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s ur F=> F=» i-- '-m M; pingf any possible growth of postal rev­ e n u e . ' " • • . . ? ' . ' The Navy. The work of the Navy Department and its present condition are fully exhibited in'the r.eRQl't of the* Secretary. The con­ struction of vessels for our new navy has been energetically prosecuted by the pres­ ent administration upon the general lines previously adopted, the department hav­ ing seen no necessity for radical changes in prior methods under which the work "-as found to be progressing in a manner Jrighly satisfactory. It has been decided, however, to provide in every shipbuilding contract that the builder should pay all trial expenses, and it has also been de­ termined to pay no speed premiums in future contracts. The premiums Recently earned and some yet to be decided are features of the contracts made before this« conclusion was reached. On March 4, 1893. there were in com­ mission but two armored vessels--the dou- ble-turreted Miantonomah and Monterey. Since that date of vessels theretofore authorized there have been placed in their first commission three first-class and two second-class battle-ships, two. armored curisers, one harbor-defense ram and five double-turreted monitors, including the Maine and Puritan, just completed. Eight new unarmored cruisers and two new gunboats have also been commis­ sioned. The Iowa, another battle-ship, will be completed about March 1. and at least four more gunboats will be ready for use in the early spring. About Nationa1 Prisons. The Attorney General presents a de­ tailed and interesting statement of the important work done under his supervis­ ion during the last fiscal year. The own­ ership and management by the Govern­ ment of penitentiaries for the confine­ ment of those convicted in United States courts of violations of Federal laws, which for many years has been a subject of executive recommendation, has at last, to a slight extent, been realized by the utilization of the abandoned military pris­ on at Fort Leavenworth as a United States penitentiary. This is certainly a movement in the right direction; but it ought to be at once supplemented by the rebuilding or extensive enlargement of this improvised prison and the con­ struction of at least one more, to be lo­ cated in the Southern States. I am thor­ oughly convinced that economy, humanity and a proper sense of responsibility and duty toward those whom we punish for violations of Federal law dictate that the Federal Government should have . the entire control and management of the penitentiaries where convicted violators are confined. It appears that since the transfer of Fort Leavenworth military prison to its new uses the work previously done by prisoners confined there and for which ex­ pensive machinery has been provided has been discontinued. This work consisted of the manufacture of articles for army use now done elsewhere. On all grounds it is exceedingly desirable that the con­ victs confined in this penitentiary be al­ lowed resume work of this description. Interior Affairs. The report of the Secretary of the Interior presents a comprehensive and interesting ex­ hibit of the numerous and Important affairs committed to his supervision. I agree with the Secretary that the remainder of our pub­ lic lands should lie more carefully dealt with and their alienation guarded by better econ­ omy and greater prudence. The Indians. The totaljndian population of the United States is 177,235, according to a census made lu 1895, exclusive of those within the State of New York aud those comprising the Ave civilized tribes. Of this number there are aproxlmately. 38,000 children of school age. During the year 23,303 of these were en­ rolled in schools. The progress which has attended recent efforts to extend Indian school facilities, and the anticipation of con­ tinued liberal appropriations to that end, cannot fail to afford the utmost satisfac­ tion to those who believe that the educa­ tion of Indian children is a prime factor in the accomplishment of Indian civilization. It may be said in general terms that in every particular the Improvement of the Indians under Government care has been most marked and encouraging. The Secretary, .the Commissioner of In­ dian Affairs and the agents having charge of Indians to whom allotments have been made strongly urge the passage of a law prohib­ iting the sale of liquor to allottees who have taken their lands in severalty. I earnestly join in this recommendation. The condition of affairs among the Ave civilized tribes, who occupy large tracts of land in the Indian Territory, and who have governments of their own, has assum­ ed such an aspect as to render It almost Indispensable tnat there should he an en­ tire change in the relations of these Indi­ ans to the general government. A com- SSiSSiSH organised and empowered nad«F MY* era! recent laws is now negotiating with these Indians' for the relinquishment and the division of their common lands in sev-r eralty. and are aiding in the settlement of the troublesome question of tribal member­ ship. The effort should oe to save these In­ dians from the consequences o.f their own mistakes and improvidence, aud to secure to the real Indian his rights as against in­ truders and professed friends who profit by his retrogression. As a sincere friend of the Indian i am exceedingly anxious that these reforms should be accomplished with the consent and aid of the tribes, and that no necessity may be presented for radical or drastic legislation. The Pension Roll. The diminution of our enormous pension roll and the decrease of pension expendi­ ture, which have been so often confidently foretold, still fail in material realization. The number of pensioners on the rolls at the close of the fiscal year ended June 30, 1806. was 070,078. This is the largest num­ ber ever reported. The amount paid ex­ clusively for pensions during the year was $138,214,701.04. a slight decrease from that of the preceding year, while the total expenditures on account of pensions, in­ cluding the cost of maintaining the de­ partment and expenses attending the pen­ sion distribution,amounted to $142,206,550.59, or within a very small fraction of one-third of the entire expense of supporting the Government during the same year. Tilt? number or new pension certificates is­ sued was 00,640. Of these 40.374 represent original allowances of claims and 15,878 In­ creases of existing pensions. The number of persons receiving pensions from the t nited States, but residing lu foreign coun­ tries, at the close of the last, fiscal year, was 3.781. and the amount paid to them during the year was $582,735.38. The sum appro­ priated for the payment of pensions for the current fiscal year ending June 30, 1897, Is $140,000,000, and for the succeeding year it Is estimated that the same amount will be necessary. The Commissioner of Pensions reports that during the last fiscal year 339 Indict­ ments were found against violators of the pension laws. Upon these Indictments 167 convictions resulted. In my opinion, based upon such statements as these and much other information and observation, the abus­ es which have been allowed to creep Into our pension system have done Incalculable harm in demoralizing our people and under­ mining good citizenship. 1 have endeavored within my sphere of official duty to protect our pension roll and make it what it should be, a roll of honor, containing the names of those disabled in their country's service and worthy of their country's affectionate remembrance. When 1 have seen those who pose as the soldiers' friends, active and alert in urging greater laxity and more reck­ less pension expenditure, while nursing self­ ish schemes, I have deprecated the approach of a situation where necessary retrench­ ment and enforced economy may lead to an attack upon pension abuses, so deter­ mined as to overlook the discrimination due to those who, worthy of a nation's care, ought to live and die under the protection of a nation's gratitude. Pacific R..i ioa-'s. , The Secretary calls attention to the public interests involved iu an adjustment of the obligations of the Pacific railroads to the Government. I deem It to be an Important duty to especially present tills subject to the consideration of Congress. On Jan. 1, 1897, with the amount already matured, more than $13,000,000 of the principal of the subsidy bonds Issued by the United States in aid of the construction of the Union Pa­ cific Railway, including Its Kansas line, and more than $6,000,000 of like bonds, issued In aid of the Central Pacific Railroad, in­ cluding those Issued to the Western Pacific Railroad Company, will have fallen due and been paid or must on that day be paid by the Government. Without any reference to the application of the sinking fund now lu the treasury this will create such a default on the part of these companies to the Gov­ ernment as will give It the right to at once Institute proceedings to foreclose its mort­ gage lien. In addltlou to this Indebtedness, which will be due Jan. 1, 1897, there will mature between that date and Jan. 1, 1899, the remalnlug principal of such subsidy bonds, which must also be met by the Gov­ ernment. These amount to more than $20,- 000,000, on account of the Union Pacific lines, and exceed $21,000,000.on account of the Central Pacific lines. The situation these roads and the con dlton of their Indebtedness to the Govern­ ment have been fully set forth In the reports of various committees to the present and prior Congresses. In view of the fact that the Congress lias for a number of years al­ most constantly had under consideration va­ rious plans for dealing with the couditions existing between these roads and the Gov; eminent, I have thus far felt justified in withholding action under the statute above mentioned. In the case of the Union Pa­ cific Company, however, the situation has become especially and immediately urgent Proceedings have been Instituted to fore­ close a first mortgage upon those aided parts of the main Hues upon which the Govern meut holds a second aud subordinate mort­ gage lien. In consequence of those pro­ ceedings and increasing complications add ed to the default occurring the 1st day of January, 1897, a condition wili oe presented at that date, so far as this company is con­ cerned, that must emphasize the mandate of the act of 1887 and give to executive duty uudef its provisions a more Imperative as­ pect. Therefore, unless Congress shall otherwise direct., or shall have previously determined upon a different solution of the problem, there will hardly appear to exist any reason for*delaying beyond the date of the default above mentioned such executive action as will promise to subserve the pub­ lic interests and save the Government from the loss threatened by further inaction. Department of Asrriculture. 5hs Depsrtsest oi Agriculture is se In­ timately related to the welfare of our peo- ile and the prosperity of our nation that t should constantly receive the chre and encouragement of the Government. From small beginnings It has grown to be the cen­ ter of agricultural IntelMgence and the source of aid aud encouragement to agri­ cultural efforts. Under the present management of the de­ partment Its usefulness lias been enhanced n every direction, and at the same time strict economy lias been enforced to the ^utmost extent permitted by congressional ac­ tion. The Secretary reports that the value of our exports of farm products during the last fiscal year amounted to $670,000,000, an increase of $17,000,000 over those of the year Immediately preceding. This statement is not the less welcome because of the fact that, notwithstanding such increase, the pro­ portion-of exported agricultural products of our total exports of all descriptions fell dur­ ing the year. The benefits of an Increase In agricultural exports being assured, the de­ crease in its proportion to our total exports Is the more gratifying when we consider that it is owing to the fact that such total ex­ ports for the year Increased more than $75,- 000,000. In my opinion the gratuitous distribution of seeds by the department, as at present conducted, ought to be discontinued. The professed friends of the. farmer, and cer­ tainly the farmers themselves, are naturally expected to be willing to rid a department devoted to the promotion of farming in­ terests of a feature which tends so much to Its discredit. The weather bureau, now attached to the Department of Agriculture, has continued to exttnd its sphere of usefulness, and by an uninterrupted improvement In the accuracy of Its forecasts has greatly Increased Its efficiency as an aid and protection to all whose occupations are related to weather conditions. Omitting further reference to the operations of the department, I com­ mend the Secretary's report and the sug­ gestions it contains to the careful consider­ ation of Congress. C ivil Service Reform. The progress made In civil-service reform furnishes a cause for the utmost congratu­ lation. There are now in the competitive classified service upward of eighty-four thou­ sand places. A most radical and sweep­ ing extension was made by executive order dated the 6th day of May, 1896, and if the fourth-class postmasterships be not In­ cluded In the statement It may be said that practically all positions contemplated by the clvil-servlce law are now classified. Abundant reasons exist for including these postmasterships,„ based upon economy, im­ proved service and the peace and quiet of neighborhoods. The civil-service rules, as amended during the^last year, provide for a sensible and uniform method of promotion, basing eligibility to better positions upon demonstrated efficiency and faithfulness. The absence of fixed rules on this subject has been an infirmity in the system more and more apparent, as Its other benefits have been better appreciated. Those who gain positions through the operation of civil service methods should be made to under­ stand that the nonpartisan scheme through which they receive their appointments de­ mands from them, by way of reciprocity, nonpartisan and faithful performance of duty under every administration, and cheer­ ful fidelity to every chief. While they should be encouraged to decently exercise their rights of citizenship and to support through their suffrages the political beliefs they honestly profess, the noisy, pestilent and partisan employe, who loves political turmoil and contention, or who renders lax and grudging service to an administration not representing his political views, should be promptly and fearlessly dealt with In such a way as to furnish a warning to oth­ ers who may be likewise disposed. National Finances and the Tariff. I desire to recur to the statements else­ where made concerning the Government's receipts and expenditures for the purpose of venturing upon some suggestions touch­ ing our present tariff law and Its opera­ tion. This statute took effect on the 28th day of August, 1894. Whatever may be its shortcomings as a complete measure of tar­ iff reform, it must be conceded that It has opened the way to a freer and greater ex­ change of commodities between us and other countries, and thus furnished a wider mar­ ket for our products and manufacturing. The only entire fiscal year during which, this law has been In force ended the 30th day of June. 1896. In that year our Imports in­ creased over those of the previous year more than $6,500,000, while the value of the domestic products we exported and which found markets abroad was nearly $70,000,- 000 more than during the preceding year. The present law, during the only complete fiscal year of its operatlou, has yielded near­ ly $8,000,000 more revenue than was re­ ceived from tariff duties In the preceding year. There was, nevertheless, a deficit be­ tween bur receipts and expenditures of a little more than $25,000,000. This, however, was not unexpected. The situation was such in December last, seven months be­ fore the close of the fiscal year, that the Secretary of the Treasury foretold a defi- the consideration of Congress. I believe our present tariff law, if allowed a fair opportunity, will in the near future yield a revenue which, with ressouably eco­ nomic expenditures, will overcome all de­ ficiencies. Meantime no deficit that has occurred or may occur need excite or dis­ turb us. To meet any such deficit we have In the treasury. In addition to a gold re­ serve of $100,000,000. a surplus of more than $128,000,000 applicable to the payment of the expenses of the Government, and which must, unless expended for that pur­ pose, .remain a useless hoard, or, if not ex­ travagantly wasted, must in any event be perverted from the purpose of its exaction from our people. The payment, therefore, of any deficiency in the revenue from this fund is nothing roer than it* proper and leg­ itimate ssei The Cnrrency SyBtem. I am more convinced than ever that we can have no assured financial peace and "safety until the government currency ob­ ligations upon which gold may be demand­ ed from the treasury are withdrawn from circulation and canceled. This might be done, as has been heretofore recommended, but their exchange for long-term bonds bear­ ing a low rate of interest or by their re­ demption with the proceeds of such bonds. Even if only the United States notes known as greenbacks were thus retired, it Is prob­ able that the treasury notes issued In pay-" ment of silver purchases under the act of July 14, 1890, now paid in gpld when de­ manded, would not create much disturbance, as they might from time to time when re­ ceived in the treasury by redemption In gold or otherwise, be gradually and prudently repla^d by silver coin. In default of this plan, however, It would be A step In the right direction if currency obligations redeemable In gold, whenever so redeemed, should be canceled Instead of being reissued. National banks should redeem their own notes. They should be allowed to issue cir­ culation to the par value of bonds deposited as security for its redemption, and the tax on their circulation should be reduced to one-fourth of 1 per cent. ' ,. In considering projects for the retirement of United States notes and treasury notes Issued under the law of 1890, I am of the opinion that we have placed too much stress upon the danger of contracting the currency anfi have calculated too little upon the gold that would be added to our circulation if invited to us by better and safer financial methods. It is not so much a contraction of our currency that should; be avoided as such unequal distribution. This might be obviated, and any fear of harmful, contrac­ tion at the same time removed, by allow­ ing the organization of smaller banks and In less populous communities than are now permitted, and authorizing banks to estab­ lish branches In small communities under proper restrictions. The entire case may be presented by the statement that the day of sensible and sound financial methods will not dawn upon us until our government abandons the banking business and the accumulation of funds, and confines Its monetary operations to the re­ ceipts of the money contributed by the peo­ ple for its support, and to the expenditure of such money for the people's benefit. • Our business interests and all good citi­ zens long for rest from feverish agitation, and the Inauguration by the Government of a reformed financial policy, which wjll en­ courage enterprise and make certain the re­ wards of labor and industry. Roast for the '1 rusts. Another topic in which our people right­ fully take a deep Interest may here be brief­ ly considered. I refer to the existence of trusts and other huge aggregations of cap­ ital, the object of which is to secure the monopoly of some particular branch of trade. Industry, or commerce and so stifle whole­ some competition. When these are defend­ ed it Is usually on the ground that though they Increase profits they also reduce prices and thus may benefit the public. It must be remembered, however, that a reduction of prices to the people Is not one of the real objects of these organizations, nor is their tendency necessarily in that direct tion. Their tendency Is to crush out indi­ vidual independence and to hinder or pre­ vent the free use of human faculties and the full development of human character. Through them the farmer, the artisan, and th'e small trader Is In danger of dislodgment from the proud position of being his own master, watchful of all that touches his coun- trv's prosperity. In which he has an individ­ ual lot, and Interested in all that affects the advantages of business of which he is a fac­ tor, to be relegated to the level of a mere appurtenance to a great machine, with little free will, with no duty but of passive obedi­ ence, and with little hope or opportunity of rising 1U the scale of responsible and help­ ful citizenship. Though Congress has attempted to deal with this matter by legislation the laws passed for that purpose thus far have proved ineffective. The decision of our highest court renders it quite doubtful whether the evils of trusts and monopolies can be ade­ quately treated through federal action--un­ less they seek directly and purposely to in­ clude in their objects transportation or in­ tercourse between States or between the United States and foreign countries. It does not follow, however, that this Is the limit of the remedv that may be applied. Even though it mav be found that federal author­ ity Is not broad enough to fully reach the case there can be no doubt of the power of the several States to act effectively in the premises, and there should be no reason to doubt their willingness to judiciously ex­ ercise such power. In concluding this communication, its last words shall be an appeal to the Congress for the most rigid economy in the expendi­ ture of the money it holds In trust for the people. The way to perplexing extrava­ gance is easy, but a return to frugality is difficult. When, however, it is considered that those who bear the burdeps of taxation have no guaranty of honest 'care save in the fidelity of their public servants, the duty of all possible retrenchment is plainly mani­ fest. When our differences are forgotten and our contests of political opinion are no long­ er remembered, nothing in the retrospect of our public service will be as fortunate and comforting as the recollection of official duty well performed and the memory of a con­ stant devotion to the Interests of our con­ fiding fellow countrymen. • c '• . . -- - In Russia the principals in a duel partake of breakfast together before goisg out to fight-