Last August an insurrection broke out in Cuba which it speedily grew

evident that the existing Cuban Government was powerless to quell. This

Government was repeatedly asked by the then Cuban Government to

intervene, and finally was notified by the President of Cuba that he

intended to resign; that his decision was irrevocable; that none of the

other constitutional officers would consent to carry on the Government,

and that he was powerless to maintain order. It was evident that chaos

was impending, and there was every probability that if steps were not

immediately taken by this Government to try to restore order the

representatives of various European nations in the island would apply

to their respective governments for armed intervention in order to

protect the lives and property of their citizens. Thanks to the

preparedness of our Navy, I was able immediately to send enough ships

to Cuba to prevent the situation from becoming hopeless; and I

furthermore dispatched to Cuba the Secretary of War and the Assistant

Secretary of State, in order that they might grapple with the situation

on the ground. All efforts to secure an agreement between the

contending factions, by which they should themselves come to an

amicable understanding and settle upon some modus vivendi--some

provisional government of their own--failed. Finally the President of

the Republic resigned. The quorum of Congress assembled failed by

deliberate purpose of its members, so that there was no power to act on

his resignation, and the Government came to a halt. In accordance with

the so-called Platt amendment, which was embodied in the constitution

of Cuba, I thereupon proclaimed a provisional government for the

island, the Secretary of War acting as provisional governor until he

could be replaced by Mr. Magoon, the late minister to Panama and

governor of the Canal Zone on the Isthmus; troops were sent to support

them and to relieve the Navy, the expedition being handled with most

satisfactory speed and efficiency. The insurgent chiefs immediately

agreed that their troops should lay down their arms and disband; and

the agreement was carried out. The provisional government has left the

personnel of the old government and the old laws, so far as might be,

unchanged, and will thus administer the island for a few months until

tranquillity can be restored, a new election properly held, and a new

government inaugurated. Peace has come in the island; and the

harvesting of the sugar-cane crop, the great crop of the island, is

about to proceed.

When the election has been held and the new government inaugurated in

peaceful and orderly fashion the provisional government will come to an

end. I take this opportunity of expressing upon behalf of the American

people, with all possible solemnity, our most earnest hope that the

people of Cuba will realize the imperative need of preserving justice

and keeping order in the Island. The United States wishes nothing of

Cuba except that it shall prosper morally and materially, and wishes

nothing of the Cubans save that they shall be able to preserve order

among themselves and therefore to preserve their independence. If the

elections become a farce, and if the insurrectionary habit becomes

confirmed in the Island, it is absolutely out of the question that the

Island should continue independent; and the United States, which has

assumed the sponsorship before the civilized world for Cuba's career as

a nation, would again have to intervene and to see that the government

was managed in such orderly fashion as to secure the safety of life and

property. The path to be trodden by those who exercise self-government

is always hard, and we should have every charity and patience with the

Cubans as they tread this difficult path. I have the utmost sympathy

with, and regard for, them; but I most earnestly adjure them solemnly

to weigh their responsibilities and to see that when their new

government is started it shall run smoothly, and with freedom from

flagrant denial of right on the one hand, and from insurrectionary

disturbances on the other.

The Second International Conference of American Republics, held in

Mexico in the years 1901-2, provided for the holding of the third

conference within five years, and committed the fixing of the time and

place and the arrangements for the conference to the governing board of

the Bureau of American Republics, composed of the representatives of

all the American nations in Washington. That board discharged the duty

imposed upon it with marked fidelity and painstaking care, and upon the

courteous invitation of the United States of Brazil the conference was

held at Rio de Janeiro, continuing from the 23d of July to the 29th of

August last. Many subjects of common interest to all the American

nations were discust by the conference, and the conclusions reached,

embodied in a series of resolutions and proposed conventions, will be

laid before you upon the coming in of the final report of the American

delegates. They contain many matters of importance relating to the

extension of trade, the increase of communication, the smoothing away

of barriers to free intercourse, and the promotion of a better

knowledge and good understanding between the different countries

represented. The meetings of the conference were harmonious and the

conclusions were reached with substantial unanimity. It is interesting

to observe that in the successive conferences which have been held the

representatives of the different American nations have been learning to

work together effectively, for, while the First Conference in

Washington in 1889, and the Second Conference in Mexico in 1901-2,

occupied many months, with much time wasted in an unregulated and

fruitless discussion, the Third Conference at Rio exhibited much of the

facility in the practical dispatch of business which characterizes

permanent deliberative bodies, and completed its labors within the

period of six weeks originally allotted for its sessions.

Quite apart from the specific value of the conclusions reached by the

conference, the example of the representatives of all the American

nations engaging in harmonious and kindly consideration and discussion

of subjects of common interest is itself of great and substantial value

for the promotion of reasonable and considerate treatment of all

international questions. The thanks of this country are due to the

Government of Brazil and to the people of Rio de Janeiro for the

generous hospitality with which our delegates, in common with the

others, were received, entertained, and facilitated in their work.

Incidentally to the meeting of the conference, the Secretary of State

visited the city of Rio de Janeiro and was cordially received by the

conference, of which he was made an honorary president. The

announcement of his intention to make this visit was followed by most

courteous and urgent invitations from nearly all the countries of South

America to visit them as the guest of their Governments. It was deemed

that by the acceptance of these invitations we might appropriately

express the real respect and friendship in which we hold our sister

Republics of the southern continent, and the Secretary, accordingly,

visited Brazil, Uruguay, Argentina, Chile, Peru, Panama, and Colombia.

He refrained from visiting Paraguay, Bolivia, and Ecuador only because

the distance of their capitals from the seaboard made it impracticable

with the time at his disposal. He carried with him a message of peace

and friendship, and of strong desire for good understanding and mutual

helpfulness; and he was everywhere received in the spirit of his

message. The members of government, the press, the learned professions,

the men of business, and the great masses of the people united

everywhere in emphatic response to his friendly expressions and in

doing honor to the country and cause which he represented.

In many parts of South America there has been much misunderstanding of

the attitude and purposes of the United States towards the other

American Republics. An idea had become prevalent that our assertion of

the Monroe Doctrine implied, or carried with it, an assumption of

superiority, and of a right to exercise some kind of protectorate over

the countries to whose territory that doctrine applies. Nothing could

be farther from the truth. Yet that impression continued to be a

serious barrier to good understanding, to friendly intercourse, to the

introduction of American capital and the extension of American trade.

The impression was so widespread that apparently it could not be

reached by any ordinary means.

It was part of Secretary Root's mission to dispel this unfounded

impression, and there is just cause to believe that he has succeeded.

In an address to the Third Conference at Rio on the 31st of July--an

address of such note that I send it in, together with this message--he

said:

"We wish for no victories but those of peace; for no territory except

our own; for no sovereignty except the sovereignty over ourselves. We

deem the independence and equal rights of the smallest and weakest

member of the family of nations entitled to as much respect as those of

the greatest empire, and we deem the observance of that respect the

chief guaranty of the weak against the oppression of the strong. We

neither claim nor desire any rights or privileges or powers that we do

not freely concede to every American Republic. We wish to increase our

prosperity, to extend our trade, to grow in wealth, in wisdom, and in

spirit, but our conception of the true way to accomplish this is not to

pull down others and profit by their ruin, but to help all friends to a

common prosperity and a common growth, that we may all become greater

and stronger together. Within a few months for the first time the

recognized possessors of every foot of soil upon the American

continents can be and I hope will be represented with the acknowledged

rights of equal sovereign states in the great World Congress at The

Hague. This will be the world's formal and final acceptance of the

declaration that no part of the American continents is to be deemed

subject to colonization. Let us pledge ourselves to aid each other in

the full performance of the duty to humanity which that accepted

declaration implies, so that in time the weakest and most unfortunate

of our Republics may come to march with equal step by the side of the

stronger and more fortunate. Let us help each other to show that for

all the races of men the liberty for which we have fought and labored

is the twin sister of justice and peace. Let us unite in creating and

maintaining and making effective an all-American public opinion, whose

power shall influence international conduct and prevent international

wrong, and narrow the causes of war, and forever preserve our free

lands from the burden of such armaments as are massed behind the

frontiers of Europe, and bring us ever nearer to the perfection of

ordered liberty. So shall come security and prosperity, production and

trade, wealth, learning, the arts, and happiness for us all."

These words appear to have been received with acclaim in every part of

South America. They have my hearty approval, as I am sure they will

have yours, and I can not be wrong in the conviction that they

correctly represent the sentiments of the whole American people. I can

not better characterize the true attitude of the United States in its

assertion of the Monroe Doctrine than in the words of the distinguished

former minister of foreign affairs of Argentina, Doctor Drago, in his

speech welcoming Mr. Root at Buenos Ayres. He spoke of--

"The traditional policy of the United States (which) without

accentuating superiority or seeking preponderance, condemned the

oppression of the nations of this part of the world and the control of

their destinies by the great Powers of Europe."

It is gratifying to know that in the great city of Buenos Ayres, upon

the arches which spanned the streets, entwined with Argentine and

American flags for the reception of our representative, there were

emblazoned not' only the names of Washington and Jefferson and

Marshall, but also, in appreciative recognition of their services to

the cause of South American independence, the names of James Monroe,

John Quincy Adams, Henry Clay, and Richard Rush. We take especial

pleasure in the graceful courtesy of the Government of Brazil, which

has given to the beautiful and stately building first used for the

meeting of the conference the name of "Palacio Monroe." Our grateful

acknowledgments are due to the Governments and the people of all the

countries visited by the Secretary of State for the courtesy, the

friendship, and the honor shown to our country in their generous

hospitality to him.

In my message to you on the 5th of December, 1905, I called your

attention to the embarrassment that might be caused to this Government

by the assertion by foreign nations of the right to collect by force of

arms contract debts due by American republics to citizens of the

collecting nation, and to the danger that the process of compulsory

collection might result in the occupation of territory tending to

become permanent. I then said:

"Our own Government has always refused to enforce such contractual

obligations on behalf of its citizens by an appeal to arms. It is much

to be wisht that all foreign governments would take the same view."

This subject was one of the topics of consideration at the conference

at Rio and a resolution was adopted by that conference recommending to

the respective governments represented "to consider the advisability of

asking the Second Peace Conference at The Hague to examine the question

of the compulsory collection of public debts, and, in general, means

tending to diminish among nations conflicts of purely pecuniary

origin."

This resolution was supported by the representatives of the United

States in accordance with the following instructions:

"It has long been the established policy of the United States not to

use its armed forces for the collection of ordinary contract debts due

to its citizens by other governments. We have not considered the use of

force for such a purpose consistent with that respect for the

independent sovereignty of other members of the family of nations which

is the most important principle of international law and the chief

protection of weak nations against the oppression of the strong. It

seems to us that the practise is injurious in its general effect upon

the relations of nations and upon the welfare of weak and disordered

states, whose development ought to be encouraged in the interests of

civilization; that it offers frequent temptation to bullying and

oppression and to unnecessary and unjustifiable warfare. We regret that

other powers, whose opinions and sense of justice we esteem highly,

have at times taken a different view and have permitted themselves,

though we believe with reluctance, to collect such debts by force. It

is doubtless true that the non-payment of public debts may be

accompanied by such circumstances of fraud and wrongdoing or violation

of treaties as to justify the use of force. This Government would be

glad to see an international consideration of the subject which shall

discriminate between such cases and the simple nonperformance of a

contract with a private person, and a resolution in favor of reliance

upon peaceful means in cases of the latter class.

"It is not felt, however, that the conference at Rio should undertake

to make such a discrimination or to resolve upon such a rule. Most of

the American countries are still debtor nations, while the countries of

Europe are the creditors. If the Rio conference, therefore, were to

take such action it would have the appearance of a meeting of debtors

resolving how their creditors should act, and this would not inspire

respect. The true course is indicated by the terms of the program,

which proposes to request the Second Hague Conference, where both

creditors and debtors will be assembled, to consider the subject."

Last June trouble which had existed for some time between the Republics

of Salvador, Guatemala, and Honduras culminated in war--a war which

threatened to be ruinous to the countries involved and very destructive

to the commercial interests of Americans, Mexicans, and other

foreigners who are taking an important part in the development of these

countries. The thoroughly good understanding which exists between the

United States and Mexico enabled this Government and that of Mexico to

unite in effective mediation between the warring Republics; which

mediation resulted, not without long-continued and patient effort, in

bringing about a meeting of the representatives of the hostile powers

on board a United States warship as neutral territory, and peace was

there concluded; a peace which resulted in the saving of thousands of

lives and in the prevention of an incalculable amount of misery and the

destruction of property and of the means of livelihood. The Rio

Conference past the following resolution in reference to this action:

"That the Third International American Conference shall address to the

Presidents of the United States of America and of the United States of

Mexico a note in which the conference which is being held at Rio

expresses its satisfaction at the happy results of their mediation for

the celebration of peace between the Republics of Guatemala, Honduras,

and Salvador."

This affords an excellent example of one way in which the influence of

the United States can properly be exercised for the benefit of the

peoples of the Western Hemisphere; that is, by action taken in concert

with other American republics and therefore free from those suspicions

and prejudices which might attach if the action were taken by one

alone. In this way it is possible to exercise a powerful influence

toward the substitution of considerate action in the spirit of justice

for the insurrectionary or international violence which has hitherto

been so great a hindrance to the development of many of our neighbors.

Repeated examples of united action by several or many American

republics in favor of peace, by urging cool and reasonable, instead of

excited and belligerent, treatment of international controversies, can

not fail to promote the growth of a general public opinion among the

American nations which will elevate the standards of international

action, strengthen the sense of international duty among governments,

and tell in favor of the peace of mankind.

I have just returned from a trip to Panama and shall report to you at

length later on the whole subject of the Panama Canal.

The Algeciras Convention, which was signed by the United States as well

as by most of the powers of Europe, supersedes the previous convention

of 1880, which was also signed both by the United States and a majority

of the European powers. This treaty confers upon us equal commercial

rights with all European countries and does not entail a single

obligation of any kind upon us, and I earnestly hope it may be speedily

ratified. To refuse to ratify it would merely mean that we forfeited

our commercial rights in Morocco and would not achieve another object

of any kind. In the event of such refusal we would be left for the

first time in a hundred and twenty years without any commercial treaty

with Morocco; and this at a time when we are everywhere seeking new

markets and outlets for trade.

The destruction of the Pribilof Islands fur seals by pelagic sealing

still continues. The herd which, according to the surveys made in 1874

by direction of the Congress, numbered 4,700,000, and which, according

to the survey of both American and Canadian commissioners in 1891,

amounted to 1,000,000, has now been reduced to about 180,000. This

result has been brought about by Canadian and some other sealing

vessels killing the female seals while in the water during their annual

pilgrimage to and from the south, or in search of food. As a rule the

female seal when killed is pregnant, and also has an unweaned pup on

land, so that, for each skin taken by pelagic sealing, as a rule, three

lives are destroyed--the mother, the unborn offspring, and the nursing

pup, which is left to starve to death. No damage whatever is done to

the herd by the carefully regulated killing on land; the custom of

pelagic sealing is solely responsible for all of the present evil, and

is alike indefensible from the economic standpoint and from the

standpoint of humanity.

In 1896 over 16,000 young seals were found dead from starvation on the

Pribilof Islands. In 1897 it was estimated that since pelagic sealing

began upward of 400,000 adult female seals had been killed at sea, and

over 300,000 young seals had died of starvation as the result. The

revolting barbarity of such a practise, as well as the wasteful

destruction which it involves, needs no demonstration and is its own

condemnation. The Bering Sea Tribunal, which sat in Paris in 1893, and

which decided against the claims of the United States to exclusive

jurisdiction in the waters of Bering Sea and to a property right in the

fur seals when outside of the three-mile limit, determined also upon

certain regulations which the Tribunal considered sufficient for the

proper protection and preservation of the fur seal in, or habitually

resorting to, the Bering Sea. The Tribunal by its regulations

established a close season, from the 1st of May to the 31st of July,

and excluded all killing in the waters within 60 miles around the

Pribilof Islands. They also provided that the regulations which they

had determined upon, with a view to the protection and preservation of

the seals, should be submitted every five years to new examination, so

as to enable both interested Governments to consider whether, in the

light of past experience, there was occasion for any modification

thereof.

The regulations have proved plainly inadequate to accomplish the object

of protection and preservation of the fur seals, and for a long time

this Government has been trying in vain to secure from Great Britain

such revision and modification of the regulations as were contemplated

and provided for by the award of the Tribunal of Paris.

The process of destruction has been accelerated during recent years by

the appearance of a number of Japanese vessels engaged in pelagic

sealing. As these vessels have not been bound even by the inadequate

limitations prescribed by the Tribunal of Paris, they have paid no

attention either to the close season or to the sixty-mile limit imposed

upon the Canadians, and have prosecuted their work up to the very

islands themselves. On July 16 and 17 the crews from several Japanese

vessels made raids upon the island of St. Paul, and before they were

beaten off by the very meager and insufficiently armed guard, they

succeeded in killing several hundred seals and carrying off the skins

of most of them. Nearly all the seals killed were females and the work

was done with frightful barbarity. Many of the seals appear to have

been skinned alive and many were found half skinned and still alive.

The raids were repelled only by the use of firearms, and five of the

raiders were killed, two were wounded, and twelve captured, including

the two wounded. Those captured have since been tried and sentenced to

imprisonment. An attack of this kind had been wholly unlookt for, but

such provision of vessels, arms, and ammunition will now be made that

its repetition will not be found profitable.

Suitable representations regarding the incident have been made to the

Government of Japan, and we are assured that all practicable measures

will be taken by that country to prevent any recurrence of the outrage.

On our part, the guard on the island will be increased and better

equipped and organized, and a better revenue-cutter patrol service

about the islands will be established; next season a United States war

vessel will also be sent there.

We have not relaxed our efforts to secure an agreement with Great

Britain for adequate protection of the seal herd, and negotiations with

Japan for the same purpose are in progress.

The laws for the protection of the seals within the jurisdiction of the

United States need revision and amendment. Only the islands of St. Paul

and St. George are now, in terms, included in the Government

reservation, and the other islands are also to be included. The landing

of aliens as well as citizens upon the islands, without a permit from

the Department of Commerce and Labor, for any purpose except in case of

stress of weather or for water, should be prohibited under adequate

penalties. The approach of vessels for the excepted purposes should be

regulated. The authority of the Government agents on the islands should

be enlarged, and the chief agent should have the powers of a committing

magistrate. The entrance of a vessel into the territorial waters

surrounding the islands with intent to take seals should be made a

criminal offense and cause of forfeiture. Authority for seizures in

such cases should be given and the presence on any such vessel of seals

or sealskins, or the paraphernalia for taking them, should be made

prima facie evidence of such intent. I recommend what legislation is

needed to accomplish these ends; and I commend to your attention the

report of Mr. Sims, of the Department of Commerce and Labor, on this

subject.

In case we are compelled to abandon the hope of making arrangements

with other governments to put an end to the hideous cruelty now

incident to pelagic sealing, it will be a question for your serious

consideration how far we should continue to protect and maintain the

seal herd on land with the result of continuing such a practise, and

whether it is not better to end the practice by exterminating the herd

ourselves in the most humane way possible.

In my last message I advised you that the Emperor of Russia had taken

the initiative in bringing about a second peace conference at The

Hague. Under the guidance of Russia the arrangement of the

preliminaries for such a conference has been progressing during the

past year. Progress has necessarily been slow, owing to the great

number of countries to be consulted upon every question that has

arisen. It is a matter of satisfaction that all of the American

Republics have now, for the first time, been invited to join in the

proposed conference.

The close connection between the subjects to be taken up by the Red

Cross Conference held at Geneva last summer and the subjects which

naturally would come before The Hague Conference made it apparent that

it was desirable to have the work of the Red Cross Conference completed

and considered by the different powers before the meeting at The Hague.

The Red Cross Conference ended its labors on the 6th day of July, and

the revised and amended convention, which was signed by the American

delegates, will be promptly laid before the Senate.

By the special and highly appreciated courtesy of the Governments of

Russia and the Netherlands, a proposal to call The Hague Conference

together at a time which would conflict with the Conference of the

American Republics at Rio de Janeiro in August was laid aside. No other

date has yet been suggested. A tentative program for the conference has

been proposed by the Government of Russia, and the subjects which it

enumerates are undergoing careful examination and consideration in

preparation for the conference.

It must ever be kept in mind that war is not merely justifiable, but

imperative, upon honorable men, upon an honorable nation, where peace

can only be obtained by the sacrifice of conscientious conviction or of

national welfare. Peace is normally a great good, and normally it

coincides with righteousness; but it is righteousness and not peace

which should bind the conscience of a nation as it should bind the

conscience of an individual; and neither a nation nor an individual can

surrender conscience to another's keeping. Neither can a nation, which

is an entity, and which does not die as individuals die, refrain from

taking thought for the interest of the generations that are to come, no

less than for the interest of the generation of to-day; and no public

men have a right, whether from shortsightedness, from selfish

indifference, or from sentimentality, to sacrifice national interests

which are vital in character. A just war is in the long run far better

for a nation's soul than the most prosperous peace obtained by

acquiescence in wrong or injustice. Moreover, though it is criminal for

a nation not to prepare for war, so that it may escape the dreadful

consequences of being defeated in war, yet it must always be remembered

that even to be defeated in war may be far better than not to have

fought at all. As has been well and finely said, a beaten nation is not

necessarily a disgraced nation; but the nation or man is disgraced if

the obligation to defend right is shirked.

We should as a nation do everything in our power for the cause of

honorable peace. It is morally as indefensible for a nation to commit a

wrong upon another nation, strong or weak, as for an individual thus to

wrong his fellows. We should do all in our power to hasten the day when

there shall be peace among the nations--a peace based upon justice and

not upon cowardly submission to wrong. We can accomplish a good deal in

this direction, but we can not accomplish everything, and the penalty

of attempting to do too much would almost inevitably be to do worse

than nothing; for it must be remembered that fantastic extremists are

not in reality leaders of the causes which they espouse, but are

ordinarily those who do most to hamper the real leaders of the cause

and to damage the cause itself. As yet there is no likelihood of

establishing any kind of international power, of whatever sort, which

can effectively check wrongdoing, and in these circumstances it would

be both a foolish and an evil thing for a great and free nation to

deprive itself of the power to protect its own rights and even in

exceptional cases to stand up for the rights of others. Nothing would

more promote iniquity, nothing would further defer the reign upon earth

of peace and righteousness, than for the free and enlightened peoples

which, though with much stumbling and many shortcomings, nevertheless

strive toward justice, deliberately to render themselves powerless

while leaving every despotism and barbarism armed and able to work

their wicked will. The chance for the settlement of disputes

peacefully, by arbitration, now depends mainly upon the possession by

the nations that mean to do right of sufficient armed strength to make

their purpose effective.

The United States Navy is the surest guarantor of peace which this

country possesses. It is earnestly to be wisht that we would profit by

the teachings of history in this matter. A strong and wise people will

study its own failures no less than its triumphs, for there is wisdom

to be learned from the study of both, of the mistake as well as of the

success. For this purpose nothing could be more instructive than a

rational study of the war of 1812, as it is told, for instance, by

Captain Mahan. There was only one way in which that war could have been

avoided. If during the preceding twelve years a navy relatively as

strong as that which this country now has had been built up, and an

army provided relatively as good as that which the country now has,

there never would have been the slightest necessity of fighting the

war; and if the necessity had arisen the war would under such

circumstances have ended with our speedy and overwhelming triumph. But

our people during those twelve years refused to make any preparations

whatever, regarding either the Army or the Navy. They saved a million

or two of dollars by so doing; and in mere money paid a hundredfold for

each million they thus saved during the three years of war which

followed--a war which brought untold suffering upon our people, which

at one time threatened the gravest national disaster, and which, in

spite of the necessity of waging it, resulted merely in what was in

effect a drawn battle, while the balance of defeat and triumph was

almost even.

I do not ask that we continue to increase our Navy. I ask merely that

it be maintained at its present strength; and this can be done only if

we replace the obsolete and outworn ships by new and good ones, the

equals of any afloat in any navy. To stop building ships for one year

means that for that year the Navy goes back instead of forward. The old

battle ship Texas, for instance, would now be of little service in a

stand-up fight with a powerful adversary. The old double-turret

monitors have outworn their usefulness, while it was a waste of money

to build the modern single-turret monitors. All these ships should be

replaced by others; and this can be done by a well-settled program of

providing for the building each year of at least one first-class battle

ship equal in size and speed to any that any nation is at the same time

building; the armament presumably to consist of as large a number as

possible of very heavy guns of one caliber, together with smaller guns

to repel torpedo attack; while there should be heavy armor, turbine

engines, and in short, every modern device. Of course, from time to

time, cruisers, colliers, torpedo-boat destroyers or torpedo boats,

Will have to be built also. All this, be it remembered, would not

increase our Navy, but would merely keep it at its present strength.

Equally of course, the ships will be absolutely useless if the men

aboard them are not so trained that they can get the best possible

service out of the formidable but delicate and complicated mechanisms

intrusted to their care. The marksmanship of our men has so improved

during the last five years that I deem it within bounds to say that the

Navy is more than twice as efficient, ship for ship, as half a decade

ago. The Navy can only attain proper efficiency if enough officers and

men are provided, and if these officers and men are given the chance

(and required to take advantage of it) to stay continually at sea and

to exercise the fleets singly and above all in squadron, the exercise

to be of every kind and to include unceasing practise at the guns,

conducted under conditions that will test marksmanship in time of war.

In both the Army and the Navy there is urgent need that everything

possible should be done to maintain the highest standard for the

personnel, alike as regards the officers and the enlisted men. I do not

believe that in any service there is a finer body of enlisted men and

of junior officer than we have in both the Army and the Navy, including

the Marine Corps. All possible encouragement to the enlisted men should

be given, in pay and otherwise, and everything practicable done to

render the service attractive to men of the right type. They should be

held to the strictest discharge of their duty, and in them a spirit

should be encouraged which demands not the mere performance of duty,

but the performance of far more than duty, if it conduces to the honor

and the interest of the American nation; and in return the amplest

consideration should be theirs.

West Point and Annapolis already turn out excellent officers. We do not

need to have these schools made more scholastic. On the contrary we

should never lose sight of the fact that the aim of each school is to

turn out a man who shall be above everything else a fighting man. In

the Army in particular it is not necessary that either the cavalry or

infantry officer should have special mathematical ability. Probably in

both schools the best part of the education is the high standard of

character and of professional morale which it confers.

But in both services there is urgent need for the establishment of a

principle of selection which will eliminate men after a certain age if

they can not be promoted from the subordinate ranks, and which will

bring into the higher ranks fewer men, and these at an earlier age.

This principle of selection will be objected to by good men of mediocre

capacity, who are fitted to do well while young in the lower positions,

but who are not fitted to do well when at an advanced age they come

into positions of command and of great responsibility. But the desire

of these men to be promoted to positions which they are not competent

to fill should not weigh against the interest of the Navy and the

country. At present our men, especially in the Navy, are kept far too

long in the junior grades, and then, at much too advanced an age, are

put quickly through the senior grades, often not attaining to these

senior grades until they are too old to be of real use in them; and if

they are of real use, being put through them so quickly that little

benefit to the Navy comes from their having been in them at all.

The Navy has one great advantage over the Army in the fact that the

officers of high rank are actually trained in the continual performance

of their duties; that is, in the management of the battle ships and

armored cruisers gathered into fleets. This is not true of the army

officers, who rarely have corresponding chances to exercise command

over troops under service conditions. The conduct of the Spanish war

showed the lamentable loss of life, the useless extravagance, and the

inefficiency certain to result, if during peace the high officials of

the War and Navy Departments are praised and rewarded only if they save

money at no matter what cost to the efficiency of the service, and if

the higher officers are given no chance whatever to exercise and

practise command. For years prior to the Spanish war the Secretaries of

War were praised chiefly if they practised economy; which economy,

especially in connection with the quartermaster, commissary, and

medical departments, was directly responsible for most of the

mismanagement that occurred in the war itself--and parenthetically be

it observed that the very people who clamored for the misdirected

economy in the first place were foremost to denounce the mismanagement,

loss, and suffering which were primarily due to this same misdirected

economy and to the lack of preparation it involved. There should soon

be an increase in the number of men for our coast defenses; these men

should be of the right type and properly trained; and there should

therefore be an increase of pay for certain skilled grades, especially

in the coast artillery. Money should be appropriated to permit troops

to be massed in body and exercised in maneuvers, particularly in

marching. Such exercise during the summer just past has been of

incalculable benefit to the Army and should under no circumstances be

discontinued. If on these practise marches and in these maneuvers

elderly officers prove unable to bear the strain, they should be

retired at once, for the fact is conclusive as to their unfitness for

war; that is, for the only purpose because of which they should be

allowed to stay in the service. It is a real misfortune to have scores

of small company or regimental posts scattered throughout the country;

the Army should be gathered in a few brigade or division posts; and the

generals should be practised in handling the men in masses. Neglect to

provide for all of this means to incur the risk of future disaster and

disgrace.

The readiness and efficiency of both the Army and Navy in dealing with

the recent sudden crisis in Cuba illustrate afresh their value to the

Nation. This readiness and efficiency would have been very much less

had it not been for the existence of the General Staff in the Army and

the General Board in the Navy; both are essential to the proper

development and use of our military forces afloat and ashore. The

troops that were sent to Cuba were handled flawlessly. It was the

swiftest mobilization and dispatch of troops over sea ever accomplished

by our Government. The expedition landed completely equipped and ready

for immediate service, several of its organizations hardly remaining in

Havana over night before splitting up into detachments and going to

their several posts, It was a fine demonstration of the value and

efficiency of the General Staff. Similarly, it was owing in large part

to the General Board that the Navy was able at the outset to meet the

Cuban crisis with such instant efficiency; ship after ship appearing on

the shortest notice at any threatened point, while the Marine Corps in

particular performed indispensable service. The Army and Navy War

Colleges are of incalculable value to the two services, and they

cooperate with constantly increasing efficiency and importance.

The Congress has most wisely provided for a National Board for the

promotion of rifle practise. Excellent results have already come from

this law, but it does not go far enough. Our Regular Army is so small

that in any great war we should have to trust mainly to volunteers; and

in such event these volunteers should already know how to shoot; for if

a soldier has the fighting edge, and ability to take care of himself in

the open, his efficiency on the line of battle is almost directly

Proportionate to excellence in marksmanship. We should establish

shooting galleries in all the large public and military schools, should

maintain national target ranges in different parts of the country, and

should in every way encourage the formation of rifle clubs throughout

all parts of the land. The little Republic of Switzerland offers us an

excellent example in all matters connected with building up an

efficient citizen soldiery.

***

State of the Union Address

Theodore Roosevelt

December 3, 1907

To the Senate and House of Representatives:

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

truthfully said that the citizens of no nation possess greater energy

and industrial ability. In no nation are the fundamental business

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

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

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

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

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

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

enterprises.

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

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

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

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

and of temperament both unscrupulous and reckless, and where the

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

first without effective check from public opinion, they delude many

innocent people into making investments or embarking in kinds of

business that are really unsound. When the misdeeds of these

successfully dishonest men are discovered, suffering comes not only

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

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

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

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

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

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

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

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

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

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

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

as to the need of unflinching perseverance in the war against

successful dishonesty.

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

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

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

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

speculative folly of part of the business community would hurt the

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

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

in the permanent prosperity of the country is the high individual

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

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

wage-worker, business man or professional man.

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

closely intertwined that in the immense majority of cases a

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

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

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

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

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

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

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

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

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

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

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

exceptional business ability receives an exceptional reward for his

ability Something can be done by legislation to help the general

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

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

policy which shall inure to the advantage of all industrious and

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

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

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

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

fortunate brother to strike at the conditions under which they have

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

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

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

all go up or go down together.

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

true that where there is no governmental restraint or supervision some

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

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

fortunes amassed through corporate organization are now so large, and

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

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

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

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

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

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

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

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

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

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

recognize in cordial and ample fashion the immense good effected by

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

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

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

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

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

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

against law and justice.

"The makers of our National Constitution provided especially that the

regulation of interstate commerce should come within the sphere of the

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

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

of the enormous development of great business agencies, usually

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

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

corporations by State action. Such regulation and supervision can only

be effectively exercised by a sovereign whose jurisdiction is

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

National Government. I believe that this regulation and supervision can

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

should be by legislation, cautiously and carefully undertaken, but

resolutely persevered in, to assert the sovereignty of the National

Government by affirmative action.

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

restoration; for from the earliest time such regulation of industrial

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

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

as will prevent the Commonwealth abdicating the power it has always

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

since this country became a separate nation.

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

hitherto been of a negative or prohibitive rather than an affirmative

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

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

prohibitions confounded what should be allowed and what should not be

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

competition, whether this restraint be reasonable or unreasonable; and

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

prosecution of one device to evade the law immediately develops another

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

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

restrict competition, but such adequate supervision and regulation as

will prevent any restriction of competition from being to the detriment

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

prevent other abuses in no way connected with restriction of

competition."

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

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

Government to embody in action the principles thus expressed.

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

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

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

provide for its fullest exercise, compatible with seeing that liberty

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

kind of liberty that the lack of all effective regulation inevitably

breeds. The founders of the Constitution provided that the National

Government should have complete and sole control of interstate

commerce. There was then practically no interstate business save such

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

proceeded to regulate in thoroughgoing and effective fashion.

Conditions have now so wholly changed that the interstate commerce by

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

almost all big business concerns are now engaged in interstate

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

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

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

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

National Government can in thoroughgoing fashion exercise the needed

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

Federal authority, for such authority already exists under the

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

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

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

realizing that centralization in business has already come and can not

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

itself from certain evil effects of this business centralization by

providing better methods for the exercise of control through the

authority already centralized in the National Government by the

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

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

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

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

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

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

national incorporation act or a law licensing railway companies to

engage in interstate commerce upon certain conditions. The law should

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

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

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

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

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

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

in minute detail and to the consent of the Interstate Commerce

Commission being first obtained. Until the National Government assumes

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

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

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

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

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

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

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

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

National Interstate Commerce Commission will work in harmony with the

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

desired end.

Moreover, in my judgment there should be additional legislation looking

to the proper control of the great business concerns engaged in

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

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

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

and elsewhere, experience has definitely shown not merely the unwisdom

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

combinations. Modern industrial conditions are such that combination is

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

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

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

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

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

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

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

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

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

morality that really puts a premium upon public immorality, by

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

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

own infraction must be the condition precedent upon business success.

To aim at the accomplishment of too much usually means the

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

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

laws, I said:

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

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

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

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

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

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

prevent all combination, but to secure such rigorous and adequate

control and supervision of the combinations as to prevent their

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

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

all combinations instead of sharply discriminating between those

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

the purpose of preventing a big shipper from maintaining improper

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

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

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

incapable of full enforcement, because both judges and juries realize

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

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

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

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

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

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

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

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

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

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

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

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

case and the Joint Traffic Association case has produced no practical

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

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

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

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

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

without concerted action of the kind afforded through these

associations.

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

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

As I have elsewhere said:

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

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

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

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

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

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

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

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

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

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

corporations representing dishonest methods. Most certainly there will

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

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

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

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

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

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

these will represent money honestly expended for legitimate business

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

ask would be a check upon overcapitalization and upon the clever

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

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

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

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

There has been complaint of some of the investigations recently carried

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

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

which brought them to light. The Administration is responsible for

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

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

because no single State can by legislation effectually cope with these

powerful corporations engaged in interstate commerce, and, while doing

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

The conditions of railroad activity, the conditions of our immense

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

competent to exercise full supervision and control.

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

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

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

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

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

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

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

by these abuses becomes indiscriminate and unthinking, it also becomes

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

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

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

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

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

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

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

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

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

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

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

property values and upon public confidence, which would work

incalculable damage in the business world and would produce such

distrust of the agitators that in the revulsion the distrust would

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

remedy the evils."

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

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

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

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

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

big concerns engaged in interstate business. This should be accompanied

by provision for the compulsory publication of accounts and the

subjection of books and papers to the inspection of the Government

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

the establishment of the Bureau of Corporations.

The antitrust law should not prohibit combinations that do no injustice

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

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

abolished, there would remain as an equally objectionable feature the

difficulty and delay now incident to its enforcement. The Government

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

decision of the courts upon proceedings instituted, and even a

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

control these corporations by lawsuits means to impose upon both the

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

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

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

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

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

improper combinations, instead of waiting until they are in existence

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

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

combination to the public detriment. No corporation or association of

any kind should be permitted to engage in foreign or interstate

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

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

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

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

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

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

channels of interstate commerce against them for its protection. The

law should make its prohibitions and permissions as clear and definite

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

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

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

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

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

competition, the prevention of inflation of capital, and the

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

condition of having any trade with itself. Reasonable agreements

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

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

The Congress has the power to charter corporations to engage in

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

the provisions of which existing corporations could take out Federal

charters and new Federal corporations could be created. An essential

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

Federal board or commission whether the applicant for a Federal charter

was an association or combination within the restrictions of the

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

all matters affecting the public and complete protection to the

investing public and the shareholders in the matter of issuing

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

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

combination of the two might be tried. The supervision established

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

the antitrust act should be supplemented by specific prohibitions of

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

enabling monopolistic combinations to crush out competition. The real

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

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

denied to interstate corporations, unless on approval by the Government

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

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

corporation owning such stock and by the corporation in which such

stock is owned.

To confer upon the National Government, in connection with the

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

big business concerns engaged in interstate commerce, would benefit

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

crisis it is noteworthy that the institutions which failed were

institutions which were not under the supervision and control of the

National Government. Those which were under National control stood the

test.

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

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

need for additional tracks, additional terminals, and improvements in

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

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

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

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

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

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

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

against any arbitrary and unthinking movement to cut them down without

the fullest and most careful consideration of all interests concerned

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

acting for the National Government under authority conferred upon it by

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

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

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

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

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

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

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

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

to oversee and control the workings of interstate common carriers and

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

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

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

public is accompanied by an equal benefit to the reputable packing

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

without it. The benefit to interstate common carriers and business

concerns from the legislation I advocate would be equally marked.

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

various State food and dairy commissioners showed in striking fashion

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

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

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

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

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

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

ineffective. There must be the closest cooperation between the National

and State governments in administering these laws.

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

currency:

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

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

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

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

$33.08. For several years evidence has been accumulating that

additional legislation is needed. The recurrence of each crop season

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

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

liability of business disaster. Since your body adjourned there has

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

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

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

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

such fluctuation is the advance in commercial rates and the uncertainty

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

interests suffer during each crop period. Excessive rates for call

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

speculative field. This depletes the fund that would otherwise be

available for commercial uses, and commercial borrowers are forced to

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

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

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

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

many of the proposed changes must be ruled from consideration because

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

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

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

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

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

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

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

which certainly should receive your consideration is that repeatedly

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

essential features of which have been approved by many prominent

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

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

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

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

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

meet the emergency presented by times of stringency.

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

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

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

all possibility of discrimination and favoritism. Such a plan would

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

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

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

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

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

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

never be forgotten that this question concerns business men generally

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

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

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

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

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

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

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

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

city banker and the country banker."

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

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

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

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

National authorities. Provision should be made for an emergency

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

effective guaranty, and upon conditions carefully prescribed by the

Government. Such emergency issue must be based on adequate securities

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

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

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

investigating to determine whether officers and directors of national

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

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

effect should be enacted for the District of Columbia and the

Territories.

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

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

possibility guarantee the business community against the results of

speculative folly any more than it can guarantee an individual against

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

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

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

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

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

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

business community to panic and distress.

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

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

expenditures and revenues of the National Government, exclusive of the

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

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

income over expenditures, including in the latter the fifty millions

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

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

year. This represents an approximation between income and outgo which

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

tariff law has been chiefly responsible for this excellent showing.

Nevertheless, there is an evident and constantly growing feeling among

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

revenue legislation must be revised.

This country is definitely committed to the protective system and any

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

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

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

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

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

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

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

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

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

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

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

cardinal point of American policy. The question should be approached

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

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

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

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

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

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

Presidential election, because as a matter of fact experience has

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

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

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

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

inheritance tax should receive the careful attention of our

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

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

because one scheme for an income tax was declared unconstitutional by

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

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

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

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

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

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

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

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

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

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

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

country bear in proportion to their increase in size a corresponding

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

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

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

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

taxes have repeatedly been placed upon the National statute books and

as repeatedly declared constitutional by the courts; and these laws

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

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

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

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

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

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

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

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

distant kinsman or stranger in blood the Government receives all told

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

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

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

especially interesting to us because it makes the inheritance tax an

imperial measure while allotting to the individual States of the Empire

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

addition to those imposed by the Imperial Government. Small

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

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

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

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

States the National Government should not impose inheritance taxes in

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

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

concurrently with the National Government, making a combined maximum

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

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

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

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

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

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

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

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

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

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

transmission in their entirety of the enormous fortunes which would be

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

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

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

have not the slightest sympathy with that socialistic idea which would

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

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

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

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

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

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

for themselves. But proposals for legislation such as this herein

advocated are directly opposed to this class of socialistic theories.

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

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

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

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

approximate equality in the conditions under which each man obtains the

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

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

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

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

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

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

Department of Justice has been as prompt to proceed against the

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

proceed against the agitator who incites to brutal violence. Everything

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

public opinion, which so profoundly influences both the courts and

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

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

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

the real wrongdoer can be readily punished.

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

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

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

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

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

the business community for indulging in practices which are profoundly

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

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

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

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

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

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

with the attendant damage to stockholders.

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

sentimentality and technicality. For the latter the remedy must come

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

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

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

demands of reason shall control all other influences and emotions in

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

with the criminal law will continue.

Instances of abuse in the granting of injunctions in labor disputes

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

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

speech unwarrantably restrained continues likewise to grow. Much of the

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

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

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

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

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

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

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

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

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

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

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

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

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

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

informed that it will soon receive the consideration of the Supreme

Court.

The Federal courts must of course decide ultimately what are the

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

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

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

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

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

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

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

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

standpoint commendable. But where it is recklessly or unnecessarily

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

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

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

only against the conduct of individual judges in needlessly

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

nominally a temporary injunction to accomplish what is in fact a

permanent decision.

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

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

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

Federal inspection of interstate railroads somewhat along the lines of

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

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

whose duty would be to investigate all accidents on interstate

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

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

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

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

steamboat inspection law.

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

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

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

legislation providing limited but definite compensation for accidents

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

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

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

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

which the National Government has jurisdiction. The number of accidents

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

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

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

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

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

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

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

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

person injured, while it often causes altogether disproportionate

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

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

matter for lawsuits. Workmen should receive certain and definite

compensation for all accidents in industry irrespective of negligence.

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

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

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

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

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

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

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

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

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

a desirable certainty of obligation and get rid of litigation to

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

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

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

employers' liability on railroads engaged in interstate commerce and

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

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

strengthened wherever in actual practice they have shown weakness; they

should be kept on the statute books in thoroughgoing form.

The constitutionality of the employers' liability act passed by the

preceding Congress has been carried before the courts. In two

jurisdictions the law has been declared unconstitutional, and in three

jurisdictions its constitutionality has been affirmed. The question has

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

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

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

further legislation along the lines advocated in my Message to the

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

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

social injustice in which the United States stands in unenviable

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

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

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

this slight modification of a completely outgrown principle has not yet

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

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

Since 1895 practically every country of Europe, together with Great

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

Hope has enacted legislation embodying in one form or another the

complete recognition of the principle which places upon the employer

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

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

Federal legislation up to the standard already established by all the

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

States to perfect their legislation in this regard.

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

constitutionality of the present law has recently been called into

question, and the Supreme Court has decided that the existing

legislation is unquestionably within the powers of the Congress. The

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

practicable be extended to the entire work carried on by the

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

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

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

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

Government should set the example in this respect.

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

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

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

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

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

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

the general public. I renew my previous recommendation that the

Congress favorably consider the matter of creating the machinery for

compulsory investigation of such industrial controversies as are of

sufficient magnitude and of sufficient concern to the people of the

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

The need for some provision for such investigation was forcibly

illustrated during the past summer. A strike of telegraph operators

seriously interfered with telegraphic communication, causing great

damage to business interests and serious inconvenience to the general

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

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

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

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

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

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

machinery existed and had there been authority for compulsory

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

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

probably have brought about a prompt adjustment.

Each successive step creating machinery for the adjustment of labor

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

progress in this direction.

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

Interstate Commerce Commission and the Commissioner of Labor a board of

mediation in controversies between interstate railroads and their

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

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

demonstrated. The creation of a board for compulsory investigation in

cases where mediation fails and arbitration is rejected is the next

logical step in a progressive program.

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

increase absolutely, and perhaps relatively, of those among our

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

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

consider the problems inseparable from a great industrial civilization.

Where an immense and complex business, especially in those branches

relating to manufacture and transportation, is transacted by a large

number of capitalists who employ a very much larger number of

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

corporations and the latter into unions. The relations of the

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

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

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

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

accomplishment of this end must be done by the individuals concerned

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

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

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

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

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

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

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

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

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

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

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

otherwise the dishonest who surely will take advantage of them will

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

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

No question growing out of our rapid and complex industrial development

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

The presence of women in industry reacts with extreme directness upon

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

surrounding the employment of children bear a vital relation to our

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

the Congress is very much behind the legislation of our more

progressive States. A thorough and comprehensive measure should be

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

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

investigation into the condition of women and children wage-earners

recently authorized and directed by the Congress is now being carried

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

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

the thorough and comprehensive investigation which the subject demands.

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

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

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

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

Territories under its own immediate control.