The signing of a new commercial treaty with China, which took place at Shanghai on the 8th of October, is a cause for satisfaction.  This act, the result of long discussion and negotiation, places our commercial relations with the great Oriental Empire on a more satisfactory footing than they have ever heretofore enjoyed.  It provides not only for the ordinary rights and privileges of diplomatic and consular officers, but also for an important extension of our commerce by increased facility of access to Chinese ports, and for the relief of trade by the removal of some of the obstacles which have embarrassed it in the past.  The Chinese Government engages, on fair and equitable conditions, which will probably be accepted by the principal commercial nations, to abandon the levy of “liken” and other transit dues throughout the Empire, and to introduce other desirable administrative reforms.  Larger facilities are to be given to our citizens who desire to carry on mining enterprises in China.  We have secured for our missionaries a valuable privilege, the recognition of their right to rent and lease in perpetuity such property as their religious societies may need in all parts of the Empire.  And, what was an indispensable condition for the advance and development of our commerce in Manchuria, China, by treaty with us, has opened to foreign commerce the cities of Mukden, the capital of the province of Manchuria, and An-tung, an important port on the Yalu River, on the road to Korea.  The full measure of development which our commerce may rightfully expect can hardly be looked for until the settlement of the present abnormal state of things in the Empire; but the foundation for such development has at last been laid.

I call your attention to the reduced cost in maintaining the consular service for the fiscal year ending June 30, 1903, as shown in the annual report of the Auditor for the State and other Departments, as compared with the year previous.  For the year under consideration the excess of expenditures over receipts on account of the consular service amounted to $26,125.12, as against $96,972.50 for the year ending June 30, 1902, and $147,040.16 for the year ending June 30, 1901.  This is the best showing in this respect for the consular service for the past fourteen years, and the reduction in the cost of the service to the Government has been made in spite of the fact that the expenditures for the year in question were more than $20,000 greater than for the previous year.

The rural free-delivery service has been steadily extended.  The attention of the Congress is asked to the question of the compensation of the letter carriers and clerks engaged in the postal service, especially on the new rural free-delivery routes.  More routes have been installed since the first of July last than in any like period in the Department’s history.  While a due regard to economy must be kept in mind in the establishment of new routes, yet