The addresses are separated by three asterisks: ***

Dates of addresses by William McKinley in this eBook: December 6, 1897 December 5, 1898 December 5, 1899 December 3, 1900

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State of the Union AddressWilliam McKinleyDecember 6, 1897

To the Senate and House of Representatives:

It gives me pleasure to extend greeting to the Fifty-fifth Congress, assembled in regular session at the seat of Government, with many of whoseSenators and Representatives I have been associated in the legislativeservice. Their meeting occurs under felicitous conditions, justifyingsincere congratulation and calling for our grateful acknowledgment to abeneficent Providence which has so signally blessed and prospered us as anation. Peace and good will with all the nations of the earth continueunbroken. 

A matter of genuine satisfaction is the growing feeling of fraternal regardand unification of all sections of our country, the incompleteness of whichhas too long delayed realization of the highest blessings of the Union. Thespirit of patriotism is universal and is ever increasing in fervor. Thepublic questions which now most engross us are lifted far above eitherpartisanship, prejudice, or former sectional differences. They affect everypart of our common country alike and permit of no division on ancientlines. Questions of foreign policy, of revenue, the soundness of thecurrency, the inviolability of national obligations, the improvement of thepublic service, appeal to the individual conscience of every earnestcitizen to whatever party he belongs or in whatever section of the countryhe may reside. 

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

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

The work of putting our finances upon a sound basis, difficult as it mayseem, will appear easier when we recall the financial operations of theGovernment since 1866. On the 30th day of June of that year we hadoutstanding demand liabilities in the sum of $728, 868, 447. 41. On the 1st ofJanuary, 1879, these liabilities had been reduced to $443, 889, 495. 88. Of ourinterest-bearing obligations, the figures are even more striking. On July1, 1866, the principal of the interest-bearing debt of the Government was$2, 332, 331, 208. On the 1st day of July, 1893, this sum had been reduced to$585, 137, 100, or an aggregate reduction of $1, 747, 294, 108. Theinterest-bearing debt of the United States on the 1st day of December, 1897, was $847, 365, 620. The Government money now outstanding (December 1)consists of $346, 681, 016 of United States notes, $107, 793, 280 of Treasurynotes issued by authority of the law of 1890, $384, 963, 504 of silvercertificates, and $61, 280, 761 of standard silver dollars. 

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

The brief review of what was accomplished from the close of the war to1893, makes unreasonable and groundless any distrust either of ourfinancial ability or soundness; while the situation from 1893 to 1897 mustadmonish Congress of the immediate necessity of so legislating as to makethe return of the conditions then prevailing impossible. 

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

The evil of the present system is found in the great cost to the Governmentof maintaining the parity of our different forms of money, that is, keepingall of them at par with gold. We surely cannot be longer heedless of theburden this imposes upon the people, even under fairly prosperousconditions, while the past four years have demonstrated that it is not onlyan expensive charge upon the Government, but a dangerous menace to theNational credit. 

It is manifest that we must devise some plan to protect the Governmentagainst bond issues for repeated redemptions. We must either curtail theopportunity for speculation, made easy by the multiplied redemptions of ourdemand obligations, or increase the gold reserve for their redemption. Wehave $900, 000, 000 of currency which the Government by solemn enactment hasundertaken to keep at par with gold. Nobody is obliged to redeem in goldbut the Government. The banks are not required to redeem in gold. TheGovernment is obliged to keep equal with gold all its outstanding currencyand coin obligations, while its receipts are not required to be paid ingold. They are paid in every kind of money but gold, and the only means bywhich the Government can with certainty get gold is by borrowing. It canget it in no other way when it most needs it. The Government without anyfixed gold revenue is pledged to maintain gold redemption, which it hassteadily and faithfully done, and which, under the authority now given, itwill continue to do. 

The law which requires the Government, after having redeemed its UnitedStates notes, to pay them out again as current funds, demands a constantreplenishment of the gold reserve. This is especially so in times ofbusiness panic and when the revenues are insufficient to meet the expensesof the Government. At such times the Government has no other way to supplyits deficit and maintain redemption but through the increase of its bondeddebt, as during the Administration of my predecessor, when $262, 315, 400 offour-and-a-half per cent bonds were issued and sold and the proceeds usedto pay the expenses of the Government in excess of the revenues and sustainthe gold reserve. While it is true that the greater part of the proceeds ofthese bonds were used to supply deficient revenues, a considerable portionwas required to maintain the gold reserve. 

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

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

In my view, it is of the utmost importance that the Government should berelieved from the burden of providing all the gold required for exchangesand export. This responsibility is alone borne by the Government, withoutany of the usual and necessary banking powers to help itself. The banks donot feel the strain of gold redemption. The whole strain rests upon theGovernment, and the size of the gold reserve in the Treasury has come tobe, with or without reason, the signal of danger or of security. This oughtto be stopped. 

If we are to have an era of prosperity in the country, with sufficientreceipts for the expenses of the Government, we may feel no immediateembarrassment from our present currency; but the danger still exists, andwill be ever present, menacing us so long as the existing system continues. And, besides, it is in times of adequate revenues and business tranquillitythat the Government should prepare for the worst. We cannot avoid, withoutserious consequences, the wise consideration and prompt solution of thisquestion. 

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

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

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

The most important problem with which this Government is now called upon todeal pertaining to its foreign relations concerns its duty toward Spain andthe Cuban insurrection. Problems and conditions more or less in common withthose now existing have confronted this Government at various times in thepast. The story of Cuba for many years has been one of unrest, growingdiscontent, an effort toward a larger enjoyment of liberty andself-control, of organized resistance to the mother country, of depressionafter distress and warfare, and of ineffectual settlement to be followed byrenewed revolt. For no enduring period since the enfranchisement of thecontinental possessions of Spain in the Western Continent has the conditionof Cuba or the policy of Spain toward Cuba not caused concern to the UnitedStates. 

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

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

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

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

The offer made by my predecessor in April, 1896, tendering the friendlyoffices of this Government, failed. Any mediation on our part was notaccepted. In brief, the answer read: "There is no effectual way to pacifyCuba unless it begins with the actual submission of the rebels to themother country. " Then only could Spain act in the promised direction, ofher own motion and after her own plans. 

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

Against this abuse of the rights of war I have felt constrained on repeatedoccasions to enter the firm and earnest protest of this Government. Therewas much of public condemnation of the treatment of American citizens byalleged illegal arrests and long imprisonment awaiting trial or pendingprotracted judicial proceedings. I felt it my first duty to make instantdemand for the release or speedy trial of all American citizens underarrest. Before the change of the Spanish cabinet in October last twenty-twoprisoners, citizens of the United States, had been given their freedom. 

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

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

No solution was proposed to which the slightest idea of humiliation toSpain could attach, and, indeed, precise proposals were withheld to avoidembarrassment to that Government. All that was asked or expected was thatsome safe way might be speedily provided and permanent peace restored. Itso chanced that the consideration of this offer, addressed to the sameSpanish administration which had declined the tenders of my predecessor, and which for more than two years had poured men and treasure into Cuba inthe fruitless effort to suppress the revolt, fell to others. Between thedeparture of General Woodford, the new envoy, and his arrival in Spain thestatesman who had shaped the policy of his country fell by the hand of anassassin, and although the cabinet of the late premier still held officeand received from our envoy the proposals he bore, that cabinet gave placewithin a few days thereafter to a new administration, under the leadershipof Sagasta. 

The reply to our note was received on the 23d day of October. It is in thedirection of a better understanding. It appreciates the friendly purposesof this Government. It admits that our country is deeply affected by thewar in Cuba and that its desires for peace are just. It declares that thepresent Spanish government is bound by every consideration to a change ofpolicy that should satisfy the United States and pacify Cuba within areasonable time. To this end Spain has decided to put into effect thepolitical reforms heretofore advocated by the present premier, withouthalting for any consideration in the path which in its judgment leads topeace. The military operations, it is said, will continue, but will behumane and conducted with all regard for private rights, being accompaniedby political action leading to the autonomy of Cuba while guarding Spanishsovereignty. This, it is claimed, will result in investing Cuba with adistinct personality, the island to be governed by an executive and by alocal council or chamber, reserving to Spain the control of the foreignrelations, the army and navy, and the judicial administration. Toaccomplish this the present government proposes to modify existinglegislation by decree, leaving the Spanish Cortes, with the aid of Cubansenators and deputies, to solve the economic problem and properlydistribute the existing debt. 

In the absence of a declaration of the measures that this Governmentproposes to take in carrying out its proffer of good offices, it suggeststhat Spain be left free to conduct military operations and grant politicalreforms, while the United States for its part shall enforce its neutralobligations and cut off the assistance which it is asserted the insurgentsreceive from this country. The supposition of an indefinite prolongation ofthe war is denied. It is asserted that the western provinces are alreadywell-nigh reclaimed, that the planting of cane and tobacco therein has beenresumed, and that by force of arms and new and ample reforms very early andcomplete pacification is hoped for. 

The immediate amelioration of existing conditions under the newadministration of Cuban affairs is predicted, and therewithal thedisturbance and all occasion for any change of attitude on the part of theUnited States. Discussion of the question of the international duties andresponsibilities of the United States as Spain understands them ispresented, with an apparent disposition to charge us with failure in thisregard. This charge is without any basis in fact. It could not have beenmade if Spain had been cognizant of the constant efforts this Governmenthas made, at the cost of millions and by the employment of theadministrative machinery of the nation at command, to perform its full dutyaccording to the law of nations. That it has successfully prevented thedeparture of a single military expedition or armed vessel from our shoresin violation of our laws would seem to be a sufficient answer. But of thisaspect of the Spanish note it is not necessary to speak further now. Firmin the conviction of a wholly performed obligation, due response to thischarge has been made in diplomatic course. 

Throughout all these horrors and dangers to our own peace this Governmenthas never in any way abrogated its sovereign prerogative of reserving toitself the determination of its policy and course according to its own highsense of right and in consonance with the dearest interests and convictionsof our own people should the prolongation of the strife so demand. 

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

Recognition of the belligerency of the Cuban insurgents has often beencanvassed as a possible, if not inevitable, step both in regard to theprevious ten years' struggle and during the present war. I am not unmindfulthat the two Houses of Congress in the spring of 1896 expressed the opinionby concurrent resolution that a condition of public war existed requiringor justifying the recognition of a state of belligerency in Cuba, andduring the extra session the Senate voted a joint resolution of likeimport, which, however, was not brought to a vote in the House ofRepresentatives. In the presence of these significant expressions of thesentiment of the legislative branch it behooves the Executive to soberlyconsider the conditions under which so important a measure must needs restfor justification. It is to be seriously considered whether the Cubaninsurrection possesses beyond dispute the attributes of statehood, whichalone can demand the recognition of belligerency in its favor. Possession, in short, of the essential qualifications of sovereignty by the insurgentsand the conduct of the war by them according to the received code of warare no less important factors toward the determination of the problem ofbelligerency than are the influences and consequences of the struggle uponthe internal polity of the recognizing state. 

The wise utterances of President Grant in his memorable message of December7, 1875, are signally relevant to the present situation in Cuba, and it maybe wholesome now to recall them. At that time a ruinous conflict had forseven years wasted the neighboring island. During all those years an utterdisregard of the laws of civilized warfare and of the just demands ofhumanity, which called forth expressions of condemnation from the nationsof Christendom, continued unabated. Desolation and ruin pervaded thatproductive region, enormously affecting the commerce of all commercialnations, but that of the United States more than any other by reason ofproximity and larger trade and intercourse. At that juncture General Grantuttered these words, which now, as then, sum up the elements of theproblem: A recognition of the independence of Cuba being, in my opinion, impracticable and indefensible, the question which next presents itself isthat of the recognition of belligerent rights in the parties to thecontest. 

In a former message to Congress I had occasion to consider this question, and reached the conclusion that the conflict in Cuba, dreadful anddevastating as were its incidents, did not rise to the fearful dignity ofwar. It is possible that the acts of foreign powers, and even acts of Spainherself, of this very nature, might be pointed to in defense of suchrecognition. But now, as in its past history, the United States shouldcarefully avoid the false lights which might lead it into the mazes ofdoubtful law and of questionable propriety, and adhere rigidly and sternlyto the rule, which has been its guide, of doing only that which is rightand honest and of good report. The question of according or of withholdingrights of belligerency must be judged in every case in view of theparticular attending facts. Unless justified by necessity, it is always, and justly, regarded as an unfriendly act and a gratuitous demonstration ofmoral support to the rebellion. It is necessary, and it is required, whenthe interests and rights of another government or of its people are so faraffected by a pending civil conflict as to require a definition of itsrelations to the parties thereto. But this conflict must be one which willbe recognized in the sense of international law as war. Belligerence, too, is a fact. The mere existence of contending armed bodies and theiroccasional conflicts do not constitute war in the sense referred to. Applying to the existing condition of affairs in Cuba the tests recognizedby publicists and writers on international law, and which have beenobserved by nations of dignity, honesty, and power when free from sensitiveor selfish and unworthy motives, I fail to find in the insurrection theexistence of such a substantial political organization, real, palpable, andmanifest to the world, having the forms and capable of the ordinaryfunctions of government toward its own people and to other states, withcourts for the administration of justice, with a local habitation, possessing such organization of force, such material, such occupation ofterritory, as to take the contest out of the category of a mere rebelliousinsurrection or occasional skirmishes and place it on the terrible footingof war, to which a recognition of belligerency would aim to elevate it. Thecontest, moreover, is solely on land; the insurrection has not possesseditself of a single seaport whence it may send forth its flag, nor has itany means of communication with foreign powers except through the militarylines of its adversaries. No apprehension of any of those sudden anddifficult complications which a war upon the ocean is apt to precipitateupon the vessels, both commercial and national, and upon the consularofficers of other powers calls for the definition of their relations to theparties to the contest. Considered as a question of expediency, I regardthe accordance of belligerent rights still to be as unwise and premature asI regard it to be, at present, indefensible as a measure of right. Suchrecognition entails upon the country according the rights which flow fromit difficult and complicated duties, and requires the exaction from thecontending parties of the strict observance of their rights andobligations. It confers the right of search upon the high seas by vesselsof both parties; it would subject the carrying of arms and munitions ofwar, which now may be transported freely and without interruption in thevessels of the United States, to detention and to possible seizure; itwould give rise to countless vexatious questions, would release the parentGovernment from responsibility for acts done by the insurgents, and wouldinvest Spain with the right to exercise the supervision recognized by ourtreaty of 1795 over our commerce on the high seas, a very large part ofwhich, in its traffic between the Atlantic and the Gulf States and betweenall of them and the States on the Pacific, passes through the waters whichwash the shores of Cuba. The exercise of this supervision could scarce failto lead, if not to abuses, certainly to collisions perilous to the peacefulrelations of the two States. There can be little doubt to what result suchsupervision would before long draw this nation. It would be unworthy of theUnited States to inaugurate the possibilities of such result by measures ofquestionable right or expediency or by any indirection. Turning to thepractical aspects of a recognition of belligerency and reviewing itsinconveniences and positive dangers, still further pertinent considerationsappear. In the code of nations there is no such thing as a nakedrecognition of belligerency, unaccompanied by the assumption ofinternational neutrality. Such recognition, without more, will not conferupon either party to a domestic conflict a status not theretofore actuallypossessed or affect the relation of either party to other states. The actof recognition usually takes the form of a solemn proclamation ofneutrality, which recites the de facto condition of belligerency as itsmotive. It announces a domestic law of neutrality in the declaring state. It assumes the international obligations of a neutral in the presence of apublic state of war. It warns all citizens and others within thejurisdiction of the proclaimant that they violate those rigorousobligations at their own peril and can not expect to be shielded from theconsequences. The right of visit and search on the seas and seizure ofvessels and cargoes and contraband of war and good prize under admiraltylaw must under international law be admitted as a legitimate consequence ofa proclamation of belligerency. While according the equal belligerentrights defined by public law to each party in our ports disfavors would beimposed on both, which, while nominally equal, would weigh heavily inbehalf of Spain herself. Possessing a navy and controlling the ports ofCuba, her maritime rights could be asserted not only for the militaryinvestment of the island, but up to the margin of our own territorialwaters, and a condition of things would exist for which the Cubans withintheir own domain could not hope to create a parallel, while its creationthrough aid or sympathy from within our domain would be even moreimpossible than now, with the additional obligations of internationalneutrality we would perforce assume. 

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

For these reasons I regard the recognition of the belligerency of the Cubaninsurgents as now unwise, and therefore inadmissible. Should that stephereafter be deemed wise as a measure of right and duty, the Executive willtake it. 

Intervention upon humanitarian grounds has been frequently suggested andhas not failed to receive my most anxious and earnest consideration. Butshould such a step be now taken, when it is apparent that a hopeful changehas supervened in the policy of Spain toward Cuba? A new government hastaken office in the mother country. It is pledged in advance to thedeclaration that all the effort in the world can not suffice to maintainpeace in Cuba by the bayonet; that vague promises of reform aftersubjugation afford no solution of the insular problem; that with asubstitution of commanders must come a change of the past system of warfarefor one in harmony with a new policy, which shall no longer aim to drivethe Cubans to the "horrible alternative of taking to the thicket orsuccumbing in misery;" that reforms must be instituted in accordance withthe needs and circumstances of the time, and that these reforms, whiledesigned to give full autonomy to the colony and to create a virtual entityand self-controlled administration, shall yet conserve and affirm thesovereignty of Spain by a just distribution of powers and burdens upon abasis of mutual interest untainted by methods of selfish expediency. 

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

Decrees in application of the foreshadowed reforms have already beenpromulgated. The full text of these decrees has not been received, but asfurnished in a telegraphic summary from our minister are: All civil andelectoral rights of peninsular Spaniards are, in virtue of existingconstitutional authority, forthwith extended to colonial Spaniards. Ascheme of autonomy has been proclaimed by decree, to become effective uponratification by the Cortes. It creates a Cuban parliament, which, with theinsular executive, can consider and vote upon all subjects affecting localorder and interests, possessing unlimited powers save as to matters ofstate, war, and the navy, as to which the Governor-General acts by his ownauthority as the delegate of the central Government. This parliamentreceives the oath of the Governor-General to preserve faithfully theliberties and privileges of the colony, and to it the colonial secretariesare responsible. It has the right to propose to the central Government, through the Governor-General, modifications of the national charter and toinvite new projects of law or executive measures in the interest of thecolony. 

Besides its local powers, it is competent, first, to regulate electoralregistration and procedure and prescribe the qualifications of electors andthe manner of exercising suffrage; second, to organize courts of justicewith native judges from members of the local bar; third, to frame theinsular budget, both as to expenditures and revenues, without limitation ofany kind, and to set apart the revenues to meet the Cuban share of thenational budget, which latter will be voted by the national Cortes with theassistance of Cuban senators and deputies; fourth, to initiate or take partin the negotiations of the national Government for commercial treatieswhich may affect Cuban interests; fifth, to accept or reject commercialtreaties which the national Government may have concluded without theparticipation of the Cuban government; sixth, to frame the colonial tariff, acting in accord with the peninsular Government in scheduling articles ofmutual commerce between the mother country and the colonies. Beforeintroducing or voting upon a bill the Cuban government or the chambers willlay the project before the central Government and hear its opinion thereon, all the correspondence in such regard being made public. Finally, allconflicts of jurisdiction arising between the different municipal, provincial, and insular assemblies, or between the latter and the insularexecutive power, and which from their nature may not be referable to thecentral Government for decision, shall be submitted to the courts. 

That the government of Sagasta has entered upon a course from whichrecession with honor is impossible can hardly be questioned; that in thefew weeks it has existed it has made earnest of the sincerity of itsprofessions is undeniable. I shall not impugn its sincerity, nor shouldimpatience be suffered to embarrass it in the task it has undertaken. It ishonestly due to Spain and to our friendly relations with Spain that sheshould be given a reasonable chance to realize her expectations and toprove the asserted efficacy of the new order of things to which she standsirrevocably committed. She has recalled the commander whose brutal ordersinflamed the American mind and shocked the civilized world. She hasmodified the horrible order of concentration and has undertaken to care forthe helpless and permit those who desire to resume the cultivation of theirfields to do so, and assures them of the protection of the SpanishGovernment in their lawful occupations. She has just released theCompetitor prisoners, heretofore sentenced to death, and who have been thesubject of repeated diplomatic correspondence during both this and thepreceding Administration. 

Not a single American citizen is now in arrest or confinement in Cuba ofwhom this Government has any knowledge. The near future will demonstratewhether the indispensable condition of a righteous peace, just alike to theCubans and to Spain as well as equitable to all our interests so intimatelyinvolved in the welfare of Cuba, is likely to be attained. If not, theexigency of further and other action by the United States will remain to betaken. When that time comes that action will be determined in the line ofindisputable right and duty. It will be faced, without misgiving orhesitancy in the light of the obligation this Government owes to itself, tothe people who have confided to it the protection of their interests andhonor, and to humanity. 

Sure of the right, keeping free from all offense ourselves, actuated onlyby upright and patriotic considerations, moved neither by passion norselfishness, the Government will continue its watchful care over the rightsand property of American citizens and will abate none of its efforts tobring about by peaceful agencies a peace which shall be honorable andenduring. If it shall hereafter appear to be a duty imposed by ourobligations to ourselves, to civilization and humanity to intervene withforce, it shall be without fault on our part and only because the necessityfor such action will be so clear as to command the support and approval ofthe civilized world. 

By a special message dated the 16th day of June last, I laid before theSenate a treaty signed that day by the plenipotentiaries of the UnitedStates and of the Republic of Hawaii, having for its purpose theincorporation of the Hawaiian Islands as an integral part of the UnitedStates and under its sovereignty. The Senate having removed the injunctionof secrecy, although the treaty is still pending before that body, thesubject may be properly referred to in this Message because the necessaryaction of the Congress is required to determine by legislation many detailsof the eventual union should the fact of annexation be accomplished, as Ibelieve it should be. 

While consistently disavowing from a very early period any aggressivepolicy of absorption in regard to the Hawaiian group, a long series ofdeclarations through three-quarters of a century has proclaimed the vitalinterest of the United States in the independent life of the Islands andtheir intimate commercial dependence upon this country. At the same time ithas been repeatedly asserted that in no event could the entity of Hawaiianstatehood cease by the passage of the Islands under the domination orinfluence of another power than the United States. Under thesecircumstances, the logic of events required that annexation, heretoforeoffered but declined, should in the ripeness of time come about as thenatural result of the strengthening ties that bind us to those Islands, andbe realized by the free will of the Hawaiian State. 

That treaty was unanimously ratified without amendment by the Senate andPresident of the Republic of Hawaii on the 10th of September last, and onlyawaits the favorable action of the American Senate to effect the completeabsorption of the Islands into the domain of the United States. What theconditions of such a union shall be, the political relation thereof to theUnited States, the character of the local administration, the quality anddegree of the elective franchise of the inhabitants, the extension of thefederal laws to the territory or the enactment of special laws to fit thepeculiar condition thereof, the regulation if need be of the labor systemtherein, are all matters which the treaty has wisely relegated to theCongress. 

If the treaty is confirmed as every consideration of dignity and honorrequires, the wisdom of Congress will see to it that, avoiding abruptassimilation of elements perhaps hardly yet fitted to share in the highestfranchises of citizenship, and having due regard to the geographicalconditions, the most just provisions for self-rule in local matters withthe largest political liberties as an integral part of our Nation will beaccorded to the Hawaiians. No less is due to a people who, after nearlyfive years of demonstrated capacity to fulfill the obligations ofself-governing statehood, come of their free will to merge their destiniesin our body-politic. 

The questions which have arisen between Japan and Hawaii by reason of thetreatment of Japanese laborers emigrating to the Islands under theHawaiian-Japanese convention of 1888, are in a satisfactory stage ofsettlement by negotiation. This Government has not been invited to mediate, and on the other hand has sought no intervention in that matter, furtherthan to evince its kindliest disposition toward such a speedy and directadjustment by the two sovereign States in interest as shall comport withequity and honor. It is gratifying to learn that the apprehensions at firstdisplayed on the part of Japan lest the cessation of Hawaii's national lifethrough annexation might impair privileges to which Japan honorably laidclaim, have given place to confidence in the uprightness of thisGovernment, and in the sincerity of its purpose to deal with all possibleulterior questions in the broadest spirit of friendliness. 

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

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

A subject of large importance to our country, and increasing appreciationon the part of the people, is the completion of the great highway of tradebetween the Atlantic and Pacific, known as the Nicaragua Canal. Its utilityand value to American commerce is universally admitted. The Commissionappointed under date of July 24 last "to continue the surveys andexaminations authorized by the act approved March 2, 1895, " in regard to"the proper route, feasibility, and cost of construction of the NicaraguaCanal, with a view of making complete plans for the entire work ofconstruction of such canal, " is now employed in the undertaking. In thefuture I shall take occasion to transmit to Congress the report of thisCommission, making at the same time such further suggestions as may thenseem advisable. 

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

The gratifying action of our great sister Republic of France in joiningthis country in the attempt to bring about an agreement among the principalcommercial nations of Europe, whereby a fixed and relative value betweengold and silver shall be secured, furnishes assurance that we are not aloneamong the larger nations of the world in realizing the internationalcharacter of the problem and in the desire of reaching some wise andpractical solution of it. The British Government has published a resume ofthe steps taken jointly by the French ambassador in London and the specialenvoys of the United States, with whom our ambassador at London activelyco-operated in the presentation of this subject to Her Majesty'sGovernment. This will be laid before Congress. 

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

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

In order to execute as early as possible the provisions of the third andfourth sections of the Revenue Act, approved July 24, 1897, I appointed theHon. John A. Kasson of Iowa, a special commissioner plenipotentiary toundertake the requisite negotiations with foreign countries desiring toavail themselves of these provisions. The negotiations are now proceedingwith several Governments, both European and American. It is believed thatby a careful exercise of the powers conferred by that Act some grievancesof our own and of other countries in our mutual trade relations may beeither removed, or largely alleviated, and that the volume of ourcommercial exchanges may be enlarged, with advantage to both contractingparties. 

Most desirable from every standpoint of national interest and patriotism isthe effort to extend our foreign commerce. To this end our merchant marineshould be improved and enlarged. We should do our full share of thecarrying trade of the world. We do not do it now. We should be the laggardno longer. The inferiority of our merchant marine is justly humiliating tothe national pride. The Government by every proper constitutional means, should aid in making our ships familiar visitors at every commercial portof the world, thus opening up new and valuable markets to the surplusproducts of the farm and the factory. 

The efforts which had been made during the two previous years by mypredecessor to secure better protection to the fur seals in the NorthPacific Ocean and Bering Sea, were renewed at an early date by thisAdministration, and have been pursued with earnestness. Upon my invitation, the Governments of Japan and Russia sent delegates to Washington, and aninternational conference was held during the months of October and Novemberlast, wherein it was unanimously agreed that under the existing regulationsthis species of useful animals was threatened with extinction, and that aninternational agreement of all the interested powers was necessary fortheir adequate protection. 

The Government of Great Britain did not see proper to be represented atthis conference, but subsequently sent to Washington, as delegates, theexpert commissioners of Great Britain and Canada who had, during the pasttwo years, visited the Pribilof Islands, and who met in conference similarcommissioners on the part of the United States. The result of thisconference was an agreement on important facts connected with the conditionof the seal herd, heretofore in dispute, which should place beyondcontroversy the duty of the Governments concerned to adopt measures withoutdelay for the preservation and restoration of the herd. Negotiations tothis end are now in progress, the result of which I hope to be able toreport to Congress at an early day. 

International arbitration cannot be omitted from the list of subjectsclaiming our consideration. Events have only served to strengthen thegeneral views on this question expressed in my inaugural address. The bestsentiment of the civilized world is moving toward the settlement ofdifferences between nations without resorting to the horrors of war. Treaties embodying these humane principles on broad lines, without in anyway imperiling our interests or our honor, shall have my constantencouragement. 

The acceptance by this Government of the invitation of the Republic ofFrance to participate in the Universal Exposition of 1900, at Paris, wasimmediately followed by the appointment of a special commissioner torepresent the United States in the proposed exposition, with specialreference to the securing of space for an adequate exhibit on behalf of theUnited States. 

The special commissioner delayed his departure for Paris long enough toascertain the probable demand for space by American exhibitors. Hisinquiries developed an almost unprecedented interest in the proposedexposition, and the information thus acquired enabled him to justify anapplication for a much larger allotment of space for the American sectionthan had been reserved by the exposition authorities. The result wasparticularly gratifying, in view of the fact that the United States was oneof the last countries to accept the invitation of France. 

The reception accorded our special commissioner was most cordial, and hewas given every reasonable assurance that the United States would receive aconsideration commensurate with the proportions of our exhibit. The reportof the special commissioner as to the magnitude and importance of thecoming exposition, and the great demand for space by American exhibitors, supplies new arguments for a liberal and judicious appropriation byCongress, to the end that an exhibit fairly representative of theindustries and resources of our country may be made in an exposition whichwill illustrate the world's progress during the nineteenth century. Thatexposition is intended to be the most important and comprehensive of thelong series of international exhibitions, of which our own at Chicago was abrilliant example, and it is desirable that the United States should make aworthy exhibit of American genius and skill and their unrivaledachievements in every branch of industry. 

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

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

The great increase of the Navy which has taken place in recent years wasjustified by the requirements for national defense, and has received publicapprobation. The time has now arrived, however, when this increase, towhich the country is committed, should, for a time, take the form ofincreased facilities commensurate with the increase of our naval vessels. It is an unfortunate fact that there is only one dock on the Pacific Coastcapable of docking our largest ships, and only one on the Atlantic Coast, and that the latter has for the last six or seven months been under repairand therefore incapable of use. Immediate steps should be taken to providethree or four docks of this capacity on the Atlantic Coast, at least one onthe Pacific Coast, and a floating dock in the Gulf. This is therecommendation of a very competent Board, appointed to investigate thesubject. There should also be ample provision made for powder andprojectiles, and other munitions of war, and for an increased number ofofficers and enlisted men. Some additions are also necessary to ournavy-yards, for the repair and care of our large number of vessels. Asthere are now on the stocks five battle ships of the largest class, whichcannot be completed for a year or two, I concur with the recommendation ofthe Secretary of the Navy for an appropriation authorizing the constructionof one battle ship for the Pacific Coast, where, at present, there is onlyone in commission and one under construction, while on the Atlantic Coastthere are three in commission and four under construction; and also thatseveral torpedo boats be authorized in connection with our general systemof coast defense. 

The Territory of Alaska requires the prompt and early attention ofCongress. The conditions now existing demand material changes in the lawsrelating to the Territory. The great influx of population during the pastsummer and fall and the prospect of a still larger immigration in thespring will not permit us to longer neglect the extension of civilauthority within the Territory or postpone the establishment of a morethorough government. 

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

It will be seen how much remains to be done for that vast and remote andyet promising portion of our country. Special authority was given to thePresident by the Act of Congress approved July 24, 1897, to divide thatTerritory into two land districts and to designate the boundaries thereofand to appoint registers and receivers of said land offices, and thePresident was also authorized to appoint a surveyor-general for the entiredistrict. Pursuant to this authority, a surveyor-general and receiver havebeen appointed, with offices at Sitka. If in the ensuing year theconditions justify it, the additional land district authorized by law willbe established, with an office at some point in the Yukon Valley. Noappropriation, however, was made for this purpose, and that is nownecessary to be done for the two land districts into which the Territory isto be divided. 

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

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

The startling though possibly exaggerated reports from the Yukon Rivercountry, of the probable shortage of food for the large number of peoplewho are wintering there without the means of leaving the country areconfirmed in such measure as to justify bringing the matter to theattention of Congress. Access to that country in winter can be had only bythe passes from Dyea and vicinity, which is a most difficult and perhaps animpossible task. However, should these reports of the suffering of ourfellow-citizens be further verified, every effort at any cost should bemade to carry them relief. 

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

The Secretary of the Interior reports that leading Indians have absorbedgreat tracts of land to the exclusion of the common people, and governmentby an Indian aristocracy has been practically established, to the detrimentof the people. It has been found impossible for the United States to keepits citizens out of the Territory, and the executory conditions containedin the treaties with these Nations have for the most part become impossibleof execution. Nor has it been possible for the Tribal Governments to secureto each individual Indian his full enjoyment in common with Other Indiansof the common property of the Nations. Friends of the Indians have longbelieved that the best interests of the Indians of the Five CivilizedTribes would be found in American citizenship, with all the rights andprivileges which belong to that condition. 

By section 16, of the act of March 3, 1893, the President was authorized toappoint three commissioners to enter into negotiations with the Cherokee, Choctaw, Chickasaw, Muscogee (or Creek), and Seminole Nations, commonlyknown as the Five Civilized Tribes in the Indian Territory. Briefly, thepurposes of the negotiations were to be: The extinguishment of Tribaltitles to any lands within that Territory now held by any and all suchNations or Tribes, either by cession of the same or some part thereof tothe United States, or by allotment and division of the same in severaltyamong the Indians of such Nations or Tribes respectively as may be entitledto the same, or by such other method as may be agreed upon between theseveral Nations and Tribes aforesaid, or each of them, with the UnitedStates, with a view to such an adjustment upon the basis of justice andequity as may, with the consent of the said Nations of Indians so far asmay be necessary, be requisite and suitable to enable the ultimate creationof a State or States of the Union which shall embrace the lands within saidIndian Territory. 

The Commission met much opposition from the beginning. The Indians werevery slow to act, and those in control manifested a decided disinclinationto meet with favor the propositions submitted to them. A little more thanthree years after this organization the Commission effected an agreementwith the Choctaw Nation alone. The Chickasaws, however, refused to agree toits terms, and as they have a common interest with the Choctaws in thelands of said Nations, the agreement with the latter Nation could have noeffect without the consent of the former. On April 23, 1897, the Commissioneffected an agreement with both tribes--the Choctaws and Chickasaws. Thisagreement, it is understood, has been ratified by the constitutedauthorities of the respective Tribes or Nations parties thereto, and onlyrequires ratification by Congress to make it binding. 

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

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

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

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

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

The recent prevalence of yellow fever in a number of cities and townsthroughout the South has resulted in much disturbance of commerce, anddemonstrated the necessity of such amendments to our quarantine laws aswill make the regulations of the national quarantine authorities paramount. The Secretary of the Treasury, in the portion of his report relating to theoperation of the Marine Hospital Service, calls attention to the defects inthe present quarantine laws, and recommends amendments thereto which willgive the Treasury Department the requisite authority to prevent theinvasion of epidemic diseases from foreign countries, and in times ofemergency, like that of the past summer, will add to the efficiency of thesanitary measures for the protection of the people, and at the same timeprevent unnecessary restriction of commerce. I concur in hisrecommendation. 

In further effort to prevent the invasion of the United States by yellowfever, the importance of the discovery of the exact cause of the disease, which up to the present time has been undetermined, is obvious, and to thisend a systematic bacteriological investigation should be made. I thereforerecommend that Congress authorize the appointment of a commission by thePresident, to consist of four expert bacteriologists, one to be selectedfrom the medical officers of the Marine Hospital Service, one to beappointed from civil life, one to be detailed from the medical officers ofthe Army, and one from the medical officers of the Navy. 

The Union Pacific Railway, Main Line, was sold under the decree of theUnited States Court for the District of Nebraska, on the 1st and 2d ofNovember of this year. The amount due the Government consisted of theprincipal of the subsidy bonds, $27, 236, 512, and the accrued interestthereon, $31, 211, 711. 75, making the total indebtedness, $58, 448, 223. 75. Thebid at the sale covered the first mortgage lien and the entire mortgageclaim of the Government, principal and interest. 

The sale of the subsidized portion of the Kansas Pacific Line, upon whichthe Government holds a second mortgage lien, has been postponed at theinstance of the Government to December 16, 1897. The debt of this divisionof the Union Pacific Railway to the Government on November 1, 1897, was theprincipal of the subsidy bonds, $6, 303, 000, and the unpaid and accruedinterest thereon, $6, 626, 690. 33, making a total of $12, 929, 690. 33. 

The sale of this road was originally advertised for November 4, but for thepurpose of securing the utmost public notice of the event it was postponeduntil December 16, and a second advertisement of the sale was made. By thedecree of the Court, the upset price on the sale of the Kansas Pacific willyield to the Government the sum of $2, 500, 000 over all prior liens, costs, and charges. If no other or better bid is made, this sum is all that theGovernment will receive on its claim of nearly $13, 000, 000. The Governmenthas no information as to whether there will be other bidders or a betterbid than the minimum amount herein stated. The question presented thereforeis: Whether the Government shall, under the authority given it by the actof March 3, 1887, purchase or redeem the road in the event that a bid isnot made by private parties covering the entire Government claim. Toqualify the Government to bid at the sales will require a deposit of$900, 000, as follows: In the Government cause $500, 000 and in each of thefirst mortgage causes $200, 000, and in the latter the deposit must be incash. Payments at the sale are as follows: Upon the acceptance of the bid asum which with the amount already deposited shall equal fifteen per cent ofthe bid; the balance in installments of twenty-five per cent thirty, forty, and fifty days after the confirmation of the sale. The lien on the KansasPacific prior to that of the Government on the 30th July, 1897, principaland interest, amounted to $7, 281, 048. 11. The Government, therefore, shouldit become the highest bidder, will have to pay the amount of the firstmortgage lien. 

I believe that under the act of 1887 it has the authority to do this and inabsence of any action by Congress I shall direct the Secretary of theTreasury to make the necessary deposit as required by the Court's decree toqualify as a bidder and to bid at the sale a sum which will at least equalthe principal of the debt due to the Government; but suggest in order toremove all controversy that an amendment of the law be immediately passedexplicitly giving such powers and appropriating in general terms whateversum is sufficient therefor. 

In so important a matter as the Government becoming the possible owner ofrailroad property which it perforce must conduct and operate, I feelconstrained to lay before Congress these facts for its consideration andaction before the consummation of the sale. It is clear to my mind that theGovernment should not permit the property to be sold at a price which willyield less than one-half of the principal of its debt and less thanone-fifth of its entire debt, principal and interest. But whether theGovernment, rather than accept less than its claim, should become a bidderand thereby the owner of the property, I submit to the Congress foraction. 

The Library building provided for by the act of Congress approved April 15, 1886, has been completed and opened to the public. It should be a matter ofcongratulation that through the foresight and munificence of Congress thenation possesses this noble treasure-house of knowledge. It is earnestly tobe hoped that having done so much toward the cause of education, Congresswill continue to develop the Library in every phase of research to the endthat it may be not only one of the most magnificent but among the richestand most useful libraries in the world. 

The important branch of our Government known as the Civil Service, thepractical improvement of which has long been a subject of earnestdiscussion, has of late years received increased legislative and Executiveapproval. During the past few months the service has been placed upon astill firmer basis of business methods and personal merit. While the rightof our veteran soldiers to reinstatement in deserving cases has beenasserted, dismissals for merely political reasons have been carefullyguarded against, the examinations for admittance to the service enlargedand at the same time rendered less technical and more practical; and adistinct advance has been made by giving a hearing before dismissal uponall cases where incompetency is charged or demand made for the removal ofofficials in any of the Departments. This order has been made to give tothe accused his right to be heard but without in anyway impairing the powerof removal, which should always be exercised in cases of inefficiency andincompetency, and which is one of the vital safeguards of the civil servicereform system, preventing stagnation and deadwood and keeping everyemployee keenly alive to the fact that the security of his tenure dependsnot on favor but on his own tested and carefully watched record ofservice. 

Much of course still remains to be accomplished before the system can bemade reasonably perfect for our needs. There are places now in theclassified service which ought to be exempted and others not classified mayproperly be included. I shall not hesitate to exempt cases which I thinkhave been improperly included in the classified service or include thosewhich in my judgment will best promote the public service. The system hasthe approval of the people and it will be my endeavor to uphold and extendit. 

I am forced by the length of this Message to omit many important referencesto affairs of the Government with which Congress will have to deal at thepresent session. They are fully discussed in the departmental reports, toall of which I invite your earnest attention. 

The estimates of the expenses of the Government by the several Departmentswill, I am sure, have your careful scrutiny. While the Congress may notfind it an easy task to reduce the expenses of the Government, it shouldnot encourage their increase. These expenses will in my judgment admit of adecrease in many branches of the Government without injury to the publicservice. It is a commanding duty to keep the appropriations within thereceipts of the Government, and thus avoid a deficit. 

***

State of the Union AddressWilliam McKinleyDecember 5, 1898

To the Senate and House of Representatives:

Notwithstanding the added burdens rendered necessary by the war, our peoplerejoice in a very satisfactory and steadily increasing degree ofprosperity, evidenced by the largest volume of business ever recorded. Manufacture has been productive, agricultural pursuits have yieldedabundant returns, labor in all fields of industry is better rewarded, revenue legislation passed by the present Congress has increased theTreasury's receipts to the amount estimated by its authors, the finances ofthe Government have been successfully administered and its credit advancedto the first rank, while its currency has been maintained at the world'shighest standard. Military service under a common flag and for a righteouscause has strengthened the national spirit and served to cement moreclosely than ever the fraternal bonds between every section of thecountry. 

A review of the relation of the United States to other powers, alwaysappropriate, is this year of primary importance in view of the momentousissues which have arisen, demanding in one instance the ultimatedetermination by arms and involving far-reaching consequences which willrequire the earnest attention of the Congress. 

In my last annual message very full consideration was given to the questionof the duty of the Government of the United States toward Spain and theCuban insurrection as being by far the most important problem with which wewere then called upon to deal. The considerations then advanced and theexposition of the views therein expressed disclosed my sense of the extremegravity of the situation. Setting aside as logically unfounded orpractically inadmissible the recognition of the Cuban insurgents asbelligerents, the recognition of the independence of Cuba, neutralintervention to end the war by imposing a rational compromise between thecontestants, intervention in favor of one or the other party, and forcibleannexation of the island, I concluded it was honestly due to our friendlyrelations with Spain that she should be given a reasonable chance torealize her expectations of reform to which she had become irrevocablycommitted. Within a few weeks previously she had announced comprehensiveplans which it was confidently asserted would be efficacious to remedy theevils so deeply affecting our own country, so injurious to the trueinterests of the mother country as well as to those of Cuba, and sorepugnant to the universal sentiment of humanity. 

The ensuing month brought little sign of real progress toward thepacification of Cuba. The autonomous administrations set up in the capitaland some of the principal cities appeared not to gain the favor of theinhabitants nor to be able to extend their influence to the large extent ofterritory held by the insurgents, while the military arm, obviously unableto cope with the still active rebellion, continued many of the mostobjectionable and offensive policies of the government that had precededit. No tangible relief was afforded the vast numbers of unhappyreconcentrados, despite the reiterated professions made in that regard andthe amount appropriated by Spain to that end. The proffered expedient ofzones of cultivation proved illusory. Indeed no less practical nor moredelusive promises of succor could well have been tendered to the exhaustedand destitute people, stripped of all that made life and home dear andherded in a strange region among unsympathetic strangers hardly lessnecessitous than themselves. 

By the end of December the mortality among them had frightfully increased. Conservative estimates from Spanish sources placed the deaths among thesedistressed people at over 40 per cent from the time General Weyler's decreeof reconcentration was enforced. With the acquiescence of the Spanishauthorities, a scheme was adopted for relief by charitable contributionsraised in this country and distributed, under the direction of theconsul-general and the several consuls, by noble and earnest individualeffort through the organized agencies of the American Red Cross. Thousandsof lives were thus saved, but many thousands more were inaccessible to suchforms of aid. 

The war continued on the old footing, without comprehensive plan, developing only the same spasmodic encounters, barren of strategic result, that had marked the course of the earlier ten years' rebellion as well asthe present insurrection from its start. No alternative save physicalexhaustion of either combatant, and therewithal the practical ruin of theisland, lay in sight, but how far distant no one could venture toconjecture. 

At this juncture, on the 15th of February last, occurred the destruction ofthe battle ship Maine while rightfully lying in the harbor of Havana on amission of international courtesy and good will--a catastrophe thesuspicious nature and horror of which stirred the nation's heartprofoundly. It is a striking evidence of the poise and sturdy good sensedistinguishing our national character that this shocking blow, falling upona generous people already deeply touched by preceding events in Cuba, didnot move them to an instant desperate resolve to tolerate no longer theexistence of a condition of danger and disorder at our doors that madepossible such a deed, by whomsoever wrought. Yet the instinct of justiceprevailed, and the nation anxiously awaited the result of the searchinginvestigation at once set on foot. The finding of the naval board ofinquiry established that the origin of the explosion was external, by asubmarine mine, and only halted through lack of positive testimony to fixthe responsibility of its authorship. 

All these things carried conviction to the most thoughtful, even before thefinding of the naval court, that a crisis in our relations with Spain andtoward Cuba was at hand. So strong was this belief that it needed but abrief Executive suggestion to the Congress to receive immediate answer tothe duty of making instant provision for the possible and perhaps speedilyprobable emergency of war, and the remarkable, almost unique, spectacle waspresented of a unanimous vote of both Houses, on the 9th of March, appropriating $50, 000, 000 "for the national defense and for each and everypurpose connected therewith, to be expended at the discretion of thePresident. " That this act of prevision came none too soon was disclosedwhen the application of the fund was undertaken. Our coasts werepractically undefended. Our Navy needed large provision for increasedammunition and supplies, and even numbers to cope with any sudden attackfrom the navy of Spain, which comprised modern vessels of the highest typeof continental perfection. Our Army also required enlargement of men andmunitions. The details of the hurried preparation for the dreadedcontingency are told in the reports of the Secretaries of War and of theNavy, and need not be repeated here. It is sufficient to say that theoutbreak of war when it did come found our nation not unprepared to meetthe conflict. 

Nor was the apprehension of coming strife confined to our own country. Itwas felt by the continental powers, which on April 6, through theirambassadors and envoys, addressed to the Executive an expression of hopethat humanity and moderation might mark the course of this Government andpeople, and that further negotiations would lead to an agreement which, while securing the maintenance of peace, would afford all necessaryguaranties for the reestablishment of order in Cuba. In responding to thatrepresentation I said I shared the hope the envoys had expressed that peacemight be preserved in a manner to terminate the chronic condition ofdisturbance in Cuba, so injurious and menacing to our interests andtranquillity, as well as shocking to our sentiments of humanity; and whileappreciating the humanitarian and disinterested character of thecommunication they had made on behalf of the powers, I stated theconfidence of this Government, for its part, that equal appreciation wouldbe shown for its own earnest and unselfish endeavors to fulfill a duty tohumanity by ending a situation the indefinite prolongation of which hadbecome insufferable. 

Still animated by the hope of a peaceful solution and obeying the dictatesof duty, no effort was relaxed to bring about a speedy ending of the Cubanstruggle. Negotiations to this object continued actively with theGovernment of Spain, looking to the immediate conclusion of a six months'armistice in Cuba, with a view to effect the recognition of her people'sright to independence. Besides this, the instant revocation of the order ofreconcentration was asked, so that the sufferers, returning to their homesand aided by united American and Spanish effort, might be put in a way tosupport themselves and, by orderly resumption of the well-nigh destroyedproductive energies of the island, contribute to the restoration of itstranquillity and well-being. Negotiations continued for some little time atMadrid, resulting in offers by the Spanish Government which could not butbe regarded as inadequate. It was proposed to confide the preparation ofpeace to the insular parliament, yet to be convened under the autonomousdecrees of November, 1897, but without impairment in any wise of theconstitutional powers of the Madrid Government, which to that end wouldgrant an armistice, if solicited by the insurgents, for such time as thegeneral in chief might see fit to fix. How and with what scope ofdiscretionary powers the insular parliament was expected to set about the"preparation" of peace did not appear. If it were to be by negotiation withthe insurgents, the issue seemed to rest on the one side with a body chosenby a fraction of the electors in the districts under Spanish control, andon the other with the insurgent population holding the interior country, unrepresented in the so-called parliament and defiant at the suggestion ofsuing for peace. 

Grieved and disappointed at this barren outcome of my sincere endeavors toreach a practicable solution, I felt it my duty to remit the whole questionto the Congress. In the message of April 11, 1898, I announced that withthis last overture in the direction of immediate peace in Cuba and itsdisappointing reception by Spain the effort of the Executive was brought toan end. I again reviewed the alternative courses of action which had beenproposed, concluding that the only one consonant with international policyand compatible with our firm-set historical traditions was intervention asa neutral to stop the war and check the hopeless sacrifice of life, eventhough that resort involved "hostile constraint upon both the parties tothe contest, as well to enforce a truce as to guide the eventualsettlement. " The grounds justifying that step were the interests ofhumanity, the duty to protect the life and property of our citizens inCuba, the right to check injury to our commerce and people through thedevastation of the island, and, most important, the need of removing atonce and forever the constant menace and the burdens entailed upon ourGovernment by the uncertainties and perils of the situation caused by theunendurable disturbance in Cuba. I said: The long trial has proved that theobject for which Spain has waged the war can not be attained. The fire ofinsurrection may flame or may smolder with varying seasons, but it has notbeen and it is plain that it can not be extinguished by present methods. The only hope of relief and repose from a condition which can no longer beendured is the enforced pacification of Cuba. In the name of humanity, inthe name of civilization, in behalf of endangered American interests whichgive us the right and the duty to speak and to act, the war in Cuba muststop. In view of all this the Congress was asked to authorize and empowerthe President to take measures to secure a full and final termination ofhostilities between Spain and the people of Cuba and to secure in theisland the establishment of a stable government, capable of maintainingorder and observing its international obligations, insuring peace andtranquillity and the security of its citizens as well as our own, and forthe accomplishment of those ends to use the military and naval forces ofthe United States as might be necessary, with added authority to continuegenerous relief to the starving people of Cuba. 

The response of the Congress, after nine days of earnest deliberation, during which the almost unanimous sentiment of your body was developed onevery point save as to the expediency of coupling the proposed action witha formal recognition of the Republic of Cuba as the true and lawfulgovernment of that island--a proposition which failed of adoption--theCongress, after conference, on the 19th of April, by a vote of 42 to 35 inthe Senate and 311 to 6 in the House of Representatives, passed thememorable joint resolution declaring--

First. That the people of the island of Cuba are, and of right ought to be, free and independent. 

Second. That it is the duty of the United States to demand, and theGovernment of the United States does hereby demand, that the Government ofSpain at once relinquish its authority and government in the island of Cubaand withdraw its land and naval forces from Cuba and Cuban waters. 

Third. That the President of the United States be, and he hereby is, directed and empowered to use the entire land and naval forces of theUnited States and to call into the actual service of the United States themilitia of the several States to such extent as may be necessary to carrythese resolutions into effect. 

Fourth. That the United States hereby disclaims any disposition orintention to exercise sovereignty, jurisdiction, or control over saidisland except for the pacification thereof, and asserts its determinationwhen that is accomplished to leave the government and control of the islandto its people. This resolution was approved by the Executive on the nextday, April 20. A copy was at once communicated to the Spanish minister atthis capital, who forthwith announced that his continuance in Washingtonhad thereby become impossible, and asked for his passports, which weregiven him. He thereupon withdrew from Washington, leaving the protection ofSpanish interests in the United States to the French ambassador and theAustro-Hungarian minister. Simultaneously with its communication to theSpanish minister here, General Woodford, the American minister at Madrid, was telegraphed confirmation of the text of the joint resolution anddirected to communicate it to the Government of Spain with the formaldemand that it at once relinquish its authority and government in theisland of Cuba and withdraw its forces therefrom, coupling this demand withannouncement of the intentions of this Government as to the future of theisland, in conformity with the fourth clause of the resolution, and givingSpain until noon of April 23 to reply. 

That demand, although, as above shown, officially made known to the Spanishenvoy here, was not delivered at Madrid. After the instruction reachedGeneral Woodford on the morning of April 21, but before he could presentit, the Spanish minister of state notified him that upon the President'sapproval of the joint resolution the Madrid Government, regarding the actas "equivalent to an evident declaration of war, " had ordered its ministerin Washington to withdraw, thereby breaking off diplomatic relationsbetween the two countries and ceasing all official communication betweentheir respective representatives. General Woodford thereupon demanded hispassports and quitted Madrid the same day. 

Spain having thus denied the demand of the United States and initiated thatcomplete form of rupture of relations which attends a state of war, theexecutive powers authorized by the resolution were at once used by me tomeet the enlarged contingency of actual war between sovereign states. OnApril 22 I proclaimed a blockade of the north coast of Cuba, includingports on said coast between Cardenas and Bahia Honda, and the port ofCienfuegos, on the south coast of Cuba, and on the 23d I called forvolunteers to execute the purpose of the resolution. By my message of April25 the Congress was informed of the situation, and I recommended formaldeclaration of the existence of a state of war between the United Statesand Spain. The Congress accordingly voted on the same day the act approvedApril 25, 1898, declaring the existence of such war from and including the21st day of April, and reenacted the provision of the resolution of April20 directing the President to use all the armed forces of the nation tocarry that act into effect. Due notification of the existence of war asaforesaid was given April 25 by telegraph to all the governments with whichthe United States maintain relations, in order that their neutrality mightbe assured during the war. The various governments responded withproclamations of neutrality, each after its own methods. It is not amongthe least gratifying incidents of the struggle that the obligations ofneutrality were impartially discharged by all, often under delicate anddifficult circumstances. 

In further fulfillment of international duty I issued, April 26, 1893, aproclamation announcing the treatment proposed to be accorded to vesselsand their cargoes as to blockade, contraband, the exercise of the right ofsearch, and the immunity of neutral flags and neutral goods under enemy'sflag. A similar proclamation was made by the Spanish Government. In theconduct of hostilities the rules of the Declaration of Paris, includingabstention from resort to privateering, have accordingly been observed byboth belligerents, although neither was a party to that declaration. 

Our country thus, after an interval of half a century of peace with allnations, found itself engaged in deadly conflict with a foreign enemy. Every nerve was strained to meet the emergency. The response to the initialcall for 125, 000 volunteers was instant and complete, as was also theresult of the second call, of May 25, for 75, 000 additional volunteers. Theranks of the Regular Army were increased to the limits provided by the actof April 26, 1898. 

The enlisted force of the Navy on the 15th day of August, when it reachedits maximum, numbered 24, 123 men and apprentices. One hundred and threevessels were added to the Navy by purchase, 1 was presented to theGovernment, 1 leased, and the 4 vessels of the International NavigationCompany--the St. Paul, St. Louis, New York, and Paris--were chartered. Inaddition to these the revenue cutters and lighthouse tenders were turnedover to the Navy Department and became temporarily a part of the auxiliaryNavy. 

The maximum effective fighting force of the Navy during the war, separatedinto classes, was as follows:

Four battle ships of the first class, 1 battle ship of the second class, 2armored cruisers, 6 coast-defense monitors, 1 armored ram, 12 protectedcruisers, 3 unprotected cruisers, 18 gunboats, 1 dynamite cruiser, 11torpedo boats; vessels of the old Navy, including monitors, 14. AuxiliaryNavy: 11 auxiliary cruisers, 28 converted yachts, 27 converted tugs, 19converted colliers, 15 revenue cutters, 4 light-house tenders, and 19miscellaneous vessels. 

Much alarm was felt along our entire Atlantic seaboard lest some attackmight be made by the enemy. Every precaution was taken to prevent possibleinjury to our great cities lying along the coast. Temporary garrisons wereprovided, drawn from the State militia; infantry and light batteries weredrawn from the volunteer force. About 12, 000 troops were thus employed. Thecoast signal service was established for observing the approach of anenemy's ships to the coast of the United States, and the Life-Saving andLight-House services cooperated, which enabled the Navy Department to haveall portions of the Atlantic coast, from Maine to Texas, underobservation. 

The auxiliary Navy was created under the authority of Congress and wasofficered and manned by the Naval Militia of the several States. Thisorganization patrolled the coast and performed the duty of a second line ofdefense. Under the direction of the Chief of Engineers submarine mines wereplaced at the most exposed points. Before the outbreak of the war permanentmining casemates and cable galleries had been constructed at nearly allimportant harbors. Most of the torpedo material was not to be found in themarket, and had to be specially manufactured. Under date of April 19district officers were directed to take all preliminary measures short ofthe actual attaching of the loaded mines to the cables, and on April 22telegraphic orders were issued to place the loaded mines in position. 

The aggregate number of mines placed was 1, 535, at the principal harborsfrom Maine to California. Preparations were also made for the planting ofmines at certain other harbors, but owing to the early destruction of theSpanish fleet these mines were not placed. 

The Signal Corps was promptly organized, and performed service of the mostdifficult and important character. Its operations during the war coveredthe electrical connection of all coast fortifications, the establishment oftelephonic and telegraphic facilities for the camps at Manila, Santiago, and in Puerto Rico. There were constructed 300 miles of line at ten greatcamps, thus facilitating military movements from those points in a mannerheretofore unknown in military administration. Field telegraph lines wereestablished and maintained under the enemy's fire at Manila, and later theManila-Hongkong cable was reopened. 

In Puerto Rico cable communications were opened over a discontinued route, and on land the headquarters of the commanding officer was kept intelegraphic or telephonic communication with the division commanders onfour different lines of operations. 

There was placed in Cuban waters a completely outfitted cable ship, withwar cables and cable gear, suitable both for the destruction ofcommunications belonging to the enemy and the establishment of our own. Twoocean cables were destroyed under the enemy's batteries at Santiago. Theday previous to the landing of General Shafter's corps, at Caimanera, within 20 miles of the landing place, cable communications were establishedand a cable station opened giving direct communication with the Governmentat Washington. This service was invaluable to the Executive in directingthe operations of the Army and Navy. With a total force of over 1, 300, theloss was by disease in camp and field, officers and men included, only 5. 

The national-defense fund of $50, 000, 000 was expended in large part by theArmy and Navy, and the objects for which it was used are fully shown in thereports of the several Secretaries. It was a most timely appropriation, enabling the Government to strengthen its defenses and make preparationsgreatly needed in case of war. 

This fund being inadequate to the requirements of equipment and for theconduct of the war, the patriotism of the Congress provided the means inthe war-revenue act of June 13 by authorizing a 3 per cent popular loan notto exceed $400, 000, 000 and by levying additional imposts and taxes. Of theauthorized loan $200, 000, 000 were offered and promptly taken thesubscriptions so far exceeding the call as to cover it many times over, while, preference being given to the smaller bids, no single allotmentexceeded $5, 000. This was a most encouraging and significant result, showing the vast resources of the nation and the determination of thepeople to uphold their country's honor. 

It is not within the province of this message to narrate the history of theextraordinary war that followed the Spanish declaration of April 21, but abrief recital of its more salient features is appropriate. 

The first encounter of the war in point of date took place April 27, when adetachment of the blockading squadron made a reconnoissance in force atMatanzas, shelled the harbor forts, and demolished several new works inconstruction. 

The next engagement was destined to mark a memorable epoch in maritimewarfare. The Pacific fleet, under Commodore George Dewey, had lain for someweeks at Hongkong. Upon the colonial proclamation of neutrality beingissued and the customary twenty-four hours' notice being given, it repairedto Mirs Bay, near Hongkong, whence it proceeded to the Philippine Islandsunder telegraphed orders to capture or destroy the formidable Spanish fleetthen assembled at Manila. At daybreak on the 1st of May the American forceentered Manila Bay, and after a few hours' engagement effected the totaldestruction of the Spanish fleet, consisting of ten war ships and atransport, besides capturing the naval station and forts at Cavite, thusannihilating the Spanish naval power in the Pacific Ocean and completelycontrolling the bay of Manila, with the ability to take the city at will. Not a life was lost on our ships, the wounded only numbering seven, whilenot a vessel was materially injured. For this gallant achievement theCongress, upon my recommendation, fitly bestowed upon the actors prefermentand substantial reward. 

The effect of this remarkable victory upon the spirit of our people andupon the fortunes of the war was instant. A prestige of invincibilitythereby attached to our arms which continued throughout the struggle. Reenforcements were hurried to Manila under the command of Major-GeneralMerritt and firmly established within sight of the capital, which layhelpless before our guns. 

On the 7th day of May the Government was advised officially of the victoryat Manila, and at once inquired of the commander of our fleet what troopswould be required. The information was received on the 15th day of May, andthe first army expedition sailed May 25 and arrived off Manila June 30. Other expeditions soon followed, the total force consisting of 641 officersand 15, 058 enlisted men. 

Only reluctance to cause needless loss of life and property prevented theearly storming and capture of the city, and therewith the absolute militaryoccupancy of the whole group. The insurgents meanwhile had resumed theactive hostilities suspended by the uncompleted truce of December, 1897. Their forces invested Manila from the northern and eastern sides, but wereconstrained by Admiral Dewey and General Merrill from attempting anassault. It was fitting that whatever was to be done in the way of decisiveoperations in that quarter should be accomplished by the strong arm of theUnited States alone. Obeying the stern precept of war which enjoins theovercoming of the adversary and the extinction of his power whereverassailable as the speedy and sure means to win a peace, divided victory wasnot permissible, for no partition of the rights and responsibilitiesattending the enforcement of a just and advantageous peace could be thoughtof. 

Following the comprehensive scheme of general attack, powerful forces wereassembled at various points on our coast to invade Cuba and Puerto Rico. Meanwhile naval demonstrations were made at several exposed points. On May11 the cruiser Wilmington and torpedo boat Winslow were unsuccessful in anattempt to silence the batteries at Cardenas, a gallant ensign, WorthBagley, and four seamen falling. These grievous fatalities were, strangelyenough, among the very few which occurred during our naval operations inthis extraordinary conflict. 

Meanwhile the Spanish naval preparations had been pushed with great vigor. A powerful squadron under Admiral Cervera, which had assembled at the CapeVerde Islands before the outbreak of hostilities, had crossed the ocean, and by its erratic movements in the Caribbean Sea delayed our militaryplans while baffling the pursuit of our fleets. For a time fears were feltlest the Oregon and Marietta, then nearing home after their long voyagefrom San Francisco of over 15, 000 miles, might be surprised by AdmiralCervera's fleet, but their fortunate arrival dispelled these apprehensionsand lent much-needed reenforcement. Not until Admiral Cervera took refugein the harbor of Santiago de Cuba, about May 19, was it practicable to plana systematic naval and military attack upon the Antillean possessions ofSpain. 

Several demonstrations occurred on the coasts of Cuba and Puerto Rico inpreparation for the larger event. On May 13 the North Atlantic Squadronshelled San Juan de Puerto Rico. On May 30 Commodore Schley's squadronbombarded the forts guarding the mouth of Santiago Harbor. Neither attackhad any material result. It was evident that well-ordered land operationswere indispensable to achieve a decisive advantage. 

The next act in the war thrilled not alone the hearts of our countrymen butthe world by its exceptional heroism. On the night of June 3 LieutenantHobson, aided by seven devoted volunteers, blocked the narrow outlet fromSantiago Harbor by sinking the collier Merrimac in the channel, under afierce fire from the shore batteries, escaping with their lives as by amiracle, but falling into the hands of the Spaniards. It is a mostgratifying incident of the war that the bravery of this little band ofheroes was cordially appreciated by the Spanish admiral, who sent a flag oftruce to notify Admiral Sampson of their safety and to compliment them ontheir daring act. They were subsequently exchanged July 7. 

By June 7 the cutting of the last Cuban cable isolated the island. Thereafter the invasion was vigorously prosecuted. On June 10, under aheavy protecting fire, a landing of 600 marines from the Oregon, Marblehead, and Yankee was effected in Guantanamo Bay, where it had beendetermined to establish a naval station. 

This important and essential port was taken from the enemy, after severefighting, by the marines, who were the first organized force of the UnitedStates to land in Cuba. 

The position so won was held despite desperate attempts to dislodge ourforces. By June 16 additional forces were landed and strongly in-trenched. On June 22 the advance of the invading army under Major-General Shafterlanded at Daiquiri, about 15 miles east of Santiago. This was accomplishedunder great difficulties, but with marvelous dispatch. On June 23 themovement against Santiago was begun. On the 24th the first seriousengagement took place, in which the First and Tenth Cavalry and the FirstUnited States Volunteer Cavalry, General Young's brigade of GeneralWheeler's division, participated, losing heavily. By nightfall, however, ground within 5 miles of Santiago was won. The advantage was steadilyincreased. On July 1 a severe battle took place, our forces gaining theoutworks of Santiago; on the 2d El Caney and San Juan were taken after adesperate charge, and the investment of the city was completed. The Navycooperated by shelling the town and the coast forts. 

On the day following this brilliant achievement of our land forces, the 3dof July, occurred the decisive naval combat of the war. The Spanish fleet, attempting to leave the harbor, was met by the American squadron undercommand of Commodore Sampson. In less than three hours all the Spanishships were destroyed, the two torpedo boats being sunk and the MariaTeresa, Almirante Oquendo, Vizcaya, and Cristobal Colon driven ashore. TheSpanish admiral and over 1, 300 men were taken prisoners. While the enemy'sloss of life was deplorably large, some 600 perishing, on our side but oneman was killed, on the Brooklyn, and one man seriously wounded. Althoughour ships were repeatedly struck, not one was seriously injured. Where allso conspicuously distinguished themselves, from the commanders to thegunners and the unnamed heroes in the boiler rooms, each and allcontributing toward the achievement of this astounding victory, for whichneither ancient nor modern history affords a parallel in the completenessof the event and the marvelous disproportion of casualties, it would beinvidious to single out any for especial honor. Deserved promotion hasrewarded the more conspicuous actors. The nation's profoundest gratitude isdue to all of these brave men who by their skill and devotion in a fewshort hours crushed the sea power of Spain and wrought a triumph whosedecisiveness and far-reaching consequences can scarcely be measured. Norcan we be unmindful of the achievements of our builders, mechanics, andartisans for their skill in the construction of our war ships. 

With the catastrophe of Santiago Spain's effort upon the ocean virtuallyceased. A spasmodic effort toward the end of June to send her Mediterraneanfleet, under Admiral Camara, to relieve Manila was abandoned, theexpedition being recalled after it had passed through the Suez Canal. 

The capitulation of Santiago followed. The city was closely besieged byland, while the entrance of our ships into the harbor cut off all relief onthat side. After a truce to allow of the removal of noncombatantsprotracted negotiations continued from July 3 until July 15, when, undermenace of immediate assault, the preliminaries of surrender were agreedupon. On the 17th General Shafter occupied the city. The capitulationembraced the entire eastern end of Cuba. The number of Spanish soldierssurrendering was 22, 000, all of whom were subsequently conveyed to Spain atthe charge of the United States. The story of this successful campaign istold in the report of the Secretary of War, which will be laid before you. The individual valor of officers and soldiers was never more strikinglyshown than in the several engagements leading to the surrender of Santiago, while the prompt movements and successive victories won instant anduniversal applause. To those who gained this complete triumph, whichestablished the ascendency of the United States upon land as the fight offSantiago had fixed our supremacy on the seas, the earnest and lastinggratitude of the nation is unsparingly due. Nor should we alone rememberthe gallantry of the living; the dead claim our tears, and our losses bybattle and disease must cloud any exultation at the result and teach us toweigh the awful cost of war, however rightful the cause or signal thevictory. 

With the fall of Santiago the occupation of Puerto Rico became the nextstrategic necessity. General Miles had previously been assigned to organizean expedition for that purpose. Fortunately he was already at Santiago, where he had arrived on the 11th of July with reenforcements for GeneralShafter's army. 

With these troops, consisting of 3, 415 infantry and artillery, twocompanies of engineers, and one company of the Signal Corps, General Milesleft Guantanamo on July 21, having nine transports convoyed by the fleetunder Captain Higginson with the Massachusetts (flagship), Dixie, Gloucester, Columbia, and Yale, the two latter carrying troops. Theexpedition landed at Guanica July 25, which port was entered with littleopposition. Here the fleet was joined by the Annapolis and the Wasp, whilethe Puritan and Amphitrite went to San Juan and joined the New Orleans, which was engaged in blockading that port. The Major-General Commanding wassubsequently reenforced by General Schwan's brigade of the Third ArmyCorps, by General Wilson with a part of his division, and also by GeneralBrooke with a part of his corps, numbering in all 16, 973 officers and men. 

On July 27 he entered Ponce, one of the most important ports in the island, from which he thereafter directed operations for the capture of theisland. 

With the exception of encounters with the enemy at Guayama, Hormigueros, Coamo, and Yauco and an attack on a force landed at Cape San Juan, therewas no serious resistance. The campaign was prosecuted with great vigor, and by the 12th of August much of the island was in our possession and theacquisition of the remainder was only a matter of a short time. At most ofthe points in the island our troops were enthusiastically welcomed. Protestations of loyalty to the flag and gratitude for delivery fromSpanish rule met our commanders at every stage. As a potent influencetoward peace the outcome of the Puerto Rican expedition was of greatconsequence, and generous commendation is due to those who participated init. 

The last scene of the war was enacted at Manila, its starting place. OnAugust 15, after a brief assault upon the works by the land forces, inwhich the squadron assisted, the capital surrendered unconditionally. Thecasualties were comparatively few. By this the conquest of the PhilippineIslands, virtually accomplished when the Spanish capacity for resistancewas destroyed by Admiral Dewey's victory of the 1st of May, was formallysealed. To General Merrill, his officers and men, for their uncomplainingand devoted service and for their gallantry in action, the nation issincerely grateful. Their long voyage was made with singular success, andthe soldierly conduct of the men, most of whom were without previousexperience in the military service, deserves unmeasured praise. 

The total casualties in killed and wounded in the Army during the war withSpain were: Officers killed, 23; enlisted men killed, 257; total, 280;officers wounded, 113; enlisted men wounded, 1, 464; total, 1, 577. Of theNavy: Killed, 17; wounded, 67; died as result of wounds, 1; invalided fromservice, 6; total, 91. 

It will be observed that while our Navy was engaged in two great battlesand in numerous perilous undertakings in blockade and bombardment, and morethan 50, 000 of our troops were transported to distant lands and wereengaged in assault and siege and battle and many skirmishes in unfamiliarterritory, we lost in both arms of the service a total of 1, 668 killed andwounded; and in the entire campaign by land and sea we did not lose a gunor a flag or a transport or a ship, and, with the exception of the crew ofthe Merrimac, not a soldier or sailor was taken prisoner. 

On August 7, forty-six days from the date of the landing of GeneralShafter's army in Cuba and twenty-one days from the surrender of Santiago, the United States troops commenced embarkation for home, and our entireforce was returned to the United States as early as August 24. They wereabsent from the United States only two months. 

It is fitting that I should bear testimony to the patriotism and devotionof that large portion of our Army which, although eager to be ordered tothe post of greatest exposure, fortunately was not required outside of theUnited States. They did their whole duty, and, like their comrades at thefront, have earned the gratitude of the nation. In like manner, theofficers and men of the Army and of the Navy who remained in theirdepartments and stations faithfully performing most important dutiesconnected with the war, and whose requests for assignment in the field andat sea I was compelled to refuse because their services were indispensablehere, are entitled to the highest commendation. It is my regret that thereseems to be no provision for their suitable recognition. 

In this connection it is a pleasure for me to mention in terms of cordialappreciation the timely and useful work of the American National Red Cross, both in relief measures preparatory to the campaigns, in sanitaryassistance at several of the camps of assemblage, and later, under the ableand experienced leadership of the president of the society, Miss ClaraBarton, on the fields of battle and in the hospitals at the front in Cuba. Working in conjunction with the governmental authorities and under theirsanction and approval, and with the enthusiastic cooperation of manypatriotic women and societies in the various States, the Red Cross hasfully maintained its already high reputation for intense earnestness andability to exercise the noble purposes of its international organization, thus justifying the confidence and support which it has received at thehands of the American people. To the members and officers of this societyand all who aided them in their philanthropic work the sincere and lastinggratitude of the soldiers and the public is due and is freely accorded. 

In tracing these events we are constantly reminded of our obligations tothe Divine Master for His watchful care over us and His safe guidance, forwhich the nation makes reverent acknowledgment and offers humble prayer forthe continuance of His favor. 

The annihilation of Admiral Cervera's fleet, followed by the capitulationof Santiago, having brought to the Spanish Government a realizing sense ofthe hopelessness of continuing a struggle now become wholly unequal, itmade overtures of peace through the French ambassador, who, with the assentof his Government, had acted as the friendly representative of Spanishinterests during the war. On the 26th of July M. Cambon presented acommunication signed by the Duke of Almodovar, the Spanish minister ofstate, inviting the United States to state the terms upon which it would bewilling to make peace. On the 30th of July, by a communication addressed tothe Duke of Almodovar and handed to M. Cambon, the terms of this Governmentwere announced substantially as in the protocol afterwards signed. On the10th of August the Spanish reply, dated August 7, was handed by M. Cambonto the Secretary of State. It accepted unconditionally the terms imposed asto Cuba, Puerto Rico, and an island of the Ladrones group, but appeared toseek to introduce inadmissible reservations in regard to our demand as tothe Philippine Islands. Conceiving that discussion on this point couldneither be practical nor profitable, I directed that in order to avoidmisunderstanding the matter should be forthwith closed by proposing theembodiment in a formal protocol of the terms upon which the negotiationsfor peace were to be undertaken. The vague and inexplicit suggestions ofthe Spanish note could not be accepted, the only reply being to present asa virtual ultimatum a draft of protocol embodying the precise termstendered to Spain in our note of July 30, with added stipulations of detailas to the appointment of commissioners to arrange for the evacuation of theSpanish Antilles. On August 12 M. Cambon announced his receipt of fullpowers to sign the protocol so submitted. Accordingly, on the afternoon ofAugust 12, M. Cambon, as the plenipotentiary of Spain, and the Secretary ofState, as the plenipotentiary of the United States, signed a protocolproviding--

ARTICLE I. Spain will relinquish all claim of sovereignty over and titleto Cuba. 

ART. II. Spain will cede to the United States the island of Puerto Rico andother islands now under Spanish sovereignty in the West Indies, and also anisland in the Ladrones to be selected by the United States. 

ART. III. The United States will occupy and hold the city, bay, and harborof Manila pending the conclusion of a treaty of peace which shall determinethe control, disposition, and government of the Philippines. The fourtharticle provided for the appointment of joint commissions on the part ofthe United States and Spain, to meet in Havana and San Juan, respectively, for the purpose of arranging and carrying out the details of the stipulatedevacuation of Cuba, Puerto Rico, and other Spanish islands in the WestIndies. 

The fifth article provided for the appointment of not more than fivecommissioners on each side, to meet at Paris not later than October 1 andto proceed to the negotiation and conclusion of a treaty of peace, subjectto ratification according to the respective constitutional forms of the twocountries. 

The sixth and last article provided that upon the signature of the protocolhostilities between the two countries should be suspended and that noticeto that effect should be given as soon as possible by each Government tothe commanders of its military and naval forces. 

Immediately upon the conclusion of the protocol I issued a proclamation, ofAugust 12, suspending hostilities on the part of the United States. Thenecessary orders to that end were at once given by telegraph. The blockadeof the ports of Cuba and San Juan de Puerto Rico was in like manner raised. On the 18th of August the muster out of 100, 000 volunteers, or as near thatnumber as was found to be practicable, was ordered. 

On the 1st of December 101, 165 officers and men had been mustered out anddischarged from the service, and 9, 002 more will be mustered out by the10th of this month; also a corresponding number of general and generalstaff officers have been honorably discharged the service. 

The military commissions to superintend the evacuation of Cuba, PuertoRico, and the adjacent islands were forthwith appointed--for Cuba, Major-General James F. Wade, Rear-Admiral William T. Sampson, Major-GeneralMatthew C. Butler; for Puerto Rico, Major--General John R. Brooke, Rear-Admiral Winfield S. Schley, Brigadier-General William W. Gordon--whosoon afterwards met the Spanish commissioners at Havana and San Juan, respectively. The Puerto Rican Joint Commission speedily accomplished itstask, and by the 18th of October the evacuation of the island wascompleted. The United States flag was raised over the island at noon onthat day. The administration of its affairs has been provisionallyintrusted to a military governor until the Congress shall otherwiseprovide. The Cuban Joint Commission has not yet terminated its labors. Owing to the difficulties in the way of removing the large numbers ofSpanish troops still in Cuba, the evacuation can not be completed beforethe 1st of January next. 

Pursuant to the fifth article of the protocol, I appointed William R. Day, lately Secretary of State; Cushman K. Davis, William P. Frye, and GeorgeGray, Senators of the United States, and Whitelaw Reid to be the peacecommissioners on the part of the United States. Proceeding in due season toParis, they there met on the 1st of October five commissioners similarlyappointed on the part of Spain. Their negotiations have made hopefulprogress, so that I trust soon to be able to lay a definitive treaty ofpeace before the Senate, with a review of the steps leading to itssignature. 

I do not discuss at this time the government or the future of the newpossessions which will come to us as the result of the war with Spain. Suchdiscussion will be appropriate after the treaty of peace shall be ratified. In the meantime and until the Congress has legislated otherwise it will bemy duty to continue the military governments which have existed since ouroccupation and give to the people security in life and property andencouragement under a just and beneficent rule. 

As soon as we are in possession of Cuba and have pacified the island itwill be necessary to give aid and direction to its people to form agovernment for themselves. This should be undertaken at the earliest momentconsistent with safety and assured success. It is important that ourrelations with this people shall be of the most friendly character and ourcommercial relations close and reciprocal. It should be our duty to assistin every proper way to build up the waste places of the island, encouragethe industry of the people, and assist them to form a government whichshall be free and independent, thus realizing the best aspirations of theCuban people. 

Spanish rule must be replaced by a just, benevolent, and humane government, created by the people of Cuba, capable of performing all internationalobligations, and which shall encourage thrift, industry, and prosperity andpromote peace and good will among all of the inhabitants, whatever may havebeen their relations in the past. Neither revenge nor passion should have aplace in the new government. Until there is complete tranquillity in theisland and a stable government inaugurated military occupation will becontinued. 

With the one exception of the rupture with Spain, the intercourse of theUnited States with the great family of nations has been marked withcordiality, and the close of the eventful year finds most of the issuesthat necessarily arise in the complex relations of sovereign statesadjusted or presenting no serious obstacle to a just and honorable solutionby amicable agreement. 

A long unsettled dispute as to the extended boundary between the ArgentineRepublic and Chile, stretching along the Andean crests from the southernborder of the Atacama Desert to Magellan Straits, nearly a third of thelength of the South American continent, assumed an acute stage in the earlypart of the year, and afforded to this Government occasion to express thehope that the resort to arbitration, already contemplated by existingconventions between the parties, might prevail despite the gravedifficulties arising in its application. I am happy to say thatarrangements to this end have been perfected, the questions of fact uponwhich the respective commissioners were unable to agree being in course ofreference to Her Britannic Majesty for determination. A residual differencetouching the northern boundary line across the Atacama Desert, for whichexisting treaties provided no adequate adjustment, bids fair to be settledin like manner by a joint commission, upon which the United States ministerat Buenos Ayres has been invited to serve as umpire in the last resort. 

I have found occasion to approach the Argentine Government with a view toremoving differences of rate charges imposed upon the cables of an Americancorporation in the transmission between Buenos Ayres and the cities ofUruguay and Brazil of through messages passing from and to the UnitedStates. Although the matter is complicated by exclusive concessions byUruguay and Brazil to foreign companies, there is strong hope that a goodunderstanding will be reached and that the important channels of commercialcommunication between the United States and the Atlantic cities of SouthAmerica may be freed from an almost prohibitory discrimination. 

In this relation I may be permitted to express my sense of the fitness ofan international agreement whereby the interchange of messages overconnecting cables may be regulated on a fair basis of uniformity. The worldhas seen the postal system developed from a congeries of independent andexclusive services into a well-ordered union, of which all countries enjoythe manifold benefits. It would be strange were the nations not in timebrought to realize that modern civilization, which owes so much of itsprogress to the annihilation of space by the electric force, demands thatthis all-important means of communication be a heritage of all peoples, tobe administered and regulated in their common behoof. A step in thisdirection was taken when the international convention of 1884 for theprotection of submarine cables was signed, and the day is, I trust, not fardistant when this medium for the transmission of thought from land to landmay be brought within the domain of international concert as completely asis the material carriage of commerce and correspondence upon the face ofthe waters that divide them. 

The claim of Thomas Jefferson Page against Argentina, which has beenpending many years, has been adjusted. The sum awarded by the Congress ofArgentina was $4, 242. 35. 

The sympathy of the American people has justly been offered to the rulerand the people of Austria-Hungary by reason of the affliction that haslately befallen them in the assassination of the Empress-Queen of thathistoric realm. 

On the 10th of September, 1897, a conflict took place at Lattimer, Pa. , between a body of striking miners and the sheriff of Luzerne County and hisdeputies, in which 22 miners were killed and 44 wounded, of whom 10 of thekilled and 12 of the wounded were Austrian and Hungarian subjects. Thisdeplorable event naturally aroused the solicitude of the Austro-HungarianGovernment, which, on the assumption that the killing and wounding involvedthe unjustifiable misuse of authority, claimed reparation for thesufferers. Apart from the searching investigation and peremptory action ofthe authorities of Pennsylvania, the Federal Executive took appropriatesteps to learn the merits of the case, in order to be in a position to meetthe urgent complaint of a friendly power. The sheriff and his deputies, having been indicted for murder, were tried, and acquitted, afterprotracted proceedings and the hearing of hundreds of witnesses, on theground that the killing was in the line of their official duty to upholdlaw and preserve public order in the State. A representative of theDepartment of Justice attended the trial and reported its course fully. With all the facts in its possession, this Government expects to reach aharmonious understanding on the subject with that of Austria-Hungary, notwithstanding the renewed claim of the latter, after learning the resultof the trial, for indemnity for its injured subjects. 

Despite the brief time allotted for preparation, the exhibits of thiscountry at the Universal Exposition at Brussels in 1897 enjoyed thesingular distinction of a larger proportion of awards, having regard to thenumber and classes of articles entered than those of other countries. Theworth of such a result in making known our national capacity to supply theworld's markets is obvious. 

Exhibitions of this international character are becoming more frequent asthe exchanges of commercial countries grow more intimate and varied. Hardlya year passes that this Government is not invited to national participationat some important foreign center, but often on too short notice to permitof recourse to Congress for the power and means to do so. My predecessorshave suggested the advisability of providing by a general enactment and astanding appropriation for accepting such invitations and forrepresentation of this country by a commission. This plan has my cordialapproval. 

I trust that the Belgian restrictions on the importation of cattle from theUnited States, originally adopted as a sanitary precaution, will at anearly day be relaxed as to their present features of hardship anddiscrimination, so as to admit live cattle under due regulation of theirslaughter after landing. I am hopeful, too, of favorable change in theBelgian treatment of our preserved and salted meats. The growth of directtrade between the two countries, not alone for Belgian consumption andBelgian products, but by way of transit from and to other continentalstates, has been both encouraging and beneficial. No effort will be sparedto enlarge its advantages by seeking the removal of needless impedimentsand by arrangements for increased commercial exchanges. 

The year's events in Central America deserve more than passing mention. 

A menacing rupture between Costa Rica and Nicaragua was happily composed bythe signature of a convention between the parties, with the concurrence ofthe Guatemalan representative as a mediator, the act being negotiated andsigned on board the United States steamer Alert, then lying in CentralAmerican waters. It is believed that the good offices of our envoy and ofthe commander of that vessel contributed toward this gratifying outcome. 

In my last annual message the situation was presented with respect to thediplomatic representation of this Government in Central America created bythe association of Nicaragua, Honduras, and Salvador under the title of theGreater Republic of Central America, and the delegation of theirinternational functions to the Diet thereof. While the representativecharacter of the Diet was recognized by my predecessor and has beenconfirmed during my Administration by receiving its accredited envoy andgranting exequaturs to consuls commissioned under its authority, thatrecognition was qualified by the distinct understanding that theresponsibility of each of the component sovereign Republics toward theUnited States remained wholly unaffected. 

This proviso was needful inasmuch as the compact of the three Republics wasat the outset an association whereby certain representative functions weredelegated to a tripartite commission rather than a federation possessingcentralized powers of government and administration. In this view of theirrelation and of the relation of the United States to the several Republics, a change in the representation of this country in Central America wasneither recommended by the Executive nor initiated by Congress, thusleaving one of our envoys accredited, as heretofore, separately to twoStates of the Greater Republic, Nicaragua and Salvador, and to a thirdState, Costa Rica, which was not a party to the compact, while our otherenvoy was similarly accredited to a union State, Honduras, and a nonunionState, Guatemala. The result has been that the one has presentedcredentials only to the President of Costa Rica, the other having beenreceived only by the Government of Guatemala. 

Subsequently the three associated Republics entered into negotiations fortaking the steps forecast in the original compact. A convention of theirdelegates framed for them a federal constitution under the name of theUnited States of Central America, and provided for a central federalgovernment and legislature. Upon ratification by the constituent States, the 1st of November last was fixed for the new system to go into operation. Within a few weeks thereafter the plan was severely tested by revolutionarymovements arising, with a consequent demand for unity of action on the partof the military power of the federal States to suppress them. Under thisstrain the new union seems to have been weakened through the withdrawal ofits more important members. This Government was not officially advised ofthe installation of the federation and has maintained an attitude offriendly expectancy, while in no wise relinquishing the position held fromthe outset that the responsibilities of the several States toward usremained unaltered by their tentative relations among themselves. 

The Nicaragua Canal Commission, under the chairmanship of Rear-Admiral JohnG. Walker, appointed July 24, 1897, under the authority of a provision inthe sundry civil act of June 4 of that year, has nearly completed itslabors, and the results of its exhaustive inquiry into the proper route, the feasibility, and the cost of construction of an interoceanic canal by aNicaraguan route will be laid before you. In the performance of its taskthe commission received all possible courtesy and assistance from theGovernments of Nicaragua and Costa Rica, which thus testified theirappreciation of the importance of giving a speedy and practical outcome tothe great project that has for so many years engrossed the attention of therespective countries. 

As the scope of the recent inquiry embraced the whole subject, with the aimof making plans and surveys for a canal by the most convenient route, itnecessarily included a review of the results of previous surveys and plans, and in particular those adopted by the Maritime Canal Company under itsexisting concessions from Nicaragua and Costa Rica, so that to this extentthose grants necessarily hold as essential a part in the deliberations andconclusions of the Canal Commission as they have held and must needs holdin the discussion of the matter by the Congress. Under these circumstancesand in view of overtures made to the Governments of Nicaragua and CostaRica by other parties for a new canal concession predicated on the assumedapproaching lapse of the contracts of the Maritime Canal Company with thoseStates, I have not hesitated to express my conviction that considerationsof expediency and international policy as between the several governmentsinterested in the construction and control of an interoceanic canal by thisroute require the maintenance of the status quo until the Canal Commissionshall have reported and the United States Congress shall have had theopportunity to pass finally upon the whole matter during the presentsession, without prejudice by reason of any change in the existingconditions. 

Nevertheless, it appears that the Government of Nicaragua, as one of itslast sovereign acts before merging its powers in those of the newly formedUnited States of Central America, has granted an optional concession toanother association, to become effective on the expiration of the presentgrant. It does not appear what surveys have been made or what route isproposed under this contingent grant, so that an examination of thefeasibility of its plans is necessarily not embraced in the report of theCanal Commission. All these circumstances suggest the urgency of somedefinite action by the Congress at this session if the labors of the pastare to be utilized and the linking of the Atlantic and Pacific oceans by apractical waterway is to be realized. That the construction of such amaritime highway is now more than ever indispensable to that intimate andready intercommunication between our eastern and western seaboards demandedby the annexation of the Hawaiian Islands and the prospective expansion ofour influence and commerce in the Pacific, and that our national policy nowmore imperatively than ever calls for its control by this Government, arepropositions which I doubt not the Congress will duly appreciate and wiselyact upon. 

A convention providing for the revival of the late United States andChilean Claims Commission and the consideration of claims which were dulypresented to the late commission, but not considered because of theexpiration of the time limited for the duration of the commission, wassigned May 24, 1897, and has remained unacted upon by the Senate. The termtherein fixed for effecting the exchange of ratifications having elapsed, the convention falls unless the time be extended by amendment, which I amendeavoring to bring about, with the friendly concurrence of the ChileanGovernment. 

The United States has not been an indifferent spectator of theextraordinary events transpiring in the Chinese Empire, whereby portions ofits maritime provinces are passing under the control of various Europeanpowers; but the prospect that the vast commerce which the energy of ourcitizens and the necessity of our staple productions for Chinese uses hasbuilt up in those regions may not be prejudiced through any exclusivetreatment by the new occupants has obviated the need of our countrybecoming an actor in the scene. Our position among nations, having a largePacific coast and a constantly expanding direct trade with the fartherOrient, gives us the equitable claim to consideration and friendlytreatment in this regard, and it will be my aim to subserve our largeinterests in that quarter by all means appropriate to the constant policyof our Government. The territories of Kiao-chow, of Wei-hai-wei, and ofPort Arthur and Talienwan, leased to Germany, Great Britain, and Russia, respectively, for terms of years, will, it is announced, be open tointernational commerce during such alien occupation; and if nodiscriminating treatment of American citizens and their trade be found toexist or be hereafter developed, the desire of this Government would appearto be realized. 

In this relation, as showing the volume and value of our exchanges withChina and the peculiarly favorable conditions which exist for theirexpansion in the normal course of trade, I refer to the communicationaddressed to the Speaker of the House of Representatives by the Secretaryof the Treasury on the 14th of last June, with its accompanying letter ofthe Secretary of State, recommending an appropriation for a commission tostudy the commercial and industrial conditions in the Chinese Empire andreport as to the opportunities for and obstacles to the enlargement ofmarkets in China for the raw products and manufactures of the UnitedStates. Action was not taken thereon during the late session. I cordiallyurge that the recommendation receive at your hands the consideration whichits importance and timeliness merit. 

Meanwhile there may be just ground for disquietude in view of the unrestand revival of the old sentiment of opposition and prejudice to alienpeople which pervades certain of the Chinese provinces. As in the case ofthe attacks upon our citizens in Szechuen and at Kutien in 1895, the UnitedStates minister has been instructed to secure the fullest measure ofprotection, both local and imperial, for any menaced American interests, and to demand, in case of lawless injury to person or property, instantreparation appropriate to the case. War ships have been stationed atTientsin for more ready observation of the disorders which have invadedeven the Chinese capital, so as to be in a position to act should needarise, while a guard of marines has been sent to Peking to afford theminister the same measure of authoritative protection as therepresentatives of other nations have been constrained to employ. 

Following close upon the rendition of the award of my predecessor asarbitrator of the claim of the Italian subject Cerruti against the Republicof Colombia, differences arose between the parties to the arbitration inregard to the scope and extension of the award, of which certain articleswere contested by Colombia, while Italy claimed their literal fulfillment. The award having been made by the President of the United States, as an actof friendly consideration and with the sole view to an impartialcomposition of the matter in dispute, I could not but feel deep concern atsuch a miscarriage, and while unable to accept the Colombian theory that I, in my official capacity, possessed continuing functions as arbitrator, withpower to interpret or revise the terms of the award, my best efforts werelent to bring the parties to a harmonious agreement as to the execution ofits provisions. 

A naval demonstration by Italy resulted in an engagement to pay theliabilities claimed upon their ascertainment; but this apparent dispositionof the controversy was followed by a rupture of diplomatic intercoursebetween Colombia and Italy, which still continues, although, fortunately, without acute symptoms having supervened. Notwithstanding this, efforts arereported to be continuing for the ascertainment of Colombia's contingentliability on account of Cerruti's debts under the fifth article of theaward. 

A claim of an American citizen against the Dominican Republic for a publicbridge over the Ozama River, which has been in diplomatic controversy forseveral years, has been settled by expert arbitration and an award in favorof the claimant amounting to about $90, 000. It, however, remains unpaid, despite urgent demands for its settlement according to the terms of thecompact. 

There is now every prospect that the participation of the United States inthe Universal Exposition to be held in Paris in 1900 will be on a scalecommensurate with the advanced position held by our products and industriesin the world's chief marts. 

The preliminary report of Mr. Moses P. Handy, who, under the act approvedJuly 19, 1897, was appointed special commissioner with a view to securingall attainable information necessary to a full and complete understandingby Congress in regard to the participation of this Government in the ParisExposition, was laid before you by my message of December 6, 1897, andshowed the large opportunities opened to make known our national progressin arts, science, and manufactures, as well as the urgent need of immediateand adequate provision to enable due advantage thereof to be taken. Mr. Handy's death soon afterwards rendered it necessary for another to take upand complete his unfinished work, and on January 11 last Mr. Thomas W. Cridler, Third Assistant Secretary of State, was designated to fulfill thattask. His report was laid before you by my message of June 14, 1898, withthe gratifying result of awakening renewed interest in the projecteddisplay. By a provision in the sundry civil appropriation act of July 1, 1898, a sum not to exceed $650, 000 was allotted for the organization of acommission to care for the proper preparation and installation of Americanexhibits and for the display of suitable exhibits by the several ExecutiveDepartments, particularly by the Department of Agriculture, the FishCommission, and the Smithsonian Institution, in representation of theGovernment of the United States. 

Pursuant to that enactment I appointed Mr. Ferdinand W. Peck, of Chicago, commissioner-general, with an assistant commissioner-general and asecretary. Mr. Peck at once proceeded to Paris, where his success inenlarging the scope and variety of the United States exhibit has been mostgratifying. Notwithstanding the comparatively limited area of theexposition site--less than one-half that of the World's Fair atChicago--the space assigned to the United States has been increased fromthe absolute allotment of 157, 403 square feet reported by Mr. Handy to some202, 000 square feet, with corresponding augmentation of the field for atruly characteristic representation of the various important branches ofour country's development. Mr. Peck's report will be laid before you. In myjudgment its recommendations will call for your early consideration, especially as regards an increase of the appropriation to at least onemillion dollars in all, so that not only may the assigned space be fullytaken up by the best possible exhibits in every class, but the preparationand installation be on so perfect a scale as to rank among the first inthat unparalleled competition of artistic and inventive production, andthus counterbalance the disadvantage with which we start as compared withother countries whose appropriations are on a more generous scale and whosepreparations are in a state of much greater forwardness than our own. 

Where our artisans have the admitted capacity to excel, where our inventivegenius has initiated many of the grandest discoveries of these later daysof the century, and where the native resources of our land are as limitlessas they are valuable to supply the world's needs, it is our province, as itshould be our earnest care, to lead in the march of human progress, and notrest content with any secondary place. Moreover, if this be due toourselves, it is no less due to the great French nation whose guests webecome, and which has in so many ways testified its wish and hope that ourparticipation shall befit the place the two peoples have won in the fieldof universal development. 

The commercial arrangement made with France on the 28th of May, 1898, underthe provisions of section 3 of the tariff act of 1897, went into effect onthe 1st day of June following. It has relieved a portion of our exporttrade from serious embarrassment. Further negotiations are now pendingunder section 4 of the same act with a view to the increase of tradebetween the two countries to their mutual advantage. Negotiations withother governments, in part interrupted by the war with Spain, are inprogress under both sections of the tariff act. I hope to be able toannounce some of the results of these negotiations during the presentsession of Congress. 

Negotiations to the same end with Germany have been set on foot. Meanwhileno effort has been relaxed to convince the Imperial Government of thethoroughness of our inspection of pork products for exportation, and it istrusted that the efficient administration of this measure by the Departmentof Agriculture will be recognized as a guaranty of the healthfulness of thefood staples we send abroad to countries where their use is large andnecessary. 

I transmitted to the Senate on the 10th of February last informationtouching the prohibition against the importation of fresh fruits from thiscountry, which had then recently been decreed by Germany on the ground ofdanger of disseminating the San Jose scale insect. This precautionarymeasure was justified by Germany on the score of the drastic steps taken inseveral States of the Union against the spread of the pest, the elaboratereports of the Department of Agriculture being put in evidence to show thedanger to German fruit-growing interests should the scale obtain a lodgmentin that country. Temporary relief was afforded in the case of largeconsignments of fruit then on the way by inspection and admission whenfound noninfected. Later the prohibition was extended to dried fruits ofevery kind, but was relaxed so as to apply only to unpeeled fruit and fruitwaste. As was to be expected, the alarm reached to other countries, andSwitzerland has adopted a similar inhibition. Efforts are in progress toinduce the German and Swiss Governments to relax the prohibition in favorof dried fruits shown to have been cured under circumstances rendering theexistence of animal life impossible. 

Our relations with Great Britain have continued on the most friendlyfooting. Assenting to our request, the protection of Americans and theirinterests in Spanish jurisdiction was assumed by the diplomatic andconsular representatives of Great Britain, who fulfilled their delicate andarduous trust with tact and zeal, eliciting high commendation. I may beallowed to make fitting allusion to the instance of Mr. Ramsden, HerMajesty's consul at Santiago de Cuba, whose untimely death afterdistinguished service and untiring effort during the siege of that city wassincerely lamented. 

In the early part of April last, pursuant to a request made at the instanceof the Secretary of State by the British ambassador at this capital, theCanadian government granted facilities for the passage of four UnitedStates revenue cutters from the Great Lakes to the Atlantic coast by way ofthe Canadian canals and the St. Lawrence River. The vessels had reachedLake Ontario and were there awaiting the opening of navigation when war wasdeclared between the United States and Spain. Her Majesty's Governmentthereupon, by a communication of the latter part of April, stated that thepermission granted before the outbreak of hostilities would not bewithdrawn provided the United States Government gave assurance that thevessels in question would proceed direct to a United States port withoutengaging in any hostile operation. This Government promptly agreed to thestipulated condition, it being understood that the vessels would not beprohibited from resisting any hostile attack. 

It will give me especial satisfaction if I shall be authorized tocommunicate to you a favorable conclusion of the pending negotiations withGreat Britain in respect to the Dominion of Canada. It is the earnest wishof this Government to remove all sources of discord and irritation in ourrelations with the neighboring Dominion. The trade between the twocountries is constantly increasing, and it is important to both countriesthat all reasonable facilities should be granted for its development. 

The Government of Greece strongly urges the onerousness of the duty hereimposed upon the currants of that country, amounting to 100 per cent ormore of their market value. This fruit is stated to be exclusively a Greekproduct, not coming into competition with any domestic product. Thequestion of reciprocal commercial relations with Greece, including therestoration of currants to the free list, is under consideration. 

The long-standing claim of Bernard Campbell for damages for injuriessustained from a violent assault committed against him by militaryauthorities in the island of Haiti has been settled by the agreement ofthat Republic to pay him $10, 000 in American gold. Of this sum $5, 000 hasalready been paid. It is hoped that other pending claims of Americancitizens against that Republic may be amicably adjusted. 

Pending the consideration by the Senate of the treaty signed June 1897, bythe plenipotentiaries of the United States and of the Republic of Hawaii, providing for the annexation of the islands, a joint resolution toaccomplish the same purpose by accepting the offered cession andincorporating the ceded territory into the Union was adopted by theCongress and approved July 7, 1898. I thereupon directed the United Statessteamship Philadelphia to convey Rear-Admiral Miller to Honolulu, andintrusted to his hands this important legislative act, to be delivered tothe President of the Republic of Hawaii, with whom the Admiral and theUnited States minister were authorized to make appropriate arrangements fortransferring the sovereignty of the islands to the United States. This wassimply but impressively accomplished on the 12th of August last by thedelivery of a certified copy of the resolution to President Dole, whothereupon yielded up to the representative of the Government of the UnitedStates the sovereignty and public property of the Hawaiian Islands. 

Pursuant to the terms of the joint resolution and in exercise of theauthority thereby conferred upon me, I directed that the civil, judicial, and military powers theretofore exercised by the officers of the Governmentof the Republic of Hawaii should continue to be exercised by those officersuntil Congress shall provide a government for the incorporated territory, subject to my power to remove such officers and to fill vacancies. ThePresident, officers, and troops of the Republic thereupon took the oath ofallegiance to the United States, thus providing for the uninterruptedcontinuance of all the administrative and municipal functions of theannexed territory until Congress shall otherwise enact. 

Following the further provision of the joint resolution, I appointed theHons. Shelby M. Cullom, of Illinois, John T. Morgan, of Alabama, Robert R. Hitt, of Illinois, Sanford B. Dole, of Hawaii, and Walter F. Frear, ofHawaii, as commissioners to confer and recommend to Congress suchlegislation concerning the Hawaiian Islands as they should deem necessaryor proper. The commissioners having fulfilled the mission confided to them, their report will be laid before you at an early day. It is believed thattheir recommendations will have the earnest consideration due to themagnitude of the responsibility resting upon you to give such shape to therelationship of those mid-Pacific lands to our home Union as will benefitboth in the highest degree, realizing the aspirations of the community thathas cast its lot with us and elected to share our political heritage, whileat the same time justifying the foresight of those who for three-quartersof a century have looked to the assimilation of Hawaii as a natural andinevitable consummation, in harmony with our needs and in fulfillment ofour cherished traditions. 

The questions heretofore pending between Hawaii and Japan growing out ofthe alleged mistreatment of Japanese treaty immigrants were, I am pleasedto say, adjusted before the act of transfer by the payment of a reasonableindemnity to the Government of Japan. 

Under the provisions of the joint resolution, the existing customsrelations of the Hawaiian Islands with the United States and with othercountries remain unchanged until legislation shall otherwise provide. Theconsuls of Hawaii here and in foreign countries continue to fulfill theircommercial agencies, while the United States consulate at Honolulu ismaintained for all appropriate services pertaining to trade and therevenue. It would be desirable that all foreign consuls in the HawaiianIslands should receive new exequaturs from this Government. 

The attention of Congress is called to the fact that, our consular officeshaving ceased to exist in Hawaii and being about to cease in othercountries coming under the sovereignty of the United States, the provisionsfor the relief and transportation of destitute American seamen in thesecountries under our consular regulations will in consequence terminate. Itis proper, therefore, that new legislation should be enacted upon thissubject in order to meet the changed conditions. 

The interpretation of certain provisions of the extradition convention ofDecember 11, 1861, has been at various times the occasion of controversywith the Government of Mexico. An acute difference arose in the case of theMexican demand for the delivery of Jesus Guerra, who, having led amarauding expedition near the border with the proclaimed purpose ofinitiating an insurrection against President Diaz, escaped into Texas. Extradition was refused on the ground that the alleged offense waspolitical in its character, and therefore came within the treaty proviso ofnonsurrender. The Mexican contention was that the exception only related topurely political offenses, and that as Guerra's acts were admixed with thecommon crime of murder, arson, kidnaping, and robbery, the option ofnondelivery became void, a position which this Government was unable toadmit in view of the received international doctrine and practice in thematter. The Mexican Government, in view of this, gave notice January 24, 1898, of the termination of the convention, to take effect twelve monthsfrom that date, at the same time inviting the conclusion of a newconvention, toward which negotiations are on foot. 

In this relation I may refer to the necessity of some amendment of ourexisting extradition statute. It is a common stipulation of such treatiesthat neither party shall be bound to give up its own citizens, with theadded proviso in one of our treaties, that with Japan, that it maysurrender if it see fit. It is held in this country by an almost uniformcourse of decisions that where a treaty negatives the obligation tosurrender the President is not invested with legal authority to act. Theconferment of such authority would be in the line of that sound moralitywhich shrinks from affording secure asylum to the author of a heinouscrime. Again, statutory provision might well be made for what is styledextradition by way of transit, whereby a fugitive surrendered by oneforeign government to another may be conveyed across the territory of theUnited States to the jurisdiction of the demanding state. A recommendationin this behalf made in the President's message of 1886 was not acted upon. The matter is presented for your consideration. 

The problem of the Mexican free zone has been often discussed with regardto its inconvenience as a provocative of smuggling into the United Statesalong an extensive and thinly guarded land border. The effort made by thejoint resolution of March 1, 1895, to remedy the abuse charged bysuspending the privilege of free transportation in bond across theterritory of the United States to Mexico failed of good result, as isstated in Report No. 702 of the House of Representatives, submitted in thelast session, March 11, 1898. As the question is one to be conveniently metby wise concurrent legislation of the two countries looking to theprotection of the revenues by harmonious measures operating equally oneither side of the boundary, rather than by conventional arrangements, Isuggest that Congress consider the advisability of authorizing and invitinga conference of representatives of the Treasury Departments of the UnitedStates and Mexico to consider the subject in all its complex bearings, andmake report with pertinent recommendations to the respective Governmentsfor the information and consideration of their Congresses. 

The Mexican Water Boundary Commission has adjusted all matters submitted toit to the satisfaction of both Governments save in three importantcases--that of the "Chamizal" at El Paso, Tex. , where the two commissionersfailed to agree, and wherein, for this case only, this Government hasproposed to Mexico the addition of a third member; the proposed eliminationof what are known as "Bancos, " small isolated islands formed by the cuttingoff of bends in the Rio Grande, from the operation of the treaties of 1884and 1889, recommended by the commissioners and approved by this Government, but still under consideration by Mexico; and the subject of the "Equitabledistribution of the waters of the Rio Grande, " for which the commissionersrecommended an international dam and reservoir, approved by Mexico, butstill under consideration by this Government. Pending these questions it isnecessary to extend the life of the commission, which expires December 23next. 

The coronation of the young Queen of the Netherlands was made the occasionof fitting congratulations. 

The claim of Victor H. McCord against Peru, which for a number of years hasbeen pressed by this Government and has on several occasions attracted theattention of the Congress, has been satisfactorily adjusted. A protocol wassigned May 17, 1898, whereby, the fact of liability being admitted, thequestion of the amount to be awarded was submitted to the chief justice ofCanada as sole arbitrator. His award sets the indemnity due the claimant at$40, 000. 

The Government of Peru has given the prescribed notification of itsintention to abrogate the treaty of friendship, commerce, and navigationconcluded with this country August 31, 1887. As that treaty contains manyimportant provisions necessary to the maintenance of commerce and goodrelations, which could with difficulty be replaced by the negotiation ofrenewed provisions within the brief twelve months intervening before thetreaty terminates, I have invited suggestions by Peru as to the particularprovisions it is desired to annul, in the hope of reaching an arrangementwhereby the remaining articles may be provisionally saved. 

His Majesty the Czar having announced his purpose to raise the ImperialRussian mission at this capital to the rank of an embassy, I responded, under the authority conferred by the act of March 3, 1893, by commissioningand accrediting the actual representative at St. Petersburg in the capacityof ambassador extraordinary and plenipotentiary. The Russian ambassador tothis country has since presented his credentials. 

The proposal of the Czar for a general reduction of the vast militaryestablishments that weigh so heavily upon many peoples in time of peace wascommunicated to this Government with an earnest invitation to berepresented in the conference which it is contemplated to assemble with aview to discussing the means of accomplishing so desirable a result. HisMajesty was at once informed of the cordial sympathy of this Governmentwith the principle involved in his exalted proposal and of the readiness ofthe United States to take part in the conference. The active military forceof the United States, as measured by our population, territorial area, andtaxable wealth, is, and under any conceivable prospective conditions mustcontinue to be, in time of peace so conspicuously less than that of thearmed powers to whom the Czar's appeal is especially addressed that thequestion can have for us no practical importance save as marking anauspicious step toward the betterment of the condition of the modernpeoples and the cultivation of peace and good will among them; but in thisview it behooves us as a nation to lend countenance and aid to thebeneficent project. 

The claims of owners of American sealing vessels for seizure by Russiancruisers in Bering Sea are being pressed to a settlement. The equities ofthe cases justify the expectation that a measure of reparation willeventually be accorded in harmony with precedent and in the light of theproven facts. 

The recommendation made in my special message of April 27 last is renewed, that appropriation be made to reimburse the master and owners of theRussian bark Hans for wrongful arrest of the master and detention of thevessel in February, 1896, by officers of the United States district courtfor the southern district of Mississippi. The papers accompanying my saidmessage make out a most meritorious claim and justify the urgency withwhich it has been presented by the Government of Russia. 

Malietoa Laupepa, King of Samoa, died on August 22 last. According toArticle I of the general act of Berlin, "his successor shall be dulyelected according to the laws and customs of Samoa. "

Arrangements having been agreed upon between the signatories of the generalact for the return of Mataafa and the other exiled Samoan chiefs, they werebrought from Jaluit by a German war vessel and landed at Apia on September18 last. 

Whether the death of Malietoa and the return of his old-time rival Mataafawill add to the undesirable complications which the execution of thetripartite general act has heretofore developed remains to be seen. Theefforts of this Government will, as heretofore, be addressed toward aharmonious and exact fulfillment of the terms of the internationalengagement to which the United States became a party in 1889. 

The Cheek claim against Siam, after some five years of controversy, hasbeen adjusted by arbitration under an agreement signed July 6, 1897, anaward of 706, 721 ticals (about $187, 987. 78 ), with release of the Cheekestate from mortgage claims, having been rendered March 21, 1898, in favorof the claimant by the arbitrator, Sir Nicholas John Hannen, British chiefjustice for China and Japan. 

An envoy from Siam has been accredited to this Government and has presentedhis credentials. 

Immediately upon the outbreak of the war with Spain the Swiss Government, fulfilling the high mission it has deservedly assumed as the patron of theInternational Red Cross, proposed to the United States and Spain that theyshould severally recognize and carry into execution, as a modus vivendi, during the continuance of hostilities, the additional articles proposed bythe international conference of Geneva, October 20, 1868, extending theeffects of the existing Red Cross convention of 1864 to the conduct ofnaval war. Following the example set by France and Germany in 1870 inadopting such a modus vivendi, and in view of the accession of the UnitedStates to those additional articles in 1882, although the exchange ofratifications thereof still remained uneffected, the Swiss proposal waspromptly and cordially accepted by us, and simultaneously by Spain. 

This Government feels a keen satisfaction in having thus been enabled totestify its adherence to the broadest principles of humanity even amidstthe clash of war, and it is to be hoped that the extension of the Red Crosscompact to hostilities by sea as well as on land may soon become anaccomplished fact through the general promulgation of the additional navalRed Cross articles by the maritime powers now parties to the convention of1864. 

The important question of the claim of Switzerland to the perpetualcantonal allegiance of American citizens of Swiss origin has not madehopeful progress toward a solution, and controversies in this regard stillcontinue. 

The newly accredited envoy of the United States to the Ottoman Portecarries instructions looking to the disposal of matters in controversy withTurkey for a number of years. He is especially charged to press for a justsettlement of our claims for indemnity by reason of the destruction of theproperty of American missionaries resident in that country during theArmenian troubles of 1895, as well as for the recognition of older claimsof equal justness. 

He is also instructed to seek an adjustment of the dispute growing out ofthe refusal of Turkey to recognize the acquired citizenship of Ottoman-bornpersons naturalized in the United States since 1869 without prior imperialconsent, and in the same general relation he is directed to endeavor tobring about a solution of the question which has more or less acutelyexisted since 1869 concerning the jurisdictional rights of the UnitedStates in matters of criminal procedure and punishment under Article IV ofthe treaty of 1830. This latter difficulty grows out of a verbaldifference, claimed by Turkey to be essential, between the original Turkishtext and the promulgated translation. 

After more than two years from the appointment of a consul of this countryto Erzerum, he has received his exequatur. 

The arbitral tribunal appointed under the treaty of February 2, 1897, between Great Britain and Venezuela, to determine the boundary line betweenthe latter and the colony of British Guiana, is to convene at Paris duringthe present month. It is a source of much gratification to this Governmentto see the friendly resort of arbitration applied to the settlement of thiscontroversy, not alone because of the earnest part we have had in bringingabout the result, but also because the two members named on behalf ofVenezuela, Mr. Chief Justice Fuller and Mr. Justice Brewer, chosen from ourhighest court, appropriately testify the continuing interest we feel in thedefinitive adjustment of the question according to the strictest rules ofjustice. The British members, Lord Herschell and Sir Richard Collins, arejurists of no less exalted repute, while the fifth member and president ofthe tribunal, M. F. De Martens, has earned a world-wide reputation as anauthority upon international law. 

The claim of Felipe Scandella against Venezuela for arbitrary expulsion andinjury to his business has been adjusted by the revocation of the order ofexpulsion and by the payment of the sum of $16, 000. 

I have the satisfaction of being able to state that the Bureau of theAmerican Republics, created in 1890 as the organ for promoting commercialintercourse and fraternal relations among the countries of the WesternHemisphere, has become a more efficient instrument of the wise purposes ofits founders, and is receiving the cordial support of the contributingmembers of the international union which are actually represented in itsboard of management. A commercial directory, in two volumes, containing amass of statistical matter descriptive of the industrial and commercialinterests of the various countries, has been printed in English, Spanish, Portuguese, and French, and a monthly bulletin published in these fourlanguages and distributed in the Latin-American countries as well as in theUnited States has proved to be a valuable medium for disseminatinginformation and furthering the varied interests of the internationalunion. 

During the past year the important work of collecting information ofpractical benefit to American industries and trade through the agency ofthe diplomatic and consular officers has been steadily advanced, and inorder to lay such data before the public with the least delay the practicewas begun in January, 1898, of issuing the commercial reports from day today as they are received by the Department of State. It is believed thatfor promptitude as well as fullness of information the service thussupplied to our merchants and manufacturers will be found to show sensibleimprovement and to merit the liberal support of Congress. 

The experiences of the last year bring forcibly home to us a sense of theburdens and the waste of war. We desire, in common with most civilizednations, to reduce to the lowest possible point the damage sustained intime of war by peaceable trade and commerce. It is true we may suffer insuch cases less than other communities, but all nations are damaged more orless by the state of uneasiness and apprehension into which an outbreak ofhostilities throws the entire commercial world. It should be our object, therefore, to minimize, so far as practicable, this inevitable loss anddisturbance. This purpose can probably best be accomplished by aninternational agreement to regard all private property at sea as exemptfrom capture or destruction by the forces of belligerent powers. The UnitedStates Government has for many years advocated this humane and beneficentprinciple, and is now in position to recommend it to other powers withoutthe imputation of selfish motives. I therefore suggest for yourconsideration that the Executive be authorized to correspond with thegovernments of the principal maritime powers with a view of incorporatinginto the permanent law of civilized nations the principle of the exemptionof all private property at sea, not contraband of war, from capture ordestruction by belligerent powers. 

The Secretary of the Treasury reports that the receipts of the Governmentfrom all sources during the fiscal year ended June 30, 1898, including$64, 751, 223 received from sale of Pacific railroads, amounted to$405, 321, 335, and its expenditures to $443, 168, 582. There was collectedfrom customs $149, 575, 062 and from internal revenue $170, 900, 641. Ourdutiable imports amounted to $324, 635, 479, a decrease of $58, 156, 690 overthe preceding year, and importations free of duty amounted to $291, 414, 175, a decrease from the preceding year of $90, 524, 068. Internal-revenuereceipts exceeded those of the preceding year by $24, 212, 067. 

The total tax collected on distilled spirits was $92, 546, 999; onmanufactured tobacco, $36, 230, 522, and on fermented liquors, $39, 515, 421. We exported merchandise during the year amounting to $1, 231, 482, 330, anincrease of $180, 488, 774 from the preceding year. 

It is estimated upon the basis of present revenue laws that the receipts ofthe Government for the year ending June 30, 1899, will be $577, 874, 647, andits expenditures $689, 874, 647, resulting in a deficiency of $112, 000, 000. 

On the 1st of December, 1898, there was held in the Treasury gold coinamounting to $138, 441, 547, gold bullion amounting to $138, 502, 545, silverbullion amounting to $93, 359, 250, and other forms of money amounting to$451, 963, 981. 

On the same date the amount of money of all kinds in circulation, or notincluded in Treasury holdings, was $1, 886, 879, 504, an increase for the yearof $165, 794, 966. Estimating our population at 75, 194, 000 at the timementioned, the per capita circulation was $25. 09. On the same date therewas in the Treasury gold bullion amounting to $138, 502, 545. 

The provisions made for strengthening the resources of the Treasury inconnection with the war have given increased confidence in the purpose andpower of the Government to maintain the present standard, and haveestablished more firmly than ever the national credit at home and abroad. Amarked evidence of this is found in the inflow of gold to the Treasury. Itsnet gold holdings on November 1, 1898, were $239, 885, 162 as compared with$153, 573, 147 on November 1, 1897, and an increase of net cash of$207, 756, 100, November 1, 1897, to $300, 238, 275, November 1, 1898. Thepresent ratio of net Treasury gold to outstanding Government liabilities, including United States notes, Treasury notes of 1890, silver certificates, currency certificates, standard silver dollars, and fractional silver coin, November 1, 1898, was 25. 35 per cent, as compared with 16. 96 per cent, November 1, 1897. 

I renew so much of my recommendation of December, 1897, as follows: Thatwhen any of the United States notes are presented for redemption in goldand are redeemed in gold, such notes shall be kept and set apart and onlypaid out in exchange for gold. This is an obvious duty. If the holder ofthe United States note prefers the gold and gets it from the Government, heshould not receive back from the Government a United States note withoutpaying gold in exchange for it. The reason for this is made all the moreapparent when the Government issues an interest-bearing debt to providegold for the redemption of United States notes--a non-interest-bearingdebt. Surely it should not pay them out again except on demand and forgold. If they are put out in any other way, they may return again, to hefollowed by another bond issue to redeem them--another interest-bearingdebt to redeem a non-interest-bearing debt. This recommendation was made inthe belief that such provisions of law would insure to a greater degree thesafety of the present standard, and better protect our currency from thedangers to which it is subjected from a disturbance in the general businessconditions of the country. 

In my judgment the present condition of the Treasury amply justifies theimmediate enactment of the legislation recommended one year ago, underwhich a portion of the gold holdings should be placed in a trust fund fromwhich greenbacks should be redeemed upon presentation, but when onceredeemed should not thereafter be paid out except for gold. 

It is not to be inferred that other legislation relating to our currency isnot required; on the contrary, there is an obvious demand for it. 

The importance of adequate provision which will insure to our future amoney standard related as our money standard now is to that of ourcommercial rivals is generally recognized. 

The companion proposition that our domestic paper currency shall be keptsafe and yet be so related to the needs of our industries and internalcommerce as to be adequate and responsive to such needs is a propositionscarcely less important. The subject, in all its parts, is commended to thewise consideration of the Congress. 

The annexation of Hawaii and the changed relations of the United States toCuba, Puerto Rico, and the Philippines resulting from the war, compel theprompt adoption of a maritime policy by the United States. There should beestablished regular and frequent steamship communication, encouraged by theUnited States, under the American flag, with the newly acquired islands. Spain furnished to its colonies, at an annual cost of about $2, 000, 000, steamship lines communicating with a portion of the world's markets, aswell as with trade centers of the home Government. The United States willnot undertake to do less. It is our duty to furnish the people of Hawaiiwith facilities, under national control, for their export and import trade. It will be conceded that the present situation calls for legislation whichshall be prompt, durable, and liberal. 

The part which American merchant vessels and their seamen performed in thewar with Spain demonstrates that this service, furnishing both pickets andthe second line of defense, is a national necessity, and should beencouraged in every constitutional way. Details and methods for theaccomplishment of this purpose are discussed in the report of the Secretaryof the Treasury, to which the attention of Congress is respectfullyinvited. 

In my last annual message I recommended that Congress authorize theappointment of a commission for the purpose of making systematicinvestigations with reference to the cause and prevention of yellow fever. This matter has acquired an increased importance as a result of themilitary occupation of the island of Cuba and the commercial intercoursebetween this island and the United States which we have every reason toexpect. The sanitary problems connected with our new relations with theisland of Cuba and the acquisition of Puerto Rico are no less importantthan those relating to finance, commerce, and administration. It is myearnest desire that these problems may be considered by competent expertsand that everything may be done which the most recent advances in sanitaryscience can offer for the protection of the health of our soldiers in thoseislands and of our citizens who are exposed to the dangers of infectionfrom the importation of yellow fever. I therefore renew my recommendationthat the authority of Congress may be given and a suitable appropriationmade to provide for a commission of experts to be appointed for the purposeindicated. 

Under the act of Congress approved April 26, 1898, authorizing thePresident in his discretion, "upon a declaration of war by Congress, or adeclaration by Congress that war exists, " I directed the increase of theRegular Army to the maximum of 62, 000, authorized in said act. 

There are now in the Regular Army 57, 862 officers and men. In said act itwas provided--

That at the end of any war in which the United States may becomeinvolved the Army shall be reduced to a peace basis by the transferin the same arm of the service or absorption by promotion or honorabledischarge, under such regulations as the Secretary of War may establish, ofsupernumerary commissioned officers and the honorable discharge or transferof supernumerary enlisted men; and nothing contained in this act shall beconstrued as authorizing the permanent increase of the commissioned orenlisted force of the Regular Army beyond that now provided by the law inforce prior to the passage of this act, except as to the increase oftwenty-five majors provided for in section 1 hereof. The importance oflegislation for the permanent increase of the Army is therefore manifest, and the recommendation of the Secretary of War for that purpose has myunqualified approval. There can be no question that at this time, andprobably for some time in the future, 100, 000 men will be none too many tomeet the necessities of the situation. At all events, whether that numbershall be required permanently or not, the power should be given to thePresident to enlist that force if in his discretion it should be necessary;and the further discretion should be given him to recruit for the Armywithin the above limit from the inhabitants of the islands with thegovernment of which we are charged. It is my purpose to muster out theentire Volunteer Army as soon as the Congress shall provide for theincrease of the regular establishment. This will be only an act of justiceand will be much appreciated by the brave men who left their homes andemployments to help the country in its emergency. 

In my last annual message I stated: The Union Pacific Railway, main line, was sold under the decree of the United States court for the district ofNebraska on the 1st and 2d of November of this year. The amount due theGovernment consisted of the principal of the subsidy bonds, $27, 236, 512, and the accrued interest thereon, $31, 211, 711. 75, making the totalindebtedness $58, 448, 223. 75. The bid at the sale covered the first-mortgagelien and the entire mortgage claim of the Government, principal andinterest. This left the Kansas Pacific case unconcluded. By a decree of thecourt in that case an upset price for the property was fixed at a sum whichwould yield to the Government only $2, 500, 000 upon its lien. The sale, atthe instance of the Government, was postponed first to December 15, 1897, and later, upon the application of the United States, was postponed to the16th day of February, 1898. 

Having satisfied myself that the interests of the Government required thatan effort should be made to obtain a larger sum, I directed the Secretaryof the Treasury, under the act passed March 3, 1887, to pay out of theTreasury to the persons entitled to receive the same the amounts due uponall prior mortgages upon the Eastern and Middle divisions of said railroadout of any money in the Treasury not otherwise appropriated, whereupon theAttorney-General prepared a petition to be presented to the court, offeringto redeem said prior liens in such manner as the court might direct, andpraying that thereupon the United States might be held to be subrogated toall the rights of said prior lien holders and that a receiver might beappointed to take possession of the mortgaged premises and maintain andoperate the same until the court or Congress otherwise directed. Thereuponthe reorganization committee agreed that if said petition was withdrawn andthe sale allowed to proceed on the 16th of February, 1898, they would bid asum at the sale which would realize to the Government the entire principalof its debt, $6, 303, 000. 

Believing that no better price could be obtained and appreciating thedifficulties under which the Government would labor if it should become thepurchaser of the road at the sale, in the absence of any authority byCongress to take charge of and operate the road I directed that upon theguaranty of a minimum bid which should give the Government the principal ofits debt the sale should proceed. By this transaction the Governmentsecured an advance of $3, 803, 000 over and above the sum which the court hadfixed as the upset price, and which the reorganization committee haddeclared was the maximum which they would pay for the property. 

It is a gratifying fact that the result of these proceedings against theUnion Pacific system and the Kansas Pacific line is that the Government hasreceived on account of its subsidy claim the sum of $64, 751, 223. 75, anincrease of $18, 997, 163. 76 over the sum which the reorganization committeeoriginally agreed to bid for the joint property, the Government receivingits whole claim, principal and interest, on the Union Pacific, and theprincipal of its debt on the Kansas Pacific Railroad. 

Steps had been taken to foreclose the Government's lien upon the CentralPacific Railroad Company, but before action was commenced Congress passedan act, approved July 7, 1898, creating a commission consisting of theSecretary of the Treasury, the Attorney-General, and the Secretary of theInterior, and their successors in office, with full power to settle theindebtedness to the Government growing out of the issue of bonds in aid ofthe construction of the Central Pacific and Western Pacific bond-aidedrailroads, subject to the approval of the President. 

No report has yet been made to me by the commission thus created. Whateveraction is had looking to a settlement of the indebtedness in accordancewith the act referred to will be duly submitted to the Congress. 

I deem it my duty to call to the attention of Congress the condition of thepresent building occupied by the Department of Justice. The business ofthat Department has increased very greatly since it was established in itspresent quarters. The building now occupied by it is neither large enoughnor of suitable arrangement for the proper accommodation of the business ofthe Department. The Supervising Architect has pronounced it unsafe andunsuited for the use to which it is put. The Attorney-General in his reportstates that the library of the Department is upon the fourth floor, andthat all the space allotted to it is so crowded with books as todangerously overload the structure. The first floor is occupied by theCourt of Claims. The building is of an old and dilapidated appearance, unsuited to the dignity which should attach to this important Department. 

A proper regard for the safety, comfort, and convenience of the officersand employees would justify the expenditure of a liberal sum of money inthe erection of a new building of commodious proportions and handsomeappearance upon the very advantageous site already secured for thatpurpose, including the ground occupied by the present structure andadjoining vacant lot, comprising in all a frontage of 201 feet onPennsylvania avenue and a depth of 136 feet. 

In this connection I may likewise refer to the inadequate accommodationsprovided for the Supreme Court in the Capitol, and suggest the wisdom ofmaking provision for the erection of a separate building for the court andits officers and library upon available ground near the Capitol. 

The postal service of the country advances with extraordinary growth. Within twenty years both the revenues and the expenditures of thePost-Office Department have multiplied threefold. In the last ten yearsthey have nearly doubled. Our postal business grows much more rapidly thanour population. It now involves an expenditure of $100, 000, 000 a year, numbers 73, 000 post-offices, and enrolls 200, 000 employees. This remarkableextension of a service which is an accurate index of the public conditionspresents gratifying evidence of the advancement of education, of theincrease of communication and business activity, and of the improvement ofmail facilities leading to their constantly augmenting use. 

The war with Spain laid new and exceptional labors on the Post-OfficeDepartment. The mustering of the military and naval forces of the UnitedStates required special mail arrangements for every camp and everycampaign. The communication between home and camp was naturally eager andexpectant. In some of the larger places of rendezvous as many as 50, 000letters a day required handling. This necessity was met by the promptdetail and dispatch of experienced men from the established force and bydirecting all the instrumentalities of the railway mail and post-officeservice, so far as necessary, to this new need. Congress passed an actempowering the postmaster-General to establish offices or branches at everymilitary camp or station, and under this authority the postal machinery wasspeedily put into effective operation. 

Under the same authority, when our forces moved upon Cuba, Puerto Rico, andthe Philippines they were attended and followed by the postal service. Though the act of Congress authorized the appointment of postmasters wherenecessary, it was early determined that the public interests would best besubserved, not by new designations, but by the detail of experienced menfamiliar with every branch of the service, and this policy was steadilyfollowed. When the territory which was the theater of conflict came intoour possession, it became necessary to reestablish mail facilities for theresident population as well as to provide them for our forces ofoccupation, and the former requirement was met through the extension andapplication of the latter obligation. I gave the requisite authority, andthe same general principle was applied to this as to other branches ofcivil administration under military occupation. The details are moreparticularly given in the report of the postmaster-General, and, while thework is only just begun, it is pleasing to be able to say that the servicein the territory which has come under our control is already materiallyimproved. 

The following recommendations of the Secretary of the Navy relative to theincrease of the Navy have my earnest approval:

1. Three seagoing sheathed and coppered battle ships of about 13, 500 tonstrial displacement, carrying the heaviest armor and most powerful ordnancefor vessels of their class, and to have the highest practicable speed andgreat radius of action. Estimated cost, exclusive of armor and armament, $3, 600, 000 each. 

2. Three sheathed and coppered armored cruisers of about 12, 000 tons trialdisplacement, carrying the heaviest armor and most powerful ordnance forvessels of their class, and to have the highest practicable speed and greatradius of action. Estimated cost, exclusive of armor and armament, $4, 000, 000 each. 

3. Three sheathed and coppered protected cruisers of about 6, 000 tons trialdisplacement, to have the highest practicable speed and great radius ofaction, and to carry the most powerful ordnance suitable for vessels oftheir class. Estimated cost, exclusive of armor and armament, $2, 150, 000each. 

4. Six sheathed and coppered cruisers of about 2, 500 tons trialdisplacement, to have the highest speed compatible with good cruisingqualities, great radius of action, and to carry the most powerful ordnancesuited to vessels of their class. Estimated cost, exclusive of armament, $1, 141, 800 each. 

I join with the Secretary of the Navy in recommending that grades ofadmiral and vice-admiral be temporarily revived, to be filled by officerswho have specially distinguished themselves in the war with Spain. 

I earnestly urge upon Congress the importance of early legislationproviding for the taking of the Twelfth Census. This is necessary in viewof the large amount of work which must be performed in the preparation ofthe schedules preparatory to the enumeration of the population. 

There were on the pension rolls on June 30, 1898, 993, 714 names, anincrease of nearly 18, 000 over the number on the rolls on the same day ofthe preceding year. The amount appropriated by the act of December 22, 1896, for the payment of pensions for the fiscal year of 1898 was$140, 000, 000. Eight million seventy thousand eight hundred and seventy-twodollars and forty-six cents was appropriated by the act of March 31, 1898, to cover deficiencies in army pensions, and repayments in the sum of$12, 020. 33, making a total of $148, 082, 892. 79 available for the payment ofpensions during the fiscal year 1898. The amount disbursed from that sumwas $144, 651, 879. 80, leaving a balance of $3, 431, 012. 99 unexpended on the30th of June, 1898, which was covered into the Treasury. There were 389names added to the rolls during the year by special acts passed at thesecond session of the Fifty-fifth Congress, making a total of 6, 486pensioners by Congressional enactments since 1861. 

The total receipts of the Patent Office during the past year were$1, 253, 948. 44. The expenditures were $1, 081, 633. 79, leaving a surplus of$172, 314. 65. 

The public lands disposed of by the Government during the year reached8, 453, 896. 92 acres, an increase of 614, 780. 26 acres over the previous year. The total receipts from public lands during the fiscal year amounted to$2, 277, 995. 18, an increase of $190, 063. 90 over the preceding year. Thelands embraced in the eleven forest reservations which were suspended bythe act of June 4, 1897, again became subject to the operations of theproclamations of February 22, 1897, creating them, which added an estimatedamount of 19, 951, 360 acres to the area embraced in the reserves previouslycreated. In addition thereto two new reserves were created during theyear--the Pine Mountain and Zaca Lake Reserve, in California, embracing1, 644, 594 acres, and the Prescott Reserve, in Arizona, embracing 10, 240acres--while the Pecos River Reserve, in New Mexico, has been changed andenlarged to include 120, 000 additional acres. 

At the close of the year thirty forest reservations, not including those ofthe Afognak Forest and the Fish-Culture Reserve, in Alaska, had beencreated by Executive proclamations under section 24 of the act of March 3, 1891, embracing an estimated area of 40, 719, 474 acres. 

The Department of the Interior has inaugurated a forest system, madepossible by the act of July, 1898, for a graded force of officers incontrol of the reserves. This system has only been in full operation sinceAugust, but good results have already been secured in many sections. Thereports received indicate that the system of patrol has not only preventeddestructive fires from gaining headway, but has diminished the number offires. 

The special attention of the Congress is called to that part of the reportof the Secretary of the Interior in relation to the Five Civilized Tribes. It is noteworthy that the general condition of the Indians shows markedprogress. But one outbreak of a serious character occurred during the year, and that among the Chippewa Indians of Minnesota, which happily has beensuppressed. 

While it has not yet been practicable to enforce all the provisions of theact of June 28, 1898, "for the protection of the people of the IndianTerritory, and for other purposes, " it is having a salutary effect upon thenations composing the five tribes. The Dawes Commission reports that themost gratifying results and greater advance toward the attainment of theobjects of the Government have been secured in the past year than in anyprevious year. I can not too strongly indorse the recommendation of thecommission and of the Secretary of the Interior for the necessity ofproviding for the education of the 30, 000 white children resident in theIndian Territory. 

The Department of Agriculture has been active in the past year. Explorershave been sent to many of the countries of the Eastern and Westernhemispheres for seeds and plants that may be useful to the United States, and with the further view of opening up markets for our surplus products. The Forestry Division of the Department is giving special attention to thetreeless regions of our country and is introducing species speciallyadapted to semiarid regions. Forest fires, which seriously interfere withproduction, especially in irrigated regions, are being studied, that lossesfrom this cause may be avoided. The Department is inquiring into the useand abuse of water in many States of the West, and collating informationregarding the laws of the States, the decisions of the courts, and thecustoms of the people in this regard, so that uniformity may be secured. Experiment stations are becoming more effective every year. The annualappropriation of $720, 000 by Congress is supplemented by $400, 000 from theStates. Nation-wide experiments have been conducted to ascertain thesuitableness as to soil and climate and States for growing sugar beets. Thenumber of sugar factories has been doubled in the past two years, and theability of the United States to produce its own sugar from this source hasbeen clearly demonstrated. 

The Weather Bureau forecast and observation stations have been extendedaround the Caribbean Sea, to give early warning of the approach ofhurricanes from the south seas to our fleets and merchant marine. 

In the year 1900 will occur the centennial anniversary of the founding ofthe city of Washington for the permanent capital of the Government of theUnited States by authority of an act of Congress approved July 16, 1790. InMay, 1800, the archives and general offices of the Federal Government wereremoved to this place. On the 17th of November, 1800, the National Congressmet here for the first time and assumed exclusive control of the Federaldistrict and city. This interesting event assumes all the more significancewhen we recall the circumstances attending the choosing of the site, thenaming of the capital in honor of the Father of his Country, and theinterest taken by him in the adoption of plans for its future developmenton a magnificent scale. 

These original plans have been wrought out with a constant progress and asignal success even beyond anything their framers could have foreseen. Thepeople of the country are justly proud of the distinctive beauty andgovernment of the capital and of the rare instruments of science andeducation which here find their natural home. 

A movement lately inaugurated by the citizens to have the anniversarycelebrated with fitting ceremonies, including, perhaps, the establishmentof a handsome permanent memorial to mark so historical an occasion and togive it more than local recognition, has met with general favor on the partof the public. 

I recommend to the Congress the granting of an appropriation for thispurpose and the appointment of a committee from its respective bodies. Itmight also be advisable to authorize the President to appoint a committeefrom the country at large, which, acting with the Congressional andDistrict of Columbia committees, can complete the plans for an appropriatenational celebration. 

The alien contract law is shown by experience to need some amendment; ameasure providing better protection for seamen is proposed; the rightfulapplication of the eight-hour law for the benefit of labor and of theprinciple of arbitration are suggested for consideration; and I commendthese subjects to the careful attention of the Congress. 

The several departmental reports will be laid before you. They give ingreat detail the conduct of the affairs of the Government during the pastyear and discuss many questions upon which the Congress may feel calledupon to act. 

***

State of the Union AddressWilliam McKinleyDecember 5, 1899

To the Senate and House of Representatives:

At the threshold of your deliberations you are called to mourn with yourcountrymen the death of Vice-President Hobart, who passed from this life onthe morning of November 21 last. His great soul now rests in eternal peace. His private life was pure and elevated, while his public career was everdistinguished by large capacity, stainless integrity, and exalted motives. He has been removed from the high office which he honored and dignified, but his lofty character, his devotion to duty, his honesty of purpose, andnoble virtues remain with us as a priceless legacy and example. 

The Fifty-sixth Congress convenes in its first regular session with thecountry in a condition of unusual prosperity, of universal good will amongthe people at home, and in relations of peace and friendship with everygovernment of the world. Our foreign commerce has shown great increase involume and value. The combined imports and exports for the year are thelargest ever shown by a single year in all our history. Our exports for1899 alone exceeded by more than a billion dollars our imports and exportscombined in 1870. The imports per capita are 20 per cent less than in 1870, while the exports per capita are 58 per cent more than in 1870, showing theenlarged capacity of the United States to satisfy the wants of its ownincreasing population, as well as to contribute to those of the peoples ofother nations. 

Exports of agricultural products were $784, 776, 142. Of manufacturedproducts we exported in value $339, 592, 146, being larger than any previousyear. It is a noteworthy fact that the only years in all our history whenthe products of our manufactories sold abroad exceeded those bought abroadwere 1898 and 1899. 

Government receipts from all sources for the fiscal year ended June 30, 1899, including $11, 798, 314, 14, part payment of the Central PacificRailroad indebtedness, aggregated $610, 982, 004. 35. Customs receipts were$206, 128, 481. 75, and those from internal revenue $273, 437, 161. 51. 

For the fiscal year the expenditures were $700, 093, 564. 02, leaving adeficit of $89, 111, 559. 67. 

The Secretary of the Treasury estimates that the receipts for the currentfiscal year will aggregate $640, 958, 112, and upon the basis of presentappropriations the expenditures will aggregate $600, 958, 112, leaving asurplus of $40, 000, 000. 

For the fiscal year ended June 30, 1899, the internal-revenue receipts wereincreased about $100, 000, 000. 

The present gratifying strength of the Treasury is shown by the fact thaton December 1, 1899, the available cash balance was $278, 004, 837. 72, Ofwhich $239, 744, 905. 36 was in gold coin and bullion. The conditions ofconfidence which prevail throughout the country have brought gold into moregeneral use and customs receipts are now almost entirely paid in thatcoin. 

The strong position of the Treasury with respect to cash on hand and thefavorable showing made by the revenues have made it possible for theSecretary of the Treasury to take action under the provisions of section3694, Revised Statutes, relating to the sinking fund. Receipts exceededexpenditures for the first five months of the current fiscal year by$13, 413, 389. 91, and, as mentioned above, the Secretary of the Treasuryestimates that there will be a surplus of approximately $40, 000, 000 at theend of the year. Under such conditions it was deemed advisable and properto resume compliance with the provisions of the sinking-fund law, which foreight years has not been done because of deficiencies in the revenues. TheTreasury Department therefore offered to purchase during November$25, 000, 000 of the 5 per cent loan of 1904, or the 4 per cent funded loanof 1907, at the current market price. The amount offered and purchasedduring November was $18, 408, 600. The premium paid by the Government on suchpurchases was $2, 263, 521 and the net saving in interest was about$2, 885, 000. The success of this operation was sufficient to induce theGovernment to continue the offer to purchase bonds to and including the 23dday of December, instant, unless the remainder of the $25, 000, 000 calledfor should be presented in the meantime for redemption. 

Increased activity in industry, with its welcome attendant--a largeremployment for labor at higher wages--gives to the body of the people alarger power to absorb the circulating medium. It is further true that yearby year, with larger areas of land under cultivation, the increasing volumeof agricultural products, cotton, corn, and wheat, calls for a largervolume of money supply. This is especially noticeable at thecrop-harvesting and crop-moving period. 

In its earlier history the National Banking Act seemed to prove areasonable avenue through which needful additions to the circulation couldfrom time to time be made. Changing conditions have apparently rendered itnow inoperative to that end. The high margin in bond securities required, resulting from large premiums which Government bonds command in the market, or the tax on note issues, or both operating together, appear to be theinfluences which impair its public utility. 

The attention of Congress is respectfully invited to this important matter, with the view of ascertaining whether or not such reasonable modificationscan be made in the National Banking Act as will render its service in theparticulars here referred to more responsive to the people's needs. I againurge that national banks be authorized to organize with a capital of$25, 000. 

I urgently recommend that to support the existing gold standard, and tomaintain "the parity in value of the coins of the two metals (gold andsilver) and the equal power of every dollar at all times in the market andin the payment of debts, " the Secretary of the Treasury be given additionalpower and charged with the duty to sell United States bonds and to employsuch other effective means as may be necessary to these ends. The authorityshould include the power to sell bonds on long and short time, asconditions may require, and should provide for a rate of interest lowerthan that fixed by the act of January 14, 1875. While there is now nocommercial fright which withdraws gold from the Government, but, on thecontrary, such widespread confidence that gold seeks the Treasury demandingpaper money in exchange, yet the very situation points to the present asthe most fitting time to make adequate provision to insure the continuanceof the gold standard and of public confidence in the ability and purpose ofthe Government to meet all its obligations in the money which the civilizedworld recognizes as the best. The financial transactions of the Governmentare conducted upon a gold basis. We receive gold when we sell United Statesbonds and use gold for their payment. We are maintaining the parity of allthe money issued or coined by authority of the Government. We are doingthese things with the means at hand. Happily at the present time we are notcompelled to resort to loans to supply gold. It has been done in the past, however, and may have to be done in the future. It behooves us, therefore, to provide at once the best means to meet the emergency when it arises, andthe best means are those which are the most certain and economical. Thosenow authorized have the virtue neither of directness nor economy. We havealready eliminated one of the causes of our financial plight andembarrassment during the years 1893, 1894, 1895, and 1896. Our receipts nowequal our expenditures; deficient revenues no longer create alarm Let usremove the only remaining cause by conferring the full and necessary poweron the Secretary of the Treasury and impose upon him the duty to uphold thepresent gold standard and preserve the coins of the two metals on a paritywith each other, which is the repeatedly declared policy of the UnitedStates. 

In this connection I repeat my former recommendations that a portion of thegold holdings shall be placed in a trust fund from which greenbacks shallbe redeemed upon presentation, but when once redeemed shall not thereafterbe paid out except for gold. 

The value of an American merchant marine to the extension of our commercialtrade and the strengthening of our power upon the sea invites the immediateaction of the Congress. Our national development will be one-sided andunsatisfactory so long as the remarkable growth of our inland industriesremains unaccompanied by progress on the seas. There is no lack ofconstitutional authority for legislation which shall give to the countrymaritime strength commensurate with its industrial achievements and withits rank among the nations of the earth, The past year has recorded exceptional activity in our shipyards, and thepromises of continual prosperity in shipbuilding are abundant. Advancedlegislation for the protection of our seamen has been enacted. Our coasttrade, under regulations wisely framed at the beginning of the Governmentand since, shows results for the past fiscal year unequaled in our recordsor those of any other power. We shall fail to realize our opportunities, however, if we complacently regard only matters at home and blind ourselvesto the necessity of securing our share in the valuable carrying trade ofthe world. 

Last year American vessels transported a smaller share of our exports andimports than during any former year in all our history, and the measure ofour dependence upon foreign shipping was painfully manifested to ourpeople. Without any choice of our own, but from necessity, the Departmentsof the Government charged with military and naval operations in the Eastand West Indies had to obtain from foreign flags merchant vessels essentialfor those operations. 

The other great nations have not hesitated to adopt the required means todevelop their shipping as a factor in national defense and as one of thesurest and speediest means of obtaining for their producers a share inforeign markets. Like vigilance and effort on our part cannot fail toimprove our situation, which is regarded with humiliation at home and withsurprise abroad. Even the seeming sacrifices, which at the beginning may beinvolved, will be offset later by more than equivalent gains. 

The expense is as nothing compared to the advantage to be achieved. Thereestablishment of our merchant marine involves in a large measure ourcontinued industrial progress and the extension of our commercial triumphs. I am satisfied the judgment of the country favors the policy of aid to ourmerchant marine, which will broaden our commerce and markets and upbuildour sea-carrying capacity for the products of agriculture and manufacture;which, with the increase of our Navy, mean more work and wages to ourcountrymen, as well as a safeguard to American interests in every part ofthe world. 

Combinations of capital organized into trusts to control the conditions oftrade among our citizens, to stifle competition, limit production, anddetermine the prices of products used and consumed by the people, arejustly provoking public discussion, and should early claim the attention ofthe Congress. 

The Industrial Commission, created by the act of the Congress of June 18, 1898, has been engaged in extended hearings upon the disputed questionsinvolved in the subject of combinations in restraint of trade andcompetition. They have not yet completed their investigation of thissubject, and the conclusions and recommendations at which they may arriveare undetermined. 

The subject is one giving rise to many divergent views as to the nature andvariety or cause and extent of the injuries to the public which may resultfrom large combinations concentrating more or less numerous enterprises andestablishments, which previously to the formation of the combination werecarried on separately. 

It is universally conceded that combinations which engross or control themarket of any particular kind of merchandise or commodity necessary to thegeneral community, by suppressing natural and ordinary competition, wherebyprices are unduly enhanced to the general consumer, are obnoxious not onlyto the common law but also to the public welfare. There must be a remedyfor the evils involved in such organizations. If the present law can beextended more certainly to control or check these monopolies or trusts, itshould be done without delay. Whatever power the Congress possesses overthis most important subject should be promptly ascertained and asserted. 

President Harrison in his annual message of December 3, 1889, says: Earnestattention should be given by Congress to a consideration of the questionhow far the restraint of those combinations of capital commonly called"trusts" is matter of Federal jurisdiction. When organized, as they oftenare, to crush out all healthy competition and to monopolize the productionor sale of an article of commerce and general necessity they are dangerousconspiracies against the public good, and should be made the subject ofprohibitory and even penal legislation. An act to protect trade andcommerce against unlawful restraints and monopolies was passed by Congresson the 2d of July, 1890. The provisions of this statute are comprehensiveand stringent. It declares every contract or combination, in the form of atrust or otherwise, or conspiracy in the restraint of trade or commerceamong the several States or with foreign nations, to be unlawful. Itdenominates as a criminal every person who makes any such contract orengages in any such combination or conspiracy, and provides a punishment byfine or imprisonment. It invests the several circuit courts of the UnitedStates with jurisdiction to prevent and restrain violations of the act, andmakes it the duty of the several United States district attorneys, underthe direction of the Attorney General, to institute proceedings in equityto prevent and restrain such violations. It further confers upon any personwho shall be injured in his business or property by any other person orcorporation by reason of anything forbidden or declared to be unlawful bythe act, the power to sue therefore in any circuit court of the UnitedStates without respect to the amount in controversy, and to recoverthreefold the damages by him sustained and the costs of the suit, includingreasonable attorney fees. It will be perceived that the act is aimed atevery kind of combination in the nature of a trust or monopoly in restraintof interstate or international commerce. 

The prosecution by the United States of offenses under the act of 1890 hasbeen frequently resorted to in the Federal courts, and notable efforts inthe restraint of interstate commerce, such as the Trans-Missouri FreightAssociation and the joint Traffic Association, have been successfullyopposed and suppressed. 

President Cleveland in his annual message of December 7, 1896--more thansix years subsequent to the enactment of this law--after stating theevils of these trust combinations, says: Though Congress has attempted todeal with this matter by legislation, the laws passed for that purpose thusfar have proved ineffective, not because of any lack of disposition orattempt to enforce them, but simply because the laws themselves asinterpreted by the courts do not reach the difficulty. If theinsufficiencies of existing laws can be remedied by further legislation, itshould be done. The fact must be recognized, however, that all Federallegislation on this subject may fall short of its purpose because ofinherent obstacles, and also because of the complex character of ourgovernmental system, which, while making the Federal authority supremewithin its sphere, has carefully limited that sphere by metes and boundswhich cannot be transgressed. The decision of our highest court on thisprecise question renders it quite doubtful whether the evils of trusts andmonopolies may be adequately treated through Federal action, unless theyseek directly and purposely to include in their objects transportation orintercourse between States or between the United States and foreigncountries. It does not follow, however, that this is the limit of theremedy that may be applied. Even though it may be found that Federalauthority is not broad enough to fully reach the case, there can be nodoubt of the power of the several States to act effectively in thepremises, and there should be no reason to doubt their willingness tojudiciously exercise such power. The State legislation to which PresidentCleveland looked for relief from the evils of trusts has failed toaccomplish fully that object. This is probably due to a great extent to thefact that different States take different views as to the proper way todiscriminate between evil and injurious combinations and those associationswhich are beneficial and necessary to the business prosperity of thecountry. The great diversity of treatment in different States arising fromthis cause and the intimate relations of all parts of the country to eachother without regarding State lines in the conduct of business have madethe enforcement of State laws difficult. 

It is apparent that uniformity of legislation upon this subject in theseveral States is much to be desired. It is to be hoped that suchuniformity founded in a wise and just discrimination between what isinjurious and what is useful and necessary in business operations may beobtained and that means may be found for the Congress within thelimitations of its constitutional power so to supplement an effective codeof State legislation as to make a complete system of laws throughout theUnited States adequate to compel a general observance of the salutary rulesto which I have referred. 

The whole question is so important and far-reaching that I am sure no partof it will be lightly considered, but every phase of it will have thestudied deliberation of the Congress, resulting in wise and judiciousaction. 

A review of our relations with foreign States is presented with suchrecommendations as are deemed appropriate. 

The long-pending boundary dispute between the Argentine Republic and Chilewas settled in March last by the award of an arbitral commission, on whichthe United States minister at Buenos Ayres served as umpire. 

Progress has been made toward the conclusion of a convention of extraditionwith the Argentine Republic. Having been advised and consented to by theUnited States Senate and ratified by Argentina, it only awaits theadjustment of some slight changes in the text before exchange. 

In my last annual message I adverted to the claim of the Austro-HungarianGovernment for indemnity for the killing of certain Austrian and Hungariansubjects by the authorities of the State of Pennsylvania, at Lattimer, while suppressing an unlawful tumult of miners, September 10, 1897. In viewof the verdict of acquittal rendered by the court before which the sheriffand his deputies were tried for murder, and following the establisheddoctrine that the Government may not be held accountable for injuriessuffered by individuals at the hands of the public authorities while actingin the line of duty in suppressing disturbance of the public peace, thisGovernment, after due consideration of the claim advanced by theAustro-Hungarian Government, was constrained to decline liability toindemnify the sufferers. 

It is gratifying to be able to announce that the Belgian Government hasmitigated the restrictions on the importation of cattle from the UnitedStates, to which I referred in my last annual message. 

Having been invited by Belgium to participate in a congress, held atBrussels, to revise the provisions of the general act Of July 2, 1890, forthe repression of the African slave trade, to which the United States was asignatory party, this Government preferred not to be represented by aplenipotentiary, but reserved the right of accession to the result. Notablechanges were made, those especially concerning this country being in theline of the increased restriction of the deleterious trade in spirituousliquors with the native tribes, which this Government has from the outseturgently advocated. The amended general act will be laid before the Senate, with a view to its advice and consent. 

Early in the year the peace of Bolivia was disturbed by a successfulinsurrection. The United States minister remained at his post, attending tothe American interests in that quarter, and using besides his good officesfor the protection of the interests of British subjects in the absence oftheir national representative. On the establishment of the new Government, our minister was directed to enter into relations therewith. 

General Pando was elected President of Bolivia on October 23. 

Our representative has been instructed to use all permissible friendlyendeavors to induce the Government of Bolivia to amend its marriage laws soas to give legal status to the non-Catholic and civil marriages of alienswithin its jurisdiction, and strong hopes are entertained that the Bolivianlaw in this regard will be brought, as was that of Peru some years ago, into harmony with the general practice of modern States. 

A convention of extradition with Brazil, signed May 14, 1897, has beenratified by the Brazilian Legislature. 

During the past summer two national ships of the United States have visitedBrazilian ports on a friendly mission and been cordially received. Thevoyage of the Wilmington up the Amazon River gave rise to a passingmisunderstanding, owing to confusion in obtaining permission to visit theinterior and make surveys in the general interest of navigation, but theincident found a ready adjustment in harmony with the close relations ofamity which this Government has always sedulously sought to cultivate withthe commonwealths of the Western Continent. 

The claim growing out of the seizure of the American-owned newspaper "ThePanama Star and Herald" by the authorities of Colombia has been settled, after a controversy of several years, by an agreement assessing at $30, 000the indemnity to be paid by the Colombian Government, in three installmentsof $10, 000 each. 

The good will of Colombia toward our country has been testified anew by thecordial extension of facilities to the Nicaraguan Canal Commission in theirapproaching investigation of the Panama Canal and other projected routesacross the Isthmus of Darien. 

Toward the end of October an insurrectionary disturbance developed in theColombian Republic. This movement has thus far not attained any decisiveresult and is still in progress. 

Discussion of the questions raised by the action of Denmark in imposingrestrictions on the importation of American meats has continued withoutsubstantial result in our favor. 

The neighboring island Republic of Santo Domingo has lately been the sceneof revolution, following a long period of tranquility. It began with thekilling of President Heureaux in July last, and culminated in therelinquishment by the succeeding Vice-President of the reins of governmentto the insurgents. The first act of the provisional government was thecalling of a presidential and constituent election. Juan Isidro Jimenez, having been elected President, was inaugurated on the 14th of November. Relations have been entered into with the newly established Government. 

The experimental association of Nicaragua, Honduras, and Salvador, tinderthe title of the Greater Republic of Central America, when apparently onthe threshold of a complete federal organization by the adoption of aconstitution and the formation of a national legislature, was disrupted inthe last days of November, 1898, by the withdrawal of Salvador. ThereuponNicaragua and Honduras abandoned the joint compact, each resuming itsformer independent sovereignty. This was followed by the reception ofMinister Merry by the Republics of Nicaragua and Salvador, while MinisterHunter in turn presented his credentials to the Government of Honduras, thus reverting to the old distribution of the diplomatic agencies of theUnited States in Central America for which our existing statutes provide. ANicaraguan envoy has been accredited to the United States. 

An insurrectionary movement, under General Reyes, broke out at Bluefieldsin February last, and for a time exercised actual control in the MosquitoTerritory. The Detroit was promptly sent thither for the protection ofAmerican interests. After a few weeks the Reyes government renounced theconflict, giving place to the restored supremacy of Nicaragua. During theinterregnum certain public dues accruing under Nicaraguan law werecollected from American merchants by the authorities for the time being ineffective administrative control. Upon the titular government regainingpower, a second payment of these dues was demanded. Controversy arosetouching the validity of the original payment of the debt to the de factoregent of the territory. An arrangement was effected in April last by theUnited States minister and the foreign secretary of Nicaragua whereby theamounts of the duplicate payments were deposited with the British consulpending an adjustment of the matter by direct agreement between theGovernments of the United States and Nicaragua. The controversy is stillunsettled. 

The contract of the Maritime Canal Company of Nicaragua was declaredforfeited by the Nicaraguan Government on the Tenth of October, on theground of nonfulfillment within the ten years' term stipulated in thecontract. The Maritime Canal Company has lodged a protest against thisaction, alleging rights in the premises which appear worthy ofconsideration. This Government expects that Nicaragua will afford theprotestants a full and fair hearing upon the merits of the case. 

The Nicaragua Canal Commission, which had been engaged upon the work ofexamination and survey for a ship-canal route across Nicaragua, havingcompleted its labors and made its report, was dissolved on May P, and onJune To a new commission, known as the Isthmian Canal Commission, wasorganized under the terms of the act approved March 3, 1899, for thepurpose of examining the American Isthmus with a view to determining themost practicable and feasible route for a ship canal across that Isthmus, with its probable cost, and other essential details. 

This Commission, under the presidency of Rear-Admiral John G. Walker, U. S. N. (retired), entered promptly upon the work intrusted to it, and is nowcarrying on examinations in Nicaragua along the route of the Panama Canal, and in Darien from the Atlantic, in the neighborhood of the Atrato River, to the Bay of Panama, on the Pacific side. Good progress has been made, butunder the law a comprehensive and complete investigation is called for, which will require much labor and considerable time for its accomplishment. The work will be prosecuted as expeditiously as possible and a report madeat the earliest practicable date. 

The great importance of this work cannot be too often or too stronglypressed upon the attention of the Congress. In my message of a year ago Iexpressed my views of the necessity of a canal which would link the twogreat oceans, to which I again invite your consideration. The reasons thenpresented for early action are even stronger now. 

A pleasing incident in the relations of this Government with that of Chileoccurred in the generous assistance given to the war ship Newark when indistress in Chilean waters. Not alone in this way has the friendlydisposition of Chile found expression. That country has acceded to theconvention for the establishment of the Bureau of the American Republics, in which organization every independent State of the continent now shares. 

The exchange of ratifications of a convention for the revival of the UnitedStates and Chilean Claims Commission and for the adjudication of claimsheretofore presented but not determined during the life of the previousCommission has been delayed by reason of the necessity for fresh action bythe Chilean Senate upon the amendments attached to the ratification of thetreaty by the United States Senate. This formality is soon to beaccomplished. 

In view of disturbances in the populous provinces of northern China, whereare many of our citizens, and of the imminence of disorder near the capitaland toward the seaboard, a guard of marines was landed from the Boston andstationed during last winter in the legation compound at Peking. With therestoration of order this protection was withdrawn. 

The interests of our citizens in that vast Empire have not been neglectedduring the past year. Adequate protection has been secured for ourmissionaries and some injuries to their property have been redressed. 

American capital has sought and found various opportunities of competing tocarry out the internal improvements which the Imperial Government is wiselyencouraging, and to develop the natural resources of the Empire. Our tradewith China has continued to grow, and our commercial rights under existingtreaties have been everywhere maintained during the past year, as they willbe in the future. 

The extension of the area open to international foreign settlement atShanghai and the opening of the ports of Nanking, Tsing-tao (Kiao chao), and Ta-lien-wan to foreign trade and settlement will doubtless affordAmerican enterprise additional facilities and new fields, of which it willnot be slow to take advantage. 

In my message to Congress of December 5, 1898, I urged that therecommendation which had been made to the Speaker of the House ofRepresentatives by the Secretary of the Treasury on the 14th of June, 1898, for an appropriation for a commission to study the commercial andindustrial conditions in the Chinese Empire and report as to theopportunities for, and obstacles to, the enlargement of markets in Chinafor the raw products and manufactures of the United States, should receiveat your hands the consideration which its importance and timelinessmerited, but the Congress failed to take action. 

I now renew this recommendation, as the importance of the subject hassteadily grown since it was first submitted to you, and no time should belost in studying for ourselves the resources of this great field forAmerican trade and enterprise. 

The death of President Faure in February last called forth those sincereexpressions of sympathy which befit the relations of two Republics asclosely allied by unbroken historic ties as are the United States andFrance. 

Preparations for the representation of the industries, arts, and productsof the United States at the World's Exposition to be held in Paris nextyear continue on an elaborate and comprehensive scale, thanks to thegenerous appropriation provided by Congress and to the friendly interestthe French Government has shown in furthering a typical exhibit of Americanprogress. 

There has been allotted to the United States a considerable addition ofspace, which, while placing our country in the first rant among exhibitors, does not suffice to meet the increasingly urgent demands of ourmanufacturers. The efforts of the Commissioner General are ably directedtoward a strictly representative display of all that mostcharacteristically marks American achievement in the inventive arts, andmost adequately shows the excellence of our natural productions. 

In this age of keen rivalry among nations for mastery in commerce, thedoctrine of evolution and the rule of the survival of the fittest must beas inexorable in their operation as they are positive in the results theybring about. The place won in the struggle by an industrial people can onlybe held by unrelaxed endeavor and constant advance in achievement. Thepresent extraordinary impetus in every line of American exportation and theastounding increase in the volume and value of our share in the world'smarkets may not be attributed to accidental conditions. 

The reasons are not far to seek. They lie deep in our national characterand find expression year by year in every branch of handicraft, in everynew device whereby the materials we so abundantly produce are subdued tothe artisan's will and made to yield the largest, most practical, and mostbeneficial return. The American exhibit at Paris should, and I am confidentwill, be an open volume, whose lessons of skillfully directed endeavor, unfaltering energy, and consummate performance may be read by all on everypage, thus spreading abroad a clearer knowledge of the worth of ourproductions and the justice of our claim to an important place in the martsof the world. To accomplish this by judicious selection, by recognition ofparamount merit in whatever walk of trade or manufacture it may appear, andby orderly classification and attractive installation is the task of ourCommission. 

The United States Government building is approaching completion, and noeffort will be spared to make it worthy, in beauty of architectural planand in completeness of display, to represent our nation. It has beensuggested that a permanent building of similar or appropriate design beerected on a convenient site, already given by the municipality, near theexposition grounds, to serve in commemoration of the part taken by thiscountry in this great enterprise, as an American National Institute, forour countrymen resorting to Paris for study. 

I am informed by our Commissioner-General that we shall have in theAmerican sections at Paris over 7, 000 exhibitors, from every State ill ourcountry, a number ten times as great as those which were represented atVienna in 1873, six times as many as those in Paris in 1878, and four timesas many as those who exhibited in Paris in 1889. This statement does notinclude the exhibits from either Cuba, Puerto Rico, or Hawaii, for whicharrangements have been made. 

A number of important international congresses on special topics affectingpublic interests are proposed to be held in Paris next summer in connectionwith the exposition. Effort will be made to have the several technicalbranches of our administration efficiently represented at thoseconferences, each in its special line, and to procure the largest possibleconcourse of State representatives, particularly at the Congresses ofPublic Charity and Medicine. 

Our relations with Germany continue to be most cordial. The increasingintimacy of direct association has been marked during the year by thegranting permission in April for the landing on our shores of a cable fromBorkum Emden, on the North Sea, by way of the Azores, and also by theconclusion on September 2 of a Parcels Post Convention with the GermanEmpire. In all that promises closer relations of intercourse and commerceand a better understanding between two races having so many traits incommon, Germany can be assured of the most cordial cooperation of thisGovernment and people. We may be rivals in many material paths, but ourrivalry should be generous and open, ever aiming toward the attainment oflarger results and the mutually beneficial advancement of each in the lineof its especial adaptabilities. 

The several governments of the Empire seem reluctant to admit the naturalexcellence of our food productions and to accept the evidence we constantlytender of the care with which their purity is guarded by rigid inspectionfrom the farm, through the slaughterhouse and the packing establishments, to the port of shipment. Our system of control over exported food staplesinvites examination from any quarter and challenges respect by itsefficient thoroughness. 

It is to be hoped that in time the two Governments will act in commonaccord toward the realization of their common purpose to safeguard thepublic health and to insure the purity and wholesomeness of all foodproducts imported by either country from the other. Were the Congress toauthorize an invitation to Germany, in connection with the pendingreciprocity negotiations, for the constitution of a joint commission ofscientific experts and practical men of affairs to conduct a searchinginvestigation of food production and exportation in both countries andreport to their respective legislatures for the adoption of such remedialmeasures as they might recommend for either, the way might be opened forthe desirable result indicated. 

Efforts to obtain for American life insurance companies a full hearing asto their business operations in Prussia have, after several years ofpatient representation, happily succeeded, and one of the most importantAmerican companies has been granted a concession to continue business inthat Kingdom. 

I am also glad to announce that the German insurance companies have beenreadmitted by the superintendent of insurance to do business in the Stateof New York. 

Subsequent to the exchange of our peace treaty with Spain, Germany acquiredthe Caroline Islands by purchase, paying therefore $5, 000, 000. Assuranceshave been received from the German Government that the rights of Americanmissionaries and traders there will be considerately observed. 

In my last annual message I referred to the pending negotiations with GreatBritain in respect to the Dominion of Canada. By means of an executiveagreement, a joint High Commission had been created for the purpose ofadjusting all unsettled questions between the United States and Canada, embracing twelve subjects, among which were the questions of the fur seals, the fisheries of the coast and contiguous inland waters, the Alaskanboundary, the transit of merchandise in bond, the alien labor laws, miningrights, reciprocity in trade, revision of the agreement respecting navalvessels in the Great Lakes, a more complete marking of parts of theboundary, provision for the conveyance of criminals, and for wrecking andsalvage. 

Much progress had been made by the Commission toward the adjustment of manyof these questions, when it became apparent that an irreconcilabledifference of views was entertained respecting the delimitation of theAlaskan, boundary. In the failure of an agreement as to the meaning ofArticles III and IV of the treaty of 1825 between Russia and Great Britain, which defined the boundary between Alaska and Canada, the AmericanCommissioners proposed that the subject of the boundary be laid aside, andthat the remaining questions of difference be proceeded with, some of whichwere so far advanced as to assure the probability of a settlement. Thisbeing declined by the British Commissioners, an adjournment was taken untilthe boundary should be adjusted by the two Governments. The subject hasbeen receiving the careful attention which its importance demands, with theresult that a modus vivendi for provisional demarcations in the regionabout the head of Lynn Canal has, been agreed upon; and it is hoped thatthe negotiations now in progress between the two Governments will end in anagreement for the establishment and delimitation of a permanent boundary. 

Apart from these questions growing out of our relationship with ournorthern neighbor, the most friendly disposition and ready agreement havemarked the discussion of numerous matters arising in the vast and intimateintercourse of the United States with Great Britain. 

This Government has maintained an attitude of neutrality in the unfortunatecontest between Great Britain and the Boer States of Africa. We haveremained faithful to the precept of avoiding entangling alliances as toaffairs not of our direct concern. Had circumstances suggested that theparties to the quarrel would have welcomed any kindly expression of thehope of the American people that war might be averted, good offices wouldhave been gladly tendered. The United States representative at Pretoria wasearly instructed to see that all neutral American interests be respected bythe combatants. This has been an easy task in view of the positivedeclarations of both British and Boer authorities that the personal andproperty rights of our citizens should be observed. 

Upon the withdrawal of the British agent from Pretoria the United Statesconsul was authorized, upon the request of the British Government and withthe assent of the South African and Orange Free State Governments, toexercise the customary good offices of a neutral for the care of Britishinterests. In the discharge of this function, I am happy to say thatabundant opportunity has been afforded to show the impartiality of thisGovernment toward both the combatants. 

For the fourth time in the present decade, question has arisen with theGovernment of Italy in regard to the lynching of Italian subjects. Thelatest of these deplorable events occurred at Tallulah, Louisiana, wherebyfive unfortunates of Italian origin were taken from jail and hanged. 

The authorities of the State and a representative of the Italian Embassyhaving separately investigated the occurrence, with discrepant results, particularly as to the alleged citizenship of the victims, and it notappearing that the State had been able to discover and punish the violatorsof the law, an independent investigation has been set on foot, through theagency of the Department of State, and is still in progress. The resultwill enable the Executive to treat the question with the Government ofItaly in a spirit of fairness and justice. A satisfactory solution willdoubtless be reached. 

The recurrence of these distressing manifestations of blind mob furydirected at dependents or natives of a foreign country suggests that thecontingency has arisen for action by Congress in the direction ofconferring upon the Federal courts jurisdiction in this class ofinternational cases where the ultimate responsibility of the FederalGovernment may be involved. The suggestion is not new. In his annualmessage of December 9, 1891, my predecessor, President Harrison, said: Itwould, I believe, be entirely competent for Congress to make offensesagainst the treaty rights of foreigners domiciled in the United Statescognizable in the Federal courts. This has not, however, been done, and theFederal officers and courts have no power in such cases to intervene eitherfor the protection of a foreign citizen or for the punishment of hisslayers. It seems to me to follow, in this state of the law, that theofficers of the State charged with police and judicial powers in such casesmust, in the consideration of international questions growing out of suchincidents, be regarded in such sense as Federal agents as to make thisGovernment answerable for their acts in cases where it would be answerableif the United States had used its constitutional power to define and punishcrimes against treaty rights. A bill to provide for the punishment ofviolations of treaty rights of aliens was introduced in the Senate March 1, 1892, and reported favorably March 30. Having doubtless in view thelanguage of that part of Article III of the treaty of February 26, 1871, between the United States and Italy, which stipulates that "The citizensof each of the high contracting parties shall receive, in the States andTerritories of the other, most constant protection and security for theirpersons and property, and shall enjoy in this respect the same rights andprivileges as are or shall be granted to the natives, on their submittingthemselves to the conditions imposed upon the natives, " the bill sointroduced and reported provided that any act committed in any State orTerritory of the United States in violation of the rights of a citizen orsubject of a foreign country secured to such citizen or subject by treatybetween the United States and such foreign country and constituting a crimeunder the laws of the State or Territory shall constitute a like crimeagainst the United States and be cognizable in the Federal courts. Noaction was taken by Congress in the matter. 

I earnestly recommend that the subject be taken up anew and acted uponduring the present session. The necessity for some such provisionabundantly appears. Precedent for constituting a Federal jurisdiction incriminal cases where aliens are sufferers is rationally deducible from theexisting statute, which gives to the district and circuit courts of theUnited States jurisdiction of civil suits brought by aliens where theamount involved exceeds a certain sum. If such jealous solicitude be shownfor alien rights in cases of merely civil and pecuniary import, how muchgreater should be the public duty to take cognizance of matters affectingthe lives and the rights of aliens tinder the settled principles ofinternational law no less than under treaty stipulation, in cases of suchtranscendent wrong-doing as mob murder, especially when experience hasshown that local justice is too often helpless to punish the offenders. 

After many years of endeavor on the part of this Government to that end theItalian Government has consented to enter into negotiations for anaturalization convention, having for one of its objects the regulation ofthe status of Italians (except those of an age for active military service)who, having been naturalized in the United States, may revisit Italy. It ishoped that with the mutually conciliatory spirit displayed a successfulconclusion will be reached. 

The treaty of commerce and navigation between the United States and Japanon November 22, 1894, took effect in accordance with the terms of its XIXthArticle on the 17th of July last, simultaneously with the enforcement oflike treaties with the other powers, except France, whose convention didnot go into operation until August 4, the United States being, however, granted up to that date all the privileges and rights accorded to Frenchcitizens under the old French treaty. By this notable conventional reformJapan's position as a fully independent sovereign power is assured, controlbeing gained of taxation, customs revenues, judicial administration, coasting trade, and all other domestic functions of government, and foreignextra-territorial rights being renounced. 

Comprehensive codes of civil and criminal procedure according to westernmethods, public instruction, patents and copyrights, municipaladministration, including jurisdiction over the former foreign settlements, customs tariffs and procedure, public health, and other administrativemeasures have been proclaimed. The working of the new system has given riseto no material complaints on the part of the American citizens orinterests, a circumstance which attests the ripe consideration with whichthe change has been prepared. 

Valuable assistance was rendered by the Japanese authorities to the UnitedStates transport ship Morgan City while stranded at Kobe. Permission hasbeen granted to land and pasture army horses at Japanese ports of call onthe way to the Philippine Islands. These kindly evidences of good will arehighly appreciated. 

The Japanese Government has shown a lively interest in the proposition ofthe Pacific Cable Company to add to its projected cable lines to Hawaii, Guam, and the Philippines a branch connection with the coast of Japan. Itwould be a gratifying consummation were the utility of the contemplatedscheme enhanced by bringing Japan and the United States into directtelegraphic relation. 

Without repeating the observations of my special message of February 10, 1899, concerning the necessity of a cable to Manila. I respectfully inviteattention to it. 

I recommend that, in case the Congress should not take measures to bringabout this result by direct action of the Government, the PostmasterGeneral be authorized to invite competitive bids for the establishment of acable; the company making the best responsible bid to be awarded thecontract; the successful company to give ample bonds to insure thecompletion of the work within a reasonable time. 

The year has been marked by constant increase in the intimacy of ourrelations with Mexico and in the magnitude of mutually advantageousinterchanges. This Government has omitted no opportunity to show its strongdesire to develop and perpetuate the ties of cordiality now so long happilyunbroken. 

Following the termination on January 20, 1899, by Mexico of the conventionof extradition of December 11, 1861, a new treaty more in accordance withthe ascertained needs of both countries was signed February 22, 1899, andexchanged in the City of Mexico on the 22d of April last. Its operationthus far has been effective and satisfactory. A recent case has served totest the application of its IVth Article, which provides that neither partyshall be bound to deliver up its own citizens, but that the executiveauthority of each shall have the power to deliver them up if in itsdiscretion it be deemed proper to do so. 

The extradition of Mrs. Mattie Rich, a citizen of the United States, charged with homicide committed in Mexico, was after mature considerationdirected by me in the conviction that the ends of justice would be therebysubserved. Similar action, on appropriate occasion, by the MexicanExecutive will not only tend to accomplish the desire of both Governmentsthat grave crimes go not unpunished, but also to repress lawlessness alongthe border of the two countries. The new treaty stipulates that neitherGovernment shall assume jurisdiction in the punishment of crimes committedexclusively within the territory of the other. This will obviate in futurethe embarrassing controversies which have heretofore arisen throughMexico's assertion of a claim to try and punish an American citizen for anoffense committed within the jurisdiction of the United States. 

The International Water Boundary Commission, organized by the convention ofMarch 1, 1889, for the adjustment of questions affecting the Rio Grandefrontier, has not yet completed its labors. A further extension of its termfor one year, until December 24, 1899, was effected by a convention signedDecember z, 1898, and exchanged and proclaimed in February last. 

An invitation extended to the President of Mexico to visit Chicago inOctober, on the occasion of laying the corner stone of the United StatesGovernment building in that city, was cordially accepted by him, with thenecessary consent of the Mexican Congress, but the illness of a member ofhis family prevented his attendance. The Minister of Foreign Relations, however, came as the personal representative of President Diaz, and in thathigh character was duly honored. 

Claims growing out of the seizure of American sealing vessels in Bering Seahave been under discussion with the Government of Russia for several years, with the recent happy result of an agreement to submit them to the decisionof a single arbitrator. By this act Russia affords proof of her adherenceto the beneficent principle of arbitration which her plenipotentiariesconspicuously favored at The Hague Disarmament Conference when it wasadvocated by the representatives of the United States. 

A suggestion for a permanent exposition of our products and manufactures inRussia, although not yet fully shaped, has been so cordially welcomed bythe Imperial Government that it may not inaptly take a fitting place inwhatever legislation the Congress may adopt looking to enlargement of ourcommercial opportunities abroad. 

Important events have occurred in the Samoan Islands. The election, according to the laws and customs of Samoa, of a successor to the lateKing, Malietoa Laupepa, developed a contest as to the validity of theresult, which issue, by the terms of the General Act, was to be decided bythe Chief justice. Upon his rendering a judgment in favor of Malietoa Tanu, the rival chief, Mataafa, took up arms. The active intervention of Americanand British war ships became imperative to restore order, at the cost ofsanguinary encounters. In this emergency a joint commission ofrepresentatives of the United States, Germany, and Great Britain was sentto Samoa to investigate the situation and provide a temporary remedy. Byits active efforts a peaceful solution was reached for the time being, thekingship being abolished and a provisional government established. Recommendations unanimously made by the commission for a permanentadjustment of the Samoan question were taken under consideration by thethree powers parties to the General Act. But the more they were examinedthe more evident it became that a radical change was necessary in therelations of the powers to Samoa. 

The inconveniences and possible perils of the tripartite scheme ofsupervision and control in the Samoan group by powers having littleinterest in common in that quarter beyond commercial rivalry had been oncemore emphasized by the recent events. The suggested remedy of the jointCommission, like the scheme it aimed to replace amounted to what has beenstyled a tridominium, being the exercise of the functions of sovereignty byan unanimous agreement of three powers. The situation had become far moreintricate and embarrassing from every point of view than it was when mypredecessor, in 1894, summed up its perplexities and condemned theparticipation in it of the United States. 

The arrangement under which Samoa was administered had proved impracticableand unacceptable to all the powers concerned. To withdraw from theagreement and abandon the islands to Germany and Great Britain would not becompatible with our interests in the archipelago. To relinquish our rightsin the harbor of Pago Pago, the best anchorage in the Pacific, theoccupancy of which had been leased to the United States in 1878 by thefirst foreign treaty ever concluded by Samoa, was not to be thought ofeither as regards the needs of our Navy or the interests of our growingcommerce with the East. We could not have considered any proposition forthe abrogation of the tripartite control which did not confirm us in allour rights and safeguard all our national interests in the islands. 

Our views commended themselves to the other powers. A satisfactoryarrangement was concluded between the Governments of Germany and ofEngland, by virtue of which England retired from Samoa in view ofcompensations in other directions, and both powers renounced in favor ofthe United States all their rights and claims over and in respect to thatportion of the group lying to the east of the one hundred and seventy-firstdegree of west longitude, embracing the islands of Tutuila, Ofoo, Olosenga, and Manua. I transmit to the Senate, for its constitutional action thereon, a convention, which besides the provisions above mentioned also guaranteesus the same privileges and conditions in respect to commerce and commercialvessels in all of the islands of Samoa as those possessed by Germany. 

Claims have been preferred by white residents of Samoa on account ofinjuries alleged to have been suffered through the acts of the treatyGovernments in putting down the late disturbances. A convention has beenmade between the three powers for the investigation and settlement of theseclaims by a neutral arbitrator, to which the attention of the Senate willbe invited. 

My annual message of last year was necessarily devoted, in great part to aconsideration of the Spanish War and of the results it wrought and theconditions it imposed for the future. I am gratified to announce that thetreaty of peace has restored friendly relations between the two powers. Effect has been given to its most important provisions. The evacuation ofPuerto Rico having already been accomplished on the XIVth of October, 1898, nothing remained necessary there but to continue the provisional militarycontrol of the island until the Congress should enact a suitable governmentfor the ceded territory. Of the character and scope of the measures to thatend I shall treat in another part of this message. 

The withdrawal of the authority of Spain from the island of Cuba waseffected by the 1st of January, so that the full re-establishment of peacefound the relinquished territory held by us in trust for the inhabitants, maintaining, under the direction of the Executive, such government andcontrol therein as should conserve public order, restore the productiveconditions of peace so long disturbed by the instability and disorder whichprevailed for the greater part of the preceding three decades, and build upthat tranquil development of the domestic state whereby alone can berealized the high purpose, as proclaimed in the joint resolution adopted bythe Congress on the 19th of April, 1898, by which the United Statesdisclaimed any disposition or intention to exercise sovereignty, jurisdiction, or control over Cuba, except for the pacification thereof, and asserted its determination when that was accomplished to leave thegovernment and control of the island to its people. The pledge contained inthis resolution is of the highest honorable obligation and must be sacredlykept. 

I believe that substantial progress has been made in this direction. Allthe administrative measures adopted in Cuba have aimed to fit it for aregenerated existence by enforcing the supremacy of law and justice; byplacing wherever practicable the machinery of administration in the handsof the inhabitants; by instituting needed sanitary reforms; by spreadingeducation; by fostering industry and trade; by inculcating public morality, and, in short, by taking every rational step to aid the Cuban people toattain to that plane of self-conscious respect and self-reliant unity whichfits an enlightened community for self-government within its own sphere, while enabling it to fulfill all outward obligation. 

This nation has assumed before the world a grave responsibility for thefuture good government of Cuba. We have accepted a trust the fulfillment ofwhich calls for the sternest integrity of purpose and the exercise of thehighest wisdom. The new Cuba yet to arise from the ashes of the past mustneeds be bound to us by ties of singular intimacy and strength if itsenduring welfare is to be assured. Whether those ties shall be organic orconventional, the destinies of Cuba are in some rightful form and mannerirrevocably linked with our own, but how and how far is for the future todetermine in the ripeness of events. Whatever be the outcome, we must seeto it that free Cuba be a reality, not a name, a perfect entity, not ahasty experiment bearing within itself the elements of failure. Ourmission, to accomplish which we took up the wager of battle, is not to befulfilled by turning adrift any loosely framed commonwealth to face thevicissitudes which too often attend weaker States whose natural wealth andabundant resources are offset by the incongruities of their politicalorganization and the recurring occasions for internal rivalries to saptheir strength and dissipate their energies. The greatest blessing whichcan come to Cuba is the restoration of her agricultural and industrialprosperity, which will give employment to idle men and re-establish thepursuits of peace. This is her chief and immediate need. 

On the 19th of August last an order was made for the taking of the censusin the island, to be completed on the 30th of November. By the treaty ofpeace the Spanish people on the island have until April 11, 1900, to electwhether they will remain citizens of Spain or become citizens of Cuba. Until then it cannot be definitely ascertained who shall be entitled toparticipate in the formation of the government of Cuba. By that time theresults of the census will have been tabulated and we shall proceed toprovide for elections which will commit the municipal governments of theisland to the officers elected by the people. The experience thus acquiredwill prove of great value in the formation of a representative conventionof the people to draft a constitution and establish a general system ofindependent government for the island. In the meantime and so long as weexercise control over the island the products of Cuba should have a marketin the United States on as good terms and with as favorable rates of dutyas are given to the West India Islands under treaties of reciprocity whichshall be made. 

For the relief of the distressed in the island of Cuba the War Departmenthas issued supplies to destitute persons through the officers of the Army, which have amounted to 5, 493, 000 rations, at a cost Of $1, 417, 554. 07. 

To promote the disarmament of the Cuban volunteer army, and in the interestof public peace and the welfare of the people, the sum Of $75 was paid toeach Cuban soldier borne upon the authenticated rolls, on condition that heshould deposit his arms with the authorities designated by the UnitedStates. The sum thus disbursed aggregated $2, 547, 750, which was paid fromthe emergency fund provided by the act of January 5, 1899, for thatpurpose. 

Out of the Cuban island revenues during the six months ending June 30, 1899, $1, 712, 014. 20 was expended for sanitation, $293, 881. 70 for charitiesand hospitals, and $88, 944. 03 for aid to the destitute. 

Following the exchange of ratifications of the treaty of peace the twoGovernments accredited ministers to each other, Spain sending to Washingtonthe Duke of Arcos, an eminent diplomatist, previously stationed in Mexico, while the United States transferred to Madrid Hon. Bellamy Storer, itsminister at Brussels. This was followed by the respective appointment ofconsuls, thereby fully resuming the relations interrupted by the war. Inaddition to its consular representation in the United States, the SpanishGovernment has appointed consuls for Cuba, who have been provisionallyrecognized during the military administration of the affairs of thatisland. 

Judicial intercourse between the courts of Cuba and Puerto Rico and ofSpain has been established, as provided by the treaty of peace. The Cubanpolitical prisoners in Spanish penal stations have been and are beingreleased and returned to their homes, in accordance with Article VI of thetreaty. Negotiations are about to be had for defining the conventionalrelations between the two countries, which fell into abeyance by reason ofthe war. I trust that these will include a favorable arrangement forcommercial reciprocity under the terms of sections 3 and 4 of the currenttariff act. In these, as in all matters of international concern, no effortwill be spared to respond to the good disposition of Spain, and tocultivate in all practicable ways the intimacy which should prevail betweentwo nations whose past history has so often and in so many ways been markedby sincere friendship and by community of interests. 

I would recommend appropriate legislation in order to carry into executionArticle VII of the Treaty of Peace with Spain, by which the United Statesassured the payment of certain claims for indemnity of its citizens againstSpain. 

The United States minister to Turkey continues, under instructions, topress for a money payment in satisfaction of the just claims for injuriessuffered by American citizens in the disorders of several years past andfor wrongs done to them by the Ottoman authorities. Some of these claimsare of many years' standing. This Government is hopeful of a generalagreement in this regard. 

In the Turkish Empire the situation of our citizens remains unsatisfactory. Our efforts during nearly forty years to bring about a convention ofnaturalization seem to be on the brink of final failure through theannounced policy of the Ottoman Porte to refuse recognition of the alienstatus of native Turkish subjects naturalized abroad since 1867. Ourstatutes do not allow this Government to admit any distinction between thetreatment of native and naturalized Americans abroad, so that ceaselesscontroversy arises in cases where persons owing in the eye of internationallaw a dual allegiance are prevented from entering Turkey or are expelledafter entrance. Our law in this regard contrasts with that of the EuropeanStates. The British act, for instance, does not claim effect for thenaturalization of an alien in the event of his return to his nativecountry, unless the change be recognized by the law of that country orstipulated by treaty between it and the naturalizing State. 

The arbitrary treatment, in some instances, of American productions inTurkey has attracted attention of late, notably in regard to our flour. Large shipments by the recently opened direct steamship line to Turkishports have been denied entrance on the score that, although of standardcomposition and unquestioned purity, the flour was pernicious to healthbecause of deficient "elasticity" as indicated by antiquated anduntrustworthy tests. Upon due protest by the American minister, and itappearing that the act was a virtual discrimination against our product, the shipments in question were admitted. In these, as in all instances, wherever occurring, when American products may be subjected in a foreigncountry, upon specious pretexts, to discrimination compared with the likeproducts of another country, this Government will use its earnest effortsto secure fair and equal treatment for its citizens and their goods. Failing this, it will not hesitate to apply whatever corrective may beprovided by the statutes. 

The International Commission of Arbitration, appointed under theAnglo-Venezuelan treaty of 1897, rendered an award on October 3 last, whereby the boundary line between Venezuela and British Guiana isdetermined, thus ending a controversy which has existed for the greaterpart of the century. The award, as to which the arbitrators were unanimous, while not meeting the extreme contention of either party, gives to GreatBritain a large share of the interior territory in dispute and to Venezuelathe entire mouth of the Orinoco, including Barima Point and the Caribbeanlittoral for some distance to the eastward. The decision appears to beequally satisfactory to both parties. 

Venezuela has once more undergone a revolution. The insurgents, underGeneral Castro, after a sanguinary engagement in which they suffered muchloss, rallied in the mountainous interior and advanced toward the capital. The bulk of the army having sided with the movement, President Andradequitted Caracas, where General Castro set up a provisional government withwhich our minister and the representatives of other powers entered intodiplomatic relations on the 20th of November, 1899. 

The fourth section of the Tariff Act approved July 24, 1897, appears toprovide only for commercial treaties which should be entered into by thePresident and also ratified by the Senate within two years from itspassage. Owing to delays inevitable in negotiations of this nature, none ofthe treaties initiated under that section could be concluded in time forratification by the Senate prior to its adjournment on the 4th of Marchlast. Some of the pending negotiations, however, were near conclusion atthat time, and the resulting conventions have since been signed by theplenipotentiaries. Others, within both the third and fourth sections of theact, are still under consideration. Acting under the constitutional powerof the Executive in respect to treaties, I have deemed it my duty, whileobserving the limitations of concession provided by the fourth section, tobring to a conclusion all pending negotiations, and submit them to theSenate for its advice and consent. 

Conventions of reciprocity have been signed during the Congressional recesswith Great Britain for the respective colonies of British Guiana, Barbados, Bermuda, Jamaica, and Turks and Caicos Islands, and with the Republic ofNicaragua. 

Important reciprocal conventions have also been concluded with France andwith the Argentine Republic. 

In my last annual message the progress noted in the work of the diplomaticand consular officers in collecting information as to the industries andcommerce of other countries, and in the care and promptitude with whichtheir reports are printed and distributed, has continued during the pastyear, with increasingly valuable results in suggesting new sources ofdemand for American products and in pointing out the obstacles still to beovercome in facilitating the remarkable expansion of our foreign trade. Itwill doubtless be gratifying to Congress to learn that the various agenciesof the Department of State are co-operating in these endeavors with a zealand effectiveness which are not only receiving the cordial recognition ofour business interests, but are exciting the emulation of otherGovernments. In any rearrangement of the great and complicated work ofobtaining official data of an economic character which Congress mayundertake it is most important, in my judgment, that the results alreadysecured by the efforts of the Department of State should be carefullyconsidered with a view to a judicious development and increased utility toour export trade. 

The interest taken by the various States forming the International Union ofAmerican Republics in the work of its organic bureau is evidenced by thefact that for the first time since its creation in 1890 all the Republicsof South and Central America are now represented in it. 

The unanimous recommendation of the International American Conference, providing for the International Union of American Republics, stated that itshould continue in force during a term of ten years from the date of itsorganization, and no country becoming a member of the union should cease tobe a member until the end of said period of ten years, and unless twelvemonths before the expiration of said period a majority of the members ofthe union had given to the Secretary of State of the United States officialnotice of their wish to terminate the union at the end of its first period, that the union should continue to be maintained for another period of tenyears, and thereafter, under the same conditions, for successive periods often years each. 

The period for notification expired on July 14, 1899, without any of themembers having given the necessary notice of withdrawal. Its maintenance istherefore assured for the next ten years. In view of this fact and of thenumerous questions of general interest and common benefit to all of theRepublics of America, some of which were considered by the firstInternational American Conference, but not finally settled, and otherswhich have since then grown to importance, it would seem expedient that thevarious Republics constituting the Union should be invited to hold at anearly date another conference in the capital of one of the countries otherthan the United States, which has already enjoyed this honor. 

The purely international character of the work being done by the bureau andthe appreciation of its value are further emphasized by the activeco-operation which the various Governments of the Latin. American Republicsand their diplomatic representatives in this capital are now exhibiting andthe zealous endeavors they are making to extend its field of usefulness, topromote through it commercial intercourse, and strengthen the bonds ofamity and confidence between its various members and the nations of thiscontinent. 

The act to encourage the holding of the Pan-American Exposition on theNiagara frontier, within the county of Erie or Niagara, in the State of NewYork, in the year 1901, was approved on March 3, 1899. 

This exposition, which will be held in the city of Buffalo, in the nearvicinity of the great Niagara cataract, and within a day's journey of whichreside 40, 000, 000 Of our people, will be confined entirely to the WesternHemisphere. Satisfactory assurances have already been given by thediplomatic representatives of Great Britain, Mexico, the Central and SouthAmerican Republics, and most of the States of the United States that thesecountries and States will make an unique, interesting, and instructiveexhibit, peculiarly illustrative of their material progress during thecentury which is about to close. 

The law provides an appropriation Of $500, 000 for the purpose of making anexhibit at the exposition by the Government of the United States from itsExecutive Departments and from the Smithsonian Institution and NationalMuseum, the United States Commission of Fish and Fisheries, the Departmentof Labor, and the Bureau of the American Republics. To secure a completeand harmonious arrangement of this Government exhibit a board of managementhas already been created, and charged with the selection, purchase, preparation, transportation, arrangement, and safe-keeping of the articlesand materials to be exhibited. This board has been organized and hasalready entered upon the performance of its duties, as provided for by thelaw. 

I have every reason to hope and believe that this exposition will tend morefirmly to cement the cordial relations between the nations on thiscontinent. 

In accordance with an act of Congress approved December 21, 1898, and underthe auspices of the Philadelphia Commercial Museum, a most interesting andvaluable exposition of products and manufactures especially adapted toexport trade was held in Philadelphia from the 14th of September to the 1stof December, 1899. The representative character of the exhibits and thewidespread interest manifested in the special objects of the undertakingafford renewed encouragement to those who look confidently to the steadygrowth of our enlarged exportation of manufactured goods, which has beenthe most remarkable fact in the economic development of the United Statesin recent years. A feature of this exposition which is likely to become ofpermanent and increasing utility to our industries is the collection ofsamples of merchandise produced in various countries with special referenceto particular markets, providing practical object lessons to United Statesmanufacturers as to qualities, styles, and prices of goods such as meet thespecial demands of consumers and may be exported with advantage. 

In connection with the exposition an International Commercial Congress washeld, upon the invitation of the Philadelphia Commercial Museum, transmitted by the Department of State to the various foreign Governments, for an exchange of information and opinions with the view to the promotionof international trade. This invitation met with general and cordialacceptance, and the Congress, which began its sessions at the exposition onthe 13th of October proved to be of great practical importance, from thefact that it developed a general recognition of the interdependence ofnations in trade and a most gratifying spirit of accommodation withreference to the gradual removal of existing impediments to reciprocalrelations, without injury to the industrial interests of either party. 

In response to the invitation of His Majesty, the Emperor of Russia, delegates from twenty-six countries were assembled at The Hague on the 18thof May, as members of a conference in the interest of peace. The commissionfrom the United States consisted of the Hon. Andrew D. White, the Hon. SethLow, the Hon. Stanford Newel, Captain Alfred T. Mahan, of the United StatesNavy, Captain William Crozier, of the United States Army, and the Hon. Frederick W. Holls, secretary. The occasion seemed to be opportune for theserious consideration of a plan for the pacific adjustment of internationaldifferences, a subject in which the American people have been deeplyinterested for many years, and a definite project for a permanentinternational tribunal was included in the instructions to the delegates ofthe United States. 

The final act of the conference includes conventions upon the ameliorationof the laws and customs of war on land, the adaptation to maritime warfareof the principles of the Geneva Convention of 1864, and the extension ofjudicial methods to international cases. The Convention for the PacificSettlement of International Conflicts embodies the leading features of theAmerican plan, with such modifications as were rendered necessary by thegreat diversity of views and interests represented by the delegates. Thefour titles of the convention provide for the maintenance of general peace, the exercise of good offices and mediation, the formation of commissions ofinquiry, and international arbitration. 

The mediation provided for by the convention is purely voluntary andadvisory, and is intended to avoid any invasion or limitation of thesovereign rights of the adhering States. The commissions of inquiryproposed consists of delegations to be specifically constituted forparticular purposes by means of conventions between the contesting parties, having for their object the clear understanding of internationaldifferences before resorting to the use of force. The provision forarbitration contemplates the formation of a permanent tribunal before whichdisputed cases may be brought for settlement by the mutual consent of thelitigants in each separate case. The advantages of such a permanenttribunal over impromptu commissions of arbitration are conceived to be theactual existence of a competent court, prepared to administer justice, thegreater economy resulting from a well-devised system, and the accumulatedjudicial skill and experience which such a tribunal would soon possess. 

While earnestly promoting the idea of establishing a permanentinternational tribunal, the delegation of the United States was notunmindful of the inconveniences which might arise from an obtrusiveexercise of mediation, and in signing the convention carefully guarded thehistoric position of the United States by the following declaration:Nothing contained in this convention shall be so construed as to requirethe United States of America to depart from its traditional policy of notintruding upon, interfering with, or entangling itself in the politicalquestions or policy or internal administration of any foreign state; norshall anything contained in the said convention be construed to imply arelinquishment by the United. States of America of its traditional attitudetoward purely American questions. Thus interpreted, the Convention for thePacific Settlement of International Conflicts may be regarded as realizingthe earnest desire of great numbers of American citizens, whose deep senseof justice, expressed in numerous resolutions and memorials, has urged themto labor for this noble achievement. The general character of thisconvention, already signed by the delegates of more than twenty sovereignStates, further commends it to the favorable action of the Senate of theUnited States, whose ratification it still awaits. 

Since my last annual message, and in obedience to the acts of the Congressof April 22 and 26, 1898, the remaining volunteer force enlisted for theSpanish War, consisting Of 34, 834 regulars and 110, 202 volunteers, withover 5, 000 volunteer officers, has been discharged from the militaryservice. Of the volunteers, 667 officers and 14, 831 men were serving in thePhilippines, and 1, 650 of the regulars, who were entitled to be musteredout after the ratification of the treaty of peace. They voluntarilyremained at the front until their places could be filled by new troops. They were returned home in the order in which they went to Manila, and arenow all of them out of the service and in the ranks of citizenship. Irecommend that the Congress provide a special medal of honor for thevolunteers, regulars, sailors, and marines on duty in the Philippines whovoluntarily remained in the service after their terms of enlistment hadexpired. 

By the act of March 2, 1899, Congress gave authority to increase theRegular Army to a maximum not exceeding 65, 000 enlisted men, and to enlista force of 5, 000 volunteers, to be recruited from the country at large. Byvirtue of this authority the Regular Army has been increased to the numberof 61, 999 enlisted men and 2, 248 officers, and new volunteer regiments havebeen organized aggregating 33, 050 enlisted men and 1, 524 officers. Two ofthese volunteer regiments are made up of colored men, with colored lineofficers. The new troops to take the places of those returning from thePhilippines have been transported to Manila to the number of 581 officersand 26, 322 enlisted men of the Regular Army and 594 officers and 15, 388enlisted men of the new volunteer force, while 504 officers and 14, 119 menof the volunteer force are on the ocean en route to Manila. 

The force now in Manila consists Of 905 officers and 30, 578 regulars, and594 officers and 15, 388 of the volunteers, making an aggregate of 1, 499officers and 45, 966 men. When the troops now under orders shall reachManila the force in the archipelago will comprise 2, 051 officers and 63, 483men. The muster out of the great volunteer army organized for the SpanishWar and the creation of a new army, the transportation from Manila to SanFrancisco of those entitled to discharge and the transportation of the newtroops to take their places have been a work of great magnitude well andably done, for which too much credit cannot be given the War Department. 

During the past year we have reduced our force in Cuba and Puerto Rico, InCuba we now have 334 officers and 10, 796 enlisted men; In Puerto Rico, 87officers and 2, 855 enlisted men and a battalion of 400 men composed ofnative Puerto Ricans; while stationed throughout the United States are 910officers and 17, 317 men, and in Hawaii 12 officers and 453 enlisted men. 

The operations of the Army are fully presented in the report of theSecretary of War. I cannot withhold from officers and men the highestcommendation for their soldierly conduct in trying situations, theirwilling sacrifices for their country, and the integrity and ability withwhich they have performed unusual and difficult duties in our islandpossessions. 

In the organization of the volunteer regiments authorized by the act ofMarch 2, 1899, it was found that no provision had been made for chaplains. This omission was doubtless from inadvertence. I recommend the earlyauthorization for the appointment of one chaplain for each of saidregiments. These regiments are now in the Philippines, and it is importantthat immediate action be had. 

In restoring peaceful conditions, orderly rule, and civic progress in Cuba, Puerto Rico, and, so far as practicable, in the Philippines, therehabilitation of the postal service has been an essential and importantpart of the work. It became necessary to provide mail facilities both forour forces of occupation and for the native population. To meet thisrequirement has involved a substantial reconstruction. The existing systemswere so fragmentary, defective, and inadequate that a new and comprehensiveorganization had to be created. American trained officials have beenassigned to the directing and executive positions, while natives have beenchiefly employed in making up the body of the force. In working out thisplan the merit rule has been rigorously and faithfully applied. 

The appointment of Director-General of Posts of Cuba was given to an expertwho had been Chief Post-Office Inspector and Assistant Postmaster-General, and who united large experience with administrative capacity. For thepostmastership at Havana the range of skilled and available men wasscanned, and the choice fell upon one who had been twenty years in theservice as deputy postmaster and postmaster of a large city. This principlegoverned and determined the selection of the American officials sent notonly to Cuba, but to Puerto Rico and the Philippines, and they wereinstructed to apply it so far as practicable in the employment of thenatives as minor postmasters and clerks. The postal system in Cuba, thoughremaining under the general guidance of the Postmaster-General, was madeessentially independent. It was felt that it should not be a burden uponthe postal service of the United States, and provision was made that anydeficit in the postal revenue should be a charge upon the general revenuesof the island. 

Though Puerto Rico and the Philippines hold a different relation to theUnited States, yet, for convenience of administration, the same principleof an autonomous system has been extended to them. The development of theservice in all of the islands has been rapid and successful. It has movedforward on American lines, with free delivery, money order, and registrysystems, and has given the people mail facilities far greater and morereliable than any they have ever before enjoyed. It is thus not only avital agency of industrial, social, and business progress, but an importantinfluence in diffusing a just understanding of the true spirit andcharacter of American administration. 

The domestic postal service continues to grow with extraordinary rapidity. The expenditures and the revenues will each exceed $100, 000, 000 during thecurrent year. Fortunately, since the revival of prosperous times therevenues have grown much faster than the expenditures, and there is everyindication that a short period will witness the obliteration of the annualdeficit. In this connection the report of the Postmaster-General embodies astatement of some evils which have grown up outside of the contemplation oflaw in the treatment of some classes of mail matter which wrongly exercisethe privilege of the pound rate, and shows that if this matter had beenproperly classified and had paid the rate which it should have paid, instead of a postal deficit for the last fiscal year of $6, 610, 000, therewould have been on one basis a surplus of $17, 637, 570, and on another Of$5, 733, 836. The reform thus suggested, in the opinion of thePostmaster-General, would not only put the postal service at once on aself-sustaining basis, but would permit great and valuable improvements, and I commend the subject to the consideration of the Congress. 

The Navy has maintained the spirit and high efficiency which have alwayscharacterized that service, and has lost none of the gallantry in heroicaction which has signalized its brilliant and glorious past. The Nation hasequal pride in its early and later achievements. Its habitual readiness forevery emergency has won the confidence and admiration of the country. Thepeople are interested in the continued preparation and prestige of the Navyand will justify liberal appropriations for its maintenance andimprovement. The officers have shown peculiar adaptation for theperformance of new and delicate duties which our recent war has imposed. 

It cannot be doubted that Congress will at once make necessary provisionfor the armor plate for the vessels now under contract and building. Itsattention is respectfully called to the report of the Secretary of theNavy, in which the subject is fully presented. I unite in hisrecommendation that the Congress enact such special legislation as may benecessary to enable the Department to make contracts early in the comingyear for armor of the best quality that can be obtained in this country forthe Maine, Ohio, and Missouri, and that the provision of the act of March3, 1899, limiting the price of armor to $300 per ton be removed. 

In the matter of naval construction Italy and Japan, of the great powers, laid down less tonnage in the year 1899 than this country, and Italy alonehas less tonnage under construction. I heartily concur in therecommendations for the increase of the Navy, as suggested by theSecretary. 

Our future progress and prosperity depend upon our ability to equal, if notsurpass, other nations in the enlargement and advance of science, industry, and commerce. To invention we must turn as one of the most powerful aids tothe accomplishment of such a result. The attention of the Congress isdirected to the report of the Commissioner of Patents, in which will befound valuable suggestions and recommendations. 

On the 30th of June, 1899, the pension roll of the United States numbered991, 519. These include the pensioners of the Army and Navy in all our wars. The number added to the rolls during the year was 40, 991. The numberdropped by reason of death, remarriage, minors by legal limitation, failureto claim within three years, and other causes, was 43, 186, and the numberof claims disallowed was 107, 919. During the year 89, 054 pensioncertificates were issued, of which 37, 077 were for new or originalpensions. The amount disbursed for army and navy pensions during the yearwas $138, 355, 052. 95, which was $1, 651, 461. 61 less than the sum of theappropriations. 

The Grand Army of the Republic at its recent national encampment held inPhiladelphia has brought to my attention and to that of the Congress thewisdom and justice of a modification of the third section of the act ofJune 27, 1890, which provides pensions for the widows of officers andenlisted men who served ninety days or more during the War of the Rebellionand were honorably discharged, provided that such widows are without othermeans of sup, port than their daily labor and were married to the soldier, sailor, or marine on account of whose service they claim pension prior tothe date of the act. 

The present holding of the Department is that if the widow's income asidefrom her daily labor does not exceed in amount what her pension would be, to wit, $96 per annum, she would be deemed to be without other means ofsupport than her daily labor, and would be entitled to a pension under thisact; while if the widow's income independent of the amount received by heras the result of her daily labor exceeds $96, she would not be pensionableunder the act. I am advised by the Commissioner of Pensions that the amountof the income allowed before title to pension would be barred has variedwidely under different administrations of the Pension Office, as well asduring different periods of the same administration, and has been the causeof just complaint and criticism. 

With the approval of the Secretary of the Interior the Commissioner ofPensions recommends that, in order to make the practice at all timesuniform and to do justice to the dependent widow, the amount of incomeallowed independent of the proceeds of her daily labor should be not lessthan $250 per annum, and he urges that the Congress shall so amend the actas to permit the Pension Office to grant pensionable status to widows underthe terms of the third section of the act of June 27, 1890, whose incomeaside from the proceeds of daily labor is not in excess of $250 per annum. I believe this to be a simple act of justice and heartily recommend it. 

The Dawes Commission reports that gratifying progress has been made in itswork during the preceding year. The field-work of enrollment of four of thenations has been completed. I recommend that Congress at an early day makeliberal appropriation for educational purposes in the Indian Territory. 

In accordance with the act of Congress approved March 3, 1899. Thepreliminary work in connection with the Twelfth Census is now fully underway. The officers required for the proper administration of the dutiesimposed have been selected. The provision for securing a proper enumerationof the population, as well as to secure evidence of the industrial growthof the Nation, is broader and more comprehensive than any similarlegislation in the past. The Director advises that every needful effort isbeing made to push this great work to completion in the time limited by thestatute. It is believed that the Twelfth Census will emphasize ourremarkable advance in all that pertains to national progress. 

Under the authority of the act of Congress approved July 7, 1898, thecommission consisting of the Secretary of the Treasury, theAttorney-General, and the Secretary of the Interior has made an agreementof settlement, which has had my approval, of the indebtedness to theGovernment growing out of the issue of bonds to aid in the construction ofthe Central Pacific and Western Pacific railroads. The agreement securesto the Government the principal and interest of said bonds, amounting to$58, 812, 715. 48. There has been paid thereon $11, 762, 543. 12, which has beencovered into the Treasury, and the remainder, payable within ten years, with interest at the rate Of 3 per cent per annum, payable semiannually, issecured by the deposit of an equal amount of first-mortgage bonds of thePacific Railway companies. The amounts paid and secured to be paid to theGovernment on account of the Pacific Railroad subsidy claims are: UnionPacific, cash - $58, 448, 223. 75

Kansas Pacific, cash - 6, 303, 000. 00

Central and Western Pacific, cash - 11, 798, 314. 14

Notes, secured - 47, 050, 172. 36

Kansas Pacific--dividends for deficiency due United States, cash -821, 897. 70 -

***

State of the Union AddressWilliam McKinleyDecember 3, 1900

To the Senate and House of Representatives:

At the outgoing of the old and the incoming of the new century you beginthe last session of the Fifty-sixth Congress with evidences on every handof individual and national prosperity and with proof of the growingstrength and increasing power for good of Republican institutions. Yourcountrymen will join with you in felicitation that American liberty is morefirmly established than ever before, and that love for it and thedetermination to preserve it are more universal than at any former periodof our history. 

The Republic was never so strong, because never so strongly entrenched inthe hearts of the people as now. The Constitution, with few amendments, exists as it left the hands of its authors. The additions which have beenmade to it proclaim larger freedom and more extended citizenship. Populargovernment has demonstrated in its one hundred and twenty-four years oftrial here its stability and security, and its efficiency as the bestinstrument of national development and the best safeguard to human rights. 

When the Sixth Congress assembled in November, 1800, the population of theUnited States was 5, 308, 483. It is now 76, 304, 799. Then we had sixteenStates. Now we have forty-five. Then our territory consisted Of 909, 050square miles. It is now 3, 846, 595 square miles. Education, religion, andmorality have kept pace with our advancement in other directions, and whileextending its power the Government has adhered to its foundation principlesand abated none of them in dealing with our new peoples and possessions. Anation so preserved and blessed gives reverent thanks to God and invokesHis guidance and the continuance of His care and favor. 

In our foreign intercourse the dominant question has been the treatment ofthe Chinese problem. Apart from this our relations with the powers havebeen happy. 

The recent troubles in China spring from the antiforeign agitation whichfor the past three years has gained strength in the northern provinces. Their origin lies deep in the character of the Chinese races and in thetraditions of their Government. The Taiping rebellion and the opening ofChinese ports to foreign trade and settlement disturbed alike thehomogeneity and the seclusion of China. 

Meanwhile foreign activity made itself felt in all quarters, not alone onthe coast, but along the great river arteries and in the remoter districts, carrying new ideas and introducing new associations among a primitivepeople which had pursued for centuries a national policy of isolation. 

The telegraph and the railway spreading over their land, the steamersplying on their waterways, the merchant and the missionary penetrating yearby year farther to the interior, became to the Chinese mind types of analien invasion, changing the course of their national life and fraught withvague forebodings of disaster to their beliefs and their self-control. 

For several years before the present troubles all the resources of foreigndiplomacy, backed by moral demonstrations of the physical force of fleetsand arms, have been needed to secure due respect for the treaty rights offoreigners and to obtain satisfaction from the responsible authorities forthe sporadic outrages upon the persons and property of unoffendingsojourners, which from time to time occurred at widely separated points inthe northern provinces, as in the case of the outbreaks in Sze-chuen andShan-tung. 

Posting of antiforeign placards became a daily occurrence, which therepeated reprobation of the Imperial power failed to check or punish. Theseinflammatory appeals to the ignorance and superstition of the masses, mendacious and absurd in their accusations and deeply hostile in theirspirit, could not but work cumulative harm. They aimed at no particularclass of foreigners; they were impartial in attacking everything foreign. 

An outbreak in Shan-tung, in which German missionaries were slain, was thetoo natural result of these malevolent teachings. 

The posting of seditious placards, exhorting to the utter destruction offoreigners and of every foreign thing, continued unrebuked. Hostiledemonstrations toward the stranger gained strength by organization. 

The sect, commonly styled the Boxers, developed greatly in the provincesnorth of the Yang-Tse, and with the collusion of many notable officials, including some in the immediate councils of the Throne itself, becamealarmingly aggressive. No foreigner's life, outside of the protected treatyports, was safe. No foreign interest was secure from spoliation. 

The diplomatic representatives of the powers in Peking strove in vain tocheck this movement. Protest was followed by demand and demand by renewedprotest, to be met with perfunctory edicts from the Palace and evasive andfutile assurances from the Tsung-li Yamen. The circle of the Boxerinfluence narrowed about Peking, and while nominally stigmatized asseditious, it was felt that its spirit pervaded the capital itself, thatthe Imperial forces were imbued with its doctrines, and that the immediatecounselors of the Empress Dowager were in full sympathy with theantiforeign movement. 

The increasing gravity of the conditions in China and the imminence ofperil to our own diversified interests in the Empire, as well as to thoseof all the other treaty governments, were soon appreciated by thisGovernment, causing it profound solicitude. The United States from theearliest days of foreign intercourse with China had followed a policy ofpeace, omitting no occasions to testify good will, to further the extensionof lawful trade, to respect the sovereignty of its Government, and toinsure by all legitimate and kindly but earnest means the fullest measureof protection for the lives and property of our law-abiding citizens andfor the exercise of their beneficent callings among the Chinese people. 

Mindful of this, it was felt to be appropriate that our purposes should bepronounced in favor of such course as would hasten united action of thepowers at Peking to promote the administrative reforms so greatly neededfor strengthening the Imperial Government and maintaining the integrity ofChina, in which we believed the whole western world to be alike concerned. To these ends I caused to be addressed to the several powers occupyingterritory and maintaining spheres of influence in China the circularproposals of 1899, inviting from them declarations of their intentions andviews as to the desirability of the adoption of measures insuring thebenefits of equality of treatment of all foreign trade throughout China. 

With gratifying unanimity the responses coincided in this common policy, enabling me to see in the successful termination of these negotiationsproof of the friendly spirit which animates the various powers interestedin the untrammeled development of commerce and industry in the ChineseEmpire as a source of vast benefit to the whole commercial world. 

In this conclusion, which I had the gratification to announce as acompleted engagement to the interested powers on March 20, 1900, Ihopefully discerned a potential factor for the abatement of the distrust offoreign purposes which for a year past had appeared to inspire the policyof the Imperial Government, and for the effective exertion by it of powerand authority to quell the critical antiforeign movement in the northernprovinces most immediately influenced by the Manchu sentiment. 

Seeking to testify confidence in the willingness and ability of theImperial administration to redress the wrongs and prevent the evils wesuffered and feared, the marine guard, which had been sent to Peking in theautumn of 1899 for the protection of the legation, was withdrawn at theearliest practicable moment, and all pending questions were remitted, asfar as we were concerned, to the ordinary resorts of diplomaticintercourse. 

The Chinese Government proved, however, unable to check the rising strengthof the Boxers and appeared to be a prey to internal dissensions. In theunequal contest the antiforeign influences soon gained the ascendancy underthe leadership of Prince Tuan. Organized armies of Boxers, with which theImperial forces affiliated, held the country between Peking and the coast, penetrated into Manchuria up to the Russian borders, and through theiremissaries threatened a like rising throughout northern China. 

Attacks upon foreigners, destruction of their property, and slaughter ofnative converts were reported from all sides. The Tsung-li Yamen, alreadypermeated with hostile sympathies, could make no effective response to theappeals of the legations. At this critical juncture, in the early spring ofthis year, a proposal was made by the other powers that a combined fleetshould be assembled in Chinese waters as a moral demonstration, under coverof which to exact of the Chinese Government respect for foreign treatyrights and the suppression of the Boxers. 

The United States, while not participating in the joint demonstration, promptly sent from the Philippines all ships that could be spared forservice on the Chinese coast. A small force of marines was landed at Takuand sent to Peking for the protection of the American legation. Otherpowers took similar action, until some four hundred men were assembled inthe capital as legation guards. 

Still the peril increased. The legations reported the development of theseditious movement in Peking and the need of increased provision fordefense against it. While preparations were in progress for a largerexpedition, to strengthen the legation guards and keep the railway open, anattempt of the foreign ships to make a landing at Taku was met by a firefrom the Chinese forts. The forts were thereupon shelled by the foreignvessels, the American admiral taking no part in the attack, on the groundthat we were not at war with China and that a hostile demonstration mightconsolidate the antiforeign elements and strengthen the Boxers to opposethe relieving column. 

Two days later the Taku forts were captured after a sanguinary conflict. Severance of communication with Peking followed, and a combined force ofadditional guards, which was advancing to Peking by the Pei-Ho, was checkedat Langfang. The isolation of the legations was complete. 

The siege and the relief of the legations has passed into undying history. In all the stirring chapter which records the heroism of the devoted band, clinging to hope in the face of despair, and the undaunted spirit that ledtheir relievers through battle and suffering to the goal, it is a memory ofwhich my countrymen may be justly proud that the honor of our flag wasmaintained alike in the siege and the rescue, and that stout Americanhearts have again set high, in fervent emulation with true men of otherrace and language, the indomitable courage that ever strives for the causeof right and justice. 

By June 19 the legations were cut off. An identical note from the, Yamenordered each minister to leave Peking, under a promised escort, withintwenty-four hours. To gain time they replied, asking prolongation of thetime, which was afterwards granted, and requesting an interview with theTsung-li Yamen on the following day. No reply being received, on themorning of the 20th the German minister, Baron von Ketteler, set out forthe Yamen to obtain a response, and oil the way was murdered. 

An attempt by the legation guard to recover his body was foiled by theChinese. Armed forces turned out against the legations. Their quarters weresurrounded and attacked. The mission compounds were abandoned, theirinmates taking refuge in the British legation, where all the otherlegations and guards gathered for more effective defense. Four hundredpersons were crowded in its narrow compass. Two thousand native convertswere assembled in a nearby palace under protection of the foreigners. Linesof defense were strengthened, trenches dug, barricades raised, andpreparations made to stand a siege, which at once began. 

From June 20 until July 17, writes Minister Conger, "there was scarcelyan hour during which there was not firing upon some part of our lines andinto some of the legations, varying from a single shot to a general andcontinuous attack along the whole line. " Artillery was placed around thelegations and on the over-looking palace walls, and thousands Of 3-inchshot and shell were fired, destroying some buildings and damaging all. Sothickly did the balls rain, that, when the ammunition of the besieged ranlow, five quarts of Chinese bullets were gathered in an hour in onecompound and recast. 

Attempts were made to burn the legations by setting neighboring houses onfire, but the flames were successfully fought off, although the Austrian, Belgian, Italian. And Dutch legations were then and subsequently burned. With the aid of the native converts, directed by the missionaries, to whosehelpful co-operation Mr. Conger awards unstinted praise, the Britishlegation was made a veritable fortress. The British minister, Sir ClaudeMacDonald, was chosen general commander of the defense, with the secretaryof the American legation, Mr. E. G. Squiers, as chief of staff. 

To save life and ammunition the besieged sparingly returned the incessantfire of the Chinese soldiery, fighting only to repel attack or make anoccasional successful sortie for strategic advantage, such as that offifty-five American, British, and Russian marines led by Captain Myers, ofthe United States Marine Corps, which resulted in the capture of aformidable barricade on the wall that gravely menaced the Americanposition. It was held to the last, and proved an invaluable acquisition, because commanding the water gate through which the relief column entered. 

During the siege the defenders lost 65 killed, 135 wounded, and 7 bydisease, the last all children. 

On July 14 the besieged had their first communication with the Tsung-liYamen, from whom a message came inviting to a conference, which wasdeclined. Correspondence, however, ensued and a sort of armistice wasagreed upon, which stopped the bombardment and lessened the rifle fire fora time. Even then no protection whatever was afforded, nor any aid given, save to send to the legations a small supply of fruit and three sacks offlour. 

Indeed, the only communication had with the Chinese Government related tothe occasional delivery or dispatch of a telegram or to the demands of theTsung-li Yamen for the withdrawal of the legations to the coast underescort. Not only are the protestations of the Chinese Government that itprotected and succored the legations positively contradicted, butirresistible proof accumulates that the attacks upon them were made byImperial troops, regularly uniformed, armed, and officered, belonging tothe command of Jung Lu, the Imperial commander in chief. Decreesencouraging the Boxers, organizing them tinder prominent Imperial officers, provisioning them, and even granting them large sums in the name of theEmpress Dowager, are known to exist. Members of the Tsung-li Yamen whocounseled protection of the foreigners were beheaded. Even in the distantprovinces men suspected of foreign sympathy were put to death, prominentamong these being Chang Yen-hoon, formerly Chinese minister in Washington. 

With the negotiation of the partial armistice of July 14, a proceedingwhich was doubtless promoted by the representations of the Chinese envoy inWashington, the way was opened for the conveyance to Mr. Conger of a testmessage sent by the Secretary of State through the kind offices of MinisterWu Ting-fang. Mr. Conger's reply, dispatched from Peking on July 18 throughthe same channel, afforded to the outside world the first tidings that theinmates of the legations were still alive and hoping for succor. 

This news stimulated the preparations for a joint relief expedition innumbers sufficient to overcome the resistance which for a month had beenorganizing between Taku and the capital. Reinforcements sent by all theco-operating Governments were constantly arriving. The United Statescontingent, hastily assembled from the Philippines or dispatched from thiscountry, amounted to some 5, 000 men, under the able command first of thelamented Colonel Liscurn and afterwards of General Chaffee. 

Toward the end of July the movement began. A severe conflict followed atTientsin, in which Colonel Liscurn was killed. The city was stormed andpartly destroyed. Its capture afforded the base of operations from which tomake the final advance, which began in the first days of August, theexpedition being made up of Japanese, Russian, British, and American troopsat the outset. 

Another battle was fought and won at Yangtsun. Thereafter the disheartenedChinese troops offered little show of resistance. A few days later theimportant position of Ho-si-woo was taken. A rapid march brought the unitedforces to the populous city of Tung Chow, which capitulated without acontest. 

On August 14 the capital was reached. After a brief conflict beneath thewalls the relief column entered and the legations were saved. The UnitedStates soldiers, sailors, and marines, officers and men alike, in thosedistant climes and unusual surroundings, showed the same valor, discipline, and good conduct and gave proof of the same high degree of intelligence andefficiency which have distinguished them in every emergency. 

The Imperial family and the Government had fled a few days before. The citywas without visible control. The remaining Imperial soldiery had made onthe night of the 13th a last attempt to exterminate the besieged, which wasgallantly repelled. It fell to the occupying forces to restore order andorganize a provisional administration. 

Happily the acute disturbances were confined to the northern provinces. Itis a relief to recall and a pleasure to record the loyal conduct of theviceroys and local authorities of the southern and eastern provinces. Theirefforts were continuously directed to the pacific control of the vastpopulations under their rule and to the scrupulous observance of foreigntreaty rights. At critical moments they did not hesitate to memorialize theThrone, urging the protection of the legations, the restoration ofcommunication, and the assertion of the Imperial authority against thesubversive elements. They maintained excellent relations with the officialrepresentatives of foreign powers. To their kindly disposition is largelydue the success of the consuls in removing many of the missionaries fromthe interior to places of safety. In this relation the action of theconsuls should be highly commended. In Shan-tung and eastern Chi-li thetask was difficult, but, thanks to their energy and the cooperation ofAmerican and foreign naval commanders, hundreds of foreigners, includingthose of other nationalities than ours, were rescued from imminent peril. 

The policy of the United States through all this trying period was clearlyannounced and scrupulously carried out. A circular note to the powers datedJuly 3 proclaimed our attitude. Treating the condition in the north as oneof virtual anarchy, in which the great provinces of the south and southeasthad no share, we regarded the local authorities in the latter quarters asrepresenting the Chinese people with whom we sought to remain in peace andfriendship. Our declared aims involved no war against the Chinese nation. We adhered to the legitimate office of rescuing the imperiled legation, obtaining redress for wrongs already suffered, securing wherever possiblethe safety of American life and property in China, and preventing a spreadof the disorders or their recurrence. 

As was then said, "The policy of the Government of the United States is toseek a solution which may bring about permanent safety and peace to China, preserve Chinese territorial and administrative entity, protect all rightsguaranteed to friendly powers by treaty and international law, andsafeguard for the world the principle of equal and impartial trade with allparts of the Chinese Empire. "

Faithful to those professions which, as it proved, reflected the views andpurposes of the other co-operating Governments, all our efforts have beendirected toward ending the anomalous situation in China by negotiations fora settlement at the earliest possible moment. As soon as the sacred duty ofrelieving our legation and its dependents was accomplished we withdrew fromactive hostilities, leaving our legation under an adequate guard in Pekingas a channel of negotiation and settlement--a course adopted by others ofthe interested powers. Overtures of the empowered representatives of theChinese Emperor have been considerately entertained. 

The Russian proposition looking to the restoration of the Imperial power inPeking has been accepted as in full consonance with our own desires, for wehave held and hold that effective reparation for wrongs suffered and anenduring settlement that will make their recurrence impossible can best bebrought about under an authority which the Chinese nation reverences andobeys. While so doing we forego no jot of our undoubted right to exactexemplary and deterrent punishment of the responsible authors and abettorsof the criminal acts whereby we and other nations have suffered grievousinjury. 

For the real culprits, the evil counselors who have misled the Imperialjudgment and diverted the sovereign authority to their own guilty ends, full expiation becomes imperative within the rational limits of retributiveJustice. Regarding this as the initial condition of an acceptablesettlement between China and the powers, I said in my message of October 18to the Chinese Emperor: I trust that negotiations may begin so soon as weand the other offended Governments shall be effectively satisfied of YourMajesty's ability and power to treat with just sternness the principaloffenders, who are doubly culpable, not alone toward the foreigners, buttoward Your Majesty, under whose rule the purpose of China to dwell inconcord with the world had hitherto found expression in the welcome andprotection assured to strangers. Taking, as a point of departure, theImperial edict appointing Earl Li Hung Chang and Prince Chingplenipotentiaries to arrange a settlement, and the edict of September 25, whereby certain high officials were designated for punishment, thisGovernment has moved, in concert with the other powers, toward the openingof negotiations, which Mr. Conger, assisted by Mr. Rockhill, has beenauthorized to conduct on behalf of the United States. 

General bases of negotiation formulated by the Government of the FrenchRepublic have been accepted with certain reservations as to details, madenecessary by our own circumstances, but, like similar reservations by otherpowers, open to discussion in the progress of the negotiations. Thedisposition of the Emperor's Government to admit liability for wrongs doneto foreign Governments and their nationals, and to act upon such additionaldesignation of the guilty persons as the foreign ministers at Peking may bein a position to make, gives hope of a complete settlement of all questionsinvolved, assuring foreign rights of residence and intercourse on terms ofequality for all the world. 

I regard as one of the essential factors of a durable adjustment thesecurement of adequate guarantees for liberty of faith, since insecurity ofthose natives who may embrace alien creeds is a scarcely less effectualassault upon the rights of foreign worship and teaching than would be thedirect invasion thereof. 

The matter of indemnity for our wronged citizens is a question of graveconcern. Measured in money alone, a sufficient reparation may prove to bebeyond the ability of China to meet. All the powers concur in emphaticdisclaimers of any purpose of aggrandizement through the dismemberment ofthe Empire. I am disposed to think that due compensation may be made inpart by increased guarantees of security for foreign rights and immunities, and, most important of all, by the opening of China to the equal commerceof all the world. These views have been and will be earnestly advocated byour representatives. 

The Government of Russia has put forward a suggestion, that in the event ofprotracted divergence of views in regard to indemnities the matter may berelegated to the Court of Arbitration at The Hague. I favorably incline tothis, believing that high tribunal could not fail to reach a solution noless conducive to the stability and enlarged prosperity of China itselfthan immediately beneficial to the powers. 

Ratifications of a treaty of extradition with the Argentine Republic wereexchanged on June 2 last. 

While the Austro-Hungarian Government has in the many cases that have beenreported of the arrest of our naturalized citizens for alleged evasion ofmilitary service faithfully observed the provisions of the treaty andreleased such persons from military obligations, it has in some instancesexpelled those whose presence in the community of their origin was assertedto have a pernicious influence. Representations have been made against thiscourse whenever its adoption has appeared unduly onerous. 

We have been urgently solicited by Belgium to ratify the InternationalConvention of June, 1899, amendatory of the previous Convention of 1890 inrespect to the regulation of the liquor trade in Africa. Compliance wasnecessarily withheld, in the absence of the advice and consent of theSenate thereto. The principle involved has the cordial sympathy of thisGovernment, which in the reversionary negotiations advocated more drasticmeasures, and I would gladly see its extension, by international agreement, to the restriction of the liquor traffic with all uncivilized peoples, especially in the Western Pacific. 

A conference will be held at Brussels December 11, 1900, under theConvention for the protection of industrial property, concluded at ParisMarch 20, 1883, to which delegates from this country have been appointed. Any lessening of the difficulties that our inventors encounter in obtainingpatents abroad for their inventions and that our farmers, manufacturers, and merchants may have in the protection of their trade-marks is worthy ofcareful consideration, and your attention will be called to the results ofthe conference at the proper time. 

In the interest of expanding trade between this country and South America, efforts have been made during the past year to conclude conventions withthe southern republics for the enlargement of postal facilities. Two suchagreements, signed with Bolivia on April 24, of which that establishing themoney-order system is undergoing certain changes suggested by thePost-Office Department, have not yet been ratified by this Government. Atreaty of extradition with that country, signed on the same day, is beforethe Senate. 

A boundary dispute between Brazil and Bolivia over the territory of Acre isin a fair way of friendly adjustment, a protocol signed in December, 1899, having agreed on a definite frontier and provided for its demarcation by ajoint commission. 

Conditions in Brazil have weighed heavily on our export trade to thatcountry in marked contrast to the favorable conditions upon which Brazilianproducts are admitted into our markets. Urgent representations have beenmade to that Government on the subject and some amelioration has beeneffected. We rely upon the reciprocal justice and good will of thatGovernment to assure to us a further improvement in our commercialrelations. 

The Convention signed May 24, 1897, for the final settlement of claims leftin abeyance upon the dissolution of the Commission of 1893, was at lengthratified by the Chilean Congress and the supplemental Commission has beenorganized. 

It remains for the Congress to appropriate for the necessary expenses ofthe Commission. 

The insurrectionary movement which disturbed Colombia in the latter part of1899 has been practically suppressed, although guerrillas still operate insome departments. The executive power of that Republic changed hands inAugust last by the act of Vice-President Marroquin in assuming the reins ofgovernment during the absence of President San Clemente from the capital. The change met with no serious opposition, and, following the precedents insuch cases, the United States minister entered into relations with the newdefacto Government on September 17. 

It is gratifying to announce that the residual questions between Costa Ricaand Nicaragua growing out of the Award of President Cleveland in 1888 havebeen adjusted through the choice of an American engineer, General E. P. Alexander, as umpire to run the disputed line. His task has beenaccomplished to the satisfaction of both contestants. 

A revolution in the Dominican Republic toward the close of last yearresulted in the installation of President Jimenez, whose Government wasformally recognized in January. Since then final payment has been made ofthe American claim in regard to the Ozama bridge. 

The year of the exposition has been fruitful in occasions for displayingthe good will that exists between this country and France. This greatcompetition brought together from every nation the best in naturalproductions, industry, science, and the arts, submitted in generous rivalryto a judgment made all the more searching because of that rivalry. Theextraordinary increase of exportations from this country during the pastthree years and the activity with which our inventions and wares hadinvaded new markets caused much interest to center upon the Americanexhibit, and every encouragement was offered in the way of space andfacilities to permit of its being comprehensive as a whole and complete inevery part. 

It was, however, not an easy task to assemble exhibits that could fitlyillustrate our diversified resources and manufactures. Singularly enough, our national prosperity lessened the incentive to exhibit. The dealer inraw materials knew that the user must come to him; the great factories werecontented with the phenomenal demand for their output, not alone at home, but also abroad, where merit had already won a profitable trade. 

Appeals had to be made to the patriotism of exhibitors to induce them toincur outlays promising no immediate return. This was especially the casewhere it became needful to complete an industrial sequence or illustrate aclass of processes. One manufacturer after another had to be visited andimportuned, and at times, after a promise to exhibit in a particularsection had been obtained, it would be withdrawn, owing to pressure oftrade orders, and a new quest would have to be made. 

The installation of exhibits, too, encountered many obstacles and involvedunexpected cost. The exposition was far from ready at the date fixed forits opening. The French transportation lines were congested with offeredfreight. Belated goods had to be hastily installed in unfinished quarterswith whatever labor could be obtained in the prevailing confusion. Nor wasthe task of the Commission lightened by the fact that, owing to the schemeof classification adopted, it was impossible to have the entire exhibit ofany one country in the same building or more than one group of exhibits inthe same part of any building. Our installations were scattered on bothsides of the Seine and in widely remote suburbs of Paris, so thatadditional assistants were needed for the work of supervision andarrangement. 

Despite all these drawbacks the contribution of the United States was notonly the largest foreign display, but was among the earliest in place andthe most orderly in arrangement. Our exhibits were shown in one hundred andone out of one hundred and twenty-one classes, and more completely coveredthe entire classification than those of any other nation. In total numberthey ranked next after those of France, and the attractive form in whichthey were presented secured general attention. 

A criterion of the extent and success of our participation and of thethoroughness with which our exhibits were organized is seen in the awardsgranted to American exhibitors by the international jury, namely, grandprizes, 240; gold medals, 597; silver medals, 776; bronze medals, 541, andhonorable mentions, 322--2, 476 in all, being the greatest total numbergiven to the exhibit of any exhibiting nation, as well as the largestnumber in each grade. This significant recognition of merit in competitionwith the chosen exhibits of all other nations and at the hands of juriesalmost wholly made up of representatives of France and other competingcountries is not only most gratifying, but is especially valuable, since itsets us to the front in international questions of supply and demand, whilethe large proportion of awards in the classes of art and artisticmanufactures afforded unexpected proof of the stimulation of nationalculture by the prosperity that flows from natural productiveness joined toindustrial excellence. 

Apart from the exposition several occasions for showing international goodwill occurred. The inauguration in Paris of the Lafayette Monument, presented by the school children of the United States, and the designing ofa commemorative coin by our Mint and the presentation of the first piecestruck to the President of the Republic, were marked by appropriateceremonies, and the Fourth of July was especially observed in the Frenchcapital. 

Good will prevails in our relations with the German Empire. An amicableadjustment of the long-pending question of the admission of ourlife-insurance companies to do business in Prussia has been reached. One ofthe principal companies has already been readmitted and the way is openedfor the others to share the privilege. 

The settlement of the Samoan problem, to which I adverted in my lastmessage, has accomplished good results. Peace and contentment prevail inthe islands, especially in Tutuila, where a convenient administration thathas won the confidence and esteem of the kindly disposed natives has beenorganized under the direction of the commander of the United States navalstation at Pago-Pago. 

An Imperial meat inspection law has been enacted for Germany. While it maysimplify the inspections, it prohibits certain products heretoforeadmitted. There is still great uncertainty as to whether our well-nighextinguished German trade in meat products can revive tinder its newburdens. Much will depend upon regulations not yet promulgated, which weconfidently hope will be free from the discriminations which attended theenforcement of the old statutes. 

The remaining link in the new lines of direct telegraphic communicationbetween the United States and the German Empire has recently beencompleted, affording a gratifying occasion for exchange of friendlycongratulations with the German Emperor. 

Our friendly relations with Great Britain continue. The war in SouthernAfrica introduced important questions. A condition unusual in internationalwars was presented in that while one belligerent had control of the seas, the other had no ports, shipping, or direct trade, but was only accessiblethrough the territory of a neutral. Vexatious questions arose through GreatBritain's action in respect to neutral cargoes, not contraband in their ownnature, shipped to Portuguese South Africa, on the score of probable orsuspected ultimate destination to the Boer States. 

Such consignments in British ships, by which alone direct trade is kept upbetween our ports and Southern Africa, were seized in application of amunicipal law prohibiting British vessels from trading with the enemywithout regard to any contraband character of the goods, while cargoesshipped to Delagoa Bay in neutral bottoms were arrested on the ground ofalleged destination to enemy's country. Appropriate representations on ourpart resulted in the British Government agreeing to purchase outright allsuch goods shown to be the actual property of American citizens, thusclosing the incident to the satisfaction of the immediately interestedparties, although, unfortunately, without a broad settlement of thequestion of a neutral's right to send goods not contraband per se to aneutral port adjacent to a belligerent area. 

The work of marking certain provisional boundary points, for convenience ofadministration, around the head of Lynn Canal, in accordance with thetemporary arrangement of October, 1899, Was completed by a joint survey inJuly last. The modus vivendi has so far worked without friction, and theDominion Government has provided rules and regulations for securing to ourcitizens the benefit of the reciprocal stipulation that the citizens orsubjects of either power found by that arrangement within the temporaryjurisdiction of the other shall suffer no diminution of the rights andprivileges they have hitherto enjoyed. But however necessary such anexpedient may have been to tide over the grave emergencies of thesituation, it is at best but an unsatisfactory makeshift, which should notbe suffered to delay the speedy and complete establishment of the frontierline to which we are entitled under the Russo-American treaty for thecession of Alaska. 

In this relation I may refer again to the need of definitely marking theAlaskan boundary where it follows the one hundred and forty-first meridian. A convention to that end has been before the Senate for some two years, butas no action has been taken I contemplate negotiating a new convention fora joint determination of the meridian by telegraphic observations. These, it is believed, will give more accurate and unquestionable results than thesidereal methods heretofore independently followed, which, as is known, proved discrepant at several points on the line, although not varying atany place more than 700 feet. 

The pending claim of R. H. May against the Guatemalan Government has beensettled by arbitration, Mr. George F. B. Jenner, British minister atGuatemala, who was chosen as sole arbitrator, having awarded $143, 750. 73 ingold to the claimant. 

Various American claims against Haiti have been or are being advanced tothe resort of arbitration. 

As the result of negotiations with the Government of Honduras in regard tothe indemnity demanded for the murder of Frank H. Pears in Honduras, thatGovernment has paid $10, 000 in settlement of the claim of the heirs. 

The assassination of King Humbert called forth sincere expressions ofsorrow from this Government and people, and occasion was fitly taken totestify to the Italian nation the high regard here felt for the memory ofthe lamented ruler. 

In my last message I referred at considerable length to the lynching offive Italians at Tallulah. Notwithstanding the efforts of the FederalGovernment, the production of evidence tending to inculpate the authors ofthis grievous offense against our civilization, and the repeated inquestsset on foot by the authorities of the State of Louisiana, no punishmentshave followed. Successive grand juries have failed to indict. Therepresentations of the Italian Government in the face of this miscarriagehave been most temperate and just. 

Setting the principle at issue high above all consideration of merelypecuniary indemnification, such as this Government made in the threeprevious cases, Italy has solemnly invoked the pledges of existing treatyand asked that the justice to which she is entitled shall be meted inregard to her unfortunate countrymen in our territory with the same fullmeasure she herself would give to any American were his reciprocal treatyrights contemned. 

I renew the urgent recommendations I made last year that the Congressappropriately confer upon the Federal courts jurisdiction in this class ofinternational cases where the ultimate responsibility of the FederalGovernment may be involved, and I invite action upon the bills toaccomplish this which were introduced in the Sen. Ate and House. It isincumbent upon us to remedy the statutory omission which has led, and mayagain lead, to such untoward results. I have pointed out the necessity andthe precedent for legislation of this character. Its enactment is a simplemeasure of previsory justice toward the nations with which we as asovereign equal make treaties requiring reciprocal observance. 

While the Italian Government naturally regards such action as the primaryand, indeed, the most essential element in the disposal of the Tallulahincident, I advise that, in accordance with precedent, and in view of theimprobability of that particular case being reached by the bill nowpending, Congress make gracious provision for indemnity to the Italiansufferers in the same form and proportion as heretofore. 

In my inaugural address I referred to the general subject of lynching inthese words: Lynching must not be tolerated in a great and civilizedcountry like the United States; courts, not mobs, must execute thepenalties of the law. The preservation of public order, the right ofdiscussion, the integrity of courts, and the orderly administration ofjustice must continue forever the rock of safety upon which our Governmentsecurely rests. This I most urgently reiterate and again invite theattention of my countrymen to this reproach upon our civilization. 

The closing year has witnessed a decided strengthening of Japan's relationsto other states. The development of her independent judicial andadministrative functions under the treaties which took effect July 17, 1899, has proceeded without international friction, showing the competenceof the Japanese to hold a foremost place among modern peoples. 

In the treatment of the difficult Chinese problems Japan has acted inharmonious concert with the other powers, and her generous cooperationmaterially aided in the joint relief of the beleaguered legations in Pekingand in bringing about an understanding preliminary to a settlement of theissues between the powers and China. Japan's declarations in favor of theintegrity of the Chinese Empire and the conservation of open world tradetherewith have been frank and positive. As a factor for promoting thegeneral interests of peace, order, and fair commerce in the Far East theinfluence of Japan can hardly be overestimated. 

The valuable aid and kindly courtesies extended by the Japanese Governmentand naval officers to the battle ship Oregon are gratefully appreciated. 

Complaint was made last summer of the discriminatory enforcement of abubonic quarantine against Japanese on the Pacific coast and ofinterference with their travel in California and Colorado under the healthlaws of those States. The latter restrictions have been adjudged by aFederal court to be unconstitutional. No recurrence of either cause ofcomplaint is apprehended. 

No noteworthy incident has occurred in our relations with our importantsouthern neighbor. Commercial intercourse with Mexico continues to thrive, and the two Governments neglect no opportunity to foster their mutualinterests in all practicable ways. 

Pursuant to the declaration of the Supreme Court that the awards of thelate joint Commission in the La Abra and Weil claims were obtained throughfraud, the sum awarded in the first case, $403, 030. 08, has been returned toMexico, and the amount of the Weil award will be returned in like manner. 

A Convention indefinitely extending the time for the labors of the UnitedStates and Mexican International (Water) Boundary Commission has beensigned. 

It is with satisfaction that I am able to announce the formal notificationat The Hague, on September 4, of the deposit of ratifications of theConvention for the Pacific Settlement of International Disputes by sixteenpowers, namely, the United States, Austria, Belgium, Denmark, England, France, Germany, Italy, Persia, Portugal, Roumania, Russia, Siam, Spain, Sweden and Norway, and the Netherlands. Japan also has since ratified theConvention. 

The Administrative Council of the Permanent Court of Arbitration has beenorganized and has adopted rules of order and a constitution for theInternational Arbitration Bureau. In accordance with Article XXIII of theConvention providing for the appointment by each signatory power of personsof known competency in questions of international law as arbitrators, Ihave appointed as members of this Court, Hon. Benjamin Harrison, ofIndiana, ex-President of the United States; Hon. Melville W. Fuller, ofIllinois, Chief justice of the United States; Hon. John W. Griggs, of NewJersey, Attorney General of the United States; and Hon. George Gray, ofDelaware, a judge of the circuit court of the United States. 

As an incident of the brief revolution in the Mosquito district ofNicaragua early in 1899 the insurgents forcibly collected from Americanmerchants duties upon imports. On the restoration of order the Nicaraguanauthorities demanded a second payment of such duties on the ground thatthey were due to the titular Government and that their diversion had aidedthe revolt. 

This position was not accepted by us. After prolonged discussion acompromise was effected under which the amount of the second payments wasdeposited with the British consul at San Juan del Norte in trust until thetwo Governments should determine whether the first payments had been madeunder compulsion to a de facto authority. Agreement as to this was notreached, and the point was waived by the act of the Nicaraguan Governmentin requesting the British consul to return the deposits to the merchants. 

Menacing differences between several of the Central American States havebeen accommodated, our ministers rendering good offices toward anunderstanding. 

The all-important matter of an interoceanic canal has assumed a new phase. Adhering to its refusal to reopen the question of the forfeiture of thecontract of the Maritime Canal Company, which was terminated for allegednonexecution in October, 1899, the Government of Nicaragua has sincesupplemented that action by declaring the so styled Eyre-Cragin option voidfor nonpayment of the stipulated advance. Protests in relation to theseacts have been filed in the State Department and are under consideration. Deeming itself relieved from existing engagements, the NicaraguanGovernment shows a disposition to deal freely with the canal questioneither in the way of negotiations with the United States or by takingmeasures to promote the waterway. 

Overtures for a convention to effect the building of a canal under theauspices of the United States are under consideration. In the meantime, theviews of the Congress upon the general subject, in the light of the reportof the Commission appointed to examine the comparative merits of thevarious trans-Isthmian ship-canal projects, may be awaited. 

I commend to the early attention of the Senate the Convention with GreatBritain to facilitate the construction of such a canal and to remove anyobjection which might arise out of the Convention commonly called theClayton-Bulwer Treaty. 

The long-standing contention with Portugal, growing out of the seizure ofthe Delagoa Bay Railway, has been at last determined by a favorable awardof the tribunal of arbitration at Berne, to which it was submitted. Theamount of the award, which was deposited in London awaiting arrangements bythe Governments of the United States and Great Britain for its disposal, has recently been paid over to the two Governments. 

A lately signed Convention of Extradition with Peru as amended by theSenate has been ratified by the Peruvian Congress. 

Another illustration of the policy of this Government to referinternational disputes to impartial arbitration is seen in the agreementreached with Russia to submit the claims on behalf of American sealingvessels seized in Bering Sea to determination by Mr. T. M. C. Asser, adistinguished statesman and jurist of the Netherlands. 

Thanks are due to the Imperial Russian Government for the kindly aidrendered by its authorities in eastern Siberia to American missionariesfleeing from Manchuria. 

Satisfactory progress has been made toward the conclusion of a generaltreaty of friendship and intercourse with Spain, in replacement of the oldtreaty, which passed into abeyance by reason of the late war. A newconvention of extradition is approaching completion, and I should be muchpleased were a commercial arrangement to follow. I feel that we should notsuffer to pass any opportunity to reaffirm the cordial ties that existedbetween us and Spain from the time of our earliest independence, and toenhance the mutual benefits of that commercial intercourse which is naturalbetween the two countries. 

By the terms of the Treaty of Peace the line bounding the ceded Philippinegroup in the southwest failed to include several small islands lyingwestward of the Sulus, which have always been recognized as under Spanishcontrol. The occupation of Sibutd and Cagayan Sulu by our naval forceselicited a claim on the part of Spain, the essential equity of which couldnot be gainsaid. In order to cure the defect of the treaty by removing allpossible ground of future misunderstanding respecting the interpretation ofits third article, I directed the negotiation of a supplementary treaty, which will be forthwith laid before the Senate, whereby Spain quits alltitle and claim of title to the islands named as well as to any and allislands belonging to the Philippine Archipelago lying outside the linesdescribed in said third article, and agrees that all such islands shall becomprehended in the cession of the archipelago as fully as if they had beenexpressly included within those lines. In consideration of this cession theUnited States is to pay to Spain the sum of $100, 000. 

A bill is now pending to effect the recommendation made in my last annualmessage that appropriate legislation be had to carry into execution ArticleVII of the Treaty of Peace with Spain, by which the United States assumedthe payment of certain claims for indemnity of its citizens against Spain. I ask that action be taken to fulfill this obligation. 

The King of Sweden and Norway has accepted the joint invitation of theUnited States, Germany, and Great Britain to arbitrate claims growing outof losses sustained in the Samoan Islands in the course of militaryoperations made necessary by the disturbances in 1899. 

Our claims upon the Government of the Sultan for reparation for injuriessuffered by American citizens in Armenia and elsewhere give promise ofearly and satisfactory settlement. His Majesty's good disposition in thisregard has been evinced by the issuance of an irade for rebuilding theAmerican college at Harpoot. 

The failure of action by the Senate at its last session upon the commercialconventions then submitted for its consideration and approval, althoughcaused by the great pressure of other legislative business, has caused muchdisappointment to the agricultural and industrial interests of the country, which hoped to profit by their provisions. The conventional periods fortheir ratification having expired, it became necessary to sign additionalarticles extending the time for that purpose. This was requested on ourpart, and the other Governments interested have concurred with theexception of one convention, in respect to which no formal reply has beenreceived. 

Since my last communication to the Congress on this subject specialcommercial agreements under the third section of the tariff act have beenproclaimed with Portugal, with Italy, and with Germany. Commercialconventions tinder the general limitations of the fourth section of thesame act have been concluded with Nicaragua, with Ecuador, with theDominican Republic, with Great Britain on behalf of the island of Trinidad, and with Denmark on behalf of the island of St. Croix. These will be earlycommunicated to the Senate. Negotiations with other Governments are inprogress for the improvement and security of our commercial relations. 

The policy of reciprocity so manifestly rests upon the principles ofinternational equity and has been so repeatedly approved by the people ofthe United States that there ought to be no hesitation in either branch ofthe Congress in giving to it full effect. 

This Government desires to preserve the most just and amicable commercialrelations with all foreign countries, unmoved by the industrial rivalriesnecessarily developed in the expansion of international trade. It isbelieved that the foreign Governments generally entertain the same purpose, although in some instances there are clamorous demands upon them forlegislation specifically hostile to American interests. Should thesedemands prevail I shall communicate with the Congress with the view ofadvising such legislation as may be necessary to meet the emergency. 

The exposition of the resources and products of the Western Hemisphere tobe held at Buffalo next year promises important results not only for theUnited States but for the other participating countries. It is gratifyingthat the Latin-American States have evinced the liveliest interest, and thefact that an International American Congress will be held in the City ofMexico while the exposition is in progress encourages the hope of a largerdisplay at Buffalo than might otherwise be practicable. The work ofpreparing an exhibit of our national resources is making satisfactoryprogress under the direction of different officials of the FederalGovernment, and the various States of the Union have shown a dispositiontoward the most liberal participation in the enterprise. 

The Bureau of the American Republics continues to discharge, with thehappiest results, the important work of promoting cordial relations betweenthe United States and the Latin-American countries, all of which are nowactive members of the International Union. The Bureau has been instrumentalin bringing about the agreement for another International AmericanCongress, which is to meet in the City of Mexico in October, 1901. TheBureau's future for another term of ten years is assured by theinternational compact, but the congress will doubtless have much to do withshaping new lines of work and a general policy. Its usefulness to theinterests of Latin-American trade is widely appreciated and shows agratifying development. 

The practical utility of the consular service in obtaining a wide range ofinformation as to the industries and commerce of other countries and theopportunities thereby afforded for introducing the sale of our goods havekept steadily in advance of the notable expansion of our foreign trade, andabundant evidence has been furnished, both at home and abroad, of the factthat the Consular Reports, including many from our diplomaticrepresentatives, have to a considerable extent pointed out ways and meansof disposing of a great variety of manufactured goods which otherwise mightnot have found sale abroad. 

Testimony of foreign observers to the commercial efficiency of the consularcorps seems to be conclusive, and our own manufacturers and exportershighly appreciate the value of the services rendered not only in theprinted reports but also in the individual efforts of consular officers topromote American trade. An increasing part of the work of the Bureau ofForeign Commerce, whose primary duty it is to compile and print thereports, is to answer inquiries from trade organizations, business houses, etc. , as to conditions in various parts of the world, and, notwithstandingthe smallness of the force employed, the work has been so systematized thatresponses are made with such promptitude and accuracy as to elicitflattering encomiums. The experiment of printing the Consular Reports dailyfor immediate use by trade bodies, exporters, and the press, which wasbegun in January, 1898, continues to give general satisfaction. 

It is gratifying to be able to state that the surplus revenues for thefiscal year ended June 30, 1900, were $79, 527, 060. 18. For the six precedingyears we had only deficits, the aggregate of which from 1894 to 1899, inclusive, amounted to $283, 022, 991. 14. The receipts for the year from allsources, exclusive of postal revenues, aggregated $567, 240, 851. 89, andexpenditures for all purposes, except for the administration of the postaldepartment, aggregated $487, 713, 791. 71. The receipts from customs were$233, 164, 871. 16, an increase over the preceding year Of $27, 036, 389. 41. Thereceipts from internal revenue were $295, 327, 926. 76, an increase Of$21, 890, 765. 25 over 1899. The receipts from miscellaneous sources were$38, 748, 053. 97, as against $36, 394, 976. 92 for the previous year. 

It is gratifying also to note that during the year a considerable reductionis shown in the expenditures of the Government. The War Departmentexpenditures for the fiscal year 1900 were $134, 774, 767. 78, a reduction of$95, 066, 486. 69 over those of 1899. In the Navy Department the expenditureswere $55, 953, 077. 72 for the year 1900, as against $63, 942, 104. 25 for thepreceding year, a decrease of $7, 989, 026. 53. In the expenditures on accountof Indians there was a decrease in 1900 over 1899 Of $2, 630, 604. 38; and inthe civil and miscellaneous expenses for 1900 there was a reduction Of$13, 418, 065. 74. 

Because of the excess of revenues over expenditures the Secretary of theTreasury was enabled to apply bonds and other securities to the sinkingfund to the amount Of $56, 544, 556. 06. The details of the sinking fund areset forth in the report of the Secretary of the Treasury, to which I inviteattention. The Secretary of the Treasury estimates that the receipts forthe current fiscal year will aggregate $580, 000, 000 and the expenditures$500, 000, 000, leaving an excess of revenues over expenditures of$80, 000, 000. The present condition of the Treasury is one of undoubtedstrength. The available cash balance November 30 was $139, 303, 794. 50. Underthe form of statement prior to the financial law of March 14 last therewould have been included in the statement of available cash gold coin andbullion held for the redemption of United States notes. 

If this form were pursued, the cash balance including the present goldreserve of $150, 000, 000, would be $289, 303, 794. 50. Such balance November30, 1899, was $296, 495, 301. 55. In the general fund, which is whollyseparate from the reserve and trust funds, there was on November 30, $70, 090, 073. 15 in gold coin and bullion, to which should be added$22, 957, 300 in gold certificates subject to issue, against which there isheld in the Division of Redemption gold coin and bullion, making a totalholding of free gold amounting to $93, 047, 373. 15. 

It will be the duty as I am sure it will be the disposition of the Congressto provide whatever further legislation is needed to insure the continuedparity under all conditions between our two forms of metallic money, silverand gold. 

Our surplus revenues have permitted the Secretary of the Treasury since theclose of the fiscal year to call in the funded loan of 1891 continued at 2per cent, in the sum of $25, 364, 500. To and including November 30, $23, 458, 100 Of these bonds have been paid. This sum, together with theamount which may accrue from further redemptions under the call, will beapplied to the sinking fund. 

The law of March 14, 1900, provided for refunding into 2 per centthirty-year bonds, payable, principal and interest, in gold coin of thepresent standard value, that portion of the public debt represented by the3 per cent bonds of 1908, the 4 percents Of 1907, and the 5 percents of1904, Of which there was outstanding at the date of said law $839, 149, 930, The holders of the old bonds presented them for exchange between March 14and November 30 to the amount of $364, 943, 750. The net saving to theGovernment on these transactions aggregates $9, 106, 166. 

Another effect of the operation, as stated by the Secretary, is to reducethe charge upon the Treasury for the payment of interest from the dates ofrefunding to February 1, 1904, by the sum of more than seven milliondollars annually. From February 1, 1904, to July 1, 11907, the annualinterest charge will be reduced by the sum of more than five millions, andfor the thirteen months ending August 1, 1908, by about one million. Thefull details of the refunding are given in the annual report of theSecretary of the Treasury. 

The beneficial effect of the financial act of 1900, so far as it relates toa modification of the national banking act, is already apparent. Theprovision for the incorporation of national banks with a capital of notless than $25, 000 in places not exceeding three thousand inhabitants hasresulted in the extension of banking facilities to many small communitieshitherto unable to provide themselves with banking institutions under thenational system. There were organized from the enactment of the law up toand including November 30, 369 national banks, of which 266 were withcapital less than $50, 000, and 103 with capital of $50, 000 or more. 

It is worthy of mention that the greater number of banks being organizedunder the new law are in sections where the need of banking facilities hasbeen most pronounced. Iowa stands first, with 30 banks of the smallerclass, while Texas, Oklahoma, Indian Territory, and the middle and westernsections of the country have also availed themselves largely of theprivileges under the new law. 

A large increase in national bank-note circulation has resulted from theprovision of the act which permits national banks to issue circulatingnotes to the par value of the United States bonds deposited as securityinstead of only go per cent thereof, as heretofore. The increase incirculating notes from March 14 to November 30 is $77, 889, 570. 

The party in power is committed to such legislation as will better make thecurrency responsive to the varying needs of business at all seasons and inall sections. 

Our foreign trade shows a remarkable record of commercial and industrialprogress. The total of imports and exports for the first time in thehistory of the country exceeded two billions of dollars. The exports aregreater than they have ever been before, the total for the fiscal year 1900being $1, 394, 483, 082, an increase over 1899 of $167, 459, 780, an increaseover 1898 of $163, 000, 752, over 1897 Of $343, 489, 526, and greater than 1896by $511, 876, 144. 

The growth of manufactures in the United States is evidenced by the factthat exports of manufactured products largely exceed those of any previousyear, their value for 1900 being $433, 851, 756, against $339, 592, 146 in1899, an increase of 28 per cent. 

Agricultural products were also exported during 1900 in greater volume thanin 1899, the total for the year being $835, 858, 123, against $784, 776, 142 in1899. 

The imports for the year amounted to $849, 941, 184, an increase over 1899 of$152, 792, 695. This increase is largely in materials for manufacture, and isin response to the rapid development of manufacturing in the United States. While there was imported for use in manufactures in 1900 material to thevalue of $79, 768, 972 in excess of 1899, it is reassuring to observe thatthere is a tendency toward decrease in the importation of articlesmanufactured ready for consumption, which in 1900 formed 15. 17 per cent ofthe total imports, against 15. 54 per cent in 1899 and 21. 09 per cent in1896. 

I recommend that the Congress at its present session reduce theinternal-revenue taxes imposed to meet the expenses of the war with Spain. In the sum of thirty millions of dollars. This reduction should be securedby the remission of those taxes which experience has shown to be the mostburdensome to the industries of the people. 

I specially urge that there be included in whatever reduction is made thelegacy tax on bequests for public uses of a literary, educational, orcharitable character. 

American vessels during the past three years have carried about 9 per centof our exports and imports. Foreign ships should carry the least, not thegreatest, part of American trade. The remarkable growth of our steelindustries, the progress of shipbuilding for the domestic trade, and oursteadily maintained expenditures for the Navy have created an opportunityto place the United States in the first rank of commercial maritime powers. 

Besides realizing a proper national aspiration this will mean theestablishment and healthy growth along all our coasts of a distinctivenational industry, expanding the field for the profitable employment oflabor and capital. It will increase the transportation facilities andreduce freight charges on the vast volume of products brought from theinterior to the seaboard for export, and will strengthen an arm of thenational defense upon which the founders of the Government and theirsuccessors have relied. In again urging immediate action by the Congress onmeasures to promote American shipping and foreign trade, I direct attentionto the recommendations on the subject in previous messages, andparticularly to the opinion expressed in the message of 1899: I amsatisfied the judgment of the country favors the policy of aid to ourmerchant marine, which will broaden our commerce and markets and upbuildour sea-carrying capacity for the products of agriculture and manufacture, which, with the increase of our Navy, mean more work and wages to ourcountrymen, as well as a safeguard to American interests in every part ofthe world. The attention of the Congress is invited to the recommendationof the Secretary of the Treasury in his annual report for legislation inbehalf of the Revenue-Cutter Service, and favorable action is urged. 

In my last annual message to the Congress I called attention to thenecessity for early action to remedy such evils as might be found to existin connection with combinations of capital organized into trusts, and againinvite attention to my discussion of the subject at that time, whichconcluded with these words: It is apparent that uniformity of legislationupon this subject in the several States is much to be desired. It is to behoped that such uniformity, founded in a wise and just discriminationbetween what is injurious and what is useful and necessary in businessoperations, may be obtained, and that means may be found for the Congress, within the limitations of its constitutional power, so to supplement aneffective code of State legislation as to make a complete system of lawsthroughout the United States adequate to compel a general observance of thesalutary rules to which I have referred. 

The whole question is so important and far-reaching that I am sure no partof it will be lightly considered, but every phase of it will have thestudied deliberation of the Congress, resulting in wise and judiciousaction. Restraint upon such combinations as are injurious, and which arewithin Federal jurisdiction, should be promptly applied by the Congress. 

In my last annual message I dwelt at some length upon the condition ofaffairs in the Philippines. While seeking to impress upon you that thegrave responsibility of the future government of those islands rests withthe Congress of the United States, I abstained from recommending at thattime a specific and final form of government for the territory actuallyheld by the United States forces and in which as long as insurrectioncontinues the military arm must necessarily be supreme. I stated mypurpose, until the Congress shall have made the formal expression of itswill, to use the authority vested in me by the Constitution and thestatutes to uphold the sovereignty of the United States in those distantislands as in all other places where our flag rightfully floats, placing, to that end, at the disposal of the army and navy all the means which theliberality of the Congress and the people have provided. No contraryexpression of the will of the Congress having been made, I have steadfastlypursued the purpose so declared, employing the civil arm as well toward theaccomplishment of pacification and the institution of local governmentswithin the lines of authority and law. 

Progress in the hoped-for direction has been favorable. Our forces havesuccessfully controlled the greater part of the islands, overcoming theorganized forces of the insurgents and carrying order and administrativeregularity to all quarters. What opposition remains is for the most partscattered, obeying no concerted plan of strategic action, operating only bythe methods common to the traditions of guerrilla warfare, which, whileineffective to alter the general control now established, are stillsufficient to beget insecurity among the populations that have felt thegood results of our control and thus delay the conferment upon them of thefuller measures of local self-government, of education, and of industrialand agricultural development which we stand ready to give to them. 

By the spring of this year the effective opposition of the dissatisfiedTagals to the authority of the United States was virtually ended, thusopening the door for the extension of a stable administration over much ofthe territory of the Archipelago. Desiring to bring this about, I appointedin March last a civil Commission composed of the Hon. William H. Taft, ofOhio; Prof. Dean C. Worcester, of Michigan; the Hon. Luke I. Wright, ofTennessee; the Hon. Henry C. Ide, of Vermont, and Prof. Bernard Moses, ofCalifornia. The aims of their mission and the scope of their authority areclearly set forth in my instructions of April 7, 1900, addressed to theSecretary of War to be transmitted to them:

In the message transmitted to the Congress on the 5th of December, 1899, Isaid, speaking of the Philippine Islands: "As long as the insurrectioncontinues the military arm must necessarily be supreme. But there is noreason why steps should not be taken from time to time to inaugurategovernments essentially popular in their form as fast as territory is heldand controlled by our troops. To this end I am considering the advisabilityof the return of the Commission, or such of the members thereof as can besecured, to aid the existing authorities and facilitate this workthroughout the islands. "

To give effect to the intention thus expressed, I have appointed Hon. William H. Taft, of Ohio; Prof. Dean C. Worcester, of Michigan; Non. LukeI. Wright, of Tennessee; Hon. Henry C. Ide, of Vermont, and Prof. BernardMoses, of California, Commissioners to the Philippine Islands to continueand perfect the work of organizing and establishing civil governmentalready commenced by the military authorities, subject in all respects toany laws which Congress may hereafter enact. 

The Commissioners named will meet and act as a board, and the Hon. WilliamH. Taft t is designated as president of the board. It is probable that thetransfer of authority from military commanders to civil officers will begradual and will occupy a considerable period. Its successfulaccomplishment and the maintenance of peace and order in the meantime willrequire the most perfect co-operation between the civil and militaryauthorities in the islands, and both should be directed during thetransition period by the same Executive Department. The Commission willtherefore report to the Secretary of War, and all their action will besubject to your approval and control. 

You will instruct the Commission to proceed to the city of Manila, wherethey will make their principal office, and to communicate with the MilitaryGovernor of the Philippine Islands, whom you will at the same time directto render to them every assistance within his power in the performance oftheir duties. Without hampering them by too specific instructions, theyshould in general be enjoined, after making themselves familiar with theconditions and needs of the country, to devote their attention in the firstinstance to the establishment of municipal governments, in which thenatives of the islands, both in the cities and in the rural communities, shall be afforded the opportunity to manage their own local affairs to thefullest extent of which they are capable and subject to the least degree ofsupervision and control which a careful study of their capacities andobservation of the workings of native control show to be consistent withthe maintenance of law, order, and loyalty. 

The next subject in order of importance should be the organization ofgovernment in the larger administrative divisions corresponding tocounties, departments, or provinces, in which the common interests of manyor several municipalities falling within the same tribal lines, or the samenatural geographical limits, may best be subserved by a commonadministration. Whenever the Commission is of the opinion that thecondition of affairs in the islands is such that the central administrationmay safely be transferred from military to civil control they will reportthat conclusion to you, with their recommendations as to the form ofcentral government to be established for the purpose of taking over thecontrol. 

Beginning with the 1st day of September, 1900, the authority to exercise, subject to my approval, through the Secretary of War, that part of thepower of government in the Philippine Islands which is of a legislativenature is to be transferred from the Military Governor of the islands tothis Commission, to be thereafter exercised by them in the place and steadof the Military Governor, under such rules and regulations as you shallprescribe, until the establishment of the civil central government for theislands contemplated in the last foregoing paragraph, or until Congressshall otherwise provide. Exercise of this legislative authority willinclude the making of rules and orders, having the effect of law, for theraising of revenue by taxes, customs duties, and imposts; the appropriationand expenditure of public funds of the islands; the establishment of aneducational system throughout the islands; the establishment of a systemto secure an efficient civil service; the organization and establishment ofcourts; the organization and establishment of municipal and departmentalgovernments, and all other matters of a civil nature for which the MilitaryGovernor is now competent to provide by rules or orders of a legislativecharacter. 

The Commission will also have power during the same period to appoint tooffice such officers under the judicial, educational, and civil-servicesystems and in the municipal and departmental governments as shall beprovided for. Until the complete transfer of control the Military Governorwill remain the chief executive head of the government of the islands, andwill exercise the executive authority now possessed by him and not hereinexpressly assigned to the Commission, subject, however, to the rules andorders enacted by the Commission in the exercise of the legislative powersconferred upon them. In the meantime the municipal and departmentalgovernments will continue to report to the Military Governor and be subjectto his administrative supervision and control, under your direction, butthat supervision and control will be confined within the narrowest limitsconsistent with the requirement that the powers of government in themunicipalities and departments shall be honestly and effectively exercisedand that law and order and individual freedom shall be maintained. 

All legislative rules and orders, establishments of government, andappointments to office by the Commission will take effect immediately, orat such times as they shall designate, subject to your approval and actionupon the coming in of the Commission's reports, which are to be made fromtime to time as their action is taken. Wherever civil governments areconstituted under the direction of the Commission such military posts, garrisons, and forces will be continued for the suppression of insurrectionand brigandage and the maintenance of law and order as the MilitaryCommander shall deem requisite, and the military forces shall be at alltimes subject, under his orders, to the call of the civil authorities forthe maintenance of law and order and the enforcement of their authority. 

In the establishment of municipal governments the Commission will take asthe basis of their work the governments established by the MilitaryGovernor under his order of August 8, 1899. And under the report of theboard constituted by the Military Governor by his order of January 29, 1900, to formulate and report a plan of municipal government, of which HisHonor Cayetano Arellano, President of the Audiencia, was chairman, and theywill give to the conclusions of that board the weight and considerationwhich the high character and distinguished abilities of its membersjustify. 

In the constitution of departmental or provincial governments they willgive especial attention to the existing government of the island of Negros, constituted, with the approval of the people of that island, under theorder of the Military Governor of July 22, 1899, and after verifying, sofar as may be practicable, the reports of the successful working of thatgovernment they will be guided by the experience thus acquired so far as itmay be applicable to the condition existing in other portions of thePhilippines. They will avail themselves, to the fullest degree practicable, of the conclusions reached by the previous Commission to the Philippines. 

In the distribution of powers among the governments organized by theCommission, the presumption is always to be in favor of the smallersubdivision, so that all the powers which can properly be exercised by themunicipal government shall be vested in that government, and all the powersof a more general character which can be exercised by the departmentalgovernment shall be vested in that government, and so that in thegovernmental system, which is the result of the process, the centralgovernment of the islands, following the example of the distribution of thepowers between the States and the National Government of the United States, shall have no direct administration except of matters of purely generalconcern, and shall have only such supervision and control over localgovernments as may be necessary to secure and enforce faithful andefficient administration by local officers. 

The many Different degrees of civilization and varieties of custom andcapacity among the people of the different islands preclude very definiteinstruction as to the part which the people shall take in the selection oftheir own officers; but these general rules are to be observed: That in allcases the municipal officers, who administer the local affairs of thepeople, are to be selected by the people, and that wherever officers ofmore extended jurisdiction are to be selected in any way, natives of theislands are to be preferred, and if they can be found competent and willingto perform the duties, they are to receive the offices in preference to anyothers. 

It will be necessary to fill some offices for the present with Americanswhich after a time may well be filled by natives of the islands. As soon aspracticable a system for ascertaining the merit and fitness of candidatesfor civil office should be put in force. An indispensable qualification forall offices and positions of trust and authority in the islands must beabsolute and unconditional loyalty to the United States, and absolute andunhampered authority and power to remove and punish any officer deviatingfrom that standard must at all times be retained in the hands of thecentral authority of the islands. 

In all the forms of government and administrative provisions which they areauthorized to prescribe the Commission should bear in mind that thegovernment which they are establishing is designed not for oursatisfaction, or for the expression of our theoretical views, but for thehappiness, peace, and prosperity of the people of the Philippine Islands, and the measures adopted should be made to conform to their customs, theirhabits, and even heir prejudices, to the fullest extent consistent with theaccomplishment of the Indispensable requisites of just and effectivegovernment. 

At the same time the Commission should bear in mind, and the people of theislands should be made plainly to understand, that there are certain greatprinciples of government which have been made the basis of our governmentalsystem which we deem essential to the rule of law and the maintenance ofindividual freedom, and of which they have, unfortunately, been denied theexperience possessed by us; that there are also certain practical rules ofgovernment which we have found to be essential to the preservation of thesegreat principles of liberty and law, and that these principles and theserules of government must be established and maintained in their islands forthe sake of their liberty and happiness, however much they may conflictwith the customs or laws of procedure with which they are familiar. 

It is evident that the most enlightened thought of the Philippine Islandsfully appreciates the importance of these principles and rules, and theywill inevitably within a short time command universal assent. Upon everydivision and branch of the government of the Philippines, therefore, mustbe imposed these inviolable rules:

That no person shall be deprived of life, liberty, or property without dueprocess of law; that private property shall not be taken for public usewithout just compensation; that in all criminal prosecutions the accusedshall enjoy the right to a speedy and public trial, to be informed of thenature and cause of the accusation, to be confronted with the witnessesagainst him, to have compulsory process for obtaining witnesses in hisfavor, and to have the assistance of counsel for his defense; thatexcessive bail shall not be required, nor excessive fines imposed, norcruel and unusual punishment inflicted; that no person shall be put twicein jeopardy for the same offense, or be compelled in any criminal case tobe a witness against himself; that the right to be secure againstunreasonable searches and seizures shall not be violated; that neitherslavery nor involuntary servitude shall exist except as a punishment forcrime; that no bill of attainder or ex-post facto law shall be passed; thatno law shall be passed abridging the freedom of speech or of the press, orthe rights of the people to peaceably assemble and petition the Governmentfor a redress of grievances; that no law shall be made respecting anestablishment of religion, or prohibiting the free exercise thereof, andthat the free exercise and enjoyment of religious profession and worshipwithout discrimination or preference shall forever be allowed. 

It will be the duty of the Commission to make a thorough investigation intothe titles to the large tracts of land held or claimed by individuals or byreligious orders; into the justice of the claims and complaints madeagainst such landholders by the people of the island or any part of thepeople, and to seek by wise and peaceable measures a just settlement of thecontroversies and redress of wrongs which have caused strife and bloodshedin the past. In the performance of this duty the Commission is enjoined tosee that no injustice is done; to have regard for substantial rights andequity, disregarding technicalities so far as substantial right permits, and to observe the following rules:

That the provision of the Treaty of Paris pledging the United States to theprotection of all rights of property in the islands, and as well theprinciple of our own Government which prohibits the taking of privateproperty without due process of law, shall not be violated; that thewelfare of the people of the islands, which should be a paramountconsideration, shall be attained consistently with this rule of propertyright; that if it becomes necessary for the public interest of the peopleof the islands to dispose of claims to property which the Commission findsto be not lawfully acquired and held disposition shall be made thereof bydue legal procedure, in which there shall be full opportunity for fair andimpartial hearing and judgment; that if the same public interests requirethe extinguishment of property rights lawfully acquired and held duecompensation shall be made out of the public treasury therefore; that noform of religion and no minister of religion shall be forced upon anycommunity or upon any citizen of the islands; that, upon the other hand, nominister of religion shall be interfered with or molested in following hiscalling, and that the separation between State and Church shall be real, entire, and absolute. 

It will be the duty of the Commission to promote and extend, and, as theyfind occasion, to improve the system of education already inaugurated bythe military authorities. In doing this they should regard as of firstimportance the extension of a system of primary education which shall befree to all, and which shall tend to fit the people for the duties ofcitizenship and for the ordinary avocations of a civilized community. Thisinstruction should be given in the first instance in every part of theislands in the language of the people. In view of the great number oflanguages spoken by the different tribes, it is especially important to theprosperity of the islands that a common medium of communication may beestablished, and it is obviously desirable that this medium should be theEnglish language. Especial attention should be at once given to affordingfull opportunity to all the people of the islands to acquire the use of theEnglish language. 

It may be well that the main changes which should be made in the system oftaxation and in the body of the laws under which the people are governed, except such changes as have already been made by the military government, should be relegated to the civil government which is to be establishedunder the auspices of the Commission. It will, however, be the duty of theCommission to inquire diligently as to whether there are any furtherchanges which ought not to be delayed, and if so, they are authorized tomake such changes subject to your approval. In doing so they are to bear inmind that taxes which tend 6 penalize or repress industry and enterpriseare to be avoided; that provisions for taxation should be simple, so thatthey may be understood by the people; that they should affect the fewestpracticable subjects of taxation which will serve for the generaldistribution of the burden. 

The main body of the laws which regulate the rights and obligations of thepeople should be maintained with as little interference as possible. Changes made should be mainly in procedure, and in the criminal laws tosecure speedy and impartial trials, and at the same time effectiveadministration and respect for individual rights. 

In dealing with the uncivilized tribes of the islands the Commission shouldadopt the same course followed by Congress in permitting the tribes of ourNorth American Indians to maintain their tribal organization andgovernment, and under which many of those tribes are now living in peaceand contentment, surrounded by a civilization to which they are unable orunwilling to conform. Such tribal governments should, however, be subjectedto wise and firm regulation, and, without undue or petty interference, constant and active effort should be exercised to prevent barbarouspractices and introduce civilized customs. 

Upon all officers and employees of the United States, both civil andmilitary, should be impressed a sense of the duty to observe not merely thematerial but the personal and social rights of the people of the islands, and to treat them with the same courtesy and respect for their personaldignity which the people of the United States are accustomed W require fromeach other. 

The articles of capitulation of the city of Manila on the 13th of August, 1898, concluded with these words:

"This city, its inhabitants, its churches and religious worship, itseducational establishments, and its private property of all descriptions, are placed under the special safeguard of the faith and honor of theAmerican Army. "

I believe that this pledge has been faithfully kept. As high and sacred anobligation rests upon the Government of the United States to giveprotection for property and life, civil and religious freedom, and wise, firm, and unselfish guidance in the paths of peace and prosperity to allthe people of the Philippine Islands. I charge this Commission to labor forthe full performance of this obligation, which concerns the honor andconscience of their country, in the firm hope that through their labors allthe inhabitants of the Philippine Islands may come to look back withgratitude to the day when God gave victory to American arms at Manila andset their land under the sovereignty and the protection of the people ofthe United States. 

Coincidently with the entrance of the Commission upon its labors I causedto be issued by General MacArthur, the Military Governor of thePhilippines, on June 21, 1900, a proclamation of amnesty in generous terms, of which many of the insurgents took advantage, among them a number ofimportant leaders. 

This Commission, composed of eminent citizens representing the diversegeographical and political interests of the country, and bringing to theirtask the ripe fruits of long and intelligent service in educational, administrative, and judicial careers, made great progress from the outset. As early as August 21, 1900, it submitted a preliminary report, which willbe laid before the Congress, and from which it appears that already thegood effects of returning order are felt; that business, interrupted byhostilities, is improving as peace extends; that a larger area is undersugar cultivation than ever before; that the customs revenues are greaterthan at any time during the Spanish rule; that economy and efficiency inthe military administration have created a surplus fund of $6, 000, 000, available for needed public improvements; that a stringent civil-servicelaw is in preparation; that railroad communications are expanding, openingup rich districts, and that a comprehensive scheme of education is beingorganized. 

Later reports from the Commission show yet more encouraging advance towardinsuring the benefits of liberty and good government to the Filipinos, inthe interest of humanity and with the aim of building up an enduring, self-supporting, and self-administering community in those far easternseas. I would impress upon the Congress that whatever legislation may beenacted in respect to the Philippine Islands should be along these generouslines. The fortune of war has thrown upon this nation an unsought trustwhich should be unselfishly discharged, and devolved upon this Government amoral as well as material responsibility toward these millions whom we havefreed from an oppressive yoke. 

I have on another occasion called the Filipinos the wards of the nation. Our obligation as guardian was not lightly assumed; it must not beotherwise than honestly fulfilled, aiming first of all to benefit those whohave come under our fostering care. It is our duty so to treat them thatour flag may be no less beloved in the mountains of Luzon and the fertilezones of Mindanao and Negros than it is at home, that there as here itshall be the revered symbol of liberty, enlightenment, and progress inevery avenue of development. 

The Filipinos are a race quick to learn and to profit by knowledge He wouldbe rash who, with the teachings of contemporaneous history in view, wouldfix a limit to the degree of culture and advancement yet within the reachof these people if our duty toward them be faithfully performed. 

The civil government of Puerto Rico provided for by the act of the Congressapproved April 12, 1900 is in successful operation The courts have beenestablished. The Governor and his associates, working intelligently andharmoniously, are meeting with Commendable success. 

On the 6th of November a general election was held in the island formembers of the Legislature, and the body elected has been called to conveneon the first Monday of December. 

I recommend that legislation be enacted by the Congress conferring upon theSecretary of the Interior supervision over the public lands in Puerto Rico, and that he be directed to ascertain the location and quantity of lands thetitle to which remained in the Crown of Spain at the date of cession ofPuerto Rico to the United States, and that appropriations necessary forsurveys be made, and that the methods of the disposition of such lands beprescribed by law. 

On the 25th of July, 1900, I directed that a call be issued for an electionin Cuba for members of a constitutional convention to frame a constitutionas a basis for a stable and independent government in the island. Inpursuance thereof the Military Governor issued the following instructions:Whereas the Congress of the United States, by its joint resolution of April20, 1898, declared:

"That the people of the island of Cuba are, and of right ought to be, freeand independent. 

"That the United States hereby disclaims any disposition or intention toexercise sovereignty, jurisdiction, or control over said island except forthe pacification thereof, and asserts its determination, when that isaccomplished, to leave the government and control of the island to itspeople;"

And whereas, the people of Cuba have established municipal governments, deriving their authority from the suffrages of the people given under justand equal laws, and are now ready, in like manner, to proceed to theestablishment of a general government which shall assume and exercisesovereignty, jurisdiction, and control over the island:

Therefore, it is ordered that a general election be held in the island ofCuba on the third Saturday of September, in the year nineteen hundred, toelect delegates to a convention to meet in the city of Havana at twelveo'clock noon on the first Monday of November, in the year nineteen hundred, to frame and adopt a constitution for the people of Cuba, and as a partthereof to provide for and agree with the Government of the United Statesupon the relations to exist between that Government and the Government ofCuba, and to provide for the election by the people of officers under suchconstitution and the transfer of government to the officers so elected. 

The election will be held in the several voting precincts of the islandunder, and pursuant to, the provisions of the electoral law of April 18, 1900, and the amendments thereof. The election was held on the 15th ofSeptember, and the convention assembled on the 5th of November, 1900, andis now in session. 

In calling the convention to order, the Military Governor of Cuba made thefollowing statement: As Military Governor of the island, representing thePresident of the United States, I call this convention to order. 

It will be your duty, first, to frame and adopt a constitution for Cuba, and when that has been done to formulate what in your opinion ought to bethe relations between Cuba and the United States. 

The constitution must be adequate to secure a stable, orderly, and freegovernment. 

When you have formulated the relations which in your opinion ought to existbetween Cuba and the United States the Government of the United States willdoubtless take such action on its part as shall lead to a final andauthoritative agreement between the people of the two countries to thepromotion of their common interests. 

All friends of Cuba will follow your deliberations with the deepestinterest, earnestly desiring that you shall reach just conclusions, andthat by the dignity, individual self-restraint, and wise conservatism whichshall characterize your proceedings the capacity of the Cuban people forrepresentative government may be signally illustrated. 

The fundamental distinction between true representative government anddictatorship is that in the former every representative of the people, inwhatever office, confines himself strictly within the limits of his definedpowers. Without such restraint there can be no free constitutionalgovernment. 

Under the order pursuant to which you have been elected and convened youhave no duty and no authority to take part in the present government of theisland. Your powers are strictly limited by the terms of that order. Whenthe convention concludes its labors I will transmit to the Congress theconstitution as framed by the convention for its consideration and for suchaction as it may deem advisable. 

I renew the recommendation made in my special message of February 10, 1899, as to the necessity for cable communication between the United States andHawaii, with extension to Manila. Since then circumstances have strikinglyemphasized this need. Surveys have shown the entire feasibility of a chainof cables which at each stopping place shall touch on American territory, so that the system shall be under our own complete control. Manila oncewithin telegraphic reach, connection with the systems of the Asiatic coastwould open increased and profitable opportunities for a more direct cableroute from our shores to the Orient than is now afforded by thetrans-Atlantic, continental, and trans-Asian lines. I urge attention tothis important matter. 

The present strength of the Army is 100, 000 men--65, 000 regulars and35, 000 volunteers. Under the act of March 2, 1899, on the 30th of June nextthe present volunteer force will be discharged and the Regular Army will bereduced to 2, 447 officers and 29, 025 enlisted men. 

In 1888 a Board of Officers convened by President Cleveland adopted acomprehensive scheme of coast-defense fortifications which involved theoutlay of something over one hundred million dollars. This plan receivedthe approval of the Congress, and since then regular appropriations havebeen made and the work of fortification has steadily progressed. 

More than sixty millions of dollars have been invested in a great number offorts and guns, with all the complicated and scientific machinery andelectrical appliances necessary for their use. The proper care of thisdefensive machinery requires men trained in its use. The number of mennecessary to perform this duty alone is ascertained by the War Department, at a minimum allowance, to be 18, 420. 

There are fifty-eight or more military posts in the United States otherthan the coast-defense fortifications. 

The number of these posts is being constantly increased by the Congress. More than $22, 000, 000 have been expended in building and equipment, andthey can only be cared for by the Regular Army. The posts now in existenceand others to be built provide for accommodations for, and if fullygarrisoned require, 26, 000 troops. Many of these posts are along ourfrontier or at important strategic points, the occupation of which isnecessary. 

We have in Cuba between 5, 000 and 6, 000 troops. For the present our troopsin that island cannot be withdrawn or materially diminished, and certainlynot until the conclusion of the labors of the constitutional convention nowin session and a government provided by the new constitution shall havebeen established and its stability assured. 

In Puerto Rico we have reduced the garrisons to 1, 636, which includes 879native troops. There is no room for further reduction here. 

We will be required to keep a considerable force in the Philippine Islandsfor some time to come. From the best information obtainable we will needthere for the immediate future from 45, 000 to 60, 000 men. I am sure thenumber may be reduced as the insurgents shall come to acknowledge theauthority of the United States, of which there are assuring indications. 

It must be apparent that we will require an army of about 60, 000, and thatduring present conditions in Cuba and the Philippines the President shouldhave authority to increase the force to the present number of 100, 000. Included in this number authority should be given to raise native troops inthe Philippines up to 15, 000, which the Taft Commission believe will bemore effective in detecting and suppressing guerrillas, assassins, andladrones than our own soldiers. 

The full discussion of this subject by the Secretary of War in his annualreport is called to your earnest attention. 

I renew the recommendation made in my last annual message that the Congressprovide a special medal of honor for the volunteers, regulars, sailors, andmarines on duty in the Philippines who voluntarily remained in the serviceafter their terms of enlistment had expired. 

I favor the recommendation of the Secretary of War for the detail oilofficers from the line of the Army when vacancies occur in theAdjutant-General's Department, Inspector-General's Department, Quartermaster's Department, Subsistence Department, Pay Department, Ordnance Department, and Signal Corps. 

The Army cannot be too highly commended for its faithful and effectiveservice in active military operations in the field and the difficult workof civil administration. 

The continued and rapid growth of the postal service is a sure index of thegreat and increasing business activity of the country. Its most strikingnew development is the extension of rural free delivery. This has comealmost wholly within the last year. At the beginning of the fiscal year1899, 1900 the number of routes in operation was only 391, and most ofthese had been running less than twelve months. On the 15th of November, 1900, the number had increased to 2, 614, reaching into forty-four Statesand Territories, and serving a population of 1, 801, 524. The number ofapplications now pending and awaiting action nearly equals all thosegranted up to the present time, and by the close of the current fiscal yearabout 4, 000 routes will have been established, providing for the dailydelivery of mails at the scattered homes of about three and a half millionsof rural population. 

This service ameliorates the isolation of farm life, conduces to goodroads, and quickens and extends the dissemination of general information. Experience thus far has tended to allay the apprehension that it would beso expensive as to forbid its general adoption or make it a serious burden. Its actual application has shown that it increases postal receipts, and canbe accompanied by reductions in other branches of the service, so that theaugmented revenues and the accomplished savings together materially reducethe net cost. The evidences which point to these conclusions are presentedin detail in the annual report of the Postmaster-General, which with itsrecommendations is commended to the consideration of the Congress. The fulldevelopment of this special service, however, requires such a large outlayof money that it should be undertaken only after a careful study andthorough understanding of all that it involves. 

Very efficient service has been rendered by the Navy in connection with theinsurrection in the Philippines and the recent disturbance in China. 

A very satisfactory settlement has been made of the long-pending questionof the manufacture of armor plate. A reasonable price has been secured andthe necessity for a Government armor plant avoided. 

I approve of the recommendations of the Secretary for new vessels and foradditional officers and men which the required increase of the Navy makesnecessary. I commend to the favorable action of the Congress the measurenow pending for the erection of a statue to the memory of the late AdmiralDavid D. Porter. I commend also the establishment of a national navalreserve and of the grade of vice-admiral. Provision should be made, asrecommended by the Secretary, for suitable rewards for special merit. Manyofficers who rendered the most distinguished service during the recent warwith Spain have received in return no recognition from the Congress. 

The total area of public lands as given by the Secretary of the Interior isapproximately 1, 071, 881, 662 acres, of which 917, 135, 880 acres areundisposed of and 154, 745, 782 acres have been reserved for variouspurposes. The public lands disposed of during the year amount to13, 453, 887. 96 acres, including 62, 423. 09 acres of Indian lands, an increaseOf 4, 271, 474. 80 over the preceding year. The total receipts from the saleof public lands during the fiscal year were $4, 379, 758. 10, an increase of$1, 309, 620. 76 over the preceding year. 

The results obtained from our forest policy have demonstrated its wisdomand the necessity in the interest of the public for its continuance andincreased appropriations by the Congress for the carrying on of the work. On June 30, 1900, there were thirty-seven forest reserves, created byPresidential proclamations under section 24 Of the act of March 3, 1891, embracing an area Of 46, 425, 529 acres. 

During the past year the Olympic Reserve, in the State of Washington, wasreduced 265, 040 acres, leaving its present area at 1, 923, 840 acres. ThePrescott Reserve, in Arizona, was increased from 10, 240 acres to 423, 680acres, and the Big Horn Reserve, in Wyoming, was increased from 1, 127, 680acres to 1, 180, 800 acres. A new reserve; the Santa Ynez, in California, embracing an area of 145, 000 acres, was created during this year. OnOctober 10, 1900, the Crow Creek Forest Reserve, in Wyoming, was created, with an area of 56, 320 acres. 

At the end of the fiscal year there were on the pension roll 993, 529 names, a net increase Of 2, 010 over the fiscal year 1899. The number added to therolls during the year was 45, 344. The amount disbursed for Army pensionsduring the year was $134, 700, 597. 24 and for Navy pensions $3, 761, 533. 41, atotal of $138, 462, 130. 65, leaving an unexpended balance of $5, 542, 768. 25 tobe covered into the Treasury, which shows an increase over the previousyear's expenditure Of $107, 077. 70. There were 684 names added to the rollsduring the year by special acts passed at the first session of theFifty-sixth Congress. 

The act of May 9, 1900, among other things provides for an extension ofincome to widows pensioned under said act to $250 per annum. The Secretaryof the Interior believes that by the operations of this act the number ofpersons pensioned under it will increase and the increased annual paymentfor pensions will be between $3, 000, 000 and $4, 000, 000. 

The Government justly appreciates the services of its soldiers and sailorsby making pension payments liberal beyond precedent to them, their widowsand orphans. 

There were 26, 540 letters patent granted, including reissues and designs, during the fiscal year ended June 30, 1900; 1, 660 trademarks, 682 labels, and 93 prints registered. The number of patents which expired was 19, 988. The total receipts for patents were $1, 358, 228. 35. The expenditures were$1, 247, 827. 58, showing a surplus Of $110, 400. 77

The attention of the Congress is called to the report of the Secretary ofthe Interior touching the necessity for the further establishment ofschools in the Territory of Alaska, and favorable action is invitedthereon. 

Much interesting information is given in the report of the Governor ofHawaii as to the progress and development of the islands during the periodfrom July 7, 1898, the date of the approval of the joint resolution of theCongress providing for their annexation, up to April 30, 1900, the date ofthe approval of the act providing a government for the Territory, andthereafter. 

The last Hawaiian census, taken in the year 1896, gives a total populationof 109, 020, Of Which 31, 019 were native Hawaiians. The number of Americansreported was 8, 485. The results of the Federal census, taken this year, show the islands to have a total population Of 154, 001, showing an increaseover that reported in 1896 of 44, 981, or 41. 2 per cent. 

There has been marked progress in the educational, agricultural, andrailroad development of the islands. 

In the Territorial act of April 30, 1900, section 7 of said act repealsChapter 34 Of the Civil Laws of Hawaii whereby the Government was to assistin encouraging and developing the agricultural resources of the Republic, especially irrigation. The Governor of Hawaii recommends legislationlooking to the development of such water supply as may exist on the publiclands, with a view of promoting land settlement. The earnest considerationof the Congress is invited to this important recommendation and others, asembodied in the report of the Secretary of the Interior. 

The Director of the Census states that the work in connection with theTwelfth Census is progressing favorably. This national undertaking, orderedby the Congress each decade, has finally resulted in the collection of anaggregation of statistical facts to determine the industrial growth of thecountry, its manufacturing and mechanical resources, its richness in minesand forests, the number of its agriculturists, their farms and products, its educational and religious opportunities, as well as questionspertaining to sociological conditions. 

The labors of the officials in charge of the Bureau indicate that the fourimportant and most desired subjects, namely, population, agricultural, manufacturing, and vital statistics, will be completed within the limitprescribed by the law of March 3, 1899. 

The field work incident to the above inquiries is now practically finished, and as a result the population of the States and Territories, including theHawaiian Islands and Alaska, has been announced. The growth of populationduring the last decade amounts to over 13, 000, 000, a greater numericalincrease than in any previous census in the history of the country. 

Bulletins will be issued as rapidly as possible giving the population byStates and Territories, by minor civil divisions. Several announcements ofthis kind have already been made, and it is hoped that the list will becompleted by January 1. Other bulletins giving the results of themanufacturing and agricultural inquiries will be given to the public asrapidly as circumstances will admit. 

The Director, while confident of his ability to complete the differentbranches of the undertaking in the allotted time, finds himself embarrassedby the lack of a trained force properly equipped for statistical work, thusraising the question whether in the interest of economy and a thoroughexecution of the census work there should not be retained in the Governmentemploy a certain number of experts not only to aid in the preliminaryorganization prior to the taking of the decennial census, but in additionto have the advantage in the field and office work of the Bureau of trainedassistants to facilitate the early completion of this enormousundertaking. 

I recommend that the Congress at its present session apportionrepresentation among the several States as provided by the Constitution. 

The Department of Agriculture has been extending its work during the pastyear, reaching farther for new varieties of seeds and plants; co-operatingmore fully with the States and Territories in research along useful lines;making progress in meteorological work relating to lines of wirelesstelegraphy and forecasts for ocean-going vessels; continuing inquiry as toanimal disease; looking into the extent and character of food adulteration;outlining plans for the care, preservation, and intelligent harvesting ofour woodlands; studying soils that producers may cultivate with betterknowledge of conditions, and helping to clothe desert places with grassessuitable to our and regions. Our island possessions are being consideredthat their peoples may be helped to produce the tropical products now soextensively brought into the United States. Inquiry into methods ofimproving our roads has been active during the year; help has been given tomany localities, and scientific investigation of material in the States andTerritories has been inaugurated. Irrigation problems in our semiaridregions are receiving careful and increased consideration. 

An extensive exhibit at Paris of the products of agriculture has made thepeoples of many countries more familiar with the varied products of ourfields and their comparative excellence. 

The collection of statistics regarding our crops is being improved andsources of information are being enlarged, to the end that producers mayhave the earliest advices regarding crop conditions. There has never been atime when those for whom it was established have shown more appreciation ofthe services of the Department. 

In my annual message of December 5, 1898, I called attention to thenecessity for some amendment of the alien contract law. There still remainimportant features of the rightful application of the eight-hour law forthe benefit of labor and of the principle of arbitration, and I againcommend these subjects to the careful attention of the Congress. 

That there may be secured the best service possible in the PhilippineIslands, I have issued, under date of November 30, 1900, the followingorder: The United States Civil Service Commission is directed to rendersuch assistance as may be practicable to the Civil Service Board, createdunder the act of the United States Philippine Commission, for theestablishment and maintenance of an honest and efficient civil service inthe Philippine Islands, and for that purpose to conduct examinations forthe civil service of the Philippine islands, upon the request of the CivilService Board of said islands, under such regulations as may be agreed uponby the said Board and the said United States Civil Service Commission. TheCivil Service Commission is greatly embarrassed in its work for want of anadequate permanent force for clerical and other assistance. Its needs arefully set forth in its report. I invite attention to the report, andespecially urge upon the Congress that this important bureau of the publicservice, which passes upon the qualifications and character of so large anumber of the officers and employees of the Government, should be supportedby all needed appropriations to secure promptness and efficiency. 

I am very much impressed with the statement made by the heads of all theDepartments of the urgent necessity of a hall of public records. In everydepartmental building in Washington, so far as I am informed, the space forofficial records is not only exhausted, but the walls of rooms are linedwith shelves, the middle floor space of many rooms is filled with thecases, and garrets and basements, which were never intended and areunfitted for their accommodation, are crowded with them. Aside from theinconvenience there is great danger, not only from fire, but from theweight of these records upon timbers not intended for their support. Thereshould be a separate building especially designed for the purpose ofreceiving and preserving the annually accumulating archives of the severalExecutive Departments. Such a hall need not be a costly structure, butshould be so arranged as to admit of enlargement from time to time. Iurgently recommend that the Congress take early action in this matter. 

I transmit to the Congress a resolution adopted at a recent meeting of theAmerican Bar Association concerning the proposed celebration of JohnMarshall Day, February 4, 1901. Fitting exercises have been arranged, andit is earnestly desired by the committee that the Congress may participatein this movement to honor the memory of the great jurist. 

The transfer of the Government to this city is a fact of great historicalinterest. Among the people there is a feeling of genuine pride in theCapital of the Republic. 

It is a matter of interest in this connection that in 1800 the populationof the District of Columbia was 14, 093; to-day it is 278, 718. Thepopulation of the city of Washington was then 3, 210; to-day it is 218, 196. 

The Congress having provided for "an appropriate national celebration ofthe Centennial Anniversary of the Establishment of the Seat of theGovernment in the District of Columbia, " the committees authorized by ithave prepared a programme for the 12th of December, 1900, which date hasbeen selected as the anniversary day. Deep interest has been shown in thearrangements for the celebration by the members of the committees of theSenate and House of Representatives, the committee of Governors appointedby the President, and the committees appointed by the citizens andinhabitants of the District of Columbia generally. The programme, inaddition to a reception and other exercises at the Executive Mansion, provides commemorative exercises to be held jointly by the Senate and Houseof Representatives in the Hall of the House of Representatives, and areception in the evening at the Corcoran Gallery of Art in honor of theGovernors of the States and Territories. 

In our great prosperity we must guard against the danger it invites ofextravagance in Government expenditures and appropriations; and the chosenrepresentatives of the people will, I doubt not, furnish an example intheir legislation of that wise economy which in a season of plenty husbandsfor the future. In this era of great business activity and opportunitycaution is not untimely. It will not abate, but strengthen, confidence. Itwill not retard, but promote, legitimate industrial and commercialexpansion. Our growing power brings with it temptations and perilsrequiring constant vigilance to avoid. It must not be used to inviteconflicts, nor for oppression, but for the more effective maintenance ofthose principles of equality and justice upon which our institutions andhappiness depend. Let us keep always in mind that the foundation of ourGovernment is liberty; its superstructure peace.