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My anticipation of an early reply from the British Government to the demand of indemnity to our fishermen for the injuries suffered by that industry at Fortune Bay, in January, 1878, which I expressed in my last annual message, was disappointed. This answer was received only in the latter part of April in the present year, and when received exhibited a failure of accord between the two governments as to the measure of the inshore-fishing privilege secured to our fishermen by the Treaty of Washington of so serious a character that I made it the subject of a communication to Congress, in which I recommended the adoption of the measures which seemed to me proper to be taken by this government in maintenance of the rights accorded to our fishermen under the treaty, and towards securing an indemnity for the injury these interests had suffered. A bill to carry out these recommendations was under consideration by the House of Representatives at the time of the adjournment of Congress in June last.

Within a few weeks I have received a communication from Her Majesty's Government, renewing the consideration of the subject, both of the indemnity for the injuries at Fortune Bay and of the interpretation of the treaty in which the previous correspondence had shown the two governments to be at variance. Upon both these topics the disposition towards a friendly agreement is manifested by a recognition of our right to an indemnity for the transaction at Fortune Bay, leaving the measure of such indemity to further conference, and by an assent to the view of this government, presented in the previous correspondence, that the regulation of conflicting interests of the shore fishing of the provincial sea-coasts, and the vessel fishery of our fishermen, should be made the subject of conference and concurrent arrangement between the two governments.

I sincerely hope that the basis may be found for a speedy adjustment of the very serious divergence of views in the interpretation of the fishery clauses of the Treaty of Washington, which, as the correspondence between the two governments stood at the close of the last session of Congress, seemed to be irreconcilable.

In the important exhibition of arts and industries which was held last year at Sydney, New South Wales, as well as in that now in progress at Melbourne, the United States have been efficiently and honorably represented. The exhibitors from this country at the former place received a large number of awards in some of the most considerable de. partments, and the participation of the United States was recognized by a special mark of distinction. In the exbibition at Melbourne, the share taken by our country is no less notable, and an equal degree of success is confidently expected.

The state of peace and tranquillity now enjoyed by all the nations of the continent of Europe has its favorable influence upon our diplomatic and commercial relations with them. We have concluded and ratified a convention with the French Republic for the settlement of claims of the citizens of either country against the other. Under this convention a commission, presided over by a distinguished publicist, appointed, ir pursuance of the request of both nations, by His Majesty the Emperoi of Brazil, has been organized and has begun its sessions in this city A congress to consider means for the protection of industrial property has recently been in session in Paris, to which I have appointed the ministers of the United States in France and in Belgium as delegates The International Commission upon Weights and Measures also contin ues its work in Paris. I invite your attention to the necessity of ai appropriation to be made in time to enable this government to comply with its obligations under the Metrical Convention.

Our friendly relations with the German Empire continue without interruption. At the recent International Exhibition of Fish and Fish eries at Berlin, the participation of the United States, notwithstanding the haste with which the commission was forced to make its prepara: tions, was extremely successful and meritorious, winning for private exhibitors numerous awards of a high class, and for the country at large the principal prize of honor offered by His Majesty the Emperor. The results of this great success cannot but be advantageous to this important and growing industry. There have been some questions raised be tween the two governments as to the proper effect and interpretation of our treaties of naturalization, but recent dispatches from our minister at Berlin show that favorable progress is making toward an understanding, in accordance with the views of this government, which makes and admits no distinction whatever between the rights of a native and a naturalized citizen of the United States. In practice, the complaints of molestation suffered by naturalized citizens abroad have never been fewer than at present.

There is nothing of importance to note in our unbroken friendly re. lations with the governments of Austria-Hungary, Russia, Portugal, Sweden and Norway, Switzerland, Turkey, and Greece.

During the last summer several vessels belonging to the merchant marine of this country, sailing in neutral waters of the West Indies, were fired at, boarded, and searched by an armed cruiser of the Spanish Government. The circumstances, as reported, involve not only a private injury to the persons concerned, but also seemed too little observant of the friendly relations existing for a century between this country and Spain. The wrong was brought to the attention of the Spanish Government in a serious protest and remonstrance, and the matter is undergoing investigation by the royal authorities with a view to such explanation or reparation as may be called for by the facts.

The commission sitting in this city for the adjudication of claims of our citizens against the Government of Spain is, I hope, approaching the termination of its labors.

The claims against the United States under the Florida Treaty with Spain were submitted to Congress for its action at the late session, and

I again invite your attention to this long-standing question, with a view to a final disposition of the matter.

At the invitation of the Spanish Government, a conference has recently been held at the city of Madrid to consider the subject of protection by foreign powers of native Moors in the Empire of Morocco.. The minister of the United States in Spain was directed to take part in the deliberations of this conference, the result of which is a convention signed on behalf of all the powers represented. The instrument will be laid before the Senate for its consideration. The Government of the United States has also lost no opportunity to urge upon that of the Emperor of Morocco the necessity, in accordance with the humane and enlightened spirit of the age, of putting an end to the persecutions. which have been so prevalent in that country of persons of a faith other than the Moslem, and especially of the Hebrew residents of Morocco.

The consular treaty concluded with Belgium has not yet been officially promulgated, owing to the alteration of a word in the text by the Sen. ate of the United States, which occasioned a delay, during which the time allowed for ratification expired. The Senate will be asked to extend the period for ratification.

The attempt to negotiate a treaty of extradition with Denmark failed on account of the objection of the Danish Government to the usual clause providing that each nation should pay the expense of the arrest of the persons whose extradition it asks.

The provision made by Congress, at its last session, for the expense of the commission which had been appointed to enter upon negotiations with the Imperial Government of China, on subjects of great interest to the relations of the two countries, enabled the commissioners to proceed at once upon their mission. The Imperial Government was prepared to give prompt and respectful attention to the matters brought under negotiation, and the conferences proceeded with such rapidity and success that, on the 17th of November last, two treaties were signed at Pekin, one relating to the introduction of Chinese into this country, and one relating to commerce. Mr. Trescot, one of the commissioners, is now on his way home bringing the treaties, and it is expected that they will be received in season to be laid before the Senate early in January.

Onr ministerin Japan has negotiated a convention for the reciprocal relief of shipwrecked seamen. I take occasion to urge once more upon Congress. the propriety of making provision for the erection of suitable fire-proof buildings at the Japanese capital for the use of the American legation, and the court-house and jail connected with it. The Japanese Government, with great generosity and courtesy, has offered for this purpose an eligible piece of land.

In my last annual message I invited the attention of Congress to the subject of the indemnity funds received some years ago from China and Japan. Irenew the recommendation then made that whatever portions of these funds are due to American citizens should be promptly paid, and the residue returned to the nations, respectively, to which they justly and equitably. belong.

The extradition treaty with the Kingdom of the Netherlands, which has been for some time in course of negotiation, has, during the past year, been concluded and duly ratified.

Relations of friendship and amity have been established between the Government of the United States and that of Roumania. We have sent a diplomatic representative to Bucharest, and have received at this capital the special envoy, who has been charged by His Royal Highness, Prince Charles, to announce the independent sovereignty of Roumania. We hope for a speedy development of commercial relations between the two countries.

In my last annual message I expressed the hope that the prevalence of quiet on the border between this country and Mexico would soon become so assured as to justifiy the modification of the orders, then in force, to our military commanders in regard to crossing the frontier, without encouraging such disturbances as would endanger the peace of the two countries. Events moved in accordance with these expectations, and the orders were accordingly withdrawn, to the entire satisfaction of our own citizens and the Mexican Government. Subsequently the peace of the border was again disturbed by a savage foray, under the command of the Chief Victorio, but, by the combined and harmonious action of the military forces of both countries, his band has been broken up and substantially destroyed.

There is reason to believe that the obstacles which have so long prevented rapid and convenient communication between the United States and Mexico by railways are on the point of disappearing, and that several important enterprises of this character will soon be set on foot, which cannot fail to contribute largely to the prosperity of both countries.

New envoys from Guatemala, Colombia, Bolivia, Venezuela, and Nicaragua have recently arrived at this capital, whose distinction and enlightenment afford the best guarantee of the continuance of friendly relations between ourselves and these sister republics.

The relations between this government and that of the United States of Colombia have engaged public attention during the past year, mainly by reason of the project of an interoceanic canal across the Isthmus of Panama, to be built by private capital under a concession from the Colombian Government for that purpose. The treaty obligations subsisting between the United States and Colombia, by which we guarantee the neutrality of the transit and the sovereignty and property of Colombia in the isthmus, make it necessary that the conditions under which so stupendous a change in the region embraced in this guarantee should be effected—transforming, as it would, this isth. mus, from a barrier between the Atlantic and Pacific oceans, into a gate

way and thoroughfare between them for the navies and the merchant ships of the world—should receive the approval of this government, as being compatible with the discharge of these obligations on our part, and consistent with our interests as the principal commercial power of the Western Hemisphere. The views which I expressed in a special message 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 interoceanic 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 offices, 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 relations of the United States with the Empire of Brazil continue to be most cordial, and their commercial intercourse steadily increases, to their mutual advantage.

The internal disorders with which the Argentine Republic has for some time past been afflicted, and which have more or less influenced its external trade, are understood to have been brought to a close. This. happy result may be expected to redound to the benefit of the foreign commerce of that republic as well as to the development of its vast interior resources.

In Samoa, the government of King Malietoa, under the support and recognition of the consular representatives of the United States, Great Britain, and Germany, seems to have given peace and tranquillity to the islands. While it does not appear desirable to adopt as a whole the scheme of tripartite local government, which has been proposed, the common interests of the three great treaty powers require harmony in their relations to the native frame of government, and this may be best secured by a simple diplomatic agreement between them. It would be well if the consular jurisdiction of our representative at Apia were increased in extent and importance so as to guard American interests in the surrounding and outlying islands of Oceanica.

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