Good faith requires us to give full effect to existing grants.  The time-honored and beneficent policy of setting apart certain sections of public land for educational purposes in the new States should be continued.  When ample provision shall have been made for these objects, I submit as a question worthy of serious consideration whether the residue of our national domain should not be wholly disposed of under the provisions the homestead and preemption laws.

In addition to the swamp and overflowed lands granted to the States in which they are situated, the lands taken under the agricultural-college acts and for internal-improvement purposes under the act of September, 1841, and the acts supplemental thereto, there had been conveyed up to the close of the last fiscal year, by patent or other equivalent title, to States and corporations 27,836,257.63 acres for railways, canals, and wagon roads.  It is estimated that an additional quantity of 174,735,523 acres is still due under grants for like uses.  The policy of thus aiding the States in building works of internal improvement was inaugurated more than forty years since in the grants to Indiana and Illinois, to aid those States in opening canals to connect the waters of the Wabash with those of Lake Erie and the waters of the Illinois with those of Lake Michigan.  It was followed, with some modifications, in the grant to Illinois of alternate sections of public land within certain limits of the Illinois Central Railway.  Fourteen States and sundry corporations have received similar subsidies in connection with railways completed or in process of construction.  As the reserved sections are rated at the double minimum, the sale of them at the enhanced price has thus in many instances indemnified the Treasury for the granted lands.  The construction of some of these thoroughfares has undoubtedly given a vigorous impulse to the development of our resources and the settlement of the more distant portions of the country.  It may, however, be well insisted that much of our legislation in this regard has been characterized by indiscriminate and profuse liberality.  The United States should not loan their credit in aid of any enterprise undertaken by States or corporations, nor grant lands in any instance, unless the projected work is of acknowledged national importance.  I am strongly inclined to the opinion that it is inexpedient and unnecessary to bestow subsidies of either description; but should Congress determine otherwise I earnestly recommend that the right of settlers and of the public be more effectually secured and protected by appropriate legislation.

During the year ending September 30, 1870, there were filed in the Patent Office 19,411 applications for patents, 3,374 caveats, and 160 applications for the extension of patents.  Thirteen thousand six hundred and twenty-two patents, including reissues and designs, were issued, 1,010 extended, and 1,089 allowed, but not issued by reason of the nonpayment of the final fees.  The receipts of the office during the year were $136,304.29 in excess of its expenditures.