Our country has made much progress. But it has taken, and will continue to
take, much effort. Competition will be keen, the temptation to selfishness
and arrogance will be severe, the provocations to deal harshly with weaker
peoples will be many. All of these are embraced in the opportunity for true
greatness. They will be overbalanced by cooperation by generosity, and a
spirit of neighborly kindness. The forces of the universe are taking
humanity in that direction. In doing good, in walking humbly, in sustaining
its own people in ministering to other nations, America will work out its
own mighty destiny.
***
State of the Union Address
Calvin Coolidge
December 4, 1928
To the Congress of the United States:
No Congress of the United States ever assembled, on surveying the state of
the Union, has met with a more pleasing prospect than that which appears at
the present time. In the domestic field there is tranquility and
contentment, harmonious relations between management and wage earner,
freedom from industrial strife, and the highest record of years of
prosperity. In the foreign field there is peace, the good will which comes
from mutual understanding, and the knowledge that the problems which a
short time ago appeared so ominous are yielding to the touch of manifest
friendship. The great wealth created by our enterprise and industry, and
saved by our economy, has had the widest distribution among our own people,
and has gone out in a steady stream to serve the charity and the business
of the world. The requirements of existence have passed beyond the standard
of necessity into the region of luxury. Enlarging production is consumed by
an increasing demand at home and an expanding commerce abroad. The country
can regard the present with satisfaction and anticipate the future with
optimism.
The main source of these unexampled blessings lies in the integrity and
character of the American people. They have had great faith, which they
have supplemented with mighty works. They have been able to put trust in
each other and trust in their Government. Their candor in dealing with
foreign governments has commanded respect and confidence. Yet these
remarkable powers would have been exerted almost in vain without the
constant cooperation and careful administration of the Federal Government.
We have been coming into a period which may be fairly characterized as a
conservation of our national resources. Wastefulness in public business and
private enterprise has been displaced by constructive economy. This has
been accomplished by bringing our domestic and foreign relations more and
more under a reign of law. A rule of force has been giving way to a rule of
reason. We have substituted for the vicious circle of increasing
expenditures, increasing tax rates, and diminishing profits the charmed
circle of diminishing expenditures, diminishing tax rates, and increasing
profits.
Four times we have made a drastic revision of our internal revenue system,
abolishing many taxes and substantially reducing almost all others. Each
time the resulting stimulation to business has so increased taxable incomes
and profits that a surplus has been reduced. One-third of the national
debt has been paid, while much of the other two-thirds has been refunded at
lower rates, and these savings of interest and constant economies have
enabled us to repeat the satisfying process of more tax reductions. Under
this sound and healthful encouragement the national income has increased
nearly 50 per cent, until it is estimated to stand well over
$90,000,000,000. It gas been a method which has performed the seeming
miracle of leaving a much greater percentage of earnings in the hands of
the taxpayers with scarcely any diminution of the Government revenue. That
is constructive economy in the highest degree. It is the corner stone of
prosperity. It should not fail to be continued.
This action began by the application of economy to public expenditure. If
it is to be permanent, it must be made so by the repeated application of
economy. There is no surplus on which to base further tax revision at this
time. Last June the estimates showed a threatened deficit for the current
fiscal year of $94,000,000. Under my direction the departments began saving
all they could out of their present appropriations. The last tax reduction
brought an encouraging improvement in business, beginning early in
October, which will also increase our revenue. The combination of economy
and good times now indicates a surplus of about $37,000,000. This is a
margin of less than I percent on out, expenditures and makes it obvious
that the Treasury is in no condition to undertake increases in expenditures
to be made before June 30. It is necessary therefore during the present
session to refrain from new appropriations for immediate outlay, or if such
are absolutely required to provide for them by new revenue; otherwise, we
shall reach the end of the year with the unthinkable result of an unbalanced
budget. For the first time during my term of office we face that
contingency. I am certain that the Congress would not pass and I should not
feel warranted in approving legislation which would involve us in that
financial disgrace.
On the whole the finances of the Government are most satisfactory. Last
year the national debt was reduced about $906,000,000. The refunding and
retirement of the second and third Liberty loans have just been brought to
a successful conclusion, which will save about $75,000,000 a year in
interest. The unpaid balance has been arranged in maturities convenient
for carrying out our permanent debt-paying Program.
The enormous savings made have not been at the expense of any legitimate
public need. The Government plant has been kept up and many improvements
are tinder way, while its service is fully manned and the general
efficiency of operation has increased. We have been enabled to undertake
many new enterprises. Among these are the adjusted compensation of the
veterans of the World War, which is costing us $112,000,000 a year;
amortizing our liability to the civil service retirement funds,
$20,000,000; increase of expenditures for rivers and harbors including
flood control, $43,000,000; public buildings, $47,000,000. In 1928 we spent
$50,000,000 in the adjustment of war claims and alien property. These are
examples of a large list of items.