FIRST ANNUAL MESSAGE.

WASHINGTON, _December 6, 1881_.

_To the Senate and House of Representatives of the United States_:

An appalling calamity has befallen the American people since their

chosen representatives last met in the halls where you are now

assembled. We might else recall with unalloyed content the rare

prosperity with which throughout the year the nation has been blessed.

Its harvests have been plenteous; its varied industries have thriven;

the health of its people has been preserved; it has maintained with

foreign governments the undisturbed relations of amity and peace. For

these manifestations of His favor we owe to Him who holds our destiny

in His hands the tribute of our grateful devotion.

To that mysterious exercise of His will which has taken from us the

loved and illustrious citizen who was but lately the head of the nation

we bow in sorrow and submission.

The memory of his exalted character, of his noble achievements, and of

his patriotic life will be treasured forever as a sacred possession of

the whole people.

The announcement of his death drew from foreign governments and peoples

tributes of sympathy and sorrow which history will record as signal

tokens of the kinship of nations and the federation of mankind.

The feeling of good will between our own Government and that of Great

Britain was never more marked than at present. In recognition of this

pleasing fact I directed, on the occasion of the late centennial

celebration at Yorktown, that a salute be given to the British flag.

Save for the correspondence to which I shall refer hereafter in relation

to the proposed canal across the Isthmus of Panama, little has occurred

worthy of mention in the diplomatic relations of the two countries.

Early in the year the Fortune Bay claims were satisfactorily settled by

the British Government paying in full the sum of £15,000, most of which

has been already distributed. As the terms of the settlement included

compensation for injuries suffered by our fishermen at Aspee Bay, there

has been retained from the gross award a sum which is deemed adequate

for those claims.

The participation of Americans in the exhibitions at Melbourne and

Sydney will be approvingly mentioned in the reports of the two

exhibitions, soon to be presented to Congress. They will disclose the

readiness of our countrymen to make successful competition in distant

fields of enterprise.

Negotiations for an international copyright convention are in hopeful

progress.

The surrender of Sitting Bull and his forces upon the Canadian frontier

has allayed apprehension, although bodies of British Indians still cross

the border in quest of sustenance. Upon this subject a correspondence

has been opened which promises an adequate understanding. Our troops

have orders to avoid meanwhile all collisions with alien Indians.

The presence at the Yorktown celebration of representatives of the

French Republic and descendants of Lafayette and of his gallant

compatriots who were our allies in the Revolution has served to

strengthen the spirit of good will which has always existed between

the two nations.

You will be furnished with the proceedings of the Bimetallic Conference

held during the summer at the city of Paris. No accord was reached, but

a valuable interchange of views was had, and the conference will next

year be renewed.

At the Electrical Exhibition and Congress, also held at Paris, this

country was creditably represented by eminent specialists, who, in the

absence of an appropriation, generously lent their efficient aid at the

instance of the State Department. While our exhibitors in this almost

distinctively American field of achievement have won several valuable

awards, I recommend that Congress provide for the repayment of the

personal expenses incurred in the public interest by the honorary

commissioners and delegates.

No new questions respecting the status of our naturalized citizens

in Germany have arisen during the year, and the causes of complaint,

especially in Alsace and Lorraine, have practically ceased through

the liberal action of the Imperial Government in accepting our

often-expressed views on the subject. The application of the treaty of

1868 to the lately acquired Rhenish provinces has received very earnest

attention, and a definite and lasting agreement on this point is

confidently expected. The participation of the descendants of Baron von

Steuben in the Yorktown festivities, and their subsequent reception by

their American kinsmen, strikingly evinced the ties of good will which

unite the German people and our own.

Our intercourse with Spain has been friendly. An agreement concluded in

February last fixes a term for the labors of the Spanish and American

Claims Commission. The Spanish Government has been requested to pay the

late awards of that Commission, and will, it is believed, accede to the

request as promptly and courteously as on former occasions.

By recent legislation onerous fines have been imposed upon American

shipping in Spanish and colonial ports for slight irregularities in

manifests. One case of hardship is specially worthy of attention. The

bark _Masonic_, bound for Japan, entered Manila in distress, and is

there sought to be confiscated under Spanish revenue laws for an alleged

shortage in her transshipped cargo. Though efforts for her relief have

thus far proved unavailing, it is expected that the whole matter will be

adjusted in a friendly spirit.

The Senate resolutions of condolence on the assassination of the Czar

Alexander II were appropriately communicated to the Russian Government,

which in turn has expressed its sympathy in our late national

bereavement. It is desirable that our cordial relations with Russia

should be strengthened by proper engagements assuring to peaceable

Americans who visit the Empire the consideration which is due to them as

citizens of a friendly state. This is especially needful with respect to

American Israelites, whose classification with the native Hebrews has

evoked energetic remonstrances from this Government.

A supplementary consular agreement with Italy has been sanctioned and

proclaimed, which puts at rest conflicts of jurisdiction in the case of

crimes on shipboard.

Several important international conferences have been held in Italy

during the year. At the Geographical Congress of Venice, the Beneficence

Congress of Milan, and the Hygienic Congress of Turin this country was

represented by delegates from branches of the public service or by

private citizens duly accredited in an honorary capacity. It is hoped

that Congress will give such prominence to the results of their

participation as they may seem to deserve.

The abolition of all discriminating duties against such colonial

productions of the Dutch East Indies as are imported hither from Holland

has been already considered by Congress. I trust that at the present

session the matter may be favorably concluded.

The insecurity of life and property in many parts of Turkey has given

rise to correspondence with the Porte looking particularly to the better

protection of American missionaries in the Empire. The condemned

murderer of the eminent missionary Dr. Justin W. Parsons has not yet

been executed, although this Government has repeatedly demanded that

exemplary justice be done.

The Swiss Government has again solicited the good offices of our

diplomatic and consular agents for the protection of its citizens in

countries where it is not itself represented. This request has, within

proper limits, been granted.

Our agents in Switzerland have been instructed to protest against the

conduct of the authorities of certain communes in permitting the

emigration to this country of criminals and other objectionable persons.

Several such persons, through the cooperation of the commissioners of

emigration at New York, have been sent back by the steamers which

brought them. A continuance of this course may prove a more effectual

remedy than diplomatic remonstrance.

Treaties of commerce and navigation and for the regulation of consular

privileges have been concluded with Roumania and Servia since their

admission into the family of European States.

As is natural with contiguous states having like institutions and

like aims of advancement and development, the friendship of the United

States and Mexico has been constantly maintained. This Government has

lost no occasion of encouraging the Mexican Government to a beneficial

realization of the mutual advantages which will result from more

intimate commercial intercourse and from the opening of the rich

interior of Mexico to railway enterprise. I deem it important that means

be provided to restrain the lawlessness unfortunately so common on the

frontier and to suppress the forays of the reservation Indians on either

side of the Rio Grande.

The neighboring States of Central America have preserved internal peace,

and their outward relations toward us have been those of intimate

friendship. There are encouraging signs of their growing disposition to

subordinate their local interests to those which are common to them by

reason of their geographical relations.

The boundary dispute between Guatemala and Mexico has afforded this

Government an opportunity to exercise its good offices for preventing a

rupture between those States and for procuring a peaceable solution of

the question. I cherish strong hope that in view of our relations of

amity with both countries our friendly counsels may prevail.

A special envoy of Guatemala has brought to me the condolences of his

Government and people on the death of President Garfield.

The Costa Rican Government lately framed an engagement with Colombia for

settling boy arbitration the boundary question between those countries,

providing that the post of arbitrator should be offered successively to

the King of the Belgians, the King of Spain, and the President of the

Argentine Confederation. The King of the Belgians has declined to act,

but I am not as yet advised of the action of the King of Spain. As we

have certain interests in the disputed territory which are protected by

our treaty engagements with one of the parties, it is important that the

arbitration should not without our consent affect our rights, and this

Government has accordingly thought proper to make its views known to the

parties to the agreement, as well as to intimate them to the Belgian and

Spanish Governments.

The questions growing out of the proposed interoceanic waterway across

the Isthmus of Panama are of grave national importance. This Government

has not been unmindful of the solemn obligations imposed upon it by its

compact of 1846 with Colombia, as the independent and sovereign mistress

of the territory crossed by the canal, and has sought to render them

effective by fresh engagements with the Colombian Republic looking to

their practical execution. The negotiations to this end, after they had

reached what appeared to be a mutually satisfactory solution here, were

met in Colombia by a disavowal of the powers which its envoy had assumed

and by a proposal for renewed negotiation on a modified basis.

Meanwhile this Government learned that Colombia had proposed to the

European powers to join in a guaranty of the neutrality of the proposed

Panama canal--a guaranty which would be in direct contravention of our

obligation as the sole guarantor of the integrity of Colombian territory

and of the neutrality of the canal itself. My lamented predecessor felt

it his duty to place before the European powers the reasons which make

the prior guaranty of the United States indispensable, and for which the

interjection of any foreign guaranty might be regarded as a superfluous

and unfriendly act.

Foreseeing the probable reliance of the British Government on the

provisions of the Clayton-Bulwer treaty of 1850 as affording room for a

share in the guaranties which the United States covenanted with Colombia

four years before, I have not hesitated to supplement the action of my

predecessor by proposing to Her Majesty's Government the modification of

that instrument and the abrogation of such clauses thereof as do not

comport with the obligations of the United States toward Colombia or

with the vital needs of the two friendly parties to the compact.

This Government sees with great concern the continuance of the hostile

relations between Chile, Bolivia, and Peru. An early peace between these

Republics is much to be desired, not only that they may themselves be

spared further misery and bloodshed, but because their continued

antagonism threatens consequences which are, in my judgment, dangerous

to the interests of republican government on this continent and

calculated to destroy the best elements of our free and peaceful

civilization.

As in the present excited condition of popular feeling in these

countries there has been serious misapprehension of the position of the

United States, and as separate diplomatic intercourse with each through

independent ministers is sometimes subject, owing to the want of prompt

reciprocal communication, to temporary misunderstanding, I have deemed

it judicious at the present time to send a special envoy accredited to

all and each of them, and furnished with general instructions which

will, I trust, enable him to bring these powers into friendly relations.

The Government of Venezuela maintains its attitude of warm friendship

and continues with great regularity its payment of the monthly quota of

the diplomatic debt. Without suggesting the direction in which Congress

should act, I ask its attention to the pending questions affecting the

distribution of the sums thus far received.

The relations between Venezuela and France growing out of the same

debt have been for some time past in an unsatisfactory state, and

this Government, as the neighbor and one of the largest creditors of

Venezuela, has interposed its influence with the French Government with

the view of producing a friendly and honorable adjustment.

I regret that the commercial interests between the United States and

Brazil, from which great advantages were hoped a year ago, have suffered

from the withdrawal of the American lines of communication between the

Brazilian ports and our own.

Through the efforts of our minister resident at Buenos Ayres and the

United States minister at Santiago, a treaty has been concluded between

the Argentine Republic and Chile, disposing of the long-pending

Patagonian boundary question. It is a matter of congratulation that our

Government has been afforded the opportunity of successfully exerting

its good influence for the prevention of disagreements between these

Republics of the American continent.

I am glad to inform you that the treaties lately negotiated with China

have been duly ratified on both sides and the exchange made at Peking.

Legislation is necessary to carry their provisions into effect. The

prompt and friendly spirit with which the Chinese Government, at the

request of the United States, conceded the modification of existing

treaties should secure careful regard for the interests and

susceptibilities of that Government in the enactment of any laws

relating to Chinese immigration.

Those clauses of the treaties which forbid the participation of citizens

or vessels of the United States in the opium trade will doubtless

receive your approval. They will attest the sincere interest which our

people and Government feel in the commendable efforts of the Chinese

Government to put a stop to this demoralizing and destructive traffic.

In relation both to China and Japan some changes are desirable in our

present system of consular jurisdiction. I hope at some future time to

lay before you a scheme for its improvement in the entire East.

The intimacy between our own country and Japan, the most advanced of the

Eastern nations, continues to be cordial. I am advised that the Emperor

contemplates the establishment of full constitutional government, and

that he has already summoned a parliamentary congress for the purpose

of effecting the change. Such a remarkable step toward complete

assimilation with the Western system can not fail to bring Japan into

closer and more beneficial relationship with ourselves as the chief

Pacific power.

A question has arisen in relation to the exercise in that country of

the judicial functions conferred upon our ministers and consuls. The

indictment, trial, and conviction in the consular court at Yokohama of

John Ross, a merchant seaman on board an American vessel, have made it

necessary for the Government to institute a careful examination into

the nature and methods of this jurisdiction.

It appeared that Ross was regularly shipped under the flag of the United

States, but was by birth a British subject. My predecessor felt it his

duty to maintain the position that during his service as a regularly

shipped seaman on board an American merchant vessel Ross was subject to

the laws of that service and to the jurisdiction of the United States

consular authorities.

I renew the recommendation which has been heretofore urged by the

Executive upon the attention of Congress, that after the deduction of

such amount as may be found due to American citizens the balance of the

indemnity funds heretofore obtained from China and Japan, and which are

now in the hands of the State Department, be returned to the Governments

of those countries.

The King of Hawaii, in the course of his homeward return after a journey

around the world, has lately visited this country. While our relations

with that Kingdom are friendly, this Government has viewed with concern

the efforts to seek replenishment of the diminishing population of the

islands from outward sources, to a degree which may impair the native

sovereignty and independence, in which the United States was among the

first to testify a lively interest.

Relations of unimpaired amity have been maintained throughout the year

with the respective Governments of Austria-Hungary, Belgium, Denmark,

Hayti, Paraguay and Uruguay, Portugal, and Sweden and Norway. This may

also be said of Greece and Ecuador, although our relations with those

States have for some years been severed by the withdrawal of

appropriations for diplomatic representatives at Athens and Quito. It

seems expedient to restore those missions, even on a reduced scale, and

I decidedly recommend such a course with respect to Ecuador, which is

likely within the near future to play an important part among the

nations of the Southern Pacific.

At its last extra session the Senate called for the text of the Geneva

convention for the relief of the wounded in war. I trust that this

action foreshadows such interest in the subject as will result in the

adhesion of the United States to that humane and commendable engagement.

I invite your attention to the propriety of adopting the new code of

international rules for the prevention of collisions on the high seas

and of conforming the domestic legislation of the United States thereto,

so that no confusion may arise from the application of conflicting rules

in the case of vessels of different nationalities meeting in tidal

waters. These international rules differ but slightly from our own. They

have been adopted by the Navy Department for the governance of the war

ships of the United States on the high seas and in foreign waters, and,

through the action of the State Department in disseminating the rules

and in acquainting shipmasters with the option of conforming to them

without the jurisdictional waters of the United States, they are now

very generally known and obeyed.

The State Department still continues to publish to the country the trade

and manufacturing reports received from its officers abroad. The success

of this course warrants its continuance and such appropriation as may be

required to meet the rapidly increasing demand for these publications.

With special reference to the Atlanta Cotton Exposition, the October

number of the reports was devoted to a valuable collection of papers on

the cotton-goods trade of the world.

The International Sanitary Conference for which, in 1879, Congress made

provision assembled in this city early in January last, and its sessions

were prolonged until March. Although it reached no specific conclusions

affecting the future action of the participant powers, the interchange

of views proved to be most valuable. The full protocols of the sessions

have been already presented to the Senate.

As pertinent to this general subject, I call your attention to the

operations of the National Board of Health. Established by act of

Congress approved March 3, 1879, its sphere of duty was enlarged by the

act of June 2 in the same year. By the last-named act the board was

required to institute such measures as might be deemed necessary for

preventing the introduction of contagious or infectious diseases from

foreign countries into the United States or from one State into another.

The execution of the rules and regulations prepared by the board and

approved by my predecessor has done much to arrest the progress of

epidemic disease, and has thus rendered substantial service to the

nation.

The International Sanitary Conference, to which I have referred, adopted

a form of a bill of health to be used by all vessels seeking to enter

the ports of the countries whose representatives participated in its

deliberations. This form has since been prescribed by the National Board

of Health and incorporated with its rules and regulations, which have

been approved by me in pursuance of law.

The health of the people is of supreme importance. All measures looking

to their protection against the spread of contagious diseases and to the

increase of our sanitary knowledge for such purposes deserve attention

of Congress.

The report of the Secretary of the Treasury presents in detail a highly

satisfactory exhibit of the state of the finances and the condition of

the various branches of the public service administered by that

Department.

The ordinary revenues from all sources for the fiscal year ending June

30, 1881, were:

From customs $198,159,676.02

From internal revenue 135,264,385.51

From sales of public lands 2,201,863.17

From tax on circulation and deposits of national banks 8,116,115.72

From repayment of interest by Pacific Railway companies 810,833.80

From sinking fund for Pacific Railway companies 805,180.54

From customs fees, fines, penalties, etc. 1,225,514.86

From fees--consular, letters patent, and lands 2,244,983.98

From proceeds of sales of Government property 262,174.00

From profits on coinage 3,468,485.61

From revenues of the District of Columbia 2,016,199.23

From miscellaneous sources 6,206,880.13

______________

Total ordinary receipts 360,782,292.57

The ordinary expenditures for the same period were:

For civil expenses $17,941,177.19

For foreign intercourse 1,093,954.92

For Indians 6,514,161.09

For pensions 50,059,279.62

For the military establishment, including river

and harbor improvements and arsenals 40,466,460.55

For the naval establishment, including vessels,

machinery, and improvements at navy-yards 15,686,671.66

For miscellaneous expenditures, including public

buildings, light-houses, and collecting the revenue 41,837,280.57

For expenditures on account of the District of Columbia 3,543,912.03

For interest on the public debt 82,508,741.18

For premium on bonds purchased 1,061,248.78

______________

Total ordinary expenditures 260,712,887.59

Leaving a surplus revenue of $100,069,404.98, which was applied as

follows:

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