$20,772,621.  This increase is chiefly in wheat, flour, meat, and dairy products and in manufactures of iron and steel and lumber.  There has been a large increase in the value of imports from all these countries since the commercial agreements went into effect, amounting to $74,294,525, but it has been entirely in imports from the American countries, consisting mostly of sugar, coffee, india rubber, and crude drugs.  The alarmed attention of our European competitors for the South American market has been attracted to this new American policy and to our acquisition and their loss of South American trade.

A treaty providing for the arbitration of the dispute between Great Britain and the United States as to the killing of seals in the Bering Sea was concluded on the 29th of February last.  This treaty was accompanied by an agreement prohibiting pelagic sealing pending the arbitration, and a vigorous effort was made during this season to drive out all poaching sealers from the Bering Sea.  Six naval vessels, three revenue cutters, and one vessel from the Fish Commission, all under the command of Commander Evans, of the Navy, were sent into the sea, which was systematically patrolled.  Some seizures were made, and it is believed that the catch in the Bering Sea by poachers amounted to less than 500 seals.  It is true, however, that in the North Pacific, while the seal herds were on their way to the passes between the Aleutian Islands, a very large number, probably 35,000, were taken.  The existing statutes of the United States do not restrain our citizens from taking seals in the Pacific Ocean, and perhaps should not unless the prohibition can be extended to the citizens of other nations.  I recommend that power be given to the President by proclamation to prohibit the taking of seals in the North Pacific by American vessels in case, either as the result of the findings of the Tribunal of Arbitration or otherwise, the restraints can be applied to the vessels of all countries.  The case of the United States for the Tribunal of Arbitration has been prepared with great care and industry by the Hon. John W. Foster, and the counsel who represent this Government express confidence that a result substantially establishing our claims and preserving this great industry for the benefit of all nations will be attained.

During the past year a suggestion was received through the British minister that the Canadian government would like to confer as to the possibility of enlarging upon terms of mutual advantage the commercial exchanges of Canada and of the United States, and a conference was held at Washington, with Mr. Blaine acting for this Government and the British minister at this capital and three members of the Dominion cabinet acting as commissioners on the part of Great Britain.  The conference developed the fact that the Canadian government was only prepared to offer to the United States in exchange for the concessions asked the admission of