Democratic Sentinel, Volume 5, Number 46, Rensselaer, Jasper County, 16 December 1881 — PRESIDENT ARTHUR. [ARTICLE]

PRESIDENT ARTHUR.

His First Annual Massage to Gcngress. Delivered on Tuesday, the 6th of December. A Tribute to the Memory of the Lamented tiarfleld. Our Foreign Relations in a Satisfactory Condition. The Financial and Other Fublie Questions of Interest Discussed. Wasbinoton, D. C., Dec. 6. To the Senate and House of Representatives of the United States: An appallin' calamity has befallen the American people since * heir chosen representatives last met in the balls where yon aro now assembled. We might else recall with unalloyed content tho prosperity with which, throughout the year, tho nation lias boon blessed. Its harvests have Lei n plenteous, its varied industries have thriven, the health of its peoplo has been preserved. It has maintained with foreign governments tho undisturbed relations of amity and peace. For those m imfi stations of His favor, we owe to Him who holds our destiny in His hands the tribute of our grateful devotions. To that mysterious exercise of will which has taken Ir uu us tho loved and illustrious citizen who was but lately tho head of tho nation, wo bow in sorrow and submission. Tho memory of his exalted character, of his noble nch ovetnents, and of his patriotic life, wilt he treasured forever as a sacraJ possession of the whole people. Tho announcement of his death drew from foreign governments and peoples tributes of sympathy and sorrow, which history will record as signal tokens of the kinship of nations and the federation of mankind. GREAT BRITAIN. The feeling of good will betwoen our own Government and that of Great Britain was never more marked* than at present. In recognition of this pleasing fact, I directed on the occasion of tho late centennial celebration at Yorktown that a salute bo given to the British flag. E.irlv in the year the Fortuue bay claims wore satisfactorily settled by the British Government paying in full the sum of i.TS,()uO, most of whioh has already been distributed. As the terms of the settlement included compensation for injuries suffered by our fishermen at Aspoe bay, thero ha-i been retained from the gross award a sum whioh is deemed adequate lor these claims.

THE AUSTRALIAN EXPOSITION. The participation of Americans in the exhibitions at Melbourne and Sydney will bo approvingly mentioned in tho reports of the two exhibitions, soon to bo presented to Congress. They will disclose the readiness of our couutiymou to make successful competition in distant holds of enterprise. THE ISTHMUS CANAL. In relation to tho proposed canal across the Isthmus of Panama, littlo has occurred worthy of mention in tho diplomatic relations of tho country. COPYUIOUT. Negotiations for an international copyright convention are in hopeful progress. SITTING BULL. The surrender ol billing Full and his forces, upon tho Canadian fro iti r, Ins allayed all apprehension. alt bough bod es of Br.lish Indians still cro.rs the border in quest ot sustenance. Upon this subject a corio.-pundcnce has been opened which promises an adequate understanding. Our troops have orders to avoid, meanwhile, all collisions with alien Indians. THE FRENCH QUESTS. The presence at tne Yorktown celebration of the representatives of (be descendants of Lafayette and of liis gadaut compatriots, who wore our allies in the Revolution, has served to •trengthon tho spirit of go id-will which has always existed between the two nations. BIMETALLIC CONFERENCE. You will bo ttit ii li 11 with the roceediugs ol tho Bimetallic Conference, held during the summer at the city of Paris. No accord was reao od, Lui a v. burble interchange of views was had, and tho conference will next \ ear bo renewed. ELEC l KICAL I XPOSITION. At the Electrical Exhibition and Congress, also-held at Paris, this country was creditably represented by eminient specialists, who, in the absence of an appropriation, g<-u.Ton- ly lent their efficient aid at the instance of the State Department. While oar exhibitions hi this almost-disUnctivoiy American field of achievement have won several awards, I recommend that Congress provide for the repayment of the personal ex pens, s incurre I in tne pubiio inh rest by the honorary commissioners and delegates. No new question respecting the status of OUR NATURALIZED CITIZENS IN GEIIMNANY have arisen during the year, and causes of complaint, especially in Alsace and Lorraine, havo practically ceased through the liberal action of the Imperial Government in accepting our often expressed views on the subject. The application of the treaty of 1868 to the lately acquired Bhonish provinces has received very lamest attention. A definite and lasting agreement on this point is confidently expected. The participatfon of the descendants of Baron von Steuben in the Yorktown festivities, and their subsequent reception by their American kinsmen, strikingly evinced tho ties of good will which unite the German people and our own. Our INTERCOURSE WITH SPAIN has been friendly. An agreement concluded in February last fixes a term for the labors for Ihc4fpunish and American Claims Commission. The Spanish Government has been requested to pay the late award of the Commission, and will, it is believed, secede to the request as promptly and courteously as on former occasions. By recent legislation onerous fines have been imposed upon American shipping in Spanish and colonial ports for slight irregularities, hi manifests. One case of hardship is specially worthy of attention. The bark Masonic, bound for Japan, entered Manilla in distress, and is there sought to be confiscated uiidtr the Spanish revenue laws for au alleged shortage ui her transhipped cargo. Though < ffovts for her relief havo thus far proved unavailing, it is expected that, the whole will be adjusted in a friendly spirit. tiie czar’s assassination. Tho Senate resolutions of condolence on the assassination of the Czar Alexander 11. were appropriately communicated to the Russian Government, which iu turn has expressed its sympathy in our late national bereavement. It is desirable that our cordial relations with Rus-ia should be strengthened by proper engagements, assniing to peaceable Americans who visit the empire the consideration which is due to them as citizens of a friendly State. This is especially needful with respect to American Israelites, whose classification with tlio native lio--1 row has evoked energetic remonstrances from this Government.

ITALY. Tiie consular agreement with Italy has been i* netiouedaud proclaimed, which puts at rest conflicts of jurisdiction in the case of crimes on shipboard. Several important international conferences havo been held ia Italy during Ihe year. At the Geographical Congress of Venice, the Bmfico Congress of Milan, and tbe Nice Congress of Turin, this country was represented by delegates from branch- of the pil-lie service or by private citizens duly ace edited to it in an honorary capacity. It is hoped that Co. gresa will give such prominence Jo the results of their participation as they may scrub i o deserve. HOLLAND. The abolition of discriminating duties against Dutch colonial productions of the Dutch East Indies, as are imported hither from Holland, has been already considered by Congress. I trust that a t the present session tho matter may bo favorably concluded. TURKEY. The insecurity of life and property iu many parts ot Turkey has given 1 iso to correspondence with the Porte, looking particularly to the better protection of Amerieau missionaries in the empire. The condemned murderer of the eminent missionary, Dr. Justin VV. Parsons, kM not jot been executed, although

this Government has repeatedly demanded his punishment SWITZERLAND. The Swiss Government has solicited tho good offices of onr diplomatic and consular agents for the protection of its citizens in countries where it is not itself represented. This request has, wiibin proper limits, been granted. Our agents in Switzerland have been instructed io pi om5H ugumst the conduct of the authorities of certain communes in permitting the emigration to this country of criminals, and to other objectionable persons. Several such porhons, through the. co-operation of the Commissioners of Emigration at New York, have been sent back by the steamers whioh brought them. A continuance of the course may prove a more effective remedy than diplomatic remonstrance. THE DANUBIAN STATES. Treaties of commerce and navigation and for the regulation of Consular privileges has been concluded with Roumama and Servia dace their admission into the family of European States. MEXICO. As is n tural with contiguous States having like institutions and like aims of advancement and development, the friendship of the United States and Mexico has been constantly maiiitained. The Government has 10-. tno occasion of encouraging the M xican Government to a beneficial realization of the mutual advantage! which will result from more intimate commercial intercourse, and from the opening of the rich interior of Mexioo to railway enterprise. I deem it important that means be provided to r. strain the lawlessness so common on the rioniier, and to suppress the forays of the re-i i v-ition Indians on either side of the Rio Grande. CENTRAL AMERICA. The neighboring States of Central Amerioa have preserved internal peace, and their outward relations toward us have been those of intimate friendship. There are encouraging signs of their growing disposition to subordinate their local interests to those which are oomuion to them by reason of their geographical rol tions. The boundary question between Guatemala and New Mexico has afforded this Government an opportunity to exercise its good offices for preventing a rupture between those States, and for procuring a peaceful solution of the question. I cherish a strong hope that in view of our relations of amity with both countries our friendly counsels will prevail. The Costa Rica Government lately formed an engagement with Colombia for settling, by arbitral on, the boundary question between those countries, providing that the part of the arbit rants should be offered succesively to the King of the Belgians, the King of Spain and the President of the Argentine Confederation. The King of the Belgians ha-i declined to act, but I am not as yet advised of the action of the King of Spain. As we have certain interests in the disputed territory which aro protected by our treaty engagement with one of the parties, it is important that the arbitration should not without our consent affect our rights, and this Government has accordingly thought proper to make its views known to tiie parties to the agreement, and to intimate them to the Belgian Government. THE COLOMBIAN GOVERNMENT. The questions growing out of the proposed inter-oceanic water way across the Isthmus of Panama are of grave national importance. This Government has not been unmindful of t lie solemn obligations imposed upon it by its compact of 18-16 with Colombia as the independent and sovereign mistress of the territory crossed by the canal, and has sought to render them effective by fresh engagements with the Colombian republic, looking to their practical execution. The negotiations to this end, after they had reached what appeared to be a mutually-satisfactory solution here, were mot in Colombia by a disavowal of tho powers which its envoy had assumed, and by a proposal for renewed negotiations on a modified basis. Meanwhile this Government learned that Colombia had propo ed to the European powers to join in a guarantee* of the neutrality of the proposed Panama Council, a guarantee which would be in direct contravention of onr obligations aB tiie scic guarantee of the integrity of Colombian territory and of the neutrality of the canal itself. My lamented predecessor felt it his duty to place before the European powers the reasons w inch make the prior guarantee of the United States indispensablo, and for which the interjection of any foreign guarantee might be regarded as a superfluous and unfriendly act. THE CLAYTON-BULWER TREATY. Foreseeing the probable reliance of the British Government on the provisions of the Clay-ton-Bulwor treaty of 1850, as affording room for a share in the guarantees which the United States covenanted with Colombia four years before, I have not hesitated to supplement tho action of my predecessor by proposing to her Majesty's Government the modification of that instrument, and the abrogation of such clauses thereof as do not comport with obligations of the United States toward Colombia, or wiili the vital needs of the two friendly parties to tho compact. CHILI AND PERU, This Government sees with great concern the continuance of hostile relations between Chili, Bolivia and Peru. An early peace be--1 v. t en these republics is much to be desired, not only that they may themselves be spared further misery and bloodshed, but because their continued antagonism threatens consequences which are in my judgment dangerous to tho inters-ill of republican government on thiß continent, abd calculated to de-troy the best elements of our free and peaceful civilization. As in the present excited condition of popular feeling in those countries there has been serious misapprehensions of the position of the United States, and as soparate diplomatic intercourse with each through independent Ministers is sometimes subject, owing to the want of prompt reciprocal communication, to temporary misunderstanding, I have deemed it judicious at the present time to send a special envoy accredited to all and each of them, furnished w-ith general instructions, which will, I trust, enable him to bring these powers into friendly relations. THE GENEVA AWARD. At its last extra session the Senate called for the text of the Geneva Convention for the ret es of the wounded in war. 1 trust this action foreshadows snch interest in the subject as will result in the adhesion of the United Stab sto that humane and commendable engagement. 1 regret that tho commercial interests between THE UNITED STATES AND BRAZIL, from which great advantages were hoped a year ago, hav-:i suffered from the withdrawal of the American line of communication between Brazilian ports and our own. 1 lirough the efforts of our Minister Resident at Bueuos Ayres and the United Btates Minister at Santiago, a treaty has been concluded betvv. en THE ARGENTINE REPUBLIC AND CHILI, disposing of tho long-pending Patagonian boundary question. It is a matter of congratulation th-t our Government lias been afforded tho oppo: tun'-ty of successfully exerting its good mt’nence for the prevention of disagreements between the republics of the American continent. VENEZUELA. The Government of Venezuela maintains its attitude of warm friendship, and continues w Mi great regularity its payment of the m 'iiihty quota of the diplomatic debt. Without ; uggestmg the direction in which Congress should set. I ask attention to tiie pending questions affecting the distribution of tho sums thus far received. The relations between Venezuela and Fiance, growing ont of the same debt, have been for some time past in an unsatisfactory stilt", and ibis Government., as the neighbor of one of the largest creditors of Venezuela, has interposed itself with the French Government with the view of producing a friendly and honorable adjustment. I am glad to inform yon that THE TREATIES LATELY NEGOTIATED WITH CHINA have been duly ratified on both sides and tho exchange made at Peking. Legislation is necessary to carry its provisions into effect. The ' prompt and friendly spirit with which tho Chinese Government, at the request of the United States, conceded the modification of existing treaties should secure careful regard for the interests and susceptibilities of that Government in the re-enactment of - any laws relating to Cuiuese immigration. These classes of treaties which forbid the participation of citizens or vessels of the United States in the opium trade will doubtless receive your approval, and they will attest the fencero interest, which our people and Government have in the commendab’e efforts of the Chinese Government to put a stop to this demoralizing and destructive traffic. In relation both to China 'and Japan, some changes ere desirable in our present system of consular jurisdiction. I hope at some future time to Jay before you a scheme for its improvement in tho entire East JAPAN. The intimacy between our country and Japan, tho most advanced of the Eastern

nations, continues to be eordiaL lam advised that the Emperor contemplates the establishment of a constitutional Government, and that he has already summoned a parliamentary congress for the purpose of effecting a change. Such a remarkable step toward complete assimilation with Western systems, cannot fail to bring Japan into closer and more beneficial relationship with ourselves, as the chief Pacific power. _ - A question has arisen in relation to Die exercise in that country of the JUDICIAL FUNCTIONS conferred upon our Ministers and Consuls. The indictment, trial and conviction in the Consular Court at Yakohama, of John Ross, a mcrohant seaman on board an American vessel, have made it necessary for the; Government to institue a careful examination, and the nature and methods of tthis jurisdiction. It appears that Boss was regularly shipped under the flag of the Urnted States, but was by birth a British subject. My predecessor felt it his duty to maintain the position that during his servioe as a regularlyshipped seaman on board an American merchant vessel, Ross was subject to the laws of the service and to the jurisdiction of the United States Consular authorities.. I renew the recommendation which has heretofore been urged by the Executive upon the attention of Congress, that after tlje reduction of such amount as may be found due to American citizens, the balance of THE INDEMNITY FUNDS heretofore obtained from China and Japan, and which are now in the hands of the State Department, be returned to the Governments of those countries. The King of HAWAII, in the course of his homeward return after a journey around the world, has lately visited this country. While our relations with that Kingdom are friendly, this Government has viewed with concern the efforts to seek replenisliment of the diminishing population of the i-lauds from outward sources to a degree which tuay impair the native sovereignty and independence in which tho United States was among the first to testify a lively interest. OTHER NATIONS. Relations of unimpaired amity have been maintained throughout the year with the respective Governments of Austria, Hunguary, Belgium, Denmark, Hayti, Paraguay and Uruguay, Portugal and Sweden and Norway, and tl is may also be said of Greece and Ecuador. Although our relations with those States liave for some years Leon severed by the withdrawal of appropriations lor diplomatic representatives at Athens and Quito, it seemg expedient to restore those missions, even on a reduced scale, and I decidedly recommend such a course with regard to Ecuador, which is likoly, m the near future, to play an important part among the nations of the Southern Pacific waters. The State Department still continues to pubI’sh to the country the TRADE AND MANUFACTURING REPORTS received fro m its officers abroad. The success of this course warrants its continuance and such appropriation as may be required to meet the rapidly increasing demand for those publications. With special reference to the Atlanta Cotton Exposition the October number of the reports was devoted to a valuable collection of pa; era on the cotton-goods trade of the world. TIIE INTERNATIONAL SANITARY CONFERENCE, for which, in 1879, Congress made provision, assembled in this city early in January last, and tho session! wore prolonged until March. Although it reached no specific conclusion affecting the future action of tho participant powers, the interchange of views proved to be most valuable. The t all protocols of the sessions havo been already presented to the Senate. As pertiuent to this general subjeot I call your attention to the operations of the NATIONAL BOARD OF HEALTH, established by act of Congress, approved March 3, A. D. 1879. Its sphere of duty was enlarged by tho act of June 2, in tho same year. By the last-named act the board was required to institute such measures as might he deemed necessary for preventing the introduction of contagious or infectious diseases from foreign countries into the United States, or from one State into another. The execution of the rules and regulations prepared by the board and approved by my predecessor has done much to arrest the progress of epidemic disease, and has thus rendered substantial service to the nation. THE INTERNATIONAL SANITARY CONFERENCE to which I have referred adopted a form of a bill of health to be used by all vessels seeking to enter the ports of the countries whose representatives participated in its deliberations. The form has been preserved by the National Board of Health, and incorporated with its rules and regulations, which have been approved by me in pursuance of law. The health of the people is of supremo importance. All measures looking to their preservation against the spread of contagious diseases and to the increase of our sanitary knowledge for such purposes, deserves the attention of Congress, these international rules differ but slightly from our own. They Lave been adopted by the Navy Department for the goverannee of the war-ships of the United Btates on the high seas and in foreign waters, and through the action of the State Department in disseminating the rules, and in acquainting the shipmasters with the option of conforming to them without tho jurisdictional waters of the United States. Teey are now very generally known and obeyed. THE REPORT .OF TTCE SECRETABT OF THE TREASURY. i' presents, in detail, a highly satisfactory exbi it of the state of the finances and the condition of *the various branches of the public service administered by that department. The ordinary revenues from ill surces for the fiscal year ending June 10, 1881, were from customs, $.198,159,676.02 ; from internal revenne, $135,264,385.51 ; from public lands, $222,186,317; from tax on circulation and deposits of national hanks, $8,116,11 .72 ; from repayment of interest bv Pacific railway companies, SBIO,833.80; from sinking fund for Pacific railway companies, $805,180 54; from customs, fees, fit ns penalties, etc., $1,225,514.86; from fees, •oiisuinr letters, patents and lands, $22,244,384.99 ; for the military establishment, including ■ivernnd harbor improvements and arsenals, $40,466,460.55; for the naval establishment, including vessels, machinery and improvements at navy yards, $15,086,671.66 ; for miscellaneous expenditures, including public buildings, lighthou es and collecting the revenue, $41,837,280.57 ; for expenditures on account of tho District of Columbia, $3,543,912.03: for interest on the public debt, $82,5 8,741.13 ; for premium on bonds pur-clni-T-d, $1,061,248.78. Total ordinary expenduiites, $200,712,887.59, leaving a surplus of revenue of $100,069,464.98, which was applied as follows : To the redemption of bonds for the /•inking fund, $74,371,200; fractional currency for the sinking fund, $109,001.05 ; loan of February, 1861, $7,418.000; 10-40’s of 1864, $2,016.150; 5-20’s of 1862, $18,300 ; 6-20’s ot 18*14, $3,400; 5-20’s of 1865, $37,300; c,o-isois of 1865, $143,150,000 ; consols of 1867, $95,925,000 ; consols of 1868, *nd-minty stock, $400,000 ; old, demand compouu 1 interest and other notes. $18,330, and to tbe increase of cash in the treasury, $14,636,023.93; total $100,069,404.98. THE REQUIREMENTS OF THE SINKING FUND for the year amounted to $9,78,606,402, which sum included a balance of $49,509,128.78 not provided for during the previous fiscal year. Xi:e sum of $74,480,201.05 was applied to this fund, which left a deficit of $16,305,873.47. REVENUES. The increase of tho revenues for 1881 oyer those of the previous year was $29,852,901.10. It is estimated that the receipts during the present, fiscal year will reach $400,000,000 and tho expenditures $270,000,000, leaving a surplus of $130,000,000 applicable to the sinking fund and the redemption of the public debt. SILVER CERTIFICATES. I approve the recommendation of the Secretary of the Treasury that provision be made for’the early retirement of silver certificates, and that tiie act requiring their issue be repealed. They were issued in pursuance of the policy of the Government to maintain silver at near the gold standard, and were accordingly reciivable for all customs, taxes and pubiio duos. About $66,000,000 of them are now outstanding. They formed an unne essary addition to the paper currency, a sufficient amount of which may be readily supplied by the national banks. In accordance with the act of Feb. 28, 1878, the Treasury Department has monthly caused at least $2,000,000 in value of silver bullion to be coined into standard silver dollars: 102,000.000 of these dollars have been coined, while only about 32.000,000 a>e in circulation, for the reasons which he specifies. COINAGE. I concur in the Secretary’s recommendation that the provision for coinage of a fixed amount each month be repealed, and that hereafter only so much be coined as shall be necessary to supply the demand. GOLD CERTIFICATES. The Secretary advises that the issue of gold

certificates should not for the present be resumed, and suggests that the national banks may properly be forbidden by law to retire their cuironcy except upon reasonable notice of their intention so to do. Such legislaUon would seem to be justified by the recent action of certain banks on the oocasion referred to in the Secretary’s report. FRACTIONAL CURRENCY. Of the fifteen millions fractional currency still outstanding only about eighty thousand has been r< deemed the past year. The suggestion (hat the amount may properly be dropped from future statements of the public debt seems worthy of approval;‘ so also does the suggestion of the Secretary as to tne advisability of relieving the calendar of the United States courts in the Southern District of New York by the transfer to another tribunal of the uumorons suits pending there against collectors. THE REVENUE FROM CUSTOMS for the past fiscal year was $19,159,676.02, an increase of $11,627,611.42 over that of the preceding year; $33,098,562.39 of tliis amount was collected at the port of New York, leaving $30,251,113.68 as the amount collected at all jthe other ports of the country. Of this sum $47, 977 137.62 was collected on sugar, nielado and molasses; $27,286,624.78 on wool and its manufactures; $21,462,534.34 on iron and steel and manufactures thereof, $19,038,665 on manufactures of silk ; $10,825,115.21 on manufactures of cotton, and $6,463,643.04 on wines and spirits, making the total revenue from these sources $133,058,720.81. The expenses of collection for the past year were $6,410,345.20, an increase over the preceding year of $337,410.04. Notwithstanding the increase in revenue from customs over the preceding year, the gross value of the imports, including free goods, decreased over $25,000,000. The marked decrease was in the value of unmanufactured wool, $14,023,682, and m that of scrap and pig iron, $12,810,671. The value of imports (sugar), on tho other band, showed anincroase of $7,457,474, of steel rails $4,345,521, of barley $2,154,204, and of steel in bars, ingots, etc., $630,046. Compared with the previous year, there was in increase of $676,738,688 in the value of exports of merchandise, and a decrease of $25,•!9 ',llß in the value of imports The annual average of increase of imports of merchandise over exports thereof for ten years previous to fun** 39, 1873, was $104,805,922, but for the last six years there has been an excess of exports over imports of merchandise amounting o $1,180,668,103, an annual average of $196,668,017. Tub specie value of the expoitsof lomestic merchandise was $376,616,473 in 1370. and $883,975,947 in 1878, an increase of $307,305), 47*, or 13.5 ,0 r cent. The value of imports was $435,958,108 in 1870, and $642,664,627 in 1381—an increase of $206,782 20, or 47 per sent, during each year. From 1862 to 1879, inclusive, the exports for specie exceeded their imports. The largest excess of such exports over imports was cached daring the year 1864, when it amounted to $92,204,929, hut during tho year ending June 30, 1880, the imports of coin and bullion exceeded tho exports by $75,891,391, *nd during the last fiscal year the excess of mports over exports was $91,163,659. In the last annual report of the Secretary of the Treasury the attention of Congress was •■ailed to tne fact that $469,651,050 in 5 per centum bonds and $293,573,759 in 6 per centum bonds would become redeemable during the year and Congress was asked to authorize the REFUNDING of those bonds at a lower rate of interest. The bill for such refunding having failed to become a law, the Secretary of the Treasury in April last notified the holders of the $195,690,400 6 per-eentum bonds then outstanding that the bonds would be paid at par on tho Ist day of July following, or that they might be “ continued” at tbe pleasure of "the Government to bear interest at the rate of 3>j percentum per annum. Under this notice $178,055,150 of the 6-per-centum bonds were continued at tbe lower rate, and $17,635,250 were redeemed. In the month of May a like notice was given respecting the redemption or continuance of the $439,841,350 of 5-per-centum bonds then outstanding, and of these $401,404,000 wore continued at 3>f per centum per annum, and $38,336,456 redeemed. The 6-per-centum bonds of the loan of Feb. 8, 18G1, and of the Oregon war debt, amounting together to $14,125,800, having matured during the year, the Secretary of ti;e Treisury gave notice of his intention to redeem the same, and such as have been presented has been paid from the surplus revenue. Tl ere have also been redeemed at par $16,179,1( 0 of the 3>£ per centum “continued” bonds, making a to al of bonds redeemed, or which have ceased to bear interest. THE REDUCTION OF THE ANNUAL INTEREST on the public debt through these transactions is as follows : Bv reduction of interest to 3>£ per cent, $1,047,395,227, by redemption of bonds $635,234,000 ; total, $1,6845,629,225. The 31, < per centum bonds being payable at the pleasure of the Government, are available for tiie investment of surplus eevenue without the payment of premiums. Unless these bonds can be funded at a muoli lower rate of interest than they now bear, I agree with the Secretary of the Treasury that no hgisla'ion respecting them is destrabie. It is a matter for congratulation that the busi-ne-a of the Country has been so prosperous during tne past year as to yield by taxation a targe surplus of income to the Government. If tbe revenue laws remain unchanged, this surplus must year by year increase on account of the reduction of tho public debt and its burden of interest, and because of the rapid increase of our population. In 1860, just prior to the institution of our interna! revcuuo system, our population but slightly exceeded 3 J,000,000. By tbe census of 1880 it is now found to exceed 50,000,000. It is estimated that even if the annual receipts and expenditures should continue as at present tho entire debt could be paid in ten years. In view, however, of the heavy load of taxation which our people have borne, we may well conaider whether it re not the part of wisdom to reduce the revenue, even if we delay a little tho payment of the debt. It seems to me that the time has arrived when the peoplo may justly demand some relief lrom their present enormous burden, and that by due economy in the various branches of the public service this may readily bo affoi dcd. I therefore concur with the Secretary in rec inmending THE ABOLITION OF ALL INTERNAL REVENUE TAXES, except those upon . tobacco in its various forms, and upon disti led spirits and fermented liquors, and except also the special tax upon the manufacturers of and dealers in such a; tides. Tue intention of the hitter tax is desirable as affording the offietis of tho Government a proper supervision of these articles for the prevention of fraud. I agree with the Secretary of the Treasury that the Jaw imposing a stamp tax on matches, proprietary articles, playiug cards, checks and drafts may, with propriety, be repealed, and the law also by which banks and bankers are assessed upon their capital and deposits. There seems to be a general sentiment in favor of this course. In the present condition of our revenues the tax upon the deposits is especial]# unjust It was never imposed in this country until it was demanded by the necessities of war, was nev?r exacted, I believe, in any other country, even in its greatest exigencies. Bankers are required to secure their circulation by pledging with the Treasurer of the United States bonds of tbe general Government. The interest upon these bonds, which at the time when the tax was imposed was 6 per cent., is now in most instances 3% per cent, and besides, the entire circulation was origiually limited by law, and no increase was allowable. When the existing banks had practically a monopoly of the business there was force in the Suggestion that for the franchise to the favored grantees the Government might very properly exact a tax on circulation, but for years the system has been free and the amount of circulation regulated by the pubiio demand. The retention of this tax has been suggested as a means of reimbursing the Government for the expense of printing and furnishing the circulating notes. If the tax should be repealed it would certainly be proper to require tho national banks to pay the amount of such expense to the Comptroller of the Currency. It is perhaps doubtful whether the immediate reduction of the rate of TAXATION UPON LIQUORS AND TOBACCO is odvisable, in view of the drain upon the treasury which must attend the payment of arrears of pensions. A comparison,, however, of the amount of taxes collected under the varying rates of taxation which have at different times prevailed suggests the intimation that some reduction may soon be made without diminution of the revenue. THE TARIFF LAWS also need revision, but that a due regard may be paid to the conflicting interests of onr citizens, important changes should be made with caution. If a careful revision cannot be made at this session, a commission, suoh as was lately approved by the Senate and ie now reborn*

mended bv the Secretary of the Treasury, wonld doubtless lignten the labors of Congress whenever this subject shall be brought to its consideration. SECRETARY OF WAR. Tbe accompanying report of the Secretary of War will make known tho operations of that department for tbe past year. He suggests measures for promoting the efficiency of the army by adding to the number of its officers, and recommend* the legislation necessary to increase the number of enlisted men to 30,000, the maximum allowed by law. This he deems necessary to maintain quietness on onr evershifting frontier, to preserve peace and suppress disorder and marauding in the new settlements ; to protect settlers and their property against Indians, and Indians against the encroachments of intruders; and to enable peaceable immigrants to establish homes in tho most remote parts of our country. The army is now necessarily scattered over such a vast extent of territory, thc.t whenever an outbreak occurs, reinforcements must be hurried from many quarters over great distances, and always at heavy cost for transportation of men, horses, wagons and supplies. I concur ia the recommendation of the Secretary for increasing the army to the strength of 30,000 enlisted men. It appears by the Secretary’s report that in the absence of disturbances on the frontier, the troops have been actively employed in collecting Indians hitherto hostile and locating them on their proper reservations ; that Sitting Bull and his adherents are now prisoners at Fort Randall; that the Utes have been moved to their new reservation in Utah; that during the recent outbreak of the Apaches it was necessary to reinforce the g. raison in Arizona by troops withdrawn from New Mexico, and that some Apaches are now held prisoners for trial, while some have escaped and the majority of the tribe are now on their reservations. There is need of legislation to prevent intrusion upon the lands set apart for the Indians. A large military force, at great expense, is required to patrol the boundary line between Kansas and the Indian Territory. The only punishment that at present can be inflicted is tho forcible removal of tlio intruders,and the imposition of a pecuniary fine which, in most cases, it is impossible to collect. There should be a penalty bv imprisonment in such cases. • SIGNAL SERVICE. The separate organization of the Signal Service is used by the Secretary of War, and a full statement of the advantages of snch permanent organization is presented in the report of the Chief Signal Officer. A detailed account of the useful work performed by the Signal Corps and the Weather Bureau are also given m that report. THE INDIAN BUREAU. I ask your attention to the statements of the Seer* tary of War regarding the requisitions frequently made by the Indian Bureau upon the Subsistence Department of the army for the casual support of bands or tribes of Ind aris for which appropriation are exhausted. The War Department should not bo left, by rea-ouof inadequate provision for the Indian Bureau, to contribute for the maintenance of the Indians, COAST DEFENSES. The report of the Chief of Engineers furnishes a detailed account Qf the operations for tho improvement of rivers and harbors. I commend to your attention the suggestions contained in this report in regard to the condition of our fortifications, especially our coast defenses, and recommend an increase of the strength of the engineer battalion, by which the efficiency of our torpedo system would be improved. INTERNAL IMPROVEMENT. I also call your attention to the remarks upon the improvement of the South Pass of tho Mississippi river, the proposed free bridge at Georgetown over the Potomac river, the im•portance of completing at an early day the north wing of the War Department building, and other recommendaLions of the Secretary of War which appear in his report. The actual expenditures ol this department for the fiscal year ending June 30, 1881, were $42,122,201.39. The appropriations for the year 1882 were $44,889,725.42. The estimates for 1883 are $44,541,276.91. THE NAVY. Tho report of the Secretary of the Navy exhibits the condition of that branch of the service, and presents valuable suggestions for its improvement. I call your especial attention also to the appended report of the Advisory Board which ho convened to devise suitable measures for increasing t lie efficiency of the navy, and particularly to report as to the character and number of vessels necessary to place it upon a footing commensurate with the necessities of the Government. I cannot too strongly urge upon you my conviction that every consideration of national safety, economy and honor imperatively demands a thorough rehabilitation of our navy, with a just appreciation of the tact that compliance with the suggestion of the head of that department and of the Advisory Board, must involve a large expenditure of tho public moneys. I earnestly recommend such appropriation as will accomplish an end which seems to lie so desirable. Nothing can be more inconsistent with true public economy than the withholding of the means necessary to accomplish the objects intrusted by the constitution to the National Legislature. One of these objects, and one which is of paramount importance, is declared by our fundamental law to be the provision for the “ common defense.” Surely nothing is more essential to the defense of the United States and of all our people thau the efficiency of our navy. “IN TIME OF PEACE PREPARE FOR WAR.” We nave for many years maintained with fore gn governments the relations of honorable peace, and that such relations may be permanent is desired by every patriotic citizen of the republic. But if we read the teachings of history we shall not forget that in the life of every nation emergencies may arise when a resort to arms can alone save it from dishonor. No danger from abroad now threatens this people, nor have we any cause to distrust the friendly proso3sions of other governments. But for avoiding as well as for repelling dangers that may threaten in future we must be prepared to face any policy which we think wise to adopt. We must be ready to defend our harbors against aggression, to protect, by the distribution of our ships of war over the highways of commerce, the varied interests of our foreign trade, and the person and property of our citizens’abroad; to maintain everywhere the honor of our flag and the distinguished position which we may rightfully claim among the nations of the world. POSTAL MATTERS. The report of the Postmaster General is a gratifying exhibit of tho growth and efficiency of the postal service. The receipts from posUge and other ordinary sources during tho past fiscal year were $30,489,816.58. The receipts from the moneyorder business were $295,581.39, making a total of $36,785,397.97. The expenditure for the fiscal year was $68,251,736.46. The deficit supplied out of the general treasury was $2,481,129.35, or 63 percent, of the amount The receipts were $3,469,918.63 in excess of those of the previous year, and $4,575,397.97 in excess of the estimate made two years ago, before the present year of business prosperity had fairly begun. The whole number of letters mailed in this country in the last fiscal year exceeded 1,000,0 10.000. The registry system is reported to be in excellent condition, having been remodeled during the past four years with good results. The amounts of registration fees collected during the last fiscal year were $712,882.20—an increase over the fiscal year ending June 30,1877, of $435,413.40. The entire number of letters and packages registered during the year was 8,338,919, of which only 2,061 were destroyed or lost in transit. The operations of tho money-order system aro multiplying yearly, under the impulse of immigration, of the rapid development of the newer States and Territories, and the consequent demand for additional means of inter-communication and exchange. During the past year 338 additional money-order offices have been* established, making & total of 5,499 in operation at the date of this report. During the year the domestic money orders aggregated in value $10,507,676,935. A modification of the system is suggested reducing the foes for money orders not exceeding $5 from 10 cents £0 5 cents, and making the maximum limit SIOO in place of SSO. Legislation for tho disposition of unclaimed money orders in the possession of the Post Office Department is recommended, in view of the fact that their total value exceeds $1,000,000. The attention of Congress is again pointed to the subject of establishing a system of savings depositories in connection with the Post Office Department. THE STATISTICS OF MAIL TRANSPORTATION show that during the past year railroad routes have been increased in length 6,219 miles, and in cost $111,382, while steamboat routes have been decreased in length 2,182 miles, and in cost $134,064. The so*called star routes have been decreased in length 9,940 miles, and in

cost $364,144. Nearly all of the more expensive routes have been superceded by railroad service. The cost of the star service must, therefore, rapidly decrease in the Western States and Territories. The Postmaster General, however, calls attention to the oonstanUy-increasing oost of the Bailway Mail Service as a serious difficulty in the way of making the department self-sus-taming. Our postal intercourse with foreign countries has kept pace with the growth of the domestic service. Within the past year several countries and colonies have declared their .adhesion to the Postal Union. It now includes all those trhich have an organized postal service, except Bolivia, Costa Rica, New Zealand and the British colonies in Australia. As has been already stated, great reductions have been made in the expense of THE STAR-ROUTE SERVICE. The investigations of the Department of Justice and Postoffice Department have resulted in the presentation of indictments against persons formerly connected with that service, accusing them of offences against the United States. I have enjoined upon the officials who are charged with the conduct of the cases on the part of the Government and upon the eminent counsel, who before my accession to the Presidency, were called to their assistance, the duty of prosecuting with the utmost rigor of the law all persons who may be found chargeable with frauds upon the postal service. The Acting Attorney General calls attention to the necessity of modifying the present system of COURTS OF THE UNITED STATES, a necessity due to the large increase of business, especially in the Supremo Court. Litigation in our Federal tribunals became greatly expanded after the close of the late war. So long as tliat expansion might be attributable to the abnormal condition in Which the community found itself immediately after the return of peace, prudence required that no change be made iu the constitution of our judicial tribunals. But it has now become apparent that an immense increase of litigation lias directly resulted from the wonderful growth or development of the country. There is no ground for belief that the business of the United States courts will ever be less in volume than at present. Indeed, that it is likely to be much greater is generally reeognized by the bench and bar. In view of the fact that Congress has already given much consideration to thisubject, I make no suggestion as to detail, but express the hope that your deliberations may result 111 such legislation as will give early relief to our overburdened court. ARIZONA. The Acting Attorney General also calls attention to the disturbance of the public tranquillity during the past year in the Territory of Arizona. A band of armed desperadoes known as “cow-boys,” probably numbering from 50 to 100 men, have, been engaged for months in committing acts of lawlessness and brutality which the local authorities have been unable to repress. The depredations of these “cow-boys” have also been extended into Mexico, whicL the marauders reach from the Arizona frontier. With every disposition to meet the exigencies of the case, I am embarrassed by lack of authority to deal with them effectually. The puuishment of crimes committed within Arizona, should, ordinarily, of course, bo left to the Terr.tori d authorit.es. But it is worthy ol consideration whether acts which necessarily tend to embroil the United States with neighboring governments should not be declared crimes against the Uuited States. Some of the incursions alluded to may perhaps be within the scope of the law, Revised Statures, section 5,286, forbidding “ Military expeditions or enterprises” against friendly states. But in view of the speedy assembling of you> body, I have preferred to await such legislation as in your wisdom the occasion may seem to demand. It may, perhaps, be thought proper to provide that the setting on foot within our own territory es brigandage and armed marauding expeditions against friendly nations and their citizens shall be punished as an oifense against the United States. I will add that, In the event of a request from the Territorial Government for protection by tue United States against “domestic vio tence,” this Government would be powerless to render assistance. Tht aot of 1795, chapter 36, passed at tin time when Territorial Governments received little attention from Congress, enforced this duty of the United States only as to State Governments; but the act of 1807, chapter 39, ap plied also to Territories. This law seems to nave rem lined in force until the revision of the statutes, when provision for the Territories wa> dropped. lam not advised whether this alteration was intentional or accidental, but as i. seems to me that the Territories should be offered the protection which is accorded to B,ates by the constitution, I suggest legislation to that end. It seems to me that whatever views may prevail as to the policy of recent legislation by which the army has ceased to bo a part ol posse comitatus, an exception might well be made for permitting tne military to assist the civil territorial authorities in enforcing tin laws of the United States. This use of tin army would not seem to be within the alleged evil against which that legislation was aimed, from sparseness of population and other circumstances. It is often quite impracticable to summon a posse in places where officers ol £,stice require assistance, and where a miliry force is within easy reach. THE REPORT OF THE SECRETARY OF THE INTERIOR, with accompanying documents, presents an elaborate account of the business of that de partment. A summary of it would be too extended for this place. I ask your careful attention to the report itself. Prominent among the matters which challenge the attention of Cougress at its present session is THE MANAGEMENT OF OUR INDIAN AFFAIRB. While this question has been a cause of trouble and embarrassment from the infancy of the Government, it Is but recently that any effort has been made for its solution, at once ' serious, determined, consistent and promising success. It has been easier to resort to convenient makeshifts for tiding over the temporary difficulties, than to grapple with the great permanent problem, and accordingly the easier course has almost invariably been pursued. It was natural at a time when the national territory seemed almost illimitable, and contained many millions of acres far south of the bounds of civilized settlement, that a policy should have been initiated which, more than aught else, has been the fruitful source of our Indian complications. I refer, of course, to the policy of dealing with the various Indian tribes as separate .in tonalities ; of regulating them by treaty st pulations to the occupancy of immense reservations in the West, and of encouraging them to live undisturbed, by any earnest and well-directed efforts, and to tiring them unuer me mnuences or civilization, The unsatisfactory results which have sprung from this policy are beccming apparent to all. As the white settlements have crowded the borders of the reservations, the Indians, sometimes contentedly and sometimes against thenwill, have been’ transferred to other hunting grounds, from which they have been again dislodged whenever their new-found homes have been desired by the adventurous settlers. These removals, and the frontier collisions by which they have often been preceded, have led to frequent and disastrous conflicts between the races. It is profitless to discuss here which of them has been chiefly responsible for the disturbances whose recital occupies so large a space upon the pages of our history. We have to deal with the appalling fact that though thousands of lives have been sacrificed and hundreds of millions of dollars expended in the attempt to solve the Indian problem, it had until the last few years seemed scarcely nearer a solution than it was half a century ago. But the Government has of late been cautiously but steadily feeling its way to the adoption of a policy which has already produced gratifying results, and which, in my judgment, is likely, if Congress and the Executive accord in its support, to relieve us ere long from the difficulties which have hitherto beset ns. For the success of the efforts now making to introduce among the Indians the customs and pursuits of civilized life, and gradually to absorb them into themassof our citizens, sharing their rights and holden to their responsibilities, there is imperative need for legislative action. My suggestions in that respect will be chiefly such as have been already called to the attention of Congress, and have received, to some extent, its consideration. First, I recommend the passage of an act making the lews of the various-States and Territories applicable to the Indian reservations | within their borders and extending the laws of the State of Arkansas to the portion of the Indian Territory not occupied by the five civilized tribes. The Indian should receive THE PROTECTION OF THE DAW. He should be allowed to maintain in court his i-ights of person and property. He has repeatedly begged for this privilege. Its exercise would be very valuable to him in his progress toward civilization. Becond, of even greater importance, is a measuro which has been frequently reoommeaded by my prede*

cessors in office, and in furtherance of which several bills have been from time to time introduced in both houses of Congress. The enactment of a general law permitting the allotment in severalty, to such Indians at least aa deserve it, of a reasonable quantity of land, secured to to them by patent, and for their own protection made inala liable for twenty or twenty-five years, is demanded for their present welfare and their permanent advancement. Inretum for such considerate action on the part of the Government, there is reason to believe that the Indians in large numbers would be persuaded to sever their tribal relations; and to engage at once in agricultural pursuits, and that it is now for their best interests to conform their manner of life to the new order of things. By no greater inducement than the insurance of permanent title to the soil can they be led to engage iu the occupation of tilling. The well-attested reports of their increasing interest in husbandry justify the hope and belief that the enactment of such a statute as I recommend would be at once attended with gratifying results. A resort to the allotment system would have a direct and powerful influence in dissolving the tribal bond, which is a prominent feature of savage life, and which tends so strongly to perpetuate it there. Por many years the Executive, in his annua message to Congress, has urged the necessity for stringent legislation for THE SUPPRESSION OF POI.YGAMT in the Territories, especially iu Utah. The existing statute for the punishment of this odious crime, so revolting to the moral and religious sense of Christianity, has been persistently and contemptuously violated ever since its enactment. Indeed, in spite of commendable efforts on the part of the authorities who represent the Uuited States in that Territory, the law has, in very raro instances, been enforced, and, for a cause to which reference will presently be made, is E radically a dead letter. The fact that aderents of the Mormon churoh, which rests upon polygamy aa its oorner-stona, have recently been peopling in large numbers Idaho, Arizona, and other of our Western Territories, is well calculated to excite THE LIVELIEST INTEREST AND APPREHENSION. It imposes upon Congress and the Executive the duty of opposing to this barbarous system all the power which under the constitution and law they can wield for its destruction. Reference has been already made to the obstructions which the United States officers have encountered iu their efforts to punish the violations of the law. Prominent among the obstacles is the difficulty of procuring legal evidence sufficient to warrant a conviction, even in the case of the most notorious offenders. ■ Your attention is called to the opinion of the Supremo Court of the United States explaining its judgment of reversal iu the case of Miles, who had beon convicted of bigamy in Utah. The court refers to the fact that the secrecy attending the celebration of marriages in that Territory makes the suppression of that part of polygamy very difficult, and the propriety is suggested of modifying that law of evidei C i which now makes a wife incompetent to testify against - her husband. Tbis suggestion is approved. I rtoommend also the passage of an act providing- that in the Territories of theseUnitedStates the fact that a woman has been married to a person charged with bigamy shall not disqualify her as a witness upon his trial for that offi me. I further recommend legislation by whioh any person solemnizing a marriage in any of the Territories shall be required, under stringent penalties for neglect or refusal, to file a certificate of such marriage in the Supremo Court of tho Territory, sinless Congress shall make or devise cth r practicable measures for obviating the UiineulU>.B amen nave mtuorto a t olid tho el) orts to suppress this iniquity, I assure \ou of my determined purpose to co-operate with you in any lawful and discreet measures which may be proposed to that end. Although oursv'stem of government does not contemplate that the nation should provide or support a • system for the education of our people, no measures calculated to provide that gem ral intelligence and virtue upon which the rpetally of our institutions so greatly depend navd ever been regarded with indifferen: e by ither Congress or the Executive V very large portion of the pu 1 o domain has been, from time to tine, devoted o ihe promotion of tlm o ii-u of education, mere is now a special reason why, by setting apart the proceeds of the sales of public lands, or by some other meai s, (he Govirmncnt should aid the work ot education. May who now exercise the right oi suffrage are unable to read the ballot which they ca t. Upon many who had just emerged from a condition of slavery were suddenly devolved rhe responsibilities of citizenship in that portion of the country most impoverished by war. I have been pleased to learn iro n tho report of the Commissioner of Education tint there has been lately a commendable increase of interest and effort for Ihoir instruction, but all that can be done by local legislation and private generosity should be supplemented by su;h aid as can bo constitutionally afforded by the National Government. I would suggest that if any fund be dedicated to this purpose, it may be wisely distr,tinted in the different States according to the ratio of illiteracy, as by this means those locations \Riich are most m need of such assistance will reap the especial icnefits. THE REPORT OF THE COMMISSIONER OF AGRICULTURE exhibits results of experiments in which that lepartment has been engaged during the part year, and makes impor ant suggestions in reference to the agricultu a deveb pment of II e ountry. The steady increase oi our population, and the consequent addition te the number of those engaged in the pursuit Of hu - bandry, are giving to this department a growing iignitv and importance. Tho Commissioner's suggestions touching its capacity for grea er nsefulnoss deserve attention, as it more and more commends itself to the interest which it a as Croats d to promote. It appeal s from THE REPORT OF THE COMMISSIONER OF PENSIONS that since 1860 789,063 original pension claims have been filed, 450,949 of these have been allowed and inscribed on the pension roll, 72,539 have been rejected and abandoned, being 13 per cent, of the whole number of cla ms so - tied. There are now pending for settlement 266,675 original pension claims, 22.704 of which were filed prior to July 1, 1880. These, when allowed, wiil involve the payment of airears from the date of the discharge in the case of an invalid, and from the date of doath or termination of a prior right in all other cases. From all the data obtainable it is estimated that 15 per cent, of the claims now pending will be rejected or abandoned. This would show the probable rejection of 34,040 cases, and the probable admission of about 193,000 claims, all of which involve the payment of arrears of pensions. With the present force employed, the number of adjudications remaining the same, and no new business intervening, this number of claims (193,000) could be acted upon in A PERIOD OF SIX YEARS, and, taking Jan. 1, 1161, as a near period from which to estimate in each case an average amount of arrears, it is found that every caso allowed would require for the first payment upon it the sum of $1,350. Multiplying this amount by the whole number of probable admissions gives $260,000,000 BA the sum required for first payments. This represents the sum which must be paid upon ciaims which were filed before July 1, 1880, and are now pending and entitled to the benefits of Arrears act. From this amount ($250,000,000) maybe deducted from ten to fifteen millions for oases when, the claimant dying, there is no person who under the law would be entitled to succeed to the pension, leaving $235,000,000 as the probable amount to be paid. Iu these estimates no account has been taken of the 38,500 oases filed since Jane 30, 1880, and now pending, whioh must receive attention, is current business, but which do not involve payment of any arrears beyond the date of filing the claim. Of this number it is now estimated that 86 per cent wilt be allowed, as has been stated. With the present fore* of the Pension Bureau, 675 clerks, it is estimated that it will take six years to dispose of the claims now pending. It is stated by the Commissioner of Pensions that if an addition of 256 clerks (increasing the adjudicating force rather than the mechanical), double the amount of work coaid be accomplished, so that these cases could be acted upon within three years. Aside from the consideration of justice which may be urged for a speedy settlement of the claims now on the files of the Pension Office, it is no lees important on the score of economy, inasmuch as fully one-third of the clerical force of the office is now wholly occupied in giving attention to correspondence with thousands of claimants whose cases have been on the files for tho past eighteen years. The fact that a sum so enormous may be expended by the Government to meet the demands for arrears of pensions is an admonition to Congress and the Executive to give cautious consideration to any similar project in the future. The great temptation so the presentation of tictitioiw

claims afforded by the fact that tho average sum obtained upon each application is $1,300, leads me to suggest the propriety of making smile special appropriation for the prevention of fraud. INTERNAL IMrROVEMENTS. I advise appropriations for Buch internal improvements as the wisdom of Congress may seem to be of public importanoo. The necessity of improving tho navigation of the Mississippi rivej justifies a special allusion to that subject I suggest tho adoption of some measure for removal of obstructions which now impede the navigation of that great channel of commerce. THE CIVIL SERVICE. In my letter accenting tho nomination for the Yieo Presidency 1 stated that in my judgment “no man should bo iucumbont of an office tho duties of which he is for any cause unfit to perform, or who is lacking iu the ability, fidelity or integrity which a pioper administration of such office demands.” This sentiment would doubtless meet with general acquiescence, but opinion has been widely divided upon the wisdom and impracticability of tho varous reformatory schemes whioh havo been suggested, and of certain proposed regulations governing appointments to publio office. The efficiency of snob regulations has been d.s rusted mainly becauso they havo seemed to exalt mere educational and abstract pats atovo general business capacity, and evop tpooial titn. ss for the work in hand. It seems to mo t iat tne rules tliat should lie applied to the management of the | u die si r vice “may properly conform, in the main, to such as regulate tho condition of successful private business. Original appointments should be based upon ascertained 1 1 less. Tho tenure ol office should be stable; positions of responsibility should, so far as practicable, be filled by the promotion of worthy and efficient o fleers. Tho investigation of al' e mipluiuts and the punishment of all misconduct should be prompt and thoio- g.i.” The views expressed in tho foiegoing letter are those which will govern my administration of the executive office. Tlioy are doubts ss shared by all intelligent and patriotio citizi ns, however divergent in their opinion as to t io best methods of putting them into pi&ci.aal operation. For example, the assertion that original appointments should be based upon ascertained til ness "is not opeu to dispute,” but the question how, in paactioe, such lUn-ss can be most effectually ascertained is one which has for years excited interest and discussion. Tho measure which, with slight variations in its details, lias lately b. eu urged upon tho attention of Congress and the Executive has its principal feature tn t'o scheme of competitive examination. Save for certain except ions, which need not heie be sjnclfiid, tins pla wo ild give admission to the s i v Oj only ui i s lowest grade, aud would accordingly demand that ail vacancies in the higher positions should be lillod by promotion alone. In these particulars it is in conformity with the existing civil-service system of Great. Britain, and indeed tne sueoess which has attended that system iu the century of its birth is the strongest argument whioh has been urged for iis adoption here. Th ■ fact should not, however, lie overlooked tliat there are certain features of the English system which have not generally been iceeived with favor in this country, even among the foromost advocates of civil-service reform. Among them are: First, a tenure of office which is substantially a life tenure. Sooojid, a limitation of the maximum ago at whioh an applicant can enter the service, whereby all men in middle life or under are, with some exceptions, rigidly excluded. Third, a retiring allowance upon going out of otiico. These three elements are as important factors of tho problem as any of llio others. To eliminate them from the English system would effect a most radical change in its theory and practice. Tho avowed purpose of that system is to induce the educated young men of the country to devote their lives to Eublic employment,* by an assurance that, aving once entered upon it, they need never leave ft, and that after voluntary retirement they shall be recipients of an annual pension. That this system, as an entirety, has proved very successful, in Great Britain seems to be generally conceded, eyon by tlioso who once opposed its adoption. To a statute, which should incorporate all its essential features, I should feel bound to give my approval, but whether it would bo for tho best interes b of tho public to fix upon an expedient, for immediate and extensive application, whioh embraces certain features of the English system, but excludes or ignores others of equal imortrlimre. rosy bo seriously doUoted even ky those who aro impressed, as I am my sell, with tho grave importance of correcting the evils which inhere in the present methods of appointment. If, for exnuiplo, tho English rule, which shuts out persons above tbe age of 25 years from a large number of pubiii employments, is not to be made an essential part of our system, it is questionable whether tne attainment of the highest number of marks at a competitive examination should bo tlio criterion by which ail applications for appointment should bo put to test ; and under similar conditions it may also be questioned whether admission to the service should be strictly limited to its lowest ranks. There are very many characteristics which go to make up a model civil servant; prominent among them are probity, industry, good sense, good habits, good temper, patience, ardor, courtesy, tact, self-reliance, manly deference to superior officers, and manly considerations lor inferiors. The absence of these traits is Hot supplied by a wide knowledge of hooks, or’hy promptitude in answering questions, or by anv other quality likely to ho hr light to light by competitive examination. To make success in such a contest, thoroloro, an iiidispousablo condition of public employment, nduld very likely result in the practical exclusion of the older applicants, even though they might possess qualifications far superior to their younger and inure brilliant competitors. Ihoso suggestions ir.Ust not bo regarded as evincing any spirit of opposition to the competitive plan, which lias been, to seme extent, successfully employed already, and Which may hereafter vindicate the clnims of its most earnest supporters, but it ought to be seriously considered whether the application of the same educational staudard to persons of mature years, as to young men fresh from school and college, would not be likely to exalt more intellectual proficiency above other qualities of equal or greater importance. Another feature of the proposed system, the selection by promotion of all officers of the Government above tho lowest grado, except such as would fairly be regarded as exponents of tbe policy of the Executive and the principles of the dominant party, to afford encouragement to faithful public servants ny exciting in their minds the hopo of promotion, if they are found to merit it, is much to be desired, but would it be farciol to adopt a mle so rigid as to permit no otner mode of supplying the intermediate want* of tbe service ? There are many persons who fill sunor* dinate positions with great credit, but luok those qualities winch are requisite tor ih» higher posts ot duty, and, besule the modes of thought and action of ono whose service to * Government bureau has been long and continued, are often so cramped by routine procedure as almost io disqualify him from instituting changes required by the public interests, an o in Imi ,u ot new blood from time to time into the int idie ranks of tho service might be very beneficial in its results. The subject undor discussion is one of grave importance. The evils winch are complained of cannot he eradicated at once. The work must be gradual. Tho present English system is a growth of years, and waH not created by a single stroke of executive or legislative action. Its ooginnings are found iu an order in council promulgated in 1855, and it wa- after patient and cautious scrutiny of its workings that fifteen years later, it took its present shape.* b ivo years after the issuance of the order in oouucd, and at a time when resort had been had to competitive examination as an experiment much more extensively than has yet been the caso iu this country, a select committee of the Houso of Commons made a report to that House, which, declaring its approval of the competitive method, deprecated, nevertheless, any precipitancy in its general adoption, as likely to endanger its ultimate success. During this tentative period the results Of the two methods of class examination and competitive examination were downy watched and compared. It may bo that beforo we confine ourselves upon this important question within tho stringent hounds of statutory enactment, we may piotitably await the result of further inquiry and experiment. Tho submission of a portion of tho nominations to a central board of examiners selected solely for testing tfie qtialili at ions of applicants, may, perhaps, without resort to the competitive test, put an end to the mischief which attends the present system of appointment, and it may i.e tom-ibie to vest in such a board a wile nisureuon, to ascertem the cnai aoteristws aud attai n monte of otmuijate' in those particulars which 1 havo already r- .(< lied to as being no less linportum toan mere intellectual h tuturaonts. it OongierS

should deem it advisable at the present session to establisii competitive tests for admission to the service, no doubts such as have been suggested shall deter me from giving the measure my earnest support, and I urgently recommend, should there be a failure to pass any other act upon this subject, that an appropriation of *26,000 per year may be made for the enforcement of section 1,758 of (he Revised Statutes. With the aid thus afforded me. L shall strive to execute the provisions of that law according to its letter and spirit- . I am unwilling, in justice to the present civil service of the Government, to dismiss this subject without declaring my dissent from the severe and almost indiscriminate censure with which they have been recently assaulted ; that they are, as a clrbh, indolent, inefficient, corrupt, s a statement which has been often made and widely circulated, but, when the extent, variety, delicacy and importance of their duties are considered, the great majority of the empl yt s of the Government are, in my judgment, deserving of hign oommendation. THE MERCHANT SERVICE. The continuing decline of the merchant marine 01 the United Htates is to be greatly deplored. In view of the fact that we furnish so large a proportion of the freights of the com-ic-r is I worid. and that our shipments are gTescrv ana rapidly increasing, it is a cause of snrpr settiat not only is our navigation interest diminishing, but it is less than when our exp i s and imports were not half so large as u w. either m bulk or value. There must be some peculiar hindrance to the development ot tins luterest, or the enterprise and en•r y of American mechanics and capitalists' would have kept this country at least a roast oi our rivals in the friendly contest for 1 e n supremacy. The substitution of iron for -wood and of steam for sail have wrought great ri volut ions in the carrying trade of the world, but hese changes could not nave been adverse to America, if we had given to our navigation i*;t- retts a portion of the aid in protection win ti have been so wisely bestowed upon our m till 1 acturers. I commend the whole subject l i t- wisdom of Congress, with the suggestion tir t no question of greater magnitude or ini tm-r n aching importance can engage their U •Xill'ill, IMMIGRATION. In 1875 the Supreme Court of the United States declared unconstitutional the statutes of contain ■'tiites which imposed upon shipowners or consignees a tax of $1.50 for each passenger arriving from a foreign country, or, in lieu t riof. inquired a bond to indemnify the Stale and local authorities against expense for the future relief or support of such passenger. Since tins decision the expense attending the ciro and supervision of immigrants has fallen on the States at whose ports I ip-v have landed. As a large majonty of riuh immigrant-, immediately upon their arnv 1, pruct ed to the inland Sti.les and the Territories to seek permanent homes, it is manifestly uujust to impose upon the State whose shores they first reach the burden which it now bears. For this reason, and because of the national importance of the subject, I recommend legislation regarding the supervision to transitory care of immigrants at the ports of debaikatxon. ALASKA. I regret to state that the people of Alaska have reason to complain that tney are as yet unprovided with any form of government by w hich li e or property can be protected. While the extent of its population does not justify the application of the costly machinery of territorial administration, there is immediate necessity for constituting such a form of government as will promote the education of the people and securo the administration of justice. The Senate at its last session passed a bill providing for construction of a bn lding for the library of Cong ess, but it failed to become a law. The provision of such able protection for this great collection of books, and for the copyright department connected with it, has become a subject of national importance, and should reoeive promjtt attention. DISTRICT OF COLUMBIA. The report of the Commissioners of f tho District of Columbia, herewith transmitted, will inform you fully of the condition of the affairs of the District. The vital importance for the reclamation and improvenient~~uf tiro marshes, and for the establishment of the harbor lines along the Potomac river front is undoubted. It is represented that in their present condition these marshes scr.ousl : affect tluK. health of the -residents of the adjacent parts of the city, and that they greatly mar the general aspect of the park in which stands the Washington Monument. This improvement would add to that park and tho park south of the Executive mansion a large area of valuacle land, and wou d transform what is now believed to be a dangerous nuisance into an attractive landscape extending to the river front. They recommend the removal of the steam railway lines from the surface of tho streets of tbe c.tv. i.nd the location of the necessary depots in such pEces as may be convenient for the public accommodation. They call attention to the deficiency of the water supply, which seriously affects the material prosperity of the c tv and the health and comfort of its inhabitants. I commend these subjects to your carelul consideration. Tho importance of timely legislation with respt c to the ascertainment and declaration of TIIE VOTE FOR PRESIDENTIAL ELECTORS was sharp!' culled to the attention of the people more than four years ago. It is io- bo hoped ♦hat some well-defined measure may to devised before another national election, which will render unnecessary a resort to any expedient of a temporary character for tho de ermination of questions upon contested returns. Questions which concern the very existence of the Government aud the liberties of the people were suggested by the prolonged illness of the kite Piesident, and his consequent incapacity to per form the functions of his office. It is provided b the second article of the constitution, in the filth clauso of its first section, teat io case of the removal of the President from office, or o! his death, resignation, inabil.tv to discharge the powers and duties of said office, the same shall devolve on the Vice President, What is the intention of tiie: consign ion in its specification of inability to d -charge the powers and duties of said offi/e,” is oue of the contingencies which calls the Vice President to the exercse of Presidential functions, is the ina 1 tl tv delegated in its nature to long-coutinned intel ectual incapacity, or has it broader import ? What must be its extent arid duration? How must its existence be established ? Has the President, whose inability is the subject of inquiry, any voice in determining whether or not it exist* ? Or is the decison of that momentous and delicate question confided to the Vice President, or is it contemplated by the constitution that Congress should provide by lavr precisely. WHAT SHOULD CONSTITUTE INABILITY, end how and- by »lu; tribunal or authority it should tie ascertained ? If the inability proves temporary m its nature, and.during its continuance tbe Vice President lawfully exercises the functions of the Executive, by what tenure does he hold his office ? Does he continue as President for the remainder of the four-veura term, or would the elected President, if his mabi’ity should cease in the inWVvai, be empowered to resume his office ; and if. having -MK-h lawful snthorrv. be »hould exercise it, would the Vice President be thereupon empow< red to resume hi* power* and duties as such? I cannot doubt that these important questions will receive your early and thoughtful consideration. Deeply impressed with THE GRAVITY OF THE RESPONSIBILITIES which have so unexpectedly devolved upon me, it will he-my constant purpose to co-operate with you in such measures as will promote the glory of the country and tho prosperity of its people. Chester A. Arthur. Washington, D. C.. Dec. C. 1881.