Speech Transcript:

To the Senate and House of Representatives:

It gives me pleasure to extend greeting to the Fifty-fifth Congress,
assembled in regular session at the seat of Government, with many of
whose Senators and Representatives I have been associated in the
legislative service. Their meeting occurs under felicitous
conditions, justifying sincere congratulation and calling for our
grateful acknowledgment to a beneficent Providence which has so
signally blessed and prospered us as a nation. Peace and good will
with all the nations of the earth continue unbroken.

A matter of genuine satisfaction is the growing feeling of fraternal
regard and unification of all sections of our country, the
incompleteness of which has too long delayed realization of the
highest blessings of the Union. The spirit of patriotism is universal
and is ever increasing in fervor. The public questions which now most
engross us are lifted far above either partisanship, prejudice, or
former sectional differences. They affect every part of our common
country alike and permit of no division on ancient lines. Questions
of foreign policy, of revenue, the soundness of the currency, the
inviolability of national obligations, the improvement of the public
service, appeal to the individual conscience of every earnest citizen
to whatever party he belongs or in whatever section of the country he
may reside.

The extra session of this Congress which closed during July last
enacted important legislation, and while its full effect has not yet
been realized, what it has already accomplished assures us of its
timeliness and wisdom. To test its permanent value further time will
be required, and the people, satisfied with its operation and results
thus far, are in no mind to withhold from it a fair trial.

Tariff legislation having been settled by the extra session of
Congress, the question next pressing for consideration is that of the
currency.

The work of putting our finances upon a sound basis, difficult as it
may seem, will appear easier when we recall the financial operations
of the Government since 1866. On the 30th day of June of that year we
had outstanding demand liabilities in the sum of $728,868,447.41. On
the 1st of January, 1879, these liabilities had been reduced to
$443,889,495.88. Of our interest-bearing obligations, the figures are
even more striking. On July 1, 1866, the principal of the
interest-bearing debt of the Government was $2,332,331,208. On the
1st day of July, 1893, this sum had been reduced to $585,137,100, or
an aggregate reduction of $1,747,294,108. The interest-bearing debt
of the United States on the 1st day of December, 1897, was
$847,365,620. The Government money now outstanding (December 1)
consists of $346,681,016 of United States notes, $107,793,280 of
Treasury notes issued by authority of the law of 1890, $384,963,504
of silver certificates, and $61,280,761 of standard silver dollars.

With the great resources of the Government, and with the honorable
example of the past before us, we ought not to hesitate to enter upon
a currency revision which will make our demand obligations less
onerous to the Government and relieve our financial laws from
ambiguity and doubt.

The brief review of what was accomplished from the close of the war
to 1893, makes unreasonable and groundless any distrust either of our
financial ability or soundness; while the situation from 1893 to 1897
must admonish Congress of the immediate necessity of so legislating
as to make the return of the conditions then prevailing impossible.

There are many plans proposed as a remedy for the evil. Before we can
find the true remedy we must appreciate the real evil. It is not that
our currency of every kind is not good, for every dollar of it is
good; good because the Government's pledge is out to keep it so, and
that pledge will not be broken. However, the guaranty of our purpose
to keep the pledge will be best shown by advancing toward its
fulfillment.

The evil of the present system is found in the great cost to the
Government of maintaining the parity of our different forms of money,
that is, keeping all of them at par with gold. We surely cannot be
longer heedless of the burden this imposes upon the people, even
under fairly prosperous conditions, while the past four years have
demonstrated that it is not only an expensive charge upon the
Government, but a dangerous menace to the National credit.

It is manifest that we must devise some plan to protect the
Government against bond issues for repeated redemptions. We must
either curtail the opportunity for speculation, made easy by the
multiplied redemptions of our demand obligations, or increase the
gold reserve for their redemption. We have $900,000,000 of currency
which the Government by solemn enactment has undertaken to keep at
par with gold. Nobody is obliged to redeem in gold but the
Government. The banks are not required to redeem in gold. The
Government is obliged to keep equal with gold all its outstanding
currency and coin obligations, while its receipts are not required to
be paid in gold. They are paid in every kind of money but gold, and
the only means by which the Government can with certainty get gold is
by borrowing. It can get it in no other way when it most needs it. The
Government without any fixed gold revenue is pledged to maintain gold
redemption, which it has steadily and faithfully done, and which,
under the authority now given, it will continue to do.

The law which requires the Government, after having redeemed its
United States notes, to pay them out again as current funds, demands
a constant replenishment of the gold reserve. This is especially so
in times of business panic and when the revenues are insufficient to
meet the expenses of the Government. At such times the Government has
no other way to supply its deficit and maintain redemption but through
the increase of its bonded debt, as during the Administration of my
predecessor, when $262,315,400 of four-and-a-half per cent bonds were
issued and sold and the proceeds used to pay the expenses of the
Government in excess of the revenues and sustain the gold reserve.
While it is true that the greater part of the proceeds of these bonds
were used to supply deficient revenues, a considerable portion was
required to maintain the gold reserve.

With our revenues equal to our expenses, there would be no deficit
requiring the issuance of bonds. But if the gold reserve falls below
$100,000,000, how will it be replenished except by selling more
bonds? Is there any other way practicable under existing law? The
serious question then is, Shall we continue the policy that has been
pursued in the past; that is, when the gold reserve reaches the point
of danger, issue more bonds and supply the needed gold, or shall we
provide other means to prevent these recurring drains upon the gold
reserve? If no further legislation is had and the policy of selling
bonds is to be continued, then Congress should give the Secretary of
the Treasury authority to sell bonds at long or short periods,
bearing a less rate of interest than is now authorized by law.

I earnestly recommend, as soon as the receipts of the Government are
quite sufficient to pay all the expenses of the Government, that when
any of the United States notes are presented for redemption in gold
and are redeemed in gold, such notes shall be kept and set apart, and
only paid out in exchange for gold. This is an obvious duty. If the
holder of the United States note prefers the gold and gets it from
the Government, he should not receive back from the Government a
United States note without paying gold in exchange for it. The reason
for this is made all the more apparent when the Government issues an
interest-bearing debt to provide gold for the redemption of United
States notes--a non-interest-bearing debt. Surely it should not pay
them out again except on demand and for gold. If they are put out in
any other way, they may return again to be followed by another bond
issue to redeem them--another interest-bearing debt to redeem a
non-interest-bearing debt.

In my view, it is of the utmost importance that the Government should
be relieved from the burden of providing all the gold required for
exchanges and export. This responsibility is alone borne by the
Government, without any of the usual and necessary banking powers to
help itself. The banks do not feel the strain of gold redemption. The
whole strain rests upon the Government, and the size of the gold
reserve in the Treasury has come to be, with or without reason, the
signal of danger or of security. This ought to be stopped.

If we are to have an era of prosperity in the country, with
sufficient receipts for the expenses of the Government, we may feel
no immediate embarrassment from our present currency; but the danger
still exists, and will be ever present, menacing us so long as the
existing system continues. And, besides, it is in times of adequate
revenues and business tranquillity that the Government should prepare
for the worst. We cannot avoid, without serious consequences, the wise
consideration and prompt solution of this question.

The Secretary of the Treasury has outlined a plan, in great detail,
for the purpose of removing the threatened recurrence of a depleted
gold reserve and save us from future embarrassment on that account.
To this plan I invite your careful consideration.

I concur with the Secretary of the Treasury in his recommendation
that National banks be allowed to issue notes to the face value of
the bonds which they have deposited for circulation, and that the tax
on circulating notes secured by deposit of such bonds be reduced to
one-half of one per cent per annum. I also join him in recommending
that authority be given for the establishment of National banks with
a minimum capital of $25,000. This will enable the smaller villages
and agricultural regions of the country to be supplied with currency
to meet their needs.

I recommend that the issue of National bank notes be restricted to
the denomination of ten dollars and upwards. If the suggestions I
have herein made shall have the approval of Congress, then I would
recommend that National banks be required to redeem their notes in
gold.

The most important problem with which this Government is now called
upon to deal pertaining to its foreign relations concerns its duty
toward Spain and the Cuban insurrection. Problems and conditions more
or less in common with those now existing have confronted this
Government at various times in the past. The story of Cuba for many
years has been one of unrest, growing discontent, an effort toward a
larger enjoyment of liberty and self-control, of organized resistance
to the mother country, of depression after distress and warfare, and
of ineffectual settlement to be followed by renewed revolt. For no
enduring period since the enfranchisement of the continental
possessions of Spain in the Western Continent has the condition of
Cuba or the policy of Spain toward Cuba not caused concern to the
United States.

The prospect from time to time that the weakness of Spain's hold upon
the island and the political vicissitudes and embarrassments of the
home Government might lead to the transfer of Cuba to a continental
power called forth between 1823 and 1860 various emphatic
declarations of the policy of the United States to permit no
disturbance of Cuba's connection with Spain unless in the direction
of independence or acquisition by us through purchase, nor has there
been any change of this declared policy since upon the part of the
Government.

The revolution which began in 1868 lasted for ten years despite the
strenuous efforts of the successive peninsular governments to
suppress it. Then as now the Government of the United States
testified its grave concern and offered its aid to put an end to
bloodshed in Cuba. The overtures made by General Grant were refused
and the war dragged on, entailing great loss of life and treasure and
increased injury to American interests, besides throwing enhanced
burdens of neutrality upon this Government. In 1878 peace was brought
about by the truce of Zanjon, obtained by negotiations between the
Spanish commander, Martinez de Campos, and the insurgent leaders.

The present insurrection broke out in February, 1895. It is not my
purpose at this time to recall its remarkable increase or to
characterize its tenacious resistance against the enormous forces
massed against it by Spain. The revolt and the efforts to subdue it
carried destruction to every quarter of the island, developing wide
proportions and defying the efforts of Spain for its suppression. The
civilized code of war has been disregarded, no less so by the
Spaniards than by the Cubans.

The existing conditions can not but fill this Government and the
American people with the gravest apprehension. There is no desire on
the part of our people to profit by the misfortunes of Spain. We have
only the desire to see the Cubans prosperous and contented, enjoying
that measure of self-control which is the inalienable right of man,
protected in their right to reap the benefit of the exhaustless
treasures of their country.

The offer made by my predecessor in April, 1896, tendering the
friendly offices of this Government, failed. Any mediation on our
part was not accepted. In brief, the answer read: "There is no
effectual way to pacify Cuba unless it begins with the actual
submission of the rebels to the mother country." Then only could
Spain act in the promised direction, of her own motion and after her
own plans.

The cruel policy of concentration was initiated February 16, 1896.
The productive districts controlled by the Spanish armies were
depopulated. The agricultural inhabitants were herded in and about
the garrison towns, their lands laid waste and their dwellings
destroyed. This policy the late cabinet of Spain justified as a
necessary measure of war and as a means of cutting off supplies from
the insurgents. It has utterly failed as a war measure. It was not
civilized warfare. It was extermination.

Against this abuse of the rights of war I have felt constrained on
repeated occasions to enter the firm and earnest protest of this
Government. There was much of public condemnation of the treatment of
American citizens by alleged illegal arrests and long imprisonment
awaiting trial or pending protracted judicial proceedings. I felt it
my first duty to make instant demand for the release or speedy trial
of all American citizens under arrest. Before the change of the
Spanish cabinet in October last twenty-two prisoners, citizens of the
United States, had been given their freedom.

For the relief of our own citizens suffering because of the conflict
the aid of Congress was sought in a special message, and under the
appropriation of May 24, 1897, effective aid has been given to
American citizens in Cuba, many of them at their own request having
been returned to the United States.

The instructions given to our new minister to Spain before his
departure for his post directed him to impress upon that Government
the sincere wish of the United States to lend its aid toward the
ending of the war in Cuba by reaching a peaceful and lasting result,
just and honorable alike to Spain and to the Cuban people. These
instructions recited the character and duration of the contest, the
widespread losses it entails, the burdens and restraints it imposes
upon us, with constant disturbance of national interests, and the
injury resulting from an indefinite continuance of this state of
things. It was stated that at this juncture our Government was
constrained to seriously inquire if the time was not ripe when Spain
of her own volition, moved by her own interests and every sentiment
of humanity, should put a stop to this destructive war and make
proposals of settlement honorable to herself and just to her Cuban
colony. It was urged that as a neighboring nation, with large
interests in Cuba, we could be required to wait only a reasonable
time for the mother country to establish its authority and restore
peace and order within the borders of the island; that we could not
contemplate an indefinite period for the accomplishment of this
result.

No solution was proposed to which the slightest idea of humiliation
to Spain could attach, and, indeed, precise proposals were withheld
to avoid embarrassment to that Government. All that was asked or
expected was that some safe way might be speedily provided and
permanent peace restored. It so chanced that the consideration of
this offer, addressed to the same Spanish administration which had
declined the tenders of my predecessor, and which for more than two
years had poured men and treasure into Cuba in the fruitless effort
to suppress the revolt, fell to others. Between the departure of
General Woodford, the new envoy, and his arrival in Spain the
statesman who had shaped the policy of his country fell by the hand
of an assassin, and although the cabinet of the late premier still
held office and received from our envoy the proposals he bore, that
cabinet gave place within a few days thereafter to a new
administration, under the leadership of Sagasta.

The reply to our note was received on the 23d day of October. It is
in the direction of a better understanding. It appreciates the
friendly purposes of this Government. It admits that our country is
deeply affected by the war in Cuba and that its desires for peace are
just. It declares that the present Spanish government is bound by
every consideration to a change of policy that should satisfy the
United States and pacify Cuba within a reasonable time. To this end
Spain has decided to put into effect the political reforms heretofore
advocated by the present premier, without halting for any
consideration in the path which in its judgment leads to peace. The
military operations, it is said, will continue, but will be humane
and conducted with all regard for private rights, being accompanied
by political action leading to the autonomy of Cuba while guarding
Spanish sovereignty. This, it is claimed, will result in investing
Cuba with a distinct personality, the island to be governed by an
executive and by a local council or chamber, reserving to Spain the
control of the foreign relations, the army and navy, and the judicial
administration. To accomplish this the present government proposes to
modify existing legislation by decree, leaving the Spanish Cortes,
with the aid of Cuban senators and deputies, to solve the economic
problem and properly distribute the existing debt.

In the absence of a declaration of the measures that this Government
proposes to take in carrying out its proffer of good offices, it
suggests that Spain be left free to conduct military operations and
grant political reforms, while the United States for its part shall
enforce its neutral obligations and cut off the assistance which it
is asserted the insurgents receive from this country. The supposition
of an indefinite prolongation of the war is denied. It is asserted
that the western provinces are already well-nigh reclaimed, that the
planting of cane and tobacco therein has been resumed, and that by
force of arms and new and ample reforms very early and complete
pacification is hoped for.

The immediate amelioration of existing conditions under the new
administration of Cuban affairs is predicted, and therewithal the
disturbance and all occasion for any change of attitude on the part
of the United States. Discussion of the question of the international
duties and responsibilities of the United States as Spain understands
them is presented, with an apparent disposition to charge us with
failure in this regard. This charge is without any basis in fact. It
could not have been made if Spain had been cognizant of the constant
efforts this Government has made, at the cost of millions and by the
employment of the administrative machinery of the nation at command,
to perform its full duty according to the law of nations. That it has
successfully prevented the departure of a single military expedition
or armed vessel from our shores in violation of our laws would seem
to be a sufficient answer. But of this aspect of the Spanish note it
is not necessary to speak further now. Firm in the conviction of a
wholly performed obligation, due response to this charge has been
made in diplomatic course.

Throughout all these horrors and dangers to our own peace this
Government has never in any way abrogated its sovereign prerogative
of reserving to itself the determination of its policy and course
according to its own high sense of right and in consonance with the
dearest interests and convictions of our own people should the
prolongation of the strife so demand.

Of the untried measures there remain only: Recognition of the
insurgents as belligerents; recognition of the independence of Cuba;
neutral intervention to end the war by imposing a rational compromise
between the contestants, and intervention in favor of one or the other
party. I speak not of forcible annexation, for that can not be thought
of. That, by our code of morality, would be criminal aggression.

Recognition of the belligerency of the Cuban insurgents has often
been canvassed as a possible, if not inevitable, step both in regard
to the previous ten years' struggle and during the present war. I am
not unmindful that the two Houses of Congress in the spring of 1896
expressed the opinion by concurrent resolution that a condition of
public war existed requiring or justifying the recognition of a state
of belligerency in Cuba, and during the extra session the Senate voted
a joint resolution of like import, which, however, was not brought to
a vote in the House of Representatives. In the presence of these
significant expressions of the sentiment of the legislative branch it
behooves the Executive to soberly consider the conditions under which
so important a measure must needs rest for justification. It is to be
seriously considered whether the Cuban insurrection possesses beyond
dispute the attributes of statehood, which alone can demand the
recognition of belligerency in its favor. Possession, in short, of
the essential qualifications of sovereignty by the insurgents and the
conduct of the war by them according to the received code of war are
no less important factors toward the determination of the problem of
belligerency than are the influences and consequences of the struggle
upon the internal polity of the recognizing state.

The wise utterances of President Grant in his memorable message of
December 7, 1875, are signally relevant to the present situation in
Cuba, and it may be wholesome now to recall them. At that time a
ruinous conflict had for seven years wasted the neighboring island.
During all those years an utter disregard of the laws of civilized
warfare and of the just demands of humanity, which called forth
expressions of condemnation from the nations of Christendom,
continued unabated. Desolation and ruin pervaded that productive
region, enormously affecting the commerce of all commercial nations,
but that of the United States more than any other by reason of
proximity and larger trade and intercourse. At that juncture General
Grant uttered these words, which now, as then, sum up the elements of
the problem: A recognition of the independence of Cuba being, in my
opinion, impracticable and indefensible, the question which next
presents itself is that of the recognition of belligerent rights in
the parties to the contest.

In a former message to Congress I had occasion to consider this
question, and reached the conclusion that the conflict in Cuba,
dreadful and devastating as were its incidents, did not rise to the
fearful dignity of war. It is possible that the acts of foreign
powers, and even acts of Spain herself, of this very nature, might be
pointed to in defense of such recognition. But now, as in its past
history, the United States should carefully avoid the false lights
which might lead it into the mazes of doubtful law and of
questionable propriety, and adhere rigidly and sternly to the rule,
which has been its guide, of doing only that which is right and
honest and of good report. The question of according or of
withholding rights of belligerency must be judged in every case in
view of the particular attending facts. Unless justified by
necessity, it is always, and justly, regarded as an unfriendly act
and a gratuitous demonstration of moral support to the rebellion. It
is necessary, and it is required, when the interests and rights of
another government or of its people are so far affected by a pending
civil conflict as to require a definition of its relations to the
parties thereto. But this conflict must be one which will be
recognized in the sense of international law as war. Belligerence,
too, is a fact. The mere existence of contending armed bodies and
their occasional conflicts do not constitute war in the sense
referred to. Applying to the existing condition of affairs in Cuba
the tests recognized by publicists and writers on international law,
and which have been observed by nations of dignity, honesty, and
power when free from sensitive or selfish and unworthy motives, I
fail to find in the insurrection the existence of such a substantial
political organization, real, palpable, and manifest to the world,
having the forms and capable of the ordinary functions of government
toward its own people and to other states, with courts for the
administration of justice, with a local habitation, possessing such
organization of force, such material, such occupation of territory,
as to take the contest out of the category of a mere rebellious
insurrection or occasional skirmishes and place it on the terrible
footing of war, to which a recognition of belligerency would aim to
elevate it. The contest, moreover, is solely on land; the
insurrection has not possessed itself of a single seaport whence it
may send forth its flag, nor has it any means of communication with
foreign powers except through the military lines of its adversaries.
No apprehension of any of those sudden and difficult complications
which a war upon the ocean is apt to precipitate upon the vessels,
both commercial and national, and upon the consular officers of other
powers calls for the definition of their relations to the parties to
the contest. Considered as a question of expediency, I regard the
accordance of belligerent rights still to be as unwise and premature
as I regard it to be, at present, indefensible as a measure of right.
Such recognition entails upon the country according the rights which
flow from it difficult and complicated duties, and requires the
exaction from the contending parties of the strict observance of
their rights and obligations. It confers the right of search upon the
high seas by vessels of both parties; it would subject the carrying of
arms and munitions of war, which now may be transported freely and
without interruption in the vessels of the United States, to
detention and to possible seizure; it would give rise to countless
vexatious questions, would release the parent Government from
responsibility for acts done by the insurgents, and would invest
Spain with the right to exercise the supervision recognized by our
treaty of 1795 over our commerce on the high seas, a very large part
of which, in its traffic between the Atlantic and the Gulf States and
between all of them and the States on the Pacific, passes through the
waters which wash the shores of Cuba. The exercise of this
supervision could scarce fail to lead, if not to abuses, certainly to
collisions perilous to the peaceful relations of the two States. There
can be little doubt to what result such supervision would before long
draw this nation. It would be unworthy of the United States to
inaugurate the possibilities of such result by measures of
questionable right or expediency or by any indirection. Turning to
the practical aspects of a recognition of belligerency and reviewing
its inconveniences and positive dangers, still further pertinent
considerations appear. In the code of nations there is no such thing
as a naked recognition of belligerency, unaccompanied by the
assumption of international neutrality. Such recognition, without
more, will not confer upon either party to a domestic conflict a
status not theretofore actually possessed or affect the relation of
either party to other states. The act of recognition usually takes
the form of a solemn proclamation of neutrality, which recites the de
facto condition of belligerency as its motive. It announces a domestic
law of neutrality in the declaring state. It assumes the international
obligations of a neutral in the presence of a public state of war. It
warns all citizens and others within the jurisdiction of the
proclaimant that they violate those rigorous obligations at their own
peril and can not expect to be shielded from the consequences. The
right of visit and search on the seas and seizure of vessels and
cargoes and contraband of war and good prize under admiralty law must
under international law be admitted as a legitimate consequence of a
proclamation of belligerency. While according the equal belligerent
rights defined by public law to each party in our ports disfavors
would be imposed on both, which, while nominally equal, would weigh
heavily in behalf of Spain herself. Possessing a navy and controlling
the ports of Cuba, her maritime rights could be asserted not only for
the military investment of the island, but up to the margin of our
own territorial waters, and a condition of things would exist for
which the Cubans within their own domain could not hope to create a
parallel, while its creation through aid or sympathy from within our
domain would be even more impossible than now, with the additional
obligations of international neutrality we would perforce assume.

The enforcement of this enlarged and onerous code of neutrality would
only be influential within our own jurisdiction by land and sea and
applicable by our own instrumentalities. It could impart to the
United States no jurisdiction between Spain and the insurgents. It
would give the United States no right of intervention to enforce the
conduct of the strife within the paramount authority of Spain
according to the international code of war.

For these reasons I regard the recognition of the belligerency of the
Cuban insurgents as now unwise, and therefore inadmissible. Should
that step hereafter be deemed wise as a measure of right and duty,
the Executive will take it.

Intervention upon humanitarian grounds has been frequently suggested
and has not failed to receive my most anxious and earnest
consideration. But should such a step be now taken, when it is
apparent that a hopeful change has supervened in the policy of Spain
toward Cuba? A new government has taken office in the mother country.
It is pledged in advance to the declaration that all the effort in the
world can not suffice to maintain peace in Cuba by the bayonet; that
vague promises of reform after subjugation afford no solution of the
insular problem; that with a substitution of commanders must come a
change of the past system of warfare for one in harmony with a new
policy, which shall no longer aim to drive the Cubans to the
"horrible alternative of taking to the thicket or succumbing in
misery;" that reforms must be instituted in accordance with the needs
and circumstances of the time, and that these reforms, while designed
to give full autonomy to the colony and to create a virtual entity
and self-controlled administration, shall yet conserve and affirm the
sovereignty of Spain by a just distribution of powers and burdens upon
a basis of mutual interest untainted by methods of selfish
expediency.

The first acts of the new government lie in these honorable paths.
The policy of cruel rapine and extermination that so long shocked the
universal sentiment of humanity has been reversed. Under the new
military commander a broad clemency is proffered. Measures have
already been set on foot to relieve the horrors of starvation. The
power of the Spanish armies, it is asserted, is to be used not to
spread ruin and desolation, but to protect the resumption of peaceful
agricultural pursuits and productive industries. That past methods are
futile to force a peace by subjugation is freely admitted, and that
ruin without conciliation must inevitably fail to win for Spain the
fidelity of a contented dependency.

Decrees in application of the foreshadowed reforms have already been
promulgated. The full text of these decrees has not been received,
but as furnished in a telegraphic summary from our minister are: All
civil and electoral rights of peninsular Spaniards are, in virtue of
existing constitutional authority, forthwith extended to colonial
Spaniards. A scheme of autonomy has been proclaimed by decree, to
become effective upon ratification by the Cortes. It creates a Cuban
parliament, which, with the insular executive, can consider and vote
upon all subjects affecting local order and interests, possessing
unlimited powers save as to matters of state, war, and the navy, as
to which the Governor-General acts by his own authority as the
delegate of the central Government. This parliament receives the oath
of the Governor-General to preserve faithfully the liberties and
privileges of the colony, and to it the colonial secretaries are
responsible. It has the right to propose to the central Government,
through the Governor-General, modifications of the national charter
and to invite new projects of law or executive measures in the
interest of the colony.

Besides its local powers, it is competent, first, to regulate
electoral registration and procedure and prescribe the qualifications
of electors and the manner of exercising suffrage; second, to organize
courts of justice with native judges from members of the local bar;
third, to frame the insular budget, both as to expenditures and
revenues, without limitation of any kind, and to set apart the
revenues to meet the Cuban share of the national budget, which latter
will be voted by the national Cortes with the assistance of Cuban
senators and deputies; fourth, to initiate or take part in the
negotiations of the national Government for commercial treaties which
may affect Cuban interests; fifth, to accept or reject commercial
treaties which the national Government may have concluded without the
participation of the Cuban government; sixth, to frame the colonial
tariff, acting in accord with the peninsular Government in scheduling
articles of mutual commerce between the mother country and the
colonies. Before introducing or voting upon a bill the Cuban
government or the chambers will lay the project before the central
Government and hear its opinion thereon, all the correspondence in
such regard being made public. Finally, all conflicts of jurisdiction
arising between the different municipal, provincial, and insular
assemblies, or between the latter and the insular executive power,
and which from their nature may not be referable to the central
Government for decision, shall be submitted to the courts.

That the government of Sagasta has entered upon a course from which
recession with honor is impossible can hardly be questioned; that in
the few weeks it has existed it has made earnest of the sincerity of
its professions is undeniable. I shall not impugn its sincerity, nor
should impatience be suffered to embarrass it in the task it has
undertaken. It is honestly due to Spain and to our friendly relations
with Spain that she should be given a reasonable chance to realize her
expectations and to prove the asserted efficacy of the new order of
things to which she stands irrevocably committed. She has recalled
the commander whose brutal orders inflamed the American mind and
shocked the civilized world. She has modified the horrible order of
concentration and has undertaken to care for the helpless and permit
those who desire to resume the cultivation of their fields to do so,
and assures them of the protection of the Spanish Government in their
lawful occupations. She has just released the Competitor prisoners,
heretofore sentenced to death, and who have been the subject of
repeated diplomatic correspondence during both this and the preceding
Administration.

Not a single American citizen is now in arrest or confinement in Cuba
of whom this Government has any knowledge. The near future will
demonstrate whether the indispensable condition of a righteous peace,
just alike to the Cubans and to Spain as well as equitable to all our
interests so intimately involved in the welfare of Cuba, is likely to
be attained. If not, the exigency of further and other action by the
United States will remain to be taken. When that time comes that
action will be determined in the line of indisputable right and duty.
It will be faced, without misgiving or hesitancy in the light of the
obligation this Government owes to itself, to the people who have
confided to it the protection of their interests and honor, and to
humanity.

Sure of the right, keeping free from all offense ourselves, actuated
only by upright and patriotic considerations, moved neither by
passion nor selfishness, the Government will continue its watchful
care over the rights and property of American citizens and will abate
none of its efforts to bring about by peaceful agencies a peace which
shall be honorable and enduring. If it shall hereafter appear to be a
duty imposed by our obligations to ourselves, to civilization and
humanity to intervene with force, it shall be without fault on our
part and only because the necessity for such action will be so clear
as to command the support and approval of the civilized world.

By a special message dated the 16th day of June last, I laid before
the Senate a treaty signed that day by the plenipotentiaries of the
United States and of the Republic of Hawaii, having for its purpose
the incorporation of the Hawaiian Islands as an integral part of the
United States and under its sovereignty. The Senate having removed
the injunction of secrecy, although the treaty is still pending
before that body, the subject may be properly referred to in this
Message because the necessary action of the Congress is required to
determine by legislation many details of the eventual union should
the fact of annexation be accomplished, as I believe it should be.

While consistently disavowing from a very early period any aggressive
policy of absorption in regard to the Hawaiian group, a long series of
declarations through three-quarters of a century has proclaimed the
vital interest of the United States in the independent life of the
Islands and their intimate commercial dependence upon this country.
At the same time it has been repeatedly asserted that in no event
could the entity of Hawaiian statehood cease by the passage of the
Islands under the domination or influence of another power than the
United States. Under these circumstances, the logic of events
required that annexation, heretofore offered but declined, should in
the ripeness of time come about as the natural result of the
strengthening ties that bind us to those Islands, and be realized by
the free will of the Hawaiian State.

That treaty was unanimously ratified without amendment by the Senate
and President of the Republic of Hawaii on the 10th of September
last, and only awaits the favorable action of the American Senate to
effect the complete absorption of the Islands into the domain of the
United States. What the conditions of such a union shall be, the
political relation thereof to the United States, the character of the
local administration, the quality and degree of the elective franchise
of the inhabitants, the extension of the federal laws to the territory
or the enactment of special laws to fit the peculiar condition
thereof, the regulation if need be of the labor system therein, are
all matters which the treaty has wisely relegated to the Congress.

If the treaty is confirmed as every consideration of dignity and
honor requires, the wisdom of Congress will see to it that, avoiding
abrupt assimilation of elements perhaps hardly yet fitted to share in
the highest franchises of citizenship, and having due regard to the
geographical conditions, the most just provisions for self-rule in
local matters with the largest political liberties as an integral
part of our Nation will be accorded to the Hawaiians. No less is due
to a people who, after nearly five years of demonstrated capacity to
fulfill the obligations of self-governing statehood, come of their
free will to merge their destinies in our body-politic.

The questions which have arisen between Japan and Hawaii by reason of
the treatment of Japanese laborers emigrating to the Islands under the
Hawaiian-Japanese convention of 1888, are in a satisfactory stage of
settlement by negotiation. This Government has not been invited to
mediate, and on the other hand has sought no intervention in that
matter, further than to evince its kindliest disposition toward such
a speedy and direct adjustment by the two sovereign States in
interest as shall comport with equity and honor. It is gratifying to
learn that the apprehensions at first displayed on the part of Japan
lest the cessation of Hawaii's national life through annexation might
impair privileges to which Japan honorably laid claim, have given
place to confidence in the uprightness of this Government, and in the
sincerity of its purpose to deal with all possible ulterior questions
in the broadest spirit of friendliness.

As to the representation of this Government to Nicaragua, Salvador,
and Costa Rica, I have concluded that Mr. William L. Merry, confirmed
as minister of the United States to the States of Nicaragua, Salvador
and Costa Rica, shall proceed to San Jose, Costa Rica, and there
temporarily establish the headquarters of the United States to those
three States. I took this action for what I regarded as the paramount
interests of this country. It was developed upon an investigation by
the Secretary of State that the Government of Nicaragua, while not
unwilling to receive Mr. Merry in his diplomatic quality, was unable
to do so because of the compact concluded June 20, 1895, whereby that
Republic and those of Salvador and Honduras, forming what is known as
the Greater Republic of Central America, had surrendered to the
representative Diet thereof their right to receive and send
diplomatic agents. The Diet was not willing to accept him because he
was not accredited to that body. I could not accredit him to that
body because the appropriation law of Congress did not permit it. Mr.
Baker, the present minister at Managua, has been directed to present
his letters of recall.

Mr. W. Godfrey Hunter has likewise been accredited to the Governments
of Guatemala and Honduras, the same as his predecessor. Guatemala is
not a member of the Greater Republic of Central America, but Honduras
is. Should this latter Government decline to receive him, he has been
instructed to report this fact to his Government and await its
further instructions.

A subject of large importance to our country, and increasing
appreciation on the part of the people, is the completion of the
great highway of trade between the Atlantic and Pacific, known as the
Nicaragua Canal. Its utility and value to American commerce is
universally admitted. The Commission appointed under date of July 24
last "to continue the surveys and examinations authorized by the act
approved March 2, 1895," in regard to "the proper route, feasibility,
and cost of construction of the Nicaragua Canal, with a view of making
complete plans for the entire work of construction of such canal," is
now employed in the undertaking. In the future I shall take occasion
to transmit to Congress the report of this Commission, making at the
same time such further suggestions as may then seem advisable.

Under the provisions of the act of Congress approved March 3, 1897,
for the promotion of an international agreement respecting
bimetallism, I appointed on the 14th day of April, 1897, Hon. Edward
O. Wolcott of Colorado, Hon. Adlai E. Stevenson of Illinois, and Hon.
Charles J. Paine of Massachusetts, as special envoys to represent the
United States. They have been diligent in their efforts to secure the
concurrence and cooperation of European countries in the international
settlement of the question, but up to this time have not been able to
secure an agreement contemplated by their mission.

The gratifying action of our great sister Republic of France in
joining this country in the attempt to bring about an agreement among
the principal commercial nations of Europe, whereby a fixed and
relative value between gold and silver shall be secured, furnishes
assurance that we are not alone among the larger nations of the world
in realizing the international character of the problem and in the
desire of reaching some wise and practical solution of it. The
British Government has published a resume of the steps taken jointly
by the French ambassador in London and the special envoys of the
United States, with whom our ambassador at London actively
co-operated in the presentation of this subject to Her Majesty's
Government. This will be laid before Congress.

Our special envoys have not made their final report, as further
negotiations between the representatives of this Government and the
Governments of other countries are pending and in contemplation. They
believe that doubts which have been raised in certain quarters
respecting the position of maintaining the stability of the parity
between the metals and kindred questions may yet be solved by further
negotiations.

Meanwhile it gives me satisfaction to state that the special envoys
have already demonstrated their ability and fitness to deal with the
subject, and it is to be earnestly hoped that their labors may result
in an international agreement which will bring about recognition of
both gold and silver as money upon such terms, and with such
safeguards as will secure the use of both metals upon a basis which
shall work no injustice to any class of our citizens.

In order to execute as early as possible the provisions of the third
and fourth sections of the Revenue Act, approved July 24, 1897, I
appointed the Hon. John A. Kasson of Iowa, a special commissioner
plenipotentiary to undertake the requisite negotiations with foreign
countries desiring to avail themselves of these provisions. The
negotiations are now proceeding with several Governments, both
European and American. It is believed that by a careful exercise of
the powers conferred by that Act some grievances of our own and of
other countries in our mutual trade relations may be either removed,
or largely alleviated, and that the volume of our commercial
exchanges may be enlarged, with advantage to both contracting
parties.

Most desirable from every standpoint of national interest and
patriotism is the effort to extend our foreign commerce. To this end
our merchant marine should be improved and enlarged. We should do our
full share of the carrying trade of the world. We do not do it now. We
should be the laggard no longer. The inferiority of our merchant
marine is justly humiliating to the national pride. The Government by
every proper constitutional means, should aid in making our ships
familiar visitors at every commercial port of the world, thus opening
up new and valuable markets to the surplus products of the farm and
the factory.

The efforts which had been made during the two previous years by my
predecessor to secure better protection to the fur seals in the North
Pacific Ocean and Bering Sea, were renewed at an early date by this
Administration, and have been pursued with earnestness. Upon my
invitation, the Governments of Japan and Russia sent delegates to
Washington, and an international conference was held during the
months of October and November last, wherein it was unanimously
agreed that under the existing regulations this species of useful
animals was threatened with extinction, and that an international
agreement of all the interested powers was necessary for their
adequate protection.

The Government of Great Britain did not see proper to be represented
at this conference, but subsequently sent to Washington, as
delegates, the expert commissioners of Great Britain and Canada who
had, during the past two years, visited the Pribilof Islands, and who
met in conference similar commissioners on the part of the United
States. The result of this conference was an agreement on important
facts connected with the condition of the seal herd, heretofore in
dispute, which should place beyond controversy the duty of the
Governments concerned to adopt measures without delay for the
preservation and restoration of the herd. Negotiations to this end
are now in progress, the result of which I hope to be able to report
to Congress at an early day.

International arbitration cannot be omitted from the list of subjects
claiming our consideration. Events have only served to strengthen the
general views on this question expressed in my inaugural address. The
best sentiment of the civilized world is moving toward the settlement
of differences between nations without resorting to the horrors of
war. Treaties embodying these humane principles on broad lines,
without in any way imperiling our interests or our honor, shall have
my constant encouragement.

The acceptance by this Government of the invitation of the Republic
of France to participate in the Universal Exposition of 1900, at
Paris, was immediately followed by the appointment of a special
commissioner to represent the United States in the proposed
exposition, with special reference to the securing of space for an
adequate exhibit on behalf of the United States.

The special commissioner delayed his departure for Paris long enough
to ascertain the probable demand for space by American exhibitors.
His inquiries developed an almost unprecedented interest in the
proposed exposition, and the information thus acquired enabled him to
justify an application for a much larger allotment of space for the
American section than had been reserved by the exposition
authorities. The result was particularly gratifying, in view of the
fact that the United States was one of the last countries to accept
the invitation of France.

The reception accorded our special commissioner was most cordial, and
he was given every reasonable assurance that the United States would
receive a consideration commensurate with the proportions of our
exhibit. The report of the special commissioner as to the magnitude
and importance of the coming exposition, and the great demand for
space by American exhibitors, supplies new arguments for a liberal
and judicious appropriation by Congress, to the end that an exhibit
fairly representative of the industries and resources of our country
may be made in an exposition which will illustrate the world's
progress during the nineteenth century. That exposition is intended
to be the most important and comprehensive of the long series of
international exhibitions, of which our own at Chicago was a
brilliant example, and it is desirable that the United States should
make a worthy exhibit of American genius and skill and their
unrivaled achievements in every branch of industry.

The present immediately effective force of the Navy consists of four
battle ships of the first class, two of the second, and forty-eight
other vessels, ranging from armored cruisers to torpedo boats. There
are under construction five battle ships of the first class, sixteen
torpedo boats, and one submarine boat. No provision has yet been made
for the armor of three of the five battle ships, as it has been
impossible to obtain it at the price fixed by Congress. It is of
great importance that Congress provide this armor, as until then the
ships are of no fighting value.

The present naval force, especially in view of its increase by the
ships now under construction, while not as large as that of a few
other powers, is a formidable force; its vessels are the very best of
each type; and with the increase that should be made to it from time
to time in the future, and careful attention to keeping it in a high
state of efficiency and repair, it is well adapted to the necessities
of the country.

The great increase of the Navy which has taken place in recent years
was justified by the requirements for national defense, and has
received public approbation. The time has now arrived, however, when
this increase, to which the country is committed, should, for a time,
take the form of increased facilities commensurate with the increase
of our naval vessels. It is an unfortunate fact that there is only
one dock on the Pacific Coast capable of docking our largest ships,
and only one on the Atlantic Coast, and that the latter has for the
last six or seven months been under repair and therefore incapable of
use. Immediate steps should be taken to provide three or four docks of
this capacity on the Atlantic Coast, at least one on the Pacific
Coast, and a floating dock in the Gulf. This is the recommendation of
a very competent Board, appointed to investigate the subject. There
should also be ample provision made for powder and projectiles, and
other munitions of war, and for an increased number of officers and
enlisted men. Some additions are also necessary to our navy-yards,
for the repair and care of our large number of vessels. As there are
now on the stocks five battle ships of the largest class, which
cannot be completed for a year or two, I concur with the
recommendation of the Secretary of the Navy for an appropriation
authorizing the construction of one battle ship for the Pacific
Coast, where, at present, there is only one in commission and one
under construction, while on the Atlantic Coast there are three in
commission and four under construction; and also that several torpedo
boats be authorized in connection with our general system of coast
defense.

The Territory of Alaska requires the prompt and early attention of
Congress. The conditions now existing demand material changes in the
laws relating to the Territory. The great influx of population during
the past summer and fall and the prospect of a still larger
immigration in the spring will not permit us to longer neglect the
extension of civil authority within the Territory or postpone the
establishment of a more thorough government.

A general system of public surveys has not yet been extended to
Alaska and all entries thus far made in that district are upon
special surveys. The act of Congress extending to Alaska the mining
laws of the United States contained the reservation that it should
not be construed to put in force the general land laws of the
country. By act approved March 3, 1891, authority was given for entry
of lands for town-site purposes and also for the purchase of not
exceeding one hundred and sixty acres then or thereafter occupied for
purposes of trade and manufacture. The purpose of Congress as thus far
expressed has been that only such rights should apply to that
Territory as should be specifically named.

It will be seen how much remains to be done for that vast and remote
and yet promising portion of our country. Special authority was given
to the President by the Act of Congress approved July 24, 1897, to
divide that Territory into two land districts and to designate the
boundaries thereof and to appoint registers and receivers of said
land offices, and the President was also authorized to appoint a
surveyor-general for the entire district. Pursuant to this authority,
a surveyor-general and receiver have been appointed, with offices at
Sitka. If in the ensuing year the conditions justify it, the
additional land district authorized by law will be established, with
an office at some point in the Yukon Valley. No appropriation,
however, was made for this purpose, and that is now necessary to be
done for the two land districts into which the Territory is to be
divided.

I concur with the Secretary of War in his suggestions as to the
necessity for a military force in the Territory of Alaska for the
protection of persons and property. Already a small force, consisting
of twenty-five men, with two officers, under command of
Lieutenant-Colonel Randall, of the Eighth Infantry, has been sent to
St. Michael to establish a military post.

As it is to the interest of the Government to encourage the
development and settlement of the country and its duty to follow up
its citizens there with the benefits of legal machinery, I earnestly
urge upon Congress the establishment of a system of government with
such flexibility as will enable it to adjust itself to the future
areas of greatest population.

The startling though possibly exaggerated reports from the Yukon
River country, of the probable shortage of food for the large number
of people who are wintering there without the means of leaving the
country are confirmed in such measure as to justify bringing the
matter to the attention of Congress. Access to that country in winter
can be had only by the passes from Dyea and vicinity, which is a most
difficult and perhaps an impossible task. However, should these
reports of the suffering of our fellow-citizens be further verified,
every effort at any cost should be made to carry them relief.

For a number of years past it has been apparent that the conditions
under which the Five Civilized Tribes were established in the Indian
Territory under treaty provisions with the United States, with the
right of self-government and the exclusion of all white persons from
within their borders, have undergone so complete a change as to
render the continuance of the system thus inaugurated practically
impossible. The total number of the Five Civilized Tribes, as shown
by the last census, is 45,494, and this number has not materially
increased; while the white population is estimated at from 200,000 to
250,000 which, by permission of the Indian Government has settled in
the Territory. The present area of the Indian Territory contains
25,694,564 acres, much of which is very fertile land. The United
States citizens residing in the Territory, most of whom have gone
there by invitation or with the consent of the tribal authorities,
have made permanent homes for themselves. Numerous towns have been
built in which from 500 to 5,000 white people now reside. Valuable
residences and business houses have been erected in many of them.
Large business enterprises are carried on in which vast sums of money
are employed, and yet these people, who have invested their capital in
the development of the productive resources of the country, are
without title to the land they occupy, and have no voice whatever in
the government either of the Nations or Tribes. Thousands of their
children who were born in the Territory are of school age, but the
doors of the schools of the Nations are shut against them, and what
education they get is by private contribution. No provision for the
protection of the life or property of these white citizens is made by
the Tribal Governments and Courts.

The Secretary of the Interior reports that leading Indians have
absorbed great tracts of land to the exclusion of the common people,
and government by an Indian aristocracy has been practically
established, to the detriment of the people. It has been found
impossible for the United States to keep its citizens out of the
Territory, and the executory conditions contained in the treaties
with these Nations have for the most part become impossible of
execution. Nor has it been possible for the Tribal Governments to
secure to each individual Indian his full enjoyment in common with
Other Indians of the common property of the Nations. Friends of the
Indians have long believed that the best interests of the Indians of
the Five Civilized Tribes would be found in American citizenship,
with all the rights and privileges which belong to that condition.

By section 16, of the act of March 3, 1893, the President was
authorized to appoint three commissioners to enter into negotiations
with the Cherokee, Choctaw, Chickasaw, Muscogee (or Creek), and
Seminole Nations, commonly known as the Five Civilized Tribes in the
Indian Territory. Briefly, the purposes of the negotiations were to
be: The extinguishment of Tribal titles to any lands within that
Territory now held by any and all such Nations or Tribes, either by
cession of the same or some part thereof to the United States, or by
allotment and division of the same in severalty among the Indians of
such Nations or Tribes respectively as may be entitled to the same,
or by such other method as may be agreed upon between the several
Nations and Tribes aforesaid, or each of them, with the United
States, with a view to such an adjustment upon the basis of justice
and equity as may, with the consent of the said Nations of Indians so
far as may be necessary, be requisite and suitable to enable the
ultimate creation of a State or States of the Union which shall
embrace the lands within said Indian Territory.

The Commission met much opposition from the beginning. The Indians
were very slow to act, and those in control manifested a decided
disinclination to meet with favor the propositions submitted to them.
A little more than three years after this organization the Commission
effected an agreement with the Choctaw Nation alone. The Chickasaws,
however, refused to agree to its terms, and as they have a common
interest with the Choctaws in the lands of said Nations, the
agreement with the latter Nation could have no effect without the
consent of the former. On April 23, 1897, the Commission effected an
agreement with both tribes--the Choctaws and Chickasaws. This
agreement, it is understood, has been ratified by the constituted
authorities of the respective Tribes or Nations parties thereto, and
only requires ratification by Congress to make it binding.

On the 27th of September, 1897, an agreement was effected with the
Creek Nation, but it is understood that the National Council of said
Nation has refused to ratify the same. Negotiations are yet to be had
with the Cherokees, the most populous of the Five Civilized Tribes,
and with the Seminoles, the smallest in point of numbers and
territory.

The provision in the Indian Appropriation Act, approved June 10,
1896, makes it the duty of the Commission to investigate and
determine the rights of applicants for citizenship in the Five
Civilized Tribes, and to make complete census rolls of the citizens
of said Tribes. The Commission is at present engaged in this work
among the Creeks, and has made appointments for taking the census of
these people up to and including the 30th of the present month.

Should the agreement between the Choctaws and Chickasaws be ratified
by Congress and should the other Tribes fail to make an agreement
with the Commission, then it will be necessary that some legislation
shall be had by Congress, which, while just and honorable to the
Indians, shall be equitable to the white people who have settled upon
these lands by invitation of the Tribal Nations.

Hon. Henry L. Dawes, Chairman of the Commission, in a letter to the
Secretary of the Interior, under date of October 11, 1897, says:
"Individual ownership is, in their (the Commission's) opinion,
absolutely essential to any permanent improvement in present
conditions, and the lack of it is the root of nearly all the evils
which so grievously afflict these people. Allotment by agreement is
the only possible method, unless the United States Courts are clothed
with the authority to apportion the lands among the citizen Indians
for whose use it was originally granted."

I concur with the Secretary of the Interior that there can be no cure
for the evils engendered by the perversion of these great trusts,
excepting by their resumption by the Government which created them.

The recent prevalence of yellow fever in a number of cities and towns
throughout the South has resulted in much disturbance of commerce, and
demonstrated the necessity of such amendments to our quarantine laws
as will make the regulations of the national quarantine authorities
paramount. The Secretary of the Treasury, in the portion of his
report relating to the operation of the Marine Hospital Service,
calls attention to the defects in the present quarantine laws, and
recommends amendments thereto which will give the Treasury Department
the requisite authority to prevent the invasion of epidemic diseases
from foreign countries, and in times of emergency, like that of the
past summer, will add to the efficiency of the sanitary measures for
the protection of the people, and at the same time prevent
unnecessary restriction of commerce. I concur in his recommendation.

In further effort to prevent the invasion of the United States by
yellow fever, the importance of the discovery of the exact cause of
the disease, which up to the present time has been undetermined, is
obvious, and