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m PREWIT'S MESSAGE. 'J'othe Conorew of the United Slates: I 'In dl (charge of* eonstitutlonol duty, and i following u well-established precedent in tlio ' oxocutive office, I liorowlth transmit to tho ' Oongrosn atite roossombllngcertain intorma- < tion concerning tho stnto of tbo Union, to-; f totlior with suoh.rocomniondntions for logis- ativo uoiisldoratlon as appear noeossary and ' expedient, I Our govornmont ha» consistently main- ' talncd Its relations of frluncjohip toward all i other powers, and of nolshborly interest to- | ward those whose possessions aro contiguous to our own. Few questions have arisen dur- ing tho past .your with othor governments, and uono of those are beyond tho reach of settlement In frlondly counuol, Tlio eruol ti'oatment of inoffonslvo Ohlnoso has, I regret to say, boon repeated in some of tho far Vvostorn States and Terrltorie»,,nnd acta of v.'olonco against tuoso people, beyond tbepowor of tho local constituted authorities to prevent, and difficult to punish, are re- ported oven in distant Alaska, Much of this violonco can bo traced to raco prejudice and competition of labor, which cannot, however, justify tho oppression of strangers whoso safety Is guaranteed by our treaty with China oqually with the most favored nations. In oponing our vast domain to alion ele- nientw, tho purpose of our law-givers was to invito assimilation, and not to provido un arena for endless antagonisms. Tho para- mount duty of inaintalninar public order and dofoudlng the interests of our own people may require tho adoption of measures of re- striction, but they should not tolorato tho oppression of individuals of n special raco. 1 am not without assurance that tho govern- ment of China,whoso friendly disposition to- ward us I am most happy to rocognlzo, will meet us half way In dovising a comprehen- sive remedy, by which an *)ffdctlvo limita- tion of Chlnoso emigration, Joined to protec- tion of thoBOChlnoBosubJectswho remain in this country, may be secured. THE CANADIAN FISHERIES. The recommendations contained in my laBt annual message In relation to a mode of set- tlement of the fishery rights In the waters of British North America—so long a subject of anxious difference between the Unite I States and Groat Britain—was mot toy an adverse vote of tho Sonato on April IS last, and thoroupon negotiations were instituted to obtain an agrooment with her Britannic majesty's government for the promulgation of such joint interpretation and definition of tho article of tho convention of 1818, relating to tho territorial waters and inshore fisheries of the British provinces, as should secure the Canadian rights from encroachment by United States fisherman, and, at tho same timej insure tho enjoyment by the latter of thp privileges guaranteed to them by such •fe—ia.^ «8n vention. •\ Tfio questions involved aro of long stand- ing, of grave consequence, and' from time to time for nearly three-quarters of a century have given rise to earnest international dis- cussions not unaccompanied by irritation. Temporary arrangements by treaties have served to allay friction—which, however, has revived as each treaty was terminated. The last arrangement, under tho treaty of 1871, was abrogated af t.-r due notice by the United States on June 30, 1885, but 1 was enabled to obtain for our fishermen for the remainder of that season enjoyment of the full privileges accorded by tho terminated treaty. The joint high commission by whom the treaty had been negotiated—although in- vested with plenary power t ) make a perma- nent settlement—were content with a tem- porary arrangement, after tho termination of which the question was relegated to tho stipulations of tho treaty of 1818, as to the first article of which no construction satis- factory to both countrios has ever been agreed upon. The progress of civilisation and growth of population in the British provinces to which i the fisheries in question are contiguous, and | tho expansion of commercial intercourse be- tween them and the United States, presents to-day a conditiou of affairs scarcely realiza- ble at the date of the negotiations of 1818. New and vast interests have been brought Into existence; modes of intercourse between the respective countries have been invented and multiplied; tho methods of conducting the fisheries have been wholly changed; and all this is ne essarily entitled to candid and caroful consideration in -the adjustment of the terms and conditions of intercourse and commerce between the United States and their neighbors along a frontier of mora than 3.500 mires. This propinquity, community of language »ud occupation, and similarity of political and social institutions, indicate the practica- bility and obvious wisdom of maintaining mutually beneficial and friendly relations. Whilst I am unfeignedly desirous that such relations should oxtet between us and the inhabitantsjof Canada, yet the action of their officials dcrlng the past season toward our flshernieii has been such as to seriously threaten their continuance. AlthougK disappointed in my efforts to se- em* a satisfactory settlement of the fishery question, negotiations are still pending, with * reasonable hope that before the close of the present session of Congress announcement may be made that an acceptable conclusion has been reached. As at an early day there may be laid be- fore Congress the correspondence of the De- partment of Btato in relation to this impor- tant BUbjeet, so that tho historv of the lost fishing season may be fully diselo.ed and tho action and the attitude of the administration clearly comprehended, a more extended re- ference's not deomed necessary in this com- munication. In compliance with a resolution of tho Senate, .<t communicated to that body on August:3;last,and also to tho Houseof Repre- sentatives;:-the correspondonce'intheeaseof A. K. Cutting, an American citizen then imprjsoneii inMexico.eharged with the com- mission ot a nonal oilowo m Texn«. of which H Mexican citizen was tho object, After demand lind boon mads for his ro lease the uhargu twalnst him was amended so as to Include a vlo'atlou of Mexican law within Mexican territory, This Joinder of iilloscd offences, ono wltliln and tlio other exterior to Mexico, inrlncod moti ordor a special Investigation of tlio 1 CAM—pointing which Mr. Cutting was ro- ; iMisiid, ., , Tlilii incident 1ms, howovor, difloloHod a olalm of jurisdiction by Mexico, novel Inour history, whoroby any oil'onco, committed 1 anywhere by n foreigner, ponnl In tho place of its commission, of which a Mexican is tlio objoot, may, if tho offender bo found In Mox- | ico, bo there trlod and punished in conform- ity with Mexican laws. , , , ., This jurisdiction was sustaluoa by the courts of Mexico in tho Cutting case, ana ap- proved by tho executive branch of that gov- ernment, upou tho authority of a Mexican statute. Tho appellate court, in releasing Mr. Cutting, docifled that the abandonment of tho complaint by tho Moxi.-an citizen ag- grieved by the allogod crime (a llbollous pub- fleatlon) removed tho baslB of further prose- cution, and alio declared justice to have boon satisfied toy the enforcement of a small part of the original sontonco, Tho admission of suoh a pretension would bo attended with serious results, lnvaslvo of tho jurisdiction of this government, and highly dangerous to our citizens in foreign lauds; therefore I have doniod it, and pro- testod'against its attemplod oxorclso, as un- warranted by tho principles of law and inter- national usages, A sovereign has jurisdiction of offenses which take effect within his territory, al- tnougii concocted or commenced outside of it; but tho right is denied of any foreign sov- ereign to punish a citizen ot tlio United Stated for an oll'euco consummated on our soil in violation of our laws, ovon though tho offence be against a subject or citizen of suoh sovereign. The Mexican stituto in question makes the claim broadly, and tlio principle, if conceded, .would create a duul responsibil- ity in the eitlzon, and load to inextricable confusion, destructive of that certainty in tho law which is an essontlnl of liberty, When citizens of the United States volun- tarily go into a foreign country they must abide by the laws thero in force, and will not bo protected by their own government from the consevuencos ot an offence against I those laws committed in such foreign coun- try ; but watchful care and interest of this government over its citizens are not relin- quished because they have gone abroad; and if charged with crime committed in tho for- eign land a fair and open trial, conducted with decent regard for justice and humanity, will bo demanded for them. With less than that this government will not bo content when the life or liberty of its citizens is at stake. Whatever the degree to which extra-terri- torial criminal jurisdiction may have been formerly allowed oy consent.and reciprocal agreement among certain of the European States, no such dojtrine or practice was ever known to the laws of this country or of that from which our institutions have mainly been derived. In the case of Mexico there are reasons especially strong for porfoet harmony in the mutual exercise of jurisdiction. Nature has made us irrevocably ne'ghbors, and wisdom and kind feeling sh uld makes us friends. The overflow of capital and enterprise from the United States is a potent factor in assist- ing the development of the resources of Mexico, and in building up the prosperity of both countries. To assist this good work all grounds of ap- prehension for tho security of person and property should be removed: and I trust that in the interests of good neighborhood the statute referred to will be so modified as to eliminate the present possibilites of dangor to tho peace of the two countries. THE TREASURY REPORT. The ordinary receipts of the government for the fiscal year ended June SO, 1880, were $888,430,727,011. Of this amount $10»,9O5,- 023.41 was received from customs and $116,- 805,938.48 from internal revenue. Tho total receipts, as here stated, were $13,74(1,020.(16 greater than for tho previous year, but the increase from customs was $11,484,084.10 and from internal revenue $4,407,21.1)4, making a gain in these items for the last rear of $1'5,- 841,296.04—a falling off in other resources reducing the total increase to tho smaller amount mentioned. The expense at the different custom houses of collecting this inureasad customs revenue was less thanthe expense attending tho col- lision of such levenuo for tho preceding year by 84iM,0JX, and the increased receipts of iutornal revenue were collected at a cost to tho internel revenue bureau of $155,044.09 les-i than the expense of such collection for tho nrovious year. J he total ordinary expenses of the govern- ment for the fiscal year ended Juno b0, 1881), were $213,488,138.50,being less by $17,788,971) than such expenditures for the year preceding, and leaving a surplus in the treasury at tho close of the last fiscal year of $v)3,056,588.50, as against $03,463,771.27 at the close of the previous year, being an increase in such sur- plus of $30,402,817. 29. For the current year to end June 30,1S87, the ascertained receipts up to October 1, 188(1, with such reoipts estimated for the re- mainder of the year, amount to $356,000,000. The expenditures ascertained and esti- mated for the same period are «IM8,O)0,OO0, indicating an anticipated surplus at the close of the year of $9B,000;000. The total value of the exports from tho United States to foreign countries diirng tho fiscal year is stated and compared with tho preceding year as follows: • For the year For the year end'a JuneSD, end'ff June 3D, 188 i. 1SS3; Domestic nicrclmn- . diss :.,-. tfl05,M4.528 00 $720,682,910 0) Foreign merchiUBillie 53,5i)0,;!fl) Ol) 15,500,800 00 Gold ; 4i,952,19100 8,477,892 00 Silver, 29,511,219 00 88,768,0315 00 A BTAOE 07 BVVmVLVOVH 11EVKNUE. In my last annual mmuaxo to the Congress attention was directed to tho fact that tho revenues of tho govornmont oxciioJod Its ac- tual needs; and it was suggostod that legisla- tive action bo tnkon to roliovo tho poonlo (from tlio uniioeos-ary burden of taxation thus made apparent, In view of tlio pressing importance of tho subject I doom it my duty to again urgo its consideration, Tho iueomo of the government, by its in- creased voiumo and thorough ooanomios in Its collection, Is now more than over in excess of public necessities, The application of tho surplus to tho paymeut of such portion of tho public debt as Is now at our option subject to extinguishment, if continued at the rate which has lately prevailed, would rotiro that class of indebtedness within loss than one your from this date. Thus a continuation of our present revenue system would soon result in tho ro- colpt of an annual income much greater than necessary to ineetgovernmentoxponBos, with no indebtedness upon wbioh it could be applied. Wo should thon bo confronted with a vast quantity of money tho circulating me- dium of tho people, hoarded in tho Treasury When it should be in their hands, or we should bo drawn into wasteful public extrav- aganco with all tho corrupting national de- moralization which follows in its train. But it is not tho simple existence of tbls surplus, and Its threatened attendant evils which furnish tho strongest argument against our present scale of Federal taxation, Its worst phase is the oxactlon of such a surplus through apei'vorslonof tho eolations between the people and thoir government, and a dan- gerous departure from the rules which limit the right of Federal taxation. Good government, and especially tho gov- oi'umont of which every American citizen boasts, has for its objeats, tho protection of ovory person within its care in tho greatest liberty consistent with the good order of so- ciety, and his perfect security in tho enjoy- ment of his earnings, with tho least possiblo diminution for public needs, When mora of the pooplo's substance is oxaotod through the form of taxation than Is r.ojessnry to meet the just obligations of the Government and tho oxpense of its economical administra- tion, such exaction becomes ruthless extor- tion and a violation of the fundamental prin- ciples of a free; govornmont. Tho indirect manner In which theso exac- tions are made has a tendency to conceal their true character and thoir extent. But we have arrived at a stage of sunorfluous revenue which has aroused the people to a realization of the f uet, that the amount raised professedly for tho support of the govern- ment, is paid by them as absolutely, if added to the price of the things which supply their daily wants, as if it was paid at fixed periods i into the hand of the tax gatherer. Those who toil-fdr daily wages are begin- ning; to understand that capital, though 1 sometimes vaunting ita Importance and clamoring for the protection And fevor-of lbs g overnment, is dull and sluggim till; touched y the magical hand of labor, it springs into activity, furnishing an occasion for Fed- eral taxation, and gaining the value which enables it to bear its burden,,»nd the labor- ing man is thoughtfully inquiring whether in these circumstances, and considering the tribute he constantly pays into the public treasury as he supplies his daily wants, he receives bis fair share of advantages. There is also a suspicion abroad, that the urphis of our revenues indicates abnormal 'and exceptional business proflti,»which, un- der the system which Droduces such surplus, increase without corresponding benefit to tho people at largo, the vast accumulations of a few among our citizens whose fortunes, ri- valing tbe wealth of tho most favored in anti-democratic nations, aro not the natural growth of a steady, plain and industrious re- public. • a Our farmers, too, and those engagod di- rectly and indirectly in supplying the pro- ducts of agriculture, see that day by day, and as often as the daily wants of their house- holds recur, they are forced to pay excessive and needless taxation, while their products' struggle in foreign markets with the competi- tion of nations, which, by allowing a freer exchange of productions than we permit, enable their people to sell for prices which distress the American farmer, And all tho people know that the average rate of Federal taxation upon imports is to- day, in time of peace, but little less, whilo upon some articles of necessary consumption it is actually more, than was imposed by tho grievous burden will.ngly borne, at a timd when tbe government needed millions to maintain by war the safety and integrity of the Union. It has beon tho policy of the government to collect the nrincipal part of its revenues by a tax upon imports, and no change in this policy is desirable. But the present condition of affairs constrains our people to demand i that by a revision of our revenue laws the re eipts of the government shall be reduced to the necessary exnenso of its economical administration, and this demand should bO recognized and obeyed by the people's rep- resentatives in the legislative branch of the government. In readjusting tho burdens of Federal tax- ation, sound pabiic policy requires that such of our citizens as have built up large and 1 im- portant industries under present conditions, should not be suddenly and to their injury deprived of advantages to which they have adapted their business; but if the public good requires it, they should be content with such consideration as shall deal fairly and cau- tiously with their interests, while the just demand of the people for relief from need- loss taxation is honestly answered; A reasonable and timely submission to such d demand should certainly be possible without disastrous shock to any interest; and a careful concession sometimes averts abrupt and heedless action, of ten the outgrowth of impatiencorand delayed justice. Due regard should be also accorded in any proposed, readjustment to tho interests of i American labor so lor as they are involved. • Vta congratulate ourselves that there is among us no laboring clans, tlxod with un- yielding bounds and doomed under all condi- tions to the inexorablo fate of dally toil. We recognize in labor a chief factor in ttw wealth of tbo republic, and wo treat those who have it in their keeping as citizens entitled to to* most caroful regard and. thoughtful atten- tion. This regard and attention should ba awarded thorn, not only because labor is tb* capital of our workingmen, justly entitled to its share of govornmont favor, but for tb* further and not less important reason that tho laboring man surrounded by his family In his humble homo as a consumer Is vitally interested in all that cheapens the cost at living and enables him to Tiring within bto domestic olrele additional comforti and ad- vantages. This relation of tho workingmun to tas rovonuo laws of tho country, and the manner in which It palpably influences the question of wages, should not be forgotten in the jus- tifiable prominence glvon to tbo proper maintenance of the supply and tho protection of well-paid labor. And theso consideration* suggest such an arraagemont of government revenues us shall reduco tho expense of liv- ing, whilo it does not curtail the opportunity for work nor reduce tho compensation of American labor, and injuriously affect Ita condition and the dignified jlat'o it holds Inf tho estimation of our people. But our farmei-B and agriculturists—tho«« who from the soil produce Uio things con- sumed by all—aro perhaps moro dirootly and plainly concerned than any other of our citi- zens in a just and careful system of Federal taxation. Those actually ongaged in and moro remotely connected with this kind of work number nearly due-half of our popula- tion. None labor harder or more continu- ously thou thoy. No onactmonts limit their hours of toll, and no interposition et the govornmont enhances to any great ox- tent the value of their products, And yet for many of the nocessurics and comforts of life, which the most scrupulous economy ena- bles them to bring into thoir homes, and for their Implements of husbandry, tboy aro obliged to pay a price largely increased by an unnatural profit which, by tho action of the governmont, [is given to the moro favored manufacturer. I recommend that, keeping in view all these considerations, tbe increasing and un- necessary surplus of national income annual- ly accumulating bo released to tho people, by an amendment to our revenue laws which shall cheapen the prico of tho necessaries of life and give freer entrance to such imported materials as by American labor may bo-man- ufactured into marketable commodities. Nothing can bo accomplished, however, is the direction of this much-needed reform, un- less the subject is approached in a patriotic spirit of devotion to the interests of the en- tire country, and with.a willingness to yield something for tho public good. TB* rUDBIO DEBT. The sum paid upon the public debt durisj Ouriiig'thetwelveimonthsending October 31, 1886, three per cent, bonds were called far redemption amounting to $137,28.'), 100, of which $SO,84S;200 was so called to answer to* requirements of the law relating to tho sink- ing fund, and $4(1,030,(100 for the purposo_of reducing the public debt by application 6r« part of the surplus in the Treasury to that object. Of the bonds thus called $10 2,200,450 became subject under such calls to redemp- tion prior to November 1, 1880. The remain- der, amounting to $25,013,650matured under tho calls after that date. SILVER COINAGE. During the lis -a! year ending June 80,1888, thore were coined, under the compulsory silver coinage act of 1878, 29.183,005 silver dollars, and the cost of the silver used ia such coinage was $23,448,8&0.01. There hod ibeen coined up to tho close of tho previous fiscal year, under the provisions ot tbo law, 203,882,551 silver dollars, and on the 1st day of December, 18S0, the total amount of sucfe coinage was $247,181,549. . The director of tho mint reports at the time of the passage of tbe law of 1878 direct- ing this coinage, tho intrinsic value of th» dollars thus coined was ninety-four and one- fourth cents each, and that on the 31st day of Julyj 188(1, the price of silver reached the lowest stage ever known, so that the intrin- sic or bullion price of our standard silver dollar at that date was. less than seyety-two cents. The price of silver on the 30th day of November last was such as to make these dollars intrinsically worth seventy-eight cents each. Those differences in value of the coins rep- resent the fluctuations in tho price of silver, and they certainly do not indicate that com- pulsory coinage by tho government enhance* the price of that commodity, or secures uni- formity in its value. Every fair and legal effort has been made by the Treasury Department to distribute this currency among the pe6ple. The with- drawal of United States Treasury notes of small denominations and nhe issuing of Bmall silver certificates havo been resorted to in the endeavor to accomplish tnis result, in. obedience to tho wftt. and sentiments of the representatives of the people in tho Congress. On the 27th day of November, 1888, the people held of the.=e coins, or certificates: representing them, the nominal sum of $166,873,041, and we still had $70,464,345 in the Treasury-a; nzaihstabout $142,804,055 so in the hands of tho people, and $73,805,876 remaining in the Treasury one year ago. The director of the mint again ftrges the necessity of more vault room for the purpose of storing the^e silver dollars which are not needed for oirculatida by the people. SUSPEND THE COINAGE OP SILVER. I have seen no reason to change the <rtew.\ expressed in my last annual message on the subject of this compulsory coihagej auu I again urge its suspension on all the grounds contaihoa in my former reccommeudation, reinforced by the\ significant increase of our. gold exportation during the last year, as appears by tho comparative f
