provisions of that compact may have proved onerous, its existence has fostered commercial relations which it is important to preserve. I suggest, therefore, that early consideration be given to such modifications of the treaty as seem to be demanded by the interests of our people. In view of our increasing trade with both Hayti and Santo Domingo. I advise that provision be made for diplomatic intercourse with the latter, by enlarging the scope of the mission at Port au Prince. I regret that certain claims of American citizens against the Government of Hayti have thus far been urged unavailingly. A recent agreement with Mexico provides for the crossing of the frontier by the armed forces of either country in pursuit of hostile Indians. In my message of last year I called attention to the prevalent lawlessness upon the borders and to the necessity of legislation for its suppression. I again invite the attention of Congress to the subject. A partial relief from these mischiefs has been sought in a convention, which now awaits the approval of the Senate, as does also another touching the establishment of the international boundary between the United States and Mexico. If the latter is ratified, the action of Congress will be required for establishing suitable commissions of survey. The boundary dispute between Mexico and Guatemala, which led this government to proffer its friendly counsels to both parties, has been amicably settled. No change has occurred in our relations with Venezuela. I again invoke your action in the matter of the pending awards against that republic to which reference was made by a special message from the Executive at your last session. An invitation has been received from the Government of Venezuela to send representatives in July, 1883, to Caracas, for participating in the centennial celebration of the birth of Bolivar, the founder of South American independence. In connection with this event it is designed to commence the erection at Caracas of a statue of Washington, and to conduct an industrial exhibition which will be open to American products. I recommend that the United States be represented, and that suitable provision be made therefor. The elevation of the grade of our mission in Central America to the plenipotentiary rank, which was authorized by Congress at its late session, has been since effected. The war between Peru and Bolivia on the one side and Chili on the other began more than three years ago. On the occupation by Chili in 1880 of all the littoral territory of Bolivia, negotiations for peace were conducted under the direction of the United States. The allies refused to concede any territory, but Chili has since become master of the whole coast of both countries and of the capital of Peru. A year since, as you have already been advised by correspondence transmitted to you in January last, this government sent a special mission to the belligerent powers to express the hope that Chili would be disposed to accept a money indemnity for the expenses of the war and to relinquish her demand for a portion of the territory of her antagonist. This recommendation, which Chili declined to follow, this government did not assume to enforce; nor can it be enforced without resort to measures which would be in keeping neither with the temper of our people nor with the spirit of our institutions. The power of Peru no longer extends over its whole territory, and, in the event of our interference to dictate peace, would need to be supplemented by the armies and navies of the United States. Such interference would almost inevitably lead to the establishment of a protectorate-a result utterly at odds with our past policy, injurious to our present interests, and full of embarrassments for the future. For effecting the termination of hostilities upon terms at once just to the victorious nation and generous to its adversaries, this government has spared no efforts save such as might involve the complications which I have indicated. It is greatly to be deplored that Chili seems resolved to exact such rigorous conditions of peace and indisposed to submit to arbitration the terms of an amicable settlement. No peace is likely to be lasting that is not sufficiently equitable and just to command the approval of other nations. About a year since, invitations were extended to the nations of this continent to send representatives to a peace congress to assemble at Washington in November, 1882. The time of meeting was fixed at a period then remote, in the hope, as the invitation itself declared, that in the mean time the disturbances between the South American republics would be adjusted. As that expectation seemed unlikely to be realized, I asked in April last for an expression of opinion from the two houses of Congress as to the advisability of holding the proposed convention at the time appointed. This action was prompted in part by doubts which mature reflection had suggested whether the diplomatic usage and traditions of the government did not make it fitting that the Executive should consult the representatives of the people before pursuing a line of policy somewhat novel in its character, and far-reaching in its possible consequences. In view of the fact that no action was taken by Congress in the premises and that no provision had been made for necessary expenses, I subsequently decided to postpone the convocation, and so notified the several governments which had been invited to attend.. I am unwilling to dismiss this subject without assuring you of my support of any measures the wisdom of Congress may devise for the promotion of peace on this continent and throughout the world, and I trust that the time is nigh when, with the universal assent of civilized peoples, all international differences shall be determined without resort to arms by the beniguant processes of arbitration. Changes have occurred in the diplomatic representation of several foreign powers during the past year. New ministers from the Argen tine Republic, Austria-Hungary, Brazil, Chili, China, France, Japan, Mexico, the Netherlands, and Russia have presented their credentials. The missions of Denmark and Venezuela at this capital have been raised in grade. Switzerland has created a plenipotentiary mission to this government, and an embassy from Madagascar and a minister from Siam will shortly arrive. Ourdiplomatic intercourse has been enlarged by the establishment of relations with the new Kingdom of Servia, by the creation of a mission to Siam, and by the restoration of the mission to Greece. The Shah of Persia has expressed his gratification that a chargé d'affaires will shortly be sent to that country, where the rights of our citizens have been hitherto courteously guarded by the representatives of Great Britain. J renew my recommendation of such legislation as will place the United States in harmony with other maritime powers with respect to the international rules for the prevention of collisions at sea. In conformity with your joint resolution of the 3d of August last, I have directed the Secretary of State to address foreign governments in respect to a proposed conference for considering the subject of the universal adoption of a common prime meridian to be used in the reckoning of longitude and in the regulation of time throughout the civilized world. Their replies will, in due time, be laid before you. An agreement was reached at Paris in 1875 between the principal powers for the interchange of official publications through the medium of their respective foreign departments. The admirable system which has been built up by the enterprise of the Smithsonian Institution affords a practical basis for our co-operation in this scheme, and an arrangement has been effected by which that institution will perform the necessary labor, under the direction of the Department of State. A reasonable compensation therefor should be provided by law. A clause in the act making appropriations for the diplomatic and consular service contemplates the reorganization of both branches of such service on a salaried basis, leaving fees to inure to the benefit of the Treasury. I cordially favor such a project, as likely to correct abuses in the present system. The Secretary of State will present to you at an early day a plan for such reorganization. A full and interesting exhibit of the operations of the Treasury Department is afforded by the report of the Secretary. It appears that the ordinary revenues from all sources for the fiscal year ended June 30, 1882, were as follows: From customs. From internal revenue From sales of public lands. From tax on circulation and deposits of national banks. From repayment of interest by Pacific Railway Companies. $220, 410, 730 25 146, 497, 595 45 4,753, 140 37 8, 956, 794 45 840, 554 37 From sinking fund for Pacific Railway Companies... ...... From deposits by individuals for surveying public lands..... From revenues of the District of Columbia From miscellaneous sources Total ordinary receipts .. The ordinary expenditures for the same period were― For civil expenses .... For the military establishment, including river and For interest on the public debt. Total ordinary expenditures Leaving a surplus revenue of ..... Which, with an amount drawn from the cash bal ance in the Treasury of 796, 271 42 $1,343, 348 00 2,638, 990 97 314, 959 85 4, 116, 693 73 5,705, 243 22 2,052, 306 36 1,715, 176 41 3,383, 445 43 403, 525, 250 28 $18,042, 386 42 1,307,583 19 9,736, 747 40 61, 345, 193 95 43, 570, 494 19 15,032,046 26 34,539, 237 50 3,330, 543 87 71,077, 206 79 257,981, 439 57 145, 543, 810 71 20, 737, 694 84 166, 281, 505 55 60,079, 150 00 * 58, 705 55 62,572,050 00 4,472, 900 00 37, 194, 450 00 1,000 00 303, 000 00 2,100 00 7,400 00 6,500 00 254, 550 00 Of consols of 1865 Of consols of 1867... Of consols of 1868.. Of Oregon war debt .. Of old demand, compound-interest, and other notes. $86,450 00 408, 250 00 141,400 00 675, 250 00 18,350 00 166, 281, 505 55 The foreign commerce of the United States during the last fiscal year, including imports and exports of merchandise and specie, was as follows: This excess is less than it has been before for any of the previous six years, as appears by the following table: During the year there have been organized 171 national banks, and of those institutions there are now in operation 2,269, a larger number than ever before. The value of their notes in active circulation on July 1, 1882, was $324,656,458. I commend to your attention the Secretary's views in respect to the likelihood of a serious contraction of this circulation, and to the modes by which that result may, in his judgment, be averted. In respect to the coinage of silver dollars and the retirement of silver certificates I have seen nothing to alter but much to confirm the sentiments to which I gave expression last year. A comparison between the respective amounts of silver dollar circulation on November 1, 1881, and on November 1, 1882, shows a slight |