The method for the treatment of the Indians adopted at the beginning of my first term has been steadily pursued, and with satisfactory and encouraging results.  It has been productive of evident improvement in the condition of that race, and will be continued, with only such modifications as further experience may indicate to be necessary.

The board heretofore appointed to take charge of the articles and materials pertaining to the War, the Navy, the Treasury, the Interior, and the Post-Office Departments, and the Department of Agriculture, the Smithsonian Institution, and the Commission of Food Fishes, to be contributed, under the legislation of last session, to the international exhibition to be held at Philadelphia during the centennial year 1876, has been diligent in the discharge of the duties which have devolved upon it; and the preparations so far made with the means at command give assurance that the governmental contribution will be made one of the marked characteristics of the exhibition.  The board has observed commendable economy in the matter of the erection of a building for the governmental exhibit, the expense of which it is estimated will not exceed, say, $80,000.  This amount has been withdrawn, under the law, from the appropriations of five of the principal Departments, which leaves some of those Departments without sufficient means to render their respective practical exhibits complete and satisfactory.  The exhibition being an international one, and the Government being a voluntary contributor, it is my opinion that its contribution should be of a character, in quality and extent, to sustain the dignity and credit of so distinguished a contributor.  The advantages to the country of a creditable display are, in an international point of view, of the first importance, while an indifferent or uncreditable participation by the Government would be humiliating to the patriotic feelings of our people themselves.  I commend the estimates of the board for the necessary additional appropriations to the favorable consideration of Congress.

The powers of Europe almost without exception, many of the South American States, and even the more distant Eastern powers have manifested their friendly sentiments toward the United States and the interest of the world in our progress by taking steps to join with us in celebrating the centennial of the nation, and I strongly recommend that a more national importance be given to this exhibition by such legislation and by such appropriation as will insure its success.  Its value in bringing to our shores innumerable useful works of art and skill, the commingling of the citizens of foreign countries and our own, and the interchange of ideas and manufactures will far exceed any pecuniary outlay we may make.

I transmit herewith the report of the Commissioner of Agriculture, together with the reports of the Commissioners, the board of audit, and the board of health of the District of Columbia, to all of which I invite your attention.