sage to Congress in March last, in relation to this project, I deem it my duty again to press upon your attention. Subsequent consideration has but confirmed the opinion "that it is the right and duty of the United States to assert and maintain such supervision and authority over any inter-oceanic canal across the isthmus that connects North and South America as will protect our national interest."

The war between the Republic of Chili on the one hand, and the allied Republics of Peru and Bolivia on the other, still continues. This government has not felt called upon to interfere in a contest that is within the belligerent rights of the parties as independent States. We have, however, always held ourselves in readiness to aid in accommodating their difference, and have at different times reminded both belligerents of our willingness to render such service.

Our good officcs, in this direction, were recently accepted by all the belligerents, and it was hoped they would prove efficacious; but I regret to announce that the measures which the ministers of the United States at Santiago and Lima were authorized to take, with the view to bring about a peace, were not successful. In the course of the war some questions have arisen affecting neutral rights; in all of these the ministers of the United States have, under their instructions, acted with promptness and energy in protection of American interests. * *

The condition of the financial affairs of the government, as shown by the report of the Secretary of the Treasury, is very satisfactory. It is believed that the present financial situation of the United States, whether considered with respect to trade, currency, credit, growing wealth, or the extent and variety of our resources, is more favorable than that of any other country of our time, and has never been surpassed by that of any country at any period of its history. All our industries are thriving; the rate of interest is low; new railroads are being constructed; a vast immigration is increasing our population, capital, and labor; new enterprises in great number are in progress, and our commercial relations with other countries are improving. * * * * * * * * * * * * * The amount due the sinking-fund for this year was $37,931,643.55. There was applied thereto the sum of $73,904,617.41, being $35,972,973.86 in excess of the actual requirements for the year.

The aggregate of the revenues from all sources during the fiscal year ended June 30, 1880, was $333,526,610.98, an increase over the preceding year of $59,699,426.52. The receipts thus far, of the current year, together with the estimated receipts for the remainder of the year, amount to $350,000,000, which will be sufficient to meet the estimated expenditures of the year, and leave a surplus of $90,000,000.

It is fortunate that this large surplus revenue occurs at a period when it may be directly applied to the payment of the public debt soon to be redeemable. ************

The debt of the United States, less cash in the Treasury and exclusive of accruing interest, attained its maximum of $2,756,431,571.43 in

August, 1865, and has since that time been reduced to $1,886,019,504.65. Of the principal of the debt, $108,758,100 has been paid since March 1, 1877, effecting an annual saving of interest of $6,107,593. The burden of interest has also been diminished by the sale of bonds bearing a low rate of interest, and the application of the proceeds to the redemption of bonds bearing a higher rate. The annual saving thus secured since March 1, 1877, is $14,290,453.50. Within a short period over six hundred millions of five and and six per cent. bonds will become redeemable. This presents a very favorable opportunity not only to further reduce the principal of the debt, but also to reduce the rate of interest on that which will remain unpaid. **

The continuance of specie payments has not been interrupted or endangered since the date of resumption. It has contributed greatly to the revival of business and to our remarkable prosperity. The fears that preceded and accompanied resumption have proved groundless. No considerable amount of United States notes have been presented for redemption, while very large sums of gold bullion, both domestic and imported, are taken to the mints and exchanged for coin or notes. The increase of coin and bullion in the United States since January 1, 1879, is estimated at $227,399,428.

There are still in existence, uncanceled, $346,681,016 of United States legal-tender notes. These notes were authorized as a war measure, made necessary by the exigencies of the conflict in which the United States was then engaged. The preservation of the nation's existence required, in the judgment of Congress, an issue of legal-tender paper money. That it served well the purpose for which it was created is not questioned; but the employment of the notes as paper money indefinitely, after the accomplishment of the object for which they were provided, was not contemplated by the framers of the law under which they were issued. These notes long since became-like any other pecuniary obligation of the government—a debt to be paid, and when paid to be canceled as mere evidence of an indebtedness no longer existing. I therefore repeat what was said in the annual message of last year, that the retirement from circulation of United States notes, with the capacity of legal tender in private contracts, is a step to be taken in our progress towards a safe and stable currency which should be accepted as the policy and duty of the government and the interest and security of the people.

At the time of the passage of the act now in force requiring the coinage of silver dollars, fixing their value and giving them legal-tender character, it was believed by many of the supporters of the measure that the silver dollar which it authorized would speedily become, under the operation of the law, of equivalent value to the gold dollar. There were other supporters of the bill who, while they doubted as to the probability of this result, nevertheless were willing to give the proposed experiment a fair trial, with a view to stop the coinage if experience should prove that the silver dollar

authorized by the bill continued to be of less commercial value than the standard gold dollar.

The coinage of silver dollars, under the act referred to, bagan in March, 1878, and has been continued as required by the act. The average rate per month to the present time has been $2,276,492. The total amount coined prior to the first of November last was $72,847,750. Of this amount $47,084,450 remain in the Treasury, and only $25,763,291 are in the hands of the people. A constant effort has been made to keep this currency in circulation, and considerable expense has been necessarily incurred for this purpose, but its return to the Treasury is prompt and sure. Contrary to the confident anticipation of the friends of the measure at the time of its adoption, the value of the silver dollar containing 4121⁄2 grains of silver has not increased. During the year prior to the passage of the bill authorizing its coinage, the market value of the silver which it contained was from 90 to 92 cents as compared with the standard gold dollar. During the last year the average market value of the silver dollar has been 88%

cents.

It is obvious that the legislation of the last Congress in regard to silver, so far as it was based on an anticipated rise in the value of silver as a result of that legislation, has failed to produce the effect then predicted. The longer the the law remains in force, requiring as it does the coinage of a nominal dollar, which, in reality, is not a dollar, the greater becomes the danger that this country will be forced to accept a single metal as the sole legal standard of value in circulation, and this a standard of less value than it purports to be worth in the recognized money of the world.

The Constitution of the United States, sound financial principles, and our best interests, all require that the country should have as its legaltender money both gold and silver coin of an intrinsic value, as bullion, equivalent to that which, upon its face, it purports to possess. The Constitution, in express terms, recognizes both gold and silver as the only true legal-tender money. To banish either of these metals from our currency is to narrow and limit the circulating medium of exchange, to the disparagement of important interests. The United States produces more silver than any other country, and is directly interested in maintaining it as one of the two precious metals which furnish the coinage of the world. It will, in my judgment, contribute to this result if Congress will repeal so much of existing legislation as requires the coinage of silver dollars containing only 4121⁄2 grains of silver, and in its stead will authorize the Secretary of the Treasury to coin silver dollars of equivalent value, as bullion, with gold dollars. This will defraud no man, and will be in accordance with familiar precedents. Congress, on several occasions, has altered the ratio of value between gold and silver, in order to establish it more nearly in accordance with the actual ratio of value between the two metals.

In financial legislation every measure in the direction of greater fidelity in the discharge of pecuniary obligations has been found by experi

Attention is asked to the necessity of providing by legislation for organizing, arming, and disciplining the active militia of the country, and liberal appropriations are recommended in this behalf. The reports of the AdjutantGeneral of the Army and the Chief of Ordnance touching this subject fully set forth its importance. * * * * * * * * *

A comprehensive improvement of the Mississippi and its tributaries is a matter of transcendent importance. These great water-ways comprise a system of inland transportation spread like net-work over a large portion of the United States, and navigable to the extent of many thousands of miles. Producers and consumers alike have a common interest in such unequaled facilities for cheap transportation. Geographically, commercially, and politically, they are the strongest tie between the various sections of the country. These channels of communication and interchange are the property of the nation. Its jurisdiction is paramount over their waters, and the plainest principles of public interest require their intelligent and careful supervision, with a view to their protection, improvement, and the enhancement of their usefulness. * *

The

I commend to the attention of Congress the great services of the commander and chief of our armies during the war for the Union, whose wise, firm, and patriotic conduct did so much to bring that momentous conflict to a close. legislation of the United States contains many precedents for the recognition of distinguished military merit, authorizing rank and emoluments to be conferred for eminent services to the country. An act of Congress authorizing the appointment of a captain.general of the Army, with suitable provisions relating to compensation, retirement, and other details, would, in my judgment, be altogether fitting and proper, and would be warmly approved by the country.

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The recommendation heretofore made is repeated and urged, that an educational fund be set apart from the net proceeds of the sales of the public lands annually, the income of which, and the remainder of the net annual proceeds, to be distributed on some satisfactory plan to the States and the Territories and the District of Columbia. * * * * * * * RUTHERFORD B. HAYES.

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On the Proposed Inter-Oceanic Ship-Canal Across the Isthmus, Between North America and South America, March 8, 1880.

To the Senate:

I transmit herewith the report of the Secretary of State, and the accompanying papers, in response to the resolution adopted by the Senate on the 11th of February last, requesting "copies of all correspondence between this government

and any foreign government since February, 1869, respecting a ship-canal across the isthmus between North America and South America, together with copies of any projêt of treaties respecting the same which the Department of State may have proposed or submitted since that date to any foreign power or its diplomatic rep-| resentative."

In further compliance with the resolution of the Senate, I deem it proper to state briefly my opinion as to the policy of the United States with respect to the construction of an interoceanic canal, by any route, across the American Isthmus.

The policy of this country is a canal under American control. The United States cannot consent to the surrender of this control to any European power, or to any combination of European powers. If existing treaties between the United States and other nations, or if the rights of sovereignty or property of other nations stand in the way of this policy-a contingency which is not apprehended-suitable steps should be taken by just and liberal negotiations to promote and establish the American policy on this subject, consistently with the rights of the nations to be affected by it.

The capital invested by corporations or citizens of other countries in such an enterprise must, in a great degree, look for protection to one or more of the great powers of the world. No European power can intervene for such protection, without adopting measures on this continent which the United States would deem wholly inadmissible. If the protection of the United States is relied upon, the United States must exercise such control as will enable this country to protect its national interests and maintain the rights of those whose capital is embarked in the work.

An inter-oceanic canal across the American Isthmus will essentially change the geographical relations between the Atlantic and Pacific coasts of the United States, and between the United States and the rest of the world. It will be the great ocean thoroughfare between our Atlantic and our Pacific shores, and virtually a part of the coast line of the United States. Our merely commercial interest in it is greater than that of all other countries, while its relations to our power and prosperity as a nation, to our means of defense, our unity, peace, and safety, are matters of paramount concern to the people of the United States. No other great power would, under similar circumstances, fail to assert a rightful control over a work so closely and vitally affecting its interest and welfare.

Without urging further the grounds of my opinion, I repeat in conclusion that it is the right and the duty of the United States to assert and maintain such supervision and authority over any inter-oceanic canal across the isthmus that connects North and South America, as will protect our national interests. This I am quite sure will be found not only compatible with, but promotive of, the widest and most permanent advantage to commerce and civilization.

RUTHERFORD B. HAYES.

On the Removal of the Ponca Indians, February 1, 1881.

To the Senate and House of Representatives:

In compliance with the request of a large number of intelligent and benevolent citizens, and believing that it was warranted by the extraordinary circumstances of the case, on the 18th day of December, 1880, I appointed a commission consisting of George Crook and Nelson A. Miles, brigadier-generals in the army, William Stickney, of the District of Columbia, and Walter Allen, of Massachusetts, and requested them to confer with the Ponca Indians in the Indian Territory, and if, in their judgment, it was advisable, also with that part of the tribe which remained in Dakota, and "to ascertain the facts in regard to their removal and present condition, so far as was necessary to determine the question as to what justice and humanity require should be done by the Government of the United States, and to report their conclusions and recommendations in the premises."

The commission, in pursuance of these instructions, having visited the Ponca Indians at their homes in the Indian Territory and in Dakota, and made a careful investigation of the subject referred to them, have reported their conclusions and recommendations, and I now submit their report, together with the testimony taken, for the consideration of Congress. minority report by Mr. Allen is also herewith submitted.

A

On the 27th of December, 1880, a delegation of Ponca chiefs from the Indian Territory presented to the Executive a declaration of their wishes, in which they stated that it was their desire "to remain on the lands now occupied by the Poncas in the Indian Territory," and "to relinquish all their right and interest in the lands formerly owned and occupied by the Ponca tribe in the State of Nebraska and the Territory of Dakota ;" and the declaration sets forth the compensation which they will accept for the lands to be surrendered, and for the the injuries done to the tribe by their removal to the Indian Territory. This declaration, agreeably to the request of the chiefs making it, is herewith transmitted to Congress.

The public attention has frequently been called to the injustice and wrong which the Ponca tribe of Indians has suffered at the hands of the Government of the United States. This subject was first brought before Congress and the country by the Secretary of the Interior in his annual report for the year 1877, in which he said:

"The case of the Poncas seems entitled to especial consideration at the hands of Congress. They have always been friendly to the whites. It is said, and, as far as I have been able to learn, truthfully, that no Ponca ever killed a white man. The orders of the Governmeat always met with obedient compliance at their hands. Their removal from their old homes on the Missouri River was to them a great hardship. They had been born and raised there. They had houses there in which they lived according to their ideas of comfort. Many of them had engaged in agriculture, and possessed cattle and agricultural implements. They were very re

resolved upon their removal, they finally overcame that reluctance and obeyed. Considering their constant good conduct, their obedient spirit, and the sacrifices they have made, they are certainly entitled to more than ordinary care at the hands of the Government. and I urgently recommend that liberal provision be made to aid them in their new settlement."

In the same volume the report of E. A. Howard, the agent of the Poncas, is published, which contains the following: *** * * * * * *

"I am of the opinion that the removal of the Poncas from the northern climate of Dakota to the southern climate of the Indian Territory, at the season of the year it was done, will prove a mistake, and that a great mortality will surely follow among the people when they shall have been here for a time and become poisoned with the malaria of the climate. Already the effects of the climate may be seen upon them, in the ennui that seems to have settled upon each, and in the large number now sick.

"It is a matter of astonishment to me that the Government should have ordered the removal of the Ponca Indians from Dakota to the Indian Territory, without having first made some provision for their settlement and comfort. Before their removal was carried into effect an appropriation should have been made by Congress sufficient to have located them in their new home, by building a comfortable house for the occupancy of every family of the tribe. As the case now is, no appropriation has been made by Congress, except for a sum but little more than sufficient to remove them; no houses have been built for their use, and the result is that these people have been placed on an uncultivated reservation, to live in their tents as best they may, and await further legislative action. ****

"These Indians claim that the Government had no right to move them from their reservation without first obtaining from them by purchase or treaty the title which they had acquired from the Government, and for which they rendered a valuable consideration. They claim that the date of the settlement of their tribe upon the land composing their old reservation is pre-historic; that they were all born there, and that their ancestors from generations back beyond their knowledge were born and lived upon its soil, and that they finally acquired a complete and perfect title from the Government by treaty made with the Great Father' at Washington, which, they claimed, made it as legitimately theirs as is the home of the white man acquired by gift or purchase."

The subject was again referred to in similar terms in the annual report of the Interior Department for 1878, in the reports of the Commissioner of Indian Affairs and of the agent for the Poncas, and in 1879 the Secretary of the Interior said: **************

"That the Poncas were grievously wronged by their removal from their location on the Missouri River to the Indian Territory, their old reservation having, by a mistake in making the Sioux treaty, been transferred to the Sioux, has been at length and repeatedly set forth in my reports,

Affairs. All that could be subsequently done by this Department in the absence of new legislation, to repair that wrong and to indemnify them for their losses, has been done with more than ordinary solicitude. They were permitted to select a new location for themselves in the Indian Territory, the Quapaw reserve, to which they had first been taken, being objectionable to them. They chose a tract of country on the Arkansas river and the Salt Fork, northwest of the Pawnee reserve. I visited their new reservation personally to satisfy myself of their condition. The lands they now occupy are among the very best in the Indian Territory in point of fertility, well-watered and well-timbered, and admirably adapted for agriculture as well as stock-raising. In this respect their new reservation is unquestionably superior to that which they left behind them on the Missouri river. Seventy houses have been built by and for them, of far better quality than the miserable huts they formerly occupied in Dakota, and the construction of a larger number is now in progress; so that, as the agent reports, every Ponca family will be comfortably housed before January. A very liberal allowance of agricultural implements and stock cattle has been given them, and if they apply themselves to agricultural work there is no doubt that their condition will soon be far more prosperous than it has ever been before. During the first year after their removal to the Indian Territory, they lost a comparatively large number of their people by death, in consequence of the change of climate, which is greatly to be deplored; but their sanitary condition is now very much improved. The death rate among them during the present year has been very low, and the number of cases of sickness is constantly decreasing. It is thought that they are now sufficiently acclimated to be out of danger."

A committee of the Senate, after a very full investigation of the subject, on the 31st of May, 1880, reported their conclusions to the Senate, and both the majority and minority of the committee agreed that "a great wrong had been done to the Ponca Indians." The majority of the committee says:

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Nothing can strengthen the Government in a just policy to the Indians so much as a demonstration of its willingness to do ample and complete justice whenever it can be shown that it has inflicted a wrong upon a weak and trusting tribe. It is impossible for the United States to hope for any confidence to be reposed in them by the Indian until there shall be shown on their part a readiness to do justice."

The minority report is equally explicit as to the duty of the Government to repair the wrong done the Poncas. It says:

"We should be more prompt and anxious because they are weak and we are strong. In my judgment we should be liberal to the verge of lavishness in the expenditure of our money to improve their condition, so that they and all others may know that, although like all nations and all men we may do wrong, we are willing to make ample reparation."

The report of the commission appointed by me, of which General Crook was chairman, and the testimony taken by them and their investigations, add very little to what was already contained in the official reports of the Secretary of the Interior and the report of the Senate committee, touching the injustice done to the Poncas by their removal to the Indian Territory. Happily, however, the evidence reported by the commission and their recommendations point out conclusively the true measures of redress which the Government of the United States ought now to adopt.

The commission in its conclusions omit to state the important facts as to the present condition of the Poncas in the Indian Territory, but the evidence they have reported shows clearly and conclusively that the Poncas now residing in that Territory, five hundred and twenty-one in number, are satisfied with their new homes; that they are healthy, comfortable, and contented, and that they have freely and firmly decided to adhere to the choice announced in their letter of October 25, 1880, and in the declaration of December 27, 1880, to remain in the Indian Territory and not to return to Dakota.

The evidence reported also shows that the fragment of the Ponca tribe-perhaps one hundred and fifty in number-which is still in Dakota and Nebraska, prefer to remain on their old reservation.

In view of these facts, I am convinced that the recommendations of the commission, together with the declaration of the chiefs of December last, if substantially followed, will afford a solution of the Ponca question which is consistent with the wishes and interests of both branches of the tribe, with the settled Indian policy of the Government, and as nearly as is now practicable with the demands of justice.

Our general Indian policy for the future should embrace the following leading ideas:

1. The Indians should be prepared for citizenship by giving to their young of both sexes that industrial and general education which is required to enable them to be self-supporting and capable of self-protection in a civilized community.

2. Lands should be alloted to the Indians in severalty, inalienable for a certain period.

3. The Indians should have a fair compensation for their lands not required for individual allotments, the amount to be invested with suitable safeguards for their benefit.

4. With these prerequisites secured, the Indians should be made citizens and invested with the rights and charged with the responsibilities of citizenship.

It is therefore recommended that legislation be adopted in relation to the Ponca Indians,

authorizing the Secretary of the Interior to secure to the individual members of the Ponca tribe, in severalty, sufficient land for their support, inalienable for a term of years, and until the restriction upon inalienation may be removed by the President. Ample time and opportunity should be given to the members of the tribe freely to chose their allotments either on their old or their new reservation.

Full compensation should be made for the lands to be relinquished, for their losses by the Sioux depredations and by reason of their removal to the Indian Territory-the amount not to be less than the sums named in the declaration of the chiefs made December 27, 1880.

In short, nothing should be left undone to show to the Indians that the Government of the United States regards their rights as equally sacred with those of its citizens. The time has come when the policy should be to place the Indians as rapidly as practicable on the same footing with the other permanent inhabitants of our country.

I do not undertake to apportion the blame for the injustice done to the Poncas. Whether the Executive or Congress or the public is chiefly in fault, is not now a question of practical importance. As the Chief Executive at the time when the wrong was consummated, I am deeply sensible that enough of the responsibility for that wrong justly attaches to me to make it my particular duty and earnest desire to do all I can to give to these injured people that measure of redress which is required alike by justice and by humanity. RUTHERFORD B. HAYES.

Transmitting the Report of the Civil Service Commission, February 28, 1881. To the Senate and House of Representatives:

I transmit herewith a copy of a letter addressed to the chairman of the civil service commission on the 3d of December last, requesting to be furnished with a report upon the result in the post-office and custom-house in the city of New York of the application of the civil service rules requiring open competitive examinations for appointments and promotions, together with the report of Hon. Dorman B. Eaton, the chairman of the commission, in response.

The report presents a very gratifying statement of the results of the application of the rules referred to in the two largest and most important local offices in the civil service of the Government. The subject is one of great importance to the people of the whole country. would commend the suggestions and recommendation of the chairman of the commission to the careful consideration of Congress.

R. B. HAYES.

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