MESSAGE.

Fellow-Citizens of the Senate and House of Representatives :

The members of the Forty-sixth Congress have assembled in their first regular session under circumstances calling for mutual congratulation and grateful acknowledgment to the Giver of all good for the large and unusual measure of national prosperity which we now enjoy.

The most interesting events which have occurred in our public affairs since my last annual message to Congress are connected with the financial operations of the government directly affecting the business interests of the country. I congratulate Congress on the successful execution of the resumption act. At the time fixed, and in the manner contemplated by law, United States notes began to be redeemed in coin. Since the 1st of January last they have been promptly redeemed on presentation, and in all business transactions, public and private, in all parts of the country, they are received and paid out as the equivalent of coin. The demand upon the Treasury for gold and silver in exchange for United States notes has been comparatively small, and the voluntary deposit of coin and bullion in exchange for notes has been very large. The excess of the precious metals deposited or exchanged for United States notes over the amount of United States notes redeemed is about $40,000,000.

The resumption of specie payments has been followed by a very great revival of business. With a currency equivalent in value to the money of the commercial world, we are enabled to enter upon an equal com petition with other nations in trade and production. The increasing foreign demand for our manufactures and agricultural products has caused a large balance of trade in our favor, which has been paid in gold, from the 1st of July last to November 15, to the amount of about $59,000,000. Since the resumption of specie payments there has also been a marked and gratifying improvement of the public credit. The bonds of the government bearing only 4 per cent. interest have been sold at or above par, sufficient in amount to pay off all of the national debt which was redeemable under present laws. The amount of interest saved annually by the process of refunding the debt, since March 1, 1877, is $14,297,177. The bonds sold were largely in small sums, and the number of our citizens now holding the public securities is much greater than ever before. The amount of the national debt which matures within less than two years is $792,121,700, of which $500,000,000 bear interest at the rate of 5 per cent., and the balance is in bonds bear

ing 6 per cent. interest. It is believed that this part of the public debt can be refunded by the issue of 4 per cent. bonds, and, by the reduction of interest which will thus be effected, about eleven millions of dollars can be annually saved to the Treasury. To secure this important reduction of interest to be paid by the United States, further legislation is required, which, it is hoped, will be provided by Congress during its present session.

The coinage of gold by the mints of the United States during the last fiscal year was $40,986,912. The coinage of silver dollars, since the passage of the act for that purpose, up to November 1, 1879, was $45,000,850, of which $12,700,344 have been issued from the Treasury and are now in circulation, and $32,300,506 are still in the possession of the govern ment.

The pendency of the proposition for unity of action between the United States and the principal commercial nations of Europe, to effect a permanent system for the equality of gold and silver in the recognized money of the world, leads me to recommend that Congress refrain from new legislation on the general subject. The great revival of trade, internal and foreign, will supply during the coming year its own instructions, which may well be awaited before attempting further experimental measures with the coinage. I would, however, strongly urge upon Congress the importance of authorizing the Secretary of the Treasury to suspend the coinage of silver dollars upon the present legal ratio. The market value of the silver dollar being uniformly and largely less than the market value of the gold dollar, it is obviously impracticable to maintain them at par with each other if both are coined without limit. If the cheaper coin is forced into circulation it will, if coined without limit, soon become the sole standard of value, and thus defeat the desired object, which is a currency of both gold and silver, which shall be of equivalent value, dollar for dollar, with the universally recognized money of the world.

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. It is my firm conviction that the issue of legaltender paper money based wholly upon the authority and credit of the government, except in extreme emergency, is without warrant in the Constitution, and a violation of sound financial principles. The issue of United States notes during the late civil war with the capacity of legaltender between private individuals was not authorized except as a means of rescuing the country from imminent peril. The circulation of these notes as paper money, for any protracted period of time after the accomplishment of this purpose, was not contemplated by the framers of the law under which they were issued. They anticipated the redemption and withdrawal of these notes at the earliest practicable period

consistent with the attainment of the object for which they were provided.

The policy of the United States, steadily adhered to from the adoption of the Consitution, has been to avoid the creation of a national debt, and when, from necessity in time of war, debts have been created, they have been paid off on the return of peace as rapidly as possible. With this view, and for this purpose, it is recommended that the existing laws for the accumulation of a sinking-fund sufficient to extinguish the public debt within a limited period be maintained. If any change of the objects or rates of taxation is deemed necessary by Congress, it is suggested that experience has shown that a duty can be placed on tea and coffee, which will not enhance the price of those articles to the consumer, and which will add several millions of dollars annually to the Treasury.

The continued deliberate violation by a large number of the prominent and influential citizens of the Territory of Utah of the laws of the United States for the prosecution and punishment of polygamy demands the attention of every department of the government. This Territory has a population sufficient to entitle it to admission as a State, and the general interests of the nation, as well as the welfare of the citizens of the Territory, require its advance from the Territorial form of government to the responsibilities and privileges of a State. This important change will not, however, be approved by the country while the citizens of Utah in very considerable number uphold a practice which is condemned as a crime by the laws of all civilized communities throughout the world. The law for the suppression of this offense was enacted with great unanimity by Congress more than seventeen years ago, but has remained until recently a dead letter in the Territory of Utah, because of the peculiar difficulties attending its enforcement. The opinion widely prevailed among the citizens of Utah that the law was in contravention of the Constitutional guarantee of religious freedom. This objection is now removed. The Supreme Court of the United States has decided the law to be within the legislative power of Congress, and binding as a rule of action for all who reside within the Territories. There is no longer any reason for delay or hesitation in its enforcement. It should be firmly and effectively executed. If not sufficiently stringent in its provisions it should be amended; and, in aid of the purpose in view, I recommend that more comprehensive and more searching methods for preventing as well as punishing this crime be provided. If necessary to secure obedience to the law, the enjoyment and exercise of the rights and privileges of citizenship in the Territories of the United States may be withheld or withdrawn from those who violate or oppose the enforcement of the law on this subject.

The elections of the past year, though occupied only with State officers, have not failed to elicit in the political discussions which attended them all over the country new and decisive evidence of the deep interest which the great body of citizens take in the progress of the country

towards a more general and complete establishment, at whatever cost, of universal security and freedom in the exercise of the elective franchise. While many topics of political concern demand great attention from our people, both in the sphere of national and State authority, I find no reason to qualify the opinion I expressed in my last annual message, that no temporary or administrative interests of government, however urgent or weighty, will ever displace the zeal of our people in defense of the primary rights of citizenship, and that the power of public opinion will override all political prejudices, and all sectional and State attachments, in demanding that all over our wide territory the name and character of citizen of the United States shall mean one and the same thing, and carry with them unchallenged security and respect. I earnestly appeal to the intelligence and patriotism of all good citizens of every part of the country, however much they may be divided in opinions on other political subjects, to unite in compelling obedience to existing laws aimed at the protection of the right of suffrage. I respectfully urge upon Congress to supply any defects in these laws which experience has shown and which it is within its power to remedy. I again invoke the co-operation of the executive and legislative authorities of the States in this great purpose. I am fully convinced that if the public mind can be set at rest on this paramount question of popular rights no serious obstacle will thwart or delay the complete pacification of the country or retard the general diffusion of prosperity.

In a former message I invited the attention of Congress to the subject of the reformation of the civil service of the government, and expressed the intention of transmitting to Congress as early as practicable a report upon this subject by the chairman of the civil-service commission.

In view of the facts that, during a considerable period, the Government of Great Britain has been dealing with administrative problems and abuses in various particulars analogous to those presented in this country, and that in recent years the measures adopted were understood to have been effective and in every respect highly satisfactory, I thought it desirable to have fuller information upon the subject, and accordingly requested the chairman of the civil-service commission to make a thorough investigation for this purpose. The result has been an elaborate and comprehensive report.

The report sets forth the history of the partisan-spoils system in Great Britain, and of the rise and fall of the parliamentary patronage, and of official interference with the freedom of elections. It shows that after long trials of various kinds of examinations those which are competitive and open on equal terms to all, and which are carried on under the superintendence of a single commission, have, with great advantage, been estab lished as conditions of admission to almost every official place in the subordinate administration of that country and of British India. The completion of the report, owing to the extent of the labor involved in its preparation and the omission of Congress to make any provision either