State of the Union Address
December 8, 1925
Members of the Congress:
In meeting the constitutional requirement of informing the Congress
upon the state of the Union, it is exceedingly gratifying to report that
the general condition is one of progress and prosperity. Here and there
are comparatively small and apparently temporary difficulties needing adjustment
and improved administrative methods, such as are always to be expected,
but i ii the fundamentals of government and business the results demonstrate
that we are going in the right direction. The country does not appear to
require radical departures from the policies already adopted so much as
it needs a further extension of these policies and the improvement of details.
The age of perfection is still in the somewhat distant future, but it is
more in danger of being retarded by mistaken Government activity than it
is from lack of legislation. We are by far the most likely to accomplish
permanent good if we proceed with moderation.
In our country the people are sovereign and independent, and must accept
the resulting responsibilities. It is their duty to support themselves
and support the Government. That is the business of the Nation, whatever
the charity of the Nation may require. The functions which the Congress
are to discharge are not those of local government but of National Government.
The greatest solicitude should be exercised to prevent any encroachment
upon the rights of the States or their various political subdivisions.
Local self-government is one of our most precious possessions. It is the
greatest contributing factor to the stability strength liberty, and progress
of the Nation. It ought not to be in ringed by assault or undermined by
purchase. It ought not to abdicate its power through weakness or resign
its authority through favor. It does not at all follow that because abuses
exist it is the concern of the Federal Government to attempt the r reform.
Society is in much more danger from encumbering the National Government
beyond its wisdom to comprehend, or its ability to administer, than from
leaving the local communities to bear their own burdens and remedy their
own evils. Our local habit and custom is so strong, our variety of race
and creed is so great the Federal authority is so tenuous, that the area
within which it can function successfully is very limited. The wiser policy
is to leave the localities, so far as we can, possessed of their own sources
of revenue and charged with their own obligations.
It is a fundamental principle of our country that the people are sovereign.
While they recognize the undeniable authority of the state, they have established
as its instrument a Government of limited powers. They hold inviolate in
their own hands the jurisdiction over their own freedom and the ownership
of their own property. Neither of these can be impaired except by due process
of law. The wealth of our country is not public wealth, but private wealth.
It does not belong to the Government, it belongs to the people. The Government
has no justification in taking private Property except for a public purpose.
It is always necessary to keep these principles in mind in the laying of
taxes and in the making of appropriations. No right exists to levy on a
dollar, or to order the expenditure of a dollar, of the money of the people,
except for a necessary public purpose duly authorized by the Constitution.
The power over the purse is the power over liberty.
That is the legal limitation within which the Congress can act, How
it will, proceed within this limitation is always a question of policy.
When the country is prosperous and free from debt, when the rate of taxation
is low, opportunity exists for assuming new burdens and undertaking new
enterprises. Such a condition now prevails only to a limited extent. All
proposals for assuming new obligations ought to be postponed, unless they
are reproductive capital investments or are such as are absolutely necessary
at this time. We still have an enormous debt of over $20,000,000,000, on
which the interest and sinking-fund requirements are $1,320,000,000. Our
appropriations for the Pension Office and the Veterans' Bureau are $600,000,000.
The War and Navy Departments call for $642,000,000. Other requirements,
exclusive of the Post Office ' which is virtually self-sustaining, brought
the appropriations for the current year up to almost C3,100,060,000. This
shows an expenditure of close to $30 for every inhabitant of our country.
For the average family of five it means a tax, directly or indirectly paid,
of about $150 for national purposes alone. The local tax adds much more.
These enormous expenditures ought not to be increased, but through every
possible effort they ought to be reduced.
Only one of these great items can be ultimately extinguished. That is
the item of our war debt. Already this has been reduced to about $6,000,000,000,
which means an annual saving in interest of close to $250,000,000. The
present interest charge is about $820,000,000 yearly. It would seem to
be obvious that the sooner this debt can be retired the more the taxpayers
will save in interest and the easier it will be to secure funds with which
to prosecute needed running expenses, constructions, and improvements.
This item of $820,000,000 for interest is a heavy charge on all the people
of the country, and it seems to me that we might well consider whether
it is not greatly worth while to dispense with it as early as possible
by retiring the principal debt which it is required to serve.
It has always been our policy to retire our debts. That of the Revolutionary
War period, notwithstanding the additions made in 1812, was paid by 1835.
and the Civil War debt within 23 years. Of the amount already paid, over
$1,000,000,000 is a reduction in cash balances. That source is exhausted.
Over one and two-thirds billions of dollars was derived from excess receipts.
Tax reduction eliminates that. The sale of surplus war materials has been
another element of our income. That is practically finished. With these
eliminated, the reduction of the debt has been only about $500,000,000
each year, not an excessive sum on so large a debt.
Proposals have been made to extend the payment over a period of 62 years.
If $1,000,000,000 is paid at the end of 20 years, the cost to the taxpayers
is the principal and, I f the interest is 4% per cent, a total of $1,850,000,000.
If the same sum is paid at the end of 62 years, the cost is $3,635,000,000,
or almost double. Here is another consideration: Compared with its purchasing
power in 1913, the dollar we borrowed represented but 52 cents. As the
value of our dollar increases, due to the falling prices of commodities,
the burden of our debt increases. It has now risen to 631/2 cents. The
taxpayer will be required to produce nearly twice the amount of commodities
to pay his debt if the dollar returns to the 1913 value. The more we pay
while prices are high, the easier it will be.
Deflation of government after a war period is slower than deflation
of business, where curtailment is either prompt and effective or disaster
follows. There is room for further economy in the cost of the Federal Government,
but a co n of current expenditures with pre-war expenditures is not able
to the efficiency with which Government business is now being done. The
expenditures of 19161 the last pre-war year, were $742,000,000, and in
1925 over $3,500,000,000, or nearly five times as great. If we subtract
expenditures for debt retirements and interest, veterans' relief, increase
of pensions, and other special outlays, consisting of refunds, trust investments,
and like charges, we find that the general expenditures of the Government
in 1925 were slightly more than twice as large as in 1916.
As prices in 1925 were approximately 40 per cent higher than in 1916,
the cost of the same Government must also have increased. But the Government
is not 'the same. It is more expensive to collect the much greater revenue
necessary and to administer our great debt. We have given enlarged and
improved services to agriculture and commerce. Above all, America has grown
in population and wealth. Government expenditures must always share in
this growth. Taking into account the factors I have mentioned, I believe
that present Federal expenses are not far out of line with pre-war expenses.
We have nearly accomplished the deflation.
This does not mean that further economies will not come. As we reduce
our debt our interest charges decline. There are many details yet to correct.
The real improvement, however, must come not from additional curtailment
of expenses, but by a more intelligent, more ordered spending. Our economy
must be constructive. While we should avoid as far as possible increases
in permanent current expenditures, oftentimes a capital outlay like internal
improvements will result in actual constructive saving. That is economy
in its best sense. It is an avoidance of waste that there may be the means
for an outlay to-day which will bring larger returns to-morrow. We should
constantly engage in scientific studies of our future requirements and
adopt an orderly program for their service. Economy is the method by which
we prepare to-day to afford the improvements of to-morrow.
A mere policy of economy without any instrumentalities for putting it
into operation would be very ineffective. The Congress has wisely set up
the Bureau of the Budget to investigate and inform the President what recommendations
he ought to make for current appropriations. This gives a centralized authority
where a general and comprehensive understanding can be reached of the sources
of income and the most equitable distribution of expenditures. How well
it has worked is indicated by the fact that the departmental estimates
for 1922, before the budget law, were $4,068,000,000 while the Budget estimates
for 1927 are $3,156,000,000. This latter figure shows the reductions in
departmental estimates for the coming year made possible by the operation
of the Budget system that the Congress has provided.
But it is evidently not enough to have care in making appropriations
without any restraint upon expenditure. The Congress has provided that
check by establishing the office of Comptroller General.
The purpose of maintaining the Budget Director and the Comptroller General
is to secure economy and efficiency in Government expenditure. No better
method has been devised for the accomplishment of that end. These offices
can not be administered in all the various details without making some
errors both of fact and of judgment. But the important consideration remains
that these are the instrumentalities of the Congress and that no other
plan has ever been adopted which was so successful in promoting economy
and efficiency. The Congress has absolute authority over the appropriations
and is free to exercise its judgment, as the evidence may warrant, in increasing
or decreasing budget recommendations. But it ought to resist every effort
to weaken or break down this most beneficial system of supervising appropriations
and expenditures. Without it all the claim of economy would be a mere pretense.
The purpose of reducing expenditures is to secure a reduction in taxes.
That purpose is about to be realized. With commendable promptness the Ways
and Means Committee of the House has undertaken in advance of the meeting
of the Congress to frame a revenue act. As the bill has proceeded through
the committee it has taken on a nonpartisan character, and both Republicans
and Democrats have joined in a measure which embodies many sound principles
of tax reform. The bill will correct substantially the economic defects
injected into the revenue act of 1924, as well as many which have remained
as war-time legacies. In its present form it should provide sufficient
revenue for the Government.
The excessive surtaxes have been reduced, estate tax rates arv restored
to more reasonable figures, with every prospect of withdrawing from the
field when the States have had the opportunity to correct the abuses in
their own inheritance tax laws, the gift tax and publicity section are
to be repealed many miscellaneous taxes are lowered or abandoned, and the
Board of Tax Appeals and the administrative features of the law are improved
and strengthened. I approve of the bill in principle. In so far as income-tax
exemptions are concerned, it seems, to me the committee has gone as far
as it is Safe to go and somewhat further than I should have gone. Any further
extension along these lines would, in my opinion, impair tile integrity
of our income-tax system.
I am advised that the bill will. be through the House by Christmas.
For this prompt action the country call thank the good sense of the Ways
and Means Committee in framing an economic measure upon economic considerations.
If this attitude continues to be reflected through the Congress, the taxpayer
will have his relief by the time his March 15th installment of income taxes
is due. Nonpartisan effort means certain, quick action. Determination of
a revenue law definitely, promptly and solely as a revenue law, is one
of the greatest gifts a legislature can bestow upon its constituents. I
commend the example of file Ways and Means Committee. If followed, it will
place sound legislation upon the books in time to give the taxpayers the
full benefit of tax reduction next year. This means that the bill should
reach me prior to March 15.
All these economic results are being sought not to benefit the rich,
but to benefit the people. They are for the purpose of encouraging industry
in order that employment may be plentiful. They seek to make business good
in order that wages may be good. They encourage prosperity in order that
poverty may be banished from the home. They, seek to lay the foundation
which, through increased production, may, give the people a more bountiful
supply of the necessaries of life, afford more leisure for the improvement
of the mind, the appreciation of the arts of music and literature, sculpture
and painting, and the beneficial enjoyment of outdoor sports and recreation,
enlarge the resources which minister to charity and by aU these means attempting
to strengthen the spiritual life of the Nation.
The policy of our foreign relations, casting aside any suggestion of
force, rests solely on the foundation of peace, good will, and good works.
We have sought, in our intercourse with other nations, better understandings
through conference and exchange of views its befits beings endowed with
reason. The results have been the gradual elimination of disputes, the
settlement of controversies, and the establishment of a firmer friendship
between America and the rest of the world that has ever existed tit any
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 tip 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 1 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 tile 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 tile 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 tile 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 tile judges
are elected by tile 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
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 tip 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
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.
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 nation,,, 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.
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.
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 bi that very act
thereby place themselves in a class of undesirables. T 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 lie
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.
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 tile 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.
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 bas 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
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.
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.
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.
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
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.
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.
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,
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.
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.
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 tile 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
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.
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.
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
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 6e computed to include not only continuous but aggregate
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.
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.
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
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 bad 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.
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 tile 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.