Speech Transcript:

 To the Congress of the United States:

As you assemble for the discharge of the duties you have assumed as
the representatives of a free and generous people, your meeting is
marked by an interesting and impressive incident. With the expiration
of the present session of the Congress the first century of our
constitutional existence as a nation will be completed.

Our survival for one hundred years is not sufficient to assure us
that we no longer have dangers to fear in the maintenance, with all
its promised blessings, of a government rounded upon the freedom of
the people. The time rather admonishes us to soberly inquire whether
in the past we have always closely kept in the course of safety, and
whether we have before us a way plain and clear which leads to
happiness and perpetuity.

When the experiment of our Government was undertaken, the chart
adopted for our guidance was the Constitution. Departure from the
lines there laid down is failure. It is only by a strict adherence to
the direction they indicate and by restraint within the limitations
they fix that we can furnish proof to the world of the fitness of the
American people for self-government.

The equal and exact justice of which we boast as the underlying
principle of our institutions should not be confined to the relations
of our citizens to each other. The Government itself is under bond to
the American people that in the exercise of its functions and powers
it will deal with the body of our citizens in a manner scrupulously
honest and fair and absolutely just. It has agreed that American
citizenship shall be the only credential necessary to justify the
claim of equality before the law, and that no condition in life shall
give rise to discrimination in the treatment of the people by their
Government.

The citizen of our Republic in its early days rigidly insisted upon
full compliance with the letter of this bond, and saw stretching out
before him a clear field for individual endeavor. His tribute to the
support of his Government was measured by the cost of its economical
maintenance, and he was secure in the enjoyment of the remaining
recompense of his steady and contented toil. In those days the
frugality of the people was stamped upon their Government, and was
enforced by the free, thoughtful, and intelligent suffrage of the
citizen. Combinations, monopolies, and aggregations of capital were
either avoided or sternly regulated and restrained. The pomp and
glitter of governments less free offered no temptation and presented
no delusion to the plain people who, side by side, in friendly
competition, wrought for the ennoblement and dignity of man, for the
solution of the problem of free government, and for the achievement
of the grand destiny awaiting the land which God had given them.

A century has passed. Our cities are the abiding places of wealth and
luxury; our manufactories yield fortunes never dreamed of by the
fathers of the Republic; our business men are madly striving in the
race for riches, and immense aggregations of capital outrun the
imagination in the magnitude of their undertakings.

We view with pride and satisfaction this bright picture of our
country's growth and prosperity, while only a closer scrutiny
develops a somber shading. Upon more careful inspection we find the
wealth and luxury of our cities mingled with poverty and wretchedness
and unremunerative toil. A crowded and constantly increasing urban
population suggests the impoverishment of rural sections and
discontent with agricultural pursuits. The farmer's son, not
satisfied with his father's simple and laborious life, joins the
eager chase for easily acquired wealth.

We discover that the fortunes realized by our manufacturers are no
longer solely the reward of sturdy industry and enlightened
foresight, but that they result from the discriminating favor of the
Government and are largely built upon undue exactions from the masses
of our people. The gulf between employers and the employed is
constantly widening, and classes are rapidly forming, one comprising
the very rich and powerful, while in another are found the toiling
poor.

As we view the achievements of aggregated capital, we discover the
existence of trusts, combinations, and monopolies, while the citizen
is struggling far in the rear or is trampled to death beneath an iron
heel. Corporations, which should be the carefully restrained creatures
of the law and the servants of the people, are fast becoming the
people's masters.

Still congratulating ourselves upon the wealth and prosperity of our
country and complacently contemplating every incident of change
inseparable from these conditions, it is our duty as patriotic
citizens to inquire at the present stage of our progress how the bond
of the Government made with the people has been kept and performed.

Instead of limiting the tribute drawn from our citizens to the
necessities of its economical administration, the Government persists
in exacting from the substance of the people millions which, unapplied
and useless, lie dormant in its Treasury. This flagrant injustice and
this breach of faith and obligation add to extortion the danger
attending the diversion of the currency of the country from the
legitimate channels of business.

Under the same laws by which these results are produced the
Government permits many millions more to be added to the cost of the
living of our people and to be taken from our consumers, which
unreasonably swell the profits of a small but powerful minority.

The people must still be taxed for the support of the Government
under the operation of tariff laws. But to the extent that the mass
of our citizens are inordinately burdened beyond any useful public
purpose and for the benefit of a favored few, the Government, under
pretext of an exercise of its taxing power, enters gratuitously into
partnership with these favorites, to their advantage and to the
injury of a vast majority of our people.

This is not equality before the law.

The existing situation is injurious to the health of our entire body
politic. It stifles in those for whose benefit it is permitted all
patriotic love of country, and substitutes in its place selfish greed
and grasping avarice. Devotion to American citizenship for its own
sake and for what it should accomplish as a motive to our nation's
advancement and the happiness of all our people is displaced by the
assumption that the Government, instead of being the embodiment of
equality, is but an instrumentality through which especial and
individual advantages are to be gained.

The arrogance of this assumption is unconcealed. It appears in the
sordid disregard of all but personal interests, in the refusal to
abate for the benefit of others one iota of selfish advantage, and in
combinations to perpetuate such advantages through efforts to control
legislation and improperly influence the suffrages of the people.

The grievances of those not included within the circle of these
beneficiaries, when fully realized, will surely arouse irritation and
discontent. Our farmers, long suffering and patient, struggling in the
race of life with the hardest and most unremitting toil, will not fail
to see, in spite of misrepresentations and misleading fallacies, that
they are obliged to accept such prices for their products as are
fixed in foreign markets where they compete with the farmers of the
world; that their lands are declining in value while their debts
increase, and that without compensating favor they are forced by the
action of the Government to pay for the benefit of others such
enhanced prices for the things they need that the scanty returns of
their labor fail to furnish their support or leave no margin for
accumulation.

Our workingmen, enfranchised from all delusions and no longer
frightened by the cry that their wages are endangered by a just
revision of our tariff laws, will reasonably demand through such
revision steadier employment, cheaper means of living in their homes,
freedom for themselves and their children from the doom of perpetual
servitude, and an open door to their advancement beyond the limits of
a laboring class. Others of our citizens, whose comforts and
expenditures are measured by moderate salaries and fixed incomes,
will insist upon the fairness and justice of cheapening the cost of
necessaries for themselves and their families.

When to the selfishness of the beneficiaries of unjust discrimination
under our laws there shall be added the discontent of those who suffer
from such discrimination, we will realize the fact that the beneficent
purposes of our Government, dependent upon the patriotism and
contentment of our people, are endangered.

Communism is a hateful thing and a menace to peace and organized
government; but the communism of combined wealth and capital, the
outgrowth of overweening cupidity and selfishness, which insidiously
undermines the justice and integrity of free institutions, is not
less dangerous than the communism of oppressed poverty and toil,
which, exasperated by injustice and discontent, attacks with wild
disorder the citadel of rule.

He mocks the people who proposes that the Government shall protect
the rich and that they in turn will care for the laboring poor. Any
intermediary between the people and their Government or the least
delegation of the care and protection the Government owes to the
humblest citizen in the land makes the boast of free institutions a
glittering delusion and the pretended boon of American citizenship a
shameless imposition.

A just and sensible revision of our tariff laws should be made for
the relief of those of our countrymen who suffer under present
conditions. Such a revision should receive the support of all who
love that justice and equality due to American citizenship; of all
who realize that in this justice and equality our Government finds
its strength and its power to protect the citizen and his property;
of all who believe that the contented competence and comfort of many
accord better with the spirit of our institutions than colossal
fortunes unfairly gathered in the hands of a few; of all who
appreciate that the forbearance and fraternity among our people,
which recognize the value of every American interest, are the surest
guaranty of our national progress, and of all who desire to see the
products of American skill and ingenuity in every market of the
world, with a resulting restoration of American commerce.

The necessity of the reduction of our revenues is so apparent as to
be generally conceded, but the means by which this end shall be
accomplished and the sum of direct benefit which shall result to our
citizens present a controversy of the utmost importance. There should
be no scheme accepted as satisfactory by which the burdens of the
people are only apparently removed. Extravagant appropriations of
public money, with all their demoralizing consequences, should not be
tolerated, either as a means of relieving the Treasury of its present
surplus or as furnishing pretext for resisting a proper reduction in
tariff rates. Existing evils and injustice should be honestly
recognized, boldly met, and effectively remedied. There should be no
cessation of the struggle until a plan is perfected, fair and
conservative toward existing industries, but which will reduce the
cost to consumers of the necessaries of life, while it provides for
our manufacturers the advantage of freer raw materials and permits no
injury to the interests of American labor.

The cause for which the battle is waged is comprised within lines
clearly and distinctly defined. It should never be compromised. It is
the people's cause.

It can not be denied that the selfish and private interests which are
so persistently heard when efforts are made to deal in a just and
comprehensive manner with our tariff laws are related to, if they are
not responsible for, the sentiment largely prevailing among the people
that the General Government is the fountain of individual and private
aid; that it may be expected to relieve with paternal care the
distress of citizens and communities, and that from the fullness of
its Treasury it should, upon the slightest possible pretext of
promoting the general good, apply public funds to the benefit of
localities and individuals. Nor can it be denied that there is a
growing assumption that, as against the Government and in favor of
private claims and interests, the usual rules and limitations of
business principles and just dealing should be waived.

These ideas have been unhappily much encouraged by legislative
acquiescence. Relief from contracts made with the Government is too
easily accorded in favor of the citizen; the failure to support
claims against the Government by proof is often supplied by no better
consideration than the wealth of the Government and the poverty of the
claimant; gratuities in the form of pensions are granted upon no other
real ground than the needy condition of the applicant, or for reasons
less valid; and large sums are expended for public buildings and
other improvements upon representations scarcely claimed to be
related to public needs and necessities.

The extent to which the consideration of such matters subordinate and
postpone action upon subjects of great public importance, but
involving no special private or partisan interest, should arrest
attention and lead to reformation.

A few of the numerous illustrations of this condition may be stated.

The crowded condition of the calendar of the Supreme Court, and the
delay to suitors and denial of justice resulting therefrom, has been
strongly urged upon the attention of the Congress, with a plan for
the relief of the situation approved by those well able to judge of
its merits. While this subject remains without effective
consideration, many laws have been passed providing for the holding
of terms of inferior courts at places to suit the convenience of
localities, or to lay the foundation of an application for the
erection of a new public building.

Repeated recommendations have been submitted for the amendment and
change of the laws relating to our public lands so that their
spoliation and diversion to other uses than as homes for honest
settlers might be prevented. While a measure to meet this conceded
necessity of reform remains awaiting the action of the Congress, many
claims to the public lands and applications for their donation, in
favor of States and individuals, have been allowed.

A plan in aid of Indian management, recommended by those well
informed as containing valuable features in furtherance of the
solution of the Indian problem, has thus far failed of legislative
sanction, while grants of doubtful expediency to railroad
corporations, permitting them to pass through Indian reservations,
have greatly multiplied.

The propriety and necessity of the erection of one or more prisons
for the confinement of United States convicts, and a post-office
building in the national capital, are not disputed. But these needs
yet remain answered, while scores of public buildings have been
erected where their necessity for public purposes is not apparent.

A revision of our pension laws could easily be made which would rest
upon just principles and provide for every worthy applicant. But
while our general pension laws remain confused and imperfect,
hundreds of private pension laws are annually passed, which are the
sources of unjust discrimination and popular demoralization.

Appropriation bills for the support of the Government are defaced by
items and provisions to meet private ends, and it is freely asserted
by responsible and experienced parties that a bill appropriating
money for public internal improvement would fail to meet with favor
unless it contained items more for local and private advantage than
for public benefit.

These statements can be much emphasized by an ascertainment of the
proportion of Federal legislation which either bears upon its face
its private character or which upon examination develops such a
motive power.

And yet the people wait and expect from their chosen representatives
such patriotic action as will advance the welfare of the entire
country; and this expectation can only be answered by the performance
of public duty with unselfish purpose. Our mission among the nations
of the earth and our success in accomplishing the work God has given
the American people to do require of those intrusted with the making
and execution of our laws perfect devotion, above all other things,
to the public good.

This devotion will lead us to strongly resist all impatience of
constitutional limitations of Federal power and to persistently check
the increasing tendency to extend the scope of Federal legislation
into the domain of State and local jurisdiction upon the plea of
subserving the public welfare. The preservation of the partitions
between proper subjects of Federal and local care and regulation is
of such importance under the Constitution, which is the law of our
very existence, that no consideration of expediency or sentiment
should tempt us to enter upon doubtful ground. We have undertaken to
discover and proclaim the richest blessings of a free government,
with the Constitution as our guide. Let us follow the way it points
out; it will not mislead us. And surely no one who has taken upon
himself the solemn obligation to support and preserve the
Constitution can find justification or solace for disloyalty in the
excuse that he wandered and disobeyed in search of a better way to
reach the public welfare than the Constitution offers.

What has been said is deemed not inappropriate at a time when, from a
century's height, we view the way already trod by the American people
and attempt to discover their future path.

The seventh President of the United States--the soldier and statesman
and at all times the firm and brave friend of the people--in
vindication of his course as the protector of popular rights and the
champion of true American citizenship, declared: The ambition which
leads me on is an anxious desire and a fixed determination to restore
to the people unimpaired the sacred trust they have confided to my
charge; to, heal the wounds of the Constitution and to preserve it
from further violation; to persuade my countrymen, so far as I may,
that it is not in a splendid government supported by powerful
monopolies and aristocratical establishments that they will find
happiness or their liberties protection, but in a plain system, void
of pomp, protecting all and granting favors to none, dispensing its
blessings like the dews of heaven, unseen and unfelt save in the
freshness and beauty they contribute to produce. It is such a
government that the genius of our people requires--such an one only
under which our States may remain for ages to come united,
prosperous, and free. In pursuance of a constitutional provision
requiring the President from time to time to give to the Congress
information of the state of the Union, I have the satisfaction to
announce that the close of the year finds the United States in the
enjoyment of domestic tranquillity and at peace with all the
nations.

Since my last annual message our foreign relations have been
strengthened and improved by performance of international good
offices and by new and renewed treaties of amity, commerce, and
reciprocal extradition of criminals.

Those international questions which still await settlement are all
reasonably within the domain of amicable negotiation, and there is no
existing subject of dispute between the United States and any foreign
power that is not susceptible of satisfactory adjustment by frank
diplomatic treatment.

The questions between Great Britain and the United States relating to
the rights of American fishermen, under treaty and international
comity, in the territorial waters of Canada and Newfoundland, I
regret to say, are not yet satisfactorily adjusted.

These matters were fully treated in my message to the Senate of
February 20 1888, together with which a convention, concluded under
my authority with Her Majesty's Government on the 15th of February
last, for the removal of all causes of misunderstanding, was
submitted by me for the approval of the Senate.

This treaty having been rejected by the Senate, I transmitted a
message to the Congress on the 23d of August last reviewing the
transactions and submitting for consideration certain recommendations
for legislation concerning the important questions involved.

Afterwards, on the 12th of September, in response to a resolution of
the Senate, I again communicated fully all the information in my
possession as to the action of the government of Canada affecting the
commercial relations between the Dominion and the United States,
including the treatment of American fishing vessels in the ports and
waters of British North America.

These communications have all been published, and therefore opened to
the knowledge of both Houses of Congress, although two were addressed
to the Senate alone.

Comment upon or repetition of their contents would be superfluous,
and I am not aware that anything has since occurred which should be
added to the facts therein stated. Therefore I merely repeat, as
applicable to the present time, the statement which will be found in
my message to the Senate of September 12 last, that--Since March 3,
1887, no case has been reported to the Department of State wherein
complaint was made of unfriendly or unlawful treatment of American
fishing vessels on the part of the Canadian authorities in which
reparation was not promptly and satisfactorily obtained by the United
States consul-general at Halifax. Having essayed in the discharge of
my duty to procure by negotiation the settlement of a long-standing
cause of dispute and to remove a constant menace to the good
relations of the two countries, and continuing to be of opinion that
the treaty of February last, which failed to receive the approval of
the Senate, did supply "a satisfactory, practical, and final
adjustment, upon a basis honorable and just to both parties, of the
difficult and vexed question to which it related," and having
subsequently and unavailingly recommended other legislation to
Congress which I hoped would suffice to meet the exigency created by
the rejection of the treaty, I now again invoke the earnest and
immediate attention of the Congress to the condition of this
important question as it now stands before them and the country, and
for the settlement of which I am deeply solicitous.

Near the close of the month of October last occurrences of a deeply
regrettable nature were brought to my knowledge, which made it my
painful but imperative duty to obtain with as little delay as
possible a new personal channel of diplomatic intercourse in this
country with the Government of Great Britain.

The correspondence in relation to this incident will in due course be
laid before you, and will disclose the unpardonable conduct of the
official referred to in his interference by advice and counsel with
the suffrages of American citizens in the very crisis of the
Presidential election then near at hand, and also in his subsequent
public declarations to justify his action, superadding impugnment of
the Executive and Senate of the United States in connection with
important questions now pending in controversy between the two
Governments.

The offense thus committed was most grave, involving disastrous
possibilities to the good relations of the United States and Great
Britain, constituting a gross breach of diplomatic privilege and an
invasion of the purely domestic affairs and essential sovereignty of
the Government to which the envoy was accredited.

Having first fulfilled the just demands of international comity by
affording full opportunity for Her Majesty's Government to act in
relief of the situation, I considered prolongation of discussion to
be unwarranted, and thereupon declined to further recognize the
diplomatic character of the person whose continuance in such function
would destroy that mutual confidence which is essential to the good
understanding of the two Governments and was inconsistent with the
welfare and self-respect of the Government of the United States.

The usual interchange of communication has since continued through
Her Majesty's legation in this city.

My endeavors to establish by international cooperation measures for
the prevention of the extermination of fur seals in Bering Sea have
not been relaxed, and I have hopes of being enabled shortly to submit
an effective and satisfactory conventional projet with the maritime
powers for the approval of the Senate.

The coastal boundary between our Alaskan possessions and British
Columbia, I regret to say, has not received the attention demanded by
its importance, and which on several occasions heretofore I have had
the honor to recommend to the Congress.

The admitted impracticability, if not impossibility, of making an
accurate and precise survey and demarcation of the boundary line as
it is recited in the treaty with Russia under which Alaska was ceded
to the United States renders it absolutely requisite for the
prevention of international jurisdictional complications that
adequate appropriation for a reconnoissance and survey to obtain
proper knowledge of the locality and the geographical features of the
boundary should be authorized by Congress with as little delay as
possible.

Knowledge to be only thus obtained is an essential prerequisite for
negotiation for ascertaining a common boundary, or as preliminary to
any other mode of settlement.

It is much to be desired that some agreement should be reached with
Her Majesty's Government by which the damages to life and property on
the Great Lakes may be alleviated by removing or humanely regulating
the obstacles to reciprocal assistance to wrecked or stranded
vessels.

The act of June 19, 1878, which offers to Canadian vessels free
access to our inland waters in aid of wrecked or disabled vessels,
has not yet become effective through concurrent action by Canada.

The due protection of our citizens of French origin or descent from
claim of military service in the event of their returning to or
visiting France has called forth correspondence which was laid before
you at the last session.

In the absence of conventional agreement as to naturalization, which
is greatly to be desired, this Government sees no occasion to recede
from the sound position it has maintained not only with regard to
France, but as to all countries with which the United States have not
concluded special treaties.

Twice within the last year has the imperial household of Germany been
visited by death; and I have hastened to express the sorrow of this
people, and their appreciation of the lofty character of the late
aged Emperor William, and their sympathy with the heroism under
suffering of his son the late Emperor Frederick.

I renew my recommendation of two years ago for the passage of a bill
for the refunding to certain German steamship lines of the interest
upon tonnage dues illegally exacted.

On the 12th [2d] of April last I laid before the House of
Representatives full information respecting our interests in Samoa;
and in the subsequent correspondence on the same subject, which will
be laid before you in due course, the history of events in those
islands will be found.

In a message accompanying my approval, on the 1st day of October
last, of a bill for the exclusion of Chinese laborers, I laid before
Congress full information and all correspondence touching the
negotiation of the treaty with China concluded at this capital on the
12th day of March, 1888, and which, having been confirmed by the
Senate with certain amendments, was rejected by the Chinese
Government. This message contained a recommendation that a sum of
money be appropriated as compensation to Chinese subjects who had
suffered injuries at the hands of lawless men within our
jurisdiction. Such appropriation having been duly made, the fund
awaits reception by the Chinese Government.

It is sincerely hoped that by the cessation of the influx of this
class of Chinese subjects, in accordance with the expressed wish of
both Governments, a cause of unkind feeling has been permanently
removed.

On the 9th of August, 1887, notification was given by the Japanese
minister at this capital of the adjournment of the conference for the
revision of the treaties of Japan with foreign powers, owing to the
objection of his Government to the provision in the draft
jurisdictional convention which required the submission of the
criminal code of the Empire to the powers in advance of its becoming
operative. This notification was, however, accompanied with an
assurance of Japan's intention to continue the work of revision.

Notwithstanding this temporary interruption of negotiations, it is
hoped that improvements may soon be secured in the jurisdictional
system as respects foreigners in Japan, and relief afforded to that
country from the present undue and oppressive foreign control in
matters of commerce.

I earnestly recommend that relief be provided for the injuries
accidentally caused to Japanese subjects in the island Ikisima by the
target practice of one of our vessels.

A diplomatic mission from Korea has been received, and the formal
intercourse between the two countries contemplated by the treaty of
1882 is now established.

Legislative provision is hereby recommended to organize and equip
consular courts in Korea.

Persia has established diplomatic representation at this capital, and
has evinced very great interest in the enterprise and achievements of
our citizens. I am therefore hopeful that beneficial commercial
relations between the two countries may be brought about.

I announce with sincere regret that Hayti has again become the
theater of insurrection, disorder, and bloodshed. The titular
government of president Saloman has been forcibly overthrown and he
driven out of the country to France, where he has since died.

The tenure of power has been so unstable amid the war of factions
that has ensued since the expulsion of President Saloman that no
government constituted by the will of the Haytian people has been
recognized as administering responsibly the affairs of that country.
Our representative has been instructed to abstain from interference
between the warring factions, and a vessel of our Navy has been sent
to Haytian waters to sustain our minister and for the protection of
the persons and property of American citizens.

Due precautions have been taken to enforce our neutrality laws and
prevent our territory from becoming the base of military supplies for
either of the warring factions.

Under color of a blockade, of which no reasonable notice had been
given, and which does not appear to have been efficiently maintained,
a seizure of vessels under the American flag has been reported, and in
consequence measures to prevent and redress any molestation of our
innocent merchantmen have been adopted.

Proclamation was duly made on the 9th day of November, 1887, of the
conventional extensions of the treaty of June 3, 1875, with Hawaii,
under which relations of such special and beneficent intercourse have
been created.

In the vast field of Oriental commerce now unfolded from our Pacific
borders no feature presents stronger recommendations for
Congressional action than the establishment of communication by
submarine telegraph with Honolulu.

The geographical position of the Hawaiian group in relation to our
Pacific States creates a natural interdependency and mutuality of
interest which our present treaties were intended to foster, and
which make close communication a logical and commercial necessity.

The wisdom of concluding a treaty of commercial reciprocity with
Mexico has been heretofore stated in my messages to Congress, and the
lapse of time and growth of commerce with that close neighbor and
sister Republic confirm the judgment so expressed.

The precise relocation of our boundary line is needful, and adequate
appropriation is now recommended.

It is with sincere satisfaction that I am enabled to advert to the
spirit of good neighborhood and friendly cooperation and conciliation
that has marked the correspondence and action of the Mexican
authorities in their share of the task of maintaining law and order
about the line of our common boundary.

The long-pending boundary dispute between Costa Rica and Nicaragua
was referred to my arbitration, and by an award made on the 22d of
March last the question has been finally settled to the expressed
satisfaction of both of the parties in interest.

The Empire of Brazil, in abolishing the last vestige of slavery among
Christian nations, called forth the earnest congratulations of this
Government in expression of the cordial sympathies of our people.

The claims of nearly all other countries against Chile growing out of
her late war with Bolivia and Peru have been disposed of, either by
arbitration or by a lump settlement. Similar claims of our citizens
will continue to be urged upon the Chilean Government, and it is
hoped will not be subject to further delays.

A comprehensive treaty of amity and commerce with Peru was proclaimed
on November 7 last, and it is expected that under its operation mutual
prosperity and good understanding will be promoted.

In pursuance of the policy of arbitration, a treaty to settle the
claim of Santos, an American citizen, against Ecuador has been
concluded under my authority, and will be duly submitted for the
approval of the Senate.

Like disposition of the claim of Carlos Butterfield against Denmark
and of Van Bokkelen against Hayti will probably be made, and I trust
the principle of such settlements may be extended in practice under
the approval of the Senate.

Through unforeseen causes, foreign to the will of both Governments,
the ratification of the convention of December 5, 1885, with
Venezuela, for the rehearing of claims of citizens of the United
States under the treaty of 1866, failed of exchange within the term
provided, and a supplementary convention, further extending the time
for exchange of ratifications and explanatory of an ambiguous
provision of the prior convention, now awaits the advice and consent
of the Senate.

Although this matter, in the stage referred to, concerns only the
concurrent treaty-making power of one branch of Congress, I advert to
it in view of the interest repeatedly and conspicuously shown by you
in your legislative capacity in favor of a speedy and equitable
adjustment of the questions growing out of the discredited judgments
of the previous mixed commission of Caracas. With every desire to do
justice to the representations of Venezuela in this regard, the time
seems to have come to end this matter, and I trust the prompt
confirmation by both parties of the supplementary action referred to
will avert the need of legislative or other action to prevent the
longer withholding of such rights of actual claimants as may be shown
to exist.

As authorized by the Congress, preliminary steps have been taken for
the assemblage at this capital during the coming year of the
representatives of South and Central American States, together with
those of Mexico, Hayti, and San Domingo, to discuss sundry important
monetary and commercial topics.

Excepting in those cases where, from reasons of contiguity of
territory and the existence of a common border line incapable of
being guarded, reciprocal commercial treaties may be found expedient,
it is believed that commercial policies inducing freer mutual exchange
of products can be most advantageously arranged by independent but
cooperative legislation.

In the mode last mentioned the control of our taxation for revenue
will be always retained in our own hands unrestricted by conventional
agreements with other governments.

In conformity also with Congressional authority, the maritime powers
have been invited to confer in Washington in April next upon the
practicability of devising uniform rules and measures for the greater
security of life and property at sea. A disposition to accept on the
part of a number of the powers has already been manifested, and if
the cooperation of the nations chiefly interested shall be secured
important results may be confidently anticipated.

The act of June 26, 1884, and the acts amendatory thereof, in
relation to tonnage duties, have given rise to extended
correspondence with foreign nations with whom we have existing
treaties of navigation and commerce, and have caused wide and
regrettable divergence of opinion in relation to the imposition of
the duties referred to. These questions are important, and I shall
make them the subject of a special and more detailed communication at
the present session.

With the rapid increase of immigration to our shores and the
facilities of modern travel, abuses of the generous privileges
afforded by our naturalization laws call for their careful revision.

The easy and unguarded manner in which certificates of American
citizenship can now be obtained has induced a class, unfortunately
large, to avail themselves of the opportunity to become absolved from
allegiance to their native land, and yet by a foreign residence to
escape any just duty and contribution of service to the country of
their proposed adoption. Thus, while evading the duties of
citizenship to the United States, they may make prompt claim for its
national protection and demand its intervention in their behalf.
International complications of a serious nature arise, and the
correspondence of the State Department discloses the great number and
complexity of the questions which have been raised.

Our laws regulating the issue of passports should be carefully
revised, and the institution of a central bureau of registration at
the capital is again strongly recommended. By this means full
particulars of each case of naturalization in the United States would
be secured and properly indexed and recorded, and thus many cases of
spurious citizenship would be detected and unjust responsibilities
would be avoided.

The reorganization of the consular service is a matter of serious
importance to our national interests. The number of existing
principal consular offices is believed to be greater than is at all
necessary for the conduct of the public business. It need not be our
policy to maintain more than a moderate number of principal offices,
each supported by a salary sufficient to enable the incumbent to live
in comfort, and so distributed as to secure the convenient
supervision, through subordinate agencies, of affairs over a
considerable district.

I repeat the recommendations heretofore made by me that the
appropriations for the maintenance of our diplomatic and consular
service should be recast; that the so-called notarial or unofficial
fees, which our representatives abroad are now permitted to treat as
personal perquisites, should be forbidden; that a system of consular
inspection should be instituted, and that a limited number of
secretaries of legation at large should be authorized.

Preparations for the centennial celebration, on April 30, 1889, of
the inauguration of George Washington as President of the United
States, at the city of New York, have been made by a voluntary
organization of the citizens of that locality, and believing that an
opportunity should be afforded for the expression of the interest
felt throughout the country in this event, I respectfully recommend
fitting and cooperative action by Congress on behalf of the people of
the United States.

The report of the Secretary of the Treasury exhibits in detail the
condition of our national finances and the operations of the several
branches of the Government related to his Department.

The total ordinary revenues of the Government for the fiscal year
ended June 30, 1888, amounted to $379,266,074.76, of which
$219,091,173.63 was received from customs duties and $124,296,871.98
from internal revenue taxes.

The total receipts from all sources exceeded those for the fiscal
year ended June 30, 1887, by $7,862,797.10.

The ordinary expenditures of the Government for the fiscal year
ending June 30, 1888, were $259,653,958.67, leaving a surplus of
$119,612,116.09.

The decrease in these expenditures as compared with the fiscal year
ended June 30, 1887, was $8,278,221.30, notwithstanding the payment
of more than $5,000,000 for pensions in excess of what was paid for
that purpose in the latter-mentioned year.

The revenues of the Government for the year ending June 30, 1889,
ascertained for the quarter ended September 30, 1888, and estimated
for the remainder of the time, amount to $377,000,000, and the actual
and estimated ordinary expenditures for the same year are
$273,000,000, leaving an estimated surplus of $104,000,000.

The estimated receipts for the year ending June 30, 1890, are
$377,000,000, and the estimated ordinary expenditures for the same
time are $275,767,488.34, showing a surplus of $101,232,511.66.

The foregoing statements of surplus do not take into account the sum
necessary to be expended to meet the requirements of the sinking-fund
act, amounting to more than $47,000,000 annually.

The cost of collecting the customs revenues for the last fiscal year
was 2.44 per cent; for the year 1885 it was 3.77 per cent.

The excess of internal-revenue taxes collected during the last fiscal
year over those collected for the year ended June 30, 1887, was
$5,489,174.26, and the cost of collecting this revenue decreased from
3.4 per cent in 1887 to less than 3.2 per cent for the last year. The
tax collected on oleomargarine was $723,948.04 for the year ending
June 30, 1887, and $864,139.88 for the following year.

The requirements of the sinking-fund act have been met for the year
ended June 30, 1888, and for the current year also, by the purchase
of bonds. After complying with this law as positively required, and
bonds sufficient for that purpose had been bought at a premium, it
was not deemed prudent to further expend the surplus in such
purchases until the authority to do so should be more explicit. A
resolution, however, having been passed by both Houses of Congress
removing all doubt as to Executive authority, daily purchases of
bonds were commenced on the 23d day of April, 1888, and have
continued until the present time. By this plan bonds of the
Government not yet due have been purchased up to and including the
30th day of November, 1888, amounting to $94,700,400, the premium
paid thereon amounting to $17,508,613.08.

The premium added to the principal of these bonds represents an
investment yielding about 2 per cent interest for the time they still
had to run, and the saving to the Government represented by the
difference between the amount of interest at 2 per cent upon the sum
paid for principal and premium and what it would have paid for
interest at the rate specified in the bonds if they had run to their
maturity is about $27,165,000.

At first sight this would seem to be a profitable and sensible
transaction on the part of the Government, but, as suggested by the
Secretary of the Treasury, the surplus thus expended for the purchase
of bonds was money drawn from the people in excess of any actual need
of the Government and was so expended rather than allow it to remain
idle in the Treasury. If this surplus, under the operation of just
and equitable laws, had been left in the hands of the people, it
would have been worth in their business at least 6 per cent per
annum. Deducting from the amount of interest upon the principal and
premium of these bonds for the time they had to run at the rate of 6
per cent the saving of 2 per cent made for the people by the purchase
of such bonds, the loss will appear to be $55,760,000.

This calculation would seem to demonstrate that if excessive and
unnecessary taxation is continued and the Government is forced to
pursue this policy of purchasing its own bonds at the premiums which
it will be necessary to pay, the loss to the people will be hundreds
of millions of dollars.

Since the purchase of bonds was undertaken as mentioned nearly all
that have been offered were at last accepted. It has been made quite
apparent that the Government was in danger of being subjected to
combinations to raise their price, as appears by the instance cited
by the Secretary of the offering of bonds of the par value of only
$326,000 so often that the aggregate of the sums demanded for their
purchase amounted to more than $ 19,700,000.

Notwithstanding the large sums paid out in the purchase of bonds, the
surplus in the Treasury on the 30th day of November, 1888, was
$52,234,610.01, after deducting about $20,000,000 just drawn out for
the payment of pensions.

At the close of the fiscal year ended June 30, 1887, there had been
coined under the compulsory silver-coinage act $266,988,280 in silver
dollars, $55,504,310 of which were in the hands of the people.

On the 30th day of June, 1888, there had been coined $299,708,790;
and of this $55,829,303 was in circulation in coin, and $200,387,376
in silver certificates, for the redemption of which silver dollars to
that amount were held by the Government.

On the 30th day of November, 1888, $312,570,990 had been coined,
$60,970,990 of the silver dollars were actually in circulation, and
$237,418,346 in certificates.

The Secretary recommends the suspension of the further coinage of
silver, and in such recommendation I earnestly concur.

For further valuable information and timely recommendations I ask the
careful attention of the Congress to the Secretary's report.

The Secretary of War reports that the Army at the date of the last
consolidated returns consisted of 2,189 officers and 24,549 enlisted
men.

The actual expenditures of the War Department for the fiscal year
ended June 30, 1888, amounted to $41,165,107.07, of which sum
$9,158,516.63 was expended for public works, including river and
harbor improvements.

"The Board of Ordnance and Fortifications" provided for under the act
approved September 22 last was convened October 30, 1888, and plans
and specifications for procuring forgings for 8, 10, and 12 inch
guns, under provisions of section 4, and also for procuring 12-inch
breech-loading mortars, cast iron, hooped with steel, under the
provisions of section 5 of the said act, were submitted to the
Secretary of War for reference to the board, by the Ordnance
Department, on the same date.

These plans and specifications having been promptly approved by the
board and the Secretary of War, the necessary authority to publish
advertisements inviting proposals in the newspapers throughout the
country was granted by the Secretary on November 12, and on November
13 the advertisements were sent out to the different newspapers
designated. The bids for the steel forgings are to be opened on
December 20, 1888, and for the mortars on December 15, 1888.

A board of ordnance officers was convened at the Watervliet Arsenal
on October 4, 1888, to prepare the necessary plans and specifications
for the establishment of an army gun factory at that point. The
preliminary report of this board, with estimates for shop buildings
and officers' quarters, was approved by the Board of Ordnance and
Fortifications November 6 and 8. The specifications and form of
advertisement and instructions to bidders have been prepared, and
advertisements inviting proposals for the excavations for the shop
building and for erecting the two sets of officers' quarters have
been published. The detailed drawings and specifications for the
gun-factory building are well in hand, and will be finished within
three or four months, when bids will be invited for the erection of
the building. The list of machines, etc., is made out, and it is
expected that the plans for the large lathes, etc., will be completed
within about four months, and after approval by the Board of Ordnance
and Fortifications bids for furnishing the same will be invited. The
machines and other fixtures will be completed as soon as the shop is
in readiness to receive them, probably about July, 1890.

Under the provisions of the Army bill for the procurement of
pneumatic dynamite guns, the necessary specifications are now being
prepared, and advertisements for proposals will issue early in
December. The guns will probably be of 15 inches caliber and fire a
projectile that will carry a charge each of about 500 pounds of
explosive gelatine with full-caliber projectiles. The guns will
probably be delivered in from six to ten months from the date of the
contract, so that all the guns of this class that can be procured
under the provisions of the law will be purchased during the year
1889.

I earnestly request that the recommendations contained in the
Secretary's report, all of which are, in my opinion, calculated to
increase the usefulness and discipline of the Army, may receive the
consideration of the Congress. Among these the proposal that there
should be provided a plan for the examination of officers to test
their fitness for promotion is of the utmost importance. This reform
has been before recommended in the reports of the Secretary, and its
expediency is so fully demonstrated by the argument he presents in
its favor that its adoption should no longer be neglected.

The death of General Sheridan in August last was a national
affliction. The Army then lost the grandest of its chiefs. The
country lost a brave and experienced soldier, a wise and discreet
counselor, and a modest and sensible man. Those who in any manner
came within the range of his personal association will never fail to
pay deserved and willing homage to his greatness and the glory of his
career, but they will cherish with more tender sensibility the loving
memory of his simple, generous, and considerate nature.

The Apache Indians, whose removal from their reservation in Arizona
followed the capture of those of their number who engaged in a bloody
and murderous raid during a part of the years 1885 and 1886, are now
held as prisoners of war at Mount Vernon Barracks, in the State of
Alabama. They numbered on the 31st day of October, the date of the
last report, 83 men, 170 women, 70 boys, and 59 girls; in all, 382
persons. The commanding officer states that they are in good health
and contented, and that they are kept employed as fully as is
possible in the circumstances. The children, as they arrive at a
suitable age, are sent to the Indian schools at Carlisle and
Hampton.

Last summer some charitable and kind people asked permission to send
two teachers to these Indians for the purpose of instructing the
adults as well as such children as should be found there. Such
permission was readily granted, accommodations were provided for the
teachers, and some portions of the buildings at the barracks were
made available for school purposes. The good work contemplated has
been commenced, and the teachers engaged are paid by the ladies with
whom the plan originated.

I am not at all in sympathy with those benevolent but injudicious
people who are constantly insisting that these Indians should be
returned to their reservation. Their removal was an absolute
necessity if the lives and property of citizens upon the frontier are
to be at all regarded by the Government. Their continued restraint at
a distance from the scene of their repeated and cruel murders and
outrages is still necessary. It is a mistaken philanthropy, every way
injurious, which prompts the desire to see these savages returned to
their old haunts. They are in their present location as the result of
the best judgment of those having official responsibility in the
matter, and who are by no means lacking in kind consideration for the
Indians. A number of these prisoners have forfeited their lives to
outraged law and humanity. Experience has proved that they are
dangerous and can not be trusted. This is true not only of those who
on the warpath have heretofore actually been guilty of atrocious
murder, but of their kindred and friends, who, while they remained
upon their reservation, furnished aid and comfort to those absent
with bloody intent.

These prisoners should be treated kindly and kept in restraint far
from the locality of their former reservation; they should be
subjected to efforts calculated to lead to their improvement and the
softening of their savage and cruel instincts, but their return to
their old home should be persistently resisted.

The Secretary in his report gives a graphic history of these Indians,
and recites with painful vividness their bloody deeds and the unhappy
failure of the Government to manage them by peaceful means. It will
be amazing if a perusal of this history will allow the survival of a
desire for the return of these prisoners to their reservation upon
sentimental or any other grounds.

The report of the Secretary of the Navy demonstrates very intelligent
management in that important Department, and discloses the most
satisfactory progress in the work of reconstructing the Navy made
during the past year. Of the ships in course of construction five,
viz, the Charleston, Baltimore, Yorktown, Vesuvius, and the Petrel,
have in that time been launched and are rapidly approaching
completion; and in addition to the above, the Philadelphia, the San
Francisco, the Newark, the Bennington, the Concord, and the
Herreshoff torpedo boat are all under contract for delivery to the
Department during the next year. The progress already made and being
made gives good ground for the expectation that these eleven vessels
will be incorporated as part of the American Navy within the next
twelve months.

The report shows that notwithstanding the large expenditures for new
construction and the additional labor they involve the total ordinary
or current expenditures of the Department for the three years ending
June 30, 1888, are less by more than 20 per cent than such
expenditures for the three years ending June 30, 1884.

The various steps which have been taken to improve the business
methods of the Department are reviewed by the Secretary. The
purchasing of supplies has been consolidated and placed under a
responsible bureau head. This has resulted in the curtailment of open
purchases, which in the years 1884 and 1885 amounted to over 50 per
cent of all the purchases of the Department, to less than 11 per
cent; so that at the present time about 90 per cent of the total
departmental purchases are made by contract and after competition. As
the expenditures on this account exceed an average of $2,000,000
annually, it is evident that an important improvement in the system
has been inaugurated and substantial economies introduced.

The report of the Postmaster-General shows a marked increase of
business in every branch of the postal service.

The number of post-offices on July 1, 1888, was 57,376, an increase
of 6,124 in three years and of 2,219 for the last fiscal year. The
latter-mentioned increase is classified as follows:

New England States -

Middle States - 181

Southern States and Indian Territory (41) - 1,406

The States and Territories of the Pacific Coast - 190

The ten States and Territories of the West and Northwest - 435

District of Columbia - 2 -