n of the claims. Our
relations with the Republics of Central and South America and with the
Empire of Brazil have continued without serious change, further than
the temporary interruption of diplomatic intercourse with Venezuela
and with Guatemala. Amicable relations have already been fully
restored with Venezuela, and it is not doubted that all grounds of
misunderstanding with Guatemala will speedily be removed. From all
these countries there are favorable indications of a disposition on
the part of their Governments and people to reciprocate our efforts in
the direction of increased commercial intercourse.

The Government of the Samoan Islands has sent an envoy, in the person
of its secretary of state, to invite the Government of the United
States to recognize and protect their independence, to establish
commercial relations with their people, and to assist them in their
steps toward regulated and responsible government. The inhabitants
of these islands, having made considerable progress in Christian
civilization and the development of trade, are doubtful of their
ability to maintain peace and independence without the aid of some
stronger power. The subject is deemed worthy of respectful attention,
and the claims upon our assistance by this distant community will be
carefully considered.

The long commercial depression in the United States has directed
attention to the subject of the possible increase of our foreign trade
and the methods for its development, not only with Europe, but with
other countries, and especially with the States and sovereignties of
the Western Hemisphere. Instructions from the Department of State
were issued to the various diplomatic and consular officers of the
Government, asking them to devote attention to the question of methods
by which trade between the respective countries of their official
residence and the United States could be most judiciously fostered.
In obedience to these instructions, examinations and reports upon this
subject have been made by many of these officers and transmitted to
the Department, and the same are submitted to the consideration of
Congress.

The annual report of the Secretary of the Treasury on the state of the
finances presents important questions for the action of Congress, upon
some of which I have already remarked.

The revenues of the Government during the fiscal year ending June 30,
1877, were $269,000,586.62; the total expenditures for the same pe