To the Senate and House of Representatives:

In submitting my annual message to Congress I have great satisfaction in
being able to say that the general conditions affecting the commercial and
industrial interests of the United States are in the highest degree
favorable. A comparison of the existing conditions with those of the most
favored period in the history of the country will, I believe, show that so
high a degree of prosperity and so general a diffusion of the comforts of
life were never before enjoyed by our people.

The total wealth of the country in 1860 was $16,159,616,068. In 1890 it
amounted to $62,610,000,000, an increase of 287 per cent.

The total mileage of railways in the United States in 1860 was 30,626. In
1890 it was 167,741, an increase of 448 per cent; and it is estimated that
there will be about 4,000 miles of track added by the close of the year
1892.

The official returns of the Eleventh Census and those of the Tenth Census
for seventy-five leading cities furnish the basis for the following
comparisons:

In 1880 the capital invested in manufacturing was $1,232,839,670.

In 1890 the capital invested in manufacturing was $2,900,735,884.

In 1880 the number of employees was 1,301,388.

In 1890 the number of employees was 2,251,134.

In 1880 the wages earned were $501,965,778.

In 1890 the wages earned were $1,221,170,454.

In 1880 the value of the product was $2,711,579,899.

In 1890 the value of the product was $4,860,286,837.

I am informed by the Superintendent of the Census that the omission of
certain industries in 1880 which were included in 1890 accounts in part for
the remarkable increase thus shown, but after making full allowance for
differences of method and deducting the returns for all industries not
included in the census of 1880 there remain in the reports from these
seventy-five cities an increase in the capital employed of $1,522,745,604,
in the value of the product of $2,024,236,166, in wages earned of
$677,943,929, and in the number of wage earners employed of 856,029. The
wage earnings not only show an increased aggregate, but an increase per
capita from $386 in 1880 to $547 in 1890, or 41.71 per cent.

The new industrial plants established since October 6, 1890, and up to
October 22, 1892, as partially reported in the American Economist, number
345, and the extension of existing plants 108; the new capital invested
amounts to $40,449,050, and the number of additional employees to 37,285.

The Textile World for July, 1892, states that during the first six months
of the present calendar year 135 new factories were built, of which 40 are
cotton mills, 48 knitting mills, 26 woolen mills, 15 silk mills, 4 plush
mills, and 2 linen mills. Of the 40 cotton mills 21 have been built in the
Southern States. Mr. A. B. Shepperson, of the New York Cotton Exchange,
estimates the number of working spindles in the United States on September
1, 1892, at 15,200,000, an increase of 660,000 over the year 1891. The
consumption of cotton by American mills in 1891 was 2,396,000 bales, and in
1892 2,584,000 bales, an increase of 188,000 bales. From the year 1869 to
1892, inclusive, there has been an increase in the consumption of cotton in
Europe of 92 per cent, while during the same period the increased
consumption in the United States has been about 150 per cent.

The report of Ira Ayer, special agent of the Treasury Department, shows
that at the date of September 30, 1892, there were 32 companies
manufacturing tin and terne plate in the United States and 14 companies
building new works for such manufacture. The estimated investment in
buildings and plants at the close of the fiscal year June 30, 1893, if
existing conditions were to be continued, was $5,000,000 and the estimated
rate of production 200,000,000 pounds per annum. The actual production for
the quarter ending September 30, 1892, was 10,952,725 pounds.

The report of Labor Commissioner Peck, of New York, shows that during the
year 1891, in about 6,000 manufacturing establishments in that State
embraced within the special inquiry made by him, and representing 67
different industries, there was a net increase over the year 1890 of
$30,315,130.68 in the value of the product and of $6,377,925.09 in the
amount of wages paid. The report of the commissioner of labor for the State
of Massachusetts shows that 3,745 industries in that State paid
$129,416,248 in wages during the year 1891, against $126,030,303 in 1890,
an increase of $3,335,945, and that there was an increase of $9,932,490 in
the amount of capital and of 7,346 in the number of persons employed in the
same period.

During the last six months of the year 1891 and the first six months of
1892 the total production of pig iron was 9,710,819 tons, as against
9,202,703 tons in the year 1890, which was the largest annual production
ever attained. For the same twelve months of 1891-92 the production of
Bessemer ingots was 3,878,581 tons, an increase of 189,710 gross tons over
the previously unprecedented yearly production of 3,688,871 gross tons in
1890. The production of Bessemer steel rails for the first six months of
1892 was 772,436 gross tons, as against 702,080 gross tons during the last
six months of the year 1891.

The total value of our foreign trade (exports and imports of merchandise)
during the last fiscal year was $1,857,680,610, an increase of $128,283,604
over the previous fiscal year. The average annual value of our imports and
exports of merchandise for the ten fiscal years prior to 1891 was
$1,457,322,019. It will be observed that our foreign trade for 1892
exceeded this annual average value by $400,358,591, an increase of 27.47
per cent. The significance and value of this increase are shown by the fact
that the excess in the trade of 1892 over 1891 was wholly in the value of
exports, for there was a decrease in the value of imports of $17,513,754.

The value of our exports during the fiscal year 1892 reached the highest
figure in the history of the Government, amounting to $1,030,278,148,
exceeding by $145,797,338 the exports of 1891 and exceeding the value of
the imports by $202,875,686. A comparison of the value of our exports for
1892 with the annual average for the ten years prior to 1891 shows an
excess of $265,142,651, or of 34.65 per cent. The value of our imports of
merchandise for 1892, which was $829,402,462, also exceeded the annual
average value of the ten years prior to 1891 by $135,215,940. During the
fiscal year 1892 the value of imports free of duty amounted to
$457,999,658, the largest aggregate in the history of our commerce. The
value of the imports of merchandise entered free of duty in 1892 was 55.35
per cent of the total value of imports, as compared with 43.35 per cent in
1891 and 33.66 per cent in 1890.

In our coastwise trade a most encouraging development is in progress, there
having been in the last four years an increase of 16 per cent. In internal
commerce the statistics show that no such period of prosperity has ever
before existed. The freight carried in the coastwise trade of the Great
Lakes in 1890 aggregated 28,295,959 tons. On the Mississippi, Missouri, and
Ohio rivers and tributaries in the same year the traffic aggregated
29,405,046 tons, and the total vessel tonnage passing through the Detroit
River during that year was 21,684,000 tons. The vessel tonnage entered and
cleared in the foreign trade of London during 1890 amounted to 13,480,767
tons, and of Liverpool 10,941,800 tons, a total for these two great
shipping ports of 24,422,568 tons, only slightly in excess of the vessel
tonnage passing through the Detroit River. And it should be said that the
season for the Detroit River was but 228 days, while of course in London
and Liverpool the season was for the entire year. The vessel tonnage
passing through the St. Marys Canal for the fiscal year 1892 amounted to
9,828,874 tons, and the freight tonnage of the Detroit River is estimated
for that year at 25,000,000 tons, against 23,209,619 tons in 1891. The
aggregate traffic on our railroads for the year 1891 amounted to
704,398,609 tons of freight, compared with 691,344,437 tons in 1890, an
increase of 13,054,172 tons.

Another indication of the general prosperity of the country is found in the
fact that the number of depositors in savings banks increased from 693,870
in 1860 to 4,258,893 in 1890, an increase of 513 per cent, and the amount
of deposits from $149,277,504 in 1860 to $1,524,844,506 in 1890, an
increase of 921 per cent. In 1891 the amount of deposits in savings banks
was $1,623,079,749. It is estimated that 90 per cent of these deposits
represent the savings of wage earners. The bank clearances for nine months
ending September 30, 1891, amounted to $41,049,390,08. For the same months
in 1892 they amounted to $45,189,601,947, an excess for the nine months of
$4,140,211,139.

There never has been a time in our history when work was so abundant or
when wages were as high, whether measured by the currency in which they are
paid or by their power to supply the necessaries and comforts of life. It
is true that the market prices of cotton and wheat have been low. It is one
of the unfavorable incidents of agriculture that the farmer can not produce
upon orders. He must sow and reap in ignorance of the aggregate production
of the year, and is peculiarly subject to the depreciation which follows
overproduction. But while the fact I have stated is true as to the crops
mentioned, the general average of prices has been such as to give to
agriculture a fair participation in the general prosperity. The value of
our total farm products has increased from $1,363,646,866 in 1860 to
$4,500,000,000 in 1891, as estimated by statisticians, an increase of 230
per cent. The number of hogs January 1, 1891, was 50,625,106 and their
value $210,193,925; on January 1, 1892, the number was 52,398,019 and the
value $241,031,415. On January 1, 1891, the number of cattle was 36,875,648
and the value $544,127,908; on January 1 ,1892, the number was 37,651,239
and the value $570,749,155.

If any are discontented with their state here, if any believe that wages or
prices, the returns for honest toil, are inadequate, they should not fail
to remember that there is no other country in the world where the
conditions that seem to them hard would not be accepted as highly
prosperous. The English agriculturist would be glad to exchange the returns
of his labor for those of the American farmer and the Manchester workmen
their wages for those of their fellows at Fall River.

I believe that the protective system, which has now for something more than
thirty years continuously prevailed in our legislation, has been a mighty
instrument for the development of our national wealth and a most powerful
agency in protecting the homes of our workingmen from the invasion of want.
I have felt a most solicitous interest to preserve to our working people
rates of wages that would not only give daily bread but supply a
comfortable margin for those home attractions and family comforts and
enjoyments without which life is neither hopeful nor sweet. They are
American citizens--a part of the great people for whom our Constitution and
Government were framed and instituted--and it can not be a perversion of
that Constitution to so legislate as to preserve in their homes the
comfort, independence, loyalty, and sense of interest in the Government
which are essential to good citizenship in peace, and which will bring this
stalwart throng, as in 1861, to the defense of the flag when it is
assailed.

It is not my purpose to renew here the argument in favor of a protective
tariff. The result of the recent election must be accepted as having
introduced a new policy. We must assume that the present tariff,
constructed upon the lines of protection, is to be repealed and that there
is to be substituted for it a tariff law constructed solely with reference
to revenue; that no duty is to be higher because the increase will keep
open an American mill or keep up the wages of an American workman, but that
in every case such a rate of duty is to be imposed as will bring to the
Treasury of the United States the largest returns of revenue. The
contention has not been between schedules, but between principles, and it
would be offensive to suggest that the prevailing party will not carry into
legislation the principles advocated by it and the pledges given to the
people. The tariff bills passed by the House of Representatives at the last
session were, as I suppose, even in the opinion of their promoters,
inadequate, and justified only by the fact that the Senate and House of
Representatives were not in accord and that a general revision could not
therefore be undertaken.

I recommend that the whole subject of tariff revision be left to the
incoming Congress. It is matter of regret that this work must be delayed
for at least three months, for the threat of great tariff changes
introduces so much uncertainty that an amount, not easily estimated, of
business inaction and of diminished production will necessarily result. It
is possible also that this uncertainty may result in decreased revenues
from customs duties, for our merchants will make cautious orders for
foreign goods in view of the prospect of tariff reductions and the
uncertainty as to when they will take effect. Those who have advocated a
protective tariff can well afford to have their disastrous forecasts of a
change of policy disappointed. If a system of customs duties can be framed
that will set the idle wheels and looms of Europe in motion and crowd our
warehouses with foreign-made goods and at the same time keep our own mills
busy; that will give us an increased participation in the "markets of the
world" of greater value than the home market we surrender; that will give
increased work to foreign workmen upon products to be consumed by our
people without diminishing the amount of work to be done here; that will
enable the American manufacturer to pay to his workmen from 50 to 100 per
cent more in wages than is paid in the foreign mill, and yet to compete in
our market and in foreign markets with the foreign producer; that will
further reduce the cost of articles of wear and food without reducing the
wages of those who produce them; that can be celebrated, after its effects
have been realized, as its expectation has been in European as well as in
American cities, the authors and promoters of it will be entitled to the
highest praise. We have had in our history several experiences of the
contrasted effects of a revenue and of a protective tariff, but this
generation has not felt them, and the experience of one generation is not
highly instructive to the next. The friends of the protective system with
undiminished confidence in the principles they have advocated will await
the results of the new experiment.

The strained and too often disturbed relations existing between the
employees and the employers in our great manufacturing establishments have
not been favorable to a calm consideration by the wage earner of the effect
upon wages of the protective system. The facts that his wages were the
highest paid in like callings in the world and that a maintenance of this
rate of wages in the absence of protective duties upon the product of his
labor was impossible were obscured by the passion evoked by these contests.
He may now be able to review the question in the light of his personal
experience under the operation of a tariff for revenue only. If that
experience shall demonstrate that present rates of wages are thereby
maintained or increased, either absolutely or in their purchasing power,
and that the aggregate volume of work to be done in this country is
increased or even maintained, so that there are more or as many days' work
in a year, at as good or better wages, for the American workmen as has been
the case under the protective system, everyone will rejoice. A general
process of wage reduction can not be contemplated by any patriotic citizen
without the gravest apprehension. It may be, indeed I believe is, possible
for the American manufacturer to compete successfully with his foreign
rival in many branches of production without the defense of protective
duties if the pay rolls are equalized; but the conflict that stands between
the producer and that result and the distress of our working people when it
is attained are not pleasant to contemplate. The Society of the Unemployed,
now holding its frequent and threatening parades in the streets of foreign
cities, should not be allowed to acquire an American domicile.

The reports of the heads of the several Executive Departments, which are
herewith submitted, have very naturally included a resume of the whole work
of the Administration with the transactions of the last fiscal year. The
attention not only of Congress but of the country is again invited to the
methods of administration which have been pursued and to the results which
have been attained. Public revenues amounting to $1,414,079,292.28 have
been collected and disbursed without loss from misappropriation, without a
single defalcation of such importance as to attract the public attention,
and at a diminished per cent of cost for collection. The public business
has been transacted not only with fidelity, but progressively and with a
view to giving to the people in the fullest possible degree the benefits of
a service established and maintained for their protection and comfort.

Our relations with other nations are now undisturbed by any serious
controversy. The complicated and threatening differences with Germany and
England relating to Samoan affairs, with England in relation to the seal
fisheries in the Bering Sea, and with Chile growing out of the Baltimore
affair have been adjusted.

There have been negotiated and concluded, under section 3 of the tariff
law, commercial agreements relating to reciprocal trade with the following
countries: Brazil, Dominican Republic, Spain for Cuba and Puerto Rico,
Guatemala, Salvador, the German Empire, Great Britain for certain West
Indian colonies and British Guiana, Nicaragua, Honduras, and
Austria-Hungary.

Of these, those with Guatemala, Salvador, the German Empire, Great Britain,
Nicaragua, Honduras, and Austria-Hungary have been concluded since my last
annual message. Under these trade arrangements a free or favored admission
has been secured in every case for an important list of American products.
Especial care has been taken to secure markets for farm products, in order
to relieve that great underlying industry of the depression which the lack
of an adequate foreign market for our surplus often brings. An opening has
also been made for manufactured products that will undoubtedly, if this
policy is maintained, greatly augment our export trade. The full benefits
of these arrangements can not be realized instantly. New lines of trade are
to be opened. The commercial traveler must survey the field. The
manufacturer must adapt his goods to the new markets and facilities for
exchange must be established. This work has been well begun, our merchants
and manufacturers having entered the new fields with courage and
enterprise. In the case of food products, and especially with Cuba, the
trade did not need to wait, and the immediate results have been most
gratifying. If this policy and these trade arrangements can be continued in
force and aided by the establishment of American steamship lines, I do not
doubt that we shall within a short period secure fully one-third of the
total trade of the countries of Central and South America, which now
amounts to about $600,000,000 annually. In 1885 we had only 8 per cent of
this trade.

The following statistics show the increase in our trade with the countries
with which we have reciprocal trade agreements from the date when such
agreements went into effect up to September 30, 1892, the increase being in
some almost wholly and in others in an important degree the result of these
agreements:

The domestic exports to Germany and Austria-Hungary have increased in value
from $47,673,756 to $57,993,064, an increase of $10,319,308, or 21.63 per
cent. With American countries the value of our exports has increased from
$44,160,285 to $54,613,598, an increase of $10,453,313, or 23.67 per cent.
The total increase in the value of exports to all the countries with which
we have reciprocity agreements has been $20,772,621. This increase is
chiefly in wheat, flour, meat, and dairy products and in manufactures of
iron and steel and lumber. There has been a large increase in the value of
imports from all these countries since the commercial agreements went into
effect, amounting to $74,294,525, but it has been entirely in imports from
the American countries, consisting mostly of sugar, coffee, india rubber,
and crude drugs. The alarmed attention of our European competitors for the
South American market has been attracted to this new American policy and to
our acquisition and their loss of South American trade.

A treaty providing for the arbitration of the dispute between Great Britain
and the United States as to the killing of seals in the Bering Sea was
concluded on the 29th of February last. This treaty was accompanied by an
agreement prohibiting pelagic sealing pending the arbitration, and a
vigorous effort was made during this season to drive out all poaching
sealers from the Bering Sea. Six naval vessels, three revenue cutters, and
one vessel from the Fish Commission, all under the command of Commander
Evans, of the Navy, were sent into the sea, which was systematically
patrolled. Some seizures were made, and it is believed that the catch in
the Bering Sea by poachers amounted to less than 500 seals. It is true,
however, that in the North Pacific, while the seal herds were on their way
to the passes between the Aleutian Islands, a very large number, probably
35,000, were taken. The existing statutes of the United States do not
restrain our citizens from taking seals in the Pacific Ocean, and perhaps
should not unless the prohibition can be extended to the citizens of other
nations. I recommend that power be given to the President by proclamation
to prohibit the taking of seals in the North Pacific by American vessels in
case, either as the result of the findings of the Tribunal of Arbitration
or otherwise, the restraints can be applied to the vessels of all
countries. The case of the United States for the Tribunal of Arbitration
has been prepared with great care and industry by the Hon. John W. Foster,
and the counsel who represent this Government express confidence that a
result substantially establishing our claims and preserving this great
industry for the benefit of all nations will be attained.

During the past year a suggestion was received through the British minister
that the Canadian government would like to confer as to the possibility of
enlarging upon terms of mutual advantage the commercial exchanges of Canada
and of the United States, and a conference was held at Washington, with Mr.
Blaine acting for this Government and the British minister at this capital
and three members of the Dominion cabinet acting as commissioners on the
part of Great Britain. The conference developed the fact that the Canadian
government was only prepared to offer to the United States in exchange for
the concessions asked the admission of natural products. The statement was
frankly made that favored rates could not be given to the United States as
against the mother country. This admission, which was foreseen, necessarily
terminated the conference upon this question. The benefits of an exchange
of natural products would be almost wholly with the people of Canada. Some
other topics of interest were considered in the conference, and have
resulted in the making of a convention for examining the Alaskan boundary
and the waters of Passamaquoddy Bay adjacent to Eastport, Me., and in the
initiation of an arrangement for the protection of fish life in the
coterminous and neighboring waters of our northern border.

The controversy as to tolls upon the Welland Canal, which was presented to
Congress at the last session by special message, having failed of
adjustment, I felt constrained to exercise the authority conferred by the
act of July 26, 1892, and to proclaim a suspension of the free use of St.
Marys Falls Canal to cargoes in transit to ports in Canada. The Secretary
of the Treasury established such tolls as were thought to be equivalent to
the exactions unjustly levied upon our commerce in the Canadian canals.

If, as we must suppose, the political relations of Canada and the
disposition of the Canadian government are to remain unchanged, a somewhat
radical revision of our trade relations should, I think, be made. Our
relations must continue to be intimate, and they should be friendly. I
regret to say, however, that in many of the controversies, notably those as
to the fisheries on the Atlantic, the sealing interests on the Pacific, and
the canal tolls, our negotiations with Great Britain have continuously been
thwarted or retarded by unreasonable and unfriendly objections and protests
from Canada in the matter of the canal tolls our treaty rights were
flagrantly disregarded. It is hardly too much to say that the Canadian
Pacific and other railway lines which parallel our northern boundary are
sustained by commerce having either its origin or terminus, or both, in the
United States. Canadian railroads compete with those of the United States
for our traffic, and without the restraints of our interstate-commerce act.
Their cars pass almost without detention into and out of our territory.

The Canadian Pacific Railway brought into the United States from China and
Japan via British Columbia during the year ended June 30, 1892, 23,239,689
pounds of freight, and it carried from the United States, to be shipped to
China and Japan via British Columbia, 24,068,346 pounds of freight. There
were also shipped from the United States over this road from Eastern ports
of the United States to our Pacific ports during the same year 13,912,073
pounds of freight, and there were received over this road at the United
States Eastern ports from ports on the Pacific Coast 13,293,315 pounds of
freight. Mr. Joseph Nimmo, Jr., former chief of the Bureau of Statistics,
when before the Senate Select Committee on Relations with Canada, April 26,
1890, said that "the value of goods thus transported between different
points in the United States across Canadian territory probably amounts to
$100,000,000 a year."

There is no disposition on the part of the people or Government of the
United States to interfere in the smallest degree with the political
relations of Canada. That question is wholly with her own people. It is
time for us, however, to consider whether, if the present state of things
and trend of things is to continue, our interchanges upon lines of land
transportation should not be put upon a different basis and our entire
independence of Canadian canals and of the St. Lawrence as an outlet to the
sea secured by the construction of an American canal around the Falls of
Niagara and the opening of ship communication between the Great Lakes and
one of our own seaports. We should not hesitate to avail ourselves of our
great natural trade advantages. We should withdraw the support which is
given to the railroads and steamship lines of Canada by a traffic that
properly belongs to us and no longer furnish the earnings which lighten the
otherwise crushing weight of the enormous public subsidies that have been
given to them. The subject of the power of the Treasury to deal with this
matter without further legislation has been under consideration, but
circumstances have postponed a conclusion. It is probable that a
consideration of the propriety of a modification or abrogation of the
article of the treaty of Washington relating to the transit of goods in
bond is involved in any complete solution of the question.

Congress at the last session was kept advised of the progress of the
serious and for a time threatening difference between the United States and
Chile. It gives me now great gratification to report that the Chilean
Government in a most friendly and honorable spirit has tendered and paid as
an indemnity to the families of the sailors of the Baltimore who were
killed and to those who were injured in the outbreak in the city of
Valparaiso the sum of $75,000. This has been accepted not only as an
indemnity for a wrong done, but as a most gratifying evidence that the
Government of Chile rightly appreciates the disposition of this Government
to act in a spirit of the most absolute fairness and friendliness in our
intercourse with that brave people. A further and conclusive evidence of
the mutual respect and confidence now existing is furnished by the fact
that a convention submitting to arbitration the mutual claims of the
citizens of the respective Governments has been agreed upon. Some of these
claims have been pending for many years and have been the occasion of much
unsatisfactory diplomatic correspondence.

I have endeavored in every way to assure our sister Republics of Central
and South America that the United States Government and its people have
only the most friendly disposition toward them all. We do not covet their
territory. We have no disposition to be oppressive or exacting in our
dealings with any of them, even the weakest. Our interests and our hopes
for them all lie in the direction of stable governments by their people and
of the largest development of their great commercial resources. The mutual
benefits of enlarged commercial exchanges and of a more familiar and
friendly intercourse between our peoples we do desire, and in this have
sought their friendly cooperation.

I have believed, however, while holding these sentiments in the greatest
sincerity, that we must insist upon a just responsibility for any injuries
inflicted upon our official representatives or upon our citizens. This
insistence, kindly and justly but firmly made, will, I believe, promote
peace and mutual respect.

Our relations with Hawaii have been such as to attract an increased
interest, and must continue to do so. I deem it of great importance that
the projected submarine cable, a survey for which has been made, should be
promoted. Both for naval and commercial uses we should have quick
communication with Honolulu. We should before this have availed ourselves
of the concession made many years ago to this Government for a harbor and
naval station at Pearl River. Many evidences of the friendliness of the
Hawaiian Government have been given in the past, and it is gratifying to
believe that the advantage and necessity of a continuance of very close
relations is appreciated.

The friendly act of this Government in expressing to the Government of
Italy its reprobation and abhorrence of the lynching of Italian subjects in
New Orleans by the payment of 125,000 francs, or $24,330.90, was accepted
by the King of Italy with every manifestation of gracious appreciation, and
the incident has been highly promotive of mutual respect and good will.

In consequence of the action of the French Government in proclaiming a
protectorate over certain tribal districts of the west coast of Africa
eastward of the San Pedro River, which has long been regarded as the
southeastern boundary of Liberia, I have felt constrained to make protest
against this encroachment upon the territory of a Republic which was
rounded by citizens of the United States and toward which this country has
for many years held the intimate relation of a friendly counselor.

The recent disturbances of the public peace by lawless foreign marauders on
the Mexican frontier have afforded this Government an opportunity to
testify its good will for Mexico and its earnest purpose to fulfill the
obligations of international friendship by pursuing and dispersing the evil
doers. The work of relocating the boundary of the treaty of Guadalupe
Hidalgo westward from El Paso is progressing favorably.

Our intercourse with Spain continues on a friendly footing. I regret,
however, not to be able to report as yet the adjustment of the claims of
the American missionaries arising from the disorders at Ponape, in the
Caroline Islands, but I anticipate a satisfactory adjustment in view of
renewed and urgent representations to the Government at Madrid.

The treatment of the religious and educational establishments of American
citizens in Turkey has of late called for a more than usual share of
attention. A tendency to curtail the toleration which has so beneficially
prevailed is discernible and has called forth the earnest remonstrance of
this Government. Harassing regulations in regard to schools and churches
have been attempted in certain localities, but not without due protest and
the assertion of the inherent and conventional rights of our countrymen.
Violations of domicile and search of the persons and effects of citizens of
the United States by apparently irresponsible officials in the Asiatic
vilayets have from time to time been reported. An aggravated instance of
injury to the property of an American missionary at Bourdour, in the
province of Konia, called forth an urgent claim for reparation, which I am
pleased to say was promptly heeded by the Government of the Porte.
Interference with the trading ventures of our citizens in Asia Minor is
also reported, and the lack of consular representation in that region is a
serious drawback to instant and effective protection. I can not believe
that these incidents represent a settled policy, and shall not cease to
urge the adoption of proper remedies.

International copyright has been extended to Italy by proclamation in
conformity with the act of March 3, 1891, upon assurance being given that
Italian law permits to citizens of the United States the benefit of
copyright on substantially the same basis as to subjects of Italy. By a
special convention proclaimed January 15, 1892, reciprocal provisions of
copyright have been applied between the United States and Germany.
Negotiations are in progress with other countries to the same end.

I repeat with great earnestness the recommendation which I have made in
several previous messages that prompt and adequate support be given to the
American company engaged in the construction of the Nicaragua ship canal.
It is impossible to overstate the value from every standpoint of this great
enterprise, and I hope that there may be time, even in this Congress, to
give to it an impetus that will insure the early completion of the canal
and secure to the United States its proper relation to it when completed.

The Congress has been already advised that the invitations of this
Government for the assembling of an international monetary conference to
consider the question of an enlarged use of silver were accepted by the
nations to which they were addressed. The conference assembled at Brussels
on the 22d of November, and has entered upon the consideration of this
great question. I have not doubted, and have taken occasion to express that
belief as well in the invitations issued for this conference as in my
public messages, that the free coinage of silver upon an agreed
international ratio would greatly promote the interests of our people and
equally those of other nations. It is too early to predict what results may
be accomplished by the conference. If any temporary check or delay
intervenes, I believe that very soon commercial conditions will compel the
now reluctant governments to unite with us in this movement to secure the
enlargement of the volume of coined money needed for the transaction of the
business of the world.

The report of the Secretary of the Treasury will attract especial interest
in view of the many misleading statements that have been made as to the
state of the public revenues. Three preliminary facts should not only be
stated but emphasized before looking into details: First, that the public
debt has been reduced since March 4, 1889, $259,074,200, and the annual
interest charge $11,684,469; second, that there have been paid out for
pensions during this Administration up to November 1, 1892,
$432,564,178.70, an excess of $114,466,386.09 over the sum expended during
the period from March 1, 1885, to March 1, 1889; and, third, that under the
existing tariff up to December 1 about $93,000,000 of revenue which would
have been collected upon imported sugars if the duty had been maintained
has gone into the pockets of the people, and not into the public Treasury,
as before. If there are any who still think that the surplus should have
been kept out of circulation by hoarding it in the Treasury, or deposited
in favored banks without interest while the Government continued to pay to
these very banks interest upon the bonds deposited as security for the
deposits, or who think that the extended pension legislation was a public
robbery, or that the duties upon sugar should have been maintained, I am
content to leave the argument where it now rests while we wait to see
whether these criticisms will take the form of legislation.

The revenues for the fiscal year ending June 30, 1892, from all sources
were $425,868,260.22, and the expenditures for all purposes were
$415,953,806.56, leaving a balance of $9,914,453.66. There were paid during
the year upon the public debt $40,570,467.98. The surplus in the Treasury
and the bank redemption fund passed by the act of July 14, 1890, to the
general fund furnished in large part the cash available and used for the
payments made upon the public debt. Compared with the year 1891, our
receipts from customs duties fell off $42,069,241.08, while our receipts
from internal revenue increased $8,284,823.13, leaving the net loss of
revenue from these principal sources $33,784,417.95. The net loss of
revenue from all sources was $32,675,972.81.

The revenues, estimated and actual, for the fiscal year ending June 30,
1893, are placed by the Secretary at $463,336,350.44, and the expenditures
at $461,336,350.44, showing a surplus of receipts over expenditures of
$2,000,000. The cash balance in the Treasury at the end of the fiscal year
it is estimated will be $20,992,377.03. So far as these figures are based
upon estimates of receipts and expenditures for the remaining months of the
current fiscal year, there are not only the usual elements of uncertainty,
but some added elements. New revenue legislation, or even the expectation
of it, may seriously reduce the public revenues during the period of
uncertainty and during the process of business adjustment to the new
conditions when they become known. But the Secretary has very wisely
refrained from guessing as to the effect of possible changes in our revenue
laws, since the scope of those changes and the time of their taking effect
can not in any degree be forecast or foretold by him. His estimates must be
based upon existing laws and upon a continuance of existing business
conditions, except so far as these conditions may be affected by causes
other than new legislation.

The estimated receipts for the fiscal year ending June 30, 1894, are
$490,121,365.38, and the estimated appropriations $457,261,335.33, leaving
an estimated surplus of receipts over expenditures of $32,860,030.05. This
does not include any payment to the sinking fund. In the recommendation of
the Secretary that the sinking-fund law be repealed I concur. The
redemption of bonds since the passage of the law to June 30, 1892, has
already exceeded the requirements by the sum of $990,510,681.49. The
retirement of bonds in the future before maturity should be a matter of
convenience, not of compulsion. We should not collect revenue for that
purpose, but only use any casual surplus. To the balance of $32,860,030.05
of receipts over expenditures for the year 1894 should be added the
estimated surplus at the beginning of the year, $20,992,377.03, and from
this aggregate there must be deducted, as stated by the Secretary, about
$44,000,000 of estimated unexpended appropriations.

The public confidence in the purpose and ability of the Government to
maintain the parity of all of our money issues, whether coin or paper, must
remain unshaken. The demand for gold in Europe and the consequent calls
upon us are in a considerable degree the result of the efforts of some of
the European Governments to increase their gold reserves, and these efforts
should be met by appropriate legislation on our part. The conditions that
have created this drain of the Treasury gold are in an important degree
political, and not commercial. In view of the fact that a general revision
of our revenue laws in the near future seems to be probable, it would be
better that any changes should be a part of that revision rather than of a
temporary nature.

During the last fiscal year the Secretary purchased under the act of July
14, 1890, 54,355,748 ounces of silver and issued in payment therefor
$51,106,608 in notes. The total purchases since the passage of the act have
been 120,479,981 ounces and the aggregate of notes issued $116,783,590. The
average price paid for silver during the year was 94 cents per ounce, the
highest price being $1.02 3/4 July 1, 1891, and the lowest 83 cents March
21, 1892. In view of the fact that the monetary conference is now sitting
and that no conclusion has yet been reached, I withhold any recommendation
as to legislation upon this subject.

The report of the Secretary of War brings again to the attention of
Congress some important suggestions as to the reorganization of the
infantry and artillery arms of the service, which his predecessors have
before urgently presented. Our Army is small, but its organization should
all the more be put upon the most approved modern basis. The conditions
upon what we have called the "frontier" have heretofore required the
maintenance of many small posts, but now the policy of concentration is
obviously the right one. The new posts should have the proper strategic
relations to the only "frontiers" we now have--those of the seacoast and of
our northern and part of our southern boundary. I do not think that any
question of advantage to localities or to States should determine the
location of the new posts. The reorganization and enlargement of the Bureau
of Military Information which the Secretary has effected is a work the
usefulness of which will become every year more apparent. The work of
building heavy guns and the construction of coast defenses has been well
begun and should be carried on without check.

The report of the Attorney-General is by law submitted directly to
Congress, but I can not refrain from saying that he has conducted the
increasing work of the Department of Justice with great professional skill.
He has in several directions secured from the courts decisions giving
increased protection to the officers of the United States and bringing some
classes of crime that escaped local cognizance and punishment into the
tribunals of the United States, where they could be tried with
impartiality.

The numerous applications for Executive clemency presented in behalf of
persons convicted in United States courts and given penitentiary sentences
have called my attention to a fact referred to by the Attorney-General in
his report, namely, that a time allowance for good behavior for such
prisoners is prescribed by the Federal statutes only where the State in
which the penitentiary is located has made no such provision. Prisoners are
given the benefit of the provisions of the State law regulating the
penitentiary to which they may be sent. These are various, some perhaps too
liberal and some perhaps too illiberal. The result is that a sentence for
five years means one thing if the prisoner is sent to one State for
confinement and quite a different thing if he is sent to another. I
recommend that a uniform credit for good behavior be prescribed by
Congress.

I have before expressed my concurrence in the recommendation of the
Attorney-General that degrees of murder should be recognized in the Federal
statutes, as they are, I believe, in all the States. These grades are
rounded on correct distinctions in crime. The recognition of them would
enable the courts to exercise some discretion in apportioning punishment
and would greatly relieve the Executive of what is coming to be a very
heavy burden--the examination of these cases on application for
commutation.

The aggregate of claims pending against the Government in the Court of
Claims is enormous. Claims to the amount of nearly $400,000,000 for the
taking of or injury to the property of persons claiming to be loyal during
the war are now before that court for examination. When to these are added
the Indian depredation claims and the French spoliation claims, an
aggregate is reached that is indeed startling. In the defense of all these
cases the Government is at great disadvantage. The claimants have preserved
their evidence, whereas the agents of the Government are sent into the
field to rummage for what they can find. This difficulty is peculiarly
great where the fact to be established is the disloyalty of the claimant
during the war. If this great threat against our revenues is to have no
other check, certainly Congress should supply the Department of Justice
with appropriations sufficiently liberal to secure the best legal talent in
the defense of these claims and to pursue its vague search for evidence
effectively.

The report of the Postmaster-General shows a most gratifying increase and a
most efficient and progressive management of the great business of that
Department. The remarkable increase in revenues, in the number of
post-offices, and in the miles of mail carriage furnishes further evidence
of the high state of prosperity which our people are enjoying. New offices
mean new hamlets and towns, new routes mean the extension of our border
settlements, and increased revenues mean an active commerce. The
Postmaster-General reviews the whole period of his administration of the
office and brings some of his statistics down to the month of November
last. The postal revenues have increased during the last year nearly
$5,000,000. The deficit for the year ending June 30, 1892, is $848,341 less
than the deficiency of the preceding year. The deficiency of the present
fiscal year it is estimated will be reduced to $1,552,423, which will not
only be extinguished during the next fiscal year but a surplus of nearly
$1,000,000 should then be shown. In these calculations the payments to be
made under the contracts for ocean mail service have not been included.
There have been added 1,590 new mail routes during the year, with a mileage
of 8,563 miles, and the total number of new miles of mail trips added
during the year is nearly 17,000,000. The number of miles of mail journeys
added during the last four years is about 76,000,000, this addition being
21,000,000 miles more than were in operation in the whole country in 1861.

The number of post-offices has been increased by 2,790 during the year, and
during the past four years, and up to October 29 last, the total increase
in the number of offices has been nearly 9,000. The number of free-delivery
offices has been nearly doubled in the last four years, and the number of
money-order offices more than doubled within that time.

For the three years ending June 30, 1892, the postal revenue amounted to
$197,744,359, which was an increase of $52,263,150 over the revenue for the
three years ending June 30, 1888, the increase during the last three years
being more than three and a half times as great as the increase during the
three years ending June 30, 1888. No such increase as that shown for these
three years has ever previously appeared in the revenues of the Department.
The Postmaster-General has extended to the post-offices in the larger
cities the merit system of promotion introduced by my direction into the
Departments here, and it has resulted there, as in the Departments, in a
larger volume of work and that better done.

Ever since our merchant marine was driven from the sea by the rebel
cruisers during the War of the Rebellion the United States has been paying
an enormous annual tribute to foreign countries in the shape of freight and
passage moneys. Our grain and meats have been taken at our own docks and
our large imports there laid down by foreign shipmasters. An increasing
torrent of American travel to Europe has contributed a vast sum annually to
the dividends of foreign shipowners. The balance of trade shown by the
books of our custom-houses has been very largely reduced and in many years
altogether extinguished by this constant drain. In the year 1892 only 12.3
per cent of our imports were brought in American vessels. These great
foreign steamships maintained by our traffic are many of them under
contracts with their respective Governments by which in time of war they
will become a part of their armed naval establishments. Profiting by our
commerce in peace, they will become the most formidable destroyers of our
commerce in time of war. I have felt, and have before expressed the
feeling, that this condition of things was both intolerable and
disgraceful. A wholesome change of policy, and one having in it much
promise, as it seems to me, was begun by the law of March 3, 1891. Under
this law contracts have been made by the Postmaster-General for eleven mail
routes. The expenditure involved by these contracts for the next fiscal
year approximates $954,123.33. As one of the results already reached
sixteen American steamships, of an aggregate tonnage of 57,400 tons,
costing $7,400,000, have been built or contracted to be built in American
shipyards.

The estimated tonnage of all steamships required under existing contracts
is 165,802, and when the full service required by these contracts is
established there will be forty-one mail steamers under the American flag,
with the probability of further necessary additions in the Brazilian and
Argentine service. The contracts recently let for transatlantic service
will result in the construction of five ships of 10,000 tons each, costing
$9,000,000 to $10,000,000, and will add, with the City of New York and City
of Paris, to which the Treasury Department was authorized by legislation at
the last session to give American registry, seven of the swiftest vessels
upon the sea to our naval reserve. The contracts made with the lines
sailing to Central and South American ports have increased the frequency
and shortened the time of the trips, added new ports of call, and sustained
some lines that otherwise would almost certainly have been withdrawn. The
service to Buenos Ayres is the first to the Argentine Republic under the
American flag. The service to Southampton, Boulogne, and Antwerp is also
new, and is to be begun with the steamships City of New York and City of
Paris in February next.

I earnestly urge the continuance of the policy inaugurated by this
legislation, and that the appropriations required to meet the obligations
of the Government under the contracts may be made promptly, so that the
lines that have entered into these engagements may not be embarrassed. We
have had, by reason of connections with the transcontinental railway lines
constructed through our own territory, some advantages in the ocean trade
of the Pacific that we did not possess on the Atlantic. The construction of
the Canadian Pacific Railway and the establishment under large subventions
from Canada and England of fast steamship service from Vancouver with Japan
and China seriously threaten our shipping interests in the Pacific. This
line of English steamers receives, as is stated by the Commissioner of
Navigation, a direct subsidy of $400,000 annually, or $30,767 per trip for
thirteen voyages, in addition to some further aid from the Admiralty in
connection with contracts under which the vessels may be used for naval
purposes. The competing American Pacific mail line under the act of March
3, 1891, receives only $6,389 per round trip.

Efforts have been making within the last year, as I am informed, to
establish under similar conditions a line between Vancouver and some
Australian port, with a view of seizing there a trade in which we have had
a large interest. The Commissioner of Navigation states that a very large
per cent of our imports from Asia are now brought to us by English
steamships and their connecting railways in Canada. With a view of
promoting this trade, especially in tea, Canada has imposed a
discriminating duty of 10 per cent upon tea and coffee brought into the
Dominion from the United States. If this unequal contest between American
lines without subsidy, or with diminished subsidies, and the English
Canadian line to which I have referred is to continue, I think we should at
least see that the facilities for customs entry and transportation across
our territory are not such as to make the Canadian route a favored one, and
that the discrimination as to duties to which I have referred is met by a
like discrimination as to the importation of these articles from Canada.

No subject, I think, more nearly touches the pride, the power, and the
prosperity of our country than this of the development of our merchant
marine upon the sea. If we could enter into conference with other
competitors and all would agree to withhold government aid, we could
perhaps take our chances with the rest; but our great competitors have
established and maintained their lines by government subsidies until they
now have practically excluded us from participation. In my opinion no
choice is left to us but to pursue, moderately at least, the same lines.

The report of the Secretary of the Navy exhibits great progress in the
construction of our new Navy. When the present Secretary entered upon his
duties, only 3 modern steel vessels were in commission. The vessels since
put in commission and to be put in commission during the winter will make a
total of 19 during his administration of the Department. During the current
year 10 war vessels and 3 navy tugs have been launched, and during the four
years 25 vessels will have been launched. Two other large ships and a
torpedo boat are under contract and the work upon them well advanced, and
the 4 monitors are awaiting only the arrival of their armor, which has been
unexpectedly delayed, or they would have been before this in commission.

Contracts have been let during this Administration, under the
appropriations for the increase of the Navy, including new vessels and
their appurtenances, to the amount of $35,000,000, and there has been
expended during the same period for labor at navy-yards upon similar work
$8,000,000 without the smallest scandal or charge of fraud or partiality.
The enthusiasm and interest of our naval officers, both of the staff and
line, have been greatly kindled. They have responded magnificently to the
confidence of Congress and have demonstrated to the world an unexcelled
capacity in construction, in ordnance, and in everything involved in the
building, equipping, and sailing of great war ships.

At the beginning of Secretary Tracy's administration several difficult
problems remained to be grappled with and solved before the efficiency in
action of our ships could be secured. It is believed that as the result of
new processes in the construction of armor plate our later ships will be
clothed with defensive plates of higher resisting power than are found on
any war vessels afloat. We were without torpedoes. Tests have been made to
ascertain the relative efficiency of different constructions, a torpedo has
been adopted, and the work of construction is now being carried on
successfully. We were without armor-piercing shells and without a shop
instructed and equipped for the construction of them. We are now making
what is believed to be a projectile superior to any before in use. A
smokeless powder has been developed and a slow-burning powder for guns of
large caliber. A high explosive capable of use in shells fired from service
guns has been found, and the manufacture of gun cotton has been developed
so that the question of supply is no longer in doubt.

The development of a naval militia, which has been organized in eight
States and brought into cordial and cooperative relations with the Navy, is
another important achievement. There are now enlisted in these
organizations 1,800 men, and they are likely to be greatly extended. I
recommend such legislation and appropriations as will encourage and develop
this movement. The recommendations of the Secretary will, I do not doubt,
receive the friendly consideration of Congress, for he has enjoyed, as he
has deserved, the confidence of all those interested in the development of
our Navy, without any division upon partisan lines. I earnestly express the
hope that a work which has made such noble progress may not now be stayed.
The wholesome influence for peace and the increased sense of security which
our citizens domiciled in other lands feel when these magnificent ships
under the American flag appear is already most gratefully apparent. The
ships from our Navy which will appear in the great naval parade next April
in the harbor of New York will be a convincing demonstration to the world
that the United States is again a naval power.

The work of the Interior Department, always very burdensome, has been
larger than ever before during the administration of Secretary Noble. The
disability-pension law, the taking of the Eleventh Census, the opening of
vast areas of Indian lands to settlement, the organization of Oklahoma, and
the negotiations for the cession of Indian lands furnish some of the
particulars of the increased work, and the results achieved testify to the
ability, fidelity, and industry of the head of the Department and his
efficient assistants.

Several important agreements for the cession of Indian lands negotiated by
the commission appointed under the act of March 2, 1889, are awaiting the
action of Congress. Perhaps the most important of these is that for the
cession of the Cherokee Strip. This region has been the source of great
vexation to the executive department and of great friction and unrest
between the settlers who desire to occupy it and the Indians who assert
title. The agreement which has been made by the commission is perhaps the
most satisfactory that could have been reached. It will be noticed that it
is conditioned upon its ratification by Congress before March 4, 1893. The
Secretary of the Interior, who has given the subject very careful thought,
recommends the ratification of the agreement, and I am inclined to follow
his recommendation. Certain it is that some action by which this
controversy shall be brought to an end and these lands opened to settlement
is urgent.

The form of government provided by Congress on May 17, 1884, for Alaska was
in its frame and purpose temporary. The increase of population and the
development of some important mining and commercial interests make it
imperative that the law should be revised and better provision made for the
arrest and punishment of criminals.

The report of the Secretary shows a very gratifying state of facts as to
the condition of the General Land Office. The work of issuing agricultural
patents, which seemed to be hopelessly in arrear when the present Secretary
undertook the duties of his office, has been so expedited that the bureau
is now upon current business. The relief thus afforded to honest and worthy
settlers upon the public lands by giving to them an assured title to their
entries has been of incalculable benefit in developing the new States and
the Territories.

The Court of Private Land Claims, established by Congress for the promotion
of this policy of speedily settling contested land titles, is making
satisfactory progress in its work, and when the work is completed a great
impetus will be given to the development of those regions where unsettled
claims under Mexican grants have so long exercised their repressive
influence. When to these results are added the enormous cessions of Indian
lands which have been opened to settlement, aggregating during this
Administration nearly 26,000,000 acres, and the agreements negotiated and
now pending in Congress for ratification by which about 10,000,000
additional acres will be opened to settlement, it will be seen how much has
been accomplished.

The work in the Indian Bureau in the execution of the policy of recent
legislation has been largely directed to two chief purposes: First, the
allotment of lands in severalty to the Indians and the cession to the
United States of the surplus lands, and, secondly, to the work of educating
the Indian for his own protection in his closer contact with the white man
and for the intelligent exercise of his new citizenship. Allotments have
been made and patents issued to 5,900 Indians under the present Secretary
and Commissioner, and 7,600 additional allotments have been made for which
patents are now in process of preparation. The school attendance of Indian
children has been increased during that time over 13 per cent, the
enrollment for 1892 being nearly 20,000. A uniform system of school
text-books and of study has been adopted and the work in these national
schools brought as near as may be to the basis of the free common schools
of the States. These schools can be transferred and merged into the
common-school systems of the States when the Indian has fully assumed his
new relation to the organized civil community in which he resides and the
new States are able to assume the burden. I have several times been called
upon to remove Indian agents appointed by me, and have done so promptly
upon every sustained complaint of unfitness or misconduct. I believe,
however, that the Indian service at the agencies has been improved and is
now administered on the whole with a good degree of efficiency. If any
legislation is possible by which the selection of Indian agents can be
wholly removed from all partisan suggestions or considerations, I am sure
it would be a great relief to the Executive and a great benefit to the
service. The appropriation for the subsistence of the Cheyenne and Arapahoe
Indians made at the last session of Congress was inadequate. This smaller
appropriation was estimated for by the Commissioner upon the theory that
the large fund belonging to the tribe in the public Treasury could be and
ought to be used for their support. In view, however, of the pending
depredation claims against this fund and other considerations, the
Secretary of the Interior on the 12th of April last submitted a
supplemental estimate for $50,000. This appropriation was not made, as it
should have been, and the oversight ought to be remedied at the earliest
possible date.

In a special message to this Congress at the last session, I stated the
reasons why I had not approved the deed for the release to the United
States by the Choctaws and Chickasaws of the lands formerly embraced in the
Cheyenne and Arapahoe Reservation and remaining after allotments to that
tribe. A resolution of the Senate expressing the opinion of that body that
notwithstanding the facts stated in my special message the deed should be
approved and the money, $2,991,450, paid over was presented to me May 10,
1892. My special message was intended to call the attention of Congress to
the subject, and in view of the fact that it is conceded that the
appropriation proceeded upon a false basis as to the amount of lands to be
paid for and is by $50,000 in excess of the amount they are entitled to
(even if their claim to the land is given full recognition at the rate
agreed upon), I have not felt willing to approve the deed, and shall not do
so, at least until both Houses of Congress have acted upon the subject. It
has been informally proposed by the claimants to release this sum of
$50,000, but I have no power to demand or accept such a release, and such
an agreement would be without consideration and void.

I desire further to call the attention of Congress to the fact that the
recent agreement concluded with the Kiowas and Comanches relates to lands
which were a part of the "leased district," and to which the claim of the
Choctaws and Chickasaws is precisely that recognized by Congress in the
legislation I have referred to. The surplus lands to which this claim would
attach in the Kiowa and Comanche Reservation is 2,500,000 acres, and at the
same rate the Government will be called upon to pay to the Choctaws and
Chickasaws for these lands $3,125,000. This sum will be further augmented,
especially if the title of the Indians to the tract now Greet County, Tex.,
is established. The duty devolved upon me in this connection was simply to
pass upon the form of the deed; but as in my opinion the facts mentioned in
my special message were not adequately brought to the attention of Congress
in connection with the legislation, I have felt that I would not be
justified in acting without some new expression of the legislative will.

The report of the Commissioner of Pensions, to which extended notice is
given by the Secretary of the Interior in his report, will attract great
attention. Judged by the aggregate amount of work done, the last year has
been the greatest in the history of the office. I believe that the
organization of the office is efficient and that the work has been done
with fidelity. The passage of what is known as the disability bill has, as
was foreseen, very largely increased the annual disbursements to the
disabled veterans of the Civil War. The estimate for this fiscal year was
$144,956,000, and that amount was appropriated. A deficiency amounting to
$10,508,621 must be provided for at this session. The estimate for pensions
for the fiscal year ending June 30, 1894, is $165,000,000. The Commissioner
of Pensions believes that if the present legislation and methods are
maintained and further additions to the pension laws are not made the
maximum expenditure for pensions will be reached June 30, 1894, and will be
at the highest point $188,000,000 per annum.

I adhere to the views expressed in previous messages that the care of the
disabled soldiers of the War of the Rebellion is a matter of national
concern and duty. Perhaps no emotion cools sooner than that of gratitude,
but I can not believe that this process has yet reached a point with our
people that would sustain the policy of remitting the care of these
disabled veterans to the inadequate agencies provided by local laws. The
parade on the 20th of September last upon the streets of this capital of
60,000 of the surviving Union veterans of the War of the Rebellion was a
most touching and thrilling episode, and the rich and gracious welcome
extended to them by the District of Columbia and the applause that greeted
their progress from tens of thousands of people from all the States did
much to revive the glorious recollections of the Grand Review when these
men and many thousand others now in their graves were welcomed with
grateful joy as victors in a struggle in which the national unity, honor,
and wealth were all at issue.

In my last annual message I called attention to the fact that some
legislative action was necessary in order to protect the interests of the
Government in its relations with the Union Pacific Railway. The
Commissioner of Railroads has submitted a very full report, giving exact
information as to the debt, the liens upon the company's property, and its
resources. We must deal with the question as we find it and take that
course which will under existing conditions best secure the interests of
the United States. I recommended in my last annual message that a
commission be appointed to deal with this question, and I renew that
recommendation and suggest that the commission be given full power.

The report of the Secretary of Agriculture contains not only a most
interesting statement of the progressive and valuable work done under the
administration of Secretary Rusk, but many suggestions for the enlarged
usefulness of this important Department. In the successful efforts to break
down the restrictions to the free introduction of our meat products in the
countries of Europe the Secretary has been untiring from the first,
stimulating and aiding all other Government officers at home and abroad
whose official duties enabled them to participate in the work. The total
trade in hog products with Europe in May, 1892, amounted to 82,000,000
pounds, against 46,900,000 in the same month of 1891; in June, 1892, the
export aggregated 85,700,000 pounds, against 46,500,000 pounds in the same
month of the previous year; in July there was an increase of 41 per cent
and in August of 55 per cent over the corresponding months of 1891. Over
40,000,000 pounds of inspected pork have been exported since the law was
put into operation, and a comparison of the four months of May, June, July,
and August, 1892, with the same months of 1891 shows an increase in the
number of pounds of our export of pork products of 62 per cent and an
increase in value of 66 1/2 per cent. The exports of dressed beef increased
from 137,900,000 pounds in 1889 to 220,500,000 pounds in 1892 or about 60
per cent. During the past year there have been exported 394,607 head of
live cattle, as against 205,786 exported in 1889. This increased
exportation has been largely promoted by the inspection authorized by law
and the faithful efforts of the Secretary and his efficient subordinates to
make that inspection thorough and to carefully exclude from all cargoes
diseased or suspected cattle. The requirement of the English regulations
that live cattle arriving from the United States must be slaughtered at the
docks had its origin in the claim that pleuro-pneumonia existed among
American cattle and that the existence of the disease could only certainly
be determined by a post mortem inspection.

The Department of Agriculture has labored with great energy and
faithfulness to extirpate this disease, and on the 26th day of September
last a public announcement was made by the Secretary that the disease no
longer existed anywhere within the United States. He is entirely satisfied
after the most searching inquiry that this statement was justified, and
that by a continuance of the inspection and quarantine now required of
cattle brought into this country the disease can be prevented from again
getting any foothold. The value to the cattle industry of the United States
of this achievement can hardly be estimated. We can not, perhaps, at once
insist that this evidence shall be accepted as satisfactory by other
countries; but if the present exemption from the disease is maintained and
the inspection of our cattle arriving at foreign ports, in which our own
veterinarians participate, confirms it, we may justly expect that the
requirement that our cattle shall be slaughtered at the docks will be
revoked, as the sanitary restrictions upon our pork products have been. If
our cattle can be taken alive to the interior, the trade will be enormously
increased.

Agricultural products constituted 78.1 per cent of our unprecedented
exports for the fiscal year which closed June 30, 1892, the total exports
being $1,030,278,030 and the value of the agricultural products
$793,717,676, which exceeds by more than $150,000,000 the shipment of
agricultural products in any previous year.

An interesting and a promising work for the benefit of the American farmer
has been begun through agents of the Agricultural Department in Europe, and
consists in efforts to introduce the various products of Indian corn as
articles of human food. The high price of rye offered a favorable
opportunity for the experiment in Germany of combining corn meal with rye
to produce a cheaper bread. A fair degree of success has been attained, and
some mills for grinding corn for food have been introduced. The Secretary
is of the opinion that this new use of the products of corn has already
stimulated exportations, and that if diligently prosecuted large and
important markets can presently be opened for this great American product.

The suggestions of the Secretary for an enlargement of the work of the
Department are commended to your favorable consideration. It may, I think,
be said without challenge that in no corresponding period has so much been
done as during the last four years for the benefit of American
agriculture.

The subject of quarantine regulations, inspection, and control was brought
suddenly to my attention by the arrival at our ports in August last of
vessels infected with cholera. Quarantine regulations should be uniform at
all our ports. Under the Constitution they are plainly within the exclusive
Federal jurisdiction when and so far as Congress shall legislate. In my
opinion the whole subject should be taken into national control and
adequate power given to the Executive to protect our people against plague
invasions. On the 1st of September last I approved regulations establishing
a twenty-day quarantine for all vessels bringing immigrants from foreign
ports. This order will be continued in force. Some loss and suffering have
resulted to passengers, but a due care for the homes of our people
justifies in such cases the utmost precaution. There is danger that with
the coming of spring cholera will again appear, and a liberal appropriation
should be made at this session to enable our quarantine and port officers
to exclude the deadly plague.

But the most careful and stringent quarantine regulations may not be
sufficient absolutely to exclude the disease. The progress of medical and
sanitary science has been such, however, that if approved precautions are
taken at once to put all of our cities and towns in the best sanitary
condition, and provision is made for isolating any sporadic cases and for a
thorough disinfection, an epidemic can, I am sure, be avoided. This work
appertains to the local authorities, and the responsibility and the penalty
will be appalling if it is neglected or unduly delayed.

We are peculiarly subject in our great ports to the spread of infectious
diseases by reason of the fact that unrestricted immigration brings to us
out of European cities, in the overcrowded steerages of great steamships, a
large number of persons whose surroundings make them the easy victims of
the plague. This consideration, as well as those affecting the political,
moral, and industrial interests of our country, leads me to renew the
suggestion that admission to our country and to the high privileges of its
citizenship should be more restricted and more careful. We have, I think, a
right and owe a duty to our own people, and especially to our working
people, not only to keep out the vicious, the ignorant, the civil
disturber, the pauper, and the contract laborer, but to check the too great
flow of immigration now coming by further limitations.

The report of the World's Columbian Exposition has not yet been submitted.
That of the board of management of the Government exhibit has been received
and is herewith transmitted. The work of construction and of preparation
for the opening of the exposition in May next has progressed most
satisfactorily and upon a scale of liberality and magnificence that will
worthily sustain the honor of the United States.

The District of Columbia is left by a decision of the supreme court of the
District without any law regulating the liquor traffic. An old statute of
the legislature of the District relating to the licensing of various
vocations has hitherto been treated by the Commissioners as giving them
power to grant or refuse licenses to sell intoxicating liquors and as
subjecting those who sold without licenses to penalties; but in May last
the supreme court of the District held against this view of the powers of
the Commissioners. It is of urgent importance, therefore, that Congress
should supply, either by direct enactment or by conferring discretionary
powers upon the Commissioners, proper limitations and restraints upon the
liquor traffic in the District. The District has suffered in its reputation
by many crimes of violence, a large per cent of them resulting from
drunkenness and the liquor traffic. The capital of the nation should be
freed from this reproach by the enactment of stringent restrictions and
limitations upon the traffic.

In renewing the recommendation which I have made in three preceding annual
messages that Congress should legislate for the protection of railroad
employees against the dangers incident to the old and inadequate methods of
braking and coupling which are still in use upon freight trains, I do so
with the hope that this Congress may take action upon the subject.
Statistics furnished by the Interstate Commerce Commission show that during
the year ending June 30, 1891, there were forty-seven different styles of
car couplers reported to be in use, and that during the same period there
were 2,660 employees killed and 26,140 injured. Nearly 16 per cent of the
deaths occurred in the coupling and uncoupling of cars and over 36 per cent
of the injuries had the same origin.

The Civil Service Commission ask for an increased appropriation for needed
clerical assistance, which I think should be given. I extended the
classified service March 1, 1892, to include physicians, superintendents,
assistant superintendents, school-teachers, and matrons in the Indian
service, and have had under consideration the subject of some further
extensions, but have not as yet fully determined the lines upon which
extensions can most properly and usefully be made.

I have in each of the three annual messages which it has been my duty to
submit to Congress called attention to the evils and dangers connected with
our election methods and practices as they are related to the choice of
officers of the National Government. In my last annual message I endeavored
to invoke serious attention to the evils of unfair apportionments for
Congress. I can not close this message without again calling attention to
these grave and threatening evils. I had hoped that it was possible to
secure a nonpartisan inquiry by means of a commission into evils the
existence of which is known to all, and that out of this might grow
legislation from which all thought of partisan advantage should be
eliminated and only the higher thought appear of maintaining the freedom
and purity of the ballot and the equality of the elector, without the
guaranty of which the Government could never have been formed and without
the continuance of which it can not continue to exist in peace and
prosperity.

It is time that mutual charges of unfairness and fraud between the great
parties should cease and that the sincerity of those who profess a desire
for pure and honest elections should be brought to the test of their
willingness to free our legislation and our election methods from
everything that tends to impair the public confidence in the announced
result. The necessity for an inquiry and for legislation by Congress upon
this subject is emphasized by the fact that the tendency of the legislation
in some States in recent years has in some important particulars been away
from and not toward free and fair elections and equal apportionments. Is it
not time that we should come together upon the high plane of patriotism
while we devise methods that shall secure the right of every man qualified
by law to cast a free ballot and give to every such ballot an equal value
in choosing our public officers and in directing the policy of the
Government?

Lawlessness is not less such, but more, where it usurps the functions of
the peace officer and of the courts. The frequent lynching of colored
people accused of crime is without the excuse, which has sometimes been
urged by mobs for a failure to pursue the appointed methods for the
punishment of crime, that the accused have an undue influence over courts
and juries. Such acts are a reproach to the community where they occur, and
so far as they can be made the subject of Federal jurisdiction the
strongest repressive legislation is demanded. A public sentiment that will
sustain the officers of the law in resisting mobs and in protecting accused
persons in their custody should be promoted by every possible means. The
officer who gives his life in the brave discharge of this duty is worthy of
special honor. No lesson needs to be so urgently impressed upon our people
as this, that no worthy end or cause can be promoted by lawlessness.

This exhibit of the work of the Executive Departments is submitted to
Congress and to the public in the hope that there will be found in it a due
sense of responsibility and an earnest purpose to maintain the national
honor and to promote the happiness and prosperity of all our people, and
this brief exhibit of the growth and prosperity of the country will give us
a level from which to note the increase or decadence that new legislative
policies may bring to us. There is no reason why the national influence,
power, and prosperity should not observe the same rates of increase that
have characterized the past thirty years. We carry the great impulse and
increase of these years into the future. There is no reason why in many
lines of production we should not surpass all other nations, as we have
already done in some. There are no near frontiers to our possible
development. Retrogression would be a crime.

BENJ. HARRISON