The commercial arrangement made with France on the 28th of May, 1898, under

the provisions of section 3 of the tariff act of 1897, went into effect on

the 1st day of June following. It has relieved a portion of our export

trade from serious embarrassment. Further negotiations are now pending

under section 4 of the same act with a view to the increase of trade

between the two countries to their mutual advantage. Negotiations with

other governments, in part interrupted by the war with Spain, are in

progress under both sections of the tariff act. I hope to be able to

announce some of the results of these negotiations during the present

session of Congress.

Negotiations to the same end with Germany have been set on foot. Meanwhile

no effort has been relaxed to convince the Imperial Government of the

thoroughness of our inspection of pork products for exportation, and it is

trusted that the efficient administration of this measure by the Department

of Agriculture will be recognized as a guaranty of the healthfulness of the

food staples we send abroad to countries where their use is large and

necessary.

I transmitted to the Senate on the 10th of February last information

touching the prohibition against the importation of fresh fruits from this

country, which had then recently been decreed by Germany on the ground of

danger of disseminating the San Jose scale insect. This precautionary

measure was justified by Germany on the score of the drastic steps taken in

several States of the Union against the spread of the pest, the elaborate

reports of the Department of Agriculture being put in evidence to show the

danger to German fruit-growing interests should the scale obtain a lodgment

in that country. Temporary relief was afforded in the case of large

consignments of fruit then on the way by inspection and admission when

found noninfected. Later the prohibition was extended to dried fruits of

every kind, but was relaxed so as to apply only to unpeeled fruit and fruit

waste. As was to be expected, the alarm reached to other countries, and

Switzerland has adopted a similar inhibition. Efforts are in progress to

induce the German and Swiss Governments to relax the prohibition in favor

of dried fruits shown to have been cured under circumstances rendering the

existence of animal life impossible.

Our relations with Great Britain have continued on the most friendly

footing. Assenting to our request, the protection of Americans and their

interests in Spanish jurisdiction was assumed by the diplomatic and

consular representatives of Great Britain, who fulfilled their delicate and

arduous trust with tact and zeal, eliciting high commendation. I may be

allowed to make fitting allusion to the instance of Mr. Ramsden, Her

Majesty's consul at Santiago de Cuba, whose untimely death after

distinguished service and untiring effort during the siege of that city was

sincerely lamented.

In the early part of April last, pursuant to a request made at the instance

of the Secretary of State by the British ambassador at this capital, the

Canadian government granted facilities for the passage of four United

States revenue cutters from the Great Lakes to the Atlantic coast by way of

the Canadian canals and the St. Lawrence River. The vessels had reached

Lake Ontario and were there awaiting the opening of navigation when war was

declared between the United States and Spain. Her Majesty's Government

thereupon, by a communication of the latter part of April, stated that the

permission granted before the outbreak of hostilities would not be

withdrawn provided the United States Government gave assurance that the

vessels in question would proceed direct to a United States port without

engaging in any hostile operation. This Government promptly agreed to the

stipulated condition, it being understood that the vessels would not be

prohibited from resisting any hostile attack.

It will give me especial satisfaction if I shall be authorized to

communicate to you a favorable conclusion of the pending negotiations with

Great Britain in respect to the Dominion of Canada. It is the earnest wish

of this Government to remove all sources of discord and irritation in our

relations with the neighboring Dominion. The trade between the two

countries is constantly increasing, and it is important to both countries

that all reasonable facilities should be granted for its development.

The Government of Greece strongly urges the onerousness of the duty here

imposed upon the currants of that country, amounting to 100 per cent or

more of their market value. This fruit is stated to be exclusively a Greek

product, not coming into competition with any domestic product. The

question of reciprocal commercial relations with Greece, including the

restoration of currants to the free list, is under consideration.

The long-standing claim of Bernard Campbell for damages for injuries

sustained from a violent assault committed against him by military

authorities in the island of Haiti has been settled by the agreement of

that Republic to pay him $10,000 in American gold. Of this sum $5,000 has

already been paid. It is hoped that other pending claims of American

citizens against that Republic may be amicably adjusted.

Pending the consideration by the Senate of the treaty signed June 1897, by

the plenipotentiaries of the United States and of the Republic of Hawaii,

providing for the annexation of the islands, a joint resolution to

accomplish the same purpose by accepting the offered cession and

incorporating the ceded territory into the Union was adopted by the

Congress and approved July 7, 1898. I thereupon directed the United States

steamship Philadelphia to convey Rear-Admiral Miller to Honolulu, and

intrusted to his hands this important legislative act, to be delivered to

the President of the Republic of Hawaii, with whom the Admiral and the

United States minister were authorized to make appropriate arrangements for

transferring the sovereignty of the islands to the United States. This was

simply but impressively accomplished on the 12th of August last by the

delivery of a certified copy of the resolution to President Dole, who

thereupon yielded up to the representative of the Government of the United

States the sovereignty and public property of the Hawaiian Islands.

Pursuant to the terms of the joint resolution and in exercise of the

authority thereby conferred upon me, I directed that the civil, judicial,

and military powers theretofore exercised by the officers of the Government

of the Republic of Hawaii should continue to be exercised by those officers

until Congress shall provide a government for the incorporated territory,

subject to my power to remove such officers and to fill vacancies. The

President, officers, and troops of the Republic thereupon took the oath of

allegiance to the United States, thus providing for the uninterrupted

continuance of all the administrative and municipal functions of the

annexed territory until Congress shall otherwise enact.

Following the further provision of the joint resolution, I appointed the

Hons. Shelby M. Cullom, of Illinois, John T. Morgan, of Alabama, Robert R.

Hitt, of Illinois, Sanford B. Dole, of Hawaii, and Walter F. Frear, of

Hawaii, as commissioners to confer and recommend to Congress such

legislation concerning the Hawaiian Islands as they should deem necessary

or proper. The commissioners having fulfilled the mission confided to them,

their report will be laid before you at an early day. It is believed that

their recommendations will have the earnest consideration due to the

magnitude of the responsibility resting upon you to give such shape to the

relationship of those mid-Pacific lands to our home Union as will benefit

both in the highest degree, realizing the aspirations of the community that

has cast its lot with us and elected to share our political heritage, while

at the same time justifying the foresight of those who for three-quarters

of a century have looked to the assimilation of Hawaii as a natural and

inevitable consummation, in harmony with our needs and in fulfillment of

our cherished traditions.

The questions heretofore pending between Hawaii and Japan growing out of

the alleged mistreatment of Japanese treaty immigrants were, I am pleased

to say, adjusted before the act of transfer by the payment of a reasonable

indemnity to the Government of Japan.

Under the provisions of the joint resolution, the existing customs

relations of the Hawaiian Islands with the United States and with other

countries remain unchanged until legislation shall otherwise provide. The

consuls of Hawaii here and in foreign countries continue to fulfill their

commercial agencies, while the United States consulate at Honolulu is

maintained for all appropriate services pertaining to trade and the

revenue. It would be desirable that all foreign consuls in the Hawaiian

Islands should receive new exequaturs from this Government.

The attention of Congress is called to the fact that, our consular offices

having ceased to exist in Hawaii and being about to cease in other

countries coming under the sovereignty of the United States, the provisions

for the relief and transportation of destitute American seamen in these

countries under our consular regulations will in consequence terminate. It

is proper, therefore, that new legislation should be enacted upon this

subject in order to meet the changed conditions.

The interpretation of certain provisions of the extradition convention of

December 11, 1861, has been at various times the occasion of controversy

with the Government of Mexico. An acute difference arose in the case of the

Mexican demand for the delivery of Jesus Guerra, who, having led a

marauding expedition near the border with the proclaimed purpose of

initiating an insurrection against President Diaz, escaped into Texas.

Extradition was refused on the ground that the alleged offense was

political in its character, and therefore came within the treaty proviso of

nonsurrender. The Mexican contention was that the exception only related to

purely political offenses, and that as Guerra's acts were admixed with the

common crime of murder, arson, kidnaping, and robbery, the option of

nondelivery became void, a position which this Government was unable to

admit in view of the received international doctrine and practice in the

matter. The Mexican Government, in view of this, gave notice January 24,

1898, of the termination of the convention, to take effect twelve months

from that date, at the same time inviting the conclusion of a new

convention, toward which negotiations are on foot.

In this relation I may refer to the necessity of some amendment of our

existing extradition statute. It is a common stipulation of such treaties

that neither party shall be bound to give up its own citizens, with the

added proviso in one of our treaties, that with Japan, that it may

surrender if it see fit. It is held in this country by an almost uniform

course of decisions that where a treaty negatives the obligation to

surrender the President is not invested with legal authority to act. The

conferment of such authority would be in the line of that sound morality

which shrinks from affording secure asylum to the author of a heinous

crime. Again, statutory provision might well be made for what is styled

extradition by way of transit, whereby a fugitive surrendered by one

foreign government to another may be conveyed across the territory of the

United States to the jurisdiction of the demanding state. A recommendation

in this behalf made in the President's message of 1886 was not acted upon.

The matter is presented for your consideration.

The problem of the Mexican free zone has been often discussed with regard

to its inconvenience as a provocative of smuggling into the United States

along an extensive and thinly guarded land border. The effort made by the

joint resolution of March 1, 1895, to remedy the abuse charged by

suspending the privilege of free transportation in bond across the

territory of the United States to Mexico failed of good result, as is

stated in Report No. 702 of the House of Representatives, submitted in the

last session, March 11, 1898. As the question is one to be conveniently met

by wise concurrent legislation of the two countries looking to the

protection of the revenues by harmonious measures operating equally on

either side of the boundary, rather than by conventional arrangements, I

suggest that Congress consider the advisability of authorizing and inviting

a conference of representatives of the Treasury Departments of the United

States and Mexico to consider the subject in all its complex bearings, and

make report with pertinent recommendations to the respective Governments

for the information and consideration of their Congresses.

The Mexican Water Boundary Commission has adjusted all matters submitted to

it to the satisfaction of both Governments save in three important

cases--that of the "Chamizal" at El Paso, Tex., where the two commissioners

failed to agree, and wherein, for this case only, this Government has

proposed to Mexico the addition of a third member; the proposed elimination

of what are known as "Bancos," small isolated islands formed by the cutting

off of bends in the Rio Grande, from the operation of the treaties of 1884

and 1889, recommended by the commissioners and approved by this Government,

but still under consideration by Mexico; and the subject of the "Equitable

distribution of the waters of the Rio Grande," for which the commissioners

recommended an international dam and reservoir, approved by Mexico, but

still under consideration by this Government. Pending these questions it is

necessary to extend the life of the commission, which expires December 23

next.

The coronation of the young Queen of the Netherlands was made the occasion

of fitting congratulations.

The claim of Victor H. McCord against Peru, which for a number of years has

been pressed by this Government and has on several occasions attracted the

attention of the Congress, has been satisfactorily adjusted. A protocol was

signed May 17, 1898, whereby, the fact of liability being admitted, the

question of the amount to be awarded was submitted to the chief justice of

Canada as sole arbitrator. His award sets the indemnity due the claimant at

$40,000.

The Government of Peru has given the prescribed notification of its

intention to abrogate the treaty of friendship, commerce, and navigation

concluded with this country August 31, 1887. As that treaty contains many

important provisions necessary to the maintenance of commerce and good

relations, which could with difficulty be replaced by the negotiation of

renewed provisions within the brief twelve months intervening before the

treaty terminates, I have invited suggestions by Peru as to the particular

provisions it is desired to annul, in the hope of reaching an arrangement

whereby the remaining articles may be provisionally saved.

His Majesty the Czar having announced his purpose to raise the Imperial

Russian mission at this capital to the rank of an embassy, I responded,

under the authority conferred by the act of March 3, 1893, by commissioning

and accrediting the actual representative at St. Petersburg in the capacity

of ambassador extraordinary and plenipotentiary. The Russian ambassador to

this country has since presented his credentials.

The proposal of the Czar for a general reduction of the vast military

establishments that weigh so heavily upon many peoples in time of peace was

communicated to this Government with an earnest invitation to be

represented in the conference which it is contemplated to assemble with a

view to discussing the means of accomplishing so desirable a result. His

Majesty was at once informed of the cordial sympathy of this Government

with the principle involved in his exalted proposal and of the readiness of

the United States to take part in the conference. The active military force

of the United States, as measured by our population, territorial area, and

taxable wealth, is, and under any conceivable prospective conditions must

continue to be, in time of peace so conspicuously less than that of the

armed powers to whom the Czar's appeal is especially addressed that the

question can have for us no practical importance save as marking an

auspicious step toward the betterment of the condition of the modern

peoples and the cultivation of peace and good will among them; but in this

view it behooves us as a nation to lend countenance and aid to the

beneficent project.

The claims of owners of American sealing vessels for seizure by Russian

cruisers in Bering Sea are being pressed to a settlement. The equities of

the cases justify the expectation that a measure of reparation will

eventually be accorded in harmony with precedent and in the light of the

proven facts.

The recommendation made in my special message of April 27 last is renewed,

that appropriation be made to reimburse the master and owners of the

Russian bark Hans for wrongful arrest of the master and detention of the

vessel in February, 1896, by officers of the United States district court

for the southern district of Mississippi. The papers accompanying my said

message make out a most meritorious claim and justify the urgency with

which it has been presented by the Government of Russia.

Malietoa Laupepa, King of Samoa, died on August 22 last. According to

Article I of the general act of Berlin, "his successor shall be duly

elected according to the laws and customs of Samoa."

Arrangements having been agreed upon between the signatories of the general

act for the return of Mataafa and the other exiled Samoan chiefs, they were

brought from Jaluit by a German war vessel and landed at Apia on September

18 last.

Whether the death of Malietoa and the return of his old-time rival Mataafa

will add to the undesirable complications which the execution of the

tripartite general act has heretofore developed remains to be seen. The

efforts of this Government will, as heretofore, be addressed toward a

harmonious and exact fulfillment of the terms of the international

engagement to which the United States became a party in 1889.

The Cheek claim against Siam, after some five years of controversy, has

been adjusted by arbitration under an agreement signed July 6, 1897, an

award of 706,721 ticals (about $187,987.78 ), with release of the Cheek

estate from mortgage claims, having been rendered March 21, 1898, in favor

of the claimant by the arbitrator, Sir Nicholas John Hannen, British chief

justice for China and Japan.

An envoy from Siam has been accredited to this Government and has presented

his credentials.

Immediately upon the outbreak of the war with Spain the Swiss Government,

fulfilling the high mission it has deservedly assumed as the patron of the

International Red Cross, proposed to the United States and Spain that they

should severally recognize and carry into execution, as a modus vivendi,

during the continuance of hostilities, the additional articles proposed by

the international conference of Geneva, October 20, 1868, extending the

effects of the existing Red Cross convention of 1864 to the conduct of

naval war. Following the example set by France and Germany in 1870 in

adopting such a modus vivendi, and in view of the accession of the United

States to those additional articles in 1882, although the exchange of

ratifications thereof still remained uneffected, the Swiss proposal was

promptly and cordially accepted by us, and simultaneously by Spain.

This Government feels a keen satisfaction in having thus been enabled to

testify its adherence to the broadest principles of humanity even amidst

the clash of war, and it is to be hoped that the extension of the Red Cross

compact to hostilities by sea as well as on land may soon become an

accomplished fact through the general promulgation of the additional naval

Red Cross articles by the maritime powers now parties to the convention of

1864.

The important question of the claim of Switzerland to the perpetual

cantonal allegiance of American citizens of Swiss origin has not made

hopeful progress toward a solution, and controversies in this regard still

continue.

The newly accredited envoy of the United States to the Ottoman Porte

carries instructions looking to the disposal of matters in controversy with

Turkey for a number of years. He is especially charged to press for a just

settlement of our claims for indemnity by reason of the destruction of the

property of American missionaries resident in that country during the

Armenian troubles of 1895, as well as for the recognition of older claims

of equal justness.

He is also instructed to seek an adjustment of the dispute growing out of

the refusal of Turkey to recognize the acquired citizenship of Ottoman-born

persons naturalized in the United States since 1869 without prior imperial

consent, and in the same general relation he is directed to endeavor to

bring about a solution of the question which has more or less acutely

existed since 1869 concerning the jurisdictional rights of the United

States in matters of criminal procedure and punishment under Article IV of

the treaty of 1830. This latter difficulty grows out of a verbal

difference, claimed by Turkey to be essential, between the original Turkish

text and the promulgated translation.

After more than two years from the appointment of a consul of this country

to Erzerum, he has received his exequatur.

The arbitral tribunal appointed under the treaty of February 2, 1897,

between Great Britain and Venezuela, to determine the boundary line between

the latter and the colony of British Guiana, is to convene at Paris during

the present month. It is a source of 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 also because the two members named on behalf of

Venezuela, Mr. Chief Justice Fuller and Mr. Justice Brewer, chosen from our

highest court, appropriately testify the continuing interest we feel in the

definitive adjustment of the question according to the strictest rules of

justice. The British members, Lord Herschell and Sir Richard Collins, are

jurists of no less exalted repute, while the fifth member and president of

the tribunal, M. F. De Martens, has earned a world-wide reputation as an

authority upon international law.

The claim of Felipe Scandella against Venezuela for arbitrary expulsion and

injury to his business has been adjusted by the revocation of the order of

expulsion and by the payment of the sum of $16,000.

I have the satisfaction of being able to state that the Bureau of the

American Republics, created in 1890 as the organ for promoting commercial

intercourse and fraternal relations among the countries of the Western

Hemisphere, has become a more efficient instrument of the wise purposes of

its founders, and is receiving the cordial support of the contributing

members of the international union which are actually represented in its

board of management. A commercial directory, in two volumes, containing a

mass of statistical matter descriptive of the industrial and commercial

interests of the various countries, has been printed in English, Spanish,

Portuguese, and French, and a monthly bulletin published in these four

languages and distributed in the Latin-American countries as well as in the

United States has proved to be a valuable medium for disseminating

information and furthering the varied interests of the international

union.

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