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Title: State of the Union Addresses

Author: William McKinley

Release date: February 1, 2004 [eBook #5031]
                Most recently updated: December 2, 2014

Language: English

Credits: Produced by James Linden. HTML version by Al Haines


*** START OF THE PROJECT GUTENBERG EBOOK STATE OF THE UNION ADDRESSES ***




Produced by James Linden.  HTML version by Al Haines.








State of the Union Addresses of William McKinley



The addresses are separated by three asterisks: ***

Dates of addresses by William McKinley in this eBook:

  December 6, 1897
  December 5, 1898
  December 5, 1899
  December 3, 1900



***

State of the Union Address
William McKinley
December 6, 1897

To the Senate and House of Representatives:

It gives me pleasure to extend greeting to the Fifty-fifth Congress,
assembled in regular session at the seat of Government, with many of whose
Senators and Representatives I have been associated in the legislative
service. Their meeting occurs under felicitous conditions, justifying
sincere congratulation and calling for our grateful acknowledgment to a
beneficent Providence which has so signally blessed and prospered us as a
nation. Peace and good will with all the nations of the earth continue
unbroken.

A matter of genuine satisfaction is the growing feeling of fraternal regard
and unification of all sections of our country, the incompleteness of which
has too long delayed realization of the highest blessings of the Union. The
spirit of patriotism is universal and is ever increasing in fervor. The
public questions which now most engross us are lifted far above either
partisanship, prejudice, or former sectional differences. They affect every
part of our common country alike and permit of no division on ancient
lines. Questions of foreign policy, of revenue, the soundness of the
currency, the inviolability of national obligations, the improvement of the
public service, appeal to the individual conscience of every earnest
citizen to whatever party he belongs or in whatever section of the country
he may reside.

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

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

The work of putting our finances upon a sound basis, difficult as it may
seem, will appear easier when we recall the financial operations of the
Government since 1866. On the 30th day of June of that year we had
outstanding demand liabilities in the sum of $728,868,447.41. On the 1st of
January, 1879, these liabilities had been reduced to $443,889,495.88. Of our
interest-bearing obligations, the figures are even more striking. On July
1, 1866, the principal of the interest-bearing debt of the Government was
$2,332,331,208. On the 1st day of July, 1893, this sum had been reduced to
$585,137,100, or an aggregate reduction of $1,747,294,108. The
interest-bearing debt of the United States on the 1st day of December,
1897, was $847,365,620. The Government money now outstanding (December 1)
consists of $346,681,016 of United States notes, $107,793,280 of Treasury
notes issued by authority of the law of 1890, $384,963,504 of silver
certificates, and $61,280,761 of standard silver dollars.

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

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

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

The evil of the present system is found in the great cost to the Government
of maintaining the parity of our different forms of money, that is, keeping
all of them at par with gold. We surely cannot be longer heedless of the
burden this imposes upon the people, even under fairly prosperous
conditions, while the past four years have demonstrated that it is not only
an expensive charge upon the Government, but a dangerous menace to the
National credit.

It is manifest that we must devise some plan to protect the Government
against bond issues for repeated redemptions. We must either curtail the
opportunity for speculation, made easy by the multiplied redemptions of our
demand obligations, or increase the gold reserve for their redemption. We
have $900,000,000 of currency which the Government by solemn enactment has
undertaken to keep at par with gold. Nobody is obliged to redeem in gold
but the Government. The banks are not required to redeem in gold. The
Government is obliged to keep equal with gold all its outstanding currency
and coin obligations, while its receipts are not required to be paid in
gold. They are paid in every kind of money but gold, and the only means by
which the Government can with certainty get gold is by borrowing. It can
get it in no other way when it most needs it. The Government without any
fixed gold revenue is pledged to maintain gold redemption, which it has
steadily and faithfully done, and which, under the authority now given, it
will continue to do.

The law which requires the Government, after having redeemed its United
States notes, to pay them out again as current funds, demands a constant
replenishment of the gold reserve. This is especially so in times of
business panic and when the revenues are insufficient to meet the expenses
of the Government. At such times the Government has no other way to supply
its deficit and maintain redemption but through the increase of its bonded
debt, as during the Administration of my predecessor, when $262,315,400 of
four-and-a-half per cent bonds were issued and sold and the proceeds used
to pay the expenses of the Government in excess of the revenues and sustain
the gold reserve. While it is true that the greater part of the proceeds of
these bonds were used to supply deficient revenues, a considerable portion
was required to maintain the gold reserve.

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

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

In my view, it is of the utmost importance that the Government should be
relieved from the burden of providing all the gold required for exchanges
and export. This responsibility is alone borne by the Government, without
any of the usual and necessary banking powers to help itself. The banks do
not feel the strain of gold redemption. The whole strain rests upon the
Government, and the size of the gold reserve in the Treasury has come to
be, with or without reason, the signal of danger or of security. This ought
to be stopped.

If we are to have an era of prosperity in the country, with sufficient
receipts for the expenses of the Government, we may feel no immediate
embarrassment from our present currency; but the danger still exists, and
will be ever present, menacing us so long as the existing system continues.
And, besides, it is in times of adequate revenues and business tranquillity
that the Government should prepare for the worst. We cannot avoid, without
serious consequences, the wise consideration and prompt solution of this
question.

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

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

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

The most important problem with which this Government is now called upon to
deal pertaining to its foreign relations concerns its duty toward Spain and
the Cuban insurrection. Problems and conditions more or less in common with
those now existing have confronted this Government at various times in the
past. The story of Cuba for many years has been one of unrest, growing
discontent, an effort toward a larger enjoyment of liberty and
self-control, of organized resistance to the mother country, of depression
after distress and warfare, and of ineffectual settlement to be followed by
renewed revolt. For no enduring period since the enfranchisement of the
continental possessions of Spain in the Western Continent has the condition
of Cuba or the policy of Spain toward Cuba not caused concern to the United
States.

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

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

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

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

The offer made by my predecessor in April, 1896, tendering the friendly
offices of this Government, failed. Any mediation on our part was not
accepted. In brief, the answer read: "There is no effectual way to pacify
Cuba unless it begins with the actual submission of the rebels to the
mother country." Then only could Spain act in the promised direction, of
her own motion and after her own plans.

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

Against this abuse of the rights of war I have felt constrained on repeated
occasions to enter the firm and earnest protest of this Government. There
was much of public condemnation of the treatment of American citizens by
alleged illegal arrests and long imprisonment awaiting trial or pending
protracted judicial proceedings. I felt it my first duty to make instant
demand for the release or speedy trial of all American citizens under
arrest. Before the change of the Spanish cabinet in October last twenty-two
prisoners, citizens of the United States, had been given their freedom.

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

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

No solution was proposed to which the slightest idea of humiliation to
Spain could attach, and, indeed, precise proposals were withheld to avoid
embarrassment to that Government. All that was asked or expected was that
some safe way might be speedily provided and permanent peace restored. It
so chanced that the consideration of this offer, addressed to the same
Spanish administration which had declined the tenders of my predecessor,
and which for more than two years had poured men and treasure into Cuba in
the fruitless effort to suppress the revolt, fell to others. Between the
departure of General Woodford, the new envoy, and his arrival in Spain the
statesman who had shaped the policy of his country fell by the hand of an
assassin, and although the cabinet of the late premier still held office
and received from our envoy the proposals he bore, that cabinet gave place
within a few days thereafter to a new administration, under the leadership
of Sagasta.

The reply to our note was received on the 23d day of October. It is in the
direction of a better understanding. It appreciates the friendly purposes
of this Government. It admits that our country is deeply affected by the
war in Cuba and that its desires for peace are just. It declares that the
present Spanish government is bound by every consideration to a change of
policy that should satisfy the United States and pacify Cuba within a
reasonable time. To this end Spain has decided to put into effect the
political reforms heretofore advocated by the present premier, without
halting for any consideration in the path which in its judgment leads to
peace. The military operations, it is said, will continue, but will be
humane and conducted with all regard for private rights, being accompanied
by political action leading to the autonomy of Cuba while guarding Spanish
sovereignty. This, it is claimed, will result in investing Cuba with a
distinct personality, the island to be governed by an executive and by a
local council or chamber, reserving to Spain the control of the foreign
relations, the army and navy, and the judicial administration. To
accomplish this the present government proposes to modify existing
legislation by decree, leaving the Spanish Cortes, with the aid of Cuban
senators and deputies, to solve the economic problem and properly
distribute the existing debt.

In the absence of a declaration of the measures that this Government
proposes to take in carrying out its proffer of good offices, it suggests
that Spain be left free to conduct military operations and grant political
reforms, while the United States for its part shall enforce its neutral
obligations and cut off the assistance which it is asserted the insurgents
receive from this country. The supposition of an indefinite prolongation of
the war is denied. It is asserted that the western provinces are already
well-nigh reclaimed, that the planting of cane and tobacco therein has been
resumed, and that by force of arms and new and ample reforms very early and
complete pacification is hoped for.

The immediate amelioration of existing conditions under the new
administration of Cuban affairs is predicted, and therewithal the
disturbance and all occasion for any change of attitude on the part of the
United States. Discussion of the question of the international duties and
responsibilities of the United States as Spain understands them is
presented, with an apparent disposition to charge us with failure in this
regard. This charge is without any basis in fact. It could not have been
made if Spain had been cognizant of the constant efforts this Government
has made, at the cost of millions and by the employment of the
administrative machinery of the nation at command, to perform its full duty
according to the law of nations. That it has successfully prevented the
departure of a single military expedition or armed vessel from our shores
in violation of our laws would seem to be a sufficient answer. But of this
aspect of the Spanish note it is not necessary to speak further now. Firm
in the conviction of a wholly performed obligation, due response to this
charge has been made in diplomatic course.

Throughout all these horrors and dangers to our own peace this Government
has never in any way abrogated its sovereign prerogative of reserving to
itself the determination of its policy and course according to its own high
sense of right and in consonance with the dearest interests and convictions
of our own people should the prolongation of the strife so demand.

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

Recognition of the belligerency of the Cuban insurgents has often been
canvassed as a possible, if not inevitable, step both in regard to the
previous ten years' struggle and during the present war. I am not unmindful
that the two Houses of Congress in the spring of 1896 expressed the opinion
by concurrent resolution that a condition of public war existed requiring
or justifying the recognition of a state of belligerency in Cuba, and
during the extra session the Senate voted a joint resolution of like
import, which, however, was not brought to a vote in the House of
Representatives. In the presence of these significant expressions of the
sentiment of the legislative branch it behooves the Executive to soberly
consider the conditions under which so important a measure must needs rest
for justification. It is to be seriously considered whether the Cuban
insurrection possesses beyond dispute the attributes of statehood, which
alone can demand the recognition of belligerency in its favor. Possession,
in short, of the essential qualifications of sovereignty by the insurgents
and the conduct of the war by them according to the received code of war
are no less important factors toward the determination of the problem of
belligerency than are the influences and consequences of the struggle upon
the internal polity of the recognizing state.

The wise utterances of President Grant in his memorable message of December
7, 1875, are signally relevant to the present situation in Cuba, and it may
be wholesome now to recall them. At that time a ruinous conflict had for
seven years wasted the neighboring island. During all those years an utter
disregard of the laws of civilized warfare and of the just demands of
humanity, which called forth expressions of condemnation from the nations
of Christendom, continued unabated. Desolation and ruin pervaded that
productive region, enormously affecting the commerce of all commercial
nations, but that of the United States more than any other by reason of
proximity and larger trade and intercourse. At that juncture General Grant
uttered these words, which now, as then, sum up the elements of the
problem: A recognition of the independence of Cuba being, in my opinion,
impracticable and indefensible, the question which next presents itself is
that of the recognition of belligerent rights in the parties to the
contest.

In a former message to Congress I had occasion to consider this question,
and reached the conclusion that the conflict in Cuba, dreadful and
devastating as were its incidents, did not rise to the fearful dignity of
war. It is possible that the acts of foreign powers, and even acts of Spain
herself, of this very nature, might be pointed to in defense of such
recognition. But now, as in its past history, the United States should
carefully avoid the false lights which might lead it into the mazes of
doubtful law and of questionable propriety, and adhere rigidly and sternly
to the rule, which has been its guide, of doing only that which is right
and honest and of good report. The question of according or of withholding
rights of belligerency must be judged in every case in view of the
particular attending facts. Unless justified by necessity, it is always,
and justly, regarded as an unfriendly act and a gratuitous demonstration of
moral support to the rebellion. It is necessary, and it is required, when
the interests and rights of another government or of its people are so far
affected by a pending civil conflict as to require a definition of its
relations to the parties thereto. But this conflict must be one which will
be recognized in the sense of international law as war. Belligerence, too,
is a fact. The mere existence of contending armed bodies and their
occasional conflicts do not constitute war in the sense referred to.
Applying to the existing condition of affairs in Cuba the tests recognized
by publicists and writers on international law, and which have been
observed by nations of dignity, honesty, and power when free from sensitive
or selfish and unworthy motives, I fail to find in the insurrection the
existence of such a substantial political organization, real, palpable, and
manifest to the world, having the forms and capable of the ordinary
functions of government toward its own people and to other states, with
courts for the administration of justice, with a local habitation,
possessing such organization of force, such material, such occupation of
territory, as to take the contest out of the category of a mere rebellious
insurrection or occasional skirmishes and place it on the terrible footing
of war, to which a recognition of belligerency would aim to elevate it. The
contest, moreover, is solely on land; the insurrection has not possessed
itself of a single seaport whence it may send forth its flag, nor has it
any means of communication with foreign powers except through the military
lines of its adversaries. No apprehension of any of those sudden and
difficult complications which a war upon the ocean is apt to precipitate
upon the vessels, both commercial and national, and upon the consular
officers of other powers calls for the definition of their relations to the
parties to the contest. Considered as a question of expediency, I regard
the accordance of belligerent rights still to be as unwise and premature as
I regard it to be, at present, indefensible as a measure of right. Such
recognition entails upon the country according the rights which flow from
it difficult and complicated duties, and requires the exaction from the
contending parties of the strict observance of their rights and
obligations. It confers the right of search upon the high seas by vessels
of both parties; it would subject the carrying of arms and munitions of
war, which now may be transported freely and without interruption in the
vessels of the United States, to detention and to possible seizure; it
would give rise to countless vexatious questions, would release the parent
Government from responsibility for acts done by the insurgents, and would
invest Spain with the right to exercise the supervision recognized by our
treaty of 1795 over our commerce on the high seas, a very large part of
which, in its traffic between the Atlantic and the Gulf States and between
all of them and the States on the Pacific, passes through the waters which
wash the shores of Cuba. The exercise of this supervision could scarce fail
to lead, if not to abuses, certainly to collisions perilous to the peaceful
relations of the two States. There can be little doubt to what result such
supervision would before long draw this nation. It would be unworthy of the
United States to inaugurate the possibilities of such result by measures of
questionable right or expediency or by any indirection. Turning to the
practical aspects of a recognition of belligerency and reviewing its
inconveniences and positive dangers, still further pertinent considerations
appear. In the code of nations there is no such thing as a naked
recognition of belligerency, unaccompanied by the assumption of
international neutrality. Such recognition, without more, will not confer
upon either party to a domestic conflict a status not theretofore actually
possessed or affect the relation of either party to other states. The act
of recognition usually takes the form of a solemn proclamation of
neutrality, which recites the de facto condition of belligerency as its
motive. It announces a domestic law of neutrality in the declaring state.
It assumes the international obligations of a neutral in the presence of a
public state of war. It warns all citizens and others within the
jurisdiction of the proclaimant that they violate those rigorous
obligations at their own peril and can not expect to be shielded from the
consequences. The right of visit and search on the seas and seizure of
vessels and cargoes and contraband of war and good prize under admiralty
law must under international law be admitted as a legitimate consequence of
a proclamation of belligerency. While according the equal belligerent
rights defined by public law to each party in our ports disfavors would be
imposed on both, which, while nominally equal, would weigh heavily in
behalf of Spain herself. Possessing a navy and controlling the ports of
Cuba, her maritime rights could be asserted not only for the military
investment of the island, but up to the margin of our own territorial
waters, and a condition of things would exist for which the Cubans within
their own domain could not hope to create a parallel, while its creation
through aid or sympathy from within our domain would be even more
impossible than now, with the additional obligations of international
neutrality we would perforce assume.

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

For these reasons I regard the recognition of the belligerency of the Cuban
insurgents as now unwise, and therefore inadmissible. Should that step
hereafter be deemed wise as a measure of right and duty, the Executive will
take it.

Intervention upon humanitarian grounds has been frequently suggested and
has not failed to receive my most anxious and earnest consideration. But
should such a step be now taken, when it is apparent that a hopeful change
has supervened in the policy of Spain toward Cuba? A new government has
taken office in the mother country. It is pledged in advance to the
declaration that all the effort in the world can not suffice to maintain
peace in Cuba by the bayonet; that vague promises of reform after
subjugation afford no solution of the insular problem; that with a
substitution of commanders must come a change of the past system of warfare
for one in harmony with a new policy, which shall no longer aim to drive
the Cubans to the "horrible alternative of taking to the thicket or
succumbing in misery;" that reforms must be instituted in accordance with
the needs and circumstances of the time, and that these reforms, while
designed to give full autonomy to the colony and to create a virtual entity
and self-controlled administration, shall yet conserve and affirm the
sovereignty of Spain by a just distribution of powers and burdens upon a
basis of mutual interest untainted by methods of selfish expediency.

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

Decrees in application of the foreshadowed reforms have already been
promulgated. The full text of these decrees has not been received, but as
furnished in a telegraphic summary from our minister are: All civil and
electoral rights of peninsular Spaniards are, in virtue of existing
constitutional authority, forthwith extended to colonial Spaniards. A
scheme of autonomy has been proclaimed by decree, to become effective upon
ratification by the Cortes. It creates a Cuban parliament, which, with the
insular executive, can consider and vote upon all subjects affecting local
order and interests, possessing unlimited powers save as to matters of
state, war, and the navy, as to which the Governor-General acts by his own
authority as the delegate of the central Government. This parliament
receives the oath of the Governor-General to preserve faithfully the
liberties and privileges of the colony, and to it the colonial secretaries
are responsible. It has the right to propose to the central Government,
through the Governor-General, modifications of the national charter and to
invite new projects of law or executive measures in the interest of the
colony.

Besides its local powers, it is competent, first, to regulate electoral
registration and procedure and prescribe the qualifications of electors and
the manner of exercising suffrage; second, to organize courts of justice
with native judges from members of the local bar; third, to frame the
insular budget, both as to expenditures and revenues, without limitation of
any kind, and to set apart the revenues to meet the Cuban share of the
national budget, which latter will be voted by the national Cortes with the
assistance of Cuban senators and deputies; fourth, to initiate or take part
in the negotiations of the national Government for commercial treaties
which may affect Cuban interests; fifth, to accept or reject commercial
treaties which the national Government may have concluded without the
participation of the Cuban government; sixth, to frame the colonial tariff,
acting in accord with the peninsular Government in scheduling articles of
mutual commerce between the mother country and the colonies. Before
introducing or voting upon a bill the Cuban government or the chambers will
lay the project before the central Government and hear its opinion thereon,
all the correspondence in such regard being made public. Finally, all
conflicts of jurisdiction arising between the different municipal,
provincial, and insular assemblies, or between the latter and the insular
executive power, and which from their nature may not be referable to the
central Government for decision, shall be submitted to the courts.

That the government of Sagasta has entered upon a course from which
recession with honor is impossible can hardly be questioned; that in the
few weeks it has existed it has made earnest of the sincerity of its
professions is undeniable. I shall not impugn its sincerity, nor should
impatience be suffered to embarrass it in the task it has undertaken. It is
honestly due to Spain and to our friendly relations with Spain that she
should be given a reasonable chance to realize her expectations and to
prove the asserted efficacy of the new order of things to which she stands
irrevocably committed. She has recalled the commander whose brutal orders
inflamed the American mind and shocked the civilized world. She has
modified the horrible order of concentration and has undertaken to care for
the helpless and permit those who desire to resume the cultivation of their
fields to do so, and assures them of the protection of the Spanish
Government in their lawful occupations. She has just released the
Competitor prisoners, heretofore sentenced to death, and who have been the
subject of repeated diplomatic correspondence during both this and the
preceding Administration.

Not a single American citizen is now in arrest or confinement in Cuba of
whom this Government has any knowledge. The near future will demonstrate
whether the indispensable condition of a righteous peace, just alike to the
Cubans and to Spain as well as equitable to all our interests so intimately
involved in the welfare of Cuba, is likely to be attained. If not, the
exigency of further and other action by the United States will remain to be
taken. When that time comes that action will be determined in the line of
indisputable right and duty. It will be faced, without misgiving or
hesitancy in the light of the obligation this Government owes to itself, to
the people who have confided to it the protection of their interests and
honor, and to humanity.

Sure of the right, keeping free from all offense ourselves, actuated only
by upright and patriotic considerations, moved neither by passion nor
selfishness, the Government will continue its watchful care over the rights
and property of American citizens and will abate none of its efforts to
bring about by peaceful agencies a peace which shall be honorable and
enduring. If it shall hereafter appear to be a duty imposed by our
obligations to ourselves, to civilization and humanity to intervene with
force, it shall be without fault on our part and only because the necessity
for such action will be so clear as to command the support and approval of
the civilized world.

By a special message dated the 16th day of June last, I laid before the
Senate a treaty signed that day by the plenipotentiaries of the United
States and of the Republic of Hawaii, having for its purpose the
incorporation of the Hawaiian Islands as an integral part of the United
States and under its sovereignty. The Senate having removed the injunction
of secrecy, although the treaty is still pending before that body, the
subject may be properly referred to in this Message because the necessary
action of the Congress is required to determine by legislation many details
of the eventual union should the fact of annexation be accomplished, as I
believe it should be.

While consistently disavowing from a very early period any aggressive
policy of absorption in regard to the Hawaiian group, a long series of
declarations through three-quarters of a century has proclaimed the vital
interest of the United States in the independent life of the Islands and
their intimate commercial dependence upon this country. At the same time it
has been repeatedly asserted that in no event could the entity of Hawaiian
statehood cease by the passage of the Islands under the domination or
influence of another power than the United States. Under these
circumstances, the logic of events required that annexation, heretofore
offered but declined, should in the ripeness of time come about as the
natural result of the strengthening ties that bind us to those Islands, and
be realized by the free will of the Hawaiian State.

That treaty was unanimously ratified without amendment by the Senate and
President of the Republic of Hawaii on the 10th of September last, and only
awaits the favorable action of the American Senate to effect the complete
absorption of the Islands into the domain of the United States. What the
conditions of such a union shall be, the political relation thereof to the
United States, the character of the local administration, the quality and
degree of the elective franchise of the inhabitants, the extension of the
federal laws to the territory or the enactment of special laws to fit the
peculiar condition thereof, the regulation if need be of the labor system
therein, are all matters which the treaty has wisely relegated to the
Congress.

If the treaty is confirmed as every consideration of dignity and honor
requires, the wisdom of Congress will see to it that, avoiding abrupt
assimilation of elements perhaps hardly yet fitted to share in the highest
franchises of citizenship, and having due regard to the geographical
conditions, the most just provisions for self-rule in local matters with
the largest political liberties as an integral part of our Nation will be
accorded to the Hawaiians. No less is due to a people who, after nearly
five years of demonstrated capacity to fulfill the obligations of
self-governing statehood, come of their free will to merge their destinies
in our body-politic.

The questions which have arisen between Japan and Hawaii by reason of the
treatment of Japanese laborers emigrating to the Islands under the
Hawaiian-Japanese convention of 1888, are in a satisfactory stage of
settlement by negotiation. This Government has not been invited to mediate,
and on the other hand has sought no intervention in that matter, further
than to evince its kindliest disposition toward such a speedy and direct
adjustment by the two sovereign States in interest as shall comport with
equity and honor. It is gratifying to learn that the apprehensions at first
displayed on the part of Japan lest the cessation of Hawaii's national life
through annexation might impair privileges to which Japan honorably laid
claim, have given place to confidence in the uprightness of this
Government, and in the sincerity of its purpose to deal with all possible
ulterior questions in the broadest spirit of friendliness.

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

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

A subject of large importance to our country, and increasing appreciation
on the part of the people, is the completion of the great highway of trade
between the Atlantic and Pacific, known as the Nicaragua Canal. Its utility
and value to American commerce is universally admitted. The Commission
appointed under date of July 24 last "to continue the surveys and
examinations authorized by the act approved March 2, 1895," in regard to
"the proper route, feasibility, and cost of construction of the Nicaragua
Canal, with a view of making complete plans for the entire work of
construction of such canal," is now employed in the undertaking. In the
future I shall take occasion to transmit to Congress the report of this
Commission, making at the same time such further suggestions as may then
seem advisable.

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

The gratifying action of our great sister Republic of France in joining
this country in the attempt to bring about an agreement among the principal
commercial nations of Europe, whereby a fixed and relative value between
gold and silver shall be secured, furnishes assurance that we are not alone
among the larger nations of the world in realizing the international
character of the problem and in the desire of reaching some wise and
practical solution of it. The British Government has published a resume of
the steps taken jointly by the French ambassador in London and the special
envoys of the United States, with whom our ambassador at London actively
co-operated in the presentation of this subject to Her Majesty's
Government. This will be laid before Congress.

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

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

In order to execute as early as possible the provisions of the third and
fourth sections of the Revenue Act, approved July 24, 1897, I appointed the
Hon. John A. Kasson of Iowa, a special commissioner plenipotentiary to
undertake the requisite negotiations with foreign countries desiring to
avail themselves of these provisions. The negotiations are now proceeding
with several Governments, both European and American. It is believed that
by a careful exercise of the powers conferred by that Act some grievances
of our own and of other countries in our mutual trade relations may be
either removed, or largely alleviated, and that the volume of our
commercial exchanges may be enlarged, with advantage to both contracting
parties.

Most desirable from every standpoint of national interest and patriotism is
the effort to extend our foreign commerce. To this end our merchant marine
should be improved and enlarged. We should do our full share of the
carrying trade of the world. We do not do it now. We should be the laggard
no longer. The inferiority of our merchant marine is justly humiliating to
the national pride. The Government by every proper constitutional means,
should aid in making our ships familiar visitors at every commercial port
of the world, thus opening up new and valuable markets to the surplus
products of the farm and the factory.

The efforts which had been made during the two previous years by my
predecessor to secure better protection to the fur seals in the North
Pacific Ocean and Bering Sea, were renewed at an early date by this
Administration, and have been pursued with earnestness. Upon my invitation,
the Governments of Japan and Russia sent delegates to Washington, and an
international conference was held during the months of October and November
last, wherein it was unanimously agreed that under the existing regulations
this species of useful animals was threatened with extinction, and that an
international agreement of all the interested powers was necessary for
their adequate protection.

The Government of Great Britain did not see proper to be represented at
this conference, but subsequently sent to Washington, as delegates, the
expert commissioners of Great Britain and Canada who had, during the past
two years, visited the Pribilof Islands, and who met in conference similar
commissioners on the part of the United States. The result of this
conference was an agreement on important facts connected with the condition
of the seal herd, heretofore in dispute, which should place beyond
controversy the duty of the Governments concerned to adopt measures without
delay for the preservation and restoration of the herd. Negotiations to
this end are now in progress, the result of which I hope to be able to
report to Congress at an early day.

International arbitration cannot be omitted from the list of subjects
claiming our consideration. Events have only served to strengthen the
general views on this question expressed in my inaugural address. The best
sentiment of the civilized world is moving toward the settlement of
differences between nations without resorting to the horrors of war.
Treaties embodying these humane principles on broad lines, without in any
way imperiling our interests or our honor, shall have my constant
encouragement.

The acceptance by this Government of the invitation of the Republic of
France to participate in the Universal Exposition of 1900, at Paris, was
immediately followed by the appointment of a special commissioner to
represent the United States in the proposed exposition, with special
reference to the securing of space for an adequate exhibit on behalf of the
United States.

The special commissioner delayed his departure for Paris long enough to
ascertain the probable demand for space by American exhibitors. His
inquiries developed an almost unprecedented interest in the proposed
exposition, and the information thus acquired enabled him to justify an
application for a much larger allotment of space for the American section
than had been reserved by the exposition authorities. The result was
particularly gratifying, in view of the fact that the United States was one
of the last countries to accept the invitation of France.

The reception accorded our special commissioner was most cordial, and he
was given every reasonable assurance that the United States would receive a
consideration commensurate with the proportions of our exhibit. The report
of the special commissioner as to the magnitude and importance of the
coming exposition, and the great demand for space by American exhibitors,
supplies new arguments for a liberal and judicious appropriation by
Congress, to the end that an exhibit fairly representative of the
industries and resources of our country may be made in an exposition which
will illustrate the world's progress during the nineteenth century. That
exposition is intended to be the most important and comprehensive of the
long series of international exhibitions, of which our own at Chicago was a
brilliant example, and it is desirable that the United States should make a
worthy exhibit of American genius and skill and their unrivaled
achievements in every branch of industry.

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

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

The great increase of the Navy which has taken place in recent years was
justified by the requirements for national defense, and has received public
approbation. The time has now arrived, however, when this increase, to
which the country is committed, should, for a time, take the form of
increased facilities commensurate with the increase of our naval vessels.
It is an unfortunate fact that there is only one dock on the Pacific Coast
capable of docking our largest ships, and only one on the Atlantic Coast,
and that the latter has for the last six or seven months been under repair
and therefore incapable of use. Immediate steps should be taken to provide
three or four docks of this capacity on the Atlantic Coast, at least one on
the Pacific Coast, and a floating dock in the Gulf. This is the
recommendation of a very competent Board, appointed to investigate the
subject. There should also be ample provision made for powder and
projectiles, and other munitions of war, and for an increased number of
officers and enlisted men. Some additions are also necessary to our
navy-yards, for the repair and care of our large number of vessels. As
there are now on the stocks five battle ships of the largest class, which
cannot be completed for a year or two, I concur with the recommendation of
the Secretary of the Navy for an appropriation authorizing the construction
of one battle ship for the Pacific Coast, where, at present, there is only
one in commission and one under construction, while on the Atlantic Coast
there are three in commission and four under construction; and also that
several torpedo boats be authorized in connection with our general system
of coast defense.

The Territory of Alaska requires the prompt and early attention of
Congress. The conditions now existing demand material changes in the laws
relating to the Territory. The great influx of population during the past
summer and fall and the prospect of a still larger immigration in the
spring will not permit us to longer neglect the extension of civil
authority within the Territory or postpone the establishment of a more
thorough government.

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

It will be seen how much remains to be done for that vast and remote and
yet promising portion of our country. Special authority was given to the
President by the Act of Congress approved July 24, 1897, to divide that
Territory into two land districts and to designate the boundaries thereof
and to appoint registers and receivers of said land offices, and the
President was also authorized to appoint a surveyor-general for the entire
district. Pursuant to this authority, a surveyor-general and receiver have
been appointed, with offices at Sitka. If in the ensuing year the
conditions justify it, the additional land district authorized by law will
be established, with an office at some point in the Yukon Valley. No
appropriation, however, was made for this purpose, and that is now
necessary to be done for the two land districts into which the Territory is
to be divided.

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

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

The startling though possibly exaggerated reports from the Yukon River
country, of the probable shortage of food for the large number of people
who are wintering there without the means of leaving the country are
confirmed in such measure as to justify bringing the matter to the
attention of Congress. Access to that country in winter can be had only by
the passes from Dyea and vicinity, which is a most difficult and perhaps an
impossible task. However, should these reports of the suffering of our
fellow-citizens be further verified, every effort at any cost should be
made to carry them relief.

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

The Secretary of the Interior reports that leading Indians have absorbed
great tracts of land to the exclusion of the common people, and government
by an Indian aristocracy has been practically established, to the detriment
of the people. It has been found impossible for the United States to keep
its citizens out of the Territory, and the executory conditions contained
in the treaties with these Nations have for the most part become impossible
of execution. Nor has it been possible for the Tribal Governments to secure
to each individual Indian his full enjoyment in common with Other Indians
of the common property of the Nations. Friends of the Indians have long
believed that the best interests of the Indians of the Five Civilized
Tribes would be found in American citizenship, with all the rights and
privileges which belong to that condition.

By section 16, of the act of March 3, 1893, the President was authorized to
appoint three commissioners to enter into negotiations with the Cherokee,
Choctaw, Chickasaw, Muscogee (or Creek), and Seminole Nations, commonly
known as the Five Civilized Tribes in the Indian Territory. Briefly, the
purposes of the negotiations were to be: The extinguishment of Tribal
titles to any lands within that Territory now held by any and all such
Nations or Tribes, either by cession of the same or some part thereof to
the United States, or by allotment and division of the same in severalty
among the Indians of such Nations or Tribes respectively as may be entitled
to the same, or by such other method as may be agreed upon between the
several Nations and Tribes aforesaid, or each of them, with the United
States, with a view to such an adjustment upon the basis of justice and
equity as may, with the consent of the said Nations of Indians so far as
may be necessary, be requisite and suitable to enable the ultimate creation
of a State or States of the Union which shall embrace the lands within said
Indian Territory.

The Commission met much opposition from the beginning. The Indians were
very slow to act, and those in control manifested a decided disinclination
to meet with favor the propositions submitted to them. A little more than
three years after this organization the Commission effected an agreement
with the Choctaw Nation alone. The Chickasaws, however, refused to agree to
its terms, and as they have a common interest with the Choctaws in the
lands of said Nations, the agreement with the latter Nation could have no
effect without the consent of the former. On April 23, 1897, the Commission
effected an agreement with both tribes--the Choctaws and Chickasaws. This
agreement, it is understood, has been ratified by the constituted
authorities of the respective Tribes or Nations parties thereto, and only
requires ratification by Congress to make it binding.

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

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

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

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

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

The recent prevalence of yellow fever in a number of cities and towns
throughout the South has resulted in much disturbance of commerce, and
demonstrated the necessity of such amendments to our quarantine laws as
will make the regulations of the national quarantine authorities paramount.
The Secretary of the Treasury, in the portion of his report relating to the
operation of the Marine Hospital Service, calls attention to the defects in
the present quarantine laws, and recommends amendments thereto which will
give the Treasury Department the requisite authority to prevent the
invasion of epidemic diseases from foreign countries, and in times of
emergency, like that of the past summer, will add to the efficiency of the
sanitary measures for the protection of the people, and at the same time
prevent unnecessary restriction of commerce. I concur in his
recommendation.

In further effort to prevent the invasion of the United States by yellow
fever, the importance of the discovery of the exact cause of the disease,
which up to the present time has been undetermined, is obvious, and to this
end a systematic bacteriological investigation should be made. I therefore
recommend that Congress authorize the appointment of a commission by the
President, to consist of four expert bacteriologists, one to be selected
from the medical officers of the Marine Hospital Service, one to be
appointed from civil life, one to be detailed from the medical officers of
the Army, and one from the medical officers of the Navy.

The Union Pacific Railway, Main Line, was sold under the decree of the
United States Court for the District of Nebraska, on the 1st and 2d of
November of this year. The amount due the Government consisted of the
principal of the subsidy bonds, $27,236,512, and the accrued interest
thereon, $31,211,711.75, making the total indebtedness, $58,448,223.75. The
bid at the sale covered the first mortgage lien and the entire mortgage
claim of the Government, principal and interest.

The sale of the subsidized portion of the Kansas Pacific Line, upon which
the Government holds a second mortgage lien, has been postponed at the
instance of the Government to December 16, 1897. The debt of this division
of the Union Pacific Railway to the Government on November 1, 1897, was the
principal of the subsidy bonds, $6,303,000, and the unpaid and accrued
interest thereon, $6,626,690.33, making a total of $12,929,690.33.

The sale of this road was originally advertised for November 4, but for the
purpose of securing the utmost public notice of the event it was postponed
until December 16, and a second advertisement of the sale was made. By the
decree of the Court, the upset price on the sale of the Kansas Pacific will
yield to the Government the sum of $2,500,000 over all prior liens, costs,
and charges. If no other or better bid is made, this sum is all that the
Government will receive on its claim of nearly $13,000,000. The Government
has no information as to whether there will be other bidders or a better
bid than the minimum amount herein stated. The question presented therefore
is: Whether the Government shall, under the authority given it by the act
of March 3, 1887, purchase or redeem the road in the event that a bid is
not made by private parties covering the entire Government claim. To
qualify the Government to bid at the sales will require a deposit of
$900,000, as follows: In the Government cause $500,000 and in each of the
first mortgage causes $200,000, and in the latter the deposit must be in
cash. Payments at the sale are as follows: Upon the acceptance of the bid a
sum which with the amount already deposited shall equal fifteen per cent of
the bid; the balance in installments of twenty-five per cent thirty, forty,
and fifty days after the confirmation of the sale. The lien on the Kansas
Pacific prior to that of the Government on the 30th July, 1897, principal
and interest, amounted to $7,281,048.11. The Government, therefore, should
it become the highest bidder, will have to pay the amount of the first
mortgage lien.

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

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

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

The important branch of our Government known as the Civil Service, the
practical improvement of which has long been a subject of earnest
discussion, has of late years received increased legislative and Executive
approval. During the past few months the service has been placed upon a
still firmer basis of business methods and personal merit. While the right
of our veteran soldiers to reinstatement in deserving cases has been
asserted, dismissals for merely political reasons have been carefully
guarded against, the examinations for admittance to the service enlarged
and at the same time rendered less technical and more practical; and a
distinct advance has been made by giving a hearing before dismissal upon
all cases where incompetency is charged or demand made for the removal of
officials in any of the Departments. This order has been made to give to
the accused his right to be heard but without in anyway impairing the power
of removal, which should always be exercised in cases of inefficiency and
incompetency, and which is one of the vital safeguards of the civil service
reform system, preventing stagnation and deadwood and keeping every
employee keenly alive to the fact that the security of his tenure depends
not on favor but on his own tested and carefully watched record of
service.

Much of course still remains to be accomplished before the system can be
made reasonably perfect for our needs. There are places now in the
classified service which ought to be exempted and others not classified may
properly be included. I shall not hesitate to exempt cases which I think
have been improperly included in the classified service or include those
which in my judgment will best promote the public service. The system has
the approval of the people and it will be my endeavor to uphold and extend
it.

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

The estimates of the expenses of the Government by the several Departments
will, I am sure, have your careful scrutiny. While the Congress may not
find it an easy task to reduce the expenses of the Government, it should
not encourage their increase. These expenses will in my judgment admit of a
decrease in many branches of the Government without injury to the public
service. It is a commanding duty to keep the appropriations within the
receipts of the Government, and thus avoid a deficit.

***

State of the Union Address
William McKinley
December 5, 1898

To the Senate and House of Representatives:

Notwithstanding the added burdens rendered necessary by the war, our people
rejoice in a very satisfactory and steadily increasing degree of
prosperity, evidenced by the largest volume of business ever recorded.
Manufacture has been productive, agricultural pursuits have yielded
abundant returns, labor in all fields of industry is better rewarded,
revenue legislation passed by the present Congress has increased the
Treasury's receipts to the amount estimated by its authors, the finances of
the Government have been successfully administered and its credit advanced
to the first rank, while its currency has been maintained at the world's
highest standard. Military service under a common flag and for a righteous
cause has strengthened the national spirit and served to cement more
closely than ever the fraternal bonds between every section of the
country.

A review of the relation of the United States to other powers, always
appropriate, is this year of primary importance in view of the momentous
issues which have arisen, demanding in one instance the ultimate
determination by arms and involving far-reaching consequences which will
require the earnest attention of the Congress.

In my last annual message very full consideration was given to the question
of the duty of the Government of the United States toward Spain and the
Cuban insurrection as being by far the most important problem with which we
were then called upon to deal. The considerations then advanced and the
exposition of the views therein expressed disclosed my sense of the extreme
gravity of the situation. Setting aside as logically unfounded or
practically inadmissible the recognition of the Cuban insurgents as
belligerents, the recognition of the independence of Cuba, neutral
intervention to end the war by imposing a rational compromise between the
contestants, intervention in favor of one or the other party, and forcible
annexation of the island, I concluded it was honestly due to our friendly
relations with Spain that she should be given a reasonable chance to
realize her expectations of reform to which she had become irrevocably
committed. Within a few weeks previously she had announced comprehensive
plans which it was confidently asserted would be efficacious to remedy the
evils so deeply affecting our own country, so injurious to the true
interests of the mother country as well as to those of Cuba, and so
repugnant to the universal sentiment of humanity.

The ensuing month brought little sign of real progress toward the
pacification of Cuba. The autonomous administrations set up in the capital
and some of the principal cities appeared not to gain the favor of the
inhabitants nor to be able to extend their influence to the large extent of
territory held by the insurgents, while the military arm, obviously unable
to cope with the still active rebellion, continued many of the most
objectionable and offensive policies of the government that had preceded
it. No tangible relief was afforded the vast numbers of unhappy
reconcentrados, despite the reiterated professions made in that regard and
the amount appropriated by Spain to that end. The proffered expedient of
zones of cultivation proved illusory. Indeed no less practical nor more
delusive promises of succor could well have been tendered to the exhausted
and destitute people, stripped of all that made life and home dear and
herded in a strange region among unsympathetic strangers hardly less
necessitous than themselves.

By the end of December the mortality among them had frightfully increased.
Conservative estimates from Spanish sources placed the deaths among these
distressed people at over 40 per cent from the time General Weyler's decree
of reconcentration was enforced. With the acquiescence of the Spanish
authorities, a scheme was adopted for relief by charitable contributions
raised in this country and distributed, under the direction of the
consul-general and the several consuls, by noble and earnest individual
effort through the organized agencies of the American Red Cross. Thousands
of lives were thus saved, but many thousands more were inaccessible to such
forms of aid.

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

At this juncture, on the 15th of February last, occurred the destruction of
the battle ship Maine while rightfully lying in the harbor of Havana on a
mission of international courtesy and good will--a catastrophe the
suspicious nature and horror of which stirred the nation's heart
profoundly. It is a striking evidence of the poise and sturdy good sense
distinguishing our national character that this shocking blow, falling upon
a generous people already deeply touched by preceding events in Cuba, did
not move them to an instant desperate resolve to tolerate no longer the
existence of a condition of danger and disorder at our doors that made
possible such a deed, by whomsoever wrought. Yet the instinct of justice
prevailed, and the nation anxiously awaited the result of the searching
investigation at once set on foot. The finding of the naval board of
inquiry established that the origin of the explosion was external, by a
submarine mine, and only halted through lack of positive testimony to fix
the responsibility of its authorship.

All these things carried conviction to the most thoughtful, even before the
finding of the naval court, that a crisis in our relations with Spain and
toward Cuba was at hand. So strong was this belief that it needed but a
brief Executive suggestion to the Congress to receive immediate answer to
the duty of making instant provision for the possible and perhaps speedily
probable emergency of war, and the remarkable, almost unique, spectacle was
presented of a unanimous vote of both Houses, on the 9th of March,
appropriating $50,000,000 "for the national defense and for each and every
purpose connected therewith, to be expended at the discretion of the
President." That this act of prevision came none too soon was disclosed
when the application of the fund was undertaken. Our coasts were
practically undefended. Our Navy needed large provision for increased
ammunition and supplies, and even numbers to cope with any sudden attack
from the navy of Spain, which comprised modern vessels of the highest type
of continental perfection. Our Army also required enlargement of men and
munitions. The details of the hurried preparation for the dreaded
contingency are told in the reports of the Secretaries of War and of the
Navy, and need not be repeated here. It is sufficient to say that the
outbreak of war when it did come found our nation not unprepared to meet
the conflict.

Nor was the apprehension of coming strife confined to our own country. It
was felt by the continental powers, which on April 6, through their
ambassadors and envoys, addressed to the Executive an expression of hope
that humanity and moderation might mark the course of this Government and
people, and that further negotiations would lead to an agreement which,
while securing the maintenance of peace, would afford all necessary
guaranties for the reestablishment of order in Cuba. In responding to that
representation I said I shared the hope the envoys had expressed that peace
might be preserved in a manner to terminate the chronic condition of
disturbance in Cuba, so injurious and menacing to our interests and
tranquillity, as well as shocking to our sentiments of humanity; and while
appreciating the humanitarian and disinterested character of the
communication they had made on behalf of the powers, I stated the
confidence of this Government, for its part, that equal appreciation would
be shown for its own earnest and unselfish endeavors to fulfill a duty to
humanity by ending a situation the indefinite prolongation of which had
become insufferable.

Still animated by the hope of a peaceful solution and obeying the dictates
of duty, no effort was relaxed to bring about a speedy ending of the Cuban
struggle. Negotiations to this object continued actively with the
Government of Spain, looking to the immediate conclusion of a six months'
armistice in Cuba, with a view to effect the recognition of her people's
right to independence. Besides this, the instant revocation of the order of
reconcentration was asked, so that the sufferers, returning to their homes
and aided by united American and Spanish effort, might be put in a way to
support themselves and, by orderly resumption of the well-nigh destroyed
productive energies of the island, contribute to the restoration of its
tranquillity and well-being. Negotiations continued for some little time at
Madrid, resulting in offers by the Spanish Government which could not but
be regarded as inadequate. It was proposed to confide the preparation of
peace to the insular parliament, yet to be convened under the autonomous
decrees of November, 1897, but without impairment in any wise of the
constitutional powers of the Madrid Government, which to that end would
grant an armistice, if solicited by the insurgents, for such time as the
general in chief might see fit to fix. How and with what scope of
discretionary powers the insular parliament was expected to set about the
"preparation" of peace did not appear. If it were to be by negotiation with
the insurgents, the issue seemed to rest on the one side with a body chosen
by a fraction of the electors in the districts under Spanish control, and
on the other with the insurgent population holding the interior country,
unrepresented in the so-called parliament and defiant at the suggestion of
suing for peace.

Grieved and disappointed at this barren outcome of my sincere endeavors to
reach a practicable solution, I felt it my duty to remit the whole question
to the Congress. In the message of April 11, 1898, I announced that with
this last overture in the direction of immediate peace in Cuba and its
disappointing reception by Spain the effort of the Executive was brought to
an end. I again reviewed the alternative courses of action which had been
proposed, concluding that the only one consonant with international policy
and compatible with our firm-set historical traditions was intervention as
a neutral to stop the war and check the hopeless sacrifice of life, even
though that resort involved "hostile constraint upon both the parties to
the contest, as well to enforce a truce as to guide the eventual
settlement." The grounds justifying that step were the interests of
humanity, the duty to protect the life and property of our citizens in
Cuba, the right to check injury to our commerce and people through the
devastation of the island, and, most important, the need of removing at
once and forever the constant menace and the burdens entailed upon our
Government by the uncertainties and perils of the situation caused by the
unendurable disturbance in Cuba. I said: The long trial has proved that the
object for which Spain has waged the war can not be attained. The fire of
insurrection may flame or may smolder with varying seasons, but it has not
been and it is plain that it can not be extinguished by present methods.
The only hope of relief and repose from a condition which can no longer be
endured is the enforced pacification of Cuba. In the name of humanity, in
the name of civilization, in behalf of endangered American interests which
give us the right and the duty to speak and to act, the war in Cuba must
stop. In view of all this the Congress was asked to authorize and empower
the President to take measures to secure a full and final termination of
hostilities between Spain and the people of Cuba and to secure in the
island the establishment of a stable government, capable of maintaining
order and observing its international obligations, insuring peace and
tranquillity and the security of its citizens as well as our own, and for
the accomplishment of those ends to use the military and naval forces of
the United States as might be necessary, with added authority to continue
generous relief to the starving people of Cuba.

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

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

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

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

Fourth. That the United States hereby disclaims any disposition or
intention to exercise sovereignty, jurisdiction, or control over said
island except for the pacification thereof, and asserts its determination
when that is accomplished to leave the government and control of the island
to its people. This resolution was approved by the Executive on the next
day, April 20. A copy was at once communicated to the Spanish minister at
this capital, who forthwith announced that his continuance in Washington
had thereby become impossible, and asked for his passports, which were
given him. He thereupon withdrew from Washington, leaving the protection of
Spanish interests in the United States to the French ambassador and the
Austro-Hungarian minister. Simultaneously with its communication to the
Spanish minister here, General Woodford, the American minister at Madrid,
was telegraphed confirmation of the text of the joint resolution and
directed to communicate it to the Government of Spain with the formal
demand that it at once relinquish its authority and government in the
island of Cuba and withdraw its forces therefrom, coupling this demand with
announcement of the intentions of this Government as to the future of the
island, in conformity with the fourth clause of the resolution, and giving
Spain until noon of April 23 to reply.

That demand, although, as above shown, officially made known to the Spanish
envoy here, was not delivered at Madrid. After the instruction reached
General Woodford on the morning of April 21, but before he could present
it, the Spanish minister of state notified him that upon the President's
approval of the joint resolution the Madrid Government, regarding the act
as "equivalent to an evident declaration of war," had ordered its minister
in Washington to withdraw, thereby breaking off diplomatic relations
between the two countries and ceasing all official communication between
their respective representatives. General Woodford thereupon demanded his
passports and quitted Madrid the same day.

Spain having thus denied the demand of the United States and initiated that
complete form of rupture of relations which attends a state of war, the
executive powers authorized by the resolution were at once used by me to
meet the enlarged contingency of actual war between sovereign states. On
April 22 I proclaimed a blockade of the north coast of Cuba, including
ports on said coast between Cardenas and Bahia Honda, and the port of
Cienfuegos, on the south coast of Cuba, and on the 23d I called for
volunteers to execute the purpose of the resolution. By my message of April
25 the Congress was informed of the situation, and I recommended formal
declaration of the existence of a state of war between the United States
and Spain. The Congress accordingly voted on the same day the act approved
April 25, 1898, declaring the existence of such war from and including the
21st day of April, and reenacted the provision of the resolution of April
20 directing the President to use all the armed forces of the nation to
carry that act into effect. Due notification of the existence of war as
aforesaid was given April 25 by telegraph to all the governments with which
the United States maintain relations, in order that their neutrality might
be assured during the war. The various governments responded with
proclamations of neutrality, each after its own methods. It is not among
the least gratifying incidents of the struggle that the obligations of
neutrality were impartially discharged by all, often under delicate and
difficult circumstances.

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

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

The enlisted force of the Navy on the 15th day of August, when it reached
its maximum, numbered 24,123 men and apprentices. One hundred and three
vessels were added to the Navy by purchase, 1 was presented to the
Government, 1 leased, and the 4 vessels of the International Navigation
Company--the St. Paul, St. Louis, New York, and Paris--were chartered. In
addition to these the revenue cutters and lighthouse tenders were turned
over to the Navy Department and became temporarily a part of the auxiliary
Navy.

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

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

Much alarm was felt along our entire Atlantic seaboard lest some attack
might be made by the enemy. Every precaution was taken to prevent possible
injury to our great cities lying along the coast. Temporary garrisons were
provided, drawn from the State militia; infantry and light batteries were
drawn from the volunteer force. About 12,000 troops were thus employed. The
coast signal service was established for observing the approach of an
enemy's ships to the coast of the United States, and the Life-Saving and
Light-House services cooperated, which enabled the Navy Department to have
all portions of the Atlantic coast, from Maine to Texas, under
observation.

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

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

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

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

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

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

This fund being inadequate to the requirements of equipment and for the
conduct of the war, the patriotism of the Congress provided the means in
the war-revenue act of June 13 by authorizing a 3 per cent popular loan not
to exceed $400,000,000 and by levying additional imposts and taxes. Of the
authorized loan $200,000,000 were offered and promptly taken the
subscriptions so far exceeding the call as to cover it many times over,
while, preference being given to the smaller bids, no single allotment
exceeded $5,000. This was a most encouraging and significant result,
showing the vast resources of the nation and the determination of the
people to uphold their country's honor.

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

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

The next engagement was destined to mark a memorable epoch in maritime
warfare. The Pacific fleet, under Commodore George Dewey, had lain for some
weeks at Hongkong. Upon the colonial proclamation of neutrality being
issued and the customary twenty-four hours' notice being given, it repaired
to Mirs Bay, near Hongkong, whence it proceeded to the Philippine Islands
under telegraphed orders to capture or destroy the formidable Spanish fleet
then assembled at Manila. At daybreak on the 1st of May the American force
entered Manila Bay, and after a few hours' engagement effected the total
destruction of the Spanish fleet, consisting of ten war ships and a
transport, besides capturing the naval station and forts at Cavite, thus
annihilating the Spanish naval power in the Pacific Ocean and completely
controlling the bay of Manila, with the ability to take the city at will.
Not a life was lost on our ships, the wounded only numbering seven, while
not a vessel was materially injured. For this gallant achievement the
Congress, upon my recommendation, fitly bestowed upon the actors preferment
and substantial reward.

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

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

Only reluctance to cause needless loss of life and property prevented the
early storming and capture of the city, and therewith the absolute military
occupancy of the whole group. The insurgents meanwhile had resumed the
active hostilities suspended by the uncompleted truce of December, 1897.
Their forces invested Manila from the northern and eastern sides, but were
constrained by Admiral Dewey and General Merrill from attempting an
assault. It was fitting that whatever was to be done in the way of decisive
operations in that quarter should be accomplished by the strong arm of the
United States alone. Obeying the stern precept of war which enjoins the
overcoming of the adversary and the extinction of his power wherever
assailable as the speedy and sure means to win a peace, divided victory was
not permissible, for no partition of the rights and responsibilities
attending the enforcement of a just and advantageous peace could be thought
of.

Following the comprehensive scheme of general attack, powerful forces were
assembled at various points on our coast to invade Cuba and Puerto Rico.
Meanwhile naval demonstrations were made at several exposed points. On May
11 the cruiser Wilmington and torpedo boat Winslow were unsuccessful in an
attempt to silence the batteries at Cardenas, a gallant ensign, Worth
Bagley, and four seamen falling. These grievous fatalities were, strangely
enough, among the very few which occurred during our naval operations in
this extraordinary conflict.

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

Several demonstrations occurred on the coasts of Cuba and Puerto Rico in
preparation for the larger event. On May 13 the North Atlantic Squadron
shelled San Juan de Puerto Rico. On May 30 Commodore Schley's squadron
bombarded the forts guarding the mouth of Santiago Harbor. Neither attack
had any material result. It was evident that well-ordered land operations
were indispensable to achieve a decisive advantage.

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

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

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

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

On the day following this brilliant achievement of our land forces, the 3d
of July, occurred the decisive naval combat of the war. The Spanish fleet,
attempting to leave the harbor, was met by the American squadron under
command of Commodore Sampson. In less than three hours all the Spanish
ships were destroyed, the two torpedo boats being sunk and the Maria
Teresa, Almirante Oquendo, Vizcaya, and Cristobal Colon driven ashore. The
Spanish admiral and over 1,300 men were taken prisoners. While the enemy's
loss of life was deplorably large, some 600 perishing, on our side but one
man was killed, on the Brooklyn, and one man seriously wounded. Although
our ships were repeatedly struck, not one was seriously injured. Where all
so conspicuously distinguished themselves, from the commanders to the
gunners and the unnamed heroes in the boiler rooms, each and all
contributing toward the achievement of this astounding victory, for which
neither ancient nor modern history affords a parallel in the completeness
of the event and the marvelous disproportion of casualties, it would be
invidious to single out any for especial honor. Deserved promotion has
rewarded the more conspicuous actors. The nation's profoundest gratitude is
due to all of these brave men who by their skill and devotion in a few
short hours crushed the sea power of Spain and wrought a triumph whose
decisiveness and far-reaching consequences can scarcely be measured. Nor
can we be unmindful of the achievements of our builders, mechanics, and
artisans for their skill in the construction of our war ships.

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

The capitulation of Santiago followed. The city was closely besieged by
land, while the entrance of our ships into the harbor cut off all relief on
that side. After a truce to allow of the removal of noncombatants
protracted negotiations continued from July 3 until July 15, when, under
menace of immediate assault, the preliminaries of surrender were agreed
upon. On the 17th General Shafter occupied the city. The capitulation
embraced the entire eastern end of Cuba. The number of Spanish soldiers
surrendering was 22,000, all of whom were subsequently conveyed to Spain at
the charge of the United States. The story of this successful campaign is
told in the report of the Secretary of War, which will be laid before you.
The individual valor of officers and soldiers was never more strikingly
shown than in the several engagements leading to the surrender of Santiago,
while the prompt movements and successive victories won instant and
universal applause. To those who gained this complete triumph, which
established the ascendency of the United States upon land as the fight off
Santiago had fixed our supremacy on the seas, the earnest and lasting
gratitude of the nation is unsparingly due. Nor should we alone remember
the gallantry of the living; the dead claim our tears, and our losses by
battle and disease must cloud any exultation at the result and teach us to
weigh the awful cost of war, however rightful the cause or signal the
victory.

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

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

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

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

The last scene of the war was enacted at Manila, its starting place. On
August 15, after a brief assault upon the works by the land forces, in
which the squadron assisted, the capital surrendered unconditionally. The
casualties were comparatively few. By this the conquest of the Philippine
Islands, virtually accomplished when the Spanish capacity for resistance
was destroyed by Admiral Dewey's victory of the 1st of May, was formally
sealed. To General Merrill, his officers and men, for their uncomplaining
and devoted service and for their gallantry in action, the nation is
sincerely grateful. Their long voyage was made with singular success, and
the soldierly conduct of the men, most of whom were without previous
experience in the military service, deserves unmeasured praise.

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

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

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

It is fitting that I should bear testimony to the patriotism and devotion
of that large portion of our Army which, although eager to be ordered to
the post of greatest exposure, fortunately was not required outside of the
United States. They did their whole duty, and, like their comrades at the
front, have earned the gratitude of the nation. In like manner, the
officers and men of the Army and of the Navy who remained in their
departments and stations faithfully performing most important duties
connected with the war, and whose requests for assignment in the field and
at sea I was compelled to refuse because their services were indispensable
here, are entitled to the highest commendation. It is my regret that there
seems to be no provision for their suitable recognition.

In this connection it is a pleasure for me to mention in terms of cordial
appreciation the timely and useful work of the American National Red Cross,
both in relief measures preparatory to the campaigns, in sanitary
assistance at several of the camps of assemblage, and later, under the able
and experienced leadership of the president of the society, Miss Clara
Barton, on the fields of battle and in the hospitals at the front in Cuba.
Working in conjunction with the governmental authorities and under their
sanction and approval, and with the enthusiastic cooperation of many
patriotic women and societies in the various States, the Red Cross has
fully maintained its already high reputation for intense earnestness and
ability to exercise the noble purposes of its international organization,
thus justifying the confidence and support which it has received at the
hands of the American people. To the members and officers of this society
and all who aided them in their philanthropic work the sincere and lasting
gratitude of the soldiers and the public is due and is freely accorded.

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

The annihilation of Admiral Cervera's fleet, followed by the capitulation
of Santiago, having brought to the Spanish Government a realizing sense of
the hopelessness of continuing a struggle now become wholly unequal, it
made overtures of peace through the French ambassador, who, with the assent
of his Government, had acted as the friendly representative of Spanish
interests during the war. On the 26th of July M. Cambon presented a
communication signed by the Duke of Almodovar, the Spanish minister of
state, inviting the United States to state the terms upon which it would be
willing to make peace. On the 30th of July, by a communication addressed to
the Duke of Almodovar and handed to M. Cambon, the terms of this Government
were announced substantially as in the protocol afterwards signed. On the
10th of August the Spanish reply, dated August 7, was handed by M. Cambon
to the Secretary of State. It accepted unconditionally the terms imposed as
to Cuba, Puerto Rico, and an island of the Ladrones group, but appeared to
seek to introduce inadmissible reservations in regard to our demand as to
the Philippine Islands. Conceiving that discussion on this point could
neither be practical nor profitable, I directed that in order to avoid
misunderstanding the matter should be forthwith closed by proposing the
embodiment in a formal protocol of the terms upon which the negotiations
for peace were to be undertaken. The vague and inexplicit suggestions of
the Spanish note could not be accepted, the only reply being to present as
a virtual ultimatum a draft of protocol embodying the precise terms
tendered to Spain in our note of July 30, with added stipulations of detail
as to the appointment of commissioners to arrange for the evacuation of the
Spanish Antilles. On August 12 M. Cambon announced his receipt of full
powers to sign the protocol so submitted. Accordingly, on the afternoon of
August 12, M. Cambon, as the plenipotentiary of Spain, and the Secretary of
State, as the plenipotentiary of the United States, signed a protocol
providing--

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

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

ART. III. The United States will occupy and hold the city, bay, and harbor
of Manila pending the conclusion of a treaty of peace which shall determine
the control, disposition, and government of the Philippines. The fourth
article provided for the appointment of joint commissions on the part of
the United States and Spain, to meet in Havana and San Juan, respectively,
for the purpose of arranging and carrying out the details of the stipulated
evacuation of Cuba, Puerto Rico, and other Spanish islands in the West
Indies.

The fifth article provided for the appointment of not more than five
commissioners on each side, to meet at Paris not later than October 1 and
to proceed to the negotiation and conclusion of a treaty of peace, subject
to ratification according to the respective constitutional forms of the two
countries.

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

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

On the 1st of December 101,165 officers and men had been mustered out and
discharged from the service, and 9,002 more will be mustered out by the
10th of this month; also a corresponding number of general and general
staff officers have been honorably discharged the service.

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

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

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

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

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

With the one exception of the rupture with Spain, the intercourse of the
United States with the great family of nations has been marked with
cordiality, and the close of the eventful year finds most of the issues
that necessarily arise in the complex relations of sovereign states
adjusted or presenting no serious obstacle to a just and honorable solution
by amicable agreement.

A long unsettled dispute as to the extended boundary between the Argentine
Republic and Chile, stretching along the Andean crests from the southern
border of the Atacama Desert to Magellan Straits, nearly a third of the
length of the South American continent, assumed an acute stage in the early
part of the year, and afforded to this Government occasion to express the
hope that the resort to arbitration, already contemplated by existing
conventions between the parties, might prevail despite the grave
difficulties arising in its application. I am happy to say that
arrangements to this end have been perfected, the questions of fact upon
which the respective commissioners were unable to agree being in course of
reference to Her Britannic Majesty for determination. A residual difference
touching the northern boundary line across the Atacama Desert, for which
existing treaties provided no adequate adjustment, bids fair to be settled
in like manner by a joint commission, upon which the United States minister
at Buenos Ayres has been invited to serve as umpire in the last resort.

I have found occasion to approach the Argentine Government with a view to
removing differences of rate charges imposed upon the cables of an American
corporation in the transmission between Buenos Ayres and the cities of
Uruguay and Brazil of through messages passing from and to the United
States. Although the matter is complicated by exclusive concessions by
Uruguay and Brazil to foreign companies, there is strong hope that a good
understanding will be reached and that the important channels of commercial
communication between the United States and the Atlantic cities of South
America may be freed from an almost prohibitory discrimination.

In this relation I may be permitted to express my sense of the fitness of
an international agreement whereby the interchange of messages over
connecting cables may be regulated on a fair basis of uniformity. The world
has seen the postal system developed from a congeries of independent and
exclusive services into a well-ordered union, of which all countries enjoy
the manifold benefits. It would be strange were the nations not in time
brought to realize that modern civilization, which owes so much of its
progress to the annihilation of space by the electric force, demands that
this all-important means of communication be a heritage of all peoples, to
be administered and regulated in their common behoof. A step in this
direction was taken when the international convention of 1884 for the
protection of submarine cables was signed, and the day is, I trust, not far
distant when this medium for the transmission of thought from land to land
may be brought within the domain of international concert as completely as
is the material carriage of commerce and correspondence upon the face of
the waters that divide them.

The claim of Thomas Jefferson Page against Argentina, which has been
pending many years, has been adjusted. The sum awarded by the Congress of
Argentina was $4,242.35.

The sympathy of the American people has justly been offered to the ruler
and the people of Austria-Hungary by reason of the affliction that has
lately befallen them in the assassination of the Empress-Queen of that
historic realm.

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

Despite the brief time allotted for preparation, the exhibits of this
country at the Universal Exposition at Brussels in 1897 enjoyed the
singular distinction of a larger proportion of awards, having regard to the
number and classes of articles entered than those of other countries. The
worth of such a result in making known our national capacity to supply the
world's markets is obvious.

Exhibitions of this international character are becoming more frequent as
the exchanges of commercial countries grow more intimate and varied. Hardly
a year passes that this Government is not invited to national participation
at some important foreign center, but often on too short notice to permit
of recourse to Congress for the power and means to do so. My predecessors
have suggested the advisability of providing by a general enactment and a
standing appropriation for accepting such invitations and for
representation of this country by a commission. This plan has my cordial
approval.

I trust that the Belgian restrictions on the importation of cattle from the
United States, originally adopted as a sanitary precaution, will at an
early day be relaxed as to their present features of hardship and
discrimination, so as to admit live cattle under due regulation of their
slaughter after landing. I am hopeful, too, of favorable change in the
Belgian treatment of our preserved and salted meats. The growth of direct
trade between the two countries, not alone for Belgian consumption and
Belgian products, but by way of transit from and to other continental
states, has been both encouraging and beneficial. No effort will be spared
to enlarge its advantages by seeking the removal of needless impediments
and by arrangements for increased commercial exchanges.

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

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

In my last annual message the situation was presented with respect to the
diplomatic representation of this Government in Central America created by
the association of Nicaragua, Honduras, and Salvador under the title of the
Greater Republic of Central America, and the delegation of their
international functions to the Diet thereof. While the representative
character of the Diet was recognized by my predecessor and has been
confirmed during my Administration by receiving its accredited envoy and
granting exequaturs to consuls commissioned under its authority, that
recognition was qualified by the distinct understanding that the
responsibility of each of the component sovereign Republics toward the
United States remained wholly unaffected.

This proviso was needful inasmuch as the compact of the three Republics was
at the outset an association whereby certain representative functions were
delegated to a tripartite commission rather than a federation possessing
centralized powers of government and administration. In this view of their
relation and of the relation of the United States to the several Republics,
a change in the representation of this country in Central America was
neither recommended by the Executive nor initiated by Congress, thus
leaving one of our envoys accredited, as heretofore, separately to two
States of the Greater Republic, Nicaragua and Salvador, and to a third
State, Costa Rica, which was not a party to the compact, while our other
envoy was similarly accredited to a union State, Honduras, and a nonunion
State, Guatemala. The result has been that the one has presented
credentials only to the President of Costa Rica, the other having been
received only by the Government of Guatemala.

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

The Nicaragua Canal Commission, under the chairmanship of Rear-Admiral John
G. Walker, appointed July 24, 1897, under the authority of a provision in
the sundry civil act of June 4 of that year, has nearly completed its
labors, and the results of its exhaustive inquiry into the proper route,
the feasibility, and the cost of construction of an interoceanic canal by a
Nicaraguan route will be laid before you. In the performance of its task
the commission received all possible courtesy and assistance from the
Governments of Nicaragua and Costa Rica, which thus testified their
appreciation of the importance of giving a speedy and practical outcome to
the great project that has for so many years engrossed the attention of the
respective countries.

As the scope of the recent inquiry embraced the whole subject, with the aim
of making plans and surveys for a canal by the most convenient route, it
necessarily included a review of the results of previous surveys and plans,
and in particular those adopted by the Maritime Canal Company under its
existing concessions from Nicaragua and Costa Rica, so that to this extent
those grants necessarily hold as essential a part in the deliberations and
conclusions of the Canal Commission as they have held and must needs hold
in the discussion of the matter by the Congress. Under these circumstances
and in view of overtures made to the Governments of Nicaragua and Costa
Rica by other parties for a new canal concession predicated on the assumed
approaching lapse of the contracts of the Maritime Canal Company with those
States, I have not hesitated to express my conviction that considerations
of expediency and international policy as between the several governments
interested in the construction and control of an interoceanic canal by this
route require the maintenance of the status quo until the Canal Commission
shall have reported and the United States Congress shall have had the
opportunity to pass finally upon the whole matter during the present
session, without prejudice by reason of any change in the existing
conditions.

Nevertheless, it appears that the Government of Nicaragua, as one of its
last sovereign acts before merging its powers in those of the newly formed
United States of Central America, has granted an optional concession to
another association, to become effective on the expiration of the present
grant. It does not appear what surveys have been made or what route is
proposed under this contingent grant, so that an examination of the
feasibility of its plans is necessarily not embraced in the report of the
Canal Commission. All these circumstances suggest the urgency of some
definite action by the Congress at this session if the labors of the past
are to be utilized and the linking of the Atlantic and Pacific oceans by a
practical waterway is to be realized. That the construction of such a
maritime highway is now more than ever indispensable to that intimate and
ready intercommunication between our eastern and western seaboards demanded
by the annexation of the Hawaiian Islands and the prospective expansion of
our influence and commerce in the Pacific, and that our national policy now
more imperatively than ever calls for its control by this Government, are
propositions which I doubt not the Congress will duly appreciate and wisely
act upon.

A convention providing for the revival of the late United States and
Chilean Claims Commission and the consideration of claims which were duly
presented to the late commission, but not considered because of the
expiration of the time limited for the duration of the commission, was
signed May 24, 1897, and has remained unacted upon by the Senate. The term
therein fixed for effecting the exchange of ratifications having elapsed,
the convention falls unless the time be extended by amendment, which I am
endeavoring to bring about, with the friendly concurrence of the Chilean
Government.

The United States has not been an indifferent spectator of the
extraordinary events transpiring in the Chinese Empire, whereby portions of
its maritime provinces are passing under the control of various European
powers; but the prospect that the vast commerce which the energy of our
citizens and the necessity of our staple productions for Chinese uses has
built up in those regions may not be prejudiced through any exclusive
treatment by the new occupants has obviated the need of our country
becoming an actor in the scene. Our position among nations, having a large
Pacific coast and a constantly expanding direct trade with the farther
Orient, gives us the equitable claim to consideration and friendly
treatment in this regard, and it will be my aim to subserve our large
interests in that quarter by all means appropriate to the constant policy
of our Government. The territories of Kiao-chow, of Wei-hai-wei, and of
Port Arthur and Talienwan, leased to Germany, Great Britain, and Russia,
respectively, for terms of years, will, it is announced, be open to
international commerce during such alien occupation; and if no
discriminating treatment of American citizens and their trade be found to
exist or be hereafter developed, the desire of this Government would appear
to be realized.

In this relation, as showing the volume and value of our exchanges with
China and the peculiarly favorable conditions which exist for their
expansion in the normal course of trade, I refer to the communication
addressed to the Speaker of the House of Representatives by the Secretary
of the Treasury on the 14th of last June, with its accompanying letter of
the Secretary of State, recommending an appropriation for a commission to
study the commercial and industrial conditions in the Chinese Empire and
report as to the opportunities for and obstacles to the enlargement of
markets in China for the raw products and manufactures of the United
States. Action was not taken thereon during the late session. I cordially
urge that the recommendation receive at your hands the consideration which
its importance and timeliness merit.

Meanwhile there may be just ground for disquietude in view of the unrest
and revival of the old sentiment of opposition and prejudice to alien
people which pervades certain of the Chinese provinces. As in the case of
the attacks upon our citizens in Szechuen and at Kutien in 1895, the United
States minister has been instructed to secure the fullest measure of
protection, both local and imperial, for any menaced American interests,
and to demand, in case of lawless injury to person or property, instant
reparation appropriate to the case. War ships have been stationed at
Tientsin for more ready observation of the disorders which have invaded
even the Chinese capital, so as to be in a position to act should need
arise, while a guard of marines has been sent to Peking to afford the
minister the same measure of authoritative protection as the
representatives of other nations have been constrained to employ.

Following close upon the rendition of the award of my predecessor as
arbitrator of the claim of the Italian subject Cerruti against the Republic
of Colombia, differences arose between the parties to the arbitration in
regard to the scope and extension of the award, of which certain articles
were contested by Colombia, while Italy claimed their literal fulfillment.
The award having been made by the President of the United States, as an act
of friendly consideration and with the sole view to an impartial
composition of the matter in dispute, I could not but feel deep concern at
such a miscarriage, and while unable to accept the Colombian theory that I,
in my official capacity, possessed continuing functions as arbitrator, with
power to interpret or revise the terms of the award, my best efforts were
lent to bring the parties to a harmonious agreement as to the execution of
its provisions.

A naval demonstration by Italy resulted in an engagement to pay the
liabilities claimed upon their ascertainment; but this apparent disposition
of the controversy was followed by a rupture of diplomatic intercourse
between Colombia and Italy, which still continues, although, fortunately,
without acute symptoms having supervened. Notwithstanding this, efforts are
reported to be continuing for the ascertainment of Colombia's contingent
liability on account of Cerruti's debts under the fifth article of the
award.

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

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

The preliminary report of Mr. Moses P. Handy, who, under the act approved
July 19, 1897, was appointed special commissioner with a view to securing
all attainable information necessary to a full and complete understanding
by Congress in regard to the participation of this Government in the Paris
Exposition, was laid before you by my message of December 6, 1897, and
showed the large opportunities opened to make known our national progress
in arts, science, and manufactures, as well as the urgent need of immediate
and adequate provision to enable due advantage thereof to be taken. Mr.
Handy's death soon afterwards rendered it necessary for another to take up
and complete his unfinished work, and on January 11 last Mr. Thomas W.
Cridler, Third Assistant Secretary of State, was designated to fulfill that
task. His report was laid before you by my message of June 14, 1898, with
the gratifying result of awakening renewed interest in the projected
display. By a provision in the sundry civil appropriation act of July 1,
1898, a sum not to exceed $650,000 was allotted for the organization of a
commission to care for the proper preparation and installation of American
exhibits and for the display of suitable exhibits by the several Executive
Departments, particularly by the Department of Agriculture, the Fish
Commission, and the Smithsonian Institution, in representation of the
Government of the United States.

Pursuant to that enactment I appointed Mr. Ferdinand W. Peck, of Chicago,
commissioner-general, with an assistant commissioner-general and a
secretary. Mr. Peck at once proceeded to Paris, where his success in
enlarging the scope and variety of the United States exhibit has been most
gratifying. Notwithstanding the comparatively limited area of the
exposition site--less than one-half that of the World's Fair at
Chicago--the space assigned to the United States has been increased from
the absolute allotment of 157,403 square feet reported by Mr. Handy to some
202,000 square feet, with corresponding augmentation of the field for a
truly characteristic representation of the various important branches of
our country's development. Mr. Peck's report will be laid before you. In my
judgment its recommendations will call for your early consideration,
especially as regards an increase of the appropriation to at least one
million dollars in all, so that not only may the assigned space be fully
taken up by the best possible exhibits in every class, but the preparation
and installation be on so perfect a scale as to rank among the first in
that unparalleled competition of artistic and inventive production, and
thus counterbalance the disadvantage with which we start as compared with
other countries whose appropriations are on a more generous scale and whose
preparations are in a state of much greater forwardness than our own.

Where our artisans have the admitted capacity to excel, where our inventive
genius has initiated many of the grandest discoveries of these later days
of the century, and where the native resources of our land are as limitless
as they are valuable to supply the world's needs, it is our province, as it
should be our earnest care, to lead in the march of human progress, and not
rest content with any secondary place. Moreover, if this be due to
ourselves, it is no less due to the great French nation whose guests we
become, and which has in so many ways testified its wish and hope that our
participation shall befit the place the two peoples have won in the field
of universal development.

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

Negotiations to the same end with Germany have been set on foot. Meanwhile
no effort has been relaxed to convince the Imperial Government of the
thoroughness of our inspection of pork products for exportation, and it is
trusted that the efficient administration of this measure by the Department
of Agriculture will be recognized as a guaranty of the healthfulness of the
food staples we send abroad to countries where their use is large and
necessary.

I transmitted to the Senate on the 10th of February last information
touching the prohibition against the importation of fresh fruits from this
country, which had then recently been decreed by Germany on the ground of
danger of disseminating the San Jose scale insect. This precautionary
measure was justified by Germany on the score of the drastic steps taken in
several States of the Union against the spread of the pest, the elaborate
reports of the Department of Agriculture being put in evidence to show the
danger to German fruit-growing interests should the scale obtain a lodgment
in that country. Temporary relief was afforded in the case of large
consignments of fruit then on the way by inspection and admission when
found noninfected. Later the prohibition was extended to dried fruits of
every kind, but was relaxed so as to apply only to unpeeled fruit and fruit
waste. As was to be expected, the alarm reached to other countries, and
Switzerland has adopted a similar inhibition. Efforts are in progress to
induce the German and Swiss Governments to relax the prohibition in favor
of dried fruits shown to have been cured under circumstances rendering the
existence of animal life impossible.

Our relations with Great Britain have continued on the most friendly
footing. Assenting to our request, the protection of Americans and their
interests in Spanish jurisdiction was assumed by the diplomatic and
consular representatives of Great Britain, who fulfilled their delicate and
arduous trust with tact and zeal, eliciting high commendation. I may be
allowed to make fitting allusion to the instance of Mr. Ramsden, Her
Majesty's consul at Santiago de Cuba, whose untimely death after
distinguished service and untiring effort during the siege of that city was
sincerely lamented.

In the early part of April last, pursuant to a request made at the instance
of the Secretary of State by the British ambassador at this capital, the
Canadian government granted facilities for the passage of four United
States revenue cutters from the Great Lakes to the Atlantic coast by way of
the Canadian canals and the St. Lawrence River. The vessels had reached
Lake Ontario and were there awaiting the opening of navigation when war was
declared between the United States and Spain. Her Majesty's Government
thereupon, by a communication of the latter part of April, stated that the
permission granted before the outbreak of hostilities would not be
withdrawn provided the United States Government gave assurance that the
vessels in question would proceed direct to a United States port without
engaging in any hostile operation. This Government promptly agreed to the
stipulated condition, it being understood that the vessels would not be
prohibited from resisting any hostile attack.

It will give me especial satisfaction if I shall be authorized to
communicate to you a favorable conclusion of the pending negotiations with
Great Britain in respect to the Dominion of Canada. It is the earnest wish
of this Government to remove all sources of discord and irritation in our
relations with the neighboring Dominion. The trade between the two
countries is constantly increasing, and it is important to both countries
that all reasonable facilities should be granted for its development.

The Government of Greece strongly urges the onerousness of the duty here
imposed upon the currants of that country, amounting to 100 per cent or
more of their market value. This fruit is stated to be exclusively a Greek
product, not coming into competition with any domestic product. The
question of reciprocal commercial relations with Greece, including the
restoration of currants to the free list, is under consideration.

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

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

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

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

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

Under the provisions of the joint resolution, the existing customs
relations of the Hawaiian Islands with the United States and with other
countries remain unchanged until legislation shall otherwise provide. The
consuls of Hawaii here and in foreign countries continue to fulfill their
commercial agencies, while the United States consulate at Honolulu is
maintained for all appropriate services pertaining to trade and the
revenue. It would be desirable that all foreign consuls in the Hawaiian
Islands should receive new exequaturs from this Government.

The attention of Congress is called to the fact that, our consular offices
having ceased to exist in Hawaii and being about to cease in other
countries coming under the sovereignty of the United States, the provisions
for the relief and transportation of destitute American seamen in these
countries under our consular regulations will in consequence terminate. It
is proper, therefore, that new legislation should be enacted upon this
subject in order to meet the changed conditions.

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

In this relation I may refer to the necessity of some amendment of our
existing extradition statute. It is a common stipulation of such treaties
that neither party shall be bound to give up its own citizens, with the
added proviso in one of our treaties, that with Japan, that it may
surrender if it see fit. It is held in this country by an almost uniform
course of decisions that where a treaty negatives the obligation to
surrender the President is not invested with legal authority to act. The
conferment of such authority would be in the line of that sound morality
which shrinks from affording secure asylum to the author of a heinous
crime. Again, statutory provision might well be made for what is styled
extradition by way of transit, whereby a fugitive surrendered by one
foreign government to another may be conveyed across the territory of the
United States to the jurisdiction of the demanding state. A recommendation
in this behalf made in the President's message of 1886 was not acted upon.
The matter is presented for your consideration.

The problem of the Mexican free zone has been often discussed with regard
to its inconvenience as a provocative of smuggling into the United States
along an extensive and thinly guarded land border. The effort made by the
joint resolution of March 1, 1895, to remedy the abuse charged by
suspending the privilege of free transportation in bond across the
territory of the United States to Mexico failed of good result, as is
stated in Report No. 702 of the House of Representatives, submitted in the
last session, March 11, 1898. As the question is one to be conveniently met
by wise concurrent legislation of the two countries looking to the
protection of the revenues by harmonious measures operating equally on
either side of the boundary, rather than by conventional arrangements, I
suggest that Congress consider the advisability of authorizing and inviting
a conference of representatives of the Treasury Departments of the United
States and Mexico to consider the subject in all its complex bearings, and
make report with pertinent recommendations to the respective Governments
for the information and consideration of their Congresses.

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

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

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

The Government of Peru has given the prescribed notification of its
intention to abrogate the treaty of friendship, commerce, and navigation
concluded with this country August 31, 1887. As that treaty contains many
important provisions necessary to the maintenance of commerce and good
relations, which could with difficulty be replaced by the negotiation of
renewed provisions within the brief twelve months intervening before the
treaty terminates, I have invited suggestions by Peru as to the particular
provisions it is desired to annul, in the hope of reaching an arrangement
whereby the remaining articles may be provisionally saved.

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

The proposal of the Czar for a general reduction of the vast military
establishments that weigh so heavily upon many peoples in time of peace was
communicated to this Government with an earnest invitation to be
represented in the conference which it is contemplated to assemble with a
view to discussing the means of accomplishing so desirable a result. His
Majesty was at once informed of the cordial sympathy of this Government
with the principle involved in his exalted proposal and of the readiness of
the United States to take part in the conference. The active military force
of the United States, as measured by our population, territorial area, and
taxable wealth, is, and under any conceivable prospective conditions must
continue to be, in time of peace so conspicuously less than that of the
armed powers to whom the Czar's appeal is especially addressed that the
question can have for us no practical importance save as marking an
auspicious step toward the betterment of the condition of the modern
peoples and the cultivation of peace and good will among them; but in this
view it behooves us as a nation to lend countenance and aid to the
beneficent project.

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

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

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

Arrangements having been agreed upon between the signatories of the general
act for the return of Mataafa and the other exiled Samoan chiefs, they were
brought from Jaluit by a German war vessel and landed at Apia on September
18 last.

Whether the death of Malietoa and the return of his old-time rival Mataafa
will add to the undesirable complications which the execution of the
tripartite general act has heretofore developed remains to be seen. The
efforts of this Government will, as heretofore, be addressed toward a
harmonious and exact fulfillment of the terms of the international
engagement to which the United States became a party in 1889.

The Cheek claim against Siam, after some five years of controversy, has
been adjusted by arbitration under an agreement signed July 6, 1897, an
award of 706,721 ticals (about $187,987.78 ), with release of the Cheek
estate from mortgage claims, having been rendered March 21, 1898, in favor
of the claimant by the arbitrator, Sir Nicholas John Hannen, British chief
justice for China and Japan.

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

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

This Government feels a keen satisfaction in having thus been enabled to
testify its adherence to the broadest principles of humanity even amidst
the clash of war, and it is to be hoped that the extension of the Red Cross
compact to hostilities by sea as well as on land may soon become an
accomplished fact through the general promulgation of the additional naval
Red Cross articles by the maritime powers now parties to the convention of
1864.

The important question of the claim of Switzerland to the perpetual
cantonal allegiance of American citizens of Swiss origin has not made
hopeful progress toward a solution, and controversies in this regard still
continue.

The newly accredited envoy of the United States to the Ottoman Porte
carries instructions looking to the disposal of matters in controversy with
Turkey for a number of years. He is especially charged to press for a just
settlement of our claims for indemnity by reason of the destruction of the
property of American missionaries resident in that country during the
Armenian troubles of 1895, as well as for the recognition of older claims
of equal justness.

He is also instructed to seek an adjustment of the dispute growing out of
the refusal of Turkey to recognize the acquired citizenship of Ottoman-born
persons naturalized in the United States since 1869 without prior imperial
consent, and in the same general relation he is directed to endeavor to
bring about a solution of the question which has more or less acutely
existed since 1869 concerning the jurisdictional rights of the United
States in matters of criminal procedure and punishment under Article IV of
the treaty of 1830. This latter difficulty grows out of a verbal
difference, claimed by Turkey to be essential, between the original Turkish
text and the promulgated translation.

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

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

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

I have the satisfaction of being able to state that the Bureau of the
American Republics, created in 1890 as the organ for promoting commercial
intercourse and fraternal relations among the countries of the Western
Hemisphere, has become a more efficient instrument of the wise purposes of
its founders, and is receiving the cordial support of the contributing
members of the international union which are actually represented in its
board of management. A commercial directory, in two volumes, containing a
mass of statistical matter descriptive of the industrial and commercial
interests of the various countries, has been printed in English, Spanish,
Portuguese, and French, and a monthly bulletin published in these four
languages and distributed in the Latin-American countries as well as in the
United States has proved to be a valuable medium for disseminating
information and furthering the varied interests of the international
union.

During the past year the important work of collecting information of
practical benefit to American industries and trade through the agency of
the diplomatic and consular officers has been steadily advanced, and in
order to lay such data before the public with the least delay the practice
was begun in January, 1898, of issuing the commercial reports from day to
day as they are received by the Department of State. It is believed that
for promptitude as well as fullness of information the service thus
supplied to our merchants and manufacturers will be found to show sensible
improvement and to merit the liberal support of Congress.

The experiences of the last year bring forcibly home to us a sense of the
burdens and the waste of war. We desire, in common with most civilized
nations, to reduce to the lowest possible point the damage sustained in
time of war by peaceable trade and commerce. It is true we may suffer in
such cases less than other communities, but all nations are damaged more or
less by the state of uneasiness and apprehension into which an outbreak of
hostilities throws the entire commercial world. It should be our object,
therefore, to minimize, so far as practicable, this inevitable loss and
disturbance. This purpose can probably best be accomplished by an
international agreement to regard all private property at sea as exempt
from capture or destruction by the forces of belligerent powers. The United
States Government has for many years advocated this humane and beneficent
principle, and is now in position to recommend it to other powers without
the imputation of selfish motives. I therefore suggest for your
consideration that the Executive be authorized to correspond with the
governments of the principal maritime powers with a view of incorporating
into the permanent law of civilized nations the principle of the exemption
of all private property at sea, not contraband of war, from capture or
destruction by belligerent powers.

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

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

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

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

On the same date the amount of money of all kinds in circulation, or not
included in Treasury holdings, was $1,886,879,504, an increase for the year
of $165,794,966. Estimating our population at 75,194,000 at the time
mentioned, the per capita circulation was $25.09. On the same date there
was in the Treasury gold bullion amounting to $138,502,545.

The provisions made for strengthening the resources of the Treasury in
connection with the war have given increased confidence in the purpose and
power of the Government to maintain the present standard, and have
established more firmly than ever the national credit at home and abroad. A
marked evidence of this is found in the inflow of gold to the Treasury. Its
net gold holdings on November 1, 1898, were $239,885,162 as compared with
$153,573,147 on November 1, 1897, and an increase of net cash of
$207,756,100, November 1, 1897, to $300,238,275, November 1, 1898. The
present ratio of net Treasury gold to outstanding Government liabilities,
including United States notes, Treasury notes of 1890, silver certificates,
currency certificates, standard silver dollars, and fractional silver coin,
November 1, 1898, was 25.35 per cent, as compared with 16.96 per cent,
November 1, 1897.

I renew so much of my recommendation of December, 1897, as follows: That
when any of the United States notes are presented for redemption in gold
and are redeemed in gold, such notes shall be kept and set apart and only
paid out in exchange for gold. This is an obvious duty. If the holder of
the United States note prefers the gold and gets it from the Government, he
should not receive back from the Government a United States note without
paying gold in exchange for it. The reason for this is made all the more
apparent when the Government issues an interest-bearing debt to provide
gold for the redemption of United States notes--a non-interest-bearing
debt. Surely it should not pay them out again except on demand and for
gold. If they are put out in any other way, they may return again, to he
followed by another bond issue to redeem them--another interest-bearing
debt to redeem a non-interest-bearing debt. This recommendation was made in
the belief that such provisions of law would insure to a greater degree the
safety of the present standard, and better protect our currency from the
dangers to which it is subjected from a disturbance in the general business
conditions of the country.

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

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

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

The companion proposition that our domestic paper currency shall be kept
safe and yet be so related to the needs of our industries and internal
commerce as to be adequate and responsive to such needs is a proposition
scarcely less important. The subject, in all its parts, is commended to the
wise consideration of the Congress.

The annexation of Hawaii and the changed relations of the United States to
Cuba, Puerto Rico, and the Philippines resulting from the war, compel the
prompt adoption of a maritime policy by the United States. There should be
established regular and frequent steamship communication, encouraged by the
United States, under the American flag, with the newly acquired islands.
Spain furnished to its colonies, at an annual cost of about $2,000,000,
steamship lines communicating with a portion of the world's markets, as
well as with trade centers of the home Government. The United States will
not undertake to do less. It is our duty to furnish the people of Hawaii
with facilities, under national control, for their export and import trade.
It will be conceded that the present situation calls for legislation which
shall be prompt, durable, and liberal.

The part which American merchant vessels and their seamen performed in the
war with Spain demonstrates that this service, furnishing both pickets and
the second line of defense, is a national necessity, and should be
encouraged in every constitutional way. Details and methods for the
accomplishment of this purpose are discussed in the report of the Secretary
of the Treasury, to which the attention of Congress is respectfully
invited.

In my last annual message I recommended that Congress authorize the
appointment of a commission for the purpose of making systematic
investigations with reference to the cause and prevention of yellow fever.
This matter has acquired an increased importance as a result of the
military occupation of the island of Cuba and the commercial intercourse
between this island and the United States which we have every reason to
expect. The sanitary problems connected with our new relations with the
island of Cuba and the acquisition of Puerto Rico are no less important
than those relating to finance, commerce, and administration. It is my
earnest desire that these problems may be considered by competent experts
and that everything may be done which the most recent advances in sanitary
science can offer for the protection of the health of our soldiers in those
islands and of our citizens who are exposed to the dangers of infection
from the importation of yellow fever. I therefore renew my recommendation
that the authority of Congress may be given and a suitable appropriation
made to provide for a commission of experts to be appointed for the purpose
indicated.

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

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

That at the end of any war in which the United States may become
involved the Army shall be reduced to a peace basis by the transfer
in the same arm of the service or absorption by promotion or honorable
discharge, under such regulations as the Secretary of War may establish, of
supernumerary commissioned officers and the honorable discharge or transfer
of supernumerary enlisted men; and nothing contained in this act shall be
construed as authorizing the permanent increase of the commissioned or
enlisted force of the Regular Army beyond that now provided by the law in
force prior to the passage of this act, except as to the increase of
twenty-five majors provided for in section 1 hereof. The importance of
legislation for the permanent increase of the Army is therefore manifest,
and the recommendation of the Secretary of War for that purpose has my
unqualified approval. There can be no question that at this time, and
probably for some time in the future, 100,000 men will be none too many to
meet the necessities of the situation. At all events, whether that number
shall be required permanently or not, the power should be given to the
President to enlist that force if in his discretion it should be necessary;
and the further discretion should be given him to recruit for the Army
within the above limit from the inhabitants of the islands with the
government of which we are charged. It is my purpose to muster out the
entire Volunteer Army as soon as the Congress shall provide for the
increase of the regular establishment. This will be only an act of justice
and will be much appreciated by the brave men who left their homes and
employments to help the country in its emergency.

In my last annual message I stated: The Union Pacific Railway, main line,
was sold under the decree of the United States court for the district of
Nebraska on the 1st and 2d of November of this year. The amount due the
Government consisted of the principal of the subsidy bonds, $27,236,512,
and the accrued interest thereon, $31,211,711.75, making the total
indebtedness $58,448,223.75. The bid at the sale covered the first-mortgage
lien and the entire mortgage claim of the Government, principal and
interest. This left the Kansas Pacific case unconcluded. By a decree of the
court in that case an upset price for the property was fixed at a sum which
would yield to the Government only $2,500,000 upon its lien. The sale, at
the instance of the Government, was postponed first to December 15, 1897,
and later, upon the application of the United States, was postponed to the
16th day of February, 1898.

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

Believing that no better price could be obtained and appreciating the
difficulties under which the Government would labor if it should become the
purchaser of the road at the sale, in the absence of any authority by
Congress to take charge of and operate the road I directed that upon the
guaranty of a minimum bid which should give the Government the principal of
its debt the sale should proceed. By this transaction the Government
secured an advance of $3,803,000 over and above the sum which the court had
fixed as the upset price, and which the reorganization committee had
declared was the maximum which they would pay for the property.

It is a gratifying fact that the result of these proceedings against the
Union Pacific system and the Kansas Pacific line is that the Government has
received on account of its subsidy claim the sum of $64,751,223.75, an
increase of $18,997,163.76 over the sum which the reorganization committee
originally agreed to bid for the joint property, the Government receiving
its whole claim, principal and interest, on the Union Pacific, and the
principal of its debt on the Kansas Pacific Railroad.

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

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

I deem it my duty to call to the attention of Congress the condition of the
present building occupied by the Department of Justice. The business of
that Department has increased very greatly since it was established in its
present quarters. The building now occupied by it is neither large enough
nor of suitable arrangement for the proper accommodation of the business of
the Department. The Supervising Architect has pronounced it unsafe and
unsuited for the use to which it is put. The Attorney-General in his report
states that the library of the Department is upon the fourth floor, and
that all the space allotted to it is so crowded with books as to
dangerously overload the structure. The first floor is occupied by the
Court of Claims. The building is of an old and dilapidated appearance,
unsuited to the dignity which should attach to this important Department.

A proper regard for the safety, comfort, and convenience of the officers
and employees would justify the expenditure of a liberal sum of money in
the erection of a new building of commodious proportions and handsome
appearance upon the very advantageous site already secured for that
purpose, including the ground occupied by the present structure and
adjoining vacant lot, comprising in all a frontage of 201 feet on
Pennsylvania avenue and a depth of 136 feet.

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

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

The war with Spain laid new and exceptional labors on the Post-Office
Department. The mustering of the military and naval forces of the United
States required special mail arrangements for every camp and every
campaign. The communication between home and camp was naturally eager and
expectant. In some of the larger places of rendezvous as many as 50,000
letters a day required handling. This necessity was met by the prompt
detail and dispatch of experienced men from the established force and by
directing all the instrumentalities of the railway mail and post-office
service, so far as necessary, to this new need. Congress passed an act
empowering the postmaster-General to establish offices or branches at every
military camp or station, and under this authority the postal machinery was
speedily put into effective operation.

Under the same authority, when our forces moved upon Cuba, Puerto Rico, and
the Philippines they were attended and followed by the postal service.
Though the act of Congress authorized the appointment of postmasters where
necessary, it was early determined that the public interests would best be
subserved, not by new designations, but by the detail of experienced men
familiar with every branch of the service, and this policy was steadily
followed. When the territory which was the theater of conflict came into
our possession, it became necessary to reestablish mail facilities for the
resident population as well as to provide them for our forces of
occupation, and the former requirement was met through the extension and
application of the latter obligation. I gave the requisite authority, and
the same general principle was applied to this as to other branches of
civil administration under military occupation. The details are more
particularly given in the report of the postmaster-General, and, while the
work is only just begun, it is pleasing to be able to say that the service
in the territory which has come under our control is already materially
improved.

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

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

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

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

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

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

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

There were on the pension rolls on June 30, 1898, 993,714 names, an
increase of nearly 18,000 over the number on the rolls on the same day of
the preceding year. The amount appropriated by the act of December 22,
1896, for the payment of pensions for the fiscal year of 1898 was
$140,000,000. Eight million seventy thousand eight hundred and seventy-two
dollars and forty-six cents was appropriated by the act of March 31, 1898,
to cover deficiencies in army pensions, and repayments in the sum of
$12,020.33, making a total of $148,082,892.79 available for the payment of
pensions during the fiscal year 1898. The amount disbursed from that sum
was $144,651,879.80, leaving a balance of $3,431,012.99 unexpended on the
30th of June, 1898, which was covered into the Treasury. There were 389
names added to the rolls during the year by special acts passed at the
second session of the Fifty-fifth Congress, making a total of 6,486
pensioners by Congressional enactments since 1861.

The total receipts of the Patent Office during the past year were
$1,253,948.44. The expenditures were $1,081,633.79, leaving a surplus of
$172,314.65.

The public lands disposed of by the Government during the year reached
8,453,896.92 acres, an increase of 614,780.26 acres over the previous year.
The total receipts from public lands during the fiscal year amounted to
$2,277,995.18, an increase of $190,063.90 over the preceding year. The
lands embraced in the eleven forest reservations which were suspended by
the act of June 4, 1897, again became subject to the operations of the
proclamations of February 22, 1897, creating them, which added an estimated
amount of 19,951,360 acres to the area embraced in the reserves previously
created. In addition thereto two new reserves were created during the
year--the Pine Mountain and Zaca Lake Reserve, in California, embracing
1,644,594 acres, and the Prescott Reserve, in Arizona, embracing 10,240
acres--while the Pecos River Reserve, in New Mexico, has been changed and
enlarged to include 120,000 additional acres.

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

The Department of the Interior has inaugurated a forest system, made
possible by the act of July, 1898, for a graded force of officers in
control of the reserves. This system has only been in full operation since
August, but good results have already been secured in many sections. The
reports received indicate that the system of patrol has not only prevented
destructive fires from gaining headway, but has diminished the number of
fires.

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

While it has not yet been practicable to enforce all the provisions of the
act of June 28, 1898, "for the protection of the people of the Indian
Territory, and for other purposes," it is having a salutary effect upon the
nations composing the five tribes. The Dawes Commission reports that the
most gratifying results and greater advance toward the attainment of the
objects of the Government have been secured in the past year than in any
previous year. I can not too strongly indorse the recommendation of the
commission and of the Secretary of the Interior for the necessity of
providing for the education of the 30,000 white children resident in the
Indian Territory.

The Department of Agriculture has been active in the past year. Explorers
have been sent to many of the countries of the Eastern and Western
hemispheres for seeds and plants that may be useful to the United States,
and with the further view of opening up markets for our surplus products.
The Forestry Division of the Department is giving special attention to the
treeless regions of our country and is introducing species specially
adapted to semiarid regions. Forest fires, which seriously interfere with
production, especially in irrigated regions, are being studied, that losses
from this cause may be avoided. The Department is inquiring into the use
and abuse of water in many States of the West, and collating information
regarding the laws of the States, the decisions of the courts, and the
customs of the people in this regard, so that uniformity may be secured.
Experiment stations are becoming more effective every year. The annual
appropriation of $720,000 by Congress is supplemented by $400,000 from the
States. Nation-wide experiments have been conducted to ascertain the
suitableness as to soil and climate and States for growing sugar beets. The
number of sugar factories has been doubled in the past two years, and the
ability of the United States to produce its own sugar from this source has
been clearly demonstrated.

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

In the year 1900 will occur the centennial anniversary of the founding of
the city of Washington for the permanent capital of the Government of the
United States by authority of an act of Congress approved July 16, 1790. In
May, 1800, the archives and general offices of the Federal Government were
removed to this place. On the 17th of November, 1800, the National Congress
met here for the first time and assumed exclusive control of the Federal
district and city. This interesting event assumes all the more significance
when we recall the circumstances attending the choosing of the site, the
naming of the capital in honor of the Father of his Country, and the
interest taken by him in the adoption of plans for its future development
on a magnificent scale.

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

A movement lately inaugurated by the citizens to have the anniversary
celebrated with fitting ceremonies, including, perhaps, the establishment
of a handsome permanent memorial to mark so historical an occasion and to
give it more than local recognition, has met with general favor on the part
of the public.

I recommend to the Congress the granting of an appropriation for this
purpose and the appointment of a committee from its respective bodies. It
might also be advisable to authorize the President to appoint a committee
from the country at large, which, acting with the Congressional and
District of Columbia committees, can complete the plans for an appropriate
national celebration.

The alien contract law is shown by experience to need some amendment; a
measure providing better protection for seamen is proposed; the rightful
application of the eight-hour law for the benefit of labor and of the
principle of arbitration are suggested for consideration; and I commend
these subjects to the careful attention of the Congress.

The several departmental reports will be laid before you. They give in
great detail the conduct of the affairs of the Government during the past
year and discuss many questions upon which the Congress may feel called
upon to act.

***

State of the Union Address
William McKinley
December 5, 1899

To the Senate and House of Representatives:

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

The Fifty-sixth Congress convenes in its first regular session with the
country in a condition of unusual prosperity, of universal good will among
the people at home, and in relations of peace and friendship with every
government of the world. Our foreign commerce has shown great increase in
volume and value. The combined imports and exports for the year are the
largest ever shown by a single year in all our history. Our exports for
1899 alone exceeded by more than a billion dollars our imports and exports
combined in 1870. The imports per capita are 20 per cent less than in 1870,
while the exports per capita are 58 per cent more than in 1870, showing the
enlarged capacity of the United States to satisfy the wants of its own
increasing population, as well as to contribute to those of the peoples of
other nations.

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

Government receipts from all sources for the fiscal year ended June 30,
1899, including $11,798,314,14, part payment of the Central Pacific
Railroad indebtedness, aggregated $610,982,004.35. Customs receipts were
$206,128,481.75, and those from internal revenue $273,437,161.51.

For the fiscal year the expenditures were $700,093,564.02, leaving a
deficit of $89,111,559.67.

The Secretary of the Treasury estimates that the receipts for the current
fiscal year will aggregate $640,958,112, and upon the basis of present
appropriations the expenditures will aggregate $600,958,112, leaving a
surplus of $40,000,000.

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

The present gratifying strength of the Treasury is shown by the fact that
on December 1, 1899, the available cash balance was $278,004,837.72, Of
which $239,744,905.36 was in gold coin and bullion. The conditions of
confidence which prevail throughout the country have brought gold into more
general use and customs receipts are now almost entirely paid in that
coin.

The strong position of the Treasury with respect to cash on hand and the
favorable showing made by the revenues have made it possible for the
Secretary of the Treasury to take action under the provisions of section
3694, Revised Statutes, relating to the sinking fund. Receipts exceeded
expenditures for the first five months of the current fiscal year by
$13,413,389.91, and, as mentioned above, the Secretary of the Treasury
estimates that there will be a surplus of approximately $40,000,000 at the
end of the year. Under such conditions it was deemed advisable and proper
to resume compliance with the provisions of the sinking-fund law, which for
eight years has not been done because of deficiencies in the revenues. The
Treasury Department therefore offered to purchase during November
$25,000,000 of the 5 per cent loan of 1904, or the 4 per cent funded loan
of 1907, at the current market price. The amount offered and purchased
during November was $18,408,600. The premium paid by the Government on such
purchases was $2,263,521 and the net saving in interest was about
$2,885,000. The success of this operation was sufficient to induce the
Government to continue the offer to purchase bonds to and including the 23d
day of December, instant, unless the remainder of the $25,000,000 called
for should be presented in the meantime for redemption.

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

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

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

I urgently recommend that to support the existing gold standard, and to
maintain "the parity in value of the coins of the two metals (gold and
silver) and the equal power of every dollar at all times in the market and
in the payment of debts," the Secretary of the Treasury be given additional
power and charged with the duty to sell United States bonds and to employ
such other effective means as may be necessary to these ends. The authority
should include the power to sell bonds on long and short time, as
conditions may require, and should provide for a rate of interest lower
than that fixed by the act of January 14, 1875. While there is now no
commercial fright which withdraws gold from the Government, but, on the
contrary, such widespread confidence that gold seeks the Treasury demanding
paper money in exchange, yet the very situation points to the present as
the most fitting time to make adequate provision to insure the continuance
of the gold standard and of public confidence in the ability and purpose of
the Government to meet all its obligations in the money which the civilized
world recognizes as the best. The financial transactions of the Government
are conducted upon a gold basis. We receive gold when we sell United States
bonds and use gold for their payment. We are maintaining the parity of all
the money issued or coined by authority of the Government. We are doing
these things with the means at hand. Happily at the present time we are not
compelled to resort to loans to supply gold. It has been done in the past,
however, and may have to be done in the future. It behooves us, therefore,
to provide at once the best means to meet the emergency when it arises, and
the best means are those which are the most certain and economical. Those
now authorized have the virtue neither of directness nor economy. We have
already eliminated one of the causes of our financial plight and
embarrassment during the years 1893, 1894, 1895, and 1896. Our receipts now
equal our expenditures; deficient revenues no longer create alarm Let us
remove the only remaining cause by conferring the full and necessary power
on the Secretary of the Treasury and impose upon him the duty to uphold the
present gold standard and preserve the coins of the two metals on a parity
with each other, which is the repeatedly declared policy of the United
States.

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

The value of an American merchant marine to the extension of our commercial
trade and the strengthening of our power upon the sea invites the immediate
action of the Congress. Our national development will be one-sided and
unsatisfactory so long as the remarkable growth of our inland industries
remains unaccompanied by progress on the seas. There is no lack of
constitutional authority for legislation which shall give to the country
maritime strength commensurate with its industrial achievements and with
its rank among the nations of the earth,

The past year has recorded exceptional activity in our shipyards, and the
promises of continual prosperity in shipbuilding are abundant. Advanced
legislation for the protection of our seamen has been enacted. Our coast
trade, under regulations wisely framed at the beginning of the Government
and since, shows results for the past fiscal year unequaled in our records
or those of any other power. We shall fail to realize our opportunities,
however, if we complacently regard only matters at home and blind ourselves
to the necessity of securing our share in the valuable carrying trade of
the world.

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

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

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

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

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

The subject is one giving rise to many divergent views as to the nature and
variety or cause and extent of the injuries to the public which may result
from large combinations concentrating more or less numerous enterprises and
establishments, which previously to the formation of the combination were
carried on separately.

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

President Harrison in his annual message of December 3, 1889, says: Earnest
attention should be given by Congress to a consideration of the question
how far the restraint of those combinations of capital commonly called
"trusts" is matter of Federal jurisdiction. When organized, as they often
are, to crush out all healthy competition and to monopolize the production
or sale of an article of commerce and general necessity they are dangerous
conspiracies against the public good, and should be made the subject of
prohibitory and even penal legislation. An act to protect trade and
commerce against unlawful restraints and monopolies was passed by Congress
on the 2d of July, 1890. The provisions of this statute are comprehensive
and stringent. It declares every contract or combination, in the form of a
trust or otherwise, or conspiracy in the restraint of trade or commerce
among the several States or with foreign nations, to be unlawful. It
denominates as a criminal every person who makes any such contract or
engages in any such combination or conspiracy, and provides a punishment by
fine or imprisonment. It invests the several circuit courts of the United
States with jurisdiction to prevent and restrain violations of the act, and
makes it the duty of the several United States district attorneys, under
the direction of the Attorney General, to institute proceedings in equity
to prevent and restrain such violations. It further confers upon any person
who shall be injured in his business or property by any other person or
corporation by reason of anything forbidden or declared to be unlawful by
the act, the power to sue therefore in any circuit court of the United
States without respect to the amount in controversy, and to recover
threefold the damages by him sustained and the costs of the suit, including
reasonable attorney fees. It will be perceived that the act is aimed at
every kind of combination in the nature of a trust or monopoly in restraint
of interstate or international commerce.

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

President Cleveland in his annual message of December 7, 1896--more than
six years subsequent to the enactment of this law--after stating the
evils of these trust combinations, says: Though Congress has attempted to
deal with this matter by legislation, the laws passed for that purpose thus
far have proved ineffective, not because of any lack of disposition or
attempt to enforce them, but simply because the laws themselves as
interpreted by the courts do not reach the difficulty. If the
insufficiencies of existing laws can be remedied by further legislation, it
should be done. The fact must be recognized, however, that all Federal
legislation on this subject may fall short of its purpose because of
inherent obstacles, and also because of the complex character of our
governmental system, which, while making the Federal authority supreme
within its sphere, has carefully limited that sphere by metes and bounds
which cannot be transgressed. The decision of our highest court on this
precise question renders it quite doubtful whether the evils of trusts and
monopolies may be adequately treated through Federal action, unless they
seek directly and purposely to include in their objects transportation or
intercourse between States or between the United States and foreign
countries. It does not follow, however, that this is the limit of the
remedy that may be applied. Even though it may be found that Federal
authority is not broad enough to fully reach the case, there can be no
doubt of the power of the several States to act effectively in the
premises, and there should be no reason to doubt their willingness to
judiciously exercise such power. The State legislation to which President
Cleveland looked for relief from the evils of trusts has failed to
accomplish fully that object. This is probably due to a great extent to the
fact that different States take different views as to the proper way to
discriminate between evil and injurious combinations and those associations
which are beneficial and necessary to the business prosperity of the
country. The great diversity of treatment in different States arising from
this cause and the intimate relations of all parts of the country to each
other without regarding State lines in the conduct of business have made
the enforcement of State laws difficult.

It is apparent that uniformity of legislation upon this subject in the
several States is much to be desired. It is to be hoped that such
uniformity founded in a wise and just discrimination between what is
injurious and what is useful and necessary in business operations may be
obtained and that means may be found for the Congress within the
limitations of its constitutional power so to supplement an effective code
of State legislation as to make a complete system of laws throughout the
United States adequate to compel a general observance of the salutary rules
to which I have referred.

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

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

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

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

In my last annual message I adverted to the claim of the Austro-Hungarian
Government for indemnity for the killing of certain Austrian and Hungarian
subjects by the authorities of the State of Pennsylvania, at Lattimer,
while suppressing an unlawful tumult of miners, September 10, 1897. In view
of the verdict of acquittal rendered by the court before which the sheriff
and his deputies were tried for murder, and following the established
doctrine that the Government may not be held accountable for injuries
suffered by individuals at the hands of the public authorities while acting
in the line of duty in suppressing disturbance of the public peace, this
Government, after due consideration of the claim advanced by the
Austro-Hungarian Government, was constrained to decline liability to
indemnify the sufferers.

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

Having been invited by Belgium to participate in a congress, held at
Brussels, to revise the provisions of the general act Of July 2, 1890, for
the repression of the African slave trade, to which the United States was a
signatory party, this Government preferred not to be represented by a
plenipotentiary, but reserved the right of accession to the result. Notable
changes were made, those especially concerning this country being in the
line of the increased restriction of the deleterious trade in spirituous
liquors with the native tribes, which this Government has from the outset
urgently advocated. The amended general act will be laid before the Senate,
with a view to its advice and consent.

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

General Pando was elected President of Bolivia on October 23.

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

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

During the past summer two national ships of the United States have visited
Brazilian ports on a friendly mission and been cordially received. The
voyage of the Wilmington up the Amazon River gave rise to a passing
misunderstanding, owing to confusion in obtaining permission to visit the
interior and make surveys in the general interest of navigation, but the
incident found a ready adjustment in harmony with the close relations of
amity which this Government has always sedulously sought to cultivate with
the commonwealths of the Western Continent.

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

The good will of Colombia toward our country has been testified anew by the
cordial extension of facilities to the Nicaraguan Canal Commission in their
approaching investigation of the Panama Canal and other projected routes
across the Isthmus of Darien.

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

Discussion of the questions raised by the action of Denmark in imposing
restrictions on the importation of American meats has continued without
substantial result in our favor.

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

The experimental association of Nicaragua, Honduras, and Salvador, tinder
the title of the Greater Republic of Central America, when apparently on
the threshold of a complete federal organization by the adoption of a
constitution and the formation of a national legislature, was disrupted in
the last days of November, 1898, by the withdrawal of Salvador. Thereupon
Nicaragua and Honduras abandoned the joint compact, each resuming its
former independent sovereignty. This was followed by the reception of
Minister Merry by the Republics of Nicaragua and Salvador, while Minister
Hunter in turn presented his credentials to the Government of Honduras,
thus reverting to the old distribution of the diplomatic agencies of the
United States in Central America for which our existing statutes provide. A
Nicaraguan envoy has been accredited to the United States.

An insurrectionary movement, under General Reyes, broke out at Bluefields
in February last, and for a time exercised actual control in the Mosquito
Territory. The Detroit was promptly sent thither for the protection of
American interests. After a few weeks the Reyes government renounced the
conflict, giving place to the restored supremacy of Nicaragua. During the
interregnum certain public dues accruing under Nicaraguan law were
collected from American merchants by the authorities for the time being in
effective administrative control. Upon the titular government regaining
power, a second payment of these dues was demanded. Controversy arose
touching the validity of the original payment of the debt to the de facto
regent of the territory. An arrangement was effected in April last by the
United States minister and the foreign secretary of Nicaragua whereby the
amounts of the duplicate payments were deposited with the British consul
pending an adjustment of the matter by direct agreement between the
Governments of the United States and Nicaragua. The controversy is still
unsettled.

The contract of the Maritime Canal Company of Nicaragua was declared
forfeited by the Nicaraguan Government on the Tenth of October, on the
ground of nonfulfillment within the ten years' term stipulated in the
contract. The Maritime Canal Company has lodged a protest against this
action, alleging rights in the premises which appear worthy of
consideration. This Government expects that Nicaragua will afford the
protestants a full and fair hearing upon the merits of the case.

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

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

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

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

The exchange of ratifications of a convention for the revival of the United
States and Chilean Claims Commission and for the adjudication of claims
heretofore presented but not determined during the life of the previous
Commission has been delayed by reason of the necessity for fresh action by
the Chilean Senate upon the amendments attached to the ratification of the
treaty by the United States Senate. This formality is soon to be
accomplished.

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

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

American capital has sought and found various opportunities of competing to
carry out the internal improvements which the Imperial Government is wisely
encouraging, and to develop the natural resources of the Empire. Our trade
with China has continued to grow, and our commercial rights under existing
treaties have been everywhere maintained during the past year, as they will
be in the future.

The extension of the area open to international foreign settlement at
Shanghai and the opening of the ports of Nanking, Tsing-tao (Kiao chao),
and Ta-lien-wan to foreign trade and settlement will doubtless afford
American enterprise additional facilities and new fields, of which it will
not be slow to take advantage.

In my message to Congress of December 5, 1898, I urged that the
recommendation which had been made to the Speaker of the House of
Representatives by the Secretary of the Treasury on the 14th of June, 1898,
for an appropriation for a commission to study the commercial and
industrial conditions in the Chinese Empire and report as to the
opportunities for, and obstacles to, the enlargement of markets in China
for the raw products and manufactures of the United States, should receive
at your hands the consideration which its importance and timeliness
merited, but the Congress failed to take action.

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

The death of President Faure in February last called forth those sincere
expressions of sympathy which befit the relations of two Republics as
closely allied by unbroken historic ties as are the United States and
France.

Preparations for the representation of the industries, arts, and products
of the United States at the World's Exposition to be held in Paris next
year continue on an elaborate and comprehensive scale, thanks to the
generous appropriation provided by Congress and to the friendly interest
the French Government has shown in furthering a typical exhibit of American
progress.

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

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

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

The United States Government building is approaching completion, and no
effort will be spared to make it worthy, in beauty of architectural plan
and in completeness of display, to represent our nation. It has been
suggested that a permanent building of similar or appropriate design be
erected on a convenient site, already given by the municipality, near the
exposition grounds, to serve in commemoration of the part taken by this
country in this great enterprise, as an American National Institute, for
our countrymen resorting to Paris for study.

I am informed by our Commissioner-General that we shall have in the
American sections at Paris over 7,000 exhibitors, from every State ill our
country, a number ten times as great as those which were represented at
Vienna in 1873, six times as many as those in Paris in 1878, and four times
as many as those who exhibited in Paris in 1889. This statement does not
include the exhibits from either Cuba, Puerto Rico, or Hawaii, for which
arrangements have been made.

A number of important international congresses on special topics affecting
public interests are proposed to be held in Paris next summer in connection
with the exposition. Effort will be made to have the several technical
branches of our administration efficiently represented at those
conferences, each in its special line, and to procure the largest possible
concourse of State representatives, particularly at the Congresses of
Public Charity and Medicine.

Our relations with Germany continue to be most cordial. The increasing
intimacy of direct association has been marked during the year by the
granting permission in April for the landing on our shores of a cable from
Borkum Emden, on the North Sea, by way of the Azores, and also by the
conclusion on September 2 of a Parcels Post Convention with the German
Empire. In all that promises closer relations of intercourse and commerce
and a better understanding between two races having so many traits in
common, Germany can be assured of the most cordial cooperation of this
Government and people. We may be rivals in many material paths, but our
rivalry should be generous and open, ever aiming toward the attainment of
larger results and the mutually beneficial advancement of each in the line
of its especial adaptabilities.

The several governments of the Empire seem reluctant to admit the natural
excellence of our food productions and to accept the evidence we constantly
tender of the care with which their purity is guarded by rigid inspection
from the farm, through the slaughterhouse and the packing establishments,
to the port of shipment. Our system of control over exported food staples
invites examination from any quarter and challenges respect by its
efficient thoroughness.

It is to be hoped that in time the two Governments will act in common
accord toward the realization of their common purpose to safeguard the
public health and to insure the purity and wholesomeness of all food
products imported by either country from the other. Were the Congress to
authorize an invitation to Germany, in connection with the pending
reciprocity negotiations, for the constitution of a joint commission of
scientific experts and practical men of affairs to conduct a searching
investigation of food production and exportation in both countries and
report to their respective legislatures for the adoption of such remedial
measures as they might recommend for either, the way might be opened for
the desirable result indicated.

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

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

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

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

Much progress had been made by the Commission toward the adjustment of many
of these questions, when it became apparent that an irreconcilable
difference of views was entertained respecting the delimitation of the
Alaskan, boundary. In the failure of an agreement as to the meaning of
Articles III and IV of the treaty of 1825 between Russia and Great Britain,
which defined the boundary between Alaska and Canada, the American
Commissioners proposed that the subject of the boundary be laid aside, and
that the remaining questions of difference be proceeded with, some of which
were so far advanced as to assure the probability of a settlement. This
being declined by the British Commissioners, an adjournment was taken until
the boundary should be adjusted by the two Governments. The subject has
been receiving the careful attention which its importance demands, with the
result that a modus vivendi for provisional demarcations in the region
about the head of Lynn Canal has, been agreed upon; and it is hoped that
the negotiations now in progress between the two Governments will end in an
agreement for the establishment and delimitation of a permanent boundary.

Apart from these questions growing out of our relationship with our
northern neighbor, the most friendly disposition and ready agreement have
marked the discussion of numerous matters arising in the vast and intimate
intercourse of the United States with Great Britain.

This Government has maintained an attitude of neutrality in the unfortunate
contest between Great Britain and the Boer States of Africa. We have
remained faithful to the precept of avoiding entangling alliances as to
affairs not of our direct concern. Had circumstances suggested that the
parties to the quarrel would have welcomed any kindly expression of the
hope of the American people that war might be averted, good offices would
have been gladly tendered. The United States representative at Pretoria was
early instructed to see that all neutral American interests be respected by
the combatants. This has been an easy task in view of the positive
declarations of both British and Boer authorities that the personal and
property rights of our citizens should be observed.

Upon the withdrawal of the British agent from Pretoria the United States
consul was authorized, upon the request of the British Government and with
the assent of the South African and Orange Free State Governments, to
exercise the customary good offices of a neutral for the care of British
interests. In the discharge of this function, I am happy to say that
abundant opportunity has been afforded to show the impartiality of this
Government toward both the combatants.

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

The authorities of the State and a representative of the Italian Embassy
having separately investigated the occurrence, with discrepant results,
particularly as to the alleged citizenship of the victims, and it not
appearing that the State had been able to discover and punish the violators
of the law, an independent investigation has been set on foot, through the
agency of the Department of State, and is still in progress. The result
will enable the Executive to treat the question with the Government of
Italy in a spirit of fairness and justice. A satisfactory solution will
doubtless be reached.

The recurrence of these distressing manifestations of blind mob fury
directed at dependents or natives of a foreign country suggests that the
contingency has arisen for action by Congress in the direction of
conferring upon the Federal courts jurisdiction in this class of
international cases where the ultimate responsibility of the Federal
Government may be involved. The suggestion is not new. In his annual
message of December 9, 1891, my predecessor, President Harrison, said: It
would, I believe, be entirely competent for Congress to make offenses
against the treaty rights of foreigners domiciled in the United States
cognizable in the Federal courts. This has not, however, been done, and the
Federal officers and courts have no power in such cases to intervene either
for the protection of a foreign citizen or for the punishment of his
slayers. It seems to me to follow, in this state of the law, that the
officers of the State charged with police and judicial powers in such cases
must, in the consideration of international questions growing out of such
incidents, be regarded in such sense as Federal agents as to make this
Government answerable for their acts in cases where it would be answerable
if the United States had used its constitutional power to define and punish
crimes against treaty rights. A bill to provide for the punishment of
violations of treaty rights of aliens was introduced in the Senate March 1,
1892, and reported favorably March 30. Having doubtless in view the
language of that part of Article III of the treaty of February 26, 1871,
between the United States and Italy, which stipulates that "The citizens
of each of the high contracting parties shall receive, in the States and
Territories of the other, most constant protection and security for their
persons and property, and shall enjoy in this respect the same rights and
privileges as are or shall be granted to the natives, on their submitting
themselves to the conditions imposed upon the natives," the bill so
introduced and reported provided that any act committed in any State or
Territory of the United States in violation of the rights of a citizen or
subject of a foreign country secured to such citizen or subject by treaty
between the United States and such foreign country and constituting a crime
under the laws of the State or Territory shall constitute a like crime
against the United States and be cognizable in the Federal courts. No
action was taken by Congress in the matter.

I earnestly recommend that the subject be taken up anew and acted upon
during the present session. The necessity for some such provision
abundantly appears. Precedent for constituting a Federal jurisdiction in
criminal cases where aliens are sufferers is rationally deducible from the
existing statute, which gives to the district and circuit courts of the
United States jurisdiction of civil suits brought by aliens where the
amount involved exceeds a certain sum. If such jealous solicitude be shown
for alien rights in cases of merely civil and pecuniary import, how much
greater should be the public duty to take cognizance of matters affecting
the lives and the rights of aliens tinder the settled principles of
international law no less than under treaty stipulation, in cases of such
transcendent wrong-doing as mob murder, especially when experience has
shown that local justice is too often helpless to punish the offenders.

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

The treaty of commerce and navigation between the United States and Japan
on November 22, 1894, took effect in accordance with the terms of its XIXth
Article on the 17th of July last, simultaneously with the enforcement of
like treaties with the other powers, except France, whose convention did
not go into operation until August 4, the United States being, however,
granted up to that date all the privileges and rights accorded to French
citizens under the old French treaty. By this notable conventional reform
Japan's position as a fully independent sovereign power is assured, control
being gained of taxation, customs revenues, judicial administration,
coasting trade, and all other domestic functions of government, and foreign
extra-territorial rights being renounced.

Comprehensive codes of civil and criminal procedure according to western
methods, public instruction, patents and copyrights, municipal
administration, including jurisdiction over the former foreign settlements,
customs tariffs and procedure, public health, and other administrative
measures have been proclaimed. The working of the new system has given rise
to no material complaints on the part of the American citizens or
interests, a circumstance which attests the ripe consideration with which
the change has been prepared.

Valuable assistance was rendered by the Japanese authorities to the United
States transport ship Morgan City while stranded at Kobe. Permission has
been granted to land and pasture army horses at Japanese ports of call on
the way to the Philippine Islands. These kindly evidences of good will are
highly appreciated.

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

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

I recommend that, in case the Congress should not take measures to bring
about this result by direct action of the Government, the Postmaster
General be authorized to invite competitive bids for the establishment of a
cable; the company making the best responsible bid to be awarded the
contract; the successful company to give ample bonds to insure the
completion of the work within a reasonable time.

The year has been marked by constant increase in the intimacy of our
relations with Mexico and in the magnitude of mutually advantageous
interchanges. This Government has omitted no opportunity to show its strong
desire to develop and perpetuate the ties of cordiality now so long happily
unbroken.

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

The extradition of Mrs. Mattie Rich, a citizen of the United States,
charged with homicide committed in Mexico, was after mature consideration
directed by me in the conviction that the ends of justice would be thereby
subserved. Similar action, on appropriate occasion, by the Mexican
Executive will not only tend to accomplish the desire of both Governments
that grave crimes go not unpunished, but also to repress lawlessness along
the border of the two countries. The new treaty stipulates that neither
Government shall assume jurisdiction in the punishment of crimes committed
exclusively within the territory of the other. This will obviate in future
the embarrassing controversies which have heretofore arisen through
Mexico's assertion of a claim to try and punish an American citizen for an
offense committed within the jurisdiction of the United States.

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

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

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

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

Important events have occurred in the Samoan Islands. The election,
according to the laws and customs of Samoa, of a successor to the late
King, Malietoa Laupepa, developed a contest as to the validity of the
result, which issue, by the terms of the General Act, was to be decided by
the Chief justice. Upon his rendering a judgment in favor of Malietoa Tanu,
the rival chief, Mataafa, took up arms. The active intervention of American
and British war ships became imperative to restore order, at the cost of
sanguinary encounters. In this emergency a joint commission of
representatives of the United States, Germany, and Great Britain was sent
to Samoa to investigate the situation and provide a temporary remedy. By
its active efforts a peaceful solution was reached for the time being, the
kingship being abolished and a provisional government established.
Recommendations unanimously made by the commission for a permanent
adjustment of the Samoan question were taken under consideration by the
three powers parties to the General Act. But the more they were examined
the more evident it became that a radical change was necessary in the
relations of the powers to Samoa.

The inconveniences and possible perils of the tripartite scheme of
supervision and control in the Samoan group by powers having little
interest in common in that quarter beyond commercial rivalry had been once
more emphasized by the recent events. The suggested remedy of the joint
Commission, like the scheme it aimed to replace amounted to what has been
styled a tridominium, being the exercise of the functions of sovereignty by
an unanimous agreement of three powers. The situation had become far more
intricate and embarrassing from every point of view than it was when my
predecessor, in 1894, summed up its perplexities and condemned the
participation in it of the United States.

The arrangement under which Samoa was administered had proved impracticable
and unacceptable to all the powers concerned. To withdraw from the
agreement and abandon the islands to Germany and Great Britain would not be
compatible with our interests in the archipelago. To relinquish our rights
in the harbor of Pago Pago, the best anchorage in the Pacific, the
occupancy of which had been leased to the United States in 1878 by the
first foreign treaty ever concluded by Samoa, was not to be thought of
either as regards the needs of our Navy or the interests of our growing
commerce with the East. We could not have considered any proposition for
the abrogation of the tripartite control which did not confirm us in all
our rights and safeguard all our national interests in the islands.

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

Claims have been preferred by white residents of Samoa on account of
injuries alleged to have been suffered through the acts of the treaty
Governments in putting down the late disturbances. A convention has been
made between the three powers for the investigation and settlement of these
claims by a neutral arbitrator, to which the attention of the Senate will
be invited.

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

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

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

This nation has assumed before the world a grave responsibility for the
future good government of Cuba. We have accepted a trust the fulfillment of
which calls for the sternest integrity of purpose and the exercise of the
highest wisdom. The new Cuba yet to arise from the ashes of the past must
needs be bound to us by ties of singular intimacy and strength if its
enduring welfare is to be assured. Whether those ties shall be organic or
conventional, the destinies of Cuba are in some rightful form and manner
irrevocably linked with our own, but how and how far is for the future to
determine in the ripeness of events. Whatever be the outcome, we must see
to it that free Cuba be a reality, not a name, a perfect entity, not a
hasty experiment bearing within itself the elements of failure. Our
mission, to accomplish which we took up the wager of battle, is not to be
fulfilled by turning adrift any loosely framed commonwealth to face the
vicissitudes which too often attend weaker States whose natural wealth and
abundant resources are offset by the incongruities of their political
organization and the recurring occasions for internal rivalries to sap
their strength and dissipate their energies. The greatest blessing which
can come to Cuba is the restoration of her agricultural and industrial
prosperity, which will give employment to idle men and re-establish the
pursuits of peace. This is her chief and immediate need.

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

For the relief of the distressed in the island of Cuba the War Department
has issued supplies to destitute persons through the officers of the Army,
which have amounted to 5,493,000 rations, at a cost Of $1,417,554.07.

To promote the disarmament of the Cuban volunteer army, and in the interest
of public peace and the welfare of the people, the sum Of $75 was paid to
each Cuban soldier borne upon the authenticated rolls, on condition that he
should deposit his arms with the authorities designated by the United
States. The sum thus disbursed aggregated $2,547,750, which was paid from
the emergency fund provided by the act of January 5, 1899, for that
purpose.

Out of the Cuban island revenues during the six months ending June 30,
1899, $1,712,014.20 was expended for sanitation, $293,881.70 for charities
and hospitals, and $88,944.03 for aid to the destitute.

Following the exchange of ratifications of the treaty of peace the two
Governments accredited ministers to each other, Spain sending to Washington
the Duke of Arcos, an eminent diplomatist, previously stationed in Mexico,
while the United States transferred to Madrid Hon. Bellamy Storer, its
minister at Brussels. This was followed by the respective appointment of
consuls, thereby fully resuming the relations interrupted by the war. In
addition to its consular representation in the United States, the Spanish
Government has appointed consuls for Cuba, who have been provisionally
recognized during the military administration of the affairs of that
island.

Judicial intercourse between the courts of Cuba and Puerto Rico and of
Spain has been established, as provided by the treaty of peace. The Cuban
political prisoners in Spanish penal stations have been and are being
released and returned to their homes, in accordance with Article VI of the
treaty. Negotiations are about to be had for defining the conventional
relations between the two countries, which fell into abeyance by reason of
the war. I trust that these will include a favorable arrangement for
commercial reciprocity under the terms of sections 3 and 4 of the current
tariff act. In these, as in all matters of international concern, no effort
will be spared to respond to the good disposition of Spain, and to
cultivate in all practicable ways the intimacy which should prevail between
two nations whose past history has so often and in so many ways been marked
by sincere friendship and by community of interests.

I would recommend appropriate legislation in order to carry into execution
Article VII of the Treaty of Peace with Spain, by which the United States
assured the payment of certain claims for indemnity of its citizens against
Spain.

The United States minister to Turkey continues, under instructions, to
press for a money payment in satisfaction of the just claims for injuries
suffered by American citizens in the disorders of several years past and
for wrongs done to them by the Ottoman authorities. Some of these claims
are of many years' standing. This Government is hopeful of a general
agreement in this regard.

In the Turkish Empire the situation of our citizens remains unsatisfactory.
Our efforts during nearly forty years to bring about a convention of
naturalization seem to be on the brink of final failure through the
announced policy of the Ottoman Porte to refuse recognition of the alien
status of native Turkish subjects naturalized abroad since 1867. Our
statutes do not allow this Government to admit any distinction between the
treatment of native and naturalized Americans abroad, so that ceaseless
controversy arises in cases where persons owing in the eye of international
law a dual allegiance are prevented from entering Turkey or are expelled
after entrance. Our law in this regard contrasts with that of the European
States. The British act, for instance, does not claim effect for the
naturalization of an alien in the event of his return to his native
country, unless the change be recognized by the law of that country or
stipulated by treaty between it and the naturalizing State.

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

The International Commission of Arbitration, appointed under the
Anglo-Venezuelan treaty of 1897, rendered an award on October 3 last,
whereby the boundary line between Venezuela and British Guiana is
determined, thus ending a controversy which has existed for the greater
part of the century. The award, as to which the arbitrators were unanimous,
while not meeting the extreme contention of either party, gives to Great
Britain a large share of the interior territory in dispute and to Venezuela
the entire mouth of the Orinoco, including Barima Point and the Caribbean
littoral for some distance to the eastward. The decision appears to be
equally satisfactory to both parties.

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

The fourth section of the Tariff Act approved July 24, 1897, appears to
provide only for commercial treaties which should be entered into by the
President and also ratified by the Senate within two years from its
passage. Owing to delays inevitable in negotiations of this nature, none of
the treaties initiated under that section could be concluded in time for
ratification by the Senate prior to its adjournment on the 4th of March
last. Some of the pending negotiations, however, were near conclusion at
that time, and the resulting conventions have since been signed by the
plenipotentiaries. Others, within both the third and fourth sections of the
act, are still under consideration. Acting under the constitutional power
of the Executive in respect to treaties, I have deemed it my duty, while
observing the limitations of concession provided by the fourth section, to
bring to a conclusion all pending negotiations, and submit them to the
Senate for its advice and consent.

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

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

In my last annual message the progress noted in the work of the diplomatic
and consular officers in collecting information as to the industries and
commerce of other countries, and in the care and promptitude with which
their reports are printed and distributed, has continued during the past
year, with increasingly valuable results in suggesting new sources of
demand for American products and in pointing out the obstacles still to be
overcome in facilitating the remarkable expansion of our foreign trade. It
will doubtless be gratifying to Congress to learn that the various agencies
of the Department of State are co-operating in these endeavors with a zeal
and effectiveness which are not only receiving the cordial recognition of
our business interests, but are exciting the emulation of other
Governments. In any rearrangement of the great and complicated work of
obtaining official data of an economic character which Congress may
undertake it is most important, in my judgment, that the results already
secured by the efforts of the Department of State should be carefully
considered with a view to a judicious development and increased utility to
our export trade.

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

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

The period for notification expired on July 14, 1899, without any of the
members having given the necessary notice of withdrawal. Its maintenance is
therefore assured for the next ten years. In view of this fact and of the
numerous questions of general interest and common benefit to all of the
Republics of America, some of which were considered by the first
International American Conference, but not finally settled, and others
which have since then grown to importance, it would seem expedient that the
various Republics constituting the Union should be invited to hold at an
early date another conference in the capital of one of the countries other
than the United States, which has already enjoyed this honor.

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

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

This exposition, which will be held in the city of Buffalo, in the near
vicinity of the great Niagara cataract, and within a day's journey of which
reside 40, 000, 000 Of our people, will be confined entirely to the Western
Hemisphere. Satisfactory assurances have already been given by the
diplomatic representatives of Great Britain, Mexico, the Central and South
American Republics, and most of the States of the United States that these
countries and States will make an unique, interesting, and instructive
exhibit, peculiarly illustrative of their material progress during the
century which is about to close.

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

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

In accordance with an act of Congress approved December 21, 1898, and under
the auspices of the Philadelphia Commercial Museum, a most interesting and
valuable exposition of products and manufactures especially adapted to
export trade was held in Philadelphia from the 14th of September to the 1st
of December, 1899. The representative character of the exhibits and the
widespread interest manifested in the special objects of the undertaking
afford renewed encouragement to those who look confidently to the steady
growth of our enlarged exportation of manufactured goods, which has been
the most remarkable fact in the economic development of the United States
in recent years. A feature of this exposition which is likely to become of
permanent and increasing utility to our industries is the collection of
samples of merchandise produced in various countries with special reference
to particular markets, providing practical object lessons to United States
manufacturers as to qualities, styles, and prices of goods such as meet the
special demands of consumers and may be exported with advantage.

In connection with the exposition an International Commercial Congress was
held, upon the invitation of the Philadelphia Commercial Museum,
transmitted by the Department of State to the various foreign Governments,
for an exchange of information and opinions with the view to the promotion
of international trade. This invitation met with general and cordial
acceptance, and the Congress, which began its sessions at the exposition on
the 13th of October proved to be of great practical importance, from the
fact that it developed a general recognition of the interdependence of
nations in trade and a most gratifying spirit of accommodation with
reference to the gradual removal of existing impediments to reciprocal
relations, without injury to the industrial interests of either party.

In response to the invitation of His Majesty, the Emperor of Russia,
delegates from twenty-six countries were assembled at The Hague on the 18th
of May, as members of a conference in the interest of peace. The commission
from the United States consisted of the Hon. Andrew D. White, the Hon. Seth
Low, the Hon. Stanford Newel, Captain Alfred T. Mahan, of the United States
Navy, Captain William Crozier, of the United States Army, and the Hon.
Frederick W. Holls, secretary. The occasion seemed to be opportune for the
serious consideration of a plan for the pacific adjustment of international
differences, a subject in which the American people have been deeply
interested for many years, and a definite project for a permanent
international tribunal was included in the instructions to the delegates of
the United States.

The final act of the conference includes conventions upon the amelioration
of the laws and customs of war on land, the adaptation to maritime warfare
of the principles of the Geneva Convention of 1864, and the extension of
judicial methods to international cases. The Convention for the Pacific
Settlement of International Conflicts embodies the leading features of the
American plan, with such modifications as were rendered necessary by the
great diversity of views and interests represented by the delegates. The
four titles of the convention provide for the maintenance of general peace,
the exercise of good offices and mediation, the formation of commissions of
inquiry, and international arbitration.

The mediation provided for by the convention is purely voluntary and
advisory, and is intended to avoid any invasion or limitation of the
sovereign rights of the adhering States. The commissions of inquiry
proposed consists of delegations to be specifically constituted for
particular purposes by means of conventions between the contesting parties,
having for their object the clear understanding of international
differences before resorting to the use of force. The provision for
arbitration contemplates the formation of a permanent tribunal before which
disputed cases may be brought for settlement by the mutual consent of the
litigants in each separate case. The advantages of such a permanent
tribunal over impromptu commissions of arbitration are conceived to be the
actual existence of a competent court, prepared to administer justice, the
greater economy resulting from a well-devised system, and the accumulated
judicial skill and experience which such a tribunal would soon possess.

While earnestly promoting the idea of establishing a permanent
international tribunal, the delegation of the United States was not
unmindful of the inconveniences which might arise from an obtrusive
exercise of mediation, and in signing the convention carefully guarded the
historic position of the United States by the following declaration:
Nothing contained in this convention shall be so construed as to require
the United States of America to depart from its traditional policy of not
intruding upon, interfering with, or entangling itself in the political
questions or policy or internal administration of any foreign state; nor
shall anything contained in the said convention be construed to imply a
relinquishment by the United. States of America of its traditional attitude
toward purely American questions. Thus interpreted, the Convention for the
Pacific Settlement of International Conflicts may be regarded as realizing
the earnest desire of great numbers of American citizens, whose deep sense
of justice, expressed in numerous resolutions and memorials, has urged them
to labor for this noble achievement. The general character of this
convention, already signed by the delegates of more than twenty sovereign
States, further commends it to the favorable action of the Senate of the
United States, whose ratification it still awaits.

Since my last annual message, and in obedience to the acts of the Congress
of April 22 and 26, 1898, the remaining volunteer force enlisted for the
Spanish War, consisting Of 34,834 regulars and 110,202 volunteers, with
over 5,000 volunteer officers, has been discharged from the military
service. Of the volunteers, 667 officers and 14,831 men were serving in the
Philippines, and 1,650 of the regulars, who were entitled to be mustered
out after the ratification of the treaty of peace. They voluntarily
remained at the front until their places could be filled by new troops.
They were returned home in the order in which they went to Manila, and are
now all of them out of the service and in the ranks of citizenship. I
recommend that the Congress provide a special medal of honor for the
volunteers, regulars, sailors, and marines on duty in the Philippines who
voluntarily remained in the service after their terms of enlistment had
expired.

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

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

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

The operations of the Army are fully presented in the report of the
Secretary of War. I cannot withhold from officers and men the highest
commendation for their soldierly conduct in trying situations, their
willing sacrifices for their country, and the integrity and ability with
which they have performed unusual and difficult duties in our island
possessions.

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

In restoring peaceful conditions, orderly rule, and civic progress in Cuba,
Puerto Rico, and, so far as practicable, in the Philippines, the
rehabilitation of the postal service has been an essential and important
part of the work. It became necessary to provide mail facilities both for
our forces of occupation and for the native population. To meet this
requirement has involved a substantial reconstruction. The existing systems
were so fragmentary, defective, and inadequate that a new and comprehensive
organization had to be created. American trained officials have been
assigned to the directing and executive positions, while natives have been
chiefly employed in making up the body of the force. In working out this
plan the merit rule has been rigorously and faithfully applied.

The appointment of Director-General of Posts of Cuba was given to an expert
who had been Chief Post-Office Inspector and Assistant Postmaster-General,
and who united large experience with administrative capacity. For the
postmastership at Havana the range of skilled and available men was
scanned, and the choice fell upon one who had been twenty years in the
service as deputy postmaster and postmaster of a large city. This principle
governed and determined the selection of the American officials sent not
only to Cuba, but to Puerto Rico and the Philippines, and they were
instructed to apply it so far as practicable in the employment of the
natives as minor postmasters and clerks. The postal system in Cuba, though
remaining under the general guidance of the Postmaster-General, was made
essentially independent. It was felt that it should not be a burden upon
the postal service of the United States, and provision was made that any
deficit in the postal revenue should be a charge upon the general revenues
of the island.

Though Puerto Rico and the Philippines hold a different relation to the
United States, yet, for convenience of administration, the same principle
of an autonomous system has been extended to them. The development of the
service in all of the islands has been rapid and successful. It has moved
forward on American lines, with free delivery, money order, and registry
systems, and has given the people mail facilities far greater and more
reliable than any they have ever before enjoyed. It is thus not only a
vital agency of industrial, social, and business progress, but an important
influence in diffusing a just understanding of the true spirit and
character of American administration.

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

The Navy has maintained the spirit and high efficiency which have always
characterized that service, and has lost none of the gallantry in heroic
action which has signalized its brilliant and glorious past. The Nation has
equal pride in its early and later achievements. Its habitual readiness for
every emergency has won the confidence and admiration of the country. The
people are interested in the continued preparation and prestige of the Navy
and will justify liberal appropriations for its maintenance and
improvement. The officers have shown peculiar adaptation for the
performance of new and delicate duties which our recent war has imposed.

It cannot be doubted that Congress will at once make necessary provision
for the armor plate for the vessels now under contract and building. Its
attention is respectfully called to the report of the Secretary of the
Navy, in which the subject is fully presented. I unite in his
recommendation that the Congress enact such special legislation as may be
necessary to enable the Department to make contracts early in the coming
year for armor of the best quality that can be obtained in this country for
the Maine, Ohio, and Missouri, and that the provision of the act of March
3, 1899, limiting the price of armor to $300 per ton be removed.

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

Our future progress and prosperity depend upon our ability to equal, if not
surpass, other nations in the enlargement and advance of science, industry,
and commerce. To invention we must turn as one of the most powerful aids to
the accomplishment of such a result. The attention of the Congress is
directed to the report of the Commissioner of Patents, in which will be
found valuable suggestions and recommendations.

On the 30th of June, 1899, the pension roll of the United States numbered
991,519. These include the pensioners of the Army and Navy in all our wars.
The number added to the rolls during the year was 40,991. The number
dropped by reason of death, remarriage, minors by legal limitation, failure
to claim within three years, and other causes, was 43, 186, and the number
of claims disallowed was 107,919. During the year 89,054 pension
certificates were issued, of which 37,077 were for new or original
pensions. The amount disbursed for army and navy pensions during the year
was $138,355,052.95, which was $1,651,461.61 less than the sum of the
appropriations.

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

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

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

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

In accordance with the act of Congress approved March 3, 1899. the
preliminary work in connection with the Twelfth Census is now fully under
way. The officers required for the proper administration of the duties
imposed have been selected. The provision for securing a proper enumeration
of the population, as well as to secure evidence of the industrial growth
of the Nation, is broader and more comprehensive than any similar
legislation in the past. The Director advises that every needful effort is
being made to push this great work to completion in the time limited by the
statute. It is believed that the Twelfth Census will emphasize our
remarkable advance in all that pertains to national progress.

Under the authority of the act of Congress approved July 7, 1898, the
commission consisting of the Secretary of the Treasury, the
Attorney-General, and the Secretary of the Interior has made an agreement
of settlement, which has had my approval, of the indebtedness to the
Government growing out of the issue of bonds to aid in the construction of
the Central Pacific and Western Pacific railroads. The agreement secures
to the Government the principal and interest of said bonds, amounting to
$58,812,715.48. There has been paid thereon $11,762,543.12, which has been
covered into the Treasury, and the remainder, payable within ten years,
with interest at the rate Of 3 per cent per annum, payable semiannually, is
secured by the deposit of an equal amount of first-mortgage bonds of the
Pacific Railway companies. The amounts paid and secured to be paid to the
Government on account of the Pacific Railroad subsidy claims are: Union
Pacific, cash - $58,448,223.75

Kansas Pacific, cash - 6,303,000.00

Central and Western Pacific, cash - 11,798,314.14

Notes, secured - 47,050,172.36

Kansas Pacific--dividends for deficiency due United States, cash -
821,897.70 -

***

State of the Union Address
William McKinley
December 3, 1900

To the Senate and House of Representatives:

At the outgoing of the old and the incoming of the new century you begin
the last session of the Fifty-sixth Congress with evidences on every hand
of individual and national prosperity and with proof of the growing
strength and increasing power for good of Republican institutions. Your
countrymen will join with you in felicitation that American liberty is more
firmly established than ever before, and that love for it and the
determination to preserve it are more universal than at any former period
of our history.

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

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

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

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

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

The telegraph and the railway spreading over their land, the steamers
plying on their waterways, the merchant and the missionary penetrating year
by year farther to the interior, became to the Chinese mind types of an
alien invasion, changing the course of their national life and fraught with
vague forebodings of disaster to their beliefs and their self-control.

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

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

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

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

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

The diplomatic representatives of the powers in Peking strove in vain to
check this movement. Protest was followed by demand and demand by renewed
protest, to be met with perfunctory edicts from the Palace and evasive and
futile assurances from the Tsung-li Yamen. The circle of the Boxer
influence narrowed about Peking, and while nominally stigmatized as
seditious, it was felt that its spirit pervaded the capital itself, that
the Imperial forces were imbued with its doctrines, and that the immediate
counselors of the Empress Dowager were in full sympathy with the
antiforeign movement.

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

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

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

In this conclusion, which I had the gratification to announce as a
completed engagement to the interested powers on March 20, 1900, I
hopefully discerned a potential factor for the abatement of the distrust of
foreign purposes which for a year past had appeared to inspire the policy
of the Imperial Government, and for the effective exertion by it of power
and authority to quell the critical antiforeign movement in the northern
provinces most immediately influenced by the Manchu sentiment.

Seeking to testify confidence in the willingness and ability of the
Imperial administration to redress the wrongs and prevent the evils we
suffered and feared, the marine guard, which had been sent to Peking in the
autumn of 1899 for the protection of the legation, was withdrawn at the
earliest practicable moment, and all pending questions were remitted, as
far as we were concerned, to the ordinary resorts of diplomatic
intercourse.

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

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

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

Still the peril increased. The legations reported the development of the
seditious movement in Peking and the need of increased provision for
defense against it. While preparations were in progress for a larger
expedition, to strengthen the legation guards and keep the railway open, an
attempt of the foreign ships to make a landing at Taku was met by a fire
from the Chinese forts. The forts were thereupon shelled by the foreign
vessels, the American admiral taking no part in the attack, on the ground
that we were not at war with China and that a hostile demonstration might
consolidate the antiforeign elements and strengthen the Boxers to oppose
the relieving column.

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

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

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

An attempt by the legation guard to recover his body was foiled by the
Chinese. Armed forces turned out against the legations. Their quarters were
surrounded and attacked. The mission compounds were abandoned, their
inmates taking refuge in the British legation, where all the other
legations and guards gathered for more effective defense. Four hundred
persons were crowded in its narrow compass. Two thousand native converts
were assembled in a nearby palace under protection of the foreigners. Lines
of defense were strengthened, trenches dug, barricades raised, and
preparations made to stand a siege, which at once began.

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

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

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

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

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

Indeed, the only communication had with the Chinese Government related to
the occasional delivery or dispatch of a telegram or to the demands of the
Tsung-li Yamen for the withdrawal of the legations to the coast under
escort. Not only are the protestations of the Chinese Government that it
protected and succored the legations positively contradicted, but
irresistible proof accumulates that the attacks upon them were made by
Imperial troops, regularly uniformed, armed, and officered, belonging to
the command of Jung Lu, the Imperial commander in chief. Decrees
encouraging the Boxers, organizing them tinder prominent Imperial officers,
provisioning them, and even granting them large sums in the name of the
Empress Dowager, are known to exist. Members of the Tsung-li Yamen who
counseled protection of the foreigners were beheaded. Even in the distant
provinces men suspected of foreign sympathy were put to death, prominent
among these being Chang Yen-hoon, formerly Chinese minister in Washington.

With the negotiation of the partial armistice of July 14, a proceeding
which was doubtless promoted by the representations of the Chinese envoy in
Washington, the way was opened for the conveyance to Mr. Conger of a test
message sent by the Secretary of State through the kind offices of Minister
Wu Ting-fang. Mr. Conger's reply, dispatched from Peking on July 18 through
the same channel, afforded to the outside world the first tidings that the
inmates of the legations were still alive and hoping for succor.

This news stimulated the preparations for a joint relief expedition in
numbers sufficient to overcome the resistance which for a month had been
organizing between Taku and the capital. Reinforcements sent by all the
co-operating Governments were constantly arriving. The United States
contingent, hastily assembled from the Philippines or dispatched from this
country, amounted to some 5,000 men, under the able command first of the
lamented Colonel Liscurn and afterwards of General Chaffee.

Toward the end of July the movement began. A severe conflict followed at
Tientsin, in which Colonel Liscurn was killed. The city was stormed and
partly destroyed. Its capture afforded the base of operations from which to
make the final advance, which began in the first days of August, the
expedition being made up of Japanese, Russian, British, and American troops
at the outset.

Another battle was fought and won at Yangtsun. Thereafter the disheartened
Chinese troops offered little show of resistance. A few days later the
important position of Ho-si-woo was taken. A rapid march brought the united
forces to the populous city of Tung Chow, which capitulated without a
contest.

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

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

Happily the acute disturbances were confined to the northern provinces. It
is a relief to recall and a pleasure to record the loyal conduct of the
viceroys and local authorities of the southern and eastern provinces. Their
efforts were continuously directed to the pacific control of the vast
populations under their rule and to the scrupulous observance of foreign
treaty rights. At critical moments they did not hesitate to memorialize the
Throne, urging the protection of the legations, the restoration of
communication, and the assertion of the Imperial authority against the
subversive elements. They maintained excellent relations with the official
representatives of foreign powers. To their kindly disposition is largely
due the success of the consuls in removing many of the missionaries from
the interior to places of safety. In this relation the action of the
consuls should be highly commended. In Shan-tung and eastern Chi-li the
task was difficult, but, thanks to their energy and the cooperation of
American and foreign naval commanders, hundreds of foreigners, including
those of other nationalities than ours, were rescued from imminent peril.

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

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

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

The Russian proposition looking to the restoration of the Imperial power in
Peking has been accepted as in full consonance with our own desires, for we
have held and hold that effective reparation for wrongs suffered and an
enduring settlement that will make their recurrence impossible can best be
brought about under an authority which the Chinese nation reverences and
obeys. While so doing we forego no jot of our undoubted right to exact
exemplary and deterrent punishment of the responsible authors and abettors
of the criminal acts whereby we and other nations have suffered grievous
injury.

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

General bases of negotiation formulated by the Government of the French
Republic have been accepted with certain reservations as to details, made
necessary by our own circumstances, but, like similar reservations by other
powers, open to discussion in the progress of the negotiations. The
disposition of the Emperor's Government to admit liability for wrongs done
to foreign Governments and their nationals, and to act upon such additional
designation of the guilty persons as the foreign ministers at Peking may be
in a position to make, gives hope of a complete settlement of all questions
involved, assuring foreign rights of residence and intercourse on terms of
equality for all the world.

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

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

The Government of Russia has put forward a suggestion, that in the event of
protracted divergence of views in regard to indemnities the matter may be
relegated to the Court of Arbitration at The Hague. I favorably incline to
this, believing that high tribunal could not fail to reach a solution no
less conducive to the stability and enlarged prosperity of China itself
than immediately beneficial to the powers.

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

While the Austro-Hungarian Government has in the many cases that have been
reported of the arrest of our naturalized citizens for alleged evasion of
military service faithfully observed the provisions of the treaty and
released such persons from military obligations, it has in some instances
expelled those whose presence in the community of their origin was asserted
to have a pernicious influence. Representations have been made against this
course whenever its adoption has appeared unduly onerous.

We have been urgently solicited by Belgium to ratify the International
Convention of June, 1899, amendatory of the previous Convention of 1890 in
respect to the regulation of the liquor trade in Africa. Compliance was
necessarily withheld, in the absence of the advice and consent of the
Senate thereto. The principle involved has the cordial sympathy of this
Government, which in the reversionary negotiations advocated more drastic
measures, and I would gladly see its extension, by international agreement,
to the restriction of the liquor traffic with all uncivilized peoples,
especially in the Western Pacific.

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

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

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

Conditions in Brazil have weighed heavily on our export trade to that
country in marked contrast to the favorable conditions upon which Brazilian
products are admitted into our markets. Urgent representations have been
made to that Government on the subject and some amelioration has been
effected. We rely upon the reciprocal justice and good will of that
Government to assure to us a further improvement in our commercial
relations.

The Convention signed May 24, 1897, for the final settlement of claims left
in abeyance upon the dissolution of the Commission of 1893, was at length
ratified by the Chilean Congress and the supplemental Commission has been
organized.

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

The insurrectionary movement which disturbed Colombia in the latter part of
1899 has been practically suppressed, although guerrillas still operate in
some departments. The executive power of that Republic changed hands in
August last by the act of Vice-President Marroquin in assuming the reins of
government during the absence of President San Clemente from the capital.
The change met with no serious opposition, and, following the precedents in
such cases, the United States minister entered into relations with the new
defacto Government on September 17.

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

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

The year of the exposition has been fruitful in occasions for displaying
the good will that exists between this country and France. This great
competition brought together from every nation the best in natural
productions, industry, science, and the arts, submitted in generous rivalry
to a judgment made all the more searching because of that rivalry. The
extraordinary increase of exportations from this country during the past
three years and the activity with which our inventions and wares had
invaded new markets caused much interest to center upon the American
exhibit, and every encouragement was offered in the way of space and
facilities to permit of its being comprehensive as a whole and complete in
every part.

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

Appeals had to be made to the patriotism of exhibitors to induce them to
incur outlays promising no immediate return. This was especially the case
where it became needful to complete an industrial sequence or illustrate a
class of processes. One manufacturer after another had to be visited and
importuned, and at times, after a promise to exhibit in a particular
section had been obtained, it would be withdrawn, owing to pressure of
trade orders, and a new quest would have to be made.

The installation of exhibits, too, encountered many obstacles and involved
unexpected cost. The exposition was far from ready at the date fixed for
its opening. The French transportation lines were congested with offered
freight. Belated goods had to be hastily installed in unfinished quarters
with whatever labor could be obtained in the prevailing confusion. Nor was
the task of the Commission lightened by the fact that, owing to the scheme
of classification adopted, it was impossible to have the entire exhibit of
any one country in the same building or more than one group of exhibits in
the same part of any building. Our installations were scattered on both
sides of the Seine and in widely remote suburbs of Paris, so that
additional assistants were needed for the work of supervision and
arrangement.

Despite all these drawbacks the contribution of the United States was not
only the largest foreign display, but was among the earliest in place and
the most orderly in arrangement. Our exhibits were shown in one hundred and
one out of one hundred and twenty-one classes, and more completely covered
the entire classification than those of any other nation. In total number
they ranked next after those of France, and the attractive form in which
they were presented secured general attention.

A criterion of the extent and success of our participation and of the
thoroughness with which our exhibits were organized is seen in the awards
granted to American exhibitors by the international jury, namely, grand
prizes, 240; gold medals, 597; silver medals, 776; bronze medals, 541, and
honorable mentions, 322--2,476 in all, being the greatest total number
given to the exhibit of any exhibiting nation, as well as the largest
number in each grade. This significant recognition of merit in competition
with the chosen exhibits of all other nations and at the hands of juries
almost wholly made up of representatives of France and other competing
countries is not only most gratifying, but is especially valuable, since it
sets us to the front in international questions of supply and demand, while
the large proportion of awards in the classes of art and artistic
manufactures afforded unexpected proof of the stimulation of national
culture by the prosperity that flows from natural productiveness joined to
industrial excellence.

Apart from the exposition several occasions for showing international good
will occurred. The inauguration in Paris of the Lafayette Monument,
presented by the school children of the United States, and the designing of
a commemorative coin by our Mint and the presentation of the first piece
struck to the President of the Republic, were marked by appropriate
ceremonies, and the Fourth of July was especially observed in the French
capital.

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

The settlement of the Samoan problem, to which I adverted in my last
message, has accomplished good results. Peace and contentment prevail in
the islands, especially in Tutuila, where a convenient administration that
has won the confidence and esteem of the kindly disposed natives has been
organized under the direction of the commander of the United States naval
station at Pago-Pago.

An Imperial meat inspection law has been enacted for Germany. While it may
simplify the inspections, it prohibits certain products heretofore
admitted. There is still great uncertainty as to whether our well-nigh
extinguished German trade in meat products can revive tinder its new
burdens. Much will depend upon regulations not yet promulgated, which we
confidently hope will be free from the discriminations which attended the
enforcement of the old statutes.

The remaining link in the new lines of direct telegraphic communication
between the United States and the German Empire has recently been
completed, affording a gratifying occasion for exchange of friendly
congratulations with the German Emperor.

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

Such consignments in British ships, by which alone direct trade is kept up
between our ports and Southern Africa, were seized in application of a
municipal law prohibiting British vessels from trading with the enemy
without regard to any contraband character of the goods, while cargoes
shipped to Delagoa Bay in neutral bottoms were arrested on the ground of
alleged destination to enemy's country. Appropriate representations on our
part resulted in the British Government agreeing to purchase outright all
such goods shown to be the actual property of American citizens, thus
closing the incident to the satisfaction of the immediately interested
parties, although, unfortunately, without a broad settlement of the
question of a neutral's right to send goods not contraband per se to a
neutral port adjacent to a belligerent area.

The work of marking certain provisional boundary points, for convenience of
administration, around the head of Lynn Canal, in accordance with the
temporary arrangement of October, 1899, Was completed by a joint survey in
July last. The modus vivendi has so far worked without friction, and the
Dominion Government has provided rules and regulations for securing to our
citizens the benefit of the reciprocal stipulation that the citizens or
subjects of either power found by that arrangement within the temporary
jurisdiction of the other shall suffer no diminution of the rights and
privileges they have hitherto enjoyed. But however necessary such an
expedient may have been to tide over the grave emergencies of the
situation, it is at best but an unsatisfactory makeshift, which should not
be suffered to delay the speedy and complete establishment of the frontier
line to which we are entitled under the Russo-American treaty for the
cession of Alaska.

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

The pending claim of R. H. May against the Guatemalan Government has been
settled by arbitration, Mr. George F. B. Jenner, British minister at
Guatemala, who was chosen as sole arbitrator, having awarded $143,750.73 in
gold to the claimant.

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

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

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

In my last message I referred at considerable length to the lynching of
five Italians at Tallulah. Notwithstanding the efforts of the Federal
Government, the production of evidence tending to inculpate the authors of
this grievous offense against our civilization, and the repeated inquests
set on foot by the authorities of the State of Louisiana, no punishments
have followed. Successive grand juries have failed to indict. The
representations of the Italian Government in the face of this miscarriage
have been most temperate and just.

Setting the principle at issue high above all consideration of merely
pecuniary indemnification, such as this Government made in the three
previous cases, Italy has solemnly invoked the pledges of existing treaty
and asked that the justice to which she is entitled shall be meted in
regard to her unfortunate countrymen in our territory with the same full
measure she herself would give to any American were his reciprocal treaty
rights contemned.

I renew the urgent recommendations I made last year that the Congress
appropriately confer upon the Federal courts jurisdiction in this class of
international cases where the ultimate responsibility of the Federal
Government may be involved, and I invite action upon the bills to
accomplish this which were introduced in the Sen. ate and House. It is
incumbent upon us to remedy the statutory omission which has led, and may
again lead, to such untoward results. I have pointed out the necessity and
the precedent for legislation of this character. Its enactment is a simple
measure of previsory justice toward the nations with which we as a
sovereign equal make treaties requiring reciprocal observance.

While the Italian Government naturally regards such action as the primary
and, indeed, the most essential element in the disposal of the Tallulah
incident, I advise that, in accordance with precedent, and in view of the
improbability of that particular case being reached by the bill now
pending, Congress make gracious provision for indemnity to the Italian
sufferers in the same form and proportion as heretofore.

In my inaugural address I referred to the general subject of lynching in
these words: Lynching must not be tolerated in a great and civilized
country like the United States; courts, not mobs, must execute the
penalties of the law. The preservation of public order, the right of
discussion, the integrity of courts, and the orderly administration of
justice must continue forever the rock of safety upon which our Government
securely rests. This I most urgently reiterate and again invite the
attention of my countrymen to this reproach upon our civilization.

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

In the treatment of the difficult Chinese problems Japan has acted in
harmonious concert with the other powers, and her generous cooperation
materially aided in the joint relief of the beleaguered legations in Peking
and in bringing about an understanding preliminary to a settlement of the
issues between the powers and China. Japan's declarations in favor of the
integrity of the Chinese Empire and the conservation of open world trade
therewith have been frank and positive. As a factor for promoting the
general interests of peace, order, and fair commerce in the Far East the
influence of Japan can hardly be overestimated.

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

Complaint was made last summer of the discriminatory enforcement of a
bubonic quarantine against Japanese on the Pacific coast and of
interference with their travel in California and Colorado under the health
laws of those States. The latter restrictions have been adjudged by a
Federal court to be unconstitutional. No recurrence of either cause of
complaint is apprehended.

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

Pursuant to the declaration of the Supreme Court that the awards of the
late joint Commission in the La Abra and Weil claims were obtained through
fraud, the sum awarded in the first case, $403,030.08, has been returned to
Mexico, and the amount of the Weil award will be returned in like manner.

A Convention indefinitely extending the time for the labors of the United
States and Mexican International (Water) Boundary Commission has been
signed.

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

The Administrative Council of the Permanent Court of Arbitration has been
organized and has adopted rules of order and a constitution for the
International Arbitration Bureau. In accordance with Article XXIII of the
Convention providing for the appointment by each signatory power of persons
of known competency in questions of international law as arbitrators, I
have appointed as members of this Court, Hon. Benjamin Harrison, of
Indiana, ex-President of the United States; Hon. Melville W. Fuller, of
Illinois, Chief justice of the United States; Hon. John W. Griggs, of New
Jersey, Attorney General of the United States; and Hon. George Gray, of
Delaware, a judge of the circuit court of the United States.

As an incident of the brief revolution in the Mosquito district of
Nicaragua early in 1899 the insurgents forcibly collected from American
merchants duties upon imports. On the restoration of order the Nicaraguan
authorities demanded a second payment of such duties on the ground that
they were due to the titular Government and that their diversion had aided
the revolt.

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

Menacing differences between several of the Central American States have
been accommodated, our ministers rendering good offices toward an
understanding.

The all-important matter of an interoceanic canal has assumed a new phase.
Adhering to its refusal to reopen the question of the forfeiture of the
contract of the Maritime Canal Company, which was terminated for alleged
nonexecution in October, 1899, the Government of Nicaragua has since
supplemented that action by declaring the so styled Eyre-Cragin option void
for nonpayment of the stipulated advance. Protests in relation to these
acts have been filed in the State Department and are under consideration.
Deeming itself relieved from existing engagements, the Nicaraguan
Government shows a disposition to deal freely with the canal question
either in the way of negotiations with the United States or by taking
measures to promote the waterway.

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

I commend to the early attention of the Senate the Convention with Great
Britain to facilitate the construction of such a canal and to remove any
objection which might arise out of the Convention commonly called the
Clayton-Bulwer Treaty.

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

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

Another illustration of the policy of this Government to refer
international disputes to impartial arbitration is seen in the agreement
reached with Russia to submit the claims on behalf of American sealing
vessels seized in Bering Sea to determination by Mr. T. M. C. Asser, a
distinguished statesman and jurist of the Netherlands.

Thanks are due to the Imperial Russian Government for the kindly aid
rendered by its authorities in eastern Siberia to American missionaries
fleeing from Manchuria.

Satisfactory progress has been made toward the conclusion of a general
treaty of friendship and intercourse with Spain, in replacement of the old
treaty, which passed into abeyance by reason of the late war. A new
convention of extradition is approaching completion, and I should be much
pleased were a commercial arrangement to follow. I feel that we should not
suffer to pass any opportunity to reaffirm the cordial ties that existed
between us and Spain from the time of our earliest independence, and to
enhance the mutual benefits of that commercial intercourse which is natural
between the two countries.

By the terms of the Treaty of Peace the line bounding the ceded Philippine
group in the southwest failed to include several small islands lying
westward of the Sulus, which have always been recognized as under Spanish
control. The occupation of Sibutd and Cagayan Sulu by our naval forces
elicited a claim on the part of Spain, the essential equity of which could
not be gainsaid. In order to cure the defect of the treaty by removing all
possible ground of future misunderstanding respecting the interpretation of
its third article, I directed the negotiation of a supplementary treaty,
which will be forthwith laid before the Senate, whereby Spain quits all
title and claim of title to the islands named as well as to any and all
islands belonging to the Philippine Archipelago lying outside the lines
described in said third article, and agrees that all such islands shall be
comprehended in the cession of the archipelago as fully as if they had been
expressly included within those lines. In consideration of this cession the
United States is to pay to Spain the sum of $100,000.

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

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

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

The failure of action by the Senate at its last session upon the commercial
conventions then submitted for its consideration and approval, although
caused by the great pressure of other legislative business, has caused much
disappointment to the agricultural and industrial interests of the country,
which hoped to profit by their provisions. The conventional periods for
their ratification having expired, it became necessary to sign additional
articles extending the time for that purpose. This was requested on our
part, and the other Governments interested have concurred with the
exception of one convention, in respect to which no formal reply has been
received.

Since my last communication to the Congress on this subject special
commercial agreements under the third section of the tariff act have been
proclaimed with Portugal, with Italy, and with Germany. Commercial
conventions tinder the general limitations of the fourth section of the
same act have been concluded with Nicaragua, with Ecuador, with the
Dominican Republic, with Great Britain on behalf of the island of Trinidad,
and with Denmark on behalf of the island of St. Croix. These will be early
communicated to the Senate. Negotiations with other Governments are in
progress for the improvement and security of our commercial relations.

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

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

The exposition of the resources and products of the Western Hemisphere to
be held at Buffalo next year promises important results not only for the
United States but for the other participating countries. It is gratifying
that the Latin-American States have evinced the liveliest interest, and the
fact that an International American Congress will be held in the City of
Mexico while the exposition is in progress encourages the hope of a larger
display at Buffalo than might otherwise be practicable. The work of
preparing an exhibit of our national resources is making satisfactory
progress under the direction of different officials of the Federal
Government, and the various States of the Union have shown a disposition
toward the most liberal participation in the enterprise.

The Bureau of the American Republics continues to discharge, with the
happiest results, the important work of promoting cordial relations between
the United States and the Latin-American countries, all of which are now
active members of the International Union. The Bureau has been instrumental
in bringing about the agreement for another International American
Congress, which is to meet in the City of Mexico in October, 1901. The
Bureau's future for another term of ten years is assured by the
international compact, but the congress will doubtless have much to do with
shaping new lines of work and a general policy. Its usefulness to the
interests of Latin-American trade is widely appreciated and shows a
gratifying development.

The practical utility of the consular service in obtaining a wide range of
information as to the industries and commerce of other countries and the
opportunities thereby afforded for introducing the sale of our goods have
kept steadily in advance of the notable expansion of our foreign trade, and
abundant evidence has been furnished, both at home and abroad, of the fact
that the Consular Reports, including many from our diplomatic
representatives, have to a considerable extent pointed out ways and means
of disposing of a great variety of manufactured goods which otherwise might
not have found sale abroad.

Testimony of foreign observers to the commercial efficiency of the consular
corps seems to be conclusive, and our own manufacturers and exporters
highly appreciate the value of the services rendered not only in the
printed reports but also in the individual efforts of consular officers to
promote American trade. An increasing part of the work of the Bureau of
Foreign Commerce, whose primary duty it is to compile and print the
reports, is to answer inquiries from trade organizations, business houses,
etc., as to conditions in various parts of the world, and, notwithstanding
the smallness of the force employed, the work has been so systematized that
responses are made with such promptitude and accuracy as to elicit
flattering encomiums. The experiment of printing the Consular Reports daily
for immediate use by trade bodies, exporters, and the press, which was
begun in January, 1898, continues to give general satisfaction.

It is gratifying to be able to state that the surplus revenues for the
fiscal year ended June 30, 1900, were $79,527,060.18. For the six preceding
years we had only deficits, the aggregate of which from 1894 to 1899,
inclusive, amounted to $283,022,991.14. The receipts for the year from all
sources, exclusive of postal revenues, aggregated $567,240,851.89, and
expenditures for all purposes, except for the administration of the postal
department, aggregated $487,713,791.71. The receipts from customs were
$233,164,871.16, an increase over the preceding year Of $27,036,389.41. The
receipts from internal revenue were $295,327,926.76, an increase Of
$21,890,765.25 over 1899. The receipts from miscellaneous sources were
$38,748,053.97, as against $36,394,976.92 for the previous year.

It is gratifying also to note that during the year a considerable reduction
is shown in the expenditures of the Government. The War Department
expenditures for the fiscal year 1900 were $134,774,767.78, a reduction of
$95,066,486.69 over those of 1899. In the Navy Department the expenditures
were $55,953,077.72 for the year 1900, as against $63,942,104.25 for the
preceding year, a decrease of $7,989,026.53. In the expenditures on account
of Indians there was a decrease in 1900 over 1899 Of $2,630,604.38; and in
the civil and miscellaneous expenses for 1900 there was a reduction Of
$13,418,065.74.

Because of the excess of revenues over expenditures the Secretary of the
Treasury was enabled to apply bonds and other securities to the sinking
fund to the amount Of $56,544,556.06. The details of the sinking fund are
set forth in the report of the Secretary of the Treasury, to which I invite
attention. The Secretary of the Treasury estimates that the receipts for
the current fiscal year will aggregate $580,000,000 and the expenditures
$500,000,000, leaving an excess of revenues over expenditures of
$80,000,000. The present condition of the Treasury is one of undoubted
strength. The available cash balance November 30 was $139,303,794.50. Under
the form of statement prior to the financial law of March 14 last there
would have been included in the statement of available cash gold coin and
bullion held for the redemption of United States notes.

If this form were pursued, the cash balance including the present gold
reserve of $150,000,000, would be $289,303,794.50. Such balance November
30, 1899, was $296,495,301.55. In the general fund, which is wholly
separate from the reserve and trust funds, there was on November 30,
$70,090,073.15 in gold coin and bullion, to which should be added
$22,957,300 in gold certificates subject to issue, against which there is
held in the Division of Redemption gold coin and bullion, making a total
holding of free gold amounting to $93,047,373.15.

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

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

The law of March 14, 1900, provided for refunding into 2 per cent
thirty-year bonds, payable, principal and interest, in gold coin of the
present standard value, that portion of the public debt represented by the
3 per cent bonds of 1908, the 4 percents Of 1907, and the 5 percents of
1904, Of which there was outstanding at the date of said law $839,149,930,
The holders of the old bonds presented them for exchange between March 14
and November 30 to the amount of $364,943,750. The net saving to the
Government on these transactions aggregates $9,106,166.

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

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

It is worthy of mention that the greater number of banks being organized
under the new law are in sections where the need of banking facilities has
been most pronounced. Iowa stands first, with 30 banks of the smaller
class, while Texas, Oklahoma, Indian Territory, and the middle and western
sections of the country have also availed themselves largely of the
privileges under the new law.

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

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

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

The growth of manufactures in the United States is evidenced by the fact
that exports of manufactured products largely exceed those of any previous
year, their value for 1900 being $433,851,756, against $339,592,146 in
1899, an increase of 28 per cent.

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

The imports for the year amounted to $849,941,184, an increase over 1899 of
$152,792,695. This increase is largely in materials for manufacture, and is
in response to the rapid development of manufacturing in the United States.
While there was imported for use in manufactures in 1900 material to the
value of $79,768,972 in excess of 1899, it is reassuring to observe that
there is a tendency toward decrease in the importation of articles
manufactured ready for consumption, which in 1900 formed 15.17 per cent of
the total imports, against 15.54 per cent in 1899 and 21.09 per cent in
1896.

I recommend that the Congress at its present session reduce the
internal-revenue taxes imposed to meet the expenses of the war with Spain.
in the sum of thirty millions of dollars. This reduction should be secured
by the remission of those taxes which experience has shown to be the most
burdensome to the industries of the people.

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

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

Besides realizing a proper national aspiration this will mean the
establishment and healthy growth along all our coasts of a distinctive
national industry, expanding the field for the profitable employment of
labor and capital. It will increase the transportation facilities and
reduce freight charges on the vast volume of products brought from the
interior to the seaboard for export, and will strengthen an arm of the
national defense upon which the founders of the Government and their
successors have relied. In again urging immediate action by the Congress on
measures to promote American shipping and foreign trade, I direct attention
to the recommendations on the subject in previous messages, and
particularly to the opinion expressed in the message of 1899: I am
satisfied the judgment of the country favors the policy of aid to our
merchant marine, which will broaden our commerce and markets and upbuild
our sea-carrying capacity for the products of agriculture and manufacture,
which, with the increase of our Navy, mean more work and wages to our
countrymen, as well as a safeguard to American interests in every part of
the world. The attention of the Congress is invited to the recommendation
of the Secretary of the Treasury in his annual report for legislation in
behalf of the Revenue-Cutter Service, and favorable action is urged.

In my last annual message to the Congress I called attention to the
necessity for early action to remedy such evils as might be found to exist
in connection with combinations of capital organized into trusts, and again
invite attention to my discussion of the subject at that time, which
concluded with these words: It is apparent that uniformity of legislation
upon this subject in the several States is much to be desired. It is to be
hoped that such uniformity, founded in a wise and just discrimination
between what is injurious and what is useful and necessary in business
operations, may be obtained, and that means may be found for the Congress,
within the limitations of its constitutional power, so to supplement an
effective code of State legislation as to make a complete system of laws
throughout the United States adequate to compel a general observance of the
salutary rules to which I have referred.

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

In my last annual message I dwelt at some length upon the condition of
affairs in the Philippines. While seeking to impress upon you that the
grave responsibility of the future government of those islands rests with
the Congress of the United States, I abstained from recommending at that
time a specific and final form of government for the territory actually
held by the United States forces and in which as long as insurrection
continues the military arm must necessarily be supreme. I stated my
purpose, until the Congress shall have made the formal expression of its
will, to use the authority vested in me by the Constitution and the
statutes to uphold the sovereignty of the United States in those distant
islands as in all other places where our flag rightfully floats, placing,
to that end, at the disposal of the army and navy all the means which the
liberality of the Congress and the people have provided. No contrary
expression of the will of the Congress having been made, I have steadfastly
pursued the purpose so declared, employing the civil arm as well toward the
accomplishment of pacification and the institution of local governments
within the lines of authority and law.

Progress in the hoped-for direction has been favorable. Our forces have
successfully controlled the greater part of the islands, overcoming the
organized forces of the insurgents and carrying order and administrative
regularity to all quarters. What opposition remains is for the most part
scattered, obeying no concerted plan of strategic action, operating only by
the methods common to the traditions of guerrilla warfare, which, while
ineffective to alter the general control now established, are still
sufficient to beget insecurity among the populations that have felt the
good results of our control and thus delay the conferment upon them of the
fuller measures of local self-government, of education, and of industrial
and agricultural development which we stand ready to give to them.

By the spring of this year the effective opposition of the dissatisfied
Tagals to the authority of the United States was virtually ended, thus
opening the door for the extension of a stable administration over much of
the territory of the Archipelago. Desiring to bring this about, I appointed
in March last a civil Commission composed of the Hon. William H. Taft, of
Ohio; Prof. Dean C. Worcester, of Michigan; the Hon. Luke I. Wright, of
Tennessee; the Hon. Henry C. Ide, of Vermont, and Prof. Bernard Moses, of
California. The aims of their mission and the scope of their authority are
clearly set forth in my instructions of April 7, 1900, addressed to the
Secretary of War to be transmitted to them:

In the message transmitted to the Congress on the 5th of December, 1899, I
said, speaking of the Philippine Islands: "As long as the insurrection
continues the military arm must necessarily be supreme. But there is no
reason why steps should not be taken from time to time to inaugurate
governments essentially popular in their form as fast as territory is held
and controlled by our troops. To this end I am considering the advisability
of the return of the Commission, or such of the members thereof as can be
secured, to aid the existing authorities and facilitate this work
throughout the islands."

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

The Commissioners named will meet and act as a board, and the Hon. William
H. Taft t is designated as president of the board. It is probable that the
transfer of authority from military commanders to civil officers will be
gradual and will occupy a considerable period. Its successful
accomplishment and the maintenance of peace and order in the meantime will
require the most perfect co-operation between the civil and military
authorities in the islands, and both should be directed during the
transition period by the same Executive Department. The Commission will
therefore report to the Secretary of War, and all their action will be
subject to your approval and control.

You will instruct the Commission to proceed to the city of Manila, where
they will make their principal office, and to communicate with the Military
Governor of the Philippine Islands, whom you will at the same time direct
to render to them every assistance within his power in the performance of
their duties. Without hampering them by too specific instructions, they
should in general be enjoined, after making themselves familiar with the
conditions and needs of the country, to devote their attention in the first
instance to the establishment of municipal governments, in which the
natives of the islands, both in the cities and in the rural communities,
shall be afforded the opportunity to manage their own local affairs to the
fullest extent of which they are capable and subject to the least degree of
supervision and control which a careful study of their capacities and
observation of the workings of native control show to be consistent with
the maintenance of law, order, and loyalty.

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

Beginning with the 1st day of September, 1900, the authority to exercise,
subject to my approval, through the Secretary of War, that part of the
power of government in the Philippine Islands which is of a legislative
nature is to be transferred from the Military Governor of the islands to
this Commission, to be thereafter exercised by them in the place and stead
of the Military Governor, under such rules and regulations as you shall
prescribe, until the establishment of the civil central government for the
islands contemplated in the last foregoing paragraph, or until Congress
shall otherwise provide. Exercise of this legislative authority will
include the making of rules and orders, having the effect of law, for the
raising of revenue by taxes, customs duties, and imposts; the appropriation
and expenditure of public funds of the islands; the establishment of an
educational system throughout the islands; the establishment of a system
to secure an efficient civil service; the organization and establishment of
courts; the organization and establishment of municipal and departmental
governments, and all other matters of a civil nature for which the Military
Governor is now competent to provide by rules or orders of a legislative
character.

The Commission will also have power during the same period to appoint to
office such officers under the judicial, educational, and civil-service
systems and in the municipal and departmental governments as shall be
provided for. Until the complete transfer of control the Military Governor
will remain the chief executive head of the government of the islands, and
will exercise the executive authority now possessed by him and not herein
expressly assigned to the Commission, subject, however, to the rules and
orders enacted by the Commission in the exercise of the legislative powers
conferred upon them. In the meantime the municipal and departmental
governments will continue to report to the Military Governor and be subject
to his administrative supervision and control, under your direction, but
that supervision and control will be confined within the narrowest limits
consistent with the requirement that the powers of government in the
municipalities and departments shall be honestly and effectively exercised
and that law and order and individual freedom shall be maintained.

All legislative rules and orders, establishments of government, and
appointments to office by the Commission will take effect immediately, or
at such times as they shall designate, subject to your approval and action
upon the coming in of the Commission's reports, which are to be made from
time to time as their action is taken. Wherever civil governments are
constituted under the direction of the Commission such military posts,
garrisons, and forces will be continued for the suppression of insurrection
and brigandage and the maintenance of law and order as the Military
Commander shall deem requisite, and the military forces shall be at all
times subject, under his orders, to the call of the civil authorities for
the maintenance of law and order and the enforcement of their authority.

In the establishment of municipal governments the Commission will take as
the basis of their work the governments established by the Military
Governor under his order of August 8, 1899. and under the report of the
board constituted by the Military Governor by his order of January 29,
1900, to formulate and report a plan of municipal government, of which His
Honor Cayetano Arellano, President of the Audiencia, was chairman, and they
will give to the conclusions of that board the weight and consideration
which the high character and distinguished abilities of its members
justify.

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

In the distribution of powers among the governments organized by the
Commission, the presumption is always to be in favor of the smaller
subdivision, so that all the powers which can properly be exercised by the
municipal government shall be vested in that government, and all the powers
of a more general character which can be exercised by the departmental
government shall be vested in that government, and so that in the
governmental system, which is the result of the process, the central
government of the islands, following the example of the distribution of the
powers between the States and the National Government of the United States,
shall have no direct administration except of matters of purely general
concern, and shall have only such supervision and control over local
governments as may be necessary to secure and enforce faithful and
efficient administration by local officers.

The many Different degrees of civilization and varieties of custom and
capacity among the people of the different islands preclude very definite
instruction as to the part which the people shall take in the selection of
their own officers; but these general rules are to be observed: That in all
cases the municipal officers, who administer the local affairs of the
people, are to be selected by the people, and that wherever officers of
more extended jurisdiction are to be selected in any way, natives of the
islands are to be preferred, and if they can be found competent and willing
to perform the duties, they are to receive the offices in preference to any
others.

It will be necessary to fill some offices for the present with Americans
which after a time may well be filled by natives of the islands. As soon as
practicable a system for ascertaining the merit and fitness of candidates
for civil office should be put in force. An indispensable qualification for
all offices and positions of trust and authority in the islands must be
absolute and unconditional loyalty to the United States, and absolute and
unhampered authority and power to remove and punish any officer deviating
from that standard must at all times be retained in the hands of the
central authority of the islands.

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

At the same time the Commission should bear in mind, and the people of the
islands should be made plainly to understand, that there are certain great
principles of government which have been made the basis of our governmental
system which we deem essential to the rule of law and the maintenance of
individual freedom, and of which they have, unfortunately, been denied the
experience possessed by us; that there are also certain practical rules of
government which we have found to be essential to the preservation of these
great principles of liberty and law, and that these principles and these
rules of government must be established and maintained in their islands for
the sake of their liberty and happiness, however much they may conflict
with the customs or laws of procedure with which they are familiar.

It is evident that the most enlightened thought of the Philippine Islands
fully appreciates the importance of these principles and rules, and they
will inevitably within a short time command universal assent. Upon every
division and branch of the government of the Philippines, therefore, must
be imposed these inviolable rules:

That no person shall be deprived of life, liberty, or property without due
process of law; that private property shall not be taken for public use
without just compensation; that in all criminal prosecutions the accused
shall enjoy the right to a speedy and public trial, to be informed of the
nature and cause of the accusation, to be confronted with the witnesses
against him, to have compulsory process for obtaining witnesses in his
favor, and to have the assistance of counsel for his defense; that
excessive bail shall not be required, nor excessive fines imposed, nor
cruel and unusual punishment inflicted; that no person shall be put twice
in jeopardy for the same offense, or be compelled in any criminal case to
be a witness against himself; that the right to be secure against
unreasonable searches and seizures shall not be violated; that neither
slavery nor involuntary servitude shall exist except as a punishment for
crime; that no bill of attainder or ex-post facto law shall be passed; that
no law shall be passed abridging the freedom of speech or of the press, or
the rights of the people to peaceably assemble and petition the Government
for a redress of grievances; that no law shall be made respecting an
establishment of religion, or prohibiting the free exercise thereof, and
that the free exercise and enjoyment of religious profession and worship
without discrimination or preference shall forever be allowed.

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

That the provision of the Treaty of Paris pledging the United States to the
protection of all rights of property in the islands, and as well the
principle of our own Government which prohibits the taking of private
property without due process of law, shall not be violated; that the
welfare of the people of the islands, which should be a paramount
consideration, shall be attained consistently with this rule of property
right; that if it becomes necessary for the public interest of the people
of the islands to dispose of claims to property which the Commission finds
to be not lawfully acquired and held disposition shall be made thereof by
due legal procedure, in which there shall be full opportunity for fair and
impartial hearing and judgment; that if the same public interests require
the extinguishment of property rights lawfully acquired and held due
compensation shall be made out of the public treasury therefore; that no
form of religion and no minister of religion shall be forced upon any
community or upon any citizen of the islands; that, upon the other hand, no
minister of religion shall be interfered with or molested in following his
calling, and that the separation between State and Church shall be real,
entire, and absolute.

It will be the duty of the Commission to promote and extend, and, as they
find occasion, to improve the system of education already inaugurated by
the military authorities. In doing this they should regard as of first
importance the extension of a system of primary education which shall be
free to all, and which shall tend to fit the people for the duties of
citizenship and for the ordinary avocations of a civilized community. This
instruction should be given in the first instance in every part of the
islands in the language of the people. In view of the great number of
languages spoken by the different tribes, it is especially important to the
prosperity of the islands that a common medium of communication may be
established, and it is obviously desirable that this medium should be the
English language. Especial attention should be at once given to affording
full opportunity to all the people of the islands to acquire the use of the
English language.

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

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

In dealing with the uncivilized tribes of the islands the Commission should
adopt the same course followed by Congress in permitting the tribes of our
North American Indians to maintain their tribal organization and
government, and under which many of those tribes are now living in peace
and contentment, surrounded by a civilization to which they are unable or
unwilling to conform. Such tribal governments should, however, be subjected
to wise and firm regulation, and, without undue or petty interference,
constant and active effort should be exercised to prevent barbarous
practices and introduce civilized customs.

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

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

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

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

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

This Commission, composed of eminent citizens representing the diverse
geographical and political interests of the country, and bringing to their
task the ripe fruits of long and intelligent service in educational,
administrative, and judicial careers, made great progress from the outset.
As early as August 21, 1900, it submitted a preliminary report, which will
be laid before the Congress, and from which it appears that already the
good effects of returning order are felt; that business, interrupted by
hostilities, is improving as peace extends; that a larger area is under
sugar cultivation than ever before; that the customs revenues are greater
than at any time during the Spanish rule; that economy and efficiency in
the military administration have created a surplus fund of $6,000,000,
available for needed public improvements; that a stringent civil-service
law is in preparation; that railroad communications are expanding, opening
up rich districts, and that a comprehensive scheme of education is being
organized.

Later reports from the Commission show yet more encouraging advance toward
insuring the benefits of liberty and good government to the Filipinos, in
the interest of humanity and with the aim of building up an enduring,
self-supporting, and self-administering community in those far eastern
seas. I would impress upon the Congress that whatever legislation may be
enacted in respect to the Philippine Islands should be along these generous
lines. The fortune of war has thrown upon this nation an unsought trust
which should be unselfishly discharged, and devolved upon this Government a
moral as well as material responsibility toward these millions whom we have
freed from an oppressive yoke.

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

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

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

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

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

On the 25th of July, 1900, I directed that a call be issued for an election
in Cuba for members of a constitutional convention to frame a constitution
as a basis for a stable and independent government in the island. In
pursuance thereof the Military Governor issued the following instructions:
Whereas the Congress of the United States, by its joint resolution of April
20, 1898, declared:

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

"That the United States hereby disclaims any disposition or intention to
exercise sovereignty, jurisdiction, or control over said island except for
the pacification thereof, and asserts its determination, when that is
accomplished, to leave the government and control of the island to its
people;"

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

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

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

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

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

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

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

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

The fundamental distinction between true representative government and
dictatorship is that in the former every representative of the people, in
whatever office, confines himself strictly within the limits of his defined
powers. Without such restraint there can be no free constitutional
government.

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

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

The present strength of the Army is 100,000 men--65,000 regulars and
35,000 volunteers. Under the act of March 2, 1899, on the 30th of June next
the present volunteer force will be discharged and the Regular Army will be
reduced to 2,447 officers and 29,025 enlisted men.

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

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

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

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

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

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

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

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

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

I renew the recommendation made in my last annual message that the Congress
provide a special medal of honor for the volunteers, regulars, sailors, and
marines on duty in the Philippines who voluntarily remained in the service
after their terms of enlistment had expired.

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

The Army cannot be too highly commended for its faithful and effective
service in active military operations in the field and the difficult work
of civil administration.

The continued and rapid growth of the postal service is a sure index of the
great and increasing business activity of the country. Its most striking
new development is the extension of rural free delivery. This has come
almost wholly within the last year. At the beginning of the fiscal year
1899, 1900 the number of routes in operation was only 391, and most of
these had been running less than twelve months. On the 15th of November,
1900, the number had increased to 2,614, reaching into forty-four States
and Territories, and serving a population of 1,801,524. The number of
applications now pending and awaiting action nearly equals all those
granted up to the present time, and by the close of the current fiscal year
about 4,000 routes will have been established, providing for the daily
delivery of mails at the scattered homes of about three and a half millions
of rural population.

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

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

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

I approve of the recommendations of the Secretary for new vessels and for
additional officers and men which the required increase of the Navy makes
necessary. I commend to the favorable action of the Congress the measure
now pending for the erection of a statue to the memory of the late Admiral
David D. Porter. I commend also the establishment of a national naval
reserve and of the grade of vice-admiral. Provision should be made, as
recommended by the Secretary, for suitable rewards for special merit. Many
officers who rendered the most distinguished service during the recent war
with Spain have received in return no recognition from the Congress.

The total area of public lands as given by the Secretary of the Interior is
approximately 1,071,881,662 acres, of which 917,135,880 acres are
undisposed of and 154,745,782 acres have been reserved for various
purposes. The public lands disposed of during the year amount to
13,453,887.96 acres, including 62,423.09 acres of Indian lands, an increase
Of 4,271,474.80 over the preceding year. The total receipts from the sale
of public lands during the fiscal year were $4,379,758.10, an increase of
$1,309,620.76 over the preceding year.

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

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

At the end of the fiscal year there were on the pension roll 993,529 names,
a net increase Of 2,010 over the fiscal year 1899. The number added to the
rolls during the year was 45,344. The amount disbursed for Army pensions
during the year was $134,700,597.24 and for Navy pensions $3,761,533.41, a
total of $138,462,130.65, leaving an unexpended balance of $5,542,768.25 to
be covered into the Treasury, which shows an increase over the previous
year's expenditure Of $107,077.70. There were 684 names added to the rolls
during the year by special acts passed at the first session of the
Fifty-sixth Congress.

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

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

There were 26,540 letters patent granted, including reissues and designs,
during the fiscal year ended June 30, 1900; 1,660 trademarks, 682 labels,
and 93 prints registered. The number of patents which expired was 19,988.
The total receipts for patents were $1,358,228.35. The expenditures were
$1,247,827.58, showing a surplus Of $110,400.77

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

Much interesting information is given in the report of the Governor of
Hawaii as to the progress and development of the islands during the period
from July 7, 1898, the date of the approval of the joint resolution of the
Congress providing for their annexation, up to April 30, 1900, the date of
the approval of the act providing a government for the Territory, and
thereafter.

The last Hawaiian census, taken in the year 1896, gives a total population
of 109,020, Of Which 31,019 were native Hawaiians. The number of Americans
reported was 8,485. The results of the Federal census, taken this year,
show the islands to have a total population Of 154,001, showing an increase
over that reported in 1896 of 44,981, or 41.2 per cent.

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

In the Territorial act of April 30, 1900, section 7 of said act repeals
Chapter 34 Of the Civil Laws of Hawaii whereby the Government was to assist
in encouraging and developing the agricultural resources of the Republic,
especially irrigation. The Governor of Hawaii recommends legislation
looking to the development of such water supply as may exist on the public
lands, with a view of promoting land settlement. The earnest consideration
of the Congress is invited to this important recommendation and others, as
embodied in the report of the Secretary of the Interior.

The Director of the Census states that the work in connection with the
Twelfth Census is progressing favorably. This national undertaking, ordered
by the Congress each decade, has finally resulted in the collection of an
aggregation of statistical facts to determine the industrial growth of the
country, its manufacturing and mechanical resources, its richness in mines
and forests, the number of its agriculturists, their farms and products,
its educational and religious opportunities, as well as questions
pertaining to sociological conditions.

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

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

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

The Director, while confident of his ability to complete the different
branches of the undertaking in the allotted time, finds himself embarrassed
by the lack of a trained force properly equipped for statistical work, thus
raising the question whether in the interest of economy and a thorough
execution of the census work there should not be retained in the Government
employ a certain number of experts not only to aid in the preliminary
organization prior to the taking of the decennial census, but in addition
to have the advantage in the field and office work of the Bureau of trained
assistants to facilitate the early completion of this enormous
undertaking.

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

The Department of Agriculture has been extending its work during the past
year, reaching farther for new varieties of seeds and plants; co-operating
more fully with the States and Territories in research along useful lines;
making progress in meteorological work relating to lines of wireless
telegraphy and forecasts for ocean-going vessels; continuing inquiry as to
animal disease; looking into the extent and character of food adulteration;
outlining plans for the care, preservation, and intelligent harvesting of
our woodlands; studying soils that producers may cultivate with better
knowledge of conditions, and helping to clothe desert places with grasses
suitable to our and regions. Our island possessions are being considered
that their peoples may be helped to produce the tropical products now so
extensively brought into the United States. Inquiry into methods of
improving our roads has been active during the year; help has been given to
many localities, and scientific investigation of material in the States and
Territories has been inaugurated. Irrigation problems in our semiarid
regions are receiving careful and increased consideration.

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

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

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

That there may be secured the best service possible in the Philippine
Islands, I have issued, under date of November 30, 1900, the following
order: The United States Civil Service Commission is directed to render
such assistance as may be practicable to the Civil Service Board, created
under the act of the United States Philippine Commission, for the
establishment and maintenance of an honest and efficient civil service in
the Philippine Islands, and for that purpose to conduct examinations for
the civil service of the Philippine islands, upon the request of the Civil
Service Board of said islands, under such regulations as may be agreed upon
by the said Board and the said United States Civil Service Commission. The
Civil Service Commission is greatly embarrassed in its work for want of an
adequate permanent force for clerical and other assistance. Its needs are
fully set forth in its report. I invite attention to the report, and
especially urge upon the Congress that this important bureau of the public
service, which passes upon the qualifications and character of so large a
number of the officers and employees of the Government, should be supported
by all needed appropriations to secure promptness and efficiency.

I am very much impressed with the statement made by the heads of all the
Departments of the urgent necessity of a hall of public records. In every
departmental building in Washington, so far as I am informed, the space for
official records is not only exhausted, but the walls of rooms are lined
with shelves, the middle floor space of many rooms is filled with the
cases, and garrets and basements, which were never intended and are
unfitted for their accommodation, are crowded with them. Aside from the
inconvenience there is great danger, not only from fire, but from the
weight of these records upon timbers not intended for their support. There
should be a separate building especially designed for the purpose of
receiving and preserving the annually accumulating archives of the several
Executive Departments. Such a hall need not be a costly structure, but
should be so arranged as to admit of enlargement from time to time. I
urgently recommend that the Congress take early action in this matter.

I transmit to the Congress a resolution adopted at a recent meeting of the
American Bar Association concerning the proposed celebration of John
Marshall Day, February 4, 1901. Fitting exercises have been arranged, and
it is earnestly desired by the committee that the Congress may participate
in this movement to honor the memory of the great jurist.

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

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

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

In our great prosperity we must guard against the danger it invites of
extravagance in Government expenditures and appropriations; and the chosen
representatives of the people will, I doubt not, furnish an example in
their legislation of that wise economy which in a season of plenty husbands
for the future. In this era of great business activity and opportunity
caution is not untimely. It will not abate, but strengthen, confidence. It
will not retard, but promote, legitimate industrial and commercial
expansion. Our growing power brings with it temptations and perils
requiring constant vigilance to avoid. It must not be used to invite
conflicts, nor for oppression, but for the more effective maintenance of
those principles of equality and justice upon which our institutions and
happiness depend. Let us keep always in mind that the foundation of our
Government is liberty; its superstructure peace.












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