THE WHITE HOUSE, December 21, 1911. To the Senate and House of
Representatives:
The financial condition of the Government, as shown at the close of the
last fiscal year, June 30, 1911, was very satisfactory. The ordinary
receipts into the general fund, excluding postal revenues, amounted to
$701,372,374.99, and the disbursements from the general fund for current
expenses and capital outlays, excluding postal and Panama Canal
disbursements, including the interest on the public debt, amounted to
$654,137,907-89, leaving a surplus Of $47,234,377.10.
The postal revenue receipts amounted to $237,879,823,60, while the payments
made for the postal service from the postal revenues amounted to
$237,660,705.48, which left a surplus of postal receipts over disbursements
Of $219,118.12, the first time in 27 years in which a surplus occurred.
The interest-bearing debt of the United States June 30, 1911, amounted to
$915,353,190. The debt on which interest had ceased amounted to
$1,879,830.26, and the debt bearing no interest, including greenbacks,
national bank notes to be redeemed, and fractional currency, amounted to
$386,751,917-43, or a total of interest and noninterest bearing debt
amounting to $1,303,984,937.69.
The actual disbursements, exclusive of those for the Panama Canal and for
the postal service for the year ending June 30, 1911, were $654,137,997.89.
The actual disbursements for the year ending June 30, 1910, exclusive of
the Panama Canal and the postal service disbursements, were
$659,705,391.08, making a decrease Of $5,567,393.19 in yearly expenditures
in the year 1911 under that of 1910. For the year ending June 30, 1912, the
estimated receipts, exclusive of the postal revenues, are $666,000,000,
while the total estimates, exclusive of those for the Panama Canal and the
postal expenditures payable from the postal revenues, amount to
$645,842,799.34. This is a decrease in the 1912 estimates from that of the
1911 estimates of $1,534,367-22.
For the year ending June 30, 1913, the estimated receipts, exclusive of the
postal revenues, are $667,000,000, while the total estimated
appropriations, exclusive of the Panama Canal and postal disbursements
payable from postal revenues, will amount to $637,920,803.35. This is a
decrease in the 1913 estimates from that of the 1912 estimates of
$7,921,995.99.
As to the postal revenues, the expansion of the business in that
department, the normal increase in the Post Office and the extension of the
service, will increase the outlay to the sum Of $260,938,463; but as the
department was self-sustaining this year the Postmaster General is assured
that next year the receipts will at least equal the expenditures, and
probably exceed them by more than the surplus of this year. It is fair and
equitable, therefore, in determining the economy with which the Government
has been run, to exclude the transactions of a department like the Post
Office Department, which relies for its support upon its receipts. In
calculations heretofore made for comparison of economy in each year, it has
been the proper custom only to include in the statement the deficit in the
Post Office Department which was paid out of the Treasury.
A calculation of the actual increase in the expenses of Government arising
from the increase in the population and the general expansion of
governmental functions, except those of the Post Office, for a number of
years shows a normal increase of about 4 per cent a year. By directing the
exercise of great care to keep down the expenses and the estimates we have
succeeded in reducing the total disbursements each year.
THE CREDIT OF THE UNITED STATES.
The credit of this Government was shown to be better than that of any other
Government by the sale of the Panama Canal 3 per cent bonds. These bonds
did not give their owners the privilege of using them as a basis for
bank-note circulation, nor was there any other privilege extended to them
which would affect their general market value. Their sale, therefore,
measured the credit of the Government. The premium which was realized upon
the bonds made the actual interest rate of the transaction 2.909 per cent.
EFFICIENCY AND ECONOMY IN THE TREASURY DEPARTMENT.
I In the Treasury Department the efficiency and economy work has been kept
steadily up. Provision is made for the elimination of 134 positions during
the coming year. Two hundred and sixty-seven statutory positions were
eliminated during the last year in the office of the Treasury in
Washington, and 141 positions in the year 1910, making an elimination Of
542 statutory positions since March 4, 1909; and this has been done without
the discharge of anybody, because the normal resignations and deaths have
been equal to the elimination of the places, a system of transfers having
taken care of the persons whose positions were dropped out. In the field
service if the department, too, 1,259 positions have been eliminated down
to the present time, making a total net reduction of all Treasury positions
to the number of 1,801. Meantime the efficiency of the work of the
department has increased.
MONETARY REFORM.
A matter of first importance that will come before Congress for action at
this session is monetary reform. The Congress has itself arranged an early
introduction of this great question through the report of its Monetary
Commission. This commission was appointed to recommend a solution of the
banking and currency problems so long confronting the Nation and to furnish
the facts and data necessary to enable the Congress to take action. The
commission was appointed when an impressive and urgent popular demand for
legislative relief suddenly arose out of the distressing situation of the
people caused by the deplorable panic of 1907. The Congress decided that
while it could not give immediately the relief required, it would provide a
commission to furnish the means for prompt action at a later date.
In order to do its work with thoroughness and precision this commission has
taken some time to make its report. The country is undoubtedly hoping for
as prompt action on the report as the convenience of the Congress can
permit. The recognition of the gross imperfections and marked inadequacy of
our banking and currency system even in our most quiet financial periods is
of long standing; and later there has matured a recognition of the fact
that our system is responsible for the extraordinary devastation, waste,
and business paralysis of our recurring periods of panic. Though the
members of the Monetary Commission have for a considerable time been
working in the open, and while large numbers of the people have been openly
working with them, and while the press has largely noted and discussed this
work as it has proceeded, so that the report of the commission promises to
represent a national movement, the details of the report are still being
considered. I can not, therefore, do much more at this time than commend
the immense importance of monetary reform, urge prompt consideration and
action when the commission's report is received, and express my
satisfaction that the plan to be proposed promises to embrace main features
that, having met the approval of a great preponderance of the practical and
professional opinion of the country, are likely to meet equal approval in
Congress.
It is exceedingly fortunate that the wise and undisputed policy of
maintaining unchanged the main features of our banking system rendered it
at once impossible to introduce a central bank; for a central bank would
certainly have been resisted, and a plan into which it could have been
introduced would probably have been defeated. But as a central bank could
not be a part of the only plan discussed or considered, that troublesome
question is eliminated. And ingenious and novel as the proposed National
Reserve Association appears, it simply is a logical outgrowth of what is
best in our present system, and is, in fact, the fulfillment of that
system.
Exactly how the management of that association should be organized is a
question still open. It seems to be desirable that the banks which would
own the association should in the main manage it, It will be an agency of
the banks to act for them, and they can be trusted better than anybody else
chiefly to conduct it. It is mainly bankers' work. But there must be some
form of Government supervision and ultimate control, and I favor a
reasonable representation of the Government in the management. I entertain
no fear of the introduction of politics or of any undesirable influences
from a properly measured Government representation.
I trust that all banks of the country possessing the requisite standards
will be placed upon a footing of perfect equality of opportunity. Both the
National system and the State system should be fairly recognized, leaving
them eventually to coalesce if that shall prove to be their tendency. But
such evolution can not develop impartially if the banks of one system are
given or permitted any advantages of opportunity over those of the other
system. And I trust also that the new legislation will carefully and
completely protect and assure the individuality and the independence of
each bank, to the end that any tendency there may ever be toward a
consolidation of the money or banking power of the Nation shall be
defeated.
It will always be possible, of course, to correct any features of the new
law which may in practice prove to be unwise; so that while this law is
sure to be enacted under conditions of unusual knowledge and authority, it
also will include, it is well to remember, the possibility of future
amendment.
With the present prospects of this long-awaited reform encouraging us, it
would be singularly unfortunate if this monetary question should by any
chance become a party issue. And I sincerely hope it will not. The
exceeding amount of consideration it has received from the people of the
Nation has been wholly nonpartisan; and the Congress set its nonpartisan
seal upon it when the Monetary Commission was appointed. In commending the
question to the favorable consideration of Congress, I speak for, and in
the spirit of, the great number of my fellow citizens who without any
thought of party or partisanship feel with remarkable earnestness that this
reform is necessary to the interests of all the people.
THE WAR DEPARTMENT.
There is now before Congress a Dill, the purpose of which is to increase
the efficiency and decrease the expense of the Army. It contains four
principal features: First, a consolidation of the General Staff with the
Adjutant General's and the Inspector General's Departments; second, a
consolidation of the Quartermaster's Department with the Subsistence and
the Pay Departments; third, the creation of an Army Service Corps; and
fourth, an extension of the enlistment period from three to five years.
With the establishment of an Army Service Corps, as proposed in the bill, I
am thoroughly in accord and am convinced that the establishment of such a
corps will result in a material economy and a very great increase of
efficiency in the Army. It has repeatedly been recommended by me and my
predecessors. I also believe that a consolidation of the Staff Corps can be
made with a resulting increase in efficiency and economy, but not along the
lines provided in the bill under consideration.
I am opposed to any plan the result of which would be to break up or
interfere with the essential principles of the detail system in the Staff
Corps established by the act of February 2, 1901, and I am opposed to any
plan the result of which would be to give to the officer selected as Chief
of Staff or to any other member of the General Staff Corps greater
permanency of office than he now has. Under the existing law neither the
Chief. of Staff nor any other member of the General Staff Corps can remain
in office for a period of more than four years, and there must be an
interval of two years between successive tours of duty.
The bill referred to provides that certain persons shall become permanent
members of the General Staff Corps, and that certain others are subject to
re-detail without an interval of two years. Such provision is fraught with
danger to the welfare of the Army, and would practically nullify the main
purpose of the law creating the [missing text].
In making the consolidations no reduction should be made in the total
number of officers of the Army, of whom there are now too few to perform
the duties imposed by law. I have in the past recommended an increase in
the number of officers by 600 in order to provide sufficient officers to
perform all classes of staff duty and to reduce the number of line officers
detached from their commands. Congress at the last session increased the
total number of officers by 200, but this is not enough. Promotion in the
line of the Army is too slow. Officers do not attain command rank at an age
early enough properly to exercise it. It would be a mistake further to
retard this already slow promotion by throwing back into the line of the
Arm a number of high-ranking officers to be absorbed as is provided in the
[missing text].
Another feature of the bill which I believe to be a mistake is the proposed
increase in the term of enlistment from three to five ears I believe it
would be better to enlist men for six years, release them at the end of
three years from active service, and put them in reserve for the remaining
three years. Reenlistments should be largely confined to the
noncommissioned officers and other enlisted men in the skilled grades. This
plan by the payment of a comparatively small compensation during the three
years of reserve, would keep a large body of men at the call of the
Government, trained and ready for [missing text].
The Army of the United States is in good condition. It showed itself able
to meet an emergency in the successful mobilization of an army division of
from 15,000 to 20,000 men, which took place along the border of Mexico
during the recent disturbances in that country. The marvelous freedom from
the ordinary camp diseases of typhoid fever and measles is referred to in
the report of the Secretary of War and shows such an effectiveness in the
sanitary regulations and treatment of the Medical Corps, and in the
discipline of the Army itself, as to invoke the highest commendation.
MEMORIAL AMPHITHEATER AT ARLINGTON.
I beg to renew my recommendation of last year that the Congress appropriate
for a memorial amphitheater at Arlington, Va., the funds required to
construct it upon the plans already approved.
THE PANAMA CANAL.
The very satisfactory progress made on the Panama Canal last year has
continued, and there is every reason to believe that the canal
will be completed as early as the 1st of July, 1913, unless something
unforeseen occurs. This is about 18 months before the time promised by the
engineers.
We are now near enough the completion of the canal to make it imperatively
necessary that legislation should be enacted to fix the method by which the
canal shall be maintained and controlled and the zone governed. The fact is
that to-day there is no statutory law by authority of which the President
is maintaining the government of the zone. Such authority was given in an
amendment to the Spooner Act, which expired by the terms of its own
limitation some years ago. Since that time the government has continued,
under the advice of the Attorney General that in the absence of action by
Congress, there is necessarily an implied authority on the part of the
Executive to maintain a government in a territory in which he has to see
that the laws are executed. The fact that we have been able thus to get
along during the important days of construction without legislation
expressly formulating the government of the zone, or delegating the
creation of it to the President, is not a reason for supposing that we may
continue the same kind of a government after the construction is finished.
The implied authority of the President to maintain a civil government in
the zone may be derived from the mandatory direction given him in the
original Spooner Act, by which he was commanded to build the canal; but
certainly, now that the canal is about to be completed and to be put under
a permanent management, there ought to be specific statutory authority for
its regulation and control and for the government of the zone, which we
hold for the chief and main purpose of operating the canal.
I fully concur with the Secretary of War that the problem is simply the
management of a great public work, and not the government of a local
republic; that every provision must be directed toward the successful
maintenance of the canal as an avenue of commerce, and that all provisions
for the government of those who live within the zone should be subordinate
to the main purpose.
The zone is 40 miles long and 10 miles wide. Now, it has a population Of
50,000 or 60,000, but as soon as the work of construction is completed, the
towns which make up this population will be deserted, and only
comparatively few natives will continue their residence there. The control
of them ought to approximate a military government. One judge and two
justices of the peace will be sufficient to attend to all the judicial and
litigated business there is. With a few fundamental laws of Congress, the
zone should be governed by the orders of the President, issued through the
War Department, as it is today. Provisions can be made for the guaranties
of life, liberty, and property, but beyond those, the government should be
that of a military reservation, managed in connection with this great
highway of trade.
FURNISHING SUPPLIES AND REPAIRS.
In my last annual message I discussed at length the reasons for the
Government's assuming the task of furnishing to all ships that use the
canal, whether our own naval vessels or others, the supplies of coal and
oil and other necessities with which they must be replenished either before
or after passing through the canal, together with the dock facilities and
repairs of every character. This it is thought wise to do through the
Government, because the Government must establish for itself, for its own
naval vessels, large depots and dry docks and warehouses, and these may
easily be enlarged so as to secure to the world public using the canal
reasonable prices and a certainty that there will be no discrimination
between those who wish to avail themselves of such facilities. TOLLS.
I renew my recommendation with respect to the tolls of the canal that
within limits, which shall seem wise to Congress, the power of fixing tolls
be given to the President. In order to arrive at a proper conclusion, there
must be some experimenting, and this can not be done if Congress does not
delegate the power to one who can act expeditiously.
POWER EXISTS TO RELIEVE AMERICAN SHIPPING.
I am very confident that the United States has the power to relieve from
the payment of tolls any part of our shipping that Congress deems wise. We
own the canal. It was our money that built it. We have the right to charge
tolls for its use. Those tolls must be the same to everyone; but when we
are dealing with our own ships, the practice of many Governments of
subsidizing their own merchant vessels is so well established in general
that a subsidy equal to the tolls, an equivalent remission of tolls, can
not be held to be a discrimination in the use of the canal. The practice in
the Suez Canal makes this clear. The experiment in tolls to be made by the
President would doubtless disclose how great a burden of tolls the
coastwise trade between the Atlantic and the Pacific coast could bear
without preventing its usefulness in competition with the transcontinental
railroads. One of the chief reasons for building the canal was to set up
this competition and to bring the two shores closer together as a practical
trade problem. It may be that the tolls will have to be wholly remitted. I
do not think this is the best principle, because I believe that the cost of
such a Government work as the Panama Canal ought to be imposed gradually
but certainly upon the trade which it creates and makes possible. So far as
we can, consistent with the development of the world's trade through the
canal, and the benefit which it was intended to secure to the east and west
coastwise trade, we ought to labor to secure from the canal tolls a
sufficient amount ultimately to meet the debt which we have assumed and to
pay the interest.
THE PHILIPPINE ISLANDS.
In respect to the Philippines, I urgently join in the recommendation of the
Secretary of War that the act of February 6, 1905, limiting the
indebtedness that may be incurred by the Philippine Government for the
construction of public works, be increased from $5,000,000 to $15,000,000.
The finances of that Government are in excellent condition. The maximum sum
mentioned is quite low as compared with the amount of indebtedness of other
governments with similar resources, and the success which has attended the
expenditure of the $5,000,000 in the useful improvements of the harbors and
other places in the Islands justifies and requires additional expenditures
for like purposes. NATURALIZATION.
I also join in the recommendation that the legislature of the Philippine
Islands be authorized to provide for the naturalization of Filipinos and
others who by the present law are treated as aliens, so as to enable them
to become citizens of the Philippine Islands.
FRIARS' LANDS.
Pending an investigation by Congress at its last session, through one of
its committees, into the disposition of the friars' lands, Secretary
Dickinson directed that the friars' lands should not be sold in excess of
the limits fixed for the public lands until Congress should pass upon the
subject or should have concluded its investigation. This order has been an
obstruction to the disposition of the lands, and I expect to direct the
Secretary of War to return to the practice under the opinion of the
Attorney General which will enable us to dispose of the lands much more
promptly, and to prepare a sinking fund with which to meet the $7,000,000
of bonds issued for the purchase of the lands. I have no doubt whatever
that the Attorney General's construction was a proper one, and that it is
in the interest of everyone that the land shall be promptly disposed of.
The danger of creating a monopoly of ownership in lands under the statutes
as construed is nothing. There are only two tracts of 60,000 acres each
unimproved and in remote Provinces that are likely to be disposed of in
bulk, and the rest of the lands are subject to the limitation that they
shall be first offered to the present tenants and lessors who hold them in
small tracts.
RIVERS AND HARBORS.
The estimates for the river and harbor improvements reach $32,000,000 for
the coming year. I wish to urge that whenever a project has been adopted by
Congress as one to be completed, the more money which can be economically
expended in its construction in each year, the greater the ultimate
economy. This has especial application to the improvement of the
Mississippi River and its large branches. It seems to me that an increase
in the amount of money now being annually expended in the improvement of
the Ohio River which has been formally adopted by Congress would be in the
interest of the public. A similar change ought to be made during the
present Congress, in the amount to be appropriated for the Missouri River.
The engineers say that the cost of the improvement of the Missouri River
from Kansas City to St. Louis, in order to secure 6 feet as a permanent
channel, will reach $20,000,000. There have been at least three
recommendations from the Chief of Engineers that if the improvement be
adopted, $2,000,000 should be expended upon it annually. This particular
improvement is especially entitled to the attention of Congress, because a
company has been organized in Kansas City, with a capital of $1,000,000,
which has built steamers and barges, and is actually using the river for
transportation in order to show what can be done in the way of affecting
rates between Kansas City and St. Louis, and in order to manifest their
good faith and confidence in respect of the improvement. I urgently
recommend that the appropriation for this improvement be increased from
$600,000, as recommended now in the completion of a contract, to $2,000,000
annually, so that the work may be done in 10 years.
WATERWAY FROM THE LAKES TO THE GULF.
The project for a navigable waterway from Lake Michigan to the mouth of the
Illinois River, and thence via the Mississippi to the Gulf of Mexico, is
one of national importance. In view of the work already accomplished by the
Sanitary District of Chicago, an agency of the State of Illinois, which has
constructed the most difficult and costly stretch of this waterway and made
it an asset of the Nation, and in view of the fact that the people of
Illinois have authorized the expenditure Of $20,000,000 to carry this
waterway 62 miles farther to Utica, I feel that it is fitting that this
work should be supplemented by the Government, and that the expenditures
recommended by the special board of engineers on the waterway from Utica to
the mouth of the Illinois River be made upon lines which while providing a
waterway for the Nation should otherwise benefit that State to the fullest
extent. I recommend that the term of service of said special board of
engineers be continued, and that it be empowered to reopen the question of
the treatment of the lower Illinois River, and to negotiate with a properly
constituted commission representing the State of Illinois, and to agree
upon a plan for the improvement of the lower Illinois River and upon the
extent to which the United States may properly cooperate with the State of
Illinois in securing the construction of a navigable waterway from Lockport
to the mouth of the Illinois River in conjunction with the development of
water power by that State between Lockport and Utica.
THE DEPARTMENT OF JUSTICE.
Removal of clerks of Federal courts.
The report of the Attorney General shows that he has subjected to close
examination the accounts of the clerks of the Federal courts; that he has
found a good many which disclose irregularities or dishonesty; but that he
has had considerable difficulty in securing an effective prosecution or
removal of the clerks thus derelict. I am certainly not unduly prejudiced
against the Federal courts, but the fact is that the long and confidential
relations which grow out of the tenure for life on the part of the judge
and the practical tenure for life on the part of the clerk are not
calculated to secure the strictness of dealing by the judge with the clerk
in respect to his fees and accounts which assures in the clerk's conduct a
freedom from overcharges and carelessness. The relationship between the
judge and the clerk makes it ungracious for members of the bar to complain
of the clerk or for department examiners to make charges against him to be
heard by the court, and an order of removal of a clerk and a judgment for
the recovery of fees are in some cases reluctantly entered by the judge.
For this reason I recommend an amendment to the law whereby the President
shall be given power to remove the clerks for cause. This provision need
not interfere with the right of the judge to appoint his clerk or to remove
him.
French spoliation awards.
In my last message, I recommended to Congress that it authorize the payment
of the findings or judgments of the Court of Claims in the matter of the
French spoliation cases. There has been no appropriation to pay these
judgments since 1905. The findings and awards were obtained after a very
bitter fight, the Government succeeding in about 75 per cent of the cases.
The amount of the awards ought, as a matter of good faith on the part of
the Government, to be paid.
EMPLOYERS' LIABILITY AND WORKMEN'S COMPENSATION COMMISSION.
The limitation of the liability of the master to his servant for personal
injuries to such as are occasioned by his fault has been abandoned in most
civilized countries and provision made whereby the employee injured in the
course of his employment is compensated for his loss of working ability
irrespective of negligence. The principle upon which such provision
proceeds is that accidental injuries to workmen in modern industry, with
its vast complexity and inherent dangers arising from complicated machinery
and the use of the great forces of steam and electricity, should be
regarded as risks of the industry and the loss borne in some equitable
proportion by those who for their own profit engage therein. In recognition
of this the last Congress authorized the appointment of a commission to
investigate the subject of employers' liability and workmen's compensation
and to report the result of their investigations, through the President, to
Congress. This commission was appointed and has been at work, holding
hearings, gathering data, and considering the subject, and it is expected
will be able to report by the first of the year, in accordance with the
provisions of the law. It is hoped and expected that the commission will
suggest legislation which will enable us to put in the place of the present
wasteful and sometimes unjust system of employers' liability a plan of
compensation which will afford some certain and definite relief to all
employees who are injured in the course of their employment in those
industries which are subject to the regulating power of Congress.
MEASURES TO PREVENT DELAY AND UNNECESSARY COST OF LITIGATION.
In promotion of the movement for the prevention of delay and unnecessary
cost, in litigation, I am glad to say that the Supreme Court has taken
steps to reform the present equity rules of the Federal courts, and that we
may in the near future expect a revision of them which will be a long step
in the right direction.
The American Bar Association has recommended to Congress several bills
expediting procedure, one of which has already passed the House
unanimously, February 6, 1911. This directs that no judgment should be set
aside or reversed, or new trial granted, unless it appears to the court,
after an examination of the entire cause, that the error complained of has
injuriously affected the substantial rights of the parties, and also
provides for the submission of issues of fact to a jury, reserving
questions of law for subsequent argument and decision. I hope this bill
will pass the Senate and become law, for it will simplify the procedure at
law.
Another bill 11 to amend chapter II of the judicial Code, in order to
avoid errors in pleading, was presented by the same association, and one.
enlarging the jurisdiction of the Supreme Court so as to permit that court
to examine, upon a writ of error, all cases in which any right or title is
claimed under the Constitution, or any statute or treaty of the United
States, whether the decision in the court below has been against the right
or title or in its favor. Both these measures are in the interest of
justice and should be passed.
POST OFFICE.
At the beginning of the present administration in 1909 the postal service
was in arrears to the extent Of $17,479,770.47. It was very much the
largest deficit on record. In the brief space of two years this has been
turned into a surplus Of $220,000, which has been accomplished without
curtailment of the postal facilities, as may be seen by the fact that there
have been established 3,744 new post offices; delivery by carrier has been
added to the service in 186 cities; 2,516 new rural routes have been
established, covering 60,000 miles; the force of postal employees has been
increased in these two years by more than 8,000, and their average annual
salary has had a substantial increase.
POSTAL-SAVINGS SYSTEM.
On January 3, 1911, postal-savings depositories were established
experimentally in 48 States and Territories. After three months' successful
operation the system was extended as rapidly as feasible to the 7,500 Post
offices of the first, second, and third classes constituting the
presidential grade. By the end of the year practically all of these will
have been designated and then the system will be extended to all
fourth-class post offices doing a money-order business.
In selecting post offices for depositories consideration was given to the
efficiency of the postmasters and only those offices where the ratings were
satisfactory to the department have been designated. Withholding
designation from postmasters with unsatisfactory ratings has had a salutary
effect on the service.
The deposits have kept pace with the extension of the system. Amounting to
only $60,652 at the end of the first month's operation in the experimental
offices, they increased to $679,310 by July, and now after 11 months of
operation have reached a total of $11,000,000. This sum is distributed
among 2,710 banks and protected tinder the law by bonds deposited with the
Treasurer of the United States.
Under the method adopted for the conduct of the system certificates are
issued as evidence of deposits, and accounts with depositors are kept by
the post offices instead of by the department. Compared with the practice
in other countries of entering deposits in pass books and keeping at the
central office a ledger account with each depositor, the use of the
certificate has resulted in great economy of administration.
The depositors thus far number approximately 150,000. They include 40
nationalities, native Americans largely predominating and English and
Italians coming next.
The first conversion of deposits into United States bonds bearing interest
at the rate of 2.5 per cent occurred on July 1, 1911, the amount of
deposits exchanged being $41,900, or a little more than 6 per cent of the
total outstanding certificates of deposit on June 30. Of this issue, bonds
to the value of $6,120 were in coupon form and $35,780 in registered form.
PARCEL POST.
Steps should be taken immediately for the establishment of a rural parcel
post. In the estimates of appropriations needed for the maintenance of the
postal service for the ensuing fiscal year an item of $150,000 has been
inserted to cover the preliminary expense of establishing a parcel post on
rural mail routes, as well as to cover an investigation having for its
object the final establishment of a general parcel post on all railway and
steamboat transportation routes. The department believes that after the
initial expenses of establishing the system are defrayed and the parcel
post is in full operation on the rural routes it will not only bring in
sufficient revenue to meet its cost, but also a surplus that can be
utilized in paying the expenses of a parcel post in the City Delivery
Service.
It is hoped that Congress will authorize the immediate establishment of a
limited parcel post on such rural routes as may be selected, providing for
the delivery along the routes of parcels not exceeding eleven pounds, which
is the weight limit for the international parcel post, or at the post
office from which such route emanates, or on another route emanating from
the same office. Such preliminary service will prepare the way for the more
thorough and comprehensive inquiry contemplated in asking for the
appropriation mentioned, enable the department to gain definite information
concerning the practical operation of a general system, and at the same
time extend the benefit of the service to a class of people who, above all
others, are specially in need of it.
The suggestion that we have a general parcel post has awakened great
opposition on the part of some who think that it will have the effect to
destroy the business of the country storekeeper. Instead of doing this, I
think the change will greatly increase business for the benefit of all. The
reduction in the cost of living it will bring about ought to make its
coming certain.
THE NAVY DEPARTMENT.
On the 2d of November last, I reviewed the fighting fleet of battleships
and other vessels assembled in New York Harbor, consisting of 24
battleships, 2 armored cruisers, 2 cruisers, 22 destroyers, 12 torpedo
boats, 8 submarines, and other attendant vessels, making 98 vessels of all
classes, of a tonnage Of 576,634 tons. Those who saw the fleet were struck
with its preparedness and with its high military efficiency. All Americans
should be proud of its personnel.
The fleet was deficient in the number of torpedo destroyers, in cruisers,
and in colliers, as well as in large battleship cruisers, which are now
becoming a very important feature of foreign navies, notably the British,
German, and Japanese.
The building plan for this year contemplates two battleships and two
colliers. This is because the other and smaller vessels can be built much
more rapidly in case of emergency than the battleships, and we certainly
ought to continue the policy of two battleships a year until after the
Panama Canal is finished and until in our first line and in our reserve
line we can number 40 available vessels of proper armament and size.
The reorganization of the Navy and the appointment of four aids to the
Secretary have continued to demonstrate their usefulness. It would be
difficult now to administer the affairs of the Navy without the expert
counsel and advice of these aids, and I renew the recommendation which I
made last year, that the aids be recognized by statute.
It is certain that the Navy, with its present size, should have admirals in
active command higher than rear admirals. The recognized grades in order
are: Admiral of the fleet, admiral, vice admiral, and rear admiral. Our
great battleship fleet is commanded by a rear admiral, with four other rear
admirals under his orders. This is not as it should be, and when questions
of precedence arise between our naval officers and those of European
navies, the American rear admiral, though in command of ten times the force
of a foreign vice admiral, must yield precedence to the latter. Such an
absurdity ought not to prevail, and it can be avoided by the creation of
two or three positions of flag rank above that of rear admiral.
I attended the opening of the new training school at North Chicago, Ill.,
and am glad to note the opportunity which this gives for drawing upon young
men of the country from the interior, from farms, stores, shops, and
offices, which insures a high average of intelligence and character among
them, and which they showed in the very wonderful improvement in discipline
and drill which only a few short weeks' presence at the naval station had
made.
I invite your attention to the consideration of the new system of detention
and of punishment for Army and Navy enlisted men which has obtained in
Great Britain, and which has made greatly for the better control of the.
men. We should adopt a similar system here.
Like the Treasury Department and the War Department, the Navy Department
has given much attention to economy in administration, and has cut down a
number of unnecessary expenses and reduced its estimates except for
construction and the increase that that involves.
I urge upon Congress the necessity for an immediate increase of 2,000 men
in the enlisted strength of the Navy, provided for in the estimates. Four
thousand more are now needed to man all the available vessels.
There are in the service to-day about 47,750 enlisted men of all ratings.
Careful computation shows that in April, 1912, 49,166 men will be required
for vessels in commission, and 3,000 apprentice seamen should be kept under
training at all times.
ABOLITION OF NAVY YARDS.
The Secretary of the Navy has recommended the abolition of certain of the
smaller and unnecessary navy yards, and in order to furnish a complete and
comprehensive report has referred the question of all navy yards to the
joint board of the Army and Navy. This board will shortly make its report
and the Secretary of the Navy advises me that his recommendations on the
subject will be presented early in the coming year. The measure of economy
contained in a proper handling of this subject is so great and so important
to the interests of the Nation that I shall present it to Congress as a
separate subject apart from my annual message. Concentration of the
necessary work for naval vessels in a few navy yards on each coast is a
vital necessity if proper economy in Government expenditures is to be
attained.
AMALGAMATION OF STAFF CORPS IN THE NAVY.
The Secretary of the Navy is striving to unify the various corps of the
Navy to the extent possible and thereby stimulate a Navy spirit as
distinguished from a corps spirit. In this he has my warm support.
All officers are to be naval officers first and specialists afterwards.
This means that officers will take up at least one specialty, such as
ordnance, construction, or engineering. This is practically what is done
now, only some of the specialists, like the pay officers and naval
constructors, are not of the line. It is proposed to make them all of the
line.
All combatant corps should obviously be of the line. This necessitates
amalgamating the pay officers and also those engaged in the technical work
of producing the finished ship. This is at present the case with the single
exception of the naval constructors, whom it is now proposed to amalgamate
with the line.
COUNCIL OF NATIONAL DEFENSE.
I urge again upon Congress the desirability of establishing the council of
national defense. The bill to establish this council was before Congress
last winter, and it is hoped that this legislation will pass during the
present session. The purpose of the council is to determine the general
policy of national defense and to recommend to Congress and to the
President such measures relating to it as it shall deem necessary and
expedient.
No such machinery is now provided by which the readiness of the Army and
Navy may be improved and the programs of military and naval requirements
shall be coordinated and properly scrutinized with a view of the
necessities of the whole Nation rather than of separate departments.
DEPARTMENTS OF AGRICULTURE AND COMMERCE AND LABOR.
For the consideration of matters which are pending or have been disposed of
in the Agricultural Department and in the Department of Commerce and Labor,
I refer to the very excellent reports of the Secretaries of those
departments. I shall not be able to submit to Congress until after the
Christmas holidays the question of conservation of our resources arising in
Alaska and the West and the question of the rate for second-class mail
matter in the Post Office Department.
COMMISSION ON EFFICIENCY AND ECONOMY.
The law does not require the submission of the reports of the Commission on
Economy and Efficiency until the 31st of December. I shall therefore not be
able to submit a report of the work of that commission until the assembling
of Congress after the holidays.
CIVIL RETIREMENT AND CONTRIBUTORY PENSION SYSTEM.
I have already advocated, in my last annual message, the adoption of a
civil-service retirement system, with a contributory feature to it so as to
reduce to a minimum the cost to the Government of the pensions to be paid.
After considerable reflection, I am very much opposed to a pension system
that involves no contribution from the employees. I think the experience of
other governments justifies this view; but the crying necessity for some
such contributory system, with possibly a preliminary governmental outlay,
in order to cover the initial cost and to set the system going at once
while the contributions are accumulating, is manifest on every side.
Nothing will so much promote the economy and efficiency of the Government
as such a system.
ELIMINATION OF ALL LOCAL OFFICES FROM POLITICS.
I wish to renew again my recommendation that all the local offices
throughout the country, including collectors of internal revenue,
collectors of customs, postmasters of all four classes, immigration
commissioners and marshals, should be by law covered into the classified
service, the necessity for confirmation by the Senate be removed, and the
President and the others, whose time is now taken up in distributing this
patronage under the custom that has prevailed since the beginning of the
Government in accordance with the recommendation of the Senators and
Congressmen of the majority party, should be relieved from this burden. I
am confident that such a change would greatly reduce the cost of
administering the Government, and that it would add greatly to its
efficiency. It would take away the power to use the patronage of the
Government for political purposes. When officers are recommended by
Senators and Congressmen from political motives and for political services
rendered, it is impossible to expect that while in office the appointees
will not regard their tenure as more or less dependent upon continued
political service for their patrons, and no regulations, however stiff or
rigid, will prevent this, because such regulations, in view of the method
and motive for selection, are plainly inconsistent and deemed hardly worthy
of respect.
***
State of the Union Address
William H. Taft
December 3, 1912
Jump to Part II | Part III
To the Senate and House of Representatives:
The foreign relations of the United States actually and potentially affect
the state of the Union to a degree not widely realized and hardly surpassed
by any other factor in the welfare of the whole Nation. The position of the
United States in the moral, intellectual, and material relations of the
family of nations should be a matter of vital interest to every patriotic
citizen. The national prosperity and power impose upon us duties which we
can not shirk if we are to be true to our ideals. The tremendous growth of
the export trade of the United States has already made that trade a very
real factor in the industrial and commercial prosperity of the country.
With the development of our industries the foreign commerce of the United
States must rapidly become a still more essential factor in its economic
welfare. Whether we have a farseeing and wise diplomacy and are not
recklessly plunged into unnecessary wars, and whether our foreign policies
are based upon an intelligent grasp of present-day world conditions and a
clear view of the potentialities of the future, or are governed by a
temporary and timid expediency or by narrow views befitting an infant
nation, are questions in the alternative consideration of which must
convince any thoughtful citizen that no department of national polity
offers greater opportunity for promoting the interests of the whole people
on the one hand, or greater chance on the other of permanent national
injury, than that which deals with the foreign relations of the United
States.
The fundamental foreign policies of the United States should be raised high
above the conflict of partisanship and wholly dissociated from differences
as to domestic policy. In its foreign affairs the United States should
present to the world a united front. The intellectual, financial, and
industrial interests of the country and the publicist, the wage earner, the
farmer, and citizen of whatever occupation must cooperate in a spirit of
high patriotism to promote that national solidarity which is indispensable
to national efficiency and to the attainment of national ideals.
The relations of the United States with all foreign powers remain upon a
sound basis of peace, harmony, and friendship. A greater insistence upon
justice to American citizens or interests wherever it may have been denied
and a stronger emphasis of the need of mutuality in commercial and other
relations have only served to strengthen our friendships with foreign
countries by placing those friendships upon a firm foundation of realities
as well as aspirations.
Before briefly reviewing the more important events of the last year in our
foreign relations, which it is my duty to do as charged with their conduct
and because diplomatic affairs are not of a nature to make it appropriate
that the Secretary of State make a formal annual report, I desire to touch
upon some of the essentials to the safe management of the foreign relations
of the United States and to endeavor, also, to define clearly certain
concrete policies which are the logical modern corollaries of the
undisputed and traditional fundamentals of the foreign policy of the United
States.
REORGANIZATION OF THE STATE DEPARTMENT
At the beginning of the present administration the United States, having
fully entered upon its position as a world power, with the responsibilities
thrust upon it by the results of the Spanish-American War, and already
engaged in laying the groundwork of a vast foreign trade upon which it
should one day become more and more dependent, found itself without the
machinery for giving thorough attention to, and taking effective action
upon, a mass of intricate business vital to American interests in every
country in the world.
The Department of State was an archaic and inadequate machine lacking most
of the attributes of the foreign office of any great modern power. With an
appropriation made upon my recommendation by the Congress on August 5,
1909, the Department of State was completely reorganized. There were
created Divisions of Latin American Affairs and of Far Eastern, Near
Eastern, and Western European Affairs. To these divisions were called from
the foreign service diplomatic and consular officers possessing experience
and knowledge gained by actual service in different parts of the world and
thus familiar with political and commercial conditions in the regions
concerned. The work was highly specialized. The result is that where
previously this Government from time to time would emphasize in its foreign
relations one or another policy, now American interests in every quarter of
the globe are being cultivated with equal assiduity. This principle of
politico-geographical division possesses also the good feature of making
possible rotation between the officers of the departmental, the diplomatic,
and the consular branches of the foreign service, and thus keeps the whole
diplomatic and consular establishments tinder the Department of State in
close touch and equally inspired with the aims and policy of the
Government. Through the newly created Division of Information the foreign
service is kept fully informed of what transpires from day to day in the
international relations of the country, and contemporary foreign comment
affecting American interests is promptly brought to the attention of the
department. The law offices of the department were greatly strengthened.
There were added foreign trade advisers to cooperate with the diplomatic and
consular bureaus and the politico-geographical divisions in the innumerable
matters where commercial diplomacy or consular work calls for such special
knowledge. The same officers, together with the rest of the new
organization, are able at all times to give to American citizens accurate
information as to conditions in foreign countries with which they have
business and likewise to cooperate more effectively with the Congress and
also with the other executive departments.
MERIT SYSTEM IN CONSULAR AND DIPLOMATIC CORPS
Expert knowledge and professional training must evidently be the essence of
this reorganization. Without a trained foreign service there would not be
men available for the work in the reorganized Department of State.
President Cleveland had taken the first step toward introducing the merit
system in the foreign service. That had been followed by the application of
the merit principle, with excellent results, to the entire consular branch.
Almost nothing, however, had been done in this direction with regard to the
Diplomatic Service. In this age of commercial diplomacy it was evidently of
the first importance to train an adequate personnel in that branch of the
service. Therefore, on November 26, 1909, by an Executive order I placed
the Diplomatic Service up to the grade of secretary of embassy, inclusive,
upon exactly the same strict nonpartisan basis of the merit system, rigid
examination for appointment and promotion only for efficiency, as had been
maintained without exception in the Consular Service.
STATISTICS AS TO MERIT AND NONPARTISAN CHARACTER OF APPOINTMENTS
How faithful to the merit system and how nonpartisan has been the conduct
of the Diplomatic and Consular Services in the last four years may be
judged from the following: Three ambassadors now serving held their present
rank at the beginning of my administration. Of the ten ambassadors whom I
have appointed, five were by promotion from the rank of minister. Nine
ministers now serving held their present rank at the beginning of my
administration. Of the thirty ministers whom I have appointed, eleven were
promoted from the lower grades of the foreign service or from the
Department of State. Of the nineteen missions in Latin America, where our
relations are close and our interest is great, fifteen chiefs of mission
are service men, three having entered the service during this
administration. Thirty-seven secretaries of embassy or legation who have
received their initial appointments after passing successfully the required
examination were chosen for ascertained fitness, without regard to
political affiliations. A dearth of candidates from Southern and Western
States has alone made it impossible thus far completely to equalize all the
States' representations in the foreign service. In the effort to equalize
the representation of the various States in the Consular Service I have
made sixteen of the twenty-nine new appointments as consul which have
occurred during my administration from the Southern States. This is 55 per
cent. Every other consular appointment made, including the promotion of
eleven young men from the consular assistant and student interpreter corps,
has been by promotion or transfer, based solely upon efficiency shown in
the service.
In order to assure to the business and other interests of the United States
a continuance of the resulting benefits of this reform, I earnestly renew
my previous recommendations of legislation making it permanent along some
such lines as those of the measure now Pending in Congress.
LARGER PROVISION FOR EMBASSIES AND LEGATIONS AND FOR OTHER EXPENSES OF OUR
FOREIGN REPRESENTATIVES RECOMMENDED
In connection with legislation for the amelioration of the foreign service,
I wish to invite attention to the advisability of placing the salary
appropriations upon a better basis. I believe that the best results would
be obtained by a moderate scale of salaries, with adequate funds for the
expense of proper representation, based in each case upon the scale and
cost of living at each post, controlled by a system of accounting, and
under the general direction of the Department of State.
In line with the object which I have sought of placing our foreign service
on a basis of permanency, I have at various times advocated provision by
Congress for the acquisition of Government-owned buildings for the
residence and offices of our diplomatic officers, so as to place them more
nearly on an equality with similar officers of other nations and to do away
with the discrimination which otherwise must necessarily be made, in some
cases, in favor of men having large private fortunes. The act of Congress
which I approved on February 17, 1911, was a right step in this direction.
The Secretary of State has already made the limited recommendations
permitted by the act for any one year, and it is my hope that the bill
introduced in the House of Representatives to carry out these
recommendations will be favorably acted on by the Congress during its
present session.
In some Latin-American countries the expense of government-owned legations
will be less than elsewhere, and it is certainly very urgent that in such
countries as some of the Republics of Central America and the Caribbean,
where it is peculiarly difficult to rent suitable quarters, the
representatives of the United States should be justly and adequately
provided with dignified and suitable official residences. Indeed, it is
high time that the dignity and power of this great Nation should be
fittingly signalized by proper buildings for the occupancy of the Nation's
representatives everywhere abroad.
DIPLOMACY A HAND MAID OF COMMERCIAL INTERCOURSE AND PEACE
The diplomacy of the present administration has sought to respond to modern
ideas of commercial intercourse. This policy has been characterized as
substituting dollars for bullets. It is one that appeals alike to
idealistic humanitarian sentiments, to the dictates of sound policy and
strategy, and to legitimate commercial aims. It I is an effort frankly
directed to the increase of American trade upon the axiomatic principle
that the Government of the United States shall extend all proper support to
every legitimate and beneficial American enterprise abroad. How great have
been the results of this diplomacy, coupled with the maximum and minimum
provision of the tariff law, will be seen by some consideration of the
wonderful increase in the export trade of the United States. Because
modern diplomacy is commercial, there has been a disposition in some
quarters to attribute to it none but materialistic aims. How strikingly
erroneous is such an impression may be seen from a study of the results by
which the diplomacy of the United States can be judged.
SUCCESSFUL EFFORTS IN PROMOTION OF PEACE
In the field of work toward the ideals of peace this Government negotiated,
but to my regret was unable to consummate, two arbitration treaties which
set the highest mark of the aspiration of nations toward the substitution
of arbitration and reason for war in the settlement of international
disputes. Through the efforts of American diplomacy several wars have been
prevented or ended. I refer to the successful tripartite mediation of the
Argentine Republic, Brazil, and the United States between Peru and Ecuador;
the bringing of the boundary dispute between Panama and Costa Rica to
peaceful arbitration; the staying of warlike preparations when Haiti and
the Dominican Republic were on the verge of hostilities; the stopping of a
war in Nicaragua; the halting of internecine strife in Honduras. The
Government of the United States was thanked for its influence toward the
restoration of amicable relations between the Argentine Republic and
Bolivia. The diplomacy of the United States is active in seeking to assuage
the remaining ill-feeling between this country and the Republic of
Colombia. In the recent civil war in China the United States successfully
joined with the other interested powers in urging an early cessation of
hostilities. An agreement has been reached between the Governments of Chile
and Peru whereby the celebrated Tacna-Arica dispute, which has so long
embittered international relations on the west coast of South America, has
at last been adjusted. Simultaneously came the news that the boundary
dispute between Peru and Ecuador had entered upon a stage of amicable
settlement. The position of the United States in reference to the
Tacna-Arica dispute between Chile and Peru has been one of nonintervention,
but one of friendly influence and pacific counsel throughout the period
during which the dispute in question has been the subject of interchange of
views between this Government and the two Governments immediately
concerned. In the general easing of international tension on the west coast
of South America the tripartite mediation, to which I have referred, has
been a most potent and beneficent factor.
CHINA
In China the policy of encouraging financial investment to enable that
country to help itself has had the result of giving new life and practical
application to the open-door policy. The consistent purpose of the present
administration has been to encourage the use of American capital in the
development of China by the promotion of those essential reforms to which
China is pledged by treaties with the United States and other powers. The
hypothecation to foreign bankers in connection with certain industrial
enterprises, such as the Hukuang railways, of the national revenues upon
which these reforms depended, led the Department of State early in the
administration to demand for American citizens participation in such
enterprises, in order that the United States might have equal rights and an
equal voice in all questions pertaining to the disposition of the public
revenues concerned. The same policy of promoting international accord among
the powers having similar treaty rights as ourselves in the matters of
reform, which could not be put into practical effect without the common
consent of all, was likewise adopted in the case of the loan desired by
China for the reform of its currency. The principle of international
cooperation in matters of common interest upon which our policy had already
been based in all of the above instances has admittedly been a great factor
in that concert of the powers which has been so happily conspicuous during
the perilous period of transition through which the great Chinese nation
has been passing.
CENTRAL AMERICA NEEDS OUR HELP IN DEBT ADJUSTMENT
In Central America the aim has been to help such countries as Nicaragua and
Honduras to help themselves. They are the immediate beneficiaries. The
national benefit to the United States is twofold. First, it is obvious
that the Monroe doctrine is more vital in the neighborhood of the Panama
Canal and the zone of the Caribbean than anywhere else. There, too, the
maintenance of that doctrine falls most heavily upon the United States. It
is therefore essential that the countries within that sphere shall be
removed from the jeopardy involved by heavy foreign debt and chaotic
national finances and from the ever-present danger of international
complications due to disorder at home. Hence the United States has been
glad to encourage and support American bankers who were willing to lend a
helping hand to the financial rehabilitation of such countries because this
financial rehabilitation and the protection of their customhouses from
being the prey of would be dictators would remove at one stroke the menace
of foreign creditors and the menace of revolutionary disorder.
The second advantage of the United States is one affecting chiefly all the
southern and Gulf ports and the business and industry of the South. The
Republics of Central America and the Caribbean possess great natural
wealth. They need only a measure of stability and the means of financial
regeneration to enter upon an era of peace and prosperity, bringing profit
and happiness to themselves and at the same time creating conditions sure
to lead to a flourishing interchange of trade with this country.
I wish to call your especial attention to the recent occurrences in
Nicaragua, for I believe the terrible events recorded there during the
revolution of the past summer-the useless loss of life, the devastation of
property, the bombardment of defenseless cities, the killing and wounding
of women and children, the torturing of noncombatants to exact
contributions, and the suffering of thousands of human beings-might have
been averted had the Department of State, through approval of the loan
convention by the Senate, been permitted to carry out its now
well-developed policy of encouraging the extending of financial aid to weak
Central American States with the primary objects of avoiding just such
revolutions by assisting those Republics to rehabilitate their finances, to
establish their currency on a stable basis, to remove the customhouses from
the danger of revolutions by arranging for their secure administration, and
to establish reliable banks.
During this last revolution in Nicaragua, the Government of that Republic
having admitted its inability to protect American life and property against
acts of sheer lawlessness on the part of the malcontents, and having
requested this Government to assume that office, it became necessary to
land over 2,000 marines and bluejackets in Nicaragua. Owing to their
presence the constituted Government of Nicaragua was free to devote its
attention wholly to its internal troubles, and was thus enabled to stamp
out the rebellion in a short space of time. When the Red Cross supplies
sent to Granada had been exhausted, 8,000 persons having been given food in
one day upon the arrival of the American forces, our men supplied other
unfortunate, needy Nicaraguans from their own haversacks. I wish to
congratulate the officers and men of the United States navy and Marine
Corps who took part in reestablishing order in Nicaragua upon their
splendid conduct, and to record with sorrow the death of seven American
marines and bluejackets. Since the reestablishment of peace and order,
elections have been held amid conditions of quiet and tranquility. Nearly
all the American marines have now been withdrawn. The country should soon
be on the road to recovery. The only apparent danger now threatening
Nicaragua arises from the shortage of funds. Although American bankers have
already rendered assistance, they may naturally be loath to advance a loan
adequate to set the country upon its feet without the support of some such
convention as that of June, 1911, upon which the Senate has not yet acted.
ENFORCEMENT OF NEUTRALITY LAWS
In the general effort to contribute to the enjoyment of peace by those
Republics which are near neighbors of the United States, the administration
has enforced the so-called neutrality statutes with a new vigor, and those
statutes were greatly strengthened in restricting the exportation of arms
and munitions by the joint resolution of last March. It is still a
regrettable fact that certain American ports are made the rendezvous of
professional revolutionists and others engaged in intrigue against the
peace of those Republics. It must be admitted that occasionally a
revolution in this region is justified as a real popular movement to throw
off the shackles of a vicious and tyrannical government. Such was the
Nicaraguan revolution against the Zelaya regime. A nation enjoying our
liberal institutions can not escape sympathy with a true popular movement,
and one so well justified. In very many cases, however, revolutions in the
Republics in question have no basis in principle, but are due merely to the
machinations of conscienceless and ambitious men, and have no effect but to
bring new suffering and fresh burdens to an already oppressed people. The
question whether the use of American ports as foci of revolutionary
intrigue can be best dealt with by a further amendment to the neutrality
statutes or whether it would be safer to deal with special cases by special
laws is one worthy of the careful consideration of the Congress.
VISIT OF SECRETARY KNOX TO CENTRAL AMERICA AND THE CARIBBEAN
Impressed with the particular importance of the relations between the
United States and the Republics of Central America and the Caribbean
region, which of necessity must become still more intimate by reason of the
mutual advantages which will be presented by the opening of the Panama
Canal, I directed the Secretary of State last February to visit these
Republics for the purpose of giving evidence of the sincere friendship and
good will which the Government and people of the United States bear toward
them. Ten Republics were visited. Everywhere he was received with a
cordiality of welcome and a generosity of hospitality such as to impress me
deeply and to merit our warmest thanks. The appreciation of the Governments
and people of the countries visited, which has been appropriately shown in
various ways, leaves me no doubt that his visit will conduce to that closer
union and better understanding between the United States and those
Republics which I have had it much at heart to promote.
OUR MEXICAN POLICY
For two years revolution and counter-revolution has distraught the
neighboring Republic of Mexico. Brigandage has involved a great deal of
depredation upon foreign interests. There have constantly recurred
questions of extreme delicacy. On several occasions very difficult
situations have arisen on our frontier. Throughout this trying period, the
policy of the United States has been one of patient nonintervention,
steadfast recognition of constituted authority in the neighboring nation,
and the exertion of every effort to care for American interests. I
profoundly hope that the Mexican nation may soon resume the path of order,
prosperity, and progress. To that nation in its sore troubles, the
sympathetic friendship of the United States has been demonstrated to a high
degree. There were in Mexico at the beginning of the revolution some thirty
or forty thousand American citizens engaged in enterprises contributing
greatly to the prosperity of that Republic and also benefiting the
important trade between the two countries. The investment of American
capital in Mexico has been estimated at $1,000,000,000. The responsibility
of endeavoring to safeguard those interests and the dangers inseparable
from propinquity to so turbulent a situation have been great, but I am
happy to have been able to adhere to the policy above outlined-a policy
which I hope may be soon justified by the complete success of the Mexican
people in regaining the blessings of peace and good order.
AGRICULTURAL CREDITS
A most important work, accomplished in the past year by the American
diplomatic officers in Europe, is the investigation of the agricultural
credit system in the European countries. Both as a means to afford relief
to the consumers of this country through a more thorough development of
agricultural resources and as a means of more sufficiently maintaining the
agricultural population, the project to establish credit facilities for the
farmers is a concern of vital importance to this Nation. No evidence of
prosperity among well-established farmers should blind us to the fact that
lack of capital is preventing a development of the Nation's agricultural
resources and an adequate increase of the land under cultivation; that
agricultural production is fast falling behind the increase in population;
and that, in fact, although these well-established farmers are maintained
in increasing prosperity because of the natural increase in population, we
are not developing the industry of agriculture. We are not breeding in
proportionate numbers a race of independent and independence-loving
landowners, for a lack of which no growth of cities can compensate. Our
farmers have been our mainstay in times of crisis, and in future it must
still largely be upon their stability and common sense that this democracy
must rely to conserve its principles of self-government.
The need of capital which American farmers feel to-day had been experienced
by the farmers of Europe, with their centuries-old farms, many years ago.
The problem had been successfully solved in the Old World and it was
evident that the farmers of this country might profit by a study of their
systems. I therefore ordered, through the Department of State, an
investigation to be made by the diplomatic officers in Europe, and I have
laid the results of this investigation before the governors of the various
States with the hope that they will be used to advantage in their
forthcoming meeting.
INCREASE OF FOREIGN TRADE
In my last annual message I said that the fiscal year ended June 30, 1911,
was noteworthy as marking the highest record of exports of American
products to foreign countries. The fiscal year 1912 shows that this rate of
advance has been maintained, the total domestic exports having a valuation
approximately Of $2,200,000,000, as compared with a fraction over
$2,000,000,000 the previous year. It is also significant that manufactured
and partly manufactured articles continue to be the chief commodities
forming the volume of our augmented exports, the demands of our own people
for consumption requiring that an increasing proportion of our abundant
agricultural products be kept at home. In the fiscal year 1911 the exports
of articles in the various stages of manufacture, not including foodstuffs
partly or wholly manufactured, amounted approximately to $907,500,000. In
the fiscal year 1912 the total was nearly $1,022,000,000, a gain Of
$114,000,000.
ADVANTAGE OF MAXIMUM AND MINIMUM TARIFF PROVISION
The importance which our manufactures have assumed in the commerce of the
world in competition with the manufactures of other countries again draws
attention to the duty of this Government to use its utmost endeavors to
secure impartial treatment for American products in all markets. Healthy
commercial rivalry in international intercourse is best assured by the
possession of proper means for protecting and promoting our foreign trade.
It is natural that competitive countries should view with some concern this
steady expansion of our commerce. If in some instance the measures taken by
them to meet it are not entirely equitable, a remedy should be found. In
former messages I have described the negotiations of the Department of
State with foreign Governments for the adjustment of the maximum and
minimum tariff as provided in section 2 of the tariff law of 1909. The
advantages secured by the adjustment of our trade relations under this law
have continued during the last year, and some additional cases of
discriminatory treatment of which we had reason to complain have been
removed. The Department of State has for the first time in the history of
this country obtained substantial most-favored-nation treatment from all
the countries of the world. There are, however, other instances which,
while apparently not constituting undue discrimination in the sense of
section 2, are nevertheless exceptions to the complete equity of tariff
treatment for American products that the Department of State consistently
has sought to obtain for American commerce abroad.
NECESSITY FOR SUPPLEMENTARY LEGISLATION
These developments confirm the opinion conveyed to you in my annual message
of 1911, that while the maximum and minimum provision of the tariff law of
1909 has been fully justified by the success achieved in removing
previously existing undue discriminations against American products, yet
experience has shown that this feature of the law should be amended in such
way as to provide a fully effective means of meeting the varying degrees of
discriminatory treatment of American commerce in foreign countries still
encountered, as well as to protect against injurious treatment on the part
of foreign Governments, through either legislative or administrative
measures, the financial interests abroad of American citizens whose
enterprises enlarge the market for American commodities.
I can not too strongly recommend to the Congress the passage of some such
enabling measure as the bill which was recommended by the Secretary of
State in his letter of December 13, 1911. The object of the proposed
legislation is, in brief, to enable the Executive to apply, as the case may
require, to any or all commodities, whether or not on the free list from a
country which discriminates against the United States, a graduated scale of
duties up to the maximum Of 25 per cent ad valorem provided in the present
law. Flat tariffs are out of date. Nations no longer accord equal tariff
treatment to all other nations irrespective of the treatment from them
received. Such a flexible power at the command of the Executive would
serve to moderate any unfavorable tendencies on the part of those countries
from which the importations into the United States are substantially
confined to articles on the free list as well as of the countries which
find a lucrative market in the United States for their products under
existing customs rates. It is very necessary that the American Government
should be equipped with weapons of negotiation adapted to modern economic
conditions, in order that we may at all times be in a position to gain not
only technically just but actually equitable treatment for our trade, and
also for American enterprise and vested interests abroad.
BUSINESS SECURED TO OUR COUNTRY BY DIRECT OFFICIAL EFFORT
As illustrating the commercial benefits of the Nation derived from the new
diplomacy and its effectiveness upon the material as well as the more ideal
side, it may be remarked that through direct official efforts alone there
have been obtained in the course of this administration, contracts from
foreign Governments involving an expenditure of $50,000,000 in the
factories of the United States. Consideration of this fact and some
reflection upon the necessary effects of a scientific tariff system and a
foreign service alert and equipped to cooperate with the business men of
America carry the conviction that the gratifying increase in the export
trade of this country is, in substantial amount, due to our improved
governmental methods of protecting and stimulating it. It is germane to
these observations to remark that in the two years that have elapsed since
the successful negotiation of our new treaty with Japan, which at the time
seemed to present so many practical difficulties, our export trade to that
country has increased at the rate of over $1,000,000 a month. Our exports
to Japan for the year ended June 30, 1910, were $21,959,310, while for the
year ended June 30, 1912, the exports were $53,478,046, a net increase in
the sale of American products of nearly 150 per cent.
SPECIAL CLAIMS ARBITRATION WITH GREAT BRITAIN
Under the special agreement entered into between the United States and
Great Britain on August 18, 1910, for the arbitration of outstanding
pecuniary claims, a schedule of claims and the terms of submission have
been agreed upon by the two Governments, and together with the special
agreement were approved by the Senate on July 19, 1911, but in accordance
with the terms of the agreement they did not go into effect until confirmed
by the two Governments by an exchange of notes, which was done on April 26
last. Negotiations, are still in progress for a supplemental schedule of
claims to be submitted to arbitration under this agreement, and meanwhile
the necessary preparations for the arbitration of the claims included in
the first schedule have been undertaken and are being carried on under the
authority of an appropriation made for that purpose at the last session of
Congress. It is anticipated that the two Governments will be prepared to
call upon the arbitration tribunal, established under this agreement, to
meet at Washington early next year to proceed with this arbitration.
FUR SEAL TREATY AND NEED FOR AMENDMENT OF OUR STATUTE
The act adopted at the last session of Congress to give effect to the
fur-seal convention Of July 7, 1911, between Great Britain, Japan, Russia,
and the United States provided for the suspension of all land killing of
seals on the Pribilof Islands for a period of five years, and an objection
has now been presented to this provision by the other parties in interest,
which raises the issue as to whether or not this prohibition of land
killing is inconsistent with the spirit, if not the letter, of the treaty
stipulations. The justification of establishing this close season depends,
under the terms of the convention, upon how far, if at all, it is necessary
for protecting and preserving the American fur-seal herd and for increasing
its number. This is a question requiring examination of the present
condition of the herd and the treatment which it needs in the light of
actual experience and scientific investigation. A careful examination of
the subject is now being made, and this Government will soon be in
possession of a considerable amount of new information about the American
seal herd, which has been secured during the past season and will be of
great value in determining this question; and if it should appear that
there is any uncertainty as to the real necessity for imposing a close
season at this time I shall take an early opportunity to address a special
message to Congress on this subject, in the belief that this Government
should yield on this point rather than give the slightest ground for the
charge that we have been in any way remiss in observing our treaty
obligations.
FINAL SETTLEMENT OF NORTH ATLANTIC FISHERIES DISPUTE
On the 20th of July last an agreement was concluded between the United
States and Great Britain adopting, with certain modifications, the rules
and method of procedure recommended in the award rendered by the North
Atlantic Coast Fisheries Arbitration Tribunal on September 7, 1910, for the
settlement hereafter, in accordance with the principles laid down in the
award, of questions arising with reference to the exercise of the American
fishing liberties under Article I of the treaty of October 20, 1818,
between the United States and Great Britain. This agreement received the
approval of the Senate on August I and was formally ratified by the two
Governments on November 15 last. The rules and a method of procedure
embodied in the award provided for determining by an impartial tribunal the
reasonableness of any new fishery regulations on the treaty coasts of
Newfoundland and Canada before such regulations could be enforced against
American fishermen exercising their treaty liberties on those coasts, and
also for determining the delimitation of bays on such coasts more than 10
miles wide, in accordance with the definition adopted by the tribunal of
the meaning of the word "bays" as used in the treaty. In the subsequent
negotiations between the two Governments, undertaken for the purpose of
giving practical effect to these rules and methods of procedure, it was
found that certain modifications therein were desirable from the point of
view of both Governments, and these negotiations have finally resulted in
the agreement above mentioned by which the award recommendations as
modified by mutual consent of the two Governments are finally adopted and
made effective, thus bringing this century-old controversy to a final
conclusion, which is equally beneficial and satisfactory to both
Governments.
IMPERIAL VALLEY AND MEXICO
In order to make possible the more effective performance of the work
necessary for the confinement in their present channel of the waters of the
lower Colorado River, and thus to protect the people of the Imperial
Valley, as well as in order to reach with the Government of Mexico an
understanding regarding the distribution of the waters of the Colorado
River, in which both Governments are much interested, negotiations are
going forward with a view to the establishment of a preliminary Colorado
River commission, which shall have the powers necessary to enable it to do
the needful work and with authority to study the question of the equitable
distribution of the waters. There is every reason to believe that an
understanding upon this point will be reached and that an agreement will be
signed in the near future.
CHAMIZAL DISPUTE
In the interest of the people and city of El Paso this Government has been
assiduous in its efforts to bring to an early settlement the long-standing
Chamizal dispute with Mexico. Much has been accomplished, and while the
final solution of the dispute is not immediate, the favorable attitude
lately assumed by the Mexican Government encourages the hope that this
troublesome question will be satisfactorily and definitively settled at an
early day.
INTERNATIONAL COMMISSION OF JURISTS
In pursuance of the convention of August 23, 1906, signed at the Third Pan
American Conference, held at Rio de Janeiro, the International Commission
of jurists met at that capital during the month of last June. At this
meeting 16 American Republics were represented, including the United
States, and comprehensive plans for the future work of the commission were
adopted. At the next meeting fixed for June, 1914, committees already
appointed are instructed to I report regarding topics assigned to them.
OPIUM CONFERENCE-UNFORTUNATE FAILURE OF OUR GOVERNMENT TO ENACT RECOMMENDED
LEGISLATION
In my message on foreign relations communicated to the two Houses of
Congress December 7, 1911, I called especial attention to the assembling of
the Opium Conference at The Hague, to the fact that that conference was to
review all pertinent municipal laws relating to the opium and allied evils,
and certainly all international rules regarding these evils, and to the
-fact that it seemed to me most essential that the Congress should take
immediate action on the anti-narcotic legislation before the Congress, to
which I had previously called attention by a special message.
The international convention adopted by the conference conforms almost
entirely to the principles contained in the proposed anti-narcotic
legislation which has been before the last two Congresses. It was most
unfortunate that this Government, having taken the initiative in the
international action which eventuated in the important international opium
convention, failed to do its share in the great work by neglecting to pass
the necessary legislation to correct the deplorable narcotic evils in the
United States as well as to redeem international pledges upon which it
entered by virtue of the above-mentioned convention. The Congress at its
present session should enact into law those bills now before it which have
been so carefully drawn up in collaboration between the Department of State
and the other executive departments, and which have behind them not only
the moral sentiment of the country, but the practical support of all the
legitimate trade interests likely to be affected. Since the international
convention was signed, adherence to it has been made by several European
States not represented at the conference at The Hague and also by seventeen
Latin-American Republics.
EUROPE AND THE NEAR EAST
The war between Italy and Turkey came to a close in October last by the
signature of a treaty of peace, subsequently to which the Ottoman Empire
renounced sovereignty over Cyrenaica and Tripolitania in favor of Italy.
During the past year the Near East has unfortunately been the theater of
constant hostilities. Almost simultaneously with the conclusion of peace
between Italy and Turkey and their arrival at an adjustment of the complex
questions at issue between them, war broke out between Turkey on the one
hand and Bulgaria, Greece, Montenegro, and Servia on the other. The United
States has happily been involved neither directly nor indirectly with the
causes or questions incident to any of these hostilities and has maintained
in regard to them an attitude of absolute neutrality and of complete
political disinterestedness. In the second war in which the Ottoman Empire
has been engaged the loss of life and the consequent distress on both sides
have been appalling, and the United States has found occasion, in the
interest of humanity, to carry out the charitable desires of the American
people, to extend a measure of relief to the sufferers on either side
through the impartial medium of the Red Cross. Beyond this the chief care
of the Government of the United States has been to make due provision for
the protection of its national resident in belligerent territory. In the
exercise of my duty in this matter I have dispatched to Turkish waters a
special-service squadron, consisting of two armored cruisers, in order that
this Government may if need be bear its part in such measures as it may be
necessary for the interested nations to adopt for the safeguarding of
foreign lives and property in the Ottoman Empire in the event that a
dangerous situation should develop. In the meanwhile the several interested
European powers have promised to extend to American citizens the benefit of
such precautionary or protective measures as they might adopt, in the same
manner in which it has been the practice of this Government to extend its
protection to all foreign residents in those countries of the Western
Hemisphere in which it has from time to time been the task of the United
States to act in the interest of peace and good order. The early appearance
of a large fleet of European warships in the Bosphorus apparently assured
the protection of foreigners in that quarter, where the presence of the
American stationnaire the U. S. S. Scorpion sufficed, tinder the
circumstances, to represent the United States. Our cruisers were thus left
free to act if need be along the Mediterranean coasts should any unexpected
contingency arise affecting the numerous American interests in the
neighborhood of Smyrna and Beirut.
SPITZBERGEN
The great preponderance of American material interests in the sub-arctic
island of Spitzbergen, which has always been regarded politically as "no
man's land," impels this Government to a continued and lively interest in
the international dispositions to be made for the political governance and
administration of that region. The conflict of certain claims of American
citizens and others is in a fair way to adjustment, while the settlement of
matters of administration, whether by international conference of the
interested powers or otherwise, continues to be the subject of exchange of
views between the Governments concerned.
LIBERIA
As a result of the efforts of this Government to place the Government of
Liberia in position to pay its outstanding indebtedness and to maintain a
stable and efficient government, negotiations for a loan of $1,700,000 have
been successfully concluded, and it is anticipated that the payment of the
old loan and the issuance of the bonds of the 1912 loan for the
rehabilitation of the finances of Liberia will follow at an early date,
when the new receivership will go into active operation. The new
receivership will consist of a general receiver of customs designated by
the Government of the United States and three receivers of customs
designated by the Governments of Germany, France, and Great Britain, which
countries have commercial interests in the Republic of Liberia.
In carrying out the understanding between the Government of Liberia and
that of the United States, and in fulfilling the terms of the agreement
between the former Government and the American bankers, three competent
ex-army officers are now effectively employed by the Liberian Government in
reorganizing the police force of the Republic, not only to keep in order
the native tribes in the hinterland but to serve as a necessary police
force along the frontier. It is hoped that these measures will assure not
only the continued existence but the prosperity and welfare of the Republic
of Liberia. Liberia possesses fertility of soil and natural resources,
which should insure to its people a reasonable prosperity. It was the duty
of the United States to assist the Republic of Liberia in accordance with
our historical interest and moral guardianship of a community founded by
American citizens, as it was also the duty of the American Government to
attempt to assure permanence to a country of much sentimental and perhaps
future real interest to a large body of our citizens.
MOROCCO
The legation at Tangier is now in charge of our consul general, who is
acting as charge d'affaires, as well as caring for our commercial interests
in that country. In view of the fact that many of the foreign powers are
now represented by charges d'affaires it has not been deemed necessary to
appoint at the present time a minister to fill a vacancy occurring in that
post.
THE FAR EAST
The political disturbances in China in the autumn and winter of 1911-12
resulted in the abdication of the Manchu rulers on February 12, followed by
the formation of a provisional republican government empowered to conduct
the affairs of the nation until a permanent government might be regularly
established. The natural sympathy of the American people with the
assumption of republican principles by the Chinese people was appropriately
expressed in a concurrent resolution of Congress on April 17, 1912. A
constituent assembly, composed of representatives duly chosen by the people
of China in the elections that are now being held, has been called to meet
in January next to adopt a permanent constitution and organize the
Government of the nascent Republic. During the formative constitutional
stage and pending definite action by the assembly, as expressive of the
popular will, and the hoped-for establishment of a stable republican form
of government, capable of fulfilling its international obligations, the
United States is, according to precedent, maintaining full and friendly de
facto relations with the provisional Government.
The new condition of affairs thus created has presented many serious and
complicated problems, both of internal rehabilitation and of international
relations, whose solution it was realized would necessarily require much
time and patience. From the beginning of the upheaval last autumn it was
felt by the United States, in common with the other powers having large
interests in China, that independent action by the foreign Governments in
their own individual interests would add further confusion to a situation
already complicated. A policy of international cooperation was accordingly
adopted in an understanding, reached early in the disturbances, to act
together for the protection of the lives and property of foreigners if
menaced, to maintain an attitude of strict impartiality as between the
contending factions, and to abstain from any endeavor to influence the
Chinese in their organization of a new form of government. In view of the
seriousness of the disturbances and their general character, the American
minister at Peking was instructed at his discretion to advise our nationals
in the affected districts to concentrate at such centers as were easily
accessible to foreign troops or men of war. Nineteen of our naval vessels
were stationed at various Chinese ports, and other measures were promptly
taken for the adequate protection of American interests.
It was further mutually agreed, in the hope of hastening an end to
hostilities, that none of the interested powers would approve the making of
loans by its nationals to either side. As soon, however, as a united
provisional Government of China was assured, the United States joined in a
favorable consideration of that Government's request for advances needed
for immediate administrative necessities and later for a loan to effect a
permanent national reorganization. The interested Governments had already,
by common consent, adopted, in respect to the purposes, expenditure, and
security of any loans to China made by their nationals, certain conditions
which were held to be essential, not only to secure reasonable protection
for the foreign investors, but also to safeguard and strengthen China's
credit by discouraging indiscriminate borrowing and by insuring the
application of the funds toward the establishment of the stable and
effective government necessary to China's welfare. In June last
representative banking groups of the United States, France, Germany, Great
Britain, Japan, and Russia formulated, with the general sanction of their
respective Governments, the guaranties that would be expected in relation
to the expenditure and security of the large reorganization loan desired by
China, which, however, have thus far proved unacceptable to the provisional
Government.
SPECIAL MISSION OF CONDOLENCE TO JAPAN
In August last I accredited the Secretary of State as special ambassador to
Japan, charged with the mission of bearing to the imperial family, the
Government, and the people of that Empire the sympathetic message of the
American Commonwealth oil the sad occasion of the death of His Majesty the
Emperor Mutsuhito, whose long and benevolent reign was the greater part of
Japan's modern history. The kindly reception everywhere accorded to
Secretary Knox showed that his mission was deeply appreciated by the
Japanese nation and emphasized strongly the friendly relations that have
for so many years existed between the two peoples.
SOUTH AMERICA
Our relations with the Argentine Republic are most friendly and cordial.
So, also, are our relations with Brazil, whose Government has accepted the
invitation of the United States to send two army officers to study at the
Coast Artillery School at Fort Monroe. The long-standing Alsop claim, which
had been the only hindrance to the healthy growth of the most friendly
relations between the United States and Chile, having been eliminated
through the submission of the question to His Britannic Majesty King George
V as "amiable compositeur," it is a cause of much gratification to me that
our relations with Chile are now established upon a firm basis of growing
friendship. The Chilean Government has placed an officer of the United
States Coast Artillery in charge of the Chilean Coast Artillery School, and
has shown appreciation of American methods by confiding to an American firm
important work for the Chilean coast defenses.