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of the commission which had been appointed to enter upon negotiations with the Imperial Government of China on subjects of great interest to the relations of the two countries enabled the commissioners to proceed at once upon their mission. The Imperial Government was prepared to give prompt and respectful attention to the matters brought under negotiation, and the conferences proceeded with such rapidity and success that on the 17th of November last two treaties were signed at Peking, one relating to the introduction of Chinese into this country and one relating to commerce. Mr. Trescot, one of the commissioners, is now on his way home bringing the treaties, and it is expected that they will be received in season to be laid before the Senate early in January.

Our minister in Japan has negotiated a convention for the reciprocal relief of shipwrecked seamen. I take occasion to urge once more upon Congress the propriety of making provision for the erection of suitable fireproof buildings at the Japanese capital for the use of the American legation and the court-house and jail connected with it. The Japanese Government, with great generosity and courtesy, has offered for this purpose an eligible piece of land.

In my last annual message I invited the attention of Congress to the subject of the indemnity funds received some years ago from China and Japan. I renew the recommendation then made that whatever portions of these funds are due to American citizens should be promptly paid and the residue returned to the nations, respectively, to which they justly and equitably belong.

The extradition treaty with the Kingdom of the Netherlands, which has been for some time in course of negotiation, has during the past year been concluded and duly ratified.

Relations of friendship and amity have been established between the Government of the United States and that of Roumania. We have sent a diplomatic representative to Bucharest, and have received at this capital the special envoy who has been charged by His Royal Highness Prince Charles to announce the independent sovereignty of Roumania. We hope for a speedy development of commercial relations between the two countries.

In my last annual message I expressed the hope that the prevalence of quiet on the border between this country and Mexico would soon become so assured as to justify the modification of the orders then in force to our military commanders in regard to crossing the frontier, without encouraging such disturbances as would endanger the peace of the two countries. Events moved in accordance with these expectations, and the orders were accordingly withdrawn, to the entire satisfaction of our own citizens and the Mexican Government. Subsequently the peace of the border was again disturbed by a savage foray under the command of the Chief Victoria, but by the combined and harmonious action of the military forces of both countries his band has been broken up and substantially destroyed.

There is reason to believe that the obstacles which have so long prevented rapid and convenient communication between the United States and Mexico by railways are on the point of disappearing, and that several important enterprises of this character will soon be set on foot, which can not fail to contribute largely to the prosperity of both countries.

New envoys from Guatemala, Colombia, Bolivia, Venezuela, and Nicaragua have recently arrived at this capital, whose distinction and enlightenment afford the best guaranty of the continuance of friendly relations between ourselves and these sister Republics.

The relations between this Government and that of the United States of Colombia have engaged public attention during the past year, mainly by reason of the project of an interoceanic canal across the Isthmus of Panama, to be built by private capital under a concession from the Colombian Government for that purpose. The treaty obligations subsisting between the United States and Colombia, by which we guarantee the neutrality of the transit and the sovereignty and property of Colombia in the Isthmus, make it necessary that the conditions under which so stupendous a change in the region embraced in this guaranty should be effected–transforming, as it would, this Isthmus from a barrier between the Atlantic and Pacific oceans into a gateway and thoroughfare between them for the navies and the merchant ships of the world–should receive the approval of this Government, as being compatible with the discharge of these obligations on our part and consistent with our interests as the principal commercial power of the Western Hemisphere. The views which I expressed in a special message to Congress in March last in relation to this project I deem it my duty again to press upon your attention. Subsequent consideration has but confirmed the opinion “that it is the right and duty of the United States to assert and maintain such supervision and authority over any interoceanic canal across the isthmus that connects North and South America as will protect our national interest.”

The war between the Republic of Chile on the one hand and the allied Republics of Peru and Bolivia on the other still continues. This Government has not felt called upon to interfere in a contest that is within the belligerent rights of the parties as independent states. We have, however, always held ourselves in readiness to aid in accommodating their difference, and have at different times reminded both belligerents of our willingness to render such service.

Our good offices in this direction were recently accepted by all the belligerents, and it was hoped they would prove efficacious; but I regret to announce that the measures which the ministers of the United States at Santiago and Lima were authorized to take with the view to bring about a peace were not successful. In the course of the war some questions have arisen affecting neutral rights. In all of these the ministers of the United States have, under their instructions, acted with promptness and energy in protection of American interests.

The relations of the United States with the Empire of Brazil continue to be most cordial, and their commercial intercourse steadily increases, to their mutual advantage.

The internal disorders with which the Argentine Republic has for some time past been afflicted, and which have more or less influenced its external trade, are understood to have been brought to a close. This happy result may be expected to redound to the benefit of the foreign commerce of that Republic, as well as to the development of its vast interior resources.

In Samoa the Government of King Malietoa, under the support and recognition of the consular representatives of the United States, Great Britain, and Germany, seems to have given peace and tranquillity to the islands. While it does not appear desirable to adopt as a whole the scheme of tripartite local government which has been proposed, the common interests of the three great treaty powers require harmony in their relations to the native frame of government, and this may be best secured by a simple diplomatic agreement between them. It would be well if the consular jurisdiction of our representative at Apia were increased in extent and importance so as to guard American interests in the surrounding and outlying islands of Oceanica.

The obelisk generously presented by the Khedive of Egypt to the city of New York has safely arrived in this country, and will soon be erected in that metropolis. A commission for the liquidation of the Egyptian debt has lately concluded its work, and this Government, at the earnest solicitation of the Khedive, has acceded to the provisions adopted by it, which will be laid before Congress for its information. A commission for the revision of the judicial code of the reform tribunal of Egypt is now in session in Cairo. Mr. Farman, consul-general, and J.M. Batchelder, esq., have been appointed as commissioners to participate in this work. The organization of the reform tribunals will probably be continued for another period of five years.

In pursuance of the act passed at the last session of Congress, invitations have been extended to foreign maritime states to join in a sanitary conference in Washington, beginning the 1st of January. The acceptance of this invitation by many prominent powers gives promise of success in this important measure, designed to establish a system of international notification by which the spread of infectious or epidemic diseases may be more effectively checked or prevented. The attention of Congress is invited to the necessary appropriations for carrying into effect the provisions of the act referred to.

The efforts of the Department of State to enlarge the trade and commerce of the United States, through the active agency of consular officers and through the dissemination of information obtained from them, have been unrelaxed. The interest in these efforts, as developed in our commercial communities, and the value of the information secured by this means to the trade and manufactures of the country were recognized by Congress at its last session, and provision was made for the more frequent publication of consular and other reports by the Department of State. The first issue of this publication has now been prepared, and subsequent issues may regularly be expected. The importance and interest attached to the reports of consular officers are witnessed by the general demand for them by all classes of merchants and manufacturers engaged in our foreign trade. It is believed that the system of such publications is deserving of the approval of Congress, and that the necessary appropriations for its continuance and enlargement will commend itself to your consideration.

The prosperous energies of our domestic industries and their immense production of the subjects of foreign commerce invite, and even require, an active development of the wishes and interests of our people in that direction. Especially important is it that our commercial relations with the Atlantic and Pacific coasts of South America, with the West Indies and the Gulf of Mexico, should be direct, and not through the circuit of European systems, and should be carried on in our own bottoms. The full appreciation of the opportunities which our front on the Pacific Ocean gives to commerce with Japan, China, and the East Indies, with Australia and the island groups which lie along these routes of navigation, should inspire equal efforts to appropriate to our own shipping and to administer by our own capital a due proportion of this trade. Whatever modifications of our regulations of trade and navigation may be necessary or useful to meet and direct these impulses to the enlargement of our exchanges and of our carrying trade I am sure the wisdom of Congress will be ready to supply. One initial measure, however, seems to me so clearly useful and efficient that I venture to press it upon your earnest attention. It seems to be very evident that the provision of regular steam postal communication by aid from government has been the forerunner of the commercial predominance of Great Britain on all these coasts and seas, a greater share in whose trade is now the desire and the intent of our people. It is also manifest that the efforts of other European nations to contend with Great Britain for a share of this commerce have been successful in proportion with their adoption of regular steam postal communication with the markets whose trade they sought. Mexico and the States of South America are anxious to receive such postal communication with this country and to aid in their development. Similar cooperation may be looked for in due time from the Eastern nations and from Australia. It is difficult to see how the lead in this movement can be expected from private interests. In respect of foreign commerce quite as much as in internal trade postal communication seems necessarily a matter of common and public administration, and thus pertaining to Government. I respectfully recommend to your prompt attention such just and efficient measures as may conduce to the development of our foreign commercial exchanges and the building up of our carrying trade.

In this connection I desire also to suggest the very great service which might be expected in enlarging and facilitating our commerce on the Pacific Ocean were a transmarine cable laid from San Francisco to the Sandwich Islands, and thence to Japan at the north and Australia at the south. The great influence of such means of communication on these routes of navigation in developing and securing the due share of our Pacific Coast in the commerce of the world needs no illustration or enforcement. It may be that such an enterprise, useful, and in the end profitable, as it would prove to private investment, may need to be accelerated by prudent legislation by Congress in its aid, and I submit the matter to your careful consideration.

An additional and not unimportant, although secondary, reason for fostering and enlarging the Navy may be found in the unquestionable service to the expansion of our commerce which would be rendered by the frequent circulation of naval ships in the seas and ports of all quarters of the globe. Ships of the proper construction and equipment to be of the greatest efficiency in case of maritime war might be made constant and active agents in time of peace in the advancement and protection of our foreign trade and in the nurture and discipline of young seamen, who would naturally in some numbers mix with and improve the crews of our merchant ships. Our merchants at home and abroad recognize the value to foreign commerce of an active movement of our naval vessels, and the intelligence and patriotic zeal of our naval officers in promoting every interest of their countrymen is a just subject of national pride.

The condition of the financial affairs of the Government, as shown by the report of the Secretary of the Treasury, is very satisfactory. It is believed that the present financial situation of the United States, whether considered with respect to trade, currency, credit, growing wealth, or the extent and variety of our resources, is more favorable than that of any other country of our time, and has never been surpassed by that of any country at any period of its history. All our industries are thriving; the rate of interest is low; new railroads are being constructed; a vast immigration is increasing our population, capital, and labor; new enterprises in great number are in progress, and our commercial relations with other countries are improving.

The ordinary revenues from all sources for the fiscal year ended June 30, 1880, were–

From customs…………………………………… $186,522,064.60 From internal revenue……………………………. 124,009,373.92 From sales of public lands…………………………. 1,016,506.60 From tax on circulation and deposits of national banks… 7,014,971.44 From repayment of interest by Pacific Railway companies.. 1,707,367.18 From sinking fund for Pacific Railway companies………… 786,621.22 From customs fees, fines, penalties, etc…………….. 1,148,800.16 From fees–consular, letters patent, and lands……….. 2,337,029.00 From proceeds of sales of Government property………….. 282,616.50 From profits on coinage, etc……………………….. 2,792,186.78 From revenues of the District of Columbia……………. 1,809,469.70 From miscellaneous sources…………………………. 4,099,603.88

Total ordinary receipts………………………….. 333,526,610.98

The ordinary expenditures for the same period were–

For civil expenses………………………………. $15,693,963.55 For foreign intercourse……………………………. 1,211,490.58 For Indians………………………………………. 5,945,457.09 For pensions (including $19,341,025.20 arrears of pensions) ……………………………………………….. 56,777,174.44 For the military establishment, including river and harbor improvements and arsenals…………………………. 38,116,916.22 For the naval establishment, including vessels, machinery, and improvements at navy-yards…………………….. 13,536,984.74 For miscellaneous expenditures, including public buildings, light-houses, and collecting the revenue……………. 34,535,691.00 For expenditures on account of the District of Columbia.. 3,272,384.63 For interest on the public debt……………………. 95,757,575.11 For premium on bonds purchased……………………… 2,795,320.42

leaving a surplus revenue of $65,883,653.20, which, with an amount drawn from the cash balance in Treasury of $8,084,434.21, making $73,968,087.41, was applied to the redemption–

Of bonds for the sinking fund…………………….. $73,652,900.00 Of fractional currency………………………………. 251,717.41 Of the loan of 1858………………………………….. 40,000.00 Of temporary loan………………………………………. 100.00 Of bounty-land scrip…………………………………….. 25.00 Of compound-interest notes……………………………. 16,500.00 Of 7.30 notes of 1864-65………………………………. 2,650.00 Of one and two year notes……………………………… 3,700.00 Of old demand notes…………………………………….. 495.00

Total…………………………………………… 73,968,087.41

The amount due the sinking fund for this year was $37,931,643.55. There was applied thereto the sum of $73,904,617.41, being $35,972,973.86 in excess of the actual requirements for the year.

The aggregate of the revenues from all sources during the fiscal year ended June 30, 1880, was $333,526,610.98, an increase over the preceding year of $59,699,426.52. The receipts thus far of the current year, together with the estimated receipts for the remainder of the year, amount to $350,000,000, which will be sufficient to meet the estimated expenditures of the year and leave a surplus of $90,000,000.

It is fortunate that this large surplus revenue occurs at a period when it may be directly applied to the payment of the public debt soon to be redeemable. No public duty has been more constantly cherished in the United States than the policy of paying the nation’s debt as rapidly as possible.

The debt of the United States, less cash in the Treasury and exclusive of accruing interest, attained its maximum of $2,756,431,571.43 in August, 1865, and has since that time been reduced to $1,886,019,504.65. Of the principal of the debt, $108,758,100 has been paid since March 1, 1877, effecting an annual saving of interest of $6,107,593. The burden of interest has also been diminished by the sale of bonds bearing a low rate of interest and the application of the proceeds to the redemption of bonds bearing a higher rate. The annual saving thus secured since March 1, 1877, is $14,290,453.50. Within a short period over six hundred millions of 5 and 6 per cent bonds will become redeemable. This presents a very favorable opportunity not only to further reduce the principal of the debt, but also to reduce the rate of interest on that which will remain unpaid. I call the attention of Congress to the views expressed on this subject by the Secretary of the Treasury in his annual report, and recommend prompt legislation to enable the Treasury Department to complete the refunding of the debt which is about to mature.

The continuance of specie payments has not been interrupted or endangered since the date of resumption. It has contributed greatly to the revival of business and to our remarkable prosperity. The fears that preceded and accompanied resumption have proved groundless. No considerable amount of United States notes have been presented for redemption, while very large sums of gold bullion, both domestic and imported, are taken to the mints and exchanged for coin or notes. The increase of coin and bullion in the United States since January 1, 1879, is estimated at $227,399,428.

There are still in existence, uncanceled, $346,681,016 of United States legal-tender notes. These notes were authorized as a war measure, made necessary by the exigencies of the conflict in which the United States was then engaged. The preservation of the nation’s existence required, in the judgment of Congress, an issue of legal-tender paper money. That it served well the purpose for which it was created is not questioned, but the employment of the notes as paper money indefinitely, after the accomplishment of the object for which they were provided, was not contemplated by the framers of the law under which they were issued. These notes long since became, like any other pecuniary obligation of the Government, a debt to be paid, and when paid to be canceled as mere evidence of an indebtedness no longer existing. I therefore repeat what was said in the annual message of last year, that the retirement from circulation of United States notes with the capacity of legal tender in private contracts is a step to be taken in our progress toward a safe and stable currency which should be accepted as the policy and duty of the Government and the interest and security of the people.

At the time of the passage of the act now in force requiring the coinage of silver dollars, fixing their value, and giving them legal-tender character it was believed by many of the supporters of the measure that the silver dollar which it authorized would speedily become, under the operations of the law, of equivalent value to the gold dollar. There were other supporters of the bill, who, while they doubted as to the probability of this result, nevertheless were willing to give the proposed experiment a fair trial, with a view to stop the coinage if experience should prove that the silver dollar authorized by the bill continued to be of less commercial value than the standard gold dollar.

The coinage of silver dollars under the act referred to began in March, 1878, and has been continued as required by the act. The average rate per month to the present time has been $2,276,492. The total amount coined prior to the 1st of November last was $72,847,750. Of this amount $47,084,450 remain in the Treasury, and only $25,763,291 are in the hands of the people. A constant effort has been made to keep this currency in circulation, and considerable expense has been necessarily incurred for this purpose; but its return to the Treasury is prompt and sure. Contrary to the confident anticipation of the friends of the measure at the time of its adoption, the value of the silver dollar containing 412-1/2 grains of silver has not increased. During the year prior to the passage of the bill authorizing its coinage the market value of the silver which it contained was from 90 to 92 cents as compared with the standard gold dollar. During the last year the average market value of the silver dollar has been 88-1/2 cents.

It is obvious that the legislation of the last Congress in regard to silver, so far as it was based on an anticipated rise in the value of silver as a result of that legislation, has failed to produce the effect then predicted. The longer the law remains in force, requiring, as it does, the coinage of a nominal dollar which in reality is not a dollar, the greater becomes the danger that this country will be forced to accept a single metal as the sole legal standard of value in circulation, and this a standard of less value than it purports to be worth in the recognized money of the world.

The Constitution of the United States, sound financial principles, and our best interests all require that the country should have as its legal-tender money both gold and silver coin of an intrinsic value, as bullion, equivalent to that which upon its face it purports to possess. The Constitution in express terms recognizes both gold and silver as the only true legal-tender money. To banish either of these metals from our currency is to narrow and limit the circulating medium of exchange to the disparagement of important interests. The United States produces more silver than any other country, and is directly interested in maintaining it as one of the two precious metals which furnish the coinage of the world. It will, in my judgment, contribute to this result if Congress will repeal so much of existing legislation as requires the coinage of silver dollars containing only 412-1/2 grains of silver, and in its stead will authorize the Secretary of the Treasury to coin silver dollars of equivalent value, as bullion, with gold dollars. This will defraud no man, and will be in accordance with familiar precedents. Congress on several occasions has altered the ratio of value between gold and silver, in order to establish it more nearly in accordance with the actual ratio of value between the two metals.

In financial legislation every measure in the direction of greater fidelity in the discharge of pecuniary obligations has been found by experience to diminish the rates of interest which debtors are required to pay and to increase the facility with which money can be obtained for every legitimate purpose. Our own recent financial history shows how surely money becomes abundant whenever confidence in the exact performance of moneyed obligations is established.

The Secretary of War reports that the expenditures of the War Department for the fiscal year ended June 30, 1880, were $39,924,773.03. The appropriations for this Department for the current fiscal year amount to $41,993,630.40.

With respect to the Army, the Secretary invites attention to the fact that its strength is limited by statute (U.S. Revised Statutes, sec. 1115) to not more than 30,000 enlisted men, but that provisos contained in appropriation bills have limited expenditures to the enlistment of but 25,000. It is believed the full legal strength is the least possible force at which the present organization can be maintained, having in view efficiency, discipline, and economy. While the enlistment of this force would add somewhat to the appropriation for pay of the Army, the saving made in other respects would be more than an equivalent for this additional outlay, and the efficiency of the Army would be largely increased.

The rapid extension of the railroad system west of the Mississippi River and the great tide of settlers which has flowed in upon new territory impose on the military an entire change of policy. The maintenance of small posts along wagon and stage routes of travel is no longer necessary. Permanent quarters at points selected, of a more substantial character than those heretofore constructed, will be required. Under existing laws permanent buildings can not be erected without the sanction of Congress, and when sales of military sites and buildings have been authorized the moneys received have reverted to the Treasury and could only become available through a new appropriation. It is recommended that provision be made by a general statute for the sale of such abandoned military posts and buildings as are found to be unnecessary and for the application of the proceeds to the construction of other posts. While many of the present posts are of but slight value for military purposes, owing to the changed condition of the country, their occupation is continued at great expense and inconvenience, because they afford the only available shelter for troops.

The absence of a large number of officers of the line, in active duty, from their regiments is a serious detriment to the maintenance of the service. The constant demand for small detachments, each of which should be commanded by a commissioned officer, and the various details of officers for necessary service away from their commands occasion a scarcity in the number required for company duties. With a view to lessening this drain to some extent, it is recommended that the law authorizing the detail of officers from the active list as professors of tactics and military science at certain colleges and universities be so amended as to provide that all such details be made from the retired list of the Army.

Attention is asked to the necessity of providing by legislation for organizing, arming, and disciplining the _active_ militia of the country, and liberal appropriations are recommended in this behalf. The reports of the Adjutant-General of the Army and the Chief of Ordnance touching this subject fully set forth its importance.

The report of the officer in charge of education in the Army shows that there are 78 schools now in operation in the Army, with an aggregate attendance of 2,305 enlisted men and children. The Secretary recommends the enlistment of 150 schoolmasters, with the rank and pay of commissary-sergeants. An appropriation is needed to supply the judge-advocates of the Army with suitable libraries, and the Secretary recommends that the Corps of Judge-Advocates be placed upon the same footing as to promotion with the other staff corps of the Army. Under existing laws the Bureau of Military Justice consists of one officer (the Judge-Advocate-General), and the Corps of Judge-Advocates of eight officers of equal rank (majors), with a provision that the limit of the corps shall remain at four when reduced by casualty or resignation to that number. The consolidation of the Bureau of Military Justice and the Corps of Judge-Advocates upon the same basis with the other staff corps of the Army would remove an unjust discrimination against deserving officers and subserve the best interests of the service.

Especial attention is asked to the report of the Chief of Engineers upon the condition of our national defenses. From a personal inspection of many of the fortifications referred to, the Secretary is able to emphasize the recommendations made and to state that their incomplete and defenseless condition is discreditable to the country. While other nations have been increasing their means for carrying on offensive warfare and attacking maritime cities, we have been dormant in preparation for defense. Nothing of importance has been done toward strengthening and finishing our casemated works since our late civil war, during which the great guns of modern warfare and the heavy armor of modern fortifications and ships came into use among the nations; and our earthworks, left by a sudden failure of appropriations some years since in all stages of incompletion, are now being rapidly destroyed by the elements.

The two great rivers of the North American continent, the Mississippi and the Columbia, have their navigable waters wholly within the limits of the United States, and are of vast importance to our internal and foreign commerce. The permanency of the important work on the South Pass of the Mississippi River seems now to be assured. There has been no failure whatever in the maintenance of the maximum channel during the six months ended August 9 last. This experiment has opened a broad, deep highway to the ocean, and is an improvement upon the permanent success of which congratulations may be exchanged among people abroad and at home, and especially among the communities of the Mississippi Valley, whose commercial exchanges float in an unobstructed channel safely to and from the sea.

A comprehensive improvement of the Mississippi and its tributaries is a matter of transcendent importance. These great waterways comprise a system of inland transportation spread like network over a large portion of the United States, and navigable to the extent of many thousands of miles. Producers and consumers alike have a common interest in such unequaled facilities for cheap transportation. Geographically, commercially, and politically, they are the strongest tie between the various sections of the country. These channels of communication and interchange are the property of the nation. Its jurisdiction is paramount over their waters, and the plainest principles of public interest require their intelligent and careful supervision, with a view to their protection, improvement, and the enhancement of their usefulness.

The channel of the Columbia River for a distance of about 100 miles from its mouth is obstructed by a succession of bars, which occasion serious delays in navigation and heavy expense for lighterage and towage. A depth of at least 20 feet at low tide should be secured and maintained to meet the requirements of the extensive and growing inland and ocean commerce it subserves. The most urgent need, however, for this great waterway is a permanent improvement of the channel at the mouth of the river.

From Columbia River to San Francisco, a distance of over 600 miles, there is no harbor on our Pacific coast which can be approached during stormy weather. An appropriation of $150,000 was made by the Forty-fifth Congress for the commencement of a breakwater and harbor of refuge, to be located at some point between the Straits of Fuca and San Francisco at which the necessities of commerce, local and general, will be best accommodated. The amount appropriated is thought to be quite inadequate for the purpose intended. The cost of the work, when finished, will be very great, owing to the want of natural advantages for a site at any point on the coast between the designated limits, and it has not been thought to be advisable to undertake the work without a larger appropriation. I commend the matter to the attention of Congress.

The completion of the new building for the War Department is urgently needed, and the estimates for continuing its construction are especially recommended.

The collections of books, specimens, and records constituting the Army Medical Museum and Library are of national importance. The library now contains about 51,500 volumes and 57,000 pamphlets relating to medicine, surgery, and allied topics. The contents of the Army Medical Museum consist of 22,000 specimens, and are unique in the completeness with which both military surgery and the diseases of armies are illustrated. Their destruction would be an irreparable loss, not only to the United States, but to the world. There are filed in the Record and Pension Division over 16,000 bound volumes of hospital records, together with a great quantity of papers, embracing the original records of the hospitals of our armies during the civil war. Aside from their historical value, these records are daily searched for evidence needed in the settlement of large numbers of pension and other claims, for the protection of the Government against attempted frauds, as well as for the benefit of honest claimants. These valuable collections are now in a building which is peculiarly exposed to the danger of destruction by fire. It is therefore earnestly recommended that an appropriation be made for a new fireproof building, adequate for the present needs and reasonable future expansion of these valuable collections. Such a building should be absolutely fireproof; no expenditure for mere architectural display is required. It is believed that a suitable structure can be erected at a cost not to exceed $250,000.

I commend to the attention of Congress the great services of the Commander in Chief of our armies during the war for the Union, whose wise, firm, and patriotic conduct did so much to bring that momentous conflict to a close. The legislation of the United States contains many precedents for the recognition of distinguished military merit, authorizing rank and emoluments to be conferred for eminent services to the country. An act of Congress authorizing the appointment of a Captain-General of the Army, with suitable provisions relating to compensation, retirement, and other details, would, in my judgment, be altogether fitting and proper, and would be warmly approved by the country.

The report of the Secretary of the Navy exhibits the successful and satisfactory management of that Department during the last fiscal year. The total expenditures for the year were $12,916,639.45, leaving unexpended at the close of the year $2,141,682.23 of the amount of available appropriations. The appropriations for the present fiscal year, ending June 30, 1881, are $15,095,061.45, and the total estimates for the next fiscal year, ending June 30, 1882, are $15,953,751.61. The amount drawn by warrant from July 1, 1880, to November 1, 1880, is $5,041,570.45.

The recommendation of the Secretary of the Navy that provision be made for the establishment of some form of civil government for the people of Alaska is approved. At present there is no protection of persons or property in that Territory except such as is afforded by the officers of the United States ship _Jamestown_. This vessel was dispatched to Sitka because of the fear that without the immediate presence of the national authority there was impending danger of anarchy. The steps taken to restore order have been accepted in good faith by both white and Indian inhabitants, and the necessity for this method of restraint does not, in my opinion, now exist. If, however, the _Jamestown_ should be withdrawn, leaving the people, as at present, without the ordinary judicial and administrative authority of organized local government, serious consequences might ensue.

The laws provide only for the collection of revenue, the protection of public property, and the transmission of the mails. The problem is to supply a local rule for a population so scattered and so peculiar in its origin and condition. The natives are reported to be teachable and self-supporting, and if properly instructed doubtless would advance rapidly in civilization, and a new factor of prosperity would be added to the national life. I therefore recommend the requisite legislation upon this subject.

The Secretary of the Navy has taken steps toward the establishment of naval coaling stations at the Isthmus of Panama, to meet the requirements of our commercial relations with Central and South America, which are rapidly growing in importance. Locations eminently suitable, both as regards our naval purposes and the uses of commerce, have been selected, one on the east side of the Isthmus, at Chiriqui Lagoon, in the Caribbean Sea, and the other on the Pacific coast, at the Bay of Golfito. The only safe harbors, sufficiently commodious, on the Isthmus are at these points, and the distance between them is less than 100 miles. The report of the Secretary of the Navy concludes with valuable suggestions with respect to the building up of our merchant marine service, which deserve the favorable consideration of Congress.

The report of the Postmaster-General exhibits the continual growth and the high state of efficiency of the postal service. The operations of no Department of the Government, perhaps, represent with greater exactness the increase in the population and the business of the country. In 1860 the postal receipts were $8,518,067.40; in 1880 the receipts were $33,315,479.34. All the inhabitants of the country are directly and personally interested in having proper mail facilities, and naturally watch the Post-Office very closely. This careful oversight on the part of the people has proved a constant stimulus to improvement. During the past year there was an increase of 2,134 post-offices, and the mail routes were extended 27,177 miles, making an additional annual transportation of 10,804,191 miles. The revenues of the postal service for the ensuing year are estimated at $38,845,174.10, and the expenditures at $42,475,932, leaving a deficiency to be appropriated out of the Treasury of $3,630,757.90.

The Universal Postal Union has received the accession of almost all the countries and colonies of the world maintaining organized postal services, and it is confidently expected that all the other countries and colonies now outside the union will soon unite therewith, thus realizing the grand idea and aim of the founders of the union of forming, for purposes of international mail communication, a single postal territory, embracing the world, with complete uniformity of postal charges and conditions of international exchange for all descriptions of correspondence. To enable the United States to do its full share of this great work, additional legislation is asked by the Postmaster-General, to whose recommendations especial attention is called.

The suggestion of the Postmaster-General that it would be wise to encourage, by appropriate legislation, the establishment of American lines of steamers by our own citizens to carry the mails between our own ports and those of Mexico, Central America, South America, and of transpacific countries is commended to the serious consideration of Congress.

The attention of Congress is also invited to the suggestions of the Postmaster-General in regard to postal savings.

The necessity for additional provision to aid in the transaction of the business of the Federal courts becomes each year more apparent. The dockets of the Supreme Court and of the circuit courts in the greater number of the circuits are encumbered with the constant accession of cases. In the former court, and in many instances in the circuit courts, years intervene before it is practicable to bring cases to hearing.

The Attorney-General recommends the establishment of an intermediate court of errors and appeals. It is recommended that the number of judges of the circuit court in each circuit, with the exception of the second circuit, should be increased by the addition of another judge; in the second circuit, that two should be added; and that an intermediate appellate court should be formed in each circuit, to consist of the circuit judges and the circuit justice, and that in the event of the absence of either of these judges the place of the absent judge should be supplied by the judge of one of the district courts in the circuit. Such an appellate court could be safely invested with large jurisdiction, and its decisions would satisfy suitors in many cases where appeals would still be allowed to the Supreme Court. The expense incurred for this intermediate court will require a very moderate increase of the appropriations for the expenses of the Department of Justice. This recommendation is commended to the careful consideration of Congress.

It is evident that a delay of justice, in many instances oppressive and disastrous to suitors, now necessarily occurs in the Federal courts, which will in this way be remedied.

The report of the Secretary of the Interior presents an elaborate account of the operations of that Department during the past year. It gives me great pleasure to say that our Indian affairs appear to be in a more hopeful condition now than ever before. The Indians have made gratifying progress in agriculture, herding, and mechanical pursuits. Many who were a few years ago in hostile conflict with the Government are quietly settling down on farms where they hope to make their permanent homes, building houses and engaging in the occupations of civilized life. The introduction of the freighting business among them has been remarkably fruitful of good results, in giving many of them congenial and remunerative employment and in stimulating their ambition to earn their own support. Their honesty, fidelity, and efficiency as carriers are highly praised. The organization of a police force of Indians has been equally successful in maintaining law and order upon the reservations and in exercising a wholesome moral influence among the Indians themselves. I concur with the Secretary of the Interior in the recommendation that the pay of this force be increased, as an inducement to the best class of young men to enter it.

Much care and attention has been devoted to the enlargement of educational facilities for the Indians. The means available for this important object have been very inadequate. A few additional boarding schools at Indian agencies have been established and the erection of buildings has been begun for several more; but an increase of the appropriations for this interesting undertaking is greatly needed to accommodate the large number of Indian children of school age. The number offered by their parents from all parts of the country for education in the Government schools is much larger than can be accommodated with the means at present available for that purpose. The number of Indian pupils at the normal school at Hampton, Va., under the direction of General Armstrong, has been considerably increased, and their progress is highly encouraging. The Indian school established by the Interior Department in 1879 at Carlisle, Pa., under the direction of Captain Pratt, has been equally successful. It has now nearly 200 pupils of both sexes, representing a great variety of the tribes east of the Rocky Mountains. The pupils in both these institutions receive not only an elementary English education, but are also instructed in housework, agriculture, and useful mechanical pursuits. A similar school was established this year at Forest Grove, Oreg., for the education of Indian youth on the Pacific Coast. In addition to this, thirty-six Indian boys and girls were selected from the Eastern Cherokees and placed in boarding schools in North Carolina, where they are to receive an elementary English education and training in industrial pursuits. The interest shown by Indian parents, even among the so-called wild tribes, in the education of their children is very gratifying, and gives promise that the results accomplished by the efforts now making will be of lasting benefit.

The expenses of Indian education have so far been drawn from the permanent civilization fund at the disposal of the Department of the Interior, but the fund is now so much reduced that the continuance of this beneficial work will in the future depend on specific appropriations by Congress for the purpose; and I venture to express the hope that Congress will not permit institutions so fruitful of good results to perish for want of means for their support. On the contrary, an increase of the number of such schools appears to me highly advisable.

The past year has been unusually free from disturbances among the Indian tribes. An agreement has been made with the Utes by which they surrender their large reservation in Colorado in consideration of an annuity to be paid to them, and agree to settle in severalty on certain lands designated for that purpose, as farmers, holding individual title to their land in fee-simple, inalienable for a certain period. In this way a costly Indian war has been avoided, which at one time seemed imminent, and for the first time in the history of the country an Indian nation has given up its tribal existence to be settled in severalty and to live as individuals under the common protection of the laws of the country.

The conduct of the Indians throughout the country during the past year, with but few noteworthy exceptions, has been orderly and peaceful. The guerrilla warfare carried on for two years by Victoria and his band of Southern Apaches has virtually come to an end by the death of that chief and most of his followers on Mexican soil. The disturbances caused on our northern frontier by Sitting Bull and his men, who had taken refuge in the British dominions, are also likely to cease. A large majority of his followers have surrendered to our military forces, and the remainder are apparently in progress of disintegration.

I concur with the Secretary of the Interior in expressing the earnest hope that Congress will at this session take favorable action on the bill providing for the allotment of lands on the different reservations in severalty to the Indians, with patents conferring fee-simple title inalienable for a certain period, and the eventual disposition of the residue of the reservations for general settlement, with the consent and for the benefit of the Indians, placing the latter under the equal protection of the laws of the country. This measure, together with a vigorous prosecution of our educational efforts, will work the most important and effective advance toward the solution of the Indian problem, in preparing for the gradual merging of our Indian population in the great body of American citizenship.

A large increase is reported in the disposal of public lands for settlement during the past year, which marks the prosperous growth of our agricultural industry and a vigorous movement of population toward our unoccupied lands. As this movement proceeds, the codification of our land laws, as well as proper legislation to regulate the disposition of public lands, become of more pressing necessity, and I therefore invite the consideration of Congress to the report and the accompanying draft of a bill made by the Public Lands Commission, which were communicated by me to Congress at the last session. Early action upon this important subject is highly desirable.

The attention of Congress is again asked to the wasteful depredations committed on our public timber lands and the rapid and indiscriminate destruction of our forests. The urgent necessity for legislation to this end is now generally recognized. In view of the lawless character of the depredations committed and the disastrous consequences which will inevitably follow their continuance, legislation has again and again been recommended to arrest the evil and to preserve for the people of our Western States and Territories the timber needed for domestic and other essential uses.

The report of the Director of the Geological Survey is a document of unusual interest. The consolidation of the various geological and geographical surveys and exploring enterprises, each of which has heretofore operated upon an independent plan, without concert, can not fail to be of great benefit to all those industries of the country which depend upon the development of our mineral resources. The labors of the scientific men, of recognized merit, who compose the corps of the Geological Survey, during the first season of their field operations and inquiries, appear to have been very comprehensive, and will soon be communicated to Congress in a number of volumes. The Director of the Survey recommends that the investigations carried on by his bureau, which so far have been confined to the so-called public-land States and Territories, be extended over the entire country, and that the necessary appropriation be made for this purpose. This would be particularly beneficial to the iron, coal, and other mining interests of the Mississippi Valley and of the Eastern and Southern States. The subject is commended to the careful consideration of Congress.

The Secretary of the Interior asks attention to the want of room in the public buildings of the capital, now existing and in progress of construction, for the accommodation of the clerical force employed and of the public records. Necessity has compelled the renting of private buildings in different parts of the city for the location of public offices, for which a large amount of rent is annually paid, while the separation of offices belonging to the same Department impedes the transaction of current business. The Secretary suggests that the blocks surrounding Lafayette Square on the east, north, and west be purchased as the sites for new edifices for the accommodation of the Government offices, leaving the square itself intact, and that if such buildings were constructed upon a harmonious plan of architecture they would add much to the beauty of the national capital, and would, together with the Treasury and the new State, Navy, and War Department building, form one of the most imposing groups of public edifices in the world.

The Commissioner of Agriculture expresses the confident belief that his efforts in behalf of the production of our own sugar and tea have been encouragingly rewarded. The importance of the results attained have attracted marked attention at home and have received the special consideration of foreign nations. The successful cultivation of our own tea and the manufacture of our own sugar would make a difference of many millions of dollars annually in the wealth of the nation.

The report of the Commissioner asks attention particularly to the continued prevalence of an infectious and contagious cattle disease known and dreaded in Europe and Asia as cattle plague, or pleuro-pneumonia. A mild type of this disease in certain sections of our country is the occasion of great loss to our farmers and of serious disturbance to our trade with Great Britain, which furnishes a market for most of our live stock and dressed meats. The value of neat cattle exported from the United States for the eight months ended August 31, 1880, was more than $12,000,000, and nearly double the value for the same period in 1879–an unexampled increase of export trade. Your early attention is solicited to this important matter.

The Commissioner of Education reports a continued increase of public interest in educational affairs, and that the public schools generally throughout the country are well sustained. Industrial training is attracting deserved attention, and colleges for instruction, theoretical and practical, in agriculture and mechanic arts, including the Government schools recently established for the instruction of Indian youth, are gaining steadily in public estimation. The Commissioner asks special attention to the depredations committed on the lands reserved for the future support of public instruction, and to the very great need of help from the nation for schools in the Territories and in the Southern States. The recommendation heretofore made is repeated and urged, that an educational fund be set apart from the net proceeds of the sales of the public lands annually, the income of which and the remainder of the net annual proceeds to be distributed on some satisfactory plan to the States and the Territories and the District of Columbia.

The success of the public schools of the District of Columbia, and the progress made, under the intelligent direction of the board of education and the superintendent, in supplying the educational requirements of the District with thoroughly trained and efficient teachers, is very gratifying. The acts of Congress, from time to time, donating public lands to the several States and Territories in aid of educational interests have proved to be wise measures of public policy, resulting in great and lasting benefit. It would seem to be a matter of simple justice to extend the benefits of this legislation, the wisdom of which has been so fully vindicated by experience, to the District of Columbia.

I again commend the general interests of the District of Columbia to the favorable consideration of Congress. The affairs of the District, as shown by the report of the Commissioners, are in a very satisfactory condition.

In my annual messages heretofore and in my special message of December 19, 1879, I have urged upon the attention of Congress the necessity of reclaiming the marshes of the Potomac adjacent to the capital, and I am constrained by its importance to advert again to the subject. These flats embrace an area of several hundred acres. They are an impediment to the drainage of the city and seriously impair its health. It is believed that with this substantial improvement of its river front the capital would be in all respects one of the most attractive cities in the world. Aside from its permanent population, this city is necessarily the place of residence of persons from every section of the country engaged in the public service. Many others reside here temporarily for the transaction of business with the Government.

It should not be forgotten that the land acquired will probably be worth the cost of reclaiming it and that the navigation of the river will be greatly improved. I therefore again invite the attention of Congress to the importance of prompt provision for this much needed and too long delayed improvement.

The water supply of the city is inadequate. In addition to the ordinary use throughout the city, the consumption by Government is necessarily very great in the navy-yard, arsenal, and the various Departments, and a large quantity is required for the proper preservation of the numerous parks and the cleansing of sewers. I recommend that this subject receive the early attention of Congress, and that in making provision for an increased supply such means be adopted as will have in view the future growth of the city. Temporary expedients for such a purpose can not but be wasteful of money, and therefore unwise. A more ample reservoir, with corresponding facilities for keeping it filled, should, in my judgment, be constructed. I commend again to the attention of Congress the subject of the removal from their present location of the depots of the several railroads entering the city; and I renew the recommendations of my former messages in behalf of the erection of a building for the Congressional Library, the completion of the Washington Monument, and of liberal appropriations in support of the benevolent, reformatory, and penal institutions of the District.

RUTHERFORD B. HAYES.

SPECIAL MESSAGES.

WASHINGTON, _December 9, 1880_.

_To the Senate of the United States:_

I transmit to the Senate, for its consideration with a view to ratification, a convention for the establishment, on fixed and uniform bases, of the exercise of the right of protection in Morocco, and for the settlement of certain questions connected therewith, between His Excellency the President of the United States of America; His Majesty the Emperor of Germany, King of Prussia; His Majesty the Emperor of Austria, King of Hungary; His Majesty the King of the Belgians; His Majesty the King of Denmark; His Majesty the King of Spain; His Excellency the President of the French Republic; Her Majesty the Queen of the United Kingdom of Great Britain and Ireland; His Majesty the King of Italy; His Majesty the Sultan of Morocco; His Majesty the King of the Netherlands; His Majesty the King of Portugal and the Algarves, and His Majesty the King of Sweden and Norway, signed at Madrid on the 3d day of July last.

R.B. HAYES.

EXECUTIVE MANSION, _December 13, 1880_.

_To the Senate of the United States:_

The accompanying documents, received from the Commissioner of Agriculture, are transmitted to the Senate in reply to the resolution of the 7th instant, relating to contagious diseases of cattle.

R.B. HAYES.

EXECUTIVE MANSION, _Washington, January 5, 1881_.

_To the Senate of the United States:_

I transmit, for the consideration of the Senate with a view to ratification, a convention between the United States of America and the Empire of Japan, providing for the reimbursement of certain specified expenses which may be incurred by either country in consequence of the shipwreck on its coasts of the vessels of the other.

R.B. HAYES.

EXECUTIVE MANSION, _January 5, 1881_.

_To the Senate of the United States:_

In response to the resolution of the Senate of June 21, 1879, I herewith transmit reports[42] received from the Secretary of the Interior and the Secretary of War.

R.B. HAYES.

[Footnote 42: Transmitting statements of the number of soldiers and civilians killed and wounded, number of Indians killed, value of property destroyed, and expenses incurred by the United States in certain Indian wars from 1865 to 1879.]

EXECUTIVE MANSION, _Washington, January 10, 1881_.

_To the Senate of the United States_:

I transmit herewith, for the consideration of the Senate, two treaties[43] signed at Peking on the 17th of November, 1880, by the commissioners plenipotentiary of the United States and China, respectively, together with a letter of the Secretary of State in relation thereto, and accompanying papers.

R.B. HAYES.

[Footnote 43: (1) Regulation of Chinese immigration into the United States (2) commercial intercourse and judicial procedure.]

EXECUTIVE MANSION, _Washington, January 10, 1881_.

_To the House of Representatives_:

I submit herewith, for the information of the House of Representatives, copies of correspondence with the Department of State relating to an invitation extended by the French Republic to this Government to send one or more delegates to represent it at an international congress of electricians to be held at Paris on the 15th day of September, 1881. It appears from the same correspondence that an international exhibition of electricity is to be held at the palace of the Champs Elysees, in Paris, from August 15, 1881, to the 15th of November following, and it is therefore suggested by the French authorities that it might be well to invest the delegates selected to take part in the international congress with the additional character of commissioners to the international exhibition of electricity.

In view of the important scientific, industrial, and commercial interests designed to be promoted by the proposed international congress of electricians and exhibition of electricity, I submit the subject to your favorable consideration and recommend that a suitable appropriation be made to enable this Government to accept the foregoing invitation by appointing one or more delegates to attend the congress in question.

R.B. HAYES.

EXECUTIVE MANSION, _Washington, January 18, 1881_.

_To the Senate and House of Representatives_:

I have the honor to submit herewith the report of the Public Lands Commission, embracing the history and a codification of the public-land laws; and I desire earnestly to invite the attention of Congress to this important subject.

R.B. HAYES.

EXECUTIVE MANSION, _Washington, January 20, 1881_.

_To the Senate of the United States_:

I transmit herewith to the Senate a letter from the Secretary of State, with accompanying papers, in relation to the recent effort of the Government of the United States to bring about peace between Chile and Peru and, Bolivia.

R.B. HAYES.

EXECUTIVE MANSION, _February 1, 1881_.

_To the Senate and House of Representatives_:

In compliance with the request of a large number of intelligent and benevolent citizens, and believing that it was warranted by the extraordinary circumstances of the case, on the 18th day of December, 1880, I appointed a commission consisting of George Crook and Nelson A. Miles, brigadier-generals in the Army; William Stickney, of the District of Columbia, and Walter Allen, of Massachusetts, and requested them to confer with the Ponca Indians in the Indian Territory, and, if in their judgment it was advisable, also with that part of the tribe which remained in Dakota, and “to ascertain the facts in regard to their removal and present condition so far as was necessary to determine the question as to what justice and humanity required should be done by the Government of the United States, and to report their conclusions and recommendations in the premises.”

The commission, in pursuance of these instructions, having visited the Ponca Indians at their homes in the Indian Territory and in Dakota and made a careful investigation of the subject referred to them, have reported their conclusions and recommendations, and I now submit their report, together with the testimony taken, for the consideration of Congress. A minority report by Mr. Allen is also herewith submitted.

On the 27th of December, 1880, a delegation of Ponca chiefs from the Indian Territory presented to the Executive a declaration of their wishes, in which they stated that it was their desire “to remain on the lands now occupied by the Poncas in the Indian Territory” and “to relinquish all their right and interest in the lands formerly owned and occupied by the Ponca tribe in the State of Nebraska and the Territory of Dakota;” and the declaration sets forth the compensation which they will accept for the lands to be surrendered and for the injuries done to the tribe by their removal to the Indian Territory. This declaration, agreeably to the request of the chiefs making it, is herewith transmitted to Congress.

The public attention has frequently been called to the injustice and wrong which the Ponca tribe of Indians has suffered at the hands of the Government of the United States. This subject was first brought before Congress and the country by the Secretary of the Interior in his annual report for the year 1877, in which he said:

The case of the Poncas seems entitled to especial consideration at the hands of Congress. They have always been friendly to the whites. It is said, and, as far as I have been able to learn, truthfully, that no Ponca ever killed a white man. The orders of the Government have always met with obedient compliance at their hands. Their removal from their old homes on the Missouri River was to them a great hardship. They had been born and raised there. They had houses there in which they lived according to their ideas of comfort. Many of them had engaged in agriculture and possessed cattle and agricultural implements. They were very reluctant to leave all this, but when Congress had resolved upon their removal they finally overcame that reluctance and obeyed. Considering their constant good conduct, their obedient spirit, and the sacrifices they have made, they are certainly entitled to more than ordinary care at the hands of the Government, and I urgently recommend that liberal provision be made to aid them in their new settlement.

In the same volume the report of E.A. Howard, the agent of the Poncas, is published, which contains the following:

* * * * *

I am of the opinion that the removal of the Poncas from the northern climate of Dakota to the southern climate of the Indian Territory at the season of the year it was done will prove a mistake, and that a great mortality will surely follow among the people when they shall have been here for a time and become poisoned with the malaria of the climate. Already the effects of the climate may be seen upon them in the _ennui_ that seems to have settled upon each and in the large number now sick.

It is a matter of astonishment to me that the Government should have ordered the removal of the Ponca Indians from Dakota to the Indian Territory without having first made some provision for their settlement and comfort. Before their removal was carried into effect an appropriation should have been made by Congress sufficient to have located them in their new home, by building a comfortable house for the occupancy of every family of the tribe. As the case now is, no appropriation has been made by Congress, except for a sum but little more than sufficient to remove them; no houses have been built for their use, and the result is that these people have been placed on an uncultivated reservation to live in their tents as best they may, and await further legislative action.

* * * * *

These Indians claim that the Government had no right to move them from their reservation without first obtaining from them by purchase or treaty the title which they had acquired from the Government, and for which they rendered a valuable consideration. They claim that the date of the settlement of their tribe upon the land composing their old reservation is prehistoric; that they were all born there, and that their ancestors from generations back beyond their knowledge were born and lived upon its soil, and that they finally acquired a complete and perfect title from the Government by a treaty made with the “Great Father” at Washington, which they claim made it as legitimately theirs as is the home of the white man acquired by gift or purchase.

* * * * *

The subject was again referred to in similar terms in the annual report of the Interior Department for 1878, in the reports of the Commissioner of Indian Affairs and of the agent for the Poncas, and in 1879 the Secretary of the Interior said:

That the Poncas were grievously wronged by their removal from their location on the Missouri River to the Indian Territory, their old reservation having, by a mistake in making the Sioux treaty, been transferred to the Sioux, has been at length and repeatedly set forth in my reports, as well as those of the Commissioner of Indian Affairs. All that could be subsequently done by this Department in the absence of new legislation to repair that wrong and to indemnify them for their losses has been done with more than ordinary solicitude. They were permitted to select a new location for themselves in the Indian Territory, the Quapaw Reserve, to which they had first been taken, being objectionable to them. They chose a tract of country on the Arkansas River and the Salt Fork northwest of the Pawnee Reserve. I visited their new reservation personally to satisfy myself of their condition. The lands they now occupy are among the very best in the Indian Territory in point of fertility, well watered and well timbered, and admirably adapted for agriculture as well as stock raising. In this respect their new reservation is unquestionably superior to that which they left behind them on the Missouri River. Seventy houses have been built by and for them, of far better quality than the miserable huts they formerly occupied in Dakota, and the construction of a larger number is now in progress, so that, as the agent reports, every Ponca family will be comfortably housed before January. A very liberal allowance of agricultural implements and stock cattle has been given them, and if they apply themselves to agricultural work there is no doubt that their condition will soon be far more prosperous than it has ever been before. During the first year after their removal to the Indian Territory they lost a comparatively large number of their people by death, in consequence of the change of climate, which is greatly to be deplored; but their sanitary condition is now very much improved. The death rate among them during the present year has been very low, and the number of cases of sickness is constantly decreasing. It is thought that they are now sufficiently acclimated to be out of danger.

* * * * *

A committee of the Senate, after a very full investigation of the subject, on the 31st of May, 1880, reported their conclusions to the Senate, and both the majority and minority of the committee agreed that “a great wrong had been done to the Ponca Indians.” The majority of the committee say:

* * * * *

Nothing can strengthen the Government in a just policy to the Indians so much as a demonstration of its willingness to do ample and complete justice whenever it can be shown that it has inflicted a wrong upon a weak and trusting tribe. It is impossible for the United States to hope for any confidence to be reposed in them by the Indians until there shall be shown on their part a readiness to do justice.

The minority report is equally explicit as to the duty of the Government to repair the wrong done the Poncas. It says:

* * * * *

We should be more prompt and anxious because they are weak and we are strong. In my judgment we should be liberal to the verge of lavishness in the expenditure of our money to improve their condition, so that they and all others may know that, although, like all nations and all men, we may do wrong, we are willing to make ample reparation.

The report of the commission appointed by me, of which General Crook was chairman, and the testimony taken by them and their investigations, add very little to what was already contained in the official reports of the Secretary of the Interior and the report of the Senate committee touching the injustice done to the Poncas by their removal to the Indian Territory. Happily, however, the evidence reported by the commission and their recommendations point out conclusively the true measures of redress which the Government of the United States ought now to adopt.

The commission in their conclusions omit to state the important facts as to the present condition of the Poncas in the Indian Territory, but the evidence they have reported shows clearly and conclusively that the Poncas now residing in that Territory, 521 in number, are satisfied with their new homes; that they are healthy, comfortable, and contented, and that they have freely and firmly decided to adhere to the choice announced in their letter of October 25, 1880, and in the declaration of December 27, 1880, to remain in the Indian Territory and not to return to Dakota.

The evidence reported also shows that the fragment of the Ponca tribe–perhaps 150 in number–which is still in Dakota and Nebraska prefer to remain on their old reservation.

In view of these facts I am convinced that the recommendations of the commission, together with the declaration of the chiefs of December last, if substantially followed, will afford a solution of the Ponca question which is consistent with the wishes and interests of both branches of the tribe, with the settled Indian policy of the Government, and, as nearly as is now practicable, with the demands of justice.

Our general Indian policy for the future should embrace the following leading ideas:

1. The Indians should be prepared for citizenship by giving to their young of both sexes that industrial and general education which is required to enable them to be self-supporting and capable of self-protection in a civilized community.

2. Lands should be allotted to the Indians in severalty, inalienable for a certain period.

3. The Indians should have a fair compensation for their lands not required for individual allotments, the amount to be invested, with suitable safeguards, for their benefit.

4. With these prerequisites secured, the Indians should be made citizens and invested with the rights and charged with the responsibilities of citizenship.

It is therefore recommended that legislation be adopted in relation to the Ponca Indians, authorizing the Secretary of the Interior to secure to the individual members of the Ponca tribe, in severalty, sufficient land for their support, inalienable for a term of years and until the restriction upon alienation may be removed by the President. Ample time and opportunity should be given to the members of the tribe freely to choose their allotments either on their old or their new reservation.

Full compensation should be made for the lands to be relinquished, for their losses by the Sioux depredations and by reason of their removal to the Indian Territory, the amount not to be less than the sums named in the declaration of the chiefs made December 27, 1880.

In short, nothing should be left undone to show to the Indians that the Government of the United States regards their rights as equally sacred with those of its citizens.

The time has come when the policy should be to place the Indians as rapidly as practicable on the same footing with the other permanent inhabitants of our country.

I do not undertake to apportion the blame for the injustice done to the Poncas. Whether the Executive or Congress or the public is chiefly in fault is not now a question of practical importance. As the Chief Executive at the time when the wrong was consummated, I am deeply sensible that enough of the responsibility for that wrong justly attaches to me to make it my particular duty and earnest desire to do all I can to give to these injured people that measure of redress which is required alike by justice and by humanity.

RUTHERFORD B. HAYES.

EXECUTIVE MANSION, _Washington, February 2, 1881_.

_To the House of Representatives_:

I transmit herewith, for consideration and appropriate action by Congress, a letter from the Secretary of the Navy, in relation to the proposed establishment of naval stations of the United States on the American Isthmus. In this paper the current testimony of prominent officers of this Government for a long series of years, as to the feasibility and necessity of establishing such stations and the great advantage to flow therefrom to the naval and commercial interests of the United States, is clearly set forth, and the considerations adduced can not but commend themselves, I am confident, to the careful attention of Congress. Convinced of the wisdom and propriety of the suggestions thus presented, I recommend to Congress the appropriation of the sum named by the Secretary of the Navy, to be at his disposal at once, for expenditure as soon as suitable arrangements can be made to the proposed end.

R.B. HAYES.

EXECUTIVE MANSION, _February 4, 1881_.

_To the Senate and House of Representatives_:

I herewith transmit a communication from the Secretary of the Navy, with reference to the dispatch of a vessel for the relief of the _Jeannette_ polar expedition, and commend the recommendations of the Secretary to the prompt and favorable action of Congress.

R.B. HAYES.

EXECUTIVE MANSION, _February 14, 1881_.

_To the Senate and House of Representatives_:

I herewith transmit the final report addressed to me by the commissioners appointed under the act of Congress approved July 19, 1876, authorizing the repavement of that part of Pennsylvania avenue lying between the Treasury Department and the Capitol Grounds.

R.B. HAYES.

WASHINGTON, _February 17, 1881_.

_To the House of Representatives_:

I transmit herewith a report of the Secretary of State, in response to the resolution addressed to him by the House of Representatives of the 31st of January ultimo, on the subject of international action for the restoration of silver to full use as money.

The prospect of an early international conference, promising valuable results in accordance with the interests of this country, is such that I recommend to the immediate attention of Congress an appropriation providing for the proper representation of this Government at such conference.

R.B. HAYES.

WASHINGTON, _February 21, 1881_.

_To the Senate of the United States_:

In compliance with the resolution of the Senate of 15th of June, 1880, requesting the Secretary of State to report to that body at its next regular session what changes, if any, of the laws regulating the management of the Department of State, or of the divisions and the bureaus thereof, are necessary or would be beneficial in promoting the efficiency or economy of its administration or management, and also to make report concerning the mode of keeping the departmental accounts, the checks and safeguards upon expenditures, and the administrative or clerical changes for the better which may suggest themselves as expedient, I transmit herewith a report from the Secretary of State upon the subjects embraced in that resolution so far as they touch the Department of State.

R.B. HAYES.

EXECUTIVE MANSION, _February 25, 1881_.

_To the Senate of the United States_:

I transmit herewith, for the consideration of the Senate with a view to advising and consenting to the ratification thereof, a convention for the extradition of criminals, between the United States of America and the United States of Colombia, signed at Bogota on the 3d of January, 1881. I also transmit certain correspondence touching the negotiation of said convention.

R.B. HAYES.

EXECUTIVE MANSION, _Washington, February 25, 1881._

_To the Senate of the United States_:

I transmit herewith to the Senate, for its consideration with a view to ratification in due course, a convention supplementary to the consular convention of May 8, 1878, between the United States of America and His Majesty the King of Italy, concluded in the city of Washington on the 24th of February, 1881.

R.B. HAYES.

EXECUTIVE MANSION, _February 28, 1881_.

_To the Senate of the United States_:

I transmit herewith a copy of proclamation[44] for the convening of an extra session of the Senate of the United States at the Capitol, in the city of Washington, on the 4th day of March next, at noon.

R.B. HAYES.

[Footnote 44: See pp. 639-640.]

EXECUTIVE MANSION, _February 28, 1881_.

_To the Senate and House of Representatives_:

I transmit herewith a copy of a letter addressed to the chairman of the Civil Service Commission on the 3d of December last, requesting to be furnished with a report upon the result in the post-office and custom-house in the city of New York of the application of the civil-service rules requiring open competitive examinations for appointments and promotions, together with the report of Hon. Dorman B. Eaton, the chairman of the Commission, in response.

The report presents a very gratifying statement of the results of the application of the rules referred to in the two largest and most important local offices in the civil service of the Government. The subject is one of great importance to the people of the whole country. I would commend the suggestions and recommendation of the chairman of the Commission to the careful consideration of Congress.

R.B. HAYES.

EXECUTIVE MANSION, _Washington, February 28, 1881_.

_To the Senate of the United States_:

I transmit herewith, in answer to the resolution of the Senate of the 20th ultimo, a report from the Secretary of State, with accompanying papers.[45]

R.B. HAYES.

[Footnote 45: Correspondence relative to the sending to the United States by foreign governments of criminals, paupers, and insane persons.]

EXECUTIVE MANSION, _March 3, 1881_.

_To the Senate of the United States_:

I have the honor to inform the Senate that Hon. Benjamin Harrison, Senator elect from the State of Indiana, has resigned his office as a member of the Commission for the Improvement of the Mississippi River, and the same has been accepted to take effect March 3, 1881.

R.B. HAYES.

EXECUTIVE MANSION, _March 3, 1881_.

_To the Senate of the United States_:

I have the honor to inform the Senate that Hon. John Sherman, Senator elect from the State of Ohio, has resigned the position of Secretary of the Treasury, and that said resignation has been accepted to take effect at the close of the present day.

R.B. HAYES.

VETO MESSAGE.

EXECUTIVE MANSION, _March 3, 1881_.

_To the House of Representatives_:

Having considered the bill entitled “An act to facilitate the refunding of the national debt,” I am constrained to return it to the House of Representatives, in which it originated, with the following statement of my objections to its passage:

The imperative necessity for prompt action and the pressure of public duties in this closing week of my term of office compel me to refrain from any attempt to make a full and satisfactory presentation of the objections to the bill.

The importance of the passage at the present session of Congress of a suitable measure for the refunding of the national debt which is about to mature is generally recognized. It has been urged upon the attention of Congress by the Secretary of the Treasury and in my last annual message. If successfully accomplished, it will secure a large decrease in the annual interest payment of the nation, and I earnestly recommend, if the bill before me shall fail, that another measure for this purpose be adopted before the present Congress adjourns.

While, in my opinion, it would be unwise to authorize the Secretary of the Treasury, in his discretion, to offer to the public bonds bearing 3-1/2 per cent interest in aid of refunding, I should not deem it my duty to interpose my constitutional objection to the passage of the present bill if it did not contain, in its fifth section, provisions which, in my judgment, seriously impair the value and tend to the destruction of the present national banking system of the country. This system has now been in operation almost twenty years. No safer or more beneficial banking system was ever established. Its advantages as a business are free to all who have the necessary capital. It furnishes a currency to the public which for convenience and security of the bill holder has probably never been equaled by that of any other banking system. Its notes are secured by the deposit with the Government of the interest-bearing bonds of the United States.

The section of the bill before me which relates to the national banking system, and to which objection is made, is not an essential part of a refunding measure. It is as follows:

SEC. 5. From and after the 1st day of July, 1881, the 3 per cent bonds authorized by the first section of this act shall be the only bonds receivable as security for national-bank circulation or as security for the safe-keeping and prompt payment of the public money deposited with such banks; but when any such bonds deposited for the purposes aforesaid shall be designated for purchase or redemption by the Secretary of the Treasury, the banking association depositing the same shall have the right to substitute other issues of the bonds of the United States in lieu thereof: _Provided_, That no bond upon which interest has ceased shall be accepted or shall be continued on deposit as security for circulation or for the safe-keeping of the public money; and in case bonds so deposited shall not be withdrawn, as provided by law, within thirty days after the interest has ceased thereon, the banking association depositing the same shall be subject to the liabilities and proceedings on the part of the Comptroller provided for in section 5234 of the Revised Statutes of the United States: _And provided further_, That section 4 of the act of June 20, 1874, entitled “An act fixing the amount of United States notes, providing for a redistribution of the national-bank currency, and for other purposes,” be, and the same is hereby, repealed, and sections 5159 and 5160 of the Revised Statutes of the United States be, and the same are hereby, reenacted.

Under this section it is obvious that no additional banks will hereafter be organized, except possibly in a few cities or localities where the prevailing rates of interest in ordinary business are extremely low. No new banks can be organized and no increase of the capital of existing banks can be obtained except by the purchase and deposit of 3 per cent bonds. No other bonds of the United States can be used for the purpose. The one thousand millions of other bonds recently issued by the United States, and bearing a higher rate of interest than 3 per cent, and therefore a better security for the bill holder, can not after the 1st of July next be received as security for bank circulation. This is a radical change in the banking law. It takes from the banks the right they have heretofore had under the law to purchase and deposit as security for their circulation any of the bonds issued by the United States, and deprives the bill holder of the best security which the banks are able to give by requiring them to deposit bonds having the least value of any bonds issued by the Government.

The average rate of taxation of capital employed in banking is more than double the rate of taxation upon capital employed in other legitimate business. Under these circumstances, to amend the banking law so as to deprive the banks of the privilege of securing their notes by the most valuable bonds issued by the Government will, it is believed, in a large part of the country, be a practical prohibition of the organization of new banks and prevent the existing banks from enlarging their capital. The national banking system, if continued at all, will be a monopoly in the hands of those already engaged in it, who may purchase the Government bonds bearing a more favorable rate of interest than the 3 per cent bonds prior to next July.

To prevent the further organization of banks is to put in jeopardy the whole system, by taking from it that feature which makes it, as it now is, a banking system free upon the same terms to all who wish to engage in it. Even the existing banks will be in danger of being driven from business by the additional disadvantages to which they will be subjected by this bill. In short, I can not but regard the fifth section of the bill as a step in the direction of the destruction of the national banking system.

Our country, after a long period of business depression, has just entered upon a career of unexampled prosperity.

The withdrawal of the currency from circulation of the national banks, and the enforced winding up of the banks in consequence, would inevitably bring serious embarrassment and disaster to the business of the country. Banks of issue are essential instruments of modern commerce. If the present efficient and admirable system of banking is broken down, it will inevitably be followed by a recurrence to other and inferior methods of banking. Any measure looking to such a result will be a disturbing element in our financial system. It will destroy confidence and surely check the growing prosperity of the country.

Believing that a measure for refunding the national debt is not necessarily connected with the national banking law, and that any refunding act would defeat its own object if it imperiled the national banking system or seriously impaired its usefulness, and convinced that section 5 of the bill before me would, if it should become a law, work great harm, I herewith return the bill to the House of Representatives for that further consideration which is provided for in the Constitution.

RUTHERFORD B. HAYES.

PROCLAMATION.

BY THE PRESIDENT OF THE UNITED STATES OF AMERICA.

A PROCLAMATION.

Whereas objects of interest to the United States require that the Senate should be convened at 12 o’clock on the 4th of March next to receive and act upon such communications as may be made to it on the part of the Executive:

Now, therefore, I, Rutherford B. Hayes, President of the United States, have considered it to be my duty to issue this my proclamation, declaring that an extraordinary occasion requires the Senate of the United States to convene for the transaction of business at the Capitol, in the city of Washington, on the 4th day of March next, at 12 o’clock at noon on that day, of which all who shall at that time be entitled to act as members of that body are hereby required to take notice.

[SEAL.]

Given under my hand and the seal of the United States, at Washington, the 28th day of February, A.D. 1881, and of the Independence of the United States of America the one hundred and fifth.

R.B. HAYES.

By the President:
WM. M. EVARTS,
_Secretary of State_.

EXECUTIVE ORDER.

EXECUTIVE MANSION, _Washington, February 22, 1881_.

The SECRETARY OF WAR:

In view of the well-known fact that the sale of intoxicating liquors in the Army of the United States is the cause of much demoralization among both officers and men, and that it gives rise to a large proportion of the cases before general and garrison courts-martial, involving great expense and serious injury to the service–

_It is therefore directed_, That the Secretary of War take suitable steps, as far as practicable consistently with vested rights, to prevent the sale of intoxicating liquors as a beverage at the camps, forts, and other posts of the Army.

R.B. HAYES.