To the Senate and House of Representatives:

At the threshold of your deliberations you are called to mourn with your
countrymen the death of Vice-President Hobart, who passed from this life on
the morning of November 21 last. His great soul now rests in eternal peace.
His private life was pure and elevated, while his public career was ever
distinguished by large capacity, stainless integrity, and exalted motives.
He has been removed from the high office which he honored and dignified,
but his lofty character, his devotion to duty, his honesty of purpose, and
noble virtues remain with us as a priceless legacy and example.

The Fifty-sixth Congress convenes in its first regular session with the
country in a condition of unusual prosperity, of universal good will among
the people at home, and in relations of peace and friendship with every
government of the world. Our foreign commerce has shown great increase in
volume and value. The combined imports and exports for the year are the
largest ever shown by a single year in all our history. Our exports for
1899 alone exceeded by more than a billion dollars our imports and exports
combined in 1870. The imports per capita are 20 per cent less than in 1870,
while the exports per capita are 58 per cent more than in 1870, showing the
enlarged capacity of the United States to satisfy the wants of its own
increasing population, as well as to contribute to those of the peoples of
other nations.

Exports of agricultural products were $784,776,142. Of manufactured
products we exported in value $339,592,146, being larger than any previous
year. It is a noteworthy fact that the only years in all our history when
the products of our manufactories sold abroad exceeded those bought abroad
were 1898 and 1899.

Government receipts from all sources for the fiscal year ended June 30,
1899, including $11,798,314,14, part payment of the Central Pacific
Railroad indebtedness, aggregated $610,982,004.35. Customs receipts were
$206,128,481.75, and those from internal revenue $273,437,161.51.

For the fiscal year the expenditures were $700,093,564.02, leaving a
deficit of $89,111,559.67.

The Secretary of the Treasury estimates that the receipts for the current
fiscal year will aggregate $640,958,112, and upon the basis of present
appropriations the expenditures will aggregate $600,958,112, leaving a
surplus of $40,000,000.

For the fiscal year ended June 30, 1899, the internal-revenue receipts were
increased about $100,000,000.

The present gratifying strength of the Treasury is shown by the fact that
on December 1, 1899, the available cash balance was $278,004,837.72, Of
which $239,744,905.36 was in gold coin and bullion. The conditions of
confidence which prevail throughout the country have brought gold into more
general use and customs receipts are now almost entirely paid in that
coin.

The strong position of the Treasury with respect to cash on hand and the
favorable showing made by the revenues have made it possible for the
Secretary of the Treasury to take action under the provisions of section
3694, Revised Statutes, relating to the sinking fund. Receipts exceeded
expenditures for the first five months of the current fiscal year by
$13,413,389.91, and, as mentioned above, the Secretary of the Treasury
estimates that there will be a surplus of approximately $40,000,000 at the
end of the year. Under such conditions it was deemed advisable and proper
to resume compliance with the provisions of the sinking-fund law, which for
eight years has not been done because of deficiencies in the revenues. The
Treasury Department therefore offered to purchase during November
$25,000,000 of the 5 per cent loan of 1904, or the 4 per cent funded loan
of 1907, at the current market price. The amount offered and purchased
during November was $18,408,600. The premium paid by the Government on such
purchases was $2,263,521 and the net saving in interest was about
$2,885,000. The success of this operation was sufficient to induce the
Government to continue the offer to purchase bonds to and including the 23d
day of December, instant, unless the remainder of the $25,000,000 called
for should be presented in the meantime for redemption.

Increased activity in industry, with its welcome attendant--a larger
employment for labor at higher wages--gives to the body of the people a
larger power to absorb the circulating medium. It is further true that year
by year, with larger areas of land under cultivation, the increasing volume
of agricultural products, cotton, corn, and wheat, calls for a larger
volume of money supply. This is especially noticeable at the
crop-harvesting and crop-moving period.

In its earlier history the National Banking Act seemed to prove a
reasonable avenue through which needful additions to the circulation could
from time to time be made. Changing conditions have apparently rendered it
now inoperative to that end. The high margin in bond securities required,
resulting from large premiums which Government bonds command in the market,
or the tax on note issues, or both operating together, appear to be the
influences which impair its public utility.

The attention of Congress is respectfully invited to this important matter,
with the view of ascertaining whether or not such reasonable modifications
can be made in the National Banking Act as will render its service in the
particulars here referred to more responsive to the people's needs. I again
urge that national banks be authorized to organize with a capital of
$25,000.

I urgently recommend that to support the existing gold standard, and to
maintain "the parity in value of the coins of the two metals (gold and
silver) and the equal power of every dollar at all times in the market and
in the payment of debts," the Secretary of the Treasury be given additional
power and charged with the duty to sell United States bonds and to employ
such other effective means as may be necessary to these ends. The authority
should include the power to sell bonds on long and short time, as
conditions may require, and should provide for a rate of interest lower
than that fixed by the act of January 14, 1875. While there is now no
commercial fright which withdraws gold from the Government, but, on the
contrary, such widespread confidence that gold seeks the Treasury demanding
paper money in exchange, yet the very situation points to the present as
the most fitting time to make adequate provision to insure the continuance
of the gold standard and of public confidence in the ability and purpose of
the Government to meet all its obligations in the money which the civilized
world recognizes as the best. The financial transactions of the Government
are conducted upon a gold basis. We receive gold when we sell United States
bonds and use gold for their payment. We are maintaining the parity of all
the money issued or coined by authority of the Government. We are doing
these things with the means at hand. Happily at the present time we are not
compelled to resort to loans to supply gold. It has been done in the past,
however, and may have to be done in the future. It behooves us, therefore,
to provide at once the best means to meet the emergency when it arises, and
the best means are those which are the most certain and economical. Those
now authorized have the virtue neither of directness nor economy. We have
already eliminated one of the causes of our financial plight and
embarrassment during the years 1893, 1894, 1895, and 1896. Our receipts now
equal our expenditures; deficient revenues no longer create alarm Let us
remove the only remaining cause by conferring the full and necessary power
on the Secretary of the Treasury and impose upon him the duty to uphold the
present gold standard and preserve the coins of the two metals on a parity
with each other, which is the repeatedly declared policy of the United
States.

In this connection I repeat my former recommendations that a portion of the
gold holdings shall be placed in a trust fund from which greenbacks shall
be redeemed upon presentation, but when once redeemed shall not thereafter
be paid out except for gold.

The value of an American merchant marine to the extension of our commercial
trade and the strengthening of our power upon the sea invites the immediate
action of the Congress. Our national development will be one-sided and
unsatisfactory so long as the remarkable growth of our inland industries
remains unaccompanied by progress on the seas. There is no lack of
constitutional authority for legislation which shall give to the country
maritime strength commensurate with its industrial achievements and with
its rank among the nations of the earth,

The past year has recorded exceptional activity in our shipyards, and the
promises of continual prosperity in shipbuilding are abundant. Advanced
legislation for the protection of our seamen has been enacted. Our coast
trade, under regulations wisely framed at the beginning of the Government
and since, shows results for the past fiscal year unequaled in our records
or those of any other power. We shall fail to realize our opportunities,
however, if we complacently regard only matters at home and blind ourselves
to the necessity of securing our share in the valuable carrying trade of
the world.

Last year American vessels transported a smaller share of our exports and
imports than during any former year in all our history, and the measure of
our dependence upon foreign shipping was painfully manifested to our
people. Without any choice of our own, but from necessity, the Departments
of the Government charged with military and naval operations in the East
and West Indies had to obtain from foreign flags merchant vessels essential
for those operations.

The other great nations have not hesitated to adopt the required means to
develop their shipping as a factor in national defense and as one of the
surest and speediest means of obtaining for their producers a share in
foreign markets. Like vigilance and effort on our part cannot fail to
improve our situation, which is regarded with humiliation at home and with
surprise abroad. Even the seeming sacrifices, which at the beginning may be
involved, will be offset later by more than equivalent gains.

The expense is as nothing compared to the advantage to be achieved. The
reestablishment of our merchant marine involves in a large measure our
continued industrial progress and the extension of our commercial triumphs.
I am satisfied the judgment of the country favors the policy of aid to our
merchant marine, which will broaden our commerce and markets and upbuild
our sea-carrying capacity for the products of agriculture and manufacture;
which, with the increase of our Navy, mean more work and wages to our
countrymen, as well as a safeguard to American interests in every part of
the world.

Combinations of capital organized into trusts to control the conditions of
trade among our citizens, to stifle competition, limit production, and
determine the prices of products used and consumed by the people, are
justly provoking public discussion, and should early claim the attention of
the Congress.

The Industrial Commission, created by the act of the Congress of June 18,
1898, has been engaged in extended hearings upon the disputed questions
involved in the subject of combinations in restraint of trade and
competition. They have not yet completed their investigation of this
subject, and the conclusions and recommendations at which they may arrive
are undetermined.

The subject is one giving rise to many divergent views as to the nature and
variety or cause and extent of the injuries to the public which may result
from large combinations concentrating more or less numerous enterprises and
establishments, which previously to the formation of the combination were
carried on separately.

It is universally conceded that combinations which engross or control the
market of any particular kind of merchandise or commodity necessary to the
general community, by suppressing natural and ordinary competition, whereby
prices are unduly enhanced to the general consumer, are obnoxious not only
to the common law but also to the public welfare. There must be a remedy
for the evils involved in such organizations. If the present law can be
extended more certainly to control or check these monopolies or trusts, it
should be done without delay. Whatever power the Congress possesses over
this most important subject should be promptly ascertained and asserted.

President Harrison in his annual message of December 3, 1889, says: Earnest
attention should be given by Congress to a consideration of the question
how far the restraint of those combinations of capital commonly called
"trusts" is matter of Federal jurisdiction. When organized, as they often
are, to crush out all healthy competition and to monopolize the production
or sale of an article of commerce and general necessity they are dangerous
conspiracies against the public good, and should be made the subject of
prohibitory and even penal legislation. An act to protect trade and
commerce against unlawful restraints and monopolies was passed by Congress
on the 2d of July, 1890. The provisions of this statute are comprehensive
and stringent. It declares every contract or combination, in the form of a
trust or otherwise, or conspiracy in the restraint of trade or commerce
among the several States or with foreign nations, to be unlawful. It
denominates as a criminal every person who makes any such contract or
engages in any such combination or conspiracy, and provides a punishment by
fine or imprisonment. It invests the several circuit courts of the United
States with jurisdiction to prevent and restrain violations of the act, and
makes it the duty of the several United States district attorneys, under
the direction of the Attorney General, to institute proceedings in equity
to prevent and restrain such violations. It further confers upon any person
who shall be injured in his business or property by any other person or
corporation by reason of anything forbidden or declared to be unlawful by
the act, the power to sue therefore in any circuit court of the United
States without respect to the amount in controversy, and to recover
threefold the damages by him sustained and the costs of the suit, including
reasonable attorney fees. It will be perceived that the act is aimed at
every kind of combination in the nature of a trust or monopoly in restraint
of interstate or international commerce.

The prosecution by the United States of offenses under the act of 1890 has
been frequently resorted to in the Federal courts, and notable efforts in
the restraint of interstate commerce, such as the Trans-Missouri Freight
Association and the joint Traffic Association, have been successfully
opposed and suppressed.

President Cleveland in his annual message of December 7, 1896--more than
six years subsequent to the enactment of this law--after stating the
evils of these trust combinations, says: Though Congress has attempted to
deal with this matter by legislation, the laws passed for that purpose thus
far have proved ineffective, not because of any lack of disposition or
attempt to enforce them, but simply because the laws themselves as
interpreted by the courts do not reach the difficulty. If the
insufficiencies of existing laws can be remedied by further legislation, it
should be done. The fact must be recognized, however, that all Federal
legislation on this subject may fall short of its purpose because of
inherent obstacles, and also because of the complex character of our
governmental system, which, while making the Federal authority supreme
within its sphere, has carefully limited that sphere by metes and bounds
which cannot be transgressed. The decision of our highest court on this
precise question renders it quite doubtful whether the evils of trusts and
monopolies may be adequately treated through Federal action, unless they
seek directly and purposely to include in their objects transportation or
intercourse between States or between the United States and foreign
countries. It does not follow, however, that this is the limit of the
remedy that may be applied. Even though it may be found that Federal
authority is not broad enough to fully reach the case, there can be no
doubt of the power of the several States to act effectively in the
premises, and there should be no reason to doubt their willingness to
judiciously exercise such power. The State legislation to which President
Cleveland looked for relief from the evils of trusts has failed to
accomplish fully that object. This is probably due to a great extent to the
fact that different States take different views as to the proper way to
discriminate between evil and injurious combinations and those associations
which are beneficial and necessary to the business prosperity of the
country. The great diversity of treatment in different States arising from
this cause and the intimate relations of all parts of the country to each
other without regarding State lines in the conduct of business have made
the enforcement of State laws difficult.

It is apparent that uniformity of legislation upon this subject in the
several States is much to be desired. It is to be hoped that such
uniformity founded in a wise and just discrimination between what is
injurious and what is useful and necessary in business operations may be
obtained and that means may be found for the Congress within the
limitations of its constitutional power so to supplement an effective code
of State legislation as to make a complete system of laws throughout the
United States adequate to compel a general observance of the salutary rules
to which I have referred.

The whole question is so important and far-reaching that I am sure no part
of it will be lightly considered, but every phase of it will have the
studied deliberation of the Congress, resulting in wise and judicious
action.

A review of our relations with foreign States is presented with such
recommendations as are deemed appropriate.

The long-pending boundary dispute between the Argentine Republic and Chile
was settled in March last by the award of an arbitral commission, on which
the United States minister at Buenos Ayres served as umpire.

Progress has been made toward the conclusion of a convention of extradition
with the Argentine Republic. Having been advised and consented to by the
United States Senate and ratified by Argentina, it only awaits the
adjustment of some slight changes in the text before exchange.

In my last annual message I adverted to the claim of the Austro-Hungarian
Government for indemnity for the killing of certain Austrian and Hungarian
subjects by the authorities of the State of Pennsylvania, at Lattimer,
while suppressing an unlawful tumult of miners, September 10, 1897. In view
of the verdict of acquittal rendered by the court before which the sheriff
and his deputies were tried for murder, and following the established
doctrine that the Government may not be held accountable for injuries
suffered by individuals at the hands of the public authorities while acting
in the line of duty in suppressing disturbance of the public peace, this
Government, after due consideration of the claim advanced by the
Austro-Hungarian Government, was constrained to decline liability to
indemnify the sufferers.

It is gratifying to be able to announce that the Belgian Government has
mitigated the restrictions on the importation of cattle from the United
States, to which I referred in my last annual message.

Having been invited by Belgium to participate in a congress, held at
Brussels, to revise the provisions of the general act Of July 2, 1890, for
the repression of the African slave trade, to which the United States was a
signatory party, this Government preferred not to be represented by a
plenipotentiary, but reserved the right of accession to the result. Notable
changes were made, those especially concerning this country being in the
line of the increased restriction of the deleterious trade in spirituous
liquors with the native tribes, which this Government has from the outset
urgently advocated. The amended general act will be laid before the Senate,
with a view to its advice and consent.

Early in the year the peace of Bolivia was disturbed by a successful
insurrection. The United States minister remained at his post, attending to
the American interests in that quarter, and using besides his good offices
for the protection of the interests of British subjects in the absence of
their national representative. On the establishment of the new Government,
our minister was directed to enter into relations therewith.

General Pando was elected President of Bolivia on October 23.

Our representative has been instructed to use all permissible friendly
endeavors to induce the Government of Bolivia to amend its marriage laws so
as to give legal status to the non-Catholic and civil marriages of aliens
within its jurisdiction, and strong hopes are entertained that the Bolivian
law in this regard will be brought, as was that of Peru some years ago,
into harmony with the general practice of modern States.

A convention of extradition with Brazil, signed May 14, 1897, has been
ratified by the Brazilian Legislature.

During the past summer two national ships of the United States have visited
Brazilian ports on a friendly mission and been cordially received. The
voyage of the Wilmington up the Amazon River gave rise to a passing
misunderstanding, owing to confusion in obtaining permission to visit the
interior and make surveys in the general interest of navigation, but the
incident found a ready adjustment in harmony with the close relations of
amity which this Government has always sedulously sought to cultivate with
the commonwealths of the Western Continent.

The claim growing out of the seizure of the American-owned newspaper "The
Panama Star and Herald" by the authorities of Colombia has been settled,
after a controversy of several years, by an agreement assessing at $30,000
the indemnity to be paid by the Colombian Government, in three installments
of $10,000 each.

The good will of Colombia toward our country has been testified anew by the
cordial extension of facilities to the Nicaraguan Canal Commission in their
approaching investigation of the Panama Canal and other projected routes
across the Isthmus of Darien.

Toward the end of October an insurrectionary disturbance developed in the
Colombian Republic. This movement has thus far not attained any decisive
result and is still in progress.

Discussion of the questions raised by the action of Denmark in imposing
restrictions on the importation of American meats has continued without
substantial result in our favor.

The neighboring island Republic of Santo Domingo has lately been the scene
of revolution, following a long period of tranquility. It began with the
killing of President Heureaux in July last, and culminated in the
relinquishment by the succeeding Vice-President of the reins of government
to the insurgents. The first act of the provisional government was the
calling of a presidential and constituent election. Juan Isidro Jimenez,
having been elected President, was inaugurated on the 14th of November.
Relations have been entered into with the newly established Government.

The experimental association of Nicaragua, Honduras, and Salvador, tinder
the title of the Greater Republic of Central America, when apparently on
the threshold of a complete federal organization by the adoption of a
constitution and the formation of a national legislature, was disrupted in
the last days of November, 1898, by the withdrawal of Salvador. Thereupon
Nicaragua and Honduras abandoned the joint compact, each resuming its
former independent sovereignty. This was followed by the reception of
Minister Merry by the Republics of Nicaragua and Salvador, while Minister
Hunter in turn presented his credentials to the Government of Honduras,
thus reverting to the old distribution of the diplomatic agencies of the
United States in Central America for which our existing statutes provide. A
Nicaraguan envoy has been accredited to the United States.

An insurrectionary movement, under General Reyes, broke out at Bluefields
in February last, and for a time exercised actual control in the Mosquito
Territory. The Detroit was promptly sent thither for the protection of
American interests. After a few weeks the Reyes government renounced the
conflict, giving place to the restored supremacy of Nicaragua. During the
interregnum certain public dues accruing under Nicaraguan law were
collected from American merchants by the authorities for the time being in
effective administrative control. Upon the titular government regaining
power, a second payment of these dues was demanded. Controversy arose
touching the validity of the original payment of the debt to the de facto
regent of the territory. An arrangement was effected in April last by the
United States minister and the foreign secretary of Nicaragua whereby the
amounts of the duplicate payments were deposited with the British consul
pending an adjustment of the matter by direct agreement between the
Governments of the United States and Nicaragua. The controversy is still
unsettled.

The contract of the Maritime Canal Company of Nicaragua was declared
forfeited by the Nicaraguan Government on the Tenth of October, on the
ground of nonfulfillment within the ten years' term stipulated in the
contract. The Maritime Canal Company has lodged a protest against this
action, alleging rights in the premises which appear worthy of
consideration. This Government expects that Nicaragua will afford the
protestants a full and fair hearing upon the merits of the case.

The Nicaragua Canal Commission, which had been engaged upon the work of
examination and survey for a ship-canal route across Nicaragua, having
completed its labors and made its report, was dissolved on May P, and on
June To a new commission, known as the Isthmian Canal Commission, was
organized under the terms of the act approved March 3, 1899, for the
purpose of examining the American Isthmus with a view to determining the
most practicable and feasible route for a ship canal across that Isthmus,
with its probable cost, and other essential details.

This Commission, under the presidency of Rear-Admiral John G. Walker, U. S.
N. (retired), entered promptly upon the work intrusted to it, and is now
carrying on examinations in Nicaragua along the route of the Panama Canal,
and in Darien from the Atlantic, in the neighborhood of the Atrato River,
to the Bay of Panama, on the Pacific side. Good progress has been made, but
under the law a comprehensive and complete investigation is called for,
which will require much labor and considerable time for its accomplishment.
The work will be prosecuted as expeditiously as possible and a report made
at the earliest practicable date.

The great importance of this work cannot be too often or too strongly
pressed upon the attention of the Congress. In my message of a year ago I
expressed my views of the necessity of a canal which would link the two
great oceans, to which I again invite your consideration. The reasons then
presented for early action are even stronger now.

A pleasing incident in the relations of this Government with that of Chile
occurred in the generous assistance given to the war ship Newark when in
distress in Chilean waters. Not alone in this way has the friendly
disposition of Chile found expression. That country has acceded to the
convention for the establishment of the Bureau of the American Republics,
in which organization every independent State of the continent now shares.

The exchange of ratifications of a convention for the revival of the United
States and Chilean Claims Commission and for the adjudication of claims
heretofore presented but not determined during the life of the previous
Commission has been delayed by reason of the necessity for fresh action by
the Chilean Senate upon the amendments attached to the ratification of the
treaty by the United States Senate. This formality is soon to be
accomplished.

In view of disturbances in the populous provinces of northern China, where
are many of our citizens, and of the imminence of disorder near the capital
and toward the seaboard, a guard of marines was landed from the Boston and
stationed during last winter in the legation compound at Peking. With the
restoration of order this protection was withdrawn.

The interests of our citizens in that vast Empire have not been neglected
during the past year. Adequate protection has been secured for our
missionaries and some injuries to their property have been redressed.

American capital has sought and found various opportunities of competing to
carry out the internal improvements which the Imperial Government is wisely
encouraging, and to develop the natural resources of the Empire. Our trade
with China has continued to grow, and our commercial rights under existing
treaties have been everywhere maintained during the past year, as they will
be in the future.

The extension of the area open to international foreign settlement at
Shanghai and the opening of the ports of Nanking, Tsing-tao (Kiao chao),
and Ta-lien-wan to foreign trade and settlement will doubtless afford
American enterprise additional facilities and new fields, of which it will
not be slow to take advantage.

In my message to Congress of December 5, 1898, I urged that the
recommendation which had been made to the Speaker of the House of
Representatives by the Secretary of the Treasury on the 14th of June, 1898,
for an appropriation for a commission to study the commercial and
industrial conditions in the Chinese Empire and report as to the
opportunities for, and obstacles to, the enlargement of markets in China
for the raw products and manufactures of the United States, should receive
at your hands the consideration which its importance and timeliness
merited, but the Congress failed to take action.

I now renew this recommendation, as the importance of the subject has
steadily grown since it was first submitted to you, and no time should be
lost in studying for ourselves the resources of this great field for
American trade and enterprise.

The death of President Faure in February last called forth those sincere
expressions of sympathy which befit the relations of two Republics as
closely allied by unbroken historic ties as are the United States and
France.

Preparations for the representation of the industries, arts, and products
of the United States at the World's Exposition to be held in Paris next
year continue on an elaborate and comprehensive scale, thanks to the
generous appropriation provided by Congress and to the friendly interest
the French Government has shown in furthering a typical exhibit of American
progress.

There has been allotted to the United States a considerable addition of
space, which, while placing our country in the first rant among exhibitors,
does not suffice to meet the increasingly urgent demands of our
manufacturers. The efforts of the Commissioner General are ably directed
toward a strictly representative display of all that most
characteristically marks American achievement in the inventive arts, and
most adequately shows the excellence of our natural productions.

In this age of keen rivalry among nations for mastery in commerce, the
doctrine of evolution and the rule of the survival of the fittest must be
as inexorable in their operation as they are positive in the results they
bring about. The place won in the struggle by an industrial people can only
be held by unrelaxed endeavor and constant advance in achievement. The
present extraordinary impetus in every line of American exportation and the
astounding increase in the volume and value of our share in the world's
markets may not be attributed to accidental conditions.

The reasons are not far to seek. They lie deep in our national character
and find expression year by year in every branch of handicraft, in every
new device whereby the materials we so abundantly produce are subdued to
the artisan's will and made to yield the largest, most practical, and most
beneficial return. The American exhibit at Paris should, and I am confident
will, be an open volume, whose lessons of skillfully directed endeavor,
unfaltering energy, and consummate performance may be read by all on every
page, thus spreading abroad a clearer knowledge of the worth of our
productions and the justice of our claim to an important place in the marts
of the world. To accomplish this by judicious selection, by recognition of
paramount merit in whatever walk of trade or manufacture it may appear, and
by orderly classification and attractive installation is the task of our
Commission.

The United States Government building is approaching completion, and no
effort will be spared to make it worthy, in beauty of architectural plan
and in completeness of display, to represent our nation. It has been
suggested that a permanent building of similar or appropriate design be
erected on a convenient site, already given by the municipality, near the
exposition grounds, to serve in commemoration of the part taken by this
country in this great enterprise, as an American National Institute, for
our countrymen resorting to Paris for study.

I am informed by our Commissioner-General that we shall have in the
American sections at Paris over 7,000 exhibitors, from every State ill our
country, a number ten times as great as those which were represented at
Vienna in 1873, six times as many as those in Paris in 1878, and four times
as many as those who exhibited in Paris in 1889. This statement does not
include the exhibits from either Cuba, Puerto Rico, or Hawaii, for which
arrangements have been made.

A number of important international congresses on special topics affecting
public interests are proposed to be held in Paris next summer in connection
with the exposition. Effort will be made to have the several technical
branches of our administration efficiently represented at those
conferences, each in its special line, and to procure the largest possible
concourse of State representatives, particularly at the Congresses of
Public Charity and Medicine.

Our relations with Germany continue to be most cordial. The increasing
intimacy of direct association has been marked during the year by the
granting permission in April for the landing on our shores of a cable from
Borkum Emden, on the North Sea, by way of the Azores, and also by the
conclusion on September 2 of a Parcels Post Convention with the German
Empire. In all that promises closer relations of intercourse and commerce
and a better understanding between two races having so many traits in
common, Germany can be assured of the most cordial cooperation of this
Government and people. We may be rivals in many material paths, but our
rivalry should be generous and open, ever aiming toward the attainment of
larger results and the mutually beneficial advancement of each in the line
of its especial adaptabilities.

The several governments of the Empire seem reluctant to admit the natural
excellence of our food productions and to accept the evidence we constantly
tender of the care with which their purity is guarded by rigid inspection
from the farm, through the slaughterhouse and the packing establishments,
to the port of shipment. Our system of control over exported food staples
invites examination from any quarter and challenges respect by its
efficient thoroughness.

It is to be hoped that in time the two Governments will act in common
accord toward the realization of their common purpose to safeguard the
public health and to insure the purity and wholesomeness of all food
products imported by either country from the other. Were the Congress to
authorize an invitation to Germany, in connection with the pending
reciprocity negotiations, for the constitution of a joint commission of
scientific experts and practical men of affairs to conduct a searching
investigation of food production and exportation in both countries and
report to their respective legislatures for the adoption of such remedial
measures as they might recommend for either, the way might be opened for
the desirable result indicated.

Efforts to obtain for American life insurance companies a full hearing as
to their business operations in Prussia have, after several years of
patient representation, happily succeeded, and one of the most important
American companies has been granted a concession to continue business in
that Kingdom.

I am also glad to announce that the German insurance companies have been
readmitted by the superintendent of insurance to do business in the State
of New York.

Subsequent to the exchange of our peace treaty with Spain, Germany acquired
the Caroline Islands by purchase, paying therefore $5,000,000. Assurances
have been received from the German Government that the rights of American
missionaries and traders there will be considerately observed.

In my last annual message I referred to the pending negotiations with Great
Britain in respect to the Dominion of Canada. By means of an executive
agreement, a joint High Commission had been created for the purpose of
adjusting all unsettled questions between the United States and Canada,
embracing twelve subjects, among which were the questions of the fur seals,
the fisheries of the coast and contiguous inland waters, the Alaskan
boundary, the transit of merchandise in bond, the alien labor laws, mining
rights, reciprocity in trade, revision of the agreement respecting naval
vessels in the Great Lakes, a more complete marking of parts of the
boundary, provision for the conveyance of criminals, and for wrecking and
salvage.

Much progress had been made by the Commission toward the adjustment of many
of these questions, when it became apparent that an irreconcilable
difference of views was entertained respecting the delimitation of the
Alaskan, boundary. In the failure of an agreement as to the meaning of
Articles III and IV of the treaty of 1825 between Russia and Great Britain,
which defined the boundary between Alaska and Canada, the American
Commissioners proposed that the subject of the boundary be laid aside, and
that the remaining questions of difference be proceeded with, some of which
were so far advanced as to assure the probability of a settlement. This
being declined by the British Commissioners, an adjournment was taken until
the boundary should be adjusted by the two Governments. The subject has
been receiving the careful attention which its importance demands, with the
result that a modus vivendi for provisional demarcations in the region
about the head of Lynn Canal has, been agreed upon; and it is hoped that
the negotiations now in progress between the two Governments will end in an
agreement for the establishment and delimitation of a permanent boundary.

Apart from these questions growing out of our relationship with our
northern neighbor, the most friendly disposition and ready agreement have
marked the discussion of numerous matters arising in the vast and intimate
intercourse of the United States with Great Britain.

This Government has maintained an attitude of neutrality in the unfortunate
contest between Great Britain and the Boer States of Africa. We have
remained faithful to the precept of avoiding entangling alliances as to
affairs not of our direct concern. Had circumstances suggested that the
parties to the quarrel would have welcomed any kindly expression of the
hope of the American people that war might be averted, good offices would
have been gladly tendered. The United States representative at Pretoria was
early instructed to see that all neutral American interests be respected by
the combatants. This has been an easy task in view of the positive
declarations of both British and Boer authorities that the personal and
property rights of our citizens should be observed.

Upon the withdrawal of the British agent from Pretoria the United States
consul was authorized, upon the request of the British Government and with
the assent of the South African and Orange Free State Governments, to
exercise the customary good offices of a neutral for the care of British
interests. In the discharge of this function, I am happy to say that
abundant opportunity has been afforded to show the impartiality of this
Government toward both the combatants.

For the fourth time in the present decade, question has arisen with the
Government of Italy in regard to the lynching of Italian subjects. The
latest of these deplorable events occurred at Tallulah, Louisiana, whereby
five unfortunates of Italian origin were taken from jail and hanged.

The authorities of the State and a representative of the Italian Embassy
having separately investigated the occurrence, with discrepant results,
particularly as to the alleged citizenship of the victims, and it not
appearing that the State had been able to discover and punish the violators
of the law, an independent investigation has been set on foot, through the
agency of the Department of State, and is still in progress. The result
will enable the Executive to treat the question with the Government of
Italy in a spirit of fairness and justice. A satisfactory solution will
doubtless be reached.

The recurrence of these distressing manifestations of blind mob fury
directed at dependents or natives of a foreign country suggests that the
contingency has arisen for action by Congress in the direction of
conferring upon the Federal courts jurisdiction in this class of
international cases where the ultimate responsibility of the Federal
Government may be involved. The suggestion is not new. In his annual
message of December 9, 1891, my predecessor, President Harrison, said: It
would, I believe, be entirely competent for Congress to make offenses
against the treaty rights of foreigners domiciled in the United States
cognizable in the Federal courts. This has not, however, been done, and the
Federal officers and courts have no power in such cases to intervene either
for the protection of a foreign citizen or for the punishment of his
slayers. It seems to me to follow, in this state of the law, that the
officers of the State charged with police and judicial powers in such cases
must, in the consideration of international questions growing out of such
incidents, be regarded in such sense as Federal agents as to make this
Government answerable for their acts in cases where it would be answerable
if the United States had used its constitutional power to define and punish
crimes against treaty rights. A bill to provide for the punishment of
violations of treaty rights of aliens was introduced in the Senate March 1,
1892, and reported favorably March 30. Having doubtless in view the
language of that part of Article III of the treaty of February 26, 1871,
between the United States and Italy, which stipulates that "The citizens
of each of the high contracting parties shall receive, in the States and
Territories of the other, most constant protection and security for their
persons and property, and shall enjoy in this respect the same rights and
privileges as are or shall be granted to the natives, on their submitting
themselves to the conditions imposed upon the natives," the bill so
introduced and reported provided that any act committed in any State or
Territory of the United States in violation of the rights of a citizen or
subject of a foreign country secured to such citizen or subject by treaty
between the United States and such foreign country and constituting a crime
under the laws of the State or Territory shall constitute a like crime
against the United States and be cognizable in the Federal courts. No
action was taken by Congress in the matter.

I earnestly recommend that the subject be taken up anew and acted upon
during the present session. The necessity for some such provision
abundantly appears. Precedent for constituting a Federal jurisdiction in
criminal cases where aliens are sufferers is rationally deducible from the
existing statute, which gives to the district and circuit courts of the
United States jurisdiction of civil suits brought by aliens where the
amount involved exceeds a certain sum. If such jealous solicitude be shown
for alien rights in cases of merely civil and pecuniary import, how much
greater should be the public duty to take cognizance of matters affecting
the lives and the rights of aliens tinder the settled principles of
international law no less than under treaty stipulation, in cases of such
transcendent wrong-doing as mob murder, especially when experience has
shown that local justice is too often helpless to punish the offenders.

After many years of endeavor on the part of this Government to that end the
Italian Government has consented to enter into negotiations for a
naturalization convention, having for one of its objects the regulation of
the status of Italians (except those of an age for active military service)
who, having been naturalized in the United States, may revisit Italy. It is
hoped that with the mutually conciliatory spirit displayed a successful
conclusion will be reached.

The treaty of commerce and navigation between the United States and Japan
on November 22, 1894, took effect in accordance with the terms of its XIXth
Article on the 17th of July last, simultaneously with the enforcement of
like treaties with the other powers, except France, whose convention did
not go into operation until August 4, the United States being, however,
granted up to that date all the privileges and rights accorded to French
citizens under the old French treaty. By this notable conventional reform
Japan's position as a fully independent sovereign power is assured, control
being gained of taxation, customs revenues, judicial administration,
coasting trade, and all other domestic functions of government, and foreign
extra-territorial rights being renounced.

Comprehensive codes of civil and criminal procedure according to western
methods, public instruction, patents and copyrights, municipal
administration, including jurisdiction over the former foreign settlements,
customs tariffs and procedure, public health, and other administrative
measures have been proclaimed. The working of the new system has given rise
to no material complaints on the part of the American citizens or
interests, a circumstance which attests the ripe consideration with which
the change has been prepared.

Valuable assistance was rendered by the Japanese authorities to the United
States transport ship Morgan City while stranded at Kobe. Permission has
been granted to land and pasture army horses at Japanese ports of call on
the way to the Philippine Islands. These kindly evidences of good will are
highly appreciated.

The Japanese Government has shown a lively interest in the proposition of
the Pacific Cable Company to add to its projected cable lines to Hawaii,
Guam, and the Philippines a branch connection with the coast of Japan. It
would be a gratifying consummation were the utility of the contemplated
scheme enhanced by bringing Japan and the United States into direct
telegraphic relation.

Without repeating the observations of my special message of February 10,
1899, concerning the necessity of a cable to Manila. I respectfully invite
attention to it.

I recommend that, in case the Congress should not take measures to bring
about this result by direct action of the Government, the Postmaster
General be authorized to invite competitive bids for the establishment of a
cable; the company making the best responsible bid to be awarded the
contract; the successful company to give ample bonds to insure the
completion of the work within a reasonable time.

The year has been marked by constant increase in the intimacy of our
relations with Mexico and in the magnitude of mutually advantageous
interchanges. This Government has omitted no opportunity to show its strong
desire to develop and perpetuate the ties of cordiality now so long happily
unbroken.

Following the termination on January 20, 1899, by Mexico of the convention
of extradition of December 11, 1861, a new treaty more in accordance with
the ascertained needs of both countries was signed February 22, 1899, and
exchanged in the City of Mexico on the 22d of April last. Its operation
thus far has been effective and satisfactory. A recent case has served to
test the application of its IVth Article, which provides that neither party
shall be bound to deliver up its own citizens, but that the executive
authority of each shall have the power to deliver them up if in its
discretion it be deemed proper to do so.

The extradition of Mrs. Mattie Rich, a citizen of the United States,
charged with homicide committed in Mexico, was after mature consideration
directed by me in the conviction that the ends of justice would be thereby
subserved. Similar action, on appropriate occasion, by the Mexican
Executive will not only tend to accomplish the desire of both Governments
that grave crimes go not unpunished, but also to repress lawlessness along
the border of the two countries. The new treaty stipulates that neither
Government shall assume jurisdiction in the punishment of crimes committed
exclusively within the territory of the other. This will obviate in future
the embarrassing controversies which have heretofore arisen through
Mexico's assertion of a claim to try and punish an American citizen for an
offense committed within the jurisdiction of the United States.

The International Water Boundary Commission, organized by the convention of
March 1, 1889, for the adjustment of questions affecting the Rio Grande
frontier, has not yet completed its labors. A further extension of its term
for one year, until December 24, 1899, was effected by a convention signed
December z, 1898, and exchanged and proclaimed in February last.

An invitation extended to the President of Mexico to visit Chicago in
October, on the occasion of laying the corner stone of the United States
Government building in that city, was cordially accepted by him, with the
necessary consent of the Mexican Congress, but the illness of a member of
his family prevented his attendance. The Minister of Foreign Relations,
however, came as the personal representative of President Diaz, and in that
high character was duly honored.

Claims growing out of the seizure of American sealing vessels in Bering Sea
have been under discussion with the Government of Russia for several years,
with the recent happy result of an agreement to submit them to the decision
of a single arbitrator. By this act Russia affords proof of her adherence
to the beneficent principle of arbitration which her plenipotentiaries
conspicuously favored at The Hague Disarmament Conference when it was
advocated by the representatives of the United States.

A suggestion for a permanent exposition of our products and manufactures in
Russia, although not yet fully shaped, has been so cordially welcomed by
the Imperial Government that it may not inaptly take a fitting place in
whatever legislation the Congress may adopt looking to enlargement of our
commercial opportunities abroad.

Important events have occurred in the Samoan Islands. The election,
according to the laws and customs of Samoa, of a successor to the late
King, Malietoa Laupepa, developed a contest as to the validity of the
result, which issue, by the terms of the General Act, was to be decided by
the Chief justice. Upon his rendering a judgment in favor of Malietoa Tanu,
the rival chief, Mataafa, took up arms. The active intervention of American
and British war ships became imperative to restore order, at the cost of
sanguinary encounters. In this emergency a joint commission of
representatives of the United States, Germany, and Great Britain was sent
to Samoa to investigate the situation and provide a temporary remedy. By
its active efforts a peaceful solution was reached for the time being, the
kingship being abolished and a provisional government established.
Recommendations unanimously made by the commission for a permanent
adjustment of the Samoan question were taken under consideration by the
three powers parties to the General Act. But the more they were examined
the more evident it became that a radical change was necessary in the
relations of the powers to Samoa.

The inconveniences and possible perils of the tripartite scheme of
supervision and control in the Samoan group by powers having little
interest in common in that quarter beyond commercial rivalry had been once
more emphasized by the recent events. The suggested remedy of the joint
Commission, like the scheme it aimed to replace amounted to what has been
styled a tridominium, being the exercise of the functions of sovereignty by
an unanimous agreement of three powers. The situation had become far more
intricate and embarrassing from every point of view than it was when my
predecessor, in 1894, summed up its perplexities and condemned the
participation in it of the United States.

The arrangement under which Samoa was administered had proved impracticable
and unacceptable to all the powers concerned. To withdraw from the
agreement and abandon the islands to Germany and Great Britain would not be
compatible with our interests in the archipelago. To relinquish our rights
in the harbor of Pago Pago, the best anchorage in the Pacific, the
occupancy of which had been leased to the United States in 1878 by the
first foreign treaty ever concluded by Samoa, was not to be thought of
either as regards the needs of our Navy or the interests of our growing
commerce with the East. We could not have considered any proposition for
the abrogation of the tripartite control which did not confirm us in all
our rights and safeguard all our national interests in the islands.

Our views commended themselves to the other powers. A satisfactory
arrangement was concluded between the Governments of Germany and of
England, by virtue of which England retired from Samoa in view of
compensations in other directions, and both powers renounced in favor of
the United States all their rights and claims over and in respect to that
portion of the group lying to the east of the one hundred and seventy-first
degree of west longitude, embracing the islands of Tutuila, Ofoo, Olosenga,
and Manua. I transmit to the Senate, for its constitutional action thereon,
a convention, which besides the provisions above mentioned also guarantees
us the same privileges and conditions in respect to commerce and commercial
vessels in all of the islands of Samoa as those possessed by Germany.

Claims have been preferred by white residents of Samoa on account of
injuries alleged to have been suffered through the acts of the treaty
Governments in putting down the late disturbances. A convention has been
made between the three powers for the investigation and settlement of these
claims by a neutral arbitrator, to which the attention of the Senate will
be invited.

My annual message of last year was necessarily devoted, in great part to a
consideration of the Spanish War and of the results it wrought and the
conditions it imposed for the future. I am gratified to announce that the
treaty of peace has restored friendly relations between the two powers.
Effect has been given to its most important provisions. The evacuation of
Puerto Rico having already been accomplished on the XIVth of October, 1898,
nothing remained necessary there but to continue the provisional military
control of the island until the Congress should enact a suitable government
for the ceded territory. Of the character and scope of the measures to that
end I shall treat in another part of this message.

The withdrawal of the authority of Spain from the island of Cuba was
effected by the 1st of January, so that the full re-establishment of peace
found the relinquished territory held by us in trust for the inhabitants,
maintaining, under the direction of the Executive, such government and
control therein as should conserve public order, restore the productive
conditions of peace so long disturbed by the instability and disorder which
prevailed for the greater part of the preceding three decades, and build up
that tranquil development of the domestic state whereby alone can be
realized the high purpose, as proclaimed in the joint resolution adopted by
the Congress on the 19th of April, 1898, by which the United States
disclaimed any disposition or intention to exercise sovereignty,
jurisdiction, or control over Cuba, except for the pacification thereof,
and asserted its determination when that was accomplished to leave the
government and control of the island to its people. The pledge contained in
this resolution is of the highest honorable obligation and must be sacredly
kept.

I believe that substantial progress has been made in this direction. All
the administrative measures adopted in Cuba have aimed to fit it for a
regenerated existence by enforcing the supremacy of law and justice; by
placing wherever practicable the machinery of administration in the hands
of the inhabitants; by instituting needed sanitary reforms; by spreading
education; by fostering industry and trade; by inculcating public morality,
and, in short, by taking every rational step to aid the Cuban people to
attain to that plane of self-conscious respect and self-reliant unity which
fits an enlightened community for self-government within its own sphere,
while enabling it to fulfill all outward obligation.

This nation has assumed before the world a grave responsibility for the
future good government of Cuba. We have accepted a trust the fulfillment of
which calls for the sternest integrity of purpose and the exercise of the
highest wisdom. The new Cuba yet to arise from the ashes of the past must
needs be bound to us by ties of singular intimacy and strength if its
enduring welfare is to be assured. Whether those ties shall be organic or
conventional, the destinies of Cuba are in some rightful form and manner
irrevocably linked with our own, but how and how far is for the future to
determine in the ripeness of events. Whatever be the outcome, we must see
to it that free Cuba be a reality, not a name, a perfect entity, not a
hasty experiment bearing within itself the elements of failure. Our
mission, to accomplish which we took up the wager of battle, is not to be
fulfilled by turning adrift any loosely framed commonwealth to face the
vicissitudes which too often attend weaker States whose natural wealth and
abundant resources are offset by the incongruities of their political
organization and the recurring occasions for internal rivalries to sap
their strength and dissipate their energies. The greatest blessing which
can come to Cuba is the restoration of her agricultural and industrial
prosperity, which will give employment to idle men and re-establish the
pursuits of peace. This is her chief and immediate need.

On the 19th of August last an order was made for the taking of the census
in the island, to be completed on the 30th of November. By the treaty of
peace the Spanish people on the island have until April 11, 1900, to elect
whether they will remain citizens of Spain or become citizens of Cuba.
Until then it cannot be definitely ascertained who shall be entitled to
participate in the formation of the government of Cuba. By that time the
results of the census will have been tabulated and we shall proceed to
provide for elections which will commit the municipal governments of the
island to the officers elected by the people. The experience thus acquired
will prove of great value in the formation of a representative convention
of the people to draft a constitution and establish a general system of
independent government for the island. In the meantime and so long as we
exercise control over the island the products of Cuba should have a market
in the United States on as good terms and with as favorable rates of duty
as are given to the West India Islands under treaties of reciprocity which
shall be made.

For the relief of the distressed in the island of Cuba the War Department
has issued supplies to destitute persons through the officers of the Army,
which have amounted to 5,493,000 rations, at a cost Of $1,417,554.07.

To promote the disarmament of the Cuban volunteer army, and in the interest
of public peace and the welfare of the people, the sum Of $75 was paid to
each Cuban soldier borne upon the authenticated rolls, on condition that he
should deposit his arms with the authorities designated by the United
States. The sum thus disbursed aggregated $2,547,750, which was paid from
the emergency fund provided by the act of January 5, 1899, for that
purpose.

Out of the Cuban island revenues during the six months ending June 30,
1899, $1,712,014.20 was expended for sanitation, $293,881.70 for charities
and hospitals, and $88,944.03 for aid to the destitute.

Following the exchange of ratifications of the treaty of peace the two
Governments accredited ministers to each other, Spain sending to Washington
the Duke of Arcos, an eminent diplomatist, previously stationed in Mexico,
while the United States transferred to Madrid Hon. Bellamy Storer, its
minister at Brussels. This was followed by the respective appointment of
consuls, thereby fully resuming the relations interrupted by the war. In
addition to its consular representation in the United States, the Spanish
Government has appointed consuls for Cuba, who have been provisionally
recognized during the military administration of the affairs of that
island.

Judicial intercourse between the courts of Cuba and Puerto Rico and of
Spain has been established, as provided by the treaty of peace. The Cuban
political prisoners in Spanish penal stations have been and are being
released and returned to their homes, in accordance with Article VI of the
treaty. Negotiations are about to be had for defining the conventional
relations between the two countries, which fell into abeyance by reason of
the war. I trust that these will include a favorable arrangement for
commercial reciprocity under the terms of sections 3 and 4 of the current
tariff act. In these, as in all matters of international concern, no effort
will be spared to respond to the good disposition of Spain, and to
cultivate in all practicable ways the intimacy which should prevail between
two nations whose past history has so often and in so many ways been marked
by sincere friendship and by community of interests.

I would recommend appropriate legislation in order to carry into execution
Article VII of the Treaty of Peace with Spain, by which the United States
assured the payment of certain claims for indemnity of its citizens against
Spain.

The United States minister to Turkey continues, under instructions, to
press for a money payment in satisfaction of the just claims for injuries
suffered by American citizens in the disorders of several years past and
for wrongs done to them by the Ottoman authorities. Some of these claims
are of many years' standing. This Government is hopeful of a general
agreement in this regard.

In the Turkish Empire the situation of our citizens remains unsatisfactory.
Our efforts during nearly forty years to bring about a convention of
naturalization seem to be on the brink of final failure through the
announced policy of the Ottoman Porte to refuse recognition of the alien
status of native Turkish subjects naturalized abroad since 1867. Our
statutes do not allow this Government to admit any distinction between the
treatment of native and naturalized Americans abroad, so that ceaseless
controversy arises in cases where persons owing in the eye of international
law a dual allegiance are prevented from entering Turkey or are expelled
after entrance. Our law in this regard contrasts with that of the European
States. The British act, for instance, does not claim effect for the
naturalization of an alien in the event of his return to his native
country, unless the change be recognized by the law of that country or
stipulated by treaty between it and the naturalizing State.

The arbitrary treatment, in some instances, of American productions in
Turkey has attracted attention of late, notably in regard to our flour.
Large shipments by the recently opened direct steamship line to Turkish
ports have been denied entrance on the score that, although of standard
composition and unquestioned purity, the flour was pernicious to health
because of deficient "elasticity" as indicated by antiquated and
untrustworthy tests. Upon due protest by the American minister, and it
appearing that the act was a virtual discrimination against our product,
the shipments in question were admitted. In these, as in all instances,
wherever occurring, when American products may be subjected in a foreign
country, upon specious pretexts, to discrimination compared with the like
products of another country, this Government will use its earnest efforts
to secure fair and equal treatment for its citizens and their goods.
Failing this, it will not hesitate to apply whatever corrective may be
provided by the statutes.

The International Commission of Arbitration, appointed under the
Anglo-Venezuelan treaty of 1897, rendered an award on October 3 last,
whereby the boundary line between Venezuela and British Guiana is
determined, thus ending a controversy which has existed for the greater
part of the century. The award, as to which the arbitrators were unanimous,
while not meeting the extreme contention of either party, gives to Great
Britain a large share of the interior territory in dispute and to Venezuela
the entire mouth of the Orinoco, including Barima Point and the Caribbean
littoral for some distance to the eastward. The decision appears to be
equally satisfactory to both parties.

Venezuela has once more undergone a revolution. The insurgents, under
General Castro, after a sanguinary engagement in which they suffered much
loss, rallied in the mountainous interior and advanced toward the capital.
The bulk of the army having sided with the movement, President Andrade
quitted Caracas, where General Castro set up a provisional government with
which our minister and the representatives of other powers entered into
diplomatic relations on the 20th of November, 1899.

The fourth section of the Tariff Act approved July 24, 1897, appears to
provide only for commercial treaties which should be entered into by the
President and also ratified by the Senate within two years from its
passage. Owing to delays inevitable in negotiations of this nature, none of
the treaties initiated under that section could be concluded in time for
ratification by the Senate prior to its adjournment on the 4th of March
last. Some of the pending negotiations, however, were near conclusion at
that time, and the resulting conventions have since been signed by the
plenipotentiaries. Others, within both the third and fourth sections of the
act, are still under consideration. Acting under the constitutional power
of the Executive in respect to treaties, I have deemed it my duty, while
observing the limitations of concession provided by the fourth section, to
bring to a conclusion all pending negotiations, and submit them to the
Senate for its advice and consent.

Conventions of reciprocity have been signed during the Congressional recess
with Great Britain for the respective colonies of British Guiana, Barbados,
Bermuda, Jamaica, and Turks and Caicos Islands, and with the Republic of
Nicaragua.

Important reciprocal conventions have also been concluded with France and
with the Argentine Republic.

In my last annual message the progress noted in the work of the diplomatic
and consular officers in collecting information as to the industries and
commerce of other countries, and in the care and promptitude with which
their reports are printed and distributed, has continued during the past
year, with increasingly valuable results in suggesting new sources of
demand for American products and in pointing out the obstacles still to be
overcome in facilitating the remarkable expansion of our foreign trade. It
will doubtless be gratifying to Congress to learn that the various agencies
of the Department of State are co-operating in these endeavors with a zeal
and effectiveness which are not only receiving the cordial recognition of
our business interests, but are exciting the emulation of other
Governments. In any rearrangement of the great and complicated work of
obtaining official data of an economic character which Congress may
undertake it is most important, in my judgment, that the results already
secured by the efforts of the Department of State should be carefully
considered with a view to a judicious development and increased utility to
our export trade.

The interest taken by the various States forming the International Union of
American Republics in the work of its organic bureau is evidenced by the
fact that for the first time since its creation in 1890 all the Republics
of South and Central America are now represented in it.

The unanimous recommendation of the International American Conference,
providing for the International Union of American Republics, stated that it
should continue in force during a term of ten years from the date of its
organization, and no country becoming a member of the union should cease to
be a member until the end of said period of ten years, and unless twelve
months before the expiration of said period a majority of the members of
the union had given to the Secretary of State of the United States official
notice of their wish to terminate the union at the end of its first period,
that the union should continue to be maintained for another period of ten
years, and thereafter, under the same conditions, for successive periods of
ten years each.

The period for notification expired on July 14, 1899, without any of the
members having given the necessary notice of withdrawal. Its maintenance is
therefore assured for the next ten years. In view of this fact and of the
numerous questions of general interest and common benefit to all of the
Republics of America, some of which were considered by the first
International American Conference, but not finally settled, and others
which have since then grown to importance, it would seem expedient that the
various Republics constituting the Union should be invited to hold at an
early date another conference in the capital of one of the countries other
than the United States, which has already enjoyed this honor.

The purely international character of the work being done by the bureau and
the appreciation of its value are further emphasized by the active
co-operation which the various Governments of the Latin. American Republics
and their diplomatic representatives in this capital are now exhibiting and
the zealous endeavors they are making to extend its field of usefulness, to
promote through it commercial intercourse, and strengthen the bonds of
amity and confidence between its various members and the nations of this
continent.

The act to encourage the holding of the Pan-American Exposition on the
Niagara frontier, within the county of Erie or Niagara, in the State of New
York, in the year 1901, was approved on March 3, 1899.

This exposition, which will be held in the city of Buffalo, in the near
vicinity of the great Niagara cataract, and within a day's journey of which
reside 40, 000, 000 Of our people, will be confined entirely to the Western
Hemisphere. Satisfactory assurances have already been given by the
diplomatic representatives of Great Britain, Mexico, the Central and South
American Republics, and most of the States of the United States that these
countries and States will make an unique, interesting, and instructive
exhibit, peculiarly illustrative of their material progress during the
century which is about to close.

The law provides an appropriation Of $500,000 for the purpose of making an
exhibit at the exposition by the Government of the United States from its
Executive Departments and from the Smithsonian Institution and National
Museum, the United States Commission of Fish and Fisheries, the Department
of Labor, and the Bureau of the American Republics. To secure a complete
and harmonious arrangement of this Government exhibit a board of management
has already been created, and charged with the selection, purchase,
preparation, transportation, arrangement, and safe-keeping of the articles
and materials to be exhibited. This board has been organized and has
already entered upon the performance of its duties, as provided for by the
law.

I have every reason to hope and believe that this exposition will tend more
firmly to cement the cordial relations between the nations on this
continent.

In accordance with an act of Congress approved December 21, 1898, and under
the auspices of the Philadelphia Commercial Museum, a most interesting and
valuable exposition of products and manufactures especially adapted to
export trade was held in Philadelphia from the 14th of September to the 1st
of December, 1899. The representative character of the exhibits and the
widespread interest manifested in the special objects of the undertaking
afford renewed encouragement to those who look confidently to the steady
growth of our enlarged exportation of manufactured goods, which has been
the most remarkable fact in the economic development of the United States
in recent years. A feature of this exposition which is likely to become of
permanent and increasing utility to our industries is the collection of
samples of merchandise produced in various countries with special reference
to particular markets, providing practical object lessons to United States
manufacturers as to qualities, styles, and prices of goods such as meet the
special demands of consumers and may be exported with advantage.

In connection with the exposition an International Commercial Congress was
held, upon the invitation of the Philadelphia Commercial Museum,
transmitted by the Department of State to the various foreign Governments,
for an exchange of information and opinions with the view to the promotion
of international trade. This invitation met with general and cordial
acceptance, and the Congress, which began its sessions at the exposition on
the 13th of October proved to be of great practical importance, from the
fact that it developed a general recognition of the interdependence of
nations in trade and a most gratifying spirit of accommodation with
reference to the gradual removal of existing impediments to reciprocal
relations, without injury to the industrial interests of either party.

In response to the invitation of His Majesty, the Emperor of Russia,
delegates from twenty-six countries were assembled at The Hague on the 18th
of May, as members of a conference in the interest of peace. The commission
from the United States consisted of the Hon. Andrew D. White, the Hon. Seth
Low, the Hon. Stanford Newel, Captain Alfred T. Mahan, of the United States
Navy, Captain William Crozier, of the United States Army, and the Hon.
Frederick W. Holls, secretary. The occasion seemed to be opportune for the
serious consideration of a plan for the pacific adjustment of international
differences, a subject in which the American people have been deeply
interested for many years, and a definite project for a permanent
international tribunal was included in the instructions to the delegates of
the United States.

The final act of the conference includes conventions upon the amelioration
of the laws and customs of war on land, the adaptation to maritime warfare
of the principles of the Geneva Convention of 1864, and the extension of
judicial methods to international cases. The Convention for the Pacific
Settlement of International Conflicts embodies the leading features of the
American plan, with such modifications as were rendered necessary by the
great diversity of views and interests represented by the delegates. The
four titles of the convention provide for the maintenance of general peace,
the exercise of good offices and mediation, the formation of commissions of
inquiry, and international arbitration.

The mediation provided for by the convention is purely voluntary and
advisory, and is intended to avoid any invasion or limitation of the
sovereign rights of the adhering States. The commissions of inquiry
proposed consists of delegations to be specifically constituted for
particular purposes by means of conventions between the contesting parties,
having for their object the clear understanding of international
differences before resorting to the use of force. The provision for
arbitration contemplates the formation of a permanent tribunal before which
disputed cases may be brought for settlement by the mutual consent of the
litigants in each separate case. The advantages of such a permanent
tribunal over impromptu commissions of arbitration are conceived to be the
actual existence of a competent court, prepared to administer justice, the
greater economy resulting from a well-devised system, and the accumulated
judicial skill and experience which such a tribunal would soon possess.

While earnestly promoting the idea of establishing a permanent
international tribunal, the delegation of the United States was not
unmindful of the inconveniences which might arise from an obtrusive
exercise of mediation, and in signing the convention carefully guarded the
historic position of the United States by the following declaration:
Nothing contained in this convention shall be so construed as to require
the United States of America to depart from its traditional policy of not
intruding upon, interfering with, or entangling itself in the political
questions or policy or internal administration of any foreign state; nor
shall anything contained in the said convention be construed to imply a
relinquishment by the United. States of America of its traditional attitude
toward purely American questions. Thus interpreted, the Convention for the
Pacific Settlement of International Conflicts may be regarded as realizing
the earnest desire of great numbers of American citizens, whose deep sense
of justice, expressed in numerous resolutions and memorials, has urged them
to labor for this noble achievement. The general character of this
convention, already signed by the delegates of more than twenty sovereign
States, further commends it to the favorable action of the Senate of the
United States, whose ratification it still awaits.

Since my last annual message, and in obedience to the acts of the Congress
of April 22 and 26, 1898, the remaining volunteer force enlisted for the
Spanish War, consisting Of 34,834 regulars and 110,202 volunteers, with
over 5,000 volunteer officers, has been discharged from the military
service. Of the volunteers, 667 officers and 14,831 men were serving in the
Philippines, and 1,650 of the regulars, who were entitled to be mustered
out after the ratification of the treaty of peace. They voluntarily
remained at the front until their places could be filled by new troops.
They were returned home in the order in which they went to Manila, and are
now all of them out of the service and in the ranks of citizenship. I
recommend that the Congress provide a special medal of honor for the
volunteers, regulars, sailors, and marines on duty in the Philippines who
voluntarily remained in the service after their terms of enlistment had
expired.

By the act of March 2, 1899, Congress gave authority to increase the
Regular Army to a maximum not exceeding 65,000 enlisted men, and to enlist
a force of 5,000 volunteers, to be recruited from the country at large. By
virtue of this authority the Regular Army has been increased to the number
of 61,999 enlisted men and 2,248 officers, and new volunteer regiments have
been organized aggregating 33,050 enlisted men and 1,524 officers. Two of
these volunteer regiments are made up of colored men, with colored line
officers. The new troops to take the places of those returning from the
Philippines have been transported to Manila to the number of 581 officers
and 26,322 enlisted men of the Regular Army and 594 officers and 15,388
enlisted men of the new volunteer force, while 504 officers and 14, 119 men
of the volunteer force are on the ocean en route to Manila.

The force now in Manila consists Of 905 officers and 30,578 regulars, and
594 officers and 15,388 of the volunteers, making an aggregate of 1,499
officers and 45,966 men. When the troops now under orders shall reach
Manila the force in the archipelago will comprise 2,051 officers and 63,483
men. The muster out of the great volunteer army organized for the Spanish
War and the creation of a new army, the transportation from Manila to San
Francisco of those entitled to discharge and the transportation of the new
troops to take their places have been a work of great magnitude well and
ably done, for which too much credit cannot be given the War Department.

During the past year we have reduced our force in Cuba and Puerto Rico, In
Cuba we now have 334 officers and 10,796 enlisted men; In Puerto Rico, 87
officers and 2,855 enlisted men and a battalion of 400 men composed of
native Puerto Ricans; while stationed throughout the United States are 910
officers and 17,317 men, and in Hawaii 12 officers and 453 enlisted men.

The operations of the Army are fully presented in the report of the
Secretary of War. I cannot withhold from officers and men the highest
commendation for their soldierly conduct in trying situations, their
willing sacrifices for their country, and the integrity and ability with
which they have performed unusual and difficult duties in our island
possessions.

In the organization of the volunteer regiments authorized by the act of
March 2, 1899, it was found that no provision had been made for chaplains.
This omission was doubtless from inadvertence. I recommend the early
authorization for the appointment of one chaplain for each of said
regiments. These regiments are now in the Philippines, and it is important
that immediate action be had.

In restoring peaceful conditions, orderly rule, and civic progress in Cuba,
Puerto Rico, and, so far as practicable, in the Philippines, the
rehabilitation of the postal service has been an essential and important
part of the work. It became necessary to provide mail facilities both for
our forces of occupation and for the native population. To meet this
requirement has involved a substantial reconstruction. The existing systems
were so fragmentary, defective, and inadequate that a new and comprehensive
organization had to be created. American trained officials have been
assigned to the directing and executive positions, while natives have been
chiefly employed in making up the body of the force. In working out this
plan the merit rule has been rigorously and faithfully applied.

The appointment of Director-General of Posts of Cuba was given to an expert
who had been Chief Post-Office Inspector and Assistant Postmaster-General,
and who united large experience with administrative capacity. For the
postmastership at Havana the range of skilled and available men was
scanned, and the choice fell upon one who had been twenty years in the
service as deputy postmaster and postmaster of a large city. This principle
governed and determined the selection of the American officials sent not
only to Cuba, but to Puerto Rico and the Philippines, and they were
instructed to apply it so far as practicable in the employment of the
natives as minor postmasters and clerks. The postal system in Cuba, though
remaining under the general guidance of the Postmaster-General, was made
essentially independent. It was felt that it should not be a burden upon
the postal service of the United States, and provision was made that any
deficit in the postal revenue should be a charge upon the general revenues
of the island.

Though Puerto Rico and the Philippines hold a different relation to the
United States, yet, for convenience of administration, the same principle
of an autonomous system has been extended to them. The development of the
service in all of the islands has been rapid and successful. It has moved
forward on American lines, with free delivery, money order, and registry
systems, and has given the people mail facilities far greater and more
reliable than any they have ever before enjoyed. It is thus not only a
vital agency of industrial, social, and business progress, but an important
influence in diffusing a just understanding of the true spirit and
character of American administration.

The domestic postal service continues to grow with extraordinary rapidity.
The expenditures and the revenues will each exceed $100,000,000 during the
current year. Fortunately, since the revival of prosperous times the
revenues have grown much faster than the expenditures, and there is every
indication that a short period will witness the obliteration of the annual
deficit. In this connection the report of the Postmaster-General embodies a
statement of some evils which have grown up outside of the contemplation of
law in the treatment of some classes of mail matter which wrongly exercise
the privilege of the pound rate, and shows that if this matter had been
properly classified and had paid the rate which it should have paid,
instead of a postal deficit for the last fiscal year of $6,610,000, there
would have been on one basis a surplus of $17,637,570, and on another Of
$5,733,836. The reform thus suggested, in the opinion of the
Postmaster-General, would not only put the postal service at once on a
self-sustaining basis, but would permit great and valuable improvements,
and I commend the subject to the consideration of the Congress.

The Navy has maintained the spirit and high efficiency which have always
characterized that service, and has lost none of the gallantry in heroic
action which has signalized its brilliant and glorious past. The Nation has
equal pride in its early and later achievements. Its habitual readiness for
every emergency has won the confidence and admiration of the country. The
people are interested in the continued preparation and prestige of the Navy
and will justify liberal appropriations for its maintenance and
improvement. The officers have shown peculiar adaptation for the
performance of new and delicate duties which our recent war has imposed.

It cannot be doubted that Congress will at once make necessary provision
for the armor plate for the vessels now under contract and building. Its
attention is respectfully called to the report of the Secretary of the
Navy, in which the subject is fully presented. I unite in his
recommendation that the Congress enact such special legislation as may be
necessary to enable the Department to make contracts early in the coming
year for armor of the best quality that can be obtained in this country for
the Maine, Ohio, and Missouri, and that the provision of the act of March
3, 1899, limiting the price of armor to $300 per ton be removed.

In the matter of naval construction Italy and Japan, of the great powers,
laid down less tonnage in the year 1899 than this country, and Italy alone
has less tonnage under construction. I heartily concur in the
recommendations for the increase of the Navy, as suggested by the
Secretary.

Our future progress and prosperity depend upon our ability to equal, if not
surpass, other nations in the enlargement and advance of science, industry,
and commerce. To invention we must turn as one of the most powerful aids to
the accomplishment of such a result. The attention of the Congress is
directed to the report of the Commissioner of Patents, in which will be
found valuable suggestions and recommendations.

On the 30th of June, 1899, the pension roll of the United States numbered
991,519. These include the pensioners of the Army and Navy in all our wars.
The number added to the rolls during the year was 40,991. The number
dropped by reason of death, remarriage, minors by legal limitation, failure
to claim within three years, and other causes, was 43, 186, and the number
of claims disallowed was 107,919. During the year 89,054 pension
certificates were issued, of which 37,077 were for new or original
pensions. The amount disbursed for army and navy pensions during the year
was $138,355,052.95, which was $1,651,461.61 less than the sum of the
appropriations.

The Grand Army of the Republic at its recent national encampment held in
Philadelphia has brought to my attention and to that of the Congress the
wisdom and justice of a modification of the third section of the act of
June 27, 1890, which provides pensions for the widows of officers and
enlisted men who served ninety days or more during the War of the Rebellion
and were honorably discharged, provided that such widows are without other
means of sup, port than their daily labor and were married to the soldier,
sailor, or marine on account of whose service they claim pension prior to
the date of the act.

The present holding of the Department is that if the widow's income aside
from her daily labor does not exceed in amount what her pension would be,
to wit, $96 per annum, she would be deemed to be without other means of
support than her daily labor, and would be entitled to a pension under this
act; while if the widow's income independent of the amount received by her
as the result of her daily labor exceeds $96, she would not be pensionable
under the act. I am advised by the Commissioner of Pensions that the amount
of the income allowed before title to pension would be barred has varied
widely under different administrations of the Pension Office, as well as
during different periods of the same administration, and has been the cause
of just complaint and criticism.

With the approval of the Secretary of the Interior the Commissioner of
Pensions recommends that, in order to make the practice at all times
uniform and to do justice to the dependent widow, the amount of income
allowed independent of the proceeds of her daily labor should be not less
than $250 per annum, and he urges that the Congress shall so amend the act
as to permit the Pension Office to grant pensionable status to widows under
the terms of the third section of the act of June 27, 1890, whose income
aside from the proceeds of daily labor is not in excess of $250 per annum.
I believe this to be a simple act of justice and heartily recommend it.

The Dawes Commission reports that gratifying progress has been made in its
work during the preceding year. The field-work of enrollment of four of the
nations has been completed. I recommend that Congress at an early day make
liberal appropriation for educational purposes in the Indian Territory.

In accordance with the act of Congress approved March 3, 1899. the
preliminary work in connection with the Twelfth Census is now fully under
way. The officers required for the proper administration of the duties
imposed have been selected. The provision for securing a proper enumeration
of the population, as well as to secure evidence of the industrial growth
of the Nation, is broader and more comprehensive than any similar
legislation in the past. The Director advises that every needful effort is
being made to push this great work to completion in the time limited by the
statute. It is believed that the Twelfth Census will emphasize our
remarkable advance in all that pertains to national progress.

Under the authority of the act of Congress approved July 7, 1898, the
commission consisting of the Secretary of the Treasury, the
Attorney-General, and the Secretary of the Interior has made an agreement
of settlement, which has had my approval, of the indebtedness to the
Government growing out of the issue of bonds to aid in the construction of
the Central Pacific and Western Pacific railroads. The agreement secures
to the Government the principal and interest of said bonds, amounting to
$58,812,715.48. There has been paid thereon $11,762,543.12, which has been
covered into the Treasury, and the remainder, payable within ten years,
with interest at the rate Of 3 per cent per annum, payable semiannually, is
secured by the deposit of an equal amount of first-mortgage bonds of the
Pacific Railway companies. The amounts paid and secured to be paid to the
Government on account of the Pacific Railroad subsidy claims are: Union
Pacific, cash - $58,448,223.75

Kansas Pacific, cash - 6,303,000.00

Central and Western Pacific, cash - 11,798,314.14

Notes, secured - 47,050,172.36

Kansas Pacific--dividends for deficiency due United States, cash -
821,897.70 -