Aggregate of exports and imports 1,545,041,974

Compared with the previous year, there was an increase of $66,738,688

in the value of exports of merchandise and a decrease of $25,290,118

in the value of imports. The annual average of the excess of imports

of merchandise over exports thereof for ten years previous to June

30, 1873, was $104,706,922, but for the last six years there has

been an excess of exports over imports of merchandise amounting to

$1,180,668,105, an annual average of $196,778,017. The specie value

of the exports of domestic merchandise was $376,616,473 in 1870 and

$883,925,947 in 1881, an increase of $507,309,474, or 135 per cent.

The value of imports was $435,958,408 in 1870 and $642,664,628 in 1881,

an increase of $206,706,220, or 47 per cent.

During each year from 1862 to 1879, inclusive, the exports of specie

exceeded the imports. The largest excess of such exports over imports

was reached during the year 1864, when it amounted to $92,280,929. But

during the year ended June 30, 1880, the imports of coin and bullion

exceeded the exports by $75,891,391, and during the last fiscal year

the excess of imports over exports was $91,168,650.

In the last annual report of the Secretary of the Treasury the attention

of Congress was called to the fact that $469,651,050 in 5 per cent bonds

and $203,573,750 in 6 per cent bonds would become redeemable during the

year, and Congress was asked to authorize the refunding of these bonds

at a lower rate of interest. The bill for such refunding having failed

to become a law, the Secretary of the Treasury in April last notified

the holders of the $195,690,400 6 per cent bonds then outstanding that

the bonds would be paid at par on the 1st day of July following, or that

they might be "continued" at the pleasure of the Government, to bear

interest at the rate of 3-1/2 per cent per annum.

Under this notice $178,055,150 of the 6 per cent bonds were continued at

the lower rate and $17,635,250 were redeemed.

In the month of May a like notice was given respecting the redemption

or continuance of the $439,841,350 of 5 per cent bonds then outstanding,

and of these $401,504,900 were continued at 3-1/3 per cent per annum and

$38,336,450 redeemed.

The 6 per cent bonds of the loan of February 8, 1861, and of the Oregon

war debt, amounting together to $14,125,800, having matured during the

year, the Secretary of the Treasury gave notice of his intention to

redeem the same, and such as have been presented have been paid from the

surplus revenues. There have also been redeemed at par $16,179,100 of

the 3-1/2 per cent "continued" bonds, making a total of bonds redeemed

or which have ceased to bear interest during the year of $123,969,650.

The reduction of the annual interest on the public debt through these

transactions is as follows:

By reduction of interest to 3-1/2 per cent. $10,473,952.25

By redemption of bonds 6,352,340.00

_____________

Total 16,826,292.25

The 3-1/2 per cent bonds, being payable at the pleasure of the

Government, are available for the investment of surplus revenues without

the payment of premiums.

Unless these bonds can be funded at a much lower rate of interest than

they now bear, I agree with the Secretary of the Treasury that no

legislation respecting them is desirable.

It is a matter for congratulation that the business of the country

has been so prosperous during the past year as to yield by taxation

a large surplus of income to the Government. If the revenue laws remain

unchanged, this surplus must year by year increase, on account of the

reduction of the public debt and its burden of interest and because

of the rapid increase of our population. In 1860, just prior to the

institution of our internal-revenue system, our population but slightly

exceeded 30,000,000; by the census of 1880 it is now found to exceed

50,000,000. It is estimated that even if the annual receipts and

expenditures should continue as at present the entire debt could be

paid in ten years.

In view, however, of the heavy load of taxation which our people have

already borne, we may well consider whether it is not the part of wisdom

to reduce the revenues, even if we delay a little the payment of the

debt.

It seems to me that the time has arrived when the people may justly

demand some relief from their present onerous burden, and that by due

economy in the various branches of the public service this may readily

be afforded.

I therefore concur with the Secretary in recommending the abolition

of all internal-revenue taxes except those upon tobacco in its various

forms and upon distilled spirits and fermented liquors, and except also

the special tax upon the manufacturers of and dealers in such articles.

The retention of the latter tax is desirable as affording the officers

of the Government a proper supervision of these articles for the

prevention of fraud. I agree with the Secretary of the Treasury that the

law imposing a stamp tax upon matches, proprietary articles, playing

cards, checks, and drafts may with propriety be repealed, and the law

also by which banks and bankers are assessed upon their capital and

deposits. There seems to be a general sentiment in favor of this course.

In the present condition of our revenues the tax upon deposits is

especially unjust. It was never imposed in this country until it was

demanded by the necessities of war, and was never exacted, I believe, in

any other country even in its greatest exigencies. Banks are required to

secure their circulation by pledging with the Treasurer of the United

States bonds of the General Government. The interest upon these bonds,

which at the time when the tax was imposed was 6 per cent, is now in

most instances 3-1/2 per cent. Besides, the entire circulation was

originally limited by law and no increase was allowable. When the

existing banks had practically a monopoly of the business, there was

force in the suggestion that for the franchise to the favored grantees

the Government might very properly exact a tax on circulation; but for

years the system has been free and the amount of circulation regulated

by the public demand.

The retention of this tax has been suggested as a means of reimbursing

the Government for the expense of printing and furnishing the

circulating notes. If the tax should be repealed, it would certainly

seem proper to require the national banks to pay the amount of such

expense to the Comptroller of the Currency.

It is perhaps doubtful whether the immediate reduction of the rate of

taxation upon liquors and tobacco is advisable, especially in view of

the drain upon the Treasury which must attend the payment of arrears of

pensions. A comparison, however, of the amount of taxes collected under

the varying rates of taxation which have at different times prevailed

suggests the intimation that some reduction may soon be made without

material diminution of the revenue.

The tariff laws also need revision; but, that a due regard may be paid

to the conflicting interests of our citizens, important changes should

be made with caution. If a careful revision can not be made at this

session, a commission such as was lately approved by the Senate and is

now recommended by the Secretary of the Treasury would doubtless lighten

the labors of Congress whenever this subject shall be brought to its

consideration.

The accompanying report of the Secretary of War will make known to you

the operations of that Department for the past year.

He suggests measures for promoting the efficiency of the Army without

adding to the number of its officers, and recommends the legislation

necessary to increase the number of enlisted men to 30,000, the maximum

allowed by law.

This he deems necessary to maintain quietude on our ever-shifting

frontier; to preserve peace and suppress disorder and marauding in new

settlements; to protect settlers and their property against Indians, and

Indians against the encroachments of intruders; and to enable peaceable

immigrants to establish homes in the most remote parts of our country.

The Army is now necessarily scattered over such a vast extent of

territory that whenever an outbreak occurs reenforcements must be

hurried from many quarters, over great distances, and always at heavy

cost for transportation of men, horses, wagons, and supplies.

I concur in the recommendations of the Secretary for increasing the Army

to the strength of 30,000 enlisted men.

It appears by the Secretary's report that in the absence of disturbances

on the frontier the troops have been actively employed in collecting the

Indians hitherto hostile and locating them on their proper reservations;

that Sitting Bull and his adherents are now prisoners at Fort Randall;

that the Utes have been moved to their new reservation in Utah; that

during the recent outbreak of the Apaches it was necessary to reenforce

the garrisons in Arizona by troops withdrawn from New Mexico; and that

some of the Apaches are now held prisoners for trial, while some have

escaped, and the majority of the tribe are now on their reservation.

There is need of legislation to prevent intrusion upon the lands set

apart for the Indians. A large military force, at great expense, is

now required to patrol the boundary line between Kansas and the Indian

Territory. The only punishment that can at present be inflicted is the

forcible removal of the intruder and the imposition of a pecuniary fine,

which in most cases it is impossible to collect. There should be a

penalty by imprisonment in such cases.

The separate organization of the Signal Service is urged by the

Secretary of War, and a full statement of the advantages of such

permanent organization is presented in the report of the Chief Signal

Officer. A detailed account of the useful work performed by the Signal

Corps and the Weather Bureau is also given in that report.

I ask attention to the statements of the Secretary of War regarding the

requisitions frequently made by the Indian Bureau upon the Subsistence

Department of the Army for the casual support of bands and tribes of

Indians whose appropriations are exhausted. The War Department should

not be left, by reason of inadequate provision for the Indian Bureau,

to contribute for the maintenance of Indians.

The report of the Chief of Engineers furnishes a detailed account of the

operations for the improvement of rivers and harbors.

I commend to your attention the suggestions contained in this report in

regard to the condition of our fortifications, especially our coast

defenses, and recommend an increase of the strength of the Engineer

Battalion, by which the efficiency of our torpedo system would be

improved.

I also call your attention to the remarks upon the improvement of the

South Pass of the Mississippi River, the proposed free bridge over the

Potomac River at Georgetown, the importance of completing at an early

day the north wing of the War Department building, and other

recommendations of the Secretary of War which appear in his report.

The actual expenditures of that Department for the fiscal year ending

June 30, 1881, were $42,122,201.39. The appropriations for the year 1882

were $44,889,725.42. The estimates for 1883 are $44,541,276.91.

The report of the Secretary of the Navy exhibits the condition of

that branch of the service and presents valuable suggestions for its

improvement. I call your especial attention also to the appended report

of the Advisory Board which he convened to devise suitable measures for

increasing the efficiency of the Navy, and particularly to report as to

the character and number of vessels necessary to place it upon a footing

commensurate with the necessities of the Government.

I can not too strongly urge upon you my conviction that every

consideration of national safety, economy, and honor imperatively

demands a thorough rehabilitation of our Navy.

With a full appreciation of the fact that compliance with the

suggestions of the head of that Department and of the Advisory Board

must involve a large expenditure of the public moneys, I earnestly

recommend such appropriations as will accomplish an end which seems to

me so desirable.

Nothing can be more inconsistent with true public economy than

withholding the means necessary to accomplish the objects intrusted by

the Constitution to the National Legislature. One of those objects, and

one which is of paramount importance, is declared by our fundamental law

to be the provision for the "common defense." Surely nothing is more

essential to the defense of the United States and of all our people

than the efficiency of our Navy.

We have for many years maintained with foreign governments the relations

of honorable peace, and that such relations may be permanent is desired

by every patriotic citizen of the Republic. But if we heed the teachings

of history we shall not forget that in the life of every nation

emergencies may arise when a resort to arms can alone save it from

dishonor.

No danger from abroad now threatens this people, nor have we any cause

to distrust the friendly professions of other governments. But for

avoiding as well as for repelling dangers that may threaten us in the

future we must be prepared to enforce any policy which we think wise to

adopt.

We must be ready to defend our harbors against aggression; to protect,

by the distribution of our ships of war over the highways of commerce,

the varied interests of our foreign trade and the persons and property

of our citizens abroad; to maintain everywhere the honor of our flag and

the distinguished position which we may rightfully claim among the

nations of the world.

The report of the Postmaster-General is a gratifying exhibit of the

growth and efficiency of the postal service.

The receipts from postage and other ordinary sources during the past

fiscal year were $36,489,816.58. The receipts from the money-order

business were $295,581.39, making a total of $36,785,397.97. The

expenditure for the fiscal year was $39,251,736.46. The deficit supplied

out of the general Treasury was $2,481,129.35, or 6.3 per cent of the

amount expended. The receipts were $3,469,918.63 in excess of those of

the previous year, and $4,575,397.97 in excess of the estimate made two

years ago, before the present period of business prosperity had fairly

begun.

The whole number of letters mailed in this country in the last fiscal

year exceeded 1,000,000,000.

The registry system is reported to be in excellent condition, having

been remodeled during the past four years with good results. The amount

of registration fees collected during the last fiscal year was

$712,882.20, an increase over the fiscal year ending June 30, 1877, of

$345,443.40.

The entire number of letters and packages registered during the year was

8,338,919, of which only 2,061 were lost or destroyed in transit.

The operations of the money-order system are multiplying yearly under

the impulse of immigration, of the rapid development of the newer States

and Territories, and the consequent demand for additional means of

intercommunication and exchange.

During the past year 338 additional money-order offices have been

established, making a total of 5,499 in operation at the date of this

report.

During the year the domestic money orders aggregated in value

$105,075,769.35

A modification of the system is suggested, reducing the fees for money

orders not exceeding $5 from 10 cents to 5 cents and making the maximum

limit $100 in place of $50.

Legislation for the disposition of unclaimed money orders in the

possession of the Post-Office Department is recommended, in view of the

fact that their total value now exceeds $1,000,000.

The attention of Congress is again invited to the subject of

establishing a system of savings depositories in connection with the

Post-Office Department.

The statistics of mail transportation show that during the past year

railroad routes have been increased in length 6,249 miles and in cost

$1,114,382, while steamboat routes have been decreased in length 2,182

miles and in cost $134,054. The so-called star routes have been

decreased in length 3,949 miles and in cost $364,144.

Nearly all of the more expensive routes have been superseded by railroad

service. The cost of the star service must therefore rapidly decrease in

the Western States and Territories.

The Postmaster-General, however, calls attention to the constantly

increasing cost of the railway mail service as a serious difficulty in

the way of making the Department self-sustaining.

Our postal intercourse with foreign countries has kept pace with the

growth of the domestic service. Within the past year several countries

and colonies have declared their adhesion to the Postal Union. It now

includes all those which have an organized postal service except

Bolivia, Costa Rica, New Zealand, and the British colonies in Australia.

As has been already stated, great reductions have recently been made

in the expense of the star-route service. The investigations of the

Department of Justice and the Post-Office Department have resulted in

the presentation of indictments against persons formerly connected with

that service, accusing them of offenses against the United States. I

have enjoined upon the officials who are charged with the conduct of the

cases on the part of the Government, and upon the eminent counsel who

before my accession to the Presidency were called to their assistance,

the duty of prosecuting with the utmost vigor of the law all persons who

may be found chargeable with frauds upon the postal service.

The Acting Attorney-General calls attention to the necessity of

modifying the present system of the courts of the United States--a

necessity due to the large increase of business, especially in the

Supreme Court. Litigation in our Federal tribunals became greatly

expanded after the close of the late war. So long as that expansion

might be attributable to the abnormal condition in which the community

found itself immediately after the return of peace, prudence required

that no change be made in the constitution of our judicial tribunals.

But it has now become apparent that an immense increase of litigation

has directly resulted from the wonderful growth and development of the

country. There is no ground for belief that the business of the United

States courts will ever be less in volume than at present. Indeed, that

it is likely to be much greater is generally recognized by the bench and

bar.

In view of the fact that Congress has already given much consideration

to this subject, I make no suggestion as to detail, but express the hope

that your deliberations may result in such legislation as will give

early relief to our overburdened courts.

The Acting Attorney-General also calls attention to the disturbance

of the public tranquillity during the past year in the Territory of

Arizona. A band of armed desperadoes known as "Cowboys," probably

numbering from fifty to one hundred men, have been engaged for months in

committing acts of lawlessness and brutality which the local authorities

have been unable to repress. The depredations of these "Cowboys" have

also extended into Mexico, which the marauders reach from the Arizona

frontier. With every disposition to meet the exigencies of the case,

I am embarrassed by lack of authority to deal with them effectually.

The punishment of crimes committed within Arizona should ordinarily,

of course, be left to the Territorial authorities; but it is worthy

consideration whether acts which necessarily tend to embroil the United

States with neighboring governments should not be declared crimes

against the United States. Some of the incursions alluded to may perhaps

be within the scope of the law (U.S. Revised Statutes, sec. 5286)

forbidding "military expeditions or enterprises" against friendly

states; but in view of the speedy assembling of your body I have

preferred to await such legislation as in your wisdom the occasion may

seem to demand.

It may perhaps be thought proper to provide that the setting on foot

within our own territory of brigandage and armed marauding expeditions

against friendly nations and their citizens shall be punishable as an

offense against the United States.

I will add that in the event of a request from the Territorial

government for protection by the United States against "domestic

violence" this Government would be powerless to render assistance.

The act of 1795, chapter 36, passed at a time when Territorial

governments received little attention from Congress, enforced this duty

of the United States only as to the State governments. But the act of

1807, chapter 39, applied also to Territories. This law seems to have

remained in force until the revision of the statutes, when the provision

for the Territories was dropped. I am not advised whether this

alteration was intentional or accidental; but as it seems to me that the

Territories should be offered the protection which is accorded to the

States by the Constitution, I suggest legislation to that end.

It seems to me, too, that whatever views may prevail as to the policy

of recent legislation by which the Army has ceased to be a part of the

_posse comitatus_, an exception might well be made for permitting

the military to assist the civil Territorial authorities in enforcing

the laws of the United States. This use of the Army would not seem to

be within the alleged evil against which that legislation was aimed.

From sparseness of population and other circumstances it is often quite

impracticable to summon a civil posse in places where officers of

justice require assistance and where a military force is within easy

reach.

The report of the Secretary of the Interior, with accompanying

documents, presents an elaborate account of the business of that

Department. A summary of it would be too extended for this place. I ask

your careful attention to the report itself.

Prominent among the matters which challenge the attention of Congress at

its present session is the management of our Indian affairs. While this

question has been a cause of trouble and embarrassment from the infancy

of the Government, it is but recently that any effort has been made for

its solution at once serious, determined, consistent, and promising

success.

It has been easier to resort to convenient makeshifts for tiding over

temporary difficulties than to grapple with the great permanent problem,

and accordingly the easier course has almost invariably been pursued.

It was natural, at a time when the national territory seemed almost

illimitable and contained many millions of acres far outside the bounds

of civilized settlements, that a policy should have been initiated which

more than aught else has been the fruitful source of our Indian

complications.

I refer, of course, to the policy of dealing with the various Indian

tribes as separate nationalities, of relegating them by treaty

stipulations to the occupancy of immense reservations in the West, and

of encouraging them to live a savage life, undisturbed by any earnest

and well-directed efforts to bring them under the influences of

civilization.

The unsatisfactory results which have sprung from this policy are

becoming apparent to all.

As the white settlements have crowded the borders of the reservations,

the Indians, sometimes contentedly and sometimes against their will,

have been transferred to other hunting grounds, from which they have

again been dislodged whenever their new-found homes have Keen desired

by the adventurous settlers.

These removals and the frontier collisions by which they have often been

preceded have led to frequent and disastrous conflicts between the

races.

It is profitless to discuss here which of them has been chiefly

responsible for the disturbances whose recital occupies so large a space

upon the pages of our history.

We have to deal with the appalling fact that though thousands of lives

have been sacrificed and hundreds of millions of dollars expended in the

attempt to solve the Indian problem, it has until within the past few

years seemed scarcely nearer a solution than it was half a century ago.

But the Government has of late been cautiously but steadily feeling its

way to the adoption of a policy which has already produced gratifying

results, and which, in my judgment, is likely, if Congress and the

Executive accord in its support, to relieve us ere long from the

difficulties which have hitherto beset us.

For the success of the efforts now making to introduce among the Indians

the customs and pursuits of civilized life and gradually to absorb them

into the mass of our citizens, sharing their rights and holden to their

responsibilities, there is imperative need for legislative action.

My suggestions in that regard will be chiefly such as have been already

called to the attention of Congress and have received to some extent its

consideration.

First. I recommend the passage of an act making the laws of the various

States and Territories applicable to the Indian reservations within

their borders and extending the laws of the State of Arkansas to the

portion of the Indian Territory not occupied by the Five Civilized

Tribes.

The Indian should receive the protection of the law. He should be

allowed to maintain in court his rights of person and property. He has

repeatedly begged for this privilege. Its exercise would be very

valuable to him in his progress toward civilization.

Second. Of even greater importance is a measure which has been

frequently recommended by my predecessors in office, and in furtherance

of which several bills have been from time to time introduced in both

Houses of Congress. The enactment of a general law permitting the

allotment in severalty, to such Indians, at least, as desire it, of a

reasonable quantity of land secured to them by patent, and for their own

protection made inalienable for twenty or twenty-five years, is demanded

for their present welfare and their permanent advancement.

In return for such considerate action on the part of the Government,

there is reason to believe that the Indians in large numbers would be

persuaded to sever they tribal relations and to engage at once in

agricultural pursuits. Many of them realize the fact that their hunting

days are over and that it is now for their best interests to conform

their manner of life to the new order of things. By no greater

inducement than the assurance of permanent title to the soil can they

be led to engage in the occupation of tilling it.

The well-attested reports of their increasing interest in husbandry

justify the hope and belief that the enactment of such a statute as I

recommend would be at once attended with gratifying results. A resort

to the allotment system would have a direct and powerful influence in

dissolving the tribal bond, which is so prominent a feature of savage

life, and which tends so strongly to perpetuate it.

Third. I advise a liberal appropriation for the support of Indian

schools, because of my confident belief that such a course is consistent

with the wisest economy.

Even among the most uncultivated Indian tribes there is reported to be

a general and urgent desire on the part of the chiefs and older members

for the education of their children. It is unfortunate, in view of this

fact, that during the past year the means which have been at the command

of the Interior Department for the purpose of Indian instruction have

proved to be utterly inadequate.

The success of the schools which are in operation at Hampton, Carlisle,

and Forest Grove should not only encourage a more generous provision for

the support of those institutions, but should prompt the establishment

of others of a similar character.

They are doubtless much more potent for good than the day schools upon

the reservation, as the pupils are altogether separated from the

surroundings of savage life and brought into constant contact with

civilization.

There are many other phases of this subject which are of great interest,

but which can not be included within the becoming limits of this

communication. They are discussed ably in the reports of the Secretary

of the Interior and the Commissioner of Indian Affairs.

For many years the Executive, in his annual message to Congress, has

urged the necessity of stringent legislation for the suppression of

polygamy in the Territories, and especially in the Territory of Utah.

The existing statute for the punishment of this odious crime, so

revolting to the moral and religious sense of Christendom, has been

persistently and contemptuously violated ever since its enactment.

Indeed, in spite of commendable efforts on the part of the authorities

who represent the United States in that Territory, the law has in very

rare instances been enforced, and, for a cause to which reference will

presently be made, is practically a dead letter.

The fact that adherents of the Mormon Church, which rests upon polygamy

as its corner stone, have recently been peopling in large numbers Idaho,

Arizona, and other of our Western Territories is well calculated to

excite the liveliest interest and apprehension. It imposes upon Congress

and the Executive the duty of arraying against this barbarous system all

the power which under the Constitution and the law they can wield for

its destruction.

Reference has been already made to the obstacles which the United States

officers have encountered in their efforts to punish violations of law.

Prominent among these obstacles is the difficulty of procuring legal

evidence sufficient to warrant a conviction even in the case of the most

notorious offenders.

Your attention is called to a recent opinion of the Supreme Court of the

United States, explaining its judgment of reversal in the case of Miles,

who had been convicted of bigamy in Utah. The court refers to the fact

that the secrecy attending the celebration of marriages in that

Territory makes the proof of polygamy very difficult, and the propriety

is suggested of modifying the law of evidence which now makes a wife

incompetent to testify against her husband.

This suggestion is approved. I recommend also the passage of an act

providing that in the Territories of the United States the fact that

a woman has been married to a person charged with bigamy shall not

disqualify her as a witness upon his trial for that offense. I further

recommend legislation by which any person solemnizing a marriage in any

of the Territories shall be required, under stringent penalties for

neglect or refusal, to file a certificate of such marriage in the

supreme court of the Territory.

Doubtless Congress may devise other practicable measures for obviating

the difficulties which have hitherto attended the efforts to suppress

this iniquity. I assure you of my determined purpose to cooperate with

you in any lawful and discreet measures which may be proposed to that

end.

Although our system of government does not contemplate that the nation

should provide or support a system for the education of our people, no

measures calculated to promote that general intelligence and virtue upon

which the perpetuity of our institutions so greatly depends have ever

been regarded with indifference by Congress or the Executive.

A large portion of the public domain has been from time to time devoted

to the promotion of education.

There is now a special reason why, by setting apart the proceeds of its

sales of public lands or by some other course, the Government should aid

the work of education. Many who now exercise the right of suffrage are

unable to read the ballot which they cast. Upon many who had just

emerged from a condition of slavery were suddenly devolved the

responsibilities of citizenship in that portion of the country most

impoverished by war. I have been pleased to learn from the report of the

Commissioner of Education that there has lately been a commendable

increase of interest and effort for their instruction; but all that can

be done by local legislation and private generosity should be

supplemented by such aid as can be constitutionally afforded by the

National Government.

I would suggest that if any fund be dedicated to this purpose it may be

wisely distributed in the different States according to the ratio of

illiteracy, as by this means those localities which are most in need of

such assistance will reap its special benefits.

The report of the Commissioner of Agriculture exhibits the results of

the experiments in which that Department has been engaged during the

past year and makes important suggestions in reference to the

agricultural development of the country.

The steady increase of our population and the consequent addition to

the number of those engaging in the pursuit of husbandry are giving

to this Department a growing dignity and importance. The Commissioner's

suggestions touching its capacity for greater usefulness deserve

attention, as it more and more commends itself to the interests which

it was created to promote.

It appears from the report of the Commissioner of Pensions that since

1860 789,063 original pension claims have been filed; 450,949 of these

have been allowed and inscribed on the pension roll; 72,539 have been

rejected and abandoned, being 13+ per cent of the whole number of claims

settled.

There are now pending for settlement 265,575 original pension claims,

227,040 of which were filed prior to July 1, 1880. These, when allowed,

will involve the payment of arrears from the date of discharge in case

of an invalid and from date of death or termination of a prior right in

all other cases.

From all the data obtainable it is estimated that 15 per cent of the

number of claims now pending will be rejected or abandoned. This would

show the probable rejection of 34,040 cases and the probable admission

of about 193,000 claims, all of which involve the payment of arrears of

pension.

With the present force employed, the number of adjudications remaining

the same and no new business intervening, this number of claims

(193,000) could be acted upon in a period of six years; and taking

January 1, 1884, as a near period from which to estimate in each case

an average amount of arrears, it is found that every case allowed would

require for the first payment upon it the sum of $1,350. Multiplying

this amount by the whole number of probable admissions gives

$250,000,000 as the sum required for first payment. This represents the

sum which must be paid upon claims which were filed before July 1, 1880,

and are now pending and entitled to the benefits of the arrears act.

From this amount ($250,000,000) may be deducted from ten to fifteen

millions for cases where, the claimant dying, there is no person who

under the law would be entitled to succeed to the pension, leaving

$235,000,000 as the probable amount to be paid.

In these estimates no account has been taken of the 38,500 cases filed

since June 30, 1880, and now pending, which must receive attention as

current business, but which do not involve the payment of any arrears

beyond the date of filing the claim. Of this number it is estimated that

86 per cent will be allowed.

As has been stated, with the present force of the Pension Bureau (675

clerks) it is estimated that it will take six years to dispose of the

claims now pending.

It is stated by the Commissioner of Pensions that by an addition of 250

clerks (increasing the adjudicating force rather than the mechanical)

double the amount of work could be accomplished, so that these cases

could be acted upon within three years.

Aside from the considerations of justice which, may be urged for a

speedy settlement of the claims now on the files of the Pension Office,

it is no less important on the score of economy, inasmuch as fully

one-third of the clerical force of the office is now wholly occupied in

giving attention to correspondence with the thousands of claimants whose

cases have been on the files for the past eighteen years. The fact that

a sum so enormous must be expended by the Government to meet demands for

arrears of pensions is an admonition to Congress and the Executive to

give cautious consideration to any similar project in the future. The

great temptation to the presentation of fictitious claims afforded by

the fact that the average sum obtained upon each application is $1,300

leads me to suggest the propriety of making some special appropriation

for the prevention of fraud.

I advise appropriations for such internal improvements as the wisdom of

Congress may deem to be of public importance. The necessity of improving

the navigation of the Mississippi River justifies a special allusion to

that subject. I suggest the adoption of some measure for the removal of

obstructions which now impede the navigation of that great channel of

commerce.

In my letter accepting the nomination for the Vice-Presidency I stated

that in my judgment--

No man should be the incumbent of an office the duties of which he is

for any cause unfit to perform; who is lacking in the ability, fidelity,

or integrity which a proper administration of such office demands. This

sentiment would doubtless meet with general acquiescence, but opinion

has been widely divided upon the wisdom and practicability of the

various reformatory schemes which have been suggested and of certain

proposed regulations governing appointments to public office.

The efficiency of such regulations has been distrusted mainly because

they have seemed to exalt mere educational and abstract tests above

general business capacity and even special fitness for the particular

work in hand. It seems to me that the rules which should be applied to

the management of the public service may properly conform in the main

to such as regulate the conduct of successful private business:

Original appointments should be based upon ascertained fitness.

The tenure of office should be stable.

Positions of responsibility should, so far as practicable, be filled by

the promotion of worthy and efficient officers.

The investigation of all complaints and the punishment of all official

misconduct should be prompt and thorough.

The views expressed in the foregoing letter are those which will govern

my administration of the executive office. They are doubtless shared by

all intelligent and patriotic citizens, however divergent in their

opinions as to the best methods of putting them into practical

operation.

For example, the assertion that "original appointments should be based

upon ascertained fitness" is not open to dispute.

But the question how in practice such fitness can be most effectually

ascertained is one which has for years excited interest and discussion.

The measure which, with slight variations in its details, has lately

been urged upon the attention of Congress and the Executive has as

its principal feature the scheme of competitive examination. Save for

certain exceptions, which need not here be specified, this plan would

allow admission to the service only in its lowest grade, and would

accordingly demand that all vacancies in higher positions should be

filled by promotion alone. In these particulars it is in conformity

with the existing civil-service system of Great Britain; and indeed the

success which has attended that system in the country of its birth is

the strongest argument which has been urged for its adoption here.

The fact should not, however, be overlooked that there are certain

features of the English system which have not generally been received

with favor in this country, even among the foremost advocates of

civil-service reform.

Among them are:

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