Relations with Austria, Russia, Italy, Portugal, Turkey, and Belgium continue amicable, and marked by no incident of especial importance.

A change of the personal head of the Government of Egypt has taken place.  No change, however, has occurred in the relations between Egypt and the United States.  The action of the Egyptian Government in presenting to the city of New York one of the ancient obelisks, which possess such historic interest, is highly appreciated as a generous mark of international regard.  If prosperity should attend the enterprise of its transportation across the Atlantic, its erection in a conspicuous position in the chief commercial city of the nation will soon be accomplished.

The treaty recently made between Japan and the United States in regard to the revision of former commercial treaties it is now believed will be followed by similar action on the part of other treaty powers.  The attention of Congress is again invited to the subject of the indemnity funds received some years since from Japan and China, which, with their accumulated interest, now amount to considerable sums.  If any part of these funds is justly due to American citizens, they should receive it promptly; and whatever may have been received by this Government in excess of strictly just demands should in some form be returned to the nations to whom it equitably belongs.

The Government of China has signified its willingness to consider the question of the emigration of its subjects to the United States with a dispassionate fairness and to cooperate in such measures as may tend to prevent injurious consequences to the United States.  The negotiations are still proceeding, and will be pressed with diligence.

A question having arisen between China and Japan about the Lew Chew Islands, the United States Government has taken measures to inform those powers of its readiness to extend its good offices for the maintenance of peace if they shall mutually deem it desirable and find it practicable to avail themselves of the proffer.

It is a gratification to be able to announce that, through the judicious and energetic action of the military commanders of the two nations on each side of the Rio Grande, under the instructions of their respective Governments, raids and depredations have greatly decreased, and in the localities where formerly most destructive have now almost wholly ceased.  In view of this result, I entertain a confident expectation that the prevalence of quiet on the border will soon become so assured as to justify a modification of the present orders to our military commanders as to crossing the border, without encouraging such disturbances as would endanger the peace of the two countries.

The third installment of the award against Mexico under the claims commission of July 4, 1868, was duly paid, and has been put in course of distribution in pursuance of the act of Congress providing for the same.  This satisfactory situation between the two countries leads me to anticipate an expansion of our trade with Mexico and an increased contribution of capital and industry by our people to the development of the great resources of that country.  I earnestly commend to the wisdom of Congress the provision of suitable legislation looking to this result.