Here is an outstanding problem, demanding the most rigorous

consideration of the Congress and the country. It has to do with more

than agriculture. It provides the channel for the flow of the country’s

commerce. But the farmer is particularly hard hit. His market, so

affected by the world consumption, does not admit of the price

adjustment to meet carrying charges. In the last half of the year now

closing the railways, broken in carrying capacity because of motive

power and rolling stock out of order, though insistently declaring to

the contrary, embargoed his shipments or denied him cars when fortunate

markets were calling. Too frequently transportation failed while

perishable products were turning from possible profit to losses counted

in tens of millions.

I know of no problem exceeding in importance this one of transportation.

In our complex and interdependent modern life transportation is

essential to our very existence. Let us pass for the moment the menace

in the possible paralysis of such service as we have and note the

failure, for whatever reason, to expand our transportation to meet the

Nation’s needs.

The census of 1880 recorded a population of 50,000,000. In two decades

more we may reasonably expect to count thrice that number. In the three

decades ending in 1920 the country’s freight by rail increased from

631,000,000 tons to 2,234,000,000 tons; that is to say, while our

population was increasing, less than 70 per cent, the freight movement

increased over 250 per cent.

We have built 40 per cent of the world’s railroad mileage, and yet find

it inadequate to our present requirements. When we contemplate the

inadequacy of to-day it is easy to believe that the next few decades

will witness the paralysis of our transportation-using social scheme or

a complete reorganization on some new basis. Mindful of the tremendous

costs of betterments, extensions, and expansions, and mindful of the

staggering debts of the world to-day, the difficulty is magnified. Here

is a problem demanding wide vision and the avoidance of mere makeshifts.

No matter what the errors of the past, no matter how we acclaimed

construction and then condemned operations in the past, we have the

transportation and the honest investment in the transportation which

sped us on to what we are, and we face conditions which reflect its

inadequacy to-day, its greater inadequacy to-morrow, and we contemplate

transportation costs which much of the traffic can not and will not

continue to pay.

Manifestly, we have need to begin on plans to coordinate all

transportation facilities. We should more effectively connect up our

rail lines with our carriers by sea. We ought to reap some benefit from

the hundreds of millions expended on inland waterways, proving our

capacity to utilize as well as expend. We ought to turn the motor truck

into a railway feeder and distributor instead of a destroying

competitor.

It would be folly to ignore that we live in a motor age. The motor car

reflects our standard of living and gauges the speed of our present-day

life. It long ago ran down Simple Living, and never halted to inquire

about the prostrate figure which fell as its victim. With full

recognition of motor-car transportation we must turn it to the most

practical use. It can not supersede the railway lines, no matter how

generously we afford it highways out of the Public Treasury. If freight

traffic by motor were charged with its proper and proportionate share of

highway construction, we should find much of it wasteful and more costly

than like service by rail. Yet we have paralleled the railways, a most

natural line of construction, and thereby taken away from the agency of

expected service much of its profitable traffic, which the taxpayers

have been providing the highways, whose cost of maintenance is not yet

realized.

The Federal Government has a right to inquire into the wisdom of this

policy, because the National Treasury is contributing largely to this

highway construction. Costly highways ought to be made to serve as

feeders rather than competitors of the railroads, and the motor truck

should become a coordinate factor in our great distributing system.

This transportation problem can not be waived aside. The demand for

lowered costs on farm products and basic materials can not be ignored.

Rates horizontally increased, to meet increased wage outlays during the

war inflation, are not easily reduced. When some very moderate wage

reductions were effected last summer there was a 5 per cent horizontal

reduction in rates. I sought at that time, in a very informal way, to

have the railway managers go before the Interstate Commerce Commission

and agree to a heavier reduction on farm products and coal and other

basic commodities, and leave unchanged the freight tariffs which a very

large portion of the traffic was able to bear. Neither the managers nor

the commission tile suggestion, so we had the horizontal reduction saw

fit to adopt too slight to be felt by the higher class cargoes and too

little to benefit the heavy tonnage calling most loudly for relief.

Railways are not to be expected to render the most essential service in

our social organization without a air return on capital invested, but

the Government has gone so far in the regulation of rates and rules of

operation that it has the responsibility of pointing the way to the

reduced freight costs so essential to our national welfare.

Government operation does not afford the cure. It was Government

operation which brought us to the very order of things against which we

now rebel, and we are still liquidating the costs of that supreme folly.

Surely the genius of the railway builders has not become extinct among

the railway managers. New economies, new efficiencies in cooperation

must be found. The fact that labor takes 50 to 60 per cent of total

railway earnings makes limitations within which to effect economies very

difficult, but the demand is no less insistent on that account.

Clearly the managers are without that intercarrier, cooperative

relationship so highly essential to the best and most economical

operation. They could not function in harmony when the strike threatened

the paralysis of all railway transportation. The relationship of the

service to public welfare, so intimately affected by State and Federal

regulation, demands the effective correlation and a concerted drive to

meet an insistent and justified public demand.

The merger of lines into systems, a facilitated interchange of freight

cars, the economic use of terminals, and the consolidation of facilities

are suggested ways of economy and efficiency.

I remind you that Congress provided a Joint Commission of Agricultural

Inquiry which made an exhaustive investigation of car service and

transportation, and unanimously recommended in its report of October 15,

1921, the pooling of freight cars under a central agency. This report

well deserves your serious consideration. I think well of the central

agency, which shall be a creation of the railways themselves, to

provide, under the jurisdiction of the Interstate Commerce Commission,

the means for financing equipment for carriers which are otherwise

unable to provide their proportion of car equipment adequate to

transportation needs. This same agency ought to point the way to every

possible economy in maintained equipment and the necessary interchanges

in railway commerce.

In a previous address to the Congress I called to your attention the

insufficiency of power to enforce the decisions of the Railroad Labor

Board. Carriers have ignored its decisions, on the one hand, railway

workmen have challenged its decisions by a strike, on the other hand.

The intent of Congress to establish a tribunal to which railway labor

and managers may appeal respecting questions of wages and working

conditions can not be too strongly commended. It is vitally important

that some such agency should be a guaranty against suspended operation.

The public must be spared even the threat of discontinued service.

Sponsoring the railroads as we do, it is an obligation that labor shall

be assured the highest justice and every proper consideration of wage

and working conditions, but it is an equal obligation to see that no

concerted action in forcing demands shall deprive the public of the

transportation service essential to its very existence. It is now

impossible to safeguard public interest, because the decrees of the

board are unenforceable against either employer or employee.

The Labor Board itself is not so constituted as best to serve the public

interest. With six partisan members on a board of nine, three partisans

nominated by the employees and three by the railway managers, it is

inevitable that the partisan viewpoint is maintained throughout hearings

and in decisions handed down. Indeed, the few exceptions to a strictly

partisan expression in decisions thus far rendered have been followed by

accusations of betrayal of the partisan interests represented. Only the

public group of three is free to function in unbiased decisions.

Therefore the partisan membership may well be abolished, and decisions

should be made by an impartial tribunal.

I am well convinced that the functions of this tribunal could be much

better carried on here in Washington. Even were it to be continued as a

separate tribunal, there ought to be contact with the Interstate

Commerce Commission, which has supreme authority in the rate making to

which wage cost bears an indissoluble relationship Theoretically, a fair

and living wage must be determined quite apart from the employer’s

earning capacity, but in practice, in the railway service, they are

inseparable. The record of advanced rates to meet increased wages, both

determined by the Government, is proof enough.

The substitution of a labor division in the Interstate Commerce

Commission made up from its membership, to hear and decide disputes

relating to wages and working conditions which have failed of adjustment

by proper committees created by the railways and their employees, offers

a more effective plan.

It need not be surprising that there is dissatisfaction over delayed

hearings and decisions by the present board when every trivial dispute

is carried to that tribunal. The law should require the railroads and

their employees to institute means and methods to negotiate between

themselves their constantly arising differences, limiting appeals to the

Government tribunal to disputes of such character as are likely to

affect the public welfare.

This suggested substitution will involve a necessary increase in the

membership of the commission, probably four, to constitute the labor

division. If the suggestion appeals to the Congress, it will be well to

specify that the labor division shall be constituted of representatives

of the four rate-making territories, thereby assuring a tribunal

conversant with the conditions which obtain in the different ratemaking

sections of the country.

I wish I could bring to you the precise recommendation for the

prevention of strikes which threaten the welfare of the people and

menace public safety. It is an impotent civilization and an inadequate

government which lacks the genius and the courage to guard against such

a menace to public welfare as we experienced last summer. You were aware

of the Government’s great concern and its futile attempt to aid in an

adjustment. It will reveal the inexcusable obstinacy which was

responsible for so much distress to the country to recall now that,

though all disputes are not yet adjusted, the many settlements which

have been made were on the terms which the Government proposed in

mediation.

Public interest demands that ample power shall be conferred upon the.

labor tribunal, whether it is the present board or the suggested

substitute, to require its rulings to be accepted by both parties to a

disputed question.

Let there be no confusion about the purpose of the suggested conferment

of power to make decisions effective. There can be no denial of

constitutional rights of either railway workmen or railway managers. No

man can be denied his right to labor when and how he chooses, or cease

to labor when he so elects, but, since the Government assumes to

safeguard his interests while employed in an essential public service,

the security of society itself demands his retirement from the service

shall not be so timed and related as to effect the destruction of that

service. This vitally essential public transportation service, demanding

so much of brain and brawn, so much for efficiency and security, ought

to offer the most attractive working conditions and the highest of wages

paid to workmen in any employment.

In essentially every branch, from track repairer to the man at the

locomotive throttle, the railroad worker is responsible for the safety

of human lives and the care of vast property. His high responsibility

might well rate high his pay within the limits the traffic will bear;

but the same responsibility, plus governmental protection, may justly

deny him and his associates a withdrawal from service without a warning

or under circumstances which involve the paralysis of necessary

transportation. We have assumed so great a responsibility in necessary

regulation that we unconsciously have assumed the responsibility for

maintained service; therefore the lawful power for the enforcement of

decisions is necessary to sustain the majesty of government and to

administer to the public welfare.

During its longer session the present Congress enacted a new tariff law.

The protection of the American standards of living demanded the

insurance it provides against the distorted conditions of world commerce

The framers of the law made provision for a certain flexibility of

customs duties, whereby it is possible to readjust them as developing

conditions may require. The enactment has imposed a large responsibility

upon the Executive, but that responsibility will be discharged with a

broad mindfulness of the whole business situation. The provision itself

admits either the possible fallibility of rates or their unsuitableness

to changing conditions. I believe the grant of authority may be promptly

and discreetly exercised, ever mindful of the intent and purpose to

safeguard American industrial activity, and at the same time prevent the

exploitation of the American consumer and keep open the paths of such

liberal exchanges as do not endanger our own productivity.

No one contemplates commercial aloofness nor any other aloofness

contradictory to the best American traditions or loftiest human

purposes. Our fortunate capacity for comparative self-containment

affords the firm foundation on which to build for our own security, and

a like foundation on which to build for a future of influence and

importance in world commerce. Our trade expansion must come of capacity

and of policies of righteousness and reasonableness in till our

commercial relations.

Let no one assume that our provision for maintained good fortune at

home, and our unwillingness to assume the correction of all the ills of

the world, means a reluctance to cooperate with other peoples or to

assume every just obligation to promote human advancement anywhere in

the world.

War made its a creditor Nation. We did not seek an excess possession of

the world’s gold, and we have neither desire to profit Unduly by its

possession nor permanently retain it. We do not seek to become an

international dictator because of its power.

The voice of the United States has a respectful hearing in international

councils, because we have convinced the world that we have no selfish

ends to serve, no old grievances to avenge, no territorial or other

greed to satisfy. But the voice being heard is that of good counsel, not

of dictation. It is the voice of sympathy and fraternity and

helpfulness, seeking to assist but not assume for the United States

burdens which nations must bear for themselves. We would rejoice to help

rehabilitate currency systems and facilitate all commerce which does not

drag us to the very levels of those we seek to lift up.

While I have everlasting faith in our Republic, it would be folly,

indeed, to blind ourselves to our problems at home. Abusing the

hospitality of our shores are the advocates of revolution, finding their

deluded followers among those who take on the habiliments of an American

without knowing an American soul. There is the recrudescence of

hyphenated Americanism which we thought to have been stamped out when we

committed the Nation, life and soul, to the World War.

There is a call to make the alien respect our institutions while he

accepts our hospitality. There is need to magnify the American viewpoint

to the alien who seeks a citizenship among us. There is need to magnify

the national viewpoint to Americans throughout the land. More there is a

demand for every living being in the United States to respect and abide

by the laws of the Republic. Let men who are rending the moral fiber of

the Republic through easy contempt for the prohibition law, because they

think it restricts their personal liberty, remember that they set the

example and breed a contempt for law which will ultimately destroy the

Republic.

Constitutional prohibition has been adopted by the Nation. It is the

supreme law of the land. In plain speaking, there are conditions

relating to its enforcement which savor of nation-wide scandal. It is

the most demoralizing factor in our public life.

Most of our people assumed that the adoption of the eighteenth amendment

meant the elimination of the question from our politics. On the

contrary, it has been so intensified as an issue that many voters are

disposed to make all political decisions with reference to this single

question. It is distracting the public mind and prejudicing the judgment

of the electorate.

The day is unlikely to come when the eighteenth amendment will be

repealed. The fact may as well be recognized and our course adapted

accordingly. If the statutory provisions for its enforcement are

contrary to deliberate public opinion, which I do not believe the

rigorous and literal enforcement will concentrate public attention on

any requisite modification. Such a course, conforms with the law and

saves the humiliation of the Government and the humiliation of our

people before the world, and challenges the destructive forces engaged

in widespread violation, official corruption and individual

demoralization.

The eighteenth amendment involves the concurrent authority of State and

Federal Governments, for the enforcement of the policy it defines. A

certain lack of definiteness, through division of responsibility is thus

introduced. In order to bring about a full understanding of duties and

responsibilities as thus distributed, I purpose to invite the governors

of the States and Territories, at an early opportunity, to a conference

with the Federal Executive authority. Out of the full and free

considerations which will thus be possible, it is confidently believed,

will emerge a more adequate, comprehension of the whole problem, and

definite policies of National and State cooperation in administering the

laws.

There are pending bills for the registration of the alien who has come

to our shores. I wish the passage of such an act might be expedited.

Life amid American opportunities is worth the cost of registration if it

is worth the seeking, and the Nation has the right to know who are

citizens in the making or who live among us anti share our advantages

while seeking to undermine our cherished institutions. This provision

will enable us to guard against the abuses in immigration, checking the

undesirable whose irregular Willing is his first violation of our laws.

More, it will facilitate the needed Americanizing of those who mean to

enroll as fellow citizens.

Before enlarging the immigration quotas we had better provide

registration for aliens, those now here or continually pressing for

admission, and establish our examination boards abroad, to make sure of

desirables only. By the examination abroad we could end the pathos at

our ports, when men and women find our doors closed, after long voyages

and wasted savings, because they are unfit for admission It would be

kindlier and safer to tell them before they embark.

Our program of admission and treatment of immigrants is very intimately

related to the educational policy of the Republic With illiteracy

estimated at front two-tenths of 1 per cent to less than 2 per cent in

10 of the foremost nations of Europe it rivets our attention to it

serious problem when we are reminded of a 6 per cent illiteracy in the

United States. The figures are based on the test which defines an

Illiterate as one having no schooling whatever. Remembering the wide

freedom of our public schools with compulsory attendance in many States

in the Union, one is convinced that much of our excessive illiteracy

comes to us from abroad, and the education of the immigrant becomes it

requisite to his Americanization. It must be done if he is fittingly to

exercise the duties as well as enjoy the privileges of American

citizenship. Here is revealed the special field for Federal cooperation

in furthering education.

From the very beginning public education has been left mainly in the

hands of the States. So far as schooling youth is concerned the policy

has been justified, because no responsibility can be so effective as

that of the local community alive to its task. I believe in the

cooperation of the national authority to stimulate, encourage, and

broaden the work of the local authorities. But it is the especial

obligation of the Federal Government to devise means and effectively

assist in the education of the newcomer from foreign lands, so that the

level of American education may be made the highest that is humanly

possible.

Closely related to this problem of education is the abolition of child

labor. Twice Congress has attempted the correction of the evils incident

to child employment. The decision of the Supreme Court has put this

problem outside the proper domain of Federal regulation until the

Constitution is so amended as to give the Congress indubitable

authority. I recommend the submission of such an amendment.

We have two schools of thought relating to amendment of the

Constitution. One need not be committed to the belief that amendment is

weakening the fundamental law, or that excessive amendment is essential

to meet every ephemeral whim. We ought to amend to meet the demands of

the people when sanctioned by deliberate public opinion.

One year ago I suggested the submission of an amendment so that we may

lawfully restrict the issues of tax-exempt securities, and I renew that

recommendation now. Tax-exempt securities are drying up the sources of

Federal taxation and they are encouraging unproductive and extravagant

expenditures by States and municipalities. There is more than the menace

in mounting public debt, there is the dissipation of capital which

should be made available to the needs of productive industry. The

proposed amendment will place the State and Federal Governments and all

political subdivisions on an exact equality, and will correct the

growing menace of public borrowing, which if left unchecked may soon

threaten the stability of our institutions.

We are so vast and so varied in our national interests that scores of

problems are pressing for attention. I must not risk the wearying of

your patience with detailed reference.

Reclamation and irrigation projects, where waste land may be made

available for settlement and productivity, are worthy of your favorable

consideration.

When it is realized that we are consuming our timber four times as

rapidly as we are growing it, we must encourage the greatest possible

cooperation between the Federal Government, the various States, and the

owners of forest lands, to the end that protection from fire shall be

made more effective and replanting encouraged.

The fuel problem is under study now by a very capable fact-finding

commission, and any attempt to deal with the coal problem, of such deep

concern to the entire Nation, must await the report of the commission.

There are necessary studies of great problems which Congress might well

initiate. The wide spread between production costs and prices which

consumers pay concerns every citizen of the Republic. It contributes

very largely to the unrest in agriculture and must stand sponsor for

much against which we inveigh in that familiar term--the high cost of

living.

No one doubts the excess is traceable to the levy of the middleman, but

it would be unfair to charge him with all responsibility before we

appraise what is exacted of him by our modernly complex life. We have

attacked the problem on one side by the promotion of cooperative

marketing, and we might well inquire into the benefits of cooperative

buying. Admittedly, the consumer is much to blame himself, because of

his prodigal expenditure and his exaction of service, but Government

might well serve to point the way of narrowing the spread of price,

especially between the production of food and its consumption.

A superpower survey of the eastern industrial region has recently been

completed, looking to unification of steam, water, and electric powers,

and to a unified scheme of power distribution. The survey proved that

vast economies in tonnage movement of freights, and in the efficiency of

the railroads, would be effected if the superpower program were adopted.

I am convinced that constructive measures calculated to promote such an

industrial development--I am tempted to say, such an industrial

revolution-would be well worthy the careful attention and fostering

interest of the National Government.

The proposed survey of a plan to draft all the resources of the

Republic, human and material, for national defense may well have your

approval. I commended such a program in case of future war, in the

inaugural address. of March 4, 1921, and every experience in the

adjustment and liquidation of war claims and the settlement of war

obligations persuades me we ought to be prepared for such universal call

to armed defense.

I bring you no apprehension of war. The world is abhorrent of it, and

our own relations are not only free from every threatening cloud, but we

have contributed our larger influence toward making armed conflict less

likely.

Those who assume that we played our part in the World War and later took

ourselves aloof and apart, unmindful of world obligations, give scant

credit to the helpful part we assume in international relationships.

Whether all nations signatory ratify all the treaties growing out of the

Washington Conference on Limitation of Armament or some withhold

approval, the underlying policy of limiting naval armament has the

sanction of the larger naval powers, and naval competition is suspended.

Of course, unanimous ratification is much to be desired.

The four-power pact, which abolishes every probability of war on the

Pacific, has brought new confidence in a maintained peace, and I can

well believe it might be made a model for like assurances wherever in

the world any common interests are concerned.

We have had expressed the hostility of the American people to a

supergovernment or to any commitment where either a council or an

assembly of leagued powers may chart our course. Treaties of armed

alliance can have no likelihood of American sanction, but we believe in

respecting the rights of nations, in the value of conference and

consultation, in the effectiveness of leaders of nations looking each

other in the face ace before resorting to the arbitrament of arms.

It has been our fortune both to preach and promote international

understanding. The influence of the United States in bringing near the

settlement of an ancient dispute between South American nations is added

proof of the glow of peace in ample understanding. In Washington to-day

are met the delegates of the Central American nations, gathered at the

table of international understanding, to stabilize their Republics and

remove every vestige of disagreement. They are met here by our

invitation, not in our aloofness, and they accept our hospitality

because they have faith in our unselfishness and believe in our

helpfulness. Perhaps we are selfish in craving their confidence and

friendship, but such a selfishness we proclaim to the world, regardless

of hemisphere, or seas dividing.

I would like the Congress and the people of the Nation to believe that

in a firm and considerate way we are insistent on American rights

wherever they may be questioned, and deny no rights of others in the

assertion of our own. Moreover we are cognizant of the world’s struggles

for full readjustment and rehabilitation, and we have shirked no duty

which comes of sympathy, or fraternity, or highest fellowship among

nations. Every obligation consonant with American ideals and sanctioned

under our form of government is willingly met. When we can not support

we do not demand. Our constitutional limitations do not forbid the

exercise of a moral influence, the measure of which is not less than the

high purposes we have sought to serve.

After all there is less difference about the part this great Republic

shall play in furthering peace and advancing humanity than in the manner

of playing it. We ask no one to assume responsibility for us; we assume

no responsibility which others must bear for themselves, unless

nationality is hopelessly swallowed up in internationalism.

***

State of the Union Address

Calvin Coolidge

December 6, 1923

Since the close of the last Congress the Nation has lost President

Harding. The world knew his kindness and his humanity, his greatness and

his character. He has left his mark upon history. He has made justice

more certain and peace more secure. The surpassing tribute paid to his

memory as he was borne across the continent to rest at last at home

revealed the place he held in the hearts of the American people. But

this is not the occasion for extended reference to the man or his work.

In this presence, among these who knew and loved him, that is

unnecessary. But we who were associated with him could not resume

together the functions of our office without pausing for a moment, and

in his memory reconsecrating ourselves to the service of our country. He

is gone. We remain. It is our duty, under the inspiration of his

example, to take up the burdens which he was permitted to lay down, and

to develop and support the wise principles of government which he

represented.

FOREIGN AFFAIRS

For us peace reigns everywhere. We desire to perpetuate it always by

granting full justice to others and requiring of others full justice to

ourselves.

Our country has one cardinal principle to maintain in its foreign

policy. It is an American principle. It must be an American policy. We

attend to our own affairs, conserve our own strength, and protect the

interests of our own citizens; but we recognize thoroughly our

obligation to help others, reserving to the decision of our own Judgment

the time, the place, and the method. We realize the common bond of

humanity. We know the inescapable law of service.

Our country has definitely refused to adopt and ratify the covenant of

the League of Nations. We have not felt warranted in assuming the

responsibilities which its members have assumed. I am not proposing any

change in this policy; neither is the Senate. The incident, so far as we

are concerned, is closed. The League exists as a foreign agency. We hope

it will be helpful. But the United States sees no reason to limit its

own freedom and independence of action by joining it. We shall do well

to recognize this basic fact in all national affairs and govern

ourselves accordingly.

WORLD COURT

Our foreign policy has always been guided by two principles. The one is

the avoidance of permanent political alliances which would sacrifice our

proper independence. The other is the peaceful settlement of

controversies between nations. By example and by treaty we have

advocated arbitration. For nearly 25 years we have been a member of The

Hague Tribunal, and have long sought the creation of a permanent World

Court of Justice. I am in full accord with both of these policies. I

favor the establishment of such a court intended to include the whole

world. That is, and has long been, an American policy.

Pending before the Senate is a proposal that this Government give its

support to the Permanent Court of International Justice, which is a new

and somewhat different plan. This is not a partisan question. It should

not assume an artificial importance. The court is merely a convenient

instrument of adjustment to which we could go, but to which we could not

be brought. It should be discussed with entire candor, not by a

political but by a judicial method, without pressure and without

prejudice. Partisanship has no place in our foreign relations. As I wish

to see a court established, and as the proposal presents the only

practical plan on which many nations have ever agreed, though it may not

meet every desire, I therefore commend it to the favorable consideration

of the Senate, with the proposed reservations clearly indicating our

refusal to adhere to the League of Nations.

RUSSIA

Our diplomatic relations, lately so largely interrupted, are now being

resumed, but Russia presents notable difficulties. We have every desire

to see that great people, who are our traditional friends, restored to

their position among the nations of the earth. We have relieved their

pitiable destitution with an enormous charity. Our Government offers no

objection to the carrying on of commerce by our citizens with the people

of Russia. Our Government does not propose, however, to enter into

relations with another regime which refuses to recognize the sanctity of

international obligations. I do not propose to barter away for the

privilege of trade any of the cherished rights of humanity. I do not

propose to make merchandise of any American principles. These rights and

principles must go wherever the sanctions of our Government go.

But while the favor of America is not for sale, I am willing to make

very large concessions for the purpose of rescuing the people of Russia.

Already encouraging evidences of returning to the ancient ways of

society can be detected. But more are needed. Whenever there appears any

disposition to compensate our citizens who were despoiled, and to

recognize that debt contracted with our Government, not by the Czar, but

by the newly formed Republic of Russia; whenever the active spirit of

enmity to our institutions is abated; whenever there appear works mete

for repentance; our country ought to be the first to go to the economic

and moral rescue of Russia. We have every desire to help and no desire

to injure. We hope the time is near at hand when we can act.

DEBTS

The current debt and interest due from foreign Governments, exclusive of

the British debt of $4,600,000,000, is about $7,200,000,000. I do not

favor the cancellation of this debt, but I see no objection to adjusting

it in accordance with the principle adopted for the British debt. Our

country would not wish to assume the role of an oppressive creditor, but

would maintain the principle that financial obligations between nations

are likewise moral obligations which international faith and honor

require should be discharged.

Our Government has a liquidated claim against Germany for the expense of

the army of occupation of over $255,000,000. Besides this, the Mixed

Claims Commission have before them about 12,500 claims of American

citizens, aggregating about $1,225,000,000. These claims have already

been reduced by a recent decision, but there are valid claims reaching

well toward $500,000,000. Our thousands of citizens with credits due

them of hundreds of millions of dollars have no redress save in the

action of our Government. These are very substantial interests, which it

is the duty of our Government to protect as best it can. That course I

propose to pursue.

It is for these reasons that we have a direct interest in the economic

recovery of Europe. They are enlarged by our desire for the stability of

civilization and the welfare of humanity. That we are making sacrifices

to that end none can deny. Our deferred interest alone amounts to a

million dollars every day. But recently we offered to aid with our

advice and counsel. We have reiterated our desire to see France paid and

Germany revived. We have proposed disarmament. We have earnestly sought

to compose differences and restore peace. We shall persevere in

well-doing, not by force, but by reason.

FOREIGN PAPERS

Under the law the papers pertaining to foreign relations to be printed

are transmitted as a part of this message. Other volumes of these papers

will follow.

FOREIGN SERVICE

The foreign service of our Government needs to be reorganized and

improved.

FISCAL CONDITION

Our main problems are domestic problems. Financial stability is the

first requisite of sound government. We can not escape the effect of

world conditions. We can not avoid the inevitable results of the

economic disorders which have reached all nations. But we shall diminish

their harm to us in proportion as we continue to restore our Government

finances to a secure and endurable position. This we can and must do.

Upon that firm foundation rests the only hope of progress and

prosperity. From that source must come relief for the people.

This is being, accomplished by a drastic but orderly retrenchment, which

is bringing our expenses within our means. The origin of this has been

the determination of the American people, the main support has been the

courage of those in authority, and the effective method has been the

Budget System. The result has involved real sacrifice by department

heads, but it has been made without flinching. This system is a law of

the Congress. It represents your will. It must be maintained, and ought

to be strengthened by the example of your observance. Without a Budget

System there can be no fixed responsibility and no constructive

scientific economy.

This great concentration of effort by the administration and Congress

has brought the expenditures, exclusive of the self-supporting Post.

Office Department, down to three billion dollars. It is possible, in

consequence, to make a large reduction in the taxes of the people, which

is the sole object of all curtailment. This is treated at greater length

in the Budget message, and a proposed plan has been presented in detail

in a statement by the Secretary of the Treasury which has my unqualified

approval. I especially commend a decrease on earned incomes, and further

abolition of admission, message, and nuisance taxes. The amusement and

educational value of moving pictures ought not to be taxed. Diminishing

charges against moderate incomes from investment will afford immense

relief, while a revision of the surtaxes will not only provide

additional money for capital investment, thus stimulating industry and

employing more but will not greatly reduce the revenue from that source,

and may in the future actually increase it.

Being opposed to war taxes in time of peace, I am not in favor of

excess-profits taxes. A very great service could be rendered through

immediate enactment of legislation relieving the people of some of the

burden of taxation. To reduce war taxes is to give every home a better

chance.

For seven years the people have borne with uncomplaining courage the

tremendous burden of national and local taxation. These must both be

reduced. The taxes of the Nation must be reduced now as much as prudence

will permit, and expenditures must be reduced accordingly. High taxes

reach everywhere and burden everybody. They gear most heavily upon the

poor. They diminish industry and commerce. They make agriculture

unprofitable. They increase the rates on transportation. They are a

charge on every necessary of life. Of all services which the Congress

can render to the country, I have no hesitation in declaring t neglect

it, to postpone it, to obstruct it by unsound proposals, is to become

unworthy of public confidence and untrue to public trust. The country

wants this measure to have the right of way over an others.

Another reform which is urgent in our fiscal system is the abolition of

the right to issue tax-exempt securities. The existing system not only

permits a large amount of the wealth of the Notion to escape its just

burden but acts as a continual stimulant to municipal extravagance. This

should be prohibited by constitutional amendment. All the wealth of the

Nation ought to contribute its fair share to the expenses of the Nation.

TARIFF TAW

The present tariff law has accomplished its two main objects. It has

secured an abundant revenue and been productive of an abounding

prosperity. Under it the country has had a very large export and import

trade. A constant revision of the tariff by the Congress is disturbing

and harmful. The present law contains an elastic provision authorizing

the President to increase or decrease present schedules not in excess of

50 per centum to meet the difference in cost of production at home and

abroad. This does not, to my mind, warrant a rewriting g of the whole

law, but does mean, and will be so administered, that whenever the

required investigation shows that inequalities of sufficient importance

exist in any schedule, the power to change them should and will be

applied.

SHIPPING

The entire well being of our country is dependent upon transportation by

sea and land. Our Government during the war acquired a large merchant

fleet which should be transferred, as soon as possible, to private

ownership and operation under conditions which would secure two results:

First, and of prime importance, adequate means for national defense;

second, adequate service to American commerce. Until shipping conditions

are such that our fleet can be disposed of advantageously under these

conditions, it will be operated as economically as possible under such

plans as may be devised from time to time by the Shipping Board. We must

have a merchant marine which meets these requirements, and we shall have

to pay the cost of its service.

PUBLIC IMPROVEMENTS

The time has come to resume in a moderate way the opening of our

intracoastal waterways; the control of flood waters of the Mississippi

and of the Colorado Rivers; the improvement of the waterways from the

Great Lakes toward the Gulf of Mexico; and the development of the great

power and navigation project of the St. Lawrence River, for which

efforts are now being made to secure the necessary treaty with Canada.

These projects can not all be undertaken at once, but all should have

the immediate consideration of the Congress and be adopted as fast as

plans can be matured and the necessary funds become available. This is

not incompatible with economy, for their nature does not require so much

a public expenditure as a capital investment which will be reproductive,

as evidenced by the marked increase in revenue from the Panama Canal.

Upon these projects depend much future industrial and agricultural

progress. They represent the protection of large areas from flood and

the addition of a great amount of cheap power and cheap freight by use

of navigation, chief of which is the bringing of ocean-going ships to

the Great Lakes.

Another problem of allied character is the superpower development of the

Northeastern States, consideration of which is growing under the

direction of the Department of Commerce by joint conference with the

local authorities.

RAILROADS

Criticism of the railroad law has been directed, first, to the section

laying down the rule by which rates are fixed, and providing for payment

to the Government and use of excess earnings; second, to the method for

the adjustment of wage scales; and third, to the authority permitting

consolidations.

It has been erroneously assumed that the act undertakes to guarantee

railroad earnings. The law requires that rates should be just and

reasonable. That has always been the rule under which rates have been

fixed. To make a rate that does not yield a fair return results in

confiscation, and confiscatory rates are of course unconstitutional.

Unless the Government adheres to the rule of making a rate that will

yield a fair return, it must abandon rate making altogether. The new and

important feature of that part of the law is the recapture and

redistribution of excess rates. The constitutionality of this method is

now before the Supreme Court for adjudication. Their decision should be

awaited before attempting further legislation on this subject.

Furthermore, the importance of this feature will not be great if

consolidation goes into effect.

The settlement of railroad labor disputes is a matter of grave public

concern. The Labor Board was established to protect the public in the

enjoyment of continuous service by attempting to insure justice between

the companies and their employees. It has been a great help, but is not

altogether satisfactory to the public, the employees, or the companies.

If a substantial agreement can be reached among the groups interested,

there should be no hesitation in enacting such agreement into law. If it

is not reached, the Labor Board may very well be left for the present to

protect the public welfare.

The law for consolidations is not sufficiently effective to be

expeditious. Additional legislation is needed giving authority for

voluntary consolidations, both regional and route, and providing

Government machinery to aid and stimulate such action, always subject to

the approval of the Interstate Commerce Commission. This should

authorize the commission to appoint committees for each proposed group,

representing the public and the component roads, with power to negotiate

with individual security holders for an exchange of their securities for

those of the, consolidation on such terms and conditions as the

commission may prescribe for avoiding any confiscation and preserving

fair values. Should this permissive consolidation prove ineffective

after a limited period, the authority of the Government will have to be

directly invoked.

Consolidation appears to be the only feasible method for the maintenance

of an adequate system of transportation with an opportunity so to adjust

freight rates as to meet such temporary conditions as now prevail in

some agricultural sections. Competent authorities agree that an entire

reorganization of the rate structure for freight is necessary. This

should be ordered at once by the Congress.

DEPARTMENT OF JUSTICE

As no revision of the laws of the United States has been made since

1878, a commission or committee should be created to undertake this

work. The Judicial Council reports that two more district judges are

needed in the southern district of New York, one in the northern

district of Georgia, and two more circuit judges in the Circuit Court of

Appeals of the Eighth Circuit. Legislation should be considered for this

purpose.

It is desirable to expedite the hearing and disposal of cases. A

commission of Federal judges and lawyers should be created to recommend

legislation by which the procedure in the Federal trial courts may be

simplified and regulated by rules of court, rather than by statute; such

rules to be submitted to the Congress and to be in force until annulled

or modified by the Congress. The Supreme Court needs legislation

revising and simplifying the laws governing review by that court, and

enlarging the classes of cases of too little public importance to be

subject to review. Such reforms would expedite the transaction of the

business of the courts. The administration of justice is likely to fail

if it be long delayed.

The National Government has never given adequate attention to its prison

problems. It ought to provide employment in such forms of production as

can be used by the Government, though not sold to the public in

competition with private business, for all prisoners who can be placed

at work, and for which they should receive a reasonable compensation,

available for their dependents.

Two independent reformatories are needed; one for the segregation of

women, and another for the segregation of young men serving their first

sentence.

The administration of justice would be facilitated greatly by including

in the Bureau of Investigation of the Department of Justice a Division

of Criminal Identification, where there would be collected this

information which is now indispensable in the suppression of crime.

PROHIBITION

The prohibition amendment to the Constitution requires the Congress. and

the President to provide adequate laws to prevent its violation. It is

my duty to enforce such laws. For that purpose a treaty is being

negotiated with Great Britain with respect to the right of search of

hovering vessels. To prevent smuggling, the Coast Card should be greatly

strengthened, and a supply of swift power boats should be provided. The

major sources of production should be rigidly regulated, and every

effort should be made to suppress interstate traffic. With this action

on the part of the National Government, and the cooperation which is

usually rendered by municipal and State authorities, prohibition should

be made effective. Free government has no greater menace than disrespect

for authority and continual violation of law. It is the duty of a

citizen not only to observe the law but to let it be known that he is

opposed to its violation.

THE NEGRO

Numbered among our population are some 12,000,000 colored people. Under

our Constitution their rights are just as sacred as those of any other

citizen. It is both a public and a private duty to protect those rights.

The Congress ought to exercise all its powers of prevention and

punishment against the hideous crime of lynching, of which the negroes

are by no means the sole sufferers, but for which they furnish a

majority of the victims.

Already a considerable sum is appropriated to give the negroes

vocational training in agriculture. About half a million dollars is

recommended for medical courses at Howard University to help contribute

to the education of 500 colored doctors needed each year. On account of

the integration of large numbers into industrial centers, it has been

proposed that a commission be created, composed of members from both

races, to formulate a better policy for mutual understanding and

confidence. Such an effort is to be commended. Everyone would rejoice in

the accomplishment of the results which it seeks. But it is well to

recognize that these difficulties are to a large extent local problems

which must be worked out by the mutual forbearance and human kindness of

each community. Such a method gives much more promise of a real remedy

than outside interference.

CIVIL SERVICE

The maintenance and extension of the classified civil service is

exceedingly important. There are nearly 550,000 persons in the executive

civil service drawing about $700,000,000 of yearly compensation.

Four-fifths of these are in the classified service. This method of

selection of the employees of the United States is especially desirable

for the Post Office Department. The Civil Service Commission has

recommended that postmasters at first, second, and third class offices

be classified. Such action, accompanied by a repeal of the four-year

term of office, would undoubtedly be an improvement. I also recommend

that the field force for prohibition enforcement be brought within the

classified civil service without covering in the present membership. The

best method for selecting public servants is the merit system.

PUBLIC BUILDINGS

Many of the departments in Washington need better housing facilities.

Some are so crowded that their work is impeded, others are so scattered

that they lose their identity. While I do not favor at this time a

general public building law, I believe it is now necessary, in

accordance with plans already sanctioned for a unified and orderly

system for the development of this city, to begin the carrying out of

those plans by authorizing the erection of three or four buildings most

urgently needed by an annual appropriation of $5,000,000.

REGULATORY LEGISLATION

Cooperation with other maritime powers is necessary for complete

protection of our coast waters from pollution. Plans for this are under

way, but await certain experiments for refuse disposal. Meantime laws

prohibiting spreading oil and oil refuse from vessels in our own

territorial waters would be most helpful against this menace and should

be speedily enacted.

Laws should be passed regulating aviation.

Revision is needed of the laws regulating radio interference.

Legislation and regulations establishing load liner, to provide safe

loading of vessels leaving our ports are necessary and recodification of

our navigation laws is vital.

Revision of procedure of the Federal Trade Commission will give more

constructive purpose to this department.

If our Alaskan fisheries are to be saved from destruction, there must be

further legislation declaring a general policy and delegating the

authority to make rules and regulations to an administrative body.

ARMY AND NAVY

For several years we have been decreasing the personnel of the Army and

Navy, and reducing their power to the danger point. Further reductions

should not be made. The Army is a guarantee of the security of our

citizens at home; the Navy is a guarantee of the security of our

citizens abroad. Both of these services should be strengthened rather

than weakened. Additional planes are needed for the Army, and additional

submarines for the Navy. The defenses of Panama must be perfected. We

want no more competitive armaments. We want no more war. But we want no

weakness that invites imposition. A people who neglect their national

defense are putting in jeopardy their national honor.

INSULAR POSSESSIONS

Conditions in the insular possessions on the whole have been good. Their

business has been reviving. They are being administered according to

law. That effort has the full support of the administration. Such

recommendations as may conic from their people or their governments

should have the most considerate attention.

EDUCATION AND WELFARE

Our National Government is not doing as much as it legitimately can do

to promote the welfare of the people. Our enormous material wealth, our

institutions, our whole form of society, can not be considered fully

successful until their benefits reach the merit of every individual.

This is not a suggestion that the Government should, or could, assume

for the people the inevitable burdens of existence. There is no method

by which we can either be relieved of the results of our own folly or be

guaranteed a successful life. There is an inescapable personal

responsibility for the development of character, of industry, of thrift,

and of self-control. These do not come from the Government, but from the

people themselves. But the Government can and should always be

expressive of steadfast determination, always vigilant, to maintain

conditions under which these virtues are most likely to develop and

secure recognition and reward. This is the American policy.

It is in accordance with this principle that we have enacted laws for

the protection of the public health and have adopted prohibition in

narcotic drugs and intoxicating liquors. For purposes of national

uniformity we ought to provide, by constitutional amendment and

appropriate legislation, for a limitation of child labor, and in all

cases under the exclusive jurisdiction of the Federal Government a

minimum wage law for women, which would undoubtedly find sufficient

power of enforcement in the influence of public opinion.

Having in mind that education is peculiarly a local problem, and that it

should always be pursued with the largest freedom of choice by students

and parents, nevertheless, the Federal Government might well give the

benefit of its counsel and encouragement more freely in this direction.

If anyone doubts the need of concerted action by the States of the

Nation for this purpose, it is only necessary to consider the appalling

figures of illiteracy representing a condition which does not vary much

in all parts of the Union. I do not favor the making of appropriations

from the National Treasury to be expended directly on local education,

but I do consider it a fundamental requirement of national activity

which, accompanied by allied subjects of welfare, is worthy of a

separate department and a place in the Cabinet. The humanitarian side of

government should not be repressed, but should be cultivated.

Mere intelligence, however, is not enough. Enlightenment must be

accompanied by that moral power which is the product of the home and of

rebellion. Real education and true welfare for the people rest

inevitably on this foundation, which the Government can approve and

commend, but which the people themselves must create.

IMMIGRATION

American institutions rest solely on good citizenship. They were created

by people who had a background of self-government. New arrivals should

be limited to our capacity to absorb them into the ranks of good

citizenship. America must be kept American. For this purpose, it is

necessary to continue a policy of restricted immigration. It would be

well to make such immigration of a selective nature with some inspection

at the source, and based either on a prior census or upon the record of

naturalization. Either method would insure the admission of those with

the largest capacity and best intention of becoming citizens. I am

convinced that our present economic and social conditions warrant a

limitation of those to be admitted. We should find additional safety in

a law requiring the immediate registration of all aliens. Those who do

not want to be partakers of the American spirit ought not to settle in

America.

VETERANS

No more important duty falls on the Government of the United States than

the adequate care of its veterans. Those suffering disabilities incurred

in the service must have sufficient hospital relief and compensation.

Their dependents must be supported. Rehabilitation and vocational

training must be completed. All of this service must be clean, must be

prompt and effective, and it must be administered in a spirit of the

broadest and deepest human sympathy. If investigation reveals any

present defects of administration or need Of legislation, orders will be

given for the immediate correction of administration, and

recommendations for legislation should be given the highest preference.

At present there are 9,500 vacant beds in Government hospitals, I

recommend that all hospitals be authorized at once to receive and care

for, without hospital pay, the veterans of all wars needing such care,

whenever there are vacant beds, and that immediate steps be taken to

enlarge and build new hospitals to serve all such cases.

The American Legion will present to the Congress a legislative program

too extensive for detailed discussion here. It is a carefully matured

plan. While some of it I do not favor, with much of it I am in hearty

accord, and I recommend that a most painstaking effort be made to

provide remedies for any defects in the administration of the present

laws which their experience has revealed. The attitude of the Government

toward these proposals should be one of generosity. But I do not favor

the granting of a bonus.

COAL

The cost of coal has become unbearably high. It places a great burden on

our industrial and domestic life. The public welfare requires a

reduction in the price of fuel. With the enormous deposits in existence,

failure of supply ought not to be tolerated. Those responsible for the

conditions in this industry should undertake its reform and free it from

any charge of profiteering.

The report of the Coal Commission will be before the Congress. It

comprises all the facts. It represents the mature deliberations and

conclusions of the best talent and experience that ever made a national

survey of the production and distribution of fuel. I do not favor

Government ownership or operation of coal mines. The need is for action

under private ownership that will secure greater continuity of

production and greater public protection. The Federal Government

probably has no peacetime authority to regulate wages, prices, or

profits in coal at the mines or among dealers, but by ascertaining and

publishing facts it can exercise great influence.

The source of the difficulty in the bituminous coal fields is the

intermittence of operation which causes great waste of both capital and

labor. That part of the report dealing with this problem has much

significance, and is suggestive of necessary remedies. By amending, the

car rules, by encouraging greater unity of ownership, and possibly by

permitting common selling agents for limited districts on condition that

they accept adequate regulations and guarantee that competition between

districts be unlimited, distribution, storage, and continuity ought to

be improved.

The supply of coal must be constant. In case of its prospective

interruption, the President should have authority to appoint a

commission empowered to deal with whatever emergency situation might

arise, to aid conciliation and voluntary arbitration, to adjust any

existing or threatened controversy between the employer and the employee

when collective bargaining fails, and by controlling distribution to

prevent profiteering in this vital necessity. This legislation is

exceedingly urgent, and essential to the exercise of national authority

for the protection of the people. Those who undertake the responsibility

of management or employment in this industry do so with the full

knowledge that the public interest is paramount, and that to fail

through any motive of selfishness in its service is such a betrayal of

duty as warrants uncompromising action by the Government.

REORGANIZATION

A special joint committee has been appointed to work out a plan for a

reorganization of the different departments and bureaus of the

Government more scientific and economical than the present system. With

the exception of the consolidation of the War and Navy Departments and

some minor details, the plan has the general sanction of the President

and the Cabinet. It is important that reorganization be enacted into law

at the present session.

AGRICULTURE

Aided by the sound principles adopted by the Government, the business of

the country has had an extraordinary revival. Looked at as a whole, the

Nation is in the enjoyment of remarkable prosperity. Industry and

commerce are thriving. For the most tart agriculture is successful,

eleven staples having risen in value from about $5,300,000,000 two years

ago to about. $7,000,000,000 for the current year. But range cattle are

still low in price, and some sections of the wheat area, notably

Minnesota, North Dakota, and on west, have many cases of actual

distress. With his products not selling on a parity with the products of

industry, every sound remedy that can be devised should be applied for

the relief of the farmer. He represents a character, a type of

citizenship, and a public necessity that must be preserved and afforded

every facility for regaining prosperity.

The distress is most acute among those wholly dependent upon one crop..

Wheat acreage was greatly expanded and has not yet been sufficiently

reduced. A large amount is raised for export, which has to meet the

competition in the world market of large amounts raised on land much

cheaper and much more productive.

No complicated scheme of relief, no plan for Government fixing of

prices, no resort to the public Treasury will be of any permanent value

in establishing agriculture. Simple and direct methods put into

operation by the farmer himself are the only real sources for

restoration.

Indirectly the farmer must be relieved by a reduction of national and

local taxation. He must be assisted by the reorganization of the

freight-rate structure which could reduce charges on his production. To

make this fully effective there ought to be railroad consolidations.

Cheaper fertilizers must be provided.

He must have organization. His customer with whom he exchanges products

o he farm for those of industry is organized, labor is organized,

business is organized, and there is no way for agriculture to meet this

unless it, too, is organized. The acreage of wheat is too large. Unless

we can meet the world market at a profit, we must stop raising for

export. Organization would help to reduce acreage. Systems of

cooperative marketing created by the farmers themselves, supervised by

competent management, without doubt would be of assistance, but, the can

not wholly solve the problem. Our agricultural schools ought to have

thorough courses in the theory of organization and cooperative

marketing.

Diversification is necessary. Those farmers who raise their living on

their land are not greatly in distress. Such loans as are wisely needed

to assist buying stock and other materials to start in this direction

should be financed through a Government agency as a temporary and

emergency expedient.

The remaining difficulty is the disposition of exportable wheat. I do

not favor the permanent interference of the Government in this problem.

That probably would increase the trouble by increasing production. But

it seems feasible to provide Government assistance to exports, and

authority should be given the War Finance Corporation to grant, in its

discretion, the most liberal terms of payment for fats and grains

exported for the direct benefit of the farm.

MUSCLE SHOALS

The Government is undertaking to develop a great water-power project

known as Muscle Shoals, on which it has expended many million dollars.

The work is still going on. Subject to the right to retake in time of

war, I recommend that this property with a location for auxiliary steam

plant and rights of way be sold. This would end the present burden of

expense and should return to the Treasury the largest price possible to

secure.

While the price is an important element, there is another consideration

even more compelling. The agriculture of the Nation needs a greater

supply and lower cost of fertilizer. This is now imported in large

quantities. The best information I can secure indicates that present

methods of power production would not be able profitably to meet the

price at which these imports can be sold. To obtain a supply from this

water power would require long and costly experimentation to perfect a

process for cheap production. Otherwise our purpose would fail

completely. It seems desirable, therefore, in order to protect and

promote the public welfare, to have adequate covenants that such

experimentation be made and carried on to success. The great advantage

of low-priced nitrates must be secured for the direct benefit of the

farmers and the indirect benefit of the public in time of peace, and of

the Government in time of war. If this main object be accomplished, the

amount of money received for the property is not a primary or major

consideration.

Such a solution will involve complicated negotiations, and there is no

authority for that purpose. I therefore recommend that the Congress

appoint a small joint committee to consider offers, conduct

negotiations, and report definite recommendations.

RECLAMATION

By reason of many contributing causes, occupants of our reclamation

projects are in financial difficulties, which in some cases are acute.

Relief should be granted by definite authority of law empowering the

Secretary of the Interior in his discretion to suspend, readjust, and

reassess all charges against water users. This whole question is being

considered by experts. You will have the advantage of the facts and

conclusions which they may develop. This situation, involving a

Government investment of more than $135,000,000, and affecting more than

30,000 water users, is serious. While relief which is necessary should

be granted, yet contracts with the Government which can be met should be

met. The established general policy of these projects should not be

abandoned for any private control.

HIGHWAYS AND FORESTS

Highways and reforestation should continue to have the interest and

support of the Government. Everyone is anxious for good highways. I have

made a liberal proposal in the Budget for the continuing payment to the

States by the Federal Government of its share for this necessary public

improvement. No expenditure of public money contributes so much to the

national wealth as for building good roads.

Reforestation has an importance far above the attention it usually

secures. A special committee of the Senate is investigating this need,

and I shall welcome a constructive policy based on their report.

It is 100 years since our country announced the Monroe doctrine. This

principle has been ever since, and is now, one of the main foundations

of our foreign relations. It must be maintained. But in maintaining it

we must not be forgetful that a great change has taken place. We are no

longer a weak Nation, thinking mainly of defense, dreading foreign

imposition. We are great and powerful. New powers bring new

responsibilities. Our ditty then was to protect ourselves. Added to

that, our duty now is to help give stability to the world. We want

idealism. We want that vision which lifts men and nations above

themselves. These are virtues by reason of their own merit. But they

must not be cloistered; they must not be impractical; they must not be

ineffective.

The world has had enough of the curse of hatred and selfishness, of

destruction and war. It has had enough of the wrongful use of material

power. For the healing of the nations there must be good will and

charity, confidence and peace. The time has come for a more practical

use of moral power, and more reliance upon the principle that right

makes its own might. Our authority among the nations must be represented

by justice and mercy. It is necessary not only to have faith, but to

make sacrifices for our faith. The spiritual forces of the world make

all its final determinations. It is with these voices that America

should speak. Whenever they declare a righteous purpose there need be no

doubt that they will be heard. America has taken her place in the world

as a Republic--free, independent, powerful. The best service that can be

rendered to humanity is the assurance that this place will be

maintained.

***

State of the Union Address

Calvin Coolidge

December 3, 1924

To the Congress of the United States:

The present state of the Union, upon which it is customary for the

President to report to the Congress under the provisions of the

Constitution, is such that it may be regarded with encouragement and

satisfaction by every American. Our country is almost unique in its

ability to discharge fully and promptly all its obligations at home and

abroad, and provide for all its inhabitants an increase in material

resources, in intellectual vigor and in moral power. The Nation holds a

position unsurpassed in all former human experience. This does not mean

that we do not have any problems. It is elementary that the increasing

breadth of our experience necessarily increases the problems of our

national life. But it does mean that if all will but apply ourselves

industriously and honestly, we have ample powers with which to meet our

problems and provide for I heir speedy solution. I do not profess that

we can secure an era of perfection in human existence, but we can

provide an era of peace and prosperity, attended with freedom and

justice and made more and more satisfying by the ministrations of the

charities and humanities of life.

Our domestic problems are for the most part economic. We have our

enormous debt to pay, and we are paying it. We have the high cost of

government to diminish, and we are diminishing it. We have a heavy

burden of taxation to reduce, and we are reducing it. But while

remarkable progress has been made in these directions, the work is yet

far from accomplished. We still owe over $21,000,000,000, the cost of

the National Government is still about $3,500,000,000, and the national

taxes still amount to about $27 for each one of our inhabitants. There

yet exists this enormous field for the application of economy.

In my opinion the Government can do more to remedy the economic ills of

the people by a system of rigid economy in public expenditure than can

be accomplished through any other action. The costs of our national and

local governments combined now stand at a sum close to $100 for each

inhabitant of the land. A little less than one-third of this is

represented by national expenditure, and a little more than two-thirds

by local expenditure. It is an ominous fact that only the National

Government is reducing its debt. Others are increasing theirs at about

$1,000,000,000 each year. The depression that overtook business, the

disaster experienced in agriculture, the lack of employment and the

terrific shrinkage in all values which our country experienced in a most

acute form in 1920, resulted in no small measure from the prohibitive

taxes which were then levied on all productive effort. The establishment

of a system of drastic economy in public expenditure, which has enabled

us to pay off about one-fifth of the national debt since 1919, and

almost cut in two the national tax burden since 1921, has been one of

the main causes in reestablishing a prosperity which has come to include

within its benefits almost every one of our inhabitants. Economy reaches

everywhere. It carries a blessing to everybody.

The fallacy of the claim that the costs of government are borne by the

rich and those who make a direct contribution to the National Treasury

can not be too often exposed. No system has been devised, I do not think

any system could be devised, under which any person living in this

country could escape being affected by the cost of our government. It

has a direct effect both upon the rate and the purchasing power of

wages. It is felt in the price of those prime necessities of existence,

food, clothing, fuel and shelter. It would appear to be elementary that

the more the Government expends the more it must require every producer

to contribute out of his production to the Public Treasury, and the less

he will have for his own benefit. The continuing costs of public

administration can be met in only one way--by the work of the people.

The higher they become, the more the people must work for the

Government. The less they are, the more the people can work for

themselves.

The present estimated margin between public receipts and expenditures

for this fiscal year is very small. Perhaps the most important work that

this session of the Congress can do is to continue a policy of economy

and further reduce the cost of government, in order that we may have a

reduction of taxes for the next fiscal year. Nothing is more likely to

produce that public confidence which is the forerunner and the mainstay

of prosperity, encourage and enlarge business opportunity with ample

opportunity for employment at good wages, provide a larger market for

agricultural products, and put our country in a stronger position to be

able to meet the world competition in trade, than a continuing policy of

economy. Of course necessary costs must be met, proper functions of the

Government performed, and constant investments for capital account and

reproductive effort must be carried on by our various departments. But

the people must know that their Government is placing upon them no

unnecessary burden.

TAXES

Everyone desires a reduction of taxes, and there is a great

preponderance of sentiment in favor of taxation reform. When I approved

the present tax law, I stated publicly that I did so in spite of certain

provisions which I believed unwise and harmful. One of the most glaring

of these was the making public of the amounts assessed against different

income-tax payers. Although that damage has now been done, I believe its

continuation to be detrimental To the public welfare and bound to

decrease public revenues, so that it ought to be repealed.

Anybody can reduce taxes, but it is not so easy to stand in the gap and

resist the passage of increasing appropriation bills which would make

tax reduction impossible. It will be very easy to measure the strength

of the attachment to reduced taxation by the power with which increased

appropriations are resisted. If at the close of the present session the

Congress has kept within the budget which I propose to present, it will

then be possible to have a moderate amount of tax reduction and all the

tax reform that the Congress may wish for during the next fiscal year.

The country is now feeling the direct stimulus which came from the

passage of the last revenue bill, and under the assurance of a

reasonable system of taxation there is every prospect of an era of

prosperity of unprecedented proportions. But it would be idle to expect

any such results unless business can continue free from excess profits

taxation and be accorded a system of surtaxes at rates which have for

their object not the punishment of success or the discouragement of

business, but the production of the greatest amount of revenue from

large incomes. I am convinced that the larger incomes of the country

would actually yield more revenue to the Government if the basis of

taxation were scientifically revised downward. Moreover the effect of

the present method of this taxation is to increase the cost of interest

on productive enterprise and to increase the burden of rent. It is

altogether likely that such reduction would so encourage and stimulate

investment that it would firmly establish our country in the economic

leadership of the world.

WATERWAYS

Meantime our internal development should go on. Provision should be made

for flood control of such rivers as the Mississippi and the Colorado,

and for the opening up of our inland waterways to commerce.

Consideration is due to the project of better navigation from the Great

Lakes to the Gulf. Every effort is being made to promote an agreement

with Canada to build the, St. Lawrence waterway. There are pending

before the Congress bills for further development of the Mississippi

Basin, for the taking over of the Cape Cod Canal in accordance with a

moral obligation which seems to have been incurred during the war, and

for the improvement of harbors on both the Pacific and the Atlantic

coasts. While this last should be divested of some of its projects and

we must proceed slowly, these bills in general have my approval. Such

works are productive of wealth and in the long run tend to a reduction

of the tax burden.

RECLAMATION

Our country has a well defined policy of reclamation established under

statutory authority. This policy should be continued and made a

self-sustaining activity administered in a manner that will meet local

requirements and bring our and lands into a profitable state of

cultivation as fast as there is a market for their products. Legislation

is pending based on the report of the Fact Finding Commission for the

proper relief of those needing extension of time in which to meet their

payments on irrigated land, and for additional amendments and reforms of

our reclamation laws, which are all exceedingly important and should be

enacted at once.

No more important development has taken place in the last year than the

beginning of a restoration of agriculture to a prosperous condition. We

must permit no division of classes in this country, with one occupation

striving to secure advantage over another. Each must proceed under open

opportunities and with a fair prospect of economic equality. The

Government can not successfully insure prosperity or fix prices by

legislative fiat. Every business has its risk and its times of

depression. It is well known that in the long run there will be a more

even prosperity and a more satisfactory range of prices under the

natural working out of economic laws than when the Government undertakes

the artificial support of markets and industries. Still we can so order

our affairs, so protect our own people from foreign competition, so

arrange our national finances, so administer our monetary system, so

provide for the extension of credits, so improve methods of

distribution, as to provide a better working machinery for the

transaction of the business of the Nation with the least possible

friction and loss. The Government has been constantly increasing its

efforts in these directions for the relief and permanent establishment

of agriculture on a sound and equal basis with other business.

It is estimated that the value of the crops for this harvest year may

reach $13,000,000,000, which is an increase of over $3,000,000,000 in

three years. It compares with $7,100,000,000 in 1913, and if we make

deduction from the figures of 1924 for the comparatively decreased value

of the dollar, the yield this year still exceeds 1913 in purchasing

power by over $1,000,000,000, and in this interval there has been no

increase in the number of farmers. Mostly by his own effort the farmer

has decreased the cost of production. A marked increase in the price of

his products and some decrease in the price of his supplies has brought

him about to a parity with the rest of the Nation. The crop area of this

season is estimated at 370,000,000 acres, which is a decline of

3,000,000 acres from last year, and 6,000,000 acres from 1919. This has

been a normal and natural application of economic laws, which has placed

agriculture on a foundation which is undeniably sound and beginning to

be satisfactory.

A decrease in the world supply of wheat has resulted in a very large

increase in the price of that commodity. The position of all

agricultural products indicates a better balanced supply, but we can not

yet conclude that agriculture is recovered from the effects of the war

period or that it is permanently on a prosperous basis. The cattle

industry has not yet recovered and in some sections has been suffering

from dry weather. Every effort must be made both by Government activity

and by private agencies to restore and maintain agriculture to a

complete normal relationship with other industries.

It was on account of past depression, and in spite of present more

encouraging conditions, that I have assembled an Agricultural Conference

made up of those who are representative of this great industry in both

its operating and economic sides. Everyone knows that the great need of

the farmers is markets. The country is not suffering on the side of

production. Almost the entire difficulty is on the side of distribution.

This reaches back, of course, to unit costs and diversification, and

many allied subjects. It is exceedingly intricate, for our domestic and

foreign trade, transportation and banking, and in fact our entire

economic system, are closely related to it. In time for action at this

session, I hope to report to the Congress such legislative remedies as

the conference may recommend. An appropriation should be made to defray

their necessary expenses.

MUSCLE SHOALS

The production of nitrogen for plant food in peace and explosives in war

is more and more important. It is one of the chief sustaining elements

of life. It is estimated that soil exhaustion each year is represented

by about 9,000,000 tons and replenishment by 5,450,000 tons. The deficit

of 3,550,000 tons is reported to represent the impairment of 118,000,000

acres of farm lands each year.

To meet these necessities the Government has been developing a water

power project at Muscle Shoals to be equipped to produce nitrogen for

explosives and fertilizer. It is my opinion that the support of

agriculture is the chief problem to consider in connection with this

property. It could by no means supply the present needs for nitrogen,

but it would help and its development would encourage bringing other

water powers into like use.

Several offers have been made for the purchase of this property.

Probably none of them represent final terms. Much costly experimentation

is necessary to produce commercial nitrogen. For that reason it is a

field better suited to private enterprise than to Government operation.

I should favor a sale of this property, or long-time lease, tinder rigid

guaranties of commercial nitrogen production at reasonable prices for

agricultural use. There would be a surplus of power for many years over

any possibility of its application to a developing manufacture of

nitrogen. It may be found advantageous to dispose of the right to

surplus power separately with such reservations as will allow its

gradual withdrawal and application to nitrogen manufacture. A

subcommittee of the Committees on Agriculture should investigate this

field and negotiate with prospective purchasers. If no advantageous

offer be made, the development should continue and the plant should be

dedicated primarily to the production of materials for the fertilization

of the soil.

RAILWAYS

The railways during the past year have made still further progress in

recuperation from the war, with large rains in efficiency and ability

expeditiously to handle the traffic of the country. We have now passed

through several periods of peak traffic without the car shortages which

so frequently in the past have brought havoc to our agriculture and

industries. The condition of many of our great freight terminals is

still one of difficulty and results in imposing, large costs on the

public for inward-bound freight, and on the railways for outward-bound

freight. Owing to the growth of our large cities and the great increase

in the volume of traffic, particularly in perishables, the problem is

not only difficult of solution, but in some cases not wholly solvable by

railway action alone.

In my message last year I emphasized the necessity for further

legislation with a view to expediting the consolidation of our rail ways

into larger systems. The principle of Government control of rates and

profits, now thoroughly imbedded in our governmental attitude toward

natural monopolies such as the railways, at once eliminates the need of

competition by small units as a method of rate adjustment. Competition

must be preserved as a stimulus to service, but this will exist and can

be increased tinder enlarged systems. Consequently the consolidation of

the railways into larger units for the purpose of securing the

substantial values to the public which will come from larger operation

has been the logical conclusion of Congress in its previous enactments,

and is also supported by the best opinion in the country. Such

consolidation will assure not only a greater element of competition as

to service, but it will afford economy in operation, greater stability

in railway earnings, and more economical financing. It opens large

possibilities of better equalization of rates between different classes

of traffic so as to relieve undue burdens upon agricultural products and

raw materials generally, which are now not possible without ruin to

small units owing to the lack of diversity of traffic. It would also

tend to equalize earnings in such fashion as to reduce the importance of

section 15A, at which criticism, often misapplied, has been directed. A

smaller number of units would offer less difficulties in labor

adjustments and would contribute much to the, solution of terminal

difficulties.

The consolidations need to be carried out with due regard to public

interest and to the rights and established life of various communities

in our country. It does not seem to me necessary that we endeavor to

anticipate any final plan or adhere to an artificial and unchangeable

project which shall stipulate a fixed number of systems, but rather we

ought to approach the problem with such a latitude of action that it can

be worked out step by step in accordance with a comprehensive

consideration of public interest. Whether the number of ultimate systems

shall be more or less seems to me can only be determined by time and

actual experience in the development of such consolidations.

Those portions of the present law contemplating consolidations ore not,

sufficiently effective in producing expeditious action and need

amplification of the authority of the Interstate Commerce Commission,

particularly in affording a period for voluntary proposals to the

commission and in supplying Government pressure to secure action after

the expiration of such a period.

There are other proposals before Congress for amending the

transportation acts. One of these contemplates a revision of the method

of valuation for rate-making purposes to be followed by a renewed

valuation of the railways. The valuations instituted by the Interstate

Commerce Commission 10 years ago have not yet been completed. They have

cost the Government an enormous sum, and they have imposed great

expenditure upon the railways, most of which has in effect come out of

the public in increased rates. This work should not be abandoned or

supplanted until its results are known and can be considered.

Another matter before the Congress is legislation affecting the labor

sections of the transportation act. Much criticism has been directed at

the workings of this section and experience has shown that some useful

amendment could be made to these provisions.

It would be helpful if a plan could be adopted which, while retaining

the practice of systematic collective bargaining with conciliation

voluntary arbitration of labor differences, could also provide

simplicity in relations and more direct local responsibility of

employees and managers. But such legislation will not meet the

requirements of the situation unless it recognizes the principle that t

e public has a right to the uninterrupted service of transportation, and

therefore a right to be heard when there is danger that the Nation may

suffer great injury through the interruption of operations because of

labor disputes. If these elements are not comprehended in proposed

legislation, it would be better to gain further experience with the

present organization for dealing with these questions before undertaking

a change.

SHIPPING BOARD

The form of the organization of the Shipping Board was based originally

on its functions as a semi judicial body in regulation of rates. During

the war it was loaded with enormous administrative duties. It has been

demonstrated time and again that this form of organization results in

indecision, division of opinion and administrative functions, which make

a wholly inadequate foundation for the conduct of a great business

enterprise. The first principle in securing the objective set out by

Congress in building up the American merchant marine upon the great

trade routes and subsequently disposing of it into private operation can

not proceed with effectiveness until the entire functions of the board

are reorganized. The immediate requirement is to transfer into the

Emergency Fleet, Corporation the whole responsibility of operation of

the fleet and other property, leaving to the Shipping Board solely the

duty of determining certain major policies which require deliberative

action.

The procedure under section 28 of the merchant marine act has created

great difficulty and threatened friction during the past 12 months. Its

attempted application developed not only great opposition from

exporters, particularly as to burdens that may be imposed upon

agricultural products, but also great anxiety in the different seaports

as to the effect upon their relative rate structures. This trouble will

certainly recur if action is attempted under this section. It is

uncertain in some of its terms and of great difficulty in

interpretation.

It is my belief that action under this section should be suspended until

the Congress can reconsider the entire question in the light of the

experience that has been developed since its enactment.

NATIONAL ELECTIONS

Nothing is so fundamental to the integrity of a republican form of

government as honesty in all that relates to the conduct of elections. I

am of the opinion that the national laws governing the choice of members

of the Congress should be extended to include appropriate representation

of the respective parties at the ballot box ant equality of

representation on the various registration boards, wherever they exist.

THE JUDICIARY

The docket of the Supreme Court is becoming congested. At the opening

term last year it had 592 cases, while this year it had 687 cases.

Justice long delayed is justice refused. Unless the court be given power

by preliminary and summary consideration to determine the importance of

cases, and by disposing of those which are not of public moment reserve

its time for the more extended consideration of the remainder, the

congestion of the docket is likely to increase. It is also desirable

that Supreme Court should have power to improve and reform procedure in

suits at law in the Federal courts through the adoption of appropriate

rules. The Judiciary Committee of the Senate has reported favorably upon

two bills providing for these reforms which should have the immediate

favorable consideration of the Congress.

I further recommend that provision be made for the appointment of a

commission, to consist of two or three members of the Federal judiciary

and as many members of the bar, to examine the present criminal code of

procedure and recommend to the Congress measures which may reform and

expedite court procedure in the administration and enforcement of our

criminal laws.

PRISON REFORM

Pending before the Congress is a bill which has already passed one House

providing for a reformatory to which could be committed first offenders

and young men for the purpose of segregating them from contact with

banned criminals and providing them with special training in order to

reestablish in them the power to pursue a law-abiding existence in the

social and economic life of the Nation. This is a matter of so much

importance as to warrant the early attention of the present session.

Further provision should also be made, for a like reason, for a separate

reformatory for women.

NATIONAL POLICE BUREAU

Representatives of the International Police Conference will bring to the

attention of the Congress a proposal for the establishment of a national

police bureau. Such action would provide a central point for gathering,

compiling, and later distributing to local police authorities much

information which would be helpful in the prevention and detection of

crime. I believe this bureau is needed, and I recommend favorable

consideration of this proposal.

DISTRICT OF COLUMBIA WELFARE

The welfare work of the District of Columbia is administered by several

different boards dealing with charities and various correctional

efforts. It would be an improvement if this work were consolidated and

placed under the direction of a single commission.

FRENCH SPOLIATION CLAIMS

During the last session of the Congress legislation was introduced

looking to the payment of the remaining claims generally referred to as

the French spoliation claims. The Congress has provided for the payment

of many similar claims. Those that remain unpaid have been long pending.

The beneficiaries thereunder have every reason to expect payment. These

claims have been examined by the Court of Claims and their validity and

amount determined. The United States ought to pay its debts. I recommend

action by the Congress which will permit of the payment of these

remaining claims.

THE WAGE EARNER

Two very important policies have been adopted by this country which,

while extending their benefits also in other directions, have been of

the utmost importance to the wage earners. One of these is the

protective tariff, which enables our people to live according to a

better standard and receive a better rate of compensation than any

people, any time, anywhere on earth, ever enjoyed. This saves the

American market for the products of the American workmen. The other is a

policy of more recent origin and seeks to shield our wage earners from

the disastrous competition of a great influx of foreign peoples. This

has been done by the restrictive immigration law. This saves the

American job for the American workmen. I should like to see the

administrative features of this law rendered a little more humane for

the purpose of permitting those already here a greater latitude in

securing admission of members of their own families. But I believe this

law in principle is necessary and sound, and destined to increase

greatly the public welfare. We must maintain our own economic position,

we must defend our own national integrity.

It is gratifying to report that the progress of industry, the enormous

increase in individual productivity through labor-saving devices, and

the high rate of wages have all combined to furnish our people in

general with such an abundance not only of the necessaries but of the

conveniences of life that we are by a natural evolution solving our

problems of economic and social justice.

THE NEGRO

These developments have brought about a very remarkable improvement in

the condition of the negro race. Gradually, but surely, with the almost

universal sympathy of those among whom they live, the colored people are

working out their own destiny. I firmly believe that it is better for

all concerned that they should be cheerfully accorded their full

constitutional rights, that they should be protected from all of those

impositions to which, from their position, they naturally fall a prey,

especially from the crime of lynching and that they should receive every

encouragement to become full partakers in all the blessings of our

common American citizenship.

CIVIL SERVICE

The merit system has long been recognized as the correct basis for

employment in our, civil service. I believe that first second, and third

class postmasters, and without covering in the present membership the

field force of prohibition enforcement, should be brought within the

classified service by statute law. Otherwise the Executive order of one

administration is changed by the Executive order of another

administration, and little real progress is made. Whatever its defects,

the merit system is certainly to be preferred to the spoils system.

DEPARTMENTAL REORGANIZATION

One way to save public money would be to pass the pending bill for the

reorganization of the various departments. This project has been pending

for some time, and has had the most careful consideration of experts and

the thorough study of a special congressional committee. This

legislation is vital as a companion piece to the Budget law. Legal

authority for a thorough reorganization of the Federal structure with

some latitude of action to the Executive in the rearrangement of

secondary functions would make for continuing economy in the shift of

government activities which must follow every change in a developing

country. Beyond this many of the independent agencies of the Government

must be placed under responsible Cabinet officials, if we are to have

safeguards of efficiency, economy, and probity.

ARMY AND NAVY

Little has developed in relation to our national defense which needs

special attention. Progress is constantly being made in air navigation

and requires encouragement and development. Army aviators have made a

successful trip around the world, for which I recommend suitable

recognition through provisions for promotion, compensation, and

retirement. Under the direction of the Navy a new Zeppelin has been

successfully brought from Europe across the Atlantic to our own country.

Due to the efficient supervision of the Secretary of War the Army of the

United States has been organized with a small body of Regulars and a

moderate National Guard and Reserve. The defense test of September 12

demonstrated the efficiency of the operating plans. These methods and

operations are well worthy of congressional support.

Under the limitation of armaments treaty a large saving in outlay and a

considerable decrease in maintenance of the Navy has been accomplished.

We should maintain the policy of constantly working toward the full

treaty strength of the Navy. Careful investigation is being made in this

department of the relative importance of aircraft, surface and submarine

vessels, in order that we may not fail to take advantage of all modern

improvements for our national defense. A special commission also is

investigating the problem of petroleum oil for the Navy, considering the

best policy to insure the future supply of fuel oil and prevent the

threatened drainage of naval oil reserves. Legislative action is

required to carry on experiments in oil shale reduction, as large

deposits of this type have been set aside for the use of the Navy.

We have been constantly besought to engage in competitive armaments.

Frequent reports will reach us of the magnitude of the military

equipment of other, nations. We shall do well to be little impressed by

such reports or such actions. Any nation undertaking to maintain a

military establishment with aggressive and imperialistic designs will

find itself severely handicapped in the economic development of the

world. I believe thoroughly in the Army and Navy, in adequate defense

and preparation. But I am opposed to any policy of competition in

building and maintaining land or sea armaments.

Our country has definitely relinquished the old standard of dealing with

other countries by terror and force, and is definitely committed to the

new standard of dealing with them through friendship and understanding.

This new policy should be constantly kept in mind by the guiding forces

of the Army and Navy, by the. Congress and by the country at large. I

believe it holds a promise of great benefit to humanity. I shall resist

any attempt to resort to the old methods and the old standards. I am

especially solicitous that foreign nations should comprehend the candor

and sincerity with which we have adopted this position. While we propose

to maintain defensive and supplementary police forces by land and sea,

and to train them through inspections and maneuvers upon appropriate

occasions in order to maintain their efficiency, I wish every other

nation to understand that this does not express any unfriendliness or

convey any hostile intent. I want the armed forces of America to be

considered by all peoples not as enemies but as friends as the

contribution which is made by this country for the maintenance of the

peace and security of the world.

VETERANS

With the authorization for general hospitalization of the veterans of

all wars provided during the present year, the care and treatment of

those who have served their country in time of peril and the attitude of

the Government toward them is not now so much one of needed legislation

as one of careful, generous and humane administration. It will ever be

recognized that their welfare is of the first concern and always

entitled to the most solicitous consideration oil the part of their

fellow citizens. They are organized in various associations, of which

the chief and most representative is the American Legion. Through its

officers the Legion will present to the Congress numerous suggestions

for legislation. They cover such a wide variety of subjects that it is

impossible to discuss them within the scope of this message. With many

of the proposals I join in hearty approval and commend them all to the

sympathetic investigation and consideration of the Congress.

FOREIGN RELATIONS

At no period in the past 12 years have our foreign relations been in

such a satisfactory condition as they are at the present time. Our

actions in the recent months have greatly strengthened the American

policy of permanent peace with independence. The attitude which our

Government took and maintained toward an adjustment of European

reparations, by pointing out that it wits not a political but a business

problem, has demonstrated its wisdom by its actual results. We desire to

see Europe restored that it may resume its productivity in the increase

of industry and its support in the advance of civilization. We look with

great gratification at the hopeful prospect of recuperation in Europe

through the Dawes plan. Such assistance as can be given through the

action of the public authorities and of our private citizens, through

friendly counsel and cooperation, and through economic and financial

support, not for any warlike effort but for reproductive enterprise, not

to provide means for unsound government financing but to establish sound

business administration should be unhesitatingly provided.

Ultimately nations, like individuals, can not depend upon each other but

must depend upon themselves. Each one must work out its own salvation.

We have every desire to help. But with all our resources we are

powerless to save unless our efforts meet with a constructive response.

The situation in our own country and all over the world is one Chat can

be improved only by bard work and self-denial. It is necessary to reduce

expenditures, increase savings and liquidate debts. It is in this

direction that there lies the greatest hope of domestic tranquility and

international peace. Our own country ought to finish the leading example

in this effort. Our past adherence to this policy, our constant refusal

to maintain a military establishment that could be thought to menace the

security of others, our honorable dealings with other nations whether

great or small, has left us in the almost constant enjoyment of peace.

It is not necessary to stress the general desire of all the people of

this country for the promotion of peace. It is the leading principle of

all our foreign relations. We have on every occasion tried to cooperate

to this end in all ways that were consistent with our proper

independence and our traditional policies. It will be my constant effort

to maintain these principles, and to reinforce them by all appropriate

agreements and treaties. While we desire always to cooperate and to

help, we are equally determined to be independent and free. Right and

truth and justice and humanitarian efforts will have the moral support

of this country all over the world. But we do not wish to become

involved in the political controversies of others. Nor is the country

disposed to become a member of the League of Nations or to assume the

obligations imposed by its covenant.

INTERNATIONAL COURT

America has been one of the foremost nations in advocating tribunals for

the settlement of international disputes of a justiciable character. Our

representatives took a leading in those conferences which resulted in

the establishment of e ague Tribunal, and later in providing for a

Permanent Court of International Justice. I believe it would be for the

advantage of this country and helpful to the stability of other nations

for us to adhere to the protocol establishing, that court upon the

conditions stated in the recommendation which is now before the Senate,

and further that our country shall not be bound by advisory opinions

which may be, rendered by the court upon questions which we have not

voluntarily submitted for its judgment. This court would provide a

practical and convenient tribunal before which we could go voluntarily,

but to which we could not be summoned, for a determination of

justiciable questions when they fail to be resolved by diplomatic

negotiations.

DISARMAMENT CONFERENCE

Many times I have expressed my desire to see the work of the Washington

Conference on Limitation of Armaments appropriately supplemented by

further agreements for a further reduction M for the purpose of

diminishing the menace and waste of the competition in preparing

instruments of international war. It has been and is my expectation that

we might hopefully approach other great powers for further conference on

this subject as soon as the carrying out of the present reparation plan

as the established and settled policy of Europe has created a favorable

opportunity. But on account of proposals which have already been made by

other governments for a European conference, it will be necessary to

wait to see what the outcome of their actions may be. I should not wish

to propose or have representatives attend a conference which would

contemplate commitments opposed to the freedom of action we desire to

maintain unimpaired with respect to our purely domestic policies.

INTERNATIONAL LAW

Our country should also support efforts which are being made toward the

codification of international law. We can look more hopefully, in the

first instance, for research and studies that are likely to be

productive of results, to a cooperation among representatives of the bar

and members of international law institutes and societies, than to a

conference of those who are technically representative of their

respective governments, although, when projects have been developed,

they must go to the governments for their approval. These expert

professional studies are going on in certain quarters and should have

our constant encouragement and approval.

OUTLAW OF WAR

Much interest has of late been manifested in this country in the

discussion of various proposals to outlaw aggressive war. I look with

great sympathy upon the examination of this subject. It is in harmony

with the traditional policy of our country, which is against aggressive

war and for the maintenance of permanent and honorable peace. While, as

I have said, we must safeguard our liberty to deal according to our own

judgment with our domestic policies, we can not fail to view with

sympathetic interest all progress to this desired end or carefully to

study the measures that may be proposed to attain it.

LATIN AMERICA

While we are desirous of promoting peace in every quarter of the globe,

we have a special interest in the peace of this hemisphere. It is our

constant desire that all causes of dispute in this area may be

tranquilly and satisfactorily adjusted. Along with our desire for peace

is the earnest hope for the increased prosperity of our sister republics

of Latin America, and our constant purpose to promote cooperation with

them which may be mutually beneficial and always inspired by the most

cordial friendships.

FOREIGN DEBTS

About $12,000,000,000 is due to our Government from abroad, mostly from

European Governments. Great Britain, Finland, Hungary, Lithuania and

Poland have negotiated settlements amounting close to $5,000,000,000.

This represents the funding of over 42 per cent of the debt since the

creation of the special Foreign Debt Commission. As the life of this

commission is about to expire, its term should be extended. I am opposed

to the cancellation of these debts and believe it for the best welfare

of the world that they should be liquidated and paid as fast as

possible. I do not favor oppressive measures, but unless money that is

borrowed is repaid credit can not be secured in time of necessity, and

there exists besides a moral obligation which our country can not ignore

and no other country can evade. Terms and conditions may have to conform

to differences in the financial abilities of the countries concerned,

but the principle that each country should meet its obligation admits of

no differences and is of universal application.

It is axiomatic that our country can not stand still. It would seem to

be perfectly plain from recent events that it is determined to go

forward. But it wants no pretenses, it wants no vagaries. It is

determined to advance in an orderly, sound and common-sense way. It does

not propose to abandon the theory of the Declaration that the people

have inalienable rights which no majority and no power of government can

destroy. It does not propose to abandon the practice of the Constitution

that provides for the protection of these rights. It believes that

within these limitations, which are imposed not by the fiat of man but

by the law of the Creator, self-government is just and wise. It is

convinced that it will be impossible for the people to provide their own

government unless they continue to own their own property.

These are the very foundations of America. On them has been erected a

Government of freedom and equality, of justice and mercy, of education

and charity. Living under it and supporting it the people have come into

great possessions on the material and spiritual sides of life. I want to

continue in this direction. I know that the Congress shares with me that

desire. I want our institutions to be more and more expressive of these

principles. I want the people of all the earth to see in the American

flag the symbol of a Government which intends no oppression at home and

no aggression abroad, which in the spirit of a common brotherhood

provides assistance in time of distress.

***

State of the Union Address

Calvin Coolidge

December 8, 1925

Members of the Congress:

In meeting the constitutional requirement of informing the Congress upon

the state of the Union, it is exceedingly gratifying to report that the

general condition is one of progress and prosperity. Here and there are

comparatively small and apparently temporary difficulties needing

adjustment and improved administrative methods, such as are always to be

expected, but in the fundamentals of government and business the results

demonstrate that we are going in the right direction. The country does

not appear to require radical departures from the policies already

adopted so much as it needs a further extension of these policies and

the improvement of details. The age of perfection is still in the

somewhat distant future, but it is more in danger of being retarded by

mistaken Government activity than it is from lack of legislation. We are

by far the most likely to accomplish permanent good if we proceed with

moderation.

In our country the people are sovereign and independent, and must accept

the resulting responsibilities. It is their duty to support themselves

and support the Government. That is the business of the Nation, whatever

the charity of the Nation may require. The functions which the Congress

are to discharge are not those of local government but of National

Government. The greatest solicitude should be exercised to prevent any

encroachment upon the rights of the States or their various political

subdivisions. Local self-government is one of our most precious

possessions. It is the greatest contributing factor to the stability

strength liberty, and progress of the Nation. It ought not to be in

ringed by assault or undermined by purchase. It ought not to abdicate

its power through weakness or resign its authority through favor. It

does not at all follow that because abuses exist it is the concern of

the Federal Government to attempt the r reform.

Society is in much more danger from encumbering the National Government

beyond its wisdom to comprehend, or its ability to administer, than from

leaving the local communities to bear their own burdens and remedy their

own evils. Our local habit and custom is so strong, our variety of race

and creed is so great the Federal authority is so tenuous, that the area

within which it can function successfully is very limited. The wiser

policy is to leave the localities, so far as we can, possessed of their

own sources of revenue and charged with their own obligations.

GOVERNMENT ECONOMY

It is a fundamental principle of our country that the people are

sovereign. While they recognize the undeniable authority of the state,

they have established as its instrument a Government of limited powers.

They hold inviolate in their own hands the jurisdiction over their own

freedom and the ownership of their own property. Neither of these can be

impaired except by due process of law. The wealth of our country is not

public wealth, but private wealth. It does not belong to the Government,

it belongs to the people. The Government has no justification in taking

private Property except for a public purpose. It is always necessary to

keep these principles in mind in the laying of taxes and in the making

of appropriations. No right exists to levy on a dollar, or to order the

expenditure of a dollar, of the money of the people, except for a

necessary public purpose duly authorized by the Constitution. The power

over the purse is the power over liberty.

That is the legal limitation within which the Congress can act, How it

will, proceed within this limitation is always a question of policy.

When the country is prosperous and free from debt, when the rate of

taxation is low, opportunity exists for assuming new burdens and

undertaking new enterprises. Such a condition now prevails only to a

limited extent. All proposals for assuming new obligations ought to be

postponed, unless they are reproductive capital investments or are such

as are absolutely necessary at this time. We still have an enormous debt

of over $20,000,000,000, on which the interest and sinking-fund

requirements are $1,320,000,000. Our appropriations for the Pension

Office and the Veterans’ Bureau are $600,000,000. The War and Navy

Departments call for $642,000,000. Other requirements, exclusive of the

Post Office which is virtually self-sustaining, brought the

appropriations for the current year up to almost $3,100,060,000. This

shows an expenditure of close to $30 for every inhabitant of our

country. For the average family of five it means a tax, directly or

indirectly paid, of about $150 for national purposes alone. The local

tax adds much more. These enormous expenditures ought not to be

increased, but through every possible effort they ought to be reduced.

Only one of these great items can be ultimately extinguished. That is

the item of our war debt. Already this has been reduced to about

$6,000,000,000, which means an annual saving in interest of close to

$250,000,000. The present interest charge is about $820,000,000 yearly.

It would seem to be obvious that the sooner this debt can be retired the

more the taxpayers will save in interest and the easier it will be to

secure funds with which to prosecute needed running expenses,

constructions, and improvements. This item of $820,000,000 for interest

is a heavy charge on all the people of the country, and it seems to me

that we might well consider whether it is not greatly worth while to

dispense with it as early as possible by retiring the principal debt

which it is required to serve.

It has always been our policy to retire our debts. That of the

Revolutionary War period, notwithstanding the additions made in 1812,

was paid by 1835. and the Civil War debt within 23 years. Of the amount

already paid, over $1,000,000,000 is a reduction in cash balances. That

source is exhausted. Over one and two-thirds billions of dollars was

derived from excess receipts. Tax reduction eliminates that. The sale of

surplus war materials has been another element of our income. That is

practically finished. With these eliminated, the reduction of the debt

has been only about $500,000,000 each year, not an excessive sum on so

large a debt.

Proposals have been made to extend the payment over a period of 62

years. If $1,000,000,000 is paid at the end of 20 years, the cost to the

taxpayers is the principal and, if the interest is 4% per cent, a total

of $1,850,000,000. If the same sum is paid at the end of 62 years, the

cost is $3,635,000,000, or almost double. Here is another consideration:

Compared with its purchasing power in 1913, the dollar we borrowed

represented but 52 cents. As the value of our dollar increases, due to

the falling prices of commodities, the burden of our debt increases. It

has now risen to 631/2 cents. The taxpayer will be required to produce

nearly twice the amount of commodities to pay his debt if the dollar

returns to the 1913 value. The more we pay while prices are high, the

easier it will be.

Deflation of government after a war period is slower than deflation of

business, where curtailment is either prompt and effective or disaster

follows. There is room for further economy in the cost of the Federal

Government, but a co n of current expenditures with pre-war expenditures

is not able to the efficiency with which Government business is now

being done. The expenditures of 19161 the last pre-war year, were

$742,000,000, and in 1925 over $3,500,000,000, or nearly five times as

great. If we subtract expenditures for debt retirements and interest,

veterans’ relief, increase of pensions, and other special outlays,

consisting of refunds, trust investments, and like charges, we find that

the general expenditures of the Government in 1925 were slightly more

than twice as large as in 1916.

As prices in 1925 were approximately 40 per cent higher than in 1916,

the cost of the same Government must also have increased. But the

Government is not the same. It is more expensive to collect the much

greater revenue necessary and to administer our great debt. We have

given enlarged and improved services to agriculture and commerce. Above

all, America has grown in population and wealth. Government expenditures

must always share in this growth. Taking into account the factors I have

mentioned, I believe that present Federal expenses are not far out of

line with pre-war expenses. We have nearly accomplished the deflation.

This does not mean that further economies will not come. As we reduce

our debt our interest charges decline. There are many details yet to

correct. The real improvement, however, must come not from additional

curtailment of expenses, but by a more intelligent, more ordered

spending. Our economy must be constructive. While we should avoid as far

as possible increases in permanent current expenditures, oftentimes a

capital outlay like internal improvements will result in actual

constructive saving. That is economy in its best sense. It is an

avoidance of waste that there may be the means for an outlay to-day

which will bring larger returns to-morrow. We should constantly engage

in scientific studies of our future requirements and adopt an orderly

program for their service. Economy is the method by which we prepare

to-day to afford the improvements of to-morrow.

A mere policy of economy without any instrumentalities for putting it

into operation would be very ineffective. The Congress has wisely set up

the Bureau of the Budget to investigate and inform the President what

recommendations he ought to make for current appropriations. This gives

a centralized authority where a general and comprehensive understanding

can be reached of the sources of income and the most equitable

distribution of expenditures. How well it has worked is indicated by the

fact that the departmental estimates for 1922, before the budget law,

were $4,068,000,000 while the Budget estimates for 1927 are

$3,156,000,000. This latter figure shows the reductions in departmental

estimates for the coming year made possible by the operation of the

Budget system that the Congress has provided.

But it is evidently not enough to have care in making appropriations

without any restraint upon expenditure. The Congress has provided that

check by establishing the office of Comptroller General.

The purpose of maintaining the Budget Director and the Comptroller

General is to secure economy and efficiency in Government expenditure.

No better method has been devised for the accomplishment of that end.

These offices can not be administered in all the various details without

making some errors both of fact and of judgment. But the important

consideration remains that these are the instrumentalities of the

Congress and that no other plan has ever been adopted which was so

successful in promoting economy and efficiency. The Congress has

absolute authority over the appropriations and is free to exercise its

judgment, as the evidence may warrant, in increasing or decreasing

budget recommendations. But it ought to resist every effort to weaken or

break down this most beneficial system of supervising appropriations and

expenditures. Without it all the claim of economy would be a mere

pretense.

TAXATION

The purpose of reducing expenditures is to secure a reduction in taxes.

That purpose is about to be realized. With commendable promptness the

Ways and Means Committee of the House has undertaken in advance of the

meeting of the Congress to frame a revenue act. As the bill has

proceeded through the committee it has taken on a nonpartisan character,

and both Republicans and Democrats have joined in a measure which

embodies many sound principles of tax reform. The bill will correct

substantially the economic defects injected into the revenue act of

1924, as well as many which have remained as war-time legacies. In its

present form it should provide sufficient revenue for the Government.

The excessive surtaxes have been reduced, estate tax rates are restored

to more reasonable figures, with every prospect of withdrawing from the

field when the States have had the opportunity to correct the abuses in

their own inheritance tax laws, the gift tax and publicity section are

to be repealed many miscellaneous taxes are lowered or abandoned, and

the Board of Tax Appeals and the administrative features of the law are

improved and strengthened. I approve of the bill in principle. In so far

as income-tax exemptions are concerned, it seems, to me the committee

has gone as far as it is Safe to go and somewhat further than I should

have gone. Any further extension along these lines would, in my opinion,

impair the integrity of our income-tax system.

I am advised that the bill will be through the House by Christmas. For

this prompt action the country call thank the good sense of the Ways and

Means Committee in framing an economic measure upon economic

considerations. If this attitude continues to be reflected through the

Congress, the taxpayer will have his relief by the time his March 15th

installment of income taxes is due. Nonpartisan effort means certain,

quick action. Determination of a revenue law definitely, promptly and

solely as a revenue law, is one of the greatest gifts a legislature can

bestow upon its constituents. I commend the example of file Ways and

Means Committee. If followed, it will place sound legislation upon the

books in time to give the taxpayers the full benefit of tax reduction

next year. This means that the bill should reach me prior to March 15.

All these economic results are being sought not to benefit the rich, but

to benefit the people. They are for the purpose of encouraging industry

in order that employment may be plentiful. They seek to make business

good in order that wages may be good. They encourage prosperity in order

that poverty may be banished from the home. They, seek to lay the

foundation which, through increased production, may, give the people a

more bountiful supply of the necessaries of life, afford more leisure

for the improvement of the mind, the appreciation of the arts of music

and literature, sculpture and painting, and the beneficial enjoyment of

outdoor sports and recreation, enlarge the resources which minister to

charity and by all these means attempting to strengthen the spiritual

life of the Nation.

FOREIGN RELATIONS

The policy of our foreign relations, casting aside any suggestion of

force, rests solely on the foundation of peace, good will, and good

works. We have sought, in our intercourse with other nations, better

understandings through conference and exchange of views its befits

beings endowed with reason. The results have been the gradual

elimination of disputes, the settlement of controversies, and the

establishment of a firmer friendship between America and the rest of the

world that has ever existed tit any previous time.