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IPBITB1L McKinley's Communication to the ! Congress, 'i-- , ,.V.-'Si( IT WAS NOT VERY SENSATIONAL Make No Suggestions s to the Govern ment of Our New Territory Want m, Hlgger Navy and Army Urges Construction of the Nicaragua Canal. To the Senate and House of Representa tives: Notwithstanding the added burdens ren dered necessary by the war, our people re joice in u very satisfactory and steadily Increasing: degree of prosperity, evidenced tjy tho largest volume of 'business ever re corded Manufacture has been productive, agricultural pursuits have yielded abun dant returns, labor In the fields of indus try Is better rewurded, revenue legislation parsed by the present congress has in creased, tho treasury' receipts to the amount estimated by its authors; the fin ances of the government have been suc cessfully administered and Us credit ad vanced to the first rank, while Its curren cy has been maintained at tho world's highest standard. Military service under a. common flag nnd for a righteous cause has strengthened the national spirit and served to cement more closely than ever tho fraternal bonds between every section of the country. A review of the relations of the United States to other powers, al ways appropriate, ia trils year of primary importance in view of the momentous is sues which have arisen, demanding In one Instance the ultimate determination by arms and involving far-reaching conse quence?, which will require the earnest at tention of tho congress. He lew if Our War IVIIh Spain. Tho president turns back tho pages of history and after reviewing th.it portion of his last message referring to the situa tion of Cuba during the insurrection and the hopelessness ot the reconeentrudoes, ho continues: On the l.'ith of February last, occurred tho destruction of the battleship Maine, whilo rightfully lying in tne hurbor of Havana on a misah n of International courtesy and good will a catastrophe the suspicious nature and horror ot wliioli stirred the nation's heart profoundly. The finding of the- naval board or inquiry es tablished that the origin of the explosion was external by a fciiiunarine mine, and only halted through lack of positive testi mony to lix the responsibility of its au thorship. All thesa things carried conviction to the most thoughtful, even before the find ing of the naval court, that a crisis In our relations with Spain and toward Cuba was at hand. So. strong was this belief that it needed but a brief executive sug gestion to the- congress to receive Imme diate answer to the duty of making in stant provision for the possible and per haps speedily probable einergei.i y of war, ind the remarkable, almost unique, spec tacle was presented of a unanimous vote of both houses, on-theDth of March, ap propriating $..0,000,000 "for the national de fense and for each and every purpose con nected therewith, to be expended ot the discretion of the President." That this act of provision came none too soon was dis closed when the application of the fund was undertaken. Tho l'resident reviews the well-known proceedings which preceded the declara tion of war; of the endeavors on the part ot the United Staes government to bring about an amicable ending of the Cuban Struggle, whereby the peoplo might be made independent; of how Spain quibbled over the matter and virtually threw aside our well-meant overtures. Tho l'resident then says: Grieved nnd disappointed at this barren tout come of mv sincere endeavors to reach a. practical solution. I felt it my duty to remit the whole question to the congress. In the message of April 11, 18'JS. 1 an nounced that with this last overture in the direction of Immediate peace in Cuba, and Its disappointing reception by Spain, the effort of the-executive was brought to an end. I again reviewed the alternative course of action which I had proposed, concluding that the only one consonant With International policy and compatible with our firm-set historical traditions was intervention us a neutral to stop the war and check the hopeless sacrifice of life, 'even though that resort involved "hos tilo constraint upon both the parties to the contest, as well to enforce a truce as to guide the eventual settlement." Tho response of the congress, after nine .,i,vi nf ..nmcKt deliberation, during which tho almost unanimous sentiment of your body was developed on every point savo as to the expediency of coupling the pro posed action with a formal recognition of the republic of Cuba as the true and law ful government of that Island a propo sition which failed of adoption the con- ? tress, after conference, on thel9th or Apr.., v a vote of to to 25 In the senate and 311 to 6 In the house of representatives, passed the memorable Joint resolution, ordering forcible intervention to stop the .W,fhls action led to the Spanish minister Withdrawing from Washington and also to giving United States Minister Woodford his passports, thereby breaking oft diplo matic relations between the two coun tries, such as attends an actual state of war. The president at once proclaimed a blockade of Cuba's coast, issued a call for volunteers and recommended to con press a formal declaration of, the exis tence of a state of war between the Unit ed States and 4paln. The congress accordingly voted on the lime day tho act approved April 25. 18')$. declaring the existence of such war, from and including the 21st day of April, and re-rnooted the provision of the resolution of April 20, directing the president to use all the armed forces of the nation to carry that act into effect. Our country thus, after on interval of half a century of peace with all nations, found Itself engaged in deadly conflict with a foreign enemy. Every nerve was strained to meet the emergency. The response to the Initial call for 125.000 volunteers was instant nnd complete, as was also the re sult of the second cull of May 25. for75.0 Additional volunteers. The ranks of the regular armv were Increased to the limits provided by the net of April 26. The en listed force of the navy on the 15th of August, when It reached Its maximum, numbered 21,123 men and apprentices. It Is not within the province of this 'message to narrate the history of the ex traordinary war that followed the Span ish declaration of April 21. but a brief re cital of its most salient features Is ap propriate. The first encounter of the war in point of date took place April 27. when a detachment of the blockading squadron made a reconnaissance In force lit Matanzas. shelled the harbor forts and demolished several new works in con struction. Tho next engagement was destined to mark a memorable epoch in maritime warfare. The I'aclllc fleet, under Commo dore Ocnrge Dewey, which had lain for several weeks at I long Kong, proceeded to the Philippine Islnn-s under orders to capture or destroy the formidable Span ish fleet then assembled at Manila. At daybreak on the 1st day of May the American force entered Manila bay and after a few hours' engagement effected the total destruction of the Spanish fleet, consisting of ten warships and a trans port, besides capturing (ho naval sta tion nnd forts of Cavite, thus annihilating the Spanish naval power In the Pacific Dccnn and completely controlling the bay Of Manila with the ability to take the citr at will. Not a 11 f o was lost on our hips, the wounded only numbering seven, while not a vessel was materially Injured. For this gallant achievement the congress, upon my recommendation, fitly bestowed upon the actors preferment and substantial- reward. Kelnforccments were hur ried to Manila under command of Maj. Oen. Mrrrltt and firmly established within sight of the capital, which lay helpless before our guns. Other expeditions soon followed, the total force consisting of CU Officers and 15.058 men. Following the comprehensive scheme of frenenvl nttnck powerful force were as sembled ait various polnits on our coast o lnvad CuThi and Porto U'eo. Mwn "While iraval demonit rations were made at txweral pxpowed points. On May It the cruiser Wilmington and) torpedo boat Wlnwlow were unsuccessful in an attempt xo silence tne iaitterle,s st Cardenas, aga-livrt Matanzas. Knslgn Worth Barley and four seamen falling. Meanwhile the Spar.inh naval prepara tlov had been pushed with grou.t vigor. A iHwcrful squadron under Admiral Cer- vera. which had assembled at the C.po Verde Island before the outbreak of hos tilities had crossed tihe ocean, and by its enrule. movemrta in the Caribbean sea. delayed our military operations widlo naming tne pursuits of our fleets. Not untu Aomiivvi tVrvera took refuge in tlv harbor of Santiago de Cuba about May 19 was it practicable to plan a systematic military attack upon the Antlllean pos-se-ssiiona of Spain. Several demonstra tions incurred on the eoas'.B of Cuba and Porto Kico, In prejea ration for the larger event. On Iay 13. the North Atlantic muadron shelled San Juan de Porto Rico. On May 30 CommorJ'ore shlev's sitiadrnn bombarded the forts guarding tlvj mouth of Santiago harbor. Neitlur attack had any material result. It was evident! that well-ordered land operations were Ind a pontsjble to achieve a decisive advantage. Tho wonderful Journey of the Oregon from San Francisco around Cape Horn to Cuba: the heroic achievement, of Iiob son ami seven volunteers who sank thi wilier Mcrrimac under tremendous fir to boitle Cervera's fleet In Santiago hir bor. and the landing of tW marines at fSuaivtanamo. are recounted by thj pres- lucroi, wno men comes to Shaffer's I, sliding: In f'nbn. On June 22 the advance of the Jnvad'ng army, under Ma.l.-i.en. Shatter. landed flt Daiquiri, about fifteen miles eart of Santiago. This was accomplished under Ktco.1 cumicupues. nut with marvelous dis patch. On June 23 the movement atralr.et Santiago was begun. On the 21th the first serious engagement took place, in wiich the First and Temth cavalry and the F.m i mi en states volunteer cavalry, t.en Young's brigade of (Jen. Wheeler's divls. ion, participated, losing heavily. liy nightfall, however, ground within five miles of Santiago was won. The advant age whs steadily Increased. On July 1 ft severe bottle took place, cur forces gain ing the outworks of Santiago; on the 21 101 Carey ar i San Juan were taken after r desperate charge, and the investment of the e.ty was completed. Tho navy co operated 'iy sneilirnr the lown and the voag'i rorts. Destruction of Cervera's Fleet. On the day following this brilliant a hievemt nt of our land forces. Julv 3. occurred the decisive naval combat of mo war. The Spanish fleet, attempting to leave the harbor, was met by the American squadron under command of Commodore Sin nson. In l"ss than tnree hours all the Spanish ships were de stroyed, the two torpedo boats being punk, and th. MarU Teresa, Almirante Cquendo. Vizcava nnd 'r'stnli:il Colnn cViven ashore. The Spanish admiral and over l.:(0 men were taken nrlson.rs. while the enemy's loss of life was de plorably large, some f,vf) were killed. Al though our ships were repeatedly btruclc not tr.o was seriously Injured. 'Irlbute to Xitvy nml Army. Wl-.c re ;ill so conspicuously distinguished themselves l'rr-in tne commanders to ;he gunners and the unnamed heroes in the boiler rooms each and m11 contrlbtir? to ward the achievement of this asto:nl Ing victory, for which neither ancient nor modct n history affords a parallel in the completeness of tie event and ihe m.irvlous disproportion or casualties, .'t would be Invidious to Hnijle out any for especial honor. Deserved promotion I as rewarded the more conspicuous actors the ration's profoundest gratitude Is due to all those brave men who by tvir skill and devotion In a few short hours crusned the sea power of Spam and wrought a triumph whose decisiveness and far-reaching consequences can scarcely be measure'd. Wlrh the catastrophe of Santiago Spain's effort upon tiie ocean virtually ceased. A spasmodic effort toward the end of June to send her Mediterranean fleet under Admiral Camara, to relieve Manila whj abandoned, the expedition being recalled after It had passed through the Suez canal. Tho capitulation of San tiago followed. The Individual valor of ofllcers and soldiers was never more strikingly shown than in the several ergageiiients leading to the surrender of Santiago, while th prompt movements nnd successive victories won Instant and universal applause. To those who ciind this complete triumph whin rstablisned the ascendancy of the United States upon land as the light off Santiago had fixed our supremacy on the seas, the earnest and lasting gratitude cf the nation is inspvrlngly due. Nor shoeld we alone remember the gallantry of the living; the dead claim our tears, and our losse.e bv battle and disease must cloud any ex ultation at the) res-ilt and teach us to welah the awful cost of war, however rightful the causo or signal the vic tory. Porto Ulco Is Onrs. With the fall of Santiago, the occupa tion of Porto Kifo became the next strat egic necessity. The campaign was prose cuted with great vigor. -Aid by the 12th of August much of the irl.ii'd was in our possession and the acquisition of the re mainder was only a matter of a short time. At most of the points In th- Island our troops were enthusiastically wel comed. Protestations of loyalty to the flag and gratitude for delivery from Span ish rule met our commanders at every stage. The lnt scene of the war was enacted at Manila. Its starting place. On August 15. ufter a brief assault unon the works by the land forces, In which the squadron assisted, the capital surrendered uncon ditionally. Our Cnsnaltles In the War. Tho total casualties In kl led and wound ed In the army during the war was os follows: Olflcerg killed. 23; enlisted men killed. 257; total. 2So; officers wounded. 113; enlisted men wounded. 1.4H4; total. 1.577. Of the navy: Killed. 17; wounded, C7; dld as result of wounds, 1; Invalided from service, 6; total. 91. Prnlse for the Volnntecrs. It Is fitting that I should bear testimony to the patriotism and devotion of that large portion of our army which, although eager to be ordere'd to the post of great exposure, fortunately was not required outside of the United States. They did their whole duty, and like their comrades nt the front, have earned the gratitude of the nation. In this connection, it is a pleasure for me to mention In terms of cordial appreciation the timely and useful work of the American National Ked Cross. In tracing these events we are oonssant ly reminded of our obligations to the Di vine Master for His watchful care over us ami Ills safe guidance, for which the na tion makes reverent acknowledgment and offers humble prayer for the continuance of Ili3 favor. Overtnrca of renee. The annihilation of Admiral Cerve-as f.eet, followed by the capitulation of San tiago, having brought to the Spanish gov ernment a re-nllzhvj sense of the hopeless ness of continuing a struggle now becom ing wholly unequal, it made overtures of po,:ce through the French ambassador, who. with the as.-ent of his government, had acted as the friendly representative of Spanish Interests during the war. The president here details the negotia tions which led to the pinning of the neaco protocol and to the appointment f the dpiico commission which is now in session In Paris. Tho negotiations havo made hopeful progress, so that I truM soon to able to lay a dcfitilto trce.ty of peace before the senate, with n review of the steps leading to its signature. As to Onr New Possessions. T do not dkecuss at this t'me the govern ment or the future ef the new possessions which wfll come to us as tho result of tho war with Spain. Such discussion will be appropriate after the treaty of peaco shall have been ratillcd. Jn the meantime and until the congress has legislated oth erwise. It will Le my duty to continue the military governpients wiilch hive existed slnco our occupation and government of the people, security In life and property, and encouragement und.ir a Just and be neficent rule. As soon as we are In possesion of Cuba and have pacified the Island, It w'i be necessary to give old and direction to the people to form a government for t.ie'm scdves. This should be undertaken at the earliest moment consistent with safety and assured succcps. It Is Important that our relations with these people shall bo of the most friendly character and our com mercial relations close and reciprocal. It should be our duty to assist In evry prop er way to build up the waste places of tha Island, encourage the Industry of the peo pla and assist them to form a government which shsll be free and Indepeidf r.t. thus realizing the best aspirations of the Cuban people. ( nbo for the t'nltnns. Spanish rule must be replaced by a Just, benevolent and humane Koveinmem ere. ated by tho people of Cuba, capablo of iM i iui imiiik no iiiif riumonui QDi'ganonS and which shall encourage thrift. Indus. try and prorperlty, and promot-j peace aim goor: win among all or the Inhabit anta, whatever may have been their re luilons In the past. Neither revengo nor passion snouu r.ave a place in the new government. until there is -romvleto tranquility in the island and a stable gov erment Inaugurated, military occupation iiu uu coniinueu. Other Korelttn Iielntlons. With the exception of the runture with Spain, the Intercourse of the United States wun tne great family of nation haa been marked with coidlalltv and the elo nf the eventful year finds most of t'.:o Issues ir.ai nccersaruy arise In the complex rela nous ot sovereign statin aeiusted or ore sentlng no serious obstacle to a Just and nonoraoie solution by amicable agree nit ii i. The Menrngou C'nnnl Mnst 1e Oars The Nicaragua canal commission, under nc enairmansiup or Hear Admiral John vj. iidurr, iias nearly completed its la. bors. and the results of Its exhaustive In qulry into the proper route, the feasihit Ity and the cost of construction of an in ter-oceanic canal by a Nicaraguan route will be laid before you. As the scope of recent Inquiry embraced the whole subject with the aim of making plans and surveys for a canal by the most convenient route, it necessarily Included a review of the results of previous surveys and plans nnd In particular those adoptel by the Maritime Canal company under its existing concessions from Nicaragua, and Costa Itlca. so that to this extent those grants necessarily held an essential nart In the deliberations and conclusion of th canal commission as they have held, and must needs hold, In the discussion of tho matter iy tne congress, tjinier these eir cumstances, tnd in view of overtures made to the governments of Nicaragua ana t osta Klca hy other parties for new canal concession predicated on the assumed apprc'cning larse of the con tracts of the Maritime Canal company with those states. 1 have not hesitated to express my conviction that considerations of expediency and International policy ns between tne several governments infer ested In the construction end control of an lnter-oeeanlc car.al by this route re quire the maintenance of thft status quo until tne canal commission shall have re ported una tne united states congress shall have had the opportunity to pass finally upon t lie wiioie matter during the present session, without prejudice hy rea son of any change In the existing condi tions. Nevertheless it appears that th" gov rrnment of Nicaragua, as one of its las sovereign acts before merging Ps powers tn those of the newly formed United States of Central America, has granted an optional concession to another association to become eiTeclive cn the expiration of the present grant. It does not appear what surveys h?ve been made or wn route is proposed undr this cnntIiiTft grant. o thit an ex.imir.Rti n of th feas ibility of its plans is necessarily embrace! In the report of the canal commission. All these circumstances suggest the urgency of some elefinite action by the congress at this session If the labors of tho past are to be utH'7cd nnd the Unking of th Atlantic; and Pacific oceans by a tiractlcul waterway Is to r realize!, q u r t th con strnction or such n maritime highway is now more than ever indispensable to that Intimate and ready intercommunication between our eastern nnd western sea boards demanded by th annexation of the Hawaiian sl?nl and the prospective expansion of our Influence ar.d commerce to I'acitie ani tnai our national poncv, now more Imperatively than ever, calls for !ts control bv this povernmer.t. are nroDOslflrtn which I doubt pot the con gress will duly appreciate ana wisely act upon. AVe Are Interested In China, Too. The United States has not ben sn In different spectator of th extraordlniry events transpiring In the Chinos empire, vherehv portions of Its maritime pro vinces are passing tinder the eontrol of various Kuropesn powers; hut tne pros pect that the vsst commerce which the energy of our citizens and th necessity of our staple productions for Chinoe uses has built up tn trose regions may not ne prMudlced through any exclusive treat ment by the new occupants, has obviated the need of o ir country becoming an actor In the scene.. Our position nmone nations having a large pacific coast, and a constantly ex panding direct trad" with the farther or ient, gives us the equitable claim to con- Ideratlon nnd fr'endlv treatment In this regard, and It will be mv aim to suhscrve our large Interests In that quarter by all means apnrepriste to the constant policy of our government. Th territories of Kiao Chow, of Wel-Ha!-Wcl, and of Port Arthur and Tallen Wan. leased to Ger many, Oreat Uritoln nnd nnsla. respec tively, for terms or years, will. It Is an nounced, be oprn to International com merce durlnir such alien occupation: and If no discriminating treatment of Ameri can citizens anel their trade be found to exist, or be hereafter eleveloped. the de sire of this government wouid appear to be realized. Meanwhile, there may be Just ground for disquietude in view of the unrest and re vlvnl of the old sentiment of opposition and prejudice to nllen people which per- aoes certain or tne Chinese provinces. As In the case of the attacks upon our citi zens In Szechuan nnd at Kutlen. In 155, the united States minister has been in structed to secure the fulWt measure of protection, both local and Imperial, for any menaced American Interests and to demand, in case of lawless Injury to per son or property. Instant reparation appro priate to the case. Warships have been stationed at Tien Tsl.i for more ready ob servation of disorders which have Invaded even the Chinese capital, so us to be In a position to act, should need arise, whilo a guard of marines has been sent to Pekln to afford the minister the sme measure of authoritative protection as the repre sentatives of other nations have been con strained to employ. L'nele Sain nt the Pnrls Sliorr. There fs now every prosnect Hint the participation of the United States in tho universal exposition to he held In Paris in tPO. will be on a scale commensurate with the advanced position held by our products and Industries In the world's chief marts. Notwithstanding the com paratively limited area of the exposition site less than one-half that, of the world's fair at Chicago the space assigned to the United States has been Increased from the absolute allotment of 157,103 square feet reported by Mr. Handy, to some 2i"2,000 square feet, with corresponding augmen tation of the field for a truly character istic representation of the various Im portant branches of our country's devel opment. Mr. Peck's report will be laid before you. In my Judgment, Its recommenda tions will call for your early considera tion, especially as regards an Increase of the appropriation to at least one million dollars In all. tn that not only may the assigned space be fully taken up by the best possible exhibitor In every class, but the preparation nnd Installation be on so perfect a scale as to rank among the first In that unparalleled competition of ar tistic and Inventive production, and thus counter-balance the disadvantage wltn which we start, as compared with other countries, whose appropriations are on a more generous scale, nnd whose prppnra tlons nro in a state of much greater for wnrdness than our own. Where our artisans have the admitted capacity to excel, where our Inventive ge nius has Initiated many of the grandest discoveries of these latr days of the cen tury, and where the native resources of our land are ns limitless as they arc val uable to supply the world's needs. It Is our province, ns It should be our earnest rare, to lead in the march of human pro gress and not rest content with any sec ondary place. Moreover, if this be due to ourselves. It Is no less due to the great French nation, whose guests wo become, and which has In so many ways testified Its wishes and hope that our participation shall bent the place the two peoples have won In the fluid of universal development. Commercial Treaties. The commercial arrangement made with France on May 8. 108. under the provisions of section 3. of the tariff act of lf7. went 'nto effect on June 1 following. It has relieved a portion of our export trad from serious emharrarsment. Fur ther negotiations are now pending under section 4. nf the same set. with a vlsw to tho Increase of trade between the two countries to their mutual advantage. Ns- j rotlntlons with other governments, in part Interrupted by the war with Bpaln, are in progress under both sections of the tariff act. I hope to bo able to announce some of the results of these negotiations during the present session of congress. . Negotiations to the same end with Ue.r many have been set on foot. Meanwhile no effort has boen relaxed to convince the imperial government of the thoroughness of our inspection of pork products for ex portation, and It Is trusted that the eitl clent administration of this measure by the department of agriculture will be rec ognized as a guarantee of the healthful ness of the food staples we Bend abroad to countries where their use Is largo and necessary. Johnny Hull is Onr Friend. Our relations with drr'nt pritain have continued on tho moTt frlenlly footing. Assenting to our request, the proiectioa of Americans and fhoir Interests In Span ish Jui 'IsdVoUon was urmmed by tho dip lomatic nr.d consular representative of Great Britain, who fultille! their delKtte and arduous trust with tact and zeal, eliciting hl.Th commendation. I may In nllowe-J to make fitting (illusion to the instance of Mr. Hamsiien. her majesty's consul at Fantlago rie Cuba, whose un timely deith after ellfit.nguihed service and untiling effort during the siege of that city was sincerely lamented. It will give me ef"roc.lal satisfaction If I shall ho authorized to communicate to you a favorjb!e oonelvrlon of the pending ncg-o'tlatlons with Great Pritain in re-'pret to the Dominion of Canada, it is the earnest wlch of this government to re move all pounces of distvtrd and irrita tion in our relations with the neighboring dominion. The. trade between the two countries Is constantly increasing, and It Is Important to bitth countries that all reasonable facilities ehould be framed for Its development. Annexation nf ITnTrnll. rondlr? the confederation by the senMe of the treaty signed June 15, 1 S7. by the plenlpo-tentiarirs of the United States anl of the republic of Hawaii, providing for the annexation of the islands, a joint resolution to arvomp.lsh the same pur pose by aeeep'dng 1he offered cession ant incorporating the ceded territory into the union was adopted by the cor.gre-s.s and approved July 7. WX Pursuant to the terms of the Joint res olution and In exercise of the auther.ty thereby conferred upon me. I dlrectel that the civil. Jircial and military pow ers theretofore exercised by the oflicers of the government of the republic of Ha waii should continue to be erenMsel by those oflicers jr.';:i conzTeps phall provi de a government for th- incorporated terri tory subject to my power to remove such ollleers nr.d to fid vacanrDs. The pres ident, oflicers nr.d troops of the r?pub!le thereupon took the oath ef allegiance to tho United States, thus provMin for tho unir.'terrui led eor.tlnuar.ee of ah tho ad ministrative nr 1 mui.ir'lpa'i functions f the annexed trrrKory until conrc-s shall otherwlre enact. Following the further pr.-i:-!on of th- J lnt rcrolullon. I appnlrr 1 eomm.s- fioners to confer and recommend to con gress sucn leg.nation eor.cr .-ring tne Hawaiian l:-lar... ns they sliou.d eler-rn nectsr'iry or proper. Ire omm'Fsioiu r bavli.g fu'.HMi i the m'sV.on conll led to I them, their report will be laid before yoi at an early day. It Is b:I eved that th-.!r rrvm menta tions will have the eat nest consideration due to the m.isir'tiide ef the respon:l r.buy tlrir ur-r.n you ;o give ruch shape tt the relationship of thos.-o mld-Pacille lands to our home union us will beneiit boi u In the hlraenl degree, re-allzir.g the as- r-lraitlor.3 of the community that has cast ts lot with us nrd elected to share our rolitic.-il herltaire. v. I e at the Fame time. Juf'llfy.ng the fore:,!.1: nf those who for three-quarters or a century, nave iookc-i to the assimilation of Hawaii as a nat ural and Inevitable c-.nsa.mTnsutlon. la hnrmonv with our nee?s and In fulfl.l- mfr.t of our cherished tradnior.s. The t'snr's Ttlg niufT. The proposal of the czar for a general reduction of the vast military establish ments that weigh so heavily upon many peoples in time of peace, was communi cated to thl3 government with an earnest invitation to be represented In the eomer ence. which it Is contemplated to assem ble with a view to discussing the m'ans of accomplishing so desirable a result. His majesty was at once informed of the bordlal sympathy of this government with the principle involved in his exalted pro posal and or the reidiness or th I r.l'.ed States to tske part In the conference. The active military force of tne United States. as measured by our population, territorial area, and taxable wetitn. Is. and under any conceivanie prospective conditions must continue to be. in time ot peace so conspicuously less than that of the armet powers to whom the czar s ipirai is cspe- la.ly addressed tnat the question can have for us no practical important.'!, savo as markln? an auspicious ;;.ep toward the bedterment of the condition of the. modern peoples and the cultivation of peace and good will among tnem; nut m tni3 view u behooves us as a nation to lend counte nance and aid to the benelicent project. Claims Annlnst Turkey. The newly accredited envoy of tho United States to the Ottoman porte car ries Instructions to the disposal of nut ters in controversy wun turKcy ror a number of years. He is especially charged to Press for a Just settlement of. our claims for Indemnity by reason of the de struction of property of American mis sionaries resident In that country during tho Armenian troubles of ivj.i. as well as for the recognition of older claims of equal Justnef-A. He Is also instructed to seek an adjustment or tne dispute grow ing out of the refusal or Turkey to rec ognize the acquired citizenship of Ottoman-born persons naturalized in tho United States since without prior Imperial consent. Venesneln's Ilonndnry, Once More. The arbitral tribunal appointed under the treaty of helTaary, !S:r7, between Jreat Itrltiln and enezuoia to elftermlne the boundary line between tho latter and tho colony of British Guiana, is to con vene at Paris during the present month. It Is a source or much gratification to this Government to see the friendly resort of arbitration applied to the settlement of this controversy, not alone because of the earnest part we have had in bringing about the result, but al?o because tne two members named on benair of Venezuela, Mr. Chief Justice Fuller nnd Mr. Juntlco Mrewer. chosen from, our highest court. appropriately testify tho continuing in terest we feel in the definite adjustment of the question according to the strictest rules of Justice. The Ilrltish members, Lord Herscheii and sir iiicnard Collins. are Jurists of no less exalted repute. while the nrtn memoer ana president of the tribunal, M. b De.Marttns, has earned world-wide reputation as an authority upon International law. Ilarean of American Itepnblles. I have the satisfaction of being ablo to state that the bureau of the American re publics created in 1SC0. us the organ for prc-moting commercial intercourse and fraternal relat.ons among the countries of the western hemisphere, has hecome a more efficient Instrument of tho wise pur poses cf Its founders, and Is receiving the cordial support of the contributing mem bers of the international union which nro actually represented in its board of man agement. A commercial directory, in two volumes, containing a mass of statistical matter descriptive of tho Industrial and commercial interefts of the various coun tries, has been printed in English, Span ish, Portuguese and French, and a month ly bulletin published in these four lan guages and tlstrlbuted In the Latin Amer ican countries as well as In the United States has proved to be a valuable me dium for A ssemlnattng Information nnd furthering the varied interests of the in ternational union. During the past year the important work of collecting Information of practical ben efit to American industries ana trade through the agency of the diplomatic and consular officers has been steadily ad vanced, and In order to lay such data be fore the nubile with the least delay the practice was begun In January, 1S;i9, of Issuing the commercial reports from day to day ns they are received by the de partment of state. It Is believed that for promptitude ns well ns fullness or Infor mation the services thus supplied to our merchants and manufacturers will he found to show sensible Improvement and to merit the liberal support of congress. Private Property In War. The experiences of the last year hrlng forcibly home to us a sense of the bur dens And the waste of war. We desire In common with the most civilized nations to reduce to the lowest possible point the cinmsge sustained In time of war by peaceablo trade and commerce. It Is true that we may' suffer In such cases less than other communities, but all nations are damaged more or less by the state of uneasiness and apprehension In which an outbreak of hostilities throws the entire commercial world. It should bo our ob ject, therefore, to minimize, to far as practicable, this Inevitable loss and dis turbance. This purpose can probably be best accomplished by an international agreement to regard all private property at sea exempt from capture or destruc tion by tho forces of belligerent powen. 'ih United States government nas for many years advocated this humane and beneficent principle, and is now In position to recommend it to other powers without the Imputation of selfish motives. I therefore suggest for your consideration that tho executive be authorized to cor respond with tho governments of the prin cipal maritime powers with a view of in corporating Into the permanent law ot civilized nations the pr.nclplc of the ex emption of all private property at sea. not contraband of war, from capturo or de struction by belligerent powera. National Perse Still Vat. Tho secretary of tho treasury report that tho receipt of the government from all sources during the fiscal year ending June w, IsDS including SSl.751.223 received from sale of I'aclflj railroads, amounted to $w5,5,j.3r.5, and its expenditures to $443. r.dS.r.S'.!. There vas collected from customs 414ft. 575, 0'i2 and from Internal revenue $170. D'10,611. Our dutiable Imports amounted to $.11:4, 7u."i. 179, a oecrense of $fi8,l.V5,30 over the preceding year, and Importations free of duty amounted to $.31,411,175. a decrease from tho preceding year of $M,fi2l,0M. In ternal revenue receipts exee-enVi tho.io cf the preceding year by 24.212.0rJ. Th total tax collected on distilled spirits was S.12.5 1(3.001', on manufactured tobacco $'li,2n0,r,22. nnd on fermented liquor 5".-U-5,421. Weexported merchandise during the year amounting to $1,2.11, 4-.2.3C0, an in crease of $1S9, 1S3.774 from tho preceding year. It Is estimated upon the barls of pres ent revenue laws that the receipts of the government for the year ending June 3. will be ,r.77.S74.V-17. and its expendi tures siWj. -i74.fi i7, resulting in a deficiency of tl2.Oi0,-m On the 1st cf December, 1H there was hld In the treasury gold coin amounting to Sins. 141,517, Koid bullion amounting to $l ".S".?2,.VI.'i, sliver bullion amounting to 2'9.2T'0, and other forms of money amount ing to jird.stti.rva. tin the same date the amount of money of all kinds in circulation, or not Included In treasury boiling.'., was $l,SV),S7!),5oi. an Increase fcr the year of $1 V.,7'j.9'. K.-ul-mntln.g our population at 75.11) 1.0m) it th time mentioned the per capita circulation was $2T. C9. On tho firr.e elate thero was in the treasury gold bullion amounting to 513?. 502,; 15. Cnrrency I,egUlnllnn. The provisions made for strengthening the renurc.s of the treasury tn connec- t'on with the war l.;s given increased oon f!ei'.c' In the purpose and power of the government to maintain the present standard and has established more linnly tnrin eve r tlu- ni'tional credit at Ionic atel ihrrj;iI. A mrrVed evidence of this U f'und In tho inflow of gold to tiie trenn ury. lis uet cold bold)!!,-?, on November 1. ivf'S, wiio J. '..i.sVi.lt). as compared with 1V;, 51:5,1 1; on Noveml-ier 1,1Sj7. and an In crease of pet cnh of i'2'r7,5 ,1;0, November 1. 1X5C. to S.5im,2.'W.2:,7. November 1, Itf.S. Tho pic.stiit ratio of net treasury gold out Manding government liabilities, in"ludwi.; United States treasury notes of 1431, sil ver certificates, currency certl'lcates, stance rd silver dollars ar.d fractional sli ver c-.In November 1, 10S. was S.ISi per cent, as compared with Iti.m per cent No vember 1. 1W7. I renew so much of mv- recommendation ef December, ls)7, as follows; "That whenever nnv of the United States notes are presented for redemption in gold and are redeemed In gold, such notes nhall be kept and set apart and only paid out In exchange for gold. This Is an .-bvious duty, if the holder of the United States note prefers the gold and gets It from the government, he should not re ceive back from the government a United States note without paying gold In ex change for iu The reason tor this ia made nil the more apparent when the government Issues an interest-hearing debt to provide gold for the redemption of United States notes, a non-Interest-bearing debt. Surely it should not par them out again, except on demind and for gold. If they are put out in any oth er way they may return again, i- be fol lowed by another bond Issue o rode.m them another Interest-bearing debt to redeem a non-Snterest-bearlng debt." This re enirpenoation was inane In the belief that such provisions of law would insure to a greater degree the safety of the present standard und letter protect our currency from the dangers to which It Is subjected from a disturbance In tho central buriness conditions of the country. In n.y Judgment the present condition of the treasury justifies the Immediate enactment ef legislation recommended cue year ago under which a portion of the gold holdings should be placed In a trust find from which greenbacks should be- redeemed upon presentation, but when once redeemed should not thereafter bo pil l out txcept for gold. It Is not to be inferred that other legis lation relating to our currency is not re quired: on the contrary there is an ob vious demand for it. The lrntortance for adequate provision which will Insure for our future a money stanc'arl related as our money standard now Is to that of our commercial rivals is generally recognized. The companion proposition that onr Democratic paper currency shall be kept safe and yet be so relatetl to the needs of our lnd istrles nnd onr internal com merco as to bo adequate and responsive t' such needs Is a proposition scarcely less Important. The subject. In all Its parts. Is commended to the wis consid eration of congress. I'lnroaratte American Shipping:. The annexation of Hawaii and the changed relations of te United States to Cuba. Torto Rico and the Philippines resulting frcm the war compel the prompt adoption of n maritime policy by the United States. There should be es tablished regular and frequent steamship communication, encouraged hy the United Stales under tho American f'.acr. with te newly aeqaircd posscsfdons. Spain fur nished to Its colonies, nt an annual cost of about $2,000.010, steamship lines con necting with a portion of the world's markets ns well as the trade centers of the home government. The United States will not undertake to do less. It Is our duty to furnish the peo?lo of Hawaii with facilities under national control for their export nnd Import trade. It will be con ceded that the present situation calls for legislation which shall be prompt, dur able and liberal. Tho part which American merchant ves sels and their seamen performed in th? war with Spsln demonstrates thnt this service, furnishing both pickets and the seeord line of defense. Is a national ne cessity, and should be tncourajred in every constitutional way. Iflrgf r Standing- Army Needed. Under the act of congress approved April 23. 1WS, authorizing the president In his discretion, upon a declaration of war by congress, or a declaration by congress thnt wnr exists. I directed the increase of the regular army to the maximum of 62 .Oof) nuthorlzed In said act. There are now In the regular army f,7.fA2 officers and men. In said net It was provided "thnt at the end of nny war In which the United States may be come Involved, the army shall be reduced to a peace basis by the transfer In the same arm of the service or absorption by promotion or honorable discharge un der such regulations as the secretary of war may establish of supernumerary commissioned oflicers and the honorable discharge or transfer of supernumerary enlisted men and nothing contained In this act shall be construed as authorizing the permanent increase of the commis sioned or enlisted force of the regular nrmy beyond that now provided by the law In force prior to the passage of this act, except as to the Increase of twenty five majors provided for In section one hereof." The Importance of Wlslatlon for the Fcrmanent Increase of the army is there ore manifest, and the recommendation of the secretary ef war for the purpose has my unqualified approval. There can be no question that at this time and prob ably for some time In the future. loo,i0 men will be none too many to meet tho necessities of the situation. At all events, whether that number shall he required permanently or not, the power should he given the president to enlist that force if in his discretion It should he necessary, and the further discretion should be glv n?hlm'"to'; reertiP. within the abort limits from the Inhsbitants of the Islands, of the government of which wa are charged. It is my purpose to muster out the entire volunteer army as soon as congress shall provide for the Increase of the regular establishment. , This will be only an act ef Justice ana : Will be much appreciated by the brave men who left their homes and employment to help the country in Its emergency. rostnt Service. The po5?nl service of the country ad vancen with extraordinary gt'owth. Vlth ln twenty y.ars both thf revenues and tho expenditures of the portotfiee depart ment have muTtJplle 1 threefo'tl In thtf last ten years they have nearly doubled. Our po''a'l biiMncss grows nnifih more rap-idly than our jopu!fl'1on. It now In volves an exieml!ture of $1(.ie,0CO a year, numbers 73.0Go pirnofhces ar.d enrolls 2r), (XX) employes. This remarkable extension of a eervce Which Is an accurate Index of tho public conditions presents gratify ing evidence of the advancement of edu cation, of the increase of communication ami buslncsH activity and of the Improve ment ef mall facilities leading to their constantly augmenting use. When our forces were moved upon Cuba. Porto P.lco anel the Philippines they were attended ar.d followed by the posital service. It was early determined thnt the public Intercuts would be bet subserved by the de-lall of experienced men familiar with every branch of the service, ard tills policy wns steadily fol lowed. While the work is only Juwt he gun it 1b pleasing to be able to say that tho service In the territory will eh h-a-s come ur.eJer our centrol is already mater ially improved. Increase of the Nnvy. The following recommerrlntlons of tha pecretory of the navy relative to the in crease of the navy have my oarnest ap proval: 1 Three sea-going pheathed snd cop-pe-re-d battlef h'Ips of aliout llf-co tons trial eKspIoeomcnt, carrying Che heaviest' armor and moyit powerful ordnnneo for vciych of their class, snd to have the bighert practicable spe I and great ra elilus of action. Rtlmated cost, exclurlvo of armor und armarrent. $3 .GO, Of) eich. 2 Three sheathed and coppered armor ed cruisers of about 12.00 tons trial dis placemer.'t, carrylrj the hcavn armer: or.ri mef.t powerfi-1 ordnance for vessels of their cla.'s and to have the hichest practicable spee-d nnd great radius of ac tion. Kr'Jmalcd cert, exclusive of armor anel nrmimiut. $l.00,fcr each. 3 Three sheathed nrd copperel pro tected erulsrrs of about 6,0o') tens trial displacement, to have the hlghes". prac ticable speed ar.d great radius of ajtl in. nn'I to carry tho mort powerful ordnance su1t.fi.hle for voxels of tlu'.r ehus. Ks tlmr.ted cost. exdiii-'Ive of armor and ar mament. $2.15T(V) each. 4 Six sheathed ae.1 oeppercd cruisers of about 2.5'V) tons trial displacement: to have the highest speed compatible with good cruising quali'tles. great radius of action ar.d to carry the niTd powerful oiVr.-iir.ee suited to vessels of their class. Usilrnated cost, exclusive, of armament, $1.14U0') each. .Vorc Honors for Mnvnl Heroes. ' I join with ih- t-ccrt.iry of the nivy In recommendimr that the --Trades of admiral and vice-admiral lie temporarily revived, t't be filled by olllccr.ii who have socially distinguished themselves in the war with Spain. Census nnil Pensions. I earnestly urpe upon congress the 1m-' portarce of early legislation providing for: the taking of the twelfth census. This is' necessary la view of the !rge amount of! work which must be performed In tho preparation of the schedules preparatory, to the erumer'tien of the population. ThTe were on the pension rolls on Juno 30. iSiiS. 003,714 name3, an increase of nearly' HVW over the number on the rolls on the' same day of the preceding year. The1 amount appropriated by. the act of De-! ccmber 22. ISO'., for the payment of pen-i sions ror the fiscal year 1-W was $140.-V),000. ' Right million seventy thousand eight hun-i dred snd seventy-two dollars and forty-' sx rents was appropriated bv the act ofl March 1, Wet. to cover deficiencies lnj army pensions and repayments In the sum) of $12,020 32. making a total of $14t,0S2,-' S'2 73 available for the payment of pen-! sions during the fiscal year 1S9S. The amount disbursed from that sum was' S144.frl.87t so. leaving a balance of $3,4:41. 012 00 unexpended on the JOth of June, 1898,1 which was covered Into the treasury. There were Z9 names added to the rolls 1 euirliig the year by special nets passed at' the second session of the If ty-fifth con gress, maklr.g a total of 6.5SG pensioners by congressional enactments since 18-11. Patents nnd Pnbllc Unnds. The total receipts of the patent ofTleo during the past year were $1.23,04S 44. Tha expenditures were $l,0til,G33 70, leaving a surplus of $172,314 G5. The public lands disposed of by the gov ernment during tho year reseheq H.iW.i.M 92 acres, an Increase of 614.7SO.15 acres over the previous year. The total receipts from pub.;c Itnds during the fiscal year amount ed to $2,277.W5 IS. an increase of $190,0:3 9) over the preceding year. The lands em braced in the 11 forest reservations which were suspended by the act of June 4, lo7, again became subject to the operations of the proclamations of Febuary 22, IW, cre ating them, which added an estimated amount of l9.951.StW acres to the area cm braced In tho reserves previously created. In addition thereto two new reserves wero created during the year the. Pine Moun tain and Zaka lake reservation in Cali fornia, embracing l.Cf.504 acres and tho Prescott reserve in Arizona, embraclsjr 10,240 acres; while the Pecos river reserve In New Mexico has been changed and en larged to include 12!,f) additional acres. At the close of the year 30 forest reser vations not including those of the Af ognne forest and fish culture reserve in Alaska, had been created by executive, proclamations, embracins an estimated area of 40.719.474. Indlnns Show Progress. ', The department ef the interior has in-, sugurated a forext system, made possible bv the act of July. 1S0S. for a grided force; of officers In control of the reserves. This system has only been in full operation since August, but good results have al ready been secured In many sections. Tho reports received Indicate that the system of patrol has not only prevented destruc tive fires from gaining headway, but ha diminished the number of fires. The special attention of congress Is called to that part of the secretary of the Interior's report In relation to civilized tribes. It Is noteworthy that the general condition of the Indians shows marked progress. I cannot too strongly indorse the recommendation of the secretary of tho Interior for the necessity of providing, for the education of the SO.cv) white chil dren resident in tho Indian Territory. i Agrlcnltnre. Tht department of agriculture has been sctlve In the past year. Explorers havo been sent to miny of the countries of tho eastern nnd western hemispheres for seeds and plants that may be useful to the United Stntes. and with the further view of opening up markets for our sur plus products. Nation-wide experiments have been conducted to ascertain the suit able locations ns to soil snd climate and states for growing sugar beets. The num ber of surar factories hss been doubled In the past two years, and the ability of the United Stales to produce Its own sugar from this source has been clearly demon strated. Allen Inhor I.nvr. The alien labor contract law Is shown hy experience to need some ?mendment; a measure providing better protection fop seamen Is proposed; tho rltrhtful applica tion of the eight-hour law for the benefit of labor nnd of principle of arbitration aro suggested for consideration, nnd I com mend the subjects to tho careful attention of congress. ... In the year 1W will occur the centennial snnlversary of the founding of the city of Washington for the permanent capital of the government of tho United States by authority of an net of congress nrproved July 16. 1790. A movement lately Inaugurated hy th citizens to have the anniversary celebrat ed with fitting ceremonies, including, per haps, the establishment of a handsomo permanent memorial to mark so histori cal an occasion nnd to give it more than local recognition has met with general favor on the part of tht public. I recommend to congress the rrantlng of, an appropriation for this purpose, and the appointment of a committee from Its re spective bodies. It might also be advis able to authorize the president to appoint a committee from the country at large, which, acting with the congressional sni: District of Columbia committers, can com plete the plans for an appropriate national celebration. , ... j