Fellow-Citizens of the Senate and House of Representatives:

I congratulate you on the continued and increasing prosperity of our
country. By the favor of Divine Providence we have been blessed during the
past year with health, with abundant harvests, with profitable employment
for all our people, and with contentment at home, and with peace and
friendship with other nations. The occurrence of the twenty-fourth election
of Chief Magistrate has afforded another opportunity to the people of the
United States to exhibit to the world a significant example of the peaceful
and safe transmission of the power and authority of government from the
public servants whose terms of office are about to expire to their newly
chosen successors. This example can not fail to impress profoundly
thoughtful people of other countries with the advantages which republican
institutions afford. The immediate, general, and cheerful acquiescence of
all good citizens in the result of the election gives gratifying assurance
to our country and to its friends throughout the world that a government
based on the free consent of an intelligent and patriotic people possesses
elements of strength, stability, and permanency not found in any other form
of government.

Continued opposition to the full and free enjoyment of the rights of
citizenship conferred upon the colored people by the recent amendments to
the Constitution still prevails in several of the late slaveholding States.
It has, perhaps, not been manifested in the recent election to any large
extent in acts of violence or intimidation. It has, however, by fraudulent
practices in connection with the ballots, with the regulations as to the
places and manner of voting, and with counting, returning, and canvassing
the votes cast, been successful in defeating the exercise of the right
preservative of all rights--the right of suffrage--which the Constitution
expressly confers upon our enfranchised citizens.

It is the desire of the good people of the whole country that sectionalism
as a factor in our politics should disappear. They prefer that no section
of the country should be united in solid opposition to any other section.
The disposition to refuse a prompt and hearty obedience to the equal-rights
amendments to the Constitution is all that now stands in the way of a
complete obliteration of sectional lines in our political contests. As long
as either of these amendments is flagrantly violated or disregarded, it is
safe to assume that the people who placed them in the Constitution, as
embodying the legitimate results of the war for the Union, and who believe
them to be wise and necessary, will continue to act together and to insist
that they shall be obeyed. The paramount question still is as to the
enjoyment of the fight by every American citizen who has the requisite
qualifications to freely cast his vote and to have it honestly counted.
With this question rightly settled, the country will be relieved of the
contentions of the past; bygones will indeed be bygones, and political and
party issues, with respect to economy and efficiency of administration,
internal improvements, the tariff, domestic taxation, education, finance,
and other important subjects, will then receive their full share of
attention; but resistance to and nullification of the results of the war
will unite together in resolute purpose for their support all who maintain
the authority of the Government and the perpetuity of the Union, and who
adequately appreciate the value of the victory achieved. This determination
proceeds from no hostile sentiment or feeling to any part of the people of
our country or to any of their interests. The inviolability of the
amendments rests upon the fundamental principle of our Government. They are
the solemn expression of the will of the people of the United States.

The sentiment that the constitutional rights of all our citizens must be
maintained does not grow weaker. It will continue to control the Government
of the country. Happily, the history of the late election shows that in
many parts of the country where opposition to the fifteenth amendment has
heretofore prevailed it is diminishing, and is likely to cease altogether
if firm and well-considered action is taken by Congress. I trust the House
of Representatives and the Senate, which have the right to judge of the
elections, returns, and qualifications of their own members, will see to it
that every case of violation of the letter or spirit of the fifteenth
amendment is thoroughly investigated, and that no benefit from such
violation shall accrue to any person or party. It will be the duty of the
Executive, with sufficient appropriations for the purpose, to prosecute
unsparingly all who have been engaged in depriving citizens of the rights
guaranteed to them by the Constitution.

It is not, however, to be forgotten that the best and surest guaranty of
the primary rights of citizenship is to be found in that capacity for
self-protection which can belong only to a people whose right to universal
suffrage is supported by universal education. The means at the command of
the local and State authorities are in many cases wholly inadequate to
furnish free instruction to all who need it. This is especially true where
before emancipation the education of the people was neglected or prevented,
in the interest of slavery. Firmly convinced that the subject of popular
education deserves the earnest attention of the people of the whole
country, with a view to wise and comprehensive action by the Government of
the United States, I respectfully recommend that Congress, by suitable
legislation and with proper safeguards, supplement the local educational
funds in the several States where the grave duties and responsibilities of
citizenship have been devolved on uneducated people by devoting to the
purpose grants of the public lands and, if necessary, by appropriations
from the Treasury of the United States. Whatever Government can fairly do
to promote free popular education ought to be done. Wherever general
education is found, peace, virtue, and social order prevail and civil and
religious liberty are secure.

In my former annual messages I have asked the attention of Congress to the
urgent necessity of a reformation of the civil-service system of the
Government. My views concerning the dangers of patronage, or appointments
for personal or partisan considerations, have been strengthened by my
observation and experience in the Executive office, and I believe these
dangers threaten the stability of the Government. Abuses so serious in
their nature can not be permanently tolerated. They tend to become more
alarming with the enlargement of administrative service, as the growth of
the country in population increases the number of officers and placemen
employed.

The reasons are imperative for the adoption of fixed rules for the
regulation of appointments, promotions, and removals, establishing a
uniform method having exclusively in view in every instance the attainment
of the best qualifications for the position in question. Such a method
alone is consistent with the equal rights of all citizens and the most
economical and efficient administration of the public business.

Competitive examinations in aid of impartial appointments and promotions
have been conducted for some years past in several of the Executive
Departments, and by my direction this system has been adopted in the
custom-houses and post-offices of the larger cities of the country. In the
city of New York over 2,000 positions in the civil service have been
subject in their appointments and tenure of place to the operation of
published rules for this purpose during the past two years. The results of
these practical trials have been very satisfactory, and have confirmed my
opinion in favor of this system of selection. All are subjected to the same
tests, and the result is free from prejudice by personal favor or partisan
influence. It secures for the position applied for the best qualifications
attainable among the competing applicants. It is an effectual protection
from the pressure of importunity, which under any other course pursued
largely exacts the time and attention of appointing officers, to their
great detriment in the discharge of other official duties preventing the
abuse of the service for the mere furtherance of private or party purposes,
and leaving the employee of the Government, freed from the obligations
imposed by patronage, to depend solely upon merit for retention and
advancement, and with this constant incentive to exertion and improvement.

These invaluable results have been attained in a high degree in the offices
where the rules for appointment by competitive examination have been
applied.

A method which has so approved itself by experimental tests at points where
such tests may be fairly considered conclusive should be extended to all
subordinate positions under the Government. I believe that a strong and
growing public sentiment demands immediate measures for securing and
enforcing the highest possible efficiency in the civil service and its
protection from recognized abuses, and that the experience referred to has
demonstrated the feasibility of such measures.

The examinations in the custom-houses and post-offices have been held under
many embarrassments and without provision for compensation for the extra
labor performed by the officers who have conducted them, and whose
commendable interest in the improvement of the public service has induced
this devotion of time and labor without pecuniary reward. A continuance of
these labors gratuitously ought not to be expected, and without an
appropriation by Congress for compensation it is not practicable to extend
the system of examinations generally throughout the civil service. It is
also highly important that all such examinations should be conducted upon a
uniform system and under general supervision. Section 1753 of the Revised
Statutes authorizes the President to prescribe the regulations for
admission to the civil service of the United States, and for this purpose
to employ suitable persons to conduct the requisite inquiries with
reference to "the fitness of each candidate, in respect to age, health,
character, knowledge, and ability for the branch of service into which he
seeks to enter;" but the law is practically inoperative for want of the
requisite appropriation.

I therefore recommend an appropriation of $25,000 per annum to meet the
expenses of a commission, to be appointed by the President in accordance
with the terms of this section, whose duty it shall be to devise a just,
uniform, and efficient system of competitive examinations and to supervise
the application of the same throughout the entire civil service of the
Government. I am persuaded that the facilities which such a commission will
afford for testing the fitness of those who apply for office will not only
be as welcome a relief to members of Congress as it will be to the
President and heads of Departments, but that it will also greatly tend to
remove the causes of embarrassment which now inevitably and constantly
attend the conflicting claims of patronage between the legislative and
executive departments. The most effectual check upon the pernicious
competition of influence and official favoritism in the bestowal of office
will be the substitution of an open competition of merit between the
applicants, in which everyone can make his own record with the assurance
that his success will depend upon this alone.

I also recommend such legislation as, while leaving every officer as free
as any other citizen to express his political opinions and to use his means
for their advancement, shall also enable him to feel as safe as any private
citizen in refusing all demands upon his salary for political purposes. A
law which should thus guarantee true liberty and justice to all who are
engaged in the public service, and likewise contain stringent provisions
against the use of official authority to coerce the political action of
private citizens or of official subordinates, is greatly to be desired.

The most serious obstacle, however, to an improvement of the civil service,
and especially to a reform in the method of appointment and removal, has
been found to be the practice, under what is known as the spoils system, by
which the appointing power has been so largely encroached upon by members
of Congress. The first step in the reform of the civil service must be a
complete divorce between Congress and the Executive in the matter of
appointments. The corrupting doctrine that "to the victors belong the
spoils" is inseparable from Congressional patronage as the established rule
and practice of parties in power. It comes to be understood by applicants
for office and by the people generally that Representatives and Senators
are entitled to disburse the patronage of their respective districts and
States. It is not necessary to recite at length the evils resulting from
this invasion of the Executive functions. The true principles of Government
on the subject of appointments to office, as stated in the national
conventions of the leading parties of the country, have again and again
been approved by the American people, and have not been called in question
in any quarter. These authentic expressions of public opinion upon this
all-important subject are the statement of principles that belong to the
constitutional structure of the Government. Under the Constitution the
President and heads of Departments are to make nominations for office. The
Senate is to advise and consent to appointments, and the House of
Representatives is to accuse and prosecute faithless officers. The best
interest of the public service demands that these distinctions be
respected; that Senators and Representatives, who may be judges and
accusers, should not dictate appointments to office. To this end the
cooperation of the legislative department of the Government is required
alike by the necessities of the case and by public opinion. Members of
Congress will not be relieved from the demands made upon them with
reference to appointments to office until by legislative enactment the
pernicious practice is condemned and forbidden.

It is therefore recommended that an act be passed defining the relations of
members of Congress with respect to appointment to office by the President;
and I also recommend that the provisions of section 1767 and of the
sections following of the Revised Statutes, comprising the tenure-of-office
act of March 2, 1867, be repealed.

Believing that to reform the system and methods of the civil service in our
country is one of the highest and most imperative duties of statesmanship,
and that it can be permanently done only by the cooperation of the
legislative and executive departments of the Government, I again commend
the whole subject to your considerate attention.

It is the recognized duty and purpose of the people of the United States to
suppress polygamy where it now exists in our Territories and to prevent its
extension. Faithful and zealous efforts have been made by the United States
authorities in Utah to enforce the laws against it. Experience has shown
that the legislation upon this subject, to be effective, requires extensive
modification and amendment. The longer action is delayed the more difficult
it will be to accomplish what is desired. Prompt and decided measures are
necessary. The Mormon sectarian organization which upholds polygamy has the
whole power of making and executing the local legislation of the Territory.
By its control of the grand and petit juries it possesses large influence
over the administration of justice. Exercising, as the heads of this sect
do, the local political power of the Territory, they are able to make
effective their hostility to the law of Congress on the subject of
polygamy, and, in fact, do prevent its enforcement. Polygamy will not be
abolished if the enforcement of the law depends on those who practice and
uphold the crime. It can only be suppressed by taking away the political
power of the sect which encourages and sustains it.

The power of Congress to enact suitable laws to protect the Territories is
ample. It is not a case for halfway measures. The political power of the
Mormon sect is increasing. It controls now one of our wealthiest and most
populous Territories. It is extending steadily into other Territories.
Wherever it goes it establishes polygamy and sectarian political power. The
sanctity of marriage and the family relation are the corner stone of our
American society and civilization. Religious liberty and the separation of
church and state are among the elementary ideas of free institutions. To
reestablish the interests and principles which polygamy and Mormonism have
imperiled, and to fully reopen to intelligent and virtuous immigrants of
all creeds that part of our domain which has been in a great degree closed
to general immigration by intolerant and immoral institutions, it is
recommended that the government of the Territory of Utah be reorganized.

I recommend that Congress provide for the government of Utah by a governor
and judges, or commissioners, appointed by the President and confirmed by
the Senate--a government analogous to the provisional government
established for the territory northwest of the Ohio by the ordinance of
1787. If, however, it is deemed best to continue the existing form of local
government, I recommend that the right to vote, hold office, and sit on
juries in the Territory of Utah be confined to those who neither practice
nor uphold polygamy. If thorough measures are adopted, it is believed that
within a few years the evils which now afflict Utah will be eradicated, and
that this Territory will in good time become one of the most prosperous and
attractive of the new States of the Union.

Our relations with all foreign countries have been those of undisturbed
peace, and have presented no occasion for concern as to their continued
maintenance.

My anticipation of an early reply from the British Government to the demand
of indemnity to our fishermen for the injuries suffered by that industry at
Fortune Bay in January, 1878, which I expressed in my last annual message,
was disappointed. This answer was received only in the latter part of April
in the present year, and when received exhibited a failure of accord
between the two Governments as to the measure of the inshore fishing
privilege secured to our fishermen by the treaty of Washington of so
serious a character that I made it the subject of a communication to
Congress, in which I recommended the adoption of the measures which seemed
to me proper to be taken by this Government in maintenance of the rights
accorded to our fishermen under the treaty and toward securing an indemnity
for the injury these interests had suffered. A bill to carry out these
recommendations was under consideration by the House of Representatives at
the time of the adjournment of Congress in June last.

Within a few weeks I have received a communication from Her Majesty's
Government renewing the consideration of the subject, both of the indemnity
for the injuries at Fortune Bay and of the interpretation of the treaty in
which the previous correspondence had shown the two Governments to be at
variance. Upon both these topics the disposition toward a friendly
agreement is manifested by a recognition of our right to an indemnity for
the transaction at Fortune Bay, leaving the measure of such indemnity to
further conference, and by an assent to the view of this Government,
presented in the previous correspondence, that the regulation of
conflicting interests of the shore fishery of the provincial seacoasts and
the vessel fishery of our fishermen should be made the subject of
conference and concurrent arrangement between the two Governments.

I sincerely hope that the basis may be found for a speedy adjustment of the
very serious divergence of views in the interpretation of the fishery
clauses of the treaty of Washington, which, as the correspondence between
the two Governments stood at the close of the last session of Congress,
seemed to be irreconcilable.

In the important exhibition of arts and industries which was held last year
at Sydney, New South Wales, as well as in that now in progress at
Melbourne, the United States have been efficiently and honorably
represented. The exhibitors from this country at the former place received
a large number of awards in some of the most considerable departments, and
the participation of the United States was recognized by a special mark of
distinction. In the exhibition at Melbourne the share taken by our country
is no less notable, and an equal degree of success is confidently
expected.

The state of peace and tranquillity now enjoyed by all the nations of the
continent of Europe has its favorable influence upon our diplomatic and
commercial relations with them. We have concluded and ratified a convention
with the French Republic for the settlement of claims of the citizens of
either country against the other. Under this convention a commission,
presided over by a distinguished publicist, appointed in pursuance of the
request of both nations by His Majesty the Emperor of Brazil, has been
organized and has begun its sessions in this city. A congress to consider
means for the protection of industrial property has recently been in
session in Paris, to which I have appointed the ministers of the United
States in France and in Belgium as delegates. The International Commission
upon Weights and Measures also continues its work in Paris. I invite your
attention to the necessity of an appropriation to be made in time to enable
this Government to comply with its obligations under the metrical
convention.

Our friendly relations with the German Empire continue without
interruption. At the recent International Exhibition of Fish and Fisheries
at Berlin the participation of the United States, notwithstanding the haste
with which the commission was forced to make its preparations, was
extremely successful and meritorious, winning for private exhibitors
numerous awards of a high class and for the country at large the principal
prize of honor offered by His Majesty the Emperor. The results of this
great success can not but be advantageous to this important and growing
industry. There have been some questions raised between the two Governments
as to the proper effect and interpretation of our treaties of
naturalization, but recent dispatches from our minister at Berlin show that
favorable progress is making toward an understanding in accordance with the
views of this Government, which makes and admits no distinction whatever
between the rights of a native and a naturalized citizen of the United
States. In practice the complaints of molestation suffered by naturalized
citizens abroad have never been fewer than at present.

There is nothing of importance to note in our unbroken friendly relations
with the Governments of Austria-Hungary, Russia, Portugal, Sweden and
Norway, Switzerland, Turkey, and Greece.

During the last summer several vessels belonging to the merchant marine of
this country, sailing in neutral waters of the West Indies, were fired at,
boarded, and searched by an armed cruiser of the Spanish Government. The
circumstances as reported involve not only a private injury to the persons
concerned, but also seemed too little observant of the friendly relations
existing for a century between this country and Spain. The wrong was
brought to the attention of the Spanish Government in a serious protest and
remonstrance, and the matter is undergoing investigation by the royal
authorities with a view to such explanation or reparation as may be called
for by the facts.

The commission sitting in this city for the adjudication of claims of our
citizens against the Government of Spain is, I hope, approaching the
termination of its labors.

The claims against the United States under the Florida treaty with Spain
were submitted to Congress for its action at the late session, and I again
invite your attention to this long-standing question, with a view to a
final disposition of the matter.

At the invitation of the Spanish Government, a conference has recently been
held at the city of Madrid to consider the subject of protection by foreign
powers of native Moors in the Empire of Morocco. The minister of the United
States in Spain was directed to take part in the deliberations of this
conference, the result of which is a convention signed on behalf of all the
powers represented. The instrument will be laid before the Senate for its
consideration. The Government of the United States has also lost no
opportunity to urge upon that of the Emperor of Morocco the necessity, in
accordance with the humane and enlightened spirit of the age, of putting an
end to the persecutions, which have been so prevalent in that country, of
persons of a faith other than the Moslem, and especially of the Hebrew
residents of Morocco.

The consular treaty concluded with Belgium has not yet been officially
promulgated, owing to the alteration of a word in the text by the Senate of
the United States, which occasioned a delay, during which the time allowed
for ratification expired. The Senate will be asked to extend the period for
ratification.

The attempt to negotiate a treaty of extradition with Denmark failed on
account of the objection of the Danish Government to the usual clause
providing that each nation should pay the expense of the arrest of the
persons whose extradition it asks.

The provision made by Congress at its last session for the expense of the
commission which had been appointed to enter upon negotiations with the
Imperial Government of China on subjects of great interest to the relations
of the two countries enabled the commissioners to proceed at once upon
their mission. The Imperial Government was prepared to give prompt and
respectful attention to the matters brought under negotiation, and the
conferences proceeded with such rapidity and success that on the 17th of
November last two treaties were signed at Peking, one relating to the
introduction of Chinese into this country and one relating to commerce. Mr.
Trescot, one of the commissioners, is now on his way home bringing the
treaties, and it is expected that they will be received in season to be
laid before the Senate early in January.

Our minister in Japan has negotiated a convention for the reciprocal relief
of shipwrecked seamen. I take occasion to urge once more upon Congress the
propriety of making provision for the erection of suitable fireproof
buildings at the Japanese capital for the use of the American legation and
the court-house and jail connected with it. The Japanese Government, with
great generosity and courtesy, has offered for this purpose an eligible
piece of land.

In my last annual message I invited the attention of Congress to the
subject of the indemnity funds received some years ago from China and
Japan. I renew the recommendation then made that whatever portions of these
funds are due to American citizens should be promptly paid and the residue
returned to the nations, respectively, to which they justly and equitably
belong.

The extradition treaty with the Kingdom of the Netherlands, Which has been
for some time in course of negotiation, has during the past year been
concluded and duly ratified.

Relations of friendship and amity have been established between the
Government of the United States and that of Roumania. We have sent a
diplomatic representative to Bucharest, and have received at this capital
the special envoy who has been charged by His Royal Highness Prince Charles
to announce the independent sovereignty of Roumania. We hope for a speedy
development of commercial relations between the two countries.

In my last annual message I expressed the hope that the prevalence of quiet
on the border between this country and Mexico would soon become so assured
as to justify the modification of the orders then in force to our military
commanders in regard to crossing the frontier, without encouraging such
disturbances as would endanger the peace of the two countries. Events moved
in accordance with these expectations, and the orders were accordingly
withdrawn, to the entire satisfaction of our own citizens and the Mexican
Government. Subsequently the peace of the border was again disturbed by a
savage foray under the command of the Chief Victoria, but by the combined
and harmonious action of the military forces of both countries his band has
been broken up and substantially destroyed.

There is reason to believe that the obstacles which have so long prevented
rapid and convenient communication between the United States and Mexico by
railways are on the point of disappearing, and that several important
enterprises of this character will soon be set on foot, which can not fail
to contribute largely to the prosperity of both countries.

New envoys from Guatemala, Colombia, Bolivia, Venezuela, and Nicaragua have
recently arrived at this capital, whose distinction and enlightenment
afford the best guaranty of the continuance of friendly relations between
ourselves and these sister Republics.

The relations between this Government and that of the United States of
Colombia have engaged public attention during the past year, mainly by
reason of the project of an interoceanic canal across the Isthmus of
Panama, to be built by private capital under a concession from the
Colombian Government for that purpose. The treaty obligations subsisting
between the United States and Colombia, by which we guarantee the
neutrality of the transit and the sovereignty and property of Colombia in
the Isthmus, make it necessary that the conditions under which so
stupendous a change in the region embraced in this guaranty should be
effected--transforming, as it would, this Isthmus from a barrier between
the Atlantic and Pacific oceans into a gateway and thoroughfare between
them for the navies and the merchant ships of the world--should receive the
approval of this Government, as being compatible with the discharge of
these obligations on our part and consistent with our interests as the
principal commercial power of the Western Hemisphere. The views which I
expressed in a special message to Congress in March last in relation to
this project I deem it my duty again to press upon your attention.
Subsequent consideration has but confirmed the opinion "that it is the
right and duty of the United States to assert and maintain such supervision
and authority over any interoceanic canal across the isthmus that connects
North and South America as will protect our national interest."

The war between the Republic of Chile on the one hand and the allied
Republics of Peru and Bolivia on the other still continues. This Government
has not felt called upon to interfere in a contest that is within the
belligerent rights of the parties as independent states. We have, however,
always held ourselves in readiness to aid in accommodating their
difference, and have at different times reminded both belligerents of our
willingness to render such service.

Our good offices in this direction were recently accepted by all the
belligerents, and it was hoped they would prove efficacious; but I regret
to announce that the measures which the ministers of the United States at
Santiago and Lima were authorized to take with the view to bring about a
peace were not successful. In the course of the war some questions have
arisen affecting neutral rights. In all of these the ministers of the
United States have, under their instructions, acted with promptness and
energy in protection of American interests.

The relations of the United States with the Empire of Brazil continue to be
most cordial, and their commercial intercourse steadily increases, to their
mutual advantage.

The internal disorders with which the Argentine Republic has for some time
past been afflicted, and which have more or less influenced its external
trade, are understood to have been brought to a close. This happy result
may be expected to redound to the benefit of the foreign commerce of that
Republic, as well as to the development of its vast interior resources.

In Samoa the Government of King Malietoa, under the support and recognition
of the consular representatives of the United States, Great Britain, and
Germany, seems to have given peace and tranquillity to the islands. While
it does not appear desirable to adopt as a whole the scheme of tripartite
local government which has been proposed, the common interests of the three
great treaty powers require harmony in their relations to the native frame
of government, and this may be best secured by a simple diplomatic
agreement between them. It would be well if the consular jurisdiction of
our representative at Apia were increased in extent and importance so as to
guard American interests in the surrounding and outlying islands of
Oceanica.

The obelisk generously presented by the Khedive of Egypt to the city of New
York has safely arrived in this country, and will soon be erected in that
metropolis. A commission for the liquidation of the Egyptian debt has
lately concluded its work, and this Government, at the earnest solicitation
of the Khedive, has acceded to the provisions adopted by it, which will be
laid before Congress for its information. A commission for the revision of
the judicial code of the reform tribunal of Egypt is now in session in
Cairo. Mr. Farman, consul-general, and J. M. Batchelder, esq., have been
appointed as commissioners to participate in this work. The organization of
the reform tribunals will probably be continued for another period of five
years.

In pursuance of the act passed at the last session of Congress, invitations
have been extended to foreign maritime states to join in a sanitary
conference in Washington, beginning the 1st of January. The acceptance of
this invitation by many prominent powers gives promise of success in this
important measure, designed to establish a system of international
notification by which the spread of infectious or epidemic diseases may be
more effectively checked or prevented. The attention of Congress is invited
to the necessary appropriations for carrying into effect the provisions of
the act referred to.

The efforts of the Department of State to enlarge the trade and commerce of
the United States, through the active agency of consular officers and
through the dissemination of information obtained from them, have been
unrelaxed. The interest in these efforts, as developed in our commercial
communities, and the value of the information secured by this means to the
trade and manufactures of the country were recognized by Congress at its
last session, and provision was made for the more frequent publication of
consular and other reports by the Department of State. The first issue of
this publication has now been prepared, and subsequent issues may regularly
be expected. The importance and interest attached to the reports of
consular officers are witnessed by the general demand for them by all
classes of merchants and manufacturers engaged in our foreign trade. It is
believed that the system of such publications is deserving of the approval
of Congress, and that the necessary appropriations for its continuance and
enlargement will commend itself to your consideration.

The prosperous energies of our domestic industries and their immense
production of the subjects of foreign commerce invite, and even require, an
active development of the wishes and interests of our people in that
direction. Especially important is it that our commercial relations with
the Atlantic and Pacific coasts of South America, with the West Indies and
the Gulf of Mexico, should be direct, and not through the circuit of
European systems, and should be carried on in our own bottoms. The full
appreciation of the opportunities which our front on the Pacific Ocean
gives to commerce with Japan, China, and the East Indies, with Australia
and the island groups which lie along these routes of navigation, should
inspire equal efforts to appropriate to our own shipping and to administer
by our own capital a due proportion of this trade. Whatever modifications
of our regulations of trade and navigation may be necessary or useful to
meet and direct these impulses to the enlargement of our exchanges and of
our carrying trade I am sure the wisdom of Congress will be ready to
supply. One initial measure, however, seems to me so dearly useful and
efficient that I venture to press it upon your earnest attention. It seems
to be very evident that the provision of regular steam postal communication
by aid from government has been the forerunner of the commercial
predominance of Great Britain on all these coasts and seas, a greater share
in whose trade is now the desire and the intent of our people. It is also
manifest that the efforts of other European nations to contend with Great
Britain for a share of this commerce have been successful in proportion
with their adoption of regular steam postal communication with the markets
whose trade they sought. Mexico and the States of South America are anxious
to receive such postal communication with this country and to aid in their
development. Similar cooperation may be looked for in due time from the
Eastern nations and from Australia. It is difficult to see how the lead in
this movement can be expected from private interests. In respect of foreign
commerce quite as much as in internal trade postal communication seems
necessarily a matter of common and public administration, and thus
pertaining to Government. I respectfully recommend to your prompt attention
such just and efficient measures as may conduce to the development of our
foreign commercial exchanges and the building up of our carrying trade.

In this connection I desire also to suggest the very great service which
might be expected in enlarging and facilitating our commerce on the Pacific
Ocean were a transmarine cable laid from San Francisco to the Sandwich
Islands, and thence to Japan at the north and Australia at the south. The
great influence of such means of communication on these routes of
navigation in developing and securing the due share of our Pacific Coast in
the commerce of the world needs no illustration or enforcement. It may be
that such an enterprise, useful, and in the end profitable, as it would
prove to private investment, may need to be accelerated by prudent
legislation by Congress in its aid, and I submit the matter to your careful
consideration.

An additional and not unimportant, although secondary, reason for fostering
and enlarging the Navy may be found in the unquestionable service to the
expansion of our commerce which would be rendered by the frequent
circulation of naval ships in the seas and ports of all quarters of the
globe. Ships of the proper construction and equipment to be of the greatest
efficiency in case of maritime war might be made constant and active agents
in time of peace in the advancement and protection of our foreign trade and
in the nurture and discipline of young seamen, who would naturally in some
numbers mix with and improve the crews of our merchant ships. Our merchants
at home and abroad recognize the value to foreign commerce of an active
movement of our naval vessels, and the intelligence and patriotic zeal of
our naval officers in promoting every interest of their countrymen is a
just subject of national pride.

The condition of the financial affairs of the Government, as shown by the
report of the Secretary of the Treasury, is very satisfactory. It is
believed that the present financial situation of the United States, whether
considered with respect to trade, currency, credit, growing wealth, or the
extent and variety of our resources, is more favorable than that of any
other country of our time, and has never been surpassed by that of any
country at any period of its history. All our industries are thriving; the
rate of interest is low; new railroads are being constructed; a vast
immigration is increasing our population, capital, and labor; new
enterprises in great number are in progress, and our commercial relations
with other countries are improving.

The ordinary revenues from all sources for the fiscal year ended June 30,
1880, were--

From customs - $186,522,064.60

From internal revenue - 124,009,373.92

From sales of public lands - 1,016,506.60

From tax on circulation and deposits of national banks - 7,014,971.44

From repayment of interest by Pacific Railway companies - 1,707,367.18

From sinking fund for Pacific Railway companies - 786,621.22

From customs fees, fines, penalties, etc - 1,148,800.16

From fees-consular, letters patent, and lands - 2,337,029.00

From proceeds of sales of Government property - 282,616.50

From profits on coinage, etc - 2,792,186.78

From revenues of the District of Columbia - 1,809,469.70

From miscellaneous sources - 4,099,603.88 -