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President[ Theodore Roosevelt

         Date[ December 3, 1907

To the Senate and House of Representatives:

No nation has greater resources than ours, and I think it can be

truthfully said that the citizens of no nation possess greater energy

and industrial ability. In no nation are the fundamental business

conditions sounder than in ours at this very moment; and it is foolish,

when such is the case, for people to hoard money instead of keeping it

in sound banks; for it is such hoarding that is the immediate occasion

of money stringency. Moreover, as a rule, the business of our people is

conducted with honesty and probity, and this applies alike to farms and

factories, to railroads and banks, to all our legitimate commercial

enterprises.

In any large body of men, however, there are certain to be some who are

dishonest, and if the conditions are such that these men prosper or

commit their misdeeds with impunity, their example is a very evil thing

for the community. Where these men are business men of great sagacity

and of temperament both unscrupulous and reckless, and where the

conditions are such that they act without supervision or control and at

first without effective check from public opinion, they delude many

innocent people into making investments or embarking in kinds of

business that are really unsound. When the misdeeds of these

successfully dishonest men are discovered, suffering comes not only

upon them, but upon the innocent men whom they have misled. It is a

painful awakening, whenever it occurs; and, naturally, when it does

occur those who suffer are apt to forget that the longer it was

deferred the more painful it would be. In the effort to punish the

guilty it is both wise and proper to endeavor so far as possible to

minimize the distress of those who have been misled by the guilty. Yet

it is not possible to refrain because of such distress from striving to

put an end to the misdeeds that are the ultimate causes of the

suffering, and, as a means to this end, where possible to punish those

responsible for them. There may be honest differences of opinion as to

many governmental policies; but surely there can be no such differences

as to the need of unflinching perseverance in the war against

successful dishonesty.

In my Message to the Congress on December 5, 1905, I said:

"If the folly of man mars the general well-being, then those who are

innocent of the folly will have to pay part of the penalty incurred by

those who are guilty of the folly. A panic brought on by the

speculative folly of part of the business community would hurt the

whole business community; but such stoppage of welfare, though it might

be severe, would not be lasting. In the long run, the one vital factor

in the permanent prosperity of the country is the high individual

character of the average American worker, the average American citizen,

no matter whether his work be mental or manual, whether he be farmer or

wage-worker, business man or professional man.

"In our industrial and social system the interests of all men are so

closely intertwined that in the immense majority of cases a

straight-dealing man, who by his efficiency, by his ingenuity and

industry, benefits himself, must also benefit others. Normally, the man

of great productive capacity who becomes rich by guiding the labor of

many other men does so by enabling them to produce more than they could

produce without his guidance; and both he and they share in the

benefit, which comes also to the public at large. The superficial fact

that the sharing may be unequal must never blind us to the underlying

fact that there is this sharing, and that the benefit comes in some

degree to each man concerned.. Normally, the wageworker, the man of

small means, and the average consumer, as well as the average producer,

are all alike helped by making conditions such that the man of

exceptional business ability receives an exceptional reward for his

ability Something can be done by legislation to help the general

prosperity; but no such help of a permanently beneficial character can

be given to the less able and less fortunate save as the results of a

policy which shall inure to the advantage of all industrious and

efficient people who act decently; and this is only another way of

saying that any benefit which comes to the less able and less fortunate

must of necessity come even more to the more able and more fortunate.

If, therefore, the less fortunate man is moved by envy of his more

fortunate brother to strike at the conditions under which they have

both, though unequally, prospered, the result will assuredly be that

while damage may come to the one struck at, it will visit with an even

heavier load the one who strikes the blow. Taken as a whole, we must

all go up or go down together.

"Yet, while not merely admitting, but insisting upon this, it is also

true that where there is no governmental restraint or supervision some

of the exceptional men use their energies, not in ways that are for the

common good, but in ways which tell against this common good. The

fortunes amassed through corporate organization are now so large, and

vest such power in those that wield them, as to make it a matter of

necessity to give to the sovereign--that is, to the Government, which

represents the people as a whole--some effective power of supervision

over their corporate use. In order to insure a healthy social and

industrial life, every big corporation should be held responsible by,

and be accountable to, some sovereign strong enough to control its

conduct. I am in no sense hostile to corporations. This is an age of

combination, and any effort to prevent all combination will be not only

useless, but in the end vicious, because of the contempt for law which

the failure to enforce law inevitably produces. We should, moreover,

recognize in cordial and ample fashion the immense good effected by

corporate agencies in a country such as ours, and the wealth of

intellect, energy, and fidelity devoted to their service, and therefore

normally to the service of the public, by their officers and directors.

The corporation has come to stay, just as the trade union has come to

stay. Each can do and has done great good. Each should be favored so

long as it does good. But each should be sharply checked where it acts

against law and justice.

"The makers of our National Constitution provided especially that the

regulation of interstate commerce should come within the sphere of the

General Government. The arguments in favor of their taking this stand

were even then overwhelming. But they are far stronger to-day, in view

of the enormous development of great business agencies, usually

corporate in form. Experience has shown conclusively that it is useless

to try to get any adequate regulation and supervision of these great

corporations by State action. Such regulation and supervision can only

be effectively exercised by a sovereign whose jurisdiction is

coextensive with the field of work of the corporations--that is, by the

National Government. I believe that this regulation and supervision can

be obtained by the enactment of law by the Congress. Our steady aim

should be by legislation, cautiously and carefully undertaken, but

resolutely persevered in, to assert the sovereignty of the National

Government by affirmative action.

"This is only in form an innovation. In substance it is merely a

restoration; for from the earliest time such regulation of industrial

activities has been recognized in the action of the lawmaking bodies;

and all that I propose is to meet the changed conditions in such manner

as will prevent the Commonwealth abdicating the power it has always

possessed, not only in this country, but also in England before and

since this country became a separate nation.

"It has been a misfortune that the National laws on this subject have

hitherto been of a negative or prohibitive rather than an affirmative

kind, and still more that they have in part sought to prohibit what

could not be effectively prohibited, and have in part in their

prohibitions confounded what should be allowed and what should not be

allowed. It is generally useless to try to prohibit all restraint on

competition, whether this restraint be reasonable or unreasonable; and

where it is not useless it is generally hurtful. The successful

prosecution of one device to evade the law immediately develops another

device to accomplish the same purpose. What is needed is not sweeping

prohibition of every arrangement, good or bad, which may tend to

restrict competition, but such adequate supervision and regulation as

will prevent any restriction of competition from being to the detriment

of the public, as well as such supervision and regulation as will

prevent other abuses in no way connected with restriction of

competition."

I have called your attention in these quotations to what I have already

said because I am satisfied that it is the duty of the National

Government to embody in action the principles thus expressed.

No small part of the trouble that we have comes from carrying to an

extreme the national virtue of self-reliance, of independence in

initiative and action. It is wise to conserve this virtue and to

provide for its fullest exercise, compatible with seeing that liberty

does not become a liberty to wrong others. Unfortunately, this is the

kind of liberty that the lack of all effective regulation inevitably

breeds. The founders of the Constitution provided that the National

Government should have complete and sole control of interstate

commerce. There was then practically no interstate business save such

as was conducted by water, and this the National Government at once

proceeded to regulate in thoroughgoing and effective fashion.

Conditions have now so wholly changed that the interstate commerce by

water is insignificant compared with the amount that goes by land, and

almost all big business concerns are now engaged in interstate

commerce. As a result, it can be but partially and imperfectly

controlled or regulated by the action of any one of the several States;

such action inevitably tending to be either too drastic or else too

lax, and in either case ineffective for purposes of justice. Only the

National Government can in thoroughgoing fashion exercise the needed

control. This does not mean that there should be any extension of

Federal authority, for such authority already exists under the

Constitution in amplest and most far-reaching form; but it does mean

that there should be an extension of Federal activity. This is not

advocating centralization. It is merely looking facts in the face, and

realizing that centralization in business has already come and can not

be avoided or undone, and that the public at large can only protect

itself from certain evil effects of this business centralization by

providing better methods for the exercise of control through the

authority already centralized in the National Government by the

Constitution itself. There must be no ball in the healthy constructive

course of action which this Nation has elected to pursue, and has

steadily pursued, during the last six years, as shown both in the

legislation of the Congress and the administration of the law by the

Department of Justice. The most vital need is in connection with the

railroads. As to these, in my judgment there should now be either a

national incorporation act or a law licensing railway companies to

engage in interstate commerce upon certain conditions. The law should

be so framed as to give to the Interstate Commerce Commission power to

pass upon the future issue of securities, while ample means should be

provided to enable the Commission, whenever in its judgment it is

necessary, to make a physical valuation of any railroad. As I stated in

my Message to the Congress a year ago, railroads should be given power

to enter into agreements, subject to these agreements being made public

in minute detail and to the consent of the Interstate Commerce

Commission being first obtained. Until the National Government assumes

proper control of interstate commerce, in the exercise of the authority

it already possesses, it will be impossible either to give to or to get

from the railroads full justice. The railroads and all other great

corporations will do well to recognize that this control must come; the

only question is as to what governmental body can most wisely exercise

it. The courts will determine the limits within which the Federal

authority can exercise it, and there will still remain ample work

within each State for the railway commission of that State; and the

National Interstate Commerce Commission will work in harmony with the

several State commissions, each within its own province, to achieve the

desired end.

Moreover, in my judgment there should be additional legislation looking

to the proper control of the great business concerns engaged in

interstate business, this control to be exercised for their own benefit

and prosperity no less than for the protection of investors and of the

general public. As I have repeatedly said in Messages to the Congress

and elsewhere, experience has definitely shown not merely the unwisdom

but the futility of endeavoring to put a stop to all business

combinations. Modern industrial conditions are such that combination is

not only necessary but inevitable. It is so in the world of business

just as it is so in the world of labor, and it is as idle to desire to

put an end to all corporations, to all big combinations of capital, as

to desire to put an end to combinations of labor. Corporation and labor

union alike have come to stay. Each if properly managed is a source of

good and not evil. Whenever in either there is evil, it should be

promptly held to account; but it should receive hearty encouragement so

long as it is properly managed. It is profoundly immoral to put or keep

on the statute books a law, nominally in the interest of public

morality that really puts a premium upon public immorality, by

undertaking to forbid honest men from doing what must be done under

modern business conditions, so that the law itself provides that its

own infraction must be the condition precedent upon business success.

To aim at the accomplishment of too much usually means the

accomplishment of too little, and often the doing of positive damage.

In my Message to the Congress a year ago, in speaking of the antitrust

laws, I said:

"The actual working of our laws has shown that the effort to prohibit

all combination, good or bad, is noxious where it is not ineffective.

Combination of capital, like combination of labor, is a necessary

element in our present industrial system. It is not possible completely

to prevent it; and if it were possible, such complete prevention would

do damage to the body politic. What we need is not vainly to try to

prevent all combination, but to secure such rigorous and adequate

control and supervision of the combinations as to prevent their

injuring the public, or existing in such forms as inevitably to

threaten injury. It is unfortunate that our present laws should forbid

all combinations instead of sharply discriminating between those

combinations which do evil. Often railroads would like to combine for

the purpose of preventing a big shipper from maintaining improper

advantages at the expense of small shippers and of the general public.

Such a combination, instead of being forbidden by law, should be

favored. It is a public evil to have on the statute books a law

incapable of full enforcement, because both judges and juries realize

that its full enforcement would destroy the business of the country;

for the result is to make decent men violators of the law against their

will, and to put a premium on the behavior of the willful wrongdoers.

Such a result in turn tends to throw the decent man and the willful

wrongdoer into close association, and in the end to drag down the

former to the latter's level; for the man who becomes a lawbreaker in

one way unhappily tends to lose all respect for law and to be willing

to break it in many ways. No more scathing condemnation could be

visited upon a law than is contained in the words of the Interstate

Commerce Commission when, in commenting upon the fact that the numerous

joint traffic associations do technically violate the law, they say:

The decision of the United States Supreme Court in the Trans-Missouri

case and the Joint Traffic Association case has produced no practical

effect upon the railway operations of the country. Such associations,

in fact, exist now as they did before these decisions, and with the

same general effect. In justice to all parties, we ought probably to

add that it is difficult to see how our interstate railways could be

operated with due regard to the interest of the shipper and the railway

without concerted action of the kind afforded through these

associations.

"This means that the law as construed by the Supreme Court is such that

the business of the country can not be conducted without breaking it."

As I have elsewhere said:

"All this is substantially what I have said over and over again. Surely

it ought not to be necessary to say that it in no shape or way

represents any hostility to corporations as such. On the contrary, it

means a frank recognition of the fact that combinations of capital,

like combinations of labor, are a natural result of modern conditions

and of our National development. As far as in my ability lies my

endeavor is and will be to prevent abuse of power by either and to

favor both so long as they do well. The aim of the National Government

is quite as much to favor and protect honest corporations, honest

business men of wealth, as to bring to justice those individuals and

corporations representing dishonest methods. Most certainly there will

be no relaxation by the Government authorities in the effort to get at

any great railroad wrecker--any man who by clever swindling devices

robs investors, oppresses wage-workers, and does injustice to the

general public. But any such move as this is in the interest of honest

railway operators, of honest corporations, and of those who, when they

invest their small savings in stocks and bonds, wish to be assured that

these will represent money honestly expended for legitimate business

purposes. To confer upon the National Government the power for which I

ask would be a check upon overcapitalization and upon the clever

gamblers who benefit by overcapitalization. But it alone would mean an

increase in the value, an increase in the safety of the stocks and

bonds of law-abiding, honestly managed railroads, and would render it

far easier to market their securities. I believe in proper publicity.

There has been complaint of some of the investigations recently carried

on, but those who complain should put the blame where it belongs--upon

the misdeeds which are done in darkness and not upon the investigations

which brought them to light. The Administration is responsible for

turning on the light, but it is not responsible for what the light

showed. I ask for full power to be given the Federal Government,

because no single State can by legislation effectually cope with these

powerful corporations engaged in interstate commerce, and, while doing

them full justice, exact from them in return full justice to others.

The conditions of railroad activity, the conditions of our immense

interstate commerce, are such as to make the Central Government alone

competent to exercise full supervision and control.

"The grave abuses in individual cases of railroad management in the

past represent wrongs not merely to the general public, but, above all,

wrongs to fair-dealing and honest corporations and men of wealth,

because they excite a popular anger and distrust which from the very

nature of the case tends to include in the sweep of its resentment good

and bad alike. From the standpoint of the public I can not too

earnestly say that as soon as the natural and proper resentment aroused

by these abuses becomes indiscriminate and unthinking, it also becomes

not merely unwise and unfair, but calculated to defeat the very ends

which those feeling it have in view. There has been plenty of dishonest

work by corporations in the past. There will not be the slightest

let-up in the effort to hunt down and punish every dishonest man. But

the bulk of our business is honestly done. In the natural indignation

the people feel over the dishonesty, it is essential that they should

not lose their heads and get drawn into an indiscriminate raid upon all

corporations, all people of wealth, whether they do well or ill. Out of

any such wild movement good will not come, can not come, and never has

come. On the contrary, the surest way to invite reaction is to follow

the lead of either demagogue or visionary in a sweeping assault upon

property values and upon public confidence, which would work

incalculable damage in the business world and would produce such

distrust of the agitators that in the revulsion the distrust would

extend to honest men who, in sincere and same fashion, are trying to

remedy the evils."

The antitrust law should not be repealed; but it should be made both

more efficient and more in harmony with actual conditions. It should be

so amended as to forbid only the kind of combination which does harm to

the general public, such amendment to be accompanied by, or to be an

incident of, a grant of supervisory power to the Government over these

big concerns engaged in interstate business. This should be accompanied

by provision for the compulsory publication of accounts and the

subjection of books and papers to the inspection of the Government

officials. A beginning has already been made for such supervision by

the establishment of the Bureau of Corporations.

The antitrust law should not prohibit combinations that do no injustice

to the public, still less those the existence of which is on the whole

of benefit to the public. But even if this feature of the law were

abolished, there would remain as an equally objectionable feature the

difficulty and delay now incident to its enforcement. The Government

must now submit to irksome and repeated delay before obtaining a final

decision of the courts upon proceedings instituted, and even a

favorable decree may mean an empty victory. Moreover, to attempt to

control these corporations by lawsuits means to impose upon both the

Department of Justice and the courts an impossible burden; it is not

feasible to carry on more than a limited number of such suits. Such a

law to be really effective must of course be administered by an

executive body, and not merely by means of lawsuits. The design should

be to prevent the abuses incident to the creation of unhealthy and

improper combinations, instead of waiting until they are in existence

and then attempting to destroy them by civil or criminal proceedings.

A combination should not be tolerated if it abuse the power acquired by

combination to the public detriment. No corporation or association of

any kind should be permitted to engage in foreign or interstate

commerce that is formed for the purpose of, or whose operations create,

a monopoly or general control of the production, sale, or distribution

of any one or more of the prime necessities of life or articles of

general use and necessity. Such combinations are against public policy;

they violate the common law; the doors of the courts are closed to

those who are parties to them, and I believe the Congress can close the

channels of interstate commerce against them for its protection. The

law should make its prohibitions and permissions as clear and definite

as possible, leaving the least possible room for arbitrary action, or

allegation of such action, on the part of the Executive, or of

divergent interpretations by the courts. Among the points to be aimed

at should be the prohibition of unhealthy competition, such as by

rendering service at an actual loss for the purpose of crushing out

competition, the prevention of inflation of capital, and the

prohibition of a corporation's making exclusive trade with itself a

condition of having any trade with itself. Reasonable agreements

between, or combinations of, corporations should be permitted, provided

they are submitted to and approved by some appropriate Government body.

The Congress has the power to charter corporations to engage in

interstate and foreign commerce, and a general law can be enacted under

the provisions of which existing corporations could take out Federal

charters and new Federal corporations could be created. An essential

provision of such a law should be a method of predetermining by some

Federal board or commission whether the applicant for a Federal charter

was an association or combination within the restrictions of the

Federal law. Provision should also be made for complete publicity in

all matters affecting the public and complete protection to the

investing public and the shareholders in the matter of issuing

corporate securities. If an incorporation law is not deemed advisable,

a license act for big interstate corporations might be enacted; or a

combination of the two might be tried. The supervision established

might be analogous to that now exercised over national banks. At least,

the antitrust act should be supplemented by specific prohibitions of

the methods which experience has shown have been of most service in

enabling monopolistic combinations to crush out competition. The real

owners of a corporation should be compelled to do business in their own

name. The right to hold stock in other corporations should hereafter be

denied to interstate corporations, unless on approval by the Government

officials, and a prerequisite to such approval should be the listing

with the Government of all owners and stockholders, both by the

corporation owning such stock and by the corporation in which such

stock is owned.

To confer upon the National Government, in connection with the

amendment I advocate in the antitrust law, power of supervision over

big business concerns engaged in interstate commerce, would benefit

them as it has benefited the national banks. In the recent business

crisis it is noteworthy that the institutions which failed were

institutions which were not under the supervision and control of the

National Government. Those which were under National control stood the

test.

National control of the kind above advocated would be to the benefit of

every well-managed railway. From the standpoint of the public there is

need for additional tracks, additional terminals, and improvements in

the actual handling of the railroads, and all this as rapidly as

possible. Ample, safe, and speedy transportation facilities are even

more necessary than cheap transportation. Therefore, there is need for

the investment of money which will provide for all these things while

at the same time securing as far as is possible better wages and

shorter hours for their employees. Therefore, while there must be just

and reasonable regulation of rates, we should be the first to protest

against any arbitrary and unthinking movement to cut them down without

the fullest and most careful consideration of all interests concerned

and of the actual needs of the situation. Only a special body of men

acting for the National Government under authority conferred upon it by

the Congress is competent to pass judgment on such a matter.

Those who fear, from any reason, the extension of Federal activity will

do well to study the history not only of the national banking act but

of the pure-food law, and notably the meat inspection law recently

enacted. The pure-food law was opposed so violently that its passage

was delayed for a decade; yet it has worked unmixed and immediate good.

The meat inspection law was even more violently assailed; and the same

men who now denounce the attitude of the National Government in seeking

to oversee and control the workings of interstate common carriers and

business concerns, then asserted that we were "discrediting and ruining

a great American industry." Two years have not elapsed, and already it

has become evident that the great benefit the law confers upon the

public is accompanied by an equal benefit to the reputable packing

establishments. The latter are better off under the law than they were

without it. The benefit to interstate common carriers and business

concerns from the legislation I advocate would be equally marked.

Incidentally, in the passage of the pure-food law the action of the

various State food and dairy commissioners showed in striking fashion

how much good for the whole people results from the hearty cooperation

of the Federal and State officials in securing a given reform. It is

primarily to the action of these State commissioners that we owe the

enactment of this law; for they aroused the people, first to demand the

enactment and enforcement of State laws on the subject, and then the

enactment of the Federal law, without which the State laws were largely

ineffective. There must be the closest cooperation between the National

and State governments in administering these laws.

In my Message to the Congress a year ago I spoke as follows of the

currency:

"I especially call your attention to the condition of our currency

laws. The national-bank act has ably served a great purpose in aiding

the enormous business development of the country, and within ten years

there has been an increase in circulation per capita from $21.41 to

$33.08. For several years evidence has been accumulating that

additional legislation is needed. The recurrence of each crop season

emphasizes the defects of the present laws. There must soon be a

revision of them, because to leave them as they are means to incur

liability of business disaster. Since your body adjourned there has

been a fluctuation in the interest on call money from 2 per cent to 30

percent, and the fluctuation was even greater during the preceding six

months. The Secretary of the Treasury had to step in and by wise action

put a stop to the most violent period of oscillation. Even worse than

such fluctuation is the advance in commercial rates and the uncertainty

felt in the sufficiency of credit even at high rates. All commercial

interests suffer during each crop period. Excessive rates for call

money in New York attract money from the interior banks into the

speculative field. This depletes the fund that would otherwise be

available for commercial uses, and commercial borrowers are forced to

pay abnormal rates, so that each fall a tax, in the shape of increased

interest charges, is placed on the whole commerce of the country.

"The mere statement of these facts shows that our present system is

seriously defective. There is need of a change. Unfortunately, however,

many of the proposed changes must be ruled from consideration because

they are complicated, are not easy of comprehension, and tend to

disturb existing rights and interests. We must also rule out any plan

which would materially impair the value of the United States 2 per cent

bonds now pledged to secure circulation, the issue of which was made

under conditions peculiarly creditable to the Treasury. I do not press

any especial plan. Various plans have recently been proposed by expert

committees of bankers. Among the plans which are possibly feasible and

which certainly should receive your consideration is that repeatedly

brought to your attention by the present Secretary of the Treasury, the

essential features of which have been approved by many prominent

bankers and business men. According to this plan national banks should

be permitted to issue a specified proportion of their capital in notes

of a given kind, the issue to be taxed at so high a rate as to drive

the notes back when not wanted in legitimate trade. This plan would not

permit the issue of currency to give banks additional profits, but to

meet the emergency presented by times of stringency.

"I do not say that this is the right system. I only advance it to

emphasize my belief that there is need for the adoption of some system

which shall be automatic and open to all sound banks, so as to avoid

all possibility of discrimination and favoritism. Such a plan would

tend to prevent the spasms of high money and speculation which now

obtain in the New York market; for at present there is too much

currency at certain seasons of the year, and its accumulation at New

York tempts bankers to lend it at low rates for speculative purposes;

whereas at other times when the crops are being moved there is urgent

need for a large but temporary increase in the currency supply. It must

never be forgotten that this question concerns business men generally

quite as much as bankers; especially is this true of stockmen, farmers,

and business men in the West; for at present at certain seasons of the

year the difference in interest rates between the East and the West is

from 6 to 10 per cent, whereas in Canada the corresponding difference

is but 2 per cent. Any plan must, of course, guard the interests of

western and southern bankers as carefully as it guards the interests of

New York or Chicago bankers, and must be drawn from the standpoints of

the farmer and the merchant no less than from the standpoints of the

city banker and the country banker."

I again urge on the Congress the need of immediate attention to this

matter. We need a greater elasticity in our currency; provided, of

course, that we recognize the even greater need of a safe and secure

currency. There must always be the most rigid examination by the

National authorities. Provision should be made for an emergency

currency. The emergency issue should, of course, be made with an

effective guaranty, and upon conditions carefully prescribed by the

Government. Such emergency issue must be based on adequate securities

approved by the Government, and must be issued under a heavy tax. This

would permit currency being issued when the demand for it was urgent,

while securing its requirement as the demand fell off. It is worth

investigating to determine whether officers and directors of national

banks should ever be allowed to loan to themselves. Trust companies

should be subject to the same supervision as banks; legislation to this

effect should be enacted for the District of Columbia and the

Territories.

Yet we must also remember that even the wisest legislation on the

subject can only accomplish a certain amount. No legislation can by any

possibility guarantee the business community against the results of

speculative folly any more than it can guarantee an individual against

the results of his extravagance. When an individual mortgages his house

to buy an automobile he invites disaster; and when wealthy men, or men

who pose as such, or are unscrupulously or foolishly eager to become

such, indulge in reckless speculation--especially if it is accompanied

by dishonesty--they jeopardize not only their own future but the future

of all their innocent fellow-citizens, for the expose the whole

business community to panic and distress.

The income account of the Nation is in a most satisfactory condition.

For the six fiscal years ending with the 1st of July last, the total

expenditures and revenues of the National Government, exclusive of the

postal revenues and expenditures, were, in round numbers, revenues,

$3,465,000,0000, and expenditures, $3,275,000,000. The net excess of

income over expenditures, including in the latter the fifty millions

expended for the Panama Canal, was one hundred and ninety million

dollars for the six years, an average of about thirty-one millions a

year. This represents an approximation between income and outgo which

it would be hard to improve. The satisfactory working of the present

tariff law has been chiefly responsible for this excellent showing.

Nevertheless, there is an evident and constantly growing feeling among

our people that the time is rapidly approaching when our system of

revenue legislation must be revised.

This country is definitely committed to the protective system and any

effort to uproot it could not but cause widespread industrial disaster.

In other words, the principle of the present tariff law could not with

wisdom be changed. But in a country of such phenomenal growth as ours

it is probably well that every dozen years or so the tariff laws should

be carefully scrutinized so as to see that no excessive or improper

benefits are conferred thereby, that proper revenue is provided, and

that our foreign trade is encouraged. There must always be as a minimum

a tariff which will not only allow for the collection of an ample

revenue but which will at least make good the difference in cost of

production here and abroad; that is, the difference in the labor cost

here and abroad, for the well-being of the wage-worker must ever be a

cardinal point of American policy. The question should be approached

purely from a business standpoint; both the time and the manner of the

change being such as to arouse the minimum of agitation and disturbance

in the business world, and to give the least play for selfish and

factional motives. The sole consideration should be to see that the sum

total of changes represents the public good. This means that the

subject can not with wisdom be dealt with in the year preceding a

Presidential election, because as a matter of fact experience has

conclusively shown that at such a time it is impossible to get men to

treat it from the standpoint of the public good. In my judgment the

wise time to deal with the matter is immediately after such election.

When our tax laws are revised the question of an income tax and an

inheritance tax should receive the careful attention of our

legislators. In my judgment both of these taxes should be part of our

system of Federal taxation. I speak diffidently about the income tax

because one scheme for an income tax was declared unconstitutional by

the Supreme Court; while in addition it is a difficult tax to

administer in its practical working, and great care would have to be

exercised to see that it was not evaded by the very men whom it was

most desirable to have taxed, for if so evaded it would, of course, be

worse than no tax at all; as the least desirable of all taxes is the

tax which bears heavily upon the honest as compared with the dishonest

man. Nevertheless, a graduated income tax of the proper type would be a

desirable feature of Federal taxation, and it is to be hoped that one

may be devised which the Supreme Court will declare constitutional. The

inheritance tax, however, is both a far better method of taxation, and

far more important for the purpose of having the fortunes of the

country bear in proportion to their increase in size a corresponding

increase and burden of taxation. The Government has the absolute right

to decide as to the terms upon which a man shall receive a bequest or

devise from another, and this point in the devolution of property is

especially appropriate for the imposition of a tax. Laws imposing such

taxes have repeatedly been placed upon the National statute books and

as repeatedly declared constitutional by the courts; and these laws

contained the progressive principle, that is, after a certain amount is

reached the bequest or gift, in life or death, is increasingly burdened

and the rate of taxation is increased in proportion to the remoteness

of blood of the man receiving the bequest. These principles are

recognized already in the leading civilized nations of the world. In

Great Britain all the estates worth $5,000 or less are practically

exempt from death duties, while the increase is such that when an

estate exceeds five millions of dollars in value and passes to a

distant kinsman or stranger in blood the Government receives all told

an amount equivalent to nearly a fifth of the whole estate. In France

so much of an inheritance as exceeds $10,000,000 pays over a fifth to

the State if it passes to a distant relative. The German law is

especially interesting to us because it makes the inheritance tax an

imperial measure while allotting to the individual States of the Empire

a portion of the proceeds and permitting them to impose taxes in

addition to those imposed by the Imperial Government. Small

inheritances are exempt, but the tax is so sharply progressive that

when the inheritance is still not very large, provided it is not an

agricultural or a forest land, it is taxed at the rate of 25 per cent

if it goes to distant relatives. There is no reason why in the United

States the National Government should not impose inheritance taxes in

addition to those imposed by the States, and when we last had an

inheritance tax about one-half of the States levied such taxes

concurrently with the National Government, making a combined maximum

rate, in some cases as high as 25 per cent. The French law has one

feature which is to be heartily commended. The progressive principle is

so applied that each higher rate is imposed only on the excess above

the amount subject to the next lower rate; so that each increase of

rate will apply only to a certain amount above a certain maximum. The

tax should if possible be made to bear more heavily upon those residing

without the country than within it. A heavy progressive tax upon a very

large fortune is in no way such a tax upon thrift or industry as a like

would be on a small fortune. No advantage comes either to the country

as a whole or to the individuals inheriting the money by permitting the

transmission in their entirety of the enormous fortunes which would be

affected by such a tax; and as an incident to its function of revenue

raising, such a tax would help to preserve a measurable equality of

opportunity for the people of the generations growing to manhood. We

have not the slightest sympathy with that socialistic idea which would

try to put laziness, thriftlessness and inefficiency on a par with

industry, thrift and efficiency; which would strive to break up not

merely private property, but what is far more important, the home, the

chief prop upon which our whole civilization stands. Such a theory, if

ever adopted, would mean the ruin of the entire country--a ruin which

would bear heaviest upon the weakest, upon those least able to shift

for themselves. But proposals for legislation such as this herein

advocated are directly opposed to this class of socialistic theories.

Our aim is to recognize what Lincoln pointed out: The fact that there

are some respects in which men are obviously not equal; but also to

insist that there should be an equality of self-respect and of mutual

respect, an equality of rights before the law, and at least an

approximate equality in the conditions under which each man obtains the

chance to show the stuff that is in him when compared to his fellows.

A few years ago there was loud complaint that the law could not be

invoked against wealthy offenders. There is no such complaint now. The

course of the Department of Justice during the last few years has been

such as to make it evident that no man stands above the law, that no

corporation is so wealthy that it can not be held to account. The

Department of Justice has been as prompt to proceed against the

wealthiest malefactor whose crime was one of greed and cunning as to

proceed against the agitator who incites to brutal violence. Everything

that can be done under the existing law, and with the existing state of

public opinion, which so profoundly influences both the courts and

juries, has been done. But the laws themselves need strengthening in

more than one important point; they should be made more definite, so

that no honest man can be led unwittingly to break them, and so that

the real wrongdoer can be readily punished.

Moreover, there must be the public opinion back of the laws or the laws

themselves will be of no avail. At present, while the average juryman

undoubtedly wishes to see trusts broken up, and is quite ready to fine

the corporation itself, he is very reluctant to find the facts proven

beyond a reasonable doubt when it comes to sending to jail a member of

the business community for indulging in practices which are profoundly

unhealthy, but which, unfortunately, the business community has grown

to recognize as well-nigh normal. Both the present condition of the law

and the present temper of juries render it a task of extreme difficulty

to get at the real wrongdoer in any such case, especially by

imprisonment. Yet it is from every standpoint far preferable to punish

the prime offender by imprisonment rather than to fine the corporation,

with the attendant damage to stockholders.

The two great evils in the execution of our criminal laws to-day are

sentimentality and technicality. For the latter the remedy must come

from the hands of the legislatures, the courts, and the lawyers. The

other must depend for its cure upon the gradual growth of a sound

public opinion which shall insist that regard for the law and the

demands of reason shall control all other influences and emotions in

the jury box. Both of these evils must be removed or public discontent

with the criminal law will continue.

Instances of abuse in the granting of injunctions in labor disputes

continue to occur, and the resentment in the minds of those who feel

that their rights are being invaded and their liberty of action and of

speech unwarrantably restrained continues likewise to grow. Much of the

attack on the use of the process of injunction is wholly without

warrant; but I am constrained to express the belief that for some of it

there is warrant. This question is becoming more and more one of prime

importance, and unless the courts will themselves deal with it in

effective manner, it is certain ultimately to demand some form of

legislative action. It would be most unfortunate for our social welfare

if we should permit many honest and law-abiding citizens to feel that

they had just cause for regarding our courts with hostility. I

earnestly commend to the attention of the Congress this matter, so that

some way may be devised which will limit the abuse of injunctions and

protect those rights which from time to time it unwarrantably invades.

Moreover, discontent is often expressed with the use of the process of

injunction by the courts, not only in labor disputes, but where State

laws are concerned. I refrain from discussion of this question as I am

informed that it will soon receive the consideration of the Supreme

Court.

The Federal courts must of course decide ultimately what are the

respective spheres of State and Nation in connection with any law,

State or National, and they must decide definitely and finally in

matters affecting individual citizens, not only as to the rights and

wrongs of labor but as to the rights and wrongs of capital; and the

National Government must always see that the decision of the court is

put into effect. The process of injunction is an essential adjunct of

the court's doing its work well; and as preventive measures are always

better than remedial, the wise use of this process is from every

standpoint commendable. But where it is recklessly or unnecessarily

used, the abuse should he censured, above all by the very men who are

properly anxious to prevent any effort to shear the courts of this

necessary power. The court's decision must be final; the protest is

only against the conduct of individual judges in needlessly

anticipating such final decision, or in the tyrannical use of what is

nominally a temporary injunction to accomplish what is in fact a

permanent decision.

The loss of life and limb from railroad accidents in this country has

become appalling. It is a subject of which the National Government

should take supervision. It might be well to begin by providing for a

Federal inspection of interstate railroads somewhat along the lines of

Federal inspection of steamboats, although not going so far; perhaps at

first all that it would be necessary to have would be some officer

whose duty would be to investigate all accidents on interstate

railroads and report in detail the causes thereof. Such an officer

should make it his business to get into close touch with railroad

operating men so as to become thoroughly familiar with every side of

the question, the idea being to work along the lines of the present

steamboat inspection law.

The National Government should be a model employer. It should demand

the highest quality of service from each of its employees and it should

care for all of them properly in return. Congress should adopt

legislation providing limited but definite compensation for accidents

to all workmen within the scope of the Federal power, including

employees of navy yards and arsenals. In other words, a model

employers' liability act, far-reaching and thoroughgoing, should be

enacted which should apply to all positions, public and private, over

which the National Government has jurisdiction. The number of accidents

to wage-workers, including those that are preventable and those that

are not, has become appalling in the mechanical, manufacturing, and

transportation operations of the day. It works grim hardship to the

ordinary wage-worker and his family to have the effect of such an

accident fall solely upon him; and, on the other hand, there are whole

classes of attorneys who exist only by inciting men who may or may not

have been wronged to undertake suits for negligence. As a matter of

fact a suit for negligence is generally an inadequate remedy for the

person injured, while it often causes altogether disproportionate

annoyance to the employer. The law should be made such that the payment

for accidents by the employer would be automatic instead of being a

matter for lawsuits. Workmen should receive certain and definite

compensation for all accidents in industry irrespective of negligence.

The employer is the agent of the public and on his own responsibility

and for his own profit he serves the public. When he starts in motion

agencies which create risks for others, he should take all the ordinary

and extraordinary risks involved; and the risk he thus at the moment

assumes will ultimately be assumed, as it ought to be, by the general

public. Only in this way can the shock of the accident be diffused,

instead of falling upon the man or woman least able to bear it, as is

now the case. The community at large should share the burdens as well

as the benefits of industry. By the proposed law, employers would gain

a desirable certainty of obligation and get rid of litigation to

determine it, while the workman and his family would be relieved from a

crushing load. With such a policy would come increased care, and

accidents would be reduced in number. The National laws providing for

employers' liability on railroads engaged in interstate commerce and

for safety appliances, as well as for diminishing the hours any

employee of a railroad should be permitted to work, should all be

strengthened wherever in actual practice they have shown weakness; they

should be kept on the statute books in thoroughgoing form.

The constitutionality of the employers' liability act passed by the

preceding Congress has been carried before the courts. In two

jurisdictions the law has been declared unconstitutional, and in three

jurisdictions its constitutionality has been affirmed. The question has

been carried to the Supreme Court, the case has been heard by that

tribunal, and a decision is expected at an early date. In the event

that the court should affirm the constitutionality of the act, I urge

further legislation along the lines advocated in my Message to the

preceding Congress. The practice of putting the entire burden of loss

to life or limb upon the victim or the victim's family is a form of

social injustice in which the United States stands in unenviable

prominence. In both our Federal and State legislation we have, with few

exceptions, scarcely gone farther than the repeal of the fellow-servant

principle of the old law of liability, and in some of our States even

this slight modification of a completely outgrown principle has not yet

been secured. The legislation of the rest of the industrial world

stands out in striking contrast to our backwardness in this respect.

Since 1895 practically every country of Europe, together with Great

Britain, New Zealand, Australia, British Columbia, and the Cape of Good

Hope has enacted legislation embodying in one form or another the

complete recognition of the principle which places upon the employer

the entire trade risk in the various lines of industry. I urge upon the

Congress the enactment of a law which will at the same time bring

Federal legislation up to the standard already established by all the

European countries, and which will serve as a stimulus to the various

States to perfect their legislation in this regard.

The Congress should consider the extension of the eight-hour law. The

constitutionality of the present law has recently been called into

question, and the Supreme Court has decided that the existing

legislation is unquestionably within the powers of the Congress. The

principle of the eight-hour day should as rapidly and as far as

practicable be extended to the entire work carried on by the

Government; and the present law should be amended to embrace contracts

on those public works which the present wording of the act has been

construed to exclude. The general introduction of the eight-hour day

should be the goal toward which we should steadily tend, and the

Government should set the example in this respect.

Strikes and lockouts, with their attendant loss and suffering, continue

to increase. For the five years ending December 31, 1905, the number of

strikes was greater than those in any previous ten years and was double

the number in the preceding five years. These figures indicate the

increasing need of providing some machinery to deal with this class of

disturbance in the interest alike of the employer, the employee, and

the general public. I renew my previous recommendation that the

Congress favorably consider the matter of creating the machinery for

compulsory investigation of such industrial controversies as are of

sufficient magnitude and of sufficient concern to the people of the

country as a whole to warrant the Federal Government in taking action.

The need for some provision for such investigation was forcibly

illustrated during the past summer. A strike of telegraph operators

seriously interfered with telegraphic communication, causing great

damage to business interests and serious inconvenience to the general

public. Appeals were made to me from many parts of the country, from

city councils, from boards of trade, from chambers of commerce, and

from labor organizations, urging that steps be taken to terminate the

strike. Everything that could with any propriety be done by a

representative of the Government was done, without avail, and for weeks

the public stood by and suffered without recourse of any kind. Had the

machinery existed and had there been authority for compulsory

investigation of the dispute, the public would have been placed in

possession of the merits of the controversy, and public opinion would

probably have brought about a prompt adjustment.

Each successive step creating machinery for the adjustment of labor

difficulties must be taken with caution, but we should endeavor to make

progress in this direction.

The provisions of the act of 1898 creating the chairman of the

Interstate Commerce Commission and the Commissioner of Labor a board of

mediation in controversies between interstate railroads and their

employees has, for the first time, been subjected to serious tests

within the past year, and the wisdom of the experiment has been fully

demonstrated. The creation of a board for compulsory investigation in

cases where mediation fails and arbitration is rejected is the next

logical step in a progressive program.

It is certain that for some time to come there will be a constant

increase absolutely, and perhaps relatively, of those among our

citizens who dwell in cities or towns of some size and who work for

wages. This means that there will be an ever-increasing need to

consider the problems inseparable from a great industrial civilization.

Where an immense and complex business, especially in those branches

relating to manufacture and transportation, is transacted by a large

number of capitalists who employ a very much larger number of

wage-earners, the former tend more and more to combine into

corporations and the latter into unions. The relations of the

capitalist and wage-worker to one another, and of each to the general

public, are not always easy to adjust; and to put them and keep them on

a satisfactory basis is one of the most important and one of the most

delicate tasks before our whole civilization. Much of the work for the

accomplishment of this end must be done by the individuals concerned

themselves, whether singly or in combination; and the one fundamental

fact that must never be lost track of is that the character of the

average man, whether he be a man of means or a man who works with his

hands, is the most important factor in solving the problem aright. But

it is almost equally important to remember that without good laws it is

also impossible to reach the proper solution. It is idle to hold that

without good laws evils such as child labor, as the over-working of

women, as the failure to protect employees from loss of life or limb,

can be effectively reached, any more than the evils of rebates and

stock-watering can be reached without good laws. To fail to stop these

practices by legislation means to force honest men into them, because

otherwise the dishonest who surely will take advantage of them will

have everything their own way. If the States will correct these evils,

well and good; but the Nation must stand ready to aid them.

No question growing out of our rapid and complex industrial development

is more important than that of the employment of women and children.

The presence of women in industry reacts with extreme directness upon

the character of the home and upon family life, and the conditions

surrounding the employment of children bear a vital relation to our

future citizenship. Our legislation in those areas under the control of

the Congress is very much behind the legislation of our more

progressive States. A thorough and comprehensive measure should be

adopted at this session of the Congress relating to the employment of

women and children in the District of Columbia and the Territories. The

investigation into the condition of women and children wage-earners

recently authorized and directed by the Congress is now being carried

on in the various States, and I recommend that the appropriation made

last year for beginning this work be renewed, in order that we may have

the thorough and comprehensive investigation which the subject demands.

The National Government has as an ultimate resort for control of child

labor the use of the interstate commerce clause to prevent the products

of child labor from entering into interstate commerce. But before using

this it ought certainly to enact model laws on the subject for the

Territories under its own immediate control.

There is one fundamental proposition which can be laid down as regards

all these matters, namely: While honesty by itself will not solve the

problem, yet the insistence upon honesty--not merely technical honesty,

but honesty in purpose and spirit--is an essential element in arriving

at a right conclusion. Vice in its cruder and more archaic forms shocks

everybody; but there is very urgent need that public opinion should be

just as severe in condemnation of the vice which hides itself behind

class or professional loyalty, or which denies that it is vice if it

can escape conviction in the courts. The public and the representatives

of the public, the high officials, whether on the bench or in executive

or legislative positions, need to remember that often the most

dangerous criminals, so far as the life of the Nation is concerned, are

not those who commit the crimes known to and condemned by the popular

conscience for centuries, but those who commit crimes only rendered

possible by the complex conditions of our modern industrial life. It

makes not a particle of difference whether these crimes are committed

by a capitalist or by a laborer, by a leading banker or manufacturer or

railroad man, or by a leading representative of a labor union.

Swindling in stocks, corrupting legislatures, making fortunes by the

inflation of securities, by wrecking railroads, by destroying

competitors through rebates--these forms of wrongdoing in the

capitalist, are far more infamous than any ordinary form of

embezzlement or forgery; yet it is a matter of extreme difficulty to

secure the punishment of the man most guilty of them, most responsible

for them. The business man who condones such conduct stands on a level

with the labor man who deliberately supports a corrupt demagogue and

agitator, whether head of a union or head of some municipality, because

he is said to have "stood by the union." The members of the business

community, the educators, or clergymen, who condone and encourage the

first kind of wrongdoing, are no more dangerous to the community, but

are morally even worse, than the labor men who are guilty of the second

type of wrongdoing, because less is to be pardoned those who have no

such excuse as is furnished either by ignorance or by dire need.  When

the Department of Agriculture was founded there was much sneering as to

its usefulness. No Department of the Government, however, has more

emphatically vindicated its usefulness, and none save the Post-Office

Department comes so continually and intimately into touch with the

people. The two citizens whose welfare is in the aggregate most vital

to the welfare of the Nation, and therefore to the welfare of all other

citizens, are the wage-worker who does manual labor and the tiller of

the soil, the farmer. There are, of course, kinds of labor where the

work must be purely mental, and there are other kinds of labor where,

under existing conditions, very little demand indeed is made upon the

mind, though I am glad to say that the proportion of men engaged in

this kind of work is diminishing. But in any community with the solid,

healthy qualities which make up a really great nation the bulk of the

people should do work which calls for the exercise of both body and

mind. Progress can not permanently exist in the abandonment of physical

labor, but in the development of physical labor, so that it shall

represent more and more the work of the trained mind in the trained

body. Our school system is gravely defective in so far as it puts a

premium upon mere literary training and tends therefore to train the

boy away from the farm and the workshop. Nothing is more needed than

the best type of industrial school, the school for mechanical

industries in the city, the school for practically teaching agriculture

in the country. The calling of the skilled tiller of the soil, the

calling of the skilled mechanic, should alike be recognized as

professions, just as emphatically as the callings of lawyer, doctor,

merchant, or clerk. The schools recognize this fact and it should

equally be recognized in popular opinion. The young man who has the

farsightedness and courage to recognize it and to get over the idea

that it makes a difference whether what he earns is called salary or

wages, and who refuses to enter the crowded field of the so-called

professions, and takes to constructive industry instead, is reasonably

sure of an ample reward in earnings, in health, in opportunity to marry

early, and to establish a home with a fair amount of freedom from

worry. It should be one of our prime objects to put both the farmer and

the mechanic on a higher plane of efficiency and reward, so as to

increase their effectiveness in the economic world, and therefore the

dignity, the remuneration, and the power of their positions in the

social world.

No growth of cities, no growth of wealth, can make up for any loss in

either the number or the character of the farming population. We of the

United States should realize this above almost all other peoples. We

began our existence as a nation of farmers, and in every great crisis

of the past a peculiar dependence has had to be placed upon the farming

population; and this dependence has hitherto been justified. But it can

not be justified in the future if agriculture is permitted to sink in

the scale as compared with other employments. We can not afford to lose

that preeminently typical American, the farmer who owns his own

medium-sized farm. To have his place taken by either a class of small

peasant proprietors, or by a class of great landlords with

tenant-farmed estates would be a veritable calamity. The growth of our

cities is a good thing but only in so far as it does not mean a growth

at the expense of the country farmer. We must welcome the rise of

physical sciences in their application to agricultural practices, and

we must do all we can to render country conditions more easy and

pleasant. There are forces which now tend to bring about both these

results, but they are, as yet, in their infancy. The National

Government through the Department of Agriculture should do all it can

by joining with the State governments and with independent associations

of farmers to encourage the growth in the open farming country of such

institutional and social movements as will meet the demand of the best

type of farmers, both for the improvement of their farms and for the

betterment of the life itself. The Department of Agriculture has in

many places, perhaps especially in certain districts of the South,

accomplished an extraordinary amount by cooperating with and teaching

the farmers through their associations, on their own soil, how to

increase their income by managing their farms better than they were

hitherto managed. The farmer must not lose his independence, his

initiative, his rugged self-reliance, yet he must learn to work in the

heartiest cooperation with his fellows, exactly as the business man has

learned to work; and he must prepare to use to constantly better

advantage the knowledge that can be obtained from agricultural

colleges, while he must insist upon a practical curriculum in the

schools in which his children are taught. The Department of Agriculture

and the Department of Commerce and Labor both deal with the fundamental

needs of our people in the production of raw material and its

manufacture and distribution, and, therefore, with the welfare of those

who produce it in the raw state, and of those who manufacture and

distribute it. The Department of Commerce and Labor has but recently

been founded but has already justified its existence; while the

Department of Agriculture yields to no other in the Government in the

practical benefits which it produces in proportion to the public money

expended. It must continue in the future to deal with growing crops as

it has dealt in the past, but it must still further extend its field of

usefulness hereafter by dealing with live men, through a far-reaching

study and treatment of the problems of farm life alike from the

industrial and economic and social standpoint. Farmers must cooperate

with one another and with the Government, and the Government can best

give its aid through associations of farmers, so as to deliver to the

farmer the large body of agricultural knowledge which has been

accumulated by the National and State governments and by the

agricultural colleges and schools.

The grain producing industry of the country, one of the most important

in the United States, deserves special consideration at the hands of

the Congress. Our grain is sold almost exclusively by grades. To secure

satisfactory results in our home markets and to facilitate our trade

abroad, these grades should approximate the highest degree of

uniformity and certainty. The present diverse methods of inspection and

grading throughout the country under different laws and boards, result

in confusion and lack of uniformity, destroying that confidence which

is necessary for healthful trade. Complaints against the present

methods have continued for years and they are growing in volume and

intensity, not only in this country but abroad. I therefore suggest to

the Congress the advisability of a National system of inspection and

grading of grain entering into interstate and foreign commerce as a

remedy for the present evils.

The conservation of our natural resources and their proper use

constitute the fundamental problem which underlies almost every other

problem of our National life. We must maintain for our civilization the

adequate material basis without which that civilization can not exist.

We must show foresight, we must look ahead. As a nation we not only

enjoy a wonderful measure of present prosperity but if this prosperity

is used aright it is an earnest of future success such as no other

nation will have. The reward of foresight for this Nation is great and

easily foretold. But there must be the look ahead, there must be a

realization of the fact that to waste, to destroy, our natural

resources, to skin and exhaust the land instead of using it so as to

increase its usefulness, will result in undermining in the days of our

children the very prosperity which we ought by right to hand down to

them amplified and developed. For the last few years, through several

agencies, the Government has been endeavoring to get our people to look

ahead and to substitute a planned and orderly development of our

resources in place of a haphazard striving for immediate profit. Our

great river systems should be developed as National water highways, the

Mississippi, with its tributaries, standing first in importance, and

the Columbia second, although there are many others of importance on

the Pacific, the Atlantic and the Gulf slopes. The National Government

should undertake this work, and I hope a beginning will be made in the

present Congress; and the greatest of all our rivers, the Mississippi,

should receive especial attention. From the Great Lakes to the mouth of

the Mississippi there should be a deep waterway, with deep waterways

leading from it to the East and the West. Such a waterway would

practically mean the extension of our coast line into the very heart of

our country. It would be of incalculable benefit to our people. If

begun at once it can be carried through in time appreciably to relieve

the congestion of our great freight-carrying lines of railroads. The

work should be systematically and continuously carried forward in

accordance with some well-conceived plan. The main streams should be

improved to the highest point of efficiency before the improvement of

the branches is attempted; and the work should be kept free from every

faint of recklessness or jobbery. The inland waterways which lie just

back of the whole eastern and southern coasts should likewise be

developed. Moreover, the development of our waterways involves many

other important water problems, all of which should be considered as

part of the same general scheme. The Government dams should be used to

produce hundreds of thousands of horsepower as an incident to improving

navigation; for the annual value of the unused water-power of the

United States perhaps exceeds the annual value of the products of all

our mines. As an incident to creating the deep waterways down the

Mississippi, the Government should build along its whole lower length

levees which taken together with the control of the headwaters, will at

once and forever put a complete stop to all threat of floods in the

immensely fertile Delta region. The territory lying adjacent to the

Mississippi along its lower course will thereby become one of the most

prosperous and populous, as it already is one of the most fertile,

farming regions in all the world. I have appointed an Inland Waterways

Commission to study and outline a comprehensive scheme of development

along all the lines indicated. Later I shall lay its report before the

Congress.

Irrigation should be far more extensively developed than at present,

not only in the States of the Great Plains and the Rocky Mountains, but

in many others, as, for instance, in large portions of the South

Atlantic and Gulf States, where it should go hand in hand with the

reclamation of swamp land. The Federal Government should seriously

devote itself to this task, realizing that utilization of waterways and

water-power, forestry, irrigation, and the reclamation of lands

threatened with overflow, are all interdependent parts of the same

problem. The work of the Reclamation Service in developing the larger

opportunities of the western half of our country for irrigation is more

important than almost any other movement. The constant purpose of the

Government in connection with the Reclamation Service has been to use

the water resources of the public lands for the ultimate greatest good

of the greatest number; in other words, to put upon the land permanent

home-makers, to use and develop it for themselves and for their

children and children's children. There has been, of course, opposition

to this work; opposition from some interested men who desire to exhaust

the land for their own immediate profit without regard to the welfare

of the next generation, and opposition from honest and well-meaning men

who did not fully understand the subject or who did not look far enough

ahead. This opposition is, I think, dying away, and our people are

understanding that it would be utterly wrong to allow a few individuals

to exhaust for their own temporary personal profit the resources which

ought to be developed through use so as to be conserved for the

permanent common advantage of the people as a whole.

The effort of the Government to deal with the public land has been

based upon the same principle as that of the Reclamation Service. The

land law system which was designed to meet the needs of the fertile and

well-watered regions of the Middle West has largely broken down when

applied to the dryer regions of the Great Plains, the mountains, and

much of the Pacific slope, where a farm of 160 acres is inadequate for

self-support. In these regions the system lent itself to fraud, and

much land passed out of the hands of the Government without passing

into the hands of the home-maker. The Department of the Interior and

the Department of Justice joined in prosecuting the offenders against

the law; and they have accomplished much, while where the

administration of the law has been defective it has been changed. But

the laws themselves are defective. Three years ago a public lands

commission was appointed to scrutinize the law, and defects, and

recommend a remedy. Their examination specifically showed the existence

of great fraud upon the public domain, and their recommendations for

changes in the law were made with the design of conserving the natural

resources of every part of the public lands by putting it to its best

use. Especial attention was called to the prevention of settlement by

the passage of great areas of public land into the hands of a few men,

and to the enormous waste caused by unrestricted grazing upon the open

range. The recommendations of the Public Lands Commission are sound,

for they are especially in the interest of the actual homemaker; and

where the small home-maker can not at present utilize the land they

provide that the Government shall keep control of it so that it may not

be monopolized by a few men. The Congress has not yet acted upon these

recommendations; but they are so just and proper, so essential to our

National welfare, that I feel confident, if the Congress will take time

to consider them, that they will ultimately be adopted.

Some such legislation as that proposed is essential in order to

preserve the great stretches of public grazing land which are unfit for

cultivation under present methods and are valuable only for the forage

which they supply. These stretches amount in all to some 300,000,000

acres, and are open to the free grazing of cattle, sheep, horses and

goats, without restriction. Such a system, or lack of system, means

that the range is not so much used as wasted by abuse. As the West

settles the range becomes more and more over-grazed. Much of it can not

be used to advantage unless it is fenced, for fencing is the only way

by which to keep in check the owners of nomad flocks which roam hither

and thither, utterly destroying the pastures and leaving a waste behind

so that their presence is incompatible with the presence of

home-makers. The existing fences are all illegal. Some of them

represent the improper exclusion of actual settlers, actual

home-makers, from territory which is usurped by great cattle companies.

Some of them represent what is in itself a proper effort to use the

range for those upon the land, and to prevent its use by nomadic

outsiders. All these fences, those that are hurtful and those that are

beneficial, are alike illegal and must come down. But it is an outrage

that the law should necessitate such action on the part of the

Administration. The unlawful fencing of public lands for private

grazing must be stopped, but the necessity which occasioned it must be

provided for. The Federal Government should have control of the range,

whether by permit or lease, as local necessities may determine. Such

control could secure the great benefit of legitimate fencing, while at

the same time securing and promoting the settlement of the country. In

some places it may be that the tracts of range adjacent to the

homesteads of actual settlers should be allotted to them severally or

in common for the summer grazing of their stock. Elsewhere it may be

that a lease system would serve the purpose; the leases to be temporary

and subject to the rights of settlement, and the amount charged being

large enough merely to permit of the efficient and beneficial control

of the range by the Government, and of the payment to the county of the

equivalent of what it would otherwise receive in taxes. The destruction

of the public range will continue until some such laws as these are

enacted. Fully to prevent the fraud in the public lands which, through

the joint action of the Interior Department and the Department of

Justice, we have been endeavoring to prevent, there must be further

legislation, and especially a sufficient appropriation to permit the

Department of the Interior to examine certain classes of entries on the

ground before they pass into private ownership. The Government should

part with its title only to the actual home-maker, not to the

profit-maker who does not care to make a home. Our prime object is to

secure the rights and guard the interests of the small ranchman, the

man who plows and pitches hay for himself. It is this small ranchman,

this actual settler and homemaker, who in the long run is most hurt by

permitting thefts of the public land in whatever form.

Optimism is a good characteristic, but if carried to an excess it

becomes foolishness. We are prone to speak of the resources of this

country as inexhaustible; this is not so. The mineral wealth of the

country, the coal, iron, oil, gas, and the like, does not reproduce

itself, and therefore is certain to be exhausted ultimately; and

wastefulness in dealing with it to-day means that our descendants will

feel the exhaustion a generation or two before they otherwise would.

But there are certain other forms of waste which could be entirely

stopped--the waste of soil by washing, for instance, which is among the

most dangerous of all wastes now in progress in the United States, is

easily preventable, so that this present enormous loss of fertility is

entirely unnecessary. The preservation or replacement of the forests is

one of the most important means of preventing this loss. We have made a

beginning in forest preservation, but it is only a beginning. At

present lumbering is the fourth greatest industry in the United States;

and yet, so rapid has been the rate of exhaustion of timber in the

United States in the past, and so rapidly is the remainder being

exhausted, that the country is unquestionably on the verge of a timber

famine which will be felt in every household in the land. There has

already been a rise in the price of lumber, but there is certain to be

a more rapid and heavier rise in the future. The present annual

consumption of lumber is certainly three times as great as the annual

growth; and if the consumption and growth continue unchanged,

practically all our lumber will be exhausted in another generation,

while long before the limit to complete exhaustion is reached the

growing scarcity will make itself felt in many blighting ways upon our

National welfare. About 20 per cent of our forested territory is now

reserved in National forests; but these do not include the most

valuable timber lauds, and in any event the proportion is too small to

expect that the reserves can accomplish more than a mitigation of the

trouble which is ahead for the nation. Far more drastic action is

needed. Forests can be lumbered so as to give to the public the full

use of their mercantile timber without the slightest detriment to the

forest, any more than it is a detriment to a farm to furnish a harvest;

so that there is no parallel between forests and mines, which can only

be completely used by exhaustion. But forests, if used as all our

forests have been used in the past and as most of them are still used,

will be either wholly destroyed, or so damaged that many decades have

to pass before effective use can be made of them again. All these facts

are so obvious that it is extraordinary that it should be necessary to

repeat them. Every business man in the land, every writer in the

newspapers, every man or woman of an ordinary school education, ought

to be able to see that immense quantities of timber are used in the

country, that the forests which supply this timber are rapidly being

exhausted, and that, if no change takes place, exhaustion will come

comparatively soon, and that the effects of it will be felt severely in

the every-day life of our people. Surely, when these facts are so

obvious, there should be no delay in taking preventive measures. Yet we

seem as a nation to be willing to proceed in this matter with

happy-go-lucky indifference even to the immediate future. It is this

attitude which permits the self-interest of a very few persons to weigh

for more than the ultimate interest of all our people. There are

persons who find it to their immense pecuniary benefit to destroy the

forests by lumbering. They are to be blamed for thus sacrificing the

future of the Nation as a whole to their own self-interest of the

moment; but heavier blame attaches to the people at large for

permitting such action, whether in the White Mountains, in the southern

Alleghenies, or in the Rockies and Sierras. A big lumbering company,

impatient for immediate returns and not caring to look far enough

ahead, will often deliberately destroy all the good timber in a region,

hoping afterwards to move on to some new country. The shiftless man of

small means, who does not care to become an actual home-maker but would

like immediate profit, will find it to his advantage to take up timber

land simply to turn it over to such a big company, and leave it

valueless for future settlers. A big mine owner, anxious only to

develop his mine at the moment, will care only to cut all the timber

that he wishes without regard to the future--probably net looking ahead

to the condition of the country when the forests are exhausted, any

more than he does to the condition when the mine is worked out. I do

not blame these men nearly as much as I blame the supine public

opinion, the indifferent public opinion, which permits their action to

go unchecked. Of course to check the waste of timber means that there

must be on the part of the public the acceptance of a temporary

restriction in the lavish use of the timber, in order to prevent the

total loss of this use in the future. There are plenty of men in public

and private life who actually advocate the continuance of the present

system of unchecked and wasteful extravagance, using as an argument the

fact that to check it will of course mean interference with the ease

and comfort of certain people who now get lumber at less cost than they

ought to pay, at the expense of the future generations. Some of these

persons actually demand that the present forest reserves be thrown open

to destruction, because, forsooth, they think that thereby the price of

lumber could be put down again for two or three or more years. Their

attitude is precisely like that of an agitator protesting against the

outlay of money by farmers on manure and in taking care of their farms

generally. Undoubtedly, if the average farmer were content absolutely

to ruin his farm, he could for two or three years avoid spending any

money on it, and yet make a good deal of money out of it. But only a

savage would, in his private affairs, show such reckless disregard of

the future; yet it is precisely this reckless disregard of the future

which the opponents of the forestry system are now endeavoring to get

the people of the United States to show. The only trouble with the

movement for the preservation of our forests is that it has not gone

nearly far enough, and was not begun soon enough. It is a most

fortunate thing, however, that we began it when we did. We should

acquire in the Appalachian and White Mountain regions all the forest

lands that it is possible to acquire for the use of the Nation. These

lands, because they form a National asset, are as emphatically national

as the rivers which they feed, and which flow through so many States

before they reach the ocean.

There should be no tariff on any forest product grown in this country;

and, in especial, there should be no tariff on wood pulp; due notice of

the change being of course given to those engaged in the business so as

to enable them to adjust themselves to the new conditions. The repeal

of the duty on wood pulp should if possible be accompanied by an

agreement with Canada that there shall be no export duty on Canadian

pulp wood.

In the eastern United States the mineral fuels have already passed into

the hands of large private owners, and those of the West are rapidly

following. It is obvious that these fuels should be conserved and not

wasted, and it would be well to protect the people against unjust and

extortionate prices, so far as that can still be done. What has been

accomplished in the great oil fields of the Indian Territory by the

action of the Administration, offers a striking example of the good

results of such a policy. In my judgment the Government should have the

right to keep the fee of the coal, oil, and gas fields in its own

possession and to lease the rights to develop them under proper

regulations; or else, if the Congress will not adopt this method, the

coal deposits should be sold under limitations, to conserve them as

public utilities, the right to mine coal being separated from the title

to the soil. The regulations should permit coal lands to be worked in

sufficient quantity by the several corporations. The present

limitations have been absurd, excessive, and serve no useful purpose,

and often render it necessary that there should be either fraud or

close abandonment of the work of getting out the coal.

Work on the Panama Canal is proceeding in a highly satisfactory manner.

In March last, John F. Stevens, chairman of the Commission and chief

engineer, resigned, and the Commission was reorganized and constituted

as follows: Lieut. Col. George W. Goethals, Corps. of Engineers, U. S.

Army, chairman and chief engineer; Maj. D. D. Gall-lard, Corps of

Engineers, U. S. Army; Maj. William L. Sibert, Corps of Engineers, U.

S. Army; Civil Engineer H. H. Rousseau, U. S. Navy; Mr. J. C. S.

Blackburn; Col. W. C. Gorgas, U. S. Army, and Mr. Jackson Smith,

Commissioners. This change of authority and direction went into effect

on April 1, without causing a perceptible check to the progress of the

work. In March the total excavation in the Culebra Cut, where effort

was chiefly concentrated, was 815,270 cubic yards. In April this was

increased to 879,527 cubic yards. There was a considerable decrease in

the output for May and June owing partly to the advent of the rainy

season and partly to temporary trouble with the steam shovel men over

the question of wages. This trouble was settled satisfactorily to all

parties and in July the total excavation advanced materially and in

August the grand total from all points in the canal prism by steam

shovels and dredges exceeded all previous United States records,

reaching 1,274,404 cubic yards. In September this record was eclipsed

and a total of 1,517,412 cubic yards was removed. Of this amount

1,481,307 cubic yards were from the canal prism and 36,105 cubic yards

were from accessory works. These results were achieved in the rainy

season with a rainfall in August of 11.89 inches and in September of

11.65 inches. Finally, in October, the record was again eclipsed, the

total excavation being 1,868,729 cubic yards; a truly extraordinary

record, especially in view of the heavy rainfall, which was 17.1

inches. In fact, experience during the last two rainy seasons

demonstrates that the rains are a less serious obstacle to progress

than has hitherto been supposed.

Work on the locks and dams at Gatun, which began actively in March

last, has advanced so far that it is thought that masonry work on the

locks can be begun within fifteen months. In order to remove all doubt

as to the satisfactory character of the foundations for the locks of

the Canal, the Secretary of War requested three eminent civil

engineers, of special experience in such construction, Alfred Noble,

Frederic P. Stearns and John R. Freeman, to visit the Isthmus and make

thorough personal investigations of the sites. These gentlemen went to

the Isthmus in April and by means of test pits which had been dug for

the purpose, they inspected the proposed foundations, and also examined

the borings that had been made. In their report to the Secretary of

War, under date of May 2, 1907, they said: "We found that all of the

locks, of the dimensions now proposed, will rest upon rock of such

character that it will furnish a safe and stable foundation."

Subsequent new borings, conducted by the present Commission, have fully

confirmed this verdict. They show that the locks will rest on rock for

their entire length. The cross section of the dam and method of

construction will be such as to insure against any slip or sloughing

off. Similar examination of the foundations of the locks and dams on

the Pacific side are in progress. I believe that the locks should be

made of a width of 120 feet.

Last winter bids were requested and received for doing the work of

canal construction by contract. None of them was found to be

satisfactory and all were rejected. It is the unanimous opinion of the

present Commission that the work can be done better, more cheaply, and

more quickly by the Government than by private contractors. Fully 80

per cent of the entire plant needed for construction has been purchased

or contracted for; machine shops have been erected and equipped for

making all needed repairs to the plant; many thousands of employees

have been secured; an effective organization has been perfected; a

recruiting system is in operation which is capable of furnishing more

labor than can be used advantageously; employees are well sheltered and

well fed; salaries paid are satisfactory, and the work is not only

going forward smoothly, but it is producing results far in advance of

the most sanguine anticipations. Under these favorable conditions, a

change in the method of prosecuting the work would be unwise and

unjustifiable, for it would inevitably disorganize existing conditions,

check progress, and increase the cost and lengthen the time of

completing the Canal.

The chief engineer and all his professional associates are firmly

convinced that the 85 feet level lock canal which they are constructing

is the best that could be desired. Some of them had doubts on this

point when they went to the Isthmus. As the plans have developed under

their direction their doubts have been dispelled. While they may decide

upon changes in detail as construction advances they are in hearty

accord in approving the general plan. They believe that it provides a

canal not only adequate to all demands that will be made upon it but

superior in every way to a sea level canal. I concur in this belief.

I commend to the favorable consideration of the Congress a postal

savings bank system, as recommended by the Postmaster-General. The

primary object is to encourage among our people economy and thrift and

by the use of postal savings banks to give them an opportunity to

husband their resources, particularly those who have not the facilities

at hand for depositing their money in savings banks. Viewed, however,

from the experience of the past few weeks, it is evident that the

advantages of such an institution are till more far-reaching. Timid

depositors have withdrawn their savings for the time being from

national banks, trust companies, and savings banks; individuals have

hoarded their cash and the workingmen their earnings; all of which

money has been withheld and kept in hiding or in safe deposit box to

the detriment of prosperity. Through the agency of the postal savings

banks such money would be restored to the channels of trade, to the

mutual benefit of capital and labor.

I further commend to the Congress the consideration of the

Postmaster-General's recommendation for an extension of the parcel

post, especially on the rural routes. There are now 38,215 rural

routes, serving nearly 15,000,000 people who do not have the advantages

of the inhabitants of cities in obtaining their supplies. These

recommendations have been drawn up to benefit the farmer and the

country storekeeper; otherwise, I should not favor them, for I believe

that it is good policy for our Government to do everything possible to

aid the small town and the country district. It is desirable that the

country merchant should not be crushed out.

The fourth-class postmasters' convention has passed a very strong

resolution in favor of placing the fourth-class postmasters under the

civil-service law. The Administration has already put into effect the

policy of refusing to remove any fourth-class postmasters save for

reasons connected with the good of the service; and it is endeavoring

so far as possible to remove them from the domain of partisan politics.

It would be a most desirable thing to put the fourth-class postmasters

in the classified service. It is possible that this might be done

without Congressional action, but, as the matter is debatable, I

earnestly recommend that the Congress enact a law providing that they

be included under the civil-service law and put in the classified

service.

Oklahoma has become a State, standing on a full equality with her elder

sisters, and her future is assured by her great natural resources. The

duty of the National Government to guard the personal and property

rights of the Indians within her borders remains of course unchanged.

I reiterate my recommendations of last year as regards Alaska. Some

form of local self-government should be provided, as simple and

inexpensive as possible; it is impossible for the Congress to devote

the necessary time to all the little details of necessary Alaskan

legislation. Road building and railway building should be encouraged.

The Governor of Alaska should be given an ample appropriation wherewith

to organize a force to preserve the public peace. Whisky selling to the

natives should be made a felony. The coal land laws should be changed

so as to meet the peculiar needs of the Territory. This should be

attended to at once; for the present laws permit individuals to locate

large areas of the public domain for speculative purposes; and cause an

immense amount of trouble, fraud, and litigation. There should be

another judicial division established. As early as possible lighthouses

and buoys should be established as aids to navigation, especially in

and about Prince William Sound, and the survey of the coast completed.

There is need of liberal appropriations for lighting and buoying the

southern coast and improving the aids to navigation in southeastern

Alaska. One of the great industries of Alaska, as of Puget Sound and

the Columbia, is salmon fishing. Gradually, by reason of lack of proper

laws, this industry is being ruined; it should now be taken in charge,

and effectively protected, by the United States Government.

The courage and enterprise of the citizens of the far north-west in

their projected Alaskan-Yukon-Pacific Exposition, to be held in 1909,

should receive liberal encouragement. This exposition is not

sentimental in its conception, but seeks to exploit the natural

resources of Alaska and to promote the commerce, trade, and industry of

the Pacific States with their neighboring States and with our insular

possessions and the neighboring countries of the Pacific. The

exposition asks no loan from the Congress but seeks appropriations for

National exhibits and exhibits of the western dependencies of the

General Government. The State of Washington and the city of Seattle

have shown the characteristic western enterprise in large donations for

the conduct of this exposition in which other States are lending

generous assistance.

The unfortunate failure of the shipping bill at the last session of the

last Congress was followed by the taking off of certain Pacific

steamships, which has greatly hampered the movement of passengers

between Hawaii and the mainland. Unless the Congress is prepared by

positive encouragement to secure proper facilities in the way of

shipping between Hawaii and the mainland, then the coastwise shipping

laws should be so far relaxed as to prevent Hawaii suffering as it is

now suffering. I again call your attention to the capital importance

from every standpoint of making Pearl Harbor available for the largest

deep water vessels, and of suitably fortifying the island.

The Secretary of War has gone to the Philippines. On his return I shall

submit to you his report on the islands.

I again recommend that the rights of citizenship be conferred upon the

people of Porto Rico.

A bureau of mines should be created under the control and direction of

the Secretary of the Interior; the bureau to have power to collect

statistics and make investigations in all matters pertaining to mining

and particularly to the accidents and dangers of the industry. If this

can not now be done, at least additional appropriations should be given

the Interior Department to be used for the study of mining conditions,

for the prevention of fraudulent mining schemes, for carrying on the

work of mapping the mining districts, for studying methods for

minimizing the accidents and dangers in the industry; in short, to aid

in all proper ways the development of the mining industry.

I strongly recommend to the Congress to provide funds for keeping up

the Hermitage, the home of Andrew Jackson; these funds to be used

through the existing Hermitage Association for the preservation of a

historic building which should ever be dear to Americans.

I further recommend that a naval monument be established in the

Vicksburg National Park. This national park gives a unique opportunity

for commemorating the deeds of those gallant men who fought on water,

no less than of those who fought on land, in the great civil War.

Legislation should be enacted at the present session of the Congress

for the Thirteenth Census. The establishment of the permanent Census

Bureau affords the opportunity for a better census than we have ever

had, but in order to realize the full advantage of the permanent

organization, ample time must be given for preparation.

There is a constantly growing interest in this country in the question

of the public health. At last the public mind is awake to the fact that

many diseases, notably tuberculosis, are National scourges. The work of

the State and city boards of health should be supplemented by a

constantly increasing interest on the part of the National Government.

The Congress has already provided a bureau of public health and has

provided for a hygienic laboratory. There are other valuable laws

relating to the public health connected with the various departments.

This whole branch of the Government should be strengthened and aided in

every way.

I call attention to two Government commissions which I have appointed

and which have already done excellent work. The first of these has to

do with the organization of the scientific work of the Government,

which has grown up wholly without plan and is in consequence so

unwisely distributed among the Executive Departments that much of its

effect is lost for the lack of proper coordination. This commission's

chief object is to introduce a planned and orderly development and

operation in the place of the ill-assorted and often ineffective

grouping and methods of work which have prevailed. This can not be done

without legislation, nor would it be feasible to deal in detail with so

complex an administrative problem by specific provisions of law. I

recommend that the President be given authority to concentrate related

lines of work and reduce duplication by Executive order through

transfer and consolidation of lines of work.

The second committee, that on Department methods, was instructed to

investigate and report upon the changes needed to place the conduct of

the executive force of the Government on the most economical and

effective basis in the light of the best modern business practice. The

committee has made very satisfactory progress. Antiquated practices and

bureaucratic ways have been abolished, and a general renovation of

departmental methods has been inaugurated. All that can be done by

Executive order has already been accomplished or will be put into

effect in the near future. The work of the main committee and its

several assistant committees has produced a wholesome awakening on the

part of the great body of officers and employees engaged in Government

work. In nearly every Department and office there has been a careful

self-inspection for the purpose of remedying any defects before they

could be made the subject of adverse criticism. This has led

individuals to a wider study of the work on which they were engaged,

and this study has resulted in increasing their efficiency in their

respective lines of work. There are recommendations of special

importance from the committee on the subject of personnel and the

classification of salaries which will require legislative action before

they can be put into effect. It is my intention to submit to the

Congress in the near future a special message on those subjects.

Under our form of government voting is not merely a right but a duty,

and, moreover, a fundamental and necessary duty if a man is to be a

good citizen. It is well to provide that corporations shall not

contribute to Presidential or National campaigns, and furthermore to

provide for the publication of both contributions and expenditures.

There is, however, always danger in laws of this kind, which from their

very nature are difficult of enforcement; the danger being lest they be

obeyed only by the honest, and disobeyed by the unscrupulous, so as to

act only as a penalty upon honest men. Moreover, no such law would

hamper an unscrupulous man of unlimited means from buying his own way

into office. There is a very radical measure which would, I believe,

work a substantial improvement in our system of conducting a campaign,

although I am well aware that it will take some time for people so to

familiarize themselves with such a proposal as to be willing to

consider its adoption. The need for collecting large campaign funds

would vanish if Congress provided an appropriation for the proper and

legitimate expenses of each of the great national parties, an

appropriation ample enough to meet the necessity for thorough

organization and machinery, which requires a large expenditure of

money. Then the stipulation should be made that no party receiving

campaign funds from the Treasury should accept more than a fixed amount

from any individual subscriber or donor; and the necessary publicity

for receipts and expenditures could without difficulty be provided.

There should be a National gallery of art established in the capital

city of this country. This is important not merely to the artistic but

to the material welfare of the country; and the people are to be

congratulated on the fact that the movement to establish such a gallery

is taking definite form under the guidance of the Smithsonian

Institution. So far from there being a tariff on works of art brought

into the country, their importation should be encouraged in every way.

There have been no sufficient collections of objects of art by the

Government, and what collections have been acquired are scattered and

are generally placed in unsuitable and imperfectly lighted galleries.

The Biological Survey is quietly working for the good of our

agricultural interests, and is an excellent example of a Government

bureau which conducts original scientific research the findings of

which are of much practical utility. For more than twenty years it has

studied the food habits of birds and mammals that are injurious or

beneficial to agriculture, horticulture, and forestry; has distributed

illustrated bulletins on the subject, and has labored to secure

legislative protection for the beneficial species. The cotton

boll-weevil, which has recently overspread the cotton belt of Texas and

is steadily extending its range, is said to cause an annual loss of

about $3,000,000. The Biological Survey has ascertained and gives wide

publicity to the fact that at least 43 kinds of birds prey upon this

destructive insect. It has discovered that 57 species of birds feed

upon scale-insects--dreaded enemies of the fruit grower. It has shown

that woodpeckers as a class, by destroying the larvae of wood-boring

insects, are so essential to tree life that it is doubtful if our

forests could exist without them. It has shown that cuckoos and orioles

are the natural enemies of the leaf-eating caterpillars that destroy

our shade and fruit trees; that our quails and sparrows consume

annually hundreds of tons of seeds of noxious weeds; that hawks and

owls as a class (excepting the few that kill poultry and game birds)

are markedly beneficial, spending their lives in catching grasshoppers,

mice, and other pests that prey upon the products of husbandry. It has

conducted field experiments for the purpose of devising and perfecting

simple methods for holding in check the hordes of destructive

rodents--rats, mice, rabbits, gophers, prairie dogs, and ground

squirrels--which annually destroy crops worth many millions of dollars;

and it has published practical directions for the destruction of wolves

and coyotes on the stock ranges of the West, resulting during the past

year in an estimated saving of cattle and sheep valued at upwards of a

million dollars.

It has inaugurated a system of inspection at the principal ports of

entry on both Atlantic and Pacific coasts by means of which the

introduction of noxious mammals and birds is prevented, thus keeping

out the mongoose and certain birds which are as much to be dreaded as

the previously introduced English sparrow and the house rats and mice.

In the interest of game protection it has cooperated with local

officials in every State in the Union, has striven to promote uniform

legislation in the several States, has rendered important service in

enforcing the Federal law regulating interstate traffic in game, and

has shown how game protection may be made to yield a large revenue to

the State--a revenue amounting in the case of Illinois to $128,000 in a

single year.

The Biological Survey has explored the faunas and floras of America

with reference to the distribution of animals and plants; it has

defined and mapped the natural life areas--areas in which, by reason of

prevailing climatic conditions, certain kinds of animals and plants

occur--and has pointed out the adaptability of these areas to the

cultivation of particular crops. The results of these investigations

are not only of high educational value but are worth each year to the

progressive farmers of the country many times the cost of maintaining

the Survey, which, it may be added, is exceedingly small. I recommend

to Congress that this bureau, whose usefulness is seriously handicapped

by lack of funds, be granted an appropriation in some degree

commensurate with the importance of the work it is doing.

I call your especial attention to the unsatisfactory condition of our

foreign mail service, which, because of the lack of American steamship

lines is now largely done through foreign lines, and which,

particularly so far as South and Central America are concerned, is done

in a manner which constitutes a serious barrier to the extension of our

commerce.

The time has come, in my judgment, to set to work seriously to make our

ocean mail service correspond more closely with our recent commercial

and political development. A beginning was made by the ocean mail act

of March 3, 1891, but even at that time the act was known to be

inadequate in various particulars. Since that time events have moved

rapidly in our history. We have acquired Hawaii, the Philippines, and

lesser islands in the Pacific. We are steadily prosecuting the great

work of uniting at the Isthmus the waters of the Atlantic and the

Pacific. To a greater extent than seemed probable even a dozen years

ago, we may look to an American future on the sea worthy of the

traditions of our past. As the first step in that direction, and the

step most feasible at the present time, I recommend the extension of

the ocean mail act of 1891. This act has stood for some years free from

successful criticism of its principle and purpose. It was based on

theories of the obligations of a great maritime nation, undisputed in

our own land and followed by other nations since the beginning of steam

navigation. Briefly those theories are, that it is the duty of a

first-class Power so far as practicable to carry its ocean mails under

its own flag; that the fast ocean steamships and their crews, required

for such mail service, are valuable auxiliaries to the sea power of a

nation. Furthermore, the construction of such steamships insures the

maintenance in an efficient condition of the shipyards in which our

battleships must be built.

The expenditure of public money for the Performance of such necessary

functions of government is certainly warranted, nor is it necessary to

dwell upon the incidental benefits to our foreign commerce, to the

shipbuilding industry, and to ship owning and navigation which will

accompany the discharge of these urgent public duties, though they,

too, should have weight.

The only serious question is whether at this time we can afford to

improve our ocean mail service as it should be improved. All doubt on

this subject is removed by the reports of the Post-Office Department.

For the fiscal year ended June 30, 1907, that Department estimates that

the postage collected on the articles exchanged with foreign countries

other than Canada and Mexico amounted to $6,579,043.48, or

$3,637,226.81 more than the net cost of the service exclusive of the

cost of transporting the articles between the United States exchange

post-offices and the United States post-offices at which they were

mailed or delivered. In other words, the Government of the United

States, having assumed a monopoly of carrying the mails for the people,

making a profit of over $3,600,000 by rendering a cheap and inefficient

service. That profit I believe should be devoted to strengthening

maritime power in those directions where it will best promote our

prestige. The country is familiar with the facts of our maritime

impotence in the harbors of the great and friendly Republics of South

America. Following the failure of the shipbuilding bill we lost our

only American line of steamers to Australasia, and that loss on the

Pacific has become a serious embarrassment to the people of Hawaii, and

has wholly cut off the Samoan islands from regular communication with

the Pacific coast. Puget Sound, in the year, has lost over half (four

out of seven) of its American steamers trading with the Orient.

We now pay under the act of 1891 $4 a statute mile outward to 20-knot

American mail steamships, built according to naval plans, available as

cruisers, and manned by Americans. Steamships of that speed are

confined exclusively to trans-Atlantic trade with New York. To

steamships of 16 knots or over only $2 a mile can be paid, and it is

steamships of this speed and type which are needed to meet the

requirements of mail service to South America, Asia (including the

Philippines), and Australia. I strongly recommend, therefore, a simple

amendment to the ocean mail act of 1891 which shall authorize the

Postmaster-General in his discretion to enter into contracts for the

transportation of mails to the Republics of South America, to Asia, the

Philippines, and Australia at a rate not to exceed $4 a mile for

steamships of 16 knots speed or upwards, subject to the restrictions

and obligations of the act of 1891. The profit of $3,600,000 which has

been mentioned will fully cover the maximum annual expenditure involved

in this recommendation, and it is believed will in time establish the

lines so urgently needed. The proposition involves no new principle,

but permits the efficient discharge of public functions now

inadequately performed or not performed at all.

Not only there is not now, but there never has been, any other nation

in the world so wholly free from the evils of militarism as is ours.

There never has been any other large nation, not even China, which for

so long a period has had relatively to its numbers so small a regular

army as has ours. Never at any time in our history has this Nation

suffered from militarism or been in the remotest danger of suffering

from militarism. Never at any time of our history has the Regular Army

been of a size which caused the slightest appreciable tax upon the

tax-paying citizens of the Nation. Almost always it has been too small

in size and underpaid. Never in our entire history has the Nation

suffered in the least particular because too much care has been given

to the Army, too much prominence given it, too much money spent upon

it, or because it has been too large. But again and again we have

suffered because enough care has not been given to it, because it has

been too small, because there has not been sufficient preparation in

advance for possible war. Every foreign war in which we have engaged

has cost us many times the amount which, if wisely expended during the

preceding years of peace on the Regular Army, would have insured the

war ending in but a fraction of the time and but for a fraction of the

cost that was actually the case. As a Nation we have always been

shortsighted in providing for the efficiency of the Army in time of

peace. It is nobody's especial interest to make such provision and no

one looks ahead to war at any period, no matter how remote, as being a

serious possibility; while an improper economy, or rather

niggardliness, can be practiced at the expense of the Army with the

certainty that those practicing it will not be called to account

therefor, but that the price will be paid by the unfortunate persons

who happen to be in office when a war does actually come.

I think it is only lack of foresight that troubles us, not any

hostility to the Army. There are, of course, foolish people who

denounce any care of the Army or Navy as "militarism," but I do not

think that these people are numerous. This country has to contend now,

and has had to contend in the past, with many evils, and there is ample

scope for all who would work for reform. But there is not one evil that

now exists, or that ever has existed in this country, which is, or ever

has been, owing in the smallest part to militarism. Declamation against

militarism has no more serious place in an earnest and intelligent

movement for righteousness in this country than declamation against the

worship of Baal or Astaroth. It is declamation against a non-existent

evil, one which never has existed in this country, and which has not

the slightest chance of appearing here. We are glad to help in any

movement for international peace, but this is because we sincerely

believe that it is our duty to help all such movements provided they

are sane and rational, and not because there is any tendency toward

militarism on our part which needs to be cured. The evils we have to

fight are those in connection with industrialism, not militarism.

Industry is always necessary, just as war is sometimes necessary. Each

has its price, and industry in the United States now exacts, and has

always exacted, a far heavier toll of death than all our wars put

together. The statistics of the railroads of this country for the year

ended June 30, 1906, the last contained in the annual statistical

report of the Interstate Commerce Commission, show in that one year a

total of 108,324 casualties to persons, of which 10,618 represent the

number of persons killed. In that wonderful hive of human activity,

Pittsburg, the deaths due to industrial accidents in 1906 were 919, all

the result of accidents in mills, mines or on railroads. For the entire

country, therefore, it is safe to say that the deaths due to industrial

accidents aggregate in the neighborhood of twenty thousand a year. Such

a record makes the death rate in all our foreign wars utterly trivial

by comparison. The number of deaths in battle in all the foreign wars

put together, for the last century and a quarter, aggregate

considerably less than one year's death record for our industries. A

mere glance at these figures is sufficient to show the absurdity of the

outcry against militarism.

But again and again in the past our little Regular Army has rendered

service literally vital to the country, and it may at any time have to

do so in the future. Its standard of efficiency and instruction is

higher now than ever in the past. But it is too small. There are not

enough officers; and it is impossible to secure enough enlisted men. We

should maintain in peace a fairly complete skeleton of a large army. A

great and long-continued war would have to be fought by volunteers. But

months would pass before any large body of efficient volunteers could

be put in the field, and our Regular Army should be large enough to

meet any immediate need. In particular it is essential that we should

possess a number of extra officers trained in peace to perform

efficiently the duties urgently required upon the breaking out of war.

The Medical Corps should be much larger than the needs of our Regular

Army in war. Yet at present it is smaller than the needs of the service

demand even in peace. The Spanish war occurred less than ten years ago.

The chief loss we suffered in it was by disease among the regiments

which never left the country. At the moment the Nation seemed deeply

impressed by this fact; yet seemingly it has already been forgotten,

for not the slightest effort has been made to prepare a medical corps

of sufficient size to prevent the repetition of the same disaster on a

much larger scale if we should ever be engaged in a serious conflict.

The trouble in the Spanish war was not with the then existing officials

of the War Department; it was with the representatives of the people as

a whole who, for the preceding thirty years, had declined to make the

necessary provision for the Army. Unless ample provision is now made by

Congress to put the Medical Corps where it should be put disaster in

the next war is inevitable, and the responsibility will not lie with

those then in charge of the War Department, but with those who now

decline to make the necessary provision. A well organized medical

corps, thoroughly trained before the advent of war in all the important

administrative duties of a military sanitary corps, is essential to the

efficiency of any large army, and especially of a large volunteer army.

Such knowledge of medicine and surgery as is possessed by the medical

profession generally will not alone suffice to make an efficient

military surgeon. He must have, in addition, knowledge of the

administration and sanitation of large field hospitals and camps, in

order to safeguard the health and lives of men intrusted in great

numbers to his care. A bill has long been pending before the Congress

for the reorganization of the Medical Corps; its passage is urgently

needed.

But the Medical Department is not the only department for which

increased provision should be made. The rate of pay for the officers

should be greatly increased; there is no higher type of citizen than

the American regular officer, and he should have a fair reward for his

admirable work. There should be a relatively even greater increase in

the pay for the enlisted men. In especial provision should be made for

establishing grades equivalent to those of warrant officers in the Navy

which should be open to the enlisted men who serve sufficiently long

and who do their work well. Inducements should be offered sufficient to

encourage really good men to make the Army a life occupation. The prime

needs of our present Army is to secure and retain competent

noncommissioned officers. This difficulty rests fundamentally on the

question of pay. The noncommissioned officer does not correspond with

an unskilled laborer; he corresponds to the best type of skilled

workman or to the subordinate official in civil institutions. Wages

have greatly increased in outside occupations in the last forty years

and the pay of the soldier, like the pay of the officers, should be

proportionately increased. The first sergeant of a company, if a good

man, must be one of such executive and administrative ability, and such

knowledge of his trade, as to be worth far more than we at present pay

him. The same is true of the regimental sergeant major. These men

should be men who had fully resolved to make the Army a life occupation

and they should be able to look forward to ample reward; while only men

properly qualified should be given a chance to secure these final

rewards. The increase over the present pay need not be great in the

lower grades for the first one or two enlistments, but the increase

should be marked for the noncommissioned officers of the upper grades

who serve long enough to make it evident that they intend to stay

permanently in the Army, while additional pay should be given for high

qualifications in target practice. The position of warrant officer

should be established and there should be not only an increase of pay,

but an increase of privileges and allowances and dignity, so as to make

the grade open to noncommissioned officers capable of filling them

desirably from every standpoint. The rate of desertion in our Army now

in time of peace is alarming. The deserter should be treated by public

opinion as a man guilty of the greatest crime; while on the other hand

the man who serves steadily in the Army should be treated as what he

is, that is, as preeminently one of the best citizens of this Republic.

After twelve years' service in the Army, my own belief is that the man

should be given a preference according to his ability for certain types

of office over all civilian applicants without examination. This should

also apply, of course, to the men who have served twelve years in the

Navy. A special corps should be provided to do the manual labor now

necessarily demanded of the privates themselves.

Among the officers there should be severe examinations to weed out the

unfit up to the grade of major. From that position on appointments

should be solely by selection and it should be understood that a man of

merely average capacity could never get beyond the position of major,

while every man who serves in any grade a certain length of time prior

to promotion to the next grade without getting the promotion to the

next grade should be forthwith retired. The practice marches and field

maneuvers of the last two or three years have been invaluable to the

Army. They should be continued and extended. A rigid and not a

perfunctory examination of physical capacity has been provided for the

higher grade officers. This will work well. Unless an officer has a

good physique, unless he can stand hardship, ride well, and walk

fairly, he is not fit for any position, even after he has become a

colonel. Before he has become a colonel the need for physical fitness

in the officers is almost as great as in the enlisted man. I hope

speedily to see introduced into the Army a far more rigid and

thoroughgoing test of horsemanship for all field officers than at

present. There should be a Chief of Cavalry just as there is a Chief of

Artillery.

Perhaps the most important of all legislation needed for the benefit of

the Army is a law to equalize and increase the pay of officers and

enlisted men of the Army, Navy, Marine Corps, and Revenue-Cutter

Service. Such a bill has been prepared, which it is hoped will meet

with your favorable consideration. The next most essential measure is

to authorize a number of extra officers as mentioned above. To make the

Army more attractive to enlisted men, it is absolutely essential to

create a service corps, such as exists in nearly every modern army in

the world, to do the skilled and unskilled labor, inseparably connected

with military administration, which is now exacted, without just

compensation, of enlisted men who voluntarily entered the Army to do

service of an altogether different kind. There are a number of other

laws necessary to so organize the Army as to promote its efficiency and

facilitate its rapid expansion in time of war; but the above are the

most important.

It was hoped The Hague Conference might deal with the question of the

limitation of armaments. But even before it had assembled informal

inquiries had developed that as regards naval armaments, the only ones

in which this country had any interest, it was hopeless to try to

devise any plan for which there was the slightest possibility of

securing the assent of the nations gathered at The Hague. No plan was

even proposed which would have had the assent of more than one first

class Power outside of the United States. The only plan that seemed at

all feasible, that of limiting the size of battleships, met with no

favor at all. It is evident, therefore, that it is folly for this

Nation to base any hope of securing peace on any international

agreement as to the limitations of armaments. Such being the fact it

would be most unwise for us to stop the upbuilding of our Navy. To

build one battleship of the best and most advanced type a year would

barely keep our fleet up to its present force. This is not enough. In

my judgment, we should this year provide for four battleships. But it

is idle to build battleships unless in addition to providing the men,

and the means for thorough training, we provide the auxiliaries for

them, unless we provide docks, the coaling stations, the colliers and

supply ships that they need. We are extremely deficient in coaling

stations and docks on the Pacific, and this deficiency should not

longer be permitted to exist. Plenty of torpedo boats and destroyers

should be built. Both on the Atlantic and Pacific coasts,

fortifications of the best type should be provided for all our greatest

harbors.

We need always to remember that in time of war the Navy is not to be

used to defend harbors and sea-coast cities; we should perfect our

system of coast fortifications. The only efficient use for the Navy is

for offense. The only way in which it can efficiently protect our own

coast against the possible action of a foreign navy is by destroying

that foreign navy. For defense against a hostile fleet which actually

attacks them, the coast cities must depend upon their forts, mines,

torpedoes, submarines, and torpedo boats and destroyers. All of these

together are efficient for defensive purposes, but they in no way

supply the place of a thoroughly efficient navy capable of acting on

the offensive; for parrying never yet won a fight. It can only be won

by hard hitting, and an aggressive sea-going navy alone can do this

hard hitting of the offensive type. But the forts and the like are

necessary so that the Navy may be footloose. In time of war there is

sure to be demand, under pressure, of fright, for the ships to be

scattered so as to defend all kind of ports. Under penalty of terrible

disaster, this demand must be refused. The ships must be kept together,

and their objective made the enemies' fleet. If fortifications are

sufficiently strong, no modern navy will venture to attack them, so

long as the foe has in existence a hostile navy of anything like the

same size or efficiency. But unless there exists such a navy then the

fortifications are powerless by themselves to secure the victory. For

of course the mere deficiency means that any resolute enemy can at his

leisure combine all his forces upon one point with the certainty that

he can take it.

Until our battle fleet is much larger than at present it should never

be split into detachments so far apart that they could not in event of

emergency be speedily united. Our coast line is on the Pacific just as

much as on the Atlantic. The interests of California, Oregon, and

Washington are as emphatically the interests of the whole Union as

those of Maine and New York, of Louisiana and Texas. The battle fleet

should now and then be moved to the Pacific, just as at other times it

should be kept in the Atlantic. When the Isthmian Canal is built the

transit of the battle fleet from one ocean to the other will be

comparatively easy. Until it is built I earnestly hope that the battle

fleet will be thus shifted between the two oceans every year or two.

The marksmanship on all our ships has improved phenomenally during the

last five years. Until within the last two or three years it was not

possible to train a battle fleet in squadron maneuvers under service

conditions, and it is only during these last two or three years that

the training under these conditions has become really effective.

Another and most necessary stride in advance is now being taken. The

battle fleet is about starting by the Straits of Magellan to visit the

Pacific coast.. Sixteen battleships are going under the command of

Rear-Admiral Evans, while eight armored cruisers and two other

battleships will meet him at San Francisco, whither certain torpedo

destroyers are also going. No fleet of such size has ever made such a

voyage, and it will be of very great educational use to all engaged in

it. The only way by which to teach officers and men how to handle the

fleet so as to meet every possible strain and emergency in time of war

is to have them practice under similar conditions in time of peace.

Moreover, the only way to find out our actual needs is to perform in

time of peace whatever maneuvers might be necessary in time of war.

After war is declared it is too late to find out the needs; that means

to invite disaster. This trip to the Pacific will show what some of our

needs are and will enable us to provide for them. The proper place for

an officer to learn his duty is at sea, and the only way in which a

navy can ever be made efficient is by practice at sea, under all the

conditions which would have to be met if war existed.

I bespeak the most liberal treatment for the officers and enlisted men

of the Navy. It is true of them, as likewise of the officers and

enlisted men of the Army, that they form a body whose interests should

be close to the heart of every good American. In return the most rigid

performance of duty should be exacted from them. The reward should be

ample when they do their best; and nothing less than their best should

be tolerated. It is idle to hope for the best results when the men in

the senior grades come to those grades late in life and serve too short

a time in them. Up to the rank of lieutenant-commander promotion in the

Navy should be as now, by seniority, subject, however, to such

rigid tests as would eliminate the unfit. After the grade of

lieutenant-commander, that is, when we come to the grade of command

rank, the unfit should be eliminated in such manner that only the

conspicuously fit would remain, and sea service should be a principal

test of fitness. Those who are passed by should, after a certain length

of service in their respective grades, be retired. Of a given number of

men it may well be that almost all would make good lieutenants and most

of them good lieutenant-commanders, while only a minority be fit to be

captains, and but three or four to be admirals. Those who object to

promotion otherwise than by mere seniority should reflect upon the

elementary fact that no business in private life could be successfully

managed if those who enter at the lowest rungs of the ladder should

each in turn, if he lived, become the head of the firm, its active

director, and retire after he had held the position a few months. On

its face such a scheme is an absurdity. Chances for improper favoritism

can be minimized by a properly formed board; such as the board of last

June, which did such conscientious and excellent work in elimination.

If all that ought to be done can not now be done, at least let a

beginning be made. In my last three annual Messages, and in a special

Message to the last Congress, the necessity for legislation that will

cause officers of the line of the Navy to reach the grades of captain

and rear-admiral at less advanced ages and which will cause them to

have more sea training and experience in the highly responsible duties

of those grades, so that they may become thoroughly skillful in

handling battleships, divisions, squadrons, and fleets in action, has

been fully explained and urgently recommended. Upon this subject the

Secretary of the Navy has submitted detailed and definite

recommendations which have received my approval, and which, if enacted

into law, will accomplish what is immediately necessary, and will, as

compared with existing law, make a saving of more than five millions of

dollars during the next seven years. The navy personnel act of 1899 has

accomplished all that was expected of it in providing satisfactory

periods of service in the several subordinate grades, from the grade of

ensign to the grade of lieutenant-commander, but the law is inadequate

in the upper grades and will continue to be inadequate on account of

the expansion of the personnel since its enactment. Your attention is

invited to the following quotations from the report of the personnel

board of 1906, of which the Assistant Secretary of the Navy was

president:

"Congress has authorized a considerable increase in the number of

midshipmen at the Naval Academy, and these midshipmen upon graduation

are promoted to ensign and lieutenant (junior-grade). But no provision

has been made for a corresponding increase in the upper grades, the

result being that the lower grades will become so congested that a

midshipman now in one of the lowest classes at Annapolis may possibly

not be promoted to lieutenant until he is between 45 and 50 years of

age. So it will continue under the present law, congesting at the top

and congesting at the bottom. The country fails to get from the

officers of the service the best that is in them by not providing

opportunity for their normal development and training. The board

believes that this works a serious detriment to the efficiency of the

Navy and is a real menace to the public safety."

As stated in my special Message to the last Congress: "I am firmly of

the opinion that unless the present conditions of the higher

commissioned personnel is rectified by judicious legislation the future

of our Navy will be gravely compromised." It is also urgently necessary

to increase the efficiency of the Medical Corps of the Navy. Special

legislation to this end has already been proposed; and I trust it may

be enacted without delay.

It must be remembered that everything done in the Navy to fit it to do

well in time of war must be done in time of peace. Modern wars are

short; they do not last the length of time requisite to build a

battleship; and it takes longer to train the officers and men to do

well on a battleship than it takes to build it. Nothing effective can

be done for the Navy once war has begun, and the result of the war, if

the combatants are otherwise equally matched, will depend upon which

power has prepared best in time of peace. The United States Navy is the

best guaranty the Nation has that its honor and interest will not be

neglected; and in addition it offers by far the best insurance for

peace that can by human ingenuity be devised.

I call attention to the report of the official Board of Visitors to the

Naval Academy at Annapolis which has been forwarded to the Congress.

The report contains this paragraph:

"Such revision should be made of the courses of study and methods of

conducting and marking examinations as will develop and bring out the

average all-round ability of the midshipman rather than to give him

prominence in any one particular study. The fact should be kept in mind

that the Naval Academy is not a university but a school, the primary

object of which is to educate boys to be efficient naval officers.

Changes in curriculum, therefore, should be in the direction of making

the course of instruction less theoretical and more practical. No

portion of any future class should be graduated in advance of the full

four years' course, and under no circumstances should the standard of

instruction be lowered. The Academy in almost all of its departments is

now magnificently equipped, and it would be very unwise to make the

course of instruction less exacting than it is to-day."

Acting upon this suggestion I designated three seagoing officers, Capt.

Richard Wainwright, Commander Robert S. Griffin, and Lieut. Commander

Albert L. Key, all graduates of the Academy, to investigate conditions

and to recommend to me the best method of carrying into effect this

general recommendation. These officers performed the duty promptly and

intelligently, and, under the personal direction of Capt. Charles J.

Badger, Superintendent of the Academy, such of the proposed changes as

were deemed to be at present advisable were put into effect at the

beginning of the academic year, October 1, last. The results, I am

confident, will be most beneficial to the Academy, to the midshipmen,

and to the Navy.

In foreign affairs this country's steady policy is to behave toward

other nations as a strong and self-respecting man should behave toward

the other men with whom he is brought into contact. In other words, our

aim is disinterestedly to help other nations where such help can be

wisely given without the appearance of meddling with what does not

concern us; to be careful to act as a good neighbor; and at the same

time, in good-natured fashion, to make it evident that we do not intend

to be imposed upon.

The Second International Peace Conference was convened at The Hague on

the 15th of June last and remained in session until the 18th of

October. For the first time the representatives of practically all the

civilized countries of the world united in a temperate and kindly

discussion of the methods by which the causes of war might be narrowed

and its injurious effects reduced.

Although the agreements reached in the Conference did not in any

direction go to the length hoped for by the more sanguine, yet in many

directions important steps were taken, and upon every subject on the

programme there was such full and considerate discussion as to justify

the belief that substantial progress has been made toward further

agreements in the future. Thirteen conventions were agreed upon

embodying the definite conclusions which had been reached, and

resolutions were adopted marking the progress made in matters upon

which agreement was not yet sufficiently complete to make conventions

practicable.

The delegates of the United States were instructed to favor an

agreement for obligatory arbitration, the establishment of a permanent

court of arbitration to proceed judicially in the hearing and decision

of international causes, the prohibition of force for the collection of

contract debts alleged to be due from governments to citizens of other

countries until after arbitration as to the justice and amount of the

debt and the time and manner of payment, the immunity of private

property at sea, the better definition of the rights of neutrals, and,

in case any measure to that end should be introduced, the limitation of

armaments.

In the field of peaceful disposal of international differences several

important advances were made. First, as to obligatory arbitration.

Although the Conference failed to secure a unanimous agreement upon the

details of a convention for obligatory arbitration, it did resolve as

follows;

"It is unanimous: (1) In accepting the principle for obligatory

arbitration; (2) In declaring that certain differences, and notably

those relating to the interpretation and application of international

conventional stipulations are susceptible of being submitted to

obligatory arbitration without any restriction."

In view of the fact that as a result of the discussion the vote upon

the definite treaty of obligatory arbitration, which was proposed,

stood 32 in favor to 9 against the adoption of the treaty, there can be

little doubt that the great majority of the countries of the world have

reached a point where they are now ready to apply practically the

principles thus unanimously agreed upon by the Conference.

The second advance, and a very great one, is the agreement which

relates to the use of force for the collection of contract debts. Your

attention is invited to the paragraphs upon this subject in my Message

of December, 1906, and to the resolution of the Third American

Conference at Rio in the summer of 1906. The convention upon this

subject adopted by the Conference substantially as proposed by the

American delegates is as follows:

"In order to avoid between nations armed conflicts of a purely

pecuniary origin arising from contractual debts claimed of the

government of one country by the government of another country to be

due to its nationals, the signatory Powers agree not to have recourse

to armed force for the collection of such contractual debts.

"However, this stipulation shall not be applicable when the debtor

State refuses or leaves unanswered an offer to arbitrate, or, in case

of acceptance, makes it impossible to formulate the terms of

submission, or, after arbitration, fails to comply with the award

rendered.

"It is further agreed that arbitration here contemplated shall be in

conformity, as to procedure, with Chapter III of the Convention for the

Pacific Settlement of International Disputes adopted at The Hague, and

that it shall determine, in so far as there shall be no agreement

between the parties, the justice and the amount of the debt, the time

and mode of payment thereof."

Such a provision would have prevented much injustice and extortion in

the past, and I cannot doubt that its effect in the future will be most

salutary.

A third advance has been made in amending and perfecting the convention

of 1899 for the voluntary settlement of international disputes, and

particularly the extension of those parts of that convention which

relate to commissions of inquiry. The existence of those provisions

enabled the Governments of Great Britain and Russia to avoid war,

notwithstanding great public excitement, at the time of the Dogger Bank

incident, and the new convention agreed upon by the Conference gives

practical effect to the experience gained in that inquiry.

Substantial progress was also made towards the creation of a permanent

judicial tribunal for the determination of international causes. There

was very full discussion of the proposal for such a court and a general

agreement was finally reached in favor of its creation. The Conference

recommended to the signatory Powers the adoption of a draft upon which

it agreed for the organization of the court, leaving to be determined

only the method by which the judges should be selected. This remaining

unsettled question is plainly one which time and good temper will

solve.

A further agreement of the first importance was that for the creation

of an international prize court. The constitution, organization and

procedure of such a tribunal were provided for in detail. Anyone who

recalls the injustices under which this country suffered as a neutral

power during the early part of the last century can not fail to see in

this provision for an international prize court the great advance which

the world is making towards the substitution of the rule of reason and

justice in place of simple force. Not only will the international prize

court be the means of protecting the interests of neutrals, but it is

in itself a step towards the creation of the more general court for the

hearing of international controversies to which reference has just been

made. The organization and action of such a prize court can not fail to

accustom the different countries to the submission of international

questions to the decision of an international tribunal, and we may

confidently expect the results of such submission to bring about a

general agreement upon the enlargement of the practice.

Numerous provisions were adopted for reducing the evil effects of war

and for defining the rights and duties of neutrals.

The Conference also provided for the holding of a third Conference

within a period similar to that which elapsed between the First and

Second Conferences.

The delegates of the United States worthily represented the spirit of

the American people and maintained with fidelity and ability the policy

of our Government upon all the great questions discussed in the

Conference.

The report of the delegation, together with authenticated copies of the

conventions signed, when received, will be laid before the Senate for

its consideration.

When we remember how difficult it is for one of our own legislative

bodies, composed of citizens of the same country, speaking the same

language, living under the same laws, and having the same customs, to

reach an agreement, or even to secure a majority upon any difficult and

important subject which is proposed for legislation, it becomes plain

that the representatives of forty-five different countries, speaking

many different languages, accustomed to different methods of procedure,

with widely diverse interests, who discussed so many different subjects

and reached agreements upon so many, are entitled to grateful

appreciation for the wisdom, patience, and moderation with which they

have discharged their duty. The example of this temperate discussion,

and the agreements and the efforts to agree, among representatives of

all the nations of the earth, acting with universal recognition of the

supreme obligation to promote peace, can not fail to be a powerful

influence for good in future international relations.

A year ago in consequence of a revolutionary movement in Cuba which

threatened the immediate return to chaos of the island, the United

States intervened, sending down an army and establishing a provisional

government under Governor Magoon. Absolute quiet and prosperity have

returned to the island because of this action. We are now taking steps

to provide for elections in the island and our expectation is within

the coming year to be able to turn the island over again to government

chosen by the people thereof. Cuba is at our doors. It is not possible

that this Nation should permit Cuba again to sink into the condition

from which we rescued it. All that we ask of the Cuban people is that

they be prosperous, that they govern themselves so as to bring content,

order and progress to their island, the Queen of the Antilles; and our

only interference has been and will be to help them achieve these

results.

An invitation has been extended by Japan to the Government and people

of the United States to participate in a great national exposition to

be held at Tokyo from April 1 to October 31, 1912, and in which the

principal countries of the world are to be invited to take part. This

is an occasion of special interest to all the nations of the world, and

peculiarly so to us; for it is the first instance in which such a great

national exposition has been held by a great power dwelling on the

Pacific; and all the nations of Europe and America will, I trust, join

in helping to success this first great exposition ever held by a great

nation of Asia. The geographical relations of Japan and the United

States as the possessors of such large portions of the coasts of the

Pacific, the intimate trade relations already existing between the two

countries, the warm friendship which has been maintained between them

without break since the opening of Japan to intercourse with the

western nations, and her increasing wealth and production, which we

regard with hearty goodwill and wish to make the occasion of mutually

beneficial commerce, all unite in making it eminently desirable that

this invitation should be accepted. I heartily recommend such

legislation as will provide in generous fashion for the representation

of this Government and its people in the proposed exposition. Action

should be taken now. We are apt to underestimate the time necessary for

preparation in such cases. The invitation to the French Exposition of

1900 was brought to the attention of the Congress by President

Cleveland in December, 1895; and so many are the delays necessary to

such proceedings that the period of font years and a half which then

intervened before the exposition proved none too long for the proper

preparation of the exhibits.

The adoption of a new tariff by Germany, accompanied by conventions for

reciprocal tariff concessions between that country and most of the

other countries of continental Europe, led the German Government to

give the notice necessary to terminate the reciprocal commercial

agreement with this country proclaimed July 13, 1900. The notice was to

take effect on the 1st of March, 1906, and in default of some other

arrangements this would have left the exports from the United States to

Germany subject to the general German tariff duties, from 25 to 50 per

cent higher than the conventional duties imposed upon the goods of most

of our competitors for German trade.

Under a special agreement made between the two Governments in February,

1906, the German Government postponed the operation of their notice

until the 30th of June, 1907. In the meantime, deeming it to be my duty

to make every possible effort to prevent a tariff war between the

United States and Germany arising from misunderstanding by either

country of the conditions existing in the other, and acting upon the

invitation of the German Government, I sent to Berlin a commission

composed of competent experts in the operation and administration of

the customs tariff, from the Departments of the Treasury and Commerce

and Labor. This commission was engaged for several mouths in conference

with a similar commission appointed by the German Government, under

instructions, so far as practicable, to reach a common understanding as

to all the facts regarding the tariffs of the United States and Germany

material and relevant to the trade relations between the two countries.

The commission reported, and upon the basis of the report, a further

temporary commercial agreement was entered into by the two countries,

pursuant to which, in the exercise of the authority conferred upon the

President by the third section of the tariff act of July 24, 1897, I

extended the reduced tariff rates provided for in that section to

champagne and all other sparkling wines, and pursuant to which the

German conventional or minimum tariff rates were extended to about 96

1/2 per cent of all the exports from the United States to Germany. This

agreement is to remain in force until the 30th of June, 1908, and until

six months after notice by either party to terminate it.

The agreement and the report of the commission on which it is based

will be laid before the Congress for its information.

This careful examination into the tariff relations between the United

States and Germany involved an inquiry into certain of our methods of

administration which had been the cause of much complaint on the part

of German exporters. In this inquiry I became satisfied that certain

vicious and unjustifiable practices had grown up in our customs

administration, notably the practice of determining values of imports

upon detective reports never disclosed to the persons whose interests

were affected. The use of detectives, though often necessary, tends

towards abuse, and should be carefully guarded. Under our practice as I

found it to exist in this case, the abuse had become gross and

discreditable. Under it, instead of seeking information as to the

market value of merchandise from the well-known and respected members

of the commercial community in the country of its production, secret

statements were obtained from informers and discharged employees and

business rivals, and upon this kind of secret evidence the values of

imported goods were frequently raised and heavy penalties were

frequently imposed upon importers who were never permitted to know what

the evidence was and who never had an opportunity to meet it. It is

quite probable that this system tended towards an increase of the

duties collected upon imported goods, but I conceive it to be a

violation of law to exact more duties than the law provides, just as it

is a violation to admit goods upon the payment of less than the legal

rate of duty. This practice was repugnant to the spirit of American law

and to American sense of justice. In the judgment of the most competent

experts of the Treasury Department and the Department of Commerce and

Labor it was wholly unnecessary for the due collection of the customs

revenues, and the attempt to defend it merely illustrates the

demoralization which naturally follows from a long continued course of

reliance upon such methods. I accordingly caused the regulations

governing this branch of the customs service to be modified so that

values are determined upon a hearing in which all the parties

interested have an opportunity to be heard and to know the evidence

against them. Moreover our Treasury agents are accredited to the

government of the country in which they seek information, and in

Germany receive the assistance of the quasi-official chambers of

commerce in determining the actual market value of goods, in accordance

with what I am advised to be the true construction of the law.

These changes of regulations were adapted to the removal of such

manifest abuses that I have not felt that they ought to be confined to

our relations with Germany; and I have extended their operation to all

other countries which have expressed a desire to enter into similar

administrative relations.

I ask for authority to reform the agreement with China under which the

indemnity of 1900 was fixed, by remitting and cancelling the obligation

of China for the payment of all that part of the stipulated indemnity

which is in excess of the sum of eleven million, six hundred and

fifty-five thousand, four hundred and ninety-two dollars and sixty-nine

cents, and interest at four per cent. After the rescue of the foreign

legations in Peking during the Boxer troubles in 1900 the Powers

required from China the payment of equitable indemnities to the several

nations, and the final protocol under which the troops were withdrawn,

signed at Peking, September 7, 1901, fixed the amount of this indemnity

allotted to the United States at over $20,000,000, and China paid, up

to and including the 1st day of June last, a little over $6,000,000. It

was the first intention of this Government at the proper time, when all

claims had been presented and all expenses ascertained as fully as

possible, to revise the estimates and account, and as a proof of

sincere friendship for China voluntarily to release that country from

its legal liability for all payments in excess of the sum which should

prove to be necessary for actual indemnity to the United States and its

citizens.

This Nation should help in every practicable way in the education of

the Chinese people, so that the vast and populous Empire of China may

gradually adapt itself to modern conditions. One way of doing this is

by promoting the coming of Chinese students to this country and making

it attractive to them to take courses at our universities and higher

educational institutions. Our educators should, so far as possible,

take concerted action toward this end.

On the courteous invitation of the President of Mexico, the Secretary

of State visited that country in September and October and was received

everywhere with the greatest kindness and hospitality.

He carried from the Government of the United States to our southern

neighbor a message of respect and good will and of desire for better

acquaintance and increasing friendship. The response from the

Government and the people of Mexico was hearty and sincere. No pains

were spared to manifest the most friendly attitude and feeling toward

the United States.

In view of the close neighborhood of the two countries the relations

which exist between Mexico and the United States are just cause for

gratification. We have a common boundary of over 1,500 miles from the

Gulf of Mexico to the Pacific. Much of it is marked only by the

shifting waters of the Rio Grande. Many thousands of Mexicans are

residing upon our side of the line and it is estimated that over 40,000

Americans are resident in Mexican territory and that American

investments in Mexico amount to over seven hundred million dollars. The

extraordinary industrial and commercial prosperity of Mexico has been

greatly promoted by American enterprise, and Americans are sharing

largely in its results. The foreign trade of the Republic already

exceeds $240,000,000 per annum, and of this two-thirds both of exports

and imports are exchanged with the United States. Under these

circumstances numerous questions necessarily arise between the two

countries. These questions are always approached and disposed of in a

spirit of mutual courtesy and fair dealing. Americans carrying on

business in Mexico testify uniformly to the kindness and consideration

with which they are treated and their sense of the security of their

property and enterprises under the wise administration of the great

statesman who has so long held the office of Chief Magistrate of that

Republic.

The two Governments have been uniting their efforts for a considerable

time past to aid Central America in attaining the degree of peace and

order which have made possible the prosperity of the northern ports of

the Continent. After the peace between Guatemala, Honduras, and

Salvador, celebrated under the circumstances described in my last

Message, a new war broke out between the Republics of Nicaragua,

Honduras, and Salvador. The effort to compose this new difficulty has

resulted in the acceptance of the joint suggestion of the Presidents of

Mexico and of the United States for a general peace conference between

all the countries of Central America. On the 17th day of September last

a protocol was signed between the representatives of the five Central

American countries accredited to this Government agreeing upon a

conference to be held in the City of Washington "in order to devise the

means of preserving the good relations among said Republics and

bringing about permanent peace in those countries." The protocol

includes the expression of a wish that the Presidents of the United

States and Mexico should appoint "representatives to lend their good

and impartial offices in a purely friendly way toward the realization

of the objects of the conference." The conference is now in session and

will have our best wishes and, where it is practicable, our friendly

assistance.

One of the results of the Pan American Conference at Rio Janeiro in the

summer of 1906 has been a great increase in the activity and usefulness

of the International Bureau of American Republics. That institution,

which includes all the American Republics in its membership and brings

all their representatives together, is doing a really valuable work in

informing the people of the United States about the other Republics and

in making the United States known to them. Its action is now limited by

appropriations determined when it was doing a work on a much smaller

scale and rendering much less valuable service. I recommend that the

contribution of this Government to the expenses of the Bureau be made

commensurate with its increased work.

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