Speech Transcript:

 To the Senate and House of Representatives:

The reports of the heads of the several Executive Departments
required by law to be submitted to me, which are herewith
transmitted, and the reports of the Secretary of the Treasury and the
Attorney-General, made directly to Congress, furnish a comprehensive
view of the administrative work of the last fiscal year relating to
internal affair. It would be of great advantage if these reports
could have an alternative perusal by every member of Congress and by
all who take an interest in public affairs. Such a perusal could not
fail to excite a higher appreciation of the vast labor and
conscientious effort which are given to the conduct of our civil
administration.

The reports will, I believe, show that every question has been
approached, considered, and decided from the standpoint of public
duty upon considerations affecting the public interests alone. Again
I invite to every branch of the service the attention and scrutiny of
Congress.

The work of the State Department during the last year has been
characterized by an unusual number of important negotiations and by
diplomatic results of a notable and highly beneficial character.
Among these are the reciprocal trade arrangements which have been
concluded, in the exercise of the powers conferred by section 3 of
the tariff law, with the Republic of Brazil, with Spain for its West
India possessions, and with Santo Domingo. Like negotiations with
other countries have been much advanced, and it is hoped that before
the close of the year further definitive trade arrangements of great
value will be concluded.

In view of the reports which had been received as to the diminution
of the seal herds in the Bering Sea, I deemed it wise to propose to
Her Majesty's Government in February last that an agreement for a
closed season should be made pending the negotiations for
arbitration, which then seemed to be approaching a favorable
conclusion. After much correspondence and delays, for which this
Government was not responsible, an agreement was reached and signed
on the 15th of June, by which Great Britain undertook from that date
and until May 1, 1892, to prohibit the killing by her subjects of
seals in the Bering Sea, and the Government of the United States
during the same period to enforce its existing prohibition against
pelagic sealing and to limit the catch by the fur-seal company upon
the islands to 7,500 skins. If this agreement could have been reached
earlier in response to the strenuous endeavors of this Government, it
would have been more effective; but coming even as late as it did it
unquestionably resulted in greatly diminishing the destruction of the
seals by the Canadian sealers.

In my last annual message I stated that the basis of arbitration
proposed by Her Majesty's Government for the adjustment of the
long-pending controversy as to the seal fisheries was not acceptable.
I am glad now to be able to announce that terms satisfactory to this
Government have been agreed upon and that an agreement as to the
arbitrators is all that is necessary to the completion of the
convention. In view of the advanced position which this Government
has taken upon the subject of international arbitration, this renewed
expression of our adherence to this method for the settlement of
disputes such as have arisen in the Bering Sea will, I doubt not,
meet with the concurrence of Congress.

Provision should be made for a joint demarcation of the frontier line
between Canada and the United States wherever required by the
increasing border settlements, and especially for the exact location
of the water boundary in the straits and rivers.

I should have been glad to announce some favorable disposition of the
boundary dispute between Great Britain and Venezuela touching the
western frontier of British Guiana, but the friendly efforts of the
United States in that direction have thus far been unavailing. This
Government will continue to express its concern at any appearance of
foreign encroachment on territories long under the administrative
control of American States. The determination of a disputed boundary
is easily attainable by amicable arbitration where the rights of the
respective parties rest, as here, on historic facts readily
ascertainable.

The law of the last Congress providing a system of inspection for our
meats intended for export, and clothing the President with power to
exclude foreign products from our market in case the country sending
them should perpetuate unjust discriminations against any product of
the United States, placed this Government in a position to
effectively urge the removal of such discriminations against our
meats. It is gratifying to be able to state that Germany, Denmark,
Italy, Austria, and France, in the order named, have opened their
ports to inspected American pork products. The removal of these
restrictions in every instance was asked for and given solely upon
the ground that we have now provided a meat inspection that should be
accepted as adequate to the complete removal of the dangers, real or
fancied, which had been previously urged. The State Department, our
ministers abroad, and the Secretary of Agriculture have cooperated
with unflagging and intelligent zeal for the accomplishment of this
great result. The outlines of an agreement have been reached with
Germany looking to equitable trade concessions in consideration of
the continued free importation of her sugars, but the time has not
yet arrived when this correspondence can be submitted to Congress.

The recent political disturbances in the Republic of Brazil have
excited regret and solicitude. The information we possessed was too
meager to enable us to form a satisfactory judgment of the causes
leading to the temporary assumption of supreme power by President
Fonseca; but this Government did not fail to express to him its
anxious solicitude for the peace of Brazil and for the maintenance of
the free political institutions which had recently been established
there, nor to offer our advice that great moderation should be
observed in the clash of parties and the contest for leadership.
These counsels were received in the most friendly spirit, and the
latest information is that constitutional government has been
reestablished without bloodshed.

The lynching at New Orleans in March last of eleven men of Italian
nativity by a mob of citizens was a most deplorable and discreditable
incident. It did not, however, have its origin in any general
animosity to the Italian people, nor in any disrespect to the
Government of Italy, with which our relations were of the most
friendly character. The fury of the mob was directed against these
men as the supposed participants or accessories in the murder of a
city officer. I do not allude to this as mitigating in any degree
this offense against law and humanity, but only as affecting the
international questions which grew out of it. It was at once
represented by the Italian minister that several of those whose lives
had been taken by the mob were Italian subjects, and a demand was made
for the punishment of the participants and for an indemnity to the
families of those who were killed. It is to be regretted that the
manner in which these claims were presented was not such as to
promote a calm discussion of the questions involved; but this may
well be attributed to the excitement and indignation which the crime
naturally evoked. The views of this Government as to its obligations
to foreigners domiciled here were fully stated in the correspondence,
as well as its purpose to make an investigation of the affair with a
view to determine whether there were present any circumstances that
could under such rules of duty as we had indicated create an
obligation upon the United States. The temporary absence of a
minister plenipotentiary of Italy at this capital has retarded the
further correspondence, but it is not doubted that a friendly
conclusion is attainable.

Some suggestions growing out of this unhappy incident are worthy the
attention of Congress. It would, I believe, be entirely competent for
Congress to make offenses against the treaty rights of foreigners
domiciled in the United States cognizable in the Federal courts. This
has not, however, been done, and the Federal officers and courts have
no power in such cases to intervene, either for the protection of a
foreign citizen or for the punishment of his slayers. It seems to me
to follow, in this state of the law, that the officers of the State
charged with police and judicial powers in such cases must in the
consideration of international questions growing out of such
incidents be regarded in such sense as Federal agents as to make this
Government answerable for their acts in cases where it would be
answerable if the United States had used its constitutional power to
define and punish crime against treaty rights.

The civil war in Chile, which began in January last, was continued,
but fortunately with infrequent and not important armed collisions,
until August 28, when the Congressional forces landed near Valparaiso
and after a bloody engagement captured that city. President Balmaceda
at once recognized that his cause was lost, and a Provisional
Government was speedily established by the victorious party. Our
minister was promptly directed to recognize and put himself in
communication with this Government so soon as it should have
established its de facto character, which was done. During the
pendency of this civil contest frequent indirect appeals were made to
this Government to extend belligerent rights to the insurgents and to
give audience to their representatives. This was declined, and that
policy was pursued throughout which this Government when wrenched by
civil war so strenuously insisted upon on the part of European
nations. The Itata, an armed vessel commanded by a naval officer of
the insurgent fleet, manned by its sailors and with soldiers on
board, was seized under process of the United States court at San
Diego, Cal., for a violation of our neutrality laws. While in the
custody of an officer of the court the vessel was forcibly wrested
from his control and put to sea. It would have been inconsistent with
the dignity and self-respect of this Government not to have insisted
that the Itala should be returned to San Diego to abide the judgment
of the court. This was so clear to the junta of the Congressional
party, established at Iquique, that before the arrival of the Itata
at that port the secretary of foreign relations of the Provisional
Government addressed to Rear-Admiral Brown, commanding the United
States naval forces, a communication, from which the following is an
extract: The Provisional Government has learned by the cablegrams of
the Associated Press that the transport Itata, detained in San Diego
by order of the United States for taking on board munitions of war,
and in possession of the marshal, left the port, carrying on board
this official, who was landed at a point near the coast, and then
continued her voyage. If this news be correct this Government would
deplore the conduct of the Itata, and as an evidence that it is not
disposed to support or agree to the infraction of the laws of the
United States the undersigned takes advantage of the personal
relations you have been good enough to maintain with him since your
arrival in this port to declare to you that as soon as she is within
reach of our orders his Government will put the Itata, with the arms
and munitions she took on board in Sail Diego, at the disposition of
the United States. A trial in the district court of the United States
for the southern district of California has recently resulted in a
decision holding, among other things, that inasmuch as the
Congressional party had not been recognized as a belligerent the acts
done in its interest could not be a violation of our neutrality laws.
From this judgment the United States has appealed, not that the
condemnation of the vessel is a matter of importance, but that we may
know what the present state of our law is; for if this construction of
the statute is correct there is obvious necessity for revision and
amendment.

During the progress of the war in Chile this Government tendered its
good offices to bring about a peaceful adjustment, and it was at one
time hoped that a good result might be reached; but in this we were
disappointed.

The instructions to our naval officers and to our minister at
Santiago from the first to the last of this struggle enjoined upon
them the most impartial treatment and absolute noninterference. I am
satisfied that these instructions were observed and that our
representatives were always watchful to use their influence
impartially in the interest of humanity, and on more than one
occasion did so effectively. We could not forget, however, that this
Government was in diplomatic relations with the then established
Government of Chile, as it is now in such relations with the
successor of that Government. I am quite sure that President Montt,
who has, under circumstances of promise for the peace of Chile, been
installed as President of that Republic, will not desire that in the
unfortunate event of any revolt against his authority the policy of
this Government should be other than that which we have recently
observed. No official complaint of the conduct of our minister or of
our naval officers during the struggle has been presented to this
Government, and it is a matter of regret that so many of our own
people should have given ear to unofficial charges and complaints
that manifestly had their origin in rival interests and in a wish to
pervert the relations of the United States with Chile.

The collapse of the Government of Balmaceda brought about a condition
which is unfortunately too familiar in the history of the Central and
South American States. With the overthrow of the Balmaceda Government
he and many of his councilors and officers became at once fugitives
for their lives and appealed to the commanding officers of the
foreign naval vessels in the harbor of Valparaiso and to the resident
foreign ministers at Santiago for asylum. This asylum was freely
given, according to my information, by the naval vessels of several
foreign powers and by several of the legations at Santiago. The
American minister as well as his colleagues, acting upon the impulse
of humanity, extended asylum to political refugees whose lives were
in peril. I have not been willing to direct the surrender of such of
these persons as are still in the American legation without suitable
conditions.

It is believed that the Government of Chile is not in a position, in
view of the precedents with which it has been connected, to broadly
deny the right of asylum, and the correspondence has not thus far
presented any such denial. The treatment of our minister for a time
was such as to call for a decided protest, and it was very gratifying
to observe that unfriendly measures, which were undoubtedly the result
of the prevailing excitement, were at once rescinded or suitably
relaxed.

On the 16th of October an event occurred in Valparaiso so serious and
tragic in its circumstances and results as to very justly excite the
indignation of our people and to call for prompt and decided action
on the part of this Government. A considerable number of the sailors
of the United States steamship Baltimore, then in the harbor at
Valparaiso, being upon shore leave and unarmed, were assaulted by
armed men nearly simultaneously in different localities in the city.
One petty officer was killed outright and seven or eight seamen were
seriously wounded, one of whom has since died. So savage and brutal
was the assault that several of our sailors received more than two
and one as many as eighteen stab wounds. An investigation of the
affair was promptly made by a board of officers of the Baltimore, and
their report shows that these assaults were unprovoked, that our men
were conducting themselves in a peaceable and orderly manner, and
that some of the police of the city took part in the assault and used
their weapons with fatal effect, while a few others, with some
well-disposed citizens, endeavored to protect our men. Thirty-six of
our sailors were arrested, and some of them while being taken to
prison were cruelly beaten and maltreated. The fact that they were
all discharged, no criminal charge being lodged against any one of
them, shows very clearly that they were innocent of any breach of the
peace.

So far as I have yet been able to learn no other explanation of this
bloody work has been suggested than that it had its origin in
hostility to those men as sailors of the United States, wearing the
uniform of their Government, and not in any individual act or
personal animosity. The attention of the Chilean Government was at
once called to this affair, and a statement of the facts obtained by
the investigation we had conducted was submitted, accompanied by a
request to be advised of any other or qualifying facts in the
possession of the Chilean Government that might tend to relieve this
affair of the appearance of an insult to this Government. The Chilean
Government was also advised that if such qualifying facts did not
exist this Government would confidently expect full and prompt
reparation.

It is to be regretted that the reply of the secretary for foreign
affairs of the Provisional Government was couched in an offensive
tone. To this no response has been made. This Government is now
awaiting the result of an investigation which has been conducted by
the criminal court at Valparaiso. It is reported unofficially that
the investigation is about completed, and it is expected that the
result will soon be communicated to this Government, together with
some adequate and satisfactory response to the note by which the
attention of Chile was called to this incident. If these just
expectations should be disappointed or further needless delay
intervene, I will by a special message bring this matter again to the
attention of Congress for such action as may be necessary. The entire
correspondence with the Government of Chile will at an early day be
submitted to Congress.

I renew the recommendation of my special message dated January 16,
1890, for the adoption of the necessary legislation to enable this
Government to apply in the case of Sweden and Norway the same rule in
respect to the levying of tonnage dues as was claimed and secured to
the shipping of the United States in 1828 under Article VIII of the
treaty of 1827.

The adjournment of the Senate without action on the pending acts for
the suppression of the slave traffic in Africa and for the reform of
the revenue tariff of the Independent State of the Kongo left this
Government unable to exchange those acts on the date fixed, July 2,
1891. A modus vivendi has been concluded by which the power of the
Kongo State to levy duties on imports is left unimpaired, and by
agreement of all the signatories to the general slave-trade act the
time for the exchange of ratifications on the part of the United
States has been extended to February 2, 1892.

The late outbreak against foreigners in various parts of the Chinese
Empire has been a cause of deep concern in view of the numerous
establishments of our citizens in the interior of that country. This
Government can do no less than insist upon a continuance of the
protective and punitory measures which the Chinese Government has
heretofore applied. No effort will be omitted to protect our citizens
peaceably sojourning in China, but recent unofficial information
indicates that what was at first regarded as an outbreak of mob
violence against foreigners has assumed the larger form of an
insurrection against public order.

The Chinese Government has declined to receive Mr. Blair as the
minister of the United States on the ground that as a participant
while a Senator in the enactment of the existing legislation against
the introduction of Chinese laborers he has become unfriendly and
objectionable to China. I have felt constrained to point out to the
Chinese Government the untenableness of this position, which seems to
rest as much on the unacceptability of our legislation as on that of
the person chosen, and which if admitted would practically debar the
selection of any representative so long as the existing laws remain
in force.

You will be called upon to consider the expediency of making special
provision by law for the temporary admission of some Chinese artisans
and laborers in connection with the exhibit of Chinese industries at
the approaching Columbian Exposition. I regard it as desirable that
the Chinese exhibit be facilitated in every proper way.

A question has arisen with the Government of Spain touching the
rights of American citizens in the Caroline Islands. Our citizens
there long prior to the confirmation of Spain's claim to the islands
had secured by settlement and purchase certain rights to the
recognition and maintenance of which the faith of Spain was pledged.
I have had reason within the past year very strongly to protest
against the failure to carry out this pledge on the part of His
Majesty's ministers, which has resulted in great injustice and injury
to the American residents.

The Government and people of Spain propose to celebrate the four
hundredth anniversary of the discovery of America by holding an
exposition at Madrid, which will open on the 12th of September and
continue until the 31st of December, 1892. A cordial invitation has
been extended to the United States to take part in this
commemoration, and as Spain was one of the first nations to express
the intention to participate in the World's Columbian Exposition at
Chicago, it would be very appropriate for this Government to give
this invitation its friendly promotion.

Surveys for the connecting links of the projected intercontinental
railway are in progress, not only in Mexico, but at various points
along the course mapped out. Three surveying parties are now in the
field under the direction of the commission. Nearly 1,000 miles of
the proposed road have been surveyed, including the most difficult
part, that through Ecuador and the southern part of Colombia. The
reports of the engineers are very satisfactory, and show that no
insurmountable obstacles have been met with.

On November 12, 1884, a treaty was concluded with Mexico reaffirming
the boundary between the two countries as described in the treaties
of February 2, 1848, and December 30, 1853. March 1, 1889, a further
treaty was negotiated to facilitate the carrying out of the
principles of the treaty of 1884 and to avoid the difficulties
occasioned by reason of the changes and alterations that take place
from natural causes in the Rio Grande and Colorado rivers in the
portions thereof constituting the boundary line between the two
Republics. The International Boundary Commission provided for by the
treaty of 1889 to have exclusive jurisdiction of any question that
may arise has been named by the Mexican Government. An appropriation
is necessary to enable the United States to fulfill its treaty
obligations in this respect.

The death of King Kalakaua in the United States afforded occasion to
testify our friendship for Hawaii by conveying the King's body to his
own land in a naval vessel with all due honors. The Government of his
successor, Queen Liliuokolani is seeking to promote closer commercial
relations with the United States. Surveys for the much-needed
submarine cable from our Pacific coast to Honolulu are in progress,
and this enterprise should have the suitable promotion of the two
Governments. I strongly recommend that provision be made for
improving the harbor of Pearl River and equipping it as a naval
station.

The arbitration treaty formulated by the International American
Conference lapsed by reason of the failure to exchange ratifications
fully within the limit of time provided; but several of the
Governments concerned have expressed a desire to save this important
result of the conference by an extension of the period. It is, in my
judgment, incumbent upon the United States to conserve the
influential initiative it has taken in this measure by ratifying the
instrument and by advocating the proposed extension of the time for
exchange. These views have been made known to the other signatories.

This Government has found occasion to express in a friendly spirit,
but with much earnestness, to the Government of the Czar its serious
concern because of the harsh measures now being enforced against the
Hebrews in Russia. By the revival of antisemitic laws, long in
abeyance, great numbers of those unfortunate people have been
constrained to abandon their homes and leave the Empire by reason of
the impossibility of finding subsistence within the pale to which it
is sought to confine them. The immigration of these people to the
United States--many other countries being closed to them--is largely
increasing and is likely to assume proportions which may make it
difficult to find homes and employment for them here and to seriously
affect the labor market. It is estimated that over 1,000,000 will be
forced from Russia within a few years. The Hebrew is never a beggar;
he has always kept the law--life by toil--often under severe and
oppressive civil restrictions. It is also true that no race, sect, or
class has more fully cared for its own than the Hebrew race. But the
sudden transfer of such a multitude under conditions that tend to
strip them of their small accumulations and to depress their energies
and courage is neither good for them nor for us.

The banishment, whether by direct decree or by not less certain
indirect methods, of so large a number of men and women is not a
local question. A decree to leave one country is in the nature of
things an order to enter another--some other. This consideration, as
well as the suggestion of humanity, furnishes ample ground for the
remonstrances which we have presented to Russia, while our historic
friendship for that Government can not fail to give the assurance
that our representations are those of a sincere wellwisher.

The annual report of the Maritime Canal Company of Nicaragua shows
that much costly and necessary preparatory work has been done during
the year in the construction of shops, railroad tracks, and harbor
piers and breakwaters, and that the work of canal construction has
made some progress.

I deem it to be a matter of the highest concern to the United States
that this canal, connecting the waters of the Atlantic and Pacific
oceans and giving to us a short water communication between our ports
upon those two great seas, should be speedily constructed and at the
smallest practicable limit of cost. The gain in freights to the
people and the direct saving to the Government of the United States
in the use of its naval vessels would pay the entire cost of this
work within a short series of years. The report of the Secretary of
the Navy shows the saving in our naval expenditures which would
result.

The Senator from Alabama (Mr. Morgan) in his argument upon this
subject before the Senate at the last session did not overestimate
the importance of this work when he said that "the canal is the most
important subject now connected with the commercial growth and
progress of the United States."

If this work is to be promoted by the usual financial methods and
without the aid of this Government, the expenditures in its
interest-bearing securities and stock will probably be twice the
actual cost. This will necessitate higher tolls and constitute a
heavy and altogether needless burden upon our commerce and that of
the world. Every dollar of the bonds and stock of the company should
represent a dollar expended in the legitimate and economical
prosecution of the work. This is only possible by giving to the bonds
the guaranty of the United States Government. Such a guaranty would
secure the ready sale at par of a 3 per cent bond from time to time
as the money was needed. I do not doubt that built upon these
business methods the canal would when fully inaugurated earn its
fixed charges and operating expenses. But if its bonds are to be
marketed at heavy discounts and every bond sold is to be accompanied
by a gift of stock, as has come to be expected by investors in such
enterprises, the traffic will be seriously burdened to pay interest
and dividends. I am quite willing to recommend Government promotion
in the prosecution of a work which, if no other means offered for
securing its completion, is of such transcendent interest that the
Government should, in my opinion, secure it by direct appropriations
from its Treasury.

A guaranty of the bonds of the canal company to an amount necessary
to the completion of the canal could, I think, be so given as not to
involve any serious risk of ultimate loss. The things to be carefully
guarded are the completion of the work within the limits of the
guaranty, the subrogation of the United States to the rights of the
first-mortgage bondholders for any amounts it may have to pay, and in
the meantime a control of the stock of the company as a security
against mismanagement and loss. I most sincerely hope that neither
party nor sectional lines will be drawn upon this great American
project, so full of interest to the people of all our States and so
influential in its effects upon the prestige and prosperity of our
common country.

The island of Navassa, in the West Indian group, has, under the
provisions of Title VII of the Revised Statutes, been recognized by
the President as appertaining to the United States. It contains guano
deposits, is owned by the Navassa Phosphate Company, and is occupied
solely its employees. In September, 1889, a revolt took place among
these laborers, resulting in the killing of some of the agents of the
company, caused, as the laborers claimed, by cruel treatment. These
men were arrested and tried in the United States court at Baltimore,
under section 5576 of the statute referred to, as if the offenses had
been committed on board a merchant vessel of the United States on the
high seas. There appeared on the trial and otherwise came to me such
evidences of the bad treatment of the men that in consideration of
this and of the fact that the men had no access to any public officer
or tribunal for protection or the redress of their wrongs I commuted
the death sentences that had been passed by the court upon three of
them. In April last my attention was again called to this island and
to the unregulated condition of things there by a letter from a
colored laborer, who complained that he was wrongfully detained upon
the island by the phosphate company after the expiration of his
contract of service. A naval vessel was sent to examine into the case
of this man and generally into the condition of things on the island.
It was found that the laborer referred to had been detained beyond
the contract limit and that a condition of revolt again existed among
the laborers. A board of naval officers reported, among other things,
as follows: We would desire to state further that the discipline
maintained on the island seems to be that of a convict establishment
without its comforts and cleanliness, and that until more attention
is paid to the shipping of laborers by placing it under Government
supervision to prevent misunderstanding and misrepresentation, and
until some amelioration is shown in the treatment of the laborers,
these disorders will be of constant occurrence. I recommend
legislation that shall place labor contracts upon this and other
islands having the relation that Navassa has to the United States
under the supervision of a court commissioner, and that shall provide
at the expense of the owners an officer to reside upon the island,
with power to judge and adjust disputes and to enforce a just and
humane treatment of the employees. It is inexcusable that American
laborers should be left within our own jurisdiction without access to
any Government officer or tribunal for their protection and the
redress of their wrongs.

International copyright has been secured, in accordance with the
conditions of the act of March 3, 1891, with Belgium, France, Great
Britain and the British possessions, and Switzerland, the laws of
those countries permitting to our citizens the benefit of copyright
on substantially the same basis as to their own citizens or
subjects.

With Germany a special convention has been negotiated upon this
subject which will bring that country within the reciprocal benefits
of our legislation.

The general interest in the operations of the Treasury Department has
been much augmented during the last year by reason of the conflicting
predictions, which accompanied and followed the tariff and other
legislation of the last Congress affecting the revenues, as to the
results of this legislation upon the Treasury and upon the country.
On the one hand it was contended that imports would so fall off as to
leave the Treasury bankrupt and that the prices of articles entering
into the living of the people would be so enhanced as to disastrously
affect their comfort and happiness, while on the other it was argued
that the loss to the revenue, largely the result of placing sugar on
the free list, would be a direct gain to the people; that the prices
of the necessaries of life, including those most highly protected,
would not be enhanced; that labor would have a larger market and the
products of the farm advanced prices, while the Treasury surplus and
receipts would be adequate to meet the appropriations, including the
large exceptional expenditures for the refunding to the States of the
direct tax and the redemption of the 4 1/2 per cent bonds.

It is not my purpose to enter at any length into a discussion of the
effects of the legislation to which I have referred; but a brief
examination of the statistics of the Treasury and a general glance at
the state of business throughout the country will, I think, satisfy
any impartial inquirer that its results have disappointed the evil
prophecies of its opponents and in a large measure realized the
hopeful predictions of its friends. Rarely, if ever before, in the
history of the country has there been a time when the proceeds of one
day's labor or the product of one farmed acre would purchase so large
an amount of those things that enter into the living of the masses of
the people. I believe that a full test will develop the fact that the
tariff act of the Fifty-first Congress is very favorable in its
average effect upon the prices of articles entering into common use.

During the twelve months from October 1, 1890, to September 30, 1891,
the total value of our foreign commerce (imports and exports combined)
was $1,747,806,406, which was the largest of any year in the history
of the United States. The largest in any previous year was in 1890,
when our commerce amounted to $1,647,139,093, and the last year
exceeds this enormous aggregate by over one hundred millions. It is
interesting, and to some will be surprising, to know that during the
year ending September 30, 1891, our imports of merchandise amounted
to $824,715,270, which was an increase of more than $11,000,000 over
the value of the imports of the corresponding months of the preceding
year, when the imports of merchandise were unusually large in
anticipation of the tariff legislation then pending. The average
annual value of the imports of merchandise for the ten years from
1881 to 1890 was $692,186,522, and during the year ending September
30, 1891, this annual average was exceeded by $132,528,469.

The value of free imports during the twelve months ending September
30, 1891, was $118,092,387 more than the value of free imports during
the corresponding twelve months of the preceding year, and there was
during the same period a decrease of $106,846,508 in the value of
imports of dutiable merchandise. The percentage of merchandise
admitted free of duty during the year to which I have referred, the
first under the new tariff, was 48.18, while during the preceding
twelve months, under the old tariff, the percentage was 34.27, an
increase of 13.91 per cent. If we take the six months ending
September 30 last, which covers the time during which sugars have
been admitted free of duty, the per cent of value of merchandise
imported free of duty is found to be 55.37, which is a larger
percentage of free imports than during any prior fiscal year in the
history of the Government.

If we turn to exports of merchandise, the statistics are full of
gratification. The value of such exports of merchandise for the
twelve months ending September 30, 1891, was $923,091,136, while for
the corresponding previous twelve months it was $860,177,115, an
increase of $62,914,021, which is nearly three times the average
annual increase of exports of merchandise for the preceding twenty
years. This exceeds in amount and value the exports of merchandise
during any year in the history of the Government. The increase in the
value of exports of agricultural products during the year referred to
over the corresponding twelve months of the prior year was
$45,846,197, while the increase in the value of exports of
manufactured products was $16,838,240.

There is certainly nothing in the condition of trade, foreign or
domestic, there is certainly nothing in the condition of our people
of any class, to suggest that the existing tariff and revenue
legislation bears oppressively upon the people or retards the
commercial development of the nation. It may be argued that our
condition would be better if tariff legislation were upon a
free-trade basis; but it can not be denied that all the conditions of
prosperity and of general contentment are present in a larger degree
than ever before in our history, and that, too, just when it was
prophesied they would be in the worst state. Agitation for radical
changes in tariff and financial legislation can not help but may
seriously impede business, to the prosperity of which some degree of
stability in legislation is essential.

I think there are conclusive evidences that the new tariff has
created several great industries, which will within a few years give
employment to several hundred thousand American working men and
women. In view of the somewhat overcrowded condition of the labor
market of the United States, every patriotic citizen should rejoice
at such a result.

The report of the Secretary of the Treasury shows that the total
receipts of the Government from all sources for the fiscal year
ending June 30, 1891, were $458,544,233.03, while the expenditures
for the same period were $421,304,470.46, leaving a surplus of
$37,239,762.57.

The receipts of the fiscal year ending June 30, 1892, actual and
estimated, are $433,000,000 and the expenditures $409,000,000. For
the fiscal year ending June 30, 1893, the estimated receipts are
$455,336,350 and the expenditures $441,300,093.

Under the law of July 14, 1890, the Secretary of the Treasury has
purchased (since August 13) during the fiscal year 48,393,113 ounces
of silver bullion at an average cost of $1.045 per ounce. The highest
price paid during the year was $1.2025 and the lowest $0.9636. In
exchange for this silver bullion there have been issued $50,577,498
of the Treasury notes authorized by the act. The lowest price of
silver reached during the fiscal year was $0.9636 on April 22, 1891;
but on November 1 the market price was only $0.96, which would give
to the silver dollar a bullion value of 74 1/4 cents.

Before the influence of the prospective silver legislation was felt
in the market silver was worth in New York about $0.955 per ounce.
The ablest advocates of free coinage in the last Congress were most
confident in their predictions that the purchases by the Government
required by the law would at once bring the price of silver to
$1.2929 per ounce, which would make the bullion value of a dollar 100
cents and hold it there. The prophecies of the antisilver men of
disasters to result from the coinage of $2,000,000 per month were not
wider of the mark. The friends of free silver are not agreed, I think,
as to the causes that brought their hopeful predictions to naught.
Some facts are known. The exports of silver from London to India
during the first nine months of this calendar year fell off over 50
per cent, or $17,202,730, compared with the same months of the
preceding year. The exports of domestic silver bullion from this
country, which had averaged for the last ten years over $17,000,000,
fell in the last fiscal year to $13,797,391, while for the first time
in recent years the imports of silver into this country exceeded the
exports by the sum of $2,745,365. In the previous year the net
exports of silver from the United States amounted to $8,545,455. The
production of the United States increased from 50,000,000 ounces in
1889 to 54,500,000 in 1890. The Government is now buying and putting
aside annually 54,000,000 ounces, which, allowing for 7,140,000
ounces of new bullion used in the arts, is 6,640,000 more than our
domestic products available for coinage.

I hope the depression in the price of silver is temporary and that a
further trial of this legislation will more favorably affect it. That
the increased volume of currency thus supplied for the use of the
people was needed and that beneficial results upon trade and prices
have followed this legislation I think must be very clear to
everyone. Nor should it be forgotten that for every dollar of these
notes issued a full dollar's worth of silver bullion is at the time
deposited in the Treasury as a security for its redemption. Upon this
subject, as upon the tariff, my recommendation is that the existing
laws be given a full trial and that our business interests be spared
the distressing influence which threats of radical changes always
impart. Under existing legislation it is in the power of the Treasury
Department to maintain that essential condition of national finance as
well as of commercial prosperity--the parity in use of the coined
dollars and their paper representatives. The assurance that these
powers would be freely and unhesitatingly used has done much to
produce and sustain the present favorable business conditions.

I am still of the opinion that the free coinage of silver under
existing conditions would disastrously affect our business interests
at home and abroad. We could not hope to maintain an equality in the
purchasing power of the gold and silver dollar in our own markets,
and in foreign trade the stamp gives no added value to the bullion
contained in coins. The producers of the country, its farmers and
laborers, have the highest interest that every dollar, paper or coin,
issued by the Government shall be as good as any other. If there is
one less valuable than another, its sure and constant errand will be
to pay them for their toil and for their crops. The money lender will
protect himself by stipulating for payment in gold, but the laborer
has never been able to do that. To place business upon a silver basis
would mean a sudden and severe contraction of the currency by the
withdrawal of gold and gold notes and such an unsettling of all
values as would produce a commercial panic. I can not believe that a
people so strong and prosperous as ours will promote such a policy.

The producers of silver are entitled to just consideration, but they
should not forget that the Government is now buying and putting out
of the market what is the equivalent of the entire product of our
silver mines. This is more than they themselves thought of asking two
years ago. I believe it is the earnest desire of a great majority of
the people, as it is mine, that a full coin use shall be made of
silver just as soon as the cooperation of other nations can be
secured and a ratio fixed that will give circulation equally to gold
and silver. The business of the world requires the use of both
metals; but I do not see any prospect of gain, but much of loss, by
giving up the present system, in which a full use is made of gold and
a large use of silver, for one in which silver alone will circulate.
Such an event would be at once fatal to the further progress of the
silver movement. Bimetallism is the desired end, and the true friends
of silver will be careful not to overrun the goal and bring in silver
monometallism with its necessary attendants--the loss of our gold to
Europe and the relief of the pressure there for a larger currency. I
have endeavored by the use of official and unofficial agencies to
keep a close observation of the state of public sentiment in Europe
upon this question and have not found it to be such as to justify me
in proposing an international conference. There is, however, I am
sure, a growing sentiment in Europe in favor of a larger use of
silver, and I know of no more effectual way of promoting this
sentiment than by accumulating gold here. A scarcity of gold in the
European reserves will be the most persuasive argument for the use of
silver.

The exports of gold to Europe, which began in February last and
continued until the close of July, aggregated over $70,000,000. The
net loss of gold during the fiscal year was nearly $68,000,000. That
no serious monetary disturbance resulted was most gratifying and gave
to Europe fresh evidence of the strength and stability of our
financial institutions. With the movement of crops the outflow of
gold was speedily stopped and a return set in. Up to December 1 we
had recovered of our gold lost at the port of New York $27,854,000,
and it is confidently believed that during the winter and spring this
aggregate will be steadily and largely increased.

The presence of a large cash surplus in the Treasury has for many
years been the subject of much unfavorable criticism, and has
furnished an argument to those who have desired to place the tariff
upon a purely revenue basis. It was agreed by all that the withdrawal
from circulation of so large an amount of money was an embarrassment
to the business of the country and made necessary the intervention of
the Department at frequent intervals to relieve threatened monetary
panics. The surplus on March 1, 1889, was $183,827,190.29. The policy
of applying this surplus to the redemption of the interest-bearing
securities of the United States was thought to be preferable to that
of depositing it without interest in selected national banks. There
have been redeemed since the date last mentioned of interest-bearing
securities $259,079,350, resulting in a reduction of the annual
interest charge of $11,684,675. The money which had been deposited in
banks without interest has been gradually withdrawn and used in the
redemption of bonds.

The result of this policy, of the silver legislation, and of the
refunding of the 4 1/2 per cent bonds has been a large increase of
the money in circulation. At the date last named the circulation was
$1,404,205,896, or $23.03 per capita, while on the 1st day of
December, 1891, it had increased to $1,577,262,070, or $24.38 per
capita. The offer of the Secretary of the Treasury to the holders of
the 4 1/2 per cent bonds to extend the time of redemption, at the
option of the Government, at an interest of 2 per cent, was accepted
by the holders of about one-half the amount, and the unextended bonds
are being redeemed on presentation.

The report of the Secretary of War exhibits the results of an
intelligent, progressive, and businesslike administration of a
Department which has been too much regarded as one of mere routine.
The separation of Secretary Proctor from the Department by reason of
his appointment as a Senator from the State of Vermont is a source of
great regret to me and to his colleagues in the Cabinet, as I am sure
it will be to all those who have had business with the Department
while under his charge.

In the administration of army affairs some especially good work has
been accomplished. The efforts of the Secretary to reduce the
percentage of desertions by removing the causes that promoted it have
been so successful as to enable him to report for the last year a
lower percentage of desertion than has been before reached in the
history of the Army. The resulting money saving is considerable, but
the improvement in the morale of the enlisted men is the most
valuable incident of the reforms which have brought about this
result.

The work of securing sites for shore batteries for harbor defense and
the manufacture of mortars and guns of high power to equip them have
made good progress during the year. The preliminary work of tests and
plans which so long delayed a start is now out of the way. Some guns
have been completed, and with an enlarged shop and a more complete
equipment at Watervliet the Army will soon be abreast of the Navy in
gun construction. Whatever unavoidable causes of delay may arise,
there should be none from delayed or insufficient appropriations. We
shall be greatly embarrassed in the proper distribution and use of
naval vessels until adequate shore defenses are provided for our
harbors.

I concur in the recommendation of the Secretary that the
three-battalion organization be adopted for the infantry. The
adoption of a smokeless powder and of a modern rifle equal in range,
precision, and rapidity of fire to the best now in use will, I hope,
not be longer delayed.

The project of enlisting Indians and organizing them into separate
companies upon the same basis as other soldiers was made the subject
of very careful study by the Secretary and received my approval.
Seven companies have been completely organized and seven more are in
process of organization. The results of six months' training have
more than realized the highest anticipations. The men are readily
brought under discipline, acquire the drill with facility, and show
great pride in the right discharge of their duty and perfect loyalty
to their officers, who declare that they would take them into action
with confidence. The discipline, order, and cleanliness of the
military posts will have a wholesome and elevating influence upon the
men enlisted, and through them upon their tribes, while a friendly
feeling for the whites and a greater respect for the Government will
certainly be promoted.

The great work done in the Record and Pension Division of the War
Department by Major Ainsworth, of the Medical Corps, and the clerks
under him is entitled to honorable mention. Taking up the work with
nearly 41,000 cases behind, he closed the last fiscal year without a
single case left over, though the new cases had increased 52 per cent
in number over the previous year by reason of the pension legislation
of the last Congress.

I concur in the recommendation of the Attorney-General that the right
in felony cases to a review by the Supreme court be limited. It would
seem that personal liberty would have a safe guaranty if the right of
review in cases involving only fine and imprisonment were limited to
the circuit court of appeals, unless a constitutional question should
in some way be involved.

The judges of the Court of Private Land Claims, provided for by the
act of March 3, 1891, have been appointed and the court organized. It
is now possible to give early relief to communities long repressed in
their development by unsettled land titles and to establish the
possession and right of settlers whose lands have been rendered
valueless by adverse and unfounded claims.

The act of July 9, 1888, provided for the incorporation and
management of a reform school for girls in the District of Columbia;
but it has remained inoperative for the reason that no appropriation
has been made for construction or maintenance. The need of such an
institution is very urgent. Many girls could be saved from depraved
lives by the wholesome influences and restraints of such a school. I
recommend that the necessary appropriation be made for a site and for
construction.

The enforcement by the Treasury Department of the law prohibiting the
coming of Chinese to the United States has been effective as to such
as seek to land from vessels entering our ports. The result has been
to divert the travel to vessels entering the ports of British
Columbia, whence passage into the United States at obscure points
along the Dominion boundary is easy. A very considerable number of
Chinese laborers have during the past year entered the United States
from Canada and Mexico.

The officers of the Treasury Department and of the Department of
Justice have used every means at their command to intercept this
immigration; but the impossibility of perfectly guarding our extended
frontier is apparent. The Dominion government collects a head tax of
$50 from every Chinaman entering Canada, and thus derives a
considerable revenue from those who only use its ports to reach a
position of advantage to evade our exclusion laws. There seems to be
satisfactory evidence that the business of passing Chinamen through
Canada to the United States is organized and quite active. The
Department of Justice has construed the laws to require the return of
any Chinaman found to be unlawfully in this country to China as the
country from which he came, notwithstanding the fact that he came by
way of Canada; but several of the district courts have in cases
brought before them overruled this view of the law and decided that
such persons must be returned to Canada. This construction robs the
law of all effectiveness, even if the decrees could be executed, for
the men returned can the next day recross our border. But the only
appropriation made is for sending them back to China, and the
Canadian officials refuse to allow them to reenter Canada without the
payment of the fifty-dollar head tax. I recommend such legislation as
will remedy these defects in the law.

In previous messages I have called the attention of Congress to the
necessity of so extending the jurisdiction of the United States
courts as to make triable therein any felony committed while in the
act of violating a law of the United States. These courts can not
have that independence and effectiveness which the Constitution
contemplates so long as the felonious killing of court officers,
jurors, and witnesses in the discharge of their duties or by reason
of their acts as such is only cognizable in the State courts. The
work done by the Attorney-General and the officers of his Department,
even under the present inadequate legislation, has produced some
notable results in the interest of law and order.

The Attorney-General and also the Commissioners of the District of
Columbia call attention to the defectiveness and inadequacy of the
laws relating to crimes against chastity in the District of Columbia.
A stringent code upon this subject has been provided by Congress for
Utah, and it is a matter of surprise that the needs of this District
should have been so long overlooked.

In the report of the Postmaster-General some very gratifying results
are exhibited and many betterments of the service suggested. A
perusal of the report gives abundant evidence that the supervision
and direction of the postal system have been characterized by an
intelligent and conscientious desire to improve the service. The
revenues of the Department show an increase of over $5,000,000, with
a deficiency for the year 1892 of less than $4,000,000, while the
estimate for the year 1893 shows a surplus of receipts over
expenditures.

Ocean mail post-offices have been established upon the steamers of
the North German Lloyd and Hamburg lines, saving by the distribution
on shipboard from two to fourteen hours' time in the delivery of mail
at the port of entry and often much more than this in the delivery at
interior places. So thoroughly has this system, initiated by Germany
and the United States, evidenced its usefulness that it can not be
long before it is installed upon all the great ocean mail-carrying
steamships.

Eight thousand miles of new postal service has been established upon
railroads, the car distribution to substations in the great cities
has been increased about 12 per cent, while the percentage of errors
in distribution has during the past year been reduced over one-half.
An appropriation was given by the last Congress for the purpose of
making some experiments in free delivery in the smaller cities and
towns. The results of these experiments have been so satisfactory
that the Postmaster-General recommends, and I concur in the
recommendation, that the free-delivery system be at once extended to
towns of 5,000 population. His discussion of the inadequate
facilities extended under our present system to rural communities and
his suggestions with a view to give these communities a fuller
participation in the benefits of the postal service are worthy of
your careful consideration. It is not just that the farmer, who
receives his mail at a neighboring town, should not only be compelled
to send to the post-office for it, but to pay a considerable rent for
a box in which to place it or to wait his turn at a general-delivery
window, while the city resident has his mail brought to his door. It
is stated that over 54,000 neighborhoods are under the present system
receiving mail at post-offices where money orders and postal notes are
not issued. The extension of this system to these communities is
especially desirable, as the patrons of such offices are not
possessed of the other facilities offered in more populous
communities for the transmission of small sums of money.

I have in a message to the preceding Congress expressed my views as
to a modified use of the telegraph in connection with the postal
service. In pursuance of the ocean mail law of March 3, 1891, and
after a most careful study of the whole subject and frequent
conferences with ship-owners, boards of trade, and others,
advertisements were issued by the postmaster-General for 53 lines of
ocean mail service--10 to Great Britain and the Continent, 27 to
South America, 3 to China and Japan, 4 to Australia and the Pacific
islands, 7 to the West Indies, and 2 to Mexico. It was not, of
course, expected that bids for all these lines would be received or
that service upon them all would be contracted for. It was intended,
in furtherance of the act, to secure as many new lines as possible,
while including in the list most or all of the foreign lines now
occupied by American ships. It was hoped that a line to England and
perhaps one to the Continent would be secured; but the outlay
required to equip such lines wholly with new ships of the first class
and the difficulty of establishing new lines in competition with those
already established deterred bidders whose interest had been enlisted.
It is hoped that a way may yet be found of overcoming these
difficulties.

The Brazil Steamship Company, by reason of a miscalculation as to the
speed of its vessels, was not able to bid under the terms of the
advertisement. The policy of the Department was to secure from the
established lines an improved service as a condition of giving to
them the benefits of the law. This in all instances has been
attained. The Postmaster-General estimates that an expenditure in
American shipyards of about $10,000,000 will be necessary to enable
the bidders to construct the ships called for by the service which
they have accepted. I do not think there is any reason for
discouragement or for any turning back from the policy of this
legislation. Indeed, a good beginning has been made, and as the
subject is further considered and understood by capitalists and
shipping people new lines will be ready to meet future proposals, and
we may date from the passage of this law the revival of American
shipping interests and the recovery of a fair share of the carrying
trade of the world. We were receiving for foreign postage nearly
$2,000,000 under the old system, and the outlay for ocean mail
service did not exceed $600,000 per annum. It is estimated by the
Postmaster-General that if all the contracts proposed are completed
it will require $247,354 for this year in addition to the
appropriation for sea and inland postage already in the estimates,
and that for the next fiscal year, ending June 30, 1893, there would
probably be needed about $560,000.

The report of the Secretary of the Navy shows a gratifying increase
of new naval vessels in commission. The Newark, Concord, Bennington,
and Miantonomoh have been added during the year, with an aggregate of
something more than 11,000 tons. Twenty-four warships of all classes
are now under construction in the navy-yards and private shops; but
while the work upon them is going forward satisfactorily, the
completion of the more important vessels will yet require about a
year's time. Some of the vessels now under construction, it is
believed, will be triumphs of naval engineering. When it is
recollected that the work of building a modern navy was only
initiated in the year 1883, that our naval constructors and
shipbuilders were practically without experience in the construction
of large iron or steel ships, that our engine shops were unfamiliar
with great marine engines, and that the manufacture of steel forgings
for guns and plates was almost wholly a foreign industry, the progress
that has been made is not only highly satisfactory, but furnishes the
assurance that the United States will before long attain in the
construction of such vessels, with their engines and armaments, the
same preeminence which it attained when the best instrument of ocean
commerce was the clipper ship and the most impressive exhibit of
naval power the old wooden three-decker man-of-war. The officers of
the Navy and the proprietors and engineers of our great private shops
have responded with wonderful intelligence and professional zeal to
the confidence expressed by Congress in its liberal legislation. We
have now at Washington a gun shop, organized and conducted by naval
officers, that in its system, economy, and product is unexcelled.
Experiments with armor plate have been conducted during the year with
most important results. It is now believed that a plate of higher
resisting power than any in use has been found and that the tests
have demonstrated that cheaper methods of manufacture than those
heretofore thought necessary can be used.

I commend to your favorable consideration the recommendations of the
Secretary, who has, I am sure, given to them the most conscientious
study. There should be no hesitation in promptly completing a navy of
the best modern type large enough to enable this country to display
its flag in all seas for the protection of its citizens and of its
extending commerce. The world needs no assurance of the peaceful
purposes of the United States, but we shall probably be in the future
more largely a competitor in the commerce of the world, and it is
essential to the dignity of this nation and to that peaceful
influence which it should exercise on this hemisphere that its Navy
should be adequate both upon the shores of the Atlantic and of the
Pacific.

The report of the Secretary of the Interior shows that a very
gratifying progress has been made in all of the bureaus which make up
that complex and difficult Department.

The work in the Bureau of Indian Affairs was perhaps never so large
as now, by reason of the numerous negotiations which have been
proceeding with the tribes for a reduction of the reservations, with
the incident labor of making allotments, and was never more carefully
conducted. The provision of adequate school facilities for Indian
children and the locating of adult Indians upon farms involve the
solution of the "Indian question." Everything else--rations,
annuities, and tribal negotiations, with the agents, inspectors, and
commissioners who distribute and conduct them--must pass away when
the Indian has become a citizen, secure in the individual ownership
of a farm from which he derives his subsistence by his own labor,
protected by and subordinate to the laws which govern the white man,
and provided by the General Government or by the local communities in
which he lives with the means of educating his children. When an
Indian becomes a citizen in an organized State or Territory, his
relation to the General Government ceases in great measure to be that
of a ward; but the General Government ought not at once to put upon
the State or Territory the burden of the education of his children.

It has been my thought that the Government schools and school
buildings upon the reservations would be absorbed by the school
systems of the States and Territories; but as it has been found
necessary to protect the Indian against the compulsory alienation of
his land by exempting him from taxation for a period of twenty-five
years, it would seem to be right that the General Government,
certainly where there are tribal funds in its possession, should pay
to the school fund of the State what would be equivalent to the local
school tax upon the property of the Indian. It will be noticed from
the report of the Commissioner of Indian Affairs that already some
contracts have been made with district schools for the education of
Ind