I have been officially informed of the annexation of the States of the Church to the Kingdom of Italy, and the removal of the capital of that Kingdom to Rome.  In conformity with the established policy of the United States, I have recognized this change.  The ratifications of the new treaty of commerce between the United States and Italy have been exchanged.  The two powers have agreed in this treaty that private property at sea shall be exempt from capture in case of war between the two powers.  The United States have spared no opportunity of incorporating this rule into the obligation of nations.

The Forty-first Congress, at its third session, made an appropriation for the organization of a mixed commission for adjudicating upon the claims of citizens of the United States against Spain growing out of the insurrection in Cuba.  That commission has since been organized.  I transmit herewith the correspondence relating to its formation and its jurisdiction.  It is to be hoped that this commission will afford the claimants a complete remedy for their injuries.

It has been made the agreeable duty of the United States to preside over a conference at Washington between the plenipotentiaries of Spain and the allied South American Republics, which has resulted in an armistice, with the reasonable assurance of a permanent peace.

The intimate friendly relations which have so long existed between the United States and Russia continue undisturbed.  The visit of the third son of the Emperor is a proof that there is no desire on the part of his Government to diminish the cordiality of those relations.  The hospitable reception which has been given to the Grand Duke is a proof that on our side we share the wishes of that Government.  The inexcusable course of the Russian minister at Washington rendered it necessary to ask his recall and to decline to longer receive that functionary as a diplomatic representative.  It was impossible, with self-respect or with a just regard to the dignity of the country, to permit Mr. Catacazy to continue to hold intercourse with this Government after his personal abuse of Government officials, and during his persistent interferences, through various means, with the relations between the United States and other powers.  In accordance with my wishes, this Government has been relieved of further intercourse with Mr. Catacazy, and the management of the affairs of the imperial legation has passed into the hands of a gentleman entirely unobjectionable.

With Japan we continue to maintain intimate relations.  The cabinet of the Mikado has since the close of the last session of Congress selected citizens of the United States to serve in offices of importance in several departments of Government.  I have reason to think that this selection is due to an appreciation of the disinterestedness of the policy which the United States have pursued toward Japan.  It is our desire to continue to maintain this disinterested and just policy with China as well as Japan.  The correspondence transmitted herewith shows that there is no disposition on the part of this Government to swerve from its established course.