The appropriation was not made, and as a consequence the active work of the

Commission was suspended, leaving the Commission itself still in existence.

Without the means, therefore, of causing qualifications to be tested in any

systematic manner or of securing for the public service the advantages of

competition upon any extensive plan, I recommended in my annual message of

December, 1877, the making of an appropriation for the resumption of the

work of the Commission.

In the meantime, however, competitive examinations, under many

embarrassments, have been conducted within limited spheres in the Executive

Departments in Washington and in a number of the custom-houses and

post-offices of the principal cities of the country, with a view to further

test their effects, and in every instance they have been found to be as

salutary as they are stated to have been under the Administration of my

predecessor. I think the economy, purity, and efficiency of the public

service would be greatly promoted by their systematic introduction,

wherever practicable, throughout the entire civil service of the

Government, together with ample provision for their general supervision in

order to secure consistency and uniform justice.

Reports from the Secretary of the Interior, from the Postmaster-General,

from the postmaster in the city of New York, where such examinations have

been some time on trial, and also from the collector of the port, the naval

officer, and the surveyor in that city, and from the postmasters and

collectors in several of the other large cities, show that the competitive

system, where applied, has in various ways contributed to improve the

public service.

The reports show that the results have been salutary in a marked degree,

and that the general application of similar rules can not fail to be of

decided benefit to the service.

The reports of the Government officers, in the city of New York especially,

bear decided testimony to the utility of open competitive examinations in

their respective offices, showing that--These examinations and the

excellent qualifications of those admitted to the service through them have

had a marked incidental effect upon the persons previously in the service,

and particularly upon those aspiring to promotion. There has been on the

part of these latter an increased interest in the work and a desire to

extend acquaintance with it beyond the particular desk occupied, and thus

the morale of the entire force has been raised. The examinations have been

attended by many citizens, who have had an opportunity to thoroughly

investigate the scope and character of the tests and the method of

determining the results, and those visitors have without exception approved

the methods employed, and several of them have publicly attested their

favorable opinion. Upon such considerations I deem it my duty to renew the

recommendation contained in my annual message of December, 1877, requesting

Congress to make the necessary appropriation for the resumption of the work

of the Civil Service Commission. Economy will be promoted by authorizing a

moderate compensation to persons in the public service who may perform

extra labor upon or under the Commission, as the Executive may direct.

I am convinced that if a just and adequate test of merit is enforced for

admission to the public service and in making promotions such abuses as

removals without good cause and partisan and official interference with the

proper exercise of the appointing power will in large measure disappear.

There are other administrative abuses to which the attention of Congress

should be asked in this connection. Mere partisan appointments and the

constant peril of removal without cause very naturally lead to an absorbing

and mischievous political activity on the part of those thus appointed,

which not only interferes with the due discharge of official duty, but is

incompatible with the freedom of elections. Not without warrant in the

views of several of my predecessors in the Presidential office, and

directly within the law of 1871, already cited, I endeavored, by regulation

made on the 22d day of June, 1877, to put some reasonable limits to such

abuses. It may not be easy, and it may never perhaps be necessary, to

define with precision the proper limit of political action on the part of

Federal officers. But while their right to hold and freely express their

opinions can not be questioned, it is very plain that they should neither

be allowed to devote to other subjects the time needed for the proper

discharge of their official duties nor to use the authority of their office

to enforce their own opinions or to coerce the political action of those

who hold different opinions.

Reasons of justice and public policy quite analogous to those which forbid

the use of official power for the oppression of the private citizen impose

upon the Government the duty of protecting its officers and agents from

arbitrary exactions. In whatever aspect considered, the practice of making

levies for party purposes upon the salaries of officers is highly

demoralizing to the public service and discreditable to the country. Though

an officer should be as free as any other citizen to give his own money in

aid of his opinions or his party, he should also be as free as any other

citizen to refuse to make such gifts. If salaries are but a fair

compensation for the time and labor of the officer, it is gross injustice

to levy a tax upon them. If they are made excessive in order that they may

bear the tax, the excess is an indirect robbery of the public funds.

I recommend, therefore, such a revision and extension of present statutes

as shall secure to those in every grade of official life or public

employment the protection with which a great and enlightened nation should

guard those who are faithful in its service.

Our relations with foreign countries have continued peaceful.

With Great Britain there are still unsettled questions, growing out of the

local laws of the maritime provinces and the action of provincial

authorities deemed to be in derogation of rights secured by treaty to

American fishermen. The United States minister in London has been

instructed to present a demand for $105,305.02 in view of the damages

received by American citizens at Fortune Bay on the 6th day of January,

1878. The subject has been taken into consideration by the British

Government, and an early reply is anticipated.

Upon the completion of the necessary preliminary examinations the subject

of our participation in the provincial fisheries, as regulated by treaty,

will at once be brought to the attention of the British Government, with a

view to an early and permanent settlement of the whole question, which was

only temporarily adjusted by the treaty of Washington.

Efforts have been made to obtain the removal of restrictions found

injurious to the exportation of cattle to the United Kingdom.

Some correspondence has also occurred with regard to the rescue and saving

of life and property upon the Lakes, which has resulted in important

modifications of the previous regulations of the Dominion government on the

subject in the interest of humanity and commerce.

In accordance with the joint resolution of the last session of Congress,

commissioners were appointed to represent the United States at the two

international exhibitions in Australia, one of which is now in progress at

Sydney, and the other to be held next year at Melbourne. A desire has been

expressed by our merchants and manufacturers interested in the important

and growing trade with Australia that an increased provision should be made

by Congress for the representation of our industries at the Melbourne

exhibition of next year, and the subject is respectfully submitted to your

favorable consideration.

The assent of the Government has been given to the landing on the coast of

Massachusetts of a new and independent transatlantic cable between France,

by way of the French island of St. Pierre, and this country, subject to any

future legislation of Congress on the subject. The conditions imposed

before allowing this connection with our shores to be established are such

as to secure its competition with any existing or future lines of marine

cable and preclude amalgamation therewith, to provide for entire equality

of rights to our Government and people with those of France in the use of

the cable, and prevent any exclusive possession of the privilege as

accorded by France to the disadvantage of any future cable communication

between France and the United States which may be projected and

accomplished by our citizens. An important reduction of the present rates

of cable communication with Europe, felt to be too burdensome to the

interests of our commerce, must necessarily flow from the establishment of

this competing line.

The attention of Congress was drawn to the propriety of some general

regulation by Congress of the whole subject of transmarine cables by my

predecessor in his message of December 7, 1875, and I respectfully submit

to your consideration the importance of Congressional action in the

matter.

The questions of grave importance with Spain growing out of the incidents

of the Cuban insurrection have been for the most part happily and honorably

settled. It may reasonably be anticipated that the commission now sitting

in Washington for the decision of private cases in this connection will

soon be able to bring its labors to a conclusion.

The long-standing question of East Florida claims has lately been renewed

as a subject of correspondence, and may possibly require Congressional

action for its final disposition.

A treaty with the Netherlands with respect to consular rights and

privileges similar to those with other powers has been signed and ratified,

and the ratifications were exchanged on the 31st of July last. Negotiations

for extradition treaties with the Netherlands and with Denmark are now in

progress.

Some questions with Switzerland in regard to pauper and convict emigrants

have arisen, but it is not doubted that they will be arranged upon a just

and satisfactory basis. A question has also occurred with respect to an

asserted claim by Swiss municipal authorities to exercise tutelage over

persons and property of Swiss citizens naturalized in this country. It is

possible this may require adjustment by treaty.

With the German Empire frequent questions arise in connection with the

Subjects of naturalization and expatriation, but the Imperial Government

has constantly manifested a desire to strictly maintain and comply with all

treaty stipulations in regard to them.

In consequence of the omission of Congress to provide for a diplomatic

representative at Athens, the legation to Greece has been withdrawn. There

is now no channel of diplomatic communication between the two countries,

and the expediency of providing for one in some form is submitted to

Congress.

Relations with Austria, Russia, Italy, Portugal, Turkey, and Belgium

continue amicable, and marked by no incident of especial importance.

A change of the personal head of the Government of Egypt has taken place.

No change, however, has occurred in the relations between Egypt and the

United States. The action of the Egyptian Government in presenting to the

city of New York one of the ancient obelisks, which possess such historic

interest, is highly appreciated as a generous mark of international regard.

If prosperity should attend the enterprise of its transportation across the

Atlantic, its erection in a conspicuous position in the chief commercial

city of the nation will soon be accomplished.

The treaty recently made between Japan and the United States in regard to

the revision of former commercial treaties it is now believed will be

followed by similar action on the part of other treaty powers. The

attention of Congress is again invited to the subject of the indemnity

funds received some years since from Japan and China, which, with their

accumulated interest, now amount to considerable sums. If any part of these

funds is justly due to American citizens, they should receive it promptly;

and whatever may have been received by this Government in excess of

strictly just demands should in some form be returned to the nations to

whom it equitably belongs.

The Government of China has signified its willingness to consider the

question of the emigration of its subjects to the United States with a

dispassionate fairness and to cooperate in such measures as may tend to

prevent injurious consequences to the United States. The negotiations are

still proceeding, and will be pressed with diligence.

A question having arisen between China and Japan about the Lew Chew

Islands, the United States Government has taken measures to inform those

powers of its readiness to extend its good offices for the maintenance of

peace if they shall mutually deem it desirable and find it practicable to

avail themselves of the proffer.

It is a gratification to be able to announce that, through the judicious

and energetic action of the military commanders of the two nations on each

side of the Rio Grande, under the instructions of their respective

Governments, raids and depredations have greatly decreased, and in the

localities where formerly most destructive have now almost wholly ceased.

In view of this result, I entertain a confident expectation that the

prevalence of quiet on the border will soon become so assured as to justify

a modification of the present orders to our military commanders as to

crossing the border, without encouraging such disturbances as would

endanger the peace of the two countries.

The third installment of the award against Mexico under the claims

commission of July 4, 1868, was duly paid, and has been put in course of

distribution in pursuance of the act of Congress providing for the same.

This satisfactory situation between the two countries leads me to

anticipate an expansion of our trade with Mexico and an increased

contribution of capital and industry by our people to the development of

the great resources of that country. I earnestly commend to the wisdom of

Congress the provision of suitable legislation looking to this result.

Diplomatic intercourse with Colombia is again fully restored by the arrival

of a minister from that country to the United States. This is especially

fortunate in view of the fact that the question of an inter-oceanic canal

has recently assumed a new and important aspect and is now under discussion

with the Central American countries through whose territory the canal, by

the Nicaragua route, would have to pass. It is trusted that enlightened

statesmanship on their part will see that the early prosecution of such a

work will largely inure to the benefit, not only of their own citizens and

those of the United States, but of the commerce of the civilized world. It

is not doubted that should the work be undertaken under the protective

auspices of the United States, and upon satisfactory concessions for the

right of way and its security by the Central American Governments, the

capital for its completion would be readily furnished from this country and

Europe, which might, failing such guaranties, prove inaccessible.

Diplomatic relations with Chile have also been strengthened by the

reception of a minister from that country.

The war between Peru, Bolivia, and Chile still continues. The United States

have not deemed it proper to interpose in the matter further than to convey

to all the Governments concerned the assurance that the friendly offices of

the Government of the United States for the restoration of peace upon an

honorable basis will be extended in case the belligerents shall exhibit a

readiness to accept them.

Cordial relations continue with Brazil and the Argentine Republic, and

trade with those countries is improving. A provision for regular and more

frequent mail communication, in our own ships, between the ports of this

country and the nations of South America seems to me to deserve the

attention of Congress as an essential precursor of an enlargement of our

commerce with them and an extension of our carrying trade.

A recent revolution in Venezuela has been followed by the establishment of

a provisional government. This government has not yet been formally

recognized, and it is deemed desirable to await the proposed action of the

people which is expected to give it the sanction of constitutional forms.

A naval vessel has been sent to the Samoan Islands to make surveys and take

possession of the privileges ceded to the United States by Samoa in the

harbor of Pago-Pago. A coaling station is to be established there, which

will be convenient and useful to United States vessels.

The subject of opening diplomatic relations with Roumania and Servia, now

become independent sovereignties, is at present under consideration, and is

the subject of diplomatic correspondence.

There is a gratifying increase of trade with nearly all European and

American countries, and it is believed that with judicious action in regard

to its development it can and will be still more enhanced and that American

products and manufactures will find new and expanding markets. The reports

of diplomatic and consular officers upon this subject, under the system now

adopted, have resulted in obtaining much valuable information, which has

been and will continue to be laid before Congress and the public from time

to time.

The third article of the treaty with Russia of March 30, 1867, by which

Alaska was ceded to the United States, provides that the inhabitants of the

ceded territory, with the exception of the uncivilized native tribes, shall

be admitted to the enjoyment of all the rights of citizens of the United

States and shall be maintained and protected in the free enjoyment of their

liberty, property, and religion. The uncivilized tribes are subject to such

laws and regulations as the United States may from time to time adopt in

regard to the aboriginal tribes of that country.

Both the obligations of this treaty and the necessities of the people

require that some organized form of government over the Territory of Alaska

be adopted.

There appears to be no law for the arrest of persons charged with

common-law offenses, such as assault, robbery, and murder, and no

magistrate authorized to issue or execute process in such cases. Serious

difficulties have already arisen from offenses of this character, not only

among the original inhabitants, but among citizens of the United States and

other countries who have engaged in mining, fishing, and other business

operations within the territory. A bill authorizing the appointment of

justices of the peace and constables and the arrest and detention of

persons charged with criminal offenses, and providing for an appeal to

United States courts for the district of Oregon in suitable cases, will at

a proper time be submitted to Congress.

The attention of Congress is called to the annual report of the Secretary

of the Treasury on the condition of the public finances.

The ordinary revenues from all sources for the fiscal year ended June 30,

1879, were $273,827,184.46; the ordinary expenditures for the same period

were $266,947,883.53, leaving a surplus revenue for the year of

$6,879,300.93.

The receipts for the present fiscal year, ending June 30, 1880, actual and

estimated, are as follows: Actual receipts for the first quarter,

commencing July 1, 1879, $79,843,663.61; estimated receipts for the

remaining three quarters of the year, $208,156,336.39; total receipts for

the current fiscal year, actual and estimated, $288,000,000.

The expenditures for the same period will be, actual and estimated, as

follows: For the quarter commencing July 1, 1879, actual expenditures,

$91,683,385.10; and for the remaining three quarters of the year the

expenditures are estimated at $172,316,614.90, making the total

expenditures $264,000,000, and leaving an estimated surplus revenue for the

year ending June 30, 1880, of $24,000,000. The total receipts during the

next fiscal year, ending June 30, 1881, estimated according to existing

laws, will be $288,000,000, and the estimated ordinary expenditures for the

same period will be $278,097,364.39, leaving a surplus of $9,902,635.61 for

that year.

The large amount expended for arrears of pensions during the last and the

present fiscal year, amounting to $21,747,249.60, has prevented the

application of the full amount required by law to the sinking fund for the

current year; but these arrears having been substantially paid, it is

believed that the sinking fund can hereafter be maintained without any

change of existing law.

The Secretary of War reports that the War Department estimates for the

fiscal year ending June 30, 1881, are $40,380,428.93, the same being for a

less sum of money than any annual estimate rendered to Congress from that

Department during a period of at least twelve years.

He concurs with the General of the Army in recommending such legislation as

will authorize the enlistment of the full number of 25,000 men for the line

of the Army, exclusive of the 3,463 men required for detached duty, and

therefore not available for service in the field.

He also recommends that Congress be asked to provide by law for the

disposition of a large number of abandoned military posts and reservations,

which, though very valuable in themselves, have been rendered useless for

military purposes by the advance of civilization and settlement.

He unites with the Quartermaster-General in recommending that an

appropriation be made for the construction of a cheap and perfectly

fireproof building for the safe storage of a vast amount of money accounts,

vouchers, claims, and other valuable records now in the

Quartermaster-General's Office, and exposed to great risk of total

destruction by fire.

He also recommends, in conformity with the views of the

Judge-Advocate-General, some declaratory legislation in reference to the

military statute of limitations as applied to the crime of desertion. In

these several recommendations I concur.

The Secretary of War further reports that the work for the improvement of

the South Pass of the Mississippi River, under contract with Mr. James B.

Eads, made in pursuance of an act of Congress, has been prosecuted during

the past year with a greater measure of success in the attainment of

results than during any previous year. The channel through the South Pass,

which at the beginning of operations in June, 1875, had a depth of only 7

1/2 feet of water, had on the 8th of July, 1879, a minimum depth of 26

feet, having a width of not less than 200 feet and a central depth of 30

feet. Payments have been made in accordance with the statute, as the work

progressed, amounting in the aggregate to $4,250,000; and further payments

will become due, as provided by the statute, in the event of success in

maintaining the channel now secured.

The reports of the General of the Army and of his subordinates present a

full and detailed account of the military operations for the suppression of

hostilities among the Indians of the Ute and Apache tribes, and praise is

justly awarded to the officers and troops engaged for promptness, skill,

and courage displayed.

The past year has been one of almost unbroken peace and quiet on the

Mexican frontier, and there is reason to believe that the efforts of this

Government and of Mexico to maintain order in that region will prove

permanently successful.

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