As a nation we are united in spirit and intention. I pay little heed to

those who tell me otherwise. I hear the voices of dissent-who does not?

I bear the criticism and the clamor of the noisily thoughtless and

troublesome. I also see men here and there fling themselves in impotent

disloyalty against the calm, indomitable power of the Nation. I hear men

debate peace who understand neither its nature nor the way in which we

may attain it with uplifted eyes and unbroken spirits. But I know that

none of these speaks for the Nation. They do not touch the heart of

anything. They may safely be left to strut their uneasy hour and be

forgotten.

But from another point of view I believe that it is necessary to say

plainly what we here at the seat of action consider the war to be for

and what part we mean to play in the settlement of its searching issues.

We are the spokesmen of the American people, and they have a right to

know whether their purpose is ours. They desire peace by the overcoming

of evil, by the defeat once for all of the sinister forces that

interrupt peace and render it impossible, and they wish to know how

closely our thought runs with theirs and what action we propose. They

are impatient with those who desire peace by any sort of compromise

deeply and indignantly impatient--but they will be equally impatient

with us if we do not make it plain to them what our objectives are and

what we are planning for in seeking to make conquest of peace by arms.

I believe that I speak for them when I say two things: First, that this

intolerable thing of which the masters of Germany have shown us the ugly

face, this menace of combined intrigue and force which we now see so

clearly as the German power, a thing without conscience or honor of

capacity for covenanted peace, must be crushed and, if it be not utterly

brought to an end, at least shut out from the friendly intercourse of

the nations; and second, that when this thing and its power are indeed

defeated and the time comes that we can discuss peace when the German

people have spokesmen whose word we can believe and when those spokesmen

are ready in the name of their people to accept the common judgment of

the nations as to what shall henceforth be the bases of law and of

covenant for the life of the world-we shall be willing and glad to pay

the full price for peace, and pay it ungrudgingly.

We know what that price will be. It will be full, impartial

justice-justice done at every point and to every nation that the final

settlement must affect, our enemies as well as our friends.

You catch, with me, the voices of humanity that are in the air. They

grow daily more audible, more articulate, more persuasive, and they come

from the hearts of men everywhere. They insist that the war shall not

end in vindictive action of any kind; that no nation or people shall be

robbed or punished because the irresponsible rulers of a single country

have themselves done deep and abominable wrong. It is this thought that

has been expressed in the formula, “No annexations, no contributions, no

punitive indemnities.”

Just because this crude formula expresses the instinctive judgment as to

right of plain men everywhere, it has been made diligent use of by the

masters of German intrigue to lead the people of Russia astray and the

people of every other country their agents could reach-in order that a

premature peace might be brought about before autocracy has been taught

its final and convincing lesson and the people of the world put in

control of their own destinies.

But the fact that a wrong use has been made of a just idea is no reason

why a right use should not be made of it. It ought to be brought under

the patronage of its real friends. Let it be said again that autocracy

must first be shown the utter futility of its claim to power or

leadership in the modern world. It is impossible to apply any standard

of justice so long as such forces are unchecked and undefeated as the

present masters of Germany command. Not until that has been done can

right be set up as arbiter and peacemaker among the nations. But when

that has been done-as, God willing, it assuredly will be-we shall at

last be free to do an unprecedented thing, and this is the time to avow

our purpose to do it. We shall be free to base peace on generosity and

justice, to the exclusions of all selfish claims to advantage even on

the part of the victors.

Let there be no misunderstanding. Our present and immediate task is to

win the war and nothing shall turn us aside from it until it is

accomplished. Every power and resource we possess, whether of men, of

money, or of materials, is being devoted and will continue to be devoted

to that purpose until it is achieved. Those who desire to bring peace

about before that purpose is achieved I counsel to carry their advice

elsewhere. We will not entertain it. We shall regard the war as won only

when the German people say to us, through properly accredited

representatives, that they are ready to agree to a settlement based upon

justice and reparation of the wrongs their rulers have done. They have

done a wrong to Belgium which must be repaired. They have established a

power over other lands and peoples than their own--over the great empire

of Austria-Hungary, over hitherto free Balkan states, over Turkey and

within Asia-which must be relinquished.

Germany’s success by skill, by industry, by knowledge, by enterprise we

did not grudge or oppose, but admired, rather. She had built up for

herself a real empire of trade and influence, secured by the peace of

the world. We were content to abide by the rivalries of manufacture,

science and commerce that were involved for us in her success, and stand

or fall as we had or did not have the brains and the initiative to

surpass her. But at the moment when she had conspicuously won her

triumphs of peace she threw them away, to establish in their stead what

the world will no longer permit to be established, military and

political domination by arms, by which to oust where she could not excel

the rivals she most feared and hated. The peace we make must remedy that

wrong. It must deliver the once fair lands and happy peoples of Belgium

and Northern France from the Prussian conquest and the Prussian menace,

but it must deliver also the peoples of Austria-Hungary, the peoples of

the Balkans and the peoples of Turkey, alike in Europe and Asia, from

the impudent and alien dominion of the Prussian military and commercial

autocracy.

We owe it, however, to ourselves, to say that we do not wish in any way

to impair or to rearrange the Austro-Hungarian Empire. It is no affair

of ours what they do with their own life, either industrially or

politically. We do not purpose or desire to dictate to them in any way.

We only desire to see that their affairs are left in their own hands, in

all matters, great or small. We shall hope to secure for the peoples of

the Balkan peninsula and for the people of the Turkish Empire the right

and opportunity to make their own lives safe, their own fortunes secure

against oppression or injustice and from the dictation of foreign courts

or parties.

And our attitude and purpose with regard to Germany herself are of a

like kind. We intend no wrong against the German Empire, no interference

with her internal affairs. We should deem either the one or the other

absolutely unjustifiable, absolutely contrary to the principles we have

professed to live by and to hold most sacred throughout our life as a

nation.

The people of Germany are being told by the men whom they now permit to

deceive them and to act as their masters that they are fighting for the

very life and existence of their empire, a war of desperate self-defense

against deliberate aggression. Nothing could be more grossly or wantonly

false, and we must seek by the utmost openness and candor as to our real

aims to convince them of its falseness. We are in fact fighting for

their emancipation from the fear, along with our own-from the fear as

well as from the fact of unjust attack by neighbors or rivals or

schemers after world empire. No one is threatening the existence or the

independence of the peaceful enterprise of the German Empire.

The worst that can happen to the detriment the German people is this,

that if they should still, after the war is over, continue to be obliged

to live under ambitious and intriguing masters interested to disturb the

peace of the world, men or classes of men whom the other peoples of the

world could not trust, it might be impossible to admit them to the

partnership of nations which must henceforth guarantee the world’s

peace. That partnership must be a partnership of peoples, not a mere

partnership of governments. It might be impossible, also, in such

untoward circumstances, to admit Germany to the free economic

intercourse which must inevitably spring out of the other partnerships

of a real peace. But there would be no aggression in that; and such a

situation, inevitable, because of distrust, would in the very nature of

things sooner or later cure itself, by processes which would assuredly

set in.

The wrongs, the very deep wrongs, committed in this war will have to be

righted. That, of course. But they cannot and must not be righted by the

commission of similar wrongs against Germany and her allies. The world

will not permit the commission of similar wrongs as a means of

reparation and settlement. Statesmen must by this time have learned that

the opinion of the world is everywhere wide awake and fully comprehends

the issues involved. No representative of any self-governed nation will

dare disregard it by attempting any such covenants of selfishness and

compromise as were entered into at the Congress of Vienna. The thought

of the plain people here and everywhere throughout the world, the people

who enjoy no privilege and have very simple and unsophisticated

standards of right and wrong, is the air all governments must henceforth

breathe if they would live.

It is in the full disclosing light of that thought that all policies

must be received and executed in this midday hour of the world’s life.

Ger. man rulers have been able to upset the peace of the world only

because the German people were not suffered under their tutelage to

share the comradeship of the other peoples of the world either in

thought or in purpose. They were allowed to have no opinion of their own

which might be set up as a rule of conduct for those who exercised

authority over them. But the Congress that concludes this war will feel

the full strength of the tides that run now in the hearts and

consciences of free men everywhere. Its conclusions will run with those

tides.

All those things have been true from the very beginning of this

stupendous war; and I cannot help thinking that if they had been made

plain at the very outset the sympathy and enthusiasm of the Russian

people might have been once for all enlisted on the side of the Allies,

suspicion and distrust swept away, and a real and lasting union of

purpose effected. Had they believed these things at the very moment of

their revolution, and had they been confirmed in that belief since, the

sad reverses which have recently marked the progress of their affairs

towards an ordered and stable government of free men might have been

avoided. The Russian people have been poisoned by the very same

falsehoods that have kept the German people in the dark, and the poison

has been administered by the very same hand. The only possible antidote

is the truth. It cannot be uttered too plainly or too often.

From every point of view, therefore, it has seemed to be my duty to

speak these declarations of purpose, to add these specific

interpretations to what I took the liberty of saying to the Senate in

January. Our entrance into the war has not altered out attitude towards

the settlement that must come when it is over.

When I said in January that the nations of the world were entitled not

only to free pathways upon the sea, but also to assured and unmolested

access to those-pathways, I was thinking, and I am thinking now, not of

the smaller and weaker nations alone which need our countenance and

support, but also of the great and powerful nations and of our present

enemies as well as our present associates in the war. I was thinking,

and am thinking now, of Austria herself, among the rest, as well as of

Serbia and of Poland.

Justice and equality of rights can be had only at a great price. We are

seeking permanent, not temporary, foundations for the peace of the

world, and must seek them candidly and fearlessly. As always, the right

will prove to be the expedient.

What shall we do, then, to push this great war of freedom and justice to

its righteous conclusion? We must clear away with a thorough hand all

impediments to success, and we must make every adjustment of law that

will facilitate the full and free use of our whole capacity and force as

a fighting unit.

One very embarrassing obstacle that stands hi our way is that we are at

war with Germany but not with her allies. I, therefore, very earnestly

recommend that the Congress immediately declare the United States in a

state of war with Austria-Hungary. Does it seem strange to you that this

should be the conclusion of the argument I have just addressed to you?

It is not. It is in fact the inevitable logic of what I have said.

Austria-Hungary is for the time being not her own mistress but simply

the vassal of the German Government.

We must face the facts as they are and act upon them without sentiment

in this stern business. The Government of Austria and Hungary is not

acting upon its own initiative or in response to the wishes and feelings

of its own peoples, but as the instrument of another nation. We must

meet its force with our own and regard the Central Powers as but one.

The war can be successfully conducted in no other way.

The same logic would lead also to a declaration of war against Turkey

and Bulgaria. They also are the tools of Germany, but they are mere

tools and do not yet stand in the direct path of our necessary action.

We shall go wherever the necessities of this war carry us, but it seems

to me that we should go only where immediate and practical

considerations lead us, and not heed any others.

The financial and military measures which must be adopted will suggest

themselves as the war and its undertakings develop, but I will take the

liberty of proposing to you certain other acts of legislation which seem

to me to be needed for the support of the war and for the release of our

whole force and energy.

It will be necessary to extend in certain particulars the legislation of

the last session with regard to alien enemies, and also necessary, I

believe, to create a very definite and particular control over the

entrance and departure of all persons into and from the United States.

Legislation should be enacted defining as a criminal offense every

wilful violation of the presidential proclamation relating to alien

enemies promulgated under section 4o67 of the revised statutes and

providing appropriate punishments; and women, as well as men, should be

included under the terms of the acts placing restraints upon alien

enemies.

It is likely that as time goes on many alien enemies will be willing to

be fed and housed at the expense of the Government in the detention

camps, and it would be the purpose of the legislation I have suggested

to confine offenders among them in the penitentiaries and other similar

institutions where they could be made to work as other criminals do.

Recent experience has convinced me that the Congress must go further in

authorizing the Government to set limits to prices. The law of supply

and demand, I am sorry to say, has been replaced by the law of

unrestrained selfishness. While we have eliminated profiteering in

several branches of industry, it still runs impudently rampant in

others. The farmers for example, complain with a great deal of justice

that, while the regulation of food prices restricts their incomes, no

restraints are placed upon the prices of most of the things they must

themselves purchase; and similar inequities obtain on all sides.

It is imperatively necessary that the consideration of the full use of

the water power of the country, and also of the consideration of the

systematic and yet economical development of such of the natural

resources of the country as are still under the control of the Federal

Government should be immediately resumed and affirmatively and

constructively dealt with at the earliest possible moment. The pressing

need of such legislation is daily becoming more obvious.

The legislation proposed at the last session with regard to regulated

combinations among our exporters in order to provide for our foreign

trade a more effective organization and method of co-operation ought by

all means to be completed at this session.

And I beg that the members of the House of Representatives will permit

me to express the opinion that it will be impossible to deal in any but

a very wasteful and extravagant fashion with the enormous appropriations

of the public moneys which must continue to be made if the war is to be

properly sustained, unless the House will consent to return to its

former practice of initiating and preparing all appropriation bills

through a single committee, in order that responsibility may be

centered, expenditures standardized and made uniform, and waste and

duplication as much as possible avoided.

Additional legislation may also become necessary before the present

Congress again adjourns in order to effect the most efficient

co-ordination and operation of the railways and other transportation

systems of the country; but to that I shall, if circumstances should

demand, call the attention of Congress upon another occasion.

If I have overlooked anything that ought to be done for the more

effective conduct of the war, your own counsels will supply the

omission. What I am perfectly clear about is that in the present session

of the Congress our whole attention and energy should be concentrated on

the vigorous, rapid and successful prosecution of the great task of

winning the war.

We can do this with all the greater zeal and enthusiasm because we know

that for us this is a war of high principle, debased by no selfish

ambition of conquest or spoliation; because we know, and all the world

knows, that we have been forced into it to save the very institutions we

five under from corruption and destruction. The purpose of the Central

Powers strikes straight at the very heart of everything we believe in;

their methods of warfare outrage every principle of humanity and of

knightly honor; their intrigue has corrupted the very thought and spirit

of many of our people; their sinister and secret diplomacy has sought to

take our very territory away from us and disrupt the union of the

states. Our safety would be at an end, our honor forever sullied and

brought into contempt, were we to permit their triumph. They are

striking at the very existence of democracy and liberty.

It is because it is for us a war of high, disinterested purpose, in

which all the free peoples of the world are banded together for the

vindication of right, a war for the preservation of our nation, of all

that it has held dear, of principle and of purpose, that we feel

ourselves doubly constrained to propose for its outcome only that which

is righteous and of irreproachable intention, for our foes as well as

for our friends. The cause being just and holy, the settlement must be

of like motive and equality. For this we can fight, but for nothing less

noble or less worthy of our traditions. For this cause we entered the

war and for this cause will we battle until the last gun is fired.

I have spoken plainly because this seems to me the time when it is most

necessary to speak plainly, in order that all the world may know that,

even in the heat and ardor of the struggle and when our whole thought is

of carrying the war through to its end, we have not forgotten any ideal

or principle for which the name of America has been held in honor among

the nations and for which it has been our glory to contend in the great

generations that went before us. A supreme moment of history has come.

The eyes of the people have been opened and they see. The hand of God is

laid upon the nations. He will show them favor, I devoutly believe, only

if they rise to the clear heights of His own justice and mercy.

***

State of the Union Address

Woodrow Wilson

December 2, 1918

GENTLEMEN OF THE CONGRESS:

The year that has elapsed since I last stood before you to fulfil my

constitutional duty to give to the Congress from time to time

information on the state of the Union has been so crowded with great

events, great processes, and great results that I cannot hope to give

you an adequate picture of its transactions or of the far-reaching

changes which have been wrought of our nation and of the world. You have

yourselves witnessed these things, as I have. It is too soon to assess

them; and we who stand in the midst of them and are part of them are

less qualified than men of another generation will be to say what they

mean, or even what they have been. But some great outstanding facts are

unmistakable and constitute, in a sense, part of the public business

with which it is our duty to deal. To state them is to set the stage for

the legislative and executive action which must grow out of them and

which we have yet to shape and determine.

A year ago we had sent 145,918 men overseas. Since then we have sent

1,950,513, an average of 162,542 each month, the number in fact rising,

in May last, to 245,951, in June to 278,760, in July to 307,182, and

continuing to reach similar figures in August and September, in August

289,570 and in September 257,438. No such movement of troops ever took

place before, across three thousand miles of sea, followed by adequate

equipment and supplies, and carried safely through extraordinary dangers

of attack,-dangers which were alike strange and infinitely difficult to

guard against. In all this movement only seven hundred and fifty-eight

men were lost by enemy attack, six hundred and thirty of whom were upon

a single English transport which was sunk near the Orkney Islands.

I need not tell you what lay back of this great movement of men and

material. It is not invidious to say that back of it lay a supporting

organization of the industries of the country and of all its productive

activities more complete, more thorough in method and effective in

result, more spirited and unanimous in purpose and effort than any other

great belligerent had been able to effect. We profited greatly by the

experience of the nations which had already been engaged for nearly

three years in the exigent and exacting business, their every resource

and every executive proficiency taxed to the utmost. We were their

pupils. But we learned quickly and acted with a promptness and a

readiness of cooperation that justify our great pride that we were able

to serve the world with unparalleled energy and quick accomplishment.

But it is not the physical scale and executive efficiency of

preparation, supply, equipment and despatch that I would dwell upon, but

the mettle and quality of the officers and men we sent over and of the

sailors who kept the seas, and the spirit of the nation that stood

behind them. No soldiers or sailors ever proved themselves more quickly

ready for the test of battle or acquitted themselves with more splendid

courage and achievement when put to the test. Those of us who played

some part in directing the great processes by which the war was pushed

irresistibly forward to the final triumph may now forget all that and

delight our thoughts with the story of what our men did. Their officers

understood the grim and exacting task they had undertaken and performed

it with an audacity, efficiency, and unhesitating courage that touch the

story of convoy and battle with imperishable distinction at every turn,

whether the enterprise were great or small, from their great chiefs,

Pershing and Sims, down to the youngest lieutenant; and their men were

worthy of them,-such men as hardly need to be commanded, and go to their

terrible adventure blithely and with the quick intelligence of those who

know just what it is they would accomplish. I am proud to be the

fellow-countryman of men of such stuff and valor. Those of us who stayed

at home did our duty; the war could not have been won or the gallant men

who fought it given their opportunity to win it otherwise; but for many

a long day we shall think ourselves “accurs’d we were not there, and

hold our manhoods cheap while any speaks that fought” with these at St.

Mihiel or Thierry. The memory of those days of triumphant battle will go

with these fortunate men to their graves; and each will have his

favorite memory. “Old men forget; yet all shall be forgot, but hell

remember with advantages what feats he did that day!”

What we all thank God for with deepest gratitude is that our men went in

force into the line of battle just at the critical moment when the whole

fate of the world seemed to hang in the balance and threw their fresh

strength into the ranks of freedom in time to turn the whole tide and

sweep of the fateful struggle,-turn it once for all, so that thenceforth

it was back, back, back for their enemies, always back, never again

forward! After that it was only a scant four months before the

commanders of the Central Empires knew themselves beaten; and now their

very empires are in liquidation!

And throughout it all how fine the spirit of the nation was: what unity

of purpose, what untiring zeal! What elevation of purpose ran through

all its splendid display of strength, its untiring accomplishment! I

have said that those of us who stayed at home to do the work of

organization and supply will always wish that we had been with the men

whom we sustained by our labor; but we can never be ashamed. It has been

an inspiring thing to be here in the midst of fine men who had turned

aside from every private interest of their own and devoted the whole of

their trained capacity to the tasks that supplied the sinews of the

whole great undertaking! The patriotism, the unselfishness, the

thoroughgoing devotion and distinguished capacity that marked their

toilsome labors, day after day, month after month, have made them fit

mates and comrades of the men in the trenches and on the sea. And not

the men here in Washington only. They have but directed the vast

achievement. Throughout innumerable factories, upon innumerable farms,

in the depths of coal mines and iron mines and copper mines, wherever

the stuffs of industry were to be obtained and prepared, in the

shipyards, on the railways, at the docks, on the sea, in every labor

that was needed to sustain the battle lines, men have vied with each

other to do their part and do it well. They can look any man-at-arms in

the face, and say, We also strove to win and gave the best that was in

us to make our fleets and armies sure of their triumph!

And what shall we say of the women,-of their instant intelligence,

quickening every task that they touched; their capacity for organization

and cooperation, which gave their action discipline and enhanced the

effectiveness of everything they attempted; their aptitude at tasks to

which they had never before set their hands; their utter self-sacrifice

alike in what they did and in what they gave? Their contribution to the

great result is beyond appraisal. They have added a new lustre to the

annals of American womanhood.

The least tribute we can pay them is to make them the equals of men in

political rights as they have proved themselves their equals in every

field of practical work they have entered, whether for themselves or for

their country. These great days of completed achievement would be sadly

marred were we to omit that act of justice. Besides the immense

practical services they have rendered the women of the country have been

the moving spirits in the systematic economies by which our people have

voluntarily assisted to supply the suffering peoples of the world and

the armies upon every front with food and everything else that we had

that might serve the common cause. The details of such a story can never

be fully written, but we carry them at our hearts and thank God that we

can say that we are the kinsmen of such.

And now we are sure of the great triumph for which every sacrifice was

made. It has come, come in its completeness, and with the pride and

inspiration of these days of achievement quick within us, we turn to the

tasks of peace again,-a peace secure against the violence of

irresponsible monarchs and ambitious military coteries and made ready

for a new order, for new foundations of justice and fair dealing.

We are about to give order and organization to this peace not only for

ourselves but for the other peoples of the world as well, so far as they

will suffer us to serve them. It is international justice that we seek,

not domestic safety merely. Our thoughts have dwelt of late upon Europe,

upon Asia, upon the near and the far East, very little upon the acts of

peace and accommodation that wait to be performed at our own doors.

While we are adjusting our relations with the rest of the world is it

not of capital importance that we should clear away all grounds of

misunderstanding with our immediate neighbors and give proof of the

friendship we really feel? I hope that the members of the Senate will

permit me to speak once more of the unratified treaty of friendship and

adjustment with the Republic of Colombia. I very earnestly urge upon

them an early and favorable action upon that vital matter. I believe

that they will feel, with me, that the stage of affairs is now set for

such action as will be not only just but generous and in the spirit of

the new age upon which we have so happily entered.

So far as our domestic affairs are concerned the problem of our return

to peace is a problem of economic and industrial readjustment. That

problem is less serious for us than it may turn out too he for the

nations which have suffered the disarrangements and the losses of war

longer than we. Our people, moreover, do not wait to be coached and led.

They know their own business, are quick and resourceful at every

readjustment, definite in purpose, and self-reliant in action. Any

leading strings we might seek to put them in would speedily become

hopelessly tangled because they would pay no attention to them and go

their own way. All that we can do as their legislative and executive

servants is to mediate the process of change here, there, and elsewhere

as we may. I have heard much counsel as to the plans that should be

formed and personally conducted to a happy consummation, but from no

quarter have I seen any general scheme of “reconstruction” emerge which

I thought it likely we could force our spirited business men and

self-reliant laborers to accept with due pliancy and obedience.

While the war lasted we set up many agencies by which to direct the

industries of the country in the services it was necessary for them to

render, by which to make sure of an abundant supply of the materials

needed, by which to check undertakings that could for the time be

dispensed with and stimulate those that were most serviceable in war, by

which to gain for the purchasing departments of the Government a certain

control over the prices of essential articles and materials, by which to

restrain trade with alien enemies, make the most of the available

shipping, and systematize financial transactions, both public and

private, so that there would be no unnecessary conflict or confusion,-by

which, in short, to put every material energy of the country in harness

to draw the common load and make of us one team in the accomplishment of

a great task. But the moment we knew the armistice to have been signed

we took the harness off. Raw materials upon which the Government had

kept its hand for fear there should not be enough for the industries

that supplied the armies have been released and put into the general

market again. Great industrial plants whose whole output and machinery

had been taken over for the uses of the Government have been set free to

return to the uses to which they were put before the war. It has not

been possible to remove so readily or so quickly the control of

foodstuffs and of shipping, because the world has still to be fed from

our granaries and the ships are still needed to send supplies to our men

overseas and to bring the men back as fast as the disturbed conditions

on the other side of the water permit; but even there restraints are

being relaxed as much as possible and more and more as the weeks go by.

Never before have there been agencies in existence in this country which

knew so much of the field of supply, of labor, and of industry as the

War Industries Board, the War Trade Board, the Labor Department, the

Food Administration, and the Fuel Administration have known since their

labors became thoroughly systematized; and they have not been isolated

agencies; they have been directed by men who represented the permanent

Departments of the Government and so have been the centres of unified

and cooperative action. It has been the policy of the Executive,

therefore, since the armistice was assured (which is in effect a

complete submission of the enemy) to put the knowledge of these bodies

at the disposal of the business men of the country and to offer their

intelligent mediation at every point and in every matter where it was

desired. It is surprising how fast the process of return to a peace

footing has moved in the three weeks since the fighting stopped. It

promises to outrun any inquiry that may be instituted and any aid that

may be offered. It will not be easy to direct it any better than it will

direct itself. The American business man is of quick initiative.

The ordinary and normal processes of private initiative will not,

however, provide immediate employment for all of the men of our

returning armies. Those who are of trained capacity, those who are

skilled workmen, those who have acquired familiarity with established

businesses, those who are ready and willing to go to the farms, all

those whose aptitudes are known or will be sought out by employers will

find no difficulty, it is safe to say, in finding place and employment.

But there will be others who will be at a loss where to gain a

livelihood unless pains are taken to guide them and put them in the way

of work. There will be a large floating residuum of labor which should

not be left wholly to shift for itself. It seems to me important,

therefore, that the development of public works of every sort should be

promptly resumed, in order that opportunities should be created for

unskilled labor in particular, and that plans should be made for such

developments of our unused lands and our natural resources as we have

hitherto lacked stimulation to undertake.

I particularly direct your attention to the very practical plans which

the Secretary of the Interior has developed in his annual report and

before your Committees for the reclamation of arid, swamp, and cutover

lands which might, if the States were willing and able to cooperate,

redeem some three hundred million acres of land for cultivation. There

are said to be fifteen or twenty million acres of land in the West, at

present arid, for whose reclamation water is available, if properly

conserved. There are about two hundred and thirty million acres from

which the forests have been cut but which have never yet been cleared

for the plow and which lie waste and desolate. These lie scattered all

over the Union. And there are nearly eighty million acres of land that

lie under swamps or subject to periodical overflow or too wet for

anything but grazing, which it is perfectly feasible to drain and

protect and redeem. The Congress can at once direct thousands of the

returning soldiers to the reclamation of the arid lands which it has

already undertaken, if it will but enlarge the plans and appropriations

which it has entrusted to the Department of the Interior. It is possible

in dealing with our unused land to effect a great rural and agricultural

development which will afford the best sort of opportunity to men who

want to help themselves and the Secretary of the Interior has thought

the possible methods out in a way which is worthy of your most friendly

attention.

I have spoken of the control which must yet for a while, perhaps for a

long long while, be exercised over shipping because of the priority of

service to which our forces overseas are entitled and which should also

be accorded the shipments which are to save recently liberated peoples

from starvation and many devastated regions from permanent ruin. May I

not say a special word about the needs of Belgium and northern France?

No sums of money paid by way of indemnity will serve of themselves to

save them from hopeless disadvantage for years to come. Something more

must be done than merely find the money. If they had money and raw

materials in abundance to-morrow they could not resume their place in

the industry of the world to-morrow,-the very important place they held

before the flame of war swept across them. Many of their factories are

razed to the ground. Much of their machinery is destroyed or has been

taken away. Their people are scattered and many of their best workmen

are dead. Their markets will be taken by others, if they are not in some

special way assisted to rebuild their factories and replace their lost

instruments of manufacture. They should not be left to the vicissitudes

of the sharp competition for materials and for industrial facilities

which is now to set in. I hope, therefore, that the Congress will not be

unwilling, if it should become necessary, to grant to some such agency

as the War Trade Board the right to establish priorities of export and

supply for the benefit of these people whom we have been so happy to

assist in saving from the German terror and whom we must not now

thoughtlessly leave to shift for themselves in a pitiless competitive

market.

For the steadying, and facilitation of our own domestic business

readjustments nothing is more important than the immediate determination

of the taxes that are to be levied for 1918, 1919, and 1920. As much of

the burden of taxation must be lifted from business as sound methods of

financing the Government will permit, and those who conduct the great

essential industries of the country must be told as exactly as possible

what obligations to the Government they will be expected to meet in the

years immediately ahead of them. It will be of serious consequence to

the country to delay removing all uncertainties in this matter a single

day longer than the right processes of debate justify. It is idle to

talk of successful and confident business reconstruction before those

uncertainties are resolved.

If the war had continued it would have been necessary to raise at least

eight billion dollars by taxation payable in the year 1919; but the war

has ended and I agree with the Secretary of the Treasury that it will be

safe to reduce the amount to six billions. An immediate rapid decline in

the expenses of the Government is not to be looked for. Contracts made

for war supplies will, indeed, be rapidly cancelled and liquidated, but

their immediate liquidation will make heavy drains on the Treasury for

the months just ahead of us. The maintenance of our forces on the other

side of the sea is still necessary. A considerable proportion of those

forces must remain in Europe during the period of occupation, and those

which are brought home will be transported and demobilized at heavy

expense for months to come. The interest on our war debt must of course

be paid and provision made for the retirement of the obligations of the

Government which represent it. But these demands will of course fall

much below what a continuation of military operations would have

entailed and six billions should suffice to supply a sound foundation

for the financial operations of the year.

I entirely concur with the Secretary of the Treasury in recommending

that the two billions needed in addition to the four billions provided

by existing law be obtained from the profits which have accrued and

shall accrue from war contracts and distinctively war business, but that

these taxes be confined to the war profits accruing in 1918, or in 1919

from business originating in war contracts. I urge your acceptance of

his recommendation that provision be made now, not subsequently, that

the taxes to be paid in 1920 should be reduced from six to four

billions. Any arrangements less definite than these would add elements

of doubt and confusion to the critical period of industrial readjustment

through which the country must now immediately pass, and which no true

friend of the nation’s essential business interests can afford to be

responsible for creating or prolonging. Clearly determined conditions,

clearly and simply charted, are indispensable to the economic revival

and rapid industrial development which may confidently be expected if we

act now and sweep all interrogation points away.

I take it for granted that the Congress will carry out the naval

programme which was undertaken before we entered the war. The Secretary

of the Navy has submitted to your Committees for authorization that part

of the programme which covers the building plans of the next three

years. These plans have been prepared along the lines and in accordance

with the policy which the Congress established, not under the

exceptional conditions of the war, but with the intention of adhering to

a definite method of development for the navy. I earnestly recommend the

uninterrupted pursuit of that policy. It would clearly be unwise for us

to attempt to adjust our programmes to a future world policy as yet

undetermined.

The question which causes me the greatest concern is the question of the

policy to be adopted towards the railroads. I frankly turn to you for

counsel upon it. I have no confident judgment of my own. I do not see

how any thoughtful man can have who knows anything of the complexity of

the problem. It is a problem which must be studied, studied immediately,

and studied without bias or prejudice. Nothing can be gained by becoming

partisans of any particular plan of settlement.

It was necessary that the administration of the railways should be taken

over by the Government so long as the war lasted. It would have been

impossible otherwise to establish and carry through under a single

direction the necessary priorities of shipment. It would have been

impossible otherwise to combine maximum production at the factories and

mines and farms with the maximum possible car supply to take the

products to the ports and markets; impossible to route troop shipments

and freight shipments without regard to the advantage or-disadvantage of

the roads employed; impossible to subordinate, when necessary, all

questions of convenience to the public necessity; impossible to give the

necessary financial support to the roads from the public treasury. But

all these necessities have now been served, and the question is, What is

best for the railroads and for the public in the future?

Exceptional circumstances and exceptional methods of administration were

not needed to convince us that the railroads were not equal to the

immense tasks of transportation imposed upon them by the rapid and

continuous development of the industries of the country. We knew that

already. And we knew that they were unequal to it partly because their

full cooperation was rendered impossible by law and their competition

made obligatory, so that it has been impossible to assign to them

severally the traffic which could best be carried by their respective

lines in the interest of expedition and national economy.

We may hope, I believe, for the formal conclusion of the war by treaty

by the time Spring has come. The twenty-one months to which the present

control of the railways is limited after formal proclamation of peace

shall have been made will run at the farthest, I take it for granted,

only to the January of 1921. The full equipment of the railways which

the federal administration had planned could not be completed within any

such period. The present law does not permit the use of the revenues of

the several roads for the execution of such plans except by formal

contract with their directors, some of whom will consent while some will

not, and therefore does not afford sufficient authority to undertake

improvements upon the scale upon which it would be necessary to

undertake them. Every approach to this difficult subject-matter of

decision brings us face to face, therefore, with this unanswered

question: What is it right that we should do with the railroads, in the

interest of the public and in fairness to their owners?

Let me say at once that I have no answer ready. The only thing that is

perfectly clear to me is that it is not fair either to the public or to

the owners of the railroads to leave the question unanswered and that it

will presently become my duty to relinquish control of the roads, even

before the expiration of the statutory period, unless there should

appear some clear prospect in the meantime of a legislative solution.

Their release would at least produce one element of a solution, namely

certainty and a quick stimulation of private initiative.

I believe that it will be serviceable for me to set forth as explicitly

as possible the alternative courses that lie open to our choice. We can

simply release the roads and go back to the old conditions of private

management, unrestricted competition, and multiform regulation by both

state and federal authorities; or we can go to the opposite extreme and

establish complete government control, accompanied, if necessary, by

actual government ownership; or we can adopt an intermediate course of

modified private control, under a more unified and affirmative public

regulation and under such alterations of the law as will permit wasteful

competition to be avoided and a considerable degree of unification of

administration to be effected, as, for example, by regional corporations

under which the railways of definable areas would be in effect combined

in single systems.

The one conclusion that I am ready to state with confidence is that it

would be a disservice alike to the country and to the owners of the

railroads to return to the old conditions unmodified. Those are

conditions of restraint without development. There is nothing

affirmative or helpful about them. What the country chiefly needs is

that all its means of transportation should be developed, its railways,

its waterways, its highways, and its countryside roads. Some new element

of policy, therefore, is absolutely necessary--necessary for the service

of the public, necessary for the release of credit to those who are

administering the railways, necessary for the protection of their

security holders. The old policy may be changed much or little, but

surely it cannot wisely be left as it was. I hope that the Con will have

a complete and impartial study of the whole problem instituted at once

and prosecuted as rapidly as possible. I stand ready and anxious to

release the roads from the present control and I must do so at a very

early date if by waiting until the statutory limit of time is reached I

shall be merely prolonging the period of doubt and uncertainty which is

hurtful to every interest concerned.

I welcome this occasion to announce to the Congress my purpose to join

in Paris the representatives of the governments with which we have been

associated in the war against the Central Empires for the purpose of

discussing with them the main features of the treaty of peace. I realize

the great inconveniences that will attend my leaving the country,

particularly at this time, but the conclusion that it was my paramount

duty to go has been forced upon me by considerations which I hope will

seem as conclusive to you as they have seemed to me.

The Allied governments have accepted the bases of peace which I outlined

to the Congress on the eighth of January last, as the Central Empires

also have, and very reasonably desire my personal counsel in their

interpretation and application, and it is highly desirable that I should

give it in order that the sincere desire of our Government to contribute

without selfish purpose of any kind to settlements that will be of

common benefit to all the nations concerned may be made fully manifest.

The peace settlements which are now to be agreed upon are of

transcendent importance both to us and to the rest of the world, and I

know of no business or interest which should take precedence of them.

The gallant men of our armed forces on land and sea have consciously

fought for the ideals which they knew to be the ideals of their country;

I have sought to express those ideals; they have accepted my statements

of them as the substance of their own thought and purpose, as the

associated governments have accepted them; I owe it to them to see to

it, so far as in me lies, that no false or mistaken interpretation is

put upon them, and no possible effort omitted to realize them. It is now

my duty to play my full part in making good what they offered their

life’s blood to obtain. I can think of no call to service which could

transcend this.

I shall be in close touch with you and with affairs on this side the

water, and you will know all that I do. At my request, the French and

English governments have absolutely removed the censorship of cable news

which until within a fortnight they had maintained and there is now no

censorship whatever exercised at this end except upon attempted trade

communications with enemy countries. It has been necessary to keep an

open wire constantly available between Paris and the Department of State

and another between France and the Department of War. In order that this

might be done with the least possible interference with the other uses

of the cables, I have temporarily taken over the control of both cables

in order that they may be used as a single system. I did so at the

advice of the most experienced cable officials, and I hope that the

results will justify my hope that the news of the next few months may

pass with the utmost freedom and with the least possible delay from each

side of the sea to the other.

May I not hope, Gentlemen of the Congress, that in the delicate tasks I

shall have to perform on the other side of the sea, in my efforts truly

and faithfully to interpret the principles and purposes of the country

we love, I may have the encouragement and the added strength of your

united support? I realize the magnitude and difficulty of the duty I am

undertaking; I am poignantly aware of its grave responsibilities. I am

the servant of the nation. I can have no private thought or purpose of

my own in performing such an errand. I go to give the best that is in me

to the common settlements which I must now assist in arriving at in

conference with the other working heads of the associated governments. I

shall count upon your friendly countenance and encouragement. I shall

not be inaccessible. The cables and the wireless will render me

available for any counsel or service you may desire of me, and I shall

be happy in the thought that I am constantly in touch with the weighty

matters of domestic policy with which we shall have to deal. I shall

make my absence as brief as possible and shall hope to return with the

happy assurance that it has been possible to translate into action the

great ideals for which America has striven.

***

State of the Union Address

Woodrow Wilson

December 2, 1919

TO THE SENATE AND HOUSE OF REPRESENTATIVES:

I sincerely regret that I cannot be present at the opening of this

session of the Congress. I am thus prevented from presenting in as

direct a way as I could wish the many questions that are pressing for

solution at this time. Happily, I have had the advantage of the advice

of the heads of the several executive departments who have kept in close

touch with affairs in their detail and whose thoughtful recommendations

I earnestly second.

In the matter of the railroads and the readjustment of their affairs

growing out of Federal control, I shall take the liberty at a later date

of addressing you.

I hope that Congress will bring to a conclusion at this session

legislation looking to the establishment of a budget system. That there

should be one single authority responsible for the making of all

appropriations and that appropriations should be made not independently

of each other, but with reference to one single comprehensive plan of

expenditure properly related to the nation’s income, there can be no

doubt I believe the burden of preparing the budget must, in the nature

of the case, if the work is to be properly done and responsibility

concentrated instead of divided, rest upon the executive. The budget so

prepared should be submitted to and approved or amended by a single

committee of each House of Congress and no single appropriation should

be made by the Congress, except such as may have been included in the

budget prepared by the executive or added by the particular committee of

Congress charged with the budget legislation.

Another and not less important aspect of the problem is the

ascertainment of the economy and efficiency with which the moneys

appropriated are expended. Under existing law the only audit is for the

purpose of ascertaining whether expenditures have been lawfully made

within the appropriations. No one is authorized or equipped to ascertain

whether the money has been spent wisely, economically and effectively.

The auditors should be highly trained officials with permanent tenure in

the Treasury Department, free of obligations to or motives of

consideration for this or any subsequent administration, and authorized

and empowered to examine into and make report upon the methods employed

and the results obtained by the executive departments of the Government.

Their reports should be made to the Congress and to the Secretary of the

Treasury.

I trust that the Congress will give its immediate consideration to the

problem of future taxation. Simplification of the income and profits

taxes has become an immediate necessity. These taxes performed

indispensable service during the war. They must, however, be simplified,

not only to save the taxpayer inconvenience and expense, but in order

that his liability may be made certain and definite.

With reference to the details of the Revenue Law, the Secretary of the

Treasury and the Commissioner of Internal Revenue will lay before you

for your consideration certain amendments necessary or desirable in

connection with the administration of the law-recommendations which have

my approval and support. It is of the utmost importance that in dealing

with this matter the present law should not be disturbed so far as

regards taxes for the calendar year 1920 payable in the calendar year

1921. The Congress might well consider whether the higher rates of

income and profits taxes can in peace times be effectively productive of

revenue, and whether they may not, on the contrary, be destructive of

business activity and productive of waste and inefficiency. There is a

point at which in peace times high rates of income and profits taxes

discourage energy, remove the incentive to new enterprises, encourage

extravagant expenditures and produce industrial stagnation with

consequent unemployment and other attendant evils.

The problem is not an easy one. A fundamental change has taken place

with reference to the position of America in the world’s affairs. The

prejudice and passions engendered by decades of controversy between two

schools of political and economic thought,-the one believers in

protection of American industries, the other believers in tariff for

revenue only,-must be subordinated to the single consideration of the

public interest in the light of utterly changed conditions. Before the

war America was heavily the debtor of the rest of the world and the

interest payments she had to make to foreign countries on American

securities held abroad, the expenditures of American travelers abroad

and the ocean freight charges she had to pay to others, about balanced

the value of her pre-war favorable balance of trade. During the war

America’s exports have been greatly stimulated, and increased prices

have increased their value. On the other hand, she has purchased a large

proportion of the American securities previously held abroad, has loaned

some $9,000,000,000 to foreign governments, and has built her own ships.

Our favorable balance of trade has thus been greatly increased and

Europe has been deprived of the means of meeting it heretofore existing.

Europe can have only three ways of meeting the favorable balance of

trade in peace times: by imports into this country of gold or of goods,

or by establishing new credits. Europe is in no position at the present

time to ship gold to us nor could we contemplate large further imports

of gold into this country without concern. The time has nearly passed

for international governmental loans and it will take time to develop in

this country a market for foreign securities. Anything, therefore, which

would tend to prevent foreign countries from settling for our exports by

shipments of goods into this country could only have the effect of

preventing them from paying for our exports and therefore of preventing

the exports from being made. The productivity of the country, greatly

stimulated by the war, must find an outlet by exports to foreign

countries, and any measures taken to prevent imports will inevitably

curtail exports, force curtailment of production, load the banking

machinery of the country with credits to carry unsold products and

produce industrial stagnation and unemployment. If we want to sell, we

must be prepared to buy. Whatever, therefore, may have been our views

during the period of growth of American business concerning tariff

legislation, we must now adjust our own economic life to a changed

condition growing out of the fact that American business is full grown

and that America is the greatest capitalist in the world.

No policy of isolation will satisfy the growing needs and opportunities

of America. The provincial standards and policies of the past, which

have held American business as if in a strait-jacket, must yield and

give way to the needs and exigencies of the new day in which we live, a

day full of hope and promise for American business, if we will but take

advantage of the opportunities that are ours for the asking. The recent

war has ended our isolation and thrown upon us a great duty and

responsibility. The United States must share the expanding world market.

The United States desires for itself only equal opportunity with the

other nations of the world, and that through the process of friendly

cooperation and fair competition the legitimate interests of the nations

concerned may be successfully and equitably adjusted.

There are other matters of importance upon which I urged action at the

last session of Congress which are still pressing for solution. I am

sure it is not necessary for me again to remind you that there is one

immediate and very practicable question resulting from the war which we

should meet in the most liberal spirit. It is a matter of recognition

and relief to our soldiers. I can do no better than to quote from my

last message urging this very action:

“We must see to it that our returning soldiers are assisted in every

practicable way to find the places for which they are fitted in the

daily work of the country. This can be done by developing and

maintaining upon an adequate scale the admirable organization created by

the Department of Labor for placing men seeking work; and it can also be

done, in at least one very great field, by creating new opportunities

for individual enterprise. The Secretary of the Interior has pointed out

the way by which returning soldiers may be helped to find and take up

land in the hitherto undeveloped regions of the country which the

Federal Government has already prepared, or can readily prepare, for

cultivation and also on many of the cutover or neglected areas which lie

within the limits of the older states; and I once more take the liberty

of recommending very urgently that his plans shall receive the immediate

and substantial support of the Congress.”

In the matter of tariff legislation, I beg to call your attention to the

statements contained in my last message urging legislation with

reference to the establishment of the chemical and dyestuffs industry in

America:

“Among the industries to which special consideration should be given is

that of the manufacture of dyestuffs and related chemicals. Our complete

dependence upon German supplies before the war made the interruption of

trade a cause of exceptional economic disturbance. The close relation

between the manufacture of dyestuffs, on the one hand, and of explosive

and poisonous gases, on the other, moreover, has given the industry an

exceptional significance and value. Although the United States will

gladly and unhesitatingly join in the programme of international

disarmament, it will, nevertheless, be a policy of obvious prudence to

make certain of the successful maintenance of many strong and

well-equipped chemical plants. The German chemical industry, with which

we will be brought into competition, was and may well be again, a

thoroughly knit monopoly capable of exercising a competition of a

peculiarly insidious and dangerous kind.”

During the war the farmer performed a vital and willing service to the

nation. By materially increasing the production of his land, he supplied

America and the Allies with the increased amounts of food necessary to

keep their immense armies in the field. He indispensably helped to win

the war. But there is now scarcely less need of increasing the

production in food -and the necessaries of life. I ask the Congress to

consider means of encouraging effort along these lines. The importance

of doing everything possible to promote production along economical

lines, to improve marketing, and to make rural life more attractive and

healthful, is obvious. I would urge approval of the plans already

proposed to the Congress by the Secretary of Agriculture, to secure the

essential facts required for the proper study of this question, through

the proposed enlarged programmes for farm management studies and crop

estimates. I would urge, also, the continuance of Federal participation

in the building of good roads, under the terms of existing law and under

the direction of present agencies; the need of further action on the

part of the States and the Federal Government to preserve and develop

our forest resources, especially through the practice of better forestry

methods on private holdings and the extension of the publicly owned

forests; better support for country schools and the more definite

direction of their courses of study along lines related to rural

problems; and fuller provision for sanitation in rural districts and the

building up of needed hospital and medical facilities in these

localities. Perhaps the way might be cleared for many of these desirable

reforms by a fresh, comprehensive survey made of rural conditions by a

conference composed of representatives of the farmers and of the

agricultural agencies responsible for leadership.

I would call your attention to the widespread condition of political

restlessness in our body politic. The causes of this unrest, while

various and complicated, are superficial rather than deep-seated.

Broadly, they arise from or are connected with the failure on the part

of our Government to arrive speedily at a just and permanent peace

permitting return to normal conditions, from the transfusion of radical

theories from seething European centers pending such delay, from

heartless profiteering resulting in the increase of the cost of living,

and lastly from the machinations of passionate and malevolent agitators.

With the return to normal conditions, this unrest will rapidly

disappear. In the meantime, it does much evil. It seems to me that in

dealing with this situation Congress should not be impatient or drastic

but should seek rather to remove the causes. It should endeavor to bring

our country back speedily to a peace basis, with ameliorated living

conditions under the minimum of restrictions upon personal liberty that

is consistent with our reconstruction problems. And it should arm the

Federal Government with power to deal in its criminal courts with those

persons who by violent methods would abrogate our time-tested

institutions. With the free expression of opinion and with the advocacy

of orderly political change, however fundamental, there must be no

interference, but towards passion and malevolence tending to incite

crime and insurrection under guise of political evolution there should

be no leniency. Legislation to this end has been recommended by the

Attorney General and should be enacted. In this direct connection, I

would call your attention to my recommendations on August 8th, pointing

out legislative measures which would be effective in controlling and

bringing down the present cost of living, which contributes so largely

to this unrest. On only one of these recommendations has the Congress

acted. If the Government’s campaign is to be effective, it is necessary

that the other steps suggested should be acted on at once.

I renew and strongly urge the necessity of the extension of the present

Food Control Act as to the period of time in which it shall remain in

operation. The Attorney General has submitted a bill providing for an

extension of this Act for a period of six months. As it now stands, it

is limited in operation to the period of the war and becomes inoperative

upon the formal proclamation of peace. It is imperative that it should

be extended at once. The Department of justice has built up extensive

machinery for the purpose of enforcing its provisions; all of which must

be abandoned upon the conclusion of peace unless the provisions of this

Act are extended.

During this period the Congress will have an opportunity to make similar

permanent provisions and regulations with regard to all goods destined

for interstate commerce and to exclude them from interstate shipment, if

the requirements of the law are not compiled with. Some such regulation

is imperatively necessary. The abuses that have grown up in the

manipulation of prices by the withholding of foodstuffs and other

necessaries of life cannot otherwise be effectively prevented. There can

be no doubt of either the necessity of the legitimacy of such measures.

As I pointed out in my last message, publicity can accomplish a great

deal in this campaign. The aims of the Government must be clearly

brought to the attention of the consuming public, civic organizations

and state officials, who are in a position to lend their assistance to

our efforts. You have made available funds with which to carry on this

campaign, but there is no provision in the law authorizing their

expenditure for the purpose of making the public fully informed about

the efforts of the Government. Specific recommendation has been made by

the Attorney General in this regard. I would strongly urge upon you its

immediate adoption, as it constitutes one of the preliminary steps to

this campaign.

I also renew my recommendation that the Congress pass a law regulating

cold storage as it is regulated, for example, by the laws of the State

of New Jersey, which limit the time during which goods may be kept in

storage, prescribe the method of disposing of them if kept beyond the

permitted period, and require that goods released from storage shall in

all cases bear the date of their receipt. It would materially add to the

serviceability of the law, for the purpose we now have in view, if it

were also prescribed that all goods released from storage for interstate

shipment should have plainly marked upon each package the selling or

market price at which they went into storage. By this means the

purchaser would always be able to learn what profits stood between him

and the producer or the wholesale dealer.

I would also renew my recommendation that all goods destined for

interstate commerce should in every case, where their form or package

makes it possible, be plainly marked with the price at which they left

the hands of the producer.

We should formulate a law requiring a Federal license of all

corporations engaged in interstate commerce and embodying in the license

or in the conditions under which it is to be issued, specific

regulations designed to secure competitive selling and prevent

unconscionable profits in the method of marketing. Such a law would

afford a welcome opportunity to effect other much needed reforms in the

business of interstate shipment and in the methods of corporations which

are engaged in it; but for the moment I confine my recommendations to

the object immediately in hand, which is to lower the cost of living.

No one who has observed the march of events in the last year can fail to

note the absolute need of a definite programme to bring about an

improvement in the conditions of labor. There can be no settled

conditions leading to increased production and a reduction in the cost

of living if labor and capital are to be antagonists instead of

partners. Sound thinking and an honest desire to serve the interests of

the whole nation, as distinguished from the interests of a class, must

be applied to the solution of this great and pressing problem. The

failure of other nations to consider this matter in a vigorous way has

produced bitterness and jealousies and antagonisms, the food of

radicalism. The only way to keep men from agitating against grievances

is to remove the grievances. An unwillingness even to discuss these

matters produces only dissatisfaction and gives comfort to the extreme

elements in our country which endeavor to stir up disturbances in order

to provoke governments to embark upon a course of retaliation and

repression. The seed of revolution is repression. The remedy for these

things must not be negative in character. It must be constructive. It

must comprehend the general interest. The real antidote for the unrest

which manifests itself is not suppression, but a deep consideration of

the wrongs that beset our national life and the application of a remedy.

Congress has already shown its willingness to deal with these industrial

wrongs by establishing the eight-hour day as the standard in every field

of labor. It has sought to find a way to prevent child labor. It has

served the whole country by leading the way in developing the means of

preserving and safeguarding lives and health in dangerous industries. It

must now help in the difficult task of finding a method that will bring

about a genuine democratization of industry, based upon the full

recognition of the right of those who work, in whatever rank, to

participate in some organic way in every decision which directly affects

their welfare. It is with this purpose in mind that I called a

conference to meet in Washington on December 1st, to consider these

problems in all their broad aspects, with the idea of bringing about a

better understanding between these two interests.

The great unrest throughout the world, out of which has emerged a demand

for an immediate consideration of the difficulties between capital and

labor, bids us put our own house in order. Frankly, there can be no

permanent and lasting settlements between capital and labor which do not

recognize the fundamental concepts for which labor has been struggling

through the years. The whole world gave its recognition and endorsement

to these fundamental purposes in the League of Notions. The statesmen

gathered at Versailles recognized the fact that world stability could

not be had by reverting to industrial standards and conditions against

which the average workman of the world had revolted. It is, therefore,

the task of the states men of this new day of change and readjustment to

recognize world conditions and to seek to bring about, through

legislation, conditions that will mean the ending of age-long

antagonisms between capital and labor and that will hopefully lead to

the building up of a comradeship which will result not only in greater

contentment among the mass of workmen but also bring about a greater

production and a greater prosperity to business itself.

To analyze the particulars in the demands of labor is to admit the

justice of their complaint in many matters that lie at their basis. The

workman demands an adequate wage, sufficient to permit him to live in

comfort, unhampered by the fear of poverty and want in his old age. He

demands the right to live and the right to work amidst sanitary

surroundings, both in home and in workshop, surroundings that develop

and do not retard his own health and wellbeing; and the right to provide

for his children’s wants in the matter of health and education. In other

words, it is his desire to make the conditions of his life and the lives

of those dear to him tolerable and easy to bear.

The establishment of the principles regarding labor laid down ill the

covenant of the League of Nations offers us the way to industrial peace

and conciliation. No other road lies open to us. Not to pursue this one

is longer to invite enmities, bitterness, and antagonisms which in the

end only lead to industrial and social disaster. The unwilling workman

is not a profitable servant. An employee whose industrial life is hedged

about by hard and unjust conditions, which he did not create and over

which he has no control, lacks that fine spirit of enthusiasm and

volunteer effort which are the necessary ingredients of a great

producing entity. Let us be frank about this solemn matter. The

evidences of world-wide unrest which manifest themselves in violence

throughout the world bid us pause and consider the means to be found to

stop the spread of this contagious thing before it saps the very

vitality of the nation itself. Do we gain strength by withholding the

remedy? Or is it not the business of statesmen to treat these

manifestations of unrest which meet us on every hand as evidences of an

economic disorder and to apply constructive remedies wherever necessary,

being sure that in the application of the remedy we touch not the vital

tissues of our industrial and economic life? There can be no recession

of the tide of unrest until constructive instrumentalities are set up to

stem that tide.

Governments must recognize the right of men collectively to bargain for

humane objects that have at their base the mutual protection and welfare

of those engaged in all industries. Labor must not be longer treated as

a commodity. It must be regarded as the activity of human beings,

possessed of deep yearnings and desires. The business man gives his best

thought to the repair and replenishment of his machinery, so that its

usefulness will not be impaired and its power to produce may always be

at its height and kept in full vigor and motion. No less regard ought to

be paid to the human machine, which after all propels the machinery of

the world and is the great dynamic force that lies back of all industry

and progress. Return to the old standards of wage and industry in

employment are unthinkable. The terrible tragedy of war which has just

ended and which has brought the world to the verge of chaos and disaster

would be in vain if there should ensue a return to the conditions of the

past. Europe itself, whence has come the unrest which now holds the

world at bay, is an example of standpatism in these vital human matters

which America might well accept as an example, not to be followed but

studiously to be avoided. Europe made labor the differential, and the

price of it all is enmity and antagonism and prostrated industry, The

right of labor to live in peace and comfort must be recognized by

governments and America should be the first to lay the foundation stones

upon which industrial peace shall be built.

Labor not only is entitled to an adequate wage, but capital should

receive a reasonable return upon its investment and is entitled to

protection at the hands of the Government in every emergency. No

Government worthy of the name can “play” these elements against each

other, for there is a mutuality of interest between them which the

Government must seek to express and to safeguard at all cost.

The right of individuals to strike is inviolate and ought not to be

interfered with by any process of Government, but there is a predominant

right and that is the right of the Government to protect all of its

people and to assert its power and majesty against the challenge of any

class. The Government, when it asserts that right, seeks not to

antagonize a class but simply to defend the right of the whole people as

against the irreparable harm and injury that might be done by the

attempt by any class to usurp a power that only Government itself has a

right to exercise as a protection to all.

In the matter of international disputes which have led to war, statesmen

have sought to set up as a remedy arbitration for war. Does this not

point the way for the settlement of industrial disputes, by the

establishment of a tribunal, fair and just alike to all, which will

settle industrial disputes which in the past have led to war and

disaster? America, witnessing the evil consequences which have followed

out of such disputes between these contending forces, must not admit

itself impotent to deal with these matters by means of peaceful

processes. Surely, there must be some method of bringing together in a

council of peace and amity these two great interests, out of which will

come a happier day of peace and cooperation, a day that will make men

more hopeful and enthusiastic in their various tasks, that will make for

more comfort and happiness in living and a more tolerable condition

among all classes of men. Certainly human intelligence can devise some

acceptable tribunal for adjusting the differences between capital and

labor.

This is the hour of test and trial for America. By her prowess and

strength, and the indomitable courage of her soldiers, she demonstrated

her power to vindicate on foreign battlefields her conceptions of

liberty and justice. Let not her influence as a mediator between capital

and labor be weakened and her own failure to settle matters of purely

domestic concern be proclaimed to the world. There are those in this

country who threaten direct action to force their will, upon a majority.

Russia today, with its blood and terror, is a painful object lesson of

the power of minorities. It makes little difference what minority it is;

whether capital or labor, or any other class; no sort of privilege will

ever be permitted to dominate this country. We are a partnership or

nothing that is worth while. We are a democracy, where the majority are

the masters, or all the hopes and purposes of the men who founded this

government have been defeated and forgotten. In America there is but one

way by which great reforms can be accomplished and the relief sought by

classes obtained, and that is through the orderly processes of

representative government. Those who would propose any other method of

reform are enemies of this country. America will not be daunted by

threats nor lose her composure or calmness in these distressing times.

We can afford, in the midst of this day of passion and unrest, to be

self-contained and sure. The instrument of all reform in America is the

ballot. The road to economic and social reform in America is the

straight road of justice to all classes and conditions of men. Men have

but to follow this road to realize the full fruition of their objects

and purposes. Let those beware who would take the shorter road of

disorder and revolution. The right road is the road of justice and

orderly process.

***

State of the Union Address

Woodrow Wilson

December 7, 1920

GENTLEMEN OF THE CONGRESS:

When I addressed myself to performing the duty laid upon the President

by the Constitution to present to you an annual report on the state of

the Union, I found my thought dominated by an immortal sentence of

Abraham Lincoln’s--“Let us have faith that right makes might, and in

that faith let us dare to do our duty as we understand it”--a sentence

immortal because it embodies in a form of utter simplicity and purity

the essential faith of the nation, the faith in which it was conceived,

and the faith in which it has grown to glory and power. With that faith

and the birth of a nation founded upon it came the hope into the world

that a new order would prevail throughout the affairs of mankind, an

order in which reason and right would take precedence over covetousness

and force; and I believe that I express the wish and purpose of every

thoughtful American when I say that this sentence marks for us in the

plainest manner the part we should play alike in the arrangement of our

domestic affairs and in our exercise of influence upon the affairs of

the world.

By this faith, and by this faith alone, can the world be lifted out of

its present confusion and despair. It was this faith which prevailed

over the wicked force of Germany. You will remember that the beginning

of the end of the war came when the German people found themselves face

to face with the conscience of the world and realized that right was

everywhere arrayed against the wrong that their government was

attempting to perpetrate. I think, therefore, that it is true to say

that this was the faith which won the war. Certainly this is the faith

with which our gallant men went into the field and out upon the seas to

make sure of victory.

This is the mission upon which Democracy came into the world. Democracy

is an assertion of the right of the individual to live and to be treated

justly as against any attempt on the part of any combination of

individuals to make laws which will overburden him or which will destroy

his equality among his fellows in the matter of right or privilege; and

I think we all realize that the day has come when Democracy is being put

upon its final test. The Old World is just now suffering from a wanton

rejection of the principle of democracy and a substitution of the

principle of autocracy as asserted in the name, but without the

authority and sanction, of the multitude. This is the time of all others

when Democracy should prove its purity and its spiritual power to

prevail. It is surely the manifest destiny of the United States to lead

in the attempt to make this spirit prevail.

There are two ways in which the United States can assist to accomplish

this great object. First, by offering the example within her own borders

of the will and power of Democracy to make and enforce laws which are

unquestionably just and which are equal in their administration-laws

which secure its full right to Labor and yet at the same time safeguard

the integrity of property, and particularly of that property which is

devoted to the development of industry and the increase of the necessary

wealth of the world. Second, by standing for right and justice as toward

individual nations. The law of Democracy is for the protection of the

weak, and the influence of every democracy in the world should be for

the protection of the weak nation, the nation which is struggling toward

its right and toward its proper recognition and privilege in the family

of nations.

The United States cannot refuse this role of champion without putting

the stigma of rejection upon the great and devoted men who brought its

government into existence and established it in the face of almost

universal opposition and intrigue, even in the face of wanton force, as,

for example, against the Orders in Council of Great Britain and the

arbitrary Napoleonic decrees which involved us in what we know as the

War of 1812.

I urge you to consider that the display of an immediate disposition on

the part of the Congress to remedy any injustices or evils that may have

shown themselves in our own national life will afford the most effectual

offset to the forces of chaos and tyranny which are playing so

disastrous a part in the fortunes of the free peoples of more than one

part of the world. The United States is of necessity the sample

democracy of the world, and the triumph of Democracy depends upon its

success.

Recovery from the disturbing and sometimes disastrous effects of the

late war has been exceedingly slow on the other side of the water, and

has given promise, I venture-to say, of early completion only in our own

fortunate country; but even with us the recovery halts and is impeded at

times, and there are immediately serviceable acts of legislation which

it seems to me we ought to attempt, to assist that recovery and prove

the indestructible recuperative force of a great government of the

people. One of these is to prove that a great democracy can keep house

as successfully and in as business-like a fashion as any other

government. It seems to me that the first step toward providing this is

to supply ourselves with a systematic method of handling our estimates

and expenditures and bringing them to the point where they will not be

an unnecessary strain upon our income or necessitate unreasonable

taxation; in other words, a workable budget system. And I respectfully

suggest that two elements are essential to such a system-namely, not

only that the proposal of appropriations should be in the hands of a

single body, such as a single appropriations committee in each house of

the Congress, but also that this body should be brought into such

cooperation with the Departments of the Government and with the Treasury

of the United States as would enable it to act upon a complete

conspectus of the needs of the Government and the resources from which

it must draw its income.

I reluctantly vetoed the budget bill passed by the last session of the

Congress because of a constitutional objection. The House of

Representatives subsequently modified the bill in order to meet this

objection. In the revised form, I believe that the bill, coupled with

action already taken by the Congress to revise its rules and procedure,

furnishes the foundation for an effective national budget system. I

earnestly hope, therefore, that one of the first steps to be taken by

the present session of the Congress will be to pass the budget bill.

The nation’s finances have shown marked improvement during the last

year. The total ordinary receipts of $6,694,000,000 for the fiscal year

1920 exceeded those for 1919 by $1,542,000,000, while the total net

ordinary expenditures decreased from $18,514,000,000 to $6,403,000,000.

The gross public debt, which reached its highest point on August 31,

1919, when it was $26,596,000,000, had dropped on November 30, 1920, to

$24,175,000,000.

There has also been a marked decrease in holdings of government war

securities by the banking institutions of the country, as well as in the

amount of bills held by the Federal Reserve Banks secured by government

war obligations. This fortunate result has relieved the banks and left

them freer to finance the needs of Agriculture, Industry, and Commerce.

It has been due in large part to the reduction of the public debt,

especially of the floating debt, but more particularly to the improved

distribution of government securities among permanent investors. The

cessation of the Government’s borrowings, except through short-term

certificates of indebtedness, has been a matter of great consequence to

the people of the country at large, as well as to the holders of Liberty

Bonds and Victory Notes, and has had an important bearing on the matter

of effective credit control.

The year has been characterized by the progressive withdrawal of the

Treasury from the domestic credit market and from a position of dominant

influence in that market. The future course will necessarily depend upon

the extent to which economies are practiced and upon the burdens placed

upon the Treasury, as well as upon industrial developments and the

maintenance of tax receipts at a sufficiently high level. The

fundamental fact which at present dominates the Government’s financial

situation is that seven and a half billions of its war indebtedness

mature within the next two and a half years. Of this amount, two and a

half billions are floating debt and five billions, Victory Notes and

War. Savings Certificates. The fiscal program of the Government must be

determined with reference to these maturities. Sound policy demands that

Government expenditures be reduced to the lowest amount which will

permit the various services to operate efficiently and that Government

receipts from taxes and salvage be maintained sufficiently high to

provide for current requirements, including interest and sinking fund

charges on the public debt, and at the same time retire the floating

debt and part of the Victory Loan before maturity.

With rigid economy, vigorous salvage operations, and adequate revenues

from taxation, a surplus of current receipts over current expenditures

can be realized and should be applied to the floating debt. All branches

of the Government should cooperate to see that this program is realized.

I cannot overemphasize the necessity of economy in Government

appropriations and expenditures and the avoidance by the Congress of

practices which take money from the Treasury by indefinite or revolving

fund appropriations. The estimates for the present year show that over a

billion dollars of expenditures were authorized by the last Congress in

addition to the amounts shown in the usual compiled statements of

appropriations. This strikingly illustrates the importance of making

direct and specific appropriations. The relation between the current

receipts and current expenditures of the Government during the present

fiscal year, as well as during the last half of the last fiscal year,

has been disturbed by the extraordinary burdens thrown upon the Treasury

by the Transportation Act, in connection with the return of the

railroads to private control. Over $600,000,000 has already been paid to

the railroads under this act-$350,000,000 during the present fiscal

year; and it is estimated that further payments aggregating possibly

$650,000,000 must still be made to the railroads during the current

year. It is obvious that these large payments have already seriously

limited the Government’s progress in retiring the floating debt.

Closely connected with this, it seems to me, is the necessity for an

immediate consideration of the revision of our tax laws. Simplification

of the income and profits taxes has become an immediate necessity. These

taxes performed an indispensable service during the war. The need for

their simplification, however, is very great, in order to save the

taxpayer inconvenience and expense and in order to make his liability

more certain and definite. Other and more detailed recommendations with

regard to taxes will no doubt be laid before you by the Secretary of the

Treasury and the Commissioner of Internal Revenue.

It is my privilege to draw to the attention of Congress for very

sympathetic consideration the problem of providing adequate facilities

for the care and treatment of former members of the military and naval

forces who are sick and disabled as the result of their participation in

the war. These heroic men can never be paid in money for the service

they patriotically rendered the nation. Their reward will lie rather in

realization of the fact that they vindicated the rights of their country

and aided in safeguarding civilization. The nation’s gratitude must be

effectively revealed to them by the most ample provision for their

medical care and treatment as well as for their vocational training and

placement. The time has come when a more complete program can be

formulated and more satisfactorily administered for their treatment and

training, and I earnestly urge that the Congress give the matter its

early consideration. The Secretary of the Treasury and the Board for

Vocational Education will outline in their annual reports proposals

covering medical care and rehabilitation which I am sure will engage

your earnest study and commend your most generous support.

Permit me to emphasize once more the need for action upon certain

matters upon which I dwelt at some length in my message to the second

session of the Sixty-sixth Congress. The necessity, for example, of

encouraging the manufacture of dyestuffs and related chemicals; the

importance of doing everything possible to promote agricultural

production along economic lines, to improve agricultural marketing, and

to make rural life more attractive and healthful; the need for a law

regulating cold storage in such a way as to limit the time during which

goods may be kept in storage, prescribing the method of disposing of

them if kept beyond the permitted period, and requiring goods released

from storage in all cases to bear the date of their receipt. It would

also be most serviceable if it were provided that all goods released

from cold storage for interstate shipment should have plainly marked

upon each package the selling or market price at which they went into

storage, in order that the purchaser might be able to learn what profits

stood between him and the producer or the wholesale dealer. Indeed, It

would be very serviceable to the public if all goods destined for

interstate commerce were made to carry upon every packing case whose

form made it possible a plain statement of the price at which they left

the hands of the producer. I respectfully call your attention also to

the recommendations of the message referred to with regard to a federal

license for all corporations engaged in interstate commerce.

In brief, the immediate legislative need of the time is the removal of

all obstacles to the realization of the best ambitions of our people in

their several classes of employment and the strengthening of all

instrumentalities by. which difficulties are to be met and removed and

justice dealt out, whether by law or by some form of mediation and

conciliation. I do not feel it to be my privilege at present to, suggest

the detailed and particular methods by which these objects may be

attained, but I have faith that the inquiries of your several committees

will discover the way and the method.

In response to what I believe to be the impulse of sympathy and opinion

throughout the United States, I earnestly suggest that the Congress

authorize the Treasury of the United States to make to the struggling

government of Armenia such a loan as was made to several of the Allied

governments during the war, and I would also suggest that it would be

desirable to provide in the legislation itself that the expenditure of

the money thus loaned should be under the supervision of a commission,

or at least a commissioner, from the United States in order that

revolutionary tendencies within Armenia itself might not be afforded by

the loan a further tempting opportunity.

Allow me to call your attention to the fact that the people of the

Philippine Islands have succeeded in maintaining a stable government

since the last action of the Congress in their behalf, and have thus

fulfilled the condition set by the Congress as precedent to a

consideration of granting independence to the Islands. I respectfully

submit that this condition precedent having been fulfilled, it is now

our liberty and our duty to keep our promise to the people of those

islands by granting them the independence which they so honorably covet.

I have not so much laid before you a series of recommendations,

gentlemen, as sought to utter a confession of faith, of the faith in

which I was bred and which it is my solemn purpose to stand by until my

last fighting day. I believe this to be the faith of America, the faith

of the future, and of all the victories which await national action in

the days to come, whether in America or elsewhere.

***

State of the Union Address

Warren Harding

December 6, 1921

MR. SPEAKER AND MEMBERS OF THE CONGRESS:

It is a very gratifying privilege to come to the Congress with the

Republic at peace with all the nations of the world. More, it is equally

gratifying to report that our country is not only free from every

impending, menace of war, but there are growing assurances of the

permanency of the peace which we so deeply cherish.

For approximately ten years we have dwelt amid menaces of war or as

participants in war’s actualities, and the inevitable aftermath, with

its disordered conditions, bits added to the difficulties of government

which adequately can not be appraised except by, those who are in

immediate contact and know the responsibilities. Our tasks would be less

difficult if we had only ourselves to consider, but so much of the world

was involved, the disordered conditions are so well-nigh universal, even

among nations not engaged in actual warfare, that no permanent

readjustments can be effected without consideration of our inescapable

relationship to world affairs in finance and trade. Indeed, we should be

unworthy of our best traditions if we were unmindful of social, moral,

and political conditions which are not of direct concern to us, but

which do appeal to the human sympathies and the very becoming interest

of a people blest with our national good fortune.

It is not my purpose to bring to you a program of world restoration. In

the main such a program must be worked out by the nations more directly

concerned. They must themselves turn to the heroic remedies for the

menacing conditions under which they are struggling, then we can help,

and we mean to help. We shall do so unselfishly because there is

compensation in the consciousness of assisting, selfishly because the

commerce and international exchanges in trade, which marked our high

tide of fortunate advancement, are possible only when the nations of all

continents are restored to stable order and normal relationship.

In the main the contribution of this Republic to restored normalcy in

the world must come through the initiative of the executive branch of

the Government, but the best of intentions and most carefully considered

purposes would fail utterly if the sanction and the cooperation of

Congress were not cheerfully accorded.

I am very sure we shall have no conflict of opinion about constitutional

duties or authority. During the anxieties of war, when necessity seemed

compelling there were excessive grants of authority and all

extraordinary concentration of powers in the Chief Executive. The repeal

of war-time legislation and the automatic expirations which attended the

peace proclamations have put an end to these emergency excesses but I

have the wish to go further than that. I want to join you ill

restoring-, ill the most cordial way, the spirit of coordination and

cooperation, and that mutuality of confidence and respect which is

necessary ill representative popular government.

Encroachment upon the functions of Congress or attempted dictation of

its policy are not to be thought of, much less attempted, but there is

all insistent call for harmony of purpose and concord of action to speed

the solution of the difficult problems confronting both the legislative

and executive branches of the Government.

It is worth while to make allusion here to the character of our Clove

Government, mindful as one must be that an address to you is no less it

message to all our people, for whom you speak most intimately. Ours is

it popular Government through political parties. We divide along

political lines, and I would ever have it so. I do not mean that

partisan preferences should hinder any public servant in the performance

of a conscientious and patriotic official duty. We saw partisan lines

utterly obliterated when war imperiled, and our faith in the Republic

was riveted anew. We ought not to find these partisan lines obstructing

the expeditious solution of the urgent problems of peace.

Granting that we are fundamentally a representative popular Government,

with political parties the governing agencies, I believe the political

party in power should assume responsibility, determine upon policies ill

the conference which supplements conventions and election campaigns, and

then strive for achievement through adherence to the accepted policy.

There is vastly greater security, immensely more of the national

viewpoint, much larger and prompter accomplishment where our divisions

are along party lines, in the broader and loftier sense, than to divide

geographically, or according to pursuits, or personal following. For a

century and a third, parties have been charged with responsibility and

held to strict accounting. When they fail, they are relieved of

authority; and the system has brought its to a national eminence no less

than a world example.

Necessarily legislation is a matter of compromise. The full ideal is

seldom attained. In that meeting of minds necessary to insure results,

there must and will be accommodations and compromises, but in the

estimate of convictions and sincere put-poses the supreme responsibility

to national interest must not be ignored. The shield to the high-minded

public servant who adheres to party policy is manifest, but the higher

purpose is the good of the Republic as a whole.

It would be ungracious to withhold acknowledgment of the really large

volume and excellent quality of work accomplished by the extraordinary

session of Congress which so recently adjourned. I am not unmindful of

the very difficult tasks with which you were called to deal, and no one

can ignore the insistent conditions which, during recent years, have

called for the continued and almost exclusive attention of your

membership to public work. It would suggest insincerity if I expressed

complete accord with every expression recorded in your roll calls, but

we are all agreed about the difficulties and the inevitable divergence

of opinion in seeking the reduction, amelioration and readjustment of

the burdens of taxation. Later on, when other problems are solved, I

shall make some recommendations about renewed consideration of our tax

program, but for the immediate time before us we must be content with

the billion dollar reduction in the tax draft upon the people, and

diminished irritations, banished uncertainty and improved methods of

collection. By your sustainment of the rigid economies already

inaugurated, with hoped-for extension of these economies and added

efficiencies in administration, I believe further reductions may be

enacted and hindering burdens abolished.

In these urgent economies we shall be immensely assisted by the budget

system for which you made provision in the extraordinary session. The

first budget is before you. Its preparation is a signal achievement, and

the perfection of the system, a thing impossible in the few months

available for its initial trial, will mark its enactment as the

beginning of the greatest reformation in governmental practices since

the beginning of the Republic.

There is pending a grant of authority to the administrative branch of

the Government for the funding and settlement of our vast foreign loans

growing out of our grant of war credits. With the hands of the executive

branch held impotent to deal with these debts we are hindering urgent

readjustments among our debtors and accomplishing nothing for ourselves.

I think it is fair for the Congress to assume that the executive branch

of the Government would adopt no major policy in dealing with these

matters which would conflict with the purpose of Congress in authorizing

the loans, certainly not without asking congressional approval, but

there are minor problems incident to prudent loan transactions and the

safeguarding of our interests which can not even be attempted without

this authorization. It will be helpful to ourselves and it will improve

conditions among our debtors if funding and the settlement of defaulted

interest may be negotiated.

The previous Congress, deeply concerned in behalf of our merchant

marine, in 1920 enacted the existing shipping law, designed for the

upbuilding of the American merchant marine. Among other things provided

to encourage our shipping on the world’s seas, the Executive was

directed to give notice of the termination of all existing commercial

treaties in order to admit of reduced duties on imports carried in

American bottoms. During the life of the act no Executive has complied

with this order of the Congress. When the present administration came

into responsibility it began an early inquiry into the failure to

execute the expressed purpose of the Jones Act. Only one conclusion has

been possible. Frankly, Members of House and Senate, eager its I am to

join you in the making of an American merchant marine commensurate with

our commerce, the denouncement of our commercial treaties would involve

us in a chaos of trade relationships and add indescribably to the

confusion of the already disordered commercial world. Our power to do so

is not disputed, but power and ships, without comity of relationship,

will not give us the expanded trade which is inseparably linked with a

great merchant marine. Moreover, the applied reduction of duty, for

which the treaty denouncements were necessary, encouraged only the

carrying of dutiable imports to our shores, while the tonnage which

unfurls the flag on the seas is both free and dutiable, and the cargoes

which make it nation eminent in trade are outgoing, rather than

incoming.

It is not my thought to lay the problem before you in detail today. It

is desired only to say to you that the executive branch of the

Government, uninfluenced by the protest of any nation, for none has been

made, is well convinced that your proposal, highly intended and heartily

supported here, is so fraught with difficulties and so marked by

tendencies to discourage trade expansion, that I invite your tolerance

of noncompliance for only a few weeks until a plan may be presented

which contemplates no greater draft upon the Public Treasury, and which,

though yet too crude to offer it to-day, gives such promise of expanding

our merchant marine, that it will argue its own approval. It is enough

to say to-day that we are so possessed of ships, and the American

intention to establish it merchant marine is so unalterable, that a

plain of reimbursement, at no other cost than is contemplated in the

existing act, will appeal to the pride and encourage the hope of all the

American people.

There is before you the completion of the enactment of what has been

termed a “permanent” tariff law, the word “permanent” being used to

distinguish it from the emergency act which the Congress expedited early

in the extraordinary session, and which is the law today. I can not too

strongly urge in early completion of this necessary legislation It is

needed to stabilize our industry at home; it is essential to make more

definite our trade relations abroad. More, it is vital to the

preservation of many of our own industries which contribute so notably

to the very lifeblood of our Nation.

There is now, and there always will be, a storm of conflicting opinion

about any tariff revision. We can not go far wrong when we base our

tariffs on the policy of preserving the productive activities which

enhance employment and add to our national prosperity.

Again comes the reminder that we must not be unmindful of world

conditions, that peoples are struggling for industrial rehabilitation

and that we can not dwell in industrial and commercial exclusion and at

the same time do the just thing in aiding world reconstruction and

readjustment. We do not seek a selfish aloofness, and we could not

profit by it, were it possible. We recognize the necessity of buying

wherever we sell, and the permanency of trade lies in its acceptable

exchanges. In our pursuit of markets we must give as well as receive. We

can not sell to others who do not produce, nor can we buy unless we

produce at home. Sensible of every obligation of humanity, commerce and

finance, linked as they are in the present world condition, it is not to

be argued that we need destroy ourselves to be helpful to others. With

all my heart I wish restoration to the peoples blighted by the awful

World War, but the process of restoration does not lie in our acceptance

of like conditions. It were better to, remain on firm ground, strive for

ample employment and high standards of wage at home, and point the way

to balanced budgets, rigid economies, and resolute, efficient work as

the necessary remedies to cure disaster.

Everything relating to trade, among ourselves and among nations, has

been expanded, excessive, inflated, abnormal, and there is a madness in

finance which no American policy alone will cure. We are a creditor

Nation, not by normal processes, but made so by war. It is not an

unworthy selfishness to seek to save ourselves, when the processes of

that salvation are not only not denied to others, but commended to them.

We seek to undermine for others no industry by which they subsist; we

are obligated to permit the undermining of none of our own which make

for employment and maintained activities.

Every contemplation, it little matters in which direction one turns,

magnifies the difficulty of tariff legislation, but the necessity of the

revision is magnified with it. Doubtless we are justified in seeking it.

More flexible policy than we have provided heretofore. I hope a way will

be found to make for flexibility and elasticity, so that rates may be

adjusted to meet unusual and changing conditions which can not be

accurately anticipated. There are problems incident to unfair practices,

and to exchanges which madness in money have made almost unsolvable. I

know of no manner in which to effect this flexibility other than the

extension of the powers of the Tariff Commission so that it can adapt

itself to it scientific and wholly just administration of the law.

I am not unmindful of the constitutional difficulties. These can be met

by giving authority to the Chief Executive, who could

proclaim-additional duties to meet conditions which the Congress may

designate.

At this point I must disavow any desire to enlarge the Executive’s

powers or add to the responsibilities of the office. They are already

too large. If there were any other plan I would prefer it.

The grant of authority to proclaim would necessarily bring the Tariff

Commission into new and enlarged activities, because no Executive could

discharge such a duty except upon the information acquired and

recommendations made by this commission. But the plan is feasible, and

the proper functioning of the board would give its it better

administration of a defined policy than ever can be made possible by

tariff duties prescribed without flexibility.

There is a manifest difference of opinion about the merits of American

valuation. Many nations have adopted delivery valuation as the basis for

collecting duties; that is, they take the cost of the imports delivered

at the port of entry as the basis for levying duty. It is no radical

departure, in view of varying conditions and the disordered state of

money values, to provide for American valuation, but there can not be

ignored the danger of such a valuation, brought to the level of our own

production costs, making our tariffs prohibitive. It might do so in many

instances where imports ought to be encouraged. I believe Congress ought

well consider the desirability of the only promising alternative,

namely, a provision authorizing proclaimed American valuation, under

prescribed conditions, on any given list of articles imported.

In this proposed flexibility, authorizing increases to meet conditions

so likely to change, there should also be provision for decreases. A

rate may be just to-day, and entirely out of proportion six months from

to-day. If our tariffs are to be made equitable, and not necessarily

burden our imports and hinder our trade abroad, frequent adjustment will

be necessary for years to come. Knowing the impossibility of

modification by act of Congress for any one or a score of lines without

involving a long array of schedules, I think we shall go a long ways

toward stabilization, if there is recognition of the Tariff Commission’s

fitness to recommend urgent changes by proclamation.

I am sure about public opinion favoring the early determination of our

tariff policy. There have been reassuring signs of a business revival

from the deep slump which all the world has been experiencing. Our

unemployment, which gave its deep concern only a few weeks ago, has

grown encouragingly less, and new assurances and renewed confidence will

attend the congressional declaration that American industry will be held

secure.

Much has been said about the protective policy for ourselves making it

impossible for our debtors to discharge their obligations to us. This is

a contention not now pressing for decision. If we must choose between a

people in idleness pressing for the payment of indebtedness, or a people

resuming the normal ways of employment and carrying the credit, let us

choose the latter. Sometimes we appraise largest the human ill most

vivid in our minds. We have been giving, and are giving now, of our

influence and appeals to minimize the likelihood of war and throw off

the crushing burdens of armament. It is all very earnest, with a

national soul impelling. But a people unemployed, and gaunt with hunger,

face a situation quite as disheartening as war, and our greater

obligation to-day is to do the Government’s part toward resuming

productivity and promoting fortunate and remunerative employment.

Something more than tariff protection is required by American

agriculture. To the farmer has come the earlier and the heavier burdens

of readjustment. There is actual depression in our agricultural

industry, while agricultural prosperity is absolutely essential to the

general prosperity of the country.

Congress has sought very earnestly to provide relief. It has promptly

given such temporary relief as has been possible, but the call is

insistent for the permanent solution. It is inevitable that large crops

lower the prices and short crops advance them. No legislation can cure

that fundamental law. But there must be some economic solution for the

excessive variation in returns for agricultural production.

It is rather shocking to be told, and to have the statement strongly

supported, that 9,000,000 bales of cotton, raised on American

plantations in a given year, will actually be worth more to the

producers than 13,000,000 bales would have been. Equally shocking is the

statement that 700,000,000 bushels of wheat, raised by American farmers,

would bring them more money than a billion bushels. Yet these are not

exaggerated statements. In a world where there are tens of millions who

need food and clothing which they can not get, such a condition is sure

to indict the social system which makes it possible.

In the main the remedy lies in distribution and marketing. Every proper

encouragement should be given to the cooperative marketing programs.

These have proven very helpful to the cooperating communities in Europe.

In Russia the cooperative community has become the recognized bulwark of

law and order, and saved individualism from engulfment in social

paralysis. Ultimately they will be accredited with the salvation of the

Russian State.

There is the appeal for this experiment. Why not try it? No one

challenges the right of the farmer to a larger share of the consumer’s

pay for his product, no one disputes that we can not live without the

farmer. He is justified in rebelling against the transportation cost.

Given a fair return for his labor, he will have less occasion to appeal

for financial aid; and given assurance that his labors shall not be in

vain, we reassure all the people of a production sufficient to meet our

National requirement and guard against disaster.

The base of the pyramid of civilization which rests upon the soil is

shrinking through the drift of population from farm to city. For a

generation we have been expressing more or less concern about this

tendency. Economists have warned and statesmen have deplored. We thought

for at time that modern conveniences and the more intimate contact would

halt the movement, but it has gone steadily on. Perhaps only grim

necessity will correct it, but we ought to find a less drastic remedy.

The existing scheme of adjusting freight rates hits been favoring the

basing points, until industries are attracted to some centers and

repelled from others. A great volume of uneconomic and wasteful

transportation has attended, and the cost increased accordingly. The

grain-milling and meat-packing industries afford ample illustration, and

the attending concentration is readily apparent. The menaces in

concentration are not limited to the retardingly influences on

agriculture. Manifestly the. conditions and terms of railway

transportation ought not be permitted to increase this undesirable

tendency. We have a just pride in our great cities, but we shall find a

greater pride in the Nation, which has it larger distribution of its

population into the country, where comparatively self-sufficient smaller

communities may blend agricultural and manufacturing interests in

harmonious helpfulness and enhanced good fortune. Such a movement

contemplates no destruction of things wrought, of investments made, or

wealth involved. It only looks to a general policy of transportation of

distributed industry, and of highway construction, to encourage the

spread of our population and restore the proper balance between city and

country. The problem may well have your earnest attention.

It has been perhaps the proudest claim of our American civilization that

in dealing with human relationships it has constantly moved toward such

justice in distributing the product of human energy that it has improved

continuously the economic status of the mass of people. Ours has been a

highly productive social organization. On the way up from the elemental

stages of society we have eliminated slavery and serfdom and are now far

on the way to the elimination of poverty.

Through the eradication of illiteracy and the diffusion of education

mankind has reached a stage where we may fairly say that in the United

States equality of opportunity has been attained, though all are not

prepared to embrace it. There is, indeed, a too great divergence between

the economic conditions of the most and the least favored classes in the

community. But even that divergence has now come to the point where we

bracket the very poor and the very rich together as the least fortunate

classes. Our efforts may well be directed to improving the status of

both.

While this set of problems is commonly comprehended under the general

phrase “Capital and labor,” it is really vastly broader. It is a

question of social and economic organization. Labor has become a large

contributor, through its savings, to the stock of capital; while the

people who own the largest individual aggregates of capital are

themselves often hard and earnest laborers. Very often it is extremely

difficult to draw the line of demarcation between the two groups; to

determine whether a particular individual is entitled to be set down as

laborer or as capitalist. In a very large proportion of cases he is

both, and when he is both he is the most useful citizen.

The right of labor to organize is just as fundamental and necessary as

is the right of capital to organize. The right of labor to negotiate, to

deal with and solve its particular problems in an organized way, through

its chosen agents, is just as essential as is the right of capital to

organize, to maintain corporations, to limit the liabilities of

stockholders. Indeed, we have come to recognize that the limited

liability of the citizen as a member of a labor organization closely

parallels the limitation of liability of the citizen as a stockholder in

a corporation for profit. Along this line of reasoning we shall make the

greatest progress toward solution of our problem of capital and labor.

In the case of the corporation which enjoys the privilege of limited

liability of stockholders, particularly when engaged in in the public

service, it is recognized that the outside public has a large concern

which must be protected; and so we provide regulations, restrictions,

and in some cases detailed supervision. Likewise in the case of labor

organizations, we might well apply similar and equally well-defined

principles of regulation and supervision in order to conserve the

public’s interests as affected by their operations.

Just as it is not desirable that a corporation shall be allowed to

impose undue exactions upon the public, so it is not desirable that a

labor organization shall be permitted to exact unfair terms of

employment or subject the public to actual distresses in order to

enforce its terms. Finally, just as we are earnestly seeking for

procedures whereby to adjust and settle political differences between

nations without resort to war, so we may well look about for means to

settle the differences between organized capital and organized labor

without resort to those forms of warfare which we recognize under the

name of strikes, lockouts, boycotts, and the like.

As we have great bodies of law carefully regulating the organization and

operations of industrial and financial corporations, as we have treaties

and compacts among nations which look to the settlement of differences

without the necessity of conflict in arms, so we might well have plans

of conference, of common counsel, of mediation, arbitration, and

judicial determination in controversies between labor and capital. To

accomplish this would involve the necessity to develop a thoroughgoing

code of practice in dealing with such affairs It might be well to

frankly set forth the superior interest of the community as a whole to

either the labor group or the capital group. With rights, privileges,

immunities, and modes of organization thus carefully defined, it should

be possible to set up judicial or quasi judicial tribunals for the

consideration and determination of all disputes which menace the public

welfare.

In an industrial society such as ours the strike, the lockout, and the

boycott are as much out of place and as disastrous in their results as

is war or armed revolution in the domain of politics. The same

disposition to reasonableness, to conciliation, to recognition of the

other side’s point of view, the same provision of fair and recognized

tribunals and processes, ought to make it possible to solve the one set

of questions its easily as the other. I believe the solution is

possible.

The consideration of such a policy would necessitate the exercise of

care and deliberation in the construction of a code and a charter of

elemental rights, dealing with the relations of employer and employee.

This foundation in the law, dealing with the modern conditions of social

and economic life, would hasten the building of the temple of peace in

industry which a rejoicing nation would acclaim.

After each war, until the last, the Government has been enabled to give

homes to its returned soldiers, and a large part of our settlement and

development has attended this generous provision of land for the

Nation’s defenders.

There is yet unreserved approximately 200,000,000 acres in the public

domain, 20,000,000 acres of which are known to be susceptible of

reclamation and made fit for homes by provision for irrigation.

The Government has been assisting in the development of its remaining

lands, until the estimated increase in land values in the irrigated

sections is full $500,000,000 and the crops of 1920 alone on these lands

are estimated to exceed $100,000,000. Under the law authorization these

expenditures for development the advances are to be returned and it

would be good business for the Government to provide for the reclamation

of the remaining 20,000,000 acres, in addition to expediting the

completion of projects long under way.

Under what is known as the coal and gas lease law, applicable also to

deposits of phosphates and other minerals on the public domain, leases

are now being made on the royalty basis, and are producing large

revenues to the Government. Under this legislation, 10 per centum of all

royalties is to be paid directly to the Federal Treasury, and of the

remainder 50 per centum is to be used for reclamation of arid lands by

irrigation, and 40 per centum is to be paid to the States, in which the

operations are located, to be used by them for school and road purposes.

These resources are so vast, and the development is affording so

reliable a basis of estimate, that the Interior Department expresses the

belief that ultimately the present law will add in royalties and

payments to the treasuries of the Federal Government and the States

containing these public lands a total of $12,000,000,000. This means, of

course, an added wealth of many times that sum. These prospects seem to

afford every justification of Government advances in reclamation and

irrigation.

Contemplating the inevitable and desirable increase of population, there

is another phase of reclamation full worthy of consideration. There are

79,000,000 acres of swamp and cut-over lands which may be reclaimed and

made as valuable as any farm lands we possess. These acres are largely

located in Southern States, and the greater proportion is owned by the

States or by private citizens. Congress has a report of the survey of

this field for reclamation, and the feasibility is established. I gladly

commend Federal aid, by way of advances, where State and private

participation is assured.

Home making is one of the greater benefits which government can bestow.

Measures are pending embodying this sound policy to which we may well

adhere. It is easily possible to make available permanent homes which

will provide, in turn, for prosperous American families, without

injurious competition with established activities, or imposition on

wealth already acquired.

While we are thinking of promoting the fortunes of our own people I am

sure there is room in the sympathetic thought of America for fellow

human beings who are suffering and dying of starvation in Russia. A

severe drought in the Valley of the Volga has plunged 15,000,000 people

into grievous famine. Our voluntary agencies are exerting themselves to

the utmost to save the lives of children in this area, but it is now

evident that unless relief is afforded the loss of life will extend into

many millions. America can not be deaf to such a call as that.

We do not recognize the government of Russia, nor tolerate the

propaganda which emanates therefrom, but we do not forget the traditions

of Russian friendship. We may put aside our consideration of all

international politics and fundamental differences in government. The

big thing is the call of the suffering and the dying. Unreservedly I

recommend the appropriation necessary to supply the American Relief

Administration with 10,000,000 bushels of corn and 1,000,000 bushels of

seed grains, not alone to halt the wave of death through starvation, but

to enable spring planting in areas where the seed grains have been

exhausted temporarily to stem starvation.

The American Relief Administration is directed in Russia by former

officers of our own armies, and has fully demonstrated its ability to

transport and distribute relief through American hands without hindrance

or loss. The time has come to add the Government’s support to the

wonderful relief already wrought out of the generosity of the American

private purse.

I am not unaware that we have suffering and privation at home. When it

exceeds the capacity for the relief within the States concerned, it will

have Federal consideration. It seems to me we should be indifferent to

our own heart promptings, and out of accord with the spirit which

acclaims the Christmastide, if we do not give out of our national

abundance to lighten this burden of woe upon a people blameless and

helpless in famine’s peril.

There are it full score of topics concerning which it would be becoming

to address you, and on which I hope to make report at a later time. I

have alluded to the things requiring your earlier attention. However, I

can not end this limited address without a suggested amendment to the

organic law.

Many of us belong to that school of thought which is hesitant about

altering the fundamental law. I think our tax problems, the tendency of

wealth to seek nontaxable investment, and the menacing increase of

public debt, Federal, State and municipal-all justify a proposal to

change the Constitution so as to end the issue of nontaxable bonds. No

action can change the status of the many billions outstanding, but we

can guard against future encouragement of capital’s paralysis, while a

halt in the growth of public indebtedness would be beneficial throughout

our whole land.

Such a change in the Constitution must be very thoroughly considered

before submission. There ought to be known what influence it will have

on the inevitable refunding of our vast national debt, how it will

operate on the necessary refunding of State and municipal debt, how the

advantages of Nation over State and municipality, or the contrary, may

be avoided. Clearly the States would not ratify to their own apparent

disadvantage. I suggest the consideration because the drift of wealth

into nontaxable securities is hindering the flow of large capital to our

industries, manufacturing, agricultural, and carrying, until we are

discouraging the very activities which make our wealth.

Agreeable to your expressed desire and in complete accord with the

purposes of the executive branch of the Government, there is in

Washington, as you happily know, an International Conference now most

earnestly at work on plans for the limitation of armament, a naval

holiday, and the just settlement of problems which might develop into

causes of international disagreement.

It is easy to believe a world-hope is centered on this Capital City. A

most gratifying world-accomplishment is not improbable.

***

State of the Union Address

Warren Harding

December 8, 1922

MEMBERS OF THE CONGRESS:

So many problems are calling for solution that a recital of all of them,

in the face of the known limitations of a short session of Congress,

would seem to lack sincerity of purpose. It is four years since the

World War ended, but the inevitable readjustment of the social and

economic order is not more than barely begun. There is no acceptance of

pre-war conditions anywhere in the world. In a very general way humanity

harbors individual wishes to go on with war-time compensation for

production, with pre-war requirements in expenditure. In short,

everyone, speaking broadly, craves readjustment for everybody except

himself, while there can be no just and permanent readjustment except

when all participate.

The civilization which measured its strength of genius and the power of

science and the resources of industries, in addition to testing the

limits of man power and the endurance and heroism of men and women--that

same civilization is brought to its severest test in restoring a

tranquil order and committing humanity to the stable ways of peace.

If the sober and deliberate appraisal of pre-war civilization makes it

seem a worth-while inheritance, then with patience and good courage it

will be preserved. There never again will be precisely the old order;

indeed, I know of no one who thinks it to be desirable For out of the

old order came the war itself, and the new order, established and made

secure, never will permit its recurrence.

It is no figure of speech to say we have come to the test of Our

civilization. The world has been passing--is today passing through of a

great crisis. The conduct of war itself is not more difficult than the

solution of the problems which necessarily follow. I am not speaking at

this moment of the problem in its wider aspect of world rehabilitation

or of international relationships. The reference is to our own social,

financial, and economic problems at home. These things are not to be

considered solely as problems apart from all international relationship,

but every nation must be able to carry on for itself, else its

international relationship will have scant importance.

Doubtless our own people have emerged from the World War tumult less

impaired than most belligerent powers; probably we have made larger

progress toward reconstruction. Surely we have been fortunate in

diminishing unemployment, and our industrial and business activities,

which are the lifeblood of our material existence, have been restored as

in no other reconstruction period of like length in the history of the

world. Had we escaped the coal and railway strikes, which had no excuse

for their beginning and less justification for their delayed settlement,

we should have done infinitely better. But labor was insistent on

holding to the war heights, and heedless forces of reaction sought the

pre-war levels, and both were wrong. In the folly of conflict our

progress was hindered, and the heavy cost has not yet been fully

estimated. There can be neither adjustment nor the penalty of the

failure to readjust in which all do not somehow participate.

The railway strike accentuated the difficulty of the American farmer.

The first distress of readjustment came to the farmer, and it will not

be a readjustment fit to abide until he is relieved. The distress

brought to the farmer does not affect him alone. Agricultural ill

fortune is a national ill fortune. That one-fourth of our population

which produces the food of the Republic and adds so largely to our

export commerce must participate in the good fortunes of the Nation,

else there is none worth retaining.

Agriculture is a vital activity in our national life. In it we had our

beginning, and its westward march with the star of the empire has

reflected the growth of the Republic. It has its vicissitudes which no

legislation will prevent, its hardships for which no law can provide

escape. But the Congress can make available to the farmer the financial

facilities which have been built up under Government aid and supervision

for other commercial and industrial enterprises. It may be done on the

same solid fundamentals and make the vitally important agricultural

industry more secure, and it must be done.

This Congress already has taken cognizance of the misfortune which

precipitate deflation brought to American agriculture. Your measures of

relief and the reduction of the Federal reserve discount rate

undoubtedly saved the country from widespread disaster. The very proof

of helpfulness already given is the strongest argument for the permanent

establishment of widened credits, heretofore temporarily extended

through the War Finance Corporation.

The Farm Loan Bureau, which already has proven its usefulness through

the Federal land banks, may well have its powers enlarged to provide

ample farm production credits as well as enlarged land credits. It is

entirely practical to create a division in the Federal land banks to

deal with production credits, with the limitations of time so adjusted

to the farm turnover as the Federal reserve system provides for the

turnover in the manufacturing and mercantile world. Special provision

must be made for live-stock production credits, and the limit of land

loans may be safely enlarged. Various measures are pending before you,

and the best judgment of Congress ought to be expressed in a prompt

enactment at the present session.

But American agriculture needs more than added credit facilities. The

credits will help to solve the pressing problems growing out of

war-inflated land values and the drastic deflation of three years ago,

but permanent and deserved agricultural good fortune depends on better

and cheaper transportation.

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