Speech Transcript:

To the Senate and House of Representatives:

In submitting my seventh annual message to Congress, in this
centennial year of our national existence as a free and independent
people, it affords me great pleasure to recur to the advancement that
has been made from the time of the colonies, one hundred years ago. We
were then a people numbering only 3,000,000. Now we number more than
40,000,000. Then industries were confined almost exclusively to the
tillage of the soil. Now manufactories absorb much of the labor of
the country.

Our liberties remain unimpaired; the bondmen have been freed from
slavery; we have become possessed of the respect, if not the
friendship, of all civilized nations. Our progress has been great in
all the arts--in science, agriculture, commerce, navigation, mining,
mechanics, law, medicine, etc.; and in general education the progress
is likewise encouraging. Our thirteen States have become thirty-eight,
including Colorado (which has taken the initiatory steps to become a
State), and eight Territories, including the Indian Territory and
Alaska, and excluding Colorado, making a territory extending from the
Atlantic to the Pacific. On the south we have extended to the Gulf of
Mexico, and in the west from the Mississippi to the Pacific.

One hundred years ago the cotton gin, the steamship, the railroad,
the telegraph, the reaping, sewing, and modern printing machines, and
numerous other inventions of scarcely less value to our business and
happiness were entirely unknown.

In 1776 manufactories scarcely existed even in name in all this vast
territory. In 1870 more than 2,000,000 persons were employed in
manufactories, producing more than $2,100,000,000 of products in
amount annually, nearly equal to our national debt. From nearly the
whole of the population of 1776 being engaged in the one occupation
of agriculture, in 1870 so numerous and diversified had become the
occupation of our people that less than 6,000,000 out of more than
40,000,000 were so engaged. The extraordinary effect produced in our
country by a resort to diversified occupations has built a market for
the products of fertile lands distant from the seaboard and the
markets of the world.

The American system of locating various and extensive manufactories
next to the plow and the pasture, and adding connecting railroads and
steamboats, has produced in our distant interior country a result
noticeable by the intelligent portions of all commercial nations. The
ingenuity and skill of American mechanics have been demonstrated at
home and abroad in a manner most flattering to their pride. But for
the extraordinary genius and ability of our mechanics, the
achievements of our agriculturists, manufacturers, and transporters
throughout the country would have been impossible of attainment.

The progress of the miner has also been great. Of coal our production
has small; now many millions of tons are mined annually. So with iron,
which formed scarcely an appreciable part of our products half a
century ago, we now produce more than the world consumed at the
beginning of our national existence. Lead, zinc, and copper, from
being articles of import, we may expect to be large exporters of in
the near future. The development of gold and silver mines in the
United States and Territories has not only been remarkable, but has
had a large influence upon the business of all commercial nations.
Our merchants in the last hundred years have had a success and have
established a reputation for enterprise, sagacity, progress, and
integrity unsurpassed by peoples of older nationalities. This "good
name" is not confined to their homes, but goes out upon every sea and
into every port where commerce enters. With equal pride we can point
to our progress in all of the learned professions.

As we are now about to enter upon our second centennial--commenting
our manhood as a nation--it is well to look back upon the past and
study what will be best to preserve and advance our future greatness
From the fall of Adam for his transgression to the present day no
nation has ever been free from threatened danger to its prosperity
and happiness. We should look to the dangers threatening us, and
remedy them so far as lies in our power. We are a republic whereof
one man is as good as another before the law. Under such a form of
government it is of the greatest importance that all should be
possessed of education and intelligence enough to cast a vote with a
right understanding of its meaning. A large association of ignorant
men can not for any considerable period oppose a successful
resistance to tyranny and oppression from the educated few, but will
inevitably sink into acquiescence to the will of intelligence,
whether directed by the demagogue or by priestcraft. Hence the
education of the masses becomes of the first necessity for the
preservation of our institutions. They are worth preserving, because
they have secured the greatest good to the greatest proportion of the
population of any form of government yet devised. All other forms of
government approach it just in proportion to the general diffusion of
education and independence of thought and action. As the primary step,
therefore, to our advancement in all that has marked our progress in
the past century, I suggest for your earnest consideration, and most
earnestly recommend it, that a constitutional amendment be submitted
to the legislatures of the several States for ratification, making it
the duty of each of the several States to establish and forever
maintain free public schools adequate to the education of all the
children in the rudimentary branches within their respective limits,
irrespective of sex, color, birthplace, or religions; forbidding the
teaching in said schools of religious, atheistic, or pagan tenets;
and prohibiting the granting of any school funds or school taxes, or
any part thereof, either by legislative, municipal, or other
authority, for the benefit or in aid, directly or indirectly, of any
religious sect or denomination, or in aid or for the benefit of any
other object of any nature or kind whatever.

In connection with this important question I would also call your
attention to the importance of correcting an evil that, if permitted
to continue, will probably lead to great trouble in our land before
the close of the nineteenth century. It is the accumulation of vast
amounts of untaxed church property.

In 1850, I believe, the church property of the United States which
paid no tax, municipal or State, amounted to about $83,000,000. In
1860 the amount had doubled; in 1875 it is about $1,000,000,000. By
1900, without check, it is safe to say this property will reach a sum
exceeding $3,000,000,000. So vast a sum, receiving all the protection
and benefits of Government without bearing its proportion of the
burdens and expenses of the same, will not be looked upon
acquiescently by those who have to pay the taxes. In a growing
country, where real estate enhances so rapidly with time as in the
United States, there is scarcely a limit to the wealth that may be
acquired by corporations, religious or otherwise, if allowed to
retain real estate without taxation. The contemplation of so vast a
property as here alluded to, without taxation, may lead to
sequestration without constitutional authority and through blood.

I would suggest the taxation of all property equally, whether church
or corporation, exempting only the last resting place of the dead and
possibly, with proper restrictions, church edifices.

Our relations with most of the foreign powers continue on a
satisfactory and friendly footing.

Increased intercourse, the extension of commerce, and the cultivation
of mutual interests have steadily improved our relations with the
large majority of the powers of the world, rendering practicable the
peaceful solution of questions which from time to time necessarily
arise, leaving few which demand extended or particular notice.

The correspondence of the Department of State with our diplomatic
representatives abroad is transmitted herewith.

I am happy to announce the passage of an act by the General Cortes of
Portugal, proclaimed since the adjournment of Congress, for the
abolition of servitude in the Portuguese colonies. It is to be hoped
that such legislation may be another step toward the great
consummation to be reached, when no man shall be permitted, directly
or indirectly, under any guise, excuse, or form of law, to hold his
fellow-man in bondage. I am of opinion also that it is the duty of
the United States, as contributing toward that end, and required by
the spirit of the age in which we live, to provide by suitable
legislation that no citizen of the United States shall hold slaves as
property in any other country or be interested therein.

Chile has made reparation in the case of the whale ship Good Return,
seized without sufficient cause upward of forty years ago. Though she
had hitherto denied her accountability, the denial was never
acquiesced in by this Government, and the justice of the claim has
been so earnestly contended for that it has been gratifying that she
should have at last acknowledged it.

The arbitrator in the case of the United States steamer Montijo, for
the seizure and detention of which the Government of the United
States of Colombia was held accountable, has decided in favor of the
claim. This decision has settled a question which had been pending
for several years, and which, while it continued open, might more or
less disturb the good understanding which it is desirable should be
maintained between the two Republics.

A reciprocity treaty with the King of the Hawaiian Islands was
concluded some months since. As it contains a stipulation that it
shall not take effect until Congress shall enact the proper
legislation for that purpose, copies of the instrument are herewith
submitted, in order that, if such should be the pleasure of Congress,
the necessary legislation upon the subject may be adopted.

In March last an arrangement was made, through Mr. Cushing, our
minister in Madrid, with the Spanish Government for the payment by
the latter to the United States of the sum of $80,000 in coin, for
the purpose of the relief of the families or persons of the ship's
company and certain passengers of the Virginius. This sum was to have
been paid in three installments at two months each. It is due to the
Spanish Government that I should state that the payments were fully
and spontaneously anticipated by that Government, and that the whole
amount was paid within but a few days more than two months from the
date of the agreement, a copy of which is herewith transmitted. In
pursuance of the terms of the adjustment, I have directed the
distribution of the amount among the parties entitled thereto,
including the ship's company and such of the passengers as were
American citizens. Payments are made accordingly, on the application
by the parties entitled thereto.

The past year has furnished no evidence of an approaching termination
of the ruinous conflict which has been raging for seven years in the
neighboring island of Cuba. The same disregard of the laws of
civilized warfare and of the just demands of humanity which has
heretofore called forth expressions of condemnation from the nations
of Christendom has continued to blacken the sad scene. Desolation,
ruin, and pillage are pervading the rich fields of one of the most
fertile and productive regions of the earth, and the incendiary's
torch, firing plantations and valuable factories and buildings, is
the agent marking the alternate advance or retreat of contending
parties.

The protracted continuance of this strife seriously affects the
interests of all commercial nations, but those of the United States
more than others, by reason of close proximity, its larger trade and
intercourse with Cuba, and the frequent and intimate personal and
social relations which have grown up between its citizens and those
of the island. Moreover, the property of our citizens in Cuba is
large, and is rendered insecure and depreciated in value and in
capacity of production by the continuance of the strife and the
unnatural mode of its conduct. The same is true, differing only in
degree, with respect to the interests and people of other nations;
and the absence of any reasonable assurance of a near termination of
the conflict must of necessity soon compel the States thus suffering
to consider what the interests of their own people and their duty
toward themselves may demand.

I have hoped that Spain would be enabled to establish peace in her
colony, to afford security to the property and the interests of our
citizens, and allow legitimate scope to trade and commerce and the
natural productions of the island. Because of this hope, and from an
extreme reluctance to interfere in the most remote manner in the
affairs of another and a friendly nation, especially of one whose
sympathy and friendship in the struggling infancy of our own
existence must ever be remembered with gratitude, I have patiently
and anxiously waited the progress of events. Our own civil conflict
is too recent for us not to consider the difficulties which surround
a government distracted by a dynastic rebellion at home at the same
time that it has to cope with a separate insurrection in a distant
colony. But whatever causes may have produced the situation which so
grievously affects our interests, it exists, with all its attendant
evils operating directly upon this country and its people. Thus far
all the efforts of Spain have proved abortive, and time has marked no
improvement in the situation. The armed bands of either side now
occupy nearly the same ground as in the past, with the difference,
from time to time, of more lives sacrificed, more property destroyed,
and wider extents of fertile and productive fields and more and more
of valuable property constantly wantonly sacrificed to the
incendiary's torch.

In contests of this nature, where a considerable body of people who
have attempted to free themselves of the control of the superior
government have reached such point in occupation of territory, in
power, and in general organization as to constitute in fact a body
politic; having a government in substance as well as in name;
possessed of the elements of stability and equipped with the
machinery for the administration of internal policy and the execution
of its laws; prepared and able to administer justice at home, as well
as in its dealings with other powers, it is within the province of
those other powers to recognize its existence as a new and
independent nation. In such cases other nations simply deal with an
actually existing condition of things, and recognize as one of the
powers of the earth that body politic which, possessing the necessary
elements, has in fact become a new power. In a word, the creation of a
new state is a fact.

To establish the condition of things essential to the recognition of
this fact there must be a people occupying a known territory, united
under some known and defined form of government, acknowledged by
those subject thereto, in which the functions of government are
administered by usual methods, competent to mete out justice to
citizens and strangers, to afford remedies for public and for private
wrongs, and able to assume the correlative international obligations
and capable of performing the corresponding international duties
resulting from its acquisition of the rights of sovereignty. A power
should exist complete in its organization, ready to take and able to
maintain its place among the nations of the earth.

While conscious that the insurrection in Cuba has shown a strength
and endurance which make it at least doubtful whether it be in the
power of Spain to subdue it, it seems unquestionable that no such
civil organization exists which may be recognized as an independent
government capable of performing its international obligations and
entitled to be treated as one of the powers of the earth. A
recognition under such circumstances would be inconsistent with the
facts, and would compel the power granting it soon to support by
force the government to which it had really given its only claim of
existence. In my judgment the United States should adhere to the
policy and the principles which have heretofore been its sure and
safe guides in like contests between revolted colonies and their
mother country, and, acting only upon the clearest evidence, should
avoid any possibility of suspicion or of imputation.

A recognition of the independence of Cuba being, in my opinion,
impracticable and indefensible, the question which next presents
itself is that of the recognition of belligerent rights in the
parties to the contest.

In a former message to Congress I had occasion to consider this
question, and reached the conclusion that the conflict in Cuba,
dreadful and devastating as were its incidents, did not rise to the
fearful dignity of war. Regarding it now, after this lapse of time, I
am unable to see that any notable success or any marked or real
advance on the part of the insurgents has essentially changed the
character of the contest. It has acquired greater age, but not
greater or more formidable proportions. It is possible that the acts
of foreign powers, and even acts of Spain herself, of this very
nature, might be pointed to in defense of such recognition. But now,
as in its past history, the United States should carefully avoid the
false lights which might lead it into the mazes of doubtful law and
of questionable propriety, and adhere rigidly and sternly to the
rule, which has been its guide, of doing only that which is right and
honest and of good report. The question of according or of withholding
rights of belligerency must be judged in every case in view of the
particular attending facts. Unless justified by necessity, it is
always, and justly, regarded as an unfriendly act and a gratuitous
demonstration of moral support to the rebellion. It is necessary, and
it is required, when the interests and rights of another government or
of its people are so far affected by a pending civil conflict as to
require a definition of its relations to the parties thereto. But
this conflict must be one which will be recognized in the sense of
international law as war. Belligerence, too, is a fact. The mere
existence of contending armed bodies and their occasional conflicts
do not constitute war in the sense referred to. Applying to the
existing condition of affairs in Cuba the tests recognized by
publicists and writers on international law, and which have been
observed by nations of dignity, honesty, and power when free from
sensitive or selfish and unworthy motives, I fail to find in the
insurrection the existence of such a substantial political
organization, real, palpable, and manifest to the world, having the
forms and capable of the ordinary functions of government toward its
own people and to other states, with courts for the administration of
justice, with a local habitation, possessing such organization of
force, such material, such occupation of territory, as to take the
contest out of the category of a mere rebellious insurrection or
occasional skirmishes and place it on the terrible footing of war, to
which a recognition of belligerency would aim to elevate it. The
contest, moreover, is solely on land; the insurrection has not
possessed itself of a single seaport whence it may send forth its
flag, nor has it any means of communication with foreign powers
except through the military lines of its adversaries. No apprehension
of any of those sudden and difficult complications which a war upon
the ocean is apt to precipitate upon the vessels, both commercial and
national, and upon the consular officers of other powers calls for the
definition of their relations to the parties to the contest.
Considered as a question of expediency, I regard the accordance of
belligerent rights still to be as unwise and premature as I regard it
to be, at present, indefensible as a measure of right. Such
recognition entails upon the country according the rights which flow
from it difficult and complicated duties, and requires the exaction
from the contending parties of the strict observance of their rights
and obligations; it confers the right of search upon the high seas by
vessels of both parties; it would subject the carrying of arms and
munitions of war, which now may be transported freely and without
interruption in the vessels of the United States, to detention and to
possible seizure; it would give rise to countless vexatious questions,
would release the parent Government from responsibility for acts done
by the insurgents, and would invest Spain with the right to exercise
the supervision recognized by our treaty of 1795 over our commerce on
the high seas, a very large part of which, in its traffic between the
Atlantic and the Gulf States and between all of them and the States
on the Pacific, passes through the waters which wash the shores of
Cuba. The exercise of this supervision could scarce fail to lead, if
not to abuses, certainly to collisions perilous to the peaceful
relations of the two States. There can be little doubt to what result
such supervision would before long draw this nation. It would be
unworthy of the United States to inaugurate the possibilities of such
result by measures of questionable right or expediency or by any
indirection. Apart from any question of theoretical right, I am
satisfied that while the accordance of belligerent rights to the
insurgents in Cuba might give them a hope and an inducement to
protract the struggle, it would be but a delusive hope, and would not
remove the evils which this Government and its people are
experiencing, but would draw the United States into complications
which it has waited long and already suffered much to avoid. The
recognition of independence or of belligerency being thus, in my
judgment, equally inadmissible, it remains to consider what course
shall be adopted should the conflict not soon be brought to an end by
acts of the parties themselves, and should the evils which result
therefrom, affecting all nations, and particularly the United States,
continue. In such event I am of opinion that other nations will be
compelled to assume the responsibility which devolves upon them, and
to seriously consider the only remaining measures possible--mediation
and intervention, Owing, perhaps, to the large expanse of water
separating the island from the peninsula, the want of harmony and of
personal sympathy between the inhabitants of the colony and those
sent thither to rule them, and want of adaptation of the ancient
colonial system of Europe to the present times and to the ideas which
the events of the past century have developed, the contending parties
appear to have within themselves no depository of common confidence
to suggest wisdom when passion and excitement have their sway and to
assume the part of peacemaker. In this view in the earlier days of
the contest the good offices of the United States as a mediator were
tendered in good faith, without any selfish purpose, in the interest
of humanity and in sincere friendship for both parties, but were at
the time declined by Spain, with the declaration, nevertheless, that
at a future time they would be indispensable. No intimation has been
received that in the opinion of Spain that time has been reached. And
yet the strife continues, with all its dread horrors and all its
injuries to the interests of the United States and of other nations.
Each party seems quite capable of working great injury and damage to
the other, as well as to all the relations and interests dependent on
the existence of peace in the island; but they seem incapable of
reaching any adjustment, and both have thus far failed of achieving
any success whereby one party shall possess and control the island to
the exclusion of the other. Under these circumstances the agency of
others, either by mediation or by intervention, seems to be the only
alternative which must, sooner or later, be invoked for the
termination of the strife. At the same time, while thus impressed I
do not at this time recommend the adoption of any measure of
intervention. I shall be ready at all times, and as the equal friend
of both parties, to respond to a suggestion that the good offices of
the United States will be acceptable to aid in bringing about a peace
honorable to both. It is due to Spain, so far as this Government is
concerned, that the agency of a third power, to which I have
adverted, shall be adopted only as a last expedient. Had it been the
desire of the United States to interfere in the affairs of Cuba,
repeated opportunities for so doing have been presented within the
last few years; but we have remained passive, and have performed our
whole duty and all international obligations to Spain with
friendship, fairness, and fidelity, and with a spirit of patience and
forbearance which negatives every possible suggestion of desire to
interfere or to add to the difficulties with which she has been
surrounded.

The Government of Spain has recently submitted to our minister at
Madrid certain proposals which it is hoped may be found to be the
basis, if not the actual submission, of terms to meet the
requirements of the particular griefs of which this Government has
felt itself entitled to complain. These proposals have not yet
reached me in their full text. On their arrival they will be taken
into careful examination, and may, I hope, lead to a satisfactory
adjustment of the questions to which they refer and remove the
possibility of future occurrences such as have given rise to our just
complaints.

It is understood also that renewed efforts are being made to
introduce reforms in the internal administration of the island.
Persuaded, however, that a proper regard for the interests of the
United States and of its citizens entitles it to relief from the
strain to which it has been subjected by the difficulties of the
questions and the wrongs and losses which arise from the contest in
Cuba, and that the interests of humanity itself demand the cessation
of the strife before the whole island shall be laid waste and larger
sacrifices of life be made, I shall feel it my duty, should my hopes
of a satisfactory adjustment and of the early restoration of peace
and the removal of future causes of complaint be, unhappily,
disappointed, to make a further communication to Congress at some
period not far remote, and during the present session, recommending
what may then seem to me to be necessary.

The free zone, so called, several years since established by the
Mexican Government in certain of the States of that Republic adjacent
to our frontier, remains in full operation. It has always been
materially injurious to honest traffic, for it operates as an
incentive to traders in Mexico to supply without customs charges the
wants of inhabitants on this side of the line, and prevents the same
wants from being supplied by merchants of the United States, thereby
to a considerable extent defrauding our revenue and checking honest
commercial enterprise.

Depredations by armed bands from Mexico on the people of Texas near
the frontier continue. Though the main object of these incursions is
robbery, they frequently result in the murder of unarmed and
peaceably disposed persons, and in some instances even the United
States post-offices and mail communications have been attacked.
Renewed remonstrances upon this subject have been addressed to the
Mexican Government, but without much apparent effect. The military
force of this Government disposable for service in that quarter is
quite inadequate to effectually guard the line, even at those points
where the incursions are usually made. An experiment of an armed
vessel on the Rio Grande for that purpose is on trial, and it is
hoped that, if not thwarted by the shallowness of the river and other
natural obstacles, it may materially contribute to the protection of
the herdsmen of Texas.

The proceedings of the joint commission under the convention between
the United States and Mexico of the 4th of July, 1868, on the subject
of claims, will soon be brought to a close. The result of those
proceedings will then be communicated to Congress.

I am happy to announce that the Government of Venezuela has, upon
further consideration, practically abandoned its objection to pay to
the United States that share of its revenue which some years since it
allotted toward the extinguishment of the claims of foreigners
generally. In thus reconsidering its determination that Government
has shown a just sense of self-respect which can not fail to reflect
credit upon it in the eyes of all disinterested persons elsewhere. It
is to be regretted, however, that its payments on account of claims of
citizens of the United States are still so meager in amount, and that
the stipulations of the treaty in regard to the sums to be paid and
the periods when those payments were to take place should have been
so signally disregarded.

Since my last annual message the exchange has been made of the
ratification of a treaty of commerce and navigation with Belgium, and
of conventions with the Mexican Republic for the further extension of
the joint commission respecting claims; with the Hawaiian Islands for
commercial reciprocity, and with the Ottoman Empire for extradition;
all of which have been duly proclaimed.

The Court of Commissioners of Alabama Claims has prosecuted its
important duties very assiduously and very satisfactorily. It
convened and was organized on the 22d day of July, 1874, and by the
terms of the act under which it was created was to exist for one year
from that date. The act provided, however, that should it be found
impracticable to complete the work of the court before the expiration
of the year the President might by proclamation extend the time of its
duration to a period not more than six months beyond the expiration of
the one year.

Having received satisfactory evidence that it would be impracticable
to complete the work within the time originally fixed, I issued a
proclamation (a copy of which is presented herewith) extending the
time of duration of the court for a period of six months from and
after the 22d day of July last.

A report made through the clerk of the court (communicated herewith)
shows the condition of the calendar on the 1st of November last and
the large amount of work which has been accomplished. One thousand
three hundred and eighty-two claims have been presented, of which 682
had been disposed of at the date of the report. I am informed that 170
cases were decided during the month of November. Arguments are being
made and decisions given in the remaining cases with all the dispatch
consistent with the proper consideration of the questions submitted.
Many of these claims are in behalf of mariners, or depend on the
evidence of mariners, whose absence has delayed the taking or the
return of the necessary evidence.

It is represented to me that it will be impracticable for the court
to finally dispose of all the cases before it within the present
limit of its duration. Justice to the parties claimant, who have been
at large expense in preparing their claims and obtaining the evidence
in their support, suggests a short extension, to enable the court to
dispose of all of the claims which have been presented.

I recommend the legislation which may be deemed proper to enable the
court to complete the work before it.

I recommend that some suitable provision be made, by the creation of
a special court or by conferring the necessary jurisdiction upon some
appropriate tribunal, for the consideration and determination of the
claims of aliens against the Government of the United States which
have arisen within some reasonable limitation of time, or which may
hereafter arise, excluding all claims barred by treaty provisions or
otherwise. It has been found impossible to give proper consideration
to these claims by the Executive Departments of the Government. Such
a tribunal would afford an opportunity to aliens other than British
subjects to present their claims on account of acts committed against
their persons or property during the rebellion, as also to those
subjects of Great Britain whose claims, having arisen subsequent to
the 9th day of April, 1865, could not be presented to the late
commission organized pursuant to the provisions of the treaty of
Washington.

The electric telegraph has become an essential and indispensable
agent in the transmission of business and social messages. Its
operation on land, and within the limit of particular states, is
necessarily under the control of the jurisdiction within which it
operates. The lines on the high seas, however, are not subject to the
particular control of any one government.

In 1869 a concession was granted by the French Government to a
company which proposed to lay a cable from the shores of France to
the United States. At that time there was a telegraphic connection
between the United States and the continent of Europe (through the
possessions of Great Britain at either end of the line), under the
control of an association which had, at large outlay of capital and
at great risk, demonstrated the practicability of maintaining such
means of communication. The cost of correspondence by this agency was
great, possibly not too large at the time for a proper remuneration
for so hazardous and so costly an enterprise. It was, however, a
heavy charge upon a means of communication which the progress in the
social and commercial intercourse of the world found to be a
necessity, and the obtaining of this French concession showed that
other capital than that already invested was ready to enter into
competition, with assurance of adequate return for their outlay.
Impressed with the conviction that the interests, not only of the
people of the United States, but of the world at large, demanded, or
would demand, the multiplication of such means of communication
between separated continents, I was desirous that the proposed
connection should be made; but certain provisions of this concession
were deemed by me to be objectionable, particularly one which gave
for a long term of years the exclusive right of telegraphic
communication by submarine cable between the shores of France and the
United States. I could not concede that any power should claim the
right to land a cable on the shores of the United States and at the
same time deny to the United States, or to its citizens or grantees,
an equal fight to land a cable on its shores. The right to control
the conditions for the laying of a cable within the jurisdictional
waters of the United States, to connect our shores with those of any
foreign state, pertains exclusively to the Government of the United
States, under such limitations and conditions as Congress may impose.
In the absence of legislation by Congress I was unwilling, on the one
hand, to yield to a foreign state the right to say that its grantees
might land on our shores while it denied a similar right to our
people to land on its shores, and, on the other hand, I was reluctant
to deny to the great interests of the world and of civilization the
facilities of such communication as were proposed. I therefore
withheld any resistance to the landing of the cable on condition that
the offensive monopoly feature of the concession be abandoned, and
that the right of any cable which may be established by authority of
this Government to land upon French territory and to connect with
French land lines and enjoy all the necessary facilities or
privileges incident to the use thereof upon as favorable terms as any
other company be conceded. As the result thereof the company in
question renounced the exclusive privilege, and the representative of
France was informed that, understanding this relinquishment to be
construed as granting the entire reciprocity and equal facilities
which had been demanded, the opposition to the landing of the cable
was withdrawn. The cable, under this French concession, was landed in
the month of July, 1869, and has been an efficient and valuable agent
of communication between this country and the other continent. It
soon passed under the control, however, of those who had the
management of the cable connecting Great Britain with this continent,
and thus whatever benefit to the public might have ensued from
competition between the two lines was lost, leaving only the greater
facilities of an additional line and the additional security in case
of accident to one of them. But these increased facilities and this
additional security, together with the control of the combined
capital of the two companies, gave also greater power to prevent the
future construction of other lines and to limit the control of
telegraphic communication between the two continents to those
possessing the lines already laid. Within a few months past a cable
has been laid, known as the United States Direct Cable Company,
connecting the United States directly with Great Britain. As soon as
this cable was reported to be laid and in working order the rates of
the then existing consolidated companies were greatly reduced. Soon,
however, a break was announced in this new cable, and immediately the
rates of the other line, which had been reduced, were again raised.
This cable being now repaired, the rates appear not to be reduced by
either line from those formerly charged by the consolidated
companies.

There is reason to believe that large amounts of capital, both at
home and abroad, are ready to seek profitable investment in the
advancement of this useful and most civilizing means of intercourse
and correspondence. They await, however, the assurance of the means
and conditions on which they may safely be made tributary to the
general good.

As these cable telegraph lines connect separate states, there are
questions as to their organization and control which probably can be
best, if not solely, settled by conventions between the respective
states. In the absence, however, of international conventions on the
subject, municipal legislation may secure many points which appear to
me important, if not indispensable for the protection of the public
against the extortions which may result from a monopoly of the right
of operating cable telegrams or from a combination between several
lines:

I. No line should be allowed to land on the shores of the United
States under the concession from another power which does not admit
the right of any other line or lines, formed in the United States, to
land and freely connect with and operate through its land lines.

II. No line should be allowed to land on the shores of the United
States which is not, by treaty stipulation with the government from
whose shores it proceeds, or by prohibition in its charter, or
otherwise to the satisfaction of this Government, prohibited from
consolidating or amalgamating with any other cable telegraph line, or
combining therewith for the purpose of regulating and maintaining the
cost of telegraphing.

III. All lines should be bound to give precedence in the transmission
of the official messages of the governments of the two countries
between which it may be laid.

IV. A power should be reserved to the two governments, either
conjointly or to each, as regards the messages dispatched from its
shores, to fix a limit to the charges to be demanded for the
transmission of messages.

I present this subject to the earnest consideration of Congress.

In the meantime, and unless Congress otherwise direct, I shall not
oppose the landing of any telegraphic cable which complies with and
assents to the points above enumerated, but will feel it my duty to
prevent the landing of any which does not conform to the first and
second points as stated, and which will not stipulate to concede to
this Government the precedence in the transmission of its official
messages and will not enter into a satisfactory arrangement with
regard to its charges.

Among the pressing and important subjects to which, in my opinion,
the attention of Congress should be directed are those relating to
fraudulent naturalization and expatriation.

The United States, with great liberality, offers its citizenship to
all who in good faith comply with the requirements of law. These
requirements are as simple and upon as favorable terms to the
emigrant as the high privilege to which he is admitted can or should
permit. I do not propose any additional requirements to those which
the law now demands; but the very simplicity and the want of
unnecessary formality in our law have made fraudulent naturalization
not infrequent, to the discredit and injury of all honest citizens,
whether native or naturalized. Cases of this character are
continually being brought to the notice of the Government by our
representatives abroad, and also those of persons resident in other
countries, most frequently those who, if they have remained in this
country long enough to entitle them to become naturalized, have
generally not much overpassed that period, and have returned to the
country of their origin, where they reside, avoiding all duties to
the United States by their absence, and claiming to be exempt from
all duties to the country of their nativity and of their residence by
reason of their alleged naturalization. It is due to this Government
itself and to the great mass of the naturalized citizens who
entirely, both in name and in fact, become citizens of the United
States that the high privilege of citizenship of the United States
should not be held by fraud or in derogation of the laws and of the
good name of every honest citizen. On many occasions it has been
brought to the knowledge of the Government that certificates of
naturalization are held and protection or interference claimed by
parties who admit that not only they were not within the United
States at the time of the pretended naturalization, but that they
have never resided in the United States; in others the certificate
and record of the court show on their face that the person claiming
to be naturalized had not resided the required time in the United
States; in others it is admitted upon examination that the
requirements of law have not been complied with; in some cases, even,
such certificates have been matter of purchase. These are not isolated
cases, arising at rare intervals, but of common occurrence, and which
are reported from all quarters of the globe. Such occurrences can
not, and do not, fail to reflect upon the Government and injure all
honest citizens. Such a fraud being discovered, however, there is no
practicable means within the control of the Government by which the
record of naturalization can be vacated; and should the certificate
be taken up, as it usually is, by the diplomatic and consular
representatives of the Government to whom it may have been presented,
there is nothing to prevent the person claiming to have been
naturalized from obtaining a new certificate from the court in place
of that which has been taken from him.

The evil has become so great and of such frequent occurrence that I
can not too earnestly recommend that some effective measures be
adopted to provide a proper remedy and means for the vacating of any
record thus fraudulently made, and of punishing the guilty parties to
the transaction.

In this connection I refer also to the question of expatriation and
the election of nationality.

The United States was foremost in upholding the right of
expatriation, and was principally instrumental in overthrowing the
doctrine of perpetual allegiance. Congress has declared the right of
expatriation to be a natural and inherent right of all people; but
while many other nations have enacted laws providing what formalities
shall be necessary to work a change of allegiance, the United States
has enacted no provisions of law and has in no respect marked out how
and when expatriation may be accomplished by its citizens. Instances
are brought to the attention of the Government where citizens of the
United States, either naturalized or native born, have formally
become citizens or subjects of foreign powers, but who, nevertheless,
in the absence of any provisions of legislation on this question, when
involved in difficulties or when it seems to be their interest, claim
to be citizens of the United States and demand the intervention of a
Government which they have long since abandoned and to which for
years they have rendered no service nor held themselves in any way
amenable.

In other cases naturalized citizens, immediately after
naturalization, have returned to their native country; have become
engaged in business; have accepted offices or pursuits inconsistent
with American citizenship, and evidence no intent to return to the
United States until called upon to discharge some duty to the country
where they are residing, when at once they assert their citizenship
and call upon the representatives of the Government to aid them in
their unjust pretensions. It is but justice to all bona fide citizens
that no doubt should exist on such questions, and that Congress should
determine by enactment of law how expatriation may be accomplished and
change of citizenship be established.

I also invite your attention to the necessity of regulating by law
the status of American women who may marry foreigners, and of
defining more fully that of children born in a foreign country of
American parents who may reside abroad; and also of some further
provision regulating or giving legal effect to marriages of American
citizens contracted in foreign countries. The correspondence
submitted herewith shows a few of the constantly occurring questions
on these points presented to the consideration of the Government.
There are few subjects to engage the attention of Congress on which
more delicate relations or more important interests are dependent.

In the month of July last the building erected for the Department of
State was taken possession of and occupied by that Department. I am
happy to announce that the archives and valuable papers of the
Government in the custody of that Department are now safely deposited
and properly cared for.

The report of the Secretary of the Treasury shows the receipts from
customs for the fiscal year ending June 30, 1874, to have been
$163,103,833.69, and for the fiscal year ending June 30, 1875, to
have been $157,267,722.35, a decrease for the last fiscal year of
$5,936,111.34. Receipts from internal revenue for the year ending the
30th of June, 1874, were $102,409,784.90, and for the year ending June
30, 1875, $110,007,493.58; increase, $7,597,708.68.

The report also shows a complete history of the workings of the
Department for the last year, and contains recommendations for
reforms and for legislation which I concur in, but can not comment on
so fully as I should like to do if space would permit, but will
confine myself to a few suggestions which I look upon as vital to the
best interests of the whole people--coming within the purview of
"Treasury;" I mean specie resumption. Too much stress can not be laid
upon this question, and I hope Congress may be induced, at the
earliest day practicable, to insure the consummation of the act of
the last Congress, at its last session, to bring about specie
resumption "on and after the 1st of January, 1879," at furthest. It
would be a great blessing if this could be consummated even at an
earlier day.

Nothing seems to me more certain than that a full, healthy, and
permanent reaction can not take place in favor of the industries and
financial welfare of the country until we return to a measure of
values recognized throughout the civilized world. While we use a
currency not equivalent to this standard the world's recognized
standard, specie, becomes a commodity like the products of the soil,
the surplus seeking a market wherever there is a demand for it.

Under our present system we should want none, nor would we have any,
were it not that customs dues must be paid in coin and because of the
pledge to pay interest on the public debt in coin. The yield of
precious metals would flow out for the purchase of foreign
productions and the United States "hewers of wood and drawers of
water," because of wiser legislation on the subject of finance by the
nations with whom we have dealings. I am not prepared to say that I
can suggest the best legislation to secure the end most heartily
recommended. It will be a source of great gratification to me to be
able to approve any measure of Congress looking effectively toward
securing "resumption."

Unlimited inflation would probably bring about specie payments more
speedily than any legislation looking to redemption of the
legal-tenders in coin; but it would be at the expense of honor. The
legal-tenders would have no value beyond settling present
liabilities, or, properly speaking, repudiating them. They would buy
nothing after debts were all settled.

There are a few measures which seem to me important in this
connection and which I commend to your earnest consideration:

A repeal of so much of the legal-tender act as makes these notes
receivable for debts contracted after a date to be fixed in the act
itself, say not later than the 1st of January, 1877. We should then
have quotations at real values, not fictitious ones. Gold would no
longer be at a premium, but currency at a discount. A healthy
reaction would set in at once, and with it a desire to make the
currency equal to what it purports to be. The merchants,
manufacturers, and tradesmen of every calling could do business on a
fair margin of profit, the money to be received having an unvarying
value. Laborers and all classes who work for stipulated pay or salary
would receive more for their income, because extra profits would no
longer be charged by the capitalists to compensate for the risk of a
downward fluctuation in the value of the currency.

Second. That the Secretary of the Treasury be authorized to redeem,
say, not to exceed $2,000,000 monthly of legal-tender notes, by
issuing in their stead a long bond, bearing interest at the rate of
3.65 per cent per annum, of denominations ranging from $50 up to
$1,000 each. This would in time reduce the legal-tender notes to a
volume that could be kept afloat without demanding redemption in
large sums suddenly.

Third. That additional power be given to the Secretary of the
Treasury to accumulate gold for final redemption, either by
increasing revenue, curtailing expenses, or both (it is preferable to
do both); and I recommend that reduction of expenditures be made
wherever it can be done without impairing Government obligations or
crippling the due execution thereof. One measure for increasing the
revenue--and the only one I think of--is the restoration of the duty
on tea and coffee. These duties would add probably $18,000,000 to the
present amount received from imports, and would in no way increase the
prices paid for those articles by the consumers.

These articles are the products of countries collecting revenue from
exports, and as we, the largest consumers, reduce the duties they
proportionately increase them. With this addition to the revenue,
many duties now collected, and which give but an insignificant return
for the cost of collection, might be remitted, and to the direct
advantage of consumers at home.

I would mention those articles which enter into manufactures of all
sorts. All duty paid upon such articles goes directly to the cost of
the article when manufactured here, and must be paid for by the
consumers. These duties not only come from the consumers at home, but
act as a protection to foreign manufacturers of the same completed
articles in our own and distant markets.

I will suggest or mention another subject bearing upon the problem of
"how to enable the Secretary of the Treasury to accumulate balances."
It is to devise some better method of verifying claims against the
Government than at present exists through the Court of Claims,
especially those claims growing out of the late war. Nothing is more
certain than that a very large percentage of the amounts passed and
paid are either wholly fraudulent or are far in excess of the real
losses sustained. The large amount of losses proven--on good
testimony according to existing laws, by affidavits of fictitious or
unscrupulous persons--to have been sustained on small farms and
plantations are not only far beyond the possible yield of those
places for any one year, but, as everyone knows who has had
experience in tilling the soil and who has visited the scenes of
these spoliations, are in many instances more than the individual
claimants were ever worth, including their personal and real estate.

The report of the Attorney-General, which will be submitted to
Congress at an early day, will contain a detailed history of awards
made and of claim pending of the class here referred to.

The report of the Secretary of War, accompanying this message, gives
a detailed account of Army operations for the year just passed,
expenses for maintenance, etc., with recommendations for legislation
to which I respectfully invite your attention. To some of these I
invite special attention:

First. The necessity of making $300,000 of the appropriation for the
Subsistence Department available before the beginning of the next
fiscal year. Without this provision troops at points distant from
supply production must either go without food or existing laws must
be violated. It is not attended with cost to the Treasury.

Second. His recommendation for the enactment of a system of annuities
for the families of deceased officers by voluntary deductions from the
monthly pay of officers. This again is not attended with burden upon
the Treasury, and would for the future relieve much distress which
every old army officer has witnessed in the past--of officers dying
suddenly or being killed, leaving families without even the means of
reaching their friends, if fortunate enough to have friends to aid
them.

Third. The repeal of the law abolishing mileage, and a return to the
old system.

Fourth. The trial with torpedoes under the Corps of Engineers, and
appropriation for the same. Should war ever occur between the United
States and any maritime power, torpedoes will be among if not the
most effective and cheapest auxiliary for the defense of harbors, and
also in aggressive operations, that we can have. Hence it is advisable
to learn by experiment their best construction and application, as
well as effect.

Fifth. A permanent organization for the Signal-Service Corps. This
service has now become a necessity of peace as well as war, under the
advancement made by the present able management.

Sixth. A renewal of the appropriation for compiling the official
records of the war, etc.

The condition of our Navy at this time is a subject of satisfaction.
It does not contain, it is true, any of the powerful cruising
ironclads which make so much of the maritime strength of some other
nations, but neither our continental situation nor our foreign policy
requires that we should have a large number of ships of this
character, while this situation and the nature of our ports combine
to make those of other nations little dangerous to us under any
circumstances.

Our Navy does contain, however, a considerable number of ironclads of
the monitor class, which, though not properly cruisers, are powerful
and effective for harbor defense and for operations near our own
shores. Of these all the single-turreted ones, fifteen in number,
have been substantially rebuilt, their rotten wooden beams replaced
with iron, their hulls strengthened, and their engines and machinery
thoroughly repaired, so that they are now in the most efficient
condition and ready for sea as soon as they can be manned and put in
commission.

The five double-turreted ironclads belonging to our Navy, by far the
most powerful of our ships for fighting purposes, are also in hand
undergoing complete repairs, and could be ready for sea in periods
varying from four to six months. With these completed according to
the present design and our two iron torpedo boats now ready, our
ironclad fleet will be, for the purposes of defense at home, equal to
any force that can readily be brought against it.

Of our wooden navy also cruisers of various sizes, to the number of
about forty, including those now in commission, are in the Atlantic,
and could be ready for duty as fast as men could be enlisted for
those not already in commission. Of these, one-third are in effect
new ships, and though some of the remainder need considerable repairs
to their boilers and machinery, they all are, or can readily be made,
effective.

This constitutes a fleet of more than fifty war ships, of which
fifteen are ironclad, now in hand on the Atlantic coast. The Navy has
been brought to this condition by a judicious and practical
application of what could be spared from the current appropriations
of the last few years and from that made to meet the possible
emergency of two years ago. It has been done quietly, without
proclamation or display, and though it has necessarily straitened the
Department in its ordinary expenditure, and, as far as the ironclads
are concerned, has added nothing to the cruising force of the Navy,
yet the result is not the less satisfactory because it is to be found
in a great increase of real rather than apparent force. The expenses
incurred in the maintenance of an effective naval force in all its
branches are necessarily large, but such force is essential to our
position, relations, and character, and affects seriously the weight
of our principles and policy throughout the whole sphere of national
responsibilities.

The estimates for the regular support of this branch of the service
for the next year amount to a little less in the aggregate than those
made for the current year; but some additional appropriations are
asked for objects not included in the ordinary maintenance of the
Navy, but believed to be of pressing importance at this time. It
would, in my opinion, be wise at once to afford sufficient means for
the immediate completion of the five double-turreted monitors now
undergoing repairs, which must otherwise advance slowly, and only as
money can be spared from current expenses. Supplemented by these, our
Navy, armed with the destructive weapons of modern warfare, manned by
our seamen, and in charge of our instructed officers, will present a
force powerful for the home purposes of a responsible though peaceful
nation.

The report of the Postmaster-General herewith transmitted gives a
full history of the workings of the Department for the year just
past. It will be observed that the deficiency to be supplied from the
General Treasury is increased over the amount required for the
preceding year. In a country so vast in area as the United States,
with large portions sparsely settled, it must be expected that this
important service will be more or less a burden upon the Treasury for
many years to come. But there is no branch of the public service which
interests the whole people more than that of cheap and rapid
transmission of the mails to every inhabited part of our territory.
Next to the free school, the post-office is the great educator of the
people, and it may well receive the support of the General
Government.

The subsidy of $150,000 per annum given to vessels of the United
States for carrying the mails between New York and Rio de Janeiro
having ceased on the 30th day of September last, we are without
direct mail facilities with the South American States. This is
greatly to be regretted, and I do not hesitate to recommend the
authorization of a renewal of that contract, and also that the
service may be increased from monthly to semi-monthly trips. The
commercial advantages to be gained by a direct line of American
steamers to the South American States will far outweigh the expense
of the service.

By act of Congress approved March 3, 1875, almost all matter, whether
properly mail matter or not, may be sent any distance through the
mails, in packages not exceeding 4 pounds in weight, for the sum of
16 cents per pound. So far as the transmission of real mail matter
goes, this would seem entirely proper; but I suggest that the law be
so amended as to exclude from the mails merchandise of all
descriptions, and limit this transportation to articles enumerated,
and which may be classed as mail matter proper.

The discovery of gold in the Black Hills, a portion of the Sioux
Reservation, has had the effect to induce a large emigration of
miners to that point. Thus far the effort to protect the treaty
rights of the Indians to that section has been successful, but the
next year will certainly witness a large increase of such emigration.
The negotiations for the relinquishment of the gold fields having
failed, it will be necessary for Congress to adopt some measures to
relieve the embarrassment growing out of the causes named. The
Secretary of the Interior suggests that the supplies now appropriated
for the sustenance of that people, being no longer obligatory under
the treaty of 1868, but simply a gratuity, may be issued or withheld
at his discretion.

The condition of the Indian Territory, to which I have referred in
several of my former annual messages, remains practically unchanged.
The Secretary of the Interior has taken measures to obtain a full
report of the condition of that Territory, and will make it the
subject of a special report at an early day. It may then be necessary
to make some further recommendation in regard to legislation for the
government of that Territory.

The steady growth and increase of the business of the Patent Office
indicates in some measure the progress of the industrial activity of
the country. The receipts of the office are in excess of its
expenditures, and the office generally is in a prosperous and
satisfactory condition.

The report of the General Land Office shows that there were 2,459,601
acres less disposed of during this than during the last year. More
than one-half of this decrease was in lands disposed of under the
homestead and timber-culture laws. The cause of this decrease is
supposed to be found in the grasshopper scourge and the droughts
which prevailed so extensively in some of the frontier States and
Territories during that time as to discourage and deter entries by
actual settlers. The cash receipts were less by $690,322.23 than
during the preceding year.

The entire surveyed area of the public domain is 680,253,094 acres,
of which 26,077,531 acres were surveyed during the past year, leaving
1,154,471,762 acres still unsurveyed.

The report of the Commissioner presents many interesting suggestions
in regard to the management and disposition of the public domain and
the modification of existing laws, the apparent importance of which
should insure for them the careful consideration of Congress.

The number of pensioners still continues to decrease, the highest
number having been reached during the year ending June 30, 1873.
During the last year 11,557 names were added to the rolls, and 12,977
were dropped therefrom, showing a net decrease of 1,420. But while the
number of pensioners has decreased, the annual amount due on the
pension rolls has increased $44,733.13. This is caused by the greatly
increased average rate of pensions, which, by the liberal legislation
of Congress, has increased from $90.26 in 1872 to $103.91 in 1875 to
each invalid pensioner, an increase in the average rate of 15 per
cent in the three years. During the year ending June 30, 1875, there
was paid on account of pensions, including the expenses of
disbursement, $29,683,116, being $910,632 less than was paid the
preceding year. This reduction in amount of expenditures was produced
by the decrease in the amount of arrearages due on allowed claims and
on pensions the rate of which was increased by the legislation of the
preceding session of Congress. At the close of the last fiscal year
there were on the pension rolls 234,821 persons, of whom 210,363 were
army pensioners, 105,478 being invalids and 104,885 widows and
dependent relatives; 3,420 were navy pensioners, of whom 1,636 were
invalids and 1,784 widows and dependent relatives; 21,038 were
pensioners of the War of 1812, 15,875 of whom were survivors and
5,163 were widows.

It is estimated that $29,535,000 will be required for the payment of
pensions for the next fiscal year, an amount $965,000 less than the
estimate for the present year.

The geological explorations have been prosecuted with energy during
the year, covering an area of about 40,000 square miles in the
Territories of Colorado, Utah, and New Mexico, developing the
agricultural and mineral resources and furnishing interesting
scientific and topographical details of that region.

The method for the treatment of the Indians adopted at the beginning
of my first term has been steadily pursued, and with satisfactory and
encouraging results. It has been productiv