Miller Center

First Annual Message (December 6, 1881)

Chester A. Arthur

To the Senate and House of Representatives of the United States: 

An appalling calamity has befallen the American people since their chosenrepresentatives last met in the halls where you are now assembled. We mightelse recall with unalloyed content the rare prosperity with which throughoutthe year the nation has been blessed. Its harvests have been plenteous;its varied industries have thriven; the health of its people has been preserved;it has maintained with foreign governments the undisturbed relations ofamity and peace. For these manifestations of His favor we owe to Him whoholds our destiny in His hands the tribute of our grateful devotion. 

To that mysterious exercise of His will which has taken from us theloved and illustrious citizen who was but lately the head of the nationwe bow in sorrow and submission. 

The memory of his exalted character, of his noble achievements, andof his patriotic life will be treasured forever as a sacred possessionof the whole people. 

The announcement of his death drew from foreign governments and peoplestributes of sympathy and sorrow which history will record as signal tokensof the kinship of nations and the federation of mankind. 

The feeling of good will between our own Government and that of GreatBritain was never more marked than at present. In recognition of this pleasingfact I directed, on the occasion of the late centennial celebration atYorktown, that a salute be given to the British flag. 

Save for the correspondence to which I shall refer hereafter in relationto the proposed canal across the Isthmus of Panama, little has occurredworthy of mention in the diplomatic relations of the two countries. 

Early in the year the Fortune Bay claims were satisfactorily settledby the British Government paying in full the sum of 15,000 pounds, mostof which has been already distributed. As the terms of the settlement includedcompensation for injuries suffered by our fishermen at Aspee Bay, therehas been retained from the gross award a sum which is deemed adequate forthose claims. 

The participation of Americans in the exhibitions at Melbourne and Sydneywill be approvingly mentioned in the reports of the two exhibitions, soonto be presented to Congress. They will disclose the readiness of our countrymento make successful competition in distant fields of enterprise. 
Negotiations for an international copyright convention are in hopefulprogress. 

The surrender of Sitting Bull and his forces upon the Canadian frontierhas allayed apprehension, although bodies of British Indians still crossthe border in quest of sustenance. Upon this subject a correspondence hasbeen opened which promises an adequate understanding. Our troops have ordersto avoid meanwhile all collisions with alien Indians. 

The presence at the Yorktown celebration of representatives of the FrenchRepublic and descendants of Lafayette and of his gallant compatriots whowere our allies in the Revolution has served to strengthen the spirit ofgood will which has always existed between the two nations. 

You will be furnished with the proceedings of the Bimetallic Conferenceheld during the summer at the city of Paris. No accord was reached, buta valuable interchange of views was had, and the conference will next yearbe renewed. 

At the Electrical Exhibition and Congress, also held at Paris, thiscountry was creditably represented by eminent specialists, who, in theabsence of an appropriation, generously lent their efficient aid at theinstance of the State Department. While our exhibitors in this almost distinctivelyAmerican field of achievement have won several valuable awards, I recommendthat Congress provide for the repayment of the personal expenses incurredin the public interest by the honorary commissioners and delegates. 

No new questions respecting the status of our naturalized citizens inGermany have arisen during the year, and the causes of complaint, especiallyin Alsace and Lorraine, have practically ceased through the liberal actionof the Imperial Government in accepting our often-expressed views on thesubject. The application of the treaty of 1868 to the lately acquired Rhenishprovinces has received very earnest attention, and a definite and lastingagreement on this point is confidently expected. The participation of thedescendants of Baron von Steuben in the Yorktown festivities, and theirsubsequent reception by their American kinsmen, strikingly evinced theties of good will which unite the German people and our own. 

Our intercourse with Spain has been friendly. An agreement concludedin February last fixes a term for the labors of the Spanish and AmericanClaims Commission. The Spanish Government has been requested to pay thelate awards of that Commission, and will, it is believed, accede to therequest as promptly and courteously as on former occasions. 

By recent legislation onerous fines have been imposed upon Americanshipping in Spanish and colonial ports for slight irregularities in manifests.One ease of hardship is specially worthy of attention. The bark Masonic,bound for Japan, entered Manila in distress, and is there sought to beconfiscated under Spanish revenue laws for an alleged shortage in her transshippedcargo. Though efforts for her relief have thus far proved unavailing, itis expected that the whole matter will be adjusted in a friendly spirit. 

The Senate resolutions of condolence on the assassination of the CzarAlexander II were appropriately communicated to the Russian Government,which in turn has expressed its sympathy in our late national bereavement.It is desirable that our cordial relations with Russia should be strengthenedby proper engagements assuring to peaceable Americans who visit the Empirethe consideration which is due to them as citizens of a friendly state.This is especially needful with respect to American Israelites, whose classificationwith the native Hebrews has evoked energetic remonstrances from this Government. 

A supplementary consular agreement with Italy has been sanctioned andproclaimed, which puts at rest conflicts of jurisdiction in the case ofcrimes on shipboard. 

Several important international conferences have been held in Italyduring the year. At the Geographical Congress of Venice, the BeneficenceCongress of Milan, and the Hygienic Congress of Turin this country wasrepresented by delegates from branches of the public service or by privatecitizens duly accredited in an honorary capacity. It is hoped that Congresswill give such prominence to the results of their participation as theymay seem to deserve. 

The abolition of all discriminating duties against such colonial productionsof the Dutch East Indies as are imported hither from Holland has been alreadyconsidered by Congress. I trust that at the present session the mattermay be favorably concluded. 

The insecurity of life and property in many parts of Turkey has givenrise to correspondence with the Porte looking particularly to the betterprotection of American missionaries in the Empire. The condemned murdererof the eminent missionary Dr. Justin W. Parsons has not yet been executed,although this Government has repeatedly demanded that exemplary justicebe done. 

The Swiss Government has again solicited the good offices of our diplomaticand consular agents for the protection of its citizens in countries whereit is not itself represented. This request has, within proper limits, beengranted. 

Our agents in Switzerland have been instructed to protest against theconduct of the authorities of certain communes in permitting the emigrationto this country of criminals and other objectionable persons. Several suchpersons, through the cooperation of the commissioners of emigration atNew York, have been sent back by the steamers which brought them. A continuanceof this course may prove a more effectual remedy than diplomatic remonstrance. 

Treaties of commerce and navigation and for the regulation of consularprivileges have been concluded with Roumania and Servia since their admissioninto the family of European States. 

As is natural with contiguous states having like institutions and likeaims of advancement and development, the friendship of the United Statesand Mexico has been constantly maintained. This Government has lost nooccasion of encouraging the Mexican Government to a beneficial realizationof the mutual advantages which will result from more intimate commercialintercourse and from the opening of the rich interior of Mexico to railwayenterprise. I deem it important that means be provided to restrain thelawlessness unfortunately so common on the frontier and to suppress theforays of the reservation Indians on either side of the Rio Grande. 

The neighboring States of Central America have preserved internal peace,and their outward relations toward us have been those of intimate friendship.There are encouraging signs of their growing disposition to subordinatetheir local interests to those which are common to them by reason of theirgeographical relations. 

The boundary dispute between Guatemala and Mexico has afforded thisGovernment an opportunity to exercise its good offices for preventing arupture between those States and for procuring a peaceable solution ofthe question. I cherish strong hope that in view of our relations of amitywith both countries our friendly counsels may prevail. 

A special envoy of Guatemala has brought to me the condolences of hisGovernment and people on the death of President Garfield. 

The Costa Rican Government lately framed an engagement with Colombiafor settling by arbitration the boundary question between those countries,providing that the post of arbitrator should be offered successively tothe King of the Belgians, the King of Spain, and the President of the ArgentineConfederation. The King of the Belgians has declined to act, but I am notas yet advised of the action of the King of Spain. As we have certain interestsin the disputed territory which are protected by our treaty engagementswith one of the parties, it is important that the arbitration should notwithout our consent affect our rights, and this Government has accordinglythought proper to make its views known to the parties to the agreement,as well as to intimate them to the Belgian and Spanish Governments. 

The questions growing out of the proposed interoceanic waterway acrossthe Isthmus of Panama are of grave national importance. This Governmenthas not been unmindful of the solemn obligations imposed upon it by itscompact of 1846 with Colombia, as the independent and sovereign mistressof the territory crossed by the canal, and has sought to render them effectiveby fresh engagements with the Colombian Republic looking to their practicalexecution. The negotiations to this end, after they had reached what appearedto be a mutually satisfactory solution here, were met in Colombia by adisavowal of the powers which its envoy had assumed and by a proposal forrenewed negotiation on a modified basis. 

Meanwhile this Government learned that Colombia had proposed to theEuropean powers to join in a guaranty of the neutrality of the proposedPanama canal--a guaranty which would be in direct contravention of ourobligation as the sole guarantor of the integrity of Colombian territoryand of the neutrality of the canal itself. My lamented predecessor feltit his duty to place before the European powers the reasons which makethe prior guaranty of the United States indispensable, and for which theinterjection of any foreign guaranty might be regarded as a superfluousand unfriendly act. 

Foreseeing the probable reliance of the British Government on the provisionsof the Clayton-Bulwer treaty of 1850 as affording room for a share in theguaranties which the United States covenanted with Colombia four yearsbefore, I have not hesitated to supplement the action of my predecessorby proposing to Her Majesty's Government the modification of that instrumentand the abrogation of such clauses thereof as do not comport with the obligationsof the United States toward Colombia or with the vital needs of the twofriendly parties to the compact. 

This Government sees with great concern the continuance of the hostilerelations between Chile, Bolivia, and Peru. An early peace between theseRepublics is much to be desired, not only that they may themselves be sparedfurther misery and bloodshed, but because their continued antagonism threatensconsequences which are, in my judgment, dangerous to the interests of republicangovernment on this continent and calculated to destroy the best elementsof our free and peaceful civilization. 

As in the present excited condition of popular feeling in these countriesthere has been serious misapprehension of the position of the United States,and as separate diplomatic intercourse with each through independent ministersis sometimes subject, owing to the want of prompt reciprocal communication,to temporary misunderstanding, I have deemed it judicious at the presenttime to send a special envoy accredited to all and each of them, and furnishedwith general instructions which will, I trust, enable him to bring thesepowers into friendly relations. 

The Government of Venezuela maintains its attitude of warm friendshipand continues with great regularity its payment of the monthly quota ofthe diplomatic debt. Without suggesting the direction in which Congressshould act, I ask its attention to the pending questions affecting thedistribution of the sums thus far received. 

The relations between Venezuela and France growing out of the same debthave been for some time past in an unsatisfactory state, and this Government,as the neighbor and one of the largest creditors of Venezuela, has interposedits influence with the French Government with the view of producing a friendlyand honorable adjustment. 

I regret that the commercial interests between the United States andBrazil, from which great advantages were hoped a year ago, have sufferedfrom the withdrawal of the American lines of communication between theBrazilian ports and our own. 

Through the efforts of our minister resident at Buenos Ayres and theUnited States minister at Santiago, a treaty has been concluded betweenthe Argentine Republic and Chile, disposing of the long-pending Patagonianboundary question. It is a matter of congratulation that our Governmenthas been afforded the opportunity of successfully exerting its good influencefor the prevention of disagreements between these Republics of the Americancontinent. 

I am glad to inform you that the treaties lately negotiated with Chinahave been duly ratified on both sides and the exchange made at Peking.Legislation is necessary to carry their provisions into effect. The promptand friendly spirit with which the Chinese Government, at the request ofthe United States, conceded the modification of existing treaties shouldsecure careful regard for the interests and susceptibilities of that Governmentin the enactment of any laws relating to Chinese immigration. 

Those clauses of the treaties which forbid the participation of citizensor vessels of the United States in the opium trade will doubtless receiveyour approval. They will attest the sincere interest which our people andGovernment feel in the commendable efforts of the Chinese Government toput a stop to this demoralizing and destructive traffic. 

In relation both to China and Japan some changes are desirable in ourpresent system of consular jurisdiction. I hope at some future time tolay before you a scheme for its improvement in the entire East. 

The intimacy between our own country and Japan, the most advanced ofthe Eastern nations, continues to be cordial. I am advised that the Emperorcontemplates the establishment of full constitutional government, and thathe has already summoned a parliamentary congress for the purpose of effectingthe change. Such a remarkable step toward complete assimilation with theWestern system can not fail to bring Japan into closer and more beneficialrelationship with ourselves as the chief Pacific power. 

A question has arisen in relation to the exercise in that country ofthe judicial functions conferred upon our ministers and consuls. The indictment,trial, and conviction in the consular court at Yokohama of John Ross, amerchant seaman on board an American vessel, have made it necessary forthe Government to institute a careful examination into the nature and methodsof this jurisdiction. 

It appeared that Ross was regularly shipped under the flag of the UnitedStates, but was by birth a British subject. My predecessor felt it hisduty to maintain the position that during his service as a regularly shippedseaman on board an American merchant vessel Ross was subject to the lawsof that service and to the jurisdiction of the United States consular authorities. 

I renew the recommendation which has been heretofore urged by the Executiveupon the attention of Congress, that after the deduction of such amountas may be found due to American citizens the balance of the indemnity fundsheretofore obtained from China and Japan, and which are now in the handsof the State Department, be returned to the Governments of those countries. 

The King of Hawaii, in the course of his homeward return after a journeyaround the world, has lately visited this country. While our relationswith that Kingdom are friendly, this Government has viewed with concernthe efforts to seek replenishment of the diminishing population of theislands from outward sources, to a degree which may impair the native sovereigntyand independence, in which the United States was among the first to testifya lively interest. 

Relations of unimpaired amity have been maintained throughout the yearwith the respective Governments of Austria-Hungary, Belgium, Denmark, Hayti,Paraguay and Uruguay, Portugal, and Sweden and Norway. This may also besaid of Greece and Ecuador, although our relations with those States havefor some years been severed by the withdrawal of appropriations for diplomaticrepresentatives at Athens and Quito. It seems expedient to restore thosemissions, even on a reduced scale, and I decidedly recommend such a coursewith respect to Ecuador, which is likely within the near future to playan important part among the nations of the Southern Pacific. 

At its last extra session the Senate called for the text of the Genevaconvention for the relief of the wounded in war. I trust that this actionforeshadows such interest in the subject as will result in the adhesionof the United States to that humane and commendable engagement. 

I invite your attention to the propriety of adopting the new code ofinternational rules for the prevention of collisions on the high seas andof conforming the domestic legislation of the United States thereto, sothat no confusion may arise from the application of conflicting rules inthe case of vessels of different nationalities meeting in tidal waters.These international rules differ but slightly from our own. They have beenadopted by the Navy Department for the governance of the war ships of theUnited States on the high seas and in foreign waters, and, through theaction of the State Department in disseminating the rules and in acquaintingshipmasters with the option of conforming to them without the jurisdictionalwaters of the United States, they are now very generally known and obeyed. 

The State Department still continues to publish to the country the tradeand manufacturing reports received from its officers abroad. The successof this course warrants its continuance and such appropriation as may berequired to meet the rapidly increasing demand for these publications.With special reference to the Atlanta Cotton Exposition, the October numberof the reports was devoted to a valuable collection of papers on the cotton-goodstrade of the world. 

The International Sanitary Conference for which, in 1879, Congress madeprovision assembled in this city early in January last, and its sessionswere prolonged until March. Although it reached no specific conclusionsaffecting the future action of the participant powers, the interchangeof views proved to be most valuable. The full protocols of the sessionshave been already presented to the Senate. 

As pertinent to this general subject, I call your attention to the operationsof the National Board of Health. Established by act of Congress approvedMarch 3, 1879, its sphere of duty was enlarged by the act of June 2 inthe same year. By the last-named act the board was required to institutesuch measures as might be deemed necessary for preventing the introductionof contagious or infectious diseases from foreign countries into the UnitedStates or from one State into another. 

The execution of the rules and regulations prepared by the board andapproved by my predecessor has done much to arrest the progress of epidemicdisease, and has thus rendered substantial service to the nation. 

The International Sanitary Conference, to which I have referred, adopteda form of a bill of health to be used by all vessels seeking to enter theports of the countries whose representatives participated in its deliberations.This form has since been prescribed by the National Board of Health andincorporated with its rules and regulations, which have been approved byme in pursuance of law. 

The health of the people is of supreme importance. All measures lookingto their protection against the spread of contagious diseases and to theincrease of our sanitary knowledge for such purposes deserve attentionof Congress. 

The report of the Secretary of the Treasury presents in detail a highlysatisfactory exhibit of the state of the finances and the condition ofthe various branches of the public service administered by that Department. 

The ordinary revenues from all sources for the fiscal year ending June30, 1881, were: 
 

From customs  $198,159,676.02 
From internal revenue  135,264,385.51 
From sales of public lands 2,201,863.17 
From tax on circulation and deposits of national banks  8,116,115.72 
From repayment of interest by Pacific Railway companies  810,833.80 
From sinking fund for Pacific Railway companies 805,180.54 
From customs fees, fines, penalties, etc 1,225,514.86 
From fees--consular, letters patent, and lands 2,244,983.98 
From proceeds of sales of Government property 262,174.00 
From profits on coinage 3,468,485.61 
From revenues of the District of Columbia 2,016,199.23 
From miscellaneous sources 6,206,880.13 
Total ordinary receipts  360,782,292.57 
 

The ordinary expenditures for the same period were: 
  

For civil expenses  $17,941,177.19 
For foreign intercourse  1,093,954.92 
For Indians  6,514,161.09 
For pensions  50,059,279.62 
For the military establishment, including river and harbor improvements 
and arsenals 40,466,460.55 
For the naval establishment, including vessels, machinery, and 
improvements at navy-yards  15,686,671.66 
For miscellaneous expenditures, including public buildings, 
light-houses, and collecting the revenue  41,837,280.57 
For expenditures on account of the District of Columbia  3,543,912.03 
For interest on the public debt  82,508,741.18 
For premium on bonds purchased  1,061,248.78 
Total ordinary expenditures  260,712,887.59 
 

Leaving a surplus revenue of $100,069,404.98, which was applied as follows: 
  

To the redemption of--   
Bonds for the sinking fund  $74,371,200.00 
Fractional currency for the sinking fund  109,001.05 
Loan of February, 1861  7,418,000.00 
Ten-forties of 1864  2,016,150.00 
Five-twenties of 1862  18,300.00 
Five-twenties of 1864  3,400.00 
Five-twenties of 1865  37,300.00 
Consols of 1865  143,150.00 
Consols of 1867  959,150.00 
Consols of 1868 337,400.00 
Texan indemnity stock  1,000.00 
Old demand, compound-interest, and other notes  18,330.00 
And to the increase of cash in the Treasury  14,637,023.93 
 
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 100,069,404.98 
 

The requirements of the sinking fund for the year amounted to $90,786,064.02,which sum included a balance of $49,817,128.78, not provided for duringthe previous fiscal year. The sum of $74,480,20l.05 was applied to thisfund, which left a deficit of $16,305,873.47. The increase of the revenuesfor 1881 over those of the previous year was $29,352,901.10. It is estimatedthat the receipts during the present fiscal year will reach $400,000,000and the expenditures $270,000,000, leaving a surplus of $130,000,000 applicableto the sinking fund and the redemption of the public debt. 

I approve the recommendation of the Secretary of the Treasury that provisionbe made for the early retirement of silver certificates and that the actrequiring their issue be repealed. They were issued in pursuance of thepolicy of the Government to maintain silver at or near the gold standard,and were accordingly made receivable for all customs, taxes, and publicdues. About sixty-six millions of them are now outstanding. They form anunnecessary addition to the paper currency, a sufficient amount of whichmay be readily supplied by the national banks. 

In accordance with the act of February 28, 1878, the Treasury Departmenthas monthly caused at least two millions in value of silver bullion tobe coined into standard silver dollars. One hundred and two millions ofthese dollars have been already coined, while only about thirty-four millionsare in circulation. 

For the reasons which he specifies, I concur in the Secretary's recommendationthat the provision for coinage of a fixed amount each month be repealed,and that hereafter only so much be coined as shall be necessary to supplythe demand. 

The Secretary advises that the issue of gold certificates should notfor the present be resumed, and suggests that the national banks may properlybe forbidden by law to retire their currency except upon reasonable noticeof their intention so to do. Such legislation would seem to be justifiedby the recent action of certain banks on the occasion referred to in theSecretary's report. 

Of the fifteen millions of fractional currency still outstanding, onlyabout eighty thousand has been redeemed the past year. The suggestion thatthis amount may properly be dropped from future statements of the publicdebt seems worthy of approval. 

So also does the suggestion of the Secretary as to the advisabilityof relieving the calendar of the United States courts in the southern districtof New York by the transfer to another tribunal of the numerous suits therepending against collectors. 

The revenue from customs for the past fiscal year was $198,159,676.02,an increase of $11,637,611.42 over that of the year preceding. One hundredand thirty-eight million ninety-eight thousand five hundred and sixty-twodollars and thirty-nine cents of this amount was collected at the portof New York, leaving $50,251,113.63 as the amount collected at all theother ports of the country. Of this sum $47,977,137.63 was collected onsugar, melado, and molasses; $27,285,624.78 on wool and its manufactures;$21,462,534.34 on iron and steel and manufactures thereof; $19,038,665.81on manufactures of silk; $10,825,115.21 on manufactures of cotton, and$6,469,643.04 on wines and spirits, making a total revenue from these sourcesof $133,058,720.81. 

The expenses of collection for the past year were $6,419,345.20, anincrease over the preceding year of $387,410.04. Notwithstanding the increasein the revenue from customs over the preceding year, the gross value ofthe imports, including free goods, decreased over $25,000,000. The mostmarked decrease was in the value of unmanufactured wool, $14,023,682, andin that of scrap and pig iron, $12,810,671. The value of imported sugar,on the other hand, showed an increase of $7,457,474; of steel rails, $4,345,521;of barley, $2,154,204, and of steel in bars, ingots, etc., $1,620,046. 

Contrasted with the imports during the last fiscal year, the exportswere as follows: 
 

Domestic merchandise  $883,925,947 
Foreign merchandise  18,451,399 
  
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Total  902,377,346 
Imports of merchandise  642,664,628 
 
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Excess of exports over imports of merchandise  259,712,718 
Aggregate of exports and imports  1,545,041,974 
 

Compared with the previous year, there was an increase of $66,738,688in the value of exports of merchandise and a decrease of $25,290,118 inthe value of imports. The annual average of the excess of imports of merchandiseover exports thereof for ten years previous to June 30, 1873, was $104,706,922,but for the last six years there has been an excess of exports over importsof merchandise amounting to $1,180,668,105, an annual average of $196,778,017.The specie value of the exports of domestic merchandise was $376,616,473in 1870 and $883,925,947 in 1881, an increase of $507,309,474, or 135 percent. The value of imports was $435,958,408 in 1870 and $642,664,628 in1881, an increase of $206,706,220, or 47 per cent. 

During each year from 1862 to 1879, inclusive, the exports of specieexceeded the imports. The largest excess of such exports over imports wasreached during the year 1864, when it amounted to $92,280,929. But duringthe year ended June 30, 1880, the imports of coin and bullion exceededthe exports by $75,891,391, and during the last fiscal year the excessof imports over exports was $91,168,650. 

In the last annual report of the Secretary of the Treasury the attentionof Congress was called to the fact that $469,651,050 in 5 per cent bondsand $203,573,750 in 6 per cent bonds would become redeemable during theyear, and Congress was asked to authorize the refunding of these bondsat a lower rate of interest. The bill for such refunding having failedto become a law, the Secretary of the Treasury in April last notified theholders of the $195,690,400 6 per cent bonds then outstanding that thebonds would be paid at par on the 1st day of July following, or that theymight be "continued" at the pleasure of the Government, to bear interestat the rate of 3 1/2 per cent per annum. 

Under this notice $178,055,150 of the 6 per cent bonds were continuedat the lower rate and $17,635,250 were redeemed. 

In the month of May a like notice was given respecting the redemptionor continuance of the $439,841,350 of 5 per cent bonds then outstanding,and of these $401,504,900 were continued at 3 1/2 per cent per annum and$38,336,450 redeemed. 

The 6 per cent bonds of the loan of February 8, 1861, and of the Oregonwar debt, amounting together to $14,125,800, having matured during theyear, the Secretary of the Treasury gave notice of his intention to redeemthe same, and such as have been presented have been paid from the surplusrevenues. There have also been redeemed at par $16,179,100 of the 3 1/2per cent "continued" bonds, making a total of bonds redeemed or which haveceased to bear interest during the year of $123,969,650. 

The reduction of the annual interest on the public debt through thesetransactions is as follows: 
 

By reduction of interest to 3 1/2 per cent  $10,473,952.25 
By redemption of bonds  6,352,340.00 
 
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Total  16,826,292.25 
 

The 3 1/2 per cent bonds, being payable at the pleasure of the Government,are available for the investment of surplus revenues without the paymentof premiums. 

Unless these bonds can be funded at a much lower rate of interest thanthey now bear, I agree with the Secretary of the Treasury that no legislationrespecting them is desirable. 

It is a matter for congratulation that the business of the country hasbeen so prosperous during the past year as to yield by taxation a largesurplus of income to the Government. If the revenue laws remain unchanged,this surplus must year by year increase, on account of the reduction ofthe public debt and its burden of interest and because of the rapid increaseof our population. In 1860, just prior to the institution of our internal-revenuesystem, our population but slightly exceeded 30,000,000; by the censusof 1880 it is now found to exceed 50,000,000. It is estimated that evenif the annual receipts and expenditures should continue as at present theentire debt could be paid in ten years. 

In view, however, of the heavy load of taxation which our people havealready borne, we may well consider whether it is not the part of wisdomto reduce the revenues, even if we delay a little the payment of the debt. 

It seems to me that the time has arrived when the people may justlydemand some relief from their present onerous burden, and that by due economyin the various branches of the public service this may readily be afforded. 

I therefore concur with the Secretary in recommending the abolitionof all internal-revenue taxes except those upon tobacco in its variousforms and upon distilled spirits and fermented liquors, and except alsothe special tax upon the manufacturers of and dealers in such articles.The retention of the latter tax is desirable as affording the officersof the Government a proper supervision of these articles for the preventionof fraud. I agree with the Secretary of the Treasury that the law imposinga stamp tax upon matches, proprietary articles, playing cards, cheeks,and drafts may with propriety be repealed, and the law also by which banksand bankers are assessed upon their capital and deposits. There seems tobe a general sentiment in favor of this course. 

In the present condition of our revenues the tax upon deposits is especiallyunjust. It was never imposed in this country until it was demanded by thenecessities of war, and was never exacted, I believe, in any other countryeven in its greatest exigencies. Banks are required to secure their circulationby pledging with the Treasurer of the United States bonds of the GeneralGovernment. The interest upon these bonds, which at the time when the taxwas imposed was 6 per cent, is now in most instances 3 1/2 per cent. Besides,the entire circulation was originally limited by law and no increase wasallowable. When the existing banks had practically a monopoly of the business,there was force in the suggestion that for the franchise to the favoredgrantees the Government might very properly exact a tax on circulation;but for years the system has been free and the amount of circulation regulatedby the public demand. 

The retention of this tax has been suggested as a means of reimbursingthe Government for the expense of printing and furnishing the circulatingnotes. If the tax should be repealed, it would certainly seem proper torequire the national banks to pay the amount of such expense to the Comptrollerof the Currency. 

It is perhaps doubtful whether the immediate reduction of the rate oftaxation upon liquors and tobacco is advisable, especially in view of thedrain upon the Treasury which must attend the payment of arrears of pensions.A comparison, however, of the amount of taxes collected under the varyingrates of taxation which have at different times prevailed suggests theintimation that some reduction may soon be made without material diminutionof the revenue. 

The tariff laws also need revision; but, that a due regard may be paidto the conflicting interests of our citizens, important changes shouldbe made with caution. If a careful revision can not be made at this session,a commission such as was lately approved by the Senate and is now recommendedby the Secretary of the Treasury would doubtless lighten the labors ofCongress whenever this subject shall be brought to its consideration. 

The accompanying report of the Secretary of War will make known to youthe operations of that Department for the past year. 

He suggests measures for promoting the efficiency of the Army withoutadding to the number of its officers, and recommends the legislation necessaryto increase the number of enlisted men to 30,000, the maximum allowed bylaw. 

This he deems necessary to maintain quietude on our ever-shifting frontier;to preserve peace and suppress disorder and marauding in new settlements;to protect settlers and their property against Indians, and Indians againstthe encroachments of intruders; and to enable peaceable immigrants to establishhomes in the most remote parts of our country. 

The Army is now necessarily scattered over such a vast extent of territorythat whenever an outbreak occurs reenforcements must be hurried from manyquarters, over great distances, and always at heavy cost for transportationof men, horses, wagons, and supplies. 

I concur in the recommendations of the Secretary for increasing theArmy to the strength of 30,000 enlisted men. 

It appears by the Secretary's report that in the absence of disturbanceson the frontier the troops have been actively employed in collecting theIndians hitherto hostile and locating them on their proper reservations;that Sitting Bull and his adherents are now prisoners at Fort Randall;that the Utes have been moved to their new reservation in Utah; that duringthe recent outbreak of the Apaches it was necessary to reenforce the garrisonsin Arizona by troops withdrawn from New Mexico; and that some of the Apachesare now held prisoners for trial, while some have escaped, and the majorityof the tribe are now on their reservation. 

There is need of legislation to prevent intrusion upon the lands setapart for the Indians. A large military force, at great expense, is nowrequired to patrol the boundary line between Kansas and the Indian Territory.The only punishment that can at present be inflicted is the forcible removalof the intruder and the imposition of a pecuniary fine, which in most casesit is impossible to collect. There should be a penalty by imprisonmentin such cases. 

The separate organization of the Signal Service is urged by the Secretaryof War, and a full statement of the advantages of such permanent organizationis presented in the report of the Chief Signal Officer. A detailed accountof the useful work performed by the Signal Corps and the Weather Bureauis also given in that report. 

I ask attention to the statements of the Secretary of War regardingthe requisitions frequently made by the Indian Bureau upon the SubsistenceDepartment of the Army for the casual support of bands and tribes of Indianswhose appropriations are exhausted. The War Department should not be left,by reason of inadequate provision for the Indian Bureau, to contributefor the maintenance of Indians. 

The report of the Chief of Engineers furnishes a detailed account ofthe operations for the improvement of rivers and harbors. 

I commend to your attention the suggestions contained in this reportin regard to the condition of our fortifications, especially our coastdefenses, and recommend an increase of the strength of the Engineer Battalion,by which the efficiency of our torpedo system would be improved. 

I also call your attention to the remarks upon the improvement of theSouth Pass of the Mississippi River, the proposed free bridge over thePotomac River at Georgetown, the importance of completing at an early daythe north wing of the War Department building, and other recommendationsof the Secretary of War which appear in his report. 

The actual expenditures of that Department for the fiscal year endingJune 30, 1881, were $42,122,201.39. The appropriations for the year 1882were $44,889,725.42. The estimates for 1883 are $44,541,276.91. 

The report of the Secretary of the Navy exhibits the condition of thatbranch of the service and presents valuable suggestions for its improvement.I call your especial attention also to the appended report of the AdvisoryBoard which he convened to devise suitable measures for increasing theefficiency of the Navy, and particularly to report as to the characterand number of vessels necessary to place it upon a footing commensuratewith the necessities of the Government. 

I can not too strongly urge upon you my conviction that every considerationof national safety, economy, and honor imperatively demands a thoroughrehabilitation of our Navy. 

With a full appreciation of the fact that compliance with the suggestionsof the head of that Department and of the Advisory Board must involve alarge expenditure of the public moneys, I earnestly recommend such appropriationsas will accomplish an end which seems to me so desirable. 

Nothing can be more inconsistent with true public economy than withholdingthe means necessary to accomplish the objects intrusted by the Constitutionto the National Legislature. One of those objects, and one which is ofparamount importance, is declared by our fundamental law to be the provisionfor the "common defense." Surely nothing is more essential to the defenseof the United States and of all our people than the efficiency of our Navy. 

We have for many years maintained with foreign governments the relationsof honorable peace, and that such relations may be permanent is desiredby every patriotic citizen of the Republic. But if we heed the teachingsof history we shall not forget that in the life of every nation emergenciesmay arise when a resort to arms can alone save it from dishonor. 

No danger from abroad now threatens this people, nor have we any causeto distrust the friendly professions of other governments. But for avoidingas well as for repelling dangers that may threaten us in the future wemust be prepared to enforce any policy which we think wise to adopt. 

We must be ready to defend our harbors against aggression; to protect,by the distribution of our ships of war over the highways of commerce,the varied interests of our foreign trade and the persons and propertyof our citizens abroad; to maintain everywhere the honor of our flag andthe distinguished position which we may rightfully claim among the nationsof the world. 

The report of the Postmaster-General is a gratifying exhibit of thegrowth and efficiency of the postal service. 

The receipts from postage and other ordinary sources during the pastfiscal year were $36,489,816.58. The receipts from the money-order businesswere $295,581.39, making a total of $36,785,397.97. The expenditure forthe fiscal year was $39,251,736.46. The deficit supplied out of the generalTreasury was $2,481,129.35, or 6.3 per cent of the amount expended. Thereceipts were $3,469,918.63 in excess of those of the previous year, and$4,575,397.97 in excess of the estimate made two years ago, before thepresent period of business prosperity had fairly begun. 

The whole number of letters mailed in this country in the last fiscalyear exceeded 1,000,000,000. 

The registry system is reported to be in excellent condition, havingbeen remodeled during the past four years with good results. The amountof registration fees collected during the last fiscal year was $712,882.20,an increase over the fiscal year ending June 30, 1877, of $345,443.40. 

The entire number of letters and packages registered during the yearwas 8,338,919, of which only 2,061 were lost or destroyed in transit. 

The operations of the money-order system are multiplying yearly underthe impulse of immigration, of the rapid development of the newer Statesand Territories, and the consequent demand for additional means of intercommunicationand exchange. 

During the past year 338 additional money-order offices have been established,making a total of 5,499 in operation at the date of this report. 

During the year the domestic money orders aggregated in value 105,075,769.35. 

A modification of the system is suggested, reducing the fees for moneyorders not exceeding $5 from 10 cents to 5 cents and making the maximumlimit 100 in place of $50. 

Legislation for the disposition of unclaimed money orders in the possessionof the Post-Office Department is recommended, in view of the fact thattheir total value now exceeds $1,000,000. 

The attention of Congress is again invited to the subject of establishinga system of savings depositories in connection with the Post-Office Department. 

The statistics of mail transportation show that during the past yearrailroad routes have been increased in length 6,249 miles and in cost $1,114,382,while steamboat routes have been decreased in length 2,182 miles and incost $134,054. The so-called star routes have been decreased in length3,949 miles and in cost $364,144. 

Nearly all of the more expensive routes have been superseded by railroadservice. The cost of the star service must therefore rapidly decrease inthe Western States and Territories. 

The Postmaster-General, however, calls attention to the constantly increasingcost of the railway mail service as a serious difficulty in the way ofmaking the Department self-sustaining. 

Our postal intercourse with foreign countries has kept pace with thegrowth of the domestic service. Within the past year several countriesand colonies have declared their adhesion to the Postal Union. It now includesall those which have an organized postal service except Bolivia, CostaRica, New Zealand, and the British colonies in Australia. 

As has been already stated, great reductions have recently been madein the expense of the star-route service. The investigations of the Departmentof Justice and the Post-Office Department have resulted in the presentationof indictments against persons formerly connected with that service, accusingthem of offenses against the United States. I have enjoined upon the officialswho are charged with the conduct of the cases on the part of the Government,and upon the eminent counsel who before my accession to the Presidencywere called to their assistance, the duty of prosecuting with the utmostvigor of the law all persons who may be found chargeable with frauds uponthe postal service. 

The Acting Attorney-General calls attention to the necessity of modifyingthe present system of the courts of the United States--a necessity dueto the large increase of business, especially in the Supreme Court. Litigationin our Federal tribunals became greatly expanded after the close of thelate war. So long as that expansion might be attributable to the abnormalcondition in which the community found itself immediately after the returnof peace, prudence required that no change be made in the constitutionof our judicial tribunals. But it has now become apparent that an immenseincrease of litigation has directly resulted from the wonderful growthand development of the country. There is no ground for belief that thebusiness of the United States courts will ever be less in volume than atpresent. Indeed, that it is likely to be much greater is generally recognizedby the bench and bar. 

In view of the fact that Congress has already given much considerationto this subject, I make no suggestion as to detail, but express the hopethat your deliberations may result in such legislation as will give earlyrelief to our overburdened courts. 

The Acting Attorney-General also calls attention to the disturbanceof the public tranquillity during the past year in the Territory of Arizona.A band of armed desperadoes known as "Cowboys," probably numbering fromfifty to one hundred men, have been engaged for months in committing actsof lawlessness and brutality which the local authorities have been unableto repress. The depredations of these "Cowboys" have also extended intoMexico, which the marauders reach from the Arizona frontier. With everydisposition to meet the exigencies of the case, I am embarrassed by lackof authority to deal with them effectually. The punishment of crimes committedwithin Arizona should ordinarily, of course, be left to the Territorialauthorities; but it is worthy consideration whether acts which necessarilytend to embroil the United States with neighboring governments should notbe declared crimes against the United States. Some of the incursions alludedto may perhaps be within the scope of the law (U. S. Revised Statutes,sec. 5286) forbidding "military expeditions or enterprises" against friendlystates; but in view of the speedy assembling of your body I have preferredto await such legislation as in your wisdom the occasion may seem to demand. 

It may perhaps be thought proper to provide that the setting on footwithin our own territory of brigandage and armed marauding expeditionsagainst friendly nations and their citizens shall be punishable as an offenseagainst the United States. 

I will add that in the event of a request from the Territorial governmentfor protection by the United States against "domestic violence" this Governmentwould be powerless to render assistance. 

The act of 1795, chapter 36, passed at a time when Territorial governmentsreceived little attention from Congress, enforced this duty of the UnitedStates only as to the State governments. But the act of 1807, chapter 39,applied also to Territories. This law seems to have remained in force untilthe revision of the statutes, when the provision for the Territories wasdropped. I am not advised whether this alteration was intentional or accidental;but as it seems to me that the Territories should be offered the protectionwhich is accorded to the Staten by the Constitution, I suggest legislationto that end. 

It seems to me, too, that whatever views may prevail as to the policyof recent legislation by which the Army has ceased to be a part of theposse comitatus, an exception might well be made for permitting the militaryto assist the civil Territorial authorities in enforcing the laws of theUnited States. This use of the Army would not seem to be within the allegedevil against which that legislation was aimed. From sparseness of populationand other circumstances it is often quite impracticable to summon a civilposse in places where officers of justice require assistance and wherea military force is within easy reach. 

The report of the Secretary of the Interior, with accompanying documents,presents an elaborate account of the business of that Department. A summaryof it would be too extended for this place. I ask your careful attentionto the report itself. 

Prominent among the matters which challenge the attention of Congressat its present session is the management of our Indian affairs. While thisquestion has been a cause of trouble and embarrassment from the infancyof the Government, it is but recently that any effort has been made forits solution at once serious, determined, consistent, and promising success. 

It has been easier to resort to convenient makeshifts for tiding overtemporary difficulties than to grapple with the great permanent problem,and accordingly the easier course has almost invariably been pursued. 

It was natural, at a time when the national territory seemed almostillimitable and contained many millions of acres far outside the boundsof civilized settlements, that a policy should have been initiated whichmore than aught else has been the fruitful source of our Indian complications. 

I refer, of course, to the policy of dealing with the various Indiantribes as separate nationalities, of relegating them by treaty stipulationsto the occupancy of immense reservations in the West, and of encouragingthem to live a savage life, undisturbed by any earnest and well-directedefforts to bring them under the influences of civilization. 

The unsatisfactory results which have sprung from this policy are becomingapparent to all. 

As the white settlements have crowded the borders of the reservations,the Indians, sometimes contentedly and sometimes against their will, havebeen transferred to other hunting grounds, from which they have again beendislodged whenever their new-found homes have been desired by the adventuroussettlers. 

These removals and the frontier collisions by which they have oftenbeen preceded have led to frequent and disastrous conflicts between theraces. 

It is profitless to discuss here which of them has been chiefly responsiblefor the disturbances whose recital occupies so large a space upon the pagesof our history. 

We have to deal with the appalling fact that though thousands of liveshave been sacrificed and hundreds of millions of dollars expended in theattempt to solve the Indian problem, it has until within the past few yearsseemed scarcely nearer a solution than it was half a century ago. But theGovernment has of late been cautiously but steadily feeling its way tothe adoption of a policy which has already produced gratifying results,and which, in my judgment, is likely, if Congress and the Executive accordin its support, to relieve us ere long from the difficulties which havehitherto beset us. 

For the success of the efforts now making to introduce among the Indiansthe customs and pursuits of civilized life and gradually to absorb theminto the mass of our citizens, sharing their rights and holden to theirresponsibilities, there is imperative need for legislative action. 

My suggestions in that regard will be chiefly such as have been alreadycalled to the attention of Congress and have received to some extent itsconsideration. 

First. I recommend the passage of an act making the laws of the variousStates and Territories applicable to the Indian reservations within theirborders and extending the laws of the State of Arkansas to the portionof the Indian Territory not occupied by the Five Civilized Tribes. 

The Indian should receive the protection of the law. He should be allowedto maintain in court his rights of person and property. He has repeatedlybegged for this privilege. Its exercise would be very valuable to him inhis progress toward civilization. 

Second. Of even greater importance is a measure which has been frequentlyrecommended by my predecessors in office, and in furtherance of which severalbills have been from time to time introduced in both Houses of Congress.The enactment of a general law permitting the allotment in severalty, tosuch Indians, at least, as desire it, of a reasonable quantity of landsecured to them by patent, and for their own protection made inalienablefor twenty or twenty-five years, is demanded for their present welfareand their permanent advancement. 

In return for such considerate action on the part of the Government,there is reason to believe that the Indians in large numbers would be persuadedto sever their tribal relations and to engage at once in agricultural pursuits.Many of them realize the fact that their hunting days are over and thatit is now for their best interests to conform their manner of life to thenew order of things. By no greater inducement than the assurance of permanenttitle to the soil can they be led to engage in the occupation of tillingit. 

The well-attested reports of their increasing interest in husbandryjustify the hope and belief that the enactment of such a statute as I recommendwould be at once attended with gratifying results. A resort to the allotmentsystem would have a direct and powerful influence in dissolving the tribalbond, which is so prominent a feature of savage life, and which tends sostrongly to perpetuate it. 

Third. I advise a liberal appropriation for the support of Indian schools,because of my confident belief that such a course is consistent with thewisest economy. 

Even among the most uncultivated Indian tribes there is reported tobe a general and urgent desire on the part of the chiefs and older membersfor the education of their children. It is unfortunate, in view of thisfact, that during the past year the means which have been at the commandof the Interior Department for the purpose of Indian instruction have provedto be utterly inadequate. 

The success of the schools which are in operation at Hampton, Carlisle,and Forest Grove should not only encourage a more generous provision forthe support of those institutions, but should prompt the establishmentof others of a similar character. 

They are doubtless much more potent for good than the day schools uponthe reservation, as the pupils are altogether separated from the surroundingsof savage life and brought into constant contact with civilization. 

There are many other phases of this subject which are of great interest,but which can not be included within the becoming limits of this communication.They are discussed ably in the reports of the Secretary of the Interiorand the Commissioner of Indian Affairs. 

For many years the Executive, in his annual message to Congress; hasurged the necessity of stringent legislation for the suppression of polygamyin the Territories, and especially in the Territory of Utah. The existingstatute for the punishment of this odious crime, so revolting to the moraland religious sense of Christendom, has been persistently and contemptuouslyviolated ever since its enactment. Indeed, in spite of commendable effortson the part of the authorities who represent the United States in thatTerritory, the law has in very rare instances been enforced, and, for acause to which reference will presently be made, is practically a deadletter. 

The fact that adherents of the Mormon Church, which rests upon polygamyas its corner stone, have recently been peopling in large numbers Idaho,Arizona, and other of our Western Territories is well calculated to excitethe liveliest interest and apprehension. It imposes upon Congress and theExecutive the duty of arraying against this barbarous system all the powerwhich under the Constitution and the law they can wield for its destruction. 

Reference has been already made to the obstacles which the United Statesofficers have encountered in their efforts to punish violations of law.Prominent among these obstacles is the difficulty of procuring legal evidencesufficient to warrant a conviction even in the case of the most notoriousoffenders. 

Your attention is called to a recent opinion of the Supreme Court ofthe United States, explaining its judgment of reversal in the case of Miles,who had been convicted of bigamy in Utah. The court refers to the factthat the secrecy attending the celebration of marriages in that Territorymakes the proof of polygamy very difficult, and the propriety is suggestedof modifying the law of evidence which now makes a wife incompetent totestify against her husband. 

This suggestion is approved. I recommend also the passage of an actproviding that in the Territories of the United States the fact that awoman has been married to a person charged with bigamy shall not disqualifyher as a witness upon his trial for that offense. I further recommend legislationby which any person solemnizing a marriage in any of the Territories shallbe required, under stringent penalties for neglect or refusal, to filea certificate of such marriage in the supreme court of the Territory. 

Doubtless Congress may devise other practicable measures for obviatingthe difficulties which have hitherto attended the efforts to suppress thisiniquity. I assure you of my determined purpose to cooperate with you inany lawful and discreet measures which may be proposed to that end. 

Although our system of government does not contemplate that the nationshould provide or support a system for the education of our people, nomeasures calculated to promote that general intelligence and virtue uponwhich the perpetuity of our institutions so greatly depends have ever beenregarded with indifference by Congress or the Executive. 

A large portion of the public domain has been from time to time devotedto the promotion of education. 

There is now a special reason why, by setting apart the proceeds ofits sales of public lands or by some other course, the Government shouldaid the work of education. Many who now exercise the right of suffrageare unable to read the ballot which they cast. Upon many who had just emergedfrom a condition of slavery were suddenly devolved the responsibilitiesof citizenship in that portion of the country most impoverished by war.I have been pleased to learn from the report of the Commissioner of Educationthat there has lately been a commendable increase of interest and effortfor their instruction; but all that can be done by local legislation andprivate generosity should be supplemented by such aid as can be constitutionallyafforded by the National Government. 

I would suggest that if any fund be dedicated to this purpose it maybe wisely distributed in the different States according to the ratio ofilliteracy, as by this means those localities which are most in need ofsuch assistance will reap its special benefits. 

The report of the Commissioner of Agriculture exhibits the results ofthe experiments in which that Department has been engaged during the pastyear and makes important suggestions in reference to the agricultural developmentof the country. 

The steady increase of our population and the consequent addition tothe number of those engaging in the pursuit of husbandry are giving tothis Department a growing dignity and importance. The Commissioner's suggestionstouching its capacity for greater usefulness deserve attention, as it moreand more commends itself to the interests which it was created to promote. 

It appears from the report of the Commissioner of Pensions that since1860 789,063 original pension claims have been filed; 450,949 of thesehave been allowed and inscribed on the pension roll; 72,539 have been rejectedand abandoned, being 13+ per cent of the whole number of claims settled. 

There are now pending for settlement 265,575 original pension claims,227,040 of which were filed prior to July 1, 1880. These, when allowed,will involve the payment of arrears from the date of discharge in caseof an invalid and from date of death or termination of a prior right inall other cases. 

From all the data obtainable it is estimated that 15 per cent of thenumber of claims now pending will be rejected or abandoned. This wouldshow the probable rejection of 34,040 cases and the probable admissionof about 193,000 claims, all of which involve the payment of arrears ofpension. 

With the present force employed, the number of adjudications remainingthe same and no new business intervening, this number of claims (193,000)could be acted upon in a period of six years; and taking January 1, 1884,as a near period from which to estimate in each case an average amountof arrears, it is found that every case allowed would require for the firstpayment upon it the sum of $1,350. Multiplying this amount by the wholenumber of probable admissions gives $250,000,000 as the sum required forfirst payment. This represents the sum which must be paid upon claims whichwere filed before July 1, 1880, and are now pending and entitled to thebenefits of the arrears act. From this amount ($250,000,000) may be deductedfrom ten to fifteen millions for cases where, the claimant dying, thereis no person who under the law would be entitled to succeed to the pension,leaving $235,000,000 as the probable amount to be paid. 

In these estimates no account has been taken of the 38,500 cases filedsince June 30, 1880, and now pending, which must receive attention as currentbusiness, but which do not involve the payment of any arrears beyond thedate of filing the claim. Of this number it is estimated that 86 per centwill be allowed. 

As has been stated, with the present force of the Pension Bureau (675clerks) it is estimated that it will take six years to dispose of the claimsnow pending. 

It is stated by the Commissioner of Pensions that by an addition of250 clerks (increasing the adjudicating force rather than the mechanical)double the amount of work could be accomplished, so that these cases couldbe acted upon within three years. <