anchised, giving an increase,
as was supposed, to the Union-loving and Union-supporting votes. If
_free_ in the full sense of the word, they would not disappoint this
expectation. Hence at the beginning of my first Administration the
work of reconstruction, much embarrassed by the long delay, virtually
commenced. It was the work of the legislative branch of the Government.
My province was wholly in approving their acts, which I did most
heartily, urging the legislatures of States that had not yet done so
to ratify the fifteenth amendment to the Constitution. The country
was laboring under an enormous debt, contracted in the suppression of
rebellion, and taxation was so oppressive as to discourage production.
Another danger also threatened us--a foreign war. The last difficulty
had to be adjusted, and was adjusted without a war and in a manner
highly honorable to all parties concerned. Taxes have been reduced
within the last seven years nearly $300,000,000, and the national debt
has been reduced in the same time over $435,000,000. By refunding
the 6 per cent bonded debt for bonds bearing 5 and 4-1/2 per cent
interest, respectively, the annual interest has been reduced from over
$130,000,000 in 1869 to but little over $100,000,000 in 1876. The
balance of trade has been changed from over $130,000,000 against the
United States in 1869 to more than $120,000,000 in our favor in 1876.

It is confidently believed that the balance of trade in favor of the
United States will increase, not diminish, and that the pledge of
Congress to resume specie payments in 1879 will be easily accomplished,
even in the absence of much-desired further legislation on the subject.

A policy has been adopted toward the Indian tribes inhabiting a large
portion of the territory of the United States which has been humane and
has substantially ended Indian hostilities in the whole land except in a
portion of Nebraska, and Dakota, Wyoming, and Montana Territories--the
Black Hills region and approaches thereto. Hostilities there have grown
out of the avarice of the white man, who has violated our treaty
stipulations in his search for gold. The question might be asked why
the Government has not enforced obedience to the terms of the treaty
prohibiting the occupation of the Black Hills region by whites. The
answer is simple: The first immigrants to the Black Hills were removed
by troops, but rumors of rich discoveries of gold took into that region
increase