State of the Union Address
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
hom6 and ail 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 inighty works. They have been able to put trust
in each other and trust in their Government. Their candor in dealing with
foreign governments hag 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
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 ro, duced. 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 secining 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 w1,11 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 ditures to be made before June 30. It is necessary therefor"Stuing 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 $75,000,0W a year in
interest. The unpaid balance has been arranged
in maturities convenient for carrying out our permanent debt-paying
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
When we turn from our domestic affairs to our foreign relations, we
likewise perceive peace and progress. The Sixth International Conference
of American States was held at Habana last winter. It contributed to a
better understanding and cooperation among the nations'. Eleven important
conventions were signed and 71 resolutions passed. Pursuant to the plan
then adopted, this Government has invited the other 20 nations of this
hemisphere to it conference on conciliation and arbitration, which meets
in Washington on December 10. All the nations have accepted and the expectation
is justified that important progress will be made in methods for resolving
international differences by means of arbitration.
During the year we have signed 11 new arbitration treaties, and 22 more
are tinder negotiation.
When a destructive and bloody revolution lately broke out in Nicaragua,
at the earnest and repeated entreaties of its Government I dispatched our
Marine forces there to protect the lives and interests of our citizens.
To compose the contending parties, I sent there Col. Henry L. Stimson,
former Secretary of War and now Governor General of the Philippine Islands,
who secured an agreement that warfare should cease, a national election
should be held and peace should be restored. Both parties conscientiously
carried out this agreement, with the exception of a few bandits who later
mostly surrendered or left the country. President Diaz appointed Brig.
Gen. Frank R. McCoy, United States Army, president of the election board,
which included also one member of each political party.
A free and fair election has been held and has worked out so successfully
that both parties have joined in requesting like cooperation from this
country at the election four years hence, to which I have refrained from
making any commitments, although our country must be gratified at such
an exhibition of success and appreciation
Nicaragua is regaining its prosperity and has taken a long step in
the direction of peaceful self-government.
The long-standing differences between Chile and Peru have been sufficiently
composed so that diplomatic relations have been resumed by the exchange
of ambassadors. Negotiations are hopefully proceeding as this is written
for the final adjustment of the differences over their disputed territory.
Our relations with Mexico are on a more satisfactory basis than at any
time since their revolution. Many misunderstandings have been resolved
and the most frank and friendly negotiations promise a final adjustment
of all unsettled questions. It is exceedingly gratifying that Ambassador
Morrow has been able to bring our two neighboring countries, which have
so many interests in common, to a position of confidence in each other
and of respect for mutual sovereign rights.
The situation in China which a few months ago was so threatening as
to call for the dispatch of a large additional force has, been much composed.
The Nationalist Government has established itself over the country and
promulgated a new organic law announcing a program intended to promote
the political and economic welfare of the people. We have recognized this
Government,, encouraged its progress, and have negotiated a treaty restoring
to China complete
tariff autonomy and guaranteeing our citizens against discriminations.
Our trade in that quarter is increasing and our forces are being reduced.
GREEK AND AUSTRIAN DEBTS
Pending before the Congress is a recommendation for the settlement of
the Greek debt and the Austrian debt. both of these are comparatively small
and our country can afford to be generous. The rehabilitation of these
countries await& their settlement. There would also be advantages to
our trade. We could scarcely afford to be the only nation that refuses
the relief which Austria seeks. The Congress has already granted Austria
a long-time moratorium, which it is understood will be waived and immediate
payments begun on her debt on the same basis which we have extended to
One of the most important treaties ever laid before the Senate of the
United States will be that which the 15 nations recently signed at Paris,
and to which 44 other nations have declared their intention to adhere,
renouncing war as a national policy and agreeing to resort only to peaceful
means for the adjustment of international differences. It is the most solemn
declaration against war, the most positive adherence to peace, that it
is possible' for sovereign nations to
make. It does not supersede our inalienable sovereign right and duty
of national defense or undertake to commit us before the event to any mode
of action which the Congress might decide to be wise. it ever the treaty
should be broken. But it is a new standard in the world around which can
rally the informed and enlightened opinion of nations to prevent their
governments from beii4'forced into hostile action by the temporary outbreak
of international animosities. The observance of this covenant, so simple
and so straightforward, promises more for the peace of the world than any
other agreement ever negotiated among the nations.
The first duty of our Government to its own citizens and foreigners
within its borders is the preservation of order. Unless and until that
duty is met a government is not even eligible for recognition among the
family of nations. The advancement of world civilization likewise is dependent
upon that order among the people of different countries which we term peace.
To insure our citizens against the infringement of their legal rights at
home and abroad, to preserve order, liberty, and peace by making the law
supreme, we have an Army and a Navy.
Both of these are organized for defensive purposes. Our Army could not
be much reduced, but does not need to be increased. Such new housing and
repairs as are necessary are tinder way and the 6-year program in aviation
is being put into effect in both branches of our service.
Our Navy, according to generally accepted standards, is deficient in
cruisers. We have 10 comparatively new vessels, 22 that are old, and 8
to be built. It is evident that renewals and replacements must be provided.
This matter was thoroughly canvassed at the last session of the Congress
and does not need restatement. The bill before the Senate with the elimination
of the time clause should be passed. We have no intention of competing
with any other country. This building program is for necessary replacements
and to meet our needs for defense.
The cost of national defense is stupendous. It has increased $118,000,000
in the past four years. The estimated expenditure for 1930 is $668,000,000.
While this is made up of many items it is, after all, mostly dependent
upon numbers. Our defensive needs do not can for any increase in the number
of men in the Army or the Navy. We have reached the limit of what we ought
to expend for that purpose.
I wish to repeat again for the benefit of the timid and the suspicious
that this country is neither militaristic nor imperialistic. Many people
at home and abroad, who constantly make this charge, are the same ones
who are even more solicitous to have us extend assistance to foreign countries.
When such assistance is granted, the inevitable result is that we have
foreign interests. For us to refuse the customary support and protection
of such interests would be in derogation of the sovereignty of this Nation.
Our largest foreign interests are in the British Empire, France, and Italy.
Because we are constantly solicitous for those interests, I doubt if anyone
would suppose that those countries feel we harbor toward them any militaristic
or imperialistic design. As for smaller countries, we cer
tainly do not want any of them. We are more anxious than they are to
have their sovereignty respected. Our entire influence is in behalf of
their independence. Cuba stands as a witness to our adherence to this principle.
The position of this Government relative to the limitation of armaments,
the results already secured, and the developments up to the present time
are so well known to the Congress that they do not require any restatement.
The magnitude of our present system of veterans' relief is without precedent,
and the results have been far-reaching. For years a service pension has
been granted to the Grand Army and lately to the survivors of the Spanish-American
War. At the time we entered the World War however, Congress departed from
the usual pension system followed by our Gove2rnment. Eleven years have
elapsed since our laws were first enacted, initiating a system of compensation,
rehabilitation, hospitalization, and insurance for the disabled of the
World War and their dependents. The administration 'of all the laws concerning
relief has been a difficult task, but it can safely be stated that these
measures have omitted nothing in their desire to deal generously and humanely.
We should continue to foster this system and provide all the facilities
necessary for adequate care. It is the conception of our Government that
the pension roll is an honor roll. It should include all those who are
justly entitled to its benefits, but exclude all others.
Annual expenditures for all forms of veterans' relief now approximate
$765,000,000, and are increasing from year to year. It is doubtful if the
peak of expenditures will be reached even under present legislation for
sonic time yet to come. Further amendments to the existing law will be
suggested by the American Legion, the Veterans of Foreign Wars of the United
States, the Disabled American Veterans of the World War, and other like
organizations, and it may be necessary for administrative purposes, or
in order to remove some existing inequalities in the present law, to make
further changes. I am sure that such recommendations its may be submitted
to the Congress will receive your careful consideration. But because of
the vast expenditure now being made, each year, with every assurance that
it will increase, and because of the great liberality of the existing law,
the proposal of any additional legislation dealing with this subject should
receive most searching scrutiny from the Congress.
You are familiar with the suggestion that the various public agencies
now dealing with matters of veterans' relief be consolidated in one Government
department. Some advantages to this plan seem apparent, especially in the
simplification of administration find in the opportunity of bringing about
a greater uniformity in the application of veterans' relief. I recommend
that a survey be made by the proper committees of Congress dealing with
this subject, in order to determine whether legislation to secure this
consolidation is desirable.
The past year has been marked by notable though not uniform improvement
in agriculture. The general purchasing power of farm
products and the volume of production have advanced. This means not
only further progress, in overcoming the price disparity into which agriculture
was plunged in 1920-21, but also increased efficiency on the part of farmers
and a well-grounded confidence in the future of agriculture.
The livestock industry has attained the best balance for many years
and is prospering conspicuously. Dairymen, beef producers, an poultrymen
are receiving substantially larger returns than last year. Cotton, although
lower in price than at this time last year, was produced in greater volume
and the prospect for cotton incomes is favorable. But progress is never
uniform in a vast and highly diversified agriculture or industry. Cash
grains, hay, tobacco, and potatoes will bring somewhat smaller returns
this year than last. Present indications are, however, that the gross farm
income will be somewhat larger than in the crop year 1927-28, when the
total was $12,253,000,000. The corresponding figure for 1926-27 was $12,127,000,000,
and in 1925-26, $12,670,000,000. Still better results would have been secured
this year had there not been an undue increase in the production of certain
crops. This is particularly true of potatoes, which have sold at an unremunerative
price, or at a loss, as a direct result of overexpansion of acreage.
The present status of agriculture, although greatly improved over that
of a few years ago, bespeaks the need of further improvemen4 which calls
for determined effort of farmers themselves, encouraged and assisted by
wise public policy. The Government has been, and must continue to be, alive
to the needs of agriculture.
In the past eight years more constructive legislation of direct benefit
to agriculture has been adopted than during any other period. The Department
of Agriculture has been broadened and reorganized to insure greater efficiency.
The department is laying greater stress on the economic and business phases
of agriculture. It is lending every possible assistance to cooperative
marketing associations. Regulatory and research work have been segregated
in order that each field may be served more effectively.
I can not too strongly commend, in the field of fact finding, the research
work of the Department of Agriculture and the State experiment stations.
The department now receives annually $4,000,000 more for research than
in 1921. In addition, the funds paid to the States for experimentation
purposes under the Purnell Act constitute an annual increase in Federal
payments to State agricultural experiment stations of $2,400,000 over the
amount appropriated in 1921. The program of support for research may wisely
be continued and expanded. Since 1921 we have appropriated nearly an additional
$2,000,000 for extension work, and this sum is to be increased next year
under authorization by the Capper-Ketcham Act.
THE SURPLUS PROBLEM
While these developments in fundamental research, regulation, and dissemination
of agricultural information are of distinct hell) to agriculture, additional
effort is needed. The surplus problem demands attention. As emphasized
in my last message, the Government should assume no responsibility in normal
times for crop surplus clearly due to overextended acreage. The Government
however, provide reliable information as a guide to private effort;
and in this connection fundamental research on prospective supply and demand,
as a guide to production and marketing, should be encouraged. Expenditure
of public funds to bring in more new land should have most searching scrutiny,
so long as our farmers face unsatisfactory prices for crops and livestock
produced on land already under cultivation.
Every proper effort should be made to put land to uses for which it
is adapted. The reforestation of land best suited for timber production
is progressing and should be encouraged, and to this end the forest taxation
inquiry was instituted to afford a practical guide for public policy. Improvement
bas been made in grazing regulation in the forest reserves, not only to
protect the ranges, but to preserve the soil from erosion. Similar action
is urgently needed to protect other public lands which are now overgrazed
and rapidly eroding.
Temporary expedients, though sometimes capable of appeasing the demands
of the moment, can not permanently solve the surplus problem and might
seriously aggravate it. Hence putting the Government directly into business,
subsidies, and price fixing, and the alluring promises of political action
as a substitute for private initiative, should be avoided.
The Government should aid in promoting orderly marketing and in handling
surpluses clearly due to weather and seasonal conditions. As a beginning
there should be created a Federal farm board consisting of able and experienced
men empowered to advise producers' associations in establishing central
agencies or stabilization corporations to handle surpluses, to seek wore
economical means of merchandising, and to aid the producer in securing
returns according to the a14 of his product. A revolving loan fund should
be provided for the necessary financing until these agencies shall have
developed means of financing their operations through regularly constituted
credit institutions. Such a bill should carry authority for raising the
money, by loans or otherwise, necessary to meet the expense, as the Treasury
has no surplus.
Agriculture has lagged behind industry in achieving that unity of effort
which modern economic life demands. The cooperative movement, which is
gradually building the needed organization, is in harmony with public interest
and therefore merits public encouragement.
THE RESPONSIBILITY OF THE STATES
Important phases of public policy related to agriculture lie within
the sphere of the States. While successive reductions in Federal taxes
have relieved most farmers of direct taxes to the National Government,
State and local levies have become a serious burden. This problem needs
immediate and thorough study with a view to correction at the earliest
possible moment. It will have to be made largely by the States themselves.
It is desirable that the Government continue its helpful attitude toward
American business. The activities of the Department of Commerce have contributed
largely to the present satisfactory posi
tion in our international trade, which has reached about $9,000,000,000
annually. There should be no slackening of effort in that direction. it
is also important that the department's assistance to domestic commerce
be continued. There is probably no way in which the Government can aid
sound economic progress more effectively than by cooperation with our business
men to reduce wastes in distribution.
Continued progress in civil aviation is most gratifying. Demands for
airplanes and motors have taxed both the industry and the licensing and
inspection service of the Department of Commerce to their capacity. While
the compulsory licensing provisions of the air commerce act apply only
to equipment and personnel engaged in interstate and foreign commerce,
a Federal license may be procured by anyone possessing the necessary qualifications.
State legislation, local airport regulations, and insurance requirements
make such a license practically indispensable. This results in uniformity
of regulation and increased safety in operation, which are essential to
aeronautical development. Over 17,000 young men and women have now applied
for Federal air pilot's licenses or permits. More than 80 per cent of them
applied during the past year.
Our national airway system exceeds 14,000 miles in length and has 7,500
miles lighted for night operations. Provision has been made for lighting
4,000 miles more during the current fiscal year and equipping an equal
mileage with radio facilities. Three-quarters of our people are now served
by these routes. With the rapid growth of air mail, express, and passenger
service, this new transportation medium is daily becoming a more important
factor in commerce. It is noteworthy that this development has taken place
without governmental subsidies. Commercial passenger flights operating
on schedule have reached 13,000 miles per day.
During the next fortnight this Nation will entertain the nations of
the world in a celebration of the twenty-fifth anniversary of the first
successful airplane flight. The credit for this epoch-making achievement
belongs to a citizen of our own country, Orville Wright.
CUBAN PARCEL POST
I desire to repeat my recommendation of an earlier message, that Congress
enact the legislation necessary to make permanent the Parcel Post Convention
with Cuba, both as a facility to American commerce and as a measure of
equity to Cuba in the one class of goods which that country can send here
by parcel post without detriment to our own trade.
"MAINE" BATTLESHIP MEMORIAL
When I attended the Pan American Conference at Habana, the President
of Cuba showed me a marble statue made from the original memorial that
was overturned by a storm after it was erected on the Cuban shore to the
memory of the men who perished in the destruction of the battleship Maine.
As a testimony of friendship and appreciation of the Cuban Government and
people lie most gen
erously offered to present this to the. United States, and I assured
him of my pleasure in accepting it. There is no location in the White House
for placing so large and heavy a structure, and I therefore urge the Congress
to provide by law for some locality where it can be set up.
In previous annual messages I have suggested the enactment of laws to
promote railroad consolidation with the view of increasing the efficiency
of transportation and lessening its cost to the public. While, consolidations
can and should be made under the present law until it is changed, vet the
provisions of the act of 1920 have not been found fully adequate to meet
the needs of other methods of consolidation. Amendments designed to remedy
these defects have been considered at length by the respective committees
of Congress and a bill was reported out late in the last session which
I understand has the approval in principle of the Interstate Commerce Commission.
It is to be hoped that this legislation may be enacted at an early date.
Experience has shown that the interstate commerce law requires definition
and clarification in several other respects, some of which have been pointed
out by the Interstate Commerce Commission in its annual reports to the
Congress. It will promote the public interest to have the Congress give
early consideration to the recommendations there made.
The cost of maintaining the United States Government merchant fleet
has been steadily reduced. We have established American flag lines in foreign
trade where they had never before existed as a means of promoting commerce
and as a naval auxiliary. There have been sold to private American capital
for operation within the past few years 14 of these lines, which, under
the encouragement of the recent legislation passed by the Congress, give
promise of continued successful operation. Additional legislation from
time to time may be necessary to promote future advancement under private
Through the cooperation of the Post Office Department and the Shipping
Board long-term contracts are being made with American steamship lines
for carrying mail, which already promise the construction of 15 to 20 new
vessels and the gradual reestablishment of the American merchant marine
as a private enterprise. No action of the National Government has been
so beneficial to our shipping. The cost is being absorbed to a considerable
extent by the disposal of unprofitable lines operated by the Shipping Board,
for which the new law has made a market. Meanwhile it should be our policy
to maintain necessary strategic lines under the Government operation until
they can be transferred to private capital.
In my message last year I expressed the view that we should lend our
encouragement for more good roads to all the principal points on this hemisphere
South of the Rio Grande. My view has not changed.
The Pan American Union has recently indorsed it. In some of the countries
to the south a great deal of progress is being made in road building. In,
Others engineering features are often exacting and financing difficult.
As those countries enter upon programs for road building we should be ready
to contribute from our abundant experience to make their task easier of
accomplishment. I prefer not to go into civil life to accomplish this end.
We already furnish military and naval advisors, and following this precedent
we could draw competent men from these same sources and from the Department
We should provide our southern neighbors, if they request it, with such
engineer advisors for the construction of roads and bridges. Private t1literests
should look with favor upon all reasonable loans sought by these countries
to open main lines of travel. Such assistance should be given especially
to any project for a highway designed to connect all the countries on this
hemisphere and thus facilitate, intercourse and closer relations among,
AIR MAIL SERVICE
The friendly relations and the extensive, commercial intercourse with
the Western Hemisphere to the south of us are being further cemented by
the establishment and extension of air-mail routes. We shall soon have
one from Key West, Fla., over Cuba, Haiti, and Santo Domingo to San Juan,
P. R., where it will connect with another route to Trinidad. There will
be another route from Key West to the Canal Zone, where connection will
be made with a route across the northern coast of South America to Paramaribo.
This will give us a circle around the Caribbean under our own control..
Additional connections will be made at Colon with a route running down
the west coast of South America as far as Conception, Chile, and with the
French air mail at Paramaribo running down the eastern coast of South America.
'The air service already spans our continent, with laterals running to
Mexico and Canada, and covering a daily flight of over 28,000 miles, with
an average cargo of 15 000 pounds.
Our river and harbor improvements are proceeding with vigor. In the
past few years Ave have increased the appropriation for this regular work
$28,000,000, besides what. is to be expended on flood control. The total
appropriation for this year was over $91,000,000. The Ohio River is almost
ready for opening; work on the Missouri and other rivers is under way.
In accordance with the Mississippi flood law Army engineers are making
investigations and surveys on other streams throughout the country with
a view to flood control, navigation, waterpower, and irrigation. Our bar(re
lines are being operated under generous appropriations, and negotiations
are developing relative to the St. Lawrence waterway. To Secure the largest
benefits from all these waterways joint rates must be established with
the railroads, preferably by agreement, but otherwise as a result of congressional
We have recently passed several river and harbor bills. The work ordered
by the Congress not, yet completed, will cost about $243,
000,000, besides the hundreds of millions to be spent on the Mississippi
flood way. Until we can see our way out of this expense no further river
and harbor legislation should be passed, as expenditures to put it into
effect would be four or five years away.
IRRIGATION OF ARID LANDS
For many years the Federal Government has been committed to the wise
policy of reclamation and irrigation. While it has met with some failures
due to unwise selection of projects and lack of thorough soil surveys,
so that they could not be placed on a sound business basis, on the whole
the service has been of such incalculable benefit in so many States that
no one would advocate its abandonment. The program to which we are already
committed, providing for the construction of new projects authorized by
Congress and the completion of old projects, will tax the resources of
the reclamation fund over a period of years. The high cost of improving
and equipping farms adds to the difficulty of securing settlers for vacant
farms on federal projects.
Readjustments authorized by the reclamation relief act of May 25, 1926,
have given more favorable terms of repayment to settlers. These new financial
arrangements and the general prosperity on irrigation projects have resulted
in increased collections by the Department of the Interior of charges due
the reclamation fund. Nevertheless, the demand for still smaller yearly
payments on some projects continues. These conditions should have consideration
in connection with any proposed new projects.
For several years the Congress has considered the erection of a dam
on the Colorado River for flood-control, irrigation, and domestic water
purposes, all of which ma properly be considered as Government functions.
There would be an incidental creation of water power which could be used
for generating electricity. As private enterprise can very well fill this
field, there is no need for the Government to go into it. It is unfortunate
that the States interested in this water have been unable to agree among
themselves. Nevertheless, any legislation should give every possible safeguard
to the present and prospective rights of each of them.
The Congress will have before it, the detailed report of a special board
appointed to consider the engineering and economic feasibility of this
project. From the short summary which I have seen of it, 11 judge they
consider the engineering problems can be met at somewhat increased cost
over previous estimates. They prefer the Black Canyon site. On the economic
features they are not so clear and appear to base their conclusions on
many conditions which can not be established with certainty. So far as
I can judge, however, from the summary, their conclusions appear sufficiently
favorable, so that I feel warranted in recommending a measure which will
protect the rights of the States, discharge the necessary Government functions,
and leave the electrical field to private. enterprise.
The development of other methods of producing nitrates will probably
render this plant less important for that purpose than formerly. But we
have it, and I am told it still provides a practical method of making nitrates
for national defense and farm fertilizers. By dividing the property into
its two component parts of power and nitrate plants it would be possible
to dispose of the power, reserving the right to any concern that wished
to make nitrates to use any power that might be needed for that purpose.
Such a disposition of the power plant can be made that will return in rental
about $2,000,000 per year. If the Congress would giant the Secretary of
War authority to lease the nitrate plant on such terms as would insure
the largest production of nitrates, the entire property could begin to
function. Such a division, I am aware, has never seemed to appeal to
the Congress. I should also gladly approve a bill granting authority to
lease the entire property for the production of nitrates.
I wish to avoid building another, (lam at public expense. Future operators
should provide For that themselves. But if they were to be required to
repay the cost of such dam with tile prevailing commercial rates for interest,
this difficulty will be considerably lessened. Nor do I think this property
should be made a vehicle for putting the United States Government indiscriminately
into the private and retail field of power distribution and nitrate sales.
The practical application of economy to the resources of the country
calls for conservation. This does not mean that every resource should not
be developed to its full degree, but it means that none of them should
be wasted. We have a conservation board working on our oil problem. This
is of the utmost importance to the future well-being of our people in this
age of oil-burning engines and tile general application of gasoline to
transportation. The Secretary of the Interior should not be compelled to
lease oil lands of the Osage Indians when the market is depressed and the
future supply is in jeopardy.
While the area of lands remaining in public ownership is small, compared
with the vast area in private ownership, the natural resources of those
in public ownership are of immense present and future value. This is particularly
trite as to minerals and water power. The proper bureaus have been classifying
these resources to the end that they may be conserved. Appropriate estimates
are being submitted, in the Budget, for the further prosecution of this
The policy of restrictive immigration should be maintained. Authority
should be granted the Secretary of Labor to give immediate preference to
learned professions and experts essential to new industries. The reuniting
of families should be expedited. Our immigration and naturalization laws
might well be codified.
In its economic life our country has rejected the long accepted law
of a limitation of the wage fund, which led to pessimism and despair because
it was the doctrine of perpetual poverty, and has substituted for it the
American conception that the only limit to profits and wages is production,
which is the doctrine of optimism and hope because it leads to prosperity.
Here and there the councils of labor are still darkened by the theory that
only by limiting individual production can there be any assurance of permanent
employment for increasing numbers, but in general, management and wage
earner alike have become emancipated from this doom and have entered a
new era in industrial thought which has unleashed the productive capacity
of the individual worker with an increasing scale of wages and profits,
the end of which is not yet. The application of this theory accounts for
our widening distribution of wealth. No discovery ever did more to increase
the happiness and prosperity of the people.
Since 1922 increasing production has increased wages in general 12.9
per cent, while in certain selected trades they have run as high as 34.9
per cent and 38 per cent. Even in the boot and shoe shops the increase
is over 5 per cent and in woolen mills 8.4 per cent, although these industries
have not prospered like others. As the rise in living costs in this period
is negligible, these figures represent real wage increases.
The cause of constructive economy requires that the Government should
cooperate with private interests to eliminate the waste arising from industrial
accidents. This item, with all that has been done to reduce it, still reaches
enormous proportions with great suffering to the workman and great loss
to the country.
WOMEN AND CHILDREN
The Federal Government should continue its solicitous care for the 8,500,000
women wage earners and its efforts in behalf of public health, which is
reducing infant mortality and improving the 91odily and mental condition
of our citizens.
The most marked change made in the civil service of the Government in
the past eight years relates to the increase in salaries. The Board of
Actuaries on the retirement act shows by its report, that July 1, 1921
the average salary of the 330,047 employees subject to the act was J1,307,
while on June 30, 1927, the average salary of the corresponding, 405,263
was $1,969. This was an increase in six years of nearly 53 per cent. On
top of this was the generous increase made at the last session of the Congress
generally applicable to Federal employees and another bill increasing the
pay in certain branches of the Postal Service beyond the large increase
which was made three years ago. This raised the average level from $1,969
to $2,092, making an increase in seven years of over 63 per cent. While
it is well known that in the upper brackets the pay in the Federal
service is much smaller than in private employment, in the lower brackets,
ranging well up over $3,000, it is much higher. It is higher not only in
actual money paid, but in privileges granted, a vacation of 30 actual working
days, or 5 weeks each year, with additional time running in some departments
as high as 30 days for sick leave and the generous provisions of the retirement
act. No other body of public servants ever occupied such a fortunate position.
Through the Bureau of Education of the Department of the Interior the
Federal Government, acting in an informative and advisory capacity, has
rendered valuable service. While this province be7crigspeculiarly to the
States, yet the promotion of education and efficiency in educational methods
is a general responsibility of the Federal Government. A survey of negro
colleges and universities in the United States has just been completed
l7y the Bureau of Education through funds provided by the institutions
themselves and through private sources. The present status of negro higher
education was determined and recommendations were made for its advancement.
This was one of the numerous cooperative undertakings of the bureau. Following
the invitation of the Association of Land Grant Colleges and Universities,
he Bureau of Education now has under way the survey of agricultural colleges,
authorized by Congress. The purpose of the survey is to ascertain the accomplishments,
the status, and the future objectives of this type of educational training.
It is now proposed to undertake a survey of secondary schools, which educators
insist is timely and essential.
We, have laid out a public building program for the District of Columbia
and the country at large runni110' into hundreds of millions of dollars.
Three important structures and one annex are already, under way and one
addition has been completed in the City of Washington. in the country sites
have been acquired, many buildings are in course of construction, and some
are already completed. Plans for all this work are being prepared in order
that it may be carried forward as rapidly as possible. This is the greatest
building program ever assumed by this Nation. It contemplates structures
of utility and of beauty. When it reaches completion the people will be
well served and the Federal city will be supplied with the most beautiful
and stately public buildings which adorn any capital in the world.
THE AMERICAN INDIAN
The administration of Indian affairs has been receiving intensive study
for several years. The Department of the Interior has been able to provide
better supervision of health, education, and industrial advancement of
this native race through additional funds provided by the Congress. The
present cooperative arrangement existing between the Bureau of Indian Affairs
and the Public Health Service should be extended. The Government's responsibility
to the American Indian has been acknowledged by annual increases in appropria.l
tions to fulfill its obligations to them and to hasten the time when
Federal supervision of their affairs may be properly and safely terminated.
The movement in Congress and in some of the State legislatures for extending
responsibility in Indian affairs to States should be encouraged. A complete
participation by the Indian in our economic life is the end to be desired.
For 65 years now our negro Population has been under the peculiar care
and solicitude of the National Government. The progress which they have
made in education and the professions, in wealth and in the arts of civilization,
affords one of the most remarkable incidents in this period of world history.
They have demonstrated their ability to partake of the advantages of our
institutions and to benefit by a free and more and more independent existence.
Whatever doubt there may have been of their capacity to assume, the status
granted to them by the Constitution of this Union is being rapidly dissipated.
Their cooperation in the life of the Nation is constantly enlarging.
Exploiting the Negro problem for political ends is being abandoned and
their protection is being increased by those States in which their percentage
of population is largest. Every encouragement should be extended for t
le development of the race. The colored people have been the victims of
the crime of lynching, which has in late years somewhat decreased. Some
parts of the South already have wholesome laws for its restraint and punishment.
Their example might well be followed by other States, and by such immediate
remedial legislation as the Federal Government can extend under the Constitution.
Under the guidance of Governor General Stimson the economic and political
conditions of the Philippine Islands have been raised to a standard never
before surpassed. The cooperation between his administration and the people
of the islands is complete and harmonious. It would be an advantage if
relief from double taxation could be granted by the Congress to our citizens
doing business in the islands.
Due to the terrific storm that swept Porto Rico last September, the
people of that island suffered large losses. The Red Cross and the War
Department went to their rescue. The property loss is being, retrieved.
Sugar, tobacco, citrus fruit, and coffee, all suffered damage. The first
three can largely look after themselves. The coffee growers will need some
assistance, which should be *extended strictly on a business basis, and
only after most careful investigation. The people of Porto Rico are not
asking for charity.
DEPARTMENT OF JUSTICE
It is desirable that all the legal activities of the Government be consolidated
under the supervision of the Attorney General. In
1870 it was felt necessary to create the Department of Justice for this
purpose. During the intervening period, either through legislation creating
law officers or departmental action, additional legal positions not under
the supervision of the Attorney General have been provided until there
are now over 900. Such a condition is as harmful to the interest of the
Government now as it was in 1870, and should be corrected by appropriate
SPECIAL GOVERNMENT COUNSEL
In order to prosecute the oil cases, I suggested and the Congress enacted
a law providing for the appointment of two special counsel. They have pursued
their work with signal ability, recovering all the leased lands besides
nearly $30,000,000 in money, and nearly $17,000,000 in other property.
They find themselves hampered by a statute, which the Attorney General
construes as applying to them, prohibiting their appearing for private
clients before any department. For this reason, one has been compelled
to resign. No good result is secured by the application of this rule to
these counsel, and as Mr. Roberts has consented to take reappointment if
the rule is abrogated I recommend the passage of an amendment to the law
creating their office exempting them from the general rule against taking
other cases involving the Government.
The country has duly adopted the eighteenth amendment. Those who object
to it have the right to advocate its modification or repeal. Meantime)
it is binding upon the National and State Governments and all our inhabitants.
The Federal enforcement bureau is making every effort to prevent violations,
especially through smuggling, manufacture, and transportation, and to prosecute
generally all violations for which it can secure evidence. It is bound
to continue this policy. Under the terms of the Constitution, however,
the obligation is equally on the States to exercise the power which they
have through the executive, legislative. judicial, and police branches
of their governments in behalf of enforcement. The Federal Government is
doing and will continue to do all it can in this direction and is entitled
to7the active cooperation of the States.
The country is in the midst of an era of prosperity more extensive and
of peace more permanent than it has ever before experienced. But, having
reached this position, we should not fail to comprehend that it can easily
be lost. It needs more effort for its support than the less exalted places
of the world. We shall not be permitted to take our case, but shall continue
to be required to spend our days in unremitting toil. The actions of the
Government must command the confidence of the country. Without this, our
prosperity would be lost. We must extend to other countries the largest
measure of generosity, moderation, and patience. In addition to dealing
justly, we can well afford to walk humbly.
The end of government is to keep open the opportunity for a more
abundant life. Peace and prosperity are not finalities; they are only
methods. It is too easy under their influence for a nation to become selfish
and degenerate. This test has come to the United States. Our country has
been provided with the resources with which it can enlarge its intellectual,
moral, and spiritual life. The issue is in the hands of the people. Our
faith in man and God is the justification for the belief in our continuing