one submarine torpedo boat. Contracts for the building of all of them have been let. The Secretary expresses the opinion that we have for the present a sufficient supply of cruisers and gunboats, and that hereafter the construction of battle ships and torpedo boats will supply our needs.

Much attention has been given to the methods of carrying on departmental business. Important modifications in the regulations have been made, tending to unify the control of shipbuilding, as far as may be, under the Bureau of Construction and Repair, and also to improve the mode of purchasing supplies for the Navy by the Bureau of Supplies and Accounts. The establishment, under recent acts of Congress, of a supply fund, with which to purchase these supplies in large quantities, and other modifications of methods, have tended materially to their cheapening and better quality.

The War College has developed into an institution which it is believed will be of great value to the Navy, in teaching the science of war, as well as in stimulating professional zeal in the Navy; and it will be especially useful in the devising of plans for the utilization, in case of necessity, of all the naval resources of the United States.

The Secretary has persistently adhered to the plan he found in operation for securing labor at navy-yards, through boards of labor employinent, and has done much to make it more complete and efficient The naval officers who are familiar with this system and its operation express the decided opinion that its results have been to vastly improve the character of the work done at our yards and greatly reduce its cost.

Discipline among the officers and men of the Navy has been maintained to a high standard, and the percentage of American citizens enlisted has been very much increased.

The Secretary is considering, and will formulate during the coming winter, a plan for laying up ships in reserve, thereby largely reducing the cost of maintaining our vessels afloat. This plan contemplates that battle ships, torpedo boats, and such of the cruisers as are not needed for active service at sea shall be kept in reserve, with skeleton crews on board to keep them in condition, cruising only enough to insure the efficiency of the ships and their crews in time of activity. The economy to result from this system is too obvious to need

comment.

The Naval Militia, which was authorized a few years ago as an experiment, has now developed into a body of enterprising young men, active and energetic in the discharge of their duties and promising great usefulness. This establishment has nearly the same FR 96-iy

relation to our Navy as the National Guard in the different States bears to our Army; and it constitutes a source of supply for our naval forces, the importance of which is immediately apparent.

The report of the Secretary of the Interior presents a comprehensive and interesting exhibit of the numerous and important affairs committed to his supervision. It is impossible in this communication to do more than briefly refer to a few of the subjects concerning which the Secretary gives full and instructive information.

The money appropriated on account of this Department and for its disbursement for the fiscal year ended June 30, 1896, amounted to more than $157,000,000, or a greater sum than was appropriated for the entire maintenance of the Government for the two fiscal years ended June 30, 1861.

Our public lands, originally amounting to 1,840,000,000 acres, have been so reduced that only about 600,000,000 acres still remain in Government control, excluding Alaska. The balance, being by far the most valuable portion, has been given away to settlers, to new States, and to railroads, or sold at a comparatively nominal sum. The patenting of land in execution of railroad grants has progressed rapidly during the year, and since the 4th day of March, 1893, about 25,000,000 acres have thus been conveyed to these corporations.

I agree with the Secretary that the remainder of our public lands should be more carefully dealt with and their alienation guarded by better economy and greater prudence.

The Commission appointed from the membership of the National Academy of Sciences, provided for by an act of Congress to formulate plans for a national forestry system, will, it is hoped, soon be prepared to present the result of thorough and intelligent examination of this important subject.

The total Indian population of the United States is 177,235, according to a census made in 1895, exclusive of those within the State of New York and those comprising the Five Civilized Tribes. Of this number there are approximately 38,000 children of school age. During the year 23,393 of these were enrolled in schools. The progress which has attended recent efforts to extend Indian school facilities, and the anticipation of continued liberal appropriations to that end, can not fail to afford the utmost satisfaction to those who believe that the education of Indian children is a prime factor in the accomplishment of Indian civilization.

It may be said in general terms that in every particular, the improvement of the Indians under Government care, has been most marked and encouraging.

The Secretary, the Commissioner of Indian Affairs, and the agents having charge of Indians to whom allotments have been made, strongly urge the passage of a law prohibiting the sale of liquor to allottees who have taken their lands in severalty. I earnestly join in this recommendation, and venture to express the hope that the Indian may be speedily protected against this greatest of all obstacles to his well-being and advancement.

The condition of affairs among the Five Civilized Tribes, who occupy large tracts of land in the Indian Territory and who have governments of their own, has assumed such an aspect as to render it almost indispensable that there should be an entire change in the relations of these Indians to the General Government. This seems to be necessary in furtherance of their own interests, as well as for the protection of non-Indian residents in their territory. A commission organized and empowered under several recent laws is now negotiating with these Indians for the relinquishment of their courts and the division of their common lands in severalty, and are aiding in the settlement of the troublesome question of tribal membership. The reception of their first proffers of negotiation was not encouraging; but through patience and such conduct on their part as demonstrated that their intentions were friendly and in the interest of the tribes, the prospect of success has become more promising. The effort should be to save these Indians from the consequences of their own mistakes and improvidence, and to secure to the real Indian his rights as against intruders and professed friends who profit by his retrogression. A change is also needed to protect life and property through the operation of courts conducted according to strict justice and strong enough to enforce their mandates.

As a sincere friend of the Indian I am exceedingly anxious that these reforms should be accomplished with the consent and aid of the tribes, and that no necessity may be presented for radical or drastic legislation. I hope, therefore, that the Commission now conducting negotiations, will soon be able to report that progress has been made toward a friendly adjustment of existing difficulties. It appears that a very valuable deposit of gilsonite or asphaltum has been found on the reservation in Utah occupied by the Uncompahgre Ute Indians. Every consideration of care for the public interest and every sensible business reason, dictate such management or disposal of this important source of public revenue as will except it from the general rules and incidents attending the ordinary disposition of public lands, and secure to the Government a fair share at least of its advantages in place of its transfer for a nominal sum to interested individuals.

I indorse the recommendation made by the present Secretary of the Interior, as well as his predecessor, that a permanent commission, consisting of three members, one of whom shall be an army officer, be created to perform the duties now devolving upon the Commissioner and Assistant Commissioner of Indian Affairs. The management of the Bureau involves such numerous and diverse details, and the advantages of an uninterrupted policy are so apparent, that I hope the change suggested will meet the approval of the Congress.

The diminution of our enormous pension roll and the decrease of pension expenditure, which have been so often confidently foretold, still fail in material realization. The number of pensioners on the rolls at the close of the fiscal year ended June 30, 1896, was 970,678. This is the largest number ever reported. The amount paid exclusively for pensions during the year was $138,214,761.94, a slight decrease from that of the preceding year, while the total expenditures on account of pensions, including the cost of maintaining the Department and expenses attending pension distribution, amounted to $142,206,550. 59, or within a very small fraction of one-third of the entire expense of supporting the Government during the same year. The number of new pension certificates issued was 90,640. Of these, 40,374 represent original allowances of claims and 15,878 increases of existing pensions.

The number of persons receiving pensions from the United States but residing in foreign countries at the close of the last fiscal year was 3,781, and the amount paid to them during the year was $582,735.38.

The sum appropriated for the payment of pensions for the current fiscal year ending June 30, 1897, is $140,000,000, and for the succeeding year it is estimated that the same amount will be necessary. The Commissioner of Pensions reports that during the last fiscal year 339 indictments were found against violators of the pension laws. Upon these indictments 167 convictions resulted.

In my opinion, based upon such statements as these and much other information and observation, the abuses which have been allowed to creep into our pension system have done incalculable harm in demoralizing our people and undermining good citizenship. I have endeavored within my sphere of official duty to protect our pension roll and make it what it should be, a roll of honor, containing the names of those disabled in their country's service and worthy of their country's affectionate remembrance. When I have seen those who pose as the soldiers' friends, active and alert in urging greater laxity and more reckless pension expenditure, while nursing selfish schemes, I have deprecated the approach of a situation

when necessary retrenchment and enforced economy may lead to an attack upon pension abuses, so determined as to overlook the discrimination due to those who, worthy of a nation's care, ought to live and die under the protection of a nation's gratitude.

The Secretary calls attention to the public interests involved in an adjustment of the obligations of the Pacific railroads to the Government. I deem it to be an important duty to especially present this subject to the consideration of the Congress.

On January 1, 1897, with the amount already matured, more than $13,000,000 of the principal of the subsidy bonds issued by the United States in aid of the construction of the Union Pacific Railway, including its Kansas line, and more than $6,000,000 of like bonds, issued in aid of the Central Pacific Railroad, including those issued to the Western Pacific Railroad Company, will have fallen due and been paid or must on that day be paid by the Government. Without any reference to the application of the sinking fund now in the Treasury, this will create such a default on the part of these companies to the Government as will give it the right to at once institute proceedings to foreclose its mortgage lien. In addition to this indebtedness, which will be due January 1, 1897, there will mature between that date and January 1, 1899, the remaining principal of such subsidy bonds, which must also be met by the Government. These amount to more than $20,000,000 on account of the Union Pacific lines, and exceed $21,000,000 on account of the Central Pacific lines.

The situation of these roads and the condition of their indebtedness to the Government have been fully set forth in the reports of various committees to the present and prior Congresses; and as early as 1887 they were thoroughly examined by a special commission appointed pursuant to an act of Congress. The considerations requiring an adjustment of the Government's relations to the companies have been clearly presented, and the conclusion reached with practical uniformity, that if these relations are not terminated they should be revised upon a basis securing their safe continuance.

Under section 4 of the act of Congress passed March 3, 1887, the President is charged with the duty, in the event that any mortgage or other incumbrance paramount to the interest of the United States in the property of the Pacific railroads shall exist and be lawfully liable to be enforced, to direct the action of the Departments of Treasury and of Justice in the protection of the interest of the United States by redemption or through judicial proceedings, including foreclosures of the Government liens.