The third article of the treaty with Russia of March 30, 1867, by which Alaska was ceded to the United States, provides that the inhabitants of the ceded territory, with the exception of the uncivilized native tribes, shall be admitted to the enjoyment of all the rights of citizens of the United States and shall be maintained and protected in the free enjoyment of their liberty, property, and religion.  The uncivilized tribes are subject to such laws and regulations as the United States may from time to time adopt in regard to the aboriginal tribes of that country.

Both the obligations of this treaty and the necessities of the people require that some organized form of government over the Territory of Alaska be adopted.

There appears to be no law for the arrest of persons charged with common-law offenses, such as assault, robbery, and murder, and no magistrate authorized to issue or execute process in such cases.  Serious difficulties have already arisen from offenses of this character, not only among the original inhabitants, but among citizens of the United States and other countries who have engaged in mining, fishing, and other business operations within the territory.  A bill authorizing the appointment of justices of the peace and constables and the arrest and detention of persons charged with criminal offenses, and providing for an appeal to United States courts for the district of Oregon in suitable cases, will at a proper time be submitted to Congress.

The attention of Congress is called to the annual report of the Secretary of the Treasury on the condition of the public finances.

The ordinary revenues from all sources for the fiscal year ended June 30, 1879, were $273,827,184.46; the ordinary expenditures for the same period were $266,947,883.53, leaving a surplus revenue for the year of $6,879,300.93.

The receipts for the present fiscal year, ending June 30, 1880, actual and estimated, are as follows:  Actual receipts for the first quarter, commencing July 1, 1879, $79,843,663.61; estimated receipts for the remaining three quarters of the year, $208,156,336.39; total receipts for the current fiscal year, actual and estimated, $288,000,000.

The expenditures for the same period will be, actual and estimated, as follows:  For the quarter commencing July 1, 1879, actual expenditures, $91,683,385.10; and for the remaining three quarters of the year the expenditures are estimated at $172,316,614.90, making the total expenditures $264,000,000, and leaving an estimated surplus revenue for the year ending June 30, 1880, of $24,000,000.  The total receipts during the next fiscal year, ending June 30, 1881, estimated according to existing laws, will be $288,000,000, and the estimated ordinary expenditures for the same period will be $278,097,364.39, leaving a surplus of $9,902,635.61 for that year.

The large amount expended for arrears of pensions during the last and the present fiscal year, amounting to $21,747,249.60, has prevented the application of the full amount required by law to the sinking fund for the current year; but these arrears having been substantially paid, it is believed that the sinking fund can hereafter be maintained without any change of existing law.