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R f Is First Annual Messap to ,- ̂ CMPSS. -J » Delivered on Tuesday, tiia Ml of December. Tribute to the Memory of the ' Lamented GarfleW. '*• 0ir Foreign Relations in a Sfctiafae- tory Condition. Fiiuciil and Other Public Qaes- •f Interest Discussed. •F , WASHINGTON, D. C., Dee. 6. the Senate and Houne of ReprMentatives of the FG:., #11it«4 State*: •t" iKiVa appalling calamity hu befallen the American people since their chosen repre­ sentatives last met in the halls where you •xi) now assembled. We might else recall with aa:.l!oyp:l content tho prosperity with which, throughout the year, tne nation has been blessed. Its harvests have been plenteous, it* varied industries have thriven, tbe health of its people has been preserved. It fats maintained with foreign government* tbe UBdisturl-ed relations of amity and peace. For those. nunifoetations of His favor, we owe to Htm who holds our destiny in HJS hands the tribute of our grateful devotions. To that mys­ terious exercise of will which has taken from at the loved and illustrious citizen who was but lately the head of the nation, we "bow in sorrow and submission. The memorv of his exalted character, of his noble achievements, and of his patriotic life, Will be treasured forever ae a sacred posses- «ibn of the wiiole people. The announcement of his death drew from foreign governments and peoples tributes of sympathy and sorrow, whi^h history will record as signal tokens of •lite kinship of nations and the federation of t^bnkind. '^¥ SREAT BRTTAIJ». The feeling of good will between our own Government and that of Great Britain was •ever more marked Chan at present. In recognition of this pleasing fact. I directed on the occasion of the late centennial oele- bration at Yorktown that a salute be given to the British flag. Early in the year the Fortune bay claims were satisfactorily •sttled by the British Government paying in full the sum of £15,000, most of which has already been distributed. As the terms of the settlement included compensation for injuries •Offered by our fishermen at Aspee bay, there ha been retained from the gross award a sum which is deemed adequate lor these claims. THE AUSTRALIAN EXPOSITION. The participation of American* in the ex­ hibitions at Melbourne and Sydney will be approvingly mentioned in the reports of the two exhibition*, soon to be presented to Con­ gress. They will disclose the readiness of our countrymen to make successful competition in ^btant fields of enterprise. THE ISTHMUS CANAL. •<". In relation to the proposed canal across the 't , /Isthmus of Panama, little has occurred worthy :• ."%5'tof mention in the dlplomatio relations 1TK tbe country. FT. OOPTBI8HT. Negotiations for an international oopyright ' ?jtpnvention are in hopeful progress. SITTING BILL. s The surrender of fitting Hull and his forces, ' *pon the Canadian frontier, has allayed all ap- t prehension, although bodies of British Indians |*ptill cross the border in quest of sustenance. ' ̂ fpon this subject a correspondence has been " Opened which promises an adequate under- ] ... Standing. Our troops have orders to avoid, /• Meanwhile, all collisions with alien Indians. 1 THE FRENCH OUE8TS. •t t j, The presence at tne Yorktown celebration of ' * , the representatives of the descendant* of La- •'% .layette and of hw gallant compatriots, who v .S^lrero our ailies in the Revolution, has served to strengthen the spirit of go:>d-will which bias al- • existed between the two nations. , V BTMETALLIO COSFILRBNCE. w • Yon will be fnrnmhed with the proceedings JEW the Bimetallic Conference, held during the flpsmximer at the city of Paris. No accord was .^Usac'ied, bat a valuable interchange of views Was hud, and the conference will next .ear be .'^NEV.-ECL R ; I ELECrRIOAL EXPOFUTTOLF. At the Electrical Exhibition and Congress, j Hi so "held at Paris, this country wns creditably ffpprestmted by eminaent special is, who. in tfce absence of an appropriate i, generously lent their efficient aid at the i .stance of the 8tate Department. While on- exhibitions in $tis almost-difitinctively American held of achievement have wou several awards, I recom­ mend that Congress provide for the repayment M the personal expenses incurre 1 in the "public tot-'rest by the honorary commissioners and IIIIJFEIEGATES. 1 No new question respecting the status of •JPTLWK NATURALIZED CITIZENS IS OERMSANY "pave arisen during the year, and causes of 1 Jjpmplaiut, especially in Alsace and Lorraine, l*ave practically ceased thr.nigh the lib­ eral action of "the Imperial Government in tjpeepting our often expressed views on !;|M subject. The , -'treaty of 1888 to 'Ifchemsh provinces ilarnest attention. A Jereement on this point is confidently expected, »he participation of the descendants of Baron *on Steuben in the Yorktown festivities, and tiieir subsequent reception by their American pinsmen, strikingly evinced Jhe ties of good •ill wh'oh unite the Qermtn people and our f«wn. Oar FINTERCOURSE WITH SPAIN jiias been friendly. An agreement concluded in February last fixes a term for the labors for * Jmf ^,,an Au<^ American Claims Commission, t yhe Sj-anish Government has been requested ,<§°. pay the late award of the Commission, and , (%ill, it is believed, accede to the request promptly and courteously as on former nioufi. By recent legislation onerous * ¥ne8 heen imposed upon American , shipping in Spanish and colonial ports ifor slight irregularities in manifests. "f>ne case of hardship is specially worthy "jm attention. The Lark Masonic, bound for vupiui, entered Manilla in distress, and is there fought to be confiscated under the Spanish revenue laws ior an alleged shortage in her transhipped cargp. Though efforts for her re­ lief have thus far proved unavailing, it is ex­ pected that the whole will be adjusted in a friendly spirit. TUB CZAB'B ASSASSINATION. The Senate resolutions of condolence on the assassination of tbe Czar Alexander IX. were ' appropriately communicated to the Russian Government, which in turn hits expressed its sympathy in our late national bereavement. It is desirable that oar cordial rela­ tions with Bawda should be strengthened by pro; *-r engagements, assming to peaceable Americans who visit the empire the consideration which is due to them as citizens of a friendly Stuta. This is esp<>- claity needful with respect u> American Israel­ ite, whose classification with the native He­ brew has evoked energetic remonstrances from this Government. ITALY. The consular agreement with Italy has been sanctioued and proclaimed, which puts at rest conflicts of jurisdiction in the case of crimes on shij ouard. Several important international conferences have been held in Italy during the year. At the Geographical Con­ gress of Venice, the Bontice Congress of Muan, and the Nice Congress of Turin, ttus country was represented by delegates from branciies of the p'iblic service or by private . citizens, duly accredited to it in an honorary eapneity. It U hoped that Congr«K« will eiva such prominence to the results of their partial- ?r_V „ pation as they may seem to deserve. HOLLAND. Ail® abolition of all (liscriminaHr^y dutiefl n against Dutch colonial productions ofthe Dutch Hi Icdi®s, as are imported hither from Hol­ land, has been already considered by Con- . 'j?. • g^"ess. I trust that at the present session tbo ' ,. • natter may be favorably concluded. to protest against the conduct of the anthori- ties or certain communes in permitting the emigration to this country of crinuiinls, and to other objfctiotiable personf". Several such per­ sons, through the co-oneration of the Commissioners of Emigration at New York, have been sent back by tho steamers which brought them. A continnanoe of the ooorse may prove a more effective remedy than diplo­ matic remonstrance. " . • NRA DAXRRAIAN STATES. Treaties of commerce and navigation ani for the regulation of Consular privileges has be«n concluded with lioumama and Servia since their admission into the fa&iily of Ban* pean States. MKxioa As it natural with contiguous States having like institutions and like aims of advancement and development, the friendship of the United States and 3lex.ieo has been constant­ ly maintained. The ' Government has lost no occasion of encouraging the Mexican Government to a beneficial realization of the mntual ADVANTAGES which will result from more intimate commercial in­ tercourse. and from the opening of the rich interior of Mexico to railway" enterprise. I deem it important that means be provided to restrain the lawlessness so common on the frontier, and to suppress the forays of tbe reservation Indians on either side of tbe Bio Grande. OKNTRAL AMKEIOA. The neighboring States of Central America have preserved internal peace, and their out­ ward relations toward us have been those of intimate friendship. There are encouraging signs of their growing disposition to subordi­ nate their local interests to those which are common to them by reason of their geograph­ ical relations. The ixmndaiy question bet ween Guatemala and New Mexico has afforded this Government an opportunity to exorcise its good oflie«s for preventing a rupture between THOR-E States, and for procuring a peaceful solu­ tion of the question. I cherish a strong hope that in view of our relations of amity with both oountr es our friendly counsels witl prevail. The Costa Rica Government lately formed an engagement with Colombia for settling, by ar­ bitration, the boundary question between those j countries, providing that the part of the ar- i bitrants should be offered sucoesively to the ] King of the Belgians, the King of Spain and the President of the Argentine Con- • federation. The King of tie Belgians | has declined to act, but I am not as yet advised j of the action of the Ivuig of SPAIN. As we have ' ^ „ . . , or tain interests in the disputed territorv which Cott-OU Exposition the October number of the a merchant seaman on board sn American vessel, have made it neoMsary for thelGov- ernment to inrtitue A careful examina­ tion, and the NATURE and methods of fthia jurisdiction. It appears Alt Bow was regu­ larly shipped under the tag of the Un.ted States, but was by birth a British subject. My predecessor felt it his duty to MAINTAIN the po­ sition that during his service as a reguiarly- ehipped seaman on board an American mer­ chant vessel, Itoss was subject to tho laws of the service and to the jurisdiction of the United States Consular authorities. I renew the recommendation whioh has here­ tofore been urged by the Executive upon the attention of Congress, that after the reduction of such amount as may be found due to Amer­ ican citizens, the balance of THE INDEMNITY FCJOJE heretofore obtained from China and Japan, and which are now in the hands of the State Department, be retained to the Governments of those countries. The King of , •AWAIT, In the coarse of his homeward return after a .journey arotmd the world, has lately visited tills country. While our relations with that Kingdom are friendly, this Government has viewed with oonoern the efforts to seek replen­ ishment of the diminishing population of the islands from outward sources to a degree which may impair the native sovereignty and independence in which the United States was among the first to testify a lively interest. OTHER NATIONS." Relations of unimpaired amity have been maintained throughout the yoar 'with the re- spuetive Governments of Austria, Hunguary, Belgium, Denmark, Hayti, Paraguay and Uru­ guay, Portugal and Sweden and Norway, and this may also be said of Greece and Ecuador. Although ourrelations with those Stairs have for some years been severed by the withdrawal of appropriations tor diplomatic representatives at Alliens and Quito, it aeoms expedieut to restore those missions, even on a reduced seal;;, and I decidedly recommend such a course with regard to Ecuador, which is likely, M the near future, to play an important part among the nations of the Southern Pacidc waters. Tbe State Department still continues to pub­ lish to the country phe taanx AND HAXTRFACRNRAINA REPORTS received from its officers abroad. The snooess of this course warrants its continuance and such appropriation as may be required to meet the rapidly increasing deinand for those publi­ cations. With special reference to the Atlanta are protected by our treaty engagement with one of the parties, it is important that the ar­ bitration should not without our consent affect our rights, and this Government has accord­ ingly thought proper to make its views known to tiie pariits to THE agreement, and to intimate them to the Belgian Crovernment. THE COL MDIAN GOVEUKMENT. The questions growing out of the proposed reports was devoted to a valuable collection of papers on tbe ootton-goods trade of the world. THE INTERNATIONAL SANITARY CONFERENCE, for which, in 1879, Congress made provision, assembled in this city early in January last, and the sossious were prolonged until Mtirc I. Although it reached no specific conclusion affecting the future action of the participant . . . inter-oceanic water way across tlie Isthmus of | POWERS, the interchange of views proved to be JF6 OR, TNE, GOVERNMENT to ue. Panama are of grove national importance, J most valuable. The full protocols of theses-. V10 RAL. . OR M!. PWCENTUM per I I.is Government HAS not been uniniudail of I the (.olenin obligations imposed upon it by its Senate, most valuable. The full protocols of the ses­ sions have been already presented to the application of the the lately acquired has received very definite and lastiug conmaet of 1»4G with Colombia as the inde­ pendent and sovereign rnMrees of the territory j crossed oy the canal, and has sought to render j them effective by lresh engagements J with the Colombian . republic, looking j to their practical exeent.ou. The ! NEGOTIATIONS to this end, after they had reached - what appeared to be a mutually-satisfactory ! solution here, were met in Colombia by a dis- j avowal of the powers which its envoy had j assumed, and by a proposal for renewed nego- j nations on a modified basis. Meanwhile tins j Government learned that Colombia had pro­ posed to the Euroi>eau powers to join in a | guarantee ot the neutrality of the proposed | Panama Council, a guarantee which wouid be ; in direct contravention ef our obligations as j the sole guarantee of the integrity of Colombian I territory and of the neutrality of the canal | itself. My lamented predecessor felt it his duty to place before the European powers the reasons which make the prior guarantee of the United States indispensable, and for which the interjection of ADY for-. iqn guarantee might be regarded as a superfluous and unfriendly act. THE CLAYTON-BULWHR TREATY. Foreseeing the probable reliance of the Brit­ ish Government on the provisions of the Clay- ton-Bulwer treaty of 1S50, as affording room for a share in the guarantees which the United States covenanted with Colonfbia four vears before, I have not hesitated to supplement the action of my predecessor by proposing to her Majesty's Government the modification of that instrument, and the abrogation of such clauses thereof as do not comport with obliga- I tions of the United States toward C .lombia, or with the vital needs of the two friendly parties to the compact. CHILI AUD PERU. This Government sees with great concern the continuance of hostile relations between Chili, Bolivia and Peru. An early peace be­ tween these republics is much to be desired, not i only that they may themselves be J^ARED fur- | ther misery and bloodshed, but because their continued antagonism threatens consequences ! which are in my judgment dangerous to the interests of republican government on this continent, and calculated to destroy the best elements of oar free and peaceful civilization. As in the present excited condition of popular FT-eliiig in those countries there has been serious misap­ prehensions of the position of the United States, and as separate diplomatic intercourse with each through independent Ministers is sometimes subje.t, owiug to the want of prompt reciprocal communication, to temporary misunderstanding, I have deemed it judicious at the present time to send a special envoy ac­ credited to all and each of them, furnished with general instructions, which will, I trust, enable him to bring these powers into friendly relations. THE 9ENETA AWARD. At its last extra session the Senate called for the text of the Geneva Convention for the relief of the wounded in war. 1 trust this ac­ tion foreshadows such interest in the subject as will re.ult in the adhesion of the United Stat/-* to that humane and commendable en­ gagement. 1 regret that the commercial interests be­ tween THE UNITED STATES AND BRAZIL, from which great ADVANTAGES were HOJ e l a vear •go, have sufferr^D from he withdrawal of" the American line of communication between Bra­ zilian ports and oar own. Thi oiigh tho efforts of our Minister Resident at Bueuus Ayres and the United States Minis­ ter at Santiago, a treaty has been concluded between As pertinent to this general subject I call your attention to the operations of the NATIONAL BOARD OF HliAI.TH, established by act of Congress, approved March 3, A. D. 1870. Its sphere of duty was enlarged by the act of June 2, MI the same year. By the last-named act the board was required to institute such measures as might be deemed necessary for preventing tho introduction of contagious or infectious diseases from foreign countries into the United States, or from ono State into another. The execution of the rules and reg­ ulations prepared by tho board and ap­ proved by my predecessor has done much to arrest'the progress of epidemic disease, and has thus rendered substantial service to the nation. THE INTERNATIONAL SANITARY CONFERENCE to which I have referred adopted a form of a bill of health to be used by all vessels seeking to enter the ports of the countries whose rep­ resentatives participated in its deliberations. The form has been preserved by the National Board of Health, and incorporated with its rules and regulations, which have been ap­ proved by me in pursuance of law. The health •f the people is of supreme importance. AU measures looking to their preservation against the spread of contagious diseases and to the increase of our sanitary knowledge for such purposes, deserves the attention of Congress. These international rules differ but slightly from our own. They have been adopt­ ed by the Navy Department for the goverannce of the war-ships of the United States on the high seas and in foreign waters, and through the action ef the State Department in dissem­ inating the rales, and in acquainting the ship­ masters with the option of conforming to them without the jurisdictional waters of the United Slates. They are now very generally known and obeyed. THE REPORT or THE SECRETARY OT THE TREA8CRY. represents, in detail, A highly satisfactory ex­ hibit of the state of the finances and the con­ dition of the various branches of the pablic service administered by that department. The ordinary revenues from ail surces for the fiscal year end­ ing June 10, 1881, wero from customs, •?1!)8.159,67G.02 ; from internal revenue, $135,- 2C4,385.51 : from public lands, £222.186,317; from tax on circulation and deposits of nation­ al banks, $8,110,11 .72 ; from repayment of interest by Pacific railway companies, $810,- 8J3.80 ; from sinking fund for Pacific railway companies, $805,180.54 ; from customs, teen, fines, penalties, etc., -31,225,511.86 ; fr<>rn fees, consular letters, PATENTS and lands. $22,241,- SS4.99 ; for the military establishment, including river and harbor improvements and arsenals, $40,166,400.55; for the naval establishment, including vessels, machinery and improvements at navy y-irds, $15,686,671.66 . for miscella­ neous expenditures, including public buildings, lighthou es and collecting the revenue, 441,- 837,280.57 ; for expenditures on account of the District of Columbia, $3,543,- 912.03: for interest on the public d. bt, 5O8,741.18 ; for premium on bonds pur­ chased, ¥1.061.248.78 Total ordinary expend­ itures, F26'l.712,887.59. leaving a surplus of revenue of $100,009,404.98, which was applied as follows : To the redempt ion of bonds for the sinking fund, $74,371,200 ; fractional cur­ rency for the sinking fund, $109,001.05 ; loan increase of $11,627,611.42 over that of the pre­ ceding year; $88,08^563.39 of this amount was collected at the port of New York, leaving $30,- 251,113.63 as the amount collected at sll the other pons of the country. Of this sum $47, $77,137.62 was collected on sugar, melado and molasses; $27,286,624.78 on wool and its manufactures; $21,462,684.84 on iron and steel and manufacture;) thereof, $19,- 03S.665 on manufactures of silk; $10,825,115.21 on manufactures of cotton, and $6,- 463,643.04 on wines and spirits, making the total revenue from these sources $133,058,- 720.81. The expenses of collection for tho past year wero $0,410,845.20, an increase over the preceding year of $387,410.04. Notwith­ standing the increase in revenue from customs over the preceding year, the gross va ne of the imports, including free goods, decreased over $25,000,000. The msrked decrease was in the vali*' of unmanufactured wool, $14,023,682, and in that of serap and pig iron, $12,810,071. The Talue of imports (sugar), on the other haud, •bowed an increase of $7,457,474, of steel rails $4,345,521, of barley $2,154,204, and of steel in bars, ingots, etc., #€80,046. Compared with tho previous year, there was an increase of $676,738,688 in tne value of ex­ ports of merchandise, and a decrease of $25,- 390,118 in the value of imports The annual average of increase of imports ©f merchandise over exports thereof for ten vears previous to Juna 30, 1873, was $104,805,922. but for the last six years there has been an excess of ex­ ports over imports of merchandise amounting 'to $1,180,668,108, an annual average of $196,- 668,017. Tho specie value of the exports of domestic merchandise was $376,616,473 in 1870, and $888,975,947 in 1878. an in­ crease of $307,809,474, or 13.5 per cent. The value of imports was $435,958,408 in 1870, nnd $642,664,627 in 1881--an increase of $216,782.20, or 47 per cent, during each year. From J862 to 1879. inclusive, the exports for specie ex­ ceeded their imports. The largest excess of such exports sver imports was reached during the year 1864, when it amounted to $92,204,929, but during the year ending June 30, 1880, the imports of coin and bullion exceeded tho esports by $75,891,391, and during the last fiscal year tho excess of imports over exports was $91,168,650. I n the last annual report of the Secretary of the Treasury the attention of Congress was called to tne fact that $409,651,050 in 5 per centum bonds and £203,573.7 >0 in 6 per centum bonds would become redeemable during the year and Congress was asked to authorise the 4 REFUNI'INO of these bonds at a lower rate of interest The bill for such refunding having failed to become a law, the Secretary of the Treasury in April last notified the holders of tho $105,690,400 6-per-centum bonds then out­ s tand ing that the bonus would be paid at par on the 1st day of July following, or that they might be " continued " at the pleas­ ure of the Government to bear interest at annum. Un­ der this notice $173, <55,150 of the 6-per-centum bonds were continued at tho lower rate, and $17,635,250 were re­ deemed. In the month of May a like notice was given respecting the redemption or con­ tinuance of the $439,8^1,350 of 5-per-oentum bonds then outstanding, and of these $401,404,000 were continued at per centum per annum, and $38,336,456 re­ deemed. The 6-per-centum bonds of the loan of Fob. 8, 1861, and of the Oregon war debt, amounting together to $14,125,8 )0, having matured during the year, the Secretary of the Treasury gave notice of his intention to redeem the same, and such as have been pre­ sented has been paid from the surplus revenue. Tnere have also been redeemed at par $16,179,- 100 of the 3% per centum "contmned" bonds, making a toial of bonds redeemed, or which have ceased to bear interest THE REDUCTION OF THE ANNUAL INTEREST on the public debt through these transactions is as follows : By reduction of interest to 3}^ per cent $1,047,395,227, bv redemption of bonds $635,234,000 ; total, $1,682,629,225. The ZXX PER centum bonds being pavaele at the pleasure of the Government, are available for the investment of surplus eevenue without the payment of premiums. A Unless these bonds can be fanded at a much lower rate of interest than they now bear, I agree with the Secretary of the Treasury that no legislation respecting them is desirabie. It is a matter for congratulation that the busi­ ness of the country has been so prosperous during the past year as to yield by taxation a large surplus of income to the Government If the revenue laws remain unchanged, this surplus must year by year increase on ac­ count of th6 reduction of the public debt and its burden of interest, and because of the rapid INCREASE of CWN population. In 1860, just prior to tfie institution of Our inter- nal-reveuuo system, our population but slighfly exceeded 30,000,000. By the census of 1880 it is now found to exceed 50,000,000. It is esti­ mated that even if tbe aniiual receipts and ex­ penditures should continue as at present the entire debt could be paid in ten years. In view, however, of the heavy load of taxation which our people have borne, we may well con­ sider whether it is not the part of wisdom to reduce the revenue, even if we delay a little the payment of the debt It seems to me that the time has arrived when the people may justly demand some re­ lief from their present enormous burden, and that by due economy in the various branches of the public service this may readily be af­ forded. I therefore concur with the Secretary in recommending ABOLITION OF ALL INTERNAL REVENUE TAXES, except those upon tobacco in its various forms, and upon distilled spirits and fer­ mented liquors, and except also the special tax upon the manufacturers of and dealers in such articles. The intention of tho latter tax is desirable as affording the officers of the Government a proiter supervision of these articles for the prevention of fraud. I agree with the Secretary of the Treasury that the law imposing a stamp tax on matches, proprietary articles, playing cards, checks and drafts may, with propriety, be repealed, and the law also by which banks and bankers are ASSESSED upon their capital and deposits. There seems to be a general sentiment in favor of this eourse. In the present condition of our revenues the tax upon the deposits is especially unjust It of February, 1861, $7,418,000 ; 10-40'S of 1804, | was never imposed in this country until it was $2,016,150 5-20'S of 1862, $18,300 ; 5-20'S ! demanded by the necessities of war, was never t,v. THE ARGENTINE REPUBLIC AND CHILI, disposing of tho long-pending P.itagonian , boundary questio!!. It is a matt. r of congrat­ ulation th.it our Government has been afforded | the oppoitun ty of successfully exerting us ! good influence for the prevention of disagree- | incuts between the republics of the American • continent. , VENEZUELA. The Government of Venezuela maintains its attitude of warm friendship, and con- J tinues with great regularity its payment of ; the monthly quota of the diplomatic debt. Without suggesting the direction in which Congress should act. I ask attention to the (tending question* affecting the dis- ' trinution of the sums thus far received. The relations between Venezuela and Fiance, growing out of the same debt, have been for some time past in an unsatisfactory state, and this Government, as the neighbor of one of the largest creditors of Venezuela, has interposed itself with the French Government with the view of producing a friendly and hon­ orable adjustment. 1 am glad to inform yon that THE TREATIES LATELY KEOOTIATK® WIT* CHINA have been d u l y ratitied on both sides and the exchange made at Peking. Legislation is neo- ersarv to carry its provisions into effect. The prompt and friendiv spirit with which the Chi­ nese Government, AT the request of the United Slates, conceded the modilicition of existing treaties should secure careful regard for the interests and susceptibilities of that Govern­ ment in the re-enactment of any laws relating to Chinese immigration. These classes of treaties which forbid the participa­ tion of citizens or vessels of the United States in the opium trade will doubtless receive your approval, and they will attest the sincere interest which our people and Govern- wnt bn.ye M the commendable efforts of the < hinese Government to put a stop to this deuioraliz.ug and destructive traffic. In rela­ tion both to China and Japan, some changes are desirable in our present system of consular jurisdiction. I hope at some future time to lay before you a scheme for its improvement in the entire East [ _ JAPAN. I The intimacy between our country and Japan, the most advanced of the Eastern nations, continues to be oordiaL I am advised of 1861, $3,400 ; 5-20's of 1865, $37,300; consols of 1865. $143,150,000 ; consols of 1867, $05,925,000 , consols of 1868, $337,400 ; loan md> nimty stock, *400,000 ; old demand com­ pound interest and other notes. $18,330. end to tne increase of cash in the treasury, $14,636,- 023.93; total $ 10tJ.Gti9,404.98. THE REQUIREMENTS OF THE SINKING FUND for the year amounted to $9.78,6011,402. which sum included a balance of $19,509,128.78 not provided for during the previous fiscal ye;tr. The sum of $74,480,201.05 was applied to this fund, wiiiuh left a deficit of $16,305,873.47. SEVENTHS. The increase of the revenues for 1881 over those of the previous year was $29,352,901.10. It is estimated that the receipts during the present fiscal year will reach $400,000,000 and the expenditures $270,000,000, leaving a sur­ plus of $130,000,000 applicable to the sinking fund and the redemption of tbe public dont SILVER CERTIFICATES. I approve the recommendation of the Secre­ tary of the Treasury that provision be made for the early retirement of silver certificates, and that the act requiring their issue be re­ pealed. They wero issued in pursuance of the policy of the Government to maintain silver at near the gold standard, and wero accordingly receivable for all customs, taxes and public dues. About $6 1,000,000 of them are now outstanding. They formed an nnne, essary addition to the pa per currency, a sufficient amount of which may be readily supplied by the national banks. In accordance with the act of Feb. 28, 1878, the Treasury De­ partment has monthly caused at least $2^000,- 000 in value of silver bullion to be coined into standard silver dollars : 102,000.000 of these dollars have been coined, while only about 32.000,000 are in circulation, for the reasons which he specifies. OOLNAO*. IconcuTln the Secretary's recommendation that the provision for coinage of a fixed amount each month be repealed, and that hereafter only so much be coined as shall be necessary to supply the demand. GOLD CERTIFICATES. The Secretary advises that the issae of gold certificates should not for the present be re­ sumed, and suggests that the national banks may properly b<- fwbidden by law to retire their currency except upon reasonable notice of TURKEY. mm&mm the »-mpire. uent N he« not yet been executed, although UIIS Government has repeatedly demanded BFS punishment , SWITZERLAND. The Swiss Government has solicited the good Offices of our diplomatic and consular agents lor «H« protection o' its citizens in countries whore it :S not itself represented. This re­ quest has, wi hin proper limits, been granted. exacted, I believe, in any other country, even in its greatest exigencies. Bankers are re­ quired to secure their circulation-by pledging with the Treasurer of tbe Uiuted States bonds of the general Government. The in­ terest upon these bonds, which at the time when tho tax was imposed was C per cent, Is now in most in­ stances 8>^ per cent, and besides, tho entire circulation was originally limited by law, and no increase was allowable. When the existing banks had practically a monopoly of the busir NESS there was force,in the suggestion that for the franchise to the favored grantees the Gov­ ernment might very properly exact a tax on circulation, but for years the system has been free and the amount of circula­ tion regulated by the publio demand. The retention of this tax has been suggested as a means of reimbursing tho Government for the expense of printing and furnishing the circulating notes. If the tax should bo re­ pealed it would certainly be proper to require the national banks to pay tho amount of such expense to the Comptroller of the Currency. IT is perhaps doubtful whether the immedi­ ate reduction of the rate of TAXATION UPON LIQUORS AMD TOBACCO is odvisable, in view of the drain upon the treasury which must attend the payment of ar­ rears of pensions. A comparison, however, of the amohnt of taxes collected under the vary­ ing rates of taxation winch have at different TIMES prevailed suggests tho intimation that some reduction may soou joe made without dim- I iuution of the revenue. | THE TARITF LAWS also need revision, but that a due regard may be paid to the conflicting interests of our citi­ zens, important changes should be made with caution. If a careful revision cannot bo made at this session, a commission, such as was I lately approved by the Senate and is nowrecom- I mended bv the Secretary of tbe Treasury, would doubtless lignten the labors of Congress whenever this subject shall be brought to its consideration. SECRETARY OF WAR. The accompanying report of the Secretary of War will make known the operations of that department for the past year. He suggests measures for promoting the efficiency of the anny by adding to the number of its officers and recommends the legislation necessury to their intention so to do. Such legislation wonld | increase the number of eniisted men to 30,000 uAAtn i a Kn {iiufiKnsl lk« tVin nu>urif irkn a# oo»_ . the miiximiim j t I tow Tllia .J . . . -- -- com- piete STIMULATION with Western systems, can­ not fail i" bring Japan into closer and More Ivuefiei; 1 relationship with ourselves, as the EHI f Pacific power. \ question has arisen in relation to the ex­ ercise in that country of the JCNIEUL FUNCTIONS CONFIRMED upon our Ministers and Consuls. Tne indictment, trial and conviction in the soetn to be justified by the recent action of cer­ tain banks on the occasion referred to in the Secret arv's renort FRACTIONAL CURRENCY. Of the fifteen millions fractional currency still outstanding only about eighty thousand has been redeemed the past year. The sugges­ tion THAT the amount may properly be dropped from future statements of the public debt seems wortoy of approval ; so also does tho suggestion of tho Secretary as to tne advisabil­ ity of relieving the calendar of the United States courts in tbe Southern District of New York by the transfer to another tribuual of the numerous suits pending there against col­ lectors. THE REVENUE FROM CUSTOMS Our acents in KWIISBXIATWI ),««<» E injic.,.I:eiit, trial and couviction in tne THE REVENUE FROM CUSTOMS of the Secretary W48 M BWIUEXLAND have been instructed consular Court at Yakofaama, of Jolm Boss, for the past fiscal year was *ll»,159,076.02, an trmr to tb» Strength the maximum allowed by law. This he deems necessary to maintain quietness on our ever- shifting frontier, to preserve peace and suppress disorder and MA^UDING in the new settlements • to protect settlers and their property against Indians, and Indians against the encroach­ ments of intruders; and-to enablo peaceable immigrants to establish homes in the most remote parts of our country. The army is now necessarily scattered over such a vast extent of territory, that whenever an out­ break occurs, reinforcements must be hurried from many quarters over great distances, and always at heavy cost for transportation of men, horses, wagons and sup­ plies. I Concur in the recommendation of the Secretary for increasing MIE I 80,000 enlisted men. It appears by the Ifcwretary's report that in the absence of disturbances on tlie frontier, the troops have been actlvoFy employed in collect­ ing Indians hitherto hostile and locating them on their proper reservations ; that Sitting Bull and his adherents are now prisoners at Fort, Randall; that the Utes Have been moved to their new reservation in Utah; that during the rceent outbreak or the Apa­ ches it was necessary to reinforce the garrison in Arizona by troops withdrawn from New Mexico, and that some Apaches are now held prisoners for trial, while some have escaped and the majoritv of the tril>e arc now on their reservations. There is need of legislation to prevent intrusion upon the lands set apart for the Indians. A large military force, at great expense, is required to patrol the boundary line between Kansas and the Indian Territory. The only punishment that at present can l>e inflicted is the forcible re­ moval of the intruders, and the imposition of a pecuniary fine which, in most cases, it is im­ possible to collect. There should be a penalty by imprisonment in such cases. SIGNAL RKRVIOE. The separate organization of th* Signal Ser- yice is used by the Secretary of War, and a full statemsnt of the advantages of such perma­ nent organization is presented in the report of the Chief Signal Officer. A detailed account of the useful work performed by the Signal Corps and the Weather Bureau are also given in tnat report , THE INDIAN BUREAU. I ask your attention to the statements of the Secretary of War regarding the requisitions frequently made by the Indian Bureau upon the Subsistence Department of the army for the casual support of bsnds or tribes of In­ dians for which appropriation are exhausted. The War Department should not be left, by reason of inadequate provision for tho Indian Bureau, to contribute for the maintenance of the Indians. OOAST DEFENSES. The report of the Chief of Engineers fur­ nishes a detailed account of the operations for the improvement of rivers and harbors. I sommend to your attention the suggestions eontained in this report m regard to the con­ dition of our fortifications, especially our coast • 4*t»nma. and rssommend an increase of the i strength of the engineer battalion, by whioh j the efficiency of our torpedo system would be j improved. INTERNAL IMPROVEMENT. ! I also call yonr attention to the remarks npon { the improvement of the South Pass of the i Mississippi river, the proposed free bridge at! Georgetown over the Potomac river, the im- ' portance of completing at an early day the ' north wing of the War Depart ment building, and ; •ther recommendations of the Secretary of War I which appear in his report The actual ex- j penditures of this department for the fiscal year ending June 30, 1881, were $42,122,201.39. The appropriations for the year 1882 were ! $44,889,725.42. The estimates for 1883 are ; 944,541,27C.91. i THE NAVT. ! The report of the Secretary ef the Wavy ex- i hibits the oondition of that branch of the ser- j •ice, and presents valuable suggestions for its improvement I call your especial attention ! alao to the appended report ef the Advisory ; Board which he convened to devise suitable measures for inoreasing the efficiency of the ' navy, and particularly to report as to the char- j acter and number of vessels necessary to place j it upon a footing commensurate with ! the necessities of the Government. I cannot too strongly urge upon you my con­ viction that every consideration of national safetv, economy and honor imperatively de­ mands a thorough rehabilitation of our navy, with a just appreciation of the fact that- compliance with the suggestion of the head of that department and of the Advisory Board, must involve a large ex­ penditure of the publio moneys. I earn­ estly recommend such appropriation as will* accomplish an end which seems to be so desirable. Nothing can be more inconsistent with true pubiio economy than the withholding of the moans necessary to accomplish the objects intrusted by the con­ stitution to the National Legislature. One of these objects, and one which is of paramount Importance, is declared by our fundamental law to be the provision for the " common de- .fense." Surely nothing is more essential to the defense of the United States and of all our people than the efficiency of our navy. " IN TIME OF FEAGE PREPARE FOR WAR." We nave for many years maintained with for­ eign governments the relations of honorable peace, and that such relations may be penna-1 nent is desired by every patriotic citizen of the i republic. But if we read tho teachings of his- I tory we shall not forget that in the life of every j nation emergencies may arise when a resort to arms can alone save it from dishonor. No danger from abroad now threatens this people, I nor have we any cause to distrust the frieud- [ ly prosessions of other governments. But for avoiding as well as for repelling dan- j gers that may threaten in future we must be ; prepared to face any policy which wo think i wise to adopt. We must be ready to defend 1 our harbors against aggression, to protect, by! the distribution of our ships of war over the ! highways of commerce, the varied interests of i our foreign trade, and the person and property j of our citizens abroad; to maintain everywhere ! the honor of our flag and the distinguished po- ' sition which we may rightfully claim among the < nations Of tbe world. ; P08T*L MATTERS. | The roport of the Postmaster General is a gratifying exhibit of the growth and efficiency of the postal service. The j receipts from postage and other ordinary i sources daring the past fiscal year were j $36,489,816.58. The receipts fiom the money- i order business were $295,581.39, making a total of $36,785,397. !|7. The expenditure for i the fiscal j ear was $68,251,736.46. The deficit i supplied out of the general treasury was j $2,481,129.35, or 63 per"cent. of the amount The receipts were $3,409,918.68 in excess of | those of the previous voar, and 8^,575.3117.97 in excess of the estimate made two years ago, \ before tho present year of business prosperity! had fairly begun. j Tho whole number of letters mailed in this I country iii the last fiscal year exceeded 1,000,- • 10.000. i The registry system is reported to be in ex- , cellent condition, having been remodeled dur- i ing the past four years with good results. The ' amounts of registration fees collected during • the last fiscal year were $712,882.20--an m- j crease ov.<r the fiacal year ending June 30, 1877, [ of $435,413.40. The entire number of letters I and packages registered during the year was 8,338,919, of which only 2,061 were destroyed or lost in transit. The operations of "the' money-order system are multiplying yearly, ] under the impulse of immigration, of the' rapid development of the newer States and \ Territories, and the consequent demand for ' additioi al means of inter-communication and exchange. During the past year 338 additional ; money-order offices have been established, i mailing a total of 5,-199 in operation at the date of this report. During the year the domestio ' money orders aggregated in value $10,507,576,- , 935. A modification of the system is suggested reducing the fees for money orders not ex- | ceoding $5 from 10 cents to 5 cents, and making the maximum limit $100 in place of $50. Legislation for the disposition of un- 1 claimed money orders in the possession of tho Pout Office Department is recommended, in view of the fact that their total value exceeds •1,000,000. ! The attention of Congress is again pointed to the subject of establishing a system of sav­ ings depositories in connection with tho Post Office Department. ] THE STATISTICS OF MAIL TRANSPORTATION show that during the past year railroad routes have been increased in length 6,249 miles, and in cost $111,382, while steamboat routes have been decreased in length 2,182 miles, and in cost $134,054. Tho so-called star routes have been decreased in length 3,940 miles, and ui cost $364,144. Nearly all of the more expen­ sive routes have been superceded by railroad service. The cost of the star service must, therefore, rapidly decrease in the Western States and Territories. The Postmaster General, however, calls at­ tention to the constant ly-increasing cost of tho Railway Mail Service as a serious difficulty in the way of making the department self-sus­ taining. Oar postal intercourse with foreign countries bas kept pace with the growth of the domestio service. Within the past year several countries and colonies have declared their adhesion to the Postal Union. It now includes all those which have an organized postal service, except Bolivia, Costa Rica, Sew Zealand and the Brit­ ish colonies in Australia. As has been already stated, great reductions have been made in the expense of THE STAB-ROUTE SERVICS. The investigations of the Department of Jus­ tice and Postollice Department have resulted I in the presentation ot indictments 'ig'iust | persons formerly connected with that service, accusing them of offences against tlie United States. I have enjoined upon the officials who are charged with the conduct of tho cases on the part of the Gov­ ernment and upon the eminent counsel, who before my accession to tne Presidency, wero called to their assistanoe. the dutv of prose­ cuting with tho utmost ri^>r of the law all persons who may be found chargeable with lrlends upon the postal service. Tho Acting Attorney General caljs attention to the necessity of modifying the present sys­ tem of COURTS OF THE UNITES a necessity duo to the large iucreaee of busi­ ness, especial IV in the Supreme Court. Litiga­ tion in our Federal tribunals became greatly expanded after" the close of the late war. So long as that expansion might lie attributable to tho abnormal condition in wliich the commu­ nity found iteelf immediately after the return of peace, prudence required that no change be made in the constitution of our judicial tribu­ nals. But it has now become apparent that an immense increase of litigation lias directly re­ sulted from the wonder! UL growth or develop­ ment of the country. There is no ground FOJ belief that the business of the United States courts will over be less in volume than at present. Indeed, that it is likely to be much greater is generally recognized bv the L>;nch and bar. In view of the fact that Congress has already given much consideration to this su ĵeci, I mako no suggestion as to detail, but express the hope that your deliberations may result in such legislation as will give early re­ lief to our overburdened court ARIZONA. The Acting Attorney General also calls attention to tho disturbance of the pnblio tranquillity daring the past year in tha Terri­ tory of Arizona. A band of armed despera­ does known as "cow-boys," probably num- at Hampton, Carlisle and Forest Grove should not only encourage a mora goneroos provision f*r the support of these institu­ tions, but should prompt the establishment of others of a similar character. They an doubtless more potent for good than the 4MJ schools upon the reservation, as tbs pupils are altogether separated from the surroundings of savage life and brought into CONSTANT contact with civilisation. There are many other phases of this subject which are of great interest but which cannot be in­ cluded within the becoming limits of this com­ munication. They are discussed ably in tbs roport# of the Secretary of the Interior and at Commissioner of Indian Affairs. For many years the Executive, in his annua message to Congress, has urged the necessity for stringent legislation for THE SriTlU.itsiON OF POLYGAMY in the Territoi i .-S, especially in UTAH; The ex­ isting statute T or the punishment of this odioijf crime, so revolting to the moral and religions sonse of Christianity, has been persist® atly and contemptuously violated ever since its en­ actment Indeed, in spite of commendable efforts on the part of the authorities who represent the United States in that Terri­ tory. the law has, in very rare in- »«.U. i» commiuiDg U.SU I herents of the Mormon church, which r< committing acts of lawlessness and brutality which the local authorities have been unable to repress. The depre­ dations of these "cow-bovs" have also been extended into Mexico, which tho marauders reach from the Arizona frontier. With every disposition to meet the exigencies of the case, I am embarrassed by lack of authority to deal with them effectually. The putiisiiiiK ut of crimes committed within Arizona, should, ordinarily, of O.'Uise, be left to tne Terr;* """ *' T) -* • «•>--- npon polygamy as its ooraer-stone, have r»- CJUTIV been peopling in large numbers IdabiL Anzon-T, and other of our Western Territories, is w.Jl calculated to excite 1US LIVELIEST INTEREST AND APPREHENSION. 1L imposts upon Congress ana tne Executive the duty of opposing to this barbarous system all the power wliich under the ooustitutiuti itoild authorities. But it is wocthv ot 'AN IOR it* destruction. Befer- condderatiou whether acts which necessarily •"J'^HAS been already made to the obstructions broil the United State* UNTH R.^H- W hicii tae LMREA otates officers kave encoun-tend to embroil the United States with neigh­ boring governments should not be declared crimes against tlie Uuited States, Some of the incursions ailuded to may perhaps be witnin the scope of the law. Iicvis-'d Statuses, section 5,288, forbidding " MiliUry expeditions or en­ terprises" against friendly states. But in view OF tne speedy assembling of your body, I have preferred to await such legislation as in your wisdom the occasion may socm to demand. It may, perhaj^S, be thought proper to provide that the setting ou foot with­ in our OV.TI territory ef brigandage and armed marauding expeditions against friendly nations and their citizens shall be punished as an of­ fense against the United States. I will add that, in the event of a request from tho Ter­ ritorial Government for protection by tbe United States against "domestic vio­ lence, this Government would be powerless to render assistance. The act of 1795, chapter 36, passed at the time wheu Territorial Governments received l.ttle atteution from Congress, enforced thiB duty of the United States ouly as to State Gov­ ernments; but the act of 1807, chapter 39, ap- Slied also to Territories. This law seems to ave ramiined in force until the revision of the statutes, when provision for tho Territories was dropped. I am not advised WHOTLIT-r tins alter­ ation was intentional or accidental, but as it seems to me that the Territories should bo offered the protection wnich is accorded \o Suites by the constitution, I suggest legislation to that end. It seems to me that whatever views may pre­ vail as to the policy of recent legislation by which the army has ceased to be a part of posse comitatus, an exception might well be made for permitting tne military to assist the civil territorial authorities M enforcing the laws of the United States. This use of the army would hot seem to be within the alleged evil against which that legislation was aimed, fro n sparseness of population and other cir­ cumstances. It is often quito impracticable to summon a posse in places where ofiicers of justice require assistance, and where a mili­ tary force is within easy reach. THE REPORT OF TOE SECRETARY OF THE IN­ TERIOR, with accompanying documents, presents an •laborate account of the business of that de­ partment A summary of it would be too ex­ tended for this place. I ask your careful atten­ tion to the report itself. Prominent among tbe matters wtnch challenge the attention of Cougress AT its present session is THE MANAGEMENT OF OUR INDIAN AFFAIRS. While this question has been a cause of trouble and embarrassment from the infancy of the Government, it is but recently that any encoun­ tered in their efforts to punish the violations of the law. Prominent lunong the obstacles is the difficulty of procuring legal eviduuee suffi­ cient to warrant a conviction, even IN tlie case of the most n itorions olTondars. Your attention IS called to the opinion of the Supremo Court of tho United States explain­ ing its judgment of reversal in the case of Miles, who had been convicted of bigamy in Utah. The court refers to the fact that tha secrecy attending the celebration of marriages iu that Territory makea the suppression of that part of polygamy very difticult, and the proprie­ ty- is ST ggested ofymodifying that law of evi- DENOD which now makos a wife incompetent to testify against her husband. Tnis sug­ gestion is approved. I recommend also the PIPAGE of an act pDvidtnt; that in the Territo­ ries of these United States the fact that a woman has been married to a person CHAINED with big­ amy shall not disqualify her as a witness upon his trial for that offenie. I further recommend 1-gislation by whioh any person solemnising a m .mage in any of the TERRITORIES shall be required, under stringent penalties for no ;lect or refusal, to tile a certificate of such m image in TL>2 Supreme Court of the Ter- ri_-••}', unless <YI:RP'E»I sh> 11 nv.T-e or devise eth r practicable measures for obviating the dun S RTHICLI have uitnorio * t INI'-d tho EH oris to suppress this iniquity, I assnreyou OI my determined purpose to co-operate with y -N in any lawful and discreet measures which m iy be proposed to that end. Although our sysiem of government doss not contemplate tnat the nation should provide or support a sys.em for the education of our people, no measures calculated to provide that general intelligence and virtue upon which the perpetu­ ity of our institutions so greatly depend nave over been regarded with indifferent e by cither Congress or the Executive. A very large portion OF the pull o domain has been, from tima to time, devoted UI IN« promotion of tin: O.A-C OF education. TR.ere snowa special reason why, by setting apart tho proceeds of the sales of public lands, or by sonie other meai B, the Government should Hid the work of eduoation. Many who now exercise tho right of suffrage are unable to read the ballot whieh they cast Upon many who had just omerged from a | condition of slavery were suddenly devolved the responsibilities of citizenship in that por- I tion of the country most impoverished by ' war. I have BOEU pleased to learn fr»n the report of the Commissioner of Education that there has 1-ecn lately a commendable increase " OR interest and effsrt for their instruction, but all that cm be done by local legislation and private generosity should be supplemented by MO O... su -h sid as can be constitutionally afforded by effort has been made for its solution, at once i ' National Government. I would suggest serious, determined, consistent and promising ; 11 ANY FUND be dedicated to this purpose, success. It has been easier to resort to enliven- ^ maybe wisely distributed in the different ient makeshifts for tiding over the temporary I ^EB according to tho ratio of illiteracy, as by difficulties, than to grapple with the great i>or- j this means those locations which are most in manent problem, and aoccrdingly the easier i such assistance will reap the especial oourse has almost invariably boon pursued. ! benefits. B was natural at a tims when the ! T.'IU BEFOBT OF THE COMMISSIONS* OF AOBI- national territory Beamed almost illimitable, and sontained many millions of acres far south of the bounds of civilized settlement, that a policy should have been initiated which, mors than aught else, has bean the fruitful source of our Indian complications. I refer, of oourse, to the policy of dealing with the various Indian tribes as separate nationalities ; of regulating them by treaty stipulations to the occupancy of immense reservations in the West, and of encouraging them to live undisturbed, by any earnest and well-directed efforts, and to bring them under tho influences of civilization. The CULTURE exhibits results of experiments in which that department has LIRM engaged during tlie past y "ir, and makes important sugg'̂ tions in ref­ erence to the agri iultu a dovel. pnient of ti e country. The steady increase of our popula­ tion, and the consequent addition to tho num­ ber of those engaged in the pursuit of hus­ bandry, are giving to this department a growing dignity and imjiortance. The Commissioner's suggestions touching its capacity for greater usyfulnoss deserve attention, as it more and more commends itself to the interest whioh it was cre&ttd to promote. V it appears from ' THE REPORT OF THE COMMISSIONER OF PENSIONS unsatisfactory results which have sprung from this policy are becoming apparent to alL ., . . . . . , . As tho white settlements have crowded the ! that since 1860 789.003 ongma! pension claims borders of the reservations, the Indians, some- ! H UE been filed, 4O'>,949 of these have LI'.en AL- times contentedly and sometimes against their will, have been transferred to other hunting grounds, from which they have been again dis­ lodged whenever their new-fouud homes have been desired by the adventurous settlers. These removals, and the frontier collisions by which thev have often been preceded, have led to frequent and disastrous conflicts between the races, it is profitless to discuss hero which of them has*been chiefly responsible for the dis­ turbances whose recital occupies so large a space upon the pages of our history. We have to deal with THO appalling fact that though thousands of lives have been sacrificed and hundreds of millions of dollars expeuded IN the attempt to solve the Indian problem, it had until tho last few years seemed scarcely nearer A solution than it was half a century ago. But the (low rnment has of late been oautiously but steadi ly feeling its way to the adoption of a policy which has already produced gratifying results, and winch, in my judgment, is likely, if Congress aud the Executive accord in its support, to relieve us ere long from the diffi­ culties wliich have hitherto beset us. For tlie success of the efforts now making to introduce among the Indians the customs and pursuits of civilized life, and gradually to ab­ sorb them into themai-sof our citizens, sharing their rights and holdeu to their responsibili­ ties, there is IMPERATIVE need for legislative action. My suggestions in that respect will be chiefly ,-UCII as have been already lowed and inscribed on the pension roll, 72,539 have baen rejected aud abandoned, oeing 13 per cent, of the whole number of ela:ms set­ tled. There are now pending for soitlement 266,575 original pension claims, 22,704 of which wero filed prior to July 1, 1880. These, when allowed, will involve the payment of arrears from the date of the discharge in the case of aninvalid, and from the datocf death or termina­ tion of a prior right in all other caseB. From all the data obtainable it is estimated that 15 per cent of the claims now pending will be re­ jected or abandoned. This would show the pr . bable rejecti J I of 34,040 cases, and the probable ADM^MON of about 193,000 claims, all of which involve the payment of arrears of pensions. With the pre-ent force employed, the number of adjudicaiious remaining the same, and no new business intervening, this liUTnhor of claims (193,000) could be acted upon in A PERIOn OF SIX TEARS, and, taking Jan. 1, 1J-61, as a near period from which to «st UN ale in each case an average amount of arrears, it is found that every case allowed would require for the first payment upon it the sum of $1,350. Multiplying this amount by the whole numi er of probable ad­ missions gives $250,000,000 as the sum re­ quired for first payments. This represents the sum which must be paid upon claims which were filed before July 1, 1880, and are now pending and entitled to the benefits of Arrears act. From this amount ($250.000,000) may ' * called to the attention of Congress, and -deducted from ten to fifteen millions for have received, to some extent, its considera­ tion . Fust , I recommend the passage of an act makiug the laws of the various States and Territories applicable to the Indian reservations within their borders and extending the laws of the State of Arkansas to the portion of the IU- dinn Territory not occupied by the five civilued tribes. Tho Indian should receive THE R.uoTEcrioN or THE LAW. HO should be allowod to maintain NI court his rights of person and property. He has re­ peatedly begged for this privilege. Its exer­ cise would be very valuable to him in his prog­ ress toward civilization. Second, of even §reater importance, is a measure which has een frequently recommended by my prede­ cessors in office, and in furtheiance of which several bills have been from time to time introduced in both houses of Con­ gress. The enactment of a general law per­ mitting the allotment in severalty, to such Indians at least as deserve it, df a reasonable quantity of land, secured to to th>-m by PATENT ant for their own protection made inali< n iblo for twenty or twenty-five years, is DEMANDED fur their present welfare and their permanent ad­ vancement. Iuretum forsuch considerate action on tbe part of the Government there is reason to believo that tho Indians in large numbers wouid be persuaded to sever their tribal re­ lations; and to engage at once iu agricultural pursuits, and that it is now for their best interests to conform their manner of life to ti e new order of things. By no greater inducement than the insurance of permanent title to the soil can they be led to engage iu tho occupation of tilling. The well-attested reports oi their increasing interest in husband­ ry justify the hope and lielief that the euact- niuut of such a statute as I recommend tvould be at once attended with gratifying results. A resort to the allotment system would have a direct and powerful influence iu dissolving tho tribal bond, which is a promiueiu Seatui e of savage life, and which tends so strongly to perpetuate it there. I advise a liberal appropriation for tbe sup­ port of Indian schools, because of my confident belief that such a eourse is consistent with tbe wisest economy even among the most uncul­ tured Indian tribes. There is reported to bo»a general and urgent desire ou the part of the chiefs and the older memoers for the educa­ tion of their children. It is unfortunate, in view of tnis fact, that daring the past year the means whicn have been at the command of the Interior Dp.U't- cases when, the claimant dying, there is no per­ son who under the law would be entitled to succeed to the pension, leaving $235,000,000 as the probable amount to be paid. Iu these esti- •aates no account has been taken of tho 38,500 eases filed since June 30, 188^. and now pend­ ing, which must receive attention, is currenl business, but which do not involve payment of any arrears beyond the date of filing the claim. Of this number it is now esti­ mated that 86 per cent will be allowed, as has been state!. With the preeent force of the Pension Bureau. 67 I clerks, it is esti­ mated that it will take six years to dispose of the claims now pending. It is stated by the Commissioner of Pensions that if an addition of 250 clerks (inoreasing the adjudicating foroe rather thau the mechanical), double the amount ef work conld be accomplished, so that these cases could be acted upon within three years. Aside from tho consideration of justice which may be urged for a speody settlement of the claims now on tho files of tbe Pension "Office, it is no less important on the score of e.couomy, inasmuch as fully one-third ot the clerical force of the office is "now wholly occupied in giving attention to correspondence with thousands of claimants whose cases have been on the flies for tho past eighteen years. The fact that a suui so enormous may be expended by the Government to ME- T the demands for arrears of pen-ions is an admonition to Congress and the L; \ocu- ive to give cautions consideration to anv sim inr project in the future. The great t iiipt;uiou to the presentation of fictitious claims afforded by the fact that the average sum obramed upon each application is $1,300, leads IIU- to suggest the propnety of makiug some S)>eeiat appropriation for the prevention of fmudr _ INTERNAL IMPROVEMENTS. I advise appropriations for such internal improvements as tbe windom of Congress may GO'.-M to BE of public importance. Tne neces­ sity ol improviiu; tho navigation of the Missis- >JJ»I»i river justifies a s|mciai allusion to that SUBJECT I suggest tllo adoption of some NN-FSUIE for removal of obstructions which now impede the navigation of that great chan­ nel of eommeivc. THE CIVIL SERVICE. In my letter accepting the nomination FOR the Vice Presidency 1 stated that in mv judg­ ment " no nian-should be incumbent of" au of­ fice the duties^oT which he is for any C&NSO ninit to perform, or who is lacking in the aliii- ty. fidelity or integrity WHDI A PROPER udmin- iration of sucn o:tiee demands." inis T-euti--ment, lor the purpose of Inilnm instruction, j have proved to be utterly MADI quate. L'be | M>.UT would doubtless meet with general acqui of the which are in operation esconce, but opinion has been widely divided