Infomotions, Inc.State of the Union Address / Grant, Ulysses S. (Ulysses Simpson), 1822-1885



Author: Grant, Ulysses S. (Ulysses Simpson), 1822-1885
Title: State of the Union Address
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Title: State of the Union Addresses of Ulysses S. Grant

Author: Ulysses S. Grant

Release Date: February, 2004  [EBook #5026]
[Yes, we are more than one year ahead of schedule]
[This file was first posted on April 11, 2002]
[Date last updated: December 16, 2004]

Edition: 11

Language: English

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*** START OF THE PROJECT GUTENBERG EBOOK OF ADDRESSES BY ULYSSES S. GRANT ***




This eBook was produced by James Linden.

The addresses are separated by three asterisks: ***

Dates of addresses by Ulysses S. Grant in this eBook:
  December 6, 1869
  December 5, 1870
  December 4, 1871
  December 2, 1872
  December 1, 1873
  December 7, 1874
  December 7, 1875
  December 5, 1876



***

State of the Union Address
Ulysses S. Grant
December 6, 1869

To the Senate and House of Representatives:

In coming before you for the first time as Chief Magistrate of this great
nation, it is with gratitude to the Giver of All Good for the many benefits
we enjoy. We are blessed with peace at home, and are without entangling
alliances abroad to forebode trouble; with a territory unsurpassed in
fertility, of an area equal to the abundant support of 500,000,000 people,
and abounding in every variety of useful mineral in quantity sufficient to
supply the world for generations; with exuberant crops; with a variety of
climate adapted to the production of every species of earth's riches and
suited to the habits, tastes, and requirements of every living thing; with
a population of 40,000,000 free people, all speaking one language; with
facilities for every mortal to acquire an education; with institutions
closing to none the avenues to fame or any blessing of fortune that may be
coveted; with freedom of the pulpit, the press, and the school; with a
revenue flowing into the National Treasury beyond the requirements of the
Government. Happily, harmony is being rapidly restored within our own
borders. Manufactures hitherto unknown in our country are springing up in
all sections, producing a degree of national independence unequaled by that
of any other power.

These blessings and countless others are intrusted to your care and mine
for safe-keeping for the brief period of our tenure of office. In a short
time we must, each of us, return to the ranks of the people, who have
conferred upon us our honors, and account to them for our stewardship. I
earnestly desire that neither you nor I may be condemned by a free and
enlightened constituency nor by our own consciences.

Emerging from a rebellion of gigantic magnitude, aided, as it was, by the
sympathies and assistance of nations with which we were at peace, eleven
States of the Union were, four years ago, left without legal State
governments. A national debt had been contracted; American commerce was
almost driven from the seas; the industry of one-half of the country had
been taken from the control of the capitalist and placed where all labor
rightfully belongs--in the keeping of the laborer. The work of restoring
State governments loyal to the Union, of protecting and fostering free
labor, and providing means for paying the interest on the public debt has
received ample attention from Congress. Although your efforts have not met
with the success in all particulars that might have been desired, yet on
the whole they have been more successful than could have been reasonably
anticipated.

Seven States which passed ordinances of secession have been fully restored
to their places in the Union. The eighth (Georgia) held an election at
which she ratified her constitution, republican in form, elected a
governor, Members of Congress, a State legislature, and all other officers
required. The governor was duly installed, and the legislature met and
performed all the acts then required of them by the reconstruction acts of
Congress. Subsequently, however, in violation of the constitution which
they had just ratified (as since decided by the supreme court of the
State), they unseated the colored members of the legislature and admitted
to seats some members who are disqualified by the third clause of the
fourteenth amendment to the Constitution--an article which they themselves
had contributed to ratify. Under these circumstances I would submit to you
whether it would not be wise, without delay, to enact a law authorizing the
governor of Georgia to convene the members originally elected to the
legislature, requiring each member to take the oath prescribed by the
reconstruction acts, and none to be admitted who are ineligible under the
third clause of the fourteenth amendment.

The freedmen, under the protection which they have received, are making
rapid progress in learning, and no complaints are heard of lack of industry
on their part where they receive fair remuneration for their labor. The
means provided for paying the interest on the public debt, with all other
expenses of Government, are more than ample. The loss of our commerce is
the only result of the late rebellion which has not received sufficient
attention from you. To this subject I call your earnest attention. I will
not now suggest plans by which this object may be effected, but will, if
necessary, make it the subject of a special message during the session of
Congress.

At the March term Congress by joint resolution authorized the Executive to
order elections in the States of Virginia, Mississippi, and Texas, to
submit to them the constitutions which each had previously, in convention,
framed, and submit the constitutions, either entire or in separate parts,
to be voted upon, at the discretion of the Executive. Under this authority
elections were called. In Virginia the election took place on the 6th of
July, 1869. The governor and lieutenant-governor elected have been
installed. The legislature met and did all required by this resolution and
by all the reconstruction acts of Congress, and abstained from all doubtful
authority. I recommend that her Senators and Representatives be promptly
admitted to their seats, and that the State be fully restored to its place
in the family of States. Elections were called in Mississippi and Texas, to
commence on the 30th of November, 1869, and to last two days in Mississippi
and four days in Texas. The elections have taken place, but the result is
not known. It is to be hoped that the acts of the legislatures of these
States, when they meet, will be such as to receive your approval, and thus
close the work of reconstruction.

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.

The methods to secure the former of these results are as numerous as are
the speculators on political economy. To secure the latter I see but one
way, and that is to authorize the Treasury to redeem its own paper, at a
fixed price, whenever presented, and to withhold from circulation all
currency so redeemed until sold again for gold.

The vast resources of the nation, both developed and undeveloped, ought to
make our credit the best on earth. With a less burden of taxation than the
citizen has endured for six years past, the entire public debt could be
paid in ten years. But it is not desirable that the people should be taxed
to pay it in that time. Year by year the ability to pay increases in a
rapid ratio. But the burden of interest ought to be reduced as rapidly as
can be done without the violation of contract. The public debt is
represented in great part by bonds having from five to twenty and from ten
to forty years to run, bearing interest at the rate of 6 per cent and 5 per
cent, respectively. It is optional with the Government to pay these bonds
at any period after the expiration of the least time mentioned upon their
face. The time has already expired when a great part of them may be taken
up, and is rapidly approaching when all may be. It is believed that all
which are now due may be replaced by bonds bearing a rate of interest not
exceeding 4 1/2 per cent, and as rapidly as the remainder become due that
they may be replaced in the same way. To accomplish this it may be
necessary to authorize the interest to be paid at either of three or four
of the money centers of Europe, or by any assistant treasurer of the United
States, at the option of the holder of the bond. I suggest this subject for
the consideration of Congress, and also, simultaneously with this, the
propriety of redeeming our currency, as before suggested, at its market
value at the time the law goes into effect, increasing the rate at which
currency shall be bought and sold from day to day or week to week, at the
same rate of interest as Government pays upon its bonds.

The subjects of tariff and internal taxation will necessarily receive your
attention. The revenues of the country are greater than the requirements,
and may with safety be reduced. But as the funding of the debt in a 4 or a
4 1/2 per cent loan would reduce annual current expenses largely, thus,
after funding, justifying a greater reduction of taxation than would be now
expedient, I suggest postponement of this question until the next meeting
of Congress.

It may be advisable to modify taxation and tariff in instances where unjust
or burdensome discriminations are made by the present laws, but a general
revision of the laws regulating this subject I recommend the postponement
of for the present. I also suggest the renewal of the tax on incomes, but
at a reduced rate, say of 3 per cent, and this tax to expire in three
years.

With the funding of the national debt, as here suggested, I feel safe in
saying that taxes and the revenue from imports may be reduced safely from
sixty to eighty millions per annum at once, and may be still further
reduced from year to year, as the resources of the country are developed.

The report of the Secretary of the Treasury shows the receipts of the
Government for the fiscal year ending June 30, 1869, to be $370,943,747,
and the expenditures, including interest, bounties, etc., to be
$321,490,597. The estimates for the ensuing year are more favorable to the
Government, and will no doubt show a much larger decrease of the public
debt.

The receipts in the Treasury beyond expenditures have exceeded the amount
necessary to place to the credit of the sinking fund, as provided by law.
To lock up the surplus in the Treasury and withhold it from circulation
would lead to such a contraction of the currency as to cripple trade and
seriously affect the prosperity of the country. Under these circumstances
the Secretary of the Treasury and myself heartily concurred in the
propriety of using all the surplus currency in the Treasury in the purchase
of Government bonds, thus reducing the interest-bearing indebtedness of the
country, and of submitting to Congress the question of the disposition to
be made of the bonds so purchased. The bonds now held by the Treasury
amount to about seventy-five millions, including those belonging to the
sinking fund. I recommend that the whole be placed to the credit of the
sinking fund.

Your attention is respectfully invited to the recommendations of the
Secretary of the Treasury for the creation of the office of commissioner of
customs revenue; for the increase of salaries to certain classes of
officials; the substitution of increased national-bank circulation to
replace the outstanding 3 per cent certificates; and most especially to his
recommendation for the repeal of laws allowing shares of fines, penalties,
forfeitures, etc., to officers of the Government or to informers.

The office of Commissioner of Internal Revenue is one of the most arduous
and responsible under the Government. It falls but little, if any, short of
a Cabinet position in its importance and responsibilities. I would ask for
it, therefore, such legislation as in your judgment will place the office
upon a footing of dignity commensurate with its importance and with the
character and qualifications of the class of men required to fill it
properly.

As the United States is the freest of all nations, so, too, its people
sympathize with all people struggling for liberty and self-government; but
while so sympathizing it is due to our honor that we should abstain from
enforcing our views upon unwilling nations and from taking an interested
part, without invitation, in the quarrels between different nations or
between governments and their subjects. Our course should always be in
conformity with strict justice and law, international and local. Such has
been the policy of the Administration in dealing with these questions. For
more than a year a valuable province of Spain, and a near neighbor of ours,
in whom all our people can not but feel a deep interest, has been
struggling for independence and freedom. The people and Government of the
United States entertain the same warm feelings and sympathies for the
people of Cuba in their pending struggle that they manifested throughout
the previous struggles between Spain and her former colonies in behalf of
the latter. But the contest has at no time assumed the conditions which
amount to a war in the sense of international law, or which would show the
existence of a de facto political organization of the insurgents sufficient
to justify a recognition of belligerency.

The principle is maintained, however, that this nation is its own judge
when to accord the rights of belligerency, either to a people struggling to
free themselves from a government they believe to be oppressive or to
independent nations at war with each other.

The United States have no disposition to interfere with the existing
relations of Spain to her colonial possessions on this continent. They
believe that in due time Spain and other European powers will find their
interest in terminating those relations and establishing their present
dependencies as independent powers--members of the family of nations. These
dependencies are no longer regarded as subject to transfer from one
European power to another. When the present relation of colonies ceases,
they are to become independent powers, exercising the right of choice and
of self-control in the determination of their future condition and
relations with other powers.

The United States, in order to put a stop to bloodshed in Cuba, and in the
interest of a neighboring people, proposed their good offices to bring the
existing contest to a termination. The offer, not being accepted by Spain
on a basis which we believed could be received by Cuba, was withdrawn. It
is hoped that the good offices of the United States may yet prove
advantageous for the settlement of this unhappy strife. Meanwhile a number
of illegal expeditions against Cuba have been broken up. It has been the
endeavor of the Administration to execute the neutrality laws in good
faith, no matter how unpleasant the task, made so by the sufferings we have
endured from lack of like good faith toward us by other nations.

On the 26th of March last the United States schooner Lizzie Major was
arrested on the high seas by a Spanish frigate, and two passengers taken
from it and carried as prisoners to Cuba. Representations of these facts
were made to the Spanish Government as soon as official information of them
reached Washington. The two passengers were set at liberty, and the Spanish
Government assured the United States that the captain of the frigate in
making the capture had acted without law, that he had been reprimanded for
the irregularity of his conduct, and that the Spanish authorities in Cuba
would not sanction any act that could violate the rights or treat with
disrespect the sovereignty of this nation.

The question of the seizure of the brig Mary Lowell at one of the Bahama
Islands by Spanish authorities is now the subject of correspondence between
this Government and those of Spain and Great Britain.

The Captain-General of Cuba about May last issued a proclamation
authorizing search to be made of vessels on the high seas. Immediate
remonstrance was made against this, whereupon the Captain-General issued a
new proclamation limiting the right of search to vessels of the United
States so far as authorized under the treaty of 1795. This proclamation,
however, was immediately withdrawn.

I have always felt that the most intimate relations should be cultivated
between the Republic of the United States and all independent nations on
this continent. It may be well worth considering whether new treaties
between us and them may not be profitably entered into, to secure more
intimate relations--friendly, commercial, and otherwise.

The subject of an interoceanic canal to connect the Atlantic and Pacific
oceans through the Isthmus of Darien is one in which commerce is greatly
interested. Instructions have been given to our minister to the Republic of
the United States of Colombia to endeavor to obtain authority for a survey
by this Government, in order to determine the practicability of such an
undertaking, and a charter for the right of way to build, by private
enterprise, such a work, if the survey proves it to be practicable.

In order to comply with the agreement of the United States as to a mixed
commission at Lima for the adjustment of claims, it became necessary to
send a commissioner and secretary to Lima in August last. No appropriation
having been made by Congress for this purpose, it is now asked that one be
made covering the past and future expenses of the commission.

The good offices of the United States to bring about a peace between Spain
and the South American Republics with which she is at war having been
accepted by Spain, Peru, and Chile, a congress has been invited to be held
in Washington during the present winter.

A grant has been given to Europeans of an exclusive right of transit over
the territory of Nicaragua, to which Costa Rico has given its assent,
which, it is alleged, conflicts with vested rights of citizens of the
United States. The Department of State has now this subject under
consideration.

The minister of Peru having made representations that there was a state of
war between Peru and Spain, and that Spain was constructing, in and near
New York, thirty gunboats, which might be used by Spain in such a way as to
relieve the naval force at Cuba, so as to operate against Peru, orders were
given to prevent their departure. No further steps having been taken by the
representative of the Peruvian Government to prevent the departure of these
vessels, and I not feeling authorized to detain the property of a nation
with which we are at peace on a mere Executive order, the matter has been
referred to the courts to decide.

The conduct of the war between the allies and the Republic of Paraguay has
made the intercourse with that country so difficult that it has been deemed
advisable to withdraw our representative from there.

Toward the close of the last Administration a convention was signed at
London for the settlement of all outstanding claims between Great Britain
and the United States, which failed to receive the advice and consent of
the Senate to its ratification. The time and the circumstances attending
the negotiation of that treaty were unfavorable to its acceptance by the
people of the United States, and its provisions were wholly inadequate for
the settlement of the grave wrongs that had been sustained by this
Government, as well as by its citizens. The injuries resulting to the
United States by reason of the course adopted by Great Britain during our
late civil war--in the increased rates of insurance; in the diminution of
exports and imports, and other obstructions to domestic industry and
production; in its effect upon the foreign commerce of the country; in the
decrease and transfer to Great Britain of our commercial marine; in the
prolongation of the war and the increased cost (both in treasure and in
lives) of its suppression could not be adjusted and satisfied as ordinary
commercial claims, which continually arise between commercial nations; and
yet the convention treated them simply as such ordinary claims, from which
they differ more widely in the gravity of their character than in the
magnitude of their amount, great even as is that difference. Not a word was
found in the treaty, and not an inference could be drawn from it, to remove
the sense of the unfriendliness of the course of Great Britain in our
struggle for existence, which had so deeply and universally impressed
itself upon the people of this country.

Believing that a convention thus misconceived in its scope and inadequate
in its provisions would not have produced the hearty, cordial settlement of
pending questions, which alone is consistent with the relations which I
desire to have firmly established between the United States and Great
Britain, I regarded the action of the Senate in rejecting the treaty to
have been wisely taken in the interest of peace and as a necessary step in
the direction of a perfect and cordial friendship between the two
countries. A sensitive people, conscious of their power, are more at ease
under a great wrong wholly unatoned than under the restraint of a
settlement which satisfies neither their ideas of justice nor their grave
sense of the grievance they have sustained. The rejection of the treaty was
followed by a state of public feeling on both sides which I thought not
favorable to an immediate attempt at renewed negotiations. I accordingly so
instructed the minister of the United States to Great Britain, and found
that my views in this regard were shared by Her Majesty's ministers. I hope
that the time may soon arrive when the two Governments can approach the
solution of this momentous question with an appreciation of what is due to
the rights, dignity, and honor of each, and with the determination not only
to remove the causes of complaint in the past, but to lay the foundation of
a broad principle of public law which will prevent future differences and
tend to firm and continued peace and friendship.

This is now the only grave question which the United States has with any
foreign nation.

The question of renewing a treaty for reciprocal trade between the United
States and the British Provinces on this continent has not been favorably
considered by the Administration. The advantages of such a treaty would be
wholly in favor of the British producer. Except, possibly, a few engaged in
the trade between the two sections, no citizen of the United States would
be benefited by reciprocity. Our internal taxation would prove a protection
to the British producer almost equal to the protection which our
manufacturers now receive from the tariff. Some arrangement, however, for
the regulation of commercial intercourse between the United States and the
Dominion of Canada may be desirable.

The commission for adjusting the claims of the "Hudsons Bay and Puget Sound
Agricultural Company" upon the United States has terminated its labors. The
award of $650,000 has been made and all rights and titles of the company on
the territory of the United States have been extinguished. Deeds for the
property of the company have been delivered. An appropriation by Congress
to meet this sum is asked.

The commissioners for determining the northwestern land boundary between
the United States and the British possessions under the treaty of 1856 have
completed their labors, and the commission has been dissolved.

In conformity with the recommendation of Congress, a proposition was early
made to the British Government to abolish the mixed courts created under
the treaty of April 7, 1862, for the suppression of the slave trade. The
subject is still under negotiation.

It having come to my knowledge that a corporate company, organized under
British laws, proposed to land upon the shores of the United States and to
operate there a submarine cable, under a concession from His Majesty the
Emperor of the French of an exclusive right for twenty years of telegraphic
communication between the shores of France and the United States, with the
very objectionable feature of subjecting all messages conveyed thereby to
the scrutiny and control of the French Government, I caused the French and
British legations at Washington to be made acquainted with the probable
policy of Congress on this subject, as foreshadowed by the bill which
passed the Senate in March last. This drew from the representatives of the
company an agreement to accept as the basis of their operations the
provisions of that bill, or of such other enactment on the subject as might
be passed during the approaching session of Congress; also, to use their
influence to secure from the French Government a modification of their
concession, so as to permit the landing upon French soil of any cable
belonging to any company incorporated by the authority of the United States
or of any State in the Union, and, on their part, not to oppose the
establishment of any such cable. In consideration of this agreement I
directed the withdrawal of all opposition by the United States authorities
to the landing of the cable and to the working of it until the meeting of
Congress. I regret to say that there has been no modification made in the
company's concession, nor, so far as I can learn, have they attempted to
secure one. Their concession excludes the capital and the citizens of the
United States from competition upon the shores of France. I recommend
legislation to protect the rights of citizens of the United States, as well
as the dignity and sovereignty of the nation, against such an assumption. I
shall also endeavor to secure, by negotiation, an abandonment of the
principle of monopolies in ocean telegraphic cables. Copies of this
correspondence are herewith furnished.

The unsettled political condition of other countries, less fortunate than
our own, sometimes induces their citizens to come to the United States for
the sole purpose of becoming naturalized. Having secured this, they return
to their native country and reside there, without disclosing their change
of allegiance. They accept official positions of trust or honor, which can
only be held by citizens of their native land; they journey under passports
describing them as such citizens; and it is only when civil discord, after
perhaps years of quiet, threatens their persons or their property, or when
their native state drafts them into its military service, that the fact of
their change of allegiance is made known. They reside permanently away from
the United States, they contribute nothing to its revenues, they avoid the
duties of its citizenship, and they only make themselves known by a claim
of protection. I have directed the diplomatic and consular officers of the
United States to scrutinize carefully all such claims for protection. The
citizen of the United States, whether native or adopted, who discharges his
duty to his country, is entitled to its complete protection. While I have a
voice in the direction of affairs I shall not consent to imperil this
sacred right by conferring it upon fictitious or fraudulent claimants.

On the accession of the present Administration it was found that the
minister for North Germany had made propositions for the negotiation of a
convention for the protection of emigrant passengers, to which no response
had been given. It was concluded that to be effectual all the maritime
powers engaged in the trade should join in such a measure. Invitations have
been extended to the cabinets of London, Paris, Florence, Berlin, Brussels,
The Hague, Copenhagen, and Stockholm to empower their representatives at
Washington to simultaneously enter into negotiations and to conclude with
the United States conventions identical in form, making uniform regulations
as to the construction of the parts of vessels to be devoted to the use of
emigrant passengers, as to the quality and quantity of food, as to the
medical treatment of the sick, and as to the rules to be observed during
the voyage, in order to secure ventilation, to promote health, to prevent
intrusion, and to protect the females; and providing for the establishment
of tribunals in the several countries for enforcing such regulations by
summary process.

Your attention is respectfully called to the law regulating the tariff on
Russian hemp, and to the question whether to fix the charges on Russian
hemp higher than they are fixed upon manila is not a violation of our
treaty with Russia placing her products upon the same footing with those of
the most favored nations.

Our manufactures are increasing with wonderful rapidity under the
encouragement which they now receive. With the improvements in machinery
already effected, and still increasing, causing machinery to take the place
of skilled labor to a large extent, our imports of many articles must fall
off largely within a very few years. Fortunately, too, manufactures are not
confined to a few localities, as formerly, and it is to be hoped will
become more and more diffused, making the interest in them equal in all
sections. They give employment and support to hundreds of thousands of
people at home, and retain with us the means which otherwise would be
shipped abroad. The extension of railroads in Europe and the East is
bringing into competition with our agricultural products like products of
other countries. Self-interest, if not self-preservation, therefore
dictates caution against disturbing any industrial interest of the country.
It teaches us also the necessity of looking to other markets for the sale
of our surplus. Our neighbors south of us and China and Japan, should
receive our special attention. It will be the endeavor of the
Administration to cultivate such relations with all these nations as to
entitle us to their confidence and make it their interest, as well as ours,
to establish better commercial relations.

Through the agency of a more enlightened policy than that heretofore
pursued toward China, largely due to the sagacity and efforts of one of our
own distinguished citizens, the world is about to commence largely
increased relations with that populous and hitherto exclusive nation. As
the United States have been the initiators in this new policy, so they
should be the most earnest in showing their good faith in making it a
success. In this connection I advise such legislation as will forever
preclude the enslavement of the Chinese upon our soil under the name of
coolies, and also prevent American vessels from engaging in the
transportation of coolies to any country tolerating the system. I also
recommend that the mission to China be raised to one of the first class.

On my assuming the responsible duties of Chief Magistrate of the United
States it was with the conviction that three things were essential to its
peace, prosperity, and fullest development. First among these is strict
integrity in fulfilling all our obligations; second, to secure protection
to the person and property of the citizen of the United States in each and
every portion of our common country, wherever he may choose to move,
without reference to original nationality, religion, color, or politics,
demanding of him only obedience to the laws and proper respect for the
rights of others; third, union of all the States, with equal rights,
indestructible by any constitutional means.

To secure the first of these, Congress has taken two essential steps:
First, in declaring by joint resolution that the public debt shall be paid,
principal and interest, in coin; and, second, by providing the means for
paying. Providing the means, however, could not secure the object desired
without a proper administration of the laws for the collection of the
revenues and an economical disbursement of them. To this subject the
Administration has most earnestly addressed itself, with results, I hope,
satisfactory to the country. There has been no hesitation in changing
officials in order to secure an efficient execution of the laws, sometimes,
too, when, in a mere party view, undesirable political results were likely
to follow; nor any hesitation in sustaining efficient officials against
remonstrances wholly political.

It may be well to mention here the embarrassment possible to arise from
leaving on the statute books the so-called "tenure-of-office acts," and to
earnestly recommend their total repeal. It could not have been the
intention of the framers of the Constitution, when providing that
appointments made by the President should receive the consent of the
Senate, that the latter should have the power to retain in office persons
placed there by Federal appointment against the will of the President. The
law is inconsistent with a faithful and efficient administration of the
Government. What faith can an Executive put in officials forced upon him,
and those, too, whom he has suspended for reason? How will such officials
be likely to serve an Administration which they know does not trust them?

For the second requisite to our growth and prosperity time and a firm but
humane administration of existing laws (amended from time to time as they
may prove ineffective or prove harsh and unnecessary) are probably all that
are required.

The third can not be attained by special legislation, but must be regarded
as fixed by the Constitution itself and gradually acquiesced in by force of
public opinion.

From the foundation of the Government to the present the management of the
original inhabitants of this continent--the Indians--has been a subject of
embarrassment and expense, and has been attended with continuous robberies,
murders, and wars. From my own experience upon the frontiers and in Indian
countries, I do not hold either legislation or the conduct of the whites
who come most in contact with the Indian blameless for these hostilities.
The past, however, can not be undone, and the question must be met as we
now find it. I have attempted a new policy toward these wards of the nation
(they can not be regarded in any other light than as wards), with fair
results so far as tried, and which I hope will be attended ultimately with
great success. The Society of Friends is well known as having succeeded in
living in peace with the Indians in the early settlement of Pennsylvania,
while their white neighbors of other sects in other sections were
constantly embroiled. They are also known for their opposition to all
strife, violence, and war, and are generally noted for their strict
integrity and fair dealings. These considerations induced me to give the
management of a few reservations of Indians to them and to throw the burden
of the selection of agents upon the society itself. The result has proven
most satisfactory. It will be found more fully set forth in the report of
the Commissioner of Indian Affairs. For superintendents and Indian agents
not on the reservations, officers of the Army were selected. The reasons
for this are numerous. Where Indian agents are sent, there, or near there,
troops must be sent also. The agent and the commander of troops are
independent of each other, and are subject to orders from different
Departments of the Government. The army officer holds a position for life;
the agent, one at the will of the President. The former is personally
interested in living in harmony with the Indian and in establishing a
permanent peace, to the end that some portion of his life may be spent
within the limits of civilized society; the latter has no such personal
interest. Another reason is an economic one; and still another, the hold
which the Government has upon a life officer to secure a faithful discharge
of duties in carrying out a given policy.

The building of railroads, and the access thereby given to all the
agricultural and mineral regions of the country, is rapidly bringing
civilized settlements into contact with all the tribes of Indians. No
matter what ought to be the relations between such settlements and the
aborigines, the fact is they do not harmonize well, and one or the other
has to give way in the end. A system which looks to the extinction of a
race is too horrible for a nation to adopt without entailing upon itself
the wrath of all Christendom and engendering in the citizen a disregard for
human life and the rights of others, dangerous to society. I see no
substitute for such a system, except in placing all the Indians on large
reservations, as rapidly as it can be done, and giving them absolute
protection there. As soon as they are fitted for it they should be induced
to take their lands in severalty and to set up Territorial governments for
their own protection. For full details on this subject I call your special
attention to the reports of the Secretary of the Interior and the
Commissioner of Indian Affairs.

The report of the Secretary of War shows the expenditures of the War
Department for the year ending June 30, 1869, to be $80,644,042, of which
$23,882,310 was disbursed in the payment of debts contracted during the
war, and is not chargeable to current army expenses. His estimate of
$34,531,031 for the expenses of the Army for the next fiscal year is as low
as it is believed can be relied on. The estimates of bureau officers have
been carefully scrutinized, and reduced wherever it has been deemed
practicable. If, however, the condition of the country should be such by
the beginning of the next fiscal year as to admit of a greater
concentration of troops, the appropriation asked for will not be expended.

The appropriations estimated for river and harbor improvements and for
fortifications are submitted separately. Whatever amount Congress may deem
proper to appropriate for these purposes will be expended.

The recommendation of the General of the Army that appropriations be made
for the forts at Boston. Portland, New York, Philadelphia, New Orleans, and
San Francisco, if for no other, is concurred in. I also ask your special
attention to the recommendation of the general commanding the Military
Division of the Pacific for the sale of the seal islands of St. Paul and
St. George, Alaska Territory, and suggest that it either be complied with
or that legislation be had for the protection of the seal fisheries from
which a revenue should be derived.

The report of the Secretary of War contains a synopsis of the reports of
the heads of bureaus, of the commanders of military divisions, and of the
districts of Virginia, Mississippi, and Texas, and the report of the
General of the Army in full. The recommendations therein contained have
been well considered, and are submitted for your action. I, however, call
special attention to the recommendation of the Chief of Ordnance for the
sale of arsenals and lands no longer of use to the Government; also, to the
recommendation of the Secretary of War that the act of 3d March, 1869,
prohibiting promotions and appointments in the staff corps of the Army, be
repealed. The extent of country to be garrisoned and the number of military
posts to be occupied is the same with a reduced Army as with a large one.
The number of staff officers required is more dependent upon the latter
than the former condition.

The report of the Secretary of the Navy accompanying this shows the
condition of the Navy when this Administration came into office and the
changes made since. Strenuous efforts have been made to place as many
vessels "in commission," or render them fit for service if required, as
possible, and to substitute the sail for steam while cruising, thus
materially reducing the expenses of the Navy and adding greatly to its
efficiency. Looking to our future, I recommend a liberal, though not
extravagant, policy toward this branch of the public service.

The report of the Postmaster-General furnishes a clear and comprehensive
exhibit of the operations of the postal service and of the financial
condition of the Post-Office Department. The ordinary postal revenues for
the year ending the 30th of June, 1869, amounted to $18,344,510, and the
expenditures to $23,698,131, showing an excess of expenditures over
receipts of $5,353,620. The excess of expenditures over receipts for the
previous year amounted to $6,437,992. The increase of revenues for 1869
over those of 1868 was $2,051,909, and the increase of expenditures was
$967,538. The increased revenue in 1869 exceeded the increased revenue in
1868 by $996,336, and the increased expenditure in 1869 was $2,527,570 less
than the increased expenditure in 1868, showing by comparison this
gratifying feature of improvement, that while the increase of expenditures
over the increase of receipts in 1868 was $2,439,535, the increase of
receipts over the increase of expenditures in 1869 was $1,084,371.

Your attention is respectfully called to the recommendations made by the
Postmaster-General for authority to change the rate of compensation to the
main trunk railroad lines for their services in carrying the mails; for
having post-route maps executed; for reorganizing and increasing the
efficiency of the special-agency service; for increase of the mail service
on the Pacific, and for establishing mail service, under the flag of the
Union, on the Atlantic; and most especially do I call your attention to his
recommendation for the total abolition of the franking privilege. This is
an abuse from which no one receives a commensurate advantage; it reduces
the receipts for postal service from 25 to 30 per cent and largely
increases the service to be performed. The method by which postage should
be paid upon public matter is set forth fully in the report of the
Postmaster-General.

The report of the Secretary of the Interior shows that the quantity of
public lands disposed of during the year ending the 30th of June, 1869, was
7,666,152 acres, exceeding that of the preceding year by 1,010,409 acres.
Of this amount 2,899,544 acres were sold for cash and 2,737,365 acres
entered under the homestead laws. The remainder was granted to aid in the
construction of works of internal improvement, approved to the States as
swamp land, and located with warrants and scrip. The cash receipts from all
sources were $4,472,886, exceeding those of the preceding year $2,840,140.

During the last fiscal year 23,196 names were added to the pension rolls
and 4,876 dropped therefrom, leaving at its close 187,963. The amount paid
to pensioners, including the compensation of disbursing agents, was
$28,422,884, an increase of $4,411,902 on that of the previous year. The
munificence of Congress has been conspicuously manifested in its
legislation for the soldiers and sailors who suffered in the recent
struggle to maintain "that unity of government which makes us one people."
The additions to the pension rolls of each successive year since the
conclusion of hostilities result in a great degree from the repeated
amendments of the act of the 14th of July, 1862, which extended its
provisions to cases not falling within its original scope. The large outlay
which is thus occasioned is further increased by the more liberal allowance
bestowed since that date upon those who in the line of duty were wholly or
permanently disabled. Public opinion has given an emphatic sanction to
these measures of Congress, and it will be conceded that no part of our
public burden is more cheerfully borne than that which is imposed by this
branch of the service. It necessitates for the next fiscal year, in
addition to the amount justly chargeable to the naval pension fund, an
appropriation of $30,000,000.

During the year ending the 30th of September, 1869, the Patent Office
issued 13,762 patents, and its receipts were $686,389, being $213,926 more
than the expenditures.

Messages and Papers of the Presidents, Ulysses S. Grant, vol. 6, p.3995

I would respectfully call your attention to the recommendation of the
Secretary of the Interior for uniting the duties of supervising the
education of freedmen with the other duties devolving upon the Commissioner
of Education.

If it is the desire of Congress to make the census which must be taken
during the year 1870 more complete and perfect than heretofore, I would
suggest early action upon any plan that may be agreed upon. As Congress at
the last session appointed a committee to take into consideration such
measures as might be deemed proper in reference to the census and report a
plan, I desist from saying more.

I recommend to your favorable consideration the claims of the Agricultural
Bureau for liberal appropriations. In a country so diversified in climate
and soil as ours, and with a population so largely dependent upon
agriculture, the benefits that can be conferred by properly fostering this
Bureau are incalculable.

I desire respectfully to call the attention of Congress to the inadequate
salaries of a number of the most important offices of the Government. In
this message I will not enumerate them, but will specify only the justices
of the Supreme Court. No change has been made in their salaries for fifteen
years. Within that time the labors of the court have largely increased and
the expenses of living have at least doubled. During the same time Congress
has twice found it necessary to increase largely the compensation of its
own members, and the duty which it owes to another department of the
Government deserves, and will undoubtedly receive, its due consideration.

There are many subjects not alluded to in this message which might with
propriety be introduced, but I abstain, believing that your patriotism and
statesmanship will suggest the topics and the legislation most conducive to
the interests of the whole people. On my part I promise a rigid adherence
to the laws and their strict enforcement.

U. S. GRANT

***

State of the Union Address
Ulysses S. Grant
December 5, 1870

To the Senate and House of Representatives:

A year of peace and general prosperity to this nation has passed since the
last assembling of Congress. We have, through a kind Providence, been
blessed with abundant crops, and have been spared from complications and
war with foreign nations. In our midst comparative harmony has been
restored. It is to be regretted, however, that a free exercise of the
elective franchise has by violence and intimidation been denied to citizens
in exceptional cases in several of the States lately in rebellion, and the
verdict of the people has thereby been reversed. The States of Virginia,
Mississippi, and Texas have been restored to representation in our national
councils. Georgia, the only State now without representation, may
confidently be expected to take her place there also at the beginning of
the new year, and then, let us hope, will be completed the work of
reconstruction. With an acquiescence on the part of the whole people in the
national obligation to pay the public debt created as the price of our
Union, the pensions to our disabled soldiers and sailors and their widows
and orphans, and in the changes to the Constitution which have been made
necessary by a great rebellion, there is no reason why we should not
advance in material prosperity and happiness as no other nation ever did
after so protracted and devastating a war.

Soon after the existing war broke out in Europe the protection of the
United States minister in Paris was invoked in favor of North Germans
domiciled in French territory. Instructions were issued to grant the
protection. This has been followed by an extension of American protection
to citizens of Saxony, Hesse and Saxe-Coburg, Gotha, Colombia, Portugal,
Uruguay, the Dominican Republic, Ecuador, Chile, Paraguay, and Venezuela in
Paris. The charge was an onerous one, requiring constant and severe labor,
as well as the exercise of patience, prudence, and good judgment. It has
been performed to the entire satisfaction of this Government, and, as I am
officially informed, equally so to the satisfaction of the Government of
North Germany.

As soon as I learned that a republic had been proclaimed at Paris and that
the people of France had acquiesced in the change, the minister of the
United States was directed by telegraph to recognize it and to tender my
congratulations and those of the people of the United States. The
reestablishment in France of a system of government disconnected with the
dynastic traditions of Europe appeared to be a proper subject for the
felicitations of Americans. Should the present struggle result in attaching
the hearts of the French to our simpler forms of representative government,
it will be a subject of still further satisfaction to our people. While we
make no effort to impose our institutions upon the inhabitants of other
countries, and while we adhere to our traditional neutrality in civil
contests elsewhere, we can not be indifferent to the spread of American
political ideas in a great and highly civilized country like France.

We were asked by the new Government to use our good offices, jointly with
those of European powers, in the interests of peace. Answer was made that
the established policy and the true interests of the United States forbade
them to interfere in European questions jointly with European powers. I
ascertained, informally and unofficially, that the Government of North
Germany was not then disposed to listen to such representations from any
power, and though earnestly wishing to see the blessings of peace restored
to the belligerents, with all of whom the United States are on terms of
friendship, I declined on the part of this Government to take a step which
could only result in injury to our true interests without advancing the
object for which our intervention was invoked. Should the time come when
the action of the United States can hasten the return of peace by a single
hour, that action will be heartily taken. I deemed it prudent, in view of
the number of persons of German and French birth living in the United
States, to issue, soon after official notice of a state of war had been
received from both belligerents, a proclamation defining the duties of the
United States as a neutral and the obligations of persons residing within
their territory to observe their laws and the laws of nations. This
proclamation was followed by others, as circumstances seemed to call for
them. The people, thus acquainted in advance of their duties and
obligations, have assisted in preventing violations of the neutrality of
the United States.

It is not understood that the condition of the insurrection in Cuba has
materially changed since the close of the last session of Congress. In an
early stage of the contest the authorities of Spain inaugurated a system of
arbitrary arrests, of close confinement, and of military trial and
execution of persons suspected of complicity with the insurgents, and of
summary embargo of their properties, and sequestration of their revenues by
executive warrant. Such proceedings, so far as they affected the persons or
property of citizens of the United States, were in violation of the
provisions of the treaty of 1795 between the United States and Spain.

Representations of injuries resulting to several persons claiming to be
citizens of the United States by reason of such violations were made to the
Spanish Government. From April, 1869, to June last the Spanish minister at
Washington had been clothed with a limited power to aid in redressing such
wrongs. That power was found to be withdrawn, "in view," as it was said,
"of the favorable situation in which the island of Cuba" then "was," which,
however, did not lead to a revocation or suspension of the extraordinary
and arbitrary functions exercised by the executive power in Cuba, and we
were obliged to make our complaints at Madrid. In the negotiations thus
opened, and still pending there, the United States only claimed that for
the future the rights secured to their citizens by treaty should be
respected in Cuba, and that as to the past a joint tribunal should be
established in the United States with full jurisdiction over all such
claims. Before such an impartial tribunal each claimant would be required
to prove his case. On the other hand, Spain would be at liberty to traverse
every material fact, and thus complete equity would be done. A case which
at one time threatened seriously to affect the relations between the United
States and Spain has already been disposed of in this way. The claim of the
owners of the Colonel Lloyd Aspinwall for the illegal seizure and detention
of that vessel was referred to arbitration by mutual consent, and has
resulted in an award to the United States, for the owners, of the sum of
$19,702.50 in gold. Another and long-pending claim of like nature, that of
the whaleship Canada, has been disposed of by friendly arbitrament during
the present year. It was referred, by the joint consent of Brazil and the
United States, to the decision of Sir Edward Thornton, Her Britannic
Majesty's minister at Washington, who kindly undertook the laborious task
of examining the voluminous mass of correspondence and testimony submitted
by the two Governments, and awarded to the United States the sum of
$100,740.09 in gold, which has since been paid by the Imperial Government.
These recent examples show that the mode which the United States have
proposed to Spain for adjusting the pending claims is just and feasible,
and that it may be agreed to by either nation without dishonor. It is to be
hoped that this moderate demand may be acceded to by Spain without further
delay. Should the pending negotiations, unfortunately and unexpectedly, be
without result, it will then become my duty to communicate that fact to
Congress and invite its action on the subject.

The long-deferred peace conference between Spain and the allied South
American Republics has been inaugurated in Washington under the auspices of
the United States. Pursuant to the recommendation contained in the
resolution of the House of Representatives of the 17th of December, 1866,
the executive department of the Government offered its friendly offices for
the promotion of peace and harmony between Spain and the allied Republics.
Hesitations and obstacles occurred to the acceptance of the offer.
Ultimately, however, a conference was arranged, and was opened in this city
on the 29th of October last, at which I authorized the Secretary of State
to preside. It was attended by the ministers of Spain, Peru, Chile, and
Ecuador. In consequence of the absence of a representative from Bolivia,
the conference was adjourned until the attendance of a plenipotentiary from
that Republic could be secured or other measures could be adopted toward
compassing its objects.

The allied and other Republics of Spanish origin on this continent may see
in this fact a new proof of our sincere interest in their welfare, of our
desire to see them blessed with good governments, capable of maintaining
order and of preserving their respective territorial integrity, and of our
sincere wish to extend our own commercial and social relations with them.
The time is not probably far distant when, in the natural course of events,
the European political connection with this continent will cease. Our
policy should be shaped, in view of this probability, so as to ally the
commercial interests of the Spanish American States more closely to our
own, and thus give the United States all the preeminence and all the
advantage which Mr. Monroe, Mr. Adams, and Mr. Clay contemplated when they
proposed to join in the congress of Panama.

During the last session of Congress a treaty for the annexation of the
Republic of San Domingo to the United States failed to receive the
requisite two-thirds vote of the Senate. I was thoroughly convinced then
that the best interests of this country, commercially and materially,
demanded its ratification. Time has only confirmed me in this view. I now
firmly believe that the moment it is known that the United States have
entirely abandoned the project of accepting as a part of its territory the
island of San Domingo a free port will be negotiated for by European
nations in the Bay of Samana. A large commercial city will spring up, to
which we will be tributary without receiving corresponding benefits, and
then will be seen the folly of our rejecting so great a prize. The
Government of San Domingo has voluntarily sought this annexation. It is a
weak power, numbering probably less than 120,000 souls, and yet possessing
one of the richest territories under the sun, capable of supporting a
population of 10,000,000 people in luxury. The people of San Domingo are
not capable of maintaining themselves in their present condition, and must
look for outside support. They yearn for the protection of our free
institutions and laws, our progress and civilization. Shall we refuse
them?

The acquisition of San Domingo is desirable because of its geographical
position. It commands the entrance to the Caribbean Sea and the Isthmus
transit of commerce. It possesses the richest soil, best and most capacious
harbors, most salubrious climate, and the most valuable products of the
forests, mine, and soil of any of the West India Islands. Its possession by
us will in a few years build up a coastwise commerce of immense magnitude,
which will go far toward restoring to us our lost merchant marine. It will
give to us those articles which we consume so largely and do not produce,
thus equalizing our exports and imports. In case of foreign war it will
give us command of all the islands referred to, and thus prevent an enemy
from ever again possessing himself of rendezvous upon our very coast. At
present our coast trade between the States bordering on the Atlantic and
those bordering on the Gulf of Mexico is cut into by the Bahamas and the
Antilies. Twice we must, as it were, pass through foreign countries to get
by sea from Georgia to the west coast of Florida.

San Domingo, with a stable government, under which her immense resources
can be developed, will give remunerative wages to tens of thousands of
laborers not now upon the island. This labor will take advantage of every
available means of transportation to abandon the adjacent islands and seek
the blessings of freedom and its sequence--each inhabitant receiving the
reward of his own labor. Porto Rico and Cuba will have to abolish slavery,
as a measure of self-preservation, to retain their laborers.

San Domingo will become a large consumer of the products of Northern farms
and manufactories. The cheap rate at which her citizens can be furnished
with food, tools, and machinery will make it necessary that contiguous
islands should have the same advantages in order to compete in the
production of sugar, coffee, tobacco, tropical fruits, etc. This will open
to us a still wider market for our products. The production of our own
supply of these articles will cut off more than one hundred millions of our
annual imports, besides largely increasing our exports. With such a picture
it is easy to see how our large debt abroad is ultimately to be
extinguished. With a balance of trade against us (including interest on
bonds held by foreigners and money spent by our citizens traveling in
foreign lands) equal to the entire yield of the precious metals in this
country, it is not so easy to see how this result is to be otherwise
accomplished.

The acquisition of San Domingo is an adherence to the "Monroe doctrine;" it
is a measure of national protection; it is asserting our just claim to a
controlling influence over the great commercial traffic soon to flow from
west to east by way of the Isthmus of Darien; it is to build up our
merchant marine; it is to furnish new markets for the products of our
farms, shops, and manufactories; it is to make slavery insupportable in
Cuba and Porto Rico at once, and ultimately so in Brazil; it is to settle
the unhappy condition of Cuba and end an exterminating conflict; it is to
provide honest means of paying our honest debts without overtaxing the
people; it is to furnish our citizens with the necessaries of everyday life
at cheaper rates than ever before; and it is, in fine, a rapid stride
toward that greatness which the intelligence, industry, and enterprise of
the citizens of the United States entitle this country to assume among
nations.

In view of the importance of this question, I earnestly urge upon Congress
early action expressive of its views as to the best means of acquiring San
Domingo. My suggestion is that by joint resolution of the two Houses of
Congress the Executive be authorized to appoint a commission to negotiate a
treaty with the authorities of San Domingo for the acquisition of that
island, and that an appropriation be made to defray the expenses of such a
commission. The question may then be determined, either by the action of
the Senate upon the treaty or the joint action of the two Houses of
Congress upon a resolution of annexation, as in the case of the acquisition
of Texas. So convinced am I of the advantages to flow from the acquisition
of San Domingo, and of the great disadvantages--I might almost say
calamities--to flow from nonacquisition, that I believe the subject has
only to be investigated to be approved.

It is to be regretted that our representations in regard to the injurious
effects, especially upon the revenue of the United States, of the policy of
the Mexican Government in exempting from impost duties a large tract of its
territory on our borders have not only been fruitless, but that it is even
proposed in that country to extend the limits within which the privilege
adverted to has hitherto been enjoyed. The expediency of taking into your
serious consideration proper measures for countervailing the policy
referred to will, it is presumed, engage your earnest attention.

It is the obvious interest, especially of neighboring nations, to provide
against impunity to those who may have committed high crimes within their
borders and who may have sought refuge abroad. For this purpose extradition
treaties have been concluded with several of the Central American
Republics, and others are in progress.

The sense of Congress is desired, as early as may be convenient, upon the
proceedings of the commission on claims against Venezuela, as communicated
in my messages of March 16, 1869, March 1, 1870, and March 31, 1870. It has
not been deemed advisable to distribute any of the money which has been
received from that Government until Congress shall have acted on the
subject.

The massacres of French and Russian residents at Tien-Tsin, under
circumstances of great barbarity, was supposed by some to have been
premeditated, and to indicate a purpose among the populace to exterminate
foreigners in the Chinese Empire. The evidence fails to establish such a
supposition, but shows a complicity between the local authorities and the
mob. The Government at Peking, however, seems to have been disposed to
fulfill its treaty obligations so far as it was able to do so.
Unfortunately, the news of the war between the German States and France
reached China soon after the massacre. It would appear that the popular
mind became possessed with the idea that this contest, extending to Chinese
waters, would neutralize the Christian influence and power, and that the
time was coming when the superstitious masses might expel all foreigners
and restore mandarin influence. Anticipating trouble from this cause, I
invited France and North Germany to make an authorized suspension of
hostilities in the East (where they were temporarily suspended by act of
the commanders), and to act together for the future protection in China of
the lives and properties of Americans and Europeans.

Since the adjournment of Congress the ratifications of the treaty with
Great Britain for abolishing the mixed courts for the suppression of the
slave trade have been exchanged. It is believed that the slave trade is now
confined to the eastern coast of Africa, whence the slaves are taken to
Arabian markets.

The ratifications of the naturalization convention between Great Britain
and the United States have also been exchanged during the recess, and thus
a long-standing dispute between the two Governments has been settled in
accordance with the principles always contended for by the United States.

In April last, while engaged in locating a military reservation near
Pembina, a corps of engineers discovered that the commonly received
boundary line between the United States and the British possessions at that
place is about 4,700 feet south of the true position of the forty-ninth
parallel, and that the line, when run on what is now supposed to be the
true position of that parallel, would leave the fort of the Hudsons Bay
Company at Pembina within the territory of the United States. This
information being communicated to the British Government, I was requested
to consent, and did consent, that the British occupation of the fort of the
Hudsons Bay Company should continue for the present. I deem it important,
however, that this part of the boundary line should be definitely fixed by
a joint commission of the two Governments, and I submit herewith estimates
of the expense of such a commission on the part of the United States and
recommend that an appropriation be made for that purpose. The land boundary
has already been fixed and marked from the summit of the Rocky Mountains to
the Georgian Bay. It should now be in like manner marked from the Lake of
the Woods to the summit of the Rocky Mountains.

I regret to say that no conclusion has been reached for the adjustment of
the claims against Great Britain growing out of the course adopted by that
Government during the rebellion. The cabinet of London, so far as its views
have been expressed, does not appear to be willing to concede that Her
Majesty's Government was guilty of any negligence, or did or permitted any
act during the war by which the United States has just cause of complaint.
Our firm and unalterable convictions are directly the reverse. I therefore
recommend to Congress to authorize the appointment of a commission to take
proof of the amount and the ownership of these several claims, on notice to
the representative of Her Majesty at Washington, and that authority be
given for the settlement of these claims by the United States, so that the
Government shall have the ownership of the private claims, as well as the
responsible control of all the demands against Great Britain. It can not be
necessary to add that whenever Her Majesty's Government shall entertain a
desire for a full and friendly adjustment of these claims the United States
will enter upon their consideration with an earnest desire for a conclusion
consistent with the honor and dignity of both nations.

The course pursued by the Canadian authorities toward the fishermen of the
United States during the past season has not been marked by a friendly
feeling. By the first article of the convention of 1818 between Great
Britain and the United States it was agreed that the inhabitants of the
United States should have forever, in common with British subjects, the
right of taking fish in certain waters therein defined. In the waters not
included in the limits named in the convention (within 3 miles of parts of
the British coast) it has been the custom for many years to give to
intruding fishermen of the United States a reasonable warning of their
violation of the technical rights of Great Britain. The Imperial Government
is understood to have delegated the whole or a share of its jurisdiction or
control of these inshore fishing grounds to the colonial authority known as
the Dominion of Canada, and this semi-independent but irresponsible agent
has exercised its delegated powers in an unfriendly way. Vessels have been
seized without notice or warning, in violation of the custom previously
prevailing, and have been taken into the colonial ports, their voyages
broken up, and the vessels condemned. There is reason to believe that this
unfriendly and vexatious treatment was designed to bear harshly upon the
hardy fishermen of the United States, with a view to political effect upon
this Government. The statutes of the Dominion of Canada assume a still
broader and more untenable jurisdiction over the vessels of the United
States. They authorize officers or persons to bring vessels hovering within
3 marine miles of any of the coasts, bays, creeks, or harbors of Canada
into port, to search the cargo, to examine the master on oath touching the
cargo and voyage, and to inflict upon him a heavy pecuniary penalty if true
answers are not given; and if such a vessel is found "preparing to fish"
within 3 marine miles of any of such coasts, bays, creeks, or harbors
without a license, or after the expiration of the period named in the last
license granted to it, they provide that the vessel, with her tackle, etc.,
shall be forfeited. It is not known that any condemnations have been made
under this statute. Should the authorities of Canada attempt to enforce it,
it will become my duty to take such steps as may be necessary to protect
the rights of the citizens of the United States.

It has been claimed by Her Majesty's officers that the fishing vessels of
the United States have no right to enter the open ports of the British
possessions in North America, except for the purposes of shelter and
repairing damages, of purchasing wood and obtaining water; that they have
no right to enter at the British custom-houses or to trade there except in
the purchase of wood and water, and that they must depart within
twenty-four hours after notice to leave. It is not known that any seizure
of a fishing vessel carrying the flag of the United States has been made
under this claim. So far as the claim is founded on an alleged construction
of he convention of 1818, it can not be acquiesced in by the United States.
It is hoped that it will not be insisted on by Her Majesty's Government.

During the conferences which preceded the negotiation of the convention of
1818 the British commissioners proposed to expressly exclude the fishermen
of the United States from "the privilege of carrying on trade with any of
His Britannic Majesty's subjects residing within the limits assigned for
their use;" and also that it should not be "lawful for the vessels of the
United States engaged in said fishery to have on board any goods, wares, or
merchandise whatever, except such as may be necessary for the prosecution
of their voyages to and from the said fishing grounds: and any vessel of
the United States which shall contravene this regulation may be seized,
condemned, and confiscated, with her cargo."

This proposition, which is identical with the construction now put upon the
language of the convention, was emphatically rejected by the American
commissioners, and thereupon was abandoned by the British
plenipotentiaries, and Article I, as it stands in the convention, was
substituted.

If, however, it be said that this claim is founded on provincial or
colonial statutes, and not upon the convention, this Government can not but
regard them as unfriendly, and in contravention of the spirit, if not of
the letter, of the treaty, for the faithful execution of which the Imperial
Government is alone responsible.

Anticipating that an attempt may possibly be made by the Canadian
authorities in the coming season to repeat their unneighborly acts toward
our fishermen, I recommend you to confer upon the Executive the power to
suspend by proclamation the operation of the laws authorizing the transit
of goods, wares, and merchandise in bond across the territory of the United
States to Canada, and, further, should such an extreme measure become
necessary, to suspend the operation of any laws whereby the vessels of the
Dominion of Canada are permitted to enter the waters of the United States.

A like unfriendly disposition has been manifested on the part of Canada in
the maintenance of a claim of right to exclude the citizens of the United
States from the navigation of the St. Lawrence. This river constitutes a
natural outlet to the ocean for eight States, with an aggregate population
of about 17,600,000 inhabitants, and with an aggregate tonnage of 661,367
tons upon the waters which discharge into it. The foreign commerce of our
ports on these waters is open to British competition, and the major part of
it is done in British bottoms.

If the American seamen be excluded from this natural avenue to the ocean,
the monopoly of the direct commerce of the lake ports with the Atlantic
would be in foreign hands, their vessels on transatlantic voyages having an
access to our lake ports which would be denied to American vessels on
similar voyages. To state such a proposition is to refute its justice.

During the Administration of Mr. John Quincy Adams Mr. Clay unanswerably
demonstrated the natural right of the citizens of the United States to the
navigation of this river, claiming that the act of the congress of Vienna
in opening the Rhine and other rivers to all nations showed the judgment of
European jurists and statesmen that the inhabitants of a country through
which a navigable river passes have a natural right to enjoy the navigation
of that river to and into the sea, even though passing through the
territories of another power. This right does not exclude the coequal right
of the sovereign possessing the territory through which the river debouches
into the sea to make such regulations relative to the police of the
navigation as may be reasonably necessary; but those regulations should be
framed in a liberal spirit of comity, and should not impose needless
burdens upon the commerce which has the right of transit. It has been found
in practice more advantageous to arrange these regulations by mutual
agreement. The United States are ready to make any reasonable arrangement
as to the police of the St. Lawrence which may be suggested by Great
Britain.

If the claim made by Mr. Clay was just when the population of States
bordering on the shores of the Lakes was only 3,400,000, it now derives
greater force and equity from the increased population, wealth, production,
and tonnage of the States on the Canadian frontier. Since Mr. Clay advanced
his argument in behalf of our right the principle for which he contended
has been frequently, and by various nations, recognized by law or by
treaty, and has been extended to several other great rivers. By the treaty
concluded at Mayence in 1831 the Rhine was declared free from the point
where it is first navigable into the sea. By the convention between Spain
and Portugal concluded in 1835 the navigation of the Douro throughout its
whole extent was made free for the subjects of both Crowns. In 1853 the
Argentine Confederation by treaty threw open the free navigation of the
Parana and the Uruguay to the merchant vessels of all nations. In 1856 the
Crimean War was closed by a treaty which provided for the free navigation
of the Danube. In 1858 Bolivia by treaty declared that it regarded the
rivers Amazon and La Plata, in accordance with fixed principles of national
law, as highways or channels opened by nature for the commerce of all
nations. In 1859 the Paraguay was made free by treaty, and in December,
1866, the Emperor of Brazil by imperial decree declared the Amazon to be
open to the frontier of Brazil to the merchant ships of all nations. The
greatest living British authority on this subject, while asserting the
abstract right of the British claim, says: It seems difficult to deny that
Great Britain may ground her refusal upon strict law, but it is equally
difficult to deny, first, that in so doing she exercises harshly an extreme
and hard law; secondly, that her conduct with respect to the navigation of
the St. Lawrence is in glaring and discreditable inconsistency with her
conduct with respect to the navigation of the Mississippi. On the ground
that she possessed a small domain in which the Mississippi took its rise,
she insisted on the right to navigate the entire volume of its waters. On
the ground that she possesses both banks of the St. Lawrence, where it
disembogues itself into the sea, she denies to the United States the right
of navigation, though about one-half of the waters of Lakes Ontario. Erie,
Huron, and Superior, and the whole of Lake Michigan, through which the
river flows, are the property of the United States. The whole nation is
interested in securing cheap transportation from the agricultural States of
the West to the Atlantic Seaboard. To the citizens of those States it
secures a greater return for their labor; to the inhabitants of the
seaboard it affords cheaper food; to the nation, an increase in the annual
surplus of wealth. It is hoped that the Government of Great Britain will
see the justice of abandoning the narrow and inconsistent claim to which
her Canadian Provinces have urged her adherence.

Our depressed commerce is a subject to which I called your special
attention at the last session, and suggested that we will in the future
have to look more to the countries south of us, and to China and Japan, for
its revival. Our representatives to all these Governments have exerted
their influence to encourage trade between the United States and the
countries to which they are accredited. But the fact exists that the
carrying is done almost entirely in foreign bottoms, and while this state
of affairs exists we can not control our due share of the commerce of the
world; that between the Pacific States and China and Japan is about all the
carrying trade now conducted in American vessels. I would recommend a
liberal policy toward that line of American steamers--one that will insure
its success, and even increased usefulness.

The cost of building iron vessels, the only ones that can compete with
foreign ships in the carrying trade, is so much greater in the United
States than in foreign countries that without some assistance from the
Government they can not be successfully built here. There will be several
propositions laid before Congress in the course of the present session
looking to a remedy for this evil. Even if it should be at some cost to the
National Treasury, I hope such encouragement will be given as will secure
American shipping on the high seas and American shipbuilding at home.

The condition of the archives at the Department of State calls for the
early action of Congress. The building now rented by that Department is a
frail structure, at an inconvenient distance from the Executive Mansion and
from the other Departments, is ill adapted to the purpose for which it is
used, has not capacity to accommodate the archives, and is not fireproof.
Its remote situation, its slender construction, and the absence of a supply
of water in the neighborhood leave but little hope of safety for either the
building or its contents in case of the accident of a fire. Its destruction
would involve the loss of the rolls containing the original acts and
resolutions of Congress, of the historic records of the Revolution and of
the Confederation, of the whole series of diplomatic and consular archives
since the adoption of the Constitution, and of the many other valuable
records and papers left with that Department when it was the principal
depository of the governmental archives. I recommend an appropriation for
the construction of a building for the Department of State.

I recommend to your consideration the propriety of transferring to the
Department of the Interior, to which they seem more appropriately to
belong, all powers and duties in relation to the Territories with which the
Department of State is now charged by law or usage; and from the Interior
Department to the War Department the Pension Bureau, so far as it regulates
the payment of soldiers' pensions. I would further recommend that the
payment of naval pensions be transferred to one of the bureaus of the Navy
Department.

The estimates for the expenses of the Government for the next fiscal year
are $18,244,346.01 less than for the current one, but exceed the
appropriations for the present year for the same items $8,972,127.56. In
this estimate, however, is included $22,338,278.37 for public works
heretofore begun under Congressional provision, and of which only so much
is asked as Congress may choose to give. The appropriation for the same
works for the present fiscal year was $11,984,518.08.

The average value of gold, as compared with national currency, for the
whole of the year 1869 was about 134, and for eleven months of 1870 the
same relative value has been about 115. The approach to a specie basis is
very gratifying, but the fact can not be denied that the instability of the
value of our currency is prejudicial to our prosperity, and tends to keep
up prices, to the detriment of trade. The evils of a depreciated and
fluctuating currency are so great that now, when the premium on gold has
fallen so much, it would seem that the time has arrived when by wise and
prudent legislation Congress should look to a policy which would place our
currency at par with gold at no distant day.

The tax collected from the people has been reduced more than $80,000,000
per annum. By steadiness in our present course there is no reason why in a
few short years the national tax gatherer may not disappear from the door
of the citizen almost entirely. With the revenue stamp dispensed by
postmasters in every community, a tax upon liquors of all sorts and tobacco
in all its forms, and by a wise adjustment of the tariff, which will put a
duty only upon those articles which we could dispense with, known as
luxuries, and on those which we use more of than we produce, revenue enough
may be raised after a few years of peace and consequent reduction of
indebtedness to fulfill all our obligations. A further reduction of
expenses, in addition to a reduction of interest account, may be relied on
to make this practicable. Revenue reform, if it means this, has my hearty
support. If it implies a collection of all the revenue for the support of
the Government, for the payment of principal and interest of the public
debt, pensions, etc., by directly taxing the people, then I am against
revenue reform, and confidently believe the people are with me. If it means
failure to provide the necessary means to defray all the expenses of
Government, and thereby repudiation of the public debt and pensions, then I
am still more opposed to such kind of revenue reform. Revenue reform has
not been defined by any of its advocates to my knowledge, but seems to be
accepted as something which is to supply every man's wants without any cost
or effort on his part.

A true revenue reform can not be made in a day, but must be the work of
national legislation and of time. As soon as the revenue can be dispensed
with, all duty should be removed from coffee, tea and other articles of
universal use not produced by ourselves. The necessities of the country
compel us to collect revenue from our imports. An army of assessors and
collectors is not a pleasant sight to the citizen, but that of a tariff for
revenue is necessary. Such a tariff, so far as it acts as an encouragement
to home production, affords employment to labor at living wages, in
contrast to the pauper labor of the Old World, and also in the development
of home resources.

Under the act of Congress of the 15th day of July, 1870, the Army has
gradually been reduced, so that on the 1st day of January, 1871, the number
of commissioned officers and men will not exceed the number contemplated by
that law.

The War Department building is an old structure, not fireproof, and
entirely inadequate in dimensions to our present wants. Many thousands of
dollars are now paid annually for rent of private buildings to accommodate
the various bureaus of the Department. I recommend an appropriation for a
new War Department building, suited to the present and growing wants of the
nation.

The report of the Secretary of War shows a very satisfactory reduction in
the expenses of the Army for the last fiscal year. For details you are
referred to his accompanying report.

The expenses of the Navy for the whole of the last year--i.e., from
December 1, 1869, the date of the last report--are less than $19,000,000,
or about $1,000,000 less than they were the previous year. The expenses
since the commencement of this fiscal year--i.e., since July 1--show for
the five months a decrease of over $2,400,000 from those of the
corresponding months last year. The estimates for the current year were
$28,205,671.37. Those for next year are $20,683,317, with $955,100
additional for necessary permanent improvements. These estimates are made
closely for the mere maintenance of the naval establishment as now is,
without much in the nature of permanent improvement. The appropriations
made for the last and current years were evidently intended by Congress,
and are sufficient only, to keep the Navy on its present footing by the
repairing and refitting of our old ships.

This policy must, of course, gradually but surely destroy the Navy, and it
is in itself far from economical, as each year that it is pursued the
necessity for mere repairs in ships and navy-yards becomes more imperative
and more costly, and our current expenses are annually increased for the
mere repair of ships, many of which must soon become unsafe and useless. I
hope during the present session of Congress to be able to submit to it a
plan by which naval vessels can be built and repairs made with great saving
upon the present cost.

It can hardly be wise statesmanship in a Government which represents a
country with over 5,000 miles of coast line on both oceans, exclusive of
Alaska, and containing 40,000,000 progressive people, with relations of
every nature with almost every foreign country, to rest with such
inadequate means of enforcing any foreign policy, either of protection or
redress. Separated by the ocean from the nations of the Eastern Continent,
our Navy is our only means of direct protection to our citizens abroad or
for the enforcement of any foreign policy.

The accompanying report of the Postmaster-General shows a most satisfactory
working of that Department. With the adoption of the recommendations
contained therein, particularly those relating to a reform in the franking
privilege and the adoption of the "correspondence cards," a self-sustaining
postal system may speedily be looked for, and at no distant day a further
reduction of the rate of postage be attained.

I recommend authorization by Congress to the Postmaster-General and
Attorney-General to issue all commissions to officials appointed through
their respective Departments. At present these commissions, where
appointments are Presidential, are issued by the State Department. The law
in all the Departments of Government, except those of the Post-Office and
of Justice, authorizes each to issue its own commissions.

Always favoring practical reforms, I respectfully call your attention to
one abuse of long standing which I would like to see remedied by this
Congress. It is a reform in the civil service of the country. I would have
it go beyond the mere fixing of the tenure of office of clerks and
employees who do not require "the advice and consent of the Senate" to make
their appointments complete. I would have it govern, not the tenure, but
the manner of making all appointments. There is no duty which so much
embarrasses the Executive and heads of Departments as that of appointments,
nor is there any such arduous and thankless labor imposed on Senators and
Representatives as that of finding places for constituents. The present
system does not secure the best men, and often not even fit men, for public
place. The elevation and purification of the civil service of the
Government will be hailed with approval by the whole people of the United
States.

Reform in the management of Indian affairs has received the special
attention of the Administration from its inauguration to the present day.
The experiment of making it a missionary work was tried with a few agencies
given to the denomination of Friends, and has been found to work most
advantageously. All agencies and superintendencies not so disposed of were
given to officers of the Army. The act of Congress reducing the Army
renders army officers ineligible for civil positions. Indian agencies being
civil offices, I determined to give all the agencies to such religious
denominations as had heretofore established missionaries among the Indians,
and perhaps to some other denominations who would undertake the work on the
same terms--i.e., as a missionary work. The societies selected are allowed
to name their own agents, subject to the approval of the Executive, and are
expected to watch over them and aid them as missionaries, to Christianize
and civilize the Indian, and to train him in the arts of peace. The
Government watches over the official acts of these agents, and requires of
them as strict an accountability as if they were appointed in any other
manner. I entertain the confident hope that the policy now pursued will in
a few years bring all the Indians upon reservations, where they will live
in houses, and have schoolhouses and churches, and will be pursuing
peaceful and self-sustaining avocations, and where they may be visited by
the law-abiding white man with the same impunity that he now visits the
civilized white settlements. I call your special attention to the report of
the Commissioner of Indian Affairs for full information on this subject.

During the last fiscal year 8,095,413 acres of public land were disposed
of. Of this quantity 3,698,910.05 acres were taken under the homestead law
and 2,159,515.81 acres sold for cash. The remainder was located with
military warrants, college or Indian scrip, or applied in satisfaction of
grants to railroads or for other public uses. The entries under the
homestead law during the last year covered 961,545 acres more than those
during the preceding year. Surveys have been vigorously prosecuted to the
full extent of the means applicable to the purpose. The quantity of land in
market will amply supply the present demand. The claim of the settler under
the homestead or the preemption laws is not, however, limited to lands
subject to sale at private entry. Any unappropriated surveyed public land
may, to a limited amount, be acquired under the former laws if the party
entitled to enter under them will comply with the requirements they
prescribe in regard to the residence and cultivation. The actual settler's
preference right of purchase is even broader, and extends to lands which
were unsurveyed at the time of his settlement. His right was formerly
confined within much narrower limits, and at one period of our history was
conferred only by special statutes. They were enacted from time to time to
legalize what was then regarded as an unauthorized intrusion upon the
national domain. The opinion that the public lands should be regarded
chiefly as a source of revenue is no longer maintained. The rapid
settlement and successful cultivation of them are now justly considered of
more importance to our well-being than is the fund which the sale of them
would produce. The remarkable growth and prosperity of our new States and
Territories attest the wisdom of the legislation which invites the tiller
of the soil to secure a permanent home on terms within the reach of all.
The pioneer who incurs the dangers and privations of a frontier life, and
thus aids in laying the foundation of new commonwealths, renders a signal
service to his country, and is entitled to its special favor and
protection. These laws secure that object and largely promote the general
welfare. They should therefore be cherished as a permanent feature of our
land system.

Good faith requires us to give full effect to existing grants. The
time-honored and beneficent policy of setting apart certain sections of
public land for educational purposes in the new States should be continued.
When ample provision shall have been made for these objects, I submit as a
question worthy of serious consideration whether the residue of our
national domain should not be wholly disposed of under the provisions the
homestead and preemption laws.

In addition to the swamp and overflowed lands granted to the States in
which they are situated, the lands taken under the agricultural-college
acts and for internal-improvement purposes under the act of September,
1841, and the acts supplemental thereto, there had been conveyed up to the
close of the last fiscal year, by patent or other equivalent title, to
States and corporations 27,836,257.63 acres for railways, canals, and wagon
roads. It is estimated that an additional quantity of 174,735,523 acres is
still due under grants for like uses. The policy of thus aiding the States
in building works of internal improvement was inaugurated more than forty
years since in the grants to Indiana and Illinois, to aid those States in
opening canals to connect the waters of the Wabash with those of Lake Erie
and the waters of the Illinois with those of Lake Michigan. It was
followed, with some modifications, in the grant to Illinois of alternate
sections of public land within certain limits of the Illinois Central
Railway. Fourteen States and sundry corporations have received similar
subsidies in connection with railways completed or in process of
construction. As the reserved sections are rated at the double minimum, the
sale of them at the enhanced price has thus in many instances indemnified
the Treasury for the granted lands. The construction of some of these
thoroughfares has undoubtedly given a vigorous impulse to the development
of our resources and the settlement of the more distant portions of the
country. It may, however, be well insisted that much of our legislation in
this regard has been characterized by indiscriminate and profuse
liberality. The United States should not loan their credit in aid of any
enterprise undertaken by States or corporations, nor grant lands in any
instance, unless the projected work is of acknowledged national importance.
I am strongly inclined to the opinion that it is inexpedient and
unnecessary to bestow subsidies of either description; but should Congress
determine otherwise I earnestly recommend that the right of settlers and of
the public be more effectually secured and protected by appropriate
legislation.

During the year ending September 30, 1870, there were filed in the Patent
Office 19,411 applications for patents, 3,374 caveats, and 160 applications
for the extension of patents. Thirteen thousand six hundred and twenty-two
patents, including reissues and designs, were issued, 1,010 extended, and
1,089 allowed, but not issued by reason of the nonpayment of the final
fees. The receipts of the office during the year were $136,304.29 in excess
of its expenditures.

The work of the Census Bureau has been energetically prosecuted. The
preliminary report, containing much information of special value and
interest, will be ready for delivery during the present session. The
remaining volumes will be completed with all the dispatch consistent with
perfect accuracy in arranging and classifying the returns. We shall thus at
no distant day be furnished with an authentic record of our condition and
resources. It will, I doubt not, attest the growing prosperity of the
country, although during the decade which has just closed it was so
severely tried by the great war waged to maintain its integrity and to
secure and perpetuate our free institutions.

During the last fiscal year the sum paid to pensioners, including the cost
of disbursement, was $27,780,811.11, and 1,758 bounty-land warrants were
issued. At its close 198,686 names were on the pension rolls.

The labors of the Pension Office have been directed to the severe scrutiny
of the evidence submitted in favor of new claims and to the discovery of
fictitious claims which have been heretofore allowed. The appropriation for
the employment of special agents for the investigation of frauds has been
judiciously used, and the results obtained have been of unquestionable
benefit to the service.

The subjects of education and agriculture are of great interest to the
success of our republican institutions, happiness, and grandeur as a
nation. In the interest of one a bureau has been established in the
Interior Department--the Bureau of Education; and in the interest of the
other, a separate Department, that of Agriculture. I believe great general
good is to flow from the operations of both these Bureaus if properly
fostered. I can not commend to your careful consideration too highly the
reports of the Commissioners of Education and of Agriculture, nor urge too
strongly such liberal legislation as to secure their efficiency.

In conclusion I would sum up the policy of the Administration to be a
thorough enforcement of every law; a faithful collection of every tax
provided for; economy in the disbursement of the same; a prompt payment of
every debt of the nation; a reduction of taxes as rapidly as the
requirements of the country will admit; reductions of taxation and tariff,
to be so arranged as to afford the greatest relief to the greatest number;
honest and fair dealings with all other peoples, to the end that war, with
all its blighting consequences, may be avoided, but without surrendering
any right or obligation due to us; a reform in the treatment of Indians and
in the whole civil service of the country; and, finally, in securing a
pure, untrammeled ballot, where every man entitled to cast a vote may do
so, just once at each election, without fear of molestation or proscription
on account of his political faith, nativity, of color.

U. S. GRANT

***

State of the Union Address
Ulysses S. Grant
December 4, 1871

To the Senate and House of Representatives:

In addressing my third annual message to the law-making branch of the
Government it is gratifying to be able to state that during the past year
success has generally attended the effort to execute all laws found upon
the statute books. The policy has been not to inquire into the wisdom of
laws already enacted, but to learn their spirit and intent and to enforce
them accordingly.

The past year has, under a wise Providence, been one of general prosperity
to the nation. It has, however, been attended with more than usual
chastisements in the loss of life and property by storm and fire. These
disasters have served to call forth the best elements of human nature in
our country and to develop a friendship for us on the part of foreign
nations which goes far toward alleviating the distresses occasioned by
these calamities. The benevolent, who have so generously shared their means
with the victims of these misfortunes, will reap their reward in the
consciousness of having performed a noble act and in receiving the grateful
thanks of men, women, and children whose sufferings they have relieved.

The relations of the United States with foreign powers continue to be
friendly. The year has been an eventful one in witnessing two great
nations, speaking one language and having one lineage, settling by peaceful
arbitration disputes of long standing and liable at any time to bring those
nations into bloody and costly conflict. An example has thus been set
which, if successful in its final issue, may be followed by other civilized
nations, and finally be the means of returning to productive industry
millions of men now maintained to settle the disputes of nations by the
bayonet and the broadside.

I transmit herewith a copy of the treaty alluded to, which has been
concluded since the adjournment of Congress with Her Britannic Majesty, and
a copy of the protocols of the conferences of the commissioners by whom it
was negotiated. This treaty provides methods for adjusting the questions
pending between the two nations.

Various questions are to be adjusted by arbitration. I recommend Congress
at an early day to make the necessary provision for the tribunal at Geneva
and for the several commissioners on the part of the United States called
for by the treaty.

His Majesty the King of Italy, the President of the Swiss Confederation,
and His Majesty the Emperor of Brazil have each consented, on the joint
request of the two powers, to name an arbiter for the tribunal at Geneva. I
have caused my thanks to be suitably expressed for the readiness with which
the joint request has been complied with, by the appointment of gentlemen
of eminence and learning to these important positions.

His Majesty the Emperor of Germany has been pleased to comply with the
joint request of the two Governments, and has consented to act as the
arbitrator of the disputed water boundary between the United States and
Great Britain.

The contracting parties in the treaty have undertaken to regard as between
themselves certain principles of public law, for which the United States
have contended from the commencement of their history. They have also
agreed to bring those principles to the knowledge of the other maritime
powers and to invite them to accede to them. Negotiations are going on as
to the form of the note by which the invitation is to be extended to the
other powers.

I recommend the legislation necessary on the part of the United States to
bring into operation the articles of the treaty relating to the fisheries
and to the other matters touching the relations of the United States toward
the British North American possessions, to become operative so soon as the
proper legislation shall be had on the part of Great Britain and its
possessions. It is much to be desired that this legislation may become
operative before the fishermen of the United States begin to make their
arrangements for the coming season.

I have addressed a communication, of which a copy is transmitted herewith,
to the governors of New York, Pennsylvania, Ohio, Indiana, Michigan,
Illinois, and Wisconsin, urging upon the governments of those States,
respectively, the necessary action on their part to carry into effect the
object of the article of the treaty which contemplates the use of the
canals, on either side, connected with the navigation of the lakes and
rivers forming the boundary, on terms of equality, by the inhabitants of
both countries. It is hoped that the importance of the object and the
benefits to flow therefrom will secure the speedy approval and legislative
sanction of the States concerned.

I renew the recommendation for an appropriation for determining the true
position of the forty-ninth parallel of latitude where it forms the
boundary between the United States and the British North American
possessions, between the Lake of the Woods and the summit of the Rocky
Mountains. The early action of Congress on this recommendation would put it
in the power of the War Department to place a force in the field during the
next summer.

The resumption of diplomatic relations between France and Germany has
enabled me to give directions for the withdrawal of the protection extended
to Germans in France by the diplomatic and consular representatives of the
United States in that country. It is just to add that the delicate duty of
this protection has been performed by the minister and the consul-general
at Paris, and the various consuls in France under the supervision of the
latter, with great kindness as well as with prudence and tact. Their course
has received the commendation of the German Government, and has wounded no
susceptibility of the French.

The Government of the Emperor of Germany continues to manifest a friendly
feeling toward the United States, and a desire to harmonize with the
moderate and just policy which this Government maintains in its relations
with Asiatic powers, as well as with the South American Republics. I have
given assurances that the friendly feelings of that Government are fully
shared by the United States.

The ratifications of the consular and naturalization conventions with the
Austro-Hungarian Empire have been exchanged.

I have been officially informed of the annexation of the States of the
Church to the Kingdom of Italy, and the removal of the capital of that
Kingdom to Rome. In conformity with the established policy of the United
States, I have recognized this change. The ratifications of the new treaty
of commerce between the United States and Italy have been exchanged. The
two powers have agreed in this treaty that private property at sea shall be
exempt from capture in case of war between the two powers. The United
States have spared no opportunity of incorporating this rule into the
obligation of nations.

The Forty-first Congress, at its third session, made an appropriation for
the organization of a mixed commission for adjudicating upon the claims of
citizens of the United States against Spain growing out of the insurrection
in Cuba. That commission has since been organized. I transmit herewith the
correspondence relating to its formation and its jurisdiction. It is to be
hoped that this commission will afford the claimants a complete remedy for
their injuries.

It has been made the agreeable duty of the United States to preside over a
conference at Washington between the plenipotentiaries of Spain and the
allied South American Republics, which has resulted in an armistice, with
the reasonable assurance of a permanent peace.

The intimate friendly relations which have so long existed between the
United States and Russia continue undisturbed. The visit of the third son
of the Emperor is a proof that there is no desire on the part of his
Government to diminish the cordiality of those relations. The hospitable
reception which has been given to the Grand Duke is a proof that on our
side we share the wishes of that Government. The inexcusable course of the
Russian minister at Washington rendered it necessary to ask his recall and
to decline to longer receive that functionary as a diplomatic
representative. It was impossible, with self-respect or with a just regard
to the dignity of the country, to permit Mr. Catacazy to continue to hold
intercourse with this Government after his personal abuse of Government
officials, and during his persistent interferences, through various means,
with the relations between the United States and other powers. In
accordance with my wishes, this Government has been relieved of further
intercourse with Mr. Catacazy, and the management of the affairs of the
imperial legation has passed into the hands of a gentleman entirely
unobjectionable.

With Japan we continue to maintain intimate relations. The cabinet of the
Mikado has since the close of the last session of Congress selected
citizens of the United States to serve in offices of importance in several
departments of Government. I have reason to think that this selection is
due to an appreciation of the disinterestedness of the policy which the
United States have pursued toward Japan. It is our desire to continue to
maintain this disinterested and just policy with China as well as Japan.
The correspondence transmitted herewith shows that there is no disposition
on the part of this Government to swerve from its established course.

Prompted by a desire to put an end to the barbarous treatment of our
shipwrecked sailors on the Korean coast, I instructed our minister at
Peking to endeavor to conclude a convention with Korea for securing the
safety and humane treatment of such mariners.

Admiral Rodgers was instructed to accompany him with a sufficient force to
protect him in case of need.

A small surveying party sent out, on reaching the coast was treacherously
attacked at a disadvantage. Ample opportunity was given for explanation and
apology for the insult. Neither came. A force was then landed. After an
arduous march over a rugged and difficult country, the forts from which the
outrages had been committed were reduced by a gallant assault and were
destroyed. Having thus punished the criminals, and having vindicated the
honor of the flag, the expedition returned, finding it impracticable under
the circumstances to conclude the desired convention. I respectfully refer
to the correspondence relating thereto, herewith submitted, and leave the
subject for such action as Congress may see fit to take.

The Republic of Mexico has not yet repealed the very objectionable laws
establishing what is known as the "free zone" on the frontier of the United
States. It is hoped that this may yet be done, and also that more stringent
measures may be taken by that Republic for restraining lawless persons on
its frontiers. I hope that Mexico by its own action will soon relieve this
Government of the difficulties experienced from these causes.

Our relations with the various Republics of Central and South America
continue, with one exception, to be cordial and friendly.

I recommend some action by Congress regarding the overdue installments
under the award of the Venezuelan Claims Commission of 1866. The internal
dissensions of this Government present no justification for the absence of
effort to meet their solemn treaty obligations.

The ratification of an extradition treaty with Nicaragua has been
exchanged.

It is a subject for congratulation that the great Empire of Brazil has
taken the initiatory step toward the abolition of slavery. Our relations
with that Empire, always cordial, will naturally be made more so by this
act. It is not too much to hope that the Government of Brazil may hereafter
find it for its interest, as well as intrinsically right, to advance toward
entire emancipation more rapidly than the present act contemplates.

The true prosperity and greatness of a nation is to be found in the
elevation and education of its laborers.

It is a subject for regret that the reforms in this direction which were
voluntarily promised by the statesmen of Spain have not been carried out in
its West India colonies. The laws and regulations for the apparent
abolition of slavery in Cuba and Porto Rico leave most of the laborers in
bondage, with no hope of release until their lives become a burden to their
employers.

I desire to direct your attention to the fact that citizens of the United
States, or persons claiming to be citizens of the United States, are large
holders in foreign lands of this species of property, forbidden by the
fundamental law of their alleged country. I recommend to Congress to
provide by stringent legislation a suitable remedy against the holding,
owning or dealing in slaves, or being interested in slave property, in
foreign lands, either as owners, hirers, or mortgagors, by citizens of the
United States.

It is to be regretted that the disturbed condition of the island of Cuba
continues to be a source of annoyance and of anxiety. The existence of a
protracted struggle in such close proximity to our own territory, without
apparent prospect of an early termination, can not be other than an object
of concern to a people who, while abstaining from interference in the
affairs of other powers, naturally desire to see every country in the
undisturbed enjoyment of peace, liberty, and the blessings of free
institutions.

Our naval commanders in Cuban waters have been instructed, in case it
should become necessary, to spare no effort to protect the lives and
property of bona fide American citizens and to maintain the dignity of the
flag.

It is hoped that all pending questions with Spain growing out of the
affairs in Cuba may be adjusted in the spirit of peace and conciliation
which has hitherto guided the two powers in their treatment of such
questions.

To give importance to and to add to the efficiency of our diplomatic
relations with Japan and China, and to further aid in retaining the good
opinion of those peoples, and to secure to the United States its share of
the commerce destined to flow between those nations and the balance of the
commercial world, I earnestly recommend that an appropriation be made to
support at least four American youths in each of those countries, to serve
as a part of the official family of our ministers there. Our
representatives would not even then be placed upon an equality with the
representatives of Great Britain and of some other powers. As now situated,
our representatives in Japan and China have to depend for interpreters and
translators upon natives of those countries who know our language
imperfectly, or procure for the occasion the services of employees in
foreign business houses or the interpreters to other foreign ministers.

I would also recommend liberal measures for the purpose of supporting the
American lines of steamers now plying between San Francisco and Japan and
China, and the Australian line--almost our only remaining lines of ocean
steamers--and of increasing their services.

The national debt has been reduced to the extent of $86,057, 126.80 during
the year, and by the negotiation of national bonds at a lower rate of
interest the interest on the public debt has been so far diminished that
now the sum to be raised for the interest account is nearly $17,000,000
less than on the 1st of March, 1869. It was highly desirable that this
rapid diminution should take place, both to strengthen the credit of the
country and to convince its citizens of their entire ability to meet every
dollar of liability without bankrupting them. But in view of the
accomplishment of these desirable ends: of the rapid development of the
resources of the country; its increasing ability to meet large demands, and
the amount already paid, it is not desirable that the present resources of
the country should continue to be taxed in order to continue this rapid
payment. I therefore recommend a modification of both the tariff and
internal-tax law. I recommend that all taxes from internal sources be
abolished, except those collected from spirituous, vinous, and malt
liquors, tobacco in its various forms, and from stamps.

In readjusting the tariff I suggest that a careful estimate be made of the
amount of surplus revenue collected under the present laws, after providing
for the current expenses of the Government, the interest count, and a
sinking fund, and that this surplus be reduced in such a manner as to
afford the greatest relief to the greatest number. There are many articles
not produced at home, but which enter largely into general consumption
through articles which are manufactured at home, such as medicines
compounded, etc., etc., from which very little revenue is derived, but
which enter into general use. All such articles I recommend to be placed on
the "free list." Should a further reduction prove advisable, I would then
recommend that it be made upon those articles which can best bear it
without disturbing home production or reducing the wages of American
labor.

I have not entered into figures, because to do so would be to repeat what
will be laid before you in the report of the Secretary of the Treasury. The
present laws for collecting revenue pay collectors of customs small
salaries, but provide for moieties (shares in all seizures), which, at
principal ports of entry particularly, raise the compensation of those
officials to a large sum. It has always seemed to me as if this system must
at times work perniciously. It holds out an inducement to dishonest men,
should such get possession of those offices, to be lax in their scrutiny of
goods entered, to enable them finally to make large seizures. Your
attention is respectfully invited to this subject.

Continued fluctuations in the value of gold, as compared with the national
currency, has a most damaging effect upon the increase and development of
the country, in keeping up prices of all articles necessary in everyday
life. It fosters a spirit of gambling, prejudicial alike to national morals
and the national finances. If the question can be met as to how to get a
fixed value to our currency, that value constantly and uniformly
approaching par with specie, a very desirable object will be gained.

For the operations of the Army in the past year, the expense of maintaining
it, the estimate for the ensuing year, and for continuing seacoast and
other improvements conducted under the supervision of the War Department, I
refer you to the accompanying report of the Secretary of War.

I call your attention to the provisions of the act of Congress approved
March 3, 1869, which discontinues promotions in the staff corps of the Army
until provided for by law. I recommend that the number of officers in each
grade in the staff corps be fixed, and that whenever the number in any one
grade falls below the number so fixed, that the vacancy may be filled by
promotion from the grade below. I also recommend that when the office of
chief of a corps becomes vacant the place may be filled by selection from
the corps in which the vacancy exists.

The report of the Secretary of the Navy shows an improvement in the number
and efficiency of the naval force, without material increase in the expense
of supporting it. This is due to the policy which has been adopted, and is
being extended as fast as our material will admit, of using smaller vessels
as cruisers on the several stations. By this means we have been enabled to
occupy at once a larger extent of cruising grounds, to visit more
frequently the ports where the presence of our flag is desirable, and
generally to discharge more efficiently the appropriate duties of the Navy
in time of peace, without exceeding the number of men or the expenditure
authorized by law.

During the past year the Navy has, in addition to its regular service,
supplied the men and officers for the vessels of the Coast Survey, and has
completed the surveys authorized by Congress of the isthmuses of Darien and
Tehuantepec, and, under like authority, has sent out an expedition,
completely furnished and equipped, to explore the unknown ocean of the
north.

The suggestions of the report as to the necessity for increasing and
improving the materiel of the Navy, and the plan recommended for reducing
the personnel of the service to a peace standard, by the gradual abolition
of certain grades of officers, the reduction of others, and the employment
of some in the service of the commercial marine, are well considered and
deserve the thoughtful attention of Congress.

I also recommend that all promotions in the Navy above the rank of captain
be by selection instead of by seniority. This course will secure in the
higher grades greater efficiency and hold out an incentive to young
officers to improve themselves in the knowledge of their profession.

The present cost of maintaining the Navy, its cost compared with that of
the preceding year, and the estimates for the ensuing year are contained in
the accompanying report of the Secretary of the Navy.

The enlarged receipts of the Post-Office Department, as shown by the
accompanying report of the Postmaster-General, exhibit a gratifying
increase in that branch of the public service. It is the index of the
growth of education and of the prosperity of the people, two elements
highly conducive to the vigor and stability of republics. With a vast
territory like ours, much of it sparsely populated, but all requiring the
services of the mail, it is not at present to be expected that this
Department can be made self-sustaining. But a gradual approach to this end
from year to year is confidently relied on, and the day is not far distant
when the Post-Office Department of the Government will prove a much greater
blessing to the whole people than it is now.

The suggestions of the Postmaster-General for improvements in the
Department presided over by him are earnestly recommended to you, special
attention. Especially do I recommend favorable consideration of the plan
for uniting the telegraphic system of the United States with the postal
system. It is believed that by such a course the cost of telegraphing could
be much reduced, and the service as well, if not better, rendered. It would
secure the further advantage of extending the telegraph through portions of
the country where private enterprise will not construct it. Commerce,
trade, and, above all, the efforts to bring a people widely separated into
a community of interest are always benefited by a rapid intercommunication.
Education, the groundwork of republican institutions, is encouraged by
increasing the facilities to gather speedy news from all parts of the
country. The desire to reap the benefit of such improvements will stimulate
education. I refer you to the report of the Postmaster-General for full
details of the operations of last year and for comparative statements of
results with former years.

There has been imposed upon the executive branch of the Government the
execution of the act of Congress approved April 20, 1871, and commonly
known as the Kuklux law, in a portion of the State of South Carolina. The
necessity of the course pursued will be demonstrated by the report of the
Committee to Investigate Southern Outrages. Under the provisions of the
above act I issued a proclamation calling the attention of the people of
the United States to the same, and declaring my reluctance to exercise any
of the extraordinary powers thereby conferred upon me, except in case of
imperative necessity, but making known my purpose to exercise such powers
whenever it should become necessary to do so for the purpose of securing to
all citizens of the United States the peaceful enjoyment of the rights
guaranteed to them by the Constitution and the laws.

After the passage of this law information was received from time to time
that combinations of the character referred to in this law existed and were
powerful in many parts of the Southern States, particularly in certain
counties in the State of South Carolina.

Careful investigation was made, and it was ascertained that in nine
counties of that State such combinations were active and powerful,
embracing a sufficient portion of the citizens to control the local
authority, and having, among other things, the object of depriving the
emancipated class of the substantial benefits of freedom and of preventing
the free political action of those citizens who did not sympathize with
their own views. Among their operations were frequent scourgings and
occasional assassinations, generally perpetrated at night by disguised
persons, the victims in almost all cases being citizens of different
political sentiments from their own or freed persons who had shown a
disposition to claim equal rights with other citizens. Thousands of
inoffensive and well disposed citizens were the sufferers by this lawless
violence,

Thereupon, on the 12th of October, 1871, a proclamation was issued, in
terms of the law, calling upon the members of those combinations to
disperse within five days and to deliver to the marshal or military
officers of the United States all arms, ammunition, uniforms, disguises,
and other means and implements used by them for carrying out their unlawful
purposes.

This warning not having been heeded, on the 17th of October another
proclamation was issued, suspending the privileges of the writ of habeas
corpus in nine counties in that State.

Direction was given that within the counties so designated persons
supposed, upon creditable information, to be members of such unlawful
combinations should be arrested by the military forces of the United States
and delivered to the marshal, to be dealt with according to law. In two of
said counties, York and Spartanburg, many arrests have been made. At the
last account the number of persons thus arrested was 168. Several hundred,
whose criminality was ascertained to be of an inferior degree, were
released for the present. These have generally made confessions of their
guilt.

Great caution has been exercised in making these arrests, and,
notwithstanding the large number, it is believed that no innocent person is
now in custody. The prisoners will be held for regular trial in the
judicial tribunals of the United States.

As soon as it appeared that the authorities of the United States were about
to take vigorous measures to enforce the law, many persons absconded, and
there is good ground for supposing that all of such persons have violated
the law. A full report of what has been done under this law will be
submitted to Congress by the Attorney-General.

In Utah there still remains a remnant of barbarism, repugnant to
civilization, to decency, and to the laws of the United States. Territorial
officers, however, have been found who are willing to perform their duty in
a spirit of equity and with a due sense of the necessity of sustaining the
majesty of the law. Neither polygamy nor any other violation of existing
statutes will be permitted within the territory of the United States. It is
not with the religion of the self-styled Saints that we are now dealing,
but with their practices. They will be protected in the worship of God
according to the dictates of their consciences, but they will not be
permitted to violate the laws under the cloak of religion.

It may be advisable for Congress to consider what, in the execution of the
laws against polygamy, is to be the status of plural wives and their
offspring. The propriety of Congress passing an enabling act authorizing
the Territorial legislature of Utah to legitimize all children born prior
to a time fixed in the act might be justified by its humanity to these
innocent children. This is a suggestion only, and not a recommendation.

The policy pursued toward the Indians has resulted favorably, so far as can
be judged from the limited time during which it has been in operation.
Through the exertions of the various societies of Christians to whom has
been intrusted the execution of the policy, and the board of commissioners
authorized by the law of April 10, 1869, many tribes of Indians have been
induced to settle upon reservations, to cultivate the soil, to perform
productive labor of various kinds, and to partially accept civilization.
They are being cared for in such a way, it is hoped, as to induce those
still pursuing their old habits of life to embrace the only opportunity
which is left them to avoid extermination.

I recommend liberal appropriations to carry out the Indian peace policy,
not only because it is humane, Christian like, and economical, but because
it is right.

I recommend to your favorable consideration also the policy of granting a
Territorial government to the Indians in the Indian Territory west of
Arkansas and Missouri and south of Kansas. In doing so every right
guaranteed to the Indian by treaty should be secured. Such a course might
in time be the means of collecting most of the Indians now between the
Missouri and the Pacific and south of the British possessions into one
Territory or one State. The Secretary of the Interior has treated upon this
subject at length, and I commend to you his suggestions.

I renew my recommendation that the public lands be regarded as a heritage
to our children, to be disposed of only as required for occupation and to
actual settlers. Those already granted have been in great part disposed of
in such a way as to secure access to the balance by the hardy settler who
may wish to avail himself of them, but caution should be exercised even in
attaining so desirable an object.

Educational interest may well be served by the grant of the proceeds of the
sale of public lands to settlers. I do not wish to be understood as
recommending in the least degree a curtailment of what is being done by the
General Government for the encouragement of education.

The report of the Secretary of the Interior submitted with this will give
you all the information collected and prepared for publication in regard to
the census taken during the year 1870; the operations of the Bureau of
Education for the year; the Patent Office; the Pension Office; the Land
Office, and the Indian Bureau.

The report of the Commissioner of Agriculture gives the operations of his
Department for the year. As agriculture is the groundwork of our
prosperity, too much importance can not be attached to the labors of this
Department. It is in the hands of an able head, with able assistants, all
zealously devoted to introducing into the agricultural productions of the
nation all useful products adapted to any of the various climates and soils
of our vast territory, and to giving all useful information as to the
method of cultivation, the plants, cereals, and other products adapted to
particular localities. Quietly but surely the Agricultural Bureau is
working a great national good, and if liberally supported the more widely
its influence will be extended and the less dependent we shall be upon the
products of foreign countries.

The subject of compensation to the heads of bureaus and officials holding
positions of responsibility, and requiring ability and character to fill
properly, is one to which your attention is invited. But few of the
officials receive a compensation equal to the respectable support of a
family, while their duties are such as to involve millions of interest. In
private life services demand compensation equal to the services rendered; a
wise economy would dictate the same rule in the Government service.

I have not given the estimates for the support of Government for the
ensuing year, nor the comparative statement between the expenditures for
the year just passed and the one just preceding, because all these figures
are contained in the accompanying reports or in those presented directly to
Congress. These estimates have my approval.

More than six years having elapsed since the last hostile gun was fired
between the armies then arrayed against each other--one for the
perpetuation, the other for the destruction, of the Union--it may well be
considered whether it is not now time that the disabilities imposed by the
fourteenth amendment should be removed. That amendment does not exclude the
ballot, but only imposes the disability to hold offices upon certain
classes. When the purity of the ballot is secure, majorities are sure to
elect officers reflecting the views of the majority. I do not see the
advantage or propriety of excluding men from office merely because they
were before the rebellion of standing and character sufficient to be
elected to positions requiring them to take oaths to support the
Constitution, and admitting to eligibility those entertaining precisely the
same views, but of less standing in their communities. It may be said that
the former violated an oath, while the latter did not; the latter did not
have it in their power to do so. If they had taken this oath, it can not be
doubted they would have broken it as did the former class. If there are any
great criminals, distinguished above all others for the part they took in
opposition to the Government, they might, in the judgment of Congress, be
excluded from such an amnesty.

This subject is submitted for your careful consideration.

The condition of the Southern States is, unhappily, not such as all true
patriotic citizens would like to see. Social ostracism for opinion's sake,
personal violence or threats toward persons entertaining political views
opposed to those entertained by the majority of the old citizens, prevents
immigration and the flow of much-needed capital into the States lately in
rebellion. It will be a happy condition of the country when the old
citizens of these States will take an interest in public affairs,
promulgate ideas honestly entertained, vote for men representing their
views, and tolerate the same freedom of expression and ballot in those
entertaining different political convictions.

Under the provisions of the act of Congress approved February 21, 1871, a
Territorial government was organized in the District of Columbia. Its
results have thus far fully realized the expectations of its advocates.
Under the direction of the Territorial officers, a system of improvements
has been inaugurated by means of which Washington is rapidly becoming a
city worthy of the nation's capital. The citizens of the District having
voluntarily taxed themselves to a large amount for the purpose of
contributing to the adornment of the seat of Government, I recommend
liberal appropriations on the part of Congress, in order that the
Government may bear its just share of the expense of carrying out a
judicious system of improvements.

By the great fire in Chicago the most important of the Government buildings
in that city were consumed. Those burned had already become inadequate to
the wants of the Government in that growing city, and, looking to the near
future, were totally inadequate. I recommend, therefore, that an
appropriation be made immediately to purchase the remainder of the square
on which the burned buildings stood, provided it can be purchased at a fair
valuation, or provided that the legislature of Illinois will pass a law
authorizing its condemnation for Government purposes; and also an
appropriation of as much money as can properly be expended toward the
erection of new buildings during this fiscal year.

The number of immigrants ignorant of our laws, habits, etc., coming into
our country annually has become so great and the impositions practiced upon
them so numerous and flagrant that I suggest Congressional action for their
protection. It seems to me a fair subject of legislation by Congress. I can
not now state as fully as I desire the nature of the complaints made by
immigrants of the treatment they receive, but will endeavor to do so during
the session of Congress, particularly if the subject should receive your
attention.

It has been the aim of the Administration to enforce honesty and efficiency
in all public offices. Every public servant who has violated the trust
placed in him has been proceeded against with all the rigor of the law. If
bad men have secured places, it has been the fault of the system
established by law and custom for making appointments, or the fault of
those who recommend for Government positions persons not sufficiently well
known to them personally, or who give letters indorsing the characters of
office seekers without a proper sense of the grave responsibility which
such a course devolves upon them. A civil-service reform which can correct
this abuse is much desired. In mercantile pursuits the business man who
gives a letter of recommendation to a friend to enable him to obtain credit
from a stranger is regarded as morally responsible for the integrity of his
friend and his ability to meet his obligations. A reformatory law which
would enforce this principle against all indorsers of persons for public
place would insure great caution in making recommendations. A salutary
lesson has been taught the careless and the dishonest public servant in the
great number of prosecutions and convictions of the last two years.

It is gratifying to notice the favorable change which is taking place
throughout the country in bringing to punishment those who have proven
recreant to the trusts confided to them and in elevating to public office
none but those who possess the confidence of the honest and the virtuous,
who, it will always be found, comprise the majority of the community in
which they live.

In my message to Congress one year ago I urgently recommended a reform in
the civil service of the country. In conformity with that recommendation
Congress, in the ninth section of "An act making appropriations for sundry
civil expenses of the Government, and for other purposes," approved March
3, 1871, gave the necessary authority to the Executive to inaugurate a
civil-service reform, and placed upon him the responsibility of doing so.
Under the authority of said act I convened a board of gentlemen eminently
qualified for the work to devise rules and regulations to effect the needed
reform. Their labors are not yet complete, but it is believed that they
will succeed in devising a plan that can be adopted to the great relief of
the Executive, the heads of Departments, and members of Congress, and which
will redound to the true interest of the public service. At all events, the
experiment shall have a fair trial.

I have thus hastily summed up the operations of the Government during the
last year, and made such suggestions as occur to me to be proper for your
consideration. I submit them with a confidence that your combined action
will be wise, statesmanlike, and in the best interests of the whole
country.

U. S. GRANT

***

State of the Union Address
Ulysses S. Grant
December 2, 1872

To the Senate and House of Representatives:

In transmitting to you this my fourth annual message it is with
thankfulness to the Giver of All Good that as a nation we have been blessed
for the past year with peace at home, peace abroad, and a general
prosperity vouchsafed to but few peoples.

With the exception of the recent devastating fire which swept from the
earth with a breath, as it were, millions of accumulated wealth in the city
of Boston, there has been no overshadowing calamity within the year to
record. It is gratifying to note how, like their fellow-citizens of the
city of Chicago under similar circumstances a year earlier, the citizens of
Boston are rallying under their misfortunes, and the prospect that their
energy and perseverance will overcome all obstacles and show the same
prosperity soon that they would had no disaster befallen them. Otherwise we
have been free from pestilence, war, and calamities, which often overtake
nations; and, as far as human judgment can penetrate the future, no cause
seems to exist to threaten our present peace.

When Congress adjourned in June last, a question had been raised by Great
Britain, and was then pending, which for a time seriously imperiled the
settlement by friendly arbitration of the grave differences between this
Government and that of Her Britannic Majesty, which by the treaty of
Washington had been referred to the tribunal of arbitration which had met
at Geneva, in Switzerland.

The arbitrators, however, disposed of the question which had jeoparded the
whole of the treaty and threatened to involve the two nations in most
unhappy relations toward each other in a manner entirely satisfactory to
this Government and in accordance with the views and the policy which it
had maintained.

The tribunal, which had convened at Geneva in December, concluded its
laborious session on the 14th day of September last, on which day, having
availed itself of the discretionary power given to it by the treaty to
award a sum in gross, it made its decision, whereby it awarded the sum of
$15,500,000 in gold as the indemnity to be paid by Great Britain to the
United States for the satisfaction of all the claims referred to its
consideration.

This decision happily disposes of a long-standing difference between the
two Governments, and, in connection with another award, made by the German
Emperor under a reference to him by the same treaty, leaves these two
Governments without a shadow upon the friendly relations which it is my
sincere hope may forever remain equally unclouded.

The report of the agent of the United States appointed to attend the Geneva
tribunal, accompanied by the protocols of the proceedings of the
arbitrators, the arguments of the counsel of both Governments, the award of
the tribunal, and the opinions given by the several arbitrators, is
transmitted herewith.

I have caused to be communicated to the heads of the three friendly powers
who complied with the joint request made to them under the treaty the
thanks of this Government for the appointment of arbitrators made by them
respectively, and also my thanks to the eminent personages named by them,
and my appreciation of the dignity, patience, impartiality, and great
ability with which they discharged their arduous and high functions.

Her Majesty's Government has communicated to me the appreciation by Her
Majesty of the ability and indefatigable industry displayed by Mr. Adams,
the arbitrator named on the part of this Government during the protracted
inquiries and discussions of the tribunal. I cordially unite with Her
Majesty in this appreciation.

It is due to the agent of the United States before the tribunal to record
my high appreciation of the marked ability, unwearied patience, and the
prudence and discretion with which he has conducted the very responsible
and delicate duties committed to him, as it is also due to the learned and
eminent counsel who attended the tribunal on the part of this Government to
express my sense of the talents and wisdom which they brought to bear in
the attainment of the result so happily reached.

It will be the province of Congress to provide for the distribution among
those who may be entitled to it of their respective shares of the money to
be paid. Although the sum awarded is not payable until a year from the date
of the award, it is deemed advisable that no time be lost in making a
proper examination of the several cases in which indemnification may be
due. I consequently recommend the creation of a board of commissioners for
the purpose.

By the thirty-fourth article of the treaty of Washington the respective
claims of the United States and of Great Britain in their construction of
the treaty of the 15th of June, 1846, defining the boundary line between
their respective territories, were submitted to the arbitration and award
of His Majesty the Emperor of Germany, to decide which of those claims is
most in accordance with the true interpretation of the treaty of 1846.

His Majesty the Emperor of Germany, having been pleased to undertake the
arbitration, has the earnest thanks of this Government and of the people of
the United States for the labor, pains, and care which he has devoted to
the consideration of this long-pending difference. I have caused an
expression of my thanks to be communicated to His Majesty. Mr. Bancroft,
the representative of this Government at Berlin, conducted the case and
prepared the statement on the part of the United States with the ability
that his past services justified the public in expecting at his hands. As a
member of the Cabinet at the date of the treaty which has given rise to the
discussion between the two Governments, as the minister to Great Britain
when the construction now pronounced unfounded was first advanced, and as
the agent and representative of the Government to present the case and to
receive the award, he has been associated with the question in all of its
phases, and in every stage has manifested a patriotic zeal and earnestness
in maintenance of the claim of the United States. He is entitled to much
credit for the success which has attended the submission.

After a patient investigation of the case and of the statements of each
party, His Majesty the Emperor, on the 21st day of October last, signed his
award in writing, decreeing that the claim of the Government of the United
States, that the boundary line between the territories of Her Britannic
Majesty and the United States should be drawn through the Haro Channel, is
most in accordance with the true interpretation of the treaty concluded on
the 15th of June, 1846, between the Governments of Her Britannic Majesty
and of the United States.

Copies of the "case" presented on behalf of each Government, and of the
"statement in reply" of each, and a translation of the award, are
transmitted herewith.

This award confirms the United States in their claim to the important
archipelago of islands lying between the continent and Vancouvers Island,
which for more than twenty-six years (ever since the ratification of the
treaty) Great Britain has contested, and leaves us, for the first time in
the history of the United States as a nation, without a question of
disputed boundary between our territory and the possessions of Great
Britain on this continent.

It is my grateful duty to acknowledge the prompt, spontaneous action of Her
Majesty's Government in giving effect to the award. In anticipation of any
request from this Government, and before the reception in the United States
of the award signed by the Emperor, Her Majesty had given instructions for
the removal of her troops which had been stationed there and for the
cessation of all exercise or claim of jurisdiction, so as to leave the
United States in the exclusive possession of the lately disputed territory.
I am gratified to be able to announce that the orders for the removal of
the troops have been executed, and that the military joint occupation of
San Juan has ceased. The islands are now in the exclusive possession of the
United States.

It now becomes necessary to complete the survey and determination of that
portion of the boundary line (through the Haro Channel) upon which the
commission which determined the remaining part of the line were unable to
agree. I recommend the appointment of a commission to act jointly with one
which may be named by Her Majesty for that purpose.

Experience of the difficulties attending the determination of our admitted
line of boundary, after the occupation of the territory and its settlement
by those owing allegiance to the respective Governments, points to the
importance of establishing, by natural objects or other monuments, the
actual line between the territory acquired by purchase from Russia and the
adjoining possessions of Her Britannic Majesty. The region is now so
sparsely occupied that no conflicting interests of individuals or of
jurisdiction are likely to interfere to the delay or embarrassment of the
actual location of the line. If deferred until population shall enter and
occupy the territory, some trivial contest of neighbors may again array the
two Governments in antagonism. I therefore recommend the appointment of a
commission, to act jointly with one that may be appointed on the part of
Great Britain, to determine the line between our Territory of Alaska and
the conterminous possessions of Great Britain.

In my last annual message I recommended the legislation necessary on the
part of the United States to bring into operation the articles of the
treaty of Washington of May 8, 1871, relating to the fisheries and to other
matters touching the relations of the United States toward the British
North American possessions, to become operative so soon as the proper
legislation should be had on the part of Great Britain and its
possessions.

That legislation on the part of Great Britain and its possessions had not
then been had, and during the session of Congress a question was raised
which for the time raised a doubt whether any action by Congress in the
direction indicated would become important. This question has since been
disposed of, and I have received notice that the Imperial Parliament and
the legislatures of the provincial governments have passed laws to carry
the provisions of the treaty on the matters referred to into operation. I
therefore recommend your early adoption of the legislation in the same
direction necessary on the part of this Government.

The joint commission for determining the boundary line between the United
States and the British possessions between the Lake of the Woods and the
Rocky Mountains has organized and entered upon its work. It is desirable
that the force be increased, in order that the completion of the survey and
determination of the line may be the sooner attained. To this end I
recommend that a sufficient appropriation be made.

With France, our earliest ally; Russia, the constant and steady friend of
the United States; Germany, with whose Government and people we have so
many causes of friendship and so many common sympathies, and the other
powers of Europe, our relations are maintained on the most friendly terms.

Since my last annual message the exchange has been made of the
ratifications of a treaty with the Austro-Hungarian Empire relating to
naturalization; also of a treaty with the German Empire respecting consuls
and trade-marks; also of a treaty with Sweden and Norway relating to
naturalization; all of which treaties have been duly proclaimed.

Congress at its last session having made an appropriation to defray the
expense of commissioners on the part of the United States to the
International Statistical Congress at St. Petersburg, the persons appointed
in that character proceeded to their destination and attended the sessions
of the congress. Their report shall in due season be laid before you. This
congress meets at intervals of about three years, and has held its sessions
in several of the countries of Europe. I submit to your consideration the
propriety of extending an invitation to the congress to hold its next
meeting in the United States. The Centennial Celebration to be held in 1876
would afford an appropriate occasion for such meeting.

Preparations are making for the international exposition to be held during
the next year in Vienna, on a scale of very great magnitude. The tendency
of these expositions is in the direction of advanced civilization, and of
the elevation of industry and of labor, and of the increase of human
happiness, as well as of greater intercourse and good will between nations.
As this exposition is to be the first which will have been held in eastern
Europe, it is believed that American inventors and manufacturers will be
ready to avail themselves of the opportunity for the presentation of their
productions if encouraged by proper aid and protection.

At the last session of Congress authority was given for the appointment of
one or more agents to represent this Government at the exposition. The
authority thus given has been exercised, but, in the absence of any
appropriation, there is danger that the important benefits which the
occasion offers will in a large degree be lost to citizens of the United
States. I commend the subject strongly to your consideration, and recommend
that an adequate appropriation be made for the purpose.

To further aid American exhibitors at the Vienna Exposition, I would
recommend, in addition to an appropriation of money, that the Secretary of
the Navy be authorized to fit up two naval vessels to transport between our
Atlantic cities and Trieste, or the most convenient port to Vienna, and
back, their articles for exhibition.

Since your last session the President of the Mexican Republic,
distinguished by his high character and by his services to his country, has
died. His temporary successor has now been elected with great unanimity by
the people a proof of confidence on their part in his patriotism and wisdom
which it is believed will be confirmed by the results of his
administration. It is particularly desirable that nothing should be left
undone by the Government of either Republic to strengthen their relations
as neighbors and friends.

It is much to be regretted that many lawless acts continue to disturb the
quiet of the settlements on the border between our territory and that of
Mexico, and that complaints of wrongs to American citizens in various parts
of the country are made. The revolutionary condition in which the
neighboring Republic has so long been involved has in some degree
contributed to this disturbance. It is to be hoped that with a more settled
rule of order through the Republic, which may be expected from the present
Government, the acts of which just complaint is made will cease.

The proceedings of the commission under the convention with Mexico of the
4th of July, 1868, on the subject of claims, have, unfortunately, been
checked by an obstacle, for the removal of which measures have been taken
by the two Governments which it is believed will prove successful.

The commissioners appointed, pursuant to the joint resolution of Congress
of the 7th of May last, to inquire into depredations on the Texan frontier
have diligently made investigations in that quarter. Their report upon the
subject will be communicated to you. Their researches were necessarily
incomplete, partly on account of the limited appropriation made by
Congress. Mexico, on the part of that Government, has appointed a similar
commission to investigate these outrages. It is not announced officially,
but the press of that country states that the fullest investigation is
desired, and that the cooperation of all parties concerned is invited to
secure that end. I therefore recommend that a special appropriation be made
at the earliest day practicable, to enable the commissioners on the part of
the United States to return to their labors without delay.

It is with regret that I have again to announce a continuance of the
disturbed condition of the island of Cuba. No advance toward the
pacification of the discontented part of the population has been made.
While the insurrection has gained no advantages and exhibits no more of the
elements of power or of the prospects of ultimate success than were
exhibited a year ago, Spain, on the other hand, has not succeeded in its
repression, and the parties stand apparently in the same relative attitude
which they have occupied for a long time past.

This contest has lasted now for more than four years. Were its scene at a
distance from our neighborhood, we might be indifferent to its result,
although humanity could not be unmoved by many of its incidents wherever
they might occur. It is, however, at our door.

I can not doubt that the continued maintenance of slavery in Cuba is among
the strongest inducements to the continuance of this strife. A terrible
wrong is the natural cause of a terrible evil. The abolition of slavery and
the introduction of other reforms in the administration of government in
Cuba could not fail to advance the restoration of peace and order. It is
greatly to be hoped that the present liberal Government of Spain will
voluntarily adopt this view.

The law of emancipation, which was passed more than two years since, has
remained unexecuted in the absence of regulations for its enforcement. It
was but a feeble step toward emancipation, but it was the recognition of
right, and was hailed as such, and exhibited Spain in harmony with
sentiments of humanity and of justice and in sympathy with the other powers
of the Christian and civilized world.

Within the past few weeks the regulations for carrying out the law of
emancipation have been announced, giving evidence of the sincerity of
intention of the present Government to carry into effect the law of 1870. I
have not failed to urge the consideration of the wisdom, the policy, and
the justice of a more effective system for the abolition of the great evil
which oppresses a race and continues a bloody and destructive contest close
to our border, as well as the expediency and the justice of conceding
reforms of which the propriety is not questioned.

Deeply impressed with the conviction that the continuance of slavery is one
of the most active causes of the continuance of the unhappy condition in
Cuba, I regret to believe that citizens of the United States, or those
claiming to be such, are large holders in Cuba of what is there claimed as
property, but which is forbidden and denounced by the laws of the United
States. They are thus, in defiance of the spirit of our own laws,
contributing to the continuance of this distressing and sickening contest.
In my last annual message I referred to this subject, and I again recommend
such legislation as may be proper to denounce, and, if not prevent, at
least to discourage American citizens from holding or dealing in slaves.

It is gratifying to announce that the ratifications of the convention
concluded under the auspices of this Government between Spain on the one
part and the allied Republics of the Pacific on the other, providing for an
armistice, have been exchanged. A copy of the instrument is herewith
submitted. It is hoped that this may be followed by a permanent peace
between the same parties.

The differences which at one time threatened the maintenance of peace
between Brazil and the Argentine Republic it is hoped are in the way of
satisfactory adjustment.

With these States, as with the Republics of Central and of South America,
we continue to maintain the most friendly relations.

It is with regret, however, I announce that the Government of Venezuela has
made no further payments on account of the awards under the convention of
the 25th of April, 1866. That Republic is understood to be now almost, if
not quite, tranquilized. It is hoped, therefore, that it will lose no time
in providing for the unpaid balance of its debt to the United States,
which, having originated in injuries to our citizens by Venezuelan
authorities, and having been acknowledged, pursuant to a treaty, in the
most solemn form known among nations, would seem to deserve a preference
over debts of a different origin and contracted in a different manner. This
subject is again recommended to the attention of Congress for such action
as may be deemed proper.

Our treaty relations with Japan remain unchanged. An imposing embassy from
that interesting and progressive nation visited this country during the
year that is passing, but, being unprovided with powers for the signing of
a convention in this country, no conclusion in that direction was reached.
It is hoped, however, that the interchange of opinions which took place
during their stay in this country has led to a mutual appreciation of the
interests which may be promoted when the revision of the existing treaty
shall be undertaken.

In this connection I renew my recommendation of one year ago, that--

To give importance to and to add to the efficiency of our diplomatic
relations with Japan and China, and to further aid in retaining the good
opinion of those peoples, and to secure to the United States its share of
the commerce destined to flow between those nations and the balance of the
commercial world, an appropriation be made to support at least four
American youths in each of those countries, to serve as a part of the
official family of our ministers there. Our representatives would not even
then be placed upon an equality with the representatives of Great Britain
and of some other powers. As now situated, our representatives in Japan and
China have to depend for interpreters and translators upon natives of those
countries, who know our language imperfectly, or procure for the occasion
the services of employees in foreign business houses or the interpreters to
other foreign ministers.

I renew the recommendation made on a previous occasion, of the transfer to
the Department of the Interior, to which they seem more appropriately to
belong, of all the powers and duties in relation to the Territories with
which the Department of State is now charged by law or by custom.

Congress from the beginning of the Government has wisely made provision for
the relief of distressed seamen in foreign countries. No similar provision,
however, has hitherto been made for the relief of citizens in distress
abroad other than seamen. It is understood to be customary with other
governments to authorize consuls to extend such relief to their citizens or
subjects in certain cases. A similar authority and an appropriation to
carry it into effect are recommended in the case of citizens of the United
States destitute or sick under such circumstances. It is well known that
such citizens resort to foreign countries in great numbers. Though most of
them are able to bear the expenses incident to locomotion, there are some
who, through accident or otherwise, become penniless, and have no friends
at home able to succor them. Persons in this situation must either perish,
cast themselves upon the charity of foreigners, or be relieved at the
private charge of our own officers, who usually, even with the most
benevolent dispositions, have nothing to spare for such purposes.

Should the authority and appropriation asked for be granted, care will be
taken so to carry the beneficence of Congress into effect that it shall not
be unnecessarily or unworthily bestowed. TREASURY.

The moneys received and covered into the Treasury during the fiscal year
ended June 30, 1872, were:

From customs - $216,370,286.77

From sales of public lands - 2,575,714.19

From internal revenue - 130,642,177.72

From tax on national-bank circulation, etc - 6,523,396.39

From Pacific railway companies - 749,861.87

From customs fines, etc - 1,136,442.34

From fees--consular, patent, lands, etc - 2,284,095.92

From miscellaneous - 412,254.71 -

***

State of the Union Address
Ulysses S. Grant
December 1, 1873

To the Senate and House of Representatives:

The year that has passed since the submission of my last message to
Congress has, especially during the latter part of it, been an eventful one
to the country. In the midst of great national prosperity a financial
crisis has occurred that has brought low fortunes of gigantic proportions;
political partisanship has almost ceased to exist, especially in the
agricultural regions; and, finally, the capture upon the high seas of a
vessel bearing our flag has for a time threatened the most serious
consequences, and has agitated the public mind from one end of the country
to the other. But this, happily, now is in the course of satisfactory
adjustment, honorable to both nations concerned.

The relations of the United States, however, with most of the other powers
continue to be friendly and cordial. With France, Germany, Russia, Italy,
and the minor European powers; with Brazil and most of the South American
Republics, and with Japan, nothing has occurred during the year to demand
special notice. The correspondence between the Department of State and
various diplomatic representatives in or from those countries is
transmitted herewith.

In executing the will of Congress, as expressed in its joint resolution of
the 14th of February last, and in accordance with the provisions of the
resolution, a number of "practical artisans," of "scientific men," and of
"honorary commissioners" were authorized to attend the exposition at Vienna
as commissioners on the part of the United States. It is believed that we
have obtained the object which Congress had in view when it passed the
joint resolution--"in order to enable the people of the United States to
participate in the advantages of the International Exhibition of the
Products of Agriculture, Manufactures, and the Fine Arts to be held at
Vienna." I take pleasure in adding that the American exhibitors have
received a gratifying number of diplomas and of medals.

During the exposition a conference was held at Vienna for the purpose of
consultation on the systems prevailing in different countries for the
protection of inventions. I authorized a representative from the Patent
Office to be present at Vienna at the time when this conference was to take
place, in order to aid as far as he might in securing any possible
additional protection to American inventors in Europe. The report of this
agent will be laid before Congress.

It is my pleasant duty to announce to Congress that the Emperor of China,
on attaining his majority, received the diplomatic representatives of the
Western powers in person. An account of these ceremonies and of the
interesting discussions which preceded them will be found in the documents
transmitted herewith. The accompanying papers show that some advance,
although slight, has been made during the past year toward the suppression
of the infamous Chinese cooly trade. I recommend Congress to inquire
whether additional legislation be not needed on this subject.

The money awarded to the United States by the tribunal of arbitration at
Geneva was paid by Her Majesty's Government a few days in advance of the
time when it would have become payable according to the terms of the
treaty. In compliance with the provisions of the act of March 3, 1873, it
was at once paid into the Treasury, and used to redeem, so far as it might,
the public debt of the United States; and the amount so redeemed was
invested in a 5 per cent registered bond of the United States for
$15,500,000, which is now held by the Secretary of State, subject to the
future disposition of Congress.

I renew my recommendation, made at the opening of the last session of
Congress, that a commission be created for the purpose of auditing and
determining the amounts of the several "direct losses growing out of the
destruction of vessels and their cargoes" by the Alabama, the Florida, or
the Shenandoah after leaving Melbourne, for which the sufferers have
received no equivalent or compensation, and of ascertaining the names of
the persons entitled to receive compensation for the same, making the
computations upon the basis indicated by the tribunal of arbitration at
Geneva; and that payment of such losses be authorized to an extent not to
exceed the awards of the tribunal at Geneva.

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 slave-holders 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 coining 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 tons, 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 5,058 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; 1,480 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 311 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

***

State of the Union Address
Ulysses S. Grant
December 7, 1874

To the Senate and House of Representatives:

Since the convening of Congress one year ago the nation has undergone a
prostration in business and industries such as has not been witnessed with
us for many years. Speculation as to the causes for this prostration might
be indulged in without profit, because as many theories would be advanced
as there would be independent writers--those who expressed their own views
without borrowing--upon the subject. Without indulging in theories as to
the cause of this prostration, therefore, I will call your attention only
to the fact, and to some plain questions as to which it would seem there
should be no disagreement.

During this prostration two essential elements of prosperity have been most
abundant--labor and capital. Both have been largely unemployed. Where
security has been undoubted, capital has been attainable at very moderate
rates. Where labor has been wanted, it has been found in abundance, at
cheap rates compared with what--of necessaries and comforts of life--could
be purchased with the wages demanded. Two great elements of prosperity,
therefore, have not been denied us. A third might be added: Our soil and
climate are unequaled, within the limits of any contiguous territory under
one nationality, for its variety of products to feed and clothe a people
and in the amount of surplus to spare to feed less favored peoples.
Therefore, with these facts in view, it seems to me that wise
statesmanship, at this session of Congress, would dictate legislation
ignoring the past; directing in proper channels these great elements of
prosperity to any people. Debt, debt abroad, is the only element that can,
with always a sound currency, enter into our affairs to cause any continued
depression in the industries and prosperity of our people.

A great conflict for national existence made necessary, for temporary
purposes, the raising of large sums of money from whatever source
attainable. It made it necessary, in the wisdom of Congress--and I do not
doubt their wisdom in the premises, regarding the necessity of the
times--to devise a system of national currency which it proved to be
impossible to keep on a par with the recognized currency of the civilized
world. This begot a spirit of speculation involving an extravagance and
luxury not required for the happiness or prosperity of a people, and
involving, both directly and indirectly, foreign indebtedness. The
currency, being of fluctuating value, and therefore unsafe to hold for
legitimate transactions requiring money, became a subject of speculation
within itself. These two causes, however, have involved us in a foreign
indebtedness, contracted in good faith by borrower and lender, which should
be paid in coin, and according to the bond agreed upon when the debt was
contracted--gold or its equivalent. The good faith of the Government can
not be violated toward creditors without national disgrace. But our
commerce should be encouraged; American shipbuilding and carrying capacity
increased; foreign markets sought for products of the soil and
manufactories, to the end that we may be able to pay these debts. Where a
new market can be created for the sale of our products, either of the soil,
the mine, or the manufactory, a new means is discovered of utilizing our
idle capital and labor to the advantage of the whole people. But, in my
judgment, the first step toward accomplishing this object is to secure a
currency of fixed, stable value; a currency good wherever civilization
reigns; one which, if it becomes superabundant with one people, will find a
market with some other; a currency which has as its basis the labor
necessary to produce it, which will give to it its value. Gold and silver
are now the recognized medium of exchange the civilized world over, and to
this we should return with the least practicable delay. In view of the
pledges of the American Congress when our present legal-tender system was
adopted, and debt contracted, there should be no delay--certainly no
unnecessary delay--in fixing by legislation a method by which we will
return to specie. To the accomplishment of this end I invite your special
attention. I believe firmly that there can be no prosperous and permanent
revival of business and industries until a policy is adopted--with
legislation to carry it out--looking to a return to a specie basis. It is
easy to conceive that the debtor and speculative classes may think it of
value to them to make so-called money abundant until they can throw a
portion of their burdens upon others. But even these, I believe, would be
disappointed in the result if a course should be pursued which will keep in
doubt the value of the legal-tender medium of exchange. A revival of
productive industry is needed by all classes; by none more than the holders
of property, of whatever sort, with debts to liquidate from realization
upon its sale. But admitting that these two classes of citizens are to be
benefited by expansion, would it be honest to give it? Would not the
general loss be too great to justify such relief? Would it not be just as
honest and prudent to authorize each debtor to issue his own legal-tenders
to the extent of his liabilities? Than to do this, would it not be safer,
for fear of overissues by unscrupulous creditors, to say that all debt
obligations are obliterated in the United States, and now we commence anew,
each possessing all he has at the time free from incumbrance? These
propositions are too absurd to be entertained for a moment by thinking or
honest people. Yet every delay in preparation for final resumption partakes
of this dishonesty, and is only less in degree as the hope is held out that
a convenient season will at last arrive for the good work of redeeming our
pledges to commence. It will never come, in my opinion, except by positive
action by Congress, or by national disasters which will destroy, for a time
at least, the credit of the individual and the State at large. A sound
currency might be reached by total bankruptcy and discredit of the
integrity of the nation and of individuals. I believe it is in the power of
Congress at this session to devise such legislation as will renew
confidence, revive all the industries, start us on a career of prosperity
to last for many years and to save the credit of the nation and of the
people. Steps toward the return to a specie basis are the great requisites
to this devoutly to be sought for end. There are others which I may touch
upon hereafter.

A nation dealing in a currency below that of specie in value labors under
two great disadvantages: First, having no use for the world's acknowledged
medium of exchange, gold and silver, these are driven out of the country
because there is no need for their use; second, the medium of exchange in
use being of a fluctuating value--for, after all, it is only worth just
what it will purchase of gold and silver, metals having an intrinsic value
just in proportion to the honest labor it takes to produce them--a larger
margin must be allowed for profit by the manufacturer and producer. It is
months from the date of production to the date of realization. Interest
upon capital must be charged, and risk of fluctuation in the value of that
which is to be received in payment added. Hence high prices, acting as a
protection to the foreign producer, who receives nothing in exchange for
the products of his skill and labor except a currency good, at a stable
value, the world over It seems to me that nothing is clearer than that the
greater part of the burden of existing prostration, for the want of a sound
financial system, falls upon the working man, who must after all produce
the wealth, and the salaried man, who superintends and conducts business.
The burden falls upon them in two ways--by the deprivation of employment
and by the decreased purchasing power of their salaries. It is the duty of
Congress to devise the method of correcting the evils which are
acknowledged to exist, and not mine. But I will venture to suggest two or
three things which seem to me as absolutely necessary to a return to specie
payments, the first great requisite in a return to prosperity. The
legal-tender clause to the law authorizing the issue of currency by the
National Government should be repealed, to take effect as to all contracts
entered into after a day fixed in the repealing act--not to apply, however,
to payments of salaries by Government, or for other expenditures now
provided by law to be paid in currency, in the interval pending between
repeal and final resumption. Provision should be made by which the
Secretary of the Treasury can obtain gold as it may become necessary from
time to time from the date when specie redemption commences. To this might
and should be added a revenue sufficiently in excess of expenses to insure
an accumulation of gold in the Treasury to sustain permanent redemption.

I commend this subject to your careful consideration, believing that a
favorable solution is attainable, and if reached by this Congress that the
present and future generations will ever gratefully remember it as their
deliverer from a thraldom of evil and disgrace.

With resumption, free banking may be authorized with safety, giving the
same full protection to bill holders which they have under existing laws.
Indeed, I would regard free banking as essential. It would give proper
elasticity to the currency. As more currency should be required for the
transaction of legitimate business, new banks would be started, and in turn
banks would wind up their business when it was found that there was a
superabundance of currency. The experience and judgment of the people can
best decide just how much currency is required for the transaction of the
business of the country. It is unsafe to leave the settlement of this
question to Congress, the Secretary of the Treasury, or the Executive.
Congress should make the regulation under which banks may exist, but should
not make banking a monopoly by limiting the amount of redeemable paper
currency that shall be authorized. Such importance do I attach to this
subject, and so earnestly do I commend it to your attention, that I give it
prominence by introducing it at the beginning of this message.

During the past year nothing has occurred to disturb the general friendly
and cordial relations of the United States with other powers.

The correspondence submitted herewith between this Government and its
diplomatic representatives, as also with the representatives of other
countries, shows a satisfactory condition of all questions between the
United States and the most of those countries, and with few exceptions, to
which reference is hereafter made, the absence of any points of difference
to be adjusted.

The notice directed by the resolution of Congress of June 17, 1874, to be
given to terminate the convention of July 17, 1858, between the United
States and Belgium has been given, and the treaty will accordingly
terminate on the 1st day of July, 1875. This convention secured to certain
Belgian vessels entering the ports of the United States exceptional
privileges which are not accorded to our own vessels. Other features of the
convention have proved satisfactory, and have tended to the cultivation of
mutually beneficial commercial intercourse and friendly relations between
the two countries. I hope that negotiations which have been invited will
result in the celebration of another treaty which may tend to the interests
of both countries.

Our relations with China continue to be friendly. During the past year the
fear of hostilities between China and Japan, growing out of the landing of
an armed force upon the island of Formosa by the latter, has occasioned
uneasiness. It is earnestly hoped, however, that the difficulties arising
from this cause will be adjusted, and that the advance of civilization in
these Empires may not be retarded by a state of war. In consequence of the
part taken by certain citizens of the United States in this expedition, our
representatives in those countries have been instructed to impress upon the
Governments of China and Japan the firm intention of this country to
maintain strict neutrality in the event of hostilities, and to carefully
prevent any infraction of law on the part of our citizens.

In connection with this subject I call the attention of Congress to a
generally conceded fact--that the great proportion of the Chinese
immigrants who come to our shores do not come voluntarily, to make their
homes with us and their labor productive of general prosperity, but come
under contracts with headmen, who own them almost absolutely. In a worse
form does this apply to Chinese women. Hardly a perceptible percentage of
them perform any honorable labor, but they are brought for shameful
purposes, to the disgrace of the communities where settled and to the great
demoralization of the youth of those localities. If this evil practice can
be legislated against, it will be my pleasure as well as duty to enforce
any regulation to secure so desirable an end.

It is hoped that negotiations between the Government of Japan and the
treaty powers, looking to the further opening of the Empire and to the
removal of various restrictions upon trade and travel, may soon produce the
results desired, which can not fail to inure to the benefit of all the
parties. Having on previous occasions submitted to the consideration of
Congress the propriety of the release of the Japanese Government from the
further payment of the indemnity under the convention of October 22, 1864,
and as no action had been taken thereon, it became my duty to regard the
obligations of the convention as in force; and as the other powers
interested had received their portion of the indemnity in full, the
minister of the United States in Japan has, in behalf of this Government,
received the remainder of the amount due to the United States under the
convention of Simonosaki. I submit the propriety of applying the income of
a part, if not of the whole, of this fund to the education in the Japanese
language of a number of young men to be under obligations to serve the
Government for a specified time as interpreters at the legation and the
consulates in Japan. A limited number of Japanese youths might at the same
time be educated in our own vernacular, and mutual benefits would result to
both Governments. The importance of having our own citizens, competent and
familiar with the language of Japan, to act as interpreters and in other
capacities connected with the legation and the consulates in that country
can not readily be overestimated.

The amount awarded to the Government of Great Britain by the mixed
commission organized under the provisions of the treaty of Washington in
settlement of the claims of British subjects arising from acts committed
between April 13, 1861, and April 9, 1865, became payable, under the terms
of the treaty, within the past year, and was paid upon the 21st day of
September, 1874. In this connection I renew my recommendation, made at the
opening of the last session of Congress, that a special court be created to
hear and determine all claims of aliens against the United States arising
from acts committed against their persons or property during the
insurrection. It appears equitable that opportunity should be offered to
citizens of other states to present their claims, as well as to those
British subjects whose claims were not admissible under the late
commission, to the early decision of some competent tribunal. To this end I
recommend the necessary legislation to organize a court to dispose of all
claims of aliens of the nature referred to in an equitable and satisfactory
manner, and to relieve Congress and the Departments from the consideration
of these questions.

The legislation necessary to extend to the colony of Newfoundland certain
articles of the treaty of Washington of the 8th day of May, 1871, having
been had, a protocol to that effect was signed in behalf of the United
States and of Great Britain on the 28th day of May last, and was duly
proclaimed on the following day. A copy of the proclamation is submitted
herewith.

A copy of the report of the commissioner appointed under the act of March
19, 1872, for surveying and marking the boundary between the United States
and the British possessions from the Lake of the Woods to the summit of the
Rocky Mountains is herewith transmitted. I am happy to announce that the
field work of the commission has been completed, and the entire line from
the northwest corner of the Lake of the Woods to the summit of the Rocky
Mountains has been run and marked upon the surface of the earth. It is
believed that the amount remaining unexpended of the appropriation made at
the last session of Congress will be sufficient to complete the office
work. I recommend that the authority of Congress be given to the use of the
unexpended balance of the appropriation in the completion of the work of
the commission in making its report and preparing the necessary maps.

The court known as the Court of Commissioners of Alabama Claims, created by
an act of Congress of the last session, has organized and commenced its
work, and it is to be hoped that the claims admissible under the provisions
of the act may be speedily ascertained and paid.

It has been deemed advisable to exercise the discretion conferred upon the
Executive at the last session by accepting the conditions required by the
Government of Turkey for the privilege of allowing citizens of the United
States to hold real estate in the former country, and by assenting to a
certain change in the jurisdiction of courts in the latter. A copy of the
proclamation upon these subjects is herewith communicated.

There has been no material change in our relations with the independent
States of this hemisphere which were formerly under the dominion of Spain.
Marauding on the frontiers between Mexico and Texas still frequently takes
place, despite the vigilance of the civil and military authorities in that
quarter. The difficulty of checking such trespasses along the course of a
river of such length as the Rio Grande, and so often fordable, is obvious.
It is hoped that the efforts of this Government will be seconded by those
of Mexico to the effectual suppression of these acts of wrong.

From a report upon the condition of the business before the American and
Mexican Joint Claims Commission, made by the agent on the part of the
United States, and dated October 28, 1874, it appears that of the 1,017
claims filed on the part of citizens of the United States, 483 had been
finally decided and 75 were in the hands of the umpire, leaving 462 to be
disposed of; and of the 998 claims filed against the United States, 726 had
been finally decided, I was before the umpire, and 271 remained to be
disposed of. Since the date of such report other claims have been disposed
of, reducing somewhat the number still pending; and others have been passed
upon by the arbitrators. It has become apparent, in view of these figures
and of the fact that the work devolving on the umpire is particularly
laborious, that the commission will be unable to dispose of the entire
number of claims pending prior to the 1st day of February, 1875--the date
fixed for its expiration. Negotiations are pending looking to the securing
of the results of the decisions which have been reached and to a further
extension of the commission for a limited time, which it is confidently
hoped will suffice to bring all the business now before it to a final
close.

The strife in the Argentine Republic is to be deplored, both on account of
the parties thereto and from the probable effects on the interests of those
engaged in the trade to that quarter, of whom the United States are among
the principal. As yet, so far as I am aware, there has been no violation of
our neutrality rights, which, as well as our duties in that respect, it
shall be my endeavor to maintain and observe.

It is with regret I announce that no further payment has been received from
the Government of Venezuela on account of awards in favor of citizens of
the United States. Hopes have been entertained that if that Republic could
escape both foreign and civil war for a few years its great natural
resources would enable it to honor its obligations. Though it is now
understood to be at peace with other countries, a serious insurrection is
reported to be in progress in an important region of that Republic. This
may be taken advantage of as another reason to delay the payment of the
dues of our citizens.

The deplorable strife in Cuba continues without any marked change in the
relative advantages of the contending forces. The insurrection continues,
but Spain has gained no superiority. Six years of strife give to the
insurrection a significance which can not be denied. Its duration and the
tenacity of its adherence, together with the absence of manifested power of
suppression on the part of Spain, can not be controverted, and may make
some positive steps on the part of other powers a matter of self-necessity.
I had confidently hoped at this time to be able to announce the arrangement
of some of the important questions between this Government and that of
Spain, but the negotiations have been protracted. The unhappy intestine
dissensions of Spain command our profound sympathy, and must be accepted as
perhaps a cause of some delay. An early settlement, in part at least, of
the questions between the Governments is hoped. In the meantime, awaiting
the results of immediately pending negotiations, I defer a further and
fuller communication on the subject of the relations of this country and
Spain.

I have again to call the attention of Congress to the unsatisfactory
condition of the existing laws with reference to expatriation and the
election of nationality. Formerly, amid conflicting opinions and decisions,
it was difficult to exactly determine how far the doctrine of perpetual
allegiance was applicable to citizens of the United States. Congress by the
act of the 27th of July, 1868, asserted the abstract right of expatriation
as a fundamental principle of this Government. Notwithstanding such
assertion and the necessity of frequent application of the principle, no
legislation has been had defining what acts or formalities shall work
expatriation or when a citizen shall be deemed to have renounced or to have
lost his citizenship. The importance of such definition is obvious. The
representatives of the United States in foreign countries are continually
called upon to lend their aid and the protection of the United States to
persons concerning the good faith or the reality of whose citizenship there
is at least great question. In some cases the provisions of the treaties
furnish some guide; in others it seems left to the person claiming the
benefits of citizenship, while living in a foreign country, contributing in
no manner to the performance of the duties of a citizen of the United
States, and without intention at any time to return and undertake those
duties, to use the claims to citizenship of the United States simply as a
shield from the performance of the obligations of a citizen elsewhere.

The status of children born of American parents residing in a foreign
country, of American women who have married aliens, of American citizens
residing abroad where such question is not regulated by treaty, are all
sources of frequent difficulty and discussion. Legislation on these and
similar questions, and particularly defining when and under what
circumstances expatriation can be accomplished or is to be presumed, is
especially needed. In this connection I earnestly call the attention of
Congress to the difficulties arising from fraudulent naturalization. The
United States wisely, freely, and liberally offers its citizenship to all
who may come in good faith to reside within its limits on their complying
with certain prescribed reasonable and simple formalities and conditions.
Among the highest duties of the Government is that to afford firm,
sufficient, and equal protection to all its citizens, whether native born
or naturalized. Care should be taken that a right carrying with it such
support from the Government should not be fraudulently obtained, and should
be bestowed only upon full proof of a compliance with the law; and yet
frequent instances are brought to the attention of the Government of
illegal and fraudulent naturalization and of the unauthorized use of
certificates thus improperly obtained. In some cases the fraudulent
character of the naturalization has appeared upon the face of the
certificate itself; in others examination discloses that the holder had not
complied with the law, and in others certificates have been obtained where
the persons holding them not only were not entitled to be naturalized, but
had not even been within the United States at the time of the pretended
naturalization. Instances of each of these classes of fraud are discovered
at our legations, where the certificates of naturalization are presented
either for the purpose of obtaining passports or in demanding the
protection of the legation. When the fraud is apparent on the face of such
certificates, they are taken up by the representatives of the Government
and forwarded to the Department of State. But even then the record of the
court in which the fraudulent naturalization occurred remains, and
duplicate certificates are readily obtainable. Upon the presentation of
these for the issue of passports or in demanding protection of the
Government, the fraud sometimes escapes notice, and such certificates are
not infrequently used in transactions of business to the deception and
injury of innocent parties. Without placing any additional obstacles in the
way of the obtainment of citizenship by the worthy and well-intentioned
foreigner who comes in good faith to cast his lot with ours, I earnestly
recommend further legislation to punish fraudulent naturalization and to
secure the ready cancellation of the record of every naturalization made in
fraud.

Since my last annual message the exchange has been made of the ratification
of treaties of extradition with Belgium, Ecuador, Peru, and Salvador; also
of a treaty of commerce and navigation with Peru, and one of commerce and
consular privileges with Salvador; all of which have been duly proclaimed,
as has also a declaration with Russia with reference to trade-marks.

The report of the Secretary of the Treasury, which by law is made directly
to Congress, and forms no part of this message, will show the receipts and
expenditures of the Government for the last fiscal year, the amount
received from each source of revenue, and the amount paid out for each of
the Departments of Government. It will be observed from this report that
the amount of receipts over expenditures has been but $2,344,882.30 for the
fiscal year ending June 30, 1874, and that for the current fiscal year the
estimated receipts over expenditures will not much exceed $9,000,000. In
view of the large national debt existing and the obligation to add 1 per
cent per annum to the sinking fund, a sum amounting now to over $34,000,000
per annum, I submit whether revenues should not be increased or
expenditures diminished to reach this amount of surplus. Not to provide for
the sinking fund is a partial failure to comply with the contracts and
obligations of the Government. At the last session of Congress a very
considerable reduction was made in rates of taxation and in the number of
articles submitted to taxation; the question may well be asked, whether or
not, in some instances, unwisely. In connection with this subject, too, I
venture the opinion that the means of collecting the revenue, especially
from imports, have been so embarrassed by legislation as to make it
questionable whether or not large amounts are not lost by failure to
collect, to the direct loss of the Treasury and to the prejudice of the
interests of honest importers and taxpayers.

The Secretary of the Treasury in his report favors legislation looking to
an early return to specie payments, thus supporting views previously
expressed in this message. He also recommends economy in appropriations;
calls attention to the loss of revenue from repealing the tax on tea and
coffee, without benefit to the consumer; recommends an increase of 10 cents
a gallon on whisky, and, further, that no modification be made in the
banking and currency bill passed at the last session of Congress, unless
modification should become necessary by reason of the adoption of measures
for returning to specie payments. In these recommendations I cordially
join.

I would suggest to Congress the propriety of readjusting the tariff so as
to increase the revenue, and at the same time decrease the number of
articles upon which duties are levied. Those articles which enter into our
manufactures and are not produced at home, it seems to me, should be
entered free. Those articles of manufacture which we produce a constituent
part of, but do not produce the whole, that part which we do not produce
should enter free also. I will instance fine wool, dyes, etc. These
articles must be imported to form a part of the manufacture of the higher
grades of woolen goods. Chemicals used as dyes, compounded in medicines,
and used in various ways in manufactures come under this class. The
introduction free of duty of such wools as we do not produce would
stimulate the manufacture of goods requiring the use of those we do
produce, and therefore would be a benefit to home production. There are
many articles entering into "home manufactures" which we do not produce
ourselves the tariff upon which increases the cost of producing the
manufactured article. All corrections in this regard are in the direction
of bringing labor and capital in harmony with each other and of supplying
one of the elements of prosperity so much needed.

The report of the Secretary of War herewith attached, and forming a part of
this message, gives all the information concerning the operations, wants,
and necessities of the Army, and contains many suggestions and
recommendations which I commend to your special attention.

There is no class of Government employees who are harder worked than the
Army--officers and men; none who perform their tasks more cheerfully and
efficiently and under circumstances of greater privations and hardships.

Legislation is desirable to render more efficient this branch of the public
service. All the recommendations of the Secretary of War I regard as
judicious, and I especially commend to your attention the following: The
consolidation of Government arsenals; the restoration of mileage to
officers traveling under orders; the exemption of money received from the
sale of subsistence stores from being covered into the Treasury; the use of
appropriations for the purchase of subsistence stores without waiting for
the beginning of the fiscal year for which the appropriation is made; for
additional appropriations for the collection of torpedo material; for
increased appropriations for the manufacture of arms; for relieving the
various States from indebtedness for arms charged to them during the
rebellion; for dropping officers from the rolls of the Army without trial
for the offense of drawing pay more than once for the same period; for the
discouragement of the plan to pay soldiers by cheek, and for the
establishment of a professorship of rhetoric and English literature at West
Point. The reasons for these recommendations are obvious, and are set forth
sufficiently in the reports attached. I also recommend that the status of
the staff corps of the Army be fixed, where this has not already been done,
so that promotions may be made and vacancies filled as they occur in each
grade when reduced below the number to be fixed by law. The necessity for
such legislation is specially felt now in the Pay Department. The number of
officers in that department is below the number adequate to the performance
of the duties required of them by law.

The efficiency of the Navy has been largely increased during the last year.
Under the impulse of the foreign complications which threatened us at the
commencement of the last session of Congress, most of our efficient wooden
ships were put in condition for immediate service, and the repairs of our
ironclad fleet were pushed with the utmost vigor. The result is that most
of these are now in an effective state and need only to be manned and put
in commission to go at once into service.

Some of the new sloops authorized by Congress are already in commission,
and most of the remainder are launched and wait only the completion of
their machinery to enable them to take their places as part of our
effective force.

Two iron torpedo ships have been completed during the last year, and four
of our large double-turreted ironclads are now undergoing repairs. When
these are finished, everything that is useful of our Navy, as now
authorized, will be in condition for service, and with the advance in the
science of torpedo warfare the American Navy, comparatively small as it is,
will be found at any time powerful for the purposes of a peaceful nation.

Much has been accomplished during the year in aid of science and to
increase the sum of general knowledge and further the interests of commerce
and civilization. Extensive and much-needed soundings have been made for
hydrographic purposes and to fix the proper routes of ocean telegraphs.
Further surveys of the great Isthmus have been undertaken and completed,
and two vessels of the Navy are now employed, in conjunction with those of
England, France, Germany, and Russia, in observations connected with the
transit of Venus, so useful and interesting to the scientific world.

The estimates for this branch of the public service do not differ
materially from those of last year, those for the general support of the
service being somewhat less and those for permanent improvements at the
various stations rather larger than the corresponding estimate made a year
ago. The regular maintenance and a steady increase in the efficiency of
this most important arm in proportion to the growth of our maritime
intercourse and interests is recommended to the attention of Congress.

The use of the Navy in time of peace might be further utilized by a direct
authorization of the employment of naval vessels in explorations and
surveys of the supposed navigable waters of other nationalities on this
continent, especially the tributaries of the two great rivers of South
America, the Orinoco and the Amazon. Nothing prevents, under existing laws,
such exploration, except that expenditures must be made in such expeditions
beyond those usually provided for in the appropriations. The field
designated is unquestionably one of interest and one capable of large
development of commercial interests--advantageous to the peoples reached
and to those who may establish relations with them.

Education of the people entitled to exercise the right of franchise I
regard essential to general prosperity everywhere, and especially so in
republics, where birth, education, or previous condition does not enter
into account in giving suffrage. Next to the public school, the post-office
is the great agent of education over our vast territory. The rapidity with
which new sections are being settled, thus increasing the carrying of mails
in a more rapid ratio than the increase of receipts, is not alarming. The
report of the Postmaster-General herewith attached shows that there was an
increase of revenue in his Department in 1873 over the previous year of
$1,674,411, and an increase of cost of carrying the mails and paying
employees of $3,041,468.91. The report of the Postmaster-General gives
interesting statistics of his Department, and compares them with the
corresponding statistics of a year ago, showing a growth in every branch of
the Department.

A postal convention has been concluded with New South Wales, an exchange of
postal cards established with Switzerland, and the negotiations pending for
several years past with France have been terminated in a convention with
that country, which went into effect last August.

An international postal congress was convened in Berne, Switzerland, in
September last, at which the United States was represented by an officer of
the Post-Office Department of much experience and of qualification for the
position. A convention for the establishment of an international postal
union was agreed upon and signed by the delegates of the countries
represented, subject to the approval of the proper authorities of those
countries.

I respectfully direct your attention to the report of the
Postmaster-General and to his suggestions in regard to an equitable
adjustment of the question of compensation to railroads for carrying the
mails.

Your attention will be drawn to the unsettled condition of affairs in some
of the Southern States.

On the 14th of September last the governor of Louisiana called upon me, as
provided by the Constitution and laws of the United States, to aid in
suppressing domestic violence in that State. This call was made in view of
a proclamation issued on that day by D. B. Penn, claiming that he was
elected lieutenant-governor in 1872, and calling upon the militia of the
State to arm, assemble, and drive from power the usurpers, as he designated
the officers of the State government. On the next day I issued my
proclamation commanding the insurgents to disperse within five days from
the date thereof, and subsequently learned that on that day they had taken
forcible possession of the statehouse. Steps were taken by me to support
the existing and recognized State government, but before the expiration of
the five days the insurrectionary movement was practically abandoned, and
the officers of the State government, with some minor exceptions, resumed
their powers and duties. Considering that the present State administration
of Louisiana has been the only government in that State for nearly two
years; that it has been tacitly acknowledged and acquiesced in as such by
Congress, and more than once expressly recognized by me, I regarded it as
my clear duty, when legally called upon for that purpose, to prevent its
overthrow by an armed mob under pretense of fraud and irregularity in the
election of 1872. I have heretofore called the attention of Congress to
this subject, stating that on account of the frauds and forgeries committed
at said election, and because it appears that the returns thereof were
never legally canvassed, it was impossible to tell thereby who were chosen;
but from the best sources of information at my command I have always
believed that the present State officers received a majority of the legal
votes actually cast at that election. I repeat what I said in my special
message of February 23, 1873, that in the event of no action by Congress I
must continue to recognize the government heretofore recognized by me.

I regret to say that with preparations for the late election decided
indications appeared in some localities in the Southern States of a
determination, by acts of violence and intimidation, to deprive citizens of
the freedom of the ballot because of their political opinions. Bands of
men, masked and armed, made their appearance; White Leagues and other
societies were formed; large quantities of arms and ammunition were
imported and distributed to these organizations; military drills, with
menacing demonstrations, were held, and with all these murders enough were
committed to spread terror among those whose political action was to be
suppressed, if possible, by these intolerant and criminal proceedings. In
some places colored laborers were compelled to vote according to the wishes
of their employers, under threats of discharge if they acted otherwise; and
there are too many instances in which, when these threats were disregarded,
they were remorselessly executed by those who made them. I understand that
the fifteenth amendment to the Constitution was made to prevent this and a
like state of things, and the act of May 31, 1870, with amendments, was
passed to enforce its provisions, the object of both being to guarantee to
all citizens the right to vote and to protect them in the free enjoyment of
that right. Enjoined by the Constitution "to take care that the laws be
faithfully executed," and convinced by undoubted evidence that violations
of said act had been committed and that a widespread and flagrant disregard
of it was contemplated, the proper officers were instructed to prosecute
the offenders, and troops were stationed at convenient points to aid these
officers, if necessary, in the performance of their official duties.
Complaints are made of this interference by Federal authority; but if said
amendment and act do not provide for such interference under the
circumstances as above stated, then they are without meaning, force, or
effect, and the whole scheme of colored enfranchisement is worse than
mockery and little better than a crime. Possibly Congress may find it due
to truth and justice to ascertain, by means of a committee, whether the
alleged wrongs to colored citizens for political purposes are real or the
reports thereof were manufactured for the occasion.

The whole number of troops in the States of Louisiana, Alabama, Georgia,
Florida, South Carolina, North Carolina, Kentucky, Tennessee, Arkansas,
Mississippi, Maryland, and Virginia at the time of the election was 4,082.
This embraces the garrisons of all the forts from the Delaware to the Gulf
of Mexico.

Another trouble has arisen in Arkansas. Article 13 of the constitution of
that State (which was adopted in 1868, and upon the approval of which by
Congress the State was restored to representation as one of the States of
the Union) provides in effect that before any amendments proposed to this
constitution shall become a part thereof they shall be passed by two
successive assemblies and then submitted to and ratified by a majority of
the electors of the State voting thereon. On the 11th of May, 1874, the
governor convened an extra session of the general assembly of the State,
which on the 18th of the same month passed an act providing for a
convention to frame a new constitution. Pursuant to this act, and at an
election held on the 30th of June, 1874, the convention was approved, and
delegates were chosen thereto, who assembled on the 14th of last July and
framed a new constitution, the schedule of which provided for the election
of an entire new set of State officers in a manner contrary to the then
existing election laws of the State. On the 13th of October, 1874, this
constitution, as therein provided, was submitted to the people for their
approval or rejection, and according to the election returns was approved
by a large majority of those qualified to vote thereon; and at the same
election persons were chosen to fill all the State, county, and township
offices. The governor elected in 1872 for the term of four years turned
over his office to the governor chosen under the new constitution,
whereupon the lieutenant-governor, also elected in 1872 for a term of four
years, claiming to act as governor, and alleging that said proceedings by
which the new constitution was made and a new set of officers elected were
unconstitutional, illegal, and void, called upon me, as provided in section
4, Article IV, of the Constitution, to protect the State against domestic
violence. As Congress is now investigating the political affairs of
Arkansas, I have declined to interfere.

The whole subject of Executive interference with the affairs of a State is
repugnant to public opinion, to the feelings of those who, from their
official capacity, must be used in such interposition, and to him or those
who must direct. Unless most clearly on the side of law, such interference
becomes a crime; with the law to support it, it is condemned without a
heating. I desire, therefore, that all necessity for Executive direction in
local affairs may become unnecessary and obsolete. I invite the attention,
not of Congress, but of the people of the United States, to the causes and
effects of these unhappy questions. Is there not a disposition on one side
to magnify wrongs and outrages, and on the other side to belittle them or
justify them? If public opinion could be directed to a correct survey of
what is and to rebuking wrong and aiding the proper authorities in
punishing it, a better state of feeling would be inculcated, and the sooner
we would have that peace which would leave the States free indeed to
regulate their own domestic affairs. I believe on the part of our citizens
of the Southern States--the better part of them--there is a disposition to
be law abiding, and to do no violence either to individuals or to the laws
existing. But do they do right in ignoring the existence of violence and
bloodshed in resistance to constituted authority? I sympathize with their
prostrate condition, and would do all in my power to relieve them,
acknowledging that in some instances they have had most trying governments
to live under, and very oppressive ones in the way of taxation for nominal
improvements, not giving benefits equal to the hardships imposed. But can
they proclaim themselves entirely irresponsible for this condition? They
can not. Violence has been rampant in some localities, and has either been
justified or denied by those who could have prevented it. The theory is
even raised that there is to be no further interference on the part of the
General Government to protect citizens within a State where the State
authorities fail to give protection. This is a great mistake. While I
remain Executive all the laws of Congress and the provisions of the
Constitution, including the recent amendments added thereto, will be
enforced with rigor, but with regret that they should have added one jot or
tittle to Executive duties or powers. Let there be fairness in the
discussion of Southern questions, the advocates of both or all political
parties giving honest, truthful reports of occurrences, condemning the
wrong and upholding the tight, and soon all will be well. Under existing
conditions the negro votes the Republican ticket because he knows his
friends are of that party. Many a good citizen votes the opposite, not
because he agrees with the great principles of state which separate
parties, but because, generally, he is opposed to negro rule. This is a
most delusive cry. Treat the negro as a citizen and a voter, as he is and
must remain, and soon parties will be divided, not on the color line, but
on principle. Then we shall have no complaint of sectional interference.

The report of the Attorney-General contains valuable recommendations
relating to the administration of justice in the courts of the United
States, to which I invite your attention.

I respectfully suggest to Congress the propriety of increasing the number
of judicial districts in the United States to eleven (the present number
being nine) and the creation of two additional judgeships. The territory to
be traversed by the circuit judges is so great and the business of the
courts so steadily increasing that it is growing more and more impossible
for them to keep up with the business requiring their attention. Whether
this would involve the necessity of adding two more justices of the Supreme
Court to the present number I submit to the judgment of Congress.

The attention of Congress is invited to the report of the Secretary of the
Interior and to the legislation asked for by him. The domestic interests of
the people are more intimately connected with this Department than with
either of the other Departments of Government. Its duties have been added
to from time to time until they have become so onerous that without the
most perfect system and order it will be impossible for any Secretary of
the Interior to keep trace of all official transactions having his sanction
and done in his name, and for which he is held personally responsible.

The policy adopted for the management of Indian affairs, known as the peace
policy, has been adhered to with most beneficial results. It is confidently
hoped that a few years more will relieve our frontiers from danger of
Indian depredations.

I commend the recommendation of the Secretary for the extension of the
homestead laws to the Indians and for some sort of Territorial government
for the Indian Territory. A great majority of the Indians occupying this
Territory are believed yet to be incapable of maintaining their rights
against the more civilized and enlightened white man. Any Territorial form
of government given them, therefore, should protect them in their homes and
property for a period of at least twenty years, and before its final
adoption should be ratified by a majority of those affected.

The report of the Secretary of the Interior herewith attached gives much
interesting statistical information, which I abstain from giving an
abstract of, but refer you to the report itself.

The act of Congress providing the oath which pensioners must subscribe to
before drawing their pensions cuts off from this bounty a few survivors of
the War of 1812 residing in the Southern States. I recommend the
restoration of this bounty to all such. The number of persons whose names
would thus be restored to the list of pensioners is not large. They are all
old persons, who could have taken no part in the rebellion, and the
services for which they were awarded pensions were in defense of the whole
country.

The report of the Commissioner of Agriculture herewith contains suggestions
of much interest to the general public, and refers to the sly approaching
Centennial and the part his Department is ready to take in it. I feel that
the nation at large is interested in having this exposition a success, and
commend to Congress such action as will secure a greater general interest
in it. Already many foreign nations have signified their intention to be
represented at it, and it may be expected that every civilized nation will
be represented.

The rules adopted to improve the civil service of the Government have been
adhered to as closely as has been practicable with the opposition with
which they meet. The effect, I believe, has been beneficial on the whole,
and has tended to the elevation of the service. But it is impracticable to
maintain them without direct and positive support of Congress. Generally
the support which this reform receives is from those who give it their
support only to find fault when the rules are apparently departed from.
Removals from office without preferring charges against parties removed are
frequently cited as departures from the rules adopted, and the retention of
those against whom charges are made by irresponsible persons and without
good grounds is also often condemned as a violation of them. Under these
circumstances, therefore, I announce that if Congress adjourns without
positive legislation on the subject of "civil-service reform" I will regard
such action as a disapproval of the system, and will abandon it, except so
far as to require examinations for certain appointees, to determine their
fitness. Competitive examinations will be abandoned.

The gentlemen who have given their services, without compensation, as
members of the board to devise rules and regulations for the government of
the civil service of the country have shown much zeal and earnestness in
their work, and to them, as well as to myself, it will be a source of
mortification if it is to be thrown away. But I repeat that it is
impossible to carry this system to a successful issue without general
approval and assistance and positive law to support it.

I have stated that three elements of prosperity to the nation--capital,
labor, skilled and unskilled, and products of the soil--still remain with
us. To direct the employment of these is a problem deserving the most
serious attention of Congress. If employment can be given to all the labor
offering itself, prosperity necessarily follows. I have expressed the
opinion, and repeat it, that the first requisite to the accomplishment of
this end is the substitution of a sound currency in place of one of a
fluctuating value. This secured, there are many interests that might be
fostered to the great profit of both labor and capital. How to induce
capital to employ labor is the question. The subject of cheap
transportation has occupied the attention of Congress. Much new light on
this question will without doubt be given by the committee appointed by the
last Congress to investigate and report upon this subject.

A revival of shipbuilding, and particularly of iron steamship building, is
of vast importance to our national prosperity. The United States is now
paying over $100,000,000 per annum for freights and passage on foreign
ships--to be carried abroad and expended in the employment and support of
other peoples--beyond a fair percentage of what should go to foreign
vessels, estimating on the tonnage and travel of each respectively. It is
to be regretted that this disparity in the carrying trade exists, and to
correct it I would be willing to see a great departure from the usual
course of Government in supporting what might usually be termed private
enterprise. I would not suggest as a remedy direct subsidy to American
steamship lines, but I would suggest the direct offer of ample compensation
for carrying the mails between Atlantic Seaboard cities and the Continent
on American-owned and American-built steamers, and would extend this
liberality to vessels carrying the mails to South American States and to
Central America and Mexico, and would pursue the same policy from our
Pacific seaports to foreign seaports on the Pacific. It might be demanded
that vessels built for this service should come up to a standard fixed by
legislation in tonnage, speed, and all other qualities, looking to the
possibility of Government requiring them at some time for war purposes. The
right also of taking possession of them in such emergency should be
guarded.

I offer these suggestions, believing them worthy of consideration, in all
seriousness, affecting all sections and all interests alike. If anything
better can be done to direct the country into a course of general
prosperity, no one will be more ready than I to second the plan.

Forwarded herewith will be found the report of the commissioners appointed
under an act of Congress approved June 20, 1874, to wind up the affairs of
the District government. It will be seen from the report that the net debt
of the District of Columbia, less securities on hand and available, is:

Bonded debt issued prior to July 1, 1874 - - $8,883,940.93

3.65 bonds, act of Congress June 20, 1874 - - 2,088,168.73

Certificates of the board of audit - - 4,770,558.45

- -

***

State of the Union Address
Ulysses S. Grant
December 7, 1875

To the Senate and House of Representatives:

In submitting my seventh annual message to Congress, in this centennial
year of our national existence as a free and independent people, it affords
me great pleasure to recur to the advancement that has been made from the
time of the colonies, one hundred years ago. We were then a people
numbering only 3,000,000. Now we number more than 40,000,000. Then
industries were confined almost exclusively to the tillage of the soil. Now
manufactories absorb much of the labor of the country.

Our liberties remain unimpaired; the bondmen have been freed from slavery;
we have become possessed of the respect, if not the friendship, of all
civilized nations. Our progress has been great in all the arts--in science,
agriculture, commerce, navigation, mining, mechanics, law, medicine, etc.;
and in general education the progress is likewise encouraging. Our thirteen
States have become thirty-eight, including Colorado (which has taken the
initiatory steps to become a State), and eight Territories, including the
Indian Territory and Alaska, and excluding Colorado, making a territory
extending from the Atlantic to the Pacific. On the south we have extended
to the Gulf of Mexico, and in the west from the Mississippi to the
Pacific.

One hundred years ago the cotton gin, the steamship, the railroad, the
telegraph, the reaping, sewing, and modern printing machines, and numerous
other inventions of scarcely less value to our business and happiness were
entirely unknown.

In 1776 manufactories scarcely existed even in name in all this vast
territory. In 1870 more than 2,000,000 persons were employed in
manufactories, producing more than $2,100,000,000 of products in amount
annually, nearly equal to our national debt. From nearly the whole of the
population of 1776 being engaged in the one occupation of agriculture, in
1870 so numerous and diversified had become the occupation of our people
that less than 6,000,000 out of more than 40,000,000 were so engaged. The
extraordinary effect produced in our country by a resort to diversified
occupations has built a market for the products of fertile lands distant
from the seaboard and the markets of the world.

The American system of locating various and extensive manufactories next to
the plow and the pasture, and adding connecting railroads and steamboats,
has produced in our distant interior country a result noticeable by the
intelligent portions of all commercial nations. The ingenuity and skill of
American mechanics have been demonstrated at home and abroad in a manner
most flattering to their pride. But for the extraordinary genius and
ability of our mechanics, the achievements of our agriculturists,
manufacturers, and transporters throughout the country would have been
impossible of attainment.

The progress of the miner has also been great. Of coal our production has
small; now many millions of tons are mined annually. So with iron, which
formed scarcely an appreciable part of our products half a century ago, we
now produce more than the world consumed at the beginning of our national
existence. Lead, zinc, and copper, from being articles of import, we may
expect to be large exporters of in the near future. The development of gold
and silver mines in the United States and Territories has not only been
remarkable, but has had a large influence upon the business of all
commercial nations. Our merchants in the last hundred years have had a
success and have established a reputation for enterprise, sagacity,
progress, and integrity unsurpassed by peoples of older nationalities. This
"good name" is not confined to their homes, but goes out upon every sea and
into every port where commerce enters. With equal pride we can point to our
progress in all of the learned professions.

As we are now about to enter upon our second centennial--commenting our
manhood as a nation--it is well to look back upon the past and study what
will be best to preserve and advance our future greatness From the fall of
Adam for his transgression to the present day no nation has ever been free
from threatened danger to its prosperity and happiness. We should look to
the dangers threatening us, and remedy them so far as lies in our power. We
are a republic whereof one man is as good as another before the law. Under
such a form of government it is of the greatest importance that all should
be possessed of education and intelligence enough to cast a vote with a
right understanding of its meaning. A large association of ignorant men can
not for any considerable period oppose a successful resistance to tyranny
and oppression from the educated few, but will inevitably sink into
acquiescence to the will of intelligence, whether directed by the demagogue
or by priestcraft. Hence the education of the masses becomes of the first
necessity for the preservation of our institutions. They are worth
preserving, because they have secured the greatest good to the greatest
proportion of the population of any form of government yet devised. All
other forms of government approach it just in proportion to the general
diffusion of education and independence of thought and action. As the
primary step, therefore, to our advancement in all that has marked our
progress in the past century, I suggest for your earnest consideration, and
most earnestly recommend it, that a constitutional amendment be submitted
to the legislatures of the several States for ratification, making it the
duty of each of the several States to establish and forever maintain free
public schools adequate to the education of all the children in the
rudimentary branches within their respective limits, irrespective of sex,
color, birthplace, or religions; forbidding the teaching in said schools of
religious, atheistic, or pagan tenets; and prohibiting the granting of any
school funds or school taxes, or any part thereof, either by legislative,
municipal, or other authority, for the benefit or in aid, directly or
indirectly, of any religious sect or denomination, or in aid or for the
benefit of any other object of any nature or kind whatever.

In connection with this important question I would also call your attention
to the importance of correcting an evil that, if permitted to continue,
will probably lead to great trouble in our land before the close of the
nineteenth century. It is the accumulation of vast amounts of untaxed
church property.

In 1850, I believe, the church property of the United States which paid no
tax, municipal or State, amounted to about $83,000,000. In 1860 the amount
had doubled; in 1875 it is about $1,000,000,000. By 1900, without check, it
is safe to say this property will reach a sum exceeding $3,000,000,000. So
vast a sum, receiving all the protection and benefits of Government without
bearing its proportion of the burdens and expenses of the same, will not be
looked upon acquiescently by those who have to pay the taxes. In a growing
country, where real estate enhances so rapidly with time as in the United
States, there is scarcely a limit to the wealth that may be acquired by
corporations, religious or otherwise, if allowed to retain real estate
without taxation. The contemplation of so vast a property as here alluded
to, without taxation, may lead to sequestration without constitutional
authority and through blood.

I would suggest the taxation of all property equally, whether church or
corporation, exempting only the last resting place of the dead and
possibly, with proper restrictions, church edifices.

Our relations with most of the foreign powers continue on a satisfactory
and friendly footing.

Increased intercourse, the extension of commerce, and the cultivation of
mutual interests have steadily improved our relations with the large
majority of the powers of the world, rendering practicable the peaceful
solution of questions which from time to time necessarily arise, leaving
few which demand extended or particular notice.

The correspondence of the Department of State with our diplomatic
representatives abroad is transmitted herewith.

I am happy to announce the passage of an act by the General Cortes of
Portugal, proclaimed since the adjournment of Congress, for the abolition
of servitude in the Portuguese colonies. It is to be hoped that such
legislation may be another step toward the great consummation to be
reached, when no man shall be permitted, directly or indirectly, under any
guise, excuse, or form of law, to hold his fellow-man in bondage. I am of
opinion also that it is the duty of the United States, as contributing
toward that end, and required by the spirit of the age in which we live, to
provide by suitable legislation that no citizen of the United States shall
hold slaves as property in any other country or be interested therein.

Chile has made reparation in the case of the whale ship Good Return, seized
without sufficient cause upward of forty years ago. Though she had hitherto
denied her accountability, the denial was never acquiesced in by this
Government, and the justice of the claim has been so earnestly contended
for that it has been gratifying that she should have at last acknowledged
it.

The arbitrator in the case of the United States steamer Montijo, for the
seizure and detention of which the Government of the United States of
Colombia was held accountable, has decided in favor of the claim. This
decision has settled a question which had been pending for several years,
and which, while it continued open, might more or less disturb the good
understanding which it is desirable should be maintained between the two
Republics.

A reciprocity treaty with the King of the Hawaiian Islands was concluded
some months since. As it contains a stipulation that it shall not take
effect until Congress shall enact the proper legislation for that purpose,
copies of the instrument are herewith submitted, in order that, if such
should be the pleasure of Congress, the necessary legislation upon the
subject may be adopted.

In March last an arrangement was made, through Mr. Cushing, our minister in
Madrid, with the Spanish Government for the payment by the latter to the
United States of the sum of $80,000 in coin, for the purpose of the relief
of the families or persons of the ship's company and certain passengers of
the Virginius. This sum was to have been paid in three installments at two
months each. It is due to the Spanish Government that I should state that
the payments were fully and spontaneously anticipated by that Government,
and that the whole amount was paid within but a few days more than two
months from the date of the agreement, a copy of which is herewith
transmitted. In pursuance of the terms of the adjustment, I have directed
the distribution of the amount among the parties entitled thereto,
including the ship's company and such of the passengers as were American
citizens. Payments are made accordingly, on the application by the parties
entitled thereto.

The past year has furnished no evidence of an approaching termination of
the ruinous conflict which has been raging for seven years in the
neighboring island of Cuba. The same disregard of the laws of civilized
warfare and of the just demands of humanity which has heretofore called
forth expressions of condemnation from the nations of Christendom has
continued to blacken the sad scene. Desolation, ruin, and pillage are
pervading the rich fields of one of the most fertile and productive regions
of the earth, and the incendiary's torch, firing plantations and valuable
factories and buildings, is the agent marking the alternate advance or
retreat of contending parties.

The protracted continuance of this strife seriously affects the interests
of all commercial nations, but those of the United States more than others,
by reason of close proximity, its larger trade and intercourse with Cuba,
and the frequent and intimate personal and social relations which have
grown up between its citizens and those of the island. Moreover, the
property of our citizens in Cuba is large, and is rendered insecure and
depreciated in value and in capacity of production by the continuance of
the strife and the unnatural mode of its conduct. The same is true,
differing only in degree, with respect to the interests and people of other
nations; and the absence of any reasonable assurance of a near termination
of the conflict must of necessity soon compel the States thus suffering to
consider what the interests of their own people and their duty toward
themselves may demand.

I have hoped that Spain would be enabled to establish peace in her colony,
to afford security to the property and the interests of our citizens, and
allow legitimate scope to trade and commerce and the natural productions of
the island. Because of this hope, and from an extreme reluctance to
interfere in the most remote manner in the affairs of another and a
friendly nation, especially of one whose sympathy and friendship in the
struggling infancy of our own existence must ever be remembered with
gratitude, I have patiently and anxiously waited the progress of events.
Our own civil conflict is too recent for us not to consider the
difficulties which surround a government distracted by a dynastic rebellion
at home at the same time that it has to cope with a separate insurrection
in a distant colony. But whatever causes may have produced the situation
which so grievously affects our interests, it exists, with all its
attendant evils operating directly upon this country and its people. Thus
far all the efforts of Spain have proved abortive, and time has marked no
improvement in the situation. The armed bands of either side now occupy
nearly the same ground as in the past, with the difference, from time to
time, of more lives sacrificed, more property destroyed, and wider extents
of fertile and productive fields and more and more of valuable property
constantly wantonly sacrificed to the incendiary's torch.

In contests of this nature, where a considerable body of people who have
attempted to free themselves of the control of the superior government have
reached such point in occupation of territory, in power, and in general
organization as to constitute in fact a body politic; having a government
in substance as well as in name; possessed of the elements of stability and
equipped with the machinery for the administration of internal policy and
the execution of its laws; prepared and able to administer justice at home,
as well as in its dealings with other powers, it is within the province of
those other powers to recognize its existence as a new and independent
nation. In such cases other nations simply deal with an actually existing
condition of things, and recognize as one of the powers of the earth that
body politic which, possessing the necessary elements, has in fact become a
new power. In a word, the creation of a new state is a fact.

To establish the condition of things essential to the recognition of this
fact there must be a people occupying a known territory, united under some
known and defined form of government, acknowledged by those subject
thereto, in which the functions of government are administered by usual
methods, competent to mete out justice to citizens and strangers, to afford
remedies for public and for private wrongs, and able to assume the
correlative international obligations and capable of performing the
corresponding international duties resulting from its acquisition of the
rights of sovereignty. A power should exist complete in its organization,
ready to take and able to maintain its place among the nations of the
earth.

While conscious that the insurrection in Cuba has shown a strength and
endurance which make it at least doubtful whether it be in the power of
Spain to subdue it, it seems unquestionable that no such civil organization
exists which may be recognized as an independent government capable of
performing its international obligations and entitled to be treated as one
of the powers of the earth. A recognition under such circumstances would be
inconsistent with the facts, and would compel the power granting it soon to
support by force the government to which it had really given its only claim
of existence. In my judgment the United States should adhere to the policy
and the principles which have heretofore been its sure and safe guides in
like contests between revolted colonies and their mother country, and,
acting only upon the clearest evidence, should avoid any possibility of
suspicion or of imputation.

A recognition of the independence of Cuba being, in my opinion,
impracticable and indefensible, the question which next presents itself is
that of the recognition of belligerent rights in the parties to the
contest.

In a former message to Congress I had occasion to consider this question,
and reached the conclusion that the conflict in Cuba, dreadful and
devastating as were its incidents, did not rise to the fearful dignity of
war. Regarding it now, after this lapse of time, I am unable to see that
any notable success or any marked or real advance on the part of the
insurgents has essentially changed the character of the contest. It has
acquired greater age, but not greater or more formidable proportions. It is
possible that the acts of foreign powers, and even acts of Spain herself,
of this very nature, might be pointed to in defense of such recognition.
But now, as in its past history, the United States should carefully avoid
the false lights which might lead it into the mazes of doubtful law and of
questionable propriety, and adhere rigidly and sternly to the rule, which
has been its guide, of doing only that which is right and honest and of
good report. The question of according or of withholding rights of
belligerency must be judged in every case in view of the particular
attending facts. Unless justified by necessity, it is always, and justly,
regarded as an unfriendly act and a gratuitous demonstration of moral
support to the rebellion. It is necessary, and it is required, when the
interests and rights of another government or of its people are so far
affected by a pending civil conflict as to require a definition of its
relations to the parties thereto. But this conflict must be one which will
be recognized in the sense of international law as war. Belligerence, too,
is a fact. The mere existence of contending armed bodies and their
occasional conflicts do not constitute war in the sense referred to.
Applying to the existing condition of affairs in Cuba the tests recognized
by publicists and writers on international law, and which have been
observed by nations of dignity, honesty, and power when free from sensitive
or selfish and unworthy motives, I fail to find in the insurrection the
existence of such a substantial political organization, real, palpable, and
manifest to the world, having the forms and capable of the ordinary
functions of government toward its own people and to other states, with
courts for the administration of justice, with a local habitation,
possessing such organization of force, such material, such occupation of
territory, as to take the contest out of the category of a mere rebellious
insurrection or occasional skirmishes and place it on the terrible footing
of war, to which a recognition of belligerency would aim to elevate it. The
contest, moreover, is solely on land; the insurrection has not possessed
itself of a single seaport whence it may send forth its flag, nor has it
any means of communication with foreign powers except through the military
lines of its adversaries. No apprehension of any of those sudden and
difficult complications which a war upon the ocean is apt to precipitate
upon the vessels, both commercial and national, and upon the consular
officers of other powers calls for the definition of their relations to the
parties to the contest. Considered as a question of expediency, I regard
the accordance of belligerent rights still to be as unwise and premature as
I regard it to be, at present, indefensible as a measure of right. Such
recognition entails upon the country according the rights which flow from
it difficult and complicated duties, and requires the exaction from the
contending parties of the strict observance of their rights and
obligations; it confers the right of search upon the high seas by vessels
of both parties; it would subject the carrying of arms and munitions of
war, which now may be transported freely and without interruption in the
vessels of the United States, to detention and to possible seizure; it
would give rise to countless vexatious questions, would release the parent
Government from responsibility for acts done by the insurgents, and would
invest Spain with the right to exercise the supervision recognized by our
treaty of 1795 over our commerce on the high seas, a very large part of
which, in its traffic between the Atlantic and the Gulf States and between
all of them and the States on the Pacific, passes through the waters which
wash the shores of Cuba. The exercise of this supervision could scarce fail
to lead, if not to abuses, certainly to collisions perilous to the peaceful
relations of the two States. There can be little doubt to what result such
supervision would before long draw this nation. It would be unworthy of the
United States to inaugurate the possibilities of such result by measures of
questionable right or expediency or by any indirection. Apart from any
question of theoretical right, I am satisfied that while the accordance of
belligerent rights to the insurgents in Cuba might give them a hope and an
inducement to protract the struggle, it would be but a delusive hope, and
would not remove the evils which this Government and its people are
experiencing, but would draw the United States into complications which it
has waited long and already suffered much to avoid. The recognition of
independence or of belligerency being thus, in my judgment, equally
inadmissible, it remains to consider what course shall be adopted should
the conflict not soon be brought to an end by acts of the parties
themselves, and should the evils which result therefrom, affecting all
nations, and particularly the United States, continue. In such event I am
of opinion that other nations will be compelled to assume the
responsibility which devolves upon them, and to seriously consider the only
remaining measures possible--mediation and intervention, Owing, perhaps, to
the large expanse of water separating the island from the peninsula, the
want of harmony and of personal sympathy between the inhabitants of the
colony and those sent thither to rule them, and want of adaptation of the
ancient colonial system of Europe to the present times and to the ideas
which the events of the past century have developed, the contending parties
appear to have within themselves no depository of common confidence to
suggest wisdom when passion and excitement have their sway and to assume
the part of peacemaker. In this view in the earlier days of the contest the
good offices of the United States as a mediator were tendered in good
faith, without any selfish purpose, in the interest of humanity and in
sincere friendship for both parties, but were at the time declined by
Spain, with the declaration, nevertheless, that at a future time they would
be indispensable. No intimation has been received that in the opinion of
Spain that time has been reached. And yet the strife continues, with all
its dread horrors and all its injuries to the interests of the United
States and of other nations. Each party seems quite capable of working
great injury and damage to the other, as well as to all the relations and
interests dependent on the existence of peace in the island; but they seem
incapable of reaching any adjustment, and both have thus far failed of
achieving any success whereby one party shall possess and control the
island to the exclusion of the other. Under these circumstances the agency
of others, either by mediation or by intervention, seems to be the only
alternative which must, sooner or later, be invoked for the termination of
the strife. At the same time, while thus impressed I do not at this time
recommend the adoption of any measure of intervention. I shall be ready at
all times, and as the equal friend of both parties, to respond to a
suggestion that the good offices of the United States will be acceptable to
aid in bringing about a peace honorable to both. It is due to Spain, so far
as this Government is concerned, that the agency of a third power, to which
I have adverted, shall be adopted only as a last expedient. Had it been the
desire of the United States to interfere in the affairs of Cuba, repeated
opportunities for so doing have been presented within the last few years;
but we have remained passive, and have performed our whole duty and all
international obligations to Spain with friendship, fairness, and fidelity,
and with a spirit of patience and forbearance which negatives every
possible suggestion of desire to interfere or to add to the difficulties
with which she has been surrounded.

The Government of Spain has recently submitted to our minister at Madrid
certain proposals which it is hoped may be found to be the basis, if not
the actual submission, of terms to meet the requirements of the particular
griefs of which this Government has felt itself entitled to complain. These
proposals have not yet reached me in their full text. On their arrival they
will be taken into careful examination, and may, I hope, lead to a
satisfactory adjustment of the questions to which they refer and remove the
possibility of future occurrences such as have given rise to our just
complaints.

It is understood also that renewed efforts are being made to introduce
reforms in the internal administration of the island. Persuaded, however,
that a proper regard for the interests of the United States and of its
citizens entitles it to relief from the strain to which it has been
subjected by the difficulties of the questions and the wrongs and losses
which arise from the contest in Cuba, and that the interests of humanity
itself demand the cessation of the strife before the whole island shall be
laid waste and larger sacrifices of life be made, I shall feel it my duty,
should my hopes of a satisfactory adjustment and of the early restoration
of peace and the removal of future causes of complaint be, unhappily,
disappointed, to make a further communication to Congress at some period
not far remote, and during the present session, recommending what may then
seem to me to be necessary.

The free zone, so called, several years since established by the Mexican
Government in certain of the States of that Republic adjacent to our
frontier, remains in full operation. It has always been materially
injurious to honest traffic, for it operates as an incentive to traders in
Mexico to supply without customs charges the wants of inhabitants on this
side of the line, and prevents the same wants from being supplied by
merchants of the United States, thereby to a considerable extent defrauding
our revenue and checking honest commercial enterprise.

Depredations by armed bands from Mexico on the people of Texas near the
frontier continue. Though the main object of these incursions is robbery,
they frequently result in the murder of unarmed and peaceably disposed
persons, and in some instances even the United States post-offices and mail
communications have been attacked. Renewed remonstrances upon this subject
have been addressed to the Mexican Government, but without much apparent
effect. The military force of this Government disposable for service in
that quarter is quite inadequate to effectually guard the line, even at
those points where the incursions are usually made. An experiment of an
armed vessel on the Rio Grande for that purpose is on trial, and it is
hoped that, if not thwarted by the shallowness of the river and other
natural obstacles, it may materially contribute to the protection of the
herdsmen of Texas.

The proceedings of the joint commission under the convention between the
United States and Mexico of the 4th of July, 1868, on the subject of
claims, will soon be brought to a close. The result of those proceedings
will then be communicated to Congress.

I am happy to announce that the Government of Venezuela has, upon further
consideration, practically abandoned its objection to pay to the United
States that share of its revenue which some years since it allotted toward
the extinguishment of the claims of foreigners generally. In thus
reconsidering its determination that Government has shown a just sense of
self-respect which can not fail to reflect credit upon it in the eyes of
all disinterested persons elsewhere. It is to be regretted, however, that
its payments on account of claims of citizens of the United States are
still so meager in amount, and that the stipulations of the treaty in
regard to the sums to be paid and the periods when those payments were to
take place should have been so signally disregarded.

Since my last annual message the exchange has been made of the ratification
of a treaty of commerce and navigation with Belgium, and of conventions
with the Mexican Republic for the further extension of the joint commission
respecting claims; with the Hawaiian Islands for commercial reciprocity,
and with the Ottoman Empire for extradition; all of which have been duly
proclaimed.

The Court of Commissioners of Alabama Claims has prosecuted its important
duties very assiduously and very satisfactorily. It convened and was
organized on the 22d day of July, 1874, and by the terms of the act under
which it was created was to exist for one year from that date. The act
provided, however, that should it be found impracticable to complete the
work of the court before the expiration of the year the President might by
proclamation extend the time of its duration to a period not more than six
months beyond the expiration of the one year.

Having received satisfactory evidence that it would be impracticable to
complete the work within the time originally fixed, I issued a proclamation
(a copy of which is presented herewith) extending the time of duration of
the court for a period of six months from and after the 22d day of July
last.

A report made through the clerk of the court (communicated herewith) shows
the condition of the calendar on the 1st of November last and the large
amount of work which has been accomplished. One thousand three hundred and
eighty-two claims have been presented, of which 682 had been disposed of at
the date of the report. I am informed that 170 cases were decided during
the month of November. Arguments are being made and decisions given in the
remaining cases with all the dispatch consistent with the proper
consideration of the questions submitted. Many of these claims are in
behalf of mariners, or depend on the evidence of mariners, whose absence
has delayed the taking or the return of the necessary evidence.

It is represented to me that it will be impracticable for the court to
finally dispose of all the cases before it within the present limit of its
duration. Justice to the parties claimant, who have been at large expense
in preparing their claims and obtaining the evidence in their support,
suggests a short extension, to enable the court to dispose of all of the
claims which have been presented.

I recommend the legislation which may be deemed proper to enable the court
to complete the work before it.

I recommend that some suitable provision be made, by the creation of a
special court or by conferring the necessary jurisdiction upon some
appropriate tribunal, for the consideration and determination of the claims
of aliens against the Government of the United States which have arisen
within some reasonable limitation of time, or which may hereafter arise,
excluding all claims barred by treaty provisions or otherwise. It has been
found impossible to give proper consideration to these claims by the
Executive Departments of the Government. Such a tribunal would afford an
opportunity to aliens other than British subjects to present their claims
on account of acts committed against their persons or property during the
rebellion, as also to those subjects of Great Britain whose claims, having
arisen subsequent to the 9th day of April, 1865, could not be presented to
the late commission organized pursuant to the provisions of the treaty of
Washington.

The electric telegraph has become an essential and indispensable agent in
the transmission of business and social messages. Its operation on land,
and within the limit of particular states, is necessarily under the control
of the jurisdiction within which it operates. The lines on the high seas,
however, are not subject to the particular control of any one government.

In 1869 a concession was granted by the French Government to a company
which proposed to lay a cable from the shores of France to the United
States. At that time there was a telegraphic connection between the United
States and the continent of Europe (through the possessions of Great
Britain at either end of the line), under the control of an association
which had, at large outlay of capital and at great risk, demonstrated the
practicability of maintaining such means of communication. The cost of
correspondence by this agency was great, possibly not too large at the time
for a proper remuneration for so hazardous and so costly an enterprise. It
was, however, a heavy charge upon a means of communication which the
progress in the social and commercial intercourse of the world found to be
a necessity, and the obtaining of this French concession showed that other
capital than that already invested was ready to enter into competition,
with assurance of adequate return for their outlay. Impressed with the
conviction that the interests, not only of the people of the United States,
but of the world at large, demanded, or would demand, the multiplication of
such means of communication between separated continents, I was desirous
that the proposed connection should be made; but certain provisions of this
concession were deemed by me to be objectionable, particularly one which
gave for a long term of years the exclusive right of telegraphic
communication by submarine cable between the shores of France and the
United States. I could not concede that any power should claim the right to
land a cable on the shores of the United States and at the same time deny
to the United States, or to its citizens or grantees, an equal fight to
land a cable on its shores. The right to control the conditions for the
laying of a cable within the jurisdictional waters of the United States, to
connect our shores with those of any foreign state, pertains exclusively to
the Government of the United States, under such limitations and conditions
as Congress may impose. In the absence of legislation by Congress I was
unwilling, on the one hand, to yield to a foreign state the right to say
that its grantees might land on our shores while it denied a similar right
to our people to land on its shores, and, on the other hand, I was
reluctant to deny to the great interests of the world and of civilization
the facilities of such communication as were proposed. I therefore withheld
any resistance to the landing of the cable on condition that the offensive
monopoly feature of the concession be abandoned, and that the right of any
cable which may be established by authority of this Government to land upon
French territory and to connect with French land lines and enjoy all the
necessary facilities or privileges incident to the use thereof upon as
favorable terms as any other company be conceded. As the result thereof the
company in question renounced the exclusive privilege, and the
representative of France was informed that, understanding this
relinquishment to be construed as granting the entire reciprocity and equal
facilities which had been demanded, the opposition to the landing of the
cable was withdrawn. The cable, under this French concession, was landed in
the month of July, 1869, and has been an efficient and valuable agent of
communication between this country and the other continent. It soon passed
under the control, however, of those who had the management of the cable
connecting Great Britain with this continent, and thus whatever benefit to
the public might have ensued from competition between the two lines was
lost, leaving only the greater facilities of an additional line and the
additional security in case of accident to one of them. But these increased
facilities and this additional security, together with the control of the
combined capital of the two companies, gave also greater power to prevent
the future construction of other lines and to limit the control of
telegraphic communication between the two continents to those possessing
the lines already laid. Within a few months past a cable has been laid,
known as the United States Direct Cable Company, connecting the United
States directly with Great Britain. As soon as this cable was reported to
be laid and in working order the rates of the then existing consolidated
companies were greatly reduced. Soon, however, a break was announced in
this new cable, and immediately the rates of the other line, which had been
reduced, were again raised. This cable being now repaired, the rates appear
not to be reduced by either line from those formerly charged by the
consolidated companies.

There is reason to believe that large amounts of capital, both at home and
abroad, are ready to seek profitable investment in the advancement of this
useful and most civilizing means of intercourse and correspondence. They
await, however, the assurance of the means and conditions on which they may
safely be made tributary to the general good.

As these cable telegraph lines connect separate states, there are questions
as to their organization and control which probably can be best, if not
solely, settled by conventions between the respective states. In the
absence, however, of international conventions on the subject, municipal
legislation may secure many points which appear to me important, if not
indispensable for the protection of the public against the extortions which
may result from a monopoly of the right of operating cable telegrams or
from a combination between several lines:

I. No line should be allowed to land on the shores of the United States
under the concession from another power which does not admit the right of
any other line or lines, formed in the United States, to land and freely
connect with and operate through its land lines.

II. No line should be allowed to land on the shores of the United States
which is not, by treaty stipulation with the government from whose shores
it proceeds, or by prohibition in its charter, or otherwise to the
satisfaction of this Government, prohibited from consolidating or
amalgamating with any other cable telegraph line, or combining therewith
for the purpose of regulating and maintaining the cost of telegraphing.

III. All lines should be bound to give precedence in the transmission of
the official messages of the governments of the two countries between which
it may be laid.

IV. A power should be reserved to the two governments, either conjointly or
to each, as regards the messages dispatched from its shores, to fix a limit
to the charges to be demanded for the transmission of messages.

I present this subject to the earnest consideration of Congress.

In the meantime, and unless Congress otherwise direct, I shall not oppose
the landing of any telegraphic cable which complies with and assents to the
points above enumerated, but will feel it my duty to prevent the landing of
any which does not conform to the first and second points as stated, and
which will not stipulate to concede to this Government the precedence in
the transmission of its official messages and will not enter into a
satisfactory arrangement with regard to its charges.

Among the pressing and important subjects to which, in my opinion, the
attention of Congress should be directed are those relating to fraudulent
naturalization and expatriation.

The United States, with great liberality, offers its citizenship to all who
in good faith comply with the requirements of law. These requirements are
as simple and upon as favorable terms to the emigrant as the high privilege
to which he is admitted can or should permit. I do not propose any
additional requirements to those which the law now demands; but the very
simplicity and the want of unnecessary formality in our law have made
fraudulent naturalization not infrequent, to the discredit and injury of
all honest citizens, whether native or naturalized. Cases of this character
are continually being brought to the notice of the Government by our
representatives abroad, and also those of persons resident in other
countries, most frequently those who, if they have remained in this country
long enough to entitle them to become naturalized, have generally not much
overpassed that period, and have returned to the country of their origin,
where they reside, avoiding all duties to the United States by their
absence, and claiming to be exempt from all duties to the country of their
nativity and of their residence by reason of their alleged naturalization.
It is due to this Government itself and to the great mass of the
naturalized citizens who entirely, both in name and in fact, become
citizens of the United States that the high privilege of citizenship of the
United States should not be held by fraud or in derogation of the laws and
of the good name of every honest citizen. On many occasions it has been
brought to the knowledge of the Government that certificates of
naturalization are held and protection or interference claimed by parties
who admit that not only they were not within the United States at the time
of the pretended naturalization, but that they have never resided in the
United States; in others the certificate and record of the court show on
their face that the person claiming to be naturalized had not resided the
required time in the United States; in others it is admitted upon
examination that the requirements of law have not been complied with; in
some cases, even, such certificates have been matter of purchase. These are
not isolated cases, arising at rare intervals, but of common occurrence,
and which are reported from all quarters of the globe. Such occurrences can
not, and do not, fail to reflect upon the Government and injure all honest
citizens. Such a fraud being discovered, however, there is no practicable
means within the control of the Government by which the record of
naturalization can be vacated; and should the certificate be taken up, as
it usually is, by the diplomatic and consular representatives of the
Government to whom it may have been presented, there is nothing to prevent
the person claiming to have been naturalized from obtaining a new
certificate from the court in place of that which has been taken from him.

The evil has become so great and of such frequent occurrence that I can not
too earnestly recommend that some effective measures be adopted to provide
a proper remedy and means for the vacating of any record thus fraudulently
made, and of punishing the guilty parties to the transaction.

In this connection I refer also to the question of expatriation and the
election of nationality.

The United States was foremost in upholding the right of expatriation, and
was principally instrumental in overthrowing the doctrine of perpetual
allegiance. Congress has declared the right of expatriation to be a natural
and inherent right of all people; but while many other nations have enacted
laws providing what formalities shall be necessary to work a change of
allegiance, the United States has enacted no provisions of law and has in
no respect marked out how and when expatriation may be accomplished by its
citizens. Instances are brought to the attention of the Government where
citizens of the United States, either naturalized or native born, have
formally become citizens or subjects of foreign powers, but who,
nevertheless, in the absence of any provisions of legislation on this
question, when involved in difficulties or when it seems to be their
interest, claim to be citizens of the United States and demand the
intervention of a Government which they have long since abandoned and to
which for years they have rendered no service nor held themselves in any
way amenable.

In other cases naturalized citizens, immediately after naturalization, have
returned to their native country; have become engaged in business; have
accepted offices or pursuits inconsistent with American citizenship, and
evidence no intent to return to the United States until called upon to
discharge some duty to the country where they are residing, when at once
they assert their citizenship and call upon the representatives of the
Government to aid them in their unjust pretensions. It is but justice to
all bona fide citizens that no doubt should exist on such questions, and
that Congress should determine by enactment of law how expatriation may be
accomplished and change of citizenship be established.

I also invite your attention to the necessity of regulating by law the
status of American women who may marry foreigners, and of defining more
fully that of children born in a foreign country of American parents who
may reside abroad; and also of some further provision regulating or giving
legal effect to marriages of American citizens contracted in foreign
countries. The correspondence submitted herewith shows a few of the
constantly occurring questions on these points presented to the
consideration of the Government. There are few subjects to engage the
attention of Congress on which more delicate relations or more important
interests are dependent.

In the month of July last the building erected for the Department of State
was taken possession of and occupied by that Department. I am happy to
announce that the archives and valuable papers of the Government in the
custody of that Department are now safely deposited and properly cared
for.

The report of the Secretary of the Treasury shows the receipts from customs
for the fiscal year ending June 30, 1874, to have been $163,103,833.69, and
for the fiscal year ending June 30, 1875, to have been $157,267,722.35, a
decrease for the last fiscal year of $5,936,111.34. Receipts from internal
revenue for the year ending the 30th of June, 1874, were $102,409,784.90,
and for the year ending June 30, 1875, $110,007,493.58; increase,
$7,597,708.68.

The report also shows a complete history of the workings of the Department
for the last year, and contains recommendations for reforms and for
legislation which I concur in, but can not comment on so fully as I should
like to do if space would permit, but will confine myself to a few
suggestions which I look upon as vital to the best interests of the whole
people--coming within the purview of "Treasury;" I mean specie resumption.
Too much stress can not be laid upon this question, and I hope Congress may
be induced, at the earliest day practicable, to insure the consummation of
the act of the last Congress, at its last session, to bring about specie
resumption "on and after the 1st of January, 1879," at furthest. It would
be a great blessing if this could be consummated even at an earlier day.

Nothing seems to me more certain than that a full, healthy, and permanent
reaction can not take place in favor of the industries and financial
welfare of the country until we return to a measure of values recognized
throughout the civilized world. While we use a currency not equivalent to
this standard the world's recognized standard, specie, becomes a commodity
like the products of the soil, the surplus seeking a market wherever there
is a demand for it.

Under our present system we should want none, nor would we have any, were
it not that customs dues must be paid in coin and because of the pledge to
pay interest on the public debt in coin. The yield of precious metals would
flow out for the purchase of foreign productions and the United States
"hewers of wood and drawers of water," because of wiser legislation on the
subject of finance by the nations with whom we have dealings. I am not
prepared to say that I can suggest the best legislation to secure the end
most heartily recommended. It will be a source of great gratification to me
to be able to approve any measure of Congress looking effectively toward
securing "resumption."

Unlimited inflation would probably bring about specie payments more
speedily than any legislation looking to redemption of the legal-tenders in
coin; but it would be at the expense of honor. The legal-tenders would have
no value beyond settling present liabilities, or, properly speaking,
repudiating them. They would buy nothing after debts were all settled.

There are a few measures which seem to me important in this connection and
which I commend to your earnest consideration:

A repeal of so much of the legal-tender act as makes these notes receivable
for debts contracted after a date to be fixed in the act itself, say not
later than the 1st of January, 1877. We should then have quotations at real
values, not fictitious ones. Gold would no longer be at a premium, but
currency at a discount. A healthy reaction would set in at once, and with
it a desire to make the currency equal to what it purports to be. The
merchants, manufacturers, and tradesmen of every calling could do business
on a fair margin of profit, the money to be received having an unvarying
value. Laborers and all classes who work for stipulated pay or salary would
receive more for their income, because extra profits would no longer be
charged by the capitalists to compensate for the risk of a downward
fluctuation in the value of the currency.

Second. That the Secretary of the Treasury be authorized to redeem, say,
not to exceed $2,000,000 monthly of legal-tender notes, by issuing in their
stead a long bond, bearing interest at the rate of 3.65 per cent per annum,
of denominations ranging from $50 up to $1,000 each. This would in time
reduce the legal-tender notes to a volume that could be kept afloat without
demanding redemption in large sums suddenly.

Third. That additional power be given to the Secretary of the Treasury to
accumulate gold for final redemption, either by increasing revenue,
curtailing expenses, or both (it is preferable to do both); and I recommend
that reduction of expenditures be made wherever it can be done without
impairing Government obligations or crippling the due execution thereof.
One measure for increasing the revenue--and the only one I think of--is the
restoration of the duty on tea and coffee. These duties would add probably
$18,000,000 to the present amount received from imports, and would in no
way increase the prices paid for those articles by the consumers.

These articles are the products of countries collecting revenue from
exports, and as we, the largest consumers, reduce the duties they
proportionately increase them. With this addition to the revenue, many
duties now collected, and which give but an insignificant return for the
cost of collection, might be remitted, and to the direct advantage of
consumers at home.

I would mention those articles which enter into manufactures of all sorts.
All duty paid upon such articles goes directly to the cost of the article
when manufactured here, and must be paid for by the consumers. These duties
not only come from the consumers at home, but act as a protection to
foreign manufacturers of the same completed articles in our own and distant
markets.

I will suggest or mention another subject bearing upon the problem of "how
to enable the Secretary of the Treasury to accumulate balances." It is to
devise some better method of verifying claims against the Government than
at present exists through the Court of Claims, especially those claims
growing out of the late war. Nothing is more certain than that a very large
percentage of the amounts passed and paid are either wholly fraudulent or
are far in excess of the real losses sustained. The large amount of losses
proven--on good testimony according to existing laws, by affidavits of
fictitious or unscrupulous persons--to have been sustained on small farms
and plantations are not only far beyond the possible yield of those places
for any one year, but, as everyone knows who has had experience in tilling
the soil and who has visited the scenes of these spoliations, are in many
instances more than the individual claimants were ever worth, including
their personal and real estate.

The report of the Attorney-General, which will be submitted to Congress at
an early day, will contain a detailed history of awards made and of claim
pending of the class here referred to.

The report of the Secretary of War, accompanying this message, gives a
detailed account of Army operations for the year just passed, expenses for
maintenance, etc., with recommendations for legislation to which I
respectfully invite your attention. To some of these I invite special
attention:

First. The necessity of making $300,000 of the appropriation for the
Subsistence Department available before the beginning of the next fiscal
year. Without this provision troops at points distant from supply
production must either go without food or existing laws must be violated.
It is not attended with cost to the Treasury.

Second. His recommendation for the enactment of a system of annuities for
the families of deceased officers by voluntary deductions from the monthly
pay of officers. This again is not attended with burden upon the Treasury,
and would for the future relieve much distress which every old army officer
has witnessed in the past--of officers dying suddenly or being killed,
leaving families without even the means of reaching their friends, if
fortunate enough to have friends to aid them.

Third. The repeal of the law abolishing mileage, and a return to the old
system.

Fourth. The trial with torpedoes under the Corps of Engineers, and
appropriation for the same. Should war ever occur between the United States
and any maritime power, torpedoes will be among if not the most effective
and cheapest auxiliary for the defense of harbors, and also in aggressive
operations, that we can have. Hence it is advisable to learn by experiment
their best construction and application, as well as effect.

Fifth. A permanent organization for the Signal-Service Corps. This service
has now become a necessity of peace as well as war, under the advancement
made by the present able management.

Sixth. A renewal of the appropriation for compiling the official records of
the war, etc.

The condition of our Navy at this time is a subject of satisfaction. It
does not contain, it is true, any of the powerful cruising ironclads which
make so much of the maritime strength of some other nations, but neither
our continental situation nor our foreign policy requires that we should
have a large number of ships of this character, while this situation and
the nature of our ports combine to make those of other nations little
dangerous to us under any circumstances.

Our Navy does contain, however, a considerable number of ironclads of the
monitor class, which, though not properly cruisers, are powerful and
effective for harbor defense and for operations near our own shores. Of
these all the single-turreted ones, fifteen in number, have been
substantially rebuilt, their rotten wooden beams replaced with iron, their
hulls strengthened, and their engines and machinery thoroughly repaired, so
that they are now in the most efficient condition and ready for sea as soon
as they can be manned and put in commission.

The five double-turreted ironclads belonging to our Navy, by far the most
powerful of our ships for fighting purposes, are also in hand undergoing
complete repairs, and could be ready for sea in periods varying from four
to six months. With these completed according to the present design and our
two iron torpedo boats now ready, our ironclad fleet will be, for the
purposes of defense at home, equal to any force that can readily be brought
against it.

Of our wooden navy also cruisers of various sizes, to the number of about
forty, including those now in commission, are in the Atlantic, and could be
ready for duty as fast as men could be enlisted for those not already in
commission. Of these, one-third are in effect new ships, and though some of
the remainder need considerable repairs to their boilers and machinery,
they all are, or can readily be made, effective.

This constitutes a fleet of more than fifty war ships, of which fifteen are
ironclad, now in hand on the Atlantic coast. The Navy has been brought to
this condition by a judicious and practical application of what could be
spared from the current appropriations of the last few years and from that
made to meet the possible emergency of two years ago. It has been done
quietly, without proclamation or display, and though it has necessarily
straitened the Department in its ordinary expenditure, and, as far as the
ironclads are concerned, has added nothing to the cruising force of the
Navy, yet the result is not the less satisfactory because it is to be found
in a great increase of real rather than apparent force. The expenses
incurred in the maintenance of an effective naval force in all its branches
are necessarily large, but such force is essential to our position,
relations, and character, and affects seriously the weight of our
principles and policy throughout the whole sphere of national
responsibilities.

The estimates for the regular support of this branch of the service for the
next year amount to a little less in the aggregate than those made for the
current year; but some additional appropriations are asked for objects not
included in the ordinary maintenance of the Navy, but believed to be of
pressing importance at this time. It would, in my opinion, be wise at once
to afford sufficient means for the immediate completion of the five
double-turreted monitors now undergoing repairs, which must otherwise
advance slowly, and only as money can be spared from current expenses.
Supplemented by these, our Navy, armed with the destructive weapons of
modern warfare, manned by our seamen, and in charge of our instructed
officers, will present a force powerful for the home purposes of a
responsible though peaceful nation.

The report of the Postmaster-General herewith transmitted gives a full
history of the workings of the Department for the year just past. It will
be observed that the deficiency to be supplied from the General Treasury is
increased over the amount required for the preceding year. In a country so
vast in area as the United States, with large portions sparsely settled, it
must be expected that this important service will be more or less a burden
upon the Treasury for many years to come. But there is no branch of the
public service which interests the whole people more than that of cheap and
rapid transmission of the mails to every inhabited part of our territory.
Next to the free school, the post-office is the great educator of the
people, and it may well receive the support of the General Government.

The subsidy of $150,000 per annum given to vessels of the United States for
carrying the mails between New York and Rio de Janeiro having ceased on the
30th day of September last, we are without direct mail facilities with the
South American States. This is greatly to be regretted, and I do not
hesitate to recommend the authorization of a renewal of that contract, and
also that the service may be increased from monthly to semi-monthly trips.
The commercial advantages to be gained by a direct line of American
steamers to the South American States will far outweigh the expense of the
service.

By act of Congress approved March 3, 1875, almost all matter, whether
properly mail matter or not, may be sent any distance through the mails, in
packages not exceeding 4 pounds in weight, for the sum of 16 cents per
pound. So far as the transmission of real mail matter goes, this would seem
entirely proper; but I suggest that the law be so amended as to exclude
from the mails merchandise of all descriptions, and limit this
transportation to articles enumerated, and which may be classed as mail
matter proper.

The discovery of gold in the Black Hills, a portion of the Sioux
Reservation, has had the effect to induce a large emigration of miners to
that point. Thus far the effort to protect the treaty rights of the Indians
to that section has been successful, but the next year will certainly
witness a large increase of such emigration. The negotiations for the
relinquishment of the gold fields having failed, it will be necessary for
Congress to adopt some measures to relieve the embarrassment growing out of
the causes named. The Secretary of the Interior suggests that the supplies
now appropriated for the sustenance of that people, being no longer
obligatory under the treaty of 1868, but simply a gratuity, may be issued
or withheld at his discretion.

The condition of the Indian Territory, to which I have referred in several
of my former annual messages, remains practically unchanged. The Secretary
of the Interior has taken measures to obtain a full report of the condition
of that Territory, and will make it the subject of a special report at an
early day. It may then be necessary to make some further recommendation in
regard to legislation for the government of that Territory.

The steady growth and increase of the business of the Patent Office
indicates in some measure the progress of the industrial activity of the
country. The receipts of the office are in excess of its expenditures, and
the office generally is in a prosperous and satisfactory condition.

The report of the General Land Office shows that there were 2,459,601 acres
less disposed of during this than during the last year. More than one-half
of this decrease was in lands disposed of under the homestead and
timber-culture laws. The cause of this decrease is supposed to be found in
the grasshopper scourge and the droughts which prevailed so extensively in
some of the frontier States and Territories during that time as to
discourage and deter entries by actual settlers. The cash receipts were
less by $690,322.23 than during the preceding year.

The entire surveyed area of the public domain is 680,253,094 acres, of
which 26,077,531 acres were surveyed during the past year, leaving
1,154,471,762 acres still unsurveyed.

The report of the Commissioner presents many interesting suggestions in
regard to the management and disposition of the public domain and the
modification of existing laws, the apparent importance of which should
insure for them the careful consideration of Congress.

The number of pensioners still continues to decrease, the highest number
having been reached during the year ending June 30, 1873. During the last
year 11,557 names were added to the rolls, and 12,977 were dropped
therefrom, showing a net decrease of 1,420. But while the number of
pensioners has decreased, the annual amount due on the pension rolls has
increased $44,733.13. This is caused by the greatly increased average rate
of pensions, which, by the liberal legislation of Congress, has increased
from $90.26 in 1872 to $103.91 in 1875 to each invalid pensioner, an
increase in the average rate of 15 per cent in the three years. During the
year ending June 30, 1875, there was paid on account of pensions, including
the expenses of disbursement, $29,683,116, being $910,632 less than was
paid the preceding year. This reduction in amount of expenditures was
produced by the decrease in the amount of arrearages due on allowed claims
and on pensions the rate of which was increased by the legislation of the
preceding session of Congress. At the close of the last fiscal year there
were on the pension rolls 234,821 persons, of whom 210,363 were army
pensioners, 105,478 being invalids and 104,885 widows and dependent
relatives; 3,420 were navy pensioners, of whom 1,636 were invalids and
1,784 widows and dependent relatives; 21,038 were pensioners of the War of
1812, 15,875 of whom were survivors and 5,163 were widows.

It is estimated that $29,535,000 will be required for the payment of
pensions for the next fiscal year, an amount $965,000 less than the
estimate for the present year.

The geological explorations have been prosecuted with energy during the
year, covering an area of about 40,000 square miles in the Territories of
Colorado, Utah, and New Mexico, developing the agricultural and mineral
resources and furnishing interesting scientific and topographical details
of that region.

The method for the treatment of the Indians adopted at the beginning of my
first term has been steadily pursued, and with satisfactory and encouraging
results. It has been productive of evident improvement in the condition of
that race, and will be continued, with only such modifications as further
experience may indicate to be necessary.

The board heretofore appointed to take charge of the articles and materials
pertaining to the War, the Navy, the Treasury, the Interior, and the
Post-Office Departments, and the Department of Agriculture, the Smithsonian
Institution, and the Commission of Food Fishes, to be contributed, under
the legislation of last session, to the international exhibition to be held
at Philadelphia during the centennial year 1876, has been diligent in the
discharge of the duties which have devolved upon it; and the preparations
so far made with the means at command give assurance that the governmental
contribution will be made one of the marked characteristics of the
exhibition. The board has observed commendable economy in the matter of the
erection of a building for the governmental exhibit, the expense of which
it is estimated will not exceed, say, $80,000. This amount has been
withdrawn, under the law, from the appropriations of five of the principal
Departments, which leaves some of those Departments without sufficient
means to render their respective practical exhibits complete and
satisfactory. The exhibition being an international one, and the Government
being a voluntary contributor, it is my opinion that its contribution
should be of a character, in quality and extent, to sustain the dignity and
credit of so distinguished a contributor. The advantages to the country of
a creditable display are, in an international point of view, of the first
importance, while an indifferent or uncreditable participation by the
Government would be humiliating to the patriotic feelings of our people
themselves. I commend the estimates of the board for the necessary
additional appropriations to the favorable consideration of Congress.

The powers of Europe almost without exception, many of the South American
States, and even the more distant Eastern powers have manifested their
friendly sentiments toward the United States and the interest of the world
in our progress by taking steps to join with us in celebrating the
centennial of the nation, and I strongly recommend that a more national
importance be given to this exhibition by such legislation and by such
appropriation as will insure its success. Its value in bringing to our
shores innumerable useful works of art and skill, the commingling of the
citizens of foreign countries and our own, and the interchange of ideas and
manufactures will far exceed any pecuniary outlay we may make.

I transmit herewith the report of the Commissioner of Agriculture, together
with the reports of the Commissioners, the board of audit, and the board of
health of the District of Columbia, to all of which I invite your
attention.

The Bureau of Agriculture has accomplished much in disseminating useful
knowledge to the agriculturist, and also in introducing new and useful
productions adapted to our soil and climate, and is worthy of the continued
encouragement of the Government.

The report of the Commissioner of Education, which accompanies the report
of the Secretary of the Interior, shows a gratifying progress in
educational matters.

In nearly every annual message that I have had the honor of transmitting to
Congress I have called attention to the anomalous, not to say scandalous,
condition of affairs existing in the Territory of Utah, and have asked for
definite legislation to correct it. That polygamy should exist in a free,
enlightened, and Christian country, without the power to punish so flagrant
a crime against decency and morality, seems preposterous. True, there is no
law to sustain this unnatural vice; but what is needed is a law to punish
it as a crime, and at the same time to fix the status of the innocent
children, the offspring of this system, and of the possibly innocent plural
wives. But as an institution polygamy should be banished from the land.

While this is being done I invite the attention of Congress to another,
though perhaps no less an evil--the importation of Chinese women, but few
of whom are brought to our shores to pursue honorable or useful
occupations.

Observations while visiting the Territories of Wyoming, Utah, and Colorado
during the past autumn convinced me that existing laws regulating the
disposition of public lands, timber, etc., and probably the mining laws
themselves, are very defective and should be carefully amended, and at an
early day. Territory where cultivation of the soil can only be followed by
irrigation, and where irrigation is not practicable the lands can only be
used as pasturage, and this only where stock can reach water (to quench its
thirst), can not be governed by the same laws as to entries as lands every
acre of which is an independent estate by itself.

Land must be held in larger quantities to justify the expense of conducting
water upon it to make it fruitful, or to justify utilizing it as pasturage.
The timber in most of the Territories is principally confined to the
mountain regions, which are held for entry in small quantities only, and as
mineral lands. The timber is the property of the United States, for the
disposal of which there is now no adequate law. The settler must become a
consumer of this timber, whether he lives upon the plain or engages in
working the mines. Hence every man becomes either a trespasser himself or
knowingly a patron of trespassers.

My opportunities for observation were not sufficient to justify me in
recommending specific legislation on these subjects, but I do recommend
that a joint committee of the two Houses of Congress, sufficiently large to
be divided into subcommittees, be organized to visit all the mining States
and Territories during the coming summer, and that the committee shall
report to Congress at the next session such laws or amendments to laws as
it may deem necessary to secure the best interests of the Government and
the people of these Territories, who are doing so much for their
development.

I am sure the citizens occupying the territory described do not wish to be
trespassers, nor will they be if legal ways are provided for them to become
owners of these actual necessities of their position.

As this will be the last annual message which I shall have the honor of
transmitting to Congress before my successor is chosen, I will repeat or
recapitulate the questions which I deem of vital importance which may be
legislated upon and settled at this session:

First. That the States shall be required to afford the opportunity of a
good common-school education to every child within their limits.

Second. No sectarian tenets shall ever be taught in any school supported in
whole or in part by the State, nation, or by the proceeds of any tax levied
upon any community. Make education compulsory so far as to deprive all
persons who can not read and write from becoming voters after the year
1890, disfranchising none, however, on grounds of illiteracy who may be
voters at the time this amendment takes effect.

Third. Declare church and state forever separate and distinct, but each
free within their proper spheres; and that all church property shall bear
its own proportion of taxation.

Fourth. Drive out licensed immorality, such as polygamy and the importation
of women for illegitimate purposes. To recur again to the centennial year,
it would seem as though now, as we are about to begin the second century of
our national existence, would be a most fitting time for these reforms.

Fifth. Enact such laws as will insure a speedy return to a sound currency,
such as will command the respect of the world.

Believing that these views will commend themselves to the great majority of
the right-thinking and patriotic citizens of the United States, I submit
the rest to Congress.

U. S. GRANT

***

State of the Union Address
Ulysses S. Grant
December 5, 1876

To the Senate and House of Representatives:

In submitting my eighth and last annual message to Congress it seems proper
that I should refer to and in some degree recapitulate the events and
official acts of the past eight years.

It was my fortune, or misfortune, to be called to the office of Chief
Executive without any previous political training. From the age of 17 I had
never even witnessed the excitement attending a Presidential campaign but
twice antecedent to my own candidacy, and at but one of them was I eligible
as a voter.

Under such circumstances it is but reasonable to suppose that errors of
judgment must have occurred. Even had they not, differences of opinion
between the Executive, bound by an oath to the strict performance of his
duties, and writers and debaters must have arisen. It is not necessarily
evidence of blunder on the part of the Executive because there are these
differences of views. Mistakes have been made, as all can see and I admit,
but it seems to me oftener in the selections made of the assistants
appointed to aid in carrying out the various duties of administering the
Government--in nearly every case selected without a personal acquaintance
with the appointee, but upon recommendations of the representatives chosen
directly by the people. It is impossible, where so many trusts are to be
allotted, that the right parties should be chosen in every instance.
History shows that no Administration from the time of Washington to the
present has been free from these mistakes. But I leave comparisons to
history, claiming only that I have acted in every instance from a
conscientious desire to do what was right, constitutional, within the law,
and for the very best interests of the whole people. Failures have been
errors of judgment, not of intent.

My civil career commenced, too, at a most critical and difficult time. Less
than four years before, the country had emerged from a conflict such as no
other nation had ever survived. Nearly one-half of the States had revolted
against the Government, and of those remaining faithful to the Union a
large percentage of the population sympathized with the rebellion and made
an "enemy in the rear" almost as dangerous as the more honorable enemy in
the front. The latter committed errors of judgment, but they maintained
them openly and courageously; the former received the protection of the
Government they would see destroyed, and reaped all the pecuniary advantage
to be gained out of the then existing state of affairs, many of them by
obtaining contracts and by swindling the Government in the delivery of
their goods.

Immediately on the cessation of hostilities the then noble President, who
had carried the country so far through its perils, fell a martyr to his
patriotism at the hands of an assassin.

The intervening time to my first inauguration was filled up with wranglings
between Congress and the new Executive as to the best mode of
"reconstruction," or, to speak plainly, as to whether the control of the
Government should be thrown immediately into the hands of those who had so
recently and persistently tried to destroy it, or whether the victors
should continue to have an equal voice with them in this control.
Reconstruction, as finally agreed upon, means this and only this, except
that the late slave was enfranchised, giving an increase, as was supposed,
to the Union-loving and Union-supporting votes. If free in the full sense
of the word, they would not disappoint this expectation. Hence at the
beginning of my first Administration the work of reconstruction, much
embarrassed by the long delay, virtually commenced. It was the work of the
legislative branch of the Government. My province was wholly in approving
their acts, which I did most heartily, urging the legislatures of States
that had not yet done so to ratify the fifteenth amendment to the
Constitution. The country was laboring under an enormous debt, contracted
in the suppression of rebellion, and taxation was so oppressive as to
discourage production. Another danger also threatened us--a foreign war.
The last difficulty had to be adjusted and was adjusted without a war and
in a manner highly honorable to all parties concerned. Taxes have been
reduced within the last seven years nearly $300,000,000, and the national
debt has been reduced in the same time over $435,000,000. By refunding the
6 per cent bonded debt for bonds bearing 5 and 4 1/2 per cent interest,
respectively, the annual interest has been reduced from over $130,000,000
in 1869 to but little over $100,000,000 in 1876. The balance of trade has
been changed from over $130,000,000 against the United States in 1869 to
more than $120,000,000 in our favor in 1876.

It is confidently believed that the balance of trade in favor of the United
States will increase, not diminish, and that the pledge of Congress to
resume specie payments in 1879 will be easily accomplished, even in the
absence of much-desired further legislation on the subject.

A policy has been adopted toward the Indian tribes inhabiting a large
portion of the territory of the United States which has been humane and has
substantially ended Indian hostilities in the whole land except in a
portion of Nebraska, and Dakota, Wyoming, and Montana Territories--the
Black Hills region and approaches thereto. Hostilities there have grown out
of the avarice of the white man, who has violated our treaty stipulations
in his search for gold. The question might be asked why the Government has
not enforced obedience to the terms of the treaty prohibiting the
occupation of the Black Hills region by whites. The answer is simple: The
first immigrants to the Black Hills were removed by troops, but rumors of
rich discoveries of gold took into that region increased numbers. Gold has
actually been found in paying quantity, and an effort to remove the miners
would only result in the desertion of the bulk of the troops that might be
sent there to remove them. All difficulty in this matter has, however, been
removed--subject to the approval of Congress--by a treaty ceding the Black
Hills and approaches to settlement by citizens.

The subject of Indian policy and treatment is so fully set forth by the
Secretary of the Interior and the Commissioner of Indian Affairs, and my
views so fully expressed therein, that I refer to their reports and
recommendations as my own.

The relations of the United States with foreign powers continue on a
friendly footing.

Questions have arisen from time to time in the foreign relations of the
Government, but the United States have been happily free during the past
year from the complications and embarrassments which have surrounded some
of the foreign powers.

The diplomatic correspondence submitted herewith contains information as to
certain of the matters which have occupied the Government.

The cordiality which attends our relations with the powers of the earth has
been plainly shown by the general participation of foreign nations in the
exhibition which has just closed and by the exertions made by distant
powers to show their interest in and friendly feelings toward the United
States in the commemoration of the centennial of the nation. The Government
and people of the United States have not only fully appreciated this
exhibition of kindly feeling, but it may be justly and fairly expected that
no small benefits will result both to ourselves and other nations from a
better acquaintance, and a better appreciation of our mutual advantages and
mutual wants.

Congress at its last session saw fit to reduce the amount usually
appropriated for foreign intercourse by withholding appropriations for
representatives of the United States in certain foreign countries and for
certain consular officers, and by reducing the amounts usually appropriated
for certain other diplomatic posts, and thus necessitating a change in the
grade of the representatives. For these reasons, immediately upon the
passage of the bill making appropriations for the diplomatic and consular
service for the present fiscal year, instructions were issued to the
representatives of the United States at Bolivia, Ecuador, and Colombia, and
to the consular officers for whom no appropriation had been made, to close
their respective legations and consulates and cease from the performance of
their duties; and in like manner steps were immediately taken to substitute
charge's d'affaires for ministers resident in Portugal, Denmark, Greece,
Switzerland, and Paraguay.

While thoroughly impressed with the wisdom of sound economy in the foreign
service, as in other branches of the Government, I can not escape the
conclusion that in some instances the withholding of appropriations will
prove an expensive economy, and that the small retrenchment secured by a
change of grade in certain diplomatic posts is not an adequate
consideration for the loss of influence and importance which will attend
our foreign representatives under this reduction. I am of the opinion that
a reexamination of the subject will cause a change in some instances in the
conclusions reached on these subjects at the last session of Congress.

The Court of Commissioners of Alabama Claims, whose functions were
continued by an act of the last session of Congress until the 1st day of
January, 1877, has carried on its labors with diligence and general
satisfaction. By a report from the clerk of the court, transmitted
herewith, bearing date November 14, 1876, it appears that within the time
now allowed by law the court will have disposed of all the claims presented
for adjudication. This report also contains a statement of the general
results of the labors of the court to the date thereof. It is a cause of
satisfaction that the method adopted for the satisfaction of the classes of
claims submitted to the court, which are of long standing and justly
entitled to early consideration, should have proved successful and
acceptable.

It is with satisfaction that I am enabled to state that the work of the
joint commission for determining the boundary line between the United
States and British possessions from the northwest angle of the Lake of the
Woods to the Rocky Mountains, commenced in 1872, has been completed. The
final agreements of the commissioners, with the maps, have been duly
signed, and the work of the commission is complete.

The fixing of the boundary upon the Pacific coast by the protocol of March
10, 1873, pursuant to the award of the Emperor of Germany by Article XXXIV
of the treaty of Washington, with the termination of the work of this
commission, adjusts and fixes the entire boundary between the United States
and the British possessions, except as to the portion of territory ceded by
Russia to the United States under the treaty of 1867. The work intrusted to
the commissioner and the officers of the Army attached to the commission
has been well and satisfactorily performed. The original of the final
agreement of the commissioners, signed upon the 29th of May, 1876, with the
original official "lists of astronomical stations observed," the original
official "list of monuments marking the international boundary line," and
the maps, records, and general reports relating to the commission, have
been deposited in the Department of State. The official report of the
commissioner on the part of the United States, with the report of the chief
astronomer of the United States, will be submitted to Congress within a
short time.

I reserve for a separate communication to Congress a statement of the
condition of the questions which lately arose with Great Britain respecting
the surrender of fugitive criminals under the treaty of 1842.

The Ottoman Government gave notice, under date of January 15, 1874, of its
desire to terminate the treaty of 1862, concerning commerce and navigation,
pursuant to the provisions of the twenty-second article thereof. Under this
notice the treaty terminated upon the 5th day of June, 1876. That
Government has invited negotiations toward the conclusion of a new treaty.

By the act of Congress of March 23, 1874, the President was authorized,
when he should receive satisfactory information that the Ottoman Government
or that of Egypt had organized new tribunals likely to secure to citizens
of the United States the same impartial justice enjoyed under the exercise
of judicial functions by diplomatic and consular officers of the United
States, to suspend the operation of the act of June 22, 1860, and to accept
for citizens of the United States the jurisdiction of the new tribunals.
Satisfactory information having been received of the organization of such
new tribunals in Egypt, I caused a proclamation to be issued upon the 27th
of March last, suspending the operation of the act of June 22, 1860, in
Egypt, according to the provisions of the act. A copy of the proclamation
accompanies this message. The United States has united with the other
powers in the organization of these courts. It is hoped that the
jurisdictional questions which have arisen may be readily adjusted, and
that this advance in judicial reform may be hindered by no obstacles.

The necessary legislation to carry into effect the convention respecting
commercial reciprocity concluded with the Hawaiian Islands in 1875 having
been had, the proclamation to carry into effect the convention, as provided
by the act approved August 15, 1876, was duly issued upon the 9th day of
September last. A copy thereof accompanies this message.

The commotions which have been prevalent in Mexico for some time past, and
which, unhappily, seem to be not yet wholly quieted, have led to complaints
of citizens of the United States of injuries by persons in authority. It is
hoped, however, that these will ultimately be adjusted to the satisfaction
of both Governments. The frontier of the United States in that quarter has
not been exempt from acts of violence by citizens of one Republic on those
of the other. The frequency of these is supposed to be increased and their
adjustment made more difficult by the considerable changes in the course of
the lower part of the Rio Grande River, which river is a part of the
boundary between the two countries. These changes have placed on either
side of that river portions of land which by existing conventions belong to
the jurisdiction of the Government on the opposite side of the river. The
subject of adjustment of this cause of difficulty is under consideration
between the two Republics.

The Government of the United States of Colombia has paid the award in the
case of the steamer Montijo, seized by authorities of that Government some
years since, and the amount has been transferred to the claimants.

It is with satisfaction that I am able to announce that the joint
commission for the adjustment of claims between the United States and
Mexico under the convention of 1868, the duration of which has been several
times extended, has brought its labors to a close. From the report of the
agent of the United States, which accompanies the papers transmitted
herewith, it will be seen that within the time limited by the commission
1,017 claims on the part of citizens of the United States against Mexico
were referred to the commission. Of these claims 831 were dismissed or
disallowed, and in 186 cases awards were made in favor of the claimants
against the Mexican Republic, amounting in the aggregate to $4,125,622.20.
Within the same period 998 claims on the part of citizens of the Mexican
Republic against the United States were referred to the commission. Of
these claims 831 were dismissed or disallowed, and in 167 cases awards were
made in favor of the claimants against the United States, amounting in the
aggregate to $150,498.41.

By the terms of the convention the amount of these awards is to be deducted
from the amount awarded in favor of our citizens against Mexico, and the
balance only to be paid by Mexico to the United States, leaving the United
States to make provision for this proportion of the awards in favor of its
Own citizens.

I invite your attention to the legislation which will be necessary to
provide for the payment.

In this connection I am pleased to be able to express the acknowledgments
due to Sir Edward Thornton, the umpire of the commission, who has given to
the consideration of the large number of claims submitted to him much time,
unwearied patience, and that firmness and intelligence which are well known
to belong to the accomplished representative of Great Britain, and which
are likewise recognized by the representative in this country of the
Republic of Mexico.

Monthly payments of a very small part of the amount due by the Government
of Venezuela to citizens of the United States on account of claims of the
latter against that Government continue to be made with reasonable
punctuality. That Government has proposed to change the system which it has
hitherto pursued in this respect by issuing bonds for part of the amount of
the several claims. The proposition, however, could not, it is supposed,
properly be accepted, at least without the consent of the holders of
certificates of the indebtedness of Venezuela. These are so much dispersed
that it would be difficult, if not impossible, to ascertain their
disposition on the subject.

In former messages I have called the attention of Congress to the necessity
of legislation with regard to fraudulent naturalization and to the subject
of expatriation and the election of nationality.

The numbers of persons of foreign birth seeking a home in the United
States, the ease and facility with which the honest emigrant may, after the
lapse of a reasonable time, become possessed of all the privileges of
citizenship of the United States, and the frequent occasions which induce
such adopted citizens to return to the country of their birth render the
subject of naturalization and the safeguards which experience has proved
necessary for the protection of the honest naturalized citizen of paramount
importance. The very simplicity in the requirements of law on this question
affords opportunity for fraud, and the want of uniformity in the
proceedings and records of the various courts and in the forms of the
certificates of naturalization issued affords a constant source of
difficulty.

I suggest no additional requirements to the acquisition of citizenship
beyond those now existing, but I invite the earnest attention of Congress
to the necessity and wisdom of some provisions regarding uniformity in the
records and certificates, and providing against the frauds which frequently
take place and for the vacating of a record of naturalization obtained in
fraud.

These provisions are needed in aid and for the protection of the honest
citizen of foreign birth, and for the want of which he is made to suffer
not infrequently. The United States has insisted upon the right of
expatriation, and has obtained, after a long struggle, an admission of the
principle contended for by acquiescence therein on the part of many foreign
powers and by the conclusion of treaties on that subject. It is, however,
but justice to the government to which such naturalized citizens have
formerly owed allegiance, as well as to the United States, that certain
fixed and definite rules should be adopted governing such cases and
providing how expatriation may be accomplished.

While emigrants in large numbers become citizens of the United States, it
is also true that persons, both native born and naturalized, once citizens
of the United States, either by formal acts or as the effect of a series of
facts and circumstances, abandon their citizenship and cease to be entitled
to the protection of the United States, but continue on convenient
occasions to assert a claim to protection in the absence of provisions on
these questions.

And in this connection I again invite your attention to the necessity of
legislation concerning the marriages of American citizens contracted
abroad, and concerning the status of American women who may marry
foreigners and of children born of American parents in a foreign country.

The delicate and complicated questions continually occurring with reference
to naturalization, expatriation, and the status of such persons as I have
above referred to induce me to earnestly direct your attention again to
these subjects.

In like manner I repeat my recommendation that some means be provided for
the hearing and determination of the just and subsisting claims of aliens
upon the Government of the United States within a reasonable limitation,
and of such as may hereafter arise. While by existing provisions of law the
Court of Claims may in certain cases be resorted to by an alien claimant,
the absence of any general provisions governing all such cases and the want
of a tribunal skilled in the disposition of such cases upon recognized
fixed and settled principles, either provides no remedy in many deserving
cases or compels a consideration of such claims by Congress or the
executive department of the Government.

It is believed that other governments are in advance of the United States
upon this question, and that the practice now adopted is entirely
unsatisfactory.

Congress, by an act approved the 3d day of March, 1875, authorized the
inhabitants of the Territory of Colorado to form a State government, with
the name of the State of Colorado, and therein provided for the admission
of said State, when formed, into the Union upon an equal footing with the
original States.

A constitution having been adopted and ratified by the people of that
State, and the acting governor having certified to me the facts as provided
by said act, together with a copy of such constitution and ordinances as
provided for in the said act, and the provisions of the said act of
Congress having been duly complied with, I issued a proclamation upon the
1st of August, 1876, a copy of which is hereto annexed.

The report of the Secretary of War shows that the Army has been actively
employed during the year in subduing, at the request of the Indian Bureau,
certain wild bands of the Sioux Indian Nation and in preserving the peace
at the South during the election. The commission constituted under the act
of July 24, 1876, to consider and report on the "whole subject of the
reform and reorganization of the Army" met in August last, and has
collected a large mass of statistics and opinions bearing on the subject
before it. These are now under consideration, and their report is
progressing. I am advised, though, by the president of the commission that
it will be impracticable to comply with the clause of the act requiring the
report to be presented, through me, to Congress on the first day of this
session, as there has not yet been time for that mature deliberation which
the importance of the subject demands. Therefore I ask that the time of
making the report be extended to the 29th day of January, 1877.

In accordance with the resolution of August 15, 1876, the Army regulations
prepared under the act of March 1, 1875, have not been promulgated, but are
held until after the report of the above-mentioned commission shall have
been received and acted on.

By the act of August 15, 1876, the cavalry force of the Army was increased
by 2,500 men, with the proviso that they should be discharged on the
expiration of hostilities. Under this authority the cavalry regiments have
been strengthened, and a portion of them are now in the field pursuing the
remnants of the Indians with whom they have been engaged during the
summer.

The estimates of the War Department are made up on the basis of the number
of men authorized by law, and their requirements as shown by years of
experience, and also with the purpose on the part of the bureau officers to
provide for all contingencies that may arise during the time for which the
estimates are made. Exclusive of engineer estimates (presented in
accordance with acts of Congress calling for surveys and estimates for
improvements at various localities), the estimates now presented are about
six millions in excess of the appropriations for the years 1874-75 and
1875-76. This increase is asked in order to provide for the increased
cavalry force (should their services be necessary), to prosecute
economically work upon important public buildings, to provide for armament
of fortifications and manufacture of small arms, and to replenish the
working stock in the supply departments. The appropriations for these last
named have for the past few years been so limited that the accumulations in
store will be entirely exhausted during the present year, and it will be
necessary to at once begin to replenish them.

I invite your special attention to the following recommendations of the
Secretary of War:

First. That the claims under the act of July 4, 1864, for supplies taken by
the Army during the war be removed from the offices of the Quartermaster
and Commissary Generals and transferred to the Southern Claims Commission.
These claims are of precisely similar nature to those now before the
Southern Claims Commission, and the War Department bureaus have not the
clerical force for their examination nor proper machinery for investigating
the loyalty of the claimants.

Second. That Congress sanction the scheme of an annuity fund for the
benefit of the families of deceased officers, and that it also provide for
the permanent organization of the Signal Service, both of which were
recommended in my last annual message.

Third. That the manufacturing operations of the Ordnance Department be
concentrated at three arsenals and an armory, and that the remaining
arsenals be sold and the proceeds applied to this object by the Ordnance
Department.

The appropriations for river and harbor improvements for the current year
were $5,015,000. With my approval, the Secretary of War directed that of
this amount $2,000,000 should be expended, and no new works should be begun
and none prosecuted which were not of national importance. Subsequently
this amount was increased to $2,237,600, and the works are now progressing
on this basis.

The improvement of the South Pass of the Mississippi River, under James B.
Eads and his associates, is progressing favorably. At the present time
there is a channel of 20.3 feet in depth between the jetties at the mouth
of the pass and 18.5 feet at the head of the pass. Neither channel,
however, has the width required before payments can be made by the United
States. A commission of engineer officers is now examining these works, and
their reports will be presented as soon as received.

The report of the Secretary of the Navy shows that branch of the service to
be in condition as effective as it is possible to keep it with the means
and authority given the Department. It is, of course, not possible to rival
the costly and progressive establishments of great European powers with the
old material of our Navy, to which no increase has been authorized since
the war, except the eight small cruisers built to supply the place of
others which had gone to decay. Yet the most has been done that was
possible with the means at command; and by substantially rebuilding some of
our old ships with durable material and completely repairing and refitting
our monitor fleet the Navy has been gradually so brought up that, though it
does not maintain its relative position among the progressive navies of the
world, it is now in a condition more powerful and effective than it ever
has been in time of peace.

The complete repairs of our five heavy ironclads are only delayed on
account of the inadequacy of the appropriations made last year for the
working bureaus of the Department, which were actually less in amount than
those made before the war, notwithstanding the greatly enhanced price of
labor and materials and the increase in the cost of the naval service
growing out of the universal use and great expense of steam machinery. The
money necessary for these repairs should be provided at once, that they may
be completed without further unnecessary delay and expense.

When this is done, all the strength that there is in our Navy will be
developed and useful to its full capacity, and it will be powerful for
purposes of defense, and also for offensive action, should the necessity
for that arise within a reasonable distance from our shores.

The fact that our Navy is not more modern and powerful than it is has been
made a cause of complaint against the Secretary of the Navy by persons who
at the same time criticise and complain of his endeavors to bring the Navy
that we have to its best and most efficient condition; but the good sense
of the country will understand that it is really due to his practical
action that we have at this time any effective naval force at command.

The report of the Postmaster-General shows the excess of expenditures
(excluding expenditures on account of previous years) over receipts for the
fiscal year ended June 30, 1876, to be $4,151,988.66.

Estimated expenditures for the fiscal year ending June 30, 1878, are
$36,723,432.43.

Estimated revenue for same period is $30,645,165, leaving estimated excess
of expenditure, to be appropriated as a deficiency, of $6,078,267.43.

The Postmaster-General, like his predecessor, is convinced that a change in
the basis of adjusting the salaries of postmasters of the fourth class is
necessary for the good of the service as well as for the interests of the
Government, and urgently recommends that the compensation of the class of
postmasters above mentioned be based upon the business of their respective
offices, as ascertained from the sworn returns to the Auditor of stamps
canceled.

A few postmasters in the Southern States have expressed great apprehension
of their personal safety on account of their connection with the postal
service, and have specially requested that their reports of apprehended
danger should not be made public lest it should result in the loss of their
lives. But no positive testimony of interference has been submitted, except
in the case of a mail messenger at Spartanburg, in South Carolina, who
reported that he had been violently driven away while in charge of the
mails on account of his political affiliations. An assistant superintendent
of the Railway Mail Service investigated this case and reported that the
messenger had disappeared from his post, leaving his work to be performed
by a substitute. The Postmaster-General thinks this case is sufficiently
suggestive to justify him in recommending that a more severe punishment
should be provided for the offense of assaulting any person in charge of
the mails or of retarding or otherwise obstructing them by threats of
personal injury.

"A very gratifying result is presented in the fact that the deficiency of
this Department during the last fiscal year was reduced to $4,081,790.18,
as against $6,169,938.88 of the preceding year. The difference can be
traced to the large increase in its ordinary receipts (which greatly exceed
the estimates therefor) and a slight decrease in its expenditures."

The ordinary receipts of the Post-Office Department for the past seven
fiscal years have increased at an average of over 8 per cent per annum,
while the increase of expenditures for the same period has been but about
5.50 per cent per annum, and the decrease of deficiency in the revenues has
been at the rate of nearly 2 per cent per annum.

The report of the Commissioner of Agriculture accompanying this message
will be found one of great interest, marking, as it does, the great
progress of the last century in the variety of products of the soil;
increased knowledge and skill in the labor of producing, saving, and
manipulating the same to prepare them for the use of man; in the
improvements in machinery to aid the agriculturist in his labors, and in a
knowledge of those scientific subjects necessary to a thorough system of
economy in agricultural production, namely, chemistry, botany, entomology,
etc. A study of this report by those interested in agriculture and deriving
their support from it will find it of value in pointing out those articles
which are raised in greater quantity than the needs of the world require,
and must sell, therefore, for less than the cost of production, and those
which command a profit over cost of production because there is not an
overproduction.

I call special attention to the need of the Department for a new gallery
for the reception of the exhibits returned from the Centennial Exhibition,
including the exhibits donated by very many foreign nations, and to the
recommendations of the Commissioner of Agriculture generally.

The reports of the District Commissioners and the board of health are just
received--too late to read them and to make recommendations thereon--and
are herewith submitted.

The international exhibition held in Philadelphia this year, in
commemoration of the one hundredth anniversary of American independence,
has proven a great success, and will, no doubt, be of enduring advantage to
the country. It has shown the great progress in the arts, sciences, and
mechanical skill made in a single century, and demonstrated that we are but
little behind older nations in any one branch, while in some we scarcely
have a rival. It has served, too, not only to bring peoples and products of
skill and labor from all parts of the world together, but in bringing
together people from all sections of our own country, which must prove a
great benefit in the information imparted and pride of country engendered.

It has been suggested by scientists interested in and connected with the
Smithsonian Institution, in a communication herewith, that the Government
exhibit be removed to the capital and a suitable building be erected or
purchased for its accommodation as a permanent exhibit. I earnestly
recommend this; and believing that Congress would second this view, I
directed that all Government exhibits at the Centennial Exhibition should
remain where they are, except such as might be injured by remaining in a
building not intended as a protection in inclement weather, or such as may
be wanted by the Department furnishing them, until the question of
permanent exhibition is acted on.

Although the moneys appropriated by Congress to enable the participation of
the several Executive Departments in the International Exhibition of 1876
were not sufficient to carry out the undertaking to the full extent at
first contemplated, it gives me pleasure to refer to the very efficient and
creditable manner in which the board appointed from these several
Departments to provide an exhibition on the part of the Government have
discharged their duties with the funds placed at their command. Without a
precedent to guide them in the preparation of such a display, the success
of their labors was amply attested by the sustained attention which the
contents of the Government building attracted during the period of the
exhibition from both foreign and native visitors.

I am strongly impressed with the value of the collection made by the
Government for the purposes of the exhibition, illustrating, as it does,
the mineral resources of the country, the statistical and practical
evidences of our growth as a nation, and the uses of the mechanical arts
and the applications of applied science in the administration of the
affairs of Government.

Many nations have voluntarily contributed their exhibits to the United
States to increase the interest in any permanent exhibition Congress may
provide for. For this act of generosity they should receive the thanks of
the people, and I respectfully suggest that a resolution of Congress to
that effect be adopted.

The attention of Congress can not be too earnestly called to the necessity
of throwing some greater safeguard over the method of choosing and
declaring the election of a President. Under the present system there seems
to be no provided remedy for contesting the election in any one State. The
remedy is partially, no doubt, in the enlightenment of electors. The
compulsory support of the free school and the disfranchisement of all who
can not read and write the English language, after a fixed probation, would
meet my hearty approval. I would not make this apply, however, to those
already voters, but I would to all becoming so after the expiration of the
probation fixed upon. Foreigners coming to this country to become citizens,
who are educated in their own language, should acquire the requisite
knowledge of ours during the necessary residence to obtain naturalization.
If they did not take interest enough in our language to acquire sufficient
knowledge of it to enable them to study the institutions and laws of the
country intelligently, I would not confer upon them the right to make such
laws nor to select those who do.

I append to this message, for convenient reference, a synopsis of
administrative events and of all recommendations to Congress made by me
during the last seven years. Time may show some of these recommendations
not to have been wisely conceived, but I believe the larger part will do no
discredit to the Administration. One of these recommendations met with the
united opposition of one political party in the Senate and with a strong
opposition from the other, namely, the treaty for the annexation of Santo
Domingo to the United States, to which I will specially refer, maintaining,
as I do, that if my views had been concurred in the country would be in a
more prosperous condition to-day, both politically and financially.

Santo Domingo is fertile, and upon its soil may be grown just those
tropical products of which the United States use so much, and which are
produced or prepared for market now by slave labor almost exclusively,
namely, sugar, coffee, dyewoods, mahogany, tropical fruits, tobacco, etc.
About 75 per cent of the exports of Cuba are consumed in the United States.
A large percentage of the exports of Brazil also find the same market.
These are paid for almost exclusively in coin, legislation, particularly in
Cuba, being unfavorable to a mutual exchange of the products of each
country. Flour shipped from the Mississippi River to Havana can pass by the
very entrance to the city on its way to a port in Spain, there pay a duty
fixed upon articles to be reexported, transferred to a Spanish vessel and
brought back almost to the point of starting, paying a second duty, and
still leave a profit over what would be received by direct shipment. All
that is produced in Cuba could be produced in Santo Domingo. Being a part
of the United States, commerce between the island and mainland would be
free. There would be no export duties on her shipments nor import duties on
those coming here. There would be no import duties upon the supplies,
machinery, etc., going from the States. The effect that would have been
produced upon Cuban commerce, with these advantages to a rival, is
observable at a glance. The Cuban question would have been settled long ago
in favor of "free Cuba." Hundreds of American vessels would now be
advantageously used in transporting the valuable woods and other products
of the soil of the island to a market and in carrying supplies and
emigrants to it. The island is but sparsely settled, while it has an area
sufficient for the profitable employment of several millions of people. The
soil would have soon fallen into the hands of United States capitalists.
The products are so valuable in commerce that emigration there would have
been encouraged; the emancipated race of the South would have found there a
congenial home, where their civil rights would not be disputed and where
their labor would be so much sought after that the poorest among them could
have found the means to go. Thus in cases of great oppression and cruelty,
such as has been practiced upon them in many places within the last eleven
years, whole communities would have sought refuge in Santo Domingo. I do
not suppose the whole race would have gone, nor is it desirable that they
should go. Their labor is desirable--indispensable almost--where they now
are. But the possession of this territory would have left the negro "master
of the situation," by enabling him to demand his rights at home on pain of
finding them elsewhere.

I do not present these views now as a recommendation for a renewal of the
subject of annexation, but I do refer to it to vindicate my previous action
in regard to it.

With the present term of Congress my official life terminates. It is not
probable that public affairs will ever again receive attention from me
further than as a citizen of the Republic, always taking a deep interest in
the honor, integrity, and prosperity of the whole land.

U. S. GRANT



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