MM MCKINLEY'S ANNUAL MESSAGE. The National Spirit Has Been Strengthened by the War. A BRIEF RECITAL OF THE STRIFE, Military Law Will Continue In Our New Possessions Until Congress Han l.pfilslatpd Otherwise. FRIENDLY RELATIONS WITH ENGLAND. I'titum fKnrrHirttgcri to l-'orm ft Cliivern mrnt for Ttlrniclr Austria MIDI lip. standing ,itl-.fartlnn for flip t.nttlmrr Klnt-CnngrcMtt t'rgril tn Art In lli'gurd to the Niriirsgnn ('sintf - (love rmncnt In Hrmpnthy Willi the Oar's PriM's Movement - Condition of (lie TrraiMiry. President McKlnley's message won submitted to Congress Inst .Monday. The war In carefully reviewed Irotn he ginning to end anil the president feel grateful over the result. Our new possession and their future govern ments, a well a the history of the r are considered In the following tin usage: Washington, December 6. The Pres ident's message was sent to Congres To the Senate and House of Represen tative: Notwithstanding the lidded burden rendered necessary by the war our people are In a very satisfactory and steadily Increasing degree of prosper ity, evidenced by the largest vol ume of business ever recorded. Manufacture has been produc tive, agricultural pursuits have yielded abundnnt returns, labor In nil arid of Industry Is better rewarded, revenue legislation passed by the pres ent Congress has Increased the treas ury's receipts to the amount estimated by Its authnrn; the finances of the gov ernment have been successfully admin istered and Its credit advanced to the first rank: while Its currency has been maintained at the world' highest standard. Military service under a eommon flag and for a righteous cause has strengthened the national spirit and served to cement more closely than ever the fraternal bonds between vi ry section of the country. A review of the relation of the flitted Htnte to other powers, always siproprtate, Is this year of primary importance In view of the momentous Issues which have arisen, demanding In one Instance the ultimate determin ation by arms and Involving far-reaching consequences which will Inspire the earnest attention of the Congress. In my last message very full consid eration was given to the question of the government of the United States toward Spain and the Cuban Insurrec tion as being by fnr the most impor tant problem with which we were then tailed upon to denl. The considerations then advanced, and the exposition of the views therein expressed, disclosed my sense of the evtreme gravity of the situation. Betting aside, as logically unfounded or practically Inadmissible, the recognition of the Cuban Insurg ents as belligerents, the recognition of Cuba, neutral intervention to end the . war by Imposing a rational compro mise betwemi the contestants, Inter vention In favor of one or the other party, and forcible annexation of the island I concluded it was honestly due to our friendly relations with Spain that she should be given a reasonable chance to realize her expectations of reform to which she had become irre vocably committed. Within a few weeks previously she had announced compre hensive plans which It wns confidently asserted would be elllcaclous to reme dy the evils so deeply affecting our country, so Injurious to the true in terests of the 'nether country as well as to those of Cuba, and so repugnant to the universal sentiment of human ity. The ensuing month brought little sign of real progress toward the pacifi cation -of Cuba. The autonomous ad ministration Bet up In the capital and some of the principal cities appeared not to gain the favor of the Inhabitants nor to be able to extend their influence to the large extent of territory held by the Insurgents, whllo the military arm. obviously unable to cope with the still active rebellion, continued many of the most objectionable and offensive poli cies of the government that had pre ceded It. No tangible relief was af forded the vast numbers of unhappy teooncentradoa, despite the reiterated professions made In that regard and the amount appropriated by Spain to that end. The proffered expedient of aor.es of cultivation proved illusory; Indeed, no less practical nor more de lusive promise of succor could wail have been tendered to the exhausted and destitute people, stripped of all that mado life and home dear, and herded In a strange region among unsympa thetic stranger hardly lea necessitous than themselve. I MEETING A CRISI8. . By the end of December the mortal ity among them had frightfully in creased. Conservative estimates from Spanish source placed the deaths among these distressed people at over 0 per cent, from the time Gen. Wey lr"s decree of reerncentratlon wa en forced. With the acquiescence of tho Spanish authorities a scheme was adopted for relief by charitable contri butions, raised In this country and dis tributed, under the direction of the consul general and the several consul, by noble and earnest ndlvldual effort through the organized agencies of the American Red Cross. Thousands of lives were thus saved, but many thou sands more were Inaccessible to such forms of aid. The war con-Jr.ued on the old footing without comprciseiislve plan, develop ing only the same spasmodic encount ers, barren of strategic result, that had marked the course of the earlier ten sears' rebellion as well as the present insurrection from Its start. No altern ative save physical exhaustion of either combatant, and therewithal the practical ruin of the Island, lay in sight, but how far distant no one could venture to conjecture. At this Juncture, on the 16th of Feb ruary last, occurred the destruction of the battleship Maine, while rightfully lying In the harbor of Havana on a mission of International courtesy and good will a catastrophe the suspicious nature and horror of which stirred the nation's heart profoundly. It is a striking evidence of the poise and sturdy good sense distinguishing our national character that this shocking blow, falling upon a generous people, already deeply touched by preceding veaU In Cuba, did not move them to an Instant, desperate resolve to toler ate no longer the existence of a condi tion of danger and disorder .at our floors that made possible such a deed by whomsoever wrought. Yet the In stinct of Justice prevailed and thp na tion anxiously awaited the result of the searching Investigation at once set on foot. The finding of the naval board or Inquiry established that th origin of the explosion was externally by n submnrlne mine, and onlv halted. through lark of positive testimony, to ox tnc responsibility or It author ship. All these things carried conviction to the most thoughtful, even before thi finding nf the naval hoard, that a crl sis In our relations with Spain and to ward Culm wan at hnnd. 80 strong whs mis poller that It needed but a nrter executive suggestion to the con gress to receive Immediate answer to the nuty of making instant provision for the possible and perhaps speedily ptolmble emergency of war. and the remarkable, ntinost unique, spectnclc presented or a unanimous vote of both hcus- on the 1Mb or March ap propriating f).-,n.ooo,non "for the nntlonnl defense and for each nnd everv pur pese connected therewith, to be ex tended st the discretion of the Prcul. dent." That this act of provision came none too soon was disclosed when the application nf the fund was under! ik en. Our coasts were-practically unde fended. Our navy needed inrge pro vision for Increased ammunition nnd supplies, and even number to cope with any sudden attack from the nnvy of Spain, which comprised modern ves sel of the highest type of continental perfection. Our army also required en largement nf men and munitions. The details of the hurried preparations foe the dreaded contingency are told In the reports or the secretaries or war and of the navy, and need not be repeated here. It Is sufficient to say that the outbreak of war. when II did mnu found our nation not unprepared to meet ine rontllct. PREPARING FOR HOSTILITIES. The maximum effective flirhtltiff force of the navy during the war, sep arated Into classes, was a follows: Four battleshp of the first class; 1 battleship of the second class: 2 arm ored cruisers', 8 coast defense monitor: 1 armored ram: 12 protected cruiser; 3 unprotected cruisers: IS gunboats; I dynamite cruiser; 11 torpedo boats; II vessel of the old navy, Including mon itors. Auxiliary navy: 11 auxiliary cruisers: 211 converted yachts; 27 con vener: tugs: is converted colliers: IS re venue cutters: 4 lighthouse tenders and 1ft miscellaneous vessels. Mucn alarm was felt alnns our entire Atlantic seaboard lest some attack might be made by the enemv. Everv precaution was taken to prevent pos sible injury to our great cities lying along the coast. Temporary garrisons were provided, drawn from the Kt.ite mllltla: Infantry and light batteries were drawn from the volunteer fore. About 12.000 troops were thu employ ed. The coast signal service was es tablished for observing the approach of an enemy's ships to the coast of the United States, and the life-saving nnd lighthouse services co-operated, which ennble-d the Navy department to have all portions of tho Atlantic ci-ast, from Maine to Texas, under ob servation. The auxiliary navy was created un der the authority of Congress and was olllcered and manned by the naval ml lltla of the several States. Thl or ganization patrolled the coast and per formed the duty cf a second line f de fense. t'nder the direction of the chief of erglneers, submarine mine were placed at the most eypnsed point. De fere the outbreak of the war. perma nent mining casemute and cable gal leries had been constructed at nearly all Important harbors. Most of the tor pedo material was n. t to be found In the mnrket, and had to bo specially manufactured. I'neler date of April li, district officer were directed to take all preliminary measures, short of me actual attaching of the loaded mines to the cables, and on April 22, telegraphle order were Issued to place the loaded mine In position. The ag gregate number of mines placed were 1.M5, at the prlnclpnl harbor from Maine to California. Preparations were also made for the planting of mine at certain other harbors, but owing to the early destruction of the Spanish fleet, these were not placed. The Signal Corps was promptly or ganised and performed service of the most difllcult and Important character. Its operation during the war rbvcreel the electrli'al connection of all roast fortifications, tho establishment of tel ephonic and telegraphic facilities for the camps at Manila, Santiago and In Porto Rico. There were constructed 800 miles of line at ten great camps, thus facilitating military movements from those points in a manner hereto fore unknown In military administra tion. Field telegraph line were es tablished and maintained under the enemy's tire at Manila, and Inter the Manila-Hongkong cable was reopened. MONET PROVIDED BV CONGRESS. In Porto Rico cable communication were opened over a discontinued route, and on land the headquarters of the commanding officer was kept In tele graphic communication with the divi sion commander on four different line Of operations. There was placed In Cuban waters a completly outfitted cable ship, with war cables und cable gear, suitable both for the destruction of communi cation belonging to tho enemy und the establishment of our own. Two ocean cables were destroyed under the enemy' batteries at Santiago, The day previous to the landing of Oen. Sharter'a corp at Calmanera, within 20 mile of the landing place, cable communications were established and a cable station opened, giving direct communication with the government at Washington. This service was In valuable to the executive in directing the operation of the army and navy. With a total force of over 1.300, the loss was by disease in camp and field, offi cer and men Included, only five. The national defense fund of lf.0,000, 000 was expended tn large part by the army and navy, and the object for which It wa used are fully ehown In the report of the several secretaries. It was a most timely appropriation, enabling the government to strengthen its defenses and make preparations greatly neded In case of war. This fund being Inadequate to the requirement of equipment and for the conduct of the war, the patriotism of the Congress provided the means in the war revenue act of July 13, by au thorizing a 3 per cent popular loan not to exceed 1400,000,000 and by levying additional Imposts and taxes. Of the authorized loan, 1200.000,000 were offer ed and promptly taken, the subscrip tions so far exceeding the call as to cover it many times over, while pre ference being given to the smaller bids, no single allotment exceeded $5,000. This was a most encouraging and significant result, showing the vast resources of the nation and the deter mination of the people to uphold their country's honor. It Is not within the province of the message to narrate tb history of the extraordinary war that followed the Spanish declaration of April 21, but a brief recital of Its more salient features Is appropriate. The first encounter of the war In point of date look place April 27, when a detachment of the niocKRdtng squadron made a recon naissance In force at Mntanzaa, shelled tne harbor forts and demolished ev eral new works In construction. DEWEY'S MAGNIFICENT VICTORY The next engagement wa destined to mnrk a memorable epoch In maritime warfare. Tho Pacific fleet. under 1 ominndore Ocnrge Dewey, had lain for some weeks at Hongkong. t'pon the colonlnl proclamation of neutrality being Issued and the customary 21 hours' notice being nlven. It. repaired to Mils Bny, nenr Hongkong, whence It proceeded to the Philippine Islands under telegraphic orders to rnpture or destroy the formidable Spnnlsh fleet men sssemmen at Manila. At dny brenk on the 1st of May the American force entered Manila May. nnd after a lew hours' engagement erTeef.-d the total destruction of the Spanish fleet, consisting of ten warships nnd a trans port, beside capturing the naval sta tlon nnd forts at C'nvlte, thus annlhl biting the Spnnlsh naval power In thi PaelMe ocean nnd comnletelv rnnlroll nig the bay of Manila, with the nblllty 10 inse tne city at will. Not a life was lost on our ships, the wounded num- nered only seven, while not a vessel was materially Injured. For this gal lant achievement the Congress, upon my recomniencintion, fitly bestowed upon tne actors preferment and sub stantlnl reward. 1 he effect nf this remarkable victory 1. run in- spirit or our people and upon the fortunes or the war was Instant. A prestige or Invincibility thereby at tached to our nrms, which continued throughout the struggle. Reinforce- mcnts were hurried to Mnnlln under tne command of Mai. (Jen. Merrill nnd lirmly established within sight of the capital, which Iny helpless before our urms. in the 7th day of May the Bovern. mcnt was advised officially of the vic tory of Manila, and nt once Inoiitrerl of the commander of our fleet what troops would be required. The Infor mation wns received on the Ifith day of May. nnd the first armv exnerlltlnn sailed May 2".. and arrived off Manila June jo. Other expeditions oon fol lowed, the total force consisting of 841 olllcers and 15,058 men. Only reluctnnce to cause needless loss of life nnd property prevented the early storming and capture of the city, and therewith the absolute military occupancy of the whole group. The Insurgents meanwhile had resumed the active hostilities suspended by the uncompleted truce of December. 1S97. Their forces Invested Manila from the northern and eastern side, but were constrained by Admiral Dewey and (len. Merrltt from attempting an as sault. It was fitting that whatever was done In the way of decisive opera tions In that quarter should be ac complished by the strong arm of the United States alone. Obeying the stern precept of war which enjoins the overcoming of the adversary and the extinction of hi power wherever as sailable as the speedy and sure means to win a pence, divided victory was not permissible, for no partition of the right and responsibilities attending the enforcement or a lust and advan tageous peace could be thought or. THE BLOCKADE OF CUBA. Following the comprehensive scheme or general attack, powerful forces were assembled at various points on our const to Invade Cuba and Porto Rico. Meanwhile, uuval demonstration were mnile at several exposed points. On May 11 the cruiser Wllmlnirton and trip-do boat Wlnslow were unsuccess ful in an attempt to silence the bat teries nt Cardenas, a anllant enslirn. Worth Bugley, and four seamen fall ing. These grievous fatalities were. strangely enough, among the very few wmcn occurred during our naval operation In thl extraordinary con flict. Meanwhile tho Spanish naval nre- pnrations had been pushed with great vigor. A powerful squadron, under Admiral Cervera. which had assembled at the Cape Verde Islands before the I'Utbreak of hostilities, had crossed tho ocean, and by Its errntlc move ments In the Caribbean sea delayed our military plans, while battling the pursuit of our fleets. For a time fears were felt lest the battleship Oregon and gunboat Marietta, nenrlng home after a long voyage from Snn Fran cisco of over 15.000 miles, might be surprised by Admiral Cervera' fleet, but their fortunate arrival dispelled apprehension and lent muedi needed reinforcement. Not until Admiral Cer vera took refuge In the harbor of San tiago de Cuba, about May 19. was It practicable to plan a systematic naval and military attack upon the Antillean possession of Spain. Several demonstrations occurred on the coasts of Cuba and Porto Rico in preparation for the larger event. ' On Mny i;i the North Atlantic squadron shelled San Junn de Porto Rico. On Mny 3d Commodore Schley's squadron bombarded the forts guarding the mouth of Santiago hnrbor. Neither at tack bad any mnterial result. It was evident that well ordered land opera tions were indlspensublo to achieve a decisive advantage. The next act in the war thrilled not alone the heart of our countrymen, but the world, by its exceptlonal'hcro Ism. On tho night of July 3 Lieut. Hobson, aided by seven devoted volun teer, blocked the narrow outlet from Snntlngo harbor by sinking the rolller Merrlmac In the channel, under a fierce fire from tho hore batteries, escaping with their live by a miracle, but fall ing into the hands of the Spaniards. It is a most gratifying Incident of the war that the bravery of this little band of heroes wu cordially appreciated by the Spanish admiral, who sent a flag of truce to notify Admiral Sampson of their safety and to compliment them on their daring act. They were subse quently exchanged July 7. By Jane 7 the cutting of the last Cu ban cable Isolated the Island. There after" the Invasion was vigorously prosecuted. On June 10. under a heavy protecting flro, a landing of 600 marines from the Oregon, Marhlehead und Yankee waa effected in Guantanamo bay. where It had been determined to establish a naval station. This im portant and essential port waa taUen from the enemy after severe fighting by the marines, who were the first or ganised force of the United States to land In Cuba. DESTRUCTION OF CERVERA'S SQUADRON. The position so won was held despite desperate attempts to dislodge our forces. On June 22 the advance of the Invading army, under MaJ, Gen. Shat ter, landed at Daiquiri, about 15 miles east of Santiago. This was accom plished under great difficulties, but with marvelous dispatch. On June 23, the movement against Santiago begun. On the 24th the first serious engage ment took place, In which the First and Tenth Cavalry and the First United States Volunteer Calvary, Gen. Young's brigade. Gen. Wheeler's divi sion, participated, losing heavily. By nightfall, however, ground within five miles of Santiago was won. The ad vantage was steadily Increased. On July 1 a severe battle took place, our force gaining the outwork of Santi ago; on the 2d El Caney and Ban Juan were taken, after a desperate charge, and the Investment of the city was completed. The navy co-operated by Khelllng the town aa U-.s coast forts. On the day following thl brilliant achievement of our land force, July t, occurred the decisive naval combat of the war. The Spanish lle-et attempt ing to leave the harbor, was met by the American squadron, under oommnnd of Commodore Sampson. In less than three hour nil the Spanish ships were destroyed, two torpedo bonis being sunk, and the Mnria Teresa, Almlrnnte Oquendo, Vlzcnya and Cristobal Colon driven ashore. The Spanish admiral and over 1.300 men were taken prisoners, while the enemy' loss of lire wns deplorably large, some 80O perishing. On our side hut one man was killed, on the Brooklyn, and one man serious ly wounded. Although our ships were repeatedly struck, not one was serious ly Injure-d. Where all so conspicuously distinguished themselves, from the commodore to the g-nners. and the unnnmid heroes In the boiler rooms, each nnd nil contributing toward the achievement of this astounding vic tory Tor which neither ancient nor modern hlrtory affords a parallel In the completeness of the event nnd the marvelous disproportion or casualties, It would be invidious to single out any for special honor. Deserved promotion has rewnrded tne more conspicuous actors the nation's prnfoundest grat itude Is due to nil of these brave men who, by their skill nnd devotion. In a few short hours crushed the sen power of Spain nnd wrought 11 triumph whose decisiveness nnd fur-reaching consequcni'cs ran scarcely he mens- ured. Nor can we be unmindful of the achievements of our builders, mechnn lo mid artisans for their skill In the construction of our warships. With the catastrophe of Santiago rpiun s errorts upon the ocean virtual ly censed. A spasmodic effort toward the end of June to send her Medltt- erranenn fleet, under Admiral Camara. to relieve Mnnlla was abundoned. the expedition being recalled afte-r It had passed through tho Sue canal. THE FALL OF SANTIAGO. The c- -ilatlon of Santiago follow ed. The ty was closely besieged by land, while the entrance of our ships into the harbor cut off all relief on that side and caused a true-e to follow for the removal of non-combatants, Protracted negotiations continued from July S to July in, when, under menace of Immediate assault, the pre liminaries of surrender were agreed upon. On the 17th Gen. Shaffer oc eupled the city. The capitulation em biaced the entire eastern end of Culm. The number of Spanish soldiers surren dered was 22,000. all of whom were subsequently conveyed to Spain at the charge of the United States. The story of this successful campaign Is told in the report or the secretary or war. which will be laid before you. The in dividual valor or olllcers and soldiers was never more strikingly shown than In the reveral engagements leading to the surrender or Santiago, whllo the prompt movements and successive victories won Instant and universal npplnuse. To those who Rallied this complete triumph which established the ascendency of the United Stntes upon land as the fight off Santiago had earnest and lasting gratitude of the nation Is unsparingly due. Nor should we alone remember the gallantry of the living: tne tiend claim our tears, and our losses by battle and disease must cloud any exultation at the result and teach us to weigh the awful cost of war, however rightful the cause or Ignnl the victory. With the fall or Santiago, the occu pation of Porto Rico become the next strategic necessity. Oen, Miles had previously been assigned to organize an expedition for that purpose. Fortu nately be was already at Santiago, where he had arrived on the 11th of July, with reinforcements for Gen. Shorter' army. With these troops, consisting of 8 41 Inrantry and artillery, two companies or engineers, one company or the Sig nal Corps, Gen. Mile left Guantanamo on July 21, having nine transoort. convoyed by the fleet under Cant. Hlg- ginsnn, witn the Massachusetts (flag ship), Dixie, Gloucester. Columbia and lnle, the two latter carry nir tronns. The expedition Innded at Guanlea, July 2.1. which port wns entered with little opposition. Here the fleet was Joined by me Annnpons and the wasp, while the I'urttan nnd Amnhitrlte went to Snn Juan and Joined the New Orleans. wmcn wns engaged In blockading that port. The mnjor-gcnernl commanding wns subsequently reinforced by (len. Sohwnn's brlgnde of the Third nrmv corps, by Oen. Wilson, with a part of his division, nnd also by Gen. Brooka with a part of Lis corps, numbering in all 10,973 officers nnd men. On July 27 he entered Ponce, one of the me.st important port In the is land, from which he thereafter directed operation for the capture of the Is lund. With the exception of encounter with the enemy at Guayum. Horml gunres, Ceiamo and Ynuco, and an at tack on a force landed at Cape Snn Juan, there was no serious resistance. The campaign was prosecuted with gient vigor, and by the last of August rouch of the island was In our posses sion, and the acquisition of the re mainder was only a matter of a short time. At most of the point In the I, land our troop were enthusiastically welcomed. Protestations of loyalty to the flag and gratitude for delivery from Spanish rule met our commander at eery stage. A a potent influence to ward peace, tho outcome of the Porto mean operation wa of great ronse- eiuenee nnd generous commendation Is due to those who participated In It. THE CAPTURE OF MANILA. The last scene of tho war waa enacted at Manila, its starting place. On Au gust 15, after a brief assault upon the works by the land forces. In which tho squadron assisted, the rapitnl sur- renuerea unconditionally. The casual ties were comparatively few. By this the conquest of tho Philippine islands. virtually accomplished when the Span ish capacity for resistance was de stroyed by Admiral Dewey's victory of tne ist or May, 'Was formally sealed. To Gen. Merrltt, his officers and men for their uncomplnJnlng and devoted service, and for their gallantry In ac tion, the nation la sincerely rrateful. Their long voyage was made with sin gular success, and the soldierly con duct of the men. most of whom were without previous experience In the military service, deserve unmeasured praise. The total casualties In killed and wounded In the armv durln th war with Spain were: Officer killed. 23: enlisted men killed, 257; total, 280; of- ncers wounaea, 113; enlisted men wounded. 1,484: total, 1,577. Of the navy, killed, 12: wounded. 87: died a result of wound, 1; Invalid from erv ice, 8: total. 01. It will be observed fhat while our navy was engaged In two great battles and In numerous perilous undertak ings, in blockade and bombardment, and more than 50.000 of our troops were transported to distant lands and were engaged in assault and sieges and bat- tie ana many skirmishes in unfamiliar territory, wa lost In both arm of the service a total of 1,868 killed and wounded: and In the entire campaign by lan and sea we did not lose a gun or a fWg or a transport or a ship, and witn ine exception or tn crew of the Merrlmao not a soldier or sailor wa taken prisoner. On August 7. 46 days after the data of the landing of Oen. Sha't i'j army In Cuba and 11 days from the surren der of Santiago, the United State troop commenced embarkation for home, and our entire fore'e wu return ed to the United State a early a August 24. There were absent from the United State- only two mouth. It Is fitting that t should bear testi mony to the pntrlotlsm and devotion of that inrge portion of our army which, although eager to be ordered to the post of greater exposure, fortu nately was not required outside of the United States. They did their whole duty, and like their eoimndcs nt the front, have earned the gratitude of the nation. In like manner, the olllcers nnd men e.f the army and of the navy who temalned In their department and slnllons faithfully performing most Important duties connected with the war, and whose requests for assign ment In the Held and nt sea I was com pelled to re fuse because their services were Indlspcnsabb- here, are entitled to the highest commendation. It Is my I e gret that there seems to be no suit able provision for their recognition. SPAIN SUES FOR PEACE. In this connection It Is a pleasure for me to mention In terms of cordial np pre'clatlon the timely and tlMfful work r the American National Red Cross, both In relief measures pri.puratory to tne campaigns, in san'tary assistance nt several of the camps of assemblage, and Inter, under the utile and exper ienced leadership m the president nf the society, Miss Clnra Barton. In the fields of buttle and In the hospitals nt the rront in Cuba. Working Jn con junction with the governmental au thorities nnd under their sanction and approval, and with the enthusinstie' co-operntlon ef many patriotic women nnd societies In the various Stntes, the Red Cross has fully mnlntiincd Its already high reputation for Intense earnestness and nblllty to exert Ise the noble purposes of Its International or ganization, thus Justifying the confi dence und support which It ha re ceived at the hnnd of the American people. To the members nnd ofllcers or this society, nnd all who alde-d them In their philanthropic work, the sincere nnd lasting gratitude of the soldiers and the public Is due and I fieely Recorded. In tracing these events we are con stantly reminded nf our obligations to the Divine Master, f,f His watchful e-are over us and His safe guidance, for which the nation mukes reverent ac knowledgment und offer humble prayer for the continuance of HI favor. The annihilation of Admiral Cer vera' fleet, followed by the capitula tion eif Santiago, having brought to Spanish government a realizing sense of the hopelessness of continuing a struggle now become wholly unequal, It made overture of peace through the French ambassador, whe, with the assent of his government, had acted as the fiienelly representative of Span ish Interests during the war. On the ifith of July M. Cambon presented a communication signed by the Duke of Almodovnr, the Spanish minister of state, Inviting the United States to state the term upon which It would be willing to make peace. On July 30, by a communication addressed to the Duke of Almondovar nnd handed to M. Cambon, the term of thl govern ment were announced, substantially as In the protocol afterward signed. On August 10 the Spanish reply, dated August 7, wn handed by M. Cambon to the secretary of state. It aciepteel unconditionally the terms Imposed as to Cuba, Perto Rico nnd an Island of the Ludrone groupe, but appeared to seek to introduce inadmissible reser vations In regard to our demand as to the Philippine Islands. Conceiving dls cuHslon on thl point could neither be practical nor profitable, I directed that In order to avoid misunderstanding, the matter should be forthwith closed by proposing the embodiment In u formal proteicol of the terms upon which the negotiations for peae'e were to be undertaken. The vague and In explicit suggestion of the Spnnlsh bote could not be accepted, the only reply being to present as a virtual ultimatum a draft or protocol embody ing the precise term tendered to Spain In our note of July 30, with ndded stipulations of detail as tn the ap pointment of commissioners to arrange lr the evacuation of the Spanish An tilles. A PROTOCOL SIGNED. On August 12 M. fumbnn announced bis receipt of full power to sign the protocol so submitted. Accordingly, em the afternoon of August 12, M, Cam bon, us the plenipotentiary of Spain, and Secretary of State, as the plenipo tentiary of the United States, signed u protocol providing: "Article 1. Spain will relinquish nil rlolm of sovereignty over und the title to Cubn. "Article 2. Spnln will cede to the United States the Islnnd of Porto Rico nnd other Islands now under Spnnlsh sovereignty In the West Indies, and also an island in the Ladrnncs, to be selected in the United States. "Article 3. The United States will oc. cupy and hold the city, bay and har bor of Manila pending the conclusion of a treaty of peace which shall deter mine the control, disposition and gov ernment of the Philippine." Tho fourth article provided for the appointment of Joint commission on the part of the United State and Spain, to meet in Havana and San Juan, respectively, for the purpose of arranging and carrying out the de tail of stipulated evacuation of Cubn, Potto Rico and other Spanish island in the West Indies. The fifth article provided for the ap pointment of not more than five com missioner on each lde to meet at Pari not later than October 1, and to ptuceed to the negotiation and conclu sion of a treaty of peace, aubject to ratification nceordlng to the respective constitutional form of the two coun tries. The sixth and lost article provided that upon the signature of the protocol hostilities between the two countrlea should be auspended, and that notice to that effect should be given a soon a possible by each government to the commander of Its military and naval rorces. Immedlatly upon the conclusion of the protocol I issued a proclamation of August 12 suspending hostilities on the part of the United States. The neces sary orders to that end were at once given by telegraph. The blorkade of the ports of Cuba and San Juan de Porto Rico was In like manner raised. On August 18 the muster out of 100,000 volunteers, or ss near that number aa was found to be practicable, was or dered. MILITARY COMMISSIONERS NAMED. On December 1. 101.165 officers and men had been mustered out and dis charged from the service and 9 002 more will bo mustered out by the loth of the month. Also a corresponding number of general and general staff officer have been honorably discharg ed from the service. The military com missions to superintend the evacuation or Cuba, rorto Klco. and the ad lucent islands were forthwith appointed: For Cuba MaJ. Oen. James F. Wade, Rear Admiral William T. Sampson. MaJ.-Gen. Matthew C. But ler; for Porto Rico, MaJ.-Gen. John R. Brcoke, Rear Admiral Wlnfleld S. Schley, Brig. Gen. Wm. O. Gordon, who -soon afterward met the Bpanlsh commissioners at Havana and an Juan respectively. The Porto Rlca.fl Joint commission speedily accomplished It task, and by October 18 the evacu ation of the Islnnd was completed. The United State flag wa raised over the Island at noort on that day. The ad ministration of Its affair ha been provisionally Intrusted to a military governor until the Congress shall otherwise provide. The Cuban Joint high commission hn not yet termin ated It Inbors. Owing to the difficul ties In the way of removing the large number of Spnnlsh troop still In Cubn, the evncuntlon ennnnt be com pleted before the 1st of January next. Pursunnt to the fifth article of the I protocol, I appointed William R. Day, inieiy secretary or state; Cushman K, Davis, William P. Fry and George Gray, senators of the United States, end Whitelaw Held, to be the peace eommlssloner on the part of the Uni ted Stntes. I'roi ceding In due season lo Pails, they there met on the first of October, five commissioner similarly appointed on the part of Spain. Their negotiations hnve made hopeful prog ress, so that I trust soon to be able to Iny a definite trenty of peace before the Senate, with a review of the step lending to It signature. I do not discuss irt this time the gov ernment fie Ihn hnOir, r.t lha ...... I session w hich will come te us as the result or the war with Spain. Such discussion will be appropriate arter the treaty or peuce shall be ratified. In the meantime nnd until the Congress ha legislated otherwise. It will be my duty to continue the military government which hnve existed since our occupa tion and give to the people serurlty In life and property and encouragement under a Just snil beneficent rule. OUR RELATIONS WITH CUBA. A soon as we are In possession of Cuba and hnve pacified the Island It will be necessary to give aid and di rection to Its people to form a govern ment for themselves. This should be undertaken at the earliest moment consistent with safety and assured stie'cess. It Is Important that our re lations with this people should be of the most friendly character, and our cr mtnerelal relation close and recip rocal. It should be our duty to assist In every proper way to build up the waste place of the Island, encourage the Industry of the people, and assist them to form a government which shall be free and Independent, thus re alizing tho best aspiration of the Cu ban people. Spanish rule must be replaced by a Just, benevolent and humane govern ment, created by the people of Cuba, capable of performing alk International obligation and which shall encourage thrift, Industry and prosperity and promote peace and good will among all the inhabitant, whatever may have been their relations In the past. NeithV- " ic.rnr mil I'annum Bllituiu Iluve B plae-e In the new government. Until there I complete tranquillity In the Isl and a stable government Inaugurated, military ocupatlon will continue. With the one exception of the rup ture with Spain, the Intercourse of the United States with the great family of nations ha been marked withcordlaity and the close of the eventful year find most eif the Issues that necessarily arise In the complex relation of sov ereign States adjustad or presenting no serious obstacle to a Just and hon orable solution by amicable tgree ment. THE LATTIMER RIOT INCIDENT. On the Pith of September, 187, a conflict took plaee nt Lattlmer, Pa , be tween a body of striking miners and the sheriff of Luzerne eeiunty and Ms deputies, in whlcn 22 miner were kill ed and 44 wounded, eif whom 10 of the killed and 12 of the wounded were Aus trian and Hungarian subject. This deplorable event naturally amused the solicitude of the Austro-Hungarlan government, which, on the assumption that the killing and wounding invol ved the unjustifiable misuse or ao thorlty, claimed reparation for tho sufferers. Apart from the 'arching Investigation and peremptory""ae tion of the authorities of Pennsylvania, the federnl executive took appropriate step to learn the merits of the case. In order to be In a position to meet the urgent complaint of a friendly power. The sheriff and hi deputies having been Indicted for murder, were tried and acquitted after protracted pro ceedings and the hearing of hundreds of witnessen on the ground that the killing was In the line of their official duty to uphold law and preserve public order in the State. A representative of the elepartment of Justice attended the trial for Indemnity for Its Injured Wlh nil the fncts In it possession, thi government expects to reach a har monious understanding on th subject with thnt of Austria-Hungary', ' not-'' withstanding the renewed claim of tho latter after learning the result of the trial for lndemnly for it Injured subjects. THE NICARAGUA CANAL. Tho Nicaragua carnl comm'Bslon, under the chairmanship r.f Rear Ad miral John G. Walker, appointed July 24. 1897, under tho authority of a pro vlslon In the sundry civil act of June 4 of that year, has nearly completed Ira I n linr, fl ,1.1 Miu B,1I ta I .. . . haustive inquiry Into the proper route, the feasibility and the cost of construc tion of an Inter-oceanlc canal by a Nicaraguan route. In view of over ture made ti the governments cf Nic aragua and Cota Rica, by other par tie for a new canal concession pre dicated on the assumed approaching; lapse of the contracts of the Maritime Canal company with those tat, I have not hesitated to express my con viction that consideration of expedi ency and international policy as be tween the several governments in terested In the construction and con trol of an Inter-oceanlc canal by this route require the maintenance of the status quo, until the canal commission shall have reported and the United State congress shall have the whole matter during the present session, without prejudice by reason of auy change in tho existing condition. Nevertheless, It appears that the government of Nicaragua, a one of it last sovereign acts before merging lta power In those of the newly found United State of Central America, haa granted an optional concession to an other association, to become effective on the expiration of the present rrra.nl'. It doe not appear what sprvey have been made or what route is proposed tinder thl contingent grant, so that an examination of tho feasibility of It plana 1 necessarily not embraced In tne repeirt of the canal commission.! All these circumstances suggest thai urgency of some definite action by the' congress at this session if the labors of the past are to be utilized and the linking of the Atlantic and Pailflo oceans by a practical waterway U to be realized. That the construction of such maritime highway Is now more than ever indispensable to that Intl. mate and ready inter-communlcatton between our eastern and western ea- nn&rni finmnnfinn r.v lha .1 expansion nf one lnfliittnr.a n n.i ------ j "iu .JUV,l, merce in ine r-acinc, anq that our nat lonal policy now more ImnernHveiv than ever call for It control by this government, are proposition which I doubt not the congress will duly ap preciate and wisely act upon. OUR RELATIONS WITH CHINA. The United State has not been an indifferent spectator of the extraordi nary event transpiring la the Chinese