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The conditions of the Apache Indians, held as prisoners by the Government for eight years at a cost of half a million dollars, has been changed during the year from captivity to one which gives them an opportunity to demonstrate their capacity for self-support and at least partial civilization. Legislation enacted at the late Session of Congress gave the War Department authority to transfer the survivors, numbering 346, from Mount Vernon Barracks, in Alabama, to any suitable reservation. The Department selected as their future home the military lands near Fort Sill, Indian Terri tory, where, under military surveillance, the former prisoners have been established in agriculture under conditions favourable to their advancement.

In recognition of the long and distinguished military services and faithful discharge of delicate and responsible civil duties by Major-General John M. Schofield, now the General commanding the army, it is suggested to Congress that the temporary revival of the grade of Lieutenant-General in his behalf would be a just and gracious act, and would permit his retirement, now near at hand, with rank befitting his merits.

The Report of the Attorney-General notes the gratifying progress made by the Supreme Court in overcoming the arrears of its business, and in reaching a condition in which it will be able to dispose of cases as they arise without any unreasonable delay. This result is, of course, very largely due to the successful working of the plan inaugurating Circuit Courts of Appeal. In respect to these Tribunals the suggestion is made, in quarters entitled to the highest consideration, that an additional Circuit Judge for each circuit would greatly strengthen these Courts and the confidence reposed in their adjudication; and that such an addition would not create a greater force of Judges than the increasing business of such Courts requires. I commend the suggestion to the careful consideration of the Congress. Other important topics are adverted to in the Report, accompanied by recommendations, many of which have been treated at large in previous Messages, and at this time, therefore, need only be named. I refer to the abolition of the fee system as a measure of compensation to Federal officers; the enlargement of the powers of United States' Commissioners, at least in the Territories; the allowance of writs of error in criminal cases on behalf of the United States; and the establishment of degrees in the crime of murder. A topic dealt with by the Attorney-General of much importance is the condition of the administration of justice in the Indian Territory. The permanent solution of what is called the Indian problem is probably not to be expected at once, but meanwhile such ameliorations of present conditions as the existing system will admit of ought not to be

neglected. I am satisfied there should be a Federal Court established for the Territory, with sufficient Judges, and that this Court should sit within the Territory, and have the same jurisdiction as to Territorial affairs as is now vested in the Federal Courts sitting in Arkansas and Texas.

Another subject of pressing moment referred to by the AttorneyGeneral is the reorganization of the Union Pacific Railway Company on a basis equitable as regards all private interests and as favourable to the Government as existing conditions will permit. The operation of a railroad by a Court through a receiver is an anomalous state of things which should be terminated, on all grounds, public and private, at the earliest possible moment. Besides, not to enact the needed enabling legislation at the present Session postpones the whole matter until the assembling of a new Congress, and inevitably increases all the complications of the situation, and could not but be regarded as a signal failure to solve a problem which has practically been before the present Congress ever since its organization.

Eight years ago in my Annual Message I urged upon the Congress as strongly as I could the location and construction of two prisons for the confinement of United States' prisoners. A similar recommendation has been made from time to time since, and a few years ago a law was passed providing for the selection of sites for three such institutions. No appropriation has, however, been made to carry the Act into effect, and the old and discreditable condition still exists.

It is not my purpose at this time to repeat the considerations which make an impregnable case in favour of the ownership and management by the Government of the penal institutions in which. Federal prisoners are confined. I simply desire to again urge former recommendations on the subject, and to particularly call the attention of the Congress to that part of the Report of the Secretary of War in which he states that the military prison at Fort Leavenworth, Kansas, can be turned over to the Government as a prison for Federal convicts without the least difficulty and with an actual saving of money from every point of view.

Pending a more complete reform, I hope that by the adoption of the suggestion of the Secretary of War this easy step may be taken in the direction of the proper care of its convicts by the Government of the United States.

The Report of the Postmaster-General presents a comprehensive statement of the operations of the Post Office Department for the last fiscal year.

The receipts of the Department during the year amounted to 75,080,479 dol. 4 c., and the expenditures to 84,324,414 dol. 15 c.

The transactions of the postal service indicate with barometric certainty the fluctuations in the business of the country. Inasmuch, therefore, as business complications continued to exist throughout the last year to an unforeseen extent, it is not surprising that the deficiency of revenue to meet the expenditures of the Post Office Department, which was estimated in advance at about eight million dollars, should be exceeded by nearly one and a-quarter million dollars. The ascertained revenues of the last year, which were the basis of calculation for the current year, being less than estimated, the deficiency for the current year will be correspondingly greater, though the Postmaster-General states that the latest indications are so favourable that he confidently predicts an increase of at least 8 per cent. in the revenues of the current year over those of the last year.

The expenditures increase steadily and necessarily with the growth and needs of the country, so that the deficiency is greater or less in any year depending upon the volume of receipts.

The Postmaster-General states that this deficiency is unnecessary, and might be obviated at once if the law regulating rates. upon mail matter of the second class was modified. The rate received for the transmission of this second class matter is 1 cent per lb., while the cost of such transmission to the Government is eight times that amount. In the general terms of the law this rate covers newspapers and periodicals. The extensions of the meaning. of these terms from time to time have admitted to the privileges intended for legitimate newspapers and periodicals a surprising range of publications, and created abuses the cost of which amount in the aggregate to the total deficiency of the Post Office Department. Pretended newspapers are started by business houses for the mere purpose of advertising goods, complying with the law in form only, and discontinuing the publications as soon as the period of advertising is over. "Sample copies" of pretended newspapers are issued in great numbers for a like purpose only. The result is a great loss of revenue to the Government, besides its humiliating use as an agency to aid in carrying out the scheme of a business house to advertise its goods by means of a trick upon both its rival houses and the regular and legitimate newspapers. Paper-covered literature, consisting mainly of trashy novels to the extent of many thousands of tons, is sent through the mails at 1 cent per lb., while the publishers of standard works are required to pay eight times that amount in sending their publications. Another abuse consists in the free carriage through the mails of hundreds of tons of seed and grain, uselessly distributed through the Department of Agriculture. The Postmaster-General predicts that if the law be so amended as to eradicate these abuses, not only will the Post Office

Department show no deficiency, but he believes that in the near future all legitimate newspapers and periodical magazines might be properly transmitted through the mails to their subscribers free of cost. I invite your prompt consideration of this subject, and fully indorse the views of the Postmaster-General.

The total number of post-offices in the United States on the 30th day of June, 1894, was 69,805, an increase of 1,403 over the preceding year. Of these 3,428 were Presidential, an increase in that class of 68 over the preceding year.

Six hundred and ten cities and towns are provided with free delivery. Ninety-three other cities and towns entitled to this service under the law have not been accorded it on account of insufficient funds. The expense of free delivery for the current fiscal year will be more than 12,300,000 dollars, and under existing legislation this item of expenditure is subject to constant increase. The estimated cost of rural free delivery generally is so very large that it ought not to be considered in the present condition of affairs.

During the year 830 additional domestic money-order offices were established. The total number of these offices at the close of the year was 19,264. There were 14,304,041 money orders issued during the year, being an increase over the preceding year of 994,306. The value of these orders amounted to 138,793,579 dol. 49 c., an increase of 11,217,145 dol. 84 c. There were also issued during the year postal notes amounting to 12,649,094 dol. 55 c.

During the year 218 international money-order offices were added to those already established, making a total of 2,625 such offices in operation the 30th June, 1894. The number of international money orders issued during the year was 917,823, a decrease in number of 138,176; and their value was 13,792,455 dol. 31 c., a decrease in amount of 2,549,382 dol. 55 c. The number of orders paid was 361,180, an increase over the preceding year of 60,263, and their value was 6,568,493 dol. 78 c., an increase of 1,285,118 dol. 8 c.

From the foregoing statements it appears that the total issue of money orders and postal notes for the year amounted to 165,235,129 dol. 35 c.

The number of letters and packages mailed during the year for special delivery was 3,436,970. The special delivery stamps used upon these letters and packages amounted to 343,697 dollars. The messengers' fees paid for their delivery amounted to 261,209 dol. 70 c., leaving a balance in favour of the Government of 82,487 dol. 30 c.

The Report shows most gratifying results in the way of economies worked out without affecting the efficiency of the postal service. These consist in the abrogation of steam-ship subsidy contracts, reletting of mail transportation contracts, and in the

cost and amount of supplies used in the service, amounting in all to 16,619,047 dol. 42 c.

This Report also contains a valuable contribution to the history of the Universal Postal Union, an arrangement which amounts practically to the establishment of one postal system for the entire civilized world. Special attention is directed to this subject at this time, in view of the fact that the next Congress of the Union will meet in Washington in 1897, and it is hoped that timely action. will be taken in the direction of perfecting preparations for that event.

The Postmaster-General renews the suggestion made in a previous Report that the Department organization be increased to the extent of creating a direct district supervision of all postal affairs, and in this suggestion I fully concur.

There are now connected with the Post Office Establishment 32,661 employees who are in the classified service. This includes many who have been classified upon the suggestion of the Postmaster-General. He states that another year's experience at the head of the Department serves only to strengthen the conviction as to the excellent working of the civil service law in this branch of the public service.

Attention is called to the Report of the Secretary of the Navy, which shows very gratifying progress in the construction of ships for our new navy. All the vessels now building, including the three torpedo-boats authorized at the last Session of Congress, and excepting the first class battle-ship Iowa, will probably be completed during the coming fiscal year.

The estimates for the increase of the navy for the year ending the 30th June, 1896, are large, but they include practically the entire sum necessary to complete and equip all the new ships not now in commission; so that, unless new ships are authorized, the appropriations for the naval service for the fiscal year ending the 30th June, 1897, should fall below the estimates for the coming year by at least 12,000,000 dollars.

The Secretary presents with much earnestness a plea for the authorization of three additional battle-ships and ten or twelve torpedo-boats. While the unarmoured vessels heretofore authorized, including those now nearing completion, will constitute a fleet which it is believed is sufficient for ordinary cruising purposes in time of peace, we have now completed and in process of construction but four first class battle-ships and but few torpedo-boats. If we are to have a navy for warlike operations, offensive and defensive, we certainly ought to increase both the number of battleships and torpedo-boats.

The manufacture of armour requires expensive plant and the

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