Speech Transcript:

 To the Senate and House of Representatives:

In submitting my annual message to Congress I have great satisfaction
in being able to say that the general conditions affecting the
commercial and industrial interests of the United States are in the
highest degree favorable. A comparison of the existing conditions
with those of the most favored period in the history of the country
will, I believe, show that so high a degree of prosperity and so
general a diffusion of the comforts of life were never before enjoyed
by our people.

The total wealth of the country in 1860 was $16,159,616,068. In 1890
it amounted to $62,610,000,000, an increase of 287 per cent.

The total mileage of railways in the United States in 1860 was
30,626. In 1890 it was 167,741, an increase of 448 per cent; and it
is estimated that there will be about 4,000 miles of track added by
the close of the year 1892.

The official returns of the Eleventh Census and those of the Tenth
Census for seventy-five leading cities furnish the basis for the
following comparisons:

In 1880 the capital invested in manufacturing was $1,232,839,670.

In 1890 the capital invested in manufacturing was $2,900,735,884.

In 1880 the number of employees was 1,301,388.

In 1890 the number of employees was 2,251,134.

In 1880 the wages earned were $501,965,778.

In 1890 the wages earned were $1,221,170,454.

In 1880 the value of the product was $2,711,579,899.

In 1890 the value of the product was $4,860,286,837.

I am informed by the Superintendent of the Census that the omission
of certain industries in 1880 which were included in 1890 accounts in
part for the remarkable increase thus shown, but after making full
allowance for differences of method and deducting the returns for all
industries not included in the census of 1880 there remain in the
reports from these seventy-five cities an increase in the capital
employed of $1,522,745,604, in the value of the product of
$2,024,236,166, in wages earned of $677,943,929, and in the number of
wage earners employed of 856,029. The wage earnings not only show an
increased aggregate, but an increase per capita from $386 in 1880 to
$547 in 1890, or 41.71 per cent.

The new industrial plants established since October 6, 1890, and up
to October 22, 1892, as partially reported in the American Economist,
number 345, and the extension of existing plants 108; the new capital
invested amounts to $40,449,050, and the number of additional
employees to 37,285.

The Textile World for July, 1892, states that during the first six
months of the present calendar year 135 new factories were built, of
which 40 are cotton mills, 48 knitting mills, 26 woolen mills, 15
silk mills, 4 plush mills, and 2 linen mills. Of the 40 cotton mills
21 have been built in the Southern States. Mr. A. B. Shepperson, of
the New York Cotton Exchange, estimates the number of working
spindles in the United States on September 1, 1892, at 15,200,000, an
increase of 660,000 over the year 1891. The consumption of cotton by
American mills in 1891 was 2,396,000 bales, and in 1892 2,584,000
bales, an increase of 188,000 bales. From the year 1869 to 1892,
inclusive, there has been an increase in the consumption of cotton in
Europe of 92 per cent, while during the same period the increased
consumption in the United States has been about 150 per cent.

The report of Ira Ayer, special agent of the Treasury Department,
shows that at the date of September 30, 1892, there were 32 companies
manufacturing tin and terne plate in the United States and 14
companies building new works for such manufacture. The estimated
investment in buildings and plants at the close of the fiscal year
June 30, 1893, if existing conditions were to be continued, was
$5,000,000 and the estimated rate of production 200,000,000 pounds
per annum. The actual production for the quarter ending September 30,
1892, was 10,952,725 pounds.

The report of Labor Commissioner Peck, of New York, shows that during
the year 1891, in about 6,000 manufacturing establishments in that
State embraced within the special inquiry made by him, and
representing 67 different industries, there was a net increase over
the year 1890 of $30,315,130.68 in the value of the product and of
$6,377,925.09 in the amount of wages paid. The report of the
commissioner of labor for the State of Massachusetts shows that 3,745
industries in that State paid $129,416,248 in wages during the year
1891, against $126,030,303 in 1890, an increase of $3,335,945, and
that there was an increase of $9,932,490 in the amount of capital and
of 7,346 in the number of persons employed in the same period.

During the last six months of the year 1891 and the first six months
of 1892 the total production of pig iron was 9,710,819 tons, as
against 9,202,703 tons in the year 1890, which was the largest annual
production ever attained. For the same twelve months of 1891-92 the
production of Bessemer ingots was 3,878,581 tons, an increase of
189,710 gross tons over the previously unprecedented yearly
production of 3,688,871 gross tons in 1890. The production of
Bessemer steel rails for the first six months of 1892 was 772,436
gross tons, as against 702,080 gross tons during the last six months
of the year 1891.

The total value of our foreign trade (exports and imports of
merchandise) during the last fiscal year was $1,857,680,610, an
increase of $128,283,604 over the previous fiscal year. The average
annual value of our imports and exports of merchandise for the ten
fiscal years prior to 1891 was $1,457,322,019. It will be observed
that our foreign trade for 1892 exceeded this annual average value by
$400,358,591, an increase of 27.47 per cent. The significance and
value of this increase are shown by the fact that the excess in the
trade of 1892 over 1891 was wholly in the value of exports, for there
was a decrease in the value of imports of $17,513,754.

The value of our exports during the fiscal year 1892 reached the
highest figure in the history of the Government, amounting to
$1,030,278,148, exceeding by $145,797,338 the exports of 1891 and
exceeding the value of the imports by $202,875,686. A comparison of
the value of our exports for 1892 with the annual average for the ten
years prior to 1891 shows an excess of $265,142,651, or of 34.65 per
cent. The value of our imports of merchandise for 1892, which was
$829,402,462, also exceeded the annual average value of the ten years
prior to 1891 by $135,215,940. During the fiscal year 1892 the value
of imports free of duty amounted to $457,999,658, the largest
aggregate in the history of our commerce. The value of the imports of
merchandise entered free of duty in 1892 was 55.35 per cent of the
total value of imports, as compared with 43.35 per cent in 1891 and
33.66 per cent in 1890.

In our coastwise trade a most encouraging development is in progress,
there having been in the last four years an increase of 16 per cent.
In internal commerce the statistics show that no such period of
prosperity has ever before existed. The freight carried in the
coastwise trade of the Great Lakes in 1890 aggregated 28,295,959
tons. On the Mississippi, Missouri, and Ohio rivers and tributaries
in the same year the traffic aggregated 29,405,046 tons, and the
total vessel tonnage passing through the Detroit River during that
year was 21,684,000 tons. The vessel tonnage entered and cleared in
the foreign trade of London during 1890 amounted to 13,480,767 tons,
and of Liverpool 10,941,800 tons, a total for these two great
shipping ports of 24,422,568 tons, only slightly in excess of the
vessel tonnage passing through the Detroit River. And it should be
said that the season for the Detroit River was but 228 days, while of
course in London and Liverpool the season was for the entire year. The
vessel tonnage passing through the St. Marys Canal for the fiscal year
1892 amounted to 9,828,874 tons, and the freight tonnage of the
Detroit River is estimated for that year at 25,000,000 tons, against
23,209,619 tons in 1891. The aggregate traffic on our railroads for
the year 1891 amounted to 704,398,609 tons of freight, compared with
691,344,437 tons in 1890, an increase of 13,054,172 tons.

Another indication of the general prosperity of the country is found
in the fact that the number of depositors in savings banks increased
from 693,870 in 1860 to 4,258,893 in 1890, an increase of 513 per
cent, and the amount of deposits from $149,277,504 in 1860 to
$1,524,844,506 in 1890, an increase of 921 per cent. In 1891 the
amount of deposits in savings banks was $1,623,079,749. It is
estimated that 90 per cent of these deposits represent the savings of
wage earners. The bank clearances for nine months ending September 30,
1891, amounted to $41,049,390,08. For the same months in 1892 they
amounted to $45,189,601,947, an excess for the nine months of
$4,140,211,139.

There never has been a time in our history when work was so abundant
or when wages were as high, whether measured by the currency in which
they are paid or by their power to supply the necessaries and comforts
of life. It is true that the market prices of cotton and wheat have
been low. It is one of the unfavorable incidents of agriculture that
the farmer can not produce upon orders. He must sow and reap in
ignorance of the aggregate production of the year, and is peculiarly
subject to the depreciation which follows overproduction. But while
the fact I have stated is true as to the crops mentioned, the general
average of prices has been such as to give to agriculture a fair
participation in the general prosperity. The value of our total farm
products has increased from $1,363,646,866 in 1860 to $4,500,000,000
in 1891, as estimated by statisticians, an increase of 230 per cent.
The number of hogs January 1, 1891, was 50,625,106 and their value
$210,193,925; on January 1, 1892, the number was 52,398,019 and the
value $241,031,415. On January 1, 1891, the number of cattle was
36,875,648 and the value $544,127,908; on January 1 ,1892, the number
was 37,651,239 and the value $570,749,155.

If any are discontented with their state here, if any believe that
wages or prices, the returns for honest toil, are inadequate, they
should not fail to remember that there is no other country in the
world where the conditions that seem to them hard would not be
accepted as highly prosperous. The English agriculturist would be
glad to exchange the returns of his labor for those of the American
farmer and the Manchester workmen their wages for those of their
fellows at Fall River.

I believe that the protective system, which has now for something
more than thirty years continuously prevailed in our legislation, has
been a mighty instrument for the development of our national wealth
and a most powerful agency in protecting the homes of our workingmen
from the invasion of want. I have felt a most solicitous interest to
preserve to our working people rates of wages that would not only
give daily bread but supply a comfortable margin for those home
attractions and family comforts and enjoyments without which life is
neither hopeful nor sweet. They are American citizens--a part of the
great people for whom our Constitution and Government were framed and
instituted--and it can not be a perversion of that Constitution to so
legislate as to preserve in their homes the comfort, independence,
loyalty, and sense of interest in the Government which are essential
to good citizenship in peace, and which will bring this stalwart
throng, as in 1861, to the defense of the flag when it is assailed.

It is not my purpose to renew here the argument in favor of a
protective tariff. The result of the recent election must be accepted
as having introduced a new policy. We must assume that the present
tariff, constructed upon the lines of protection, is to be repealed
and that there is to be substituted for it a tariff law constructed
solely with reference to revenue; that no duty is to be higher
because the increase will keep open an American mill or keep up the
wages of an American workman, but that in every case such a rate of
duty is to be imposed as will bring to the Treasury of the United
States the largest returns of revenue. The contention has not been
between schedules, but between principles, and it would be offensive
to suggest that the prevailing party will not carry into legislation
the principles advocated by it and the pledges given to the people.
The tariff bills passed by the House of Representatives at the last
session were, as I suppose, even in the opinion of their promoters,
inadequate, and justified only by the fact that the Senate and House
of Representatives were not in accord and that a general revision
could not therefore be undertaken.

I recommend that the whole subject of tariff revision be left to the
incoming Congress. It is matter of regret that this work must be
delayed for at least three months, for the threat of great tariff
changes introduces so much uncertainty that an amount, not easily
estimated, of business inaction and of diminished production will
necessarily result. It is possible also that this uncertainty may
result in decreased revenues from customs duties, for our merchants
will make cautious orders for foreign goods in view of the prospect
of tariff reductions and the uncertainty as to when they will take
effect. Those who have advocated a protective tariff can well afford
to have their disastrous forecasts of a change of policy
disappointed. If a system of customs duties can be framed that will
set the idle wheels and looms of Europe in motion and crowd our
warehouses with foreign-made goods and at the same time keep our own
mills busy; that will give us an increased participation in the
"markets of the world" of greater value than the home market we
surrender; that will give increased work to foreign workmen upon
products to be consumed by our people without diminishing the amount
of work to be done here; that will enable the American manufacturer
to pay to his workmen from 50 to 100 per cent more in wages than is
paid in the foreign mill, and yet to compete in our market and in
foreign markets with the foreign producer; that will further reduce
the cost of articles of wear and food without reducing the wages of
those who produce them; that can be celebrated, after its effects
have been realized, as its expectation has been in European as well
as in American cities, the authors and promoters of it will be
entitled to the highest praise. We have had in our history several
experiences of the contrasted effects of a revenue and of a
protective tariff, but this generation has not felt them, and the
experience of one generation is not highly instructive to the next.
The friends of the protective system with undiminished confidence in
the principles they have advocated will await the results of the new
experiment.

The strained and too often disturbed relations existing between the
employees and the employers in our great manufacturing establishments
have not been favorable to a calm consideration by the wage earner of
the effect upon wages of the protective system. The facts that his
wages were the highest paid in like callings in the world and that a
maintenance of this rate of wages in the absence of protective duties
upon the product of his labor was impossible were obscured by the
passion evoked by these contests. He may now be able to review the
question in the light of his personal experience under the operation
of a tariff for revenue only. If that experience shall demonstrate
that present rates of wages are thereby maintained or increased,
either absolutely or in their purchasing power, and that the
aggregate volume of work to be done in this country is increased or
even maintained, so that there are more or as many days' work in a
year, at as good or better wages, for the American workmen as has
been the case under the protective system, everyone will rejoice. A
general process of wage reduction can not be contemplated by any
patriotic citizen without the gravest apprehension. It may be, indeed
I believe is, possible for the American manufacturer to compete
successfully with his foreign rival in many branches of production
without the defense of protective duties if the pay rolls are
equalized; but the conflict that stands between the producer and that
result and the distress of our working people when it is attained are
not pleasant to contemplate. The Society of the Unemployed, now
holding its frequent and threatening parades in the streets of
foreign cities, should not be allowed to acquire an American
domicile.

The reports of the heads of the several Executive Departments, which
are herewith submitted, have very naturally included a resume of the
whole work of the Administration with the transactions of the last
fiscal year. The attention not only of Congress but of the country is
again invited to the methods of administration which have been pursued
and to the results which have been attained. Public revenues amounting
to $1,414,079,292.28 have been collected and disbursed without loss
from misappropriation, without a single defalcation of such
importance as to attract the public attention, and at a diminished
per cent of cost for collection. The public business has been
transacted not only with fidelity, but progressively and with a view
to giving to the people in the fullest possible degree the benefits
of a service established and maintained for their protection and
comfort.

Our relations with other nations are now undisturbed by any serious
controversy. The complicated and threatening differences with Germany
and England relating to Samoan affairs, with England in relation to
the seal fisheries in the Bering Sea, and with Chile growing out of
the Baltimore affair have been adjusted.

There have been negotiated and concluded, under section 3 of the
tariff law, commercial agreements relating to reciprocal trade with
the following countries: Brazil, Dominican Republic, Spain for Cuba
and Puerto Rico, Guatemala, Salvador, the German Empire, Great
Britain for certain West Indian colonies and British Guiana,
Nicaragua, Honduras, and Austria-Hungary.

Of these, those with Guatemala, Salvador, the German Empire, Great
Britain, Nicaragua, Honduras, and Austria-Hungary have been concluded
since my last annual message. Under these trade arrangements a free or
favored admission has been secured in every case for an important list
of American products. Especial care has been taken to secure markets
for farm products, in order to relieve that great underlying industry
of the depression which the lack of an adequate foreign market for our
surplus often brings. An opening has also been made for manufactured
products that will undoubtedly, if this policy is maintained, greatly
augment our export trade. The full benefits of these arrangements can
not be realized instantly. New lines of trade are to be opened. The
commercial traveler must survey the field. The manufacturer must
adapt his goods to the new markets and facilities for exchange must
be established. This work has been well begun, our merchants and
manufacturers having entered the new fields with courage and
enterprise. In the case of food products, and especially with Cuba,
the trade did not need to wait, and the immediate results have been
most gratifying. If this policy and these trade arrangements can be
continued in force and aided by the establishment of American
steamship lines, I do not doubt that we shall within a short period
secure fully one-third of the total trade of the countries of Central
and South America, which now amounts to about $600,000,000 annually.
In 1885 we had only 8 per cent of this trade.

The following statistics show the increase in our trade with the
countries with which we have reciprocal trade agreements from the
date when such agreements went into effect up to September 30, 1892,
the increase being in some almost wholly and in others in an
important degree the result of these agreements:

The domestic exports to Germany and Austria-Hungary have increased in
value from $47,673,756 to $57,993,064, an increase of $10,319,308, or
21.63 per cent. With American countries the value of our exports has
increased from $44,160,285 to $54,613,598, an increase of
$10,453,313, or 23.67 per cent. The total increase in the value of
exports to all the countries with which we have reciprocity
agreements has been $20,772,621. This increase is chiefly in wheat,
flour, meat, and dairy products and in manufactures of iron and steel
and lumber. There has been a large increase in the value of imports
from all these countries since the commercial agreements went into
effect, amounting to $74,294,525, but it has been entirely in imports
from the American countries, consisting mostly of sugar, coffee, india
rubber, and crude drugs. The alarmed attention of our European
competitors for the South American market has been attracted to this
new American policy and to our acquisition and their loss of South
American trade.

A treaty providing for the arbitration of the dispute between Great
Britain and the United States as to the killing of seals in the
Bering Sea was concluded on the 29th of February last. This treaty
was accompanied by an agreement prohibiting pelagic sealing pending
the arbitration, and a vigorous effort was made during this season to
drive out all poaching sealers from the Bering Sea. Six naval vessels,
three revenue cutters, and one vessel from the Fish Commission, all
under the command of Commander Evans, of the Navy, were sent into the
sea, which was systematically patrolled. Some seizures were made, and
it is believed that the catch in the Bering Sea by poachers amounted
to less than 500 seals. It is true, however, that in the North
Pacific, while the seal herds were on their way to the passes between
the Aleutian Islands, a very large number, probably 35,000, were
taken. The existing statutes of the United States do not restrain our
citizens from taking seals in the Pacific Ocean, and perhaps should
not unless the prohibition can be extended to the citizens of other
nations. I recommend that power be given to the President by
proclamation to prohibit the taking of seals in the North Pacific by
American vessels in case, either as the result of the findings of the
Tribunal of Arbitration or otherwise, the restraints can be applied to
the vessels of all countries. The case of the United States for the
Tribunal of Arbitration has been prepared with great care and
industry by the Hon. John W. Foster, and the counsel who represent
this Government express confidence that a result substantially
establishing our claims and preserving this great industry for the
benefit of all nations will be attained.

During the past year a suggestion was received through the British
minister that the Canadian government would like to confer as to the
possibility of enlarging upon terms of mutual advantage the
commercial exchanges of Canada and of the United States, and a
conference was held at Washington, with Mr. Blaine acting for this
Government and the British minister at this capital and three members
of the Dominion cabinet acting as commissioners on the part of Great
Britain. The conference developed the fact that the Canadian
government was only prepared to offer to the United States in
exchange for the concessions asked the admission of natural products.
The statement was frankly made that favored rates could not be given
to the United States as against the mother country. This admission,
which was foreseen, necessarily terminated the conference upon this
question. The benefits of an exchange of natural products would be
almost wholly with the people of Canada. Some other topics of
interest were considered in the conference, and have resulted in the
making of a convention for examining the Alaskan boundary and the
waters of Passamaquoddy Bay adjacent to Eastport, Me., and in the
initiation of an arrangement for the protection of fish life in the
coterminous and neighboring waters of our northern border.

The controversy as to tolls upon the Welland Canal, which was
presented to Congress at the last session by special message, having
failed of adjustment, I felt constrained to exercise the authority
conferred by the act of July 26, 1892, and to proclaim a suspension
of the free use of St. Marys Falls Canal to cargoes in transit to
ports in Canada. The Secretary of the Treasury established such tolls
as were thought to be equivalent to the exactions unjustly levied upon
our commerce in the Canadian canals.

If, as we must suppose, the political relations of Canada and the
disposition of the Canadian government are to remain unchanged, a
somewhat radical revision of our trade relations should, I think, be
made. Our relations must continue to be intimate, and they should be
friendly. I regret to say, however, that in many of the
controversies, notably those as to the fisheries on the Atlantic, the
sealing interests on the Pacific, and the canal tolls, our
negotiations with Great Britain have continuously been thwarted or
retarded by unreasonable and unfriendly objections and protests from
Canada in the matter of the canal tolls our treaty rights were
flagrantly disregarded. It is hardly too much to say that the
Canadian Pacific and other railway lines which parallel our northern
boundary are sustained by commerce having either its origin or
terminus, or both, in the United States. Canadian railroads compete
with those of the United States for our traffic, and without the
restraints of our interstate-commerce act. Their cars pass almost
without detention into and out of our territory.

The Canadian Pacific Railway brought into the United States from
China and Japan via British Columbia during the year ended June 30,
1892, 23,239,689 pounds of freight, and it carried from the United
States, to be shipped to China and Japan via British Columbia,
24,068,346 pounds of freight. There were also shipped from the United
States over this road from Eastern ports of the United States to our
Pacific ports during the same year 13,912,073 pounds of freight, and
there were received over this road at the United States Eastern ports
from ports on the Pacific Coast 13,293,315 pounds of freight. Mr.
Joseph Nimmo, Jr., former chief of the Bureau of Statistics, when
before the Senate Select Committee on Relations with Canada, April
26, 1890, said that "the value of goods thus transported between
different points in the United States across Canadian territory
probably amounts to $100,000,000 a year."

There is no disposition on the part of the people or Government of
the United States to interfere in the smallest degree with the
political relations of Canada. That question is wholly with her own
people. It is time for us, however, to consider whether, if the
present state of things and trend of things is to continue, our
interchanges upon lines of land transportation should not be put upon
a different basis and our entire independence of Canadian canals and
of the St. Lawrence as an outlet to the sea secured by the
construction of an American canal around the Falls of Niagara and the
opening of ship communication between the Great Lakes and one of our
own seaports. We should not hesitate to avail ourselves of our great
natural trade advantages. We should withdraw the support which is
given to the railroads and steamship lines of Canada by a traffic
that properly belongs to us and no longer furnish the earnings which
lighten the otherwise crushing weight of the enormous public
subsidies that have been given to them. The subject of the power of
the Treasury to deal with this matter without further legislation has
been under consideration, but circumstances have postponed a
conclusion. It is probable that a consideration of the propriety of a
modification or abrogation of the article of the treaty of Washington
relating to the transit of goods in bond is involved in any complete
solution of the question.

Congress at the last session was kept advised of the progress of the
serious and for a time threatening difference between the United
States and Chile. It gives me now great gratification to report that
the Chilean Government in a most friendly and honorable spirit has
tendered and paid as an indemnity to the families of the sailors of
the Baltimore who were killed and to those who were injured in the
outbreak in the city of Valparaiso the sum of $75,000. This has been
accepted not only as an indemnity for a wrong done, but as a most
gratifying evidence that the Government of Chile rightly appreciates
the disposition of this Government to act in a spirit of the most
absolute fairness and friendliness in our intercourse with that brave
people. A further and conclusive evidence of the mutual respect and
confidence now existing is furnished by the fact that a convention
submitting to arbitration the mutual claims of the citizens of the
respective Governments has been agreed upon. Some of these claims
have been pending for many years and have been the occasion of much
unsatisfactory diplomatic correspondence.

I have endeavored in every way to assure our sister Republics of
Central and South America that the United States Government and its
people have only the most friendly disposition toward them all. We do
not covet their territory. We have no disposition to be oppressive or
exacting in our dealings with any of them, even the weakest. Our
interests and our hopes for them all lie in the direction of stable
governments by their people and of the largest development of their
great commercial resources. The mutual benefits of enlarged
commercial exchanges and of a more familiar and friendly intercourse
between our peoples we do desire, and in this have sought their
friendly cooperation.

I have believed, however, while holding these sentiments in the
greatest sincerity, that we must insist upon a just responsibility
for any injuries inflicted upon our official representatives or upon
our citizens. This insistence, kindly and justly but firmly made,
will, I believe, promote peace and mutual respect.

Our relations with Hawaii have been such as to attract an increased
interest, and must continue to do so. I deem it of great importance
that the projected submarine cable, a survey for which has been made,
should be promoted. Both for naval and commercial uses we should have
quick communication with Honolulu. We should before this have availed
ourselves of the concession made many years ago to this Government for
a harbor and naval station at Pearl River. Many evidences of the
friendliness of the Hawaiian Government have been given in the past,
and it is gratifying to believe that the advantage and necessity of a
continuance of very close relations is appreciated.

The friendly act of this Government in expressing to the Government
of Italy its reprobation and abhorrence of the lynching of Italian
subjects in New Orleans by the payment of 125,000 francs, or
$24,330.90, was accepted by the King of Italy with every
manifestation of gracious appreciation, and the incident has been
highly promotive of mutual respect and good will.

In consequence of the action of the French Government in proclaiming
a protectorate over certain tribal districts of the west coast of
Africa eastward of the San Pedro River, which has long been regarded
as the southeastern boundary of Liberia, I have felt constrained to
make protest against this encroachment upon the territory of a
Republic which was rounded by citizens of the United States and
toward which this country has for many years held the intimate
relation of a friendly counselor.

The recent disturbances of the public peace by lawless foreign
marauders on the Mexican frontier have afforded this Government an
opportunity to testify its good will for Mexico and its earnest
purpose to fulfill the obligations of international friendship by
pursuing and dispersing the evil doers. The work of relocating the
boundary of the treaty of Guadalupe Hidalgo westward from El Paso is
progressing favorably.

Our intercourse with Spain continues on a friendly footing. I regret,
however, not to be able to report as yet the adjustment of the claims
of the American missionaries arising from the disorders at Ponape, in
the Caroline Islands, but I anticipate a satisfactory adjustment in
view of renewed and urgent representations to the Government at
Madrid.

The treatment of the religious and educational establishments of
American citizens in Turkey has of late called for a more than usual
share of attention. A tendency to curtail the toleration which has so
beneficially prevailed is discernible and has called forth the earnest
remonstrance of this Government. Harassing regulations in regard to
schools and churches have been attempted in certain localities, but
not without due protest and the assertion of the inherent and
conventional rights of our countrymen. Violations of domicile and
search of the persons and effects of citizens of the United States by
apparently irresponsible officials in the Asiatic vilayets have from
time to time been reported. An aggravated instance of injury to the
property of an American missionary at Bourdour, in the province of
Konia, called forth an urgent claim for reparation, which I am
pleased to say was promptly heeded by the Government of the Porte.
Interference with the trading ventures of our citizens in Asia Minor
is also reported, and the lack of consular representation in that
region is a serious drawback to instant and effective protection. I
can not believe that these incidents represent a settled policy, and
shall not cease to urge the adoption of proper remedies.

International copyright has been extended to Italy by proclamation in
conformity with the act of March 3, 1891, upon assurance being given
that Italian law permits to citizens of the United States the benefit
of copyright on substantially the same basis as to subjects of Italy.
By a special convention proclaimed January 15, 1892, reciprocal
provisions of copyright have been applied between the United States
and Germany. Negotiations are in progress with other countries to the
same end.

I repeat with great earnestness the recommendation which I have made
in several previous messages that prompt and adequate support be
given to the American company engaged in the construction of the
Nicaragua ship canal. It is impossible to overstate the value from
every standpoint of this great enterprise, and I hope that there may
be time, even in this Congress, to give to it an impetus that will
insure the early completion of the canal and secure to the United
States its proper relation to it when completed.

The Congress has been already advised that the invitations of this
Government for the assembling of an international monetary conference
to consider the question of an enlarged use of silver were accepted by
the nations to which they were addressed. The conference assembled at
Brussels on the 22d of November, and has entered upon the
consideration of this great question. I have not doubted, and have
taken occasion to express that belief as well in the invitations
issued for this conference as in my public messages, that the free
coinage of silver upon an agreed international ratio would greatly
promote the interests of our people and equally those of other
nations. It is too early to predict what results may be accomplished
by the conference. If any temporary check or delay intervenes, I
believe that very soon commercial conditions will compel the now
reluctant governments to unite with us in this movement to secure the
enlargement of the volume of coined money needed for the transaction
of the business of the world.

The report of the Secretary of the Treasury will attract especial
interest in view of the many misleading statements that have been
made as to the state of the public revenues. Three preliminary facts
should not only be stated but emphasized before looking into details:
First, that the public debt has been reduced since March 4, 1889,
$259,074,200, and the annual interest charge $11,684,469; second,
that there have been paid out for pensions during this Administration
up to November 1, 1892, $432,564,178.70, an excess of $114,466,386.09
over the sum expended during the period from March 1, 1885, to March
1, 1889; and, third, that under the existing tariff up to December 1
about $93,000,000 of revenue which would have been collected upon
imported sugars if the duty had been maintained has gone into the
pockets of the people, and not into the public Treasury, as before.
If there are any who still think that the surplus should have been
kept out of circulation by hoarding it in the Treasury, or deposited
in favored banks without interest while the Government continued to
pay to these very banks interest upon the bonds deposited as security
for the deposits, or who think that the extended pension legislation
was a public robbery, or that the duties upon sugar should have been
maintained, I am content to leave the argument where it now rests
while we wait to see whether these criticisms will take the form of
legislation.

The revenues for the fiscal year ending June 30, 1892, from all
sources were $425,868,260.22, and the expenditures for all purposes
were $415,953,806.56, leaving a balance of $9,914,453.66. There were
paid during the year upon the public debt $40,570,467.98. The surplus
in the Treasury and the bank redemption fund passed by the act of July
14, 1890, to the general fund furnished in large part the cash
available and used for the payments made upon the public debt.
Compared with the year 1891, our receipts from customs duties fell
off $42,069,241.08, while our receipts from internal revenue
increased $8,284,823.13, leaving the net loss of revenue from these
principal sources $33,784,417.95. The net loss of revenue from all
sources was $32,675,972.81.

The revenues, estimated and actual, for the fiscal year ending June
30, 1893, are placed by the Secretary at $463,336,350.44, and the
expenditures at $461,336,350.44, showing a surplus of receipts over
expenditures of $2,000,000. The cash balance in the Treasury at the
end of the fiscal year it is estimated will be $20,992,377.03. So far
as these figures are based upon estimates of receipts and expenditures
for the remaining months of the current fiscal year, there are not
only the usual elements of uncertainty, but some added elements. New
revenue legislation, or even the expectation of it, may seriously
reduce the public revenues during the period of uncertainty and
during the process of business adjustment to the new conditions when
they become known. But the Secretary has very wisely refrained from
guessing as to the effect of possible changes in our revenue laws,
since the scope of those changes and the time of their taking effect
can not in any degree be forecast or foretold by him. His estimates
must be based upon existing laws and upon a continuance of existing
business conditions, except so far as these conditions may be
affected by causes other than new legislation.

The estimated receipts for the fiscal year ending June 30, 1894, are
$490,121,365.38, and the estimated appropriations $457,261,335.33,
leaving an estimated surplus of receipts over expenditures of
$32,860,030.05. This does not include any payment to the sinking
fund. In the recommendation of the Secretary that the sinking-fund
law be repealed I concur. The redemption of bonds since the passage
of the law to June 30, 1892, has already exceeded the requirements by
the sum of $990,510,681.49. The retirement of bonds in the future
before maturity should be a matter of convenience, not of compulsion.
We should not collect revenue for that purpose, but only use any
casual surplus. To the balance of $32,860,030.05 of receipts over
expenditures for the year 1894 should be added the estimated surplus
at the beginning of the year, $20,992,377.03, and from this aggregate
there must be deducted, as stated by the Secretary, about $44,000,000
of estimated unexpended appropriations.

The public confidence in the purpose and ability of the Government to
maintain the parity of all of our money issues, whether coin or paper,
must remain unshaken. The demand for gold in Europe and the consequent
calls upon us are in a considerable degree the result of the efforts
of some of the European Governments to increase their gold reserves,
and these efforts should be met by appropriate legislation on our
part. The conditions that have created this drain of the Treasury
gold are in an important degree political, and not commercial. In
view of the fact that a general revision of our revenue laws in the
near future seems to be probable, it would be better that any changes
should be a part of that revision rather than of a temporary nature.

During the last fiscal year the Secretary purchased under the act of
July 14, 1890, 54,355,748 ounces of silver and issued in payment
therefor $51,106,608 in notes. The total purchases since the passage
of the act have been 120,479,981 ounces and the aggregate of notes
issued $116,783,590. The average price paid for silver during the
year was 94 cents per ounce, the highest price being $1.02 3/4 July
1, 1891, and the lowest 83 cents March 21, 1892. In view of the fact
that the monetary conference is now sitting and that no conclusion
has yet been reached, I withhold any recommendation as to legislation
upon this subject.

The report of the Secretary of War brings again to the attention of
Congress some important suggestions as to the reorganization of the
infantry and artillery arms of the service, which his predecessors
have before urgently presented. Our Army is small, but its
organization should all the more be put upon the most approved modern
basis. The conditions upon what we have called the "frontier" have
heretofore required the maintenance of many small posts, but now the
policy of concentration is obviously the right one. The new posts
should have the proper strategic relations to the only "frontiers" we
now have--those of the seacoast and of our northern and part of our
southern boundary. I do not think that any question of advantage to
localities or to States should determine the location of the new
posts. The reorganization and enlargement of the Bureau of Military
Information which the Secretary has effected is a work the usefulness
of which will become every year more apparent. The work of building
heavy guns and the construction of coast defenses has been well begun
and should be carried on without check.

The report of the Attorney-General is by law submitted directly to
Congress, but I can not refrain from saying that he has conducted the
increasing work of the Department of Justice with great professional
skill. He has in several directions secured from the courts decisions
giving increased protection to the officers of the United States and
bringing some classes of crime that escaped local cognizance and
punishment into the tribunals of the United States, where they could
be tried with impartiality.

The numerous applications for Executive clemency presented in behalf
of persons convicted in United States courts and given penitentiary
sentences have called my attention to a fact referred to by the
Attorney-General in his report, namely, that a time allowance for
good behavior for such prisoners is prescribed by the Federal
statutes only where the State in which the penitentiary is located
has made no such provision. Prisoners are given the benefit of the
provisions of the State law regulating the penitentiary to which they
may be sent. These are various, some perhaps too liberal and some
perhaps too illiberal. The result is that a sentence for five years
means one thing if the prisoner is sent to one State for confinement
and quite a different thing if he is sent to another. I recommend
that a uniform credit for good behavior be prescribed by Congress.

I have before expressed my concurrence in the recommendation of the
Attorney-General that degrees of murder should be recognized in the
Federal statutes, as they are, I believe, in all the States. These
grades are rounded on correct distinctions in crime. The recognition
of them would enable the courts to exercise some discretion in
apportioning punishment and would greatly relieve the Executive of
what is coming to be a very heavy burden--the examination of these
cases on application for commutation.

The aggregate of claims pending against the Government in the Court
of Claims is enormous. Claims to the amount of nearly $400,000,000
for the taking of or injury to the property of persons claiming to be
loyal during the war are now before that court for examination. When
to these are added the Indian depredation claims and the French
spoliation claims, an aggregate is reached that is indeed startling.
In the defense of all these cases the Government is at great
disadvantage. The claimants have preserved their evidence, whereas
the agents of the Government are sent into the field to rummage for
what they can find. This difficulty is peculiarly great where the
fact to be established is the disloyalty of the claimant during the
war. If this great threat against our revenues is to have no other
check, certainly Congress should supply the Department of Justice
with appropriations sufficiently liberal to secure the best legal
talent in the defense of these claims and to pursue its vague search
for evidence effectively.

The report of the Postmaster-General shows a most gratifying increase
and a most efficient and progressive management of the great business
of that Department. The remarkable increase in revenues, in the
number of post-offices, and in the miles of mail carriage furnishes
further evidence of the high state of prosperity which our people are
enjoying. New offices mean new hamlets and towns, new routes mean the
extension of our border settlements, and increased revenues mean an
active commerce. The Postmaster-General reviews the whole period of
his administration of the office and brings some of his statistics
down to the month of November last. The postal revenues have
increased during the last year nearly $5,000,000. The deficit for the
year ending June 30, 1892, is $848,341 less than the deficiency of the
preceding year. The deficiency of the present fiscal year it is
estimated will be reduced to $1,552,423, which will not only be
extinguished during the next fiscal year but a surplus of nearly
$1,000,000 should then be shown. In these calculations the payments
to be made under the contracts for ocean mail service have not been
included. There have been added 1,590 new mail routes during the
year, with a mileage of 8,563 miles, and the total number of new
miles of mail trips added during the year is nearly 17,000,000. The
number of miles of mail journeys added during the last four years is
about 76,000,000, this addition being 21,000,000 miles more than were
in operation in the whole country in 1861.

The number of post-offices has been increased by 2,790 during the
year, and during the past four years, and up to October 29 last, the
total increase in the number of offices has been nearly 9,000. The
number of free-delivery offices has been nearly doubled in the last
four years, and the number of money-order offices more than doubled
within that time.

For the three years ending June 30, 1892, the postal revenue amounted
to $197,744,359, which was an increase of $52,263,150 over the revenue
for the three years ending June 30, 1888, the increase during the last
three years being more than three and a half times as great as the
increase during the three years ending June 30, 1888. No such
increase as that shown for these three years has ever previously
appeared in the revenues of the Department. The Postmaster-General
has extended to the post-offices in the larger cities the merit
system of promotion introduced by my direction into the Departments
here, and it has resulted there, as in the Departments, in a larger
volume of work and that better done.

Ever since our merchant marine was driven from the sea by the rebel
cruisers during the War of the Rebellion the United States has been
paying an enormous annual tribute to foreign countries in the shape
of freight and passage moneys. Our grain and meats have been taken at
our own docks and our large imports there laid down by foreign
shipmasters. An increasing torrent of American travel to Europe has
contributed a vast sum annually to the dividends of foreign
shipowners. The balance of trade shown by the books of our
custom-houses has been very largely reduced and in many years
altogether extinguished by this constant drain. In the year 1892 only
12.3 per cent of our imports were brought in American vessels. These
great foreign steamships maintained by our traffic are many of them
under contracts with their respective Governments by which in time of
war they will become a part of their armed naval establishments.
Profiting by our commerce in peace, they will become the most
formidable destroyers of our commerce in time of war. I have felt,
and have before expressed the feeling, that this condition of things
was both intolerable and disgraceful. A wholesome change of policy,
and one having in it much promise, as it seems to me, was begun by
the law of March 3, 1891. Under this law contracts have been made by
the Postmaster-General for eleven mail routes. The expenditure
involved by these contracts for the next fiscal year approximates
$954,123.33. As one of the results already reached sixteen American
steamships, of an aggregate tonnage of 57,400 tons, costing
$7,400,000, have been built or contracted to be built in American
shipyards.

The estimated tonnage of all steamships required under existing
contracts is 165,802, and when the full service required by these
contracts is established there will be forty-one mail steamers under
the American flag, with the probability of further necessary
additions in the Brazilian and Argentine service. The contracts
recently let for transatlantic service will result in the
construction of five ships of 10,000 tons each, costing $9,000,000 to
$10,000,000, and will add, with the City of New York and City of
Paris, to which the Treasury Department was authorized by legislation
at the last session to give American registry, seven of the swiftest
vessels upon the sea to our naval reserve. The contracts made with
the lines sailing to Central and South American ports have increased
the frequency and shortened the time of the trips, added new ports of
call, and sustained some lines that otherwise would almost certainly
have been withdrawn. The service to Buenos Ayres is the first to the
Argentine Republic under the American flag. The service to
Southampton, Boulogne, and Antwerp is also new, and is to be begun
with the steamships City of New York and City of Paris in February
next.

I earnestly urge the continuance of the policy inaugurated by this
legislation, and that the appropriations required to meet the
obligations of the Government under the contracts may be made
promptly, so that the lines that have entered into these engagements
may not be embarrassed. We have had, by reason of connections with
the transcontinental railway lines constructed through our own
territory, some advantages in the ocean trade of the Pacific that we
did not possess on the Atlantic. The construction of the Canadian
Pacific Railway and the establishment under large subventions from
Canada and England of fast steamship service from Vancouver with
Japan and China seriously threaten our shipping interests in the
Pacific. This line of English steamers receives, as is stated by the
Commissioner of Navigation, a direct subsidy of $400,000 annually, or
$30,767 per trip for thirteen voyages, in addition to some further aid
from the Admiralty in connection with contracts under which the
vessels may be used for naval purposes. The competing American
Pacific mail line under the act of March 3, 1891, receives only
$6,389 per round trip.

Efforts have been making within the last year, as I am informed, to
establish under similar conditions a line between Vancouver and some
Australian port, with a view of seizing there a trade in which we
have had a large interest. The Commissioner of Navigation states that
a very large per cent of our imports from Asia are now brought to us
by English steamships and their connecting railways in Canada. With a
view of promoting this trade, especially in tea, Canada has imposed a
discriminating duty of 10 per cent upon tea and coffee brought into
the Dominion from the United States. If this unequal contest between
American lines without subsidy, or with diminished subsidies, and the
English Canadian line to which I have referred is to continue, I think
we should at least see that the facilities for customs entry and
transportation across our territory are not such as to make the
Canadian route a favored one, and that the discrimination as to
duties to which I have referred is met by a like discrimination as to
the importation of these articles from Canada.

No subject, I think, more nearly touches the pride, the power, and
the prosperity of our country than this of the development of our
merchant marine upon the sea. If we could enter into conference with
other competitors and all would agree to withhold government aid, we
could perhaps take our chances with the rest; but our great
competitors have established and maintained their lines by government
subsidies until they now have practically excluded us from
participation. In my opinion no choice is left to us but to pursue,
moderately at least, the same lines.

The report of the Secretary of the Navy exhibits great progress in
the construction of our new Navy. When the present Secretary entered
upon his duties, only 3 modern steel vessels were in commission. The
vessels since put in commission and to be put in commission during
the winter will make a total of 19 during his administration of the
Department. During the current year 10 war vessels and 3 navy tugs
have been launched, and during the four years 25 vessels will have
been launched. Two other large ships and a torpedo boat are under
contract and the work upon them well advanced, and the 4 monitors are
awaiting only the arrival of their armor, which has been unexpectedly
delayed, or they would have been before this in commission.

Contracts have been let during this Administration, under the
appropriations for the increase of the Navy, including new vessels
and their appurtenances, to the amount of $35,000,000, and there has
been expended during the same period for labor at navy-yards upon
similar work $8,000,000 without the smallest scandal or charge of
fraud or partiality. The enthusiasm and interest of our naval
officers, both of the staff and line, have been greatly kindled. They
have responded magnificently to the confidence of Congress and have
demonstrated to the world an unexcelled capacity in construction, in
ordnance, and in everything involved in the building, equipping, and
sailing of great war ships.

At the beginning of Secretary Tracy's administration several
difficult problems remained to be grappled with and solved before the
efficiency in action of our ships could be secured. It is believed
that as the result of new processes in the construction of armor
plate our later ships will be clothed with defensive plates of higher
resisting power than are found on any war vessels afloat. We were
without torpedoes. Tests have been made to ascertain the relative
efficiency of different constructions, a torpedo has been adopted,
and the work of construction is now being carried on successfully. We
were without armor-piercing shells and without a shop instructed and
equipped for the construction of them. We are now making what is
believed to be a projectile superior to any before in use. A
smokeless powder has been developed and a slow-burning powder for
guns of large caliber. A high explosive capable of use in shells
fired from service guns has been found, and the manufacture of gun
cotton has been developed so that the question of supply is no longer
in doubt.

The development of a naval militia, which has been organized in eight
States and brought into cordial and cooperative relations with the
Navy, is another important achievement. There are now enlisted in
these organizations 1,800 men, and they are likely to be greatly
extended. I recommend such legislation and appropriations as will
encourage and develop this movement. The recommendations of the
Secretary will, I do not doubt, receive the friendly consideration of
Congress, for he has enjoyed, as he has deserved, the confidence of
all those interested in the development of our Navy, without any
division upon partisan lines. I earnestly express the hope that a
work which has made such noble progress may not now be stayed. The
wholesome influence for peace and the increased sense of security
which our citizens domiciled in other lands feel when these
magnificent ships under the American flag appear is already most
gratefully apparent. The ships from our Navy which will appear in the
great naval parade next April in the harbor of New York will be a
convincing demonstration to the world that the United States is again
a naval power.

The work of the Interior Department, always very burdensome, has been
larger than ever before during the administration of Secretary Noble.
The disability-pension law, the taking of the Eleventh Census, the
opening of vast areas of Indian lands to settlement, the organization
of Oklahoma, and the negotiations for the cession of Indian lands
furnish some of the particulars of the increased work, and the
results achieved testify to the ability, fidelity, and industry of
the head of the Department and his efficient assistants.

Several important agreements for the cession of Indian lands
negotiated by the commission appointed under the act of March 2,
1889, are awaiting the action of Congress. Perhaps the most important
of these is that for the cession of the Cherokee Strip. This region
has been the source of great vexation to the executive department and
of great friction and unrest between the settlers who desire to occupy
it and the Indians who assert title. The agreement which has been made
by the commission is perhaps the most satisfactory that could have
been reached. It will be noticed that it is conditioned upon its
ratification by Congress before March 4, 1893. The Secretary of the
Interior, who has given the subject very careful thought, recommends
the ratification of the agreement, and I am inclined to follow his
recommendation. Certain it is that some action by which this
controversy shall be brought to an end and these lands opened to
settlement is urgent.

The form of government provided by Congress on May 17, 1884, for
Alaska was in its frame and purpose temporary. The increase of
population and the development of some important mining and
commercial interests make it imperative that the law should be
revised and better provision made for the arrest and punishment of
criminals.

The report of the Secretary shows a very gratifying state of facts as
to the condition of the General Land Office. The work of issuing
agricultural patents, which seemed to be hopelessly in arrear when
the present Secretary undertook the duties of his office, has been so
expedited that the bureau is now upon current business. The relief
thus afforded to honest and worthy settlers upon the public lands by
giving to them an assured title to their entries has been of
incalculable benefit in developing the new States and the
Territories.

The Court of Private Land Claims, established by Congress for the
promotion of this policy of speedily settling contested land titles,
is making satisfactory progress in its work, and when the work is
completed a great impetus will be given to the development of those
regions where unsettled claims under Mexican grants have so long
exercised their repressive influence. When to these results are added
the enormous cessions of Indian lands which have been opened to
settlement, aggregating during this Administration nearly 26,000,000
acres, and the agreements negotiated and now pending in Congress for
ratification by which about 10,000,000 additional acres will be
opened to settlement, it will be seen how much has been
accomplished.

The work in the Indian Bureau in the execution of the policy of
recent legislation has been largely directed to two chief purposes:
First, the allotment of lands in severalty to the Indians and the
cession to the United States of the surplus lands, and, secondly, to
the work of educating the Indian for his own protection in his closer
contact with the white man and for the intelligent exercise of his new
citizenship. Allotments have been made and patents issued to 5,900
Indians under the present Secretary and Commissioner, and 7,600
additional allotments have been made for which patents are now in
process of preparation. The school attendance of Indian children has
been increased during that time over 13 per cent, the enrollment for
1892 being nearly 20,000. A uniform system of school text-books and
of study has been adopted and the work in these national schools
brought as near as may be to the basis of the free common schools of
the States. These schools can be transferred and merged into the
common-school systems of the States when the Indian has fully assumed
his new relation to the organized civil community in which he resides
and the new States are able to assume the burden. I have several
times been called upon to remove Indian agents appointed by me, and
have done so promptly upon every sustained complaint of unfitness or
misconduct. I believe, however, that the Indian service at the
agencies has been improved and is now administered on the whole with
a good degree of efficiency. If any legislation is possible by which
the selection of Indian agents can be wholly removed from all
partisan suggestions or considerations, I am sure it would be a great
relief to the Executive and a great benefit to the service. The
appropriation for the subsistence of the Cheyenne and Arapahoe
Indians made at the last session of Congress was inadequate. This
smaller appropriation was estimated for by the Commissioner upon the
theory that the large fund belonging to the tribe in the public
Treasury could be and ought to be used for their support. In view,
however, of the pending depredation claims against this fund and
other considerations, the Secretary of the Interior on the 12th of
April last submitted a supplemental estimate for $50,000. This
appropriation was not made, as it should have been, and the oversight
ought to be remedied at the earliest possible date.

In a special message to this Congress at the last session, I stated
the reasons why I had not approved the deed for the release to the
United States by the Choctaws and Chickasaws of the lands formerly
embraced in the Cheyenne and Arapahoe Reservation and remaining after
allotments to that tribe. A resolution of the Senate expressing the
opinion of that body that notwithstanding the facts stated in my
special message the deed should be approved and the money,
$2,991,450, paid over was presented to me May 10, 1892. My special
message was intended to call the attention of Congress to the
subject, and in view of the fact that it is conceded that the
appropriation proceeded upon a false basis as to the amount of lands
to be paid for and is by $50,000 in excess of the amount they are
entitled to (even if their claim to the land is given full
recognition at the rate agreed upon), I have not felt willing to
approve the deed, and shall not do so, at least until both Houses of
Congress have acted upon the subject. It has been informally proposed
by the claimants to release this sum of $50,000, but I have no power
to demand or accept such a release, and such an agreement would be
without consideration and void.

I desire further to call the attention of Congress to the fact that
the recent agreement concluded with the Kiowas and Comanches relates
to lands which were a part of the "leased district," and to which the
claim of the Choctaws and Chickasaws is precisely that recognized by
Congress in the legislation I have referred to. The surplus lands to
which this claim would attach in the Kiowa and Comanche Reservation
is 2,500,000 acres, and at the same rate the Government will be
called upon to pay to the Choctaws and Chickasaws for these lands
$3,125,000. This sum will be further augmented, especially if the
title of the Indians to the tract now Greet County, Tex., is
established. The duty devolved upon me in this connection was simply
to pass upon the form of the deed; but as in my opinion the facts
mentioned in my special message were not adequately brought to the
attention of Congress in connection with the legislation, I have felt
that I would not be justified in acting without some new expression of
the legislative will.

The report of the Commiss