shall deem it wise to do so, the concentration of the Indians on four or five large reservations, to be selected in different parts of the West, on which the different tribes shall be located; and if this shall in the judg ment of the commission not be wise, then to recommend the concentration of existing small agencies, where that can properly be done, and the reduction of the area of others to dimensions proportionate to the number of Indians now located thereon.

I expected to transmit herewith a statement showing the acreage of each reservation, distinguishing between farming land, pasture land, timber and waste land, by comparing which with the number of Indians on each reservation, it would be easy to determine whether in justice to the Indians and in the public interest any of the reservations could be reduced in size. The necessary information for such statement has not as yet been received, but I hope it will be in the possession of the Department at an early day.

The tribal relation is a hinderance to individual progress. It means communism so far at least as land is concerned. It interferes with the administration of both civil and criminal law among the members of the tribe, and among members of the tribe and non-members. The Indians should learn both to know the law and to administer it. They will not become law-abiding citizens until they shall so learn. In my judgment it would be well to select some tribe or tribes among those most advanced in civilization, and establish therein a form of local government as nearly like, as may be, to the system of county government prevailing in the State or Territory in which the reservations are located, allowing the Indians to elect corresponding county officers having corresponding power and authority to enforce such laws of the State or Territory as Congress may deem proper to declare in force on each reservation for local purposes. Should the experiment prove successful it would, I think, be a long step forward in the path the Indian must travel if he shall ever reach full and intelligent citizenship. The ballot and trial by jury are tools to which Indian hands are not accustomed, and would doubtless be used by them awkwardly for a time, but if the Indian is to become in truth a citizen, he must learn to use them, and he cannot so learn until they are placed within his reach. It is better to move in the right direction, however slowly and awkwardly, than not to move at all.

DEFINITION OF CRIMES.

Further legislation is, in my judgment, necessary for the definition and punishment of crime committed on reservations, whether by Indians in their dealings with each other, by Indians on white men, or by white men on Indians. A good deal of uncertainty exists on these points, which should be removed. It is also important that the liability of Indians who engage in hostile acts against the government and our people should be declared more clearly and fully. During the

present year the Apaches have committed many outrages in New Mexico and Arizona. A number of those thus engaged are now in confinement. Are they prisoners of war or criminals? Should not the liability of Indians thus engaged be clearly defined? Should not all crimes committed on reservations be clearly defined, the punishment thereof fixed, and the trial therefor provided in the United States courts? We know that polygamy prevails among most if not all the Indian tribes, and all history shows the degrading influence of that system wherever it prevails. We are endeavoring to civilize the Indians; should we not take measures to remove this obstacle to their civilization?

STOCK RAISING.

I am satisfied that some of the reservations now occupied by Indians are not well adapted to farming purposes, for the reason that the rainfall is not sufficient to make the raising of good crops reasonably certain. This is the case, in my opinion, in that portion of the Indian Territory occupied by the Cheyennes and Arapahoes near Fort Reno, and by the Kiowas and Comanches near Fort Sill. The soil is fertile but cannot be farmed profitably, as I am informed, without irrigation, the necessary works for which the Indians have neither the knowledge nor the means to establish.

It would, I think, be much better to teach the Indians on such reservations to become herdsmen, than to endeavor to teach them farming. If the government would, at each of the Agencies named, provide a herd of cattle to be cared for and managed by Indians, under the supervision of the agent, to be added to by annual purchases and natural increase, and not to be diminished for the use of the Indians until it should have attained such size as to be sufficient for all their wants, and then, under proper restrictions, turned over to them, with the distinct understanding that they must depend upon it and not upon the government, we would, in my judgment, make them self-sustaining much sooner than by attempting to make farmers of them on lands not adapted to that purpose.

THE INDIAN TRUST FUND.

This fund, amounting to $2,186,050, of which the Treasurer of the United States is custodian and the Secretary of the Interior is trustee, was invested in United States 5 per cent. bonds issued under acts of July 14, 1870, and January 20, 1871. On the 16th of May last, I was notified by the Treasury Department that interest would cease on these and other like bonds August 12, 1881, and the bonds be paid, but that if desired the bonds could be continued at three and a half per cent. Believing that such continuance would be to the profit of the fund, request to that end was duly made, and on the 28th of June, 1881, notice of such continuance was communicated to this department by the Treas

urer. I then requested the Treasurer to sell the bonds thus continued, which he did, selling $500,000 July 15, 1881, at 24 per cent. premium, and the balance, $1,686,050, August 11, 1881, at 2 per cent. premium, realizing a gross premium of $44,971 to the profit of the fund. The principal sum of $2,186,050 has been, under the law, covered into the Treasury and draws five per cent. interest, and the premium above stated has been, under the decision of the First Comptroller, carried to the interest account of the fund.

RIGHT OF WAY TO RAILROADS THROUGH INDIAN RESERVATIONS.

During the last fifteen months, quite a number of railroad corporations have made application to the department for permission to construct their railroads through Indian reservations, urging the necessity of supplying the needs of the white people on our frontier, and the civilizing influence of railroads on the Indians, as reasons why their requests should be granted.

The Chicago, Milwaukee and Saint Paul Railway Company obtained permission, on May 24, 1880, to cross the Sisseton Reserve, in Dakota, occupied by the Sisseton and Wahpeton Sioux. The treaty with these Indians provides for the construction of railroads, under certain conditions, which I am advised have been carried out.

The Republican Valley Railroad Company, of Nebraska, in October and December of 1880, obtained permission from the Otoes and Missourias to cross their reservation in Nebraska. The treaty with these Indians provides for the building of railroads.

The Saint Paul and Sioux City Railroad Company, on April 19, 1880, obtained permission to cross the Omaha Reservation, under the provision of the treaty with the Omahas which provides for the building of railroads.

The Carson and Colorado Railroad Company, on April 13, 1880, made an agreement with the Pi-Utes to cross the Walker River Reservation, Nevada, which was established by executive order. This privilege has not yet been confirmed.

The Dakota Central Railroad Company, on June 12, December 23, and December 31, 1880, entered into an agreement with the mixed tribes of Sioux living on the Sioux Reservation in Dakota, to build a railroad east and west through their reservation, in accordance with treaty stipulations.

The Chicago, Milwaukee and Saint Paul Railroad Company, on November 2, 1880, made a similar agreement with the same Indians to cross the Territory east and west.

The Oregon Railway and Navigation Company, on June 10, 1881, . in accordance with treaty stipulations, made an agreement with the Walla Wallas Cayuses, and Umatillas to construct its line across the Umatilla Reserve in Oregon.

On July 18, 1881, by authority of the President, on the application of

the Utah and Northern Railroad Company, an officer of the government obtained an agreement from the Shoshones and Bannocks living on the Fort Hall Reservation, Idaho, by which the right of way and the necessary lands for railroad purposes east and west across the reservation were granted on the payment of suitable compensation; the agreement, however, to be ratified by Congress. The treaty with these Indians makes no provisions for railroads.

On August 22, 1881, the Crow Indians, on the Crow Reserve, Montana, entered into an agreement permitting the Northern Pacific Railroad Company to construct its road through the reservation, subject to ratification by Congress, there being no treaty providing for the same.

On June 18, 1881, the Atchison and Nebraska Railroad Company obtained permission from the Iowa Indians on the Iowa Reserve, Nebraska, to construct a road north and south through their reservation, in accordance with treaty stipulations.

My purpose is to submit to Congress, with my recommendation, the above-mentioned agreements for such action as may be deemed appropriate.

In addition to the above negotiations, an agent of the department is now in the Choctaw country, with directions to submit to the constituted authorities of that Nation the application of several railroads which desire the privilege of constructing their lines through the Choctaw country north and south. If the Nation acts favorably on the applications, and the same meet my approval, I will also transmit them to Congress for its action.

In May, 1880, in accordance with the provisions of the treaty with the Ute Indians in Colorado, the President issued a proclamation giving permission to the Denver and Rio Grande Railroad Company to cross over and occupy so much of the Ute Reservation in Colorado as might be necessary for the right of way. Last spring, while the company was constructing its road under the proclamation, I received information that the Indians on the reservation had become alarmed at the presence of the working force of the railroad, and I immediately notified the president of the company that it must compensate the Indians for its occupation of their lands, or directions would be given to stop its construction. I have received no satisfactory answer to this and other similar communications, neither has any compensation been paid to the Indians for the occupation of their lands. I understand that the railroad has been constructed and is now in operation through that part of the Ute Reservation which is still occupied by Indians. I beg to recommend that suitable action be taken by Congress looking to an adjustment of the rights of the Denver and Rio Grande Railroad and the Indians in this transaction. It cannot be expected that the Indians will remain satisfied so long as the railroad company shall continue to make use of their lands without suitable compensation.

SAN CARLOS RESERVATION.

This reservation was established by Executive order on the 14th of December, 1872. Its boundary has not been surveyed. It is ascertained, however, that on the southern part of the reservation there are extensive deposits of coal. Fuel is scarce in the Territory of Arizona, in which this reservation lies, and hence the coal deposit is supposed to be very valuable. Parties have sought to contract with the Indians for the privilege of mining the coal, and during the last summer a contract of this kind was submitted to the department for approval. The contract was disapproved, as neither the Indians nor the department had lawful authority to make or approve such contract. I consider this matter of sufficient importance to call it to your special attention. The reservation is a large one, and might perhaps be so lessened without injury to the Indians as to exclude the deposits of coal, or, if this cannot be done, it may be enlarged to a corresponding extent elsewhere, and the coal bearing portion withdrawn from the reservation. The coal is and will be needed for the proper development of Arizona, but in providing for the sale of the land care should be taken that the coal is not monopolized by a single or a few parties to the injury of the Territory.

THE SIOUX AND THE PONCAS IN DAKOTA.

I refer with great pleasure to that portion of the report of the Commissioner of Indian Affairs in which is set forth a copy of an agreement signed by the principal chiefs of nearly all the different bands of Sioux, at a council held in this city in August last for the benefit of the Poncas in Dakota. The conduct of the Sioux chiefs who signed the agreement was manly and generous, and deserves, I think, high commendation. Should the agreement receive the necessary number of signatures of adult male Sioux, it will be submitted for the consideration of Congress.

DEFICIENCIES.

I consider it very important that the attention of Congress be specially called to the following extracts from the report of the Commissioner of Indian Affairs:

DEFICIENCY APPROPRIATIONS.

As stated under the head of "Appropriation," owing to the large increase in the price of beef paid during the fiscal year 1882, the appropriations for the Indian service daring 1882 will in many cases be insufficient. On the 20th of July last, the War Department turned over to this bureau 2,813 Sioux Indians, belonging to Sitting Bull's band, and for whose support no appropriation was made by Congress. Under your authority a deficiency of $195,000 was incurred for the purchase of the supplies and clothing for these Indians, and the amount will be included in the deficiency estimate to be submitted to Congress. Additional funds for the support of the following Indians for the present fiscal year, and for other purposes, will also be required, as follows: Support of Apaches in Arizona and New Mexico, $25,000; support of Arapahoes, Cheyennes, Apaches, Kiowas, Comanches, and Wichitas, $100,000; support of Black