Speech Transcript:

 To the Congress of the United States:

The assemblage within the nation's legislative halls of those charged
with the duty of making laws for the benefit of a generous and free
people impressively suggests the exacting obligation and inexorable
responsibility involved in their task. At the threshold of such labor
now to be undertaken by the Congress of the United States, and in the
discharge of an executive duty enjoined by the Constitution, I submit
this communication, containing a brief statement of the condition of
our national affairs and recommending such legislation as seems to me
necessary and expedient.

The history of our recent dealings with other nations and our
peaceful relations with them at this time additionally demonstrate
the advantage of consistently adhering to a firm but just foreign
policy, free from envious or ambitious national schemes and
characterized by entire honesty and sincerity.

During the past year, pursuant to a law of Congress, commissioners
were appointed to the Antwerp Industrial Exposition. Though the
participation of American exhibitors fell far short of completely
illustrating our national ingenuity and industrial achievements, yet
it was quite creditable in view of the brief time allowed for
preparation.

I have endeavored to impress upon the Belgian Government the
heedlessness and positive harmfulness of its restrictions upon the
importation of certain of our food products, and have strongly urged
that the rigid supervision and inspection under our laws are amply
sufficient to prevent the exportation from this country of diseased
cattle and unwholesome meat.

The termination of the civil war in Brazil has been followed by the
general prevalence of peace and order. It appearing at an early stage
of the insurrection that its course would call for unusual
watchfulness on the part of this Government, our naval force in the
harbor of Rio de Janeiro was strengthened. This precaution, I am
satisfied, tended to restrict the issue to a simple trial of strength
between the Brazilian Government and the insurgents and to avert
complications which at times seemed imminent. Our firm attitude of
neutrality was maintained to the end. The insurgents received no
encouragement of eventual asylum from our commanders, and such
opposition as they encountered was for the protection of our commerce
and was clearly justified by public law.

A serious tension of relations having arisen at the close of the war
between Brazil and Portugal by reason of the escape of the insurgent
admiral Da Gama and his followers, the friendly offices of our
representatives to those countries were exerted for the protection of
the subjects of either within the territory of the other.

Although the Government of Brazil was duly notified that the
commercial arrangement existing between the United States and that
country based on the third section of the tariff act of 1890 was
abrogated on August 28, 1894, by the taking effect of the tariff law
now in force, that Government subsequently notified us of its
intention to terminate such arrangement on the 1st day of January,
1895, in the exercise of the right reserved in the agreement between
the two countries. I invite attention to the correspondence between
the Secretary of State and the Brazilian minister on this subject.

The commission organized under the convention which we had entered
into with Chile for the settlement of the outstanding claims of each
Government against the other adjourned at the end of the period
stipulated for its continuance leaving undetermined a number of
American cases which had been duly presented. These claims are not
barred, and negotiations are in progress for their submission to a
new tribunal.

On the 17th of March last a new treaty with China in further
regulation of emigration was signed at Washington, and on August 13
it received the sanction of the Senate. Ratification on the part of
China and formal exchange are awaited to give effect to this mutually
beneficial convention.

A gratifying recognition of the uniform impartiality of this country
toward all foreign states was manifested by the coincident request of
the Chinese and Japanese Governments that the agents of the United
States should within proper limits afford protection to the subjects
of the other during the suspension of diplomatic relations due to a
state of war. This delicate office was accepted, and a
misapprehension which gave rise to the belief that in affording this
kindly unofficial protection our agents would exercise the same
authority which the withdrawn agents of the belligerents had
exercised was promptly corrected. Although the war between China and
Japan endangers no policy of the United States, it deserves our
gravest consideration by reason of its disturbance of our growing
commercial interests in the two countries and the increased dangers
which may result to our citizens domiciled or sojourning in the
interior of China.

Acting under a stipulation in our treaty with Korea (the first
concluded with a western power), I felt constrained at the beginning
of the controversy to tender our good offices to induce an amicable
arrangement of the initial difficulty growing out of the Japanese
demands for administrative reforms in Korea, but the unhappy
precipitation of actual hostilities defeated this kindly purpose.

Deploring the destructive war between the two most powerful of the
eastern nations and anxious that our commercial interests in those
countries may be preserved and that the safety of our citizens there
shall not be jeopardized, I would not hesitate to heed any intimation
that our friendly aid for the honorable termination of hostilities
would be acceptable to both belligerents.

A convention has been finally concluded for the settlement by
arbitration of the prolonged dispute with Ecuador growing out of the
proceedings against Emilio Santos, a naturalized citizen of the
United States.

Our relations with the Republic of France continue to be such as
should exist between nations so long bound together by friendly
sympathy and similarity in their form of government.

The recent cruel assassination of the President of this sister
Republic called forth such universal expressions of sorrow and
condolence from our people and Government as to leave no doubt of the
depth and sincerity of our attachment. The resolutions passed by the
Senate and House of Representatives on the occasion have been
communicated to the widow of President Carnot.

Acting upon the reported discovery of Texas fever in cargoes of
American cattle, the German prohibition against importations of live
stock and fresh meats from this country has been revived. It is hoped
that Germany will soon become convinced that the inhibition is as
needless as it is harmful to mutual interests.

The German Government has protested against that provision of the
customs tariff act which imposes a discriminating duty of one-tenth
of 1 cent a pound on sugars coming from countries paying an export
bounty thereon, claiming that the exaction of such duty is in
contravention of Articles V and IX of the treaty of 1828 with
Prussia.

In the interests of the commerce of both countries and to avoid even
the accusation of treaty violation, I recommend the repeal of so much
of the statute as imposes that duty, and I invite attention to the
accompanying report of the Secretary of State, containing a
discussion of the questions raised by the German protests.

Early in the present year an agreement was reached with Great Britain
concerning instructions to be given to the naval commanders of the two
Governments in Bering Sea and the contiguous North Pacific Ocean for
their guidance in the execution of the award of the Paris Tribunal of
Arbitration and the enforcement of the regulations therein prescribed
for the protection of seal life in the waters mentioned. An
understanding has also been reached for the payment by the United
States of

$425,000 in full satisfaction of all claims which may be made by
Great Britain for damages growing out of the controversy as to fur
seals in Bering Sea or the seizure of British vessels engaged in
taking seal in those waters. The award and findings of the Paris
Tribunal to a great extent determined the facts and principles upon
which these claims should be adjusted, and they have been subjected
by both Governments to a thorough examination upon the principles as
well as the facts which they involve. I am convinced that a
settlement upon the terms mentioned would be an equitable and
advantageous one, and I recommend that provision be made for the
prompt payment of the stated sum.

Thus far only France and Portugal have signified their willingness to
adhere to the regulations established under the award of the Paris
Tribunal of Arbitration.

Preliminary surveys of the Alaskan boundary and a preparatory
examination of the question of protection of food fish in the
contiguous waters of the United States and the Dominion of Canada are
in progress.

The boundary of British Guiana still remains in dispute between Great
Britain and Venezuela. Believing that its early settlement on some
just basis alike honorable to both parties is in the line of our
established policy to remove from this hemisphere all causes of
difference with powers beyond the sea, I shall renew the efforts
heretofore made to bring about a restoration of diplomatic relations
between the disputants and to induce a reference to arbitration--a
resort which Great Britain so conspicuously favors in principle and
respects in practice and which is earnestly sought by her weaker
adversary.

Since communicating the voluminous correspondence in regard to Hawaii
and the action taken by the Senate and House of Representatives on
certain questions submitted to the judgment and wider discretion of
Congress the organization of a government in place of the provisional
arrangement which followed the deposition of the Queen has been
announced, with evidence of its effective operation. The recognition
usual in such cases has been accorded the new Government.

Under our present treaties of extradition with Italy miscarriages of
justice have occurred owing to the refusal of that Government to
surrender its own subjects. Thus far our efforts to negotiate an
amended convention obviating this difficulty have been unavailing.

Apart from the war in which the Island Empire is engaged, Japan
attracts increasing attention in this country by her evident desire
to cultivate more liberal intercourse with us and to seek our kindly
aid in furtherance of her laudable desire for complete autonomy in
her domestic affairs and full equality in the family of nations. The
Japanese Empire of to-day is no longer the Japan of the past, and our
relations with this progressive nation should not be less broad and
liberal than those with other powers.

Good will, fostered by many interests in common, has marked our
relations with our nearest southern neighbor. Peace being restored
along her northern frontier, Mexico has asked the punishment of the
late disturbers of her tranquillity. There ought to be a new treaty
of commerce and navigation with that country to take the place of the
one which terminated thirteen years ago. The friendliness of the
intercourse between the two countries is attested by the fact that
during this long period the commerce of each has steadily increased
under the rule of mutual consideration, being neither stimulated by
conventional arrangements nor retarded by jealous rivalries or
selfish distrust.

An indemnity tendered by Mexico as a gracious act for the murder in
1887 of Leon Baldwin, an American citizen, by a band of marauders in
Durango has been accepted and is being paid in installments.

The problem of the storage and use of the waters of the Rio Grande
for irrigation should be solved by appropriate concurrent action of
the two interested countries. Rising in the Colorado heights, the
stream flows intermittently, yielding little water during the dry
months to the irrigation channels already constructed along its
course. This scarcity is often severely felt in the regions where the
river forms a common boundary. Moreover, the frequent changes in its
course through level sands often raise embarrassing questions of
territorial jurisdiction.

Prominent among the questions of the year was the Bluefields
incident, in what is known as the Mosquito Indian Strip, bordering on
the Atlantic Ocean and within the jurisdiction of Nicaragua. By the
treaty of 1860 between Great Britain and Nicaragua the former
Government expressly recognized the sovereignty of the latter over
the strip, and a limited form of self-government was guaranteed to
the Mosquito Indians, to be exercised according to their customs, for
themselves and other dwellers within its limits. The so-called native
government, which grew to be largely made up of aliens, for many
years disputed the sovereignty of Nicaragua over the strip and
claimed the right to maintain therein a practically independent
municipal government. Early in the past year efforts of Nicaragua to
maintain sovereignty over the Mosquito territory led to serious
disturbances, culminating in the suppression of the native government
and the attempted substitution of an impracticable composite
administration in which Nicaragua and alien residents were to
participate. Failure was followed by an insurrection, which for a
time subverted Nicaraguan rule, expelling her officers and restoring
the old organization. This in turn gave place to the existing local
government established and upheld by Nicaragua.

Although the alien interests arrayed against Nicaragua in these
transactions have been largely American and the commerce of that
region for some time has been and still is chiefly controlled by our
citizens, we can not for that reason challenge the rightful
sovereignty of Nicaragua over this important part of her domain.

For some months one, and during part of the time two, of our naval
ships have been stationed at Bluefields for the protection of all
legitimate interests of our citizens. In September last the
Government at Managua expelled from its territory twelve or more
foreigners, including two Americans, for alleged participation in the
seditious or revolutionary movements against the Republic at
Bluefields already mentioned; but through the earnest remonstrance of
this Government the two Americans have been permitted to return to the
peaceful management of their business. Our naval commanders at the
scene of these disturbances by their constant exhibition of firmness
and good judgment contributed largely to the prevention of more
serious consequences and to the restoration of quiet and order. I
regret that in the midst of these occurrences there happened a most
grave and irritating failure of Nicaraguan justice. An American
citizen named Wilson, residing at Rama, in the Mosquito territory,
was murdered by one Arguello, the acting governor of the town. After
some delay the murderer was arrested, but so insecurely confined or
guarded that he escaped, and notwithstanding our repeated demands it
is claimed that his recapture has been impossible by reason of his
flight beyond Nicaraguan jurisdiction.

The Nicaraguan authorities, having given notice of forfeiture of
their concession to the canal company on grounds purely technical and
not embraced in the contract, have receded from that position.

Peru, I regret to say, shows symptoms of domestic disturbance, due
probably to the slowness of her recuperation from the distresses of
the war of 1881. Weakened in resources, her difficulties in facing
international obligations invite our kindly sympathy and justify our
forbearance in pressing long-pending claims. I have felt constrained
to testify this sympathy in connection with certain demands urgently
preferred by other powers.

The recent death of the Czar of Russia called forth appropriate
expressions of sorrow and sympathy on the part of our Government with
his bereaved family and the Russian people. As a further demonstration
of respect and friendship our minister at St. Petersburg was directed
to represent our Government at the funeral ceremonies.

The sealing interests of Russia in Bering Sea are second only to our
own. A modus vivendi has therefore been concluded with the Imperial
Government restrictive of poaching on the Russian rookeries and of
sealing in waters which were not comprehended in the protected area
defined in the Paris award.

Occasion has been found to urge upon the Russian Government equality
of treatment for our great life-insurance companies whose operations
have been extended throughout Europe. Admitting as we do foreign
corporations to transact business in the United States, we naturally
expect no less tolerance for our own in the ample fields of
competition abroad.

But few cases of interference with naturalized citizens returning to
Russia have been reported during the current year. One Krzeminski was
arrested last summer in a Polish province on a reported charge of
unpermitted renunciation of Russian allegiance, but it transpired
that the proceedings originated in alleged malfeasance committed by
Krzeminski while an imperial official a number of years ago. Efforts
for his release, which promised to be successful, were in progress
when his death was reported.

The Government of Salvador having been overthrown by an abrupt
popular outbreak, certain of its military and civil officers, while
hotly pursued by infuriated insurgents, sought refuge on board the
United States war ship Bennington, then lying in a Salvadorean port.
Although the practice of asylum is not favored by this Government,
yet in view of the imminent peril which threatened the fugitives and
solely from considerations of humanity they were afforded shelter by
our naval commander, and when afterwards demanded under our treaty of
extradition with Salvador for trial on charges of murder, arson, and
robbery I directed that such of them as had not voluntarily left the
ship be conveyed to one of our nearest ports where a hearing could be
had before a judicial officer, in compliance with the terms of the
treaty. On their arrival at San Francisco such a proceeding was
promptly instituted before the United States district judge, who held
that the acts constituting the alleged offenses were political and
discharged all the accused except one Cienfuegos, who was held for an
attempt to murder. Thereupon I was constrained to direct his release
for the reason that an attempt to murder was not one of the crimes
charged against him and upon which his surrender to the Salvadorean
authorities had been demanded.

Unreasonable and unjust fines imposed by Spain on the vessels and
commerce of the United States have demanded from time to time during
the last twenty years earnest remonstrance on the part of our
Government. In the immediate past exorbitant penalties have been
imposed upon our vessels and goods by customs authorities of Cuba and
Puerto Rico for clerical errors of the most trivial character in the
manifests of bills of lading. In some cases fines amounting to
thousands of dollars have been levied upon cargoes or the carrying
vessels when the goods in question were entitled to free entry. Fines
have been exacted even when the error had been detected and the
Spanish authorities notified before the arrival of the goods in
port.

This conduct is in strange contrast with the considerate and liberal
treatment extended to Spanish vessels and cargoes in our ports in
like cases. No satisfactory settlement of these vexatious questions
has yet been reached.

The Mora case, referred to in my last annual message, remains
unsettled. From the diplomatic correspondence on this subject which
has been laid before the Senate it will be seen that this Government
has offered to conclude a convention with Spain for disposal by
arbitration of outstanding claims between the two countries, except
the Mora claim. which, having been long ago adjusted, now only awaits
payment as stipulated, and of course it could not be included in the
proposed convention. It was hoped that this offer would remove
parliamentary obstacles encountered by the Spanish Government in
providing payment of the Mora indemnity. I regret to say that no
definite reply to this offer has yet been made and all efforts to
secure payment of this settled claim have been unavailing.

In my last annual message I adverted to the claim on the part of
Turkey of the right to expel as persons undesirable and dangerous
Armenians naturalized in the United States and returning to Turkish
jurisdiction. Numerous questions in this relation have arisen. While
this Government acquiesces in the asserted right of expulsion, it
will not consent that Armenians may be imprisoned or otherwise
punished for no other reason than having acquired without imperial
consent American citizenship.

Three of the assailants of Miss Melton, an American teacher in Mosul,
have been convicted by the Ottoman courts, and I am advised that an
appeal against the acquittal of the remaining five has been taken by
the Turkish prosecuting officer.

A convention has been concluded with Venezuela for the arbitration of
a long-disputed claim growing out of the seizure of certain vessels
the property of citizens of the United States. Although signed, the
treaty of extradition with Venezuela is not yet in force, owing to
the insistence of that Government that when surrendered its citizens
shall in no case be liable to capital punishment.

The rules for the prevention of collisions at sea which were framed
by the maritime conference held in this city in 1889, having been
concurrently incorporated in the statutes of the United States and
Great Britain have been announced to take effect March 1, 1895, and
invitations have been extended to all maritime nations to adhere to
them. Favorable responses have thus far been received from Austria,
France, Portugal, Spain, and Sweden.

In my last annual message I referred briefly to the unsatisfactory
state of affairs in Samoa under the operation of the Berlin treaty as
signally illustrating the impolicy of entangling alliances with
foreign powers, and on May 9, 1894, in response to a resolution of
the Senate, I sent a Special message and documents to that body on
the same subject, which emphasized my previously expressed opinions.
Later occurrences, the correspondence in regard to which will be laid
before the Congress, further demonstrate that the Government which was
devised by the three powers and forced upon the Samoans against their
inveterate hostility can be maintained only by the continued presence
of foreign military force and at no small sacrifice of life and
treasure.

The suppression of the Mataafa insurrection by the powers and the
subsequent banishment of the leader and eleven other chiefs, as
recited in my last message, did not bring lasting peace to the
islands. Formidable uprisings continued, and finally a rebellion
broke out in the capital island, Upolu, headed in Aana, the western
district, by the younger Tamasese, and in Atua, the eastern district,
by other leaders. The insurgents ravaged the country and fought the
Government's troops up to the very doors of Apia. The King again
appealed to the powers for help, and the combined British and German
naval forces reduced the Atuans to apparent subjection, not, however,
without considerable loss to the natives. A few days later Tamasese
and his adherents, fearing the ships and the marines, professed
submission.

Reports received from our agents at Apia do not justify the belief
that the peace thus brought about will be of long duration. It is
their conviction that the natives are at heart hostile to the present
Government, that such of them as profess loyalty to it do so from fear
of the powers, and that it would speedily go to pieces if the war
ships were withdrawn. In reporting to his Government on the
unsatisfactory situation since the suppression of the late revolt by
foreign armed forces, the German consul at Apia stated:

That peace will be lasting is hardly to be presumed. The lesson given
by firing on Atua was not sufficiently sharp and incisive to leave a
lasting impression on the forgetful Samoan temperament. In fact,
conditions are existing which show that peace will not last and is
not seriously intended. Malietoa, the King, and his chiefs are
convinced that the departure of the war ships will be a signal for a
renewal of war. The circumstance that the representatives of the
villages of all the districts which were opposed to the Government
have already withdrawn to Atua to hold meetings, and that both Atua
and Aana have forbidden inhabitants of those districts which fought
on the side of the Government to return to their villages, and have
already partly burned down the latter, indicates that a real
conciliation of the parties is still far off.

And in a note of the 10th ultimo, inclosing a copy of that report for
the information of this Government, the German ambassador said:

The contents of the report awakened the imperial Government's
apprehension that under existing circumstances the peace concluded
with the rebels will afford no assurance of the lasting restoration
of tranquillity in the islands.

The present Government has utterly failed to correct, if indeed it
has not aggravated, the very evils it was intended to prevent. It has
not stimulated our commerce with the islands. Our participation in its
establishment against the wishes of the natives was in plain defiance
of the conservative teachings and warnings of the wise and patriotic
men who laid the foundations of our free institutions, and I invite
an expression of the judgment of Congress on the propriety of steps
being taken by this Government looking to the withdrawal from its
engagements with the other powers on some reasonable terms not
prejudicial to any of our existing rights.

The Secretary of the Treasury reports that the receipts of the
Government from all sources of revenue during the fiscal year ending
June 30, 1894, amounted to $372,802,498.29 and its expenditures to
$442,605,758.87, leaving a deficit of $69,803,260.58. There was a
decrease of $15,952,674.66 in the ordinary expense of the Government
as compared with the fiscal year 1893.

There was collected from customs $131,818,530.62 and from internal
revenue $147,168,449.70. The balance of the income for the year,
amounting to $93,815,517.97, was derived from the sales of lands and
other sources.

The value of our total dutiable imports amounted to $275,199,086,
being $146,657,625 less than during the preceding year, and the
importations free of duty amounted to $379,795,536, being $64,748,675
less than during the preceding year. The receipts from customs were
$73,536,486.11 less and from internal revenue $13,836,539.97 less
than in 1893.

The total tax collected from distilled spirits was $85,259,250.25, on
manufactured tobacco $28,617,898.62, and on fermented liquors
$31,414,788.04.

Our exports of merchandise, domestic and foreign, amounted during the
year to $892,140,572, being an increase over the preceding year of
$44,495,378.

The total amount of gold exported during the fiscal year was
$76,898,061, as against $108,680,444 during the fiscal year 1893. The
amount imported was $72,449,119, as against $21,174,381 during the
previous year.

The imports of silver were $13,186,552 and the exports were
$50,451,265.

The total bounty paid upon the production of sugar in the United
States for the fiscal year was $12,100,208.89, being an increase of
$2,725,078.01 over the payments made during the preceding year. The
amount of bounty paid from July 1, 1894, to August 28, 1894, the time
when further payments ceased by operation of law, was $966,185.84. The
total expenses incurred in the payment of the bounty upon sugar during
the fiscal year was $130,140.85.

It is estimated that upon the basis of the present revenue laws the
receipts of the Government during the current fiscal year, ending
June 30, 1895, will be $424,427,748.44 and its expenditures
$444,427,748.44, resulting in a deficit of $20,000,000.

On the 1st day of November, 1894, the total stock of money of all
kinds in the country was $2,240,773,88.8, as against $2,204,651,000
on the 1st day of November, 1893, and the money of all kinds in
circulation, or not included in the Treasury holdings, was
$1,672,093,422, or $24.27 per capita upon an estimated population of
68,887,000. At the same date there was held in the Treasury gold
bullion amounting to $44,615,177.55 and silver bullion which was
purchased at a cost of $127,772,988. The purchase of silver bullion
under the act of July 14, 1890, ceased on the 1st day of November,
1893, and up to that time there had been purchased during the fiscal
year 11,917,658.78 fine ounces, at a cost of $8,715,521.32, an
average cost of $0.7313 per fine ounce. The total amount of silver
purchased from the time that law took effect until the repeal of its
purchasing clause, on the date last mentioned, was 168,674,682.53
fine ounces, which cost $155,931,002.25, the average price per fine
ounce being $0.9244.

The total amount of standard silver dollars coined at the mints of
the United States since the passage of the act of February 28, 1878,
is $421,776,408, of which $378,166,793 were coined under the
provisions of that act, $38,531,143 under the provisions of the act
of July 14, 1890, and $5,078,472 under the act providing for the
coinage of trade-dollar bullion.

The total coinage of all metals at our mints during the last fiscal
year consisted of 63,485,220 pieces, valued at $106,216,730.06, of
which there were $99,474,912.50 in gold coined, $758 in standard
silver dollars, $6,024,140.30 in subsidiary silver coin, and
$716,919.26 in minor coin.

During the calendar year 1893 the production of precious metals in
the United States was estimated at 1,739,323 fine ounces of gold of
the commercial and coinage value of $35,955,000 and 70,000,000 fine
ounces of silver of the bullion or market value of $46,800,000 and of
the coinage value of $77,576,000. It is estimated that on the 1st day
of July, 1894, the stock of metallic money in the United States,
consisting of coin and bullion, amounted to $1,251,640,958, of which
$627,923,201 was gold and $624,347,757 was silver.

Fifty national banks were organized during the year ending October
31, 1894, with a capital of $5,285,000, and 79, with a capital of
$10,475,000, went into voluntary liquidation. Twenty-one banks, with
a capital of $2,770,000, were placed in the hands of receivers. The
total number of national banks in existence on the 31st day of
October last was 3,756, being 40 less than on the 31st day of
October, 1893. The capital stock paid in was $672,671,365, being
$9,678,491 less than at the same time in the previous year, and the
surplus fund and individual profits, less expenses and taxes paid,
amounted to $334,121,082.10, which was $16,089,780 less than on
October 31, 1893. The circulation was decreased $1,741,563. The
obligations of the banks to each other were increased $117,268,334
and the individual deposits were $277,294,489 less than at the
corresponding date in the previous year. Loans and discounts were
$161,206,923 more than at the same time the previous year, and checks
and other cash items were $90,349,963 more. The total resources of the
banks at the date mentioned amounted to $3,473,922,055, as against
$3,109,563,184.36 in 1893.

From the report of the Secretary of War it appears that the strength
of the Army on September 30, 1894, was 2,135 officers and 25,765
enlisted men. Although this is apparently a very slight decrease
compared with the previous year, the actual effective force has been
increased to the equivalent of nearly two regiments through the
reorganization of the system of recruiting and the consequent release
to regimental duty of the large force of men hitherto serving at the
recruiting depots. The abolition of these depots, it is predicted,
will furthermore effect an annual reduction approximating $250,000 in
the direct expenditures, besides promoting generally the health,
morale, and discipline of the troops.

The execution of the policy of concentrating the Army at important
centers of population and transportation, foreshadowed in the last
annual report of the Secretary, has resulted in the abandonment of
fifteen of the smaller posts, which was effected under a plan which
assembles organizations of the same regiments hitherto widely
separated. This renders our small forces more readily effective for
any service which they may be called upon to perform, increases the
extent of the territory under protection without diminishing the
security heretofore afforded to any locality, improves the
discipline, training, and esprit de corps of the Army, besides
considerably decreasing the cost of its maintenance.

Though the forces of the Department of the East have been somewhat
increased, more than three-fourths of the Army is still stationed
west of the Mississippi. This carefully matured policy, which secures
the best and greatest service in the interests of the general welfare
from the small force comprising our Regular Army, should not be
thoughtlessly embarrassed by the creation of new and unnecessary
posts through acts of Congress to gratify the ambitions or interests
of localities.

While the maximum legal strength of the Army is 25,000 men, the
effective strength, through various causes, is but little over 20,000
men. The purpose of Congress does not, therefore, seem to be fully
attained by the existing condition. While no considerable increase in
the Army is, in my judgment, demanded by recent events, the policy of
seacoast fortification, in the prosecution of which we have been
steadily engaged for some years, has so far developed as to suggest
that the effective strength of the Army be now made at least equal to
the legal strength. Measures taken by the Department during the year,
as indicated, have already considerably augmented the effective
force, and the Secretary of War presents a plan, which I recommend to
the consideration of Congress, to attain the desired end. Economies
effected in the Department in other lines of its work will offset to
a great extent the expenditure involved in the proposition submitted.
Among other things this contemplates the adoption of the
three-battalion formation of regiments, which for several years has
been indorsed by the Secretaries of War and the Generals Commanding
the Army. Compact in itself, it provides a skeleton organization,
ready to be filled out in the event of war, which is peculiarly
adapted to our strength and requirements; and the fact that every
other nation, with a single exception, has adopted this formation to
meet the conditions of modern warfare should alone secure for the
recommendation an early consideration.

It is hardly necessary to recall the fact that in obedience to the
commands of the Constitution and the laws, and for the purpose of
protecting the property of the United States, aiding the process of
Federal courts, and removing lawless obstructions to the performance
by the Government of its legitimate functions, it became necessary in
various localities during the year to employ a considerable portion of
the regular troops. The duty was discharged promptly, courageously,
and with marked discretion by the officers and men, and the most
gratifying proof was thus afforded that the Army deserves that
complete confidence in its efficiency and discipline which the
country has at all times manifested.

The year has been free from disturbances by Indians, and the chances
of further depredations on their part are constantly becoming more
remote and improbable.

The total .expenditures for the War Department for the year ended
June 30, 1894, amounted to $56,039,009.34. Of this sum $2,000,614.99
was for salaries and contingent expenses, $23,665,156.16 for the
support of the military establishment, $5,001,682.23 for
miscellaneous objects, and $25,371,555.96 for public works. This
latter sum includes $19,494,037.49 for river and harbor improvements
and $3,947,863.56 for fortifications and other works of defense. The
appropriations for the current year aggregate $52,429,112.78, and the
estimates submitted by the Secretary of War for the next fiscal year
call for appropriations amounting to $52,318,629.55.

The skill and industry of our ordnance officers and inventors have,
it is believed, overcome the mechanical obstacles which have
heretofore delayed the armament of our coasts, and this great
national undertaking upon which we have entered may now proceed as
rapidly as Congress shall determine. With a supply of finished guns
of large caliber already on hand, to which additions should now
rapidly follow, the wisdom of providing carriages and emplacements
for their mount can not be too strongly urged.

The total enrollment of the militia of the several States is 117,533
officers and enlisted men, an increase of 5,343 over the number
reported at the close of the previous year. The reports of militia
inspections by Regular Army officers show a marked increase in
interest and efficiency among the State organizations, and I strongly
recommend a continuance of the policy of affording every practical
encouragement possible to this important auxiliary of our military
establishment.

The condition of the Apache Indians held as prisoners by the
Government for eight years at a cost of half a million dollars has
been changed during the year from captivity to one which gives them
an opportunity to demonstrate their capacity for self-support and at
least partial civilization. Legislation enacted at the late session
of Congress gave the War Department authority to transfer the
survivors, numbering 346, from Mount Vernon Barracks, in Alabama, to
any suitable reservation. The Department selected as their future
home the military lands near Fort Sill, Ind. T., where, under
military surveillance, the former prisoners have been established in
agriculture under conditions favorable to their advancement.

In recognition of the long and distinguished military services and
faithful discharge of delicate and responsible civil duties by
Major-General John M. Schofield, now the General Commanding the Army,
it is suggested to Congress that the temporary revival of the grade of
lieutenant-general in his behalf would be a just and gracious act and
would permit his retirement, now near at hand, with rank befitting
his merits.

The report of the Attorney-General notes the gratifying progress made
by the Supreme Court in overcoming the arrears of its business and in
reaching a condition in which it will be able to dispose of cases as
they arise without any unreasonable delay. This result is of course
very largely due to the successful working of the plan inaugurating
circuit courts of appeals. In respect to these tribunals the
suggestion is made, in quarters entitled to the highest consideration
that an additional circuit judge for each circuit would greatly
strengthen these courts and the confidence reposed in their
adjudications, and that such an addition would not create a greater
force of judges than the increasing business of such courts requires.
I commend the suggestion to the careful consideration of the Congress.
Other important topics are adverted to in the report, accompanied by
recommendations, many of which have been treated at large in previous
messages, and at this time, therefore, need only be named. I refer to
the abolition of the fee system as a measure of compensation to
Federal officers; the enlargement of the powers of United States
commissioners, at least in the Territories; the allowance of writs of
error in criminal cases on behalf of the United States, and the
establishment of degrees in the crime of murder. A topic dealt with
by the Attorney-General of much importance is the condition of the
administration of justice in the Indian Territory. The permanent
solution of what is called the Indian problem is probably not to be
expected at once, but meanwhile such ameliorations of present
conditions as the existing system will admit of ought not to be
neglected. I am satisfied there should be a Federal court established
for the Territory, with sufficient judges, and that this court should
sit within the Territory and have the same jurisdiction as to
Territorial affairs as is now vested in the Federal courts sitting in
Arkansas and Texas.

Another subject of pressing moment referred to by the
Attorney-General is the reorganization of the Union Pacific Railway
Company on a basis equitable as regards all private interests and as
favorable to the Government as existing conditions will permit. The
operation of a railroad by a court through a receiver is an anomalous
state of things which should be terminated on all grounds, public and
private, at the earliest possible moment. Besides, not to enact the
needed enabling legislation at the present session postpones the
whole matter until the assembling of a new Congress and inevitably
increases all the complications of the situation, and could not but
be regarded as a signal failure to solve a problem which has
practically been before the present Congress ever since its
organization.

Eight years ago in my annual message I urged upon the Congress as
strongly as I could the location and construction of two prisons for
the confinement of United States prisoners. A similar recommendation
has been made from time to time since, and a few years ago a law was
passed providing for the selection of sites for three such
institutions. No appropriation has, however, been made to carry the
act into effect, and the old and discreditable condition still
exists.

It is not my purpose at this time to repeat the considerations which
make an impregnable case in favor of the ownership and management by
the Government of the penal institutions in which Federal prisoners
are confined. I simply desire to again urge former recommendations on
the subject and to particularly call the attention of the Congress to
that part of the report of the Secretary of War in which he states
that the military prison at Fort Leavenworth, Kans., can be turned
over to the Government as a prison for Federal convicts without the
least difficulty and with an actual saving of money from every point
of view.

Pending a more complete reform, I hope that by the adoption of the
suggestion of the Secretary of War this easy step may be taken in the
direction of the proper care of its convicts by the Government of the
United States.

The report of the Postmaster-General presents a comprehensive
statement of the operations of the Post-Office Department for the
last fiscal year.

The receipts of the Department during the year amounted to
$75,080,479.04 and the expenditures to $84,324,414.15.

The transactions of the postal service indicate with barometric
certainty the fluctuations in the business of the country. Inasmuch,
therefore, as business complications continued to exist throughout
the last year to an unforeseen extent, it is not surprising that the
deficiency of revenue to meet the expenditures of the Post-Office
Department, which was estimated in advance at about $8,000,000,
should be exceeded by nearly $1,225,000. The ascertained revenues of
the last year, which were the basis of calculation for the current
year, being less than estimated, the deficiency for the current year
will be correspondingly greater, though the Postmaster-General states
that the latest indications are so favorable that he confidently
predicts an increase of at least 8 per cent in the revenues of the
current year over those of the last year.

The expenditures increase steadily and necessarily with the growth
and needs of the country, so that the deficiency is greater or less
in any year, depending upon the volume of receipts.

The Postmaster-General states that this deficiency is unnecessary and
might be obviated at once if the law regulating rates upon mail matter
of the second class was modified. The rate received for the
transmission of this second-class matter is 1 cent per pound, while
the cost of such transmission to the Government is eight times that
amount. In the general terms of the law this rate covers newspapers
and periodicals. The extensions of the meaning of these terms from
time to time have admitted to the privileges intended for legitimate
newspapers and periodicals a surprising range of publications and
created abuses the cost of which amounts in the aggregate to the
total deficiency of the Post-Office Department. Pretended newspapers
are started by business houses for the mere purpose of advertising
goods, complying with the law in form only and discontinuing the
publications as soon as the period of advertising is over. "Sample
copies" of pretended newspapers are issued in great numbers for a
like purpose only. The result is a great loss of revenue to the
Government, besides its humiliating use as an agency to aid in
carrying out the scheme of a business house to advertise its goods by
means of a trick upon both its rival houses and the regular and
legitimate newspapers. Paper-covered literature, consisting mainly of
trashy novels, to the extent of many thousands of tons is sent through
the mails at 1 cent per pound, while the publishers of standard works
are required to pay eight times that amount in sending their
publications. Another abuse consists in the free carriage through the
mails of hundreds of tons of seed and grain uselessly distributed
through the Department of Agriculture. The Postmaster-General
predicts that if the law be so amended as to eradicate these abuses
not only will the Post-Office Department show no deficiency, but he
believes that in the near future all legitimate newspapers and
periodical magazines might be properly transmitted through the mails
to their subscribers free of cost. I invite your prompt consideration
of this subject and fully indorse the views of the
Postmaster-General.

The total number of post-offices in the United States on the 30th day
of June, 1894, was 69,805, an increase of 1,403 over the preceding
year. Of these, 3,428 were Presidential, an increase in that class of
68 over the preceding year.

Six hundred and ten cities and towns are provided with free delivery.
Ninety-three other cities and towns entitled to this service under the
law have not been accorded it on account of insufficient funds. The
expense of free delivery for the current fiscal year will be more
than $12,300,000, and under existing legislation this item of
expenditure is subject to constant increase. The estimated cost of
rural free delivery generally is so very large that it ought not to
be considered in the present condition of affairs.

During the year 830 additional domestic money-order offices were
established. The total number of these offices at the close of the
year was 19,264. There were 14,304,041 money orders issued during the
year, being an increase over the preceding year of 994,306. The value
of these orders amounted to $138,793,579.49, an increase of
$11,217,145.84. There were also issued during the year postal notes
amounting to $12,649,094.55.

During the year 218 international money-order offices were added to
those already established, making a total of 2,625 such offices in
operation June 30, 1894. The number of international money orders
issued during the year was 917,823, a decrease in number of 138,176,
and their value was $13,792,455.31, a decrease in amount of
$2,549,382.55. The number of orders paid was 361,180, an increase
over the preceding year of 60,263, and their value was $6,568,493.78,
an increase of $1,285,118.08.

From the foregoing statements it appears that the total issue of
money orders and postal notes for the year amounted to
$165,235,129.35.

The number of letters and packages mailed during the year for special
delivery was 3,436,970. The special-delivery stamps used upon these
letters and packages amounted to $343,697. The messengers fees paid
for their delivery amounted to $261,209.70, leaving a balance in
favor of the Government of $82,487.30.

The report shows most gratifying results in the way of economies
worked out without affecting the efficiency of the postal service.
These consist in the abrogation of steamship subsidy contracts,
reletting of mail transportation contracts, and in the cost and
amount of supplies used in the service, amounting in all to
$16,619,047.42.

This report also contains a valuable contribution to the history of
the Universal Postal Union, an arrangement which amounts practically
to the establishment of one postal system for the entire civilized
world. Special attention is directed to this subject at this time in
view of the fact that the next congress of the union will meet in
Washington in 1897, and it is hoped that timely action will be taken
in the direction of perfecting preparations for that event.

The Postmaster-General renews the suggestion made in a previous
report that the Department organization be increased to the extent of
creating a direct district supervision of all postal affairs, and in
this suggestion I fully concur.

There are now connected with the Post-Office establishment 32,661
employees who are in the classified service. This includes many who
have been classified upon the suggestion of the Postmaster-General.
He states that another year's experience at the head of the
Department serves only to strengthen the conviction as to the
excellent working of the civil-service law in this branch of the
public service.

Attention is called to the report of the Secretary of the Navy, which
shows very gratifying progress in the construction of ships for our
new Navy. All the vessels now building, including the three torpedo
boats authorized at the last session of Congress and excepting the
first-class battle ship Iowa, will probably be completed during the
coming fiscal year.

The estimates for the increase of the Navy for the year ending June
30, 1896, are large, but they include practically the entire sum
necessary to complete and equip all the new ships not now in
commission, so that unless new ships are authorized the
appropriations for the naval service for the fiscal year ending June
30, 1897, should fall below the estimates for the coming year by at
least $12,000,000.

The Secretary presents with much earnestness a plea for the
authorization of three additional battle ships and ten or twelve
torpedo boats. While the unarmored vessels heretofore authorized,
including those now nearing completion, will constitute a fleet which
it is believed is sufficient for ordinary cruising purposes in time of
peace, we have now completed and in process of construction but four
first-class battle ships and but few torpedo boats. If we are to have
a navy for warlike operations, offensive and defensive, we certainly
ought to increase both the number of battle ships and torpedo boats.

The manufacture of armor requires expensive plants and the
aggregation of many skilled workmen. All the armor necessary to
complete the vessels now building will be delivered before the 1st of
June next. If no new contracts are given out, contractors must disband
their workmen and their plants must lie idle. Battle ships authorized
at this time would not be well under way until late in the coming
fiscal year, and at least three years and a half from the date of the
contract would be required for their completion. The Secretary states
that not more than 15 per cent of the cost of such ships need be
included in the appropriations for the coming year.

I recommend that provision be made for the construction of additional
battle ships and torpedo boats. The Secretary recommends the
manufacture not only of a reserve supply of ordnance and ordnance
material for ships of the Navy, but also a supply for the auxiliary
fleet. Guns and their appurtenances should be provided and kept on
hand for both these purposes. We have not to-day a single gun that
could be put upon the ships Paris or New York of the International
Navigation Company or any other ship of our reserve Navy.

The manufacture of guns at the Washington Navy-Yard is proceeding
satisfactorily, and none of our new ships will be required to wait
for their guns or ordnance equipment.

An important order has been issued by the Secretary of the Navy
coordinating the duties of the several bureaus concerned in the
construction of ships. This order, it is believed, will secure to a
greater extent than has heretofore been possible the harmonious
action of these several bureaus and make the attainment of the best
results more certain.

During the past fiscal year there has been an unusual and pressing
demand in many quarters of the world for the presence of vessels to
guard American interests.

In January last, during the Brazilian insurrection, a large fleet was
concentrated in the harbor of Rio de Janeiro. The vigorous action of
Rear-Admiral Benham in protecting the personal and commercial rights
of our citizens during the disturbed conditions afforded results
which will, it is believed, have a far-reaching and wholesome
influence whenever in like circumstances it may become necessary for
our naval commanders to interfere on behalf of our people in foreign
ports.

The war now in progress between China and Japan has rendered it
necessary or expedient to dispatch eight vessels to those waters.

Both the Secretary of the Navy and the Secretary of the Treasury
recommend the transfer of the work of the Coast Survey proper to the
Navy Department. I heartily concur in this recommendation. Excluding
Alaska and a very small area besides, all the work of mapping and
charting our coasts has been completed. The hydrographic work, which
must be done over and over again by reason of the shifting and
varying depths of water consequent upon the action of streams and
tides, has heretofore been done under the direction of naval officers
in subordination to the Superintendent of the Coast Survey. There
seems to be no good reason why the Navy should not have entire charge
hereafter of such work, especially as the Hydrographic Office of the
Navy Department is now and has been for many years engaged in making
efficient maps entirely similar to those prepared by the Coast
Survey.

I feel it my imperative duty to call attention to the recommendation
of the Secretary in regard to the personnel of the line of the Navy.
The stagnation of promotion in this the vital branch of the service
is so great as to seriously impair its efficiency.

I consider it of the utmost importance that the young and middle-aged
officers should before the eve of retirement be permitted to reach a
grade entitling them to active and important duty.

The system adopted a few years ago regulating the employment of labor
at the navy-yards is rigidly upheld and has fully demonstrated its
usefulness and expediency. It is within the domain of civil-service
reform inasmuch as workmen are employed through a board of labor
selected at each navy-yard and are given work without reference to
politics and in the order of their application, preference, however,
being given to Army and Navy veterans and those having former
navy-yard experience.

Amendments suggested by experience have been made to the rules
regulating the system. Through its operation the work at our
navy-yards has been vastly improved in efficiency and the opportunity
to work has been honestly and fairly awarded to willing and competent
applicants.

It is hoped that if this system continues to be strictly adhered to
there will soon be as a natural consequence such an equalization of
party benefit as will remove all temptation to relax or abandon it.

The report of the Secretary of the Interior exhibits the situation of
the numerous and interesting branches of the public service connected
with his Department. I commend this report and the valuable
recommendations of the Secretary to the careful attention of the
Congress.

The public land disposed of during the year amounted to 10,406,100.77
acres, including 28,876.05 of Indian lands.

It is estimated that the public domain still remaining amounts to a
little more than 600,000,000 acres, including, however, about
360,000,000 acres in Alaska, as well as military reservations and
railroad and other selections of lands yet unadjudicated.

The total cash receipts from sale of lands amounted to $2,674,285.79,
including $91,981.03 received for Indian lands.

Thirty-five thousand patents were issued for agricultural lands, and
3,100 patents were issued to Indians on allotments of their holdings
in severalty, the land so allotted being inalienable by the Indian
allottees for a period of twenty-five years after patent.

There were certified and patented on account of railroad and
wagon-road grants during the year 865,556.45 acres of land, and at
the close of the year 29,000,000 acres were embraced in the lists of
selections made by railroad and wagon-road companies and awaited
settlement.

The selections of swamp lands and that taken as indemnity therefor
since the passage of the act providing for the same in 1849 amount to
nearly or quite 80,500,000 acres, of which 58,000,000 have been
patented to States. About 138,000 acres were patented during the last
year. Nearly 820,000 acres of school and education grants were
approved during the year, and at its close 1,250,363.81 acres
remained unadjusted.

It appears that the appropriation for the current year on account of
special service for the protection of the public lands and the timber
thereon is much less than those for previous years, and inadequate for
an efficient performance of the work. A larger sum of money than has
been appropriated during a number of years past on this account has
been returned to the Government as a result of the labors of those
employed in the particular service mentioned, and I hope it will not
be crippled by insufficient appropriation.

I fully indorse the recommendation of the Secretary that adequate
protection be provided for our forest reserves and that a
comprehensive forestry system be inaugurated. Such keepers and
superintendents as are necessary to protect the forests already
reserved should be provided.

I am of the opinion that there should be an abandonment of the policy
sanctioned by present laws under which the Government, for a very
small consideration, is rapidly losing title to immense tracts of
land covered with timber, which should be properly reserved as
permanent sources of timber supply.

The suggestion that a change be made in the manner of securing
surveys of the public lands is especially worthy of consideration. I
am satisfied that these surveys should be made by a corps of
competent surveyors under the immediate control and direction of the
Commissioner of the General Land Office.

An exceedingly important recommendation of the Secretary relates to
the manner in which contests and litigated cases growing out of
efforts to obtain Government land are determined. The entire
testimony upon which these controversies depend in all their stages
is taken before the local registers and receivers, and yet these
officers have no power to subpoena witnesses or to enforce their
attendance to testify. These cases, numbering three or four thousand
annually, are sent by the local officers to the Commissioner of the
General Land Office for his action. The exigencies of his other
duties oblige him to act upon the decisions of the registers and
receivers without an opportunity of thorough personal examination.
Nearly 2,000 of these cases are appealed annually from the
Commissioner to the Secretary of the Interior. Burdened with other
important administrative duties, his determination of these appeals
must be almost perfunctory and based upon the examination of others,
though this determination of the Secretary operates as a final
adjudication upon rights of very great importance.

I concur in the opinion that the Commissioner of the General Land
Office should be relieved from the duty of deciding litigated land
cases, that a nonpartisan court should be created to pass on such
cases, and that the decisions of this court should be final, at least
so far as the decisions of the Department are now final. The proposed
court might be given authority to certify questions of law in matters
of especial importance to the Supreme Court of the United States or
the court of appeals for the District of Columbia for decision. The
creation of such a tribunal would expedite the disposal of cases and
insure decisions of a more satisfactory character. The registers and
receivers who originally hear and decide these disputes should be
invested with authority to compel witnesses to attend and testify
before them.

Though the condition of the Indians shows a steady and healthy
progress, their situation is not satisfactory at all points. Some of
them to whom allotments of land have been made are found to be unable
or disinclined to follow agricultural pursuits or to otherwise
beneficially manage their land. This is especially true of the
Cheyennes and Arapahoes, who, as it appears by reports of their
agent, have in many instances never been located upon their
allotments, and in some cases do not even know where their allotments
are. Their condition has deteriorated. They are not self-supporting
and they live in camps and spend their time in idleness.

I have always believed that allotments of reservation lands to
Indians in severalty should be made sparingly, or at least slowly,
and with the utmost caution. In these days, when white agriculturists
and stock raisers of experience and intelligence find their lot a hard
one, we ought not to expect Indians, unless far advanced in
civilization and habits of industry, to support themselves on the
small tracts of land usually allotted to them.

If the self-supporting scheme by allotment fails, the wretched
pauperism of the allottees which results is worse than their original
condition of regulated dependence. It is evident that the evil
consequences of ill-advised allotment are intensified in cases where
the false step can not be retraced on account of the purchase by the
Government of reservation lands remaining after allotments are made
and the disposition of such remaining lands to settlers or purchasers
from the Government.

I am convinced that the proper solution of the Indian problem and the
success of every step taken in that direction depend to a very large
extent upon the intelligence and honesty of the reservation agents
and the interest they have in their work. An agent fitted for his
place can do much toward preparing the Indians under his charge for
citizenship and allotment of their lands, and his advice as to any
matter concerning their welfare will not mislead. An unfit agent will
make no effort to advance the Indians on his reservation toward
civilization or preparation for allotment of lands in severalty, and
his opinion as to their condition in this and other regards is
heedless and valueless.

The indications are that the detail of army officers as Indian agents
will result in improved management on the reservations.

Whenever allotments are made and any Indian on the reservation has
previously settled upon a lot and cultivated it or shown a
disposition to improve it in any way, such lot should certainly be
allotted to him, and this should be made plainly obligatory by
statute.

In the light of experience and considering the uncertainty of the
Indian situation and its exigencies in the future, I am not only
disposed to be very cautious in making allotments, but I incline to
agree with the Secretary of the Interior in the opinion that when
allotments are made the balance of reservation land remaining after
allotment, instead of being bought by the Government from the Indians
and opened for settlement with such scandals and unfair practices as
seem unavoidable, should remain for a time at least as common land or
be sold by the Government on behalf of the Indians in an orderly way
and at fixed prices, to be determined by its location and
desirability, and that the proceeds, less expenses, should be held in
trust for the benefit of the Indian proprietors.

The intelligent Indian-school management of the past year has been
followed by gratifying results. Efforts have been made to advance the
work in a sound and practical manner. Five institutes of Indian
teachers have been held during the year, and have proved very
beneficial through the views exchanged and methods discussed
particularly applicable to Indian education.

Efforts are being made in the direction of a gradual reduction of the
number of Indian contract schools, so that in a comparatively short
time they may give way altogether to Government schools, and it is
hoped that the change may be so gradual as to be perfected without
too great expense to the Government or undue disregard of investments
made by those who have established and are m