Speech Transcript:

To the Senate and House of Representatives of the United States: 

An appalling calamity has befallen the American people since their
chosen representatives last met in the halls where you are now
assembled. We might else recall with unalloyed content the rare
prosperity with which throughout the year the nation has been
blessed. Its harvests have been plenteous; its varied industries have
thriven; the health of its people has been preserved; it has
maintained with foreign governments the undisturbed relations of
amity and peace. For these manifestations of His favor we owe to Him
who holds our destiny in His hands the tribute of our grateful
devotion. 

To that mysterious exercise of His will which has taken from us the
loved and illustrious citizen who was but lately the head of the
nation we bow in sorrow and submission. 

The memory of his exalted character, of his noble achievements, and
of his patriotic life will be treasured forever as a sacred
possession of the whole people. 

The announcement of his death drew from foreign governments and
peoples tributes of sympathy and sorrow which history will record as
signal tokens of the kinship of nations and the federation of
mankind. 

The feeling of good will between our own Government and that of Great
Britain was never more marked than at present. In recognition of this
pleasing fact I directed, on the occasion of the late centennial
celebration at Yorktown, that a salute be given to the British flag.


Save for the correspondence to which I shall refer hereafter in
relation to the proposed canal across the Isthmus of Panama, little
has occurred worthy of mention in the diplomatic relations of the two
countries. 

Early in the year the Fortune Bay claims were satisfactorily settled
by the British Government paying in full the sum of 15,000 pounds,
most of which has been already distributed. As the terms of the
settlement included compensation for injuries suffered by our
fishermen at Aspee Bay, there has been retained from the gross award
a sum which is deemed adequate for those claims. 

The participation of Americans in the exhibitions at Melbourne and
Sydney will be approvingly mentioned in the reports of the two
exhibitions, soon to be presented to Congress. They will disclose the
readiness of our countrymen to make successful competition in distant
fields of enterprise. 

Negotiations for an international copyright convention are in hopeful
progress. 

The surrender of Sitting Bull and his forces upon the Canadian
frontier has allayed apprehension, although bodies of British Indians
still cross the border in quest of sustenance. Upon this subject a
correspondence has been opened which promises an adequate
understanding. Our troops have orders to avoid meanwhile all
collisions with alien Indians. 

The presence at the Yorktown celebration of representatives of the
French Republic and descendants of Lafayette and of his gallant
compatriots who were our allies in the Revolution has served to
strengthen the spirit of good will which has always existed between
the two nations. 

You will be furnished with the proceedings of the Bimetallic
Conference held during the summer at the city of Paris. No accord was
reached, but a valuable interchange of views was had, and the
conference will next year be renewed. 

At the Electrical Exhibition and Congress, also held at Paris, this
country was creditably represented by eminent specialists, who, in
the absence of an appropriation, generously lent their efficient aid
at the instance of the State Department. While our exhibitors in this
almost distinctively American field of achievement have won several
valuable awards, I recommend that Congress provide for the repayment
of the personal expenses incurred in the public interest by the
honorary commissioners and delegates. 

No new questions respecting the status of our naturalized citizens in
Germany have arisen during the year, and the causes of complaint,
especially in Alsace and Lorraine, have practically ceased through
the liberal action of the Imperial Government in accepting our
often-expressed views on the subject. The application of the treaty
of 1868 to the lately acquired Rhenish provinces has received very
earnest attention, and a definite and lasting agreement on this point
is confidently expected. The participation of the descendants of Baron
von Steuben in the Yorktown festivities, and their subsequent
reception by their American kinsmen, strikingly evinced the ties of
good will which unite the German people and our own. 

Our intercourse with Spain has been friendly. An agreement concluded
in February last fixes a term for the labors of the Spanish and
American Claims Commission. The Spanish Government has been requested
to pay the late awards of that Commission, and will, it is believed,
accede to the request as promptly and courteously as on former
occasions. 

By recent legislation onerous fines have been imposed upon American
shipping in Spanish and colonial ports for slight irregularities in
manifests. One case of hardship is specially worthy of attention. The
bark Masonic, bound for Japan, entered Manila in distress, and is
there sought to be confiscated under Spanish revenue laws for an
alleged shortage in her transshipped cargo. Though efforts for her
relief have thus far proved unavailing, it is expected that the whole
matter will be adjusted in a friendly spirit. 

The Senate resolutions of condolence on the assassination of the Czar
Alexander II were appropriately communicated to the Russian
Government, which in turn has expressed its sympathy in our late
national bereavement. It is desirable that our cordial relations with
Russia should be strengthened by proper engagements assuring to
peaceable Americans who visit the Empire the consideration which is
due to them as citizens of a friendly state. This is especially
needful with respect to American Israelites, whose classification
with the native Hebrews has evoked energetic remonstrances from this
Government. 

A supplementary consular agreement with Italy has been sanctioned and
proclaimed, which puts at rest conflicts of jurisdiction in the case
of crimes on shipboard. 

Several important international conferences have been held in Italy
during the year. At the Geographical Congress of Venice, the
Beneficence Congress of Milan, and the Hygienic Congress of Turin
this country was represented by delegates from branches of the public
service or by private citizens duly accredited in an honorary
capacity. It is hoped that Congress will give such prominence to the
results of their participation as they may seem to deserve. 

The abolition of all discriminating duties against such colonial
productions of the Dutch East Indies as are imported hither from
Holland has been already considered by Congress. I trust that at the
present session the matter may be favorably concluded. 

The insecurity of life and property in many parts of Turkey has given
rise to correspondence with the Porte looking particularly to the
better protection of American missionaries in the Empire. The
condemned murderer of the eminent missionary Dr. Justin W. Parsons
has not yet been executed, although this Government has repeatedly
demanded that exemplary justice be done. 

The Swiss Government has again solicited the good offices of our
diplomatic and consular agents for the protection of its citizens in
countries where it is not itself represented. This request has,
within proper limits, been granted. 

Our agents in Switzerland have been instructed to protest against the
conduct of the authorities of certain communes in permitting the
emigration to this country of criminals and other objectionable
persons. Several such persons, through the cooperation of the
commissioners of emigration at New York, have been sent back by the
steamers which brought them. A continuance of this course may prove a
more effectual remedy than diplomatic remonstrance. 

Treaties of commerce and navigation and for the regulation of
consular privileges have been concluded with Roumania and Servia
since their admission into the family of European States. 

As is natural with contiguous states having like institutions and
like aims of advancement and development, the friendship of the
United States and Mexico has been constantly maintained. This
Government has lost no occasion of encouraging the Mexican Government
to a beneficial realization of the mutual advantages which will result
from more intimate commercial intercourse and from the opening of the
rich interior of Mexico to railway enterprise. I deem it important
that means be provided to restrain the lawlessness unfortunately so
common on the frontier and to suppress the forays of the reservation
Indians on either side of the Rio Grande. 

The neighboring States of Central America have preserved internal
peace, and their outward relations toward us have been those of
intimate friendship. There are encouraging signs of their growing
disposition to subordinate their local interests to those which are
common to them by reason of their geographical relations. 

The boundary dispute between Guatemala and Mexico has afforded this
Government an opportunity to exercise its good offices for preventing
a rupture between those States and for procuring a peaceable solution
of the question. I cherish strong hope that in view of our relations
of amity with both countries our friendly counsels may prevail. 

A special envoy of Guatemala has brought to me the condolences of his
Government and people on the death of President Garfield. 

The Costa Rican Government lately framed an engagement with Colombia
for settling by arbitration the boundary question between those
countries, providing that the post of arbitrator should be offered
successively to the King of the Belgians, the King of Spain, and the
President of the Argentine Confederation. The King of the Belgians
has declined to act, but I am not as yet advised of the action of the
King of Spain. As we have certain interests in the disputed territory
which are protected by our treaty engagements with one of the
parties, it is important that the arbitration should not without our
consent affect our rights, and this Government has accordingly
thought proper to make its views known to the parties to the
agreement, as well as to intimate them to the Belgian and Spanish
Governments. 

The questions growing out of the proposed interoceanic waterway
across the Isthmus of Panama are of grave national importance. This
Government has not been unmindful of the solemn obligations imposed
upon it by its compact of 1846 with Colombia, as the independent and
sovereign mistress of the territory crossed by the canal, and has
sought to render them effective by fresh engagements with the
Colombian Republic looking to their practical execution. The
negotiations to this end, after they had reached what appeared to be
a mutually satisfactory solution here, were met in Colombia by a
disavowal of the powers which its envoy had assumed and by a proposal
for renewed negotiation on a modified basis. 

Meanwhile this Government learned that Colombia had proposed to the
European powers to join in a guaranty of the neutrality of the
proposed Panama canal--a guaranty which would be in direct
contravention of our obligation as the sole guarantor of the
integrity of Colombian territory and of the neutrality of the canal
itself. My lamented predecessor felt it his duty to place before the
European powers the reasons which make the prior guaranty of the
United States indispensable, and for which the interjection of any
foreign guaranty might be regarded as a superfluous and unfriendly
act. 

Foreseeing the probable reliance of the British Government on the
provisions of the Clayton-Bulwer treaty of 1850 as affording room for
a share in the guaranties which the United States covenanted with
Colombia four years before, I have not hesitated to supplement the
action of my predecessor by proposing to Her Majesty's Government the
modification of that instrument and the abrogation of such clauses
thereof as do not comport with the obligations of the United States
toward Colombia or with the vital needs of the two friendly parties
to the compact. 

This Government sees with great concern the continuance of the
hostile relations between Chile, Bolivia, and Peru. An early peace
between these Republics is much to be desired, not only that they may
themselves be spared further misery and bloodshed, but because their
continued antagonism threatens consequences which are, in my
judgment, dangerous to the interests of republican government on this
continent and calculated to destroy the best elements of our free and
peaceful civilization. 

As in the present excited condition of popular feeling in these
countries there has been serious misapprehension of the position of
the United States, and as separate diplomatic intercourse with each
through independent ministers is sometimes subject, owing to the want
of prompt reciprocal communication, to temporary misunderstanding, I
have deemed it judicious at the present time to send a special envoy
accredited to all and each of them, and furnished with general
instructions which will, I trust, enable him to bring these powers
into friendly relations. 

The Government of Venezuela maintains its attitude of warm friendship
and continues with great regularity its payment of the monthly quota
of the diplomatic debt. Without suggesting the direction in which
Congress should act, I ask its attention to the pending questions
affecting the distribution of the sums thus far received. 

The relations between Venezuela and France growing out of the same
debt have been for some time past in an unsatisfactory state, and
this Government, as the neighbor and one of the largest creditors of
Venezuela, has interposed its influence with the French Government
with the view of producing a friendly and honorable adjustment. 

I regret that the commercial interests between the United States and
Brazil, from which great advantages were hoped a year ago, have
suffered from the withdrawal of the American lines of communication
between the Brazilian ports and our own. 

Through the efforts of our minister resident at Buenos Ayres and the
United States minister at Santiago, a treaty has been concluded
between the Argentine Republic and Chile, disposing of the
long-pending Patagonian boundary question. It is a matter of
congratulation that our Government has been afforded the opportunity
of successfully exerting its good influence for the prevention of
disagreements between these Republics of the American continent. 

I am glad to inform you that the treaties lately negotiated with
China have been duly ratified on both sides and the exchange made at
Peking. Legislation is necessary to carry their provisions into
effect. The prompt and friendly spirit with which the Chinese
Government, at the request of the United States, conceded the
modification of existing treaties should secure careful regard for
the interests and susceptibilities of that Government in the
enactment of any laws relating to Chinese immigration. 

Those clauses of the treaties which forbid the participation of
citizens or vessels of the United States in the opium trade will
doubtless receive your approval. They will attest the sincere
interest which our people and Government feel in the commendable
efforts of the Chinese Government to put a stop to this demoralizing
and destructive traffic. 

In relation both to China and Japan some changes are desirable in our
present system of consular jurisdiction. I hope at some future time to
lay before you a scheme for its improvement in the entire East. 

The intimacy between our own country and Japan, the most advanced of
the Eastern nations, continues to be cordial. I am advised that the
Emperor contemplates the establishment of full constitutional
government, and that he has already summoned a parliamentary congress
for the purpose of effecting the change. Such a remarkable step toward
complete assimilation with the Western system can not fail to bring
Japan into closer and more beneficial relationship with ourselves as
the chief Pacific power. 

A question has arisen in relation to the exercise in that country of
the judicial functions conferred upon our ministers and consuls. The
indictment, trial, and conviction in the consular court at Yokohama
of John Ross, a merchant seaman on board an American vessel, have
made it necessary for the Government to institute a careful
examination into the nature and methods of this jurisdiction. 

It appeared that Ross was regularly shipped under the flag of the
United States, but was by birth a British subject. My predecessor
felt it his duty to maintain the position that during his service as
a regularly shipped seaman on board an American merchant vessel Ross
was subject to the laws of that service and to the jurisdiction of
the United States consular authorities. 

I renew the recommendation which has been heretofore urged by the
Executive upon the attention of Congress, that after the deduction of
such amount as may be found due to American citizens the balance of
the indemnity funds heretofore obtained from China and Japan, and
which are now in the hands of the State Department, be returned to
the Governments of those countries. 

The King of Hawaii, in the course of his homeward return after a
journey around the world, has lately visited this country. While our
relations with that Kingdom are friendly, this Government has viewed
with concern the efforts to seek replenishment of the diminishing
population of the islands from outward sources, to a degree which may
impair the native sovereignty and independence, in which the United
States was among the first to testify a lively interest. 

Relations of unimpaired amity have been maintained throughout the
year with the respective Governments of Austria-Hungary, Belgium,
Denmark, Hayti, Paraguay and Uruguay, Portugal, and Sweden and
Norway. This may also be said of Greece and Ecuador, although our
relations with those States have for some years been severed by the
withdrawal of appropriations for diplomatic representatives at Athens
and Quito. It seems expedient to restore those missions, even on a
reduced scale, and I decidedly recommend such a course with respect
to Ecuador, which is likely within the near future to play an
important part among the nations of the Southern Pacific. 

At its last extra session the Senate called for the text of the
Geneva convention for the relief of the wounded in war. I trust that
this action foreshadows such interest in the subject as will result
in the adhesion of the United States to that humane and commendable
engagement. 

I invite your attention to the propriety of adopting the new code of
international rules for the prevention of collisions on the high seas
and of conforming the domestic legislation of the United States
thereto, so that no confusion may arise from the application of
conflicting rules in the case of vessels of different nationalities
meeting in tidal waters. These international rules differ but
slightly from our own. They have been adopted by the Navy Department
for the governance of the war ships of the United States on the high
seas and in foreign waters, and, through the action of the State
Department in disseminating the rules and in acquainting shipmasters
with the option of conforming to them without the jurisdictional
waters of the United States, they are now very generally known and
obeyed. 

The State Department still continues to publish to the country the
trade and manufacturing reports received from its officers abroad.
The success of this course warrants its continuance and such
appropriation as may be required to meet the rapidly increasing
demand for these publications. With special reference to the Atlanta
Cotton Exposition, the October number of the reports was devoted to a
valuable collection of papers on the cotton-goods trade of the world.


The International Sanitary Conference for which, in 1879, Congress
made provision assembled in this city early in January last, and its
sessions were prolonged until March. Although it reached no specific
conclusions affecting the future action of the participant powers,
the interchange of views proved to be most valuable. The full
protocols of the sessions have been already presented to the Senate.


As pertinent to this general subject, I call your attention to the
operations of the National Board of Health. Established by act of
Congress approved March 3, 1879, its sphere of duty was enlarged by
the act of June 2 in the same year. By the last-named act the board
was required to institute such measures as might be deemed necessary
for preventing the introduction of contagious or infectious diseases
from foreign countries into the United States or from one State into
another. 

The execution of the rules and regulations prepared by the board and
approved by my predecessor has done much to arrest the progress of
epidemic disease, and has thus rendered substantial service to the
nation. 

The International Sanitary Conference, to which I have referred,
adopted a form of a bill of health to be used by all vessels seeking
to enter the ports of the countries whose representatives
participated in its deliberations. This form has since been
prescribed by the National Board of Health and incorporated with its
rules and regulations, which have been approved by me in pursuance of
law. 

The health of the people is of supreme importance. All measures
looking to their protection against the spread of contagious diseases
and to the increase of our sanitary knowledge for such purposes
deserve attention of Congress. 

The report of the Secretary of the Treasury presents in detail a
highly satisfactory exhibit of the state of the finances and the
condition of the various branches of the public service administered
by that Department. 

The ordinary revenues from all sources for the fiscal year ending
June 30, 1881, were: 

From customs                                         $198,159,676.02 

From internal revenue                                 135,264,385.51 

From sales of public lands                              2,201,863.17 

From tax on circulation and deposits of national banks  8,116,115.72 

From repayment of interest by Pacific Railway companies   810,833.80 

From sinking fund for Pacific Railway companies           805,180.54 

From customs fees, fines, penalties, etc.               1,225,514.86 

From fees--consular, letters patent, and lands          2,244,983.98 

From proceeds of sales of Government property             262,174.00 

From profits on coinage                                 3,468,485.61 

From revenues of the District of Columbia               2,016,199.23 

From miscellaneous sources                              6,206,880.13 

Total ordinary receipts                               360,782,292.57 


The ordinary expenditures for the same period were: 

For civil expenses                                     $17,941,177.19
 
For foreign intercourse                                  1,093,954.92
 
For Indians                                              6,514,161.09
 
For pensions                                            50,059,279.62
 
For the military establishment, including river and harbor
improvements and arsenals                                            
   40,466,460.55  
For the naval establishment, including vessels, machinery, and
improvements at navy-yards                                           
       15,686,671.66  
For miscellaneous expenditures, including public buildings,
light-houses, and collecting the revenue                             
               41,837,280.57  
For expenditures on account of the District of Columbia  3,543,912.03
 
For interest on the public debt                         82,508,741.18
 
For premium on bonds purchased                           1,061,248.78
 
Total ordinary expenditures                            260,712,887.59
 

Leaving a surplus revenue of                         
$100,069,404.98, which was applied as follows: 

To the redemption of  �  
Bonds for the sinking fund                             $74,371,200.00
 
Fractional currency for the sinking fund                   109,001.05
 
Loan of February, 1861                                   7,418,000.00
 
Ten-forties of 1864                                      2,016,150.00
 
Five-twenties of 1862                                       18,300.00
 
Five-twenties of 1864                                        3,400.00
 
Five-twenties of 1865                                       37,300.00
 
Consols of 1865                                            143,150.00
 
Consols of 1867                                            959,150.00
 
Consols of 1868                                            337,400.00
 
Texan indemnity stock                                        1,000.00
 
Old demand, compound-interest, and other notes              18,330.00
 
And to the increase of cash in the Treasury             14,637,023.93