The example of this attitude has not been without its influence upon

other countries. Acting upon it, an adjustment was made of the difficult

problem of reparations. This was the second step toward peace in Europe.

It paved the way for the agreements which were drawn up at the Locarno

Conference. When ratified, these will represent the third step toward

peace. While they do not of themselves provide an economic

rehabilitation, which is necessary for the progress of Europe, by

strengthening the guarantees of peace they diminish the need for great

armaments. If the energy which now goes into military effort is

transferred to productive endeavor it will greatly assist economic

progress.

The Locarno agreements were made by the, European countries directly

interested without any formal intervention of America, although on July

3 I publicly advocated such agreements in an address made in

Massachusetts. We have consistently refrained from intervening except

when our help has been sought and we have felt it could be effectively

given, as in the settlement of reparations and the London Conference.

These recent Locarno agreements represent the success of this policy

which we have been insisting ought to be adopted, of having European

countries settle their own political problems without involving this

country. This beginning seems to demonstrate that this policy is sound.

It is exceedingly gratifying to observe this progress, both in its

method and in its result promises so much that is beneficial to the

world.

When these agreements are finally adopted, they will provide guarantees

of peace that make the present prime reliance upon force in some parts

of Europe very much less necessary. The natural corollary to these

treaties should be further international contracts for the limitation of

armaments. This work was successfully begun at the Washington

Conference. Nothing was done at that time concerning land forces because

of European objection. Our standing army has been reduced to around

118,000, about the necessary police force for 115,000,000 people. We are

not proposing to increase it, nor is it supposable that any foreign

country looks with the slightest misapprehension upon our land forces.

They do not menace anybody. They are rather a protection to everybody.

The question of disarming upon land is so peculiarly European in its

practical aspects that our country would look with particular gratitude

upon any action which those countries might take to reduce their own

military forces. This is in accordance with our policy of not

intervening unless the European powers are unable to agree and make

request for our assistance. Whenever they are able to agree of their own

accord it is especially gratifying to its, and such agreements may be

sure of our sympathetic support.

It seems clear that it is the reduction of armies rather than of navies

that is of the first importance to the world at the present time. We

shall look with great satisfaction upon that effort and give it our

approbation and encouragement. If that can be settled, we may more

easily consider further reduction and limitation of naval armaments. For

that purpose our country has constantly through its Executive, and

through repeated acts of Congress, indicated its willingness to call

such a conference. Under congressional sanction it would seem to be wise

to participate in any conference of the great powers for naval

limitation of armament proposed upon such conditions that it would hold

a fair promise of being effective. The general policy of our country is

for disarmament, and it ought not to hesitate to adopt any practical

plan that might reasonably be expected to succeed. But it would not care

to attend a conference which from its location or constituency would in

all probability prove futile.

In the further pursuit, of strengthening the bonds of peace and good

will we have joined with other nations in an international conference

held at Geneva and signed an agreement which will be laid before the

Senate for ratification providing suitable measures for control and for

publicity in international trade in arms, ammunition, and implements of

war, and also executed a protocol providing for a prohibition of the use

of poison gas in war, in accordance with the principles of Article 5 of

the treaty relating thereto signed at the Washington Conference. We are

supporting the Pan American efforts that are being made toward the

codification of international law, and looking with sympathy oil the

investigations conducted under philanthropic auspices of the proposal to

agreements outlawing war. In accordance with promises made at the

Washington Conference, we have urged the calling of and are now

represented at the Chinese Customs Conference and on the Commission on

Extraterritoriality, where it will be our policy so far as possible to

meet the, aspirations of China in all ways consistent with the interests

of the countries involved.

COURT OF INTERNATIONAL JUSTICE

Pending before the Senate for nearly three years is the proposal to

adhere to the protocol establishing the Permanent Court of International

Justice. A well-established line of precedents mark America’s effort to

effect the establishment of it court of this nature.. We took a leading

part in laying the foundation on which it rests in the establishment of

The Hague Court of Arbitration. It is that tribunal which nominates the

judges who are elected by the Council and Assembly of the League of

Nations.

The proposal submitted to the Senate was made dependent upon four

conditions, the first of which is that by supporting the court we do not

assume any obligations under the league; second, that we may participate

upon an equality with other States in the election of judges; third,

that the Congress shall determine what part of the expenses we shall

bear; fourth, that the statute creating the court shall not be amended

without out consent; and to these I have proposed an additional

condition to the effect that we are not to be bound by advisory opinions

rendered without our consent.

The court appears to be independent of the league. It is true the judges

are elected by the Assembly and Council, but they are nominated by the

Court of Arbitration, which we assisted to create and of which we are a

part. The court was created by it statute, so-called, which is really a

treaty made among some forty-eight different countries, that might

properly be called a constitution of the court. This statute provides a

method by which the judges are chosen so that when the Court of

Arbitration nominates them and the Assembly and Council of the League

elect them, they are not acting as instruments of the Court of

Arbitration or instruments of the league, but as instruments of the

statute.

This will be even more apparent if our representatives sit with the

members of the council and assembly in electing the judges. It is true

they are paid through the league though not by the league, but by the

countries which are members of the league and by our country if we

accept the protocol. The judges are paid by the league only in the same

sense that it could be said United States judges are paid by the

Congress. The court derives all its authority from the statute and is so

completely independent of the league that it could go on functioning if

the league were disbanded, at least until the terms of the judges

expired.

The most careful provisions are made in the statute as to the

qualifications of judges. Those who make the nominations are recommended

to consult with their highest court of justice, their law schools and

academies. The judges must be persons of high moral character, qualified

to hold the highest judicial offices in that country, or be

jurisconsults of recognized competence in international law. It must be

assumed that these requirements will continue to be carefully met, and

with America joining the countries already concerned it is difficult to

comprehend how human ingenuity could better provide for the

establishment of a court which would maintain its independence. It has

to be recognized that independence is to a considerable extent a matter

of ability, character, and personality. Some effort was made in the

early beginnings to interfere with the independence of our Supreme

Court. It did not succeed because of the quality of the men who made up

that tribunal.

It does not seem that the authority to give advisory opinions interferes

with the independence of the court. Advisory opinions in and of

themselves are not harmful, but may be used in such a way as to be very

beneficial because they undertake to prevent injury rather than merely

afford a remedy after the injury has been done. As a principle that only

implies that the court shall function when proper application is made to

it. Deciding the question involved upon issues submitted for an advisory

opinion does not differ materially from deciding the question involved

upon issues submitted by contending parties. Up to the present time the

court has given an advisory opinion when it judged it had jurisdiction,

and refused to give one when it judged it did not have jurisdiction.

Nothing in the work of the court has yet been an indication that this is

an impairment of its independence or that its practice differs

materially from the giving of like opinions under the authority of the

constitutions of several of our States.

No provision of the statute seems to me to give this court any authority

to be a political rather than a judicial court. We have brought cases in

this country before our courts which, when they have been adjudged to be

political, have been thereby dismissed. It is not improbable that

political questions will be submitted to this court, but again up to the

present time the court has refused to pass on political questions and

our support would undoubtedly have a tendency to strengthen it in that

refusal.

We are not proposing to subject ourselves to any compulsory

jurisdiction. If we support the court, we can never be obliged to submit

any case which involves our interests for its decision. Our appearance

before it would always be voluntary, for the purpose of presenting a

case which we had agreed might be presented. There is no more danger

that others might bring cases before the court involving our interests

which we did not wish to have brought, after we have adhered, and

probably not so much, than there would be of bringing such cases if we

do not adhere. I think that we would have the same legal or moral right

to disregard such a finding in the one case that we would in the other.

If we are going to support any court, it will not be one that we have

set up alone or which reflects only our ideals. Other nations have their

customs and their institutions, their thoughts and their methods of

life. If a court is going to be international, its composition will have

to yield to what is good in all these various elements. Neither will it

be possible to support a court which is exactly perfect, or under which

we assume absolutely no obligations. If we are seeking that opportunity,

we might as well declare that we are opposed to supporting any court. If

any agreement is made, it will be because it undertakes to set up a

tribunal which can do some of the things that other nations wish to have

done. We shall not find ourselves bearing a disproportionate share of

the world’s burdens by our adherence, and we may as well remember that

there is absolutely no escape for our country from bearing its share of

the world’s burdens in any case. We shall do far better service to

ourselves and to others if we admit this and discharge our duties

voluntarily, than if we deny it and are forced to meet the same

obligations unwillingly.

It is difficult to imagine anything that would be more helpful to the

world than stability, tranquility and international justice. We may say

that we are contributing to these factors independently, but others less

fortunately located do not and can not make a like contribution except

through mutual cooperation. The old balance of power, mutual alliances,

and great military forces were not brought bout by any mutual dislike

for independence, but resulted from the domination of circumstances.

Ultimately they were forced on us. Like all others engaged in the war

whatever we said as a matter of fact we joined an alliance, we became a

military power, we impaired our independence. We have more at stake than

any one else in avoiding a repetition of that calamity. Wars do not,

spring into existence. They arise from small incidents and trifling

irritations which can be adjusted by an international court. We can

contribute greatly to the advancement of our ideals by joining with

other nations in maintaining such a tribunal.

FOREIGN DEBTS

Gradually, settlements have been made which provide for the liquidation

of debts due to our Government from foreign governments. Those made with

Great Britain, Finland, Hungary Lithuania, and Poland have already been

approved by the Congress. Since the adjournment, further agreements have

been entered into with Belgium, Czechoslovakia, Latvia, Estonia, Italy,

and Rumania. These 11 nations, which have already made settlements,

represent $6,419,528,641 of the original principal of the loans. The

principal sums without interest, still pending, are the debt of France,

of $3,340,000,000; Greece, $15,000,000; Yugoslavia, $.51,000,000;

Liberia, $26,000; Russia, $192,000,000, which those at present in

control have undertaken, openly to repudiate; Nicaragua, $84,000, which

is being paid currently; and Austria, $24,000,000, on which by act of

Congress a moratorium of 20 years has been granted. The only remaining

sum is $12,000,000, due from Armenia, which has now ceased to exist as

an independent nation.

In accordance with the settlements made, the amount of principal and

interest which is to be paid to the United States under these agreements

aggregate $15,200,688,253.93. It is obvious that the remaining

settlements, which will undoubtedly be made, will bring this sum up to

an amount which will more than equal the principal due on our present

national debt. While these settlements are very large in the aggregate,

it has been felt that the terms granted were in all cases very generous.

They impose no undue burden and are mutually beneficial in the

observance of international faith and the improvement of international

credit.

Every reasonable effort will be made to secure agreements for

liquidation with the remaining countries, whenever they are in such

condition that they can be made. Those which have already been

negotiated under the bipartisan commission established by the Congress

have been made only after the most thoroughgoing and painstaking

investigation, continued for a long time before meeting with the

representatives of the countries concerned. It is believed that they

represent in each instance the best that can be done and the wisest

settlement that can be secured. One very important result is the

stabilization of foreign currency, making exchange assist rather than

embarrass our trade. Wherever sacrifices have been made of money, it

will be more than amply returned in better understanding and friendship,

while in so far as these adjustments will contribute to the financial

stability of the debtor countries, to their good order, prosperity, and

progress, they represent hope of improved trade relations and mutual

contributions to the civilization of the world.

ALIEN PROBLEM

Negotiations are progressing among the interested parties in relation to

the final distribution of the assets in the hands of the Alien Property

Custodian. Our Government and people are interested as creditors; the

German Government and people are interested as debtors and owners of the

seized property. Pending the outcome of these negotiations, I do not

recommend any affirmative legislation. For the present we should

continue in possession of this property which we hold as security for

the settlement of claims due to our people and our Government.

IMMIGRATION

While not enough time has elapsed to afford a conclusive demonstration,

such results as have been secured indicate that our immigration law is

on the whole beneficial. It is undoubtedly a protection to the wage

earners of this country. The situation should however, be carefully

surveyed, in order to ascertain whether it is working a needless

hardship upon our own inhabitants. If it deprives them of the comfort

and society of those bound to them by close family ties, such

modifications should be adopted as will afford relief, always in

accordance with the principle that our Government owes its first duty to

our own people and that no alien, inhabitant of another country, has any

legal rights whatever under our Constitution and laws. It is only

through treaty, or through residence here that such rights accrue. But

we should not, however, be forgetful of the obligations of a common

humanity.

While our country numbers among its best citizens many of those of

foreign birth, yet those who now enter in violation of our laws by that

very act thereby place themselves in a class of undesirables.

Investigation reveals that any considerable number are coming here in

defiance of our immigration restrictions, it will undoubtedly create the

necessity for the registration of all aliens. We ought to have no

prejudice against an alien because he is an alien. The standard which we

apply to our inhabitants is that of manhood, not place of birth.

Restrictive immigration is to a large degree for economic purposes. It

is applied in order that we may not have a larger annual increment of

good people within our borders than we can weave into our economic

fabric in such a way as to supply their needs without undue injury to

ourselves.

NATIONAL DEFENSE

Never before in time of peace has our country maintained so large and

effective a military force as it now has. The Army, Navy, Marine Corps,

National Guard, and Organized Reserves represent a strength of about

558,400 men. These forces are well trained, well equipped, and high in

morale.

A sound selective service act giving broad authority for the

mobilization in time of peril of all the resources of the country, both

persons and materials, is needed to perfect our defense policy in

accordance with our ideals of equality. The provision for more suitable

housing to be paid for out of funds derived from the sale of excess

lands, pending before the last Congress, ought to be brought forward and

passed. Reasonable replacements ought to be made to maintain a

sufficient ammunition reserve.

The Navy has the full treaty tonnage of capital ships. Work is going

forward in modernizing the older ones, building aircraft carriers,

additional fleet submarines, and fast scout cruisers, but we are

carefully avoiding anything that might be construed as a competition in

armaments with other nations. The joint Army and Navy maneuvers at

Hawaii, followed by the cruise of a full Battle Fleet to Australia and

New Zealand, were successfully carried out. These demonstrations

revealed a most satisfactory condition of the ships and the men engaged.

Last year at my suggestion the General Board of the Navy made an

investigation and report on the relation of aircraft to warships. As a

result authorizations and appropriations were made for more scout

cruisers and fleet submarines and for completing aircraft carriers and

equipping them with necessary planes. Additional training in aviation

was begun at the Military and Naval Academies. A method of coordination

and cooperation of the Army and Navy and the principal aircraft builders

is being perfected. At the suggestion of the Secretaries of War and Navy

I appointed a special board to make a further study of the problem of

aircraft.

The report of the Air Board ought to be reassuring to the country,

gratifying to the service and satisfactory to the Congress. It is

thoroughly complete and represents the mature thought of the best talent

in the country. No radical change in organization of the service seems

necessary. The Departments of War, Navy, and Commerce should each be

provided with an additional assistant secretary, not necessarily with

statutory duties but who would be available under the direction of the

Secretary to give especial attention to air navigation. We must have an

air strength worthy of America. Provision should be made for two

additional brigadier generals for the Army Air Service. Temporary rank

corresponding to their duties should be awarded to active flying

officers in both Army and Navy.

Aviation is of great importance both for national defense and commercial

development. We ought to proceed in its improvement by the necessary

experiment and investigation. Our country is not behind in this art. It

has made records for speed and for the excellence of its planes. It

ought to go on maintaining its manufacturing plants capable of rapid

production, giving national assistance to the la in out of airways,

equipping itself with a moderate number of planes and keeping an air

force trained to the highest efficiency.

While I am a thorough believer in national defense and entirely

committed to the policy of adequate preparation, I am just as thoroughly

opposed to instigating or participating in a policy of competitive

armaments. Nor does preparation mean a policy of militarizing. Our

people and industries are solicitous for the cause of 0111, country, and

have great respect for the Army and Navy and foil the uniform worn by

the men who stand ready at all times for our protection to encounter the

dangers and perils necessary to military service, but all of these

activities are to be taken not in behalf of aggression but in behalf of

peace. They are the instruments by which we undertake to do our part to

promote good will and support stability among all peoples.

VETERANS

If any one desires to estimate the esteem in which the veterans of

America are held by their fellow citizens, it is but necessary to

remember that the current budget calls for an expenditure of about

$650,000.000 in their behalf. This is nearly the amount of the total

cost of the National Government, exclusive of the post office, before we

entered the last war.

At the two previous sessions of Congress legislation affecting veterans’

relief was enacted and the law liberalized. This legislation brought

into being a number of new provisions tending more nearly to meet the

needs of our veterans, as well as afford the necessary authority to

perfect the administration of these laws.

Experience with the new legislation so far has clearly demonstrated its

constructive nature. It has increased the benefits received by many and

has made eligible for benefits many others. Direct disbursements to the

veteran or his dependents exceeding $21,000,000 have resulted, which

otherwise would not have been made. The degree of utilization of our

hospitals has increased through making facilities available to the

incapacitated veteran regardless of service origin of the disability.

This new legislation also has brought about a marked improvement of

service to the veteran.

The organizations of ex-service men have proposed additional legislative

changes which you will consider, but until the new law and the

modifications made at the last session of Congress are given a more

thorough test further changes in the basic law should be few and made

only after careful though sympathetic consideration.

The principal work now before the Veterans’ Bureau is the perfection of

its organization and further improvements in service. Some minor

legislative changes are deemed necessary to enable the bureau to retain

that high grade of professional talent essential in handling the

problems of the bureau. Such changes as tend toward the improvement of

service and the carrying forward to completion of the hospital

construction program are recommended for the consideration of the proper

committees of Congress.

With the enormous outlay that is now being made in behalf of the

veterans and their dependents, with a tremendous war debt still

requiring great annual expenditure, with the still high rate of

taxation, while every provision should be made for the relief of the

disabled and the necessary care of dependents, the Congress may well

consider whether the financial condition of the Government is not such

that further bounty through the enlargement of general pensions and

other emoluments ought not to be postponed.

AGRICULTURE

No doubt the position of agriculture as a whole has very much improved

since the depression of three and four years ago. But there are many

localities and many groups of individuals, apparently through no fault

of their own, sometimes due to climatic conditions and sometimes to the

prevailing price of a certain crop, still in a distressing condition.

This is probably temporary, but it is none the less acute. National

Government agencies, the Departments of Agriculture and Commerce, the

Farm Loan Board, the intermediate credit banks, and the Federal Reserve

Board are all cooperating to be of assistance and relief. On the other

hand, there are localities and individuals who have had one of their

most prosperous years. The general price level is fair, but here again

there are exceptions both ways, some items being poor while others are

excellent. In spite of a lessened production the farm income for this

year will be about the same as last year and much above the three

preceding years.

Agriculture is a very complex industry. It does not consist of one

problem, but of several. They can not be solved at one stroke. They have

to be met in different ways, and small gains are not to be despised.

It has appeared from all the investigations that I have been able to

make that the farmers as a whole are determined to maintain the

independence of their business. They do not wish to have meddling on the

part of the Government or to be placed under the inevitable restrictions

involved in any system of direct or indirect price-fixing, which would

result from permitting the Government to operate in the agricultural

markets. They are showing a very commendable skill in organizing

themselves to transact their own business through cooperative marketing,

which will this year turn over about $2,500,000,000, or nearly one-fifth

of the total agricultural business. In this they are receiving help from

the Government. The Department of Agriculture should be strengthened in

this facility, in order to be able to respond when these marketing

associations want help. While it ought not to undertake undue

regulation, it should be equipped to give prompt information on crop

prospects, supply, demand, current receipts, imports, exports, and

prices.

A bill embodying these principles, which has been drafted under the

advice and with the approval of substantially all the leaders and

managers in the cooperative movement, will be presented to the Congress

for its enactment. Legislation should also be considered to provide for

leasing the unappropriated public domain for grazing purposes and

adopting a uniform policy relative to grazing on the public lands and in

the national forests.

A more intimate relation should be established between agriculture and

the other business activities of the Nation. They are mutually dependent

and can each advance their own prosperity most by advancing the

prosperity of the other. Meantime the Government will continue those

activities which have resulted in an unprecedented amount of legislation

and the pouring out of great sums of money during the last five years.

The work for good roads, better land and water transportation, increased

support for agricultural education, extension of credit facilities

through the Farm Loan Boards and the intermediate credit banks, the

encouragement of orderly marketing and a repression of wasteful

speculation, will all be continued.

Following every other depression, after a short period the price of farm

produce has taken and maintained the lead in the advance. This advance

had reached a climax before the war. Everyone will recall the discussion

that went on for four or five years prior to 1914 concerning the high

cost of living. This history is apparently beginning to repeat itself.

While wholesale prices of other commodities have been declining, farm

prices have been increasing. There is every reason to suppose that a new

era in agricultural prosperity lies just before us, which will probably

be unprecedented.

MUSCLE SHOALS

The problem of Muscle Shoals seems to me to have assumed a place all out

of proportion with its real importance. It probably does not represent

in market value much more than a first-class battleship, yet it has been

discussed in the Congress over a period of years and for months at a

time. It ought to be developed for the production of nitrates primarily,

and incidentally for power purposes. This would serve defensive,

agricultural, and industrial purposes. I am in favor of disposing of

this property to meet these purposes. The findings of the special

commission will be transmitted to the Congress for their information. I

am convinced that the best possible disposition can be made by direct

authorization of the Congress. As a means of negotiation I recommend the

immediate appointment of a small joint special committee chosen from the

appropriate general standing committees of the House and Senate to

receive bids, which when made should be reported with recommendations as

to acceptance, upon which a law should be enacted, effecting a sale to

the highest bidder who will agree to carry out these purposes.

If anything were needed to demonstrate the almost utter incapacity of

the National Government to deal directly with an industrial and

commercial problem, it has been provided by our experience with this

property. We have expended vast fortunes, we have taxed everybody, but

we are unable to secure results, which benefit anybody. This property

ought, to be transferred to private management under conditions which

will dedicate it to the public purpose for which it was conceived.

RECLAMATION

The National Government is committed to a policy of reclamation and

irrigation which it desires to establish on a sound basis and continue

in the interest of the localities concerned. Exhaustive studies have

recently been made of Federal reclamation, which have resulted in

improving the projects and adjusting many difficulties. About one third

of the projects is in good financial condition, another third can

probably be made profitable, while the other third is under unfavorable

conditions. The Congress has already provided for a survey which will

soon be embodied in a report. That ought to suggest a method of relief

which will make unnecessary further appeals to the Congress. Unless this

can be done, Federal reclamation will be considerably retarded. With the

greatly increased cost of construction and operation, it has become

necessary to plan in advance, by community organization and selective

agriculture, methods sufficient to repay these increasing outlays.

The human and economic interests of the farmer citizens suggest that the

States should be required to exert some effort and assume some

responsibility, especially in the intimate, detailed, and difficult work

of securing settlers and developing farms which directly profit them,

but only indirectly and remotely can reimburse the Nation. It is

believed that the Federal Government should continue to be the agency

for planning and constructing the great undertakings needed to regulate

and bring into use the rivers the West, many of which are interstate in

character, but the detailed work of creating agricultural communities

and a rural civilization on the land made ready for reclamation ought to

be either transferred to the State in its entirety or made a cooperative

effort of the State and Federal Government.

SHIPPING

The maintenance of a merchant marine is of the utmost importance for

national defense and the service of our commerce. We have a large number

of ships engaged in that service. We also have a surplus supply, costly

to care for, which ought to be sold. All the investigations that have

been made under my direction, and those which have been prosecuted

independently, have reached the conclusion that the fleet should be

under the direct control of a single executive head, while the Shipping

Board should exercise its judicial and regulatory functions in

Accordance with its original conception. The report of Henry G. Dalton,

a business man of broad experience, with a knowledge of shipping, made

to me after careful investigation, will be transmitted for the

information of the Congress, the studies pursued under the direction of

the United States Chamber of Commerce will also be accessible, and added

to these will be the report of the special committee of the House.

I do not advocate the elimination of regional considerations, but it has

become apparent that without centralized executive action the management

of this great business, like the management of any other great business,

will flounder in incapacity and languish under a division of council. A

plain and unmistakable reassertion of this principle of unified control,

which I have always been advised was the intention of the Congress to

apply, is necessary to increase the efficiency of our merchant fleet.

COAL

The perennial conflict in the coal industry is still going on to the

great detriment of the wage earners, the owners, and especially to the

public. With deposits of coal in this country capable of supplying its

needs for hundreds of years, inability to manage and control this great

resource for the benefit of all concerned is very close to a national

economic failure. It has been the subject of repeated investigation and

reiterated recommendation. Yet the industry seems never to have accepted

modern methods of adjusting differences between employers and employees.

The industry could serve the public much better and become subject to a

much more effective method of control if regional consolidations and

more freedom in the formation of marketing associations, under the

supervision of the Department of Commerce, were permitted.

At the present time the National Government has little or no authority

to deal with this vital necessity of the life of the country. It has

permitted itself to remain so powerless that its only attitude must be

humble supplication. Authority should be lodged with the President and

the Departments of Commerce and Labor, giving them power to deal with an

emergency. They should be able to appoint temporary boards with

authority to call for witnesses and documents, conciliate differences,

encourage arbitration, and in case of threatened scarcity exercise

control over distribution. Making the facts public under these

circumstances through a statement from an authoritative source would be

of great public benefit. The report of the last coal commission should

be brought forward, reconsidered, and acted upon.

PROHIBITION

Under the orderly processes of our fundamental institutions the

Constitution was lately amended providing for national prohibition. The

Congress passed an act for its enforcement, and similar acts have been

provided by most of the States. It is the law of the land. It is the

duty of all who come under its, jurisdiction to observe the spirit of

that law, and it is the duty of the Department of Justice and the

Treasury Department to enforce it. Action to prevent smuggling, illegal

transportation in interstate commerce, abuse in the use of permits, and

existence of sources of supply for illegal traffic is almost entirely

imposed upon the Federal Government.

Through treaties with foreign governments and increased activities of

the Coast Guard, revenue agents, district attorneys and enforcement

agents effort is being made to prevent these violations. But the

Constitution also puts a concurrent duty on the States. We need their

active and energetic cooperation, the vigilant action of their police,

and the jurisdiction of their courts to assist in enforcement. I request

of the people observance, of the public officers continuing efforts for

enforcement, and of the Congress favorable action on the budget

recommendation for the prosecution of this work.

WATERWAY DEVELOPMENT

For many years our country has been employed in plans and M for the

development of our intracoastal and inland waterways. This work along

our coast is an important adjunct to our commerce. It will be carried

on, together with the further opening up of our harbors, as our

resources permit. The Government made an agreement during the war to

take over the Cape Cod Canal, under which the owners made valuable

concessions. This pledged faith of the Government ought to be redeemed.

Two other main fields are under consideration. One is the Great Lakes

and St. Lawrence, including the Erie Canal. This includes stabilizing

the lake level, and is both a waterway and power project. A joint

commission of the United States and Canada is working on plans and

surveys which will not be completed until next April. No final

determination can be made, apparently, except under treaty as to the

participation of both countries. The other is the Mississippi River

stem. This is almost entirely devoted to navigation. Work on the Ohio

River will be completed in about three years. A modern channel

connecting Chicago, New Orleans, Kansas City, and Pittsburgh should be

laid out and work on the tributaries prosecuted. Some work is being done

of a preparatory nature along the Missouri, and large expenditures are

being made yearly in the lower reaches of the Mississippi and its

tributaries which contribute both to flood control and navigation.

Preliminary measures are being taken on the Colorado River project,

which is exceedingly important for flood control, irrigation, power

development, and water supply to the area concerned. It would seem to be

very doubtful, however, whether it is practical to secure affirmative

action of the Congress, except under a Joint agreement of the several

States.

The Government has already expended large sums upon scientific research

and engineering investigation in promotion of this Colorado River

project. The actual progress has been retarded for many years by

differences among the seven States in the basin over their relative

water rights and among different groups as to methods. In an attempt to

settle the primary difficulty of the water rights, Congress authorized

the Colorado River Commission which agreed on November 24, 1922, upon an

interstate compact to settle these rights, subject to the ratification

of the State legislatures and Congress. All seven States except Arizona

at one time ratified, the Arizona Legislature making certain

reservations which failed to meet the approval of the governor.

Subsequently an attempt was made to establish the compact upon a

six-State basis, but in this case California imposed reservations. There

appears to be no division of opinion upon the major principles of the

compact, but difficulty in separating contentions to methods of

development from the discussion of it. It is imperative that flood

control be undertaken for California and Arizona. preparation made for

irrigation, for power, and for domestic water.

Some or all of these questions are combined in every proposed

development. The Federal Government is interested in some of these

phases, State governments and municipalities and irrigation districts in

others, and private corporations in still others. Because of all this

difference of view it is most desirable that Congress should consider

the creation of some agency that will be able to determine methods of

improvement solely upon economic and engineering facts, that would be

authorized to negotiate and settle, subject to the approval of Congress,

the participation, rights, and obligations of each group in any

particular works. Only by some such method can early construction be

secured.

WATER POWER

Along with the development of navigation should go every possible

encouragement for the development of our water power. While steam still

plays a dominant part, this is more and more becoming an era of

electricity. Once installed, the cost is moderate, has not tended

greatly to increase, and is entirely free from the unavoidable dirt and

disagreeable features attendant upon the burning of coal. Every facility

should be extended for the connection of the various units into a

superpower plant, capable at all times of a current increasing

uniformity over the entire system.

RAILROADS

The railroads throughout the country are in a fair state of prosperity.

Their service is good and their supply of cars is abundant. Their

condition would be improved and the public better served by a system of

consolidations. I recommend that the Congress authorize such

consolidations tinder the supervision of the Interstate Commerce

Commission, with power to approve or disapprove when proposed parts are

excluded or new parts added. I am informed that the railroad managers

and their employees have reached a substantial agreement as to what

legislation is necessary to regulate and improve their relationship.

Whenever they bring forward such proposals, which seem sufficient also

to protect the interests of the public, they should be enacted into law.

It is gratifying to report that both the railroad managers and railroad

employees are providing boards for the mutual adjustment of differences

in harmony with the principles of conference, conciliation, and

arbitration. The solution of their problems ought to be an example to

all other industries. Those who ask the protections of civilization

should be ready to use the methods of civilization.

A strike in modern industry has many of the aspects of war in the modern

world. It injures labor and it injures capital. If the industry involved

is a basic one, it reduces the necessary economic surplus and,

increasing the cost of living, it injures the economic welfare and

general comfort of the whole people. It also involves a deeper cost. It

tends to embitter and divide the community into warring classes and thus

weakens the unity and power of our national life.

Labor can make no permanent gains at the cost of the general welfare.

All the victories won by organized labor in the past generation have

been won through the support of public opinion. The manifest inclination

of the managers and employees of the railroads to adopt a policy of

action in harmony with these principles marks a new epoch in our

industrial life.

OUTLYING POSSESSIONS

The time has come for careful investigation of the expenditures and

success of the laws by which we have undertaken to administer our

outlying possessions. A very large amount of money is being expended for

administration in Alaska. It appears so far out of proportion to the

number of inhabitants and the amount of production as to indicate cause

for thorough investigation. Likewise consideration should be given to

the experience under the law which governs the Philippines. From such

reports as reach me there are indications that more authority should be

given to the Governor General, so that he will not be so dependent upon

the local legislative body to render effective our efforts to set an

example of the, sound administration and good government, which is so

necessary for the preparation of the Philippine people for

self-government under ultimate independence. If they are to be trained

in these arts, it is our duty to provide for them the best that there

is.

RETIREMENT OF JUDGES

The act of March 3, 1911, ought to be amended so that the term of years

of service of judges of any court of the United States requisite for

retirement with pay shall be computed to include not only continuous but

aggregate service.

MOTHERS’ AID

The Government ought always to be alert on the side of the humanities.

It Ought to encourage provisions for economic justice for the

defenseless. It ought to extend its relief through its national and

local agencies, as may be appropriate in each case, to the suffering and

the needy. It ought to be charitable.

Although more than 40 of our States have enacted measures in aid of

motherhood, the District of Columbia is still without such a law. A

carefully considered bill will be presented, which ought to have most

thoughtful consideration in order that the Congress may adopt a measure

which will be hereafter a model for all parts of the Union.

CIVIL SERVICE

In 1883 the Congress passed the civil service act, which from a modest

beginning of 14,000 employees has grown until there are now 425,000 in

the classified service. This has removed the clerical force of the

Nation from the wasteful effects of the spoils system and made it more

stable and efficient. The time has come to consider classifying all

postmasters, collectors of customs, collectors of internal revenue, and

prohibition agents, by an act covering in those at present in office,

except when otherwise provided by Executive order.

The necessary statistics are now being gathered to form the basis of a

valuation of the civil service retirement fund based on current

conditions of the service. It is confidently expected that this

valuation will be completed in time to be made available to the Congress

during the present session. It will afford definite knowledge of

existing, and future liabilities under the present law and determination

OF liabilities under any proposed change in the present law. We should

have this information before creating further obligations for retirement

annuities which will become liabilities to be met in the future from the

money of the taxpayer.

The classification act of 1923, with the subsequent legislative action

providing for adjustment of the compensation of field service positions,

has operated materially to improve employment conditions in the Federal

service. The administration of the act is in the hands of an impartial

board, functioning without the necessity of a direct appropriation. It

would be inadvisable at this time to place in other hands the

administration of this act.

FEDERAL TRADE COMMISSION

The proper function of the Federal Trade Commission is to supervise and

correct those practices in commerce which are detrimental to fair

competition. In this it performs a useful function and should be

continued and supported. It was designed also to be a help to honest

business. In my message to the Sixty-eighth Congress I recommended that

changes in the procedure then existing be made. Since then the

commission by its own action has reformed its rules, giving greater

speed and economy in the disposal of its cases and full opportunity for

those accused to be heard. These changes are improvements and, if

necessary, provision should be made for their permanency.

REORGANIZATION

No final action has yet been taken on the measure providing for the

reorganization of the various departments. I therefore suggest that this

measure, which will be of great benefit to the efficient and economical

administration of the business of the Government, be brought forward and

passed.

THE NEGRO

Nearly one-tenth of our population consists of the Negro race. The

progress which they have made in all the arts of civilization in the

last 60 years is almost beyond belief. Our country has no more loyal

citizens. But they do still need sympathy, kindness, and helpfulness.

They need reassurance that the requirements of the Government and

society to deal out to them even-handed justice will be met. They should

be protected from all violence and supported in the peaceable enjoyment

of the fruits of their labor. Those who do violence to them should be

punished for their crimes. No other course of action is worthy of the

American people.

Our country has many elements in its population, many different modes of

thinking and living, all of which are striving in their own way to be

loyal to the high ideals worthy of the crown of American citizenship. It

is fundamental of our institutions that they seek to guarantee to all

our inhabitants the right to live their own lives under the protection

of the public law. This does not include any license to injure others

materially, physically, morally, to Incite revolution, or to violate the

established customs which have long had the sanction of enlightened

society.

But it does mean the full right to liberty and equality before the law

without distinction of race or creed. This condition can not be granted

to others, or enjoyed by ourselves, except by the application of the

principle of broadest tolerance. Bigotry is only another name for

slavery. It reduces to serfdom not only those against whom it is

directed, but also those who seek to apply it. An enlarged freedom can

only be secured by the application of the golden rule. No other

utterance ever presented such a practical rule of life.

CONCLUSION

It is apparent that we are reaching into an era of great general

prosperity. It will continue only so long as we shall use it properly.

After all, there is but a fixed quantity of wealth in this country at

any fixed time. The only way that we can all secure more of it is to

create more. The element of time enters into production, If the people

have sufficient moderation and contentment to be willing to improve

their condition by the process of enlarging production, eliminating

waste, and distributing equitably, a prosperity almost without limit

lies before its. If the people are to be dominated by selfishness,

seeking immediate riches by nonproductive speculation and by wasteful

quarreling over the returns from industry, they will be confronted by

the inevitable results of depression and privation. If they will

continue industrious and thrifty, contented with fair wages and moderate

profits, and the returns which accrue from the development of oar

natural resources, our prosperity will extend itself indefinitely.

In all your deliberations you should remember that the purpose of

legislation is to translate principles into action. It is an effort to

have our country be better by doing better. Because the thoughts and

ways of people are firmly fixed and not easily changed, the field within

which immediate improvement can be secured is very narrow. Legislation

can provide opportunity. Whether it is taken advantage of or not depends

upon the people themselves. The Government of the United States has been

created by the people. It is solely responsible to them. It will be most

successful if it is conducted solely for their benefit. All its efforts

would be of little avail unless they brought more justice, more

enlightenment, more happiness and prosperity into the home. This means

an opportunity to observe religion, secure education, and earn a living

under a reign of law and order. It is the growth and improvement of the

material and spiritual life of the Nation. We shall not be able to gain

these ends merely by our own action. If they come at all, it will be

because we have been willing to work in harmony with the abiding purpose

of a Divine Providence.

***

State of the Union Address

Calvin Coolidge

December 7, 1926

Members of the Congress:

In reporting to the Congress the state of the Union, I find it

impossible to characterize it other than one of general peace and

prosperity. In some quarters our diplomacy is vexed with difficult and

as yet unsolved problems, but nowhere are we met with armed conflict. If

some occupations and areas are not flourishing, in none does there

remain any acute chronic depression. What the country requires is not so

much new policies as a steady continuation of those which are already

being crowned with such abundant success. It can not be too often

repeated that in common with all the world we are engaged in liquidating

the war.

In the present short session no great amount of new legislation is

possible, but in order to comprehend what is most desirable some survey

of our general situation is necessary. A large amount of time is

consumed in the passage of appropriation bills. If each Congress in its

opening session would make appropriations to continue for two years,

very much time would be saved which could either be devoted to a

consideration of the general needs of the country or would result in

decreasing the work of legislation. ECONOMY

Our present state of prosperity has been greatly promoted by three

important causes, one of which is economy, resulting in reduction and

reform in national taxation. Another is the elimination of many kinds of

waste. The third is a general raising of the standards of efficiency.

This combination has brought the perfectly astonishing result of a

reduction in the index price of commodities and an increase in the index

rate of wages. We have secured a lowering of the cost to produce and a

raising of the ability to consume. Prosperity resulting from these

causes rests on the securest of all foundations. It gathers strength

from its own progress.

In promoting this progress the chief part which the National Government

plays lies in the field of economy. Whatever doubts may have been

entertained as to the necessity of this policy and the beneficial

results which would accrue from it to all the people of the Nation, its

wisdom must now be considered thoroughly demonstrated. It may not have

appeared to be a novel or perhaps brilliant conception, but it has

turned out to be preeminently sound. It has not failed to work. It has

surely brought results. It does not have to be excused as a temporary

expedient adopted as the lesser evil to remedy some abuse, it is not a

palliative seeking to treat symptoms, but a major operation for the,

eradication at the source of a large number of social diseases.

Nothing is easier than the expenditure of public money. It does not

appear to belong to anybody. The temptation is overwhelming to bestow it

on somebody. But the results of extravagance are ruinous. The property

of the country, like the freedom of the country, belongs to the people

of the country. They have not empowered their Government to take a

dollar of it except for a necessary public purpose. But if the

Constitution conferred such right, sound economics would forbid it.

Nothing is more, destructive of the progress of the Nation than

government extravagance. It means an increase in the burden of taxation,

dissipation of the returns from enterprise, a decrease in the real value

of wages, with ultimate stagnation and decay. The whole theory of our

institutions is based on the liberty and independence of the individual.

He is dependent on himself for support and therefore entitled to the

rewards of his own industry. He is not to be deprived of what he earns

that others may be benefited by what they do not earn. What he saves

through his private effort is not to be wasted by Government

extravagance.

Our national activities have become so vast that it is necessary to

scrutinize each item of public expenditure if we are to apply the

principle of economy. At the last session we made an immediate increase

in the annual budget of more than $100,000,000 in benefits conferred on

the veterans of three wars, public buildings, and river and harbor

improvement. Many projects are being broached requiring further large

outlays. I am convinced that it would be greatly for the welfare of the

country if we avoid at the present session all commitments except those

of the most pressing nature. From a reduction of the debt and taxes will

accrue a wider benefit to all the people of this country than from

embarking on any new enterprise. When our war debt is decreased we shall

have resources for expansion. Until that is accomplished we should

confine ourselves to expenditures of the most urgent necessity.

The Department of Commerce has performed a most important function in

making plans and securing support of all kinds of national enterprise

for the elimination of waste. Efficiency has been greatly promoted

through good management and the constantly increasing cooperation of the

wage earners throughout the whole realm of private business. It is my

opinion that this whole development has been predicated on the

foundation of a protective tariff.

TAX REDUCTION

As a result of economy of administration by the Executive and of

appropriation by the Congress, the end of this fiscal year will leave a

surplus in the Treasury estimated at $383,000,000. Unless otherwise

ordered, such surplus is used for the retirement of the war debt. A bond

which can be retired today for 100 cents will cost the people 104 1/4

cents to retire a year from now. While I favor a speedy reduction of the

debt as already required by law and in accordance with the promises made

to the holders of our Liberty bonds when they were issued, there is no

reason why a balanced portion of surplus revenue should not be applied

to a reduction of taxation. It can not be repeated too often that the

enormous revenues of this Nation could not be collected without becoming

a charge on all the people whether or not they directly pay taxes.

Everyone who is paying or the bare necessities of fool and shelter and

clothing, without considering the better things of life, is indirectly

paying a national tax. The nearly 20,000,000 owners of securities, the

additional scores of millions of holders of insurance policies and

depositors in savings banks, are all paying a national tax. Millions of

individuals and corporations are making a direct contribution to the

National Treasury which runs from 11/2 to 25 per cent of their income,

besides a number of special requirements, like automobile and admission

taxes. Whenever the state of the Treasury will permit, I believe in a

reduction of taxation. I think the taxpayers are entitled to it. But I

am not advocating tax reduction merely for the benefit of the taxpayer;

I am advocating it for the benefit of the country.

If it appeared feasible, I should welcome permanent tax reduction at

this time. The estimated surplus, however, for June 30, 1928, is not

much larger than is required in a going business of nearly

$4,000,000,000. We have had but a few months’ experience under the

present revenue act and shall need to know what is developed by the

returns of income produced under it, which are not required t o be made

until about the time this session terminates, and what the economic

probabilities of the country are in the latter part of 1927, before we

can reach any justifiable conclusion as to permanent tax reduction.

Moreover the present surplus results from many nonrecurrent items.

Meantime, it is possible to grant some real relief by a simple measure

making reductions in the payments which accrue on the 15th of March and

June, 1927. I am very strongly of the conviction that this is so much a

purely business matter that it ought not to be dealt with in a partisan

spirit. The Congress has already set the notable example of treating tax

problems without much reference to party, which might well be continued.

What I desire to advocate most earnestly is relief for the country from

unnecessary tax burdens. We can not secure that if we stop to engage in

a partisan controversy. As I do not think any change in the special

taxes, or tiny permanent reduction is practical, I therefore urge both

parties of the House Ways and Means Committee to agree on a bill

granting the temporary relief which I have indicated. Such a reduction

would directly affect millions of taxpayers, release large sums for

investment in new enterprise, stimulating industrial production and

agricultural consumption, and indirectly benefiting every family in the

whole country. These are my convictions stated with full knowledge that

it is for the Congress to decide whether they judge it best to make such

a reduction or leave the surplus for the present year to be applied to

retirement of the war debt. That also is eventually tax reduction.

PROTECTIVE TARIFF

It is estimated that customs receipts for the present fiscal year will

exceed $615,000,000, the largest which were ever secured from that

source. The value of our imports for the last fiscal year was

$4,466,000,000, an increase of more than 71 per cent since the present

tariff law went into effect. Of these imports about 65 per cent, or,

roughly, $2,900,000,000, came in free of duty, which means that the

United States affords a duty-free market to other countries almost equal

in value to the total imports of Germany and greatly exceeding the total

imports of France. We have admitted a greater volume of free imports

than any other country except England.

We are, therefore, levying duties on about $1,550,000,000 of imports.

Nearly half of this, or $700,000,000, is subject to duties for the

protection of agriculture and have their origin in countries other than

Europe. They substantially increased the prices received by our farmers

for their produce. About $300,000.000 more is represented by luxuries

such as costly rugs, furs, precious stones, etc. This leaves only about

$550,000,000 of our imports under a schedule of duties which is in

general under consideration when there is discussion of lowering the

tariff. While the duties on this small portion, representing only about

12 per cent of our imports, undoubtedly represent the difference between

a fair degree of prosperity or marked depression to many of our

industries and the difference between good pay and steady work or wide

unemployment to many of our wage earners, it is impossible to conceive

how other countries or our own importers could be greatly benefited if

these duties are reduced. Those who are starting an agitation for a

reduction of tariff duties, partly at least for the benefit of those to

whom money has been lent abroad, ought to know that there does not seem

to be a very large field within the area of our imports in which

probable reductions would be advantageous to foreign goods. Those who

wish to benefit foreign producers are much more likely to secure that

result by continuing the present enormous purchasing power which comes

from our prosperity that increased our imports over 71 per cent in four

years than from any advantages that are likely to accrue from a general

tariff reduction.

AGRICULTURE

The important place which agriculture holds in the economic and social

life of the Nation can not be overestimated. The National Government is

justified in putting forth every effort to make the open country a

desirable place to live. No condition meets this requirement which fails

to supply a fair return on labor expended and capital invested. While

some localities and some particular crops furnish exceptions, in general

agriculture is continuing to make progress in recovering from the

depression of 1921 and 1922. Animal products and food products are in a

more encouraging position, while cotton, due to the high prices of past

years supplemented by ideal weather conditions, has been stimulated to a

point of temporary over production. Acting on the request of the cotton

growing interests, appointed a committee to assist in carrying out their

plans. As it result of this cooperation sufficient funds have been

pledged to finance the storage and carrying of 4,000,000 bales of

cotton. Whether those who own the cotton are willing to put a part of

their stock into this plan depends on themselves. The Federal Government

has cooperated in providing ample facilities. No method of meeting the

situation would be adequate which does not contemplate a reduction of

about one-third in the acreage for the coming year. The responsibility

for making the plan effective lies with those who own and finance cotton

and cotton lands.

The Department of Agriculture estimates the net income of agriculture

for the year 1920-21 at only $375,000,000; for 1924-25, $2,656,000,000;

for 1925-26, $2,757,000,000. This increase has been brought about in

part by the method already referred to, of Federal tax reduction, the

elimination of waste, and increased efficiency in industry. The wide gap

that existed a few years ago between the index price of agricultural

products and the index price of other products has been gradually

closing up, though the recent depression in cotton has somewhat enlarged

it. Agriculture had on the whole been going higher while industry had

been growing lower. Industrial and commercial activities, being carried

on for the most part by corporations, are taxed at a much higher rate

than farming, which is carried on by individuals. This will inevitably

make industrial commodity costs high while war taxation lasts. It is

because of this circumstance that national tax reduction has a very

large indirect benefit upon the farmer, though it can not relieve him

from the very great burden of the local taxes which he pays directly. We

have practically relieved the farmer of any Federal income tax.

There is agreement on all sides that some portions of our agricultural

industry have lagged behind other industries in recovery from the war

and that further improvement in methods of marketing of agricultural

products is most desirable. There is belief also that the Federal

Government can further contribute to these ends beyond the many helpful

measures taken during the last five years through the different acts of

Congress for advancing the interests of the farmers.

The packers and stockyards act,

Establishing of the intermediate credit banks for agricultural purposes,

The Purnell Act for agricultural research,

The Capper-Volstead Cooperative Marketing Act,

The cooperative marketing act of 1926,

Amendments to the warehousing act,

The enlargement of the activities of the Department of Agriculture,

Enlargement of the scope of loans by the Farm Loan Board,

The tariff on agricultural products,

The large Federal expenditure in improvement of waterways and highways,

The reduction of Federal taxes, in all comprise a great series of

governmental actions in the advancement of the special interest of

agriculture.

In determination of what further measures may be undertaken it seems to

me there are certain pitfalls which must be avoided and our test in

avoiding them should be to avoid disaster to the farmer himself.

Acting upon my recommendation, the Congress has ordered the interstate

Commerce Commission to investigate the freight-rate structure, directing

that such changes shall be made in freight rates as will promote freedom

of movement of agricultural products. Railroad consolidation which I am

advocating would also result in a situation where rates could be made

more advantageous for farm produce, as has recently been done in the

revision of rates on fertilizers in the South. Additional benefit will

accrue from the development of our inland waterways. The Mississippi

River system carries a commerce of over 50,000,000 tons at a saving of

nearly $18,000,000 annually. The Inland Waterways Corporation operates

boats on 2,500 miles of navigable streams and through its relation with

165 railroads carries freight into and out of 45 States of the Union.

During the past six months it has handled over 1,000,000 bushels of

grain monthly and by its lower freight rates has raised the price of

such grain to the farmer probably 21/2 cents to 3 cents a bushel. The

highway system on which the Federal Government expends about $85,000,000

a year is of vital importance to the rural regions.

The advantages to be derived from a more comprehensive and less

expensive system of transportation for agriculture ought to be

supplemented by provision for an adequate supply of fertilizer at a

lower cost than it is at present obtainable. This advantage we are

attempting to secure by the proposed development at Muscle Shoals, and

there are promising experiments being made in synthetic chemistry for

the production of nitrates.

A survey should be made of the relation of Government grazing lands to

the livestock industry. Additional legislation is desirable more

definitely to establish the place of grazing in the administration of

the national forests, properly subordinated to their functions of

producing timber and conserving the water supply. Over 180,000,000 acres

of grazing lands are still pastured as commons in the public domain with

little or no regulation. This has made their use so uncertain that it

has contributed greatly to the instability of the livestock industry.

Very little of this land is suited to settlement or private ownership.

Some plan ought to be adopted for its use in grazing, corresponding

broadly to that already successfully applied to the national forests.

The development of sound and strong cooperative associations is of

fundamental importance to our agriculture. It is encouraging to note,

therefore, that a vigorous and healthy growth in the cooperative

movement is continuing. Cooperative associations reporting to the

Department of Agriculture at the end of 1925 had on their membership

rolls a total of 2,700,000 producers. Their total business in 1925

amounted to approximately $2,400,000,000, compared with $635,800,000 in

1915. Legislative action to assist cooperative associations and

supplement their efforts was passed at the last session of Congress.

Important credit measures were also provided by Congress in 1923 which

have been of inestimable value to the cooperative associations. Although

the Federal credit agencies have served agriculture well, I think it may

be possible to broaden and strengthen the service of these institutions.

Attention is again directed to the surplus problem of agriculture by the

present cotton situation. Surpluses often affect prices of various farm

commodities in a disastrous manner, and the problem urgently demands a

solution. Discussions both in and out of Congress during the past few

years have given us a better understanding of the subject, and it is my

hope that out of the various proposals made the basis will be found for

a sound and effective solution upon which agreement can be reached. In

my opinion cooperative marketing associations will be important aids to

the ultimate solution of the problem. It may well be, however, that

additional measures will be needed to supplement their efforts. I

believe all will agree that such measures should not conflict with the

best interests of the cooperatives, but rather assist and strengthen

them. In working out this problem to any sound conclusion it is

necessary to avoid putting the Government into the business of

production or marketing or attempting to enact legislation for the

purpose of price fixing. The farmer does not favor any attempted

remedies that partake of these elements. He has a sincere and candid

desire for assistance. If matched by an equally sincere and candid

consideration of the different remedies proposed a sound measure of

relief ought to result. It is unfortunate that no general agreement has

been reached by the various agricultural interests upon any of the

proposed remedies. Out of the discussion of various proposals which can

be had before the Committees of Agriculture some measure ought to be

perfected which would be generally satisfactory.

Due to the emergency arising from a heavy tropical storm in southern

Florida, I authorized the Secretary of Agriculture to use certain funds

in anticipation of legislation to enable the farmers in that region to

plant their crops. The department will present a bill ratifying the

loans which were made for this purpose.

Federal legislation has been adopted authorizing the cooperation of the

Government with States and private owners in the protection of forest

lands from fire. This preventive measure is of such great importance

that I have recommended for it an increased appropriation.

Another preventive measure of great economic and sanitary importance is

the eradication of tuberculosis in cattle. Active work is now in

progress in one-fourth of the counties of the United States to secure

this result. Over 12,000,000 cattle have been under treatment, and the

average degree of infection has fallen from 4.9 per cent to 2.8 per

cent. he Federal Government is making substantial expenditures for this

purpose.

Serious damage is threatened to the corn crop by the European corn

borer. Since 1917 it has spread from eastern New England westward into

Indiana and now covers about 100,000 square miles. It is one of the most

formidable pests because it spreads rapidly and is exceedingly difficult

of control. It has assumed a menace that is of national magnitude and

warrants the Federal Government in extending its cooperation to the

State and local agencies which are attempting to prevent its further

spread and secure its eradication.

The whole question of agriculture needs most careful consideration. In

the past few years the Government has given this subject more attention

than any other and has held more consultations in relation to it than on

any other subject. While the Government is not to be blamed for failure

to perform the impossible, the agricultural regions are entitled to know

that they have its constant solicitude and sympathy. Many of the farmers

are burdened with debts and taxes which they are unable to carry. We are

expending in this country many millions of dollars each year to increase

farm production. We ought now to put more emphasis on the question of

farm marketing. If a sound solution of a permanent nature can be found

for this problem, the Congress ought not to hesitate to adopt it.

DEVELOPMENT OF WATER RESOURCES

In previous messages I have referred to the national importance of the

proper development of our water resources. The great projects of

extension of the Mississippi system, the protection an development of

the lower Colorado River, are before Congress, and I have previously

commented upon them. I favor the necessary legislation to expedite these

projects. Engineering studies are being made for connecting the Great

Lakes with the North Atlantic either through an all-American canal or by

way of the St. Lawrence River. These reports will undoubtedly be before

the Congress during its present session. It is unnecessary to dwell upon

the great importance of such a waterway not only to our mid-continental

basin but to the commerce and development of practically the whole

Nation. Our river and harbor improvement should be continued in

accordance with the present policy. Expenditure of this character is

compatible with economy; it is in the nature of capital investment. Work

should proceed on the basic trunk lines if this work is to be a success.

If the country will be content to be moderate and patient and permit

improvements to be made where they will do the greatest general good,

rather than insisting on expenditures at this time on secondary

projects, our internal Waterways can be made a success. If proposes

legislation results in a gross manifestation of local jealousies and

selfishness, this program can not be carried out. Ultimately we can take

care of extensions, but our first effort should be confined to the main

arteries.

Our inland commerce has been put to great inconvenience and expense by

reason of the lowering of the water level of the Great Lakes. This is an

international problem on which competent engineers are making reports.

Out of their study it is expected that a feasible method will be

developed for raising the level to provide relief for our commerce and

supply water for drainage. Whenever a practical plan is presented it

ought to be speedily adopted.

RECLAMATION

It is increasingly evident that the Federal Government must in the

future take a leading part in the impounding of water for conservation

with incidental power for the development of the irrigable lands of the

and region. The unused waters of the West are found mainly in large

rivers. Works to store and distribute these have such magnitude and cost

that they are not attractive to private enterprise. Water is the

irreplaceable natural resource. Its precipitation can not be increased.

Its storage on the higher reaches of streams, to meet growing needs, to

be used repeatedly as it flows toward the seas, is a practical and

prudent business policy.

The United States promises to follow the course of older irrigation

countries, where recent important irrigation developments have been

carried out as national undertakings. It is gratifying, therefore, that

conditions on Federal reclamation projects have become satisfactory. The

gross value of crop, grown with water from project works increased from

$110,000,000 in 1924 to $131,000,000 in 1925. The adjustments made last

year by Congress relieved irrigators from paying construction costs on

unprofitable land, and by so doing inspired new hope and confidence in

ability to meet the payments required. Construction payments by water

users last year were the largest in the history of the bureau.

The anticipated reclamation fund will be fully absorbed for a number of

years in the completion of old projects and the construction of projects

inaugurated in the past three years. We should, however, continue to

investigate and study the possibilities of a carefully planned

development of promising projects, logically of governmental concern

because of their physical magnitude, immense cost, and the interstate

and international problems involved. Only in this way may we be fully

prepared to meet intelligently the needs of our fast-growing population

in the years to come.

TRANSPORTATION

It would be difficult to conceive of any modern activity which

contributes more to the necessities and conveniences of life than

transportation. Without it our present agricultural production and

practically all of our commerce would be completely prostrated. One of

the large contributing causes to the present highly satisfactory state

of our economic condition is the prompt and dependable service,

surpassing all our previous records, rendered by the railroads. This

power has been fostered by the spirit of cooperation between Federal and

State regulatory commissions. To render this service more efficient and

effective and to promote a more scientific regulation, the process of

valuing railroad properties should be simplified and the primary

valuations should be completed as rapidly as possible. The problem of

rate reduction would be much simplified by a process of railroad

consolidations. This principle has already been adopted as Federal law.

Experience has shown that a more effective method must be provided.

Studies have already been made and legislation introduced seeking to

promote this end. It would be of great advantage if it could be taken up

at once and speedily enacted. The railroad systems of the country and

the convenience of all the people are waiting on this important

decision.

MERCHANT MARINE

It is axiomatic that no agricultural and industrial country can get the

full benefit of its own advantages without a merchant marine. We have

been proceeding under the act of Congress that contemplates the

establishment of trade routes to be ultimately transferred to private

ownership and operation. Due to temporary conditions abroad and at home

we have a large demand just now for certain types of freight vessels.

Some suggestion has been made for new construction. I do not feel that

we are yet warranted in entering, that field. Such ships as we might

build could not be sold after they are launched for anywhere near what

they would cost. We have expended over $250,000,000 out of the public

Treasury in recent years to make up the losses of operation, not

counting the depreciation or any cost whatever of our capital

investment. The great need of our merchant marine is not for more ships

but for more freight.

Our merchants are altogether too indifferent about using American ships

for the transportation of goods which they send abroad or bring home.

Some of our vessels necessarily need repairs, which should be made. I do

not believe that the operation of our fleet is as economical and

efficient as it could be made if placed under a single responsible head,

leaving the Shipping Board free to deal with general matters of policy

and regulation.

RADIO LEGISLATION

The Department of Commerce has for some years urgently presented the

necessity for further legislation in order to protect radio listeners

from interference between broadcasting stations and to carry out other

regulatory functions. Both branches of Congress at the last session

passed enactments intended to effect such regulation, but the two bills

yet remain to be brought into agreement and final passage.

Due to decisions of the courts, the authority of the department under

the law of 1912 has broken down; many more stations have been operating

than can be accommodated within the limited number of wave lengths

available; further stations are in course of construction; many stations

have departed from the scheme of allocation set down by the department,

and the whole service of this most important public function has drifted

into such chaos as seems likely, if not remedied, to destroy its great

value. I most urgently recommend that this legislation should be

speedily enacted.

I do not believe it is desirable to set up further independent agencies

in the Government. Rather I believe it advisable to entrust the

important functions of deciding who shall exercise the privilege of

radio transmission and under what conditions, the assigning of wave

lengths and determination of power, to a board to be assembled whenever

action on such questions becomes necessary. There should be right of

appeal to the courts from the decisions of such board. The

administration of the decisions of the board and the other features of

regulation and promotion of radio in the public interest, together with

scientific research, should remain in the Department of Commerce. Such

an arrangement makes for more expert, more efficient, and more

economical administration that an independent agency or board, whose

duties, after initial stages, require but little attention, in which

administrative functions are confused with semijudicial functions and

from which of necessity there must be greatly increased personnel and

expenditure.

THE WAGE EARNER

The great body of our people are made up of wage earners. Several

hundred thousands of them are on the pay rolls of the United States

Government. Their condition very largely is fixed by legislation. We

have recently provided increases in compensation under a method of

reclassification and given them the advantage of a liberal retirement

system as a support for their declining years. Most of them are under

the merit system, which is a guaranty of their intelligence, and the

efficiency of their service is a demonstration of their loyalty. The

Federal Government should continue to set a good example for all other

employers.

In the industries the condition of the wage earner has steadily

improved. The 12-hour day is almost entirely unknown. Skilled labor is

well compensated. But there are unfortunately a multitude of workers who

have not yet come to share in the general prosperity of the Nation. Both

the public authorities and private enterprise should be solicitous to

advance the welfare of this class. The Federal Government has been

seeking to secure this end through a protective tariff, through

restrictive immigration, through requiring safety devices for the

prevention of accidents, through the granting of workman’s compensation,

through civilian vocational rehabilitation and education, through

employment information bureaus, and through such humanitarian relief as

was provided in the maternity and infancy legislation. It is a

satisfaction to report that a more general condition of contentment

exists among wage earners and the country is more free from labor

disputes than it has been for years. While restrictive immigration has

been adopted in part for the benefit of the wage earner, and in its

entirety for the benefit of the country, it ought not to cause a

needless separation of families and dependents from their natural source

of support contrary to the dictates of humanity.

BITUMINOUS COAL

No progress appears to have been made within large areas of the

bituminous coal industry toward creation of voluntary machinery by which

greater assurance can be given to the public of peaceful adjustment of

wage difficulties such as has been accomplished in the anthracite

industry. This bituminous industry is one of primary necessity and bears

a great responsibility to the Nation for continuity of supplies. As the

wage agreements in the unionized section of the industry expire on April

1 next, and as conflicts may result which may imperil public interest,

and have for many years often called for action of the Executive in

protection of the public, I again recommend the passage of such

legislation as will assist the Executive in dealing with such

emergencies through a special temporary board of conciliation and

mediation and through administrative agencies for the purpose of

distribution of coal and protection of the consumers of coal from

profiteering. At present the Executive is not only without authority to

act but is actually prohibited by law from making any expenditure to

meet the emergency of a coal famine.

JUDICIARY

The Federal courts hold a high position in the administration of justice

in the world. While individual judicial officers have sometimes been

subjected to just criticism, the courts as a whole have maintained an

exceedingly high standard. The Congress may well consider the question

of supplying fair salaries and conferring upon the Supreme Court the

same rule-making power on the law side of the district courts that they

have always possessed on the equity side. A bill is also pending

providing for retirement after a certain number of years of service,

although they have not been consecutive, which should have your

favorable consideration. These faithful servants of the Government are

about the last that remain to be provided for in the postwar

readjustments.

BANKING

There has been pending in Congress for nearly three years banking

legislation to clarify the national bank act and reasonably to increase

the powers of the national banks. I believe that within the limitation

of sound banking principles Congress should now and for the future place

the national banks upon a fair equality with their competitors, the

State banks, and I trust that means may be found so that the differences

on branch-banking legislation between the Senate and the House of

Representatives may be settled along sound lines and the legislation

promptly enacted.

It would be difficult to overestimate the service which the Federal

reserve system has already rendered to the country. It is necessary only

to recall the chaotic condition of our banking organization at the time

the Federal reserve system was put into operation. The old system

consisted of a vast number of independent banking units, with scattered

bank reserves which never could be mobilized in times of greatest need.

In spite of vast banking resources, there was no coordination of

reserves or any credit elasticity. As a consequence, a strain was felt

even during crop-moving periods and when it was necessary to meet other

seasonal and regularly recurring needs.

The Federal reserve system is not a panacea for all economic or

financial ills. It can not prevent depression in certain industries

which are experiencing overexpansion of production or contraction of

their markets. Its business is to furnish adequate credit and currency

facilities. This it has succeeded in doing, both during the war and in

the more difficult period of deflation and readjustment which followed.

It enables us to look to the future with confidence and to make plans

far ahead, based on the belief that the Federal reserve system will

exercise a steadying influence on credit conditions and thereby prevent

tiny sudden or severe reactions from the period of prosperity which we

are now enjoying. In order that these plans may go forward, action

should be taken at the present session on the question of renewing the

banks’ charters and thereby insuring a continuation of the policies and

present usefulness of the Federal reserve system.

FEDERAL REGULATION

I am in favor of reducing, rather than expanding, Government bureaus

which seek to regulate and control the business activities of the

people. Everyone is aware that abuses exist and will exist so long as we

are limited by human imperfections. Unfortunately, human nature can not

be changed by an act of the legislature. When practically the sole

remedy for many evils lies in the necessity of the people looking out

for themselves and reforming their own abuses, they will find that they

are relying on a false security if the Government assumes to hold out

the promise that it is looking out for them and providing reforms for

them. This principle is preeminently applicable to the National

Government. It is too much assumed that because an abuse exists it is

the business of the National Government to provide a remedy. The

presumption should be that it is the business of local and State

governments. Such national action results in encroaching upon the

salutary independence of the States and by undertaking to supersede

their natural authority fills the land with bureaus and departments

which are undertaking to do what it is impossible for them to accomplish

and brings our whole system of government into disrespect and disfavor.

We ought to maintain high standards. We ought to punish wrongdoing.

Society has not only the privilege but the absolute duty of protecting

itself and its individuals. But we can not accomplish this end by

adopting a wrong method. Permanent success lies in local, rather than

national action. Unless the locality rises to its own requirements,

there is an almost irresistible impulse for the National Government to

intervene. The States and the Nation should both realize that such

action is to be adopted only as a last resort.

THE NEGRO

The social well-being of our country requires our constant effort for

the amelioration of race prejudice and the extension to all elements of

equal opportunity and equal protection under the laws which are

guaranteed by the. Constitution. The Federal Government especially is

charged with this obligation in behalf of the colored people of the

Nation. Not only their remarkable progress, their devotion and their

loyalty, but, our duty to ourselves under our claim that we are an

enlightened people requires us to use all our power to protect them from

the crime of lynching. Although violence of this kind has very much

decreased, while any of it remains we can not justify neglecting to make

every effort to eradicate it by law.

The education of the colored race under Government encouragement is

proceeding successfully and ought to have continuing support. An

increasing need exists for properly educated and trained medical skill

to be devoted to the service of this race.

INSULAR POSSESSIONS

This Government holds in sacred trusteeship islands which it has

acquired in the East and West Indies. In all of them the people are more

prosperous than at any previous time. A system of good roads, education,

and general development is in progress. The people are better governed

than ever before and generally content.

In the Philippine Islands Maj. Gen. Leonard Wood has been Governor

General for five years and has administered his office with tact and

ability greatly to the success of the Filipino people. These are a proud

and sensitive race, who are making such progress with our cooperation

that we can view the results of this experiment with great satisfaction.

As we are attempting to assist this race toward self-government, we

should look upon their wishes with great respect, granting their

requests immediately when they are right, yet maintaining a frank

firmness in refusing when they are wrong. We shall measure their

progress in no small part by their acceptance of the terms of the

organic law under which the islands are governed and their faithful

observance of its provisions. Need exists for clarifying the duties of

the auditor and declaring them to be what everyone had supposed they

were. We have placed our own expenditures under the supervision of the

Comptroller General. It is not likely that the expenditures in the

Philippine Islands need less supervision than our own. The Governor

General is hampered in his selection of subordinates by the necessity of

securing a confirmation, which has oftentimes driven him to the

expediency of using Army officers in work for which civilian experts

would be much better fitted. Means should be provided for this and such

other purposes as he may require out of the revenue which this

Government now turns back to the Philippine treasury.

In order that these possessions might stiffer no seeming neglect, I have

recently sent Col. Carmi A. Thompson to the islands to make a survey in

cooperation with the Governor General to suggest what might be done to

improve conditions. Later, I may make a more extended report including

recommendations. The economic development of the islands is very

important. They ought not to be turned back to the people until they are

both politically fitted for self-government and economically

independent. Large areas are adaptable to the production of rubber. No

one contemplates any time in the future either under the present or a

more independent form of government when we should not assume some

responsibility for their defense. For their economic advantage, for the

employment of their people, and as a contribution to our power of

defense which could not be carried on without rubber, I believe this

industry should be encouraged. It is especially adapted to the Filipino

people themselves, who might cultivate it individually on a small

acreage. It could be carried on extensively by American capital in a way

to furnish employment at good wages. I am opposed to the promotion of

any policy that does not provide for absolute freedom on the part of the

wage earners and do not think we should undertake to give power for

large holdings of land in the islands against the opposition of the

people of the locality. Any development of the islands must be solely

with the first object of benefiting the people of the islands. At an

early day, these possessions should be taken out from under all military

control and administered entirely on the civil side of government.

NATIONAL DEFENSE

Our policy of national defense is not one of making war, but of insuring

peace. The land and sea force of America, both in its domestic and

foreign implications, is distinctly a peace force. It is an arm of the

police power to guarantee order and the execution of the law at home and

security to our citizens abroad. No self-respecting nation would neglect

to provide an army and navy proportionate to its population, the extent

of its territory, and the dignity of the place which it occupies in the

world. When it is considered that no navy in the world, with one

exception, approaches ours and none surpasses it, that our Regular Army

of about 115,000 men is the equal of any other like number of troops,

that our entire permanent and reserve land and sea force trained and

training consists of a personnel of about 610,000, and that our annual

appropriations are about $680,000,000 a year, expended under the

direction of an exceedingly competent staff, it can not be said that our

country is neglecting its national defense. It is true that a cult of

disparagement exists, but that candid examination made by the Congress

through its various committees has always reassured the country and

demonstrated that it is maintaining the most adequate defensive forces

in these present years that it has ever supported in time of peace.

This general policy should be kept in effect. Here and there temporary

changes may be made in personnel to meet requirements in other

directions. Attention should be given to submarines, cruisers, and air

forces. Particular points may need strengthening, but as a whole our

military power is sufficient.

The one weak place in the whole line is our still stupendous war debt.

In any modern campaign the dollars are the shock troops. With a depleted

treasury in the rear, no army can maintain itself in the field. A

country loaded with debt is a country devoid of the first line of

defense. Economy is the handmaid of preparedness. If we wish to be able

to defend ourselves to the full extent of our power in the future, we

shall discharge as soon as possible the financial burden of the last

war. Otherwise we would face a crisis with a part of our capital

resources already expended.

The amount and kind of our military equipment is preeminently a question

for the decision of the Congress, after giving due consideration to the

advice of military experts and the available public revenue. Nothing is

more laudable than the cooperation of the agricultural and industrial

resources of the country for the purpose of supplying the needs of

national defense. In time of peril the people employed in these

interests volunteered in a most self-sacrificing way, often at the

nominal charge of a dollar a year. But the Army and Navy are not

supported for the benefit of supply concerns; supply concerns are

supported for the benefit of the Army and Navy. The distribution of

orders on what is needed from different concerns for the purpose of

keeping up equipment and organization is perfectly justified, but any

attempt to prevail upon the Government to purchase beyond its needs

ought not to be tolerated. It is eminently fair that those who deal with

the Government should do so at a reasonable profit. However, public

money is expended not that some one may profit by it, but in order to

serve a public purpose.

While our policy of national defense will proceed in order that we may

be independent and self-sufficient, I am opposed to engaging in any

attempt at competitive armaments. No matter how much or how little some

other country may feel constrained to provide, we can well afford to set

the example, not of being dictated to by others, but of adopting our own

standards. We are strong enough to pursue that method, which will be a

most wholesome model for the rest of the world. We are eminently

peaceful, but we are by no means weak. While we submit our differences

with others, not to the adjudication of force, but of reason, it is not

because we are unable to defend our rights. While we are doing our best

to eliminate all resort to war for the purpose of settling disputes, we

can not but remember that the peace we now enjoy had to be won by the

sword and that if the rights of our country are to be defended we can

not rely for that purpose upon anyone but ourselves. We can not shirk

the responsibility, which is the first requisite of all government, of

preserving its own integrity and maintaining the rights of its own

citizens. It is only in accordance with these principles that we can

establish any lasting foundations for an honorable and permanent peace.

It is for these reasons that our country, like any other country,

proposes to provide itself with an army and navy supported by a merchant

marine. Yet these are not for competition with any other power. For

years we have besought nations to disarm. We have recently expressed our

willingness at Geneva to enter into treaties for the limitation of all

types of warships according to the ratio adopted at the Washington

Conference. This offer is still pending. While we are and shall continue

to be armed it is not as a menace, but rather a common assurance of

tranquility to all the peaceloving people of the world. For us to do any

less would be to disregard our obligations, evade our responsibilities,

and jeopardize our national honor.

VETERANS

This country, not only because it is bound by honor but because of the

satisfaction derived from it, has always lavished its bounty upon its

veterans. For years a service pension has been bestowed upon the Grand

Army on reaching a certain age. Like provision has been made for the

survivors of the Spanish War. A liberal future compensation has been

granted to all the veterans of the World War. But it is in the case of

the, disabled and the dependents that the Government exhibits its

greatest solicitude. This work is being well administered by the

Veterans’ Bureau. The main unfinished feature is that of

hospitalization. This requirement is being rapidly met. Various veteran

bodies will present to you recommendations which should have your

careful consideration. At the last session we increased our annual

expenditure for pensions and relief on account of the veterans of three

wars. While I approve of proper relief for all suffering, I do not favor

any further extension of our pension system at this time.

ALIEN PROPERTY

We still have in the possession of the Government the alien property. It

has always been the policy of America to hold that private enemy

property should not be confiscated in time of war. This principle we

have scrupulously observed. As this property is security for the claims

of our citizens and our Government, we can not relinquish it without

adequate provision for their reimbursement. Legislation for the return

of this property, accompanied by suitable provisions for the liquidation

of the claims of our citizens and our Treasury, should be adopted. If

our Government releases to foreigners the security which it holds for

Americans, it must at the same time provide satisfactory safeguards for

meeting American claims.

PROHIBITION

The duly authorized public authorities of this country have made

prohibition the law of the land. Acting under the Constitution the

Congress and the legislatures of practically all the, States have

adopted legislation for its enforcement. Some abuses have arisen which

require reform. Under the law the National Government has entrusted to

the Treasury Department the especial duty of regulation and enforcement.

Such supplementary legislation as it requires to meet existing

conditions should be carefully and speedily enacted. Failure to support

the Constitution and observe the law ought not to be tolerated by public

opinion. Especially those in public places, who have taken their oath to

support the Constitution, ought to be most scrupulous in its observance.

Officers of the Department of Justice throughout the country should be

vigilant in enforcing the law, but local authorities, which had always

been mainly responsible for the enforcement of law in relation to

intoxicating liquor, ought not to seek evasion by attempting to shift

the burden wholly upon the Federal agencies. Under the Constitution the

States are jointly charged with the Nation in providing for the

enforcement of the prohibition amendment. Some people do not like the

amendment, some do not like other parts of the Constitution, some do not

like any of it. Those who entertain such sentiments have a perfect right

to seek through legal methods for a change. But for any of our

inhabitants to observe such parts of the Constitution as they like,

while disregarding others, is a doctrine that would break down all

protection of life and property and destroy the American system of

ordered liberty.

FOREIGN RELATIONS

The foreign policy of this Government is well known. It is one of peace

based on that mutual respect that arises from mutual regard for

international rights and the discharge of international obligations. It

is our purpose to promote understanding and good will between ourselves

and all other people. The American people are altogether lacking in an

appreciation of the tremendous good fortune that surrounds their

international position. We have no traditional enemies. We are not

embarrassed over any disputed territory. We have no possessions that are

coveted by others; they have none that are coveted by us. Our borders

are unfortified. We fear no one; no one fears us. All the world knows

that the whole extent of our influence is against war and in favor of

peace, against the use of force and in favor of negotiation,

arbitration, and adjudication as a method of adjusting international

differences. We look with disfavor upon all aggressive warfare. We are

strong enough so that no one can charge us with weakness if we are slow

to anger. Our place is sufficiently established so that we need not be

sensitive over trifles. Our resources, are large enough so that we can

afford to be generous. At the same time we are a nation among nations

and recognize a responsibility not only to ourselves, but in the

interests of a stable and enlightened civilization, to protect and

defend the international rights of our Government and our citizens.

It is because of our historical detachment and the generations of

comparative indifference toward it by other nations that our public is

inclined to consider altogether too seriously the reports that we are

criticized abroad. We never had a larger foreign trade than at the

present time. Our good offices were never more sought and the necessity

for our assistance and cooperation was never more universally declared

in any time of peace. We know that the sentiments which we entertain

toward all other nations are those of the most sincere friendship and

good will and of all unbounded desire to help, which we are perfectly

willing to have judged by their fruits. In our efforts to adjust our

international obligations we have met with a response which, when

everything is considered, I believe history will record as a most

remarkable and gratifying demonstration of the sanctity with which

civilized nations undertake to discharge their mutual obligations. Debt

settlements have been negotiated with practically all of those who owed

us and all finally adjusted but two, which are, in process of

ratification. When we consider the real sacrifice that will be necessary

on the part of other nations, considering all their circumstances, to

meet their agreed payments, we ought to hold them in increased

admiration and respect. It is true that we have extended to them very

generous treatment, but it is also true that they have agreed to repay

its all that we loaned to them and some interest.

A special conference on the Chinese customs tariff provided for by the

treaty between the nine powers relating to the Chinese customs tariff

signed at Washington on February 6, 1922, was called by the Chinese

Government to meet at Peking, on October 26, 1925. We participated in

this conference through fully empowered delegates and, with good will,

endeavored to cooperate with the other participating powers with a view

to putting into effect promises made to China at the Washington

conference, and considering any reasonable proposal that might be made

by the Chinese Government for the revision of the treaties on the

subject of China’s tariff. With these aims in view the American

delegation at the outset of the conference proposed to put into effect

the surtaxes provided for by the Washington treaty and to proceed

immediately to the negotiation of a treaty, which, among other things,

was to make provision for the abolition of taxes collected on goods in

transit, remove the tariff restrictions in existing treaties, and put

into effect the national tariff law of China.

Early in April of the present year the central Chinese Government was

ousted from power by opposing warring factions. It became impossible

under the circumstances to continue the negotiations. Finally, on July

3, the delegates of the foreign powers, including those of the United

States, issued a statement expressing their unanimous and earnest desire

to proceed with the work of the conference at the earliest possible

moment when the delegates of the Chinese Government are in a position to

resume discussions with the foreign delegates of the problems before the

conference. We are prepared to resume the negotiations thus interrupted

whenever a Government representing the Chinese people and acting on

their behalf presents itself. The fact that constant warfare between

contending Chinese factions has rendered it impossible to bring these

negotiations to a successful conclusion is a matter of deep regret.

Throughout these conflicts we have maintained a position of the most

careful neutrality. Our naval vessels in Asiatic waters, pursuant to

treaty rights, have been used only for the protection of American

citizens.

Silas H. Strawn, Esq., was sent to China as American commissioner to

cooperate with commissioners of the other powers in the establishment of

a commission to inquire into the present practice of extraterritorial

jurisdiction in China, with a view to reporting to the Governments of

the several powers their findings of fact in regard to these matters.

The commission commenced its work in January, 1926, and agreed upon a

joint report which was signed on September 16, 1926. The commission’s

report has been received and is being studied with a view to determining

our future policy in regard to the question of extraterritorial

privileges under treaties between the United States and China.

The Preparatory Commission for the Disarmament Conference met at Geneva

on May 18 and its work has been proceeding almost continuously since

that date. It would be premature to attempt to form a judgment as to the

progress that has been made. The commission has had before it a

comprehensive list of questions touching upon all aspects of the

question of the limitation of armament. In the commission’s discussions

many differences of opinion have developed. However, I am hopeful that

at least some measure of agreement will be reached as the discussions

continue. The American representation on the commission has consistently

tried to be helpful, and has kept before it the practical objective to

which the commission is working, namely, actual agreements for the

limitation of armaments. Our representatives will continue their work in

that direction.

One of the most encouraging features of the commission’s work thus far

has been the agreement in principle among the naval experts of a

majority of the powers parties to the Washington treaty limiting naval

armament upon methods and standards for the comparison and further

limitation of naval armament. It is needless to say that at the proper

time I shall be prepared to proceed along practical lines to the

conclusion of agreements carrying further the work begun at the

Washington Conference in 1921.

DEPARTMENT REPORTS

Many important subjects which it is impossible even to mention in the

short space of an annual message you will find fully discussed in the

departmental reports. A failure to include them here is not to be taken

as indicating any lack of interest, but only a disinclination to state

inadequately what has been much better done in other documents.

THE CAPITAL CITY

We are embarking on an ambitious building program for the city of

Washington. The Memorial Bridge is under way with all that it holds for

use and beauty. New buildings are soon contemplated. This program should

represent the best that exists in the art and science of architecture.

Into these structures which must be considered as of a permanent nature

ought to go the aspirations of the Nation, its ideals expressed in forms

of beauty. If our country wishes to compete with others, let it not be

in the support of armaments but in the making of a beautiful capital

city. Let it express the soul of America. Whenever an American is at the

seat of his Government, however traveled and cultured he may be, he

ought to find a city of stately proportion, symmetrically laid out and

adorned with the best that there is in architecture, which would arouse

his imagination and stir his patriotic pride. In the coming years

Washington should be not only the art center of our own country but the

art center of the world. Around it should center all that is best in

science, in learning, in letters, and in art. These are the results that

justify the creation of those national resources with which we have been

favored.

AMERICAN IDEALS

America is not and must not be a country without ideals. They are

useless if they are only visionary; they are only valuable if they are

practical. A nation can not dwell constantly on the mountain tops. It

has to be replenished and sustained through the ceaseless toil of the

less inspiring valleys. But its face ought always to be turned upward,

its vision ought always to be fixed on high.

We need ideals that can be followed in daily life, that can be

translated into terms of the home. We can not expect to be relieved from

toil, but we do expect to divest it of degrading conditions. Work is

honorable; it is entitled to an honorable recompense. We must strive

mightily, but having striven there is a defect in our political and

social system if we are not in general rewarded with success. To relieve

the land of the burdens that came from the war, to release to the

individual more of the fruits of his own industry, to increase his

earning capacity and decrease his hours of labor, to enlarge the circle

of his vision through good roads and better transportation, to lace

before him the opportunity for education both in science and in art, to

leave him free to receive the inspiration of religion, all these are

ideals which deliver him from the servitude of the body and exalt him to

the service of the soul. Through this emancipation from the things that

are material, we broaden our dominion over the things that are

spiritual.

***

State of the Union Address

Calvin Coolidge

December 6, 1927

Members of the Congress:

It is gratifying to report that for the fourth consecutive year the

state of the Union in general is good. We are at peace. The country as a

whole has had a prosperity never exceeded. Wages are at their highest

range, employment is plentiful. Some parts of agriculture and industry

have lagged; some localities have suffered from storm and flood. But

such losses have been absorbed without serious detriment to our great

economic structure. Stocks of goods are moderate and a wholesome caution

is prevalent. Rates of interest for industry, agriculture, and

government have been reduced. Savers and investors are providing capital

for new construction in industry and public works. The purchasing power

of agriculture has increased. If the people maintain that confidence

which they are entitled to have in themselves, in each other, and in

America, a comfortable prosperity will continue.

CONSTRUCTIVE ECONOMY

Without constructive economy in Government expenditures we should not

now be enjoying these results or these prospects. Because we are not now

physically at war, some people are disposed to forget that our war debt

still remains. The Nation must make financial sacrifices, accompanied by

a stern self-denial in public expenditures, until we have conquered the

disabilities of our public finance. While our obligation to veterans and

dependents is large and continuing, the heavier burden of the national

debt is being steadily eliminated. At the end of this fiscal year it

will be reduced from about $26,600,000,000 to about $17,975,000,000.

Annual interest, including war savings, will have been reduced from

$1,055,000,000 to $670,0001,000. The sacrifices of the people, the

economy of the Government, are showing remarkable results. They should

be continued for the purpose of relieving the Nation of the burden of

interest and debt and releasing revenue for internal improvements and

national development.

Not only the amount, but the rate, of Government interest has been

reduced. Callable bonds have been refunded and paid, so that during this

year the average rate of interest on the present public debt for the

first time fell below 4 per cent. Keeping the credit of the Nation high

is a tremendously profitable operation.

TAX REDUCTION

The immediate fruit of economy and the retirement of the public debt is

tax reduction. The annual saving in interest between 1925 and 1929 is

$212,000,000. Without this no bill to relieve the taxpayers would be

worth proposing. The three measures already enacted leave our Government

revenues where they are not oppressive. Exemptions, have been increased

until 115,000,000 people make but 2,500,000 individual taxable returns,

so that further reduction should be mainly for the purpose of removing

inequalities. The Secretary of the Treasury has recommended a measure

which would give us a much better balanced system of taxation and

without oppression produce sufficient revenue. It has my complete

support.

Unforeseen contingencies requiring money are always arising. Our

probable surplus for June 30, 1929, is small. A slight depression in

business would greatly reduce our revenue because of our present method

of taxation. The people ought to take no selfish attitude of pressing

for removing moderate and fair taxes which might produce a deficit. We

must keep our budget balanced for each year. That is the corner stone of

our national credit, the trifling price we pay to command the lowest

rate of interest of any great power in the world. Any surplus can be

applied to debt reduction, and debt reduction is tax reduction. Under

the present circumstances it would be far better to leave the rates as

they are than to enact a bill carrying the peril of a deficit. This is

not a problem to be approached in a narrow or partisan spirit. All of

those who participate in finding a reasonable solution will be entitled

to participate in any credit that accrues from it without regard to

party. The Congress has already demonstrated that tax legislation can be

removed from purely political consideration into the realm of patriotic

business principles.

Any bill for tax reduction should be written by those who are

responsible for raising, managing, and expending the finances of the

Government. If special interests, too often selfish, always uninformed

of the national needs as a whole, with hired agents using their proposed

beneficiaries as engines of propaganda, are permitted to influence the

withdrawal of their property from taxation, we shall have a law that is

unbalanced and unjust, bad for business, bad for the country, probably

resulting in a deficit, with disastrous financial Consequences. The

Constitution has given the Members of the Congress sole authority to

decide what tax measures shall be presented for approval. While

welcoming information from any quarter, the Congress should continue to

exercise its own judgment in a matter so vital and important to all the

interests of the country as taxation.

NATIONAL DEFENSE

Being a nation relying not on force, but on fair dealing and good will,

to maintain peace with others, we have provided a moderate military

force in a form adapted solely to defense. It should be continued with a

very generous supply of officers and with the present base of personnel,

subject to fluctuations which may be temporarily desirable.

The five-year program for our air forces is in keeping with this same

policy and commensurate with the notable contributions of America to the

science of aeronautics. The provisions of the law lately enacted are

being executed as fast as the practical difficulties of an orderly and

stable development permit.

While our Army is small, prudence requires that it should be kept in a

high state of efficiency and provided with such supplies as would permit

of its immediate expansion. The garrison ration has lately been

increased. Recommendations for an appropriation of $6,166,000 for new

housing made to the previous Congress failed to pass. While most of the

Army is well housed, some of it which is quartered in wartime training

camps is becoming poorly housed. In the past three years $12,533,000

have been appropriated for reconstruction and repairs, and an

authorization has been approved of $22,301,000 for new housing, under

which $8,070,000 has already been appropriated. A law has also been

passed, complying with the request of the War Department, allocating

funds received from the sale of buildings and land for housing purposes.

The work, however, is not completed, so that other appropriations are

being recommended.

Our Navy is likewise a weapon of defense. We have a foreign commerce and

ocean lines of trade unsurpassed by any other country. We have outlying

territory in the two great oceans and long stretches of seacoast studded

with the richest cities in the world. We are responsible for the

protection of a large population and the greatest treasure ever bestowed

upon any people. We are charged with an international duty of defending

the Panama Canal. To meet these responsibilities we need a very

substantial sea armament. It needs aircraft development, which is being

provided under the five-year program. It needs submarines as soon as the

department decides upon the best type of construction. It needs airplane

carriers and a material addition to its force of cruisers. We can plan

for the future and begin a moderate building program.

This country has put away the Old World policy of competitive armaments.

It can never be relieved of the responsibility of adequate national

defense. We have one treaty secured by an unprecedented attitude of

generosity on our part for a limitation in naval armament. After most

careful preparation, extending over months, we recently made every

effort to secure a three-power treaty to the same end. We were granted

much cooperation by Japan, but we were unable to come to an agreement

with Great Britain. While the results of the conference were of

considerable value, they were mostly of a negative character. We know

now that no agreement can be reached which will be inconsistent with a

considerable building program on our part. We are ready and willing to

continue the preparatory investigations on the general subject of

limitation of armaments which have been started under the auspices of

the League of Nations.

We have a considerable cruiser tonnage, but a part of it is obsolete.

Everyone knew that had a three-power agreement been reached it would

have left us with the necessity of continuing our building program. The

failure to agree should not cause us to build either more or less than

we otherwise should. Any future treaty of limitation will call on us for

more ships. We should enter on no competition. We should refrain from no

needful program. It should be made clear to all the world that lacking a

definite agreement, the attitude of any other country is not to be

permitted to alter our own policy. It should especially be demonstrated

that propaganda will not cause us to change our course. Where there is

no treaty limitation, the size of the Navy which America is to have will

be solely for America to determine. No outside influence should enlarge

it or diminish it. But it should be known to all that our military power

holds no threat of aggrandizement. It is a guaranty of peace and

security at home, and when it goes abroad it is an instrument for the

protection of the legal rights of our citizens under international law,

a refuge in time of disorder, and always the servant of world peace.

Wherever our flag goes the rights of humanity increase.

MERCHANT MARINE

The United States Government fleet is transporting a large amount of

freight and reducing its drain on the Treasury. The Shipping Board is

constantly under pressure, to which it too often yields, to protect

private interests, rather than serve the public welfare. More attention

should be given to merchant ships as an auxiliary of the Navy. The

possibility of including their masters and crews in the Naval Reserve,

with some reasonable compensation, should be thoroughly explored as a

method of encouraging private operation of shipping. Public operation is

not a success. No investigation, of which I have caused several to be

made, has failed to report that it could not succeed or to recommend

speedy transfer to private ownership. Our exporters and importers are

both indifferent about using American ships. It should be our policy to

keep our present vessels in repair and dispose of them as rapidly as

possible, rather than undertake any new construction. Their operation is

a burden on the National Treasury, for which we are not receiving

sufficient benefits.

COMMERCIAL AVIATION

A rapid growth is taking place in aeronautics. The Department of

Commerce has charge of the inspection and licensing system and the

construction of national airways. Almost 8,000 miles are already

completed and about 4,000 miles more contemplated. Nearly 4,400 miles

are now equipped and over 3,000 miles more will have lighting and

emergency landing fields by next July. Air mail contracts are expected

to cover 24 of these lines. Daily airway flying is nearly 15,000 miles

and is expected to reach 25,000 miles early next year.

Flights for other purposes exceed 22,000 miles each day. Over 900

airports, completed and uncompleted, have been laid out. The demand for

aircraft has greatly increased. The policy already adopted by the

Congress is producing the sound development of this coming industry.

WESTERN HEMISPHERE AIR MAIL

Private enterprise is showing much interest in opening up aviation

service to Mexico and Central and South America. We are particularly

solicitous to have the United States take a leading part in this

development. It is understood that the governments of our sister

countries would be willing to cooperate. Their physical features, the

undeveloped state of their transportation, make an air service

especially adaptable to their usage. The Post Office Department should

be granted power to make liberal long-term contracts for carrying our

mail, and authority should be given to the Army and the Navy to detail

aviators and planes to cooperate with private enterprise in establishing

such mail service with the consent of the countries concerned. A

committee of the Cabinet will later present a report on this subject.

GOOD ROADS

The importance and benefit of good roads is more and more coming to be

appreciated. The National Government has been making liberal

contributions to encourage their construction. The results and benefits

have been very gratifying. National participation, however, should be

confined to trunk-line systems. The national tax on automobiles is now

nearly sufficient to meet this outlay. This tax is very small, and on

low-priced cars is not more than $2 or $3 each year.

While the advantage of having good roads is very large, the desire for

improved highways is not limited to our own country. It should and does

include all the Western Hemisphere. The principal points in Canada are

already accessible. We ought to lend our encouragement in any way we can

for more good roads to all the principal points in this hemisphere south

of the Rio Grande. It has been our practice to supply these countries

with military and naval advisers, when they have requested it, to assist

them in national defense. The arts of peace are even more important to

them and to us. Authority should be given by law to provide them at

their request with engineering advisers for the construction of roads

and bridges. In some of these countries already wonderful progress is

being made in road building, but the engineering features are often very

exacting and the financing difficult. Private interests should look with

favor on all reasonable loans sought by these countries to open such

main lines of travel.

This general subject has been promoted by the Pan American Congress of

Highways, which will convene again at Rio de Janeiro in July, 1928. It

is desirable that the Congress should provide for the appointment of

delegates to represent the Government of the United States.

CUBAN PARCEL POST

We have a temporary parcel-post convention with Cuba. The advantage of

it is all on our side. During 1926 we shipped twelve times as many

parcels, weighing twenty-four times as much, as we received. This

convention was made on the understanding that we would repeal an old law

prohibiting the importation of cigars and cigarettes in quantities less

than 3,000 enacted in 1866 to discourage smuggling, for which it has

long been unnecessary. This law unjustly discriminates against an

important industry of Cuba. Its repeal has been recommended by the

Treasury and Post Office Departments. Unless this is done our merchants

and railroads will find themselves deprived of this large parcel-post

business after the 1st of next March, the date of the expiration of the

convention, which has been extended upon the specific understanding that

it would expire at that time unless this legislation was enacted. We

purchase large quantities of tobacco made in Cuba. It is not probable

that our purchases would be any larger if this law was repealed, while

it would be an advantage to many other industries in the United States.

INSULAR POSSESSIONS

Conditions in the Philippine Islands have been steadily improved.

Contentment and good order prevail. Roads, irrigation works, harbor

improvements, and public buildings are being constructed. Public

education and sanitation have been advanced. The Government is in a

sound financial condition. These immediate results were especially due

to the administration of Gov. Gen. Leonard Wood. The six years of his

governorship marked a distinct improvement in the islands and rank as

one of the outstanding accomplishments of this distinguished man. His

death is a loss to the Nation and the islands.

Greater progress could be made, more efficiency could be put into

administration, if the Congress would undertake to expend, through its

appropriating power, all or a part of the customs revenues which are now

turned over to the Philippine treasury. The powers of the auditor of the

islands also need revision and clarification. The government of the

islands is about 98 per cent in the hands of the Filipinos. An extension

of the policy of self-government will be hastened by the demonstration

on their part of their desire and their ability to carry out cordially

and efficiently the provisions of the organic law enacted by the

Congress for the government of the islands. It would be well for a

committee of the Congress to visit the islands every two years.

A fair degree of progress is being made in Porto Rico. Its agricultural

products are increasing; its treasury position, which has given much

concern, shows improvement. I am advised by the governor that

educational facilities are still lacking. Roads are being constructed,

which he represents are the first requisite for building schoolhouses.

The loyalty of the island to the United States is exceedingly

gratifying. A memorial will be presented to you requesting authority to

have the governor elected by the people of Porto Rico. This was never

done in the case of our own Territories. It is admitted that education

outside of the towns is as yet very deficient. Until it has progressed

further the efficiency of the government and the happiness of the people

may need the guiding hand of an appointed governor. As it is not

contemplated that any change should be made immediately, the general

subject may well have the thoughtful study of the Congress.

PANAMA CANAL

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