Democratic Sentinel, Volume 1, Number 43, Rensselaer, Jasper County, 7 December 1877 — THE MESSAGE [ARTICLE]

THE MESSAGE

Annual Communication of the President to Congress.

The Southern, Civil-Service, Financial and Other Questions Discussed, *

Felkiw-Oitizecs of the Senate and House of Representatives : With great gratitude to the Bountiful Giver of All Goud, I congratulate you that, at the beginning of jour first regular session, you find our country blessed with health and peaoe, and abundant harvests, ar.d with encouraging proapects of an early return of general prosperity. The Southern Policy. To complete and make permanent the pacification cf Ih'i country continues to be, and, until it is aocomp’hired, must remain the most Important of all our national interests. The earnest purpose of good citizens generally to unite their efforts in those endeavors is evident. It found decided expression in the resolutions announced in 1878, by the national conventions of the leading political parlies of the country. There was a widespread apprehension that the momentous results in our progress as a nation, marked by the recent amendments to the constitution, were In imminent jeojiardy; that the good understanding which prompted their adoption in the interest of a loyal

devotion to the general welfare might provo a barren truce, and that the sections of the country, once engaged in civil strife, miaht be again almost as widely severed and disunited bb they were when arrayed in arms against each other. Tho course to be pursued which, in my Judgment, seemed the wisest, in the presence of this emergency, was plainly indicated in the inaugural address. It pointed to the time, which all our people deßire to see. when a genuine love of our whole country and of all that concerns its true welfare shall supplant the destructive forces of mutual animosity of the races and of sectional hostility. Opinions have differed widely as to tho measures best calculated to secure this great end. This was to be expected. The measures adopted by the administration have been subjected to severe and varied criticisms. Any course whatever which might have been entered upon would certainly have encountered distrust and opposition. These measures were, in my Judgment, such as were most in harmony with the constitution and with the genius of our people, and best adapted, under all circumstances, to attain the end in view. Beneficent results already apparent provo that these endeavors are not to be regarded as a mere experiment, and should sustain and encourage us In our efforts already in the brief period which has elapsed. The immediate effectiveness, no less tiian the justice, of the course pursued, is demonstrated, and 1 have an abiding faith that time will furnish ample vindication in the minds of the great majority cf my fei-low-citizeus. . ;

The discontinuance of the use of the army for tho purpose of upholding the loca' Governments in two of the States of the Union was no less a cons itutional duty and requirement, under the circumstances existing at the time, than it was a much-needed measure for the restort.tion ®f local self-gov-ernment and the promotion of national harmony. The withdrawal of the troops from such employment wbh effected deliberately, and with solicitous care for the peace and good order of society and the protection of property and persons and every l ight of all classes of citizens. The results that have followed are indeed significant and encouraging. All apprehension of danger from remitting these Staton to local self-government is dispelled, and a most salutary change in the minds of the people has begun, and is in progress in every part of that section" of country, once the theater of unhappy civil strife, substituting for suspicion, distrust and aversion, concord. friendship and patriotic attachment to the Union. No unprejudiced mind will deny that the oftcn-fatal collisions, which lor several years have been of frequent occurrence, and have alarmed tlie public uiiud, have almost entirely ceased, and that a spirit of mutual forbearance and hearty national interest has succeeded. There lias been a general’ re-establishment of order, and of the orcrly administration of justice. Instances of remaining lawlessness Irave become of rare occurrence ; political turmoil and turbulence have disappeared; useful industries have been resumed; public credit in the Southern (states has been greatly strengthened, and the encouraging benefits of a revival of commerce between the sections of the country lately imbroiled in civil war are fully enjoyed. Much are some of the results already attained upon which the country is to be congratulated. They are of such importance that we may with confidence patiently await the desired consummation that will surely come with the naturul progress of events. The Emancipated Race. It may not be improper here to say that it should be our fixed and unalterable determination to protect, by ali available and proper means, under the constitution and the luws, the lately-emancipated race in the whole of their rights and privileges, and I urge upon those to whom heretofore the colored people have sustained the relation of bondsmen the wisdom and justice of humane and liberal local legislation, with respect to their education and gdneral welfare ; a firm adherence to the laws, both national and State, as to the civil and political rights of the colored people, now advanced to full and equal citizenship ; the immediate repression and sure punishment, by the national and local authorities within their respective jurisdictions, of every instance of lawlessness and violence towards them.as required for the security alike of both races, and justly demanded by the public opinion of the country and the age. In this way the restoration ot harmony and good will, and the complete protection of every citizen in the full enjoyment of every constitutional right, will surely be attained. Whatever authority rests with me to this end I shall not hesitate to put forth. Whatever belongs to the power of Congress and the jurisdiction of the courts of the Union, they may confidently be relied upon to provide and perform, and to the Legislatures, the courts, and the executive authorities of the several States I earnestly appeal to secure" by adequate, appropriate, and seasonable means within their borders these common and uniform rights of a united people which loves liberty, abhors oppression, and reveres justice. These objects are very dear to my heart. I shall continue most earnestly to strive for their attainment. The cordial 00-operatiou of all classes of all sections of the country, and of both races, is required for this purpose, and with these blessings assured, and not otherwise, we may safely hope to hand down our free institutions of government unimpaired to the generations that will succeed us. . Resumption or Specie Payments. Among the other subjects of great and general importance to the people of this country, 1 cannot be mistaken, I think, in regarding as pre-eminent the polioy and measures which are designed to secure the restoration of tho currency to that normal and healthful condition in which, by the resumption of specie payments, our internal trade and foreign commerce may be brought into harmony with the system of exchanges which is based upon the precious metals as the intrinsic money of the world, in the public judgment. That this end should be sought and compassed as speedily and as securely as the resources of the people and the wisdom of the Government can accomplish, there is a much greater degree of unanimity than is found to concur in the specific measures which will bring the country to this desired end, or the rapidity of the steps by which it can be Basely reached. Upon a most anxious and deliberate examination which I have felt it my duty to give to the subject. I am but the more confirmed in the opinion which I expressed in accepting the nomination for the Presidency, and again npon my inauguration, that the policy of resumption should be pursued by every suitable meauß and that no legislation would be wise that Should disparage the Importance or retard the attainment of that result. I have no disposition, and certainly no right, to question the sincerity or the integrity of opposing opinions, and would neither conceal nor undervalue the considerable difficulties, and even occasional distress, which may attend the progress of the nation toward this primary condition of it* general and permanent prosperity. I must, however, adhere to my most earnest conviction, that any wavering in purpose, or unsteadiness in methods, so far from avoiding or reducing the inconvenience inseparable from the transition from an irredeemable to a redeemable paper currency, would only tend to an increased and prolonged disturbance in values, which, unless relieved, must end in serious disorder, dishonor ond disaster in the financial affairs of the Government and of the people. The mischiefs which I apprehend and urgently deprecate, are confined to no class of the people; Indeed, they but seem to me most certainly to threaten the industrious masses, whether their occupations are of skilled or common labor. To them, it seems to me, it is of prime importance that their labor should be compensated in money which is, in itself fixed in exchangable value, by being Irrevocably measured by the labor necessary to its production. This permanent quality of all the money of the people is sought for and can only be gained by the resumption of specie payment. The rich, the speculative, the opera* ing, the moneydealing classes, may not always feel the mischiefs of, or may fird casual profits in, a variable currency, l ImtMip ,ni,f.,»iii n , s .<? .noh a enrreno.v to those

who are paid salaries or wages are inevitable and romedDesH. The Silver Dollar. Closely connected with this general subject of (he resumption of specie payments is one of subord.nate, but still of grave importance—l mean the readjustment ot our coinage system by the renewal of the silver dollar as an element in our specie currency, endowed by legislation with the quality of legal tender, to a greater or less extent. As there is no doubt of the power of Congress, under the constitution, to coin money and regulate the value thereof, and as this power covers the whole range of authority applicable to the metal, the rated value, and the lega-tender quality which shall be adopted for the coinage, the consideration which should induce or discourage a particular measure connected with the coinage belong* dearly to the province of legislative discretion, and of public expediency. Without Intruding upon this province of legislation lit the least, I have yet thought the subject of such critical importance, in the actual condition of our affairs, as to present an occasion for the exercise of the duty imposed by the constitution on the President of recommending to ihe consideration of Congress such measures as he shall judge necessary and expedient. Holding

the opinion, as I do, that neither the interest of the Government, nor of the people of the United States, would be promoted by disparaging silver as one of the two precious metals which furnish the coinage of the world, and that legislation which looks to maintaining the volume of intrinsic money to as full a measure of both metals as their relative commercial values will permit would be neither unjust nor inexpedient, I must ask your indulgence to a brief and definite statement of certain essential features in any such legislative measure which I feel It my duty to recommend. Ido not propose to enter the debate represented on both sides by such able disputants In Congress, and before the people, and In the press, as to the extent to which the legislation of any one nation can control this question, even within its own borders, against the laws of trade, or the positive laws of other Governments. The wisdom of Congress in shaping any particular law that may be presented for my approval may wholly supersede the necessity of my ontering into these considerations, and I willingly avoid either vague or intricate inquiries. It is only the certain, plat* and practical traits of such legislation that I desire to recommend to your attention.

In any legislation providing for a silver coinage, regulating its value, and imparting to it the quality of legal tender, it seems to me of great importance that Congress should not lose sight of its action as operating in a two-fold capacity and two distinct directions. If the United State? Government were free from a public debt, its legislative dealing with the question of silver coinage would be purely sovereign and governmental, under’ no restraints but those of constitutional power and the public good as affected by the proposed legislation; but in the actual circumstances of the nation, with a vast public debt distributed very widely among our own citizens, and held in great amounts also abroad, tho nature of the silver-coinage measnre as affecting the relation of the Government to the holders of the public debt becomes in any proposed legislation of the highest concern. The obligation of the public faith transcends ali questions of profit or public advantage; otherwise, its unquestionable maintenance is the dictate as well as the highest expediency of the most necessary duty, and will be carefully guarded by Congress and the people alike. Tho public debt of the United States, to the amount of $729,000,000, bears interest at the rate of 6 per cent., and S7OB 000,000 at the rate of 5 per cent., and the only way in which the country can be relieved from the payment of the high rates of interest is byad vantageousiy refunding the indebtedness. Whether the debt is ultimately paid in gold or silver coin is of but little moment compared with the possible reduction of interest one-third by refunding it at such reduced rate. If tho United States had the unquestionable right to pay its bonds in silver coin, the little benefit from the prceess would be greatly overbalanced by the injurious effect of such payment. If made as proposed, against the honest convictions of the public creditors, all the bonds that have been issued since Feb. 12, 1873, when gold became the only unlimited legaltender metallic ourrency of the country, are justly payable in gold coin, or in coin of equal value. During the time of these issues, the only dollar that could be or was received by the Government in exchange for bonds was the gold dollar. To require the public creditors to take iu repayment any dollar of less commercial value would be regarded by them ns a repudiation of the full obligation assumed. Tho bonds issued prior to 1873 were issued at a time when the gold dollar was the only coin in circulation or contemplated by either tho Government or the holders of the bonds as the coin in which they were to be paid. It is far better to pay these bonds in that com than to seem to take advantage of the unforeseen fait of silver bullion to pay in a new issue of silver coin made"so much less valuable. Tne power of the United States to coin money and to regulate the value thereof ought never to be exercised for the, purpose of enabling the Government to pay its obligations in a coin of less value 1 ban that contemplated by the parties when the bonds were is-

sued. Any attempt to pay the national indebtedness in a coinage ot less commercial value than the money of the world would involve a violation of the public faith and work irreparable injury to the public credit. It was the great merit of the act of Starch, 1869. that, In strengthening the public credit, it removed all doubt as to the purpose of the United States to pay their bonded debt in coin. That act was accepted as a pledge of public faith. The Government has derived great benefit from it. In the progress thus far made in refunding the public debt at low rates of interest, an adherence to the wise and just policy of an exact observance of the public faith will enable the Government rapidly to reduce the burden of interest on the national dtbt by an amount exceeding $20,000,000 per annum, and effect au aggregate saving to the United States of more than $300,000,000 before the bonds can bo fully paid. In adapting the new silver coinage to the ordinary uses of currency In the every-day transactions of life, and preserving the quality of legal tender to be assigned to it, a consideration of the first importance should be so to adjust the ratio between the silver and the gold coinage, which now constitutes our specie currency, as to accomplish the desired end of maintaining the circulation of the two metallic currencies, and keeping up the volume of the two precious nrctals as our intrinsic money. It is a mixed question for scientific reasoning and historical experience to determine how far, and by what methods, a practicable equilibrium can be maintained which will keep both metals in circulation in their appropriate spheres of common use. An absolute equality of commercial value, free from disturbing fluctuations, is hardly attainable, and without it an untried legal tender for private transactions, assigned to both metals, would tend to drive out of circulation the dearest coinage, and disappoint the principal object proposed by the legislation in view. I apprehend, therefore, that the two conditions of a near approach to equality of commercial value between the gold and silver coinage of the same denomination, and of a limitation of the amounts for which the silver coinage is to be a legal tender, are essential to maintaining both in circulation. If these conditions can be successfully observed, the issue from the mint of silver dollars would afford material assistance to the community in the transition to redeemable paper money, and would facilitate the resumption of specie pay ment and its permanent establishment. Without these conditions I fear that only mischief and misfortune would flow from a coinage of silver dollars, with the quality of unlimited legal tender, even in private transactions; any expectation of temporary ease from an issue of silver coinage, to pass as a legal-tender at a rate materially above its commercial value, is, I am persuaded, a delusion; nor can I think that there is any substantial distinction between an original issue of silver dollars at a nominal value materially above their commercial value and the restoration of the silver dollar at a rate which once was but has ceased to be its commercial value. Certainly the issue of our gold coinage reduced in weight materially below its legal-tender value would not be any the less a present debasement of the coinage by reason of its equaling or even exceeding in weight a good coinage, which at some past time had been commercially equal to the legal-tender value assigned to the new issue. In recommending that the regulaticfn of any silver coinage which may be authorized by Congress should observe the conditions of value and limited legal tender I am governed by the feeling tint every possible increase should be given to the volumo of metallie money which can bo kept in circulation, and thereby every possible aid afforded to the people in the process of resuming specie payments. It is because of my conviction that a disregard of these conditions would frustrate the good results which are desired from the proposed coinage, and embarrass with new elements of confusion and uncertainty the business of the country, that I urge upon your attention these considerations. I respectfully recommend to Congress that in any legislation providing for a silver coinage, and imparting to it the quality of legal tender, there be impressed in the measure a firm provision exempting the public debt heretofore issued and now outstanding from the payment, cither of principal or interest, in any coinage of less value than the present gold coinage of the country. Th© Civil Service. The organization of the civil service of the country has lor a number of years attracted more and more of public attention. So general has become the opinion that the methods of admission to it, and the conditions of remaining in it, are unsound, that both the great political parties have agreed, in the most explicit declarations, on the necessity of reform, and in the most emphatic demands for it. I have fully considered the declarations and demands to be the expressions of the sincere convictions of the intelligent masses of the people upon the subject, and that they should be recognized and followed by earnest ana prompt action on the part of the legislative and executive departments of the Government. In pursuance 61 the purpose indicated before my accession to office, I endeavored to have my own views distinctly understood, and upon my inauguration my accord with the public opinion was stated in terms believed to be plain and unambiguous. My experience in the Executive duties has strongly confirmed the belief in ihe great ad- - vantage that the country would find ia observing strictly the plan of the constitution, which imposes upon the Executive the sole duty and responsibility of the selection of those Federal officers who by

.'aware appointed, not elected, and which in like manner assigns to the Senate the complete right to advise, and consent to or reject, the nominations so made, while the House of Representatives stands as the public cenEor of the performance of official duties, with the prerogative of investigation m all cases of dereliction. The blemishes and imperfections in the civil service may, as I think, be traced in most cases to a partial confusion of the duties assigned to the several departments of the Government. My purpose in this respect has been to return to the system established by the fundamental law, and to do this with the heartiest co-operation and a most cordial undersl auding with the senate and House of Representatives, the political difficulties in the selection of numerous officers for poets of widely-varying responsibilities and duties are acknowledged to be very great. No system can be expected to secure absolute freedom from mistakes, and the beginning of any attempted change of custom is quite likely to be more embarrassed in this respect than any subsequent period. It is here that the constitution seems to most prove its claim to the great wisdom accorded to it. It gives to the Executive the assistance of th knowledge and experience of the Senate, which, when acting npon nominations as to which they may be disinterested and impartial judges, secures as strong a guaranty of freedom from errors of importance as is perhaps possible in human affairs. In addition to this I recognize the public advantage of •making all nominations as nearly as possible impersonal, in the sense of being free from mere caprice or favor in these directions, and in those offices where special training is of greatly increased value, I believe such a rule as to the tenure of office should obtain as may induce men of proper qualifications to apply themselves industriously to the task of becoming proficient. Bearing these things in mind, I have endeavoredto reduce the number of changes iu subordinate places usually made upon the change of the general administration, and shall most heartily co-operate with Congress m the better systematizing of such methods and rules of admission to the public service and of promotion within It as may promise to be most successful in making thorough competency, efficiency and character the decisive tests in these matters.

I ask the renewed attention of Congress to what has already been done by the Civil Service Commission, appointed in pursuance of the act of Congress by my predecessor, to prepare and revise the civil-service rules. In regard to much of the department service, especially at Washington, it may be difficult to organize a better system than that which haß thus been provided, and it is now being used to a considerable extent, under my direction. The commission has still a legal existence, although for several years no appropriation has been made for defraying its expenses. Believing that this commission has rendered valuable service, and will he a most unusual agency in improving the administration of the civil service, I respectfully recommend that a suitable appropriation be immediately made to enable it to continue its service. It is nits purpose to transmit to Congress, as early as practicable, the report by the Chairman of the commission, and to ask your attention-to such measures upon this subject as, in my opinion, will further promote the improvement of the civil service. - Foreign Relations. During the past year the United States has continued to maintain peaceful relation with the foreign powers. The outbreak of war between Russia Turkey, though'at one time attended by grave apprehension as to its effect upon other European nations. has had no tendency to disturb the amicable relations existing between the United States and each of the two contending powers. An attitude of just and impartial neutrality has been preserved, and I am gratified to state that, in the midst ot their hostilities, both the Russian and the Turkish Governments hare shown an earnest desire to adhere to the obligations of all treaties with the United States, and give due regard to the lights of American citizens. Italy. By the terms of the treaty defining the rights, immunities and privileges of Consuls between Italy and the United S ates, ratified in 18G8, eithir Government may, alter the lapse of ten years, terminate the existence of the treaty, by giving twelve months' notice of its intention. The Government of Italy, availing itself of this facility, has now given the required notice, and the treaty will accordingly end on the 15th of September, 1878. It is understood, however, that the Italian Governin' nt wishes to renew it in its general scope, describing only certain modifications in some of its articles. In this disposition I concur, and shall hope that no serious obstacles may Intervene to prevent or delay the negotiation of a satisfactory treaty.

Passports, Naturalization, Ktc. Numerous questions in regard to passports, naturalization. and exemption from military service have continued to arise in the cases of emigrants from Germany, who have returned to their native country. The provisions of the treaty of Feb. 22, 1868, however, have proved to be so ample and bo judicious that the Legation of the United States at Berlin has been able to adjust all claims arising under it, not only without detriment to the amicable relations existing between ihe two Governments, but, U is believed, without injury or injustice to duly naturalized American citizens. It is desirable that the treaty originally made with the North German Union, in 18G7, should now be extended so as to apply equally to all the states of the empire of Germany. The Paris Exposition The invitation of the Government of France to participate in the Exposition of Ihe products, agriculture, industry and fine arts, to be held at Paris during the coming year, was submitted to your consideration at the extra session. It is not doubted that its acceptance by the United States, and a wellselected exhibition of the products of American industry on that occasion, will tend to stimulate internationel commerce and emigration, as well as to promote the traditional friendship between the two countries. Extradition. A question arose some time since as to the proper meaning of the extradition articles of the treaty of 1812 between the United States and Great Britain. Both Governments, however, are now in accord in the belief that the question is not one that should be allowed to frustrate the ends of justice or to disturb the friendship between the two nations, and no serious difficulty has arisen in accomplishing the extradition of criminals when necessary. It is probable that the points of disagreement will in due time be settled, and, if need be, more explicit declarations be made in a new treaty. The Fishery Ouestiou. J The Fishery Commission under articles 18 and 35, treaty of Washington, has concluded its session. The result of the deliberations of the commission, as made public by the Commissioners, will be communicated to Congress. Trademarks. A treaty for the protection of trademarks has been negotiated with Great Britain, which has been submitted to the Senate for its consideration. Mexico. Tho revolution which recently occurred inMexicS was followed hy the accession of the successful party to power and the installation of its chief General, Porfirio Diaz in the Presidential office, it has been the custom of the United States, when such changes of government have heretofore occurred in Mexico, to recognize and enter into official relations with the de facto Government as soon as it should appear to have the approval of the Mexican people, and should manifest a disposition to adhere to the obligations of treaties and international friendship. In the present caso such official recognition has been deferred by the. occurrences on the ltio Grande border, the records of which have already been communicated to each house of Congress, in answer to their respective resolutions of inquiry. Assurances have been received that the authorities at the seat of the Mexican Government have both the disposition and the power to prevent and punish such unlawful invasions and depredations. It is earnestly to be hoped that events may prove these assurances to be well founded. The best interests of both countries require the maintenance of peace upon the border and the development of commerce between the two republics. It is gratifying to add that this temporary interruption of official relations has not prevented duo attention by the representatives of the United States in Mexico to the protection of American citizens as far as practicable, nor has it interfered with the prompt payment of the amounts due from Mex.ico to the United States, under the treaty of July 4, 1863, and the awards of the joint commission. While I do not expect an interruption of the friendly relations with Mexico, yet I cannot but look with some solicitude upon a continuance of the border disorders, as exposing the two countries to initiations of popular feeling and mischances of action which are naturally unfavorable to complete amity. Firmly determined that nothing shall be wanting on my part to promote a good understanding between the two nations, I yet must ask the attention of Congress to the actual occurrences on the border, that the lives and property of our citizens may be adequately protected and peace preserved. The Cuban War. Another year has passed without bringing to a close the protracted contest between the Spanish Government and the insurrection in the island of Cuba. While the United States has sedulously abstained from any intervention in this controversy, it is impossible not to feel that it is attended by incidents affecting the rights of American citizens, apart from the effect of the hostilities uron trade lie tween the United States and Cuba. Their progress is inevitably accompanied by complaints, having more or less foundation, of searches, arrests, embargoes and oppressive taxesupon the property of American residents, and of unprovoked interference with American vessels and commerce. It is due to the Government of Spain to say that during the past year it has promptly disavowed and offered reparation for any unauthorized acts of unduly Zealous subordinates whenever such acts have been brought to its attention. Nevertheless such occurrences can not but tend to excite feelings of annoyance, suspicion and resentment, which are greatly to be deprecated between the respective subjects and citizens of two friendly powers. ■ Venezuela. Much delay,comeque-ut upon accusations of fraud iu some of the awards, has occurred in resne-vt to the distribution of the limited amounts received

from Venezuela, tinder the treaty of April 25,1866, applicable to the awards of the joint commission created by that treaty. So long as these matter* are pending in Congress the Executive cannot assume either to pass upon the questions presented, or to distribute the fund received. It is eminently desirable that definite legislative action should be taken, either deciding the awards to be final, or providing some method for a re-ex-aminaticn of the claims. Southern American Nation*. Our relations with the republics of Central and Bouth America and with the empire of Brazil have Continued without serious change, further thanithe temporary interruptiou ot diplomatic intercourse with Venezuela and with Guatemala, Amicable relations have already been fully restored with Venezuela, and it is not doubted that all grounds of misunderstanding with Guatemala will speedily be removed. From all these countries there are favorable indications of a disposition on the part of their Governments and people to reciprocate onr efforts in the direction of increased oommereial intercouxee. Samoa. The Government of the Samoan islands has sent an envoy, in the person of its Secretary of State, to invite the Government of the United States to advise and protect their independence, to establish commercial relations with their people, and to assist them in their steps towards responsible and regular government. The inhabitants of these islands, having made considerable progress In Christian civilization and the development of trade, are doubtful of their ability to maintain peace and independence without the aid of some stronger power. '1 he subject is deemed worthy of respectful attention, and the claims upon our assistance by this distant community will be carefully considered. Foreign Commerce. The long commercial depression in the United States has directed attention to the subject of the possible increase of our foreign trade and the method for its development, not only with Europe, but with other countries, and especially with the states and sovereignties of the Western hemisphere. Instructions from the Department of State were issued to the various diplomatic and Consular officers of the Government, asking them to devote attention to the question of methods by which trade between the respective countries of their official residences and the United States could he most judiciously forwarded. In obedience to the instructions, examinations and reports upon this subject have been made by many of these officers and transmitted lo the department, and the same are submitted to the consideration of Congress.

National Finances. The annual report of the Secretary of the Treasury on tho state of the finances presents important questions for the action of Congress, upon some of which I have already remarked. The revenues of the Government during the fiscal year ending June 30, 1877, were $269,000,686.62. The total expenditures for the same period were $238,660,208.93, leaving a surplus revenue of $30,310,677.69. This has substantially supplied the requirements of the sinking fund for that’year. The estimated revenues of the current n»u&i yea,- =.»<> eofiK,snrr,.-uio. ima tho mated expenditures for the same period are $232,430,613.72. If these estimates prove to be correct, the re will be a surplus revenue of $33,039,356.23, an amount nearly sufficient for the sinking fund for this year. The estimated revenues for the next fiscal year are $260,250,000. It appears from the report that during the last fiscal year the revenues of the Government, compared with the previous year, have largely decreased. This decrease, amounting to the sum of $18,481,452.64, was mainly in customs duties, caused partly by a large falling off of the amount of imported dutiable goods, and partly by the general fall of prices in the markets of production of such articles as pay ad valorem taxes. While this is felt injurious in the diminution of the revenue, it has been accompanied with a very large increase of exportations. The total exports during the last fiscal year, including coin, have been $658,637,457, and the imports have been $492,097,540, leaving a balance of trade in favor of the United States amounting to the sum of $166,539,917, the beneficial effects of which extend to all branches of business. Revenue. Tho estimated revenue for the next fiscal year will impose upon Congress the duty of strictly limiting appropriations, including the requisite sum for the maintenance of the sinking fund within the aggregate estimate of the receipts, while the aggregate of taxes Bhould not be increased. Amendments might be made to the Revenue laws that would, without diminishing the revenue, relieve the people from unnecessary burdens. A tax on tea and coffee is Bhown by Ihe experience, not only of our own country, but of other countries, to be easily collected without loss by undervaluation or fraud, and largely borne in the country of production. A tax of MO cents a pound on tea and 2 cents per ponnd on coffee would produce a revenue exceeding $12,000 000, and thus enable Congress to repeal a multitude of annoying taxes yielding a revenue not exceeding that sum. The internal-revenue system grew out of the necessities of the war, and most of ihe legislation imposing taxes upon domestic products under this system has been repealed. By tho substitution of a tax on tea and coffee, ad forms of internal taxation may be repealed, except that on whisky, spirits, tobacco and beer. Attention is also called to the necessity of enacting more vigorous laws for the punishment of frauds and smuggling. Thfa can be best done by judicious provisions that will induce the disclosure of attempted fraud by undervaluation and smuggling. Ali revenue laws should be simple in their profusions, and easily understood, bo far as practicable the rates of taxation should be in the form of specific duties, and not ad valorem, requiring the judgment of experienced men to ascertain values and exposing the revenue to the temptation of fraud.

Customs Abuses. My attention has been called, during the recess of Congress, to the abuses existing in the collection of the customs, and strenuous efforts have been made for their correction by Executive orders. The recommendations submitted to the Secretary of the Treasury by a commission appointed to examine into the collection of oustoms duties at the port of New York contain many suggestions for the modification of the customs laws, to which the attention of Congress i 3 invited. Public Credit. It is a matter of congratulation that, notwithstanding the severe burdens caused by the war, the public faith with all creditors has been preserved, and as the result of this policy the public credit has continuously advanced, and public securities are regarded with the hignest favor in the markets of the world. I trust that no act of the Government will cast a shadow upon its credit. The Public Debt. The progress of refunding the public debt has been rapid and satisfactory. Under the contract existing when I entered upon the discharge of the duties of my office, bonds bearing interest at the rate of 4)4 per cent, were being rapidly sold, and within three months the aggregate sales of these bonds had reached the sum of $200,000,000. With my sanction, the Secretary of the Treasury entered into a new contract for the sale of 4-per-cent. bonds, and within thirty days after the popular subscription for such bonds was opened subscriptions were had amounting to $75,490,550, which wore paid for within ninety days after the date of subscription. By this process, within but little more than one year, the annual Interest on the public debt was reduced in the Bum of $3,775,000. Savings Funds. I recommend that suitable provision be made to enable the people to easily convert their sayings into Government securities, as the best mode m which small savings may be well-secured and yield a moderate interest. It is an object of public policy to retain among our own people the securities of tne United States. In this way our country is guarded against their sudden return from countries, caused by war or other disturbances, beyond our limits. American Shipping. The commerce of the United States with foreign nations, and especially the export of domestic productions, lias of late years largely increased, but the greater portion of this trade is conducted in foreign vessels. The importance of enlarging our foreign trade, and especially by direct and speedy interchange with countries on this continent, cannot be over-estimated, and it is a matter of great moment that our own shipping interest should receive, to the utmost practical extent, the benefit of our commerce with other lands. These considerations are forcibly urged by all the large commercial cities of the country, and public attention is generally and wisely attracted to the solution of the problems they present. It is not doubted that Congress will take them np, in the broadest spirit or liberality, and respond to the “public demand by practicable legislation upon this subject. The Indian 'Wars. The report of the Secretary of War shows that the army has been actively employed during the year and has rendered very important service in ing hostilities in the Indian country, and preserving peace and protecting life and property iu the interior as well as along the Mexican border. A long and arduous campaign has been prosecuted, with final and complete Access, against a portion of the Nez Perces tribe, of Indians, a full account of this campaign will be found in the report of the General of the Army. It will be seen that in its course several battles were fought, in which a number of gallant officers and men lost their lives. I join with the Secretary of War and General of the Army in awarding to the officers and men employed in the long and toilsome pursuit and in the final capture of these Indians the honor and praise which are so justly their due. The Labor Riots. Tho very serious riots which occurred in several of the States In J ul«r last rendered necessary tho employment of a considerable portion of the army, to preserve the peace and maintain order in the Stabs of West Virginia, Maryland, Pennsylvania and Illinois. These disturbances were so formidable as to defy the local and State authorities, and lie National Executive was called upon, in the mode provide l by tho constitution and laws, to furnish military, and I am gratified to bo able to state that the troops sent in response to these oalls

for aid in tits suppression of domestic violence were able, by the influenoe of their presence in the disturbed regions, to preserve the peace and restore order without the use of force. In the discharge of this delicate and important duty both officers and men aoted with great prudence and courage, and for their Bervloee deserve the thanks of the country. The Rio Grande Trouble*. The border disturbances along the Bio Grande, in Texas, to which I have already referred, have rendered necessary the constant employment of a military force in that vicinity. A full report of all recent military operations in that quarter has been transmitted to the House of Representatives in answer to a resolution of that body, and it will not therefore be necessary to enter into details. I regret to say that these lawless incursions into our territory by armed bands from the Mexican side of the line, for the purpose of robbery, have been of frequent occurrence! and, in spite of the most vigorous efforts of the commander of our forces, the marauders have generally succeeded in escaping into Mexioo with their plunder. In May last, I gave orders for tiie exercise of the utmost vigilance on the part of our troops for the suppression of these raids, and the punishment of the guilty parties, as well as the recapture of the property stolen by them. Gen. Ord, commandant in Texas, was directed to invite the co-operation of the Mexican authorities in efforts to this end, and to assure them that I was anxious to avoid giving the least offense to Mexico. At the same time he was directed to give notioe of my determination to put an end to the Invasion of our territory by lawless bands, intent upon the plunder of our peaceful citizens, even if the effectual punishment of the outlaws should make the crossing of the border by our troops in their pursuit necessary. It is believed that this policy has had the effect to check, somewhat, these depredations, and that, with a considerable increase of our force upon that frontier, and the establishment of several additional military posts along the Rio Grande, so as more effectually t) guard that extensive border, peace may be preserved, and the lives and property of citizens in Texas fully protected.

The Army. © Prior to the Ist day of July last the army was, in accordance with law, reduced to the maximum of 25,000 enlisted men, being a reduction of 2,500 below the force previously authorized. This reduction was made, as required by law, entirely from the infantry and artillery branches of the service, without any reduction of the cavalry. Under the law, as it now Btands, it is necessary that the cavalry regiments should be recruited to 100 men in each company for service on the Mexican and Indian frontiers. The necessary effect of this legislation is to reduce the infantry and artillery arms of the service below the number required for efficiency, and I concur with the Secretary of War in recommending that authority be given to recruit all companies of infantry to at least fifty men, and all batteries of artillery to at least seventyfive men, with power, in case of an emergency, to increase the former to 100 and the latter to 125 men each. I invite your special attention to the following recommendations of the Secretary of War: First, that a provision be made for supplying to the army a more aouhaani tma. supper of ter. Second, that early action be taken by Congress, looking to a complete revision and republication of the army regulations. Third, tlit.t section 1,258 of the Revised Statutes, limitiug the number of officers on the retired list, be repealed. Fourth, that the claims arising under the act of July 4, 1864, for supplies taken by the army during the war, be taken from the offices of the Quartermaster and Commissary Generals, and transferred to the Southern Claims Commission, or some other tribunal having more time and better facilities for their prompt investigation and decision than are possessed by these officers. Fifth, that Congress provide for an annuity fund for the families of deceased soldiers, as recommended by the Paymaster General of the army. ' The Navy. The report of the Secretary of the Navy shows m that we have blx squadrons now engaged in the protection of our commerce and other duties pertaining to naval service. The condition and operations of the department are also shown. The total expenditures for the fiscal year ending June 30, 1877, were $16,077,974.54. There are unpaid claims against the department, chargeable to the last year, which are presented to the consideration of Congress by the report of the Secretary. The estimates for the fiscal year commencing July 1, 1878, ara $16,233,254.40, exclusive of the sum of $2,314,231 submitted for new buildings, renairs and improvements at the several navy-yards. The appropriations for the present fiscal year, commencing July, 1677, are $13,592,932.90. The amount drawn from the treasury from July 1 to Nov. 1, 1877, is $5,343,037.40, of which there is estimated to bo yet available $1,029,628.30, showing the amount of actual expenditure during the first four mouths of the present fbscal year to have been $4,313,509.10. The Postal Service. The report of the Postmaster General contains a full and clear statement of the condition of the Postoffice Department. The ordinary revenues of the department for the fiscal year ending June 30, 1877, including receipts from the money-order business and from official stamps and Btamped envelopes amounted to the sum of $27,531,385.26. The additional sum, $7,013,000, was realized from appropriations from the general treasury for various purposes, making the receipts from all sources $34,544,885.26. The total expenditures during the fiscal year amounted to $33,486,322.44, leaving an excess of total receipts over total expenditures of $1,058,562.82, and an excess of total expenditures over ordinary receipts of $5,954,757.18. Deducting from the total receipts the sum of $63,261,841 received from international money orders of the preceding fiscal year, and deducting from the total expenditures the sum of $1,163,818.20 paid on liabilities incurred in previous fii>cal years, the expenditures and receipts appertaining to the business of the last fiscal year were as follows: Expenditures, $32,322,504.24; receipts (ordinary from the money-order business and from official postage stamps), $27,468,323.42; excess of expenditures, $4,854,180.42. Postofflce Department. The ordinary revenues of the Postoffice Department for the year ending June 80, 1878, are estimated at an increase of 3 per cent, over those of 1877. making $29,034,098.28, and the expenditures for the same year are estimated at $36,427,771, leaving an estimated deficiency for 1878 of $7,393,392 02. The additional legislation recommended by the Postmaster General for improvements of the mall service and to protect the postal revenues from the abuses practiced under exisiing laws Is respectfully commended to the careful consideration of Congress. Judiciary. The report of the Attorney General contains several suggestions as to the administration of justice, to which I invite your attention. The pressure of business in the Supreme Court and in certain Circuit Courts of the United States is now such that serious delays, to the great injury and even oppression of suitors, occur, and a remedy should be sought for this condition of affairs—whether it will be fonnd in the plan briefly sketched in the report, of increasing the number of Judges of the Circuit Courts, and, by means of this addition to the judicial foroe, of creating an intermediate Court of Errors and Appeals, or whether some other mode can be devised for obviating the difficulties which now exist. Indian Affairs. I leave to your mature consideration the present condition of the Indian tribes on the territory of the United. States, and our relations with them arc fully set forth In the reports of the Secretary of Interior and the Commissioners of Indian Affairs. After a series of most deplorable conflicts, the v successful termination of which, while reflecting honor upon the brave soldiers who accomplished it, cannot lesson our regret at the occurrences. We are now at peace with all the Indian tribes on our borders. To preserve that peace by a just and humane policy will be the object of my earnest endeavors. Whatever may be said of their character and savage propensities, of the difficulties of introducing among them the habits of civilized life, and the obstacles they have offered to the progress of settling in certain parts of the country, the Indians are certainly entitled to our sympathy and to a conscientious respect on our part for their claims upon our sense of justice. They were the aboriginal occupants of the land we now possess. They have been driven from place to place. The purchase money paid to them in some cases for what they called their own has still left them poor, In many instances, when they had settled down upon land assigned to them by compact, and begun to support themselves by their own labor, they were rudely jostled off and thrust into the wilderness again. Many, if not most, of our Indian wars have had their origin in broken promises and acts of injustice upon our part, and the advance of the Indian in civilization has been slow, because the treatment they received did not permit it to be faster and more general. We cannot expect them to improve and to follow our guidance unless we keep faith with them in respecting the rights they possess, and unless, instead of depriving them of their opportunities, we lend them a helping hand. I cordially approve the policy regarding the management of Indian affairs outlined in the reports of the Secretary of the Interior aud of the Commissioners of Indian Affairs. The faithful performance of onr promises is the first condition of a good understanding with the Indians. I cannot too urgently recommend to Congress that a prompt and liberal provision be made for the conscientious fulfillment of all agreements entered into by the Government with the Indian tribes. To withhold the means necessary for the performance or a promise is always false economy, and is apt to prove disastrous in its consequences. Especial care Is recommended to provide for the Indians settled on their reservations, cattle and agricultural implements to aid them in whatever efforts they may make to support themselves, and by the re-estab-lishment and maintenance of schools to bring them under the control of civilized influences. I see no reason why Indians who cut give satisfactory proof of having by their own labor supported their families for a number of years, and who are willing to detach themselves from their tribal relations,should not be admitted to the benefits of the homestead act and the privileges of citizenship; and I recommend

the passage of a law to that effest. It will be an Mi of justice as well as a measure of encouragement. Earnest efforts are being made to purify the Indian service, so that every dollar appropriated by Congress shall redound to the benefit at tha Indians intended to be benefited. These efforts will have my firm support. With an improved servioe and every possible encouragement held out to the Indians to better their condition, and to elevate themselves in the scale of civilization, we may hope to do, at the same time, a good work for them and for ourselves. The Timber Thieves. ® I invlie the attention of Congress to the importance of the statements and suggestions by the Seere tar yof tue Interior concerning the depredations committed upon the timber-lands of the United States, aud the necessity for the preservation of the forests. It is believed that the measures taken in pursuance of the existing law to arrest these depredations will be entirely successful, if Congi ess, by an appropriation for that purpose, renders their continued enforcement possible. The experience of other nations teaches us that s country cannot be stripped of its forests with impunity, and we shall expose ourselves to the gravest c' nsequenoes unless the wasteful and improvident manner in which the forests of the United States are destroyed be effectually checked. I earnestly n commend that the measures suggested by the Seori tary of the Interior f or the suppression of depredations on the public timber lands of the United States, for the selling es timber from the public lands, ana for the preservation of the forests, be embodied la law, and that, considering the argent necessity of enabling the people of certain States and Territories to purchase timber from the publio lands ia a legal manner, which at present they eannot do, such a law be passed without unavoidable delay. Desert Lands. -0 I would also call the attention of Congress to the statements made by the Secretary of the Interior c.incoming the disposition that might be made of the desert lands, not irrigated, west of the one hundredth (100th) meridian. These lands sre praot Cally unsalable under exisiing laws, and the suggestion is worthy of consideration, that a system of 1 asehold tenure would make them a source at profit to the United States, while at the same time legaliing the business of cattle-raising, which is at present carried on upon them.

Agriculture. The report of the Commissioner of Agricnlt ure contains the gratifying announcement of the extraordinary success which has rewarded the agricultural industry of the country for the past year. With the fair prices which obtain for the products of the soil, especially for the surplus which our people have to exjKirt, we may confidently turn to this as t le most important of all our resources for the rei ival of the depressed industries of the country. The report shows our agricultural progress during tue year, and contains a statement of the work done by this department for the advancement of Uio agricultural industry upon which the prosperity of our people so largely depends. Matters of information are included, of great interest to all who seek, by the experience of others, to imnrove their own methods of cultivation. The efi >rts of the department to increase the production ( f important articles of consumption will, it is hoped, improve tlie demand for labor and advance the business of the oountry, and eventually result i i saving some of the many millions that are now annually paid to foreign nations for sugar and other staple products, which habitual use has made necessary in our domestic every-day life. Centennial Board. ® The board, on behalf of the United States exeou- , ive departments at the International Exposition of 1876, has concluded Its labors. The final report of the board was transmitted to Congress at the last session. As these papers are understood to contain interesting aud valuable information, and will constitute the only report emanating from the Government on the subject of the exhibition, I invite attention to the matter, and recommend that the report be published for general information. District of Columbia. Congress is empowered by the constitution with the authority of exclusive legislation over the District of Columbia, in which tho seat of the Government of (lie nation is located. The Interests of the District having no direct representation in Congress, are entitled to especial consideration and care at the hands of the General Government. The capital of tho United States beiongs to the nation, and it is natural that the American people should take pride in the scat of their National Government, and desire it to be an ornament to the country. Much has been (loue to render it healthful, convenient and attractive, but much remains to be done, which its permanent inhabitants are not able and ought not to bo expected to do. To impose upon them a large proportion oi the cost required for public improvements, which arc m a great measure planned and executed for tho convenience of the Government and of the many thousands of visitors from all parts of the country who temporarily reside in the capital of the nation, is an evident injustice. Tour attention is invited to the suggestion of the Commissioners and of the Board of Health for the organization of a Board of Charities to have supervision and control of the disbursement of all moneys for charitable purposes from the District treasury. I desire also to aßk your especial attention to the need of addiDg to the efficiency of the public schools of the District by supplemental aid from the national treasury. This is especially just since so large a number of those attending schools are children of employes of the Government. I earnestly commend to your care the interest of the people of.tlie District who arc so intimately associated with the Government establishment, aud to whose enterprise the good order and attractiveness of the Capital are largely due. and I ask your attention to the request of the Commissioners for legislation in behalf of the interests intrusted to their care. The appropriations asked for the care of reservations belonging to the Government within the city by the Commissioner of Publio Buildings and Grounds, are also commended (o your favorable consideration. The Washington Monument, The report of the joint commission created by the act approved August 2, 1876, an act providing for the completion of the Washington monument, i 3 also herewith transmitted, with accompanying documents. The board of engineer officers detailed to examine the monument In compliance with the second section of the act, have reported that the foundation is insufficient. No authority exists for making the expenditures necessary to secure its stability. I therefore recommend that the commission be authorized to expend such portion of the sum apjiropriated by the act as may be necessary for the purpose. The present unfinished condition of the monument, begun so long ago, is a reproach to tho nation. It cannot be doubted that the patriotic sense of the country will mainly respond to such prompt provision as may be made for its completion at an early day, and I urge upon Congress the propriety and necessity of immediate legislation for this purpose. Public Education. •' The wisdom of legislation upon the part of Congress in aid of the States lor the education of the whole peonle in those branches of study which are taught in lie common schools of the country, is no longer a question. The intelligent judgment of the country goes still further, regarding It as also both constitutional and expedient for the General Government to extend to technical 1 and higher education such aid as is deemed essential to the general welfare, and to our due prominence among the enlightened and cultured nations of the world. Tho ultimate scrttlemeut of all questions of the future, whether of administration or finance, or of true nationality of sentiment, depends upon the virtue and intelligence of the people. It is vain to hope for the success of a free government without the means of insuring the intelligence of those who are the source of power. No less than one-seventh of the entire votiDg population of our country are yet unable to read and write. It is enoouraging to observe, in connection with the growth of fraternal feeling in those States In which slavery formerly existed, evidences of increasing interest in universal education, and I shall be glad to give my approval to any appropriate measures which may be enacted by Congress for the purpose ot supplementing, with national aid, the local systems of education in these States and in all the States; and, having already invited your attention to the needs of the. District of Columbia with respect to its pub-lic-school sys‘cm, I here add that I believe it desirable, not so much with reference to the local wants of the District, but the great and lasting benefitof the entire country, that this system should be crowned with a university In all respects in keeping with the National Capital, and thereby realize the cherished hopes of Washington on this subject. I also earnestly commend the request of the Regents of the Smithsonian Institute, that an adequate appropiation be made for the replenishment and '’conduct of a national museum under their supervision. And So Forth. • ■The request of providing for the preservation and growth of tne library of Congress is also one of national importance. As the depository of copyright publications and records, this library has outgrown the provisions for its accommodation, and the erection, on such site as the judgment of Congress may approve, of a fire-proof library building, to preserve the treasures and enlarge the usefulness of this valuable collection, is recommended. I recommend also such legislation sr will render available and efficient for tho purpose of instruction, so far as is consistent with the piinlic servioe, the cabinets or museums of invention, of surgery, of education, of agriculture and other collections, the property of the national Government. The capital of the nation should be something more than a mere political center. We should avail ourselves of all the opportunities which Provl* deuce has here placed at our command to enhance the general intelligence of the people and Increase the conditions most favorable to the sneenss and perpetuity of onr institutions.

DftcembaMl.^lß77.

R. B. EAYES.