WASHINGTON, _December 9, 1868_.
_Fellow-Citizens of the Senate and House of Representatives_:
Upon the reassembling of Congress it again becomes my duty to call your
attention to the state of the Union and to its continued disorganized
condition under the various laws which have been passed upon the subject
of reconstruction.
It may be safely assumed as an axiom in the government of states that
the greatest wrongs inflicted upon a people are caused by unjust and
arbitrary legislation, or by the unrelenting decrees of despotic rulers,
and that the timely revocation of injurious and oppressive measures is
the greatest good that can be conferred upon a nation. The legislator or
ruler who has the wisdom and magnanimity to retrace his steps when
convinced of error will sooner or later be rewarded with the respect and
gratitude of an intelligent and patriotic people.
Our own history, although embracing a period less than a century,
affords abundant proof that most, if not all, of our domestic troubles
are directly traceable to violations of the organic law and excessive
legislation. The most striking illustrations of this fact are furnished
by the enactments of the past three years upon the question of
reconstruction. After a fair trial they have substantially failed and
proved pernicious in their results, and there seems to be no good reason
why they should longer remain upon the statute book. States to which the
Constitution guarantees a republican form of government have been
reduced to military dependencies, in each of which the people have been
made subject to the arbitrary will of the commanding general. Although
the Constitution requires that each State shall be represented in
Congress, Virginia, Mississippi, and Texas are yet excluded from the
two Houses, and, contrary to the express provisions of that instrument,
were denied participation in the recent election for a President and
Vice-President of the United States. The attempt to place the white
population under the domination of persons of color in the South has
impaired, if not destroyed, the kindly relations that had previously
existed between them; and mutual distrust has engendered a feeling of
animosity which, leading in some instances to collision and bloodshed,
has prevented that cooperation between the two races so essential to the
success of industrial enterprise in the Southern States. Nor have the
inhabitants of those States alone suffered from the disturbed condition
of affairs growing out of these Congressional enactments. The entire
Union has been agitated by grave apprehensions of troubles which might
again involve the peace of the nation; its interests have been
injuriously affected by the derangement of business and labor, and the
consequent want of prosperity throughout that portion of the country.
The Federal Constitution--the _magna charta_ of American rights, under
whose wise and salutary provisions we have successfully conducted all
our domestic and foreign affairs, sustained ourselves in peace and in
war, and become a great nation among the powers of the earth--must
assuredly be now adequate to the settlement of questions growing out of
the civil war, waged alone for its vindication. This great fact is made
most manifest by the condition of the country when Congress assembled in
the month of December, 1865. Civil strife had ceased, the spirit of
rebellion had spent its entire force, in the Southern States the people
had warmed into national life, and throughout the whole country a
healthy reaction in public sentiment had taken place. By the application
of the simple yet effective provisions of the Constitution the executive
department, with the voluntary aid of the States, had brought the work
of restoration as near completion as was within the scope of its
authority, and the nation was encouraged by the prospect of an early
and satisfactory adjustment of all its difficulties. Congress, however,
intervened, and, refusing to perfect the work so nearly consummated,
declined to admit members from the unrepresented States, adopted
a series of measures which arrested the progress of restoration,
frustrated all that had been so successfully accomplished, and, after
three years of agitation and strife, has left the country further from
the attainment of union and fraternal feeling than at the inception of
the Congressional plan of reconstruction. It needs no argument to show
that legislation which has produced such baneful consequences should
be abrogated, or else made to conform to the genuine principles of
republican government.
Under the influence of party passion and sectional prejudice, other acts
have been passed not warranted by the Constitution. Congress has already
been made familiar with my views respecting the "tenure-of-office bill."
Experience has proved that its repeal is demanded by the best interests
of the country, and that while it remains in force the President can not
enjoin that rigid accountability of public officers so essential to an
honest and efficient execution of the laws. Its revocation would enable
the executive department to exercise the power of appointment and
removal in accordance with the original design of the Federal
Constitution.
The act of March 2, 1867, making appropriations for the support of the
Army for the year ending June 30, 1868, and for other purposes, contains
provisions which interfere with the President's constitutional functions
as Commander in Chief of the Army and deny to States of the Union
the right to protect themselves by means of their own militia. These
provisions should be at once annulled; for while the first might, in
times of great emergency, seriously embarrass the Executive in efforts
to employ and direct the common strength of the nation for its
protection and preservation, the other is contrary to the express
declaration of the Constitution that "a well-regulated militia being
necessary to the security of a free state, the right of the people to
keep and bear arms shall not be infringed."
It is believed that the repeal of all such laws would be accepted by
the American people as at least a partial return to the fundamental
principles of the Government, and an indication that hereafter the
Constitution is to be made the nation's safe and unerring guide. They
can be productive of no permanent benefit to the country, and should not
be permitted to stand as so many monuments of the deficient wisdom which
has characterized our recent legislation.
The condition of our finances demands the early and earnest
consideration of Congress. Compared with the growth of our population,
the public expenditures have reached an amount unprecedented in our
history.
The population of the United States in 1790 was nearly 4,000,000 people.
Increasing each decade about 33 per cent, it reached in 1860 31,000,000,
an increase of 700 per cent on the population in 1790. In 1869 it is
estimated that it will reach 38,000,000, or an increase of 868 per cent
in seventy-nine years.
The annual expenditures of the Federal Government in 1791 were
$4,200,000; in 1820, $13,200,000; in 1850, forty-one millions; in 1860,
sixty-three millions; in 1865, nearly thirteen hundred millions; and
in 1869 it is estimated by the Secretary of the Treasury, in his last
annual report, that they will be three hundred and seventy-two millions.
By comparing the public disbursements of 1869, as estimated, with those
of 1791, it will be seen that the increase of expenditure since the
beginning of the Government has been 8,618 per cent, while the increase
of the population for the same period was only 868 per cent. Again,
the expenses of the Government in 1860, the year of peace immediately
preceding the war, were only sixty-three millions, while in 1869, the
year of peace three years after the war, it is estimated they will be
three hundred and seventy-two millions, an increase of 489 per cent,
while the increase of population was only 21 per cent for the same
period.
These statistics further show that in 1791 the annual national expenses,
compared with the population, were little more than $1 per capita, and
in 1860 but $2 per capita; while in 1869 they will reach the extravagant
sum of $9.78 per capita.
It will be observed that all these statements refer to and exhibit the
disbursements of peace periods. It may, therefore, be of interest to
compare the expenditures of the three war periods--the war with Great
Britain, the Mexican War, and the War of the Rebellion.
In 1814 the annual expenses incident to the War of 1812 reached their
highest amount--about thirty-one millions--while our population slightly
exceeded 8,000,000, showing an expenditure of only $3.80 per capita.
In 1847 the expenditures growing out of the war with Mexico reached
fifty-five millions, and the population about 21,000,000, giving only
$2.60 per capita for the war expenses of that year. In 1865 the
expenditures called for by the rebellion reached the vast amount of
twelve hundred and ninety millions, which, compared with a population
of 34,000,000, gives $38.20 per capita.
From the 4th day of March, 1789, to the 30th of June, 1861, the entire
expenditures of the Government were $1,700,000,000. During that period
we were engaged in wars with Great Britain and Mexico, and were involved
in hostilities with powerful Indian tribes; Louisiana was purchased from
France at a cost of $15,000,000; Florida was ceded to us by Spain for
five millions; California was acquired from Mexico for fifteen millions,
and the territory of New Mexico was obtained from Texas for the sum of
ten millions. Early in 1861 the War of the Rebellion commenced; and
from the 1st of July of that year to the 30th of June, 1865, the public
expenditures reached the enormous aggregate of thirty-three hundred
millions. Three years of peace have intervened, and during that time the
disbursements of the Government have successively been five hundred and
twenty millions, three hundred and forty-six millions, and three hundred
and ninety-three millions. Adding to these amounts three hundred and
seventy-two millions, estimated as necessary for the fiscal year ending
the 30th of June, 1869, we obtain a total expenditure of $1,600,000,000
during the four years immediately succeeding the war, or nearly as much
as was expended during the seventy-two years that preceded the rebellion
and embraced the extraordinary expenditures already named.
These startling facts clearly illustrate the necessity of
retrenchment in all branches of the public service. Abuses which were
tolerated during the war for the preservation of the nation will not be
endured by the people, now that profound peace prevails. The receipts
from internal revenues and customs have during the past three years
gradually diminished, and the continuance of useless and extravagant
expenditures will involve us in national bankruptcy, or else make
inevitable an increase of taxes, already too onerous and in many
respects obnoxious on account of their inquisitorial character. One
hundred millions annually are expended for the military force, a large
portion of which is employed in the execution of laws both unnecessary
and unconstitutional; one hundred and fifty millions are required each
year to pay the interest on the public debt; an army of taxgatherers
impoverishes the nation, and public agents, placed by Congress beyond
the control of the Executive, divert from their legitimate purposes
large sums of money which they collect from the people in the name of
the Government. Judicious legislation and prudent economy can alone
remedy defects and avert evils which, if suffered to exist, can not fail
to diminish confidence in the public councils and weaken the attachment
and respect of the people toward their political institutions. Without
proper care the small balance which it is estimated will remain in the
Treasury at the close of the present fiscal year will not be realized,
and additional millions be added to a debt which is now enumerated by
billions.
It is shown by the able and comprehensive report of the Secretary of
the Treasury that the receipts for the fiscal year ending June 30, 1868,
were $405,638,083, and that the expenditures for the same period were
$377,340,284, leaving in the Treasury a surplus of $28,297,798. It is
estimated that the receipts during the present fiscal year, ending June
30, 1869, will be $341,392,868 and the expenditures $336,152,470,
showing a small balance of $5,240,398 in favor of the Government. For
the fiscal year ending June 30, 1870, it is estimated that the receipts
will amount to $327,000,000 and the expenditures to $303,000,000,
leaving an estimated surplus of $24,000,000.
It becomes proper in this connection to make a brief reference to our
public indebtedness, which has accumulated with such alarming rapidity
and assumed such colossal proportions.
In 1789, when the Government commenced operations under the Federal
Constitution, it was burdened with an indebtedness of $75,000,000,
created during the War of the Revolution. This amount had been reduced
to $45,000,000 when, in 1812, war was declared against Great Britain.
The three years' struggle that followed largely increased the national
obligations, and in 1816 they had attained the sum of $127,000,000. Wise
and economical legislation, however, enabled the Government to pay the
entire amount within a period of twenty years, and the extinguishment
of the national debt filled the land with rejoicing and was one of the
great events of President Jackson's Administration. After its redemption
a large fund remained in the Treasury, which was deposited for
safe-keeping with the several States, on condition that it should be
returned when required by the public wants. In 1849--the year after the
termination of an expensive war with Mexico--we found ourselves involved
in a debt of $64,000,000; and this was the amount owed by the Government
in 1860, just prior to the outbreak of the rebellion. In the spring of
1861 our civil war commenced. Each year of its continuance made an
enormous addition to the debt; and when, in the spring of 1865, the
nation successfully emerged from the conflict, the obligations of the
Government had reached the immense sum of $2,873,992,909. The Secretary
of the Treasury shows that on the 1st day of November, 1867, this amount
had been reduced to $2,491,504,450; but at the same time his report
exhibits an increase during the past year of $35,625,102, for the debt
on the 1st day of November last is stated to have been $2,527,129,552.
It is estimated by the Secretary that the returns for the past month
will add to our liabilities the further sum of $11,000,000, making a
total increase during thirteen months of $46,500,000.
In my message to Congress December 4, 1865, it was suggested that a
policy should be devised which, without being oppressive to the people,
would at once begin to effect a reduction of the debt, and, if persisted
in, discharge it fully within a definite number of years. The Secretary
of the Treasury forcibly recommends legislation of this character,
and justly urges that the longer it is deferred the more difficult
must become its accomplishment. We should follow the wise precedents
established in 1789 and 1816, and without further delay make provision
for the payment of our obligations at as early a period as may be
practicable. The fruits of their labors should be enjoyed by our
citizens rather than used to build up and sustain moneyed monopolies in
our own and other lands. Our foreign debt is already computed by the
Secretary of the Treasury at $850,000,000; citizens of foreign countries
receive interest upon a large portion of our securities, and American
taxpayers are made to contribute large sums for their support. The idea
that such a debt is to become permanent should be at all times discarded
as involving taxation too heavy to be borne, and payment once in every
sixteen years, at the present rate of interest, of an amount equal to
the original sum. This vast debt, if permitted to become permanent and
increasing, must eventually be gathered into the hands of a few, and
enable them to exert a dangerous and controlling power in the affairs of
the Government. The borrowers would become servants to the lenders, the
lenders the masters of the people. We now pride ourselves upon having
given freedom to 4,000,000 of the colored race; it will then be our
shame that 40,000,000 of people, by their own toleration of usurpation
and profligacy, have suffered themselves to become enslaved, and merely
exchanged slave owners for new taskmasters in the shape of bondholders
and taxgatherers. Besides, permanent debts pertain to monarchical
governments, and, tending to monopolies, perpetuities, and class
legislation, are totally irreconcilable with free institutions.
Introduced into our republican system, they would gradually but surely
sap its foundations, eventually subvert our governmental fabric, and
erect upon its ruins a moneyed aristocracy. It is our sacred duty to
transmit unimpaired to our posterity the blessings of liberty which were
bequeathed to us by the founders of the Republic, and by our example
teach those who are to follow us carefully to avoid the dangers which
threaten a free and independent people.
Various plans have been proposed for the payment of the public debt.
However they may have varied as to the time and mode in which it should
be redeemed, there seems to be a general concurrence as to the propriety
and justness of a reduction in the present rate of interest. The
Secretary of the Treasury in his report recommends 5 per cent; Congress,
in a bill passed prior to adjournment on the 27th of July last, agreed
upon 4 and 4-1/2 per cent; while by many 3 per cent has been held to be
an amply sufficient return for the investment. The general impression as
to the exorbitancy of the existing rate of interest has led to an
inquiry in the public mind respecting the consideration which the
Government has actually received for its bonds, and the conclusion is
becoming prevalent that the amount which it obtained was in real money
three or four hundred per cent less than the obligations which it issued
in return. It can not be denied that we are paying an extravagant
percentage for the use of the money borrowed, which was paper currency,
greatly depreciated below the value of coin. This fact is made apparent
when we consider that bondholders receive from the Treasury upon each
dollar they own in Government securities 6 per cent in gold, which is
nearly or quite equal to 9 per cent in currency; that the bonds are
then converted into capital for the national banks, upon which those
institutions issue their circulation, bearing 6 per cent interest; and
that they are exempt from taxation by the Government and the States, and
thereby enhanced 2 per cent in the hands of the holders. We thus have an
aggregate of 17 per cent which may be received upon each dollar by the
owners of Government securities. A system that produces such results is
justly regarded as favoring a few at the expense of the many, and has
led to the further inquiry whether our bondholders, in view of the
large profits which they have enjoyed, would themselves be averse to
a settlement of our indebtedness upon a plan which would yield them a
fair remuneration and at the same time be just to the taxpayers of the
nation. Our national credit should be sacredly observed, but in making
provision for our creditors we should not forget what is due to the
masses of the people. It may be assumed that the holders of our
securities have already received upon their bonds a larger amount than
their original investment, measured by a gold standard. Upon this
statement of facts it would seem but just and equitable that the 6 per
cent interest now paid by the Government should be applied to the
reduction of the principal in semiannual installments, which in sixteen
years and eight months would liquidate the entire national debt. Six per
cent in gold would at present rates be equal to 9 per cent in currency,
and equivalent to the payment of the debt one and a half times in a
fraction less than seventeen years. This, in connection with all the
other advantages derived from their investment, would afford to the
public creditors a fair and liberal compensation for the use of their
capital, and with this they should be satisfied. The lessons of the past
admonish the lender that it is not well to be overanxious in exacting
from the borrower rigid compliance with the letter of the bond.
If provision be made for the payment of the indebtedness of the
Government in the manner suggested, our nation will rapidly recover its
wonted prosperity. Its interests require that some measure should be
taken to release the large amount of capital invested in the securities
of the Government. It is not now merely unproductive, but in taxation
annually consumes $150,000,000, which would otherwise be used by our
enterprising people in adding to the wealth of the nation. Our commerce,
which at one time successfully rivaled that of the great maritime
powers, has, rapidly diminished, and our industrial interests are
in a depressed and languishing condition. The development of our
inexhaustible resources is checked, and the fertile fields of the South
are becoming waste for want of means to till them. With the release of
capital, new life would be infused into the paralyzed energies of our
people and activity and vigor imparted to every branch of industry. Our
people need encouragement in their efforts to recover from the effects
of the rebellion and of injudicious legislation, and it should be the
aim of the Government to stimulate them by the prospect of an early
release from the burdens which impede their prosperity. If we can not
take the burdens from their shoulders, we should at least manifest
a willingness to help to bear them.
In referring to the condition of the circulating medium, I shall merely
reiterate substantially that portion of my last annual message which
relates to that subject.
The proportion which the currency of any country should bear to
the whole value of the annual produce circulated by its means is a
question upon which political economists have not agreed. Nor can it
be controlled by legislation, but must be left to the irrevocable laws
which everywhere regulate commerce and trade. The circulating medium
will ever irresistibly flow to those points where it is in greatest
demand. The law of demand and supply is as unerring as that which
regulates the tides of the ocean; and, indeed, currency, like the tides,
has its ebbs and flows throughout the commercial world.
At the beginning of the rebellion the bank-note circulation of the
country amounted to not much more than $200,000,000; now the circulation
of national-bank notes and those known as "legal-tenders" is nearly
seven hundred millions. While it is urged by some that this amount
should be increased, others contend that a decided reduction is
absolutely essential to the best interests of the country. In view of
these diverse opinions, it may be well to ascertain the real value of
our paper issues when compared with a metallic or convertible currency.
For this purpose let us inquire how much gold and silver could be
purchased by the seven hundred millions of paper money now in
circulation. Probably not more than half the amount of the latter;
showing that when our paper currency is compared with gold and silver
its commercial value is compressed into three hundred and fifty
millions. This striking fact makes it the obvious duty of the
Government, as early as may be consistent with the principles of sound
political economy, to take such measures as will enable the holders of
its notes and those of the national banks to convert them, without loss,
into specie or its equivalent. A reduction of our paper circulating
medium need not necessarily follow. This, however, would depend upon the
law of demand and supply, though it should be borne in mind that by
making legal-tender and bank notes convertible into coin or its
equivalent their present specie value in the hands of their holders
would be enhanced 100 per cent.
Legislation for the accomplishment of a result so desirable is demanded
by the highest public considerations. The Constitution contemplates that
the circulating medium of the country shall be uniform in quality and
value. At the time of the formation of that instrument the country had
just emerged from the War of the Revolution, and was suffering from the
effects of a redundant and worthless paper currency. The sages of that
period were anxious to protect their posterity from the evils which they
themselves had experienced. Hence in providing a circulating medium they
conferred upon Congress the power to coin money and regulate the value
thereof, at the same time prohibiting the States from making anything
but gold and silver a tender in payment of debts.
The anomalous condition of our currency is in striking contrast with
that which was originally designed. Our circulation now embraces, first,
notes of the national banks, which are made receivable for all dues to
the Government, excluding imposts, and by all its creditors, excepting
in payment of interest upon its bonds and the securities themselves;
second, legal tender, issued by the United States, and which the law
requires shall be received as well in payment of all debts between
citizens as of all Government dues, excepting imposts; and, third, gold
and silver coin. By the operation of our present system of finance,
however, the metallic currency, when collected, is reserved only for one
class of Government creditors, who, holding its bonds, semiannually
receive their interest in coin from the National Treasury. There is no
reason which will be accepted as satisfactory by the people why those
who defend us on the land and protect us on the sea; the pensioner upon
the gratitude of the nation, bearing the scars and wounds received while
in its service; the public servants in the various departments of the
Government; the farmer who supplies the soldiers of the Army and the
sailors of the Navy; the artisan who toils in the nation's workshops,
or the mechanics and laborers who build its edifices and construct
its forts and vessels of war, should, in payment of their just and
hard-earned dues, receive depreciated paper, while another class of
their countrymen, no more deserving, are paid in coin of gold and
silver. Equal and exact justice requires that all the creditors of the
Government should be paid in a currency possessing a uniform value.
This can only be accomplished by the restoration of the currency to the
standard established by the Constitution, and by this means we would
remove a discrimination which may, if it has not already done so, create
a prejudice that may become deep-rooted and widespread and imperil the
national credit.
The feasibility of making our currency correspond with the
constitutional standard may be seen by reference to a few facts derived
from our commercial statistics.
The aggregate product of precious metals in the United States from 1849
to 1867 amounted to $1,174,000,000, while for the same period the net
exports of specie were $741,000,000. This shows an excess of product
over net exports of $433,000,000. There are in the Treasury $103,407,985
in coin; in circulation in the States on the Pacific Coast about
$40,000,000, and a few millions in the national and other banks--in all
less than $160,000,000. Taking into consideration the specie in the
country prior to 1849 and that produced since 1867, and we have more
than $300,000,000 not accounted for by exportation or by returns of the
Treasury, and therefore most probably remaining in the country.
These are important facts, and show how completely the inferior
currency will supersede the better, forcing it from circulation among
the masses and causing it to be exported as a mere article of trade, to
add to the money capital of foreign lands. They show the necessity of
retiring our paper money, that the return of gold and silver to the
avenues of trade may be invited and a demand created which will cause
the retention at home of at least so much of the productions of our
rich and inexhaustible gold-bearing fields as may be sufficient for
purposes of circulation. It is unreasonable to expect a return to a
sound currency so long as the Government and banks, by continuing to
issue irredeemable notes, fill the channels of circulation with
depreciated paper. Notwithstanding a coinage by our mints since 1849 of
$874,000,000, the people are now strangers to the currency which was
designed for their use and benefit, and specimens of the precious metals
bearing the national device are seldom seen, except when produced to
gratify the interest excited by their novelty. If depreciated paper is
to be continued as the permanent currency of the country, and all our
coin is to become a mere article of traffic and speculation, to the
enhancement in price of all that is indispensable to the comfort of the
people, it would be wise economy to abolish our mints, thus saving the
nation the care and expense incident to such establishments, and let our
precious metals be exported in bullion. The time has come, however, when
the Government and national banks should be required to take the most
efficient steps and make all necessary arrangements for a resumption of
specie payments. Let specie payments once be earnestly inaugurated by
the Government and banks, and the value of the paper circulation would
directly approximate a specie standard.
Specie payments having been resumed by the Government and banks, all
notes or bills of paper issued by either of a less denomination than $20
should by law be excluded from circulation, so that the people may have
the benefit and convenience of a gold and silver currency which in all
their business transactions will be uniform in value at home and abroad.
Every man of property or industry, every man who desires to preserve
what he honestly possesses or to obtain what he can honestly earn, has a
direct interest in maintaining a safe circulating medium--such a medium
as shall be real and substantial, not liable to vibrate with opinions,
not subject to be blown up or blown down by the breath of speculation,
but to be made stable and secure. A disordered currency is one of the
greatest political evils. It undermines the virtues necessary for the
support of the social system and encourages propensities destructive of
its happiness; it wars against industry, frugality, and economy, and it
fosters the evil spirits of extravagance and speculation.
It has been asserted by one of our profound and most gifted statesmen
that--
Of all the contrivances for cheating the laboring classes of mankind,
none has been more effectual than that which deludes them with paper
money. This is the most effectual of inventions to fertilize the rich
man's fields by the sweat of the poor man's brow. Ordinary tyranny,
oppression, excessive taxation--these bear lightly on the happiness of
the mass of the community compared with a fraudulent currency and the
robberies committed by depreciated paper. Our own history has recorded
for our instruction enough, and more than enough, of the demoralizing
tendency, the injustice, and the intolerable oppression on the virtuous
and well-disposed of a degraded paper currency authorized by law or in
any way countenanced by government.
It is one of the most successful devices, in times of peace or war,
of expansions or revulsions, to accomplish the transfer of all the
precious metals from the great mass of the people into the hands of the
few, where they are hoarded in secret places or deposited under bolts
and bars, while the people are left to endure all the inconvenience,
sacrifice, and demoralization resulting from the use of depreciated and
worthless paper.
The Secretary of the Interior in his report gives valuable information
in reference to the interests confided to the supervision of his
Department, and reviews the operations of the Land Office, Pension
Office, Patent Office, and Indian Bureau.
During the fiscal year ending June 30, 1868, 6,655,700 acres of public
land were disposed of. The entire cash receipts of the General Land
Office for the same period were $1,632,745, being greater by $284,883
than the amount realized from the same sources during the previous year.
The entries under the homestead law cover 2,328,923 acres, nearly
one-fourth of which was taken under the act of June 21, 1866, which
applies only to the States of Alabama, Mississippi, Louisiana, Arkansas,
and Florida.
On the 30th of June, 1868, 169,643 names were borne on the pension
rolls, and during the year ending on that day the total amount paid for
pensions, including the expenses of disbursement, was $24,010,982, being
$5,391,025 greater than that expended for like purposes during the
preceding year.
During the year ending the 30th of September last the expenses of the
Patent Office exceeded the receipts by $171, and, including reissues
and designs, 14,153 patents were issued.
Treaties with various Indian tribes have been concluded, and will be
submitted to the Senate for its constitutional action. I cordially
sanction the stipulations which provide for reserving lands for the
various tribes, where they may be encouraged to abandon their nomadic
habits and engage in agricultural and industrial pursuits. This policy,
inaugurated many years since, has met with signal success whenever it
has been pursued in good faith and with becoming liberality by the
United States. The necessity for extending it as far as practicable in
our relations with the aboriginal population is greater now than at any
preceding period. Whilst we furnish subsistence and instruction to the
Indians and guarantee the undisturbed enjoyment of their treaty rights,
we should habitually insist upon the faithful observance of their
agreement to remain within their respective reservations. This is the
only mode by which collisions with other tribes and with the whites can
be avoided and the safety of our frontier settlements secured.
The companies constructing the railway from Omaha to Sacramento have
been most energetically engaged in prosecuting the work, and it is
believed that the line will be completed before the expiration of
the next fiscal year. The 6 per cent bonds issued to these companies
amounted on the 5th instant to $44,337,000, and additional work had
been performed to the extent of $3,200,000.
The Secretary of the Interior in August last invited my attention
to the report of a Government director of the Union Pacific Railroad
Company who had been specially instructed to examine the location,
construction, and equipment of their road. I submitted for the opinion
of the Attorney-General certain questions in regard to the authority of
the Executive which arose upon this report and those which had from time
to time been presented by the commissioners appointed to inspect each
successive section of the work. After carefully considering the law of
the case, he affirmed the right of the Executive to order, if necessary,
a thorough revision of the entire road. Commissioners were thereupon
appointed to examine this and other lines, and have recently submitted a
statement of their investigations, of which the report of the Secretary
of the Interior furnishes specific information.
The report of the Secretary of War contains information of interest and
importance respecting the several bureaus of the War Department and the
operations of the Army. The strength of our military force on the 30th
of September last was 48,000 men, and it is computed that by the 1st of
January next this number will be decreased to 43,000. It is the opinion
of the Secretary of War that within the next year a considerable
diminution of the infantry force may be made without detriment to the
interests of the country; and in view of the great expense attending the
military peace establishment and the absolute necessity of retrenchment
wherever it can be applied, it is hoped that Congress will sanction the
reduction which his report recommends. While in 1860 sixteen thousand
three hundred men cost the nation $16,472,000, the sum of $65,682,000
is estimated as necessary for the support of the Army during the fiscal
year ending June 30, 1870. The estimates of the War Department for
the last two fiscal years were, for 1867, $33,814,461, and for 1868
$25,205,669. The actual expenditures during the same periods were,
respectively, $95,224,415 and $123,246,648. The estimate submitted in
December last for the fiscal year ending June 30, 1869, was $77,124,707;
the expenditures for the first quarter, ending the 30th of September
last, were $27,219,117, and the Secretary of the Treasury gives
$66,000,000 as the amount which will probably be required during the
remaining three quarters, if there should be no reduction of the
Army--making its aggregate cost for the year considerably in excess
of ninety-three millions. The difference between the estimates and
expenditures for the three fiscal years which have been named is thus
shown to be $175,545,343 for this single branch of the public service.
The report of the Secretary of the Navy exhibits the operations of that
Department and of the Navy during the year. A considerable reduction of
the force has been effected. There are 42 vessels, carrying 411 guns, in
the six squadrons which are established in different parts of the world.
Three of these vessels are returning to the United States and 4 are used
as storeslips, leaving the actual cruising force 35 vessels, carrying
356 guns. The total number of vessels in the Navy is 206, mounting 1,743
guns. Eighty-one vessels of every description are in use, armed with 696
guns. The number of enlisted men in the service, including apprentices,
has been reduced to 8,500. An increase of navy-yard facilities is
recommended as a measure which will in the event of war be promotive
of economy and security. A more thorough and systematic survey of the
North Pacific Ocean is advised in view of our recent acquisitions, our
expanding commerce, and the increasing intercourse between the Pacific
States and Asia. The naval pension fund, which consists of a moiety of
the avails of prizes captured during the war, amounts to $14,000,000.
Exception is taken to the act of 23d July last, which reduces the
interest on the fund loaned to the Government by the Secretary, as
trustee, to 3 per cent instead of 6 per cent, which was originally
stipulated when the investment was made. An amendment of the pension
laws is suggested to remedy omissions and defects in existing
enactments. The expenditures of the Department during the last fiscal
year were $20,120,394, and the estimates for the coming year amount
to $20,993,414.
The Postmaster-General's report furnishes a full and clear exhibit of
the operations and condition of the postal service. The ordinary postal
revenue for the fiscal year ending June 30, 1868, was $16,292,600,
the total expenditures, embracing all the service for which special
appropriations have been made by Congress, amounted to $22,730,592,
showing an excess of expenditures of $6,437,991. Deducting from the
expenditures the sum of $1,896,525, the amount of appropriations for
ocean-steamship and other special service, the excess of expenditures
was $4,541,466. By using an unexpended balance in the Treasury of
$3,800,000 the actual sum for which a special appropriation is required
to meet the deficiency is $741,466. The causes which produced this large
excess of expenditure over revenue were the restoration of service in
the late insurgent States and the putting into operation of new service
established by acts of Congress, which amounted within the last two
years and a half to about 48,700 miles--equal to more than one-third
of the whole amount of the service at the close of the war. New postal
conventions with Great Britain, North Germany, Belgium, the Netherlands,
Switzerland, and Italy, respectively, have been carried into effect.
Under their provisions important improvements have resulted in reduced
rates of international postage and enlarged mail facilities with
European countries. The cost of the United States transatlantic ocean
mail service since January 1, 1868, has been largely lessened under the
operation of these new conventions, a reduction of over one-half having
been effected under the new arrangements for ocean mail steamship
service which went into effect on that date. The attention of Congress
is invited to the practical suggestions and recommendations made in his
report by the Postmaster-General.
No important question has occurred during the last year in our
accustomed cordial and friendly intercourse with Costa Rica, Guatemala,
Honduras, San Salvador, France, Austria, Belgium, Switzerland, Portugal,
the Netherlands, Denmark, Sweden and Norway, Rome, Greece, Turkey,
Persia, Egypt, Liberia, Morocco, Tripoli, Tunis, Muscat, Siam, Borneo,
and Madagascar.
Cordial relations have also been maintained with the Argentine and the
Oriental Republics. The expressed wish of Congress that our national
good offices might be tendered to those Republics, and also to Brazil
and Paraguay, for bringing to an end the calamitous war which has so
long been raging in the valley of the La Plata, has been assiduously
complied with and kindly acknowledged by all the belligerents. That
important negotiation, however, has thus far been without result.
Charles A. Washburn, late United States minister to Paraguay, having
resigned, and being desirous to return to the United States, the
rear-admiral commanding the South Atlantic Squadron was early directed
to send a ship of war to Asuncion, the capital of Paraguay, to receive
Mr. Washburn and his family and remove them from a situation which was
represented to be endangered by faction and foreign war. The Brazilian
commander of the allied invading forces refused permission to the _Wasp_
to pass through the blockading forces, and that vessel returned to
its accustomed anchorage. Remonstrance having been made against this
refusal, it was promptly overruled, and the _Wasp_ therefore resumed
her errand, received Mr. Washburn and his family, and conveyed them to
a safe and convenient seaport. In the meantime an excited controversy
had arisen between the President of Paraguay and the late United States
minister, which, it is understood, grew out of his proceedings in
giving asylum in the United States legation to alleged enemies of
that Republic. The question of the right to give asylum is one always
difficult and often productive of great embarrassment. In states well
organized and established, foreign powers refuse either to concede or
exercise that right, except as to persons actually belonging to the
diplomatic service. On the other hand, all such powers insist upon
exercising the right of asylum in states where the law of nations is
not fully acknowledged, respected, and obeyed.
The President of Paraguay is understood to have opposed to Mr.
Washburn's proceedings the injurious and very improbable charge of
personal complicity in insurrection and treason. The correspondence,
however, has not yet reached the United States.
Mr. Washburn, in connection with this controversy, represents that two
United States citizens attached to the legation were arbitrarily seized
at his Side, when leaving the capital of Paraguay, committed to prison,
and there subjected to torture for the purpose of procuring confessions
of their own criminality and testimony to support the President's
allegations against the United States minister. Mr. McMahon, the newly
appointed minister to Paraguay, having reached the La Plata, has been
instructed to proceed without delay to Asuncion, there to investigate
the whole subject. The rear-admiral commanding the United States South
Atlantic Squadron has been directed to attend the new minister with a
proper naval force to sustain such just demands as the occasion may
require, and to vindicate the rights of the United States citizens
referred to and of any others who may be exposed to danger in the
theater of war. With these exceptions, friendly relations have been
maintained between the United States and Brazil and Paraguay.
Our relations during the past year with Bolivia, Ecuador, Peru,
and Chile have become especially friendly and cordial. Spain and the
Republics of Peru, Bolivia, and Ecuador have expressed their willingness
to accept the mediation of the United States for terminating the war
upon the South Pacific coast. Chile has not finally declared upon the
question. In the meantime the conflict has practically exhausted itself,
since no belligerent or hostile movement has been made by either party
during the last two years, and there are no indications of a present
purpose to resume hostilities on either side. Great Britain and France
have cordially seconded our proposition of mediation, and I do not
forego the hope that it may soon be accepted by all the belligerents and
lead to a secure establishment of peace and friendly relations between
the Spanish American Republics of the Pacific and Spain--a result
which would be attended with common benefits to the belligerents
and much advantage to all commercial nations. I communicate, for
the consideration of Congress, a correspondence which shows that the
Bolivian Republic has established the extremely liberal principle of
receiving into its citizenship any citizen of the United States, or
of any other of the American Republics, upon the simple condition of
voluntary registry.
The correspondence herewith submitted wall be found painfully
replete with accounts of the ruin and wretchedness produced by recent
earthquakes, of unparalleled severity, in the Republics of Peru,
Ecuador, and Bolivia. The diplomatic agents and naval officers of the
United States who were present in those countries at the time of those
disasters furnished all the relief in their power to the sufferers, and
were promptly rewarded with grateful and touching acknowledgments by
the Congress of Peru. An appeal to the charity of our fellow-citizens
has been answered by much liberality. In this connection I submit an
appeal which has been made by the Swiss Republic, whose Government and
institutions are kindred to our own, in behalf of its inhabitants, who
are suffering extreme destitution, produced by recent devastating
inundations.
Our relations with Mexico during the year have been marked by an
increasing growth of mutual confidence. The Mexican Government has
not yet acted upon the three treaties celebrated here last summer for
establishing the rights of naturalized citizens upon a liberal and just
basis, for regulating consular powers, and for the adjustment of mutual
claims.
All commercial nations, as well as all friends of republican
institutions, have occasion to regret the frequent local disturbances
which occur in some of the constituent States of Colombia. Nothing has
occurred, however, to affect the harmony and cordial friendship which
have for several years existed between that youthful and vigorous
Republic and our own.
Negotiations are pending with a view to the survey and construction
of a ship canal across the Isthmus of Darien, under the auspices of
the United States. I hope to be able to submit the results of that
negotiation to the Senate during its present session.
The very liberal treaty which was entered into last year by the United
States and Nicaragua has been ratified by the latter Republic.
Costa Rica, with the earnestness of a sincerely friendly neighbor,
solicits a reciprocity of trade, which I commend to the consideration
of Congress.
The convention created by treaty between the United States and Venezuela
in July, 1865, for the mutual adjustment of claims, has been held,
and its decisions have been received at the Department of State. The
heretofore-recognized Government of the United States of Venezuela has
been subverted. A provisional government having been instituted under
circumstances which promise durability, it has been formally recognized.
I have been reluctantly obliged to ask explanation and satisfaction
for national injuries committed by the President of Hayti. The political
and social condition of the Republics of Hayti and St. Domingo is very
unsatisfactory and painful. The abolition of slavery, which has been
carried into effect throughout the island of St. Domingo and the entire
West Indies, except the Spanish islands of Cuba and Porto Rico, has
been followed by a profound popular conviction of the rightfulness
of republican institutions and an intense desire to secure them.
The attempt, however, to establish republics there encounters many
obstacles, most of which may be supposed to result from long-indulged
habits of colonial supineness and dependence upon European monarchical
powers. While the United States have on all occasions professed a
decided unwillingness that any part of this continent or of its adjacent
islands shall be made a theater for a new establishment of monarchical
power, too little has been done by us, on the other hand, to attach the
communities by which we are surrounded to our own country, or to lend
even a moral support to the efforts they are so resolutely and so
constantly making to secure republican institutions for themselves.
It is indeed a question of grave consideration whether our recent and
present example is not calculated to check the growth and expansion of
free principles, and make those communities distrust, if not dread,
a government which at will consigns to military domination States that
are integral parts of our Federal Union, and, while ready to resist any
attempts by other nations to extend to this hemisphere the monarchical
institutions of Europe, assumes to establish over a large portion of
its people a rule more absolute, harsh, and tyrannical than any known
to civilized powers.
The acquisition of Alaska was made with the view of extending national
jurisdiction and republican principles in the American hemisphere.
Believing that a further step could be taken in the same direction,
I last year entered into a treaty with the King of Denmark for the
purchase of the islands of St. Thomas and St. John, on the best terms
then attainable, and with the express consent of the people of those
islands. This treaty still remains under consideration in the Senate.
A new convention has been entered into with Denmark, enlarging the time
fixed for final ratification of the original treaty.
Comprehensive national policy would seem to sanction the acquisition and
incorporation into our Federal Union of the several adjacent continental
and insular communities as speedily as it can be done peacefully,
lawfully, and without any violation of national justice, faith, or
honor. Foreign possession or control of those communities has hitherto
hindered the growth and impaired the influence of the United States.
Chronic revolution and anarchy there would be equally injurious. Each
one of them, when firmly established as an independent republic, or when
incorporated into the United States, would be a new source of strength
and power. Conforming my Administration to these principles, I have on
no occasion lent support or toleration to unlawful expeditions set on
foot upon the plea of republican propagandism or of national extension
or aggrandizement. The necessity, however, of repressing such unlawful
movements clearly indicates the duty which rests upon us of adapting our
legislative action to the new circumstances of a decline of European
monarchical power and influence and the increase of American republican
ideas, interests, and sympathies.
It can not be long before it will become necessary for this Government
to lend some effective aid to the solution of the political and social
problems which are continually kept before the world by the two
Republics of the island of St. Domingo, and which are now disclosing
themselves more distinctly than heretofore in the island of Cuba. The
subject is commended to your consideration with all the more earnestness
because I am satisfied that the time has arrived when even so direct a
proceeding as a proposition for an annexation of the two Republics of
the island of St. Domingo would not only receive the consent of the
people interested, but would also give satisfaction to all other foreign
nations.
I am aware that upon the question of further extending our
possessions it is apprehended by some that our political system can not
successfully be applied to an area more extended than our continent; but
the conviction is rapidly gaining ground in the American mind that with
the increased facilities for intercommunication between all portions
of the earth the principles of free government, as embraced in our
Constitution, if faithfully maintained and carried out, would prove of
sufficient strength and breadth to comprehend within their sphere and
influence the civilized nations of the world.
The attention of the Senate and of Congress is again respectfully
invited to the treaty for the establishment of commercial reciprocity
with the Hawaiian Kingdom entered into last year, and already ratified
by that Government. The attitude of the United States toward these
islands is not very different from that in which they stand toward the
West Indies. It is known and felt by the Hawaiian Government and people
that their Government and institutions are feeble and precarious; that
the United States, being so near a neighbor, would be unwilling to see
the islands pass under foreign control. Their prosperity is continually
disturbed by expectations and alarms of unfriendly political
proceedings, as well from the United States as from other foreign
powers. A reciprocity treaty, while it could not materially diminish
the revenues of the United States, would be a guaranty of the good will
and forbearance of all nations until the people of the islands shall of
themselves, at no distant day, voluntarily apply for admission into the
Union.
The Emperor of Russia has acceded to the treaty negotiated here
in January last for the security of trade-marks in the interest
of manufacturers and commerce. I have invited his attention to the
importance of establishing, now while it seems easy and practicable,
a fair and equal regulation of the vast fisheries belonging to the
two nations in the waters of the North Pacific Ocean.
The two treaties between the United States and Italy for the regulation
of consular powers and the extradition of criminals, negotiated and
ratified here during the last session of Congress, have been accepted
and confirmed by the Italian Government. A liberal consular convention
which has been negotiated with Belgium will be submitted to the Senate.
The very important treaties which were negotiated between the United
States and North Germany and Bavaria for the regulation of the rights of
naturalized citizens have been duly ratified and exchanged, and similar
treaties have been entered into with the Kingdoms of Belgium and
Wurtemberg and with the Grand Duchies of Baden and Hesse-Darmstadt.
I hope soon to be able to submit equally satisfactory conventions of
the same character now in the course of negotiation with the respective
Governments of Spain, Italy, and the Ottoman Empire.
Examination of claims against the United States by the Hudsons Bay
Company and the Puget Sound Agricultural Company, on account of certain
possessory rights in the State of Oregon and Territory of Washington,
alleged by those companies in virtue of provisions of the treaty
between the United States and Great Britain of June 15, 1846, has been
diligently prosecuted, under the direction of the joint international
commission to which they were submitted for adjudication by treaty
between the two Governments of July 1, 1863, and will, it is expected,
be concluded at an early day.
No practical regulation concerning colonial trade and the fisheries can
be accomplished by treaty between the United States and Great Britain
until Congress shall have expressed their judgment concerning the
principles involved. Three other questions, however, between the United
States and Great Britain remain open for adjustment. These are the
mutual rights of naturalized citizens, the boundary question involving
the title to the island of San Juan, on the Pacific coast, and mutual
claims arising since the year 1853 of the citizens and subjects of the
two countries for injuries and depredations committed under the
authority of their respective Governments. Negotiations upon these
subjects are pending, and I am not without hope of being able to lay
before the Senate, for its consideration during the present session,
protocols calculated to bring to an end these justly exciting and
long-existing controversies.
We are not advised of the action of the Chinese Government upon the
liberal and auspicious treaty which was recently celebrated with its
plenipotentiaries at this capital.
Japan remains a theater of civil war, marked by religious incidents
and political severities peculiar to that long-isolated Empire. The
Executive has hitherto maintained strict neutrality among the
belligerents, and acknowledges with pleasure that it has been frankly
and fully sustained in that course by the enlightened concurrence and
cooperation of the other treaty powers, namely, Great Britain, France,
the Netherlands, North Germany, and Italy.
Spain having recently undergone a revolution marked by extraordinary
unanimity and preservation of order, the provisional government
established at Madrid has been recognized, and the friendly intercourse
which has so long happily existed between the two countries remains
unchanged.
I renew the recommendation contained in my communication to Congress
dated the 18th July last--a copy of which accompanies this message--that
the judgment of the people should be taken on the propriety of so
amending the Federal Constitution that it shall provide--
First. For an election of President and Vice-President by a direct vote
of the people, instead of through the agency of electors, and making
them ineligible for reelection to a second term.
Second. For a distinct designation of the person who shall discharge
the duties of President in the event of a vacancy in that office by the
death, resignation, or removal of both the President and Vice-President.
Third. For the election of Senators of the United States directly by
the people of the several States, instead of by the legislatures; and
Fourth. For the limitation to a period of years of the terms of Federal
judges.
Profoundly impressed with the propriety of making these important
modifications in the Constitution, I respectfully submit them for
the early and mature consideration of Congress. We should, as far
as possible, remove all pretext for violations of the organic law,
by remedying such imperfections as time and experience may develop,
ever remembering that "the constitution which at any time exists until
changed by an explicit and authentic act of the whole people is sacredly
obligatory upon all."
In the performance of a duty imposed upon me by the Constitution, I have
thus communicated to Congress information of the state of the Union and
recommended for their consideration such measures as have seemed to me
necessary and expedient. If carried into effect, they will hasten the
accomplishment of the great and beneficent purposes for which the
Constitution was ordained, and which it comprehensively states were
"to form a more perfect Union, establish justice, insure domestic
tranquillity, provide for the common defense, promote the general
welfare, and secure the blessings of liberty to ourselves and our
posterity." In Congress are vested all legislative powers, and upon them
devolves the responsibility as well for framing unwise and excessive
laws as for neglecting to devise and adopt measures absolutely demanded
by the wants of the country. Let us earnestly hope that before the
expiration of our respective terms of service, now rapidly drawing
to a close, an all-wise Providence will so guide our counsels as to
strengthen and preserve the Federal Union, inspire reverence for the
Constitution, restore prosperity and happiness to our whole people,
and promote "on earth peace, good will toward men."