To the Senate and House of Representatives:

Notwithstanding the added burdens rendered necessary by the war, our people rejoice in a very satisfactory and steadily increasing degree of prosperity, evidenced by the largest volume of business ever recorded. Manufacture has been productive, agricultural pursuits have yielded abundant returns, labor in all fields of industry is better rewarded, revenue legislation passed by the present Congress has increased the Treasury's receipts to the amount estimated by its authors, the finances of the Government have been successfully administered and its credit advanced to the first rank, while its currency has been maintained at the world's highest standard.

Military service under a common flag and for a righteous cause has strengthened the national spirit and served to cement more closely than ever the fraternal bonds between every section of the country. A review of the relation of the United States to other powers, always appropriate, is this year of primary importance in view of the momentous issues which have arisen, demanding in one instance the ultimate determination by arms and involving far-reaching consequences which will require the earnest attention of the Congress.

In my last annual message very full consideration was given to the question of the duty of the Government of the United States toward Spain and the Cuban insurrection as being by far the most important problem with which we were then called upon to deal. The considerations then advanced and the exposition of the views therein expressed disclosed my sense of the extreme gravity of the situation.

Setting aside as logically unfounded or practically inadmissible the recognition of the Cuban insurgents as belligerents, the recognition of the independence of Cuba, neutral intervention to end the war by imposing a rational compromise between the contestants, intervention in favor of one or the other party, and forcible annexation of the island, I concluded it was honestly due to our friendly relations with Spain that she should be given a reasonable chance to realize her expectations of reform to which she had become irrevocably committed.

Within a few weeks previously she had announced comprehensive plans which it was confidently asserted would be efficacious to remedy the evils so deeply affecting our own country, so injurious to the true interests of the mother country as well as to those of Cuba, and so repugnant to the universal sentiment of humanity.

The ensuing month brought little sign of real progress toward the pacification of Cuba. The autonomous administrations set up in the capital and some of the principal cities appeared not to gain the favor of the inhabitants nor to be able to extend their influence to the large extent of territory held by the insurgents, while the military arm, obviously unable to cope with the still active rebellion, continued many of the most objectionable and offensive policies of the government that had preceded it.

No tangible relief was afforded the vast numbers of unhappy reconcentrados, despite the reiterated professions made in that regard and the amount appropriated by Spain to that end. The proffered expedient of zones of cultivation proved illusory. Indeed no less practical nor more delusive promises of succor could well have been tendered to the exhausted and destitute people, stripped of all that made life and home dear and herded in a strange region among unsympathetic strangers hardly less necessitous than themselves.

By the end of December the mortality among them had frightfully increased. Conservative estimates from Spanish sources placed the deaths among these distressed people at over 40 per cent from the time General Weyler's decree of reconcentration was enforced. With the acquiescence of the Spanish authorities, a scheme was adopted for relief by charitable contributions raised in this country and distributed, under the direction of the consul-general and the several consuls, by noble and earnest individual effort through the organized agencies of the American Red Cross.

Thousands of lives were thus saved, but many thousands more were inaccessible to such forms of aid. The war continued on the old footing, without comprehensive plan, developing only the same spasmodic encounters, barren of strategic result, that had marked the course of the earlier ten years' rebellion as well as the present insurrection from its start.

No alternative save physical exhaustion of either combatant, and therewithal the practical ruin of the island, lay in sight, but how far distant no one could venture to conjecture. At this juncture, on the 15th of February last, occurred the destruction of the battle ship Maine while rightfully lying in the harbor of Havana on a mission of international courtesy and good will -- a catastrophe the suspicious nature and horror of which stirred the nation's heart profoundly.

It is a striking evidence of the poise and sturdy good sense distinguishing our national character that this shocking blow, falling upon a generous people already deeply touched by preceding events in Cuba, did not move them to an instant desperate resolve to tolerate no longer the existence of a condition of danger and disorder at our doors that made possible such a deed, by whomsoever wrought.

Yet the instinct of justice prevailed, and the nation anxiously awaited the result of the searching investigation at once set on foot. The finding of the naval board of inquiry established that the origin of the explosion was external, by a submarine mine, and only halted through lack of positive testimony to fix the responsibility of its authorship.

All these things carried conviction to the most thoughtful, even before the finding of the naval court, that a crisis in our relations with Spain and toward Cuba was at hand. So strong was this belief that it needed but a brief Executive suggestion to the Congress to receive immediate answer to the duty of making instant provision for the possible and perhaps speedily probable emergency of war, and the remarkable, almost unique, spectacle was presented of a unanimous vote of both Houses, on the 9th of March, appropriating $50,000,000 "for the national defense and for each and every purpose connected therewith, to be expended at the discretion of the President." That this act of prevision came none too soon was disclosed when the application of the fund was undertaken.

Our coasts were practically undefended. Our Navy needed large provision for increased ammunition and supplies, and even numbers to cope with any sudden attack from the navy of Spain, which comprised modern vessels of the highest type of continental perfection. Our Army also required enlargement of men and munitions.

The details of the hurried preparation for the dreaded contingency are told in the reports of the Secretaries of War and of the Navy, and need not be repeated here. It is sufficient to say that the outbreak of war when it did come found our nation not unprepared to meet the conflict. Nor was the apprehension of coming strife confined to our own country.

It was felt by the continental powers, which on April 6, through their ambassadors and envoys, addressed to the Executive an expression of hope that humanity and moderation might mark the course of this Government and people, and that further negotiations would lead to an agreement which, while securing the maintenance of peace, would afford all necessary guaranties for the reestablishment of order in Cuba.

In responding to that representation I said I shared the hope the envoys had expressed that peace might be preserved in a manner to terminate the chronic condition of disturbance in Cuba, so injurious and menacing to our interests and tranquillity, as well as shocking to our sentiments of humanity; and while appreciating the humanitarian and disinterested character of the communication they had made on behalf of the powers, I stated the confidence of this Government, for its part, that equal appreciation would be shown for its own earnest and unselfish endeavors to fulfill a duty to humanity by ending a situation the indefinite prolongation of which had become insufferable.

Still animated by the hope of a peaceful solution and obeying the dictates of duty, no effort was relaxed to bring about a speedy ending of the Cuban struggle. Negotiations to this object continued actively with the Government of Spain, looking to the immediate conclusion of a six months' armistice in Cuba, with a view to effect the recognition of her people's right to independence.

Besides this, the instant revocation of the order of reconcentration was asked, so that the sufferers, returning to their homes and aided by united American and Spanish effort, might be put in a way to support themselves and, by orderly resumption of the well-nigh destroyed productive energies of the island, contribute to the restoration of its tranquillity and well-being.

Negotiations continued for some little time at Madrid, resulting in offers by the Spanish Government which could not but be regarded as inadequate. It was proposed to confide the preparation of peace to the insular parliament, yet to be convened under the autonomous decrees of November, 1897, but without impairment in any wise of the constitutional powers of the Madrid Government, which to that end would grant an armistice, if solicited by the insurgents, for such time as the general in chief might see fit to fix.

How and with what scope of discretionary powers the insular parliament was expected to set about the "preparation" of peace did not appear. If it were to be by negotiation with the insurgents, the issue seemed to rest on the one side with a body chosen by a fraction of the electors in the districts under Spanish control, and on the other with the insurgent population holding the interior country, unrepresented in the so-called parliament and defiant at the suggestion of suing for peace.

Grieved and disappointed at this barren outcome of my sincere endeavors to reach a practicable solution, I felt it my duty to remit the whole question to the Congress. In the message of April 11, 1898, I announced that with this last overture in the direction of immediate peace in Cuba and its disappointing reception by Spain the effort of the Executive was brought to an end.

I again reviewed the alternative courses of action which had been proposed, concluding that the only one consonant with international policy and compatible with our firm-set historical traditions was intervention as a neutral to stop the war and check the hopeless sacrifice of life, even though that resort involved "hostile constraint upon both the parties to the contest, as well to enforce a truce as to guide the eventual settlement." The grounds justifying that step were the interests of humanity, the duty to protect the life and property of our citizens in Cuba, the right to check injury to our commerce and people through the devastation of the island, and, most important, the need of removing at once and forever the constant menace and the burdens entailed upon our Government by the uncertainties and perils of the situation caused by the unendurable disturbance in Cuba.

I said: The long trial has proved that the object for which Spain has waged the war can not be attained. The fire of insurrection may flame or may smolder with varying seasons, but it has not been and it is plain that it can not be extinguished by present methods. The only hope of relief and repose from a condition which can no longer be endured is the enforced pacification of Cuba.

In the name of humanity, in the name of civilization, in behalf of endangered American interests which give us the right and the duty to speak and to act, the war in Cuba must stop. In view of all this the Congress was asked to authorize and empower the President to take measures to secure a full and final termination of hostilities between Spain and the people of Cuba and to secure in the island the establishment of a stable government, capable of maintaining order and observing its international obligations, insuring peace and tranquillity and the security of its citizens as well as our own, and for the accomplishment of those ends to use the military and naval forces of the United States as might be necessary, with added authority to continue generous relief to the starving people of Cuba.

The response of the Congress, after nine days of earnest deliberation, during which the almost unanimous sentiment of your body was developed on every point save as to the expediency of coupling the proposed action with a formal recognition of the Republic of Cuba as the true and lawful government of that island -- a proposition which failed of adoption -- the Congress, after conference, on the 19th of April, by a vote of 42 to 35 in the Senate and 311 to 6 in the House of Representatives, passed the memorable joint resolution declaring -- First.

That the people of the island of Cuba are, and of right ought to be, free and independent. Second. That it is the duty of the United States to demand, and the Government of the United States does hereby demand, that the Government of Spain at once relinquish its authority and government in the island of Cuba and withdraw its land and naval forces from Cuba and Cuban waters.

Third. That the President of the United States be, and he hereby is, directed and empowered to use the entire land and naval forces of the United States and to call into the actual service of the United States the militia of the several States to such extent as may be necessary to carry these resolutions into effect.

Fourth. That the United States hereby disclaims any disposition or intention to exercise sovereignty, jurisdiction, or control over said island except for the pacification thereof, and asserts its determination when that is accomplished to leave the government and control of the island to its people. This resolution was approved by the Executive on the next day, April 20. A copy was at once communicated to the Spanish minister at this capital, who forthwith announced that his continuance in Washington had thereby become impossible, and asked for his passports, which were given him.

He thereupon withdrew from Washington, leaving the protection of Spanish interests in the United States to the French ambassador and the Austro-Hungarian minister. Simultaneously with its communication to the Spanish minister here, General Woodford, the American minister at Madrid, was telegraphed confirmation of the text of the joint resolution and directed to communicate it to the Government of Spain with the formal demand that it at once relinquish its authority and government in the island of Cuba and withdraw its forces therefrom, coupling this demand with announcement of the intentions of this Government as to the future of the island, in conformity with the fourth clause of the resolution, and giving Spain until noon of April 23 to reply.

That demand, although, as above shown, officially made known to the Spanish envoy here, was not delivered at Madrid. After the instruction reached General Woodford on the morning of April 21, but before he could present it, the Spanish minister of state notified him that upon the President's approval of the joint resolution the Madrid Government, regarding the act as "equivalent to an evident declaration of war," had ordered its minister in Washington to withdraw, thereby breaking off diplomatic relations between the two countries and ceasing all official communication between their respective representatives.

General Woodford thereupon demanded his passports and quitted Madrid the same day. Spain having thus denied the demand of the United States and initiated that complete form of rupture of relations which attends a state of war, the executive powers authorized by the resolution were at once used by me to meet the enlarged contingency of actual war between sovereign states.

On April 22 I proclaimed a blockade of the north coast of Cuba, including ports on said coast between Cardenas and Bahia Honda, and the port of Cienfuegos, on the south coast of Cuba, and on the 23d I called for volunteers to execute the purpose of the resolution. By my message of April 25 the Congress was informed of the situation, and I recommended formal declaration of the existence of a state of war between the United States and Spain.

The Congress accordingly voted on the same day the act approved April 25, 1898, declaring the existence of such war from and including the 21st day of April, and reenacted the provision of the resolution of April 20 directing the President to use all the armed forces of the nation to carry that act into effect.|| Due notification of the existence of war as aforesaid was given April 25 by telegraph to all the governments with which the United States maintain relations, in order that their neutrality might be assured during the war.

The various governments responded with proclamations of neutrality, each after its own methods. It is not among the least gratifying incidents of the struggle that the obligations of neutrality were impartially discharged by all, often under delicate and difficult circumstances. In further fulfillment of international duty I issued, April 26, 1893, a proclamation announcing the treatment proposed to be accorded to vessels and their cargoes as to blockade, contraband, the exercise of the right of search, and the immunity of neutral flags and neutral goods under enemy's flag.

A similar proclamation was made by the Spanish Government. In the conduct of hostilities the rules of the Declaration of Paris, including abstention from resort to privateering, have accordingly been observed by both belligerents, although neither was a party to that declaration. Our country thus, after an interval of half a century of peace with all nations, found itself engaged in deadly conflict with a foreign enemy.

Every nerve was strained to meet the emergency. The response to the initial call for 125,000 volunteers was instant and complete, as was also the result of the second call, of May 25, for 75,000 additional volunteers. The ranks of the Regular Army were increased to the limits provided by the act of April 26, 1898. The enlisted force of the Navy on the 15th day of August, when it reached its maximum, numbered 24,123 men and apprentices.

One hundred and three vessels were added to the Navy by purchase, 1 was presented to the Government, 1 leased, and the 4 vessels of the International Navigation Company -- the St. Paul, St. Louis, New York, and Paris -- were chartered. In addition to these the revenue cutters and lighthouse tenders were turned over to the Navy Department and became temporarily a part of the auxiliary Navy.

The maximum effective fighting force of the Navy during the war, separated into classes, was as follows: Four battle ships of the first class, 1 battle ship of the second class, 2 armored cruisers, 6 coast-defense monitors, 1 armored ram, 12 protected cruisers, 3 unprotected cruisers, 18 gunboats, 1 dynamite cruiser, 11 torpedo boats;

Vessels of the old Navy, including monitors, 14. Auxiliary Navy: 11 auxiliary cruisers, 28 converted yachts, 27 converted tugs, 19 converted colliers, 15 revenue cutters, 4 light-house tenders, and 19 miscellaneous vessels.

Much alarm was felt along our entire Atlantic seaboard lest some attack might be made by the enemy. Every precaution was taken to prevent possible injury to our great cities lying along the coast. Temporary garrisons were provided, drawn from the State militia; infantry and light batteries were drawn from the volunteer force.

About 12,000 troops were thus employed. The coast signal service was established for observing the approach of an enemy's ships to the coast of the United States, and the Life-Saving and Light-House services cooperated, which enabled the Navy Department to have all portions of the Atlantic coast, from Maine to Texas, under observation.

The auxiliary Navy was created under the authority of Congress and was officered and manned by the Naval Militia of the several States. This organization patrolled the coast and performed the duty of a second line of defense. Under the direction of the Chief of Engineers submarine mines were placed at the most exposed points.

Before the outbreak of the war permanent mining casemates and cable galleries had been constructed at nearly all important harbors. Most of the torpedo material was not to be found in the market, and had to be specially manufactured. Under date of April 19 district officers were directed to take all preliminary measures short of the actual attaching of the loaded mines to the cables, and on April 22 telegraphic orders were issued to place the loaded mines in position.

The aggregate number of mines placed was 1,535, at the principal harbors from Maine to California. Preparations were also made for the planting of mines at certain other harbors, but owing to the early destruction of the Spanish fleet these mines were not placed. The Signal Corps was promptly organized, and performed service of the most difficult and important character.

Its operations during the war covered the electrical connection of all coast fortifications, the establishment of telephonic and telegraphic facilities for the camps at Manila, Santiago, and in Puerto Rico. There were constructed 300 miles of line at ten great camps, thus facilitating military movements from those points in a manner heretofore unknown in military administration.

Field telegraph lines were established and maintained under the enemy's fire at Manila, and later the Manila-Hongkong cable was reopened. In Puerto Rico cable communications were opened over a discontinued route, and on land the headquarters of the commanding officer was kept in telegraphic or telephonic communication with the division commanders on four different lines of operations.

There was placed in Cuban waters a completely outfitted cable ship, with war cables and cable gear, suitable both for the destruction of communications belonging to the enemy and the establishment of our own. Two ocean cables were destroyed under the enemy's batteries at Santiago. The day previous to the landing of General Shafter's corps, at Caimanera, within 20 miles of the landing place, cable communications were established and a cable station opened giving direct communication with the Government at Washington.

This service was invaluable to the Executive in directing the operations of the Army and Navy. With a total force of over 1,300, the loss was by disease in camp and field, officers and men included, only 5. The national-defense fund of $50,000,000 was expended in large part by the Army and Navy, and the objects for which it was used are fully shown in the reports of the several Secretaries.