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diff --git a/.gitattributes b/.gitattributes new file mode 100644 index 0000000..6833f05 --- /dev/null +++ b/.gitattributes @@ -0,0 +1,3 @@ +* text=auto +*.txt text +*.md text diff --git a/5036-h.zip b/5036-h.zip Binary files differnew file mode 100644 index 0000000..3a8f579 --- /dev/null +++ b/5036-h.zip diff --git a/5036-h/5036-h.htm b/5036-h/5036-h.htm new file mode 100644 index 0000000..c5ebfc9 --- /dev/null +++ b/5036-h/5036-h.htm @@ -0,0 +1,7228 @@ +<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.1//EN" + "http://www.w3.org/TR/xhtml11/DTD/xhtml11.dtd"> + +<html xmlns="http://www.w3.org/1999/xhtml" xml:lang="en"> + +<head> + +<meta http-equiv="Content-Type" content="text/html; charset=ISO-8859-1" /> + +<title> +The Project Gutenberg E-text of State of the Union Addresses, by Calvin Coolidge +</title> + +<style type="text/css"> +body { color: black; + background: white; + margin-right: 10%; + margin-left: 10%; + font-family: "Times New Roman", serif; + text-align: justify } + +p {text-indent: 4% } + +p.noindent {text-indent: 0% } + +p.t1 {text-indent: 0% ; + font-size: 200%; + text-align: center } + +p.t2 {text-indent: 0% ; + font-size: 150%; + text-align: center } + +p.t3 {text-indent: 0% ; + font-size: 100%; + text-align: center } + +p.t3b {text-indent: 0% ; + font-size: 100%; + font-weight: bold; + text-align: center } + +p.t4 {text-indent: 0% ; + font-size: 80%; + text-align: center } + +p.t4b {text-indent: 0% ; + font-size: 80%; + font-weight: bold; + text-align: center } + +p.t5 {text-indent: 0% ; + font-size: 60%; + text-align: center } + +h1 { text-align: center } +h2 { text-align: center } +h3 { text-align: center } +h4 { text-align: center } +h5 { text-align: center } + +p.poem {text-indent: 0%; + margin-left: 10%; } + +p.contents {text-indent: -3%; + margin-left: 5% } + +p.thought {text-indent: 0% ; + letter-spacing: 4em ; + text-align: center } + +p.letter {text-indent: 0%; + margin-left: 10% ; + margin-right: 10% } + +p.footnote {text-indent: 0% ; + font-size: 80%; + margin-left: 10% ; + margin-right: 10% } + +p.transnote {text-indent: 0% ; + margin-left: 0% ; + margin-right: 0% } + +p.intro {font-size: 90% ; + text-indent: -5% ; + margin-left: 5% ; + margin-right: 0% } + +p.quote {text-indent: 4% ; + margin-left: 0% ; + margin-right: 0% } + +p.finis { font-size: larger ; + text-align: center ; + text-indent: 0% ; + margin-left: 0% ; + margin-right: 0% } + +</style> + +</head> + +<body> + + +<pre> + +The Project Gutenberg EBook of State of the Union Addresses of Calvin +Coolidge, by Calvin Coolidge + +This eBook is for the use of anyone anywhere in the United States and most +other parts of the world at no cost and with almost no restrictions +whatsoever. You may copy it, give it away or re-use it under the terms of +the Project Gutenberg License included with this eBook or online at +www.gutenberg.org. If you are not located in the United States, you'll have +to check the laws of the country where you are located before using this ebook. + +Title: State of the Union Addresses of Calvin Coolidge + +Author: Calvin Coolidge + +Posting Date: December 3, 2014 [EBook #5036] +Release Date: February, 2004 +First Posted: April 11, 2002 +Last Updated: December 16, 2004 + +Language: English + +Character set encoding: ISO-8859-1 + +*** START OF THIS PROJECT GUTENBERG EBOOK STATE OF THE UNION ADDRESSES *** + + + + +Produced by James Linden. HTML version by Al Haines. + + + + + +</pre> + + +<h1> +<br /><br /><br /> +State of the Union Addresses of Calvin Coolidge +</h1> + +<p class="noindent"> +<br /><br /> +The addresses are separated by three asterisks: *** +</p> + +<p class="noindent"> +Dates of addresses by Calvin Coolidge in this eBook: +</p> + +<p class="noindent"> + <a href="#dec1923">December 6, 1923</a><br /> + <a href="#dec1924">December 3, 1924</a><br /> + <a href="#dec1925">December 8, 1925</a><br /> + <a href="#dec1926">December 7, 1926</a><br /> + <a href="#dec1927">December 6, 1927</a><br /> + <a href="#dec1928">December 4, 1928</a><br /> +</p> + +<p><br /><br /></p> + +<p class="t3"> +*** +</p> + +<p><a id="dec1923"></a></p> + +<p class="noindent"> +State of the Union Address<br /> +Calvin Coolidge<br /> +December 6, 1923<br /> +</p> + +<p> +Since the close of the last Congress the Nation has lost President Harding. +The world knew his kindness and his humanity, his greatness and his +character. He has left his mark upon history. He has made justice more +certain and peace more secure. The surpassing tribute paid to his memory as +he was borne across the continent to rest at last at home revealed the +place he held in the hearts of the American people. But this is not the +occasion for extended reference to the man or his work. In this presence, +among these who knew and loved him, that is unnecessary. But we who were +associated with him could not resume together the functions of our office +without pausing for a moment, and in his memory reconsecrating ourselves to +the service of our country. He is gone. We remain. It is our duty, under +the inspiration of his example, to take up the burdens which he was +permitted to lay down, and to develop and support the wise principles of +government which he represented. +</p> + +<p class="noindent"> +FOREIGN AFFAIRS +</p> + +<p> +For us peace reigns everywhere. We desire to perpetuate it always by +granting full justice to others and requiring of others full justice to +ourselves. +</p> + +<p> +Our country has one cardinal principle to maintain in its foreign policy. +It is an American principle. It must be an American policy. We attend to +our own affairs, conserve our own strength, and protect the interests of +our own citizens; but we recognize thoroughly our obligation to help +others, reserving to the decision of our own Judgment the time, the place, +and the method. We realize the common bond of humanity. We know the +inescapable law of service. +</p> + +<p> +Our country has definitely refused to adopt and ratify the covenant of the +League of Nations. We have not felt warranted in assuming the +responsibilities which its members have assumed. I am not proposing any +change in this policy; neither is the Senate. The incident, so far as we +are concerned, is closed. The League exists as a foreign agency. We hope it +will be helpful. But the United States sees no reason to limit its own +freedom and independence of action by joining it. We shall do well to +recognize this basic fact in all national affairs and govern ourselves +accordingly. +</p> + +<p class="noindent"> +WORLD COURT +</p> + +<p> +Our foreign policy has always been guided by two principles. The one is the +avoidance of permanent political alliances which would sacrifice our proper +independence. The other is the peaceful settlement of controversies between +nations. By example and by treaty we have advocated arbitration. For nearly +25 years we have been a member of The Hague Tribunal, and have long sought +the creation of a permanent World Court of Justice. I am in full accord +with both of these policies. I favor the establishment of such a court +intended to include the whole world. That is, and has long been, an +American policy. +</p> + +<p> +Pending before the Senate is a proposal that this Government give its +support to the Permanent Court of International Justice, which is a new and +somewhat different plan. This is not a partisan question. It should not +assume an artificial importance. The court is merely a convenient +instrument of adjustment to which we could go, but to which we could not +be brought. It should be discussed with entire candor, not by a political +but by a judicial method, without pressure and without prejudice. +Partisanship has no place in our foreign relations. As I wish to see a +court established, and as the proposal presents the only practical plan on +which many nations have ever agreed, though it may not meet every desire, I +therefore commend it to the favorable consideration of the Senate, with the +proposed reservations clearly indicating our refusal to adhere to the +League of Nations. +</p> + +<p class="noindent"> +RUSSIA +</p> + +<p> +Our diplomatic relations, lately so largely interrupted, are now being +resumed, but Russia presents notable difficulties. We have every desire to +see that great people, who are our traditional friends, restored to their +position among the nations of the earth. We have relieved their pitiable +destitution with an enormous charity. Our Government offers no objection +to the carrying on of commerce by our citizens with the people of Russia. +Our Government does not propose, however, to enter into relations with +another regime which refuses to recognize the sanctity of international +obligations. I do not propose to barter away for the privilege of trade any +of the cherished rights of humanity. I do not propose to make merchandise +of any American principles. These rights and principles must go wherever +the sanctions of our Government go. +</p> + +<p> +But while the favor of America is not for sale, I am willing to make very +large concessions for the purpose of rescuing the people of Russia. Already +encouraging evidences of returning to the ancient ways of society can be +detected. But more are needed. Whenever there appears any disposition to +compensate our citizens who were despoiled, and to recognize that debt +contracted with our Government, not by the Czar, but by the newly formed +Republic of Russia; whenever the active spirit of enmity to our +institutions is abated; whenever there appear works mete for repentance; +our country ought to be the first to go to the economic and moral rescue of +Russia. We have every desire to help and no desire to injure. We hope the +time is near at hand when we can act. +</p> + +<p class="noindent"> +DEBTS +</p> + +<p> +The current debt and interest due from foreign Governments, exclusive of +the British debt of $4,600,000,000, is about $7,200,000,000. I do not favor +the cancellation of this debt, but I see no objection to adjusting it in +accordance with the principle adopted for the British debt. Our country +would not wish to assume the role of an oppressive creditor, but would +maintain the principle that financial obligations between nations are +likewise moral obligations which international faith and honor require +should be discharged. +</p> + +<p> +Our Government has a liquidated claim against Germany for the expense of +the army of occupation of over $255,000,000. Besides this, the Mixed Claims +Commission have before them about 12,500 claims of American citizens, +aggregating about $1,225,000,000. These claims have already been reduced by +a recent decision, but there are valid claims reaching well toward +$500,000,000. Our thousands of citizens with credits due them of hundreds +of millions of dollars have no redress save in the action of our +Government. These are very substantial interests, which it is the duty of +our Government to protect as best it can. That course I propose to pursue. +</p> + +<p> +It is for these reasons that we have a direct interest in the economic +recovery of Europe. They are enlarged by our desire for the stability of +civilization and the welfare of humanity. That we are making sacrifices to +that end none can deny. Our deferred interest alone amounts to a million +dollars every day. But recently we offered to aid with our advice and +counsel. We have reiterated our desire to see France paid and Germany +revived. We have proposed disarmament. We have earnestly sought to compose +differences and restore peace. We shall persevere in well-doing, not by +force, but by reason. +</p> + +<p class="noindent"> +FOREIGN PAPERS +</p> + +<p> +Under the law the papers pertaining to foreign relations to be printed are +transmitted as a part of this message. Other volumes of these papers will +follow. +</p> + +<p class="noindent"> +FOREIGN SERVICE +</p> + +<p> +The foreign service of our Government needs to be reorganized and +improved. +</p> + +<p class="noindent"> +FISCAL CONDITION +</p> + +<p> +Our main problems are domestic problems. Financial stability is the first +requisite of sound government. We can not escape the effect of world +conditions. We can not avoid the inevitable results of the economic +disorders which have reached all nations. But we shall diminish their harm +to us in proportion as we continue to restore our Government finances to a +secure and endurable position. This we can and must do. Upon that firm +foundation rests the only hope of progress and prosperity. From that source +must come relief for the people. +</p> + +<p> +This is being, accomplished by a drastic but orderly retrenchment, which is +bringing our expenses within our means. The origin of this has been the +determination of the American people, the main support has been the courage +of those in authority, and the effective method has been the Budget System. +The result has involved real sacrifice by department heads, but it has been +made without flinching. This system is a law of the Congress. It represents +your will. It must be maintained, and ought to be strengthened by the +example of your observance. Without a Budget System there can be no fixed +responsibility and no constructive scientific economy. +</p> + +<p> +This great concentration of effort by the administration and Congress has +brought the expenditures, exclusive of the self-supporting Post. Office +Department, down to three billion dollars. It is possible, in consequence, +to make a large reduction in the taxes of the people, which is the sole +object of all curtailment. This is treated at greater length in the Budget +message, and a proposed plan has been presented in detail in a statement by +the Secretary of the Treasury which has my unqualified approval. I +especially commend a decrease on earned incomes, and further abolition of +admission, message, and nuisance taxes. The amusement and educational +value of moving pictures ought not to be taxed. Diminishing charges against +moderate incomes from investment will afford immense relief, while a +revision of the surtaxes will not only provide additional money for capital +investment, thus stimulating industry and employing more but will not +greatly reduce the revenue from that source, and may in the future actually +increase it. +</p> + +<p> +Being opposed to war taxes in time of peace, I am not in favor of +excess-profits taxes. A very great service could be rendered through +immediate enactment of legislation relieving the people of some of the +burden of taxation. To reduce war taxes is to give every home a better +chance. +</p> + +<p> +For seven years the people have borne with uncomplaining courage the +tremendous burden of national and local taxation. These must both be +reduced. The taxes of the Nation must be reduced now as much as prudence +will permit, and expenditures must be reduced accordingly. High taxes reach +everywhere and burden everybody. They gear most heavily upon the poor. They +diminish industry and commerce. They make agriculture unprofitable. They +increase the rates on transportation. They are a charge on every necessary +of life. Of all services which the Congress can render to the country, I +have no hesitation in declaring t neglect it, to postpone it, to obstruct +it by unsound proposals, is to become unworthy of public confidence and +untrue to public trust. The country wants this measure to have the right of +way over an others. +</p> + +<p> +Another reform which is urgent in our fiscal system is the abolition of the +right to issue tax-exempt securities. The existing system not only permits +a large amount of the wealth of the Notion to escape its just burden but +acts as a continual stimulant to municipal extravagance. This should be +prohibited by constitutional amendment. All the wealth of the Nation ought +to contribute its fair share to the expenses of the Nation. +</p> + +<p class="noindent"> +TARIFF LAW +</p> + +<p> +The present tariff law has accomplished its two main objects. It has +secured an abundant revenue and been productive of an abounding prosperity. +Under it the country has had a very large export and import trade. A +constant revision of the tariff by the Congress is disturbing and harmful. +The present law contains an elastic provision authorizing the President to +increase or decrease present schedules not in excess of 50 per centum to +meet the difference in cost of production at home and abroad. This does +not, to my mind, warrant a rewriting g of the whole law, but does mean, and +will be so administered, that whenever the required investigation shows +that inequalities of sufficient importance exist in any schedule, the power +to change them should and will be applied. +</p> + +<p class="noindent"> +SHIPPING +</p> + +<p> +The entire well being of our country is dependent upon transportation by +sea and land. Our Government during the war acquired a large merchant fleet +which should be transferred, as soon as possible, to private ownership and +operation under conditions which would secure two results: First, and of +prime importance, adequate means for national defense; second, adequate +service to American commerce. Until shipping conditions are such that our +fleet can be disposed of advantageously under these conditions, it will be +operated as economically as possible under such plans as may be devised +from time to time by the Shipping Board. We must have a merchant marine +which meets these requirements, and we shall have to pay the cost of its +service. +</p> + +<p class="noindent"> +PUBLIC IMPROVEMENTS +</p> + +<p> +The time has come to resume in a moderate way the opening of our +intracoastal waterways; the control of flood waters of the Mississippi and +of the Colorado Rivers; the improvement of the waterways from the Great +Lakes toward the Gulf of Mexico; and the development of the great power and +navigation project of the St. Lawrence River, for which efforts are now +being made to secure the necessary treaty with Canada. These projects can +not all be undertaken at once, but all should have the immediate +consideration of the Congress and be adopted as fast as plans can be +matured and the necessary funds become available. This is not incompatible +with economy, for their nature does not require so much a public +expenditure as a capital investment which will be reproductive, as +evidenced by the marked increase in revenue from the Panama Canal. Upon +these projects depend much future industrial and agricultural progress. +They represent the protection of large areas from flood and the addition of +a great amount of cheap power and cheap freight by use of navigation, chief +of which is the bringing of ocean-going ships to the Great Lakes. +</p> + +<p> +Another problem of allied character is the superpower development of the +Northeastern States, consideration of which is growing under the direction +of the Department of Commerce by joint conference with the local +authorities. +</p> + +<p class="noindent"> +RAILROADS +</p> + +<p> +Criticism of the railroad law has been directed, first, to the section +laying down the rule by which rates are fixed, and providing for payment to +the Government and use of excess earnings; second, to the method for the +adjustment of wage scales; and third, to the authority permitting +consolidations. +</p> + +<p> +It has been erroneously assumed that the act undertakes to guarantee +railroad earnings. The law requires that rates should be just and +reasonable. That has always been the rule under which rates have been +fixed. To make a rate that does not yield a fair return results in +confiscation, and confiscatory rates are of course unconstitutional. Unless +the Government adheres to the rule of making a rate that will yield a fair +return, it must abandon rate making altogether. The new and important +feature of that part of the law is the recapture and redistribution of +excess rates. The constitutionality of this method is now before the +Supreme Court for adjudication. Their decision should be awaited before +attempting further legislation on this subject. Furthermore, the importance +of this feature will not be great if consolidation goes into effect. +</p> + +<p> +The settlement of railroad labor disputes is a matter of grave public +concern. The Labor Board was established to protect the public in the +enjoyment of continuous service by attempting to insure justice between the +companies and their employees. It has been a great help, but is not +altogether satisfactory to the public, the employees, or the companies. If +a substantial agreement can be reached among the groups interested, there +should be no hesitation in enacting such agreement into law. If it is not +reached, the Labor Board may very well be left for the present to protect +the public welfare. +</p> + +<p> +The law for consolidations is not sufficiently effective to be expeditious. +Additional legislation is needed giving authority for voluntary +consolidations, both regional and route, and providing Government machinery +to aid and stimulate such action, always subject to the approval of the +Interstate Commerce Commission. This should authorize the commission to +appoint committees for each proposed group, representing the public and the +component roads, with power to negotiate with individual security holders +for an exchange of their securities for those of the, consolidation on such +terms and conditions as the commission may prescribe for avoiding any +confiscation and preserving fair values. Should this permissive +consolidation prove ineffective after a limited period, the authority of +the Government will have to be directly invoked. +</p> + +<p> +Consolidation appears to be the only feasible method for the maintenance of +an adequate system of transportation with an opportunity so to adjust +freight rates as to meet such temporary conditions as now prevail in some +agricultural sections. Competent authorities agree that an entire +reorganization of the rate structure for freight is necessary. This should +be ordered at once by the Congress. +</p> + +<p class="noindent"> +DEPARTMENT OF JUSTICE +</p> + +<p> +As no revision of the laws of the United States has been made since 1878, a +commission or committee should be created to undertake this work. The +Judicial Council reports that two more district judges are needed in the +southern district of New York, one in the northern district of Georgia, and +two more circuit judges in the Circuit Court of Appeals of the Eighth +Circuit. Legislation should be considered for this purpose. +</p> + +<p> +It is desirable to expedite the hearing and disposal of cases. A +commission of Federal judges and lawyers should be created to recommend +legislation by which the procedure in the Federal trial courts may be +simplified and regulated by rules of court, rather than by statute; such +rules to be submitted to the Congress and to be in force until annulled or +modified by the Congress. The Supreme Court needs legislation revising and +simplifying the laws governing review by that court, and enlarging the +classes of cases of too little public importance to be subject to review. +Such reforms would expedite the transaction of the business of the courts. +The administration of justice is likely to fail if it be long delayed. +</p> + +<p> +The National Government has never given adequate attention to its prison +problems. It ought to provide employment in such forms of production as can +be used by the Government, though not sold to the public in competition +with private business, for all prisoners who can be placed at work, and for +which they should receive a reasonable compensation, available for their +dependents. +</p> + +<p> +Two independent reformatories are needed; one for the segregation of women, +and another for the segregation of young men serving their first sentence. +</p> + +<p> +The administration of justice would be facilitated greatly by including in +the Bureau of Investigation of the Department of Justice a Division of +Criminal Identification, where there would be collected this information +which is now indispensable in the suppression of crime. +</p> + +<p class="noindent"> +PROHIBITION +</p> + +<p> +The prohibition amendment to the Constitution requires the Congress. and +the President to provide adequate laws to prevent its violation. It is my +duty to enforce such laws. For that purpose a treaty is being negotiated +with Great Britain with respect to the right of search of hovering +vessels. To prevent smuggling, the Coast Card should be greatly +strengthened, and a supply of swift power boats should be provided. The +major sources of production should be rigidly regulated, and every effort +should be made to suppress interstate traffic. With this action on the part +of the National Government, and the cooperation which is usually rendered +by municipal and State authorities, prohibition should be made effective. +Free government has no greater menace than disrespect for authority and +continual violation of law. It is the duty of a citizen not only to observe +the law but to let it be known that he is opposed to its violation. +</p> + +<p class="noindent"> +THE NEGRO +</p> + +<p> +Numbered among our population are some 12,000,000 colored people. Under our +Constitution their rights are just as sacred as those of any other citizen. +It is both a public and a private duty to protect those rights. The +Congress ought to exercise all its powers of prevention and punishment +against the hideous crime of lynching, of which the negroes are by no means +the sole sufferers, but for which they furnish a majority of the victims. +</p> + +<p> +Already a considerable sum is appropriated to give the negroes vocational +training in agriculture. About half a million dollars is recommended for +medical courses at Howard University to help contribute to the education of +500 colored doctors needed each year. On account of the integration of +large numbers into industrial centers, it has been proposed that a +commission be created, composed of members from both races, to formulate a +better policy for mutual understanding and confidence. Such an effort is to +be commended. Everyone would rejoice in the accomplishment of the results +which it seeks. But it is well to recognize that these difficulties are to +a large extent local problems which must be worked out by the mutual +forbearance and human kindness of each community. Such a method gives much +more promise of a real remedy than outside interference. +</p> + +<p class="noindent"> +CIVIL SERVICE +</p> + +<p> +The maintenance and extension of the classified civil service is +exceedingly important. There are nearly 550,000 persons in the executive +civil service drawing about $700,000,000 of yearly compensation. +Four-fifths of these are in the classified service. This method of +selection of the employees of the United States is especially desirable for +the Post Office Department. The Civil Service Commission has recommended +that postmasters at first, second, and third class offices be classified. +Such action, accompanied by a repeal of the four-year term of office, would +undoubtedly be an improvement. I also recommend that the field force for +prohibition enforcement be brought within the classified civil service +without covering in the present membership. The best method for selecting +public servants is the merit system. +</p> + +<p class="noindent"> +PUBLIC BUILDINGS +</p> + +<p> +Many of the departments in Washington need better housing facilities. Some +are so crowded that their work is impeded, others are so scattered that +they lose their identity. While I do not favor at this time a general +public building law, I believe it is now necessary, in accordance with +plans already sanctioned for a unified and orderly system for the +development of this city, to begin the carrying out of those plans by +authorizing the erection of three or four buildings most urgently needed by +an annual appropriation of $5,000,000. +</p> + +<p class="noindent"> +REGULATORY LEGISLATION +</p> + +<p> +Cooperation with other maritime powers is necessary for complete protection +of our coast waters from pollution. Plans for this are under way, but +await certain experiments for refuse disposal. Meantime laws prohibiting +spreading oil and oil refuse from vessels in our own territorial waters +would be most helpful against this menace and should be speedily enacted. +</p> + +<p> +Laws should be passed regulating aviation. +</p> + +<p> +Revision is needed of the laws regulating radio interference. +</p> + +<p> +Legislation and regulations establishing load liner, to provide safe +loading of vessels leaving our ports are necessary and recodification of +our navigation laws is vital. +</p> + +<p> +Revision of procedure of the Federal Trade Commission will give more +constructive purpose to this department. +</p> + +<p> +If our Alaskan fisheries are to be saved from destruction, there must be +further legislation declaring a general policy and delegating the authority +to make rules and regulations to an administrative body. +</p> + +<p class="noindent"> +ARMY AND NAVY +</p> + +<p> +For several years we have been decreasing the personnel of the Army and +Navy, and reducing their power to the danger point. Further reductions +should not be made. The Army is a guarantee of the security of our citizens +at home; the Navy is a guarantee of the security of our citizens abroad. +Both of these services should be strengthened rather than weakened. +Additional planes are needed for the Army, and additional submarines for +the Navy. The defenses of Panama must be perfected. We want no more +competitive armaments. We want no more war. But we want no weakness that +invites imposition. A people who neglect their national defense are putting +in jeopardy their national honor. +</p> + +<p class="noindent"> +INSULAR POSSESSIONS +</p> + +<p> +Conditions in the insular possessions on the whole have been good. Their +business has been reviving. They are being administered according to law. +That effort has the full support of the administration. Such +recommendations as may conic from their people or their governments should +have the most considerate attention. +</p> + +<p class="noindent"> +EDUCATION AND WELFARE +</p> + +<p> +Our National Government is not doing as much as it legitimately can do to +promote the welfare of the people. Our enormous material wealth, our +institutions, our whole form of society, can not be considered fully +successful until their benefits reach the merit of every individual. This +is not a suggestion that the Government should, or could, assume for the +people the inevitable burdens of existence. There is no method by which we +can either be relieved of the results of our own folly or be guaranteed a +successful life. There is an inescapable personal responsibility for the +development of character, of industry, of thrift, and of self-control. +These do not come from the Government, but from the people themselves. But +the Government can and should always be expressive of steadfast +determination, always vigilant, to maintain conditions under which these +virtues are most likely to develop and secure recognition and reward. This +is the American policy. +</p> + +<p> +It is in accordance with this principle that we have enacted laws for the +protection of the public health and have adopted prohibition in narcotic +drugs and intoxicating liquors. For purposes of national uniformity we +ought to provide, by constitutional amendment and appropriate legislation, +for a limitation of child labor, and in all cases under the exclusive +jurisdiction of the Federal Government a minimum wage law for women, which +would undoubtedly find sufficient power of enforcement in the influence of +public opinion. +</p> + +<p> +Having in mind that education is peculiarly a local problem, and that it +should always be pursued with the largest freedom of choice by students and +parents, nevertheless, the Federal Government might well give the benefit +of its counsel and encouragement more freely in this direction. If anyone +doubts the need of concerted action by the States of the Nation for this +purpose, it is only necessary to consider the appalling figures of +illiteracy representing a condition which does not vary much in all parts +of the Union. I do not favor the making of appropriations from the National +Treasury to be expended directly on local education, but I do consider it a +fundamental requirement of national activity which, accompanied by allied +subjects of welfare, is worthy of a separate department and a place in the +Cabinet. The humanitarian side of government should not be repressed, but +should be cultivated. +</p> + +<p> +Mere intelligence, however, is not enough. Enlightenment must be +accompanied by that moral power which is the product of the home and of +rebellion. Real education and true welfare for the people rest inevitably +on this foundation, which the Government can approve and commend, but which +the people themselves must create. +</p> + +<p class="noindent"> +IMMIGRATION +</p> + +<p> +American institutions rest solely on good citizenship. They were created by +people who had a background of self-government. New arrivals should be +limited to our capacity to absorb them into the ranks of good citizenship. +America must be kept American. For this purpose, it is necessary to +continue a policy of restricted immigration. It would be well to make such +immigration of a selective nature with some inspection at the source, and +based either on a prior census or upon the record of naturalization. Either +method would insure the admission of those with the largest capacity and +best intention of becoming citizens. I am convinced that our present +economic and social conditions warrant a limitation of those to be +admitted. We should find additional safety in a law requiring the immediate +registration of all aliens. Those who do not want to be partakers of the +American spirit ought not to settle in America. +</p> + +<p class="noindent"> +VETERANS +</p> + +<p> +No more important duty falls on the Government of the United States than +the adequate care of its veterans. Those suffering disabilities incurred in +the service must have sufficient hospital relief and compensation. Their +dependents must be supported. Rehabilitation and vocational training must +be completed. All of this service must be clean, must be prompt and +effective, and it must be administered in a spirit of the broadest and +deepest human sympathy. If investigation reveals any present defects of +administration or need Of legislation, orders will be given for the +immediate correction of administration, and recommendations for legislation +should be given the highest preference. +</p> + +<p> +At present there are 9,500 vacant beds in Government hospitals, I recommend +that all hospitals be authorized at once to receive and care for, without +hospital pay, the veterans of all wars needing such care, whenever there +are vacant beds, and that immediate steps be taken to enlarge and build new +hospitals to serve all such cases. +</p> + +<p> +The American Legion will present to the Congress a legislative program +too extensive for detailed discussion here. It is a carefully matured plan. +While some of it I do not favor, with much of it I am in hearty accord, and +I recommend that a most painstaking effort be made to provide remedies for +any defects in the administration of the present laws which their +experience has revealed. The attitude of the Government toward these +proposals should be one of generosity. But I do not favor the granting of a +bonus. +</p> + +<p class="noindent"> +COAL +</p> + +<p> +The cost of coal has become unbearably high. It places a great burden on +our industrial and domestic life. The public welfare requires a reduction +in the price of fuel. With the enormous deposits in existence, failure of +supply ought not to be tolerated. Those responsible for the conditions in +this industry should undertake its reform and free it from any charge of +profiteering. +</p> + +<p> +The report of the Coal Commission will be before the Congress. It comprises +all the facts. It represents the mature deliberations and conclusions of +the best talent and experience that ever made a national survey of the +production and distribution of fuel. I do not favor Government ownership or +operation of coal mines. The need is for action under private ownership +that will secure greater continuity of production and greater public +protection. The Federal Government probably has no peacetime authority to +regulate wages, prices, or profits in coal at the mines or among dealers, +but by ascertaining and publishing facts it can exercise great influence. +</p> + +<p> +The source of the difficulty in the bituminous coal fields is the +intermittence of operation which causes great waste of both capital and +labor. That part of the report dealing with this problem has much +significance, and is suggestive of necessary remedies. By amending, the car +rules, by encouraging greater unity of ownership, and possibly by +permitting common selling agents for limited districts on condition that +they accept adequate regulations and guarantee that competition between +districts be unlimited, distribution, storage, and continuity ought to be +improved. +</p> + +<p> +The supply of coal must be constant. In case of its prospective +interruption, the President should have authority to appoint a commission +empowered to deal with whatever emergency situation might arise, to aid +conciliation and voluntary arbitration, to adjust any existing or +threatened controversy between the employer and the employee when +collective bargaining fails, and by controlling distribution to prevent +profiteering in this vital necessity. This legislation is exceedingly +urgent, and essential to the exercise of national authority for the +protection of the people. Those who undertake the responsibility of +management or employment in this industry do so with the full knowledge +that the public interest is paramount, and that to fail through any motive +of selfishness in its service is such a betrayal of duty as warrants +uncompromising action by the Government. +</p> + +<p class="noindent"> +REORGANIZATION +</p> + +<p> +A special joint committee has been appointed to work out a plan for a +reorganization of the different departments and bureaus of the Government +more scientific and economical than the present system. With the exception +of the consolidation of the War and Navy Departments and some minor +details, the plan has the general sanction of the President and the +Cabinet. It is important that reorganization be enacted into law at the +present session. +</p> + +<p class="noindent"> +AGRICULTURE +</p> + +<p> +Aided by the sound principles adopted by the Government, the business of +the country has had an extraordinary revival. Looked at as a whole, the +Nation is in the enjoyment of remarkable prosperity. Industry and commerce +are thriving. For the most tart agriculture is successful, eleven staples +having risen in value from about $5,300,000,000 two years ago to about. +$7,000,000,000 for the current year. But range cattle are still low in +price, and some sections of the wheat area, notably Minnesota, North +Dakota, and on west, have many cases of actual distress. With his products +not selling on a parity with the products of industry, every sound remedy +that can be devised should be applied for the relief of the farmer. He +represents a character, a type of citizenship, and a public necessity that +must be preserved and afforded every facility for regaining prosperity. +</p> + +<p> +The distress is most acute among those wholly dependent upon one crop.. +Wheat acreage was greatly expanded and has not yet been sufficiently +reduced. A large amount is raised for export, which has to meet the +competition in the world market of large amounts raised on land much +cheaper and much more productive. +</p> + +<p> +No complicated scheme of relief, no plan for Government fixing of prices, +no resort to the public Treasury will be of any permanent value in +establishing agriculture. Simple and direct methods put into operation by +the farmer himself are the only real sources for restoration. +</p> + +<p> +Indirectly the farmer must be relieved by a reduction of national and local +taxation. He must be assisted by the reorganization of the freight-rate +structure which could reduce charges on his production. To make this fully +effective there ought to be railroad consolidations. Cheaper fertilizers +must be provided. +</p> + +<p> +He must have organization. His customer with whom he exchanges products o +he farm for those of industry is organized, labor is organized, business is +organized, and there is no way for agriculture to meet this unless it, too, +is organized. The acreage of wheat is too large. Unless we can meet the +world market at a profit, we must stop raising for export. Organization +would help to reduce acreage. Systems of cooperative marketing created by +the farmers themselves, supervised by competent management, without doubt +would be of assistance, but, the can not wholly solve the problem. Our +agricultural schools ought to have thorough courses in the theory of +organization and cooperative marketing. +</p> + +<p> +Diversification is necessary. Those farmers who raise their living on their +land are not greatly in distress. Such loans as are wisely needed to assist +buying stock and other materials to start in this direction should be +financed through a Government agency as a temporary and emergency +expedient. +</p> + +<p> +The remaining difficulty is the disposition of exportable wheat. I do not +favor the permanent interference of the Government in this problem. That +probably would increase the trouble by increasing production. But it seems +feasible to provide Government assistance to exports, and authority should +be given the War Finance Corporation to grant, in its discretion, the most +liberal terms of payment for fats and grains exported for the direct +benefit of the farm. +</p> + +<p class="noindent"> +MUSCLE SHOALS +</p> + +<p> +The Government is undertaking to develop a great water-power project known +as Muscle Shoals, on which it has expended many million dollars. The work +is still going on. Subject to the right to retake in time of war, I +recommend that this property with a location for auxiliary steam plant and +rights of way be sold. This would end the present burden of expense and +should return to the Treasury the largest price possible to secure. +</p> + +<p> +While the price is an important element, there is another consideration +even more compelling. The agriculture of the Nation needs a greater supply +and lower cost of fertilizer. This is now imported in large quantities. The +best information I can secure indicates that present methods of power +production would not be able profitably to meet the price at which these +imports can be sold. To obtain a supply from this water power would require +long and costly experimentation to perfect a process for cheap production. +Otherwise our purpose would fail completely. It seems desirable, therefore, +in order to protect and promote the public welfare, to have adequate +covenants that such experimentation be made and carried on to success. The +great advantage of low-priced nitrates must be secured for the direct +benefit of the farmers and the indirect benefit of the public in time of +peace, and of the Government in time of war. If this main object be +accomplished, the amount of money received for the property is not a +primary or major consideration. +</p> + +<p> +Such a solution will involve complicated negotiations, and there is no +authority for that purpose. I therefore recommend that the Congress +appoint a small joint committee to consider offers, conduct negotiations, +and report definite recommendations. +</p> + +<p class="noindent"> +RECLAMATION +</p> + +<p> +By reason of many contributing causes, occupants of our reclamation +projects are in financial difficulties, which in some cases are acute. +Relief should be granted by definite authority of law empowering the +Secretary of the Interior in his discretion to suspend, readjust, and +reassess all charges against water users. This whole question is being +considered by experts. You will have the advantage of the facts and +conclusions which they may develop. This situation, involving a Government +investment of more than $135,000,000, and affecting more than 30,000 water +users, is serious. While relief which is necessary should be granted, yet +contracts with the Government which can be met should be met. The +established general policy of these projects should not be abandoned for +any private control. +</p> + +<p class="noindent"> +HIGHWAYS AND FORESTS +</p> + +<p> +Highways and reforestation should continue to have the interest and support +of the Government. Everyone is anxious for good highways. I have made a +liberal proposal in the Budget for the continuing payment to the States by +the Federal Government of its share for this necessary public improvement. +No expenditure of public money contributes so much to the national wealth +as for building good roads. +</p> + +<p> +Reforestation has an importance far above the attention it usually secures. +A special committee of the Senate is investigating this need, and I shall +welcome a constructive policy based on their report. +</p> + +<p> +It is 100 years since our country announced the Monroe doctrine. This +principle has been ever since, and is now, one of the main foundations of +our foreign relations. It must be maintained. But in maintaining it we must +not be forgetful that a great change has taken place. We are no longer a +weak Nation, thinking mainly of defense, dreading foreign imposition. We +are great and powerful. New powers bring new responsibilities. Our ditty +then was to protect ourselves. Added to that, our duty now is to help give +stability to the world. We want idealism. We want that vision which lifts +men and nations above themselves. These are virtues by reason of their own +merit. But they must not be cloistered; they must not be impractical; they +must not be ineffective. +</p> + +<p> +The world has had enough of the curse of hatred and selfishness, of +destruction and war. It has had enough of the wrongful use of material +power. For the healing of the nations there must be good will and charity, +confidence and peace. The time has come for a more practical use of moral +power, and more reliance upon the principle that right makes its own might. +Our authority among the nations must be represented by justice and mercy. +It is necessary not only to have faith, but to make sacrifices for our +faith. The spiritual forces of the world make all its final determinations. +It is with these voices that America should speak. Whenever they declare a +righteous purpose there need be no doubt that they will be heard. America +has taken her place in the world as a Republic--free, independent, +powerful. The best service that can be rendered to humanity is the +assurance that this place will be maintained. +</p> + +<p><br /><br /><br /></p> + +<p class="t3"> +*** +</p> + +<p><a id="dec1924"></a></p> + +<p class="noindent"> +State of the Union Address<br /> +Calvin Coolidge<br /> +December 3, 1924<br /> +</p> + +<p class="noindent"> +To the Congress of the United States: +</p> + +<p> +The present state of the Union, upon which it is customary for the +President to report to the Congress under the provisions of the +Constitution, is such that it may be regarded with encouragement and +satisfaction by every American. Our country is almost unique in its ability +to discharge fully and promptly all its obligations at home and abroad, and +provide for all its inhabitants an increase in material resources, in +intellectual vigor and in moral power. The Nation holds a position +unsurpassed in all former human experience. This does not mean that we do +not have any problems. It is elementary that the increasing breadth of our +experience necessarily increases the problems of our national life. But it +does mean that if all will but apply ourselves industriously and honestly, +we have ample powers with which to meet our problems and provide for I heir +speedy solution. I do not profess that we can secure an era of perfection +in human existence, but we can provide an era of peace and prosperity, +attended with freedom and justice and made more and more satisfying by the +ministrations of the charities and humanities of life. +</p> + +<p> +Our domestic problems are for the most part economic. We have our enormous +debt to pay, and we are paying it. We have the high cost of government to +diminish, and we are diminishing it. We have a heavy burden of taxation to +reduce, and we are reducing it. But while remarkable progress has been made +in these directions, the work is yet far from accomplished. We still owe +over $21,000,000,000, the cost of the National Government is still about +$3,500,000,000, and the national taxes still amount to about $27 for each +one of our inhabitants. There yet exists this enormous field for the +application of economy. +</p> + +<p> +In my opinion the Government can do more to remedy the economic ills of the +people by a system of rigid economy in public expenditure than can be +accomplished through any other action. The costs of our national and local +governments combined now stand at a sum close to $100 for each inhabitant +of the land. A little less than one-third of this is represented by +national expenditure, and a little more than two-thirds by local +expenditure. It is an ominous fact that only the National Government is +reducing its debt. Others are increasing theirs at about $1,000,000,000 +each year. The depression that overtook business, the disaster experienced +in agriculture, the lack of employment and the terrific shrinkage in all +values which our country experienced in a most acute form in 1920, resulted +in no small measure from the prohibitive taxes which were then levied on +all productive effort. The establishment of a system of drastic economy in +public expenditure, which has enabled us to pay off about one-fifth of the +national debt since 1919, and almost cut in two the national tax burden +since 1921, has been one of the main causes in reestablishing a prosperity +which has come to include within its benefits almost every one of our +inhabitants. Economy reaches everywhere. It carries a blessing to +everybody. +</p> + +<p> +The fallacy of the claim that the costs of government are borne by the rich +and those who make a direct contribution to the National Treasury can not +be too often exposed. No system has been devised, I do not think any system +could be devised, under which any person living in this country could +escape being affected by the cost of our government. It has a direct effect +both upon the rate and the purchasing power of wages. It is felt in the +price of those prime necessities of existence, food, clothing, fuel and +shelter. It would appear to be elementary that the more the Government +expends the more it must require every producer to contribute out of his +production to the Public Treasury, and the less he will have for his own +benefit. The continuing costs of public administration can be met in only +one way--by the work of the people. The higher they become, the more the +people must work for the Government. The less they are, the more the people +can work for themselves. +</p> + +<p> +The present estimated margin between public receipts and expenditures for +this fiscal year is very small. Perhaps the most important work that this +session of the Congress can do is to continue a policy of economy and +further reduce the cost of government, in order that we may have a +reduction of taxes for the next fiscal year. Nothing is more likely to +produce that public confidence which is the forerunner and the mainstay of +prosperity, encourage and enlarge business opportunity with ample +opportunity for employment at good wages, provide a larger market for +agricultural products, and put our country in a stronger position to be +able to meet the world competition in trade, than a continuing policy of +economy. Of course necessary costs must be met, proper functions of the +Government performed, and constant investments for capital account and +reproductive effort must be carried on by our various departments. But the +people must know that their Government is placing upon them no unnecessary +burden. +</p> + +<p> +TAXES +</p> + +<p> +Everyone desires a reduction of taxes, and there is a great preponderance +of sentiment in favor of taxation reform. When I approved the present tax +law, I stated publicly that I did so in spite of certain provisions which I +believed unwise and harmful. One of the most glaring of these was the +making public of the amounts assessed against different income-tax payers. +Although that damage has now been done, I believe its continuation to be +detrimental To the public welfare and bound to decrease public revenues, so +that it ought to be repealed. +</p> + +<p> +Anybody can reduce taxes, but it is not so easy to stand in the gap and +resist the passage of increasing appropriation bills which would make tax +reduction impossible. It will be very easy to measure the strength of the +attachment to reduced taxation by the power with which increased +appropriations are resisted. If at the close of the present session the +Congress has kept within the budget which I propose to present, it will +then be possible to have a moderate amount of tax reduction and all the tax +reform that the Congress may wish for during the next fiscal year. The +country is now feeling the direct stimulus which came from the passage of +the last revenue bill, and under the assurance of a reasonable system of +taxation there is every prospect of an era of prosperity of unprecedented +proportions. But it would be idle to expect any such results unless +business can continue free from excess profits taxation and be accorded a +system of surtaxes at rates which have for their object not the punishment +of success or the discouragement of business, but the production of the +greatest amount of revenue from large incomes. I am convinced that the +larger incomes of the country would actually yield more revenue to the +Government if the basis of taxation were scientifically revised downward. +Moreover the effect of the present method of this taxation is to increase +the cost of interest on productive enterprise and to increase the burden +of rent. It is altogether likely that such reduction would so encourage and +stimulate investment that it would firmly establish our country in the +economic leadership of the world. +</p> + +<p> +WATERWAYS +</p> + +<p> +Meantime our internal development should go on. Provision should be made +for flood control of such rivers as the Mississippi and the Colorado, and +for the opening up of our inland waterways to commerce. Consideration is +due to the project of better navigation from the Great Lakes to the Gulf. +Every effort is being made to promote an agreement with Canada to build +the, St. Lawrence waterway. There are pending before the Congress bills for +further development of the Mississippi Basin, for the taking over of the +Cape Cod Canal in accordance with a moral obligation which seems to have +been incurred during the war, and for the improvement of harbors on both +the Pacific and the Atlantic coasts. While this last should be divested of +some of its projects and we must proceed slowly, these bills in general +have my approval. Such works are productive of wealth and in the long run +tend to a reduction of the tax burden. +</p> + +<p> +RECLAMATION +</p> + +<p> +Our country has a well defined policy of reclamation established under +statutory authority. This policy should be continued and made a +self-sustaining activity administered in a manner that will meet local +requirements and bring our and lands into a profitable state of cultivation +as fast as there is a market for their products. Legislation is pending +based on the report of the Fact Finding Commission for the proper relief of +those needing extension of time in which to meet their payments on +irrigated land, and for additional amendments and reforms of our +reclamation laws, which are all exceedingly important and should be enacted +at once. +</p> + +<p> +No more important development has taken place in the last year than the +beginning of a restoration of agriculture to a prosperous condition. We +must permit no division of classes in this country, with one occupation +striving to secure advantage over another. Each must proceed under open +opportunities and with a fair prospect of economic equality. The Government +can not successfully insure prosperity or fix prices by legislative fiat. +Every business has its risk and its times of depression. It is well known +that in the long run there will be a more even prosperity and a more +satisfactory range of prices under the natural working out of economic laws +than when the Government undertakes the artificial support of markets and +industries. Still we can so order our affairs, so protect our own people +from foreign competition, so arrange our national finances, so administer +our monetary system, so provide for the extension of credits, so improve +methods of distribution, as to provide a better working machinery for the +transaction of the business of the Nation with the least possible friction +and loss. The Government has been constantly increasing its efforts in +these directions for the relief and permanent establishment of agriculture +on a sound and equal basis with other business. +</p> + +<p> +It is estimated that the value of the crops for this harvest year may reach +$13,000,000,000, which is an increase of over $3,000,000,000 in three +years. It compares with $7,100,000,000 in 1913, and if we make deduction +from the figures of 1924 for the comparatively decreased value of the +dollar, the yield this year still exceeds 1913 in purchasing power by over +$1,000,000,000, and in this interval there has been no increase in the +number of farmers. Mostly by his own effort the farmer has decreased the +cost of production. A marked increase in the price of his products and some +decrease in the price of his supplies has brought him about to a parity +with the rest of the Nation. The crop area of this season is estimated at +370,000,000 acres, which is a decline of 3,000,000 acres from last year, +and 6,000,000 acres from 1919. This has been a normal and natural +application of economic laws, which has placed agriculture on a foundation +which is undeniably sound and beginning to be satisfactory. +</p> + +<p> +A decrease in the world supply of wheat has resulted in a very large +increase in the price of that commodity. The position of all agricultural +products indicates a better balanced supply, but we can not yet conclude +that agriculture is recovered from the effects of the war period or that it +is permanently on a prosperous basis. The cattle industry has not yet +recovered and in some sections has been suffering from dry weather. Every +effort must be made both by Government activity and by private agencies to +restore and maintain agriculture to a complete normal relationship with +other industries. +</p> + +<p> +It was on account of past depression, and in spite of present more +encouraging conditions, that I have assembled an Agricultural Conference +made up of those who are representative of this great industry in both its +operating and economic sides. Everyone knows that the great need of the +farmers is markets. The country is not suffering on the side of production. +Almost the entire difficulty is on the side of distribution. This reaches +back, of course, to unit costs and diversification, and many allied +subjects. It is exceedingly intricate, for our domestic and foreign trade, +transportation and banking, and in fact our entire economic system, are +closely related to it. In time for action at this session, I hope to report +to the Congress such legislative remedies as the conference may recommend. +An appropriation should be made to defray their necessary expenses. +</p> + +<p> +MUSCLE SHOALS +</p> + +<p> +The production of nitrogen for plant food in peace and explosives in war is +more and more important. It is one of the chief sustaining elements of +life. It is estimated that soil exhaustion each year is represented by +about 9,000,000 tons and replenishment by 5,450,000 tons. The deficit of +3,550,000 tons is reported to represent the impairment of 118,000,000 acres +of farm lands each year. +</p> + +<p> +To meet these necessities the Government has been developing a water power +project at Muscle Shoals to be equipped to produce nitrogen for explosives +and fertilizer. It is my opinion that the support of agriculture is the +chief problem to consider in connection with this property. It could by no +means supply the present needs for nitrogen, but it would help and its +development would encourage bringing other water powers into like use. +</p> + +<p> +Several offers have been made for the purchase of this property. Probably +none of them represent final terms. Much costly experimentation is +necessary to produce commercial nitrogen. For that reason it is a field +better suited to private enterprise than to Government operation. I should +favor a sale of this property, or long-time lease, tinder rigid guaranties +of commercial nitrogen production at reasonable prices for agricultural +use. There would be a surplus of power for many years over any possibility +of its application to a developing manufacture of nitrogen. It may be found +advantageous to dispose of the right to surplus power separately with such +reservations as will allow its gradual withdrawal and application to +nitrogen manufacture. A subcommittee of the Committees on Agriculture +should investigate this field and negotiate with prospective purchasers. If +no advantageous offer be made, the development should continue and the +plant should be dedicated primarily to the production of materials for the +fertilization of the soil. +</p> + +<p> +RAILWAYS +</p> + +<p> +The railways during the past year have made still further progress in +recuperation from the war, with large rains in efficiency and ability +expeditiously to handle the traffic of the country. We have now passed +through several periods of peak traffic without the car shortages which so +frequently in the past have brought havoc to our agriculture and +industries. The condition of many of our great freight terminals is still +one of difficulty and results in imposing, large costs on the public for +inward-bound freight, and on the railways for outward-bound freight. Owing +to the growth of our large cities and the great increase in the volume of +traffic, particularly in perishables, the problem is not only difficult of +solution, but in some cases not wholly solvable by railway action alone. +</p> + +<p> +In my message last year I emphasized the necessity for further legislation +with a view to expediting the consolidation of our rail ways into larger +systems. The principle of Government control of rates and profits, now +thoroughly imbedded in our governmental attitude toward natural monopolies +such as the railways, at once eliminates the need of competition by small +units as a method of rate adjustment. Competition must be preserved as a +stimulus to service, but this will exist and can be increased tinder +enlarged systems. Consequently the consolidation of the railways into +larger units for the purpose of securing the substantial values to the +public which will come from larger operation has been the logical +conclusion of Congress in its previous enactments, and is also supported by +the best opinion in the country. Such consolidation will assure not only a +greater element of competition as to service, but it will afford economy in +operation, greater stability in railway earnings, and more economical +financing. It opens large possibilities of better equalization of rates +between different classes of traffic so as to relieve undue burdens upon +agricultural products and raw materials generally, which are now not +possible without ruin to small units owing to the lack of diversity of +traffic. It would also tend to equalize earnings in such fashion as to +reduce the importance of section 15A, at which criticism, often misapplied, +has been directed. A smaller number of units would offer less difficulties +in labor adjustments and would contribute much to the, solution of terminal +difficulties. +</p> + +<p> +The consolidations need to be carried out with due regard to public +interest and to the rights and established life of various communities in +our country. It does not seem to me necessary that we endeavor to +anticipate any final plan or adhere to an artificial and unchangeable +project which shall stipulate a fixed number of systems, but rather we +ought to approach the problem with such a latitude of action that it can be +worked out step by step in accordance with a comprehensive consideration of +public interest. Whether the number of ultimate systems shall be more or +less seems to me can only be determined by time and actual experience in +the development of such consolidations. +</p> + +<p> +Those portions of the present law contemplating consolidations ore not, +sufficiently effective in producing expeditious action and need +amplification of the authority of the Interstate Commerce Commission, +particularly in affording a period for voluntary proposals to the +commission and in supplying Government pressure to secure action after the +expiration of such a period. +</p> + +<p> +There are other proposals before Congress for amending the transportation +acts. One of these contemplates a revision of the method of valuation for +rate-making purposes to be followed by a renewed valuation of the railways. +The valuations instituted by the Interstate Commerce Commission 10 years +ago have not yet been completed. They have cost the Government an enormous +sum, and they have imposed great expenditure upon the railways, most of +which has in effect come out of the public in increased rates. This work +should not be abandoned or supplanted until its results are known and can +be considered. +</p> + +<p> +Another matter before the Congress is legislation affecting the labor +sections of the transportation act. Much criticism has been directed at the +workings of this section and experience has shown that some useful +amendment could be made to these provisions. +</p> + +<p> +It would be helpful if a plan could be adopted which, while retaining the +practice of systematic collective bargaining with conciliation voluntary +arbitration of labor differences, could also provide simplicity in +relations and more direct local responsibility of employees and managers. +But such legislation will not meet the requirements of the situation unless +it recognizes the principle that t e public has a right to the +uninterrupted service of transportation, and therefore a right to be heard +when there is danger that the Nation may suffer great injury through the +interruption of operations because of labor disputes. If these elements are +not comprehended in proposed legislation, it would be better to gain +further experience with the present organization for dealing with these +questions before undertaking a change. +</p> + +<p> +SHIPPING BOARD +</p> + +<p> +The form of the organization of the Shipping Board was based originally on +its functions as a semi judicial body in regulation of rates. During the +war it was loaded with enormous administrative duties. It has been +demonstrated time and again that this form of organization results in +indecision, division of opinion and administrative functions, which make a +wholly inadequate foundation for the conduct of a great business +enterprise. The first principle in securing the objective set out by +Congress in building up the American merchant marine upon the great trade +routes and subsequently disposing of it into private operation can not +proceed with effectiveness until the entire functions of the board are +reorganized. The immediate requirement is to transfer into the Emergency +Fleet, Corporation the whole responsibility of operation of the fleet and +other property, leaving to the Shipping Board solely the duty of +determining certain major policies which require deliberative action. +</p> + +<p> +The procedure under section 28 of the merchant marine act has created great +difficulty and threatened friction during the past 12 months. Its attempted +application developed not only great opposition from exporters, +particularly as to burdens that may be imposed upon agricultural products, +but also great anxiety in the different seaports as to the effect upon +their relative rate structures. This trouble will certainly recur if action +is attempted under this section. It is uncertain in some of its terms and +of great difficulty in interpretation. +</p> + +<p> +It is my belief that action under this section should be suspended until +the Congress can reconsider the entire question in the light of the +experience that has been developed since its enactment. +</p> + +<p> +NATIONAL ELECTIONS +</p> + +<p> +Nothing is so fundamental to the integrity of a republican form of +government as honesty in all that relates to the conduct of elections. I am +of the opinion that the national laws governing the choice of members of +the Congress should be extended to include appropriate representation of +the respective parties at the ballot box ant equality of representation on +the various registration boards, wherever they exist. +</p> + +<p> +THE JUDICIARY +</p> + +<p> +The docket of the Supreme Court is becoming congested. At the opening term +last year it had 592 cases, while this year it had 687 cases. Justice long +delayed is justice refused. Unless the court be given power by preliminary +and summary consideration to determine the importance of cases, and by +disposing of those which are not of public moment reserve its time for the +more extended consideration of the remainder, the congestion of the docket +is likely to increase. It is also desirable that Supreme Court should have +power to improve and reform procedure in suits at law in the Federal courts +through the adoption of appropriate rules. The Judiciary Committee of the +Senate has reported favorably upon two bills providing for these reforms +which should have the immediate favorable consideration of the Congress. +</p> + +<p> +I further recommend that provision be made for the appointment of a +commission, to consist of two or three members of the Federal judiciary and +as many members of the bar, to examine the present criminal code of +procedure and recommend to the Congress measures which may reform and +expedite court procedure in the administration and enforcement of our +criminal laws. +</p> + +<p> +PRISON REFORM +</p> + +<p> +Pending before the Congress is a bill which has already passed one House +providing for a reformatory to which could be committed first offenders and +young men for the purpose of segregating them from contact with banned +criminals and providing them with special training in order to reestablish +in them the power to pursue a law-abiding existence in the social and +economic life of the Nation. This is a matter of so much importance as to +warrant the early attention of the present session. Further provision +should also be made, for a like reason, for a separate reformatory for +women. +</p> + +<p> +NATIONAL POLICE BUREAU +</p> + +<p> +Representatives of the International Police Conference will bring to t e +attention of the Congress a proposal for the establishment of a national +police bureau. Such action would provide a central point for gathering, +compiling, and later distributing to local police authorities much +information which would be helpful in the prevention and detection of +crime. I believe this bureau is needed, and I recommend favorable +consideration of this proposal. +</p> + +<p> +DISTRICT OF COLUMBIA WELFARE +</p> + +<p> +The welfare work of the District of Columbia is administered by several +different boards dealing with charities and various correctional efforts. +It would be an improvement if this work were consolidated and placed under +the direction of a single commission. +</p> + +<p> +FRENCH SPOLIATION CLAIMS +</p> + +<p> +During the last session of the Congress legislation was introduced looking +to the payment of the remaining claims generally referred to as the French +spoliation claims. The Congress has provided for the payment of many +similar claims. Those that remain unpaid have been long pending. The +beneficiaries thereunder have every reason to expect payment. These claims +have been examined by the Court of Claims and their validity and amount +determined. The United States ought to pay its debts. I recommend action by +the Congress which will permit of the payment of these remaining claims. +</p> + +<p> +THE WAGE EARNER +</p> + +<p> +Two very important policies have been adopted by this country which, while +extending their benefits also in other directions, have been of the utmost +importance to the wage earners. One of these is the protective tariff, +which enables our people to live according to a better standard and receive +a better rate of compensation than any people, any time, anywhere on earth, +ever enjoyed. This saves the American market for the products of the +American workmen. The other is a policy of more recent origin and seeks to +shield our wage earners from the disastrous competition of a great influx +of foreign peoples. This has been done by the restrictive immigration law. +This saves the American job for the American workmen. I should like to see +the administrative features of this law rendered a little more humane for +the purpose of permitting those already here a greater latitude in securing +admission of members of their own families. But I believe this law in +principle is necessary and sound, and destined to increase greatly the +public welfare. We must maintain our own economic position, we must defend +our own national integrity. +</p> + +<p> +It is gratifying to report that the progress of industry, the enormous +increase in individual productivity through labor-saving devices, and the +high rate of wages have all combined to furnish our people in general with +such an abundance not only of the necessaries but of the conveniences of +life that we are by a natural evolution solving our problems of economic +and social justice. +</p> + +<p> +THE NEGRO +</p> + +<p> +These developments have brought about a very remarkable improvement in the +condition of the negro race. Gradually, but surely, with the almost +universal sympathy of those among whom they live, the colored people are +working out their own destiny. I firmly believe that it is better for all +concerned that they should be cheerfully accorded their full constitutional +rights, that they should be protected from all of those impositions to +which, from their position, they naturally fall a prey, especially from the +crime of lynching and that they should receive every encouragement to +become full partakers in all the blessings of our common American +citizenship. +</p> + +<p> +CIVIL SERVICE +</p> + +<p> +The merit system has long been recognized as the correct basis for +employment in our, civil service. I believe that first second, and third +class postmasters, and without covering in the present membership the +field force of prohibition enforcement, should be brought within the +classified service by statute law. Otherwise the Executive order of one +administration is changed by the Executive order of another administration, +and little real progress is made. Whatever its defects, the merit system is +certainly to be preferred to the spoils system. +</p> + +<p> +DEPARTMENTAL REORGANIZATION +</p> + +<p> +One way to save public money would be to pass the pending bill for the +reorganization of the various departments. This project has been pending +for some time, and has had the most careful consideration of experts and +the thorough study of a special congressional committee. This legislation +is vital as a companion piece to the Budget law. Legal authority for a +thorough reorganization of the Federal structure with some latitude of +action to the Executive in the rearrangement of secondary functions would +make for continuing economy in the shift of government activities which +must follow every change in a developing country. Beyond this many of the +independent agencies of the Government must be placed under responsible +Cabinet officials, if we are to have safeguards of efficiency, economy, and +probity. +</p> + +<p> +ARMY AND NAVY +</p> + +<p> +Little has developed in relation to our national defense which needs +special attention. Progress is constantly being made in air navigation and +requires encouragement and development. Army aviators have made a +successful trip around the world, for which I recommend suitable +recognition through provisions for promotion, compensation, and retirement. +Under the direction of the Navy a new Zeppelin has been successfully +brought from Europe across the Atlantic to our own country. +</p> + +<p> +Due to the efficient supervision of the Secretary of War the Army of the +United States has been organized with a small body of Regulars and a +moderate National Guard and Reserve. The defense test of September 12 +demonstrated the efficiency of the operating plans. These methods and +operations are well worthy of congressional support. +</p> + +<p> +Under the limitation of armaments treaty a large saving in outlay and a +considerable decrease in maintenance of the Navy has been accomplished. We +should maintain the policy of constantly working toward the full treaty +strength of the Navy. Careful investigation is being made in this +department of the relative importance of aircraft, surface and submarine +vessels, in order that we may not fail to take advantage of all modern +improvements for our national defense. A special commission also is +investigating the problem of petroleum oil for the Navy, considering the +best policy to insure the future supply of fuel oil and prevent the +threatened drainage of naval oil reserves. Legislative action is required +to carry on experiments in oil shale reduction, as large deposits of this +type have been set aside for the use of the Navy. +</p> + +<p> +We have been constantly besought to engage in competitive armaments. +Frequent reports will reach us of the magnitude of the military equipment +of other, nations. We shall do well to be little impressed by such reports +or such actions. Any nation undertaking to maintain a military +establishment with aggressive and imperialistic designs will find itself +severely handicapped in the economic development of the world. I believe +thoroughly in the Army and Navy, in adequate defense and preparation. But I +am opposed to any policy of competition in building and maintaining land or +sea armaments. +</p> + +<p> +Our country has definitely relinquished the old standard of dealing with +other countries by terror and force, and is definitely committed to the new +standard of dealing with them through friendship and understanding. This +new policy should be constantly kept in mind by the guiding forces of the +Army and Navy, by the. Congress and by the country at large. I believe it +holds a promise of great benefit to humanity. I shall resist any attempt to +resort to the old methods and the old standards. I am especially solicitous +that foreign nations should comprehend the candor and sincerity with which +we have adopted this position. While we propose to maintain defensive and +supplementary police forces by land and sea, and to train them through +inspections and maneuvers upon appropriate occasions in order to maintain +their efficiency, I wish every other nation to understand that this does +not express any unfriendliness or convey any hostile intent. I want the +armed forces of America to be considered by all peoples not as enemies but +as friends as the contribution which is made by this country for the +maintenance of the peace and security of the world. +</p> + +<p> +VETERANS +</p> + +<p> +With the authorization for general hospitalization of the veterans of all +wars provided during the present year, the care and treatment of those who +have served their country in time of peril and the attitude of the +Government toward them is not now so much one of needed legislation as one +of careful, generous and humane administration. It will ever be recognized +that their welfare is of the first concern and always entitled to the most +solicitous consideration oil the part of their fellow citizens. They are +organized in various associations, of which the chief and most +representative is the American Legion. Through its officers the Legion will +present to the Congress numerous suggestions for legislation. They cover +such a wide variety of subjects that it is impossible to discuss them +within the scope of this message. With many of the proposals I join in +hearty approval and commend them all to the sympathetic investigation and +consideration of the Congress. +</p> + +<p> +FOREIGN RELATIONS +</p> + +<p> +At no period in the past 12 years have our foreign relations been in such a +satisfactory condition as they are at the present time. Our actions in the +recent months have greatly strengthened the American policy of permanent +peace with independence. The attitude which our Government took and +maintained toward an adjustment of European reparations, by pointing out +that it wits not a political but a business problem, has demonstrated its +wisdom by its actual results. We desire to see Europe restored that it may +resume its productivity in the increase of industry and its support in the +advance of civilization. We look with great gratification at the hopeful +prospect of recuperation in Europe through the Dawes plan. Such assistance +as can be given through the action of the public authorities and of our +private citizens, through friendly counsel and cooperation, and through +economic and financial support, not for any warlike effort but for +reproductive enterprise, not to provide means for unsound government +financing but to establish sound business administration should be +unhesitatingly provided. +</p> + +<p> +Ultimately nations, like individuals, can not depend upon each other but +must depend upon themselves. Each one must work out its own salvation. We +have every desire to help. But with all our resources we are powerless to +save unless our efforts meet with a constructive response. The situation in +our own country and all over the world is one Chat can be improved only by +bard work and self-denial. It is necessary to reduce expenditures, increase +savings and liquidate debts. It is in this direction that there lies the +greatest hope of domestic tranquility and international peace. Our own +country ought to finish the leading example in this effort. Our past +adherence to this policy, our constant refusal to maintain a military +establishment that could be thought to menace the security of others, our +honorable dealings with other nations whether great or small, has left us +in the almost constant enjoyment of peace. +</p> + +<p> +It is not necessary to stress the general desire of all the people of this +country for the promotion of peace. It is the leading principle of all our +foreign relations. We have on every occasion tried to cooperate to this end +in all ways that were consistent with our proper independence and our +traditional policies. It will be my constant effort to maintain these +principles, and to reinforce them by all appropriate agreements and +treaties. While we desire always to cooperate and to help, we are equally +determined to be independent and free. Right and truth and justice and +humanitarian efforts will have the moral support of this country all over +the world. But we do not wish to become involved in the political +controversies of others. Nor is the country disposed to become a member of +the League of Nations or to assume the obligations imposed by its +covenant. +</p> + +<p> +INTERNATIONAL COURT +</p> + +<p> +America has been one of the foremost nations in advocating tribunals for +the settlement of international disputes of a justiciable character. Our +representatives took a leading in those conferences which resulted in the +establishment of e ague Tribunal, and later in providing for a Permanent +Court of International Justice. I believe it would be for the advantage of +this country and helpful to the stability of other nations for us to adhere +to the protocol establishing, that court upon the conditions stated in the +recommendation which is now before the Senate, and further that our country +shall not be bound by advisory opinions which may be, rendered by the court +upon questions which we have not voluntarily submitted for its judgment. +This court would provide a practical and convenient tribunal before which +we could go voluntarily, but to which we could not be summoned, for a +determination of justiciable questions when they fail to be resolved by +diplomatic negotiations. +</p> + +<p> +DISARMAMENT CONFERENCE +</p> + +<p> +Many times I have expressed my desire to see the work of the Washington +Conference on Limitation of Armaments appropriately supplemented by further +agreements for a further reduction M for the purpose of diminishing the +menace and waste of the competition in preparing instruments of +international war. It has been and is my expectation that we might +hopefully approach other great powers for further conference on this +subject as soon as the carrying out of the present reparation plan as the +established and settled policy of Europe has created a favorable +opportunity. But on account of proposals which have already been made by +other governments for a European conference, it will be necessary to wait +to see what the outcome of their actions may be. I should not wish to +propose or have representatives attend a conference which would contemplate +commitments opposed to the freedom of action we desire to maintain +unimpaired with respect to our purely domestic policies. +</p> + +<p> +INTERNATIONAL LAW +</p> + +<p> +Our country should also support efforts which are being made toward the +codification of international law. We can look more hopefully, in the first +instance, for research and studies that are likely to be productive of +results, to a cooperation among representatives of the bar and members of +international law institutes and societies, than to a conference of those +who are technically representative of their respective governments, +although, when projects have been developed, they must go to the +governments for their approval. These expert professional studies are going +on in certain quarters and should have our constant encouragement and +approval. +</p> + +<p> +OUTLAW OF WAR +</p> + +<p> +Much interest has of late been manifested in this country in the discussion +of various proposals to outlaw aggressive war. I look with great sympathy +upon the examination of this subject. It is in harmony with the traditional +policy of our country, which is against aggressive war and for the +maintenance of permanent and honorable peace. While, as I have said, we +must safeguard our liberty to deal according to our own judgment with our +domestic policies, we can not fail to view with sympathetic interest all +progress to this desired end or carefully to study the measures that may be +proposed to attain it. +</p> + +<p> +LATIN AMERICA +</p> + +<p> +While we are desirous of promoting peace in every quarter of the globe, we +have a special interest in the peace of this hemisphere. It is our constant +desire that all causes of dispute in this area may be tranquilly and +satisfactorily adjusted. Along with our desire for peace is the earnest +hope for the increased prosperity of our sister republics of Latin America, +and our constant purpose to promote cooperation with them which may be +mutually beneficial and always inspired by the most cordial friendships. +</p> + +<p> +FOREIGN DEBTS +</p> + +<p> +About $12,000,000,000 is due to our Government from abroad, mostly from +European Governments. Great Britain, Finland, Hungary, Lithuania and Poland +have negotiated settlements amounting close to $5,000,000,000. This +represents the funding of over 42 per cent of the debt since the creation +of the special Foreign Debt Commission. As the life of this commission is +about to expire, its term should be extended. I am opposed to the +cancellation of these debts and believe it for the best welfare of the +world that they should be liquidated and paid as fast as possible. I do not +favor oppressive measures, but unless money that is borrowed is repaid +credit can not be secured in time of necessity, and there exists besides a +moral obligation which our country can not ignore and no other country can +evade. Terms and conditions may have to conform to differences in the +financial abilities of the countries concerned, but the principle that each +country should meet its obligation admits of no differences and is of +universal application. +</p> + +<p> +It is axiomatic that our country can not stand still. It would seem to be +perfectly plain from recent events that it is determined to go forward. But +it wants no pretenses, it wants no vagaries. It is determined to advance in +an orderly, sound and common-sense way. It does not propose to abandon the +theory of the Declaration that the people have inalienable rights which no +majority and no power of government can destroy. It does not propose to +abandon the practice of the Constitution that provides for the protection +of these rights. It believes that within these limitations, which are +imposed not by the fiat of man but by the law of the Creator, +self-government is just and wise. It is convinced that it will be +impossible for the people to provide their own government unless they +continue to own their own property. +</p> + +<p> +These are the very foundations of America. On them has been erected a +Government of freedom and equality, of justice and mercy, of education and +charity. Living under it and supporting it the people have come into great +possessions on the material and spiritual sides of life. I want to continue +in this direction. I know that the Congress shares with me that desire. I +want our institutions to be more and more expressive of these principles. I +want the people of all the earth to see in the American flag the symbol of +a Government which intends no oppression at home and no aggression abroad, +which in the spirit of a common brotherhood provides assistance in time of +distress. +</p> + +<p><br /><br /><br /></p> + +<p class="t3"> +*** +</p> + +<p><a id="dec1925"></a></p> + +<p class="noindent"> +State of the Union Address<br /> +Calvin Coolidge<br /> +December 8, 1925<br /> +</p> + +<p class="noindent"> +Members of the Congress: +</p> + +<p> +In meeting the constitutional requirement of informing the Congress upon +the state of the Union, it is exceedingly gratifying to report that the +general condition is one of progress and prosperity. Here and there are +comparatively small and apparently temporary difficulties needing +adjustment and improved administrative methods, such as are always to be +expected, but in the fundamentals of government and business the results +demonstrate that we are going in the right direction. The country does not +appear to require radical departures from the policies already adopted so +much as it needs a further extension of these policies and the improvement +of details. The age of perfection is still in the somewhat distant future, +but it is more in danger of being retarded by mistaken Government activity +than it is from lack of legislation. We are by far the most likely to +accomplish permanent good if we proceed with moderation. +</p> + +<p> +In our country the people are sovereign and independent, and must accept +the resulting responsibilities. It is their duty to support themselves and +support the Government. That is the business of the Nation, whatever the +charity of the Nation may require. The functions which the Congress are to +discharge are not those of local government but of National Government. The +greatest solicitude should be exercised to prevent any encroachment upon +the rights of the States or their various political subdivisions. Local +self-government is one of our most precious possessions. It is the greatest +contributing factor to the stability strength liberty, and progress of the +Nation. It ought not to be in ringed by assault or undermined by purchase. +It ought not to abdicate its power through weakness or resign its authority +through favor. It does not at all follow that because abuses exist it is +the concern of the Federal Government to attempt the r reform. +</p> + +<p> +Society is in much more danger from encumbering the National Government +beyond its wisdom to comprehend, or its ability to administer, than from +leaving the local communities to bear their own burdens and remedy their +own evils. Our local habit and custom is so strong, our variety of race and +creed is so great the Federal authority is so tenuous, that the area within +which it can function successfully is very limited. The wiser policy is to +leave the localities, so far as we can, possessed of their own sources of +revenue and charged with their own obligations. +</p> + +<p> +GOVERNMENT ECONOMY +</p> + +<p> +It is a fundamental principle of our country that the people are sovereign. +While they recognize the undeniable authority of the state, they have +established as its instrument a Government of limited powers. They hold +inviolate in their own hands the jurisdiction over their own freedom and +the ownership of their own property. Neither of these can be impaired +except by due process of law. The wealth of our country is not public +wealth, but private wealth. It does not belong to the Government, it +belongs to the people. The Government has no justification in taking +private Property except for a public purpose. It is always necessary to +keep these principles in mind in the laying of taxes and in the making of +appropriations. No right exists to levy on a dollar, or to order the +expenditure of a dollar, of the money of the people, except for a necessary +public purpose duly authorized by the Constitution. The power over the +purse is the power over liberty. +</p> + +<p> +That is the legal limitation within which the Congress can act, How it +will, proceed within this limitation is always a question of policy. When +the country is prosperous and free from debt, when the rate of taxation is +low, opportunity exists for assuming new burdens and undertaking new +enterprises. Such a condition now prevails only to a limited extent. All +proposals for assuming new obligations ought to be postponed, unless they +are reproductive capital investments or are such as are absolutely +necessary at this time. We still have an enormous debt of over +$20,000,000,000, on which the interest and sinking-fund requirements are +$1,320,000,000. Our appropriations for the Pension Office and the Veterans' +Bureau are $600,000,000. The War and Navy Departments call for +$642,000,000. Other requirements, exclusive of the Post Office which is +virtually self-sustaining, brought the appropriations for the current year +up to almost $3,100,060,000. This shows an expenditure of close to $30 for +every inhabitant of our country. For the average family of five it means a +tax, directly or indirectly paid, of about $150 for national purposes +alone. The local tax adds much more. These enormous expenditures ought not +to be increased, but through every possible effort they ought to be +reduced. +</p> + +<p> +Only one of these great items can be ultimately extinguished. That is the +item of our war debt. Already this has been reduced to about +$6,000,000,000, which means an annual saving in interest of close to +$250,000,000. The present interest charge is about $820,000,000 yearly. It +would seem to be obvious that the sooner this debt can be retired the more +the taxpayers will save in interest and the easier it will be to secure +funds with which to prosecute needed running expenses, constructions, and +improvements. This item of $820,000,000 for interest is a heavy charge on +all the people of the country, and it seems to me that we might well +consider whether it is not greatly worth while to dispense with it as early +as possible by retiring the principal debt which it is required to serve. +</p> + +<p> +It has always been our policy to retire our debts. That of the +Revolutionary War period, notwithstanding the additions made in 1812, was +paid by 1835. and the Civil War debt within 23 years. Of the amount already +paid, over $1,000,000,000 is a reduction in cash balances. That source is +exhausted. Over one and two-thirds billions of dollars was derived from +excess receipts. Tax reduction eliminates that. The sale of surplus war +materials has been another element of our income. That is practically +finished. With these eliminated, the reduction of the debt has been only +about $500,000,000 each year, not an excessive sum on so large a debt. +</p> + +<p> +Proposals have been made to extend the payment over a period of 62 years. +If $1,000,000,000 is paid at the end of 20 years, the cost to the taxpayers +is the principal and, if the interest is 4% per cent, a total of +$1,850,000,000. If the same sum is paid at the end of 62 years, the cost is +$3,635,000,000, or almost double. Here is another consideration: Compared +with its purchasing power in 1913, the dollar we borrowed represented but +52 cents. As the value of our dollar increases, due to the falling prices +of commodities, the burden of our debt increases. It has now risen to 631/2 +cents. The taxpayer will be required to produce nearly twice the amount of +commodities to pay his debt if the dollar returns to the 1913 value. The +more we pay while prices are high, the easier it will be. +</p> + +<p> +Deflation of government after a war period is slower than deflation of +business, where curtailment is either prompt and effective or disaster +follows. There is room for further economy in the cost of the Federal +Government, but a co n of current expenditures with pre-war expenditures is +not able to the efficiency with which Government business is now being +done. The expenditures of 19161 the last pre-war year, were $742,000,000, +and in 1925 over $3,500,000,000, or nearly five times as great. If we +subtract expenditures for debt retirements and interest, veterans' relief, +increase of pensions, and other special outlays, consisting of refunds, +trust investments, and like charges, we find that the general expenditures +of the Government in 1925 were slightly more than twice as large as in +1916. +</p> + +<p> +As prices in 1925 were approximately 40 per cent higher than in 1916, the +cost of the same Government must also have increased. But the Government is +not the same. It is more expensive to collect the much greater revenue +necessary and to administer our great debt. We have given enlarged and +improved services to agriculture and commerce. Above all, America has grown +in population and wealth. Government expenditures must always share in +this growth. Taking into account the factors I have mentioned, I believe +that present Federal expenses are not far out of line with pre-war +expenses. We have nearly accomplished the deflation. +</p> + +<p> +This does not mean that further economies will not come. As we reduce our +debt our interest charges decline. There are many details yet to correct. +The real improvement, however, must come not from additional curtailment of +expenses, but by a more intelligent, more ordered spending. Our economy +must be constructive. While we should avoid as far as possible increases in +permanent current expenditures, oftentimes a capital outlay like internal +improvements will result in actual constructive saving. That is economy in +its best sense. It is an avoidance of waste that there may be the means for +an outlay to-day which will bring larger returns to-morrow. We should +constantly engage in scientific studies of our future requirements and +adopt an orderly program for their service. Economy is the method by which +we prepare to-day to afford the improvements of to-morrow. +</p> + +<p> +A mere policy of economy without any instrumentalities for putting it into +operation would be very ineffective. The Congress has wisely set up the +Bureau of the Budget to investigate and inform the President what +recommendations he ought to make for current appropriations. This gives a +centralized authority where a general and comprehensive understanding can +be reached of the sources of income and the most equitable distribution of +expenditures. How well it has worked is indicated by the fact that the +departmental estimates for 1922, before the budget law, were $4,068,000,000 +while the Budget estimates for 1927 are $3,156,000,000. This latter figure +shows the reductions in departmental estimates for the coming year made +possible by the operation of the Budget system that the Congress has +provided. +</p> + +<p> +But it is evidently not enough to have care in making appropriations +without any restraint upon expenditure. The Congress has provided that +check by establishing the office of Comptroller General. +</p> + +<p> +The purpose of maintaining the Budget Director and the Comptroller General +is to secure economy and efficiency in Government expenditure. No better +method has been devised for the accomplishment of that end. These offices +can not be administered in all the various details without making some +errors both of fact and of judgment. But the important consideration +remains that these are the instrumentalities of the Congress and that no +other plan has ever been adopted which was so successful in promoting +economy and efficiency. The Congress has absolute authority over the +appropriations and is free to exercise its judgment, as the evidence may +warrant, in increasing or decreasing budget recommendations. But it ought +to resist every effort to weaken or break down this most beneficial system +of supervising appropriations and expenditures. Without it all the claim of +economy would be a mere pretense. +</p> + +<p> +TAXATION +</p> + +<p> +The purpose of reducing expenditures is to secure a reduction in taxes. +That purpose is about to be realized. With commendable promptness the Ways +and Means Committee of the House has undertaken in advance of the meeting +of the Congress to frame a revenue act. As the bill has proceeded through +the committee it has taken on a nonpartisan character, and both Republicans +and Democrats have joined in a measure which embodies many sound principles +of tax reform. The bill will correct substantially the economic defects +injected into the revenue act of 1924, as well as many which have remained +as war-time legacies. In its present form it should provide sufficient +revenue for the Government. +</p> + +<p> +The excessive surtaxes have been reduced, estate tax rates are restored to +more reasonable figures, with every prospect of withdrawing from the field +when the States have had the opportunity to correct the abuses in their own +inheritance tax laws, the gift tax and publicity section are to be repealed +many miscellaneous taxes are lowered or abandoned, and the Board of Tax +Appeals and the administrative features of the law are improved and +strengthened. I approve of the bill in principle. In so far as income-tax +exemptions are concerned, it seems, to me the committee has gone as far as +it is Safe to go and somewhat further than I should have gone. Any further +extension along these lines would, in my opinion, impair the integrity of +our income-tax system. +</p> + +<p> +I am advised that the bill will be through the House by Christmas. For +this prompt action the country call thank the good sense of the Ways and +Means Committee in framing an economic measure upon economic +considerations. If this attitude continues to be reflected through the +Congress, the taxpayer will have his relief by the time his March 15th +installment of income taxes is due. Nonpartisan effort means certain, quick +action. Determination of a revenue law definitely, promptly and solely as a +revenue law, is one of the greatest gifts a legislature can bestow upon its +constituents. I commend the example of file Ways and Means Committee. If +followed, it will place sound legislation upon the books in time to give +the taxpayers the full benefit of tax reduction next year. This means that +the bill should reach me prior to March 15. +</p> + +<p> +All these economic results are being sought not to benefit the rich, but to +benefit the people. They are for the purpose of encouraging industry in +order that employment may be plentiful. They seek to make business good in +order that wages may be good. They encourage prosperity in order that +poverty may be banished from the home. They, seek to lay the foundation +which, through increased production, may, give the people a more bountiful +supply of the necessaries of life, afford more leisure for the improvement +of the mind, the appreciation of the arts of music and literature, +sculpture and painting, and the beneficial enjoyment of outdoor sports and +recreation, enlarge the resources which minister to charity and by all +these means attempting to strengthen the spiritual life of the Nation. +</p> + +<p> +FOREIGN RELATIONS +</p> + +<p> +The policy of our foreign relations, casting aside any suggestion of force, +rests solely on the foundation of peace, good will, and good works. We have +sought, in our intercourse with other nations, better understandings +through conference and exchange of views its befits beings endowed with +reason. The results have been the gradual elimination of disputes, the +settlement of controversies, and the establishment of a firmer friendship +between America and the rest of the world that has ever existed tit any +previous time. +</p> + +<p> +The example of this attitude has not been without its influence upon other +countries. Acting upon it, an adjustment was made of the difficult problem +of reparations. This was the second step toward peace in Europe. It paved +the way for the agreements which were drawn up at the Locarno Conference. +When ratified, these will represent the third step toward peace. While they +do not of themselves provide an economic rehabilitation, which is necessary +for the progress of Europe, by strengthening the guarantees of peace they +diminish the need for great armaments. If the energy which now goes into +military effort is transferred to productive endeavor it will greatly +assist economic progress. +</p> + +<p> +The Locarno agreements were made by the, European countries directly +interested without any formal intervention of America, although on July 3 +I publicly advocated such agreements in an address made in Massachusetts. +We have consistently refrained from intervening except when our help has +been sought and we have felt it could be effectively given, as in the +settlement of reparations and the London Conference. These recent Locarno +agreements represent the success of this policy which we have been +insisting ought to be adopted, of having European countries settle their +own political problems without involving this country. This beginning seems +to demonstrate that this policy is sound. It is exceedingly gratifying to +observe this progress, both in its method and in its result promises so +much that is beneficial to the world. +</p> + +<p> +When these agreements are finally adopted, they will provide guarantees of +peace that make the present prime reliance upon force in some parts of +Europe very much less necessary. The natural corollary to these treaties +should be further international contracts for the limitation of armaments. +This work was successfully begun at the Washington Conference. Nothing was +done at that time concerning land forces because of European objection. Our +standing army has been reduced to around 118,000, about the necessary +police force for 115,000,000 people. We are not proposing to increase it, +nor is it supposable that any foreign country looks with the slightest +misapprehension upon our land forces. They do not menace anybody. They are +rather a protection to everybody. +</p> + +<p> +The question of disarming upon land is so peculiarly European in its +practical aspects that our country would look with particular gratitude +upon any action which those countries might take to reduce their own +military forces. This is in accordance with our policy of not intervening +unless the European powers are unable to agree and make request for our +assistance. Whenever they are able to agree of their own accord it is +especially gratifying to its, and such agreements may be sure of our +sympathetic support. +</p> + +<p> +It seems clear that it is the reduction of armies rather than of navies +that is of the first importance to the world at the present time. We shall +look with great satisfaction upon that effort and give it our approbation +and encouragement. If that can be settled, we may more easily consider +further reduction and limitation of naval armaments. For that purpose our +country has constantly through its Executive, and through repeated acts of +Congress, indicated its willingness to call such a conference. Under +congressional sanction it would seem to be wise to participate in any +conference of the great powers for naval limitation of armament proposed +upon such conditions that it would hold a fair promise of being effective. +The general policy of our country is for disarmament, and it ought not to +hesitate to adopt any practical plan that might reasonably be expected to +succeed. But it would not care to attend a conference which from its +location or constituency would in all probability prove futile. +</p> + +<p> +In the further pursuit, of strengthening the bonds of peace and good will +we have joined with other nations in an international conference held at +Geneva and signed an agreement which will be laid before the Senate for +ratification providing suitable measures for control and for publicity in +international trade in arms, ammunition, and implements of war, and also +executed a protocol providing for a prohibition of the use of poison gas in +war, in accordance with the principles of Article 5 of the treaty relating +thereto signed at the Washington Conference. We are supporting the Pan +American efforts that are being made toward the codification of +international law, and looking with sympathy oil the investigations +conducted under philanthropic auspices of the proposal to agreements +outlawing war. In accordance with promises made at the Washington +Conference, we have urged the calling of and are now represented at the +Chinese Customs Conference and on the Commission on Extraterritoriality, +where it will be our policy so far as possible to meet the, aspirations of +China in all ways consistent with the interests of the countries involved. +</p> + +<p> +COURT OF INTERNATIONAL JUSTICE +</p> + +<p> +Pending before the Senate for nearly three years is the proposal to adhere +to the protocol establishing the Permanent Court of International Justice. +A well-established line of precedents mark America's effort to effect the +establishment of it court of this nature.. We took a leading part in laying +the foundation on which it rests in the establishment of The Hague Court of +Arbitration. It is that tribunal which nominates the judges who are elected +by the Council and Assembly of the League of Nations. +</p> + +<p> +The proposal submitted to the Senate was made dependent upon four +conditions, the first of which is that by supporting the court we do not +assume any obligations under the league; second, that we may participate +upon an equality with other States in the election of judges; third, that +the Congress shall determine what part of the expenses we shall bear; +fourth, that the statute creating the court shall not be amended without +out consent; and to these I have proposed an additional condition to the +effect that we are not to be bound by advisory opinions rendered without +our consent. +</p> + +<p> +The court appears to be independent of the league. It is true the judges +are elected by the Assembly and Council, but they are nominated by the +Court of Arbitration, which we assisted to create and of which we are a +part. The court was created by it statute, so-called, which is really a +treaty made among some forty-eight different countries, that might properly +be called a constitution of the court. This statute provides a method by +which the judges are chosen so that when the Court of Arbitration +nominates them and the Assembly and Council of the League elect them, they +are not acting as instruments of the Court of Arbitration or instruments of +the league, but as instruments of the statute. +</p> + +<p> +This will be even more apparent if our representatives sit with the members +of the council and assembly in electing the judges. It is true they are +paid through the league though not by the league, but by the countries +which are members of the league and by our country if we accept the +protocol. The judges are paid by the league only in the same sense that it +could be said United States judges are paid by the Congress. The court +derives all its authority from the statute and is so completely independent +of the league that it could go on functioning if the league were disbanded, +at least until the terms of the judges expired. +</p> + +<p> +The most careful provisions are made in the statute as to the +qualifications of judges. Those who make the nominations are recommended to +consult with their highest court of justice, their law schools and +academies. The judges must be persons of high moral character, qualified to +hold the highest judicial offices in that country, or be jurisconsults of +recognized competence in international law. It must be assumed that these +requirements will continue to be carefully met, and with America joining +the countries already concerned it is difficult to comprehend how human +ingenuity could better provide for the establishment of a court which would +maintain its independence. It has to be recognized that independence is to +a considerable extent a matter of ability, character, and personality. Some +effort was made in the early beginnings to interfere with the independence +of our Supreme Court. It did not succeed because of the quality of the men +who made up that tribunal. +</p> + +<p> +It does not seem that the authority to give advisory opinions interferes +with the independence of the court. Advisory opinions in and of themselves +are not harmful, but may be used in such a way as to be very beneficial +because they undertake to prevent injury rather than merely afford a remedy +after the injury has been done. As a principle that only implies that the +court shall function when proper application is made to it. Deciding the +question involved upon issues submitted for an advisory opinion does not +differ materially from deciding the question involved upon issues submitted +by contending parties. Up to the present time the court has given an +advisory opinion when it judged it had jurisdiction, and refused to give +one when it judged it did not have jurisdiction. Nothing in the work of the +court has yet been an indication that this is an impairment of its +independence or that its practice differs materially from the giving of +like opinions under the authority of the constitutions of several of our +States. +</p> + +<p> +No provision of the statute seems to me to give this court any authority to +be a political rather than a judicial court. We have brought cases in this +country before our courts which, when they have been adjudged to be +political, have been thereby dismissed. It is not improbable that political +questions will be submitted to this court, but again up to the present time +the court has refused to pass on political questions and our support would +undoubtedly have a tendency to strengthen it in that refusal. +</p> + +<p> +We are not proposing to subject ourselves to any compulsory jurisdiction. +If we support the court, we can never be obliged to submit any case which +involves our interests for its decision. Our appearance before it would +always be voluntary, for the purpose of presenting a case which we had +agreed might be presented. There is no more danger that others might bring +cases before the court involving our interests which we did not wish to +have brought, after we have adhered, and probably not so much, than there +would be of bringing such cases if we do not adhere. I think that we would +have the same legal or moral right to disregard such a finding in the one +case that we would in the other. +</p> + +<p> +If we are going to support any court, it will not be one that we have set +up alone or which reflects only our ideals. Other nations have their +customs and their institutions, their thoughts and their methods of life. +If a court is going to be international, its composition will have to yield +to what is good in all these various elements. Neither will it be possible +to support a court which is exactly perfect, or under which we assume +absolutely no obligations. If we are seeking that opportunity, we might as +well declare that we are opposed to supporting any court. If any agreement +is made, it will be because it undertakes to set up a tribunal which can do +some of the things that other nations wish to have done. We shall not find +ourselves bearing a disproportionate share of the world's burdens by our +adherence, and we may as well remember that there is absolutely no escape +for our country from bearing its share of the world's burdens in any case. +We shall do far better service to ourselves and to others if we admit this +and discharge our duties voluntarily, than if we deny it and are forced to +meet the same obligations unwillingly. +</p> + +<p> +It is difficult to imagine anything that would be more helpful to the world +than stability, tranquility and international justice. We may say that we +are contributing to these factors independently, but others less +fortunately located do not and can not make a like contribution except +through mutual cooperation. The old balance of power, mutual alliances, and +great military forces were not brought bout by any mutual dislike for +independence, but resulted from the domination of circumstances. Ultimately +they were forced on us. Like all others engaged in the war whatever we said +as a matter of fact we joined an alliance, we became a military power, we +impaired our independence. We have more at stake than any one else in +avoiding a repetition of that calamity. Wars do not, spring into existence. +They arise from small incidents and trifling irritations which can be +adjusted by an international court. We can contribute greatly to the +advancement of our ideals by joining with other nations in maintaining such +a tribunal. +</p> + +<p> +FOREIGN DEBTS +</p> + +<p> +Gradually, settlements have been made which provide for the liquidation of +debts due to our Government from foreign governments. Those made with Great +Britain, Finland, Hungary Lithuania, and Poland have already been approved +by the Congress. Since the adjournment, further agreements have been +entered into with Belgium, Czechoslovakia, Latvia, Estonia, Italy, and +Rumania. These 11 nations, which have already made settlements, represent +$6,419,528,641 of the original principal of the loans. The principal sums +without interest, still pending, are the debt of France, of $3,340,000,000; +Greece, $15,000,000; Yugoslavia, $.51,000,000; Liberia, $26,000; Russia, +$192,000,000, which those at present in control have undertaken, openly to +repudiate; Nicaragua, $84,000, which is being paid currently; and Austria, +$24,000,000, on which by act of Congress a moratorium of 20 years has been +granted. The only remaining sum is $12,000,000, due from Armenia, which has +now ceased to exist as an independent nation. +</p> + +<p> +In accordance with the settlements made, the amount of principal and +interest which is to be paid to the United States under these agreements +aggregate $15,200,688,253.93. It is obvious that the remaining settlements, +which will undoubtedly be made, will bring this sum up to an amount which +will more than equal the principal due on our present national debt. While +these settlements are very large in the aggregate, it has been felt that +the terms granted were in all cases very generous. They impose no undue +burden and are mutually beneficial in the observance of international faith +and the improvement of international credit. +</p> + +<p> +Every reasonable effort will be made to secure agreements for liquidation +with the remaining countries, whenever they are in such condition that they +can be made. Those which have already been negotiated under the bipartisan +commission established by the Congress have been made only after the most +thoroughgoing and painstaking investigation, continued for a long time +before meeting with the representatives of the countries concerned. It is +believed that they represent in each instance the best that can be done and +the wisest settlement that can be secured. One very important result is the +stabilization of foreign currency, making exchange assist rather than +embarrass our trade. Wherever sacrifices have been made of money, it will +be more than amply returned in better understanding and friendship, while +in so far as these adjustments will contribute to the financial stability +of the debtor countries, to their good order, prosperity, and progress, +they represent hope of improved trade relations and mutual contributions to +the civilization of the world. +</p> + +<p> +ALIEN PROBLEM +</p> + +<p> +Negotiations are progressing among the interested parties in relation to +the final distribution of the assets in the hands of the Alien Property +Custodian. Our Government and people are interested as creditors; the +German Government and people are interested as debtors and owners of the +seized property. Pending the outcome of these negotiations, I do not +recommend any affirmative legislation. For the present we should continue +in possession of this property which we hold as security for the settlement +of claims due to our people and our Government. +</p> + +<p> +IMMIGRATION +</p> + +<p> +While not enough time has elapsed to afford a conclusive demonstration, +such results as have been secured indicate that our immigration law is on +the whole beneficial. It is undoubtedly a protection to the wage earners of +this country. The situation should however, be carefully surveyed, in order +to ascertain whether it is working a needless hardship upon our own +inhabitants. If it deprives them of the comfort and society of those bound +to them by close family ties, such modifications should be adopted as will +afford relief, always in accordance with the principle that our Government +owes its first duty to our own people and that no alien, inhabitant of +another country, has any legal rights whatever under our Constitution and +laws. It is only through treaty, or through residence here that such rights +accrue. But we should not, however, be forgetful of the obligations of a +common humanity. +</p> + +<p> +While our country numbers among its best citizens many of those of foreign +birth, yet those who now enter in violation of our laws by that very act +thereby place themselves in a class of undesirables. Investigation +reveals that any considerable number are coming here in defiance of our +immigration restrictions, it will undoubtedly create the necessity for the +registration of all aliens. We ought to have no prejudice against an alien +because he is an alien. The standard which we apply to our inhabitants is +that of manhood, not place of birth. Restrictive immigration is to a large +degree for economic purposes. It is applied in order that we may not have a +larger annual increment of good people within our borders than we can weave +into our economic fabric in such a way as to supply their needs without +undue injury to ourselves. +</p> + +<p> +NATIONAL DEFENSE +</p> + +<p> +Never before in time of peace has our country maintained so large and +effective a military force as it now has. The Army, Navy, Marine Corps, +National Guard, and Organized Reserves represent a strength of about +558,400 men. These forces are well trained, well equipped, and high in +morale. +</p> + +<p> +A sound selective service act giving broad authority for the mobilization +in time of peril of all the resources of the country, both persons and +materials, is needed to perfect our defense policy in accordance with our +ideals of equality. The provision for more suitable housing to be paid for +out of funds derived from the sale of excess lands, pending before the last +Congress, ought to be brought forward and passed. Reasonable replacements +ought to be made to maintain a sufficient ammunition reserve. +</p> + +<p> +The Navy has the full treaty tonnage of capital ships. Work is going +forward in modernizing the older ones, building aircraft carriers, +additional fleet submarines, and fast scout cruisers, but we are carefully +avoiding anything that might be construed as a competition in armaments +with other nations. The joint Army and Navy maneuvers at Hawaii, followed +by the cruise of a full Battle Fleet to Australia and New Zealand, were +successfully carried out. These demonstrations revealed a most satisfactory +condition of the ships and the men engaged. +</p> + +<p> +Last year at my suggestion the General Board of the Navy made an +investigation and report on the relation of aircraft to warships. As a +result authorizations and appropriations were made for more scout cruisers +and fleet submarines and for completing aircraft carriers and equipping +them with necessary planes. Additional training in aviation was begun at +the Military and Naval Academies. A method of coordination and cooperation +of the Army and Navy and the principal aircraft builders is being +perfected. At the suggestion of the Secretaries of War and Navy I appointed +a special board to make a further study of the problem of aircraft. +</p> + +<p> +The report of the Air Board ought to be reassuring to the country, +gratifying to the service and satisfactory to the Congress. It is +thoroughly complete and represents the mature thought of the best talent in +the country. No radical change in organization of the service seems +necessary. The Departments of War, Navy, and Commerce should each be +provided with an additional assistant secretary, not necessarily with +statutory duties but who would be available under the direction of the +Secretary to give especial attention to air navigation. We must have an air +strength worthy of America. Provision should be made for two additional +brigadier generals for the Army Air Service. Temporary rank corresponding +to their duties should be awarded to active flying officers in both Army +and Navy. +</p> + +<p> +Aviation is of great importance both for national defense and commercial +development. We ought to proceed in its improvement by the necessary +experiment and investigation. Our country is not behind in this art. It has +made records for speed and for the excellence of its planes. It ought to go +on maintaining its manufacturing plants capable of rapid production, giving +national assistance to the la in out of airways, equipping itself with a +moderate number of planes and keeping an air force trained to the highest +efficiency. +</p> + +<p> +While I am a thorough believer in national defense and entirely committed +to the policy of adequate preparation, I am just as thoroughly opposed to +instigating or participating in a policy of competitive armaments. Nor does +preparation mean a policy of militarizing. Our people and industries are +solicitous for the cause of 0111, country, and have great respect for the +Army and Navy and foil the uniform worn by the men who stand ready at all +times for our protection to encounter the dangers and perils necessary to +military service, but all of these activities are to be taken not in behalf +of aggression but in behalf of peace. They are the instruments by which we +undertake to do our part to promote good will and support stability among +all peoples. +</p> + +<p> +VETERANS +</p> + +<p> +If any one desires to estimate the esteem in which the veterans of America +are held by their fellow citizens, it is but necessary to remember that the +current budget calls for an expenditure of about $650,000.000 in their +behalf. This is nearly the amount of the total cost of the National +Government, exclusive of the post office, before we entered the last war. +</p> + +<p> +At the two previous sessions of Congress legislation affecting veterans' +relief was enacted and the law liberalized. This legislation brought into +being a number of new provisions tending more nearly to meet the needs of +our veterans, as well as afford the necessary authority to perfect the +administration of these laws. +</p> + +<p> +Experience with the new legislation so far has clearly demonstrated its +constructive nature. It has increased the benefits received by many and has +made eligible for benefits many others. Direct disbursements to the veteran +or his dependents exceeding $21,000,000 have resulted, which otherwise +would not have been made. The degree of utilization of our hospitals has +increased through making facilities available to the incapacitated veteran +regardless of service origin of the disability. This new legislation also +has brought about a marked improvement of service to the veteran. +</p> + +<p> +The organizations of ex-service men have proposed additional legislative +changes which you will consider, but until the new law and the +modifications made at the last session of Congress are given a more +thorough test further changes in the basic law should be few and made only +after careful though sympathetic consideration. +</p> + +<p> +The principal work now before the Veterans' Bureau is the perfection of its +organization and further improvements in service. Some minor legislative +changes are deemed necessary to enable the bureau to retain that high grade +of professional talent essential in handling the problems of the bureau. +Such changes as tend toward the improvement of service and the carrying +forward to completion of the hospital construction program are recommended +for the consideration of the proper committees of Congress. +</p> + +<p> +With the enormous outlay that is now being made in behalf of the veterans +and their dependents, with a tremendous war debt still requiring great +annual expenditure, with the still high rate of taxation, while every +provision should be made for the relief of the disabled and the necessary +care of dependents, the Congress may well consider whether the financial +condition of the Government is not such that further bounty through the +enlargement of general pensions and other emoluments ought not to be +postponed. +</p> + +<p> +AGRICULTURE +</p> + +<p> +No doubt the position of agriculture as a whole has very much improved +since the depression of three and four years ago. But there are many +localities and many groups of individuals, apparently through no fault of +their own, sometimes due to climatic conditions and sometimes to the +prevailing price of a certain crop, still in a distressing condition. This +is probably temporary, but it is none the less acute. National Government +agencies, the Departments of Agriculture and Commerce, the Farm Loan Board, +the intermediate credit banks, and the Federal Reserve Board are all +cooperating to be of assistance and relief. On the other hand, there are +localities and individuals who have had one of their most prosperous years. +The general price level is fair, but here again there are exceptions both +ways, some items being poor while others are excellent. In spite of a +lessened production the farm income for this year will be about the same as +last year and much above the three preceding years. +</p> + +<p> +Agriculture is a very complex industry. It does not consist of one problem, +but of several. They can not be solved at one stroke. They have to be met +in different ways, and small gains are not to be despised. +</p> + +<p> +It has appeared from all the investigations that I have been able to make +that the farmers as a whole are determined to maintain the independence of +their business. They do not wish to have meddling on the part of the +Government or to be placed under the inevitable restrictions involved in +any system of direct or indirect price-fixing, which would result from +permitting the Government to operate in the agricultural markets. They are +showing a very commendable skill in organizing themselves to transact their +own business through cooperative marketing, which will this year turn over +about $2,500,000,000, or nearly one-fifth of the total agricultural +business. In this they are receiving help from the Government. The +Department of Agriculture should be strengthened in this facility, in order +to be able to respond when these marketing associations want help. While +it ought not to undertake undue regulation, it should be equipped to give +prompt information on crop prospects, supply, demand, current receipts, +imports, exports, and prices. +</p> + +<p> +A bill embodying these principles, which has been drafted under the advice +and with the approval of substantially all the leaders and managers in the +cooperative movement, will be presented to the Congress for its enactment. +Legislation should also be considered to provide for leasing the +unappropriated public domain for grazing purposes and adopting a uniform +policy relative to grazing on the public lands and in the national +forests. +</p> + +<p> +A more intimate relation should be established between agriculture and the +other business activities of the Nation. They are mutually dependent and +can each advance their own prosperity most by advancing the prosperity of +the other. Meantime the Government will continue those activities which +have resulted in an unprecedented amount of legislation and the pouring out +of great sums of money during the last five years. The work for good roads, +better land and water transportation, increased support for agricultural +education, extension of credit facilities through the Farm Loan Boards and +the intermediate credit banks, the encouragement of orderly marketing and a +repression of wasteful speculation, will all be continued. +</p> + +<p> +Following every other depression, after a short period the price of farm +produce has taken and maintained the lead in the advance. This advance had +reached a climax before the war. Everyone will recall the discussion that +went on for four or five years prior to 1914 concerning the high cost of +living. This history is apparently beginning to repeat itself. While +wholesale prices of other commodities have been declining, farm prices have +been increasing. There is every reason to suppose that a new era in +agricultural prosperity lies just before us, which will probably be +unprecedented. +</p> + +<p> +MUSCLE SHOALS +</p> + +<p> +The problem of Muscle Shoals seems to me to have assumed a place all out of +proportion with its real importance. It probably does not represent in +market value much more than a first-class battleship, yet it has been +discussed in the Congress over a period of years and for months at a time. +It ought to be developed for the production of nitrates primarily, and +incidentally for power purposes. This would serve defensive, agricultural, +and industrial purposes. I am in favor of disposing of this property to +meet these purposes. The findings of the special commission will be +transmitted to the Congress for their information. I am convinced that the +best possible disposition can be made by direct authorization of the +Congress. As a means of negotiation I recommend the immediate appointment +of a small joint special committee chosen from the appropriate general +standing committees of the House and Senate to receive bids, which when +made should be reported with recommendations as to acceptance, upon which a +law should be enacted, effecting a sale to the highest bidder who will +agree to carry out these purposes. +</p> + +<p> +If anything were needed to demonstrate the almost utter incapacity of the +National Government to deal directly with an industrial and commercial +problem, it has been provided by our experience with this property. We have +expended vast fortunes, we have taxed everybody, but we are unable to +secure results, which benefit anybody. This property ought, to be +transferred to private management under conditions which will dedicate it +to the public purpose for which it was conceived. +</p> + +<p> +RECLAMATION +</p> + +<p> +The National Government is committed to a policy of reclamation and +irrigation which it desires to establish on a sound basis and continue in +the interest of the localities concerned. Exhaustive studies have recently +been made of Federal reclamation, which have resulted in improving the +projects and adjusting many difficulties. About one third of the projects +is in good financial condition, another third can probably be made +profitable, while the other third is under unfavorable conditions. The +Congress has already provided for a survey which will soon be embodied in a +report. That ought to suggest a method of relief which will make +unnecessary further appeals to the Congress. Unless this can be done, +Federal reclamation will be considerably retarded. With the greatly +increased cost of construction and operation, it has become necessary to +plan in advance, by community organization and selective agriculture, +methods sufficient to repay these increasing outlays. +</p> + +<p> +The human and economic interests of the farmer citizens suggest that the +States should be required to exert some effort and assume some +responsibility, especially in the intimate, detailed, and difficult work of +securing settlers and developing farms which directly profit them, but only +indirectly and remotely can reimburse the Nation. It is believed that the +Federal Government should continue to be the agency for planning and +constructing the great undertakings needed to regulate and bring into use +the rivers the West, many of which are interstate in character, but the +detailed work of creating agricultural communities and a rural civilization +on the land made ready for reclamation ought to be either transferred to +the State in its entirety or made a cooperative effort of the State and +Federal Government. +</p> + +<p> +SHIPPING +</p> + +<p> +The maintenance of a merchant marine is of the utmost importance for +national defense and the service of our commerce. We have a large number of +ships engaged in that service. We also have a surplus supply, costly to +care for, which ought to be sold. All the investigations that have been +made under my direction, and those which have been prosecuted +independently, have reached the conclusion that the fleet should be under +the direct control of a single executive head, while the Shipping Board +should exercise its judicial and regulatory functions in Accordance with +its original conception. The report of Henry G. Dalton, a business man of +broad experience, with a knowledge of shipping, made to me after careful +investigation, will be transmitted for the information of the Congress, the +studies pursued under the direction of the United States Chamber of +Commerce will also be accessible, and added to these will be the report of +the special committee of the House. +</p> + +<p> +I do not advocate the elimination of regional considerations, but it has +become apparent that without centralized executive action the management of +this great business, like the management of any other great business, will +flounder in incapacity and languish under a division of council. A plain +and unmistakable reassertion of this principle of unified control, which I +have always been advised was the intention of the Congress to apply, is +necessary to increase the efficiency of our merchant fleet. +</p> + +<p> +COAL +</p> + +<p> +The perennial conflict in the coal industry is still going on to the great +detriment of the wage earners, the owners, and especially to the public. +With deposits of coal in this country capable of supplying its needs for +hundreds of years, inability to manage and control this great resource for +the benefit of all concerned is very close to a national economic failure. +It has been the subject of repeated investigation and reiterated +recommendation. Yet the industry seems never to have accepted modern +methods of adjusting differences between employers and employees. The +industry could serve the public much better and become subject to a much +more effective method of control if regional consolidations and more +freedom in the formation of marketing associations, under the supervision +of the Department of Commerce, were permitted. +</p> + +<p> +At the present time the National Government has little or no authority to +deal with this vital necessity of the life of the country. It has permitted +itself to remain so powerless that its only attitude must be humble +supplication. Authority should be lodged with the President and the +Departments of Commerce and Labor, giving them power to deal with an +emergency. They should be able to appoint temporary boards with authority +to call for witnesses and documents, conciliate differences, encourage +arbitration, and in case of threatened scarcity exercise control over +distribution. Making the facts public under these circumstances through a +statement from an authoritative source would be of great public benefit. +The report of the last coal commission should be brought forward, +reconsidered, and acted upon. +</p> + +<p> +PROHIBITION +</p> + +<p> +Under the orderly processes of our fundamental institutions the +Constitution was lately amended providing for national prohibition. The +Congress passed an act for its enforcement, and similar acts have been +provided by most of the States. It is the law of the land. It is the duty +of all who come under its, jurisdiction to observe the spirit of that law, +and it is the duty of the Department of Justice and the Treasury Department +to enforce it. Action to prevent smuggling, illegal transportation in +interstate commerce, abuse in the use of permits, and existence of sources +of supply for illegal traffic is almost entirely imposed upon the Federal +Government. +</p> + +<p> +Through treaties with foreign governments and increased activities of the +Coast Guard, revenue agents, district attorneys and enforcement agents +effort is being made to prevent these violations. But the Constitution also +puts a concurrent duty on the States. We need their active and energetic +cooperation, the vigilant action of their police, and the jurisdiction of +their courts to assist in enforcement. I request of the people observance, +of the public officers continuing efforts for enforcement, and of the +Congress favorable action on the budget recommendation for the prosecution +of this work. +</p> + +<p> +WATERWAY DEVELOPMENT +</p> + +<p> +For many years our country has been employed in plans and M for the +development of our intracoastal and inland waterways. This work along our +coast is an important adjunct to our commerce. It will be carried on, +together with the further opening up of our harbors, as our resources +permit. The Government made an agreement during the war to take over the +Cape Cod Canal, under which the owners made valuable concessions. This +pledged faith of the Government ought to be redeemed. +</p> + +<p> +Two other main fields are under consideration. One is the Great Lakes and +St. Lawrence, including the Erie Canal. This includes stabilizing the lake +level, and is both a waterway and power project. A joint commission of the +United States and Canada is working on plans and surveys which will not be +completed until next April. No final determination can be made, apparently, +except under treaty as to the participation of both countries. The other is +the Mississippi River stem. This is almost entirely devoted to navigation. +Work on the Ohio River will be completed in about three years. A modern +channel connecting Chicago, New Orleans, Kansas City, and Pittsburgh should +be laid out and work on the tributaries prosecuted. Some work is being done +of a preparatory nature along the Missouri, and large expenditures are +being made yearly in the lower reaches of the Mississippi and its +tributaries which contribute both to flood control and navigation. +Preliminary measures are being taken on the Colorado River project, which +is exceedingly important for flood control, irrigation, power development, +and water supply to the area concerned. It would seem to be very doubtful, +however, whether it is practical to secure affirmative action of the +Congress, except under a Joint agreement of the several States. +</p> + +<p> +The Government has already expended large sums upon scientific research and +engineering investigation in promotion of this Colorado River project. The +actual progress has been retarded for many years by differences among the +seven States in the basin over their relative water rights and among +different groups as to methods. In an attempt to settle the primary +difficulty of the water rights, Congress authorized the Colorado River +Commission which agreed on November 24, 1922, upon an interstate compact to +settle these rights, subject to the ratification of the State legislatures +and Congress. All seven States except Arizona at one time ratified, the +Arizona Legislature making certain reservations which failed to meet the +approval of the governor. Subsequently an attempt was made to establish the +compact upon a six-State basis, but in this case California imposed +reservations. There appears to be no division of opinion upon the major +principles of the compact, but difficulty in separating contentions to +methods of development from the discussion of it. It is imperative that +flood control be undertaken for California and Arizona. preparation made +for irrigation, for power, and for domestic water. +</p> + +<p> +Some or all of these questions are combined in every proposed development. +The Federal Government is interested in some of these phases, State +governments and municipalities and irrigation districts in others, and +private corporations in still others. Because of all this difference of +view it is most desirable that Congress should consider the creation of +some agency that will be able to determine methods of improvement solely +upon economic and engineering facts, that would be authorized to negotiate +and settle, subject to the approval of Congress, the participation, rights, +and obligations of each group in any particular works. Only by some such +method can early construction be secured. +</p> + +<p> +WATER POWER +</p> + +<p> +Along with the development of navigation should go every possible +encouragement for the development of our water power. While steam still +plays a dominant part, this is more and more becoming an era of +electricity. Once installed, the cost is moderate, has not tended greatly +to increase, and is entirely free from the unavoidable dirt and +disagreeable features attendant upon the burning of coal. Every facility +should be extended for the connection of the various units into a +superpower plant, capable at all times of a current increasing uniformity +over the entire system. +</p> + +<p> +RAILROADS +</p> + +<p> +The railroads throughout the country are in a fair state of prosperity. +Their service is good and their supply of cars is abundant. Their condition +would be improved and the public better served by a system of +consolidations. I recommend that the Congress authorize such consolidations +tinder the supervision of the Interstate Commerce Commission, with power to +approve or disapprove when proposed parts are excluded or new parts added. +I am informed that the railroad managers and their employees have reached a +substantial agreement as to what legislation is necessary to regulate and +improve their relationship. Whenever they bring forward such proposals, +which seem sufficient also to protect the interests of the public, they +should be enacted into law. +</p> + +<p> +It is gratifying to report that both the railroad managers and railroad +employees are providing boards for the mutual adjustment of differences in +harmony with the principles of conference, conciliation, and arbitration. +The solution of their problems ought to be an example to all other +industries. Those who ask the protections of civilization should be ready +to use the methods of civilization. +</p> + +<p> +A strike in modern industry has many of the aspects of war in the modern +world. It injures labor and it injures capital. If the industry involved is +a basic one, it reduces the necessary economic surplus and, increasing the +cost of living, it injures the economic welfare and general comfort of the +whole people. It also involves a deeper cost. It tends to embitter and +divide the community into warring classes and thus weakens the unity and +power of our national life. +</p> + +<p> +Labor can make no permanent gains at the cost of the general welfare. All +the victories won by organized labor in the past generation have been won +through the support of public opinion. The manifest inclination of the +managers and employees of the railroads to adopt a policy of action in +harmony with these principles marks a new epoch in our industrial life. +</p> + +<p> +OUTLYING POSSESSIONS +</p> + +<p> +The time has come for careful investigation of the expenditures and success +of the laws by which we have undertaken to administer our outlying +possessions. A very large amount of money is being expended for +administration in Alaska. It appears so far out of proportion to the number +of inhabitants and the amount of production as to indicate cause for +thorough investigation. Likewise consideration should be given to the +experience under the law which governs the Philippines. From such reports +as reach me there are indications that more authority should be given to +the Governor General, so that he will not be so dependent upon the local +legislative body to render effective our efforts to set an example of the, +sound administration and good government, which is so necessary for the +preparation of the Philippine people for self-government under ultimate +independence. If they are to be trained in these arts, it is our duty to +provide for them the best that there is. +</p> + +<p> +RETIREMENT OF JUDGES +</p> + +<p> +The act of March 3, 1911, ought to be amended so that the term of years of +service of judges of any court of the United States requisite for +retirement with pay shall be computed to include not only continuous but +aggregate service. +</p> + +<p> +MOTHERS' AID +</p> + +<p> +The Government ought always to be alert on the side of the humanities. It +Ought to encourage provisions for economic justice for the defenseless. It +ought to extend its relief through its national and local agencies, as may +be appropriate in each case, to the suffering and the needy. It ought to be +charitable. +</p> + +<p> +Although more than 40 of our States have enacted measures in aid of +motherhood, the District of Columbia is still without such a law. A +carefully considered bill will be presented, which ought to have most +thoughtful consideration in order that the Congress may adopt a measure +which will be hereafter a model for all parts of the Union. +</p> + +<p> +CIVIL SERVICE +</p> + +<p> +In 1883 the Congress passed the civil service act, which from a modest +beginning of 14,000 employees has grown until there are now 425,000 in the +classified service. This has removed the clerical force of the Nation from +the wasteful effects of the spoils system and made it more stable and +efficient. The time has come to consider classifying all postmasters, +collectors of customs, collectors of internal revenue, and prohibition +agents, by an act covering in those at present in office, except when +otherwise provided by Executive order. +</p> + +<p> +The necessary statistics are now being gathered to form the basis of a +valuation of the civil service retirement fund based on current conditions +of the service. It is confidently expected that this valuation will be +completed in time to be made available to the Congress during the present +session. It will afford definite knowledge of existing, and future +liabilities under the present law and determination OF liabilities under +any proposed change in the present law. We should have this information +before creating further obligations for retirement annuities which will +become liabilities to be met in the future from the money of the taxpayer. +</p> + +<p> +The classification act of 1923, with the subsequent legislative action +providing for adjustment of the compensation of field service positions, +has operated materially to improve employment conditions in the Federal +service. The administration of the act is in the hands of an impartial +board, functioning without the necessity of a direct appropriation. It +would be inadvisable at this time to place in other hands the +administration of this act. +</p> + +<p> +FEDERAL TRADE COMMISSION +</p> + +<p> +The proper function of the Federal Trade Commission is to supervise and +correct those practices in commerce which are detrimental to fair +competition. In this it performs a useful function and should be continued +and supported. It was designed also to be a help to honest business. In my +message to the Sixty-eighth Congress I recommended that changes in the +procedure then existing be made. Since then the commission by its own +action has reformed its rules, giving greater speed and economy in the +disposal of its cases and full opportunity for those accused to be heard. +These changes are improvements and, if necessary, provision should be made +for their permanency. +</p> + +<p> +REORGANIZATION +</p> + +<p> +No final action has yet been taken on the measure providing for the +reorganization of the various departments. I therefore suggest that this +measure, which will be of great benefit to the efficient and economical +administration of the business of the Government, be brought forward and +passed. +</p> + +<p> +THE NEGRO +</p> + +<p> +Nearly one-tenth of our population consists of the Negro race. The progress +which they have made in all the arts of civilization in the last 60 years +is almost beyond belief. Our country has no more loyal citizens. But they +do still need sympathy, kindness, and helpfulness. They need reassurance +that the requirements of the Government and society to deal out to them +even-handed justice will be met. They should be protected from all violence +and supported in the peaceable enjoyment of the fruits of their labor. +Those who do violence to them should be punished for their crimes. No other +course of action is worthy of the American people. +</p> + +<p> +Our country has many elements in its population, many different modes of +thinking and living, all of which are striving in their own way to be loyal +to the high ideals worthy of the crown of American citizenship. It is +fundamental of our institutions that they seek to guarantee to all our +inhabitants the right to live their own lives under the protection of the +public law. This does not include any license to injure others materially, +physically, morally, to Incite revolution, or to violate the established +customs which have long had the sanction of enlightened society. +</p> + +<p> +But it does mean the full right to liberty and equality before the law +without distinction of race or creed. This condition can not be granted to +others, or enjoyed by ourselves, except by the application of the principle +of broadest tolerance. Bigotry is only another name for slavery. It reduces +to serfdom not only those against whom it is directed, but also those who +seek to apply it. An enlarged freedom can only be secured by the +application of the golden rule. No other utterance ever presented such a +practical rule of life. +</p> + +<p> +CONCLUSION +</p> + +<p> +It is apparent that we are reaching into an era of great general +prosperity. It will continue only so long as we shall use it properly. +After all, there is but a fixed quantity of wealth in this country at any +fixed time. The only way that we can all secure more of it is to create +more. The element of time enters into production, If the people have +sufficient moderation and contentment to be willing to improve their +condition by the process of enlarging production, eliminating waste, and +distributing equitably, a prosperity almost without limit lies before its. +If the people are to be dominated by selfishness, seeking immediate riches +by nonproductive speculation and by wasteful quarreling over the returns +from industry, they will be confronted by the inevitable results of +depression and privation. If they will continue industrious and thrifty, +contented with fair wages and moderate profits, and the returns which +accrue from the development of oar natural resources, our prosperity will +extend itself indefinitely. +</p> + +<p> +In all your deliberations you should remember that the purpose of +legislation is to translate principles into action. It is an effort to have +our country be better by doing better. Because the thoughts and ways of +people are firmly fixed and not easily changed, the field within which +immediate improvement can be secured is very narrow. Legislation can +provide opportunity. Whether it is taken advantage of or not depends upon +the people themselves. The Government of the United States has been created +by the people. It is solely responsible to them. It will be most successful +if it is conducted solely for their benefit. All its efforts would be of +little avail unless they brought more justice, more enlightenment, more +happiness and prosperity into the home. This means an opportunity to +observe religion, secure education, and earn a living under a reign of law +and order. It is the growth and improvement of the material and spiritual +life of the Nation. We shall not be able to gain these ends merely by our +own action. If they come at all, it will be because we have been willing to +work in harmony with the abiding purpose of a Divine Providence. +</p> + +<p><br /><br /><br /></p> + +<p class="t3"> +*** +</p> + +<p><a id="dec1926"></a></p> + +<p class="noindent"> +State of the Union Address<br /> +Calvin Coolidge<br /> +December 7, 1926<br /> +</p> + +<p class="noindent"> +Members of the Congress: +</p> + +<p> +In reporting to the Congress the state of the Union, I find it impossible +to characterize it other than one of general peace and prosperity. In some +quarters our diplomacy is vexed with difficult and as yet unsolved +problems, but nowhere are we met with armed conflict. If some occupations +and areas are not flourishing, in none does there remain any acute chronic +depression. What the country requires is not so much new policies as a +steady continuation of those which are already being crowned with such +abundant success. It can not be too often repeated that in common with all +the world we are engaged in liquidating the war. +</p> + +<p> +In the present short session no great amount of new legislation is +possible, but in order to comprehend what is most desirable some survey of +our general situation is necessary. A large amount of time is consumed in +the passage of appropriation bills. If each Congress in its opening session +would make appropriations to continue for two years, very much time would +be saved which could either be devoted to a consideration of the general +needs of the country or would result in decreasing the work of legislation. +ECONOMY +</p> + +<p> +Our present state of prosperity has been greatly promoted by three +important causes, one of which is economy, resulting in reduction and +reform in national taxation. Another is the elimination of many kinds of +waste. The third is a general raising of the standards of efficiency. This +combination has brought the perfectly astonishing result of a reduction in +the index price of commodities and an increase in the index rate of wages. +We have secured a lowering of the cost to produce and a raising of the +ability to consume. Prosperity resulting from these causes rests on the +securest of all foundations. It gathers strength from its own progress. +</p> + +<p> +In promoting this progress the chief part which the National Government +plays lies in the field of economy. Whatever doubts may have been +entertained as to the necessity of this policy and the beneficial results +which would accrue from it to all the people of the Nation, its wisdom must +now be considered thoroughly demonstrated. It may not have appeared to be a +novel or perhaps brilliant conception, but it has turned out to be +preeminently sound. It has not failed to work. It has surely brought +results. It does not have to be excused as a temporary expedient adopted as +the lesser evil to remedy some abuse, it is not a palliative seeking to +treat symptoms, but a major operation for the, eradication at the source of +a large number of social diseases. +</p> + +<p> +Nothing is easier than the expenditure of public money. It does not appear +to belong to anybody. The temptation is overwhelming to bestow it on +somebody. But the results of extravagance are ruinous. The property of the +country, like the freedom of the country, belongs to the people of the +country. They have not empowered their Government to take a dollar of it +except for a necessary public purpose. But if the Constitution conferred +such right, sound economics would forbid it. Nothing is more, destructive +of the progress of the Nation than government extravagance. It means an +increase in the burden of taxation, dissipation of the returns from +enterprise, a decrease in the real value of wages, with ultimate stagnation +and decay. The whole theory of our institutions is based on the liberty and +independence of the individual. He is dependent on himself for support and +therefore entitled to the rewards of his own industry. He is not to be +deprived of what he earns that others may be benefited by what they do not +earn. What he saves through his private effort is not to be wasted by +Government extravagance. +</p> + +<p> +Our national activities have become so vast that it is necessary to +scrutinize each item of public expenditure if we are to apply the principle +of economy. At the last session we made an immediate increase in the annual +budget of more than $100,000,000 in benefits conferred on the veterans of +three wars, public buildings, and river and harbor improvement. Many +projects are being broached requiring further large outlays. I am convinced +that it would be greatly for the welfare of the country if we avoid at the +present session all commitments except those of the most pressing nature. +From a reduction of the debt and taxes will accrue a wider benefit to all +the people of this country than from embarking on any new enterprise. When +our war debt is decreased we shall have resources for expansion. Until that +is accomplished we should confine ourselves to expenditures of the most +urgent necessity. +</p> + +<p> +The Department of Commerce has performed a most important function in +making plans and securing support of all kinds of national enterprise for +the elimination of waste. Efficiency has been greatly promoted through good +management and the constantly increasing cooperation of the wage earners +throughout the whole realm of private business. It is my opinion that this +whole development has been predicated on the foundation of a protective +tariff. +</p> + +<p> +TAX REDUCTION +</p> + +<p> +As a result of economy of administration by the Executive and of +appropriation by the Congress, the end of this fiscal year will leave a +surplus in the Treasury estimated at $383,000,000. Unless otherwise +ordered, such surplus is used for the retirement of the war debt. A bond +which can be retired today for 100 cents will cost the people 104 1/4 +cents to retire a year from now. While I favor a speedy reduction of the +debt as already required by law and in accordance with the promises made to +the holders of our Liberty bonds when they were issued, there is no reason +why a balanced portion of surplus revenue should not be applied to a +reduction of taxation. It can not be repeated too often that the enormous +revenues of this Nation could not be collected without becoming a charge on +all the people whether or not they directly pay taxes. Everyone who is +paying or the bare necessities of fool and shelter and clothing, without +considering the better things of life, is indirectly paying a national tax. +The nearly 20,000,000 owners of securities, the additional scores of +millions of holders of insurance policies and depositors in savings banks, +are all paying a national tax. Millions of individuals and corporations are +making a direct contribution to the National Treasury which runs from 11/2 +to 25 per cent of their income, besides a number of special requirements, +like automobile and admission taxes. Whenever the state of the Treasury +will permit, I believe in a reduction of taxation. I think the taxpayers +are entitled to it. But I am not advocating tax reduction merely for the +benefit of the taxpayer; I am advocating it for the benefit of the +country. +</p> + +<p> +If it appeared feasible, I should welcome permanent tax reduction at this +time. The estimated surplus, however, for June 30, 1928, is not much larger +than is required in a going business of nearly $4,000,000,000. We have had +but a few months' experience under the present revenue act and shall need +to know what is developed by the returns of income produced under it, which +are not required t o be made until about the time this session terminates, +and what the economic probabilities of the country are in the latter part +of 1927, before we can reach any justifiable conclusion as to permanent tax +reduction. Moreover the present surplus results from many nonrecurrent +items. Meantime, it is possible to grant some real relief by a simple +measure making reductions in the payments which accrue on the 15th of March +and June, 1927. I am very strongly of the conviction that this is so much a +purely business matter that it ought not to be dealt with in a partisan +spirit. The Congress has already set the notable example of treating tax +problems without much reference to party, which might well be continued. +What I desire to advocate most earnestly is relief for the country from +unnecessary tax burdens. We can not secure that if we stop to engage in a +partisan controversy. As I do not think any change in the special taxes, or +tiny permanent reduction is practical, I therefore urge both parties of the +House Ways and Means Committee to agree on a bill granting the temporary +relief which I have indicated. Such a reduction would directly affect +millions of taxpayers, release large sums for investment in new enterprise, +stimulating industrial production and agricultural consumption, and +indirectly benefiting every family in the whole country. These are my +convictions stated with full knowledge that it is for the Congress to +decide whether they judge it best to make such a reduction or leave the +surplus for the present year to be applied to retirement of the war debt. +That also is eventually tax reduction. +</p> + +<p> +PROTECTIVE TARIFF +</p> + +<p> +It is estimated that customs receipts for the present fiscal year will +exceed $615,000,000, the largest which were ever secured from that source. +The value of our imports for the last fiscal year was $4,466,000,000, an +increase of more than 71 per cent since the present tariff law went into +effect. Of these imports about 65 per cent, or, roughly, $2,900,000,000, +came in free of duty, which means that the United States affords a +duty-free market to other countries almost equal in value to the total +imports of Germany and greatly exceeding the total imports of France. We +have admitted a greater volume of free imports than any other country +except England. +</p> + +<p> +We are, therefore, levying duties on about $1,550,000,000 of imports. +Nearly half of this, or $700,000,000, is subject to duties for the +protection of agriculture and have their origin in countries other than +Europe. They substantially increased the prices received by our farmers for +their produce. About $300,000.000 more is represented by luxuries such as +costly rugs, furs, precious stones, etc. This leaves only about +$550,000,000 of our imports under a schedule of duties which is in general +under consideration when there is discussion of lowering the tariff. While +the duties on this small portion, representing only about 12 per cent of +our imports, undoubtedly represent the difference between a fair degree of +prosperity or marked depression to many of our industries and the +difference between good pay and steady work or wide unemployment to many of +our wage earners, it is impossible to conceive how other countries or our +own importers could be greatly benefited if these duties are reduced. Those +who are starting an agitation for a reduction of tariff duties, partly at +least for the benefit of those to whom money has been lent abroad, ought to +know that there does not seem to be a very large field within the area of +our imports in which probable reductions would be advantageous to foreign +goods. Those who wish to benefit foreign producers are much more likely to +secure that result by continuing the present enormous purchasing power +which comes from our prosperity that increased our imports over 71 +per cent in four years than from any advantages that are likely to accrue +from a general tariff reduction. +</p> + +<p> +AGRICULTURE +</p> + +<p> +The important place which agriculture holds in the economic and social life +of the Nation can not be overestimated. The National Government is +justified in putting forth every effort to make the open country a +desirable place to live. No condition meets this requirement which fails to +supply a fair return on labor expended and capital invested. While some +localities and some particular crops furnish exceptions, in general +agriculture is continuing to make progress in recovering from the +depression of 1921 and 1922. Animal products and food products are in a +more encouraging position, while cotton, due to the high prices of past +years supplemented by ideal weather conditions, has been stimulated to a +point of temporary over production. Acting on the request of the cotton +growing interests, appointed a committee to assist in carrying out their +plans. As it result of this cooperation sufficient funds have been pledged +to finance the storage and carrying of 4,000,000 bales of cotton. Whether +those who own the cotton are willing to put a part of their stock into this +plan depends on themselves. The Federal Government has cooperated in +providing ample facilities. No method of meeting the situation would be +adequate which does not contemplate a reduction of about one-third in the +acreage for the coming year. The responsibility for making the plan +effective lies with those who own and finance cotton and cotton lands. +</p> + +<p> +The Department of Agriculture estimates the net income of agriculture for +the year 1920-21 at only $375,000,000; for 1924-25, $2,656,000,000; for +1925-26, $2,757,000,000. This increase has been brought about in part by +the method already referred to, of Federal tax reduction, the elimination +of waste, and increased efficiency in industry. The wide gap that existed a +few years ago between the index price of agricultural products and the +index price of other products has been gradually closing up, though the +recent depression in cotton has somewhat enlarged it. Agriculture had on +the whole been going higher while industry had been growing lower. +Industrial and commercial activities, being carried on for the most part by +corporations, are taxed at a much higher rate than farming, which is +carried on by individuals. This will inevitably make industrial commodity +costs high while war taxation lasts. It is because of this circumstance +that national tax reduction has a very large indirect benefit upon the +farmer, though it can not relieve him from the very great burden of the +local taxes which he pays directly. We have practically relieved the farmer +of any Federal income tax. +</p> + +<p> +There is agreement on all sides that some portions of our agricultural +industry have lagged behind other industries in recovery from the war and +that further improvement in methods of marketing of agricultural products +is most desirable. There is belief also that the Federal Government can +further contribute to these ends beyond the many helpful measures taken +during the last five years through the different acts of Congress for +advancing the interests of the farmers. +</p> + +<p> +The packers and stockyards act, +</p> + +<p> +Establishing of the intermediate credit banks for agricultural purposes, +</p> + +<p> +The Purnell Act for agricultural research, +</p> + +<p> +The Capper-Volstead Cooperative Marketing Act, +</p> + +<p> +The cooperative marketing act of 1926, +</p> + +<p> +Amendments to the warehousing act, +</p> + +<p> +The enlargement of the activities of the Department of Agriculture, +</p> + +<p> +Enlargement of the scope of loans by the Farm Loan Board, +</p> + +<p> +The tariff on agricultural products, +</p> + +<p> +The large Federal expenditure in improvement of waterways and highways, +</p> + +<p> +The reduction of Federal taxes, in all comprise a great series of +governmental actions in the advancement of the special interest of +agriculture. +</p> + +<p> +In determination of what further measures may be undertaken it seems to me +there are certain pitfalls which must be avoided and our test in avoiding +them should be to avoid disaster to the farmer himself. +</p> + +<p> +Acting upon my recommendation, the Congress has ordered the interstate +Commerce Commission to investigate the freight-rate structure, directing +that such changes shall be made in freight rates as will promote freedom of +movement of agricultural products. Railroad consolidation which I am +advocating would also result in a situation where rates could be made more +advantageous for farm produce, as has recently been done in the revision of +rates on fertilizers in the South. Additional benefit will accrue from the +development of our inland waterways. The Mississippi River system carries a +commerce of over 50,000,000 tons at a saving of nearly $18,000,000 +annually. The Inland Waterways Corporation operates boats on 2,500 miles of +navigable streams and through its relation with 165 railroads carries +freight into and out of 45 States of the Union. During the past six months +it has handled over 1,000,000 bushels of grain monthly and by its lower +freight rates has raised the price of such grain to the farmer probably +21/2 cents to 3 cents a bushel. The highway system on which the Federal +Government expends about $85,000,000 a year is of vital importance to the +rural regions. +</p> + +<p> +The advantages to be derived from a more comprehensive and less expensive +system of transportation for agriculture ought to be supplemented by +provision for an adequate supply of fertilizer at a lower cost than it is +at present obtainable. This advantage we are attempting to secure by the +proposed development at Muscle Shoals, and there are promising experiments +being made in synthetic chemistry for the production of nitrates. +</p> + +<p> +A survey should be made of the relation of Government grazing lands to the +livestock industry. Additional legislation is desirable more definitely to +establish the place of grazing in the administration of the national +forests, properly subordinated to their functions of producing timber and +conserving the water supply. Over 180,000,000 acres of grazing lands are +still pastured as commons in the public domain with little or no +regulation. This has made their use so uncertain that it has contributed +greatly to the instability of the livestock industry. Very little of this +land is suited to settlement or private ownership. Some plan ought to be +adopted for its use in grazing, corresponding broadly to that already +successfully applied to the national forests. +</p> + +<p> +The development of sound and strong cooperative associations is of +fundamental importance to our agriculture. It is encouraging to note, +therefore, that a vigorous and healthy growth in the cooperative movement +is continuing. Cooperative associations reporting to the Department of +Agriculture at the end of 1925 had on their membership rolls a total of +2,700,000 producers. Their total business in 1925 amounted to approximately +$2,400,000,000, compared with $635,800,000 in 1915. Legislative action to +assist cooperative associations and supplement their efforts was passed at +the last session of Congress. Important credit measures were also provided +by Congress in 1923 which have been of inestimable value to the cooperative +associations. Although the Federal credit agencies have served agriculture +well, I think it may be possible to broaden and strengthen the service of +these institutions. +</p> + +<p> +Attention is again directed to the surplus problem of agriculture by the +present cotton situation. Surpluses often affect prices of various farm +commodities in a disastrous manner, and the problem urgently demands a +solution. Discussions both in and out of Congress during the past few years +have given us a better understanding of the subject, and it is my hope that +out of the various proposals made the basis will be found for a sound and +effective solution upon which agreement can be reached. In my opinion +cooperative marketing associations will be important aids to the ultimate +solution of the problem. It may well be, however, that additional measures +will be needed to supplement their efforts. I believe all will agree that +such measures should not conflict with the best interests of the +cooperatives, but rather assist and strengthen them. In working out this +problem to any sound conclusion it is necessary to avoid putting the +Government into the business of production or marketing or attempting to +enact legislation for the purpose of price fixing. The farmer does not +favor any attempted remedies that partake of these elements. He has a +sincere and candid desire for assistance. If matched by an equally sincere +and candid consideration of the different remedies proposed a sound +measure of relief ought to result. It is unfortunate that no general +agreement has been reached by the various agricultural interests upon any +of the proposed remedies. Out of the discussion of various proposals which +can be had before the Committees of Agriculture some measure ought to be +perfected which would be generally satisfactory. +</p> + +<p> +Due to the emergency arising from a heavy tropical storm in southern +Florida, I authorized the Secretary of Agriculture to use certain funds in +anticipation of legislation to enable the farmers in that region to plant +their crops. The department will present a bill ratifying the loans which +were made for this purpose. +</p> + +<p> +Federal legislation has been adopted authorizing the cooperation of the +Government with States and private owners in the protection of forest lands +from fire. This preventive measure is of such great importance that I have +recommended for it an increased appropriation. +</p> + +<p> +Another preventive measure of great economic and sanitary importance is the +eradication of tuberculosis in cattle. Active work is now in progress in +one-fourth of the counties of the United States to secure this result. Over +12,000,000 cattle have been under treatment, and the average degree of +infection has fallen from 4.9 per cent to 2.8 per cent. he Federal +Government is making substantial expenditures for this purpose. +</p> + +<p> +Serious damage is threatened to the corn crop by the European corn borer. +Since 1917 it has spread from eastern New England westward into Indiana and +now covers about 100,000 square miles. It is one of the most formidable +pests because it spreads rapidly and is exceedingly difficult of control. +It has assumed a menace that is of national magnitude and warrants the +Federal Government in extending its cooperation to the State and local +agencies which are attempting to prevent its further spread and secure its +eradication. +</p> + +<p> +The whole question of agriculture needs most careful consideration. In the +past few years the Government has given this subject more attention than +any other and has held more consultations in relation to it than on any +other subject. While the Government is not to be blamed for failure to +perform the impossible, the agricultural regions are entitled to know that +they have its constant solicitude and sympathy. Many of the farmers are +burdened with debts and taxes which they are unable to carry. We are +expending in this country many millions of dollars each year to increase +farm production. We ought now to put more emphasis on the question of farm +marketing. If a sound solution of a permanent nature can be found for this +problem, the Congress ought not to hesitate to adopt it. +</p> + +<p> +DEVELOPMENT OF WATER RESOURCES +</p> + +<p> +In previous messages I have referred to the national importance of the +proper development of our water resources. The great projects of extension +of the Mississippi system, the protection an development of the lower +Colorado River, are before Congress, and I have previously commented upon +them. I favor the necessary legislation to expedite these projects. +Engineering studies are being made for connecting the Great Lakes with the +North Atlantic either through an all-American canal or by way of the St. +Lawrence River. These reports will undoubtedly be before the Congress +during its present session. It is unnecessary to dwell upon the great +importance of such a waterway not only to our mid-continental basin but to +the commerce and development of practically the whole Nation. Our river and +harbor improvement should be continued in accordance with the present +policy. Expenditure of this character is compatible with economy; it is in +the nature of capital investment. Work should proceed on the basic trunk +lines if this work is to be a success. If the country will be content to be +moderate and patient and permit improvements to be made where they will do +the greatest general good, rather than insisting on expenditures at this +time on secondary projects, our internal Waterways can be made a success. +If proposes legislation results in a gross manifestation of local +jealousies and selfishness, this program can not be carried out. Ultimately +we can take care of extensions, but our first effort should be confined to +the main arteries. +</p> + +<p> +Our inland commerce has been put to great inconvenience and expense by +reason of the lowering of the water level of the Great Lakes. This is an +international problem on which competent engineers are making reports. Out +of their study it is expected that a feasible method will be developed for +raising the level to provide relief for our commerce and supply water for +drainage. Whenever a practical plan is presented it ought to be speedily +adopted. +</p> + +<p> +RECLAMATION +</p> + +<p> +It is increasingly evident that the Federal Government must in the future +take a leading part in the impounding of water for conservation with +incidental power for the development of the irrigable lands of the and +region. The unused waters of the West are found mainly in large rivers. +Works to store and distribute these have such magnitude and cost that they +are not attractive to private enterprise. Water is the irreplaceable +natural resource. Its precipitation can not be increased. Its storage on +the higher reaches of streams, to meet growing needs, to be used repeatedly +as it flows toward the seas, is a practical and prudent business policy. +</p> + +<p> +The United States promises to follow the course of older irrigation +countries, where recent important irrigation developments have been carried +out as national undertakings. It is gratifying, therefore, that conditions +on Federal reclamation projects have become satisfactory. The gross value +of crop, grown with water from project works increased from $110,000,000 +in 1924 to $131,000,000 in 1925. The adjustments made last year by Congress +relieved irrigators from paying construction costs on unprofitable land, +and by so doing inspired new hope and confidence in ability to meet the +payments required. Construction payments by water users last year were the +largest in the history of the bureau. +</p> + +<p> +The anticipated reclamation fund will be fully absorbed for a number of +years in the completion of old projects and the construction of projects +inaugurated in the past three years. We should, however, continue to +investigate and study the possibilities of a carefully planned development +of promising projects, logically of governmental concern because of their +physical magnitude, immense cost, and the interstate and international +problems involved. Only in this way may we be fully prepared to meet +intelligently the needs of our fast-growing population in the years to +come. +</p> + +<p> +TRANSPORTATION +</p> + +<p> +It would be difficult to conceive of any modern activity which contributes +more to the necessities and conveniences of life than transportation. +Without it our present agricultural production and practically all of our +commerce would be completely prostrated. One of the large contributing +causes to the present highly satisfactory state of our economic condition +is the prompt and dependable service, surpassing all our previous records, +rendered by the railroads. This power has been fostered by the spirit of +cooperation between Federal and State regulatory commissions. To render +this service more efficient and effective and to promote a more scientific +regulation, the process of valuing railroad properties should be simplified +and the primary valuations should be completed as rapidly as possible. The +problem of rate reduction would be much simplified by a process of railroad +consolidations. This principle has already been adopted as Federal law. +Experience has shown that a more effective method must be provided. Studies +have already been made and legislation introduced seeking to promote this +end. It would be of great advantage if it could be taken up at once and +speedily enacted. The railroad systems of the country and the convenience +of all the people are waiting on this important decision. +</p> + +<p> +MERCHANT MARINE +</p> + +<p> +It is axiomatic that no agricultural and industrial country can get the +full benefit of its own advantages without a merchant marine. We have been +proceeding under the act of Congress that contemplates the establishment of +trade routes to be ultimately transferred to private ownership and +operation. Due to temporary conditions abroad and at home we have a large +demand just now for certain types of freight vessels. Some suggestion has +been made for new construction. I do not feel that we are yet warranted in +entering, that field. Such ships as we might build could not be sold after +they are launched for anywhere near what they would cost. We have expended +over $250,000,000 out of the public Treasury in recent years to make up the +losses of operation, not counting the depreciation or any cost whatever of +our capital investment. The great need of our merchant marine is not for +more ships but for more freight. +</p> + +<p> +Our merchants are altogether too indifferent about using American ships for +the transportation of goods which they send abroad or bring home. Some of +our vessels necessarily need repairs, which should be made. I do not +believe that the operation of our fleet is as economical and efficient as +it could be made if placed under a single responsible head, leaving the +Shipping Board free to deal with general matters of policy and regulation. +</p> + +<p> +RADIO LEGISLATION +</p> + +<p> +The Department of Commerce has for some years urgently presented the +necessity for further legislation in order to protect radio listeners from +interference between broadcasting stations and to carry out other +regulatory functions. Both branches of Congress at the last session passed +enactments intended to effect such regulation, but the two bills yet remain +to be brought into agreement and final passage. +</p> + +<p> +Due to decisions of the courts, the authority of the department under the +law of 1912 has broken down; many more stations have been operating than +can be accommodated within the limited number of wave lengths available; +further stations are in course of construction; many stations have departed +from the scheme of allocation set down by the department, and the whole +service of this most important public function has drifted into such chaos +as seems likely, if not remedied, to destroy its great value. I most +urgently recommend that this legislation should be speedily enacted. +</p> + +<p> +I do not believe it is desirable to set up further independent agencies in +the Government. Rather I believe it advisable to entrust the important +functions of deciding who shall exercise the privilege of radio +transmission and under what conditions, the assigning of wave lengths and +determination of power, to a board to be assembled whenever action on such +questions becomes necessary. There should be right of appeal to the courts +from the decisions of such board. The administration of the decisions of +the board and the other features of regulation and promotion of radio in +the public interest, together with scientific research, should remain in +the Department of Commerce. Such an arrangement makes for more expert, more +efficient, and more economical administration that an independent agency or +board, whose duties, after initial stages, require but little attention, in +which administrative functions are confused with semijudicial functions and +from which of necessity there must be greatly increased personnel and +expenditure. +</p> + +<p> +THE WAGE EARNER +</p> + +<p> +The great body of our people are made up of wage earners. Several hundred +thousands of them are on the pay rolls of the United States Government. +Their condition very largely is fixed by legislation. We have recently +provided increases in compensation under a method of reclassification and +given them the advantage of a liberal retirement system as a support for +their declining years. Most of them are under the merit system, which is a +guaranty of their intelligence, and the efficiency of their service is a +demonstration of their loyalty. The Federal Government should continue to +set a good example for all other employers. +</p> + +<p> +In the industries the condition of the wage earner has steadily improved. +The 12-hour day is almost entirely unknown. Skilled labor is well +compensated. But there are unfortunately a multitude of workers who have +not yet come to share in the general prosperity of the Nation. Both the +public authorities and private enterprise should be solicitous to advance +the welfare of this class. The Federal Government has been seeking to +secure this end through a protective tariff, through restrictive +immigration, through requiring safety devices for the prevention of +accidents, through the granting of workman's compensation, through civilian +vocational rehabilitation and education, through employment information +bureaus, and through such humanitarian relief as was provided in the +maternity and infancy legislation. It is a satisfaction to report that a +more general condition of contentment exists among wage earners and the +country is more free from labor disputes than it has been for years. While +restrictive immigration has been adopted in part for the benefit of the +wage earner, and in its entirety for the benefit of the country, it ought +not to cause a needless separation of families and dependents from their +natural source of support contrary to the dictates of humanity. +</p> + +<p> +BITUMINOUS COAL +</p> + +<p> +No progress appears to have been made within large areas of the bituminous +coal industry toward creation of voluntary machinery by which greater +assurance can be given to the public of peaceful adjustment of wage +difficulties such as has been accomplished in the anthracite industry. This +bituminous industry is one of primary necessity and bears a great +responsibility to the Nation for continuity of supplies. As the wage +agreements in the unionized section of the industry expire on April 1 next, +and as conflicts may result which may imperil public interest, and have for +many years often called for action of the Executive in protection of the +public, I again recommend the passage of such legislation as will assist +the Executive in dealing with such emergencies through a special temporary +board of conciliation and mediation and through administrative agencies for +the purpose of distribution of coal and protection of the consumers of coal +from profiteering. At present the Executive is not only without authority +to act but is actually prohibited by law from making any expenditure to +meet the emergency of a coal famine. +</p> + +<p> +JUDICIARY +</p> + +<p> +The Federal courts hold a high position in the administration of justice in +the world. While individual judicial officers have sometimes been subjected +to just criticism, the courts as a whole have maintained an exceedingly +high standard. The Congress may well consider the question of supplying +fair salaries and conferring upon the Supreme Court the same rule-making +power on the law side of the district courts that they have always +possessed on the equity side. A bill is also pending providing for +retirement after a certain number of years of service, although they have +not been consecutive, which should have your favorable consideration. These +faithful servants of the Government are about the last that remain to be +provided for in the postwar readjustments. +</p> + +<p> +BANKING +</p> + +<p> +There has been pending in Congress for nearly three years banking +legislation to clarify the national bank act and reasonably to increase the +powers of the national banks. I believe that within the limitation of sound +banking principles Congress should now and for the future place the +national banks upon a fair equality with their competitors, the State +banks, and I trust that means may be found so that the differences on +branch-banking legislation between the Senate and the House of +Representatives may be settled along sound lines and the legislation +promptly enacted. +</p> + +<p> +It would be difficult to overestimate the service which the Federal reserve +system has already rendered to the country. It is necessary only to recall +the chaotic condition of our banking organization at the time the Federal +reserve system was put into operation. The old system consisted of a vast +number of independent banking units, with scattered bank reserves which +never could be mobilized in times of greatest need. In spite of vast +banking resources, there was no coordination of reserves or any credit +elasticity. As a consequence, a strain was felt even during crop-moving +periods and when it was necessary to meet other seasonal and regularly +recurring needs. +</p> + +<p> +The Federal reserve system is not a panacea for all economic or financial +ills. It can not prevent depression in certain industries which are +experiencing overexpansion of production or contraction of their markets. +Its business is to furnish adequate credit and currency facilities. This it +has succeeded in doing, both during the war and in the more difficult +period of deflation and readjustment which followed. It enables us to look +to the future with confidence and to make plans far ahead, based on the +belief that the Federal reserve system will exercise a steadying influence +on credit conditions and thereby prevent tiny sudden or severe reactions +from the period of prosperity which we are now enjoying. In order that +these plans may go forward, action should be taken at the present session +on the question of renewing the banks' charters and thereby insuring a +continuation of the policies and present usefulness of the Federal reserve +system. +</p> + +<p> +FEDERAL REGULATION +</p> + +<p> +I am in favor of reducing, rather than expanding, Government bureaus which +seek to regulate and control the business activities of the people. +Everyone is aware that abuses exist and will exist so long as we are +limited by human imperfections. Unfortunately, human nature can not be +changed by an act of the legislature. When practically the sole remedy for +many evils lies in the necessity of the people looking out for themselves +and reforming their own abuses, they will find that they are relying on a +false security if the Government assumes to hold out the promise that it is +looking out for them and providing reforms for them. This principle is +preeminently applicable to the National Government. It is too much assumed +that because an abuse exists it is the business of the National Government +to provide a remedy. The presumption should be that it is the business of +local and State governments. Such national action results in encroaching +upon the salutary independence of the States and by undertaking to +supersede their natural authority fills the land with bureaus and +departments which are undertaking to do what it is impossible for them to +accomplish and brings our whole system of government into disrespect and +disfavor. We ought to maintain high standards. We ought to punish +wrongdoing. Society has not only the privilege but the absolute duty of +protecting itself and its individuals. But we can not accomplish this end +by adopting a wrong method. Permanent success lies in local, rather than +national action. Unless the locality rises to its own requirements, there +is an almost irresistible impulse for the National Government to intervene. +The States and the Nation should both realize that such action is to be +adopted only as a last resort. +</p> + +<p> +THE NEGRO +</p> + +<p> +The social well-being of our country requires our constant effort for the +amelioration of race prejudice and the extension to all elements of equal +opportunity and equal protection under the laws which are guaranteed by +the. Constitution. The Federal Government especially is charged with this +obligation in behalf of the colored people of the Nation. Not only their +remarkable progress, their devotion and their loyalty, but, our duty to +ourselves under our claim that we are an enlightened people requires us to +use all our power to protect them from the crime of lynching. Although +violence of this kind has very much decreased, while any of it remains we +can not justify neglecting to make every effort to eradicate it by law. +</p> + +<p> +The education of the colored race under Government encouragement is +proceeding successfully and ought to have continuing support. An increasing +need exists for properly educated and trained medical skill to be devoted +to the service of this race. +</p> + +<p> +INSULAR POSSESSIONS +</p> + +<p> +This Government holds in sacred trusteeship islands which it has acquired +in the East and West Indies. In all of them the people are more prosperous +than at any previous time. A system of good roads, education, and general +development is in progress. The people are better governed than ever before +and generally content. +</p> + +<p> +In the Philippine Islands Maj. Gen. Leonard Wood has been Governor General +for five years and has administered his office with tact and ability +greatly to the success of the Filipino people. These are a proud and +sensitive race, who are making such progress with our cooperation that we +can view the results of this experiment with great satisfaction. As we are +attempting to assist this race toward self-government, we should look upon +their wishes with great respect, granting their requests immediately when +they are right, yet maintaining a frank firmness in refusing when they are +wrong. We shall measure their progress in no small part by their acceptance +of the terms of the organic law under which the islands are governed and +their faithful observance of its provisions. Need exists for clarifying the +duties of the auditor and declaring them to be what everyone had supposed +they were. We have placed our own expenditures under the supervision of the +Comptroller General. It is not likely that the expenditures in the +Philippine Islands need less supervision than our own. The Governor General +is hampered in his selection of subordinates by the necessity of securing a +confirmation, which has oftentimes driven him to the expediency of using +Army officers in work for which civilian experts would be much better +fitted. Means should be provided for this and such other purposes as he may +require out of the revenue which this Government now turns back to the +Philippine treasury. +</p> + +<p> +In order that these possessions might stiffer no seeming neglect, I have +recently sent Col. Carmi A. Thompson to the islands to make a survey in +cooperation with the Governor General to suggest what might be done to +improve conditions. Later, I may make a more extended report including +recommendations. The economic development of the islands is very important. +They ought not to be turned back to the people until they are both +politically fitted for self-government and economically independent. Large +areas are adaptable to the production of rubber. No one contemplates any +time in the future either under the present or a more independent form of +government when we should not assume some responsibility for their defense. +For their economic advantage, for the employment of their people, and as a +contribution to our power of defense which could not be carried on without +rubber, I believe this industry should be encouraged. It is especially +adapted to the Filipino people themselves, who might cultivate it +individually on a small acreage. It could be carried on extensively by +American capital in a way to furnish employment at good wages. I am opposed +to the promotion of any policy that does not provide for absolute freedom +on the part of the wage earners and do not think we should undertake to +give power for large holdings of land in the islands against the opposition +of the people of the locality. Any development of the islands must be +solely with the first object of benefiting the people of the islands. At an +early day, these possessions should be taken out from under all military +control and administered entirely on the civil side of government. +</p> + +<p> +NATIONAL DEFENSE +</p> + +<p> +Our policy of national defense is not one of making war, but of insuring +peace. The land and sea force of America, both in its domestic and foreign +implications, is distinctly a peace force. It is an arm of the police power +to guarantee order and the execution of the law at home and security to our +citizens abroad. No self-respecting nation would neglect to provide an army +and navy proportionate to its population, the extent of its territory, and +the dignity of the place which it occupies in the world. When it is +considered that no navy in the world, with one exception, approaches ours +and none surpasses it, that our Regular Army of about 115,000 men is the +equal of any other like number of troops, that our entire permanent and +reserve land and sea force trained and training consists of a personnel of +about 610,000, and that our annual appropriations are about $680,000,000 a +year, expended under the direction of an exceedingly competent staff, it +can not be said that our country is neglecting its national defense. It is +true that a cult of disparagement exists, but that candid examination made +by the Congress through its various committees has always reassured the +country and demonstrated that it is maintaining the most adequate defensive +forces in these present years that it has ever supported in time of peace. +</p> + +<p> +This general policy should be kept in effect. Here and there temporary +changes may be made in personnel to meet requirements in other directions. +Attention should be given to submarines, cruisers, and air forces. +Particular points may need strengthening, but as a whole our military power +is sufficient. +</p> + +<p> +The one weak place in the whole line is our still stupendous war debt. In +any modern campaign the dollars are the shock troops. With a depleted +treasury in the rear, no army can maintain itself in the field. A country +loaded with debt is a country devoid of the first line of defense. Economy +is the handmaid of preparedness. If we wish to be able to defend ourselves +to the full extent of our power in the future, we shall discharge as soon +as possible the financial burden of the last war. Otherwise we would face a +crisis with a part of our capital resources already expended. +</p> + +<p> +The amount and kind of our military equipment is preeminently a question +for the decision of the Congress, after giving due consideration to the +advice of military experts and the available public revenue. Nothing is +more laudable than the cooperation of the agricultural and industrial +resources of the country for the purpose of supplying the needs of national +defense. In time of peril the people employed in these interests +volunteered in a most self-sacrificing way, often at the nominal charge of +a dollar a year. But the Army and Navy are not supported for the benefit of +supply concerns; supply concerns are supported for the benefit of the Army +and Navy. The distribution of orders on what is needed from different +concerns for the purpose of keeping up equipment and organization is +perfectly justified, but any attempt to prevail upon the Government to +purchase beyond its needs ought not to be tolerated. It is eminently fair +that those who deal with the Government should do so at a reasonable +profit. However, public money is expended not that some one may profit by +it, but in order to serve a public purpose. +</p> + +<p> +While our policy of national defense will proceed in order that we may be +independent and self-sufficient, I am opposed to engaging in any attempt at +competitive armaments. No matter how much or how little some other country +may feel constrained to provide, we can well afford to set the example, not +of being dictated to by others, but of adopting our own standards. We are +strong enough to pursue that method, which will be a most wholesome model +for the rest of the world. We are eminently peaceful, but we are by no +means weak. While we submit our differences with others, not to the +adjudication of force, but of reason, it is not because we are unable to +defend our rights. While we are doing our best to eliminate all resort to +war for the purpose of settling disputes, we can not but remember that the +peace we now enjoy had to be won by the sword and that if the rights of our +country are to be defended we can not rely for that purpose upon anyone but +ourselves. We can not shirk the responsibility, which is the first +requisite of all government, of preserving its own integrity and +maintaining the rights of its own citizens. It is only in accordance with +these principles that we can establish any lasting foundations for an +honorable and permanent peace. +</p> + +<p> +It is for these reasons that our country, like any other country, proposes +to provide itself with an army and navy supported by a merchant marine. Yet +these are not for competition with any other power. For years we have +besought nations to disarm. We have recently expressed our willingness at +Geneva to enter into treaties for the limitation of all types of warships +according to the ratio adopted at the Washington Conference. This offer is +still pending. While we are and shall continue to be armed it is not as a +menace, but rather a common assurance of tranquility to all the peaceloving +people of the world. For us to do any less would be to disregard our +obligations, evade our responsibilities, and jeopardize our national honor. +</p> + +<p> +VETERANS +</p> + +<p> +This country, not only because it is bound by honor but because of the +satisfaction derived from it, has always lavished its bounty upon its +veterans. For years a service pension has been bestowed upon the Grand Army +on reaching a certain age. Like provision has been made for the survivors +of the Spanish War. A liberal future compensation has been granted to all +the veterans of the World War. But it is in the case of the, disabled and +the dependents that the Government exhibits its greatest solicitude. This +work is being well administered by the Veterans' Bureau. The main +unfinished feature is that of hospitalization. This requirement is being +rapidly met. Various veteran bodies will present to you recommendations +which should have your careful consideration. At the last session we +increased our annual expenditure for pensions and relief on account of the +veterans of three wars. While I approve of proper relief for all suffering, +I do not favor any further extension of our pension system at this time. +</p> + +<p> +ALIEN PROPERTY +</p> + +<p> +We still have in the possession of the Government the alien property. It +has always been the policy of America to hold that private enemy property +should not be confiscated in time of war. This principle we have +scrupulously observed. As this property is security for the claims of our +citizens and our Government, we can not relinquish it without adequate +provision for their reimbursement. Legislation for the return of this +property, accompanied by suitable provisions for the liquidation of the +claims of our citizens and our Treasury, should be adopted. If our +Government releases to foreigners the security which it holds for +Americans, it must at the same time provide satisfactory safeguards for +meeting American claims. +</p> + +<p> +PROHIBITION +</p> + +<p> +The duly authorized public authorities of this country have made +prohibition the law of the land. Acting under the Constitution the Congress +and the legislatures of practically all the, States have adopted +legislation for its enforcement. Some abuses have arisen which require +reform. Under the law the National Government has entrusted to the Treasury +Department the especial duty of regulation and enforcement. Such +supplementary legislation as it requires to meet existing conditions should +be carefully and speedily enacted. Failure to support the Constitution and +observe the law ought not to be tolerated by public opinion. Especially +those in public places, who have taken their oath to support the +Constitution, ought to be most scrupulous in its observance. Officers of +the Department of Justice throughout the country should be vigilant in +enforcing the law, but local authorities, which had always been mainly +responsible for the enforcement of law in relation to intoxicating liquor, +ought not to seek evasion by attempting to shift the burden wholly upon the +Federal agencies. Under the Constitution the States are jointly charged +with the Nation in providing for the enforcement of the prohibition +amendment. Some people do not like the amendment, some do not like other +parts of the Constitution, some do not like any of it. Those who entertain +such sentiments have a perfect right to seek through legal methods for a +change. But for any of our inhabitants to observe such parts of the +Constitution as they like, while disregarding others, is a doctrine that +would break down all protection of life and property and destroy the +American system of ordered liberty. +</p> + +<p> +FOREIGN RELATIONS +</p> + +<p> +The foreign policy of this Government is well known. It is one of peace +based on that mutual respect that arises from mutual regard for +international rights and the discharge of international obligations. It is +our purpose to promote understanding and good will between ourselves and +all other people. The American people are altogether lacking in an +appreciation of the tremendous good fortune that surrounds their +international position. We have no traditional enemies. We are not +embarrassed over any disputed territory. We have no possessions that are +coveted by others; they have none that are coveted by us. Our borders are +unfortified. We fear no one; no one fears us. All the world knows that the +whole extent of our influence is against war and in favor of peace, against +the use of force and in favor of negotiation, arbitration, and adjudication +as a method of adjusting international differences. We look with disfavor +upon all aggressive warfare. We are strong enough so that no one can charge +us with weakness if we are slow to anger. Our place is sufficiently +established so that we need not be sensitive over trifles. Our resources, +are large enough so that we can afford to be generous. At the same time we +are a nation among nations and recognize a responsibility not only to +ourselves, but in the interests of a stable and enlightened civilization, +to protect and defend the international rights of our Government and our +citizens. +</p> + +<p> +It is because of our historical detachment and the generations of +comparative indifference toward it by other nations that our public is +inclined to consider altogether too seriously the reports that we are +criticized abroad. We never had a larger foreign trade than at the present +time. Our good offices were never more sought and the necessity for our +assistance and cooperation was never more universally declared in any time +of peace. We know that the sentiments which we entertain toward all other +nations are those of the most sincere friendship and good will and of all +unbounded desire to help, which we are perfectly willing to have judged by +their fruits. In our efforts to adjust our international obligations we +have met with a response which, when everything is considered, I believe +history will record as a most remarkable and gratifying demonstration of +the sanctity with which civilized nations undertake to discharge their +mutual obligations. Debt settlements have been negotiated with practically +all of those who owed us and all finally adjusted but two, which are, in +process of ratification. When we consider the real sacrifice that will be +necessary on the part of other nations, considering all their +circumstances, to meet their agreed payments, we ought to hold them in +increased admiration and respect. It is true that we have extended to them +very generous treatment, but it is also true that they have agreed to repay +its all that we loaned to them and some interest. +</p> + +<p> +A special conference on the Chinese customs tariff provided for by the +treaty between the nine powers relating to the Chinese customs tariff +signed at Washington on February 6, 1922, was called by the Chinese +Government to meet at Peking, on October 26, 1925. We participated in this +conference through fully empowered delegates and, with good will, +endeavored to cooperate with the other participating powers with a view to +putting into effect promises made to China at the Washington conference, +and considering any reasonable proposal that might be made by the Chinese +Government for the revision of the treaties on the subject of China's +tariff. With these aims in view the American delegation at the outset of +the conference proposed to put into effect the surtaxes provided for by the +Washington treaty and to proceed immediately to the negotiation of a +treaty, which, among other things, was to make provision for the abolition +of taxes collected on goods in transit, remove the tariff restrictions in +existing treaties, and put into effect the national tariff law of China. +</p> + +<p> +Early in April of the present year the central Chinese Government was +ousted from power by opposing warring factions. It became impossible under +the circumstances to continue the negotiations. Finally, on July 3, the +delegates of the foreign powers, including those of the United States, +issued a statement expressing their unanimous and earnest desire to proceed +with the work of the conference at the earliest possible moment when the +delegates of the Chinese Government are in a position to resume discussions +with the foreign delegates of the problems before the conference. We are +prepared to resume the negotiations thus interrupted whenever a Government +representing the Chinese people and acting on their behalf presents itself. +The fact that constant warfare between contending Chinese factions has +rendered it impossible to bring these negotiations to a successful +conclusion is a matter of deep regret. Throughout these conflicts we have +maintained a position of the most careful neutrality. Our naval vessels in +Asiatic waters, pursuant to treaty rights, have been used only for the +protection of American citizens. +</p> + +<p> +Silas H. Strawn, Esq., was sent to China as American commissioner to +cooperate with commissioners of the other powers in the establishment of a +commission to inquire into the present practice of extraterritorial +jurisdiction in China, with a view to reporting to the Governments of the +several powers their findings of fact in regard to these matters. The +commission commenced its work in January, 1926, and agreed upon a joint +report which was signed on September 16, 1926. The commission's report has +been received and is being studied with a view to determining our future +policy in regard to the question of extraterritorial privileges under +treaties between the United States and China. +</p> + +<p> +The Preparatory Commission for the Disarmament Conference met at Geneva on +May 18 and its work has been proceeding almost continuously since that +date. It would be premature to attempt to form a judgment as to the +progress that has been made. The commission has had before it a +comprehensive list of questions touching upon all aspects of the question +of the limitation of armament. In the commission's discussions many +differences of opinion have developed. However, I am hopeful that at least +some measure of agreement will be reached as the discussions continue. The +American representation on the commission has consistently tried to be +helpful, and has kept before it the practical objective to which the +commission is working, namely, actual agreements for the limitation of +armaments. Our representatives will continue their work in that direction. +</p> + +<p> +One of the most encouraging features of the commission's work thus far has +been the agreement in principle among the naval experts of a majority of +the powers parties to the Washington treaty limiting naval armament upon +methods and standards for the comparison and further limitation of naval +armament. It is needless to say that at the proper time I shall be prepared +to proceed along practical lines to the conclusion of agreements carrying +further the work begun at the Washington Conference in 1921. +</p> + +<p> +DEPARTMENT REPORTS +</p> + +<p> +Many important subjects which it is impossible even to mention in the short +space of an annual message you will find fully discussed in the +departmental reports. A failure to include them here is not to be taken as +indicating any lack of interest, but only a disinclination to state +inadequately what has been much better done in other documents. +</p> + +<p> +THE CAPITAL CITY +</p> + +<p> +We are embarking on an ambitious building program for the city of +Washington. The Memorial Bridge is under way with all that it holds for use +and beauty. New buildings are soon contemplated. This program should +represent the best that exists in the art and science of architecture. Into +these structures which must be considered as of a permanent nature ought to +go the aspirations of the Nation, its ideals expressed in forms of beauty. +If our country wishes to compete with others, let it not be in the support +of armaments but in the making of a beautiful capital city. Let it express +the soul of America. Whenever an American is at the seat of his Government, +however traveled and cultured he may be, he ought to find a city of stately +proportion, symmetrically laid out and adorned with the best that there is +in architecture, which would arouse his imagination and stir his patriotic +pride. In the coming years Washington should be not only the art center of +our own country but the art center of the world. Around it should center +all that is best in science, in learning, in letters, and in art. These are +the results that justify the creation of those national resources with +which we have been favored. +</p> + +<p> +AMERICAN IDEALS +</p> + +<p> +America is not and must not be a country without ideals. They are useless +if they are only visionary; they are only valuable if they are practical. A +nation can not dwell constantly on the mountain tops. It has to be +replenished and sustained through the ceaseless toil of the less inspiring +valleys. But its face ought always to be turned upward, its vision ought +always to be fixed on high. +</p> + +<p> +We need ideals that can be followed in daily life, that can be translated +into terms of the home. We can not expect to be relieved from toil, but we +do expect to divest it of degrading conditions. Work is honorable; it is +entitled to an honorable recompense. We must strive mightily, but having +striven there is a defect in our political and social system if we are not +in general rewarded with success. To relieve the land of the burdens that +came from the war, to release to the individual more of the fruits of his +own industry, to increase his earning capacity and decrease his hours of +labor, to enlarge the circle of his vision through good roads and better +transportation, to lace before him the opportunity for education both in +science and in art, to leave him free to receive the inspiration of +religion, all these are ideals which deliver him from the servitude of the +body and exalt him to the service of the soul. Through this emancipation +from the things that are material, we broaden our dominion over the things +that are spiritual. +</p> + +<p><br /><br /><br /></p> + +<p class="t3"> +*** +</p> + +<p><a id="dec1927"></a></p> + +<p class="noindent"> +State of the Union Address<br /> +Calvin Coolidge<br /> +December 6, 1927<br /> +</p> + +<p class="noindent"> +Members of the Congress: +</p> + +<p> +It is gratifying to report that for the fourth consecutive year the state +of the Union in general is good. We are at peace. The country as a whole +has had a prosperity never exceeded. Wages are at their highest range, +employment is plentiful. Some parts of agriculture and industry have +lagged; some localities have suffered from storm and flood. But such losses +have been absorbed without serious detriment to our great economic +structure. Stocks of goods are moderate and a wholesome caution is +prevalent. Rates of interest for industry, agriculture, and government have +been reduced. Savers and investors are providing capital for new +construction in industry and public works. The purchasing power of +agriculture has increased. If the people maintain that confidence which +they are entitled to have in themselves, in each other, and in America, a +comfortable prosperity will continue. +</p> + +<p> +CONSTRUCTIVE ECONOMY +</p> + +<p> +Without constructive economy in Government expenditures we should not now +be enjoying these results or these prospects. Because we are not now +physically at war, some people are disposed to forget that our war debt +still remains. The Nation must make financial sacrifices, accompanied by a +stern self-denial in public expenditures, until we have conquered the +disabilities of our public finance. While our obligation to veterans and +dependents is large and continuing, the heavier burden of the national debt +is being steadily eliminated. At the end of this fiscal year it will be +reduced from about $26,600,000,000 to about $17,975,000,000. Annual +interest, including war savings, will have been reduced from $1,055,000,000 +to $670,0001,000. The sacrifices of the people, the economy of the +Government, are showing remarkable results. They should be continued for +the purpose of relieving the Nation of the burden of interest and debt and +releasing revenue for internal improvements and national development. +</p> + +<p> +Not only the amount, but the rate, of Government interest has been reduced. +Callable bonds have been refunded and paid, so that during this year the +average rate of interest on the present public debt for the first time fell +below 4 per cent. Keeping the credit of the Nation high is a tremendously +profitable operation. +</p> + +<p> +TAX REDUCTION +</p> + +<p> +The immediate fruit of economy and the retirement of the public debt is tax +reduction. The annual saving in interest between 1925 and 1929 is +$212,000,000. Without this no bill to relieve the taxpayers would be worth +proposing. The three measures already enacted leave our Government revenues +where they are not oppressive. Exemptions, have been increased until +115,000,000 people make but 2,500,000 individual taxable returns, so that +further reduction should be mainly for the purpose of removing +inequalities. The Secretary of the Treasury has recommended a measure which +would give us a much better balanced system of taxation and without +oppression produce sufficient revenue. It has my complete support. +</p> + +<p> +Unforeseen contingencies requiring money are always arising. Our probable +surplus for June 30, 1929, is small. A slight depression in business would +greatly reduce our revenue because of our present method of taxation. The +people ought to take no selfish attitude of pressing for removing moderate +and fair taxes which might produce a deficit. We must keep our budget +balanced for each year. That is the corner stone of our national credit, +the trifling price we pay to command the lowest rate of interest of any +great power in the world. Any surplus can be applied to debt reduction, and +debt reduction is tax reduction. Under the present circumstances it would +be far better to leave the rates as they are than to enact a bill carrying +the peril of a deficit. This is not a problem to be approached in a narrow +or partisan spirit. All of those who participate in finding a reasonable +solution will be entitled to participate in any credit that accrues from it +without regard to party. The Congress has already demonstrated that tax +legislation can be removed from purely political consideration into the +realm of patriotic business principles. +</p> + +<p> +Any bill for tax reduction should be written by those who are responsible +for raising, managing, and expending the finances of the Government. If +special interests, too often selfish, always uninformed of the national +needs as a whole, with hired agents using their proposed beneficiaries as +engines of propaganda, are permitted to influence the withdrawal of their +property from taxation, we shall have a law that is unbalanced and unjust, +bad for business, bad for the country, probably resulting in a deficit, +with disastrous financial Consequences. The Constitution has given the +Members of the Congress sole authority to decide what tax measures shall be +presented for approval. While welcoming information from any quarter, the +Congress should continue to exercise its own judgment in a matter so vital +and important to all the interests of the country as taxation. +</p> + +<p> +NATIONAL DEFENSE +</p> + +<p> +Being a nation relying not on force, but on fair dealing and good will, to +maintain peace with others, we have provided a moderate military force in a +form adapted solely to defense. It should be continued with a very generous +supply of officers and with the present base of personnel, subject to +fluctuations which may be temporarily desirable. +</p> + +<p> +The five-year program for our air forces is in keeping with this same +policy and commensurate with the notable contributions of America to the +science of aeronautics. The provisions of the law lately enacted are being +executed as fast as the practical difficulties of an orderly and stable +development permit. +</p> + +<p> +While our Army is small, prudence requires that it should be kept in a high +state of efficiency and provided with such supplies as would permit of its +immediate expansion. The garrison ration has lately been increased. +Recommendations for an appropriation of $6,166,000 for new housing made to +the previous Congress failed to pass. While most of the Army is well +housed, some of it which is quartered in wartime training camps is becoming +poorly housed. In the past three years $12,533,000 have been appropriated +for reconstruction and repairs, and an authorization has been approved of +$22,301,000 for new housing, under which $8,070,000 has already been +appropriated. A law has also been passed, complying with the request of the +War Department, allocating funds received from the sale of buildings and +land for housing purposes. The work, however, is not completed, so that +other appropriations are being recommended. +</p> + +<p> +Our Navy is likewise a weapon of defense. We have a foreign commerce and +ocean lines of trade unsurpassed by any other country. We have outlying +territory in the two great oceans and long stretches of seacoast studded +with the richest cities in the world. We are responsible for the protection +of a large population and the greatest treasure ever bestowed upon any +people. We are charged with an international duty of defending the Panama +Canal. To meet these responsibilities we need a very substantial sea +armament. It needs aircraft development, which is being provided under the +five-year program. It needs submarines as soon as the department decides +upon the best type of construction. It needs airplane carriers and a +material addition to its force of cruisers. We can plan for the future and +begin a moderate building program. +</p> + +<p> +This country has put away the Old World policy of competitive armaments. It +can never be relieved of the responsibility of adequate national defense. +We have one treaty secured by an unprecedented attitude of generosity on +our part for a limitation in naval armament. After most careful +preparation, extending over months, we recently made every effort to secure +a three-power treaty to the same end. We were granted much cooperation by +Japan, but we were unable to come to an agreement with Great Britain. While +the results of the conference were of considerable value, they were mostly +of a negative character. We know now that no agreement can be reached which +will be inconsistent with a considerable building program on our part. We +are ready and willing to continue the preparatory investigations on the +general subject of limitation of armaments which have been started under +the auspices of the League of Nations. +</p> + +<p> +We have a considerable cruiser tonnage, but a part of it is obsolete. +Everyone knew that had a three-power agreement been reached it would have +left us with the necessity of continuing our building program. The failure +to agree should not cause us to build either more or less than we otherwise +should. Any future treaty of limitation will call on us for more ships. We +should enter on no competition. We should refrain from no needful program. +It should be made clear to all the world that lacking a definite agreement, +the attitude of any other country is not to be permitted to alter our own +policy. It should especially be demonstrated that propaganda will not cause +us to change our course. Where there is no treaty limitation, the size of +the Navy which America is to have will be solely for America to determine. +No outside influence should enlarge it or diminish it. But it should be +known to all that our military power holds no threat of aggrandizement. It +is a guaranty of peace and security at home, and when it goes abroad it is +an instrument for the protection of the legal rights of our citizens under +international law, a refuge in time of disorder, and always the servant of +world peace. Wherever our flag goes the rights of humanity increase. +</p> + +<p> +MERCHANT MARINE +</p> + +<p> +The United States Government fleet is transporting a large amount of +freight and reducing its drain on the Treasury. The Shipping Board is +constantly under pressure, to which it too often yields, to protect private +interests, rather than serve the public welfare. More attention should be +given to merchant ships as an auxiliary of the Navy. The possibility of +including their masters and crews in the Naval Reserve, with some +reasonable compensation, should be thoroughly explored as a method of +encouraging private operation of shipping. Public operation is not a +success. No investigation, of which I have caused several to be made, has +failed to report that it could not succeed or to recommend speedy transfer +to private ownership. Our exporters and importers are both indifferent +about using American ships. It should be our policy to keep our present +vessels in repair and dispose of them as rapidly as possible, rather than +undertake any new construction. Their operation is a burden on the National +Treasury, for which we are not receiving sufficient benefits. +</p> + +<p> +COMMERCIAL AVIATION +</p> + +<p> +A rapid growth is taking place in aeronautics. The Department of Commerce +has charge of the inspection and licensing system and the construction of +national airways. Almost 8,000 miles are already completed and about 4,000 +miles more contemplated. Nearly 4,400 miles are now equipped and over 3,000 +miles more will have lighting and emergency landing fields by next July. +Air mail contracts are expected to cover 24 of these lines. Daily airway +flying is nearly 15,000 miles and is expected to reach 25,000 miles early +next year. +</p> + +<p> +Flights for other purposes exceed 22,000 miles each day. Over 900 airports, +completed and uncompleted, have been laid out. The demand for aircraft has +greatly increased. The policy already adopted by the Congress is producing +the sound development of this coming industry. +</p> + +<p> +WESTERN HEMISPHERE AIR MAIL +</p> + +<p> +Private enterprise is showing much interest in opening up aviation service +to Mexico and Central and South America. We are particularly solicitous to +have the United States take a leading part in this development. It is +understood that the governments of our sister countries would be willing to +cooperate. Their physical features, the undeveloped state of their +transportation, make an air service especially adaptable to their usage. +The Post Office Department should be granted power to make liberal +long-term contracts for carrying our mail, and authority should be given to +the Army and the Navy to detail aviators and planes to cooperate with +private enterprise in establishing such mail service with the consent of +the countries concerned. A committee of the Cabinet will later present a +report on this subject. +</p> + +<p> +GOOD ROADS +</p> + +<p> +The importance and benefit of good roads is more and more coming to be +appreciated. The National Government has been making liberal contributions +to encourage their construction. The results and benefits have been very +gratifying. National participation, however, should be confined to +trunk-line systems. The national tax on automobiles is now nearly +sufficient to meet this outlay. This tax is very small, and on low-priced +cars is not more than $2 or $3 each year. +</p> + +<p> +While the advantage of having good roads is very large, the desire for +improved highways is not limited to our own country. It should and does +include all the Western Hemisphere. The principal points in Canada are +already accessible. We ought to lend our encouragement in any way we can +for more good roads to all the principal points in this hemisphere south of +the Rio Grande. It has been our practice to supply these countries with +military and naval advisers, when they have requested it, to assist them in +national defense. The arts of peace are even more important to them and to +us. Authority should be given by law to provide them at their request with +engineering advisers for the construction of roads and bridges. In some of +these countries already wonderful progress is being made in road building, +but the engineering features are often very exacting and the financing +difficult. Private interests should look with favor on all reasonable loans +sought by these countries to open such main lines of travel. +</p> + +<p> +This general subject has been promoted by the Pan American Congress of +Highways, which will convene again at Rio de Janeiro in July, 1928. It is +desirable that the Congress should provide for the appointment of delegates +to represent the Government of the United States. +</p> + +<p> +CUBAN PARCEL POST +</p> + +<p> +We have a temporary parcel-post convention with Cuba. The advantage of it +is all on our side. During 1926 we shipped twelve times as many parcels, +weighing twenty-four times as much, as we received. This convention was +made on the understanding that we would repeal an old law prohibiting the +importation of cigars and cigarettes in quantities less than 3,000 enacted +in 1866 to discourage smuggling, for which it has long been unnecessary. +This law unjustly discriminates against an important industry of Cuba. Its +repeal has been recommended by the Treasury and Post Office Departments. +Unless this is done our merchants and railroads will find themselves +deprived of this large parcel-post business after the 1st of next March, +the date of the expiration of the convention, which has been extended upon +the specific understanding that it would expire at that time unless this +legislation was enacted. We purchase large quantities of tobacco made in +Cuba. It is not probable that our purchases would be any larger if this law +was repealed, while it would be an advantage to many other industries in +the United States. +</p> + +<p> +INSULAR POSSESSIONS +</p> + +<p> +Conditions in the Philippine Islands have been steadily improved. +Contentment and good order prevail. Roads, irrigation works, harbor +improvements, and public buildings are being constructed. Public education +and sanitation have been advanced. The Government is in a sound financial +condition. These immediate results were especially due to the +administration of Gov. Gen. Leonard Wood. The six years of his governorship +marked a distinct improvement in the islands and rank as one of the +outstanding accomplishments of this distinguished man. His death is a loss +to the Nation and the islands. +</p> + +<p> +Greater progress could be made, more efficiency could be put into +administration, if the Congress would undertake to expend, through its +appropriating power, all or a part of the customs revenues which are now +turned over to the Philippine treasury. The powers of the auditor of the +islands also need revision and clarification. The government of the islands +is about 98 per cent in the hands of the Filipinos. An extension of the +policy of self-government will be hastened by the demonstration on their +part of their desire and their ability to carry out cordially and +efficiently the provisions of the organic law enacted by the Congress for +the government of the islands. It would be well for a committee of the +Congress to visit the islands every two years. +</p> + +<p> +A fair degree of progress is being made in Porto Rico. Its agricultural +products are increasing; its treasury position, which has given much +concern, shows improvement. I am advised by the governor that educational +facilities are still lacking. Roads are being constructed, which he +represents are the first requisite for building schoolhouses. The loyalty +of the island to the United States is exceedingly gratifying. A memorial +will be presented to you requesting authority to have the governor elected +by the people of Porto Rico. This was never done in the case of our own +Territories. It is admitted that education outside of the towns is as yet +very deficient. Until it has progressed further the efficiency of the +government and the happiness of the people may need the guiding hand of an +appointed governor. As it is not contemplated that any change should be +made immediately, the general subject may well have the thoughtful study of +the Congress. +</p> + +<p> +PANAMA CANAL +</p> + +<p> +The number of commercial ships passing through the Panama Canal has +increased from 3,967 in 1923 to 5,475 in 1927. The total amount of tolls +turned into the Treasury is over $166,000,000, while all the operations of +the canal have yielded a surplus of about $80,000,000. In order to provide +additional storage of water and give some control over the floods of the +Chagres River, it is proposed to erect a dam to cost about $12,000,000 at +Alhajuela. It will take some five years to complete this work. +</p> + +<p> +AGRICULTURE +</p> + +<p> +The past year has seen a marked improvement in the general condition of +agriculture. Production is better balanced and without acute shortage or +heavy surplus. Costs have been reduced and the average output of the worker +increased. The level of farm prices has risen while others have fallen, so +that the purchasing power of the farmer is approaching a normal figure. The +individual farmer is entitled to great credit for the progress made since +1921. He has adjusted his production and through cooperative organizations +and other methods improved his marketing. He is using authenticated facts +and employing sound methods which other industries are obliged to use to +secure stability and prosperity. The old-fashioned haphazard system is +being abandoned, economics are being applied to ascertain the best adapted +unit of land, diversification is being promoted, and scientific methods are +being used in production, and business principles in marketing. +</p> + +<p> +Agriculture has not fully recovered from postwar depression. The fact is +that economic progress never marches forward in a straight line. It goes in +waves. One part goes ahead, while another halts and another recedes. +Everybody wishes agriculture to prosper. Any sound and workable proposal to +help the farmer will have the earnest support of the Government. Their +interests are not all identical. Legislation should assist as many +producers in as many regions as possible. It should be the aim to assist +the farmer to work out his own salvation socially and economically. No plan +will be of any permanent value to him which does not leave him standing on +his own foundation. +</p> + +<p> +In the past the Government has spent vast sums to bring land under +cultivation. It is apparent that this has reached temporarily the +saturation point. We have had a surplus of production and a poor market for +land, which has only lately shown signs of improvement. The main problem +which is presented for solution is one of dealing with a surplus of +production. It is useless to propose a temporary expedient. What is needed +is permanency and stability. Government price fixing is known to be unsound +and bound to result in disaster. A Government subsidy would work out in the +same way. It can not be sound for all of the people to hire some of the +people to produce a crop which neither the producers nor the rest of the +people want. +</p> + +<p> +Price fixing and subsidy will both increase the surplus, instead of +diminishing it. Putting the Government directly into business is merely a +combination of subsidy and price fixing aggravated by political pressure. +These expedients would lead logically to telling the farmer by law what and +how much he should plant and where he should plant it, and what and how +much he should sell and where he should sell it. The most effective means +of dealing with surplus crops is to reduce the surplus acreage. While this +can not be done by the individual farmer, it can be done through the +organizations already in existence, through the information published by +the Department of Agriculture, and especially through banks and others who +supply credit refusing to finance an acreage manifestly too large. +</p> + +<p> +It is impossible to provide by law for an assured success and prosperity +for all those who engage in farming. If acreage becomes overextended, the +Government can not assume responsibility for it. The Government can, +however, assist cooperative associations and other organizations in orderly +marketing and handling a surplus clearly due to weather and seasonal +conditions, in order to save the producer from preventable loss. While it +is probably impossible to secure this result at a single step, and much +will have to be worked out by trial and rejection, a beginning could be +made by setting up a Federal board or commission of able and experienced +men in marketing, granting equal advantages under this board to the various +agricultural commodities and sections of the country, giving encouragement +to the cooperative movement in agriculture, and providing a revolving loan +fund at a moderate rate of interest for the necessary financing. Such +legislation would lay the foundation for a permanent solution of the +surplus problem. +</p> + +<p> +This is not a proposal to lend more money to the farmer, who is already +fairly well financed, but to lend money temporarily to experimental +marketing associations which will no doubt ultimately be financed by the +regularly established banks, as were the temporary operations of the War +Finance Corporation. Cooperative marketing especially would be provided +with means of buying or building physical properties. +</p> + +<p> +The National Government has almost entirely relieved the farmer from income +taxes by successive tax reductions, but State and local taxes have +increased, putting on him a grievous burden. A policy of rigid economy +should be applied to State and local expenditures. This is clearly within +the legislative domain of the States. The Federal Government has also +improved our banking structure and system of agricultural credits. The +farmer will be greatly benefited by similar action in many States. The +Department of Agriculture is undergoing changes in organization in order +more completely to separate the research and regulatory divisions, that +each may be better administered. More emphasis is being placed on the +research program, not only by enlarging the appropriations for State +experiment stations but by providing funds for expanding the research work +of the department. It is in this direction that much future progress can be +expected. +</p> + +<p> +THE PROTECTIVE TARIFF +</p> + +<p> +The present tariff rates supply the National Treasury with well over +$600,000,000 of annual revenue. Yet, about 65 per cent of our imports come +in duty free. Of the remaining 35 per cent of imports on which duties are +laid about 23 per cent consists of luxuries and agricultural products, and +the balance of about 12 per cent, amounting, to around $560,000,000 is made +up of manufactures and merchandise. As no one is advocating any material +reduction in the rates on agriculture or luxuries, it is only the +comparatively small amount of about $560,000,000 of other imports that are +really considered in any discussion of reducing tariff rates. While this +amount, duty free, would be large enough seriously to depress many lines of +business in our own country, it is of small importance when spread over the +rest of the world. +</p> + +<p> +It is often stated that a reduction of tariff rates on industry would +benefit agriculture. It would be interesting to know to what commodities it +is thought this could be applied. Everything the farmer uses in farming is +already on the free list. Nearly everything he sells is protected. It would +seem to be obvious that it is better for the country to have the farmer +raise food to supply the domestic manufacturer than the foreign +manufacturer. In one case our country would have only the farmer; in the +other it would have the farmer and the manufacturer. Assuming that Europe +would have more money if it sold us larger amounts of merchandise, it is +not certain it would consume more food, or, if it did, that its purchases +would be made in this country. Undoubtedly it would resort to the cheapest +market, which is by no means ours. The largest and best and most profitable +market for the farmer in the world is our own domestic market. Any great +increase in manufactured imports means the closing of our own plants. +Nothing would be worse for agriculture. +</p> + +<p> +Probably no one expects a material reduction in the rates on manufactures +while maintaining the rates on agriculture. A material reduction in either +would be disastrous to the farmer. It would mean a general shrinkage of +values, a deflation of prices, a reduction of wages, a general depression +carrying our people down to the low standard of living in our competing +countries. It is obvious that this would not improve but destroy our market +for imports, which is best served by maintaining our present high +purchasing power under which in the past five years imports have increased +63 per cent. +</p> + +<p> +FARM LOAN SYSTEM +</p> + +<p> +It is exceedingly important that the Federal land and joint-stock land +banks should furnish the best possible service for agriculture. Certain +joint-stock banks have fallen into improper and unsound practices, +resulting in the indictment of the officials of three of them. More money +has been provided for examinations, and at the instance of the Treasury +rules and regulations of the Federal Farm Board have been revised. Early +last May three of its members resigned. Their places were filled with men +connected with the War Finance Corporation. Eugene Meyer being designated +as Farm Loan Commissioner. The new members have demonstrated their ability +in the field of agricultural finance in the extensive operations of he War +Finance Corporation. Three joint-stock banks have gone into receivership. +It is necessary to preserve the public confidence in this system in order +to find a market for their bonds. A recent flotation was made at a record +low rate of 4 per cent. Careful supervision is absolutely necessary to +protect the investor and enable these banks to exercise their chief +function in serving agriculture. +</p> + +<p> +MUSCLE SHOALS +</p> + +<p> +The last year has seen considerable changes in the problem of Muscle +Shoals. Development of other methods show that nitrates can probably be +produced at less cost than by the use of hydroelectric power. Extensive +investigation made by the Department of War indicates that the nitrate +plants on this project are of little value for national defense and can +probably be disposed of within two years. The oxidation part of the plants, +however, should be retained indefinitely. This leaves this project mostly +concerned with power. It should, nevertheless, continue to be dedicated to +agriculture. It is probable that this desire can be best served by +disposing of the plant and applying the revenues received from it to +research for methods of more economical production of concentrated +fertilizer and to demonstrations and other methods of stimulating its use +on the farm. But in disposing of the property preference should be given to +proposals to use all or part of it for nitrate production and fertilizer +manufacturing. +</p> + +<p> +FLOOD CONTROL +</p> + +<p> +For many years the Federal Government has been building a system of dikes +along the Mississippi River for protection against high water. During the +past season the lower States were overcome by a most disastrous flood. Many +thousands of square miles were inundated a great many lives were lost, much +livestock was drowned, and a very heavy destruction of property was +inflicted upon the inhabitants. The American Red Cross at once went to the +relief of the stricken communities. Appeals for contributions have brought +in over $17,000,000. The Federal Government has provided services, +equipment, and supplies probably amounting to about $7,000,000 more. +Between $5,000,000 and $10,000,000 in addition have been provided by local +railroads, the States, and their political units. Credits have been +arranged by the Farm Loan Board, and three emergency finance corporations +with a total capital of $3,000,000 have insured additional resources to the +extent of $12,000,000. Through these means the 700,000 people in the +flooded areas have been adequately supported. Provision has been made to +care for those in need until after the 1st of January. +</p> + +<p> +The Engineering Corps of the Army has contracted to close all breaks in the +dike system before the next season of high water. A most thorough and +elaborate survey of the whole situation has been made and embodied in a +report with recommendations for future flood control, which will be +presented to the Congress. The carrying out of their plans will necessarily +extend over a series of years. They will call for a raising and +strengthening of the dike system with provision for emergency spillway's +and improvements for the benefit of navigation. +</p> + +<p> +Under the present law the land adjacent to the dikes has paid one-third of +the cost of their construction. This has been a most extraordinary +concession from the plan adopted in relation to irrigation, where the +general rule has been that the land benefited should bear the entire +expense. It is true, of course, that the troublesome waters do not +originate on the land to be reclaimed, but it is also true that such waters +have a right of way through that section of the country and the land there +is charged with that easement. It is the land of this region that is to be +benefited. To say that it is unable to bear any expense of reclamation is +the same thing as saying that it is not worth reclaiming. Because of +expenses incurred and charges already held against this land, it seems +probable that some revision will have to be made concerning the proportion +of cost which it should bear. But it is extremely important that it should +pay enough so that those requesting improvements will be charged with some +responsibility for their cost, and the neighborhood where works are +constructed have a pecuniary interest in preventing waste and extravagance +and securing a wise and economical expenditure of public funds. +</p> + +<p> +It is necessary to look upon this emergency as a national disaster. It has +been so treated from its inception. Our whole people have provided with +great generosity for its relief. Most of the departments of the Federal +Government have been engaged in the same effort. The governments of the +afflicted areas, both State and municipal, can not be given too high praise +for the courageous and helpful way in which they have come to the rescue of +the people. If the sources directly chargeable can not meet the demand, the +National Government should not fail to provide generous relief. This, +however, does not mean restoration. The Government is not an insurer of its +citizens against the hazard of the elements. We shall always have flood and +drought, heat and cold, earthquake and wind, lightning and tidal wave, +which are all too constant in their afflictions. The Government does not +undertake to reimburse its citizens for loss and damage incurred under such +circumstances. It is chargeable, however, with the rebuilding of public +works and the humanitarian duty of relieving its citizens from distress. +</p> + +<p> +The people in the flooded area and their representatives have approached +this problem in the most generous and broad-minded way. They should be met +with a like spirit on the part of the National government. This is all one +country. The public needs of each part must be provided for by the public +at large. No required relief should be refused. An adequate plan should be +adopted to prevent a recurrence of this disaster in order that the people +may restore to productivity and comfort their fields and their towns. +</p> + +<p> +Legislation by this Congress should be confined to our principal and most +pressing problem, the lower Mississippi, considering tributaries only so +far as they materially affect the main flood problem. A definite Federal +program relating to our waterways was proposed when the last Congress +authorized a comprehensive survey of all the important streams of the +country in order to provide for their improvement, including flood control, +navigation, power, and irrigation. Other legislation should wait pending a +report on this survey. The recognized needs of the Mississippi should not +be made a vehicle for carrying other projects. All proposals for +development should stand on their own merits. Any other method would result +in ill-advised conclusions, great waste of money, and instead of promoting +would delay the orderly and certain utilization of our water resources. +</p> + +<p> +Very recently several of the New England States have suffered somewhat +similarly from heavy rainfall and high water. No reliable estimate of +damage has yet been computed, but it is very large to private and public +property. The Red Cross is generously undertaking what is needed for +immediate relief, repair and reconstruction of houses, restocking of +domestic animals, and food, clothing, and shelter. A considerable sum of +money will be available through the regular channels in the Department of +Agriculture for reconstruction of highways. It may be necessary to grant +special aid for this purpose. Complete reports of what is required will +undoubtedly be available early in the session. +</p> + +<p> +INLAND NAVIGATION +</p> + +<p> +The Congress in its last session authorized the general improvements +necessary to provide the Mississippi waterway system with better +transportation. Stabilization of the levels of the Great Lakes and their +opening to the sea by an effective shipway remain to be considered. Since +the last session the Board of Engineers of the War Department has made a +report on the proposal for a canal through the State of New York, and the +Joint Board of Engineers, representing Canada and the United States, has +finished a report on the St. Lawrence River. Both of these boards conclude +that the St. Lawrence project is cheaper, affords a more expeditious method +of placing western products in European markets, and will cost less to +operate. The State Department has requested the Canadian Government to +negotiate treaties necessary to provide for this improvement. It will also +be necessary to secure an agreement with Canada to put in works necessary +to prevent fluctuation in the levels of the Great Lakes. +</p> + +<p> +Legislation is desirable for the construction of a dam at Boulder Canyon on +the Colorado River, primarily as a method of flood control and irrigation. +A secondary result would be a considerable power development and a source +of domestic water supply for southern California. Flood control is clearly +a national problem, and water supply is a Government problem, but every +other possibility should be exhausted before the Federal Government becomes +engaged in the power business. The States which are interested ought to +reach mutual agreement. This project is in reality their work. If they wish +the Federal Government to undertake it, they should not hesitate to make +the necessary concessions to each other. This subject is fully discussed in +the annual report of the Secretary of the Interior. The Columbia River +Basin project is being studied and will be one to be considered at some +future time. +</p> + +<p> +The Inland Waterways Corporation is proving successful and especially +beneficial to agriculture. A survey is being made to determine its future +needs. It has never been contemplated that if inland rivers were opened to +navigation it would then be necessary for the Federal Government to provide +the navigation. Such a request is very nearly the equivalent of a +declaration that their navigation is not profitable, that the commodities +which they are to carry can be taken at a cheaper rate by some other +method, in which case the hundreds of millions of dollars proposed to be +expended for opening rivers to navigation would be not only wasted, but +would entail further constant expenditures to carry the commodities of +private persons for less than cost. +</p> + +<p> +The policy is well established that the Government should open public +highways on land and on water, but for use of the public in their private +capacity. It has put on some demonstration barge lines, but always with the +expectation that if they prove profitable they would pass into private +hands and if they do not prove profitable they will be withdrawn. The +problems of transportation over inland waterways should be taken up by +private enterprise, so that the public will have the advantage of +competition in service. It is expected that some of our lines can be sold, +some more demonstration work done, and that with the completion of the Ohio +project a policy of private operation can be fully developed. +</p> + +<p> +PROHIBITION +</p> + +<p> +After more than two generations of constant debate, our country adopted a +system of national prohibition under all the solemnities involved in an +amendment to the Federal Constitution. In obedience to this mandate the +Congress and the States, with one or two notable exceptions, have passed +required laws for its administration and enforcement. This imposes upon the +citizenship of the country, and especially on all public officers, not only +the duty to enforce, but the obligation to observe the sanctions of this +constitutional provision and its resulting laws. If this condition could be +secured, all question concerning prohibition would cease. The Federal +Government is making every effort to accomplish these results through +careful organization, large appropriations, and administrative effort. +Smuggling has been greatly cut down, the larger sources of supply for +illegal sale have been checked, and by means of injunction and criminal +prosecution the process of enforcement is being applied. The same vigilance +on the part of local governments would render these efforts much more +successful. The Federal authorities propose to discharge their obligation +for enforcement to the full extent of their ability. +</p> + +<p> +THE NEGRO +</p> + +<p> +History does not anywhere record so much progress made in the same length +of time as that which has been accomplished by the Negro race in the United +States since the Emancipation Proclamation. They have come up from slavery +to be prominent in education, the professions, art, science, agriculture, +banking, and commerce. It is estimated that 50,000 of them are on the +Government pay rolls, drawing about $50,000,000 each year. They have been +the recipients of presidential appointments and their professional ability +has arisen to a sufficiently high plane so that they have been intrusted +with the entire management and control of the great veterans hospital at +Tuskegee, where their conduct has taken high rank. They have shown that +they have been worthy of all the encouragement which they have received. +Nevertheless, they are too often subjected to thoughtless and inconsiderate +treatment, unworthy alike of the white or colored races. They have +especially been made the target of the foul crime of lynching. For several +years these acts of unlawful violence had been diminishing. In the last +year they have shown an increase. Every principle of order and law and +liberty is opposed to this crime. The Congress should enact any legislation +it can under the Constitution to provide for its elimination. +</p> + +<p> +AMERICAN INDIAN +</p> + +<p> +The condition of the American Indian has much improved in recent years. +Full citizenship was bestowed upon them on June 2, 1924, and appropriations +for their care and advancement have been increased. Still there remains +much to be done. +</p> + +<p> +Notable increases in appropriations for the several major functions +performed by the Department of the Interior on behalf of the Indians have +marked the last five years. In that time, successive annual increases in +appropriations for their education total $1,804,325; for medical care, +$578,000; and for industrial advancement, $205,000; or $2,582,325 more than +would have been spent in the same period on the basis of appropriations for +1923 and the preceding years. +</p> + +<p> +The needs along health, educational, industrial and social lines however, +are great, and the Budget estimates for 1929 include still further +increases for Indian administration. +</p> + +<p> +To advance the time when the Indians may become self-sustaining, it is my +belief that the Federal Government should continue to improve the +facilities for their care, and as rapidly as possible turn its +responsibility over to the States. +</p> + +<p> +COAL +</p> + +<p> +Legislation authorizing a system of fuel administration and the appointment +by the President of a Board of Mediation and Conciliation in case of actual +or threatened interruption of production is needed. The miners themselves +are now seeking information and action from the Government, which could +readily be secured through such a board. It is believed that a thorough +investigation and reconsideration of this proposed policy by the Congress +will demonstrate that this recommendation is sound and should be adopted. +</p> + +<p> +PETROLEUM CONSERVATION +</p> + +<p> +The National Government is undertaking to join in the formation of a +cooperative committee of lawyers, engineers, and public officers, to +consider what legislation by the States or by the Congress can be adopted +for the preservation and conservation of our supply of petroleum. This has +come to be one of the main dependencies for transportation and power so +necessary to our agricultural and industrial life. It is expected the +report of this committee will be available for later congressional action. +Meantime, the requirement that the Secretary of the Interior should make +certain leases of land belonging to the Osage Indians, in accordance with +the act of March 3, 1921, should be repealed. The authority to lease should +be discretionary, in order that the property of the Indians way not be +wasted and the public suffer a future lack of supply. +</p> + +<p> +ALIEN PROPERTY +</p> + +<p> +Under treaty the property held by the Alien Property Custodian was to be +retained until suitable provision had been made for the satisfaction of +American claims. While still protecting the American claimants, in order to +afford every possible accommodation to the nationals of the countries whose +property was held, the Congress has made liberal provision for the return +of a larger part of the property. All trusts under $10,000 were returned in +full, and partial returns were made on the others. The total returned was +approximately $350,000,000. +</p> + +<p> +There is still retained, however, about $250,000,000. The Mixed Claims +Commission has made such progress in the adjudication of claims that +legislation can now be enacted providing for the return of the property, +which should be done under conditions which will protect our Government and +our claimants. Such a measure will be proposed, and I recommend its +enactment. +</p> + +<p> +RAILROAD CONSOLIDATION +</p> + +<p> +In order to increase the efficiency of transportation and decrease its cost +to the shipper, railroad consolidation must be secured. Legislation is +needed to simplify the necessary procedure to secure such agreements and +arrangements for consolidation, always under the control and with the +approval of the Interstate Commerce Commission. Pending this, no adequate +or permanent reorganization can be made of the freight-rate structure. +Meantime, both agriculture and industry are compelled to wait for needed +relief. This is purely a business question, which should be stripped of all +local and partisan bias and decided on broad principles and its merits in +order to promote the public welfare. A large amount of new construction and +equipment, which will furnish employment for labor and markets for +commodities of both factory and farm, wait on the decision of this +important question. Delay is holding back the progress of our country. +</p> + +<p> +Many of the same arguments are applicable to the consolidation of the +Washington traction companies. +</p> + +<p> +VETERANS +</p> + +<p> +The care which this country has lavished on its veterans is known of all +men. The yearly outlay for this purpose is about $750,000,000, or about the +cost of running the Federal Government, outside of the Post Office +Department, before the World War. The Congress will have before it +recommendations of the American Legion, the Veterans of Foreign Wars, and +other like organizations, which should receive candid consideration. We +should continue to foster our system of compensation and rehabilitation, +and provide hospitals and insurance. The magnitude of the undertaking is +already so large that all requests calling for further expenditure should +have the most searching scrutiny. Our present system of pensions is already +sufficiently liberal. It was increased by the last Congress for Civil and +Spanish War veterans and widows and for some dependents. +</p> + +<p> +It has been suggested that the various governmental agencies now dealing +with veterans' relief be consolidated. This would bring many advantages. It +is recommended that the proper committees of the Congress make a thorough +survey of this subject, in order to determine if legislation to secure such +consolidation is desirable. +</p> + +<p> +EDUCATION +</p> + +<p> +For many years it has been the policy of the Federal Government to +encourage and foster the cause of education. Large sums of money are +annually appropriated to carry on vocational training. Many millions go +into agricultural schools. The general subject is under the immediate +direction of a Commissioner of Education. While this subject is strictly a +State and local function, it should continue to have the encouragement of +the National Government. I am still of the opinion that much good could be +accomplished through the establishment of a Department of Education and +Relief, into which would be gathered all of these functions under one +directing member of the Cabinet. +</p> + +<p> +DEPARTMENT OF LABOR +</p> + +<p> +Industrial relations have never been more peaceful. In recent months they +have suffered from only one serious controversy. In all others difficulties +have been adjusted, both management and labor wishing to settle +controversies by friendly agreement rather than by compulsion. The welfare +of women and children is being especially guarded by our Department of +Labor. Its Children's Bureau is in cooperation with 26 State boards and 80 +juvenile courts. +</p> + +<p> +Through its Bureau of Immigration it has been found that medical +examination abroad has saved prospective immigrants from much hardship. +Some further legislation to provide for reuniting families when either the +husband or the wife is in this country, and granting more freedom for the +migration of the North American Indian tribes is desirable. +</p> + +<p> +The United States Employment Service has enabled about 2,000,000 men and +women to gain paying positions in the last fiscal year. Particular +attention has been given to assisting men past middle life and in providing +field labor for harvesting agricultural crops. This has been made possible +in part through the service of the Federal Board for Vocational Education, +which is cooperating with the States in a program to increase the technical +knowledge and skill of the wage earner. +</p> + +<p> +PUBLIC BUILDINGS +</p> + +<p> +Construction is under way in the country and ground has been broken for +carrying out a public-building program for Washington. We have reached a +time when not only the conveniences but the architectural beauty of the +public buildings of the Capital City should be given much attention. It +will be necessary to purchase further land and provide the required +continuing appropriations. +</p> + +<p> +HISTORICAL CELEBRATIONS +</p> + +<p> +Provision is being made to commemorate the two hundredth anniversary of the +birth of George Washington. Suggestion has been made for the construction +of a memorial road leading from the Capital to Mount Vernon, which may well +have the consideration of the Congress, and the commission intrusted with +preparations for the celebration will undoubtedly recommend publication of +the complete writings of Washington and a series of writings by different +authors relating to him. +</p> + +<p> +February 25, 1929. is the one hundred and fiftieth anniversary of the +capture of Fort Sackville, at Vincennes, in the State of Indiana. This +eventually brought into the Union what was known as the Northwest +Territory, embracing the region north of the Ohio River between the +Alleghenies and the Mississippi River. This expedition was led by George +Rogers Clark. His heroic character and the importance of his victory are +too little known and understood. They gave us not only this Northwest +Territory but by means of that the prospect of reaching the Pacific. The +State of Indiana is proposing to dedicate the site of Fort Sackville as a +national shrine. The Federal Government may well make some provision for +the erection under its own management of a fitting memorial at that point. +</p> + +<p> +FOREIGN RELATIONS +</p> + +<p> +It is the policy of the United States to promote peace. We are a peaceful +people and committed to the settling of disputes by amicable adjustment +rather than by force. We have believed that peace can best be secured by a +faithful observance on our part of the principles of international law, +accompanied by patience and conciliation, and requiring of others a like +treatment for ourselves. We have lately had some difference with Mexico +relative to the injuries inflicted upon our nationals and their property +within that country. A firm adherence to our rights and a scrupulous +respect for the sovereignty of Mexico, both in accordance with the law of +nations, coupled with patience and forbearance, it is hoped will resolve +all our differences without interfering with the friendly relationship +between the two Governments. +</p> + +<p> +We have been compelled to send naval and marine forces to China to protect +the lives and property of our citizens. Fortunately their simple presence +there has been sufficient to prevent any material loss of life. But there +has been considerable loss of property. That unhappy country is torn by +factions and revolutions which bid fair to last for an indefinite period. +Meanwhile we are protecting our citizens and stand ready to cooperate with +any government which may emerge in promoting the welfare of the people of +China. They have always had our friendship, and they should especially +merit our consideration in these days of their distraction and distress. +</p> + +<p> +We were confronted by similar condition on a small scale in Nicaragua. Our +marine and naval forces protected our citizens and their property and +prevented a heavy sacrifice of life and the destruction of that country by +a reversion to a state of revolution. Henry L. Stimson, former Secretary of +War, was sent there to cooperate with our diplomatic and military officers +in effecting a settlement between the contending parties. This was done on +the assurance that we would cooperate in restoring a state of peace where +our rights would be protected by giving our assistance in the conduct of +the next presidential election, which occurs in a few months. With this +assurance the population returned to their peacetime pursuits, with the +exception of some small roving bands of outlaws. +</p> + +<p> +In general, our relations with other countries can be said to have improved +within the year. While having a due regard for our own affairs, the +protection of our own rights, and the advancement of our own people, we can +afford to be liberal toward others. Our example has become of great +importance in the world. It is recognized that we are independent, +detached, and can and do take a disinterested position in relation to +international affairs. Our charity embraces the earth. Our trade is far +flung. Our financial favors are widespread. Those who are peaceful and +law-abiding realize that not only have they nothing to fear from us, but +that they can rely on our moral support. Proposals for promoting the peace +of the world will have careful consideration. But we are not a people who +are always seeking for a sign. We know that peace comes from honesty and +fair dealing, from moderation, and a generous regard for the rights of +others. The heart of the Nation is more important than treaties. A spirit +of generous consideration is a more certain defense than great armaments. +We should continue to promote peace by our example, and fortify it by such +international covenants against war as we are permitted under our +Constitution to make. +</p> + +<p> +AMERICAN PROGRESS +</p> + +<p> +Our country has made much progress. But it has taken, and will continue to +take, much effort. Competition will be keen, the temptation to selfishness +and arrogance will be severe, the provocations to deal harshly with weaker +peoples will be many. All of these are embraced in the opportunity for true +greatness. They will be overbalanced by cooperation by generosity, and a +spirit of neighborly kindness. The forces of the universe are taking +humanity in that direction. In doing good, in walking humbly, in sustaining +its own people in ministering to other nations, America will work out its +own mighty destiny. +</p> + +<p><br /><br /><br /></p> + +<p class="t3"> +*** +</p> + +<p><a id="dec1928"></a></p> + +<p class="noindent"> +State of the Union Address<br /> +Calvin Coolidge<br /> +December 4, 1928<br /> +</p> + +<p class="noindent"> +To the Congress of the United States: +</p> + +<p> +No Congress of the United States ever assembled, on surveying the state of +the Union, has met with a more pleasing prospect than that which appears at +the present time. In the domestic field there is tranquility and +contentment, harmonious relations between management and wage earner, +freedom from industrial strife, and the highest record of years of +prosperity. In the foreign field there is peace, the good will which comes +from mutual understanding, and the knowledge that the problems which a +short time ago appeared so ominous are yielding to the touch of manifest +friendship. The great wealth created by our enterprise and industry, and +saved by our economy, has had the widest distribution among our own people, +and has gone out in a steady stream to serve the charity and the business +of the world. The requirements of existence have passed beyond the standard +of necessity into the region of luxury. Enlarging production is consumed by +an increasing demand at home and an expanding commerce abroad. The country +can regard the present with satisfaction and anticipate the future with +optimism. +</p> + +<p> +The main source of these unexampled blessings lies in the integrity and +character of the American people. They have had great faith, which they +have supplemented with mighty works. They have been able to put trust in +each other and trust in their Government. Their candor in dealing with +foreign governments has commanded respect and confidence. Yet these +remarkable powers would have been exerted almost in vain without the +constant cooperation and careful administration of the Federal Government. +</p> + +<p> +We have been coming into a period which may be fairly characterized as a +conservation of our national resources. Wastefulness in public business and +private enterprise has been displaced by constructive economy. This has +been accomplished by bringing our domestic and foreign relations more and +more under a reign of law. A rule of force has been giving way to a rule of +reason. We have substituted for the vicious circle of increasing +expenditures, increasing tax rates, and diminishing profits the charmed +circle of diminishing expenditures, diminishing tax rates, and increasing +profits. +</p> + +<p> +Four times we have made a drastic revision of our internal revenue system, +abolishing many taxes and substantially reducing almost all others. Each +time the resulting stimulation to business has so increased taxable incomes +and profits that a surplus has been reduced. One-third of the national +debt has been paid, while much of the other two-thirds has been refunded at +lower rates, and these savings of interest and constant economies have +enabled us to repeat the satisfying process of more tax reductions. Under +this sound and healthful encouragement the national income has increased +nearly 50 per cent, until it is estimated to stand well over +$90,000,000,000. It gas been a method which has performed the seeming +miracle of leaving a much greater percentage of earnings in the hands of +the taxpayers with scarcely any diminution of the Government revenue. That +is constructive economy in the highest degree. It is the corner stone of +prosperity. It should not fail to be continued. +</p> + +<p> +This action began by the application of economy to public expenditure. If +it is to be permanent, it must be made so by the repeated application of +economy. There is no surplus on which to base further tax revision at this +time. Last June the estimates showed a threatened deficit for the current +fiscal year of $94,000,000. Under my direction the departments began saving +all they could out of their present appropriations. The last tax reduction +brought an encouraging improvement in business, beginning early in +October, which will also increase our revenue. The combination of economy +and good times now indicates a surplus of about $37,000,000. This is a +margin of less than I percent on out, expenditures and makes it obvious +that the Treasury is in no condition to undertake increases in expenditures +to be made before June 30. It is necessary therefore during the present +session to refrain from new appropriations for immediate outlay, or if such +are absolutely required to provide for them by new revenue; otherwise, we +shall reach the end of the year with the unthinkable result of an unbalanced +budget. For the first time during my term of office we face that +contingency. I am certain that the Congress would not pass and I should not +feel warranted in approving legislation which would involve us in that +financial disgrace. +</p> + +<p> +On the whole the finances of the Government are most satisfactory. Last +year the national debt was reduced about $906,000,000. The refunding and +retirement of the second and third Liberty loans have just been brought to +a successful conclusion, which will save about $75,000,000 a year in +interest. The unpaid balance has been arranged in maturities convenient +for carrying out our permanent debt-paying Program. +</p> + +<p> +The enormous savings made have not been at the expense of any legitimate +public need. The Government plant has been kept up and many improvements +are tinder way, while its service is fully manned and the general +efficiency of operation has increased. We have been enabled to undertake +many new enterprises. Among these are the adjusted compensation of the +veterans of the World War, which is costing us $112,000,000 a year; +amortizing our liability to the civil service retirement funds, +$20,000,000; increase of expenditures for rivers and harbors including +flood control, $43,000,000; public buildings, $47,000,000. In 1928 we spent +$50,000,000 in the adjustment of war claims and alien property. These are +examples of a large list of items. +</p> + +<p> +FOREIGN RELATIONS +</p> + +<p> +When we turn from our domestic affairs to our foreign relations, we +likewise perceive peace and progress. The Sixth International Conference of +American States was held at Habana last winter. It contributed to a better +understanding and cooperation among the nations'. Eleven important +conventions were signed and 71 resolutions passed. Pursuant to the plan +then adopted, this Government has invited the other 20 nations of this +hemisphere to it conference on conciliation and arbitration, which meets in +Washington on December 10. All the nations have accepted and the +expectation is justified that important progress will be made in methods +for resolving international differences by means of arbitration. +</p> + +<p> +During the year we have signed 11 new arbitration treaties, and 22 more are +tinder negotiation. +</p> + +<p> +NICARAGUA +</p> + +<p> +When a destructive and bloody revolution lately broke out in Nicaragua, at +the earnest and repeated entreaties of its Government I dispatched our +Marine forces there to protect the lives and interests of our citizens. To +compose the contending parties, I sent there Col. Henry L. Stimson, former +Secretary of War and now Governor General of the Philippine Islands, who +secured an agreement that warfare should cease, a national election should +be held and peace should be restored. Both parties conscientiously carried +out this agreement, with the exception of a few bandits who later mostly +surrendered or left the country. President Diaz appointed Brig. Gen. Frank +R. McCoy, United States Army, president of the election board, which +included also one member of each political party. +</p> + +<p> +A free and fair election has been held and has worked out so successfully +that both parties have joined in requesting like cooperation from this +country at the election four years hence, to which I have refrained from +making any commitments, although our country must be gratified at such an +exhibition of success and appreciation. +</p> + +<p> +Nicaragua is regaining its prosperity and has taken a long step in the +direction of peaceful self-government. +</p> + +<p> +TACNA-ARICA +</p> + +<p> +The long-standing differences between Chile and Peru have been sufficiently +composed so that diplomatic relations have been resumed by the exchange of +ambassadors. Negotiations are hopefully proceeding as this is written for +the final adjustment of the differences over their disputed territory. +</p> + +<p> +MEXICO +</p> + +<p> +Our relations with Mexico are on a more satisfactory basis than at any time +since their revolution. Many misunderstandings have been resolved and the +most frank and friendly negotiations promise a final adjustment of all +unsettled questions. It is exceedingly gratifying that Ambassador Morrow +has been able to bring our two neighboring countries, which have so many +interests in common, to a position of confidence in each other and of +respect for mutual sovereign rights. +</p> + +<p> +CHINA +</p> + +<p> +The situation in China which a few months ago was so threatening as to call +for the dispatch of a large additional force has, been much composed. The +Nationalist Government has established itself over the country and +promulgated a new organic law announcing a program intended to promote the +political and economic welfare of the people. We have recognized this +Government, encouraged its progress, and have negotiated a treaty +restoring to China complete tariff autonomy and guaranteeing our citizens +against discriminations. Our trade in that quarter is increasing and our +forces are being reduced. +</p> + +<p> +GREEK AND AUSTRIAN DEBTS +</p> + +<p> +Pending before the Congress is a recommendation for the settlement of the +Greek debt and the Austrian debt. Both of these are comparatively small and +our country can afford to be generous. The rehabilitation of these +countries awaits their settlement. There would also be advantages to our +trade. We could scarcely afford to be the only nation that refuses the +relief which Austria seeks. The Congress has already granted Austria a +long-time moratorium, which it is understood will be waived and immediate +payments begun on her debt on the same basis which we have extended to +other countries. +</p> + +<p> +PEACE TREATY +</p> + +<p> +One of the most important treaties ever laid before the Senate of the +United States will be that which the 15 nations recently signed at Paris, +and to which 44 other nations have declared their intention to adhere, +renouncing war as a national policy and agreeing to resort only to peaceful +means for the adjustment of international differences. It is the most +solemn declaration against war, the most positive adherence to peace, that +it is possible for sovereign nations to make. It does not supersede our +inalienable sovereign right and duty of national defense or undertake to +commit us before the event to any mode of action which the Congress might +decide to be wise if ever the treaty should be broken. But it is a new +standard in the world around which can rally the informed and enlightened +opinion of nations to prevent their governments from being forced into +hostile action by the temporary outbreak of international animosities. The +observance of this covenant, so simple and so straightforward, promises more +for the peace of the world than any other agreement ever negotiated among +the nations. +</p> + +<p> +NATIONAL DEFENSE +</p> + +<p> +The first duty of our Government to its own citizens and foreigners within +its borders is the preservation of order. Unless and until that duty is met +a government is not even eligible for recognition among the family of +nations. The advancement of world civilization likewise is dependent upon +that order among the people of different countries which we term peace. To +insure our citizens against the infringement of their legal rights at home +and abroad, to preserve order, liberty, and peace by making the law +supreme, we have an Army and a Navy. +</p> + +<p> +Both of these are organized for defensive purposes. Our Army could not be +much reduced, but does not need to be increased. Such new housing and +repairs as are necessary are tinder way and the 6-year program in aviation +is being put into effect in both branches of our service. +</p> + +<p> +Our Navy, according to generally accepted standards, is deficient in +cruisers. We have 10 comparatively new vessels, 22 that are old, and 8 to +be built. It is evident that renewals and replacements must be provided. +This matter was thoroughly canvassed at the last session of the Congress +and does not need restatement. The bill before the Senate with the +elimination of the time clause should be passed. We have no intention of +competing with any other country. This building program is for necessary +replacements and to meet our needs for defense. +</p> + +<p> +The cost of national defense is stupendous. It has increased $118,000,000 +in the past four years. The estimated expenditure for 1930 is $668,000,000. +While this is made up of many items it is, after all, mostly dependent upon +numbers. Our defensive needs do not can for any increase in the number of +men in the Army or the Navy. We have reached the limit of what we ought to +expend for that purpose. +</p> + +<p> +I wish to repeat again for the benefit of the timid and the suspicious that +this country is neither militaristic nor imperialistic. Many people at home +and abroad, who constantly make this charge, are the same ones who are even +more solicitous to have us extend assistance to foreign countries. When +such assistance is granted, the inevitable result is that we have foreign +interests. For us to refuse the customary support and protection of such +interests would be in derogation of the sovereignty of this Nation. Our +largest foreign interests are in the British Empire, France, and Italy. +Because we are constantly solicitous for those interests, I doubt if anyone +would suppose that those countries feel we harbor toward them any +militaristic or imperialistic design. As for smaller countries, we +certainly do not want any of them. We are more anxious than they are to have +their sovereignty respected. Our entire influence is in behalf of their +independence. Cuba stands as a witness to our adherence to this principle. +</p> + +<p> +The position of this Government relative to the limitation of armaments, +the results already secured, and the developments up to the present time +are so well known to the Congress that they do not require any restatement. +</p> + +<p> +VETERANS +</p> + +<p> +The magnitude of our present system of veterans' relief is without +precedent, and the results have been far-reaching. For years a service +pension has been granted to the Grand Army and lately to the survivors of +the Spanish-American War. At the time we entered the World War however, +Congress departed from the usual pension system followed by our +Government. Eleven years have elapsed since our laws were first enacted, +initiating a system of compensation, rehabilitation, hospitalization, and +insurance for the disabled of the World War and their dependents. The +administration of all the laws concerning relief has been a difficult +task, but it can safely be stated that these measures have omitted nothing +in their desire to deal generously and humanely. We should continue to +foster this system and provide all the facilities necessary for adequate +care. It is the conception of our Government that the pension roll is an +honor roll. It should include all those who are justly entitled to its +benefits, but exclude all others. +</p> + +<p> +Annual expenditures for all forms of veterans' relief now approximate +$765,000,000, and are increasing from year to year. It is doubtful if the +peak of expenditures will be reached even under present legislation for +sonic time yet to come. Further amendments to the existing law will be +suggested by the American Legion, the Veterans of Foreign Wars of the +United States, the Disabled American Veterans of the World War, and other +like organizations, and it may be necessary for administrative purposes, or +in order to remove some existing inequalities in the present law, to make +further changes. I am sure that such recommendations its may be submitted +to the Congress will receive your careful consideration. But because of the +vast expenditure now being made, each year, with every assurance that it +will increase, and because of the great liberality of the existing law, the +proposal of any additional legislation dealing with this subject should +receive most searching scrutiny from the Congress. +</p> + +<p> +You are familiar with the suggestion that the various public agencies now +dealing with matters of veterans' relief be consolidated in one Government +department. Some advantages to this plan seem apparent, especially in the +simplification of administration find in the opportunity of bringing about +a greater uniformity in the application of veterans' relief. I recommend +that a survey be made by the proper committees of Congress dealing with +this subject, in order to determine whether legislation to secure this +consolidation is desirable. +</p> + +<p> +AGRICULTURE +</p> + +<p> +The past year has been marked by notable though not uniform improvement in +agriculture. The general purchasing power of farm products and the volume +of production have advanced. This means not only further progress, in +overcoming the price disparity into which agriculture was plunged in +1920-21, but also increased efficiency on the part of farmers and a +well-grounded confidence in the future of agriculture. +</p> + +<p> +The livestock industry has attained the best balance for many years and is +prospering conspicuously. Dairymen, beef producers, and poultrymen are +receiving substantially larger returns than last year. Cotton, although +lower in price than at this time last year, was produced in greater volume +and the prospect for cotton incomes is favorable. But progress is never +uniform in a vast and highly diversified agriculture or industry. Cash +grains, hay, tobacco, and potatoes will bring somewhat smaller returns this +year than last. Present indications are, however, that the gross farm +income will be somewhat larger than in the crop year 1927-28, when the +total was $12,253,000,000. The corresponding figure for 1926-27 was +$12,127,000,000, and in 1925-26, $12,670,000,000. Still better results +would have been secured this year had there not been an undue increase in +the production of certain crops. This is particularly true of potatoes, +which have sold at an unremunerative price, or at a loss, as a direct +result of overexpansion of acreage. +</p> + +<p> +The present status of agriculture, although greatly improved over that of a +few years ago, bespeaks the need of further improvement which calls for +determined effort of farmers themselves, encouraged and assisted by wise +public policy. The Government has been, and must continue to be, alive to +the needs of agriculture. +</p> + +<p> +In the past eight years more constructive legislation of direct benefit to +agriculture has been adopted than during any other period. The Department +of Agriculture has been broadened and reorganized to insure greater +efficiency. The department is laying greater stress on the economic and +business phases of agriculture. It is lending every possible assistance to +cooperative marketing associations. Regulatory and research work have been +segregated in order that each field may be served more effectively. +</p> + +<p> +I can not too strongly commend, in the field of fact finding, the research +work of the Department of Agriculture and the State experiment stations. +The department now receives annually $4,000,000 more for research than in +1921. In addition, the funds paid to the States for experimentation +purposes under the Purnell Act constitute an annual increase in Federal +payments to State agricultural experiment stations of $2,400,000 over the +amount appropriated in 1921. The program of support for research may wisely +be continued and expanded. Since 1921 we have appropriated nearly an +additional $2,000,000 for extension work, and this sum is to be increased +next year under authorization by the Capper-Ketcham Act. +</p> + +<p> +THE SURPLUS PROBLEM +</p> + +<p> +While these developments in fundamental research, regulation, and +dissemination of agricultural information are of distinct help to +agriculture, additional effort is needed. The surplus problem demands +attention. As emphasized in my last message, the Government should assume +no responsibility in normal times for crop surplus clearly due to +overextended acreage. The Government should, however, provide reliable +information as a guide to private effort; and in this connection fundamental +research on prospective supply and demand, as a guide to production and +marketing, should be encouraged. Expenditure of public funds to bring in +more new land should have most searching scrutiny, so long as our farmers +face unsatisfactory prices for crops and livestock produced on land already +under cultivation. +</p> + +<p> +Every proper effort should be made to put land to uses for which it is +adapted. The reforestation of land best suited for timber production is +progressing and should be encouraged, and to this end the forest taxation +inquiry was instituted to afford a practical guide for public policy. +Improvement has been made in grazing regulation in the forest reserves, not +only to protect the ranges, but to preserve the soil from erosion. Similar +action is urgently needed to protect other public lands which are now +overgrazed and rapidly eroding. +</p> + +<p> +Temporary expedients, though sometimes capable of appeasing the demands of +the moment, can not permanently solve the surplus problem and might +seriously aggravate it. Hence putting the Government directly into +business, subsidies, and price fixing, and the alluring promises of +political action as a substitute for private initiative, should be +avoided. +</p> + +<p> +The Government should aid in promoting orderly marketing and in handling +surpluses clearly due to weather and seasonal conditions. As a beginning +there should be created a Federal farm board consisting of able and +experienced men empowered to advise producers' associations in establishing +central agencies or stabilization corporations to handle surpluses, to seek +wore economical means of merchandising, and to aid the producer in securing +returns according to the a14 of his product. A revolving loan fund should +be provided for the necessary financing until these agencies shall have +developed means of financing their operations through regularly constituted +credit institutions. Such a bill should carry authority for raising the +money, by loans or otherwise, necessary to meet the expense, as the +Treasury has no surplus. +</p> + +<p> +Agriculture has lagged behind industry in achieving that unity of effort +which modern economic life demands. The cooperative movement, which is +gradually building the needed organization, is in harmony with public +interest and therefore merits public encouragement. +</p> + +<p> +THE RESPONSIBILITY OF THE STATES +</p> + +<p> +Important phases of public policy related to agriculture lie within the +sphere of the States. While successive reductions in Federal taxes have +relieved most farmers of direct taxes to the National Government, State and +local levies have become a serious burden. This problem needs immediate and +thorough study with a view to correction at the earliest possible moment. +It will have to be made largely by the States themselves. +</p> + +<p> +COMMERCE +</p> + +<p> +It is desirable that the Government continue its helpful attitude toward +American business. The activities of the Department of Commerce have +contributed largely to the present satisfactory position +in our international trade, which has reached about $9,000,000,000 +annually. There should be no slackening of effort in that direction. It is +also important that the department's assistance to domestic commerce be +continued. There is probably no way in which the Government can aid sound +economic progress more effectively than by cooperation with our business +men to reduce wastes in distribution. +</p> + +<p> +COMMERCIAL AERONAUTICS +</p> + +<p> +Continued progress in civil aviation is most gratifying. Demands for +airplanes and motors have taxed both the industry and the licensing and +inspection service of the Department of Commerce to their capacity. While +the compulsory licensing provisions of the air commerce act apply only to +equipment and personnel engaged in interstate and foreign commerce, a +Federal license may be procured by anyone possessing the necessary +qualifications. State legislation, local airport regulations, and insurance +requirements make such a license practically indispensable. This results in +uniformity of regulation and increased safety in operation, which are +essential to aeronautical development. Over 17,000 young men and women have +now applied for Federal air pilot's licenses or permits. More than 80 per +cent of them applied during the past year. +</p> + +<p> +Our national airway system exceeds 14,000 miles in length and has 7,500 +miles lighted for night operations. Provision has been made for lighting +4,000 miles more during the current fiscal year and equipping an equal +mileage with radio facilities. Three-quarters of our people are now served +by these routes. With the rapid growth of air mail, express, and passenger +service, this new transportation medium is daily becoming a more important +factor in commerce. It is noteworthy that this development has taken place +without governmental subsidies. Commercial passenger flights operating on +schedule have reached 13,000 miles per day. +</p> + +<p> +During the next fortnight this Nation will entertain the nations of the +world in a celebration of the twenty-fifth anniversary of the first +successful airplane flight. The credit for this epoch-making achievement +belongs to a citizen of our own country, Orville Wright. +</p> + +<p> +CUBAN PARCEL POST +</p> + +<p> +I desire to repeat my recommendation of an earlier message, that Congress +enact the legislation necessary to make permanent the Parcel Post +Convention with Cuba, both as a facility to American commerce and as a +measure of equity to Cuba in the one class of goods which that country can +send here by parcel post without detriment to our own trade. +</p> + +<p> +"MAINE" BATTLESHIP MEMORIAL +</p> + +<p> +When I attended the Pan American Conference at Habana, the President of +Cuba showed me a marble statue made from the original memorial that was +overturned by a storm after it was erected on the Cuban shore to the memory +of the men who perished in the destruction of the battleship Maine. As a +testimony of friendship and appreciation of the Cuban Government and people +he most generously offered to present this to the United States, and I +assured him of my pleasure in accepting it. There is no location in the +White House for placing so large and heavy a structure, and I therefore +urge the Congress to provide by law for some locality where it can be +set up. +</p> + +<p> +RAILROADS +</p> + +<p> +In previous annual messages I have suggested the enactment of laws to +promote railroad consolidation with the view of increasing the efficiency +of transportation and lessening its cost to the public. While, +consolidations can and should be made under the present law until it is +changed, vet the provisions of the act of 1920 have not been found fully +adequate to meet the needs of other methods of consolidation. Amendments +designed to remedy these defects have been considered at length by the +respective committees of Congress and a bill was reported out late in the +last session which I understand has the approval in principle of the +Interstate Commerce Commission. It is to be hoped that this legislation may +be enacted at an early date. +</p> + +<p> +Experience has shown that the interstate commerce law requires definition +and clarification in several other respects, some of which have been +pointed out by the Interstate Commerce Commission in its annual reports to +the Congress. It will promote the public interest to have the Congress give +early consideration to the recommendations there made. +</p> + +<p> +MERCHANT MARINE +</p> + +<p> +The cost of maintaining the United States Government merchant fleet has +been steadily reduced. We have established American flag lines in foreign +trade where they had never before existed as a means of promoting commerce +and as a naval auxiliary. There have been sold to private American capital +for operation within the past few years 14 of these lines, which, under the +encouragement of the recent legislation passed by the Congress, give +promise of continued successful operation. Additional legislation from time +to time may be necessary to promote future advancement under private +control. +</p> + +<p> +Through the cooperation of the Post Office Department and the Shipping +Board long-term contracts are being made with American steamship lines for +carrying mail, which already promise the construction of 15 to 20 new +vessels and the gradual reestablishment of the American merchant marine as +a private enterprise. No action of the National Government has been so +beneficial to our shipping. The cost is being absorbed to a considerable +extent by the disposal of unprofitable lines operated by the Shipping +Board, for which the new law has made a market. Meanwhile it should be our +policy to maintain necessary strategic lines under the Government operation +until they can be transferred to private capital. +</p> + +<p> +INTER-AMERICAN HIGHWAY +</p> + +<p> +In my message last year I expressed the view that we should lend our +encouragement for more good roads to all the principal points on this +hemisphere South of the Rio Grande. My view has not changed. +</p> + +<p> +The Pan American Union has recently indorsed it. In some of the countries +to the south a great deal of progress is being made in road building. In, +Others engineering features are often exacting and financing difficult. As +those countries enter upon programs for road building we should be ready to +contribute from our abundant experience to make their task easier of +accomplishment. I prefer not to go into civil life to accomplish this end. +We already furnish military and naval advisors, and following this +precedent we could draw competent men from these same sources and from the +Department of Agriculture. +</p> + +<p> +We should provide our southern neighbors, if they request it, with such +engineer advisors for the construction of roads and bridges. Private +interests should look with favor upon all reasonable loans sought by +these countries to open main lines of travel. Such assistance should be +given especially to any project for a highway designed to connect all the +countries on this hemisphere and thus facilitate, intercourse and closer +relations among, them. +</p> + +<p> +AIR MAIL SERVICE +</p> + +<p> +The friendly relations and the extensive, commercial intercourse with the +Western Hemisphere to the south of us are being further cemented by the +establishment and extension of air-mail routes. We shall soon have one from +Key West, Fla., over Cuba, Haiti, and Santo Domingo to San Juan, P. R., +where it will connect with another route to Trinidad. There will be another +route from Key West to the Canal Zone, where connection will be made with a +route across the northern coast of South America to Paramaribo. This will +give us a circle around the Caribbean under our own control. Additional +connections will be made at Colon with a route running down the west coast +of South America as far as Conception, Chile, and with the French air mail +at Paramaribo running down the eastern coast of South America. The air +service already spans our continent, with laterals running to Mexico and +Canada, and covering a daily flight of over 28,000 miles, with an average +cargo of 15 000 pounds. +</p> + +<p> +WATERWAYS +</p> + +<p> +Our river and harbor improvements are proceeding with vigor. In the past +few years Ave have increased the appropriation for this regular work +$28,000,000, besides what is to be expended on flood control. The total +appropriation for this year was over $91,000,000. The Ohio River is almost +ready for opening; work on the Missouri and other rivers is under way. In +accordance with the Mississippi flood law Army engineers are making +investigations and surveys on other streams throughout the country with a +view to flood control, navigation, waterpower, and irrigation. Our barrier +lines are being operated under generous appropriations, and negotiations +are developing relative to the St. Lawrence waterway. To Secure the largest +benefits from all these waterways joint rates must be established with the +railroads, preferably by agreement, but otherwise as a result of +congressional action. +</p> + +<p> +We have recently passed several river and harbor bills. The work ordered by +the Congress not, yet completed, will cost about $243, +</p> + +<p> +000,000, besides the hundreds of millions to be spent on the Mississippi +flood way. Until we can see our way out of this expense no further river +and harbor legislation should be passed, as expenditures to put it into +effect would be four or five years away. +</p> + +<p> +IRRIGATION OF ARID LANDS +</p> + +<p> +For many years the Federal Government has been committed to the wise policy +of reclamation and irrigation. While it has met with some failures due to +unwise selection of projects and lack of thorough soil surveys, so that +they could not be placed on a sound business basis, on the whole the +service has been of such incalculable benefit in so many States that no one +would advocate its abandonment. The program to which we are already +committed, providing for the construction of new projects authorized by +Congress and the completion of old projects, will tax the resources of the +reclamation fund over a period of years. The high cost of improving and +equipping farms adds to the difficulty of securing settlers for vacant +farms on federal projects. +</p> + +<p> +Readjustments authorized by the reclamation relief act of May 25, 1926, +have given more favorable terms of repayment to settlers. These new +financial arrangements and the general prosperity on irrigation projects +have resulted in increased collections by the Department of the Interior of +charges due the reclamation fund. Nevertheless, the demand for still +smaller yearly payments on some projects continues. These conditions should +have consideration in connection with any proposed new projects. +</p> + +<p> +COLORADO RIVER +</p> + +<p> +For several years the Congress has considered the erection of a dam on the +Colorado River for flood-control, irrigation, and domestic water purposes, +all of which ma properly be considered as Government functions. There would +be an incidental creation of water power which could be used for generating +electricity. As private enterprise can very well fill this field, there is +no need for the Government to go into it. It is unfortunate that the States +interested in this water have been unable to agree among themselves. +Nevertheless, any legislation should give every possible safeguard to the +present and prospective rights of each of them. +</p> + +<p> +The Congress will have before it, the detailed report of a special board +appointed to consider the engineering and economic feasibility of this +project. From the short summary which I have seen of it, 11 judge they +consider the engineering problems can be met at somewhat increased cost +over previous estimates. They prefer the Black Canyon site. On the economic +features they are not so clear and appear to base their conclusions on many +conditions which can not be established with certainty. So far as I can +judge, however, from the summary, their conclusions appear sufficiently +favorable, so that I feel warranted in recommending a measure which will +protect the rights of the States, discharge the necessary Government +functions, and leave the electrical field to private enterprise. +</p> + +<p> +MUSCLE SHOALS +</p> + +<p> +The development of other methods of producing nitrates will probably render +this plant less important for that purpose than formerly. But we have it, +and I am told it still provides a practical method of making nitrates for +national defense and farm fertilizers. By dividing the property into its +two component parts of power and nitrate plants it would be possible to +dispose of the power, reserving the right to any concern that wished to +make nitrates to use any power that might be needed for that purpose. Such +a disposition of the power plant can be made that will return in rental +about $2,000,000 per year. If the Congress would giant the Secretary of War +authority to lease the nitrate plant on such terms as would insure the +largest production of nitrates, the entire property could begin to +function. Such a division, I am aware, has never seemed to appeal to the +Congress. I should also gladly approve a bill granting authority to lease +the entire property for the production of nitrates. +</p> + +<p> +I wish to avoid building another dam at public expense. Future operators +should provide for that themselves. But if they were to be required to +repay the cost of such dam with the prevailing commercial rates for +interest, this difficulty will be considerably lessened. Nor do I think +this property should be made a vehicle for putting the United States +Government indiscriminately into the private and retail field of power +distribution and nitrate sales. +</p> + +<p> +CONSERVATION +</p> + +<p> +The practical application of economy to the resources of the country calls +for conservation. This does not mean that every resource should not be +developed to its full degree, but it means that none of them should be +wasted. We have a conservation board working on our oil problem. This is of +the utmost importance to the future well-being of our people in this age of +oil-burning engines and the general application of gasoline to +transportation. The Secretary of the Interior should not be compelled to +lease oil lands of the Osage Indians when the market is depressed and the +future supply is in jeopardy. +</p> + +<p> +While the area of lands remaining in public ownership is small, compared +with the vast area in private ownership, the natural resources of those in +public ownership are of immense present and future value. This is +particularly trite as to minerals and water power. The proper bureaus have +been classifying these resources to the end that they may be conserved. +Appropriate estimates are being submitted, in the Budget, for the further +prosecution of this important work. +</p> + +<p> +IMMIGRATION +</p> + +<p> +The policy of restrictive immigration should be maintained. Authority +should be granted the Secretary of Labor to give immediate preference to +learned professions and experts essential to new industries. The reuniting +of families should be expedited. Our immigration and naturalization laws +might well be codified. +</p> + +<p> +WAGE EARNER +</p> + +<p> +In its economic life our country has rejected the long accepted law of a +limitation of the wage fund, which led to pessimism and despair because it +was the doctrine of perpetual poverty, and has substituted for it the +American conception that the only limit to profits and wages is production, +which is the doctrine of optimism and hope because it leads to prosperity. +Here and there the councils of labor are still darkened by the theory that +only by limiting individual production can there be any assurance of +permanent employment for increasing numbers, but in general, management and +wage earner alike have become emancipated from this doom and have entered a +new era in industrial thought which has unleashed the productive capacity +of the individual worker with an increasing scale of wages and profits, the +end of which is not yet. The application of this theory accounts for our +widening distribution of wealth. No discovery ever did more to increase the +happiness and prosperity of the people. +</p> + +<p> +Since 1922 increasing production has increased wages in general 12.9 per +cent, while in certain selected trades they have run as high as 34.9 per +cent and 38 per cent. Even in the boot and shoe shops the increase is over +5 per cent and in woolen mills 8.4 per cent, although these industries have +not prospered like others. As the rise in living costs in this period is +negligible, these figures represent real wage increases. +</p> + +<p> +The cause of constructive economy requires that the Government should +cooperate with private interests to eliminate the waste arising from +industrial accidents. This item, with all that has been done to reduce it, +still reaches enormous proportions with great suffering to the workman and +great loss to the country. +</p> + +<p> +WOMEN AND CHILDREN +</p> + +<p> +The Federal Government should continue its solicitous care for the +8,500,000 women wage earners and its efforts in behalf of public health, +which is reducing infant mortality and improving the bodily and mental +condition of our citizens. +</p> + +<p> +CIVIL SERVICE +</p> + +<p> +The most marked change made in the civil service of the Government in the +past eight years relates to the increase in salaries. The Board of +Actuaries on the retirement act shows by its report, that July 1, 1921 the +average salary of the 330,047 employees subject to the act was $1,307, +while on June 30, 1927, the average salary of the corresponding 405,263 +was $1,969. This was an increase in six years of nearly 53 per cent. On top +of this was the generous increase made at the last session of the Congress +generally applicable to Federal employees and another bill increasing the +pay in certain branches of the Postal Service beyond the large increase +which was made three years ago. This raised the average level from $1,969 +to $2,092, making an increase in seven years of over 63 per cent. While it +is well known that in the upper brackets the pay in the Federal +service is much smaller than in private employment, in the lower brackets, +ranging well up over $3,000, it is much higher. It is higher not only in +actual money paid, but in privileges granted, a vacation of 30 actual +working days, or 5 weeks each year, with additional time running in some +departments as high as 30 days for sick leave and the generous provisions +of the retirement act. No other body of public servants ever occupied such +a fortunate position. +</p> + +<p> +EDUCATION +</p> + +<p> +Through the Bureau of Education of the Department of the Interior the +Federal Government, acting in an informative and advisory capacity, has +rendered valuable service. While this province belongs peculiarly to the +States, yet the promotion of education and efficiency in educational +methods is a general responsibility of the Federal Government. A survey of +negro colleges and universities in the United States has just been +completed by the Bureau of Education through funds provided by the +institutions themselves and through private sources. The present status of +negro higher education was determined and recommendations were made for its +advancement. This was one of the numerous cooperative undertakings of the +bureau. Following the invitation of the Association of Land Grant Colleges +and Universities, he Bureau of Education now has under way the survey of +agricultural colleges, authorized by Congress. The purpose of the survey is +to ascertain the accomplishments, the status, and the future objectives of +this type of educational training. It is now proposed to undertake a survey +of secondary schools, which educators insist is timely and essential. +</p> + +<p> +PUBLIC BUILDINGS +</p> + +<p> +We, have laid out a public building program for the District of Columbia +and the country at large running into hundreds of millions of dollars. +Three important structures and one annex are already, under way and one +addition has been completed in the City of Washington. in the country sites +have been acquired, many buildings are in course of construction, and some +are already completed. Plans for all this work are being prepared in order +that it may be carried forward as rapidly as possible. This is the greatest +building program ever assumed by this Nation. It contemplates structures of +utility and of beauty. When it reaches completion the people will be well +served and the Federal city will be supplied with the most beautiful and +stately public buildings which adorn any capital in the world. +</p> + +<p> +THE AMERICAN INDIAN +</p> + +<p> +The administration of Indian affairs has been receiving intensive study for +several years. The Department of the Interior has been able to provide +better supervision of health, education, and industrial advancement of this +native race through additional funds provided by the Congress. The present +cooperative arrangement existing between the Bureau of Indian Affairs and +the Public Health Service should be extended. The Government's +responsibility to the American Indian has been acknowledged by annual +increases in appropriations to fulfill its obligations to them and to +hasten the time when Federal supervision of their affairs may be properly +and safely terminated. The movement in Congress and in some of the State +legislatures for extending responsibility in Indian affairs to States +should be encouraged. A complete participation by the Indian in our +economic life is the end to be desired. +</p> + +<p> +THE NEGRO +</p> + +<p> +For 65 years now our negro Population has been under the peculiar care and +solicitude of the National Government. The progress which they have made in +education and the professions, in wealth and in the arts of civilization, +affords one of the most remarkable incidents in this period of world +history. They have demonstrated their ability to partake of the advantages +of our institutions and to benefit by a free and more and more independent +existence. Whatever doubt there may have been of their capacity to assume, +the status granted to them by the Constitution of this Union is being +rapidly dissipated. Their cooperation in the life of the Nation is +constantly enlarging. +</p> + +<p> +Exploiting the Negro problem for political ends is being abandoned and +their protection is being increased by those States in which their +percentage of population is largest. Every encouragement should be extended +for t le development of the race. The colored people have been the victims +of the crime of lynching, which has in late years somewhat decreased. Some +parts of the South already have wholesome laws for its restraint and +punishment. Their example might well be followed by other States, and by +such immediate remedial legislation as the Federal Government can extend +under the Constitution. +</p> + +<p> +PHILIPPINE ISLANDS +</p> + +<p> +Under the guidance of Governor General Stimson the economic and political +conditions of the Philippine Islands have been raised to a standard never +before surpassed. The cooperation between his administration and the people +of the islands is complete and harmonious. It would be an advantage if +relief from double taxation could be granted by the Congress to our +citizens doing business in the islands. +</p> + +<p> +PORTO RICO +</p> + +<p> +Due to the terrific storm that swept Porto Rico last September, the people +of that island suffered large losses. The Red Cross and the War Department +went to their rescue. The property loss is being, retrieved. Sugar, +tobacco, citrus fruit, and coffee, all suffered damage. The first three can +largely look after themselves. The coffee growers will need some +assistance, which should be extended strictly on a business basis, and +only after most careful investigation. The people of Porto Rico are not +asking for charity. +</p> + +<p> +DEPARTMENT OF JUSTICE +</p> + +<p> +It is desirable that all the legal activities of the Government be +consolidated under the supervision of the Attorney General. In +1870 it was felt necessary to create the Department of Justice for this +purpose. During the intervening period, either through legislation creating +law officers or departmental action, additional legal positions not under +the supervision of the Attorney General have been provided until there are +now over 900. Such a condition is as harmful to the interest of the +Government now as it was in 1870, and should be corrected by appropriate +legislation. +</p> + +<p> +SPECIAL GOVERNMENT COUNSEL +</p> + +<p> +In order to prosecute the oil cases, I suggested and the Congress enacted a +law providing for the appointment of two special counsel. They have pursued +their work with signal ability, recovering all the leased lands besides +nearly $30,000,000 in money, and nearly $17,000,000 in other property. They +find themselves hampered by a statute, which the Attorney General construes +as applying to them, prohibiting their appearing for private clients before +any department. For this reason, one has been compelled to resign. No good +result is secured by the application of this rule to these counsel, and as +Mr. Roberts has consented to take reappointment if the rule is abrogated I +recommend the passage of an amendment to the law creating their office +exempting them from the general rule against taking other cases involving +the Government. +</p> + +<p> +PROHIBITION +</p> + +<p> +The country has duly adopted the eighteenth amendment. Those who object to +it have the right to advocate its modification or repeal. Meantime, it is +binding upon the National and State Governments and all our inhabitants. +The Federal enforcement bureau is making every effort to prevent +violations, especially through smuggling, manufacture, and transportation, +and to prosecute generally all violations for which it can secure evidence. +It is bound to continue this policy. Under the terms of the Constitution, +however, the obligation is equally on the States to exercise the power +which they have through the executive, legislative, judicial, and police +branches of their governments in behalf of enforcement. The Federal +Government is doing and will continue to do all it can in this direction +and is entitled to the active cooperation of the States. +</p> + +<p> +CONCLUSION +</p> + +<p> +The country is in the midst of an era of prosperity more extensive and of +peace more permanent than it has ever before experienced. But, having +reached this position, we should not fail to comprehend that it can easily +be lost. It needs more effort for its support than the less exalted places +of the world. We shall not be permitted to take our case, but shall +continue to be required to spend our days in unremitting toil. The actions +of the Government must command the confidence of the country. Without this, +our prosperity would be lost. We must extend to other countries the largest +measure of generosity, moderation, and patience. In addition to dealing +justly, we can well afford to walk humbly. +</p> + +<p> +The end of government is to keep open the opportunity for a more +abundant life. Peace and prosperity are not finalities; they are only +methods. It is too easy under their influence for a nation to become +selfish and degenerate. This test has come to the United States. Our +country has been provided with the resources with which it can enlarge its +intellectual, moral, and spiritual life. The issue is in the hands of the +people. Our faith in man and God is the justification for the belief in our +continuing success. +</p> + +<p><br /><br /><br /><br /></p> + + + + + + + + +<pre> + + + + + +End of the Project Gutenberg EBook of State of the Union Addresses of Calvin +Coolidge, by Calvin Coolidge + +*** END OF THIS PROJECT GUTENBERG EBOOK STATE OF THE UNION ADDRESSES *** + +***** This file should be named 5036-h.htm or 5036-h.zip ***** +This and all associated files of various formats will be found in: + http://www.gutenberg.org/5/0/3/5036/ + +Produced by James Linden. HTML version by Al Haines. +Updated editions will replace the previous one--the old editions will +be renamed. + +Creating the works from print editions not protected by U.S. copyright +law means that no one owns a United States copyright in these works, +so the Foundation (and you!) can copy and distribute it in the United +States without permission and without paying copyright +royalties. 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You may copy it, give it away or re-use it under the terms of +the Project Gutenberg License included with this eBook or online at +www.gutenberg.org. If you are not located in the United States, you'll have +to check the laws of the country where you are located before using this ebook. + +Title: State of the Union Addresses of Calvin Coolidge + +Author: Calvin Coolidge + +Posting Date: December 3, 2014 [EBook #5036] +Release Date: February, 2004 +First Posted: April 11, 2002 +Last Updated: December 16, 2004 + +Language: English + +Character set encoding: ASCII + +*** START OF THIS PROJECT GUTENBERG EBOOK STATE OF THE UNION ADDRESSES *** + + + + +Produced by James Linden. HTML version by Al Haines. + + + + + + + + +State of the Union Addresses of Calvin Coolidge + + + +The addresses are separated by three asterisks: *** + +Dates of addresses by Calvin Coolidge in this eBook: + + December 6, 1923 + December 3, 1924 + December 8, 1925 + December 7, 1926 + December 6, 1927 + December 4, 1928 + + + +*** + +State of the Union Address +Calvin Coolidge +December 6, 1923 + +Since the close of the last Congress the Nation has lost President Harding. +The world knew his kindness and his humanity, his greatness and his +character. He has left his mark upon history. He has made justice more +certain and peace more secure. The surpassing tribute paid to his memory as +he was borne across the continent to rest at last at home revealed the +place he held in the hearts of the American people. But this is not the +occasion for extended reference to the man or his work. In this presence, +among these who knew and loved him, that is unnecessary. But we who were +associated with him could not resume together the functions of our office +without pausing for a moment, and in his memory reconsecrating ourselves to +the service of our country. He is gone. We remain. It is our duty, under +the inspiration of his example, to take up the burdens which he was +permitted to lay down, and to develop and support the wise principles of +government which he represented. + +FOREIGN AFFAIRS + +For us peace reigns everywhere. We desire to perpetuate it always by +granting full justice to others and requiring of others full justice to +ourselves. + +Our country has one cardinal principle to maintain in its foreign policy. +It is an American principle. It must be an American policy. We attend to +our own affairs, conserve our own strength, and protect the interests of +our own citizens; but we recognize thoroughly our obligation to help +others, reserving to the decision of our own Judgment the time, the place, +and the method. We realize the common bond of humanity. We know the +inescapable law of service. + +Our country has definitely refused to adopt and ratify the covenant of the +League of Nations. We have not felt warranted in assuming the +responsibilities which its members have assumed. I am not proposing any +change in this policy; neither is the Senate. The incident, so far as we +are concerned, is closed. The League exists as a foreign agency. We hope it +will be helpful. But the United States sees no reason to limit its own +freedom and independence of action by joining it. We shall do well to +recognize this basic fact in all national affairs and govern ourselves +accordingly. + +WORLD COURT + +Our foreign policy has always been guided by two principles. The one is the +avoidance of permanent political alliances which would sacrifice our proper +independence. The other is the peaceful settlement of controversies between +nations. By example and by treaty we have advocated arbitration. For nearly +25 years we have been a member of The Hague Tribunal, and have long sought +the creation of a permanent World Court of Justice. I am in full accord +with both of these policies. I favor the establishment of such a court +intended to include the whole world. That is, and has long been, an +American policy. + +Pending before the Senate is a proposal that this Government give its +support to the Permanent Court of International Justice, which is a new and +somewhat different plan. This is not a partisan question. It should not +assume an artificial importance. The court is merely a convenient +instrument of adjustment to which we could go, but to which we could not +be brought. It should be discussed with entire candor, not by a political +but by a judicial method, without pressure and without prejudice. +Partisanship has no place in our foreign relations. As I wish to see a +court established, and as the proposal presents the only practical plan on +which many nations have ever agreed, though it may not meet every desire, I +therefore commend it to the favorable consideration of the Senate, with the +proposed reservations clearly indicating our refusal to adhere to the +League of Nations. + +RUSSIA + +Our diplomatic relations, lately so largely interrupted, are now being +resumed, but Russia presents notable difficulties. We have every desire to +see that great people, who are our traditional friends, restored to their +position among the nations of the earth. We have relieved their pitiable +destitution with an enormous charity. Our Government offers no objection +to the carrying on of commerce by our citizens with the people of Russia. +Our Government does not propose, however, to enter into relations with +another regime which refuses to recognize the sanctity of international +obligations. I do not propose to barter away for the privilege of trade any +of the cherished rights of humanity. I do not propose to make merchandise +of any American principles. These rights and principles must go wherever +the sanctions of our Government go. + +But while the favor of America is not for sale, I am willing to make very +large concessions for the purpose of rescuing the people of Russia. Already +encouraging evidences of returning to the ancient ways of society can be +detected. But more are needed. Whenever there appears any disposition to +compensate our citizens who were despoiled, and to recognize that debt +contracted with our Government, not by the Czar, but by the newly formed +Republic of Russia; whenever the active spirit of enmity to our +institutions is abated; whenever there appear works mete for repentance; +our country ought to be the first to go to the economic and moral rescue of +Russia. We have every desire to help and no desire to injure. We hope the +time is near at hand when we can act. + +DEBTS + +The current debt and interest due from foreign Governments, exclusive of +the British debt of $4,600,000,000, is about $7,200,000,000. I do not favor +the cancellation of this debt, but I see no objection to adjusting it in +accordance with the principle adopted for the British debt. Our country +would not wish to assume the role of an oppressive creditor, but would +maintain the principle that financial obligations between nations are +likewise moral obligations which international faith and honor require +should be discharged. + +Our Government has a liquidated claim against Germany for the expense of +the army of occupation of over $255,000,000. Besides this, the Mixed Claims +Commission have before them about 12,500 claims of American citizens, +aggregating about $1,225,000,000. These claims have already been reduced by +a recent decision, but there are valid claims reaching well toward +$500,000,000. Our thousands of citizens with credits due them of hundreds +of millions of dollars have no redress save in the action of our +Government. These are very substantial interests, which it is the duty of +our Government to protect as best it can. That course I propose to pursue. + +It is for these reasons that we have a direct interest in the economic +recovery of Europe. They are enlarged by our desire for the stability of +civilization and the welfare of humanity. That we are making sacrifices to +that end none can deny. Our deferred interest alone amounts to a million +dollars every day. But recently we offered to aid with our advice and +counsel. We have reiterated our desire to see France paid and Germany +revived. We have proposed disarmament. We have earnestly sought to compose +differences and restore peace. We shall persevere in well-doing, not by +force, but by reason. + +FOREIGN PAPERS + +Under the law the papers pertaining to foreign relations to be printed are +transmitted as a part of this message. Other volumes of these papers will +follow. + +FOREIGN SERVICE + +The foreign service of our Government needs to be reorganized and +improved. + +FISCAL CONDITION + +Our main problems are domestic problems. Financial stability is the first +requisite of sound government. We can not escape the effect of world +conditions. We can not avoid the inevitable results of the economic +disorders which have reached all nations. But we shall diminish their harm +to us in proportion as we continue to restore our Government finances to a +secure and endurable position. This we can and must do. Upon that firm +foundation rests the only hope of progress and prosperity. From that source +must come relief for the people. + +This is being, accomplished by a drastic but orderly retrenchment, which is +bringing our expenses within our means. The origin of this has been the +determination of the American people, the main support has been the courage +of those in authority, and the effective method has been the Budget System. +The result has involved real sacrifice by department heads, but it has been +made without flinching. This system is a law of the Congress. It represents +your will. It must be maintained, and ought to be strengthened by the +example of your observance. Without a Budget System there can be no fixed +responsibility and no constructive scientific economy. + +This great concentration of effort by the administration and Congress has +brought the expenditures, exclusive of the self-supporting Post. Office +Department, down to three billion dollars. It is possible, in consequence, +to make a large reduction in the taxes of the people, which is the sole +object of all curtailment. This is treated at greater length in the Budget +message, and a proposed plan has been presented in detail in a statement by +the Secretary of the Treasury which has my unqualified approval. I +especially commend a decrease on earned incomes, and further abolition of +admission, message, and nuisance taxes. The amusement and educational +value of moving pictures ought not to be taxed. Diminishing charges against +moderate incomes from investment will afford immense relief, while a +revision of the surtaxes will not only provide additional money for capital +investment, thus stimulating industry and employing more but will not +greatly reduce the revenue from that source, and may in the future actually +increase it. + +Being opposed to war taxes in time of peace, I am not in favor of +excess-profits taxes. A very great service could be rendered through +immediate enactment of legislation relieving the people of some of the +burden of taxation. To reduce war taxes is to give every home a better +chance. + +For seven years the people have borne with uncomplaining courage the +tremendous burden of national and local taxation. These must both be +reduced. The taxes of the Nation must be reduced now as much as prudence +will permit, and expenditures must be reduced accordingly. High taxes reach +everywhere and burden everybody. They gear most heavily upon the poor. They +diminish industry and commerce. They make agriculture unprofitable. They +increase the rates on transportation. They are a charge on every necessary +of life. Of all services which the Congress can render to the country, I +have no hesitation in declaring t neglect it, to postpone it, to obstruct +it by unsound proposals, is to become unworthy of public confidence and +untrue to public trust. The country wants this measure to have the right of +way over an others. + +Another reform which is urgent in our fiscal system is the abolition of the +right to issue tax-exempt securities. The existing system not only permits +a large amount of the wealth of the Notion to escape its just burden but +acts as a continual stimulant to municipal extravagance. This should be +prohibited by constitutional amendment. All the wealth of the Nation ought +to contribute its fair share to the expenses of the Nation. + +TARIFF LAW + +The present tariff law has accomplished its two main objects. It has +secured an abundant revenue and been productive of an abounding prosperity. +Under it the country has had a very large export and import trade. A +constant revision of the tariff by the Congress is disturbing and harmful. +The present law contains an elastic provision authorizing the President to +increase or decrease present schedules not in excess of 50 per centum to +meet the difference in cost of production at home and abroad. This does +not, to my mind, warrant a rewriting g of the whole law, but does mean, and +will be so administered, that whenever the required investigation shows +that inequalities of sufficient importance exist in any schedule, the power +to change them should and will be applied. + +SHIPPING + +The entire well being of our country is dependent upon transportation by +sea and land. Our Government during the war acquired a large merchant fleet +which should be transferred, as soon as possible, to private ownership and +operation under conditions which would secure two results: First, and of +prime importance, adequate means for national defense; second, adequate +service to American commerce. Until shipping conditions are such that our +fleet can be disposed of advantageously under these conditions, it will be +operated as economically as possible under such plans as may be devised +from time to time by the Shipping Board. We must have a merchant marine +which meets these requirements, and we shall have to pay the cost of its +service. + +PUBLIC IMPROVEMENTS + +The time has come to resume in a moderate way the opening of our +intracoastal waterways; the control of flood waters of the Mississippi and +of the Colorado Rivers; the improvement of the waterways from the Great +Lakes toward the Gulf of Mexico; and the development of the great power and +navigation project of the St. Lawrence River, for which efforts are now +being made to secure the necessary treaty with Canada. These projects can +not all be undertaken at once, but all should have the immediate +consideration of the Congress and be adopted as fast as plans can be +matured and the necessary funds become available. This is not incompatible +with economy, for their nature does not require so much a public +expenditure as a capital investment which will be reproductive, as +evidenced by the marked increase in revenue from the Panama Canal. Upon +these projects depend much future industrial and agricultural progress. +They represent the protection of large areas from flood and the addition of +a great amount of cheap power and cheap freight by use of navigation, chief +of which is the bringing of ocean-going ships to the Great Lakes. + +Another problem of allied character is the superpower development of the +Northeastern States, consideration of which is growing under the direction +of the Department of Commerce by joint conference with the local +authorities. + +RAILROADS + +Criticism of the railroad law has been directed, first, to the section +laying down the rule by which rates are fixed, and providing for payment to +the Government and use of excess earnings; second, to the method for the +adjustment of wage scales; and third, to the authority permitting +consolidations. + +It has been erroneously assumed that the act undertakes to guarantee +railroad earnings. The law requires that rates should be just and +reasonable. That has always been the rule under which rates have been +fixed. To make a rate that does not yield a fair return results in +confiscation, and confiscatory rates are of course unconstitutional. Unless +the Government adheres to the rule of making a rate that will yield a fair +return, it must abandon rate making altogether. The new and important +feature of that part of the law is the recapture and redistribution of +excess rates. The constitutionality of this method is now before the +Supreme Court for adjudication. Their decision should be awaited before +attempting further legislation on this subject. Furthermore, the importance +of this feature will not be great if consolidation goes into effect. + +The settlement of railroad labor disputes is a matter of grave public +concern. The Labor Board was established to protect the public in the +enjoyment of continuous service by attempting to insure justice between the +companies and their employees. It has been a great help, but is not +altogether satisfactory to the public, the employees, or the companies. If +a substantial agreement can be reached among the groups interested, there +should be no hesitation in enacting such agreement into law. If it is not +reached, the Labor Board may very well be left for the present to protect +the public welfare. + +The law for consolidations is not sufficiently effective to be expeditious. +Additional legislation is needed giving authority for voluntary +consolidations, both regional and route, and providing Government machinery +to aid and stimulate such action, always subject to the approval of the +Interstate Commerce Commission. This should authorize the commission to +appoint committees for each proposed group, representing the public and the +component roads, with power to negotiate with individual security holders +for an exchange of their securities for those of the, consolidation on such +terms and conditions as the commission may prescribe for avoiding any +confiscation and preserving fair values. Should this permissive +consolidation prove ineffective after a limited period, the authority of +the Government will have to be directly invoked. + +Consolidation appears to be the only feasible method for the maintenance of +an adequate system of transportation with an opportunity so to adjust +freight rates as to meet such temporary conditions as now prevail in some +agricultural sections. Competent authorities agree that an entire +reorganization of the rate structure for freight is necessary. This should +be ordered at once by the Congress. + +DEPARTMENT OF JUSTICE + +As no revision of the laws of the United States has been made since 1878, a +commission or committee should be created to undertake this work. The +Judicial Council reports that two more district judges are needed in the +southern district of New York, one in the northern district of Georgia, and +two more circuit judges in the Circuit Court of Appeals of the Eighth +Circuit. Legislation should be considered for this purpose. + +It is desirable to expedite the hearing and disposal of cases. A +commission of Federal judges and lawyers should be created to recommend +legislation by which the procedure in the Federal trial courts may be +simplified and regulated by rules of court, rather than by statute; such +rules to be submitted to the Congress and to be in force until annulled or +modified by the Congress. The Supreme Court needs legislation revising and +simplifying the laws governing review by that court, and enlarging the +classes of cases of too little public importance to be subject to review. +Such reforms would expedite the transaction of the business of the courts. +The administration of justice is likely to fail if it be long delayed. + +The National Government has never given adequate attention to its prison +problems. It ought to provide employment in such forms of production as can +be used by the Government, though not sold to the public in competition +with private business, for all prisoners who can be placed at work, and for +which they should receive a reasonable compensation, available for their +dependents. + +Two independent reformatories are needed; one for the segregation of women, +and another for the segregation of young men serving their first sentence. + +The administration of justice would be facilitated greatly by including in +the Bureau of Investigation of the Department of Justice a Division of +Criminal Identification, where there would be collected this information +which is now indispensable in the suppression of crime. + +PROHIBITION + +The prohibition amendment to the Constitution requires the Congress. and +the President to provide adequate laws to prevent its violation. It is my +duty to enforce such laws. For that purpose a treaty is being negotiated +with Great Britain with respect to the right of search of hovering +vessels. To prevent smuggling, the Coast Card should be greatly +strengthened, and a supply of swift power boats should be provided. The +major sources of production should be rigidly regulated, and every effort +should be made to suppress interstate traffic. With this action on the part +of the National Government, and the cooperation which is usually rendered +by municipal and State authorities, prohibition should be made effective. +Free government has no greater menace than disrespect for authority and +continual violation of law. It is the duty of a citizen not only to observe +the law but to let it be known that he is opposed to its violation. + +THE NEGRO + +Numbered among our population are some 12,000,000 colored people. Under our +Constitution their rights are just as sacred as those of any other citizen. +It is both a public and a private duty to protect those rights. The +Congress ought to exercise all its powers of prevention and punishment +against the hideous crime of lynching, of which the negroes are by no means +the sole sufferers, but for which they furnish a majority of the victims. + +Already a considerable sum is appropriated to give the negroes vocational +training in agriculture. About half a million dollars is recommended for +medical courses at Howard University to help contribute to the education of +500 colored doctors needed each year. On account of the integration of +large numbers into industrial centers, it has been proposed that a +commission be created, composed of members from both races, to formulate a +better policy for mutual understanding and confidence. Such an effort is to +be commended. Everyone would rejoice in the accomplishment of the results +which it seeks. But it is well to recognize that these difficulties are to +a large extent local problems which must be worked out by the mutual +forbearance and human kindness of each community. Such a method gives much +more promise of a real remedy than outside interference. + +CIVIL SERVICE + +The maintenance and extension of the classified civil service is +exceedingly important. There are nearly 550,000 persons in the executive +civil service drawing about $700,000,000 of yearly compensation. +Four-fifths of these are in the classified service. This method of +selection of the employees of the United States is especially desirable for +the Post Office Department. The Civil Service Commission has recommended +that postmasters at first, second, and third class offices be classified. +Such action, accompanied by a repeal of the four-year term of office, would +undoubtedly be an improvement. I also recommend that the field force for +prohibition enforcement be brought within the classified civil service +without covering in the present membership. The best method for selecting +public servants is the merit system. + +PUBLIC BUILDINGS + +Many of the departments in Washington need better housing facilities. Some +are so crowded that their work is impeded, others are so scattered that +they lose their identity. While I do not favor at this time a general +public building law, I believe it is now necessary, in accordance with +plans already sanctioned for a unified and orderly system for the +development of this city, to begin the carrying out of those plans by +authorizing the erection of three or four buildings most urgently needed by +an annual appropriation of $5,000,000. + +REGULATORY LEGISLATION + +Cooperation with other maritime powers is necessary for complete protection +of our coast waters from pollution. Plans for this are under way, but +await certain experiments for refuse disposal. Meantime laws prohibiting +spreading oil and oil refuse from vessels in our own territorial waters +would be most helpful against this menace and should be speedily enacted. + +Laws should be passed regulating aviation. + +Revision is needed of the laws regulating radio interference. + +Legislation and regulations establishing load liner, to provide safe +loading of vessels leaving our ports are necessary and recodification of +our navigation laws is vital. + +Revision of procedure of the Federal Trade Commission will give more +constructive purpose to this department. + +If our Alaskan fisheries are to be saved from destruction, there must be +further legislation declaring a general policy and delegating the authority +to make rules and regulations to an administrative body. + +ARMY AND NAVY + +For several years we have been decreasing the personnel of the Army and +Navy, and reducing their power to the danger point. Further reductions +should not be made. The Army is a guarantee of the security of our citizens +at home; the Navy is a guarantee of the security of our citizens abroad. +Both of these services should be strengthened rather than weakened. +Additional planes are needed for the Army, and additional submarines for +the Navy. The defenses of Panama must be perfected. We want no more +competitive armaments. We want no more war. But we want no weakness that +invites imposition. A people who neglect their national defense are putting +in jeopardy their national honor. + +INSULAR POSSESSIONS + +Conditions in the insular possessions on the whole have been good. Their +business has been reviving. They are being administered according to law. +That effort has the full support of the administration. Such +recommendations as may conic from their people or their governments should +have the most considerate attention. + +EDUCATION AND WELFARE + +Our National Government is not doing as much as it legitimately can do to +promote the welfare of the people. Our enormous material wealth, our +institutions, our whole form of society, can not be considered fully +successful until their benefits reach the merit of every individual. This +is not a suggestion that the Government should, or could, assume for the +people the inevitable burdens of existence. There is no method by which we +can either be relieved of the results of our own folly or be guaranteed a +successful life. There is an inescapable personal responsibility for the +development of character, of industry, of thrift, and of self-control. +These do not come from the Government, but from the people themselves. But +the Government can and should always be expressive of steadfast +determination, always vigilant, to maintain conditions under which these +virtues are most likely to develop and secure recognition and reward. This +is the American policy. + +It is in accordance with this principle that we have enacted laws for the +protection of the public health and have adopted prohibition in narcotic +drugs and intoxicating liquors. For purposes of national uniformity we +ought to provide, by constitutional amendment and appropriate legislation, +for a limitation of child labor, and in all cases under the exclusive +jurisdiction of the Federal Government a minimum wage law for women, which +would undoubtedly find sufficient power of enforcement in the influence of +public opinion. + +Having in mind that education is peculiarly a local problem, and that it +should always be pursued with the largest freedom of choice by students and +parents, nevertheless, the Federal Government might well give the benefit +of its counsel and encouragement more freely in this direction. If anyone +doubts the need of concerted action by the States of the Nation for this +purpose, it is only necessary to consider the appalling figures of +illiteracy representing a condition which does not vary much in all parts +of the Union. I do not favor the making of appropriations from the National +Treasury to be expended directly on local education, but I do consider it a +fundamental requirement of national activity which, accompanied by allied +subjects of welfare, is worthy of a separate department and a place in the +Cabinet. The humanitarian side of government should not be repressed, but +should be cultivated. + +Mere intelligence, however, is not enough. Enlightenment must be +accompanied by that moral power which is the product of the home and of +rebellion. Real education and true welfare for the people rest inevitably +on this foundation, which the Government can approve and commend, but which +the people themselves must create. + +IMMIGRATION + +American institutions rest solely on good citizenship. They were created by +people who had a background of self-government. New arrivals should be +limited to our capacity to absorb them into the ranks of good citizenship. +America must be kept American. For this purpose, it is necessary to +continue a policy of restricted immigration. It would be well to make such +immigration of a selective nature with some inspection at the source, and +based either on a prior census or upon the record of naturalization. Either +method would insure the admission of those with the largest capacity and +best intention of becoming citizens. I am convinced that our present +economic and social conditions warrant a limitation of those to be +admitted. We should find additional safety in a law requiring the immediate +registration of all aliens. Those who do not want to be partakers of the +American spirit ought not to settle in America. + +VETERANS + +No more important duty falls on the Government of the United States than +the adequate care of its veterans. Those suffering disabilities incurred in +the service must have sufficient hospital relief and compensation. Their +dependents must be supported. Rehabilitation and vocational training must +be completed. All of this service must be clean, must be prompt and +effective, and it must be administered in a spirit of the broadest and +deepest human sympathy. If investigation reveals any present defects of +administration or need Of legislation, orders will be given for the +immediate correction of administration, and recommendations for legislation +should be given the highest preference. + +At present there are 9,500 vacant beds in Government hospitals, I recommend +that all hospitals be authorized at once to receive and care for, without +hospital pay, the veterans of all wars needing such care, whenever there +are vacant beds, and that immediate steps be taken to enlarge and build new +hospitals to serve all such cases. + +The American Legion will present to the Congress a legislative program +too extensive for detailed discussion here. It is a carefully matured plan. +While some of it I do not favor, with much of it I am in hearty accord, and +I recommend that a most painstaking effort be made to provide remedies for +any defects in the administration of the present laws which their +experience has revealed. The attitude of the Government toward these +proposals should be one of generosity. But I do not favor the granting of a +bonus. + +COAL + +The cost of coal has become unbearably high. It places a great burden on +our industrial and domestic life. The public welfare requires a reduction +in the price of fuel. With the enormous deposits in existence, failure of +supply ought not to be tolerated. Those responsible for the conditions in +this industry should undertake its reform and free it from any charge of +profiteering. + +The report of the Coal Commission will be before the Congress. It comprises +all the facts. It represents the mature deliberations and conclusions of +the best talent and experience that ever made a national survey of the +production and distribution of fuel. I do not favor Government ownership or +operation of coal mines. The need is for action under private ownership +that will secure greater continuity of production and greater public +protection. The Federal Government probably has no peacetime authority to +regulate wages, prices, or profits in coal at the mines or among dealers, +but by ascertaining and publishing facts it can exercise great influence. + +The source of the difficulty in the bituminous coal fields is the +intermittence of operation which causes great waste of both capital and +labor. That part of the report dealing with this problem has much +significance, and is suggestive of necessary remedies. By amending, the car +rules, by encouraging greater unity of ownership, and possibly by +permitting common selling agents for limited districts on condition that +they accept adequate regulations and guarantee that competition between +districts be unlimited, distribution, storage, and continuity ought to be +improved. + +The supply of coal must be constant. In case of its prospective +interruption, the President should have authority to appoint a commission +empowered to deal with whatever emergency situation might arise, to aid +conciliation and voluntary arbitration, to adjust any existing or +threatened controversy between the employer and the employee when +collective bargaining fails, and by controlling distribution to prevent +profiteering in this vital necessity. This legislation is exceedingly +urgent, and essential to the exercise of national authority for the +protection of the people. Those who undertake the responsibility of +management or employment in this industry do so with the full knowledge +that the public interest is paramount, and that to fail through any motive +of selfishness in its service is such a betrayal of duty as warrants +uncompromising action by the Government. + +REORGANIZATION + +A special joint committee has been appointed to work out a plan for a +reorganization of the different departments and bureaus of the Government +more scientific and economical than the present system. With the exception +of the consolidation of the War and Navy Departments and some minor +details, the plan has the general sanction of the President and the +Cabinet. It is important that reorganization be enacted into law at the +present session. + +AGRICULTURE + +Aided by the sound principles adopted by the Government, the business of +the country has had an extraordinary revival. Looked at as a whole, the +Nation is in the enjoyment of remarkable prosperity. Industry and commerce +are thriving. For the most tart agriculture is successful, eleven staples +having risen in value from about $5,300,000,000 two years ago to about. +$7,000,000,000 for the current year. But range cattle are still low in +price, and some sections of the wheat area, notably Minnesota, North +Dakota, and on west, have many cases of actual distress. With his products +not selling on a parity with the products of industry, every sound remedy +that can be devised should be applied for the relief of the farmer. He +represents a character, a type of citizenship, and a public necessity that +must be preserved and afforded every facility for regaining prosperity. + +The distress is most acute among those wholly dependent upon one crop.. +Wheat acreage was greatly expanded and has not yet been sufficiently +reduced. A large amount is raised for export, which has to meet the +competition in the world market of large amounts raised on land much +cheaper and much more productive. + +No complicated scheme of relief, no plan for Government fixing of prices, +no resort to the public Treasury will be of any permanent value in +establishing agriculture. Simple and direct methods put into operation by +the farmer himself are the only real sources for restoration. + +Indirectly the farmer must be relieved by a reduction of national and local +taxation. He must be assisted by the reorganization of the freight-rate +structure which could reduce charges on his production. To make this fully +effective there ought to be railroad consolidations. Cheaper fertilizers +must be provided. + +He must have organization. His customer with whom he exchanges products o +he farm for those of industry is organized, labor is organized, business is +organized, and there is no way for agriculture to meet this unless it, too, +is organized. The acreage of wheat is too large. Unless we can meet the +world market at a profit, we must stop raising for export. Organization +would help to reduce acreage. Systems of cooperative marketing created by +the farmers themselves, supervised by competent management, without doubt +would be of assistance, but, the can not wholly solve the problem. Our +agricultural schools ought to have thorough courses in the theory of +organization and cooperative marketing. + +Diversification is necessary. Those farmers who raise their living on their +land are not greatly in distress. Such loans as are wisely needed to assist +buying stock and other materials to start in this direction should be +financed through a Government agency as a temporary and emergency +expedient. + +The remaining difficulty is the disposition of exportable wheat. I do not +favor the permanent interference of the Government in this problem. That +probably would increase the trouble by increasing production. But it seems +feasible to provide Government assistance to exports, and authority should +be given the War Finance Corporation to grant, in its discretion, the most +liberal terms of payment for fats and grains exported for the direct +benefit of the farm. + +MUSCLE SHOALS + +The Government is undertaking to develop a great water-power project known +as Muscle Shoals, on which it has expended many million dollars. The work +is still going on. Subject to the right to retake in time of war, I +recommend that this property with a location for auxiliary steam plant and +rights of way be sold. This would end the present burden of expense and +should return to the Treasury the largest price possible to secure. + +While the price is an important element, there is another consideration +even more compelling. The agriculture of the Nation needs a greater supply +and lower cost of fertilizer. This is now imported in large quantities. The +best information I can secure indicates that present methods of power +production would not be able profitably to meet the price at which these +imports can be sold. To obtain a supply from this water power would require +long and costly experimentation to perfect a process for cheap production. +Otherwise our purpose would fail completely. It seems desirable, therefore, +in order to protect and promote the public welfare, to have adequate +covenants that such experimentation be made and carried on to success. The +great advantage of low-priced nitrates must be secured for the direct +benefit of the farmers and the indirect benefit of the public in time of +peace, and of the Government in time of war. If this main object be +accomplished, the amount of money received for the property is not a +primary or major consideration. + +Such a solution will involve complicated negotiations, and there is no +authority for that purpose. I therefore recommend that the Congress +appoint a small joint committee to consider offers, conduct negotiations, +and report definite recommendations. + +RECLAMATION + +By reason of many contributing causes, occupants of our reclamation +projects are in financial difficulties, which in some cases are acute. +Relief should be granted by definite authority of law empowering the +Secretary of the Interior in his discretion to suspend, readjust, and +reassess all charges against water users. This whole question is being +considered by experts. You will have the advantage of the facts and +conclusions which they may develop. This situation, involving a Government +investment of more than $135,000,000, and affecting more than 30,000 water +users, is serious. While relief which is necessary should be granted, yet +contracts with the Government which can be met should be met. The +established general policy of these projects should not be abandoned for +any private control. + +HIGHWAYS AND FORESTS + +Highways and reforestation should continue to have the interest and support +of the Government. Everyone is anxious for good highways. I have made a +liberal proposal in the Budget for the continuing payment to the States by +the Federal Government of its share for this necessary public improvement. +No expenditure of public money contributes so much to the national wealth +as for building good roads. + +Reforestation has an importance far above the attention it usually secures. +A special committee of the Senate is investigating this need, and I shall +welcome a constructive policy based on their report. + +It is 100 years since our country announced the Monroe doctrine. This +principle has been ever since, and is now, one of the main foundations of +our foreign relations. It must be maintained. But in maintaining it we must +not be forgetful that a great change has taken place. We are no longer a +weak Nation, thinking mainly of defense, dreading foreign imposition. We +are great and powerful. New powers bring new responsibilities. Our ditty +then was to protect ourselves. Added to that, our duty now is to help give +stability to the world. We want idealism. We want that vision which lifts +men and nations above themselves. These are virtues by reason of their own +merit. But they must not be cloistered; they must not be impractical; they +must not be ineffective. + +The world has had enough of the curse of hatred and selfishness, of +destruction and war. It has had enough of the wrongful use of material +power. For the healing of the nations there must be good will and charity, +confidence and peace. The time has come for a more practical use of moral +power, and more reliance upon the principle that right makes its own might. +Our authority among the nations must be represented by justice and mercy. +It is necessary not only to have faith, but to make sacrifices for our +faith. The spiritual forces of the world make all its final determinations. +It is with these voices that America should speak. Whenever they declare a +righteous purpose there need be no doubt that they will be heard. America +has taken her place in the world as a Republic--free, independent, +powerful. The best service that can be rendered to humanity is the +assurance that this place will be maintained. + +*** + +State of the Union Address +Calvin Coolidge +December 3, 1924 + +To the Congress of the United States: + +The present state of the Union, upon which it is customary for the +President to report to the Congress under the provisions of the +Constitution, is such that it may be regarded with encouragement and +satisfaction by every American. Our country is almost unique in its ability +to discharge fully and promptly all its obligations at home and abroad, and +provide for all its inhabitants an increase in material resources, in +intellectual vigor and in moral power. The Nation holds a position +unsurpassed in all former human experience. This does not mean that we do +not have any problems. It is elementary that the increasing breadth of our +experience necessarily increases the problems of our national life. But it +does mean that if all will but apply ourselves industriously and honestly, +we have ample powers with which to meet our problems and provide for I heir +speedy solution. I do not profess that we can secure an era of perfection +in human existence, but we can provide an era of peace and prosperity, +attended with freedom and justice and made more and more satisfying by the +ministrations of the charities and humanities of life. + +Our domestic problems are for the most part economic. We have our enormous +debt to pay, and we are paying it. We have the high cost of government to +diminish, and we are diminishing it. We have a heavy burden of taxation to +reduce, and we are reducing it. But while remarkable progress has been made +in these directions, the work is yet far from accomplished. We still owe +over $21,000,000,000, the cost of the National Government is still about +$3,500,000,000, and the national taxes still amount to about $27 for each +one of our inhabitants. There yet exists this enormous field for the +application of economy. + +In my opinion the Government can do more to remedy the economic ills of the +people by a system of rigid economy in public expenditure than can be +accomplished through any other action. The costs of our national and local +governments combined now stand at a sum close to $100 for each inhabitant +of the land. A little less than one-third of this is represented by +national expenditure, and a little more than two-thirds by local +expenditure. It is an ominous fact that only the National Government is +reducing its debt. Others are increasing theirs at about $1,000,000,000 +each year. The depression that overtook business, the disaster experienced +in agriculture, the lack of employment and the terrific shrinkage in all +values which our country experienced in a most acute form in 1920, resulted +in no small measure from the prohibitive taxes which were then levied on +all productive effort. The establishment of a system of drastic economy in +public expenditure, which has enabled us to pay off about one-fifth of the +national debt since 1919, and almost cut in two the national tax burden +since 1921, has been one of the main causes in reestablishing a prosperity +which has come to include within its benefits almost every one of our +inhabitants. Economy reaches everywhere. It carries a blessing to +everybody. + +The fallacy of the claim that the costs of government are borne by the rich +and those who make a direct contribution to the National Treasury can not +be too often exposed. No system has been devised, I do not think any system +could be devised, under which any person living in this country could +escape being affected by the cost of our government. It has a direct effect +both upon the rate and the purchasing power of wages. It is felt in the +price of those prime necessities of existence, food, clothing, fuel and +shelter. It would appear to be elementary that the more the Government +expends the more it must require every producer to contribute out of his +production to the Public Treasury, and the less he will have for his own +benefit. The continuing costs of public administration can be met in only +one way--by the work of the people. The higher they become, the more the +people must work for the Government. The less they are, the more the people +can work for themselves. + +The present estimated margin between public receipts and expenditures for +this fiscal year is very small. Perhaps the most important work that this +session of the Congress can do is to continue a policy of economy and +further reduce the cost of government, in order that we may have a +reduction of taxes for the next fiscal year. Nothing is more likely to +produce that public confidence which is the forerunner and the mainstay of +prosperity, encourage and enlarge business opportunity with ample +opportunity for employment at good wages, provide a larger market for +agricultural products, and put our country in a stronger position to be +able to meet the world competition in trade, than a continuing policy of +economy. Of course necessary costs must be met, proper functions of the +Government performed, and constant investments for capital account and +reproductive effort must be carried on by our various departments. But the +people must know that their Government is placing upon them no unnecessary +burden. + +TAXES + +Everyone desires a reduction of taxes, and there is a great preponderance +of sentiment in favor of taxation reform. When I approved the present tax +law, I stated publicly that I did so in spite of certain provisions which I +believed unwise and harmful. One of the most glaring of these was the +making public of the amounts assessed against different income-tax payers. +Although that damage has now been done, I believe its continuation to be +detrimental To the public welfare and bound to decrease public revenues, so +that it ought to be repealed. + +Anybody can reduce taxes, but it is not so easy to stand in the gap and +resist the passage of increasing appropriation bills which would make tax +reduction impossible. It will be very easy to measure the strength of the +attachment to reduced taxation by the power with which increased +appropriations are resisted. If at the close of the present session the +Congress has kept within the budget which I propose to present, it will +then be possible to have a moderate amount of tax reduction and all the tax +reform that the Congress may wish for during the next fiscal year. The +country is now feeling the direct stimulus which came from the passage of +the last revenue bill, and under the assurance of a reasonable system of +taxation there is every prospect of an era of prosperity of unprecedented +proportions. But it would be idle to expect any such results unless +business can continue free from excess profits taxation and be accorded a +system of surtaxes at rates which have for their object not the punishment +of success or the discouragement of business, but the production of the +greatest amount of revenue from large incomes. I am convinced that the +larger incomes of the country would actually yield more revenue to the +Government if the basis of taxation were scientifically revised downward. +Moreover the effect of the present method of this taxation is to increase +the cost of interest on productive enterprise and to increase the burden +of rent. It is altogether likely that such reduction would so encourage and +stimulate investment that it would firmly establish our country in the +economic leadership of the world. + +WATERWAYS + +Meantime our internal development should go on. Provision should be made +for flood control of such rivers as the Mississippi and the Colorado, and +for the opening up of our inland waterways to commerce. Consideration is +due to the project of better navigation from the Great Lakes to the Gulf. +Every effort is being made to promote an agreement with Canada to build +the, St. Lawrence waterway. There are pending before the Congress bills for +further development of the Mississippi Basin, for the taking over of the +Cape Cod Canal in accordance with a moral obligation which seems to have +been incurred during the war, and for the improvement of harbors on both +the Pacific and the Atlantic coasts. While this last should be divested of +some of its projects and we must proceed slowly, these bills in general +have my approval. Such works are productive of wealth and in the long run +tend to a reduction of the tax burden. + +RECLAMATION + +Our country has a well defined policy of reclamation established under +statutory authority. This policy should be continued and made a +self-sustaining activity administered in a manner that will meet local +requirements and bring our and lands into a profitable state of cultivation +as fast as there is a market for their products. Legislation is pending +based on the report of the Fact Finding Commission for the proper relief of +those needing extension of time in which to meet their payments on +irrigated land, and for additional amendments and reforms of our +reclamation laws, which are all exceedingly important and should be enacted +at once. + +No more important development has taken place in the last year than the +beginning of a restoration of agriculture to a prosperous condition. We +must permit no division of classes in this country, with one occupation +striving to secure advantage over another. Each must proceed under open +opportunities and with a fair prospect of economic equality. The Government +can not successfully insure prosperity or fix prices by legislative fiat. +Every business has its risk and its times of depression. It is well known +that in the long run there will be a more even prosperity and a more +satisfactory range of prices under the natural working out of economic laws +than when the Government undertakes the artificial support of markets and +industries. Still we can so order our affairs, so protect our own people +from foreign competition, so arrange our national finances, so administer +our monetary system, so provide for the extension of credits, so improve +methods of distribution, as to provide a better working machinery for the +transaction of the business of the Nation with the least possible friction +and loss. The Government has been constantly increasing its efforts in +these directions for the relief and permanent establishment of agriculture +on a sound and equal basis with other business. + +It is estimated that the value of the crops for this harvest year may reach +$13,000,000,000, which is an increase of over $3,000,000,000 in three +years. It compares with $7,100,000,000 in 1913, and if we make deduction +from the figures of 1924 for the comparatively decreased value of the +dollar, the yield this year still exceeds 1913 in purchasing power by over +$1,000,000,000, and in this interval there has been no increase in the +number of farmers. Mostly by his own effort the farmer has decreased the +cost of production. A marked increase in the price of his products and some +decrease in the price of his supplies has brought him about to a parity +with the rest of the Nation. The crop area of this season is estimated at +370,000,000 acres, which is a decline of 3,000,000 acres from last year, +and 6,000,000 acres from 1919. This has been a normal and natural +application of economic laws, which has placed agriculture on a foundation +which is undeniably sound and beginning to be satisfactory. + +A decrease in the world supply of wheat has resulted in a very large +increase in the price of that commodity. The position of all agricultural +products indicates a better balanced supply, but we can not yet conclude +that agriculture is recovered from the effects of the war period or that it +is permanently on a prosperous basis. The cattle industry has not yet +recovered and in some sections has been suffering from dry weather. Every +effort must be made both by Government activity and by private agencies to +restore and maintain agriculture to a complete normal relationship with +other industries. + +It was on account of past depression, and in spite of present more +encouraging conditions, that I have assembled an Agricultural Conference +made up of those who are representative of this great industry in both its +operating and economic sides. Everyone knows that the great need of the +farmers is markets. The country is not suffering on the side of production. +Almost the entire difficulty is on the side of distribution. This reaches +back, of course, to unit costs and diversification, and many allied +subjects. It is exceedingly intricate, for our domestic and foreign trade, +transportation and banking, and in fact our entire economic system, are +closely related to it. In time for action at this session, I hope to report +to the Congress such legislative remedies as the conference may recommend. +An appropriation should be made to defray their necessary expenses. + +MUSCLE SHOALS + +The production of nitrogen for plant food in peace and explosives in war is +more and more important. It is one of the chief sustaining elements of +life. It is estimated that soil exhaustion each year is represented by +about 9,000,000 tons and replenishment by 5,450,000 tons. The deficit of +3,550,000 tons is reported to represent the impairment of 118,000,000 acres +of farm lands each year. + +To meet these necessities the Government has been developing a water power +project at Muscle Shoals to be equipped to produce nitrogen for explosives +and fertilizer. It is my opinion that the support of agriculture is the +chief problem to consider in connection with this property. It could by no +means supply the present needs for nitrogen, but it would help and its +development would encourage bringing other water powers into like use. + +Several offers have been made for the purchase of this property. Probably +none of them represent final terms. Much costly experimentation is +necessary to produce commercial nitrogen. For that reason it is a field +better suited to private enterprise than to Government operation. I should +favor a sale of this property, or long-time lease, tinder rigid guaranties +of commercial nitrogen production at reasonable prices for agricultural +use. There would be a surplus of power for many years over any possibility +of its application to a developing manufacture of nitrogen. It may be found +advantageous to dispose of the right to surplus power separately with such +reservations as will allow its gradual withdrawal and application to +nitrogen manufacture. A subcommittee of the Committees on Agriculture +should investigate this field and negotiate with prospective purchasers. If +no advantageous offer be made, the development should continue and the +plant should be dedicated primarily to the production of materials for the +fertilization of the soil. + +RAILWAYS + +The railways during the past year have made still further progress in +recuperation from the war, with large rains in efficiency and ability +expeditiously to handle the traffic of the country. We have now passed +through several periods of peak traffic without the car shortages which so +frequently in the past have brought havoc to our agriculture and +industries. The condition of many of our great freight terminals is still +one of difficulty and results in imposing, large costs on the public for +inward-bound freight, and on the railways for outward-bound freight. Owing +to the growth of our large cities and the great increase in the volume of +traffic, particularly in perishables, the problem is not only difficult of +solution, but in some cases not wholly solvable by railway action alone. + +In my message last year I emphasized the necessity for further legislation +with a view to expediting the consolidation of our rail ways into larger +systems. The principle of Government control of rates and profits, now +thoroughly imbedded in our governmental attitude toward natural monopolies +such as the railways, at once eliminates the need of competition by small +units as a method of rate adjustment. Competition must be preserved as a +stimulus to service, but this will exist and can be increased tinder +enlarged systems. Consequently the consolidation of the railways into +larger units for the purpose of securing the substantial values to the +public which will come from larger operation has been the logical +conclusion of Congress in its previous enactments, and is also supported by +the best opinion in the country. Such consolidation will assure not only a +greater element of competition as to service, but it will afford economy in +operation, greater stability in railway earnings, and more economical +financing. It opens large possibilities of better equalization of rates +between different classes of traffic so as to relieve undue burdens upon +agricultural products and raw materials generally, which are now not +possible without ruin to small units owing to the lack of diversity of +traffic. It would also tend to equalize earnings in such fashion as to +reduce the importance of section 15A, at which criticism, often misapplied, +has been directed. A smaller number of units would offer less difficulties +in labor adjustments and would contribute much to the, solution of terminal +difficulties. + +The consolidations need to be carried out with due regard to public +interest and to the rights and established life of various communities in +our country. It does not seem to me necessary that we endeavor to +anticipate any final plan or adhere to an artificial and unchangeable +project which shall stipulate a fixed number of systems, but rather we +ought to approach the problem with such a latitude of action that it can be +worked out step by step in accordance with a comprehensive consideration of +public interest. Whether the number of ultimate systems shall be more or +less seems to me can only be determined by time and actual experience in +the development of such consolidations. + +Those portions of the present law contemplating consolidations ore not, +sufficiently effective in producing expeditious action and need +amplification of the authority of the Interstate Commerce Commission, +particularly in affording a period for voluntary proposals to the +commission and in supplying Government pressure to secure action after the +expiration of such a period. + +There are other proposals before Congress for amending the transportation +acts. One of these contemplates a revision of the method of valuation for +rate-making purposes to be followed by a renewed valuation of the railways. +The valuations instituted by the Interstate Commerce Commission 10 years +ago have not yet been completed. They have cost the Government an enormous +sum, and they have imposed great expenditure upon the railways, most of +which has in effect come out of the public in increased rates. This work +should not be abandoned or supplanted until its results are known and can +be considered. + +Another matter before the Congress is legislation affecting the labor +sections of the transportation act. Much criticism has been directed at the +workings of this section and experience has shown that some useful +amendment could be made to these provisions. + +It would be helpful if a plan could be adopted which, while retaining the +practice of systematic collective bargaining with conciliation voluntary +arbitration of labor differences, could also provide simplicity in +relations and more direct local responsibility of employees and managers. +But such legislation will not meet the requirements of the situation unless +it recognizes the principle that t e public has a right to the +uninterrupted service of transportation, and therefore a right to be heard +when there is danger that the Nation may suffer great injury through the +interruption of operations because of labor disputes. If these elements are +not comprehended in proposed legislation, it would be better to gain +further experience with the present organization for dealing with these +questions before undertaking a change. + +SHIPPING BOARD + +The form of the organization of the Shipping Board was based originally on +its functions as a semi judicial body in regulation of rates. During the +war it was loaded with enormous administrative duties. It has been +demonstrated time and again that this form of organization results in +indecision, division of opinion and administrative functions, which make a +wholly inadequate foundation for the conduct of a great business +enterprise. The first principle in securing the objective set out by +Congress in building up the American merchant marine upon the great trade +routes and subsequently disposing of it into private operation can not +proceed with effectiveness until the entire functions of the board are +reorganized. The immediate requirement is to transfer into the Emergency +Fleet, Corporation the whole responsibility of operation of the fleet and +other property, leaving to the Shipping Board solely the duty of +determining certain major policies which require deliberative action. + +The procedure under section 28 of the merchant marine act has created great +difficulty and threatened friction during the past 12 months. Its attempted +application developed not only great opposition from exporters, +particularly as to burdens that may be imposed upon agricultural products, +but also great anxiety in the different seaports as to the effect upon +their relative rate structures. This trouble will certainly recur if action +is attempted under this section. It is uncertain in some of its terms and +of great difficulty in interpretation. + +It is my belief that action under this section should be suspended until +the Congress can reconsider the entire question in the light of the +experience that has been developed since its enactment. + +NATIONAL ELECTIONS + +Nothing is so fundamental to the integrity of a republican form of +government as honesty in all that relates to the conduct of elections. I am +of the opinion that the national laws governing the choice of members of +the Congress should be extended to include appropriate representation of +the respective parties at the ballot box ant equality of representation on +the various registration boards, wherever they exist. + +THE JUDICIARY + +The docket of the Supreme Court is becoming congested. At the opening term +last year it had 592 cases, while this year it had 687 cases. Justice long +delayed is justice refused. Unless the court be given power by preliminary +and summary consideration to determine the importance of cases, and by +disposing of those which are not of public moment reserve its time for the +more extended consideration of the remainder, the congestion of the docket +is likely to increase. It is also desirable that Supreme Court should have +power to improve and reform procedure in suits at law in the Federal courts +through the adoption of appropriate rules. The Judiciary Committee of the +Senate has reported favorably upon two bills providing for these reforms +which should have the immediate favorable consideration of the Congress. + +I further recommend that provision be made for the appointment of a +commission, to consist of two or three members of the Federal judiciary and +as many members of the bar, to examine the present criminal code of +procedure and recommend to the Congress measures which may reform and +expedite court procedure in the administration and enforcement of our +criminal laws. + +PRISON REFORM + +Pending before the Congress is a bill which has already passed one House +providing for a reformatory to which could be committed first offenders and +young men for the purpose of segregating them from contact with banned +criminals and providing them with special training in order to reestablish +in them the power to pursue a law-abiding existence in the social and +economic life of the Nation. This is a matter of so much importance as to +warrant the early attention of the present session. Further provision +should also be made, for a like reason, for a separate reformatory for +women. + +NATIONAL POLICE BUREAU + +Representatives of the International Police Conference will bring to t e +attention of the Congress a proposal for the establishment of a national +police bureau. Such action would provide a central point for gathering, +compiling, and later distributing to local police authorities much +information which would be helpful in the prevention and detection of +crime. I believe this bureau is needed, and I recommend favorable +consideration of this proposal. + +DISTRICT OF COLUMBIA WELFARE + +The welfare work of the District of Columbia is administered by several +different boards dealing with charities and various correctional efforts. +It would be an improvement if this work were consolidated and placed under +the direction of a single commission. + +FRENCH SPOLIATION CLAIMS + +During the last session of the Congress legislation was introduced looking +to the payment of the remaining claims generally referred to as the French +spoliation claims. The Congress has provided for the payment of many +similar claims. Those that remain unpaid have been long pending. The +beneficiaries thereunder have every reason to expect payment. These claims +have been examined by the Court of Claims and their validity and amount +determined. The United States ought to pay its debts. I recommend action by +the Congress which will permit of the payment of these remaining claims. + +THE WAGE EARNER + +Two very important policies have been adopted by this country which, while +extending their benefits also in other directions, have been of the utmost +importance to the wage earners. One of these is the protective tariff, +which enables our people to live according to a better standard and receive +a better rate of compensation than any people, any time, anywhere on earth, +ever enjoyed. This saves the American market for the products of the +American workmen. The other is a policy of more recent origin and seeks to +shield our wage earners from the disastrous competition of a great influx +of foreign peoples. This has been done by the restrictive immigration law. +This saves the American job for the American workmen. I should like to see +the administrative features of this law rendered a little more humane for +the purpose of permitting those already here a greater latitude in securing +admission of members of their own families. But I believe this law in +principle is necessary and sound, and destined to increase greatly the +public welfare. We must maintain our own economic position, we must defend +our own national integrity. + +It is gratifying to report that the progress of industry, the enormous +increase in individual productivity through labor-saving devices, and the +high rate of wages have all combined to furnish our people in general with +such an abundance not only of the necessaries but of the conveniences of +life that we are by a natural evolution solving our problems of economic +and social justice. + +THE NEGRO + +These developments have brought about a very remarkable improvement in the +condition of the negro race. Gradually, but surely, with the almost +universal sympathy of those among whom they live, the colored people are +working out their own destiny. I firmly believe that it is better for all +concerned that they should be cheerfully accorded their full constitutional +rights, that they should be protected from all of those impositions to +which, from their position, they naturally fall a prey, especially from the +crime of lynching and that they should receive every encouragement to +become full partakers in all the blessings of our common American +citizenship. + +CIVIL SERVICE + +The merit system has long been recognized as the correct basis for +employment in our, civil service. I believe that first second, and third +class postmasters, and without covering in the present membership the +field force of prohibition enforcement, should be brought within the +classified service by statute law. Otherwise the Executive order of one +administration is changed by the Executive order of another administration, +and little real progress is made. Whatever its defects, the merit system is +certainly to be preferred to the spoils system. + +DEPARTMENTAL REORGANIZATION + +One way to save public money would be to pass the pending bill for the +reorganization of the various departments. This project has been pending +for some time, and has had the most careful consideration of experts and +the thorough study of a special congressional committee. This legislation +is vital as a companion piece to the Budget law. Legal authority for a +thorough reorganization of the Federal structure with some latitude of +action to the Executive in the rearrangement of secondary functions would +make for continuing economy in the shift of government activities which +must follow every change in a developing country. Beyond this many of the +independent agencies of the Government must be placed under responsible +Cabinet officials, if we are to have safeguards of efficiency, economy, and +probity. + +ARMY AND NAVY + +Little has developed in relation to our national defense which needs +special attention. Progress is constantly being made in air navigation and +requires encouragement and development. Army aviators have made a +successful trip around the world, for which I recommend suitable +recognition through provisions for promotion, compensation, and retirement. +Under the direction of the Navy a new Zeppelin has been successfully +brought from Europe across the Atlantic to our own country. + +Due to the efficient supervision of the Secretary of War the Army of the +United States has been organized with a small body of Regulars and a +moderate National Guard and Reserve. The defense test of September 12 +demonstrated the efficiency of the operating plans. These methods and +operations are well worthy of congressional support. + +Under the limitation of armaments treaty a large saving in outlay and a +considerable decrease in maintenance of the Navy has been accomplished. We +should maintain the policy of constantly working toward the full treaty +strength of the Navy. Careful investigation is being made in this +department of the relative importance of aircraft, surface and submarine +vessels, in order that we may not fail to take advantage of all modern +improvements for our national defense. A special commission also is +investigating the problem of petroleum oil for the Navy, considering the +best policy to insure the future supply of fuel oil and prevent the +threatened drainage of naval oil reserves. Legislative action is required +to carry on experiments in oil shale reduction, as large deposits of this +type have been set aside for the use of the Navy. + +We have been constantly besought to engage in competitive armaments. +Frequent reports will reach us of the magnitude of the military equipment +of other, nations. We shall do well to be little impressed by such reports +or such actions. Any nation undertaking to maintain a military +establishment with aggressive and imperialistic designs will find itself +severely handicapped in the economic development of the world. I believe +thoroughly in the Army and Navy, in adequate defense and preparation. But I +am opposed to any policy of competition in building and maintaining land or +sea armaments. + +Our country has definitely relinquished the old standard of dealing with +other countries by terror and force, and is definitely committed to the new +standard of dealing with them through friendship and understanding. This +new policy should be constantly kept in mind by the guiding forces of the +Army and Navy, by the. Congress and by the country at large. I believe it +holds a promise of great benefit to humanity. I shall resist any attempt to +resort to the old methods and the old standards. I am especially solicitous +that foreign nations should comprehend the candor and sincerity with which +we have adopted this position. While we propose to maintain defensive and +supplementary police forces by land and sea, and to train them through +inspections and maneuvers upon appropriate occasions in order to maintain +their efficiency, I wish every other nation to understand that this does +not express any unfriendliness or convey any hostile intent. I want the +armed forces of America to be considered by all peoples not as enemies but +as friends as the contribution which is made by this country for the +maintenance of the peace and security of the world. + +VETERANS + +With the authorization for general hospitalization of the veterans of all +wars provided during the present year, the care and treatment of those who +have served their country in time of peril and the attitude of the +Government toward them is not now so much one of needed legislation as one +of careful, generous and humane administration. It will ever be recognized +that their welfare is of the first concern and always entitled to the most +solicitous consideration oil the part of their fellow citizens. They are +organized in various associations, of which the chief and most +representative is the American Legion. Through its officers the Legion will +present to the Congress numerous suggestions for legislation. They cover +such a wide variety of subjects that it is impossible to discuss them +within the scope of this message. With many of the proposals I join in +hearty approval and commend them all to the sympathetic investigation and +consideration of the Congress. + +FOREIGN RELATIONS + +At no period in the past 12 years have our foreign relations been in such a +satisfactory condition as they are at the present time. Our actions in the +recent months have greatly strengthened the American policy of permanent +peace with independence. The attitude which our Government took and +maintained toward an adjustment of European reparations, by pointing out +that it wits not a political but a business problem, has demonstrated its +wisdom by its actual results. We desire to see Europe restored that it may +resume its productivity in the increase of industry and its support in the +advance of civilization. We look with great gratification at the hopeful +prospect of recuperation in Europe through the Dawes plan. Such assistance +as can be given through the action of the public authorities and of our +private citizens, through friendly counsel and cooperation, and through +economic and financial support, not for any warlike effort but for +reproductive enterprise, not to provide means for unsound government +financing but to establish sound business administration should be +unhesitatingly provided. + +Ultimately nations, like individuals, can not depend upon each other but +must depend upon themselves. Each one must work out its own salvation. We +have every desire to help. But with all our resources we are powerless to +save unless our efforts meet with a constructive response. The situation in +our own country and all over the world is one Chat can be improved only by +bard work and self-denial. It is necessary to reduce expenditures, increase +savings and liquidate debts. It is in this direction that there lies the +greatest hope of domestic tranquility and international peace. Our own +country ought to finish the leading example in this effort. Our past +adherence to this policy, our constant refusal to maintain a military +establishment that could be thought to menace the security of others, our +honorable dealings with other nations whether great or small, has left us +in the almost constant enjoyment of peace. + +It is not necessary to stress the general desire of all the people of this +country for the promotion of peace. It is the leading principle of all our +foreign relations. We have on every occasion tried to cooperate to this end +in all ways that were consistent with our proper independence and our +traditional policies. It will be my constant effort to maintain these +principles, and to reinforce them by all appropriate agreements and +treaties. While we desire always to cooperate and to help, we are equally +determined to be independent and free. Right and truth and justice and +humanitarian efforts will have the moral support of this country all over +the world. But we do not wish to become involved in the political +controversies of others. Nor is the country disposed to become a member of +the League of Nations or to assume the obligations imposed by its +covenant. + +INTERNATIONAL COURT + +America has been one of the foremost nations in advocating tribunals for +the settlement of international disputes of a justiciable character. Our +representatives took a leading in those conferences which resulted in the +establishment of e ague Tribunal, and later in providing for a Permanent +Court of International Justice. I believe it would be for the advantage of +this country and helpful to the stability of other nations for us to adhere +to the protocol establishing, that court upon the conditions stated in the +recommendation which is now before the Senate, and further that our country +shall not be bound by advisory opinions which may be, rendered by the court +upon questions which we have not voluntarily submitted for its judgment. +This court would provide a practical and convenient tribunal before which +we could go voluntarily, but to which we could not be summoned, for a +determination of justiciable questions when they fail to be resolved by +diplomatic negotiations. + +DISARMAMENT CONFERENCE + +Many times I have expressed my desire to see the work of the Washington +Conference on Limitation of Armaments appropriately supplemented by further +agreements for a further reduction M for the purpose of diminishing the +menace and waste of the competition in preparing instruments of +international war. It has been and is my expectation that we might +hopefully approach other great powers for further conference on this +subject as soon as the carrying out of the present reparation plan as the +established and settled policy of Europe has created a favorable +opportunity. But on account of proposals which have already been made by +other governments for a European conference, it will be necessary to wait +to see what the outcome of their actions may be. I should not wish to +propose or have representatives attend a conference which would contemplate +commitments opposed to the freedom of action we desire to maintain +unimpaired with respect to our purely domestic policies. + +INTERNATIONAL LAW + +Our country should also support efforts which are being made toward the +codification of international law. We can look more hopefully, in the first +instance, for research and studies that are likely to be productive of +results, to a cooperation among representatives of the bar and members of +international law institutes and societies, than to a conference of those +who are technically representative of their respective governments, +although, when projects have been developed, they must go to the +governments for their approval. These expert professional studies are going +on in certain quarters and should have our constant encouragement and +approval. + +OUTLAW OF WAR + +Much interest has of late been manifested in this country in the discussion +of various proposals to outlaw aggressive war. I look with great sympathy +upon the examination of this subject. It is in harmony with the traditional +policy of our country, which is against aggressive war and for the +maintenance of permanent and honorable peace. While, as I have said, we +must safeguard our liberty to deal according to our own judgment with our +domestic policies, we can not fail to view with sympathetic interest all +progress to this desired end or carefully to study the measures that may be +proposed to attain it. + +LATIN AMERICA + +While we are desirous of promoting peace in every quarter of the globe, we +have a special interest in the peace of this hemisphere. It is our constant +desire that all causes of dispute in this area may be tranquilly and +satisfactorily adjusted. Along with our desire for peace is the earnest +hope for the increased prosperity of our sister republics of Latin America, +and our constant purpose to promote cooperation with them which may be +mutually beneficial and always inspired by the most cordial friendships. + +FOREIGN DEBTS + +About $12,000,000,000 is due to our Government from abroad, mostly from +European Governments. Great Britain, Finland, Hungary, Lithuania and Poland +have negotiated settlements amounting close to $5,000,000,000. This +represents the funding of over 42 per cent of the debt since the creation +of the special Foreign Debt Commission. As the life of this commission is +about to expire, its term should be extended. I am opposed to the +cancellation of these debts and believe it for the best welfare of the +world that they should be liquidated and paid as fast as possible. I do not +favor oppressive measures, but unless money that is borrowed is repaid +credit can not be secured in time of necessity, and there exists besides a +moral obligation which our country can not ignore and no other country can +evade. Terms and conditions may have to conform to differences in the +financial abilities of the countries concerned, but the principle that each +country should meet its obligation admits of no differences and is of +universal application. + +It is axiomatic that our country can not stand still. It would seem to be +perfectly plain from recent events that it is determined to go forward. But +it wants no pretenses, it wants no vagaries. It is determined to advance in +an orderly, sound and common-sense way. It does not propose to abandon the +theory of the Declaration that the people have inalienable rights which no +majority and no power of government can destroy. It does not propose to +abandon the practice of the Constitution that provides for the protection +of these rights. It believes that within these limitations, which are +imposed not by the fiat of man but by the law of the Creator, +self-government is just and wise. It is convinced that it will be +impossible for the people to provide their own government unless they +continue to own their own property. + +These are the very foundations of America. On them has been erected a +Government of freedom and equality, of justice and mercy, of education and +charity. Living under it and supporting it the people have come into great +possessions on the material and spiritual sides of life. I want to continue +in this direction. I know that the Congress shares with me that desire. I +want our institutions to be more and more expressive of these principles. I +want the people of all the earth to see in the American flag the symbol of +a Government which intends no oppression at home and no aggression abroad, +which in the spirit of a common brotherhood provides assistance in time of +distress. + +*** + +State of the Union Address +Calvin Coolidge +December 8, 1925 + +Members of the Congress: + +In meeting the constitutional requirement of informing the Congress upon +the state of the Union, it is exceedingly gratifying to report that the +general condition is one of progress and prosperity. Here and there are +comparatively small and apparently temporary difficulties needing +adjustment and improved administrative methods, such as are always to be +expected, but in the fundamentals of government and business the results +demonstrate that we are going in the right direction. The country does not +appear to require radical departures from the policies already adopted so +much as it needs a further extension of these policies and the improvement +of details. The age of perfection is still in the somewhat distant future, +but it is more in danger of being retarded by mistaken Government activity +than it is from lack of legislation. We are by far the most likely to +accomplish permanent good if we proceed with moderation. + +In our country the people are sovereign and independent, and must accept +the resulting responsibilities. It is their duty to support themselves and +support the Government. That is the business of the Nation, whatever the +charity of the Nation may require. The functions which the Congress are to +discharge are not those of local government but of National Government. The +greatest solicitude should be exercised to prevent any encroachment upon +the rights of the States or their various political subdivisions. Local +self-government is one of our most precious possessions. It is the greatest +contributing factor to the stability strength liberty, and progress of the +Nation. It ought not to be in ringed by assault or undermined by purchase. +It ought not to abdicate its power through weakness or resign its authority +through favor. It does not at all follow that because abuses exist it is +the concern of the Federal Government to attempt the r reform. + +Society is in much more danger from encumbering the National Government +beyond its wisdom to comprehend, or its ability to administer, than from +leaving the local communities to bear their own burdens and remedy their +own evils. Our local habit and custom is so strong, our variety of race and +creed is so great the Federal authority is so tenuous, that the area within +which it can function successfully is very limited. The wiser policy is to +leave the localities, so far as we can, possessed of their own sources of +revenue and charged with their own obligations. + +GOVERNMENT ECONOMY + +It is a fundamental principle of our country that the people are sovereign. +While they recognize the undeniable authority of the state, they have +established as its instrument a Government of limited powers. They hold +inviolate in their own hands the jurisdiction over their own freedom and +the ownership of their own property. Neither of these can be impaired +except by due process of law. The wealth of our country is not public +wealth, but private wealth. It does not belong to the Government, it +belongs to the people. The Government has no justification in taking +private Property except for a public purpose. It is always necessary to +keep these principles in mind in the laying of taxes and in the making of +appropriations. No right exists to levy on a dollar, or to order the +expenditure of a dollar, of the money of the people, except for a necessary +public purpose duly authorized by the Constitution. The power over the +purse is the power over liberty. + +That is the legal limitation within which the Congress can act, How it +will, proceed within this limitation is always a question of policy. When +the country is prosperous and free from debt, when the rate of taxation is +low, opportunity exists for assuming new burdens and undertaking new +enterprises. Such a condition now prevails only to a limited extent. All +proposals for assuming new obligations ought to be postponed, unless they +are reproductive capital investments or are such as are absolutely +necessary at this time. We still have an enormous debt of over +$20,000,000,000, on which the interest and sinking-fund requirements are +$1,320,000,000. Our appropriations for the Pension Office and the Veterans' +Bureau are $600,000,000. The War and Navy Departments call for +$642,000,000. Other requirements, exclusive of the Post Office which is +virtually self-sustaining, brought the appropriations for the current year +up to almost $3,100,060,000. This shows an expenditure of close to $30 for +every inhabitant of our country. For the average family of five it means a +tax, directly or indirectly paid, of about $150 for national purposes +alone. The local tax adds much more. These enormous expenditures ought not +to be increased, but through every possible effort they ought to be +reduced. + +Only one of these great items can be ultimately extinguished. That is the +item of our war debt. Already this has been reduced to about +$6,000,000,000, which means an annual saving in interest of close to +$250,000,000. The present interest charge is about $820,000,000 yearly. It +would seem to be obvious that the sooner this debt can be retired the more +the taxpayers will save in interest and the easier it will be to secure +funds with which to prosecute needed running expenses, constructions, and +improvements. This item of $820,000,000 for interest is a heavy charge on +all the people of the country, and it seems to me that we might well +consider whether it is not greatly worth while to dispense with it as early +as possible by retiring the principal debt which it is required to serve. + +It has always been our policy to retire our debts. That of the +Revolutionary War period, notwithstanding the additions made in 1812, was +paid by 1835. and the Civil War debt within 23 years. Of the amount already +paid, over $1,000,000,000 is a reduction in cash balances. That source is +exhausted. Over one and two-thirds billions of dollars was derived from +excess receipts. Tax reduction eliminates that. The sale of surplus war +materials has been another element of our income. That is practically +finished. With these eliminated, the reduction of the debt has been only +about $500,000,000 each year, not an excessive sum on so large a debt. + +Proposals have been made to extend the payment over a period of 62 years. +If $1,000,000,000 is paid at the end of 20 years, the cost to the taxpayers +is the principal and, if the interest is 4% per cent, a total of +$1,850,000,000. If the same sum is paid at the end of 62 years, the cost is +$3,635,000,000, or almost double. Here is another consideration: Compared +with its purchasing power in 1913, the dollar we borrowed represented but +52 cents. As the value of our dollar increases, due to the falling prices +of commodities, the burden of our debt increases. It has now risen to 631/2 +cents. The taxpayer will be required to produce nearly twice the amount of +commodities to pay his debt if the dollar returns to the 1913 value. The +more we pay while prices are high, the easier it will be. + +Deflation of government after a war period is slower than deflation of +business, where curtailment is either prompt and effective or disaster +follows. There is room for further economy in the cost of the Federal +Government, but a co n of current expenditures with pre-war expenditures is +not able to the efficiency with which Government business is now being +done. The expenditures of 19161 the last pre-war year, were $742,000,000, +and in 1925 over $3,500,000,000, or nearly five times as great. If we +subtract expenditures for debt retirements and interest, veterans' relief, +increase of pensions, and other special outlays, consisting of refunds, +trust investments, and like charges, we find that the general expenditures +of the Government in 1925 were slightly more than twice as large as in +1916. + +As prices in 1925 were approximately 40 per cent higher than in 1916, the +cost of the same Government must also have increased. But the Government is +not the same. It is more expensive to collect the much greater revenue +necessary and to administer our great debt. We have given enlarged and +improved services to agriculture and commerce. Above all, America has grown +in population and wealth. Government expenditures must always share in +this growth. Taking into account the factors I have mentioned, I believe +that present Federal expenses are not far out of line with pre-war +expenses. We have nearly accomplished the deflation. + +This does not mean that further economies will not come. As we reduce our +debt our interest charges decline. There are many details yet to correct. +The real improvement, however, must come not from additional curtailment of +expenses, but by a more intelligent, more ordered spending. Our economy +must be constructive. While we should avoid as far as possible increases in +permanent current expenditures, oftentimes a capital outlay like internal +improvements will result in actual constructive saving. That is economy in +its best sense. It is an avoidance of waste that there may be the means for +an outlay to-day which will bring larger returns to-morrow. We should +constantly engage in scientific studies of our future requirements and +adopt an orderly program for their service. Economy is the method by which +we prepare to-day to afford the improvements of to-morrow. + +A mere policy of economy without any instrumentalities for putting it into +operation would be very ineffective. The Congress has wisely set up the +Bureau of the Budget to investigate and inform the President what +recommendations he ought to make for current appropriations. This gives a +centralized authority where a general and comprehensive understanding can +be reached of the sources of income and the most equitable distribution of +expenditures. How well it has worked is indicated by the fact that the +departmental estimates for 1922, before the budget law, were $4,068,000,000 +while the Budget estimates for 1927 are $3,156,000,000. This latter figure +shows the reductions in departmental estimates for the coming year made +possible by the operation of the Budget system that the Congress has +provided. + +But it is evidently not enough to have care in making appropriations +without any restraint upon expenditure. The Congress has provided that +check by establishing the office of Comptroller General. + +The purpose of maintaining the Budget Director and the Comptroller General +is to secure economy and efficiency in Government expenditure. No better +method has been devised for the accomplishment of that end. These offices +can not be administered in all the various details without making some +errors both of fact and of judgment. But the important consideration +remains that these are the instrumentalities of the Congress and that no +other plan has ever been adopted which was so successful in promoting +economy and efficiency. The Congress has absolute authority over the +appropriations and is free to exercise its judgment, as the evidence may +warrant, in increasing or decreasing budget recommendations. But it ought +to resist every effort to weaken or break down this most beneficial system +of supervising appropriations and expenditures. Without it all the claim of +economy would be a mere pretense. + +TAXATION + +The purpose of reducing expenditures is to secure a reduction in taxes. +That purpose is about to be realized. With commendable promptness the Ways +and Means Committee of the House has undertaken in advance of the meeting +of the Congress to frame a revenue act. As the bill has proceeded through +the committee it has taken on a nonpartisan character, and both Republicans +and Democrats have joined in a measure which embodies many sound principles +of tax reform. The bill will correct substantially the economic defects +injected into the revenue act of 1924, as well as many which have remained +as war-time legacies. In its present form it should provide sufficient +revenue for the Government. + +The excessive surtaxes have been reduced, estate tax rates are restored to +more reasonable figures, with every prospect of withdrawing from the field +when the States have had the opportunity to correct the abuses in their own +inheritance tax laws, the gift tax and publicity section are to be repealed +many miscellaneous taxes are lowered or abandoned, and the Board of Tax +Appeals and the administrative features of the law are improved and +strengthened. I approve of the bill in principle. In so far as income-tax +exemptions are concerned, it seems, to me the committee has gone as far as +it is Safe to go and somewhat further than I should have gone. Any further +extension along these lines would, in my opinion, impair the integrity of +our income-tax system. + +I am advised that the bill will be through the House by Christmas. For +this prompt action the country call thank the good sense of the Ways and +Means Committee in framing an economic measure upon economic +considerations. If this attitude continues to be reflected through the +Congress, the taxpayer will have his relief by the time his March 15th +installment of income taxes is due. Nonpartisan effort means certain, quick +action. Determination of a revenue law definitely, promptly and solely as a +revenue law, is one of the greatest gifts a legislature can bestow upon its +constituents. I commend the example of file Ways and Means Committee. If +followed, it will place sound legislation upon the books in time to give +the taxpayers the full benefit of tax reduction next year. This means that +the bill should reach me prior to March 15. + +All these economic results are being sought not to benefit the rich, but to +benefit the people. They are for the purpose of encouraging industry in +order that employment may be plentiful. They seek to make business good in +order that wages may be good. They encourage prosperity in order that +poverty may be banished from the home. They, seek to lay the foundation +which, through increased production, may, give the people a more bountiful +supply of the necessaries of life, afford more leisure for the improvement +of the mind, the appreciation of the arts of music and literature, +sculpture and painting, and the beneficial enjoyment of outdoor sports and +recreation, enlarge the resources which minister to charity and by all +these means attempting to strengthen the spiritual life of the Nation. + +FOREIGN RELATIONS + +The policy of our foreign relations, casting aside any suggestion of force, +rests solely on the foundation of peace, good will, and good works. We have +sought, in our intercourse with other nations, better understandings +through conference and exchange of views its befits beings endowed with +reason. The results have been the gradual elimination of disputes, the +settlement of controversies, and the establishment of a firmer friendship +between America and the rest of the world that has ever existed tit any +previous time. + +The example of this attitude has not been without its influence upon other +countries. Acting upon it, an adjustment was made of the difficult problem +of reparations. This was the second step toward peace in Europe. It paved +the way for the agreements which were drawn up at the Locarno Conference. +When ratified, these will represent the third step toward peace. While they +do not of themselves provide an economic rehabilitation, which is necessary +for the progress of Europe, by strengthening the guarantees of peace they +diminish the need for great armaments. If the energy which now goes into +military effort is transferred to productive endeavor it will greatly +assist economic progress. + +The Locarno agreements were made by the, European countries directly +interested without any formal intervention of America, although on July 3 +I publicly advocated such agreements in an address made in Massachusetts. +We have consistently refrained from intervening except when our help has +been sought and we have felt it could be effectively given, as in the +settlement of reparations and the London Conference. These recent Locarno +agreements represent the success of this policy which we have been +insisting ought to be adopted, of having European countries settle their +own political problems without involving this country. This beginning seems +to demonstrate that this policy is sound. It is exceedingly gratifying to +observe this progress, both in its method and in its result promises so +much that is beneficial to the world. + +When these agreements are finally adopted, they will provide guarantees of +peace that make the present prime reliance upon force in some parts of +Europe very much less necessary. The natural corollary to these treaties +should be further international contracts for the limitation of armaments. +This work was successfully begun at the Washington Conference. Nothing was +done at that time concerning land forces because of European objection. Our +standing army has been reduced to around 118,000, about the necessary +police force for 115,000,000 people. We are not proposing to increase it, +nor is it supposable that any foreign country looks with the slightest +misapprehension upon our land forces. They do not menace anybody. They are +rather a protection to everybody. + +The question of disarming upon land is so peculiarly European in its +practical aspects that our country would look with particular gratitude +upon any action which those countries might take to reduce their own +military forces. This is in accordance with our policy of not intervening +unless the European powers are unable to agree and make request for our +assistance. Whenever they are able to agree of their own accord it is +especially gratifying to its, and such agreements may be sure of our +sympathetic support. + +It seems clear that it is the reduction of armies rather than of navies +that is of the first importance to the world at the present time. We shall +look with great satisfaction upon that effort and give it our approbation +and encouragement. If that can be settled, we may more easily consider +further reduction and limitation of naval armaments. For that purpose our +country has constantly through its Executive, and through repeated acts of +Congress, indicated its willingness to call such a conference. Under +congressional sanction it would seem to be wise to participate in any +conference of the great powers for naval limitation of armament proposed +upon such conditions that it would hold a fair promise of being effective. +The general policy of our country is for disarmament, and it ought not to +hesitate to adopt any practical plan that might reasonably be expected to +succeed. But it would not care to attend a conference which from its +location or constituency would in all probability prove futile. + +In the further pursuit, of strengthening the bonds of peace and good will +we have joined with other nations in an international conference held at +Geneva and signed an agreement which will be laid before the Senate for +ratification providing suitable measures for control and for publicity in +international trade in arms, ammunition, and implements of war, and also +executed a protocol providing for a prohibition of the use of poison gas in +war, in accordance with the principles of Article 5 of the treaty relating +thereto signed at the Washington Conference. We are supporting the Pan +American efforts that are being made toward the codification of +international law, and looking with sympathy oil the investigations +conducted under philanthropic auspices of the proposal to agreements +outlawing war. In accordance with promises made at the Washington +Conference, we have urged the calling of and are now represented at the +Chinese Customs Conference and on the Commission on Extraterritoriality, +where it will be our policy so far as possible to meet the, aspirations of +China in all ways consistent with the interests of the countries involved. + +COURT OF INTERNATIONAL JUSTICE + +Pending before the Senate for nearly three years is the proposal to adhere +to the protocol establishing the Permanent Court of International Justice. +A well-established line of precedents mark America's effort to effect the +establishment of it court of this nature.. We took a leading part in laying +the foundation on which it rests in the establishment of The Hague Court of +Arbitration. It is that tribunal which nominates the judges who are elected +by the Council and Assembly of the League of Nations. + +The proposal submitted to the Senate was made dependent upon four +conditions, the first of which is that by supporting the court we do not +assume any obligations under the league; second, that we may participate +upon an equality with other States in the election of judges; third, that +the Congress shall determine what part of the expenses we shall bear; +fourth, that the statute creating the court shall not be amended without +out consent; and to these I have proposed an additional condition to the +effect that we are not to be bound by advisory opinions rendered without +our consent. + +The court appears to be independent of the league. It is true the judges +are elected by the Assembly and Council, but they are nominated by the +Court of Arbitration, which we assisted to create and of which we are a +part. The court was created by it statute, so-called, which is really a +treaty made among some forty-eight different countries, that might properly +be called a constitution of the court. This statute provides a method by +which the judges are chosen so that when the Court of Arbitration +nominates them and the Assembly and Council of the League elect them, they +are not acting as instruments of the Court of Arbitration or instruments of +the league, but as instruments of the statute. + +This will be even more apparent if our representatives sit with the members +of the council and assembly in electing the judges. It is true they are +paid through the league though not by the league, but by the countries +which are members of the league and by our country if we accept the +protocol. The judges are paid by the league only in the same sense that it +could be said United States judges are paid by the Congress. The court +derives all its authority from the statute and is so completely independent +of the league that it could go on functioning if the league were disbanded, +at least until the terms of the judges expired. + +The most careful provisions are made in the statute as to the +qualifications of judges. Those who make the nominations are recommended to +consult with their highest court of justice, their law schools and +academies. The judges must be persons of high moral character, qualified to +hold the highest judicial offices in that country, or be jurisconsults of +recognized competence in international law. It must be assumed that these +requirements will continue to be carefully met, and with America joining +the countries already concerned it is difficult to comprehend how human +ingenuity could better provide for the establishment of a court which would +maintain its independence. It has to be recognized that independence is to +a considerable extent a matter of ability, character, and personality. Some +effort was made in the early beginnings to interfere with the independence +of our Supreme Court. It did not succeed because of the quality of the men +who made up that tribunal. + +It does not seem that the authority to give advisory opinions interferes +with the independence of the court. Advisory opinions in and of themselves +are not harmful, but may be used in such a way as to be very beneficial +because they undertake to prevent injury rather than merely afford a remedy +after the injury has been done. As a principle that only implies that the +court shall function when proper application is made to it. Deciding the +question involved upon issues submitted for an advisory opinion does not +differ materially from deciding the question involved upon issues submitted +by contending parties. Up to the present time the court has given an +advisory opinion when it judged it had jurisdiction, and refused to give +one when it judged it did not have jurisdiction. Nothing in the work of the +court has yet been an indication that this is an impairment of its +independence or that its practice differs materially from the giving of +like opinions under the authority of the constitutions of several of our +States. + +No provision of the statute seems to me to give this court any authority to +be a political rather than a judicial court. We have brought cases in this +country before our courts which, when they have been adjudged to be +political, have been thereby dismissed. It is not improbable that political +questions will be submitted to this court, but again up to the present time +the court has refused to pass on political questions and our support would +undoubtedly have a tendency to strengthen it in that refusal. + +We are not proposing to subject ourselves to any compulsory jurisdiction. +If we support the court, we can never be obliged to submit any case which +involves our interests for its decision. Our appearance before it would +always be voluntary, for the purpose of presenting a case which we had +agreed might be presented. There is no more danger that others might bring +cases before the court involving our interests which we did not wish to +have brought, after we have adhered, and probably not so much, than there +would be of bringing such cases if we do not adhere. I think that we would +have the same legal or moral right to disregard such a finding in the one +case that we would in the other. + +If we are going to support any court, it will not be one that we have set +up alone or which reflects only our ideals. Other nations have their +customs and their institutions, their thoughts and their methods of life. +If a court is going to be international, its composition will have to yield +to what is good in all these various elements. Neither will it be possible +to support a court which is exactly perfect, or under which we assume +absolutely no obligations. If we are seeking that opportunity, we might as +well declare that we are opposed to supporting any court. If any agreement +is made, it will be because it undertakes to set up a tribunal which can do +some of the things that other nations wish to have done. We shall not find +ourselves bearing a disproportionate share of the world's burdens by our +adherence, and we may as well remember that there is absolutely no escape +for our country from bearing its share of the world's burdens in any case. +We shall do far better service to ourselves and to others if we admit this +and discharge our duties voluntarily, than if we deny it and are forced to +meet the same obligations unwillingly. + +It is difficult to imagine anything that would be more helpful to the world +than stability, tranquility and international justice. We may say that we +are contributing to these factors independently, but others less +fortunately located do not and can not make a like contribution except +through mutual cooperation. The old balance of power, mutual alliances, and +great military forces were not brought bout by any mutual dislike for +independence, but resulted from the domination of circumstances. Ultimately +they were forced on us. Like all others engaged in the war whatever we said +as a matter of fact we joined an alliance, we became a military power, we +impaired our independence. We have more at stake than any one else in +avoiding a repetition of that calamity. Wars do not, spring into existence. +They arise from small incidents and trifling irritations which can be +adjusted by an international court. We can contribute greatly to the +advancement of our ideals by joining with other nations in maintaining such +a tribunal. + +FOREIGN DEBTS + +Gradually, settlements have been made which provide for the liquidation of +debts due to our Government from foreign governments. Those made with Great +Britain, Finland, Hungary Lithuania, and Poland have already been approved +by the Congress. Since the adjournment, further agreements have been +entered into with Belgium, Czechoslovakia, Latvia, Estonia, Italy, and +Rumania. These 11 nations, which have already made settlements, represent +$6,419,528,641 of the original principal of the loans. The principal sums +without interest, still pending, are the debt of France, of $3,340,000,000; +Greece, $15,000,000; Yugoslavia, $.51,000,000; Liberia, $26,000; Russia, +$192,000,000, which those at present in control have undertaken, openly to +repudiate; Nicaragua, $84,000, which is being paid currently; and Austria, +$24,000,000, on which by act of Congress a moratorium of 20 years has been +granted. The only remaining sum is $12,000,000, due from Armenia, which has +now ceased to exist as an independent nation. + +In accordance with the settlements made, the amount of principal and +interest which is to be paid to the United States under these agreements +aggregate $15,200,688,253.93. It is obvious that the remaining settlements, +which will undoubtedly be made, will bring this sum up to an amount which +will more than equal the principal due on our present national debt. While +these settlements are very large in the aggregate, it has been felt that +the terms granted were in all cases very generous. They impose no undue +burden and are mutually beneficial in the observance of international faith +and the improvement of international credit. + +Every reasonable effort will be made to secure agreements for liquidation +with the remaining countries, whenever they are in such condition that they +can be made. Those which have already been negotiated under the bipartisan +commission established by the Congress have been made only after the most +thoroughgoing and painstaking investigation, continued for a long time +before meeting with the representatives of the countries concerned. It is +believed that they represent in each instance the best that can be done and +the wisest settlement that can be secured. One very important result is the +stabilization of foreign currency, making exchange assist rather than +embarrass our trade. Wherever sacrifices have been made of money, it will +be more than amply returned in better understanding and friendship, while +in so far as these adjustments will contribute to the financial stability +of the debtor countries, to their good order, prosperity, and progress, +they represent hope of improved trade relations and mutual contributions to +the civilization of the world. + +ALIEN PROBLEM + +Negotiations are progressing among the interested parties in relation to +the final distribution of the assets in the hands of the Alien Property +Custodian. Our Government and people are interested as creditors; the +German Government and people are interested as debtors and owners of the +seized property. Pending the outcome of these negotiations, I do not +recommend any affirmative legislation. For the present we should continue +in possession of this property which we hold as security for the settlement +of claims due to our people and our Government. + +IMMIGRATION + +While not enough time has elapsed to afford a conclusive demonstration, +such results as have been secured indicate that our immigration law is on +the whole beneficial. It is undoubtedly a protection to the wage earners of +this country. The situation should however, be carefully surveyed, in order +to ascertain whether it is working a needless hardship upon our own +inhabitants. If it deprives them of the comfort and society of those bound +to them by close family ties, such modifications should be adopted as will +afford relief, always in accordance with the principle that our Government +owes its first duty to our own people and that no alien, inhabitant of +another country, has any legal rights whatever under our Constitution and +laws. It is only through treaty, or through residence here that such rights +accrue. But we should not, however, be forgetful of the obligations of a +common humanity. + +While our country numbers among its best citizens many of those of foreign +birth, yet those who now enter in violation of our laws by that very act +thereby place themselves in a class of undesirables. Investigation +reveals that any considerable number are coming here in defiance of our +immigration restrictions, it will undoubtedly create the necessity for the +registration of all aliens. We ought to have no prejudice against an alien +because he is an alien. The standard which we apply to our inhabitants is +that of manhood, not place of birth. Restrictive immigration is to a large +degree for economic purposes. It is applied in order that we may not have a +larger annual increment of good people within our borders than we can weave +into our economic fabric in such a way as to supply their needs without +undue injury to ourselves. + +NATIONAL DEFENSE + +Never before in time of peace has our country maintained so large and +effective a military force as it now has. The Army, Navy, Marine Corps, +National Guard, and Organized Reserves represent a strength of about +558,400 men. These forces are well trained, well equipped, and high in +morale. + +A sound selective service act giving broad authority for the mobilization +in time of peril of all the resources of the country, both persons and +materials, is needed to perfect our defense policy in accordance with our +ideals of equality. The provision for more suitable housing to be paid for +out of funds derived from the sale of excess lands, pending before the last +Congress, ought to be brought forward and passed. Reasonable replacements +ought to be made to maintain a sufficient ammunition reserve. + +The Navy has the full treaty tonnage of capital ships. Work is going +forward in modernizing the older ones, building aircraft carriers, +additional fleet submarines, and fast scout cruisers, but we are carefully +avoiding anything that might be construed as a competition in armaments +with other nations. The joint Army and Navy maneuvers at Hawaii, followed +by the cruise of a full Battle Fleet to Australia and New Zealand, were +successfully carried out. These demonstrations revealed a most satisfactory +condition of the ships and the men engaged. + +Last year at my suggestion the General Board of the Navy made an +investigation and report on the relation of aircraft to warships. As a +result authorizations and appropriations were made for more scout cruisers +and fleet submarines and for completing aircraft carriers and equipping +them with necessary planes. Additional training in aviation was begun at +the Military and Naval Academies. A method of coordination and cooperation +of the Army and Navy and the principal aircraft builders is being +perfected. At the suggestion of the Secretaries of War and Navy I appointed +a special board to make a further study of the problem of aircraft. + +The report of the Air Board ought to be reassuring to the country, +gratifying to the service and satisfactory to the Congress. It is +thoroughly complete and represents the mature thought of the best talent in +the country. No radical change in organization of the service seems +necessary. The Departments of War, Navy, and Commerce should each be +provided with an additional assistant secretary, not necessarily with +statutory duties but who would be available under the direction of the +Secretary to give especial attention to air navigation. We must have an air +strength worthy of America. Provision should be made for two additional +brigadier generals for the Army Air Service. Temporary rank corresponding +to their duties should be awarded to active flying officers in both Army +and Navy. + +Aviation is of great importance both for national defense and commercial +development. We ought to proceed in its improvement by the necessary +experiment and investigation. Our country is not behind in this art. It has +made records for speed and for the excellence of its planes. It ought to go +on maintaining its manufacturing plants capable of rapid production, giving +national assistance to the la in out of airways, equipping itself with a +moderate number of planes and keeping an air force trained to the highest +efficiency. + +While I am a thorough believer in national defense and entirely committed +to the policy of adequate preparation, I am just as thoroughly opposed to +instigating or participating in a policy of competitive armaments. Nor does +preparation mean a policy of militarizing. Our people and industries are +solicitous for the cause of 0111, country, and have great respect for the +Army and Navy and foil the uniform worn by the men who stand ready at all +times for our protection to encounter the dangers and perils necessary to +military service, but all of these activities are to be taken not in behalf +of aggression but in behalf of peace. They are the instruments by which we +undertake to do our part to promote good will and support stability among +all peoples. + +VETERANS + +If any one desires to estimate the esteem in which the veterans of America +are held by their fellow citizens, it is but necessary to remember that the +current budget calls for an expenditure of about $650,000.000 in their +behalf. This is nearly the amount of the total cost of the National +Government, exclusive of the post office, before we entered the last war. + +At the two previous sessions of Congress legislation affecting veterans' +relief was enacted and the law liberalized. This legislation brought into +being a number of new provisions tending more nearly to meet the needs of +our veterans, as well as afford the necessary authority to perfect the +administration of these laws. + +Experience with the new legislation so far has clearly demonstrated its +constructive nature. It has increased the benefits received by many and has +made eligible for benefits many others. Direct disbursements to the veteran +or his dependents exceeding $21,000,000 have resulted, which otherwise +would not have been made. The degree of utilization of our hospitals has +increased through making facilities available to the incapacitated veteran +regardless of service origin of the disability. This new legislation also +has brought about a marked improvement of service to the veteran. + +The organizations of ex-service men have proposed additional legislative +changes which you will consider, but until the new law and the +modifications made at the last session of Congress are given a more +thorough test further changes in the basic law should be few and made only +after careful though sympathetic consideration. + +The principal work now before the Veterans' Bureau is the perfection of its +organization and further improvements in service. Some minor legislative +changes are deemed necessary to enable the bureau to retain that high grade +of professional talent essential in handling the problems of the bureau. +Such changes as tend toward the improvement of service and the carrying +forward to completion of the hospital construction program are recommended +for the consideration of the proper committees of Congress. + +With the enormous outlay that is now being made in behalf of the veterans +and their dependents, with a tremendous war debt still requiring great +annual expenditure, with the still high rate of taxation, while every +provision should be made for the relief of the disabled and the necessary +care of dependents, the Congress may well consider whether the financial +condition of the Government is not such that further bounty through the +enlargement of general pensions and other emoluments ought not to be +postponed. + +AGRICULTURE + +No doubt the position of agriculture as a whole has very much improved +since the depression of three and four years ago. But there are many +localities and many groups of individuals, apparently through no fault of +their own, sometimes due to climatic conditions and sometimes to the +prevailing price of a certain crop, still in a distressing condition. This +is probably temporary, but it is none the less acute. National Government +agencies, the Departments of Agriculture and Commerce, the Farm Loan Board, +the intermediate credit banks, and the Federal Reserve Board are all +cooperating to be of assistance and relief. On the other hand, there are +localities and individuals who have had one of their most prosperous years. +The general price level is fair, but here again there are exceptions both +ways, some items being poor while others are excellent. In spite of a +lessened production the farm income for this year will be about the same as +last year and much above the three preceding years. + +Agriculture is a very complex industry. It does not consist of one problem, +but of several. They can not be solved at one stroke. They have to be met +in different ways, and small gains are not to be despised. + +It has appeared from all the investigations that I have been able to make +that the farmers as a whole are determined to maintain the independence of +their business. They do not wish to have meddling on the part of the +Government or to be placed under the inevitable restrictions involved in +any system of direct or indirect price-fixing, which would result from +permitting the Government to operate in the agricultural markets. They are +showing a very commendable skill in organizing themselves to transact their +own business through cooperative marketing, which will this year turn over +about $2,500,000,000, or nearly one-fifth of the total agricultural +business. In this they are receiving help from the Government. The +Department of Agriculture should be strengthened in this facility, in order +to be able to respond when these marketing associations want help. While +it ought not to undertake undue regulation, it should be equipped to give +prompt information on crop prospects, supply, demand, current receipts, +imports, exports, and prices. + +A bill embodying these principles, which has been drafted under the advice +and with the approval of substantially all the leaders and managers in the +cooperative movement, will be presented to the Congress for its enactment. +Legislation should also be considered to provide for leasing the +unappropriated public domain for grazing purposes and adopting a uniform +policy relative to grazing on the public lands and in the national +forests. + +A more intimate relation should be established between agriculture and the +other business activities of the Nation. They are mutually dependent and +can each advance their own prosperity most by advancing the prosperity of +the other. Meantime the Government will continue those activities which +have resulted in an unprecedented amount of legislation and the pouring out +of great sums of money during the last five years. The work for good roads, +better land and water transportation, increased support for agricultural +education, extension of credit facilities through the Farm Loan Boards and +the intermediate credit banks, the encouragement of orderly marketing and a +repression of wasteful speculation, will all be continued. + +Following every other depression, after a short period the price of farm +produce has taken and maintained the lead in the advance. This advance had +reached a climax before the war. Everyone will recall the discussion that +went on for four or five years prior to 1914 concerning the high cost of +living. This history is apparently beginning to repeat itself. While +wholesale prices of other commodities have been declining, farm prices have +been increasing. There is every reason to suppose that a new era in +agricultural prosperity lies just before us, which will probably be +unprecedented. + +MUSCLE SHOALS + +The problem of Muscle Shoals seems to me to have assumed a place all out of +proportion with its real importance. It probably does not represent in +market value much more than a first-class battleship, yet it has been +discussed in the Congress over a period of years and for months at a time. +It ought to be developed for the production of nitrates primarily, and +incidentally for power purposes. This would serve defensive, agricultural, +and industrial purposes. I am in favor of disposing of this property to +meet these purposes. The findings of the special commission will be +transmitted to the Congress for their information. I am convinced that the +best possible disposition can be made by direct authorization of the +Congress. As a means of negotiation I recommend the immediate appointment +of a small joint special committee chosen from the appropriate general +standing committees of the House and Senate to receive bids, which when +made should be reported with recommendations as to acceptance, upon which a +law should be enacted, effecting a sale to the highest bidder who will +agree to carry out these purposes. + +If anything were needed to demonstrate the almost utter incapacity of the +National Government to deal directly with an industrial and commercial +problem, it has been provided by our experience with this property. We have +expended vast fortunes, we have taxed everybody, but we are unable to +secure results, which benefit anybody. This property ought, to be +transferred to private management under conditions which will dedicate it +to the public purpose for which it was conceived. + +RECLAMATION + +The National Government is committed to a policy of reclamation and +irrigation which it desires to establish on a sound basis and continue in +the interest of the localities concerned. Exhaustive studies have recently +been made of Federal reclamation, which have resulted in improving the +projects and adjusting many difficulties. About one third of the projects +is in good financial condition, another third can probably be made +profitable, while the other third is under unfavorable conditions. The +Congress has already provided for a survey which will soon be embodied in a +report. That ought to suggest a method of relief which will make +unnecessary further appeals to the Congress. Unless this can be done, +Federal reclamation will be considerably retarded. With the greatly +increased cost of construction and operation, it has become necessary to +plan in advance, by community organization and selective agriculture, +methods sufficient to repay these increasing outlays. + +The human and economic interests of the farmer citizens suggest that the +States should be required to exert some effort and assume some +responsibility, especially in the intimate, detailed, and difficult work of +securing settlers and developing farms which directly profit them, but only +indirectly and remotely can reimburse the Nation. It is believed that the +Federal Government should continue to be the agency for planning and +constructing the great undertakings needed to regulate and bring into use +the rivers the West, many of which are interstate in character, but the +detailed work of creating agricultural communities and a rural civilization +on the land made ready for reclamation ought to be either transferred to +the State in its entirety or made a cooperative effort of the State and +Federal Government. + +SHIPPING + +The maintenance of a merchant marine is of the utmost importance for +national defense and the service of our commerce. We have a large number of +ships engaged in that service. We also have a surplus supply, costly to +care for, which ought to be sold. All the investigations that have been +made under my direction, and those which have been prosecuted +independently, have reached the conclusion that the fleet should be under +the direct control of a single executive head, while the Shipping Board +should exercise its judicial and regulatory functions in Accordance with +its original conception. The report of Henry G. Dalton, a business man of +broad experience, with a knowledge of shipping, made to me after careful +investigation, will be transmitted for the information of the Congress, the +studies pursued under the direction of the United States Chamber of +Commerce will also be accessible, and added to these will be the report of +the special committee of the House. + +I do not advocate the elimination of regional considerations, but it has +become apparent that without centralized executive action the management of +this great business, like the management of any other great business, will +flounder in incapacity and languish under a division of council. A plain +and unmistakable reassertion of this principle of unified control, which I +have always been advised was the intention of the Congress to apply, is +necessary to increase the efficiency of our merchant fleet. + +COAL + +The perennial conflict in the coal industry is still going on to the great +detriment of the wage earners, the owners, and especially to the public. +With deposits of coal in this country capable of supplying its needs for +hundreds of years, inability to manage and control this great resource for +the benefit of all concerned is very close to a national economic failure. +It has been the subject of repeated investigation and reiterated +recommendation. Yet the industry seems never to have accepted modern +methods of adjusting differences between employers and employees. The +industry could serve the public much better and become subject to a much +more effective method of control if regional consolidations and more +freedom in the formation of marketing associations, under the supervision +of the Department of Commerce, were permitted. + +At the present time the National Government has little or no authority to +deal with this vital necessity of the life of the country. It has permitted +itself to remain so powerless that its only attitude must be humble +supplication. Authority should be lodged with the President and the +Departments of Commerce and Labor, giving them power to deal with an +emergency. They should be able to appoint temporary boards with authority +to call for witnesses and documents, conciliate differences, encourage +arbitration, and in case of threatened scarcity exercise control over +distribution. Making the facts public under these circumstances through a +statement from an authoritative source would be of great public benefit. +The report of the last coal commission should be brought forward, +reconsidered, and acted upon. + +PROHIBITION + +Under the orderly processes of our fundamental institutions the +Constitution was lately amended providing for national prohibition. The +Congress passed an act for its enforcement, and similar acts have been +provided by most of the States. It is the law of the land. It is the duty +of all who come under its, jurisdiction to observe the spirit of that law, +and it is the duty of the Department of Justice and the Treasury Department +to enforce it. Action to prevent smuggling, illegal transportation in +interstate commerce, abuse in the use of permits, and existence of sources +of supply for illegal traffic is almost entirely imposed upon the Federal +Government. + +Through treaties with foreign governments and increased activities of the +Coast Guard, revenue agents, district attorneys and enforcement agents +effort is being made to prevent these violations. But the Constitution also +puts a concurrent duty on the States. We need their active and energetic +cooperation, the vigilant action of their police, and the jurisdiction of +their courts to assist in enforcement. I request of the people observance, +of the public officers continuing efforts for enforcement, and of the +Congress favorable action on the budget recommendation for the prosecution +of this work. + +WATERWAY DEVELOPMENT + +For many years our country has been employed in plans and M for the +development of our intracoastal and inland waterways. This work along our +coast is an important adjunct to our commerce. It will be carried on, +together with the further opening up of our harbors, as our resources +permit. The Government made an agreement during the war to take over the +Cape Cod Canal, under which the owners made valuable concessions. This +pledged faith of the Government ought to be redeemed. + +Two other main fields are under consideration. One is the Great Lakes and +St. Lawrence, including the Erie Canal. This includes stabilizing the lake +level, and is both a waterway and power project. A joint commission of the +United States and Canada is working on plans and surveys which will not be +completed until next April. No final determination can be made, apparently, +except under treaty as to the participation of both countries. The other is +the Mississippi River stem. This is almost entirely devoted to navigation. +Work on the Ohio River will be completed in about three years. A modern +channel connecting Chicago, New Orleans, Kansas City, and Pittsburgh should +be laid out and work on the tributaries prosecuted. Some work is being done +of a preparatory nature along the Missouri, and large expenditures are +being made yearly in the lower reaches of the Mississippi and its +tributaries which contribute both to flood control and navigation. +Preliminary measures are being taken on the Colorado River project, which +is exceedingly important for flood control, irrigation, power development, +and water supply to the area concerned. It would seem to be very doubtful, +however, whether it is practical to secure affirmative action of the +Congress, except under a Joint agreement of the several States. + +The Government has already expended large sums upon scientific research and +engineering investigation in promotion of this Colorado River project. The +actual progress has been retarded for many years by differences among the +seven States in the basin over their relative water rights and among +different groups as to methods. In an attempt to settle the primary +difficulty of the water rights, Congress authorized the Colorado River +Commission which agreed on November 24, 1922, upon an interstate compact to +settle these rights, subject to the ratification of the State legislatures +and Congress. All seven States except Arizona at one time ratified, the +Arizona Legislature making certain reservations which failed to meet the +approval of the governor. Subsequently an attempt was made to establish the +compact upon a six-State basis, but in this case California imposed +reservations. There appears to be no division of opinion upon the major +principles of the compact, but difficulty in separating contentions to +methods of development from the discussion of it. It is imperative that +flood control be undertaken for California and Arizona. preparation made +for irrigation, for power, and for domestic water. + +Some or all of these questions are combined in every proposed development. +The Federal Government is interested in some of these phases, State +governments and municipalities and irrigation districts in others, and +private corporations in still others. Because of all this difference of +view it is most desirable that Congress should consider the creation of +some agency that will be able to determine methods of improvement solely +upon economic and engineering facts, that would be authorized to negotiate +and settle, subject to the approval of Congress, the participation, rights, +and obligations of each group in any particular works. Only by some such +method can early construction be secured. + +WATER POWER + +Along with the development of navigation should go every possible +encouragement for the development of our water power. While steam still +plays a dominant part, this is more and more becoming an era of +electricity. Once installed, the cost is moderate, has not tended greatly +to increase, and is entirely free from the unavoidable dirt and +disagreeable features attendant upon the burning of coal. Every facility +should be extended for the connection of the various units into a +superpower plant, capable at all times of a current increasing uniformity +over the entire system. + +RAILROADS + +The railroads throughout the country are in a fair state of prosperity. +Their service is good and their supply of cars is abundant. Their condition +would be improved and the public better served by a system of +consolidations. I recommend that the Congress authorize such consolidations +tinder the supervision of the Interstate Commerce Commission, with power to +approve or disapprove when proposed parts are excluded or new parts added. +I am informed that the railroad managers and their employees have reached a +substantial agreement as to what legislation is necessary to regulate and +improve their relationship. Whenever they bring forward such proposals, +which seem sufficient also to protect the interests of the public, they +should be enacted into law. + +It is gratifying to report that both the railroad managers and railroad +employees are providing boards for the mutual adjustment of differences in +harmony with the principles of conference, conciliation, and arbitration. +The solution of their problems ought to be an example to all other +industries. Those who ask the protections of civilization should be ready +to use the methods of civilization. + +A strike in modern industry has many of the aspects of war in the modern +world. It injures labor and it injures capital. If the industry involved is +a basic one, it reduces the necessary economic surplus and, increasing the +cost of living, it injures the economic welfare and general comfort of the +whole people. It also involves a deeper cost. It tends to embitter and +divide the community into warring classes and thus weakens the unity and +power of our national life. + +Labor can make no permanent gains at the cost of the general welfare. All +the victories won by organized labor in the past generation have been won +through the support of public opinion. The manifest inclination of the +managers and employees of the railroads to adopt a policy of action in +harmony with these principles marks a new epoch in our industrial life. + +OUTLYING POSSESSIONS + +The time has come for careful investigation of the expenditures and success +of the laws by which we have undertaken to administer our outlying +possessions. A very large amount of money is being expended for +administration in Alaska. It appears so far out of proportion to the number +of inhabitants and the amount of production as to indicate cause for +thorough investigation. Likewise consideration should be given to the +experience under the law which governs the Philippines. From such reports +as reach me there are indications that more authority should be given to +the Governor General, so that he will not be so dependent upon the local +legislative body to render effective our efforts to set an example of the, +sound administration and good government, which is so necessary for the +preparation of the Philippine people for self-government under ultimate +independence. If they are to be trained in these arts, it is our duty to +provide for them the best that there is. + +RETIREMENT OF JUDGES + +The act of March 3, 1911, ought to be amended so that the term of years of +service of judges of any court of the United States requisite for +retirement with pay shall be computed to include not only continuous but +aggregate service. + +MOTHERS' AID + +The Government ought always to be alert on the side of the humanities. It +Ought to encourage provisions for economic justice for the defenseless. It +ought to extend its relief through its national and local agencies, as may +be appropriate in each case, to the suffering and the needy. It ought to be +charitable. + +Although more than 40 of our States have enacted measures in aid of +motherhood, the District of Columbia is still without such a law. A +carefully considered bill will be presented, which ought to have most +thoughtful consideration in order that the Congress may adopt a measure +which will be hereafter a model for all parts of the Union. + +CIVIL SERVICE + +In 1883 the Congress passed the civil service act, which from a modest +beginning of 14,000 employees has grown until there are now 425,000 in the +classified service. This has removed the clerical force of the Nation from +the wasteful effects of the spoils system and made it more stable and +efficient. The time has come to consider classifying all postmasters, +collectors of customs, collectors of internal revenue, and prohibition +agents, by an act covering in those at present in office, except when +otherwise provided by Executive order. + +The necessary statistics are now being gathered to form the basis of a +valuation of the civil service retirement fund based on current conditions +of the service. It is confidently expected that this valuation will be +completed in time to be made available to the Congress during the present +session. It will afford definite knowledge of existing, and future +liabilities under the present law and determination OF liabilities under +any proposed change in the present law. We should have this information +before creating further obligations for retirement annuities which will +become liabilities to be met in the future from the money of the taxpayer. + +The classification act of 1923, with the subsequent legislative action +providing for adjustment of the compensation of field service positions, +has operated materially to improve employment conditions in the Federal +service. The administration of the act is in the hands of an impartial +board, functioning without the necessity of a direct appropriation. It +would be inadvisable at this time to place in other hands the +administration of this act. + +FEDERAL TRADE COMMISSION + +The proper function of the Federal Trade Commission is to supervise and +correct those practices in commerce which are detrimental to fair +competition. In this it performs a useful function and should be continued +and supported. It was designed also to be a help to honest business. In my +message to the Sixty-eighth Congress I recommended that changes in the +procedure then existing be made. Since then the commission by its own +action has reformed its rules, giving greater speed and economy in the +disposal of its cases and full opportunity for those accused to be heard. +These changes are improvements and, if necessary, provision should be made +for their permanency. + +REORGANIZATION + +No final action has yet been taken on the measure providing for the +reorganization of the various departments. I therefore suggest that this +measure, which will be of great benefit to the efficient and economical +administration of the business of the Government, be brought forward and +passed. + +THE NEGRO + +Nearly one-tenth of our population consists of the Negro race. The progress +which they have made in all the arts of civilization in the last 60 years +is almost beyond belief. Our country has no more loyal citizens. But they +do still need sympathy, kindness, and helpfulness. They need reassurance +that the requirements of the Government and society to deal out to them +even-handed justice will be met. They should be protected from all violence +and supported in the peaceable enjoyment of the fruits of their labor. +Those who do violence to them should be punished for their crimes. No other +course of action is worthy of the American people. + +Our country has many elements in its population, many different modes of +thinking and living, all of which are striving in their own way to be loyal +to the high ideals worthy of the crown of American citizenship. It is +fundamental of our institutions that they seek to guarantee to all our +inhabitants the right to live their own lives under the protection of the +public law. This does not include any license to injure others materially, +physically, morally, to Incite revolution, or to violate the established +customs which have long had the sanction of enlightened society. + +But it does mean the full right to liberty and equality before the law +without distinction of race or creed. This condition can not be granted to +others, or enjoyed by ourselves, except by the application of the principle +of broadest tolerance. Bigotry is only another name for slavery. It reduces +to serfdom not only those against whom it is directed, but also those who +seek to apply it. An enlarged freedom can only be secured by the +application of the golden rule. No other utterance ever presented such a +practical rule of life. + +CONCLUSION + +It is apparent that we are reaching into an era of great general +prosperity. It will continue only so long as we shall use it properly. +After all, there is but a fixed quantity of wealth in this country at any +fixed time. The only way that we can all secure more of it is to create +more. The element of time enters into production, If the people have +sufficient moderation and contentment to be willing to improve their +condition by the process of enlarging production, eliminating waste, and +distributing equitably, a prosperity almost without limit lies before its. +If the people are to be dominated by selfishness, seeking immediate riches +by nonproductive speculation and by wasteful quarreling over the returns +from industry, they will be confronted by the inevitable results of +depression and privation. If they will continue industrious and thrifty, +contented with fair wages and moderate profits, and the returns which +accrue from the development of oar natural resources, our prosperity will +extend itself indefinitely. + +In all your deliberations you should remember that the purpose of +legislation is to translate principles into action. It is an effort to have +our country be better by doing better. Because the thoughts and ways of +people are firmly fixed and not easily changed, the field within which +immediate improvement can be secured is very narrow. Legislation can +provide opportunity. Whether it is taken advantage of or not depends upon +the people themselves. The Government of the United States has been created +by the people. It is solely responsible to them. It will be most successful +if it is conducted solely for their benefit. All its efforts would be of +little avail unless they brought more justice, more enlightenment, more +happiness and prosperity into the home. This means an opportunity to +observe religion, secure education, and earn a living under a reign of law +and order. It is the growth and improvement of the material and spiritual +life of the Nation. We shall not be able to gain these ends merely by our +own action. If they come at all, it will be because we have been willing to +work in harmony with the abiding purpose of a Divine Providence. + +*** + +State of the Union Address +Calvin Coolidge +December 7, 1926 + +Members of the Congress: + +In reporting to the Congress the state of the Union, I find it impossible +to characterize it other than one of general peace and prosperity. In some +quarters our diplomacy is vexed with difficult and as yet unsolved +problems, but nowhere are we met with armed conflict. If some occupations +and areas are not flourishing, in none does there remain any acute chronic +depression. What the country requires is not so much new policies as a +steady continuation of those which are already being crowned with such +abundant success. It can not be too often repeated that in common with all +the world we are engaged in liquidating the war. + +In the present short session no great amount of new legislation is +possible, but in order to comprehend what is most desirable some survey of +our general situation is necessary. A large amount of time is consumed in +the passage of appropriation bills. If each Congress in its opening session +would make appropriations to continue for two years, very much time would +be saved which could either be devoted to a consideration of the general +needs of the country or would result in decreasing the work of legislation. +ECONOMY + +Our present state of prosperity has been greatly promoted by three +important causes, one of which is economy, resulting in reduction and +reform in national taxation. Another is the elimination of many kinds of +waste. The third is a general raising of the standards of efficiency. This +combination has brought the perfectly astonishing result of a reduction in +the index price of commodities and an increase in the index rate of wages. +We have secured a lowering of the cost to produce and a raising of the +ability to consume. Prosperity resulting from these causes rests on the +securest of all foundations. It gathers strength from its own progress. + +In promoting this progress the chief part which the National Government +plays lies in the field of economy. Whatever doubts may have been +entertained as to the necessity of this policy and the beneficial results +which would accrue from it to all the people of the Nation, its wisdom must +now be considered thoroughly demonstrated. It may not have appeared to be a +novel or perhaps brilliant conception, but it has turned out to be +preeminently sound. It has not failed to work. It has surely brought +results. It does not have to be excused as a temporary expedient adopted as +the lesser evil to remedy some abuse, it is not a palliative seeking to +treat symptoms, but a major operation for the, eradication at the source of +a large number of social diseases. + +Nothing is easier than the expenditure of public money. It does not appear +to belong to anybody. The temptation is overwhelming to bestow it on +somebody. But the results of extravagance are ruinous. The property of the +country, like the freedom of the country, belongs to the people of the +country. They have not empowered their Government to take a dollar of it +except for a necessary public purpose. But if the Constitution conferred +such right, sound economics would forbid it. Nothing is more, destructive +of the progress of the Nation than government extravagance. It means an +increase in the burden of taxation, dissipation of the returns from +enterprise, a decrease in the real value of wages, with ultimate stagnation +and decay. The whole theory of our institutions is based on the liberty and +independence of the individual. He is dependent on himself for support and +therefore entitled to the rewards of his own industry. He is not to be +deprived of what he earns that others may be benefited by what they do not +earn. What he saves through his private effort is not to be wasted by +Government extravagance. + +Our national activities have become so vast that it is necessary to +scrutinize each item of public expenditure if we are to apply the principle +of economy. At the last session we made an immediate increase in the annual +budget of more than $100,000,000 in benefits conferred on the veterans of +three wars, public buildings, and river and harbor improvement. Many +projects are being broached requiring further large outlays. I am convinced +that it would be greatly for the welfare of the country if we avoid at the +present session all commitments except those of the most pressing nature. +From a reduction of the debt and taxes will accrue a wider benefit to all +the people of this country than from embarking on any new enterprise. When +our war debt is decreased we shall have resources for expansion. Until that +is accomplished we should confine ourselves to expenditures of the most +urgent necessity. + +The Department of Commerce has performed a most important function in +making plans and securing support of all kinds of national enterprise for +the elimination of waste. Efficiency has been greatly promoted through good +management and the constantly increasing cooperation of the wage earners +throughout the whole realm of private business. It is my opinion that this +whole development has been predicated on the foundation of a protective +tariff. + +TAX REDUCTION + +As a result of economy of administration by the Executive and of +appropriation by the Congress, the end of this fiscal year will leave a +surplus in the Treasury estimated at $383,000,000. Unless otherwise +ordered, such surplus is used for the retirement of the war debt. A bond +which can be retired today for 100 cents will cost the people 104 1/4 +cents to retire a year from now. While I favor a speedy reduction of the +debt as already required by law and in accordance with the promises made to +the holders of our Liberty bonds when they were issued, there is no reason +why a balanced portion of surplus revenue should not be applied to a +reduction of taxation. It can not be repeated too often that the enormous +revenues of this Nation could not be collected without becoming a charge on +all the people whether or not they directly pay taxes. Everyone who is +paying or the bare necessities of fool and shelter and clothing, without +considering the better things of life, is indirectly paying a national tax. +The nearly 20,000,000 owners of securities, the additional scores of +millions of holders of insurance policies and depositors in savings banks, +are all paying a national tax. Millions of individuals and corporations are +making a direct contribution to the National Treasury which runs from 11/2 +to 25 per cent of their income, besides a number of special requirements, +like automobile and admission taxes. Whenever the state of the Treasury +will permit, I believe in a reduction of taxation. I think the taxpayers +are entitled to it. But I am not advocating tax reduction merely for the +benefit of the taxpayer; I am advocating it for the benefit of the +country. + +If it appeared feasible, I should welcome permanent tax reduction at this +time. The estimated surplus, however, for June 30, 1928, is not much larger +than is required in a going business of nearly $4,000,000,000. We have had +but a few months' experience under the present revenue act and shall need +to know what is developed by the returns of income produced under it, which +are not required t o be made until about the time this session terminates, +and what the economic probabilities of the country are in the latter part +of 1927, before we can reach any justifiable conclusion as to permanent tax +reduction. Moreover the present surplus results from many nonrecurrent +items. Meantime, it is possible to grant some real relief by a simple +measure making reductions in the payments which accrue on the 15th of March +and June, 1927. I am very strongly of the conviction that this is so much a +purely business matter that it ought not to be dealt with in a partisan +spirit. The Congress has already set the notable example of treating tax +problems without much reference to party, which might well be continued. +What I desire to advocate most earnestly is relief for the country from +unnecessary tax burdens. We can not secure that if we stop to engage in a +partisan controversy. As I do not think any change in the special taxes, or +tiny permanent reduction is practical, I therefore urge both parties of the +House Ways and Means Committee to agree on a bill granting the temporary +relief which I have indicated. Such a reduction would directly affect +millions of taxpayers, release large sums for investment in new enterprise, +stimulating industrial production and agricultural consumption, and +indirectly benefiting every family in the whole country. These are my +convictions stated with full knowledge that it is for the Congress to +decide whether they judge it best to make such a reduction or leave the +surplus for the present year to be applied to retirement of the war debt. +That also is eventually tax reduction. + +PROTECTIVE TARIFF + +It is estimated that customs receipts for the present fiscal year will +exceed $615,000,000, the largest which were ever secured from that source. +The value of our imports for the last fiscal year was $4,466,000,000, an +increase of more than 71 per cent since the present tariff law went into +effect. Of these imports about 65 per cent, or, roughly, $2,900,000,000, +came in free of duty, which means that the United States affords a +duty-free market to other countries almost equal in value to the total +imports of Germany and greatly exceeding the total imports of France. We +have admitted a greater volume of free imports than any other country +except England. + +We are, therefore, levying duties on about $1,550,000,000 of imports. +Nearly half of this, or $700,000,000, is subject to duties for the +protection of agriculture and have their origin in countries other than +Europe. They substantially increased the prices received by our farmers for +their produce. About $300,000.000 more is represented by luxuries such as +costly rugs, furs, precious stones, etc. This leaves only about +$550,000,000 of our imports under a schedule of duties which is in general +under consideration when there is discussion of lowering the tariff. While +the duties on this small portion, representing only about 12 per cent of +our imports, undoubtedly represent the difference between a fair degree of +prosperity or marked depression to many of our industries and the +difference between good pay and steady work or wide unemployment to many of +our wage earners, it is impossible to conceive how other countries or our +own importers could be greatly benefited if these duties are reduced. Those +who are starting an agitation for a reduction of tariff duties, partly at +least for the benefit of those to whom money has been lent abroad, ought to +know that there does not seem to be a very large field within the area of +our imports in which probable reductions would be advantageous to foreign +goods. Those who wish to benefit foreign producers are much more likely to +secure that result by continuing the present enormous purchasing power +which comes from our prosperity that increased our imports over 71 +per cent in four years than from any advantages that are likely to accrue +from a general tariff reduction. + +AGRICULTURE + +The important place which agriculture holds in the economic and social life +of the Nation can not be overestimated. The National Government is +justified in putting forth every effort to make the open country a +desirable place to live. No condition meets this requirement which fails to +supply a fair return on labor expended and capital invested. While some +localities and some particular crops furnish exceptions, in general +agriculture is continuing to make progress in recovering from the +depression of 1921 and 1922. Animal products and food products are in a +more encouraging position, while cotton, due to the high prices of past +years supplemented by ideal weather conditions, has been stimulated to a +point of temporary over production. Acting on the request of the cotton +growing interests, appointed a committee to assist in carrying out their +plans. As it result of this cooperation sufficient funds have been pledged +to finance the storage and carrying of 4,000,000 bales of cotton. Whether +those who own the cotton are willing to put a part of their stock into this +plan depends on themselves. The Federal Government has cooperated in +providing ample facilities. No method of meeting the situation would be +adequate which does not contemplate a reduction of about one-third in the +acreage for the coming year. The responsibility for making the plan +effective lies with those who own and finance cotton and cotton lands. + +The Department of Agriculture estimates the net income of agriculture for +the year 1920-21 at only $375,000,000; for 1924-25, $2,656,000,000; for +1925-26, $2,757,000,000. This increase has been brought about in part by +the method already referred to, of Federal tax reduction, the elimination +of waste, and increased efficiency in industry. The wide gap that existed a +few years ago between the index price of agricultural products and the +index price of other products has been gradually closing up, though the +recent depression in cotton has somewhat enlarged it. Agriculture had on +the whole been going higher while industry had been growing lower. +Industrial and commercial activities, being carried on for the most part by +corporations, are taxed at a much higher rate than farming, which is +carried on by individuals. This will inevitably make industrial commodity +costs high while war taxation lasts. It is because of this circumstance +that national tax reduction has a very large indirect benefit upon the +farmer, though it can not relieve him from the very great burden of the +local taxes which he pays directly. We have practically relieved the farmer +of any Federal income tax. + +There is agreement on all sides that some portions of our agricultural +industry have lagged behind other industries in recovery from the war and +that further improvement in methods of marketing of agricultural products +is most desirable. There is belief also that the Federal Government can +further contribute to these ends beyond the many helpful measures taken +during the last five years through the different acts of Congress for +advancing the interests of the farmers. + +The packers and stockyards act, + +Establishing of the intermediate credit banks for agricultural purposes, + +The Purnell Act for agricultural research, + +The Capper-Volstead Cooperative Marketing Act, + +The cooperative marketing act of 1926, + +Amendments to the warehousing act, + +The enlargement of the activities of the Department of Agriculture, + +Enlargement of the scope of loans by the Farm Loan Board, + +The tariff on agricultural products, + +The large Federal expenditure in improvement of waterways and highways, + +The reduction of Federal taxes, in all comprise a great series of +governmental actions in the advancement of the special interest of +agriculture. + +In determination of what further measures may be undertaken it seems to me +there are certain pitfalls which must be avoided and our test in avoiding +them should be to avoid disaster to the farmer himself. + +Acting upon my recommendation, the Congress has ordered the interstate +Commerce Commission to investigate the freight-rate structure, directing +that such changes shall be made in freight rates as will promote freedom of +movement of agricultural products. Railroad consolidation which I am +advocating would also result in a situation where rates could be made more +advantageous for farm produce, as has recently been done in the revision of +rates on fertilizers in the South. Additional benefit will accrue from the +development of our inland waterways. The Mississippi River system carries a +commerce of over 50,000,000 tons at a saving of nearly $18,000,000 +annually. The Inland Waterways Corporation operates boats on 2,500 miles of +navigable streams and through its relation with 165 railroads carries +freight into and out of 45 States of the Union. During the past six months +it has handled over 1,000,000 bushels of grain monthly and by its lower +freight rates has raised the price of such grain to the farmer probably +21/2 cents to 3 cents a bushel. The highway system on which the Federal +Government expends about $85,000,000 a year is of vital importance to the +rural regions. + +The advantages to be derived from a more comprehensive and less expensive +system of transportation for agriculture ought to be supplemented by +provision for an adequate supply of fertilizer at a lower cost than it is +at present obtainable. This advantage we are attempting to secure by the +proposed development at Muscle Shoals, and there are promising experiments +being made in synthetic chemistry for the production of nitrates. + +A survey should be made of the relation of Government grazing lands to the +livestock industry. Additional legislation is desirable more definitely to +establish the place of grazing in the administration of the national +forests, properly subordinated to their functions of producing timber and +conserving the water supply. Over 180,000,000 acres of grazing lands are +still pastured as commons in the public domain with little or no +regulation. This has made their use so uncertain that it has contributed +greatly to the instability of the livestock industry. Very little of this +land is suited to settlement or private ownership. Some plan ought to be +adopted for its use in grazing, corresponding broadly to that already +successfully applied to the national forests. + +The development of sound and strong cooperative associations is of +fundamental importance to our agriculture. It is encouraging to note, +therefore, that a vigorous and healthy growth in the cooperative movement +is continuing. Cooperative associations reporting to the Department of +Agriculture at the end of 1925 had on their membership rolls a total of +2,700,000 producers. Their total business in 1925 amounted to approximately +$2,400,000,000, compared with $635,800,000 in 1915. Legislative action to +assist cooperative associations and supplement their efforts was passed at +the last session of Congress. Important credit measures were also provided +by Congress in 1923 which have been of inestimable value to the cooperative +associations. Although the Federal credit agencies have served agriculture +well, I think it may be possible to broaden and strengthen the service of +these institutions. + +Attention is again directed to the surplus problem of agriculture by the +present cotton situation. Surpluses often affect prices of various farm +commodities in a disastrous manner, and the problem urgently demands a +solution. Discussions both in and out of Congress during the past few years +have given us a better understanding of the subject, and it is my hope that +out of the various proposals made the basis will be found for a sound and +effective solution upon which agreement can be reached. In my opinion +cooperative marketing associations will be important aids to the ultimate +solution of the problem. It may well be, however, that additional measures +will be needed to supplement their efforts. I believe all will agree that +such measures should not conflict with the best interests of the +cooperatives, but rather assist and strengthen them. In working out this +problem to any sound conclusion it is necessary to avoid putting the +Government into the business of production or marketing or attempting to +enact legislation for the purpose of price fixing. The farmer does not +favor any attempted remedies that partake of these elements. He has a +sincere and candid desire for assistance. If matched by an equally sincere +and candid consideration of the different remedies proposed a sound +measure of relief ought to result. It is unfortunate that no general +agreement has been reached by the various agricultural interests upon any +of the proposed remedies. Out of the discussion of various proposals which +can be had before the Committees of Agriculture some measure ought to be +perfected which would be generally satisfactory. + +Due to the emergency arising from a heavy tropical storm in southern +Florida, I authorized the Secretary of Agriculture to use certain funds in +anticipation of legislation to enable the farmers in that region to plant +their crops. The department will present a bill ratifying the loans which +were made for this purpose. + +Federal legislation has been adopted authorizing the cooperation of the +Government with States and private owners in the protection of forest lands +from fire. This preventive measure is of such great importance that I have +recommended for it an increased appropriation. + +Another preventive measure of great economic and sanitary importance is the +eradication of tuberculosis in cattle. Active work is now in progress in +one-fourth of the counties of the United States to secure this result. Over +12,000,000 cattle have been under treatment, and the average degree of +infection has fallen from 4.9 per cent to 2.8 per cent. he Federal +Government is making substantial expenditures for this purpose. + +Serious damage is threatened to the corn crop by the European corn borer. +Since 1917 it has spread from eastern New England westward into Indiana and +now covers about 100,000 square miles. It is one of the most formidable +pests because it spreads rapidly and is exceedingly difficult of control. +It has assumed a menace that is of national magnitude and warrants the +Federal Government in extending its cooperation to the State and local +agencies which are attempting to prevent its further spread and secure its +eradication. + +The whole question of agriculture needs most careful consideration. In the +past few years the Government has given this subject more attention than +any other and has held more consultations in relation to it than on any +other subject. While the Government is not to be blamed for failure to +perform the impossible, the agricultural regions are entitled to know that +they have its constant solicitude and sympathy. Many of the farmers are +burdened with debts and taxes which they are unable to carry. We are +expending in this country many millions of dollars each year to increase +farm production. We ought now to put more emphasis on the question of farm +marketing. If a sound solution of a permanent nature can be found for this +problem, the Congress ought not to hesitate to adopt it. + +DEVELOPMENT OF WATER RESOURCES + +In previous messages I have referred to the national importance of the +proper development of our water resources. The great projects of extension +of the Mississippi system, the protection an development of the lower +Colorado River, are before Congress, and I have previously commented upon +them. I favor the necessary legislation to expedite these projects. +Engineering studies are being made for connecting the Great Lakes with the +North Atlantic either through an all-American canal or by way of the St. +Lawrence River. These reports will undoubtedly be before the Congress +during its present session. It is unnecessary to dwell upon the great +importance of such a waterway not only to our mid-continental basin but to +the commerce and development of practically the whole Nation. Our river and +harbor improvement should be continued in accordance with the present +policy. Expenditure of this character is compatible with economy; it is in +the nature of capital investment. Work should proceed on the basic trunk +lines if this work is to be a success. If the country will be content to be +moderate and patient and permit improvements to be made where they will do +the greatest general good, rather than insisting on expenditures at this +time on secondary projects, our internal Waterways can be made a success. +If proposes legislation results in a gross manifestation of local +jealousies and selfishness, this program can not be carried out. Ultimately +we can take care of extensions, but our first effort should be confined to +the main arteries. + +Our inland commerce has been put to great inconvenience and expense by +reason of the lowering of the water level of the Great Lakes. This is an +international problem on which competent engineers are making reports. Out +of their study it is expected that a feasible method will be developed for +raising the level to provide relief for our commerce and supply water for +drainage. Whenever a practical plan is presented it ought to be speedily +adopted. + +RECLAMATION + +It is increasingly evident that the Federal Government must in the future +take a leading part in the impounding of water for conservation with +incidental power for the development of the irrigable lands of the and +region. The unused waters of the West are found mainly in large rivers. +Works to store and distribute these have such magnitude and cost that they +are not attractive to private enterprise. Water is the irreplaceable +natural resource. Its precipitation can not be increased. Its storage on +the higher reaches of streams, to meet growing needs, to be used repeatedly +as it flows toward the seas, is a practical and prudent business policy. + +The United States promises to follow the course of older irrigation +countries, where recent important irrigation developments have been carried +out as national undertakings. It is gratifying, therefore, that conditions +on Federal reclamation projects have become satisfactory. The gross value +of crop, grown with water from project works increased from $110,000,000 +in 1924 to $131,000,000 in 1925. The adjustments made last year by Congress +relieved irrigators from paying construction costs on unprofitable land, +and by so doing inspired new hope and confidence in ability to meet the +payments required. Construction payments by water users last year were the +largest in the history of the bureau. + +The anticipated reclamation fund will be fully absorbed for a number of +years in the completion of old projects and the construction of projects +inaugurated in the past three years. We should, however, continue to +investigate and study the possibilities of a carefully planned development +of promising projects, logically of governmental concern because of their +physical magnitude, immense cost, and the interstate and international +problems involved. Only in this way may we be fully prepared to meet +intelligently the needs of our fast-growing population in the years to +come. + +TRANSPORTATION + +It would be difficult to conceive of any modern activity which contributes +more to the necessities and conveniences of life than transportation. +Without it our present agricultural production and practically all of our +commerce would be completely prostrated. One of the large contributing +causes to the present highly satisfactory state of our economic condition +is the prompt and dependable service, surpassing all our previous records, +rendered by the railroads. This power has been fostered by the spirit of +cooperation between Federal and State regulatory commissions. To render +this service more efficient and effective and to promote a more scientific +regulation, the process of valuing railroad properties should be simplified +and the primary valuations should be completed as rapidly as possible. The +problem of rate reduction would be much simplified by a process of railroad +consolidations. This principle has already been adopted as Federal law. +Experience has shown that a more effective method must be provided. Studies +have already been made and legislation introduced seeking to promote this +end. It would be of great advantage if it could be taken up at once and +speedily enacted. The railroad systems of the country and the convenience +of all the people are waiting on this important decision. + +MERCHANT MARINE + +It is axiomatic that no agricultural and industrial country can get the +full benefit of its own advantages without a merchant marine. We have been +proceeding under the act of Congress that contemplates the establishment of +trade routes to be ultimately transferred to private ownership and +operation. Due to temporary conditions abroad and at home we have a large +demand just now for certain types of freight vessels. Some suggestion has +been made for new construction. I do not feel that we are yet warranted in +entering, that field. Such ships as we might build could not be sold after +they are launched for anywhere near what they would cost. We have expended +over $250,000,000 out of the public Treasury in recent years to make up the +losses of operation, not counting the depreciation or any cost whatever of +our capital investment. The great need of our merchant marine is not for +more ships but for more freight. + +Our merchants are altogether too indifferent about using American ships for +the transportation of goods which they send abroad or bring home. Some of +our vessels necessarily need repairs, which should be made. I do not +believe that the operation of our fleet is as economical and efficient as +it could be made if placed under a single responsible head, leaving the +Shipping Board free to deal with general matters of policy and regulation. + +RADIO LEGISLATION + +The Department of Commerce has for some years urgently presented the +necessity for further legislation in order to protect radio listeners from +interference between broadcasting stations and to carry out other +regulatory functions. Both branches of Congress at the last session passed +enactments intended to effect such regulation, but the two bills yet remain +to be brought into agreement and final passage. + +Due to decisions of the courts, the authority of the department under the +law of 1912 has broken down; many more stations have been operating than +can be accommodated within the limited number of wave lengths available; +further stations are in course of construction; many stations have departed +from the scheme of allocation set down by the department, and the whole +service of this most important public function has drifted into such chaos +as seems likely, if not remedied, to destroy its great value. I most +urgently recommend that this legislation should be speedily enacted. + +I do not believe it is desirable to set up further independent agencies in +the Government. Rather I believe it advisable to entrust the important +functions of deciding who shall exercise the privilege of radio +transmission and under what conditions, the assigning of wave lengths and +determination of power, to a board to be assembled whenever action on such +questions becomes necessary. There should be right of appeal to the courts +from the decisions of such board. The administration of the decisions of +the board and the other features of regulation and promotion of radio in +the public interest, together with scientific research, should remain in +the Department of Commerce. Such an arrangement makes for more expert, more +efficient, and more economical administration that an independent agency or +board, whose duties, after initial stages, require but little attention, in +which administrative functions are confused with semijudicial functions and +from which of necessity there must be greatly increased personnel and +expenditure. + +THE WAGE EARNER + +The great body of our people are made up of wage earners. Several hundred +thousands of them are on the pay rolls of the United States Government. +Their condition very largely is fixed by legislation. We have recently +provided increases in compensation under a method of reclassification and +given them the advantage of a liberal retirement system as a support for +their declining years. Most of them are under the merit system, which is a +guaranty of their intelligence, and the efficiency of their service is a +demonstration of their loyalty. The Federal Government should continue to +set a good example for all other employers. + +In the industries the condition of the wage earner has steadily improved. +The 12-hour day is almost entirely unknown. Skilled labor is well +compensated. But there are unfortunately a multitude of workers who have +not yet come to share in the general prosperity of the Nation. Both the +public authorities and private enterprise should be solicitous to advance +the welfare of this class. The Federal Government has been seeking to +secure this end through a protective tariff, through restrictive +immigration, through requiring safety devices for the prevention of +accidents, through the granting of workman's compensation, through civilian +vocational rehabilitation and education, through employment information +bureaus, and through such humanitarian relief as was provided in the +maternity and infancy legislation. It is a satisfaction to report that a +more general condition of contentment exists among wage earners and the +country is more free from labor disputes than it has been for years. While +restrictive immigration has been adopted in part for the benefit of the +wage earner, and in its entirety for the benefit of the country, it ought +not to cause a needless separation of families and dependents from their +natural source of support contrary to the dictates of humanity. + +BITUMINOUS COAL + +No progress appears to have been made within large areas of the bituminous +coal industry toward creation of voluntary machinery by which greater +assurance can be given to the public of peaceful adjustment of wage +difficulties such as has been accomplished in the anthracite industry. This +bituminous industry is one of primary necessity and bears a great +responsibility to the Nation for continuity of supplies. As the wage +agreements in the unionized section of the industry expire on April 1 next, +and as conflicts may result which may imperil public interest, and have for +many years often called for action of the Executive in protection of the +public, I again recommend the passage of such legislation as will assist +the Executive in dealing with such emergencies through a special temporary +board of conciliation and mediation and through administrative agencies for +the purpose of distribution of coal and protection of the consumers of coal +from profiteering. At present the Executive is not only without authority +to act but is actually prohibited by law from making any expenditure to +meet the emergency of a coal famine. + +JUDICIARY + +The Federal courts hold a high position in the administration of justice in +the world. While individual judicial officers have sometimes been subjected +to just criticism, the courts as a whole have maintained an exceedingly +high standard. The Congress may well consider the question of supplying +fair salaries and conferring upon the Supreme Court the same rule-making +power on the law side of the district courts that they have always +possessed on the equity side. A bill is also pending providing for +retirement after a certain number of years of service, although they have +not been consecutive, which should have your favorable consideration. These +faithful servants of the Government are about the last that remain to be +provided for in the postwar readjustments. + +BANKING + +There has been pending in Congress for nearly three years banking +legislation to clarify the national bank act and reasonably to increase the +powers of the national banks. I believe that within the limitation of sound +banking principles Congress should now and for the future place the +national banks upon a fair equality with their competitors, the State +banks, and I trust that means may be found so that the differences on +branch-banking legislation between the Senate and the House of +Representatives may be settled along sound lines and the legislation +promptly enacted. + +It would be difficult to overestimate the service which the Federal reserve +system has already rendered to the country. It is necessary only to recall +the chaotic condition of our banking organization at the time the Federal +reserve system was put into operation. The old system consisted of a vast +number of independent banking units, with scattered bank reserves which +never could be mobilized in times of greatest need. In spite of vast +banking resources, there was no coordination of reserves or any credit +elasticity. As a consequence, a strain was felt even during crop-moving +periods and when it was necessary to meet other seasonal and regularly +recurring needs. + +The Federal reserve system is not a panacea for all economic or financial +ills. It can not prevent depression in certain industries which are +experiencing overexpansion of production or contraction of their markets. +Its business is to furnish adequate credit and currency facilities. This it +has succeeded in doing, both during the war and in the more difficult +period of deflation and readjustment which followed. It enables us to look +to the future with confidence and to make plans far ahead, based on the +belief that the Federal reserve system will exercise a steadying influence +on credit conditions and thereby prevent tiny sudden or severe reactions +from the period of prosperity which we are now enjoying. In order that +these plans may go forward, action should be taken at the present session +on the question of renewing the banks' charters and thereby insuring a +continuation of the policies and present usefulness of the Federal reserve +system. + +FEDERAL REGULATION + +I am in favor of reducing, rather than expanding, Government bureaus which +seek to regulate and control the business activities of the people. +Everyone is aware that abuses exist and will exist so long as we are +limited by human imperfections. Unfortunately, human nature can not be +changed by an act of the legislature. When practically the sole remedy for +many evils lies in the necessity of the people looking out for themselves +and reforming their own abuses, they will find that they are relying on a +false security if the Government assumes to hold out the promise that it is +looking out for them and providing reforms for them. This principle is +preeminently applicable to the National Government. It is too much assumed +that because an abuse exists it is the business of the National Government +to provide a remedy. The presumption should be that it is the business of +local and State governments. Such national action results in encroaching +upon the salutary independence of the States and by undertaking to +supersede their natural authority fills the land with bureaus and +departments which are undertaking to do what it is impossible for them to +accomplish and brings our whole system of government into disrespect and +disfavor. We ought to maintain high standards. We ought to punish +wrongdoing. Society has not only the privilege but the absolute duty of +protecting itself and its individuals. But we can not accomplish this end +by adopting a wrong method. Permanent success lies in local, rather than +national action. Unless the locality rises to its own requirements, there +is an almost irresistible impulse for the National Government to intervene. +The States and the Nation should both realize that such action is to be +adopted only as a last resort. + +THE NEGRO + +The social well-being of our country requires our constant effort for the +amelioration of race prejudice and the extension to all elements of equal +opportunity and equal protection under the laws which are guaranteed by +the. Constitution. The Federal Government especially is charged with this +obligation in behalf of the colored people of the Nation. Not only their +remarkable progress, their devotion and their loyalty, but, our duty to +ourselves under our claim that we are an enlightened people requires us to +use all our power to protect them from the crime of lynching. Although +violence of this kind has very much decreased, while any of it remains we +can not justify neglecting to make every effort to eradicate it by law. + +The education of the colored race under Government encouragement is +proceeding successfully and ought to have continuing support. An increasing +need exists for properly educated and trained medical skill to be devoted +to the service of this race. + +INSULAR POSSESSIONS + +This Government holds in sacred trusteeship islands which it has acquired +in the East and West Indies. In all of them the people are more prosperous +than at any previous time. A system of good roads, education, and general +development is in progress. The people are better governed than ever before +and generally content. + +In the Philippine Islands Maj. Gen. Leonard Wood has been Governor General +for five years and has administered his office with tact and ability +greatly to the success of the Filipino people. These are a proud and +sensitive race, who are making such progress with our cooperation that we +can view the results of this experiment with great satisfaction. As we are +attempting to assist this race toward self-government, we should look upon +their wishes with great respect, granting their requests immediately when +they are right, yet maintaining a frank firmness in refusing when they are +wrong. We shall measure their progress in no small part by their acceptance +of the terms of the organic law under which the islands are governed and +their faithful observance of its provisions. Need exists for clarifying the +duties of the auditor and declaring them to be what everyone had supposed +they were. We have placed our own expenditures under the supervision of the +Comptroller General. It is not likely that the expenditures in the +Philippine Islands need less supervision than our own. The Governor General +is hampered in his selection of subordinates by the necessity of securing a +confirmation, which has oftentimes driven him to the expediency of using +Army officers in work for which civilian experts would be much better +fitted. Means should be provided for this and such other purposes as he may +require out of the revenue which this Government now turns back to the +Philippine treasury. + +In order that these possessions might stiffer no seeming neglect, I have +recently sent Col. Carmi A. Thompson to the islands to make a survey in +cooperation with the Governor General to suggest what might be done to +improve conditions. Later, I may make a more extended report including +recommendations. The economic development of the islands is very important. +They ought not to be turned back to the people until they are both +politically fitted for self-government and economically independent. Large +areas are adaptable to the production of rubber. No one contemplates any +time in the future either under the present or a more independent form of +government when we should not assume some responsibility for their defense. +For their economic advantage, for the employment of their people, and as a +contribution to our power of defense which could not be carried on without +rubber, I believe this industry should be encouraged. It is especially +adapted to the Filipino people themselves, who might cultivate it +individually on a small acreage. It could be carried on extensively by +American capital in a way to furnish employment at good wages. I am opposed +to the promotion of any policy that does not provide for absolute freedom +on the part of the wage earners and do not think we should undertake to +give power for large holdings of land in the islands against the opposition +of the people of the locality. Any development of the islands must be +solely with the first object of benefiting the people of the islands. At an +early day, these possessions should be taken out from under all military +control and administered entirely on the civil side of government. + +NATIONAL DEFENSE + +Our policy of national defense is not one of making war, but of insuring +peace. The land and sea force of America, both in its domestic and foreign +implications, is distinctly a peace force. It is an arm of the police power +to guarantee order and the execution of the law at home and security to our +citizens abroad. No self-respecting nation would neglect to provide an army +and navy proportionate to its population, the extent of its territory, and +the dignity of the place which it occupies in the world. When it is +considered that no navy in the world, with one exception, approaches ours +and none surpasses it, that our Regular Army of about 115,000 men is the +equal of any other like number of troops, that our entire permanent and +reserve land and sea force trained and training consists of a personnel of +about 610,000, and that our annual appropriations are about $680,000,000 a +year, expended under the direction of an exceedingly competent staff, it +can not be said that our country is neglecting its national defense. It is +true that a cult of disparagement exists, but that candid examination made +by the Congress through its various committees has always reassured the +country and demonstrated that it is maintaining the most adequate defensive +forces in these present years that it has ever supported in time of peace. + +This general policy should be kept in effect. Here and there temporary +changes may be made in personnel to meet requirements in other directions. +Attention should be given to submarines, cruisers, and air forces. +Particular points may need strengthening, but as a whole our military power +is sufficient. + +The one weak place in the whole line is our still stupendous war debt. In +any modern campaign the dollars are the shock troops. With a depleted +treasury in the rear, no army can maintain itself in the field. A country +loaded with debt is a country devoid of the first line of defense. Economy +is the handmaid of preparedness. If we wish to be able to defend ourselves +to the full extent of our power in the future, we shall discharge as soon +as possible the financial burden of the last war. Otherwise we would face a +crisis with a part of our capital resources already expended. + +The amount and kind of our military equipment is preeminently a question +for the decision of the Congress, after giving due consideration to the +advice of military experts and the available public revenue. Nothing is +more laudable than the cooperation of the agricultural and industrial +resources of the country for the purpose of supplying the needs of national +defense. In time of peril the people employed in these interests +volunteered in a most self-sacrificing way, often at the nominal charge of +a dollar a year. But the Army and Navy are not supported for the benefit of +supply concerns; supply concerns are supported for the benefit of the Army +and Navy. The distribution of orders on what is needed from different +concerns for the purpose of keeping up equipment and organization is +perfectly justified, but any attempt to prevail upon the Government to +purchase beyond its needs ought not to be tolerated. It is eminently fair +that those who deal with the Government should do so at a reasonable +profit. However, public money is expended not that some one may profit by +it, but in order to serve a public purpose. + +While our policy of national defense will proceed in order that we may be +independent and self-sufficient, I am opposed to engaging in any attempt at +competitive armaments. No matter how much or how little some other country +may feel constrained to provide, we can well afford to set the example, not +of being dictated to by others, but of adopting our own standards. We are +strong enough to pursue that method, which will be a most wholesome model +for the rest of the world. We are eminently peaceful, but we are by no +means weak. While we submit our differences with others, not to the +adjudication of force, but of reason, it is not because we are unable to +defend our rights. While we are doing our best to eliminate all resort to +war for the purpose of settling disputes, we can not but remember that the +peace we now enjoy had to be won by the sword and that if the rights of our +country are to be defended we can not rely for that purpose upon anyone but +ourselves. We can not shirk the responsibility, which is the first +requisite of all government, of preserving its own integrity and +maintaining the rights of its own citizens. It is only in accordance with +these principles that we can establish any lasting foundations for an +honorable and permanent peace. + +It is for these reasons that our country, like any other country, proposes +to provide itself with an army and navy supported by a merchant marine. Yet +these are not for competition with any other power. For years we have +besought nations to disarm. We have recently expressed our willingness at +Geneva to enter into treaties for the limitation of all types of warships +according to the ratio adopted at the Washington Conference. This offer is +still pending. While we are and shall continue to be armed it is not as a +menace, but rather a common assurance of tranquility to all the peaceloving +people of the world. For us to do any less would be to disregard our +obligations, evade our responsibilities, and jeopardize our national honor. + +VETERANS + +This country, not only because it is bound by honor but because of the +satisfaction derived from it, has always lavished its bounty upon its +veterans. For years a service pension has been bestowed upon the Grand Army +on reaching a certain age. Like provision has been made for the survivors +of the Spanish War. A liberal future compensation has been granted to all +the veterans of the World War. But it is in the case of the, disabled and +the dependents that the Government exhibits its greatest solicitude. This +work is being well administered by the Veterans' Bureau. The main +unfinished feature is that of hospitalization. This requirement is being +rapidly met. Various veteran bodies will present to you recommendations +which should have your careful consideration. At the last session we +increased our annual expenditure for pensions and relief on account of the +veterans of three wars. While I approve of proper relief for all suffering, +I do not favor any further extension of our pension system at this time. + +ALIEN PROPERTY + +We still have in the possession of the Government the alien property. It +has always been the policy of America to hold that private enemy property +should not be confiscated in time of war. This principle we have +scrupulously observed. As this property is security for the claims of our +citizens and our Government, we can not relinquish it without adequate +provision for their reimbursement. Legislation for the return of this +property, accompanied by suitable provisions for the liquidation of the +claims of our citizens and our Treasury, should be adopted. If our +Government releases to foreigners the security which it holds for +Americans, it must at the same time provide satisfactory safeguards for +meeting American claims. + +PROHIBITION + +The duly authorized public authorities of this country have made +prohibition the law of the land. Acting under the Constitution the Congress +and the legislatures of practically all the, States have adopted +legislation for its enforcement. Some abuses have arisen which require +reform. Under the law the National Government has entrusted to the Treasury +Department the especial duty of regulation and enforcement. Such +supplementary legislation as it requires to meet existing conditions should +be carefully and speedily enacted. Failure to support the Constitution and +observe the law ought not to be tolerated by public opinion. Especially +those in public places, who have taken their oath to support the +Constitution, ought to be most scrupulous in its observance. Officers of +the Department of Justice throughout the country should be vigilant in +enforcing the law, but local authorities, which had always been mainly +responsible for the enforcement of law in relation to intoxicating liquor, +ought not to seek evasion by attempting to shift the burden wholly upon the +Federal agencies. Under the Constitution the States are jointly charged +with the Nation in providing for the enforcement of the prohibition +amendment. Some people do not like the amendment, some do not like other +parts of the Constitution, some do not like any of it. Those who entertain +such sentiments have a perfect right to seek through legal methods for a +change. But for any of our inhabitants to observe such parts of the +Constitution as they like, while disregarding others, is a doctrine that +would break down all protection of life and property and destroy the +American system of ordered liberty. + +FOREIGN RELATIONS + +The foreign policy of this Government is well known. It is one of peace +based on that mutual respect that arises from mutual regard for +international rights and the discharge of international obligations. It is +our purpose to promote understanding and good will between ourselves and +all other people. The American people are altogether lacking in an +appreciation of the tremendous good fortune that surrounds their +international position. We have no traditional enemies. We are not +embarrassed over any disputed territory. We have no possessions that are +coveted by others; they have none that are coveted by us. Our borders are +unfortified. We fear no one; no one fears us. All the world knows that the +whole extent of our influence is against war and in favor of peace, against +the use of force and in favor of negotiation, arbitration, and adjudication +as a method of adjusting international differences. We look with disfavor +upon all aggressive warfare. We are strong enough so that no one can charge +us with weakness if we are slow to anger. Our place is sufficiently +established so that we need not be sensitive over trifles. Our resources, +are large enough so that we can afford to be generous. At the same time we +are a nation among nations and recognize a responsibility not only to +ourselves, but in the interests of a stable and enlightened civilization, +to protect and defend the international rights of our Government and our +citizens. + +It is because of our historical detachment and the generations of +comparative indifference toward it by other nations that our public is +inclined to consider altogether too seriously the reports that we are +criticized abroad. We never had a larger foreign trade than at the present +time. Our good offices were never more sought and the necessity for our +assistance and cooperation was never more universally declared in any time +of peace. We know that the sentiments which we entertain toward all other +nations are those of the most sincere friendship and good will and of all +unbounded desire to help, which we are perfectly willing to have judged by +their fruits. In our efforts to adjust our international obligations we +have met with a response which, when everything is considered, I believe +history will record as a most remarkable and gratifying demonstration of +the sanctity with which civilized nations undertake to discharge their +mutual obligations. Debt settlements have been negotiated with practically +all of those who owed us and all finally adjusted but two, which are, in +process of ratification. When we consider the real sacrifice that will be +necessary on the part of other nations, considering all their +circumstances, to meet their agreed payments, we ought to hold them in +increased admiration and respect. It is true that we have extended to them +very generous treatment, but it is also true that they have agreed to repay +its all that we loaned to them and some interest. + +A special conference on the Chinese customs tariff provided for by the +treaty between the nine powers relating to the Chinese customs tariff +signed at Washington on February 6, 1922, was called by the Chinese +Government to meet at Peking, on October 26, 1925. We participated in this +conference through fully empowered delegates and, with good will, +endeavored to cooperate with the other participating powers with a view to +putting into effect promises made to China at the Washington conference, +and considering any reasonable proposal that might be made by the Chinese +Government for the revision of the treaties on the subject of China's +tariff. With these aims in view the American delegation at the outset of +the conference proposed to put into effect the surtaxes provided for by the +Washington treaty and to proceed immediately to the negotiation of a +treaty, which, among other things, was to make provision for the abolition +of taxes collected on goods in transit, remove the tariff restrictions in +existing treaties, and put into effect the national tariff law of China. + +Early in April of the present year the central Chinese Government was +ousted from power by opposing warring factions. It became impossible under +the circumstances to continue the negotiations. Finally, on July 3, the +delegates of the foreign powers, including those of the United States, +issued a statement expressing their unanimous and earnest desire to proceed +with the work of the conference at the earliest possible moment when the +delegates of the Chinese Government are in a position to resume discussions +with the foreign delegates of the problems before the conference. We are +prepared to resume the negotiations thus interrupted whenever a Government +representing the Chinese people and acting on their behalf presents itself. +The fact that constant warfare between contending Chinese factions has +rendered it impossible to bring these negotiations to a successful +conclusion is a matter of deep regret. Throughout these conflicts we have +maintained a position of the most careful neutrality. Our naval vessels in +Asiatic waters, pursuant to treaty rights, have been used only for the +protection of American citizens. + +Silas H. Strawn, Esq., was sent to China as American commissioner to +cooperate with commissioners of the other powers in the establishment of a +commission to inquire into the present practice of extraterritorial +jurisdiction in China, with a view to reporting to the Governments of the +several powers their findings of fact in regard to these matters. The +commission commenced its work in January, 1926, and agreed upon a joint +report which was signed on September 16, 1926. The commission's report has +been received and is being studied with a view to determining our future +policy in regard to the question of extraterritorial privileges under +treaties between the United States and China. + +The Preparatory Commission for the Disarmament Conference met at Geneva on +May 18 and its work has been proceeding almost continuously since that +date. It would be premature to attempt to form a judgment as to the +progress that has been made. The commission has had before it a +comprehensive list of questions touching upon all aspects of the question +of the limitation of armament. In the commission's discussions many +differences of opinion have developed. However, I am hopeful that at least +some measure of agreement will be reached as the discussions continue. The +American representation on the commission has consistently tried to be +helpful, and has kept before it the practical objective to which the +commission is working, namely, actual agreements for the limitation of +armaments. Our representatives will continue their work in that direction. + +One of the most encouraging features of the commission's work thus far has +been the agreement in principle among the naval experts of a majority of +the powers parties to the Washington treaty limiting naval armament upon +methods and standards for the comparison and further limitation of naval +armament. It is needless to say that at the proper time I shall be prepared +to proceed along practical lines to the conclusion of agreements carrying +further the work begun at the Washington Conference in 1921. + +DEPARTMENT REPORTS + +Many important subjects which it is impossible even to mention in the short +space of an annual message you will find fully discussed in the +departmental reports. A failure to include them here is not to be taken as +indicating any lack of interest, but only a disinclination to state +inadequately what has been much better done in other documents. + +THE CAPITAL CITY + +We are embarking on an ambitious building program for the city of +Washington. The Memorial Bridge is under way with all that it holds for use +and beauty. New buildings are soon contemplated. This program should +represent the best that exists in the art and science of architecture. Into +these structures which must be considered as of a permanent nature ought to +go the aspirations of the Nation, its ideals expressed in forms of beauty. +If our country wishes to compete with others, let it not be in the support +of armaments but in the making of a beautiful capital city. Let it express +the soul of America. Whenever an American is at the seat of his Government, +however traveled and cultured he may be, he ought to find a city of stately +proportion, symmetrically laid out and adorned with the best that there is +in architecture, which would arouse his imagination and stir his patriotic +pride. In the coming years Washington should be not only the art center of +our own country but the art center of the world. Around it should center +all that is best in science, in learning, in letters, and in art. These are +the results that justify the creation of those national resources with +which we have been favored. + +AMERICAN IDEALS + +America is not and must not be a country without ideals. They are useless +if they are only visionary; they are only valuable if they are practical. A +nation can not dwell constantly on the mountain tops. It has to be +replenished and sustained through the ceaseless toil of the less inspiring +valleys. But its face ought always to be turned upward, its vision ought +always to be fixed on high. + +We need ideals that can be followed in daily life, that can be translated +into terms of the home. We can not expect to be relieved from toil, but we +do expect to divest it of degrading conditions. Work is honorable; it is +entitled to an honorable recompense. We must strive mightily, but having +striven there is a defect in our political and social system if we are not +in general rewarded with success. To relieve the land of the burdens that +came from the war, to release to the individual more of the fruits of his +own industry, to increase his earning capacity and decrease his hours of +labor, to enlarge the circle of his vision through good roads and better +transportation, to lace before him the opportunity for education both in +science and in art, to leave him free to receive the inspiration of +religion, all these are ideals which deliver him from the servitude of the +body and exalt him to the service of the soul. Through this emancipation +from the things that are material, we broaden our dominion over the things +that are spiritual. + +*** + +State of the Union Address +Calvin Coolidge +December 6, 1927 + +Members of the Congress: + +It is gratifying to report that for the fourth consecutive year the state +of the Union in general is good. We are at peace. The country as a whole +has had a prosperity never exceeded. Wages are at their highest range, +employment is plentiful. Some parts of agriculture and industry have +lagged; some localities have suffered from storm and flood. But such losses +have been absorbed without serious detriment to our great economic +structure. Stocks of goods are moderate and a wholesome caution is +prevalent. Rates of interest for industry, agriculture, and government have +been reduced. Savers and investors are providing capital for new +construction in industry and public works. The purchasing power of +agriculture has increased. If the people maintain that confidence which +they are entitled to have in themselves, in each other, and in America, a +comfortable prosperity will continue. + +CONSTRUCTIVE ECONOMY + +Without constructive economy in Government expenditures we should not now +be enjoying these results or these prospects. Because we are not now +physically at war, some people are disposed to forget that our war debt +still remains. The Nation must make financial sacrifices, accompanied by a +stern self-denial in public expenditures, until we have conquered the +disabilities of our public finance. While our obligation to veterans and +dependents is large and continuing, the heavier burden of the national debt +is being steadily eliminated. At the end of this fiscal year it will be +reduced from about $26,600,000,000 to about $17,975,000,000. Annual +interest, including war savings, will have been reduced from $1,055,000,000 +to $670,0001,000. The sacrifices of the people, the economy of the +Government, are showing remarkable results. They should be continued for +the purpose of relieving the Nation of the burden of interest and debt and +releasing revenue for internal improvements and national development. + +Not only the amount, but the rate, of Government interest has been reduced. +Callable bonds have been refunded and paid, so that during this year the +average rate of interest on the present public debt for the first time fell +below 4 per cent. Keeping the credit of the Nation high is a tremendously +profitable operation. + +TAX REDUCTION + +The immediate fruit of economy and the retirement of the public debt is tax +reduction. The annual saving in interest between 1925 and 1929 is +$212,000,000. Without this no bill to relieve the taxpayers would be worth +proposing. The three measures already enacted leave our Government revenues +where they are not oppressive. Exemptions, have been increased until +115,000,000 people make but 2,500,000 individual taxable returns, so that +further reduction should be mainly for the purpose of removing +inequalities. The Secretary of the Treasury has recommended a measure which +would give us a much better balanced system of taxation and without +oppression produce sufficient revenue. It has my complete support. + +Unforeseen contingencies requiring money are always arising. Our probable +surplus for June 30, 1929, is small. A slight depression in business would +greatly reduce our revenue because of our present method of taxation. The +people ought to take no selfish attitude of pressing for removing moderate +and fair taxes which might produce a deficit. We must keep our budget +balanced for each year. That is the corner stone of our national credit, +the trifling price we pay to command the lowest rate of interest of any +great power in the world. Any surplus can be applied to debt reduction, and +debt reduction is tax reduction. Under the present circumstances it would +be far better to leave the rates as they are than to enact a bill carrying +the peril of a deficit. This is not a problem to be approached in a narrow +or partisan spirit. All of those who participate in finding a reasonable +solution will be entitled to participate in any credit that accrues from it +without regard to party. The Congress has already demonstrated that tax +legislation can be removed from purely political consideration into the +realm of patriotic business principles. + +Any bill for tax reduction should be written by those who are responsible +for raising, managing, and expending the finances of the Government. If +special interests, too often selfish, always uninformed of the national +needs as a whole, with hired agents using their proposed beneficiaries as +engines of propaganda, are permitted to influence the withdrawal of their +property from taxation, we shall have a law that is unbalanced and unjust, +bad for business, bad for the country, probably resulting in a deficit, +with disastrous financial Consequences. The Constitution has given the +Members of the Congress sole authority to decide what tax measures shall be +presented for approval. While welcoming information from any quarter, the +Congress should continue to exercise its own judgment in a matter so vital +and important to all the interests of the country as taxation. + +NATIONAL DEFENSE + +Being a nation relying not on force, but on fair dealing and good will, to +maintain peace with others, we have provided a moderate military force in a +form adapted solely to defense. It should be continued with a very generous +supply of officers and with the present base of personnel, subject to +fluctuations which may be temporarily desirable. + +The five-year program for our air forces is in keeping with this same +policy and commensurate with the notable contributions of America to the +science of aeronautics. The provisions of the law lately enacted are being +executed as fast as the practical difficulties of an orderly and stable +development permit. + +While our Army is small, prudence requires that it should be kept in a high +state of efficiency and provided with such supplies as would permit of its +immediate expansion. The garrison ration has lately been increased. +Recommendations for an appropriation of $6,166,000 for new housing made to +the previous Congress failed to pass. While most of the Army is well +housed, some of it which is quartered in wartime training camps is becoming +poorly housed. In the past three years $12,533,000 have been appropriated +for reconstruction and repairs, and an authorization has been approved of +$22,301,000 for new housing, under which $8,070,000 has already been +appropriated. A law has also been passed, complying with the request of the +War Department, allocating funds received from the sale of buildings and +land for housing purposes. The work, however, is not completed, so that +other appropriations are being recommended. + +Our Navy is likewise a weapon of defense. We have a foreign commerce and +ocean lines of trade unsurpassed by any other country. We have outlying +territory in the two great oceans and long stretches of seacoast studded +with the richest cities in the world. We are responsible for the protection +of a large population and the greatest treasure ever bestowed upon any +people. We are charged with an international duty of defending the Panama +Canal. To meet these responsibilities we need a very substantial sea +armament. It needs aircraft development, which is being provided under the +five-year program. It needs submarines as soon as the department decides +upon the best type of construction. It needs airplane carriers and a +material addition to its force of cruisers. We can plan for the future and +begin a moderate building program. + +This country has put away the Old World policy of competitive armaments. It +can never be relieved of the responsibility of adequate national defense. +We have one treaty secured by an unprecedented attitude of generosity on +our part for a limitation in naval armament. After most careful +preparation, extending over months, we recently made every effort to secure +a three-power treaty to the same end. We were granted much cooperation by +Japan, but we were unable to come to an agreement with Great Britain. While +the results of the conference were of considerable value, they were mostly +of a negative character. We know now that no agreement can be reached which +will be inconsistent with a considerable building program on our part. We +are ready and willing to continue the preparatory investigations on the +general subject of limitation of armaments which have been started under +the auspices of the League of Nations. + +We have a considerable cruiser tonnage, but a part of it is obsolete. +Everyone knew that had a three-power agreement been reached it would have +left us with the necessity of continuing our building program. The failure +to agree should not cause us to build either more or less than we otherwise +should. Any future treaty of limitation will call on us for more ships. We +should enter on no competition. We should refrain from no needful program. +It should be made clear to all the world that lacking a definite agreement, +the attitude of any other country is not to be permitted to alter our own +policy. It should especially be demonstrated that propaganda will not cause +us to change our course. Where there is no treaty limitation, the size of +the Navy which America is to have will be solely for America to determine. +No outside influence should enlarge it or diminish it. But it should be +known to all that our military power holds no threat of aggrandizement. It +is a guaranty of peace and security at home, and when it goes abroad it is +an instrument for the protection of the legal rights of our citizens under +international law, a refuge in time of disorder, and always the servant of +world peace. Wherever our flag goes the rights of humanity increase. + +MERCHANT MARINE + +The United States Government fleet is transporting a large amount of +freight and reducing its drain on the Treasury. The Shipping Board is +constantly under pressure, to which it too often yields, to protect private +interests, rather than serve the public welfare. More attention should be +given to merchant ships as an auxiliary of the Navy. The possibility of +including their masters and crews in the Naval Reserve, with some +reasonable compensation, should be thoroughly explored as a method of +encouraging private operation of shipping. Public operation is not a +success. No investigation, of which I have caused several to be made, has +failed to report that it could not succeed or to recommend speedy transfer +to private ownership. Our exporters and importers are both indifferent +about using American ships. It should be our policy to keep our present +vessels in repair and dispose of them as rapidly as possible, rather than +undertake any new construction. Their operation is a burden on the National +Treasury, for which we are not receiving sufficient benefits. + +COMMERCIAL AVIATION + +A rapid growth is taking place in aeronautics. The Department of Commerce +has charge of the inspection and licensing system and the construction of +national airways. Almost 8,000 miles are already completed and about 4,000 +miles more contemplated. Nearly 4,400 miles are now equipped and over 3,000 +miles more will have lighting and emergency landing fields by next July. +Air mail contracts are expected to cover 24 of these lines. Daily airway +flying is nearly 15,000 miles and is expected to reach 25,000 miles early +next year. + +Flights for other purposes exceed 22,000 miles each day. Over 900 airports, +completed and uncompleted, have been laid out. The demand for aircraft has +greatly increased. The policy already adopted by the Congress is producing +the sound development of this coming industry. + +WESTERN HEMISPHERE AIR MAIL + +Private enterprise is showing much interest in opening up aviation service +to Mexico and Central and South America. We are particularly solicitous to +have the United States take a leading part in this development. It is +understood that the governments of our sister countries would be willing to +cooperate. Their physical features, the undeveloped state of their +transportation, make an air service especially adaptable to their usage. +The Post Office Department should be granted power to make liberal +long-term contracts for carrying our mail, and authority should be given to +the Army and the Navy to detail aviators and planes to cooperate with +private enterprise in establishing such mail service with the consent of +the countries concerned. A committee of the Cabinet will later present a +report on this subject. + +GOOD ROADS + +The importance and benefit of good roads is more and more coming to be +appreciated. The National Government has been making liberal contributions +to encourage their construction. The results and benefits have been very +gratifying. National participation, however, should be confined to +trunk-line systems. The national tax on automobiles is now nearly +sufficient to meet this outlay. This tax is very small, and on low-priced +cars is not more than $2 or $3 each year. + +While the advantage of having good roads is very large, the desire for +improved highways is not limited to our own country. It should and does +include all the Western Hemisphere. The principal points in Canada are +already accessible. We ought to lend our encouragement in any way we can +for more good roads to all the principal points in this hemisphere south of +the Rio Grande. It has been our practice to supply these countries with +military and naval advisers, when they have requested it, to assist them in +national defense. The arts of peace are even more important to them and to +us. Authority should be given by law to provide them at their request with +engineering advisers for the construction of roads and bridges. In some of +these countries already wonderful progress is being made in road building, +but the engineering features are often very exacting and the financing +difficult. Private interests should look with favor on all reasonable loans +sought by these countries to open such main lines of travel. + +This general subject has been promoted by the Pan American Congress of +Highways, which will convene again at Rio de Janeiro in July, 1928. It is +desirable that the Congress should provide for the appointment of delegates +to represent the Government of the United States. + +CUBAN PARCEL POST + +We have a temporary parcel-post convention with Cuba. The advantage of it +is all on our side. During 1926 we shipped twelve times as many parcels, +weighing twenty-four times as much, as we received. This convention was +made on the understanding that we would repeal an old law prohibiting the +importation of cigars and cigarettes in quantities less than 3,000 enacted +in 1866 to discourage smuggling, for which it has long been unnecessary. +This law unjustly discriminates against an important industry of Cuba. Its +repeal has been recommended by the Treasury and Post Office Departments. +Unless this is done our merchants and railroads will find themselves +deprived of this large parcel-post business after the 1st of next March, +the date of the expiration of the convention, which has been extended upon +the specific understanding that it would expire at that time unless this +legislation was enacted. We purchase large quantities of tobacco made in +Cuba. It is not probable that our purchases would be any larger if this law +was repealed, while it would be an advantage to many other industries in +the United States. + +INSULAR POSSESSIONS + +Conditions in the Philippine Islands have been steadily improved. +Contentment and good order prevail. Roads, irrigation works, harbor +improvements, and public buildings are being constructed. Public education +and sanitation have been advanced. The Government is in a sound financial +condition. These immediate results were especially due to the +administration of Gov. Gen. Leonard Wood. The six years of his governorship +marked a distinct improvement in the islands and rank as one of the +outstanding accomplishments of this distinguished man. His death is a loss +to the Nation and the islands. + +Greater progress could be made, more efficiency could be put into +administration, if the Congress would undertake to expend, through its +appropriating power, all or a part of the customs revenues which are now +turned over to the Philippine treasury. The powers of the auditor of the +islands also need revision and clarification. The government of the islands +is about 98 per cent in the hands of the Filipinos. An extension of the +policy of self-government will be hastened by the demonstration on their +part of their desire and their ability to carry out cordially and +efficiently the provisions of the organic law enacted by the Congress for +the government of the islands. It would be well for a committee of the +Congress to visit the islands every two years. + +A fair degree of progress is being made in Porto Rico. Its agricultural +products are increasing; its treasury position, which has given much +concern, shows improvement. I am advised by the governor that educational +facilities are still lacking. Roads are being constructed, which he +represents are the first requisite for building schoolhouses. The loyalty +of the island to the United States is exceedingly gratifying. A memorial +will be presented to you requesting authority to have the governor elected +by the people of Porto Rico. This was never done in the case of our own +Territories. It is admitted that education outside of the towns is as yet +very deficient. Until it has progressed further the efficiency of the +government and the happiness of the people may need the guiding hand of an +appointed governor. As it is not contemplated that any change should be +made immediately, the general subject may well have the thoughtful study of +the Congress. + +PANAMA CANAL + +The number of commercial ships passing through the Panama Canal has +increased from 3,967 in 1923 to 5,475 in 1927. The total amount of tolls +turned into the Treasury is over $166,000,000, while all the operations of +the canal have yielded a surplus of about $80,000,000. In order to provide +additional storage of water and give some control over the floods of the +Chagres River, it is proposed to erect a dam to cost about $12,000,000 at +Alhajuela. It will take some five years to complete this work. + +AGRICULTURE + +The past year has seen a marked improvement in the general condition of +agriculture. Production is better balanced and without acute shortage or +heavy surplus. Costs have been reduced and the average output of the worker +increased. The level of farm prices has risen while others have fallen, so +that the purchasing power of the farmer is approaching a normal figure. The +individual farmer is entitled to great credit for the progress made since +1921. He has adjusted his production and through cooperative organizations +and other methods improved his marketing. He is using authenticated facts +and employing sound methods which other industries are obliged to use to +secure stability and prosperity. The old-fashioned haphazard system is +being abandoned, economics are being applied to ascertain the best adapted +unit of land, diversification is being promoted, and scientific methods are +being used in production, and business principles in marketing. + +Agriculture has not fully recovered from postwar depression. The fact is +that economic progress never marches forward in a straight line. It goes in +waves. One part goes ahead, while another halts and another recedes. +Everybody wishes agriculture to prosper. Any sound and workable proposal to +help the farmer will have the earnest support of the Government. Their +interests are not all identical. Legislation should assist as many +producers in as many regions as possible. It should be the aim to assist +the farmer to work out his own salvation socially and economically. No plan +will be of any permanent value to him which does not leave him standing on +his own foundation. + +In the past the Government has spent vast sums to bring land under +cultivation. It is apparent that this has reached temporarily the +saturation point. We have had a surplus of production and a poor market for +land, which has only lately shown signs of improvement. The main problem +which is presented for solution is one of dealing with a surplus of +production. It is useless to propose a temporary expedient. What is needed +is permanency and stability. Government price fixing is known to be unsound +and bound to result in disaster. A Government subsidy would work out in the +same way. It can not be sound for all of the people to hire some of the +people to produce a crop which neither the producers nor the rest of the +people want. + +Price fixing and subsidy will both increase the surplus, instead of +diminishing it. Putting the Government directly into business is merely a +combination of subsidy and price fixing aggravated by political pressure. +These expedients would lead logically to telling the farmer by law what and +how much he should plant and where he should plant it, and what and how +much he should sell and where he should sell it. The most effective means +of dealing with surplus crops is to reduce the surplus acreage. While this +can not be done by the individual farmer, it can be done through the +organizations already in existence, through the information published by +the Department of Agriculture, and especially through banks and others who +supply credit refusing to finance an acreage manifestly too large. + +It is impossible to provide by law for an assured success and prosperity +for all those who engage in farming. If acreage becomes overextended, the +Government can not assume responsibility for it. The Government can, +however, assist cooperative associations and other organizations in orderly +marketing and handling a surplus clearly due to weather and seasonal +conditions, in order to save the producer from preventable loss. While it +is probably impossible to secure this result at a single step, and much +will have to be worked out by trial and rejection, a beginning could be +made by setting up a Federal board or commission of able and experienced +men in marketing, granting equal advantages under this board to the various +agricultural commodities and sections of the country, giving encouragement +to the cooperative movement in agriculture, and providing a revolving loan +fund at a moderate rate of interest for the necessary financing. Such +legislation would lay the foundation for a permanent solution of the +surplus problem. + +This is not a proposal to lend more money to the farmer, who is already +fairly well financed, but to lend money temporarily to experimental +marketing associations which will no doubt ultimately be financed by the +regularly established banks, as were the temporary operations of the War +Finance Corporation. Cooperative marketing especially would be provided +with means of buying or building physical properties. + +The National Government has almost entirely relieved the farmer from income +taxes by successive tax reductions, but State and local taxes have +increased, putting on him a grievous burden. A policy of rigid economy +should be applied to State and local expenditures. This is clearly within +the legislative domain of the States. The Federal Government has also +improved our banking structure and system of agricultural credits. The +farmer will be greatly benefited by similar action in many States. The +Department of Agriculture is undergoing changes in organization in order +more completely to separate the research and regulatory divisions, that +each may be better administered. More emphasis is being placed on the +research program, not only by enlarging the appropriations for State +experiment stations but by providing funds for expanding the research work +of the department. It is in this direction that much future progress can be +expected. + +THE PROTECTIVE TARIFF + +The present tariff rates supply the National Treasury with well over +$600,000,000 of annual revenue. Yet, about 65 per cent of our imports come +in duty free. Of the remaining 35 per cent of imports on which duties are +laid about 23 per cent consists of luxuries and agricultural products, and +the balance of about 12 per cent, amounting, to around $560,000,000 is made +up of manufactures and merchandise. As no one is advocating any material +reduction in the rates on agriculture or luxuries, it is only the +comparatively small amount of about $560,000,000 of other imports that are +really considered in any discussion of reducing tariff rates. While this +amount, duty free, would be large enough seriously to depress many lines of +business in our own country, it is of small importance when spread over the +rest of the world. + +It is often stated that a reduction of tariff rates on industry would +benefit agriculture. It would be interesting to know to what commodities it +is thought this could be applied. Everything the farmer uses in farming is +already on the free list. Nearly everything he sells is protected. It would +seem to be obvious that it is better for the country to have the farmer +raise food to supply the domestic manufacturer than the foreign +manufacturer. In one case our country would have only the farmer; in the +other it would have the farmer and the manufacturer. Assuming that Europe +would have more money if it sold us larger amounts of merchandise, it is +not certain it would consume more food, or, if it did, that its purchases +would be made in this country. Undoubtedly it would resort to the cheapest +market, which is by no means ours. The largest and best and most profitable +market for the farmer in the world is our own domestic market. Any great +increase in manufactured imports means the closing of our own plants. +Nothing would be worse for agriculture. + +Probably no one expects a material reduction in the rates on manufactures +while maintaining the rates on agriculture. A material reduction in either +would be disastrous to the farmer. It would mean a general shrinkage of +values, a deflation of prices, a reduction of wages, a general depression +carrying our people down to the low standard of living in our competing +countries. It is obvious that this would not improve but destroy our market +for imports, which is best served by maintaining our present high +purchasing power under which in the past five years imports have increased +63 per cent. + +FARM LOAN SYSTEM + +It is exceedingly important that the Federal land and joint-stock land +banks should furnish the best possible service for agriculture. Certain +joint-stock banks have fallen into improper and unsound practices, +resulting in the indictment of the officials of three of them. More money +has been provided for examinations, and at the instance of the Treasury +rules and regulations of the Federal Farm Board have been revised. Early +last May three of its members resigned. Their places were filled with men +connected with the War Finance Corporation. Eugene Meyer being designated +as Farm Loan Commissioner. The new members have demonstrated their ability +in the field of agricultural finance in the extensive operations of he War +Finance Corporation. Three joint-stock banks have gone into receivership. +It is necessary to preserve the public confidence in this system in order +to find a market for their bonds. A recent flotation was made at a record +low rate of 4 per cent. Careful supervision is absolutely necessary to +protect the investor and enable these banks to exercise their chief +function in serving agriculture. + +MUSCLE SHOALS + +The last year has seen considerable changes in the problem of Muscle +Shoals. Development of other methods show that nitrates can probably be +produced at less cost than by the use of hydroelectric power. Extensive +investigation made by the Department of War indicates that the nitrate +plants on this project are of little value for national defense and can +probably be disposed of within two years. The oxidation part of the plants, +however, should be retained indefinitely. This leaves this project mostly +concerned with power. It should, nevertheless, continue to be dedicated to +agriculture. It is probable that this desire can be best served by +disposing of the plant and applying the revenues received from it to +research for methods of more economical production of concentrated +fertilizer and to demonstrations and other methods of stimulating its use +on the farm. But in disposing of the property preference should be given to +proposals to use all or part of it for nitrate production and fertilizer +manufacturing. + +FLOOD CONTROL + +For many years the Federal Government has been building a system of dikes +along the Mississippi River for protection against high water. During the +past season the lower States were overcome by a most disastrous flood. Many +thousands of square miles were inundated a great many lives were lost, much +livestock was drowned, and a very heavy destruction of property was +inflicted upon the inhabitants. The American Red Cross at once went to the +relief of the stricken communities. Appeals for contributions have brought +in over $17,000,000. The Federal Government has provided services, +equipment, and supplies probably amounting to about $7,000,000 more. +Between $5,000,000 and $10,000,000 in addition have been provided by local +railroads, the States, and their political units. Credits have been +arranged by the Farm Loan Board, and three emergency finance corporations +with a total capital of $3,000,000 have insured additional resources to the +extent of $12,000,000. Through these means the 700,000 people in the +flooded areas have been adequately supported. Provision has been made to +care for those in need until after the 1st of January. + +The Engineering Corps of the Army has contracted to close all breaks in the +dike system before the next season of high water. A most thorough and +elaborate survey of the whole situation has been made and embodied in a +report with recommendations for future flood control, which will be +presented to the Congress. The carrying out of their plans will necessarily +extend over a series of years. They will call for a raising and +strengthening of the dike system with provision for emergency spillway's +and improvements for the benefit of navigation. + +Under the present law the land adjacent to the dikes has paid one-third of +the cost of their construction. This has been a most extraordinary +concession from the plan adopted in relation to irrigation, where the +general rule has been that the land benefited should bear the entire +expense. It is true, of course, that the troublesome waters do not +originate on the land to be reclaimed, but it is also true that such waters +have a right of way through that section of the country and the land there +is charged with that easement. It is the land of this region that is to be +benefited. To say that it is unable to bear any expense of reclamation is +the same thing as saying that it is not worth reclaiming. Because of +expenses incurred and charges already held against this land, it seems +probable that some revision will have to be made concerning the proportion +of cost which it should bear. But it is extremely important that it should +pay enough so that those requesting improvements will be charged with some +responsibility for their cost, and the neighborhood where works are +constructed have a pecuniary interest in preventing waste and extravagance +and securing a wise and economical expenditure of public funds. + +It is necessary to look upon this emergency as a national disaster. It has +been so treated from its inception. Our whole people have provided with +great generosity for its relief. Most of the departments of the Federal +Government have been engaged in the same effort. The governments of the +afflicted areas, both State and municipal, can not be given too high praise +for the courageous and helpful way in which they have come to the rescue of +the people. If the sources directly chargeable can not meet the demand, the +National Government should not fail to provide generous relief. This, +however, does not mean restoration. The Government is not an insurer of its +citizens against the hazard of the elements. We shall always have flood and +drought, heat and cold, earthquake and wind, lightning and tidal wave, +which are all too constant in their afflictions. The Government does not +undertake to reimburse its citizens for loss and damage incurred under such +circumstances. It is chargeable, however, with the rebuilding of public +works and the humanitarian duty of relieving its citizens from distress. + +The people in the flooded area and their representatives have approached +this problem in the most generous and broad-minded way. They should be met +with a like spirit on the part of the National government. This is all one +country. The public needs of each part must be provided for by the public +at large. No required relief should be refused. An adequate plan should be +adopted to prevent a recurrence of this disaster in order that the people +may restore to productivity and comfort their fields and their towns. + +Legislation by this Congress should be confined to our principal and most +pressing problem, the lower Mississippi, considering tributaries only so +far as they materially affect the main flood problem. A definite Federal +program relating to our waterways was proposed when the last Congress +authorized a comprehensive survey of all the important streams of the +country in order to provide for their improvement, including flood control, +navigation, power, and irrigation. Other legislation should wait pending a +report on this survey. The recognized needs of the Mississippi should not +be made a vehicle for carrying other projects. All proposals for +development should stand on their own merits. Any other method would result +in ill-advised conclusions, great waste of money, and instead of promoting +would delay the orderly and certain utilization of our water resources. + +Very recently several of the New England States have suffered somewhat +similarly from heavy rainfall and high water. No reliable estimate of +damage has yet been computed, but it is very large to private and public +property. The Red Cross is generously undertaking what is needed for +immediate relief, repair and reconstruction of houses, restocking of +domestic animals, and food, clothing, and shelter. A considerable sum of +money will be available through the regular channels in the Department of +Agriculture for reconstruction of highways. It may be necessary to grant +special aid for this purpose. Complete reports of what is required will +undoubtedly be available early in the session. + +INLAND NAVIGATION + +The Congress in its last session authorized the general improvements +necessary to provide the Mississippi waterway system with better +transportation. Stabilization of the levels of the Great Lakes and their +opening to the sea by an effective shipway remain to be considered. Since +the last session the Board of Engineers of the War Department has made a +report on the proposal for a canal through the State of New York, and the +Joint Board of Engineers, representing Canada and the United States, has +finished a report on the St. Lawrence River. Both of these boards conclude +that the St. Lawrence project is cheaper, affords a more expeditious method +of placing western products in European markets, and will cost less to +operate. The State Department has requested the Canadian Government to +negotiate treaties necessary to provide for this improvement. It will also +be necessary to secure an agreement with Canada to put in works necessary +to prevent fluctuation in the levels of the Great Lakes. + +Legislation is desirable for the construction of a dam at Boulder Canyon on +the Colorado River, primarily as a method of flood control and irrigation. +A secondary result would be a considerable power development and a source +of domestic water supply for southern California. Flood control is clearly +a national problem, and water supply is a Government problem, but every +other possibility should be exhausted before the Federal Government becomes +engaged in the power business. The States which are interested ought to +reach mutual agreement. This project is in reality their work. If they wish +the Federal Government to undertake it, they should not hesitate to make +the necessary concessions to each other. This subject is fully discussed in +the annual report of the Secretary of the Interior. The Columbia River +Basin project is being studied and will be one to be considered at some +future time. + +The Inland Waterways Corporation is proving successful and especially +beneficial to agriculture. A survey is being made to determine its future +needs. It has never been contemplated that if inland rivers were opened to +navigation it would then be necessary for the Federal Government to provide +the navigation. Such a request is very nearly the equivalent of a +declaration that their navigation is not profitable, that the commodities +which they are to carry can be taken at a cheaper rate by some other +method, in which case the hundreds of millions of dollars proposed to be +expended for opening rivers to navigation would be not only wasted, but +would entail further constant expenditures to carry the commodities of +private persons for less than cost. + +The policy is well established that the Government should open public +highways on land and on water, but for use of the public in their private +capacity. It has put on some demonstration barge lines, but always with the +expectation that if they prove profitable they would pass into private +hands and if they do not prove profitable they will be withdrawn. The +problems of transportation over inland waterways should be taken up by +private enterprise, so that the public will have the advantage of +competition in service. It is expected that some of our lines can be sold, +some more demonstration work done, and that with the completion of the Ohio +project a policy of private operation can be fully developed. + +PROHIBITION + +After more than two generations of constant debate, our country adopted a +system of national prohibition under all the solemnities involved in an +amendment to the Federal Constitution. In obedience to this mandate the +Congress and the States, with one or two notable exceptions, have passed +required laws for its administration and enforcement. This imposes upon the +citizenship of the country, and especially on all public officers, not only +the duty to enforce, but the obligation to observe the sanctions of this +constitutional provision and its resulting laws. If this condition could be +secured, all question concerning prohibition would cease. The Federal +Government is making every effort to accomplish these results through +careful organization, large appropriations, and administrative effort. +Smuggling has been greatly cut down, the larger sources of supply for +illegal sale have been checked, and by means of injunction and criminal +prosecution the process of enforcement is being applied. The same vigilance +on the part of local governments would render these efforts much more +successful. The Federal authorities propose to discharge their obligation +for enforcement to the full extent of their ability. + +THE NEGRO + +History does not anywhere record so much progress made in the same length +of time as that which has been accomplished by the Negro race in the United +States since the Emancipation Proclamation. They have come up from slavery +to be prominent in education, the professions, art, science, agriculture, +banking, and commerce. It is estimated that 50,000 of them are on the +Government pay rolls, drawing about $50,000,000 each year. They have been +the recipients of presidential appointments and their professional ability +has arisen to a sufficiently high plane so that they have been intrusted +with the entire management and control of the great veterans hospital at +Tuskegee, where their conduct has taken high rank. They have shown that +they have been worthy of all the encouragement which they have received. +Nevertheless, they are too often subjected to thoughtless and inconsiderate +treatment, unworthy alike of the white or colored races. They have +especially been made the target of the foul crime of lynching. For several +years these acts of unlawful violence had been diminishing. In the last +year they have shown an increase. Every principle of order and law and +liberty is opposed to this crime. The Congress should enact any legislation +it can under the Constitution to provide for its elimination. + +AMERICAN INDIAN + +The condition of the American Indian has much improved in recent years. +Full citizenship was bestowed upon them on June 2, 1924, and appropriations +for their care and advancement have been increased. Still there remains +much to be done. + +Notable increases in appropriations for the several major functions +performed by the Department of the Interior on behalf of the Indians have +marked the last five years. In that time, successive annual increases in +appropriations for their education total $1,804,325; for medical care, +$578,000; and for industrial advancement, $205,000; or $2,582,325 more than +would have been spent in the same period on the basis of appropriations for +1923 and the preceding years. + +The needs along health, educational, industrial and social lines however, +are great, and the Budget estimates for 1929 include still further +increases for Indian administration. + +To advance the time when the Indians may become self-sustaining, it is my +belief that the Federal Government should continue to improve the +facilities for their care, and as rapidly as possible turn its +responsibility over to the States. + +COAL + +Legislation authorizing a system of fuel administration and the appointment +by the President of a Board of Mediation and Conciliation in case of actual +or threatened interruption of production is needed. The miners themselves +are now seeking information and action from the Government, which could +readily be secured through such a board. It is believed that a thorough +investigation and reconsideration of this proposed policy by the Congress +will demonstrate that this recommendation is sound and should be adopted. + +PETROLEUM CONSERVATION + +The National Government is undertaking to join in the formation of a +cooperative committee of lawyers, engineers, and public officers, to +consider what legislation by the States or by the Congress can be adopted +for the preservation and conservation of our supply of petroleum. This has +come to be one of the main dependencies for transportation and power so +necessary to our agricultural and industrial life. It is expected the +report of this committee will be available for later congressional action. +Meantime, the requirement that the Secretary of the Interior should make +certain leases of land belonging to the Osage Indians, in accordance with +the act of March 3, 1921, should be repealed. The authority to lease should +be discretionary, in order that the property of the Indians way not be +wasted and the public suffer a future lack of supply. + +ALIEN PROPERTY + +Under treaty the property held by the Alien Property Custodian was to be +retained until suitable provision had been made for the satisfaction of +American claims. While still protecting the American claimants, in order to +afford every possible accommodation to the nationals of the countries whose +property was held, the Congress has made liberal provision for the return +of a larger part of the property. All trusts under $10,000 were returned in +full, and partial returns were made on the others. The total returned was +approximately $350,000,000. + +There is still retained, however, about $250,000,000. The Mixed Claims +Commission has made such progress in the adjudication of claims that +legislation can now be enacted providing for the return of the property, +which should be done under conditions which will protect our Government and +our claimants. Such a measure will be proposed, and I recommend its +enactment. + +RAILROAD CONSOLIDATION + +In order to increase the efficiency of transportation and decrease its cost +to the shipper, railroad consolidation must be secured. Legislation is +needed to simplify the necessary procedure to secure such agreements and +arrangements for consolidation, always under the control and with the +approval of the Interstate Commerce Commission. Pending this, no adequate +or permanent reorganization can be made of the freight-rate structure. +Meantime, both agriculture and industry are compelled to wait for needed +relief. This is purely a business question, which should be stripped of all +local and partisan bias and decided on broad principles and its merits in +order to promote the public welfare. A large amount of new construction and +equipment, which will furnish employment for labor and markets for +commodities of both factory and farm, wait on the decision of this +important question. Delay is holding back the progress of our country. + +Many of the same arguments are applicable to the consolidation of the +Washington traction companies. + +VETERANS + +The care which this country has lavished on its veterans is known of all +men. The yearly outlay for this purpose is about $750,000,000, or about the +cost of running the Federal Government, outside of the Post Office +Department, before the World War. The Congress will have before it +recommendations of the American Legion, the Veterans of Foreign Wars, and +other like organizations, which should receive candid consideration. We +should continue to foster our system of compensation and rehabilitation, +and provide hospitals and insurance. The magnitude of the undertaking is +already so large that all requests calling for further expenditure should +have the most searching scrutiny. Our present system of pensions is already +sufficiently liberal. It was increased by the last Congress for Civil and +Spanish War veterans and widows and for some dependents. + +It has been suggested that the various governmental agencies now dealing +with veterans' relief be consolidated. This would bring many advantages. It +is recommended that the proper committees of the Congress make a thorough +survey of this subject, in order to determine if legislation to secure such +consolidation is desirable. + +EDUCATION + +For many years it has been the policy of the Federal Government to +encourage and foster the cause of education. Large sums of money are +annually appropriated to carry on vocational training. Many millions go +into agricultural schools. The general subject is under the immediate +direction of a Commissioner of Education. While this subject is strictly a +State and local function, it should continue to have the encouragement of +the National Government. I am still of the opinion that much good could be +accomplished through the establishment of a Department of Education and +Relief, into which would be gathered all of these functions under one +directing member of the Cabinet. + +DEPARTMENT OF LABOR + +Industrial relations have never been more peaceful. In recent months they +have suffered from only one serious controversy. In all others difficulties +have been adjusted, both management and labor wishing to settle +controversies by friendly agreement rather than by compulsion. The welfare +of women and children is being especially guarded by our Department of +Labor. Its Children's Bureau is in cooperation with 26 State boards and 80 +juvenile courts. + +Through its Bureau of Immigration it has been found that medical +examination abroad has saved prospective immigrants from much hardship. +Some further legislation to provide for reuniting families when either the +husband or the wife is in this country, and granting more freedom for the +migration of the North American Indian tribes is desirable. + +The United States Employment Service has enabled about 2,000,000 men and +women to gain paying positions in the last fiscal year. Particular +attention has been given to assisting men past middle life and in providing +field labor for harvesting agricultural crops. This has been made possible +in part through the service of the Federal Board for Vocational Education, +which is cooperating with the States in a program to increase the technical +knowledge and skill of the wage earner. + +PUBLIC BUILDINGS + +Construction is under way in the country and ground has been broken for +carrying out a public-building program for Washington. We have reached a +time when not only the conveniences but the architectural beauty of the +public buildings of the Capital City should be given much attention. It +will be necessary to purchase further land and provide the required +continuing appropriations. + +HISTORICAL CELEBRATIONS + +Provision is being made to commemorate the two hundredth anniversary of the +birth of George Washington. Suggestion has been made for the construction +of a memorial road leading from the Capital to Mount Vernon, which may well +have the consideration of the Congress, and the commission intrusted with +preparations for the celebration will undoubtedly recommend publication of +the complete writings of Washington and a series of writings by different +authors relating to him. + +February 25, 1929. is the one hundred and fiftieth anniversary of the +capture of Fort Sackville, at Vincennes, in the State of Indiana. This +eventually brought into the Union what was known as the Northwest +Territory, embracing the region north of the Ohio River between the +Alleghenies and the Mississippi River. This expedition was led by George +Rogers Clark. His heroic character and the importance of his victory are +too little known and understood. They gave us not only this Northwest +Territory but by means of that the prospect of reaching the Pacific. The +State of Indiana is proposing to dedicate the site of Fort Sackville as a +national shrine. The Federal Government may well make some provision for +the erection under its own management of a fitting memorial at that point. + +FOREIGN RELATIONS + +It is the policy of the United States to promote peace. We are a peaceful +people and committed to the settling of disputes by amicable adjustment +rather than by force. We have believed that peace can best be secured by a +faithful observance on our part of the principles of international law, +accompanied by patience and conciliation, and requiring of others a like +treatment for ourselves. We have lately had some difference with Mexico +relative to the injuries inflicted upon our nationals and their property +within that country. A firm adherence to our rights and a scrupulous +respect for the sovereignty of Mexico, both in accordance with the law of +nations, coupled with patience and forbearance, it is hoped will resolve +all our differences without interfering with the friendly relationship +between the two Governments. + +We have been compelled to send naval and marine forces to China to protect +the lives and property of our citizens. Fortunately their simple presence +there has been sufficient to prevent any material loss of life. But there +has been considerable loss of property. That unhappy country is torn by +factions and revolutions which bid fair to last for an indefinite period. +Meanwhile we are protecting our citizens and stand ready to cooperate with +any government which may emerge in promoting the welfare of the people of +China. They have always had our friendship, and they should especially +merit our consideration in these days of their distraction and distress. + +We were confronted by similar condition on a small scale in Nicaragua. Our +marine and naval forces protected our citizens and their property and +prevented a heavy sacrifice of life and the destruction of that country by +a reversion to a state of revolution. Henry L. Stimson, former Secretary of +War, was sent there to cooperate with our diplomatic and military officers +in effecting a settlement between the contending parties. This was done on +the assurance that we would cooperate in restoring a state of peace where +our rights would be protected by giving our assistance in the conduct of +the next presidential election, which occurs in a few months. With this +assurance the population returned to their peacetime pursuits, with the +exception of some small roving bands of outlaws. + +In general, our relations with other countries can be said to have improved +within the year. While having a due regard for our own affairs, the +protection of our own rights, and the advancement of our own people, we can +afford to be liberal toward others. Our example has become of great +importance in the world. It is recognized that we are independent, +detached, and can and do take a disinterested position in relation to +international affairs. Our charity embraces the earth. Our trade is far +flung. Our financial favors are widespread. Those who are peaceful and +law-abiding realize that not only have they nothing to fear from us, but +that they can rely on our moral support. Proposals for promoting the peace +of the world will have careful consideration. But we are not a people who +are always seeking for a sign. We know that peace comes from honesty and +fair dealing, from moderation, and a generous regard for the rights of +others. The heart of the Nation is more important than treaties. A spirit +of generous consideration is a more certain defense than great armaments. +We should continue to promote peace by our example, and fortify it by such +international covenants against war as we are permitted under our +Constitution to make. + +AMERICAN PROGRESS + +Our country has made much progress. But it has taken, and will continue to +take, much effort. Competition will be keen, the temptation to selfishness +and arrogance will be severe, the provocations to deal harshly with weaker +peoples will be many. All of these are embraced in the opportunity for true +greatness. They will be overbalanced by cooperation by generosity, and a +spirit of neighborly kindness. The forces of the universe are taking +humanity in that direction. In doing good, in walking humbly, in sustaining +its own people in ministering to other nations, America will work out its +own mighty destiny. + +*** + +State of the Union Address +Calvin Coolidge +December 4, 1928 + +To the Congress of the United States: + +No Congress of the United States ever assembled, on surveying the state of +the Union, has met with a more pleasing prospect than that which appears at +the present time. In the domestic field there is tranquility and +contentment, harmonious relations between management and wage earner, +freedom from industrial strife, and the highest record of years of +prosperity. In the foreign field there is peace, the good will which comes +from mutual understanding, and the knowledge that the problems which a +short time ago appeared so ominous are yielding to the touch of manifest +friendship. The great wealth created by our enterprise and industry, and +saved by our economy, has had the widest distribution among our own people, +and has gone out in a steady stream to serve the charity and the business +of the world. The requirements of existence have passed beyond the standard +of necessity into the region of luxury. Enlarging production is consumed by +an increasing demand at home and an expanding commerce abroad. The country +can regard the present with satisfaction and anticipate the future with +optimism. + +The main source of these unexampled blessings lies in the integrity and +character of the American people. They have had great faith, which they +have supplemented with mighty works. They have been able to put trust in +each other and trust in their Government. Their candor in dealing with +foreign governments has commanded respect and confidence. Yet these +remarkable powers would have been exerted almost in vain without the +constant cooperation and careful administration of the Federal Government. + +We have been coming into a period which may be fairly characterized as a +conservation of our national resources. Wastefulness in public business and +private enterprise has been displaced by constructive economy. This has +been accomplished by bringing our domestic and foreign relations more and +more under a reign of law. A rule of force has been giving way to a rule of +reason. We have substituted for the vicious circle of increasing +expenditures, increasing tax rates, and diminishing profits the charmed +circle of diminishing expenditures, diminishing tax rates, and increasing +profits. + +Four times we have made a drastic revision of our internal revenue system, +abolishing many taxes and substantially reducing almost all others. Each +time the resulting stimulation to business has so increased taxable incomes +and profits that a surplus has been reduced. One-third of the national +debt has been paid, while much of the other two-thirds has been refunded at +lower rates, and these savings of interest and constant economies have +enabled us to repeat the satisfying process of more tax reductions. Under +this sound and healthful encouragement the national income has increased +nearly 50 per cent, until it is estimated to stand well over +$90,000,000,000. It gas been a method which has performed the seeming +miracle of leaving a much greater percentage of earnings in the hands of +the taxpayers with scarcely any diminution of the Government revenue. That +is constructive economy in the highest degree. It is the corner stone of +prosperity. It should not fail to be continued. + +This action began by the application of economy to public expenditure. If +it is to be permanent, it must be made so by the repeated application of +economy. There is no surplus on which to base further tax revision at this +time. Last June the estimates showed a threatened deficit for the current +fiscal year of $94,000,000. Under my direction the departments began saving +all they could out of their present appropriations. The last tax reduction +brought an encouraging improvement in business, beginning early in +October, which will also increase our revenue. The combination of economy +and good times now indicates a surplus of about $37,000,000. This is a +margin of less than I percent on out, expenditures and makes it obvious +that the Treasury is in no condition to undertake increases in expenditures +to be made before June 30. It is necessary therefore during the present +session to refrain from new appropriations for immediate outlay, or if such +are absolutely required to provide for them by new revenue; otherwise, we +shall reach the end of the year with the unthinkable result of an unbalanced +budget. For the first time during my term of office we face that +contingency. I am certain that the Congress would not pass and I should not +feel warranted in approving legislation which would involve us in that +financial disgrace. + +On the whole the finances of the Government are most satisfactory. Last +year the national debt was reduced about $906,000,000. The refunding and +retirement of the second and third Liberty loans have just been brought to +a successful conclusion, which will save about $75,000,000 a year in +interest. The unpaid balance has been arranged in maturities convenient +for carrying out our permanent debt-paying Program. + +The enormous savings made have not been at the expense of any legitimate +public need. The Government plant has been kept up and many improvements +are tinder way, while its service is fully manned and the general +efficiency of operation has increased. We have been enabled to undertake +many new enterprises. Among these are the adjusted compensation of the +veterans of the World War, which is costing us $112,000,000 a year; +amortizing our liability to the civil service retirement funds, +$20,000,000; increase of expenditures for rivers and harbors including +flood control, $43,000,000; public buildings, $47,000,000. In 1928 we spent +$50,000,000 in the adjustment of war claims and alien property. These are +examples of a large list of items. + +FOREIGN RELATIONS + +When we turn from our domestic affairs to our foreign relations, we +likewise perceive peace and progress. The Sixth International Conference of +American States was held at Habana last winter. It contributed to a better +understanding and cooperation among the nations'. Eleven important +conventions were signed and 71 resolutions passed. Pursuant to the plan +then adopted, this Government has invited the other 20 nations of this +hemisphere to it conference on conciliation and arbitration, which meets in +Washington on December 10. All the nations have accepted and the +expectation is justified that important progress will be made in methods +for resolving international differences by means of arbitration. + +During the year we have signed 11 new arbitration treaties, and 22 more are +tinder negotiation. + +NICARAGUA + +When a destructive and bloody revolution lately broke out in Nicaragua, at +the earnest and repeated entreaties of its Government I dispatched our +Marine forces there to protect the lives and interests of our citizens. To +compose the contending parties, I sent there Col. Henry L. Stimson, former +Secretary of War and now Governor General of the Philippine Islands, who +secured an agreement that warfare should cease, a national election should +be held and peace should be restored. Both parties conscientiously carried +out this agreement, with the exception of a few bandits who later mostly +surrendered or left the country. President Diaz appointed Brig. Gen. Frank +R. McCoy, United States Army, president of the election board, which +included also one member of each political party. + +A free and fair election has been held and has worked out so successfully +that both parties have joined in requesting like cooperation from this +country at the election four years hence, to which I have refrained from +making any commitments, although our country must be gratified at such an +exhibition of success and appreciation. + +Nicaragua is regaining its prosperity and has taken a long step in the +direction of peaceful self-government. + +TACNA-ARICA + +The long-standing differences between Chile and Peru have been sufficiently +composed so that diplomatic relations have been resumed by the exchange of +ambassadors. Negotiations are hopefully proceeding as this is written for +the final adjustment of the differences over their disputed territory. + +MEXICO + +Our relations with Mexico are on a more satisfactory basis than at any time +since their revolution. Many misunderstandings have been resolved and the +most frank and friendly negotiations promise a final adjustment of all +unsettled questions. It is exceedingly gratifying that Ambassador Morrow +has been able to bring our two neighboring countries, which have so many +interests in common, to a position of confidence in each other and of +respect for mutual sovereign rights. + +CHINA + +The situation in China which a few months ago was so threatening as to call +for the dispatch of a large additional force has, been much composed. The +Nationalist Government has established itself over the country and +promulgated a new organic law announcing a program intended to promote the +political and economic welfare of the people. We have recognized this +Government, encouraged its progress, and have negotiated a treaty +restoring to China complete tariff autonomy and guaranteeing our citizens +against discriminations. Our trade in that quarter is increasing and our +forces are being reduced. + +GREEK AND AUSTRIAN DEBTS + +Pending before the Congress is a recommendation for the settlement of the +Greek debt and the Austrian debt. Both of these are comparatively small and +our country can afford to be generous. The rehabilitation of these +countries awaits their settlement. There would also be advantages to our +trade. We could scarcely afford to be the only nation that refuses the +relief which Austria seeks. The Congress has already granted Austria a +long-time moratorium, which it is understood will be waived and immediate +payments begun on her debt on the same basis which we have extended to +other countries. + +PEACE TREATY + +One of the most important treaties ever laid before the Senate of the +United States will be that which the 15 nations recently signed at Paris, +and to which 44 other nations have declared their intention to adhere, +renouncing war as a national policy and agreeing to resort only to peaceful +means for the adjustment of international differences. It is the most +solemn declaration against war, the most positive adherence to peace, that +it is possible for sovereign nations to make. It does not supersede our +inalienable sovereign right and duty of national defense or undertake to +commit us before the event to any mode of action which the Congress might +decide to be wise if ever the treaty should be broken. But it is a new +standard in the world around which can rally the informed and enlightened +opinion of nations to prevent their governments from being forced into +hostile action by the temporary outbreak of international animosities. The +observance of this covenant, so simple and so straightforward, promises more +for the peace of the world than any other agreement ever negotiated among +the nations. + +NATIONAL DEFENSE + +The first duty of our Government to its own citizens and foreigners within +its borders is the preservation of order. Unless and until that duty is met +a government is not even eligible for recognition among the family of +nations. The advancement of world civilization likewise is dependent upon +that order among the people of different countries which we term peace. To +insure our citizens against the infringement of their legal rights at home +and abroad, to preserve order, liberty, and peace by making the law +supreme, we have an Army and a Navy. + +Both of these are organized for defensive purposes. Our Army could not be +much reduced, but does not need to be increased. Such new housing and +repairs as are necessary are tinder way and the 6-year program in aviation +is being put into effect in both branches of our service. + +Our Navy, according to generally accepted standards, is deficient in +cruisers. We have 10 comparatively new vessels, 22 that are old, and 8 to +be built. It is evident that renewals and replacements must be provided. +This matter was thoroughly canvassed at the last session of the Congress +and does not need restatement. The bill before the Senate with the +elimination of the time clause should be passed. We have no intention of +competing with any other country. This building program is for necessary +replacements and to meet our needs for defense. + +The cost of national defense is stupendous. It has increased $118,000,000 +in the past four years. The estimated expenditure for 1930 is $668,000,000. +While this is made up of many items it is, after all, mostly dependent upon +numbers. Our defensive needs do not can for any increase in the number of +men in the Army or the Navy. We have reached the limit of what we ought to +expend for that purpose. + +I wish to repeat again for the benefit of the timid and the suspicious that +this country is neither militaristic nor imperialistic. Many people at home +and abroad, who constantly make this charge, are the same ones who are even +more solicitous to have us extend assistance to foreign countries. When +such assistance is granted, the inevitable result is that we have foreign +interests. For us to refuse the customary support and protection of such +interests would be in derogation of the sovereignty of this Nation. Our +largest foreign interests are in the British Empire, France, and Italy. +Because we are constantly solicitous for those interests, I doubt if anyone +would suppose that those countries feel we harbor toward them any +militaristic or imperialistic design. As for smaller countries, we +certainly do not want any of them. We are more anxious than they are to have +their sovereignty respected. Our entire influence is in behalf of their +independence. Cuba stands as a witness to our adherence to this principle. + +The position of this Government relative to the limitation of armaments, +the results already secured, and the developments up to the present time +are so well known to the Congress that they do not require any restatement. + +VETERANS + +The magnitude of our present system of veterans' relief is without +precedent, and the results have been far-reaching. For years a service +pension has been granted to the Grand Army and lately to the survivors of +the Spanish-American War. At the time we entered the World War however, +Congress departed from the usual pension system followed by our +Government. Eleven years have elapsed since our laws were first enacted, +initiating a system of compensation, rehabilitation, hospitalization, and +insurance for the disabled of the World War and their dependents. The +administration of all the laws concerning relief has been a difficult +task, but it can safely be stated that these measures have omitted nothing +in their desire to deal generously and humanely. We should continue to +foster this system and provide all the facilities necessary for adequate +care. It is the conception of our Government that the pension roll is an +honor roll. It should include all those who are justly entitled to its +benefits, but exclude all others. + +Annual expenditures for all forms of veterans' relief now approximate +$765,000,000, and are increasing from year to year. It is doubtful if the +peak of expenditures will be reached even under present legislation for +sonic time yet to come. Further amendments to the existing law will be +suggested by the American Legion, the Veterans of Foreign Wars of the +United States, the Disabled American Veterans of the World War, and other +like organizations, and it may be necessary for administrative purposes, or +in order to remove some existing inequalities in the present law, to make +further changes. I am sure that such recommendations its may be submitted +to the Congress will receive your careful consideration. But because of the +vast expenditure now being made, each year, with every assurance that it +will increase, and because of the great liberality of the existing law, the +proposal of any additional legislation dealing with this subject should +receive most searching scrutiny from the Congress. + +You are familiar with the suggestion that the various public agencies now +dealing with matters of veterans' relief be consolidated in one Government +department. Some advantages to this plan seem apparent, especially in the +simplification of administration find in the opportunity of bringing about +a greater uniformity in the application of veterans' relief. I recommend +that a survey be made by the proper committees of Congress dealing with +this subject, in order to determine whether legislation to secure this +consolidation is desirable. + +AGRICULTURE + +The past year has been marked by notable though not uniform improvement in +agriculture. The general purchasing power of farm products and the volume +of production have advanced. This means not only further progress, in +overcoming the price disparity into which agriculture was plunged in +1920-21, but also increased efficiency on the part of farmers and a +well-grounded confidence in the future of agriculture. + +The livestock industry has attained the best balance for many years and is +prospering conspicuously. Dairymen, beef producers, and poultrymen are +receiving substantially larger returns than last year. Cotton, although +lower in price than at this time last year, was produced in greater volume +and the prospect for cotton incomes is favorable. But progress is never +uniform in a vast and highly diversified agriculture or industry. Cash +grains, hay, tobacco, and potatoes will bring somewhat smaller returns this +year than last. Present indications are, however, that the gross farm +income will be somewhat larger than in the crop year 1927-28, when the +total was $12,253,000,000. The corresponding figure for 1926-27 was +$12,127,000,000, and in 1925-26, $12,670,000,000. Still better results +would have been secured this year had there not been an undue increase in +the production of certain crops. This is particularly true of potatoes, +which have sold at an unremunerative price, or at a loss, as a direct +result of overexpansion of acreage. + +The present status of agriculture, although greatly improved over that of a +few years ago, bespeaks the need of further improvement which calls for +determined effort of farmers themselves, encouraged and assisted by wise +public policy. The Government has been, and must continue to be, alive to +the needs of agriculture. + +In the past eight years more constructive legislation of direct benefit to +agriculture has been adopted than during any other period. The Department +of Agriculture has been broadened and reorganized to insure greater +efficiency. The department is laying greater stress on the economic and +business phases of agriculture. It is lending every possible assistance to +cooperative marketing associations. Regulatory and research work have been +segregated in order that each field may be served more effectively. + +I can not too strongly commend, in the field of fact finding, the research +work of the Department of Agriculture and the State experiment stations. +The department now receives annually $4,000,000 more for research than in +1921. In addition, the funds paid to the States for experimentation +purposes under the Purnell Act constitute an annual increase in Federal +payments to State agricultural experiment stations of $2,400,000 over the +amount appropriated in 1921. The program of support for research may wisely +be continued and expanded. Since 1921 we have appropriated nearly an +additional $2,000,000 for extension work, and this sum is to be increased +next year under authorization by the Capper-Ketcham Act. + +THE SURPLUS PROBLEM + +While these developments in fundamental research, regulation, and +dissemination of agricultural information are of distinct help to +agriculture, additional effort is needed. The surplus problem demands +attention. As emphasized in my last message, the Government should assume +no responsibility in normal times for crop surplus clearly due to +overextended acreage. The Government should, however, provide reliable +information as a guide to private effort; and in this connection fundamental +research on prospective supply and demand, as a guide to production and +marketing, should be encouraged. Expenditure of public funds to bring in +more new land should have most searching scrutiny, so long as our farmers +face unsatisfactory prices for crops and livestock produced on land already +under cultivation. + +Every proper effort should be made to put land to uses for which it is +adapted. The reforestation of land best suited for timber production is +progressing and should be encouraged, and to this end the forest taxation +inquiry was instituted to afford a practical guide for public policy. +Improvement has been made in grazing regulation in the forest reserves, not +only to protect the ranges, but to preserve the soil from erosion. Similar +action is urgently needed to protect other public lands which are now +overgrazed and rapidly eroding. + +Temporary expedients, though sometimes capable of appeasing the demands of +the moment, can not permanently solve the surplus problem and might +seriously aggravate it. Hence putting the Government directly into +business, subsidies, and price fixing, and the alluring promises of +political action as a substitute for private initiative, should be +avoided. + +The Government should aid in promoting orderly marketing and in handling +surpluses clearly due to weather and seasonal conditions. As a beginning +there should be created a Federal farm board consisting of able and +experienced men empowered to advise producers' associations in establishing +central agencies or stabilization corporations to handle surpluses, to seek +wore economical means of merchandising, and to aid the producer in securing +returns according to the a14 of his product. A revolving loan fund should +be provided for the necessary financing until these agencies shall have +developed means of financing their operations through regularly constituted +credit institutions. Such a bill should carry authority for raising the +money, by loans or otherwise, necessary to meet the expense, as the +Treasury has no surplus. + +Agriculture has lagged behind industry in achieving that unity of effort +which modern economic life demands. The cooperative movement, which is +gradually building the needed organization, is in harmony with public +interest and therefore merits public encouragement. + +THE RESPONSIBILITY OF THE STATES + +Important phases of public policy related to agriculture lie within the +sphere of the States. While successive reductions in Federal taxes have +relieved most farmers of direct taxes to the National Government, State and +local levies have become a serious burden. This problem needs immediate and +thorough study with a view to correction at the earliest possible moment. +It will have to be made largely by the States themselves. + +COMMERCE + +It is desirable that the Government continue its helpful attitude toward +American business. The activities of the Department of Commerce have +contributed largely to the present satisfactory position +in our international trade, which has reached about $9,000,000,000 +annually. There should be no slackening of effort in that direction. It is +also important that the department's assistance to domestic commerce be +continued. There is probably no way in which the Government can aid sound +economic progress more effectively than by cooperation with our business +men to reduce wastes in distribution. + +COMMERCIAL AERONAUTICS + +Continued progress in civil aviation is most gratifying. Demands for +airplanes and motors have taxed both the industry and the licensing and +inspection service of the Department of Commerce to their capacity. While +the compulsory licensing provisions of the air commerce act apply only to +equipment and personnel engaged in interstate and foreign commerce, a +Federal license may be procured by anyone possessing the necessary +qualifications. State legislation, local airport regulations, and insurance +requirements make such a license practically indispensable. This results in +uniformity of regulation and increased safety in operation, which are +essential to aeronautical development. Over 17,000 young men and women have +now applied for Federal air pilot's licenses or permits. More than 80 per +cent of them applied during the past year. + +Our national airway system exceeds 14,000 miles in length and has 7,500 +miles lighted for night operations. Provision has been made for lighting +4,000 miles more during the current fiscal year and equipping an equal +mileage with radio facilities. Three-quarters of our people are now served +by these routes. With the rapid growth of air mail, express, and passenger +service, this new transportation medium is daily becoming a more important +factor in commerce. It is noteworthy that this development has taken place +without governmental subsidies. Commercial passenger flights operating on +schedule have reached 13,000 miles per day. + +During the next fortnight this Nation will entertain the nations of the +world in a celebration of the twenty-fifth anniversary of the first +successful airplane flight. The credit for this epoch-making achievement +belongs to a citizen of our own country, Orville Wright. + +CUBAN PARCEL POST + +I desire to repeat my recommendation of an earlier message, that Congress +enact the legislation necessary to make permanent the Parcel Post +Convention with Cuba, both as a facility to American commerce and as a +measure of equity to Cuba in the one class of goods which that country can +send here by parcel post without detriment to our own trade. + +"MAINE" BATTLESHIP MEMORIAL + +When I attended the Pan American Conference at Habana, the President of +Cuba showed me a marble statue made from the original memorial that was +overturned by a storm after it was erected on the Cuban shore to the memory +of the men who perished in the destruction of the battleship Maine. As a +testimony of friendship and appreciation of the Cuban Government and people +he most generously offered to present this to the United States, and I +assured him of my pleasure in accepting it. There is no location in the +White House for placing so large and heavy a structure, and I therefore +urge the Congress to provide by law for some locality where it can be +set up. + +RAILROADS + +In previous annual messages I have suggested the enactment of laws to +promote railroad consolidation with the view of increasing the efficiency +of transportation and lessening its cost to the public. While, +consolidations can and should be made under the present law until it is +changed, vet the provisions of the act of 1920 have not been found fully +adequate to meet the needs of other methods of consolidation. Amendments +designed to remedy these defects have been considered at length by the +respective committees of Congress and a bill was reported out late in the +last session which I understand has the approval in principle of the +Interstate Commerce Commission. It is to be hoped that this legislation may +be enacted at an early date. + +Experience has shown that the interstate commerce law requires definition +and clarification in several other respects, some of which have been +pointed out by the Interstate Commerce Commission in its annual reports to +the Congress. It will promote the public interest to have the Congress give +early consideration to the recommendations there made. + +MERCHANT MARINE + +The cost of maintaining the United States Government merchant fleet has +been steadily reduced. We have established American flag lines in foreign +trade where they had never before existed as a means of promoting commerce +and as a naval auxiliary. There have been sold to private American capital +for operation within the past few years 14 of these lines, which, under the +encouragement of the recent legislation passed by the Congress, give +promise of continued successful operation. Additional legislation from time +to time may be necessary to promote future advancement under private +control. + +Through the cooperation of the Post Office Department and the Shipping +Board long-term contracts are being made with American steamship lines for +carrying mail, which already promise the construction of 15 to 20 new +vessels and the gradual reestablishment of the American merchant marine as +a private enterprise. No action of the National Government has been so +beneficial to our shipping. The cost is being absorbed to a considerable +extent by the disposal of unprofitable lines operated by the Shipping +Board, for which the new law has made a market. Meanwhile it should be our +policy to maintain necessary strategic lines under the Government operation +until they can be transferred to private capital. + +INTER-AMERICAN HIGHWAY + +In my message last year I expressed the view that we should lend our +encouragement for more good roads to all the principal points on this +hemisphere South of the Rio Grande. My view has not changed. + +The Pan American Union has recently indorsed it. In some of the countries +to the south a great deal of progress is being made in road building. In, +Others engineering features are often exacting and financing difficult. As +those countries enter upon programs for road building we should be ready to +contribute from our abundant experience to make their task easier of +accomplishment. I prefer not to go into civil life to accomplish this end. +We already furnish military and naval advisors, and following this +precedent we could draw competent men from these same sources and from the +Department of Agriculture. + +We should provide our southern neighbors, if they request it, with such +engineer advisors for the construction of roads and bridges. Private +interests should look with favor upon all reasonable loans sought by +these countries to open main lines of travel. Such assistance should be +given especially to any project for a highway designed to connect all the +countries on this hemisphere and thus facilitate, intercourse and closer +relations among, them. + +AIR MAIL SERVICE + +The friendly relations and the extensive, commercial intercourse with the +Western Hemisphere to the south of us are being further cemented by the +establishment and extension of air-mail routes. We shall soon have one from +Key West, Fla., over Cuba, Haiti, and Santo Domingo to San Juan, P. R., +where it will connect with another route to Trinidad. There will be another +route from Key West to the Canal Zone, where connection will be made with a +route across the northern coast of South America to Paramaribo. This will +give us a circle around the Caribbean under our own control. Additional +connections will be made at Colon with a route running down the west coast +of South America as far as Conception, Chile, and with the French air mail +at Paramaribo running down the eastern coast of South America. The air +service already spans our continent, with laterals running to Mexico and +Canada, and covering a daily flight of over 28,000 miles, with an average +cargo of 15 000 pounds. + +WATERWAYS + +Our river and harbor improvements are proceeding with vigor. In the past +few years Ave have increased the appropriation for this regular work +$28,000,000, besides what is to be expended on flood control. The total +appropriation for this year was over $91,000,000. The Ohio River is almost +ready for opening; work on the Missouri and other rivers is under way. In +accordance with the Mississippi flood law Army engineers are making +investigations and surveys on other streams throughout the country with a +view to flood control, navigation, waterpower, and irrigation. Our barrier +lines are being operated under generous appropriations, and negotiations +are developing relative to the St. Lawrence waterway. To Secure the largest +benefits from all these waterways joint rates must be established with the +railroads, preferably by agreement, but otherwise as a result of +congressional action. + +We have recently passed several river and harbor bills. The work ordered by +the Congress not, yet completed, will cost about $243, + +000,000, besides the hundreds of millions to be spent on the Mississippi +flood way. Until we can see our way out of this expense no further river +and harbor legislation should be passed, as expenditures to put it into +effect would be four or five years away. + +IRRIGATION OF ARID LANDS + +For many years the Federal Government has been committed to the wise policy +of reclamation and irrigation. While it has met with some failures due to +unwise selection of projects and lack of thorough soil surveys, so that +they could not be placed on a sound business basis, on the whole the +service has been of such incalculable benefit in so many States that no one +would advocate its abandonment. The program to which we are already +committed, providing for the construction of new projects authorized by +Congress and the completion of old projects, will tax the resources of the +reclamation fund over a period of years. The high cost of improving and +equipping farms adds to the difficulty of securing settlers for vacant +farms on federal projects. + +Readjustments authorized by the reclamation relief act of May 25, 1926, +have given more favorable terms of repayment to settlers. These new +financial arrangements and the general prosperity on irrigation projects +have resulted in increased collections by the Department of the Interior of +charges due the reclamation fund. Nevertheless, the demand for still +smaller yearly payments on some projects continues. These conditions should +have consideration in connection with any proposed new projects. + +COLORADO RIVER + +For several years the Congress has considered the erection of a dam on the +Colorado River for flood-control, irrigation, and domestic water purposes, +all of which ma properly be considered as Government functions. There would +be an incidental creation of water power which could be used for generating +electricity. As private enterprise can very well fill this field, there is +no need for the Government to go into it. It is unfortunate that the States +interested in this water have been unable to agree among themselves. +Nevertheless, any legislation should give every possible safeguard to the +present and prospective rights of each of them. + +The Congress will have before it, the detailed report of a special board +appointed to consider the engineering and economic feasibility of this +project. From the short summary which I have seen of it, 11 judge they +consider the engineering problems can be met at somewhat increased cost +over previous estimates. They prefer the Black Canyon site. On the economic +features they are not so clear and appear to base their conclusions on many +conditions which can not be established with certainty. So far as I can +judge, however, from the summary, their conclusions appear sufficiently +favorable, so that I feel warranted in recommending a measure which will +protect the rights of the States, discharge the necessary Government +functions, and leave the electrical field to private enterprise. + +MUSCLE SHOALS + +The development of other methods of producing nitrates will probably render +this plant less important for that purpose than formerly. But we have it, +and I am told it still provides a practical method of making nitrates for +national defense and farm fertilizers. By dividing the property into its +two component parts of power and nitrate plants it would be possible to +dispose of the power, reserving the right to any concern that wished to +make nitrates to use any power that might be needed for that purpose. Such +a disposition of the power plant can be made that will return in rental +about $2,000,000 per year. If the Congress would giant the Secretary of War +authority to lease the nitrate plant on such terms as would insure the +largest production of nitrates, the entire property could begin to +function. Such a division, I am aware, has never seemed to appeal to the +Congress. I should also gladly approve a bill granting authority to lease +the entire property for the production of nitrates. + +I wish to avoid building another dam at public expense. Future operators +should provide for that themselves. But if they were to be required to +repay the cost of such dam with the prevailing commercial rates for +interest, this difficulty will be considerably lessened. Nor do I think +this property should be made a vehicle for putting the United States +Government indiscriminately into the private and retail field of power +distribution and nitrate sales. + +CONSERVATION + +The practical application of economy to the resources of the country calls +for conservation. This does not mean that every resource should not be +developed to its full degree, but it means that none of them should be +wasted. We have a conservation board working on our oil problem. This is of +the utmost importance to the future well-being of our people in this age of +oil-burning engines and the general application of gasoline to +transportation. The Secretary of the Interior should not be compelled to +lease oil lands of the Osage Indians when the market is depressed and the +future supply is in jeopardy. + +While the area of lands remaining in public ownership is small, compared +with the vast area in private ownership, the natural resources of those in +public ownership are of immense present and future value. This is +particularly trite as to minerals and water power. The proper bureaus have +been classifying these resources to the end that they may be conserved. +Appropriate estimates are being submitted, in the Budget, for the further +prosecution of this important work. + +IMMIGRATION + +The policy of restrictive immigration should be maintained. Authority +should be granted the Secretary of Labor to give immediate preference to +learned professions and experts essential to new industries. The reuniting +of families should be expedited. Our immigration and naturalization laws +might well be codified. + +WAGE EARNER + +In its economic life our country has rejected the long accepted law of a +limitation of the wage fund, which led to pessimism and despair because it +was the doctrine of perpetual poverty, and has substituted for it the +American conception that the only limit to profits and wages is production, +which is the doctrine of optimism and hope because it leads to prosperity. +Here and there the councils of labor are still darkened by the theory that +only by limiting individual production can there be any assurance of +permanent employment for increasing numbers, but in general, management and +wage earner alike have become emancipated from this doom and have entered a +new era in industrial thought which has unleashed the productive capacity +of the individual worker with an increasing scale of wages and profits, the +end of which is not yet. The application of this theory accounts for our +widening distribution of wealth. No discovery ever did more to increase the +happiness and prosperity of the people. + +Since 1922 increasing production has increased wages in general 12.9 per +cent, while in certain selected trades they have run as high as 34.9 per +cent and 38 per cent. Even in the boot and shoe shops the increase is over +5 per cent and in woolen mills 8.4 per cent, although these industries have +not prospered like others. As the rise in living costs in this period is +negligible, these figures represent real wage increases. + +The cause of constructive economy requires that the Government should +cooperate with private interests to eliminate the waste arising from +industrial accidents. This item, with all that has been done to reduce it, +still reaches enormous proportions with great suffering to the workman and +great loss to the country. + +WOMEN AND CHILDREN + +The Federal Government should continue its solicitous care for the +8,500,000 women wage earners and its efforts in behalf of public health, +which is reducing infant mortality and improving the bodily and mental +condition of our citizens. + +CIVIL SERVICE + +The most marked change made in the civil service of the Government in the +past eight years relates to the increase in salaries. The Board of +Actuaries on the retirement act shows by its report, that July 1, 1921 the +average salary of the 330,047 employees subject to the act was $1,307, +while on June 30, 1927, the average salary of the corresponding 405,263 +was $1,969. This was an increase in six years of nearly 53 per cent. On top +of this was the generous increase made at the last session of the Congress +generally applicable to Federal employees and another bill increasing the +pay in certain branches of the Postal Service beyond the large increase +which was made three years ago. This raised the average level from $1,969 +to $2,092, making an increase in seven years of over 63 per cent. While it +is well known that in the upper brackets the pay in the Federal +service is much smaller than in private employment, in the lower brackets, +ranging well up over $3,000, it is much higher. It is higher not only in +actual money paid, but in privileges granted, a vacation of 30 actual +working days, or 5 weeks each year, with additional time running in some +departments as high as 30 days for sick leave and the generous provisions +of the retirement act. No other body of public servants ever occupied such +a fortunate position. + +EDUCATION + +Through the Bureau of Education of the Department of the Interior the +Federal Government, acting in an informative and advisory capacity, has +rendered valuable service. While this province belongs peculiarly to the +States, yet the promotion of education and efficiency in educational +methods is a general responsibility of the Federal Government. A survey of +negro colleges and universities in the United States has just been +completed by the Bureau of Education through funds provided by the +institutions themselves and through private sources. The present status of +negro higher education was determined and recommendations were made for its +advancement. This was one of the numerous cooperative undertakings of the +bureau. Following the invitation of the Association of Land Grant Colleges +and Universities, he Bureau of Education now has under way the survey of +agricultural colleges, authorized by Congress. The purpose of the survey is +to ascertain the accomplishments, the status, and the future objectives of +this type of educational training. It is now proposed to undertake a survey +of secondary schools, which educators insist is timely and essential. + +PUBLIC BUILDINGS + +We, have laid out a public building program for the District of Columbia +and the country at large running into hundreds of millions of dollars. +Three important structures and one annex are already, under way and one +addition has been completed in the City of Washington. in the country sites +have been acquired, many buildings are in course of construction, and some +are already completed. Plans for all this work are being prepared in order +that it may be carried forward as rapidly as possible. This is the greatest +building program ever assumed by this Nation. It contemplates structures of +utility and of beauty. When it reaches completion the people will be well +served and the Federal city will be supplied with the most beautiful and +stately public buildings which adorn any capital in the world. + +THE AMERICAN INDIAN + +The administration of Indian affairs has been receiving intensive study for +several years. The Department of the Interior has been able to provide +better supervision of health, education, and industrial advancement of this +native race through additional funds provided by the Congress. The present +cooperative arrangement existing between the Bureau of Indian Affairs and +the Public Health Service should be extended. The Government's +responsibility to the American Indian has been acknowledged by annual +increases in appropriations to fulfill its obligations to them and to +hasten the time when Federal supervision of their affairs may be properly +and safely terminated. The movement in Congress and in some of the State +legislatures for extending responsibility in Indian affairs to States +should be encouraged. A complete participation by the Indian in our +economic life is the end to be desired. + +THE NEGRO + +For 65 years now our negro Population has been under the peculiar care and +solicitude of the National Government. The progress which they have made in +education and the professions, in wealth and in the arts of civilization, +affords one of the most remarkable incidents in this period of world +history. They have demonstrated their ability to partake of the advantages +of our institutions and to benefit by a free and more and more independent +existence. Whatever doubt there may have been of their capacity to assume, +the status granted to them by the Constitution of this Union is being +rapidly dissipated. Their cooperation in the life of the Nation is +constantly enlarging. + +Exploiting the Negro problem for political ends is being abandoned and +their protection is being increased by those States in which their +percentage of population is largest. Every encouragement should be extended +for t le development of the race. The colored people have been the victims +of the crime of lynching, which has in late years somewhat decreased. Some +parts of the South already have wholesome laws for its restraint and +punishment. Their example might well be followed by other States, and by +such immediate remedial legislation as the Federal Government can extend +under the Constitution. + +PHILIPPINE ISLANDS + +Under the guidance of Governor General Stimson the economic and political +conditions of the Philippine Islands have been raised to a standard never +before surpassed. The cooperation between his administration and the people +of the islands is complete and harmonious. It would be an advantage if +relief from double taxation could be granted by the Congress to our +citizens doing business in the islands. + +PORTO RICO + +Due to the terrific storm that swept Porto Rico last September, the people +of that island suffered large losses. The Red Cross and the War Department +went to their rescue. The property loss is being, retrieved. Sugar, +tobacco, citrus fruit, and coffee, all suffered damage. The first three can +largely look after themselves. The coffee growers will need some +assistance, which should be extended strictly on a business basis, and +only after most careful investigation. The people of Porto Rico are not +asking for charity. + +DEPARTMENT OF JUSTICE + +It is desirable that all the legal activities of the Government be +consolidated under the supervision of the Attorney General. In +1870 it was felt necessary to create the Department of Justice for this +purpose. During the intervening period, either through legislation creating +law officers or departmental action, additional legal positions not under +the supervision of the Attorney General have been provided until there are +now over 900. Such a condition is as harmful to the interest of the +Government now as it was in 1870, and should be corrected by appropriate +legislation. + +SPECIAL GOVERNMENT COUNSEL + +In order to prosecute the oil cases, I suggested and the Congress enacted a +law providing for the appointment of two special counsel. They have pursued +their work with signal ability, recovering all the leased lands besides +nearly $30,000,000 in money, and nearly $17,000,000 in other property. They +find themselves hampered by a statute, which the Attorney General construes +as applying to them, prohibiting their appearing for private clients before +any department. For this reason, one has been compelled to resign. No good +result is secured by the application of this rule to these counsel, and as +Mr. Roberts has consented to take reappointment if the rule is abrogated I +recommend the passage of an amendment to the law creating their office +exempting them from the general rule against taking other cases involving +the Government. + +PROHIBITION + +The country has duly adopted the eighteenth amendment. Those who object to +it have the right to advocate its modification or repeal. Meantime, it is +binding upon the National and State Governments and all our inhabitants. +The Federal enforcement bureau is making every effort to prevent +violations, especially through smuggling, manufacture, and transportation, +and to prosecute generally all violations for which it can secure evidence. +It is bound to continue this policy. Under the terms of the Constitution, +however, the obligation is equally on the States to exercise the power +which they have through the executive, legislative, judicial, and police +branches of their governments in behalf of enforcement. The Federal +Government is doing and will continue to do all it can in this direction +and is entitled to the active cooperation of the States. + +CONCLUSION + +The country is in the midst of an era of prosperity more extensive and of +peace more permanent than it has ever before experienced. But, having +reached this position, we should not fail to comprehend that it can easily +be lost. It needs more effort for its support than the less exalted places +of the world. We shall not be permitted to take our case, but shall +continue to be required to spend our days in unremitting toil. The actions +of the Government must command the confidence of the country. Without this, +our prosperity would be lost. We must extend to other countries the largest +measure of generosity, moderation, and patience. In addition to dealing +justly, we can well afford to walk humbly. + +The end of government is to keep open the opportunity for a more +abundant life. Peace and prosperity are not finalities; they are only +methods. It is too easy under their influence for a nation to become +selfish and degenerate. This test has come to the United States. Our +country has been provided with the resources with which it can enlarge its +intellectual, moral, and spiritual life. The issue is in the hands of the +people. Our faith in man and God is the justification for the belief in our +continuing success. + + + + + + + + + + +End of the Project Gutenberg EBook of State of the Union Addresses of Calvin +Coolidge, by Calvin Coolidge + +*** END OF THIS PROJECT GUTENBERG EBOOK STATE OF THE UNION ADDRESSES *** + +***** This file should be named 5036.txt or 5036.zip ***** +This and all associated files of various formats will be found in: + http://www.gutenberg.org/5/0/3/5036/ + +Produced by James Linden. HTML version by Al Haines. +Updated editions will replace the previous one--the old editions will +be renamed. + +Creating the works from print editions not protected by U.S. copyright +law means that no one owns a United States copyright in these works, +so the Foundation (and you!) can copy and distribute it in the United +States without permission and without paying copyright +royalties. 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Do not change or edit the +header without written permission. + +Please read the "legal small print," and other information about the +eBook and Project Gutenberg at the bottom of this file. Included is +important information about your specific rights and restrictions in +how the file may be used. You can also find out about how to make a +donation to Project Gutenberg, and how to get involved. + + +**Welcome To The World of Free Plain Vanilla Electronic Texts** + +**eBooks Readable By Both Humans and By Computers, Since 1971** + +*****These eBooks Were Prepared By Thousands of Volunteers!***** + + +Title: State of the Union Addresses of Calvin Coolidge + +Author: Calvin Coolidge + +Release Date: February, 2004 [EBook #5036] +[Yes, we are more than one year ahead of schedule] +[This file was first posted on April 11, 2002] + +Edition: 10 + +Language: English + +Character set encoding: ASCII + +*** START OF THE PROJECT GUTENBERG EBOOK OF ADDRESSES BY CALVIN COOLIDGE *** + + + + +This eBook was produced by James Linden. + +The addresses are separated by three asterisks: *** + +Dates of addresses by Calvin Coolidge in this eBook: + December 6, 1923 + December 3, 1924 + December 8, 1925 + December 7, 1926 + December 6, 1927 + December 4, 1928 + + + +*** + +State of the Union Address +Calvin Coolidge +December 6, 1923 + +Since the close of the last Congress the Nation has lost President Harding +. The world knew his kindness and his humanity, his greatness and his +character. He has left his mark upon history. He has made justice more +certain and peace more secure. The surpassing tribute paid to his memory as +he was borne across the continent to rest at last at home revealed the +place lie held in the hearts of the American people. But this is not the +occasion for extended reference to the man or his work. In this presence, +among these who knew and loved him, that is unnecessary. But we who were +associated with him could not resume together the functions of our office +without pausing for a moment, and in his memory reconsecrating ourselves to +the service of our country. He is gone. We remain. It is our duty, under +the inspiration of his example, to take up the burdens which he was +permitted to lay down, and to develop and support the wise principles of +government which he represented. + +FOREIGN AFFAIRS + +For us peace reigns everywhere. We desire to perpetuate it always by +granting full justice to others and requiring of others full justice to +ourselves. + +Our country has one cardinal principle to maintain in its foreign policy. +It is an American principle. It must be an American policy. We attend to +our own affairs, conserve our own strength, and protect the interests of +our own citizens; but we recognize thoroughly our obligation to help +others, reserving to the decision of our own Judgment the time, the place, +and the method. We realize the common bond of humanity. We know the +inescapable law of service. + +Our country has definitely refused to adopt and ratify the covenant of the +League of Nations. We have not felt warranted in assuming the +responsibilities which its members have assumed. I am not proposing any +change in this policy; neither is the Senate. The incident, so far as we +are concerned, is closed. The League exists as a foreign agency. We hope it +will be helpful. But the United States sees no reason to limit its own +freedom and independence of action by joining it. We shall do well to +recognize this basic fact in all national affairs and govern ourselves +accordingly. + +WORLD COURT + +Our foreign policy has always been guided by two principles. The one is the +avoidance of permanent political alliances which would sacrifice our proper +independence. The other is the peaceful settlement of controversies between +nations. By example and by treaty we have advocated arbitration. For nearly +25 years we have been a member of The Hague Tribunal, and have long sought +the creation of a permanent World Court of Justice. I am in full accord +with both of these policies. I favor the establishment of such a court +intended to include the whole world. That is, and has long been, an +American policy. + +Pending before the Senate is a proposal that this Government give its +support to the Permanent Court of International Justice, which is a new and +somewhat different plan. This is not a partisan question. It should not +assume an artificial importance. The court is merely a convenient +instrument of adjustment to ?which we could go, but to which we could not +be brought. It should be discussed with entire candor, not by a political +but by a judicial method, without pressure and without prejudice. +Partisanship has no place in our foreign relations. As I wish to see a +court established, and as the proposal presents the only practical plan on +which many nations have ever agreed, though it may not meet every desire, I +therefore commend it to the favorable consideration of the Senate, with the +proposed reservations clearly indicating our refusal to adhere to the +League of Nations. RUSSIA + +Our diplomatic relations, lately so largely interrupted, are now being +resumed, but Russia presents notable difficulties. We have every desire to +see that great people, who are our traditional friends, restored to their +position among the nations of the earth. We have relieved their pitiable +destitution with an. enormous charity. Our Government offers no objection +to the carrying on of commerce by our citizens with the people of Russia. +Our Government does not propose, however, to enter into relations with +another regime which refuses to recognize the sanctity of international +obligations. I do not propose to barter away for the privilege of trade any +of the cherished rights of humanity. I do not propose to make merchandise +of any American principles. These rights and principles must go wherever +the sanctions of our Government go. + +But while the favor of America is not for sale, I am willing to make very +large concessions for the purpose of rescuing the people of Russia. Already +encouraging evidences of returning to the ancient ways of society can be +detected. But more are needed. Whenever there appears any disposition to +compensate our citizens who were despoiled, and to recognize that debt +contracted with our Government, not by the Czar, but by the newly formed +Republic of Russia; whenever the active spirit of enmity to our +institutions is abated; whenever there appear works mete for repentance; +our country ought to be the first to go to the economic and moral rescue of +Russia. We have every desire to help and no desire to injure. We hope the +time is near at hand when we can act. DEBTS + +The current debt and interest due from foreign Governments, exclusive of +the British debt of $4,600,000,000, is about $7,200,000,000. 1 do not favor +the cancellation of this debt, but I see no objection to adjusting it in +accordance with the principle adopted for the British debt. Our country +would not wish to assume the role of an oppressive creditor, but would +maintain the principle that financial obligations between nations are +likewise moral obligations which international faith and honor require +should be discharged. + +Our Government has a liquidated claim against Germany for the expense of +the army of occupation of over $255,000,000. Besides this, the Mixed Claims +Commission have before them about 12,500 claims of American citizens, +aggregating about $1,225,000,000. These claims have already been reduced by +a recent decision, but there are valid claims reaching well toward +$500,000,000. Our thousands of citizens with credits due them of hundreds +of millions of dollars have no redress save in the action of our +Government. These are very substantial interests, which it is the duty of +our Government to protect as best it can. That course I propose to pursue. + +It is for these reasons that we have a direct interest in the economic +recovery of Europe. They are enlarged by our desire for the stability of +civilization and the welfare of humanity. That we are making sacrifices to +that end none can deny. Our deferred interest alone amounts to a million +dollars every day. But recently we offered to aid with our advice and +counsel. We have reiterated our desire to see France paid and Germany +revived. We have proposed disarmament. We have earnestly sought to compose +differences and restore peace. We shall persevere in well-doing, not by +force, but by reason. + +FOREIGN PAPERS + +Under the law the papers pertaining to foreign relations to be printed are +transmitted as a part of this message. Other volumes of these papers will +follow. + +FOREIGN SERVICE + +The foreign service of our Government needs to be reorganized and +improved. + +FISCAL CONDITION + +Our main problems are domestic problems. Financial stability is the first +requisite of sound government. We can not escape the effect of world +conditions. We can not avoid the inevitable results of the economic +disorders which have reached all nations. But we shall diminish their harm +to us in proportion as we continue to restore our Government finances to a +secure and endurable position. This we can and must do. Upon that firm +foundation rests the only hope of progress and prosperity. From that source +must come relief for the people. + +This is being, accomplished by a drastic but orderly retrenchment, which is +bringing our expenses within our means. The origin of this has been the +determination of the American people, the main support has been the courage +of those in authority, and the effective method has been the Budget System. +The result has involved real sacrifice by department heads, but it has been +made without flinching. This system is a law of the Congress. It represents +your will. It must be maintained, and ought to be strengthened by the +example of your observance. Without a Budget System there can be no fixed +responsibility and no constructive scientific economy. + +This great concentration of effort by the administration and Congress has +brought the expenditures, exclusive of the self-supporting Post. Office +Department, down to three billion dollars. It is possible, in consequence, +to make a large reduction in the taxes of the people, which is the sole +object of all curtailment. This is treated at greater length in the Budget +message, and a proposed plan has been presented in detail in a statement by +the Secretary of the Treasury which has my unqualified approval. I +especially commend a decrease on earned incomes, and further abolition of +admission, message, and nuisance taxes. Tile amusement and educational +value of moving pictures ought not to be taxed. Diminishing charges against +moderate incomes from investment will afford immense relief, while a +revision of the surtaxes will not only provide additional money for capital +investment, thus stimulating industry and employing more but will not +greatly reduce the revenue from that source, and may in the future actually +increase it. + +Being opposed to war taxes in time of peace, I am not in favor of +excess-profits taxes. A very great service could be rendered through +immediate enactment of legislation relieving the people of some of the +burden of taxation. To' reduce war taxes is to give every home a better +chance. + +For seven years the people have borne with uncomplaining courage the +tremendous burden of national and local taxation. These must both be +reduced. The taxes of the Nation must be reduced now as much as prudence +will permit, and expenditures must be reduced accordingly. High taxes reach +everywhere and burden everybody. They gear most heavily upon the poor. They +diminish industry and commerce. They make agriculture unprofitable. They +increase the rates on transportation. They are a charge on every necessary +of life. Of all services which the Congress can render to the country, I +have no hesitation in declaring t neglect it, to postpone it, to obstruct +it by unsound proposals, is to become unworthy of public confidence and +untrue to public trust. The country wants this measure to have the right of +way over an others. + +Another reform which is urgent in our fiscal system is the abolition of the +right to issue tax-exempt securities. The existing system not only permits +a large amount of the wealth of the Notion to escape its just burden but +acts as a continual stimulant to municipal extravagance. This should be +prohibited by constitutional amendment. All the wealth of the Nation ought +to contribute its fair share to the expenses of the Nation. + +TARIFF TAW + +The present tariff law has accomplished its two main objects. It has +secured an abundant revenue and been productive of an abounding prosperity. +Under it the country has had a very large export and import trade. A +constant revision of the tariff by the Congress is disturbing and harmful. +The present law contains an elastic provision authorizing the President to +increase or decrease present schedules not in excess of 50 per centum to +meet the difference in cost of production at home and abroad. This does +not, to my mind, warrant a rewriting g of the whole law, but does mean, and +will be so administered, that whenever the required investigation shows +that inequalities of sufficient importance exist in any schedule, the power +to change them should and will be applied. SHIPPING + +The entire well being of our country is dependent upon transportation by +sea and land. Our Government during the war acquired a large merchant fleet +which should be transferred, as soon as possible, to private ownership and +operation under conditions which would secure two results: First, and of +?prime importance, adequate means for national defense; second, adequate +service to American commerce. Until shipping conditions are such that our +fleet can be disposed of advantageously under these conditions, it will be +operated as economically as possible under such plans as may be devised +from time to time by the Shipping Board. We must have a merchant marine +which meets these requirements, and we shall have to pay the cost of its +service. + +PUBLIC IMPROVEMENTS + +The time has come to. resume in a moderate way the opening of our +intracoastal waterways; the control of flood waters of the Mississippi and +of the Colorado Rivers; the improvement of the waterways from the Great +Lakes toward the Gulf of Mexico; and the development of the great power and +navigation project of the St. Lawrence River, for which efforts are now +being made to secure the necessary treaty with Canada. These projects can +not all be undertaken at once, but all should have the immediate +consideration of the Congress and be adopted as fast as plans can be +matured and the necessary funds become available. This is not incompatible +with economy, for their nature does not require so much a public +expenditure as a capital investment which will be reproductive, as +evidenced by the marked increase in revenue from the Panama Canal. Upon +these projects depend much future industrial and agricultural progress. +They represent the protection of large areas from flood and the addition of +a great amount of cheap power and cheap freight by use of navigation, chief +of which is the bringing of ocean-going ships to the Great Lakes. + +Another problem of allied character is the superpower development of the +Northeastern States, consideration of which is growing under the direction +of the Department of Commerce by joint conference with the local +authorities. RAILROADS + +Criticism of the railroad law has been directed, first, to the section +laying down the rule by which rates are fixed, and providing for payment to +the Government and use of excess earnings; second, to the method for the +adjustment of wage scales; and third, to the authority permitting +consolidations. + +It has been erroneously assumed that the act undertakes to guarantee +railroad earnings. The law requires that rates should be just and +reasonable. That has always been the rule under which rates have been +fixed. To make a rate that does not yield a fair return results in +confiscation, and confiscatory rates are of course unconstitutional. Unless +the Government adheres to the rule of making a rate that will yield a fair +return, it must abandon rate making altogether. The new and important +feature of that part of the law is the recapture and redistribution of +excess rates. The constitutionality of this method is now before the +Supreme Court for adjudication. Their decision should be awaited before +attempting further legislation on this subject. Furthermore, the importance +of this feature will not be great if consolidation goes into effect. + +The settlement of railroad labor disputes is a matter of grave public +concern. The Labor Board was established to protect the public in the +enjoyment of continuous service by attempting to insure justice between the +companies and their employees. It has been a great help, but is not +altogether satisfactory to the public, the employees, or the companies. If +a substantial agreement can be reached among the groups interested, there +should be no hesitation in enacting such agreement into law. If it is not +reached, the Labor Board may very well be left for the present to protect +the public welfare. + +The law for consolidations is not sufficiently effective to be expeditious. +Additional legislation is needed giving authority for voluntary +consolidations, both regional and route, and providing Government machinery +to aid and stimulate such action, always "subject to the approval of the +Interstate Commerce Commission. This should authorize the commission to +appoint committees for each proposed group, representing the public and the +component roads, with power to negotiate with individual security holders +for an exchange of their securities for those of the, consolidation on such +terms and conditions as the commission may prescribe for avoiding any +confiscation and preserving fair values. Should this permissive +consolidation prove ineffective after a limited period, the authority of +the Government will have to be directly invoked. + +Consolidation appears to be the only feasible method for the maintenance of +an adequate system of transportation with an opportunity so to adjust +freight rates as to meet such temporary conditions as now prevail in some +agricultural sections. Competent authorities agree that an entire +reorganization of the rate structure for freight is necessary. This should +be ordered at once by the Congress. + +DEPARTMENT OF JUSTICE + +As no revision of the laws of the United States has been made since 1878, a +commission or committee should be created to undertake this work. The +Judicial Council reports that two more district judges are needed in the +southern district of New York, one in the northern district of Georgia, and +two more circuit judges in the Circuit Court of Appeals of the Eighth +Circuit. Legislation should be considered for this purpose. + +. It is desirable to expedite the hearing and disposal of cases. A +commission of Federal judges and lawyers should be created to recommend +legislation by which the procedure in the Federal trial courts may be +simplified and regulated by rules of court, rather than by statute; such +rules to be submitted to the Congress and to be in force until annulled or +modified by the Congress. The Supreme Court needs legislation revising and +simplifying the laws governing review by that court, and enlarging the +classes of cases of too little public importance to be subject to review. +Such reforms would expedite the transaction of the business of the courts. +The administration of justice is likely to fail if it be long delayed. + +The National Government has never given adequate attention to its prison +problems. It ought to provide employment in such forms of production as can +be used by the Government, though not sold to the public in competition +with private business, for all prisoners who can be placed at work, and for +which they should receive a reasonable compensation, available for their +dependents. + +Two independent reformatories are needed; one for the segregation of women, +and another for the segregation of young men serving their first sentence. + +The administration of justice would be facilitated greatly by including in +the Bureau of Investigation of the Department of Justice a Division of +Criminal Identification, where there would be collected this information +which is now indispensable in the suppression of crime. PROHIBITION + +The prohibition amendment to the Constitution requires the Congress. and +the President to provide adequate laws to prevent its violation. It is my +duty to enforce such laws. For that purpose a treaty is being negotiated +with Great Britain with respect to the ri lit of search of hovering +vessels. To prevent smuggling, the Coast Card should be greatly +strengthened, and a supply of swift power boats should be provided. The +major sources of production should be rigidly regulated, and every effort +should be made to suppress interstate traffic. With this action on the part +of the National Government, and the cooperation which is usually rendered +by municipal and State authorities, prohibition should be made effective. +Free government has no greater menace than disrespect for authority and +continual violation of law. It is the duty of a citizen not only to observe +the law but to let it be known that he is opposed to its violation. + +THE NEGRO + +Numbered among our population are some 12,000,000 colored people. Under our +Constitution their rights are just as sacred as those of any other citizen. +It is both a public and a private duty to protect those rights. The +Congress ought to exercise all its powers of prevention and punishment +against the hideous crime of lynching, of which the negroes are by no means +the sole sufferers, but for which they furnish a majority of the victims. + +Already a considerable sum is appropriated to give the negroes vocational +training in agriculture. About half a million dollars is recommended for +medical courses at Howard University to help contribute to the education of +500 colored doctors needed each year. On account of the integration of +large numbers into industrial centers, it has been proposed that a +commission be created, composed of members from both races, to formulate a +better policy for mutual understanding and confidence. Such an effort is to +be commended. Everyone would rejoice in the accomplishment of the results +which it seeks. But it is well to recognize that these difficulties are to +a large extent local problems which must be worked out by the mutual +forbearance and human kindness of each community. Such a method gives much +more promise of a real remedy than outside interference. + +CIVIL SERVICE + +The maintenance and extension of the classified civil service is +exceedingly important. There are nearly 550,000 persons in the executive +civil service drawing about $700,000,000 of yearly compensation. +Four-fifths of these are in the classified service. This method of +selection of the employees of the United States is especially desirable for +the Post Office Department. The Civil Service Commission has recommended +that postmasters at first, second, and third class offices be classified. +Such action, accompanied by a repeal of the four-year term of office, would +undoubtedly be an improvement. I also recommend that the field force for +prohibition enforcement be brought within the classified civil service +without covering in the present membership. The best method for selecting +public servants is the merit system. + +PUBLIC BUILDINGS + +Many of the departments in Washington need better housing facilities. Some +are so crowded that their work is impeded, others are so scattered that +they lose their identity. While I do not favor at this time a general +public building law, I believe it is now necessary, in accordance with +plans already sanctioned for a unified and orderly system for the +development of this city, to begin the carrying out of those plans by +authorizing the erection of three or four buildings most urgently needed by +an annual appropriation of $5,000,000. + +REGULATORY LEGISLATION + +Cooperation with other maritime powers is necessary for complete protection +of our coast waters from. pollution. Plans for this are under way, but +await certain experiments for refuse disposal. Meantime laws prohibiting +spreading oil and oil refuse from vessels in our own territorial waters +would be most helpful against this menace and should be speedily enacted. + +Laws should be passed regulating aviation. + +Revision is needed of the laws regulating radio interference. + +Legislation and regulations establishing load liner, to provide safe +loading of vessels leaving our ports are necessary and recodification of +our navigation laws is vital. + +Revision of procedure of the Federal Trade Commission will give more +constructive purpose to this department. + +If our Alaskan fisheries are to be saved from destruction, there must be +further legislation declaring a general policy and delegating the authority +to make rules and regulations to an administrative body. + +ARMY AND NAVY + +For several years we have been decreasing the personnel of the Army and +Navy, and reducing their power to the danger point. Further reductions +should not be made. The Army is a guarantee of the security of our citizens +at home; the Navy is a guarantee of the security of our citizens abroad. +Both of these services should be strengthened rather than weakened. +Additional planes are needed for the Army, and additional submarines for +the Navy. The defenses of Panama must be perfected. We want no more +competitive armaments. We want no more war. But we want no weakness that +invites imposition. A people who neglect their national defense are putting +in jeopardy their national honor. + +INSULAR POSSESSIONS + +Conditions in the insular possessions on the whole have been good. Their +business has been reviving. They are being administered according to law. +That effort has the full support of the administration. Such +recommendations as may conic from their people or their governments should +have the most considerate attention. + +EDUCATION AND WELFARE + +Our National Government is not doing as much as it legitimately can do to +promote the welfare of the people. Our enormous material wealth, our +institutions, our whole form of society, can not be considered fully +successful until their benefits reach the merit of every individual. This +is not a suggestion that the Government should, or could, assume for the +people the inevitable burdens of existence. There is no method by which we +can either be relieved of the results of our own folly or be guaranteed a +successful life. There is an inescapable personal responsibility for the +development of character, of industry, of thrift, and of self-control. +These do not come from the Government, but from the people themselves. But +the Government can and should always be expressive of steadfast +determination, always vigilant, to maintain conditions under which these +virtues are most likely to develop and secure recognition and reward. This +is the American policy. + +It is in accordance with this principle that we have enacted laws for the +protection of the public health and have adopted prohibition in narcotic +drugs and intoxicating liquors. For purposes of national uniformity we +ought to provide, by constitutional amendment and appropriate legislation, +for a limitation of child labor, and in all cases under the exclusive +jurisdiction of the Federal Government a minimum wage law for women, which +would undoubtedly find sufficient power of enforcement in the influence of +public opinion. + +Having in mind that education is peculiarly a local problem, and that it +should always be pursued with the largest freedom of choice by students and +parents, nevertheless, the Federal Government might well give the benefit +of its counsel and encouragement more freely in this direction. If anyone +doubts the need of concerted action by the States of the Nation for this +purpose, it is only necessary to consider the appalling figures of +illiteracy representing a condition which does not vary much in all parts +of the Union. I do not favor the making of appropriations from the National +Treasury to be expended directly on local education, but I do consider it a +fundamental requirement of national activity which, accompanied by allied +subjects of welfare, is worthy of a separate department and a place in the +Cabinet. The humanitarian side of government should not be repressed, but +should be cultivated. + +Mere intelligence, however, is not enough. Enlightenment must be +accompanied by that moral power which is the product of the home and of +rebellion. Real education and true welfare for the people rest inevitably +on this foundation, which the Government can approve and commend, but which +the people themselves must create. IMMIGRATION + +American institutions rest solely on good citizenship. They were created by +people who had a background of self-government. New arrivals should be +limited to our capacity to absorb them into the ranks of good citizenship. +America must be kept American. For this i purpose, it is necessary to +continue a policy of restricted immigration. It would be well to make such +immigration of a selective nature with some inspection at the source, and +based either on a prior census or upon the record of naturalization. Either +method would insure the admission of those with the largest capacity and +best intention of becoming citizens. I am convinced that our present +economic and social conditions warrant a limitation of those to be +admitted. We should find additional safety in a law requiring the immediate +registration of all aliens. Those' who do not want to be partakers of the +American spirit ought not to settle in America. VETERANS + +No more important duty falls on the Government of the United States than +the adequate care of its veterans. Those suffering disabilities incurred in +the service must have sufficient hospital relief and compensation. Their +dependents must be supported. Rehabilitation and vocational training must +be completed. All of this service must be clean, must be prompt and +effective, and it must be administered in a spirit of the broadest and +deepest human sympathy. If investigation reveals any present defects of +administration or need Of legislation, orders will be given for the +immediate correction of administration, and recommendations for legislation +should be given the highest preference. + +At present there are 9,500 vacant beds in Government hospitals, I recommend +that all hospitals be authorized at once to receive and care for, without +hospital pay, the veterans of all wars needing such care, whenever there +are vacant beds, and that immediate steps be taken to enlarge and build new +hospitals to serve all such cases. + +The American Legion will present to the Congress a legislative pro 'gram +too extensive for detailed discussion here. It is a carefully matured plan. +While some of it I do not favor, with much of it I am in hearty accord, and +I recommend that a most painstaking effort be made to provide remedies for +any defects in the administration of the present laws which their +experience has revealed. The attitude of the Government toward these +proposals should be one of generosity. But I do not favor the granting of a +bonus. COAL + +The cost of coal has become unbearably high. It places a great burden on +our industrial and domestic life. The public welfare requires a reduction +in the price of fuel. With the enormous deposits in existence, failure of +supply ought not to be tolerated. Those responsible for the conditions in +this industry should undertake its reform and free it from any charge of +profiteering + +The report of the Coal Commission will be before the Congress. It comprises +all the facts. It represents the mature deliberations and conclusions of +the best talent and experience that ever made a national survey of the +production and distribution of fuel. I do not favor Government ownership or +operation of coal mines. The need is for action under private ownership +that will secure greater continuity of production and greater public +protection. The Federal Government probably has no peacetime authority to +regulate wages, prices, or profits in coal at the mines or among dealers, +but by ascertaining and publishing facts it can exercise great influence. + +The source of the difficulty in the bituminous coal fields is the +intermittence of operation which causes great waste of both capital and +labor. That part of the report dealing with this problem has much +significance, and is suggestive of necessary remedies. By amending, the car +rules, by encouraging greater unity of ownership, and possibly by +permitting common selling agents for limited districts on condition that +they accept adequate regulations and guarantee that competition between +districts be unlimited, distribution, storage, and continuity ought to be +improved. + +The supply of coal must be constant. In case of its prospective +interruption, the President should have authority to appoint a commission +empowered to deal with whatever emergency situation might arise, to aid +conciliation and voluntary arbitration, to adjust any existing or +threatened controversy between the employer and the employee when +collective bargaining fails, and by controlling distribution to prevent +profiteering in this vital necessity. This legislation is exceedingly +urgent, and essential to the exercise of national authority for the +protection of the people. Those who undertake the responsibility of +management or employment in this industry do so with the full knowledge +that the public interest is paramount, and that to fail through any motive +of selfishness in its service is such a betrayal of duty as warrants +uncompromising action by the Government. REORGANIZATION + +A special joint committee has been appointed to work out a plan for a +reorganization of the different departments and bureaus of the Government +more scientific and economical than the present system. With the exception +of the consolidation of the War and Navy Departments and some minor +details, the plan has the general sanction of the President and the +Cabinet. It is important that reorganization be enacted into law at the +present session. AGRICULTURE + +Aided by the sound principles adopted by the Government, the business of +the country has had an extraordinary revival. Looked at as a whole, the +Nation is in the enjoyment of remarkable prosperity. Industry and commerce +are thriving. For the most tart agriculture is successful, eleven staples +having risen in value from about $5,300,000,000 two years ago to about. +$7,000,000,000 for the current year. But range cattle are still low in +price, and some sections of the wheat area, notably Minnesota, North +Dakota, and on west, have many cases of actual distress. With his products +not selling on a parity with the products of industry, every sound remedy +that can be devised should be applied for the relief of the farmer. He +represents a character, a type of citizenship, and a public necessity that +must be preserved and afforded every facility for regaining prosperity. + +The distress is most acute among those wholly dependent upon one crop.. +Wheat acreage was greatly expanded and has not yet been sufficiently +reduced. A large amount is raised for export, which has to meet the +competition in the world market of large amounts raised on land much +cheaper and much more productive. + +No complicated scheme of relief, no plan for Government fixing of prices, +no resort to the public Treasury will be of any permanent value in +establishing agriculture. Simple and direct methods put into operation by +the farmer himself are the only real sources for restoration. + +Indirectly the farmer must be relieved by a reduction of national and local +taxation. He must be assisted by the reorganization of the freight-rate +structure which could reduce charges on his production. To make this fully +effective there ought to be railroad consolidations. Cheaper fertilizers +must be provided. + +He must have organization. His customer with whom he exchanges products o +he farm for those of industry is organized, labor is organized, business is +organized, and there is no way for agriculture to meet this unless it, too, +is organized. The acreage of wheat is too large. Unless we can meet the +world market at a profit, we must stop raising for export. Organization +would help to reduce acreage. Systems of cooperative marketing created by +the farmers themselves, supervised by competent management, without doubt +would be of assistance, but, the can not wholly solve the problem.' Our +agricultural schools ought to have thorough courses in the theory of +organization and cooperative marketing. + +Diversification is necessary. Those farmers who raise their living on their +land are not greatly in distress. Such loans as are wisely needed to assist +buying stock and other materials to start in this direction should be +financed through a Government agency as a temporary and emergency +expedient. + +The remaining difficulty is the disposition of exportable wheat. I do not +favor the permanent interference of the Government in this problem. That +probably would increase the trouble by increasing production. But it seems +feasible to provide Government assistance to exports, and authority should +be given the War Finance Corporation to grant, in its discretion, the most +liberal terms of payment for fats and grains exported for the direct +benefit of the farm. + +MUSCLE SHOALS + +The Government is undertaking to develop a great water-power project known +as Muscle Shoals, on which it has expended many million dollars. The work +is still going on. Subject to the right to retake in time of war, I +recommend that this property with a location for auxiliary steam plant and +rights of way be sold. This would end the present burden of expense and +should return to the Treasury the largest price possible to secure. + +While the price is an important element, there is another consideration +even more compelling. The agriculture of the Nation needs a greater supply +and lower cost of fertilizer. This is now imported in large quantities. The +best information I can secure indicates that present methods of power +production would not be able profitably to meet the price at which these +imports can be sold. To obtain a supply from this water power would require +long and costly experimentation to perfect a process for cheap production. +Otherwise our purpose would fail completely. It seems desirable, therefore, +in order to protect and promote the public welfare, to have adequate +covenants that such experimentation be made and carried on to success. The +great advantage of low-priced nitrates must be secured for the direct +benefit of the farmers and the indirect benefit of the public in time of +peace, and of the Government in time of war. If this main object be +accomplished, the amount of money received for the property is not a +primary or major consideration. + +Such a solution will involve complicated negotiations, and there is no +authority for that purpose. therefore recommend that the Congress appoint a +small joint committee to consider offers, conduct negotiations, and report +definite recommendations. RECLAMATION + +By reason of many contributing causes, occupants of our reclamation +projects are in financial difficulties, which in some cases are acute. +Relief should be granted by definite authority of law empowering the +Secretary of the Interior in. his discretion to suspend, readjust, and +reassess all charges against water users. This whole question is being +considered by experts. You will have the advantage of the facts and +conclusions which they may develop. This situation, involving a Government +investment of more than $135,000,000, and affecting more than 30,000 water +users, is serious. While relief which is necessary should be granted, yet +contracts with the Government which can be met should be met. The +established general policy of these projects should not be abandoned for +any private control. + +HIGHWAYS AND FORESTS + +Highways and reforestation should continue to have the interest and support +of the Government. Everyone is anxious for good highways. I have made a +liberal proposal in the Budget for the continuing payment to the States by +the Federal Government of its share for this necessary public improvement. +No expenditure of public money contributes so much to the national wealth +as for building good roads. + +Reforestation has an importance far above the attention it usually secures. +A special committee of the Senate is investigating this need, and I shall +welcome a constructive policy based on their report. + +It is 100 years since our country announced the Monroe doctrine. This +principle has been ever since, and is now, one of the main foundations of +our foreign relations. It must be maintained. But in maintaining it we must +not be forgetful that a great change has taken place. We are no longer a +weak Nation, thinking mainly of defense, dreading foreign imposition. We +are great and powerful. New powers bring new responsibilities. Our ditty +then was to protect ourselves. Added to that, our duty now is to help give +stability to. the world. We want idealism. We want that vision which lifts +men and nations above themselves. These are virtues by reason of their own +merit. But they must not be cloistered; they must not be impractical; they +must not be ineffective. + +The world has had enough of the curse of hatred and selfishness, of +destruction and war. It has had enough of the wrongful use of material +power. For the healing of the nations there must be good will and charity, +confidence and peace. The time has come for a more practical use of moral +power, and more reliance upon the principle that right makes its own might. +Our authority among the nations must be represented by justice and mercy. +It is necessary not only to have faith, but to make sacrifices for our +faith. The spiritual forces of the world make all its final determinations. +It is with these voices that America should speak. Whenever they declare a +righteous purpose there need be no doubt that they will be heard. America +has taken her place in the world as a Republic--free, independent, +powerful. The best service that can be rendered to humanity is the +assurance that this place will be maintained. + +*** + +State of the Union Address +Calvin Coolidge +December 3, 1924 + +To the Congress of the United States: + +The present state of the Union, upon which it is customary for the +President to report to the Congress under the provisions of the +Constitution, is such that it may be regarded with encouragement and +satisfaction by every American. Our country is almost unique in its ability +to discharge fully and promptly all its obligations at home and abroad, and +provide for all its inhabitants an increase in material resources, in +intellectual vigor and in moral power. The Nation holds a position +unsurpassed in all former human experience. This does not mean that we do +not have any problems. It is elementary that the increasing breadth of our +experience necessarily increases the problems of our national life. But it +does mean that if all will but apply ourselves industriously and honestly, +we have ample powers with which to meet our problems and provide for I heir +speedy solution. I do not profess that we can secure an era of perfection +in human existence, but we can provide an era of peace and prosperity, +attended with freedom and justice and made more and more satisfying by the +ministrations of the charities and humanities of life. + +Our domestic problems are for the most part economic. We have our enormous +debt to pay, and we are paying it. We have the high cost of government to +diminish, and we are diminishing it. We have a heavy burden of taxation to +reduce, and we are reducing it. But while remarkable progress has been made +in these directions, the work is yet far from accomplished. We still owe +over $21,000,000,000, the cost of the National Government is still about +$3,500,000,000, and the national taxes still amount to about $27 for each +one of our inhabitants. There yet exists this enormous field for the +application of economy. + +In my opinion the Government can do more to remedy the economic ills of the +people by a system of rigid economy in public expenditure than can be +accomplished through any other action. The costs of our national and local +governments combined now stand at a sum close to $100 for each inhabitant +of the land. A little less than one-third of this is represented by +national expenditure, and a little more than two-thirds by local +expenditure. It is an ominous fact that only the National Government is +reducing its debt. Others are increasing theirs at about $1,000,000,000 +each year. The depression that overtook business, the disaster experienced +in agriculture, the lack of employment and the terrific shrinkage in all +values which our country experienced in a most acute form in 1920, resulted +in no small measure from the prohibitive taxes which were then levied on +all productive effort. The establishment of a system of drastic economy in +public expenditure, which has enabled us to pay off about one-fifth of the +national debt since 1919, and almost cut in two the national tax burden +since 1921, has been one of the main causes in reestablishing a prosperity +which has come to include within its benefits almost every one of our +inhabitants. Economy reaches everywhere. It carries a blessing to +everybody. + +The fallacy of the claim that the costs of government are borne by the rich +and those who make a direct contribution to the National Treasury can not +be too often exposed. No system has been devised, I do not think any system +could be devised, under which any person living in this country could +escape being affected by the cost of our government. It has a direct effect +both upon the rate and the purchasing power of wages. It is felt in the +price of those prime necessities of existence, food, clothing, fuel and +shelter. It would appear to be elementary that the more the Government +expends the more it must require every producer to contribute out of his +production to the Public Treasury, and the less he will have for his own +benefit. The continuing costs of public administration can be met in only +one way -- by the work of the people. The higher they become, the more the +people must work for the Government. The less they are, the more the people +can work for themselves. + +The present estimated margin between public receipts and expenditures for +this fiscal year is very small. Perhaps the most important work that this +session of the Congress can do is to continue a policy of economy and +further reduce the cost of government, in order that we may have a +reduction of taxes for the next fiscal year. Nothing is more likely to +produce that public confidence which is the forerunner and the mainstay of +prosperity, encourage and enlarge business opportunity with ample +opportunity for employment at good wages, provide a larger market for +agricultural products, and put our country in a stronger position to be +able to meet the world competition in trade, than a continuing policy of +economy. Of course necessary costs must be met, proper functions of the +Government performed, and constant investments for capital account and +reproductive effort must be carried on by our various departments. But the +people must know that their Government is placing upon them no unnecessary +burden. TAXES + +Everyone desires a reduction of taxes, and there is a great preponderance +of sentiment in favor of taxation reform. When I approved the present tax +law, I stated publicly that I did so in spite of certain provisions which I +believed unwise and harmful. One of the most glaring of these was the +making public of the amounts assessed against different income-tax payers. +Although that damage has now been done, I believe its continuation to be +detrimental To the public welfare and bound to decrease public revenues, so +that it ought to be repealed. + +Anybody can reduce taxes, but it is not so easy to stand in the gap and +resist the passage of increasing appropriation bills which would make tax +reduction impossible. It will be very easy to measure the strength of the +attachment to reduced taxation by the power with which increased +appropriations are resisted. If at the close of the present session the +Congress has kept within the budget which I propose to present, it will +then be possible to have a moderate amount of tax reduction and all the tax +reform that the Congress may wish for during the next fiscal year. The +country is now feeling the direct stimulus which came from the passage of +the last revenue bill, and under the assurance of a reasonable system of +taxation there is every prospect of an era of prosperity of unprecedented +proportions. But it would be idle to expect any such results unless +business can continue free from excess profits taxation and be accorded a +system of surtaxes at rates which have for their object not the punishment +of success or the discouragement of business, but the production of the +greatest amount of revenue from large incomes. I am convinced that the +larger incomes of the country would actually yield more revenue to the +Government if the basis of taxation were scientifically revised downward. +Moreover the effect of the present method of this taxation is to increase +the cost of interest. on productive enterprise and to increase the burden +of rent. It is altogether likely that such reduction would so encourage and +stimulate investment that it would firmly establish our country in the +economic leadership of the world. WATERWAYS + +Meantime our internal development should go on. Provision should be made +for flood control of such rivers as the Mississippi and the Colorado, and +for the opening up of our inland waterways to commerce. Consideration is +due to the project of better navigation from the Great Lakes to the Gulf. +Every effort is being made to promote an agreement with Canada to build +the, St. Lawrence waterway. There are pending before the Congress bills for +further development of the Mississippi Basin, for the taking over of the +Cape Cod Canal in accordance with a moral obligation which seems to have +been incurred during the war, and for the improvement of harbors on both +the Pacific and the Atlantic coasts. While this last should be divested of +some of its projects and we must proceed slowly, these bills in general +have my approval. Such works are productive of wealth and in the long run +tend to a reduction of the tax burden. RECLAMATION + +Our country has a well defined policy of reclamation established under +statutory authority. This policy should be continued and made a +self-sustaining activity administered in a manner that will meet local +requirements and bring our and lands into a profitable state of cultivation +as fast as there is a market for their products. Legislation is pending +based on the report of the Fact Finding Commission for the proper relief of +those needing extension of time in which to meet their payments on +irrigated land, and for additional amendments and reforms of our +reclamation laws, which are all exceedingly important and should be enacted +at once. + +No more important development has taken place in the last year than the +beginning of a restoration of agriculture to a prosperous condition. We +must permit no division of classes in this country, with one occupation +striving to secure advantage over another. Each must proceed under open +opportunities and with a fair prospect of economic equality. The Government +can not successfully insure prosperity or fix prices by legislative fiat. +Every business has its risk and its times of depression. It is well known +that in the long run there will be a more even prosperity and a more +satisfactory range of prices under the natural working out of economic laws +than when the Government undertakes the artificial support of markets and +industries. Still we can so order our affairs, so protect our own people +from foreign competition, so arrange our national finances, so administer +our monetary system, so provide for the extension of credits, so improve +methods of distribution, as to provide a better working machinery for the +transaction of the business of the Nation with the least possible friction +and loss. The Government has been constantly increasing its efforts in +these directions for the relief and permanent establishment of agriculture +on a sound and equal basis with other business. + +It is estimated that the value of the crops for this harvest year may reach +$13,000,000,000, which is an increase of over $3,000,000,000 in three +years. It compares with $7,100,000,000 in 1913, arid if we make deduction +from the figures of 1924 for the comparatively decreased value of the +dollar, the yield this year still exceeds 1913 in purchasing power by over +$1,000,000,000, and in this interval there has been no increase in the +number of farmers. Mostly by his own effort the farmer has decreased the +cost of production. A marked increase in the price of his products and some +decrease in the price of his supplies has brought him about to a parity +with the rest of the Nation. The crop area of this season is estimated at +370,000,000 acres, which is a decline of 3,000,000 acres from last year, +and 6,000,000 acres from 1919. This has been a normal and natural +application of economic laws, which has placed agriculture on a foundation +which is undeniably sound and beginning to be satisfactory. + +A decrease in the world supply of wheat has resulted in a very large +increase in the price of that commodity. The position of all agricultural +products indicates a better balanced supply, but we can not yet conclude +that agriculture is recovered from the effects of the war period or that it +is permanently on a prosperous basis. The cattle industry has not yet +recovered and in some sections has been suffering from dry weather. Every +effort must be made both by Government activity and by private agencies to +restore and maintain agriculture to a complete normal relationship with +other industries. + +It was on account of past depression, and in spite of present more +encouraging conditions, that I have assembled an Agricultural Conference +made up of those who are representative of this great industry in both its +operating and economic sides. Everyone knows that the great need of the +farmers is markets. The country is not suffering on the side of production. +Almost the entire difficulty is on the side of distribution. This reaches +back, of course, to unit costs and diversification, and many allied +subjects. It is exceedingly intricate, for our domestic and foreign trade, +transportation and banking, and in fact our entire economic system, are +closely related to it. In time for action at this session, I hope to report +to the Congress such legislative remedies as the conference may recommend. +An appropriation should be made to defray their necessary expenses. + +MUSCLE SHOALS + +The production of nitrogen for plant food in peace and explosives in war is +more and more important. It is one of the chief sustaining elements of +life. It is estimated that soil exhaustion each year is represented by +about 9,000,000 tons and replenishment by 5,450,000 tons. The deficit of +3,550,000 tons is reported to represent the impairment of 118,000,000 acres +of farm lands each year. + +To meet these necessities the Government has been developing a water power +project at Muscle Shoals to be equipped to produce nitrogen for explosives +and fertilizer. It is my opinion that the support of agriculture is the +chief problem to consider in connection with this property. It could by no +means supply the present needs for nitrogen, but it would help and its +development would encourage bringing other water powers into like use. + +Several offers have been made for the purchase of this property. Probably +none of them represent final terms. Much costly experimentation is +necessary to produce commercial nitrogen. For that reason it is a field +better suited to private enterprise than to Government operation. I should +favor a sale of this property, or long-time lease, tinder rigid guaranties +of commercial nitrogen production at reasonable prices for agricultural +use. There would be a surplus of power for many years over any possibility +of its application to a developing manufacture of nitrogen. It may be found +advantageous to dispose of the right to surplus power separately with such +reservations as will allow its gradual withdrawal and application to +nitrogen manufacture. A subcommittee of the Committees on Agriculture +should investigate this field and negotiate with prospective purchasers. If +no advantageous offer be made, the development should continue and the +plant should be dedicated primarily to the production of materials for the +fertilization of the soil. RAILWAYS + +The railways during the past year have made still further progress in +recuperation from the war, with large rains in efficiency and ability +expeditiously to handle the traffic of the country. We have now passed +through several periods of peak traffic without the car shortages which so +frequently in the past have brought havoc to our agriculture and +industries. The condition of many of our great freight terminals is still +one of difficulty and results in imposing, large costs on the public for +inward-bound freight, and on the railways for outward-bound freight. Owing +to the growth of our large cities and the great increase in the volume of +traffic, particularly in perishables, the problem is not only difficult of +solution, but in some cases not wholly solvable by railway action alone. + +In my message last year I emphasized the necessity for further legislation +with a view to expediting the consolidation of our rail ways into larger +systems. The principle of Government control of rates and profits, now +thoroughly imbedded in our governmental attitude toward natural monopolies +such as the railways, at once eliminates the need of competition by small +units as a method of rate adjustment. Competition must be preserved as a +stimulus to service , but this will exist and can be increased tinder +enlarged systems. Consequently the consolidation of the railways into +larger units for the purpose of securing the substantial values to the +public which will come from larger operation has been the logical +conclusion of Congress in its previous enactments, and is also supported by +the best opinion in the country. Such consolidation will assure not only a +greater element of competition as to service, but it will afford economy in +operation, greater stability in railway earnings, and more economical +financing. It opens large possibilities of better equalization of rates +between different classes of traffic so as to relieve undue burdens upon +agricultural products and raw materials generally, which are now not +possible without ruin to small units owing to the lack of diversity of +traffic. It would also tend to equalize earnings in such fashion as to +reduce the importance of section 15A, at which criticism, often misapplied, +has been directed. A smaller number of units would offer less difficulties +in labor adjustments and would contribute much to the, solution of terminal +difficulties. + +The consolidations need to be carried out with due regard to public +interest and to the rights and established life of various communities in +our country. It does not seem to me necessary that we endeavor to +anticipate any final plan or adhere to an artificial and unchangeable +project which shall stipulate a fixed number of systems, but rather we +ought to approach the problem with such a latitude of action that it can be +worked out step by step in accordance with a comprehensive consideration of +public interest. Whether the number of ultimate systems shall be more or +less seems to me can only be determined by time and actual experience in +the development of such consolidations. + +Those portions of the present law contemplating consolidations ore not, +sufficiently effective in producing expeditious action and need +amplification of the authority of the Interstate Commerce Commission, +particularly in affording a period for voluntary proposals to the +commission and in supplying Government pressure to secure action after the +expiration of such a period. + +There are other proposals before Congress for amending the transportation +acts. One of these contemplates a revision of the method of valuation for +rate-making purposes to be followed by a renewed valuation of the railways. +The valuations instituted by the Interstate Commerce Commission 10 years +ago have not yet been completed. They have cost the Government an enormous +sum, and they have imposed great expenditure upon the railways, most of +which has in effect come out of the public in increased rates. This work +should not be abandoned or supplanted until its results are known and can +be considered. + +Another matter before the Congress is legislation affecting the labor +sections of the transportation act. Much criticism has been directed at the +workings of this section and experience has shown that some useful +amendment could be made to these provisions. + +It would be helpful if a plan could be adopted which, while retaining the +practice of systematic collective bargaining with conciliation voluntary +arbitration of labor differences, could also provide simplicity in +relations and more direct local responsibility of employees and managers. +But such legislation will not meet the requirements of the situation unless +it recognizes the principle that t e public has a right to the +uninterrupted service of transportation, and therefore a right to be heard +when there is danger that the Nation may suffer great injury through the +interruption of operations because of labor disputes. If these elements are +not comprehended in proposed legislation, it would be better to gain +further experience with the present organization for dealing with these +questions before undertaking a change. + +SHIPPING BOARD + +The form of the organization of the Shipping Board was based originally on +its functions as a semi judicial body in regulation of rates. During the +war it was loaded with enormous administrative duties. It has been +demonstrated time and again that this form of organization results in +indecision, division of opinion and administrative functions, which make a +wholly inadequate foundation for the conduct of a great business +enterprise. The first principle in securing the objective set out by +Congress in building up the American merchant marine upon the great trade +routes and subsequently disposing of it into private operation can not +proceed with effectiveness until the entire functions of the board are +reorganized. The immediate requirement is to transfer into the Emergency +Fleet, Corporation the whole responsibility of operation of the fleet and +other property, leaving to the Shipping Board solely the duty of +determining certain major policies which require deliberative action. + +The procedure under section 28 of the merchant marine act has created great +difficulty and threatened friction during the past 12 months. Its attempted +application developed not only great opposition from exporters, +particularly as to burdens that may be imposed upon agricultural products, +but also great anxiety in the different seaports as to the effect upon +their relative rate structures. This trouble will certainly recur if action +is attempted under this section. It is uncertain in some of its terms and +of great difficulty in interpretation. + +It is my belief that action under this section should be suspended until +the Congress can reconsider the entire question in the light of the +experience that has been developed since its enactment. + +NATIONAL ELECTIONS + +Nothing is so fundamental to the integrity of a republican form of +government as honesty in all that relates to the conduct of elections. I am +of the opinion that the national laws governing the choice of members of +the Congress should be extended to include appropriate representation of +the respective parties at the ballot box ant equality of representation on +the various registration boards, wherever they exist. + +THE JUDICIARY + +The docket of the Supreme Court is becoming congested. At the opening term +last year it had 592 cases, while this year it had 687 cases. Justice long +delayed is justice refused. Unless the court be given power by preliminary +and summary consideration to determine the importance of cases, and by +disposing of those which are not of public moment reserve its time for the +more extended consideration of the remainder, the congestion of the docket +is likely to increase. It is also desirable that Supreme Court should have +power to improve and reform procedure in suits at law in the Federal courts +through the adoption of appropriate rules. The Judiciary Committee of the +Senate has reported favorably upon two bills providing for these reforms +which should have the immediate favorable consideration of the Congress. + +I further recommend that provision be made for the appointment of a +commission, to consist of two or three members of the Federal judiciary and +as many members of the bar, to examine the present criminal code of +procedure and recommend to the Congress measures which may reform and +expedite court procedure in the administration and enforcement of our +criminal laws. + +PRISON REFORM + +Pending before the Congress is a bill which has already passed one House +providing for a reformatory to which could be committed first offenders and +young men for the purpose of segregating them from contact with banned +criminals and providing them with special training in order to reestablish +in them the power to pursue a law-abiding existence in the social and +economic life of the Nation. This is a matter of so much importance as to +warrant the early attention of the present session. Further provision +should also be made, for a like reason, for a separate reformatory for +women. + +NATIONAL POLICE BUREAU + +Representatives of the International Police Conference will bring to t e +attention of the Congress a proposal for the establishment of a national +police bureau. Such action would provide a central point for gathering, +compiling, and later distributing to local police authorities much +information which would be helpful in the prevention and detection of +crime. I believe this bureau is needed, and I recommend favorable +consideration of this proposal. + +DISTRICT OF COLUMBIA WELFARE + +The welfare work of the District of Columbia is administered by several +different boards dealing with charities and various correctional efforts. +It would be an improvement if this work were consolidated and placed under +the direction of a single commission. + +FRENCH SPOLIATION CLAIMS + +During the last session of the Congress legislation was introduced looking +to the payment of the remaining claims generally referred to as the French +spoliation claims. The Congress has provided for the payment of many +similar claims. Those that remain unpaid have been long pending. The +beneficiaries thereunder have every reason to expect payment. These claims +have been examined by the Court of Claims and their validity and amount +determined. The United States ought to pay its debts. I recommend action by +the Congress which will permit of the payment of these remaining claims. + +THE WAGE EARNER + +Two very important policies have been adopted by this country which, while +extending their benefits also in other directions, have been of the utmost +importance to the wage earners. One of these is the protective tariff, +which enables our people to live according to a better standard and receive +a better rate of compensation than any people, any time, anywhere on earth, +ever enjoyed. This saves the American market for the products of the +American workmen. The other is a policy of more recent origin and seeks to +shield our wage earners from the disastrous competition of a great influx +of foreign peoples. This has been done by the restrictive immigration law. +This saves the American job for the American workmen. I should like to see +the administrative features of this law rendered a little more humane for +the purpose of permitting those already here a greater latitude in securing +admission of members of their own families. But I believe this law in +principle is necessary and sound, and destined to increase greatly the +public welfare. We must maintain our own economic position, we must defend +our own national integrity. + +It is gratifying to report that the progress of industry, the enormous +increase in individual productivity through labor-saving devices, and the +high rate of wages have all combined to furnish our people in general with +such an abundance not only of the necessaries but of the conveniences of +life that we are by a natural evolution solving our problems of economic +and social justice. + +THE NEGRO + +These developments have brought about a very remarkable improvement in the +condition of the negro race. Gradually, but surely, with the almost +universal sympathy of those among whom they live, the colored people are +working out their own destiny. I firmly believe that it is better for all +concerned that they should be cheerfully accorded their full constitutional +rights, that they should be protected from all of those impositions to +which, from their position, they naturally fall a prey, especially from the +crime of lynching and that they should receive every encouragement to +become full partakers in all the blessings of our common American +citizenship. + +CIVIL SERVICE + +The merit system has long been recognized as the correct basis for +employment in our, civil service. I believe that first second, and third +class postmasters, and without covering in the present membership tile +field force of prohibition enforcement, should be brought within the +classified service by statute law. Otherwise the Executive order of one +administration is changed by the Executive order of another administration, +and little real progress is made. Whatever its defects, the merit system is +certainly to be preferred to the spoils system. + +DEPARTMENTAL REORGANIZATION + +One way to save public money would be to pass the pending bill for the +reorganization of the various departments. This project has been pending +for some time, and has had the most careful consideration of experts and +the thorough study of a special congressional committee. This legislation +is vital as a companion piece to the Budget law. Legal authority for a +thorough reorganization of the Federal structure with some latitude of +action to the Executive in the rearrangement of secondary functions would +make for continuing economy in the shift of government activities which +must follow every change in a developing country. Beyond this many of the +independent agencies of the Government must be placed under responsible +Cabinet officials, if we are to have safeguards of efficiency, economy, and +probity. + +ARMY AND NAVY + +Little has developed in relation to our national defense which needs +special attention. Progress is constantly being made in air navigation and +requires encouragement and development. Army aviators have made a +successful trip around the world, for which I recommend suitable +recognition through provisions for promotion, compensation, and retirement. +Under the direction of the Navy a new Zeppelin has been successfully +brought from Europe across the Atlantic to our own country. + +Due to the efficient supervision of the Secretary of War the Army of the +United States has been organized with a small body of Regulars and a +moderate National Guard and Reserve. The defense test of September 12 +demonstrated the efficiency of the operating plans. These methods and +operations are well worthy of congressional support. + +Under the limitation of armaments treaty a large saving in outlay and a +considerable decrease in maintenance of the Navy has been accomplished. We +should maintain the policy of constantly working toward the full treaty +strength of the Navy. Careful investigation is being made in this +department of the relative importance of aircraft, surface and submarine +vessels, in order that we may not fail to take advantage of all modern +improvements for our national defense. A special commission also is +investigating the problem of petroleum oil for the Navy, considering the +best policy to insure the future supply of fuel oil and prevent the +threatened drainage of naval oil reserves. Legislative action is required +to carry on experiments in oil shale reduction, as large deposits of this +type have been set aside for the use of the Navy. + +We have been constantly besought to engage in competitive armaments. +Frequent reports will reach us of the magnitude of the military equipment +of other, nations. We shall do well to be little impressed by such reports +or such actions. Any nation undertaking to maintain a military +establishment with aggressive and imperialistic designs will find itself +severely handicapped in the economic development of the world. I believe +thoroughly in the Army and Navy, in adequate defense and preparation. But I +am opposed to any policy of competition in building and maintaining land or +sea armaments. + +Our country has definitely relinquished the old standard of dealing with +other countries by terror and force, and is definitely committed to the new +standard of dealing with them through friendship and understanding. This +new policy should be constantly kept in mind by the guiding forces of the +Army and Navy, by the. Congress and by the country at large. I believe it +holds a promise of great benefit to humanity. I shall resist any attempt to +resort to the old methods and the old standards. I am especially solicitous +that foreign nations should comprehend the candor and sincerity with which +we have adopted this position. While we propose to maintain defensive and +supplementary police forces by land and sea, and to train them through +inspections and maneuvers upon appropriate occasions in order to maintain +their efficiency, I wish every other nation to understand that this does +not express any unfriendliness or convey any hostile intent. I want the +armed forces of America to be considered by all peoples not as enemies but +as friends as the contribution which is made by this country for the +maintenance of the peace and security of the world. VETERANS + +With the authorization for general hospitalization of the veterans of all +wars provided during the present year, the care and treatment of those who +have served their country in time of peril and the attitude of the +Government toward them is not now so much one of needed legislation as one +of careful, generous and humane administration. It will ever be recognized +that their welfare is of the first concern and always entitled to the most +solicitous consideration oil the part of their fellow citizens. They are +organized in various associations, of which the chief and most +representative is the American Legion. Through its officers the Legion will +present to the Congress numerous suggestions for legislation. They cover +such a wide variety of subjects that it is impossible to discuss them +within the scope of this message. With many of the proposals I join in +hearty approval and commend them all to the sympathetic investigation and +consideration of the Congress. + +FOREIGN RELATIONS + +At no period in the past 12 years have our foreign relations been in such a +satisfactory condition as they are at the present time. Our actions in the +recent months have greatly strengthened the American policy of permanent +peace with independence. The attitude which our Government took and +maintained toward an adjustment of European reparations, by pointing out +that it wits not a political but a business problem, has demonstrated its +wisdom by its actual results. We desire to see Europe restored that it may +resume its productivity in the increase of industry and its support in the +advance of civilization. We look with great gratification at the hopeful +prospect of recuperation in Europe through the Dawes plan. Such assistance +as can be given through the action of the public authorities and of our +private citizens, through friendly counsel and cooperation, and through +economic and financial support, not for any warlike effort but for +reproductive enterprise, not to provide means for unsound government +financing but to establish sound business administration ' should be +unhesitatingly provided. + +Ultimately nations, like individuals, can not depend upon each other but +must depend upon themselves. Each one must work out its own salvation. We +have every desire to help. But with all our resources we are powerless to +save unless our efforts meet with a constructive response. The situation in +our own country and all over the world is one Chat can be improved only by +bard work and self-denial. It is necessary to reduce expenditures, increase +savings and liquidate debts. It is in this direction that there lies the +greatest hope of domestic tranquility and international peace. Our own +country ought to finish the leading example in this effort. Our past +adherence to this policy, our constant refusal to maintain a military +establishment that could be thought to menace the security of others, our +honorable dealings with other nations whether great or small, has left us +in the almost constant enjoyment of peace. + +It is not necessary to stress the general desire of all the people of this +country for the promotion of peace. It is the leading principle of all our +foreign relations. We have on every occasion tried to cooperate to this end +in all ways that were consistent with our proper independence and our +traditional policies. It will be my constant effort to maintain these +principles, and to reinforce them by all appropriate agreements and +treaties. While we desire always to cooperate and to help, we are equally +determined to be independent and free. Right and truth and justice and +humanitarian efforts will have the moral support of this country all over +the world. But we do not wish to become involved in the political +controversies of others. Nor is the country disposed to become a member of +the League of Nations or to assume the obligations imposed by its +covenant. + +INTERNATIONAL COURT + +America has been one of the foremost nations in advocating tribunals for +the settlement of international disputes of a justiciable character. Our +representatives took a leading in those conferences which resulted in the +establishment of e ague Tribunal, and later in providing for a Permanent +Court of International Justice. I believe it would be for the advantage of +this country and helpful to the stability of other nations for us to adhere +to the protocol establishing, that court upon the conditions stated in the +recommendation which is now before the Senate, and further that our country +shall not be bound by advisory opinions which may be, rendered by the court +upon questions which we have not voluntarily submitted for its judgment. +This court would provide a practical and convenient tribunal before which +we could go voluntarily, but to which we could not be summoned, for a +determination of justiciable questions when they fail to be resolved by +diplomatic negotiations. + +DISARMAMENT CONFERENCE + +Many times I have expressed my desire to see the work of the Washington +Conference on Limitation of Armaments appropriately supplemented by further +agreements for a further reduction M for the purpose of diminishing the +menace and waste of the competition in preparing instruments of +international war. It has been and is my expectation that we might +hopefully approach other great powers for further conference on this +subject as soon as the carrying out of the present reparation plan as the +established and settled policy of Europe has created a favorable +opportunity. But on account of proposals which have already been made by +other governments for a European conference, it will be necessary to wait +to see what the outcome of their actions may be. I should not wish to +propose or have representatives attend a conference which would contemplate +commitments opposed to the freedom of action we desire to maintain +unimpaired with respect to our purely domestic policies. + +INTERNATIONAL LAW + +Our country should also support efforts which are being made toward the +codification of international law. We can look more hopefully, in the first +instance, for research and studies that are likely to be productive of +results, to a cooperation among representatives of the bar and members of +international law institutes and societies, than to a conference of those +who are technically representative of their respective governments, +although, when projects have been developed, they must go to the +governments for their approval. These expert professional studies are going +on in certain quarters and should have our constant encouragement and +approval. + +OUTLAW OF WAR + +Much interest has of late been manifested in this country in the discussion +of various proposals to outlaw aggressive war. I look with great sympathy +upon the examination of this subject. It is in harmony with the traditional +policy of our country, which is against aggressive war and for the +maintenance of permanent and honorable peace. While, as I have said, we +must safeguard our liberty to deal according to our own judgment with our +domestic policies, we can not fail to view with sympathetic interest all +progress to this desired end or carefully to study the measures that may be +proposed to attain it. + +LATIN AMERICA + +While we are desirous of promoting peace in every quarter of the globe, we +have a special interest in the peace of this hemisphere. It is our constant +desire that all causes of dispute in this area may be tranquilly and +satisfactorily adjusted. Along with our desire for peace is the earnest +hope for the increased prosperity of our sister republics of Latin America, +and our constant purpose to promote cooperation with them which may be +mutually beneficial and always inspired by the most cordial friendships. + +FOREIGN DEBTS + +About $12,000,000,000 is due to our Government from abroad, mostly from +European Governments. Great Britain, Finland, Hungary, Lithuania and Poland +have negotiated settlements amounting close to $5,000,000,000. This +represents the funding of over 42 per cent of the debt since the creation +of the special Foreign Debt Commission. As the life of this commission is +about to expire, its term should be extended. I am opposed to the +cancellation of these debts and believe it for the best welfare of the +world that they should be liquidated and paid as fast as possible. I do not +favor oppressive measures, but unless money that is borrowed is repaid +credit can not be secured in time of necessity, and there exists besides a +moral obligation which our country can not ignore and no other country can +evade. Terms and conditions may have to conform to differences in the +financial abilities of the countries concerned, but the principle that each +country should meet its obligation admits of no differences and is of +universal application. + +It is axiomatic that our country can not stand still. It would seem to be +perfectly plain from recent events that it is determined to go forward. But +it wants no pretenses, it wants no vagaries. It is determined to advance in +an orderly, sound and common-sense way. It does not propose to abandon the +theory of the Declaration that the people have inalienable rights which no +majority and no power of government can destroy. It does not propose to +abandon the practice of the Constitution that provides for the protection +of these rights. It believes that within these limitations, which are +imposed not by the fiat of man but by the law of the Creator, +self-government is just and wise. It is convinced that it will be +impossible for the people to provide their own government unless they +continue to own their own property. + +These are the very foundations of America. On them has been erected a +Government of freedom and equality, of justice and mercy, of education and +charity. Living under it and supporting it the people have come into great +possessions on the material and spiritual sides of life. I want to continue +in this direction. I know that the Congress shares with me that desire. I +want our institutions to be more and more expressive of these principles. I +want the people of all the earth to see in the American flag the symbol of +a Government which intends no oppression at home and no aggression abroad, +which in the spirit of a common brotherhood provides assistance in time of +distress. + +*** + +State of the Union Address +Calvin Coolidge +December 8, 1925 + +Members of the Congress: + +In meeting the constitutional requirement of informing the Congress upon +the state of the Union, it is exceedingly gratifying to report that the +general condition is one of progress and prosperity. Here and there are +comparatively small and apparently temporary difficulties needing +adjustment and improved administrative methods, such as are always to be +expected, but i ii the fundamentals of government and business the results +demonstrate that we are going in the right direction. The country does not +appear to require radical departures from the policies already adopted so +much as it needs a further extension of these policies and the improvement +of details. The age of perfection is still in the somewhat distant future, +but it is more in danger of being retarded by mistaken Government activity +than it is from lack of legislation. We are by far the most likely to +accomplish permanent good if we proceed with moderation. + +In our country the people are sovereign and independent, and must accept +the resulting responsibilities. It is their duty to support themselves and +support the Government. That is the business of the Nation, whatever the +charity of the Nation may require. The functions which the Congress are to +discharge are not those of local government but of National Government. The +greatest solicitude should be exercised to prevent any encroachment upon +the rights of the States or their various political subdivisions. Local +self-government is one of our most precious possessions. It is the greatest +contributing factor to the stability strength liberty, and progress of the +Nation. It ought not to be in ringed by assault or undermined by purchase. +It ought not to abdicate its power through weakness or resign its authority +through favor. It does not at all follow that because abuses exist it is +the concern of the Federal Government to attempt the r reform. + +Society is in much more danger from encumbering the National Government +beyond its wisdom to comprehend, or its ability to administer, than from +leaving the local communities to bear their own burdens and remedy their +own evils. Our local habit and custom is so strong, our variety of race and +creed is so great the Federal authority is so tenuous, that the area within +which it can function successfully is very limited. The wiser policy is to +leave the localities, so far as we can, possessed of their own sources of +revenue and charged with their own obligations. + +GOVERNMENT ECONOMY + +It is a fundamental principle of our country that the people are sovereign. +While they recognize the undeniable authority of the state, they have +established as its instrument a Government of limited powers. They hold +inviolate in their own hands the jurisdiction over their own freedom and +the ownership of their own property. Neither of these can be impaired +except by due process of law. The wealth of our country is not public +wealth, but private wealth. It does not belong to the Government, it +belongs to the people. The Government has no justification in taking +private Property except for a public purpose. It is always necessary to +keep these principles in mind in the laying of taxes and in the making of +appropriations. No right exists to levy on a dollar, or to order the +expenditure of a dollar, of the money of the people, except for a necessary +public purpose duly authorized by the Constitution. The power over the +purse is the power over liberty. + +That is the legal limitation within which the Congress can act, How it +will, proceed within this limitation is always a question of policy. When +the country is prosperous and free from debt, when the rate of taxation is +low, opportunity exists for assuming new burdens and undertaking new +enterprises. Such a condition now prevails only to a limited extent. All +proposals for assuming new obligations ought to be postponed, unless they +are reproductive capital investments or are such as are absolutely +necessary at this time. We still have an enormous debt of over +$20,000,000,000, on which the interest and sinking-fund requirements are +$1,320,000,000. Our appropriations for the Pension Office and the Veterans' +Bureau are $600,000,000. The War and Navy Departments call for +$642,000,000. Other requirements, exclusive of the Post Office ' which is +virtually self-sustaining, brought the appropriations for the current year +up to almost C3,100,060,000. This shows an expenditure of close to $30 for +every inhabitant of our country. For the average family of five it means a +tax, directly or indirectly paid, of about $150 for national purposes +alone. The local tax adds much more. These enormous expenditures ought not +to be increased, but through every possible effort they ought to be +reduced. + +Only one of these great items can be ultimately extinguished. That is the +item of our war debt. Already this has been reduced to about +$6,000,000,000, which means an annual saving in interest of close to +$250,000,000. The present interest charge is about $820,000,000 yearly. It +would seem to be obvious that the sooner this debt can be retired the more +the taxpayers will save in interest and the easier it will be to secure +funds with which to prosecute needed running expenses, constructions, and +improvements. This item of $820,000,000 for interest is a heavy charge on +all the people of the country, and it seems to me that we might well +consider whether it is not greatly worth while to dispense with it as early +as possible by retiring the principal debt which it is required to serve. + +It has always been our policy to retire our debts. That of the +Revolutionary War period, notwithstanding the additions made in 1812, was +paid by 1835. and the Civil War debt within 23 years. Of the amount already +paid, over $1,000,000,000 is a reduction in cash balances. That source is +exhausted. Over one and two-thirds billions of dollars was derived from +excess receipts. Tax reduction eliminates that. The sale of surplus war +materials has been another element of our income. That is practically +finished. With these eliminated, the reduction of the debt has been only +about $500,000,000 each year, not an excessive sum on so large a debt. + +Proposals have been made to extend the payment over a period of 62 years. +If $1,000,000,000 is paid at the end of 20 years, the cost to the taxpayers +is the principal and, I f the interest is 4% per cent, a total of +$1,850,000,000. If the same sum is paid at the end of 62 years, the cost is +$3,635,000,000, or almost double. Here is another consideration: Compared +with its purchasing power in 1913, the dollar we borrowed represented but +52 cents. As the value of our dollar increases, due to the falling prices +of commodities, the burden of our debt increases. It has now risen to 631/2 +cents. The taxpayer will be required to produce nearly twice the amount of +commodities to pay his debt if the dollar returns to the 1913 value. The +more we pay while prices are high, the easier it will be. + +Deflation of government after a war period is slower than deflation of +business, where curtailment is either prompt and effective or disaster +follows. There is room for further economy in the cost of the Federal +Government, but a co n of current expenditures with pre-war expenditures is +not able to the efficiency with which Government business is now being +done. The expenditures of 19161 the last pre-war year, were $742,000,000, +and in 1925 over $3,500,000,000, or nearly five times as great. If we +subtract expenditures for debt retirements and interest, veterans' relief, +increase of pensions, and other special outlays, consisting of refunds, +trust investments, and like charges, we find that the general expenditures +of the Government in 1925 were slightly more than twice as large as in +1916. + +As prices in 1925 were approximately 40 per cent higher than in 1916, the +cost of the same Government must also have increased. But the Government is +not 'the same. It is more expensive to collect the much greater revenue +necessary and to administer our great debt. We have given enlarged and +improved services to agriculture and commerce. Above all, America has grown +in population and wealth. Government expenditures must always share in + +this growth. Taking into account the factors I have mentioned, I believe +that present Federal expenses are not far out of line with pre-war +expenses. We have nearly accomplished the deflation. + +This does not mean that further economies will not come. As we reduce our +debt our interest charges decline. There are many details yet to correct. +The real improvement, however, must come not from additional curtailment of +expenses, but by a more intelligent, more ordered spending. Our economy +must be constructive. While we should avoid as far as possible increases in +permanent current expenditures, oftentimes a capital outlay like internal +improvements will result in actual constructive saving. That is economy in +its best sense. It is an avoidance of waste that there may be the means for +an outlay to-day which will bring larger returns to-morrow. We should +constantly engage in scientific studies of our future requirements and +adopt an orderly program for their service. Economy is the method by which +we prepare to-day to afford the improvements of to-morrow. + +A mere policy of economy without any instrumentalities for putting it into +operation would be very ineffective. The Congress has wisely set up the +Bureau of the Budget to investigate and inform the President what +recommendations he ought to make for current appropriations. This gives a +centralized authority where a general and comprehensive understanding can +be reached of the sources of income and the most equitable distribution of +expenditures. How well it has worked is indicated by the fact that the +departmental estimates for 1922, before the budget law, were $4,068,000,000 +while the Budget estimates for 1927 are $3,156,000,000. This latter figure +shows the reductions in departmental estimates for the coming year made +possible by the operation of the Budget system that the Congress has +provided. + +But it is evidently not enough to have care in making appropriations +without any restraint upon expenditure. The Congress has provided that +check by establishing the office of Comptroller General. + +The purpose of maintaining the Budget Director and the Comptroller General +is to secure economy and efficiency in Government expenditure. No better +method has been devised for the accomplishment of that end. These offices +can not be administered in all the various details without making some +errors both of fact and of judgment. But the important consideration +remains that these are the instrumentalities of the Congress and that no +other plan has ever been adopted which was so successful in promoting +economy and efficiency. The Congress has absolute authority over the +appropriations and is free to exercise its judgment, as the evidence may +warrant, in increasing or decreasing budget recommendations. But it ought +to resist every effort to weaken or break down this most beneficial system +of supervising appropriations and expenditures. Without it all the claim of +economy would be a mere pretense. TAXATION + +The purpose of reducing expenditures is to secure a reduction in taxes. +That purpose is about to be realized. With commendable promptness the Ways +and Means Committee of the House has undertaken in advance of the meeting +of the Congress to frame a revenue act. As the bill has proceeded through +the committee it has taken on a nonpartisan character, and both Republicans +and Democrats have joined in a measure which embodies many sound principles +of tax reform. The bill will correct substantially the economic defects +injected into the revenue act of 1924, as well as many which have remained +as war-time legacies. In its present form it should provide sufficient +revenue for the Government. + +The excessive surtaxes have been reduced, estate tax rates arv restored to +more reasonable figures, with every prospect of withdrawing from the field +when the States have had the opportunity to correct the abuses in their own +inheritance tax laws, the gift tax and publicity section are to be repealed +many miscellaneous taxes are lowered or abandoned, and the Board of Tax +Appeals and the administrative features of the law are improved and +strengthened. I approve of the bill in principle. In so far as income-tax +exemptions are concerned, it seems, to me the committee has gone as far as +it is Safe to go and somewhat further than I should have gone. Any further +extension along these lines would, in my opinion, impair tile integrity of +our income-tax system. + +I am advised that the bill will. be through the House by Christmas. For +this prompt action the country call thank the good sense of the Ways and +Means Committee in framing an economic measure upon economic +considerations. If this attitude continues to be reflected through the +Congress, the taxpayer will have his relief by the time his March 15th +installment of income taxes is due. Nonpartisan effort means certain, quick +action. Determination of a revenue law definitely, promptly and solely as a +revenue law, is one of the greatest gifts a legislature can bestow upon its +constituents. I commend the example of file Ways and Means Committee. If +followed, it will place sound legislation upon the books in time to give +the taxpayers the full benefit of tax reduction next year. This means that +the bill should reach me prior to March 15. + +All these economic results are being sought not to benefit the rich, but to +benefit the people. They are for the purpose of encouraging industry in +order that employment may be plentiful. They seek to make business good in +order that wages may be good. They encourage prosperity in order that +poverty may be banished from the home. They, seek to lay the foundation +which, through increased production, may, give the people a more bountiful +supply of the necessaries of life, afford more leisure for the improvement +of the mind, the appreciation of the arts of music and literature, +sculpture and painting, and the beneficial enjoyment of outdoor sports and +recreation, enlarge the resources which minister to charity and by aU these +means attempting to strengthen the spiritual life of the Nation. + +FOREIGN RELATIONS + +The policy of our foreign relations, casting aside any suggestion of force, +rests solely on the foundation of peace, good will, and good works. We have +sought, in our intercourse with other nations, better understandings +through conference and exchange of views its befits beings endowed with +reason. The results have been the gradual elimination of disputes, the +settlement of controversies, and the establishment of a firmer friendship +between America and the rest of the world that has ever existed tit any +previous time. + +The example of this attitude has not been without its influence upon other +countries. Acting upon it, an adjustment was made of the difficult problem +of reparations. This was the second step toward peace in Europe. It paved +the way for the agreements which were drawn tip at the Locarno Conference. +When ratified, these will represent the third step toward peace. While they +do not of themselves provide an economic rehabilitation, which is necessary +for the progress of Europe, by strengthening the guarantees of peace they +diminish the need for great armaments. If the energy which now goes into +military effort is transferred to productive endeavor it will greatly +assist economic progress. + +The Locarno agreements were made by the, European countries directly +interested without ;any formal intervention of America, although on July 3 +1 publicly advocated such agreements in an address made in Massachusetts. +We have consistently refrained from intervening except when our help has +been sought and we have felt it could be effectively given, as in the +settlement of reparations and the London Conference. These recent Locarno +agreements represent the success of this policy which we have been +insisting ought to be adopted, of having European countries settle their +own political problems without involving this country. This beginning seems +to demonstrate that this policy is sound. It is exceedingly gratifying to +observe this progress, both in its method and in its result promises so +much that is beneficial to the world. + +When these agreements are finally adopted, they will provide guarantees of +peace that make the present prime reliance upon force in some parts of +Europe very much less necessary. The natural corollary to these treaties +should be further international contracts for the limitation of armaments. +This work was successfully begun at the Washington Conference. Nothing was +done at that time concerning land forces because of European objection. Our +standing army has been reduced to around 118,000, about the necessary +police force for 115,000,000 people. We are not proposing to increase it, +nor is it supposable that any foreign country looks with the slightest +misapprehension upon our land forces. They do not menace anybody. They are +rather a protection to everybody. + +The question of disarming upon land is so peculiarly European in its +practical aspects that our country would look with particular gratitude +upon any action which those countries might take to reduce their own +military forces. This is in accordance with our policy of not intervening +unless the European powers are unable to agree and make request for our +assistance. Whenever they are able to agree of their own accord it is +especially gratifying to its, and such agreements may be sure of our +sympathetic support. + +It seems clear that it is the reduction of armies rather than of navies +that is of the first importance to the world at the present time. We shall +look with great satisfaction upon that effort and give it our approbation +and encouragement. If that can be settled, we may more easily consider +further reduction and limitation of naval armaments. For that purpose our +country has constantly through its Executive, and through repeated acts of +Congress, indicated its willingness to call such a conference. Under +congressional sanction it would seem to be wise to participate in any +conference of the great powers for naval limitation of armament proposed +upon such conditions that it would hold a fair promise of being effective. +The general policy of our country is for disarmament, and it ought not to +hesitate to adopt any practical plan that might reasonably be expected to +succeed. But it would not care to attend a conference which from its +location or constituency would in all probability prove futile. + +In the further pursuit, of strengthening the bonds of peace and good will +we have joined with other nations in an international conference held at +Geneva and signed an agreement which will be laid before the Senate for +ratification providing suitable measures for control and for publicity in +international trade in arms, ammunition. and implements of war, and also +executed a protocol providing for a prohibition of the use of poison gas in +war, in accordance with the principles of Article 5 of the treaty relating +thereto signed at tile Washington Conference. We are supporting the Pan +American efforts that are being made toward the codification of +international. law, and looking with sympathy oil the investigations +conducted under philanthropic auspices of the proposal to agreements +outlawing war. In accordance with promises made at the Washington +Conference, we have urged the calling of and are now represented at the +Chinese Customs Conference and on the Commission on Extraterritoriality, +where it will be our policy so far as possible to meet the, aspirations of +China in all ways consistent with the interests of the countries involved. + +COURT OF INTERNATIONAL JUSTICE + +Pending before the Senate for nearly three years is the proposal to adhere +to the protocol establishing the Permanent Court of International Justice. +A well-established line of precedents mark America's effort to effect the +establishment of it court of this nature.. We took a leading part in laying +the foundation on which it rests in the establishment of The Hague Court of +Arbitration. It is that tribunal which nominates the judges who are elected +by tile Council and Assembly of the League of Nations. + +The proposal submitted to the Senate was made dependent upon four +conditions, the first of which is that by supporting the court we do not +assume any obligations under the league; second, that we may participate +upon an equality with other States in the election of judges; third, that +the Congress shall determine what part of the expenses we shall bear; +fourth, that the statute creating tile court shall not be amended without +out consent; and to these I have proposed an additional condition to the +effect that we are not to be bound by advisory opinions rendered without +our consent. + +The court appears to be independent of the league. It is true tile judges +are elected by tile Assembly and Council, but they are nominated by the +Court of Arbitration, which we assisted to create and of which we are a +part. The court was created by it statute, so-called, which is really a +treaty made among some forty-eight different countries, that might properly +be called a constitution of the court. This statute provides a method by +which the judges are chosen ' so that when the Court of Arbitration +nominates them and the Assembly and Council of the League elect them, they +are not acting as instruments of the Court of Arbitration or instruments of +the league, but as instruments of the statute. + +This will be even more apparent if our representatives sit with the members +of the council and assembly in electing the judges. It is true they are +paid through the league though not by the league, but by the countries +which are members of the league and by our country if we accept the +protocol. The judges are paid by the league only in the same sense that it +could be said United States judges are paid by the Congress. The court +derives all its authority from the statute and is so completely independent +of the league that it could go on functioning if the league were disbanded, +at least until the terms of the judges expired. + +The most careful provisions are made in the statute as to the +qualifications of judges. Those who make the nominations are recommended to +consult with their highest court of justice, their law schools and +academies. The judges must be persons of high moral character, qualified to +hold the highest judicial offices in that country, or be jurisconsults of +recognized competence in international law. It must be assumed that these +requirements will continue to be carefully met, and with America joining +the countries already concerned it is difficult to comprehend how human +ingenuity could better provide for the establishment of a court which would +maintain its independence. It has to be recognized that independence is to +a considerable extent a matter of ability, character, and personality. Some +effort was made in the early beginnings to interfere with the independence +of our Supreme Court. It did not succeed because of the quality of the men +who made up that tribunal. + +It does not seem that the authority to give advisory opinions interferes +with the independence of the court. Advisory opinions in and of themselves +are not harmful, but may be used in such a way as to be very beneficial +because they undertake to prevent injury rather than merely afford a remedy +after the injury has been done. As a principle that only implies that the +court shall function when proper application is made to it. Deciding the +question involved upon issues submitted for an advisory opinion does not +differ materially from deciding the question involved upon issues submitted +by contending parties. Up to the present time the court has given an +advisory opinion when it judged it had jurisdiction, and refused to give +one when it judged it did not have jurisdiction. Nothing in the work of the +court has yet been an indication that this is an impairment of its +independence or that its practice differs materially from the giving of +like opinions under the authority of the constitutions of several of our +States. + +No provision of the statute seems to me to give this court any authority to +be a political rather than a judicial court. We have brought cases in this +country before our courts which, when they have been adjudged to be +political, have been thereby dismissed. It is not improbable that political +questions will be submitted to this court, but again up to the present time +the court has refused to pass on political questions and our support would +undoubtedly have a tendency to strengthen it in that refusal. + +We are not proposing to subject ourselves to any compulsory jurisdiction. +If we support the court, we can never be obliged to submit any case which +involves our interests for its decision. Our appearance before it would +always be voluntary, for the purpose of presenting a case which we had +agreed might be presented. There is + +no more danger that others might bring cases before the court involving our +interests which we did not wish to have brought, after we have adhered, and +probably not so much, than there would be of bringing such cases if we do +not adhere. I think that we would have the same legal or moral right to +disregard such a finding in the one case that we would in the other. + +If we are going to support any court, it will not be one that we have set +tip alone or which reflects only our ideals. Other nations have their +customs and their institutions, their thoughts and their methods of life. +If a court is going to be international, its composition will have to yield +to what is good in all these various elements. Neither will it be possible +to support a court which is exactly perfect, or under which we assume +absolutely no obligations. If we are seeking that opportunity, we might as +well declare that we are opposed to supporting any court. If any agreement +is made, it will be because it undertakes to set up a tribunal which can do +some of the things that other nations wish to have done. We shall not find +ourselves bearing a disproportionate share of the world's burdens by our +adherence, and we may as well remember that there is absolutely no escape +for our country from bearing its share of the world's burdens in any case. +We shall do far better service to ourselves and to others if we admit this +and discharge our duties voluntarily, than if we deny it and are forced to +meet the same obligations unwillingly + +It is difficult to imagine anything that would be more helpful to the world +than stability, tranquility and international justice. We may say that we +are contributing to these factors independently, but others less +fortunately located do not and can not make a like contribution except +through mutual cooperation. The old balance of power, mutual alliances, and +great military forces were not brought bout by any mutual dislike for +independence, but resulted from the domination of circumstances. Ultimately +they were forced on us. Like all others engaged in the war whatever we said +as a matter of fact we joined an alliance, we became a military power, we +impaired our independence. We have more at stake than any one else in +avoiding a repetition of that calamity. Wars do not, spring into existence. +They arise from small incidents and trifling irritations which can be +adjusted by an international court. We can contribute greatly to the +advancement of our ideals by joining with other nations in maintaining such +a tribunal. + +FOREIGN DEBTS + +Gradually, settlements have been made which provide for the liquidation of +debts due to our Government from foreign governments. Those made with Great +Britain, Finland, Hungary Lithuania, and Poland have already been approved +by the Congress. Since the adjournment, further agreements have been +entered into with Belgium, Czechoslovakia, Latvia, Estonia, Italy, and +Rumania. These 11 nation,,, which have already made settlements, represent +$6,419,528,641 of the original principal of the loans. The principal sums +without interest, still pending, are the debt of France, of $3,340,000,000; +Greece, $15,000,000; Yugoslavia, $.51,000,000; Liberia, $26,000; Russia, +$192,000,000, which those at present in control have undertaken, openly to +repudiate; Nicaragua, $84,000, which is being paid currently; and Austria, +$24,000,000, on which by act of Congress a moratorium of 20 years has been +granted. The only remaining sum is $12,000,000, due from Armenia, which has +now ceased to exist as an independent nation. + +In accordance with the settlements made, the amount of principal and +interest which is to be paid to the United States under these agreements +aggregate $15,200,688,253.93. It is obvious that the remaining settlements, +which will undoubtedly be made, will bring this sum up to an amount which +will more than equal the principal due on our present national debt. While +these settlements are very large in the aggregate, it has been felt that +the terms granted were in all cases very generous. They impose no undue +burden and are mutually beneficial in the observance of international faith +and the improvement of international credit. + +Every reasonable effort will be made to secure agreements for liquidation +with the remaining countries, whenever they are in such condition that they +can be made. Those which have already been negotiated under the bipartisan +commission established by the Congress have been made only after the most +thoroughgoing and painstaking investigation, continued for a long time +before meeting with the representatives of the countries concerned. It is +believed that they represent in each instance the best that can be done and +the wisest settlement that can be secured. One very important result is the +stabilization of foreign currency, making exchange assist rather than +embarrass our trade. Wherever sacrifices have been made of money, it will +be more than amply returned in better understanding and friendship, while +in so far as these adjustments will contribute to the financial stability +of the debtor countries, to their good order, prosperity, and progress, +they represent hope of improved trade relations and mutual contributions to +the civilization of the world. + +ALIEN PROBLEM + +Negotiations are progressing among the interested parties in relation to +the final distribution of the assets in the hands of the Alien Property +Custodian. Our Government and people are interested as creditors; the +German Government and people are interested as debtors and owners of the +seized property. Pending the outcome of these negotiations, I do not +recommend any affirmative legislation. For the present we should continue +in possession of this property which we hold as security for the settlement +of claims due to our people and our Government. IMMIGRATION + +While not enough time has elapsed to afford a conclusive demonstration, +such results as have been secured indicate that our immigration law is on +the whole beneficial. It is undoubtedly a protection to the wage earners of +this country. The situation should however, be carefully surveyed, in order +to ascertain whether it is working a' needless hardship upon our own +inhabitants. If it deprives them of the comfort and society of those bound +to them by close family ties, such modifications should be adopted as will +afford relief, always in accordance with the principle that our Government +owes its first duty to our own people and that no alien, inhabitant of +another country, has any legal rights whatever under our Constitution and +laws. It is only through treaty, or through residence here that such rights +accrue. But we should not, however, be forgetful of the obligations of a +common humanity. + +While our country numbers among its best citizens many of those of foreign +birth, yet those who now enter in violation of our laws bi that very act +thereby place themselves in a class of undesirables. T investigation +reveals that any considerable number are coming here in defiance of our +immigration restrictions, it will undoubtedly create the necessity for the +registration of all aliens. We ought to have no prejudice against an alien +because lie is an alien. The standard which we apply to our inhabitants is +that of manhood, not place of birth. Restrictive immigration is to a large +degree for economic purposes. It is applied in order that we may not have a +larger annual increment of good people within our borders than we can weave +into our economic fabric in such a way as to supply their needs without +undue injury to ourselves. + +NATIONAL DEFENSE + +Never before in time of peace has our country maintained so large and +effective a military force. as it now has. The Army, Navy, Marine Corps, +National Guard, and Organized Reserves represent a strength of about +558,400 men. These forces are well trained, well equipped, and high in +morale. + +A sound selective service act giving broad authority for the mobilization +in time of peril of all the resources of the country, both persons and +materials, is needed to perfect our defense policy in accordance with our +ideals of equality. The provision for more suitable housing to be paid for +out of funds derived from the sale of excess lands, pending before the last +Congress, ought to be brought forward and passed. Reasonable replacements +ought to be made to maintain a sufficient ammunition reserve. + +The Navy has the full treaty tonnage of capital ships. Work is going +forward in modernizing the older ones, building aircraft carriers, +additional fleet submarines, and fast scout cruisers, but we are carefully +avoiding anything that might be construed as a competition in armaments +with other nations. The joint Army and Navy maneuvers at Hawaii, followed +by the cruise of a full Battle Fleet to Australia and New Zealand, were +successfully carried out. These demonstrations revealed a most satisfactory +condition of the ships and the men engaged. + +Last year at my suggestion the General Board of the Navy made an +investigation and report on the relation of aircraft to warships. As a +result authorizations and appropriations were made for more scout cruisers +and fleet submarines and for completing aircraft carriers and equipping +them with necessary planes. Additional training in aviation was begun at +the Military and Naval Academies. A method of coordination and cooperation +of the Army and Navy and the principal aircraft builders is being +perfected. At the suggestion of the Secretaries of War and Navy I appointed +a special board to make a further study of the problem of aircraft. + +The report of the Air Board ought to be reassuring to the country, +gratifying to the service and satisfactory to the Congress. It is +thoroughly complete and represents the mature thought of the best talent in +the country. No radical change in organization of the service seems +necessary. The Departments of War, Navy, and Commerce should each be +provided with an additional assistant secretary, not necessarily with +statutory duties but who would be available under the direction of the +Secretary to give especial attention to air navigation. We must have an air +strength worthy of America. Provision should be made for two additional +brigadier generals for the Army Air Service. Temporary rank corresponding +to their duties should be awarded to active flying officers in both Army +and Navy. + +Aviation is of great importance both for national defense and commercial +development. We ought to proceed in its improvement by the necessary +experiment and investigation. Our country is not behind in this art. It has +made records for speed and for the excellence of its planes. It ought to go +on maintaining its manufacturing plants capable of rapid production, giving +national assistance to tile la in out of airways, equipping itself with a +moderate number of planes and keeping an air force trained to the highest +efficiency. + +While I am a thorough believer in national defense and entirely committed +to the policy of adequate preparation, I am just as thoroughly opposed to +instigating or participating in a policy of competitive armaments. Nor does +preparation mean a policy of militarizing. Our people and industries are +solicitous for the cause of 0111, country, and have great respect for the +Army and Navy and foil the uniform worn by the men who stand ready at all +times for our protection to encounter the dangers and perils necessary to +military service, but all of these activities are to be taken not in behalf +of aggression but in behalf of peace. They are the instruments by which we +undertake to do our part to promote good will and support stability among +all peoples. VETERANS + +If any one desires to estimate the esteem in which the veterans of America +are held by their fellow citizens, it is but necessary to remember that the +current budget calls for an expenditure of about $650,000.000 in their +behalf. This is nearly the amount of the total cost of the National +Government, exclusive of the post office, before we entered the last war. + +At the two previous sessions of Congress legislation affecting veterans' +relief was enacted and the law liberalized. This legislation brought into +being a number of new provisions tending more nearly to meet the needs of +our veterans, as well as afford the necessary authority to perfect the +administration of these laws. + +Experience with the new legislation so far has clearly demonstrated its +constructive nature. It has increased the benefits received by many and bas +made eligible for benefits many others. Direct disbursements to the veteran +or his dependents exceeding $21,000,000 have resulted, which otherwise +would not have been made. The degree of utilization of our hospitals has +increased through making facilities available to the incapacitated veteran +regardless of service origin of the disability. This new legislation also +has brought about a marked improvement of service to the veteran. + +The organizations of ex-service men have proposed additional legislative +changes which you will consider, but until the new law and the +modifications made at the last session of Congress are given a more +thorough test further changes in the basic law should be few and made only +after careful though sympathetic consideration. + +The principal work now before the Veterans' Bureau is the perfection of its +organization and further improvements in service. Some minor legislative +changes are deemed necessary to enable the bureau to retain that high grade +of professional talent essential in handling the problems of the bureau. +Such changes as tend toward the improvement of service and the carrying +forward to completion of the hospital construction program are recommended +for the consideration of the proper committees of Congress. + +With the enormous outlay that is now being made in behalf of the veterans +and their dependents, with a tremendous war debt still requiring great +annual expenditure, with the still high rate of taxation, while. every +provision should be made for the relief of the disabled and the necessary +care of dependents, the Congress may well consider whether the financial +condition of the Government is not such that further bounty through the +enlargement of general pensions and other emoluments ought not to be +postponed. AGRICULTURE + +No doubt the position of agriculture as a whole has very much improved +since the depression of three and four years ago. But there are many +localities and many groups of individuals, apparently through no fault of +their own, sometimes due to climatic conditions and sometimes to the +prevailing price of a certain crop, still in a distressing condition. This +is probably temporary, but it is none the less acute. National Government +agencies, the Departments of Agriculture and Commerce, the Farm Loan Board, +the intermediate credit banks, and the Federal Reserve Board are all +cooperating to be of assistance and relief. On the other hand, there are +localities and individuals who have had one of their most prosperous years. +The general price level is fair, but here again there are exceptions both +ways, some items being poor while others are excellent. In spite of a +lessened production the farm income for this year will be about the same as +last year and much above the three preceding years. + +Agriculture is a very complex industry. It does not consist of one problem, +but of several. They can not be solved at one stroke. They have to be met +in different ways, and small gains are not to be despised. + +It has appeared from all the investigations that I have been able to make +that the farmers as a whole are determined to maintain the independence of +their business., They do not wish to have meddling on the part of the +Government or to be placed under the inevitable restrictions involved in +any system of direct or indirect price-fixing, which would result from +permitting the Government to operate in the agricultural markets. They are +showing a very commendable skill in organizing themselves to transact their +own business through cooperative. marketing, which will this year turn over +about $2,500,000,000, or nearly one-fifth of the total agricultural +business. In this they are receiving help from the Government. The +Department of Agriculture should be strengthened in this facility, in order +to be able to respond when these marketing associations 'want help. While +it ought not to undertake undue regulation, it should be equipped to give +prompt information on crop prospects, supply, demand, current receipts, +imports, exports, and prices. + +A bill embodying these principles, which has been drafted under the advice +and with the approval of substantially all the leaders and managers in the +cooperative movement, will be presented to the Congress for its enactment. +Legislation should also be considered to provide for leasing the +unappropriated public domain for grazing purposes and adopting a uniform +policy relative to grazing on the public lands and in the national +forests. + +A more intimate relation should be established between agriculture and the +other business activities of the Nation. They are mutually dependent and +can each advance their own prosperity most by advancing the prosperity of +the other. Meantime the Government will continue those activities which +have resulted in an unprecedented amount of legislation and the pouring out +of great sums of money during the last five years. The work for good roads, +better land and water transportation, increased support for agricultural +education, extension of credit facilities through the Farm Loan Boards and +the intermediate credit banks, the encouragement of orderly marketing and a +repression of wasteful speculation, will all be continued. + +Following every other depression, after a short period the price of farm +produce has taken and maintained the lead in the advance. This advance had +reached a climax before the war. Everyone will recall the discussion that +went on for four or five years prior to 1914 concerning the high cost of +living. This history is apparently beginning to repeat itself. While +wholesale prices of other commodities have been declining, farm prices have +been increasing. There is every reason to suppose that a new era in +agricultural prosperity lies just before us, which will probably be +unprecedented. + +MUSCLE SHOALS + +The problem of Muscle Shoals seems to me to have assumed a place all out of +proportion with its real importance. It probably does not represent in +market value much more than a first-class battleship, yet it has been +discussed in the Congress over a period of years and for months at a time. +It ought to be developed for the production of nitrates primarily, and +incidentally for power purposes. This would serve defensive, agricultural, +and industrial purposes. I am in favor of disposing of this property to +meet these purposes. The findings of the special commission will be +transmitted to the Congress for their information. I am convinced that the +best possible disposition can be made by direct authorization of the +Congress. As a means of negotiation I recommend the immediate appointment +of a small joint special committee chosen from the appropriate general +standing committees of the House and Senate to receive bids, which when +made should be reported with recommendations as to acceptance, upon which a +law should be enacted, effecting a sale to the highest bidder who will +agree to carry out these purposes. + +If anything were needed to demonstrate the almost utter incapacity of the +National Government to deal directly with an industrial and commercial +problem, it has been provided by our experience with this property. We have +expended vast fortunes, we have taxed everybody, but we are unable to +secure results, which benefit anybody. This property ought, to be +transferred to private management under conditions which will dedicate it +to the public purpose for which it was conceived. RECLAMATION + +The National Government is committed to a policy of reclamation and +irrigation which it desires to establish on a sound basis and continue in +the interest of the localities concerned. Exhaustive studies have recently +been made of Federal reclamation, which have resulted in improving the +projects and adjusting many difficulties. About one third of the projects +is in good financial condition, another third can probably be made +profitable, while the other third is under unfavorable conditions. The +Congress has already provided for a survey which will soon be embodied in a +report. That ought to suggest a method of relief which will make +unnecessary further appeals to the Congress. Unless this can be done, +Federal reclamation will be considerably retarded. With the greatly +increased cost of construction and operation, it has become necessary to +plan in advance, by community organization and selective agriculture, +methods sufficient to repay these increasing outlays. + +The human and economic interests of the farmer citizens suggest that the +States should be required to exert some effort and assume some +responsibility, especially in the intimate, detailed, and difficult work of +securing settlers and developing farms which directly profit them, but only +indirectly and remotely can reimburse the 'Nation. It is believed that the +Federal Government should continue to be the agency for planning and +constructing the great undertakings needed to regulate and bring into use +the rivers the West, many of which are interstate in character, but the +detailed work of creating agricultural communities and a rural civilization +on the land made ready for reclamation ought to be either transferred to +the State 'in its entirety or made a cooperative effort of the State and +Federal Government. SHIPPING + +The maintenance of a merchant marine is of the utmost importance for +national defense and the service of our commerce. We have a large number of +ships engaged in that service. We also have a surplus supply, costly to +care for, which ought to be sold. All the investigations that have been +made under my direction, and those which have been prosecuted +independently, have reached the conclusion that the fleet should be under +the direct control of a single executive head, while the Shipping Board +should exercise its judicial and regulatory functions in Accordance with +its original conception. The report of Henry G. Dalton, a business man of +broad experience, with a knowledge of shipping, made to me after careful +investigation, will be transmitted for the information of the Congress, the +studies pursued under the direction of the United States Chamber of +Commerce will also be accessible, and added to these will be the report of +the special committee of the House. + +I do not advocate the elimination of regional considerations, but it has +become apparent that without centralized executive action the management of +this great business, like the management of any other great business, will +flounder in incapacity and languish under a division of council. A plain +and unmistakable reassertion of this principle of unified control, which I +have always been advised was the intention of the Congress to apply, is +necessary to increase the efficiency of our merchant fleet. COAL + +The perennial conflict in the coal industry is still going on to the great +detriment of the wage earners, the owners, and especially to the public. +With deposits of coal in this country capable of supplying its needs for +hundreds of years, inability to manage and control this great resource for +the benefit of all concerned is very close to a national economic failure. +It has been the subject of repeated investigation and reiterated +recommendation. Yet the industry seems never to have accepted modern +methods of adjusting differences between employers and employees. The +industry could serve the public much better and become subject to a much +more effective method of control if regional consolidations and more +freedom in the formation of marketing associations, under the supervision +of the Department of Commerce, were permitted. + +At the present time the National Government has little or no authority to +deal with this vital necessity of the life of the country. It has permitted +itself to remain so powerless that its only attitude must be humble +supplication. Authority should be lodged with the President and the +Departments of Commerce and Labor, giving them power to deal with an +emergency. They should be able to appoint temporary boards with authority +to call for witnesses and documents, conciliate differences, encourage +arbitration, and in case of threatened scarcity exercise control over +distribution. Making the facts public under these circumstances through a +statement from an authoritative source would be of great public benefit. +The report of the last coal commission should be brought forward, +reconsidered, and acted upon. PROHIBITION + +Under the orderly processes of our fundamental institutions the +Constitution was lately amended providing for national prohibition. The +Congress passed an act for its enforcement, and similar acts have been +provided by most of the States. It is the law of the land. It is the duty +of all who come under its, jurisdiction to observe the spirit of that law, +and it is the duty of the Department of Justice and the Treasury Department +to enforce it. Action to prevent smuggling, illegal transportation in +interstate commerce, abuse in the use of permits, and existence of sources +of supply for illegal traffic is almost entirely imposed upon the Federal +Government. + +Through treaties with foreign governments and increased activities of the +Coast Guard, revenue agents, district attorneys and enforcement agents +effort is being made to prevent these violations. But the Constitution also +puts a concurrent duty on the States. We need their active and energetic +cooperation, the vigilant action of their police, and the jurisdiction of +their courts to assist in enforcement. I request of the people observance, +of the public officers continuing." efforts for enforcement, and of the +Congress favorable action on the budget recommendation for the prosecution +of this work. + +WATERWAY DEVELOPMENT + +For many years our country has been employed in plans and M for the +development of our intracoastal and inland waterways. This work along our +coast is an important adjunct to our commerce. It will be carried on, +together with the further opening up of our harbors, as our resources +permit. The Government made an agreement during the war to take over the +Cape Cod Canal, under which the owners made valuable concessions. This +pledged faith of the Government ought to be redeemed. + +Two other main fields are under consideration. One is the Great Lakes and +St. Lawrence, including the Erie Canal. This includes stabilizing the lake +level, and is both a waterway and power project. A joint commission of the +United States and Canada is working on plans and surveys which will not be +completed until next April. No final determination can be made, apparently, +except under treaty as to the participation of both countries. The other is +the Mississippi River stem. This is almost entirely devoted to navigation. +Work on the Ohio River will be completed in about three years. A modern +channel connecting Chicago, New Orleans, Kansas City, and Pittsburgh should +be laid out and work on the tributaries prosecuted. Some work is being done +of a preparatory nature along the Missouri, and large expenditures are +being made yearly in the lower reaches of the Mississippi and its +tributaries which contribute both to flood control and navigation. +Preliminary measures are being" taken on tile Colorado River project, which +is exceedingly important for flood control, irrigation, power development, +and water supply to the area concerned. It would seem to be very doubtful, +however, whether it is practical to secure affirmative action of the +Congress, except under a Joint agreement of the several States. + +The Government has already expended large sums upon scientific research and +engineering investigation in promotion of this Colorado River project. The +actual progress has been retarded for many years by differences among the +seven States in the basin over their relative water rights and among +different groups as to methods. In an attempt to settle the primary +difficulty of the water rights, Congress authorized the Colorado River +Commission which agreed on November 24, 1922, upon an interstate compact to +settle these rights, subject to the ratification of the State legislatures +and Congress. All seven States except Arizona at one time ratified, the +Arizona Legislature making certain reservations which failed to meet the +approval of the governor. Subsequently an attempt was made to establish the +compact upon a six-State basis, but in this case California imposed +reservations. There appears to be no division of opinion upon the major +principles of the compact, but difficulty in separating contentions to +methods of development from the discussion of it. It is imperative that +flood control be undertaken for California and Arizona. preparation made +for irrigation, for power, and for domestic water. + +Some or all of these questions are combined in every proposed development. +The Federal Government is interested in some of these phases, State +governments and municipalities and irrigation districts in others, and +private corporations in still others. Because of all this difference of +view it is most desirable that Congress should consider the creation of +some agency that will be able to determine methods of improvement solely +upon economic and engineering facts, that would be authorized to negotiate +and settle, subject to the approval of Congress, the participation, rights, +and obligations of each group in any particular works. Only by some such +method can early construction be secured. + +WATER POWER + +Along with the development of navigation should go every possible +encouragement for the development of our water power. While steam. still +plays a dominant part, this is more and more becoming an era of +electricity. Once installed, the cost is moderate, has not tended greatly +to increase, and is entirely free from the unavoidable dirt and +disagreeable features attendant upon the burning of coal. Every facility +should be extended for the connection of the various units into a +superpower plant, capable at all times of a current increasing uniformity +over the entire system. RAILROADS + +The railroads throughout the country are in a fair state of prosperity. +Their service is good and their supply of cars is abundant. Their condition +would be improved and the public better served by a system of +consolidations. I recommend that the Congress authorize such consolidations +tinder the supervision of the Interstate Commerce Commission, with power to +approve or disapprove when proposed parts are excluded or new parts added. +I am informed that the railroad managers and their employees have reached a +substantial agreement as to what legislation is necessary to regulate and +improve their relationship. Whenever they bring forward such proposals, +which seem sufficient also to protect the interests of the public, they +should be enacted into law. + +It is gratifying to report that both the railroad managers and railroad +employees are providing boards for the mutual adjustment of differences in +harmony with the principles of conference, conciliation, and arbitration. +The solution of their problems ought to be an example to all other +industries. Those who ask the protections of civilization should be ready +to use the methods of civilization. + +A strike in modern industry has many of the aspects of war in the modern +world. It injures labor and it injures capital. If the industry involved is +a basic one, it reduces the necessary economic surplus and, increasing the +cost of living, it injures the economic welfare and general comfort of the +whole people. It also involves a deeper cost. It tends to embitter and +divide the community into warring classes and thus weakens the unity and +power of our national life. + +Labor can make no permanent gains at the cost of the general welfare. All +the victories won by organized labor in the past generation have been won +through the support of public opinion. The manifest inclination of the +managers and employees of the railroads to adopt a policy of action in +harmony with these principles marks a new epoch in our industrial life. + +OUTLYING POSSESSIONS + +The time has come for careful investigation of the expenditures and success +of the laws by which we have undertaken to administer our outlying +possessions. A very large amount of money is being expended for +administration in Alaska. It appears so far out of proportion to the number +of inhabitants and the amount of production as to indicate cause for +thorough investigation. Likewise consideration should be given to the +experience under the law which governs the Philippines. From such reports +as reach me there are indications that more authority should be given to +the Governor General, so that he will not be so dependent upon the local +legislative body to render effective our efforts to set an example of the,, +sound administration and good government, which is so necessary for the +preparation of the Philippine people for self-government under ultimate +independence. If they are to be trained in these arts, it is our duty to +provide for them the best that there is. + +RETIREMENT OF JUDGES + +The act of March 3, 1911, ought to be amended so that the term of years of +service of judges of any court of the United States requisite for +retirement with pay shall 6e computed to include not only continuous but +aggregate service. + +MOTHERS' AID + +The Government ought always to be alert on the side of the humanities. It +Ought to encourage provisions for economic justice for the defenseless. It +ought to extend its relief through its national and local agencies, as may +be appropriate in each case, to the suffering and the needy. It ought to be +charitable. + +Although more than 40 of our States have enacted measures in aid of +motherhood, the District of Columbia is still without such a law. A +carefully considered bill will be presented, which ought to have most +thoughtful consideration in order that the Congress may adopt a measure +which will be hereafter a model for all parts of the Union. + +CIVIL SERVICE + +In 1883 the Congress passed the civil service act, which from a modest +beginning of 14,000 employees has grown until there are now 425,000 in the +classified service. This has removed the clerical force of the Nation from +the wasteful effects of the spoils system and made it more stable and +efficient. The time has come to consider classifying all postmasters, +collectors of customs, collectors of internal revenue, and prohibition +agents, by an act covering in those at present in office, except when +otherwise provided by Executive order. + +The necessary statistics are now being gathered to form the basis of a +valuation of the civil service retirement fund based on current conditions +of the service. It is confidently expected that this valuation will be +completed in time to be made available to the Congress during the present +session. It will afford definite knowledge of existing, and future +liabilities under the present law and determination OF liabilities under +any proposed change in the present law. We should have this information +before creating further obligations for retirement annuities which will +become liabilities to be met in the future from the money of the taxpayer. + +The classification act of 1923, with the subsequent legislative action +providing for adjustment of the compensation of field service positions, +has operated materially to improve employment conditions in the Federal +service. The administration of the act is in the hands of an impartial +board, functioning without the necessity of a direct appropriation. It +would be inadvisable at this time to place in other hands the +administration of this act. + +FEDERAL TRADE COMMISSION + +The proper function of the Federal Trade Commission is to supervise and +correct those practices in commerce which are detrimental to fair +competition. In this it performs a useful function and should be continued +and supported. It was designed also to be a help to honest business. In my +message to the Sixty-eighth Congress I recommended that changes in the +procedure then existing be made. Since then the commission by its own +action has reformed its rules, giving greater speed and economy in the +disposal of its cases and full opportunity for those accused to be heard. +These changes are improvements and, if necessary, provision should be made +for their permanency. REORGANIZATION + +No final action has yet been taken on the measure providing for the +reorganization of the various departments. I therefore suggest that this +measure, which will be of great benefit to the efficient and economical +administration of the business of the Government, be brought forward and +passed. + +THE NEGRO + +Nearly one-tenth of our population consists of the Negro race. The progress +which they have made in all the arts of civilization in the last 60 years +is almost beyond belief. Our country has no more loyal citizens. But they +do still need sympathy, kindness, and helpfulness. They need reassurance +that the requirements of the Government and society to deal out to them +even-handed justice will be met. They should be protected from all violence +and supported in the peaceable enjoyment of the fruits of their labor. +Those who do violence to them should be punished for their crimes. No other +course of action is worthy of the American people. + +Our country has many elements in its population, many different modes of +thinking and living, all of which are striving in their own way to be loyal +to the high ideals worthy of the crown of American citizenship. It is +fundamental of our institutions that they seek to guarantee to all our +inhabitants the right to live their own lives under the protection of the +public law. This does not include any license to injure others materially, +physically, morally, to Incite revolution, or to violate the established +customs which have long bad the sanction of enlightened society. + +But it does mean the full right to liberty and equality before the law +without distinction of race or creed. This condition can not be granted to +others, or enjoyed by ourselves, except by the application of the principle +of broadest tolerance. Bigotry is only another name for slavery. It reduces +to serfdom not only those against whom it is directed, but also those who +seek to apply it. An enlarged freedom can only be secured by the +application of the golden rule. No other utterance ever presented such a +practical rule of life. CONCLUSION + +It is apparent that we are reaching into an era of great general +prosperity. It will continue only so long as we shall use it properly. +After all, there is but a fixed quantity of wealth in this country at any +fixed time. The only way that we can all secure more of it is to create +more. The element of time enters into production, If the people have +sufficient moderation and contentment to be willing to improve their +condition by the process of enlarging production, eliminating waste, and +distributing equitably, a prosperity almost without limit lies before its. +If the people are to be dominated by selfishness, seeking immediate riches +by nonproductive speculation and by wasteful quarreling over the returns +from industry, they will be confronted by the inevitable results of +depression and privation. If they will continue industrious and thrifty, +contented with fair wages and moderate profits, and the returns which +accrue from tile development of oar natural resources, our prosperity will +extend itself indefinitely. + +In all your deliberations you should remember that the purpose of +legislation is to translate principles into action. It is an effort to have +our country be better by doing better. Because the thoughts and ways of +people are firmly fixed and not easily changed, the field within which +immediate improvement can be secured is very narrow. Legislation can +provide opportunity. Whether it is taken advantage of or not depends upon +the people themselves. The Government of the United States has been created +by the people. It is solely responsible to them. It will be most successful +if it is conducted solely for their benefit. All its efforts would be of +little avail unless they brought more justice, more enlightenment, more +happiness and prosperity into the home. This means an opportunity to +observe religion, secure education, and earn a living under a reign of law +and order. It is the growth and improvement of the material and spiritual +life of the Nation. We shall not be able to gain these ends merely by our +own action. If they come at all, it will be because we have been willing to +work in harmony with the abiding purpose of a Divine Providence. + +*** + +State of the Union Address +Calvin Coolidge +December 7, 1926 + +Members of the Congress: + +In reporting to the Congress the state of the Union, I find it impossible +to characterize it other than one of general peace and prosperity. In some +quarters our diplomacy is vexed with difficult and as yet unsolved +problems, but nowhere are we met with armed conflict. If some occupations +and areas are not flourishing, in none does there remain any acute chronic +depression. What the country requires is not so much new policies as a +steady continuation of those which are already being crowned with such +abundant success. It can not be too often repeated that in common with all +the world we are engaged in liquidating the war. + +In the present short session no great amount of new legislation is +possible, but in order to comprehend what is most desirable some survey of +our general situation is necessary. A large amount of time is consumed in +the passage of appropriation bills. If each Congress in its opening session +would make appropriations to continue for two years, very much time would +be saved which could either be devoted to a consideration of the general +needs of the country or would result in decreasing the work of legislation. +ECONOMY + +Our present state of prosperity has been greatly promoted by three +important causes, one of which is economy, resulting in reduction and +reform in national taxation. Another is the elimination of many kinds of +waste. The third is a general raising of the standards of efficiency. This +combination has brought the perfectly astonishing result of a reduction in +the index price of commodities and an increase in the index rate of wages. +We have secured a lowering of the cost to produce and a raising of the +ability to consume. Prosperity resulting from these causes rests on the +securest of all foundations. It gathers strength from its own progress. + +In promoting this progress the chief part which the National Government +plays lies in the field of economy. Whatever doubts may have been +entertained as to the necessity of this policy and the beneficial results +which would accrue from it to all the people of the Nation, its wisdom must +now be considered thoroughly demonstrated. It may not have appeared to be a +novel or perhaps brilliant conception, but it has turned out to be +preeminently sound. It has + +not failed to work. It has surely brought results. It does not have to be +excused as a temporary expedient adopted as the lesser evil to remedy some +abuse, it is not. a palliative seeking to treat symptoms, but a major +operation for the, eradication at the source of a large number of social +diseases. + +Nothing is easier than the expenditure of public money. It does not appear +to belong to anybody. The temptation is overwhelming to bestow it on +somebody. But the results of extravagance are ruinous. The property of the +country, like the freedom of the country, belongs to the people of the +country. They have not empowered their Government to take a dollar of it +except for a necessary public purpose. But if the Constitution conferred +such right, sound economics would forbid it. Nothing is more, destructive +of the progress of the Nation than government extravagance. It means an +increase in the burden of taxation, dissipation of the returns from +enterprise, a decrease in the real value of wages, with ultimate stagnation +and decay. The whole theory of our institutions is based on the liberty and +independence of the individual. He is dependent on himself for support and +therefore entitled to the rewards of his own industry. He is not to be +deprived of what he earns that others may be benefited by what they do not +earn. What lie saves through his private effort is not to be wasted by +Government extravagance. + +Our national activities have become so vast that it is necessary to +scrutinize each item of public expenditure if we are to apply the principle +of economy. At the last session we made an immediate increase in the annual +budget of more than $100,000,000 in benefits conferred on the veterans of +three wars, public buildings, and river and harbor improvement. Many +projects are being broached requiring further large outlays. I am convinced +that it would be greatly for the welfare of the country if we avoid at the +present session all commitments except those of the most pressing nature. +From a reduction of the debt and taxes will accrue a wider benefit to all +the people of this country than from embarking on any new enterprise. When +our war debt is decreased we shall have resources for expansion. Until that +is accomplished we should confine ourselves to expenditures of the most +urgent necessity. + +The Department of Commerce has performed a most important function in +making plans and securing support of all kinds of national enterprise for +the elimination of waste. Efficiency has been greatly promoted through good +management and the constantly increasing cooperation of the wage earners +throughout the whole realm of private business. It is my opinion that this +whole development has been predicated on the foundation of a protective +tariff. + +TAX REDUCTION + +As a result of economy of administration by the Executive and of +appropriation by the Congress, the end of this fiscal year will leave a +surplus in the Treasury estimated at $383,000,000. Unless otherwise +ordered, such surplus is used for the retirement of the war debt. A bond +which can be retired today for 100 cents will cost the, people 104 1/4 +cents to retire a year from now. While I favor a speedy reduction of the +debt as already required by law and in accordance with the promises made to +the holders of our Liberty bonds when they were issued, there is no reason +why a balanced portion of surplus revenue should not be applied to a +reduction of taxation. It can not be repeated too often that the enormous +revenues of this Nation could not be collected without becoming a charge on +all the people whether or not they directly pay taxes. Everyone who is +paying or the bare necessities of fool and shelter and clothing, without +considering the better things of life, is indirectly paying a national tax. +The nearly 20,000,000 owners of securities, the additional scores of +millions of holders of insurance policies and depositors in savings banks, +are all paying a national tax. Millions of individuals and corporations are +making a direct contribution to the National Treasury which runs from 11/2 +to 25 per cent of their income, besides a number of special requirements, +like automobile and admission taxes. Whenever the state of the Treasury +will permit, I believe in a reduction of taxation. I think the taxpayers +are entitled to it. But I am not advocating tax reduction merely for the +benefit of the taxpayer; I am advocating it for the benefit of the +country. + +If it appeared feasible, I should welcome permanent tax reduction at this +time. The estimated surplus, however, for June 30, 1928, is not much larger +than is required in a going business of nearly $4,000,000,000. We have had +but a few months' experience under the present revenue act and shall need +to know what is developed by the returns of income produced under it, which +are not required t o be made until about the time this session terminates, +and what the economic probabilities of the country are in the latter part +of 1927, before we can reach any justifiable conclusion as to permanent tax +reduction. Moreover the present surplus results from many nonrecurrent +items. Meantime, it is possible to grant some real relief by a simple +measure making reductions in the payments which accrue on the 15th of March +and June, 1927. 1 am very strongly of the conviction that this is so much a +purely business matter that it ought not to be dealt with in a partisan +spirit. The Congress has already set the notable example of treating tax +problems without much reference to party, which might well be continued. +What I desire to advocate most earnestly is relief for the country from +unnecessary tax burdens. We can not secure that if we stop to engage in a +partisan controversy. As I do not think any change in the special taxes, or +tiny permanent reduction is practical, I therefore urge both parties of the +House Ways and Means Committee to agree on a bill granting the temporary +relief which I have indicated. Such a reduction would directly affect +millions of taxpayers, release large sums for investment in new enterprise, +stimulating industrial production and agricultural consumption, and +indirectly benefiting every family in the whole country. These are my +convictions stated with full knowledge that it is for the Congress to +decide whether they judge it best to make such a reduction or leave the +surplus for the present year to be applied to retirement of the war debt. +That also is eventually tax reduction. + +PROTECTIVE TARIFF + +It is estimated that customs receipts for the present fiscal year will +exceed $615,000,000, the largest which were ever secured from that source. +The value of our imports for the last fiscal year was $4,466,000,000, an +increase of more than 71 per cent since the present tariff law went into +effect. Of these imports about 65 per cent, or, roughly, $2,900,000,000, +came in free of duty, which means that the United States affords a +duty-free market to other countries almost equal in value to the total +imports of Germany and greatly exceeding the total imports of France. We +have admitted a greater volume of free imports than any other country +except England. + +We are, therefore, levying duties on about $1,550,000,000 of imports. +Nearly half of this, or $700,000,000, is subject to duties for the +protection of agriculture and have their origin in countries other than +Europe. They substantially increased the prices received by our farmers for +their produce. About $300,000.000 more is represented by luxuries such as +costly rugs, furs, precious stones, etc. This leaves only about +$550,000,000 of our imports under a schedule of duties which is in general +under consideration when there is discussion of lowering the tariff. While +the duties on this small portion, representing only about 12 per cent of +our imports, undoubtedly represent the difference between a fair degree of +prosperity or marked depression to many of our industries and the +difference between good pay and steady work or wide unemployment to many of +our wage earners, it is impossible to conceive how other countries or our +own importers could be greatly benefited if these duties are reduced. Those +who are starting an agitation for a reduction of tariff duties, partly at +least for the benefit of those to whom money has been lent abroad, ought to +know that there does not seem to be a very large field within the area of +our imports in which probable reductions would be advantageous to foreign +goods. Those who wish to benefit foreign producers are much more likely to +secure that result by continuing the present enormous purchasing power +which comes from our prosperity that hall?' increased our imports over 71 +per cent in four years than from any advantages that are likely to accrue +from a general tariff reduction. AGRICULTURE + +The important place which agriculture holds in the economic and social life +of the Nation can not be overestimated. The National Government is +justified in putting forth every effort to make the open country a +desirable place to live. No condition meets this requirement which fails to +supply a fair return on labor expended and capital invested. While some +localities and some particular crops furnish exceptions, in general +agriculture is continuing to make progress in recovering from the +depression of 1921 and 1922. Animal products and food products are in a +more encouraging position, while cotton, due to the high prices of past +years supplemented by ideal weather conditions, has been stimulated to a +point of temporary over production. Acting on the request of the cotton +growing interests, appointed a committee to assist in carrying out their +plans. As it result of this cooperation sufficient funds have been pledged +to finance the storage and carrying of 4,000,000 bales of cotton. Whether +those who own the cotton are willing to put a part of their stock into this +plan depends on themselves. The Federal Government has cooperated in +providing ample facilities. No method of meeting the situation would be +adequate which does not contemplate a reduction of about one-third in the +acreage for the coming year. The responsibility for making the plan +effective lies with those who own and finance cotton and cotton lands. + +The Department of Agriculture estimates the net income of agriculture for +the year 1920-21 at only $375,000,000; for 1924-25, $2,656,000,000; for +1925-26, $2,757,000,000. This increase has been brought about in part by +the method already referred to, of Federal tax reduction, the elimination +of waste, and increased efficiency in industry. The wide gap that existed a +few years ago between the index price of agricultural products and the +index price of other products has been gradually closing up, though the +recent depression in cotton has somewhat enlarged it. Agriculture had on +the whole been going higher while industry had been growing lower. +Industrial and commercial activities, being carried on for the most part by +corporations, are taxed at a much higher rate than farming, which is +carried on by individuals. This will inevitably make industrial commodity +costs high while war taxation lasts. It is because of this circumstance +that national tax reduction has a very large indirect benefit upon the +farmer, though it can not relieve him from the very great burden of the +local taxes which he pays directly. We have practically relieved the farmer +of any Federal income tax. + +There is agreement on all sides that some portions of our agricultural +industry have lagged behind other industries in recovery from the war and +that further improvement in methods of marketing of agricultural products +is most desirable. There is belief also that the Federal Government can +further contribute to these ends beyond the many helpful measures taken +during the last five years through the different acts of Congress for +advancing the interests of the farmers. + +The packers and stockyards act, + +Establishing of the intermediate credit banks for agricultural purposes, + +The Purnell Act for agricultural research, + +The Capper-Volstead Cooperative Marketing Act, + +The cooperative marketing act of 1926, + +Amendments to the warehousing act, + +The enlargement of the activities of the Department of Agriculture, + +Enlargement of the scope of loans by the Farm Loan Board, + +The tariff on agricultural products, + +The large Federal expenditure in improvement of waterways and highways, + +The reduction of Federal taxes, in all comprise a great series of +governmental actions in the advancement of the special interest of +agriculture. + +In determination of what further measures may be undertaken it seems to me +there are certain pitfalls which must be avoided and our test in avoiding +them should be to avoid disaster to the farmer himself. + +Acting upon my recommendation, the Congress has ordered the interstate +Commerce Commission to investigate the freight-rate structure, directing +that such changes shall be made in freight rates as will promote freedom of +movement of agricultural products. Railroad consolidation which I am +advocating would also result in a situation where rates could be made more +advantageous for farm produce, as has recently been done in the revision of +rates on fertilizers in the South. Additional benefit will accrue from the +development of our inland waterways. The Mississippi River system carries a +commerce of over 50,000,000 tons at a saving of nearly $18,000,000 +annually. The Inland Waterways Corporation operates boats on 2,500 miles of +navigable streams and through its relation with 165 railroads carries +freight into and out of 45 States of the Union. During the past six months +it has handled over 1,000,000 bushels of grain monthly and by its lower +freight rates has raised the price of such grain to the farmer probably +21/2 cents to 3 cents a bushel. The highway system on which the Federal +Government expends about $85,000,000 a year is of vital importance to the +rural regions. + +The advantages to be derived from a more comprehensive and less expensive +system. of transportation for agriculture ought to be supplemented by +provision for an adequate supply of fertilizer at a lower cost than it is +at. present obtainable. This advantage we are attempting to secure by the +proposed development at Muscle Shoals, and there are promising experiments +being made in synthetic chemistry for the production of nitrates. + +A survey should be made of the relation of Government grazing lands to the +livestock industry. Additional legislation is desirable more definitely to +establish the place of grazing in the administration of the national +forests, properly subordinated to their functions of producing timber and +conserving the water supply. Over 180,000,000 acres of grazing lands are +still pastured as commons in the public domain with little or no +regulation. This has made their use so uncertain that it has contributed +greatly to the instability of the livestock industry. Very little of this +land is suited to settlement or private ownership. Some plan ought to be +adopted for its use in grazing, corresponding broadly to that already +successfully applied to the national forests. + +The development of sound and strong cooperative associations is of +fundamental importance to our agriculture. It is encouraging to note, +therefore, that a vigorous and healthy growth in the cooperative movement +is continuing. Cooperative associations reporting to the Department of +Agriculture at the end of 1925 had on their membership rolls a total of +2,700,000 producers. Their total business in 1925 amounted to approximately +$2,400,000,000, compared with $635,800,000 in 1915. Legislative action to +assist cooperative associations and supplement their efforts was passed at +the last session of Congress. Important credit measures were also provided +by Congress in 1923 which have been of inestimable value to the cooperative +associations. Although the Federal credit agencies have served agriculture +well, I think it may be possible to broaden and strengthen the service of +these institutions. + +Attention is again directed to the surplus problem of agriculture by the +present cotton situation. Surpluses often affect prices of various farm +commodities in a disastrous manner, and the problem urgently demand?, a +solution. Discussions both in and out of Congress during the past few years +have given us a better understanding of the subject, and it is my hope that +out of the various proposals made the basis will be found for a sound and +effective solution upon which agreement can be reached. In my opinion +cooperative marketing associations will be important aids to the ultimate +solution of the problem. It may well be, however, that additional measures +will be needed to supplement their efforts. I believe all will agree that +such measures should not conflict with the best interests of the +cooperatives, but rather assist and strengthen them. In working out this +problem to any sound conclusion it is necessary to avoid putting the +Government into the business of production or marketing or attempting to +enact legislation for the purpose of price fixing. The farmer does not +favor any attempted remedies that partake of these elements. He has a +sincere and candid desire for assistance. If matched by an equally sincere +and candid consideration of the different remedies proposed ' a sound +measure of relief ought to result. It is unfortunate that no general +agreement has been reached by the various agricultural interests upon any +of the proposed remedies. Out of the discussion of various proposals which +can be had before the Committees of Agriculture some measure ought to be +perfected which would be generally satisfactory. + +Due to the emergency arising from a heavy tropical storm in southern +Florida, I authorized the Secretary of Agriculture to use certain funds in +anticipation of legislation to enable the farmers in that region to plant +their crops. The department will present a bill ratifying the loans which +were made for this purpose. + +Federal legislation has been adopted authorizing the cooperation of the +Government with States and private owners in the protection of forest lands +from fire. This preventive measure is of such great importance that I have +recommended for it an increased appropriation. + +Another preventive measure of great economic and sanitary importance is the +eradication of tuberculosis in cattle. Active work is now in progress in +one-fourth of the counties of the United States to secure this result. Over +12,000,000 cattle have been under treatment, and the average degree of +infection has fallen from 4.9 per cent to 2.8 per cent. he Federal +Government is making substantial expenditures for this purpose. + +Serious damage is threatened to the corn crop by the European corn borer. +Since 1917 it has spread from eastern New England westward into Indiana and +now covers about 100,000 square miles. It is one of the most formidable +pests because it spreads rapidly and is exceedingly difficult of control. +It has assumed a menace that is of national magnitude and warrants the +Federal Government in extending its cooperation to the State and local +agencies which are attempting to prevent its further spread and secure its +eradication. + +The whole question of agriculture needs most careful consideration. In the +past few years the Government has given this subject more attention than +any other and has held more consultations in relation to it than on any +other subject. While the Government is not to be blamed for failure to +perform the impossible, the agricultural regions are entitled to know that +they have its constant solicitude and sympathy. Many of the farmers are +burdened with debts and taxes which they are unable to carry. We are +expending in this country many millions of dollars each year to increase +farm production. We ought now to put more emphasis on the question of farm +marketing. If a sound solution of a permanent nature can be found for this +problem, the Congress ought not to hesitate to adopt it. + +DEVELOPMENT OF WATER RESOURCES + +In previous messages I have referred to the national importance of the +proper development of our water resources. The great projects of extension +of the Mississippi system, the protection an development of the lower +Colorado River, are before Congress, and I have previously commented upon +them. I favor the necessary legislation to expedite these projects. +Engineering studies are being made for connecting the Great Lakes with the +North Atlantic either through an all-American canal or by way of the St. +Lawrence River. These reports will undoubtedly be before the Congress +during its present session. It is unnecessary to dwell upon the great +importance of such a waterway not only to our mid-continental basin but to +the commerce and development of practically the whole Nation. Our river and +harbor improvement should be continued in accordance with the present +policy. Expenditure of this character is compatible with economy; it is in +the nature of capital investment. Work should proceed on the basic trunk +lines if this work is to be a success. If the country will be content to be +moderate and patient and permit improvements to be made where they will do +the greatest general good, rather than insisting on expenditures at this +time on secondary projects, our internal Waterways can be made a success. +If proposes legislation results in a gross manifestation of local +jealousies and selfishness, this program can not be carried out. Ultimately +we can take care of extensions, but our first effort should be confined to +the main arteries. + +Our inland commerce has been put to great inconvenience and expense by +reason of the lowering of the water level of the Great Lakes. This is an +international problem on which competent engineers are making reports. Out +of their study it is expected that a feasible method will be developed for +raising the level to provide relief for our commerce and supply water for +drainage. Whenever a practical plan is presented it ought to be speedily +adopted. RECLAMATION + +It is increasingly evident that the Federal Government must in the future +take a leading part in the impounding of water for conservation with +incidental power for the development of the irrigable lands of the and +region. The unused waters of the West are found mainly in large rivers. +Works to store and distribute these have such magnitude and cost that they +are not attractive to private enterprise. Water is the irreplaceable +natural resource. Its precipitation can not be increased. Its storage on +the higher reaches of streams, to meet growing needs, to be used repeatedly +as it flows toward the seas, is a practical and prudent business policy. + +The United States promises to follow the course of older irrigation +countries, where recent important irrigation developments have been carried +out as national undertakings. It is gratifying, therefore, that conditions +on Federal reclamation projects have become satisfactory. The gross value +of crop,, grown with water from project works increased from $110,000,000 +in 1924 to $131,000,000 in 1925. The adjustments made last year by Congress +relieved irrigators from paying construction costs on unprofitable land, +and by so doing inspired new hope and confidence in ability to meet the +payments required. Construction payments by water users last year were the +largest in the history of the bureau. + +The anticipated reclamation fund will be fully absorbed for a number of +years in the completion of old projects and the construction of projects +inaugurated in the past three years. We should, however, continue to +investigate and study the possibilities of a carefully planned development +of promising projects, logically of governmental concern because of their +physical magnitude, immense cost, and the interstate and international +problems involved. Only in this way may we be fully prepared to meet +intelligently the needs of our fast-growing population in the years to +come. TRANSPORTATION + +It would be difficult to conceive of any modern activity which contributes +more to the necessities and conveniences of life than transportation. +Without it our present agricultural production and practically all of our +commerce would ?be completely prostrated. One of the large contributing +causes to the present highly satisfactory state of our economic condition +is the prompt and dependable service, surpassing all our previous records, +rendered by the railroads. This power has been fostered by the spirit of +cooperation between Federal and State regulatory commissions. To render +this service more efficient and effective and to promote a more scientific +regulation, the process of valuing railroad properties should be simplified +and the primary valuations should be completed as rapidly as possible. The +problem of rate reduction would be much simplified by a process of railroad +consolidations. This principle has already been adopted as Federal law. +Experience has shown that a more effective method must be provided. Studies +have already been made and legislation introduced seeking to promote this +end. It would be of great advantage if it could be taken up at once and +speedily enacted. The railroad systems of the country and the convenience +of all the people are waiting on this important decision. + +MERCHANT MARINE + +It is axiomatic that no agricultural and industrial country can get the +full benefit of its own advantages without a merchant marine. We have been +proceeding under the act of Congress that contemplates the establishment of +trade routes to be ultimately transferred to private ownership and +operation. Due to temporary conditions abroad and at home we have a large +demand just now for certain types of freight vessels. Some suggestion has +been made for new construction. I do not feel that we are yet warranted in +entering, that field. Such ships as we might build could not be sold after +they are launched for anywhere near what they would cost. We have expended +over $250,000,000 out of the public Treasury in recent years to make up the +losses of operation, not counting the depreciation or any cost whatever of +our capital investment. The great need of our merchant marine is not for +more ships but for more freight. + +Our merchants are altogether too indifferent about using American ships for +the transportation of goods which they send abroad or bring home. Some of +our vessels necessarily need repairs, which should be made. I do not +believe that the operation of our fleet is as economical and efficient as +it could be made if placed under a single responsible head, leaving the +Shipping Board free to deal with general matters of policy and regulation. + +RADIO LEGISLATION + +The Department of Commerce has for some years urgently presented the +necessity for further legislation in order to protect radio listeners from +interference between broadcasting stations and to carry out other +regulatory functions. Both branches of Congress at the last session passed +enactments intended to effect such regulation, but the two bills yet remain +to be brought into agreement and final passage. + +Due to decisions of the courts, the authority of the department under the +law of 1912 has broken down; many more stations have been operating than +can be accommodated within the limited number of wave lengths available; +further stations are in course of construction; many stations have departed +from the scheme of allocation set down by the department, and the whole +service of this most important public function has drifted into such chaos +as seems likely, if not remedied, to destroy its great value. I most +urgently recommend that this legislation should be speedily enacted. + +I do not believe it is desirable to set tip further independent agencies in +the Government. Rather I believe it advisable to entrust the important +functions of deciding who shall exercise the privilege of radio +transmission and under what conditions, the assigning of wave lengths and +determination of power, to a board to be assembled whenever action on such +questions becomes necessary. There should be right of appeal to the courts +from the decisions of such board. The administration of the decisions of +the board and the other features of regulation and promotion of radio in +the public interest, together with scientific research, should remain in +the Department of Commerce. Such an arrangement makes for more expert, more +efficient, and more economical administration that an independent agency or +board, whose duties, after initial stages, require but little attention, in +which administrative functions are confused with semijudicial functions and +from which of necessity there must be greatly increased personnel and +expenditure. + +THE WAGE EARNER + +The great body of our people are made up of wage earners. Several hundred +thousands of them are on the pay rolls of the United States Government. +Their condition very largely is fixed by legislation. We have recently +provided increases in compensation under a method of reclassification and +given them the advantage of a liberal retirement system as a support for +their declining years. Most of them are under the merit system, which is a +guaranty of + +their intelligence, and the efficiency of their service is a demonstration +of their loyalty. The Federal Government should continue to set a good +example for all other employers. + +In the industries the condition of the wage earner has steadily improved. +The 12-hour day is almost entirely unknown. Skilled labor is well +compensated. But there are unfortunately a multitude of workers who have +not yet come to share in the general prosperity of the Nation. Both the +public authorities and private enterprise should be solicitous to advance +the welfare of this class. The Federal Government has been seeking to +secure this end through a protective tariff, through restrictive +immigration, through requiring safety devices for the prevention of +accidents, through the granting of workman's compensation, through civilian +vocational rehabilitation and education, through employment information +bureaus, and through such humanitarian relief as was provided in the +maternity and infancy legislation. It is a satisfaction to report that a +more general condition of contentment exists among wage earners and the +country is more free from labor disputes than it has been for years. While +restrictive immigration has been adopted in part for the benefit of the +wage earner, and in its entirety for the benefit of the country, it ought +not to cause a needless separation of families and dependents from their +natural source of support contrary to the dictates of humanity. + +BITUMINOUS COAL + +No progress appears to have been made within large areas of the bituminous +coal industry toward creation of voluntary machinery by which greater +assurance can be given to the public of peaceful adjustment of wage +difficulties such as has been accomplished in the anthracite industry. This +bituminous industry is one of primary necessity and bears a great +responsibility to the Nation for continuity of supplies. As the wage +agreements in the unionized section of the industry expire on April 1 next, +and as conflicts may result which may imperil public interest, and have for +many years often called for action of the Executive in protection of the +public, I again recommend the passage of such legislation as will assist +the Executive in dealing with such emergencies through a special temporary +board of conciliation and mediation and through administrative agencies for +the purpose of distribution of coal and protection of the consumers of coal +from profiteering. At present the Executive is not only without authority +to act but is actually prohibited by law from making any expenditure to +meet the emergency of a coal famine. JUDICIARY + +The Federal courts hold a high position in the administration of justice in +the world. While individual judicial officers have sometimes been subjected +to just criticism, the courts as a whole have maintained an exceedingly +high standard. The Congress may well consider the question of supplying +fair salaries and conferring upon the Supreme Court the same rule-making +power on the law side of the district courts that they have always +possessed on the equity side. A bill is also pending providing for +retirement after a certain number of years of service, although they have +not been consecutive, which should have your favorable consideration. These +faithful servants of the Government are about the last that remain to be +provided for in the postwar readjustments. BANKING + +There has been pending in Congress for nearly three years banking +legislation to clarify the national bank act and reasonably to increase the +powers of the national banks. I believe that within the limitation of sound +banking principles Congress should now and for the future place the +national banks upon a fair equality with their competitors, the State +banks, and I trust that means may be found so that the differences on +branch-banking legislation between the Senate and the House of +Representatives may be settled along sound lines and the legislation +promptly enacted. + +It would be difficult to overestimate the service which the Federal reserve +system has already rendered to the country. It is necessary only to recall +the chaotic condition of our banking organization at the time the Federal +reserve system was put into operation. The old system consisted of a vast +number of independent banking units, with scattered bank reserves which +never could be mobilized in times of greatest need. In spite of vast +banking resources, there was no coordination of reserves or any credit +elasticity. As a consequence, a strain was felt even during crop-moving +periods and when it was necessary to meet other seasonal and regularly +recurring needs. + +The Federal reserve system is not a panacea for all economic or financial +ills. It can not prevent depression in certain industries which are +experiencing overexpansion of production or contraction of their markets. +Its business is to furnish adequate credit and currency facilities. This it +has succeeded in doing, both during the war and in the more difficult +period of deflation and readjustment which followed. It enables us to look +to the future with confidence and to make plans far ahead, based on the +belief that the Federal reserve system will exercise a steadying influence +on credit conditions and thereby prevent tiny sudden or severe reactions +from the period of prosperity which we are now enjoying. In order that +these plans may go forward, action should be taken at the present session +on the question of renewing the banks' charters and thereby insuring a +continuation of the policies and present usefulness of the Federal reserve +system. + +FEDERAL REGULATION + +I am in favor of reducing, rather than expanding, Government bureaus which +seek to regulate and control the business activities of the people. +Everyone is aware that abuses exist and will exist so long as we are +limited by human imperfections. Unfortunately, human nature can not be +changed by an act of the legislature. When practically the sole remedy for +many evils lies in the necessity of the people looking out for themselves +and reforming their own abuses, they will find that they are relying on a +false security if the Government assumes to hold out the promise that it is +looking out for them and providing reforms for them. This principle is +preeminently applicable to the National Government. It is too much assumed +that because an abuse exists it is the business of the National Government +to provide a remedy. The presumption should be that it is the business of +local and State governments. Such national action results in encroaching +upon the salutary independence of the States and by undertaking to +supersede their natural authority fills the land with bureaus and +departments which are undertaking to do what it is impossible for them to +accomplish and brings our whole system of government into disrespect and +disfavor. We ought to maintain high standards. We ought to punish +wrongdoing. Society has not only the privilege but the absolute duty of +protecting itself and its individuals. But we can not accomplish this end +by adopting a wrong method. Permanent success lies in local, rather than +national action. Unless the locality rises to its own requirements, there +is an almost irresistible impulse for the National Government to intervene. +The States and the Nation should both realize that such action is to be +adopted only as a last resort. + +THE NEGRO + +The social well-being of our country requires our constant effort for the +amelioration of race prejudice and the extension to all elements of equal +opportunity and equal protection under the laws which are guaranteed by +the. Constitution. The Federal Government especially is charged with this +obligation in behalf of the colored people of the Nation. Not only their +remarkable progress, their devotion and their loyalty, but, our duty to +ourselves under our claim that we are an enlightened people requires us to +use all our power to protect them from the crime of lynching. Although +violence of this kind has very much decreased, while any of it remains we +can not justify neglecting to make every effort to eradicate it by law. + +The education of the colored race under Government encouragement is +proceeding successfully and ought to have continuing support. An increasing +need exists for properly educated and trained medical skill to be devoted +to the service of this race. + +INSULAR POSSESSIONS + +This Government holds in sacred trusteeship islands which it has acquired +in the East and West Indies. In all of them the people are more prosperous +than at any previous time. A system of good roads, education, and general +development is in progress. The people are better governed than ever before +and generally content. + +In the Philippine Islands Maj. Gen. Leonard Wood has been Governor General +for five years and has administered his office with tact and ability +greatly to the success of the Filipino people. These are a proud and +sensitive race, who are making such progress with our cooperation that we +can view the results of this experiment with great satisfaction. As we are +attempting to assist this race toward self-government, we should look upon +their wishes with great respect, granting their requests immediately when +they are right, yet maintaining a frank firmness in refusing when they are +wrong. We shall measure their progress in no small part by their acceptance +of the terms of the organic law under which the islands are governed and +their faithful observance of its provisions. Need exists for clarifying the +duties of the auditor and declaring them to be what everyone had supposed +they were. We have placed our own expenditures under the supervision of the +Comptroller General. It is not likely that the expenditures in the +Philippine Islands need less supervision than our own. The Governor General +is hampered in his selection of subordinates by the necessity of securing a +confirmation, which has oftentimes driven him to the expediency of using +Army officers in work for which civilian experts would be much better +fitted. Means should be provided for this and such other purposes as he may +require out of the revenue which this Government now turns back to the +Philippine treasury. + +In order that these possessions might stiffer no seeming neglect, I have +recently sent Col. Carmi A Thompson to the islands to make a survey in +cooperation with the Governor General to suggest what might be done to +improve conditions. Later, I may make a more extended report including +recommendations. The economic development of the islands is very important. +They ought not to be turned back to the people until they are both +politically fitted for self-government and economically independent. Large +areas are adaptable to the production of rubber. No one contemplates any +time in the future either under the present or a more independent form of +government when we should not assume some responsibility for their defense. +For their economic advantage, for the employment of their people, and as a +contribution to our power of defense which could not be carried on without +rubber, I believe this industry should be encouraged. It is especially +adapted to the Filipino people themselves, who might cultivate it +individually on a small acreage. It could be carried on extensively by +American capital in a way to furnish employment at good wages. I am opposed +to the promotion of any policy that does not provide for absolute freedom +on the part of the wage earners and do not think we should undertake to +give power for large holdings of land in the islands against the opposition +of the people of the locality. Any development of the islands must be +solely with the first object of benefiting the people of the islands. At an +early day, these possessions should be taken out from under all military +control and administered entirely on the civil side of government. + +NATIONAL DEFENSE + +Our policy of national defense is not one of making war, but of insuring +peace. The land and sea force of America, both in its domestic and foreign +implications, is distinctly a peace force. It is an arm of the police power +to guarantee order and the execution of the law at home and security to our +citizens abroad. No self-respecting nation would neglect to provide an army +and navy proportionate to its population, the extent of its territory, and +the dignity of the place which it occupies in the world. When it is +considered that no navy in the world, with one exception, approaches ours +and none surpasses it, that our Regular Army of about 115,000 men is the +equal of any other like number of troops, that our entire permanent and +reserve land and sea force trained and training consists of a personnel of +about 610,000, and that our annual appropriations are about $680,000,000 a +year, expended under the direction of an exceedingly competent staff, it +can not be said that our country is neglecting its national defense. It is +true that a cult of disparagement exists, but that candid examination made +by the Congress through its various committees has always reassured the +country and demonstrated that it is maintaining the most adequate defensive +forces in these present years that it has ever supported in time of peace. + +This general policy should be kept in effect. Here and there temporary +changes may be made in personnel to meet requirements in other directions. +Attention should be given to submarines, cruisers, and air forces. +Particular points may need strengthening, but as a whole our military power +is sufficient. + +The one weak place in the whole line is our still stupendous war debt. In +any modern campaign the dollars are the shock troops. With a depleted +treasury in the rear, no army can maintain itself in the field. A country +loaded with debt is a country devoid of the first line of defense. Economy +is the handmaid of preparedness. If we wish to be able to defend ourselves +to the full extent of our power in the future, we shall discharge as soon +as possible the financial burden of the last war. Otherwise we would face a +crisis with a part of our capital resources already expended. + +The amount and kind of our military equipment is preeminently a question +for the decision of the Congress, after giving due consideration to the +advice of military experts and the available public revenue. Nothing is +more laudable than the cooperation of the agricultural and industrial +resources of the country for the purpose of supplying the needs of national +defense. In time of peril the people employed in these interests +volunteered in a most self-sacrificing way, often at the nominal charge of +a dollar a year. But the Army and Navy are not supported for the benefit of +supply concerns; supply concerns are supported for the benefit of the Army +and Navy. The distribution of orders on what is needed from different +concerns for the purpose of keeping up equipment and organization is +perfectly justified, but any attempt to prevail upon the Government to +purchase beyond its needs ought not to be tolerated. It is eminently fair +that those who deal with the Government should do so at a reasonable +profit. However, public money is expended not that some one may profit by +it, but in order to serve a public purpose. + +While our policy of national defense will proceed in order that we may be +independent and self-sufficient, I am opposed to engaging in any attempt at +competitive armaments. No matter how much or how little some other country +may feel constrained to provide, we can well afford to set the example, not +of being dictated to by others, but of adopting our own standards. We are +strong enough to pursue that method, which will be a most wholesome model +for the rest of the world. We are eminently peaceful, but we are by no +means weak. While we submit our differences with others, not to the +adjudication of force, but of reason, it is not because we are unable to +defend our rights. While we are doing our best to eliminate all resort to +war for the purpose of settling disputes, we can not but remember that the +peace we now enjoy had to be won by the sword and that if the rights of our +country are to be defended we can not rely for that purpose upon anyone but +ourselves. We can not shirk the responsibility, which is the first +requisite of all government, of preserving its own integrity and +maintaining the rights of its own citizens. It is only in accordance with +these principles that we can establish any lasting foundations for an +honorable and permanent peace. + +It is for these reasons that our country, like any other country, proposes +to provide itself with an army and navy supported by a merchant marine. Yet +these are not for competition with any other power. For years we have +besought nations to disarm. We have recently expressed our willingness at +Geneva to enter into treaties for the limitation of all types of warships +according to the ratio adopted at the Washington Conference. This offer is +still pending. While we are and shall continue to be armed it is not as a +menace, but rather a common assurance of tranquility to all the peaceloving +people of the world. For us to do any less would be to disregard our +obligations, evade our responsibilities, and jeopardize our national honor. +VETERANS + +This country, not only because it is bound by honor but because of the +satisfaction derived from it, has always lavished its bounty upon its +veterans. For years a service pension has been bestowed upon the Grand Army +on reaching a certain age. Like provision has been made for the survivors +of the Spanish War. A liberal future compensation has been granted to all +the veterans of the World War. But it is in the case of the, disabled and +the dependents that the Government exhibits its greatest solicitude. This +work is being well administered by the Veterans' Bureau. The main +unfinished feature is that of hospitalization. This requirement is being +rapidly met. Various veteran bodies will present to you recommendations +which should have your careful consideration. At the last session we +increased our annual expenditure for pensions and relief on account of the +veterans of three wars. While I approve of proper relief for all suffering, +I do not favor any further extension of our pension system at this time. + +ALIEN PROPERTY + +We still have in the possession of the Government the alien property. It +has always been the policy of America to hold that private enemy property +should not be confiscated in time of war. This principle we have +scrupulously observed. As this property is security for the claims of our +citizens and our Government, we can not relinquish it without adequate +provision for their reimbursement. Legislation for the return of this +property, accompanied by suitable provisions for the liquidation of the +claims of our citizens and our Treasury, should be adopted. If our +Government releases to foreigners the security which it holds for +Americans, it must at the same time provide satisfactory safeguards for +meeting American claims. PROHIBITION + +The duly authorized public authorities of this country have made +prohibition the law of the land. Acting under the Constitution the Congress +and the legislatures of practically all the, States have adopted +legislation for its enforcement. Some abuses have arisen which require +reform. Under the law the National Government has entrusted to the Treasury +Department the especial duty of regulation and enforcement. Such +supplementary legislation as it requires to meet existing conditions should +be carefully and speedily enacted. Failure to support the Constitution and +observe the law ought not to be tolerated by public opinion. Especially +those in public places, who have taken their oath to support the +Constitution, ought to be most scrupulous in its observance. Officers of +the Department of Justice throughout the country should be vigilant in +enforcing the law, but local authorities, which had always been mainly +responsible for the enforcement of law in relation to intoxicating liquor, +ought not to seek evasion by attempting to shift the burden wholly upon the +Federal agencies. Under the Constitution the States are jointly charged +with the Nation in providing for the enforcement of the prohibition +amendment. Some people do not like the amendment, some do not like other +parts of the Constitution, some do not like any of it. Those who entertain +such sentiments have a perfect right to seek through legal methods for a +change. But for any of our inhabitants to observe such parts of the +Constitution as they like, while disregarding others, is a doctrine that +would break down all protection of life and property and destroy the +American system of ordered liberty. + +FOREIGN RELATIONS + +The foreign policy of this Government is well known. It is one of peace +based on that mutual respect that arises from mutual regard for +international rights arid the discharge of international obligations. It is +our purpose to promote understanding and good will between ourselves and +all other people. The American people are altogether lacking in an +appreciation of the tremendous good fortune that surrounds their +international position. We have no traditional enemies. We are not +embarrassed over any disputed territory. We have no possessions that are +coveted by others; they have none that are coveted by us. Our borders are +unfortified. We fear no one; no one fears us. All the world knows that the +whole extent of our influence is against war and in favor of peace, against +the use of force and in favor of negotiation, arbitration, and adjudication +as a method of adjusting international differences. We look with disfavor +upon all aggressive warfare. We are strong enough so that no one can charge +us with weakness if we are slow to anger. Our place is sufficiently +established so that we need not be sensitive over trifles. Our resources, +are large enough so that we can afford to be generous. At the same time we +are a nation among nations and recognize a responsibility not only to +ourselves, but in the interests of a stable and enlightened civilization, +to protect and defend the international rights of our Government and our +citizens. + +It is because of our historical detachment and the generations of +comparative indifference toward it by other nations that our public is +inclined to consider altogether too seriously the reports that we are +criticized abroad. We never had a larger foreign trade than at the present +time. Our good offices were never more sought and the necessity for our +assistance and cooperation was never more universally declared in any time +of peace. We know that the sentiments which we entertain toward all other +nations are those of the most sincere friendship and good will and of all +unbounded desire to help, which we are perfectly willing to have judged by +their fruits. In our efforts to adjust our international obligations we +have met with a response which, when everything is considered, I believe +history will record as a most remarkable and gratifying demonstration of +the sanctity with which civilized nations undertake to discharge their +mutual obligations. Debt settlements have been negotiated with practically +all of those who owed us and all finally adjusted but two, which are, in +process of ratification. When we consider the real sacrifice that will be +necessary on the part of other nations, considering all their +circumstances, to meet their agreed payments, we ought to hold them in +increased admiration and respect. It is true that we have extended to them +very generous treatment, but it is also true that they have agreed to repay +its all that we loaned to them and some interest. + +A special conference on the Chinese customs tariff provided for by the +treaty between the nine powers relating to the Chinese customs tariff +signed at Washington on February 6, 1922, was called by the Chinese +Government to meet at Peking, on October 26, 1925. We participated in this +conference through fully empowered delegates and, with good will, +endeavored to cooperate with the other participating powers with a view to +putting into effect promises made to China at the Washington conference, +and considering any reasonable proposal that might be made by the Chinese +Government for the revision of the treaties on the subject of China's +tariff. With these aims in view the American delegation at the outset of +the conference proposed to put into effect the surtaxes provided for by the +Washington treaty and to proceed immediately to the negotiation of a +treaty, which, among other things, was to make provision for the abolition +of taxes collected on goods in transit, remove the tariff restrictions in +existing treaties, and put into effect the national tariff law of China. + +Early in April of the present year the central Chinese Government was +ousted from power by opposing warring factions. It became impossible under +the circumstances to continue the negotiations. Finally, on July 3, the +delegates of the foreign powers, including those of the United States, +issued a statement expressing their unanimous and earnest desire to proceed +with the work of the conference at the earliest possible moment when the +delegates of the Chinese Government are in a position to resume discussions +with the foreign delegates of the problems before the conference. We are +prepared to resume the negotiations thus interrupted whenever a Government +representing the Chinese people and acting on their behalf presents itself. +The fact that constant warfare between contending Chinese factions has +rendered it impossible to bring these negotiations to a successful +conclusion is a matter of deep regret. Throughout these conflicts we have +maintained a position of the most careful neutrality. Our naval vessels in +Asiatic waters, pursuant to treaty rights, have been used only for the +protection of American citizens. + +Silas H. Strawn, Esq., was sent to China as American commissioner to +cooperate with commissioners of the other powers in the establishment of a +commission to inquire into the present practice of extraterritorial +jurisdiction in China, with a view to reporting to the Governments of the +several powers their findings of fact in regard to these matters. The +commission commenced its work in January, 1926, and agreed upon a joint +report which was signed on September 16, 1926. The commission's report has +been received and is being studied with a view to determining our future +policy in regard to the question of extraterritorial privileges under +treaties between the United States and China. + +The Preparatory Commission for the Disarmament Conference met at Geneva on +May 18 and its work has been proceeding almost continuously since that +date. It would be premature to attempt to form a judgment as to the +progress that has been made. The commission has had before it a +comprehensive list of questions touching upon all aspects of the question +of the limitation of armament. In the commission's discussions many +differences of opinion have developed. However, I am hopeful that at least +some measure of agreement will be reached as the discussions continue. The +American representation on the commission has consistently tried to be +helpful, and has kept before it the practical objective to which the +commission is working, namely, actual agreements for the limitation of +armaments. Our representatives will continue their work in that direction. + +One of the most encouraging features of the commission's work thus far has +been the agreement in principle among the naval experts of a majority of +the powers parties to the Washington treaty limiting naval armament upon +methods and standards for the comparison and further limitation of naval +armament. It is needless to say that at the proper time I shall be prepared +to proceed along practical lines to the conclusion of agreements carrying +further the work begun at the Washington Conference in 1921. + +DEPARTMENT REPORTS + +Many important subjects which it is impossible even to mention in the short +space of an annual message you will find fully discussed in the +departmental reports. A failure to include them here is not to be taken as +indicating any lack of interest, but only a disinclination to state +inadequately what has been much better done in other documents. + +THE CAPITAL CITY + +We are embarking on an ambitious building program for the city of +Washington. The Memorial Bridge is under way with all that it holds for use +and beauty. New buildings are soon contemplated. This program should +represent the best that exists in the art and science of architecture. Into +these structures which must be considered as of a permanent nature ought to +go the aspirations of the Nation, its ideals expressed in forms of beauty. +If our country wishes to compete with others, let it not be in the support +of armaments but in the making of a beautiful capital city. Let it express +the soul of America. Whenever an American is at the seat of his Government, +however traveled and cultured he may be, he ought to find a city of stately +proportion, symmetrically laid out and adorned with the best that there is +in architecture, which would arouse his imagination and stir his patriotic +pride. In the coming years Washington should be not only the art center of +our own country but the art center of the world. Around it should center +all that is best in science, in learning, in letters, and in art. These are +the results that justify the creation of those national resources with +which we have been favored. + +AMERICAN IDEALS + +America is not and must not be a country without ideals. They are useless +if they are only visionary; they are only valuable if they are practical. A +nation can not dwell constantly on the mountain tops. It has to be +replenished and sustained through the ceaseless toil of the less inspiring +valleys. But its face ought always to be turned upward, its vision ought +always to be fixed on high. + +We need ideals that can be followed in daily life, that can be translated +into terms of the home. We can not expect to be relieved from toil, but we +do expect to divest it of degrading conditions. Work is honorable; it is +entitled to an honorable recompense. We must strive mightily, but having +striven there is a defect in our political and social system if we are not +in general rewarded with success. To relieve the land of the burdens that +came from the war, to release to the individual more of the fruits of his +own industry, to increase his earning capacity and decrease his hours of +labor, to enlarge the circle of his vision through good roads and better +transportation, to lace before him the opportunity for education both in +science and in art, to leave him free to receive the inspiration of +religion, all these are ideals which deliver him from the servitude of the +body and exalt him to the service of the soul. Through this emancipation +from the things that are material, we broaden our dominion over the things +that are spiritual. + +*** + +State of the Union Address +Calvin Coolidge +December 6, 1927 + +Members of the Congress: + +It is gratifying to report that for the fourth consecutive year the state +of the Union in general is good. We are at peace. The country as a whole +has had a prosperity never exceeded. Wages are at their highest range, +employment is plentiful. Some parts of agriculture and industry have +lagged; some localities have suffered from storm and flood. But such losses +have been absorbed without serious detriment to our great economic +structure. Stocks of goods are moderate and a wholesome caution is +prevalent. Rates of interest for industry, agriculture, and government have +been reduced. Savers and investors are providing capital for new +construction in industry and public works. The purchasing power of +agriculture has increased. If the people maintain that confidence which +they are entitled to have in themselves, in each other, and in America, a +comfortable prosperity will continue. + +CONSTRUCTIVE ECONOMY + +Without constructive economy in Government expenditures we should not now +be enjoying these results or these prospects. Because we are not now +physically at war, some people are disposed to forget that our war debt +still remains. The Nation must make financial sacrifices, accompanied by a +stern self-denial in public expenditures, until we have conquered the +disabilities of our public finance. While our obligation to veterans and +dependents is large and continuing, the heavier burden of the national debt +is being steadily eliminated. At the end of this fiscal year it will be +reduced from about $26,600,000,000 to about $17,975,000,000. Annual +interest, including war savings, will have been reduced from $1,055,000,000 +to $670,0001,000. The sacrifices of the people, the economy of the +Government, are showing remarkable results. They should be continued for +the purpose of relieving the Nation of the burden of interest and debt and +releasing revenue for internal improvements and national development. + +Not only the amount, but the rate, of Government interest has been reduced. +Callable bonds have been refunded and paid, so that during this year the +average rate of interest on the present public debt for the first time fell +below 4 per cent. Keeping the credit of the Nation high is a tremendously +profitable operation. + +TAX REDUCTION + +The immediate fruit of economy and the retirement of the public debt is tax +reduction. The annual saving in interest between 1925 and 1929 is +$212,000,000. Without this no bill to relieve the taxpayers would be worth +proposing. The three measures already enacted leave our Government revenues +where they are not oppressive. Exemptions, have been increased until +115,000,000 people make but 2,500,000 individual taxable returns, so that +further reduction should be mainly for the purpose of removing +inequalities. The Secretary of the Treasury has recommended a measure which +would give us a much better balanced system of taxation and without +oppression produce sufficient revenue. It has my complete support. + +Unforeseen contingencies requiring money are always arising. Our probable +surplus for June 30, 1929, is small. A slight depression in business would +greatly reduce our revenue because of our present method of taxation. The +people ought to take no selfish attitude of pressing for removing moderate +and fair taxes which might produce a deficit. We must keep our budget +balanced for each year. That is the corner stone of our national credit, +the trifling price we pay to command the lowest rate of interest of any +great power in the world. Any surplus can be applied to debt reduction, and +debt reduction is tax reduction. Under the present circumstances it would +be far better to leave the rates as they are than to enact a bill carrying +the peril of a deficit. This is not a problem to be approached in a narrow +or partisan spirit. All of those who participate in finding a reasonable +solution will be entitled to participate in any credit that accrues from it +without regard to party. The Congress has already demonstrated that tax +legislation can be removed from purely political consideration into the +realm of patriotic business principles. + +Any bill for tax reduction should be written by those who are responsible +for raising, managing, and expending the finances of the Government. If +special interests, too often selfish, always uninformed of the national +needs as a whole, with hired agents using their proposed beneficiaries as +engines of propaganda, are permitted to influence the withdrawal of their +property from taxation, we shall have a law that is unbalanced and unjust, +bad for business, bad for the country, probably resulting in a deficit, +with disastrous financial Consequences. The Constitution has given the +Members of the Congress sole authority to decide what tax measures shall be +presented for approval. While welcoming information from any quarter, the +Congress should continue to exercise its own judgment in a matter so vital +and important to all the interests of the country as taxation. + +NATIONAL DEFENSE + +Being a nation relying not on force, but on fair dealing and good will, to +maintain peace with others, we have provided a moderate military force in a +form adapted solely to defense. It should be continued with a very generous +supply of officers and with the present base of personnel, subject to +fluctuations which may be temporarily desirable. + +The five-year program for our air forces is in keeping with this same +policy and commensurate with the notable contributions of America to the +science of aeronautics. The provisions of the law lately enacted are being +executed as fast as the practical difficulties of an orderly and stable +development permit. + +While our Army is small, prudence requires that it should be kept in a high +state of efficiency and provided with such supplies as would permit of its +immediate expansion. The garrison ration has lately been increased. +Recommendations for an appropriation of $6,166,000 for new housing made to +the previous Congress failed to pass. While most of the Army is well +housed, some of it which is quartered in wartime training camps is becoming +poorly housed. In the past three years $12,533,000 have been appropriated +for reconstruction and repairs, and an authorization has been approved of +$22,301,000 for new housing, under which $8,070,000 has already been +appropriated. A law has also been passed, complying with the request of the +War Department, allocating funds received from the sale of buildings and +land for housing purposes. The work, however, is not completed, so that +other appropriations are being recommended. + +Our Navy is likewise a weapon of defense. We have a foreign commerce and +ocean lines of trade unsurpassed by any other country. We have outlying +territory in the two great oceans and long stretches of seacoast studded +with the richest cities in the world. We are responsible for the protection +of a large population and the greatest treasure ever bestowed upon any +people. We are charged with an international duty of defending the Panama +Canal. To meet these responsibilities we need a very substantial sea +armament. It needs aircraft development, which is being provided under the +five-year program. It needs submarines as soon as the department decides +upon the best type of construction. It needs airplane carriers and a +material addition to its force of cruisers. We can plan for the future and +begin a moderate building program. + +This country has put away the Old World policy of competitive armaments. It +can never be relieved of the responsibility of adequate national defense. +We have one treaty secured by an unprecedented attitude of generosity on +our part for a limitation in naval armament. After most careful +preparation, extending over months, we recently made every effort to secure +a three-power treaty to the same end. We were granted much cooperation by +Japan, but we were unable to come to an agreement with Great Britain. While +the results of the conference were of considerable value, they were mostly +of a negative character. We know now that no agreement can be reached which +will be inconsistent with a considerable building program on our part. We +are ready and willing to continue the preparatory investigations on the +general subject of limitation of armaments which have been started under +the auspices of the League of Nations. + +We have a considerable cruiser tonnage, but a part of it is obsolete. +Everyone knew that had a three-power agreement been reached it would have +left us with the necessity of continuing our building program. The failure +to agree should not cause us to build either more or less than we otherwise +should. Any future treaty of limitation will call on us for more ships. We +should enter on no competition. We should refrain from no needful program. +It should be made clear to all the world that lacking a definite agreement, +the attitude of any other country is not to be permitted to alter our own +policy. It should especially be demonstrated that propaganda will not cause +us to change our course. Where there is no treaty limitation, the size of +the Navy which America is to have will be solely for America to determine. +No outside influence should enlarge it or diminish it. But it should be +known to all that our military power holds no threat of aggrandizement. It +is a guaranty of peace and security at home, and when it goes abroad it is +an instrument for the protection of the legal rights of our citizens under +international law, a refuge in time of disorder, and always the servant of +world peace. Wherever our flag goes the rights of humanity increase. + +MERCHANT MARINE + +The United States Government fleet is transporting a large amount of +freight and reducing its drain on the Treasury. The Shipping Board is +constantly under pressure, to which it too often yields, to protect private +interests, rather than serve the public welfare. More attention should be +given to merchant ships as an auxiliary of the Navy. The possibility of +including their masters and crews in the Naval Reserve, with some +reasonable compensation, should be thoroughly explored as a method of +encouraging private operation of shipping. Public operation is not a +success. No investigation, of which I have caused several to be made, has +failed to report that it could not succeed or to recommend speedy transfer +to private ownership. Our exporters and importers are both indifferent +about using American ships. It should be our policy to keep our present +vessels in repair and dispose of them as rapidly as possible, rather than +undertake any new construction. Their operation is a burden on the National +Treasury, for which we are not receiving sufficient benefits. + +COMMERCIAL AVIATION + +A rapid growth is taking place in aeronautics. The Department of Commerce +has charge of the inspection and licensing system and the construction of +national airways. Almost 8,000 miles are already completed and about 4,000 +miles more contemplated. Nearly 4,400 miles are now equipped and over 3,000 +miles more will have lighting and emergency landing fields by next July. +Air mail contracts are expected to cover 24 of these lines. Daily airway +flying is nearly 15,000 miles and is expected to reach 25,000 miles early +next year. + +Flights for other purposes exceed 22,000 miles each day. Over 900 airports, +completed and uncompleted, have been laid out. The demand for aircraft has +greatly increased. The policy already adopted by the Congress is producing +the sound development of this coming industry. + +WESTERN HEMISPHERE AIR MAIL + +Private enterprise is showing much interest in opening up aviation service +to Mexico and Central and South America. We are particularly solicitous to +have the United States take a leading part in this development. It is +understood that the governments of our sister countries would be willing to +cooperate. Their physical features, the undeveloped state of their +transportation, make an air service especially adaptable to their usage. +The Post Office Department should be granted power to make liberal +long-term contracts for carrying our mail, and authority should be given to +the Army and the Navy to detail aviators and planes to cooperate with +private enterprise in establishing such mail service with the consent of +the countries concerned. A committee of the Cabinet will later present a +report on this subject. + +GOOD ROADS + +The importance and benefit of good roads is more and more coming to be +appreciated. The National Government has been making liberal contributions +to encourage their construction. The results and benefits have been very +gratifying. National participation, however, should be confined to +trunk-line systems. The national tax on automobiles is now nearly +sufficient to meet this outlay. This tax is very small, and on low-priced +cars is not more than $2 or $3 each year. + +While the advantage of having good roads is very large, the desire for +improved highways is not limited to our own country. It should and does +include all the Western Hemisphere. The principal points in Canada are +already accessible. We ought to lend our encouragement in any way we can +for more good roads to all the principal points in this hemisphere south of +the Rio Grande. It has been our practice to supply these countries with +military and naval advisers, when they have requested it, to assist them in +national defense. The arts of peace are even more important to them and to +us. Authority should be given by law to provide them at their request with +engineering advisers for the construction of roads and bridges. In some of +these countries already wonderful progress is being made in road building, +but the engineering features are often very exacting and the financing +difficult. Private interests should look with favor on all reasonable loans +sought by these countries to open such main lines of travel. + +This general subject has been promoted by the Pan American Congress of +Highways, which will convene again at Rio de Janeiro in July, 1928. It is +desirable that the Congress should provide for the appointment of delegates +to represent the Government of the United States. + +CUBAN PARCEL POST + +We have a temporary parcel-post convention with Cuba. The advantage of it +is all on our side. During 1926 we shipped twelve times as many parcels, +weighing twenty-four times as much, as we received. This convention was +made on the understanding that we would repeal an old law prohibiting the +importation of cigars and cigarettes in quantities less than 3,000 enacted +in 1866 to discourage smuggling, for which it has long been unnecessary. +This law unjustly discriminates against an important industry of Cuba. Its +repeal has been recommended by the Treasury and Post Office Departments. +Unless this is done our merchants and railroads will find themselves +deprived of this large parcel-post business after the 1st of next March, +the date of the expiration of the convention, which has been extended upon +the specific understanding that it would expire at that time unless this +legislation was enacted. We purchase large quantities of tobacco made in +Cuba. It is not probable that our purchases would be any larger if this law +was repealed, while it would be an advantage to many other industries in +the United States. + +INSULAR POSSESSIONS + +Conditions in the Philippine Islands have been steadily improved. +Contentment and good order prevail. Roads, irrigation works, harbor +improvements, and public buildings are being constructed. Public education +and sanitation have been advanced. The Government is in a sound financial +condition. These immediate results were especially due to the +administration of Gov. Gen. Leonard Wood. The six years of his governorship +marked a distinct improvement in the islands and rank as one of the +outstanding accomplishments of this distinguished man. His death is a loss +to the Nation and the islands. + +Greater progress could be made, more efficiency could be put. into +administration, if the Congress would undertake to expend, through its +appropriating power, all or a part of the customs revenues which are now +turned over to the Philippine treasury. The powers of the auditor of the +islands also need revision and clarification. The government of the islands +is about 98 per cent in the hands of the Filipinos. An extension of the +policy of self-government will be hastened by the demonstration on their +part of their desire and their ability to carry out cordially and +efficiently the provisions of the organic law enacted by the Congress for +the government of the islands. It would be well for a committee of the +Congress to visit the islands every two years. + +A fair degree of progress is being made in Porto Rico. Its agricultural +products are increasing; its treasury position, which has given much +concern, shows improvement. I am advised by the governor that educational +facilities are still lacking. Roads are being constructed, which he +represents are the first requisite for building schoolhouses. The loyalty +of the island to the United States is exceedingly gratifying. A memorial +will be presented to you requesting authority to have the governor elected +by the people of Porto Rico. This was never done in the case of our own +Territories. It is admitted that education outside of the towns is as yet +very deficient. Until it has progressed further the efficiency of the +government and the happiness of the people may need the guiding hand of an +appointed governor. As it is not contemplated that any change should be +made immediately, the general subject may well have the thoughtful study of +the Congress. + +PANAMA CANAL + +The number of commercial ships passing through the Panama Canal has +increased from 3,967 in 1923 to 5,475 in 1927. The total amount of tolls +turned into the Treasury is over $166,000,000, while all the operations of +the canal have yielded a surplus of about $80,000,000. In order to provide +additional storage of water and give some control over the floods of the +Chagres River, it is proposed to erect a dam to cost about $12,000,000 at +Alhajuela. It will take some five years to complete this work. AGRICULTURE + +The past year has seen a marked improvement in the general condition of +agriculture. Production is better balanced and without acute shortage or +heavy surplus. Costs have been reduced and the average output of the worker +increased. The level of farm prices has risen while others have fallen, so +that the purchasing power of the farmer is approaching a normal figure. The +individual farmer is entitled to great credit for the progress made since +1921. He has adjusted his production and through cooperative organizations +and other methods improved his marketing. He is using authenticated facts +and employing sound methods which other industries are obliged to use to +secure stability and prosperity. The old-fashioned haphazard system is +being abandoned, economics are being applied to ascertain the best adapted +unit of land, diversification is being promoted, and scientific methods are +being used in production, and business principles in marketing. + +Agriculture has not fully recovered from postwar depression. The fact is +that economic progress never marches forward in a straight line. It goes in +waves. One part goes ahead, while another halts and another recedes. +Everybody wishes agriculture to prosper. Any sound and workable proposal to +help the farmer will have the earnest support of the Government. Their +interests are not all identical. Legislation should assist as many +producers in as many regions as possible. It should be the aim to assist +the farmer to work out his own salvation socially and economically. No plan +will be of any permanent value to him which does not leave him standing on +his own foundation. + +In the past the Government has spent vast sums to bring land under +cultivation. lt. is apparent that this has reached temporarily the +saturation point. We have had a surplus of production and a poor market for +land, which has only lately shown signs of improvement. The main problem +which is presented for solution is one of dealing with a surplus of +production. It is useless to propose a temporary expedient. What is needed +is permanency and stability. Government price fixing is known to be unsound +and bound to result in disaster. A Government subsidy would work out in the +same way. It can not be sound for all of the people to hire some of the +people to produce a crop which neither the producers nor the rest of the +people want. + +Price fixing and subsidy will both increase the surplus, instead of +diminishing it. Putting the Government directly into business is merely a +combination of subsidy and price fixing aggravated by political pressure. +These expedients would lead logically to telling the farmer by law what and +how much he should plant and where he should plant it, and what and how +much he should sell and where he should sell it. The most effective means +of dealing with surplus crops is to reduce the surplus acreage. While this +can not be done by the individual farmer, it can be done through the +organizations already in existence, through the information published by +the Department of Agriculture, and especially through banks and others who +supply credit refusing to finance an acreage manifestly too large. + +It is impossible to provide by law for an assured success and prosperity +for all those who engage in farming. If acreage becomes overextended, the +Government can not assume responsibility for it. The Government can, +however, assist cooperative associations and other organizations in orderly +marketing and handling a surplus clearly due to weather and seasonal +conditions, in order to save the producer from preventable loss. While it +is probably impossible to secure this result at a single step, and much +will have to be worked out by trial and rejection, a beginning could be +made by setting up a Federal board or commission of able and experienced +men in marketing, granting equal advantages under this board to the various +agricultural commodities and sections of the country, giving encouragement +to the cooperative movement in agriculture, and providing a revolving loan +fund at a moderate rate of interest for the necessary financing. Such +legislation would lay the foundation for a permanent solution of the +surplus problem. + +This is not a proposal to lend more money to the farmer, who is already +fairly well financed, but to lend money temporarily to experimental +marketing associations which will no doubt ultimately be financed by the +regularly established banks, as were the temporary operations of the War +Finance Corporation. Cooperative marketing especially would be provided +with means of buying or building physical properties. + +The National Government has almost entirely relieved the farmer from income +taxes by successive tax reductions, but State and local taxes have +increased, putting on him a grievous burden. A policy of rigid economy +should be applied to State and local expenditures. This is clearly within +the legislative domain of the States. The Federal Government has also +improved our banking structure and system of agricultural credits. The +farmer will be greatly benefited by similar action in many States. The +Department of Agriculture is undergoing changes in organization in order +more completely to separate the research and regulatory divisions, that +each may be better administered. More emphasis is being placed on the +research program, not only by enlarging the appropriations for State +experiment stations but by providing funds for expanding the research work +of the department. It is in this direction that much future progress can be +expected. + +THE PROTECTIVE TARIFF + +The present tariff rates supply the National Treasury with well over +$600,000,000 of annual revenue. Yet, about 65 per cent of our imports come +in duty free. Of the remaining 35 per cent of imports on which duties are +laid about 23 per cent consists of luxuries and agricultural products, and +the balance of about 12 per cent, amounting, to around $560,000,000 is made +up of manufactures and merchandise. As no one is advocating any material +reduction in the rates on agriculture or luxuries, it is only the +comparatively small amount of about $560,000,000 of other imports that are +really considered in any discussion of reducing tariff rates. While this +amount, duty free, would be large enough seriously to depress many lines of +business in our own country, it is of small importance when spread over the +rest of the world. + +It is often stated that a reduction of tariff rates on industry would +benefit agriculture. It would be interesting to know to what commodities it +is thought this could be applied. Everything the farmer uses in farming is +already on the free list. Nearly everything he sells is protected. It would +seem to be obvious that it is better for tile country to have the farmer +raise food to supply the domestic manufacturer than the foreign +manufacturer. In one case our country would have only the farmer; in the +other it would have the farmer and the manufacturer. Assuming that Europe +would have more money if it sold us larger amounts of merchandise, it is +not certain it would consume more food, or, if it did, that its purchases +would be made in this country. Undoubtedly it would resort to the cheapest +market, which is by no means ours. The largest and best and most profitable +market for the farmer in the world is our own domestic market. Any great +increase in manufactured imports means the closing of our own plants. +Nothing would be worse for agriculture. + +Probably no one expects a material reduction in the rates on manufactures +while maintaining the rates on agriculture. A material reduction in either +would be disastrous to tile farmer. It would mean a general shrinkage of +values, a deflation of prices, a reduction of wages, a general depression +carrying our people down to the low standard of living in our competing +countries. It is obvious that this would not improve but destroy our market +for imports, which is best served by maintaining our present high +purchasing power under which in the past five years imports have increased +63 per cent. + +FARM LOAN SYSTEM + +It is exceedingly important that the Federal land and joint-stock land +banks should furnish the best possible service for agriculture. Certain +joint-stock banks have fallen into improper and unsound practices, +resulting in the indictment of the officials of three of them. More money +has been provided for examinations, and at the instance of the Treasury +rules and regulations of the Federal Farm Board have been revised. Early +last May three of its members resigned. Their places were filled with men +connected with the War Finance Corporation. Eugene Meyer being designated +as Farm Loan Commissioner. The new members have demonstrated their ability +in the field of agricultural finance in the extensive operations of he War +Finance Corporation. Three joint-stock banks have gone into receivership. +It is necessary to preserve the public confidence in this system in order +to find a market for their bonds. A recent flotation was made at a record +low rate of 4 per cent. Careful supervision is absolutely necessary to +protect the investor and enable these banks to exercise their chief +function in serving agriculture. + +MUSCLE SHOALS + +The last year has seen considerable changes in the problem of Muscle +Shoals. Development of other methods show that nitrates can probably be +produced at less cost than by the use of hydroelectric power. Extensive +investigation made by the Department of War indicates that the nitrate +plants on this project are of little value for national defense and can +probably be disposed of within two years. The oxidation part of the plants, +however, should be retained indefinitely. This leaves this project mostly +concerned with power. It should, nevertheless, continue to be dedicated to +agriculture. It is probable that this desire can be best served by +disposing of the plant and applying the revenues received from it to +research for methods of more economical production of concentrated +fertilizer and to demonstrations and other methods of stimulating its use +on the farm. But in disposing of the property preference should be given to +proposals to use all or part of it for nitrate production and fertilizer +manufacturing. + +FLOOD CONTROL + +For many years the Federal Government has been building a system of dikes +along the Mississippi River for protection against high water. During the +past season the lower States were overcome by a most disastrous flood. Many +thousands of square miles were inundated a great many lives were lost, much +livestock was drowned, and a very heavy destruction of property was +inflicted upon the inhabitants. The American Red Cross at once went to the +relief of the stricken communities. Appeals for contributions have brought +in over $17,000,000. The Federal Government has provided services, +equipment, and supplies probably amounting to about $7,000,000 more. +Between $5,000,000 and $10,000,000 in addition have been provided by local +railroads, the States, and their political units. Credits have been +arranged by the Farm Loan Board, and three emergency finance corporations +with a total capital of $3,000,000 have insured additional resources to the +extent of $12,000,000. Through these means the 700,000 people in the +flooded areas have been adequately supported. Provision has been made to +care for those in need until after the 1st of January. + +The Engineering Corps of the Army has contracted to close all breaks in the +dike system before the next season of high water. A most thorough and +elaborate survey of the whole situation has been made and embodied in a +report with recommendations for future flood control, which will be +presented to the Congress. The carrying out of their plans will necessarily +extend over a series of years. They will call for a raising and +strengthening of the dike system with provision for emergency spillway's +and improvements for the benefit of navigation. + +Under the present law the land adjacent to the dikes has paid one-third of +the cost of their construction. This has been a most extraordinary +concession from the plan adopted in relation to irrigation, where the +general rule has been that the land benefited should bear the entire +expense. It is true, of course, that the troublesome waters do not +originate on the land to be reclaimed, but it is also true that such waters +have a right of way through that section of the country and the land there +is charged with that easement. It is the land of this region that is to be +benefited. To say that it is unable to bear any expense of reclamation is +the same thing as saying that it is not worth reclaiming. Because of +expenses incurred and charges already held against this land, it seems +probable that some revision will have to be made concerning the proportion +of cost which it should bear. But it is extremely important that it should +pay enough so that those requesting improvements will be charged with some +responsibility for their cost, and the neighborhood where works are +constructed have a pecuniary interest in preventing waste and extravagance +and securing a wise and economical expenditure of public funds. + +It is necessary to look upon this emergency as a national disaster. It has +been so treated from its inception. Our whole people have provided with +great generosity for its relief. Most of the departments of the Federal +Government have been engaged in the same effort. The governments of the +afflicted areas, both State and municipal, can not be given too high praise +for the courageous and helpful way in which they have come to the rescue of +the people. If the sources directly chargeable can not meet the demand, the +National Government should not fail to provide generous relief. This, +however, does not mean restoration. The Government is not an insurer of its +citizens against the hazard of the elements. We shall always have flood and +drought, heat and cold, earthquake and wind, lightning and tidal wave, +which are all too constant in their afflictions. The Government does not +undertake to reimburse its citizens for loss and damage incurred under such +circumstances. It is chargeable, however, with the rebuilding of public +works and the humanitarian duty of relieving its citizens from distress. + +The people in the flooded area and their representatives have approached +this problem in the most generous and broad-minded way. They should be met +with a like spirit on the part of the National government. This is all one +country. The public needs of each part must be provided for by the public +at large. No required relief should be refused. An adequate plan should be +adopted to prevent a recurrence of this disaster in order that the people +may restore to productivity and comfort their fields and their towns. + +Legislation by this Congress should be confined to our principal and most +pressing problem, the lower Mississippi, considering tributaries only so +far as they materially affect the main flood problem. A definite Federal +program relating to our waterways was proposed when the last Congress +authorized a comprehensive survey of all the important streams of the +country in order to provide for their improvement, including flood control, +navigation, power, and irrigation. Other legislation should wait pending a +report on this survey. The recognized needs of the Mississippi should not +be made a vehicle for carrying other projects. All proposals for +development should stand on their own merits. Any other method would result +in ill-advised conclusions, great waste of money, and instead of promoting +would delay the orderly and certain utilization of our water resources. + +Very recently several of the New England States have suffered somewhat +similarly from heavy rainfall and high water. No reliable estimate of +damage has yet been computed, but it is very large to private and public +property. The Red Cross is generously undertaking what is needed for +immediate relief, repair and reconstruction of houses, restocking of +domestic animals, and food, clothing, and shelter. A considerable sum of +money will be available through the regular channels in the Department of +Agriculture for reconstruction of highways. It may be necessary to grant +special aid for this purpose. Complete reports of what is required will +undoubtedly be available early in the session. + +INLAND NAVIGATION + +The Congress in its last session authorized the general improvements +necessary to provide the Mississippi waterway system with better +transportation. Stabilization of the levels of the Great Lakes and their +opening to the sea by an effective shipway remain to be considered. Since +the last session the Board of Engineers of the War Department has made a +report on the proposal for a canal through the State of New York, and the +Joint Board of Engineers, representing Canada and the United States, has +finished a report on the St. Lawrence River. Both of these boards conclude +that the St. Lawrence project is cheaper, affords a more expeditious method +of placing western products in European markets, and will cost less to +operate. The State Department has requested the Canadian Government to +negotiate treaties necessary to provide for this improvement. It will also +be necessary to secure an agreement with Canada to put in works necessary +to prevent fluctuation in the levels of the Great Lakes. + +Legislation is desirable for the construction of a dam at Boulder Canyon on +the Colorado River, primarily as a method of flood control and irrigation. +A secondary result would be a considerable power development and a source +of domestic water supply for southern California. Flood control is clearly +a national problem, and water supply is a Government problem, but every +other possibility should be exhausted before the Federal Government becomes +engaged in the power business. The States which are interested ought to +reach mutual agreement. This project is in reality their work. If they wish +the Federal Government to undertake it, they should not hesitate to make +the necessary concessions to each other. This subject is fully discussed in +the annual report of the Secretary of the Interior. The Columbia River +Basin project is being studied and will be one to be considered at some +future time. + +The Inland Waterways Corporation is proving successful and especially +beneficial to agriculture. A survey is being made to determine its future +needs. It has never been contemplated that if inland rivers were opened to +navigation it would then be necessary for the Federal Government to provide +the navigation. Such a request is very nearly the equivalent of a +declaration that their navigation is not profitable, that the commodities +which they are to carry can be taken at a cheaper rate by some other +method, in which case the hundreds of millions of dollars proposed to be +expended for opening rivers to navigation would be not only wasted, but +would entail further constant expenditures to carry the commodities of +private persons for less than cost. + +The policy is well established that the Government should open public +highways on land and on water, but for use of the public in their private +capacity. It has put on some demonstration barge lines, but always with the +expectation that if they prove profitable they would pass into private +hands and if they do not prove profitable they will be withdrawn. The +problems of transportation over inland waterways should be taken up by +private enterprise, so that the public will have the advantage of +competition in service. It is expected that some of our lines can be sold, +some more demonstration work done, and that with the completion of the Ohio +project a policy of private operation can be fully developed. PROHIBITION + +After more than two generations of constant debate, our country adopted a +system of national prohibition under all the solemnities involved in an +amendment to the Federal Constitution. In obedience to this mandate the +Congress and the States, with one or two notable exceptions, have passed +required laws for its administration and enforcement. This imposes upon the +citizenship of the country, and especially on all public officers, not only +the duty to enforce, but the obligation to observe the sanctions of this +constitutional provision and its resulting laws. If this condition could be +secured, all question concerning prohibition would cease. The Federal +Government is making every effort to accomplish these results through +careful organization, large appropriations, and administrative effort. +Smuggling has been greatly cut down, the larger sources of supply for +illegal sale have been checked, and by means of injunction and criminal +prosecution the process of enforcement is being applied. The same vigilance +on the part of local governments would render these efforts much more +successful. The Federal authorities propose to discharge their obligation +for enforcement to the full extent of their ability. + +THE NEGRO + +History does not anywhere record so much progress made in the same length +of time as that which has been accomplished by the Negro race in the United +States since the Emancipation Proclamation. They have come up from slavery +to be prominent in education, the professions, art, science, agriculture, +banking, and commerce. It is estimated that 50,000 of them are on the +Government pay rolls, drawing about $50,000,000 each year. They have been +the recipients of presidential appointments and their professional ability +has arisen to a sufficiently high plane so that they have been intrusted +with the entire management and control of the great veterans hospital at +Tuskegee, where their conduct has taken high rank. They have shown that +they have been worthy of all the encouragement which they have received. +Nevertheless, they are too often subjected to thoughtless and inconsiderate +treatment, unworthy alike of the white or colored races. They have +especially been made the target of the foul crime of lynching. For several +years these acts of unlawful violence had been diminishing. In the last +year they have shown an increase. Every principle of order and law and +liberty is opposed to this crime. The Congress should enact any legislation +it can under the Constitution to provide for its elimination. + +AMERICAN INDIAN + +The condition of the American Indian has much improved in recent years. +Full citizenship was bestowed upon them on June 2, 1924, and appropriations +for their care and advancement have been increased. Still there remains +much to be done. + +Notable increases in appropriations for the several major functions +performed by the Department of the Interior on behalf of the Indians have +marked the last five years. In that time, successive annual increases in +appropriations for their education total $1,804,325; for medical care, +$578,000; and for industrial advancement, $205,000; or $2,582,325 more than +would have been spent in the same period on the basis of appropriations for +1923 and the preceding years. + +The needs along health, educational, industrial and social lines however, +are great, and the Budget estimates for 1929 include still further +increases for Indian administration. + +To advance the time when the Indians may become self-sustaining, it is my +belief that the Federal Government should continue to improve the +facilities for their care, and as rapidly as possible turn its +responsibility over to the States. COAL + +Legislation authorizing a system of fuel administration and the appointment +by the President of a Board of Mediation and Conciliation in case of actual +or threatened interruption of production is needed. The miners themselves +are now seeking information and action from the Government, which could +readily be secured through such a board. It is believed that a thorough +investigation and reconsideration of this proposed policy by the Congress +will demonstrate that this recommendation is sound and should be adopted. + +PETROLEUM CONSERVATION + +The National Government is undertaking to join in the formation of a +cooperative committee of lawyers, engineers, and public officers, to +consider what legislation by the States or by the Congress can be adopted +for the preservation and conservation of our supply of petroleum. This has +come to be one of the main dependencies for transportation and power so +necessary to our agricultural and industrial life. It is expected the +report of this committee will be available for later congressional action. +Meantime, the requirement that the Secretary of the Interior should make +certain leases of land belonging to the Osage Indians, in accordance with +the act of March 3, 1921, should be repealed. The authority to lease should +be discretionary, in order that the property of the Indians way not be +wasted and the public suffer a future lack of supply. + +ALIEN PROPERTY + +Under treaty the property held by the Alien Property Custodian was to be +retained until suitable provision had been made for the satisfaction of +American claims. While still protecting the American claimants, in order to +afford every possible accommodation to the nationals of the countries whose +property was held, the Congress has made liberal provision for the return +of a larger part of the property. All trusts under $10,000 were returned in +full, and partial returns were made on the others. The total returned was +approximately $350,000,000. + +There is still retained, however, about $250,000,000. The Mixed Claims +Commission has made such progress in the adjudication of claims that +legislation can now be enacted providing for the return of the property, +which should be done under conditions which will protect our Government and +our claimants. Such a measure will be proposed, and I recommend its +enactment. + +RAILROAD CONSOLIDATION + +In order to increase the efficiency of transportation and decrease its cost +to the shipper, railroad consolidation must be secured. Legislation is +needed to simplify the necessary procedure to secure such agreements and +arrangements for consolidation, always under the control and with the +approval of the Interstate Commerce Commission. Pending this, no adequate +or permanent reorganization can be made of the freight-rate structure. +Meantime, both agriculture and industry are compelled to wait for needed +relief. This is purely a business question, which should be stripped of all +local and partisan bias and decided on broad principles and its merits in +order to promote the public welfare. A large amount of new construction and +equipment, which will furnish employment for labor and markets for +commodities of both factory and farm, wait on the decision of this +important question. Delay is holding back the progress of our country. + +Many of the same arguments are applicable to the consolidation of the +Washington traction companies. VETERANS + +The care which this country has lavished on its veterans is known of all +men. The yearly outlay for this purpose is about $750,000,000, or about the +cost of running the Federal Government, outside of the Post Office +Department, before the World War. The Congress will have before it +recommendations of the American Legion, the Veterans of Foreign Wars, and +other like organizations, which should receive candid consideration. We +should continue to foster our system of compensation and rehabilitation, +and provide hospitals and insurance. The magnitude of the undertaking is +already so large that all requests calling for further expenditure should +have the most searching scrutiny. Our present system of pensions is already +sufficiently liberal. It was increased by the last Congress for Civil and +Spanish War veterans and widows and for some dependents. + +It has been suggested that the various governmental agencies now dealing +with veterans' relief be consolidated. This would bring many advantages. It +is recommended that the proper committees of the Congress make a thorough +survey of this subject, in order to determine if legislation to secure such +consolidation is desirable. EDUCATION + +For many years it has been the policy of the Federal Government to +encourage and foster the cause of education. Large sums of money are +annually appropriated to carry on vocational training. Many millions go +into agricultural schools. The general subject is under the immediate +direction of a Commissioner of Education. While this subject is strictly a +State and local function, it should continue to have the encouragement of +the National Government. I am still of the opinion that much good could be +accomplished through the establishment of a Department of Education and +Relief, into which would be gathered all of these functions under one +directing member of the Cabinet. + +DEPARTMENT OF LABOR + +Industrial relations have never been more peaceful. In recent months they +have suffered from only one serious controversy. In all others difficulties +have been adjusted, both management and labor wishing to settle +controversies by friendly agreement rather than by compulsion. The welfare +of women and children is being especially guarded by our Department of +Labor. Its Children's Bureau is in cooperation with 26 State boards and 80 +juvenile courts. + +Through its Bureau of Immigration it bas been found that medical +examination abroad has saved prospective immigrants from much hardship. +Some further legislation to provide for reuniting families when either the +husband or the wife is in this country, and granting more freedom for the +migration of the North American Indian tribes is desirable. + +The United States Employment Service has enabled about 2,000,000 men and +women to gain paying positions in the last fiscal year. Particular +attention has been given to assisting men past middle life and in providing +field labor for harvesting agricultural crops. This has been made possible +in part through the service of the Federal Board for Vocational Education, +which is cooperating with the States in a program to increase the technical +knowledge and skill of the wage earner. + +PUBLIC BUILDINGS + +Construction is under way in the country and ground has been broken for +carrying out a public-building program for Washington. We have reached a +time when not only the conveniences but the architectural beauty of the +public buildings of the Capital City should be given much attention. It +will be necessary to purchase further land and provide the required +continuing appropriations. + +HISTORICAL CELEBRATIONS + +Provision is being made to commemorate the two hundredth anniversary of the +birth of George Washington. Suggestion has been made for the construction +of a memorial road leading from the Capital to Mount Vernon, which may well +have the consideration of the Congress, and the commission intrusted with +preparations for the celebration will undoubtedly recommend publication of +the complete writings of Washington and a series of writings by different +authors relating to him. + +February 25, 1929. is the one hundred and fiftieth anniversary of the +capture of Fort Sackville, at Vincennes, in the State of Indiana. This +eventually brought into the Union what was known as the Northwest +Territory, embracing the region north of the Ohio River between the +Alleghenies and the Mississippi River. This expedition was led by George +Rogers Clark. His heroic character and the importance of his victory are +too little known and understood. They gave us not only this Northwest +Territory but by means of that the prospect of reaching the Pacific. The +State of Indiana is proposing to dedicate the site of Fort Sackville as a +national shrine. The Federal Government may well make some provision for +the erection under its own management of a fitting memorial at that point. + +FOREIGN RELATIONS + +It is the policy of the United States to promote peace. We are a peaceful +people and committed to the settling of disputes by amicable adjustment +rather than by force. We have believed that peace can best be secured by a +faithful observance on our part of the principles of international law, +accompanied by patience and conciliation, and requiring of others a like +treatment for ourselves. We have lately had some difference with Mexico +relative to the injuries inflicted upon our nationals and their property +within that country. A firm adherence to our rights and a scrupulous +respect for the sovereignty of Mexico, both in accordance with the law of +nations, coupled with patience and forbearance, it is hoped will resolve +all our differences without interfering with the friendly relationship +between the two Governments. + +We have been compelled to send naval and marine forces to China to protect +the lives and property of our citizens. Fortunately their simple presence +there has been sufficient to prevent any material loss of life. But there +has been considerable loss of property. That unhappy country is torn by +factions and revolutions which bid fair to last for an indefinite period. +Meanwhile we are protecting our citizens and stand ready to cooperate with +any government which may emerge in promoting the welfare of the people of +China. They have always had our friendship, and they should especially +merit our consideration in these days of their distraction and distress. + +We were confronted by similar condition on a small scale in Nicaragua. Our +marine and naval forces protected our citizens and their property and +prevented a heavy sacrifice of life and the destruction of that country by +a reversion to a state of revolution. Henry L. Stimson, former Secretary of +War, was sent there to cooperate with our diplomatic and military officers +in effecting a settlement between the contending parties. This was done on +the assurance that we would cooperate in restoring a state of peace where +our rights would be protected by giving our assistance in the conduct of +the next presidential election, which occurs in a few months. With this +assurance the population returned to their peacetime pursuits, with the +exception of some small roving bands of outlaws. + +In general, our relations with other countries can be said to have improved +within the year. While having a due regard for our own affairs, the +protection of our own rights, and the advancement of our own people, we can +afford to be liberal toward others. Our example has become of great +importance in the world. It is recognized that we are independent, +detached, and can and do take a disinterested position in relation to +international affairs. Our charity embraces the earth. Our trade is far +flung. Our financial favors are widespread. Those who are peaceful and +law-abiding realize that not only have they nothing to fear from us, but +that they can rely on our moral support. Proposals for promoting the peace +of the world will have careful consideration. But we are not a people who +are always seeking for a sign. We know that peace comes from honesty and +fair dealing, from moderation, and a generous regard for the rights of +others. The heart of the Nation is more important than treaties. A spirit +of generous consideration is a more certain defense than great armaments. +We should continue to promote peace by our example, and fortify it by such +international covenants against war as we are permitted under our +Constitution to make. + +AMERICAN PROGRESS + +Our country has made much progress. But it has taken, and will continue to +take, much effort. Competition will be keen, the temptation to selfishness +and arrogance will be severe, the provocations to deal harshly with weaker +peoples will be many. All of these are embraced in the opportunity for true +greatness. They will be overbalanced by cooperation by generosity, and a +spirit of neighborly kindness. The forces of the universe are taking +humanity in that direction. In doing good, in walking humbly, in sustaining +its own people in ministering to other nations, America will work out its +own mighty destiny. + +*** + +State of the Union Address +Calvin Coolidge +December 4, 1928 + +To the Congress of the United States: + +No Congress of the United States ever assembled, on surveying the state of +the Union, has met with a more pleasing prospect than that which appears at +the present time. In the domestic field there is tranquility and +contentment, harmonious relations between management and wage earner, +freedom from industrial strife, and the highest record of years of +prosperity. In the foreign field there is peace, the good will which comes +from mutual understanding, and the knowledge that the problems which a +short time ago appeared so ominous are yielding to the touch of manifest +friendship. The great wealth created by our enterprise and industry, and +saved by our economy, has had the widest distribution among our own people, +and has gone out in a steady stream to serve the charity and the business +of the world. The requirements of existence have passed beyond the standard +of necessity into the region of luxury. Enlarging production is consumed by +an increasing demand at hom6 and ail expanding commerce abroad. The country +can regard the present with satisfaction and anticipate the future with +optimism. + +The main source of these unexampled blessings lies in the integrity and +character of the American people. They have had great faith, which they +have supplemented with inighty works. They have been able to put trust in +each other and trust in their Government. Their candor in dealing with +foreign governments hag commanded respect and confidence. Yet these +remarkable powers would have been exerted almost in vain without the +constant cooperation and careful administration of the Federal Government. + +We have been coming into a period which may be fairly characterized as a +conservation of our national resources. Wastefulness in public business and +private enterprise has been displaced by constructive economy. This has +been accomplished by bringing our domestic and foreign relations more and +more under a reign of law. A rule of force has been giving way to a rule of +reason. We have substituted for the vicious circle of increasing +expenditures, increasing tax rates, and diminishing profits the charmed +circle of diminishing expenditures, diminishing tax rates, and increasing +profits. + +Four times we have made a drastic revision of our internal revenue system, +abolishing many taxes and substantially reducing almost all others. Each +time the resulting stimulation to business has so increased taxable incomes +and profits that a surplus has been ro, duced. One-third of the national +debt has been paid, while much of the other two-thirds has been refunded at +lower rates, and these savings of interest and constant economies have +enabled us to repeat the satisfying process of more tax reductions. Under +this sound and healthful encouragement the national income has increased +nearly 50 per cent, until it is estimated to stand well over +$90,000,000,000. It gas been a method which has performed the secining +miracle of leaving a much greater percentage of earnings in the hands of +the taxpayers 'with scarcely any diminution of the Government revenue. That +is constructive economy in the highest degree. It is the corner stone of +prosperity. It should not fail to be continued. + +This action began by the application of economy to public expenditure. If +it is to be permanent, it must be made so by the repeated application of +economy. There is no surplus on which to base further tax revision at this +time. Last June the estimates showed a threatened deficit for the current +fiscal year of $94,000,000. Under my direction the departments began saving +all they could out of their present appropriations. The last tax reduction +brought 'an encouraging improvement in business, beginning early in +October, which w1,11 also increase our revenue. The combination of economy +and good times now indicates a surplus of about $37,000,000. This is a +margin of less than I percent on out, expenditures and makes it obvious +that the Treasury is in no condition to undertake increases in ditures to +be made before June 30. It is necessary therefor"Stuing the present session +to refrain from new appropriations for immediate outlay, or if such are +absolutely required to provide for them by new revenue; otherwise, we shall +reach the end of the year with the unthinkable result of an unbalanced +budget. For the first time during my term of office we face that +contingency. I am certain that the Congress would not pass and I should not +feel warranted in approving legislation which would involve us in that +financial disgrace. + +On the whole the finances of the Government are most satisfactory. Last +year the national debt was reduced about $906,000,000. The refunding and +retirement of the second and third Liberty loans have just been brought to +a successful conclusion, which will save about $75,000,0W a year in +interest. The unpaid balance has been arranged + +in maturities convenient for carrying out our permanent debt-paying +Program. + +The enormous savings made have not been at the expense of any legitimate +public need. The Government plant has been kept up and many improvements +are tinder way, while its service is fully manned and the general +efficiency of operation has increased. We have been enabled to undertake +many new enterprises. Among these are the adjusted compensation of the +veterans of the World War, which is costing us $112,000,000 a year; +amortizing our liability to the civil service retirement funds, +$20,000,000; increase of expenditures for rivers and harbors including +flood control, $43,000,000; public buildings, $47,000,000. In 1928 we spent +$50,000,000 in the adjustment of war claims and alien property. These are +examples of a large list of items. + +FOREIGN REIATIONS + +When we turn from our domestic affairs to our foreign relations, we +likewise perceive peace and progress. The Sixth International Conference of +American States was held at Habana last winter. It contributed to a better +understanding and cooperation among the nations'. Eleven important +conventions were signed and 71 resolutions passed. Pursuant to the plan +then adopted, this Government has invited the other 20 nations of this +hemisphere to it conference on conciliation and arbitration, which meets in +Washington on December 10. All the nations have accepted and the +expectation is justified that important progress will be made in methods +for resolving international differences by means of arbitration. + +During the year we have signed 11 new arbitration treaties, and 22 more are +tinder negotiation. NICARAGUA + +When a destructive and bloody revolution lately broke out in Nicaragua, at +the earnest and repeated entreaties of its Government I dispatched our +Marine forces there to protect the lives and interests of our citizens. To +compose the contending parties, I sent there Col. Henry L. Stimson, former +Secretary of War and now Governor General of the Philippine Islands, who +secured an agreement that warfare should cease, a national election should +be held and peace should be restored. Both parties conscientiously carried +out this agreement, with the exception of a few bandits who later mostly +surrendered or left the country. President Diaz appointed Brig. Gen. Frank +R. McCoy, United States Army, president of the election board, which +included also one member of each political party. + +A free and fair election has been held and has worked out so successfully +that both parties have joined in requesting like cooperation from this +country at the election four years hence, to which I have refrained from +making any commitments, although our country must be gratified at such an +exhibition of success and appreciation + +Nicaragua is regaining its prosperity and has taken a long step in the +direction of peaceful self-government. TACNA-ARICA + +The long-standing differences between Chile and Peru have been sufficiently +composed so that diplomatic relations have been resumed by the exchange of +ambassadors. Negotiations are hopefully proceeding as this is written for +the final adjustment of the differences over their disputed territory. +MEXICO + +Our relations with Mexico are on a more satisfactory basis than at any time +since their revolution. Many misunderstandings have been resolved and the +most frank and friendly negotiations promise a final adjustment of all +unsettled questions. It is exceedingly gratifying that Ambassador Morrow +has been able to bring our two neighboring countries, which have so many +interests in common, to a position of confidence in each other and of +respect for mutual sovereign rights. CHINA + +The situation in China which a few months ago was so threatening as to call +for the dispatch of a large additional force has, been much composed. The +Nationalist Government has established itself over the country and +promulgated a new organic law announcing a program intended to promote the +political and economic welfare of the people. We have recognized this +Government,, encouraged its progress, and have negotiated a treaty +restoring to China complete + +tariff autonomy and guaranteeing our citizens against discriminations. Our +trade in that quarter is increasing and our forces are being reduced. + +GREEK AND AUSTRIAN DEBTS + +Pending before the Congress is a recommendation for the settlement of the +Greek debt and the Austrian debt. both of these are comparatively small and +our country can afford to be generous. The rehabilitation of these +countries await& their settlement. There would also be advantages to our +trade. We could scarcely afford to be the only nation that refuses the +relief which Austria seeks. The Congress has already granted Austria a +long-time moratorium, which it is understood will be waived and immediate +payments begun on her debt on the same basis which we have extended to +other countries. + +PEACE TREATY + +One of the most important treaties ever laid before the Senate of the +United States will be that which the 15 nations recently signed at Paris, +and to which 44 other nations have declared their intention to adhere, +renouncing war as a national policy and agreeing to resort only to peaceful +means for the adjustment of international differences. It is the most +solemn declaration against war, the most positive adherence to peace, that +it is possible' for sovereign nations to + +make. It does not supersede our inalienable sovereign right and duty of +national defense or undertake to commit us before the event to any mode of +action which the Congress might decide to be wise. it ever the treaty +should be broken. But it is a new standard in the world around which can +rally the informed and enlightened opinion of nations to prevent their +governments from beii4'forced into hostile action by the temporary outbreak +of international animosities. The observance of this covenant, so simple +and so straightforward, promises more for the peace of the world than any +other agreement ever negotiated among the nations. + +NATIONAL DEFENSE + +The first duty of our Government to its own citizens and foreigners within +its borders is the preservation of order. Unless and until that duty is met +a government is not even eligible for recognition among the family of +nations. The advancement of world civilization likewise is dependent upon +that order among the people of different countries which we term peace. To +insure our citizens against the infringement of their legal rights at home +and abroad, to preserve order, liberty, and peace by making the law +supreme, we have an Army and a Navy. + +Both of these are organized for defensive purposes. Our Army could not be +much reduced, but does not need to be increased. Such new housing and +repairs as are necessary are tinder way and the 6-year program in aviation +is being put into effect in both branches of our service. + +Our Navy, according to generally accepted standards, is deficient in +cruisers. We have 10 comparatively new vessels, 22 that are old, and 8 to +be built. It is evident that renewals and replacements must be provided. +This matter was thoroughly canvassed at the last session of the Congress +and does not need restatement. The bill before the Senate with the +elimination of the time clause should be passed. We have no intention of +competing with any other country. This building program is for necessary +replacements and to meet our needs for defense. + +The cost of national defense is stupendous. It has increased $118,000,000 +in the past four years. The estimated expenditure for 1930 is $668,000,000. +While this is made up of many items it is, after all, mostly dependent upon +numbers. Our defensive needs do not can for any increase in the number of +men in the Army or the Navy. We have reached the limit of what we ought to +expend for that purpose. + +I wish to repeat again for the benefit of the timid and the suspicious that +this country is neither militaristic nor imperialistic. Many people at home +and abroad, who constantly make this charge, are the same ones who are even +more solicitous to have us extend assistance to foreign countries. When +such assistance is granted, the inevitable result is that we have foreign +interests. For us to refuse the customary support and protection of such +interests would be in derogation of the sovereignty of this Nation. Our +largest foreign interests are in the British Empire, France, and Italy. +Because we are constantly solicitous for those interests, I doubt if anyone +would suppose that those countries feel we harbor toward them any +militaristic or imperialistic design. As for smaller countries, we cer + +tainly do not want any of them. We are more anxious than they are to have +their sovereignty respected. Our entire influence is in behalf of their +independence. Cuba stands as a witness to our adherence to this principle. + +The position of this Government relative to the limitation of armaments, +the results already secured, and the developments up to the present time +are so well known to the Congress that they do not require any restatement. +VETERANS + +The magnitude of our present system of veterans' relief is without +precedent, and the results have been far-reaching. For years a service +pension has been granted to the Grand Army and lately to the survivors of +the Spanish-American War. At the time we entered the World War however, +Congress departed from the usual pension system followed by our +Gove2rnment. Eleven years have elapsed since our laws were first enacted, +initiating a system of compensation, rehabilitation, hospitalization, and +insurance for the disabled of the World War and their dependents. The +administration 'of all the laws concerning relief has been a difficult +task, but it can safely be stated that these measures have omitted nothing +in their desire to deal generously and humanely. We should continue to +foster this system and provide all the facilities necessary for adequate +care. It is the conception of our Government that the pension roll is an +honor roll. It should include all those who are justly entitled to its +benefits, but exclude all others. + +Annual expenditures for all forms of veterans' relief now approximate +$765,000,000, and are increasing from year to year. It is doubtful if the +peak of expenditures will be reached even under present legislation for +sonic time yet to come. Further amendments to the existing law will be +suggested by the American Legion, the Veterans of Foreign Wars of the +United States, the Disabled American Veterans of the World War, and other +like organizations, and it may be necessary for administrative purposes, or +in order to remove some existing inequalities in the present law, to make +further changes. I am sure that such recommendations its may be submitted +to the Congress will receive your careful consideration. But because of the +vast expenditure now being made, each year, with every assurance that it +will increase, and because of the great liberality of the existing law, the +proposal of any additional legislation dealing with this subject should +receive most searching scrutiny from the Congress. + +You are familiar with the suggestion that the various public agencies now +dealing with matters of veterans' relief be consolidated in one Government +department. Some advantages to this plan seem apparent, especially in the +simplification of administration find in the opportunity of bringing about +a greater uniformity in the application of veterans' relief. I recommend +that a survey be made by the proper committees of Congress dealing with +this subject, in order to determine whether legislation to secure this +consolidation is desirable. AGRICULTURE + +The past year has been marked by notable though not uniform improvement in +agriculture. The general purchasing power of farm + +products and the volume of production have advanced. This means not only +further progress, in overcoming the price disparity into which agriculture +was plunged in 1920-21, but also increased efficiency on the part of +farmers and a well-grounded confidence in the future of agriculture. + +The livestock industry has attained the best balance for many years and is +prospering conspicuously. Dairymen, beef producers, an poultrymen are +receiving substantially larger returns than last year. Cotton, although +lower in price than at this time last year, was produced in greater volume +and the prospect for cotton incomes is favorable. But progress is never +uniform in a vast and highly diversified agriculture or industry. Cash +grains, hay, tobacco, and potatoes will bring somewhat smaller returns this +year than last. Present indications are, however, that the gross farm +income will be somewhat larger than in the crop year 1927-28, when the +total was $12,253,000,000. The corresponding figure for 1926-27 was +$12,127,000,000, and in 1925-26, $12,670,000,000. Still better results +would have been secured this year had there not been an undue increase in +the production of certain crops. This is particularly true of potatoes, +which have sold at an unremunerative price, or at a loss, as a direct +result of overexpansion of acreage. + +The present status of agriculture, although greatly improved over that of a +few years ago, bespeaks the need of further improvemen4 which calls for +determined effort of farmers themselves, encouraged and assisted by wise +public policy. The Government has been, and must continue to be, alive to +the needs of agriculture. + +In the past eight years more constructive legislation of direct benefit to +agriculture has been adopted than during any other period. The Department +of Agriculture has been broadened and reorganized to insure greater +efficiency. The department is laying greater stress on the economic and +business phases of agriculture. It is lending every possible assistance to +cooperative marketing associations. Regulatory and research work have been +segregated in order that each field may be served more effectively. + +I can not too strongly commend, in the field of fact finding, the research +work of the Department of Agriculture and the State experiment stations. +The department now receives annually $4,000,000 more for research than in +1921. In addition, the funds paid to the States for experimentation +purposes under the Purnell Act constitute an annual increase in Federal +payments to State agricultural experiment stations of $2,400,000 over the +amount appropriated in 1921. The program of support for research may wisely +be continued and expanded. Since 1921 we have appropriated nearly an +additional $2,000,000 for extension work, and this sum is to be increased +next year under authorization by the Capper-Ketcham Act. + +THE SURPLUS PROBLEM + +While these developments in fundamental research, regulation, and +dissemination of agricultural information are of distinct hell) to +agriculture, additional effort is needed. The surplus problem demands +attention. As emphasized in my last message, the Government should assume +no responsibility in normal times for crop surplus clearly due to +overextended acreage. The Government should, + +however, provide reliable information as a guide to private effort; and in +this connection fundamental research on prospective supply and demand, as a +guide to production and marketing, should be encouraged. Expenditure of +public funds to bring in more new land should have most searching scrutiny, +so long as our farmers face unsatisfactory prices for crops and livestock +produced on land already under cultivation. + +Every proper effort should be made to put land to uses for which it is +adapted. The reforestation of land best suited for timber production is +progressing and should be encouraged, and to this end the forest taxation +inquiry was instituted to afford a practical guide for public policy. +Improvement bas been made in grazing regulation in the forest reserves, not +only to protect the ranges, but to preserve the soil from erosion. Similar +action is urgently needed to protect other public lands which are now +overgrazed and rapidly eroding. + +Temporary expedients, though sometimes capable of appeasing the demands of +the moment, can not permanently solve the surplus problem and might +seriously aggravate it. Hence putting the Government directly into +business, subsidies, and price fixing, and the alluring promises of +political action as a substitute for private initiative, should be +avoided. + +The Government should aid in promoting orderly marketing and in handling +surpluses clearly due to weather and seasonal conditions. As a beginning +there should be created a Federal farm board consisting of able and +experienced men empowered to advise producers' associations in establishing +central agencies or stabilization corporations to handle surpluses, to seek +wore economical means of merchandising, and to aid the producer in securing +returns according to the a14 of his product. A revolving loan fund should +be provided for the necessary financing until these agencies shall have +developed means of financing their operations through regularly constituted +credit institutions. Such a bill should carry authority for raising the +money, by loans or otherwise, necessary to meet the expense, as the +Treasury has no surplus. + +Agriculture has lagged behind industry in achieving that unity of effort +which modern economic life demands. The cooperative movement, which is +gradually building the needed organization, is in harmony with public +interest and therefore merits public encouragement. + +THE RESPONSIBILITY OF THE STATES + +Important phases of public policy related to agriculture lie within the +sphere of the States. While successive reductions in Federal taxes have +relieved most farmers of direct taxes to the National Government, State and +local levies have become a serious burden. This problem needs immediate and +thorough study with a view to correction at the earliest possible moment. +It will have to be made largely by the States themselves. COMMERCE + +It is desirable that the Government continue its helpful attitude toward +American business. The activities of the Department of Commerce have +contributed largely to the present satisfactory posi + +tion in our international trade, which has reached about $9,000,000,000 +annually. There should be no slackening of effort in that direction. it is +also important that the department's assistance to domestic commerce be +continued. There is probably no way in which the Government can aid sound +economic progress more effectively than by cooperation with our business +men to reduce wastes in distribution. + +COMMERCIAL AERONAUTICS + +Continued progress in civil aviation is most gratifying. Demands for +airplanes and motors have taxed both the industry and the licensing and +inspection service of the Department of Commerce to their capacity. While +the compulsory licensing provisions of the air commerce act apply only to +equipment and personnel engaged in interstate and foreign commerce, a +Federal license may be procured by anyone possessing the necessary +qualifications. State legislation, local airport regulations, and insurance +requirements make such a license practically indispensable. This results in +uniformity of regulation and increased safety in operation, which are +essential to aeronautical development. Over 17,000 young men and women have +now applied for Federal air pilot's licenses or permits. More than 80 per +cent of them applied during the past year. + +Our national airway system exceeds 14,000 miles in length and has 7,500 +miles lighted for night operations. Provision has been made for lighting +4,000 miles more during the current fiscal year and equipping an equal +mileage with radio facilities. Three-quarters of our people are now served +by these routes. With the rapid growth of air mail, express, and passenger +service, this new transportation medium is daily becoming a more important +factor in commerce. It is noteworthy that this development has taken place +without governmental subsidies. Commercial passenger flights operating on +schedule have reached 13,000 miles per day. + +During the next fortnight this Nation will entertain the nations of the +world in a celebration of the twenty-fifth anniversary of the first +successful airplane flight. The credit for this epoch-making achievement +belongs to a citizen of our own country, Orville Wright. + +CUBAN PARCEL POST + +I desire to repeat my recommendation of an earlier message, that Congress +enact the legislation necessary to make permanent the Parcel Post +Convention with Cuba, both as a facility to American commerce and as a +measure of equity to Cuba in the one class of goods which that country can +send here by parcel post without detriment to our own trade. + +"MAINE" BATTLESHIP MEMORIAL + +When I attended the Pan American Conference at Habana, the President of +Cuba showed me a marble statue made from the original memorial that was +overturned by a storm after it was erected on the Cuban shore to the memory +of the men who perished in the destruction of the battleship Maine. As a +testimony of friendship and appreciation of the Cuban Government and people +lie most gen + +erously offered to present this to the. United States, and I assured him of +my pleasure in accepting it. There is no location in the White House for +placing so large and heavy a structure, and I therefore urge the Congress +to provide by law for some locality where it can be set up. RAILROADS + +In previous annual messages I have suggested the enactment of laws to +promote railroad consolidation with the view of increasing the efficiency +of transportation and lessening its cost to the public. While, +consolidations can and should be made under the present law until it is +changed, vet the provisions of the act of 1920 have not been found fully +adequate to meet the needs of other methods of consolidation. Amendments +designed to remedy these defects have been considered at length by the +respective committees of Congress and a bill was reported out late in the +last session which I understand has the approval in principle of the +Interstate Commerce Commission. It is to be hoped that this legislation may +be enacted at an early date. + +Experience has shown that the interstate commerce law requires definition +and clarification in several other respects, some of which have been +pointed out by the Interstate Commerce Commission in its annual reports to +the Congress. It will promote the public interest to have the Congress give +early consideration to the recommendations there made. + +MERCHANT MARINE + +The cost of maintaining the United States Government merchant fleet has +been steadily reduced. We have established American flag lines in foreign +trade where they had never before existed as a means of promoting commerce +and as a naval auxiliary. There have been sold to private American capital +for operation within the past few years 14 of these lines, which, under the +encouragement of the recent legislation passed by the Congress, give +promise of continued successful operation. Additional legislation from time +to time may be necessary to promote future advancement under private +control. + +Through the cooperation of the Post Office Department and the Shipping +Board long-term contracts are being made with American steamship lines for +carrying mail, which already promise the construction of 15 to 20 new +vessels and the gradual reestablishment of the American merchant marine as +a private enterprise. No action of the National Government has been so +beneficial to our shipping. The cost is being absorbed to a considerable +extent by the disposal of unprofitable lines operated by the Shipping +Board, for which the new law has made a market. Meanwhile it should be our +policy to maintain necessary strategic lines under the Government operation +until they can be transferred to private capital. + +INTER-AMERICAN HIGHWAY + +In my message last year I expressed the view that we should lend our +encouragement for more good roads to all the principal points on this +hemisphere South of the Rio Grande. My view has not changed. + +The Pan American Union has recently indorsed it. In some of the countries +to the south a great deal of progress is being made in road building. In, +Others engineering features are often exacting and financing difficult. As +those countries enter upon programs for road building we should be ready to +contribute from our abundant experience to make their task easier of +accomplishment. I prefer not to go into civil life to accomplish this end. +We already furnish military and naval advisors, and following this +precedent we could draw competent men from these same sources and from the +Department of Agriculture. + +We should provide our southern neighbors, if they request it, with such +engineer advisors for the construction of roads and bridges. Private +t1literests should look with favor upon all reasonable loans sought by +these countries to open main lines of travel. Such assistance should be +given especially to any project for a highway designed to connect all the +countries on this hemisphere and thus facilitate, intercourse and closer +relations among, them. + +AIR MAIL SERVICE + +The friendly relations and the extensive, commercial intercourse with the +Western Hemisphere to the south of us are being further cemented by the +establishment and extension of air-mail routes. We shall soon have one from +Key West, Fla., over Cuba, Haiti, and Santo Domingo to San Juan, P. R., +where it will connect with another route to Trinidad. There will be another +route from Key West to the Canal Zone, where connection will be made with a +route across the northern coast of South America to Paramaribo. This will +give us a circle around the Caribbean under our own control.. Additional +connections will be made at Colon with a route running down the west coast +of South America as far as Conception, Chile, and with the French air mail +at Paramaribo running down the eastern coast of South America. 'The air +service already spans our continent, with laterals running to Mexico and +Canada, and covering a daily flight of over 28,000 miles, with an average +cargo of 15 000 pounds. WATERWAYS + +Our river and harbor improvements are proceeding with vigor. In the past +few years Ave have increased the appropriation for this regular work +$28,000,000, besides what. is to be expended on flood control. The total +appropriation for this year was over $91,000,000. The Ohio River is almost +ready for opening; work on the Missouri and other rivers is under way. In +accordance with the Mississippi flood law Army engineers are making +investigations and surveys on other streams throughout the country with a +view to flood control, navigation, waterpower, and irrigation. Our bar(re +lines are being operated under generous appropriations, and negotiations +are developing relative to the St. Lawrence waterway. To Secure the largest +benefits from all these waterways joint rates must be established with the +railroads, preferably by agreement, but otherwise as a result of +congressional action. + +We have recently passed several river and harbor bills. The work ordered by +the Congress not, yet completed, will cost about $243, + +000,000, besides the hundreds of millions to be spent on the Mississippi +flood way. Until we can see our way out of this expense no further river +and harbor legislation should be passed, as expenditures to put it into +effect would be four or five years away. + +IRRIGATION OF ARID LANDS + +For many years the Federal Government has been committed to the wise policy +of reclamation and irrigation. While it has met with some failures due to +unwise selection of projects and lack of thorough soil surveys, so that +they could not be placed on a sound business basis, on the whole the +service has been of such incalculable benefit in so many States that no one +would advocate its abandonment. The program to which we are already +committed, providing for the construction of new projects authorized by +Congress and the completion of old projects, will tax the resources of the +reclamation fund over a period of years. The high cost of improving and +equipping farms adds to the difficulty of securing settlers for vacant +farms on federal projects. + +Readjustments authorized by the reclamation relief act of May 25, 1926, +have given more favorable terms of repayment to settlers. These new +financial arrangements and the general prosperity on irrigation projects +have resulted in increased collections by the Department of the Interior of +charges due the reclamation fund. Nevertheless, the demand for still +smaller yearly payments on some projects continues. These conditions should +have consideration in connection with any proposed new projects. + +COLORADO RIVER + +For several years the Congress has considered the erection of a dam on the +Colorado River for flood-control, irrigation, and domestic water purposes, +all of which ma properly be considered as Government functions. There would +be an incidental creation of water power which could be used for generating +electricity. As private enterprise can very well fill this field, there is +no need for the Government to go into it. It is unfortunate that the States +interested in this water have been unable to agree among themselves. +Nevertheless, any legislation should give every possible safeguard to the +present and prospective rights of each of them. + +The Congress will have before it, the detailed report of a special board +appointed to consider the engineering and economic feasibility of this +project. From the short summary which I have seen of it, 11 judge they +consider the engineering problems can be met at somewhat increased cost +over previous estimates. They prefer the Black Canyon site. On the economic +features they are not so clear and appear to base their conclusions on many +conditions which can not be established with certainty. So far as I can +judge, however, from the summary, their conclusions appear sufficiently +favorable, so that I feel warranted in recommending a measure which will +protect the rights of the States, discharge the necessary Government +functions, and leave the electrical field to private. enterprise. + +MUSCLE SHOALS + +The development of other methods of producing nitrates will probably render +this plant less important for that purpose than formerly. But we have it, +and I am told it still provides a practical method of making nitrates for +national defense and farm fertilizers. By dividing the property into its +two component parts of power and nitrate plants it would be possible to +dispose of the power, reserving the right to any concern that wished to +make nitrates to use any power that might be needed for that purpose. Such +a disposition of the power plant can be made that will return in rental +about $2,000,000 per year. If the Congress would giant the Secretary of War +authority to lease the nitrate plant on such terms as would insure the +largest production of nitrates, the entire property could begin to + +function. Such a division, I am aware, has never seemed to appeal to the +Congress. I should also gladly approve a bill granting authority to lease +the entire property for the production of nitrates. + +I wish to avoid building another, (lam at public expense. Future operators +should provide For that themselves. But if they were to be required to +repay the cost of such dam with tile prevailing commercial rates for +interest, this difficulty will be considerably lessened. Nor do I think +this property should be made a vehicle for putting the United States +Government indiscriminately into the private and retail field of power +distribution and nitrate sales. CONSERVATION + +The practical application of economy to the resources of the country calls +for conservation. This does not mean that every resource should not be +developed to its full degree, but it means that none of them should be +wasted. We have a conservation board working on our oil problem. This is of +the utmost importance to the future well-being of our people in this age of +oil-burning engines and tile general application of gasoline to +transportation. The Secretary of the Interior should not be compelled to +lease oil lands of the Osage Indians when the market is depressed and the +future supply is in jeopardy. + +While the area of lands remaining in public ownership is small, compared +with the vast area in private ownership, the natural resources of those in +public ownership are of immense present and future value. This is +particularly trite as to minerals and water power. The proper bureaus have +been classifying these resources to the end that they may be conserved. +Appropriate estimates are being submitted, in the Budget, for the further +prosecution of this important work. IMMIGRATION + +The policy of restrictive immigration should be maintained. Authority +should be granted the Secretary of Labor to give immediate preference to +learned professions and experts essential to new industries. The reuniting +of families should be expedited. Our immigration and naturalization laws +might well be codified. + +WAGE EARNER + +In its economic life our country has rejected the long accepted law of a +limitation of the wage fund, which led to pessimism and despair because it +was the doctrine of perpetual poverty, and has substituted for it the +American conception that the only limit to profits and wages is production, +which is the doctrine of optimism and hope because it leads to prosperity. +Here and there the councils of labor are still darkened by the theory that +only by limiting individual production can there be any assurance of +permanent employment for increasing numbers, but in general, management and +wage earner alike have become emancipated from this doom and have entered a +new era in industrial thought which has unleashed the productive capacity +of the individual worker with an increasing scale of wages and profits, the +end of which is not yet. The application of this theory accounts for our +widening distribution of wealth. No discovery ever did more to increase the +happiness and prosperity of the people. + +Since 1922 increasing production has increased wages in general 12.9 per +cent, while in certain selected trades they have run as high as 34.9 per +cent and 38 per cent. Even in the boot and shoe shops the increase is over +5 per cent and in woolen mills 8.4 per cent, although these industries have +not prospered like others. As the rise in living costs in this period is +negligible, these figures represent real wage increases. + +The cause of constructive economy requires that the Government should +cooperate with private interests to eliminate the waste arising from +industrial accidents. This item, with all that has been done to reduce it, +still reaches enormous proportions with great suffering to the workman and +great loss to the country. + +WOMEN AND CHILDREN + +The Federal Government should continue its solicitous care for the +8,500,000 women wage earners and its efforts in behalf of public health, +which is reducing infant mortality and improving the 91odily and mental +condition of our citizens. + +CIVIL SERVICE + +The most marked change made in the civil service of the Government in the +past eight years relates to the increase in salaries. The Board of +Actuaries on the retirement act shows by its report, that July 1, 1921 the +average salary of the 330,047 employees subject to the act was J1,307, +while on June 30, 1927, the average salary of the corresponding, 405,263 +was $1,969. This was an increase in six years of nearly 53 per cent. On top +of this was the generous increase made at the last session of the Congress +generally applicable to Federal employees and another bill increasing the +pay in certain branches of the Postal Service beyond the large increase +which was made three years ago. This raised the average level from $1,969 +to $2,092, making an increase in seven years of over 63 per cent. While it +is well known that in the upper brackets the pay in the Federal + +service is much smaller than in private employment, in the lower brackets, +ranging well up over $3,000, it is much higher. It is higher not only in +actual money paid, but in privileges granted, a vacation of 30 actual +working days, or 5 weeks each year, with additional time running in some +departments as high as 30 days for sick leave and the generous provisions +of the retirement act. No other body of public servants ever occupied such +a fortunate position. EDUCATION + +Through the Bureau of Education of the Department of the Interior the +Federal Government, acting in an informative and advisory capacity, has +rendered valuable service. While this province be7crigspeculiarly to the +States, yet the promotion of education and efficiency in educational +methods is a general responsibility of the Federal Government. A survey of +negro colleges and universities in the United States has just been +completed l7y the Bureau of Education through funds provided by the +institutions themselves and through private sources. The present status of +negro higher education was determined and recommendations were made for its +advancement. This was one of the numerous cooperative undertakings of the +bureau. Following the invitation of the Association of Land Grant Colleges +and Universities, he Bureau of Education now has under way the survey of +agricultural colleges, authorized by Congress. The purpose of the survey is +to ascertain the accomplishments, the status, and the future objectives of +this type of educational training. It is now proposed to undertake a survey +of secondary schools, which educators insist is timely and essential. + +PUBLIC BUILDINGS + +We, have laid out a public building program for the District of Columbia +and the country at large runni110' into hundreds of millions of dollars. +Three important structures and one annex are already, under way and one +addition has been completed in the City of Washington. in the country sites +have been acquired, many buildings are in course of construction, and some +are already completed. Plans for all this work are being prepared in order +that it may be carried forward as rapidly as possible. This is the greatest +building program ever assumed by this Nation. It contemplates structures of +utility and of beauty. When it reaches completion the people will be well +served and the Federal city will be supplied with the most beautiful and +stately public buildings which adorn any capital in the world. + +THE AMERICAN INDIAN + +The administration of Indian affairs has been receiving intensive study for +several years. The Department of the Interior has been able to provide +better supervision of health, education, and industrial advancement of this +native race through additional funds provided by the Congress. The present +cooperative arrangement existing between the Bureau of Indian Affairs and +the Public Health Service should be extended. The Government's +responsibility to the American Indian has been acknowledged by annual +increases in appropria.l + +tions to fulfill its obligations to them and to hasten the time when +Federal supervision of their affairs may be properly and safely terminated. +The movement in Congress and in some of the State legislatures for +extending responsibility in Indian affairs to States should be encouraged. +A complete participation by the Indian in our economic life is the end to +be desired. + +THE NEGRO + +For 65 years now our negro Population has been under the peculiar care and +solicitude of the National Government. The progress which they have made in +education and the professions, in wealth and in the arts of civilization, +affords one of the most remarkable incidents in this period of world +history. They have demonstrated their ability to partake of the advantages +of our institutions and to benefit by a free and more and more independent +existence. Whatever doubt there may have been of their capacity to assume, +the status granted to them by the Constitution of this Union is being +rapidly dissipated. Their cooperation in the life of the Nation is +constantly enlarging. + +Exploiting the Negro problem for political ends is being abandoned and +their protection is being increased by those States in which their +percentage of population is largest. Every encouragement should be extended +for t le development of the race. The colored people have been the victims +of the crime of lynching, which has in late years somewhat decreased. Some +parts of the South already have wholesome laws for its restraint and +punishment. Their example might well be followed by other States, and by +such immediate remedial legislation as the Federal Government can extend +under the Constitution. + +PHILIPPINE ISLANDS + +Under the guidance of Governor General Stimson the economic and political +conditions of the Philippine Islands have been raised to a standard never +before surpassed. The cooperation between his administration and the people +of the islands is complete and harmonious. It would be an advantage if +relief from double taxation could be granted by the Congress to our +citizens doing business in the islands. + +PORTO RICO + +Due to the terrific storm that swept Porto Rico last September, the people +of that island suffered large losses. The Red Cross and the War Department +went to their rescue. The property loss is being, retrieved. Sugar, +tobacco, citrus fruit, and coffee, all suffered damage. The first three can +largely look after themselves. The coffee growers will need some +assistance, which should be *extended strictly on a business basis, and +only after most careful investigation. The people of Porto Rico are not +asking for charity. + +DEPARTMENT OF JUSTICE + +It is desirable that all the legal activities of the Government be +consolidated under the supervision of the Attorney General. In + +1870 it was felt necessary to create the Department of Justice for this +purpose. During the intervening period, either through legislation creating +law officers or departmental action, additional legal positions not under +the supervision of the Attorney General have been provided until there are +now over 900. Such a condition is as harmful to the interest of the +Government now as it was in 1870, and should be corrected by appropriate +legislation. + +SPECIAL GOVERNMENT COUNSEL + +In order to prosecute the oil cases, I suggested and the Congress enacted a +law providing for the appointment of two special counsel. They have pursued +their work with signal ability, recovering all the leased lands besides +nearly $30,000,000 in money, and nearly $17,000,000 in other property. They +find themselves hampered by a statute, which the Attorney General construes +as applying to them, prohibiting their appearing for private clients before +any department. For this reason, one has been compelled to resign. No good +result is secured by the application of this rule to these counsel, and as +Mr. Roberts has consented to take reappointment if the rule is abrogated I +recommend the passage of an amendment to the law creating their office +exempting them from the general rule against taking other cases involving +the Government. PROHIBITION + +The country has duly adopted the eighteenth amendment. Those who object to +it have the right to advocate its modification or repeal. Meantime) it is +binding upon the National and State Governments and all our inhabitants. +The Federal enforcement bureau is making every effort to prevent +violations, especially through smuggling, manufacture, and transportation, +and to prosecute generally all violations for which it can secure evidence. +It is bound to continue this policy. Under the terms of the Constitution, +however, the obligation is equally on the States to exercise the power +which they have through the executive, legislative. judicial, and police +branches of their governments in behalf of enforcement. The Federal +Government is doing and will continue to do all it can in this direction +and is entitled to7the active cooperation of the States. CONCLUSION + +The country is in the midst of an era of prosperity more extensive and of +peace more permanent than it has ever before experienced. But, having +reached this position, we should not fail to comprehend that it can easily +be lost. It needs more effort for its support than the less exalted places +of the world. We shall not be permitted to take our case, but shall +continue to be required to spend our days in unremitting toil. The actions +of the Government must command the confidence of the country. Without this, +our prosperity would be lost. We must extend to other countries the largest +measure of generosity, moderation, and patience. In addition to dealing +justly, we can well afford to walk humbly. + +The end of government is to keep open the opportunity for a more + +abundant life. Peace and prosperity are not finalities; they are only +methods. It is too easy under their influence for a nation to become +selfish and degenerate. This test has come to the United States. Our +country has been provided with the resources with which it can enlarge its +intellectual, moral, and spiritual life. The issue is in the hands of the +people. Our faith in man and God is the justification for the belief in our +continuing success. + + + +*** END OF THE PROJECT GUTENBERG EBOOK OF ADDRESSES BY CALVIN COOLIDGE *** + +This file should be named sucoo10.txt or sucoo10.zip +Corrected EDITIONS of our eBooks get a new NUMBER, sucoo11.txt +VERSIONS based on separate sources get new LETTER, sucoo10a.txt + +Project Gutenberg eBooks are often created from several printed +editions, all of which are confirmed as Public Domain in the US +unless a copyright notice is included. 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Please do not remove it. Do not change or edit the +header without written permission. + +Please read the "legal small print," and other information about the +eBook and Project Gutenberg at the bottom of this file. Included is +important information about your specific rights and restrictions in +how the file may be used. You can also find out about how to make a +donation to Project Gutenberg, and how to get involved. + + +**Welcome To The World of Free Plain Vanilla Electronic Texts** + +**eBooks Readable By Both Humans and By Computers, Since 1971** + +*****These eBooks Were Prepared By Thousands of Volunteers!***** + + +Title: State of the Union Addresses of Calvin Coolidge + +Author: Calvin Coolidge + +Release Date: February, 2004 [EBook #5036] +[Yes, we are more than one year ahead of schedule] +[This file was first posted on April 11, 2002] +[Date last updated: December 16, 2004] + +Edition: 11 + +Language: English + +Character set encoding: ASCII + +*** START OF THE PROJECT GUTENBERG EBOOK OF ADDRESSES BY CALVIN COOLIDGE *** + + + + +This eBook was produced by James Linden. + +The addresses are separated by three asterisks: *** + +Dates of addresses by Calvin Coolidge in this eBook: + December 6, 1923 + December 3, 1924 + December 8, 1925 + December 7, 1926 + December 6, 1927 + December 4, 1928 + + + +*** + +State of the Union Address +Calvin Coolidge +December 6, 1923 + +Since the close of the last Congress the Nation has lost President Harding. +The world knew his kindness and his humanity, his greatness and his +character. He has left his mark upon history. He has made justice more +certain and peace more secure. The surpassing tribute paid to his memory as +he was borne across the continent to rest at last at home revealed the +place he held in the hearts of the American people. But this is not the +occasion for extended reference to the man or his work. In this presence, +among these who knew and loved him, that is unnecessary. But we who were +associated with him could not resume together the functions of our office +without pausing for a moment, and in his memory reconsecrating ourselves to +the service of our country. He is gone. We remain. It is our duty, under +the inspiration of his example, to take up the burdens which he was +permitted to lay down, and to develop and support the wise principles of +government which he represented. + +FOREIGN AFFAIRS + +For us peace reigns everywhere. We desire to perpetuate it always by +granting full justice to others and requiring of others full justice to +ourselves. + +Our country has one cardinal principle to maintain in its foreign policy. +It is an American principle. It must be an American policy. We attend to +our own affairs, conserve our own strength, and protect the interests of +our own citizens; but we recognize thoroughly our obligation to help +others, reserving to the decision of our own Judgment the time, the place, +and the method. We realize the common bond of humanity. We know the +inescapable law of service. + +Our country has definitely refused to adopt and ratify the covenant of the +League of Nations. We have not felt warranted in assuming the +responsibilities which its members have assumed. I am not proposing any +change in this policy; neither is the Senate. The incident, so far as we +are concerned, is closed. The League exists as a foreign agency. We hope it +will be helpful. But the United States sees no reason to limit its own +freedom and independence of action by joining it. We shall do well to +recognize this basic fact in all national affairs and govern ourselves +accordingly. + +WORLD COURT + +Our foreign policy has always been guided by two principles. The one is the +avoidance of permanent political alliances which would sacrifice our proper +independence. The other is the peaceful settlement of controversies between +nations. By example and by treaty we have advocated arbitration. For nearly +25 years we have been a member of The Hague Tribunal, and have long sought +the creation of a permanent World Court of Justice. I am in full accord +with both of these policies. I favor the establishment of such a court +intended to include the whole world. That is, and has long been, an +American policy. + +Pending before the Senate is a proposal that this Government give its +support to the Permanent Court of International Justice, which is a new and +somewhat different plan. This is not a partisan question. It should not +assume an artificial importance. The court is merely a convenient +instrument of adjustment to which we could go, but to which we could not +be brought. It should be discussed with entire candor, not by a political +but by a judicial method, without pressure and without prejudice. +Partisanship has no place in our foreign relations. As I wish to see a +court established, and as the proposal presents the only practical plan on +which many nations have ever agreed, though it may not meet every desire, I +therefore commend it to the favorable consideration of the Senate, with the +proposed reservations clearly indicating our refusal to adhere to the +League of Nations. + +RUSSIA + +Our diplomatic relations, lately so largely interrupted, are now being +resumed, but Russia presents notable difficulties. We have every desire to +see that great people, who are our traditional friends, restored to their +position among the nations of the earth. We have relieved their pitiable +destitution with an enormous charity. Our Government offers no objection +to the carrying on of commerce by our citizens with the people of Russia. +Our Government does not propose, however, to enter into relations with +another regime which refuses to recognize the sanctity of international +obligations. I do not propose to barter away for the privilege of trade any +of the cherished rights of humanity. I do not propose to make merchandise +of any American principles. These rights and principles must go wherever +the sanctions of our Government go. + +But while the favor of America is not for sale, I am willing to make very +large concessions for the purpose of rescuing the people of Russia. Already +encouraging evidences of returning to the ancient ways of society can be +detected. But more are needed. Whenever there appears any disposition to +compensate our citizens who were despoiled, and to recognize that debt +contracted with our Government, not by the Czar, but by the newly formed +Republic of Russia; whenever the active spirit of enmity to our +institutions is abated; whenever there appear works mete for repentance; +our country ought to be the first to go to the economic and moral rescue of +Russia. We have every desire to help and no desire to injure. We hope the +time is near at hand when we can act. + +DEBTS + +The current debt and interest due from foreign Governments, exclusive of +the British debt of $4,600,000,000, is about $7,200,000,000. I do not favor +the cancellation of this debt, but I see no objection to adjusting it in +accordance with the principle adopted for the British debt. Our country +would not wish to assume the role of an oppressive creditor, but would +maintain the principle that financial obligations between nations are +likewise moral obligations which international faith and honor require +should be discharged. + +Our Government has a liquidated claim against Germany for the expense of +the army of occupation of over $255,000,000. Besides this, the Mixed Claims +Commission have before them about 12,500 claims of American citizens, +aggregating about $1,225,000,000. These claims have already been reduced by +a recent decision, but there are valid claims reaching well toward +$500,000,000. Our thousands of citizens with credits due them of hundreds +of millions of dollars have no redress save in the action of our +Government. These are very substantial interests, which it is the duty of +our Government to protect as best it can. That course I propose to pursue. + +It is for these reasons that we have a direct interest in the economic +recovery of Europe. They are enlarged by our desire for the stability of +civilization and the welfare of humanity. That we are making sacrifices to +that end none can deny. Our deferred interest alone amounts to a million +dollars every day. But recently we offered to aid with our advice and +counsel. We have reiterated our desire to see France paid and Germany +revived. We have proposed disarmament. We have earnestly sought to compose +differences and restore peace. We shall persevere in well-doing, not by +force, but by reason. + +FOREIGN PAPERS + +Under the law the papers pertaining to foreign relations to be printed are +transmitted as a part of this message. Other volumes of these papers will +follow. + +FOREIGN SERVICE + +The foreign service of our Government needs to be reorganized and +improved. + +FISCAL CONDITION + +Our main problems are domestic problems. Financial stability is the first +requisite of sound government. We can not escape the effect of world +conditions. We can not avoid the inevitable results of the economic +disorders which have reached all nations. But we shall diminish their harm +to us in proportion as we continue to restore our Government finances to a +secure and endurable position. This we can and must do. Upon that firm +foundation rests the only hope of progress and prosperity. From that source +must come relief for the people. + +This is being, accomplished by a drastic but orderly retrenchment, which is +bringing our expenses within our means. The origin of this has been the +determination of the American people, the main support has been the courage +of those in authority, and the effective method has been the Budget System. +The result has involved real sacrifice by department heads, but it has been +made without flinching. This system is a law of the Congress. It represents +your will. It must be maintained, and ought to be strengthened by the +example of your observance. Without a Budget System there can be no fixed +responsibility and no constructive scientific economy. + +This great concentration of effort by the administration and Congress has +brought the expenditures, exclusive of the self-supporting Post. Office +Department, down to three billion dollars. It is possible, in consequence, +to make a large reduction in the taxes of the people, which is the sole +object of all curtailment. This is treated at greater length in the Budget +message, and a proposed plan has been presented in detail in a statement by +the Secretary of the Treasury which has my unqualified approval. I +especially commend a decrease on earned incomes, and further abolition of +admission, message, and nuisance taxes. The amusement and educational +value of moving pictures ought not to be taxed. Diminishing charges against +moderate incomes from investment will afford immense relief, while a +revision of the surtaxes will not only provide additional money for capital +investment, thus stimulating industry and employing more but will not +greatly reduce the revenue from that source, and may in the future actually +increase it. + +Being opposed to war taxes in time of peace, I am not in favor of +excess-profits taxes. A very great service could be rendered through +immediate enactment of legislation relieving the people of some of the +burden of taxation. To reduce war taxes is to give every home a better +chance. + +For seven years the people have borne with uncomplaining courage the +tremendous burden of national and local taxation. These must both be +reduced. The taxes of the Nation must be reduced now as much as prudence +will permit, and expenditures must be reduced accordingly. High taxes reach +everywhere and burden everybody. They gear most heavily upon the poor. They +diminish industry and commerce. They make agriculture unprofitable. They +increase the rates on transportation. They are a charge on every necessary +of life. Of all services which the Congress can render to the country, I +have no hesitation in declaring t neglect it, to postpone it, to obstruct +it by unsound proposals, is to become unworthy of public confidence and +untrue to public trust. The country wants this measure to have the right of +way over an others. + +Another reform which is urgent in our fiscal system is the abolition of the +right to issue tax-exempt securities. The existing system not only permits +a large amount of the wealth of the Notion to escape its just burden but +acts as a continual stimulant to municipal extravagance. This should be +prohibited by constitutional amendment. All the wealth of the Nation ought +to contribute its fair share to the expenses of the Nation. + +TARIFF TAW + +The present tariff law has accomplished its two main objects. It has +secured an abundant revenue and been productive of an abounding prosperity. +Under it the country has had a very large export and import trade. A +constant revision of the tariff by the Congress is disturbing and harmful. +The present law contains an elastic provision authorizing the President to +increase or decrease present schedules not in excess of 50 per centum to +meet the difference in cost of production at home and abroad. This does +not, to my mind, warrant a rewriting g of the whole law, but does mean, and +will be so administered, that whenever the required investigation shows +that inequalities of sufficient importance exist in any schedule, the power +to change them should and will be applied. + +SHIPPING + +The entire well being of our country is dependent upon transportation by +sea and land. Our Government during the war acquired a large merchant fleet +which should be transferred, as soon as possible, to private ownership and +operation under conditions which would secure two results: First, and of +prime importance, adequate means for national defense; second, adequate +service to American commerce. Until shipping conditions are such that our +fleet can be disposed of advantageously under these conditions, it will be +operated as economically as possible under such plans as may be devised +from time to time by the Shipping Board. We must have a merchant marine +which meets these requirements, and we shall have to pay the cost of its +service. + +PUBLIC IMPROVEMENTS + +The time has come to resume in a moderate way the opening of our +intracoastal waterways; the control of flood waters of the Mississippi and +of the Colorado Rivers; the improvement of the waterways from the Great +Lakes toward the Gulf of Mexico; and the development of the great power and +navigation project of the St. Lawrence River, for which efforts are now +being made to secure the necessary treaty with Canada. These projects can +not all be undertaken at once, but all should have the immediate +consideration of the Congress and be adopted as fast as plans can be +matured and the necessary funds become available. This is not incompatible +with economy, for their nature does not require so much a public +expenditure as a capital investment which will be reproductive, as +evidenced by the marked increase in revenue from the Panama Canal. Upon +these projects depend much future industrial and agricultural progress. +They represent the protection of large areas from flood and the addition of +a great amount of cheap power and cheap freight by use of navigation, chief +of which is the bringing of ocean-going ships to the Great Lakes. + +Another problem of allied character is the superpower development of the +Northeastern States, consideration of which is growing under the direction +of the Department of Commerce by joint conference with the local +authorities. + +RAILROADS + +Criticism of the railroad law has been directed, first, to the section +laying down the rule by which rates are fixed, and providing for payment to +the Government and use of excess earnings; second, to the method for the +adjustment of wage scales; and third, to the authority permitting +consolidations. + +It has been erroneously assumed that the act undertakes to guarantee +railroad earnings. The law requires that rates should be just and +reasonable. That has always been the rule under which rates have been +fixed. To make a rate that does not yield a fair return results in +confiscation, and confiscatory rates are of course unconstitutional. Unless +the Government adheres to the rule of making a rate that will yield a fair +return, it must abandon rate making altogether. The new and important +feature of that part of the law is the recapture and redistribution of +excess rates. The constitutionality of this method is now before the +Supreme Court for adjudication. Their decision should be awaited before +attempting further legislation on this subject. Furthermore, the importance +of this feature will not be great if consolidation goes into effect. + +The settlement of railroad labor disputes is a matter of grave public +concern. The Labor Board was established to protect the public in the +enjoyment of continuous service by attempting to insure justice between the +companies and their employees. It has been a great help, but is not +altogether satisfactory to the public, the employees, or the companies. If +a substantial agreement can be reached among the groups interested, there +should be no hesitation in enacting such agreement into law. If it is not +reached, the Labor Board may very well be left for the present to protect +the public welfare. + +The law for consolidations is not sufficiently effective to be expeditious. +Additional legislation is needed giving authority for voluntary +consolidations, both regional and route, and providing Government machinery +to aid and stimulate such action, always subject to the approval of the +Interstate Commerce Commission. This should authorize the commission to +appoint committees for each proposed group, representing the public and the +component roads, with power to negotiate with individual security holders +for an exchange of their securities for those of the, consolidation on such +terms and conditions as the commission may prescribe for avoiding any +confiscation and preserving fair values. Should this permissive +consolidation prove ineffective after a limited period, the authority of +the Government will have to be directly invoked. + +Consolidation appears to be the only feasible method for the maintenance of +an adequate system of transportation with an opportunity so to adjust +freight rates as to meet such temporary conditions as now prevail in some +agricultural sections. Competent authorities agree that an entire +reorganization of the rate structure for freight is necessary. This should +be ordered at once by the Congress. + +DEPARTMENT OF JUSTICE + +As no revision of the laws of the United States has been made since 1878, a +commission or committee should be created to undertake this work. The +Judicial Council reports that two more district judges are needed in the +southern district of New York, one in the northern district of Georgia, and +two more circuit judges in the Circuit Court of Appeals of the Eighth +Circuit. Legislation should be considered for this purpose. + +It is desirable to expedite the hearing and disposal of cases. A +commission of Federal judges and lawyers should be created to recommend +legislation by which the procedure in the Federal trial courts may be +simplified and regulated by rules of court, rather than by statute; such +rules to be submitted to the Congress and to be in force until annulled or +modified by the Congress. The Supreme Court needs legislation revising and +simplifying the laws governing review by that court, and enlarging the +classes of cases of too little public importance to be subject to review. +Such reforms would expedite the transaction of the business of the courts. +The administration of justice is likely to fail if it be long delayed. + +The National Government has never given adequate attention to its prison +problems. It ought to provide employment in such forms of production as can +be used by the Government, though not sold to the public in competition +with private business, for all prisoners who can be placed at work, and for +which they should receive a reasonable compensation, available for their +dependents. + +Two independent reformatories are needed; one for the segregation of women, +and another for the segregation of young men serving their first sentence. + +The administration of justice would be facilitated greatly by including in +the Bureau of Investigation of the Department of Justice a Division of +Criminal Identification, where there would be collected this information +which is now indispensable in the suppression of crime. + +PROHIBITION + +The prohibition amendment to the Constitution requires the Congress. and +the President to provide adequate laws to prevent its violation. It is my +duty to enforce such laws. For that purpose a treaty is being negotiated +with Great Britain with respect to the right of search of hovering +vessels. To prevent smuggling, the Coast Card should be greatly +strengthened, and a supply of swift power boats should be provided. The +major sources of production should be rigidly regulated, and every effort +should be made to suppress interstate traffic. With this action on the part +of the National Government, and the cooperation which is usually rendered +by municipal and State authorities, prohibition should be made effective. +Free government has no greater menace than disrespect for authority and +continual violation of law. It is the duty of a citizen not only to observe +the law but to let it be known that he is opposed to its violation. + +THE NEGRO + +Numbered among our population are some 12,000,000 colored people. Under our +Constitution their rights are just as sacred as those of any other citizen. +It is both a public and a private duty to protect those rights. The +Congress ought to exercise all its powers of prevention and punishment +against the hideous crime of lynching, of which the negroes are by no means +the sole sufferers, but for which they furnish a majority of the victims. + +Already a considerable sum is appropriated to give the negroes vocational +training in agriculture. About half a million dollars is recommended for +medical courses at Howard University to help contribute to the education of +500 colored doctors needed each year. On account of the integration of +large numbers into industrial centers, it has been proposed that a +commission be created, composed of members from both races, to formulate a +better policy for mutual understanding and confidence. Such an effort is to +be commended. Everyone would rejoice in the accomplishment of the results +which it seeks. But it is well to recognize that these difficulties are to +a large extent local problems which must be worked out by the mutual +forbearance and human kindness of each community. Such a method gives much +more promise of a real remedy than outside interference. + +CIVIL SERVICE + +The maintenance and extension of the classified civil service is +exceedingly important. There are nearly 550,000 persons in the executive +civil service drawing about $700,000,000 of yearly compensation. +Four-fifths of these are in the classified service. This method of +selection of the employees of the United States is especially desirable for +the Post Office Department. The Civil Service Commission has recommended +that postmasters at first, second, and third class offices be classified. +Such action, accompanied by a repeal of the four-year term of office, would +undoubtedly be an improvement. I also recommend that the field force for +prohibition enforcement be brought within the classified civil service +without covering in the present membership. The best method for selecting +public servants is the merit system. + +PUBLIC BUILDINGS + +Many of the departments in Washington need better housing facilities. Some +are so crowded that their work is impeded, others are so scattered that +they lose their identity. While I do not favor at this time a general +public building law, I believe it is now necessary, in accordance with +plans already sanctioned for a unified and orderly system for the +development of this city, to begin the carrying out of those plans by +authorizing the erection of three or four buildings most urgently needed by +an annual appropriation of $5,000,000. + +REGULATORY LEGISLATION + +Cooperation with other maritime powers is necessary for complete protection +of our coast waters from pollution. Plans for this are under way, but +await certain experiments for refuse disposal. Meantime laws prohibiting +spreading oil and oil refuse from vessels in our own territorial waters +would be most helpful against this menace and should be speedily enacted. + +Laws should be passed regulating aviation. + +Revision is needed of the laws regulating radio interference. + +Legislation and regulations establishing load liner, to provide safe +loading of vessels leaving our ports are necessary and recodification of +our navigation laws is vital. + +Revision of procedure of the Federal Trade Commission will give more +constructive purpose to this department. + +If our Alaskan fisheries are to be saved from destruction, there must be +further legislation declaring a general policy and delegating the authority +to make rules and regulations to an administrative body. + +ARMY AND NAVY + +For several years we have been decreasing the personnel of the Army and +Navy, and reducing their power to the danger point. Further reductions +should not be made. The Army is a guarantee of the security of our citizens +at home; the Navy is a guarantee of the security of our citizens abroad. +Both of these services should be strengthened rather than weakened. +Additional planes are needed for the Army, and additional submarines for +the Navy. The defenses of Panama must be perfected. We want no more +competitive armaments. We want no more war. But we want no weakness that +invites imposition. A people who neglect their national defense are putting +in jeopardy their national honor. + +INSULAR POSSESSIONS + +Conditions in the insular possessions on the whole have been good. Their +business has been reviving. They are being administered according to law. +That effort has the full support of the administration. Such +recommendations as may conic from their people or their governments should +have the most considerate attention. + +EDUCATION AND WELFARE + +Our National Government is not doing as much as it legitimately can do to +promote the welfare of the people. Our enormous material wealth, our +institutions, our whole form of society, can not be considered fully +successful until their benefits reach the merit of every individual. This +is not a suggestion that the Government should, or could, assume for the +people the inevitable burdens of existence. There is no method by which we +can either be relieved of the results of our own folly or be guaranteed a +successful life. There is an inescapable personal responsibility for the +development of character, of industry, of thrift, and of self-control. +These do not come from the Government, but from the people themselves. But +the Government can and should always be expressive of steadfast +determination, always vigilant, to maintain conditions under which these +virtues are most likely to develop and secure recognition and reward. This +is the American policy. + +It is in accordance with this principle that we have enacted laws for the +protection of the public health and have adopted prohibition in narcotic +drugs and intoxicating liquors. For purposes of national uniformity we +ought to provide, by constitutional amendment and appropriate legislation, +for a limitation of child labor, and in all cases under the exclusive +jurisdiction of the Federal Government a minimum wage law for women, which +would undoubtedly find sufficient power of enforcement in the influence of +public opinion. + +Having in mind that education is peculiarly a local problem, and that it +should always be pursued with the largest freedom of choice by students and +parents, nevertheless, the Federal Government might well give the benefit +of its counsel and encouragement more freely in this direction. If anyone +doubts the need of concerted action by the States of the Nation for this +purpose, it is only necessary to consider the appalling figures of +illiteracy representing a condition which does not vary much in all parts +of the Union. I do not favor the making of appropriations from the National +Treasury to be expended directly on local education, but I do consider it a +fundamental requirement of national activity which, accompanied by allied +subjects of welfare, is worthy of a separate department and a place in the +Cabinet. The humanitarian side of government should not be repressed, but +should be cultivated. + +Mere intelligence, however, is not enough. Enlightenment must be +accompanied by that moral power which is the product of the home and of +rebellion. Real education and true welfare for the people rest inevitably +on this foundation, which the Government can approve and commend, but which +the people themselves must create. + +IMMIGRATION + +American institutions rest solely on good citizenship. They were created by +people who had a background of self-government. New arrivals should be +limited to our capacity to absorb them into the ranks of good citizenship. +America must be kept American. For this purpose, it is necessary to +continue a policy of restricted immigration. It would be well to make such +immigration of a selective nature with some inspection at the source, and +based either on a prior census or upon the record of naturalization. Either +method would insure the admission of those with the largest capacity and +best intention of becoming citizens. I am convinced that our present +economic and social conditions warrant a limitation of those to be +admitted. We should find additional safety in a law requiring the immediate +registration of all aliens. Those who do not want to be partakers of the +American spirit ought not to settle in America. + +VETERANS + +No more important duty falls on the Government of the United States than +the adequate care of its veterans. Those suffering disabilities incurred in +the service must have sufficient hospital relief and compensation. Their +dependents must be supported. Rehabilitation and vocational training must +be completed. All of this service must be clean, must be prompt and +effective, and it must be administered in a spirit of the broadest and +deepest human sympathy. If investigation reveals any present defects of +administration or need Of legislation, orders will be given for the +immediate correction of administration, and recommendations for legislation +should be given the highest preference. + +At present there are 9,500 vacant beds in Government hospitals, I recommend +that all hospitals be authorized at once to receive and care for, without +hospital pay, the veterans of all wars needing such care, whenever there +are vacant beds, and that immediate steps be taken to enlarge and build new +hospitals to serve all such cases. + +The American Legion will present to the Congress a legislative program +too extensive for detailed discussion here. It is a carefully matured plan. +While some of it I do not favor, with much of it I am in hearty accord, and +I recommend that a most painstaking effort be made to provide remedies for +any defects in the administration of the present laws which their +experience has revealed. The attitude of the Government toward these +proposals should be one of generosity. But I do not favor the granting of a +bonus. + +COAL + +The cost of coal has become unbearably high. It places a great burden on +our industrial and domestic life. The public welfare requires a reduction +in the price of fuel. With the enormous deposits in existence, failure of +supply ought not to be tolerated. Those responsible for the conditions in +this industry should undertake its reform and free it from any charge of +profiteering. + +The report of the Coal Commission will be before the Congress. It comprises +all the facts. It represents the mature deliberations and conclusions of +the best talent and experience that ever made a national survey of the +production and distribution of fuel. I do not favor Government ownership or +operation of coal mines. The need is for action under private ownership +that will secure greater continuity of production and greater public +protection. The Federal Government probably has no peacetime authority to +regulate wages, prices, or profits in coal at the mines or among dealers, +but by ascertaining and publishing facts it can exercise great influence. + +The source of the difficulty in the bituminous coal fields is the +intermittence of operation which causes great waste of both capital and +labor. That part of the report dealing with this problem has much +significance, and is suggestive of necessary remedies. By amending, the car +rules, by encouraging greater unity of ownership, and possibly by +permitting common selling agents for limited districts on condition that +they accept adequate regulations and guarantee that competition between +districts be unlimited, distribution, storage, and continuity ought to be +improved. + +The supply of coal must be constant. In case of its prospective +interruption, the President should have authority to appoint a commission +empowered to deal with whatever emergency situation might arise, to aid +conciliation and voluntary arbitration, to adjust any existing or +threatened controversy between the employer and the employee when +collective bargaining fails, and by controlling distribution to prevent +profiteering in this vital necessity. This legislation is exceedingly +urgent, and essential to the exercise of national authority for the +protection of the people. Those who undertake the responsibility of +management or employment in this industry do so with the full knowledge +that the public interest is paramount, and that to fail through any motive +of selfishness in its service is such a betrayal of duty as warrants +uncompromising action by the Government. + +REORGANIZATION + +A special joint committee has been appointed to work out a plan for a +reorganization of the different departments and bureaus of the Government +more scientific and economical than the present system. With the exception +of the consolidation of the War and Navy Departments and some minor +details, the plan has the general sanction of the President and the +Cabinet. It is important that reorganization be enacted into law at the +present session. + +AGRICULTURE + +Aided by the sound principles adopted by the Government, the business of +the country has had an extraordinary revival. Looked at as a whole, the +Nation is in the enjoyment of remarkable prosperity. Industry and commerce +are thriving. For the most tart agriculture is successful, eleven staples +having risen in value from about $5,300,000,000 two years ago to about. +$7,000,000,000 for the current year. But range cattle are still low in +price, and some sections of the wheat area, notably Minnesota, North +Dakota, and on west, have many cases of actual distress. With his products +not selling on a parity with the products of industry, every sound remedy +that can be devised should be applied for the relief of the farmer. He +represents a character, a type of citizenship, and a public necessity that +must be preserved and afforded every facility for regaining prosperity. + +The distress is most acute among those wholly dependent upon one crop.. +Wheat acreage was greatly expanded and has not yet been sufficiently +reduced. A large amount is raised for export, which has to meet the +competition in the world market of large amounts raised on land much +cheaper and much more productive. + +No complicated scheme of relief, no plan for Government fixing of prices, +no resort to the public Treasury will be of any permanent value in +establishing agriculture. Simple and direct methods put into operation by +the farmer himself are the only real sources for restoration. + +Indirectly the farmer must be relieved by a reduction of national and local +taxation. He must be assisted by the reorganization of the freight-rate +structure which could reduce charges on his production. To make this fully +effective there ought to be railroad consolidations. Cheaper fertilizers +must be provided. + +He must have organization. His customer with whom he exchanges products o +he farm for those of industry is organized, labor is organized, business is +organized, and there is no way for agriculture to meet this unless it, too, +is organized. The acreage of wheat is too large. Unless we can meet the +world market at a profit, we must stop raising for export. Organization +would help to reduce acreage. Systems of cooperative marketing created by +the farmers themselves, supervised by competent management, without doubt +would be of assistance, but, the can not wholly solve the problem. Our +agricultural schools ought to have thorough courses in the theory of +organization and cooperative marketing. + +Diversification is necessary. Those farmers who raise their living on their +land are not greatly in distress. Such loans as are wisely needed to assist +buying stock and other materials to start in this direction should be +financed through a Government agency as a temporary and emergency +expedient. + +The remaining difficulty is the disposition of exportable wheat. I do not +favor the permanent interference of the Government in this problem. That +probably would increase the trouble by increasing production. But it seems +feasible to provide Government assistance to exports, and authority should +be given the War Finance Corporation to grant, in its discretion, the most +liberal terms of payment for fats and grains exported for the direct +benefit of the farm. + +MUSCLE SHOALS + +The Government is undertaking to develop a great water-power project known +as Muscle Shoals, on which it has expended many million dollars. The work +is still going on. Subject to the right to retake in time of war, I +recommend that this property with a location for auxiliary steam plant and +rights of way be sold. This would end the present burden of expense and +should return to the Treasury the largest price possible to secure. + +While the price is an important element, there is another consideration +even more compelling. The agriculture of the Nation needs a greater supply +and lower cost of fertilizer. This is now imported in large quantities. The +best information I can secure indicates that present methods of power +production would not be able profitably to meet the price at which these +imports can be sold. To obtain a supply from this water power would require +long and costly experimentation to perfect a process for cheap production. +Otherwise our purpose would fail completely. It seems desirable, therefore, +in order to protect and promote the public welfare, to have adequate +covenants that such experimentation be made and carried on to success. The +great advantage of low-priced nitrates must be secured for the direct +benefit of the farmers and the indirect benefit of the public in time of +peace, and of the Government in time of war. If this main object be +accomplished, the amount of money received for the property is not a +primary or major consideration. + +Such a solution will involve complicated negotiations, and there is no +authority for that purpose. I therefore recommend that the Congress +appoint a small joint committee to consider offers, conduct negotiations, +and report definite recommendations. + +RECLAMATION + +By reason of many contributing causes, occupants of our reclamation +projects are in financial difficulties, which in some cases are acute. +Relief should be granted by definite authority of law empowering the +Secretary of the Interior in his discretion to suspend, readjust, and +reassess all charges against water users. This whole question is being +considered by experts. You will have the advantage of the facts and +conclusions which they may develop. This situation, involving a Government +investment of more than $135,000,000, and affecting more than 30,000 water +users, is serious. While relief which is necessary should be granted, yet +contracts with the Government which can be met should be met. The +established general policy of these projects should not be abandoned for +any private control. + +HIGHWAYS AND FORESTS + +Highways and reforestation should continue to have the interest and support +of the Government. Everyone is anxious for good highways. I have made a +liberal proposal in the Budget for the continuing payment to the States by +the Federal Government of its share for this necessary public improvement. +No expenditure of public money contributes so much to the national wealth +as for building good roads. + +Reforestation has an importance far above the attention it usually secures. +A special committee of the Senate is investigating this need, and I shall +welcome a constructive policy based on their report. + +It is 100 years since our country announced the Monroe doctrine. This +principle has been ever since, and is now, one of the main foundations of +our foreign relations. It must be maintained. But in maintaining it we must +not be forgetful that a great change has taken place. We are no longer a +weak Nation, thinking mainly of defense, dreading foreign imposition. We +are great and powerful. New powers bring new responsibilities. Our ditty +then was to protect ourselves. Added to that, our duty now is to help give +stability to the world. We want idealism. We want that vision which lifts +men and nations above themselves. These are virtues by reason of their own +merit. But they must not be cloistered; they must not be impractical; they +must not be ineffective. + +The world has had enough of the curse of hatred and selfishness, of +destruction and war. It has had enough of the wrongful use of material +power. For the healing of the nations there must be good will and charity, +confidence and peace. The time has come for a more practical use of moral +power, and more reliance upon the principle that right makes its own might. +Our authority among the nations must be represented by justice and mercy. +It is necessary not only to have faith, but to make sacrifices for our +faith. The spiritual forces of the world make all its final determinations. +It is with these voices that America should speak. Whenever they declare a +righteous purpose there need be no doubt that they will be heard. America +has taken her place in the world as a Republic--free, independent, +powerful. The best service that can be rendered to humanity is the +assurance that this place will be maintained. + +*** + +State of the Union Address +Calvin Coolidge +December 3, 1924 + +To the Congress of the United States: + +The present state of the Union, upon which it is customary for the +President to report to the Congress under the provisions of the +Constitution, is such that it may be regarded with encouragement and +satisfaction by every American. Our country is almost unique in its ability +to discharge fully and promptly all its obligations at home and abroad, and +provide for all its inhabitants an increase in material resources, in +intellectual vigor and in moral power. The Nation holds a position +unsurpassed in all former human experience. This does not mean that we do +not have any problems. It is elementary that the increasing breadth of our +experience necessarily increases the problems of our national life. But it +does mean that if all will but apply ourselves industriously and honestly, +we have ample powers with which to meet our problems and provide for I heir +speedy solution. I do not profess that we can secure an era of perfection +in human existence, but we can provide an era of peace and prosperity, +attended with freedom and justice and made more and more satisfying by the +ministrations of the charities and humanities of life. + +Our domestic problems are for the most part economic. We have our enormous +debt to pay, and we are paying it. We have the high cost of government to +diminish, and we are diminishing it. We have a heavy burden of taxation to +reduce, and we are reducing it. But while remarkable progress has been made +in these directions, the work is yet far from accomplished. We still owe +over $21,000,000,000, the cost of the National Government is still about +$3,500,000,000, and the national taxes still amount to about $27 for each +one of our inhabitants. There yet exists this enormous field for the +application of economy. + +In my opinion the Government can do more to remedy the economic ills of the +people by a system of rigid economy in public expenditure than can be +accomplished through any other action. The costs of our national and local +governments combined now stand at a sum close to $100 for each inhabitant +of the land. A little less than one-third of this is represented by +national expenditure, and a little more than two-thirds by local +expenditure. It is an ominous fact that only the National Government is +reducing its debt. Others are increasing theirs at about $1,000,000,000 +each year. The depression that overtook business, the disaster experienced +in agriculture, the lack of employment and the terrific shrinkage in all +values which our country experienced in a most acute form in 1920, resulted +in no small measure from the prohibitive taxes which were then levied on +all productive effort. The establishment of a system of drastic economy in +public expenditure, which has enabled us to pay off about one-fifth of the +national debt since 1919, and almost cut in two the national tax burden +since 1921, has been one of the main causes in reestablishing a prosperity +which has come to include within its benefits almost every one of our +inhabitants. Economy reaches everywhere. It carries a blessing to +everybody. + +The fallacy of the claim that the costs of government are borne by the rich +and those who make a direct contribution to the National Treasury can not +be too often exposed. No system has been devised, I do not think any system +could be devised, under which any person living in this country could +escape being affected by the cost of our government. It has a direct effect +both upon the rate and the purchasing power of wages. It is felt in the +price of those prime necessities of existence, food, clothing, fuel and +shelter. It would appear to be elementary that the more the Government +expends the more it must require every producer to contribute out of his +production to the Public Treasury, and the less he will have for his own +benefit. The continuing costs of public administration can be met in only +one way--by the work of the people. The higher they become, the more the +people must work for the Government. The less they are, the more the people +can work for themselves. + +The present estimated margin between public receipts and expenditures for +this fiscal year is very small. Perhaps the most important work that this +session of the Congress can do is to continue a policy of economy and +further reduce the cost of government, in order that we may have a +reduction of taxes for the next fiscal year. Nothing is more likely to +produce that public confidence which is the forerunner and the mainstay of +prosperity, encourage and enlarge business opportunity with ample +opportunity for employment at good wages, provide a larger market for +agricultural products, and put our country in a stronger position to be +able to meet the world competition in trade, than a continuing policy of +economy. Of course necessary costs must be met, proper functions of the +Government performed, and constant investments for capital account and +reproductive effort must be carried on by our various departments. But the +people must know that their Government is placing upon them no unnecessary +burden. + +TAXES + +Everyone desires a reduction of taxes, and there is a great preponderance +of sentiment in favor of taxation reform. When I approved the present tax +law, I stated publicly that I did so in spite of certain provisions which I +believed unwise and harmful. One of the most glaring of these was the +making public of the amounts assessed against different income-tax payers. +Although that damage has now been done, I believe its continuation to be +detrimental To the public welfare and bound to decrease public revenues, so +that it ought to be repealed. + +Anybody can reduce taxes, but it is not so easy to stand in the gap and +resist the passage of increasing appropriation bills which would make tax +reduction impossible. It will be very easy to measure the strength of the +attachment to reduced taxation by the power with which increased +appropriations are resisted. If at the close of the present session the +Congress has kept within the budget which I propose to present, it will +then be possible to have a moderate amount of tax reduction and all the tax +reform that the Congress may wish for during the next fiscal year. The +country is now feeling the direct stimulus which came from the passage of +the last revenue bill, and under the assurance of a reasonable system of +taxation there is every prospect of an era of prosperity of unprecedented +proportions. But it would be idle to expect any such results unless +business can continue free from excess profits taxation and be accorded a +system of surtaxes at rates which have for their object not the punishment +of success or the discouragement of business, but the production of the +greatest amount of revenue from large incomes. I am convinced that the +larger incomes of the country would actually yield more revenue to the +Government if the basis of taxation were scientifically revised downward. +Moreover the effect of the present method of this taxation is to increase +the cost of interest on productive enterprise and to increase the burden +of rent. It is altogether likely that such reduction would so encourage and +stimulate investment that it would firmly establish our country in the +economic leadership of the world. + +WATERWAYS + +Meantime our internal development should go on. Provision should be made +for flood control of such rivers as the Mississippi and the Colorado, and +for the opening up of our inland waterways to commerce. Consideration is +due to the project of better navigation from the Great Lakes to the Gulf. +Every effort is being made to promote an agreement with Canada to build +the, St. Lawrence waterway. There are pending before the Congress bills for +further development of the Mississippi Basin, for the taking over of the +Cape Cod Canal in accordance with a moral obligation which seems to have +been incurred during the war, and for the improvement of harbors on both +the Pacific and the Atlantic coasts. While this last should be divested of +some of its projects and we must proceed slowly, these bills in general +have my approval. Such works are productive of wealth and in the long run +tend to a reduction of the tax burden. + +RECLAMATION + +Our country has a well defined policy of reclamation established under +statutory authority. This policy should be continued and made a +self-sustaining activity administered in a manner that will meet local +requirements and bring our and lands into a profitable state of cultivation +as fast as there is a market for their products. Legislation is pending +based on the report of the Fact Finding Commission for the proper relief of +those needing extension of time in which to meet their payments on +irrigated land, and for additional amendments and reforms of our +reclamation laws, which are all exceedingly important and should be enacted +at once. + +No more important development has taken place in the last year than the +beginning of a restoration of agriculture to a prosperous condition. We +must permit no division of classes in this country, with one occupation +striving to secure advantage over another. Each must proceed under open +opportunities and with a fair prospect of economic equality. The Government +can not successfully insure prosperity or fix prices by legislative fiat. +Every business has its risk and its times of depression. It is well known +that in the long run there will be a more even prosperity and a more +satisfactory range of prices under the natural working out of economic laws +than when the Government undertakes the artificial support of markets and +industries. Still we can so order our affairs, so protect our own people +from foreign competition, so arrange our national finances, so administer +our monetary system, so provide for the extension of credits, so improve +methods of distribution, as to provide a better working machinery for the +transaction of the business of the Nation with the least possible friction +and loss. The Government has been constantly increasing its efforts in +these directions for the relief and permanent establishment of agriculture +on a sound and equal basis with other business. + +It is estimated that the value of the crops for this harvest year may reach +$13,000,000,000, which is an increase of over $3,000,000,000 in three +years. It compares with $7,100,000,000 in 1913, and if we make deduction +from the figures of 1924 for the comparatively decreased value of the +dollar, the yield this year still exceeds 1913 in purchasing power by over +$1,000,000,000, and in this interval there has been no increase in the +number of farmers. Mostly by his own effort the farmer has decreased the +cost of production. A marked increase in the price of his products and some +decrease in the price of his supplies has brought him about to a parity +with the rest of the Nation. The crop area of this season is estimated at +370,000,000 acres, which is a decline of 3,000,000 acres from last year, +and 6,000,000 acres from 1919. This has been a normal and natural +application of economic laws, which has placed agriculture on a foundation +which is undeniably sound and beginning to be satisfactory. + +A decrease in the world supply of wheat has resulted in a very large +increase in the price of that commodity. The position of all agricultural +products indicates a better balanced supply, but we can not yet conclude +that agriculture is recovered from the effects of the war period or that it +is permanently on a prosperous basis. The cattle industry has not yet +recovered and in some sections has been suffering from dry weather. Every +effort must be made both by Government activity and by private agencies to +restore and maintain agriculture to a complete normal relationship with +other industries. + +It was on account of past depression, and in spite of present more +encouraging conditions, that I have assembled an Agricultural Conference +made up of those who are representative of this great industry in both its +operating and economic sides. Everyone knows that the great need of the +farmers is markets. The country is not suffering on the side of production. +Almost the entire difficulty is on the side of distribution. This reaches +back, of course, to unit costs and diversification, and many allied +subjects. It is exceedingly intricate, for our domestic and foreign trade, +transportation and banking, and in fact our entire economic system, are +closely related to it. In time for action at this session, I hope to report +to the Congress such legislative remedies as the conference may recommend. +An appropriation should be made to defray their necessary expenses. + +MUSCLE SHOALS + +The production of nitrogen for plant food in peace and explosives in war is +more and more important. It is one of the chief sustaining elements of +life. It is estimated that soil exhaustion each year is represented by +about 9,000,000 tons and replenishment by 5,450,000 tons. The deficit of +3,550,000 tons is reported to represent the impairment of 118,000,000 acres +of farm lands each year. + +To meet these necessities the Government has been developing a water power +project at Muscle Shoals to be equipped to produce nitrogen for explosives +and fertilizer. It is my opinion that the support of agriculture is the +chief problem to consider in connection with this property. It could by no +means supply the present needs for nitrogen, but it would help and its +development would encourage bringing other water powers into like use. + +Several offers have been made for the purchase of this property. Probably +none of them represent final terms. Much costly experimentation is +necessary to produce commercial nitrogen. For that reason it is a field +better suited to private enterprise than to Government operation. I should +favor a sale of this property, or long-time lease, tinder rigid guaranties +of commercial nitrogen production at reasonable prices for agricultural +use. There would be a surplus of power for many years over any possibility +of its application to a developing manufacture of nitrogen. It may be found +advantageous to dispose of the right to surplus power separately with such +reservations as will allow its gradual withdrawal and application to +nitrogen manufacture. A subcommittee of the Committees on Agriculture +should investigate this field and negotiate with prospective purchasers. If +no advantageous offer be made, the development should continue and the +plant should be dedicated primarily to the production of materials for the +fertilization of the soil. + +RAILWAYS + +The railways during the past year have made still further progress in +recuperation from the war, with large rains in efficiency and ability +expeditiously to handle the traffic of the country. We have now passed +through several periods of peak traffic without the car shortages which so +frequently in the past have brought havoc to our agriculture and +industries. The condition of many of our great freight terminals is still +one of difficulty and results in imposing, large costs on the public for +inward-bound freight, and on the railways for outward-bound freight. Owing +to the growth of our large cities and the great increase in the volume of +traffic, particularly in perishables, the problem is not only difficult of +solution, but in some cases not wholly solvable by railway action alone. + +In my message last year I emphasized the necessity for further legislation +with a view to expediting the consolidation of our rail ways into larger +systems. The principle of Government control of rates and profits, now +thoroughly imbedded in our governmental attitude toward natural monopolies +such as the railways, at once eliminates the need of competition by small +units as a method of rate adjustment. Competition must be preserved as a +stimulus to service, but this will exist and can be increased tinder +enlarged systems. Consequently the consolidation of the railways into +larger units for the purpose of securing the substantial values to the +public which will come from larger operation has been the logical +conclusion of Congress in its previous enactments, and is also supported by +the best opinion in the country. Such consolidation will assure not only a +greater element of competition as to service, but it will afford economy in +operation, greater stability in railway earnings, and more economical +financing. It opens large possibilities of better equalization of rates +between different classes of traffic so as to relieve undue burdens upon +agricultural products and raw materials generally, which are now not +possible without ruin to small units owing to the lack of diversity of +traffic. It would also tend to equalize earnings in such fashion as to +reduce the importance of section 15A, at which criticism, often misapplied, +has been directed. A smaller number of units would offer less difficulties +in labor adjustments and would contribute much to the, solution of terminal +difficulties. + +The consolidations need to be carried out with due regard to public +interest and to the rights and established life of various communities in +our country. It does not seem to me necessary that we endeavor to +anticipate any final plan or adhere to an artificial and unchangeable +project which shall stipulate a fixed number of systems, but rather we +ought to approach the problem with such a latitude of action that it can be +worked out step by step in accordance with a comprehensive consideration of +public interest. Whether the number of ultimate systems shall be more or +less seems to me can only be determined by time and actual experience in +the development of such consolidations. + +Those portions of the present law contemplating consolidations ore not, +sufficiently effective in producing expeditious action and need +amplification of the authority of the Interstate Commerce Commission, +particularly in affording a period for voluntary proposals to the +commission and in supplying Government pressure to secure action after the +expiration of such a period. + +There are other proposals before Congress for amending the transportation +acts. One of these contemplates a revision of the method of valuation for +rate-making purposes to be followed by a renewed valuation of the railways. +The valuations instituted by the Interstate Commerce Commission 10 years +ago have not yet been completed. They have cost the Government an enormous +sum, and they have imposed great expenditure upon the railways, most of +which has in effect come out of the public in increased rates. This work +should not be abandoned or supplanted until its results are known and can +be considered. + +Another matter before the Congress is legislation affecting the labor +sections of the transportation act. Much criticism has been directed at the +workings of this section and experience has shown that some useful +amendment could be made to these provisions. + +It would be helpful if a plan could be adopted which, while retaining the +practice of systematic collective bargaining with conciliation voluntary +arbitration of labor differences, could also provide simplicity in +relations and more direct local responsibility of employees and managers. +But such legislation will not meet the requirements of the situation unless +it recognizes the principle that t e public has a right to the +uninterrupted service of transportation, and therefore a right to be heard +when there is danger that the Nation may suffer great injury through the +interruption of operations because of labor disputes. If these elements are +not comprehended in proposed legislation, it would be better to gain +further experience with the present organization for dealing with these +questions before undertaking a change. + +SHIPPING BOARD + +The form of the organization of the Shipping Board was based originally on +its functions as a semi judicial body in regulation of rates. During the +war it was loaded with enormous administrative duties. It has been +demonstrated time and again that this form of organization results in +indecision, division of opinion and administrative functions, which make a +wholly inadequate foundation for the conduct of a great business +enterprise. The first principle in securing the objective set out by +Congress in building up the American merchant marine upon the great trade +routes and subsequently disposing of it into private operation can not +proceed with effectiveness until the entire functions of the board are +reorganized. The immediate requirement is to transfer into the Emergency +Fleet, Corporation the whole responsibility of operation of the fleet and +other property, leaving to the Shipping Board solely the duty of +determining certain major policies which require deliberative action. + +The procedure under section 28 of the merchant marine act has created great +difficulty and threatened friction during the past 12 months. Its attempted +application developed not only great opposition from exporters, +particularly as to burdens that may be imposed upon agricultural products, +but also great anxiety in the different seaports as to the effect upon +their relative rate structures. This trouble will certainly recur if action +is attempted under this section. It is uncertain in some of its terms and +of great difficulty in interpretation. + +It is my belief that action under this section should be suspended until +the Congress can reconsider the entire question in the light of the +experience that has been developed since its enactment. + +NATIONAL ELECTIONS + +Nothing is so fundamental to the integrity of a republican form of +government as honesty in all that relates to the conduct of elections. I am +of the opinion that the national laws governing the choice of members of +the Congress should be extended to include appropriate representation of +the respective parties at the ballot box ant equality of representation on +the various registration boards, wherever they exist. + +THE JUDICIARY + +The docket of the Supreme Court is becoming congested. At the opening term +last year it had 592 cases, while this year it had 687 cases. Justice long +delayed is justice refused. Unless the court be given power by preliminary +and summary consideration to determine the importance of cases, and by +disposing of those which are not of public moment reserve its time for the +more extended consideration of the remainder, the congestion of the docket +is likely to increase. It is also desirable that Supreme Court should have +power to improve and reform procedure in suits at law in the Federal courts +through the adoption of appropriate rules. The Judiciary Committee of the +Senate has reported favorably upon two bills providing for these reforms +which should have the immediate favorable consideration of the Congress. + +I further recommend that provision be made for the appointment of a +commission, to consist of two or three members of the Federal judiciary and +as many members of the bar, to examine the present criminal code of +procedure and recommend to the Congress measures which may reform and +expedite court procedure in the administration and enforcement of our +criminal laws. + +PRISON REFORM + +Pending before the Congress is a bill which has already passed one House +providing for a reformatory to which could be committed first offenders and +young men for the purpose of segregating them from contact with banned +criminals and providing them with special training in order to reestablish +in them the power to pursue a law-abiding existence in the social and +economic life of the Nation. This is a matter of so much importance as to +warrant the early attention of the present session. Further provision +should also be made, for a like reason, for a separate reformatory for +women. + +NATIONAL POLICE BUREAU + +Representatives of the International Police Conference will bring to t e +attention of the Congress a proposal for the establishment of a national +police bureau. Such action would provide a central point for gathering, +compiling, and later distributing to local police authorities much +information which would be helpful in the prevention and detection of +crime. I believe this bureau is needed, and I recommend favorable +consideration of this proposal. + +DISTRICT OF COLUMBIA WELFARE + +The welfare work of the District of Columbia is administered by several +different boards dealing with charities and various correctional efforts. +It would be an improvement if this work were consolidated and placed under +the direction of a single commission. + +FRENCH SPOLIATION CLAIMS + +During the last session of the Congress legislation was introduced looking +to the payment of the remaining claims generally referred to as the French +spoliation claims. The Congress has provided for the payment of many +similar claims. Those that remain unpaid have been long pending. The +beneficiaries thereunder have every reason to expect payment. These claims +have been examined by the Court of Claims and their validity and amount +determined. The United States ought to pay its debts. I recommend action by +the Congress which will permit of the payment of these remaining claims. + +THE WAGE EARNER + +Two very important policies have been adopted by this country which, while +extending their benefits also in other directions, have been of the utmost +importance to the wage earners. One of these is the protective tariff, +which enables our people to live according to a better standard and receive +a better rate of compensation than any people, any time, anywhere on earth, +ever enjoyed. This saves the American market for the products of the +American workmen. The other is a policy of more recent origin and seeks to +shield our wage earners from the disastrous competition of a great influx +of foreign peoples. This has been done by the restrictive immigration law. +This saves the American job for the American workmen. I should like to see +the administrative features of this law rendered a little more humane for +the purpose of permitting those already here a greater latitude in securing +admission of members of their own families. But I believe this law in +principle is necessary and sound, and destined to increase greatly the +public welfare. We must maintain our own economic position, we must defend +our own national integrity. + +It is gratifying to report that the progress of industry, the enormous +increase in individual productivity through labor-saving devices, and the +high rate of wages have all combined to furnish our people in general with +such an abundance not only of the necessaries but of the conveniences of +life that we are by a natural evolution solving our problems of economic +and social justice. + +THE NEGRO + +These developments have brought about a very remarkable improvement in the +condition of the negro race. Gradually, but surely, with the almost +universal sympathy of those among whom they live, the colored people are +working out their own destiny. I firmly believe that it is better for all +concerned that they should be cheerfully accorded their full constitutional +rights, that they should be protected from all of those impositions to +which, from their position, they naturally fall a prey, especially from the +crime of lynching and that they should receive every encouragement to +become full partakers in all the blessings of our common American +citizenship. + +CIVIL SERVICE + +The merit system has long been recognized as the correct basis for +employment in our, civil service. I believe that first second, and third +class postmasters, and without covering in the present membership the +field force of prohibition enforcement, should be brought within the +classified service by statute law. Otherwise the Executive order of one +administration is changed by the Executive order of another administration, +and little real progress is made. Whatever its defects, the merit system is +certainly to be preferred to the spoils system. + +DEPARTMENTAL REORGANIZATION + +One way to save public money would be to pass the pending bill for the +reorganization of the various departments. This project has been pending +for some time, and has had the most careful consideration of experts and +the thorough study of a special congressional committee. This legislation +is vital as a companion piece to the Budget law. Legal authority for a +thorough reorganization of the Federal structure with some latitude of +action to the Executive in the rearrangement of secondary functions would +make for continuing economy in the shift of government activities which +must follow every change in a developing country. Beyond this many of the +independent agencies of the Government must be placed under responsible +Cabinet officials, if we are to have safeguards of efficiency, economy, and +probity. + +ARMY AND NAVY + +Little has developed in relation to our national defense which needs +special attention. Progress is constantly being made in air navigation and +requires encouragement and development. Army aviators have made a +successful trip around the world, for which I recommend suitable +recognition through provisions for promotion, compensation, and retirement. +Under the direction of the Navy a new Zeppelin has been successfully +brought from Europe across the Atlantic to our own country. + +Due to the efficient supervision of the Secretary of War the Army of the +United States has been organized with a small body of Regulars and a +moderate National Guard and Reserve. The defense test of September 12 +demonstrated the efficiency of the operating plans. These methods and +operations are well worthy of congressional support. + +Under the limitation of armaments treaty a large saving in outlay and a +considerable decrease in maintenance of the Navy has been accomplished. We +should maintain the policy of constantly working toward the full treaty +strength of the Navy. Careful investigation is being made in this +department of the relative importance of aircraft, surface and submarine +vessels, in order that we may not fail to take advantage of all modern +improvements for our national defense. A special commission also is +investigating the problem of petroleum oil for the Navy, considering the +best policy to insure the future supply of fuel oil and prevent the +threatened drainage of naval oil reserves. Legislative action is required +to carry on experiments in oil shale reduction, as large deposits of this +type have been set aside for the use of the Navy. + +We have been constantly besought to engage in competitive armaments. +Frequent reports will reach us of the magnitude of the military equipment +of other, nations. We shall do well to be little impressed by such reports +or such actions. Any nation undertaking to maintain a military +establishment with aggressive and imperialistic designs will find itself +severely handicapped in the economic development of the world. I believe +thoroughly in the Army and Navy, in adequate defense and preparation. But I +am opposed to any policy of competition in building and maintaining land or +sea armaments. + +Our country has definitely relinquished the old standard of dealing with +other countries by terror and force, and is definitely committed to the new +standard of dealing with them through friendship and understanding. This +new policy should be constantly kept in mind by the guiding forces of the +Army and Navy, by the. Congress and by the country at large. I believe it +holds a promise of great benefit to humanity. I shall resist any attempt to +resort to the old methods and the old standards. I am especially solicitous +that foreign nations should comprehend the candor and sincerity with which +we have adopted this position. While we propose to maintain defensive and +supplementary police forces by land and sea, and to train them through +inspections and maneuvers upon appropriate occasions in order to maintain +their efficiency, I wish every other nation to understand that this does +not express any unfriendliness or convey any hostile intent. I want the +armed forces of America to be considered by all peoples not as enemies but +as friends as the contribution which is made by this country for the +maintenance of the peace and security of the world. + +VETERANS + +With the authorization for general hospitalization of the veterans of all +wars provided during the present year, the care and treatment of those who +have served their country in time of peril and the attitude of the +Government toward them is not now so much one of needed legislation as one +of careful, generous and humane administration. It will ever be recognized +that their welfare is of the first concern and always entitled to the most +solicitous consideration oil the part of their fellow citizens. They are +organized in various associations, of which the chief and most +representative is the American Legion. Through its officers the Legion will +present to the Congress numerous suggestions for legislation. They cover +such a wide variety of subjects that it is impossible to discuss them +within the scope of this message. With many of the proposals I join in +hearty approval and commend them all to the sympathetic investigation and +consideration of the Congress. + +FOREIGN RELATIONS + +At no period in the past 12 years have our foreign relations been in such a +satisfactory condition as they are at the present time. Our actions in the +recent months have greatly strengthened the American policy of permanent +peace with independence. The attitude which our Government took and +maintained toward an adjustment of European reparations, by pointing out +that it wits not a political but a business problem, has demonstrated its +wisdom by its actual results. We desire to see Europe restored that it may +resume its productivity in the increase of industry and its support in the +advance of civilization. We look with great gratification at the hopeful +prospect of recuperation in Europe through the Dawes plan. Such assistance +as can be given through the action of the public authorities and of our +private citizens, through friendly counsel and cooperation, and through +economic and financial support, not for any warlike effort but for +reproductive enterprise, not to provide means for unsound government +financing but to establish sound business administration should be +unhesitatingly provided. + +Ultimately nations, like individuals, can not depend upon each other but +must depend upon themselves. Each one must work out its own salvation. We +have every desire to help. But with all our resources we are powerless to +save unless our efforts meet with a constructive response. The situation in +our own country and all over the world is one Chat can be improved only by +bard work and self-denial. It is necessary to reduce expenditures, increase +savings and liquidate debts. It is in this direction that there lies the +greatest hope of domestic tranquility and international peace. Our own +country ought to finish the leading example in this effort. Our past +adherence to this policy, our constant refusal to maintain a military +establishment that could be thought to menace the security of others, our +honorable dealings with other nations whether great or small, has left us +in the almost constant enjoyment of peace. + +It is not necessary to stress the general desire of all the people of this +country for the promotion of peace. It is the leading principle of all our +foreign relations. We have on every occasion tried to cooperate to this end +in all ways that were consistent with our proper independence and our +traditional policies. It will be my constant effort to maintain these +principles, and to reinforce them by all appropriate agreements and +treaties. While we desire always to cooperate and to help, we are equally +determined to be independent and free. Right and truth and justice and +humanitarian efforts will have the moral support of this country all over +the world. But we do not wish to become involved in the political +controversies of others. Nor is the country disposed to become a member of +the League of Nations or to assume the obligations imposed by its +covenant. + +INTERNATIONAL COURT + +America has been one of the foremost nations in advocating tribunals for +the settlement of international disputes of a justiciable character. Our +representatives took a leading in those conferences which resulted in the +establishment of e ague Tribunal, and later in providing for a Permanent +Court of International Justice. I believe it would be for the advantage of +this country and helpful to the stability of other nations for us to adhere +to the protocol establishing, that court upon the conditions stated in the +recommendation which is now before the Senate, and further that our country +shall not be bound by advisory opinions which may be, rendered by the court +upon questions which we have not voluntarily submitted for its judgment. +This court would provide a practical and convenient tribunal before which +we could go voluntarily, but to which we could not be summoned, for a +determination of justiciable questions when they fail to be resolved by +diplomatic negotiations. + +DISARMAMENT CONFERENCE + +Many times I have expressed my desire to see the work of the Washington +Conference on Limitation of Armaments appropriately supplemented by further +agreements for a further reduction M for the purpose of diminishing the +menace and waste of the competition in preparing instruments of +international war. It has been and is my expectation that we might +hopefully approach other great powers for further conference on this +subject as soon as the carrying out of the present reparation plan as the +established and settled policy of Europe has created a favorable +opportunity. But on account of proposals which have already been made by +other governments for a European conference, it will be necessary to wait +to see what the outcome of their actions may be. I should not wish to +propose or have representatives attend a conference which would contemplate +commitments opposed to the freedom of action we desire to maintain +unimpaired with respect to our purely domestic policies. + +INTERNATIONAL LAW + +Our country should also support efforts which are being made toward the +codification of international law. We can look more hopefully, in the first +instance, for research and studies that are likely to be productive of +results, to a cooperation among representatives of the bar and members of +international law institutes and societies, than to a conference of those +who are technically representative of their respective governments, +although, when projects have been developed, they must go to the +governments for their approval. These expert professional studies are going +on in certain quarters and should have our constant encouragement and +approval. + +OUTLAW OF WAR + +Much interest has of late been manifested in this country in the discussion +of various proposals to outlaw aggressive war. I look with great sympathy +upon the examination of this subject. It is in harmony with the traditional +policy of our country, which is against aggressive war and for the +maintenance of permanent and honorable peace. While, as I have said, we +must safeguard our liberty to deal according to our own judgment with our +domestic policies, we can not fail to view with sympathetic interest all +progress to this desired end or carefully to study the measures that may be +proposed to attain it. + +LATIN AMERICA + +While we are desirous of promoting peace in every quarter of the globe, we +have a special interest in the peace of this hemisphere. It is our constant +desire that all causes of dispute in this area may be tranquilly and +satisfactorily adjusted. Along with our desire for peace is the earnest +hope for the increased prosperity of our sister republics of Latin America, +and our constant purpose to promote cooperation with them which may be +mutually beneficial and always inspired by the most cordial friendships. + +FOREIGN DEBTS + +About $12,000,000,000 is due to our Government from abroad, mostly from +European Governments. Great Britain, Finland, Hungary, Lithuania and Poland +have negotiated settlements amounting close to $5,000,000,000. This +represents the funding of over 42 per cent of the debt since the creation +of the special Foreign Debt Commission. As the life of this commission is +about to expire, its term should be extended. I am opposed to the +cancellation of these debts and believe it for the best welfare of the +world that they should be liquidated and paid as fast as possible. I do not +favor oppressive measures, but unless money that is borrowed is repaid +credit can not be secured in time of necessity, and there exists besides a +moral obligation which our country can not ignore and no other country can +evade. Terms and conditions may have to conform to differences in the +financial abilities of the countries concerned, but the principle that each +country should meet its obligation admits of no differences and is of +universal application. + +It is axiomatic that our country can not stand still. It would seem to be +perfectly plain from recent events that it is determined to go forward. But +it wants no pretenses, it wants no vagaries. It is determined to advance in +an orderly, sound and common-sense way. It does not propose to abandon the +theory of the Declaration that the people have inalienable rights which no +majority and no power of government can destroy. It does not propose to +abandon the practice of the Constitution that provides for the protection +of these rights. It believes that within these limitations, which are +imposed not by the fiat of man but by the law of the Creator, +self-government is just and wise. It is convinced that it will be +impossible for the people to provide their own government unless they +continue to own their own property. + +These are the very foundations of America. On them has been erected a +Government of freedom and equality, of justice and mercy, of education and +charity. Living under it and supporting it the people have come into great +possessions on the material and spiritual sides of life. I want to continue +in this direction. I know that the Congress shares with me that desire. I +want our institutions to be more and more expressive of these principles. I +want the people of all the earth to see in the American flag the symbol of +a Government which intends no oppression at home and no aggression abroad, +which in the spirit of a common brotherhood provides assistance in time of +distress. + +*** + +State of the Union Address +Calvin Coolidge +December 8, 1925 + +Members of the Congress: + +In meeting the constitutional requirement of informing the Congress upon +the state of the Union, it is exceedingly gratifying to report that the +general condition is one of progress and prosperity. Here and there are +comparatively small and apparently temporary difficulties needing +adjustment and improved administrative methods, such as are always to be +expected, but in the fundamentals of government and business the results +demonstrate that we are going in the right direction. The country does not +appear to require radical departures from the policies already adopted so +much as it needs a further extension of these policies and the improvement +of details. The age of perfection is still in the somewhat distant future, +but it is more in danger of being retarded by mistaken Government activity +than it is from lack of legislation. We are by far the most likely to +accomplish permanent good if we proceed with moderation. + +In our country the people are sovereign and independent, and must accept +the resulting responsibilities. It is their duty to support themselves and +support the Government. That is the business of the Nation, whatever the +charity of the Nation may require. The functions which the Congress are to +discharge are not those of local government but of National Government. The +greatest solicitude should be exercised to prevent any encroachment upon +the rights of the States or their various political subdivisions. Local +self-government is one of our most precious possessions. It is the greatest +contributing factor to the stability strength liberty, and progress of the +Nation. It ought not to be in ringed by assault or undermined by purchase. +It ought not to abdicate its power through weakness or resign its authority +through favor. It does not at all follow that because abuses exist it is +the concern of the Federal Government to attempt the r reform. + +Society is in much more danger from encumbering the National Government +beyond its wisdom to comprehend, or its ability to administer, than from +leaving the local communities to bear their own burdens and remedy their +own evils. Our local habit and custom is so strong, our variety of race and +creed is so great the Federal authority is so tenuous, that the area within +which it can function successfully is very limited. The wiser policy is to +leave the localities, so far as we can, possessed of their own sources of +revenue and charged with their own obligations. + +GOVERNMENT ECONOMY + +It is a fundamental principle of our country that the people are sovereign. +While they recognize the undeniable authority of the state, they have +established as its instrument a Government of limited powers. They hold +inviolate in their own hands the jurisdiction over their own freedom and +the ownership of their own property. Neither of these can be impaired +except by due process of law. The wealth of our country is not public +wealth, but private wealth. It does not belong to the Government, it +belongs to the people. The Government has no justification in taking +private Property except for a public purpose. It is always necessary to +keep these principles in mind in the laying of taxes and in the making of +appropriations. No right exists to levy on a dollar, or to order the +expenditure of a dollar, of the money of the people, except for a necessary +public purpose duly authorized by the Constitution. The power over the +purse is the power over liberty. + +That is the legal limitation within which the Congress can act, How it +will, proceed within this limitation is always a question of policy. When +the country is prosperous and free from debt, when the rate of taxation is +low, opportunity exists for assuming new burdens and undertaking new +enterprises. Such a condition now prevails only to a limited extent. All +proposals for assuming new obligations ought to be postponed, unless they +are reproductive capital investments or are such as are absolutely +necessary at this time. We still have an enormous debt of over +$20,000,000,000, on which the interest and sinking-fund requirements are +$1,320,000,000. Our appropriations for the Pension Office and the Veterans' +Bureau are $600,000,000. The War and Navy Departments call for +$642,000,000. Other requirements, exclusive of the Post Office which is +virtually self-sustaining, brought the appropriations for the current year +up to almost $3,100,060,000. This shows an expenditure of close to $30 for +every inhabitant of our country. For the average family of five it means a +tax, directly or indirectly paid, of about $150 for national purposes +alone. The local tax adds much more. These enormous expenditures ought not +to be increased, but through every possible effort they ought to be +reduced. + +Only one of these great items can be ultimately extinguished. That is the +item of our war debt. Already this has been reduced to about +$6,000,000,000, which means an annual saving in interest of close to +$250,000,000. The present interest charge is about $820,000,000 yearly. It +would seem to be obvious that the sooner this debt can be retired the more +the taxpayers will save in interest and the easier it will be to secure +funds with which to prosecute needed running expenses, constructions, and +improvements. This item of $820,000,000 for interest is a heavy charge on +all the people of the country, and it seems to me that we might well +consider whether it is not greatly worth while to dispense with it as early +as possible by retiring the principal debt which it is required to serve. + +It has always been our policy to retire our debts. That of the +Revolutionary War period, notwithstanding the additions made in 1812, was +paid by 1835. and the Civil War debt within 23 years. Of the amount already +paid, over $1,000,000,000 is a reduction in cash balances. That source is +exhausted. Over one and two-thirds billions of dollars was derived from +excess receipts. Tax reduction eliminates that. The sale of surplus war +materials has been another element of our income. That is practically +finished. With these eliminated, the reduction of the debt has been only +about $500,000,000 each year, not an excessive sum on so large a debt. + +Proposals have been made to extend the payment over a period of 62 years. +If $1,000,000,000 is paid at the end of 20 years, the cost to the taxpayers +is the principal and, if the interest is 4% per cent, a total of +$1,850,000,000. If the same sum is paid at the end of 62 years, the cost is +$3,635,000,000, or almost double. Here is another consideration: Compared +with its purchasing power in 1913, the dollar we borrowed represented but +52 cents. As the value of our dollar increases, due to the falling prices +of commodities, the burden of our debt increases. It has now risen to 631/2 +cents. The taxpayer will be required to produce nearly twice the amount of +commodities to pay his debt if the dollar returns to the 1913 value. The +more we pay while prices are high, the easier it will be. + +Deflation of government after a war period is slower than deflation of +business, where curtailment is either prompt and effective or disaster +follows. There is room for further economy in the cost of the Federal +Government, but a co n of current expenditures with pre-war expenditures is +not able to the efficiency with which Government business is now being +done. The expenditures of 19161 the last pre-war year, were $742,000,000, +and in 1925 over $3,500,000,000, or nearly five times as great. If we +subtract expenditures for debt retirements and interest, veterans' relief, +increase of pensions, and other special outlays, consisting of refunds, +trust investments, and like charges, we find that the general expenditures +of the Government in 1925 were slightly more than twice as large as in +1916. + +As prices in 1925 were approximately 40 per cent higher than in 1916, the +cost of the same Government must also have increased. But the Government is +not the same. It is more expensive to collect the much greater revenue +necessary and to administer our great debt. We have given enlarged and +improved services to agriculture and commerce. Above all, America has grown +in population and wealth. Government expenditures must always share in +this growth. Taking into account the factors I have mentioned, I believe +that present Federal expenses are not far out of line with pre-war +expenses. We have nearly accomplished the deflation. + +This does not mean that further economies will not come. As we reduce our +debt our interest charges decline. There are many details yet to correct. +The real improvement, however, must come not from additional curtailment of +expenses, but by a more intelligent, more ordered spending. Our economy +must be constructive. While we should avoid as far as possible increases in +permanent current expenditures, oftentimes a capital outlay like internal +improvements will result in actual constructive saving. That is economy in +its best sense. It is an avoidance of waste that there may be the means for +an outlay to-day which will bring larger returns to-morrow. We should +constantly engage in scientific studies of our future requirements and +adopt an orderly program for their service. Economy is the method by which +we prepare to-day to afford the improvements of to-morrow. + +A mere policy of economy without any instrumentalities for putting it into +operation would be very ineffective. The Congress has wisely set up the +Bureau of the Budget to investigate and inform the President what +recommendations he ought to make for current appropriations. This gives a +centralized authority where a general and comprehensive understanding can +be reached of the sources of income and the most equitable distribution of +expenditures. How well it has worked is indicated by the fact that the +departmental estimates for 1922, before the budget law, were $4,068,000,000 +while the Budget estimates for 1927 are $3,156,000,000. This latter figure +shows the reductions in departmental estimates for the coming year made +possible by the operation of the Budget system that the Congress has +provided. + +But it is evidently not enough to have care in making appropriations +without any restraint upon expenditure. The Congress has provided that +check by establishing the office of Comptroller General. + +The purpose of maintaining the Budget Director and the Comptroller General +is to secure economy and efficiency in Government expenditure. No better +method has been devised for the accomplishment of that end. These offices +can not be administered in all the various details without making some +errors both of fact and of judgment. But the important consideration +remains that these are the instrumentalities of the Congress and that no +other plan has ever been adopted which was so successful in promoting +economy and efficiency. The Congress has absolute authority over the +appropriations and is free to exercise its judgment, as the evidence may +warrant, in increasing or decreasing budget recommendations. But it ought +to resist every effort to weaken or break down this most beneficial system +of supervising appropriations and expenditures. Without it all the claim of +economy would be a mere pretense. + +TAXATION + +The purpose of reducing expenditures is to secure a reduction in taxes. +That purpose is about to be realized. With commendable promptness the Ways +and Means Committee of the House has undertaken in advance of the meeting +of the Congress to frame a revenue act. As the bill has proceeded through +the committee it has taken on a nonpartisan character, and both Republicans +and Democrats have joined in a measure which embodies many sound principles +of tax reform. The bill will correct substantially the economic defects +injected into the revenue act of 1924, as well as many which have remained +as war-time legacies. In its present form it should provide sufficient +revenue for the Government. + +The excessive surtaxes have been reduced, estate tax rates are restored to +more reasonable figures, with every prospect of withdrawing from the field +when the States have had the opportunity to correct the abuses in their own +inheritance tax laws, the gift tax and publicity section are to be repealed +many miscellaneous taxes are lowered or abandoned, and the Board of Tax +Appeals and the administrative features of the law are improved and +strengthened. I approve of the bill in principle. In so far as income-tax +exemptions are concerned, it seems, to me the committee has gone as far as +it is Safe to go and somewhat further than I should have gone. Any further +extension along these lines would, in my opinion, impair the integrity of +our income-tax system. + +I am advised that the bill will be through the House by Christmas. For +this prompt action the country call thank the good sense of the Ways and +Means Committee in framing an economic measure upon economic +considerations. If this attitude continues to be reflected through the +Congress, the taxpayer will have his relief by the time his March 15th +installment of income taxes is due. Nonpartisan effort means certain, quick +action. Determination of a revenue law definitely, promptly and solely as a +revenue law, is one of the greatest gifts a legislature can bestow upon its +constituents. I commend the example of file Ways and Means Committee. If +followed, it will place sound legislation upon the books in time to give +the taxpayers the full benefit of tax reduction next year. This means that +the bill should reach me prior to March 15. + +All these economic results are being sought not to benefit the rich, but to +benefit the people. They are for the purpose of encouraging industry in +order that employment may be plentiful. They seek to make business good in +order that wages may be good. They encourage prosperity in order that +poverty may be banished from the home. They, seek to lay the foundation +which, through increased production, may, give the people a more bountiful +supply of the necessaries of life, afford more leisure for the improvement +of the mind, the appreciation of the arts of music and literature, +sculpture and painting, and the beneficial enjoyment of outdoor sports and +recreation, enlarge the resources which minister to charity and by all +these means attempting to strengthen the spiritual life of the Nation. + +FOREIGN RELATIONS + +The policy of our foreign relations, casting aside any suggestion of force, +rests solely on the foundation of peace, good will, and good works. We have +sought, in our intercourse with other nations, better understandings +through conference and exchange of views its befits beings endowed with +reason. The results have been the gradual elimination of disputes, the +settlement of controversies, and the establishment of a firmer friendship +between America and the rest of the world that has ever existed tit any +previous time. + +The example of this attitude has not been without its influence upon other +countries. Acting upon it, an adjustment was made of the difficult problem +of reparations. This was the second step toward peace in Europe. It paved +the way for the agreements which were drawn up at the Locarno Conference. +When ratified, these will represent the third step toward peace. While they +do not of themselves provide an economic rehabilitation, which is necessary +for the progress of Europe, by strengthening the guarantees of peace they +diminish the need for great armaments. If the energy which now goes into +military effort is transferred to productive endeavor it will greatly +assist economic progress. + +The Locarno agreements were made by the, European countries directly +interested without any formal intervention of America, although on July 3 +I publicly advocated such agreements in an address made in Massachusetts. +We have consistently refrained from intervening except when our help has +been sought and we have felt it could be effectively given, as in the +settlement of reparations and the London Conference. These recent Locarno +agreements represent the success of this policy which we have been +insisting ought to be adopted, of having European countries settle their +own political problems without involving this country. This beginning seems +to demonstrate that this policy is sound. It is exceedingly gratifying to +observe this progress, both in its method and in its result promises so +much that is beneficial to the world. + +When these agreements are finally adopted, they will provide guarantees of +peace that make the present prime reliance upon force in some parts of +Europe very much less necessary. The natural corollary to these treaties +should be further international contracts for the limitation of armaments. +This work was successfully begun at the Washington Conference. Nothing was +done at that time concerning land forces because of European objection. Our +standing army has been reduced to around 118,000, about the necessary +police force for 115,000,000 people. We are not proposing to increase it, +nor is it supposable that any foreign country looks with the slightest +misapprehension upon our land forces. They do not menace anybody. They are +rather a protection to everybody. + +The question of disarming upon land is so peculiarly European in its +practical aspects that our country would look with particular gratitude +upon any action which those countries might take to reduce their own +military forces. This is in accordance with our policy of not intervening +unless the European powers are unable to agree and make request for our +assistance. Whenever they are able to agree of their own accord it is +especially gratifying to its, and such agreements may be sure of our +sympathetic support. + +It seems clear that it is the reduction of armies rather than of navies +that is of the first importance to the world at the present time. We shall +look with great satisfaction upon that effort and give it our approbation +and encouragement. If that can be settled, we may more easily consider +further reduction and limitation of naval armaments. For that purpose our +country has constantly through its Executive, and through repeated acts of +Congress, indicated its willingness to call such a conference. Under +congressional sanction it would seem to be wise to participate in any +conference of the great powers for naval limitation of armament proposed +upon such conditions that it would hold a fair promise of being effective. +The general policy of our country is for disarmament, and it ought not to +hesitate to adopt any practical plan that might reasonably be expected to +succeed. But it would not care to attend a conference which from its +location or constituency would in all probability prove futile. + +In the further pursuit, of strengthening the bonds of peace and good will +we have joined with other nations in an international conference held at +Geneva and signed an agreement which will be laid before the Senate for +ratification providing suitable measures for control and for publicity in +international trade in arms, ammunition, and implements of war, and also +executed a protocol providing for a prohibition of the use of poison gas in +war, in accordance with the principles of Article 5 of the treaty relating +thereto signed at the Washington Conference. We are supporting the Pan +American efforts that are being made toward the codification of +international law, and looking with sympathy oil the investigations +conducted under philanthropic auspices of the proposal to agreements +outlawing war. In accordance with promises made at the Washington +Conference, we have urged the calling of and are now represented at the +Chinese Customs Conference and on the Commission on Extraterritoriality, +where it will be our policy so far as possible to meet the, aspirations of +China in all ways consistent with the interests of the countries involved. + +COURT OF INTERNATIONAL JUSTICE + +Pending before the Senate for nearly three years is the proposal to adhere +to the protocol establishing the Permanent Court of International Justice. +A well-established line of precedents mark America's effort to effect the +establishment of it court of this nature.. We took a leading part in laying +the foundation on which it rests in the establishment of The Hague Court of +Arbitration. It is that tribunal which nominates the judges who are elected +by the Council and Assembly of the League of Nations. + +The proposal submitted to the Senate was made dependent upon four +conditions, the first of which is that by supporting the court we do not +assume any obligations under the league; second, that we may participate +upon an equality with other States in the election of judges; third, that +the Congress shall determine what part of the expenses we shall bear; +fourth, that the statute creating the court shall not be amended without +out consent; and to these I have proposed an additional condition to the +effect that we are not to be bound by advisory opinions rendered without +our consent. + +The court appears to be independent of the league. It is true the judges +are elected by the Assembly and Council, but they are nominated by the +Court of Arbitration, which we assisted to create and of which we are a +part. The court was created by it statute, so-called, which is really a +treaty made among some forty-eight different countries, that might properly +be called a constitution of the court. This statute provides a method by +which the judges are chosen so that when the Court of Arbitration +nominates them and the Assembly and Council of the League elect them, they +are not acting as instruments of the Court of Arbitration or instruments of +the league, but as instruments of the statute. + +This will be even more apparent if our representatives sit with the members +of the council and assembly in electing the judges. It is true they are +paid through the league though not by the league, but by the countries +which are members of the league and by our country if we accept the +protocol. The judges are paid by the league only in the same sense that it +could be said United States judges are paid by the Congress. The court +derives all its authority from the statute and is so completely independent +of the league that it could go on functioning if the league were disbanded, +at least until the terms of the judges expired. + +The most careful provisions are made in the statute as to the +qualifications of judges. Those who make the nominations are recommended to +consult with their highest court of justice, their law schools and +academies. The judges must be persons of high moral character, qualified to +hold the highest judicial offices in that country, or be jurisconsults of +recognized competence in international law. It must be assumed that these +requirements will continue to be carefully met, and with America joining +the countries already concerned it is difficult to comprehend how human +ingenuity could better provide for the establishment of a court which would +maintain its independence. It has to be recognized that independence is to +a considerable extent a matter of ability, character, and personality. Some +effort was made in the early beginnings to interfere with the independence +of our Supreme Court. It did not succeed because of the quality of the men +who made up that tribunal. + +It does not seem that the authority to give advisory opinions interferes +with the independence of the court. Advisory opinions in and of themselves +are not harmful, but may be used in such a way as to be very beneficial +because they undertake to prevent injury rather than merely afford a remedy +after the injury has been done. As a principle that only implies that the +court shall function when proper application is made to it. Deciding the +question involved upon issues submitted for an advisory opinion does not +differ materially from deciding the question involved upon issues submitted +by contending parties. Up to the present time the court has given an +advisory opinion when it judged it had jurisdiction, and refused to give +one when it judged it did not have jurisdiction. Nothing in the work of the +court has yet been an indication that this is an impairment of its +independence or that its practice differs materially from the giving of +like opinions under the authority of the constitutions of several of our +States. + +No provision of the statute seems to me to give this court any authority to +be a political rather than a judicial court. We have brought cases in this +country before our courts which, when they have been adjudged to be +political, have been thereby dismissed. It is not improbable that political +questions will be submitted to this court, but again up to the present time +the court has refused to pass on political questions and our support would +undoubtedly have a tendency to strengthen it in that refusal. + +We are not proposing to subject ourselves to any compulsory jurisdiction. +If we support the court, we can never be obliged to submit any case which +involves our interests for its decision. Our appearance before it would +always be voluntary, for the purpose of presenting a case which we had +agreed might be presented. There is no more danger that others might bring +cases before the court involving our interests which we did not wish to +have brought, after we have adhered, and probably not so much, than there +would be of bringing such cases if we do not adhere. I think that we would +have the same legal or moral right to disregard such a finding in the one +case that we would in the other. + +If we are going to support any court, it will not be one that we have set +up alone or which reflects only our ideals. Other nations have their +customs and their institutions, their thoughts and their methods of life. +If a court is going to be international, its composition will have to yield +to what is good in all these various elements. Neither will it be possible +to support a court which is exactly perfect, or under which we assume +absolutely no obligations. If we are seeking that opportunity, we might as +well declare that we are opposed to supporting any court. If any agreement +is made, it will be because it undertakes to set up a tribunal which can do +some of the things that other nations wish to have done. We shall not find +ourselves bearing a disproportionate share of the world's burdens by our +adherence, and we may as well remember that there is absolutely no escape +for our country from bearing its share of the world's burdens in any case. +We shall do far better service to ourselves and to others if we admit this +and discharge our duties voluntarily, than if we deny it and are forced to +meet the same obligations unwillingly. + +It is difficult to imagine anything that would be more helpful to the world +than stability, tranquility and international justice. We may say that we +are contributing to these factors independently, but others less +fortunately located do not and can not make a like contribution except +through mutual cooperation. The old balance of power, mutual alliances, and +great military forces were not brought bout by any mutual dislike for +independence, but resulted from the domination of circumstances. Ultimately +they were forced on us. Like all others engaged in the war whatever we said +as a matter of fact we joined an alliance, we became a military power, we +impaired our independence. We have more at stake than any one else in +avoiding a repetition of that calamity. Wars do not, spring into existence. +They arise from small incidents and trifling irritations which can be +adjusted by an international court. We can contribute greatly to the +advancement of our ideals by joining with other nations in maintaining such +a tribunal. + +FOREIGN DEBTS + +Gradually, settlements have been made which provide for the liquidation of +debts due to our Government from foreign governments. Those made with Great +Britain, Finland, Hungary Lithuania, and Poland have already been approved +by the Congress. Since the adjournment, further agreements have been +entered into with Belgium, Czechoslovakia, Latvia, Estonia, Italy, and +Rumania. These 11 nations, which have already made settlements, represent +$6,419,528,641 of the original principal of the loans. The principal sums +without interest, still pending, are the debt of France, of $3,340,000,000; +Greece, $15,000,000; Yugoslavia, $.51,000,000; Liberia, $26,000; Russia, +$192,000,000, which those at present in control have undertaken, openly to +repudiate; Nicaragua, $84,000, which is being paid currently; and Austria, +$24,000,000, on which by act of Congress a moratorium of 20 years has been +granted. The only remaining sum is $12,000,000, due from Armenia, which has +now ceased to exist as an independent nation. + +In accordance with the settlements made, the amount of principal and +interest which is to be paid to the United States under these agreements +aggregate $15,200,688,253.93. It is obvious that the remaining settlements, +which will undoubtedly be made, will bring this sum up to an amount which +will more than equal the principal due on our present national debt. While +these settlements are very large in the aggregate, it has been felt that +the terms granted were in all cases very generous. They impose no undue +burden and are mutually beneficial in the observance of international faith +and the improvement of international credit. + +Every reasonable effort will be made to secure agreements for liquidation +with the remaining countries, whenever they are in such condition that they +can be made. Those which have already been negotiated under the bipartisan +commission established by the Congress have been made only after the most +thoroughgoing and painstaking investigation, continued for a long time +before meeting with the representatives of the countries concerned. It is +believed that they represent in each instance the best that can be done and +the wisest settlement that can be secured. One very important result is the +stabilization of foreign currency, making exchange assist rather than +embarrass our trade. Wherever sacrifices have been made of money, it will +be more than amply returned in better understanding and friendship, while +in so far as these adjustments will contribute to the financial stability +of the debtor countries, to their good order, prosperity, and progress, +they represent hope of improved trade relations and mutual contributions to +the civilization of the world. + +ALIEN PROBLEM + +Negotiations are progressing among the interested parties in relation to +the final distribution of the assets in the hands of the Alien Property +Custodian. Our Government and people are interested as creditors; the +German Government and people are interested as debtors and owners of the +seized property. Pending the outcome of these negotiations, I do not +recommend any affirmative legislation. For the present we should continue +in possession of this property which we hold as security for the settlement +of claims due to our people and our Government. + +IMMIGRATION + +While not enough time has elapsed to afford a conclusive demonstration, +such results as have been secured indicate that our immigration law is on +the whole beneficial. It is undoubtedly a protection to the wage earners of +this country. The situation should however, be carefully surveyed, in order +to ascertain whether it is working a needless hardship upon our own +inhabitants. If it deprives them of the comfort and society of those bound +to them by close family ties, such modifications should be adopted as will +afford relief, always in accordance with the principle that our Government +owes its first duty to our own people and that no alien, inhabitant of +another country, has any legal rights whatever under our Constitution and +laws. It is only through treaty, or through residence here that such rights +accrue. But we should not, however, be forgetful of the obligations of a +common humanity. + +While our country numbers among its best citizens many of those of foreign +birth, yet those who now enter in violation of our laws by that very act +thereby place themselves in a class of undesirables. Investigation +reveals that any considerable number are coming here in defiance of our +immigration restrictions, it will undoubtedly create the necessity for the +registration of all aliens. We ought to have no prejudice against an alien +because he is an alien. The standard which we apply to our inhabitants is +that of manhood, not place of birth. Restrictive immigration is to a large +degree for economic purposes. It is applied in order that we may not have a +larger annual increment of good people within our borders than we can weave +into our economic fabric in such a way as to supply their needs without +undue injury to ourselves. + +NATIONAL DEFENSE + +Never before in time of peace has our country maintained so large and +effective a military force as it now has. The Army, Navy, Marine Corps, +National Guard, and Organized Reserves represent a strength of about +558,400 men. These forces are well trained, well equipped, and high in +morale. + +A sound selective service act giving broad authority for the mobilization +in time of peril of all the resources of the country, both persons and +materials, is needed to perfect our defense policy in accordance with our +ideals of equality. The provision for more suitable housing to be paid for +out of funds derived from the sale of excess lands, pending before the last +Congress, ought to be brought forward and passed. Reasonable replacements +ought to be made to maintain a sufficient ammunition reserve. + +The Navy has the full treaty tonnage of capital ships. Work is going +forward in modernizing the older ones, building aircraft carriers, +additional fleet submarines, and fast scout cruisers, but we are carefully +avoiding anything that might be construed as a competition in armaments +with other nations. The joint Army and Navy maneuvers at Hawaii, followed +by the cruise of a full Battle Fleet to Australia and New Zealand, were +successfully carried out. These demonstrations revealed a most satisfactory +condition of the ships and the men engaged. + +Last year at my suggestion the General Board of the Navy made an +investigation and report on the relation of aircraft to warships. As a +result authorizations and appropriations were made for more scout cruisers +and fleet submarines and for completing aircraft carriers and equipping +them with necessary planes. Additional training in aviation was begun at +the Military and Naval Academies. A method of coordination and cooperation +of the Army and Navy and the principal aircraft builders is being +perfected. At the suggestion of the Secretaries of War and Navy I appointed +a special board to make a further study of the problem of aircraft. + +The report of the Air Board ought to be reassuring to the country, +gratifying to the service and satisfactory to the Congress. It is +thoroughly complete and represents the mature thought of the best talent in +the country. No radical change in organization of the service seems +necessary. The Departments of War, Navy, and Commerce should each be +provided with an additional assistant secretary, not necessarily with +statutory duties but who would be available under the direction of the +Secretary to give especial attention to air navigation. We must have an air +strength worthy of America. Provision should be made for two additional +brigadier generals for the Army Air Service. Temporary rank corresponding +to their duties should be awarded to active flying officers in both Army +and Navy. + +Aviation is of great importance both for national defense and commercial +development. We ought to proceed in its improvement by the necessary +experiment and investigation. Our country is not behind in this art. It has +made records for speed and for the excellence of its planes. It ought to go +on maintaining its manufacturing plants capable of rapid production, giving +national assistance to the la in out of airways, equipping itself with a +moderate number of planes and keeping an air force trained to the highest +efficiency. + +While I am a thorough believer in national defense and entirely committed +to the policy of adequate preparation, I am just as thoroughly opposed to +instigating or participating in a policy of competitive armaments. Nor does +preparation mean a policy of militarizing. Our people and industries are +solicitous for the cause of 0111, country, and have great respect for the +Army and Navy and foil the uniform worn by the men who stand ready at all +times for our protection to encounter the dangers and perils necessary to +military service, but all of these activities are to be taken not in behalf +of aggression but in behalf of peace. They are the instruments by which we +undertake to do our part to promote good will and support stability among +all peoples. + +VETERANS + +If any one desires to estimate the esteem in which the veterans of America +are held by their fellow citizens, it is but necessary to remember that the +current budget calls for an expenditure of about $650,000.000 in their +behalf. This is nearly the amount of the total cost of the National +Government, exclusive of the post office, before we entered the last war. + +At the two previous sessions of Congress legislation affecting veterans' +relief was enacted and the law liberalized. This legislation brought into +being a number of new provisions tending more nearly to meet the needs of +our veterans, as well as afford the necessary authority to perfect the +administration of these laws. + +Experience with the new legislation so far has clearly demonstrated its +constructive nature. It has increased the benefits received by many and has +made eligible for benefits many others. Direct disbursements to the veteran +or his dependents exceeding $21,000,000 have resulted, which otherwise +would not have been made. The degree of utilization of our hospitals has +increased through making facilities available to the incapacitated veteran +regardless of service origin of the disability. This new legislation also +has brought about a marked improvement of service to the veteran. + +The organizations of ex-service men have proposed additional legislative +changes which you will consider, but until the new law and the +modifications made at the last session of Congress are given a more +thorough test further changes in the basic law should be few and made only +after careful though sympathetic consideration. + +The principal work now before the Veterans' Bureau is the perfection of its +organization and further improvements in service. Some minor legislative +changes are deemed necessary to enable the bureau to retain that high grade +of professional talent essential in handling the problems of the bureau. +Such changes as tend toward the improvement of service and the carrying +forward to completion of the hospital construction program are recommended +for the consideration of the proper committees of Congress. + +With the enormous outlay that is now being made in behalf of the veterans +and their dependents, with a tremendous war debt still requiring great +annual expenditure, with the still high rate of taxation, while every +provision should be made for the relief of the disabled and the necessary +care of dependents, the Congress may well consider whether the financial +condition of the Government is not such that further bounty through the +enlargement of general pensions and other emoluments ought not to be +postponed. + +AGRICULTURE + +No doubt the position of agriculture as a whole has very much improved +since the depression of three and four years ago. But there are many +localities and many groups of individuals, apparently through no fault of +their own, sometimes due to climatic conditions and sometimes to the +prevailing price of a certain crop, still in a distressing condition. This +is probably temporary, but it is none the less acute. National Government +agencies, the Departments of Agriculture and Commerce, the Farm Loan Board, +the intermediate credit banks, and the Federal Reserve Board are all +cooperating to be of assistance and relief. On the other hand, there are +localities and individuals who have had one of their most prosperous years. +The general price level is fair, but here again there are exceptions both +ways, some items being poor while others are excellent. In spite of a +lessened production the farm income for this year will be about the same as +last year and much above the three preceding years. + +Agriculture is a very complex industry. It does not consist of one problem, +but of several. They can not be solved at one stroke. They have to be met +in different ways, and small gains are not to be despised. + +It has appeared from all the investigations that I have been able to make +that the farmers as a whole are determined to maintain the independence of +their business. They do not wish to have meddling on the part of the +Government or to be placed under the inevitable restrictions involved in +any system of direct or indirect price-fixing, which would result from +permitting the Government to operate in the agricultural markets. They are +showing a very commendable skill in organizing themselves to transact their +own business through cooperative marketing, which will this year turn over +about $2,500,000,000, or nearly one-fifth of the total agricultural +business. In this they are receiving help from the Government. The +Department of Agriculture should be strengthened in this facility, in order +to be able to respond when these marketing associations want help. While +it ought not to undertake undue regulation, it should be equipped to give +prompt information on crop prospects, supply, demand, current receipts, +imports, exports, and prices. + +A bill embodying these principles, which has been drafted under the advice +and with the approval of substantially all the leaders and managers in the +cooperative movement, will be presented to the Congress for its enactment. +Legislation should also be considered to provide for leasing the +unappropriated public domain for grazing purposes and adopting a uniform +policy relative to grazing on the public lands and in the national +forests. + +A more intimate relation should be established between agriculture and the +other business activities of the Nation. They are mutually dependent and +can each advance their own prosperity most by advancing the prosperity of +the other. Meantime the Government will continue those activities which +have resulted in an unprecedented amount of legislation and the pouring out +of great sums of money during the last five years. The work for good roads, +better land and water transportation, increased support for agricultural +education, extension of credit facilities through the Farm Loan Boards and +the intermediate credit banks, the encouragement of orderly marketing and a +repression of wasteful speculation, will all be continued. + +Following every other depression, after a short period the price of farm +produce has taken and maintained the lead in the advance. This advance had +reached a climax before the war. Everyone will recall the discussion that +went on for four or five years prior to 1914 concerning the high cost of +living. This history is apparently beginning to repeat itself. While +wholesale prices of other commodities have been declining, farm prices have +been increasing. There is every reason to suppose that a new era in +agricultural prosperity lies just before us, which will probably be +unprecedented. + +MUSCLE SHOALS + +The problem of Muscle Shoals seems to me to have assumed a place all out of +proportion with its real importance. It probably does not represent in +market value much more than a first-class battleship, yet it has been +discussed in the Congress over a period of years and for months at a time. +It ought to be developed for the production of nitrates primarily, and +incidentally for power purposes. This would serve defensive, agricultural, +and industrial purposes. I am in favor of disposing of this property to +meet these purposes. The findings of the special commission will be +transmitted to the Congress for their information. I am convinced that the +best possible disposition can be made by direct authorization of the +Congress. As a means of negotiation I recommend the immediate appointment +of a small joint special committee chosen from the appropriate general +standing committees of the House and Senate to receive bids, which when +made should be reported with recommendations as to acceptance, upon which a +law should be enacted, effecting a sale to the highest bidder who will +agree to carry out these purposes. + +If anything were needed to demonstrate the almost utter incapacity of the +National Government to deal directly with an industrial and commercial +problem, it has been provided by our experience with this property. We have +expended vast fortunes, we have taxed everybody, but we are unable to +secure results, which benefit anybody. This property ought, to be +transferred to private management under conditions which will dedicate it +to the public purpose for which it was conceived. + +RECLAMATION + +The National Government is committed to a policy of reclamation and +irrigation which it desires to establish on a sound basis and continue in +the interest of the localities concerned. Exhaustive studies have recently +been made of Federal reclamation, which have resulted in improving the +projects and adjusting many difficulties. About one third of the projects +is in good financial condition, another third can probably be made +profitable, while the other third is under unfavorable conditions. The +Congress has already provided for a survey which will soon be embodied in a +report. That ought to suggest a method of relief which will make +unnecessary further appeals to the Congress. Unless this can be done, +Federal reclamation will be considerably retarded. With the greatly +increased cost of construction and operation, it has become necessary to +plan in advance, by community organization and selective agriculture, +methods sufficient to repay these increasing outlays. + +The human and economic interests of the farmer citizens suggest that the +States should be required to exert some effort and assume some +responsibility, especially in the intimate, detailed, and difficult work of +securing settlers and developing farms which directly profit them, but only +indirectly and remotely can reimburse the Nation. It is believed that the +Federal Government should continue to be the agency for planning and +constructing the great undertakings needed to regulate and bring into use +the rivers the West, many of which are interstate in character, but the +detailed work of creating agricultural communities and a rural civilization +on the land made ready for reclamation ought to be either transferred to +the State in its entirety or made a cooperative effort of the State and +Federal Government. + +SHIPPING + +The maintenance of a merchant marine is of the utmost importance for +national defense and the service of our commerce. We have a large number of +ships engaged in that service. We also have a surplus supply, costly to +care for, which ought to be sold. All the investigations that have been +made under my direction, and those which have been prosecuted +independently, have reached the conclusion that the fleet should be under +the direct control of a single executive head, while the Shipping Board +should exercise its judicial and regulatory functions in Accordance with +its original conception. The report of Henry G. Dalton, a business man of +broad experience, with a knowledge of shipping, made to me after careful +investigation, will be transmitted for the information of the Congress, the +studies pursued under the direction of the United States Chamber of +Commerce will also be accessible, and added to these will be the report of +the special committee of the House. + +I do not advocate the elimination of regional considerations, but it has +become apparent that without centralized executive action the management of +this great business, like the management of any other great business, will +flounder in incapacity and languish under a division of council. A plain +and unmistakable reassertion of this principle of unified control, which I +have always been advised was the intention of the Congress to apply, is +necessary to increase the efficiency of our merchant fleet. + +COAL + +The perennial conflict in the coal industry is still going on to the great +detriment of the wage earners, the owners, and especially to the public. +With deposits of coal in this country capable of supplying its needs for +hundreds of years, inability to manage and control this great resource for +the benefit of all concerned is very close to a national economic failure. +It has been the subject of repeated investigation and reiterated +recommendation. Yet the industry seems never to have accepted modern +methods of adjusting differences between employers and employees. The +industry could serve the public much better and become subject to a much +more effective method of control if regional consolidations and more +freedom in the formation of marketing associations, under the supervision +of the Department of Commerce, were permitted. + +At the present time the National Government has little or no authority to +deal with this vital necessity of the life of the country. It has permitted +itself to remain so powerless that its only attitude must be humble +supplication. Authority should be lodged with the President and the +Departments of Commerce and Labor, giving them power to deal with an +emergency. They should be able to appoint temporary boards with authority +to call for witnesses and documents, conciliate differences, encourage +arbitration, and in case of threatened scarcity exercise control over +distribution. Making the facts public under these circumstances through a +statement from an authoritative source would be of great public benefit. +The report of the last coal commission should be brought forward, +reconsidered, and acted upon. + +PROHIBITION + +Under the orderly processes of our fundamental institutions the +Constitution was lately amended providing for national prohibition. The +Congress passed an act for its enforcement, and similar acts have been +provided by most of the States. It is the law of the land. It is the duty +of all who come under its, jurisdiction to observe the spirit of that law, +and it is the duty of the Department of Justice and the Treasury Department +to enforce it. Action to prevent smuggling, illegal transportation in +interstate commerce, abuse in the use of permits, and existence of sources +of supply for illegal traffic is almost entirely imposed upon the Federal +Government. + +Through treaties with foreign governments and increased activities of the +Coast Guard, revenue agents, district attorneys and enforcement agents +effort is being made to prevent these violations. But the Constitution also +puts a concurrent duty on the States. We need their active and energetic +cooperation, the vigilant action of their police, and the jurisdiction of +their courts to assist in enforcement. I request of the people observance, +of the public officers continuing efforts for enforcement, and of the +Congress favorable action on the budget recommendation for the prosecution +of this work. + +WATERWAY DEVELOPMENT + +For many years our country has been employed in plans and M for the +development of our intracoastal and inland waterways. This work along our +coast is an important adjunct to our commerce. It will be carried on, +together with the further opening up of our harbors, as our resources +permit. The Government made an agreement during the war to take over the +Cape Cod Canal, under which the owners made valuable concessions. This +pledged faith of the Government ought to be redeemed. + +Two other main fields are under consideration. One is the Great Lakes and +St. Lawrence, including the Erie Canal. This includes stabilizing the lake +level, and is both a waterway and power project. A joint commission of the +United States and Canada is working on plans and surveys which will not be +completed until next April. No final determination can be made, apparently, +except under treaty as to the participation of both countries. The other is +the Mississippi River stem. This is almost entirely devoted to navigation. +Work on the Ohio River will be completed in about three years. A modern +channel connecting Chicago, New Orleans, Kansas City, and Pittsburgh should +be laid out and work on the tributaries prosecuted. Some work is being done +of a preparatory nature along the Missouri, and large expenditures are +being made yearly in the lower reaches of the Mississippi and its +tributaries which contribute both to flood control and navigation. +Preliminary measures are being taken on the Colorado River project, which +is exceedingly important for flood control, irrigation, power development, +and water supply to the area concerned. It would seem to be very doubtful, +however, whether it is practical to secure affirmative action of the +Congress, except under a Joint agreement of the several States. + +The Government has already expended large sums upon scientific research and +engineering investigation in promotion of this Colorado River project. The +actual progress has been retarded for many years by differences among the +seven States in the basin over their relative water rights and among +different groups as to methods. In an attempt to settle the primary +difficulty of the water rights, Congress authorized the Colorado River +Commission which agreed on November 24, 1922, upon an interstate compact to +settle these rights, subject to the ratification of the State legislatures +and Congress. All seven States except Arizona at one time ratified, the +Arizona Legislature making certain reservations which failed to meet the +approval of the governor. Subsequently an attempt was made to establish the +compact upon a six-State basis, but in this case California imposed +reservations. There appears to be no division of opinion upon the major +principles of the compact, but difficulty in separating contentions to +methods of development from the discussion of it. It is imperative that +flood control be undertaken for California and Arizona. preparation made +for irrigation, for power, and for domestic water. + +Some or all of these questions are combined in every proposed development. +The Federal Government is interested in some of these phases, State +governments and municipalities and irrigation districts in others, and +private corporations in still others. Because of all this difference of +view it is most desirable that Congress should consider the creation of +some agency that will be able to determine methods of improvement solely +upon economic and engineering facts, that would be authorized to negotiate +and settle, subject to the approval of Congress, the participation, rights, +and obligations of each group in any particular works. Only by some such +method can early construction be secured. + +WATER POWER + +Along with the development of navigation should go every possible +encouragement for the development of our water power. While steam still +plays a dominant part, this is more and more becoming an era of +electricity. Once installed, the cost is moderate, has not tended greatly +to increase, and is entirely free from the unavoidable dirt and +disagreeable features attendant upon the burning of coal. Every facility +should be extended for the connection of the various units into a +superpower plant, capable at all times of a current increasing uniformity +over the entire system. + +RAILROADS + +The railroads throughout the country are in a fair state of prosperity. +Their service is good and their supply of cars is abundant. Their condition +would be improved and the public better served by a system of +consolidations. I recommend that the Congress authorize such consolidations +tinder the supervision of the Interstate Commerce Commission, with power to +approve or disapprove when proposed parts are excluded or new parts added. +I am informed that the railroad managers and their employees have reached a +substantial agreement as to what legislation is necessary to regulate and +improve their relationship. Whenever they bring forward such proposals, +which seem sufficient also to protect the interests of the public, they +should be enacted into law. + +It is gratifying to report that both the railroad managers and railroad +employees are providing boards for the mutual adjustment of differences in +harmony with the principles of conference, conciliation, and arbitration. +The solution of their problems ought to be an example to all other +industries. Those who ask the protections of civilization should be ready +to use the methods of civilization. + +A strike in modern industry has many of the aspects of war in the modern +world. It injures labor and it injures capital. If the industry involved is +a basic one, it reduces the necessary economic surplus and, increasing the +cost of living, it injures the economic welfare and general comfort of the +whole people. It also involves a deeper cost. It tends to embitter and +divide the community into warring classes and thus weakens the unity and +power of our national life. + +Labor can make no permanent gains at the cost of the general welfare. All +the victories won by organized labor in the past generation have been won +through the support of public opinion. The manifest inclination of the +managers and employees of the railroads to adopt a policy of action in +harmony with these principles marks a new epoch in our industrial life. + +OUTLYING POSSESSIONS + +The time has come for careful investigation of the expenditures and success +of the laws by which we have undertaken to administer our outlying +possessions. A very large amount of money is being expended for +administration in Alaska. It appears so far out of proportion to the number +of inhabitants and the amount of production as to indicate cause for +thorough investigation. Likewise consideration should be given to the +experience under the law which governs the Philippines. From such reports +as reach me there are indications that more authority should be given to +the Governor General, so that he will not be so dependent upon the local +legislative body to render effective our efforts to set an example of the, +sound administration and good government, which is so necessary for the +preparation of the Philippine people for self-government under ultimate +independence. If they are to be trained in these arts, it is our duty to +provide for them the best that there is. + +RETIREMENT OF JUDGES + +The act of March 3, 1911, ought to be amended so that the term of years of +service of judges of any court of the United States requisite for +retirement with pay shall be computed to include not only continuous but +aggregate service. + +MOTHERS' AID + +The Government ought always to be alert on the side of the humanities. It +Ought to encourage provisions for economic justice for the defenseless. It +ought to extend its relief through its national and local agencies, as may +be appropriate in each case, to the suffering and the needy. It ought to be +charitable. + +Although more than 40 of our States have enacted measures in aid of +motherhood, the District of Columbia is still without such a law. A +carefully considered bill will be presented, which ought to have most +thoughtful consideration in order that the Congress may adopt a measure +which will be hereafter a model for all parts of the Union. + +CIVIL SERVICE + +In 1883 the Congress passed the civil service act, which from a modest +beginning of 14,000 employees has grown until there are now 425,000 in the +classified service. This has removed the clerical force of the Nation from +the wasteful effects of the spoils system and made it more stable and +efficient. The time has come to consider classifying all postmasters, +collectors of customs, collectors of internal revenue, and prohibition +agents, by an act covering in those at present in office, except when +otherwise provided by Executive order. + +The necessary statistics are now being gathered to form the basis of a +valuation of the civil service retirement fund based on current conditions +of the service. It is confidently expected that this valuation will be +completed in time to be made available to the Congress during the present +session. It will afford definite knowledge of existing, and future +liabilities under the present law and determination OF liabilities under +any proposed change in the present law. We should have this information +before creating further obligations for retirement annuities which will +become liabilities to be met in the future from the money of the taxpayer. + +The classification act of 1923, with the subsequent legislative action +providing for adjustment of the compensation of field service positions, +has operated materially to improve employment conditions in the Federal +service. The administration of the act is in the hands of an impartial +board, functioning without the necessity of a direct appropriation. It +would be inadvisable at this time to place in other hands the +administration of this act. + +FEDERAL TRADE COMMISSION + +The proper function of the Federal Trade Commission is to supervise and +correct those practices in commerce which are detrimental to fair +competition. In this it performs a useful function and should be continued +and supported. It was designed also to be a help to honest business. In my +message to the Sixty-eighth Congress I recommended that changes in the +procedure then existing be made. Since then the commission by its own +action has reformed its rules, giving greater speed and economy in the +disposal of its cases and full opportunity for those accused to be heard. +These changes are improvements and, if necessary, provision should be made +for their permanency. + +REORGANIZATION + +No final action has yet been taken on the measure providing for the +reorganization of the various departments. I therefore suggest that this +measure, which will be of great benefit to the efficient and economical +administration of the business of the Government, be brought forward and +passed. + +THE NEGRO + +Nearly one-tenth of our population consists of the Negro race. The progress +which they have made in all the arts of civilization in the last 60 years +is almost beyond belief. Our country has no more loyal citizens. But they +do still need sympathy, kindness, and helpfulness. They need reassurance +that the requirements of the Government and society to deal out to them +even-handed justice will be met. They should be protected from all violence +and supported in the peaceable enjoyment of the fruits of their labor. +Those who do violence to them should be punished for their crimes. No other +course of action is worthy of the American people. + +Our country has many elements in its population, many different modes of +thinking and living, all of which are striving in their own way to be loyal +to the high ideals worthy of the crown of American citizenship. It is +fundamental of our institutions that they seek to guarantee to all our +inhabitants the right to live their own lives under the protection of the +public law. This does not include any license to injure others materially, +physically, morally, to Incite revolution, or to violate the established +customs which have long had the sanction of enlightened society. + +But it does mean the full right to liberty and equality before the law +without distinction of race or creed. This condition can not be granted to +others, or enjoyed by ourselves, except by the application of the principle +of broadest tolerance. Bigotry is only another name for slavery. It reduces +to serfdom not only those against whom it is directed, but also those who +seek to apply it. An enlarged freedom can only be secured by the +application of the golden rule. No other utterance ever presented such a +practical rule of life. + +CONCLUSION + +It is apparent that we are reaching into an era of great general +prosperity. It will continue only so long as we shall use it properly. +After all, there is but a fixed quantity of wealth in this country at any +fixed time. The only way that we can all secure more of it is to create +more. The element of time enters into production, If the people have +sufficient moderation and contentment to be willing to improve their +condition by the process of enlarging production, eliminating waste, and +distributing equitably, a prosperity almost without limit lies before its. +If the people are to be dominated by selfishness, seeking immediate riches +by nonproductive speculation and by wasteful quarreling over the returns +from industry, they will be confronted by the inevitable results of +depression and privation. If they will continue industrious and thrifty, +contented with fair wages and moderate profits, and the returns which +accrue from the development of oar natural resources, our prosperity will +extend itself indefinitely. + +In all your deliberations you should remember that the purpose of +legislation is to translate principles into action. It is an effort to have +our country be better by doing better. Because the thoughts and ways of +people are firmly fixed and not easily changed, the field within which +immediate improvement can be secured is very narrow. Legislation can +provide opportunity. Whether it is taken advantage of or not depends upon +the people themselves. The Government of the United States has been created +by the people. It is solely responsible to them. It will be most successful +if it is conducted solely for their benefit. All its efforts would be of +little avail unless they brought more justice, more enlightenment, more +happiness and prosperity into the home. This means an opportunity to +observe religion, secure education, and earn a living under a reign of law +and order. It is the growth and improvement of the material and spiritual +life of the Nation. We shall not be able to gain these ends merely by our +own action. If they come at all, it will be because we have been willing to +work in harmony with the abiding purpose of a Divine Providence. + +*** + +State of the Union Address +Calvin Coolidge +December 7, 1926 + +Members of the Congress: + +In reporting to the Congress the state of the Union, I find it impossible +to characterize it other than one of general peace and prosperity. In some +quarters our diplomacy is vexed with difficult and as yet unsolved +problems, but nowhere are we met with armed conflict. If some occupations +and areas are not flourishing, in none does there remain any acute chronic +depression. What the country requires is not so much new policies as a +steady continuation of those which are already being crowned with such +abundant success. It can not be too often repeated that in common with all +the world we are engaged in liquidating the war. + +In the present short session no great amount of new legislation is +possible, but in order to comprehend what is most desirable some survey of +our general situation is necessary. A large amount of time is consumed in +the passage of appropriation bills. If each Congress in its opening session +would make appropriations to continue for two years, very much time would +be saved which could either be devoted to a consideration of the general +needs of the country or would result in decreasing the work of legislation. +ECONOMY + +Our present state of prosperity has been greatly promoted by three +important causes, one of which is economy, resulting in reduction and +reform in national taxation. Another is the elimination of many kinds of +waste. The third is a general raising of the standards of efficiency. This +combination has brought the perfectly astonishing result of a reduction in +the index price of commodities and an increase in the index rate of wages. +We have secured a lowering of the cost to produce and a raising of the +ability to consume. Prosperity resulting from these causes rests on the +securest of all foundations. It gathers strength from its own progress. + +In promoting this progress the chief part which the National Government +plays lies in the field of economy. Whatever doubts may have been +entertained as to the necessity of this policy and the beneficial results +which would accrue from it to all the people of the Nation, its wisdom must +now be considered thoroughly demonstrated. It may not have appeared to be a +novel or perhaps brilliant conception, but it has turned out to be +preeminently sound. It has not failed to work. It has surely brought +results. It does not have to be excused as a temporary expedient adopted as +the lesser evil to remedy some abuse, it is not a palliative seeking to +treat symptoms, but a major operation for the, eradication at the source of +a large number of social diseases. + +Nothing is easier than the expenditure of public money. It does not appear +to belong to anybody. The temptation is overwhelming to bestow it on +somebody. But the results of extravagance are ruinous. The property of the +country, like the freedom of the country, belongs to the people of the +country. They have not empowered their Government to take a dollar of it +except for a necessary public purpose. But if the Constitution conferred +such right, sound economics would forbid it. Nothing is more, destructive +of the progress of the Nation than government extravagance. It means an +increase in the burden of taxation, dissipation of the returns from +enterprise, a decrease in the real value of wages, with ultimate stagnation +and decay. The whole theory of our institutions is based on the liberty and +independence of the individual. He is dependent on himself for support and +therefore entitled to the rewards of his own industry. He is not to be +deprived of what he earns that others may be benefited by what they do not +earn. What he saves through his private effort is not to be wasted by +Government extravagance. + +Our national activities have become so vast that it is necessary to +scrutinize each item of public expenditure if we are to apply the principle +of economy. At the last session we made an immediate increase in the annual +budget of more than $100,000,000 in benefits conferred on the veterans of +three wars, public buildings, and river and harbor improvement. Many +projects are being broached requiring further large outlays. I am convinced +that it would be greatly for the welfare of the country if we avoid at the +present session all commitments except those of the most pressing nature. +From a reduction of the debt and taxes will accrue a wider benefit to all +the people of this country than from embarking on any new enterprise. When +our war debt is decreased we shall have resources for expansion. Until that +is accomplished we should confine ourselves to expenditures of the most +urgent necessity. + +The Department of Commerce has performed a most important function in +making plans and securing support of all kinds of national enterprise for +the elimination of waste. Efficiency has been greatly promoted through good +management and the constantly increasing cooperation of the wage earners +throughout the whole realm of private business. It is my opinion that this +whole development has been predicated on the foundation of a protective +tariff. + +TAX REDUCTION + +As a result of economy of administration by the Executive and of +appropriation by the Congress, the end of this fiscal year will leave a +surplus in the Treasury estimated at $383,000,000. Unless otherwise +ordered, such surplus is used for the retirement of the war debt. A bond +which can be retired today for 100 cents will cost the people 104 1/4 +cents to retire a year from now. While I favor a speedy reduction of the +debt as already required by law and in accordance with the promises made to +the holders of our Liberty bonds when they were issued, there is no reason +why a balanced portion of surplus revenue should not be applied to a +reduction of taxation. It can not be repeated too often that the enormous +revenues of this Nation could not be collected without becoming a charge on +all the people whether or not they directly pay taxes. Everyone who is +paying or the bare necessities of fool and shelter and clothing, without +considering the better things of life, is indirectly paying a national tax. +The nearly 20,000,000 owners of securities, the additional scores of +millions of holders of insurance policies and depositors in savings banks, +are all paying a national tax. Millions of individuals and corporations are +making a direct contribution to the National Treasury which runs from 11/2 +to 25 per cent of their income, besides a number of special requirements, +like automobile and admission taxes. Whenever the state of the Treasury +will permit, I believe in a reduction of taxation. I think the taxpayers +are entitled to it. But I am not advocating tax reduction merely for the +benefit of the taxpayer; I am advocating it for the benefit of the +country. + +If it appeared feasible, I should welcome permanent tax reduction at this +time. The estimated surplus, however, for June 30, 1928, is not much larger +than is required in a going business of nearly $4,000,000,000. We have had +but a few months' experience under the present revenue act and shall need +to know what is developed by the returns of income produced under it, which +are not required t o be made until about the time this session terminates, +and what the economic probabilities of the country are in the latter part +of 1927, before we can reach any justifiable conclusion as to permanent tax +reduction. Moreover the present surplus results from many nonrecurrent +items. Meantime, it is possible to grant some real relief by a simple +measure making reductions in the payments which accrue on the 15th of March +and June, 1927. I am very strongly of the conviction that this is so much a +purely business matter that it ought not to be dealt with in a partisan +spirit. The Congress has already set the notable example of treating tax +problems without much reference to party, which might well be continued. +What I desire to advocate most earnestly is relief for the country from +unnecessary tax burdens. We can not secure that if we stop to engage in a +partisan controversy. As I do not think any change in the special taxes, or +tiny permanent reduction is practical, I therefore urge both parties of the +House Ways and Means Committee to agree on a bill granting the temporary +relief which I have indicated. Such a reduction would directly affect +millions of taxpayers, release large sums for investment in new enterprise, +stimulating industrial production and agricultural consumption, and +indirectly benefiting every family in the whole country. These are my +convictions stated with full knowledge that it is for the Congress to +decide whether they judge it best to make such a reduction or leave the +surplus for the present year to be applied to retirement of the war debt. +That also is eventually tax reduction. + +PROTECTIVE TARIFF + +It is estimated that customs receipts for the present fiscal year will +exceed $615,000,000, the largest which were ever secured from that source. +The value of our imports for the last fiscal year was $4,466,000,000, an +increase of more than 71 per cent since the present tariff law went into +effect. Of these imports about 65 per cent, or, roughly, $2,900,000,000, +came in free of duty, which means that the United States affords a +duty-free market to other countries almost equal in value to the total +imports of Germany and greatly exceeding the total imports of France. We +have admitted a greater volume of free imports than any other country +except England. + +We are, therefore, levying duties on about $1,550,000,000 of imports. +Nearly half of this, or $700,000,000, is subject to duties for the +protection of agriculture and have their origin in countries other than +Europe. They substantially increased the prices received by our farmers for +their produce. About $300,000.000 more is represented by luxuries such as +costly rugs, furs, precious stones, etc. This leaves only about +$550,000,000 of our imports under a schedule of duties which is in general +under consideration when there is discussion of lowering the tariff. While +the duties on this small portion, representing only about 12 per cent of +our imports, undoubtedly represent the difference between a fair degree of +prosperity or marked depression to many of our industries and the +difference between good pay and steady work or wide unemployment to many of +our wage earners, it is impossible to conceive how other countries or our +own importers could be greatly benefited if these duties are reduced. Those +who are starting an agitation for a reduction of tariff duties, partly at +least for the benefit of those to whom money has been lent abroad, ought to +know that there does not seem to be a very large field within the area of +our imports in which probable reductions would be advantageous to foreign +goods. Those who wish to benefit foreign producers are much more likely to +secure that result by continuing the present enormous purchasing power +which comes from our prosperity that increased our imports over 71 +per cent in four years than from any advantages that are likely to accrue +from a general tariff reduction. + +AGRICULTURE + +The important place which agriculture holds in the economic and social life +of the Nation can not be overestimated. The National Government is +justified in putting forth every effort to make the open country a +desirable place to live. No condition meets this requirement which fails to +supply a fair return on labor expended and capital invested. While some +localities and some particular crops furnish exceptions, in general +agriculture is continuing to make progress in recovering from the +depression of 1921 and 1922. Animal products and food products are in a +more encouraging position, while cotton, due to the high prices of past +years supplemented by ideal weather conditions, has been stimulated to a +point of temporary over production. Acting on the request of the cotton +growing interests, appointed a committee to assist in carrying out their +plans. As it result of this cooperation sufficient funds have been pledged +to finance the storage and carrying of 4,000,000 bales of cotton. Whether +those who own the cotton are willing to put a part of their stock into this +plan depends on themselves. The Federal Government has cooperated in +providing ample facilities. No method of meeting the situation would be +adequate which does not contemplate a reduction of about one-third in the +acreage for the coming year. The responsibility for making the plan +effective lies with those who own and finance cotton and cotton lands. + +The Department of Agriculture estimates the net income of agriculture for +the year 1920-21 at only $375,000,000; for 1924-25, $2,656,000,000; for +1925-26, $2,757,000,000. This increase has been brought about in part by +the method already referred to, of Federal tax reduction, the elimination +of waste, and increased efficiency in industry. The wide gap that existed a +few years ago between the index price of agricultural products and the +index price of other products has been gradually closing up, though the +recent depression in cotton has somewhat enlarged it. Agriculture had on +the whole been going higher while industry had been growing lower. +Industrial and commercial activities, being carried on for the most part by +corporations, are taxed at a much higher rate than farming, which is +carried on by individuals. This will inevitably make industrial commodity +costs high while war taxation lasts. It is because of this circumstance +that national tax reduction has a very large indirect benefit upon the +farmer, though it can not relieve him from the very great burden of the +local taxes which he pays directly. We have practically relieved the farmer +of any Federal income tax. + +There is agreement on all sides that some portions of our agricultural +industry have lagged behind other industries in recovery from the war and +that further improvement in methods of marketing of agricultural products +is most desirable. There is belief also that the Federal Government can +further contribute to these ends beyond the many helpful measures taken +during the last five years through the different acts of Congress for +advancing the interests of the farmers. + +The packers and stockyards act, + +Establishing of the intermediate credit banks for agricultural purposes, + +The Purnell Act for agricultural research, + +The Capper-Volstead Cooperative Marketing Act, + +The cooperative marketing act of 1926, + +Amendments to the warehousing act, + +The enlargement of the activities of the Department of Agriculture, + +Enlargement of the scope of loans by the Farm Loan Board, + +The tariff on agricultural products, + +The large Federal expenditure in improvement of waterways and highways, + +The reduction of Federal taxes, in all comprise a great series of +governmental actions in the advancement of the special interest of +agriculture. + +In determination of what further measures may be undertaken it seems to me +there are certain pitfalls which must be avoided and our test in avoiding +them should be to avoid disaster to the farmer himself. + +Acting upon my recommendation, the Congress has ordered the interstate +Commerce Commission to investigate the freight-rate structure, directing +that such changes shall be made in freight rates as will promote freedom of +movement of agricultural products. Railroad consolidation which I am +advocating would also result in a situation where rates could be made more +advantageous for farm produce, as has recently been done in the revision of +rates on fertilizers in the South. Additional benefit will accrue from the +development of our inland waterways. The Mississippi River system carries a +commerce of over 50,000,000 tons at a saving of nearly $18,000,000 +annually. The Inland Waterways Corporation operates boats on 2,500 miles of +navigable streams and through its relation with 165 railroads carries +freight into and out of 45 States of the Union. During the past six months +it has handled over 1,000,000 bushels of grain monthly and by its lower +freight rates has raised the price of such grain to the farmer probably +21/2 cents to 3 cents a bushel. The highway system on which the Federal +Government expends about $85,000,000 a year is of vital importance to the +rural regions. + +The advantages to be derived from a more comprehensive and less expensive +system of transportation for agriculture ought to be supplemented by +provision for an adequate supply of fertilizer at a lower cost than it is +at present obtainable. This advantage we are attempting to secure by the +proposed development at Muscle Shoals, and there are promising experiments +being made in synthetic chemistry for the production of nitrates. + +A survey should be made of the relation of Government grazing lands to the +livestock industry. Additional legislation is desirable more definitely to +establish the place of grazing in the administration of the national +forests, properly subordinated to their functions of producing timber and +conserving the water supply. Over 180,000,000 acres of grazing lands are +still pastured as commons in the public domain with little or no +regulation. This has made their use so uncertain that it has contributed +greatly to the instability of the livestock industry. Very little of this +land is suited to settlement or private ownership. Some plan ought to be +adopted for its use in grazing, corresponding broadly to that already +successfully applied to the national forests. + +The development of sound and strong cooperative associations is of +fundamental importance to our agriculture. It is encouraging to note, +therefore, that a vigorous and healthy growth in the cooperative movement +is continuing. Cooperative associations reporting to the Department of +Agriculture at the end of 1925 had on their membership rolls a total of +2,700,000 producers. Their total business in 1925 amounted to approximately +$2,400,000,000, compared with $635,800,000 in 1915. Legislative action to +assist cooperative associations and supplement their efforts was passed at +the last session of Congress. Important credit measures were also provided +by Congress in 1923 which have been of inestimable value to the cooperative +associations. Although the Federal credit agencies have served agriculture +well, I think it may be possible to broaden and strengthen the service of +these institutions. + +Attention is again directed to the surplus problem of agriculture by the +present cotton situation. Surpluses often affect prices of various farm +commodities in a disastrous manner, and the problem urgently demands a +solution. Discussions both in and out of Congress during the past few years +have given us a better understanding of the subject, and it is my hope that +out of the various proposals made the basis will be found for a sound and +effective solution upon which agreement can be reached. In my opinion +cooperative marketing associations will be important aids to the ultimate +solution of the problem. It may well be, however, that additional measures +will be needed to supplement their efforts. I believe all will agree that +such measures should not conflict with the best interests of the +cooperatives, but rather assist and strengthen them. In working out this +problem to any sound conclusion it is necessary to avoid putting the +Government into the business of production or marketing or attempting to +enact legislation for the purpose of price fixing. The farmer does not +favor any attempted remedies that partake of these elements. He has a +sincere and candid desire for assistance. If matched by an equally sincere +and candid consideration of the different remedies proposed a sound +measure of relief ought to result. It is unfortunate that no general +agreement has been reached by the various agricultural interests upon any +of the proposed remedies. Out of the discussion of various proposals which +can be had before the Committees of Agriculture some measure ought to be +perfected which would be generally satisfactory. + +Due to the emergency arising from a heavy tropical storm in southern +Florida, I authorized the Secretary of Agriculture to use certain funds in +anticipation of legislation to enable the farmers in that region to plant +their crops. The department will present a bill ratifying the loans which +were made for this purpose. + +Federal legislation has been adopted authorizing the cooperation of the +Government with States and private owners in the protection of forest lands +from fire. This preventive measure is of such great importance that I have +recommended for it an increased appropriation. + +Another preventive measure of great economic and sanitary importance is the +eradication of tuberculosis in cattle. Active work is now in progress in +one-fourth of the counties of the United States to secure this result. Over +12,000,000 cattle have been under treatment, and the average degree of +infection has fallen from 4.9 per cent to 2.8 per cent. he Federal +Government is making substantial expenditures for this purpose. + +Serious damage is threatened to the corn crop by the European corn borer. +Since 1917 it has spread from eastern New England westward into Indiana and +now covers about 100,000 square miles. It is one of the most formidable +pests because it spreads rapidly and is exceedingly difficult of control. +It has assumed a menace that is of national magnitude and warrants the +Federal Government in extending its cooperation to the State and local +agencies which are attempting to prevent its further spread and secure its +eradication. + +The whole question of agriculture needs most careful consideration. In the +past few years the Government has given this subject more attention than +any other and has held more consultations in relation to it than on any +other subject. While the Government is not to be blamed for failure to +perform the impossible, the agricultural regions are entitled to know that +they have its constant solicitude and sympathy. Many of the farmers are +burdened with debts and taxes which they are unable to carry. We are +expending in this country many millions of dollars each year to increase +farm production. We ought now to put more emphasis on the question of farm +marketing. If a sound solution of a permanent nature can be found for this +problem, the Congress ought not to hesitate to adopt it. + +DEVELOPMENT OF WATER RESOURCES + +In previous messages I have referred to the national importance of the +proper development of our water resources. The great projects of extension +of the Mississippi system, the protection an development of the lower +Colorado River, are before Congress, and I have previously commented upon +them. I favor the necessary legislation to expedite these projects. +Engineering studies are being made for connecting the Great Lakes with the +North Atlantic either through an all-American canal or by way of the St. +Lawrence River. These reports will undoubtedly be before the Congress +during its present session. It is unnecessary to dwell upon the great +importance of such a waterway not only to our mid-continental basin but to +the commerce and development of practically the whole Nation. Our river and +harbor improvement should be continued in accordance with the present +policy. Expenditure of this character is compatible with economy; it is in +the nature of capital investment. Work should proceed on the basic trunk +lines if this work is to be a success. If the country will be content to be +moderate and patient and permit improvements to be made where they will do +the greatest general good, rather than insisting on expenditures at this +time on secondary projects, our internal Waterways can be made a success. +If proposes legislation results in a gross manifestation of local +jealousies and selfishness, this program can not be carried out. Ultimately +we can take care of extensions, but our first effort should be confined to +the main arteries. + +Our inland commerce has been put to great inconvenience and expense by +reason of the lowering of the water level of the Great Lakes. This is an +international problem on which competent engineers are making reports. Out +of their study it is expected that a feasible method will be developed for +raising the level to provide relief for our commerce and supply water for +drainage. Whenever a practical plan is presented it ought to be speedily +adopted. + +RECLAMATION + +It is increasingly evident that the Federal Government must in the future +take a leading part in the impounding of water for conservation with +incidental power for the development of the irrigable lands of the and +region. The unused waters of the West are found mainly in large rivers. +Works to store and distribute these have such magnitude and cost that they +are not attractive to private enterprise. Water is the irreplaceable +natural resource. Its precipitation can not be increased. Its storage on +the higher reaches of streams, to meet growing needs, to be used repeatedly +as it flows toward the seas, is a practical and prudent business policy. + +The United States promises to follow the course of older irrigation +countries, where recent important irrigation developments have been carried +out as national undertakings. It is gratifying, therefore, that conditions +on Federal reclamation projects have become satisfactory. The gross value +of crop, grown with water from project works increased from $110,000,000 +in 1924 to $131,000,000 in 1925. The adjustments made last year by Congress +relieved irrigators from paying construction costs on unprofitable land, +and by so doing inspired new hope and confidence in ability to meet the +payments required. Construction payments by water users last year were the +largest in the history of the bureau. + +The anticipated reclamation fund will be fully absorbed for a number of +years in the completion of old projects and the construction of projects +inaugurated in the past three years. We should, however, continue to +investigate and study the possibilities of a carefully planned development +of promising projects, logically of governmental concern because of their +physical magnitude, immense cost, and the interstate and international +problems involved. Only in this way may we be fully prepared to meet +intelligently the needs of our fast-growing population in the years to +come. + +TRANSPORTATION + +It would be difficult to conceive of any modern activity which contributes +more to the necessities and conveniences of life than transportation. +Without it our present agricultural production and practically all of our +commerce would be completely prostrated. One of the large contributing +causes to the present highly satisfactory state of our economic condition +is the prompt and dependable service, surpassing all our previous records, +rendered by the railroads. This power has been fostered by the spirit of +cooperation between Federal and State regulatory commissions. To render +this service more efficient and effective and to promote a more scientific +regulation, the process of valuing railroad properties should be simplified +and the primary valuations should be completed as rapidly as possible. The +problem of rate reduction would be much simplified by a process of railroad +consolidations. This principle has already been adopted as Federal law. +Experience has shown that a more effective method must be provided. Studies +have already been made and legislation introduced seeking to promote this +end. It would be of great advantage if it could be taken up at once and +speedily enacted. The railroad systems of the country and the convenience +of all the people are waiting on this important decision. + +MERCHANT MARINE + +It is axiomatic that no agricultural and industrial country can get the +full benefit of its own advantages without a merchant marine. We have been +proceeding under the act of Congress that contemplates the establishment of +trade routes to be ultimately transferred to private ownership and +operation. Due to temporary conditions abroad and at home we have a large +demand just now for certain types of freight vessels. Some suggestion has +been made for new construction. I do not feel that we are yet warranted in +entering, that field. Such ships as we might build could not be sold after +they are launched for anywhere near what they would cost. We have expended +over $250,000,000 out of the public Treasury in recent years to make up the +losses of operation, not counting the depreciation or any cost whatever of +our capital investment. The great need of our merchant marine is not for +more ships but for more freight. + +Our merchants are altogether too indifferent about using American ships for +the transportation of goods which they send abroad or bring home. Some of +our vessels necessarily need repairs, which should be made. I do not +believe that the operation of our fleet is as economical and efficient as +it could be made if placed under a single responsible head, leaving the +Shipping Board free to deal with general matters of policy and regulation. + +RADIO LEGISLATION + +The Department of Commerce has for some years urgently presented the +necessity for further legislation in order to protect radio listeners from +interference between broadcasting stations and to carry out other +regulatory functions. Both branches of Congress at the last session passed +enactments intended to effect such regulation, but the two bills yet remain +to be brought into agreement and final passage. + +Due to decisions of the courts, the authority of the department under the +law of 1912 has broken down; many more stations have been operating than +can be accommodated within the limited number of wave lengths available; +further stations are in course of construction; many stations have departed +from the scheme of allocation set down by the department, and the whole +service of this most important public function has drifted into such chaos +as seems likely, if not remedied, to destroy its great value. I most +urgently recommend that this legislation should be speedily enacted. + +I do not believe it is desirable to set up further independent agencies in +the Government. Rather I believe it advisable to entrust the important +functions of deciding who shall exercise the privilege of radio +transmission and under what conditions, the assigning of wave lengths and +determination of power, to a board to be assembled whenever action on such +questions becomes necessary. There should be right of appeal to the courts +from the decisions of such board. The administration of the decisions of +the board and the other features of regulation and promotion of radio in +the public interest, together with scientific research, should remain in +the Department of Commerce. Such an arrangement makes for more expert, more +efficient, and more economical administration that an independent agency or +board, whose duties, after initial stages, require but little attention, in +which administrative functions are confused with semijudicial functions and +from which of necessity there must be greatly increased personnel and +expenditure. + +THE WAGE EARNER + +The great body of our people are made up of wage earners. Several hundred +thousands of them are on the pay rolls of the United States Government. +Their condition very largely is fixed by legislation. We have recently +provided increases in compensation under a method of reclassification and +given them the advantage of a liberal retirement system as a support for +their declining years. Most of them are under the merit system, which is a +guaranty of their intelligence, and the efficiency of their service is a +demonstration of their loyalty. The Federal Government should continue to +set a good example for all other employers. + +In the industries the condition of the wage earner has steadily improved. +The 12-hour day is almost entirely unknown. Skilled labor is well +compensated. But there are unfortunately a multitude of workers who have +not yet come to share in the general prosperity of the Nation. Both the +public authorities and private enterprise should be solicitous to advance +the welfare of this class. The Federal Government has been seeking to +secure this end through a protective tariff, through restrictive +immigration, through requiring safety devices for the prevention of +accidents, through the granting of workman's compensation, through civilian +vocational rehabilitation and education, through employment information +bureaus, and through such humanitarian relief as was provided in the +maternity and infancy legislation. It is a satisfaction to report that a +more general condition of contentment exists among wage earners and the +country is more free from labor disputes than it has been for years. While +restrictive immigration has been adopted in part for the benefit of the +wage earner, and in its entirety for the benefit of the country, it ought +not to cause a needless separation of families and dependents from their +natural source of support contrary to the dictates of humanity. + +BITUMINOUS COAL + +No progress appears to have been made within large areas of the bituminous +coal industry toward creation of voluntary machinery by which greater +assurance can be given to the public of peaceful adjustment of wage +difficulties such as has been accomplished in the anthracite industry. This +bituminous industry is one of primary necessity and bears a great +responsibility to the Nation for continuity of supplies. As the wage +agreements in the unionized section of the industry expire on April 1 next, +and as conflicts may result which may imperil public interest, and have for +many years often called for action of the Executive in protection of the +public, I again recommend the passage of such legislation as will assist +the Executive in dealing with such emergencies through a special temporary +board of conciliation and mediation and through administrative agencies for +the purpose of distribution of coal and protection of the consumers of coal +from profiteering. At present the Executive is not only without authority +to act but is actually prohibited by law from making any expenditure to +meet the emergency of a coal famine. + +JUDICIARY + +The Federal courts hold a high position in the administration of justice in +the world. While individual judicial officers have sometimes been subjected +to just criticism, the courts as a whole have maintained an exceedingly +high standard. The Congress may well consider the question of supplying +fair salaries and conferring upon the Supreme Court the same rule-making +power on the law side of the district courts that they have always +possessed on the equity side. A bill is also pending providing for +retirement after a certain number of years of service, although they have +not been consecutive, which should have your favorable consideration. These +faithful servants of the Government are about the last that remain to be +provided for in the postwar readjustments. + +BANKING + +There has been pending in Congress for nearly three years banking +legislation to clarify the national bank act and reasonably to increase the +powers of the national banks. I believe that within the limitation of sound +banking principles Congress should now and for the future place the +national banks upon a fair equality with their competitors, the State +banks, and I trust that means may be found so that the differences on +branch-banking legislation between the Senate and the House of +Representatives may be settled along sound lines and the legislation +promptly enacted. + +It would be difficult to overestimate the service which the Federal reserve +system has already rendered to the country. It is necessary only to recall +the chaotic condition of our banking organization at the time the Federal +reserve system was put into operation. The old system consisted of a vast +number of independent banking units, with scattered bank reserves which +never could be mobilized in times of greatest need. In spite of vast +banking resources, there was no coordination of reserves or any credit +elasticity. As a consequence, a strain was felt even during crop-moving +periods and when it was necessary to meet other seasonal and regularly +recurring needs. + +The Federal reserve system is not a panacea for all economic or financial +ills. It can not prevent depression in certain industries which are +experiencing overexpansion of production or contraction of their markets. +Its business is to furnish adequate credit and currency facilities. This it +has succeeded in doing, both during the war and in the more difficult +period of deflation and readjustment which followed. It enables us to look +to the future with confidence and to make plans far ahead, based on the +belief that the Federal reserve system will exercise a steadying influence +on credit conditions and thereby prevent tiny sudden or severe reactions +from the period of prosperity which we are now enjoying. In order that +these plans may go forward, action should be taken at the present session +on the question of renewing the banks' charters and thereby insuring a +continuation of the policies and present usefulness of the Federal reserve +system. + +FEDERAL REGULATION + +I am in favor of reducing, rather than expanding, Government bureaus which +seek to regulate and control the business activities of the people. +Everyone is aware that abuses exist and will exist so long as we are +limited by human imperfections. Unfortunately, human nature can not be +changed by an act of the legislature. When practically the sole remedy for +many evils lies in the necessity of the people looking out for themselves +and reforming their own abuses, they will find that they are relying on a +false security if the Government assumes to hold out the promise that it is +looking out for them and providing reforms for them. This principle is +preeminently applicable to the National Government. It is too much assumed +that because an abuse exists it is the business of the National Government +to provide a remedy. The presumption should be that it is the business of +local and State governments. Such national action results in encroaching +upon the salutary independence of the States and by undertaking to +supersede their natural authority fills the land with bureaus and +departments which are undertaking to do what it is impossible for them to +accomplish and brings our whole system of government into disrespect and +disfavor. We ought to maintain high standards. We ought to punish +wrongdoing. Society has not only the privilege but the absolute duty of +protecting itself and its individuals. But we can not accomplish this end +by adopting a wrong method. Permanent success lies in local, rather than +national action. Unless the locality rises to its own requirements, there +is an almost irresistible impulse for the National Government to intervene. +The States and the Nation should both realize that such action is to be +adopted only as a last resort. + +THE NEGRO + +The social well-being of our country requires our constant effort for the +amelioration of race prejudice and the extension to all elements of equal +opportunity and equal protection under the laws which are guaranteed by +the. Constitution. The Federal Government especially is charged with this +obligation in behalf of the colored people of the Nation. Not only their +remarkable progress, their devotion and their loyalty, but, our duty to +ourselves under our claim that we are an enlightened people requires us to +use all our power to protect them from the crime of lynching. Although +violence of this kind has very much decreased, while any of it remains we +can not justify neglecting to make every effort to eradicate it by law. + +The education of the colored race under Government encouragement is +proceeding successfully and ought to have continuing support. An increasing +need exists for properly educated and trained medical skill to be devoted +to the service of this race. + +INSULAR POSSESSIONS + +This Government holds in sacred trusteeship islands which it has acquired +in the East and West Indies. In all of them the people are more prosperous +than at any previous time. A system of good roads, education, and general +development is in progress. The people are better governed than ever before +and generally content. + +In the Philippine Islands Maj. Gen. Leonard Wood has been Governor General +for five years and has administered his office with tact and ability +greatly to the success of the Filipino people. These are a proud and +sensitive race, who are making such progress with our cooperation that we +can view the results of this experiment with great satisfaction. As we are +attempting to assist this race toward self-government, we should look upon +their wishes with great respect, granting their requests immediately when +they are right, yet maintaining a frank firmness in refusing when they are +wrong. We shall measure their progress in no small part by their acceptance +of the terms of the organic law under which the islands are governed and +their faithful observance of its provisions. Need exists for clarifying the +duties of the auditor and declaring them to be what everyone had supposed +they were. We have placed our own expenditures under the supervision of the +Comptroller General. It is not likely that the expenditures in the +Philippine Islands need less supervision than our own. The Governor General +is hampered in his selection of subordinates by the necessity of securing a +confirmation, which has oftentimes driven him to the expediency of using +Army officers in work for which civilian experts would be much better +fitted. Means should be provided for this and such other purposes as he may +require out of the revenue which this Government now turns back to the +Philippine treasury. + +In order that these possessions might stiffer no seeming neglect, I have +recently sent Col. Carmi A. Thompson to the islands to make a survey in +cooperation with the Governor General to suggest what might be done to +improve conditions. Later, I may make a more extended report including +recommendations. The economic development of the islands is very important. +They ought not to be turned back to the people until they are both +politically fitted for self-government and economically independent. Large +areas are adaptable to the production of rubber. No one contemplates any +time in the future either under the present or a more independent form of +government when we should not assume some responsibility for their defense. +For their economic advantage, for the employment of their people, and as a +contribution to our power of defense which could not be carried on without +rubber, I believe this industry should be encouraged. It is especially +adapted to the Filipino people themselves, who might cultivate it +individually on a small acreage. It could be carried on extensively by +American capital in a way to furnish employment at good wages. I am opposed +to the promotion of any policy that does not provide for absolute freedom +on the part of the wage earners and do not think we should undertake to +give power for large holdings of land in the islands against the opposition +of the people of the locality. Any development of the islands must be +solely with the first object of benefiting the people of the islands. At an +early day, these possessions should be taken out from under all military +control and administered entirely on the civil side of government. + +NATIONAL DEFENSE + +Our policy of national defense is not one of making war, but of insuring +peace. The land and sea force of America, both in its domestic and foreign +implications, is distinctly a peace force. It is an arm of the police power +to guarantee order and the execution of the law at home and security to our +citizens abroad. No self-respecting nation would neglect to provide an army +and navy proportionate to its population, the extent of its territory, and +the dignity of the place which it occupies in the world. When it is +considered that no navy in the world, with one exception, approaches ours +and none surpasses it, that our Regular Army of about 115,000 men is the +equal of any other like number of troops, that our entire permanent and +reserve land and sea force trained and training consists of a personnel of +about 610,000, and that our annual appropriations are about $680,000,000 a +year, expended under the direction of an exceedingly competent staff, it +can not be said that our country is neglecting its national defense. It is +true that a cult of disparagement exists, but that candid examination made +by the Congress through its various committees has always reassured the +country and demonstrated that it is maintaining the most adequate defensive +forces in these present years that it has ever supported in time of peace. + +This general policy should be kept in effect. Here and there temporary +changes may be made in personnel to meet requirements in other directions. +Attention should be given to submarines, cruisers, and air forces. +Particular points may need strengthening, but as a whole our military power +is sufficient. + +The one weak place in the whole line is our still stupendous war debt. In +any modern campaign the dollars are the shock troops. With a depleted +treasury in the rear, no army can maintain itself in the field. A country +loaded with debt is a country devoid of the first line of defense. Economy +is the handmaid of preparedness. If we wish to be able to defend ourselves +to the full extent of our power in the future, we shall discharge as soon +as possible the financial burden of the last war. Otherwise we would face a +crisis with a part of our capital resources already expended. + +The amount and kind of our military equipment is preeminently a question +for the decision of the Congress, after giving due consideration to the +advice of military experts and the available public revenue. Nothing is +more laudable than the cooperation of the agricultural and industrial +resources of the country for the purpose of supplying the needs of national +defense. In time of peril the people employed in these interests +volunteered in a most self-sacrificing way, often at the nominal charge of +a dollar a year. But the Army and Navy are not supported for the benefit of +supply concerns; supply concerns are supported for the benefit of the Army +and Navy. The distribution of orders on what is needed from different +concerns for the purpose of keeping up equipment and organization is +perfectly justified, but any attempt to prevail upon the Government to +purchase beyond its needs ought not to be tolerated. It is eminently fair +that those who deal with the Government should do so at a reasonable +profit. However, public money is expended not that some one may profit by +it, but in order to serve a public purpose. + +While our policy of national defense will proceed in order that we may be +independent and self-sufficient, I am opposed to engaging in any attempt at +competitive armaments. No matter how much or how little some other country +may feel constrained to provide, we can well afford to set the example, not +of being dictated to by others, but of adopting our own standards. We are +strong enough to pursue that method, which will be a most wholesome model +for the rest of the world. We are eminently peaceful, but we are by no +means weak. While we submit our differences with others, not to the +adjudication of force, but of reason, it is not because we are unable to +defend our rights. While we are doing our best to eliminate all resort to +war for the purpose of settling disputes, we can not but remember that the +peace we now enjoy had to be won by the sword and that if the rights of our +country are to be defended we can not rely for that purpose upon anyone but +ourselves. We can not shirk the responsibility, which is the first +requisite of all government, of preserving its own integrity and +maintaining the rights of its own citizens. It is only in accordance with +these principles that we can establish any lasting foundations for an +honorable and permanent peace. + +It is for these reasons that our country, like any other country, proposes +to provide itself with an army and navy supported by a merchant marine. Yet +these are not for competition with any other power. For years we have +besought nations to disarm. We have recently expressed our willingness at +Geneva to enter into treaties for the limitation of all types of warships +according to the ratio adopted at the Washington Conference. This offer is +still pending. While we are and shall continue to be armed it is not as a +menace, but rather a common assurance of tranquility to all the peaceloving +people of the world. For us to do any less would be to disregard our +obligations, evade our responsibilities, and jeopardize our national honor. + +VETERANS + +This country, not only because it is bound by honor but because of the +satisfaction derived from it, has always lavished its bounty upon its +veterans. For years a service pension has been bestowed upon the Grand Army +on reaching a certain age. Like provision has been made for the survivors +of the Spanish War. A liberal future compensation has been granted to all +the veterans of the World War. But it is in the case of the, disabled and +the dependents that the Government exhibits its greatest solicitude. This +work is being well administered by the Veterans' Bureau. The main +unfinished feature is that of hospitalization. This requirement is being +rapidly met. Various veteran bodies will present to you recommendations +which should have your careful consideration. At the last session we +increased our annual expenditure for pensions and relief on account of the +veterans of three wars. While I approve of proper relief for all suffering, +I do not favor any further extension of our pension system at this time. + +ALIEN PROPERTY + +We still have in the possession of the Government the alien property. It +has always been the policy of America to hold that private enemy property +should not be confiscated in time of war. This principle we have +scrupulously observed. As this property is security for the claims of our +citizens and our Government, we can not relinquish it without adequate +provision for their reimbursement. Legislation for the return of this +property, accompanied by suitable provisions for the liquidation of the +claims of our citizens and our Treasury, should be adopted. If our +Government releases to foreigners the security which it holds for +Americans, it must at the same time provide satisfactory safeguards for +meeting American claims. + +PROHIBITION + +The duly authorized public authorities of this country have made +prohibition the law of the land. Acting under the Constitution the Congress +and the legislatures of practically all the, States have adopted +legislation for its enforcement. Some abuses have arisen which require +reform. Under the law the National Government has entrusted to the Treasury +Department the especial duty of regulation and enforcement. Such +supplementary legislation as it requires to meet existing conditions should +be carefully and speedily enacted. Failure to support the Constitution and +observe the law ought not to be tolerated by public opinion. Especially +those in public places, who have taken their oath to support the +Constitution, ought to be most scrupulous in its observance. Officers of +the Department of Justice throughout the country should be vigilant in +enforcing the law, but local authorities, which had always been mainly +responsible for the enforcement of law in relation to intoxicating liquor, +ought not to seek evasion by attempting to shift the burden wholly upon the +Federal agencies. Under the Constitution the States are jointly charged +with the Nation in providing for the enforcement of the prohibition +amendment. Some people do not like the amendment, some do not like other +parts of the Constitution, some do not like any of it. Those who entertain +such sentiments have a perfect right to seek through legal methods for a +change. But for any of our inhabitants to observe such parts of the +Constitution as they like, while disregarding others, is a doctrine that +would break down all protection of life and property and destroy the +American system of ordered liberty. + +FOREIGN RELATIONS + +The foreign policy of this Government is well known. It is one of peace +based on that mutual respect that arises from mutual regard for +international rights and the discharge of international obligations. It is +our purpose to promote understanding and good will between ourselves and +all other people. The American people are altogether lacking in an +appreciation of the tremendous good fortune that surrounds their +international position. We have no traditional enemies. We are not +embarrassed over any disputed territory. We have no possessions that are +coveted by others; they have none that are coveted by us. Our borders are +unfortified. We fear no one; no one fears us. All the world knows that the +whole extent of our influence is against war and in favor of peace, against +the use of force and in favor of negotiation, arbitration, and adjudication +as a method of adjusting international differences. We look with disfavor +upon all aggressive warfare. We are strong enough so that no one can charge +us with weakness if we are slow to anger. Our place is sufficiently +established so that we need not be sensitive over trifles. Our resources, +are large enough so that we can afford to be generous. At the same time we +are a nation among nations and recognize a responsibility not only to +ourselves, but in the interests of a stable and enlightened civilization, +to protect and defend the international rights of our Government and our +citizens. + +It is because of our historical detachment and the generations of +comparative indifference toward it by other nations that our public is +inclined to consider altogether too seriously the reports that we are +criticized abroad. We never had a larger foreign trade than at the present +time. Our good offices were never more sought and the necessity for our +assistance and cooperation was never more universally declared in any time +of peace. We know that the sentiments which we entertain toward all other +nations are those of the most sincere friendship and good will and of all +unbounded desire to help, which we are perfectly willing to have judged by +their fruits. In our efforts to adjust our international obligations we +have met with a response which, when everything is considered, I believe +history will record as a most remarkable and gratifying demonstration of +the sanctity with which civilized nations undertake to discharge their +mutual obligations. Debt settlements have been negotiated with practically +all of those who owed us and all finally adjusted but two, which are, in +process of ratification. When we consider the real sacrifice that will be +necessary on the part of other nations, considering all their +circumstances, to meet their agreed payments, we ought to hold them in +increased admiration and respect. It is true that we have extended to them +very generous treatment, but it is also true that they have agreed to repay +its all that we loaned to them and some interest. + +A special conference on the Chinese customs tariff provided for by the +treaty between the nine powers relating to the Chinese customs tariff +signed at Washington on February 6, 1922, was called by the Chinese +Government to meet at Peking, on October 26, 1925. We participated in this +conference through fully empowered delegates and, with good will, +endeavored to cooperate with the other participating powers with a view to +putting into effect promises made to China at the Washington conference, +and considering any reasonable proposal that might be made by the Chinese +Government for the revision of the treaties on the subject of China's +tariff. With these aims in view the American delegation at the outset of +the conference proposed to put into effect the surtaxes provided for by the +Washington treaty and to proceed immediately to the negotiation of a +treaty, which, among other things, was to make provision for the abolition +of taxes collected on goods in transit, remove the tariff restrictions in +existing treaties, and put into effect the national tariff law of China. + +Early in April of the present year the central Chinese Government was +ousted from power by opposing warring factions. It became impossible under +the circumstances to continue the negotiations. Finally, on July 3, the +delegates of the foreign powers, including those of the United States, +issued a statement expressing their unanimous and earnest desire to proceed +with the work of the conference at the earliest possible moment when the +delegates of the Chinese Government are in a position to resume discussions +with the foreign delegates of the problems before the conference. We are +prepared to resume the negotiations thus interrupted whenever a Government +representing the Chinese people and acting on their behalf presents itself. +The fact that constant warfare between contending Chinese factions has +rendered it impossible to bring these negotiations to a successful +conclusion is a matter of deep regret. Throughout these conflicts we have +maintained a position of the most careful neutrality. Our naval vessels in +Asiatic waters, pursuant to treaty rights, have been used only for the +protection of American citizens. + +Silas H. Strawn, Esq., was sent to China as American commissioner to +cooperate with commissioners of the other powers in the establishment of a +commission to inquire into the present practice of extraterritorial +jurisdiction in China, with a view to reporting to the Governments of the +several powers their findings of fact in regard to these matters. The +commission commenced its work in January, 1926, and agreed upon a joint +report which was signed on September 16, 1926. The commission's report has +been received and is being studied with a view to determining our future +policy in regard to the question of extraterritorial privileges under +treaties between the United States and China. + +The Preparatory Commission for the Disarmament Conference met at Geneva on +May 18 and its work has been proceeding almost continuously since that +date. It would be premature to attempt to form a judgment as to the +progress that has been made. The commission has had before it a +comprehensive list of questions touching upon all aspects of the question +of the limitation of armament. In the commission's discussions many +differences of opinion have developed. However, I am hopeful that at least +some measure of agreement will be reached as the discussions continue. The +American representation on the commission has consistently tried to be +helpful, and has kept before it the practical objective to which the +commission is working, namely, actual agreements for the limitation of +armaments. Our representatives will continue their work in that direction. + +One of the most encouraging features of the commission's work thus far has +been the agreement in principle among the naval experts of a majority of +the powers parties to the Washington treaty limiting naval armament upon +methods and standards for the comparison and further limitation of naval +armament. It is needless to say that at the proper time I shall be prepared +to proceed along practical lines to the conclusion of agreements carrying +further the work begun at the Washington Conference in 1921. + +DEPARTMENT REPORTS + +Many important subjects which it is impossible even to mention in the short +space of an annual message you will find fully discussed in the +departmental reports. A failure to include them here is not to be taken as +indicating any lack of interest, but only a disinclination to state +inadequately what has been much better done in other documents. + +THE CAPITAL CITY + +We are embarking on an ambitious building program for the city of +Washington. The Memorial Bridge is under way with all that it holds for use +and beauty. New buildings are soon contemplated. This program should +represent the best that exists in the art and science of architecture. Into +these structures which must be considered as of a permanent nature ought to +go the aspirations of the Nation, its ideals expressed in forms of beauty. +If our country wishes to compete with others, let it not be in the support +of armaments but in the making of a beautiful capital city. Let it express +the soul of America. Whenever an American is at the seat of his Government, +however traveled and cultured he may be, he ought to find a city of stately +proportion, symmetrically laid out and adorned with the best that there is +in architecture, which would arouse his imagination and stir his patriotic +pride. In the coming years Washington should be not only the art center of +our own country but the art center of the world. Around it should center +all that is best in science, in learning, in letters, and in art. These are +the results that justify the creation of those national resources with +which we have been favored. + +AMERICAN IDEALS + +America is not and must not be a country without ideals. They are useless +if they are only visionary; they are only valuable if they are practical. A +nation can not dwell constantly on the mountain tops. It has to be +replenished and sustained through the ceaseless toil of the less inspiring +valleys. But its face ought always to be turned upward, its vision ought +always to be fixed on high. + +We need ideals that can be followed in daily life, that can be translated +into terms of the home. We can not expect to be relieved from toil, but we +do expect to divest it of degrading conditions. Work is honorable; it is +entitled to an honorable recompense. We must strive mightily, but having +striven there is a defect in our political and social system if we are not +in general rewarded with success. To relieve the land of the burdens that +came from the war, to release to the individual more of the fruits of his +own industry, to increase his earning capacity and decrease his hours of +labor, to enlarge the circle of his vision through good roads and better +transportation, to lace before him the opportunity for education both in +science and in art, to leave him free to receive the inspiration of +religion, all these are ideals which deliver him from the servitude of the +body and exalt him to the service of the soul. Through this emancipation +from the things that are material, we broaden our dominion over the things +that are spiritual. + +*** + +State of the Union Address +Calvin Coolidge +December 6, 1927 + +Members of the Congress: + +It is gratifying to report that for the fourth consecutive year the state +of the Union in general is good. We are at peace. The country as a whole +has had a prosperity never exceeded. Wages are at their highest range, +employment is plentiful. Some parts of agriculture and industry have +lagged; some localities have suffered from storm and flood. But such losses +have been absorbed without serious detriment to our great economic +structure. Stocks of goods are moderate and a wholesome caution is +prevalent. Rates of interest for industry, agriculture, and government have +been reduced. Savers and investors are providing capital for new +construction in industry and public works. The purchasing power of +agriculture has increased. If the people maintain that confidence which +they are entitled to have in themselves, in each other, and in America, a +comfortable prosperity will continue. + +CONSTRUCTIVE ECONOMY + +Without constructive economy in Government expenditures we should not now +be enjoying these results or these prospects. Because we are not now +physically at war, some people are disposed to forget that our war debt +still remains. The Nation must make financial sacrifices, accompanied by a +stern self-denial in public expenditures, until we have conquered the +disabilities of our public finance. While our obligation to veterans and +dependents is large and continuing, the heavier burden of the national debt +is being steadily eliminated. At the end of this fiscal year it will be +reduced from about $26,600,000,000 to about $17,975,000,000. Annual +interest, including war savings, will have been reduced from $1,055,000,000 +to $670,0001,000. The sacrifices of the people, the economy of the +Government, are showing remarkable results. They should be continued for +the purpose of relieving the Nation of the burden of interest and debt and +releasing revenue for internal improvements and national development. + +Not only the amount, but the rate, of Government interest has been reduced. +Callable bonds have been refunded and paid, so that during this year the +average rate of interest on the present public debt for the first time fell +below 4 per cent. Keeping the credit of the Nation high is a tremendously +profitable operation. + +TAX REDUCTION + +The immediate fruit of economy and the retirement of the public debt is tax +reduction. The annual saving in interest between 1925 and 1929 is +$212,000,000. Without this no bill to relieve the taxpayers would be worth +proposing. The three measures already enacted leave our Government revenues +where they are not oppressive. Exemptions, have been increased until +115,000,000 people make but 2,500,000 individual taxable returns, so that +further reduction should be mainly for the purpose of removing +inequalities. The Secretary of the Treasury has recommended a measure which +would give us a much better balanced system of taxation and without +oppression produce sufficient revenue. It has my complete support. + +Unforeseen contingencies requiring money are always arising. Our probable +surplus for June 30, 1929, is small. A slight depression in business would +greatly reduce our revenue because of our present method of taxation. The +people ought to take no selfish attitude of pressing for removing moderate +and fair taxes which might produce a deficit. We must keep our budget +balanced for each year. That is the corner stone of our national credit, +the trifling price we pay to command the lowest rate of interest of any +great power in the world. Any surplus can be applied to debt reduction, and +debt reduction is tax reduction. Under the present circumstances it would +be far better to leave the rates as they are than to enact a bill carrying +the peril of a deficit. This is not a problem to be approached in a narrow +or partisan spirit. All of those who participate in finding a reasonable +solution will be entitled to participate in any credit that accrues from it +without regard to party. The Congress has already demonstrated that tax +legislation can be removed from purely political consideration into the +realm of patriotic business principles. + +Any bill for tax reduction should be written by those who are responsible +for raising, managing, and expending the finances of the Government. If +special interests, too often selfish, always uninformed of the national +needs as a whole, with hired agents using their proposed beneficiaries as +engines of propaganda, are permitted to influence the withdrawal of their +property from taxation, we shall have a law that is unbalanced and unjust, +bad for business, bad for the country, probably resulting in a deficit, +with disastrous financial Consequences. The Constitution has given the +Members of the Congress sole authority to decide what tax measures shall be +presented for approval. While welcoming information from any quarter, the +Congress should continue to exercise its own judgment in a matter so vital +and important to all the interests of the country as taxation. + +NATIONAL DEFENSE + +Being a nation relying not on force, but on fair dealing and good will, to +maintain peace with others, we have provided a moderate military force in a +form adapted solely to defense. It should be continued with a very generous +supply of officers and with the present base of personnel, subject to +fluctuations which may be temporarily desirable. + +The five-year program for our air forces is in keeping with this same +policy and commensurate with the notable contributions of America to the +science of aeronautics. The provisions of the law lately enacted are being +executed as fast as the practical difficulties of an orderly and stable +development permit. + +While our Army is small, prudence requires that it should be kept in a high +state of efficiency and provided with such supplies as would permit of its +immediate expansion. The garrison ration has lately been increased. +Recommendations for an appropriation of $6,166,000 for new housing made to +the previous Congress failed to pass. While most of the Army is well +housed, some of it which is quartered in wartime training camps is becoming +poorly housed. In the past three years $12,533,000 have been appropriated +for reconstruction and repairs, and an authorization has been approved of +$22,301,000 for new housing, under which $8,070,000 has already been +appropriated. A law has also been passed, complying with the request of the +War Department, allocating funds received from the sale of buildings and +land for housing purposes. The work, however, is not completed, so that +other appropriations are being recommended. + +Our Navy is likewise a weapon of defense. We have a foreign commerce and +ocean lines of trade unsurpassed by any other country. We have outlying +territory in the two great oceans and long stretches of seacoast studded +with the richest cities in the world. We are responsible for the protection +of a large population and the greatest treasure ever bestowed upon any +people. We are charged with an international duty of defending the Panama +Canal. To meet these responsibilities we need a very substantial sea +armament. It needs aircraft development, which is being provided under the +five-year program. It needs submarines as soon as the department decides +upon the best type of construction. It needs airplane carriers and a +material addition to its force of cruisers. We can plan for the future and +begin a moderate building program. + +This country has put away the Old World policy of competitive armaments. It +can never be relieved of the responsibility of adequate national defense. +We have one treaty secured by an unprecedented attitude of generosity on +our part for a limitation in naval armament. After most careful +preparation, extending over months, we recently made every effort to secure +a three-power treaty to the same end. We were granted much cooperation by +Japan, but we were unable to come to an agreement with Great Britain. While +the results of the conference were of considerable value, they were mostly +of a negative character. We know now that no agreement can be reached which +will be inconsistent with a considerable building program on our part. We +are ready and willing to continue the preparatory investigations on the +general subject of limitation of armaments which have been started under +the auspices of the League of Nations. + +We have a considerable cruiser tonnage, but a part of it is obsolete. +Everyone knew that had a three-power agreement been reached it would have +left us with the necessity of continuing our building program. The failure +to agree should not cause us to build either more or less than we otherwise +should. Any future treaty of limitation will call on us for more ships. We +should enter on no competition. We should refrain from no needful program. +It should be made clear to all the world that lacking a definite agreement, +the attitude of any other country is not to be permitted to alter our own +policy. It should especially be demonstrated that propaganda will not cause +us to change our course. Where there is no treaty limitation, the size of +the Navy which America is to have will be solely for America to determine. +No outside influence should enlarge it or diminish it. But it should be +known to all that our military power holds no threat of aggrandizement. It +is a guaranty of peace and security at home, and when it goes abroad it is +an instrument for the protection of the legal rights of our citizens under +international law, a refuge in time of disorder, and always the servant of +world peace. Wherever our flag goes the rights of humanity increase. + +MERCHANT MARINE + +The United States Government fleet is transporting a large amount of +freight and reducing its drain on the Treasury. The Shipping Board is +constantly under pressure, to which it too often yields, to protect private +interests, rather than serve the public welfare. More attention should be +given to merchant ships as an auxiliary of the Navy. The possibility of +including their masters and crews in the Naval Reserve, with some +reasonable compensation, should be thoroughly explored as a method of +encouraging private operation of shipping. Public operation is not a +success. No investigation, of which I have caused several to be made, has +failed to report that it could not succeed or to recommend speedy transfer +to private ownership. Our exporters and importers are both indifferent +about using American ships. It should be our policy to keep our present +vessels in repair and dispose of them as rapidly as possible, rather than +undertake any new construction. Their operation is a burden on the National +Treasury, for which we are not receiving sufficient benefits. + +COMMERCIAL AVIATION + +A rapid growth is taking place in aeronautics. The Department of Commerce +has charge of the inspection and licensing system and the construction of +national airways. Almost 8,000 miles are already completed and about 4,000 +miles more contemplated. Nearly 4,400 miles are now equipped and over 3,000 +miles more will have lighting and emergency landing fields by next July. +Air mail contracts are expected to cover 24 of these lines. Daily airway +flying is nearly 15,000 miles and is expected to reach 25,000 miles early +next year. + +Flights for other purposes exceed 22,000 miles each day. Over 900 airports, +completed and uncompleted, have been laid out. The demand for aircraft has +greatly increased. The policy already adopted by the Congress is producing +the sound development of this coming industry. + +WESTERN HEMISPHERE AIR MAIL + +Private enterprise is showing much interest in opening up aviation service +to Mexico and Central and South America. We are particularly solicitous to +have the United States take a leading part in this development. It is +understood that the governments of our sister countries would be willing to +cooperate. Their physical features, the undeveloped state of their +transportation, make an air service especially adaptable to their usage. +The Post Office Department should be granted power to make liberal +long-term contracts for carrying our mail, and authority should be given to +the Army and the Navy to detail aviators and planes to cooperate with +private enterprise in establishing such mail service with the consent of +the countries concerned. A committee of the Cabinet will later present a +report on this subject. + +GOOD ROADS + +The importance and benefit of good roads is more and more coming to be +appreciated. The National Government has been making liberal contributions +to encourage their construction. The results and benefits have been very +gratifying. National participation, however, should be confined to +trunk-line systems. The national tax on automobiles is now nearly +sufficient to meet this outlay. This tax is very small, and on low-priced +cars is not more than $2 or $3 each year. + +While the advantage of having good roads is very large, the desire for +improved highways is not limited to our own country. It should and does +include all the Western Hemisphere. The principal points in Canada are +already accessible. We ought to lend our encouragement in any way we can +for more good roads to all the principal points in this hemisphere south of +the Rio Grande. It has been our practice to supply these countries with +military and naval advisers, when they have requested it, to assist them in +national defense. The arts of peace are even more important to them and to +us. Authority should be given by law to provide them at their request with +engineering advisers for the construction of roads and bridges. In some of +these countries already wonderful progress is being made in road building, +but the engineering features are often very exacting and the financing +difficult. Private interests should look with favor on all reasonable loans +sought by these countries to open such main lines of travel. + +This general subject has been promoted by the Pan American Congress of +Highways, which will convene again at Rio de Janeiro in July, 1928. It is +desirable that the Congress should provide for the appointment of delegates +to represent the Government of the United States. + +CUBAN PARCEL POST + +We have a temporary parcel-post convention with Cuba. The advantage of it +is all on our side. During 1926 we shipped twelve times as many parcels, +weighing twenty-four times as much, as we received. This convention was +made on the understanding that we would repeal an old law prohibiting the +importation of cigars and cigarettes in quantities less than 3,000 enacted +in 1866 to discourage smuggling, for which it has long been unnecessary. +This law unjustly discriminates against an important industry of Cuba. Its +repeal has been recommended by the Treasury and Post Office Departments. +Unless this is done our merchants and railroads will find themselves +deprived of this large parcel-post business after the 1st of next March, +the date of the expiration of the convention, which has been extended upon +the specific understanding that it would expire at that time unless this +legislation was enacted. We purchase large quantities of tobacco made in +Cuba. It is not probable that our purchases would be any larger if this law +was repealed, while it would be an advantage to many other industries in +the United States. + +INSULAR POSSESSIONS + +Conditions in the Philippine Islands have been steadily improved. +Contentment and good order prevail. Roads, irrigation works, harbor +improvements, and public buildings are being constructed. Public education +and sanitation have been advanced. The Government is in a sound financial +condition. These immediate results were especially due to the +administration of Gov. Gen. Leonard Wood. The six years of his governorship +marked a distinct improvement in the islands and rank as one of the +outstanding accomplishments of this distinguished man. His death is a loss +to the Nation and the islands. + +Greater progress could be made, more efficiency could be put into +administration, if the Congress would undertake to expend, through its +appropriating power, all or a part of the customs revenues which are now +turned over to the Philippine treasury. The powers of the auditor of the +islands also need revision and clarification. The government of the islands +is about 98 per cent in the hands of the Filipinos. An extension of the +policy of self-government will be hastened by the demonstration on their +part of their desire and their ability to carry out cordially and +efficiently the provisions of the organic law enacted by the Congress for +the government of the islands. It would be well for a committee of the +Congress to visit the islands every two years. + +A fair degree of progress is being made in Porto Rico. Its agricultural +products are increasing; its treasury position, which has given much +concern, shows improvement. I am advised by the governor that educational +facilities are still lacking. Roads are being constructed, which he +represents are the first requisite for building schoolhouses. The loyalty +of the island to the United States is exceedingly gratifying. A memorial +will be presented to you requesting authority to have the governor elected +by the people of Porto Rico. This was never done in the case of our own +Territories. It is admitted that education outside of the towns is as yet +very deficient. Until it has progressed further the efficiency of the +government and the happiness of the people may need the guiding hand of an +appointed governor. As it is not contemplated that any change should be +made immediately, the general subject may well have the thoughtful study of +the Congress. + +PANAMA CANAL + +The number of commercial ships passing through the Panama Canal has +increased from 3,967 in 1923 to 5,475 in 1927. The total amount of tolls +turned into the Treasury is over $166,000,000, while all the operations of +the canal have yielded a surplus of about $80,000,000. In order to provide +additional storage of water and give some control over the floods of the +Chagres River, it is proposed to erect a dam to cost about $12,000,000 at +Alhajuela. It will take some five years to complete this work. + +AGRICULTURE + +The past year has seen a marked improvement in the general condition of +agriculture. Production is better balanced and without acute shortage or +heavy surplus. Costs have been reduced and the average output of the worker +increased. The level of farm prices has risen while others have fallen, so +that the purchasing power of the farmer is approaching a normal figure. The +individual farmer is entitled to great credit for the progress made since +1921. He has adjusted his production and through cooperative organizations +and other methods improved his marketing. He is using authenticated facts +and employing sound methods which other industries are obliged to use to +secure stability and prosperity. The old-fashioned haphazard system is +being abandoned, economics are being applied to ascertain the best adapted +unit of land, diversification is being promoted, and scientific methods are +being used in production, and business principles in marketing. + +Agriculture has not fully recovered from postwar depression. The fact is +that economic progress never marches forward in a straight line. It goes in +waves. One part goes ahead, while another halts and another recedes. +Everybody wishes agriculture to prosper. Any sound and workable proposal to +help the farmer will have the earnest support of the Government. Their +interests are not all identical. Legislation should assist as many +producers in as many regions as possible. It should be the aim to assist +the farmer to work out his own salvation socially and economically. No plan +will be of any permanent value to him which does not leave him standing on +his own foundation. + +In the past the Government has spent vast sums to bring land under +cultivation. It is apparent that this has reached temporarily the +saturation point. We have had a surplus of production and a poor market for +land, which has only lately shown signs of improvement. The main problem +which is presented for solution is one of dealing with a surplus of +production. It is useless to propose a temporary expedient. What is needed +is permanency and stability. Government price fixing is known to be unsound +and bound to result in disaster. A Government subsidy would work out in the +same way. It can not be sound for all of the people to hire some of the +people to produce a crop which neither the producers nor the rest of the +people want. + +Price fixing and subsidy will both increase the surplus, instead of +diminishing it. Putting the Government directly into business is merely a +combination of subsidy and price fixing aggravated by political pressure. +These expedients would lead logically to telling the farmer by law what and +how much he should plant and where he should plant it, and what and how +much he should sell and where he should sell it. The most effective means +of dealing with surplus crops is to reduce the surplus acreage. While this +can not be done by the individual farmer, it can be done through the +organizations already in existence, through the information published by +the Department of Agriculture, and especially through banks and others who +supply credit refusing to finance an acreage manifestly too large. + +It is impossible to provide by law for an assured success and prosperity +for all those who engage in farming. If acreage becomes overextended, the +Government can not assume responsibility for it. The Government can, +however, assist cooperative associations and other organizations in orderly +marketing and handling a surplus clearly due to weather and seasonal +conditions, in order to save the producer from preventable loss. While it +is probably impossible to secure this result at a single step, and much +will have to be worked out by trial and rejection, a beginning could be +made by setting up a Federal board or commission of able and experienced +men in marketing, granting equal advantages under this board to the various +agricultural commodities and sections of the country, giving encouragement +to the cooperative movement in agriculture, and providing a revolving loan +fund at a moderate rate of interest for the necessary financing. Such +legislation would lay the foundation for a permanent solution of the +surplus problem. + +This is not a proposal to lend more money to the farmer, who is already +fairly well financed, but to lend money temporarily to experimental +marketing associations which will no doubt ultimately be financed by the +regularly established banks, as were the temporary operations of the War +Finance Corporation. Cooperative marketing especially would be provided +with means of buying or building physical properties. + +The National Government has almost entirely relieved the farmer from income +taxes by successive tax reductions, but State and local taxes have +increased, putting on him a grievous burden. A policy of rigid economy +should be applied to State and local expenditures. This is clearly within +the legislative domain of the States. The Federal Government has also +improved our banking structure and system of agricultural credits. The +farmer will be greatly benefited by similar action in many States. The +Department of Agriculture is undergoing changes in organization in order +more completely to separate the research and regulatory divisions, that +each may be better administered. More emphasis is being placed on the +research program, not only by enlarging the appropriations for State +experiment stations but by providing funds for expanding the research work +of the department. It is in this direction that much future progress can be +expected. + +THE PROTECTIVE TARIFF + +The present tariff rates supply the National Treasury with well over +$600,000,000 of annual revenue. Yet, about 65 per cent of our imports come +in duty free. Of the remaining 35 per cent of imports on which duties are +laid about 23 per cent consists of luxuries and agricultural products, and +the balance of about 12 per cent, amounting, to around $560,000,000 is made +up of manufactures and merchandise. As no one is advocating any material +reduction in the rates on agriculture or luxuries, it is only the +comparatively small amount of about $560,000,000 of other imports that are +really considered in any discussion of reducing tariff rates. While this +amount, duty free, would be large enough seriously to depress many lines of +business in our own country, it is of small importance when spread over the +rest of the world. + +It is often stated that a reduction of tariff rates on industry would +benefit agriculture. It would be interesting to know to what commodities it +is thought this could be applied. Everything the farmer uses in farming is +already on the free list. Nearly everything he sells is protected. It would +seem to be obvious that it is better for the country to have the farmer +raise food to supply the domestic manufacturer than the foreign +manufacturer. In one case our country would have only the farmer; in the +other it would have the farmer and the manufacturer. Assuming that Europe +would have more money if it sold us larger amounts of merchandise, it is +not certain it would consume more food, or, if it did, that its purchases +would be made in this country. Undoubtedly it would resort to the cheapest +market, which is by no means ours. The largest and best and most profitable +market for the farmer in the world is our own domestic market. Any great +increase in manufactured imports means the closing of our own plants. +Nothing would be worse for agriculture. + +Probably no one expects a material reduction in the rates on manufactures +while maintaining the rates on agriculture. A material reduction in either +would be disastrous to the farmer. It would mean a general shrinkage of +values, a deflation of prices, a reduction of wages, a general depression +carrying our people down to the low standard of living in our competing +countries. It is obvious that this would not improve but destroy our market +for imports, which is best served by maintaining our present high +purchasing power under which in the past five years imports have increased +63 per cent. + +FARM LOAN SYSTEM + +It is exceedingly important that the Federal land and joint-stock land +banks should furnish the best possible service for agriculture. Certain +joint-stock banks have fallen into improper and unsound practices, +resulting in the indictment of the officials of three of them. More money +has been provided for examinations, and at the instance of the Treasury +rules and regulations of the Federal Farm Board have been revised. Early +last May three of its members resigned. Their places were filled with men +connected with the War Finance Corporation. Eugene Meyer being designated +as Farm Loan Commissioner. The new members have demonstrated their ability +in the field of agricultural finance in the extensive operations of he War +Finance Corporation. Three joint-stock banks have gone into receivership. +It is necessary to preserve the public confidence in this system in order +to find a market for their bonds. A recent flotation was made at a record +low rate of 4 per cent. Careful supervision is absolutely necessary to +protect the investor and enable these banks to exercise their chief +function in serving agriculture. + +MUSCLE SHOALS + +The last year has seen considerable changes in the problem of Muscle +Shoals. Development of other methods show that nitrates can probably be +produced at less cost than by the use of hydroelectric power. Extensive +investigation made by the Department of War indicates that the nitrate +plants on this project are of little value for national defense and can +probably be disposed of within two years. The oxidation part of the plants, +however, should be retained indefinitely. This leaves this project mostly +concerned with power. It should, nevertheless, continue to be dedicated to +agriculture. It is probable that this desire can be best served by +disposing of the plant and applying the revenues received from it to +research for methods of more economical production of concentrated +fertilizer and to demonstrations and other methods of stimulating its use +on the farm. But in disposing of the property preference should be given to +proposals to use all or part of it for nitrate production and fertilizer +manufacturing. + +FLOOD CONTROL + +For many years the Federal Government has been building a system of dikes +along the Mississippi River for protection against high water. During the +past season the lower States were overcome by a most disastrous flood. Many +thousands of square miles were inundated a great many lives were lost, much +livestock was drowned, and a very heavy destruction of property was +inflicted upon the inhabitants. The American Red Cross at once went to the +relief of the stricken communities. Appeals for contributions have brought +in over $17,000,000. The Federal Government has provided services, +equipment, and supplies probably amounting to about $7,000,000 more. +Between $5,000,000 and $10,000,000 in addition have been provided by local +railroads, the States, and their political units. Credits have been +arranged by the Farm Loan Board, and three emergency finance corporations +with a total capital of $3,000,000 have insured additional resources to the +extent of $12,000,000. Through these means the 700,000 people in the +flooded areas have been adequately supported. Provision has been made to +care for those in need until after the 1st of January. + +The Engineering Corps of the Army has contracted to close all breaks in the +dike system before the next season of high water. A most thorough and +elaborate survey of the whole situation has been made and embodied in a +report with recommendations for future flood control, which will be +presented to the Congress. The carrying out of their plans will necessarily +extend over a series of years. They will call for a raising and +strengthening of the dike system with provision for emergency spillway's +and improvements for the benefit of navigation. + +Under the present law the land adjacent to the dikes has paid one-third of +the cost of their construction. This has been a most extraordinary +concession from the plan adopted in relation to irrigation, where the +general rule has been that the land benefited should bear the entire +expense. It is true, of course, that the troublesome waters do not +originate on the land to be reclaimed, but it is also true that such waters +have a right of way through that section of the country and the land there +is charged with that easement. It is the land of this region that is to be +benefited. To say that it is unable to bear any expense of reclamation is +the same thing as saying that it is not worth reclaiming. Because of +expenses incurred and charges already held against this land, it seems +probable that some revision will have to be made concerning the proportion +of cost which it should bear. But it is extremely important that it should +pay enough so that those requesting improvements will be charged with some +responsibility for their cost, and the neighborhood where works are +constructed have a pecuniary interest in preventing waste and extravagance +and securing a wise and economical expenditure of public funds. + +It is necessary to look upon this emergency as a national disaster. It has +been so treated from its inception. Our whole people have provided with +great generosity for its relief. Most of the departments of the Federal +Government have been engaged in the same effort. The governments of the +afflicted areas, both State and municipal, can not be given too high praise +for the courageous and helpful way in which they have come to the rescue of +the people. If the sources directly chargeable can not meet the demand, the +National Government should not fail to provide generous relief. This, +however, does not mean restoration. The Government is not an insurer of its +citizens against the hazard of the elements. We shall always have flood and +drought, heat and cold, earthquake and wind, lightning and tidal wave, +which are all too constant in their afflictions. The Government does not +undertake to reimburse its citizens for loss and damage incurred under such +circumstances. It is chargeable, however, with the rebuilding of public +works and the humanitarian duty of relieving its citizens from distress. + +The people in the flooded area and their representatives have approached +this problem in the most generous and broad-minded way. They should be met +with a like spirit on the part of the National government. This is all one +country. The public needs of each part must be provided for by the public +at large. No required relief should be refused. An adequate plan should be +adopted to prevent a recurrence of this disaster in order that the people +may restore to productivity and comfort their fields and their towns. + +Legislation by this Congress should be confined to our principal and most +pressing problem, the lower Mississippi, considering tributaries only so +far as they materially affect the main flood problem. A definite Federal +program relating to our waterways was proposed when the last Congress +authorized a comprehensive survey of all the important streams of the +country in order to provide for their improvement, including flood control, +navigation, power, and irrigation. Other legislation should wait pending a +report on this survey. The recognized needs of the Mississippi should not +be made a vehicle for carrying other projects. All proposals for +development should stand on their own merits. Any other method would result +in ill-advised conclusions, great waste of money, and instead of promoting +would delay the orderly and certain utilization of our water resources. + +Very recently several of the New England States have suffered somewhat +similarly from heavy rainfall and high water. No reliable estimate of +damage has yet been computed, but it is very large to private and public +property. The Red Cross is generously undertaking what is needed for +immediate relief, repair and reconstruction of houses, restocking of +domestic animals, and food, clothing, and shelter. A considerable sum of +money will be available through the regular channels in the Department of +Agriculture for reconstruction of highways. It may be necessary to grant +special aid for this purpose. Complete reports of what is required will +undoubtedly be available early in the session. + +INLAND NAVIGATION + +The Congress in its last session authorized the general improvements +necessary to provide the Mississippi waterway system with better +transportation. Stabilization of the levels of the Great Lakes and their +opening to the sea by an effective shipway remain to be considered. Since +the last session the Board of Engineers of the War Department has made a +report on the proposal for a canal through the State of New York, and the +Joint Board of Engineers, representing Canada and the United States, has +finished a report on the St. Lawrence River. Both of these boards conclude +that the St. Lawrence project is cheaper, affords a more expeditious method +of placing western products in European markets, and will cost less to +operate. The State Department has requested the Canadian Government to +negotiate treaties necessary to provide for this improvement. It will also +be necessary to secure an agreement with Canada to put in works necessary +to prevent fluctuation in the levels of the Great Lakes. + +Legislation is desirable for the construction of a dam at Boulder Canyon on +the Colorado River, primarily as a method of flood control and irrigation. +A secondary result would be a considerable power development and a source +of domestic water supply for southern California. Flood control is clearly +a national problem, and water supply is a Government problem, but every +other possibility should be exhausted before the Federal Government becomes +engaged in the power business. The States which are interested ought to +reach mutual agreement. This project is in reality their work. If they wish +the Federal Government to undertake it, they should not hesitate to make +the necessary concessions to each other. This subject is fully discussed in +the annual report of the Secretary of the Interior. The Columbia River +Basin project is being studied and will be one to be considered at some +future time. + +The Inland Waterways Corporation is proving successful and especially +beneficial to agriculture. A survey is being made to determine its future +needs. It has never been contemplated that if inland rivers were opened to +navigation it would then be necessary for the Federal Government to provide +the navigation. Such a request is very nearly the equivalent of a +declaration that their navigation is not profitable, that the commodities +which they are to carry can be taken at a cheaper rate by some other +method, in which case the hundreds of millions of dollars proposed to be +expended for opening rivers to navigation would be not only wasted, but +would entail further constant expenditures to carry the commodities of +private persons for less than cost. + +The policy is well established that the Government should open public +highways on land and on water, but for use of the public in their private +capacity. It has put on some demonstration barge lines, but always with the +expectation that if they prove profitable they would pass into private +hands and if they do not prove profitable they will be withdrawn. The +problems of transportation over inland waterways should be taken up by +private enterprise, so that the public will have the advantage of +competition in service. It is expected that some of our lines can be sold, +some more demonstration work done, and that with the completion of the Ohio +project a policy of private operation can be fully developed. + +PROHIBITION + +After more than two generations of constant debate, our country adopted a +system of national prohibition under all the solemnities involved in an +amendment to the Federal Constitution. In obedience to this mandate the +Congress and the States, with one or two notable exceptions, have passed +required laws for its administration and enforcement. This imposes upon the +citizenship of the country, and especially on all public officers, not only +the duty to enforce, but the obligation to observe the sanctions of this +constitutional provision and its resulting laws. If this condition could be +secured, all question concerning prohibition would cease. The Federal +Government is making every effort to accomplish these results through +careful organization, large appropriations, and administrative effort. +Smuggling has been greatly cut down, the larger sources of supply for +illegal sale have been checked, and by means of injunction and criminal +prosecution the process of enforcement is being applied. The same vigilance +on the part of local governments would render these efforts much more +successful. The Federal authorities propose to discharge their obligation +for enforcement to the full extent of their ability. + +THE NEGRO + +History does not anywhere record so much progress made in the same length +of time as that which has been accomplished by the Negro race in the United +States since the Emancipation Proclamation. They have come up from slavery +to be prominent in education, the professions, art, science, agriculture, +banking, and commerce. It is estimated that 50,000 of them are on the +Government pay rolls, drawing about $50,000,000 each year. They have been +the recipients of presidential appointments and their professional ability +has arisen to a sufficiently high plane so that they have been intrusted +with the entire management and control of the great veterans hospital at +Tuskegee, where their conduct has taken high rank. They have shown that +they have been worthy of all the encouragement which they have received. +Nevertheless, they are too often subjected to thoughtless and inconsiderate +treatment, unworthy alike of the white or colored races. They have +especially been made the target of the foul crime of lynching. For several +years these acts of unlawful violence had been diminishing. In the last +year they have shown an increase. Every principle of order and law and +liberty is opposed to this crime. The Congress should enact any legislation +it can under the Constitution to provide for its elimination. + +AMERICAN INDIAN + +The condition of the American Indian has much improved in recent years. +Full citizenship was bestowed upon them on June 2, 1924, and appropriations +for their care and advancement have been increased. Still there remains +much to be done. + +Notable increases in appropriations for the several major functions +performed by the Department of the Interior on behalf of the Indians have +marked the last five years. In that time, successive annual increases in +appropriations for their education total $1,804,325; for medical care, +$578,000; and for industrial advancement, $205,000; or $2,582,325 more than +would have been spent in the same period on the basis of appropriations for +1923 and the preceding years. + +The needs along health, educational, industrial and social lines however, +are great, and the Budget estimates for 1929 include still further +increases for Indian administration. + +To advance the time when the Indians may become self-sustaining, it is my +belief that the Federal Government should continue to improve the +facilities for their care, and as rapidly as possible turn its +responsibility over to the States. + +COAL + +Legislation authorizing a system of fuel administration and the appointment +by the President of a Board of Mediation and Conciliation in case of actual +or threatened interruption of production is needed. The miners themselves +are now seeking information and action from the Government, which could +readily be secured through such a board. It is believed that a thorough +investigation and reconsideration of this proposed policy by the Congress +will demonstrate that this recommendation is sound and should be adopted. + +PETROLEUM CONSERVATION + +The National Government is undertaking to join in the formation of a +cooperative committee of lawyers, engineers, and public officers, to +consider what legislation by the States or by the Congress can be adopted +for the preservation and conservation of our supply of petroleum. This has +come to be one of the main dependencies for transportation and power so +necessary to our agricultural and industrial life. It is expected the +report of this committee will be available for later congressional action. +Meantime, the requirement that the Secretary of the Interior should make +certain leases of land belonging to the Osage Indians, in accordance with +the act of March 3, 1921, should be repealed. The authority to lease should +be discretionary, in order that the property of the Indians way not be +wasted and the public suffer a future lack of supply. + +ALIEN PROPERTY + +Under treaty the property held by the Alien Property Custodian was to be +retained until suitable provision had been made for the satisfaction of +American claims. While still protecting the American claimants, in order to +afford every possible accommodation to the nationals of the countries whose +property was held, the Congress has made liberal provision for the return +of a larger part of the property. All trusts under $10,000 were returned in +full, and partial returns were made on the others. The total returned was +approximately $350,000,000. + +There is still retained, however, about $250,000,000. The Mixed Claims +Commission has made such progress in the adjudication of claims that +legislation can now be enacted providing for the return of the property, +which should be done under conditions which will protect our Government and +our claimants. Such a measure will be proposed, and I recommend its +enactment. + +RAILROAD CONSOLIDATION + +In order to increase the efficiency of transportation and decrease its cost +to the shipper, railroad consolidation must be secured. Legislation is +needed to simplify the necessary procedure to secure such agreements and +arrangements for consolidation, always under the control and with the +approval of the Interstate Commerce Commission. Pending this, no adequate +or permanent reorganization can be made of the freight-rate structure. +Meantime, both agriculture and industry are compelled to wait for needed +relief. This is purely a business question, which should be stripped of all +local and partisan bias and decided on broad principles and its merits in +order to promote the public welfare. A large amount of new construction and +equipment, which will furnish employment for labor and markets for +commodities of both factory and farm, wait on the decision of this +important question. Delay is holding back the progress of our country. + +Many of the same arguments are applicable to the consolidation of the +Washington traction companies. + +VETERANS + +The care which this country has lavished on its veterans is known of all +men. The yearly outlay for this purpose is about $750,000,000, or about the +cost of running the Federal Government, outside of the Post Office +Department, before the World War. The Congress will have before it +recommendations of the American Legion, the Veterans of Foreign Wars, and +other like organizations, which should receive candid consideration. We +should continue to foster our system of compensation and rehabilitation, +and provide hospitals and insurance. The magnitude of the undertaking is +already so large that all requests calling for further expenditure should +have the most searching scrutiny. Our present system of pensions is already +sufficiently liberal. It was increased by the last Congress for Civil and +Spanish War veterans and widows and for some dependents. + +It has been suggested that the various governmental agencies now dealing +with veterans' relief be consolidated. This would bring many advantages. It +is recommended that the proper committees of the Congress make a thorough +survey of this subject, in order to determine if legislation to secure such +consolidation is desirable. + +EDUCATION + +For many years it has been the policy of the Federal Government to +encourage and foster the cause of education. Large sums of money are +annually appropriated to carry on vocational training. Many millions go +into agricultural schools. The general subject is under the immediate +direction of a Commissioner of Education. While this subject is strictly a +State and local function, it should continue to have the encouragement of +the National Government. I am still of the opinion that much good could be +accomplished through the establishment of a Department of Education and +Relief, into which would be gathered all of these functions under one +directing member of the Cabinet. + +DEPARTMENT OF LABOR + +Industrial relations have never been more peaceful. In recent months they +have suffered from only one serious controversy. In all others difficulties +have been adjusted, both management and labor wishing to settle +controversies by friendly agreement rather than by compulsion. The welfare +of women and children is being especially guarded by our Department of +Labor. Its Children's Bureau is in cooperation with 26 State boards and 80 +juvenile courts. + +Through its Bureau of Immigration it has been found that medical +examination abroad has saved prospective immigrants from much hardship. +Some further legislation to provide for reuniting families when either the +husband or the wife is in this country, and granting more freedom for the +migration of the North American Indian tribes is desirable. + +The United States Employment Service has enabled about 2,000,000 men and +women to gain paying positions in the last fiscal year. Particular +attention has been given to assisting men past middle life and in providing +field labor for harvesting agricultural crops. This has been made possible +in part through the service of the Federal Board for Vocational Education, +which is cooperating with the States in a program to increase the technical +knowledge and skill of the wage earner. + +PUBLIC BUILDINGS + +Construction is under way in the country and ground has been broken for +carrying out a public-building program for Washington. We have reached a +time when not only the conveniences but the architectural beauty of the +public buildings of the Capital City should be given much attention. It +will be necessary to purchase further land and provide the required +continuing appropriations. + +HISTORICAL CELEBRATIONS + +Provision is being made to commemorate the two hundredth anniversary of the +birth of George Washington. Suggestion has been made for the construction +of a memorial road leading from the Capital to Mount Vernon, which may well +have the consideration of the Congress, and the commission intrusted with +preparations for the celebration will undoubtedly recommend publication of +the complete writings of Washington and a series of writings by different +authors relating to him. + +February 25, 1929. is the one hundred and fiftieth anniversary of the +capture of Fort Sackville, at Vincennes, in the State of Indiana. This +eventually brought into the Union what was known as the Northwest +Territory, embracing the region north of the Ohio River between the +Alleghenies and the Mississippi River. This expedition was led by George +Rogers Clark. His heroic character and the importance of his victory are +too little known and understood. They gave us not only this Northwest +Territory but by means of that the prospect of reaching the Pacific. The +State of Indiana is proposing to dedicate the site of Fort Sackville as a +national shrine. The Federal Government may well make some provision for +the erection under its own management of a fitting memorial at that point. + +FOREIGN RELATIONS + +It is the policy of the United States to promote peace. We are a peaceful +people and committed to the settling of disputes by amicable adjustment +rather than by force. We have believed that peace can best be secured by a +faithful observance on our part of the principles of international law, +accompanied by patience and conciliation, and requiring of others a like +treatment for ourselves. We have lately had some difference with Mexico +relative to the injuries inflicted upon our nationals and their property +within that country. A firm adherence to our rights and a scrupulous +respect for the sovereignty of Mexico, both in accordance with the law of +nations, coupled with patience and forbearance, it is hoped will resolve +all our differences without interfering with the friendly relationship +between the two Governments. + +We have been compelled to send naval and marine forces to China to protect +the lives and property of our citizens. Fortunately their simple presence +there has been sufficient to prevent any material loss of life. But there +has been considerable loss of property. That unhappy country is torn by +factions and revolutions which bid fair to last for an indefinite period. +Meanwhile we are protecting our citizens and stand ready to cooperate with +any government which may emerge in promoting the welfare of the people of +China. They have always had our friendship, and they should especially +merit our consideration in these days of their distraction and distress. + +We were confronted by similar condition on a small scale in Nicaragua. Our +marine and naval forces protected our citizens and their property and +prevented a heavy sacrifice of life and the destruction of that country by +a reversion to a state of revolution. Henry L. Stimson, former Secretary of +War, was sent there to cooperate with our diplomatic and military officers +in effecting a settlement between the contending parties. This was done on +the assurance that we would cooperate in restoring a state of peace where +our rights would be protected by giving our assistance in the conduct of +the next presidential election, which occurs in a few months. With this +assurance the population returned to their peacetime pursuits, with the +exception of some small roving bands of outlaws. + +In general, our relations with other countries can be said to have improved +within the year. While having a due regard for our own affairs, the +protection of our own rights, and the advancement of our own people, we can +afford to be liberal toward others. Our example has become of great +importance in the world. It is recognized that we are independent, +detached, and can and do take a disinterested position in relation to +international affairs. Our charity embraces the earth. Our trade is far +flung. Our financial favors are widespread. Those who are peaceful and +law-abiding realize that not only have they nothing to fear from us, but +that they can rely on our moral support. Proposals for promoting the peace +of the world will have careful consideration. But we are not a people who +are always seeking for a sign. We know that peace comes from honesty and +fair dealing, from moderation, and a generous regard for the rights of +others. The heart of the Nation is more important than treaties. A spirit +of generous consideration is a more certain defense than great armaments. +We should continue to promote peace by our example, and fortify it by such +international covenants against war as we are permitted under our +Constitution to make. + +AMERICAN PROGRESS + +Our country has made much progress. But it has taken, and will continue to +take, much effort. Competition will be keen, the temptation to selfishness +and arrogance will be severe, the provocations to deal harshly with weaker +peoples will be many. All of these are embraced in the opportunity for true +greatness. They will be overbalanced by cooperation by generosity, and a +spirit of neighborly kindness. The forces of the universe are taking +humanity in that direction. In doing good, in walking humbly, in sustaining +its own people in ministering to other nations, America will work out its +own mighty destiny. + +*** + +State of the Union Address +Calvin Coolidge +December 4, 1928 + +To the Congress of the United States: + +No Congress of the United States ever assembled, on surveying the state of +the Union, has met with a more pleasing prospect than that which appears at +the present time. In the domestic field there is tranquility and +contentment, harmonious relations between management and wage earner, +freedom from industrial strife, and the highest record of years of +prosperity. In the foreign field there is peace, the good will which comes +from mutual understanding, and the knowledge that the problems which a +short time ago appeared so ominous are yielding to the touch of manifest +friendship. The great wealth created by our enterprise and industry, and +saved by our economy, has had the widest distribution among our own people, +and has gone out in a steady stream to serve the charity and the business +of the world. The requirements of existence have passed beyond the standard +of necessity into the region of luxury. Enlarging production is consumed by +an increasing demand at home and an expanding commerce abroad. The country +can regard the present with satisfaction and anticipate the future with +optimism. + +The main source of these unexampled blessings lies in the integrity and +character of the American people. They have had great faith, which they +have supplemented with mighty works. They have been able to put trust in +each other and trust in their Government. Their candor in dealing with +foreign governments has commanded respect and confidence. Yet these +remarkable powers would have been exerted almost in vain without the +constant cooperation and careful administration of the Federal Government. + +We have been coming into a period which may be fairly characterized as a +conservation of our national resources. Wastefulness in public business and +private enterprise has been displaced by constructive economy. This has +been accomplished by bringing our domestic and foreign relations more and +more under a reign of law. A rule of force has been giving way to a rule of +reason. We have substituted for the vicious circle of increasing +expenditures, increasing tax rates, and diminishing profits the charmed +circle of diminishing expenditures, diminishing tax rates, and increasing +profits. + +Four times we have made a drastic revision of our internal revenue system, +abolishing many taxes and substantially reducing almost all others. Each +time the resulting stimulation to business has so increased taxable incomes +and profits that a surplus has been reduced. One-third of the national +debt has been paid, while much of the other two-thirds has been refunded at +lower rates, and these savings of interest and constant economies have +enabled us to repeat the satisfying process of more tax reductions. Under +this sound and healthful encouragement the national income has increased +nearly 50 per cent, until it is estimated to stand well over +$90,000,000,000. It gas been a method which has performed the seeming +miracle of leaving a much greater percentage of earnings in the hands of +the taxpayers with scarcely any diminution of the Government revenue. That +is constructive economy in the highest degree. It is the corner stone of +prosperity. It should not fail to be continued. + +This action began by the application of economy to public expenditure. If +it is to be permanent, it must be made so by the repeated application of +economy. There is no surplus on which to base further tax revision at this +time. Last June the estimates showed a threatened deficit for the current +fiscal year of $94,000,000. Under my direction the departments began saving +all they could out of their present appropriations. The last tax reduction +brought an encouraging improvement in business, beginning early in +October, which will also increase our revenue. The combination of economy +and good times now indicates a surplus of about $37,000,000. This is a +margin of less than I percent on out, expenditures and makes it obvious +that the Treasury is in no condition to undertake increases in expenditures +to be made before June 30. It is necessary therefore during the present +session to refrain from new appropriations for immediate outlay, or if such +are absolutely required to provide for them by new revenue; otherwise, we +shall reach the end of the year with the unthinkable result of an unbalanced +budget. For the first time during my term of office we face that +contingency. I am certain that the Congress would not pass and I should not +feel warranted in approving legislation which would involve us in that +financial disgrace. + +On the whole the finances of the Government are most satisfactory. Last +year the national debt was reduced about $906,000,000. The refunding and +retirement of the second and third Liberty loans have just been brought to +a successful conclusion, which will save about $75,000,000 a year in +interest. The unpaid balance has been arranged in maturities convenient +for carrying out our permanent debt-paying Program. + +The enormous savings made have not been at the expense of any legitimate +public need. The Government plant has been kept up and many improvements +are tinder way, while its service is fully manned and the general +efficiency of operation has increased. We have been enabled to undertake +many new enterprises. Among these are the adjusted compensation of the +veterans of the World War, which is costing us $112,000,000 a year; +amortizing our liability to the civil service retirement funds, +$20,000,000; increase of expenditures for rivers and harbors including +flood control, $43,000,000; public buildings, $47,000,000. In 1928 we spent +$50,000,000 in the adjustment of war claims and alien property. These are +examples of a large list of items. + +FOREIGN RELATIONS + +When we turn from our domestic affairs to our foreign relations, we +likewise perceive peace and progress. The Sixth International Conference of +American States was held at Habana last winter. It contributed to a better +understanding and cooperation among the nations'. Eleven important +conventions were signed and 71 resolutions passed. Pursuant to the plan +then adopted, this Government has invited the other 20 nations of this +hemisphere to it conference on conciliation and arbitration, which meets in +Washington on December 10. All the nations have accepted and the +expectation is justified that important progress will be made in methods +for resolving international differences by means of arbitration. + +During the year we have signed 11 new arbitration treaties, and 22 more are +tinder negotiation. + +NICARAGUA + +When a destructive and bloody revolution lately broke out in Nicaragua, at +the earnest and repeated entreaties of its Government I dispatched our +Marine forces there to protect the lives and interests of our citizens. To +compose the contending parties, I sent there Col. Henry L. Stimson, former +Secretary of War and now Governor General of the Philippine Islands, who +secured an agreement that warfare should cease, a national election should +be held and peace should be restored. Both parties conscientiously carried +out this agreement, with the exception of a few bandits who later mostly +surrendered or left the country. President Diaz appointed Brig. Gen. Frank +R. McCoy, United States Army, president of the election board, which +included also one member of each political party. + +A free and fair election has been held and has worked out so successfully +that both parties have joined in requesting like cooperation from this +country at the election four years hence, to which I have refrained from +making any commitments, although our country must be gratified at such an +exhibition of success and appreciation. + +Nicaragua is regaining its prosperity and has taken a long step in the +direction of peaceful self-government. + +TACNA-ARICA + +The long-standing differences between Chile and Peru have been sufficiently +composed so that diplomatic relations have been resumed by the exchange of +ambassadors. Negotiations are hopefully proceeding as this is written for +the final adjustment of the differences over their disputed territory. + +MEXICO + +Our relations with Mexico are on a more satisfactory basis than at any time +since their revolution. Many misunderstandings have been resolved and the +most frank and friendly negotiations promise a final adjustment of all +unsettled questions. It is exceedingly gratifying that Ambassador Morrow +has been able to bring our two neighboring countries, which have so many +interests in common, to a position of confidence in each other and of +respect for mutual sovereign rights. + +CHINA + +The situation in China which a few months ago was so threatening as to call +for the dispatch of a large additional force has, been much composed. The +Nationalist Government has established itself over the country and +promulgated a new organic law announcing a program intended to promote the +political and economic welfare of the people. We have recognized this +Government, encouraged its progress, and have negotiated a treaty +restoring to China complete tariff autonomy and guaranteeing our citizens +against discriminations. Our trade in that quarter is increasing and our +forces are being reduced. + +GREEK AND AUSTRIAN DEBTS + +Pending before the Congress is a recommendation for the settlement of the +Greek debt and the Austrian debt. Both of these are comparatively small and +our country can afford to be generous. The rehabilitation of these +countries awaits their settlement. There would also be advantages to our +trade. We could scarcely afford to be the only nation that refuses the +relief which Austria seeks. The Congress has already granted Austria a +long-time moratorium, which it is understood will be waived and immediate +payments begun on her debt on the same basis which we have extended to +other countries. + +PEACE TREATY + +One of the most important treaties ever laid before the Senate of the +United States will be that which the 15 nations recently signed at Paris, +and to which 44 other nations have declared their intention to adhere, +renouncing war as a national policy and agreeing to resort only to peaceful +means for the adjustment of international differences. It is the most +solemn declaration against war, the most positive adherence to peace, that +it is possible for sovereign nations to make. It does not supersede our +inalienable sovereign right and duty of national defense or undertake to +commit us before the event to any mode of action which the Congress might +decide to be wise if ever the treaty should be broken. But it is a new +standard in the world around which can rally the informed and enlightened +opinion of nations to prevent their governments from being forced into +hostile action by the temporary outbreak of international animosities. The +observance of this covenant, so simple and so straightforward, promises more +for the peace of the world than any other agreement ever negotiated among +the nations. + +NATIONAL DEFENSE + +The first duty of our Government to its own citizens and foreigners within +its borders is the preservation of order. Unless and until that duty is met +a government is not even eligible for recognition among the family of +nations. The advancement of world civilization likewise is dependent upon +that order among the people of different countries which we term peace. To +insure our citizens against the infringement of their legal rights at home +and abroad, to preserve order, liberty, and peace by making the law +supreme, we have an Army and a Navy. + +Both of these are organized for defensive purposes. Our Army could not be +much reduced, but does not need to be increased. Such new housing and +repairs as are necessary are tinder way and the 6-year program in aviation +is being put into effect in both branches of our service. + +Our Navy, according to generally accepted standards, is deficient in +cruisers. We have 10 comparatively new vessels, 22 that are old, and 8 to +be built. It is evident that renewals and replacements must be provided. +This matter was thoroughly canvassed at the last session of the Congress +and does not need restatement. The bill before the Senate with the +elimination of the time clause should be passed. We have no intention of +competing with any other country. This building program is for necessary +replacements and to meet our needs for defense. + +The cost of national defense is stupendous. It has increased $118,000,000 +in the past four years. The estimated expenditure for 1930 is $668,000,000. +While this is made up of many items it is, after all, mostly dependent upon +numbers. Our defensive needs do not can for any increase in the number of +men in the Army or the Navy. We have reached the limit of what we ought to +expend for that purpose. + +I wish to repeat again for the benefit of the timid and the suspicious that +this country is neither militaristic nor imperialistic. Many people at home +and abroad, who constantly make this charge, are the same ones who are even +more solicitous to have us extend assistance to foreign countries. When +such assistance is granted, the inevitable result is that we have foreign +interests. For us to refuse the customary support and protection of such +interests would be in derogation of the sovereignty of this Nation. Our +largest foreign interests are in the British Empire, France, and Italy. +Because we are constantly solicitous for those interests, I doubt if anyone +would suppose that those countries feel we harbor toward them any +militaristic or imperialistic design. As for smaller countries, we +certainly do not want any of them. We are more anxious than they are to have +their sovereignty respected. Our entire influence is in behalf of their +independence. Cuba stands as a witness to our adherence to this principle. + +The position of this Government relative to the limitation of armaments, +the results already secured, and the developments up to the present time +are so well known to the Congress that they do not require any restatement. + +VETERANS + +The magnitude of our present system of veterans' relief is without +precedent, and the results have been far-reaching. For years a service +pension has been granted to the Grand Army and lately to the survivors of +the Spanish-American War. At the time we entered the World War however, +Congress departed from the usual pension system followed by our +Government. Eleven years have elapsed since our laws were first enacted, +initiating a system of compensation, rehabilitation, hospitalization, and +insurance for the disabled of the World War and their dependents. The +administration of all the laws concerning relief has been a difficult +task, but it can safely be stated that these measures have omitted nothing +in their desire to deal generously and humanely. We should continue to +foster this system and provide all the facilities necessary for adequate +care. It is the conception of our Government that the pension roll is an +honor roll. It should include all those who are justly entitled to its +benefits, but exclude all others. + +Annual expenditures for all forms of veterans' relief now approximate +$765,000,000, and are increasing from year to year. It is doubtful if the +peak of expenditures will be reached even under present legislation for +sonic time yet to come. Further amendments to the existing law will be +suggested by the American Legion, the Veterans of Foreign Wars of the +United States, the Disabled American Veterans of the World War, and other +like organizations, and it may be necessary for administrative purposes, or +in order to remove some existing inequalities in the present law, to make +further changes. I am sure that such recommendations its may be submitted +to the Congress will receive your careful consideration. But because of the +vast expenditure now being made, each year, with every assurance that it +will increase, and because of the great liberality of the existing law, the +proposal of any additional legislation dealing with this subject should +receive most searching scrutiny from the Congress. + +You are familiar with the suggestion that the various public agencies now +dealing with matters of veterans' relief be consolidated in one Government +department. Some advantages to this plan seem apparent, especially in the +simplification of administration find in the opportunity of bringing about +a greater uniformity in the application of veterans' relief. I recommend +that a survey be made by the proper committees of Congress dealing with +this subject, in order to determine whether legislation to secure this +consolidation is desirable. + +AGRICULTURE + +The past year has been marked by notable though not uniform improvement in +agriculture. The general purchasing power of farm products and the volume +of production have advanced. This means not only further progress, in +overcoming the price disparity into which agriculture was plunged in +1920-21, but also increased efficiency on the part of farmers and a +well-grounded confidence in the future of agriculture. + +The livestock industry has attained the best balance for many years and is +prospering conspicuously. Dairymen, beef producers, and poultrymen are +receiving substantially larger returns than last year. Cotton, although +lower in price than at this time last year, was produced in greater volume +and the prospect for cotton incomes is favorable. But progress is never +uniform in a vast and highly diversified agriculture or industry. Cash +grains, hay, tobacco, and potatoes will bring somewhat smaller returns this +year than last. Present indications are, however, that the gross farm +income will be somewhat larger than in the crop year 1927-28, when the +total was $12,253,000,000. The corresponding figure for 1926-27 was +$12,127,000,000, and in 1925-26, $12,670,000,000. Still better results +would have been secured this year had there not been an undue increase in +the production of certain crops. This is particularly true of potatoes, +which have sold at an unremunerative price, or at a loss, as a direct +result of overexpansion of acreage. + +The present status of agriculture, although greatly improved over that of a +few years ago, bespeaks the need of further improvement which calls for +determined effort of farmers themselves, encouraged and assisted by wise +public policy. The Government has been, and must continue to be, alive to +the needs of agriculture. + +In the past eight years more constructive legislation of direct benefit to +agriculture has been adopted than during any other period. The Department +of Agriculture has been broadened and reorganized to insure greater +efficiency. The department is laying greater stress on the economic and +business phases of agriculture. It is lending every possible assistance to +cooperative marketing associations. Regulatory and research work have been +segregated in order that each field may be served more effectively. + +I can not too strongly commend, in the field of fact finding, the research +work of the Department of Agriculture and the State experiment stations. +The department now receives annually $4,000,000 more for research than in +1921. In addition, the funds paid to the States for experimentation +purposes under the Purnell Act constitute an annual increase in Federal +payments to State agricultural experiment stations of $2,400,000 over the +amount appropriated in 1921. The program of support for research may wisely +be continued and expanded. Since 1921 we have appropriated nearly an +additional $2,000,000 for extension work, and this sum is to be increased +next year under authorization by the Capper-Ketcham Act. + +THE SURPLUS PROBLEM + +While these developments in fundamental research, regulation, and +dissemination of agricultural information are of distinct help to +agriculture, additional effort is needed. The surplus problem demands +attention. As emphasized in my last message, the Government should assume +no responsibility in normal times for crop surplus clearly due to +overextended acreage. The Government should, however, provide reliable +information as a guide to private effort; and in this connection fundamental +research on prospective supply and demand, as a guide to production and +marketing, should be encouraged. Expenditure of public funds to bring in +more new land should have most searching scrutiny, so long as our farmers +face unsatisfactory prices for crops and livestock produced on land already +under cultivation. + +Every proper effort should be made to put land to uses for which it is +adapted. The reforestation of land best suited for timber production is +progressing and should be encouraged, and to this end the forest taxation +inquiry was instituted to afford a practical guide for public policy. +Improvement has been made in grazing regulation in the forest reserves, not +only to protect the ranges, but to preserve the soil from erosion. Similar +action is urgently needed to protect other public lands which are now +overgrazed and rapidly eroding. + +Temporary expedients, though sometimes capable of appeasing the demands of +the moment, can not permanently solve the surplus problem and might +seriously aggravate it. Hence putting the Government directly into +business, subsidies, and price fixing, and the alluring promises of +political action as a substitute for private initiative, should be +avoided. + +The Government should aid in promoting orderly marketing and in handling +surpluses clearly due to weather and seasonal conditions. As a beginning +there should be created a Federal farm board consisting of able and +experienced men empowered to advise producers' associations in establishing +central agencies or stabilization corporations to handle surpluses, to seek +wore economical means of merchandising, and to aid the producer in securing +returns according to the a14 of his product. A revolving loan fund should +be provided for the necessary financing until these agencies shall have +developed means of financing their operations through regularly constituted +credit institutions. Such a bill should carry authority for raising the +money, by loans or otherwise, necessary to meet the expense, as the +Treasury has no surplus. + +Agriculture has lagged behind industry in achieving that unity of effort +which modern economic life demands. The cooperative movement, which is +gradually building the needed organization, is in harmony with public +interest and therefore merits public encouragement. + +THE RESPONSIBILITY OF THE STATES + +Important phases of public policy related to agriculture lie within the +sphere of the States. While successive reductions in Federal taxes have +relieved most farmers of direct taxes to the National Government, State and +local levies have become a serious burden. This problem needs immediate and +thorough study with a view to correction at the earliest possible moment. +It will have to be made largely by the States themselves. + +COMMERCE + +It is desirable that the Government continue its helpful attitude toward +American business. The activities of the Department of Commerce have +contributed largely to the present satisfactory position +in our international trade, which has reached about $9,000,000,000 +annually. There should be no slackening of effort in that direction. It is +also important that the department's assistance to domestic commerce be +continued. There is probably no way in which the Government can aid sound +economic progress more effectively than by cooperation with our business +men to reduce wastes in distribution. + +COMMERCIAL AERONAUTICS + +Continued progress in civil aviation is most gratifying. Demands for +airplanes and motors have taxed both the industry and the licensing and +inspection service of the Department of Commerce to their capacity. While +the compulsory licensing provisions of the air commerce act apply only to +equipment and personnel engaged in interstate and foreign commerce, a +Federal license may be procured by anyone possessing the necessary +qualifications. State legislation, local airport regulations, and insurance +requirements make such a license practically indispensable. This results in +uniformity of regulation and increased safety in operation, which are +essential to aeronautical development. Over 17,000 young men and women have +now applied for Federal air pilot's licenses or permits. More than 80 per +cent of them applied during the past year. + +Our national airway system exceeds 14,000 miles in length and has 7,500 +miles lighted for night operations. Provision has been made for lighting +4,000 miles more during the current fiscal year and equipping an equal +mileage with radio facilities. Three-quarters of our people are now served +by these routes. With the rapid growth of air mail, express, and passenger +service, this new transportation medium is daily becoming a more important +factor in commerce. It is noteworthy that this development has taken place +without governmental subsidies. Commercial passenger flights operating on +schedule have reached 13,000 miles per day. + +During the next fortnight this Nation will entertain the nations of the +world in a celebration of the twenty-fifth anniversary of the first +successful airplane flight. The credit for this epoch-making achievement +belongs to a citizen of our own country, Orville Wright. + +CUBAN PARCEL POST + +I desire to repeat my recommendation of an earlier message, that Congress +enact the legislation necessary to make permanent the Parcel Post +Convention with Cuba, both as a facility to American commerce and as a +measure of equity to Cuba in the one class of goods which that country can +send here by parcel post without detriment to our own trade. + +"MAINE" BATTLESHIP MEMORIAL + +When I attended the Pan American Conference at Habana, the President of +Cuba showed me a marble statue made from the original memorial that was +overturned by a storm after it was erected on the Cuban shore to the memory +of the men who perished in the destruction of the battleship Maine. As a +testimony of friendship and appreciation of the Cuban Government and people +he most generously offered to present this to the United States, and I +assured him of my pleasure in accepting it. There is no location in the +White House for placing so large and heavy a structure, and I therefore +urge the Congress to provide by law for some locality where it can be +set up. + +RAILROADS + +In previous annual messages I have suggested the enactment of laws to +promote railroad consolidation with the view of increasing the efficiency +of transportation and lessening its cost to the public. While, +consolidations can and should be made under the present law until it is +changed, vet the provisions of the act of 1920 have not been found fully +adequate to meet the needs of other methods of consolidation. Amendments +designed to remedy these defects have been considered at length by the +respective committees of Congress and a bill was reported out late in the +last session which I understand has the approval in principle of the +Interstate Commerce Commission. It is to be hoped that this legislation may +be enacted at an early date. + +Experience has shown that the interstate commerce law requires definition +and clarification in several other respects, some of which have been +pointed out by the Interstate Commerce Commission in its annual reports to +the Congress. It will promote the public interest to have the Congress give +early consideration to the recommendations there made. + +MERCHANT MARINE + +The cost of maintaining the United States Government merchant fleet has +been steadily reduced. We have established American flag lines in foreign +trade where they had never before existed as a means of promoting commerce +and as a naval auxiliary. There have been sold to private American capital +for operation within the past few years 14 of these lines, which, under the +encouragement of the recent legislation passed by the Congress, give +promise of continued successful operation. Additional legislation from time +to time may be necessary to promote future advancement under private +control. + +Through the cooperation of the Post Office Department and the Shipping +Board long-term contracts are being made with American steamship lines for +carrying mail, which already promise the construction of 15 to 20 new +vessels and the gradual reestablishment of the American merchant marine as +a private enterprise. No action of the National Government has been so +beneficial to our shipping. The cost is being absorbed to a considerable +extent by the disposal of unprofitable lines operated by the Shipping +Board, for which the new law has made a market. Meanwhile it should be our +policy to maintain necessary strategic lines under the Government operation +until they can be transferred to private capital. + +INTER-AMERICAN HIGHWAY + +In my message last year I expressed the view that we should lend our +encouragement for more good roads to all the principal points on this +hemisphere South of the Rio Grande. My view has not changed. + +The Pan American Union has recently indorsed it. In some of the countries +to the south a great deal of progress is being made in road building. In, +Others engineering features are often exacting and financing difficult. As +those countries enter upon programs for road building we should be ready to +contribute from our abundant experience to make their task easier of +accomplishment. I prefer not to go into civil life to accomplish this end. +We already furnish military and naval advisors, and following this +precedent we could draw competent men from these same sources and from the +Department of Agriculture. + +We should provide our southern neighbors, if they request it, with such +engineer advisors for the construction of roads and bridges. Private +interests should look with favor upon all reasonable loans sought by +these countries to open main lines of travel. Such assistance should be +given especially to any project for a highway designed to connect all the +countries on this hemisphere and thus facilitate, intercourse and closer +relations among, them. + +AIR MAIL SERVICE + +The friendly relations and the extensive, commercial intercourse with the +Western Hemisphere to the south of us are being further cemented by the +establishment and extension of air-mail routes. We shall soon have one from +Key West, Fla., over Cuba, Haiti, and Santo Domingo to San Juan, P. R., +where it will connect with another route to Trinidad. There will be another +route from Key West to the Canal Zone, where connection will be made with a +route across the northern coast of South America to Paramaribo. This will +give us a circle around the Caribbean under our own control. Additional +connections will be made at Colon with a route running down the west coast +of South America as far as Conception, Chile, and with the French air mail +at Paramaribo running down the eastern coast of South America. The air +service already spans our continent, with laterals running to Mexico and +Canada, and covering a daily flight of over 28,000 miles, with an average +cargo of 15 000 pounds. + +WATERWAYS + +Our river and harbor improvements are proceeding with vigor. In the past +few years Ave have increased the appropriation for this regular work +$28,000,000, besides what is to be expended on flood control. The total +appropriation for this year was over $91,000,000. The Ohio River is almost +ready for opening; work on the Missouri and other rivers is under way. In +accordance with the Mississippi flood law Army engineers are making +investigations and surveys on other streams throughout the country with a +view to flood control, navigation, waterpower, and irrigation. Our barrier +lines are being operated under generous appropriations, and negotiations +are developing relative to the St. Lawrence waterway. To Secure the largest +benefits from all these waterways joint rates must be established with the +railroads, preferably by agreement, but otherwise as a result of +congressional action. + +We have recently passed several river and harbor bills. The work ordered by +the Congress not, yet completed, will cost about $243, + +000,000, besides the hundreds of millions to be spent on the Mississippi +flood way. Until we can see our way out of this expense no further river +and harbor legislation should be passed, as expenditures to put it into +effect would be four or five years away. + +IRRIGATION OF ARID LANDS + +For many years the Federal Government has been committed to the wise policy +of reclamation and irrigation. While it has met with some failures due to +unwise selection of projects and lack of thorough soil surveys, so that +they could not be placed on a sound business basis, on the whole the +service has been of such incalculable benefit in so many States that no one +would advocate its abandonment. The program to which we are already +committed, providing for the construction of new projects authorized by +Congress and the completion of old projects, will tax the resources of the +reclamation fund over a period of years. The high cost of improving and +equipping farms adds to the difficulty of securing settlers for vacant +farms on federal projects. + +Readjustments authorized by the reclamation relief act of May 25, 1926, +have given more favorable terms of repayment to settlers. These new +financial arrangements and the general prosperity on irrigation projects +have resulted in increased collections by the Department of the Interior of +charges due the reclamation fund. Nevertheless, the demand for still +smaller yearly payments on some projects continues. These conditions should +have consideration in connection with any proposed new projects. + +COLORADO RIVER + +For several years the Congress has considered the erection of a dam on the +Colorado River for flood-control, irrigation, and domestic water purposes, +all of which ma properly be considered as Government functions. There would +be an incidental creation of water power which could be used for generating +electricity. As private enterprise can very well fill this field, there is +no need for the Government to go into it. It is unfortunate that the States +interested in this water have been unable to agree among themselves. +Nevertheless, any legislation should give every possible safeguard to the +present and prospective rights of each of them. + +The Congress will have before it, the detailed report of a special board +appointed to consider the engineering and economic feasibility of this +project. From the short summary which I have seen of it, 11 judge they +consider the engineering problems can be met at somewhat increased cost +over previous estimates. They prefer the Black Canyon site. On the economic +features they are not so clear and appear to base their conclusions on many +conditions which can not be established with certainty. So far as I can +judge, however, from the summary, their conclusions appear sufficiently +favorable, so that I feel warranted in recommending a measure which will +protect the rights of the States, discharge the necessary Government +functions, and leave the electrical field to private enterprise. + +MUSCLE SHOALS + +The development of other methods of producing nitrates will probably render +this plant less important for that purpose than formerly. But we have it, +and I am told it still provides a practical method of making nitrates for +national defense and farm fertilizers. By dividing the property into its +two component parts of power and nitrate plants it would be possible to +dispose of the power, reserving the right to any concern that wished to +make nitrates to use any power that might be needed for that purpose. Such +a disposition of the power plant can be made that will return in rental +about $2,000,000 per year. If the Congress would giant the Secretary of War +authority to lease the nitrate plant on such terms as would insure the +largest production of nitrates, the entire property could begin to +function. Such a division, I am aware, has never seemed to appeal to the +Congress. I should also gladly approve a bill granting authority to lease +the entire property for the production of nitrates. + +I wish to avoid building another dam at public expense. Future operators +should provide for that themselves. But if they were to be required to +repay the cost of such dam with the prevailing commercial rates for +interest, this difficulty will be considerably lessened. Nor do I think +this property should be made a vehicle for putting the United States +Government indiscriminately into the private and retail field of power +distribution and nitrate sales. + +CONSERVATION + +The practical application of economy to the resources of the country calls +for conservation. This does not mean that every resource should not be +developed to its full degree, but it means that none of them should be +wasted. We have a conservation board working on our oil problem. This is of +the utmost importance to the future well-being of our people in this age of +oil-burning engines and the general application of gasoline to +transportation. The Secretary of the Interior should not be compelled to +lease oil lands of the Osage Indians when the market is depressed and the +future supply is in jeopardy. + +While the area of lands remaining in public ownership is small, compared +with the vast area in private ownership, the natural resources of those in +public ownership are of immense present and future value. This is +particularly trite as to minerals and water power. The proper bureaus have +been classifying these resources to the end that they may be conserved. +Appropriate estimates are being submitted, in the Budget, for the further +prosecution of this important work. + +IMMIGRATION + +The policy of restrictive immigration should be maintained. Authority +should be granted the Secretary of Labor to give immediate preference to +learned professions and experts essential to new industries. The reuniting +of families should be expedited. Our immigration and naturalization laws +might well be codified. + +WAGE EARNER + +In its economic life our country has rejected the long accepted law of a +limitation of the wage fund, which led to pessimism and despair because it +was the doctrine of perpetual poverty, and has substituted for it the +American conception that the only limit to profits and wages is production, +which is the doctrine of optimism and hope because it leads to prosperity. +Here and there the councils of labor are still darkened by the theory that +only by limiting individual production can there be any assurance of +permanent employment for increasing numbers, but in general, management and +wage earner alike have become emancipated from this doom and have entered a +new era in industrial thought which has unleashed the productive capacity +of the individual worker with an increasing scale of wages and profits, the +end of which is not yet. The application of this theory accounts for our +widening distribution of wealth. No discovery ever did more to increase the +happiness and prosperity of the people. + +Since 1922 increasing production has increased wages in general 12.9 per +cent, while in certain selected trades they have run as high as 34.9 per +cent and 38 per cent. Even in the boot and shoe shops the increase is over +5 per cent and in woolen mills 8.4 per cent, although these industries have +not prospered like others. As the rise in living costs in this period is +negligible, these figures represent real wage increases. + +The cause of constructive economy requires that the Government should +cooperate with private interests to eliminate the waste arising from +industrial accidents. This item, with all that has been done to reduce it, +still reaches enormous proportions with great suffering to the workman and +great loss to the country. + +WOMEN AND CHILDREN + +The Federal Government should continue its solicitous care for the +8,500,000 women wage earners and its efforts in behalf of public health, +which is reducing infant mortality and improving the bodily and mental +condition of our citizens. + +CIVIL SERVICE + +The most marked change made in the civil service of the Government in the +past eight years relates to the increase in salaries. The Board of +Actuaries on the retirement act shows by its report, that July 1, 1921 the +average salary of the 330,047 employees subject to the act was $1,307, +while on June 30, 1927, the average salary of the corresponding 405,263 +was $1,969. This was an increase in six years of nearly 53 per cent. On top +of this was the generous increase made at the last session of the Congress +generally applicable to Federal employees and another bill increasing the +pay in certain branches of the Postal Service beyond the large increase +which was made three years ago. This raised the average level from $1,969 +to $2,092, making an increase in seven years of over 63 per cent. While it +is well known that in the upper brackets the pay in the Federal +service is much smaller than in private employment, in the lower brackets, +ranging well up over $3,000, it is much higher. It is higher not only in +actual money paid, but in privileges granted, a vacation of 30 actual +working days, or 5 weeks each year, with additional time running in some +departments as high as 30 days for sick leave and the generous provisions +of the retirement act. No other body of public servants ever occupied such +a fortunate position. + +EDUCATION + +Through the Bureau of Education of the Department of the Interior the +Federal Government, acting in an informative and advisory capacity, has +rendered valuable service. While this province belongs peculiarly to the +States, yet the promotion of education and efficiency in educational +methods is a general responsibility of the Federal Government. A survey of +negro colleges and universities in the United States has just been +completed by the Bureau of Education through funds provided by the +institutions themselves and through private sources. The present status of +negro higher education was determined and recommendations were made for its +advancement. This was one of the numerous cooperative undertakings of the +bureau. Following the invitation of the Association of Land Grant Colleges +and Universities, he Bureau of Education now has under way the survey of +agricultural colleges, authorized by Congress. The purpose of the survey is +to ascertain the accomplishments, the status, and the future objectives of +this type of educational training. It is now proposed to undertake a survey +of secondary schools, which educators insist is timely and essential. + +PUBLIC BUILDINGS + +We, have laid out a public building program for the District of Columbia +and the country at large running into hundreds of millions of dollars. +Three important structures and one annex are already, under way and one +addition has been completed in the City of Washington. in the country sites +have been acquired, many buildings are in course of construction, and some +are already completed. Plans for all this work are being prepared in order +that it may be carried forward as rapidly as possible. This is the greatest +building program ever assumed by this Nation. It contemplates structures of +utility and of beauty. When it reaches completion the people will be well +served and the Federal city will be supplied with the most beautiful and +stately public buildings which adorn any capital in the world. + +THE AMERICAN INDIAN + +The administration of Indian affairs has been receiving intensive study for +several years. The Department of the Interior has been able to provide +better supervision of health, education, and industrial advancement of this +native race through additional funds provided by the Congress. The present +cooperative arrangement existing between the Bureau of Indian Affairs and +the Public Health Service should be extended. The Government's +responsibility to the American Indian has been acknowledged by annual +increases in appropriations to fulfill its obligations to them and to +hasten the time when Federal supervision of their affairs may be properly +and safely terminated. The movement in Congress and in some of the State +legislatures for extending responsibility in Indian affairs to States +should be encouraged. A complete participation by the Indian in our +economic life is the end to be desired. + +THE NEGRO + +For 65 years now our negro Population has been under the peculiar care and +solicitude of the National Government. The progress which they have made in +education and the professions, in wealth and in the arts of civilization, +affords one of the most remarkable incidents in this period of world +history. They have demonstrated their ability to partake of the advantages +of our institutions and to benefit by a free and more and more independent +existence. Whatever doubt there may have been of their capacity to assume, +the status granted to them by the Constitution of this Union is being +rapidly dissipated. Their cooperation in the life of the Nation is +constantly enlarging. + +Exploiting the Negro problem for political ends is being abandoned and +their protection is being increased by those States in which their +percentage of population is largest. Every encouragement should be extended +for t le development of the race. The colored people have been the victims +of the crime of lynching, which has in late years somewhat decreased. Some +parts of the South already have wholesome laws for its restraint and +punishment. Their example might well be followed by other States, and by +such immediate remedial legislation as the Federal Government can extend +under the Constitution. + +PHILIPPINE ISLANDS + +Under the guidance of Governor General Stimson the economic and political +conditions of the Philippine Islands have been raised to a standard never +before surpassed. The cooperation between his administration and the people +of the islands is complete and harmonious. It would be an advantage if +relief from double taxation could be granted by the Congress to our +citizens doing business in the islands. + +PORTO RICO + +Due to the terrific storm that swept Porto Rico last September, the people +of that island suffered large losses. The Red Cross and the War Department +went to their rescue. The property loss is being, retrieved. Sugar, +tobacco, citrus fruit, and coffee, all suffered damage. The first three can +largely look after themselves. The coffee growers will need some +assistance, which should be extended strictly on a business basis, and +only after most careful investigation. The people of Porto Rico are not +asking for charity. + +DEPARTMENT OF JUSTICE + +It is desirable that all the legal activities of the Government be +consolidated under the supervision of the Attorney General. In +1870 it was felt necessary to create the Department of Justice for this +purpose. During the intervening period, either through legislation creating +law officers or departmental action, additional legal positions not under +the supervision of the Attorney General have been provided until there are +now over 900. Such a condition is as harmful to the interest of the +Government now as it was in 1870, and should be corrected by appropriate +legislation. + +SPECIAL GOVERNMENT COUNSEL + +In order to prosecute the oil cases, I suggested and the Congress enacted a +law providing for the appointment of two special counsel. They have pursued +their work with signal ability, recovering all the leased lands besides +nearly $30,000,000 in money, and nearly $17,000,000 in other property. They +find themselves hampered by a statute, which the Attorney General construes +as applying to them, prohibiting their appearing for private clients before +any department. For this reason, one has been compelled to resign. No good +result is secured by the application of this rule to these counsel, and as +Mr. Roberts has consented to take reappointment if the rule is abrogated I +recommend the passage of an amendment to the law creating their office +exempting them from the general rule against taking other cases involving +the Government. + +PROHIBITION + +The country has duly adopted the eighteenth amendment. Those who object to +it have the right to advocate its modification or repeal. Meantime, it is +binding upon the National and State Governments and all our inhabitants. +The Federal enforcement bureau is making every effort to prevent +violations, especially through smuggling, manufacture, and transportation, +and to prosecute generally all violations for which it can secure evidence. +It is bound to continue this policy. Under the terms of the Constitution, +however, the obligation is equally on the States to exercise the power +which they have through the executive, legislative, judicial, and police +branches of their governments in behalf of enforcement. The Federal +Government is doing and will continue to do all it can in this direction +and is entitled to the active cooperation of the States. + +CONCLUSION + +The country is in the midst of an era of prosperity more extensive and of +peace more permanent than it has ever before experienced. But, having +reached this position, we should not fail to comprehend that it can easily +be lost. It needs more effort for its support than the less exalted places +of the world. We shall not be permitted to take our case, but shall +continue to be required to spend our days in unremitting toil. The actions +of the Government must command the confidence of the country. Without this, +our prosperity would be lost. We must extend to other countries the largest +measure of generosity, moderation, and patience. In addition to dealing +justly, we can well afford to walk humbly. + +The end of government is to keep open the opportunity for a more +abundant life. Peace and prosperity are not finalities; they are only +methods. It is too easy under their influence for a nation to become +selfish and degenerate. This test has come to the United States. Our +country has been provided with the resources with which it can enlarge its +intellectual, moral, and spiritual life. The issue is in the hands of the +people. Our faith in man and God is the justification for the belief in our +continuing success. + + + +*** END OF THE PROJECT GUTENBERG EBOOK OF ADDRESSES BY CALVIN COOLIDGE *** + +This file should be named sucoo11.txt or sucoo11.zip +Corrected EDITIONS of our eBooks get a new NUMBER, sucoo12.txt +VERSIONS based on separate sources get new LETTER, sucoo10a.txt + +Project Gutenberg eBooks are often created from several printed +editions, all of which are confirmed as Public Domain in the US +unless a copyright notice is included. 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