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 cannot 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.

2 Ab

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 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 one thousand millions.

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 ten cents to five 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 one million dollars,

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 modi fying the present system of the courts of the United States-a necessity due to the Jarge 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 tranquility during the past year in the Territory of Arizona. A band of armed desperadoes, known as "Cow Boys," 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 "Cow Boys" have also extended into Mexico, which the marauders reach from the Arizona frontier. With every disposition to meet the exigencies of the case, 1 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 per haps be within the scope of the law (Revised Statutes, section 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 expedi tions 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 be coming 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 been 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 difficul ties which have hitherto beset us.