The cordial character of our relations with Spain warrants the hope that by the continuance of methods of friendly negotiation much may be accomplished in the direction of an adjustment of pending questions and of the increase of our trade.  The extent and development of our trade with the island of Cuba invest the commercial relations of the United States and Spain with a peculiar importance.  It is not doubted that a special arrangement in regard to commerce, based upon the reciprocity provision of the recent tariff act, would operate most beneficially for both Governments.  This subject is now receiving attention.

The restoration of the remains of John Ericsson to Sweden afforded a gratifying occasion to honor the memory of the great inventor, to whose genius our country owes so much, and to bear witness to the unbroken friendship which has existed between the land which bore him and our own, which claimed him as a citizen.

On the 2d of September last the commission appointed to revise the proceedings of the commission under the claims convention between the United States and Venezuela of 1866 brought its labors to a close within the period fixed for that purpose.  The proceedings of the late commission were characterized by a spirit of impartiality and a high sense of justice, and an incident which was for many years the subject of discussion between the two Governments has been disposed of in a manner alike honorable and satisfactory to both parties.  For the settlement of the claim of the Venezuela Steam Transportation Company, which was the subject of a joint resolution adopted at the last session of Congress, negotiations are still in progress, and their early conclusion is anticipated.

The legislation of the past few years has evinced on the part of Congress a growing realization of the importance of the consular service in fostering our commercial relations abroad and in protecting the domestic revenues.  As the scope of operations expands increased provision must be made to keep up the essential standard of efficiency.  The necessity of some adequate measure of supervision and inspection has been so often presented that I need only commend the subject to your attention.

The revenues of the Government from all sources for the fiscal year ending June 30, 1890, were $463,963,080.55 and the total expenditures for the same period were $358,618,584.52.  The postal receipts have not heretofore been included in the statement of these aggregates, and for the purpose of comparison the sum of $60,882,097.92 should be deducted from both sides of the account.  The surplus for the year, including the amount applied to the sinking fund, was $105,344,496.03.  The receipts for 1890 were $16,030,923.79 and the expenditures $15,739,871 in excess of those of 1889.  The customs receipts increased $5,835,842.88 and the receipts from internal revenue $11,725,191.89, while on the side of expenditures that for pensions was $19,312,075.96 in excess of the preceding year.