Chapter VII: Front Matter (7)

The installation of exhibits, too, encountered many obstacles and involved unexpected cost. The exposition was far from ready at the date fixed for its opening. The French transportation lines were congested with offered freight. Belated goods had to be hastily installed in unfinished quarters with whatever labor could be obtained in the prevailing confusion. Nor was the task of the Commission lightened by the fact that, owing to the scheme of classification adopted, it was impossible to have the entire exhibit of any one country in the same building or more than one group of exhibits in the same part of any building. Our installations were scattered on both sides of the Seine and in widely remote suburbs of Paris, so that additional assistants were needed for the work of supervision and arrangement.

Despite all these drawbacks the contribution of the United States was not only the largest foreign display, but was among the earliest in place and the most orderly in arrangement. Our exhibits were shown in one hundred and one out of one hundred and twenty-one classes, and more completely covered the entire classification than those of any other nation. In total number they ranked next after those of France, and the attractive form in which they were presented secured general attention.

A criterion of the extent and success of our participation and of the thoroughness with which our exhibits were organized is seen in the awards granted to American exhibitors by the international jury, namely, grand prizes, 240; gold medals, 597; silver medals, 776; bronze medals, 541, and honorable mentions, 322--2,476 in all, being the greatest total number given to the exhibit of any exhibiting nation, as well as the largest number in each grade. This significant recognition of merit in competition with the chosen exhibits of all other nations and at the hands of juries almost wholly made up of representatives of France and other competing countries is not only most gratifying, but is especially valuable, since it sets us to the front in international questions of supply and demand, while the large proportion of awards in the classes of art and artistic manufactures afforded unexpected proof of the stimulation of national culture by the prosperity that flows from natural productiveness joined to industrial excellence.

Apart from the exposition several occasions for showing international good will occurred. The inauguration in Paris of the Lafayette Monument, presented by the school children of the United States, and the designing of a commemorative coin by our Mint and the presentation of the first piece struck to the President of the Republic, were marked by appropriate ceremonies, and the Fourth of July was especially observed in the French capital.

Good will prevails in our relations with the German Empire. An amicable adjustment of the long-pending question of the admission of our life-insurance companies to do business in Prussia has been reached. One of the principal companies has already been readmitted and the way is opened for the others to share the privilege.

The settlement of the Samoan problem, to which I adverted in my last message, has accomplished good results. Peace and contentment prevail in the islands, especially in Tutuila, where a convenient administration that has won the confidence and esteem of the kindly disposed natives has been organized under the direction of the commander of the United States naval station at Pago-Pago.

An Imperial meat-inspection law has been enacted for Germany. While it may simplify the inspections, it prohibits certain products heretofore admitted. There is still great uncertainty as to whether our well-nigh extinguished German trade in meat products can revive under its new burdens. Much will depend upon regulations not yet promulgated, which we confidently hope will be free from the discriminations which attended the enforcement of the old statutes.

The remaining link in the new lines of direct telegraphic communication between the United States and the German Empire has recently been completed, affording a gratifying occasion for exchange of friendly congratulations with the German Emperor.

Our friendly relations with Great Britain continue. The war in Southern Africa introduced important questions. A condition unusual in international wars was presented in that while one belligerent had control of the seas, the other had no ports, shipping, or direct trade, but was only accessible through the territory of a neutral. Vexatious questions arose through Great Britain's action in respect to neutral cargoes, not contraband in their own nature, shipped to Portuguese South Africa, on the score of probable or suspected ultimate destination to the Boer States.

Such consignments in British ships, by which alone direct trade is kept up between our ports and Southern Africa, were seized in application of a municipal law prohibiting British vessels from trading with the enemy without regard to any contraband character of the goods, while cargoes shipped to Delagoa Bay in neutral bottoms were arrested on the ground of alleged destination to enemy's country. Appropriate representations on our part resulted in the British Government agreeing to purchase outright all such goods shown to be the actual property of American citizens, thus closing the incident to the satisfaction of the immediately interested parties, although, unfortunately, without a broad settlement of the question of a neutral's right to send goods not contraband _per se_ to a neutral port adjacent to a belligerent area.

The work of marking certain provisional boundary points, for convenience of administration, around the head of Lynn Canal, in accordance with the temporary arrangement of October, 1899, was completed by a joint survey in July last. The _modus vivendi_ has so far worked without friction, and the Dominion Government has provided rules and regulations for securing to our citizens the benefit of the reciprocal stipulation that the citizens or subjects of either power found by that arrangement within the temporary jurisdiction of the other shall suffer no diminution of the rights and privileges they have hitherto enjoyed. But however necessary such an expedient may have been to tide over the grave emergencies of the situation, it is at best but an unsatisfactory makeshift, which should not be suffered to delay the speedy and complete establishment of the frontier line to which we are entitled under the Russo-American treaty for the cession of Alaska.

In this relation I may refer again to the need of definitely marking the Alaskan boundary where it follows the one hundred and forty-first meridian. A convention to that end has been before the Senate for some two years, but as no action has been taken I contemplate negotiating a new convention for a joint determination of the meridian by telegraphic observations. These, it is believed, will give more accurate and unquestionable results than the sidereal methods heretofore independently followed, which, as is known, proved discrepant at several points on the line, although not varying at any place more than 700 feet.

The pending claim of R.H. May against the Guatemalan Government has been settled by arbitration, Mr. George F.B. Jenner, British minister at Guatemala, who was chosen as sole arbitrator, having awarded $143,750.73 in gold to the claimant.

Various American claims against Haiti have been or are being advanced to the resort of arbitration.

As the result of negotiations with the Government of Honduras in regard to the indemnity demanded for the murder of Frank H. Pears in Honduras, that Government has paid $10,000 in settlement of the claim of the heirs.

The assassination of King Humbert called forth sincere expressions of sorrow from this Government and people, and occasion was fitly taken to testify to the Italian nation the high regard here felt for the memory of the lamented ruler.

In my last message I referred at considerable length to the lynching of five Italians at Tallulah. Notwithstanding the efforts of the Federal Government, the production of evidence tending to inculpate the authors of this grievous offense against our civilization, and the repeated inquests set on foot by the authorities of the State of Louisiana, no punishments have followed. Successive grand juries have failed to indict. The representations of the Italian Government in the face of this miscarriage have been most temperate and just.

Setting the principle at issue high above all consideration of merely pecuniary indemnification, such as this Government made in the three previous cases, Italy has solemnly invoked the pledges of existing treaty and asked that the justice to which she is entitled shall be meted in regard to her unfortunate countrymen in our territory with the same full measure she herself would give to any American were his reciprocal treaty rights contemned.

I renew the urgent recommendations I made last year that the Congress appropriately confer upon the Federal courts jurisdiction in this class of international cases where the ultimate responsibility of the Federal Government may be involved, and I invite action upon the bills to accomplish this which were introduced in the Senate and House. It is incumbent upon us to remedy the statutory omission which has led, and may again lead, to such untoward results. I have pointed out the necessity and the precedent for legislation of this character. Its enactment is a simple measure of previsory justice toward the nations with which we as a sovereign equal make treaties requiring reciprocal observance.

While the Italian Government naturally regards such action as the primary and, indeed, the most essential element in the disposal of the Tallulah incident, I advise that, in accordance with precedent, and in view of the improbability of that particular case being reached by the bill now pending, Congress make gracious provision for indemnity to the Italian sufferers in the same form and proportion as heretofore.

In my inaugural address I referred to the general subject of lynching in these words:

Lynching must not be tolerated in a great and civilized country like the
United States; courts, not mobs, must execute the penalties of the law.
The preservation of public order, the right of discussion, the integrity
of courts, and the orderly administration of justice must continue
forever the rock of safety upon which our Government securely rests.

This I most urgently reiterate and again invite the attention of my countrymen to this reproach upon our civilization.

The closing year has witnessed a decided strengthening of Japan's relations to other States. The development of her independent judicial and administrative functions under the treaties which took effect July 17, 1899, has proceeded without international friction, showing the competence of the Japanese to hold a foremost place among modern peoples.

In the treatment of the difficult Chinese problems Japan has acted in harmonious concert with the other powers, and her generous cooperation materially aided in the joint relief of the beleaguered legations in Peking and in bringing about an understanding preliminary to a settlement of the issues between the powers and China. Japan's declarations in favor of the integrity of the Chinese Empire and the conservation of open world trade therewith have been frank and positive. As a factor for promoting the general interests of peace, order, and fair commerce in the Far East the influence of Japan can hardly be overestimated.

The valuable aid and kindly courtesies extended by the Japanese Government and naval officers to the battle ship _Oregon_ are gratefully appreciated.

Complaint was made last summer of the discriminatory enforcement of a bubonic quarantine against Japanese on the Pacific coast and of interference with their travel in California and Colorado under the health laws of those States. The latter restrictions have been adjudged by a Federal court to be unconstitutional. No recurrence of either cause of complaint is apprehended.

No noteworthy incident has occurred in our relations with our important southern neighbor. Commercial intercourse with Mexico continues to thrive, and the two Governments neglect no opportunity to foster their mutual interests in all practicable ways.

Pursuant to the declaration of the Supreme Court that the awards of the late Joint Commission in the La Abra and Weil claims were obtained through fraud, the sum awarded in the first case, $403,030.08, has been returned to Mexico, and the amount of the Weil award will be returned in like manner.

A Convention indefinitely extending the time for the labors of the United States and Mexican International (Water) Boundary Commission has been signed.

It is with satisfaction that I am able to announce the formal notification at The Hague, on September 4, of the deposit of ratifications of the Convention for the Pacific Settlement of International Disputes by sixteen powers, namely, the United States, Austria, Belgium, Denmark, England, France, Germany, Italy, Persia, Portugal, Roumania, Russia, Siam, Spain, Sweden and Norway, and the Netherlands. Japan also has since ratified the Convention.

The Administrative Council of the Permanent Court of Arbitration has been organized and has adopted rules of order and a constitution for the International Arbitration Bureau. In accordance with Article XXIII of the Convention providing for the appointment by each signatory power of persons of known competency in questions of international law as arbitrators, I have appointed as members of this Court, Hon. Benjamin Harrison, of Indiana, ex-President of the United States; Hon. Melville W. Fuller, of Illinois, Chief Justice of the United States; Hon. John W. Griggs, of New Jersey, Attorney-General of the United States; and Hon. George Gray, of Delaware, a judge of the circuit court of the United States.

As an incident of the brief revolution in the Mosquito district of Nicaragua early in 1899 the insurgents forcibly collected from American merchants duties upon imports. On the restoration of order the Nicaraguan authorities demanded a second payment of such duties on the ground that they were due to the titular Government and that their diversion had aided the revolt.

This position was not accepted by us. After prolonged discussion a compromise was effected under which the amount of the second payments was deposited with the British consul at San Juan del Norte in trust until the two Governments should determine whether the first payments had been made under compulsion to a _de facto_ authority. Agreement as to this was not reached, and the point was waived by the act of the Nicaraguan Government in requesting the British consul to return the deposits to the merchants.

Menacing differences between several of the Central American States have been accommodated, our ministers rendering good offices toward an understanding.

The all-important matter of an interoceanic canal has assumed a new phase. Adhering to its refusal to reopen the question of the forfeiture of the contract of the Maritime Canal Company, which was terminated for alleged nonexecution in October, 1899, the Government of Nicaragua has since supplemented that action by declaring the so-styled Eyre-Cragin option void for nonpayment of the stipulated advance. Protests in relation to these acts have been filed in the State Department and are under consideration. Deeming itself relieved from existing engagements, the Nicaraguan Government shows a disposition to deal freely with the canal question either in the way of negotiations with the United States or by taking measures to promote the waterway.

Overtures for a convention to effect the building of a canal under the auspices of the United States are under consideration. In the meantime, the views of the Congress upon the general subject, in the light of the report of the Commission appointed to examine the comparative merits of the various trans-Isthmian ship-canal projects, may be awaited.

I commend to the early attention of the Senate the Convention with Great Britain to facilitate the construction of such a canal and to remove any objection which might arise out of the Convention commonly called the Clayton-Bulwer Treaty.

The long-standing contention with Portugal, growing out of the seizure of the Delagoa Bay Railway, has been at last determined by a favorable award of the tribunal of arbitration at Berne, to which it was submitted. The amount of the award, which was deposited in London awaiting arrangements by the Governments of the United States and Great Britain for its disposal, has recently been paid over to the two Governments.

A lately signed Convention of Extradition with Peru as amended by the Senate has been ratified by the Peruvian Congress.

Another illustration of the policy of this Government to refer international disputes to impartial arbitration is seen in the agreement reached with Russia to submit the claims on behalf of American sealing vessels seized in Bering Sea to determination by Mr. T.M.C. Asser, a distinguished statesman and jurist of the Netherlands.

Thanks are due to the Imperial Russian Government for the kindly aid rendered by its authorities in eastern Siberia to American missionaries fleeing from Manchuria.

Satisfactory progress has been made toward the conclusion of a general treaty of friendship and intercourse with Spain, in replacement of the old treaty, which passed into abeyance by reason of the late war. A new convention of extradition is approaching completion, and I should be much pleased were a commercial arrangement to follow. I feel that we should not suffer to pass any opportunity to reaffirm the cordial ties that existed between us and Spain from the time of our earliest independence, and to enhance the mutual benefits of that commercial intercourse which is natural between the two countries.

By the terms of the Treaty of Peace the line bounding the ceded Philippine group in the southwest failed to include several small islands lying westward of the Sulus, which have always been recognized as under Spanish control. The occupation of Sibutú and Cagayan Sulu by our naval forces elicited a claim on the part of Spain, the essential equity of which could not be gainsaid. In order to cure the defect of the treaty by removing all possible ground of future misunderstanding respecting the interpretation of its third article, I directed the negotiation of a supplementary treaty, which will be forthwith laid before the Senate, whereby Spain quits all title and claim of title to the islands named as well as to any and all islands belonging to the Philippine Archipelago lying outside the lines described in said third article, and agrees that all such islands shall be comprehended in the cession of the archipelago as fully as if they had been expressly included within those lines. In consideration of this cession the United States is to pay to Spain the sum of $100,000.

A bill is now pending to effect the recommendation made in my last annual message that appropriate legislation be had to carry into execution Article VII of the Treaty of Peace with Spain, by which the United States assumed the payment of certain claims for indemnity of its citizens against Spain. I ask that action be taken to fulfill this obligation.

The King of Sweden and Norway has accepted the joint invitation of the United States, Germany, and Great Britain to arbitrate claims growing out of losses sustained in the Samoan Islands in the course of military operations made necessary by the disturbances in 1899.

Our claims upon the Government of the Sultan for reparation for injuries suffered by American citizens in Armenia and elsewhere give promise of early and satisfactory settlement. His Majesty's good disposition in this regard has been evinced by the issuance of an irade for rebuilding the American college at Harpoot.

The failure of action by the Senate at its last session upon the commercial conventions then submitted for its consideration and approval, although caused by the great pressure of other legislative business, has caused much disappointment to the agricultural and industrial interests of the country, which hoped to profit by their provisions. The conventional periods for their ratification having expired, it became necessary to sign additional articles extending the time for that purpose. This was requested on our part, and the other Governments interested have concurred with the exception of one convention, in respect to which no formal reply has been received.

Since my last communication to the Congress on this subject special commercial agreements under the third section of the tariff act have been proclaimed with Portugal, with Italy, and with Germany. Commercial conventions under the general limitations of the fourth section of the same act have been concluded with Nicaragua, with Ecuador, with the Dominican Republic, with Great Britain on behalf of the island of Trinidad, and with Denmark on behalf of the island of St. Croix. These will be early communicated to the Senate. Negotiations with other Governments are in progress for the improvement and security of our commercial relations.

The policy of reciprocity so manifestly rests upon the principles of international equity and has been so repeatedly approved by the people of the United States that there ought to be no hesitation in either branch of the Congress in giving to it full effect.

This Government desires to preserve the most just and amicable commercial relations with all foreign countries, unmoved by the industrial rivalries necessarily developed in the expansion of international trade. It is believed that the foreign Governments generally entertain the same purpose, although in some instances there are clamorous demands upon them for legislation specifically hostile to American interests. Should these demands prevail I shall communicate with the Congress with the view of advising such legislation as may be necessary to meet the emergency.

The exposition of the resources and products of the Western Hemisphere to be held at Buffalo next year promises important results not only for the United States but for the other participating countries. It is gratifying that the Latin-American States have evinced the liveliest interest, and the fact that an International American Congress will be held in the City of Mexico while the exposition is in progress encourages the hope of a larger display at Buffalo than might otherwise be practicable. The work of preparing an exhibit of our national resources is making satisfactory progress under the direction of different officials of the Federal Government, and the various States of the Union have shown a disposition toward the most liberal participation in the enterprise.

The Bureau of the American Republics continues to discharge, with the happiest results, the important work of promoting cordial relations between the United States and the Latin-American countries, all of which are now active members of the International Union. The Bureau has been instrumental in bringing about the agreement for another International American Congress, which is to meet in the City of Mexico in October, 1901. The Bureau's future for another term of ten years is assured by the international compact, but the congress will doubtless have much to do with shaping new lines of work and a general policy. Its usefulness to the interests of Latin-American trade is widely appreciated and shows a gratifying development.

The practical utility of the consular service in obtaining a wide range of information as to the industries and commerce of other countries and the opportunities thereby afforded for introducing the sale of our goods have kept steadily in advance of the notable expansion of our foreign trade, and abundant evidence has been furnished, both at home and abroad, of the fact that the Consular Reports, including many from our diplomatic representatives, have to a considerable extent pointed out ways and means of disposing of a great variety of manufactured goods which otherwise might not have found sale abroad.

Testimony of foreign observers to the commercial efficiency of the consular corps seems to be conclusive, and our own manufacturers and exporters highly appreciate the value of the services rendered not only in the printed reports but also in the individual efforts of consular officers to promote American trade. An increasing part of the work of the Bureau of Foreign Commerce, whose primary duty it is to compile and print the reports, is to answer inquiries from trade organizations, business houses, etc., as to conditions in various parts of the world, and, notwithstanding the smallness of the force employed, the work has been so systematized that responses are made with such promptitude and accuracy as to elicit flattering encomiums. The experiment of printing the Consular Reports daily for immediate use by trade bodies, exporters, and the press, which was begun in January, 1898, continues to give general satisfaction.

It is gratifying to be able to state that the surplus revenues for the fiscal year ended June 30, 1900, were $79,527,060.18. For the six preceding years we had only deficits, the aggregate of which from 1894 to 1899, inclusive, amounted to $283,022,991.14. The receipts for the year from all sources, exclusive of postal revenues, aggregated $567,240,851.89, and expenditures for all purposes, except for the administration of the postal department, aggregated $487,713,791.71. The receipts from customs were $233,164,871.16, an increase over the preceding year of $27,036,389.41. The receipts from internal revenue were $295,327,926.76, an increase of $21,890,765.25 over 1899. The receipts from miscellaneous sources were $38,748,053.97, as against $36,394,976.92 for the previous year.

It is gratifying also to note that during the year a considerable reduction is shown in the expenditures of the Government. The War Department expenditures for the fiscal year 1900 were $134,774,767.78, a reduction of $95,066,486.69 over those of 1899. In the Navy Department the expenditures were $55,953,077.72 for the year 1900, as against $63,942,104.25 for the preceding year, a decrease of $7,989,026.53. In the expenditures on account of Indians there was a decrease in 1900 over 1899 of $2,630,604.38; and in the civil and miscellaneous expenses for 1900 there was a reduction of $13,418,065.74.

Because of the excess of revenues over expenditures the Secretary of the Treasury was enabled to apply bonds and other securities to the sinking fund to the amount of $56,544,556.06. The details of the sinking fund are set forth in the report of the Secretary of the Treasury, to which I invite attention. The Secretary of the Treasury estimates that the receipts for the current fiscal year will aggregate $580,000,000 and the expenditures $500,000,000, leaving an excess of revenues over expenditures of $80,000,000. The present condition of the Treasury is one of undoubted strength. The available cash balance November 30 was $139,303,794.50. Under the form of statement prior to the financial law of March 14 last there would have been included in the statement of available cash gold coin and bullion held for the redemption of United States notes.

If this form were pursued, the cash balance including the present gold reserve of $150,000,000, would be $289,303,794.50. Such balance November 30, 1899, was $296,495,301.55. In the general fund, which is wholly separate from the reserve and trust funds, there was on November 30, $70,090,073.15 in gold coin and bullion, to which should be added $22,957,300 in gold certificates subject to issue, against which there is held in the Division of Redemption gold coin and bullion, making a total holding of free gold amounting to $93,047,373.15.

It will be the duty as I am sure it will be the disposition of the Congress to provide whatever further legislation is needed to insure the continued parity under all conditions between our two forms of metallic money, silver and gold.

Our surplus revenues have permitted the Secretary of the Treasury since the close of the fiscal year to call in the funded loan of 1891 continued at 2 per cent, in the sum of $25,364,500. To and including November 30, $23,458,100 of these bonds have been paid. This sum, together with the amount which may accrue from further redemptions under the call, will be applied to the sinking fund.

The law of March 14, 1900, provided for refunding into 2 per cent thirty-year bonds, payable, principal and interest, in gold coin of the present standard value, that portion of the public debt represented by the 3 per cent bonds of 1908, the 4 percents of 1907, and the 5 percents of 1904, of which there was outstanding at the date of said law $839,149,930. The holders of the old bonds presented them for exchange between March 14 and November 30 to the amount of $364,943,750. The net saving to the Government on these transactions aggregates $9,106,166.

Another effect of the operation, as stated by the Secretary, is to reduce the charge upon the Treasury for the payment of interest from the dates of refunding to February 1, 1904, by the sum of more than seven million dollars annually. From February 1, 1904, to July 1, 1907, the annual interest charge will be reduced by the sum of more than five millions, and for the thirteen months ending August 1, 1908, by about one million. The full details of the refunding are given in the annual report of the Secretary of the Treasury.

The beneficial effect of the financial act of 1900, so far as it relates to a modification of the national banking act, is already apparent. The provision for the incorporation of national banks with a capital of not less than $25,000 in places not exceeding three thousand inhabitants has resulted in the extension of banking facilities to many small communities hitherto unable to provide themselves with banking institutions under the national system. There were organized from the enactment of the law up to and including November 30, 369 national banks, of which 266 were with capital less than $50,000, and 103 with capital of $50,000 or more.

It is worthy of mention that the greater number of banks being organized under the new law are in sections where the need of banking facilities has been most pronounced. Iowa stands first, with 30 banks of the smaller class, while Texas, Oklahoma, Indian Territory, and the middle and western sections of the country have also availed themselves largely of the privileges under the new law.

A large increase in national-bank-note circulation has resulted from the provision of the act which permits national banks to issue circulating notes to the par value of the United States bonds deposited as security instead of only 90 per cent thereof, as heretofore. The increase in circulating notes from March 14 to November 30 is $77,889,570.

The party in power is committed to such legislation as will better make the currency responsive to the varying needs of business at all seasons and in all sections.

Our foreign trade shows a remarkable record of commercial and industrial progress. The total of imports and exports for the first time in the history of the country exceeded two billions of dollars. The exports are greater than they have ever been before, the total for the fiscal year 1900 being $1,394,483,082, an increase over 1899 of $167,459,780, an increase over 1898 of $163,000,752, over 1897 of $343,489,526, and greater than 1896 by $511,876,144.

The growth of manufactures in the United States is evidenced by the fact that exports of manufactured products largely exceed those of any previous year, their value for 1900 being $433,851,756, against $339,592,146 in 1899, an increase of 28 per cent.

Agricultural products were also exported during 1900 in greater volume than in 1899, the total for the year being $835,858,123, against $784,776,142 in 1899.

The imports for the year amounted to $849,941,184, an increase over 1899 of $152,792,695. This increase is largely in materials for manufacture, and is in response to the rapid development of manufacturing in the United States. While there was imported for use in manufactures in 1900 material to the value of $79,768,972 in excess of 1899, it is reassuring to observe that there is a tendency toward decrease in the importation of articles manufactured ready for consumption, which in 1900 formed 15.17 per cent of the total imports, against 15.54 per cent in 1899 and 21.09 per cent in 1896.

I recommend that the Congress at its present session reduce the internal-revenue taxes imposed to meet the expenses of the war with Spain in the sum of thirty millions of dollars. This reduction should be secured by the remission of those taxes which experience has shown to be the most burdensome to the industries of the people.

I specially urge that there be included in whatever reduction is made the legacy tax on bequests for public uses of a literary, educational, or charitable character.

American vessels during the past three years have carried about 9 per cent of our exports and imports. Foreign ships should carry the least, not the greatest, part of American trade. The remarkable growth of our steel industries, the progress of shipbuilding for the domestic trade, and our steadily maintained expenditures for the Navy have created an opportunity to place the United States in the first rank of commercial maritime powers.

Besides realizing a proper national aspiration this will mean the establishment and healthy growth along all our coasts of a distinctive national industry, expanding the field for the profitable employment of labor and capital. It will increase the transportation facilities and reduce freight charges on the vast volume of products brought from the interior to the seaboard for export, and will strengthen an arm of the national defense upon which the founders of the Government and their successors have relied. In again urging immediate action by the Congress on measures to promote American shipping and foreign trade, I direct attention to the recommendations on the subject in previous messages, and particularly to the opinion expressed in the message of 1899:

I am satisfied the judgment of the country favors the policy of aid to
our merchant marine, which will broaden our commerce and markets and
upbuild our sea-carrying capacity for the products of agriculture and
manufacture, which, with the increase of our Navy, mean more work and
wages to our countrymen, as well as a safeguard to American interests
in every part of the world.

The attention of the Congress is invited to the recommendation of the Secretary of the Treasury in his annual report for legislation in behalf of the Revenue-Cutter Service, and favorable action is urged.

In my last annual message to the Congress I called attention to the necessity for early action to remedy such evils as might be found to exist in connection with combinations of capital organized into trusts, and again invite attention to my discussion of the subject at that time, which concluded with these words:

It is apparent that uniformity of legislation upon this subject in
the several States is much to be desired. It is to be hoped that such
uniformity, founded in a wise and just discrimination between what is
injurious and what is useful and necessary in business operations, may
be obtained, and that means may be found for the Congress, within the
limitations of its constitutional power, so to supplement an effective
code of State legislation as to make a complete system of laws
throughout the United States adequate to compel a general observance
of the salutary rules to which I have referred.

The whole question is so important and far-reaching that I am sure no
part of it will be lightly considered, but every phase of it will have
the studied deliberation of the Congress, resulting in wise and
judicious action.

Restraint upon such combinations as are injurious, and which are within Federal jurisdiction, should be promptly applied by the Congress.

In my last annual message I dwelt at some length upon the condition of affairs in the Philippines. While seeking to impress upon you that the grave responsibility of the future government of those islands rests with the Congress of the United States, I abstained from recommending at that time a specific and final form of government for the territory actually held by the United States forces and in which as long as insurrection continues the military arm must necessarily be supreme. I stated my purpose, until the Congress shall have made the formal expression of its will, to use the authority vested in me by the Constitution and the statutes to uphold the sovereignty of the United States in those distant islands as in all other places where our flag rightfully floats, placing, to that end, at the disposal of the army and navy all the means which the liberality of the Congress and the people have provided. No contrary expression of the will of the Congress having been made, I have steadfastly pursued the purpose so declared, employing the civil arm as well toward the accomplishment of pacification and the institution of local governments within the lines of authority and law.

Progress in the hoped-for direction has been favorable. Our forces have successfully controlled the greater part of the islands, overcoming the organized forces of the insurgents and carrying order and administrative regularity to all quarters. What opposition remains is for the most part scattered, obeying no concerted plan of strategic action, operating only by the methods common to the traditions of guerrilla warfare, which, while ineffective to alter the general control now established, are still sufficient to beget insecurity among the populations that have felt the good results of our control and thus delay the conferment upon them of the fuller measures of local self-government, of education, and of industrial and agricultural development which we stand ready to give to them.

By the spring of this year the effective opposition of the dissatisfied Tagals to the authority of the United States was virtually ended, thus opening the door for the extension of a stable administration over much of the territory of the Archipelago. Desiring to bring this about, I appointed in March last a civil Commission composed of the Hon. William H. Taft, of Ohio; Prof. Dean C. Worcester, of Michigan; the Hon. Luke I. Wright, of Tennessee; the Hon. Henry C. Ide, of Vermont, and Prof. Bernard Moses, of California. The aims of their mission and the scope of their authority are clearly set forth in my instructions of April 7, 1900, addressed to the Secretary of War to be transmitted to them:

In the message transmitted to the Congress on the 5th of December, 1899,
I said, speaking of the Philippine Islands: "As long as the insurrection
continues the military arm must necessarily be supreme. But there is no
reason why steps should not be taken from time to time to inaugurate
governments essentially popular in their form as fast as territory is
held and controlled by our troops. To this end I am considering the
advisability of the return of the Commission, or such of the members
thereof as can be secured, to aid the existing authorities and
facilitate this work throughout the islands."

To give effect to the intention thus expressed, I have appointed Hon.
William H. Taft, of Ohio; Prof. Dean C. Worcester, of Michigan; Hon.
Luke I. Wright, of Tennessee; Hon. Henry C. Ide, of Vermont, and Prof.
Bernard Moses, of California, Commissioners to the Philippine Islands
to continue and perfect the work of organizing and establishing civil
government already commenced by the military authorities, subject in
all respects to any laws which Congress may hereafter enact.

The Commissioners named will meet and act as a board, and the Hon.
William H. Taft is designated as president of the board. It is probable
that the transfer of authority from military commanders to civil
officers will be gradual and will occupy a considerable period. Its
successful accomplishment and the maintenance of peace and order in the
meantime will require the most perfect co-operation between the civil
and military authorities in the islands, and both should be directed
during the transition period by the same Executive Department. The
Commission will therefore report to the Secretary of War, and all their
action will be subject to your approval and control.

You will instruct the Commission to proceed to the city of Manila,
where they will make their principal office, and to communicate with
the Military Governor of the Philippine Islands, whom you will at the
same time direct to render to them every assistance within his power
in the performance of their duties. Without hampering them by too
specific instructions, they should in general be enjoined, after making
themselves familiar with the conditions and needs of the country, to
devote their attention in the first instance to the establishment of
municipal governments, in which the natives of the islands, both in the
cities and in the rural communities, shall be afforded the opportunity
to manage their own local affairs to the fullest extent of which they
are capable and subject to the least degree of supervision and control
which a careful study of their capacities and observation of the
workings of native control show to be consistent with the maintenance
of law, order, and loyalty.

The next subject in order of importance should be the organization of
government in the larger administrative divisions corresponding to
counties, departments, or provinces, in which the common interests of
many or several municipalities falling within the same tribal lines,
or the same natural geographical limits, may best be subserved by
a common administration. Whenever the Commission is of the opinion
that the condition of affairs in the islands is such that the central
administration may safely be transferred from military to civil control
they will report that conclusion to you, with their recommendations as
to the form of central government to be established for the purpose of
taking over the control.

Beginning with the 1st day of September, 1900, the authority to
exercise, subject to my approval, through the Secretary of War, that
part of the power of government in the Philippine Islands which is of a
legislative nature is to be transferred from the Military Governor of
the islands to this Commission, to be thereafter exercised by them in
the place and stead of the Military Governor, under such rules and
regulations as you shall prescribe, until the establishment of the civil
central government for the islands contemplated in the last foregoing
paragraph, or until Congress shall otherwise provide. Exercise of this
legislative authority will include the making of rules and orders,
having the effect of law, for the raising of revenue by taxes, customs
duties, and imposts; the appropriation and expenditure of public funds
of the islands; the establishment of an educational system throughout
the islands; the establishment of a system to secure an efficient civil
service; the organization and establishment of courts; the organization
and establishment of municipal and departmental governments, and all
other matters of a civil nature for which the Military Governor is now
competent to provide by rules or orders of a legislative character.

The Commission will also have power during the same period to appoint to
office such officers under the judicial, educational, and civil-service
systems and in the municipal and departmental governments as shall be
provided for. Until the complete transfer of control the Military
Governor will remain the chief executive head of the government of the
islands, and will exercise the executive authority now possessed by him
and not herein expressly assigned to the Commission, subject, however,
to the rules and orders enacted by the Commission in the exercise of the
legislative powers conferred upon them. In the meantime the municipal
and departmental governments will continue to report to the Military
Governor and be subject to his administrative supervision and control,
under your direction, but that supervision and control will be confined
within the narrowest limits consistent with the requirement that the
powers of government in the municipalities and departments shall be
honestly and effectively exercised and that law and order and individual
freedom shall be maintained.

All legislative rules and orders, establishments of government, and
appointments to office by the Commission will take effect immediately,
or at such times as they shall designate, subject to your approval
and action upon the coming in of the Commission's reports, which are
to be made from time to time as their action is taken. Wherever civil
governments are constituted under the direction of the Commission
such military posts, garrisons, and forces will be continued for the
suppression of insurrection and brigandage and the maintenance of law
and order as the Military Commander shall deem requisite, and the
military forces shall be at all times subject, under his orders, to the
call of the civil authorities for the maintenance of law and order and
the enforcement of their authority.

In the establishment of municipal governments the Commission will take
as the basis of their work the governments established by the Military
Governor under his order of August 8, 1899, and under the report of the
board constituted by the Military Governor by his order of January 29,
1900, to formulate and report a plan of municipal government, of which
His Honor Cayetano Arellano, President of the Audiencia, was chairman,
and they will give to the conclusions of that board the weight and
consideration which the high character and distinguished abilities of
its members justify.

In the constitution of departmental or provincial governments they will
give especial attention to the existing government of the island of
Negros, constituted with the approval of the people of that island,
under the order of the Military Governor of July 22, 1899, and after
verifying, so far as may be practicable, the reports of the successful
working of that government they will be guided by the experience thus
acquired so far as it may be applicable to the condition existing in
other portions of the Philippines. They will avail themselves, to the
fullest degree practicable, of the conclusions reached by the previous
Commission to the Philippines.

In the distribution of powers among the governments organized by the
Commission, the presumption is always to be in favor of the smaller
subdivision, so that all the powers which can properly be exercised by
the municipal government shall be vested in that government, and all
the powers of a more general character which can be exercised by the
departmental government shall be vested in that government, and so
that in the governmental system, which is the result of the process,
the central government of the islands, following the example of
the distribution of the powers between the States and the National
Government of the United States, shall have no direct administration
except of matters of purely general concern, and shall have only such
supervision and control over local governments as may be necessary to
secure and enforce faithful and efficient administration by local
officers.

The many different degrees of civilization and varieties of custom
and capacity among the people of the different islands preclude very
definite instruction as to the part which the people shall take in the
selection of their own officers; but these general rules are to be
observed: That in all cases the municipal officers who administer the
local affairs of the people, are to be selected by the people, and that
wherever officers of more extended jurisdiction are to be selected in
any way, natives of the islands are to be preferred, and if they can be
found competent and willing to perform the duties, they are to receive
the offices in preference to any others.

It will be necessary to fill some offices for the present with Americans
which after a time may well be filled by natives of the islands. As
soon as practicable a system for ascertaining the merit and fitness of
candidates for civil office should be put in force. An indispensable
qualification for all offices and positions of trust and authority in
the islands must be absolute and unconditional loyalty to the United
States, and absolute and unhampered authority and power to remove and
punish any officer deviating from that standard must at all times be
retained in the hands of the central authority of the islands.

In all the forms of government and administrative provisions which
they are authorized to prescribe the Commission should bear in mind
that the government which they are establishing is designed not for our
satisfaction, or for the expression of our theoretical views, but for
the happiness, peace, and prosperity of the people of the Philippine
Islands, and the measures adopted should be made to conform to their
customs, their habits, and even their prejudices, to the fullest extent
consistent with the accomplishment of the indispensable requisites of
just and effective government.

At the same time the Commission should bear in mind, and the people
of the islands should be made plainly to understand, that there are
certain great principles of government which have been made the basis
of our governmental system which we deem essential to the rule of law
and the maintenance of individual freedom, and of which they have,
unfortunately, been denied the experience possessed by us; that there
are also certain practical rules of government which we have found to
be essential to the preservation of these great principles of liberty
and law, and that these principles and these rules of government must
be established and maintained in their islands for the sake of their
liberty and happiness, however much they may conflict with the customs
or laws of procedure with which they are familiar.

It is evident that the most enlightened thought of the Philippine
Islands fully appreciates the importance of these principles and rules,
and they will inevitably within a short time command universal assent.
Upon every division and branch of the government of the Philippines,
therefore, must be imposed these inviolable rules:

That no person shall be deprived of life, liberty, or property without
due process of law; that private property shall not be taken for public
use without just compensation; that in all criminal prosecutions the
accused shall enjoy the right to a speedy and public trial, to be
informed of the nature and cause of the accusation, to be confronted
with the witnesses against him, to have compulsory process for obtaining
witnesses in his favor, and to have the assistance of counsel for his
defense; that excessive bail shall not be required, nor excessive fines
imposed, nor cruel and unusual punishment inflicted; that no person
shall be put twice in jeopardy for the same offense, or be compelled in
any criminal case to be a witness against himself; that the right to be
secure against unreasonable searches and seizures shall not be violated;
that neither slavery nor involuntary servitude shall exist except as a
punishment for crime; that no bill of attainder or _ex-post-facto_
law shall be passed; that no law shall be passed abridging the freedom
of speech or of the press, or the rights of the people to peaceably
assemble and petition the Government for a redress of grievances; that
no law shall be made respecting an establishment of religion, or
prohibiting the free exercise thereof, and that the free exercise and
enjoyment of religious profession and worship without discrimination or
preference shall forever be allowed.

It will be the duty of the Commission to make a thorough investigation
into the titles to the large tracts of land held or claimed by
individuals or by religious orders; into the justice of the claims and
complaints made against such landholders by the people of the island or
any part of the people, and to seek by wise and peaceable measures a
just settlement of the controversies and redress of wrongs which have
caused strife and bloodshed in the past. In the performance of this duty
the Commission is enjoined to see that no injustice is done; to have
regard for substantial rights and equity, disregarding technicalities so
far as substantial right permits, and to observe the following rules:

That the provision of the Treaty of Paris pledging the United States
to the protection of all rights of property in the islands, and as
well the principle of our own Government which prohibits the taking of
private property without due process of law, shall not be violated;
that the welfare of the people of the islands, which should be a
paramount consideration, shall be attained consistently with this rule
of property right; that if it becomes necessary for the public interest
of the people of the islands to dispose of claims to property which the
Commission finds to be not lawfully acquired and held disposition shall
be made thereof by due legal procedure, in which there shall be full
opportunity for fair and impartial hearing and judgment; that if the
same public interests require the extinguishment of property rights
lawfully acquired and held due compensation shall be made out of the
public treasury therefor; that no form of religion and no minister of
religion shall be forced upon any community or upon any citizen of the
islands; that, upon the other hand, no minister of religion shall be
interfered with or molested in following his calling, and that the
separation between State and Church shall be real, entire, and absolute.

It will be the duty of the Commission to promote and extend, and,
as they find occasion, to improve the system of education already
inaugurated by the military authorities. In doing this they should
regard as of first importance the extension of a system of primary
education which shall be free to all, and which shall tend to fit the
people for the duties of citizenship and for the ordinary avocations of
a civilized community. This instruction should be given in the first
instance in every part of the islands in the language of the people.
In view of the great number of languages spoken by the different tribes,
it is especially important to the prosperity of the islands that a
common medium of communication may be established, and it is obviously
desirable that this medium should be the English language. Especial
attention should be at once given to affording full opportunity to all
the people of the islands to acquire the use of the English language.