By an act approved on the 14th day of February last Congress made provision for completing, jointly with an officer or commissioner to be named by Her Britannic Majesty, the determination of so much of the boundary line between the territory of the United States and the possessions of Great Britain as was left uncompleted by the commissioners appointed under the act of Congress of August 11, 1856. Under the provisions of this act the northwest water boundary of the United States has been determined and marked in accordance with the award of the Emperor of Germany. A protocol and a copy of the map upon which the line was thus marked are contained in the papers submitted herewith.

I also transmit a copy of the report of the commissioner for marking the northern boundary between the United States and the British possessions west of the Lake of the Woods, of the operations of the commission during the past season. Surveys have been made to a point 497 miles west of the Lake of the Woods, leaving about 350 miles to be surveyed, the field work of which can be completed during the next season.

The mixed commission organized under the provisions of the treaty of Washington for settling and determining the claims of citizens of either power against the other arising out of acts committed against their persons or property during the period between April 13, 1861, and April 9, 1865, made its final award on the 25th day of September last. It was awarded that the Government of the United States should pay to the Government of Her Britannic Majesty, within twelve months from the date of the award, the sum of $1,929,819 in gold. The commission disallowed or dismissed all other claims of British subjects against the United States. The amount of the claims presented by the British Government, but disallowed or dismissed, is understood to be about $93,000,000. It also disallowed all the claims of citizens of the United States against Great Britain which were referred to it.

I recommend the early passage of an act appropriating the amount necessary to pay this award against the United States.

I have caused to be communicated to the Government of the King of Italy the thanks of this Government for the eminent services rendered by Count Corti as the third commissioner on this commission. With dignity, learning, and impartiality he discharged duties requiring great labor and constant patience, to the satisfaction, I believe, of both Governments. I recommend legislation to create a special court, to consist of three judges, who shall be empowered to hear and determine all claims of aliens upon the United States arising out of acts committed against their persons or property during the insurrection. The recent reference under the treaty of Washington was confined to claims of British subjects arising during the period named in the treaty; but it is understood that there are other British claims of a similar nature, arising after the 9th of April, 1865, and it is known that other claims of a like nature are advanced by citizens or subjects of other powers. It is desirable to have these claims also examined and disposed of.

Official information being received from the Dutch Government of a state of war between the King of the Netherlands and the Sultan of Acheen, the officers of the United States who were near the seat of the war were instructed to observe an impartial neutrality. It is believed that they have done so.

The joint commission under the convention with Mexico of 1868, having again been legally prolonged, has resumed its business, which, it is hoped, may be brought to an early conclusion. The distinguished representative of Her Britannic Majesty at Washington has kindly consented, with the approval of his Government, to assume the arduous and responsible duties of umpire in this commission, and to lend the weight of his character and name to such decisions as may not receive the acquiescence of both the arbitrators appointed by the respective Governments.

The commissioners appointed pursuant to the authority of Congress to examine into the nature and extent of the forays by trespassers from that country upon the herds of Texas have made a report, which will be submitted for your consideration.

The Venezuelan Government has been apprised of the sense of Congress in regard to the awards of the joint commission under the convention of 25th April, 1866, as expressed in the act of the 25th of February last.

It is apprehended that that Government does not realize the character of its obligations under that convention. As there is reason to believe, however, that its hesitancy in recognizing them springs, in part at least, from real difficulty in discharging them in connection with its obligations to other governments, the expediency of further forbearance on our part is believed to be worthy of your consideration.

The Ottoman Government and that of Egypt have latterly shown a disposition to relieve foreign consuls of the judicial powers which heretofore they have exercised in the Turkish dominions, by organizing other tribunals. As Congress, however, has by law provided for the discharge of judicial functions by consuls of the United States in that quarter under the treaty of 1830, I have not felt at liberty formally to accept the proposed change without the assent of Congress, whose decision upon the subject at as early a period as may be convenient is earnestly requested.

I transmit herewith, for the consideration and determination of Congress, an application of the Republic of Santo Domingo to this Government to exercise a protectorate over that Republic.

Since the adjournment of Congress the following treaties with foreign powers have been proclaimed: A naturalization convention with Denmark; a convention with Mexico for renewing the Claims Commission; a convention of friendship, commerce, and extradition with the Orange Free State, and a naturalization convention with Ecuador.

I renew the recommendation made in my message of December, 1870, that Congress authorize the Postmaster-General to issue all commissions to officials appointed through his Department.

I invite the earnest attention of Congress to the existing laws of the United States respecting expatriation and the election of nationality by individuals. Many citizens of the United States reside permanently abroad with their families. Under the provisions of the act approved February 10, 1855, the children of such persons are to be deemed and taken to be citizens of the United States, but the rights of citizenship are not to descend to persons whose fathers never resided in the United States.

It thus happens that persons who have never resided within the United States have been enabled to put forward a pretension to the protection of the United States against the claim to military service of the government under whose protection they were born and have been reared. In some cases even naturalized citizens of the United States have returned to the land of their birth, with intent to remain there, and their children, the issue of a marriage contracted there after their return, and who have never been in the United States, have laid claim to our protection when the lapse of many years had imposed upon them the duty of military service to the only government which had ever known them personally.

Until the year 1868 it was left, embarrassed by conflicting opinions of courts and of jurists, to determine how far the doctrine of perpetual allegiance derived from our former colonial relations with Great Britain was applicable to American citizens. Congress then wisely swept these doubts away by enacting that—

Any declaration, instruction, opinion, order, or decision of any officer of this Government which denies, restricts, impairs, or questions the right of expatriation is inconsistent with the fundamental principles of this Government.

But Congress did not indicate in that statute, nor has it since done so, what acts are to be deemed to work expatriation. For my own guidance in determining such questions I required (under the provisions of the Constitution) the opinion in writing of the principal officer in each of the Executive Departments upon certain questions relating to this subject. The result satisfies me that further legislation has become necessary. I therefore commend the subject to the careful consideration of Congress, and I transmit herewith copies of the several opinions of the principal officers of the Executive Departments, together with other correspondence and pertinent information on the same subject.

The United States, who led the way in the overthrow of the feudal doctrine of perpetual allegiance, are among the last to indicate how their own citizens may elect another nationality. The papers submitted herewith indicate what is necessary to place us on a par with other leading nations in liberality of legislation on this international question. We have already in our treaties assented to the principles which would need to be embodied in laws intended to accomplish such results. We have agreed that citizens of the United States may cease to be citizens and may voluntarily render allegiance to other powers. We have agreed that residence in a foreign land without intent to return, shall of itself work expatriation. We have agreed in some instances upon the length of time necessary for such continued residence to work a presumption of such intent. I invite Congress now to mark out and define when and how expatriation can be accomplished; to regulate by law the condition of American women marrying foreigners; to fix the status of children born in a foreign country of American parents residing more or less permanently abroad, and to make rules for determining such other kindred points as may seem best to Congress.

In compliance with the request of Congress, I transmitted to the American minister at Madrid, with instructions to present it to the Spanish Government, the joint resolution approved on the 3d of March last, tendering to the people of Spain, in the name and on the behalf of the American people, the congratulations of Congress upon the efforts to consolidate in Spain the principles of universal liberty in a republican form of government.

The existence of this new Republic was inaugurated by striking the fetters from the slaves in Porto Rico. This beneficent measure was followed by the release of several thousand persons illegally held as slaves in Cuba. Next, the Captain-General of that colony was deprived of the power to set aside the orders of his superiors at Madrid, which had pertained to the office since 1825. The sequestered estates of American citizens, which had been the cause of long and fruitless correspondence, were ordered to be restored to their owners. All these liberal steps were taken in the face of a violent opposition directed by the reactionary slaveholders of Havana, who are vainly striving to stay the march of ideas which has terminated slavery in Christendom, Cuba only excepted. Unhappily, however, this baneful influence has thus far succeeded in defeating the efforts of all liberal-minded men in Spain to abolish slavery in Cuba, and in preventing the promised reform in that island. The struggle for political supremacy continues there.

The proslavery and aristocratic party in Cuba is gradually arraigning itself in more and more open hostility and defiance of the home government, while it still maintains a political connection with the Republic in the peninsula; and although usurping and defying the authority of the home government whenever such usurpation or defiance tends in the direction of oppression or of the maintenance of abuses, it is still a power in Madrid, and is recognized by the Government. Thus an element more dangerous to continued colonial relations between Cuba and Spain than that which inspired the insurrection at Yara—an element opposed to granting any relief from misrule and abuse, with no aspirations after freedom, commanding no sympathies in generous breasts, aiming to rivet still stronger the shackles of slavery and oppression—has seized many of the emblems of power in Cuba, and, under professions of loyalty to the mother country, is exhausting the resources of the island, and is doing acts which are at variance with those principles of justice, of liberality, and of right which give nobility of character to a republic. In the interests of humanity, of civilization, and of progress, it is to be hoped that this evil influence may be soon averted.

The steamer Virginius was on the 26th day of September, 1870, duly registered at the port of New York as a part of the commercial marine of the United States. On the 4th of October, 1870, having received the certificate of her register in the usual legal form, she sailed from the port of New York and has not since been within the territorial jurisdiction of the United States. On the 31st day of October last, while sailing under the flag of the United States on the high seas, she was forcibly seized by the Spanish gunboat Tornado, and was carried into the port of Santiago de Cuba, where fifty-three of her passengers and crew were inhumanly, and, so far at least as relates to those who were citizens of the United States, without due process of law, put to death.

It is a well-established principle, asserted by the United States from the beginning of their national independence, recognized by Great Britain and other maritime powers, and stated by the Senate in a resolution passed unanimously on the 16th of June, 1858, that—

American vessels on the high seas in time of peace, bearing the American flag, remain under the jurisdiction of the country to which they belong, and therefore any visitation, molestation, or detention of such vessel by force, or by the exhibition of force, on the part of a foreign power is in derogation of the sovereignty of the United States.

In accordance with this principle, the restoration of the Virginius and the surrender of the survivors of her passengers and crew, and a due reparation to the flag, and the punishment of the authorities who had been guilty of the illegal acts of violence, were demanded. The Spanish Government has recognized the justice of the demand, and has arranged for the immediate delivery of the vessel, and for the surrender of the survivors of the passengers and crew, and for a salute to the flag, and for proceedings looking to the punishment of those who may be proved to have been guilty of illegal acts of violence toward citizens of the United States, and also toward indemnifying those who may be shown to be entitled to indemnity. A copy of a protocol of a conference between the Secretary of State and the Spanish minister, in which the terms of this arrangement were agreed to, is transmitted herewith.

The correspondence on this subject with the legation of the United States in Madrid was conducted in cipher and by cable, and needs the verification of the actual text of the correspondence. It has seemed to me to be due to the importance of the case not to submit this correspondence until the accurate text can be received by mail. It is expected shortly, and will be submitted when received.

In taking leave of this subject for the present I wish to renew the expression of my conviction that the existence of African slavery in Cuba is a principal cause of the lamentable condition of the island. I do not doubt that Congress shares with me the hope that it will soon be made to disappear, and that peace and prosperity may follow its abolition.

The embargoing of American estates in Cuba, cruelty to American citizens detected in no act of hostility to the Spanish Government, the murdering of prisoners taken with arms in their hands, and, finally, the capture upon the high seas of a vessel sailing under the United States flag and bearing a United States registry have culminated in an outburst of indignation that has seemed for a time to threaten war. Pending negotiations between the United States and the Government of Spain on the subject of this capture, I have authorized the Secretary of the Navy to put our Navy on a war footing, to the extent, at least, of the entire annual appropriation for that branch of the service, trusting to Congress and the public opinion of the American people to justify my action.

Assuming from the action of the last Congress in appointing a Committee on Privileges and Elections to prepare and report to this Congress a constitutional amendment to provide a better method of electing the President and Vice-President of the United States, and also from the necessity of such an amendment, that there will be submitted to the State legislatures for ratification such an improvement in our Constitution, I suggest two others for your consideration:

First. To authorize the Executive to approve of so much of any measure passing the two Houses of Congress as his judgment may dictate, without approving the whole, the disapproved portion or portions to be subjected to the same rules as now, to wit, to be referred back to the House in which the measure or measures originated, and, if passed by a two-thirds vote of the two Houses, then to become a law without the approval of the President. I would add to this a provision that there should be no legislation by Congress during the last twenty-four hours of its sitting, except upon vetoes, in order to give the Executive an opportunity to examine and approve or disapprove bills understandingly.

Second. To provide by amendment that when an extra session of Congress is convened by Executive proclamation legislation during the continuance of such extra session shall be confined to such subjects as the Executive may bring before it from time to time in writing.

The advantages to be gained by these two amendments are too obvious for me to comment upon them. One session in each year is provided for by the Constitution, in which there are no restrictions as to the subjects of legislation by Congress. If more are required, it is always in the power of Congress, during their term of office, to provide for sessions at any time. The first of these amendments would protect the public against the many abuses and waste of public moneys which creep into appropriation bills and other important measures passing during the expiring hours of Congress, to which otherwise due consideration can not be given.

TREASURY DEPARTMENT.

The receipts of the Government from all sources for the last fiscal year were $333,738,204, and expenditures on all accounts $290,345,245, thus showing an excess of receipts over expenditures of $43,392,959. But it is not probable that this favorable exhibit will be shown for the present fiscal year. Indeed, it is very doubtful whether, except with great economy on the part of Congress in making appropriations and the same economy in administering the various Departments of Government, the revenues will not fall short of meeting actual expenses, including interest on the public debt.

I commend to Congress such economy, and point out two sources where it seems to me it might commence, to wit, in the appropriations for public buildings in the many cities where work has not yet been commenced; in the appropriations for river and harbor improvement in those localities where the improvements are of but little benefit to general commerce, and for fortifications.

There is a still more fruitful source of expenditure, which I will point out later in this message. I refer to the easy method of manufacturing claims for losses incurred in suppressing the late rebellion.

I would not be understood here as opposing the erection of good, substantial, and even ornamental buildings by the Government wherever such buildings are needed. In fact, I approve of the Government owning its own buildings in all sections of the country, and hope the day is not far distant when it will not only possess them, but will erect in the capital suitable residences for all persons who now receive commutation for quarters or rent at Government expense, and for the Cabinet, thus setting an example to the States which may induce them to erect buildings for their Senators. But I would have this work conducted at a time when the revenues of the country would abundantly justify it.

The revenues have materially fallen off for the first five months of the present fiscal year from what they were expected to produce, owing to the general panic now prevailing, which commenced about the middle of September last. The full effect of this disaster, if it should not prove a "blessing in disguise," is yet to be demonstrated. In either event it is your duty to heed the lesson and to provide by wise and well-considered legislation, as far as it lies in your power, against its recurrence, and to take advantage of all benefits that may have accrued.

My own judgment is that, however much individuals may have suffered, one long step has been taken toward specie payments; that we can never have permanent prosperity until a specie basis is reached; and that a specie basis can not be reached and maintained until our exports, exclusive of gold, pay for our imports, interest due abroad, and other specie obligations, or so nearly so as to leave an appreciable accumulation of the precious metals in the country from the products of our mines.

The development of the mines of precious metals during the past year and the prospective development of them for years to come are gratifying in their results. Could but one-half of the gold extracted from the mines be retained at home, our advance toward specie payments would be rapid.

To increase our exports sufficient currency is required to keep all the industries of the country employed. Without this national as well as individual bankruptcy must ensue. Undue inflation, on the other hand, while it might give temporary relief, would only lead to inflation of prices, the impossibility of competing in our own markets for the products of home skill and labor, and repeated renewals of present experiences. Elasticity to our circulating medium, therefore, and just enough of it to transact the legitimate business of the country and to keep all industries employed, is what is most to be desired. The exact medium is specie, the recognized medium of exchange the world over. That obtained, we shall have a currency of an exact degree of elasticity. If there be too much of it for the legitimate purposes of trade and commerce, it will flow out of the country. If too little, the reverse will result. To hold what we have and to appreciate our currency to that standard is the problem deserving of the most serious consideration of Congress.

The experience of the present panic has proven that the currency of the country, based, as it is, upon the credit of the country, is the best that has ever been devised. Usually in times of such trials currency has become worthless, or so much depreciated in value as to inflate the values of all the necessaries of life as compared with the currency. Everyone holding it has been anxious to dispose of it on any terms. Now we witness the reverse. Holders of currency hoard it as they did gold in former experiences of a like nature.

It is patent to the most casual observer that much more currency, or money, is required to transact the legitimate trade of the country during the fall and winter months, when the vast crops are being removed, than during the balance of the year. With our present system the amount in the country remains the same throughout the entire year, resulting in an accumulation of all the surplus capital of the country in a few centers when not employed in the moving of crops, tempted there by the offer of interest on call loans. Interest being paid, this surplus capital must earn this interest paid with a profit. Being subject to "call," it can not be loaned, only in part at best, to the merchant or manufacturer for a fixed term. Hence, no matter how much currency there might be in the country, it would be absorbed, prices keeping pace with the volume, and panics, stringency, and disasters would ever be recurring with the autumn. Elasticity in our monetary system, therefore, is the object to be attained first, and next to that, as far as possible, a prevention of the use of other people's money in stock and other species of speculation. To prevent the latter it seems to me that one great step would be taken by prohibiting the national banks from paying interest on deposits, by requiring them to hold their reserves in their own vaults, and by forcing them into resumption, though it would only be in legal-tender notes. For this purpose I would suggest the establishment of clearing houses for your consideration.

To secure the former many plans have been suggested, most, if not all, of which look to me more like inflation on the one hand, or compelling the Government, on the other, to pay interest, without corresponding benefits, upon the surplus funds of the country during the seasons when otherwise unemployed.

I submit for your consideration whether this difficulty might not be overcome by authorizing the Secretary of the Treasury to issue at any time to national banks of issue any amount of their own notes below a fixed percentage of their issue (say 40 per cent), upon the banks' depositing with the Treasurer of the United States an amount of Government bonds equal to the amount of notes demanded, the banks to forfeit to the Government, say, 4 per cent of the interest accruing on the bonds so pledged during the time they remain with the Treasurer as security for the increased circulation, the bonds so pledged to be redeemable by the banks at their pleasure, either in whole or in part, by returning their own bills for cancellation to an amount equal to the face of the bonds withdrawn. I would further suggest for your consideration the propriety of authorizing national banks to diminish their standing issue at pleasure, by returning for cancellation their own bills and withdrawing so many United States bonds as are pledged for the bills returned.

In view of the great actual contraction that has taken place in the currency and the comparative contraction continuously going on, due to the increase of population, increase of manufactories and all the industries, I do not believe there is too much of it now for the dullest period of the year. Indeed, if clearing houses should be established, thus forcing redemption, it is a question for your consideration whether banking should not be made free, retaining all the safeguards now required to secure bill holders. In any modification of the present laws regulating national banks, as a further step toward preparing for resumption of specie payments, I invite your attention to a consideration of the propriety of exacting from them the retention as a part of their reserve either the whole or a part of the gold interest accruing upon the bonds pledged as security for their issue. I have not reflected enough on the bearing this might have in producing a scarcity of coin with which to pay duties on imports to give it my positive recommendation. But your attention is invited to the subject.

During the last four years the currency has been contracted, directly, by the withdrawal of 3 per cent certificates, compound-interest notes, and "seven-thirty" bonds outstanding on the 4th of March, 1869, all of which took the place of legal-tenders in the bank reserves to the extent of $63,000,000.

During the same period there has been a much larger comparative contraction of the currency. The population of the country has largely increased. More than 25,000 miles of railroad have been built, requiring the active use of capital to operate them. Millions of acres of land have been opened to cultivation, requiring capital to move the products. Manufactories have multiplied beyond all precedent in the same period of time, requiring capital weekly for the payment of wages and for the purchase of material; and probably the largest of all comparative contraction arises from the organizing of free labor in the South. Now every laborer there receives his wages, and, for want of savings banks, the greater part of such wages is carried in the pocket or hoarded until required for use.

These suggestions are thrown out for your consideration, without any recommendation that they shall be adopted literally, but hoping that the best method may be arrived at to secure such an elasticity of the currency as will keep employed all the industries of the country and prevent such an inflation as will put off indefinitely the resumption of specie payments, an object so devoutly to be wished for by all, and by none more earnestly than the class of people most directly interested—those who "earn their bread by the sweat of their brow." The decisions of Congress on this subject will have the hearty support of the Executive.

In previous messages I have called attention to the decline in American shipbuilding and recommended such legislation as would secure to us our proportion of the carrying trade. Stimulated by high rates and abundance of freight, the progress for the last year in shipbuilding has been very satisfactory. There has been an increase of about 3 per cent in the amount transported in American vessels over the amount of last year. With the reduced cost of material which has taken place, it may reasonably be hoped that this progress will be maintained, and even increased. However, as we pay about $80,000,000 per annum to foreign vessels for the transportation to a market of our surplus products, thus increasing the balance of trade against us to this amount, the subject is one worthy of your serious consideration.

"Cheap transportation" is a subject that has attracted the attention of both producers and consumers for the past few years, and has contributed to, if it has not been the direct cause of, the recent panic and stringency.

As Congress, at its last session, appointed a special committee to investigate this whole subject during the vacation and report at this session, I have nothing to recommend until their report is read.

There is one work, however, of a national character, in which the greater portion of the East and the West, the North and the South, are equally interested, to which I will invite your attention.

The State of New York has a canal connecting Lake Erie with tide water on the Hudson River. The State of Illinois has a similar work connecting Lake Michigan with navigable water on the Illinois River, thus making water communication inland between the East and the West and South. These great artificial water courses are the property of the States through which they pass, and pay toll to those States. Would it not be wise statesmanship to pledge these States that if they will open these canals for the passage of large vessels the General Government will look after and keep in navigable condition the great public highways with which they connect, to wit, the Overslaugh on the Hudson, the St. Clair Flats, and the Illinois and Mississippi rivers? This would be a national work; one of great value to the producers of the West and South in giving them cheap transportation for their produce to the seaboard and a market, and to the consumers in the East in giving them cheaper food, particularly of those articles of food which do not find a foreign market, and the prices of which, therefore, are not regulated by foreign demands. The advantages of such a work are too obvious for argument. I submit the subject to you, therefore, without further comment.

In attempting to regain our lost commerce and carrying trade I have heretofore called attention to the States south of us offering a field where much might be accomplished. To further this object I suggest that a small appropriation be made, accompanied with authority for the Secretary of the Navy to fit out a naval vessel to ascend the Amazon River to the mouth of the Madeira; thence to explore that river and its tributaries into Bolivia, and to report to Congress at its next session, or as soon as practicable, the accessibility of the country by water, its resources, and the population so reached. Such an exploration would cost but little; it can do no harm, and may result in establishing a trade of value to both nations.

In further connection with the Treasury Department I would recommend a revision and codification of the tariff laws and the opening of more mints for coming money, with authority to coin for such nations as may apply.

WAR DEPARTMENT.

The attention of Congress is invited to the recommendations contained in the report of the Secretary of War herewith accompanying.

The apparent great cost of supporting the Army is fully explained by this report, and I hope will receive your attention.

While inviting your general attention to all the recommendations made by the Secretary of War, there are two which I would especially invite you to consider: First, the importance of preparing for war in time of peace by providing proper armament for our seacoast defenses. Proper armament is of vastly more importance than fortifications. The latter can be supplied very speedily for temporary purposes when needed; the former can not. The second is the necessity of reopening promotion in the staff corps of the Army. Particularly is this necessity felt in the Medical, Pay, and Ordnance departments.

At this time it is necessary to employ "contract surgeons" to supply the necessary medical attendance required by the Army.

With the present force of the Pay Department it is now difficult to make the payments to troops provided for by law. Long delays in payments are productive of desertions and other demoralization, and the law prohibits the payment of troops by other than regular army paymasters.

There are now sixteen vacancies in the Ordnance Department, thus leaving that branch of the service without sufficient officers to conduct the business of the different arsenals on a large scale if ever required.

NAVY DEPARTMENT.

During the past year our Navy has been depleted by the sale of some vessels no longer fit for naval service and by the condemnation of others not yet disposed of. This, however, has been more than compensated for by the repair of six of the old wooden ships and by the building of eight new sloops of war, authorized by the last Congress. The building of these latter has occurred at a doubly fortunate time. They are about being completed at a time when they may possibly be much needed, and the work upon them has not only given direct employment to thousands of men, but has no doubt been the means of keeping open establishments for other work at a time of great financial distress.

Since the commencement of the last month, however, the distressing occurrences which have taken place in the waters of the Caribbean Sea, almost on our very seaboard, while they illustrate most forcibly the necessity always existing that a nation situated like ours should maintain in a state of possible efficiency a navy adequate to its responsibilities, has at the same time demanded that all the effective force we really have shall be put in immediate readiness for warlike service. This has been and is being done promptly and effectively, and I am assured that all the available ships and every authorized man of the American Navy will be ready for whatever action is required for the safety of our citizens or the maintenance of our honor. This, of course, will require the expenditure in a short time of some of the appropriations which were calculated to extend through the fiscal year, but Congress will, I doubt not, understand and appreciate the emergency, and will provide adequately not only for the present preparation, but for the future maintenance of our naval force. The Secretary of the Navy has during the past year been quietly putting some of our most effective monitors in condition for service, and thus the exigency finds us in a much better condition for work than we could possibly have been without his action.

POST-OFFICE DEPARTMENT.

A complete exhibit is presented in the accompanying report of the Postmaster-General of the operations of the Post-Office Department during the year. The ordinary postal revenues for the fiscal year ended June 30, 1873, amounted to $22,996,741.57, and the expenditures of all kinds to $29,084,945.67. The increase of revenues over 1872 was $1,081,315.20, and the increase of expenditures $2,426,753.36.

Independent of the payments made from special appropriations for mail steamship lines, the amount drawn from the General Treasury to meet deficiencies was $5,265,475. The constant and rapid extension of our postal service, particularly upon railways, and the improved facilities for the collection, transmission, distribution, and delivery of the mails which are constantly being provided account for the increased expenditures of this popular branch of the public service.

The total number of post-offices in operation on June 30, 1873, was 33,244, a net increase of 1,381 over the number reported the preceding year. The number of Presidential offices was 1,363, an increase of 163 during the year. The total length of railroad mail routes at the close of the year was 63,457 miles, an increase of 5,546 miles over the year 1872. Fifty-nine railway post-office lines were in operation June 30, 1873, extending over 14,866 miles of railroad routes and performing an aggregate service of 34,925 miles daily.

The number of letters exchanged with foreign countries was 27,459,185, an increase of 3,096,685 over the previous year, and the postage thereon amounted to $2,021,310.86. The total weight of correspondence exchanged in the mails with European countries exceeded 912 tens, an increase of 92 tons over the previous year. The total cost of the United States ocean steamship service, including $725,000 paid from special appropriations to subsidized lines of mail steamers, was $1,047,271.35.

New or additional postal conventions have been concluded with Sweden, Norway, Belgium, Germany, Canada, Newfoundland, and Japan, reducing postage rates on correspondence exchanged with those countries; and further efforts have been made to conclude a satisfactory postal convention with France, but without success.

I invite the favorable consideration of Congress to the suggestions and recommendations of the Postmaster-General for an extension of the free-delivery system in all cities having a population of not less than 10,000; for the prepayment of postage on newspapers and other printed matter of the second class; for a uniform postage and limit of weight on miscellaneous matter; for adjusting the compensation of all postmasters not appointed by the President, by the old method of commissions on the actual receipts of the office, instead of the present mode of fixing the salary in advance upon special returns; and especially do I urge favorable action by Congress on the important recommendations of the Postmaster-General for the establishment of United States postal savings depositories.

Your attention is also again called to a consideration of the question of postal telegraphs and the arguments adduced in support thereof, in the hope that you may take such action in connection therewith as in your judgment will most contribute to the best interests of the country.

DEPARTMENT OF JUSTICE.

Affairs in Utah require your early and special attention. The Supreme Court of the United States, in the case of Clinton vs. Englebrecht, decided that the United States marshal of that Territory could not lawfully summon jurors for the district courts; and those courts hold that the Territorial marshal can not lawfully perform that duty, because he is elected by the legislative assembly, and not appointed as provided for in the act organizing the Territory. All proceedings at law are practically abolished by these decisions, and there have been but few or no jury trials in the district courts of that Territory since the last session of Congress. Property is left without protection by the courts, and crimes go unpunished. To prevent anarchy there it is absolutely necessary that Congress provide the courts with some mode of obtaining jurors, and I recommend legislation to that end, and also that the probate courts of the Territory, now assuming to issue writs of injunction and habeas corpus and to try criminal cases and questions as to land titles, be denied all jurisdiction not possessed ordinarily by courts of that description.

I have become impressed with the belief that the act approved March 2, 1867, entitled "An act to establish a uniform system of bankruptcy throughout the United States," is productive of more evil than good at this time. Many considerations might be urged for its total repeal, but, if this is not considered advisable, I think it will not be seriously questioned that those portions of said act providing for what is called involuntary bankruptcy operate to increase the financial embarrassments of the country. Careful and prudent men very often become involved in debt in the transaction of their business, and though they may possess ample property, if it could be made available for that purpose, to meet all their liabilities, yet, on account of the extraordinary scarcity of money, they may be unable to meet all their pecuniary obligations as they become due, in consequence of which they are liable to be prostrated in their business by proceedings in bankruptcy at the instance of unrelenting creditors. People are now so easily alarmed as to monetary matters that the mere filing of a petition in bankruptcy by an unfriendly creditor will necessarily embarrass, and oftentimes accomplish the financial ruin, of a responsible business man. Those who otherwise might make lawful and just arrangements to relieve themselves from difficulties produced by the present stringency in money are prevented by their constant exposure to attack and disappointment by proceedings against them in bankruptcy, and, besides, the law is made use of in many cases by obdurate creditors to frighten or force debtors into a compliance with their wishes and into acts of injustice to other creditors and to themselves. I recommend that so much of said act as provides for involuntary bankruptcy on account of the suspension of payment be repealed.

Your careful attention is invited to the subject of claims against the Government and to the facilities afforded by existing laws for their prosecution. Each of the Departments of State, Treasury, and War has demands for many millions of dollars upon its files, and they are rapidly accumulating. To these may be added those now pending before Congress, the Court of Claims, and the Southern Claims Commission, making in the aggregate an immense sum. Most of these grow out of the rebellion, and are intended to indemnify persons on both sides for their losses during the war; and not a few of them are fabricated and supported by false testimony. Projects are on foot, it is believed, to induce Congress to provide for new classes of claims, and to revive old ones through the repeal or modification of the statute of limitations, by which they are now barred. I presume these schemes, if proposed, will be received with little favor by Congress, and I recommend that persons having claims against the United States cognizable by any tribunal or Department thereof be required to present them at an early day, and that legislation be directed as far as practicable to the defeat of unfounded and unjust demands upon the Government; and I would suggest, as a means of preventing fraud, that witnesses be called upon to appear in person to testify before those tribunals having said claims before them for adjudication. Probably the largest saving to the National Treasury can be secured by timely legislation on these subjects of any of the economic measures that will be proposed.

You will be advised of the operations of the Department of Justice by the report of the Attorney-General, and I invite your attention to the amendments of existing laws suggested by him, with the view of reducing the expenses of that Department.

DEPARTMENT OF THE INTERIOR.

The policy inaugurated toward the Indians at the beginning of the last Administration has been steadily pursued, and, I believe, with beneficial results. It will be continued with only such modifications as time and experience may demonstrate as necessary.

With the encroachment of civilization upon the Indian reservations and hunting grounds, disturbances have taken place between the Indians and whites during the past year, and probably will continue to do so until each race appreciates that the other has rights which must be respected.

The policy has been to collect the Indians as rapidly as possible on reservations, and as far as practicable within what is known as the Indian Territory, and to teach them the arts of civilization and self-support. Where found off their reservations, and endangering the peace and safety of the whites, they have been punished, and will continue to be for like offenses.

The Indian Territory south of Kansas and west of Arkansas is sufficient in area and agricultural resources to support all the Indians east of the Rocky Mountains. In time, no doubt, all of them, except a few who may elect to make their homes among white people, will be collected there. As a preparatory step for this consummation, I am now satisfied that a Territorial form of government should be given them, which will secure the treaty rights of the original settlers and protect their homesteads from alienation for a period of twenty years.

The operations of the Patent Office are growing to such a magnitude and the accumulation of material is becoming so great that the necessity of more room is becoming more obvious day by day. I respectfully invite your attention to the reports of the Secretary of the Interior and Commissioner of Patents on this subject.

The business of the General Land Office exhibits a material increase in all its branches during the last fiscal year. During that time there were disposed of out of the public lands 13,030,606 acres, being an amount greater by 1,165,631 acres than was disposed of during the preceding year. Of the amount disposed of, 1,626,266 acres were sold for cash, 214,940 acres were located with military land warrants, 3,793,612 acres were taken for homesteads, 653,446 acres were located with agricultural-college scrip, 6,083,536 acres were certified by railroads, 76,576 acres were granted to wagon roads, 238,548 acres were approved to States as swamp lands, 138,681 acres were certified for agricultural colleges, common schools, universities, and seminaries, 190,775 acres were approved to States for internal improvements, and 14,222 acres were located with Indian scrip. The cash receipts during the same time were $3,408,515.50, being $190,415.50 in excess of the receipts of the previous year. During the year 30,488,132 acres of public land were surveyed, an increase over the amount surveyed the previous year of 1,037,193 acres, and, added to the area previously surveyed, aggregates 616,554,895 acres which have been surveyed, leaving 1,218,443,505 acres of the public land still unsurveyed.

The increased and steadily increasing facilities for reaching our unoccupied public domain and for the transportation of surplus products enlarge the available field for desirable homestead locations, thus stimulating settlement and extending year by year in a gradually increasing ratio the area of occupation and cultivation.

The expressed desire of the representatives of a large colony of citizens of Russia to emigrate to this country, as is understood, with the consent of their Government, if certain concessions can be made to enable them to settle in a compact colony, is of great interest, as going to show the light in which our institutions are regarded by an industrious, intelligent, and wealthy people, desirous of enjoying civil and religious liberty; and the acquisition of so large an immigration of citizens of a superior class would without doubt be of substantial benefit to the country. I invite attention to the suggestion of the Secretary of the Interior in this behalf.

There was paid during the last fiscal year for pensions, including the expense of disbursement, $29,185,289.62, being an amount less by $984,050.98 than was expended for the same purpose the preceding year. Although this statement of expenditures would indicate a material reduction in amount compared with the preceding year, it is believed that the changes in the pension laws at the last session of Congress will absorb that amount the current year. At the close of the last fiscal year there were on the pension rolls 99,804 invalid military pensioners and 112,088 widows, orphans, and dependent relatives of deceased soldiers, making a total of that class of 211,892; 18,266 survivors of the War of 1812 and 5,053 widows of soldiers of that war pensioned under the act of Congress of February 14, 1871, making a total of that class of 23,319; 1,430 invalid navy pensioners and 1,770 widows, orphans, and dependent relatives of deceased officers, sailors, and marines of the Navy, making a total of navy pensioners of 3,200, and a grand total of pensioners of all classes of 238,411, showing a net increase during the last fiscal year of 6,182. During the last year the names of 16,405 pensioners were added to the rolls, and 10,223 names were dropped therefrom for various causes.

The system adopted for the detection of frauds against the Government in the matter of pensions has been productive of satisfactory results, but legislation is needed to provide, if possible, against the perpetration of such frauds in future.

The evidently increasing interest in the cause of education is a most encouraging feature in the general progress and prosperity of the country, and the Bureau of Education is earnest in its efforts to give proper direction to the new appliances and increased facilities which are being offered to aid the educators of the country in their great work.

The Ninth Census has been completed, the report thereof published and distributed, and the working force of the Bureau disbanded. The Secretary of the Interior renews his recommendation for a census to be taken in 1875, to which subject the attention of Congress is invited. The original suggestion in that behalf has met with the general approval of the country; and even if it be not deemed advisable at present to provide for a regular quinquennial census, a census taken in 1875, the report of which could be completed and published before the one hundredth anniversary of our national independence, would be especially interesting and valuable, as showing the progress of the country during the first century of our national existence. It is believed, however, that a regular census every five years would be of substantial benefit to the country, inasmuch as our growth hitherto has been so rapid that the results of the decennial census are necessarily unreliable as a basis of estimates for the latter years of a decennial period.

DISTRICT OF COLUMBIA.

Under the very efficient management of the governor and the board of public works of this District the city of Washington is rapidly assuming the appearance of a capital of which the nation may well be proud. From being a most unsightly place three years ago, disagreeable to pass through in summer in consequence of the dust arising from unpaved streets, and almost impassable in the winter from the mud, it is now one of the most sightly cities in the country, and can boast of being the best paved.

The work has been done systematically, the plans, grades, location of sewers, water and gas mains being determined upon before the work was commenced, thus securing permanency when completed. I question whether so much has ever been accomplished before in any American city for the same expenditures. The Government having large reservations in the city, and the nation at large having an interest in their capital, I recommend a liberal policy toward the District of Columbia, and that the Government should bear its just share of the expense of these improvements. Every citizen visiting the capital feels a pride in its growing beauty, and that he too is part owner in the investments made here.

I would suggest to Congress the propriety of promoting the establishment in this District of an institution of learning, or university of the highest class, by the donation of lands. There is no place better suited for such an institution than the national capital. There is no other place in which every citizen is so directly interested.

CIVIL-SERVICE REFORM.

In three successive messages to Congress I have called attention to the subject of "civil-service reform."

Action has been taken so far as to authorize the appointment of a board to devise rules governing methods of making appointments and promotions, but there never has been any action making these rules, or any rules, binding, or even entitled to observance, where persons desire the appointment of a friend or the removal of an official who may be disagreeable to them.

To have any rules effective they must have the acquiescence of Congress as well as of the Executive. I commend, therefore, the subject to your attention, and suggest that a special committee of Congress might confer with the Civil-Service Board during the present session for the purpose of devising such rules as can be maintained, and which will secure the services of honest and capable officials, and which will also protect them in a degree of independence while in office.

Proper rules will protect Congress, as well as the Executive, from much needless persecution, and will prove of great value to the public at large.

I would recommend for your favorable consideration the passage of an enabling act for the admission of Colorado as a State in the Union. It possesses all the elements of a prosperous State, agricultural and mineral, and, I believe, has a population now to justify such admission. In connection with this I would also recommend the encouragement of a canal for purposes of irrigation from the eastern slope of the Rocky Mountains to the Missouri River. As a rule I am opposed to further donations of public lands for internal improvements owned and controlled by private corporations, but in this instance I would make an exception. Between the Missouri River and the Rocky Mountains there is an arid belt of public land from 300 to 500 miles in width, perfectly valueless for the occupation of man, for the want of sufficient rain to secure the growth of any product. An irrigating canal would make productive a belt as wide as the supply of water could be made to spread over across this entire country, and would secure a cordon of settlements connecting the present population of the mountain and mining regions with that of the older States. All the land reclaimed would be clear gain. If alternate sections are retained by the Government, I would suggest that the retained sections be thrown open to entry under the homestead laws, or sold to actual settlers for a very low price.

I renew my previous recommendation to Congress for general amnesty. The number engaged in the late rebellion yet laboring under disabilities is very small, but enough to keep up a constant irritation. No possible danger can accrue to the Government by restoring them to eligibility to hold office.

I suggest for your consideration the enactment of a law to better secure the civil rights which freedom should secure, but has not effectually secured, to the enfranchised slave.

U.S. GRANT.



SPECIAL MESSAGES.

WASHINGTON, December 2, 1873.

To the Senate and House of Representatives:

I herewith transmit to Congress a report, dated the 2d instant, with accompanying papers,[76] received from the Secretary of State, in compliance with the requirements of the sixteenth and eighteenth sections of the act entitled "An act to regulate the diplomatic and consular systems of the United States," approved August 18, 1856.

U.S. GRANT.

[Footnote 76: Report of fees collected, etc., by consular officers of the United States for 1872, list of consular officers and their official residences, and tariff of consular fees.]



WASHINGTON, January 5, 1874.

To the Senate of the United States:

I transmit, for the consideration of the Senate with a view to ratification, a convention for the surrender of criminals between the United States of America and the Republic of Honduras, which was signed at Comayagua on the 4th day of June, 1873.

U.S. GRANT.



WASHINGTON, January 5, 1874.

To the Senate and House of Representatives:

In my annual message of December last I gave reason to expect that when the full and accurate text of the correspondence relating to the steamer Virginius, which had been telegraphed in cipher, should be received the papers concerning the capture of the vessel, the execution of a part of its passengers and crew, and the restoration of the ship and the survivors would be transmitted to Congress.

In compliance with the expectations then held out, I now transmit the papers and correspondence on that subject.

On the 26th day of September, 1870, the Virginius was registered in the custom-house at New York as the property of a citizen of the United States, he having first made oath, as required by law, that he was "the true and only owner of the said vessel, and that there was no subject or citizen of any foreign prince or state, directly or indirectly, by way of trust, confidence, or otherwise, interested therein."

Having complied with the requisites of the statute in that behalf, she cleared in the usual way for the port of Curacoa, and on or about the 4th day of October, 1870, sailed for that port. It is not disputed that she made the voyage according to her clearance, nor that from that day to this she has not returned within the territorial jurisdiction of the United States. It is also understood that she preserved her American papers, and that when within foreign ports she made the practice of putting forth a claim to American nationality, which was recognized by the authorities at such ports.

When, therefore, she left the port of Kingston, in October last, under the flag of the United States, she would appear to have had, as against all powers except the United States, the right to fly that flag and to claim its protection, as enjoyed by all regularly documented vessels registered as part of our commercial marine.

No state of war existed conferring upon a maritime power the right to molest and detain upon the high seas a documented vessel, and it can not be pretended that the Virginius had placed herself without the pale of all law by acts of piracy against the human race.

If her papers were irregular or fraudulent, the offense was one against the laws of the United States, justiciable only in their tribunals.

When, therefore, it became known that the Virginius had been captured on the high seas by a Spanish man-of-war; that the American flag had been hauled down by the captors; that the vessel had been carried to a Spanish port, and that Spanish tribunals were taking jurisdiction over the persons of those found on her, and exercising that jurisdiction upon American citizens, not only in violation of the rules of international law, but in contravention of the provisions of the treaty of 1795, I directed a demand to be made upon Spain for the restoration of the vessel and for the return of the survivors to the protection of the United States, for a salute to the flag, and for the punishment of the offending parties.

The principles upon which these demands rested could not be seriously questioned, but it was suggested by the Spanish Government that there were grave doubts whether the Virginius was entitled to the character given her by her papers, and that therefore it might be proper for the United States, after the surrender of the vessel and the survivors, to dispense with the salute to the flag, should such fact be established to their satisfaction.

This seemed to be reasonable and just. I therefore assented to it, on the assurance that Spain would then declare that no insult to the flag of the United States had been intended.

I also authorized an agreement to be made that should it be shown to the satisfaction of this Government that the Virginius was improperly bearing the flag proceedings should be instituted in our courts for the punishment of the offense committed against the United States. On her part Spain undertook to proceed against those who had offended the sovereignty of the United States, or who had violated their treaty rights.

The surrender of the vessel and the survivors to the jurisdiction of the tribunals of the United States was an admission of the principles upon which our demands had been founded. I therefore had no hesitation in agreeing to the arrangement finally made between the two Governments—an arrangement which was moderate and just, and calculated to cement the good relations which have so long existed between Spain and the United States.

Under this agreement the Virginius, with the American flag flying, was delivered to the Navy of the United States at Bahia Honda, in the island of Cuba, on the 16th ultimo. She was then in an unseaworthy condition. In the passage to New York she encountered one of the most tempestuous of our winter storms. At the risk of their lives the officers and crew placed in charge of her attempted to keep her afloat. Their efforts were unavailing, and she sank off Cape Fear. The prisoners who survived the massacres were surrendered at Santiago de Cuba on the 18th ultimo, and reached the port of New York in safety.

The evidence submitted on the part of Spain to establish the fact that the Virginius at the time of her capture was improperly bearing the flag of the United States is transmitted herewith, together with the opinion of the Attorney-General thereon and a copy of the note of the Spanish minister, expressing on behalf of his Government a disclaimer of an intent of indignity to the flag of the United States.

U.S. GRANT.



WASHINGTON, January 5, 1874.

To the Senate of the United States:

I transmit, for the consideration of the Senate with a view to ratification, a convention between the United States of America and the Republic of Salvador, which was signed at San Salvador on the 12th of May last, stipulating for an extension of the period for exchanging the ratifications of the treaty of amity, commerce, and consular privileges concluded between the two countries on the 6th December, 1870.

U.S. GRANT.



WASHINGTON, January 5, 1874.

To the Senate of the United States:

I transmit, for the consideration of the Senate with a view to ratification, a convention between the United States of America and the Republic of Salvador, which was signed at San Salvador on the 12th of May last, for an extension of the period for exchanging the ratifications of the treaty for the extradition of criminals concluded between the two countries on the 23d of May, 1870.

U.S. GRANT.



WASHINGTON, January 6, 1874.

To the Senate of the United States:

I transmit to the Senate an "agreement," signed at Lima on the 5th of June last by Mr. Francis Thomas, envoy extraordinary and minister plenipotentiary of the United States, and Mr. Jose de la Riva Aguero, minister for foreign affairs of Peru, providing for an extension of the time for the exchange of the ratifications of the treaty of friendship, commerce, and navigation and the treaty of extradition between the United States and Peru of the 6th and 12th of September, 1870, respectively. The limit of the proposed extension is to be nine months from the time when the Senate of the United States may approve thereof. The expediency of this approval is consequently submitted to the consideration of the Senate. The instruments themselves were approved by that body on the 31st of March, 1871, and they were ratified by me in order that our ratifications might be ready for exchange for those of Peru. The omission of the latter seasonably to perform that act is understood to have been occasioned solely by the delay in the meeting of the Congress of that Republic, whose sanction, pursuant to its constitution, was necessary.

U.S. GRANT.



EXECUTIVE MANSION, Washington, January 7, 1874.

To the House of Representatives:

In reply to the resolution of the House of Representatives of the 15th of last December, requesting a revision of the estimates for the expenses of the Government for the fiscal year ending June 30, 1875, I have the honor to transmit herewith amended estimates and replies from the several Departments.

U.S. GRANT.



EXECUTIVE MANSION, January 8, 1874.

To the Senate and House of Representatives:

In compliance with the act of Congress approved March 3, 1873, entitled "An act to authorize inquiries into the causes of steam-boiler explosions," I directed the Secretaries of the Treasury and Navy Departments to create a commission to conduct the experiments and collect the information contemplated by the act. Such a commission was created, and I have the honor to submit herewith a report of the result of their labors to the present time.

U.S. GRANT.



EXECUTIVE MANSION, January 13, 1874.

To the Senate of the United States:

Since nominating the Hon. Caleb Gushing for Chief Justice of the Supreme Court of the United States information has reached me which induces me to withdraw him from nomination as the highest judicial officer of the Government, and I do therefore hereby withdraw said nomination.

U.S. GRANT.



EXECUTIVE MANSION, January 19, 1874.

To the Senate of the United States:

In reply to the resolution of the Senate of the 8th instant, requesting information "relative to any unauthorized occupation or invasion of or encroachment upon the Indian Territory, so called, by individuals or bodies of men, in violation of treaty stipulations," I have the honor to submit herewith the reply of the Secretary of the Interior, to whom the resolution was referred.

U.S. GRANT.



WASHINGTON, January 27, 1874.

To the Senate of the United States:

I transmit, for the consideration of the Senate with a view to its ratification, a protocol relative to a claim on the Government of Chile in the case of the ship Good Return.

U.S. GRANT.



WASHINGTON, February 6, 1874.

To the House of Representatives:

I transmit to the House of Representatives, in answer to their resolution of the 16th ultimo, a report from the Secretary of State, with accompanying papers.[77]

U.S. GRANT.

[Footnote 77: Correspondence relative to the refusal of the United States consul at Cadiz, Spain, to certify invoices of wine shipped from that port, etc.]



WASHINGTON, February 6, 1874.

To the Senate and House of Representatives:

I transmit herewith a copy of a communication, dated the 22d ultimo, received from the governor of the State of New York, in which it is announced that, in accordance with the invitation of Congress as expressed in the act approved July 2, 1864, that State now presents for acceptance a bronze statue of George Clinton, deceased, one of its distinguished citizens.

U.S. GRANT.



EXECUTIVE MANSION, Washington, February 9, 1874.

To the House of Representatives:

I have the honor to transmit herewith the report of the Secretary of the Department of the Interior, to whom was referred the resolution of the House of Representatives of January 7, requesting "a statement of the extent and nature of the contracts, purchases, and expenditures for the Indian service made since July 1, 1873, setting forth which, if any, of them were made or entered into without conference with the Board of Indian Commissioners appointed by the President, and the extent and description of contracts and vouchers objected to by said board, stating to what extent payments have been made thereon against their remonstrance."

U.S. GRANT.



EXECUTIVE MANSION, Washington, February 10, 1874.

To the House of Representatives:

I have the honor to transmit herewith reports from the Secretaries of the War Department and Department of the Interior, to whom were referred the resolutions of the House of Representatives of the 7th of January last, requesting "copies of all the correspondence between the different Departments of the Government and the peace commissioners during the war with the Modoc Indians in southern Oregon and northern California during the years 1872 and 1873; also copies of all the correspondence with and orders issued to the military authorities engaged in said war up to the period of the removal of said Modoc Indians from the States of Oregon and California."

U.S. GRANT.



WASHINGTON, February 17, 1874.

To the Senate and House of Representatives:

I transmit herewith a communication from the Secretary of State and accompanying papers.[78]

U.S. GRANT.

[Footnote 78: Report of John M. Thacher, United States delegate to the International Patent Congress held at Vienna in August, 1873, and exhibits.]



EXECUTIVE MANSION, February 19, 1874.

To the Senate and House of Representatives:

I have the honor to transmit herewith a memorial upon the "cultivation of timber and the preservation of forests," and a draft of a joint resolution prepared by the American Association for the Advancement of Science, together with a communication from the Commissioner of the General Land Office upon the same subject.

U.S. GRANT.



EXECUTIVE MANSION, Washington, February 25, 1874.

To the Senate and House of Representatives:

I have the honor herewith to submit the report of the Centennial Commissioners, and to add a word in the way of recommendation.

There have now been international expositions held by three of the great powers of Europe. It seems fitting that the one hundredth anniversary of our independence should be marked by an event that will display to the world the growth and progress of a nation devoted to freedom and to the pursuit of fame, fortune, and honors by the lowest citizen as well as the highest. A failure in this enterprise would be deplorable. Success can be assured by arousing public opinion to the importance of the occasion.

To secure this end, in my judgment, Congressional legislation is necessary to make the exposition both national and international.

The benefits to be derived from a successful international exposition are manifold. It will necessarily be accompanied by expenses beyond the receipts from the exposition itself, but they will be compensated for many fold by the commingling of people from all sections of our own country; by bringing together the people of different nationalities; by bringing into juxtaposition, for ready examination, our own and foreign skill and progress in manufactures, agriculture, art, science, and civilization.

The selection of the site for the exposition seems to me appropriate, from the fact that one hundred years before the date fixed for the exposition the Declaration of Independence, which launched us into the galaxy of nations as an independent people, emanated from the same spot.

We have much in our varied climate, soil, mineral products, and skill of which advantage can be taken by other nationalities to their profit. In return they will bring to our shores works of their skill and familiarize our people with them, to the mutual advantage of all parties.

Let us have a complete success in our Centennial Exposition or suppress it in its infancy, acknowledging our inability to give it the international character to which our self-esteem aspires.

U.S. GRANT.



EXECUTIVE MANSION, Washington, D.C., March 4, 1874.

To the House of Representatives:

I have the honor to transmit herewith replies from the several Departments, in answer to a resolution of the House of Representatives of the 16th of January last, requesting a list of all expenses incurred by the various Departments for transportation of any matter which before the abolition of the franking privilege was carried in the mails.

U.S. GRANT.



WASHINGTON, March 20, 1874.

To the Senate of the United States:

I transmit herewith, for the consideration of the Senate and with a view to its ratification, a convention concluded between the United States and Belgium on the 19th March, 1874, concerning extradition.

U.S. GRANT.



EXECUTIVE MANSION, March 23, 1874.

To the Senate and House of Representatives:

I have the honor to transmit herewith the report of the board of commissioners on the irrigation of the San Joaquin, Tulare, and Sacramento valleys, of the State of California, and also the original maps accompanying said report.

U.S. GRANT.



EXECUTIVE MANSION, Washington, April 18, 1874.

To the Senate and House of Representatives:

Herewith I transmit the report of the Civil Service Commission authorized by the act of Congress of March 3, 1871, and invite your special attention thereto.

If sustained by Congress, I have no doubt the rules can, after the experience gained, be so improved and enforced as to still more materially benefit the public service and relieve the Executive, members of Congress, and the heads of Departments from influences prejudicial to good administration.

The rules, as they have heretofore been enforced, have resulted beneficially, as is shown by the opinions of the members of the Cabinet and their subordinates in the Departments, and in that opinion I concur; but rules applicable to officers who are to be appointed by and with the advice and consent of the Senate are in great measure impracticable, except in so far as they may be sustained by the action of that body. This must necessarily remain so unless the direct sanction of the Senate is given to the rules.

I advise for the present only such appropriation as may be adequate to continue the work in its present form, and would leave to the future to determine whether the direct sanction of Congress should be given to rules that may, perhaps, be devised for regulating the method of selection of appointees, or a portion of them, who need to be confirmed by the Senate.

The same amount appropriated last year would be adequate for the coming year, but I think the public interest would be promoted by authority in the Executive for allowing a small compensation for special service performed beyond usual office hours, under the act of 1871, to persons already in the service of the Government.

U.S. GRANT.



WASHINGTON, April 21, 1874.

To the Senate and House of Representatives:

I transmit herewith to the Senate and House of Representatives a communication from the Secretary of State and the report by which it is accompanied, upon Samoan or Navigators Islands.

U.S. GRANT.



EXECUTIVE MANSION, Washington, April 23, 1874.

To the House of Representatives:

I transmit herewith the papers called for by the resolution of the House of Representatives of the 20th instant, requesting all correspondence by telegraph or otherwise between the persons claiming to be governor of Arkansas and myself relating to the troubles in that State, together with copies of any order or directions given by me or under my direction to the military officer in charge of the garrison or in command of the United States troops at Little Rock.

U.S. GRANT.



EXECUTIVE MANSION, Washington, April 28, 1874.

To the House of Representatives:

I have the honor to transmit herewith additional correspondence received since my communication of the 23d instant, in reply to the resolution of the House of Representatives of the 20th instant, requesting copies of correspondence between persons claiming to be governor of Arkansas and myself relating to troubles in that State.

U.S. GRANT.



EXECUTIVE MANSION, Washington, April 30, 1874.

To the House of Representatives:

In pursuance of the resolution of the House of Representatives of the 15th instant, requesting to be informed "what geographical and geological surveys under different Departments and branches of the Government are operating in the same and contiguous areas of territory west of the Mississippi River, and whether it be not practicable to consolidate them under one Department or to define the geographical limits to be embraced by each," I have the honor to transmit herewith the views of the officers of the War and Interior Departments on the subjects named in the said resolution, and invite attention thereto.

Where surveys are made with the view of sectionizing the public lands, preparatory to opening them for settlement or entry, there is no question but such surveys and all work connected therewith should be under the direct control of the Interior Department or the Commissioner of the General Land Office, subject to the supervision of the Secretary of the Interior. But where the object is to complete the map of the country; to determine the geographical, astronomical, geodetic, topographic, hydrographic, meteorological, geological, and mineralogical features of the country—in other words, to collect full information of the unexplored or but partially known portions of the country—it seems to me a matter of no importance as to which Department of the Government should have control of the work. The conditions which should control this subject are, in my judgment, first, which Department is prepared to do the work best; second, which can do it the most expeditiously and economically.

As the country to be explored is occupied in great part by uncivilized Indians, all parties engaged in the work at hand must be supplied with escorts from the Army, thus placing a large portion of the expense upon the War Department; and as the Engineer Corps of the Army is composed of scientific gentlemen, educated and practiced for just the kind of work to be done, and as they are under pay whether employed in this work or not, it would seem that the second condition named would be more fully complied with by employing them to do the work. There is but little doubt that they will accomplish it as promptly and as well, and much more economically.

U.S. GRANT.



WASHINGTON, May 19, 1874.

To the House of Representatives:

I transmit herewith, in answer to the resolution of the House of Representatives of the 9th instant, a report[79] from the Secretary of State, with accompanying papers.

U.S. GRANT.

[Footnote 79: Relating to the involuntary deportation to the United States of foreign convicts, paupers, idiots, insane persons, etc., and transmitting correspondence relative thereto.]



WASHINGTON, May 25, 1874.

To the Senate and House of Representatives:

In response to the resolution of the Senate of the 15th instant, I have the honor to transmit herewith "all papers and correspondence relating to the troubles in the State of Arkansas not heretofore communicated to either House of Congress."

U.S. GRANT.



WASHINGTON, May 25, 1874.

To the Senate and House of Representatives:

I have the honor to transmit, in response to the resolution of the Senate of the 18th instant, requesting "the answers in full received by the Civil Service Commission in reply to their circular addressed to the various heads of Departments and bureaus requesting a report as to the operation and effect of the civil-service rules in the several Departments and offices," a copy of a letter received from the chairman of the Civil Service Commission, to whom the resolution was referred.

U.S. GRANT.



WASHINGTON, May 26, 1874.

To the Senate of the United States:

I transmit herewith a report from the Secretary of State, and accompanying it copies of all papers on file or on record in the Department of State respecting the claim on Brazil concerning the Caroline.

U.S. GRANT.



WASHINGTON, May 26, 1874.

To the Senate and House of Representatives:

I transmit to the Senate and House of Representatives a communication from the Secretary of State and a copy of the report of the commissioners to inquire into depredations on the frontiers of Texas, by which it is accompanied.

U.S. GRANT.



WASHINGTON, June 15, 1874.

To the Senate of the United States:

I transmit, for the consideration of the Senate with a view to ratification, a declaration respecting trade-marks between the United States and the Emperor of Russia, concluded and signed at St. Petersburg on the 16/28 day of March last.

U.S. GRANT.



WASHINGTON, June 18, 1874.

To the Senate of the United States:

The plenipotentiaries of Her Britannic Majesty at Washington have submitted to the Secretary of State, for my consideration, a draft of a treaty for the reciprocal regulation of the commerce and trade between the United States and Canada, with provisions for the enlargement of the Canadian canals and for their use by United States vessels on terms of equality with British vessels. I transmit herewith a report from the Secretary of State, with a copy of the draft thus proposed.

I am of the opinion that a proper treaty for such purposes would result beneficially for the United States. It would not only open or enlarge markets for our products, but it would increase the facilities of transportation from the grain-growing States of the West to the seaboard.

The proposed draft has many features to commend it to our favorable consideration; but whether it makes all the concessions which could justly be required of Great Britain, or whether it calls for more concessions from the United States than we should yield, I am not prepared to say.

Among its provisions are articles proposing to dispense with the arbitration respecting the fisheries, which was provided for by the treaty of Washington, in the event of the conclusion and ratification of a treaty and the passage of all the necessary legislation to enforce it.

These provisions, as well as other considerations, make it desirable that this subject should receive attention before the close of the present session. I therefore express an earnest wish that the Senate may be able to consider and determine before the adjournment of Congress whether it will give its constitutional concurrence to the conclusion of a treaty with Great Britain for the purposes already named, either in such form as is proposed by the British plenipotentiaries or in such other more acceptable form as the Senate may prefer.

U.S. GRANT.



WASHINGTON, June 18, 1874.

To the Senate and House of Representatives:

I transmit herewith a report from the Secretary of State and its accompanying papers.[80]

U.S. GRANT.

[Footnote 80: Report of the United States delegates to the eighth session of the International Statistical Congress, held at St. Petersburg, Russia, in August, 1872, and appendix.]



EXECUTIVE MANSION, Washington, June 20, 1874.

To the Senate and House of Representatives:

I respectfully invite the attention of Congress to one feature of the bill entitled "An act for the government of the District of Columbia, and for other purposes." Provision is therein made for the payment of the debts of the District in bonds to be issued by the sinking-fund commissioners, running fifty years and bearing interest at the rate of 3.65 per cent per annum, with the payment of the principal and interest guaranteed by the United States.

The government by which these debts were created is abolished, and no other provision seems to be made for their payment. Judging from the transactions in other bonds, there are good grounds, in my opinion, for the apprehension that bonds bearing this rate of interest when issued will be worth much less than their equivalent in the current money of the United States. This appears to me to be unjust to those to whom these bonds are to be paid, and, to the extent of the difference between their face and real value, looks like repudiating the debts of the District. My opinion is that to require creditors of the District of Columbia to receive these bonds at par when it is apparent that to be converted into money they must be sold at a large discount will not only prove greatly injurious to the credit of the District, but will reflect unfavorably upon the credit and good faith of the United States.

I would recommend, therefore, that provision be made at the present session of Congress to increase the interest upon these bonds, so that when sold they will bring an equivalent in money, and that the Secretary of the Treasury be authorized to negotiate the sale of these bonds at not less than par and pay the proceeds thereof to those who may be ascertained to have valid claims against the District of Columbia.

U.S. GRANT.



VETO MESSAGES.

EXECUTIVE MANSION, Washington, April 10, 1874.

To the House of Representatives:

I have the honor to herewith return to you without my approval House bill No. 1224, entitled "An act for the relief of William H. Denniston, late an acting second lieutenant, Seventieth New York Volunteers," for the reasons set forth in the accompanying letter of the Secretary of War.

U.S. GRANT.



WAR DEPARTMENT, Washington, D.C., April 8, 1874.

The PRESIDENT.

SIR: I have the honor to return House bill No. 1224, "for the relief of William H. Denniston, late an acting second lieutenant, Seventieth New York Volunteers," with the remark that the name of William H. Denniston, as an officer or private, is not borne on any rolls of the Seventieth New York Volunteers on file in the Department. Of this fact the Committee on Military Affairs of the House of Representatives was informed by letter from the Adjutant-General's Office dated December 19, 1873.

No vacancy existed in Company D (the company claimed) of this regiment for a second lieutenant during the period claimed, Second Lieutenant J.B. Zeigler having filled that position to May 6, 1862, and Second Lieutenant James Stevenson from that date to June 25, 1862. On regimental return for July, 1862, Edward Shields is reported promoted second lieutenant June 15, 1862.

There is no evidence in the Department that he actually served as a second lieutenant for the time covered by the bill herewith, and it is therefore respectfully recommended that the bill be returned to the House of Representatives without approval.

When the records of the War Department, prepared under laws and regulations having in view the establishment and preservation of data necessary to the protection of the public interests as well as that of the claimants, fail to show service, it is a subject of importance to legalize a claim wherein the military department of the Government has not seen the order under which the alleged service may have been claimed. A precedent of the kind is beyond doubt an injury to the public interest, and will tend to other special acts of relief under which thousands of muster rolls certified at the date, under the Articles of War, as exhibiting the true state of the command will be invalidated, and large appropriations of money will be required to settle claims the justness of which can not always be determined at a date so remote from their origin.

Very respectfully, your obedient servant,

WM. W. BELKNAP,

Secretary of War.



EXECUTIVE MANSION, April 22, 1874.

To the Senate of the United States:

Herewith I return Senate bill No. 617, entitled "An act to fix the amount of United States notes and the circulation of national banks, and for other purposes," without my approval.

In doing so I must express my regret at not being able to give my assent to a measure which has received the sanction of a majority of the legislators chosen by the people to make laws for their guidance, and I have studiously sought to find sufficient arguments to justify such assent, but unsuccessfully.

Practically it is a question whether the measure under discussion would give an additional dollar to the irredeemable paper currency of the country or not, and whether by requiring three-fourths of the reserve to be retained by the banks and prohibiting interest to be received on the balance it might not prove a contraction.

But the fact can not be concealed that theoretically the bill increases the paper circulation $100,000,000, less only the amount of reserves restrained from circulation by the provision of the second section. The measure has been supported on the theory that it would give increased circulation. It is a fair inference, therefore, that if in practice the measure should fail to create the abundance of circulation expected of it the friends of the measure, particularly those out of Congress, would clamor for such inflation as would give the expected relief.

The theory, in my belief, is a departure from true principles of finance, national interest, national obligations to creditors, Congressional promises, party pledges (on the part of both political parties), and of personal views and promises made by me in every annual message sent to Congress and in each inaugural address.

In my annual message to Congress in December, 1869, the following passages appear:

Among the evils growing out of the rebellion, and not yet referred to, is that of an irredeemable currency. It is an evil which I hope will receive your most earnest attention. It is a duty, and one of the highest duties, of Government to secure to the citizen a medium of exchange of fixed, unvarying value. This implies a return to a specie basis, and no substitute for it can be devised. It should be commenced now and reached at the earliest practicable moment consistent with a fair regard to the interests of the debtor class. Immediate resumption, if practicable, would not be desirable. It would compel the debtor class to pay, beyond their contracts, the premium on gold at the date of their purchase, and would bring bankruptcy and ruin to thousands. Fluctuation, however, in the paper value of the measure of all values (gold) is detrimental to the interests of trade. It makes the man of business an involuntary gambler, for in all sales where future payment is to be made both parties speculate as to what will be the value of the currency to be paid and received. I earnestly recommend to you, then, such legislation as will insure a gradual return to specie payments and put an immediate stop to fluctuations in the value of currency.

I still adhere to the views then expressed.

As early as December 4, 1865, the House of Representatives passed a resolution, by a vote of 144 yeas to 6 nays, concurring "in the views of the Secretary of the Treasury in relation to the necessity of a contraction of the currency, with a view to as early a resumption of specie payments as the business interests of the country will permit," and pledging "cooperative action to this end as speedily as possible."

The first act passed by the Forty-first Congress, [approved] on the 18th day of March, 1869, was as follows:

AN ACT to strengthen the public credit.

Be it enacted, etc., That in order to remove any doubt as to the purpose of the Government to discharge all just obligations to the public creditors, and to settle conflicting questions and interpretations of the law by virtue of which such obligations have been contracted, it is hereby provided and declared that the faith of the United States is solemnly pledged to the payment in coin or its equivalent of all the obligations of the United States not bearing interest, known as United States notes, and all the interest-bearing obligations of the United States, except in cases where the law authorizing the issue of any such obligation has expressly provided that the same may be paid in lawful money or in other currency than gold and silver; but none of the said interest-bearing obligations not already due shall be redeemed or paid before maturity unless at such time United States notes shall be convertible into coin at the option of the holder, or unless at such time bonds of the United States bearing a lower rate of interest than the bonds to be redeemed can be sold at par in coin. And the United States also solemnly pledges its faith to make provision at the earliest practicable period for the redemption of the United States notes in coin.

This act still remains as a continuing pledge of the faith of the United States "to make provision at the earliest practicable period for the redemption of the United States notes in coin."

A declaration contained in the act of June 30, 1864, created an obligation that the total amount of United States notes issued or to be issued should never exceed $400,000,000. The amount in actual circulation was actually reduced to $356,000,000, at which point Congress passed the act of February 4, 1868, suspending the further reduction of the currency. The forty-four millions have ever been regarded as a reserve, to be used only in case of emergency, such as has occurred on several occasions, and must occur when from any cause revenues suddenly fall below expenditures; and such a reserve is necessary, because the fractional currency, amounting to fifty millions, is redeemable in legal tender on call.

It may be said that such a return of fractional currency for redemption is impossible; but let steps be taken for a return to a specie basis and it will be found that silver will take the place of fractional currency as rapidly as it can be supplied, when the premium on gold reaches a sufficiently low point. With the amount of United States notes to be issued permanently fixed within proper limits and the Treasury so strengthened as to be able to redeem them in coin on demand it will then be safe to inaugurate a system of free banking with such provisions as to make compulsory redemption of the circulating notes of the banks in coin, or in United States notes, themselves redeemable and made equivalent to coin.

As a measure preparatory to free banking, and for placing the Government in a condition to redeem its notes in coin "at the earliest practicable period," the revenues of the country should be increased so as to pay current expenses, provide for the sinking fund required by law, and also a surplus to be retained in the Treasury in gold.

I am not a believer in any artificial method of making paper money equal to coin when the coin is not owned or held ready to redeem the promises to pay, for paper money is nothing more than promises to pay, and is valuable exactly in proportion to the amount of coin that it can be converted into. While coin is not used as a circulating medium, or the currency of the country is not convertible into it at par, it becomes an article of commerce as much as any other product. The surplus will seek a foreign market as will any other surplus. The balance of trade has nothing to do with the question. Duties on imports being required in coin creates a limited demand for gold. About enough to satisfy that demand remains in the country. To increase this supply I see no way open but by the Government hoarding through the means above given, and possibly by requiring the national banks to aid.

It is claimed by the advocates of the measure herewith returned that there is an unequal distribution of the banking capital of the country. I was disposed to give great weight to this view of the question at first, but on reflection it will be remembered that there still remains $4,000,000 of authorized bank-note circulation assigned to States having less than their quota not yet taken. In addition to this the States having less than their quota of bank circulation have the option of twenty-five millions more to be taken from those States having more than their proportion. When this is all taken up, or when specie payments are fully restored or are in rapid process of restoration, will be the time to consider the question of "more currency."

U.S. GRANT.



EXECUTIVE MANSION, Washington, May 12, 1874.

To the House of Representatives:

I return herewith without my signature House bill No. 1331, entitled "An act for the relief of Joab Spencer and James R. Mead for supplies furnished the Kansas tribe of Indians." I withheld my approval of said bill for reasons which satisfy me the claim should not be allowed for the entire amount stated in the bill, and which are set forth in the letter of the Secretary of the Interior of the 7th instant, a copy of which, with the accompanying papers, is herewith transmitted.

U.S. GRANT.



DEPARTMENT OF THE INTERIOR,

Washington, D.C., May 7, 1874.

The PRESIDENT.

SIR: I have the honor to return herewith engrossed bill H.R. 1331, entitled "An act for the relief of Joab Spencer and James R. Mead for supplies furnished the Kansas tribe of Indians," and to state that said bill was the subject of a report made to the Department by the Commissioner of Indian Affairs on the 11th ultimo, with which he submitted letters from Enoch Hoag, superintendent of Indian affairs, and Mahlon Stubbs, Indian agent, representing that the justness and correctness of the claim of Spencer & Mead had not been established, and suggesting that further proceedings in the premises be deferred until a thorough investigation of the facts and circumstances of the case could be had.

The suggestion of the Indian agent received the concurrence of the Commissioner of Indian Affairs and the approval of this Department, and on the 17th ultimo the attention of Congress was invited to the subject in a letter addressed to the Speaker of the House of Representatives by the Secretary of the Interior. At the latter date the bill appears to have been pending in the Senate, of which fact this Department at that time was not informed.