I come to you to-day to discharge a duty which I wish with all my heart
I might have been spared; but it is a very clear duty, and therefore I
perform it without hesitation or apology. I come to ask very earnestly
that additional revenue be provided for the Government.
During the month of August there was, as compared with the corresponding
month of last year, a falling off of $10,629,538 in the revenues
collected from customs. A continuation of this decrease in the same
proportion throughout the current fiscal year would probably mean a loss
of customs revenues of from sixty to one hundred millions. I need not
tell you to what this falling off is due. It is due, in chief part, not
to the reductions recently made in the customs duties, but to the great
decrease in importations; and that is due to the extraordinary extent of
the industrial area affected by the present war in Europe. Conditions
have arisen which no man foresaw; they affect the whole world of
commerce and economic production; and they must be faced and dealt with.
It would be very unwise to postpone dealing with them. Delay in such a
matter and in the particular circumstances in which we now find
ourselves as a nation might involve consequences of the most
embarrassing and deplorable sort, for which I, for one, would not care
to be responsible. It would be very dangerous in the present
circumstances to create a moment's doubt as to the strength and
sufficiency of the Treasury of the United States, its ability to
assist, to steady, and sustain the financial operations of the country's
business. If the Treasury is known, or even thought, to be weak, where
will be our peace of mind? The whole industrial activity of the country
would be chilled and demoralized. Just now the peculiarly difficult
financial problems of the moment are being successfully dealt with, with
great self-possession and good sense and very sound judgment; but they
are only in process of being worked out. If the process of solution is
to be completed, no one must be given reason to doubt the solidity and
adequacy of the Treasury of the Government which stands behind the whole
method by which our difficulties are being met and handled.
The Treasury itself could get along for a considerable period, no doubt,
without immediate resort to new sources of taxation. But at what cost to
the business of the community? Approximately $75,000,000, a large part
of the present Treasury balance, is now on deposit with national banks
distributed throughout the country. It is deposited, of course, on call.
I need not point out to you what the probable consequences of
inconvenience and distress and confusion would be if the diminishing
income of the Treasury should make it necessary rapidly to withdraw
these deposits. And yet without additional revenue that plainly might
become necessary, and the time when it became necessary could not be
controlled or determined by the convenience of the business of the
country. It would have to be determined by the operations and
necessities of the Treasury itself. Such risks are not necessary and
ought not to be run. We cannot too scrupulously or carefully safeguard a
financial situation which is at best, while war continues in Europe,
difficult and abnormal. Hesitation and delay are the worst forms of bad
policy under such conditions.
And we ought not to borrow. We ought to resort to taxation, however we
may regret the necessity of putting additional temporary burdens on our
people. To sell bonds would be to make a most untimely and unjustifiable
demand on the money market; untimely, because this is manifestly not the
time to withdraw working capital from other uses to pay the Government's
bills; unjustifiable, because unnecessary. The country is able to pay
any just and reasonable taxes without distress. And to every other form
of borrowing, whether for long periods or, for short, there is the same
objection. These are not the circumstances, this is at this particular
moment and in this particular exigency not the market, to borrow large
sums of money. What we are seeking is to ease and assist every financial
transaction, not to add a single additional embarrassment to the
situation. The people of this country are both intelligent and
profoundly patriotic. They are ready to meet the present conditions in
the right way and to support the Government with generous self-denial.
They know and understand, and will be intolerant only of those who dodge
responsibility or are not frank with them.
The occasion is not of our own making. We had no part in making it. But
it is here. It affects us as directly and palpably almost as if we were
participants in the circumstances which gave rise to it. We must accept
the inevitable with calm judgment and unruffled spirits, like men
accustomed to deal with the unexpected, habituated to take care of
themselves, masters of their own affairs and their own fortunes. We
shall pay the bill, though we did not deliberately incur it.
In order to meet every demand upon the Treasury without delay or
peradventure and in order to keep the Treasury strong, unquestionably
strong, and strong throughout the present anxieties, I respectfully
urge that an additional revenue of $100,000,000 be raised through
internal taxes devised in your wisdom to meet the emergency. The only
suggestion I take the liberty of making is that such sources of revenue
be chosen as will begin to yield at once and yield with a certain and
constant flow.
I cannot close without expressing the confidence with which I approach a
Congress, with regard to this or any other matter, which has shown so
untiring a devotion to public duty, which has responded to the needs of
the Nation throughout a long season despite inevitable fatigue and
personal sacrifice, and so large a proportion of whose Members have
devoted their whole time and energy to the business of the country.