practical benefit to American industries and trade through the agency of
the diplomatic and consular officers has been steadily advanced, and in
order to lay such data before the public with the least delay the practice
was begun in January, 1898, of issuing the commercial reports from day to
day as they are received by the Department of State. It is believed that
for promptitude as well as fullness of information the service thus
supplied to our merchants and manufacturers will be found to show sensible
improvement and to merit the liberal support of Congress.
The experiences of the last year bring forcibly home to us a sense of the
burdens and the waste of war. We desire, in common with most civilized
nations, to reduce to the lowest possible point the damage sustained in
time of war by peaceable trade and commerce. It is true 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 into which an outbreak of
hostilities throws the entire commercial world. It should be our object,
therefore, to minimize, so far as practicable, this inevitable loss and
disturbance. This purpose can probably best be accomplished by an
international agreement to regard all private property at sea as exempt
from capture or destruction by the forces of belligerent powers. The United
States Government has 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 the Executive be authorized to correspond with the
governments of the principal maritime powers with a view of incorporating
into the permanent law of civilized nations the principle of the exemption
of all private property at sea, not contraband of war, from capture or
destruction by belligerent powers.
The Secretary of the Treasury reports that the receipts of the Government
from all sources during the fiscal year ended June 30, 1898, including
$64,751,223 received from sale of Pacific railroads, amounted to
$405,321,335, and its expenditures to $443,168,582. There was collected
from customs $149,575,062 and from internal revenue $170,900,641. Our
dutiable imports amounted to $324,635,479, a decrease of $58,156,690 over
the preceding year, and importations free of duty amounted to $291,414,175,
a decrease from the preceding year of $90,524,068. Internal-revenue
receipts exceeded those of the preceding year by $24,212,067.
The total tax collected on distilled spirits was $92,546,999; on
manufactured tobacco, $36,230,522, and on fermented liquors, $39,515,421.
We exported merchandise during the year amounting to $1,231,482,330, an
increase of $180,488,774 from the preceding year.
It is estimated upon the basis of present revenue laws that the receipts of
the Government for the year ending June 30, 1899, will be $577,874,647, and
its expenditures $689,874,647, resulting in a deficiency of $112,000,000.
On the 1st of December, 1898, there was held in the Treasury gold coin
amounting to $138,441,547, gold bullion amounting to $138,502,545, silver
bullion amounting to $93,359,250, and other forms of money amounting to
$451,963,981.
On the same date the amount of money of all kinds in circulation, or not
included in Treasury holdings, was $1,886,879,504, an increase for the year
of $165,794,966. Estimating our population at 75,194,000 at the time
mentioned, the per capita circulation was $25.09. On the same date there
was in the Treasury gold bullion amounting to $138,502,545.
The provisions made for strengthening the resources of the Treasury in
connection with the war have given increased confidence in the purpose and
power of the Government to maintain the present standard, and have
established more firmly than ever the national credit at home and abroad. A
marked evidence of this is found in the inflow of gold to the Treasury. Its
net gold holdings on November 1, 1898, were $239,885,162 as compared with
$153,573,147 on November 1, 1897, and an increase of net cash of
$207,756,100, November 1, 1897, to $300,238,275, November 1, 1898. The
present ratio of net Treasury gold to outstanding Government liabilities,
including United States notes, Treasury notes of 1890, silver certificates,
currency certificates, standard silver dollars, and fractional silver coin,
November 1, 1898, was 25.35 per cent, as compared with 16.96 per cent,
November 1, 1897.
I renew so much of my recommendation of December, 1897, as follows: That
when any of the United States notes are presented for redemption in gold
and are redeemed in gold, such notes shall be kept and set apart and only
paid out in exchange for gold. This is an obvious duty. If the holder of
the United States note prefers the gold and gets it from the Government, he
should not receive back from the Government a United States note without
paying gold in exchange for it. The reason for this is made all the more
apparent when the Government issues an interest-bearing debt to provide
gold for the redemption of United States notes--a non-interest-bearing
debt. Surely it should not pay them out again except on demand and for
gold. If they are put out in any other way, they may return again, to he
followed by another bond issue to redeem them--another interest-bearing
debt to redeem a non-interest-bearing debt. This recommendation was made in
the belief that such provisions of law would insure to a greater degree the
safety of the present standard, and better protect our currency from the
dangers to which it is subjected from a disturbance in the general business
conditions of the country.
In my judgment the present condition of the Treasury amply justifies the
immediate enactment of the legislation recommended one year ago, under
which a portion of the gold holdings should be placed in a trust fund from
which greenbacks should be redeemed upon presentation, but when once
redeemed should not thereafter be paid out except for gold.
It is not to be inferred that other legislation relating to our currency is
not required; on the contrary, there is an obvious demand for it.
The importance of adequate provision which will insure to our future a
money standard related as our money standard now is to that of our
commercial rivals is generally recognized.
The companion proposition that our domestic paper currency shall be kept
safe and yet be so related to the needs of our industries and internal
commerce as to be adequate and responsive to such needs is a proposition
scarcely less important. The subject, in all its parts, is commended to the
wise consideration of the Congress.
The annexation of Hawaii and the changed relations of the United States to
Cuba, Puerto Rico, and the Philippines resulting from the war, compel the
prompt adoption of a maritime policy by the United States. There should be
established regular and frequent steamship communication, encouraged by the
United States, under the American flag, with the newly acquired islands.
Spain furnished to its colonies, at an annual cost of about $2,000,000,
steamship lines communicating with a portion of the world's markets, as
well as with trade centers of the home Government. The United States will
not undertake to do less. It is our duty to furnish the people of Hawaii
with facilities, under national control, for their export and import trade.
It will be conceded that the present situation calls for legislation which
shall be prompt, durable, and liberal.
The part which American merchant vessels and their seamen performed in the
war with Spain demonstrates that this service, furnishing both pickets and
the second line of defense, is a national necessity, and should be
encouraged in every constitutional way. Details and methods for the
accomplishment of this purpose are discussed in the report of the Secretary
of the Treasury, to which the attention of Congress is respectfully
invited.
In my last annual message I recommended that Congress authorize the
appointment of a commission for the purpose of making systematic
investigations with reference to the cause and prevention of yellow fever.
This matter has acquired an increased importance as a result of the
military occupation of the island of Cuba and the commercial intercourse
between this island and the United States which we have every reason to
expect. The sanitary problems connected with our new relations with the
island of Cuba and the acquisition of Puerto Rico are no less important
than those relating to finance, commerce, and administration. It is my
earnest desire that these problems may be considered by competent experts
and that everything may be done which the most recent advances in sanitary
science can offer for the protection of the health of our soldiers in those
islands and of our citizens who are exposed to the dangers of infection
from the importation of yellow fever. I therefore renew my recommendation
that the authority of Congress may be given and a suitable appropriation
made to provide for a commission of experts to be appointed for the purpose
indicated.
Under the act of Congress approved April 26, 1898, authorizing the
President in his discretion, "upon a declaration of war by Congress, or a
declaration by Congress that war exists," I directed the increase of the
Regular Army to the maximum of 62,000, authorized in said act.
There are now in the Regular Army 57,862 officers and men. In said act it
was provided--
That at the end of any war in which the United States may become
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, under such regulations as the Secretary of War may establish, of
supernumerary commissioned officers 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 commissioned or
enlisted force of the Regular Army 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 1 hereof. The importance of
legislation for the permanent increase of the Army is therefore manifest,
and the recommendation of the Secretary of War for that purpose has my
unqualified approval. There can be no question that at this time, and
probably for some time in the future, 100,000 men will be none too many to
meet the necessities of the situation. At all events, whether that number
shall be required permanently or not, the power should be given to the
President to enlist that force if in his discretion it should be necessary;
and the further discretion should be given him to recruit for the Army
within the above limit from the inhabitants of the islands with the
government of which we are charged. It is my purpose to muster out the
entire Volunteer Army as soon as the Congress shall provide for the
increase of the regular establishment. This will be only an act of justice
and will be much appreciated by the brave men who left their homes and
employments to help the country in its emergency.
In my last annual message I stated: The Union Pacific Railway, main line,
was sold under the decree of the United States court for the district of
Nebraska on the 1st and 2d of November of this year. The amount due the
Government consisted of the principal of the subsidy bonds, $27,236,512,
and the accrued interest thereon, $31,211,711.75, making the total
indebtedness $58,448,223.75. The bid at the sale covered the first-mortgage
lien and the entire mortgage claim of the Government, principal and
interest. This left the Kansas Pacific case unconcluded. By a decree of the
court in that case an upset price for the property was fixed at a sum which
would yield to the Government only $2,500,000 upon its lien. The sale, at
the instance of the Government, was postponed first to December 15, 1897,
and later, upon the application of the United States, was postponed to the
16th day of February, 1898.
Having satisfied myself that the interests of the Government required that
an effort should be made to obtain a larger sum, I directed the Secretary
of the Treasury, under the act passed March 3, 1887, to pay out of the
Treasury to the persons entitled to receive the same the amounts due upon
all prior mortgages upon the Eastern and Middle divisions of said railroad
out of any money in the Treasury not otherwise appropriated, whereupon the
Attorney-General prepared a petition to be presented to the court, offering
to redeem said prior liens in such manner as the court might direct, and
praying that thereupon the United States might be held to be subrogated to
all the rights of said prior lien holders and that a receiver might be
appointed to take possession of the mortgaged premises and maintain and
operate the same until the court or Congress otherwise directed. Thereupon
the reorganization committee agreed that if said petition was withdrawn and
the sale allowed to proceed on the 16th of February, 1898, they would bid a
sum at the sale which would realize to the Government the entire principal
of its debt, $6,303,000.
Believing that no better price could be obtained and appreciating the
difficulties under which the Government would labor if it should become the
purchaser of the road at the sale, in the absence of any authority by
Congress to take charge of and operate the road I directed that upon the
guaranty of a minimum bid which should give the Government the principal of
its debt the sale should proceed. By this transaction the Government
secured an advance of $3,803,000 over and above the sum which the court had
fixed as the upset price, and which the reorganization committee had
declared was the maximum which they would pay for the property.
It is a gratifying fact that the result of these proceedings against the
Union Pacific system and the Kansas Pacific line is that the Government has
received on account of its subsidy claim the sum of $64,751,223.75, an
increase of $18,997,163.76 over the sum which the reorganization committee
originally agreed to bid for the joint property, the Government receiving
its whole claim, principal and interest, on the Union Pacific, and the
principal of its debt on the Kansas Pacific Railroad.
Steps had been taken to foreclose the Government's lien upon the Central
Pacific Railroad Company, but before action was commenced Congress passed
an act, approved July 7, 1898, creating a commission consisting of the
Secretary of the Treasury, the Attorney-General, and the Secretary of the
Interior, and their successors in office, with full power to settle the
indebtedness to the Government growing out of the issue of bonds in aid of
the construction of the Central Pacific and Western Pacific bond-aided
railroads, subject to the approval of the President.
No report has yet been made to me by the commission thus created. Whatever
action is had looking to a settlement of the indebtedness in accordance
with the act referred to will be duly submitted to the Congress.
I deem it my duty to call to the attention of Congress the condition of the
present building occupied by the Department of Justice. The business of
that Department has increased very greatly since it was established in its
present quarters. The building now occupied by it is neither large enough
nor of suitable arrangement for the proper accommodation of the business of
the Department. The Supervising Architect has pronounced it unsafe and
unsuited for the use to which it is put. The Attorney-General in his report
states that the library of the Department is upon the fourth floor, and
that all the space allotted to it is so crowded with books as to
dangerously overload the structure. The first floor is occupied by the
Court of Claims. The building is of an old and dilapidated appearance,
unsuited to the dignity which should attach to this important Department.
A proper regard for the safety, comfort, and convenience of the officers
and employees would justify the expenditure of a liberal sum of money in
the erection of a new building of commodious proportions and handsome
appearance upon the very advantageous site already secured for that
purpose, including the ground occupied by the present structure and
adjoining vacant lot, comprising in all a frontage of 201 feet on
Pennsylvania avenue and a depth of 136 feet.
In this connection I may likewise refer to the inadequate accommodations
provided for the Supreme Court in the Capitol, and suggest the wisdom of
making provision for the erection of a separate building for the court and
its officers and library upon available ground near the Capitol.
The postal service of the country advances with extraordinary growth.
Within twenty years both the revenues and the expenditures of the
Post-Office Department have multiplied threefold. In the last ten years
they have nearly doubled. Our postal business grows much more rapidly than
our population. It now involves an expenditure of $100,000,000 a year,
numbers 73,000 post-offices, and enrolls 200,000 employees. This remarkable
extension of a service which is an accurate index of the public conditions
presents gratifying evidence of the advancement of education, of the
increase of communication and business activity, and of the improvement of
mail facilities leading to their constantly augmenting use.
The war with Spain laid new and exceptional labors on the Post-Office
Department. The mustering of the military and naval forces of the United
States required special mail arrangements for every camp and every
campaign. The communication between home and camp was naturally eager and
expectant. In some of the larger places of rendezvous as many as 50,000
letters a day required handling. This necessity was met by the prompt
detail and dispatch of experienced men from the established force and by
directing all the instrumentalities of the railway mail and post-office
service, so far as necessary, to this new need. Congress passed an act
empowering the postmaster-General to establish offices or branches at every
military camp or station, and under this authority the postal machinery was
speedily put into effective operation.
Under the same authority, when our forces moved upon Cuba, Puerto Rico, and
the Philippines they were attended and followed by the postal service.
Though the act of Congress authorized the appointment of postmasters where
necessary, it was early determined that the public interests would best be
subserved, not by new designations, but by the detail of experienced men
familiar with every branch of the service, and this policy was steadily
followed. When the territory which was the theater of conflict came into
our possession, it became necessary to reestablish mail facilities for the
resident population as well as to provide them for our forces of
occupation, and the former requirement was met through the extension and
application of the latter obligation. I gave the requisite authority, and
the same general principle was applied to this as to other branches of
civil administration under military occupation. The details are more
particularly given in the report of the postmaster-General, and, while the
work is only just begun, it is pleasing to be able to say that the service
in the territory which has come under our control is already materially
improved.
The following recommendations of the Secretary of the Navy relative to the
increase of the Navy have my earnest approval:
1. Three seagoing sheathed and coppered battle ships of about 13,500 tons
trial displacement, carrying the heaviest armor and most powerful ordnance
for vessels of their class, and to have the highest practicable speed and
great radius of action. Estimated cost, exclusive of armor and armament,
$3,600,000 each.
2. Three sheathed and coppered armored cruisers of about 12,000 tons trial
displacement, carrying the heaviest armor and most powerful ordnance for
vessels of their class, and to have the highest practicable speed and great
radius of action. Estimated cost, exclusive of armor and armament,
$4,000,000 each.
3. Three sheathed and coppered protected cruisers of about 6,000 tons trial
displacement, to have the highest practicable speed and great radius of
action, and to carry the most powerful ordnance suitable for vessels of
their class. Estimated cost, exclusive of armor and armament, $2,150,000
each.
4. Six sheathed and coppered cruisers of about 2,500 tons trial
displacement, to have the highest speed compatible with good cruising
qualities, great radius of action, and to carry the most powerful ordnance
suited to vessels of their class. Estimated cost, exclusive of armament,
$1,141,800 each.
I join with the Secretary of the Navy in recommending that grades of
admiral and vice-admiral be temporarily revived, to be filled by officers
who have specially distinguished themselves in the war with Spain.
I earnestly urge upon Congress the importance of early legislation
providing for the taking of the Twelfth Census. This is necessary in view
of the large amount of work which must be performed in the preparation of
the schedules preparatory to the enumeration of the population.
There were on the pension rolls on June 30, 1898, 993,714 names, an
increase of nearly 18,000 over the number on the rolls on the same day of
the preceding year. The amount appropriated by the act of December 22,
1896, for the payment of pensions for the fiscal year of 1898 was
$140,000,000. Eight million seventy thousand eight hundred and seventy-two
dollars and forty-six cents was appropriated by the act of March 31, 1898,
to cover deficiencies in army pensions, and repayments in the sum of
$12,020.33, making a total of $148,082,892.79 available for the payment of
pensions during the fiscal year 1898. The amount disbursed from that sum
was $144,651,879.80, leaving a balance of $3,431,012.99 unexpended on the
30th of June, 1898, which was covered into the Treasury. There were 389
names added to the rolls during the year by special acts passed at the
second session of the Fifty-fifth Congress, making a total of 6,486
pensioners by Congressional enactments since 1861.
The total receipts of the Patent Office during the past year were
$1,253,948.44. The expenditures were $1,081,633.79, leaving a surplus of
$172,314.65.
The public lands disposed of by the Government during the year reached
8,453,896.92 acres, an increase of 614,780.26 acres over the previous year.
The total receipts from public lands during the fiscal year amounted to
$2,277,995.18, an increase of $190,063.90 over the preceding year. The
lands embraced in the eleven forest reservations which were suspended by
the act of June 4, 1897, again became subject to the operations of the
proclamations of February 22, 1897, creating them, which added an estimated
amount of 19,951,360 acres to the area embraced in the reserves previously
created. In addition thereto two new reserves were created during the
year--the Pine Mountain and Zaca Lake Reserve, in California, embracing
1,644,594 acres, and the Prescott Reserve, in Arizona, embracing 10,240
acres--while the Pecos River Reserve, in New Mexico, has been changed and
enlarged to include 120,000 additional acres.
At the close of the year thirty forest reservations, not including those of
the Afognak Forest and the Fish-Culture Reserve, in Alaska, had been
created by Executive proclamations under section 24 of the act of March 3,
1891, embracing an estimated area of 40,719,474 acres.
The Department of the Interior has inaugurated a forest system, made
possible by the act of July, 1898, for a graded force of officers in
control of the reserves. This system has only been in full operation since
August, but good results have already been secured in many sections. The
reports received indicate that the system of patrol has not only prevented
destructive fires from gaining headway, but has diminished the number of
fires.