To the Senate and House of Representatives:

The reports of the heads of the several Executive Departments required by
law to be submitted to me, which are herewith transmitted, and the reports
of the Secretary of the Treasury and the Attorney-General, made directly to
Congress, furnish a comprehensive view of the administrative work of the
last fiscal year relating to internal affair. It would be of great
advantage if these reports could have an alternative perusal by every
member of Congress and by all who take an interest in public affairs. Such
a perusal could not fail to excite a higher appreciation of the vast labor
and conscientious effort which are given to the conduct of our civil
administration.

The reports will, I believe, show that every question has been approached,
considered, and decided from the standpoint of public duty upon
considerations affecting the public interests alone. Again I invite to
every branch of the service the attention and scrutiny of Congress.

The work of the State Department during the last year has been
characterized by an unusual number of important negotiations and by
diplomatic results of a notable and highly beneficial character. Among
these are the reciprocal trade arrangements which have been concluded, in
the exercise of the powers conferred by section 3 of the tariff law, with
the Republic of Brazil, with Spain for its West India possessions, and with
Santo Domingo. Like negotiations with other countries have been much
advanced, and it is hoped that before the close of the year further
definitive trade arrangements of great value will be concluded.

In view of the reports which had been received as to the diminution of the
seal herds in the Bering Sea, I deemed it wise to propose to Her Majesty's
Government in February last that an agreement for a closed season should be
made pending the negotiations for arbitration, which then seemed to be
approaching a favorable conclusion. After much correspondence and delays,
for which this Government was not responsible, an agreement was reached and
signed on the 15th of June, by which Great Britain undertook from that date
and until May 1, 1892, to prohibit the killing by her subjects of seals in
the Bering Sea, and the Government of the United States during the same
period to enforce its existing prohibition against pelagic sealing and to
limit the catch by the fur-seal company upon the islands to 7,500 skins. If
this agreement could have been reached earlier in response to the strenuous
endeavors of this Government, it would have been more effective; but coming
even as late as it did it unquestionably resulted in greatly diminishing
the destruction of the seals by the Canadian sealers.

In my last annual message I stated that the basis of arbitration proposed
by Her Majesty's Government for the adjustment of the long-pending
controversy as to the seal fisheries was not acceptable. I am glad now to
be able to announce that terms satisfactory to this Government have been
agreed upon and that an agreement as to the arbitrators is all that is
necessary to the completion of the convention. In view of the advanced
position which this Government has taken upon the subject of international
arbitration, this renewed expression of our adherence to this method for
the settlement of disputes such as have arisen in the Bering Sea will, I
doubt not, meet with the concurrence of Congress.

Provision should be made for a joint demarcation of the frontier line
between Canada and the United States wherever required by the increasing
border settlements, and especially for the exact location of the water
boundary in the straits and rivers.

I should have been glad to announce some favorable disposition of the
boundary dispute between Great Britain and Venezuela touching the western
frontier of British Guiana, but the friendly efforts of the United States
in that direction have thus far been unavailing. This Government will
continue to express its concern at any appearance of foreign encroachment
on territories long under the administrative control of American States.
The determination of a disputed boundary is easily attainable by amicable
arbitration where the rights of the respective parties rest, as here, on
historic facts readily ascertainable.

The law of the last Congress providing a system of inspection for our meats
intended for export, and clothing the President with power to exclude
foreign products from our market in case the country sending them should
perpetuate unjust discriminations against any product of the United States,
placed this Government in a position to effectively urge the removal of
such discriminations against our meats. It is gratifying to be able to
state that Germany, Denmark, Italy, Austria, and France, in the order
named, have opened their ports to inspected American pork products. The
removal of these restrictions in every instance was asked for and given
solely upon the ground that we have now provided a meat inspection that
should be accepted as adequate to the complete removal of the dangers, real
or fancied, which had been previously urged. The State Department, our
ministers abroad, and the Secretary of Agriculture have cooperated with
unflagging and intelligent zeal for the accomplishment of this great
result. The outlines of an agreement have been reached with Germany looking
to equitable trade concessions in consideration of the continued free
importation of her sugars, but the time has not yet arrived when this
correspondence can be submitted to Congress.

The recent political disturbances in the Republic of Brazil have excited
regret and solicitude. The information we possessed was too meager to
enable us to form a satisfactory judgment of the causes leading to the
temporary assumption of supreme power by President Fonseca; but this
Government did not fail to express to him its anxious solicitude for the
peace of Brazil and for the maintenance of the free political institutions
which had recently been established there, nor to offer our advice that
great moderation should be observed in the clash of parties and the contest
for leadership. These counsels were received in the most friendly spirit,
and the latest information is that constitutional government has been
reestablished without bloodshed.

The lynching at New Orleans in March last of eleven men of Italian nativity
by a mob of citizens was a most deplorable and discreditable incident. It
did not, however, have its origin in any general animosity to the Italian
people, nor in any disrespect to the Government of Italy, with which our
relations were of the most friendly character. The fury of the mob was
directed against these men as the supposed participants or accessories in
the murder of a city officer. I do not allude to this as mitigating in any
degree this offense against law and humanity, but only as affecting the
international questions which grew out of it. It was at once represented by
the Italian minister that several of those whose lives had been taken by
the mob were Italian subjects, and a demand was made for the punishment of
the participants and for an indemnity to the families of those who were
killed. It is to be regretted that the manner in which these claims were
presented was not such as to promote a calm discussion of the questions
involved; but this may well be attributed to the excitement and indignation
which the crime naturally evoked. The views of this Government as to its
obligations to foreigners domiciled here were fully stated in the
correspondence, as well as its purpose to make an investigation of the
affair with a view to determine whether there were present any
circumstances that could under such rules of duty as we had indicated
create an obligation upon the United States. The temporary absence of a
minister plenipotentiary of Italy at this capital has retarded the further
correspondence, but it is not doubted that a friendly conclusion is
attainable.

Some suggestions growing out of this unhappy incident are worthy the
attention of Congress. It would, I believe, be entirely competent for
Congress to make offenses against the treaty rights of foreigners domiciled
in the United States cognizable in the Federal courts. This has not,
however, been done, and the Federal officers and courts have no power in
such cases to intervene, either for the protection of a foreign citizen or
for the punishment of his slayers. It seems to me to follow, in this state
of the law, that the officers of the State charged with police and judicial
powers in such cases must in the consideration of international questions
growing out of such incidents be regarded in such sense as Federal agents
as to make this Government answerable for their acts in cases where it
would be answerable if the United States had used its constitutional power
to define and punish crime against treaty rights.

The civil war in Chile, which began in January last, was continued, but
fortunately with infrequent and not important armed collisions, until
August 28, when the Congressional forces landed near Valparaiso and after a
bloody engagement captured that city. President Balmaceda at once
recognized that his cause was lost, and a Provisional Government was
speedily established by the victorious party. Our minister was promptly
directed to recognize and put himself in communication with this Government
so soon as it should have established its de facto character, which was
done. During the pendency of this civil contest frequent indirect appeals
were made to this Government to extend belligerent rights to the insurgents
and to give audience to their representatives. This was declined, and that
policy was pursued throughout which this Government when wrenched by civil
war so strenuously insisted upon on the part of European nations. The
Itata, an armed vessel commanded by a naval officer of the insurgent fleet,
manned by its sailors and with soldiers on board, was seized under process
of the United States court at San Diego, Cal., for a violation of our
neutrality laws. While in the custody of an officer of the court the vessel
was forcibly wrested from his control and put to sea. It would have been
inconsistent with the dignity and self-respect of this Government not to
have insisted that the Itala should be returned to San Diego to abide the
judgment of the court. This was so clear to the junta of the Congressional
party, established at Iquique, that before the arrival of the Itata at that
port the secretary of foreign relations of the Provisional Government
addressed to Rear-Admiral Brown, commanding the United States naval forces,
a communication, from which the following is an extract: The Provisional
Government has learned by the cablegrams of the Associated Press that the
transport Itata, detained in San Diego by order of the United States for
taking on board munitions of war, and in possession of the marshal, left
the port, carrying on board this official, who was landed at a point near
the coast, and then continued her voyage. If this news be correct this
Government would deplore the conduct of the Itata, and as an evidence that
it is not disposed to support or agree to the infraction of the laws of the
United States the undersigned takes advantage of the personal relations you
have been good enough to maintain with him since your arrival in this port
to declare to you that as soon as she is within reach of our orders his
Government will put the Itata, with the arms and munitions she took on
board in Sail Diego, at the disposition of the United States. A trial in
the district court of the United States for the southern district of
California has recently resulted in a decision holding, among other things,
that inasmuch as the Congressional party had not been recognized as a
belligerent the acts done in its interest could not be a violation of our
neutrality laws. From this judgment the United States has appealed, not
that the condemnation of the vessel is a matter of importance, but that we
may know what the present state of our law is; for if this construction of
the statute is correct there is obvious necessity for revision and
amendment.

During the progress of the war in Chile this Government tendered its good
offices to bring about a peaceful adjustment, and it was at one time hoped
that a good result might be reached; but in this we were disappointed.

The instructions to our naval officers and to our minister at Santiago from
the first to the last of this struggle enjoined upon them the most
impartial treatment and absolute noninterference. I am satisfied that these
instructions were observed and that our representatives were always
watchful to use their influence impartially in the interest of humanity,
and on more than one occasion did so effectively. We could not forget,
however, that this Government was in diplomatic relations with the then
established Government of Chile, as it is now in such relations with the
successor of that Government. I am quite sure that President Montt, who
has, under circumstances of promise for the peace of Chile, been installed
as President of that Republic, will not desire that in the unfortunate
event of any revolt against his authority the policy of this Government
should be other than that which we have recently observed. No official
complaint of the conduct of our minister or of our naval officers during
the struggle has been presented to this Government, and it is a matter of
regret that so many of our own people should have given ear to unofficial
charges and complaints that manifestly had their origin in rival interests
and in a wish to pervert the relations of the United States with Chile.

The collapse of the Government of Balmaceda brought about a condition which
is unfortunately too familiar in the history of the Central and South
American States. With the overthrow of the Balmaceda Government he and many
of his councilors and officers became at once fugitives for their lives and
appealed to the commanding officers of the foreign naval vessels in the
harbor of Valparaiso and to the resident foreign ministers at Santiago for
asylum. This asylum was freely given, according to my information, by the
naval vessels of several foreign powers and by several of the legations at
Santiago. The American minister as well as his colleagues, acting upon the
impulse of humanity, extended asylum to political refugees whose lives were
in peril. I have not been willing to direct the surrender of such of these
persons as are still in the American legation without suitable conditions.

It is believed that the Government of Chile is not in a position, in view
of the precedents with which it has been connected, to broadly deny the
right of asylum, and the correspondence has not thus far presented any such
denial. The treatment of our minister for a time was such as to call for a
decided protest, and it was very gratifying to observe that unfriendly
measures, which were undoubtedly the result of the prevailing excitement,
were at once rescinded or suitably relaxed.

On the 16th of October an event occurred in Valparaiso so serious and
tragic in its circumstances and results as to very justly excite the
indignation of our people and to call for prompt and decided action on the
part of this Government. A considerable number of the sailors of the United
States steamship Baltimore, then in the harbor at Valparaiso, being upon
shore leave and unarmed, were assaulted by armed men nearly simultaneously
in different localities in the city. One petty officer was killed outright
and seven or eight seamen were seriously wounded, one of whom has since
died. So savage and brutal was the assault that several of our sailors
received more than two and one as many as eighteen stab wounds. An
investigation of the affair was promptly made by a board of officers of the
Baltimore, and their report shows that these assaults were unprovoked, that
our men were conducting themselves in a peaceable and orderly manner, and
that some of the police of the city took part in the assault and used their
weapons with fatal effect, while a few others, with some well-disposed
citizens, endeavored to protect our men. Thirty-six of our sailors were
arrested, and some of them while being taken to prison were cruelly beaten
and maltreated. The fact that they were all discharged, no criminal charge
being lodged against any one of them, shows very clearly that they were
innocent of any breach of the peace.

So far as I have yet been able to learn no other explanation of this bloody
work has been suggested than that it had its origin in hostility to those
men as sailors of the United States, wearing the uniform of their
Government, and not in any individual act or personal animosity. The
attention of the Chilean Government was at once called to this affair, and
a statement of the facts obtained by the investigation we had conducted was
submitted, accompanied by a request to be advised of any other or
qualifying facts in the possession of the Chilean Government that might
tend to relieve this affair of the appearance of an insult to this
Government. The Chilean Government was also advised that if such qualifying
facts did not exist this Government would confidently expect full and
prompt reparation.

It is to be regretted that the reply of the secretary for foreign affairs
of the Provisional Government was couched in an offensive tone. To this no
response has been made. This Government is now awaiting the result of an
investigation which has been conducted by the criminal court at Valparaiso.
It is reported unofficially that the investigation is about completed, and
it is expected that the result will soon be communicated to this
Government, together with some adequate and satisfactory response to the
note by which the attention of Chile was called to this incident. If these
just expectations should be disappointed or further needless delay
intervene, I will by a special message bring this matter again to the
attention of Congress for such action as may be necessary. The entire
correspondence with the Government of Chile will at an early day be
submitted to Congress.

I renew the recommendation of my special message dated January 16, 1890,
for the adoption of the necessary legislation to enable this Government to
apply in the case of Sweden and Norway the same rule in respect to the
levying of tonnage dues as was claimed and secured to the shipping of the
United States in 1828 under Article VIII of the treaty of 1827.

The adjournment of the Senate without action on the pending acts for the
suppression of the slave traffic in Africa and for the reform of the
revenue tariff of the Independent State of the Kongo left this Government
unable to exchange those acts on the date fixed, July 2, 1891. A modus
vivendi has been concluded by which the power of the Kongo State to levy
duties on imports is left unimpaired, and by agreement of all the
signatories to the general slave-trade act the time for the exchange of
ratifications on the part of the United States has been extended to
February 2, 1892.

The late outbreak against foreigners in various parts of the Chinese Empire
has been a cause of deep concern in view of the numerous establishments of
our citizens in the interior of that country. This Government can do no
less than insist upon a continuance of the protective and punitory measures
which the Chinese Government has heretofore applied. No effort will be
omitted to protect our citizens peaceably sojourning in China, but recent
unofficial information indicates that what was at first regarded as an
outbreak of mob violence against foreigners has assumed the larger form of
an insurrection against public order.

The Chinese Government has declined to receive Mr. Blair as the minister of
the United States on the ground that as a participant while a Senator in
the enactment of the existing legislation against the introduction of
Chinese laborers he has become unfriendly and objectionable to China. I
have felt constrained to point out to the Chinese Government the
untenableness of this position, which seems to rest as much on the
unacceptability of our legislation as on that of the person chosen, and
which if admitted would practically debar the selection of any
representative so long as the existing laws remain in force.

You will be called upon to consider the expediency of making special
provision by law for the temporary admission of some Chinese artisans and
laborers in connection with the exhibit of Chinese industries at the
approaching Columbian Exposition. I regard it as desirable that the Chinese
exhibit be facilitated in every proper way.

A question has arisen with the Government of Spain touching the rights of
American citizens in the Caroline Islands. Our citizens there long prior to
the confirmation of Spain's claim to the islands had secured by settlement
and purchase certain rights to the recognition and maintenance of which the
faith of Spain was pledged. I have had reason within the past year very
strongly to protest against the failure to carry out this pledge on the
part of His Majesty's ministers, which has resulted in great injustice and
injury to the American residents.

The Government and people of Spain propose to celebrate the four hundredth
anniversary of the discovery of America by holding an exposition at Madrid,
which will open on the 12th of September and continue until the 31st of
December, 1892. A cordial invitation has been extended to the United States
to take part in this commemoration, and as Spain was one of the first
nations to express the intention to participate in the World's Columbian
Exposition at Chicago, it would be very appropriate for this Government to
give this invitation its friendly promotion.

Surveys for the connecting links of the projected intercontinental railway
are in progress, not only in Mexico, but at various points along the course
mapped out. Three surveying parties are now in the field under the
direction of the commission. Nearly 1,000 miles of the proposed road have
been surveyed, including the most difficult part, that through Ecuador and
the southern part of Colombia. The reports of the engineers are very
satisfactory, and show that no insurmountable obstacles have been met
with.

On November 12, 1884, a treaty was concluded with Mexico reaffirming the
boundary between the two countries as described in the treaties of February
2, 1848, and December 30, 1853. March 1, 1889, a further treaty was
negotiated to facilitate the carrying out of the principles of the treaty
of 1884 and to avoid the difficulties occasioned by reason of the changes
and alterations that take place from natural causes in the Rio Grande and
Colorado rivers in the portions thereof constituting the boundary line
between the two Republics. The International Boundary Commission provided
for by the treaty of 1889 to have exclusive jurisdiction of any question
that may arise has been named by the Mexican Government. An appropriation
is necessary to enable the United States to fulfill its treaty obligations
in this respect.

The death of King Kalakaua in the United States afforded occasion to
testify our friendship for Hawaii by conveying the King's body to his own
land in a naval vessel with all due honors. The Government of his
successor, Queen Liliuokolani is seeking to promote closer commercial
relations with the United States. Surveys for the much-needed submarine
cable from our Pacific coast to Honolulu are in progress, and this
enterprise should have the suitable promotion of the two Governments. I
strongly recommend that provision be made for improving the harbor of Pearl
River and equipping it as a naval station.

The arbitration treaty formulated by the International American Conference
lapsed by reason of the failure to exchange ratifications fully within the
limit of time provided; but several of the Governments concerned have
expressed a desire to save this important result of the conference by an
extension of the period. It is, in my judgment, incumbent upon the United
States to conserve the influential initiative it has taken in this measure
by ratifying the instrument and by advocating the proposed extension of the
time for exchange. These views have been made known to the other
signatories.

This Government has found occasion to express in a friendly spirit, but
with much earnestness, to the Government of the Czar its serious concern
because of the harsh measures now being enforced against the Hebrews in
Russia. By the revival of antisemitic laws, long in abeyance, great numbers
of those unfortunate people have been constrained to abandon their homes
and leave the Empire by reason of the impossibility of finding subsistence
within the pale to which it is sought to confine them. The immigration of
these people to the United States--many other countries being closed to
them--is largely increasing and is likely to assume proportions which may
make it difficult to find homes and employment for them here and to
seriously affect the labor market. It is estimated that over 1,000,000 will
be forced from Russia within a few years. The Hebrew is never a beggar; he
has always kept the law--life by toil--often under severe and oppressive
civil restrictions. It is also true that no race, sect, or class has more
fully cared for its own than the Hebrew race. But the sudden transfer of
such a multitude under conditions that tend to strip them of their small
accumulations and to depress their energies and courage is neither good for
them nor for us.

The banishment, whether by direct decree or by not less certain indirect
methods, of so large a number of men and women is not a local question. A
decree to leave one country is in the nature of things an order to enter
another--some other. This consideration, as well as the suggestion of
humanity, furnishes ample ground for the remonstrances which we have
presented to Russia, while our historic friendship for that Government can
not fail to give the assurance that our representations are those of a
sincere wellwisher.

The annual report of the Maritime Canal Company of Nicaragua shows that
much costly and necessary preparatory work has been done during the year in
the construction of shops, railroad tracks, and harbor piers and
breakwaters, and that the work of canal construction has made some
progress.

I deem it to be a matter of the highest concern to the United States that
this canal, connecting the waters of the Atlantic and Pacific oceans and
giving to us a short water communication between our ports upon those two
great seas, should be speedily constructed and at the smallest practicable
limit of cost. The gain in freights to the people and the direct saving to
the Government of the United States in the use of its naval vessels would
pay the entire cost of this work within a short series of years. The report
of the Secretary of the Navy shows the saving in our naval expenditures
which would result.

The Senator from Alabama (Mr. Morgan) in his argument upon this subject
before the Senate at the last session did not overestimate the importance
of this work when he said that "the canal is the most important subject now
connected with the commercial growth and progress of the United States."

If this work is to be promoted by the usual financial methods and without
the aid of this Government, the expenditures in its interest-bearing
securities and stock will probably be twice the actual cost. This will
necessitate higher tolls and constitute a heavy and altogether needless
burden upon our commerce and that of the world. Every dollar of the bonds
and stock of the company should represent a dollar expended in the
legitimate and economical prosecution of the work. This is only possible by
giving to the bonds the guaranty of the United States Government. Such a
guaranty would secure the ready sale at par of a 3 per cent bond from time
to time as the money was needed. I do not doubt that built upon these
business methods the canal would when fully inaugurated earn its fixed
charges and operating expenses. But if its bonds are to be marketed at
heavy discounts and every bond sold is to be accompanied by a gift of
stock, as has come to be expected by investors in such enterprises, the
traffic will be seriously burdened to pay interest and dividends. I am
quite willing to recommend Government promotion in the prosecution of a
work which, if no other means offered for securing its completion, is of
such transcendent interest that the Government should, in my opinion,
secure it by direct appropriations from its Treasury.

A guaranty of the bonds of the canal company to an amount necessary to the
completion of the canal could, I think, be so given as not to involve any
serious risk of ultimate loss. The things to be carefully guarded are the
completion of the work within the limits of the guaranty, the subrogation
of the United States to the rights of the first-mortgage bondholders for
any amounts it may have to pay, and in the meantime a control of the stock
of the company as a security against mismanagement and loss. I most
sincerely hope that neither party nor sectional lines will be drawn upon
this great American project, so full of interest to the people of all our
States and so influential in its effects upon the prestige and prosperity
of our common country.

The island of Navassa, in the West Indian group, has, under the provisions
of Title VII of the Revised Statutes, been recognized by the President as
appertaining to the United States. It contains guano deposits, is owned by
the Navassa Phosphate Company, and is occupied solely its employees. In
September, 1889, a revolt took place among these laborers, resulting in the
killing of some of the agents of the company, caused, as the laborers
claimed, by cruel treatment. These men were arrested and tried in the
United States court at Baltimore, under section 5576 of the statute
referred to, as if the offenses had been committed on board a merchant
vessel of the United States on the high seas. There appeared on the trial
and otherwise came to me such evidences of the bad treatment of the men
that in consideration of this and of the fact that the men had no access to
any public officer or tribunal for protection or the redress of their
wrongs I commuted the death sentences that had been passed by the court
upon three of them. In April last my attention was again called to this
island and to the unregulated condition of things there by a letter from a
colored laborer, who complained that he was wrongfully detained upon the
island by the phosphate company after the expiration of his contract of
service. A naval vessel was sent to examine into the case of this man and
generally into the condition of things on the island. It was found that the
laborer referred to had been detained beyond the contract limit and that a
condition of revolt again existed among the laborers. A board of naval
officers reported, among other things, as follows: We would desire to state
further that the discipline maintained on the island seems to be that of a
convict establishment without its comforts and cleanliness, and that until
more attention is paid to the shipping of laborers by placing it under
Government supervision to prevent misunderstanding and misrepresentation,
and until some amelioration is shown in the treatment of the laborers,
these disorders will be of constant occurrence. I recommend legislation
that shall place labor contracts upon this and other islands having the
relation that Navassa has to the United States under the supervision of a
court commissioner, and that shall provide at the expense of the owners an
officer to reside upon the island, with power to judge and adjust disputes
and to enforce a just and humane treatment of the employees. It is
inexcusable that American laborers should be left within our own
jurisdiction without access to any Government officer or tribunal for their
protection and the redress of their wrongs.

International copyright has been secured, in accordance with the conditions
of the act of March 3, 1891, with Belgium, France, Great Britain and the
British possessions, and Switzerland, the laws of those countries
permitting to our citizens the benefit of copyright on substantially the
same basis as to their own citizens or subjects.

With Germany a special convention has been negotiated upon this subject
which will bring that country within the reciprocal benefits of our
legislation.

The general interest in the operations of the Treasury Department has been
much augmented during the last year by reason of the conflicting
predictions, which accompanied and followed the tariff and other
legislation of the last Congress affecting the revenues, as to the results
of this legislation upon the Treasury and upon the country. On the one hand
it was contended that imports would so fall off as to leave the Treasury
bankrupt and that the prices of articles entering into the living of the
people would be so enhanced as to disastrously affect their comfort and
happiness, while on the other it was argued that the loss to the revenue,
largely the result of placing sugar on the free list, would be a direct
gain to the people; that the prices of the necessaries of life, including
those most highly protected, would not be enhanced; that labor would have a
larger market and the products of the farm advanced prices, while the
Treasury surplus and receipts would be adequate to meet the appropriations,
including the large exceptional expenditures for the refunding to the
States of the direct tax and the redemption of the 4 1/2 per cent bonds.

It is not my purpose to enter at any length into a discussion of the
effects of the legislation to which I have referred; but a brief
examination of the statistics of the Treasury and a general glance at the
state of business throughout the country will, I think, satisfy any
impartial inquirer that its results have disappointed the evil prophecies
of its opponents and in a large measure realized the hopeful predictions of
its friends. Rarely, if ever before, in the history of the country has
there been a time when the proceeds of one day's labor or the product of
one farmed acre would purchase so large an amount of those things that
enter into the living of the masses of the people. I believe that a full
test will develop the fact that the tariff act of the Fifty-first Congress
is very favorable in its average effect upon the prices of articles
entering into common use.

During the twelve months from October 1, 1890, to September 30, 1891, the
total value of our foreign commerce (imports and exports combined) was
$1,747,806,406, which was the largest of any year in the history of the
United States. The largest in any previous year was in 1890, when our
commerce amounted to $1,647,139,093, and the last year exceeds this
enormous aggregate by over one hundred millions. It is interesting, and to
some will be surprising, to know that during the year ending September 30,
1891, our imports of merchandise amounted to $824,715,270, which was an
increase of more than $11,000,000 over the value of the imports of the
corresponding months of the preceding year, when the imports of merchandise
were unusually large in anticipation of the tariff legislation then
pending. The average annual value of the imports of merchandise for the ten
years from 1881 to 1890 was $692,186,522, and during the year ending
September 30, 1891, this annual average was exceeded by $132,528,469.

The value of free imports during the twelve months ending September 30,
1891, was $118,092,387 more than the value of free imports during the
corresponding twelve months of the preceding year, and there was during the
same period a decrease of $106,846,508 in the value of imports of dutiable
merchandise. The percentage of merchandise admitted free of duty during the
year to which I have referred, the first under the new tariff, was 48.18,
while during the preceding twelve months, under the old tariff, the
percentage was 34.27, an increase of 13.91 per cent. If we take the six
months ending September 30 last, which covers the time during which sugars
have been admitted free of duty, the per cent of value of merchandise
imported free of duty is found to be 55.37, which is a larger percentage of
free imports than during any prior fiscal year in the history of the
Government.

If we turn to exports of merchandise, the statistics are full of
gratification. The value of such exports of merchandise for the twelve
months ending September 30, 1891, was $923,091,136, while for the
corresponding previous twelve months it was $860,177,115, an increase of
$62,914,021, which is nearly three times the average annual increase of
exports of merchandise for the preceding twenty years. This exceeds in
amount and value the exports of merchandise during any year in the history
of the Government. The increase in the value of exports of agricultural
products during the year referred to over the corresponding twelve months
of the prior year was $45,846,197, while the increase in the value of
exports of manufactured products was $16,838,240.

There is certainly nothing in the condition of trade, foreign or domestic,
there is certainly nothing in the condition of our people of any class, to
suggest that the existing tariff and revenue legislation bears oppressively
upon the people or retards the commercial development of the nation. It may
be argued that our condition would be better if tariff legislation were
upon a free-trade basis; but it can not be denied that all the conditions
of prosperity and of general contentment are present in a larger degree
than ever before in our history, and that, too, just when it was prophesied
they would be in the worst state. Agitation for radical changes in tariff
and financial legislation can not help but may seriously impede business,
to the prosperity of which some degree of stability in legislation is
essential.

I think there are conclusive evidences that the new tariff has created
several great industries, which will within a few years give employment to
several hundred thousand American working men and women. In view of the
somewhat overcrowded condition of the labor market of the United States,
every patriotic citizen should rejoice at such a result.

The report of the Secretary of the Treasury shows that the total receipts
of the Government from all sources for the fiscal year ending June 30,
1891, were $458,544,233.03, while the expenditures for the same period were
$421,304,470.46, leaving a surplus of $37,239,762.57.

The receipts of the fiscal year ending June 30, 1892, actual and estimated,
are $433,000,000 and the expenditures $409,000,000. For the fiscal year
ending June 30, 1893, the estimated receipts are $455,336,350 and the
expenditures $441,300,093.

Under the law of July 14, 1890, the Secretary of the Treasury has purchased
(since August 13) during the fiscal year 48,393,113 ounces of silver
bullion at an average cost of $1.045 per ounce. The highest price paid
during the year was $1.2025 and the lowest $0.9636. In exchange for this
silver bullion there have been issued $50,577,498 of the Treasury notes
authorized by the act. The lowest price of silver reached during the fiscal
year was $0.9636 on April 22, 1891; but on November 1 the market price was
only $0.96, which would give to the silver dollar a bullion value of 74 1/4
cents.

Before the influence of the prospective silver legislation was felt in the
market silver was worth in New York about $0.955 per ounce. The ablest
advocates of free coinage in the last Congress were most confident in their
predictions that the purchases by the Government required by the law would
at once bring the price of silver to $1.2929 per ounce, which would make
the bullion value of a dollar 100 cents and hold it there. The prophecies
of the antisilver men of disasters to result from the coinage of $2,000,000
per month were not wider of the mark. The friends of free silver are not
agreed, I think, as to the causes that brought their hopeful predictions to
naught. Some facts are known. The exports of silver from London to India
during the first nine months of this calendar year fell off over 50 per
cent, or $17,202,730, compared with the same months of the preceding year.
The exports of domestic silver bullion from this country, which had
averaged for the last ten years over $17,000,000, fell in the last fiscal
year to $13,797,391, while for the first time in recent years the imports
of silver into this country exceeded the exports by the sum of $2,745,365.
In the previous year the net exports of silver from the United States
amounted to $8,545,455. The production of the United States increased from
50,000,000 ounces in 1889 to 54,500,000 in 1890. The Government is now
buying and putting aside annually 54,000,000 ounces, which, allowing for
7,140,000 ounces of new bullion used in the arts, is 6,640,000 more than
our domestic products available for coinage.

I hope the depression in the price of silver is temporary and that a
further trial of this legislation will more favorably affect it. That the
increased volume of currency thus supplied for the use of the people was
needed and that beneficial results upon trade and prices have followed this
legislation I think must be very clear to everyone. Nor should it be
forgotten that for every dollar of these notes issued a full dollar's worth
of silver bullion is at the time deposited in the Treasury as a security
for its redemption. Upon this subject, as upon the tariff, my
recommendation is that the existing laws be given a full trial and that our
business interests be spared the distressing influence which threats of
radical changes always impart. Under existing legislation it is in the
power of the Treasury Department to maintain that essential condition of
national finance as well as of commercial prosperity--the parity in use of
the coined dollars and their paper representatives. The assurance that
these powers would be freely and unhesitatingly used has done much to
produce and sustain the present favorable business conditions.

I am still of the opinion that the free coinage of silver under existing
conditions would disastrously affect our business interests at home and
abroad. We could not hope to maintain an equality in the purchasing power
of the gold and silver dollar in our own markets, and in foreign trade the
stamp gives no added value to the bullion contained in coins. The producers
of the country, its farmers and laborers, have the highest interest that
every dollar, paper or coin, issued by the Government shall be as good as
any other. If there is one less valuable than another, its sure and
constant errand will be to pay them for their toil and for their crops. The
money lender will protect himself by stipulating for payment in gold, but
the laborer has never been able to do that. To place business upon a silver
basis would mean a sudden and severe contraction of the currency by the
withdrawal of gold and gold notes and such an unsettling of all values as
would produce a commercial panic. I can not believe that a people so strong
and prosperous as ours will promote such a policy.

The producers of silver are entitled to just consideration, but they should
not forget that the Government is now buying and putting out of the market
what is the equivalent of the entire product of our silver mines. This is
more than they themselves thought of asking two years ago. I believe it is
the earnest desire of a great majority of the people, as it is mine, that a
full coin use shall be made of silver just as soon as the cooperation of
other nations can be secured and a ratio fixed that will give circulation
equally to gold and silver. The business of the world requires the use of
both metals; but I do not see any prospect of gain, but much of loss, by
giving up the present system, in which a full use is made of gold and a
large use of silver, for one in which silver alone will circulate. Such an
event would be at once fatal to the further progress of the silver
movement. Bimetallism is the desired end, and the true friends of silver
will be careful not to overrun the goal and bring in silver monometallism
with its necessary attendants--the loss of our gold to Europe and the
relief of the pressure there for a larger currency. I have endeavored by
the use of official and unofficial agencies to keep a close observation of
the state of public sentiment in Europe upon this question and have not
found it to be such as to justify me in proposing an international
conference. There is, however, I am sure, a growing sentiment in Europe in
favor of a larger use of silver, and I know of no more effectual way of
promoting this sentiment than by accumulating gold here. A scarcity of gold
in the European reserves will be the most persuasive argument for the use
of silver.

The exports of gold to Europe, which began in February last and continued
until the close of July, aggregated over $70,000,000. The net loss of gold
during the fiscal year was nearly $68,000,000. That no serious monetary
disturbance resulted was most gratifying and gave to Europe fresh evidence
of the strength and stability of our financial institutions. With the
movement of crops the outflow of gold was speedily stopped and a return set
in. Up to December 1 we had recovered of our gold lost at the port of New
York $27,854,000, and it is confidently believed that during the winter and
spring this aggregate will be steadily and largely increased.

The presence of a large cash surplus in the Treasury has for many years
been the subject of much unfavorable criticism, and has furnished an
argument to those who have desired to place the tariff upon a purely
revenue basis. It was agreed by all that the withdrawal from circulation of
so large an amount of money was an embarrassment to the business of the
country and made necessary the intervention of the Department at frequent
intervals to relieve threatened monetary panics. The surplus on March 1,
1889, was $183,827,190.29. The policy of applying this surplus to the
redemption of the interest-bearing securities of the United States was
thought to be preferable to that of depositing it without interest in
selected national banks. There have been redeemed since the date last
mentioned of interest-bearing securities $259,079,350, resulting in a
reduction of the annual interest charge of $11,684,675. The money which had
been deposited in banks without interest has been gradually withdrawn and
used in the redemption of bonds.

The result of this policy, of the silver legislation, and of the refunding
of the 4 1/2 per cent bonds has been a large increase of the money in
circulation. At the date last named the circulation was $1,404,205,896, or
$23.03 per capita, while on the 1st day of December, 1891, it had increased
to $1,577,262,070, or $24.38 per capita. The offer of the Secretary of the
Treasury to the holders of the 4 1/2 per cent bonds to extend the time of
redemption, at the option of the Government, at an interest of 2 per cent,
was accepted by the holders of about one-half the amount, and the
unextended bonds are being redeemed on presentation.

The report of the Secretary of War exhibits the results of an intelligent,
progressive, and businesslike administration of a Department which has been
too much regarded as one of mere routine. The separation of Secretary
Proctor from the Department by reason of his appointment as a Senator from
the State of Vermont is a source of great regret to me and to his
colleagues in the Cabinet, as I am sure it will be to all those who have
had business with the Department while under his charge.

In the administration of army affairs some especially good work has been
accomplished. The efforts of the Secretary to reduce the percentage of
desertions by removing the causes that promoted it have been so successful
as to enable him to report for the last year a lower percentage of
desertion than has been before reached in the history of the Army. The
resulting money saving is considerable, but the improvement in the morale
of the enlisted men is the most valuable incident of the reforms which have
brought about this result.

The work of securing sites for shore batteries for harbor defense and the
manufacture of mortars and guns of high power to equip them have made good
progress during the year. The preliminary work of tests and plans which so
long delayed a start is now out of the way. Some guns have been completed,
and with an enlarged shop and a more complete equipment at Watervliet the
Army will soon be abreast of the Navy in gun construction. Whatever
unavoidable causes of delay may arise, there should be none from delayed or
insufficient appropriations. We shall be greatly embarrassed in the proper
distribution and use of naval vessels until adequate shore defenses are
provided for our harbors.

I concur in the recommendation of the Secretary that the three-battalion
organization be adopted for the infantry. The adoption of a smokeless
powder and of a modern rifle equal in range, precision, and rapidity of
fire to the best now in use will, I hope, not be longer delayed.

The project of enlisting Indians and organizing them into separate
companies upon the same basis as other soldiers was made the subject of
very careful study by the Secretary and received my approval. Seven
companies have been completely organized and seven more are in process of
organization. The results of six months' training have more than realized
the highest anticipations. The men are readily brought under discipline,
acquire the drill with facility, and show great pride in the right
discharge of their duty and perfect loyalty to their officers, who declare
that they would take them into action with confidence. The discipline,
order, and cleanliness of the military posts will have a wholesome and
elevating influence upon the men enlisted, and through them upon their
tribes, while a friendly feeling for the whites and a greater respect for
the Government will certainly be promoted.

The great work done in the Record and Pension Division of the War
Department by Major Ainsworth, of the Medical Corps, and the clerks under
him is entitled to honorable mention. Taking up the work with nearly 41,000
cases behind, he closed the last fiscal year without a single case left
over, though the new cases had increased 52 per cent in number over the
previous year by reason of the pension legislation of the last Congress.

I concur in the recommendation of the Attorney-General that the right in
felony cases to a review by the Supreme court be limited. It would seem
that personal liberty would have a safe guaranty if the right of review in
cases involving only fine and imprisonment were limited to the circuit
court of appeals, unless a constitutional question should in some way be
involved.

The judges of the Court of Private Land Claims, provided for by the act of
March 3, 1891, have been appointed and the court organized. It is now
possible to give early relief to communities long repressed in their
development by unsettled land titles and to establish the possession and
right of settlers whose lands have been rendered valueless by adverse and
unfounded claims.

The act of July 9, 1888, provided for the incorporation and management of a
reform school for girls in the District of Columbia; but it has remained
inoperative for the reason that no appropriation has been made for
construction or maintenance. The need of such an institution is very
urgent. Many girls could be saved from depraved lives by the wholesome
influences and restraints of such a school. I recommend that the necessary
appropriation be made for a site and for construction.

The enforcement by the Treasury Department of the law prohibiting the
coming of Chinese to the United States has been effective as to such as
seek to land from vessels entering our ports. The result has been to divert
the travel to vessels entering the ports of British Columbia, whence
passage into the United States at obscure points along the Dominion
boundary is easy. A very considerable number of Chinese laborers have
during the past year entered the United States from Canada and Mexico.

The officers of the Treasury Department and of the Department of Justice
have used every means at their command to intercept this immigration; but
the impossibility of perfectly guarding our extended frontier is apparent.
The Dominion government collects a head tax of $50 from every Chinaman
entering Canada, and thus derives a considerable revenue from those who
only use its ports to reach a position of advantage to evade our exclusion
laws. There seems to be satisfactory evidence that the business of passing
Chinamen through Canada to the United States is organized and quite active.
The Department of Justice has construed the laws to require the return of
any Chinaman found to be unlawfully in this country to China as the country
from which he came, notwithstanding the fact that he came by way of Canada;
but several of the district courts have in cases brought before them
overruled this view of the law and decided that such persons must be
returned to Canada. This construction robs the law of all effectiveness,
even if the decrees could be executed, for the men returned can the next
day recross our border. But the only appropriation made is for sending them
back to China, and the Canadian officials refuse to allow them to reenter
Canada without the payment of the fifty-dollar head tax. I recommend such
legislation as will remedy these defects in the law.

In previous messages I have called the attention of Congress to the
necessity of so extending the jurisdiction of the United States courts as
to make triable therein any felony committed while in the act of violating
a law of the United States. These courts can not have that independence and
effectiveness which the Constitution contemplates so long as the felonious
killing of court officers, jurors, and witnesses in the discharge of their
duties or by reason of their acts as such is only cognizable in the State
courts. The work done by the Attorney-General and the officers of his
Department, even under the present inadequate legislation, has produced
some notable results in the interest of law and order.

The Attorney-General and also the Commissioners of the District of Columbia
call attention to the defectiveness and inadequacy of the laws relating to
crimes against chastity in the District of Columbia. A stringent code upon
this subject has been provided by Congress for Utah, and it is a matter of
surprise that the needs of this District should have been so long
overlooked.

In the report of the Postmaster-General some very gratifying results are
exhibited and many betterments of the service suggested. A perusal of the
report gives abundant evidence that the supervision and direction of the
postal system have been characterized by an intelligent and conscientious
desire to improve the service. The revenues of the Department show an
increase of over $5,000,000, with a deficiency for the year 1892 of less
than $4,000,000, while the estimate for the year 1893 shows a surplus of
receipts over expenditures.

Ocean mail post-offices have been established upon the steamers of the
North German Lloyd and Hamburg lines, saving by the distribution on
shipboard from two to fourteen hours' time in the delivery of mail at the
port of entry and often much more than this in the delivery at interior
places. So thoroughly has this system, initiated by Germany and the United
States, evidenced its usefulness that it can not be long before it is
installed upon all the great ocean mail-carrying steamships.

Eight thousand miles of new postal service has been established upon
railroads, the car distribution to substations in the great cities has been
increased about 12 per cent, while the percentage of errors in distribution
has during the past year been reduced over one-half. An appropriation was
given by the last Congress for the purpose of making some experiments in
free delivery in the smaller cities and towns. The results of these
experiments have been so satisfactory that the Postmaster-General
recommends, and I concur in the recommendation, that the free-delivery
system be at once extended to towns of 5,000 population. His discussion of
the inadequate facilities extended under our present system to rural
communities and his suggestions with a view to give these communities a
fuller participation in the benefits of the postal service are worthy of
your careful consideration. It is not just that the farmer, who receives
his mail at a neighboring town, should not only be compelled to send to the
post-office for it, but to pay a considerable rent for a box in which to
place it or to wait his turn at a general-delivery window, while the city
resident has his mail brought to his door. It is stated that over 54,000
neighborhoods are under the present system receiving mail at post-offices
where money orders and postal notes are not issued. The extension of this
system to these communities is especially desirable, as the patrons of such
offices are not possessed of the other facilities offered in more populous
communities for the transmission of small sums of money.

I have in a message to the preceding Congress expressed my views as to a
modified use of the telegraph in connection with the postal service. In
pursuance of the ocean mail law of March 3, 1891, and after a most careful
study of the whole subject and frequent conferences with ship-owners,
boards of trade, and others, advertisements were issued by the
postmaster-General for 53 lines of ocean mail service--10 to Great Britain
and the Continent, 27 to South America, 3 to China and Japan, 4 to
Australia and the Pacific islands, 7 to the West Indies, and 2 to Mexico.
It was not, of course, expected that bids for all these lines would be
received or that service upon them all would be contracted for. It was
intended, in furtherance of the act, to secure as many new lines as
possible, while including in the list most or all of the foreign lines now
occupied by American ships. It was hoped that a line to England and perhaps
one to the Continent would be secured; but the outlay required to equip
such lines wholly with new ships of the first class and the difficulty of
establishing new lines in competition with those already established
deterred bidders whose interest had been enlisted. It is hoped that a way
may yet be found of overcoming these difficulties.

The Brazil Steamship Company, by reason of a miscalculation as to the speed
of its vessels, was not able to bid under the terms of the advertisement.
The policy of the Department was to secure from the established lines an
improved service as a condition of giving to them the benefits of the law.
This in all instances has been attained. The Postmaster-General estimates
that an expenditure in American shipyards of about $10,000,000 will be
necessary to enable the bidders to construct the ships called for by the
service which they have accepted. I do not think there is any reason for
discouragement or for any turning back from the policy of this legislation.
Indeed, a good beginning has been made, and as the subject is further
considered and understood by capitalists and shipping people new lines will
be ready to meet future proposals, and we may date from the passage of this
law the revival of American shipping interests and the recovery of a fair
share of the carrying trade of the world. We were receiving for foreign
postage nearly $2,000,000 under the old system, and the outlay for ocean
mail service did not exceed $600,000 per annum. It is estimated by the
Postmaster-General that if all the contracts proposed are completed it will
require $247,354 for this year in addition to the appropriation for sea and
inland postage already in the estimates, and that for the next fiscal year,
ending June 30, 1893, there would probably be needed about $560,000.

The report of the Secretary of the Navy shows a gratifying increase of new
naval vessels in commission. The Newark, Concord, Bennington, and
Miantonomoh have been added during the year, with an aggregate of something
more than 11,000 tons. Twenty-four warships of all classes are now under
construction in the navy-yards and private shops; but while the work upon
them is going forward satisfactorily, the completion of the more important
vessels will yet require about a year's time. Some of the vessels now
under construction, it is believed, will be triumphs of naval engineering.
When it is recollected that the work of building a modern navy was only
initiated in the year 1883, that our naval constructors and shipbuilders
were practically without experience in the construction of large iron or
steel ships, that our engine shops were unfamiliar with great marine
engines, and that the manufacture of steel forgings for guns and plates was
almost wholly a foreign industry, the progress that has been made is not
only highly satisfactory, but furnishes the assurance that the United
States will before long attain in the construction of such vessels, with
their engines and armaments, the same preeminence which it attained when
the best instrument of ocean commerce was the clipper ship and the most
impressive exhibit of naval power the old wooden three-decker man-of-war.
The officers of the Navy and the proprietors and engineers of our great
private shops have responded with wonderful intelligence and professional
zeal to the confidence expressed by Congress in its liberal legislation. We
have now at Washington a gun shop, organized and conducted by naval
officers, that in its system, economy, and product is unexcelled.
Experiments with armor plate have been conducted during the year with most
important results. It is now believed that a plate of higher resisting
power than any in use has been found and that the tests have demonstrated
that cheaper methods of manufacture than those heretofore thought necessary
can be used.

I commend to your favorable consideration the recommendations of the
Secretary, who has, I am sure, given to them the most conscientious study.
There should be no hesitation in promptly completing a navy of the best
modern type large enough to enable this country to display its flag in all
seas for the protection of its citizens and of its extending commerce. The
world needs no assurance of the peaceful purposes of the United States, but
we shall probably be in the future more largely a competitor in the
commerce of the world, and it is essential to the dignity of this nation
and to that peaceful influence which it should exercise on this hemisphere
that its Navy should be adequate both upon the shores of the Atlantic and
of the Pacific.

The report of the Secretary of the Interior shows that a very gratifying
progress has been made in all of the bureaus which make up that complex and
difficult Department.

The work in the Bureau of Indian Affairs was perhaps never so large as now,
by reason of the numerous negotiations which have been proceeding with the
tribes for a reduction of the reservations, with the incident labor of
making allotments, and was never more carefully conducted. The provision of
adequate school facilities for Indian children and the locating of adult
Indians upon farms involve the solution of the "Indian question."
Everything else--rations, annuities, and tribal negotiations, with the
agents, inspectors, and commissioners who distribute and conduct them--must
pass away when the Indian has become a citizen, secure in the individual
ownership of a farm from which he derives his subsistence by his own labor,
protected by and subordinate to the laws which govern the white man, and
provided by the General Government or by the local communities in which he
lives with the means of educating his children. When an Indian becomes a
citizen in an organized State or Territory, his relation to the General
Government ceases in great measure to be that of a ward; but the General
Government ought not at once to put upon the State or Territory the burden
of the education of his children.

It has been my thought that the Government schools and school buildings
upon the reservations would be absorbed by the school systems of the States
and Territories; but as it has been found necessary to protect the Indian
against the compulsory alienation of his land by exempting him from
taxation for a period of twenty-five years, it would seem to be right that
the General Government, certainly where there are tribal funds in its
possession, should pay to the school fund of the State what would be
equivalent to the local school tax upon the property of the Indian. It will
be noticed from the report of the Commissioner of Indian Affairs that
already some contracts have been made with district schools for the
education of Indian children. There is great advantage, I think, in
bringing the Indian children into mixed schools. This process will be
gradual, and in the meantime the present educational provisions and
arrangements, the result of the best experience of those who have been
charged with this work, should be continued. This will enable those
religious bodies that have undertaken the work of Indian education with so
much zeal and with results so restraining and beneficent to place their
institutions in new and useful relations to the Indian and to his white
neighbors.

The outbreak among the Sioux which occurred in December last is as to its
causes and incidents fully reported upon by the War Department and the
Department of the Interior. That these Indians had some just complaints,
especially in the matter of the reduction of the appropriation for rations
and in the delays attending the enactment of laws to enable the Department
to perform the engagements entered into with them, is probably true; but
the Sioux tribes are naturally warlike and turbulent, and their warriors
were excited by their medicine men and chiefs, who preached the coming of
an Indian messiah who was to give them power to destroy their enemies. In
view of the alarm that prevailed among the white settlers near the
reservation and of the fatal consequences that would have resulted from an
Indian incursion, I placed at the disposal of General Miles, commanding the
Division of the Missouri, all such forces as were thought by him to be
required. He is entitled to the credit of having given thorough protection
to the settlers and of bringing the hostiles into subjection with the least
possible loss of life.

The appropriation of $2,991,450 for the Choctaws and Chickasaws contained
in the general Indian appropriation bill of March 3, 1891, has not been
expended, for the reason that I have not yet approved a release (to the
Government) of the Indian claim to the lands mentioned. This matter will be
made the subject of a special message, placing before Congress all the
facts which have come to my knowledge.

The relation of the Five Civilized Tribes now occupying the Indian
Territory to the United States is not, I believe, that best calculated to
promote the highest advancement of these Indians. That there should be
within our borders five independent states having no relations, except
those growing out of treaties, with the Government of the United States, no
representation in the National Legislature, its people not citizens, is a
startling anomaly.

It seems to me to be inevitable that there shall be before long some
organic changes in the relation of these people to the United States. What
form these changes should take I do not think it desirable now to suggest,
even if they were well defined in my own mind. They should certainly
involve the acceptance of citizenship by the Indians and a representation
in Congress. These Indians should have opportunity to present their claims
and grievances upon the floor rather than, as now, in the lobby. If a
commission could be appointed to visit these tribes to confer with them in
a friendly spirit upon this whole subject, even if no agreement were
presently reached the feeling of the tribes upon this question would be
developed, and discussion would prepare the way for changes which must come
sooner or later.

The good work of reducing the larger Indian reservations by allotments in
severalty to the Indians and the cession of the remaining lands to the
United States for disposition under the homestead law has been prosecuted
during the year with energy and success. In September last I was enabled to
open to settlement in the Territory of Oklahoma 900,000 acres of land, all
of which was taken up by settlers in a single day. The rush for these lands
was accompanied by a great deal of excitement, but was happily free from
incidents of violence.

It was a source of great regret that I was not able to open at the same
time the surplus lands of the Cheyenne and Arapahoe Reservation, amounting
to about 3,000,000 acres, by reason of the insufficiency of the
appropriation for making the allotments. Deserving and impatient settlers
are waiting to occupy these lands, and I urgently recommend that a special
deficiency appropriation be promptly made of the small amount needed, so
that the allotments may be completed and the surplus lands opened in time
to permit the settlers to get upon their homesteads in the early spring.

During the past summer the Cherokee Commission have completed arrangements
with the Wichita, Kickapoo, and Tonkawa tribes whereby, if the agreements
are ratified by Congress, over 800,000 additional acres will be opened to
settlement in Oklahoma.

The negotiations for the release by the Cherokees of their claim to the
Cherokee Strip have made no substantial progress so far as the Department
is officially advised, but it is still hoped that the cession of this large
and valuable tract may be secured. The price which the commission was
authorized to offer--$1.25 per acre--is, in my judgment, when all the
circumstances as to title and the character of the lands are considered, a
fair and adequate one, and should have been accepted by the Indians.

Since March 4, 1889, about 23,000,000 acres have been separated from Indian
reservations and added to the public domain for the use of those who
desired to secure free homes under our beneficent laws. It is difficult to
estimate the increase of wealth which will result from the conversion of
these waste lands into farms, but it is more difficult to estimate the
betterment which will result to the families that have found renewed hope
and courage in the ownership of a home and the assurance of a comfortable
subsistence under free and healthful conditions. It is also gratifying to
be able to feel, as we may, that this work has proceeded upon lines of
justice toward the Indian, and that he may now, if he will, secure to
himself the good influences of a settled habitation, the fruits of
industry, and the security of citizenship.

Early in this Administration a special effort was begun to bring up the
work of the General Land Office. By faithful work the arrearages have been
rapidly reduced. At the end of the last fiscal year only 84,172 final
agricultural entries remained undisposed of, and the Commissioner reports
that with the present force the work can be fully brought up by the end of
the next fiscal year.

Your attention is called to the difficulty presented by the Secretary of
the Interior as to the administration of the law of March 3, 1891,
establishing a Court of Private Land Claims. The small holdings intended to
be protected by the law are estimated to be more than 15,000 in number. The
claimants are a most deserving class and their titles are supported by the
strongest equities. The difficulty grows out of the fact that the lands
have largely been surveyed according to our methods, while the holdings,
many of which have been in the same family for generations, are laid out in
narrow strips a few rods wide upon a stream and running back to the hills
for pasturage and timber.. Provision should be made for numbering these
tracts as lots and for patenting them by such numbers and without reference
to section lines.

The administration of the Pension Bureau has been characterized during the
year by great diligence. The total number of pensioners upon the roll on
the 30th day of June, 1891, was 676,160. There were allowed during the
fiscal year ending at that time 250,565 cases. Of this number 102,387 were
allowed under the law of June 27, 1890. The issuing of certificates has
been proceeding at the rate of about 30,000 per month, about 75 per cent of
these being cases under the new law. The Commissioner expresses the opinion
that he will be able to carefully adjudicate and allow 350,000 claims
during the present fiscal year. The appropriation for the payment of
pensions for the fiscal year 1890-91 was $127,685,793.89 and the amount
expended $118,530,649.25, leaving an unexpended surplus of $9,155,144.64.

The Commissioner is quite confident that there will be no call this year
for a deficiency appropriation, notwithstanding the rapidity with which the
work is being pushed. The mistake which has been made by many in their
exaggerated estimates of the cost of pensions is in not taking account of
the diminished value of first payments under the recent legislation. These
payments under the general law have been for many years very large, as the
pensions when allowed dated from the time of filing the claim, and most of
these claims had been pending for years. The first payments under the law
of June, 1890, are relatively small, and as the per cent of these cases
increases and that of the old cases diminishes the annual aggregate of
first payments is largely reduced. The Commissioner, under date of November
13, furnishes me with the statement that during the last four months
113,175 certificates were issued, 27,893 under the general law and 85,282
under the act of June 27, 1890. The average first payment during these four
months was $131.85, while the average first payment upon cases allowed
during the year ending June 30, 1891, was $239.33, being a reduction in the
average first payments during these four months of $107.48.

The estimate for pension expenditures for the fiscal year ending June 30,
1893, is $144,956,000, which, after a careful examination of the subject,
the Commissioner is of the opinion will be sufficient. While these
disbursements to the disabled soldiers of the great Civil War are large,
they do not realize the exaggerated estimates of those who oppose this
beneficent legislation. The Secretary of the Interior shows with great
fullness the care that is taken to exclude fraudulent claims, and also the
gratifying fact that the persons to whom these pensions are going are men
who rendered not slight but substantial war service.

The report of the Commissioner of Railroads shows that the total debt of
the subsidized railroads to the United States was on December 31, 1890,
$112,512,613.06. A large part of this debt is now fast approaching
maturity, with no adequate provision for its payment. Some policy for
dealing with this debt with a view to its ultimate collection should be at
once adopted. It is very difficult, well-nigh impossible, for so large a
body as the Congress to conduct the necessary negotiations and
investigations. I therefore recommend that provision be made for the
appointment of a commission to agree upon and report a plan for dealing
with this debt.

The work of the Census Bureau is now far in advance and the great bulk of
the enormous labor involved completed. It will be more strictly a
statistical exhibit and less encumbered by essays than its immediate
predecessors. The methods pursued have been fair, careful, and intelligent,
and have secured the approval of the statisticians who have followed them
with a scientific and nonpartisan interest. The appropriations necessary to
the early completion and publication of the authorized volumes should be
given in time to secure against delays, which increase the cost and at the
same time diminish the value of the work.

The report of the Secretary exhibits with interesting fullness the
condition of the Territories. They have shared with the States the great
increase in farm products, and are bringing yearly large areas into
cultivation by extending their irrigating canals. This work is being done
by individuals or local corporations and without that system which a full
preliminary survey of the water supply and of the irrigable lands would
enable them to adopt. The future of the Territories of New Mexico, Arizona,
and Utah in their material growth and in the increase, independence, and
happiness of their people is very largely dependent upon wise and timely
legislation, either by Congress or their own legislatures, regulating the
distribution of the water supply furnished by their streams. If this matter
is much longer neglected, private corporations will have unrestricted
control of one of the elements of life and the patentees of the arid lands
will be tenants at will of the water companies.

The United States should part with its ownership of the water sources and
the sites for reservoirs, whether to the States and Territories or to
individuals or corporations, only upon conditions that will insure to the
settlers their proper water supply upon equal and reasonable terms. In the
Territories this whole subject is under the full control of Congress, and
in the States it is practically so as long as the Government holds the
title to the reservoir sites and water sources and can grant them upon such
conditions as it chooses to impose. The improvident granting of franchises
of enormous value without recompense to the State or municipality from
which they proceed and without proper protection of the public interests is
the most noticeable and flagrant evil of modern legislation. This fault
should not be committed in dealing with a subject that will before many
years affect so vitally thousands of our people.

The legislation of Congress for the repression of polygamy has, after years
of resistance on the part of the Mormons, at last brought them to the
conclusion that resistance is unprofitable and unavailing. The power of
Congress over this subject should not be surrendered until we have
satisfactory evidence that the people of the State to be created would
exercise the exclusive power of the State over this subject in the same
way. The question is not whether these people now obey the laws of Congress
against polygamy, but rather would they make, enforce, and maintain such
laws themselves if absolutely free to regulate the subject? We can not
afford to experiment with this subject, for when a State is once
constituted the act is final and any mistake irretrievable. No compact in
the enabling act could, in my opinion, be binding or effective.

I recommend that provision be made for the organization of a simple form of
town government in Alaska, with power to regulate such matters as are
usually in the States under municipal control. These local civil
organizations will give better protection in some matters than the present
skeleton Territorial organization. Proper restrictions as to the power to
levy taxes and to create debt should be imposed.

If the establishment of the Department of Agriculture was regarded by
anyone as a mere concession to the unenlightened demand of a worthy class
of people, that impression has been most effectually removed by the great
results already attained. Its home influence has been very great in
disseminating agricultural and horticultural information, in stimulating
and directing a further diversification of crops, in detecting and
eradicating diseases of domestic animals, and, more than all, in the close
and informal contact which it has established and maintains with the
farmers and stock raisers of the whole country. Every request for
information has had prompt attention and every suggestion merited
consideration. The scientific corps of the Department is of a high order
and is pushing its investigations with method and enthusiasm.

The inspection by this Department of cattle and pork products intended for
shipment abroad has been the basis of the success which has attended our
efforts to secure the removal of the restrictions maintained by the
European Governments.

For ten years protests and petitions upon this subject from the packers and
stock raisers of the United States have been directed against these
restrictions, which so seriously limited our markets and curtailed the
profits of the farm. It is a source of general congratulation that success
has at last been attained, for the effects of an enlarged foreign market
for these meats will be felt not only by the farmer, but in our public
finances and in every branch of trade. It is particularly fortunate that
the increased demand for food products resulting from the removal of the
restrictions upon our meats and from the reciprocal trade arrangements to
which I have referred should have come at a time when the agricultural
surplus is so large. Without the help thus derived lower prices would have
prevailed. The Secretary of Agriculture estimates that the restrictions
upon the importation of our pork products into Europe lost us a market for
$20,000,000 worth of these products annually.

The grain crop of this year was the largest in our history--50 per cent
greater than that of last year--and yet the new markets that have been
opened and the larger demand resulting from short crops in Europe have
sustained prices to such an extent that the enormous surplus of meats and
breadstuffs will be marketed at good prices, bringing relief and prosperity
to an industry that was much depressed. The value of the grain crop of the
United States is estimated by the Secretary to be this year $500,000,000
more than last; of meats $150,000,000 more, and of all products of the farm
$700,000,000 more. It is not inappropriate, I think, here to suggest that
our satisfaction in the contemplation of this marvelous addition to the
national wealth is unclouded by any suspicion of the currency by which it
is measured and in which the farmer is paid for the products of his
fields.

The report of the Civil Service Commission should receive the careful
attention of the opponents as well as the friends of this reform. The
Commission invites a personal inspection by Senators and Representatives of
its records and methods, and every fair critic will feel that such an
examination should precede a judgment of condemnation either of the system
or its administration. It is not claimed that either is perfect, but I
believe that the law is being executed with impartiality and that the
system is incomparably better and fairer than that of appointments upon
favor. I have during the year extended the classified service to include
superintendents, teachers, matrons, and physicians in the Indian service.
This branch of the service is largely related to educational and
philanthropic work and will obviously be the better for the change.

The heads of the several Executive Departments have been directed to
establish at once an efficiency record as the basis of a comparative rating
of the clerks within the classified service, with a view to placing
promotions therein upon the basis of merit. I am confident that such a
record, fairly kept and open to the inspection of those interested, will
powerfully stimulate the work of the Departments and will be accepted by
all as placing the troublesome matter of promotions upon a just basis.

I recommend that the appropriation for the Civil Service Commission be made
adequate to the increased work of the next fiscal year.

I have twice before urgently called the attention of Congress to the
necessity of legislation for the protection of the lives of railroad
employees, but nothing has yet been done. During the year ending June 30,
1890, 369 brakemen were killed and 7,841 maimed while engaged in coupling
cars. The total number of railroad employees killed during the year was
2,451 and the number injured 22,390. This is a cruel and largely needless
sacrifice. The Government is spending nearly $1,000,000 annually to save
the lives of shipwrecked seamen; every steam vessel is rigidly inspected
and required to adopt the most approved safety appliances. All this is
good. But how shall we excuse the lack of interest and effort in behalf of
this army of brave young men who in our land commerce are being sacrificed
every year by the continued use of antiquated and dangerous appliances? A
law requiring of every railroad engaged in interstate commerce the
equipment each year of a given per cent of its freight cars with automatic
couplers and air brakes would compel an agreement between the roads as to
the kind of brakes and couplers to be used, and would very soon and very
greatly reduce the present fearful death rate among railroad employees.

The method of appointment by the States of electors of President and
Vice-President has recently attracted renewed interest by reason of a
departure by the State of Michigan from the method which had become uniform
in all the States. Prior to 1832 various methods had been used by the
different States, and even by the same State. In some the choice was made
by the legislature; in others electors were chosen by districts, but more
generally by the voters of the whole State upon a general ticket. The
movement toward the adoption of the last-named method had an early
beginning and went steadily forward among the States until in 1832 there
remained but a single State (South Carolina) that had not adopted it. That
State until the Civil War continued to choose its electors by a vote of the
legislature, but after the war changed its method and conformed to the
practice of the other States. For nearly sixty years all the States save
one have appointed their electors by a popular vote upon a general ticket,
and for nearly thirty years this method was universal.

After a full test of other methods, without important division or dissent
in any State and without any purpose of party advantage, as we must
believe, but solely upon the considerations that uniformity was desirable
and that a general election in territorial divisions not subject to change
was most consistent with the popular character of our institutions, best
preserved the equality of the voters, and perfectly removed the choice of
President from the baneful influence of the "gerrymander," the practice of
all the States was brought into harmony. That this concurrence should now
be broken is, I think, an unfortunate and even a threatening episode, and
one that may well suggest whether the States that still give their approval
to the old and prevailing method ought not to secure by a constitutional
amendment a practice which has had the approval of all. The recent Michigan
legislation provides for choosing what are popularly known as the
Congressional electors for President by Congressional districts and the two
Senatorial electors by districts created for that purpose. This legislation
was, of course, accompanied by a new Congressional apportionment, and the
two statutes bring the electoral vote of the State under the influence of
the "gerrymander."

These gerrymanders for Congressional purposes are in most cases buttressed
by a gerrymander of the legislative districts, thus making it impossible
for a majority of the legal voters of the State to correct the
apportionment and equalize the Congressional districts. A minority rule is
established that only a political convulsion can overthrow. I have recently
been advised that in one county of a certain State three districts for the
election of members of the legislature are constituted as follows: One has
65,000 population, one 15,000, and one 10,000, while in another county
detached, noncontiguous sections have been united to make a legislative
district. These methods have already found effective application to the
choice of Senators and Representatives in Congress, and now an evil start
has been made in the direction of applying them to the choice by the States
of electors of President and Vice-President. If this is accomplished, we
shall then have the three great departments of the Government in the grasp
of the "gerrymander," the legislative and executive directly and the
judiciary indirectly through the power of appointment.

An election implies a body of electors having prescribed qualifications,
each one of whom has an equal value and influence in determining the
result. So when the Constitution provides that "each State shall appoint"
(elect), "in such manner as the legislature thereof may direct, a number of
electors," etc., an unrestricted power was not given to the legislatures in
the selection of the methods to be used. "A republican form of government"
is guaranteed by the Constitution to each State, and the power given by the
same instrument to the legislatures of the States to prescribe methods for
the choice by the State of electors must be exercised under that
limitation. The essential features of such a government are the right of
the people to choose their own officers and the nearest practicable
equality of value in the suffrages given in determining that choice.

It will not be claimed that the power given to the legislature would
support a law providing that the persons receiving the smallest vote should
be the electors or a law that all the electors should be chosen by the
voters of a single Congressional district. The State is to choose, and
finder the pretense of regulating methods the legislature can neither vest
the right of choice elsewhere nor adopt methods not conformable to
republican institutions. It is not my purpose here to discuss the question
whether a choice by the legislature or by the voters of equal single
districts is a choice by the State, but only to recommend such regulation
of this matter by constitutional amendment as will secure uniformity and
prevent that disgraceful partisan jugglery to which such a liberty of
choice, if it exists, offers a temptation.

Nothing just now is more important than to provide every guaranty for the
absolutely fair and free choice by an equal suffrage within the respective
States of all the officers of the National Government, whether that
suffrage is applied directly, as in the choice of members of the House of
Representatives, or indirectly, as in the choice of Senators and electors
of President. Respect for public officers and obedience to law will not
cease to be the characteristics of our people until our elections cease to
declare the will of majorities fairly ascertained without fraud,
suppression, or gerrymander. If I were called upon to declare wherein our
chief national danger lies, I should say without hesitation in the
overthrow of majority control by the suppression or perversion of the
popular suffrage. That there is a real danger here all must agree; but the
energies of those who see it have been chiefly expended in trying to fix
responsibility upon the opposite party rather than in efforts to make such
practices impossible by either party.

Is it not possible now to adjourn that interminable and inconclusive debate
while we take by consent one step in the direction of reform by eliminating
the gerrymander, which has been denounced by all parties as an influence in
the selection of electors of President and members of Congress? All the
States have, acting freely and separately, determined that the choice of
electors by a general ticket is the wisest and safest method, and it would
seem there could be no objection to a constitutional amendment making that
method permanent. If a legislature chosen in one year upon purely local
questions should, pending a Presidential contest, meet, rescind the law for
a choice upon a general ticket, and provide for the choice of electors by
the legislature, and this trick should determine the result, it is not too
much to say that the public peace might be seriously and widely
endangered.

I have alluded to the "gerrymander" as affecting the method of selecting
electors of President by Congressional districts, but the primary intent
and effect of this form of political robbery have relation to the selection
of members of the House of Representatives. The power of Congress is ample
to deal with this threatening and intolerable abuse. The unfailing test of
sincerity in election reform will be found in a willingness to confer as to
remedies and to put into force such measures as will most effectually
preserve the right of the people to free and equal representation.

An attempt was made in the last Congress to bring to bear the
constitutional powers of the General Government for the correction of fraud
against the suffrage. It is important to know whether the opposition to
such measures is really rested in particular features supposed to be
objectionable or includes any proposition to give to the election laws of
the United States adequacy to the correction of grave and acknowledged
evils. I must yet entertain the hope that it is possible to secure a calm,
patriotic consideration of such constitutional or statutory changes as may
be necessary to secure the choice of the officers of the Government to the
people by fair apportionments and free elections.

I believe it would be possible to constitute a commission, nonpartisan in
its membership and composed of patriotic, wise, and impartial men, to whom
a consideration of the question of the evils connected with our election
system and methods might be committed with a good prospect of securing
unanimity in some plan for removing or mitigating those evils. The
Constitution would permit the selection of the commission to be vested in
the Supreme Court if that method would give the best guaranty of
impartiality. This commission should be charged with the duty of inquiring
into the whole subject of the law of elections as related to the choice of
officers of the National Government, with a view to securing to every
elector a free and unmolested exercise of the suffrage and as near an
approach to an equality of value in each ballot cast as is attainable.

While the policies of the General Government upon the tariff, upon the
restoration of our merchant marine, upon river and harbor improvements, and
other such matters of grave and general concern are liable to be turned
this way or that by the results of Congressional elections and
administrative policies, sometimes involving issues that tend to peace or
war, to be turned this way or that by the results of a Presidential
election, there is a rightful interest in all the States and in every
Congressional district that will not be deceived or silenced by the
audacious pretense that the question of the right of any body of legal
voters in any State or in any Congressional district to give their
suffrages freely upon these general questions is a matter only of local
concern or control. The demand that the limitations of suffrage shall be
found in the law, and only there, is a just demand, and no just man should
resent or resist it. My appeal is and must continue to be for a
consultation that shall "proceed with candor, calmness, and patience upon
the lines of justice and humanity, not of prejudice and cruelty."

To the consideration of these very grave questions I invite not only the
attention of Congress, but that of all patriotic citizens. We must not
entertain the delusion that our people have ceased to regard a free ballot
and equal representation as the price of their allegiance to laws and to
civil magistrates.

I have been greatly rejoiced to notice many evidences of the increased
unification of our people and of a revived national spirit. The vista that
now opens to us is wider and more glorious than ever before. Gratification
and amazement struggle for supremacy as we contemplate the population,
wealth, and moral strength of our country. A trust momentous in its
influence upon our people and upon the world is for a brief time committed
to us, and we must not be faithless to its first condition--the defense of
the free and equal influence of the people in the choice of public officers
and in the control of public affairs.

BENJ. HARRISON