HOUSE, December 6, 1912. To the Senate and House of Representatives:
On the 3d of December I sent a message to the Congress, which was
confined to our foreign relations. The Secretary of State makes no
report to the President or to Congress, and a review of the history of
the transactions of the State Department in one year must therefore be
included by the President in his annual message or Congress will not be
fully informed of them. A full discussion of all the transactions of the
Government, with a view to informing the Congress of the important
events of the year and recommending new legislation, requires more space
than one message of reasonable length affords. I have therefore adopted
the course of sending three or four messages during the first ten days
of the session, so as to include reference to the more important matters
that should be brought to the attention of the Congress.
BUSINESS CONDITIONS
The condition of the country with reference to business could hardly be
better. While the four years of the administration now drawing to a
close have not developed great speculative expansion or a wide field of
new investment, the recovery and progress made from the depressing
conditions following the panic of 1907 have been steady and the
improvement has been clear and easily traced in the statistics. The
business of the country is now on a solid basis. Credits are not unduly
extended, and every phase of the situation seems in a state of
preparedness for a period of unexampled prosperity. Manufacturing
concerns are running at their full capacity and the demand for labor was
never so constant and growing. The foreign trade of the country for this
year will exceed $4,000,000,000, while the balance in our favor-that of
the excess of exports over imports-will exceed $500,000,000. More than
half our exports are manufactures or partly manufactured material, while
our exports of farm products do not show the same increase because of
domestic consumption. It is a year of bumper crops; the total money
value of farm products will exceed $9,500,000,000. It is a year when the
bushel or unit price of agricultural products has gradually fallen, and
yet the total value of the entire crop is greater by over $1,000,000,000
than we have known in our history.
CONDITION OF THE TREASURY
The condition of the Treasury is very satisfactory. The total
interest-bearing debt is $963,777,770, of which $134,631,980 constitute
the Panama Canal loan. The noninterest-bearing debt is $378,301,284.90,
including $346,681,016 of greenbacks. We have in the Treasury
$150,000,000 in gold coin as a reserve against the outstanding
greenbacks; and in addition we have a cash balance in the Treasury as a
general fund of $167,152,478.99, or an increase of $26,975,552 over the
general fund last year.
RECEIPTS AND EXPENDITURES
For three years the expenditures of the Government have decreased under
the influence of an effort to economize. This year presents an apparent
exception. The estimate by the Secretary of the Treasury of the ordinary
receipts, exclusive of postal revenues, for the year ending June 30,
1914, indicates that they will amount to $710,000,000. The sum of the
estimates of the expenditures for that same year, exclusive of Panama
Canal disbursements and postal disbursements payable from postal
revenues, is $732,000,000, indicating a deficit Of $22,000,000. For the
year ending June 30, 1913, similarly estimated receipts were
$667,000,000, while the total corresponding estimate of expenditures for
that year, submitted through the Secretary of the Treasury to Congress,
amounted to $656,000,000. This shows an increase of $76,000,000 in the
estimates for 1914 over the total estimates of 1913. This is due to an
increase Of $25,000,000 in the estimate for rivers and harbors for the
next year on projects and surveys authorized by Congress; to an increase
under the new pension bill Of $32,500,000; and to an increase in the
estimates for expenses of the Navy Department Of $24,000,000. The
estimate for the Navy Department for the year 1913 included two
battleships. Congress made provision for only one battleship, and
therefore the Navy Department has deemed it necessary and proper to make
an estimate which includes the first year’s expenditure for three
battleships in addition to the amount required for work on the
uncompleted ships now under construction. In addition to the natural
increase in the expenditures for the uncompleted ships, and the
additional battleship estimated for, the other increases are due to the
pay required for 4,000 or more additional enlisted men in the Navy; and
to this must be added the additional cost of construction imposed by the
change in the eight-hour law which makes it applicable to ships built in
private shipyards.
With the exceptions of these three items, the estimates show a reduction
this year below the total estimates for 1913 of more than $5,000,000.
The estimates for Panama Canal construction for 1914 are $17,000,000
less than for 1913.
OUR BANKING AND CURRENCY SYSTEM
A time when panics seem far removed is the best time for us to prepare
our financial system to withstand a storm. The most crying need this
country has is a proper banking and currency system. The existing one is
inadequate, and everyone who has studied the question admits it.
It is the business of the National Government to provide a medium,
automatically contracting and expanding in volume, to meet the needs of
trade. Our present system lacks the indispensable quality of elasticity.
The only part of our monetary medium that has elasticity is the
bank-note currency. The peculiar provisions of the law requiring
national banks to maintain reserves to meet the call of the depositors
operates to increase the money stringency when it arises rather than to
expand the supply of currency and relieve it. It operates upon each bank
and furnishes a motive for the withdrawal of currency from the channels
of trade by each bank to save itself, and offers no inducement whatever
for the use of the reserve to expand the supply of currency to meet the
exceptional demand.
After the panic of 1907 Congress realized that the present system was
not adapted to the country’s needs and that under it panics were
possible that might properly be avoided by legislative provision.
Accordingly a monetary commission was appointed which made a report in
February, 1912. The system which they recommended involved a National
Reserve Association, which was, in certain of its faculties and
functions, a bank, and which was given through its governing authorities
the power, by issuing circulating notes for approved commercial paper,
by fixing discounts, and by other methods of transfer of currency, to
expand the supply of the monetary medium where it was most needed to
prevent the export or hoarding of gold and generally to exercise such
supervision over the supply of money in every part of the country as to
prevent a stringency and a panic. The stock in this association was to
be distributed to the banks of the whole United States, State and
National, in a mixed proportion to bank units and to capital stock paid
in. The control of the association was vested in a board of directors to
be elected by representatives of the banks, except certain ex-officio
directors, three Cabinet officers, and the Comptroller of the Currency.
The President was to appoint the governor of the association from three
persons to be selected by the directors, while the two deputy governors
were to be elected by the board of directors. The details of the plan
were worked out with great care and ability, and the plan in general
seems to me to furnish the basis for a proper solution of our present
difficulties. I feel that the Government might very properly be given a
greater voice in the executive committee of the board of directors
without danger of injecting politics into its management, but I think
the federation system of banks is a good one, provided proper
precautions are taken to prevent banks of large capital from absorbing
power through ownership of stock in other banks. The objections to a
central bank it seems to me are obviated if the ownership of the reserve
association is distributed among all the banks of a country in which
banking is free. The earnings of the reserve association are limited in
percentage tit a reasonable and fixed amount, and the profits over and
above this are to be turned into the Government Treasury. It is quite
probable that still greater security against control by money centers
may be worked into the plan.
Certain it is, however, that the objections which were made in the past
history of this country to a central bank as furnishing a monopoly of
financial power to private individuals, would not apply to an
association whose ownership and control is so widely distributed and is
divided between all the banks of the country, State and National, on the
one hand, and the Chief Executive through three department heads and his
Comptroller of the Currency, on the other. The ancient hostility to a
national bank, with its branches, in which is concentrated the privilege
of doing a banking business and carrying on the financial transactions
of the Government, has prevented the establishment of such a bank since
it was abolished in the Jackson Administration. Our present national
banking law has obviated objections growing out of the same cause by
providing a free banking system in which any set of stockholders can
establish a national bank if they comply with the conditions of law. It
seems to me that the National Reserve Association meets the same
objection in a similar way; that is, by giving to each bank, State and
National, in accordance with its size, a certain share in the stock of
the reserve association, nontransferable and only to be held by the bank
while it performs its functions as a partner in the reserve association.
The report of the commission recommends provisions for the imposition of
a graduated tax on the expanded currency of such a character as to
furnish a motive for reducing the issue of notes whenever their presence
in the money market is not required by the exigencies of trade. In other
words, the whole system has been worked out with the greatest care.
Theoretically it presents a plan that ought to command support.
Practically it may require modification in various of its provisions in
order to make the security against, abuses by combinations among the
banks impossible. But in the face of the crying necessity that there is
for improvement in our present system, I urgently invite the attention
of Congress to the proposed plan and the report of the commission, with
the hope that an earnest consideration may suggest amendments and
changes within the general plan which will lead to its adoption for the
benefit of the country. There is no class in the community more
interested in a safe and sane banking and currency system, one which
will prevent panics and automatically furnish in each trade center the
currency needed in the carrying on of the business at that center, than
the wage earner. There is no class in the community whose experience
better qualifies them to make suggestions as to the sufficiency of a
currency and banking system than the bankers and business men. Ought we,
therefore, to ignore their recommendations and reject their financial
judgment as to the proper method of reforming our financial system
merely because of the suspicion which exists against them in the minds
of many of our fellow citizens? Is it not the duty of Congress to take
up the plan suggested, examine it from all standpoints, give impartial
consideration to the testimony of those whose experience ought to fit
them to give the best advice on the subject, and then to adopt some plan
which will secure the benefits desired?
A banking and currency system seems far away from the wage earner and
the farmer, but the fact is that they are vitally interested in a safe
system of currency which shall graduate its volume to the amount needed
and which shall prevent times of artificial stringency that frighten
capital, stop employment, prevent the meeting of the pay roll, destroy
local markets, and produce penury and want.
THE TARIFF
I have regarded it as my duty in former messages to the Congress to urge
the revision of the tariff upon principles of protection. It was my
judgment that the customs duties ought to be revised downward, but that
the reduction ought not to be below a rate which would represent the
difference in the cost of production between the article in question at
home and abroad, and for this and other reasons I vetoed several bills
which were presented to me in the last session of this Congress. Now
that a new Congress has been elected on a platform of a tariff for
revenue only rather than a protective tariff, and is to revise the
tariff on that basis, it is needless for me to occupy the time of this
Congress with arguments or recommendations in favor of a protective
tariff.
Before passing from the tariff law, however, known as the Payne tariff
law of August 5, 1909, I desire to call attention to section 38 of that
act, assessing a special excise tax on corporations. It contains a
provision requiring the levy of an additional 50 per cent to the annual
tax in cases of neglect to verify the prescribed return or to file it
before the time required by law. This additional charge of 50 per cent
operates in some cases as a harsh penalty for what may have been a mere
inadvertence or unintentional oversight, and the law should be so
amended as to mitigate the severity of the charge in such instances.
Provision should also be made for the refund of additional taxes
heretofore collected because of such infractions in those cases where
the penalty imposed has been so disproportionate to the offense as
equitably to demand relief.
BUDGET
The estimates for the next fiscal year have been assembled by the
Secretary of the Treasury and by him transmitted to Congress. I purpose
at a later day to submit to Congress a form of budget prepared for me
and recommended by the President’s Commission on Economy and Efficiency,
with a view of suggesting the useful and informing character of a
properly framed budget.
WAR DEPARTMENT
The War Department combines within its jurisdiction functions which in
other countries usually occupy three departments. It not only has the
management of the Army and the coast defenses, but its jurisdiction
extends to the government of the Philippines and of Porto Rico and the
control of the receivership of the customs revenues of the Dominican
Republic; it also includes the recommendation of all plans for the
improvement of harbors and waterways and their execution when adopted;
and, by virtue of an Executive order, the supervision of the
construction of the Panama Canal.
ARMY REORGANIZATION
Our small Army now consists of 83,809 men, excluding the 5,000
Philippine scouts. Leaving out of consideration the Coast Artillery
force, whose position is fixed in our various seacoast defenses, and the
present garrisons of our various insular possessions, we have to-day
within the continental United States a mobile Army of only about 35,000
men. This little force must be still further drawn upon to supply the
new garrisons for the great naval base which is being established at
Pearl Harbor, in the Hawaiian Islands, and to protect the locks now
rapidly approaching completion at Panama. The forces remaining in the
United States are now scattered in nearly 50 Posts, situated for a
variety of historical reasons in 24 States. These posts contain only
fractions of regiments, averaging less than 700 men each. In time of
peace it has been our historical policy to administer these units
separately by a geographical organization. In other words, our Army in
time of peace has never been a united organization but merely scattered
groups of companies, battalions, and regiments, and the first task in
time of war has been to create out of these scattered units an Army fit
for effective teamwork and cooperation.
To the task of meeting these patent defects, the War Department has been
addressing itself during the past year. For many years we had no officer
or division whose business it was to study these problems and plan
remedies for these defects. With the establishment of the General Staff
nine years ago a body was created for this purpose. It has, necessarily,
required time to overcome, even in its own personnel, the habits of mind
engendered by a century of lack of method, but of late years its work
has become systematic and effective, and it has recently been addressing
itself vigorously to these problems.
A comprehensive plan of Army reorganization was prepared by the War
College Division of the General Staff. This plan was thoroughly
discussed last summer at a series of open conferences held by the
Secretary of War and attended by representatives from all branches of
the Army and from Congress. In printed form it has been distributed to
Members of Congress and throughout the Army and the National Guard, and
widely through institutions of learning and elsewhere in the United
States. In it, for the first time, we have a tentative chart for future
progress.
Under the influence of this study definite and effective steps have been
taken toward Army reorganization so far as such reorganization lies
within the Executive power. Hitherto there has been no difference of
policy in the treatment of the organization of our foreign garrisons
from those of troops within the United States. The difference of
situation is vital, and the foreign garrison should be prepared to
defend itself at an instant’s notice against a foe who may command the
sea. Unlike the troops in the United States, it can not count upon
reinforcements or recruitment. It is an outpost upon which will fall the
brunt of the first attack in case of war. The historical policy of the
United States of carrying its regiments during time of peace at half
strength has no application to our foreign garrisons. During the past
year this defect has been remedied as to the Philippines garrison. The
former garrison of 12 reduced regiments has been replaced by a garrison
of 6 regiments at full strength, giving fully the same number of
riflemen at an estimated economy in cost of maintenance of over
$1,000,000 per year. This garrison is to be permanent. Its regimental
units, instead of being transferred periodically back and forth from the
United States, will remain in the islands. The officers and men
composing these units will, however, serve a regular tropical detail as
usual, thus involving no greater hardship upon the personnel and greatly
increasing the effectiveness of the garrison. A similar policy is
proposed for the Hawaiian and Panama garrisons as fast as the barracks
for them are completed. I strongly urge upon Congress that the necessary
appropriations for this purpose should be promptly made. It is, in my
opinion, of first importance that these national outposts, upon which a
successful home defense will, primarily, depend, should be finished and
placed in effective condition at the earliest possible day.
THE HOME ARMY
Simultaneously with the foregoing steps the War Department has been
proceeding with the reorganization of the Army at home. The formerly
disassociated units are being united into a tactical organization of
three divisions, each consisting of two or three brigades of Infantry
and, so far as practicable, a proper proportion of divisional Cavalry
and Artillery. Of course, the extent to which this reform can be carried
by the Executive is practically limited to a paper organization. The
scattered units can be brought under a proper organization, but they
will remain physically scattered until Congress supplies the necessary
funds for grouping them in more concentrated posts. Until that is done
the present difficulty of drilling our scattered groups together, and
thus training them for the proper team play, can not be removed. But we
shall, at least, have an Army which will know its own organization and
will be inspected by its proper commanders, and to which, as a unit,
emergency orders can be issued in time of war or other emergency.
Moreover, the organization, which in many respects is necessarily a
skeleton, will furnish a guide for future development. The separate
regiments and companies will know the brigades and divisions to which
they belong. They will be maneuvered together whenever maneuvers are
established by Congress, and the gaps in their organization will show
the pattern into which can be filled new troops as the Nation grows and
a larger Army is provided.
REGULAR ARMY RESERVE
One of the most important reforms accomplished during the past year has
been the legislation enacted in the Army appropriation bill of last
summer, providing for a Regular Army reserve. Hitherto our national
policy has assumed that at the outbreak of war our regiments would be
immediately raised to full strength. But our laws have provided no means
by which this could be accomplished, or by which the losses of the
regiments when once sent to the front could be repaired. In this respect
we have neglected the lessons learned by other nations. The new law
provides that the soldier, after serving four years with colors, shall
pass into a reserve for three years. At his option he may go into the
reserve at the end of three years, remaining there for four years. While
in the reserve he can be called to active duty only in case of war or
other national emergency, and when so called and only in such case will
receive a stated amount of pay for all of the period in which he has
been a member of the reserve. The legislation is imperfect, in my
opinion, in certain particulars, but it is a most important step in the
right direction, and I earnestly hope that it will be carefully studied
and perfected by Congress.
THE NATIONAL GUARD
Under existing law the National Guard constitutes, after the Regular
Army, the first line of national defense. Its organization, discipline,
training, and equipment, under recent legislation, have been
assimilated, as far as possible, to those of the Regular Army, and its
practical efficiency, under the effect of this training, has very
greatly increased. Our citizen soldiers under present conditions have
reached a stage of development beyond which they can not reasonably be
asked to go without further direct assistance in the form of pay from
the Federal Government. On the other hand, such pay from the National
Treasury would not be justified unless it produced a proper equivalent
in additional efficiency on the part of the National Guard. The
Organized Militia to-day can not be ordered outside of the limits of the
United States, and thus can not lawfully be used for general military
purposes. The officers and men are ambitious and eager to make
themselves thus available and to become an efficient national reserve of
citizen soldiery. They are the only force of trained men, other than the
Regular Army, upon which we can rely. The so-called militia pay bill, in
the form agreed on between the authorities of the War Department and the
representatives of the National Guard, in my opinion adequately meets
these conditions and offers a proper return for the pay which it is
proposed to give to the National Guard. I believe that its enactment
into law would be a very long step toward providing this Nation with a
first line of citizen soldiery, upon which its main reliance must depend
in case of any national emergency. Plans for the organization of the
National Guard into tactical divisions, on the same lines as those
adopted for the Regular Army, are being formulated by the War College
Division of the General Staff.
NATIONAL VOLUNTEERS
The National Guard consists of only about 110,000 men. In any serious
war in the past it has always been necessary, and in such a war in the
future it doubtless will be necessary, for the Nation to depend, in
addition to the Regular Army and the National Guard, upon a large force
of volunteers. There is at present no adequate provision of law for the
raising of such a force. There is now pending in Congress, however, a
bill which makes such provision, and which I believe is admirably
adapted to meet the exigencies which would be presented in case of war.
The passage of the bill would not entail a dollar’s expense upon the
Government at this time or in the future until war comes. But if war
comes the methods therein directed are in accordance with the best
military judgment as to what they ought to be, and the act would prevent
the necessity for a discussion of any legislation and the delays
incident to its consideration and adoption. I earnestly urge its
passage.
CONSOLIDATION OF THE SUPPLY CORPS
The Army appropriation act of 191:2 also carried legislation for the
consolidation of the Quartermaster’s Department, the Subsistence
Department, and the Pay Corps into a single supply department, to be
known as the Quartermaster’s Corps. It also provided for the
organization of a special force of enlisted men, to be known as the
Service Corps, gradually to replace many of the civilian employees
engaged in the manual labor necessary in every army. I believe that both
of these enactments will improve the administration of our military
establishment. The consolidation of the supply corps has already been
effected, and the organization of the service corps is being put into
effect.
All of the foregoing reforms are in the direction of economy and
efficiency. Except for the slight increase necessary to garrison our
outposts in Hawaii and Panama, they do not call for a larger Army, but
they do tend to produce a much more efficient one. The only substantial
new appropriations required are those which, as I have pointed out, are
necessary to complete the fortifications and barracks at our naval bases
and outposts beyond the sea.
PORTO RICO
Porto Rico continues to show notable progress, both commercially and in
the spread of education. Its external commerce has increased 17 per cent
over the preceding year, bringing the total value up to $92,631,886, or
more than five times the value of the commerce of the island in 1901.
During the year 160,657 Pupils were enrolled in the public schools, as
against 145,525 for the preceding year, and as compared with 26,000 for
the first year of American administration. Special efforts are under way
for the promotion of vocational and industrial training, the need of
which is particularly pressing in the island. When the bubonic plague
broke out last June, the quick and efficient response of the people of
Porto Rico to the demands of modern sanitation was strikingly shown by
the thorough campaign which was instituted against the plague and the
hearty public opinion which supported the Government’s efforts to check
its progress and to prevent its recurrence.
The failure thus far to grant American citizenship continues to be the
only ground of dissatisfaction. The bill conferring such citizenship has
passed the House of Representatives and is now awaiting the action of
the Senate. I am heartily in favor of the passage of this bill. I
believe that the demand for citizenship is just, and that it is amply
earned by sustained loyalty on the part of the inhabitants of the
island. But it should be remembered that the demand must be, and in the
minds of most Porto Ricans is, entirely disassociated from any thought
of statehood. I believe that no substantial approved public opinion in
the United States or in Porto Rico contemplates statehood for the island
as the ultimate form of relations between us. I believe that the aim to
be striven for is the fullest possible allowance of legal and fiscal
self-government, with American citizenship as to the bond between us; in
other words, a relation analogous to the present relation between Great
Britain and such self-governing colonies as Canada and Australia. This
would conduce to the fullest and most self-sustaining development of
Porto Rico, while at the same time it would grant her the economic and
political benefits of being under the American flag.
PHILIPPINES
A bill is pending in Congress which revolutionizes the carefully worked
out scheme of government under which the Philippine Islands are now
governed and which proposes to render them virtually autonomous at once
and absolutely independent in eight years. Such a proposal can only be
founded on the assumption that we have now discharged our trusteeship to
the Filipino people and our responsibility for them to the world, and
that they are now prepared for self-government as well as national
sovereignty. A thorough and unbiased knowledge of the facts clearly
shows that these assumptions are absolutely without justification. As to
this, I believe that there is no substantial difference of opinion among
any of those who have had the responsibility of facing Philippine
problems in the administration of the islands, and I believe that no one
to whom the future of this people is a responsible concern can
countenance a policy fraught with the direst consequences to those on
whose behalf it is ostensibly urged.
In the Philippine Islands we have embarked upon an experiment
unprecedented in dealing with dependent people. We are developing there
conditions exclusively for their own welfare. We found an archipelago
containing 24 tribes and races, speaking a great variety of languages,
and with a population over 80 per cent of which could neither read nor
write. Through the unifying forces of a common education, of commercial
and economic development, and of gradual participation in local
self-government we are endeavoring to evolve a homogeneous people fit to
determine, when the time arrives, their own destiny. We are seeking to
arouse a national spirit and not, as under the older colonial theory, to
suppress such a spirit. The character of the work we have been doing is
keenly recognized in the Orient, and our success thus far followed with
not a little envy by those who, initiating the same policy, find
themselves hampered by conditions grown up in earlier days and under
different theories of administration. But our work is far from done. Our
duty to the Filipinos is far from discharged. Over half a million
Filipino students are now in the Philippine schools helping to mold the
men of the future into a homogeneous people, but there still remain more
than a million Filipino children of school age yet to be reached. Freed
from American control the integrating forces of a common education and a
common language will cease and the educational system now well started
will slip back into inefficiency and disorder.
An enormous increase in the commercial development of the islands has
been made since they were virtually granted full access to our markets
three years ago, with every prospect of increasing development and
diversified industries. Freed from American control such development is
bound to decline. Every observer speaks of the great progress in public
works for the benefit of the Filipinos, of harbor improvements, of roads
and railways, of irrigation and artesian wells, public buildings, and
better means of communication. But large parts of the islands are still
unreached, still even unexplored, roads and railways are needed in many
parts, irrigation systems are still to be installed, and wells to be
driven. Whole villages and towns are still without means of
communication other than almost impassable roads and trails. Even the
great progress in sanitation, which has successfully suppressed
smallpox, the bubonic plague, and Asiatic cholera, has found the cause
of and a cure for beriberi, has segregated the lepers, has helped to
make Manila the most healthful city in the Orient, and to free life
throughout the whole archipelago from its former dread diseases, is
nevertheless incomplete in many essentials of permanence in sanitary
policy. Even more remains to be accomplished. If freed from American
control sanitary progress is bound to be arrested and all that has been
achieved likely to be lost.
Concurrent with the economic, social, and industrial development of the
islands has been the development of the political capacity of the
people. By their progressive participation in government the Filipinos
are being steadily and hopefully trained for self-government. Under
Spanish control they shared in no way in the government. Under American
control they have shared largely and increasingly. Within the last dozen
years they have gradually been given complete autonomy in the
municipalities, the right to elect two-thirds of the provincial
governing boards and the lower house of the insular legislature. They
have four native members out of nine members of the commission, or upper
house. The chief justice and two justices of the supreme court, about
one-half of the higher judicial positions, and all of the justices of
the peach are natives. In the classified civil service the proportion of
Filipinos increased from 51 per cent in 1904 to 67 per cent in 1911.
Thus to-day all the municipal employees, over go per cent of the
provincial employees, and 60 per cent of the officials and employees of
the central government are Filipinos. The ideal which has been kept in
mind in our political guidance of the islands has been real popular
self-government and not mere paper independence. I am happy to say that
the Filipinos have done well enough in the places they have filled and
in the discharge of the political power with which they have been
intrusted to warrant the belief that they can be educated and trained to
complete self-government. But the present satisfactory results are due
to constant support and supervision at every step by Americans.
If the task we have undertaken is higher than that assumed by other
nations, its accomplishment must demand even more patience. We must not
forget that we found the Filipinos wholly untrained in government. Up to
our advent all other experience sought to repress rather than encourage
political power. It takes long time and much experience to ingrain
political habits of steadiness and efficiency. Popular self-government
ultimately must rest upon common habits of thought and upon a reasonably
developed public opinion. No such foundations for self-government, let
alone independence are now present in the Philippine Islands.
Disregarding even their racial heterogeneity and the lack of ability to
think as a nation, it is sufficient to point out that under liberal
franchise privileges only about 3 per cent of the Filipinos vote and
only 5 per cent of the people are said to read the public press. To
confer independence upon the Filipinos now is, therefore, to subject the
great mass of their people to the dominance of an oligarchical and,
probably, exploiting minority. Such a course will be as cruel to those
people as it would be shameful to us.
Our true course is to pursue steadily and courageously the path we have
thus far followed; to guide the Filipinos into self-sustaining pursuits;
to continue the cultivation of sound political habits through education
and political practice; to encourage the diversification of industries,
and to realize the advantages of their industrial education by
conservatively approved cooperative methods, at once checking the
dangers of concentrated wealth and building up a sturdy, independent
citizenship. We should do all this with a disinterested endeavor to
secure for the Filipinos economic independence and to fit them for
complete self-government, with the power to decide eventually, according
to their own largest good, whether such self-government shall be
accompanied by independence. A present declaration even of future
independence would retard progress by the dissension and disorder it
would arouse. On our part it would be a disingenuous attempt, under the
guise of conferring a benefit on them, to relieve ourselves from the
heavy and difficult burden which thus far we have been bravely and
consistently sustaining. It would be a disguised policy of scuttle. It
would make the helpless Filipino the football of oriental politics,
tinder the protection of a guaranty of their independence, which we
would be powerless to enforce.
REGULATION OF WATER POWER
There are pending before Congress a large number of bills proposing to
grant privileges of erecting dams for the purpose of creating water
power in our navigable rivers. The pendency of these bills has brought
out an important defect in the existing general dam act. That act does
not, in my opinion, grant sufficient power to the Federal Government in
dealing with the construction of such dams to exact protective
conditions in the interest of navigation. It does not permit the Federal
Government, as a condition of its permit, to require that a part of the
value thus created shall be applied to the further general improvement
and protection of the stream. I believe this to be one of the most
important matters of internal improvement now confronting the
Government. Most of the navigable rivers of this country are
comparatively long and shallow. In order that they may be made fully
useful for navigation there has come into vogue a method of improvement
known as canalization, or the slack-water method, which consists in
building a series of dams and locks, each of which will create a long
pool of deep navigable water. At each of these dams there is usually
created also water power of commercial value. If the water power thus
created can be made available for the further improvement of navigation
in the stream, it is manifest that the improvement will be much more
quickly effected on the one hand, and, on the other, that the burden on
the general taxpayers of the country will be very much reduced. Private
interests seeking permits to build water-power dams in navigable streams
usually urge that they thus improve navigation, and that if they do not
impair navigation they should be allowed to take for themselves the
entire profits of the water-power development. Whatever they may do by
way of relieving the Government of the expense of improving navigation
should be given due consideration, but it must be apparent that there
may be a profit beyond a reasonably liberal return upon the private
investment which is a potential asset of the Government in carrying out
a comprehensive policy of waterway development. It is no objection to
the retention and use of such an asset by the Government that a
comprehensive waterway policy will include the protection and
development of the other public uses of water, which can not and should
not be ignored in making and executing plans for the protection and
development of navigation. It is also equally clear that inasmuch as the
water power thus created is or may be an incident of a general scheme of
waterway improvement within the constitutional jurisdiction of the
Federal Government, the regulation of such water power lies also within
that jurisdiction. In my opinion constructive statesmanship requires
that legislation should be enacted which will permit the development of
navigation in these great rivers to go hand in hand with the utilization
of this by-product of water power, created in the course of the same
improvement, and that the general dam act should be so amended as to
make this possible. I deem it highly important that the Nation should
adopt a consistent and harmonious treatment of these water-power
projects, which will preserve for this purpose their value to the
Government, whose right it is to grant the permit. Any other policy is
equivalent to throwing away a most valuable national asset.
THE PANAMA CANAL
During the past year the work of construction upon the canal has
progressed most satisfactorily. About 87 per cent of the excavation work
has been completed, and more than 93 per cent of the concrete for all
the locks is in place. In view of the great interest which has been
manifested as to some slides in the Culebra Cut, I am glad to say that
the report of Col. Goethals should allay any apprehension on this point.
It is gratifying to note that none of the slides which occurred during
this year would have interfered with the passage of the ships had the
canal, in fact, been in operation, and when the slope pressures will
have been finally adjusted and the growth of vegetation will minimize
erosion in the banks of the cut, the slide problem will be practically
solved and an ample stability assured for the Culebra Cut.
Although the official date of the opening has been set for January 1,
1915, the canal will, in fact, from present indications, be opened for
shipping during the latter half of 1913. No fixed date can as yet be
set, but shipping interests will be advised as soon as assurances can be
given that vessels can pass through without unnecessary delay.
Recognizing the administrative problem in the management of the canal,
Congress in the act of August 24, 1912, has made admirable provisions
for executive responsibility in the control of the canal and the
government of the Canal Zone. The problem of most efficient organization
is receiving careful consideration, so that a scheme of organization and
control best adapted to the conditions of the canal may be formulated
and put in operation as expeditiously as possible. Acting tinder the
authority conferred on me by Congress, I have, by Executive
proclamation, promulgated the following schedule of tolls for ships
passing through the canal, based upon the thorough report of Emory R.
Johnson, special commissioner on traffic and tolls:
I. On merchant vessels carrying passengers or cargo, $1.20 per net
vessel ton-each 100 cubic feet-of actual earning capacity. 2. On vessels
in ballast without passengers or cargo, 40 per cent less than the rate
of tolls for vessels with passengers or cargo. 3. Upon naval vessels,
other than transports, colliers, hospital ships, and supply ships, 50
cents per displacement ton. 4. Upon Army and Navy transports, colliers,
hospital ships, and supply ships, $1.20 per net ton, the vessels to be
measured by the same rules as are employed in determining the net
tonnage of merchant vessels. Rules for the determination of the tonnage
upon which toll charges are based are now in course of preparation and
will be promulgated in due season.
PANAMA CANAL TREATY
The proclamation which I have issued in respect to the Panama Canal
tolls is in accord with the Panama Canal act passed by this Congress
August 24, 1912. We have been advised that the British Government has
prepared a protest against the act and its enforcement in so far as it
relieves from the payment of tolls American ships engaged in the
American coastwise trade on the ground that it violates British rights
tinder the Hay-Pauncefote treaty concerning the Panama Canal. When the
protest is presented, it will be promptly considered and an effort made
to reach a satisfactory adjustment of any differences there may be
between the two Governments.
WORKMEN’S COMPENSATION ACT
The promulgation of an efficient workmen’s compensation act, adapted to
the particular conditions of the zone, is awaiting adequate
appropriation by Congress for the payment of claims arising thereunder.
I urge that speedy provision be made in order that we may install upon
the zone a system of settling claims for injuries in best accord with
modern humane, social, and industrial theories.
PROMOTION FOR COL. GOETHALS
As the completion of the canal grows nearer, and as the wonderful
executive work of Col. Goethals becomes more conspicuous in the eyes of
the country and of the world, it seems to me wise and proper to make
provision by law for such reward to him as may be commensurate with the
service that he has rendered to his country. I suggest that this reward
take the form of an appointment of Col. Goethals as a major general in
the Army of the United States, and that the law authorizing such
appointment be accompanied with a provision permitting his designation
as Chief of Engineers upon the retirement of the present incumbent of
that office.
NAVY DEPARTMENT
The Navy of the United States is in a greater state of efficiency and is
more powerful than it has ever been before, but in the emulation which
exists between different countries in respect to the increase of naval
and military armaments this condition is not a permanent one. In view of
the many improvements and increases by foreign Governments the slightest
halt on our part in respect to new construction throws us back and
reduces us from a naval power of the first rank and places us among the
nations of the second rank. In the past 15 years the Navy has expanded
rapidly and yet far less rapidly than our country. From now on reduced
expenditures in the Navy means reduced military strength. The world’s
history has shown the importance of sea power both for adequate defense
and for the support of important and definite policies.
I had the pleasure of attending this autumn a mobilization of the
Atlantic Fleet, and was glad to observe and note the preparedness of the
fleet for instant action. The review brought before the President and
the Secretary of the Navy a greater and more powerful collection of
vessels than had ever been gathered in American waters. The condition of
the fleet and of the officers and enlisted men and of the equipment of
the vessels entitled those in authority to the greatest credit.
I again commend to Congress the giving of legislative sanction to the
appointment of the naval aids to the Secretary of the Navy. These aids
and the council of aids appointed by the Secretary of the Navy to assist
him in the conduct of his department have proven to be of the highest
utility. They have furnished an executive committee of the most skilled
naval experts, who have coordinated the action of the various bureaus in
the Navy, and by their advice have enabled the Secretary to give an
administration at the same time economical and most efficient. Never
before has the United States had a Navy that compared in efficiency with
its present one, but never before have the requirements with respect to
naval warfare been higher and more exacting than now. A year ago
Congress refused to appropriate for more than one battleship. In this I
think a great mistake of policy was made, and I urgently recommend that
this Congress make up for the mistake of the last session by
appropriations authorizing the construction of three battleships, in
addition to destroyers, fuel ships, and the other auxiliary vessels as
shown in the building program of the general board. We are confronted by
a condition in respect to the navies of the world which requires us, if
we would maintain our Navy as an insurance of peace, to augment our
naval force by at least two battleships a year and by battle cruisers,
gunboats, torpedo destroyers, and submarine boats in a proper
proportion. We have no desire for war. We would go as far as any nation
in the world to avoid war, but we are a world power. Our population, our
wealth, our definite policies, our responsibilities in the Pacific and
the Atlantic, our defense of the Panama Canal, together with our
enormous world trade and our missionary outposts on the frontiers of
civilization, require us to recognize our position as one of the
foremost in the family of nations, and to clothe ourselves with
sufficient naval power to give force to our reasonable demands, and to
give weight to our influence in those directions of progress that a
powerful Christian nation should advocate.
I observe that the Secretary of the Navy devotes some space to a change
in the disciplinary system in vogue in that branch of the service. I
think there is nothing quite so unsatisfactory to either the Army or the
Navy as the severe punishments necessarily inflicted by court-martial
for desertions and purely military offenses, and I am glad to hear that
the British have solved this important and difficult matter in a
satisfactory way. I commend to the consideration of Congress the details
of the new disciplinary system, and recommend that laws be passed
putting the same into force both in the Army and the Navy.
I invite the attention of Congress to that part of the report of the
Secretary of the Navy in which he recommends the formation of a naval
reserve by the organization of the ex-sailors of the Navy.
I repeat my recommendation made last year that proper provision should
be made for the rank of the commander in chief of the squadrons and
fleets of the Navy. The inconvenience attending the necessary precedence
that most foreign admirals have over our own whenever they meet in
official functions ought to be avoided. It impairs the prestige of our
Navy and is a defect that can be very easily removed.
DEPARTMENT OF JUSTICE
This department has been very active in the enforcement of the law. It
has been better organized and with a larger force than ever before in
the history of the Government. The prosecutions which have been
successfully concluded and which are now pending testify to the
effectiveness of the departmental work.
The prosecution of trusts under the Sherman antitrust law has gone on
without restraint or diminution, and decrees similar to those entered in
the Standard Oil and the Tobacco cases have been entered in other suits,
like the suits against the Powder Trust and the Bathtub Trust. I am very
strongly convinced that a steady, consistent course in this regard, with
a continuing of Supreme Court decisions upon new phases of the trust
question not already finally decided is going to offer a solution of
this much-discussed and troublesome issue in a quiet, calm, and judicial
way, without any radical legislation changing the governmental policy in
regard to combinations now denounced by the Sherman antitrust law. I
have already recommended as an aid in this matter legislation which
would declare unlawful certain well-known phases of unfair competition
in interstate trade, and I have also advocated voluntary national
incorporation for the larger industrial enterprises, with provision for
a closer supervision by the Bureau of Corporations, or a board appointed
for the purpose, so as to make more certain compliance with the
antitrust law on the one hand and to give greater security to the
stockholders against possible prosecutions on the other. I believe,
however, that the orderly course of litigation in the courts and the
regular prosecution of trusts charged with the violation of the
antitrust law is producing among business men a clearer and clearer
perception of the line of distinction between business that is to be
encouraged and business that is to be condemned, and that in this quiet
way the question of trusts can be settled and competition retained as an
economic force to secure reasonableness in prices and freedom and
independence in trade.
REFORM OF COURT PROCEDURE
I am glad to bring to the attention of Congress the fact that the
Supreme Court has radically altered the equity rules governing the
procedure on the equity side of all Federal courts, and though, as these
changes have not been yet put in practice so as to enable us to state
from actual results what the reform will accomplish, they are of such a
character that we can reasonably prophesy that they will greatly reduce
the time and cost of litigation in such courts. The court has adopted
many of the shorter methods of the present English procedure, and while
it may take a little while for the profession to accustom itself to
these methods, it is certain greatly to facilitate litigation. The
action of the Supreme Court has been so drastic and so full of
appreciation of the necessity for a great reform in court procedure that
I have no hesitation in following up this action with a recommendation
which I foreshadowed in my message of three years ago, that the sections
of the statute governing the procedure in the Federal courts on the
common-law side should be so amended as to give to the Supreme Court the
same right to make rules of procedure in common law as they have, since
the beginning of the court, exercised in equity. I do not doubt that a
full consideration of the subject will enable the court while giving
effect to the substantial differences in right and remedy between the
system of common law and the system of equity so to unite the two
procedures into the form of one civil action and to shorten the
procedure in such civil action as to furnish a model to all the State
courts exercising concurrent jurisdiction with the Federal courts of
first instance.
Under the statute now in force the common-law procedure in each Federal
court is made to conform to the procedure in the State in which the
court is held. In these days, when we should be making progress in court
procedure, such a conformity statute makes the Federal method too
dependent upon the action of State legislatures. I can but think it a
great opportunity for Congress to intrust to the highest tribunal in
this country, evidently imbued with a strong spirit in favor of a reform
of procedure, the power to frame a model code of procedure, which, while
preserving all that is valuable and necessary of the rights and remedies
at common law and in equity, shall lessen the burden of the poor
litigant to a minimum in the expedition and cheapness with which his
cause can be fought or defended through Federal courts to final
judgment.
WORKMAN’S COMPENSATION ACT
The workman’s compensation act reported by the special commission
appointed by Congress and the Executive, which passed the Senate and is
now pending in the House, the passage of which I have in previous
messages urged upon Congress, I venture again to call to its attention.
The opposition to it which developed in the Senate, but which was
overcome by a majority in that body, seemed to me to grow out rather of
a misapprehension of its effect than of opposition to its principle. I
say again that I think no act can have a better effect directly upon the
relations between the employer and employee than this act applying to
railroads and common carriers of an interstate character, and I am sure
that the passage of the act would greatly relieve the courts of the
heaviest burden of litigation that they have, and would enable them to
dispatch other business with a speed never before attained in courts of
justice in this country.