The policy which was adopted at the beginning of this Administration with regard to the management of the Indians has been as successful as its most ardent friends anticipated within so short a time.  It has reduced the expense of their management; decreased their forays upon the white settlements; tended to give the largest opportunity for the extension of the great railways through the public domain and the pushing of settlements into more remote districts of the country, and at the same time improved the condition of the Indians.  The policy will be maintained without any change excepting such as further experience may show to be necessary to render it more efficient.

The subject of converting the so-called Indian Territory south of Kansas into a home for the Indian, and erecting therein a Territorial form of government, is one of great importance as a complement of the existing Indian policy.  The question of removal to that Territory has within the past year been presented to many of the tribes resident upon other and less desirable portions of the public domain, and has generally been received by them with favor.  As a preliminary step to the organization of such a Territory, it will be necessary to confine the Indians now resident therein to farms of proper size, which should be secured to them in fee; the residue to be used for the settlement of other friendly Indians.  Efforts will be made in the immediate future to induce the removal of as many peaceably disposed Indians to the Indian Territory as can be settled properly without disturbing the harmony of those already there.  There is no other location now available where a people who are endeavoring to acquire a knowledge of pastoral and agricultural pursuits can be as well accommodated as upon the unoccupied lands in the Indian Territory.  A Territorial government should, however, protect the Indians from the inroads of whites for a term of years, until they become sufficiently advanced in the arts and civilization to guard their own rights, and from the disposal of the lands held by them for the same period.

LANDS.

During the last fiscal year there were disposed of out of the public lands 11,864,975 acres, a quantity greater by 1,099,270 acres than was disposed of the previous year.  Of this amount 1,370,320 acres were sold for cash, 389,460 acres located with military warrants, 4,671,332 acres taken for homesteads, 693,613 acres located with college scrip, 3,554,887 acres granted to railroads, 465,347 acres granted to wagon roads, 714,255 acres given to States as swamp land, 5,760 acres located by Indian scrip.  The cash receipts from all sources in the Land Office amounted to $3,218,100.  During the same period 22,016,608 acres of the public lands were surveyed, which, added to the quantity before surveyed, amounts to 583,364,780 acres, leaving 1,257,633,628 acres of the public lands still unsurveyed.

The reports from the subordinates of the Land Office contain interesting information in regard to their respective districts.  They uniformly mention the fruitfulness of the soil during the past season and the increased yields of all kinds of produce.  Even in those States and Territories where mining is the principal business agricultural products have exceeded the local demand, and liberal shipments have been made to distant points.