserved for various
purposes. The public lands disposed of during the year amount to
13,453,887.96 acres, including 62,423.09 acres of Indian lands, an increase
Of 4,271,474.80 over the preceding year. The total receipts from the sale
of public lands during the fiscal year were $4,379,758.10, an increase of
$1,309,620.76 over the preceding year.

The results obtained from our forest policy have demonstrated its wisdom
and the necessity in the interest of the public for its continuance and
increased appropriations by the Congress for the carrying on of the work.
On June 30, 1900, there were thirty-seven forest reserves, created by
Presidential proclamations under section 24 Of the act of March 3, 1891,
embracing an area Of 46,425,529 acres.

During the past year the Olympic Reserve, in the State of Washington, was
reduced 265,040 acres, leaving its present area at 1,923,840 acres. The
Prescott Reserve, in Arizona, was increased from 10,240 acres to 423,680
acres, and the Big Horn Reserve, in Wyoming, was increased from 1,127,680
acres to 1,180,800 acres. A new reserve; the Santa Ynez, in California,
embracing an area of 145,000 acres, was created during this year. On
October 10, 1900, the Crow Creek Forest Reserve, in Wyoming, was created,
with an area of 56,320 acres.

At the end of the fiscal year there were on the pension roll 993,529 names,
a net increase Of 2,010 over the fiscal year 1899. The number added to the
rolls during the year was 45,344. The amount disbursed for Army pensions
during the year was $134,700,597.24 and for Navy pensions $3,761,533.41, a
total of $138,462,130.65, leaving an unexpended balance of $5,542,768.25 to
be covered into the Treasury, which shows an increase over the previous
year's expenditure Of $107,077.70. There were 684 names added to the rolls
during the year by special acts passed at the first session of the
Fifty-sixth Congress.

The act of May 9, 1900, among other things provides for an extension of
income to widows pensioned under said act to $250 per annum. The Secretary
of the Interior believes that by the operations of this act the number of
persons pensioned under it will increase and the increased annual payment
for pensions will be between $3,000,000 and $4,000,000.

The Government justly appreciates the services of its soldiers and sailors
by making pension payments liberal beyond precedent to them, their widows
and orphans.

There were 26,540 letters patent granted, including reissues and designs,
during the fiscal year ended June 30, 1900; 1,660 trademarks, 682 labels,
and 93 prints registered. The number of patents which expired was 19,988.
The total receipts for patents were $1,358,228.35. The expenditures were
$1,247,827.58, showing a surplus Of $110,400.77

The attention of the Congress is called to the report of the Secretary of
the Interior touching the necessity for the further establishment of
schools in the Territory of Alaska, and favorable action is invited
thereon.

Much interesting information is given in the report of the Governor of
Hawaii as to the progress and development of the islands during the period
from July 7, 1898, the date of the approval of the joint resolution of the
Congress providing for their annexation, up to April 30, 1900, the date of
the approval of the act providing a government for the Territory, and
thereafter.

The last Hawaiian census, taken in the year 1896, gives a total population
of 109,020, Of Which 31,019 were native Hawaiians. The number of Americans
reported was 8,485. The results of the Federal census, taken this year,
show the islands to have a total population Of 154,001, showing an increase
over that reported in 1896 of 44,981, or 41.2 per cent.

There has been marked progress in the educational, agricultural, and
railroad development of the islands.

In the Territorial act of April 30, 1900, section 7 of said act repeals
Chapter 34 Of the Civil Laws of Hawaii whereby the Government was to assist
in encouraging and developing the agricultural resources of the Republic,
especially irrigation. The Governor of Hawaii recommends legislation
looking to the development of such water supply as may exist on the public
lands, with a view of promoting land settlement. The earnest consideration
of the Congress is invited to this important recommendation and others, as
embodied in the report of the Secretary of the Interior.

The Director of the Census states that the work in connection with the
Twelfth Census is progressing favorably. This national undertaking, ordered
by the Congress each decade, has finally resulted in the collection of an
aggregation of statistical facts to determine the industrial growth of the
country, its manufacturing and mechanical resources, its richness in mines
and forests, the number of its agriculturists, their farms and products,
its educational and religious opportunities, as well as questions
pertaining to sociological conditions.

The labors of the officials in charge of the Bureau indicate that the four
important and most desired subjects, namely, population, agricultural,
manufacturing, and vital statistics, will be completed within the limit
prescribed by the law of March 3, 1899.

The field work incident to the above inquiries is now practically finished,
and as a result the population of the States and Territories, including the
Hawaiian Islands and Alaska, has been announced. The growth of population
during the last decade amounts to over 13,000,000, a greater numerical
increase than in any previous census in the history of the country.

Bulletins will be issued as rapidly as possible giving the population by
States and Territories, by minor civil divisions. Several announcements of
this kind have already been made, and it is hoped that the list will be
completed by January 1. Other bulletins giving the results of the
manufacturing and agricultural inquiries will be given to the public as
rapidly as circumstances will admit.

The Director, while confident of his ability to complete the different
branches of the undertaking in the allotted time, finds himself embarrassed
by the lack of a trained force properly equipped for statistical work, thus
raising the question whether in the interest of economy and a thorough
execution of the census work there should not be retained in the Government
employ a certain number of experts not only to aid in the preliminary
organization prior to the taking of the decennial census, but in addition
to have the advantage in the field and office work of the Bureau of trained
assistants to facilitate the early completion of this enormous
undertaking.

I recommend that the Congress at its present session apportion
representation among the several States as provided by the Constitution.

The Department of Agriculture has been extending its work during the past
year, reaching farther for new varieties of seeds and plants; co-operating
more fully with the States and Territories in research along useful lines;
making progress in meteorological work relating to lines of wireless
telegraphy and forecasts for ocean-going vessels; continuing inquiry as to
animal disease; looking into the extent and character of food adulteration;
outlining plans for the care, preservation, and intelligent harvesting of
our woodlands; studying soils that producers may cultivate with better
knowledge of conditions, and helping to clothe desert places with grasses
suitable to our and regions. Our island possessions are being considered
that their peoples may be helped to produce the tropical products now so
extensively brought into the United States. Inquiry into methods of
improving our roads has been active during the year; help has been given to
many localities, and scientific investigation of material in the States and
Territories has been inaugurated. Irrigation problems in our semiarid
regions are receiving careful and increased consideration.

An extensive exhibit at Paris of the products of agriculture has made the
peoples of many countries more familiar with the varied products of our
fields and their comparative excellence.

The collection of statistics regarding our crops is being improved and
sources of information are being enlarged, to the end that producers may
have the earliest advices regarding crop conditions. There has never been a
time when those for whom it was established have shown more appreciation of
the services of the Department.

In my annual message of December 5, 1898, I called attention to the
necessity for some amendment of the alien contract law. There still remain
important features of the rightful application of the eight-hour law for
the benefit of labor and of the principle of arbitration, and I again
commend these subjects to the careful attention of the Congress.

That there may be secured the best service possible in the Philippine
Islands, I have issued, under date of November 30, 1900, the following
order: The United States Civil Service Commission is directed to render
such assistance as may be practicable to the Civil Service Board, created
under the act of the United States Philippine Commission, for the
establishment and maintenance of an honest and efficient civil service in
the Philippine Islands, and for that purpose to conduct examinations for
the civil service of the Philippine islands, upon the request of the Civil
Service Board of said islands, under such regulations as may be agreed upon
by the said Board and the said United States Civil Service Commission. The
Civil Service Commission is greatly embarrassed in its work for want of an
adequate permanent force for clerical and other assistance. Its needs are
fully set forth in its report. I invite attention to the report, and
especially urge upon the Congress that this important bureau of the public
service, which passes upon the qualifications and character of so large a
number of the officers and employees of the Government, should be supported
by all needed appropriations to secure promptness and efficiency.

I am very much impressed with the statement made by the heads of all the
Departments of the urgent necessity of a hall of public records. In every
departmental building in Washington, so far as I am informed, the space for
official records is not only exhausted, but the walls of rooms are lined
with shelves, the middle floor space of many rooms is filled with the
cases, and garrets and basements, which were never intended and are
unfitted for their accommodation, are crowded with them. Aside from the
inconvenience there is great danger, not only from fire, but from the
weight of these records upon timbers not intended for their support. There
should be a separate building especially designed for the purpose of
receiving and preserving the annually accumulating archives of the several
Executive Departments. Such a hall need not be a costly structure, but
should be so arranged as to admit of enlargement from time to time. I
urgently recommend that the Congress take early action in this matter.

I transmit to the Congress a resolution adopted at a recent meeting of the
American Bar Association concerning the proposed celebration of John
Marshall Day, February 4, 1901. Fitting exercises have been arranged, and
it is earnestly desired by the committee that the Congress may participate
in this movement to honor the memory of the great jurist.

The transfer of the Government to this city is a fact of great historical
interest. Among the people there is a feeling of genuine pride in the
Capital of the Republic.

It is a matter of interest in this connection that in 1800 the population
of the District of Columbia was 14,093; to-day it is 278,718. The
population of the city of Washington was then 3,210; to-day it is 218,196.

The Congress having provided for "an appropriate national celebration of
the Centennial Anniversary of the Establishment of the Seat of the
Government in the District of Columbia," the committees authorized by it
have prepared a programme for the 12th of December, 1900, which date has
been selected as the anniversary day. Deep interest has been shown in the
arrangements for the celebration by the members of the committees of the
Senate and House of Representatives, the committee of Governors appointed
by the President, and the committees appointed by the citizens and
inhabitants of the District of Columbia generally. The programme, in
addition to a reception and other exercises at the Executive Mansion,
provides commemorative exercises to be held jointly by the Senate and House
of Representatives in the Hall of the House of Representatives, and a
reception in the evening at the Corcoran Gallery of Art in honor of the
Governors of the States and Territories.

In our great prosperity we must guard against the danger it invites of
extravagance in Government expenditures and appropriations; and the chosen
representatives of the people will, I doubt not, furnish an example in
their legislation of that wise economy which in a season of plenty husbands
for the future. In this era of great business activity and opportunity
caution is not untimely. It will not abate, but strengthen, confidence. It
will not retard, but promote, legitimate industrial and commercial
expansion. Our growing power brings with it temptations and perils
requiring constant vigilance to avoid. It must not be used to invite
conflicts, nor for oppression, but for the more effective maintenance of
those principles of equality and justice upon which our institutions and
happiness depend. Let us keep always in mind that the foundation of our
Government is liberty; its superstructure peace.