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President Annual Communica­ tion to Congre ̂ Our Foreign Relations y • 1 % in a Highly Satisfac­ tory Condition.. [action of the )'{?* Urged. He Renews His Recommenda- f tion for a Suspension of Silver Coinage. -- The Fishery Troubles--The I Cutting Case--Civil-Ser- V. ™e Beform . ^ , • • o . v , * ^ ; MSL Interstate Traffic--Capi- -#1 and Labor ?U -•* - | The United States and China ; Ifegotiating Rwrnrdfng €hi- s /. nese Immigration. TNa necessity for Coast Menses Explained and Urged UplR '•'11 Congress. W btdir.k i&id Prlsmu for Federal OMTiets. , d? \tz *' To the Congress of the United States: A„ *>. ; * Hi the discharge of a constitutional duty, and ' a 'i following a well-established precedent in the f1 J • $' (Executive office, I herewith transmit to the ^ t** ' ^Congress, at ita reassembling, certain informa- u, " y % JUan concerning the state of the Union, together i«T With such recommendat,ions for legislative con- £u '• ' -* atderation as appear necessary and expedient. *•* .A**' >. FOREIGN RELATIONS. '•' * ,, .' The Government has consistently maintained 5 V-. its relations of friendship toward all other powers, and of neighborly interest toward those •y$-^Srthows poiiOTllli are contiguous to oar own. % - i- ,Jwmw questions have arisen daring the past year §* -J" %• * 'with other Governments, and none of those are . * -Jbayond the reach of settlement in a friendly •'v CLAIMS AGAINST CHILL % We are as yet without provision foe the set- $4ontlit of claims of citizens of the United .. States against Chill for injuries during the late v >;• • ,* War with Pern and Bolivia. The Mixed Com- '<l;\"V';..;i«Bisaioos, organized under claims conventions, in,j- .. - eooeloded by thachlli Government with certain Baropean states, have developed an amount of friction which we trust can be avoided in the ^ya^onwhich oar representative at Santiago THE CHINESE QUESTION. The cruel treatment of inoffensive Chinese I regret to say, been repeated in some-of p. 3; the far Western States and Territories, and acts violence against these people beyond the i§ i<=£"/ *•'- ®ower of the local constituted authorities to .> prevent and difficult to punish, are reported 1}, . ' even in distant Alaska. Much of this violence fr-V" can be traced to race prejudice and competition •sfkf «C labor, which cannot, however, justify the op- J.• •rasaitm of strangers whose safety is guaranteed i onr treaty with China equsllj with the most « favored nations. In opening our vast domain to k . •; alien settlement, the purpose of our lawgivers i. was to invite assimilations and not to provide en arena for endless antagonisms. Tha C< paramount duty of maintaining pnblic K€ ; -<*der and defending the interests of people may require the adoption jagores of restriction, but thev should not VV ' Mertte the oppression of individuals of a -- suiwlsl race. I am not without assurance that . the Government of China, whose friendly dis- •Tr "< position toward us I am most happy to recog- S, .nias, will meet ua half wav in devising a com- t; ^JWhenrtWe remedy, by which an effective limitation of Chinese emigration, joined to pro- ' tictiuu of those Chinese subjects who remain in ^ '!0||a eonntry, may be secured. I^egislati-jn is ^ Heeded to execute the provisions of our Chinese ^ • . r» eanvention of 1680 touching the opium traffic. IT*?;.' I WTEBOCEASIC TRANSIT. While the good-will of the Colombian Govern- * ^ meat toward our country is manifest, " „• sitoatioo of American interests on ' Trthmui of Panama has at times :"/ i. yrtieited _ concern. _ and. invited friendly action Units scarci ofl&18."N , m_. .... multiplied; the methods of oondaetinK the fin­ eries have been wholly ohaaged; and ail this is nooessaHly entitled to candid and care­ ful consideration to the adjustment of the tonus and conditions of intercourse and commerce between the United States and their no ghbors alone a frontier of over AMU miles Thi-i propinquity, oommoidty of language and occupation, and similarity of political ana social institutions, indicate the puMicability and oto- Tfous wisdom of maintaining mutuallybaoe- fioial , friendly relatione. White I am ttii- feignedly desirous that such relations should exist between us and the inhabitants of Canada, yet the notion of their officials during the past season toward our fishermen has been such as to seriously threaten their continuance. Although disappointed in my efforts to secure a satisfactory settlement of the fishery question, negotiations are atill pending with reasonable hepo that before the close of the present ses­ sion of Congress the announcement may be made that an acceptable conclusion has been reached. At an early day there may be laid before Con- Sess the correspondence of the Department of ate in relation to this important subject, si that the history of the past fishing season mav be fully disclosed and tho action and the atti­ tude of the administration clearly compre­ hended. More extended reference is not doom­ ed necessary in this communication. THE ALASKA BOUNDARY. The recommendation submitted last year that provision be made for a preliminary r^con- noissance of the conventional boundary line be­ tween Alas'ia and British Columbia, Is re­ newed. THE HAWAIIAN ISLANDS. I expressed mv unhesitating conviction that the intimacy of our relations with Hawaii should 1M? emphasized. As & result of the re­ ciprocity treaty of 18<5, those islands, on the highvuy ot orient*! and Australian traffic, are virtually an outpost of American commerce and a stepping-stoue to the crowing trade of the Pacific. The Polynesian island groups have been so absorbed by other and more power­ ful governments, that the Hawaiian Islands arc left almost alone in the enjoyment of their autonomy which it is important for us should be preserved. Our treaty is now terminable on one year's notice, but propositions to abrogate it would be, in my judgment, most ill-advised. The paramount influence we have there acquired, once relin­ quished, could only with difficulty be regained, and a valuable coign of vantage" for ourselves might be converted into a stronghold for our commercial competitors. I earnestly recom­ mend that the existing treaty stipulations be extended for a futher term of seven years. A recently signed treaty to this end is now before the Senate. The importance of telegraphic communica­ tion between these islands and the United States should not be overlooked. RELATIONS WITH JAPAN. The question of a general revision of the trea­ ties of Japan is again under discussion at To- kio. As the first to open relations with that em­ pire and as the nation in most direct commer­ cial relation with Japan, the United States have lost no opportunity to testify their consistent friendship by supporting the just claims of Ja­ pan to autonomy and independence among na­ tions. A treaty of extradition between the United-States and Japan, the hrst concluded by that empire, has been lately proclaimed. THE WEAKNESS OF LIBERIA. and the difficulty of maintaining effective sov­ ereignty over its outlying districts have exposed that republic to encroachment. It can not be forgotten that this distant community is an off­ shoot of our own system, owing its origin to ihe associated benevolence of American citizens, whose praiseworthy efforts to create a nucleus of civilization in the dark continent have com- manded respect and sympathy everywhere, es­ pecially in this country. Although a formal protectorate over Liberia is contrary to onr traditional policy, the moral right and duty of the United States to assist in all proper ways the maintenance of its integrity is obvious, and has been consistently announced dur­ ing nearly half a century. I reccommend that in the reorganization of'our navy, a small vess -l, no longer found adequate to our needs, be presented to> Libera to be employed by it in the protection of its coastwise revenues. OCR SISTER REPUBLIC. The encouraging development of beneficial and intimate relations between the United States and Mexico, which has been so marked within the past few years, is at once the oc­ casion of congratulation and of friendly solici­ tude. I urgently renew my former representa­ tion of the need of speedy legislation by Con­ gress to carry into effect the reciprocity com­ mercial convention of January £20, 1333. Our commercial treaty of 1831 with Mexico was terminated according to ita' provisions in 1861, upon the notification given by Mexico, in pursuance of her announced pol­ icy of recasting all her commercial treaties. Mexico has since concluded with several for­ eign governments new treaties of commerce and navigation defining alien rights of trade, property, and residence, treatment of shipping, consular privileges, and the like. Our yet un­ executed reciprocity convention of 1<M3 covers none of these points, the settlement of which is so necessary to good relationship, and propose to initiate with Mexico negotiations for a new and enlarged treaty of commerce and naviga- THE CUTTTNi; CASE. Ill compliance with a resolution of the Senate I communicated to that body on August <2 last, and also to the House of Bejrresentatives, the correspondence in the case of A. K_ Cutting, an American citizen, then imprisoned in Mexico, charged with the commission of a penal offense in Texas, of which a Mexican citizen was the object. After a demand had been made for his release the charge against him was amended so as to include a violation of Mexican law within Mexican territory. This joinder of al­ leged offenses, one within and the other exterior to Mexico, induced me to order, a special investigation of the case, pen fi­ ef i ing which Mr.Cutting was released. The incident has, however, disclosed a claim for jurisdiction by Mexico novel in our history, whereby any offense, committed anywhere by a foreigner, penal in tiie place of its commission, and of which a Mexican is the object, may, if the offender be found in Mexico, be there tried and punished in conformity with Mexican laws. Jurisdiction was sustained by the courts ot Mexico in the Cutting case and approved by the executive branch of that Government upon the authority of the Mexican statute. The Appellate With the of the Isthmian disturbances and cf the State of Panama into a Fed- , „ a«ldls«rict under the direct government of the . an«t international usage A sovereign S^onstlbiticnal administration Ht has jurisdiction of offenses which take effect Court, in releasing Mr. Cutting, decided that the abandonment by the Mexican citizens-ag­ grieved by the alleged crime < a libelous pub­ lication;, removed the basis of further prosecu­ tion, and also declared justice to have been satisfied by the enforcement of a small part of the original sentence. The admission of such a pretension would be attended with serious re­ sults, invasive of the jurisdiction of this Gov­ ernment, and highly dangerous to our citizens in foreign lands; therefore I have denied it, and protested against ita attempted exercise, as unwarranted by the principles of law and international usage. A rr - If'.; nonstttataooal administration at Bogota, a new «der of things has been inaugurated which, , • - j nttfrough as yet somewhat experimental and af- ••flMtPag scope for arbitrary exercise of power jr.' tho delegates of the national authority, ' jgxoxniaes much improvement. '1- THE "LIBERTY" STATUE. s - " - , _ T h e sympathy between the people of the - svnited States and France, bora during our '•gOfcmtal Itrufgle for independence, and con- . *{j""'ng to-day, has received a fresh impulse in ~ , *>• successful completion and dedication of the Ik.*',. '1 S®Oloesal statue of "Liberty £nlightening the yf World," in New York harbor, the gift of French- , -• Jtnan to Americans. < ? 8trBXABnCECA8X.CS. SfsX'fe.' A convention between the United States and * (v «W*afn other powers for the protection of sub- j/s -> L marine cables was signed at Paris on March 14, f- ' J884, and has been duly ratified and proclaimed * iby this Government. By agreement be- " kthe high contracting parties. Wh convention is to go into effect Wt . " <he 1st of January next, bat the legislation re- p/; t <|Uiied for its execution in the United States has l,fS! '• not yet been adopted. I earnestly recommend i '• its enactment. Ife" • „ KATURALIZED GEBXAXS ABROAD. ?E/, •" Caaes have continued to occur in Germanv IV • "Be to much correspondence in relation .<?*» Privilege of sojourn of our naturalized * origin revisiting the land of S5' -i Vs^s -5=^ y-t i am happy i J »MM« i.n»^ ottr re. i -i fatioMWith that country have lost none ot their eecaetoroed cordiality. " TOHKAGE JtXTKB. '** f ®Wms for interest upon the amount of ' gwwi' dwi illegally exacted from certain & ^eflnpiivsteamship lines were favorably re- V 5S5S.™ ®2*? ,"°ateB of Congress at the last "' Si Bna' I trust, will receive final aadfavor- - V able attention at an early day. " ' _ THE FISHERY TROUBLES. The recommendation contained in mv last an- nual message inrelation to a mode of settlement within his territory, although concerted or com­ menced outside of it, but the right is denied of any foreign sovereign to jmnish a citizen of the United States for an offense consummated on our soil in violation of our laws, even though the offense be against a subject or citizen of such sovereign. The Mexican statute in ques- r tion makes the claim broadly, and the princi- i pie, if conceded, would create a dual resnonsi- | bility in the citizen, and lead to a confusion I destructive of that certainty in the law which ' is an essential of liberty. When citizens of the United States voluntarily go into a for­ eign country they must abide by"the laws there in force, and will not be protected by their own Government from tha consequences of an of­ fense against those laws committed in such for­ eign country; but watchful care and interest of this Government over its citizens are not relin­ quished because they have gone abroad, and if charged with crime oommitted in a foreign land, a fair and open trial, conducted with de­ cent regard for justice and humanitv, will be demanded for them. With less than that this Government will not be content, when the life or liberty of its citizens is at stake. What­ ever the degree to which extra territorial ciminal jurisdiction may have been formerly allowed by consent and reciprocal agreement among certain of the European states, no such doctrine or practice was ever known to the laws of this country, or of that from which our insti­ tutions have mainly been derived. In the case of Mexico there are reasons espe­ cially strong for perfect harmony in the actual exercise of jurisdiction. Nature has made us irrevocably neighbors, and wisdom and kind feeling should make us friends. The overflow of capital and enterprise from the United States is e potent factor in assisting the development of the resources of Mexico, and in building up the property of both countries. To assist this good work, ail grounds of apprehen­ sion for the security of person and property VT", T"™" 1 should be removed, and trust that, in the inter- Ibvth A- if- , °f British ests of good neighborhood, the statute referred M0«b America, so long a subject.of anxious dif- to will be modified so as to eliminate the pres­ ent possibilities ot danger to the peace of the two countries. THE NETHERLANDS. The Government of the Netherlands has ex­ hibited concern in relation to certain features of our tariff laws, which are supposed by thom to be aimed at a class of tobacco produced in the Dutch East Indies. Comment would seem unnecessary upon tiie unwisdom of legislation appearing to have a special national discrimin­ ation for its object which, although uninten­ tional, may give rise to injurious retaliation. PEITSIA. The establishment, less than four yoars ago, of a legation at Teheran is bearing fruit in the interest exhibited by the Shah's government in the industrial activity of the United States and the opportunities of beneficial interchange. PER0. Stable government is now happily restored in Peru by the election of a constitutional Presi- dent.^and a period of rehabilitation is entered upon ; but recovery is necessarily slow from the exhaustion caused by the late war and civil disturbances. A couvention t) adjust by arbi­ tration the claims of our citizens has been between the United States and Great nuetti VM met by an adverse vote of the sen- mt» April 18th last, and thereupon negotiations wm instituted to obtain an agreement with Her lMftaanie Majesty's Government for the promul­ gation of such joint interpretation and detini- uon of the article of the convention of IMH •elating to the Territorial waters and inshore fisheries of the British provinces, as should se- w9r £<u}adiiut "gbts from encroachment by United States fishermen, and, at the same time, insure the enjoym nt by the latter of the privileges guaranteed to them by soch conven- The questions involved are of long standin" of grave consequence, and from time to time for neany three-quarters of a centurv have given rise to earnest international discussion not unaccompanied by irritation. Temporary arrangements by treaties have served to allay Qtattm, Which, however, has revived as each treaty has terminated. _ Tb* last arrangement, undsr the treaty of 7KL ™wo8»fced> after due notice by the VKma States, on June 30, 1885, but I was en- WMM to obtain for our fishermen for the re- Itl&ra^dSnv^Wmtait^^0 f»u 11)rom,8e<1 and under consideration. S 2 ^ 5 j S ? ^ - . g ^ i n a t i ' i g t r e a t y . T H K TESTIMONIALS SENT TO SIBERIA _,fcn negotiated, although invested with plenary telummillti jH? b,ora 8liborilV"?? j tionea xne expense at the different cua power to make a permanent settlement were , tion of the recOgnl- I houses of collecting this increased customs rev- mm A • ii i A ^ temporary arranizemect' nft^r iiaU * given to tb© Joiiimett© survivors, f enue was leas than the expense attending the ^ which t^ , irjtere tJm»S r ^cco,T®li""hed tus misniou His j collection of such revenul for the ureced>52 to the Btinulfitifma T5" : interesting report will be submitted. It is , year tn«£y Of MUL as to tlia first artiela pleasant to know that this mark of apprecia- consumctlon iattafSStorv to tJh ' 1 ha'l ^ welcomed by the Russian gov-w Bai!sractory_to both • ernment and people aa beftts the traditional friendship of the two countries. Tflli 8 A MOAN ISLANDS. Civil perturbations in the Samoan Islands have during the past few years been a source of considerable embarrassment to tha three gov- octonMita, Goana&r, States whoee toMalrighUlnthatin airtMd by treaties, VTWHWWW*. administration and the oonlliat «f on in the lslandshay* ledKtngliikUetoa „ seek alliance or protection in some one quarter, nfacdlaaa of the distinct engagements whereby no one of the three treaty powers may aoqaire any paramount or exclusive interest. Ua May last Stalietoa offered to place Samoa under the protection of the United States, and the la to Consul, without authority, as­ sumed to grant it. The proceeding was promptly disavowed,and tho over-sealous official recalled. Special agents ot the three govern­ ments have been deputed to examine the situa­ tion in-the islands, with a change in the repre­ sentation of all three powers, and a harmonious understanding between them. The peace, pros­ perity, autonomous administration, and neutral­ ity of Samoa can hardly fail to be secured. CUBA AND PORTO RICO. It appearing that the Government of Spain did not ext nd to the ting of th • United States in the Antilles the whole measure of reciprocity requisite under o ir statute for the continuance of ihe suspension of discriminations against the Spanish flag in our ports, I was con- Btrained in October last to rescind my predecessor's proclamation of Feb. 14, 188i, permitting such suspension. An arrangement was, however, speedily reached, and uiK>n noti­ fication from the Government of Spain that all differential treatmeut of our vessels and their canoes from the United States or from any foreign country, had been completely and abso­ lutely relinquished, I availed myself of tlie dis­ cretion conferred by law, and issued on the J7tk of October my proclamation declaring recipro­ cal suspension m ths United States, it is most gratifying to bear testimony to tho earnest spirit in which the Government of the Queen regent has met our efforts to avert the initiation of commercial discriminations and reprisals, which arts ever dangerous to the ma­ terial interests and the political good-will of the countries they may affect. The profitable development of the large commercial ex­ changes between the United States and the Spauish Antilles is naturally an object of solic­ itude. Lying close at our doors, and finding here their maikets of supply and demand, the welfare of Cuba and Porto Kico and their pro­ duction and trade are scarcely less important to us than to Spain. Their commercial and financial movements are so naturally p. part of our system that no obstacle to fuller, freer intercourse should be permitted to exist. The standing instructions of our representatives at Madrid and Havana have for years been to leave no effort unessayed to further these ends, and at no time has the equal good desire of Spain been more hopefully manifested than now. The Government of .-pain thus removing the consular tonnage fees on cargoes shipped to the Antilles,, and by reducing passport fees, has shown its recognition of the needs of less tram- eled intercourse. TURKEY. An effort has been made during the past year to remove the hindrances to the proclamation of the treaty of naturalization witl, the Sublime Porte, signed in 18(4, which has remained inop­ erative owing to a disagreement of interpreta­ tion of the clauses relating t > the effects of the return to und Bojourn of a naturalized citizen in the land of his origin. I trust spon to be able to announce a favorable settlement of the differ­ ences as to this interpretation. It has been highly satisfactory to note the im­ proved treatment of American missionaries in Turkey, as has been attested by their acknowl­ edgments to our late Minister to that Govern­ ment of his successful exertions in their behalf. VENEZUELA. The exchange of ratification of the convention of December 5,1885, with Venezuela for the re­ opening of the awards of the Caracas commis­ sion uudsr the claims convention of 1886, has not yet been effected, owine to the delay of the Ex­ ecutive of that Bepublic in ratifying the meas­ ure. I trust that this postponement will be brief; but Bhould it much longer continue, the delay may well be regarded as arescision of the compact, and a failure on the part of Venezuela to complete an arrangement so persistently sought by her during many years, and assented to by this Government in a spirit of interna­ tional fairness, although to the detriment of holders of bona fide awards of the impugned commission. CITIZENSHIP AND NATURALIZATION. I renew the recommendation of my lost annual message, that the existing legislation concern­ ing citizenship und naturalization be reused. We have treaties with many states providing for the renunciation of citizenship by natural­ ized aliens, but no statute is found to give effect to such eugagements, nor any which pro­ vides a needed central bureau for the registra­ tion of naturalized citizens. EXTRADITION LAWS. Experience suggests that our statutes regu­ lating extradition might be advantageously amended by a provision for the transit across our territory (now a convenient thoroughfare of travel from one foreign country to another) of fugitives surrendered by a foreign Govern­ ment to a third State. Such pro­ visions are unusual in the legislation of other countries, and tend to prevent the miscarrying of justice. It is also desirable, in order to remove present uncertainties, that authority should be conferred on the Secretary of State to issue a certificate in case of an ar­ rest for the purpose of extradition to the officer before whom the proceeding is pending, show­ ing that a requisition for tne surrender of the person charged has been duly made. Such a certificate, if required to be received before the prisoner's examination, would prevent a long and expensive iudicial inquiry into a charge which the foreign government might not des.re to press. I also recommend that exuress pro­ vision be made for the immediate discharge from custody of persons committed for extra­ dition where" the President is of the opinion that surrender should not be made. INTERNATIONAL COPXBIOHT. _ The drift of sentiment in civilized communi­ ties toward full recognition of the rights of property in the creations of the human intellect has brought about the adoption, by many im­ portant nations, ot an international copyright convention, which was signed at Berne on the 18th of September, 188.-5. Inasmuch as the Constitution gives to Congress the power "to promote the progress of science and useful arts by securing, for limited times, to authors and inventors the exclusive right to their respective writings and discoveries," this Government did not feel warranted in be­ coming a signatory, pending the action of Con­ gress upon measures of international copyright now before it; but the right of adhesion to the Berne convention has been reserved. I trust the subject will receive at your hands the at­ tention it deserves, and that the juBt claims of authors, so urgently pressed, will be dulV heeded. ART DUTIES. Representations continue to be made to me of the injurious effect upon American artists studying abroad, and having free access to the art collections of foreign countries, of main­ taining a discriminating duty against the in­ troduction of the works of their brother ar­ tists of other countries, and I am induced to repeat my recommendation for the abolition at that law. * THE CONSULAR RERVICE. Pursuant to a provision of tho Diplomatic and Consular Appropriation act, approved July 1, 1886. the estimates submitted by the Secretary of State for the maintenance of tne consular service have been recast on the basiB of salaries for i all officers to whom such allowance is deemed advisable. Advantege haB been taken of this to redistribute the salaries of the officers not appropriated for, in ac­ cordance with tho work performed, the importance of tho representative duties of the incumbent, and the cost of living at each post. The last consideration has been too often lost sight of in the allowances heretofore made. The compensation which may suffice for the decent maintenance of a worthy and capable officer in a position of onerous and representa­ tive trust at a post easily accessible, and where the necessaries of life are abundant and cheap, may prove an inadequate pittance in distant lands, where the better part of a year's pay is consumed in reaching the p>st of duty, and where the comforts of ordinary civilized existence cad only be obtained with difficulty and at exorbitant cost. I trust that, in considering the submitted schedule, no mis­ taken theory of economy will perpetuate a sys­ tem which in the past has virtually closod to deserving talent many offices where capacity and attainments of a high order are indispen­ sable, and in not a few instances has brought discredit on our national character and entailed embarrassment and evea K«fTc*,ing on those de­ puted to uphold our dignity and interests abroad. In connection with this subject, I earnestly reiterate the practical necessity of supplying some mode of trustworthy inspection and report of the manner in which the consulates are con­ ducted. In the absence of such reliable in­ formation, efficiency can scarcely be rewarded or its opposite corrected. ' Increasing competition in trade has directed attention to the value of the consular reports printed by the Department of State, and the ef­ forts of the Government to extend the practical usefulness of these reports have created a wider demand for them at home and a spirit of emu­ lation abroad. Constituting a record of the changes occurring in trade, and of tho progress of the arts and inventions in foreign countries, they are much sought for by all Interested in the subjects which they embraoe. NATIONAL FINANCES. The report of tho Secretary of the Treasury exhibits in detail the condition of the public finances and of the several branches of the Gov­ ernment related to his department. I esj>ecially direct the attention of Congress to the recom­ mendations contained in this and tho last pro- ceding report ot the Secretary touching the sim­ plification and amendment of tho laws relating to the collection of our revenues, and in tho in­ terest of economy and justice to the Govern­ ment I hope they may be adopted by appropri­ ate legislation. The ordinary receipts of the Government for the fiscal year ended June 31, 188f> were $336,439,727.0U. Of this amount Sl'J'i,- 905,023.41 was received from customs, and SU6,- 805,!):x;.48 from internal revenue, while the total receipts as here stated were S13,719,020.('>8 greater than for the previous year, the increase from customs was but $11,434,034.10, and from internal revenues S4,407,'210.94, making a gain in these items for the last year of $15,841,- '285.04, a falling off in other resources reducing the total increase to the smaller amount men­ tion ed Tne expense at the different custom «ovntri*a 1MM ever been agreed upon. The proe- fp- of etyllMtton and growth of population in the SritUh provinces to which the fisheries in revenue for the preceding by S490.6./8, and the increased re­ ceipts of internal revenue were collected at a cost to the Internal Revenue Bureau of $155,- 944.09 less than the expense of such collection for the previous year. The total ordinary ex­ penses of the Government for the fiscal year ended June 30, 1830, were 9242.483,138.50, being less by 917,788,797 than sueh expendi- ttoSM for tho year preceding, and leav­ ing a surplus in tho treasury at tW close ©f the last fiscal year of &W.936,588.5<i, as against fes,463,771.87 at the dose of the being an increase in sueh s ir- ,817.39. The axpendltures com- of tiie preceding fiscal year, and claHithML wre as follows: For civilexponsos, year aadiftg June 30. 18S6, Wl,935i0 4.01; year ending June 30, 1885, «*,844,9i'2.11. For foreign Intercourse, 1886, *133,238,088; 18S.1, $543,9*.Ml. For Indians. 188). •fi»,915,<-17 ; 1885, •BS5kg*9,3G3. For pensions, IMS, $83,4'M,- 804.03; 16SI, $.50,102,'207.-K For military, in­ cluding river nud harbor improvements and arsenal*, 1883, $31,324,152.74; 1885, $18.6/0,578.47. For the Mvy, including vessels, machinery and improvements of navy yards, 188K, 913,'.>()7,- 887.74; 1885, $16,02l.009.i>3. For interest on pub­ lic debt, 1896, $.,it,r>8>,144.97; 1885, 951,886,'250.47. For the District of Columbia, 1885, Qi.tm, S21.89; 1885, 93,449,450.95. Miscellaneous expenditures, including public buildings, lighthouses, and collecting the revenue, 1886, $67,986,783.04,188i; $54,7-28.0 >8,81. For the current year, to end June 30,1837, the ascertained receipts up to October 1,188 >, with such receipts up to October 1,1836, with such receipts estimated for the remainder of the year, amouut to $350,000,000. The expen­ ditures ascertained and estimated for •rhe same: psriod are $'.65,001,010, indicated an anticipated surplus at the close of the year of $90,(K>J,(KiO. \ EXPORTS. The total value of the exiwrts from the United States to foreign countries during the fiscal year is stated and eomiwed with the preceding year as follows: \ For theyear ending JuueUO, 1880. June 90,1843. Domestio merchandise.$66.5,694,5'29 $726,(^2,9«i Foreign merchandise... 18,n6.),wi 15,5X»,809 Gold 48,953,191 3,177,8 >2 Silver 29,511,219 S3,75l.(>33 The value of some of our leading exports dar­ ing the last fiscal year, as compared with the value of the fame for the year immediately pre­ ceding, is here given and furnishes information both interesting and suggestive: For the year ending June 3 J, 1883, June 30,1835. Cotton and cotton man­ ufactures $219,015,576 9813,799,049 Tobacco and its manu- « facture 80,424,903 24,767,305 Breadstuffs 125,846,558 160,370,822 Provisions 60,025,'210 107,332,150 IMPORTS. Our imports during the lawt fiscal year, as compared with the previous year, were as fol­ lows: F 1886. 183 >. Merchandise,;... ...$635,48o,138 $579,580,051.80 Gold... 23,743,849 23,601,693.0) Silver 17 650,307 16,550,627.00 REDUCTION OF THE REVENUE. In my last annual message t j tha Congress attention was directed to the fact that the revenues of the Government exceed its actual needs, and it was suggested that legis­ lative action should bo taken to relieve the people from the unnecessary burden of tax­ ation thus made apparent. In view of the press­ ing importance of the subject, I deem it my duty to again urge its consideration. Tho income of the Government, with its increased volume and through economies in its collection, is now more than ever in excess of public necessities The application of tho surplus to the payment of such portion of the public debt as is now at our option, subject to extinguishment, if continued at the rate which has late­ ly prevailed, would retiro that class of indebtedness within less than one year from this date. Thus a continuation of our present revenue would soon result in the receipt of an annual income much greater than necessary to meet Government expenses, with no indebted­ ness upon which it could be applied. We should then be confronted with a vast quantity of money, the circulating medium of the people, hoarded in the Treasury, when it should be in their hands, or we should be drawn into waste­ ful public extravagance with all the corrupting national demoralization which follows in its train. THE SURPLUS. But it is not the simple existence of this and its attendant evils which furnish the strongest argument against our present scale of federal taxation. Its worst phass is the exaction of such a surplus through a perversion of the rela­ tions between the people and their Government --a dangerous departure from the rules which limit the right of federal taxation. Good gov­ ernment, of which every American citizen boasts, has for its objects the protection of e very person within its borders, with the great­ est liberty consistent with the good of the country, and his perfect security in the enjoyment of his earnings, with the least possible diminution for public needs. When more of the people's sustenance is extracted through the form of taxation than is necessary to meet the just obligations of the Government and the expense of its economical administration, such action becomes ruthless extortion and a violation of the fundamental principles of a free Govern­ ment. The indirect manner in which these exactions are made has a tendency to con­ ceal their true character and their extent. But we have arrived at a stage of superfluous revenue which has aroused the people t3 a realization of the fact that the amount raised professedly for the support of the Gov­ ernment, is paid by them as absolutely, if added to the price of the things whiiih supply their dai­ ly wants, as if it was paid at fixed periods into the hands of the tax-gatherer. Those who toil for daily wages are beginning to understand that capital, though sometimes vaunting its import­ ance and clamoring for tho protection and fa­ vor of the Government, is dull and sluggish till, touched by the magical hand of labor, it springs into activity, furnishing an occa­ sion for federal taxation, and gaining the value which enables it to bear its burden, and the laboring man is thought fully inquiring whether, in these circumstan­ ces, and considering the tribute he constantly pays into the public treasury as he supplies his daily wants, he receives his fair share of ad­ vantages. There is also a suspicion abroad that the sur­ plus of our revenue indicates abnormal and ex­ ceptional business profits, which, under tho sys­ tem which produces such surplus, increase, without corresponding benefit to the people at large, the vast accumulations of a few among our citizens whose fortunos, rivaling the wealth of the most favored in anti-Demo­ cratic nations, are not the natural growtn of a steady, plain, and industrious republic. Our farmers, too, and those engaged directly and in- . directly in supplying the prod nets of agxlcul- | ture, see that, day by day, and as often as the daily wants oi their households recur, they are forced to pay excessive and needless taxation, •while their products struggle in foreign markets with the competition of nations which, by al­ lowing a freer exchange of production than we permit, enable their people to sell for prices which distress the American farmer. As every patriotic citizen rejoices in the constantly increasing pride of our peoplo in American citizenship, and in tho glory of our national achievemente and progress, a sentiment prevails that the leading-strings use­ ful to a nation in its infancy may well, to a great extent, be discarded in the present stage of American ingenuity, courage and fearless self-reliance. And for the i>rivllege of indulg­ ing this sentiment with true American enthusi­ asm, our citizens are quite willing to forego an Idle surplus in the public treasury. And all the peoplo know that the average rate of Federal taxation upon imports to-day, in time of peace, is but littlo less, 'while upon some articles of necessary consumption it is actually more, thttn was imposed by the grievous burden willingly borne at a time when the Government needed millions to maintain by a war the safety and integrity of the United States. REVISION OF THE REVENUE LAW. It has been the policy of the Government to collect the principal part of its revenues by a tax upon imports, and no change in this policy is desirable. But the present condition of affairs constrains our people to demand that by a revision of our revenue laws the re­ ceipts of the Government shall be re­ duced to the necessary expense of its economical administration, and this de­ mand should be recognized and obeyed by the people's representatives in the legislative branoh of the Government. In readjusting the burdens of Federal taxation a sound public policy requires that such of our citizens ai have built up large and important industries under present conditions should not be sud­ denly, and to their injury, deprived of advan­ tages to which they have adapted their business ; but if the public good requires it, they should coutwn* with such considcrutiou as shall deal fairly and cautiously with their interests, while the just demands of the people for relief from needless taxa'.lon is honestly answered. A reasonable and timely submission to such a deiiuind should certainly be possible witaout disastrous shock to any interest, and a cheerful concession sometimes averts abrupt and heedless action, often the outgrowth of im­ patience and delayed justice. THE AMERICAN LABOREB. Dae regard should be also accorded In any proposed readjustment to the interests of American labor so far as they are involved. We congratulate ourselves that there is among us no laboring class, fixed within unyielding bounds, and doom­ ed under all conditions to the inexorable fata*; Of daily toil. We recognize in labor a chief factor in the wealth of the republic, and we treat those who have it in their keeping as citizens entitled to the moat careful regard und thoughtful attention. This regard and attention should be awarded them, not only because labor is tho capital of our workitigman, justly entitled to its share of Government favor, but for tho further and not less important reason that the laboring mall, surrounded by his family in his humble home, is'virtually interested in all that cheapens the cost of living and enables him to bring within his domestic circle additional comforts and advantages. This relation of the workingman to the revenue laws of the country, aud the manner in which it palpably influences the question of wages, should not bo forgotten in the justifiable prominence given to tho proper maintenance of the supply and protection of well paid labor. And these considerations sug­ gest such an arrangement of Government reve­ nues as shall reduce the expense of living, while it does not curtail the opportunity for work nor reduce the compensation "of American labor and injuriously affect its condition and the digniftod place it holds in the estimation of our jieople. But our farmers and agriculturists, those who from the soil produce the things consumed by all are perhaps more directly and plainly concerned than any other of our citizens in a just and care­ ful system of Federal taxation. Those uctually engaged in, and more remot ely connected with, this kind of work number nearly one-half of our population; none labor harder or more continu­ ously than they. No enactments limit their hours of toil, and no interposition of the Gov­ ernment onhances to any great extent the value of their products; aud yet for many of the necessaries and comforts of life, which the moht scrupulous economy enables them to bring into their homes, dud for their implements of husbandry, they are obliged to paya prios large ly increased by an utffiatural profit, which, liy the action of th« Government, la given to the more favored manufacturer. I recommend that, keeping in view all these considerations, the increasing and unnecessary surplus of national income annually accumulating be released to the people, by an amendment to our revenue laws, which shall ch apen the price of the necessaries of life, and give freer entrance to such imported materials as, by American labor, may be manufactured into marketable com­ modities. Nothing can be accomplished, how­ ever, in the direction of this much-needed re­ form unless the subject is approached in a patriotic spirit of devotion to the Interests of the entire country, and with a wiilinguess to yield something for the whole good. THE PUBLIC DEBT. The sum paid upon the public debt during the fiscal year ended Juno 30,1883, was $41,5.51,043 36. During the twelve moiths ended October 31, 1886, three per cent, bonds were called for re­ demption, amounting to $127,283,100, of which $80,ii43,20J was so called to answer the require­ ments of the law relating to the sinking fund, and $4C.30J,00i) for the purpose of reducing the debt bv application of a part of the surplus in the Treasury to that object. Of the bonds thus called 4-102,2o9,450 became subject, under such calls, to redemption prior to November 1, 1886. The remainder, amounting to $250,136,450, matured under the calls after that date* In addition to the amount subject to payment and cancellation prior to November 1, trie re were also paid before that day certain of these bonds with tho interest thereon, amounting t > $5,9 2,350, which were anticipated as to tho maturity, of which t2,6J4,- 800 had not been called. Thus $lo7,341,80.) had been actually applied prior to the 1st of No­ vember, 1880, to the extinguishment of our bonded and interest-bearing debt, leaving on that day still outstanding the Bum of $1,153,443,- 11-2. Of this amount i8u,848.7C0 was still rep­ resented by 3 x'er cent, bonds. They, however, have been since November 14, or will at onco be. further reduced by $22,606,150, being bonds which have been called, as already stated, but not redeemed and canceled bofora the latter date. < ' SILVER COINAGE. During the fiscal year ended June 30, 1886, there were coinod under tho Compulsory Silver Coinage act of 18/8, 29,838,849 silver dollars, and the cost of the Bilver used in such coinage was $•23,448,960.01. There had been coined up to the close of the previous fiscal year under the pro­ visions of the law 203,882,554 silver dollars, and on the 1st day of December, 1886, the total amount of such coinage was $217,131,549. The Director of the Mint reports that at the time of the passage of the law of 1878 directing this coinage, the intrinsic value of the dollar thus coined was 94^ cents each, and that on July -tl, 1835, the price of silver reached the lowest stage ever known, BO that tho intrinsic or bullion price cf our standard silver dollar at that date was 72 cents. The price of silver on November 30 last was such as to make the dollars intrinsic­ ally worth 78 cents each. These differences in the value of the coins represent but ihe fluctua­ tions in the price of silver, and they certainly do indicate that compulsory coinage by the Gov­ ernment enhances the price of that commodity or secures uniformity in its value. CIRCULATING SILVER. Every fair' and legal effort has been made by the Treasury Department to distribute this currency among the people. The withdrawal of United States treasury notes of small de­ nominations and tho issuing of small Bilver certificates have been resorted to in the en­ deavor to accomplish this result, in obedience to the will and sentiments of the representa­ tives of the people in Congress. On the 27th day of November, 18- 6, the people held of these coins or certificates representing them the nom­ inal sum of $166,873,041, and we still have $79,- 464.345 in tho treasury, as against about $142,894,- 055 so in the hands of the jieople, and $72,865,370 remaining in the treasury one year ago. The Director of the Mint again urges the necessity of more vault room for the purpose of storing these silver dollars, which are not needed for circulation by the people. I have seen no reason to change the views expressed in my last annual message on the subject of this compulsory coin­ age, and I again urge its suspension on all the grounds contained in my former recommenda­ tion, re-enforced by the significant increase of our gold exportations during the last year, as appears by the comparative statement here­ with presented, and for the further reasons that the more this currency is distributad among the people tho greater becomes our duty to protect it from disaster; that we now have abundance for all our needs; and that there seems but little propriety in building vault) to store such currency, when the only pretense for its coinage is the necessity of its use by the people as a circulating medium. INDEFINITE REVENUE LAWS. The great number of suits now pending in thei United States Courts for the Southern District of New York, growing out of the collection of cus­ toms revenue at the port of New York, and the number of such suits that are almostdaily insti­ tuted, are certainly worthy the attention of Congress Tnese legal controversies, based up­ on conflicting views by importers and the Col­ lector as to the interpretation of our present complex and indefinite revenue laws might be largely obviated by an amendment of those laws. But pending such amendment the present condition of this litigation should be relieved. There are now pending about 2,500 of these suits. More than 1.100 have been commenced within eighteen months, and many of the others have been at issue for more than twenty- five years. These delays subject the Govern­ ment to loss of evidence, and prevent the rep­ aration necessary to defeat unjust and fictitious claims, while constantly accru­ ing interest threatens to double the demands involved. In the present condition of tho dockets of the' courts, well-filled with pri­ vate suits, and of the force allowed tho District Attorney, no greater than is necessary for the ordinary and current business of his office, these revenue litigations cannot be considered. In default of the adoption by Congress of a plan for the general reorganization of the Federal courts, as has heretofore been recom­ mended I urge the propriety of passing a law permitting the appointment of an additional Federal Judge in the district where these Gov­ ernment suits have accumulated, so that by con­ tinued sessions of the courts devoted to the trial these cases may bo determined. It is entire­ ly plain that a great saving to the Government would be accomplished by such a remedy, and the suitors who have honest claims would not be denitd justice through delay. THE ARMY. The report of the Secretary of War gives a de­ tailed account of the administration of his de­ partment, and contains sundry recommenda­ tions for the improvement of the service, which I fully approve. The army consisted at the date of the last consolidated return of 2,103 officers and 24.946 enlisted men. Tho oxpenses of the department for the last fiscal year were $36,990,903.'i8. including SC,'29»,H0.5.43 for pnblic works and river ann harbor improvements. I esjiecially direct the attention of Congress to the recommendation that officers be required to submit to an examination as a preliminary to their promotion. I see no objection but many advantages in adopting this feature, which has operated so beneficially in our Navy Department as well as in some branches of the army. COAST DEFENSES. The subject of coast defences and fortifica­ tions had been fully and carefully troated by the Board on Fortifications, whose report was submitted at the last session of Congress ; but no construction work of the kind recommended by the Bourd has been possible during the last year from the lack of appropriations for such purpose. The defenseless condition of our sea- coast and lake frontier is perfectly palpable; the examinations made must convince us all that certain of our cities named in the report of the board should be for­ tified, and that work on the most im­ portant of these fortifications should be commenced at once. The work has been thoroughly considered and laid out, the Secre­ tary of War reports, but ali is delayed in de­ fault of Congressional action. The absolute necessity, judged by all standards of prudence and foresight, of our preparation for an effectual resistance against the armored ships and steel gnus and mortars of modern construction, which may threaten tho cities on our coasts, is so apparent that I hope effective steps will be taken in tiiat diroction iminsdiately, Xhv valuable and suggestive treatment of this ques­ tion by the Secretary of War is earnestly com­ mended to the consideration of Congress. THE APACHE WAR. In September and October last the hostile Apacbies, who, under the leadership of Geron- imo, had for eighteen months been on the war path, and during that timo had committed many murders and been the causo of constant terror to the settlers of Arizona, surrendered to General Miles, the military commander who succeeded General Crook in the management and direction of their pursuit. Under the terms of their surrender, as then reported, and in view of the understanding which this murderous savage seemed to entertain of the assurances given tbem, . it was considered best to imprison them in such manner as to prevent their ever engaging in such out- rages Rgain, instead of trying fliein for murder. Fort Pickens having been selected as a safe place of confinement, all the adult males were sent thither, and will be closely guarded as prisoners. In tho meantime the residue of the band who, though still remaining upon the reservation, were regarded as unsafe, and sus­ pected of furnishing aid to those on the war­ path, had been removed to Fort Marlon. The women and larger children of the bostiles were also taken there, and arrangements have been made for putting the children of proper age in Indian schools. THE WAR-VEFISEM. The report of the Secretary of the Navy con­ tains a detailed report of the condition of his department, with such a statement of the action needed to improve the same as should challenge tne earnest attention of Congress. The present navy of the United States, aside from the ships in course of construction, consists of: First, fourteen singlc-turreted monitors, none of which are in commission nor at the pros -nt time serv­ iceable, The batteries of these ships are obso­ lete, and thov can only be relied upon as auxil­ iary ships in harbor defense,and then after such an expenditure upon them as might not be deemed justifiable. Second, five fourth-rate vessels of small tonnage, only one of which was designed as a war vessel, and all of which are | auxiliary merely. Tuird, twenty-seven cruising j ships, three of which are built of iron and of j small tonnage, and twenty-four of wood. Of I these wooden vessels it is estimated by the I chief constructor of the navy that only three 1 will be serviceable beyond a period of six years, | at wuich time it may be said that of the present fores nothing worthy the name Trill re­ main. .̂ iJfcevefiela heretofore authorised are nn- dweobtraot or in cour«# ot constraotion, ex- hSSL^fMZST* J41* /Jroanuto boats. afiA one crusier. As to the last of these, the bids were in excess ot the limit fixed br Congress. * ARMOB A HP GUN STEEL. The production in the United State* of armor '.nd gun steel is a question which ft seems lecassary to settle at an eiurly dajr. If the armored war vessels are to be completed with those materials of home manufacture. This 55* D*en tha subject of investigation by two boards and by two special eommit- tee« of Congress within the last three Tk" report of the Gun Foundry Board in 1884, of the Board of Fortifications made in January last, and the reports of the select com­ mittees of the two houses made at the last ses- tubatantiklly agreed.' tlley li the event that the present invitation of the department for bids to furnish such of this material as is now authorized shall fail to inanee domestio uipnufacturers to under­ take the large expenditures required to prepare f<r this now manufacture, and no other steps are taken by Congress at its com­ ing session, tho Secretary contemplates, with dissatisfaction, the necessity of obtaining abroad the armor and the gun steel for ths authorized ships. It would seem desirable that the wants of the army and the navy in this re­ gard should be reasonably met, and that bv uniting their contracts such inducement might be offered as would result, in securing the do­ mestication of these important interests. . TH.-: POSTAL SERVICE. The affairs of the postal service show marked and gratifying improvement during the past year. A particular account of its transactions and condition is given in the report of the Postmaster General, which will be laid before you. lho reduction of the rate of letter post- age in 1H83, rendering the postal revenues inade­ quate to sustain the expenditures, and business depression also contributing, resulted in an excess of eost for the fiscal year ended June 30, 1835, of eight and one-third millions of aollfiTj. An additional check upon receipts bv doubiiug the measure of weight in rating sealed correspondence, and diminishing one-half tho charg) for newspaper carriage, was im­ posed by legislation, which took effect with the beginning of the past fiscal year; while the confct mt demand of our territorial develop­ ment and growing population for the extension and increase of mail facilites and machinery necessitate a steady annual advance in outlay. The caretul estimate of a year ago upon the rates of expenditure then existing contem­ plated the unavoidable augmentation of the de­ ficiency in the last fiscal year by nearly two millions of dollars. The anticipated revenue for tho last year failed of realization by about $6J,0J0, but proper measures of economy have so satisfactorily limited the growth of expendi­ tures that the total deficiency, in fact, fell be­ low that of 188 , and at that time the increase of revenue is in a gaining ratio over the increase of cost, demonstrating the sufficiency of the present rates of postago ultimately to sustain the service. This is thp more pleasing because our people enjoy now both cheaper postage, proportionately to distances, and a vaster and more costly service than any other upon the globe. Ketrencbment has been effected in the cost of supplies; some expenditures unwarranted by law have ceased, and the outlays for mail car­ riage have been subjected to beneficial scrutiny. At the close of the late fiscal year the expense of transportation on star routes stood at an an­ nual rate of cost less by over $500,000 than at the close of the previous year, and steamboat and mail messenger service at nearly $200,000 less. The service has been in the meantime enlarged and extended by the establishment of new offices, increase of routes of carriage, expan­ sion of carrier delivery conveniences, and additions to the railway mail facilities in ac­ cordance with the growing exigencies of the country and the long established policy of the Government. The Postmaster General calls attention to the existing law for compensating railroads, and expresses the opinion that a method may be devised which will prove more just to the carriers and beneficial to the Govern­ ment ; and the subject appears worthy of your early consideration. OCEAN SERVICE. The differences which arose during the year with certain of the ocean steamship companies have terminated in the acquiescence of all in the policy of the Government approved by Congress in the postal appropriation at its last session, and the department now enjoys the utmost service afforded by all vessels which sail from our ports upon either ocean--service gen­ erally adequate to the needs of our intercourse. DIRECT SERVICE TO SOUTH AMERICA. Petitions have, however, been presented to tho department by numerous merchants and manufacturers for the establishment of a direct service to the Argentine Kepublic, and for semi­ monthly dispatches to the empire of Brazil, aud the subject is commended to your con­ sideration. It is an obvious duty to provide the means of postal communication which our commerce requires, ond, with pru­ dent forecast of results, the wise extension of it may lead to stimulating intercourse and be­ come the harbinger of a profitable traffic, which will oj>en new avenues for the disposition of the products of our industry. Tho circumstances of tho countries at the far south of our continent are such as to invite our enterprise and afford the promise of sufficient advantages to justify an unusual effort to bring about the closer rela­ tions which greater freedom of communication would tend to establish. I suggest that, as distinguished from a grant or subsidy for the mere benefit of any line ot trade or travel, whatever outlay may be re­ quired to secure the additional postai service necessary and proper and not otherwise attain­ able, should be regarded as within the limit of legitimate compensation for such t ervice. RECOMMENDATIONS. The extension of the free delivery service as suggested by the Postmaster General has here­ tofore received my sanction, and it is to be hoped a suitable enactment may soon be agreed upon. The request for an appropriation sufficient to enable the general inspection of fourth-class of­ fices has my approbation. I renew my approval of the recommendation of the Postmaster General that another assist­ ant be provided for the Postoffice Department, and I invite your attention to the several other recommendations in his report. FEDERAL PENITENTIARY. The conduct of the Department of Justice for the last fiscal year is duly detailed in the report of the Attorney General, and I invite the earnest attention of Congress to the same, and due consideration of the recommendations therein contained. In the report submitted by this officer to the last session of Congress, he strongly recommended the erection of a penitentiary for the confinement of prisoners convicted and sentenced in the United States courts, and he repeats the recommendation in his report for the last year. This is a matter of very great importance and should at once re­ ceive Congressional action. United States pris­ oners are now confiued in more than thirty dif­ ferent State prisons and penitentiaries situated in every part of the country. They are sub­ jected "to nearlv as many different modes of treatment and discipline, and are far too much removed from the control and regulation of tho Government. Ho far as they are entitled to humane treatment aud opportunity for improve­ ment and reformation, the Government is re­ sponsible to them and society that these things are forthcoming. But this duty can scarcely bo discharged without more absolute control and discretion than is possible under the present system. PRISON REFORM. Many of our good citizens have interested themselves, with the most beneficial results, oh the question of prison reform. The General Government should be in a situat on, since there must be United States prisoners, to fur­ nish important aid in this movement, and should be able to illustrate whnt may be prac­ tically done in tho direction of this reform, and to present an example in the treatment and improvement' of its prisoners worthy of imita­ tion. With prisons under its own control, the Government could deal with the somewhat vexed question of convict labor,so far as its con­ victs were concerned, according to a plan of its own adoption and with due regard to the rights and interests of our laboring citizens, instead of sometimes aiding in the operation of a sys­ tem which causes among them irritation and discontent Upon consideration or this subject it might be thought wise to erect more than one of these institutions, located in such places as would best subBerve the purposes of conven­ ience and economy in transportation. The con­ siderable cost of maintaining these convicts, as at present, in State institutions, would bo saved by the adoption of the plan proposed, and by employing them in the manufacture of such articles as were needed for use by the Govern­ ment, quite a large pecuniary benefit would be realized in partial return for our outlay. THE JUDICIAL SYSTEJI. I again urge a change in tho Federal judicial system to meet the wants of the people and ob­ viate the delays necessarily attending the pres­ ent condition of affairs in our courts. All are agreed that something should bo done, and much favor is shown by those well able to ad­ vise, to the plan suggested by the Attorney Gen­ eral at the last session of Congress, and recom­ mended in my last annual message. This rec­ ommendation is here renewed, together with an­ other made at the same time, touching a change in the manner of compensating district attorneys and marshals, and tho latter subject is commended to Congress for its action in the interest of economy to the Government, aud humanity, fairness, and justice to our people. THE INDIAN BUREAU. The report of the Secretary of the Interior presents a comprehensive summary of the work of the various branches of the public service connected with hiB department, and the sugges­ tions and recommendations which it contains for the improvement of tho service should re­ ceive your careful consideration. The exhibit made of the condition of our Indian population and the progress of the work for their en­ lightenment, notwithstanding the many embarrassments which hinder the bet­ ter administration of this important branch of the service is a gratifying and hopeful one. The funds appropriated for the Indian service for the fiscal year just passed, with the available income from Indian land and trust moneys, amounting in all to $7,850,7r5.r2, were mople for the service under the eruditions and restrictions of laws legulnting their ex­ penditure. There remained a balance , cn hand on June 30, 1885, of 91,660,02*.30, of which $1,337,768.21 are permanent funds, for fulfillment of treaties and other like pur­ poses, and the remainder, *329,855.09, is subject to be carried to the surplus fund as required by law. The estimates presented for appropri­ ations tor the 95.908,673.64, or In Tfe# it wa» adopted, la, in the present an mAiiAfftiiifl8L ftniitiiiitt for the aoeomplishjaent of a»< beetmieiareasfivinimiwrtauce transition from tribal organization ship of such portions of the Indiana pabto of civilised fife. When the tem was adopted the Indian raoe of the limits of organised States and ̂ and beyond the immediate resoa and of civilization, and all efforts ware i reeled to the maintenance of Mi lations and , the preservation and quiet on the frontier. is now changed. There is no Buch thing as the Indian frontier. Civilization, with the busy hum of industry and the influence of Chris­ tianity, surrounds these reople ate very point. None of the tribes are outiide of the bounds of organized government and society, except that the Territorial system has not been extended over that portion of the country known as the Indian Territory. As a race ihd Indians are no longer hostile, but may be considered as sub­ missive to the control of the Government, aa few of them only are troublesome. Except the fragments of several bands, all are now gatherod upon reservations. It is no longer pos­ sible for them to subsist by the chnse and the «) ontaneous productions of the earth. With an abundance of land, if furnished with the means ar.d implements for profitable husbandry, their life of entire dependence upon Government ra­ tions from day to day is no longer defensible. Their inclination, long fostered bv a defective system of control, is to cling to the habits and customs of their ancestors, and they struggle with persistence against the change of Ufa which their altered circumstances press upon them. But barbarism and civilization can not live together. It is impossible that such in­ congruous conditions should co-exist on the same soil. They are s portion of our people, are under the authority of our Government, and bavo a peculiar claim r.pon, and are entitled to, the fostering caro and protection of the nation. The Government can not relieve itself of this responiibility until they are so far trained and civilized as to be able wholly to manage and care for themselves. The path in which they should walk must be clearly marked out for them, and they must be led or guided until they are familiar with the way and com- petent to assume the duties and responsibili­ ties of our citizenship. Progress in this great work will continue only at the present slow pace and at great expense, unless the system and mothods of man­ agement are improved to meet the changed conditions and urgent demands of the service. The Agents having goneral charge and super­ vision, in many cases, of more than 5,000 Indians, scattered over large reservations, and burdened with details of accountability for funds and supplies, have time to look after the industrial training and improvement of a few Indians only; the many are neglected and remain idle and dependent--condi­ tions not favorable for progress or civilization. Tho compensation allowed these Agents and the conditions of the service am not calculated to secure workmen who are fitted by ability and skill to properly plan and intelligently direct the methods best adapted to produce the most speedy results and permanent benefits. Hence the necessity for a supplemental" agency or system, directed to the end of promot­ ing the general and more rapid transition at tribes from habits and customs of barbarism iff the ways of civilization. AUXILIARY INDIAN COMMISSION. With an anxious desire to devise some plan of operation by which to secure the welfare ef the Indians, and to relieve the Treasury as far as possible from the support of an idle and dependent population, I rec­ ommended, in my previous annual mes­ sage, the passage of a law authorizing the appointment of a commission as an in­ strumentality, auxiliary to those already es­ tablished for the care of the Indians. It was designed that this commission should be com­ posed of six intelligent and capable persons, three to be detailed from tho army, having practical ideas upon the subject of the treament of Indians and interested in their welfare, and that it should be charged, under the direction of tho Secretary of the Interior, with the management of sucn matters of detail as cannot, with the present organization, be properly and successfully con­ ducted, and which present different phases, aa the Indians themselves differ in their progress, needs,disposition,and capacity for improvement or immediate self-support. By the aid of such commission, much unwise and useless expendi­ ture of money, waste of materials and unavail­ ing efforts might be avoided; and it is hoped that this or some measure which the wisdom of Congress may better devise, to supply the defi­ ciency of the present system, may receive your consideration, and that appropriate legislation be provided. Tho time is ripe for the work of such an agency. EDUCATION OF INDIAN YOUTH. There is less opposition to the education and training of the Indian yonth, as Bhown by tha increased attendance upon tho schools, and there is a yielding tendency for the individual holding of lands. Development and advance­ ment in these directions are essential, and should have every encouragement. As tha rising generation are taught the language ot civilization, and trained in habits ot industry, they should assume the duties, privileges, and responsibilities of citizenship. LANDS IN SEVERALTY. No obstacle should hinder the location and settlement of any Indians willing to take land in severalty. On the contrary, the inclination to do so should be stimulated at all times by. proper expedients ; but there is no authority of law for making allotments on some of the res­ ervations, and on others the allotments pro­ vided for are so small that the Indians, though ready and desiring to settle down, are not will­ ing to accept such small areas when their res- ervations contain ample lands to afford them homesteads of sufficient size to meet their present and future needs. The in­ equalities of existing special lawa and treaties should be corrected, and some general legislation on the subject should l>e provided, so that the more progressive membera of the different tribes may be settled upon homesteads, and by their example teach otheia to follow, breaking away from tribal customs and substituting therefor the love of home, tha interest of the family, and the rule of the State. The Indian character and nature are such that they are not easily led while brooding over unadjusted wrongs. This is specially so re­ garding their lands. Matters arising from the construction and operation cf rail­ roads across some of the reservations, and claims of title and right of occupancy set up by white peisons to some of the best land within other reservations, require legislation for their final adjustment. The settlement of these mat­ ters will remove many embarrassments to pro­ gress in the work of leading the Indians to tha adoption of our institutions and bringing thein under the operation, the influence and the pro- i taction of the universal laws of our country. THE PUBLIC DOMAIN. The recommendations of the Secretary th* Interior and the Commissioner of the General Lund Office, looking to the better protection of pnblic lands and of the public surveys, tha" - preservation of national forests, tho adjjudica- ti< n of grants to States and corporations, and of private land claims, and the increased efficiency of the public lands service, are commended to the attention of Congress. To secure tha widest distribution of public lands in limited quantities among settlers of residence and cultivation, and thus make tho greatest num­ bers of individual homes, was the primary object of the public land legislation in the early days of the Kepublic. This system was a simple one. It commenced with an admirable scheme of public surveys, by which the hum­ blest citizen could identify the tract upon which ho wished to establish his homo. Tha price of lands wus placed within the reach of all tho enterprising, industrious and honest pioneer citizens of the country. It was soon found, how­ ever, that the object of the laws was perverted under the system of cash sales from a distribu­ tion of land among the people to an accumula­ tion of land capital by wealthy and speculative perse ns. To check this tendency a preference right of purchase was given to settlers on the land, a plan which culminated in the general pre-emption act of 1811. The foundation of this system was actual residence and cultivation. Twenty years later the homestead laws were devised to more surety piaco actual homes in the posaeiJ-- * Sion o: actual cultivators of tha soil. The land was given without price, the sole condition being residence, impiovement and cultivation. Other laws have followed, each designed to encourage the acquirement and use of land in limited individual quantities, but in later yearn these laws, through vicious administrative methods aud under changed conditions of com­ munication and transportation, have been ao evaded and violated that their beneficent pur­ pose is threatened with entire defeat. The j methods <f such evasions and valuations are set forth in detail in the reports of the Sec­ retary of the Interior and Commissioner of the General Land Office. The rapid appropriation of our public lands without bina fide settlements or cultivation, and roi only without intention at residence, but for the purpose of their aggrega­ tion in large holdings, in many cases m the hands of foreigners, invites the serious and immediate attention of Congress. The energies of the Laud Department have been devoted during tho present administration to remedy defects and correct abuses in the public land service. The results of these effort s are so largely in the nature of reforms iu tlu> process ana aethods of our land system aa to prevent ade­ quate estimates, but it appeal's, by a compilation from the reports of the CommiHiioner of tha General Land Office, that the immediate efft ct in leading cases which have come to a final termi­ nation has been the restora ion to the mass of public lands of 2,750,000 acres; that 2,370,000 acres are embraced in investigations now pend­ ing before the department or the courts, and that action of Congress has been asked to effect the restoration of 2,790,00) acres addi­ tional, besides which 4,0 0,0j0 acres have been withheld from reservation and the rights of entry thereon maintained. I recommend the REPEAL OF THE PRE-EMPTION AND T1MBKR- CULTURE ACTS, and that the homestead laws be so amended aa to letter secure compliance, and cultivation for the period of five years from date of entry without commutation or provisi >n for specula­ tive relinquishment. I also recommend the re­ peal of the desert land laws, unless it shall be tne pleasure of Congress to so amend ihese laws as to render them less liable to abuse. The facility with which transfers are made results in land accumulation instead of land distribution, and that the publio domain be secured to settlers, it may be deemed advis­ able to provide by legislation some guards •kfi ojt m ikt. 1 - •**- .<1, "tit .A. .. i4t(,«i. -w..,, • •si.jaf.A. A..,. ...A "' Vl*a - -..jiu.'Lt •*«?.„ >Jjc . *.*is?.*....it. v2*s, (.a! «.