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REPORT

OF

THE SECRETARY OF THE INTERIOR.




Department of the Interior
Washington, November 1, 1877.

Sir: I have the honor to submit the following summary of the operations of this department during tho past year, together with such suggestions as seem to me worthy of consideration:


INDIAN AFFAIRS.

The report of the Commissioner of Indian Affairs, which I herewith present, contains an elaborate statement of the transactions of the branch of the public service under his supervision, as well as valuable suggestions concerning the policy to be pursued.

THE SIOUX.

The year opened with a Sioux war, which resulted in the surrender of numerous and important hostile bands, while some of them under the leadership of Sitting Bull sought refuge on British territory. The Ogallalla and Brulé Sioux have recently been removed from tho Spotted Tail and Red Cloud agencies in Nebraska, and are at present on their way to the vicinity of the Missouri River, in accordance with the provisions made by Congress to that end, and with what was believed bo be an agreement with the Sioux themselves, well understood on both sides. The Sioux, however, were reluctant to carry out that understanding, and it was considered unsafe to attempt the movement while the Nez Percé war was going on and the apparent successes of Chief Joseph might have encouraged a spirit of resistance among the more warlike tribes. Thus the removal was delayed, and it was deemed prudent to permit a delegation of Sioux chiefs to visit Washington for the purpose of laying their grievances and wishes before the President in person. The result of the council held here was in so far satisfactory, as the Sioux chiefs, after having rejoined their tribes, used their influence, apparently with success, in silencing opposition to the removal. The wish expressed by the chiefs to be located on White River, in Dakota, will be complied with as soon as the season permits it, and liberal provision should be made to aid them in engaging in agricultural pursuits and the promotion of a higher order of civilization among them. The removal was undertaken after consultation with General Crook, who in a high degree possesses the confidence and affection of these Indians, and it is to be hoped the difficulties of so long a march in an unfavorable season will be successfully overcome.

SITTING BULL.

The presence of the Sioux chief, Sitting Bull, with a large number of followers, on British soil in the immediate vicinity of our northern frontier, threatened to become a constant source of disquietude on the border, and was, therefore, a matter of grave concern both to this government and that of the Dominion of Canada. Early in August last a member of the Canadian Government visited Washington, and at his suggestion, and upon consultation with him, two commissioners, General A. H. Terry, U. S. A., and A. G. Lawrence, esq., were sent to the encampment of Sitting Bull, with the following instructions, dated September 6, 1877:

The President desires you to proceed at your earliest convenience to Fort Benton, and thence to a point on our northern frontier from which the present encampment of the Sioux chief, Sitting Bull, on British territory, is most easily accessible. At the frontier you will be met by a detachment of mounted Canadian police, detailed by the Government of the Dominion of Canada for your protection.

It is the object of your mission, undertaken at the suggestion of the Government of the Dominion, to ascertain what danger there may be of hostile incursions on the part of Sitting Bull and the bands under his command upon the territory of the United States, and, if possible, to effect such arrangements, not unacceptable to the Government of the Dominion, as may be best calculated to avert that danger. To this end you will put yourself in communication with Sitting Bull in such manner as under existing circumstances may seem to you most judicious. In doing so, you will keep the following facts in view: In the month of February last Sitting Bull and his bands engaged in armed hostilities against the United States, and, pursued by our military forces, crossed the boundary-line of the British Possessions for the purpose of escaping from that pursuit. At that time the fugitive Indians appeared to be well armed, but their ammunition was so nearly exhausted that they were no longer able to continue the struggle. Under such circumstances they took refuge on British soil, where the troops of the United States could not follow them without violating the territory of a friendly power. It is reported, and there is good reason for believing, that these hostile Indians have availed themselves of the protection and security thus enjoyed to replenish their stock of ammunition, and thus to enable themselves to resume their hostilities against the United States as soon as they may find it convenient to do so.

According to all recognized principles of international law, every government is bound to protect the territory of a neighboring friendly state against acts of armed hostility on the part of refugees who, for their protection from pursuit, have crossed the frontier. While the Government of Great Britain will be most mindful of this obligation, the President recognizes the difficulties which, in dealing with a savage population, may attend its fulfillment, and he is therefore willing to do all in his power to prevent any interruptions of the relations of good neighborhood and to avert a disturbance of the peace of the border, even to the extent of entering into communication with an Indian chief who occupies the position of a fugitive enemy and criminal.

You are therefore instructed, in the name of the President, to inform Sitting Bull and the other chiefs of the bands of Indians recently escaped into the British Possessions, that they will be permitted peaceably to return to the United States and occupy such reservations as may be assigned to them, and that they will be treated in as friendly a spirit as were other hostile Indians who, after having been engaged with Sitting Bull and his followers in hostilities against the United States, surrendered to our military forces. This treatment, however, can be accorded only on condition that Sitting Bull and all the members of the Indian bands who take advantage of this offer of pardon and protection, when crossing the line from British territory to that of the United States, surrender to our military forces stationed at the frontier all their firearms and ammunition, as well as all their horses and ponies, the military commander permitting them the temporary use of such animals as may be necessary for the transportation of the aged and infirm among the Indians who may be unable to march on foot to the reservations. You will insist upon this condition to its full extent, and not make any promises beyond that of a pardon for the acts of hostility committed as stated above.

Should Sitting Bull and the other chiefs with him express their willingness to return to the United States on these terms, you will notify the commander of the United States forces at ——— of that fact, and instructions will be given for the reception of the Indians at the frontier. In case the Indians refuse to return to the United States upon such terms, you will then break off all communication with them, and the Government of Great Britain will no doubt take such measures as may be necessary to protect the territory of the United States against all hostile invasion.

The commissioners met Sitting Bull and other Sioux chiefs at Fort Walsh, on British territory, and communicated to them the conditions on which their return to the United States would be permitted. The Sioux chiefs refused to accept the terms offered, and declared their determination to remain on British soil, whereupon the commissioners, in pursuance of their instructions, withdrew. Immediately after their withdrawal the Canadian authorities had a conference with the same Sioux chiefs, the results of which were communicated to the commissioners by Colonel McLeod, commanding the Mounted Police, as follows:

In answer to your note I beg leave to inform you that after the interview of the commissioners with the Indians I had a talk with the latter. I endeavored to impress upon them the importance of the answer they ad just made; that although some of the speakers to the commissioners had claimed to be British Indians, we denied the claim, and that the Queen's Government looked upon them all as American Indians, who had taken refuge in our country from their enemies. I pointed out to them that their only hope was the buffalo; that it would not be many years before that source of supply would cease, and that they could expect nothing whatever from the Queen's Government as long as they behaved themselves. I warned them that their decision not only affected themselves but their children, and that they should think well over it before it was too late. I told them that they must not cross the line with a hostile intent; that if they did they would not only have the Americans for their enemies, but also the police and the British Government, and urged upon them to carry my words to their camps, to tell all their young men what I had said, and warn them of the consequences of disobedience, pointing out to them that a few indiscreet young warriors might involve them all in most serious trouble. They unanimously adhered to the answer they had given the commissioners, and promised to observe what I had told them. I do not think there need to be the least anxiety about any of these Indians crossing the line, at any rate not for some time to come.

The object of the commission, “to effect such arrangements as may be best calculated to avert the danger of hostile incursions on the part of Sitting Bull, and the bands under his command, upon the territory of the United States,” and to secure the peace of the border, has, therefore, been successfully accomplished. While Sitting Bull and the other Sioux chiefs with him, in spite of the unusual effort made by this government, refused to place themselves under the control of the United States, the Canadian authorities have not failed to recognize the friendly spirit which prompted, on our part, so extraordinary a step as the opening of communications with a fugitive enemy on foreign soil in order to prevent any interruption of the relations of good neighborhood, and have, with the most commendable promptness, taken such measures as a high sense of their international obligations suggested. Unofficial information has reached us that Sitting Bull and his bands have been removed to a place more distant from the frontier, and it is expected that the Canadian authorities will be entirely successful in preventing hostile incursions upon the territory of the United States, on the part of these Indians.


THE NEZ PERCÉS


The report of the Commissioner of Indian Affairs contains an elaborate statement of the origin, progress, and termination of the Nez Percys war. There seems to be little reason to doubt that this bloody conflict might have been avoided by a more careful regard for the rights of an Indian tribe, whose former conduct had been uniformly peaceable and friendly. The outbreak of hostilities was marked by a number of murders and barbarous outrages on the part of the Indians; but the subsequent conduct of the struggle has become memorable by the extraordinary skill and energy displayed by Chief Joseph, as well as by an almost entire absence of those acts of savage cruelty which ordinarily render Indian warfare so horrible. If any of the perpetrators of the above-mentioned murders have survived, they ought to receive the punishment due to their crimes. It seems at least doubtful whether Chief Joseph can be charged with any responsibility for those atrocities, all of which are reported to have occurred in his absence. His general conduct certainly entitles him to the fullest benefit of the doubt, and to that consideration which is usually accorded to a prisoner of war after an honorable surrender. The captive Nez Perces were, immediately after the termination of the war, moved eastward by the military authorities, and will be held, as long as may be necessary, at a point within easy reach of supplies. The feeling excited among the settlers by the outrages committed at the outbreak of hostilities renders the return of the captives to their old reservation unadvisable. I recommend their settlement in the Indian Territory as soon as circumstances will permit. The defeat of Chief Joseph has undoubtedly had the effect of greatly discouraging the spirit of restlessness, which, during the summer, appeared among other Indian tribes, and of thus lessening the danger of further disturbance.


THE APACHES AND WARM SPRING INDIANS.


After the removal, in June, 1876, of 325 Chiricahua Apaches to San Carlos, the Chiricahua reserve was abolished, and the military commander of Arizona requested to treat as hostile all Indians found in that locality.

Raids by the renegades became frequent; many lives were taken, much property stolen or destroyed, and by February, 1877, the old reign of terror seemed to have returned to the southeastern portion of Arizona.

In March last it was definitely ascertained that not only were the renegades re-enforced by Indians from the Hot Springs reserve, in New Mexico, but also that that reserve was being used as a harbor of refuge for the outlaws. Accordingly, Agent Olum, under instructions from this office, proceeded with 103 San Carlos Indian police to the Hot Springs reserve, and, with the vigorous cooperation of the military commander of New Mexico, succeeded in removing, on the 1st of May, to the San Carlos reservation, 453 disarmed and dismounted Indians who were located on the Gila River.

All other Indians who had belonged to the Hot Springs agency were declared renegades, and the reserve was restored to the public domain.

Although active scouting for renegades was carried on in Southeast Arizona and Southwest New Mexico, raiding to a greater or less extent did not cease throughout the summer.

On the 2d of September a majority of the Hot Springs Indians and a portion of the Chiricahuas, numbering in all about 300, suddenly left the San Carlos reserve and struck a settlement in New Mexico, killing 8 persons and stealing some horses. In two engagements with the San Carlos police, 12 of the fugitives were killed and 43 captured. All available troops in that Territory were promptly put into the field against them, and on the 13th of last month 3 chiefs with 187 Apaches surrendered at Port Wingate, finding themselves unable to successfully carry on war in a country thoroughly occupied by United States soldiers and Indian scouts. These, with 51 who have since surrendered, have been taken to the old Hot Springs reservation, where their final disposition will be decided upon.

THE PONCAS.

Congress at its last session made provision for the removal of the Poncas from their former reservation on the Missouri River to the Indian Territory, resolved upon for the reason that it seemed desirable to get them out of the way of the much more numerous and powerful Sioux, with whom their relations were unfriendly. That removal was accordingly commenced in the early summer. The opposition it met with among the Poncas themselves and the hardships encountered on the march are set forth at length in the report of the Commissioner of Indian Affairs. The Poncas, about 700 in number, were taken to the Quapaw reservation, in the northeastern corner of the Indian Territory, with a view to permanent settlement. But the reluctance with which they had left their old homes, the strange aspect of a new country, an unusually large number of cases of disease and death among them, and the fact that they were greatly annoyed by white adventurers hovering around the reservation, who stole many of their cattle and ponies and smuggled whiskey into their encampments, engendered among them a spirit of discontent which threatened to become unmanageable. They urgently asked for permission to send a delegation of chiefs to Washington to bring their complaints in person before the President, and it was reported by their agent that unless this request be granted there was great danger that they would run away to their old reserve on the Missouri River. To avoid such trouble, the permission asked for was given, and the delegation arrived here on November 7. They expressed the desire to be taken back to their old reservation on the Missouri, a request which could not be acceded to. But permission was granted them to select for themselves, among the lands at the disposal of the government in the Indian Territory, a tract at least equal in size to their old reservation, and they also received the assurance that they would be fully compensated in kind for the log-houses, furniture, and agricultural implements which, in obedience to the behests of the government, they had left behind on the Missouri.

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 government 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 reluctant to leave all this, but when Congress had 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.

INDIAN POLICY.

While thus some progress has been made in the adjustment of difficulties and the danger of disturbance on a large scale seems remote, it would be unwise to lose sight of the lesson taught by experience, that such as to present extraordinary difficulties to civilizing influences. This circumstance alone, however, does not in itself constitute the main difficulty we have to contend with. We are frequently reminded of the fact that the character of our Indians does not materially differ from that of the Indians in the British possessions on this continent, and that nevertheless peace and friendly relations are maintained there between the Indians and the whites. That is true. But the condition of things in the British possessions is in some very important respects essentially different from that which exists in the United States. In the British possessions the bulk of the Indian population occupy an immense area almost untouched by settlements of whites. On that area the Indians may roam about in full freedom, without danger of collision, and the abundance of fish and game furnishes them comparatively ample sustenance. The line dividing the Indians and the whites can be easily controlled by a well-organized body of police, who maintain peace and order. But in the United States we have no longer a dividing line. The “Indian frontier” has virtually disappeared. Our Indian population is scattered over a vast extent of country into which the agricultural settlers, as well as the adventurous element of our people in quest of rapid gain have pushed their skirmishers in all possible directions. Wherever in the far West the enterprise of the whites advances, whites and Indians come into immediate contact and are “in one another's way.” That contact is apt to bring on collisions, especially as the more reckless element of the whites, which abounds in that part of the country, holds the rights and lives of Indians in very light estimation, and can, in many localities at least, scarcely be said to be under the control of law, while in frequent instances also the Indian provokes retribution by following, without restraint, his savage propensities.

There are still other complications aggravating this condition of things. The early colonists on this continent saw in the Indian tribes surrounding them a very formidable power, and naturally entered with them into formal treaty relations. That system has come by inheritance down to our days, when the Indians, under a radical change of circumstances, appear at the same time as “independent tribes,” as “national wards,” and as subjects. It is needless to recount the history of Indian treaties. As white settlements rapidly spread over the country treaties were, in a large number of instances, made only to be broken. When the advance of civilization found them as barriers in its way, they could not stand as finalities, although they were usually called so. That in the frequent and rapid changes to which those treaties were subjected, the Indians sometimes suffered great injustice, no fair-minded man will deny.

In the course of time new difficulties supervened. As the Indians were crowded out of their hunting-grounds their sustenance became precarious, and upon the government devolved the duty to supply them with food and clothing. That duty was and is now performed on a contract system, and through Indian agencies located at a great distance from the seat of the general government, and far-removed from its immediate supervision. Thus tempting opportunities were presented for fraud and peculation, demoralizing the service, and resulting, in many instances, in grievous disappointment and suffering among the Indians. Not seldom the promises made to them failed of the expected performance on account of insufficient appropriations. In this way the Indian has become distrustful of the good faith of the whites.

Taking all these things together: The interspersion of white settlers, reckless adventurers and more or less wild Indians in one another's way; the anomalous and, in some of its features, absurd treaty system with its ever-changing “finalities,” its frequent deceptions, unavoidable misunderstandings and incessant disappointments; the temptations to fraud and peculation in furnishing and distributing supplies; the careless and blundering management of agents, removed from immediate supervision; the sometimes accidental, sometimes culpable non-fulfillment of promises and engagements; the distress and suffering ensuing therefrom, and the comparatively lawless and uncontrollable condition of society in that part of the country which the bulk of the Indian population inhabits, we find in the “Indian question” an array of difficulties, complications, and perplexities, a complete solution of which, in a short period of time at least, appears unattainable. What, under such circumstances, can be done is, to adopt and follow a plan of systematic action calculated to mitigate the evils inherent to the existence of an incongruous population among us, and to confine them within the narrowest possible limits by improving the condition of the Indians as much as it is capable of improvement, and removing the causes of hostile collision between the Indians and the whites.

In my opinion, our efforts should be mainly directed to the following points:

1. The first thing necessary is that we should keep good faith with the Indians in every respect; we should never promise them more than we are able and willing to perform, and then perform what we have promised.

2. The pursuit of hunting is as much as possible to be discouraged among the Indians. The excitement of the chase stimulates their war-like propensities. When the Indians cease to be hunters, they will in a great measure cease to be warriors. To this end they should be permitted to possess only a limited supply of arms and ammunition, and their ponies should be exchanged as much as practicably for cattle.

3. As a number of Indian tribes are still depending, in part at least, upon hunting for their sustenance, their wants must be provided for in another way. They should be gradually gathered together upon a smaller number of reservations where agriculture and cattle-raising can be carried on with success, and where they can easily be supplied with their necessaries until they are self-sustaining.

The Indian Territory has room for most of the southwestern tribes, which should be gradually located there as they come under the control of the government. One or two reservations in the northwest, this side of the mountains, and a similar consolidation of reservations on the Pacific slope, to be determined upon after more minute inquiry into local circumstances, will accommodate the northern Indians. The interspersion of Indians and whites, which is so apt to lead to troublesome collisions, can in this way be considerably limited, and greater facilities will be afforded for the promotion of civilization.

4. While Indians cannot be expected to become successful farmers at once, several tribes have already made appreciable progress in that respect, and others are likely to do so under favorable circumstances and judicious management. It will probably be found that many tribes are more adapted to pastoral pursuits, and in such cases agriculture, although not to be neglected, should be made subordinate to the raising of cattle. All beginnings in such things will necessarily be small and slow, but they should be patiently guided and eucouraged by attentive supervision and liberal aid.

5. The enjoyment and pride of the individual ownership of property being one of the most effective civilizing agencies, allotments of small tracts of land should be made to the heads of families on all reservations, to be held in severalty under proper restrictions, so that they may have fixed homes. Indians who can furnish sufficient evidence that they have supported their families for a certain number of years should be admitted to the benefits of the homestead act, and, if they are willing to detach themselves from their tribal relations, to the privileges of citizenship.

6. To protect the security of life and property among the Indians, the laws of the United States, to be enforced by proper tribunals, should be extended over the reservations, and a body of police, composed of Indians, and subject to the orders of the government officers, should be organized on each of them. It is a matter of experience that Indians thus trusted with official duty can almost uniformly be depended upon in point of fidelity and efficiency.

7. The establishment of schools for the instruction of the young is gradually being extended among the Indian tribes under our control. The advantage to be derived from them will greatly depend upon their discipline and the course of instruction. As far as practicable, the attendance of Indian children should be made compulsory. Provision should be made for boarding children at the schools, to bring them more exclusively under the control of educational influences. One of the most important points is that they should be taught to speak and read the English language. Efforts have been made to establish and teach the grammar of Indian dialects and to use books printed in those dialects as a means of instruction. This is certainly very interesting and meritorious philological work, but as far as the education of Indian children is concerned, the teaching of the English language must be considered infinitely more useful. If Indian children are to be civilized, they must learn the language of civilization. They will become far more accessible to civilized ideas and ways of thinking when they are enabled to receive those ideas and ways of thinking through the most direct channel of expression. At first their minds should not be overburdened with too great a multitude of subjects of instruction, but turned to those practical accomplishments, proficiency in which is necessary to render civilized life possible. In addition to the most elementary schooling, boys should be practically instructed in the various branches of husbandry, and girls should receive a good training in household duties and habits of cleanliness. In this way, a young generation may be raised up far more open to civilizing influences of a higher kind and more fit for a peaceable and profitable intercourse with the white people.

8. At many of the agencies farmers are employed, and salaried by the government. But in some, if not most cases, the farms have been worked by white men, merely to raise crops for supplying the agencies and the Indians. They are to be turned to much greater advantage. The farms should be used in the first place for the instruction of the youths at school. Besides this, the farmers are to visit the farms cultivated by Indians, to give the latter practical instruction in their work and aid them as far as may be in their power.

9. On the reservations the labor of white men is to be dispensed with and Indian labor to be employed as much as possible. To what extent this can be done, under prudent and energetic direction, is shown by the Commissioner of Indian Affairs in his description of the results accomplished by Agent Wilbur. Proper discrimination should be made in the distribution of supplies and annuity goods and the granting of favors between those who work and those who live as idle vagabonds, so that honest effort be encouraged by tangible recognition and reward.

Some of these reforms have for some time been in progress; others are in course of preparation. Their accomplishment requires time and patient labor, and, above all things, an honest and efficient Indian service.

The Indian service has, in some of its branches, long been the subject of popular suspicion. Without attaching undue importance to vague rumors or allegations, it must be said that frequent investigations have shown that suspicion to be not without good reason. Inquiries instituted by myself since I was charged with the conduct of this department have convinced me of this fact. As a result of such inquiries, presumptive evidence of fraudulent practices of a gross character came to my notice, which justified me in handing over a number of cases to the Department of Justice for criminal prosecution as well as civil action. While following the principal object of discovering abuses at present existing, I have thought it my duty to extend, incidentally, such investigations over past transactions, believing it well to impress officers of the government with the fact that they will not escape from their responsibility when they leave their offices, and contractors that neither their plunder nor their persons will be safe, although their accounts may have been closed and the money gone into their pockets. Such a lesson, taught in the most incisive manner, will not fail to have a wholesome effect, and, indeed, it is a most necessary one with regard to the Indian service, whose extensive ramifications render a minute supervision extremely difficult. There is no doubt that fraud in the performance of contracts and dishonest practices in the delivery and distribution of supplies and annuity goods have frequently been the cause of just discontent among the Indians, sometimes resulting in trouble and disaster.

I do not deem the present machinery of the Indian service sufficient for the prevention or discovery of abuses and fraudulent practices. The inspectors and superintendents, who are charged, among other things, with such duty, have in but rare instances been successful in ferreting out the wily expedients resorted to by dishonest contractors or agents. The records of the Indian Office bear out this assertion. When a superintendent or an inspeetor visits an agency, his coming is almost always known beforehand, so that there is time enough to conceal evidences of fraud and mismanagement. It is very like “catching birds with a brass band.” What the Indian Bureau needs, perhaps more than any other branch of the government, is a special service, composed of efficient agents, who, under the immediate control of the department, can move secretly, and can pounce upon the point to be investigated without premonition. I venture to express the hope that Congress will not refuse the appropriation asked for to serve this purpose. A proper use made of such an appropriation will not only improve the character of the service, but also be an efficient measure of economy.

I desire to add that the investigations carried on by this department for the discovery and correction of fraudulent practices are, in many respects, seriously hampered by its want of power to compel the attendance and pay the fees of witnesses and to punish for contempt. We may, therefore, frequently fail in our inquiries, not because the will but because the means are lacking. Congress can exercise that power to its fullest extent, and Congressional investigations may, therefore, become very desirable when the department, for the reasons stated, finds itself unable to go to the bottom of suspected transactions—unless Congress sees fit to invest the department with such authority as is required to accomplish the object, by amending sections 183 and 184, Revised Statutes, so as to enlarge the powers of the Secretary of the

Interior in this respect.

INDIAN AGENTS.

That the office of an Indian agent is a very responsible one, requiring high moral qualities and a superior business capacity, and that a salary of $1,500 a year, without a fair prospect of advancement, is, under ordinary circumstances, inadequate to induce men of such caliber to expose themselves and their families to the discomforts and privations of frontier life, has too frequently been stated by my predecessors in their reports to need repetition here. The consequences to which such false economy is apt to lead need scarcely be described. The report of the Commissioner of Indian Affairs furnishes some interesting illustrations. I cannot too urgently commend to the attention of Congress the gradation in the salaries of Indian agents which he suggests. Even higher salaries than he recommends might be paid, and prove wise economy in the end. The proposed gradation in salaries is not only just in itself, by making pay correspond witb responsibility, but will also have the advantage of holding out to an agent who distinguishes himself in the performance of his duties, the prospect of promotion to a more important and better-paying place. The selection of Indian agents is one of the most difficult tasks of this department. No man of experience in public life need be told how little ordinary recommendations can be depended upon to furnish men well fitted for the discharge of complicated and delicate duties and responsibilities. The present system which permits religious societies to nominate candidates for Indian agencies is, in some respects, undoubtedly an improvement upon the former practice of making appointments in the Indian service on political grounds. But that the present system is by no means perfect, is demonstrated by the frequent necessity of changes. The Indian service is very much in need of the element of stability. An arrangement enabling the department to assign an officer upon his entrance into the service to a place of minor importance and then to promote him in grade of duty and pay according to merit, will, in a great measure, supply that want, and in the course of time give us a body of far more experienced, efficient, and trustworthy agents than any mode of selection heretofore in practice can ever be expected to furnish.

It gives me great pleasure to acknowledge the valuable service rendered by the Board of Indian Commissioners in the supervision of purchases and the examination of contracts and accounts, as well as by some of its members by visiting Indian agencies and tribes, and by inquiring into and giving the department very valuable information concerning their condition and ueeds. The board has not yet made its annual report, and I can therefore not speak of its operations in detail. As soon as that report reaches me, it will be duly brought to the notice of the Executive and of the two houses of Congress. Whenever there was occasion to call upon the War Department for assistance in the management of Indian affairs, that assistance has always been granted with the greatest promptness, and in a spirit of harmonious co-operation which I cannot too gratefully acknowledge.


PUBLIC LANDS.


I have the honor to present the following abstract of the operations of the General Land Office under the laws relating to the survey and disposal of public lands during the fiscal year ending June 30, 1877:

Acres.
Disposal of public lands by ordinary cash sales 740,686. 57
Military bounty land warrant locations under acts of 1847, 1850, 1852, and 1855 97,480.00
Homestead entries 2,178,098.17
Timber-culture entries 520,673.39
Agricultural college scrip locations 1,280.00
Approved to States as swamp 320,935.05
Certified to railroads 700,791.96
Certified for wagon-roads 61,543.18
Certified for agricultural colleges 63,443.04
Certified for common schools 27,973.92
Certified for universities 3,235.83
Internal-improvement selections 50,984.91
Sioux half-breed scrip locations 2,655.29
Chippewa half-breed scrip locations 5,422.94
Special scrip entries under acts of 1858, 1860, and 1872 60,460.45
Entries under the mining laws 14,103.00
Total 4,849,767.70
Disposals for previous year 6,524,326.36
Decrease as compared with sales of preceding year 1,674,558.66
CASH RECEIPTS UNDER VARIOUS HEADS.
Purchase-money of land sold $969,317 04
Homestead fees and commissions 333,428 34
Timber-culture fees and commissions 53,298 00
Agricultural college scrip fees 36 00
Fees in pre-emption and homestead filings 56,979 00
Fees on military bounty land warrant locations 1,868 50
Fees for transcripts furnished by local officers 784 08
Fees on mineral filings and protests 7,321 00
Fees on railroad and wagon-road selections 14,999 80
Swampland indemnity fees 1,384 00
Donation fees 1,635 00
Fees on Valentine scrip and university selections 3,080 87
Fees on transcripts furnished by the General Land Office 8,837 60
Total 1,452,969 23
SURVEYS.
Acres.
Total area of the land States and Territories 1,814,769,920
Surveyed during past fiscal year 10,847,082
Previously surveyed 702,725,655
713,572,737
Remaining unsurveyed 1,101,197,183


TIMBER LANDS.


The subject of the extensive depredations committed upon the timber on the public lands of the United States has largely engaged the attention of this department. That question presents itself in a twofold aspect: as a question of law and as a question of public economy. As to the first point, little need be said. That the law prohibits the taking of timber by unauthorized persons from the public lands of the United States, is a universally known fact. That the laws are made to be executed, ought to be a universally accepted doctrine. That the government is in duty bound to act upon that doctrine, needs no argument. There may be circumstances under which the rigorous execution of a law may be difficult or inconvenient, or obnoxious to public sentiment, or working particular hardship; in such cases it is the business of the legislative power to adapt the law to such circumstances. It is the business of the Executive to enforce the law as it stands.

As to the second point, the statements made by the Commissioner of the General Land Office, in his report, show the quantity of timber taken from the public lands without authority of law to have been of enormous extent. It probably far exceeds in reality any estimates made upon the data before us. It appears, from authentic information before this department, that in many instances the depredations have been carried on in the way of organized and systematic enterprise, not only to furnish timber, lumber, and fire-wood for the home market, but, on a large scale, for commercial exportation to foreign countries.

The rapidity with which this country is being stripped of its forests must alarm every thinking man. It has been estimated by good authority that, if we go on at the present rate, the supply of timber in the United States will, in less than twenty years, fall considerably short of our home necessities. How disastrously the destruction of the forests of a country affects the regularity of the water supply in its rivers necessary for navigation, increases the frequency of freshets and inundations, dries up springs, and transforms fertile agricultural districts into barren wastes, is a matter of universal experience the world over. It is the highest time that we should turn our earnest attention to this subject, which so seriously concerns our national prosperity.

The government cannot prevent the cutting of timber on land owned by private citizens. It is only to be hoped that private owners will grow more careful of their timber as it rises in value. But the government can do two things: 1. It can take determined and, as I think, effectual measures to arrest the stealing of timber from public lands on a large scale, which is always attended with the most reckless waste; and, 2. It can preserve the forests still in its possession by keeping them under its control, and by so regulating the cutting and sale of timber on its lands as to secure the renewal of the forest by natural growth and the careful preservation of the young timber.

With regard to the point first mentioned, I call attention to the elaborate statement made by the Commissioner of the General Land Office in his report concerning the methods followed in enforcing the law against timber depredations hitherto. It appears that those methods have, in a great measure, been unavailing in arresting the evil, and upon mature consideration of the subject, the conclusion was reached by this department that an important change was imperatively demanded by the public interest. It was found that the “stumpage system” formerly in use, and the practice of compromising with the depredators, which uniformly left tempting profits to the latter, tended rather to encourage the depredations than to stop them, and that the only way to arrest the depredations was by seizing the stolen property wherever found and by punishing the depredators. My views on this subject, and the policy adopted and carried out by this department, were set forth in a letter addressed to the honorable the Attorney-General, dated August 29, as follows:

* * * * * I avail myself of this opportunity to state the rule of action I have adopted for this and similar cases.

While it is my desire to dispose of the logs seized by the officers of the Government on terms as advantageous as possible to the United States, it is the principal object of the operations of this department, recently set on foot, not only to bring money into the public treasury, but to put an end to the timber depredations committed on the public lands. To this end, it is above all things necessary that the depredators be effectually deprived of every possibility of deriving any benefit or profit from the wrongful acts they have committed. As long as they are permitted to hope that even after the seizure by Government officers of the timber wrongfully taken from the public lands, they may by way of compromise acquire rightful possession of the logs on terms profitable to themselves, the temptation to continue the depredations will not cease to exist, and the depredations will go on. It is for this reason that I have directed that the stumpage system hitherto prevailing be discontinued; for the same reason I withhold my approval from every compromise which would permit the logs seized to pass into the possession of the depredators with any chance of profit; and I insist upon the current market-price of the logs at the place where they are held.

If in following this rule small lots of logs should remain unsold at places where competition is not active, or in cases where the trade combines against the Government, that loss will be trifling compared with the great advantage gained if by strict adherence to this rule the depredations are terminated. I desire to make those who hitherto have carried on these depredations with profit understand that in attempting to steal timber from the public lands they will in any event lose the value of their labor and their expenses, and expose themselves to criminal prosecution.

With regard to the criminal prosecution of depredators, I would recommend that they be not confined to those mostly poor persons who actually cut timber on public lands with their own hands, but that they be directed as well and principally against the parties who are found to have organized and directed the stealing of timber on the public lands on a large scale and derived from that criminal practice the greatest profit.

As is shown by the Commissioner of the General Land Office in his report, a considerable number of suits were instituted in different parts of the country, some of which have already been tried and decided in favor of the government. I have reason to believe that the measures taken by the department have already stopped the depredations on the public lands to a very great extent, and that, if continued, they will entirely arrest the evil. A comparatively small number of watchful and energetic agents will suffice to prevent in future, not, indeed, the stealing of single trees here and there, but at least depredations on a large scale. To this end, however, it is necessary that Congress, by an appropriation for this purpose, to be immediately available, enable this department to keep the agents in the field, and also to provide a more speedy and effective system for the seizure and sale of logs, lumber, or turpentine, cut or manufactured from timber on the public lands, than is now provided by existing laws. I would also recommend that section 4751 of the Revised Statutes be so amended as to provide that all penalties and forfeitures incurred under existing laws for cutting timber on the public lands, except trespasses committed on lands reserved for naval purposes, shall be sued for, recovered, and accounted for under proper regulations by the Secretary of the Interior.

The enforcement by this department of the policy above stated has called forth remonstrance from several parts of the country where seizures were made. Lumber-merchants, saw-mill owners, and timber operators in some of the timber districts complained that private property had been or was apt to be seized together with logs wrongfully taken from the public lands of the United States, and that, by the proceedings carried on, business in certain localities would be severely injured and many laboring people put out of work. The agents of this department are instructed to use the utmost care in respecting private property; and, as far as the department is informed, those instructions have, a very few trifling and promptly corrected mistakes excepted, been strictly obeyed. As to the injury done to business, if that business consists in wrongfully taking timber from the public lands of the United States and manufacturing it into lumber and selling it, it is just the business which it is the duty of this department to suppress for the protection of the public interest.

Other complaints came from some of the mining States and Territories, setting forth that the majority of their lands not having been surveyed nor being adapted to agriculture, and the timber lands not being open to purchase, the people of those States and Territories cannot obtain the timber necessary for their mining operations and smelting-works, nor even fuel for their homes, unless they take it from the public lands. This complaint is certainly entitled to consideration, and, with due regard for the equities of the case, the department has abstained from all criminal prosecutions and caused seizures to be made or suits commenced only where timber had been taken from the public lands in large quantities for sale to railroad companies or smelting-works, or the supply of the market on a large scale. In such cases, also, the plea has been made that railroad-ties, building-timber, and tire-wood for running smelting-works could not be obtained in any other way, except from a great distance at large expense. This is true; but it is also true that those who have supplied themselves, without authority of law, from the public lands should at least be held to pay a fair price for the property so taken, as that kind of property must be paid for elsewhere, and for this the department affords them an opportunity until by proper legislation they are enabled to obtain the necessary supply of timber and fire-wood in a legal way.

Moreover, nowhere is a wasteful destruction of the forests fraught with more dangerous results than in mountainous regions. The timber grows mostly on the mountain-sides, and when these mountain sides are once stripped bare, the rain will soon wash all the earth necessary for the growth of trees from the slopes down into the valleys, and the renewal of the forests will be rendered impossible forever; the rivulets and water-courses, which flow with regularity while the forest stands, are dried up for the greater part of the year, and transformed into raging torrents by heavy rains and by the melting of the snow, inundating the valleys below, covering them with gravel and loose rock swept down from the mountain-sides, and gradually rendering them unfit for agriculture, and, finally, for the habitation of men. Proper measures for the preservation of the forest in the mountainous regions of the country appear, therefore, of especially imperative necessity. The experience of parts of Asia, and of some of the most civilized countries in Europe, is so terribly instructive in these respects that we have no excuse if we do not take timely warning.

To avert such evil results, I would suggest the following preventive and remedial measures: All timber-lands still belonging to the United States should be withdrawn from the operation of the pre-emption and homestead laws, as well as the location of the various kinds of scrip.

Timber-lands fit for agricultural purposes should be sold, if sold at all, only for cash, and so graded in price as to make the purchaser pay for the value of the timber on the land. This will be apt to make the settler careful and provident in the disposition he makes of the timber.

A sufficient number of government agents should be provided for to protect the timber on public lands from depredation, and to institute to this end the necessary proceedings against depredators by seizures and by criminal as well as civil action.

Such agents should also be authorized and instructed, under the direction of the Department of the Interior or the Department of Agriculture, to sell for the United States, in order to satisfy the current local demand, timber from the public lands under proper regulations, and in doing so especially to see to it that no large areas be entirely stripped of their timber, so as not to prevent the natural renewal of the forest. This measure would enable the people of the mining States and Territories to obtain the timber they need in a legal way, at the same time avoiding the dangerous consequences above pointed out.

The extensive as well as wanton destruction of the timber upon the public lands by the willful or negligent and careless setting of fires calls for earnest attention. While in several, if not all, of the States such acts are made highly penal offenses by statute, yet no law of the United States provides specifically for their punishment when committed upon the public lands, nor for a recovery of the damages thereby sustained. I would therefore recommend the passage of a law prescribing a severe penalty for the willful, negligent, or careless setting of tires upon the public lands of the United States, principally valuable for the timber thereon, and also providing for the recovery of all damages thereby sustained.

While such measures might be provided for by law without unnecessary delay, I would also suggest that the President be authorized to appoint a commission, composed of qualified persons, to study the laws and practices adopted in other countries for the preservation and cultivation of forests, and to report to Congress a plan for the same object applicable to our circumstances.

I am so deeply impressed with the importance of this subject, that I venture to predict, the Congress making efficient laws for the preservation of our forests will be ranked by future generations in this country among its greatest benefactors.


DESERT LANDS.


A large majority of the lands west of the one hundredth meridian are unfit for agricultural purposes without artificial irrigation, and the area on which artificial irrigation appears possible is very small. The homestead and pre-emption laws are therefore practically inapplicable to lands of that class, for the simple reason that agricultural settlement on small subdivisions is impossible. Extensive tracts on the “plains,” however, can be made useful as pasturage for the raising of cattle; in fact, they are being used for that purpose on a large scale. The stock-raising interest on the plains is gaining immense proportions, but it is carried on upon the public domain without the authority as well as without the protection of law, and the government derives no benefit from such use of the public lands. Some system should be devised to make these lands a source of public revenue, and to put the enterprise of the citizens engaged in such pursuits upon a legal basis. The government directors of the Union Pacific Railroad quote, in their annual report to this department, a letter from a gentleman engaged in cattle-raising on the plains, of which the following is an extract:

Under existing laws, one man can only attain title to one section of land in a body within the Pacific Railroad limits, i. e., a man can purchase a full section from the railroad company, but it is surrounded on all sides by government land, which is only open to homesteads and pre-emptions. It has been fully demonstrated that lands west of the one hundredth meridian are only fit for grazing purposes, and can only be utilized as grazing-lands when held in large tracts or ranges. The quantity of land required to support an animal by grazing alone is so great that it would be impossible to purchase the lands at the government price, or at any price that would look reasonable. The result is, that no lands are sold, and the stock-raisers occupy the lands without any legal rights, while the government and the railroad company get no compensation. One evil that grows out of this system is, that the stock-grower, having no defensible right to his range, does nothing toward improving or fencing it. His buildings and corrals are of the most temporary nature, and he is prepared at any time to move his herds wherever better ranges or less-crowded pastures offer. * * * *

I think the following plan would entirely counteract all the evils mentioned, and would make a return to government and railroad company from lands that otherwise will always remain unsold and valueless. The government and railroad company jointly lease to responsible stock-growers all lands lying west of the one hundredth meridian of longitude in blocks of, say, from 50 to 500 square miles, at such an annual rental, and for such term of years, and with such other restrictions as will best protect the interest of the government and railroad company, and will give the stock-raiser such a right to his range as will protect him from encroachment, and warrant him in fencing his range, besides making permanent investments in corrals and ranch buildings. The arguments in favor of some such plan as this are so many, and the objections so few, that it seems to me only necessary to have it presented to Congress in proper form to insure its adoption. The enormous increase of the cattle-interest on the western plains, and the present chaotic state of the grazing system, demand that some intelligent action should be taken at once.

I concur with the writer of this letter as to the general object in view with regard to lands not irrigable. It appears to me that the system of leasing those lands would be preferable to that of selling them in large bodies, for the reason that it would leave open to the government another disposition of them in the future, if such should become advisable. Instead of the suggested plan of leases to be made “jointly” by the government and the land-grant railroad companies to stock-raisers, I would recommend that an arrangement be made with such railroad companies by which in desert-land regions the latter receive the even sections in addition to the odd sections on one side of the road, and release to the government the odd sections on the other, so that by the government as well as the railroad companies the land on either side of the roads be held in a solid body. If the system of leasing desert lands not irrigable be adopted, care should be taken so to regulate it by law as to prevent wealthy capitalists from obtaining temporary possession of very large tracts to the exclusion of stock-raisers of small means, especially in the vicinity of the great lines of transportation. It would be very questionable policy to lease “blocks” of so large a size as 500 square miles, to one party, as the writer of the letter above quoted suggests. While the homestead law is practically inapplicable to desert lands, its general object should not be lost sight of. It is a matter of public interest, not only that there be as much stock raised, but also that there should be as many stock-raisers accommodated, as possible, on the public lands of that description.

I would respectfully ask that the attention of Congress be invited to this important subject.


DESERT-LAND LAW.


Congress, at its last session, passed an act to provide for the sale of desert lands in certain States and Territories. This act provides—

First. That citizens of the United States, and persons of certain specified qualifications, may file with the register and receiver of any land-district in which desert land is situated, a declaration of intention under oath, to reclaim within three years thereafter, by irrigation, a tract of desert land, surveyed or unsurveyed, not exceeding one section; and that upon payment of twenty-five cents per acre the applicant shall acquire an inchoate right thereto.

Second. That at any time thereafter within the period above named, upon making satisfactory proof to said register and receiver of the reclamation of said tract of land, in the manner aforesaid, and the payment of the additional sum of one dollar per acre, the applicant shall be entitled to a patent for said tract

Third. That all lands, exclusive of timber and mineral lands, which will not, without irrigation, produce some agricultural crop, shall be deemed desert lands.

While it is desirable that desert lands should be reclaimed for agricultural purposes by irrigation, and that proper encouragement be offered to that end, a wise regard for the public interests does not permit, wherever there is public land capable of successful cultivation in small farms, and of thus furnishing homesteads for people of limited means, that extraordinary facilities should be given to the capitalist to acquire such land for the formation of large estates. It is believed that the proof required by the above-named act, as to the quality of the lands, is not sufficient to prevent lands not desert from being acquired under it, while the entire absence of any provision prescribing what portion of land in the tract entered shall be irrigated, the cultivation and improvements which shall constitute reclamation, the penalties or forfeitures for abandonment, or sale of the applicant's interest before making final proof and payment, renders the act liable to be taken advantage of for objects not contemplated by it nor compatible with the public interest.

I therefore recommend that the act be so amended as to require, before the entry is allowed, that the desert character and quality of the tract sought to be entered shall be established by competent testimony to the satisfaction of the register and receiver of the district in which the land is situated, after notice by publication for four successive weeks to adverse claimants, if any there be; that the quantity or portion of the land in the tract to be irrigated, cultivated, and improved shall be specifically defined; that a neglect or failure to irrigate and improve the quantity or portion of the land in said tract specified, for the period of six months at any one time, shall be considered an abandonment of the same.

While a party who has made an entry under said law has no more right to sell or contract to sell, or in any manner encumber the right or interest which he has acquired, than a homestead or pre-emption settler has under either the homestead or pre-emption laws before final proof, still, as there seems to be some misapprehension as to the rights of applicants on this subject, I would recommend that the law be so amended as expressly to prohibit the selling or contracting to sell, or encumbering of the right or interest which the applicant acquires, until final proof and payment therefor has been made; and that, upon satisfactory evidence being produced of the violation of such prohibition, the applicant shall be deemed to have forfeited all his right and interest therein, and thereupon his entry shall be canceled.


PRIVATE LAND-CLAIMS.


The enactment of some law providing a more speedy settlement of the private land-claims in the territory (except California) acquired from Mexico by the treaty of Guadalupe Hidalgo in 1848, and the Gadsden treaty of 1853, is imperatively demanded. For the purpose of carrying out the provisions of said treaties, an act of Congress, approved July 22, 1854, charged the surveyor-general of the Territory of New Mexico with the duty of ascertaining and reporting to Congress the origin, nature, and extent of all private claims within his district, the title to which were derived from the Spanish or Mexican Government. The provisions of this act were subsequently extended to the Territories of Arizona and Colorado, (now the State of Colorado.)

During the twenty-three years in which this law has been in force, the surveyor-general of New Mexico has reported to Congress for confirmation one hundred and twenty-seven of said claims, of which number seventy-one have been confirmed, leaving fifty-six now pending before that body for confirmation.

It is impossible to state accurately the number of these claims still remaining unsettled; but I think it is safe to state that there are at least one thousand, and, at the rate at which they have heretofore been settled and determined, it is impossible to foretell when the last of them will be finally adjudicated. In the mean time, a cloud is cast upon titles perfect in themselves, a strong incentive is offered for the manufacture of fraudulent title-papers, witnesses die or remove to parts unknown, the ancient records upon which the claims are based are lost or defaced, the difficulties in detecting frauds and determining the validity of titles are multiplied, and the probability that many fraudulent claims may escape detection is increased.

Many of these claims are for a given quantity of land, within much larger exterior bounderies, yet by the act above mentioned the larger quantity is held in a state of reservation until the grant is finally adjusted, and thus thousands of acres of valuable lands are kept out of the market for an indefinite period, and this, too, whether the claim is genuine or fraudulent.

Congress has no doubt acted wisely in refusing thus far to confirm any greater number of said claims. Some of those already confirmed have been found, upon final survey, to contain a quantity of land largely in excess of the quantity originally intended.

The same act which provided the present system of ascertaining and determining the validity of these claims also extended the public-land system to the Territory within which they are situated, and the conflict arising from the want of harmony between the two systems has been the cause of much difficulty and strife between the grant claimants and settlers. This is especially true in the Territory of New Mexico.

The complaints which have reached me during the last few months, growing out of the difficulties arising from these conflicting systems, induce me to most earnestly recommend the passage of an act providing for the appointment of a commission, with full power to hear and determine the validity, subject to an appeal to the United States courts, of all the claims within the Territory named.

I desire also to invite special attention to the fact that a large number of the grants of the public lands made to aid in the construction of railroads, and of various works of internal improvement, have expired by limitation.

The lands embraced within the limits of these grants have, in most cases, been withdrawn from sale and disposal by the government, and must necessarily remain in that condition until some action is taken to declare a forfeiture of the grant, and restore the lands to the public domain.

The Supreme Court of the United States has decided (see Schulenburg vs. Harriman, 21 Wall., page 44) that where a grant of land is made, and acquires precision by definite location, so that the right to specific tracts vests in the grantee, it will continue until some legislative or judicial action is taken to declare a forfeiture, notwithstanding the time prescribed for the performance of the conditions subsequent may have expired.

A less expensive and more expeditious mode of disposing of these lapsed grants would be to authorize the Land Department, by an act of Congress, under proper restrictions and limitations, to take possession of the lands in the name of the United States, and declare them subject to sale and disposal after a proper notice by publication.


SURVEYS.


I respectfully invite attention to the recommendations made by the Commissioner of the General Land Office concerning the surveys of public lands. He suggests: “1. The consolidation of all the offices of surveyors-general into one, which shall be located in Washington. 2. The abolition of the contract system. 3. The appointment of a surveyor-general of the United States, who shall be authorized to appoint as many assistants as may be required to make the surveys as fast as may be deemed necessary or provided by law.”

I fully concur with the Commissioner in these recommendations, is the experience of this department that the present system of conducting surveys has proved to be an extensive machinery for spending appropriations without a corresponding benefit to the country. Large sums have been wasted in laying out the desert into small farm-lots. A reorganization of this branch of the service, for reasons of economy as well as to facilitate a more direct supervision of the work done, appears very desirable. The presentation of the subject in the report of the Commissioner is respectfully commended to the consideration of Congress.


RAILWAYS.


The facts and figures herein set forth are compiled from the annual reports of the companies.

The capital stock of the Union Pacific Railroad Company amounts to $36,762,300, and has all been paid in. Certificates for full-paid stock to the number of 367,450 shares, of $100 each, have been issued, and are outstanding. The receipts for the year ending 30th June, 1877, were, from transportation of passengers, $4,237,952.58; of freight, $8,036,621.87; and from miscellaneous sources, $1,444,769.37; total, $13,719,343.82. These figures include “the amounts earned from, but withheld by, the United States, for transportation of its passengers, freight, and mails.” The expense of operating the road for the year, was $5,402,252.24; leaving net earnings, $8,317,091.58. The construction-accounts of the company, including some unsettled accounts with contractors, show the cost of the road at $117,334,256.10. The total funded indebtedness (including the government loan of $27,236,512) of the company is $78,733,712.

The amount of stock of the Central Pacific Railroad Company subscribed is $62,608,800, of which $54,275,500 has been paid. The receipts for the year ending 30th June, 1877, from transportation of passengers, were $5,563,870.07; and of freight, $10,095,349.87; total, $15,659,219.94. The operating expenses of the road for the year were $8,326,614.21; leaving net earnings to the amount of $7,332,605.73. At the close of said year the indebtedness of the company amounted to $94,339,500.01; of which $27,855,680 is due to the United States. This company embraces, by consolidation, (besides the original Central Pacific Company,) the Western Pacific, the California and Oregon, the San Francisco, Oakland, and Alameda, and the San Joaquin Valley Companies.

Stock of the Central Branch Union Pacific Railroad Company to the amount of $1,000,000, has been subscribed, of which $980,600 has been paid. The receipts for the year ending June 30, 1877, were, from transportation of passengers, $40,401.88; and of freight, $149,947.84; total, $190,349.72. The amount expended in said year for running expenses and repairs, was $180,467.72; leaving net earnings $9,882. The road and fixtures have cost $3,763,700. The company's indebtedness, in addition to the government loan, and first mortgage of $1,600,000, and interest unpaid, is $60,000.

The amount of stock of the Kansas Pacific Railroad Company allowed by law is $10,000,000. Of this $9,689,950 has been subscribed and paid. The receipts for the year ending June 30, 1877, were: From transportation of passengers, $967,969.80; of freight, $2,032,361.36; miscellaneous, $18,700.30; total, $3,019,031.46. Total expenses for the year, $1,674,140.42; leaving net earnings, $1,344,891.04. The cost of construction and equipment of 673 miles (main and branch line) is $34,359,540.66. The funded debt of the company is $28,589,100, of which $6,303,000 is due to the United States. There are other liabilities to the amount of $3,115,698.79, making the entire debt $31,704,798.79. The earnings and expenses, as given in this statement, from July 1, 1876, to November 20, 1876, are taken from the books of the company; those from November 21, 1876, to June 30, 1877, are taken from the books of the receivers. The road went into the hands of receivers on the 20th November, 1876.

Stock of the Sioux City and Pacific Railroad Company to the amount of $4,478,500 has been subscribed, of which $1,791,400 has been paid. The receipts for the year ending 30th June, 1877, from transportation of passengers, were $86,033.11; of freight, $205,898.36; from express, $2,784.71; and from miscellaneous sources, $5,831.21; total, $300,546.39. The expenses of the road and fixtures during said year were $285,366.64, leaving net earnings, $15,179.75. The bonded indebtedness of the company is $3,256,320, of which $1,628,320 is due to the United States. The floating debt is $69,955.29.

Stock of the Southern Pacific Railroad Company, of California, to the amount of $38,122,000 has been subscribed, of which $36,763,900 has been paid. The amount received for transportation of passengers for the year ending 30th June, 1877, was $1,646,693.49; of freight, $1,883,900.46; total, $3,530,593.95. The expenses of the road and fixtures for said year, were $1,724,174.41, leaving net earnings $1,806,419.54. The bonded indebtedness of the company is $29,300,000. The construction of additional portions of this road has steadily progressed since the date of the company's last annual report. There have been constructed and brought into operation during the year ending 30th June, 1877, 253.78 miles. This whole distance has been laid with steel rails, weighing not less than 50 pounds per linear yard. The company now has in operation 711.95 miles of road. On the 25th of January last, your predecessor accepted 20 miles of this road, beginning at Goshen and running in a westerly direction; on the 21st February last, he accepted another section of 20 miles, beginning at a point in the N. E. ¼ of section 2, T. 19 S., R. 20 E., Mount Diablo base and meridian, and running in a southwesterly direction; and on the 2d March, he accepted 78.59 miles, beginning at a point in the N. W. ¼ of section 3, T. 2 N., R. 15 W., San Bernardino base and meridian, and running northerly.

The Northern Pacific Railroad Company was reorganized on the 29th of September, 1875, under a plan which had been adopted by the holders of the company's bonds, and under which the company's mortgage was foreclosed. On the 12th of August preceding, all the company's property and franchises were sold under a decree of the United States district court for the southern district of New York, and purchased by a committee of the bondholders for the account of all the holders of the company's bonds and stock, pursuant to the provisions of said plan. This plan of reorganization, approved and confirmed by the said district court, provided for the conversion of the outstanding bonds of the company into “preferred stock,” and its stock into “common stock.” Up to June 30, 1877, there had been issued of preferred stock to bondholders who had surrendered their bonds for conversion, and also in settlement of claims and salaries, the amount of $36,609,245.95. Of common stock, there had been issued, to the same date, 139,453 shares, of $100 each. The company is operating 450 miles of its road from Duluth, at the west end of Lake Superior, to Bismarck; 105 miles from Kalama to Tacoma, Washington Territory; and 17 miles from Tacoma toward Wilkeson, 31 miles from Tacoma, to which point it was expected that the road would be finished by the 20th October; and which, the president of the company informs me, is now completed. The road is definitely located from the mouth of Heart River, on the Missouri, to the mouth of Glendive Creek, on the Yellowstone, a distance of 205 miles. Between the last-named point and the junction of the Deer Lodge and Little Blackfoot Rivers, Montana Territory, the line has not been definitely fixed, though it will probably follow the Yellowstone as far as the mouth of Porcupine Creek, a distance of 200 miles from the mouth of Glendive Creek. In Washington Territory the branch and main line both terminate at Tacoma, on Puget Sound. The cost of surveys during the year ending 30th June last was $11,785, making the total cost of surveys $1,124,728.55. This includes the purchase of the right of way. The amount received from transportation of passengers for the year ending 30th June, 1877, was $283,915.78; of freight $663,203.05; from miscellaneous sources $63,930.60; total $1,011,049.43. The operating expenses for the year were $477,451.40; leaving net earnings $533,598.03. The total cost of construction and equipment of the road to that date was $19,421,977.56. The company's indebtedness to said date was $309,720.81. As an offset to this debt the company had bills receivable, balances due from other railroad and transportation companies, and from the United States, $229,100.54; leaving a net indebtedness of $80,620.27.

Stock of the Atlantic and Pacific Eailroad Company to the amount of $19,760,300 has been subscribed and paid. This company's railroad is completed, with the telegraph line, from Pacific, Mo., to Vinita, Indian Territory, a distance of 327¼ miles, and there has been no further construction of the company's line since its report of June 30, 1876. The cost of the surveys of the road to June 30, 1877, is $323,927.36. That portion of the road lying in the State of Missouri was, on the 8th of September, 1876, sold to the Saint Louis and San Francisco Railway Company, with all its franchises, equipments, and other property pertaining thereto, by the foreclosure of the second mortgage thereon, and the latter company has been operating the part of said road lying west of the State of Missouri since that time. Hence there have been no receipts from passengers or freight by said Atlantic and Pacific Railroad Company to report. The cost of the road and fixtures is $37,368,789.64. The bonded indebtedness for which the company remains liable is the first-mortgage railroad and land-grant bonds.

Stock of the Texas and Pacific Railway Company to the amount of $50,000,000 is authorized by law, of which $7,483,400 has been issued. The receipts for the year ending 30th June, 1877, were, from transportation of passengers, $531,385.27; of freight $1,468,694.63; from express $20,323.37; mail $31,035; telegraph $14,494.32; miscellaneous $4,706; total $2,070,638.59. The expenses for said year were, for conducting transportation $442,170; motive power $310,476.44; maintenance of way $444,105.96; maintenance of cars $135,484.79; general expenses $49,749.37; total $1,381,986.56; leaving net earnings $688,652.03. The entire indebtedness of the company is $19,264,684.99. There are 443.86 miles of the main line of this road in operation, (and 36.94 miles of sidings,) 111 miles of which has been completed since the date of their last report. On the 8th March last you accepted 127 miles of this company's road.

Denver Pacific Railroad stock to the amount of $4,000,000 has been subscribed and paid, being the total amount authorized by law. The receipts for the year ending 30th June, 1877, were, for transportation of passengers, $161,722.96; of freight, $171,165.29; miscellaneous, $2,880,65; total, $335,768.90. The expenses for said year were $189,370.20; leaving net earnings $146,398.70. The cost of construction and equipment of the road (106 miles) has been $6,495,350. The indebtedness of the company is $2,595,829.91.


INDEBTEDNESS OF THE RAILROAD COMPANIES TO THE UNITED STATES.


Under the act of 1st July, 1862, and 2d July, 1864, subsidy bonds were issued by the United States to six railway companies (Central Pacific, Kansas Pacific, Union Pacific, Central Branch Union Pacific, Western Pacific, and Sioux City and Pacific) to the amount of $64,623,512. These bonds, having thirty years from date to run, will mature, some in 1896, others in 1897, and others in 1898. The semi-annual interest paid on them will amount, at maturity of the bonds, to $116,322,321.60 at simple interest, and to $316,112,571.79 if compounded, or, the principal added thereto, $180,945,833.60 and $380,736,083.79 respectively.


WHAT THE PACIFIC RAILROAD COMPANIES HAVE PAID THE GOVERNMENT.


Section 6 of the act approved July 1, 1862, provides that “all compensation for services rendered for the government shall be applied to the payment of said bonds and interest until the whole amount is fully paid.” This, however, was amended by section 5 of the act approved July 2, 1864, which provides that “only one-half of the compensation for services rendered for the government by said companies shall be required to be applied to the payment of the bonds issued by the government in aid of the construction of said roads;” which amendment was confirmed by section 9 of the act approved March 3, 1871, enacting “that the Secretary of the Treasury is hereby directed to pay over in money to the Pacific railroad companies * * * one-half of the compensation * * * for * * * services heretofore or hereafter rendered.”

The amount of one-half of transportation-accounts for carrying mails, troops, supplies, &c, which has not been paid to the companies, but which has been applied by the government to the payment of their indebtedness, and covered into the Treasury for that purpose, to October 31, 1877, is as follows, viz:

Union Pacific Railroad Company  $3,657,139 95
Central Pacific Railroad Company 1,423,555 74
Kansas Pacific Railroad Company  $1,307,044 31
Western Pacific Railroad Company 9,365 75
Sioux City and Pacific Railroad Company 34,391 46
Central Branch, Union Pacific Railroad Company  39,700 13
Total 6,471,197 34

The amount of one-half of the same accounts, which has not been paid to the companies, but withheld under provision of section 2 of the act approved March 3, 1873, whereby the Secretary of the Treasury was directed to withhold all payments, &c, and also under a stipulation entered into as regards the Union Pacific Railroad Company, whereby the judgment against the United States in case No. 571, October term, 1875, of the Supreme Court, was not to be collected until after final judgment in the suit to recover sums claimed to be due to the United States as the five per cent. of net earnings, and which has been applied by the government to the payment of their indebtedness and covered into the Treasury for that purpose, is as follows, viz:

Union Pacific Railroad Company $1,299,652 00
Central Pacific Railroad Company 708,611 62
Kansas Pacific Railroad Company 224,635 75
Western Pacific Railroad Company 1 25
Sioux City and Pacific Railroad Company 31,267 34
Central Branch, Union Pacific Railroad Company  21,048 22
Total 2,285,216 18
Total amount covered into the Treasury 8,756,413 52

In addition to this sum, the amount of transportation-accounts rendered by the companies for services performed, and which remained unpaid October 31, 1877, for lack of proper appropriations or for reason that they were in process of settlement, is quite large, and, from the best information to be obtained, is as follows, viz:

Union Pacific Railroad Company $1,600,000
Central Pacific Railroad Company 450,000
Kansas Pacific Railroad Company 400,000
Western Pacific Railroad Company
Sioux City and Pacific Railroad Company 12,000
Central Branch, Union Pacific Railroad Company  3,000
Total 2,465,000

Total amount paid and to be paid as one-half of transportation-accounts to October 31, 1877, is, on above basis, $7,703,697.34.

The indebtedness of the companies to the government to October 31, 1877, is as follows, viz:

Railroad company. Principal. Interest. Total.




Union Pacific  $27,236,512 00  $10,740,648 38  $37,977,160 38
Central Pacific 25,885,120 00 12,519,447 11 38,404,567 11
Kansas Pacific 6,303,000 00 2,454,633 03 8,757,633 03
Western Pacific 1,970,560 00 988,891 54 2,959,451 54
Sioux City and Pacific 1,628,320 00 845,009 89 2,473,329 89
Central Branch, Union Pacific  1,600,000 00 945,059 91 2,545,059 91



Total 64,623,512 00 28,493,685 86 93,117,197 86
These amounts are subject to increase or decrease as to total

indebtedness by the application of the $2,285,216.18 and the $2,465,000 before stated, as the Supreme Court may decide in the suits now pending.


SINKING-FUND.


The Supreme Court of the United States, at the October term, 1875, held, in the case of The United States vs. The Union Pacific Railroad Company, (1 Otto, 72,) that the companies cannot be required to pay the interest on the bonds until the maturity of the principal. This decision of the court of last resort leaves the United States powerless, under present laws, to obtain, before the maturity of the bonds, any return for the large sums advanced and to be advanced to the companies, except the one-half compensation for services rendered to the government, and the 5 per cent. of the net earnings of the roads after completion.

These sources are so entirely inadequate to reimburse the United States, that various measures have been suggested for securing payment at the maturity of the bonds. The president of the Union Pacific Company, in a letter addressed to the Secretary of the Treasury on the 9th February, 1875, proposed the establishment of a sinking-fund by the annual payment of $500,000 for twenty years, and of $750,000 thereafter. This proposition was afterward modified so as to offer to pay $500,000 for ten years, $750,000 for ten years, and $1,000,000 beginning 1st July, 1895. These sums include the charges against the government for transportation and mail-service. The Central Pacific Company shortly afterward made propositions on the same subject.

What is known as the Lawrence bill, which passed the House of Representatives at the first session of the Forty-fourth Congress, requires the Union Pacific Company to pay semi-annually the sum of $994,731, which sum, according to the statement of the Judiciary Committee of the House of Representatives, is necessary to meet the principal and interest due at the maturity of the bonds. Other sums are required by said bill to be paid by the other companies. The proceeds from transportation and mail-service, and 5 per cent. of net earnings, are not included in these sums.

The government directors of the Union Pacific Company, in their last annual report, express the opinion that a semi-annual payment of $500,000, compounded at 6 per cent., together with the one-half of the charges for transportation and the 5 per cent. of the net earnings, will suffice to meet all the liabilities of said company to the United States at the maturity of its bonds. According to their figures, these three items would amount to nearly two millions of dollars a year, and on their estimate of the amount that would be received from the one-half transportation and 5 per cent. of net earnings, the sum-total received would vary but little from that named in the Lawrence bill.

As this important subject is already receiving in Congress that earnest attention which the magnitude of the interests involved deserves, I deem it unnecessary to go into an elaborate discussion of any of the plans proposed. That the law contemplates, and the public interest demands, the full reimbursement to the United States of the whole amount, principal and interest, advanced for the railroad companies, is unquestionable, and I beg leave to offer the following presentation of the ability of the Pacific Railroad Companies to discharge their indebtedness to the government.


THE ABILITY OF THE PACIFIC RAILROAD COMPANIES TO PAY.


In addition to the one-half of transportation accounts for services rendered, the amount of which has been withheld and applied upon the indebtedness of the companies, the act approved July 1, 1862, section six, requires “that, after said road is completed, until said bonds and interest are paid, at least five per centum of the net earnings of said road shall also be annually applied to the payment thereof.”

The following approximation is made of the amount due from the companies on this account, exclusive of interest accrued by reason of nonpayment annually, to October 31, 1877, viz:

Company. Road
completed.
 Years.  Gross
earnings.
Operating-
expenses.
 Net earnings.  Five per
cent. of
 net earnings. 







U. P. R. R.  Nov.   6, 1869 8     [1]$85,000,000   $40,000,000  $45,000,000   $2,250,000
C. P. R. R.  July 16, 1869 8⅓ [2]75,000,000  33,000,000  42,000,000  2,100,000
K. P. R. R.  Nov.   2, 1868 9    27,000,000  15,500,000  11,500,000  575,000
W. P. R. R.[3]  Jan. 22, 1870
S. C. & P. R. R.  March 3, 1869   8⅔ 2,600,000  2,100,000  500,000  25,000
C. B., U. P. R. R.   Jan. 20, 1868 1,300,000  1,500,000   [4]Deficit 200,000 




Total 190,900,000  92,100,000  99,000,000  4,950,000
  1. Including Omaha bridge earnings and operating-expenses, which are omitted from the published reports of the company.
  2. Upon the basis of 8661219 of the total earnings and expenses, which is subject, however, to investigation as to the actual earnings and expenses of the remaining portion of the road.
  3. Consolidated with C. P. R. R. June 22, 1870.
  4. An inquiry into this deficit is in progress.

Interest at the rate of 6 per cent. per annum being added to this sum of $4,950,000, from the time when the annual applications thereof should have been made, will increase it to more than $6,000,000, which is the amount immediately involved in the pending “Five-per-cent.” suits.

The ability of the Union Pacific and Central Pacific Railroad Companies to pay the above sums is fully demonstrated by the following facts, figures, and comparisons:

Omitting the Union Pacific and Central Pacific Railroad Companies from the enumeration, there were at the close of the year 1876, eight hundred and nine (809) railroad companies in operation in the United States, owning 76,258 miles of road. Of these, 181 only paid dividends; 30 paid 8 per cent., 36 paid over 8 per cent., 115 paid under 8 per cent., and 628 paid no dividends. Of these 809 companies, the earnings of 31 were insufficient to pay “operating-expenses,” the earnings of 170 were insufficient to pay “operating-expenses” and “interest,” and 216 defaulted on their “bond-interest.”

The Union Pacific Railroad Company, and the Central Pacific Railroad Company, did better than ever before in the year 1876, notwithstanding the fact that all other railroad companies suffered from the great depression of trade and industrial enterprise. (See pages XV and XVI of Poor's Manual, 1877.)

Gross earnings  $31,033,803
Operating-expenses 14,000,286
Net earnings 17,033,517
Bonded interest, paid  $6,612,815
Eight per cent. dividend on stock  7,299,000
13,911,815
Surplus 3,121,702

Excepting these two companies from the calculation, but 34½ per cent. of the capital stock invested in railroads pays a dividend; the average rate per cent. of dividends paid is but 281100; but 68¾ per cent. of the bonded investment in railroads receives interest, and the average rate of interest is but 422100 per cent. The two railroads named pay 8 per cent. dividends on capital stock, and 621100 per cent. interest on their bonded debt.

On the “one-hundred miles basis” a comparison between all other roads in the United States and these two roads for the year 1876, is as follows, viz:

Items.  All other 
roads.
 Union Pacific and 
Central Pacific
Railroads.



Locomotives used. 21  17
Passenger-cars used 20  20
Freight-cars used 510  319
Capital stock  $2,912,919   $4,652,112
Bonded debt 2,793,355  7,180,342
Cost of road and equipment 5,170,322  11,453,038
Passenger-earnings 184,859  453,795
Freight-earnings 397,754  806,054
Total earnings, including mails, &c.  686,214  1,378,465
Operating-expenses 436,604  [1]621,867
Net earnings 249,610  756,598
Bond-interest paid 129,087  293,725
Dividends on capital stock 90,180  324,208
  1. Construction, new equipment, and improvements evidently enter largely into this amount for “operating-expenses.”

To illustrate still more fully the ability of the Union Pacific and Central Pacific Railroad Companies to earn money, and with a proper disposal of their earnings in due time to pay off all of their indebtedness to the government, the following statement is made. The figures are believed to be nearly correct, having in this and the previous statement been taken largely from “Poor's Manual of the Railroads of the United States.”

Items. Union
Pacific
Railroad.
Central
Pacific
Railroad.
Total
of both.
New
York
Central.
Railroads
reporting in
Massachusetts.
All railroads in
United States
reporting, except
Union Pacific and
Central Pacific
Railroads.







Miles of road operated 1,038½ 1,219 2,257½ 1,000 2,479 67,355
Cost of road  $114,000,000   $132,685,389   $246,685,389  $77,243,162   $140,947,113 
Cost of equipment 6,000,000  7,494,209  13,494,209  17,349,449  16,590, 505 
Cost of other property 2,714,588  2,450,684  5,165,270  3,230,199  11,541,434 







Total amount of investment  122,714,588  142,630,282  265,344,870  97,822,810  169,079,052   $3,828,808,307 
Cost per mile 118,000  117,500  117,852  98,000  68,204  56,845 
Capital stock 36,762,300  54,275,500  91,037,800  89,428,300  118,179,615  2,157,120,875 
Bonded debt 51,104,000  55,457,000  106,561,000  39,844,733  51,620,374  2,058,580,368 
United States subsidy bonds. 27,236,512  27,855,680  55,092,192  9,531,320 
Total general liability. 115,102,812  137,589,180  252,690,992  129,273,033  169,799,989  4,225,232,563 
Passenger-earnings 4,410,000  5,908,821  10,318,821  6,672,966  14,260,815  124,512,264 
Freight-earnings 7,710,000  10,773,618  18,483,618  17,593,264  13,644,278  267,907,030 
Miscellaneous, mail, &c., earnings  1,400,000  1,464,504  2,864,504  3,780,356  3,102,353  69,780,432 
Gross earnings 13,520,000  18,146,943  31,666,943  28,046,588  31,007,446  462,199,726 
Operating-expenses 5,220,000  8,732,074  13,952,074  16,124,172  21,460,627  294,074,813 
Net earnings 8,300,000  9,414,869  17,714,869  11,922,416  9,546,819  168,124,913 
Taxes paid 307,195 378,986 686,181 1,353,685 19,144,041
Interest paid, (bonded) 3,675,000 3,498,331 7,173,331 2,791,629 3,704,698 86,946,758
General expenses, &c. 750,000 1,043,186 1,793,186 1,917,711
Dividends 2,939,600 4,832,690 7,772,290 7,139,528 5,858,509 60,740,668
Surplus 628,205 289,881 73,548 1,293,446
Deficit 338,324 1,370,273
Miles run by passenger-trains 1,200,000 1,570,435 2,770,435 4,743,485 10,439,856 340,000,000
Miles run by freight-trains 3,500,000 3,359,107 6,859,107 9,278,266 9,464,471 260,000,000
Total passenger-mileage 128,032,924 200,000,000 328,032,924 353,136,145 639,592,115 7,000,000,000
Total freight-mileage 292,002,076 350,000,000 642,002,076 1,674,447,055 628,577,176 21,000,000,000
Passengers carried 202,648 789,702 992,350 9,281,490 41,133,229 200,000,000
Tons of freight carried 900,000 1,114,086 2,014,086 6,803,680 11,327,502 197,082,000

The facts shown by this statement are so striking that a comparison of percentages is quite unnecessary to demonstrate the great advantages which these two Pacific railroads possess over all others in the two principal elements of successful railroading — high tariffs and limited competition. That these companies are fully able to make sufficient provision for a discharge of their whole indebtedness to the United States seems, therefore, beyond question.


IMPROVEMENT REQUIRED IN THE SYSTEM OF ACCOUNTABILITY.


Under the provisions of section 20 of the act approved July 1, 1862, section 13 of the act approved July 2, 1864, and those of the act approved June 25, 1868, the Pacific Railroad Companies are required to make certain annual reports to this department, and the government directors are likewise required to communicate, from time to time, information in regard to the affairs of the companies, such as should be in the possession of the department.

Reports have been made by the several companies from year to year; but none of the reports rendered have given that full and specific information in regard to the receipts, expenditures, and indebtedness of the roads which is called for by law, and which is necessary to a full knowledge of their true condition.

The reports made annually by the government directors have furnished much valuable information in regard to the roads, and have intimated and suggested many things whereby the condition of the roads could be improved.

Whether the laws now in force are repealed and new laws passed or not, injustice to the gentlemen who are now filling the positions of government directors, as well as to enable the government to utilize and systematize matters connected with these railroads, in which there is so much at stake, legislation looking to more practical methods of obtaining information seems to be absolutely required.

In order that the amount of net earnings be properly and accurately ascertained, it is desirable that monthly reports, instead of annual ones, be made to this department on proper forms to be prepared and furnished to all the Pacific railroad companies. The business of the two main companies is assuming such large proportions that the annual report is too slow, and altogether of too summary a character to serve the purpose for which it was intended. The government should receive its information in regard to the business and condition of these roads just as often and just as promptly as a board of directors or any officer of the company. The companies should be required to keep their accounts in such manner as to enable them to give promptly and with accuracy any information required by the department.

One of the difficulties at present in the way of obtaining proper information is the fact that the companies put their own construction upon the laws, as to what reports are required of them; and whether they report or not according to the construction of the department, there is no penalty for non-compliance. There is no uniformity in the manner of keeping their accounts or rendering reports to the government.

Not to go too much into detail, it may be stated, that while the law requires that the reports called for shall contain “a statement of the indebtedness of said company, setting forth the various kinds thereof,” the companies report the amount of their funded debt, leaving out their floating debt — their entire indebtedness — or failing to give the details thereof; so, with the required “statement of the expense of said road and its fixtures,” the entire annual expense of operating as well as the amount invested in new property or improvements — fixtures — is evidently required, but has never been furnished in such manner as to give an intelligent idea as to its correctness. The reports of “engineers, superintendents, or other officers who make annual reports to said railroad companies” are required to be furnished, but have not been by all. Again, in the case of the Central Pacific, it is necessary to a proper division of its earnings and expenses, that a separate account and report be had as to that part of the road known as subsidized, namely, 866 miles of its 1,219. The Union Pacific fails to report the earnings and expenses of the Omaha Bridge, although decided in 1875 to be a part of their road. The expenditures for improvements, betterments, and for new construction and equipment should be given in detail and verified by a competent officer of the government, and the time of making up their annual statements should be Juue 30 of each year, conforming to the fiscal year of the government.

These constitute but a few of the shortcomings in the reports made by the companies to this department.

For the supervising of the accounts of these railroads, the government directors recommend that a special bureau should be established in this department. With this recommendation I fully concur. A competent and energetic officer in charge of such a bureau would enable this department to act promptly and intelligently, whenever action on its part is required, in regard to the great interests of the government in these railroads, and to furnish valuable assistance to other departments of the government and to Congress in matters relating thereto.

The report of the government directors of the Union Pacific Railroad Company, (the only one for which such directors are appointed,) for the year ending 30th June last, is herewith transmitted. The act of 1st July, 1862, provided for two such directors to be appointed by the President. The number was increased to five by the act of 2d July, 1864, which also provides that one of them shall be placed on each of the company's standing committees, and at least one on every special committee. They are required to report from time to time to the Secretary of the Interior in answer to any inquiries he may make of them, touching the condition, management, and progress of the work, and to communicate to him, at any time, such information as should be in his possession. They are authorized to go over the road as often as may be necessary to a full knowledge of its condition and management.

Their reports embody much valuable information that would not otherwise come into the possession of the General Government. The suggestions contained in their last report are well worthy of consideration by Congress.


THE KANSAS PACIFIC RAILROAD.


The Kansas Pacific Eoad was placed in the hands of a receiver 3d November, 1876, in consequence of failure on the part of the company to pay the interest on its first mortgage bonds. In a printed paper addressed to me, on the 21st of April last, by the chairman and secretary of a committee of nine of first-mortgage bondholders, it is alleged that said failure to pay interest was owing mainly to the fact that the Union Pacific Railroad Company has persistently refused to transport passengers and freight in connection with the Kansas Pacific and Denver Pacific companies on the terms and in the manner required by the acts of 1st July, 1862, 2d July, 1864, 3d March, 1869, and 20th June, 1874; that said acts contemplated the Kansas Pacific and Denver Pacific railroads as a part of the connected and continuous line between the Missouri River and the Pacific Ocean, intersecting the Union Pacific at Cheyenne, to be operated without any discrimination for or against said roads; that the Union Pacific company has wholly disregarded the repeated requests of the Kansas Pacific and Denver Pacific companies to observe the provisions of said acts, and has denied its obligations to conform thereto, establishing and maintaining, in contravention of said acts, discriminating rates of fare for passengers and freight for merchandise against the Kansas Pacific and Denver Pacific companies; that the distance from Cheyenne to Ogden is 516 miles, one-half the distance from Omaha to Ogden, and yet the Union Pacific Company charges, in many cases, as much for transportation from Cheyenne to Ogden as from Omaha to Ogden, and in all cases out of proportion to the distance traversed, thereby compelling travelers and shippers to go to Omaha as a starting-point, greatly to the damage of the Kansas Pacific and Denver Pacific companies; that while the Kansas Pacific company has made default in payment of interest, the Union Pacific company, by means of the monopoly thus established, has paid 8 per cent. dividends annually to its stockholders, besides paying the interest on its debt, (other than that due the United States;) that the General Government is interested in having said discrimination terminated, in order that the sums advanced to the Kansas Pacific company by the United States may not be utterly lost.

A list of some of the discriminating charges accompanies the paper. That there is such discrimination is beyond dispute. That it is in direct contravention of the letter and spirit of the Pacific railroad acts there can scarcely be serious doubt. There seems to be no disposition on the part of the Union Pacific company voluntarily to remedy this evil, but I am of the opinion that proper steps should be taken to enforce compliance with the acts of Congress.


PATENTS.


The Commissioner of Patents reports that during the year ending June 30, 1877, 19,914 applications for patents were filed.

The number of patents issued, including reissues and designs, was 14,459; the number of caveats filed was 2,658; 1,098 patents were allowed but not issued because the final fee was not paid; 1,275 applications for registration of trade-marks were received; 968 trade-marks were registered; 556 applications for registration of labels were filed; 324 labels were registered.

The total receipts of the office from all sources were $714,964.73; the total expenditures were $609,043.24, leaving an excess of $105,921.49 of receipts over expenditures.

The Commissioner reports that he has found himself embarrassed during the year by the smallness of the appropriations for the regular work of the office, which were less by $62,000 than the appropriations for the year ending June 30, 1876.

A large part of the expense for the year has been for reproducing, by photolithography, drawings of patents issued in former years. This forms no part of the regular work, but has been carried on toward completion for some years. It is expected that this work will be finished during the present year. Upon its completion a material reduction can be made in the expenses of the office, while the copies of drawings kept for sale will prove a source of revenue.

The Commissioner reports an increasing revenue from the fees for the registration of trade-marks. The fee for registration is $25, and is payable on filing the application, and, like other fees, cannot be returned to the applicant in case the registration is refused. The Commissioner suggests that it would be more in harmony with the practice of the Patent Office in other cases to require a fee of $15 upon the filing of the application and an additional fee of $10 upon the allowance of the claim.

The Commissioner renews the recommendation, made in the report for 1874, that a special appropriation be made for the preparation of complete digests of all patents granted by the United States. Such digests would greatly facilitate the work and insure greater accuracy in the business of the Patent Office. These suggestions are commended to your favorable consideration.

Under a recent arrangement, duplicate copies of all British patents, issued since 1852, 56,000 in number, will be furnished gratuitously to the Patent Office. When properly classified and arranged, these will greatly facilitate the work of the office. The Commissioner suggests that there should be a liberal appropriation for the purchase of books for the Patent Office library, as many recent valuable works having an important bearing upon the business of the office have not yet been placed upon its shelves.

The Commissioner again calls attention to the necessity which exists for additional room for his office, which can be supplied only by the action of the law-making power. Great inconvenience is experienced on account of the want of sufficient space for the working force and material of the office.


PENSIONS.


The annual report of the Commissioner of Pensions shows that at the close of the year ending June 30, 1876, there were on the files of his office 42,809 original Army invalid claims; 19,344 invalid increase; 32,713 Army widows' original; 814 widows' increase; 975 original Navy invalids; 62 Navy invalid increase; 524 Navy widows' original, and 2 Navy widows' increase claims.

To that number were added during the year 16,532 original Army invalid; 11,214 Army invalid increase; 5,209 original Navy widows'; 780 Army widows' increase; 271 original Navy invalid; 117 Navy invalid increase; 97 original Navy widows', and 16 Navy widows' increase claims.

Seventeen hundred and seventy-one original Army invalid, 132 original Army widows', 4 Army widows' increase, 0 original Navy invalids' and 1 original Navy widow's claims were taken from the rejected files and reopened, making a grand total of 61,112 original Army invalid; 21,558 Army invalid increase; 38,114 original Army widows'; 1,598 Army widows' increase; 1,252 original Navy invalids; 179 Navy invalid increase; 622 original Navy widows', and 18 Navy widows' increase claims, for disposal.

Of claims under the act of February 14, 1871, there were pending at the close of the fiscal year ending June 30, 1876, 341 survivors' and 389 widows' claims; 108 survivors' and 388 widows' claims were filed during the year, and 9 each of survivors' and widows' rejected claims were reopened, making a total of 548 survivors' and 746 widows' claims.

There were examined and allowed during the year 7,134 original Army invalid; 8,922 Army invalid increase; 3,790 original Army widows'; 678 Army widows' increase; 148 original Navy invalid; 76 Navy invalid increase; 71 original Navy widows', and 7 Navy widows' increase claims.

Of claims under the act of February 14, 1871, there were allowed 57 survivors' and 126 widows' claims, making a total of 21,019 pension claims allowed, against 17,451 the year preceding.

There were rejected during the year 13,284 pension claims, as follows: Army invalid, original, 4,609; Army invalid, increase, 7,026; Army widows', original, 1,355; Army widows', increase, 13; Navy invalid, original, 51; Navy invalid, increase, 38; Navy widows', original, 66; survivors of the war of 1812, 43; and widows of soldiers of the war of 1812, 83; leaving on hand unadjudicated on June 30, 1877, 91,981 pension claims of all classes.

The total addition to original claims for pension is 7,110; total reduction of increase claims, 4,639.

The yearly value of claims allowed during the year is $1,343,534.84 as follows: Army invalid, $472,453.22; increased pension to invalids, $369,996.12; Army widows, &c., $446,292; increased pension to Army widows, $16,504; Navy invalids,$16,528.50; increased pension to Navy invalids, $2,877; Navy widows, &c., $10,260; increased pension to Navy widows, $9.60; survivors of the war of 1812, $5,568, and widows of the soldiers of said war, $12,096.

The value of the reduction to the rolls during the year, by reason of death, remarriage, and termination of pension from other causes, is $1,568,644.10; making a total reduction of $225,109.26 to the rolls.

The number of Army invalid pensioners on the roll increased during the year 5,809; that of Army widows, decreased 4,112; that of Navy invalids, increased 79; that of Navy widows, &c., decreased 27; while the number of survivors of the war of 1812, and of the widows of the soldiers of said war, decreased 1,404 and 378 respectively.

The total number of pensioners on the roll June 30, 1877, was 232,104, as follows: Army invalids, 114,119; Army widows, 97,055; Navy invalids, 1,722; Navy widows, &c., 1,717; survivors of the war of 1812, 12,802; and widows of soldiers of that war, 4,609.

Yearly value of the rolls, $25,371,215.43. The total reduction to the rolls was 33.

During the year the following amounts were paid for pensions: to Army invalids, $12,955,544.15; to Army widows, &c., $13,348,383.57; to Navy invalids, $199,619.40; to Navy widows, &c., $322,926.63; survivors of the war of 1812, $934,657.82; to the widows of the soldiers of said war, $361,548.91, making a total of $28,122,683.48.

The cost of disbursement, including fees of pension agents, fees of examining-surgeons, and compensation of agents, and expenses of agencies, was $524,129.01. There remained in the hands of pension-agents, June 30, 1877, $339,197.04.

Of the appropriation for Army pensions, $453,437.86, and of the appropriation for Navy pensions, $2,052.61 were not drawn from the Treasury.

The amouut of pension due at first payment in claims allowed during the year, was, to Army invalids, $1,279,874.72; Army widows, &c., $1,950,852.86; Navy invalids, $16,786.65, and Navy, widows, &c., $37,422.89, making a total of $3,284,937.12.

During the year 861 applications for bounty-land were received; 85 warrants were issued, aggregating 13,120 acres of laud; and 451 applications were rejected.

The special-service division of the office made 1,926 investigations during the year, resulting in the dropping of the names of 555 pensioners from the roll, in the reduction of the rate of 62 pensioners, and the rejection of 334 pending claims prima facie established. The aggregate saving to the government by reason of these investigations was $379,026.62, at a cost of $40,022.78 for per diem allowance to and actual expenses incurred by the special agents.

A number of attorneys were suspended and debarred from practice by reason of illegal practices; 42 cases were submitted to the proper officers for criminal prosecution; 23 indictments were found against offenders against the pension laws; 12 were convicted and 9 were acquitted, while 46 cases are in the hands of various United States attorneys undisposed of and awaiting action.

It is estimated that the sum of $28,000,000 will be necessary for the pension service during the ensuing fiscal year.

The plan proposed by the Commissioner for the more prompt and efficient settlement of pension claims is worthy of special consideration.

Under the present system pension claims are adjusted on ex-parte testimony, given by witnesses unknown to the office, and whose affidavits are generally prepared by attorneys dependent for their fees upon a successful prosecution of the case. Testimony thus procured is too often colored to suit the facts necessary to be established, and where the proof involves a question of sequel to disabilities incurred in the service, it has been found very unreliable as a basis for correct judgment.

The Commissioner proposes to substitute for this unreliable system, with its 1,578 examining-surgeons, necessarily differing in medical skill and judgment, a corps of salaried surgeons, distributed throughout the country, each surgeon assisted by a competent clerk, to be assigned to a given district. Their duties will be to make a personal examination of each case referred to them, examine claimants and witnesses, and transmit the result to the office. The Commissioner gives it as his opinion that by this system a more prompt and just settlement of claims would be secured, and by a proper rating of pensioners a large saving of money would be effected.

The magnitude of the interests involved and the importance of securing speedy adjustment of claims now largely in arrears would appear to call for some radical change in the present defective system of examinations. As the plan proposed by the Commissioner of Pensions is urged not only on the ground of administrative economy, but as a measure of justice to deserving pension-claimants, I earnestly commend it to the attention of Congress.

The Commissioner also recommends amendments to certain sections of the Revised Statutes relating to the payment of pensions. As the changes proposed are for the purpose of removing certain hardships which the present laws inflict, I fully agree with the recommendation.

The consolidation of pension-agencies, in conformity to the President's order of May 7, appears to have been successfully accomplished without inconvenience to the government or the pensioners.

The Commissioner reports prompt payments at nearly all the agencies, and expresses the belief that by a consolidation of the rolls on a uniform plan — and to secure which steps have already been taken — payments even more prompt can be made in the future.

The necessary suspension of the agent at New Orleans on the eve of a payment and the appointment and qualification of his successor caused a delay in payments at that agency. Aside from this, the practical results of the consolidation have been highly gratifying, the saving in salaries of agents alone, on the basis of former years, being $142,000 per annum. The question whether the abolition of all the pension agencies and the payment of all the pensions from Washington is practicable, and what measures should be adopted to that end, is now the subject of earnest consideration; but any change in that direction would require additional legislation, as the law contemplates the paying of pensions through agencies, and the number now established could not well be reduced without a radical change of the existing system.


EDUCATION.


The Commissioner reports that during the year twenty-one thousand written or printed communications have been received from its American correspondents; an equal number of letters have been sent, as well as about eleven thousand bound volumes and seventeen hundred pamphlets.

Efforts have been made to gather and classify the educational statistics of the entire country and to perfect the office-lists of institutions of learning, libraries, and scientific and educational associations; of these, nearly nine thousand furnish statistics and documents to the office for its reports and special publications.

Among the works in progress of preparation are historical reviews of collegiate instruction, of normal instruction, of industrial art education, and of graded school systems in the United States.

The demand for information in regard to education in foreign countries was greatly stimulated by the Centennial; and in response thereto the bureau has in course of preparation circulars and special reports relating to foreign national systems, such as the success of the efforts adopted for public instruction in Great Britain under the educational act of 1870; the progress of industrial and technical education in Germany, France, and Belgium, including trade schools, (weaving, cooking, nursing, &c.,) school for agriculture, forestry, commerce, &c.

The amount apportioned for printing and binding for the fiscal year ending June 30, 1877, having been exhausted in the issue of the report on public libraries, no other publication could be attempted. Since July 1, five circulars or reports have been issued, as follows:

1. The International Conference on Education, held at Philadelphia in connection with the International Exhibition.

2. Manual of the Common Native Trees of the Northern United States, (for the use of teachers.)

3. Circular of Information No. 1, 1877. Education in China.

4. Circular of Information No. 2, 1877. Education in Finland, the Netherlands, Denmark, Würtemberg, Portugal, &c.

5. Contributions to the History of Medical Education in the United States, 1776-1876.

The Commissioner states that the removal of the office, as required by law, to the building occupied by the Pension Office has proved greatly injurious to the work, the new quarters furnishing rooms neither sufficient in number nor appropriate in arrangement.

A great aid to the work of the office is its collection of educational appliances; this already has articles of great value illustrative of educational methods in other countries. There are no rooms provided for its arrangement or display, and no means for its care.

The Commissioner calls attention to the constitutional and traditional practice of the national government in aiding education, and believes the moment is opportune for the execution of a well devised system of supplemental aid, and that this aid will render effectual the local efforts of educators now so greatly embarrassed.

A comprehensive review of the statistics of education in our country in 1877 affords some evidence of improvement over the same in 1876.

In the public schools, with reduced expenditures for salaries and buildings, there has been an effort to improve the quality of instruction by making it consecutive and by bringing it more into harmony with the developments of the child's nature and the necessities of his future occupations. Natural science has been taught less from text-books and more from specimens and in the field. Industrial drawing, as an element of popular instruction, has made much progress.

In the colleges and professional schools there is an advance of the standard of admission, and in many schools a lengthening of the course. Women are being more generally provided with advantages for superior study, and for preparation for professions if they so desire.


THE CENTENNIAL EXHIBIT.


The withdrawal of the articles exhibited by the several bureaus of the department in the government building at Philadelphia was delayed by executive order, with a view to anticipate Congressional action in reference to the establishment of a national museum. Congress, however, took no action, so that articles by further executive order have been returned to the care of the several offices by which they were exhibited, or have been stored for future exhibition.

It is believed that much has been done by the exhibition of this depart ment, and by the distribution of reports, and by the communication of information in other ways to inform our own citizens and persons resident in foreign countries respecting the patents of inventions, the public lands, the Indian tribes, the geology and geography of the Territories, the education of our country, and its progressive increase in territory, population, industry, and wealth.

From the Centennial Commission the following certificates of award have been already received:

“The Department of the Interior, Washington, D. C.,” for “Collection exhibit.”

“The Department of the Interior,” for “Statistical maps.”

“The Bureau of Education,” for “Collective exhibit embracing objects representative of the various classes included in Group XXVIII.”

“The United States Geographical and Geological Survey of the Territories,” “First Division,” for “Geographical and geological maps, models, and photographs.”

“The United States Geographical and Geological Survey of the Territories, First Division,” for “Models of caves, and cliff-dwellings, and pottery.”

“The United States Geographical and Geological Survey of the Territories, Second Division,” for “Geographical and geological maps, models, and photographs.”

Also, an award “to the United States Geographical and Geological Survey of the Territories” (without further specifications) for “Geological maps, models, and photographs.”

The lack of funds has not permitted the preparation and publication of catalogues and reports of the department exhibition, as contemplated by the executive board.


GEOLOGICAL AND GEOGRAPHICAL SURVEY.


FIRST DIVISION.


On the completion of the survey of Colorado last year, it was determined by the department that the work of the United States Geological and Geographical Survey of the Territories, under the direction of Prof. F. V. Hayden, should be transferred to Wyoming and Idaho. The belt of country including the Pacific Railroad having been explored and mapped in detail by the survey of the fortieth parallel, it was deemed best to commence at the northern line of that work and continue westward from the longitude of Port Steele, Wyoming Territory, to that of Ogden, Utah, or, more precisely, from longitude 107° to 112° and northward to the Yellowstone National Park.

The survey proper the past season was divided into six parties, one of which was devoted to the primary triangulation, three to topographical and geological work, one for critical paleontological study, and one for making level-connections. There were also three smaller parties, devoted to special investigations in different portions of the West.

The primary triangulation party took the field from Rawlins Springs, Wyo. From that point a base-line was measured with great accuracy, from which a network of triangles was expanded over the country to the North and West, locating, at intervals of from twenty to thirty miles, prominent peaks, upon which stone monuments were erected. Upon these points was based the system of secondary triangulation. The primary system was extended with great care over an area of twenty-five thousand square miles, establishing twenty-six main stations.

The three well equipped topographical and geological parties surveyed an area of twenty-eight thousand square miles. In accordance with instructions from this department, stone monuments were built at all the important geodetic stations for the use of the surveyors of the public lands under the Commissioner of the General Land Office. The entire number thus erected was two hundred and twenty-five.

As soon as the topographical work is sufficiently advanced, a chart will be prepared showing the location of all the monuments in relation to such of the public lands as are suitable for arable purposes. Very careful attention was given to the study and classification of all areas suitable for arable, pastoral, or mining purposes, and materials were secured for a detailed economic map of the area surveyed, showing the different classes of land by a series of colors. Much attention was given to the measurement of the volume of water in the more important streams for the purposes of irrigation, also to the accumulation of water in reservoirs and the sinking of artesian wells. The possible methods for the redemption of what are called the “barren lands” were examined with great care.

A party was organized during the past season for the purpose of making a critical study of doubtful points in the geological structure of the Rocky Mountain region, and the results have been of the most gratifying character. Numerous facts were obtained which confirmed, in a remarkably clear manner, the statements that had already been made by the chief geologist, that while certain of the grand divisions or groups of strata possessed each certain peculiar characteristics and are recognizable with satisfactory distinctness as general divisions, they really constitute a continuous series of strata with no well-defined planes of demarkation, stratigraphical or paleontological.

A very large collection of fossils, as shells, fishes, insects, plants, &c., were obtained, many of which are new to science. These collections constitute valuable standards for reference in the discussion of the various questions that must arise in the preparation of the geological reports.

One interesting feature of the work of the survey during the past season was the careful examination of the probable ancient outlet of the great lake that filled the Salt Lake Basin. It is probable that the waters flowed northward by way of Marsh Creek into the Portneuf, thence into the great Shoshone or Snake River, and thence into the Columbia River. The source of Marsh Creek is in the lowest pass between the drainage of the Great Basin and that of Snake River.

The publications of the survey during the past year have been quite voluminous, consisting of over 6,000 pages octavo and 2,000 pages quarto, with a great number of illustrations.

Those volumes which are in an advanced state of preparation are two quarto volumes on the vertebrate fossils of the West, one on the fossil insects, and one upon the Rhizopods, certain forms of microscopic life that have had greater influence in building up the crust of the earth than all other forms, whether animal or vegetable. These volumes will prove not only of scientific but also of great practical importance.

The atlas of Colorado, which was described in the last annual report, will be completed about February, 1878. The tenth and eleventh annual reports of the survey are in an advanced state of preparation and will be printed and ready for distribution before the close of the present session of Congress.

In 1872, the organization of the survey was matured on a basis of an appropriation of $75,000, with $20,000 for engraving of charts and illustrations for reports. This estimate was granted until within the past two years, when the appropriations for engraving have been omitted. The consequence is, that the preparation and publication of the more important works of the survey have been greatly impeded. The estimate for the fiscal year ending June 30, 1879, is the same, and it has been made to meet only the absolute needs of the organization and preserve it from disintegration.


SECOND DIVISION.


Major Powell reports that on the arrival of the parties from the field in January, 1877, office-work was organized and pushed with all possible vigor through the winter and early spring. During this time the computations and adjustments for the triangulation were completed, with the determination of the necessary azimuths, latitudes, and longitudes; the hypsometric computations were also made. With the progress of the mathematical work, the topographers were engaged in the preparation of the maps, and by the close of the office-season the whole was put in readiness for the engraver.

During the same time a report on the geology of the Henry Mountains was prepared with stereograms, diagrams, and other illustrations, and the manuscript was sent to the Public Printer; it is now ready for the binder.

A second report was prepared on the geology of the volcanic plateaus of Utah, but it was not deemed wise to publish it until the region had been more fully investigated.

During this office-season the ethnologic work was more thoroughly organized, and the aid of a large number of volunteer assistants living throughout the country was secured.

On this subject, one volume entitled “Contributions to North American Ethnology, vol. I,” was published. It relates to the tribes of Alaska, and to the tribes of a part of Washington Territory and a part of Oregon, and is accompanied by maps of those districts, showing the locality of the tribes. A second volume relating to the tribes of California has been printed and is ready for the binder. This is also accompanied by a map.

A third volume on this subject is in course of preparation.

A small volume, entitled “Introduction to the Study of Indian Languages,” has also been prepared and published. This book is intended for distribution among collectors. A tentative classification of the linguistic families of the Indians of the United States has been made; this has been a work of great labor.

About the middle of May the surveying corps took the field. Five parties were organized: one to extend the triangulation, two for topographic purposes, one geological, and one for the classification of lands. Several minor parties were also organized. Some of these parties are still in the field. The region surveyed this year has been entirely within the Territory of Utah. The geographic parties have completed the survey of districts 86 and 75. The geological party has completed the survey of the volcanic plateaus above mentioned, and the party engaged in the classification of lands has extended its survey over the whole of the Territory of Utah except a small portion in the southwestern corner, and over about one-fourth of the Territory of Arizona. The computations for Utah are not yet completed; but it may be stated as a close approximation, that the area which can be redeemed by irrigation through the utilization of all the streams, but without the construction of reservoirs, is about 1,250,000 acres.

The surveys this year have been extended over large areas of good pine timber, the geographical distribution of which has been carefully determined.

Extensive and valuable coal-fields are embraced in the survey, and they have received much study.


ROCKY MOUNTAIN LOCUSTS.


Under act of Congress approved March 3, 1877, a commission was authorized to report upon the depredations of the Rocky Mountain locusts in the Western States and Territories, and the best practicable method of preventing their recurrence or guarding against their invasions.

The following gentlemen, well known for their scientific attainments, were appointed on the commission:

Prof. C. V. Riley, of Missouri.

Prof. Cyrus Thomas, of Illinois.

Prof. A. S. Packard, of Massachusetts.

The commissioners began their work in April, very soon after their appointment. Several thousand circulars were sent to persons in the locust area, and two bulletins in pamphlet form were issued, one containing full information regarding the preventive measures and direct remedies against the young locusts, for immediate use by farmers; the second bulletin contained an account of the habits of the locust, with many illustrations.

The locust area between longitude 94° and 120° was subdivided into three districts, one of which was assigned to each member, who at least once, and in some cases several times, visited important points where the locusts were most numerous. A number of paid assistants were employed, reports from whom are in the hands of the commissioners. Professor Riley, besides visiting Texas, Missouri, Kansas, and Colorado several times, also visited the Manitoba region, in British America. Professor Thomas visited Iowa, Nebraska, and Minnesota. Dr. Packard late in May and during June passed through Montana and Dakota, and was enabled to obtain such information as to enable the commission to predict that there would be no invasion of the Mississippi Valley this summer — a prediction which subsequent events fully confirmed. He was also in Utah and Nevada at the time when the people were suffering from the locusts, and afterward made a journey through Northern California, Eastern Oregon, and Washington Territory, so as to ascertain the western limits of the Rocky Mountain locust, which was found to be the 120th meridian. He also determined the species which has for two centuries past locally ravaged Oregon and California.

It is believed that the diffusion of useful knowledge, the personal aid rendered by the commissioners and their assistants, has already saved to the West many times the amount of the funds appropriated by Congress, while the survey that has been made of the locust-area, the study of the migrations, habits, parasites, and means of prevention, has laid the way for future investigations which will eventuate in the abatement of the evil.


HOT SPRINGS COMMISSION.


Under the provisions of the act creating the Hot Springs commission, the following gentlemen were appointed commissioners to survey, lay out, and appraise the value of the lands on the Hot Springs reservation, and to adjudicate the claims of the occupants, &c.: Hon. A. H. Cragin, of New Hampshire; Hon. John Coburn, of Indiana; and Ex-Governor M. L. Stearns, of Florida. The commissioners have prosecuted the work with energy; and although it was found more difficult than at first anticipated, its progress toward early completion has been very satisfactory.

The prosecution of the surveys has required much care and skill; the nature of the land, its heavy growth of timber, its rough and rocky ridges, and the obliteration of old lines and corners making the establishment of new lines a work of extreme difficulty.

The following results have been secured up to the present time:

1. The exterior lines of the reservation have been definitely determined, measured, and monuments set at each section and quarter-section corner.

2. General subdivision lines, dividing the whole area into squares of approximate 2,600 feet to the side, have been run and accurately measured for future base-lines.

3. A portion, including 265 acres, has had its exterior lines run and measured, and has been accepted as the “Hot Spring Mountain reservation.”

4. All claims upon the entire reservation, which had any improvements upon them, have been surveyed to the number of 813, and areas computed of same.

5. Some five miles of base-lines have been run through the principal streets.

6. The topography, upon plan of 10-foot contours, with primes over valuable ground, has been carried over three-fifths of the reservation, and is being finished over the remainder of the territory.

There remains yet to be done, completion of the topography, platting of the same, and study thereof and determination of plan for streets, avenues, &c., and consequent thereon, a proper division into lots, blocks, &c., and thereafter the practical laying down of this plan upon the ground.

The commissioners report that the number of claims for the right to purchase land and for the value of condemned property will exceed one thousand. Much of the testimony relating to this branch of the work has been taken. The labor of preparing these cases for final examination will, in some cases, be very great, as every conflicting interest must be examined and passed upon. It is estimated that the expense of this work will exceed the original appropriation by at least $20,000.

On the 8th September, 1877, General B. F. Kelly, of West Virginia, was appointed superintendent of the reservation, and soon after receiving full instructions entered upon his duties. No report has yet been received from him on which to base an estimate of the expenses of his office and the probable revenues to meet them.


PAGOSA HOT SPRINGS OF COLORADO.


In view of the action by Congress vesting in the United States the title to and control of the Hot Springs in Arkansas, and believing that medicinal springs should, wherever possible, be placed beyond the cupidity of speculators so that rich and poor can alike share their benefits, I had the honor to recommend in May last the reservation of one mile square of land having the Pagosa Springs as its center. An executive order was issued to that effect.

These springs are situate near the banks of the San Juan River in Colorado, about twenty miles from its southern boundary, and near the one hundred and seventh meridian of longitude west from Greenwich.


DEAF AND DUMB ASYLUM.


One hundred and seven pupils have been under instruction since July 1, 1876. Uninterrupted good health has prevailed in the institution, the only death occurring being a case of accidental drowning.

Two students graduating from the collegiate department received the degree of bachelor of arts, and one the degree of bachelor of philosophy.

The buildings of the institution are within a few weeks of entire completion, and their cost will be within the amount of the estimates and appropriations.

The current expenses of the institution have amounted during the year to $53,292.31, and there has been expended on buildings the sum of $39,987.76.

In the estimates submitted, beside the usual amount for current expenses, $5,000 is asked for furnishing and fitting up the new building, including a small amount for repairs on completed portions of the buildings, and $10,000 for the inclosure, improvement, and care of the grounds of the institution.

The directors urge that these amounts be appropriated so as to be available during the current fiscal year, since the early completion of the improvements contemplated is very important.


FREEDMEN'S HOSPITAL.


During the year, 763 patients were treated in the hospital and asylum.

Of this number, 500 were admitted during the year, 365 were discharged — 265 cured and 100 relieved — and 109 died, leaving 277 patients under treatment in the hospital June 30, 1877. Over three thousand prescriptions were dispensed to the poor, and medicines and medical attendance were furnished from the hospital, when needed, to the inmates of the Colored Orphans' Home — 115 in number. Subsistence was provided for 25 of these, who are included in the aggregate number in the hospital.

The proportionately large number of deaths is attributed by the surgeon-in-chief to the character of the cases received, many of them being such as had reached an incurable stage before admission, owing to their want of means to procure proper care and medical treatment, and to the fact that of the 500 admissions, 50 were for treatment for consumption; a disease which almost necessarily proves fatal in this class of patients.


COLUMBIA HOSPITAL FOR WOMEN.


During the year, 627 women were under treatment at this hospital, of which number 240 were in the hospital and 387 received treatment in the dispensary. Five hundred and ninety-one patients were received during the year. Of the whole number treated, 302 were cured. 132 relieved, 3 died, 43 were transferred, and the results of 107 cases are unknown, leaving 40 cases under treatment at the close of the year — 24 in the hospital and 16 at the dispensary.


GOVERNMENT HOSPITAL FOR THE INSANE.


During the year ending June 30, 1877, 942 persons were treated in the Government Hospital for the Insane, being an increase over the previous year of 11. Of this number 83 were discharged recovered, 40 improved, 2 unimproved, and 52 died, making a total by discharges and deaths together of 177. Of this number 140 were males and 37 females.

The number of patients admitted during the year was 198; 147 were males and 51 females; from the Army, 70; from the Navy, 6; and from civil life, 122. There were 10 readmissions and 2 transfers from the private to the indigent list upon the order of the Secretary of the Interior. Of the 755 patients remaining June 30, 1877, 402 were from the Army, 39 from the Navy, and 324 from civil life.

The recoveries during the year were 67 per cent. of the discharges, 47 per cent. of discharges and deaths together, 42 per cent. of the admissions, and 9 per cent. of the whole number under treatment. The death-rate of males was 62, of females 31, and the average of both sexes 55 in a thousand.

Since the hospital was opened, 4,302 cases have been treated; of these 95 were re-admissions, making the total number of persons treated 4,207.

The whole number of pay patients treated during the year was 55, 32 being males and 23 females. The number remaining June 30, 1877, was 30, 15 males and 15 females.

The wholesale market value of the farm and garden products was $23,992.98. Forage crops to the amount of $5,533, in estimated value, are not included in valuing the products of farm and garden, having been credited in milk, meats, and the keeping of horses for hospital purposes.

The expenditures for the support of the hospital, including repairs and improvements, amounted to $166,274.98. The receipts during the year were:

From the Treasurer of the United States $150,000 00
From private patients for board, &c. 14,576 39
From sundry receipts, including sale of pigs, hides, rags, &c.  1,598 59
166,274 98

An average of seven hundred and seventy (770) insane persons, embracing nearly every diversity of mental and bodily, social and official, condition have been lodged, clothed, and fed, and received medical, hygienic, and moral treatment; the extensive buildings and grounds of the institution protected, repaired when needed, and somewhat improved, and all the furniture and other appliances of the establishment kept in proper and efficient order on an expenditure of less than four and one-half dollars ($4.50) per week for each person. So large a work, embracing details almost infinite in number and variety, has certainly been cheaply done. Its relations to the work enable the board of visitors to know, and make it becoming in them to declare, that it has been well and therefore creditably done.

On the 30th of June, 1877, Dr. Nichols, under whose management and supervision the original edifice and subsequent additions were built, offered his resignation as superintendent of the institution. The resignation was accepted, and Dr. Godding appointed to fill the vacancy thus created. He entered upon the discharge of his duties on the 1st of September, 1877.


YELLOWSTONE PARK.


On the 18th of April, 1877, P. W. Norris, of Michigan, was appointed superintendent of the Yellowstone National Park. As no appropriation was made for the payment of a salary to the superintendent, the services rendered by Mr. Norris have been without pay.

By reference to his report it will be seen that he has visited the park and taken such measures toward the protection of its natural curiosities as were deemed practicable.

He recommends adequate appropriation for the following purposes:

First. — Survey with distinct and durable evidence of the boundaries of the park.

Second. — Construction of a plain but substantial wagon-road connecting the two entrances to the park, and the laying out of necessary bridle-paths.

Third. — Salary sufficient to justify a capable and experienced superintendent, and at least one resident assistant, in devoting their time to the improvement and care of the park.

Other recommendations are made by the superintendent, looking to the improvement and protection of the park and its approaches.

Under the act of March 1, 1872, this tract of land was reserved and withdrawn from settlement, occupancy, or sale, and dedicated and set apart as a public park or pleasuring ground for the benefit and enjoyment of the people. It was placed under the exclusive control of the Secretary of the Interior, who was authorized to make such regulations as would provide for the preservation from injury or spoliation of all timber, mineral deposits, natural curiosities or wonders within the park, and their retention in their natural condition. It was also left discretionary with the Secretary to grant leases for building purposes, for terms not exceeding ten years, of small parcels of ground at such places in the park as may require the erection of buildings for the accommodation of visitors, the money derived from said leases to be used in the management of the park, and in the construction of roads and bridle-paths within its limits.

Very little has been done toward carrying out the provisions of the act referred to. No appropriation has been made for the pay of a superintendent or the survey of the park, and no revenues have been received, nor have any leases been granted by the department.

Without the necessary appropriation by Congress very little can be done toward making this land of wonders, what it deserves to be on account of its natural formations, one of the most attractive public parks in the world.


CENSUS OFFICE.


The incidental duties of the Census Office, caring for its files, answering inquiries relating to the census, and, whenever required, stating and restating accounts of United States marshals and assistant marshals connected with the taking of the census, have been satisfactorily performed by the chief clerk of the office.

The taking of the census of 1880, for which provision must soon be made, will be the subject of a special communication to Congress.


CAPITOL BUILDING AND GROUNDS.


The Architect reports that the entire building has been kept in good condition, and that new boilers and an elevator have been put in the Senate wing.

He also states that important changes and improvements in the heating and ventilating apparatus of the House wing have been made, as recommended by a commission, consisting of Prof. Joseph Henry; Col. T. L. Casey, Corps of Engineers, United States Army; Mr. F. Schumann, engineer; Surgeon J. S. Billings, United States Army, and the Architect of the Capitol. He states that these improvements have been considered satisfactory, and gives a detailed description of them.


CAPITOL GROUNDS.


The work on these grounds has been carried on under the plans of F. Law Olmsted, landscape architect, and satisfactory progress made.

The principal roadways of the eastern grounds have been paved, and a low granite-wall and coping placed around the northern half of the east park. A screen-wall, with ornamental piers and lamps, has been placed at the circle at the head of Pennsylvania avenue and along First street.

In relation to the proposed new terrace and stairways of approach at the western front, the Architect says: “The rustic terraces at that front have a plain and unfinished appearance, and show clearly the necessity of the proposed terrace-wall in order to connect the grounds with the building in a harmonious manner.”

Mr. Olmsted says, on this subject, “that attention should be called to the great defects of the present arrangement for entering the Capitol from the west. The present stairway was designed with reference to the original small central building, and was architecturally inadequate even for that. It now seems as the only direct means of access to the Capital from all the western part of the city, and is not only awkward and mean in appearance, but exceedingly inconvenient, and rapidly approaching a dangerous condition.

“The obliteration of the central walk and the completion of the entrance to the approach of the Capitol from Pennsylvania avenue which is designated on a scale corresponding to that of the enlarged Capitol, will make the defects more conspicuous.

“The immediate construction of the new stairways upon the plan favorably reported by the Committees of Public Buildings and Grounds in 1875, is much to be desired.”


RECONSTRUCTION OF THE INTERIOR DEPARTMENT BUILDING.


The destructive fire of September 24, by which a portion of the Interior Department building was destroyed, was made the subject of special report, dated October 12, 1877. The measures adopted for the protection of the exposed wings are deemed sufficient to secure the walls from further damage, and to protect the rooms beneath until such time as the reconstruction of the building shall be completed. A substantial temporary roof has been erected, the damaged flues repaired, and the exposed walls covered with brick laid in cement so as to secure them against the action of water and frost. The rooms vacated by the Land Office and Patent Office have been reoccupied, and the business of the department is carried on with but little inconvenience. Aside from the damage to the building, the only material loss reported is that of the models contained in the two wings, and out of what is left of these models it is believed that at least ten thousand can be saved by judicious and skillful treatment.

It is a subject of congratulation that all of the valuable records of the department were preserved, they having been stored in rooms that have proven practically fire-proof.

The prompt reconstruction of the building is a necessity, and I recommend that authority and means be asked from Congress for the prosecution of the work at the earliest practicable moment. In the rebuilding, two essentials, aside from the restoration of the destroyed model-halls, should be provided for. First, the erection of a fire-proof roof over the entire building; second, the creation of more room for the present and future wants of the department.

For many years past the present building has been too small to accommodate the several bureaus of the department. The Pension Office and Bureau of Education have long occupied quarters rented from private parties, and the Indian Office has recently been crowded out on account of the fire and the demand for room to accommodate the bureaus that remain. The taking of the census and the preservation of its bulky records require room impossible for the department to furnish without hiring from private individuals suitable buildings for the purpose. This condition of affairs is against public economy and injurious to the public service. In the reconstruction of the building, it is deemed feasible to so enlarge its capacity as to provide for the bureaus of the department. Whether the accomplishment of this end will be best promoted by the erection of a building across the court-yard, or by other means, must of necessity be left to the skilled architect to decide. As a means to secure the completest success in the reconstruction of the building, I would recommend that the Secretary of the Interior be authorized to invite competition in the submission of plans for the new structure, and to appoint a commission of three practical men skilled in the art of building to determine upon the best plan submitted.

I am, sir, very respectfully, your obedient servant,

C. SCHURZ,
Secretary of the Interior.
The President.