Speech Transcript:

 To the Congress of the United States:

The present assemblage of the legislative branch of our Government
occurs at a time when the interests of our people and the needs of
the country give especial prominence to the condition of our foreign
relations and the exigencies of our national finances. The reports of
the heads of the several administrative Departments of the Government
fully and plainly exhibit what has been accomplished within the scope
of their respective duties and present such recommendations for the
betterment of our country's condition as patriotic and intelligent
labor and observation suggest.

I therefore deem my executive duty adequately performed at this time
by presenting to the Congress the important phases of our situation
as related to our intercourse with foreign nations and a statement of
the financial problems which confront us, omitting, except as they are
related to these topics, any reference to departmental operations.

I earnestly invite, however, not only the careful consideration but
the severely critical scrutiny of the Congress and my
fellow-countrymen to the reports concerning these departmental
operations. If justly and fairly examined, they will furnish proof of
assiduous and painstaking care for the public welfare. I press the
recommendations they contain upon the respectful attention of those
charged with the duty of legislation, because I believe their
adoption would promote the people's good.

By amendatory tariff legislation in January last the Argentine
Republic, recognizing the value of the large market opened to the
free importation of its wools under our last tariff act, has admitted
certain products of the United States to entry at reduced duties. It
is pleasing to note that the efforts we have made to enlarge the
exchanges of trade on a sound basis of mutual benefit are in this
instance appreciated by the country from which our woolen factories
draw their needful supply of raw material.

The Missions boundary dispute between the Argentine Republic and
Brazil, referred to the President of the United States as arbitrator
during the term of my predecessor, and which was submitted to me for
determination, resulted in an award in favor of Brazil upon the
historical and documentary evidence presented, thus ending a
long-protracted controversy and again demonstrating the wisdom and
desirability of settling international boundary disputes by recourse
to friendly arbitration.

Negotiations are progressing for a revival of the United States and
Chilean Claims Commission, whose work was abruptly terminated last
year by the expiration of the stipulated time within which awards
could be made.

The resumption of specie payments by Chile is a step of great
interest and importance both in its direct consequences upon her own
welfare and as evincing the ascendency of sound financial principles
in one of the most influential of the South American Republics.

The close of the momentous struggle between China and Japan, while
relieving the diplomatic agents of this Government from the delicate
duty they undertook at the request of both countries of rendering
such service to the subjects of either belligerent within the
territorial limits of the other as our neutral position permitted,
developed a domestic condition in the Chinese Empire which has caused
much anxiety and called for prompt and careful attention. Either as a
result of a weak control by the central Government over the
provincial administrations, following a diminution of traditional
governmental authority under the stress of an overwhelming national
disaster, or as a manifestation upon good opportunity of the aversion
of the Chinese population to all foreign ways and undertakings, there
have occurred in widely separated provinces of China serious
outbreaks of the old fanatical spirit against foreigners, which,
unchecked by the local authorities, if not actually connived at by
them, have culminated in mob attacks on foreign missionary stations,
causing much destruction of property and attended with personal
injuries as well as loss of life.

Although but one American citizen was reported to have been actually
wounded, and although the destruction of property may have fallen
more heavily upon the missionaries of other nationalities than our
own, it plainly behooved this Government to take the most prompt and
decided action to guard against similar or perhaps more dreadful
calamities befalling the hundreds of American mission stations which
have grown up throughout the interior of China under the temperate
rule of toleration, custom, and imperial edict. The demands of the
United States and other powers for the degradation and punishment of
the responsible officials of the respective cities and provinces who
by neglect or otherwise had permitted uprisings, and for the adoption
of stern measures by the Emperor's Government for the protection of
the life and property of foreigners, were followed by the disgrace
and dismissal of certain provincial officials found derelict in duty
and the punishment by death of a number of those adjudged guilty of
actual participation in the outrages.

This Government also insisted that a special American commission
should visit the province where the first disturbances occurred for
the purpose of investigation. The latter commission, formed after
much opposition, has gone overland from Tientsin, accompanied by a
suitable Chinese escort, and by its demonstration of the readiness
and ability of our Government to protect its citizens will act, it is
believed, as a most influential deterrent of any similar outbreaks.

The energetic steps we have thus taken are all the more likely to
result in future safety to our citizens in China because the Imperial
Government is, I am persuaded, entirely convinced that we desire only
the liberty and protection of our own citizens and redress for any
wrongs they may have suffered, and that we have no ulterior designs
or objects, political or otherwise. China will not forget either our
kindly service to her citizens during her late war nor the further
fact that, while furnishing all the facilities at our command to
further the negotiation of a peace between her and Japan, we sought
no advantages and interposed no counsel.

The Governments of both China and Japan have, in special dispatches
transmitted through their respective diplomatic representatives,
expressed in a most pleasing manner their grateful appreciation of
our assistance to their citizens during the unhappy struggle and of
the value of our aid in paving the way to their resumption of
peaceful relations.

The customary cordial relations between this country and France have
been undisturbed, with the exception that a full explanation of the
treatment of John L. Waller by the expeditionary military authorities
of France still remains to be given. Mr. Waller, formerly United
States consul at Tamatav, remained in Madagascar after his term of
office expired, and was apparently successful in procuring business
concessions from the Hovas of greater or less value. After the
occupation of Tamatav and the declaration of martial law by the
French he was arrested upon various charges, among them that of
communicating military information to the enemies of France, was
tried and convicted by a military tribunal, and sentenced to twenty
years' imprisonment.

Following the course justified by abundant precedents, this
Government requested from that of France the record of the
proceedings of the French tribunal which resulted in Mr. Waller's
condemnation. This request has been complied with to the extent of
supplying a copy of the official record, from which appear the
constitution and organization of the court, the charges as
formulated, and the general course and result of the trial, and by
which it is shown that the accused was tried in open court and was
defended by counsel; but the evidence adduced in support of the
charges, which was not received by the French minister for foreign
affairs till the first week in October, has thus far been withheld,
the French Government taking the ground that its production in
response to our demand would establish a bad precedent. The efforts
of our ambassador to procure it, however, though impeded by recent
changes in the French ministry, have not been relaxed, and it is
confidently expected that some satisfactory solution of the matter
will shortly be reached. Meanwhile it appears that Mr. Waller's
confinement has every alleviation which the state of his health and
all the other circumstances of the case demand or permit.

In agreeable contrast to the difference above noted respecting a
matter of common concern, where nothing is sought except such a
mutually satisfactory outcome as the true merits of the case require,
is the recent resolution of the French Chambers favoring the
conclusion of a permanent treaty of arbitration between the two
countries.

An invitation has been extended by France to the Government and
people of the United States to participate in a great international
exposition at Paris in 1900 as a suitable commemoration of the close
of this the world's marvelous century of progress. I heartily
recommend its acceptance, together with such legislation as will
adequately provide for a due representation of this Government and
its people on the occasion.

Our relations with the States of the German Empire are in some
aspects typical of a condition of things elsewhere found in countries
whose productions and trade are similar to our own. The close
rivalries of competing industries; the influence of the delusive
doctrine that the internal development of a nation is promoted and
its wealth increased by a policy which, in undertaking to reserve its
home markets for the exclusive use of its own producers, necessarily
obstructs their sales in foreign markets and prevents free access to
the products of the world; the desire to retain trade in time-worn
ruts, regardless of the inexorable laws of new needs and changed
conditions of demand and supply, and our own halting tardiness in
inviting a freer exchange of commodities, and by this means
imperiling our footing in the external markets naturally open to us,
have created a situation somewhat injurious to American export
interests, not only in Germany, where they are perhaps most
noticeable, but in adjacent countries. The exports affected are
largely American cattle and other food products, the reason assigned
for unfavorable discrimination being that their consumption is
deleterious to the public health. This is all the more irritating in
view of the fact that no European state is as jealous of the
excellence and wholesomeness of its exported food supplies as the
United States, nor so easily able, on account of inherent soundness,
to guarantee those qualities.

Nor are these difficulties confined to our food products designed for
exportation. Our great insurance companies, for example, having built
up a vast business abroad and invested a large share of their gains
in foreign countries in compliance with the local laws and
regulations then existing, now find themselves within a narrowing
circle of onerous and unforeseen conditions, and are confronted by
the necessity of retirement from a field thus made unprofitable, if,
indeed, they are not summarily expelled, as some of them have lately
been from Prussia.

It is not to be forgotten that international trade can not be
one-sided. Its currents are alternating, and its movements should be
honestly reciprocal. Without this it almost necessarily degenerates
into a device to gain advantage or a contrivance to secure benefits
with only the semblance of a return. In our dealings with other
nations we ought to be open-handed and scrupulously fair. This should
be our policy as a producing nation, and it plainly becomes us as a
people who love generosity and the moral aspects of national good
faith and reciprocal forbearance.

These considerations should not, however, constrain us to submit to
unfair discrimination nor to silently acquiesce in vexatious
hindrances to the enjoyment of our share of the legitimate advantages
of proper trade relations. If an examination of the situation suggests
such measures on our part as would involve restrictions similar to
those from which we suffer, the way to such a course is easy. It
should, however, by no means be lightly entered upon, since the
necessity for the inauguration of such a policy would be regretted by
the best sentiment of our people and because it naturally and
logically might lead to consequences of the gravest character.

I take pleasure in calling to your attention the encomiums bestowed
on those vessels of our new Navy which took part in the notable
ceremony of the opening of the Kiel Canal. It was fitting that this
extraordinary achievement of the newer German nationality should be
celebrated in the presence of America's exposition of the latest
developments of the world' s naval energy.

Our relations with Great Britain, always intimate and important, have
demanded during the past year even a greater share of consideration
than is usual.

Several vexatious questions were left undetermined by the decision of
the Bering Sea Arbitration Tribunal. The application of the principles
laid down by that august body has not been followed by the results
they were intended to accomplish, either because the principles
themselves lacked in breadth and definiteness or because their
execution has been more or less imperfect. Much correspondence has
been exchanged between the two Governments on the subject of
preventing the exterminating slaughter of seals. The insufficiency of
the British patrol of Bering Sea under the regulations agreed on by
the two Governments has been pointed out, and yet only two British
ships have been on police duty during this season in those waters.

The need of a more effective enforcement of existing regulations as
well as the adoption of such additional regulations as experience has
shown to be absolutely necessary to carry out the intent of the award
have been earnestly urged upon the British Government, but thus far
without effective results. In the meantime the depletion of the seal
herds by means of pelagic hunting has so alarmingly progressed that
unless their slaughter is at once effectively checked their
extinction within a few years seems to be a matter of absolute
certainty.

The understanding by which the United States was to pay and Great
Britain to receive a lump sum of $425,000 in full settlement of all
British claims for damages arising from our seizure of British
sealing vessels unauthorized under the award of the Paris Tribunal of
Arbitration was not confirmed by the last Congress, which declined to
make the necessary appropriation. I am still of the opinion that this
arrangement was a judicious and advantageous one for the Government,
and I earnestly recommend that it be again considered and sanctioned.
If, however, this does not meet with the favor of Congress, it
certainly will hardly dissent from the proposition that the
Government is bound by every consideration of honor and good faith to
provide for the speedy adjustment of these claims by arbitration as
the only other alternative. A treaty of arbitration has therefore
been agreed upon, and will be immediately laid before the Senate, so
that in one of the modes suggested a final settlement may be
reached.

Notwithstanding that Great Britain originated the proposal to enforce
international rules for the prevention of collisions at sea, based on
the recommendations of the Maritime Conference of Washington, and
concurred in, suggesting March 11, 1895, as the date to be set by
proclamation for carrying these rules into general effect, Her
Majesty's Government, having encountered opposition on the part of
British shipping interests, announced its inability to accept that
date, which was consequently canceled. The entire matter is still in
abeyance, without prospect of a better condition in the near future.

The commissioners appointed to mark the international boundary in
Passamaquoddy Bay according to the description of the treaty of Ghent
have not yet fully agreed.

The completion of the preliminary survey of that Alaskan boundary
which follows the contour of the coast from the southernmost point of
Prince of Wales Island until it strikes the one hundred and
forty-first meridian at or near the summit of Mount St. Elias awaits
further necessary appropriation, which is urgently recommended. This
survey was undertaken under the provisions of the convention entered
into by this country and Great Britain July 22, 1892, and the
supplementary convention of February 3, 1894.

As to the remaining section of the Alaskan boundary, which follows
the one hundred and forty-first meridian northwardly from Mount St.
Elias to the Frozen Ocean, the settlement of which involves the
physical location of the meridian mentioned, no conventional
agreement has yet been made. The ascertainment of a given meridian at
a particular point is a work requiring much time and careful
observations and surveys. Such observations and surveys were
undertaken by the United States Coast and Geodetic Survey in 1890 and
1891, while similar work in the same quarters, under British auspices,
is believed to give nearly coincident results; but these surveys have
been independently conducted, and no international agreement to mark
those or any other parts of the one hundred and forty-first meridian
by permanent monuments has yet been made. In the meantime the valley
of the Yukon is becoming a highway through the hitherto unexplored
wilds of Alaska, and abundant mineral wealth has been discovered in
that region, especially at or near the junction of the boundary
meridian with the Yukon and its tributaries. In these circumstances
it is expedient, and, indeed, imperative, that the jurisdictional
limits of the respective Governments in this new region be speedily
determined. Her Britannic Majesty's Government has proposed a joint
delimitation of the one hundred and forty-first meridian by an
international commission of experts, which, if Congress will
authorize it and make due provision therefor, can be accomplished
with no unreasonable delay. It is impossible to overlook the vital
importance of continuing the work already entered upon and
supplementing it by further effective measures looking to the exact
location of this entire boundary line.

I call attention to the unsatisfactory delimitation of the respective
jurisdictions of the United States and the Dominion of Canada in the
Great Lakes at the approaches to the narrow waters that connect them.
The waters in question are frequented by fishermen of both
nationalities and their nets are there used. Owing to the uncertainty
and ignorance as to the true boundary, vexations disputes and
injurious seizures of boats and nets by Canadian cruisers often
occur, while any positive settlement thereof by an accepted standard
is not easily to be reached. A joint commission to determine the line
in those quarters on a practical basis, by measured courses following
range marks on shore, is a necessity for which immediate provision
should be made.

It being apparent that the boundary dispute between Great Britain and
the Republic of Venezuela concerning the limits of British Guiana was
approaching an acute stage, a definite statement of the interest and
policy of the United States as regards the controversy seemed to be
required both on its own account and in view of its relations with
the friendly powers directly concerned. In July last, therefore, a
dispatch was addressed to our ambassador at London for communication
to the British Government in which the attitude of the United States
was fully and distinctly set forth. The general conclusions therein
reached and formulated are in substance that the traditional and
established policy of this Government is firmly opposed to a forcible
increase by any European power of its territorial possessions on this
continent; that this policy is as well rounded in principle as it is
strongly supported by numerous precedents; that as a consequence the
United States is bound to protest against the enlargement of the area
of British Guiana in derogation of the rights and against the will of
Venezuela; that considering the disparity in strength of Great
Britain and Venezuela the territorial dispute between them can be
reasonably settled only by friendly and impartial arbitration, and
that the resort to such arbitration should include the whole
controversy, and is not satisfied if one of the powers concerned is
permitted to draw an arbitrary line through the territory in debate
and to declare that it will submit to arbitration only the portion
lying on one side of it. In view of these conclusions, the dispatch
in question called upon the British Government for a definite answer
to the question whether it would or would not submit the territorial
controversy between itself and Venezuela in its entirety to impartial
arbitration. The answer of the British Government has not yet been
received, but is expected shortly, when further communication on the
subject will probably be made to the Congress.

Early in January last an uprising against the Government of Hawaii
was promptly suppressed. Martial law was forthwith proclaimed and
numerous arrests were made of persons suspected of being in sympathy
with the Royalist party. Among these were several citizens of the
United States, who were either convicted by a military court and
sentenced to death, imprisonment, or fine or were deported without
trial. The United States, while denying protection to such as had
taken the Hawaiian oath of allegiance, insisted that martial law,
though altering the forms of justice, could not supersede justice
itself, and demanded stay of execution until the proceedings had been
submitted to this Government and knowledge obtained therefrom that our
citizens had received fair trial. The death sentences were
subsequently commuted or were remitted on condition of leaving the
islands. The cases of certain Americans arrested and expelled by
arbitrary order without formal charge or trial have had attention,
and in some instances have been found to justify remonstrance and a
claim for indemnity, which Hawaii has not thus far conceded.

Mr. Thurston, the Hawaiian minister, having furnished this Government
abundant reason for asking that he be recalled, that course was
pursued, and his successor has lately been received.

The deplorable lynching of several Italian laborers in Colorado was
naturally followed by international representations, and I am happy
to say that the best efforts of the State in which the outrages
occurred have been put forth to discover and punish the authors of
this atrocious crime. The dependent families of some of the
unfortunate victims invite by their deplorable condition gracious
provision for their needs.

These manifestations against helpless aliens may be traced through
successive stages to the vicious padroni system, which, unchecked by
our immigration and contract-labor statutes, controls these workers
from the moment of landing on our shores and farms them out in
distant and often rude regions, where their cheapening competition in
the fields of bread-winning toil brings them into collision with other
labor interests. While welcoming, as we should, those who seek our
shores to merge themselves in our body politic and win personal
competence by honest effort, we can not regard such assemblages of
distinctively alien laborers, hired out in the mass to the profit of
alien speculators and shipped hither and thither as the prospect of
gain may dictate, as otherwise than repugnant to the spirit of our
civilization, deterrent to individual advancement, and hindrances to
the building up of stable communities resting upon the wholesome
ambitions of the citizen and constituting the prime factor in the
prosperity and progress of our nation. If legislation can reach this
growing evil, it certainly should be attempted.

Japan has furnished abundant evidence of her vast gain in every trait
and characteristic that constitutes a nation's greatness. We have
reason for congratulation in the fact that the Government of the
United States, by the exchange of liberal treaty stipulations with
the new Japan, was the first to recognize her wonderful advance and
to extend to her the consideration and confidence due to her national
enlightenment and progressive character.

The boundary dispute which lately threatened to embroil Guatemala and
Mexico has happily yielded to pacific counsels, and its determination
has, by the joint agreement of the parties, been submitted to the
sole arbitration of the United States minister to Mexico.

The commission appointed under the convention of February 18, 1889,
to set new monuments along the boundary between the United States and
Mexico has completed its task.

As a sequel to the failure of a scheme for the colonization in Mexico
of negroes, mostly immigrants from Alabama under contract, a great
number of these helpless and suffering people, starving and smitten
with contagious disease, made their way or were assisted to the
frontier, where, in wretched plight, they were quarantined by the
Texas authorities. Learning of their destitute condition, I directed
rations to be temporarily furnished them through the War Department.
At the expiration of their quarantine they were conveyed by the
railway companies at comparatively nominal rates to their homes in
Alabama, upon my assurance, in the absence of any fund available for
the cost of their transportation, that I would recommend to Congress
an appropriation for its payment. I now strongly urge upon Congress
the propriety of making such an appropriation. It should be
remembered that the measures taken were dictated not only by sympathy
and humanity, but by a conviction that it was not compatible with the
dignity of this Government that so large a body of our dependent
citizens should be thrown for relief upon the charity of a
neighboring state.

In last year's message I narrated at some length the jurisdictional
questions then freshly arisen in the Mosquito Indian Strip of
Nicaragua. Since that time, by the voluntary act of the Mosquito
Nation, the territory reserved to them has been incorporated with
Nicaragua, the Indians formally subjecting themselves to be governed
by the general laws and regulations of the Republic instead of by
their own customs and regulations, and thus availing themselves of a
privilege secured to them by the treaty between Nicaragua and Great
Britain of January 28, 1860.

After this extension of uniform Nicaraguan administration to the
Mosquito Strip, the case of the British vice-consul, Hatch, and of
several of his countrymen who had been summarily expelled from
Nicaragua and treated with considerable indignity provoked a claim by
Great Britain upon Nicaragua for pecuniary indemnity, which, upon
Nicaragua's refusal to admit liability, was enforced by Great
Britain. While the sovereignty and jurisdiction of Nicaragua was in
no way questioned by Great Britain, the former's arbitrary conduct in
regard to British subjects furnished the ground for this proceeding.

A British naval force occupied without resistance the Pacific seaport
of Corinto, but was soon after withdrawn upon the promise that the sum
demanded would be paid. Throughout this incident the kindly offices of
the United States were invoked and were employed in favor of as
peaceful a settlement and as much consideration and indulgence toward
Nicaragua as were consistent with the nature of the case. Our efforts
have since been made the subject of appreciative and grateful
recognition by Nicaragua.

The coronation of the Czar of Russia at Moscow in May next invites
the ceremonial participation of the United States, and in accordance
with usage and diplomatic propriety our minister to the imperial
court has been directed to represent our Government on the occasion.

Correspondence is on foot touching the practice of Russian consuls
within the jurisdiction of the United States to interrogate citizens
as to their race and religious faith, and upon ascertainment thereof
to deny to Jews authentication of passports or legal documents for
use in Russia. Inasmuch as such a proceeding imposes a disability
which in the case of succession to property in Russia may be found to
infringe the treaty rights of our citizens, and which is an obnoxious
invasion of our territorial jurisdiction, it has elicited fitting
remonstrance, the result of which, it is hoped, will remove the cause
of complaint. The pending claims of sealing vessels of the United
States seized in Russian waters remain unadjusted. Our recent
convention with Russia establishing a modus vivendi as to imperial
jurisdiction in such cases has prevented further difficulty of this
nature.

The Russian Government has welcomed in principle our suggestion for a
modus vivendi, to embrace Great Britain and Japan, looking to the
better preservation of seal life in the North Pacific and Bering Sea
and the extension of the protected area defined by the Paris Tribunal
to all Pacific waters north of the thirty-fifth parallel. It is
especially noticeable that Russia favors prohibition of the use of
firearms in seal hunting throughout the proposed area and a longer
closed season for pelagic sealing.

In my last two annual messages I called the attention of the Congress
to the position we occupied as one of the parties to a treaty or
agreement by which we became jointly bound with England and Germany
to so interfere with the government and control of Samoa as in effect
to assume the management of its affairs. On the 9th day of May, 1894,
I transmitted to the Senate a special message, with accompanying
documents, giving information on the subject and emphasizing the
opinion I have at all times entertained, that our situation in this
matter was inconsistent with the mission and traditions of our
Government, in violation of the principles we profess, and in all its
phases mischievous and vexatious.

I again press this subject upon the attention of the Congress and ask
for such legislative action or expression as will lead the way to our
relief from obligations both irksome and unnatural.

Cuba is again gravely disturbed. An insurrection in some respects
more active than the last preceding revolt, which continued from 1868
to 1878, now exists in a large part of the eastern interior of the
island, menacing even some populations on the coast. Besides
deranging the commercial exchanges of the island, of which our
country takes the predominant share, this flagrant condition of
hostilities, by arousing sentimental sympathy and inciting
adventurous support among our people, has entailed earnest effort on
the part of this Government to enforce obedience to our neutrality
laws and to prevent the territory of the United States from being
abused as a vantage ground from which to aid those in arms against
Spanish sovereignty.

Whatever may be the traditional sympathy of our countrymen as
individuals with a people who seem to be struggling for larger
autonomy and greater freedom, deepened, as such sympathy naturally
must be, in behalf of our neighbors, yet the plain duty of their
Government is to observe in good faith the recognized obligations of
international relationship. The performance of this duty should not
be made more difficult by a disregard on the part of our citizens of
the obligations growing out of their allegiance to their country,
which should restrain them from violating as individuals the
neutrality which the nation of which they are members is bound to
observe in its relations to friendly sovereign states. Though neither
the warmth of our people's sympathy with the Cuban insurgents, nor our
loss and material damage consequent upon the futile endeavors thus far
made to restore peace and order, nor any shock our humane
sensibilities may have received from the cruelties which appear to
especially characterize this sanguinary and fiercely conducted war,
have in the least shaken the determination of the Government to
honestly fulfill every international obligation, yet it is to be
earnestly hoped on every ground that the devastation of armed
conflict may speedily be stayed and order and quiet restored to the
distracted island, bringing in their train the activity and thrift of
peaceful pursuits.

One notable instance of interference by Spain with passing American
ships has occurred. On March 8 last the Allianca, while bound from
Colon to New York, and following the customary track for vessels near
the Cuban shore, but outside the 3-mile limit, was fired upon by a
Spanish gunboat. Protest was promptly made by the United States
against this act as not being justified by a state of war, nor
permissible in respect of vessels on the usual paths of commerce, nor
tolerable in view of the wanton peril occasioned to innocent life and
property. The act was disavowed, with full expression of regret and
assurance of nonrecurrence of such just cause of complaint, while the
offending officer was relieved of his command. Military arrests of
citizens of the United States in Cuba have occasioned frequent
reclamations. Where held on criminal charges their delivery to the
ordinary civil jurisdiction for trial has been demanded and obtained
in conformity with treaty provisions, and where merely detained by
way of military precaution under a proclaimed state of siege, without
formulated accusation, their release or trial has been insisted upon.
The right of American consular officers in the island to prefer
protests and demands in such cases having been questioned by the
insular authority, their enjoyment of the privilege stipulated by
treaty for the consuls of Germany was claimed under the
most-favored-nation provision of our own convention and was promptly
recognized.

The long-standing demand of Antonio Maximo Mora against Spain has at
last been settled by the payment, on the 14th of September last, of
the sum originally agreed upon in liquidation of the claim. Its
distribution among the parties entitled to receive it has proceeded
as rapidly as the rights of those claiming the fund could be safely
determined.

The enforcement of differential duties against products of this
country exported to Cuba and Puerto Rico prompted the immediate claim
on our part to the benefit of the minimum tariff of Spain in return
for the most favorable treatment permitted by our laws as regards the
production of Spanish territories. A commercial arrangement was
concluded in January last securing the treatment so claimed.

Vigorous protests against excessive fines imposed on our ships and
merchandise by the customs officers of these islands for trivial
errors have resulted in the remission of such fines in instances
where the equity of the complaint was apparent, though the vexatious
practice has not been wholly discontinued.

Occurrences in Turkey have continued to excite concern. The reported
massacres of Christians in Armenia and the development there and in
other districts of a spirit of fanatic hostility to Christian
influences naturally excited apprehension for the safety of the
devoted men and women who, as dependents of the foreign missionary
societies in the United States, reside in Turkey under the guaranty
of law and usage and in the legitimate performance of their
educational and religious mission. No efforts have been spared in
their behalf, and their protection in person and property has been
earnestly and vigorously enforced by every means within our power.

I regret, however, that an attempt on our part to obtain better
information concerning the true condition of affairs in the disturbed
quarter of the Ottoman Empire by sending thither the United States
consul at Sivas to make investigation and report was thwarted by the
objections of the Turkish Government. This movement on our part was
in no sense meant as a gratuitous entanglement of the United States
in the so-called Eastern question nor as an officious interference
with the right and duty which belong by treaty to certain great
European powers calling for their intervention in political matters
affecting the good government and religious freedom of the
non-Mussulman subjects of the Sultan, but it arose solely from our
desire to have an accurate knowledge of the conditions in our efforts
to care for those entitled to our protection.

The presence of our naval vessels which are now in the vicinity of
the disturbed localities affords opportunities to acquire a measure
of familiarity with the condition of affairs and will enable us to
take suitable steps for the protection of any interests of our
countrymen within reach of our ships that might be found imperiled.

The Ottoman Government has lately issued an imperial irade exempting
forever from taxation an American college for girls at Scutari.
Repeated assurances have also been obtained by our envoy at
Constantinople that similar institutions maintained and administered
by our countrymen shall be secured in the enjoyment of all rights and
that our citizens throughout the Empire shall be protected.

The Government, however, in view of existing facts, is far from
relying upon such assurances as the limit of its duty. Our minister
has been vigilant and alert in affording all possible protection in
individual cases where danger threatened or safety was imperiled. We
have sent ships as far toward the points of actual disturbance as it
is possible for them to go, where they offer refuge to those obliged
to flee, and we have the promise of other powers which have ships in
the neighborhood that our citizens as well as theirs will be received
and protected on board those ships. On the demand of our minister
orders have been issued by the Sultan that Turkish soldiers shall
guard and escort to the coast American refugees.

These orders have been carried out, and our latest intelligence gives
assurance of the present personal safety of our citizens and
missionaries. Though thus far no lives of American citizens have been
sacrificed, there can be no doubt that serious loss and destruction of
mission property have resulted from riotous conflicts and outrageous
attacks.

By treaty several of the most powerful European powers have secured a
right and have assumed a duty not only in behalf of their own citizens
and in furtherance of their own interests, but as agents of the
Christian world. Their right is to enforce such conduct of Turkish
government as will restrain fanatical brutality, and if this fails
their duty is to so interfere as to insure against such dreadful
occurrences in Turkey as have lately shocked civilization. The powers
declare this right and this duty to be theirs alone, and it is
earnestly hoped that prompt and effective action on their part will
not be delayed.

The new consulates at Erzerum and Harpoot, for which appropriation
was made last session, have been provisionally filled by trusted
employees of the Department of State. These appointees, though now in
Turkey, have not yet received their exequaturs.

The arbitration of the claim of the Venezuela Steam Transportation
Company under the treaty of January 19, 1892, between the United
States and Venezuela, resulted in an award in favor of the claimant.

The Government has used its good offices toward composing the
differences between Venezuela on the one hand and France and Belgium
on the other growing out of the dismissal of the representatives of
those powers on the ground of a publication deemed offensive to
Venezuela. Although that dismissal was coupled with a cordial request
that other more personally agreeable envoys be sent in their stead, a
rupture of intercourse ensued and still continues.

In view of the growth of our interests in foreign countries and the
encouraging prospects for a general expansion of our commerce, the
question of an improvement in the consular service has increased in
importance and urgency. Though there is no doubt that the great body
of consular officers are rendering valuable services to the trade and
industries of the country, the need of some plan of appointment and
control which would tend to secure a higher average of efficiency can
not be denied.

The importance of the subject has led the Executive to consider what
steps might properly be taken without additional legislation to
answer the need of a better system of consular appointments. The
matter having been committed to the consideration of the Secretary of
State, in pursuance of his recommendations an Executive order was
issued on the 20th of September, 1895, by the terms of which it is
provided that after that date any vacancy in a consulate or
commercial agency with an annual salary or compensation from official
fees of not more than $2,500 or less than $1,000 should be filled
either by transfer or promotion from some other position under the
Department of State of a character tending to qualify the incumbent
for the position to be filled, or by the appointment of a person not
under the Department of State, but having previously served
thereunder and shown his capacity and fitness for consular duty, or
by the appointment of a person who, having been selected by the
President and sent to a board for examination, is found upon such
examination to be qualified for the position. Posts which pay less
than $1,000 being usually, on account of their small compensation,
filled by selection from residents of the locality, it was not deemed
practicable to put them under the new system.

The compensation of $2,500 was adopted as the maximum limit in the
classification for the reason that consular officers receiving more
than that sum are often charged with functions and duties scarcely
inferior in dignity and importance to those of diplomatic agents, and
it was therefore thought best to continue their selection in the
discretion of the Executive without subjecting them to examination
before a board. Excluding 71 places with compensation at present less
than $1,000 and 53 places above the maximum in compensation, the
number of positions remaining within the scope of the order is 196.
This number will undoubtedly be increased by the inclusion of
consular officers whose remuneration in fees, now less than $1,000,
will be augmented with the growth of our foreign commerce and a
return to more favorable business conditions.

In execution of the Executive order referred to the Secretary of
State has designated as a board to conduct the prescribed
examinations the Third Assistant Secretary of State, the Solicitor of
the Department of State, and the Chief of the Consular Bureau, and has
specified the subjects to which such examinations shall relate.

It is not assumed that this system will prove a full measure of
consular reform. It is quite probable that actual experience will
show particulars in which the order already issued may be amended and
demonstrate that for the best results appropriate legislation by
Congress is imperatively required.

In any event, these efforts to improve the consular service ought to
be immediately supplemented by legislation providing for consular
inspection. This has frequently been a subject of Executive
recommendation, and I again urge such action by Congress as will
permit the frequent and thorough inspection of consulates by officers
appointed for that purpose or by persons already in the diplomatic or
consular service. The expense attending such a plan would be
insignificant compared with its usefulness, and I hope the
legislation necessary to set it on foot will be speedily
forthcoming.

I am thoroughly convinced that in addition to their salaries our
ambassadors and ministers at foreign courts should be provided by the
Government with official residences. The salaries of these officers
are comparatively small and in most cases insufficient to pay, with
other necessary expenses, the cost of maintaining household
establishments in keeping with their important and delicate
functions. The usefulness of a nation's diplomatic representative
undeniably depends much upon the appropriateness of his surroundings,
and a country like ours, while avoiding unnecessary glitter and show,
should be certain that it does not suffer in its relations with
foreign nations through parsimony and shabbiness in its diplomatic
outfit. These considerations and the other advantages of having fixed
and somewhat permanent locations for our embassies would abundantly
justify the moderate expenditure necessary to carry out this
suggestion.

As we turn from a review of our foreign relations to the
contemplation of our national financial situation we are immediately
aware that we approach a subject of domestic concern more important
than any other that can engage our attention, and one at present in
such a perplexing and delicate predicament as to require prompt and
wise treatment.

We may well be encouraged to earnest effort in this direction when we
recall the steps already taken toward improving our economic and
financial situation and when we appreciate how well the way has been
prepared for further progress by an aroused and intelligent popular
interest in these subjects.

By command of the people a customs-revenue system designed for the
protection and benefit of favored classes at the expense of the great
mass of our countrymen, and which, while inefficient for the purpose
of revenue, curtailed our trade relations and impeded our entrance to
the markets of the world, has been superseded by a tariff policy which
in principle is based upon a denial of the right of the Government to
obstruct the avenues to our people's cheap living or lessen their
comfort and contentment for the sake of according especial advantages
to favorites, and which, while encouraging our intercourse and trade
with other nations, recognizes the fact that American self-reliance,
thrift, and ingenuity can build up our country's industries and
develop its resources more surely than enervating paternalism.

The compulsory purchase and coinage of silver by the Government,
unchecked and unregulated by business conditions and heedless of our
currency needs, which for more than fifteen years diluted our
circulating medium, undermined confidence abroad in our financial
ability, and at last culminated in distress and panic at home, has
been recently stopped by the repeal of the laws which forced this
reckless scheme upon the country.

The things thus accomplished, notwithstanding their extreme
importance and beneficent effects, fall far short of curing the
monetary evils from which we suffer as a result of long indulgence in
ill-advised financial expedients.

The currency denominated United States notes and commonly known as
greenbacks was issued in large volume during the late Civil War and
was intended originally to meet the exigencies of that period. It
will be seen by a reference to the debates in Congress at the time
the laws were passed authorizing the issue of these notes that their
advocates declared they were intended for only temporary use and to
meet the emergency of war. In almost if not all the laws relating to
them some provision was made contemplating their voluntary or
compulsory retirement. A large quantity of them, however, were kept
on foot and mingled with the currency of the country, so that at the
close of the year 1874 they amounted to $381,999,073.

Immediately after that date, and in January, 1875, a law was passed
providing for the resumption of specie payments, by which the
Secretary of the Treasury was required whenever additional
circulation was issued to national banks to retire United States
notes equal in amount to 80 per cent of such additional national-bank
circulation until such notes were reduced to $300,000,000. This law
further provided that on and after the 1st day of January, 1879, the
United States notes then outstanding should be redeemed in coin, and
in order to provide and prepare for such redemption the Secretary of
the Treasury was authorized not only to use any surplus revenues of
the Government, but to issue bonds of the United States and dispose
of them for coin and to use the proceeds for the purposes
contemplated by the statute.

In May, 1878, and before the date thus appointed for the redemption
and retirement of these notes, another statute was passed forbidding
their further cancellation and retirement. Some of them had, however,
been previously redeemed and canceled upon the issue of additional
national-bank circulation, as permitted by the law of 1875, so that
the amount outstanding at the time of the passage of the act
forbidding their further retirement was $346,681,016.

The law of 1878 did not stop at distinct prohibition, but contained
in addition the following express provision:

And when any of said notes may be redeemed or be received into the
Treasury under any law from any source whatever, and shall belong to
the United States, they shall not be retired, canceled, or destroyed,
but they shall be reissued and paid out again and kept in
circulation.

This was the condition of affairs on the 1st day of January, 1879,
which had been fixed upon four years before as the date for entering
upon the redemption and retirement of all these notes, and for which
such abundant means had been provided.

The Government was put in the anomalous situation of owing to the
holders of its notes debts payable in gold on demand which could
neither be retired by receiving such notes in discharge of
obligations due the Government nor canceled by actual payment in
gold. It was forced to redeem without redemption and to pay without
acquittance.

There had been issued and sold $95,500,000 of the bonds authorized by
the resumption act of 1875, the proceeds of which, together with other
gold in the Treasury, created a gold fund deemed sufficient to meet
the demands which might be made upon it for the redemption of the
outstanding United States notes. This fund, together with such other
gold as might be from time to time in the Treasury available for the
same purpose, has been since called our gold reserve, and
$100,000,000 has been regarded as an adequate amount to accomplish
its object. This fund amounted on the 1st day of January, 1879, to
$114,193,360, and though thereafter constantly fluctuating it did not
fall below that sum until July, 1892. In April, 1893, for the first
time since its establishment, this reserve amounted to less than
$100,000,000, containing at that date only $97,011,330.

In the meantime, and in July, 1890, an act had been passed directing
larger governmental monthly purchases of silver than had been
required under previous laws, and providing that in payment for such
silver Treasury notes of the United States should be issued payable
on demand in gold or silver coin, at the discretion of the Secretary
of the Treasury. It was, however, declared in the act to be" the
established policy of the United States to maintain the two metals on
a parity with each other upon the present legal ratio or such ratio as
may be provided by law." In view of this declaration it was not deemed
permissible for the Secretary of the Treasury to exercise the
discretion in terms conferred on him by refusing to pay gold on these
notes when demanded, because by such discrimination in favor of the
gold dollar the so-called parity of the two metals would be destroyed
and grave and dangerous consequences would be precipitated by
affirming or accentuating the constantly widening disparity between
their actual values under the existing ratio.

It thus resulted that the Treasury notes issued in payment of silver
purchases under the law of 1890 were necessarily treated as gold
obligations at the option of the holder. These notes on the 1st day
of November, 1893, when the law compelling the monthly purchase of
silver was repealed, amounted to more than $155,000,000. The notes of
this description now outstanding added to the United States notes
still undiminished by redemption or cancellation constitute a volume
of gold obligations amounting to nearly $500,000,000.

These obligations are the instruments which ever since we had a gold
reserve have been used to deplete it.

This reserve, as has been stated, had fallen in April, 1893, to
$97,111,330. It has from that time to the present, with very few and
unimportant upward movements, steadily decreased, except as it has
been temporarily replenished by the sale of bonds.

Among the causes for this constant and uniform shrinkage in this fund
may be mentioned the great falling off of exports under the operation
of the tariff law until recently in force, which crippled our
exchange of commodities with foreign nations and necessitated to some
extent the payment of our balances in gold; the unnatural infusion of
silver into our currency and the increasing agitation for its free
and unlimited coinage, which have created apprehension as to our
disposition or ability to continue gold payments; the consequent
hoarding of gold at home and the stoppage of investments of foreign
capital, as well as the return of our securities already sold abroad;
and the high rate of foreign exchange, which induced the shipment of
our gold to be drawn against as a matter of speculation.

In consequence of these conditions the gold reserve on the 1st day of
February, 1894, was reduced to $65,438,377, having lost more than
$31,000,000 during the preceding nine months, or since April, 1893.
Its replenishment being necessary and no other manner of
accomplishing it being possible, resort was had to the issue and sale
of bonds provided for by the resumption act of 1875. Fifty millions of
these bonds were sold, yielding $58,633,295.71, which was added to the
reserve fund of gold then on hand. As a result of this operation this
reserve, which had suffered constant and large withdrawals in the
meantime, stood on the 6th day of March, 1894, at the sum of
$107,446,802. Its depletion was, however, immediately thereafter so
accelerated that on the 30th day of June, 1894, it had fallen to
$64,873,025, thus losing by withdrawals more than $42,000,000 in five
months and dropping slightly below its situation when the sale of
$50,000,000 in bonds was effected for its replenishment.

This depressed condition grew worse, and on the 24th day of November,
1894, our gold reserve being reduced to $57,669,701, it became
necessary to again strengthen it.

This was done by another sale of bonds amounting to $50,000,000, from
which there was realized $58,538,500, with which the fund was
increased to $111,142,021 on the 4th day of December, 1894.

Again disappointment awaited the anxious hope for relief. There was
not even a lull in the exasperating withdrawals of gold. On the
contrary, they grew larger and more persistent than ever. Between the
4th day of December, 1894, and early in February, 1895, a period of
scarcely more than two months after the second reenforcement of our
gold reserve by the sale of bonds, it had lost by such withdrawals
more than $69,000,000 and had fallen to $41,340,181. Nearly
$43,000,000 had been withdrawn within the month immediately preceding
this situation.

In anticipation of impending trouble I had on the 28th day of
January, 1895, addressed a communication to the Congress fully
setting forth our difficulties and dangerous position and earnestly
recommending that authority be given the Secretary of the Treasury to
issue bonds bearing a low rate of interest, payable by their terms in
gold, for the purpose of maintaining a sufficient gold reserve and
also for the redemption and cancellation of outstanding United States
notes and the Treasury notes issued for the purchase of silver under
the law of 1890. This recommendation did not, however, meet with
legislative approval.

In February, 1895, therefore, the situation was exceedingly critical.
With a reserve perilously low and a refusal of Congressional aid,
everything indicated that the end of gold payments by the Government
was imminent. The results of prior bond issues had been exceedingly
unsatisfactory, and the large withdrawals of gold immediately
succeeding their public sale in open market gave rise to a reasonable
suspicion that a large part of the gold paid into the Treasury upon
such sales was promptly drawn out again by the presentation of United
States notes or Treasury notes, and found its way to the hands of
those who had only temporarily parted with it in the purchase of
bonds.

In this emergency, and in view of its surrounding perplexities, it
became entirely apparent to those upon whom the struggle for safety
was devolved not only that our gold reserve must, for the third time
in less than thirteen months, be restored by another issue and sale
of bonds bearing a high rate of interest and badly suited to the
purpose, but that a plan must be adopted for their disposition
promising better results than those realized on previous sales. An
agreement was therefore made with a number of financiers and bankers
whereby it was stipulated that bonds described in the resumption act
of 1875, payable in coin thirty years after their date, bearing
interest at the rate of 4 pet cent per annum, and amounting to about
$62,000,000, should be exchanged for gold, receivable by weight,
amounting to a little more than $65,000,000.

This gold was to be delivered in such installments as would complete
its delivery within about six months from the date of the contract,
and at least one-half of the amount was to be furnished from abroad.
It was also agreed by those supplying this gold that during the
continuance of the contract they would by every means in their power
protect the Government against gold withdrawals. The contract also
provided that if Congress would authorize their issue bonds payable
by their terms in gold and bearing interest at the rate of 3 per cent
per annum might within ten days be substituted at par for the 4 per
cent bonds described in the agreement.

On the day this contract was made its terms were communicated to
Congress by a special Executive message, in which it was stated that
more than $16,000,000 would be saved to the Government if gold bonds
bearing 3 per cent interest were authorized to be substituted for
those mentioned in the contract.

The Congress having declined to grant the necessary authority to
secure this saving, the contract, unmodified, was carried out,
resulting in a gold reserve amounting to $107,571,230 on the 8th day
of July, 1895. The performance of this contract not only restored the
reserve, but checked for a time the withdrawals of gold and brought on
a period of restored confidence and such peace and quiet in business
circles as were of the greatest possible value to every interest that
affects our people. I have never had the slightest misgiving
concerning the wisdom or propriety of this arrangement, and am quite
willing to answer for my full share of responsibility for its
promotion. I believe it averted a disaster the imminence of which
was, fortunately, not at the time generally understood by our
people.

Though the contract mentioned stayed for a time the tide of gold
withdrawal, its good results could not be permanent. Recent
withdrawals have reduced the reserve from $107,571,230 on the 8th day
of July, 1895, to $79,333,966. How long it will remain large enough to
render its increase unnecessary is only matter of conjecture, though
quite large withdrawals for shipment in the immediate future are
predicted in well-informed quarters. About $16,000,000 has been
withdrawn during the month of November.

The foregoing statement of events and conditions develops the fact
that after increasing our interest-bearing bonded indebtedness more
than $162,000,000 to save our gold reserve we are nearly where we
started, having now in such reserve $79,333,966, as against
$65,438,377 in February, 1894, when the first bonds were issued.

Though the amount of gold drawn from the Treasury appears to be very
large as gathered from the facts and figures herein presented, it
actually was much larger, considerable sums having been acquired by
the Treasury within the several periods stated without the issue of
bonds. On the 28th of January, 1895, it was reported by the Secretary
of the Treasury that more than $172,000,000 of gold had been withdrawn
for hoarding or shipment during the year preceding. He now reports
that from January 1, 1879, to July 14, 1890, a period of more than
eleven years, only a little over $28,000,000 was withdrawn, and that
between July 14, 1890, the date of the passage of the law for an
increased purchase of silver, and the 1st day of December, 1895, or
within less than five and a half years, there was withdrawn nearly
$375,000,000, making a total of more than $403,000,000 drawn from the
Treasury in gold since January 1, 1879, the date fixed in 1875 for the
retirement of the United States notes.

Nearly $327,000,000 of the gold thus withdrawn has been paid out on
these United States notes, and yet every one of the $346,000,000 is
still uncanceled and ready to do service in future gold depletions.

More than $76,000,000 in gold has since their creation in 1890 been
paid out from the Treasury upon the notes given on the purchase of
silver by the Government, and yet the whole, amounting to
$155,000,000, except a little more than $16,000,000 which has been
retired by exchanges for silver at the request of the holders,
remains outstanding and prepared to join their older and more
experienced allies in future raids upon the Treasury's gold reserve.

In other words, the Government has paid in gold more than nine-tenths
of its United States notes and still owes them all. It has paid in
gold about one-half of its notes given for silver purchases without
extinguishing by such payment one dollar of these notes.

When, added to all this, we are reminded that to carry on this
astound, lug financial scheme the Government has incurred a bonded
indebtedness of $95,500,000 in establishing a gold reserve and of
$162,315,400 in efforts to maintain it; that the annual interest
charge on such bonded indebtedness is more than $11,000,000; that a
continuance of our present course may result in further bond issues,
and that we have suffered or are threatened with all this for the
sake of supplying gold for foreign shipment or facilitating its
hoarding at home, a situation is exhibited which certainly ought to
arrest attention and provoke immediate legislative relief.

I am convinced the only thorough and practicable remedy for our
troubles is found in the retirement and cancellation of our United
States notes, commonly called greenbacks, and the outstanding
Treasury notes issued by the Government in payment of silver
purchases under the act of 1890.

I believe this could be quite readily accomplished by the exchange of
these notes for United States bonds, of small as well as large
denominations, bearing a low rate of interest. They should be
long-term bonds, thus increasing their desirability as investments,
and because their payment could be well postponed to a period far
removed from present financial burdens and perplexities, when with
increased prosperity and resources they would be more easily met.

To further insure the cancellation of these notes and also provide a
way by which gold may be added to our currency in lieu of them, a
feature in the plan should be an authority given to the Secretary of
the Treasury to dispose of the bonds abroad for gold if necessary to
complete the contemplated redemption and cancellation, permitting him
to use the proceeds of such bonds to take up and cancel any of the
notes that may be in the Treasury or that may be received by the
Government on any account.

The increase of our bonded debt involved in this plan would be amply
compensated by renewed activity and enterprise in all business
circles, the restored confidence at home, the reinstated faith in our
monetary strength abroad, and the stimulation of every interest and
industry that would follow the cancellation of the gold-demand
obligations now afflicting us. In any event, the bonds proposed would
stand for the extinguishment of a troublesome indebtedness, while in
the path we now follow there lurks the menace of unending bonds, with
our indebtedness still undischarged and aggravated in every feature.
The obligations necessary to fund this indebtedness would not equal
in amount those from which we have been relieved since 1884 by
anticipation and payment beyond the requirements of the sinking fund
out of our surplus revenues.

The currency withdrawn by the retirement of the United States notes
and Treasury notes, amounting to probably less than $486,000,000,
might be supplied by such gold as would be used on their retirement
or by an increase in the circulation of our national banks. Though
the aggregate capital of those now in existence amounts to more than
$664,000,000, their outstanding circulation based on bond security
amounts to only about $190,000,000. They are authorized to i