To the Senate and House of Representatives:

The country is to be congratulated on the amount of substantial
achievement which has marked the past year both as regards our foreign
and as regards our domestic policy.

With a nation as with a man the most important things are those of the
household, and therefore the country is especially to be congratulated
on what has been accomplished in the direction of providing for the
exercise of supervision over the great corporations and combinations of
corporations engaged in interstate commerce. The Congress has created
the Department of Commerce and Labor, including the Bureau of
Corporations, with for the first time authority to secure proper
publicity of such proceedings of these great corporations as the public
has the right to know. It has provided for the expediting of suits for
the enforcement of the Federal anti-trust law; and by another law it
has secured equal treatment to all producers in the transportation of
their goods, thus taking a long stride forward in making effective the
work of the Interstate Commerce Commission.

The establishment of the Department of Commerce and Labor, with the
Bureau of Corporations thereunder, marks a real advance in the
direction of doing all that is possible for the solution of the
questions vitally affecting capitalists and wage-workers. The act
creating Department was approved on February 14, 1903, and two days
later the head of the Department was nominated and confirmed by the
Senate. Since then the work of organization has been pushed as rapidly
as the initial appropriations permitted, and with due regard to
thoroughness and the broad purposes which the Department is designed to
serve. After the transfer of the various bureaus and branches to the
Department at the beginning of the current fiscal year, as provided for
in the act, the personnel comprised 1,289 employees in Washington and
8,836 in the country at large. The scope of the Department's duty and
authority embraces the commercial and industrial interests of the
Nation. It is not designed to restrict or control the fullest liberty
of legitimate business action, but to secure exact and authentic
information which will aid the Executive in enforcing existing laws,
and which will enable the Congress to enact additional legislation, if
any should be found necessary, in order to prevent the few from
obtaining privileges at the expense of diminished opportunities for the
many.

The preliminary work of the Bureau of Corporations in the Department
has shown the wisdom of its creation. Publicity in corporate affairs
will tend to do away with ignorance, and will afford facts upon which
intelligent action may be taken. Systematic, intelligent investigation
is already developing facts the knowledge of which is essential to a
right understanding of the needs and duties of the business world. The
corporation which is honestly and fairly organized, whose managers in
the conduct of its business recognize their obligation to deal squarely
with their stockholders, their competitors, and the public, has nothing
to fear from such supervision. The purpose of this Bureau is not to
embarrass or assail legitimate business, but to aid in bringing about a
better industrial condition--a condition under which there shall be
obedience to law and recognition of public obligation by all
corporations, great or small. The Department of Commerce and Labor will
be not only the clearing house for information regarding the business
transactions of the Nation, but the executive arm of the Government to
aid in strengthening our domestic and foreign markets, in perfecting
our transportation facilities, in building up our merchant marine, in
preventing the entrance of undesirable immigrants, in improving
commercial and industrial conditions, and in bringing together on
common ground those necessary partners in industrial progress--capital
and labor. Commerce between the nations is steadily growing in volume,
and the tendency of the times is toward closer trade relations.
Constant watchfulness is needed to secure to Americans the chance to
participate to the best advantage in foreign trade; and we may
confidently expect that the new Department will justify the expectation
of its creators by the exercise of this watchfulness, as well as by the
businesslike administration of such laws relating to our internal
affairs as are intrusted to its care.

In enacting the laws above enumerated the Congress proceeded on sane
and conservative lines. Nothing revolutionary was attempted; but a
common-sense and successful effort was made in the direction of seeing
that corporations are so handled as to subserve the public good. The
legislation was moderate. It was characterized throughout by the idea
that we were not attacking corporations, but endeavoring to provide for
doing away with any evil in them; that we drew the line against
misconduct, not against wealth; gladly recognizing the great good done
by the capitalist who alone, or in conjunction with his fellows, does
his work along proper and legitimate lines. The purpose of the
legislation, which purpose will undoubtedly be fulfilled, was to favor
such a man when he does well, and to supervise his action only to
prevent him from doing ill. Publicity can do no harm to the honest
corporation. The only corporation that has cause to dread it is the
corporation which shrinks from the light, and about the welfare of such
corporations we need not be oversensitive. The work of the Department
of Commerce and Labor has been conditioned upon this theory, of
securing fair treatment alike for labor and for capital.

The consistent policy of the National Government, so far as it has the
power, is to hold in check the unscrupulous man, whether employer or
employee; but to refuse to weaken individual initiative or to hamper or
cramp the industrial development of the country. We recognize that this
is an era of federation and combination, in which great capitalistic
corporations and labor unions have become factors of tremendous
importance in all industrial centers. Hearty recognition is given the
far-reaching, beneficent work which has been accomplished through both
corporations and unions, and the line as between different
corporations, as between different unions, is drawn as it is between
different individuals; that is, it is drawn on conduct, the effort
being to treat both organized capital and organized labor alike; asking
nothing save that the interest of each shall be brought into harmony
with the interest of the general public, and that the conduct of each
shall conform to the fundamental rules of obedience to law, of
individual freedom, and of justice and fair dealing towards all.
Whenever either corporation, labor union, or individual disregards the
law or acts in a spirit of arbitrary and tyrannous interference with
the rights of others, whether corporations or individuals, then where
the Federal Government has jurisdiction, it will see to it that the
misconduct is stopped, paying not the slightest heed to the position or
power of the corporation, the union or the individual, but only to one
vital fact--that is, the question whether or not the conduct of the
individual or aggregate of individuals is in accordance with the law of
the land. Every man must be guaranteed his liberty and his right to do
as he likes with his property or his labor, so long as he does not
infringe the rights of others. No man is above the law and no man is
below it; nor do we ask any man's permission when we require him to
obey it. Obedience to the law is demanded as a right; not asked as a
favor.

We have cause as a nation to be thankful for the steps that have been
so successfully taken to put these principles into effect. The progress
has been by evolution, not by revolution. Nothing radical has been
done; the action has been both moderate and resolute. Therefore the
work will stand. There shall be no backward step. If in the working of
the laws it proves desirable that they shall at any point be expanded
or amplified, the amendment can be made as its desirability is shown.
Meanwhile they are being administered with judgment, but with
insistence upon obedience to them, and their need has been emphasized
in signal fashion by the events of the past year.

From all sources, exclusive of the postal service, the receipts of the
Government for the last fiscal year aggregated $560,396,674. The
expenditures for the same period were $506,099,007, the surplus for the
fiscal year being $54,297,667. The indications are that the surplus for
the present fiscal year will be very small, if indeed there be any
surplus. From July to November the receipts from customs were,
approximately, nine million dollars less than the receipts from the
same source for a corresponding portion of last year. Should this
decrease continue at the same ratio throughout the fiscal year, the
surplus would be reduced by, approximately, thirty million dollars.
Should the revenue from customs suffer much further decrease during the
fiscal year, the surplus would vanish. A large surplus is certainly
undesirable. Two years ago the war taxes were taken off with the
express intention of equalizing the governmental receipts and
expenditures, and though the first year thereafter still showed a
surplus, it now seems likely that a substantial equality of revenue and
expenditure will be attained. Such being the case it is of great moment
both to exercise care and economy in appropriations, and to scan
sharply any change in our fiscal revenue system which may reduce our
income. The need of strict economy in our expenditures is emphasized by
the fact that we can not afford to be parsimonious in providing for
what is essential to our national well-being. Careful economy wherever
possible will alone prevent our income from falling below the point
required in order to meet our genuine needs.

The integrity of our currency is beyond question, and under present
conditions it would be unwise and unnecessary to attempt a
reconstruction of our entire monetary system. The same liberty should
be granted the Secretary of the Treasury to deposit customs receipts as
is granted him in the deposit of receipts from other sources. In my
Message of December 2, 1902, I called attention to certain needs of the
financial situation, and I again ask the consideration of the Congress
for these questions.

During the last session of the Congress at the suggestion of a joint
note from the Republic of Mexico and the Imperial Government of China,
and in harmony with an act of the Congress appropriating $25,000 to pay
the expenses thereof, a commission was appointed to confer with the
principal European countries in the hope that some plan might be
devised whereby a fixed rate of exchange could be assured between the
gold-standard countries and the silver-standard countries. This
commission has filed its preliminary report, which has been made
public. I deem it important that the commission be continued, and that
a sum of money be appropriated sufficient to pay the expenses of its
further labors.

A majority of our people desire that steps be taken in the interests of
American shipping, so that we may once more resume our former position
in the ocean carrying trade. But hitherto the differences of opinion as
to the proper method of reaching this end have been so wide that it has
proved impossible to secure the adoption of any particular scheme.
Having in view these facts, I recommend that the Congress direct the
Secretary of the Navy, the Postmaster-General, and the Secretary of
Commerce and Labor, associated with such a representation from the
Senate and House of Representatives as the Congress in its wisdom may
designate, to serve as a commission for the purpose of investigating
and reporting to the Congress at its next session what legislation is
desirable or necessary for the development of the American merchant
marine and American commerce, and incidentally of a national ocean mail
service of adequate auxiliary naval crusiers and naval reserves. While
such a measure is desirable in any event, it is especially desirable at
this time, in view of the fact that our present governmental contract
for ocean mail with the American Line will expire in 1905. Our ocean
mail act was passed in 1891. In 1895 our 20-knot transatlantic mail
line was equal to any foreign line. Since then the Germans have put on
23-knot, steamers, and the British have contracted for 24-knot
steamers. Our service should equal the best. If it does not, the
commercial public will abandon it. If we are to stay in the business it
ought to be with a full understanding of the advantages to the country
on one hand, and on the other with exact knowledge of the cost and
proper methods of carrying it on. Moreover, lines of cargo ships are of
even more importance than fast mail lines; save so far as the latter
can be depended upon to furnish swift auxiliary cruisers in time of
war. The establishment of new lines of cargo ships to South America, to
Asia, and elsewhere would be much in the interest of our commercial
expansion.

We can not have too much immigration of the right kind, and we should
have none at all of the wrong kind. The need is to devise some system
by which undesirable immigrants shall be kept out entirely, while
desirable immigrants are properly distributed throughout the country.
At present some districts which need immigrants have none; and in
others, where the population is already congested, immigrants come in
such numbers as to depress the conditions of life for those already
there. During the last two years the immigration service at New York
has been greatly improved, and the corruption and inefficiency which
formerly obtained there have been eradicated. This service has just
been investigated by a committee of New York citizens of high standing,
Messrs. Arthur V. Briesen, Lee K. Frankel, Eugene A. Philbin, Thomas W.
Hynes, and Ralph Trautman. Their report deals with the whole situation
at length, and concludes with certain recommendations for
administrative and legislative action. It is now receiving the
attention of the Secretary of Commerce and Labor.

The special investigation of the subject of naturalization under the
direction of the Attorney-General, and the consequent prosecutions
reveal a condition of affairs calling for the immediate attention of
the Congress. Forgeries and perjuries of shameless and flagrant
character have been perpetrated, not only in the dense centers of
population, but throughout the country; and it is established beyond
doubt that very many so-called citizens of the United States have no
title whatever to that right, and are asserting and enjoying the
benefits of the same through the grossest frauds. It is never to be
forgotten that citizenship is, to quote the words recently used by the
Supreme Court of the United States, an "inestimable heritage," whether
it proceeds from birth within the country or is obtained by
naturalization; and we poison the sources of our national character and
strength at the fountain, if the privilege is claimed and exercised
without right, and by means of fraud and corruption. The body politic
can not be sound and healthy if many of its constituent members claim
their standing through the prostitution of the high right and calling
of citizenship. It should mean something to become a citizen of the
United States; and in the process no loophole whatever should be left
open to fraud.

The methods by which these frauds--now under full investigation with a
view to meting out punishment and providing adequate remedies--are
perpetrated, include many variations of procedure by which false
certificates of citizenship are forged in their entirety; or genuine
certificates fraudulently or collusively obtained in blank are filled
in by the criminal conspirators; or certificates are obtained on
fraudulent statements as to the time of arrival and residence in this
country; or imposition and substitution of another party for the real
petitioner occur in court; or certificates are made the subject of
barter and sale and transferred from the rightful holder to those not
entitled to them; or certificates are forged by erasure of the original
names and the insertion of the names of other persons not entitled to
the same.

It is not necessary for me to refer here at large to the causes leading
to this state of affairs. The desire for naturalization is heartily to
be commended where it springs from a sincere and permanent intention to
become citizens, and a real appreciation of the privilege. But it is a
source of untold evil and trouble where it is traceable to selfish and
dishonest motives, such as the effort by artificial and improper means,
in wholesale fashion to create voters who are ready-made tools of
corrupt politicians, or the desire to evade certain labor laws creating
discriminations against alien labor. All good citizens, whether
naturalized or native born, are equally interested in protecting our
citizenship against fraud in any form, and, on the other hand, in
affording every facility for naturalization to those who in good faith
desire to share alike our privileges and our responsibilities.

The Federal grand jury lately in session in New York City dealt with
this subject and made a presentment which states the situation briefly
and forcibly and contains important suggestions for the consideration
of the Congress. This presentment is included as an appendix to the
report of the Attorney-General.

In my last annual Message, in connection with the subject of the due
regulation of combinations of capital which are or may become injurious
to the public, I recommend a special appropriation for the better
enforcement of the antitrust law as it now stands, to be extended under
the direction of the Attorney-General. Accordingly (by the legislative,
executive, and judicial appropriation act of February 25, 1903, 32
Stat., 854, 904), the Congress appropriated, for the purpose of
enforcing the various Federal trust and interstate-commerce laws, the
sum of five hundred thousand dollars, to be expended under the
direction of the Attorney-General in the employment of special counsel
and agents in the Department of Justice to conduct proceedings and
prosecutions under said laws in the courts of the United States. I now
recommend, as a matter of the utmost importance and urgency, the
extension of the purposes of this appropriation, so that it may be
available, under the direction of the Attorney-General, and until used,
for the due enforcement of the laws of the United States in general and
especially of the civil and criminal laws relating to public lands and
the laws relating to postal crimes and offenses and the subject of
naturalization. Recent investigations have shown a deplorable state of
affairs in these three matters of vital concern. By various frauds and
by forgeries and perjuries, thousands of acres of the public domain,
embracing lands of different character and extending through various
sections of the country, have been dishonestly acquired. It is hardly
necessary to urge the importance of recovering these dishonest
acquisitions, stolen from the people, and of promptly and duly
punishing the offenders. I speak in another part of this Message of the
widespread crimes by which the sacred right of citizenship is falsely
asserted and that "inestimable heritage" perverted to base ends. By
similar means--that is, through frauds, forgeries, and perjuries, and
by shameless briberies--the laws relating to the proper conduct of the
public service in general and to the due administration of the
Post-Office Department have been notoriously violated, and many
indictments have been found, and the consequent prosecutions are in
course of hearing or on the eve thereof. For the reasons thus
indicated, and so that the Government may be prepared to enforce
promptly and with the greatest effect the due penalties for such
violations of law, and to this end may be furnished with sufficient
instrumentalities and competent legal assistance for the investigations
and trials which will be necessary at many different points of the
country, I urge upon the Congress the necessity of making the said
appropriation available for immediate use for all such purposes, to be
expended under the direction of the Attorney-General.

Steps have been taken by the State Department looking to the making of
bribery an extraditable offense with foreign powers. The need of more
effective treaties covering this crime is manifest. The exposures and
prosecutions of official corruption in St. Louis, Mo., and other cities
and States have resulted in a number of givers and takers of bribes
becoming fugitives in foreign lands. Bribery has not been included in
extradition treaties heretofore, as the necessity for it has not
arisen. While there may have been as much official corruption in former
years, there has been more developed and brought to light in the
immediate past than in the preceding century of our country's history.
It should be the policy of the United States to leave no place on earth
where a corrupt man fleeing from this country can rest in peace. There
is no reason why bribery should not be included in all treaties as
extraditable. The recent amended treaty with Mexico, whereby this crime
was put in the list of extraditable offenses, has established a
salutary precedent in this regard. Under this treaty the State
Department has asked, and Mexico has granted, the extradition of one of
the St. Louis bribe givers.

There can be no crime more serious than bribery. Other offenses violate
one law while corruption strikes at the foundation of all law. Under
our form of Government all authority is vested in the people and by
them delegated to those who represent them in official capacity. There
can be no offense heavier than that of him in whom such a sacred trust
has been reposed, who sells it for his own gain and enrichment; and no
less heavy is the offense of the bribe giver. He is worse than the
thief, for the thief robs the individual, while the corrupt official
plunders an entire city or State. He is as wicked as the murderer, for
the murderer may only take one life against the law, while the corrupt
official and the man who corrupts the official alike aim at the
assassination of the commonwealth itself. Government of the people, by
the people, for the people will perish from the face of the earth if
bribery is tolerated. The givers and takers of bribes stand on an evil
pre-eminence of infamy. The exposure and punishment of public
corruption is an honor to a nation, not a disgrace. The shame lies in
toleration, not in correction. No city or State, still less the Nation,
can be injured by the enforcement of law. As long as public plunderers
when detected can find a haven of refuge in any foreign land and avoid
punishment, just so long encouragement is given them to continue their
practices. If we fail to do all that in us lies to stamp out corruption
we can not escape our share of responsibility for the guilt. The first
requisite of successful self-government is unflinching enforcement of
the law and the cutting out of corruption.

For several years past the rapid development of Alaska and the
establishment of growing American interests in regions theretofore
unsurveyed and imperfectly known brought into prominence the urgent
necessity of a practical demarcation of the boundaries between the
jurisdictions of the United States and Great Britain. Although the
treaty of 1825 between Great Britain and Russia, the provisions of
which were copied in the treaty of 1867, whereby Russia conveyed Alaska
to the United States, was positive as to the control, first by Russia
and later by the United States, of a strip of territory along the
continental mainland from the western shore of Portland Canal to Mount
St. Elias, following and surrounding the indentations of the coast and
including the islands to the westward, its description of the landward
margin of the strip was indefinite, resting on the supposed existence
of a continuous ridge or range of mountains skirting the coast, as
figured in the charts of the early navigators. It had at no time been
possible for either party in interest to lay down, under the authority
of the treaty, a line so obviously exact according to its provisions as
to command the assent of the other. For nearly three-fourths of a
century the absence of tangible local interests demanding the exercise
of positive jurisdiction on either side of the border left the question
dormant. In 1878 questions of revenue administration on the Stikine
River led to the establishment of a provisional demarcation, crossing
the channel between two high peaks on either side about twenty-four
miles above the river mouth. In 1899 similar questions growing out of
the extraordinary development of mining interests in the region about
the head of Lynn Canal brought about a temporary modus vivendi, by
which a convenient separation was made at the watershed divides of the
White and Chilkoot passes and to the north of Klukwan, on the Klehini
River. These partial and tentative adjustments could not, in the very
nature of things, be satisfactory or lasting. A permanent disposition
of the matter became imperative.

After unavailing attempts to reach an understanding through a Joint
High Commission, followed by prolonged negotiations, conducted in an
amicable spirit, a convention between the United States and Great
Britain was signed, January 24, 1903, providing for an examination of
the subject by a mixed tribunal of six members, three on a side, with a
view to its final disposition. Ratifications were exchanged on March 3
last, whereupon the two Governments appointed their respective members.
Those on behalf of the United States were Elihu Root, Secretary of War,
Henry Cabot Lodge, a Senator of the United States, and George Turner,
an ex-Senator of the United States, while Great Britain named the Right
Honourable Lord Alverstone, Lord Chief Justice of England, Sir Louis
Amable Jette, K. C. M. G., retired judge of the Supreme Court of
Quebec, and A. B. Aylesworth, K. C., of Toronto. This Tribunal met in
London on September 3, under the Presidency of Lord Alverstone. The
proceedings were expeditious, and marked by a friendly and
conscientious spirit. The respective cases, counter cases, and
arguments presented the issues clearly and fully. On the 20th of
October a majority of the Tribunal reached and signed an agreement on
all the questions submitted by the terms of the Convention. By this
award the right of the United States to the control of a continuous
strip or border of the mainland shore, skirting all the tide-water
inlets and sinuosities of the coast, is confirmed; the entrance to
Portland Canal (concerning which legitimate doubt appeared) is defined
as passing by Tongass Inlet and to the northwestward of Wales and
Pearse islands; a line is drawn from the head of Portland Canal to the
fifty-sixth degree of north latitude; and the interior border line of
the strip is fixed by lines connecting certain mountain summits lying
between Portland Canal and Mount St. Elias, and running along the crest
of the divide separating the coast slope from the inland watershed at
the only part of the frontier where the drainage ridge approaches the
coast within the distance of ten marine leagues stipulated by the
treaty as the extreme width of the strip around the heads of Lynn Canal
and its branches.

While the line so traced follows the provisional demarcation of 1878 at
the crossing of the Stikine River, and that of 1899 at the summits of
the White and Chilkoot passes, it runs much farther inland from the
Klehini than the temporary line of the later modus vivendi, and leaves
the entire mining district of the Porcupine River and Glacier Creek
within the jurisdiction of the United States.

The result is satisfactory in every way. It is of great material
advantage to our people in the Far Northwest. It has removed from the
field of discussion and possible danger a question liable to become
more acutely accentuated with each passing year. Finally, it has
furnished a signal proof of the fairness and good will with which two
friendly nations can approach and determine issues involving national
sovereignty and by their nature incapable of submission to a third
power for adjudication.

The award is self-executing on the vital points. To make it effective
as regards the others it only remains for the two Governments to
appoint, each on its own behalf, one or more scientific experts, who
shall, with all convenient speed, proceed together to lay down the
boundary line in accordance with the decision of the majority of the
Tribunal. I recommend that the Congress make adequate provision for the
appointment, compensation, and expenses of the members to serve on this
joint boundary commission on the part of the United States.

It will be remembered that during the second session of the last
Congress Great Britain, Germany, and Italy formed an alliance for the
purpose of blockading the ports of Venezuela and using such other means
of pressure as would secure a settlement of claims due, as they
alleged, to certain of their subjects. Their employment of force for
the collection of these claims was terminated by an agreement brought
about through the offices of the diplomatic representatives of the
United States at Caracas and the Government at Washington, thereby
ending a situation which was bound to cause increasing friction, and
which jeoparded the peace of the continent. Under this agreement
Venezuela agreed to set apart a certain percentage of the customs
receipts of two of her ports to be applied to the payment of whatever
obligations might be ascertained by mixed commissions appointed for
that purpose to be due from her, not only to the three powers already
mentioned, whose proceedings against her had resulted in a state of
war, but also to the United States, France, Spain, Belgium, the
Netherland Sweden and Norway, and Mexico, who had not employed force
for the collection of the claims alleged to be due to certain of their
citizens.

A demand was then made by the so-called blockading powers that the sums
ascertained to be due to their citizens by such mixed commissions
should be accorded payment in full before anything was paid upon the
claims of any of the so-called peace powers. Venezuela, on the other
hand, insisted that all her creditors should be paid upon a basis of
exact equality. During the efforts to adjust this dispute it was
suggested by the powers in interest that it should be referred to me
for decision, but I was clearly of the opinion that a far wiser course
would be to submit the question to the Permanent Court of Arbitration
at The Hague. It seemed to me to offer an admirable opportunity to
advance the practice of the peaceful settlement of disputes between
nations and to secure for the Hague Tribunal a memorable increase of
its practical importance. The nations interested in the controversy
were so numerous and in many instances so powerful as to make it
evident that beneficent results would follow from their appearance at
the same time before the bar of that august tribunal of peace.

Our hopes in that regard have been realized. Russia and Austria are
represented in the persons of the learned and distinguished jurists who
compose the Tribunal, while Great Britain, Germany, France, Spain,
Italy, Belgium, the Netherlands, Sweden and Norway, Mexico, the United
States, and Venezuela are represented by their respective agents and
counsel. Such an imposing concourse of nations presenting their
arguments to and invoking the decision of that high court of
international justice and international peace can hardly fail to secure
a like submission of many future controversies. The nations now
appearing there will find it far easier to appear there a second time,
while no nation can imagine its just pride will be lessened by
following the example now presented. This triumph of the principle of
international arbitration is a subject of warm congratulation and
offers a happy augury for the peace of the world.

There seems good ground for the belief that there has been a real
growth among the civilized nations of a sentiment which will permit a
gradual substitution of other methods than the method of war in the
settlement of disputes. It is not pretended that as yet we are near a
position in which it will be possible wholly to prevent war, or that a
just regard for national interest and honor will in all cases permit of
the settlement of international disputes by arbitration; but by a
mixture of prudence and firmness with wisdom we think it is possible to
do away with much of the provocation and excuse for war, and at least
in many cases to substitute some other and more rational method for the
settlement of disputes. The Hague Court offers so good an example of
what can be done in the direction of such settlement that it should be
encouraged in every way.

Further steps should be taken. In President McKinley's annual Message
of December 5, 1898, he made the following recommendation:

"The experiences of the last year bring forcibly home to us a sense of
the burdens and the waste of war. We desire in common with most
civilized nations, to reduce to the lowest possible point the damage
sustained in time of war by peaceable trade and commerce. It is true we
may suffer in such cases less than other communities, but all nations
are damaged more or less by the state of uneasiness and apprehension
into which an outbreak of hostilities throws the entire commercial
world. It should be our object, therefore, to minimize, so far as
practicable, this inevitable loss and disturbance. This purpose can
probably best be accomplished by an international agreement to regard
all private property at sea as exempt from capture or destruction by
the forces of belligerent powers. The United States Government has for
many years advocated this humane and beneficent principle, and is now
in a position to recommend it to other powers without the imputation of
selfish motives. I therefore suggest for your consideration that the
Executive be authorized to correspond with the governments of the
principal maritime powers with a view of incorporating into the
permanent law of civilized nations the principle of the exemption of
all private property at sea, not contraband of war, from capture or
destruction by belligerent powers."

I cordially renew this recommendation.

The Supreme Court, speaking on December 11. 1899, through Peckham, J.,
said:

"It is, we think, historically accurate to say that this Government has
always been, in its views, among the most advanced of the governments
of the world in favor of mitigating, as to all non-combatants, the
hardships and horrors of war. To accomplish that object it has always
advocated those rules which would in most cases do away with the right
to capture the private property of an enemy on the high seas."

I advocate this as a matter of humanity and morals. It is anachronistic
when private property is respected on land that it should not be
respected at sea. Moreover, it should be borne in mind that shipping
represents, internationally speaking, a much more generalized species
of private property than is the case with ordinary property on
land--that is, property found at sea is much less apt than is the case
with property found on land really to belong to any one nation. Under
the modern system of corporate ownership the flag of a vessel often
differs from the flag which would mark the nationality of the real
ownership and money control of the vessel; and the cargo may belong to
individuals of yet a different nationality. Much American capital is
now invested in foreign ships; and among foreign nations it often
happens that the capital of one is largely invested in the shipping of
another. Furthermore, as a practical matter, it may be mentioned that
while commerce destroying may cause serious loss and great annoyance,
it can never be more than a subsidiary factor in bringing to terms a
resolute foe. This is now well recognized by all of our naval experts.
The fighting ship, not the commerce destroyer, is the vessel whose
feats add renown to a nation's history, and establish her place among
the great powers of the world.

Last year the Interparliamentary Union for International Arbitration
met at Vienna, six hundred members of the different legislatures of
civilized countries attending. It was provided that the next meeting
should be in 1904 at St. Louis, subject to our Congress extending an
invitation. Like the Hague Tribunal, this Interparliamentary Union is
one of the forces tending towards peace among the nations of the earth,
and it is entitled to our support. I trust the invitation can be
extended.

Early in July, having received intelligence, which happily turned out
to be erroneous, of the assassination of our vice-consul at Beirut, I
dispatched a small squadron to that port for such service as might be
found necessary on arrival. Although the attempt on the life of our
vice-consul had not been successful, yet the outrage was symptomatic of
a state of excitement and disorder which demanded immediate attention.
The arrival of the vessels had the happiest result. A feeling of
security at once took the place of the former alarm and disquiet; our
officers were cordially welcomed by the consular body and the leading
merchants, and ordinary business resumed its activity. The Government
of the Sultan gave a considerate hearing to the representations of our
minister; the official who was regarded as responsible for the
disturbed condition of affairs was removed. Our relations with the
Turkish Government remain friendly; our claims rounded on inequitable
treatment of some of our schools and missions appear to be in process
of amicable adjustment.

The signing of a new commercial treaty with China, which took place at
Shanghai on the 8th of October, is a cause for satisfaction. This act,
the result of long discussion and negotiation, places our commercial
relations with the great Oriental Empire on a more satisfactory footing
than they have ever heretofore enjoyed. It provides not only for the
ordinary rights and privileges of diplomatic and consular officers, but
also for an important extension of our commerce by increased facility
of access to Chinese ports, and for the relief of trade by the removal
of some of the obstacles which have embarrassed it in the past. The
Chinese Government engages, on fair and equitable conditions, which
will probably be accepted by the principal commercial nations, to
abandon the levy of "liken" and other transit dues throughout the
Empire, and to introduce other desirable administrative reforms. Larger
facilities are to be given to our citizens who desire to carry on
mining enterprises in China. We have secured for our missionaries a
valuable privilege, the recognition of their right to rent and lease in
perpetuity such property as their religious societies may need in all
parts of the Empire. And, what was an indispensable condition for the
advance and development of our commerce in Manchuria, China, by treaty
with us, has opened to foreign commerce the cities of Mukden, the
capital of the province of Manchuria, and An-tung, an important port on
the Yalu River, on the road to Korea. The full measure of development
which our commerce may rightfully expect can hardly be looked for until
the settlement of the present abnormal state of things in the Empire;
but the foundation for such development has at last been laid.

I call your attention to the reduced cost in maintaining the consular
service for the fiscal year ending June 30, 1903, as shown in the
annual report of the Auditor for the State and other Departments, as
compared with the year previous. For the year under consideration the
excess of expenditures over receipts on account of the consular service
amounted to $26,125.12, as against $96,972.50 for the year ending June
30, 1902, and $147,040.16 for the year ending June 30, 1901. This is
the best showing in this respect for the consular service for the past
fourteen years, and the reduction in the cost of the service to the
Government has been made in spite of the fact that the expenditures for
the year in question were more than $20,000 greater than for the
previous year.

The rural free-delivery service has been steadily extended. The
attention of the Congress is asked to the question of the compensation
of the letter carriers and clerks engaged in the postal service,
especially on the new rural free-delivery routes. More routes have been
installed since the first of July last than in any like period in the
Department's history. While a due regard to economy must be kept in
mind in the establishment of new routes, yet the extension of the rural
free-delivery system must be continued, for reasons of sound public
policy. No governmental movement of recent years has resulted in
greater immediate benefit to the people of the country districts. Rural
free delivery, taken in connection with the telephone, the bicycle, and
the trolley, accomplishes much toward lessening the isolation of farm
life and making it brighter and more attractive. In the immediate past
the lack of just such facilities as these has driven many of the more
active and restless young men and women from the farms to the cities;
for they rebelled at loneliness and lack of mental companionship. It is
unhealthy and undesirable for the cities to grow at the expense of the
country; and rural free delivery is not only a good thing in itself,
but is good because it is one of the causes which check this
unwholesome tendency towards the urban concentration of our population
at the expense of the country districts. It is for the same reason that
we sympathize with and approve of the policy of building good roads.
The movement for good roads is one fraught with the greatest benefit to
the country districts.

I trust that the Congress will continue to favor in all proper ways the
Louisiana Purchase Exposition. This Exposition commemorates the
Louisiana purchase, which was the first great step in the expansion
which made us a continental nation. The expedition of Lewis and Clark
across the continent followed thereon, and marked the beginning of the
process of exploration and colonization which thrust our national
boundaries to the Pacific. The acquisition of the Oregon country,
including the present States of Oregon and Washington, was a fact of
immense importance in our history; first giving us our place on the
Pacific seaboard, and making ready the way for our ascendency in the
commerce of the greatest of the oceans. The centennial of our
establishment upon the western coast by the expedition of Lewis and
Clark is to be celebrated at Portland, Oregon, by an exposition in the
summer of 1905, and this event should receive recognition and support
from the National Government.

I call your special attention to the Territory of Alaska. The country
is developing rapidly, and it has an assured future. The mineral wealth
is great and has as yet hardly been tapped. The fisheries, if wisely
handled and kept under national control, will be a business as
permanent as any other, and of the utmost importance to the people. The
forests if properly guarded will form another great source of wealth.
Portions of Alaska are fitted for farming and stock raising, although
the methods must be adapted to the peculiar conditions of the country.
Alaska is situated in the far north; but so are Norway and Sweden and
Finland; and Alaska can prosper and play its part in the New World just
as those nations have prospered and played their parts in the Old
World. Proper land laws should be enacted; and the survey of the public
lands immediately begun. Coal-land laws should be provided whereby the
coal-land entryman may make his location and secure patent under
methods kindred to those now prescribed for homestead and mineral
entrymen. Salmon hatcheries, exclusively under Government control,
should be established. The cable should be extended from Sitka
westward. Wagon roads and trails should be built, and the building of
railroads promoted in all legitimate ways. Light-houses should be built
along the coast. Attention should be paid to the needs of the Alaska
Indians; provision should be made for an officer, with deputies, to
study their needs, relieve their immediate wants, and help them adapt
themselves to the new conditions.

The commission appointed to investigate, during the season of 1903, the
condition and needs of the Alaskan salmon fisheries, has finished its
work in the field, and is preparing a detailed report thereon. A
preliminary report reciting the measures immediately required for the
protection and preservation of the salmon industry has already been
submitted to the Secretary of Commerce and Labor for his attention and
for the needed action.

I recommend that an appropriation be made for building light-houses in
Hawaii, and taking possession of those already built. The Territory
should be reimbursed for whatever amounts it has already expended for
light-houses. The governor should be empowered to suspend or remove any
official appointed by him, without submitting the matter to the
legislature.

Of our insular possessions the Philippines and Porto Rico it is
gratifying to say that their steady progress has been such as to make
it unnecessary to spend much time in discussing them. Yet the Congress
should ever keep in mind that a peculiar obligation rests upon us to
further in every way the welfare of these communities. The Philippines
should be knit closer to us by tariff arrangements. It would, of
course, be impossible suddenly to raise the people of the islands to
the high pitch of industrial prosperity and of governmental efficiency
to which they will in the end by degrees attain; and the caution and
moderation shown in developing them have been among the main reasons
why this development has hitherto gone on so smoothly. Scrupulous care
has been taken in the choice of governmental agents, and the entire
elimination of partisan politics from the public service. The condition
of the islanders is in material things far better than ever before,
while their governmental, intellectual, and moral advance has kept pace
with their material advance. No one people ever benefited another
people more than we have benefited the Filipinos by taking possession
of the islands.

The cash receipts of the General Land Office for the last fiscal year
were $11,024,743.65, an increase of $4,762,816.47 over the preceding
year. Of this sum, approximately, $8,461,493 will go to the credit of
the fund for the reclamation of arid land, making the total of this
fund, up to the 30th of June, 1903, approximately, $16,191,836.

A gratifying disposition has been evinced by those having unlawful
inclosures of public land to remove their fences. Nearly two million
acres so inclosed have been thrown open on demand. In but comparatively
few cases has it been necessary to go into court to accomplish this
purpose. This work will be vigorously prosecuted until all unlawful
inclosures have been removed.

Experience has shown that in the western States themselves, as well as
in the rest of the country, there is widespread conviction that certain
of the public-land laws and the resulting administrative practice no
longer meet the present needs. The character and uses of the remaining
public lands differ widely from those of the public lands which
Congress had especially in view when these laws were passed. The
rapidly increasing rate of disposal of the public lands is not followed
by a corresponding increase in home building. There is a tendency to
mass in large holdings public lands, especially timber and grazing
lands, and thereby to retard settlement. I renew and emphasize my
recommendation of last year that so far as they are available for
agriculture in its broadest sense, and to whatever extent they may be
reclaimed under the national irrigation law, the remaining public lands
should be held rigidly for the home builder. The attention of the
Congress is especially directed to the timber and stone law, the
desert-land law, and the commutation clause of the homestead law, which
in their operation have in many respects conflicted with wise
public-land policy. The discussions in the Congress and elsewhere have
made it evident that there is a wide divergence of opinions between
those holding opposite views on these subjects; and that the opposing
sides have strong and convinced representatives of weight both within
and without the Congress; the differences being not only as to matters
of opinion but as to matters of fact. In order that definite
information may be available for the use of the Congress, I have
appointed a commission composed of W. A. Richards, Commissioner of the
General Land Office; Gifford Pinchot, Chief of the Bureau of Forestry
of the Department of Agriculture, and F. H. Newell, Chief Hydrographer
of the Geological Survey, to report at the earliest practicable moment
upon the condition, operation, and effect of the present land laws and
on the use, condition, disposal, and settlement of the public lands.
The commission will report especially what changes in organization,
laws, regulations, and practice affecting the public lands are needed
to effect the largest practicable disposition of the public lands to
actual settlers who will build permanent homes upon them, and to secure
in permanence the fullest and most effective use of the resources of
the public lands; and it will make such other reports and
recommendations as its study of these questions may suggest. The
commission is to report immediately upon those points concerning which
its judgment is clear; on any point upon which it has doubt it will
take the time necessary to make investigation and reach a final
judgment.

The work of reclamation of the arid lands of the West is progressing
steadily and satisfactorily under the terms of the law setting aside
the proceeds from the disposal of public lands. The corps of engineers
known as the Reclamation Service, which is conducting the surveys and
examinations, has been thoroughly organized, especial pains being taken
to secure under the civil-service rules a body of skilled, experienced,
and efficient men. Surveys and examinations are progressing throughout
the arid States and Territories, plans for reclaiming works being
prepared and passed upon by boards of engineers before approval by the
Secretary of the Interior. In Arizona and Nevada, in localities where
such work is pre-eminently needed, construction has already been begun.
In other parts of the arid West various projects are well advanced
towards the drawing up of contracts, these being delayed in part by
necessities of reaching agreements or understanding as regards rights
of way or acquisition of real estate. Most of the works contemplated
for construction are of national importance, involving interstate
questions or the securing of stable, self-supporting communities in the
midst of vast tracts of vacant land. The Nation as a whole is of course
the gainer by the creation of these homes, adding as they do to the
wealth and stability of the country, and furnishing a home market for
the products of the East and South. The reclamation law, while perhaps
not ideal, appears at present to answer the larger needs for which it
is designed. Further legislation is not recommended until the
necessities of change are more apparent.

The study of the opportunities of reclamation of the vast extent of
arid land shows that whether this reclamation is done by individuals,
corporations, or the State, the sources of water supply must be
effectively protected and the reservoirs guarded by the preservation of
the forests at the headwaters of the streams. The engineers making the
preliminary examinations continually emphasize this need and urge that
the remaining public lands at the headwaters of the important streams
of the West be reserved to insure permanency of water supply for
irrigation. Much progress in forestry has been made during the past
year. The necessity for perpetuating our forest resources, whether in
public or private hands, is recognized now as never before. The demand
for forest reserves has become insistent in the West, because the West
must use the water, wood, and summer range which only such reserves can
supply. Progressive lumbermen are striving, through forestry, to give
their business permanence. Other great business interests are awakening
to the need of forest preservation as a business matter. The
Government's forest work should receive from the Congress hearty
support, and especially support adequate for the protection of the
forest reserves against fire. The forest-reserve policy of the
Government has passed beyond the experimental stage and has reached a
condition where scientific methods are essential to its successful
prosecution. The administrative features of forest reserves are at
present unsatisfactory, being divided between three Bureaus of two
Departments. It is therefore recommended that all matters pertaining to
forest reserves, except those involving or pertaining to land titles,
be consolidated in the Bureau of Forestry of the Department of
Agriculture.

The cotton-growing States have recently been invaded by a weevil that
has done much damage and threatens the entire cotton industry. I
suggest to the Congress the prompt enactment of such remedial
legislation as its judgment may approve.

In granting patents to foreigners the proper course for this country to
follow is to give the same advantages to foreigners here that the
countries in which these foreigners dwell extend in return to our
citizens; that is, to extend the benefits of our patent laws on
inventions and the like where in return the articles would be
patentable in the foreign countries concerned--where an American could
get a corresponding patent in such countries.

The Indian agents should not be dependent for their appointment or
tenure of office upon considerations of partisan politics; the practice
of appointing, when possible, ex-army officers or bonded
superintendents to the vacancies that occur is working well. Attention
is invited to the widespread illiteracy due to lack of public schools
in the Indian Territory. Prompt heed should be paid to the need of
education for the children in this Territory.

In my last annual Message the attention of the Congress was called to
the necessity of enlarging the safety-appliance law, and it is
gratifying to note that this law was amended in important respects.
With the increasing railway mileage of the country, the greater number
of men employed, and the use of larger and heavier equipment, the
urgency for renewed effort to prevent the loss of life and limb upon
the railroads of the country, particularly to employees, is apparent.
For the inspection of water craft and the Life-Saving Service upon the
water the Congress has built up an elaborate body of protective
legislation and a thorough method of inspection and is annually
spending large sums of money. It is encouraging to observe that the
Congress is alive to the interests of those who are employed upon our
wonderful arteries of commerce--the railroads--who so safely transport
millions of passengers and billions of tons of freight. The Federal
inspection, of safety appliances, for which the Congress is now making
appropriations, is a service analogous to that which the Government has
upheld for generations in regard to vessels, and it is believed will
prove of great practical benefit, both to railroad employees and the
traveling public. As the greater part of commerce is interstate and
exclusively under the control of the Congress the needed safety and
uniformity must be secured by national legislation.

No other class of our citizens deserves so well of the Nation as those
to whom the Nation owes its very being, the veterans of the civil war.
Special attention is asked to the excellent work of the Pension Bureau
in expediting and disposing of pension claims. During the fiscal year
ending July 1, 1903, the Bureau settled 251,982 claims, an average of
825 claims for each working day of the year. The number of settlements
since July 1, 1903, has been in excess of last year's average,
approaching 1,000 claims for each working day, and it is believed that
the work of the Bureau will be current at the close of the present
fiscal year.

During the year ended June 30 last 25,566 persons were appointed
through competitive examinations under the civil-service rules. This
was 12,672 more than during the preceding year, and 40 per cent of
those who passed the examinations. This abnormal growth was largely
occasioned by the extension of classification to the rural
free-delivery service and the appointment last year of over 9,000 rural
carriers. A revision of the civil-service rules took effect on April 15
last, which has greatly improved their operation. The completion of the
reform of the civil service is recognized by good citizens everywhere
as a matter of the highest public importance, and the success of the
merit system largely depends upon the effectiveness of the rules and
the machinery provided for their enforcement. A very gratifying spirit
of friendly co-operation exists in all the Departments of the
Government in the enforcement and uniform observance of both the letter
and spirit of the civil-service act. Executive orders of July 3, 1902;
March 26, 1903, and July 8, 1903, require that appointments of all
unclassified laborers, both in the Departments at Washington and in the
field service, shall be made with the assistance of the United States
Civil Service Commission, under a system of registration to test the
relative fitness of applicants for appointment or employment. This
system is competitive, and is open to all citizens of the United States
qualified in respect to age, physical ability, moral character,
industry, and adaptability for manual labor; except that in case of
veterans of the Civil War the element of age is omitted. This system of
appointment is distinct from the classified service and does not
classify positions of mere laborer under the civil-service act and
rules. Regulations in aid thereof have been put in operation in several
of the Departments and are being gradually extended in other parts of
the service. The results have been very satisfactory, as extravagance
has been checked by decreasing the number of unnecessary positions and
by increasing the efficiency of the employees remaining.

The Congress, as the result of a thorough investigation of the
charities and reformatory institutions in the District of Columbia, by
a joint select committee of the two Houses which made its report in
March, 1898, created in the act approved June 6, 1900, a board of
charities for the District of Columbia, to consist of five residents of
the District, appointed by the President of the United States, by and
with the advice and consent of the Senate, each for a term of three
years, to serve without compensation. President McKinley appointed five
men who had been active and prominent in the public charities in
Washington, all of whom upon taking office July 1, 1900, resigned from
the different charities with which they had been connected. The members
of the board have been reappointed in successive years. The board
serves under the Commissioners of the District of Columbia. The board
gave its first year to a careful and impartial study of the special
problems before it, and has continued that study every year in the
light of the best practice in public charities elsewhere. Its
recommendations in its annual reports to the Congress through the
Commissioners of the District of Columbia "for the economical and
efficient administration of the charities and reformatories of the
District of Columbia," as required by the act creating it, have been
based upon the principles commended by the joint select committee of
the Congress in its report of March, 1898, and approved by the best
administrators of public charities, and make for the desired
systematization and improvement of the affairs under its supervision.
They are worthy of favorable consideration by the Congress.

The effect of the laws providing a General Staff for the Army and for
the more effective use of the National Guard has been excellent. Great
improvement has been made in the efficiency of our Army in recent
years. Such schools as those erected at Fort Leavenworth and Fort Riley
and the institution of fall maneuver work accomplish satisfactory
results. The good effect of these maneuvers upon the National Guard is
marked, and ample appropriation should be made to enable the guardsmen
of the several States to share in the benefit. The Government should as
soon as possible secure suitable permanent camp sites for military
maneuvers in the various sections of the country. The service thereby
rendered not only to the Regular Army, but to the National Guard of the
several States, will be so great as to repay many times over the
relatively small expense. We should not rest satisfied with what has
been done, however. The only people who are contented with a system of
promotion by mere seniority are those who are contented with the
triumph of mediocrity over excellence. On the other hand, a system
which encouraged the exercise of social or political favoritism in
promotions would be even worse. But it would surely be easy to devise a
method of promotion from grade to grade in which the opinion of the
higher officers of the service upon the candidates should be decisive
upon the standing and promotion of the latter. Just such a system now
obtains at West Point. The quality of each year's work determines the
standing of that year's class, the man being dropped or graduated into
the next class in the relative position which his military superiors
decide to be warranted by his merit. In other words, ability, energy,
fidelity, and all other similar qualities determine the rank of a man
year after year in West Point, and his standing in the Army when he
graduates from West Point; but from that time on, all effort to find
which man is best or worst, and reward or punish him accordingly, is
abandoned; no brilliancy, no amount of hard work, no eagerness in the
performance of duty, can advance him, and no slackness or indifference
that falls short of a court-martial offense can retard him. Until this
system is changed we can not hope that our officers will be of as high
grade as we have a right to expect, considering the material upon which
we draw. Moreover, when a man renders such service as Captain Pershing
rendered last spring in the Moro campaign, it ought to be possible
to reward him without at once jumping him to the grade of
brigadier-general.

Shortly after the enunciation of that famous principle of American
foreign policy now known as the "Monroe Doctrine," President Monroe, in
a special Message to Congress on January 30, 1824, spoke as follows:
"The Navy is the arm from which our Government will always derive most
aid in support of our rights. Every power engaged in war will know the
strength of our naval power, the number of our ships of each class,
their condition, and the promptitude with which we may bring them into
service, and will pay due consideration to that argument."

I heartily congratulate the Congress upon the steady progress in
building up the American Navy. We can not afford a let-up in this great
work. To stand still means to go back. There should be no cessation in
adding to the effective units of the fighting strength of the fleet.
Meanwhile the Navy Department and the officers of the Navy are doing
well their part by providing constant service at sea under conditions
akin to those of actual warfare. Our officers and enlisted men are
learning to handle the battleships, cruisers, and torpedo boats with
high efficiency in fleet and squadron formations, and the standard of
marksmanship is being steadily raised. The best work ashore is
indispensable, but the highest duty of a naval officer is to exercise
command at sea.

The establishment of a naval base in the Philippines ought not to be
longer postponed. Such a base is desirable in time of peace; in time of
war it would be indispensable, and its lack would be ruinous. Without
it our fleet would be helpless. Our naval experts are agreed that Subig
Bay is the proper place for the purpose. The national interests require
that the work of fortification and development of a naval station at
Subig Bay be begun at an early date; for under the best conditions it
is a work which will consume much time.

It is eminently desirable, however, that there should be provided a
naval general staff on lines similar to those of the General Staff
lately created for the Army. Within the Navy Department itself the
needs of the service have brought about a system under which the duties
of a general staff are partially performed; for the Bureau of
Navigation has under its direction the War College, the Office of Naval
Intelligence, and the Board of Inspection, and has been in close touch
with the General Board of the Navy. But though under the excellent
officers at their head, these boards and bureaus do good work, they
have not the authority of a general staff, and have not sufficient
scope to insure a proper readiness for emergencies. We need the
establishment by law of a body of trained officers, who shall exercise
a systematic control of the military affairs of the Navy, and be
authorized advisers of the Secretary concerning it.

By the act of June 28, 1902, the Congress authorized the President to
enter into treaty with Colombia for the building of the canal across
the Isthmus of Panama; it being provided that in the event of failure
to secure such treaty after the lapse of a reasonable time, recourse
should be had to building a canal through Nicaragua. It has not been
necessary to consider this alternative, as I am enabled to lay before
the Senate a treaty providing for the building of the canal across the
Isthmus of Panama. This was the route which commended itself to the
deliberate judgment of the Congress, and we can now acquire by treaty
the right to construct the canal over this route. The question now,
therefore, is not by which route the isthmian canal shall be built, for
that question has been definitely and irrevocably decided. The question
is simply whether or not we shall have an isthmian canal.

When the Congress directed that we should take the Panama route under
treaty with Colombia, the essence of the condition, of course, referred
not to the Government which controlled that route, but to the route
itself; to the territory across which the route lay, not to the name
which for the moment the territory bore on the map. The purpose of the
law was to authorize the President to make a treaty with the power in
actual control of the Isthmus of Panama. This purpose has been
fulfilled.

In the year 1846 this Government entered into a treaty with New
Granada, the predecessor upon the Isthmus of the Republic of Colombia
and of the present Republic of Panama, by which treaty it was provided
that the Government and citizens of the United States should always
have free and open right of way or transit across the Isthmus of Panama
by any modes of communication that might be constructed, while in turn
our Government guaranteed the perfect neutrality of the above-mentioned
Isthmus with the view that the free transit from the one to the other
sea might not be interrupted or embarrassed. The treaty vested in the
United States a substantial property right carved out of the rights of
sovereignty and property which New Granada then had and possessed over
the said territory. The name of New Granada has passed away and its
territory has been divided. Its successor, the Government of Colombia,
has ceased to own any property in the Isthmus. A new Republic, that of
Panama, which was at one time a sovereign state, and at another time a
mere department of the successive confederations known as New Granada
and Columbia, has now succeeded to the rights which first one and then
the other formerly exercised over the Isthmus. But as long as the
Isthmus endures, the mere geographical fact of its existence, and the
peculiar interest therein which is required by our position, perpetuate
the solemn contract which binds the holders of the territory to respect
our right to freedom of transit across it, and binds us in return to
safeguard for the Isthmus and the world the exercise of that
inestimable privilege. The true interpretation of the obligations upon
which the United States entered in this treaty of 1846 has been given
repeatedly in the utterances of Presidents and Secretaries of State.
Secretary Cuss in 1858 officially stated the position of this
Government as follows:

"The progress of events has rendered the interoceanic route across the
narrow portion of Central America vastly important to the commercial
world, and especially to the United States, whose possessions extend
along the Atlantic and Pacific coasts, and demand the speediest and
easiest modes of communication. While the rights of sovereignty of the
states occupying this region should always be respected, we shall
expect that these rights be exercised in a spirit befitting the
occasion and the wants and circumstances that have arisen. Sovereignty
has its duties as well as its rights, and none of these local
governments, even if administered with more regard to the just demands
of other nations than they have been, would be permitted, in a spirit
of Eastern isolation, to close the gates of intercourse on the great
highways of the world, and justify the act by the pretension that these
avenues of trade and travel belong to them and that they choose to shut
them, or, what is almost equivalent, to encumber them with such unjust
relations as would prevent their general use."

Seven years later, in 1865, Mr. Seward in different communications took
the following position:

"The United States have taken and will take no interest in any question
of internal revolution in the State of Panama, or any State of the
United States of Colombia, but will maintain a perfect neutrality in
connection with such domestic altercations. The United States will,
nevertheless, hold themselves ready to protect the transit trade across
the Isthmus against invasion of either domestic or foreign disturbers
of the peace of the State of Panama. Neither the text nor the spirit of
the stipulation in that article by which the United States engages to
preserve the neutrality of the Isthmus of Panama, imposes an obligation
on this Government to comply with the requisition of the President of
the United States of Colombia for a force to protect the Isthmus of
Panama from a body of insurgents of that country. The purpose of the
stipulation was to guarantee the Isthmus against seizure or invasion by
a foreign power only."

Attorney-General Speed, under date of November 7, 1865, advised
Secretary Seward as follows:

"From this treaty it can not be supposed that New Granada invited the
United States to become a party to the intestine troubles of that
Government, nor did the United States become bound to take sides in the
domestic broils of New Granada. The United States did guarantee New
Granada in the sovereignty and property over the territory. This was as
against other and foreign governments."

For four hundred years, ever since shortly after the discovery of this
hemisphere, the canal across the Isthmus has been planned. For two
score years it has been worked at. When made it is to last for the
ages. It is to alter the geography of a continent and the trade routes
of the world. We have shown by every treaty we have negotiated or
attempted to negotiate with the peoples in control of the Isthmus and
with foreign nations in reference thereto our consistent good faith in
observing our obligations; on the one hand to the peoples of the
Isthmus, and on the other hand to the civilized world whose commercial
rights we are safeguarding and guaranteeing by our action. We have done
our duty to others in letter and in spirit, and we have shown the
utmost forbearance in exacting our own rights.

Last spring, under the act above referred to, a treaty concluded
between the representatives of the Republic of Colombia and of our
Government was ratified by the Senate. This treaty was entered into at
the urgent solicitation of the people of Colombia and after a body of
experts appointed by our Government especially to go into the matter of
the routes across the Isthmus had pronounced unanimously in favor of
the Panama route. In drawing up this treaty every concession was made
to the people and to the Government of Colombia. We were more than just
in dealing with them. Our generosity was such as to make it a serious
question whether we had not gone too far in their interest at the
expense of our own; for in our scrupulous desire to pay all possible
heed, not merely to the real but even to the fancied rights of our
weaker neighbor, who already owed so much to our protection and
forbearance, we yielded in all possible ways to her desires in drawing
up the treaty. Nevertheless the Government of Colombia not merely
repudiated the treaty, but repudiated it in such manner as to make it
evident by the time the Colombian Congress adjourned that not the
scantiest hope remained of ever getting a satisfactory treaty from
them. The Government of Colombia made the treaty, and yet when the
Colombian Congress was called to ratify it the vote against
ratification was unanimous. It does not appear that the Government made
any real effort to secure ratification.

Immediately after the adjournment of the Congress a revolution broke
out in Panama. The people of Panama had long been discontented with the
Republic of Colombia, and they had been kept quiet only by the prospect
of the conclusion of the treaty, which was to them a matter of vital
concern. When it became evident that the treaty was hopelessly lost,
the people of Panama rose literally as one man. Not a shot was fired by
a single man on the Isthmus in the interest of the Colombian
Government. Not a life was lost in the accomplishment of the
revolution. The Colombian troops stationed on the Isthmus, who had long
been unpaid, made common cause with the people of Panama, and with
astonishing unanimity the new Republic was started. The duty of the
United States in the premises was clear. In strict accordance with the
principles laid down by Secretaries Cass and Seward in the official
documents above quoted, the United States gave notice that it would
permit the landing of no expeditionary force, the arrival of which
would mean chaos and destruction along the line of the railroad and of
the proposed Canal, and an interruption of transit as an inevitable
consequence. The de facto Government of Panama was recognized in the
following telegram to Mr. Ehrman:

"The people of Panama have, by apparently unanimous movement, dissolved
their political connection with the Republic of Colombia and resumed
their independence. When you are satisfied that a de facto government,
republican in form and without substantial opposition from its own
people, has been established in the State of Panama, you will enter
into relations with it as the responsible government of the territory
and look to it for all due action to protect the persons and property
of citizens of the United States and to keep open the isthmian transit,
in accordance with the obligations of existing treaties governing the
relations of the United States to that Territory."

The Government of Colombia was notified of our action by the following
telegram to Mr. Beaupre:

"The people of Panama having, by an apparently unanimous movement,
dissolved their political connection with the Republic of Colombia and
resumed their independence, and having adopted a Government of their
own, republican in form, with which the Government of the United States
of America has entered into relations, the President of the United
States, in accordance with the ties of friendship which have so long
and so happily existed between the respective nations, most earnestly
commends to the Governments of Colombia and of Panama the peaceful and
equitable settlement of all questions at issue between them. He holds
that he is bound not merely by treaty obligations, but by the interests
of civilization, to see that the peaceful traffic of the world across
the Isthmus of Panama shall not longer be disturbed by a constant
succession of unnecessary and wasteful civil wars."

When these events happened, fifty-seven years had elapsed since the
United States had entered into its treaty with New Granada. During that
time the Governments of New Granada and of its successor, Colombia,
have been in a constant state of flux. The following is a partial list
of the disturbances on the Isthmus of Panama during the period in
question as reported to us by our consuls. It is not possible to give a
complete list, and some of the reports that speak of "revolutions" must
mean unsuccessful revolutions. May 22, 1850.--Outbreak; two Americans
killed. War vessel demanded to quell outbreak. October,
1850.--Revolutionary plot to bring about independence of the Isthmus.
July 22, 1851.--Revolution in four southern provinces. November 14,
1851.--Outbreak at Chagres. Man-of-war requested for Chagres. June 27,
1853.--Insurrection at Bogota, and consequent disturbance on Isthmus.
War vessel demanded. May 23, 1854--Political disturbances; war vessel
requested. June 28, 1854.--Attempted revolution. October 24,
1854.--Independence of Isthmus demanded by provincial legislature.
April, 1856.--Riot, and massacre of Americans. May 4, 1856.--Riot. May
18, 1856.--Riot. June 3, 1856.--Riot. October 2, 1856.--Conflict
between two native parties. United States forces landed. December 18,
1858.--Attempted secession of Panama. April, 1859.--Riots. September,
1860.--Outbreak. October 4, 1860.--Landing of United States forces in
consequence. May 23, 1861.--Intervention of the United States forces
required by intendente. October 2, 1861.--Insurrection and civil war.
April 4, 1862.--Measures to prevent rebels crossing Isthmus. June 13,
1862.--Mosquera's troops refused admittance to Panama. March,
1865.--Revolution, and United States troops landed. August,
1865.--Riots; unsuccessful attempt to invade Panama. March,
1866.--Unsuccessful revolution. April, 1867.--Attempt to overthrow
Government. August, 1867.--Attempt at revolution. July 5,
1868.--Revolution; provisional government inaugurated. August 29,
1868.--Revolution; provisional government overthrown. April,
1871.--Revolution; followed apparently by counter revolution. April,
1873.--Revolution and civil war which lasted to October, 1875. August,
1876.--Civil war which lasted until April, 1877. July,
1878.--Rebellion. December, 1878.--Revolt. April, 1879.--Revolution.
June, 1879.--Revolution. March, 1883.--Riot. May, 1883.--Riot. June,
1884.--Revolutionary attempt. December, 1884.--Revolutionary attempt.
January, 1885.--Revolutionary disturbances. March, 1885.--Revolution.
April, 1887.--Disturbance on Panama Railroad. November,
1887.--Disturbance on line of canal. January, 1889.--Riot. January,
1895.--Revolution which lasted until April. March, 1895.--Incendiary
attempt. October, 1899.--Revolution. February, 1900, to July,
1900.--Revolution. January, 1901--Revolution. July,
1901.--Revolutionary disturbances. September, 1901.--City of Colon
taken by rebels. March, 1902.--Revolutionary disturbances. July,
1902.--Revolution. The above is only a partial list of the revolutions,
rebellions, insurrections, riots, and other outbreaks that have
occurred during the period in question; yet they number 53 for the 57
years. It will be noted that one of them lasted for nearly three years
before it was quelled; another for nearly a year. In short, the
experience of over half a century has shown Colombia to be utterly
incapable of keeping order on the Isthmus. Only the active interference
of the United States has enabled her to preserve so much as a semblance
of sovereignty. Had it not been for the exercise by the United States
of the police power in her interest, her connection with the Isthmus
would have been sundered long ago. In 1856, in 1860, in 1873, in 1885,
in 1901, and again in 1902, sailors and marines from United States war
ships were forced to land in order to patrol the Isthmus, to protect
life and property, and to see that the transit across the Isthmus was
kept open. In 1861, in 1862, in 1885, and in 1900, the Colombian
Government asked that the United States Government would land troops to
protect its interests and maintain order on the Isthmus. Perhaps the
most extraordinary request is that which has just been received and
which runs as follows:

"Knowing that revolution has already commenced in Panama [an eminent
Colombian] says that if the Government of the United States will land
troops to preserve Colombian sovereignty, and the transit, if requested
by Colombian charge d'affaires, this Government will declare martial
law; and, by virtue of vested constitutional authority, when public
order is disturbed, will approve by decree ratification of the canal
treaty as signed; or, if the Government of the United States prefers,
will call extra session of the Congress--with new and friendly
members--next May to approve the treaty. [An eminent Colombian] has the
perfect confidence of vice-president, he says, and if it became
necessary will go to the Isthmus or send representatives there to
adjust matters along above lines to the satisfaction of the people
there."

This dispatch is noteworthy from two standpoints. Its offer of
immediately guaranteeing the treaty to us is in sharp contrast with the
positive and contemptuous refusal of the Congress which has just closed
its sessions to consider favorably such a treaty; it shows that the
Government which made the treaty really had absolute control over the
situation, but did not choose to exercise this control. The dispatch
further calls on us to restore order and secure Colombian supremacy in
the Isthmus from which the Colombian Government has just by its action
decided to bar us by preventing the construction of the canal.

The control, in the interest of the commerce and traffic of the whole
civilized world, of the means of undisturbed transit across the Isthmus
of Panama has become of transcendent importance to the United States.
We have repeatedly exercised this control by intervening in the course
of domestic dissension, and by protecting the territory from foreign
invasion. In 1853 Mr. Everett assured the Peruvian minister that we
should not hesitate to maintain the neutrality of the Isthmus in the
case of war between Peru and Colombia. In 1864 Colombia, which has
always been vigilant to avail itself of its privileges conferred by the
treaty, expressed its expectation that in the event of war between Peru
and Spain the United States would carry into effect the guaranty of
neutrality. There have been few administrations of the State Department
in which this treaty has not, either by the one side or the other, been
used as a basis of more or less important demands. It was said by Mr.
Fish in 1871 that the Department of State had reason to believe that an
attack upon Colombian sovereignty on the Isthmus had, on several
occasions, been averted by warning from this Government. In 1886, when
Colombia was under the menace of hostilities from Italy in the Cerruti
case, Mr. Bayard expressed the serious concern that the United States
could not but feel, that a European power should resort to force
against a sister republic of this hemisphere, as to the sovereign and
uninterrupted use of a part of whose territory we are guarantors under
the solemn faith of a treaty.

The above recital of facts establishes beyond question: First, that the
United States has for over half a century patiently and in good faith
carried out its obligations under the treaty of 1846; second, that when
for the first time it became possible for Colombia to do anything in
requital of the services thus repeatedly rendered to it for fifty-seven
years by the United States, the Colombian Government peremptorily and
offensively refused thus to do its part, even though to do so would
have been to its advantage and immeasurably to the advantage of the
State of Panama, at that time under its jurisdiction; third, that
throughout this period revolutions, riots, and factional disturbances
of every kind have occurred one after the other in almost uninterrupted
succession, some of them lasting for months and even for years, while
the central government was unable to put them down or to make peace
with the rebels; fourth, that these disturbances instead of showing any
sign of abating have tended to grow more numerous and more serious in
the immediate past; fifth, that the control of Colombia over the
Isthmus of Panama could not be maintained without the armed
intervention and assistance of the United States. In other words, the
Government of Colombia, though wholly unable to maintain order on the
Isthmus, has nevertheless declined to ratify a treaty the conclusion of
which opened the only chance to secure its own stability and to
guarantee permanent peace on, and the construction of a canal across,
the Isthmus.

Under such circumstances the Government of the United States would have
been guilty of folly and weakness, amounting in their sum to a crime
against the Nation, had it acted otherwise than it did when the
revolution of November 3 last took place in Panama. This great
enterprise of building the interoceanic canal can not be held up to
gratify the whims, or out of respect to the governmental impotence, or
to the even more sinister and evil political peculiarities, of people
who, though they dwell afar off, yet, against the wish of the actual
dwellers on the Isthmus, assert an unreal supremacy over the territory.
The possession of a territory fraught with such peculiar capacities as
the Isthmus in question carries with it obligations to mankind. The
course of events has shown that this canal can not be built by private
enterprise, or by any other nation than our own; therefore it must be
built by the United States.

Every effort has been made by the Government of the United States to
persuade Colombia to follow a course which was essentially not only to
our interests and to the interests of the world, but to the interests
of Colombia itself. These efforts have failed; and Colombia, by her
persistence in repulsing the advances that have been made, has forced
us, for the sake of our own honor, and of the interest and well-being,
not merely of our own people, but of the people of the Isthmus of
Panama and the people of the civilized countries of the world, to take
decisive steps to bring to an end a condition of affairs which had
become intolerable. The new Republic of Panama immediately offered to
negotiate a treaty with us. This treaty I herewith submit. By it our
interests are better safeguarded than in the treaty with Colombia which
was ratified by the Senate at its last session. It is better in its
terms than the treaties offered to us by the Republics of Nicaragua and
Costa Rica. At last the right to begin this great undertaking is made
available. Panama has done her part. All that remains is for the
American Congress to do its part, and forthwith this Republic will
enter upon the execution of a project colossal in its size and of
well-nigh incalculable possibilities for the good of this country and
the nations of mankind.

By the provisions of the treaty the United States guarantees and will
maintain the independence of the Republic of Panama. There is granted
to the United States in perpetuity the use, occupation, and control of
a strip ten miles wide and extending three nautical miles into the sea
at either terminal, with all lands lying outside of the zone necessary
for the construction of the canal or for its auxiliary works, and with
the islands in the Bay of Panama. The cities of Panama and Colon are
not embraced in the canal zone, but the United States assumes their
sanitation and, in case of need, the maintenance of order therein; the
United States enjoys within the granted limits all the rights, power,
and authority which it would possess were it the sovereign of the
territory to the exclusion of the exercise of sovereign rights by the
Republic. All railway and canal property rights belonging to Panama and
needed for the canal pass to the United States, including any property
of the respective companies in the cities of Panama and Colon; the
works, property, and personnel of the canal and railways are exempted
from taxation as well in the cities of Panama and Colon as in the canal
zone and its dependencies. Free immigration of the personnel and
importation of supplies for the construction and operation of the canal
are granted. Provision is made for the use of military force and the
building of fortifications by the United States for the protection of
the transit. In other details, particularly as to the acquisition of
the interests of the New Panama Canal Company and the Panama Railway by
the United States and the condemnation of private property for the uses
of the canal, the stipulations of the Hay-Herran treaty are closely
followed, while the compensation to be given for these enlarged grants
remains the same, being ten millions of dollars payable on exchange of
ratifications; and, beginning nine years from that date, an annual
payment of $250,000 during the life of the convention.