It affords me pleasure to say that our intercourse with Great Britain continues to be of a most friendly character.

The Government of Hawaii has indicated its willingness to continue for seven years the provisions of the existing reciprocity treaty.  Such continuance, in view of the relations of that country to the American system of States, should, in my judgment, be favored.

The revolution in Hayti against the established Government has terminated.  While it was in progress it became necessary to enforce our neutrality laws by instituting proceedings against individuals and vessels charged with their infringement.  These prosecutions were in all cases successful.

Much anxiety has lately been displayed by various European Governments, and especially by the Government of Italy, for the abolition of our import duties upon works of art.  It is well to consider whether the present discrimination in favor of the productions of American artists abroad is not likely to result, as they themselves seem very generally to believe it may, in the practical exclusion of our painters and sculptors from the rich fields for observation, study, and labor which they have hitherto enjoyed.

There is prospect that the long-pending revision of the foreign treaties of Japan may be concluded at a new conference to be held at Tokyo.  While this Government fully recognizes the equal and independent station of Japan in the community of nations, it would not oppose the general adoption of such terms of compromise as Japan may be disposed to offer in furtherance of a uniform policy of intercourse with Western nations.

During the past year the increasing good will between our own Government and that of Mexico has been variously manifested.  The treaty of commercial reciprocity concluded January 20, 1883, has been ratified and awaits the necessary tariff legislation of Congress to become effective.  This legislation will, I doubt not, be among the first measures to claim your attention.

A full treaty of commerce, navigation, and consular rights is much to be desired, and such a treaty I have reason to believe that the Mexican Government stands ready to conclude.

Some embarrassment has been occasioned by the failure of Congress at its last session to provide means for the due execution of the treaty of July 29, 1882, for the resurvey of the Mexican boundary and the relocation of boundary monuments.

With the Republic of Nicaragua a treaty has been concluded which authorizes the construction by the United States of a canal, railway, and telegraph line across the Nicaraguan territory.

By the terms of this treaty 60 miles of the river San Juan, as well as Lake Nicaragua, an inland sea 40 miles in width, are to constitute a part of the projected enterprise.

This leaves for actual canal construction 17 miles on the Pacific side and 36 miles on the Atlantic.  To the United States, whose rich territory on the Pacific is for the ordinary purposes of commerce practically cut off from communication by water with the Atlantic ports, the political and commercial advantages of such a project can scarcely be over-estimated.